Getting Ahead of the Curve for HOA Fees in Texas
Collecting homeowners association (HOA) dues in a timely manner is a hot button for most communities. But it doesn’t have to be something you fear each year. Although there is no clear way to eliminate delinquencies altogether, we believe there are some simple steps you can take to minimize the impact on your association and get ahead of the collections curve.
1. Provide education: Even a little goes a long wayYou may assume that some things go without saying, but homeowners can be forgetful. We recommend going back to the basics. Start a few months in advance, and include reminders in your community-wide communications that answer some common questions:
- How much are my dues? This may be something you feel like you’ve communicated aptly. However, it never hurts to repeat this often to lessen confusion.
- When are my assessments due? Although you may have already distributed the dues statement, this does not mean that all the homeowners have opened the envelope or that the letter hasn’t been lost in the mail. You may want to reiterate this several times, especially as the date gets closer.
- How can I pay my dues? Do you offer an online payment option? Is there a location where homeowners can pay dues in person? Clearly communicating this information is important to help ensure timely payment.
- Can I split my dues into monthly payments? Given the opportunity, most homeowners would probably jump at the chance to split their dues over the course of the year instead of having to pay annually or bi-annually. Whether your community facilitates the scheduling of more frequent payments or homeowners can just do this on their own, this is a great option that can keep many people out of arrears.
2. Offer payment plansUnder Texas state law, homeowners have the right to request a payment installment plan. However, it is up to the board of directors to approve a requested plan. The end goal should always be to collect payment, right? With that said, it’s typically in the best interest of the association to accept a payment plan request.
Although the board can set parameters for a payment plan, your association must adhere to certain legislative requirements. For instance, the plan must extend payments a minimum of 90 days. We recommend that you limit the length of the plan so that installments end before the next assessment is due.
3. Communicate any changes.Properly communicating any changes in the dues collections process now will prevent headaches later on. This means using multiple channels and repeating the message multiple times. Make sure to communicate even the smallest changes, including:
- Dues increases. It is very important to communicate a dues increase. Even homeowners who always pay on time or ahead of schedule might come up short if they are unaware of this change.
- Recurring payments. If you use a third-party company to collect recurring electronic payments and your association recently increased its dues, make sure your homeowners are aware that they may need to manually adjust the payment amount.
- Drop box address. If your payment options include mailing a check to a central drop box, be sure that homeowners can readily access the correct address.
- Forms of payment. Whether you are now accepting a new form of payment, doing away with one or making no change at all, it never hurts to communicate to your homeowners which forms of payment you are currently accepting.