The economic impact of the COVID-19 pandemic has caused community association leaders to reflect on their existing assessment collection policies.  In implementing circumstantial policies, it is important to recognize that an association cannot function without payment of assessments from its members. By following these fundamental guidelines, an association can address the needs of its members without compromising essential functions of the community:

  • Do not waive, reduce, or delay any portion of the annual assessment.  Maintaining the existing schedule of assessments removes any uncertainty about what is owed and when it is due.  There are many individuals who will pay the full amount owed on time.
  • Do not declare to the membership that late fees, interest, or collection measures will be suspended.  Doing so may have the unintended consequence of discouraging payment from those who would have otherwise paid. 
  • Do continue to negotiate settlement of delinquent accounts with members.  Agreements should be made on a case-by-case basis, identify a schedule for payment, and secure remedies for the association in the event of default.  If the terms provide for waiver of interest or late fees, this should only occur upon final payment.
  • Do continue to proceed with normal collection activities, including letters, liens, lawsuits, and garnishments.  Doing so can be effective in encouraging settlement or securing a better position for the association if settlement cannot be achieved.

Some members were delinquent in payment of assessments before the pandemic began and more will become delinquent before emergency measures have been lifted.  The decisions made now, will have a significant impact on the association’s financial wellbeing when the world returns to normal (and it will return to normal).  Consult with your community association attorney for more information.