Community Association Collection Procedures And Policies During COVID-19

Condominium Associations and Homeowners Associations are presently faced with unique once in a century legal issues as a result of the global pandemic. From indefinitely closing down pools, clubhouses, and gyms, to restricting visitors, let alone the fear and concern involving the virus itself, many hard choices are being made by an association’s Boards of Directors. Collection policies and procedures are also up for debate and consideration. The health crisis caused by the virus’ outbreak is leading to massive layoffs with historic unemployment figures. Naturally, many owners will feel a dramatic economic impact jeopardizing their ability to meet their regularly assessment obligations. Questions abound as to whether community associations should modify their assessment collection policy as a result. The regular assessments of a community are its life blood. Without this revenue an association cannot pay its property management company, landscaper, pool service technician, among many other vendors and professionals. These service providers keep the community safe, beautiful, and are imperative for most communities to function at a normal level. Consequently, community associations must do all that is necessary to keep assessment revenue flowing in order for the association to meet its regular ongoing financial obligations. Furthermore, the governing documents of a community association mandate that associations collect those assessments from the owners as laid out in their annual budgets. To place a “hold” on owners’ obligations to pay assessments would be contrary to an association’s very governing documents and likely deviates from the strictures of Florida’s Condominium Act or Florida’s Homeowners’ Association Act. Therefore, an association must neither formally nor informally advise owners that regular assessments need not be remitted. However, if an owner falls behind in their payment obligation an association does have flexibility to craft payment plans for an owner in financial straits. An association can also modify existing policies by extending the time frames for forwarding delinquent accounts to legal counsel for collection purposes. Such an effort would afford the delinquent owner more time bring the account current before formal collection efforts commence which would otherwise increase the owner’s liability. Although, an association should not institute a policy of freezing all collection procedures altogether. For one, such a decision would likely encourage other owners to withhold assessments if it became widely known that the association would take no action in response to a non-payment event. Secondly, ceasing all collection efforts could be viewed as tantamount to not collecting assessments at all, again a violation of an association’s governing documents and applicable condominium/homeowners’ association statutory authority. Unquestionably today’s crisis tasks Boards of Directors with difficult decisions involving their collection policies and procedures. Empathy through flexibility, while steadfastly maintaining owners’ formal regular assessment obligation to their association, is a fair and statutorily compliant approach.