Associations Should Not Waive Assessments
Homeowner and condominium associations should continue to address delinquent accounts even during the COVID-19 pandemic to avoid significant harm to association finances. The associations that successfully come out of this crisis will be those in which the members understand the payment of assessments is a “must pay” bill and where the Board is flexible in working with the members to enable payments to continue
In times of financial distress, homeowners in condominiums and homeowners’ associations facing personal hardship may ask their community association to consider stopping assessment collections. However, assessments are the lifeblood of community associations, and the community could crumble without that financial support. Unlike many businesses that potentially have additional assets that can keep it afloat for a time, community associations only have one revenue stream: assessments.
Most governing documents, as well as state laws, do not allow for HOA and condominium assessments to be waived and doing so could also inadvertently harm the association in the process. For this reason, Boards should not waive assessments even during times of crisis.
Like many businesses, community associations have an annual budget which is calculated based on their projected expenses for the year. Waiving or not collecting assessments could have a devastating impact on the associations’ obligation to maintain and repair the common areas and provide normal services.
Refusing to waive assessments does not mean community associations cannot work with homeowners who are facing financial hardships. While the Board of Directors should not waive assessments, Boards should consider waiving late fees and interest for late payments resulting from COVID-19 financial distress to allow for some relief for owners. Boards may also give owners extra time to pay assessments without penalty, or offer flexible payment plans to help give owners time to get back on track after financial struggles.
Community associations are wise to communicate early and often with their owners about the payment of assessments and HOA collections. Boards should also encourage owners to reach out to the Board if they are facing a personal financial situation in order to find a solution that fits their needs. By keeping the lines of communication open as the COVID-19 pandemic evolves, Boards can work with owners without waiving assessments.
Commonly Asked Collections Q&A
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NowackHoward is home to some of the best HOA attorneys in Georgia. Our lawyers are fielding questions from HOA Board members everyday related to the COVID-19 pandemic. We are here to help you find the best ways to maintain your community’s health and safety, as well as the functionality of the association to remain strong in the face of new challenges.