How to Collect Delinquent
HOA Dues

Ensuring that all homeowners pay their HOA assessments on time is vital for maintaining community services and funding essential repairs. If dues go unpaid, it can strain the budget and force other members to cover shortfalls. This guide walks you through a clear, step-by-step process to collect delinquent dues—written in plain language for anyone new to HOAs.

1. Know Your Legal Framework

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Before taking action, review your governing documents (CC&Rs, bylaws, and any state statutes):

• Payment deadlines and due dates

• Grace periods for late payments

• Late fees and interest rates the HOA may impose

• Collection remedies available (e.g., liens, small claims)

Tip: Having well-defined policies in your documents makes enforcement easier and reduces homeowner disputes.

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2. Send Friendly Reminders First

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Start with a courtesy notice shortly after the due date:

• Format: Email or mailed postcard

• Content:

  • Amount owed

  • Due date originally missed

  • New payment deadline (e.g., within 10 days)

• Tone: Polite and informative—assume it may be an oversight

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3. Issue a Formal Late Notice

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If there’s no response to the courtesy notice, send a formal demand letter:

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Element                                                      What to Include

Account Details                                      Original due date, total owed (dues + late fees)

Payment Instructions                           Accepted payment methods, where to send payment

Consequences                                       Outline next steps (e.g., lien filing)

Deadline                                                    Specify a firm date (e.g., within 30 days)

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Bold emphasis: Clearly state that failure to pay by the deadline will result in further action.

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4. Apply Late Fees & Interest

Most HOAs are permitted to charge:

• Flat late fee (e.g., $25)

• Monthly interest (e.g., 1.5% of the outstanding balance)

Best practice: Calculate fees in accordance with your governing documents and apply them consistently.

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5. Offer a Payment Plan

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Some homeowners struggle financially. A custom payment plan can:

• Encourage partial payments over time

• Reduce the HOA’s administrative burden chasing small balances

• Preserve community harmony

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Key components of a plan:

1. Total amount owed

2. Number of installments

3. Due dates for each installment

4. Any fees or interest included

Note: Require the homeowner to sign a simple agreement outlining these terms.

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6. Escalate with Legal Remedies

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If informal steps fail, you can escalate:

1. File a lien

   • Places a public claim against the homeowner’s property

   • Must follow state-specific procedures (filing forms, notices)

2. Engage an attorney or collection agency

   • For accounts with significant balances

   • They can handle formal demands, court filings, and garnishments

3. Small Claims Court

   • Suits for unpaid assessments when balances are modest

   • Cost-effective for the HOA if legal fees would otherwise exceed recoveries

Tip: Always weigh the cost vs. benefit—legal actions incur fees and may take months to resolve.

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7. Maintain Clear Communication

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Throughout the process, keep records of:

• All notices sent (dates, methods)

• Phone calls or emails with the homeowner

• Signed payment agreements

Transparent communication can prevent misunderstandings and demonstrates the HOA’s fairness if disputes arise.

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8. Review & Update Your Policy Annually

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After completing a collection cycle, ask:

• Were our late fees and interest rates effective deterrents?

• Did homeowners respond better to reminders or payment plans?

• Are our legal remedies cost-effective?

Use these insights to refine your delinquency policy—keeping it both firm and fair.

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Next Steps

1. Draft or update your delinquency notice templates.

2. Train your board or property manager on the collection timeline.

3. Communicate the process to all homeowners (e.g., via newsletter) so everyone understands the standards up front.

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By following these structured steps—polite reminders, formal notices, assessed fees, payment plans, and, if necessary, legal actions—your HOA can effectively manage delinquent accounts and keep community finances on track.