HOA and Condo Assessment Forbearance Agreements

I receive a lot of questions about assessment collections from owners who are in delinquency with their assessment payments. A lot of people do not understand the extent of the rights of the association if they do not pay. It’s not like a mortgage where an owner whose home is foreclosed then can expect no recourse. An HOA or Condo Association usually has the right to pursue an owner for the delinquency and all collection costs, even after the lender forecloses. Thus, the association does have the upper hand in negotiating whether it relates to a short sale or settlement after foreclosure, or a payment plan to catch up or pay off the debt.

Here are some questions I received in an email:

“I had owed the association and they in turn settled for a Forbearance
Agreement that was in September with all the accounting and then
a new one in November. I requested a Meet & Confer that never
happened due to the president leaving and I could not attend twice.

In I was forced to pay in full and the Association Attorney forced
me to pay this even though I explain to her numerous of time that
this was incorrect. My issue is that I have over paid over $1,000 and
we have other charges that can not be explained.

I would like to take the board and the management to small claims
court. Can I do this or is their a process that I have missed, like
mediation.”

If an owner pays the debt in full he or she can ask for mediation – the board is not required to participate. However, it might be worth making the formal request if you prefer mediation because from what I hear, some small claims court judges want to push the parties to mediate before hearing such matters, and others don’t. You would want to make the request in writing about the mediation. If you decide not to, and proceed right to court, it is hard to anticipate whether the matter would be heard, but I think there is a good chance. Pushing the parties back into mediation does add a layer of costs. And I would imagine getting an association to pay back any portion of the money collected on a delinquent assessment account would be like pulling teeth.

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