We live in a tough economic climate that has affected each and every one of us in one-way or another. There are no simple answers, only questions, and a lingering doubt about whether or not the economy will actually improve. Every month, HOAs all across South Florida are forced to do a death-defying balancing act of managing the same number of residences with an ever-decreasing pile of money.
Why is the money disappearing? The simple answer is “it’s the economy, stupid!” When individuals have to choose which bills to pay and which to simply shove into the trashcan, the first one that falls by the wayside is the monthly maintenance for the HOA. That hurts everyone, but it really hurts when those individuals continue to consume the resources of the community and don’t pay their fair share.
Most of the time, cases like these ends up in foreclosure, oftentimes by the lender, but sometimes by the association itself. Then, the question becomes how can the association recoup their money?
“Can an association get back any of the money it is owed after a bank forecloses? The answer is yes, but only if the association knows it can and then makes the effort to collect it. It is money being left on the floor. All the association has to do is reach to pick it up.
What boards need to know is that when a bank forecloses, takes title and leaves the association with an unpaid debt, the money is still owed to the association and may be attempted to be recovered. The recovery is not always easy. It may not always be fruitful. Boards of directors need to ask this simple question: “is there any way that we can go after the former owner and get back the money that is owed to us?” My advice to association boards is to take nothing for granted and treat this lost money as if it were a debt personally owed to you. Would you walk away from it? Instead of getting angry, do something to recover your money,” stated Mitch Drimmer is a licensed CAM and is the Vice President of Association Financial Services, a specialty finance, business process outsourcing, and accredited collection agency specializing in community associations.
His company currently provides services to more than 50 associations in Palm Beach County, and all of them have benefited in one way or another from that service.
Some of the services they provide include:
- AFS FACS (Funding And Collections Service): This allows AFS to engage delinquent owners in the collections process and fund up to 6 months of regular assessments that is owed to the association. It’s a down payment on the money we will collect on your behalf. AFS, through its network of proven and effective collections attorneys, will provide an end to end collection solution that includes legal services, we will fund all collection costs to foreclose on units, and if we don't collect the legal costs and fees the association does not pay.
- AFS CACS (Community Association Collections Service) This allows AFS to engage delinquent owners with a no risk collection solution. There is no cash advance with CACS but we will advance all collection costs. AFS, through its network of proven and effective collections attorneys, can provide an end to end collection solution that includes legal services and if we don't collect the association does not have to pay.
- GAP (Guaranteed Assessment Program): In conjunction with Advance Insurance E & S Insurance Group we can provide an “A” rated insurance policy, issued directly to the Association, extending the Florida Statutory cap to 24 past due assessments without the 1% Florida Statute limitation. A separate GAP Services Agreement provides claims service under the Fair Debt Collection Practices Act. Immediate coverage for the next 24 monthly assessment payments on each unit that defaults, including those already in default. Six months of coverage is included for those already in Foreclosure. GAP includes all attorney fees, collection costs, and court costs without recourse to the Association. If GAP cannot collect these fees and costs, they are paid by GAP.
- AFS WOR (Write Off Recovery): If in the past, or if in the future, a first mortgage first closure presents the association with a "write off," let AFS pursue the offending debtor and recover what was once considered "bad debt." This program provides collections of "bad debt" on a contingency fee basis.
- AFS Loans & Lines of Credit: When the bank says NO AFS says YES.
- CEU classes for CAMS & Workshops for Boards of Directors: We offer free CEU-credit courses for licensed CAMs and complimentary workshops for board members. Our lively and enjoyable courses are approved by the State of Florida's Department of Business & Professional Regulation and are packed with information you can use. All at no charge!
“In Florida there are debt collection agencies that have focused on the community association industry and are actively working to collect community association debt owed on exclusively a contingency basis. If you are a member of a board of directors, it’s time that you considered what is owed, and how you can get it back. I’m sure that there is a debt collection agency that would be glad to speak at your next board meeting. And if the board gives them the green light, they will be happy to contact that former owner of unit 101 and pursue recovery of the association’s money” Mr. Drimmer concluded.
Be sure to subscribe to this column, and stay abreast of issues involving you, the homeowners of Palm Beach County! If you've had any issues with your HOA that you'd like me to try and delve into, and possibly write about later, please let me know. Also, if you'd like to join the discussion on Twitter, you can find me at http://twitter.com/#!/faborplumbs.
Comments