You are likely a new manager or board member reviewing advice from the HOA’s third-party collection solution to recover delinquent assessments from an owner who relocated without leaving any forwarding address. They recommend a skip trace to determine the debtor’s whereabouts so mandatory collection notices can be served. “A skip trace?” you mutter, “What is that, and why do we need to pay for one?”
Since you’re reading this, you must have asked your favorite search engine that same question, and this article popped up. Rest assured, you clicked on the right one. You will soon know all you need to know about the skip trace.
Skip Trace Defined
Skip Tracing is a means of locating a person, in this case, to collect a debt owed to the association. A Skip Tracer is a person hired to perform the skip trace. The phrase came from the expression “to skip town,” meaning to leave with the intention of not being found. So, the hired person tracks, or traces, the “skip.”
When a person owing money skips town to avoid paying, a skip trace is the first required step in the collection process. Once the individual is located, the collection solution can contact them to discuss resolving the debt. It can also provide them with the collection notices required by the HOA’s governing documents and state and federal laws.
Do HOAs Need Skip Traces?
Yes! It is not uncommon for a person to own a property or properties they do not reside in. Furthermore, when someone falls behind on assessments, they often feel embarrassed and ashamed. This increases the odds that they may try to skip town so they don’t have to face the neighbors burdened with that debt. Without skip traces, boards would have difficulty locating these individuals, making it hard to uphold their fiduciary duty to collect what is owed. With skip traces, collecting debt from these folks becomes a lot easier.
That’s why skip traces are one of the services Axela offers its clients – we are all about making collections more accessible, affordable, and effective. For more on the art of collections, click here for our free guide.
How is a Skip Trace Conducted?
Performing a skip trace is easier than ever in the internet age. Unless you are “off-grid,” you leave a digital footprint behind that can be traced to locate you. Even if you are “off-grid,” your location may be in a public records database. Skip Tracers search public records, social media, credit reports, and legal databases. They may also use property appraisers and court records.
What Information Does a Skip Trace Provide?
While each person’s information footprint is unique, some common data we can obtain via a skip trace includes:
- email addresses
- phone numbers
- social media profiles
- credit reports
- current address
- previous addresses
- bankruptcy information
- loans
- assets
- tax information
- liens and judgments
- probate information
- and criminal history
Is Anyone Allowed to Perform a Skip Trace?
Since a skip trace uncovers so much personal information, only a licensed entity, such as a collection agency or someone with a warrant, can perform one. The entity or individual performing the skip trace must have a solid reason, and the process requires a lot of paperwork. Fortunately, the law sees collecting a debt owed to the HOA as a valid reason for a skip trace, and at Axela, we don’t mind the paperwork.
We Did a Skip Trace. Now What?
Once the collections team has the skip trace data, such as contact and address information, we can work on recovering the money owed. This may include calling the debtor, sending FDCPA-compliant demand notices, filing a lien if one was not already correctly recorded, or notifying the mortgage holder (aka lender) of the debt according to any existing condo or PUD rider.
Want to Learn More About HOA Collections?
If you want to learn more about collecting debts owed to your HOA or condo association, please contact us for a Free Collections Analysis. Let us show you how to manage your collections without spending a fortune and fairly and equitably for all. Partnering with Axela is “How the Future Collects.”
