Do Your Due Diligence When Choosing An HOA Collection Agency

A Buyers Guide to Choosing an HOA Collection Agency for Management Companies and Community Associations

If you are on a board of directors of a Condo or HOA or you manage one there will be delinquencies. If you have decided that your community association attorney does not get the job done in recovering your money, you may want to consider choosing an HOA collection agency. Here we will advise you as to how to do your due diligence when choosing a collection agency. 

Industry Experience:

A one-size-fits-all collection agency is not good for Condos and HOAs. You need a company who is specialized in working with community associations exclusively. If you sign up with a company that does medical and credit collections they will never understand your community’s unique needs.

A debt to a community association is a secured debt and it’s important to understand that the delinquent owners need to be treated with great reverence. “Collect with respect.” Don’t send a hard-nosed collection agency to collect from your neighbors as that will only cause animosity in your community. (And at the end of the day, these people are still your neighbors, and you have to live in close proximity to one another!)


If you find a collection agency using Google, you should drill down a little deeper. One of the great questions to ask is how many times they have been sued by clients? It’s also a good idea to ask how many time have they sued their own clients.

Some collection agencies will lock up a community association in such a constrictive contract and charge a lot of junk fees that eventually a conflict will arise. Ask the questions and look on the court sites in the county where the collection agency is located to see if there are law suits in the dockets (both old and new). It’s as red of a flag as you can get. 

The Cost to the Association and/or Member:

The most important thing to know is that a company collecting for community associations cannot use the traditional collection agency pricing model. You cannot give them a percentage of what they collect because the principal is an asset of the corporation. Those assets cannot be given away by the board of directors; that would require a vote of the membership.

What is needed is an agreement by which all charges are deferred at the collection agency’s risk. These charges need to be passed through to the delinquent Condo or HOA owner and if the collection agency cannot collect them the association should not be responsible for them.  

It is also critical to see what the collection agency is charging through to your delinquent owners. Although you may have found a company who will do it at their risk you DO NOT want to bury owners in junk fees that they cannot afford to get out of collections.

If you pile on charges to a delinquent homeowner in your HOA or Condo they will never be able to get out of debt and see the light. Also, recovering money for your community association is more difficult if a sizeable proportion of the debt owed are collection charges.

Watch those costs, because they could mean the difference between a successful collection event or continued indebtedness.  

Client-Side Technology:

Ask your HOA collection agency prospect about their technology and reporting. Collections need to be a history NOT A mystery. If your collection agency prospect cannot provide you with an online real-time portal that you can log on to 24/7, then maybe you should continue your search. If you are a Community Association Manager or a board member you need to monitor the actions of your collection agency, and without a dedicated portal that is just not possible.  

Some of the things you should expect from an online portal for Community Association Collections is the ability to see the ledgers that are in the collection process. The ledgers are dynamic documents and change every day. Being able to watch how they are maintained is critical.

You should also see each and every communication that has been made to your delinquent owner. Every letter, phone call, email, payment, and memo should be right there to see. Not only that but if your collection agency does outbound calls (and they should be doing outbound calls) they should be recorded and stored and you should be able to log on and hear them.

The same is true for incoming phone calls. If you are going to have a board meeting you should be able to download all your reports ten minutes before the meeting. A manager or board member should never have to wait until a collection agency or attorney will send you a progress report. 

Debtor-Facing Technology:

It’s 2020, and people do not respond to phone calls and letters alone like they once did. Your collections agency should be available where your debtors are more likely to respond, over the Internet, through email and via text messages.

Check to see if the collection agency in question provides an self-service online portal for the delinquent members. Look for a portal where they can log on to and dispute the debt, make a payment, communicate directly with a dedicated collector, or even be able to craft their own payment plan on line. Some people who are in arrears do not like personal engagement so this is an easy way for them to resolve their debt without human interaction.

Response Time:

Any collection agency worth its salt better have a great call center where the customer service representatives are accessible, knowledgeable, responsive, and answer the phone.

Why not ask the sales representative for the customer service number and give it a test spin? Take that number and give the collection agency customer service department a call to see how many rings it takes until they answer the phone or if you leave a message, see how long will it take them to respond. It’s a simple way to see if you will be getting the customer service that you deserve.  

Success Rate:

A good question to ask is about the success rate of the company who you are hiring to collect for your community association. If they tell you without any analysis that their success rate is 98% or even something lower there is a problem.

This is not a one-size-fits-all industry and every condo and HOA has a different story. If they ask you for the aging of the accounts and some history in order to do a proper collections analysis then you have engaged with the right company. 

The Right Choice:

If you are looking for a collections agency that meets all of these criteria, look no further than Axela Technologies. With the most advanced technology, highly trained collection professionals, and empathetic corporate culture, Axela is the company that you need to do collections for your community association.

Click here for a link to where you can request a collections analysis. If you are looking to experience a better cash flow scenario then look no further. Axela Technologies is the most experienced and advanced collections firm in the community association industry. 

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