Clear communication is a cornerstone of successful community association collections.
Say that five times fast, right?
Really, clarity is important no matter what you’re talking about. But when it comes to HOA collections terminology, the wrong words can create uncertainty or misunderstanding.
Our recent article about the new FNMA changes to reserve funding caught the attention of Robert Nordlund, PE, RS, of Association Reserves. He said the message was right but recommended changing the phrase “reserve contributions” in the future, as contributions “makes them sound voluntary.”
He makes an interesting point, and one that lines up very well with our own beliefs about how to handle and speak about HOA debt collection.
Changing how we talk about difficult topics, like debt, by making small changes to our everyday language, can make a real difference.
What is Word Association?
Word association is the immediate, subconscious connections our brains make when we hear certain words. It’s sometimes used in psychology to help determine how a person thinks or perceives things.
Word association is a powerful communication tool. Knowing what words are likely to trigger certain thoughts can help gently guide readers or listeners in certain directions. But when our HOA collections terminology uses words without considering what they might be associated with, we create unintentional connections that can create misunderstandings.
The (Unintentional) Illusion of Choice
If you search for synonyms for the word “contribution”, you’ll find that the most recommended replacement is “donation.” Whether you check Merriam-Webster, Dictionary.com, the Cambridge dictionary, or Google’s AI overview, it’s the first suggestion each time.
This connection is exactly what Nordlund was talking about.
When a homeowner sees their HOA assessments are on the rise in part due to increasing reserve fund “contributions,” there can be an unintentional mental connection happening. To the uninitiated (aka a homeowner who bought into their community association without fully grasping the concept of the HOA), this sounds like a luxury; it’s nice to “contribute” to the reserve fund, but not something you always have to do. Board members and managers understand the truth and know the value of sufficiently funded reserves.
Reserves aren’t the only time the word “contributions” shows up in HOA collections terminology, though.
During the collections process, delinquent owners may occasionally make partial payments. When using a platform like Axela Easy Collect, this is a feature by design and happens when a payment plan is being used. When partial payments are made outside of an official payment plan, we’ve used the term “contributions” to describe that money.
Just as reserve “contributions” are not voluntary “donations,” partial repayments of debts owed are not “donations” made from the goodness of one’s heart. Any money repaid to the community is settling an unpaid invoice for services rendered.
Unlike “contribution,” the word “debt” has its own word association problems. When you search for synonyms to “debt,” you get an interesting result.
Softening the Stigma of “Debt”
Merriam-Webster splits the meaning of “debt” into two categories: obligation (as in owing something, such as money), and crime (as in breaking moral code).
Crime is, obviously, a very dark path to go down, especially when the kind of debt we deal with in HOA collections can be perceived as fitting that bill. Not paying for a service is a breach of contract. But the concept of “crime” has a negative connotation that does not move the debt recovery process along.
This connection is one of the reasons Axela’s HOA collections terminology focuses intently on a few key words and phrases:
- Debt recovery or resolution: We’ve said the phrase, “recovery, not punishment,” for years, and we stand by it. Reframing the goal of collections as financial recovery, not judgement or retribution, shifts the focus away from blaming the homeowner to instead come together to solve the problem at hand. (In fact, recovery also means “to heal” and that is just what we like to do for associations.)
- Kinder, faster, smarter, better collections technology: opening with “kindness” was a very intentional choice. Treating a delinquent owner with kindness first is, in our opinion, the step that makes all the difference.
- Ethical collections technology: The words “ethical” and “collections” are almost never found together. There is a stigma that debt collection is underhanded or abusive. Axela hopes to shift that understanding by proving that the collections tool can handle HOA collections ethically and fairly for all delinquent homeowners.
It May Be Time to Rethink Your HOA Collections Terminology
The way we talk to others, be it paying or delinquent homeowners, a Board member, or a community manager, makes an impact. When we rethink our language to prioritize what matters, we can change the way people think about stigmatized topics like HOA collections and financial obligations. Resolution is more important than retribution.
If your HOA collections terminology is creating an unintended point of friction in your collections process, let’s have a conversation. Our team of experts can help you navigate difficult conversations with delinquent homeowners and give you the tools you need to make a difference in recovery.
