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Should Homeowners Pay Maintenance Fees, and Other COVID-19 Relief Questions

UPDATE: Contrary to our speculation here, Congress did include community associations in the eligibility ranks for the COVID-19 relief stimulus packages. Unfortunately, that money ran out almost as quickly as it was made available. In response, Axela Technologies has opened their HAAP program to community associations across the country to provide an obligation-free funding option.

Learn more about the expansion of HAAP for community associations affected by the coronavirus

This COVID-19 virus is absolutely for real and it’s almost like a dystopian movie you might find on Netflix. In fact, you probably already binged it on Netflix, while you were searching Amazon looking for ANY toilet paper for sale. (Deliverable in 2 months. Really?)

In times of crisis and uncertainty, a lot of us have questions that we need answers to, and I’m not talking about the coronavirus here, I am talking about your community association.

Is there a COVID-19 relief package for community associations?

No. Lots of solutions have been proposed by the government to help people who are economically affected and that’s a good thing. Banks are offering forbearance on mortgages, student loans as well, and the Federal government may even cut a check for everybody. However, NOBODY is going to cut a check for your community association. Condos and HOAs are on their own and that’s a dangerous situation.

If you live in a community association, you should know that it’s a not-for-profit business and cannot afford to have people missing payments.  The Federal, State, Municipal, or County government is not going to bail out any community associations.  They didn’t do it ten years ago, and they won’t do it now. Your condo or HOA is where you live and the absence of your payment will not only affect the quality of your life but that of your neighbors as well.

The county will still want its money for water and building inspectors will still be issuing summons for various violations. Your community association is like a small government but they cannot print money!

Should homeowners pay their assessments or condo fees during social distancing?

Not only should you, but you must. Your community association is on the front line fighting this virus. If people fail to pay their fair share there could be a reduction in janitorial services which will directly affect your health. Security services could be scaled down and that too can put your family in harm’s way.

Now is not the time to skip out on your community association maintenance fee payments.  It’s a dangerous game and these fees need to be collected and deposited into the operating account of your association.

If the banks are going to allow people to skip payments without penalties, an owner has the opportunity to do the right thing. If it comes down to a choice between the two, hold off on paying the bank (they’ll survive), but by all means, pay your community association fees.

If homeowners won’t pay, what recourse do associations have while foreclosures are suspended?

The government has put a moratorium on foreclosures and evictions but it should never come to that. If a delinquent condo owner fails to pay they should be sent directly to a collection agency that will engage them and work out payments.

What is needed is meaningful engagement with the owners who may need to hear that defaulting on their maintenance fees will be disastrous for them. It will hurt them financially and it will hurt their own community.

Should the board consider compassionate measures like suspending fees and interest?

Some community association professionals have suggested suspending late fees and late interest. This does not make any sense at all. If an owner has decided not to pay, having the incentive to get homeowners to pay on time should not be removed.

Instead, the money charged for late fees and late interest can be utilized to engage a professional collection agency to work with the owners and get them on track again. The absence of late fees and late interest charges is not going to help the community. It may even incentivize others NOT to pay.

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