Landlords and HOAs: How to Collect Required Fees If a Tenant Refuses to Pay

Owning rental property, or running a home owner’s association, is a great way to make a living, or even just bring in some extra cash each month. Most landlords and heads of HOAs find that people are typically willing to pay the fees that were agreed upon each month, but eventually, a tenant or HOA member will pay late, or refuse to pay at all.

Understanding the options you have available, and how to collect the owed fees, is an important part of being in this type of position. The following are the different options available to landlords and HOAs when it comes to collecting past-due fees.

Issue Late Payment Penalties

All rental or HOA agreements should have specific due dates on which the fees need to be paid, and a set of reasonable late payment penalties that are incurred if someone doesn’t pay on time. Whenever someone fails to pay on time, it is important to be strict regarding the late payment penalties, as it will establish a precedent showing tenants or property owners that late payments need to be avoided. In addition, having the late payments go up as time goes by can be a strong incentive to encourage people to get caught up with their payments as quickly as possible.

Deny Access to Common Areas

One of the benefits of living in a community with a homeowner’s association is having access to community common areas. This could be a pool, park, recreation room, gym, or any number of other things. If someone fails to pay their fees, they should be notified that they are not permitted to access these common areas until they are completely caught up with their past-due fees.

Request Payment from Tenants

If a homeowner is leasing their house out to another party, it is often possible to go to the tenant and request that they make their rent payment to the HOA to cover the late fees. This type of provision is possible when it is written into the HOA agreement that the property owner would have signed. An HOA cannot, however, evict or threaten to evict a tenant of a property, since they were not the signers to the HOA.

Place a Lien on the Property

A last resort is to have a lien put on the property. Once the lien is in place, you can take the owed money out of the profit from the sale of the property. The lien, however, will typically be secondary to the main mortgage, which means if the house is foreclosed on or sold, you still may not get your money if the property owner didn’t have any equity in the home to begin with.

Work with an Attorney

Throughout each of the aforementioned steps, it is important to make sure all communication is done in writing so that it can be tracked should the case need to go to court. The best way to ensure all notifications are properly written, and filed, is to have them done by an experienced attorney. An attorney with experience in this area can also provide advice on which steps to take, and when to take them, to get the best results. Remember, the goal is always to get the property owner or tenant caught up on their fees so they can continue to be an active member of the community. To speak with an attorney working in this area, please contact the Reyes Law Group to determine what the best course of action will be in a given situation.

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Reyes Law Group

Reyes Law Group represents clients in a multi-disciplinary legal practice involving real estate transactions and litigation with a “footprint” that covers the State of Florida. Over the firm’s first 10 years, Reyes Law Group has closed over $100M in commercial closings, representing buyers and sellers in contract negotiations, due diligence, and the related title review and policy issuance related to closings. In litigation, the firm has commercial litigation experience focused on prosecuting or defending claims such as breach of contracts, partition actions, trade secret violations, and breach of non-competes. However, our firm’s MAIN FOCUS is assisting asset and loan portfolio managers, investors and private lenders with a “ 4-PILLAR APPROACH” to the legal challenges they face with non-performing assets: 1) LOAN WORKOUTS; 2) COMMERCIAL FORECLOSURES (across the State of Florida); 3) COMMERCIAL EVICTIONS; and 4) REO COMMERCIAL CLOSINGS.30+ years’ legal experience means - WE CAN HELP!

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