Condo financial is the only certified full service financial management company in California.
Delinquences & Collections
The Board of Directors has the fiduciary responsibility to protect the assets of
the Community. One of the assets to be protected is the accounts receivables. The
board is empowered by their documents and California Civil Code to bill and collect
assessments, and take the steps necessary when owners fail to pay.
The first step in this process is the creation of a Delinquency Control Policy by
the board of directors. This policy is based on the powers defined in the CC&R’s
and California Civil Code, and summarizes the steps to be taken in the event of
a delinquent assessment. This policy should be given to management for implementation
in order to ensure the even application of the procedures to all members.
Through our contract with the Association, CFM is empowered to implement the Delinquency
Policy. We begin by billing the monthly, quarterly, semi-annual, or annual assessments
as applicable. These statements serve as a “courtesy” reminder to the homeowner
of their obligation to pay their assessment. The owners are required to pay their
assessments whether they receive their statement or not.
If an owner fails to pay their assessment by the delinquency date as established
in the policy of the association, a late fee is assessed. This late fee may not
exceed $10 or 10% of the assessment, whichever is greater. After the application
of this late fee, we will mail a “red” statement of delinquency to the owner to
notify them of their missed payment, and subsequent application of late charges.
If the assessment remains unpaid for 30 days, the balance of the owner’s account
is subject to interest. This interest may not exceed 12% per annum or 1% per month.
If the assessment continues in its delinquency for another 15 days, the account
has reached the 45 day mark, which now includes two months of assessments. At this
point a delinquency notice will be sent to the owner giving them 10 days to bring
their account current, or their account will be sent to collections.
The collection company is chosen by the board of directors, and a contract is signed
to develop a relationship for the next phase of collection activity. The collection
company should be one who specializes in the collection of community assessments.
They will begin the process of placing an assessment lien on the property, which
puts the Association in a protected creditor position. They will handle the process
of collection through resolution, with all costs directly passed through to the
homeowner.