You live in a homeowner’s association and people aren’t paying their dues, what should you do? Sue, dissolve, or collect?
Q: We have about 70 homes in our subdivision in Georgia. We have a Homeowners Association that has hired a management company, but we aren’t getting dues paid from about half the owners.
We have raised dues one time already because of the lack of payment. We have fined people but they ignore us until they try to refinance and then they pay all the dues and fines but then stop paying again.
Can we legally dissolve the HOA or should we just fire the management company and the lawn care company and ignore the obligations by the state for an HOA?
A: For starters, you should know that just about every homeowner’s association organization document provides for the right to lien the home that has failed to pay assessments. It also gives the association the right to sue that homeowner to obtain payment.
If you have repeat offenders in your association and those failures to pay aren’t related to the housing market, you might question the management company for its failure to obtain legal counsel to demand payment from these delinquent owners. These same association documents usually give the association the right to recover attorneys’ fees in the process of collecting unpaid assessments.
You might need to get tough on some of these homeowners to get the monthly dues paid. The management company should do this for you. If they are unwilling to do this, you might want to find a different management company willing to perform the functions that most management companies perform when they represent an association. However, if the management company’s duties do not include being actively involved in the collection of assessments, the association should hire counsel to help them out.
But before you take any action, you should review the association documents to evaluate what the association can and can’t do when it comes to overdue association payments.
As for dissolving the association, you’d have to review the association documents to see if that is possible and even legal. Some associations are required by law in order to maintain certain aspects of a community, especially when there are common areas and common facilities.
If you find that you can dissolve the association, you’d have to determine how you would go about getting that done. You’d probably have to hire a real estate attorney or an attorney that has quite a bit of knowledge about real estate law and homeowner’s association law to file some form of dissolution document that would have to be signed by a majority, a super majority or all of the owners in the association. You might have to have some additional documents filed to take care of other issues arising when you don’t have an association. For example, if the association takes care of certain aspects in the development that are ordinarily taken care of by a village or city government, you’d have to figure out how those activities will and must be taken care of; and how payment would be made for those activities.
Some associations are responsible for the repair of roads, sidewalks, snow removal, street cleaning, and repair of storm, water and sewer mains and pipes. If that’s the case in your association, you’d have to find a local government willing to accept responsibility for those items and then tax each home through the real estate tax system. You might find this situation difficult and, maybe, impossible.
Your best bet is to find a way to get each homeowner to pay their assessments when they are due and to set up a system to collect those dues if they are not paid, including taking those owners to court for non-payment.