Do BoDs / CAMs Discriminate?

In my previous posts I have primarily discussed the financial aspects of how poor community asset management companies CAMs can lead to operational inefficiencies which lead to increased dues and lower home values.

I believe these inefficiencies can be compounded when a HOA Board of Directors and their property management company fails to comply with a community’s Collections Policy.  I also believe non-compliance with a community’s Collections Policy discriminates against Primary Residence home owners in the following ways:

1. Our community as a whole gets charged for ALL delinquent owner late fees (except for a $15 reminder letter fee), while our Collections Policy states ALL delinquent fees are the responsibility of the Delinquent Owner.

• • Our community implements ‘Hard’ and ‘Soft’ costs for late fees.
    • ‘Hard’ costs are costs that are attributed to the entire community and paid to the management company as Legal Fees – Collections costs and cannot be undone even if Board of Directors waive.
    • ‘Soft’ costs are costs that are attributed to the delinquent owner and applied to their account. These can be undone if Board of Directors waive.
    • Legal Fees – Collections costs total in the many thousands every year

*These costs seem to be only applied in terms of member late fees*

• • These ‘Hard’ and ‘Soft’ costs are not mentioned anywhere in the Collections Policy and I only found out about them from attending meetings.
  • When delinquent members successfully challenge delinquent fees to the board, their account gets cleared of the fees, while the community is still on the hook.
    • This provides an incentive for management companies to be aggressive in getting members in balance trouble. See #3

2. Our community has ~25% rental properties where the rental owner can absorb dues increases by increasing the monthly rent for a renter.

• • A Primary Residence Owner does not have this option

3. Our Collections Policy states that all dues are to be charged to member accounts on the first of each month.

• • Our management company charges due fees from member accounts whenever they see fit, which could put the owners account in peril if any other fees/fines are incurred.
  • By not following the policy, member over-billing occurs and a communities financials appear more dire than in reality, prompting dues increases.

SUMMARY:

Coming out of the Financial Crisis of 2009, there was a Class Action lawsuit filed in 2012 against many Arizona HOA Management Companies that, I believe, led to the influx of community Collections Policies being put in affect statewide a few years later.  2014 in my case.

These policies were put in effect to protect HOA members.  It is imperative to have the community Board of Directors and CAMs follow them to ensure all community members are treated fairly and equally, regardless of ownership type.

**Link above has a broken link to the UPL Advisory Opinion No. 12-01**