Collections & Enforcement
Offering Assessment Collection Systems and Policy Enforcement
Collections & Enforcement
Two of the most important services provided by a management company are effective collection of assessments and enforcement of the association’s rules and regulations. Without this, the association is headed for failure.
Each year the board members approve an operating budget, and every five years, the association should have an updated reserve study done. These two financial documents are the core to the association’s financial success. Establishing a roadmap for financial activities and protection of the assets of the community are the mandatory. Once these documents are approved, it is management’s role to be certain they are used and reviewed with the board members.
Billing and collection of assessments are critical to the financial operations of the association. What does that involve? It involves timely billing of assessments and creation of a failsafe system of collection. There are a variety of reasons why some owners become delinquent with their assessments. A good manager will communicate with each owner to establish a plan for timely collection. This might mean a payment will come in within a week, or it could mean establishing a payment plan between the association and the owner (approved by the board members) covering a more extended timeframe.
Without a good system for monitoring owner balances and following up with those owners who are delinquent, the problem grows over time. Once an owner falls behind, it can be more difficult for them to catch up with their payments.
ACM has established a proactive system for monitoring all owner balances, with automatic creation of letters and statements, reminders, and effective procedures for collection of assessments. Our record of timely collection of assessments exceeds the best-practices percentage established by financial auditors.
If your records indicate an ongoing list of delinquencies, it might be time to look for a more effective alternative for collections. Our experience shows that owners want to remain current with their assessments, and they appreciate the personal contact when necessary.
Proper enforcement starts with a good set of governing documents, various policies (rules and regulations), and a good management company that adheres to these documents. Board members are not generally involved with the creation of the basic governing documents (Articles of Incorporation, Declaration, and Bylaws). They were written when the developer was in the creation stage of the community. But they are the basis for everything in the community.
The board members generally have the complete authority to create policies for the association. These policies are extremely important to the association, owners, and management. They set the rules by which owners must follow and the procedures that the management company must follow for effective enforcement.
ACM has written design guidelines, enforcement policies, and various other policies for the management of an association. Knowing both the state laws and understanding the governing documents is the basis for creating effective policies. Equally important is obtaining input from board members so that they are onboard with the rules and enforcement procedures.
Once the policies are written, they must be disseminated to the owners and published on a website for frequent use by the owners as questions arise. A good policy establishing the design guidelines should be accompanied by the approved paint color chart and photographs of accepted items such as fences.
Once published the policies must be enforced whether it is a collection policy (see above), a parking policy, design guidelines, or rules and regulations affecting each owner’s use of his/her property.
ACM has established an extensive automated system for documenting our clients’ rules and regulations. Each major category has subcategories that may have various enforcement guidelines, such as length of time to remedy a violation. Once this system is set up for each community, we have the basis for effective enforcement of the rules.
Inspections are done at least once a year for any major maintenance items needed on a property. Photographs are taken during the inspection and included with the correspondence to the owner. After the initial inspection letter is sent to the owner, our system tracks the time given until the second letter and so on. It is critical for proper enforcement to follow both the association’s governing documents and the state statutes.
Routine inspections are also performed for everyday maintenance. Letters are created and sent to owners. Our system allows for postal mail, emails and texts so that we are in constant contact with owners and residents.
Effective maintenance of the association’s common areas generally sets the tone for effective maintenance by property owners and residents. Creating pride in the community’s appearance is very important.
A good manager will know all of this and have an effective system for following up on every item.