The COVID-19 pandemic has caused turmoil across the country. It is now more important than ever for community associations and property owners to stay informed and understand their options.
Yesterday, the Community Associations Institute (“CAI”) sent out an email asking for a National Call to Action to halt the filing of lien foreclosures/eviction lawsuits due to the economic hardship that many people are currently facing. Click here to view the full article.
“Assessments are the lifeblood of community associations and are utilized to deliver essential services to residents such as snow removal, trash pickup, and streetlights and to provide for the upkeep and maintenance of common areas including sidewalks, pools, and roads. Since community associations are nonprofit in nature and work on tight zero-based budgets, it is critical that every homeowner pays their assessments in a timely manner to ensure continuity in providing these services.” – CAI, March 31, 2020
We strongly urge association boards to not halt the collection of assessments, as doing so is a breach of the fiduciary duty owed to the association. Instead, we recommend that the board devise a plan to work with owners who are truly facing financial hardship and provide them some relief while ensuring that the association continues to collect assessments.
Here are some ways to provide relief for select owners while still maintaining revenue collection:
- Ask owners who are unable to pay on time to reach out to the Board and request a payment plan.
- Authorize a moratorium on imposing late fees and fines for owners who face temporary financial hardships due to COVID-19.
- Continue to abide by any established collection policies to ensure that the policies are fair and applied equally to all members of the community association.
- Continue to pursue eviction lawsuits and record liens to protect your legal interests. Remember: legal action does not result in eviction overnight – the legal process takes time.
- Continue to emphasize the importance of owners paying their assessments on time, if possible.
Condominium and common-interest community associations are facing difficult decisions, but boards must move forward in order to protect their business. Many of the services that an association utilizes in its day-to-day business functions are considered essential. An association could be held to have breached its agreement/contract and face stiff penalties/legal fees if they are unable to perform required services.
We understand the challenges you are facing during this unprecedented time. If you have any questions about how the COVID-19 pandemic may affect your association or property, please contact one of our experienced HOA attorneys: Kat Formeller at firstname.lastname@example.org or Kathy Heitkemper at email@example.com.
Tressler attorneys are known for providing fast, personalized and cost-effective legal support. We’re here and ready help.