Can My HOA Send Me to a Collection Attorney?

For many homeowners, receiving a letter from the Association's collection attorney can be both surprising and stressful.

Questions immediately come to mind.

"Can my HOA really send my account to an attorney?"

"Why didn't someone just call me first?"

"Am I responsible for the attorney's fees?"

"Does this mean I'm going to lose my home?"

The good news is that receiving a letter from a collection attorney doesn't necessarily mean foreclosure is about to happen.

In many communities, sending a delinquent account to the Association's collection attorney is simply the next step in the collection process after earlier efforts to collect the unpaid assessments have not been successful.

So why would an HOA involve an attorney?

The answer is simple.

Every homeowners’ association depends on assessments to pay for insurance, landscaping, utilities, maintenance, and the many services that keep the community operating.

When homeowners stop paying their assessments, the Association still has those same financial responsibilities.

If reminder notices and other collection efforts don't resolve the delinquency, the Association may decide to refer the account to its collection attorney to continue the collection process.

It's important to understand that sending an account to a collection attorney doesn't automatically mean a lawsuit has been filed or that foreclosure is about to occur.

In many cases, it's simply another step in the Association's effort to collect the unpaid assessments while giving the homeowner another opportunity to resolve the matter.

Understanding why an Association uses a collection attorney can help homeowners better understand the collection process and why acting early is often the best course of action.

Let's take a closer look.

Why Does the HOA Need an Attorney?

Many homeowners assume that once an attorney becomes involved, the Association is trying to sue them.

That’s usually not the case.

The primary responsibility of a collection attorney is to help the Association recover the unpaid assessments that are owed.

Think of the collection attorney as someone who continues the collection process after the Association's earlier efforts have not been successful.

The attorney may send required legal notices, communicate with the homeowner or their attorney, prepare legal documents when necessary, and advise the Association on the steps required by state law.

In other words, the attorney helps ensure that the collection process is handled properly and in accordance with the law.

It's important to remember that the attorney represents the Association, not individual homeowners.

Just as a homeowner may hire an attorney to protect their interests, the Association may also retain an attorney to protect the financial interests of the community.

For many homeowners, receiving a letter from an attorney is the first indication that the matter has become more serious.

However, it doesn't necessarily mean legal action has already been filed.

In many cases, it simply means the Association is continuing the collection process through its attorney in an effort to recover the unpaid assessments.

Will My Neighbors Know?

For many homeowners, one of the biggest concerns isn't the money.

It’s embarrassing and private. 

“Will the Board know I'm behind on my HOA assessments?"

"Will my neighbors find out?"

"Is my financial situation going to become public?"

The answer depends on the circumstances and the stage of the collection process.

Board members generally become aware that an owner is delinquent because they have a fiduciary responsibility to oversee the Association's finances and collection efforts. In many communities, the Board reviews delinquent accounts in executive session or receives reports from the Association's management or collection attorney.

However, that doesn't mean your neighbors are notified or that your financial situation is discussed publicly.

Associations should treat collection matters with discretion and respect for the homeowner's privacy while carrying out their legal responsibilities.

If collection efforts continue to the point where a lien or lawsuit is filed, some information may become part of the public record. Even then, most neighbors are unlikely to know unless they specifically search public records.

For most homeowners, collection matters remain between the homeowner, the Association, its management, and, when applicable, the Association's collection attorney.

Am I Responsible for the Attorney's Fees?

After learning that an attorney has become involved, many homeowners ask another important question.

"If the HOA hires an attorney, am I responsible for paying the attorney's fees?"

The answer depends on the Association's governing documents, state law, and the circumstances of the collection.

In many communities, homeowners who become delinquent may be responsible not only for the unpaid assessments, but also for other charges that may be permitted by the governing documents or applicable law, including late fees, interest, attorney's fees, court costs, and other collection expenses.

As a result, delaying payment can become more expensive over time.

A balance that may have started as a few missed monthly assessments can grow as additional collection costs are added.

For example, a homeowner who initially owed only a few hundred dollars in unpaid assessments may eventually owe significantly more once collection costs are included.

That's one reason it's often in everyone's best interest to address the delinquency as early as possible.

Resolving the matter before additional collection costs continue to accumulate may help prevent a much larger balance later.

Can I Still Resolve the Matter?

In many cases, yes.

Receiving a letter from the Association's collection attorney doesn't necessarily mean it's too late to resolve the delinquency.

In fact, many collection matters are resolved after an attorney becomes involved and never progress to a lawsuit or foreclosure.

The important thing is not to ignore the letter.

Attorney correspondence typically contains important information about the amount owed, applicable deadlines, and the next steps in the collection process.

Reading the letter carefully and responding promptly may help prevent the matter from becoming more serious.

Every situation is different, but addressing the issue early often provides more options than waiting until additional collection costs continue to accumulate.

The sooner a delinquent account is resolved, the sooner both the homeowner and the Association can move forward.

Does the HOA Want to Send Owners to a Collection Attorney?

Most Boards would rather not.

Sending a homeowner's account to a collection attorney is generally not something Boards enjoy doing.

Most Board members are volunteers who live in the same community as the homeowners they serve.

They understand that unexpected financial hardships can happen and that life doesn't always go according to plan.

At the same time, they have a fiduciary responsibility to protect the Association's finances and to treat all homeowners fairly by enforcing the governing documents consistently.

If one homeowner stops paying assessments and the Association takes no action, the financial burden may eventually shift to the homeowners who continue paying on time.

That's why most Associations have collection policies.

These policies help ensure that homeowners are treated consistently and that collection decisions aren't based on personal relationships or individual circumstances.

The goal isn't to punish homeowners.

The goal is to collect the assessments needed to operate and maintain the community for the benefit of everyone who lives there.

Understanding that responsibility helps explain why Associations sometimes refer delinquent accounts to a collection attorney.

It's not about being aggressive.

It's about fulfilling the Board's responsibility to protect the financial well-being of the entire community.

The Bottom Line

Receiving a letter from the Association's collection attorney can be unsettling.

For many homeowners, it's the first time they've had any involvement with the Association's collection process.

The good news is that receiving a letter from a collection attorney doesn't automatically mean you're being sued or that you're going to lose your home.

In many communities, it's simply the next step in the collection process after earlier efforts to collect the unpaid assessments have not been successful.

The important thing is not to ignore the situation.

The sooner a homeowner understands what the letter means and takes steps to address the delinquency, the more opportunities there may be to resolve the matter before additional collection costs continue to accumulate.

Understanding why collection attorneys become involved also helps explain that the Association isn't trying to punish homeowners.

Its goal is to collect the assessments needed to operate and maintain the community while treating homeowners fairly and consistently.

Knowing how the process works can remove much of the fear and uncertainty that often comes with receiving a letter of collection.

Let's Keep the Conversation Going.

No homeowner expects to receive a letter from a collection attorney.

Fortunately, most never do.

Understanding why attorneys become involved, what their role is, and what options may still be available helps homeowners make informed decisions and avoid unnecessary surprises.

The more homeowners understand how their Association operates, the better prepared they are to protect both their home and their financial investment.

You don't have to learn everything today.

Knowledge builds confident homeowners.

Engaged homeowners build stronger communities.

Let's keep the conversation going.

 Florida HOA Spotlight — Helping Homeowners Understand Their Communities... One Conversation at a Time. 

Note: Collection procedures, attorney involvement, and homeowners' rights vary by state and by an Association's governing documents. This article is intended for educational purposes only and should not be considered legal advice.