With national and local economies experiencing the now infamous recession we find ourselves climbing out of, we find that nearly every industry has been impacted. Among the impacted multitudes of the economic downturn are community associations. As many homeowners have struggled to keep food on the table and a roof over their head amidst job losses and salary cuts, many have neglected to pay homeowners association dues.
Community associations, while sympathetic to these families, have an obligation to pay for services that benefit all homeowners despite whether or not owners pay their dues on time or even at all. The majority of associations have done what they can to trim budgets to allow for higher rates of delinquency, but there comes a time when no further cuts can be made. What is left for them to do, you may ask? The unfortunate answer is that they must suspend the community privileges and rights of those who have not paid. Many states, such as North Carolina, have specific statutes that address such a drastic step in collections efforts. Timely and accurate follow up with homeowners informing them of their outstanding balances are among the first steps in this process. Eventually, the board of directors may decide to suspend privileges. In order to do this, the homeowner is forwarded a notice of hearing allowing them to speak in front of the board regarding the delinquency. After the owner is called to the hearing, a follow up communication must be forwarded to the noted owner informing them that their privileges, voting rights, etc. will be suspended as of a certain date. The suspension remains in place until all outstanding charges have been satisfied. While the suspension of privileges is a “last ditch” effort taken by many community associations, it has, for some, become a necessary tactic to help bolster weak association finances to ensure that services continue for the community members who have fulfilled their payment obligations.