The COVID-19 pandemic will lead to a rise in delinquencies. The question remains - how bad will it get and how can boards soften the blow?

While restrictions have begun to lift, financial troubles haven’t for the millions who have found themselves unemployed.

While it is unclear how bad it will be, there have been comparisons made to the Great Recession, which stymied community associations nearly a decade ago and dried up associations. 

Professionals say the issue of collections is on the front burner, but a variety of strategies could help associations weather the storm.

  1. Every association should have a collections policy to serve as a roadmap for dealing with delinquencies. The board should apply the policy evenly to all residents, however, they should leave wiggle room for flexibility depending on an owner’s circumstances. 
  2. Communities must continually educate owners about the importance of assessments because community associations with high delinquency rates may have trouble getting bank loans of qualifying for Federal Housing Administration insurance. 
  3. When delinquencies do happen, reach out and invite owners to discuss possible solutions with board representatives. 
  4. Keep in mind that, to protect homeowners and renters during the economic upheaval, some governors have used their emergency powers to issue temporary moratoriums on evictions and foreclosures. Representatives of the community association industry worried that this type of measure could end up including assessments. 
  5. Running collections through a dedicated department rather than individual managers can help stabilize finances. 

Learn more, here

 

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