Effective Date: August 10th, 2022
Key points:
Enhanced Communication Requirements: Before initiating collection actions for delinquent assessments, fines, or fees, HOAs must:
Notify the unit owner of the delinquency through certified mail and by posting a notice on the owner's property.
Contact the unit owner via an additional method, such as first-class mail, email, or text message.
Maintain records of all communications related to the delinquency.
Allow unit owners to designate a preferred language for correspondence and to identify a secondary contact person.
Board Approval for Collections: HOAs are prohibited from referring delinquent accounts to a collection agency or attorney without a majority vote by the HOA's board of directors, recorded during a formal meeting.
Limitations on Fines and Fees: The act restricts HOAs from imposing daily late fees or fines for violations of governing documents. Instead, fines must be reasonable and are capped at $500 per violation.
Extended Payment Plans: HOAs are required to offer delinquent unit owners payment plans extending up to 18 months, providing more flexibility for homeowners to address outstanding debts.
Application of Payments: Payments received from unit owners must first be applied to unpaid assessments before being allocated to other fees or charges, ensuring that the principal debt is addressed prior to additional costs.
These measures aim to balance the enforcement capabilities of HOAs with protections for homeowners, promoting fairer practices in community management
