Both HOA Boards and property managers agree that unpaid homeowner association assessments are more than a hassle.  They are a time-drain for managers, and they reflect negatively on the community.  If one or more homeowners fall behind or don’t pay their assessments, it creates a hardship for the community and everyone living there.

When the Board approves the association’s budget, accuracy relies on income equaling expenses. If a homeowner does not pay his or her assessment, the budget is out of balance. Expenses become more than income, and the community can’t function long in this manner without an adverse impact.  This can create extra costs for other homeowners, reduced maintenance and reduced property values. 

People encounter financial hardships for a variety of reasons, and most Boards are willing to work out a payment plan.  Unfortunately, delinquent homeowners rarely contact the Board.  Initial letters and calls are ignored until the debt reaches a substantial level.  At that point, it’s almost impossible for the Board to implement a satisfactory payment plan with the homeowner.

Although associations can place a lien on the home of defaulting homeowners, it doesn’t help the short-term financial strain.  Liens and foreclosures take time to resolve. Associations must meet immediate financial obligations, so other homeowners have to pick up the slack.  When friends and neighbors have to pay more due to a delinquent homeowner, conflict in the community is almost a sure bet.

Typically, the Board will make up some of the shortfall by dipping into the reserve fund, which means a reduction or elimination of long-term repairs and projects.  This makes a bad situation worse because it can negatively affect the reputation of the community and property values. 

While it may seem that one owner withholding assessment payments wouldn’t upset the balance, it can have long-term consequences for the community.  Homeowner associations allocate their income for specific items and services, so they don’t have “extra” cash in the bank to fall back on.  A few homeowners failing to pay assessments can have far-reaching consequences that can cause declining property values over time. 

Delinquent assessments are a significant cost to an association that end up costing every homeowner more.  A successful community relies on the Board staying on top of the financial statements and taking action when a homeowner’s payments are in arrears.  Make sure the owners in your community understand the rules and the consequences so you won’t be the one to say “Pay up or else.”  



Wise Property Solutions is a property management company serving East Tennessee (including: KINGSPORT, TN | JOHNSON CITY, TN | BRISTOL, TN | ELIZABETHTON, TN | ERWIN, TN | BRISTOL, VA | KNOXVILLE, TN)  with offices in Knoxville, TN and the Tri-Cities, TN. Specializing in Condominium Association Management, Home Owners Association Management, HOA Management and Gated Community Association Management.  The firm is East Tennessee’s only Accredited Association Management Company (AAMC®).   


Knoxville, TN: 865-643-8989

Tri-Cities, TN: 423-926-7373

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