How to write an HOA dues collection policy that reduces delinquencies, protects the board legally, and gives homeowners a clear path to stay current — with a free template.
Delinquent dues are the single most common financial crisis in self-managed HOAs. A community with 100 units and a 10% delinquency rate is potentially missing $30,000 or more per year in operating revenue — enough to eliminate landscaping contracts, delay maintenance, or force a special assessment on the homeowners who are paying.
The boards that keep delinquency rates below 3% share one characteristic: they have a written collection policy and they follow it consistently. Not a policy that sits in a folder somewhere — a policy that homeowners receive at move-in, that is referenced in every late notice, and that the board follows the same way every single time.
This guide walks through what belongs in a collection policy and gives you a template you can adapt today.
In most states, HOA collection policies are not just good practice — they are legally required or strongly recommended by statute.
California: Civil Code Section 5310 requires the association to annually distribute a policy for the collection of delinquent assessments, including the process for requesting a payment plan.
Florida: Statute 720.3085 requires written notice before any lien is recorded and specifies the minimum content of that notice.
Colorado: CCIOA Section 38-33.3-316 sets a detailed framework for collection, including required payment plan terms.
Even in states without a mandatory written policy, operating without one creates legal exposure. If a homeowner sues claiming they did not receive proper notice before a lien was filed, "we always did it that way" is not a defense. A written policy that was distributed to homeowners is.
State the date dues are due (most HOAs use the 1st of the month) and the last day of the grace period before a late fee applies. A 15-day grace period is common. Some HOAs use 30 days, but the longer the grace period, the slower the collection process.
The late fee must be set in the governing documents or rules to be enforceable. State the dollar amount of the initial late fee and any ongoing per-day or per-month charges for continued delinquency. Many states cap late fees — confirm yours before adopting the policy.
| Day | Action | |-----|--------| | 1st | Dues due | | 16th | Late fee assessed ($XX) | | 30 days past due | First written notice sent | | 60 days past due | Second written notice; payment plan offered | | 90 days past due | Referral to collection attorney; lien recorded |
Your governing documents likely allow the association to charge interest on unpaid balances. State the rate (typically the rate specified in the CC&Rs, or a default statutory rate). Compound interest is not permitted in all states — check before including it.
Many state statutes require associations to offer a payment plan to homeowners who request one before the association refers the account to an attorney. Even where not required, offering a payment plan is usually in the association's financial interest — recovering dues through a plan is faster and cheaper than a lien and collection action.
Standard payment plan terms:
Most governing documents authorize the association to suspend amenity access and voting rights for delinquent accounts. State the threshold at which suspension applies and the process for restoring access upon payment. Amenity suspension cannot discriminate based on a protected class (see Fair Housing Act section on disability accommodations — service animals and accommodation-related modifications are not subject to dues-based suspension).
State that collection costs — attorney fees, filing fees, lien recording fees — will be charged to the homeowner's account in addition to the outstanding balance. Most state HOA statutes and most governing documents authorize this, but it should be in the written policy.
Describe when and how the association will record a lien against the property:
Do not use the word "foreclosure" casually in communications — it is alarming to homeowners and should be reserved for the formal notice required by state law before actual foreclosure proceedings.
Describe how a homeowner can dispute an assessment. Even if the dispute process is just "submit a written request to the board within 30 days," having it in the policy demonstrates that the association has due process built in.
[ASSOCIATION NAME] Assessment Collection Policy Adopted: [Date] | Last Amended: [Date]
Section 1 — Assessment Due Date All assessments are due on the first (1st) day of each month. Payments received on or before the fifteenth (15th) of the month will not be considered late.
Section 2 — Late Fees Assessments not paid by the fifteenth (15th) of the month will be subject to a late fee of $[XX]. An additional late fee of $[XX] per month will be assessed for each month the account remains unpaid.
Section 3 — Notice and Escalation Schedule
- 30 days past due: Written notice of delinquency sent to homeowner's address of record.
- 60 days past due: Second written notice. Written request for a payment plan is available to the homeowner at this stage.
- 90 days past due: Account referred to the Association's collection attorney. Lien may be recorded against the property.
Section 4 — Payment Plans Homeowners who submit a written request prior to the 90-day delinquency threshold may request a payment plan. Plans will cover a minimum of 3 months. The homeowner must remain current on ongoing assessments during the plan period. Failure to make any scheduled plan payment voids the plan.
Section 5 — Suspension of Privileges Homeowners with accounts 30 or more days past due may have amenity access and voting rights suspended until the account is brought current. Suspension does not apply to access accommodations required under the Fair Housing Act.
Section 6 — Collection Costs All costs of collection, including attorney fees, lien recording fees, and court costs, will be charged to the delinquent homeowner's account.
Section 7 — Disputes Homeowners who believe an assessment has been incorrectly charged must submit a written dispute to the Board within thirty (30) days of the assessment date. The Board will respond in writing within 30 days.
A collection policy only works if homeowners know it exists. Send it:
LotWize tracks every homeowner's dues balance in real time, sends automated reminders at the intervals you configure, and logs every notice in the homeowner's record. When a delinquent account reaches the collection threshold, the board has a complete documented history — every due date, every notice sent, every response — ready to hand to the collection attorney.
Self-managed boards running dues on spreadsheets typically recover 30–40% less from delinquent accounts than boards using a purpose-built system, primarily because manual tracking delays action and creates documentation gaps.
AI-powered tools purpose-built for self-managed HOA boards. Violations, dues, meetings, and documents — all in one place.
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