Collections Policy

A collections policy documents the exact steps and timelines the HOA will follow when an owner falls behind — when late fees are added, when interest accrues, when the account goes to an attorney, when a lien is filed, and under what circumstances foreclosure may be initiated. The policy must be adopted by the board and distributed to all owners, as required in many states. A consistent, evenly-applied collections policy protects the board from discrimination claims and ensures the community collects the revenue it needs to function. Collections policies vary widely but typically include a 30-day notice, a 60-day cure period, and a 90-day threshold for attorney referral.

Boards without a written collections policy often apply inconsistent standards, exposing themselves to fair-housing liability and allowing delinquencies to grow unchecked. A clear policy is both a legal protection and a financial discipline tool.