THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, June 1, 1996 TAG: 9605300288
SECTION: REAL ESTATE WEEKLY PAGE: 16 EDITION: FINAL
COLUMN: COMMON GROUND
SOURCE: G. ROBERT KIRKLAND and MICHAEL INMAN
LENGTH: 66 lines
Q. Our 68-unit condominium has a chronic delinquency problem. I think it comes from our owners giving a low priority to payment of condo dues in preference for other creditors.
We need to find a way to make them just as concerned about paying our bill as they are other creditors. Can you help us?
A. I think we can give you some answers that will be of assistance to you, but it might require amending your condominium documents unless the specific enforcement tools that we will discuss are already included.
Therefore, the first order of business for you is to look closely at your documents to find the tools that you need to ``put the hammer down'' on the delinquent homeowners.
In 1993, the General Assembly passed a law which provides that, to the extent the condominium documents specifically provide, you many suspend an owner's privilege to use facilities or deprive the owner of nonessential services as a consequence of his breaching any of the covenants.
One of the covenants that owners have agreed to is payment of assessments. This is the same section of the Condominium Act that gives you the right to levy monetary charges against any owner who is in violation of the documents.
Common facilities are such things as parking in the common areas, access to the swimming pool or other recreational facilities, and/or use of the clubhouse. With the onset of the summer season, if your condo has a swimming pool, this would seem like an excellent facility to withhold from the delinquent member. Landscaping is an example of a service that can be withheld.
We believe that your first order of business should be to inform the homeowners in the next newsletter, or by a special mailing, that the board of directors is aware of the rights and its power to take these extraordinary actions and that this power will be used unless all dues are brought current.
The key phrase in the previous clause in the provision of the Condominium Act is that these powers must be included within the written documents. Many older documents did not contain these powers primarily becames they predate this recent amendment to the act. If your documents do not contain these enforcement provisions then you must amend your documents in order to utilize these powers.
In general, over the years we have found that one of the keys to successful dues collection is persistency. The board of directors must get a reputation for taking delinquent owners to court if they do not pay within a reasonable period of time.
What is reasonable may vary between communities, but generally the outside time we would recommend allowing anyone to be delinquent, regardless of the circumstances, is 90 days.
At that point, it could constitute a breach of fiduciary duty for the board of directors not to pursue collection of the funds.
After amending your documents, if necessary, to adopt the provisions discussed above, you should develop a collections policy detailing each step that you will take to accomplish your goals. Our experience tells us that if you implement all the tools available to you in the proper order, you will be successful in bringing your delinquency problem under control. MEMO: G. Robert Kirkland, president of a Virginia Beach property
management consulting firm, and attorney Michael A. Inman specialize in
Virginia community association issues and are affiliated with the
Southeastern Virginia chapter of the Community Associations Institute.
Send comments and questions to them at 2622 Southern Blvd., Virginia
Beach, Va. 23452. To submit questions by phone, call 486-7265; by fax:
431-0410; by E-mail, grkirkland(AT)aol.com by CNB