Florida Rising Magazine FRM March 2019 - Page 28

Mitch Drimmer is a respected thought leader in his field and has led numerous continuing education classes in collections, His articles have been published in key trade journals and newspapers, and he is a speaker at several educational seminars. Drimmer is also a former board member of the Florida Community Association Professionals (FCAP) and earned his company the distinguished FCAP Reader’s Choice Award for collections four years in a row. Throughout his career, Drimmer has worked with community associations to help them see their way through tough times, especially during the real estate crash. He is a passionate advocate for community associations and has participated in the legislative process over the years trying to bring fair and equitable legislation that serves community associations.

Drimmer earned a BA in History from Hunter College and served as CEO of Drimmer Industries, Inc. in New York City for 35 years.

CONDO & HOA COLLECTIONS… How to formulate a Uniform Collection Policy

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All Community associations need a UCP (Uniform Collection Policy), but they are not as easy to formulate as you would think. Here are some suggestions on how to go about putting together a UCP and, more importantly, enforcing it:

The first thing that has to be done is for the board and manager to read through the governing documents to understand what you can and cannot do. From your governing documents you need to find the following:

* The due date of your association’s assessments (first of the month, fifteenth of the month etc.).

* The grace period allowed (10 days after due date, end of month etc.).

* See if your governing documents allow for a late fee.

* See if your governing documents allow for late interest.

With that information you are now prepared to establish a plan of action, but you have to make a few decisions first. These decisions really speak as to what your board of directors “expect” from collections. We all know that everybody wants total recovery of the money that is owed, but that is just the result.

1. The single most important decision that the board has to make is if it is their determination that they should foreclose out on their liens. In my opinion there are only two reasons an association may want to do so. One, they have the intention, wherewithal, resources, and will to rent out the unit in order to recover their money. Also important in this aspect of the decision is where the bank is positioned in their foreclosure action. The second reason, is if the unit has no mortgage or other encumbrances on it. If such is the case then it is worthwhile to dedicate resources and foreclose on the lien for that property. If not, it could be a costly decision.

2. Some of the most important questions a board needs to ask are: Does the board expect their collection solution to be as resolute as possible or a passive collection solution? Is the board concerned about hurting the feelings of delinquent owners by putting them into a system that will not only present resolution solutions, but at the same time present consequences for delinquent members who continue to be intransigent regarding their delinquency? Then the board should inquire about the following: