I have been getting calls and emails from clients about how condo and HOA Boards should address owners who default on assessments during COVID 19. Condo assessments are the lifeblood for community associations and most struggle to keep up with monthly obligations when owners default. Surely, some owners have fallen on legitimate hard times but others may simply take advantage of the fact that the world is in crisis although they are fully capable of paying. Here are a few tips to help Boards navigate COVID19 while fulfilling their fiduciary obligations:
1. If an owner is unable to pay assessments on time, create a policy that allows the owner to notify their community association to work out a payment plan. Homeowners with a financial hardship should be encouraged to apply for government assistance, if available.
2. Community associations should adopt a moratorium on foreclosures for a period of 60 days after the Stay-At-Home Order lifts.
3. Community associations should establish a criteria by which to determine if the Board should waive late fees and penalties for owners who face temporary financial hardships due to COVID-19.
4. Community associations should continue to record liens to protect their interests.
5. Community associations should emphasize the importance of owners paying their assessments on time, if possible.