A TIP TO AVOID COLLECTION DISPUTES:
A substantial part of our practice is collecting unpaid homeowner assessments. We’ve created what we call “Common Sense Collections” where, in most instances, collection and attorney fees are paid by the delinquent owner NOT The Association.
HOWEVER – owners are entitled to scrutinize “their ledger” and ask “how did you come up with the total?”
When we get this question, we can already tell the owner is about to challenge the amount allegedly owed.
Because we, the attorneys, do not keep your books, we do not know all of the details about the charges on the ledger. Unless we see something out of line, we properly assume that the ledger is correct.
But here is the catch – once an owner requests an accounting of their ledger, the Association has the legal obligation to clarify the charges, interest, late fees, collection costs, etc.
A recent court case INVALIDATED the Association’s ledger of a particular owner because, it reasoned, the ledger was based on “bad bookkeeping” and did not prove the amount due with SUFFICENT CERTAINTY.
This entry is intended to help you avoid this result!
Let me tell you where this could be a real problem…. That is, when a new manager takes over a property and all they get from the former manager is a BALANCE FORWARD, there is a higher likelihood of challenge.
When we get ledgers that starts with a “balance forward” of say $1,000, we know that we (the manager too) will have to justify the $1,000. I point this out as a helpful tip to avoid collection disputes – pay special attention any time you start your ledger with a balance forward – make sure you know what caused the “balance forward” in the first place.
This was just a quick entry. My next entry will be a detailed analysis of the 2015 legislative changes that affect Utah HOAs. My best, John