For both community association boards and the association members, it is important to know and understand the process for proper collection of association assessments. Because Oklahoma law for both condo and homeowner associations simply refers the researcher back to the governing documents, the first place to look for guidance on assessment issues is the declaration of covenants (however it is titled).
The governing document should outline a clear and fair procedure for:
- Association budgeting;
- Invoicing of assessments;
- Notification of member's delinquency
- Filing of liens to secure repayment
- Recovery of association costs in the collection process
Some might say that an association that "collects" assessments from unwilling members isn't being very neighborly. However, when a person purchases property within a community association, they agree to join their neighbors in the mutual funding of the common expenses of the association. When one neighbor unilaterally opts out by refusing to join their neighbors in funding the association, their neighbors get to carry the financial burden for the unwilling owner. Some might say that isn't very neighborly.
So that the association can operate optimally, without having to specially assess owners for shortfalls, a fair and clear collections practice should be instituted by the association. Before the board contacts an attorney for collection of delinquent assessments, the board should make an attempt to contact the delinquent owner, apart from the routine invoicing of assessments. The board may want to determine if the owner is undergoing a medical emergency, has been called up to active military duty, or has some other circumstance that may warrant the board offering a payment plan.
In an instance of no contingency, and if provided by the governing documents, the board should secure repayment by the filing of a lien against the lot for which the assessment is owed. While some may have the impression that association liens cannot be foreclosed in Oklahoma, such impression is false. In Oklahoma, association assessment liens may be foreclosed, even to the point of the sheriff selling the subject lot. Because of this, it makes sense for association members to meet their assessment obligation realistically, without polemic or philosophic defenses. By meeting their assessment obligations reasonably, an owner will help make their neighborhood a community. In the same vein, a reasonable board will seek community through the association's collection practices.
By: Matthew Winton, an Oklahoma community association attorney.