Collections During a Pandemic
Many associations have inquired whether there are any restrictions in taking collections action to recover unpaid assessments. Currently, the Cares Act and other federal laws do not prevent associations from proceeding with collections, including initiating a personal obligation or foreclosure lawsuit. Likewise, there is not a Washington or Oregon state law preventing an association from sending delinquency notice letters, recording liens, or filing lawsuits.
However, in Washington, Governor’s Proclamation 20-51 currently prohibits an association from assessing late fees or interest on delinquent accounts beginning April 17, 2020. Originally, Governor’s Proclamation 20-51 also prohibited assessing fines for violations of the governing documents, but this restriction was lifted. Beginning August 2, 2020, Washington associations can now levy fines for violations of the Association’s governing documents. Oregon’s Governor has not adopted a proclamation similar to Washington’s, so associations in Oregon can assess late fees and interest on delinquent accounts, as well as levy fines.
While it may seem callous to proceed with collections during a pandemic, if associations fail to collect assessments from owners, the association will not have funds necessary to operate. Rather than stopping all collection action, if an owner fails to respond to the association’s standard delinquency notice letters, an association may consider offering to setup payment arrangements and/or waive late fees or interest assessed to the account. This may make it easier for an owner to bring and keep their account current.
No own knows exactly how long we will be dealing with COVID-19 or the economic impact it will continue to have on our communities; however, we do know that associations need to collect assessments to pay its common expenses. If you would like to discuss collection options for your association, please do not hesitate to contact our collections department. Barker Martin would appreciate the opportunity to create a tailored collections program for your association!