Education Center

State Legislators review and discuss multiple proposed bills every year aimed at community associations and the companies that manage them. 2019 was no exception to this pattern and resulted in the passing of a few new bills governing community associations.

 

Of particular interest is Senate Bill 1531 (SB1531), which changes a number of assessment collection requirements for community associations, management companies, collection agencies, and attorneys, and imposes new ones. Specifically:

 

 

• SB1531 has extended the deadline to foreclose on an assessment lien from three years to six (6) years "after the full amount of the assessments become due." In theory, this provides associations more flexibility to collect from owners by utilizing options such as longer payment plans before proceeding with foreclosure. In reality, though, the biggest effect this change has is that title companies can now collect assessments going back six (6) years from the date of closing. We see this as a positive change for community associations.

 

What does this mean for your community? If you are one of our clients, the only change is the mandated language, which we have already implemented. The required 30-day notice period is part of our current practice. Our cost for sending the Collection / Lien Demand Letter, as we call it, already includes delivery via certified mail return receipt requested. If you are currently being managed by one of our competitors, we suspect that the certified mailing requirement will result in an increased fee, which can be charged back to the delinquent owner's account. 

 

 

• Starting January 1, 2020, associations and their management companies are no longer able to send out annual payment coupon books. Instead, SB1531 requires associations to provide "a statement of account" with the same frequency that assessments are provided for in the governing documents. The bill elaborates on what must be included in the statement and exceptions to the statement requirement (e.g. accounts at the attorney for collections). It is already our practice to send out statements in lieu of coupon books so this change does not affect our operations. The increased mailing of statements will, however, result in increased charges to associations managed by many of our competitors who contractually have different charges for statements and coupon books, many of whom even charge for copies, postage, and envelopes.