General

Homeowner Beware — the Changing Management Company

With the downturn of the housing market in the early 2000s many associations became more budget conscious and looked for community association management firms (CAMs) who would provide the same services for less money.  Over the years many associations have continued to change management companies as they try to find the right fit.  This has led to a bigger problem as a waive of homeowners become past due in their assessments as a result of sending payments to the former CAM firm.  Unfortunately, the associations are not responsible for homeowners sending payments to the wrong CAM firm and the responsibility is squarely on the homeowner.

The issue is the notice of a change of CAM firms and the change of address to send payments is sent to homeowners by the new CAM firm.  Many of us have become frustrated with the amount of junk mail we receive and tend to toss mail from companies we do not do business with and are unfamiliar to us.  A good many of these notices are tossed without the owner opening the letter.


My tip for staying out of collections with the association attorney is to make sure you open any letter you receive from any management firm.  Quite a few use “association management” or “community management” in their name, but quite a few do not.  If the homeowner does not send payment to the correct address it ends up being an expensive lesson because the homeowner is liable for all attorneys’ fees, costs, interest and late fees.  Any payments submitted for less than the full amount are applied to interest and late fees first, then attorneys’ fees and costs, with any remaining funds applied to assessments last.  If homeowner does not pay in full the homeowner will always be past due and subject to lien and/or foreclosure of your home.


Another tip — do not try to circumvent the process by paying the association directly once you receive a letter from the association attorney.  This will only increase the attorneys’ fees you owe.  The attorney will spend time communicating with the association about the payment and the homeowner will again be responsible for those fees.