How can the HOAs save money?

Published May 1, 2009

by JoAnn Smith Heckman, R.R.P.
President/C.E.O.
Collections Unlimited, Inc.

In this ever changing economy, what can Homeowners Associations do to save money? What can they do to attract their new owners to utilize the resort? What can an H.O.A. do to solicit their owners to become more involved with their resort, and ultimately their Association? These are the questions we hear at most of the Board Meetings we attend all over the country.

First of all, as with all companies, cutting costs is the first avenue to pursue. But, where can you cut costs without diminishing the services and amenities offered to your owners?

For over thirty years I have worked in the timeshare/resort industry from Salesperson to Project Director. I’ve worked my way from collector to collection agency owner. Collecting the annual assessments is the biggest challenge facing any H.O.A. today.

Associations hire employees that attempt in-house collection of the assessments prior to the due date and as they become delinquent. What does this in-house service cost the Association and how well does it accomplish the end goal of collecting all the assessments due?

Many states have passed legislation that allows Homeowners Associations to pass along the cost of contracting with a third party agency along to the delinquent consumer. Most Condominium Documents address this as well. Hiring a professional third party collection agency to collect your delinquent assessments is the answer to cutting costs.

To begin with, your phone bills will be lowered, postage will decrease and your valued employees can spend their time servicing your owners in other capacities. This alone will stimulate more owner/management communication that increases the interest of your owners. Not having personnel available to speak to your owners when they call is a red flag that turns off many owners.

Contracting the collection of your delinquent assessments with a professional third party resort industry collection agency is a plus for your owners. The collection professionals employed by these agencies know the timeshare industry and can answer many questions your owners may have. We resolve problems and strive to educate the owners in using their timeshare either at their home resort or through the various exchange programs available through their home resort.

The key to making this work for your Association is to turn the accounts over to the collection agency early. Don’t wait for months and months to make the decision. Start the year off with a billing and collection policy that the Association sticks to. Make it fair to all owners.

Consumers will be filing their income taxes earlier this year. Our government is working on another stimulus package to place money directly in the hands of their constituents in the near future. As the old adage goes, “The early bird will get the worm…” The key is to turn your delinquent accounts over to the collection agency early and reap some of the benefits.