I hate my neighbors
June 4, 2008 4:09 AM Subscribe
Can a Homeowners Association (condo, specifically) require that its dues be paid by the mortgage company out of escrow?
Tiny background: I live in a 12 unit condo building. I was on the board for 7 years, and it was an exhausting nightmare. I resigned. Now the board is whining for me to come back. I don't want to. But I want to at least help them. Because I don't want my home to crumble to pieces.
So anyway, one problem we have is collecting association dues in a timely manner. So I figured one way to solve this problem is to let somebody else deal with the problem- let the owners' mortgage companies pay the dues out of escrow. The property taxes and other fees get paid that way, why can't the condo dues?
But I can't find any resources on the 'net regarding this. How do we set it up? Is it even possible?
(I know I can have a lawyer do it, but I want to gather information before I contact ours, and/or avoid it if possible.)
((And what tags do I use to make that tiny print that I see people using?))
Tiny background: I live in a 12 unit condo building. I was on the board for 7 years, and it was an exhausting nightmare. I resigned. Now the board is whining for me to come back. I don't want to. But I want to at least help them. Because I don't want my home to crumble to pieces.
So anyway, one problem we have is collecting association dues in a timely manner. So I figured one way to solve this problem is to let somebody else deal with the problem- let the owners' mortgage companies pay the dues out of escrow. The property taxes and other fees get paid that way, why can't the condo dues?
But I can't find any resources on the 'net regarding this. How do we set it up? Is it even possible?
(I know I can have a lawyer do it, but I want to gather information before I contact ours, and/or avoid it if possible.)
((And what tags do I use to make that tiny print that I see people using?))
let the owners' mortgage companies pay the dues out of escrow.
My guess is that you can definitely do this for new people moving into the condo. It would be an inconvenience, and you may be confronted with resistance, for existing homeowners.
posted by LoriFLA at 6:40 AM on June 4, 2008
My guess is that you can definitely do this for new people moving into the condo. It would be an inconvenience, and you may be confronted with resistance, for existing homeowners.
posted by LoriFLA at 6:40 AM on June 4, 2008
Best answer: Short answer: No.
The long answer has to do with the fact that homeowners' association dues are in an entirely different legal category than property taxes and mortgage payments. No mortgage company I've ever dealt with (my law firm has an enormous mortgage practice) would muck up their accounts with what is, essentially, not their problem.
posted by crush-onastick at 7:44 AM on June 4, 2008
The long answer has to do with the fact that homeowners' association dues are in an entirely different legal category than property taxes and mortgage payments. No mortgage company I've ever dealt with (my law firm has an enormous mortgage practice) would muck up their accounts with what is, essentially, not their problem.
posted by crush-onastick at 7:44 AM on June 4, 2008
Best answer: You can't require a homeowner's dues to be paid by his/her mortgage company, because you can't require a homeowner to have a mortgage.
Do the homeowners have an incentive to pay on time? Are late fees assessed? Can they be increased? Do you provide multiple options for paying the dues? When my board started offering automatic bank draft, we saw a clear drop in delinquencies.
posted by Dec One at 9:05 AM on June 4, 2008
Do the homeowners have an incentive to pay on time? Are late fees assessed? Can they be increased? Do you provide multiple options for paying the dues? When my board started offering automatic bank draft, we saw a clear drop in delinquencies.
posted by Dec One at 9:05 AM on June 4, 2008
The mortgage lender collects the taxes and other fees at the mortgage lender's insistence. Because they want to be first in line to repossess if the owner defaults on their bills. If the owner doesn't pay the taxes, then the government gets the property and the mortgage lender gets nothing -- so the mortgage lender pays the taxes to make sure that there's still collateral behind the loan
I don't think the mortgage company is going to want to have anything to do with collecting your fees for you.
posted by winston at 10:44 AM on June 4, 2008
I don't think the mortgage company is going to want to have anything to do with collecting your fees for you.
posted by winston at 10:44 AM on June 4, 2008
Response by poster: Presuming they have a mortgage, of course. Automatic bank drafts might be an option- is there a fee involved?
Most owners (there are only 12) pay on time. And others mostly pay ontime. But there are one or two who are simply deadbeats. One guy specifically is a nightmare- he's upside down on his mortgage, he has defaulted on a second mortgage and he doesn't have a regular job (lots of working for cash, etc.). ANYTHING we do would make the problem worse- that's why I thought of the escrow thing. Make it out of his control, and it would make it easier for everyone else. (One less check to write.) He is generally up to date, but it is a constant battle. He is basically a 70 year old 14 year old. So while in gross dollars it's not so bad, his aggravation costs are sky high. And at any moment he could have a particularly bad night at the casino (did I mention he is a gambling addict?) and never pay again. And he's the sort of guy who would squat and make life miserable for everyone.
(One time, I swear to god, he tried to blow the building up. The gas company shut off the gas to change the meter (UNANNOUNCED!) and this guy turned all his stove burners on, and left. We discovered it when we went around to light all the pilot lights.)
Although as I write this, I do remember that he collects some kind of Social Security. I wonder if we could find a way to attach to that? Or at least convince him to let us do a bank draft the day the money comes in.
posted by gjc at 5:05 PM on June 4, 2008
Most owners (there are only 12) pay on time. And others mostly pay ontime. But there are one or two who are simply deadbeats. One guy specifically is a nightmare- he's upside down on his mortgage, he has defaulted on a second mortgage and he doesn't have a regular job (lots of working for cash, etc.). ANYTHING we do would make the problem worse- that's why I thought of the escrow thing. Make it out of his control, and it would make it easier for everyone else. (One less check to write.) He is generally up to date, but it is a constant battle. He is basically a 70 year old 14 year old. So while in gross dollars it's not so bad, his aggravation costs are sky high. And at any moment he could have a particularly bad night at the casino (did I mention he is a gambling addict?) and never pay again. And he's the sort of guy who would squat and make life miserable for everyone.
(One time, I swear to god, he tried to blow the building up. The gas company shut off the gas to change the meter (UNANNOUNCED!) and this guy turned all his stove burners on, and left. We discovered it when we went around to light all the pilot lights.)
Although as I write this, I do remember that he collects some kind of Social Security. I wonder if we could find a way to attach to that? Or at least convince him to let us do a bank draft the day the money comes in.
posted by gjc at 5:05 PM on June 4, 2008
I don't know about bank fees. We have a management company collect dues for our 69-home neighborhood, and they take care of the bank draft. Presumably you have a business checking account with a bank? Ask the bank about automatic draft.
posted by Dec One at 8:05 PM on June 4, 2008
posted by Dec One at 8:05 PM on June 4, 2008
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posted by jacalata at 4:48 AM on June 4, 2008