Assessment Collection for Associations During the COVID-19 Crisis
As condominium and community associations continue to operate within the limitations imposed by federal, state and local governments, the financial impact of the Coronavirus (COVID-19) emergency looms. With most budgets leaving no (or very little) room for discretionary spending, associations must have the ability to pay for services and repairs necessary to sustain them. In light of widespread job losses, furloughs and unemployment, associations should prepare to safeguard the lifeblood of their funding – monthly assessments.
As early as possible, boards must convey the importance of timely assessment payments to the ongoing existence and operation of their associations. While temporary amenity closures and project delays may help to gap cash flow problems, they will not likely have significant impact on the overall budget or the monthly assessment. Abatement, reduction or waiver of the obligation to pay assessments are thus unrealistic. However, the extent to which the board has reviewed the budget, made adjustments and taken appropriate action should be clearly and proactively communicated.
Dire circumstances require special attention. Boards should thus be prepared to grant requests for payment plans and late fee waivers. Especially for owners who have never been delinquent, policies for temporary leniency and forbearance may be appropriate. A reasonable and consistent approach will help mitigate the financial impact of this crisis. Aggressive collection procedures have their place. However, with most Pennsylvania Court systems closed to all but criminal and emergency matters, legal action for existing or pending files may not immediately be possible. And, assuming this crisis is temporary, a short delay in proceeding with legal action may also avoid unnecessary legal fees.
Should you wish to discuss the foregoing or any other association matter, please do not hesitate to contact us – we are here to assist you.