I stumbled upon the article below, as I have been fielding (and every HOA Board member usually does) comments and questions about paying or not paying HOA dues. Specifically, residents tend to wonder whether their usage of facilities (pools, tennis courts, etc.) or not should impact their obligations to pay the HOA dues. At Hedgerow, I am very pleased to say that we have a history of high percentage payment from our community member households. This is a testament to the Homeowners and all of our desires to improve and maintain our little slice of Roswell. The article explains why we should all strive to maintain that rate and improve it.
By: Michael Rome, J.D. The articles below are not a substitute for consultation with legal counsel.
If you live in a mandatory homeowner association you probably pay annual dues, also called annual assessments. In condominium associations the assessments are usually paid in monthly installments. These dues help pay for such things as; maintenance of the common facilities, and professional services (including accountants, attorneys, & management companies). It is also prudent for an association to establish a reserve account to be used for large future expenditures, such as resurfacing the pool.
The provisions for paying annual dues are contained in the Declaration of Covenants for your association. The Declaration of Covenants is filed on the deed records in your county’s Superior Court. You automatically agreed to the terms of these covenants by purchasing your home.
The amount of the annual dues or “assessment” is determined each year by the Board of the Association. To protect the interests of both the homeowners and their lenders, the covenants often establish a maximum assessment based on the anticipated costs for maintaining the community. Usually, this maximum cannot be exceeded without a vote from the membership, but some covenants allow the Board to increase this amount each year by a specific percentage, or in step with the Consumer Price Index.
If a homeowner does not pay the dues, most covenants state that the association may charge a late fee and interest. In addition, a lien can be filed on the property called an “Assessment Lien.” This lien may contain extra costs including recording fees, cancellation fees, and attorney fees. It is not necessary to institute suit in order to file the lien.
An assessment lien should be paid in full during a sale of the property, or in the case of refinancing. In extreme cases, involving large amounts of past dues, an association would also have the ability to foreclose its lien on the property. In addition, the covenants often give the association the right to contact a homeowner’s mortgage company to notify them of the unpaid assessments.
Besides the above penalties, a homeowner could also be suspended from their right to use the common property (such as the pool), and their right to vote in the association, if such provisions are contained within the covenants.
Some residents try to withhold payment on their annual dues because they don’t use the amenities, or have a complaint about the association. The Georgia courts have ruled that a homeowner’s duty to pay dues is independent of the association’s obligation to provide services. Therefore, a homeowner cannot withhold payment due to their non-use of the common areas or because of a complaint about the association.