Want to Report HOA Delinquencies to Credit Agencies? May Not Be Wise
This article is part of an ongoing series in which we'll take your questions from the HOAleader.com discussion forum and get you the answers you need from experts who specialize in association management. If you have a question you need answered, post it on the message board. |
An HOAleader.com reader asks if it's permissible for an association to report delinquent assessments and property liens associated with delinquent assessments to credit reporting agencies. In this week's tip, we explain that the answer is unclear in many states. But others sometimes can, or do, on your behalf.
"In Illinois, the way the collection system works is an association will issue delinquency notices and file suit for nonpayment," explains Kelly C. Elmore, a Chicago-based principal at Kovitz Shifrin Nesbit, which represents thousands of community associations throughout the metro area. "If the delinquency isn't paid, the association will obtain a judgment. The courts are the ones who then report that judgment to the credit agencies. It's my understanding that it's not reported unless and until the court system records the judgment. And I don't know that our statutes address anything with respect to reporting."
If your state doesn't address this issue, your property manager may be able to do this on your behalf. "As a property management company, we can report," explains Jenny Key, the Austin, Texas—based vice president of RealManage, a San Rafael, Calif., association management firm that oversees properties in Arizona, California, Colorado, Florida, Louisiana, Nevada, and Texas. "However, we as a company typically don't. I don't know if it's because of this, but we don't have all the information needed because we don't capture things like Social Security numbers."
Your lawyer may also be able to do this on your behalf. But if your lawyer's like Ben Solomon, it won't happen. "In Florida, our law firm will not do this," says the attorney and founder of the Association Law Group in Miami Beach, Fla., who for more than a decade has advised more than 500 associations and also represents developers through his second law firm, Solomon & Furshman LLP. "And I don't believe any my colleagues in the legal field implement that procedure."
Find out why our experts generally agree with Solomon that it's not a tactic you should pursue in our new article, Can You, and Should You, Report HOA Delinquencies to Credit Agencies?
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Matt Humphrey
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