News items of national interest regarding Condominium and Homeowner associations, compiled by the Community Associations Network
Q. Is it legal for homeowner associations in North Carolina to use collection agencies to collect delinquent dues?
There is nothing to prohibit your HOA from using a collection agency to collect delinquent dues. The better question is whether using a collection agency is the most effective and cost-efficient method.
Collection agencies typically charge a “contingent fee” for their services – their fee is a percentage of whatever sum they collect, usually 25-30 percent.The problem is that HOAs cannot always recover this fee from the delinquent homeowner. State statutes prohibit HOAs from charging a homeowner any collection or administrative fee that is not specifically authorized in their Declaration.