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.