By Chris Stubbs, Clean View HOA Financial

In just the first quarter of 2025, over 68,000 U.S. properties entered foreclosure—a 14% increase from the previous quarter and a troubling signal for communities nationwide. A key driver? Soaring HOA dues, which have been fueled by inflation, rising insurance premiums, and escalating service costs.

However, there's another, often-overlooked culprit: inefficient collections processes. Many homeowner associations still operate without strong AR (accounts receivable) systems or compliant, proactive collection policies. This leads to preventable financial strain—not just for individual homeowners, but for entire communities as well.

• Your Operating Budget Depends on It. Each unpaid assessment weakens the HOA's ability to cover ongoing expenses, such as landscaping, insurance, repairs, utilities, and professional services. In today’s high-cost environment, even modest delinquencies can throw an entire budget into disarray.

• Inflation and Insurance Are Tightening the Squeeze. In many regions, insurance premiums have doubled—or worse—while utility and vendor costs continue to climb. Without a predictable cash flow from dues, communities may be forced to defer maintenance or dip into reserves, thereby risking long-term financial instability.

• Reserve Funding is Becoming More Regulated. Across many states, new legislation is mandating that HOAs conduct reserve studies and fund long-term repair accounts appropriately. Falling behind on collections jeopardizes these goals—and in some jurisdictions, could even put associations out of compliance with local law.

• Transparent delinquency notices that outline potential consequences—including foreclosure and loss of equity.

• Clear disclosures about credit counseling resources or state-specific homeowner advocacy services.

• Mandatory owner contact information policies for phone, text, email, or physical mail communication.

• Legally required ledgers, which must be made available to owners upon request within defined timelines.

• Annual reporting requirements around delinquencies, judgments, payment plans, and foreclosures.

• HOA loans can carry high interest rates, especially for communities without a strong financial track record.

• Special assessments create hardship for owners who are paying on time—and foster resentment within the community.

• Cash flow issues delay critical services, leading to quality-of-life concerns and reduced property values.

• Automate Notices and Follow-Ups. Use software to issue reminders, apply late fees, and trigger escalation steps without relying on manual intervention.

• Set Clear Expectations Early. Ensure that your governing documents and collection policy outline due dates, late fees, interest, and consequences in plain language.

• Offer Flexible Payment Plans. Support struggling homeowners with structured payment plans that keep cash coming in while showing compassion.

• Document Everything. Keep detailed records of contact efforts, payment arrangements, and account balances. These will be critical if legal escalation becomes necessary.

• Monitor and Report Delinquency Trends. Track monthly data on delinquencies, payment plans, and legal actions. These insights can inform budgeting and help meet future state reporting requirements.

• Draft and maintain compliant collection policies

• Automate AR workflows and reduce manual errors

• Manage communication with owners compassionately and efficiently

• Provide financial insights that support better board decision-making

• All owners are treated equitably

• Financial gaps don’t spiral into deeper problems

• Your board can budget with confidence

• Your community remains desirable, safe, and well-kept

Why Staying Current on Collections Is Critical

Even a few delinquent accounts can have a harmful ripple effect on your community. Therefore, staying on top of collections is crucial for the following reasons: 

Collection Requirements Are Evolving Nationwide

States across the U.S. are beginning to tighten requirements for HOA collection practices. Boards should expect (or already be subject to) new standards such as:

Even if your state hasn’t passed similar legislation yet, it’s wise to prepare now and standardize your collections in line with best practices.

The Hidden Cost of Unpaid Dues: Financing the Gap

When owners fall behind, HOAs often need to bridge the gap with loans or special assessments. But borrowing isn’t free:  

Ultimately, the cost of financing unpaid dues is paid by everyone—not just the delinquent owner.

Best Practices for a Healthy Collections Strategy

To protect your community’s financial health, it’s crucial to implement a collections strategy built for transparency, fairness, and sustainability. Here are some key steps to take:

Partnering with Financial Experts Makes a Difference

Effective collections require consistency, empathy, and legal awareness, which is why many boards choose to work with a dedicated HOA financial partner. A dedicated HOA financial partner can help communities:

Final Thought: Collections Are About More Than Cash

Collecting dues is crucial for funding your community—but it also plays a key role in building trust, maintaining fairness, and staying ahead of legal and economic change. A well-run collections process ensures that:

Now is the time to audit your collections process, prepare for future regulatory changes, and reinforce your financial foundation.

About the Author:

Chris Stubbs is the CEO of Clear View HOA Financial, which provides comprehensive financial management services for HOAs. With over 20 years of experience, he leads a team known for expert support and exceptional service, delivering precise financial oversight for community associations.