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HOA dues payments decline
When the foreclosure storm slammed Fairfax County, a second storm rolled in with it that is threatening homeowners associations' budgets.The budgets of some homeowners associations around the county are becoming tighter as more homeowners fall behind in making their association payments, managers are saying.
“It's affecting associations in varying degrees,” said Frank Rathbun, a spokesman for Community Associations Institute, a national organization that supports HOAs.
“A fair number of HOAs across the country are suffering,” Rathbun said, adding that the problem seems to be directly linked to foreclosure rates in some instances.
For the Burke Center Conservancy association, the number of delinquent dues payments about doubled since last year, according to Patrick Gloyd, the association's executive director.
Although the delinquency rate is not “terribly alarming,” staff at the Burke Center Conservancy Home Owners Association are concerned about what it could mean for the association's budget in the future, Gloyd said. In June 2007, there were 233 homeowners who were 30 days or more behind on payments in the association of about 5,800 homes, he said. A year later, that number grew to 507.
In Clifton's Little Rocky Run HOA, the number of overdue accounts is not necessarily higher this year, but the amount owed by homeowners is rising.
“The number of debt write-offs we have to do is definitely higher,” community manager Pat Moore said. She added that the change hasn't really affected the association's budget yet.
“For some ... this is just a nuisance and for others it's a significant problem,” Rathbun said.
HOAs that experience a higher rate of delinquencies than they budgeted for might begin to raise assessments, trim capital improvements and require homeowners to be responsible for landscaping, Rathbun said.
Although the organization has no concrete data about delinquent HOA dues, the problem seems to be worse in lower- and middle-income communities across the nation, Rathbun said.
Delinquencies are not higher than normal this year at Franklin Farms HOA, a diverse community of about 1,800 homes in Oak Hill, Jerry Schmitt, executive director, said. But delinquencies in the nearby Chantilly Highlands community in western Fairfax County have about tripled in recent months and the board is trying to be more aggressive about going after late dues, Paul Thurneysen, board president, said.
The community of about 900 homes normally has had fewer than five delinquent accounts a year.
“Some of this is economy-related and some of it is related to foreclosures in the community,” Thurneysen said.
It would be worthwhile for HOAs to rely on the advice of legal experts and professionals now more than ever, Rathbun said.
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