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Business Debt/SOL on HOA variable expenses

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Expert: - 7/6/2007


Question
Hi Michelle,

The property management company that manages our Home Owner Association account stopped collecting the variable expenses in March 2001. We have a written contract that says we are responsible for the variable expenses. They started charging us again in August 2005, and we've been paying since then. Now they want to collect the $3,000 that we didn't pay between March 2001 to July 2005. Their argument why they stopped billing us is because we had low reserve in our HOA saving account. We think it's the HOA's negligence that they didn't collect the bills from us during the time, and therefore we should not be held responsible 100% for the debt we owed. I'm reading the SOL on debt collection. Does the 4 year limitation on written contract apply to our case? If so, how is it calculated? Does it start from the present time going back 4 years, or from the last time we started paying again in 2005?

Thanks,

Judy

Answer
Judy,
Most states MANDATE that the Board of Directors levy assessment so that the HOA can fulfill its obligations under the law and CC&Rs to do things like maintain the
common areas and provide liability insurance. Negligent billing practices by the Board or the management company do not change this...they have a duty to collect the assessments.

In California, I'm not sure in the 4-year statute applies for open book account or a 3-year statute for violation of a statutory duty. The board should do is work with each individual homeowner to come up with a reasonable repayment plan to recoup all the money they are required to collect.
Good luck!

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Michelle Dunn

Expertise

As one of the Top 5 Women in Collections, one of the Top 50 Collection Professionals, and winner of the Business Excellence award, I can answer any questions about debt, debt collection, improving business credit, creating a credit policy, enforcing a credit policy and collecting on past due accounts. I can also answer questions in regards to starting a debt collection agency since I have been a bill collector for over 24 years, started and ran my own collection agency for 8 years, and maintain my 12 year old Credit & Collections Association for members of the credit & debt collection industry. I am also the author of the popular and award winning book "Starting a Collection Agency, how to make money collecting money" now on it's 3rd edition. This book has won a the Writers Digest self published award as well as the New York Book Festival Award. I am a repeat contributor to the Wall Street Journal, and have been featured on NPR, CNN, as well as many other national radio and television programs. I have also been featured in national publications such as the Wall Street Journal, Forbes, Smart Money, MSNBC and much more. I have 17 published books to my name and am an accomplished speaker and consultant. I currently write 9 columns for newspapers, magazines and online portals worldwide.

Experience

I have over 24 years experience in debt collection, I started and ran my own collection agency for 8 years and I am the founder & owner of my Credit & Collections Association that I founded in 1998. www.credit-and-collections.com

Organizations
My Credit & Collections Association, I was also a member of the American Collectors Association and Plymouth Chamber of Commerce for 11 years. I am a member of many writing groups as well as my local Women Inspiring Women chapter. I am a member of Know More Media as an expert for their blog on business credit.

Publications
Business NH Magazine, Smart Money Magazine, MSNBC, CNN, Forbes.com, The Wall Street Journal, Home Business Magazine, Entrepreneur Magazine and website, many books, newspapers and television programs as well.

Education/Credentials
I have written 17 books in my collecting money series and one for Entrepreneur Press called the Ultimate Credit and Collections Handbook. My newest book is being published by John Wiley & Sons in May titled, The Guide to Getting Paid, how to weed out bad paying customers, collect on past due balances and avoid bad debt. This book is also being sold to many colleges as a text book.

Awards and Honors
My book Starting a Collection Agency, how to make money collecting money won an award from Writers Digest and the 2007 New York Book Festival in the "How to" category. I have won 2 awards from Dun & Bradstreet and Governor Jean Shaheen. I was nominated as one of the Top 5 Women in Collections twice as well as having been selected as one of Collection Advisor's Top 50 Collection Professionals by my peers.

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