When I owned a property management company, we went to great lengths to standardize our bidding processes.  We created online bidding, vendor screening, and requests for proposal (RFP) webforms that could only be submitted if they were complete; no opportunity to cross out items or modify the RFP.  The result was consistent bids that we could present to Boards in a simple matrix.

The single exception to our efforts was attorneys.  When we requested proposals for collection services, our forms would get discarded and instead we would get a brag letter, rate sheet, and retainer agreement.  What we learned was that local attorneys often relied on their relationship with the Board to circumvent the manager, so any effort to create standardization and accountability in that relationship was met with stiff resistance.  But this is changing.

Relationships are important, but standardization required by the Fair Debt Collection Practices Act (FDCPA) all but ensures that collections be treated as a commodity.  The letters and processes used between different collectors will have very little distinction, so awarding collection services to one vendor over another should be based on results and ROI. 

Board members are becoming savvier about their options, and their expectation for tech-driven efficiency is increasing.  Workflow software and document assembly systems are helping to drive down the cost of collections while increasing accuracy, and predictive analytics can instantly provide the best collection strategy for each delinquency.  The result is better ROI with less liability, faster recoveries, and less punitive cost to the debtor.

Collections are an important aspect of the fiduciary relationship.  As Boards consider the cost and ROI of their collections, it only makes sense that they seek standardized bids on an annual basis. 

If you would like a free Collection RFP template, fill out your email address and we will contact you immediately.  We wish you the best in the new year and hope that this helps!

As we have been discussing in previous legal updates, foreclosure during the pandemic has been a difficult decision for boards. They are facing the challenge of honoring their obligation to pursue past due assessments timely while balancing the importance of public safety and compassion towards their neighbors. As we have done in our previous updates, we want to provide you with some guidance on how you should approach foreclosures as we move into the new year.  

While the decision if and when to initiate legal action is nuanced, we believe strongly that up-front proactive communication prior to foreclosing or initiating a lawsuit is unquestionably important. If Equity Experts has been working your delinquencies, almost every owner has received multiple communications through various channels offering both payment and settlement options, as well as assistance for those facing hardship. We have found that documenting proactive collection attempts prior to foreclosure lessens risks and improves recoverability when those actions are required.  

For the financial health of the community, it is imperative to collect all past due assessments in a timely manner. There are several ways communities, through their collection partners, can begin their collections through compassionate outreach opportunities, including not just written communication, but also phone calls, emails, or other methods. Communicating with a past due owner in a way that is most convenient to them not only resolves accounts more quickly, but it also provides the homeowner a better experience and promotes the type of goodwill and partnership that helps your communities thrive.