The community association management industry begins 2025 with much uncertainty. From boards struggling with mounting financial pressures to shifting legislative demands that bring more confusion than clarity, associations are poised to see a shakeup in their collections processes. Here’s our roundup of key industry trends that will impact delinquency, collection policies, and overall community financial health:
1. Increased Assessments Drive Financial Strain
Rising operational costs, insurance premiums, and continued inflation are prompting many associations to raise assessments. While necessary to sustain services and cover growing expenses, these increases may lead to higher delinquencies as homeowners struggle to adjust.Â
There are many ways that boards and management companies can support their homeowners during the transition. First, clear and concise communication is necessary, and boards should plan to regularly remind their homeowners when the increased assessment goes into effect. Second, offer homeowners the ability to understand the association’s budget and ask questions. The greater financial transparency, the better the outcome. Finally, where possible, offer payment plans to homeowners who are experiencing hardship. One of the many benefits of using Equity Experts is the thoughtful, human approach to deferred payment options. We create uniquely tailored repayment plans so that the balance is recovered in a way that benefits homeowners and associations alike.
2. Reserves Funding Will Further Drive Assessment Increases
Another reason for increased assessments? Increased reserves funding. Sufficient reserve funds are essential for handling unexpected expenses and long-term projects, and associations risk financial stability without proper reserves. Many states are now requiring larger reserves to address infrastructure needs, and some states are also requiring greater transparency to ensure tragedies like the Champlain Towers collapse never happen again.Â
If delinquencies increase within an association, their plans for healthy reserves are threatened. That’s why it is so important to plan ahead within an association budget, accounting for potential delinquencies based on payment history. By proactively addressing these challenges, associations can safeguard their financial health and provide stability for their communities.
3. Board Member Recruitment Becomes Even More Challenging
Recruiting volunteer board members is becoming increasingly difficult as responsibilities grow more complex – and that couldn’t be more true when it comes to collections. Board members are neighbors, too; they care about the well-being of those who live beside them, and when their neighbors fall into financial hardship, they don’t want to be part of an impersonal collections process. This is one of the many reasons why it is so challenging for management companies to find new and aspiring members to care for their communities.Â
Collection processes that are fair and transparent are important for new board members to see within their communities. It’s also important for them to have access to technology that will improve communication workflows and diversify repayment options for the homeowner. More sophisticated technology will make board members feel more confident when they have to manage collections issues. Finally, education is vital. Management companies must focus on supporting board members through enhanced training, technology, and expert resources to lighten workloads and attract qualified volunteers.
4. Legislative Uncertainty Increases Challenges with Compliance and Regulation
The back-and-forth challenges against the Corporate Transparency Act in 2024 threw CAM industry professionals for a loop – and unfortunately, we expect legislative uncertainty to continue. Policies surrounding foreclosures and delinquencies are under increased scrutiny, with growing emphasis on fair practices and homeowner protections. The Community Associations Institute recently released recommended policy changes to state legislatures, including reasonable payment plans, minimum delinquency balances, and exclusions for balances composed solely of fines.
Management companies will need to be proactive in their review of collection policies within their state and stay up-to-date on pending and new legislation, keeping their clients informed of all updates at all times as well. In doing so, it will be easier to update policies within an association’s CC & Rs and communicate the policy change to their communities at large. Working hand-in-hand with a solution – such as the one offered at Equity Experts and TechCollect – will also be important to automate and streamline changes as they come into effect. Â
Looking Ahead
The landscape for HOA and COA collections is shifting, bringing both challenges and opportunities. As 2025 unfolds, proactive associations and management companies must adapt to rising assessments, reserve funding demands, board member recruitment difficulties, and increasing legislative complexity. Navigating these trends requires not just awareness, but a thoughtful strategy that prioritizes fairness, transparency, and innovative solutions.
At Equity Experts, we’re here to help you turn these challenges into opportunities. Our tailored approaches, technology-driven solutions, and commitment to community well-being ensure that your association can maintain financial health while fostering trust and stability.
Ready to future-proof your collections process? Book a consultation with Equity Experts today and discover how we can help your community thrive in 2025 and beyond.