How to Handle a Spike in HOA Delinquency: 4 Steps for Financial Stability

Summer is typically a time of community engagement, but things are a bit different this year. From rising credit card debt stemming from holiday purchases to a 47% increase in year-over-year job cuts, HOA and COA delinquencies are heating up just as much as the weather. This means that management companies should expect rise in past-due assessments – but with the right tools and strategy, there’s no need to a rise in legal action. 

There are proven, proactive steps your management company can take now to minimize financial disruption and protect your community’s long-term stability. Here’s how to regain control and respond with confidence.

1. Get Clear on the Numbers

Before making assumptions, take a detailed look at your current delinquency data:

• How many homeowners are late?
  
• What percentage of your total operating budget is affected?
  
• Are there trends by unit type, location, or payment method?

Data clarity is the first step toward smart decision-making. Many managers and Boards find that to address the situation, a targeted approach to the relatively small segment of homeowners who fall past due will work best. 

2. Communicate Early, Often, and in a Personalized Manner

Open and transparent communication can prevent problems escalating. Before sending legal notices or late fees manually:

• Tailor the communications. Equity Experts is fueled by TechCollect‘s technology, which automates communications to the homeowner based on channel preferences, state regulations, and repayment likelihood – recovery up to 90 percent prior to legal escalation. 
  
• Be empathetic. Acknowledge that times are tough, but emphasize the importance of dues in funding shared services, repairs, and amenities. 
  
• Make sure homeowners understand their options and the potential consequences of prolonged nonpayment. Offer payment plans and ensure they know you’ll work one-on-one with them to get their account back up to date. 

3. Don’t Wait to Bring in the Pros

Managers and Boards sometimes wait too long to involve a recovery partner, leading to increased costs, emotional conflict, and missed opportunities for early resolution.

A professional team can:

• Step in quickly and discreetly
  
• Use automated legal workflows to stay compliant and efficient
  
• Provide real-time updates so your board can stay focused on governance, not debt collection

Remember: outsourcing collections doesn’t mean you’re being aggressive. It means you’re being responsible.

4. Consider the Long Term Strategy

Delinquency is more than a line item—it’s a signal. Use this moment to:

• Review your budget forecasts for cash flow impacts
  
• Reassess reserve contributions
  
• Look at trends over time to anticipate future challenges
  

Prevention starts with awareness. Strong financial systems and partnerships help ensure that your community stays protected, even in uncertain times.

Let Equity Experts Help

At Equity Experts, we specialize in HOA and COA recovery, and we understand the delicate balance between protecting your community’s finances and maintaining good relationships with your neighbors. We know that there’s a past behind every past due, and we take that into tremendous consideration when we connect with homeowners to recover debt. Our technology-driven, legally sound approach gets results without creating unnecessary conflict.

Need help responding to a rise in delinquencies? Let’s talk.