Homeowners associations and condominium communities rely on timely assessment payments to maintain the community, fund reserves, and cover essential services like landscaping, utilities, and insurance. When homeowners fall behind on payments, it creates financial strain on the association and, ultimately, on other homeowners. While internal collection efforts, such as late notices and payment plans, should be the first course of action, there comes a time when retaining a collection attorney is the most effective step in recovering delinquent assessments.

The Importance of a Collection Policy and Late Fee Schedule

A well-defined collection policy is the foundation for handling delinquent accounts efficiently and fairly. HOAs/condo boards should establish clear guidelines that outline:

• When a payment is considered late

• The amount of late fees and interest charges (as allowed by governing documents and state law)

• The steps the HOA will take before escalating to legal action

• Available payment plan options

• When liens or foreclosure proceedings may be pursued

Having a written policy ensures consistency in enforcement, prevents favoritism, and strengthens the HOA’s position if legal action becomes necessary. 

Lien Filing vs. Foreclosure Proceedings

When an account remains unpaid despite multiple notices, the HOA typically has two primary legal options: filing a lien or initiating foreclosure proceedings.

Lien Filing

A lien is a legal claim the HOA places on a property for unpaid assessments. It ensures that if the homeowner sells or refinances, the HOA has the right to collect past-due amounts from the proceeds. Filing a lien is a relatively low-cost and effective way to secure the debt, but it does not immediately result in payment unless the homeowner voluntarily settles the balance or sells the property.

Foreclosure Proceedings

In Washington State, an HOA can foreclose on a lien for unpaid assessments under RCW 64.34.364 (for condominiums) and RCW 64.38.100 (for HOAs). However, the law imposes certain conditions:

• The delinquency must be at least $2,000 or at least three months past due, whichever occurs first.

• The HOA must first record a notice of delinquent assessments in the county records.

• The association must provide the homeowner with a notice of intent to foreclose at least 90 days before beginning foreclosure proceedings.

• The foreclosure follows a judicial or nonjudicial process, depending on the governing documents and state law.

Foreclosure is a serious step that should only be considered for substantial delinquencies, as it requires legal expertise and can be costly for the association upfront.

Recoverable Attorney Fees: The HOA Fronts the Cost

When legal action is required, the attorney fees associated with lien filings, foreclosures, and collection efforts can be recoverable from the homeowner—meaning that, in theory, the HOA can recoup these costs once the delinquency is settled. However, there’s an important catch:

The HOA must front the legal costs.

Until the homeowner pays, the association is responsible for covering:

• Attorney retainer fees

• Court filing costs

• Foreclosure processing fees

For communities with limited reserve funds, this can place a significant financial burden on the HOA, making it difficult to pursue delinquent accounts aggressively.

When to Involve a Collection Attorney

A collection attorney specializes in recovering delinquent assessments through legal means, ensuring that the HOA follows proper procedures while maximizing the likelihood of collecting past-due balances. Here are some signs that it’s time to consider hiring a collection attorney:

• Internal collection efforts have failed – If reminder notices, late fees, and payment plan offers are ignored, legal action may be necessary.

• The HOA needs to file a lien – An attorney can ensure that the lien is properly filed and enforceable under state law.

• The association is considering foreclosure – Foreclosing on a property is a legal process that requires experienced legal counsel to navigate.

• The delinquency meets the Washington State foreclosure threshold ($2,000 or three months past due) – A collection attorney can determine whether foreclosure is a viable option.

• The homeowner is unresponsive or disputing the charges – A collection attorney can issue demand letters, initiate lawsuits, and represent the HOA in court if needed.

Final Thoughts

Every HOA needs a clear, enforceable collection policy to minimize delinquencies and protect the community’s financial health. While HOAs should first attempt to collect unpaid assessments through internal efforts, there comes a time when a collection attorney is necessary to escalate the process.

Washington State law provides HOAs with legal tools to recover unpaid assessments, but associations must be mindful of the minimum foreclosure threshold and required notice periods. By proactively addressing delinquencies and leveraging legal expertise at the right time, HOAs can ensure they remain financially stable while maintaining fairness among homeowners.