The following is an excerpt from another website:
"The Association does not have "deep pockets." The only money it generally receives is the assessment payments of the owners. If some of the home owners go into bankruptcy or simply cannot make payment, there will be a budgetary shortfall. Because the budget is determined and then divided amongst the home owners, bad debt will cause a shortfall. It is necessary for the board to determine the anticipated shortfall from bad debt, and to budget accordingly. The past history regarding bad debt can be useful in determining the expected shortfall, but other factors such as the number of cases in collections and the general condition of the economy also may be considered.
"Once one understands that an association budget is nothing more than dividing up the expenses between the home owners, it becomes readily apparent that the failure of one homeowner to pay his or her fair share of the expenses means that his or her neighbors are the ones paying the delinquent owners bills. This is not an acceptable situation. Therefore, the board has a duty to take every reasonable action to collect the assessments. The board may not waive or excuse, or otherwise forbear the payment of assessments. Those home owners who refuse to pay their assessments should be pursued in court, and every reasonable action should be taken to compel payment. Most associations have lien rights in the unit and can foreclose, take ownership or possession of the property, or garnish the wages or bank accounts of the delinquent owners. Most associations have the ability to recover from the delinquent owner, the costs of collection, including attorneys' fees and legal costs. In addition, because it is unfair for some owners to pay on time, and others to cause the Association to incur expense from late payment, it is appropriate for the board to charge a reasonable late charge (in accordance with its governing documents and applicable law)."
