Best Practices in Transferring Collections to Attorneys

When notices from the H.O.A. prove unsuccessful in recovering delinquent assessments, transferring collections to a law firm is likely the next step.  However, there is a prerequisite that must be fulfilled prior to the transfer, and there are certain documents and information that should be sent to the law firm in order to help solve the issue clearly, accurately, and expeditiously.

Notice of Delinquency to Owner

Before a collections file may be transferred to an attorney, Colorado Law requires that a notice of such delinquency be sent to the Owner, pursuant to C.R.S. Sections 38-33.3-209.5(5)(a)(V)(A) – (D).  This notice must contain four specific requirements:

1)    The total amount due, with an accounting of how that total was determined;

2)    Whether the opportunity to enter into a payment plan exists pursuant to section 38-33.3-316.3, and instructions for contacting the entity to enter into such a payment plan;

3)    The name and contact information for the individual that the Owner may contact to request a copy of the Owner's Ledger in order to verify the amount of the debt; and

4)    That action on behalf of the Owner is required to cure the delinquency, and that failure to do so within thirty-days may result in the Owner's delinquent account being turned over to a collection agency, a lawsuit being filed against the Owner, the filing and foreclosure of a lien against the Owner's property, or other remedies available under Colorado law.

Transferring Collection Accounts to Attorneys

When an H.O.A. Board decides to send the collections account to an attorney, there are documents and information that can be sent to the attorney when the file is transferred that will allow for a quick and clear collections process from the law firm. If possible, the following should be sent to the attorney at the transfer of the file:

·      A Current, from Zero-Balance Ledger of the Owner's Account. 

·      Other Costs not yet on the Ledger.   (If such fees are not listed on the demand letter, the H.O.A. may be unable to collect these fees in accordance with applicable laws.)

·      Copies of Prior Notices Sent to the Owner regarding the delinquency.

·      A copy of the Recorded Assessment Lien.  (If the Association or Management Company has recorded the assessment lien with the county recorder.)

·      Covenant Violations.  (If there is an unresolved covenant violation, the firm should be informed of the status and nature of such covenant violation.)

·      Special Assessment Information.  If the balance includes a special assessment, then documentation and communications regarding such special assessment, including voting records, Board minutes, and the actual amount and manner of payment each Owner was to pay for the special assessment, should be transferred to the attorney.

If you have questions regarding transferring Owners to collections with a law firm, contact us at info@westernlawgroup.com