One of the most common situations occurring after a collection account has been turned over to the attorney’s office is the pertinent owner contacting the management company or a board member immediately after receiving the initial demand letter from the attorney. Of course, the association does not want to turn the owner away, but the association is also aware the account is now with the attorney and should be handled by the attorney’s office.

Another frequent occurrence is an owner sending payment directly to the association or its management company after receiving the attorney’s initial demand letter. Unfortunately, the payment is nearly always for an amount that does not pay off the balance due on the account, since the owner is often using a balance from a notice the owner received months ago, or the owner calculates a balance based upon what the owner believes is owed or that he/she should be required to pay.

As you may well imagine, neither of the above scenarios typically end well for any of the parties involved in the association proceeds to communicate with or accept payment from the owner.

If an owner is provided a payoff balance by the association, it may not include the most recent legal fees and costs incurred, which would render the balance inaccurate and too low. Should this occur, the association could end up not being able to recoup such legal fees/costs from the owner.

Other issues that may arise when an association accepts payment from an owner who is in collections with the attorney. First, the owner may believe the association has accepted a “settlement offer” and no further payments are due. That owner then demands the attorney accept payment as full and final settlement of all amounts owing and close its file.

Similar troubles arise when a lawsuit has been filed with the Court since there are deadlines and processes mandated by the Rules of Civil Procedure, and the association is at risk of the matter being delayed or incurring additional and unnecessary legal costs and fees over this issue.

To avoid these unnecessary complications, ensure you take the following steps when an owner contacts you about his/her account that is already with the attorney:

  1. Direct the owner to go through legal with all communication, including payments and/or potential requests for settlement. If the owner is inclined to make a settlement offer, legal will obtain the offer and forward it to the association for review;
  2. Do NOT give the owner a balance due – please direct the owner to legal to obtain the balance (or, in the event of an emergency, please get in touch with legal first to ensure all fees or costs are on the ledger);
  3.  Keep legal apprised of any information you’ve received from the owner, including requests from
    the owner to attend board meetings.
  4.  Review the status report application for updates to know what activity is happening in a
    particular matter. If you don’t believe the report reflects a current update, give the attorney a
  5.  If in doubt, contact the attorney!

Please do not hesitate to contact an Altitude attorney at 303.432.9999 or at [email protected] if you
have additional questions about communications with owners who are in collections.

Social Media Auto Publish Powered By :