HOA Insights: Common Sense for Common Areas

093 | Strategies for Managing Delinquent Homeowners in Your HOA

• Hosts: Robert Nordlund, Kevin Davis, Julie Adamen • Season 3 • Episode 93

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Delinquent homeowners can sink your HOA’s budget. Learn how to recover dues, enforce policies, and protect your community’s financial health.
✅ Is a Reserve Study right for you? 👉 https://www.reservestudy.com/

Delinquent homeowners in your HOA can cause serious financial strain on your community. Mitch Drimmer from Axela Technologies shares proven strategies to recover unpaid dues, enforce policies, and protect your HOA’s budget—without jumping straight to foreclosure. Learn how to use consistent communication, amenity restrictions, bank notifications, and late fees to encourage payments. Plus, discover why budgeting for doubtful debt is essential to maintaining financial health. Don't let unpaid assessments jeopardize your community—take control today!

Mitch Drimmer’s Company: http://axela-tech.com/

Chapters From Today's Episode:

00:00 Don’t Play Around with Budgets for Your HOA 
01:30 The Rising Costs & Financial Pressure on HOAs
03:15 The Biggest Challenges in Collecting Payments
05:00 Why Foreclosure Should Be the Last Resort
07:20 How to Ensure Accurate Contact Information
09:45 Importance of Early & Frequent Communication
12:30 Late Fees & Interest: Enforcing HOA Payment Rules
15:10 Restricting Amenities for Delinquent Owners
18:00 The Power of Bank Demand Letters
20:48 Ad Break - Community Financials
23:30 Why Boards Must Budget for Delinquencies
27:00 Common Mistakes HOAs Make With Collections
30:15 Raising Assessments: Tough but Necessary
34:00 When Selling is the Best Option for Owners
37:30 Final Thoughts & Best Practices for HOAs

The views & opinions expressed in this program are those of the Hosts & Guests, intended to provide general education about the community association industry. The content is not intended to provide specific advice or recommendations for any individual or organization. Please seek advice from licensed professionals.

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Mitch Drimmer:

If a board member is hesitant about making making assessments to cover these costs, they should step down from the board. I'm very serious about that. This isn't a game of Monopoly where the stakes are low. We're talking about the very real possibility of maintaining the integrity of a valuable a real estate asset where families have invested their life savings and most of their equity. So no, don't. Don't play around with these budgets. Be honest with these budgets. If you can't handle the pressure of making tough decisions like raising assessments, then you might be time to step aside. As I said,

Announcer:

Hoa, Insights is brought to you by five companies that care about board members, association, insights and marketplace Association, reserves, community, financials, Hoa invest and Kevin Davis, Insurance Services, you'll find links to their websites and social media in the show notes.

Robert Nordlund:

Welcome back to Hoa insights, common sense, for common areas. I'm Robert Nordlund. I'm here today for episode number 93 with special guest Mitch drimmer from Excella technologies. If that name sounds familiar to you, it's because we had Mitch on the program last year for episode number 54 now here in 2025 we're thinking that costs continue to put pressure on Association budgets, so we want to bring Mitch back on the program to share his insights about maximizing cash flow with you. We don't want your budget to be crippled by some non paying or slow paying homeowners. We want our podcast audience to have the advantage and be well informed. So today, Mitch will share more of his tips and best practices to make sure collection issues aren't tripping you up. This will set you up for success, paying your bills and making your scheduled reserve transfers. Well, this is a follow up to episode number 92 with regular co host and insurance expert Kevin Davis, where we discussed a year end wrap up of insurance in 2024 what's likely going to stay the same in 2025 and what likely will change, and also what you can do to become a preferred account enjoying minimized insurance premiums. I hope that got your attention. Well, if you missed that episode or any other prior episode, take a moment after today's program to listen from our podcast website, www insights.org, or watch on our YouTube channel, but better yet, subscribe from any of the major podcast platforms so that you don't miss any future episodes. And those of you watching on YouTube can see the HOA insights mug that I have here on my desk. It's a favorite about some board members talking about deterioration in their common areas. And you can get, I got that from our merch store, and you can browse through that store merchandise from our hoe insights.org, website, or the link in the show notes, you'll find we have some great items there, some free stuff, like board member zoom backgrounds, and some specialty items for sale, like the mug. So go to the merch store, download a free zoom background, take a moment, look around, find the mug you'd like and email me at podcast, at reserve study.com with your name, shipping address, mug choice, and mentioning episode 93 mug giveaway. If you do that and you're the 10th person to email me, I'll ship that mug to you free of charge. We enjoy hearing from you responding to the issues you're facing at your association. So if you have a hot topic, a crazy story, or a question you'd like to have us address, you can contact us at 805-203-3130, or email us at podcast, at reserve study.com now one of those questions led us to today's topic, which was question was from Richard in Denver, who asked, What can we do to get access to the cash that delinquent owners aren't paying us So Mitch, friend of mine, friend of the program, and author of the book The Art of collections for community associations, which I have right here on my course. What advice can you give to Richard?

Mitch Drimmer:

Well, first of all, I'd like to thank you for having me on your podcast today, Robert. And I also want to say that Richard's question is a is an important one, especially considering that he's from Colorado. Why is that? Well, as a matter of public policy, state legislators nationwide have been revising statutes every legislative session to make it more challenging for community associations to enforce Association lean foreclosures. They're not happy about it. Colorado is at the forefront of this effort, making it particularly different difficult for associations to foreclose people. In other words, they. Taken,

Robert Nordlund:

maybe their desire to help the little guy a step too far.

Mitch Drimmer:

I don't, I don't think that they helped the little guy a step too far. What I think that they're doing is trying to bring reason and rationale to this. I mean, I am against Association lead foreclosures being the first step, but I'm not against it being the last step. Some states have gone too far. For instance, the state of New Orleans, of New Orleans, the state of Louisiana, and all other states of the country, you don't need to consider the bank's position. But in Louisiana, now part of the credit bid in an association lien, foreclosure, you got to get an appraiser with two thirds of the banks debt, or two thirds of the value of the house is there. So in Colorado, they have all sorts of issues. They have to have a collections policy. You have to offer payment plans. You have to wait a minimum three we a month delinquency, you know, before you could bring in somebody. Again, they're trying to encourage associations to work it out before you put them out. And I agree with that. I like that because, you know, we see all too often horror stories in the newspapers, and, you know, with the news, if it leaves it bleeds, and every week, they got to have an HOA sued somebody for $3 million or put somebody out. So I support these efforts, because taking someone's home for a few $100 or a few $1,000 is not the right solution. But this leads to the question, What can associations in Colorado or anywhere in the United States do to manage these delinquencies under such a plethora or an abundance of constraints? So the thing is, let me give you some practical advice, some things that managers and boards of directors, even of self managed associations, can do before they need to call in an attorney or a collection agency such as myself. And the number one thing that they have to do even before they even consider it when they see that their first delinquency is out there is they've got to get ensure that they have the right contact information. Because as a guy who's been a manager, I could tell you so often, you know, people will tell you, I didn't get a letter, I didn't get an email and and it's true, because when you move in. When people move into HOAs and condos, they they got to give you the current address, the current, you know, the pre primary address, secondary address, email, text message, cell phone. But when they change them, they don't go back into the office, into the community association office, and say, we changed it. So by the way, as they say in cool hand, Luke, you have a failure to communicate. Yep, and that's the problem. So again, there's a lot of so I recommend, when somebody goes delinquent, that your boards of directors or your management company subscribe to what you could find on the internet as Skip tracing, where you could find somebody's address and contact information, find, you know, go to Consumer Reports or whatever, and find the best one and get it and make sure you have the right contact information for your very first courtesy letter, or, as I like to call them, your first party notifications. The second suggestion that could

Robert Nordlund:

it, yes, you Robin, just go to the neighbors and double check that neighbors. You don't know. You know,

Mitch Drimmer:

a lot of people haven't been in their place for months. You know, I'm here in Florida. I have phantom neighbors. I've got neighbors. I hear them once a year from Brazil or something, and you can't go to the Property Appraiser site because you know who owns the property, but it doesn't tell you their names or contact information, their email, their cell phones. So again, you got you got to make sure that you have the right contact information. Even call them up and say, don't call them up as a matter of we've got a delinquency and we want to send you a delinquency letter. Call them up and say, This is the HOA, and we'd like to know if we have the right contact information. We're we're verifying our contract. So if you've got a delinquent owner, before you send them a courtesy letter, have one of your interns or somebody, if you're a management company, if you're working on the board, give them a call with the phone number, see if you got the right number. And if you do, double check it, make sure if you've got the right email, and make sure you got the right address. That's how you start this whole journey, this collection journey, and then you got to reach out to the owners promptly and consistently. Well, you know, one. While associations should adhere to the first party notifications that are in their governing documents. You know, the the courtesy letters and the in Florida, the Nola letters and in California, they the payment plans, and the Colorado the payment plans or or whatever, notice of intent to lean. But before any of that happens, the board of directors. When I say first party notification, the first party is the board of directors. So even though you're managed, it's the management company giving the boards letters, because those letters should be said, signed for, signed by the board.

Robert Nordlund:

So because it's the the board that's and the association that's collecting, not the management Exactly, okay, right? And

Mitch Drimmer:

a lot of management companies put these courtesy levers under their heading. If you're a management company, don't do that. However, there are rules about what we call these. Are called condition precedents. You have to do one thing before you do another, before you do another, before you do another. And in some states they don't exist. Like in Florida, there's very few condition precedents for the management company or the association to adhere to, whereas in Colorado, there's dozens of them. However, in no state is there a rule that says you can send a letter every five days, every 10 days. So what we see happening a lot is boards of directors and their management companies, too will often send a courtesy letter, you know you've missed this payment, and then people won't hear from them for the next month, and then they'll say you missed a payment, and then they won't hear from them from another month. Yeah,

Robert Nordlund:

so they're working on 3060, 90 type basis, exactly.

Mitch Drimmer:

And remember, out of sight is out of mind. People get a letter. They right hand, left hand, garbage can. They don't hear for a month. They don't think they have a problem. I'm recommending to boards of directors and to community managers to send more frequent letters, to send text messages, to send more frequent emails. Now, the pushback on this will be all the boards don't want to spend the money because the management companies have to charge $10, 1525, pay it. Trivia, exactly, pay it, but pay it now, or you're going to pay a lot more later. Yeah, so you work it out with your management company. You say, look, every email you sent, it will will accept a $5 charge, or every letter you send a $10 charge, or something like that. Again, come to some sort of arrangement, but contact them frequently. Persistence is the key third if your governing documents prescribe late fees and late interest, apply them to the ledger, these penalties act as incentives. They're there to to to motivate people to timely payments and failure to access assess them to the ledgers and to the statement of accounts. Will diminish the urgency of this situation.

Robert Nordlund:

Well, doesn't mean so look sloppy if you say,

Mitch Drimmer:

Yeah, of course. But many, many personal, I think all self managed associations will will never put the late interest in. I've seen it. I see it all the time. I get ledges from all over because it's simple interest. It's not compounded. You cannot compound it. You cannot charge interest on interest. You cannot charge interest on late fees and late fines for violations. So it's not that simple to compute. So they leave it out when we received it. Of course, we adhere to the governing documents. And if the governing document says You shall charge interest, shall is shall, shall isn't, maybe could, would or should, so you've got to charge that interest. It's in your governing documents. So why would you take a stick that you have in your governing documents and not use it. So again, I put it, I put that to you that that would be a good solution. Another fourth is where permissible restrict amenities to delinquent owners, restrict voting rights for delinquent owners, while this may require a resolution of the board during a properly noticed meeting. It's an effective strategy, believe me, it works. It's summertime in Florida, and you can't go to the pool. You're going to pay your bills, some things I will tell you not to do, such as turning off somebody's water. In case, you know they get water. Don't do that. But if your bylaws and your state statutes allow you to restrict amenities by all means, use every, every, every possible resource you have,

Robert Nordlund:

I think so often with collections people and with cash flow problems. People think of fine as the consequence. And what you're talking about here is there are so many other consequences that you can be creative about. And if it's not, as you say, restricting them from the pool, and I know there's, I believe there's some associations in some states that may prevent you from doing that to the homeowner, as you say, you get into a dangerous area trying to shut their water off, but you may be able to restrict their guests from going through the gate or something like that, right?

Mitch Drimmer:

Well, let me, let me give a little disclaimer here. We're Robert and I are folks are talking about all 50 states, so check your own bylaws, right? Check your state statutes, and make sure that some of these things that I'm telling you you can do, you can do, but there is one thing, one last thing that you can do, which I know you can do because it's a Fannie Mae and Freddie Mac requirement. It's in some bylaws you could escalate the pressure on a delinquent owner by notifying their mortgage company. It's called a bank demand letter, because when somebody is delinquent in their payments to the association, they've defaulted, then they go in breach of the mortgage agreement, and just like a banks don't like it when you don't pay insurance and when you don't pay taxes, they don't like it when you don't pay assessments, because you have a security interest, they have a security interest. And as a matter of fact, when a bank forecloses on an HOA, they have to name the HOA as as a defendant. So what they can do by virtue of, and if a lot of people say to me all you're piercing the veil of confidentiality, no, you're not. This is when you bought your HOA home or your condo, you signed either a PUD rider, playing unit development rider or a condo rider that says that if you are delinquent, the project is to notify the lending bank when the lending date gets that notification. In certain states, it's very powerful. It's more powerful in what we call super lean states, where the banks will actually cut a check for the super lien amounts and other states where they don't have super liens, maybe the banks will pay, or we see banks pay for a lot of assessments, and but for sure, the banks are going to contact the owner and say, What's going on there. You have to pay your assessments, because if you don't pay your insurance, the banks will force place insurance. If you don't pay your taxes, they'll force place the taxes. They'll pay the taxes, but they'll land it onto your mortgage. Very few management companies do this, very few associations do this. And I think it's a great idea, and it could, it could work well, the overarching principle is that a single courtesy letter rarely resolves delinquencies if internal efforts fair, my recommendation is to partner with a merit based collection agency. Of course, that's what I do, but with significant equity in homes, today's foreclosure should not be the default option. As a matter of fact, I'm even talking about that, because although I'm in collections, and I speak to a lot of managers, lot of people say the lawyers aren't foreclosing like they used to, but it is a long, expensive process where you get your money at the back end. You know, we're trying to not resort to drastic measures. So again, by following these three steps, the associations can protect their financial health while staying compliant with evolving regulations and and that's the answer to that question. Let's have our follow up.

Robert Nordlund:

Well, Mitch, you got me thinking here that I think for so many board members are thinking, what do I need to do? Well, I need to send a collections letter. I need to find them. And you're painting a picture of so many tools that you have in your toolbox, the tool of nagging, you know, reminding them, so they are like, Oh, gee, you're right. I was out of town that week. I need to get on this two week of other options, other pressure you can put on, maybe no use of the pool. You can't vote. You can't run for the board of directors, all those kinds of things if you're financially delinquent, and then poking them where it hurts, reaching out to the bank and in a little kid language, tattling. But yeah,

Mitch Drimmer:

this is dropping a dime on him, dime on him, like when he grown up, because he's in New York, yeah, yeah.

Robert Nordlund:

But because they are, they're not honoring their commitment. And their commitment, well, they bought in, was to pay their fair share, and that's it, I think one thing, yeah, one. Thing that hits my heart is that this is a matter of boards being fair, because it's not fair if you have 100 units, it's not fair that 99 of the units are paying all the bills and one person's getting off scot free. It's only fair that everyone pays their fair share, and you want to have the right pressures and the right consequences, and you're talking about all the different tools that are available to you so that you are being fair to the majority, and if someone's not fulfilling their obligation, you're not being mean. You're just saying, Hey folks, you promised, and we're just going to hold you to your promise, and those kinds of things. Well, that's a heck of a start. Well, let's take a quick break now to hear from one of our generous sponsors, after which we'll be back with more common sense for common areas.

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Robert Nordlund:

Now we're back. We're here with Mitch drimmer of Excella technologies, talking about cash flow and collections. And my brain is already full. But I want to go a little bit farther with Mitch. Let's talk about some other things. On our list of topics that we were possibly talking about among your clients. Is there a normal delinquency amount that the average Association should be dealing with? Well, I

Mitch Drimmer:

could tell you what our analytics are, and we have many 10s of 1000s of delinquent units and hundreds of management companies, and actually 1000s of associations. The national average delinquency currently is 3.5% for HOAs, but 4.3% for condos. Condos always have a more expensive monthly assessment because, you know, there's elevators, there's shared water heating, there's employees, there's a building engineer, there's a lot go, there's garbage chutes. While these percentages, they may not seem significant at first glance, you know, I don't have to tell you about increasing prices due to insurance and reserve requirements. And it's also crucial to remember that associations operate as a $0 business, meaning that every dollar that is, you know, necessary to cover expenses in this context, even a 1% delinquency rate can be highly problematic. It disrupts the financial stability, and it makes addressing the minimizing delinquencies a top priority for any community. So again, you may have your averages, but it's irrelevant. One One delinquency is not acceptable,

Robert Nordlund:

yeah, well, I hear that because everyone signed in for it. So that's right, the average association with three or 4% the people that are on your your bad list, the delinquency list, you want to make sure that you have the appropriate processes in place so they are gradually clearing, right? So as they clear, another one will pop up, and then you clear them. It's just part of life at a community association, isn't

Mitch Drimmer:

it? It's like Sisyphus. You roll that boulder up the mountain, and then it rolls back down, so you gotta keep at it. But it's better than rolling five boulders up the mountain than one. Okay, it's better to roll one than have five, so if you let it rot, and if you don't, if you ignore these delinquencies. Now you don't have boulders you when you roll it up to the top of the mountain. Now you got an avalanche coming back at you. So it's, it's, it's, it's got to be addressed immediately.

Robert Nordlund:

Yeah, and I like the strategy of keeping your problems small, because when you keep your problems small and nothing, you just don't have big obligations sitting around. Well, let's talk about, let's say you have, let's make it unit owner number 13, where you've they're three months late, they're six months late, they're a year late. They're two years late. Do you ever get to a point where you just throw your hands up? Or when did, yeah, talk to me about a real problem account. When

Mitch Drimmer:

I do demos for people, i i I show them what we do, and I can tell you in these days that there is equity. I've been doing this in 2008 I could never say this. Okay, we seldom do. Association lead foreclosures, but there are, you know, still delinquencies. And one of the questions you were asking is, you know, should the board's budget for 100% of the people paying? I think that's what you were alluding to. And the answer is absolutely not. The budget should include a line item for doubtful debt. They don't based on historical, you know, historical patterns, if you have a 4% delinquency rate, then you should budget for 104% and you know, it's it may seem counterintuitive that budgeting for higher assessments may lead, will, will lead to delinquencies. But if you don't budget for the higher assessment, you know, you everybody's expecting that assessment to go up at the beginning of the year. So your models will go up at the beginning of the year, because if you lie to yourself, if you con yourself, if you grift yourself, you're not telling the truth on your budget, and you're not budgeting for doubtful debt, you're going to get hit with the special assessment in April, in June or July or something, right,

Robert Nordlund:

people, because

Mitch Drimmer:

it catches up with you. It catches up with it. Yeah. So again, put up with it. Don't put up with it. Plan for it. Okay, so and again. You know that's that's very important, yeah, okay, every business plans, every business plans for a cash shortfall. I know mine does, yeah. Well, every business I've ever been in,

Robert Nordlund:

that's what I was thinking. If you have a average retail store, there is a small amount of theft that goes on, and they call that shrinkage, shrinkage. And if shrink, if you're ignoring the reality of that, you're foolish. And we don't want our audience to be foolish. So

Mitch Drimmer:

how we built you're trying to make everybody smarter. Robert, yeah,

Robert Nordlund:

that's That's it. We want this to be a good use of their time, so budget for your historical averages, but be collecting on that. And so you're gradually filling in with the delinquencies that you're collecting with the new ones that are going out. So you're never really digging a deeper hole. What are the most common mistakes that you see boards making?

Mitch Drimmer:

Well, the number one most common mistake that a board makes is that they feel that they're being benevolent and that they're not giving people a chance to or they're trying to be kind to people. They're, you know, they're, they have, they have bought in board members into a very serious position, even a small condominium of 60 units could be worth, could be a $3 million $30 million project. Oh, yeah, it's half a million $30 million project. So again, there's an old expression. He who is merciful to the cruel is cruel to the Merciful. So these people who feel that they are are are now the arbiters of benevolence and altruism and kindness. They're not doing they're not doing the association any good, and they're doing a disservice to the delinquent owner, because the delinquent owner is going to continue to make bad decisions, and these bad decisions sometimes are not reversible.

Robert Nordlund:

Yeah, I think that's the danger. Is focusing on the minor and serving the minority instead of the majority, the 97% that are doing their level best. They're paying their homeowner assessments. And again, it's the board's responsibility to run the association, and I often maybe time to crack the whip.

Mitch Drimmer:

I often tell boards, you have a fiduciary duty to the association, not to your next door neighbor. Yeah,

Robert Nordlund:

yeah, they're serving the corporation that is represented by people directors, yeah, yeah. Leave your ego

Mitch Drimmer:

and your personal prejudices outside the dorm when you convene a board meeting. Yeah,

Robert Nordlund:

I grew up hearing no ticky no laundry. That's it. It's pretty that could be the title of this.

Mitch Drimmer:

Yeah, it's not that complicated. No, it is not.

Robert Nordlund:

Yeah, you got to add it up to play in the game. Let's talk. You talked about raising assessments, and I know there's many in our audience that are sensitive to that, thinking that they don't want to raise assessments more than some magic number that's in their heart or in their brain, because if they do so, it'll push people into delinquency. Is that, from your experience, a legitimate concern? Well,

Mitch Drimmer:

no, not at all. Because when it comes to raising assessments, this is not a discretionary manner. This is not well, you know, maybe this will cost $10 or maybe this will cost $5 you know what your costs are, or you're making your best guess at what your costs are. And if you're being honest, you're going to shoot for a real. Stick number. You're not I've saw, I've been to so many meetings where they say $20,000 for minor repairs or maintenance or, you know, and then people say, You know what? That'll increase the assessments by too much. Make it $5,000 this is there's no discretion here. You have to assess the owners based on the actual cost of maintaining the property. If a board member is hesitant about making making assessments to cover these costs, they should step down from the board. I'm very serious about that. This isn't a game of Monopoly where the stakes are low. We're talking about the very real possibility of maintaining the integrity of a valuable a real estate asset where families have invested their life savings and most of their equity. So no, don't. Don't play around with these budgets. Be honest with these budgets. If you can't handle the pressure of making tough decisions like raising assessments, then you might be time to step aside, as I said, raising assessment will most likely trigger some delinquencies, and that's a reality we can't ignore. But there's no excuse for allowing the property to fall into disrepair, or worse, living to become a financial burden that affects everybody in the community. We have a responsibility, or board members have a responsibility to ensure the long term health of the property, and sometimes tough decisions are the only way forward. And let me say one more thing. Being two miles away from Surfside, we're not just talking about the landscaping and how nice the lobby is and that we're paying our people right. We're talking about a whole structure falling down and killing 100 people. It's life safety issues here. So when you're on a board of directors, this is not a social club, folks. Yeah, this is a serious business matter, and we try to make it serious by enforcing Robert's Rules of orders and having the meetings very formalized. So take that seriousness and act accordingly.

Robert Nordlund:

Yeah. Well, I'm thinking about gravity here. Gravity is something you can't avoid. And just like you said that if you allow the little delinquencies to grow and grow and grow and grow, they just become a bigger and bigger problem. And so I feel like on the you need to think the same way on the income side, that if you are not increasing the assessments as much as they need to be, you're gradually building your own deficit, and you're gradually running yourself into special assessment land. And that's no fun either. And so if you're if you keep, if you just do the thought experiment of what happens when that happens, if you're under raising, or if you're not raising the assessments as much as they need to be, you're creating your own problem, and that's a bigger problem than if you just raise the assessments from $10 a month to $25 a month, or $50 a month,$75 a month, moving up that much. And from my point of view, I had that same feeling that, yes, raising the assessments from 350 a month to 385 that's a$35 a month jump, clearly, and that's money that the homeowner doesn't have in their pocket. But number one, it's a bill that the association has to pay. And$35 a month is $1 a day. Are you going to lose your home for $1 a day? You're going to find somewhere else? $365

Mitch Drimmer:

is $1 a day. But again, this is not discretionary. This is not something that you could decide yes or no. It's very binary. Is it, will you cover the expenses or will you'll not cover the expenses. That's the decision you have to make. Yeah,

Robert Nordlund:

we're talking about making just a solid mathematical business judgment decision here about what does it cost to run here? Well, gotta

Mitch Drimmer:

be it's gotta be heartless. Yeah,

Robert Nordlund:

I personally don't like to be heartless, but I do know how to run a business, and board members are running a business. But let me do one more thing. If we roll this, what happens when that happens for one more step, and you do have to get to a hard point where you are collecting and you're forcing someone out of their home? From my point of view, I don't see that as a bad thing, because there are some things in life that I can't afford, and I imagine there's some things in your life that you can't afford, right? If you're I want to say kindly, letting them know that the homeowner assessments are going up a little and a little and a little and a little each year. Then gradually they'll say, I need to move somewhere else rather than get hit with a$50,000 special assessment or worse.

Mitch Drimmer:

I mean, you talk about affordability. I mean, I'm looking out my window right now and right there. I'd love to live in the Porsche building, right, even though it's sinking into the ground here in the sunny High Schools of Florida, but I can't afford it, right? And the same with principal. Implies assessments. If they become so high that you can no longer afford to pay them, the best option is to sell and cash out while there's still equity in your property. And that's another piece of advice, not for managers, not for board members, but for owners who are feeling to squeeze, keep a finger on the pulse of how much equity is in your apartment. I'm sitting in my apartment, I know to to at least $20,000 differential what my equity is in this apartment. And again, in many people's lives, there comes a time to downsize, when the kids grow up and leave the community. Association is not to fit its budget into everybody's personal finances, the association has a responsibility to maintain property and ensure the long term viability of the community. It's that simple, and that often means making those difficult decisions about assessments. It becomes too much to manage financially. It's time to consider other options, including selling. And that's just part of home ownership. That's part of life, you know?

Robert Nordlund:

And again, then you get someone new in the association who is comfortable with $500 a month and is not aching for the old days when it was only $113 a month. And I you have a better owner in there, supporting the association, supporting the board. Well, right? And

Mitch Drimmer:

thank you, and thank you telling all the people out there, it doesn't get better. I've never seen an association with prices go back down, because we don't live in magical buildings. They don't get younger, they only get older. Yeah, as a reserve guy would know, as the reserve guy knows better than anybody else speaking

Robert Nordlund:

my language here. Well, yes, as always, it's great talking with you. Any closing thoughts to add at this time? First

Mitch Drimmer:

of all, I just wanted to say that it's a pleasure to be on on your on your on your call, on your podcast. And I got to tell people again, don't go straight to foreclosure. It's not necessary. I you can resolve 95 to 98% of your delinquencies through through conversation. You could, you could. You could resolve a tremendous amount of delinquencies that you send to attorneys and to collection agencies before you send them to collection agencies and attorneys. By doing more frequent, as I mentioned earlier, more frequent outreach, amenity restrictions, all the things that I gave in the beginning, let's, let's, let's do some action plans on that boards of directors, guys and managers, and let's make this right, because there's nothing better than a well functioning condo or community HOA Association, because when everybody chips in, everybody lives a little better. Yeah,

Robert Nordlund:

that's a good thing. Well, anyone listening, if you'd like to get in touch with Mitch, you can email him at Mitch, at Excella tech.com, that's a X, E, L, A, tech, T, E, C, h.com, and again, I've got your book here, the art of collections for community associations. You want to leave people with some ideas about where they can get

Mitch Drimmer:

that Well, the thing is, if you want reach out to me, I'll send you a digital link to the book. The fact is, as I mentioned also earlier, public policy is requiring state legislators to change the laws. Every year I'm talking with people in Washington, they want to do Washington State and stuff like that. So I get out my book is out of print, and I've given most of them away. You still could use it. It's still very valuable. But I'm coming out with the second edition, which will be released at the CAI show in in May or June of this year. And it'll have and I'm doing that for May and June because I'm contemplating that there will be more legislative restrictions coming on to online by that time of the year. So I'm rewriting the book with what I know with the 2024 changes, but I'm also saving space. I'm leaving bookmarks for the 2025 there's going to be a lot of legislative action because of what's going on nationally?

Robert Nordlund:

Yeah, this may be something that you have to update annually, which means my hard copy here may be a dinosaur pretty soon, because everything is updated as a PDF to stay current. It's alright,

Mitch Drimmer:

no, I'll update it and print them, and I give them out at the CAI show, and hopefully they and the CACM shows, I give them out too, you know, right? So I don't want to leave. I don't want anybody in California not to think I don't love them. I love you all. And, and I was praying for your last well, I'm still praying for you. Your problems are not over there.

Robert Nordlund:

Thank you so much. Well, like you said, you. We function better when we function in a community. I'm glad that we have this community of board members across the country. Glad that we have a community of people that suffer with a hurricane here or ice storms there or wildfires out where we are. And it's great to be here as part of this, this bigger team? Well, we hope that you learned some HOA insights from our discussion today that helps you bring common sense to your common areas. We look forward to having you join us for another great episode next week.

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Robert Nordlund, PE, RS

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Julie Adamen

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Kevin Davis, CIRMS

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