Man, those dreaded Association payments I make every month, quarter, or year!  What are they doing with my money?  The grass in front looks horrible and my neighbor stores all this crap out on his front porch and I know he isn’t getting letters!  What if I just withheld my payment?  What are they going to do about it?!?

Not for Profit Corporation

If I had a nickel for every time I’ve heard those complaints!  It’s important to realize that your Association is a not-for-profit corporation.  This is not the same as a non-profit!  A not for profit corporation is one that does not have any profit margins–your association counts on every penny to be received in a timely manner in order to pay their bills.  There is no wiggle room to waive your assessments, even if they wanted to.

What do my assessments go to?

You may have a bad patch of grass in the common area but your assessments pay for so much else.  Not only are your amenities included such as pool maintenance but it also puts asides reserves for the major repairs and replacements of those items.  Landscaping is constant in Florida and is a big part of most Associations.  Management companies perform a valuable service and that’s not for free!  One thing people don’t often think about is the cost of insurance.  Whether you’re a part of an HOA or a condo, the Association must insure with both property and liability for all of the common elements.  In addition, there is something called Directors & Officers insurance that without, there would be no one willing to serve on the Board as a volunteer.  Sometimes, there is also flood insurance that must be obtained.  There is usually little wiggle room for items such as landscaping replacement especially when the membership demands that the assessments stay as low as possible after all!

I hate what they’re doing and no one listens!  I’m just not going to pay!

I’ve strongly advise any owner I speak with not to take this course of action.  I’ve likened it to not agreeing with your mayor so you don’t pay your taxes.  You’re going to lose!  Even if you put it in an escrow account, it’s not going to bode well for you.  The state of Florida feels very strongly about assessments.  In fact, it’s priority falls only behind your taxes and your first mortgage.  Notice I didn’t say mortgages?  That’s right.  The Association goes above second mortgage and equity lines of credit, utility liens or any other encumbrances you have on your property.  What does this mean?  The Association can, and will, foreclose on your home if you do not pay your assessments.  I know you might live in an HOA and don’t see why.  Well, even an HOA takes over many duties a municipality would typically handle.  Think of the front entryway to your community as a good example.  There are much less expensive means to getting your way than refusing to pay your assessments.

What’s the big deal if your assessments are only $75 per year?  I’m so glad you asked! The State also doesn’t have a minimum amount to begin foreclosure.  Imagine if many or all of the owners within your community had the same mindset.  The Association would be unable to pay the bills and be placed in receivership.  When this occurs, the Court appoints a receiver, who is paid nicely for their services, to handle the affairs of the Association as they deem fit, regardless of the cost to the membership.

It’s the neighborly thing to do

I know it burns when you have to pay that assessment and things aren’t just the way you’d like them in your Association.  But is it really worth losing your house over?  To be frank, paying your assessments should come over your cable bill.  It should come before many of your bills.  Just because the Board is made up of your neighbors, it doesn’t mean they will not do what is necessary to maintain services for you and your neighbors.  Part of their job is to make sure your neighbors are not footing the bill for the services you are enjoying whether it’s the pool or the increase in property value from your beautiful entryway free-of-charge.

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