At some point in their existence, most condominium communities deal with the challenge of collecting late assessment fees. When fees are delinquent, the goal is to attain them as quickly, professionally, and economically as possible. In some cases, condo communities and their provider of condo association management enlist the help of a debt collection agency. Is this a good idea? To find out, let's take a look at some of the biggest pros and cons of the situation.

Pro: Money is Typically Acquired Quickly

Debt collection agencies profit by receiving a percentage of the money value of each account they close. Consequently, they are highly motivated to make people pay, and are willing to use every permissible tactic to make money is received. The tactical nature of professional debt collection typically results in payments being acquired faster than if the community took a softer approach. Debt collectors (a.k.a. revenue agents) can be relentless, and their approach gets results.

Con: Money is Lost to the Agency

Many agencies receive at least 25 percent of the value of each account they close. Therefore, a condominium community never receives close to the total value of past due fees. For neighborhoods that have a well-funded reserve fund and aren't in dire need of money, the financial gain of using an agency can be worth the financial loss it incurs. On the flip side, neighborhoods that don't have much liquidity can find it tough to absorb the loss.

Pro: The Community can Focus on Other Business

Outsourcing the pursuit of late assessment fees allows community board members and the provider of condo association management to focus on other business, and avoid engaging in a process that doesn't fall within their realm of core practices. While a provider of condo association management can implement and oversee the collection process, it doesn't specialize in performing the procedure to the degree that a collection agency does.

Con: Relationships May be Jeopardized

Being the target of debt collection is one of the most stressful situations a person can encounter. In some cases, residents whose accounts with the community are turned over to a revenue agent end up feeling dejected and angry, especially if they don't have the means to pay. These feelings can easily cause them to feel negatively about the board, the neighborhood, and its management company. This a risk that the process inevitably entails.

Conclusion

Is using the services of a revenue agent a viable strategy for resolving the problem of delinquent assessment fees? For many neighborhoods, the question doesn't have a simple answer. For assistance deciding whether using a collection agency should be an option in your community's plan for pursuing late assessment fees, schedule a consultation with a provider of management services for condominium communities in your area today.