By now, we all know that prior to an association turning a delinquent account over for collections, certain procedures under CCIOA must be followed. One of those procedures is sending of a notice of delinquency to a delinquent owner that includes the following information: (1) the amount due with an accounting of how the total was determined, (2) a statement as to whether the opportunity to enter into a payment plan exists and instructions for contacting the community association manager and/or board member to enter into such a payment plan, (3) the name and contact information for the individual the unit owner may contact to request a copy of the unit owner’s ledger in order to verify the amount of the delinquency and (4) a statement that action is required to cure the delinquency and that failure to do so within thirty days may result in the unit 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 unit owner’s property or other remedies available under Colorado law.
While CCIOA only requires one notice of delinquency be sent to a delinquent owner before the account is turned over for collections, it does not prohibit an association from sending a delinquent owner more than one notice. Some associations may prefer to send multiple notices to an owner in hopes that the owner will either pay the account in full or enter into a payment plan with the association without having to incur additional legal fees and costs.
When an account becomes delinquent, an association should look to its collection policy to determine how many notices should be sent to an owner and the timeframes for those notices. The policy may also have a “waiver” provision that allows the association the option and right to modify the procedures contained in the policy as the association may determine appropriate under the circumstances, so long as it is not contrary to law.
If the collection policy does provide for multiple notices, the association may want to consider sending the required CCIOA notice first in the event the association makes the decision that it is appropriate to turn the file over for collections without sending out any additional notices. Sending the CCIOA notice first will also trigger the 30 days the association is required to wait to record a lien against the property.
If the association has any questions regarding its obligations under its collection policy or CCIOA, it should consult its attorney.