Sunday, April 7, 2013

Should boards reveal the names of delinquent owners?


A blog reader recently asked me what I thought about boards mentioning the names of delinquent owners at meetings when the question "who isn't paying their assessments?" is raised.
I advised that some boards handle this situation much more sensitively than others, preferring not to humiliate or punish anyone but merely conveying the specific information requested. For instance, a response to "how many delinquencies do we have?" can very easily be "we currently have 7 homes not paying and these files have been sent to legal." That question does not require the disclosure of specific names or property addresses.



What if, however, the questioner did ask the board to name names? Should they?


Publishing a "dunning" list of delinquent owners is never advisable as the information can be/become inaccurate while the list is still posted. Doing so could expose a board to potential defamation claims.  However, responding to a question at a meeting from a member who has the right to know the specifics of his or her association's financial health is a different matter entirely.



This reader was incensed over the practice as she was delinquent in her assessments as a result of having financial difficulties that were exacerbated, in her opinion, by job market issues. The reader asked if the law could be changed to prevent boards from advising community members of the names of the delinquent members. She suggested instead that the boards "discuss the names privately and just give a lump sum at the general board of directors meeting."
Naturally, this owner can contact her local State Representative and/or State Senator and request that he or she give some thought to changing the law next year. Her public policy makers might be receptive to her request and we could see a proposal next Session which prohibits boards from disclosing the names of the people who owe the association money to the general membership. That is how new association laws are made each year.
What do you think? Should boards alone have access to the names of the association members who are not paying their dues or should that information be disseminated to the members requesting same? Does naming names encourage folks to pay their assessments timely or is it simply designed to embarrass people or does it accomplish both?

5 comments:

  1. Donna,

    There is no need to publicly shame other owners, that is the lowest form of "leadership" that can be used.

    And, of course, owners in Florida can simply review their community financial reports to determine for themselves who the delinquent parties are.

    I see this as illuminating the extreme difference between a Highly Functioning Board and a Highly Dysfunctional Board.

    Ken

    ReplyDelete
  2. Donna:

    I can see why boards are tempted to "air the dirt laundry" but I agree there is the potential for greater loss than good to be derived.

    Several years ago we published total delinquencies and percentage of total outstanding assessments by street/cul-de-sac. Our owners were stunned to learn that, in one case, 51% of the $50,000 outstanding could be attributed to the neighbors on their street.

    We protected the ID of specific owners who were behind in the payment of their assessments, while sharing with everyone the challenges of 'paying the bills' when everyone isn't contributing their share. Subsequently, We've collected a good portion of our outstanding assessments and have a more knowledgable owner base.

    We'll do it again.

    ReplyDelete
  3. As the president of our condo association, I consider it my responsibility to make sure that everyone is paying their dues and I know of no better way than getting late payers paid up than to turn their files over to our attorney ASAP.

    ReplyDelete
  4. My board has dealt with this issue several times. We have always decided to not name names but rather give the number of delinquent units and let our owners know they are in the hands of our attorney. This gets the message out without embarassing an owner that might be at the meeting.

    ReplyDelete
  5. Our board does not give out the name(s) of delinquent owners - we only state that x number are 30,60 days behind and what course of action we are taking. We follow that up at each meeting.

    The problem becomes when a unit owner requests a copy of the A/R each month - obviously the name(s) of any delinquent owners will appear. No telling who they tell after that. I have not thought of a way to eliminate the names while fullfilling our requirement to allow unit owners to review association documents. Suggestions?

    ReplyDelete