One of the responsibilities of the Tellico Village Property Owners Association staff and board is to ensure that money owed to the POA for assessments or other charges is collected.
Seemingly simple on the surface, collections are not always as easy as sending reminders of past due amounts or threatening more severe actions.
Combined with the difficulty of dealing with some large investor groups who bought property before the real estate crash of 2008 and failed to meet their obligations on lots that are now worth much less than they paid, collection becomes a very challenging problem.
The POA staff and board recognize that delinquent property owners place a significant financial burden on the organization since the shortfalls in revenue from those that do not pay must be made up by those that do.
To address these issues, TVPOA follows a collections process described as follows:
Letter — 30 days past due
The collection clerk will send a letter to all property owners who are 30 days delinquent on the last business day of each month. The letter will inform the property owner of their delinquent balance and state that if the balance is not paid within 15 days, the account will be placed with a third-party collection agency and interest charges will begin to accrue. The letter shows the current amount past due and the total amount to be paid by the deadline, which includes the next month’s assessment.
TSI — 45 days past due
The collection clerk will begin interest charges of 18 percent per annum as authorized under the Covenants and Restrictions. The POA will forward the accounts to Transworld Systems Inc. TSI will then start their process of mailing up to five letters to the property owners. The letters will be mailed every 10 days for the next 50 days.
Lien — 90 days past due
Once the TSI letter process is complete, the collection clerk will suspend the property owner’s membership privileges. The collection clerk will file a lien with the Chief Financial Officer’s authorization in the appropriate county. A letter is sent with a copy of the registered lien notifying the member of the lien, suspended privileges and a demand made for the past due amount.
Demand Letter — 120 days past due
Thirty days after the lien is filed, the account is turned over to our attorney. He will send the property owner a demand letter. The letter notifies the property owner of the past due balance and informs the member that a lawsuit will be initiated in 30 days if the outstanding balance is not paid.
Oath — 150 days past due
Thirty days after the demand letter is sent, the collection clerk will fill out an oath of account against the property with the Chief Financial Officer’s authorization.
The clerk will send the oaths to the attorney to seek a monetary judgment.
F
oreclosure — 270 days past due
The collection clerk will fill out an oath of account against the property owner with the Chief Financial Officer’s authorization. The clerk will send the oaths to the attorney to seek attachment of property.
Once the process reaches the legal stages, the POA attorneys pursue collections through all legal means that are economically viable. Depending upon the property, the amounts owed, the location of the owners and other factors, we will commit the appropriate level of resources to the collection efforts. Over the past 11 years, 2008-2018, we have recovered more than $4 of revenue for each $1 spent on collections expenses.
