Over the years, technology has dramatically changed the way community and condominium associations bill and receive payments for owner assessments, sometimes referred to as dues.
When I first started in the business in the late 80s, just about every community and condominium association – whether self-managed or managed by a professional management company – utilized coupon books for billing and received physical checks for assessment payments by snail mail.
Today, there are several ways associations can bill assessments, including:
Most self-managed and professionally managed community and condominium associations now have websites with online owner portals that contain current billing information at no cost to the property owners.
The advantage of an online portal is the owner can login to the portal to review the most current account status and any upcoming billing details. The property owner can initiate payments directly through the portal to avoid late fees.
E-statements are emailed almost simultaneously with the creation of a bill at no cost to the association or owners.
E-statements also list amounts due up to the date of the billing creation, as well as all past due information. A property owner can ensure his or her account is paid in full if payment is made for the total amount detailed in the e-statement.
Unfortunately, an e-statement could potentially be blocked or sorted by email filters/settings, which can delay receipt of the bill, or even delete it altogether. This can lead to delinquent payments and potential late fees, which could lead to owner dissatisfaction.
Though coupons/statements provide a hard copy reminder of an upcoming payment owed there is a cost associated and they generally require a minimum two-week lead time to produce and mail so the payee has enough time to submit his or her payment by the due date. Another disadvantage of coupon booklets is the coupon only reflects the amount owed during a specific period, not the actual current account balance.
As with billing, there are also a few payment options for owners:
ACH, or Automated Clearing House, is sometimes referred to as auto-draft. The ACH method of payments uses debit transfer or electronic credits to enable community association members to pay for their assessments directly from their bank accounts.
The advantage of paying with ACH is that there is no cost to the community association member and it is applied accurately to the owner’s account(s) because it is an online payment. Paying by ACH is the most successful payment solution for community associations and their members, as the payment delivery date is 100-percent predictable and the accuracy of the account information allows for the proper payment credit.
The advantage of paying with a credit card is there are no errors with applying the correct credit amount to the community association property owner’s account(s).
The credit card processing company typically charges the property owner a minimum transaction fee or about three percent of the transaction amount, whichever is greater. Credit cards are the most expensive payment method for HOA dues.
Paper checks written from an owner’s checking account and Bank Bill Pay Checks are processed through a bank or third party. If the check has the coupon or statement included in the envelope, the check is processed. Though the property owner is able to control when the check is mailed, is a coupon/statement is not included in the envelope with the check, which occurs in more than half of checks processed through a bill pay system, there is substantial room for error when it comes to crediting the proper account with the proper amount. As a special emphasis, due to the process of creating a Bank Bill Pay Check, there is never a coupon/statement that arrives with this method of payment.
In addition, paying by check carries a high risk of not being processed within the payment deadline due to delays in the mail delivery and timing of processing the mail by the lockbox processor, which can create late fees, interest fees, and an unhappy community association property owner.
The most reliable billing method is to review the account balance information in the owner portal. The second-best method is the e-statement. Both the owner portal and e-statements are free to the property owner.
The best payment method is through ACH, which does not cost the property owner. The second-best method of achieving an on-time payment in the correct amount is through a credit card.
Mike Stonestreet is a 28-year veteran of the professional HOA management industry who has achieved one of the highest education-based designations in the field, that of Professional Community Association Manager (PCAM). Community Association Management Services (CAMS) has been a leading association management company since its inception in 1991. CAMS is a trusted provider of management services for more than 265 associations throughout North Carolina, South Carolina and Georgia. To find out how CAMS can benefit your community, call 910-256-2021, email [email protected], or visit www.CAMSmgt.com.