BALLYMEADE

Annual Assessment Follow-Up Process

Attorney and Courts Get Involved, A Lien Is Placed On The Home

Annual Assessment Follow-Up Process  

The following is done to show due diligence on the Board of Directors'
part on behalf of the whole community to collect the annual assessments from all homeowners.

Summary Timeline
1. Initial assessment invoice is mailed March 1st. with reminder on April 1^st that a penalty of $25 will be due after May 1^st.

2. Second notice (reminder) is mailed 60 days later, May 1st ($25 penalty will be due also after May 1st)
3. Third notice (certified letter) is sent 30 days later, June 1st.
4. Attorney’s “Demand Letter” is sent 45 days later, July 15th.
5. Attorney files a “complaint” 45 days later with the court, September 1st.
6. The county issues a “judgment” (ruling) that the debt is valid and once we have a judgment we are free to place a lien against the property (takes 4-5 months to receive complaint approval back from the court so that the lien can be placed on the property).
7. Our attorney places a lien on the property; credit reporting companies are notified, resulting in a bad credit rating for the home owner. Quarterly follow ups are made to the homeowner.

Detailed Timeline:

PENCO:
1. Assessment invoices are mailed on or about March 1st each year. with reminder on April 1^st that a penalty of $25 will be due after May 1^st.

The invoices are prepared and mailed by PENCO right after the budget and annual assessment is approved at the annual community meeting held at the end of February.

2. Second notices are mailed on or about May 1st each year.
Second notice is mailed at 60 days because the assessment is due 30 days after the mailing but is not considered late until 30 days after it is due (60 days after mailing).  At this point, the $25 penalty will be due.

3. Certified letters are mailed on or about June 1st each year.
The certified letter, sent by PENCO 30 days after the second notice, is the third notice sent to delinquent homeowners in an attempt to collect payment of the annual assessment. It notifies the homeowner that if the assessment is not paid within 30 days they will be referred to the attorney for collection.

Attorney:
4. “Demand letters” are sent by our attorney via certified mail on or about July 15th each year. If unpaid after 45 days, the attorney letter is sent as the first step in taking legal action to collect the assessment. The homeowner is told of the consequences of not paying and about the fees that will be charged (attorney and court costs). The cost to Ballymeade for the demand letter is $50.00 and is added to the balance the delinquent homeowner now owes on top of the annual assessment fee.

5. Complaint is filed by the attorney September 1st.
Forty-five days after the demand letter is mail the attorney will file a complaint with county court against any remaining delinquent homeowners asking for a lien on the property. This will cause the delinquent homeowner to incur an additional $285.00 in attorney fees and court costs.

6. A “judgment” is awarded by New Castle County Courts.
A judgment is the court’s decision that the debt is valid. A default judgment is given when the complaint is not contested, or if contested, a trial date is set by the court for the homeowner to appear and contest the debt. The judgment can take as long as four to five months to get through the court system. (To date only one property has had a judgment placed - January 2008).

7. A lien is placed on the property at this point by our attorney if the debt has still not been satisfied. Once the judgment is received, if the homeowner is still delinquent, the attorney can place a lien on the property. The lien is filed in the county courts by our attorney. This lien (debt) must be satisfied before the title on the house can be transferred in a sale. At this time all the major credit reporting companies are notified which puts the homeowner’s credit position in jeopardy. A bad credit rating will result in high interest rates on loans and credit cards. Hopefully the homeowner will pay the assessment and all fees, but if not, when the home sells, the association will recover the annual assessment and all collection costs at the closing as priority lien holder.  The cost to place the lien is $105.00 which is also added to the balance of delinquent homeowner on top of the assessment, attorney fees and court fees.

Note: The total costs incurred in steps 4 through 7 is $440.00. Ballymeade must pay this to our attorney and the homeowner is liable to pay this amount, plus the annual assessment of $234.00, for a total of $674.00.

8. The Board of Directors will ask that the attorney send the homeowner a letter each quarter requesting that the assessment and fees be paid to remove the lien on the house. We do not want to wait 10 or 20 years when the house is sold to get the community’s money back. Plus, shortly after the date the lien is placed the NEXT annual assessment will become due! Will the delinquent homeowner refuse to pay that assessment also? If so, the whole process stated above will be followed again.