How should an HOA board handle owner payments after an account goes to the attorney?

By OurHOA · General information · Revised October 28, 2026

What an HOA board does when an owner pays after the account goes to the attorney: who takes the money, payment order in TX, FL and CO, partial checks, settlements.

Part of the HOA board handbook: treasurer and money.

The short answer

The association can usually still take an owner's money after it refers the account to a collections attorney. What changes is the bookkeeping. Once a law firm holds the file, the board, the manager and the firm each keep a copy of the balance, and those three numbers drift apart within a week unless someone owns the process. Set three rules before the next referral. Every payment gets logged the day it arrives. The attorney hears about it that same day. And only the board decides whether to take less than the full balance. The rules vary by state, and your declaration, collection policy and the firm's engagement letter add terms of their own. This is general education, not legal advice.

Settle the payment rules in the referral letter

Put these four answers in writing, in the engagement letter or the letter that sends each account over. 1. Where owners send money. Some firms want every payment routed to their trust account so their payoff figure stays right. Others let owners keep paying the usual lockbox or portal. Either works. Pick one, and make sure the firm's first letter to the owner says it. 2. What happens when money lands in the wrong place. It will, because autopay keeps running. The treasurer or manager emails the firm the amount, date, method and check number the same business day. 3. Who quotes a balance. One party only. If the manager says $1,840 and the firm's letter says $2,315 because it includes fees the manager hasn't posted, the owner will dispute both. 4. Who can agree to a plan or a reduced amount. The board, by vote. The attorney negotiates inside limits the board sets. Texas adds a rule here. Property Code section 209.0064(d) says the agreement between the association and its collection agent may not prohibit the owner from contacting the board or the managing agent about the delinquency. Section 209.0064(a) defines a collection agent by the federal Fair Debt Collection Practices Act definition of a debt collector, which can include a law firm that regularly collects debts. So don't sign a contract or adopt a phone script that tells Texas owners they may only talk to the firm. A director can take the call, listen, and pass the details on.

Apply each payment in the order your statute sets

State law decides which part of the balance a payment pays first, and the three states differ more than most boards expect. Texas. Section 209.0063(a) applies a payment to delinquent assessments, then current assessments, then attorney fees and collection costs tied to assessments or other charges that could support foreclosure, then other attorney fees, then fines, then anything else. Under section 209.0063(b), if the owner is in default under a payment plan when the payment arrives, the association does not have to follow that order, but it still may not put a fine ahead of any other amount owed. Florida. Section 720.3085(3)(b) runs the other way. A payment the association receives and accepts goes first to interest, then to the administrative late fee, then to collection costs and reasonable attorney fees, and only then to the delinquent assessment. Colorado. Section 38-33.3-316.3(4) puts assessments first and fines, fees and other charges after. Section 38-33.3-209.5(5)(a)(VI) also requires your written collection policy to state the method for applying payments, so the policy and the ledger have to match. The order decides whether the owner is still behind on assessments, which is what supports a lien. Take a $1,000 payment on an account showing $900 in assessments, $60 in interest, a $25 late fee and $400 in attorney fees. A Texas association puts $900 on assessments and $100 on the fees, so the assessments are current. A Florida association pays the $60, the $25 and the $400 first, leaving $515 for assessments, so $385 of assessments is still past due. Check which order your accounting software uses. Many default to oldest charge first, which matches none of these statutes exactly.

Partial payments and checks marked paid in full

Owners in collections often send a check for less than the balance with "paid in full" on the memo line, or a letter saying the check settles the account. Florida's statute answers this directly. Section 720.3085(3)(b) says its payment order applies notwithstanding any restrictive endorsement, designation or instruction on the payment, any purported accord and satisfaction, and section 673.3111, the state's accord-and-satisfaction rule for checks. A Florida association can deposit the check and apply it in the statutory order. The text speaks of a payment "received by an association and accepted," so ask the attorney whether your documents allow the association to return a partial payment once a foreclosure case is filed. Texas chapter 209 and the Colorado act contain no override like that. In those states, hold any check marked paid in full, or sent with a settlement letter, until the attorney has seen it. Depositing it first is the mistake that's hard to undo. Plan rights also change after a referral. In Texas, section 209.0062(c) says the association does not have to offer a payment plan once the 45-day cure period in the section 209.0064(b) notice runs out, though the board may still offer one. In Colorado, section 38-33.3-209.5(7)(a) bars a judicial foreclosure until the owner has had a written offer of an 18-month plan with payments of at least $25 and has either let the offer sit for 30 days or missed three installments, and section 209.5(7)(b) lets an owner on that plan pay off the rest at any time. Our guide on how to write and run an HOA payment plan policy covers the plan terms in detail.

Settlements and fee waivers need a board vote

When an owner offers $1,500 on a $2,315 balance, the attorney brings the offer to the board, and the board decides. Waiving interest, late fees or collection costs is common. Forgiving assessments is rare, because every other owner paid theirs. Know what a fee waiver costs. The firm's bill doesn't go away when the board waives the fees charged to the owner. The association pays it from the operating budget. In Texas this is built in. Section 209.0064(c) says an owner is not liable for a collection agent's fees at all if the agent's pay depends on what it recovers, or if the agreement does not require the association to pay all of the agent's fees. Texas boards may discuss a specific delinquent account in executive session under section 209.0051(c), which allows closed sessions for enforcement actions and matters involving the privacy of individual owners. Any decision made there must be summarized in general terms in the minutes. Florida section 720.303(2) opens board meetings except for attorney meetings on proposed or pending litigation and personnel matters, so the vote itself happens in the open. Either way, refer to the account by number, not name. Wording you can adapt: "I move that the association accept $____ from the owner of account ____ in full satisfaction of the balance of $____ as of ____, payable by ____. If the owner does not pay by that date, the full balance stays due. The association's attorney will prepare the written settlement and any lien release."

Payoff letters, releases and closing the file

The firm's payoff letter, with a good-through date, is the only balance anyone should quote. When the owner pays in full, the firm confirms the funds cleared and records or delivers the lien release. Florida section 720.3085(1)(a) says the person making payment is entitled to a satisfaction of the lien on payment in full. Then the manager zeros the ledger and restores normal billing, and the treasurer drops the account from the delinquency report. Owners in collections ask for their ledger, and they should get it fast. Colorado section 38-33.3-209.5(5)(a)(V)(C) requires the delinquency notice to name a contact who will send a copy of the ledger within seven business days of a request. That is a good standard to keep in every state.

A same-day routine for incoming payments

Hand this to the treasurer and manager for every referred account. Day of receipt: log the payment, scan the check or save the portal record, and email the firm the account number, amount, date and method. Hold any check marked paid in full or sent with a letter, if you're in Texas or Colorado. Within two business days: the firm confirms the new balance in writing, and the manager posts the payment in the statutory order. Each month: the treasurer compares the firm's balance report against the association's ledger for every referred account and lists any difference over a few dollars for the next meeting. At payoff: get the release recorded, zero the ledger, and save the payoff letter and release with the account file. For where these steps fit in the whole collection sequence, see our guide on the HOA past-due dues timeline for boards.

Mistakes boards make

Letting a director cut a side deal with a neighbor. "Just pay the dues and we'll forget the fees" binds nobody and confuses the firm. Depositing a full-payment check in Texas or Colorado before the attorney sees it. Posting payments oldest-first in software that doesn't match your state's order, so the ledger and the firm's payoff never agree. Forgetting to tell the firm. An owner who paid and then gets a demand letter has a fair complaint. If the stale balance leads to a foreclosure step the law doesn't allow, Colorado section 38-33.3-316.3(5) lets the owner sue for up to $25,000 plus costs and attorney fees. Waiving attorney fees without budgeting for the bill the association still owes. Leaving a paid account on the delinquency report, which can keep a paid-up owner out of the pool or clubhouse if your rules suspend privileges for delinquency.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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