How do we write an HOA collection policy for past-due dues?

By OurHOA · General information · Revised November 8, 2026

How an HOA board writes and adopts a collection policy for past-due dues: required clauses in Colorado, Texas and Florida, sample wording and a motion to adopt.

Part of the HOA board handbook: treasurer and money.

What the policy does and who has to have one

A collection policy is the board's written answer to what happens when dues go unpaid: when a payment counts as late, what that costs, which notices go out, when a payment plan is available, and who decides to send the account to a lawyer. Write it once, adopt it by vote, and apply it to every owner, directors included. Whether you must have one depends on the state. - Colorado requires it. Under C.R.S. 38-33.3-209.5(5)(a) and 38-33.3-316.3(1)(a), an association cannot use a collection agency or take legal action on unpaid assessments unless it has adopted, and follows, a written policy covering seven listed items. - Texas requires part of it. Property Code section 209.0062 makes an association with more than 14 lots adopt payment plan guidelines and file them in the county real property records. - Florida does not require one. Chapter 720 has no collection policy section, but section 720.3085 sets the charges, payment order and notices your policy has to match. - California requires a yearly disclosure. Civil Code section 5310 has the board distribute an annual policy statement 30 to 90 days before the fiscal year ends, including the section 5730 notice and a description of its lien practices. Write one even if no statute makes you. Without it, the board decides each case about a specific neighbor, and that is where favoritism complaints start. Rules vary by state and by your governing documents, and they change. This guide is education, not legal advice. Have the association's attorney review your draft before the vote.

Gather these before you draft

A policy cannot give the board a power the documents or the statute withhold. Florida, for one, allows a late fee only if the declaration or bylaws provide for it. So build a one-page fact sheet first: - The declaration's assessment article: due dates, grace period, late charge, interest rate and lien rights. - The bylaws section on how the board adopts policies. - Any earlier collection resolution or recorded payment plan guidelines. - Your attorney's notice templates and fee terms. - Twelve months of ledgers, showing the late fee actually charged. That last item usually turns up the first problem. If the declaration says $25 and the treasurer has charged $15 for years, decide which number applies from the effective date and say so.

Dates, charges and payment order

Colorado's seven required items make a good outline in any state. The first four are the money. Due date and delinquent date. Give both as calendar dates. Late fees and interest. Put the numbers in the policy and cite the declaration article. Take a $225 quarterly installment: - Florida caps the late fee at the greater of $25 or 5 percent, so $25. Interest runs at the declaration's rate, or 18 percent simple if the documents name none. Compound interest is barred. - Colorado caps interest at 8 percent a year (209.5(8)), which is $1.50 a month on that installment, and bars daily late fees (209.5(1.7)(b)). - In Texas, use the amounts your declaration authorizes and have the attorney confirm them. Returned payments. State the dollar charge and confirm your documents allow it. Payment order. This is where a template from another state does the most damage. Texas section 209.0063 applies money to delinquent assessments, then current assessments, then attorney and collection costs, then fines. Colorado section 316.3(4) applies it to assessments before fines, fees and other charges. Florida section 720.3085(3)(b) runs the other way: interest, late fee, collection costs and attorney fees, and the assessment last, whatever the owner writes on the check. Say an owner owes a $225 assessment, a $25 late fee and $12 of interest, and sends $200. In Texas all $200 goes to the assessment, leaving $25 of assessment plus $37 of charges. In Florida $37 goes to the charges and $163 to the assessment, leaving $62 of assessment. The total is the same. The statement looks different, and the owner will ask why.

Notices, plans, referral and remedies

Notices. List each notice, how it goes out and the minimum wait after it. Our guide on the timeline for collecting past-due dues walks through the sequence and the statutes. Colorado also requires a named person who sends the ledger within seven business days and a monthly itemized statement to anyone with a balance (209.5(1.7) and (5)). Payment plans. Say who qualifies and the terms, or attach the guidelines. Texas plans run at least three months, and the association need not go past 18. Colorado requires equal installments over at least 18 months. Our guide on writing a payment plan policy has wording for both. Referral. Name who decides. In Colorado it must be a majority of the board in a recorded vote at a meeting, and a manager cannot do it alone (209.5(1.7)(a)(II)). In Texas, read the collector's contract first. Under 209.0064(c), an owner is not liable for the agent's fees if the association's obligation to pay them depends on what the agent recovers. Remedies. List only what your documents and statute allow, using "may" so the list does not read as a promise. Florida lets an association suspend common area use and voting rights once an owner is more than 90 days delinquent (720.305(3) and (4)). Colorado cannot foreclose on a lien made up only of fines and related costs (209.5(8)(c)). California bars foreclosure on assessments under $1,800, as its section 5730 notice explains.

Wording you can adapt

Fill in the brackets and have counsel adjust this to your state: "Collection Policy of [Association], adopted [date], effective [date]. 1. Due dates. Assessments are due on [date]. An assessment not received by [date] is delinquent. 2. Charges. A delinquent installment is charged a late fee of $[amount], once per installment, and interest at [rate] percent per year from [date], as authorized by [declaration article]. A returned payment is charged $[amount]. 3. Application of payments. Payments are applied in the order required by [statute]: [order]. 4. Notices. Before an account is referred, the association will send the notices required by [statute], waiting no less than the required period after each. 5. Payment plans. An owner may request a plan in writing from [role, email]. Terms are in Attachment A. 6. Referral. After the notice period ends, the board may refer an account to an attorney or collection agency by recorded vote. 7. Remedies. The association may use any remedy the governing documents and [state] law allow, including [lien, lawsuit, suspension of amenity use]. 8. Ledger requests. An owner may request a copy of the account ledger from [name, contact]. 9. Transition. This policy applies to charges that accrue on or after the effective date." Notice the phrase "no less than the required period." It promises a minimum, so a mailing that goes out a week late does not break your own policy. Colorado boards should also spell out in item 4 what the notice of delinquency contains, since 209.5(5)(a)(V) makes that part of the policy.

How to adopt it

A six-week schedule works for most boards. Week 1: the treasurer drafts from the fact sheet. Week 2: the attorney reviews it against current statutes. Week 4: the draft goes out with the notice of an open board meeting. Week 5: the board votes. Week 6: file it where required and send it to owners. A motion: "I move that the board adopt the Collection Policy dated [date], effective [date], replacing all earlier collection resolutions, and direct the secretary to send a copy to every owner and file it in the [county] County real property records." - Texas: section 209.0062(d) requires filing the payment plan guidelines. Section 202.006 says a dedicatory instrument has no effect until filed, and section 202.001 defines that term to include properly adopted rules. Plan to record the whole policy unless your attorney advises otherwise. - Colorado: include it in the annual disclosure under 38-33.3-209.4(2)(i), due within 90 days after the fiscal year ends. - California: add it to the annual policy statement. - Florida: leave the recording clause out of the motion unless your documents call for it.

Keep following it

Colorado's statute says the association must have "adopted and follows" its policy, and the second half is what trips boards up. In any state, an owner's lawyer will compare your file to your policy, step by step. Run a monthly aging review by account number, with the next step and its earliest date for each account. Keep each notice with its proof of mailing in the account file, and record each referral vote in the minutes. Decide exceptions under a written standard and log the reason. Treat directors' accounts the same way, with that director out of the room for the vote. Review the policy every January. Texas, Florida and Colorado have all changed collection statutes in recent sessions.

Mistakes boards make

Copying another community's policy. A Texas template sends Florida payments to the wrong place first, and a Florida template's 18 percent interest is more than double Colorado's 8 percent cap. Promising more than the board will do. "The treasurer will call each delinquent owner within five days" becomes an argument the first time a volunteer is on vacation. Write the minimums you will actually meet. Adopting it and telling no one. Owners who never saw the policy will dispute the first fee it produces. Send it, post it with your other governing documents, and mention it on the dues invoice.

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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