How do we write and run an HOA payment plan policy?

By OurHOA · General information · Revised October 27, 2026

How an HOA board writes a payment plan policy for past-due dues: Texas 209.0062 and Colorado 18-month rules, Florida options, sample wording and default handling.

Part of the HOA board handbook: treasurer and money.

What the policy has to do

A payment plan policy answers four questions before any owner asks them: who can get a plan, how long it can run, what it costs, and what happens if the owner stops paying. Write those answers down, adopt them by board vote, and apply them to every account the same way. In Texas and Colorado this is not optional. Texas Property Code section 209.0062 requires an association with more than 14 lots to adopt guidelines for an alternative payment schedule. Colorado section 38-33.3-316.3 requires a good-faith effort to set up a plan of at least 18 months, and section 38-33.3-209.5(5)(a)(IV) says the collection policy itself must describe when an owner can get one and the minimum terms. Florida chapter 720 does not require a plan, so a Florida board offers one by choice and should still put the rules in writing. Rules vary by state and by your declaration, and the statutes below change. This guide is general education, not legal advice. Have the association's attorney review the policy before the board adopts it.

Texas: build the guidelines around section 209.0062

The Texas statute sets the frame, and your guidelines fill in the details. - Minimum term. A plan offered by the association must run at least three months. - Maximum term. The association does not have to allow a plan that runs more than 18 months from the owner's request. - No new penalties. While the owner is on the plan, the account cannot accrue additional monetary penalties. Reasonable costs of administering the plan and interest are not penalties, so the statute allows both if your documents do. - Who can be refused. The association does not have to offer a plan to an owner who defaulted on a plan in the prior two years, to an owner who already had a plan in the past 12 months, or after the cure period in the section 209.0064 notice ends. That certified-mail notice gives at least 45 days to cure and must describe the payment plan option. - Recording. File the guidelines in the real property records of each county where the subdivision sits. If you never filed them, owners can still get a plan under the statute. File anyway, so the rules are on record and the board can show it followed the law. Section 209.0063 also matters once the plan starts. Payments go first to delinquent assessments, then current assessments, then attorney and collection costs, then fines. If the owner is in default on the plan, the association can apply payments in a different order, but fines still cannot go first.

Colorado: the 18-month offer and the $25 floor

Colorado's rules are stricter, and they control whether you can ever foreclose. Under section 38-33.3-316.3(2), the plan must let the owner pay off the deficiency in equal installments over at least 18 months. Section 38-33.3-209.5(7)(a) adds detail. Before the association can start a judicial foreclosure, it must give the owner a written offer of a plan with 18 monthly installments. The owner chooses the monthly amount, as long as each payment is at least $25 until less than $25 is left. The owner has 30 days to accept. The owner can pay the rest off early at any time. An owner who fails to pay three or more installments within 15 days of their due dates, or falls behind on regular assessments during the 18 months, is out of compliance with the plan. While an owner stays in compliance, section 316.3(3.5) bars the association from foreclosing its lien. Two limits help the board. The association does not have to negotiate a second plan with an owner who already had one under this section. And the plan requirement does not apply to a non-occupant owner who bought the unit through a mortgage default or the association's own lien foreclosure. Section 209.5(8) also caps interest at 8 percent a year and bars charging the owner for a statement of what they owe. Section 316.3(4) applies every payment to assessments before fines and fees.

Florida and states without a plan statute

A Florida board can offer plans, refuse them, or offer them only in some cases, as long as the declaration does not say otherwise and the board treats owners alike. If you offer them, the policy should say so, because an owner who was refused will ask why a neighbor got one. Know how Florida applies the money. Section 720.3085(3)(b) says an accepted payment goes first to interest, then the administrative late fee, then collection costs and attorney fees, and last to the delinquent assessment. That order applies even if the owner writes "dues only" on the check. An owner paying $150 a month may see the assessment balance barely move for the first few months, so show the split on every statement and explain it in the agreement. The same section caps the late fee at the greater of $25 or 5 percent of each late installment, if the declaration or bylaws allow a fee at all, and sets interest at 18 percent simple when the documents name no rate. Decide in the policy whether late fees keep running on installments paid on time under the plan. Most boards stop them, since charging a late fee on a payment made exactly when the board agreed it was due starts arguments the board will lose.

Decisions to make before you adopt it

Settle these in the policy, not account by account. - Who approves. Let the treasurer or manager sign plans that fit the policy, and send anything outside it to the board. Owners get an answer in days instead of waiting for the next meeting. - Down payment. Neither the Texas nor the Colorado statute mentions one. A large first payment sits badly with Colorado's equal-installment rule, so ask counsel before adding one there. Where the law is silent, a modest first payment shows the owner is ready to start. - Current dues. Every plan should require new assessments to be paid on time on top of the installment. Colorado already treats falling behind on them as a failure to comply with the plan. - Fees. If you charge to set up or run a plan, keep it small and tied to real cost, and confirm your documents and state law allow it. - Collections. Say whether attorney or agency work pauses while the owner is current on the plan. In Colorado, foreclosure cannot proceed while the owner complies. - Privacy. Keep hardship details to what the decision needs, and discuss individual accounts by account number.

Wording you can adapt

A policy paragraph, for counsel to adjust to your state: "An owner with a delinquent balance may request a payment plan in writing. The treasurer may approve a plan of 3 to 18 monthly installments that requires all new assessments to be paid when due. While the owner makes each installment on time, no late fees will be charged on the plan balance. Interest may continue at the rate in the declaration. An owner who misses an installment by more than 15 days is in default, and the account returns to the collection steps in this policy. The association is not required to offer a plan to an owner who defaulted on a prior plan within the last two years or who had a plan in the last 12 months." A motion: "I move that the board adopt the payment plan policy dated [date] as part of the collection policy, and direct the secretary to record it in the [county] real property records and send a copy to all owners." In Colorado, change the paragraph to match the statute: an 18-month written offer, the owner's choice of monthly amount of at least $25, 30 days to accept, and default only after three installments are missed by more than 15 days. The agreement itself should state the starting balance with an itemized ledger attached, each due date and amount, the payment method, how payments will be applied, what counts as default, and that the owner may pay off early. Both the owner and the approving officer sign it, and a copy goes in the account file.

Running a plan month to month

A sample Texas plan: an owner owes $900 and asks for six months. The installment is $150, due on the 15th, plus the regular $75 monthly assessment on the 1st. The treasurer signs on March 10. The first installment is due April 15 and the last September 15. A Colorado owner with a $1,140 balance can choose any amount of at least $25 a month, but the offer must allow 18 equal monthly payments, which works out to $63.33. Each month, compare the plan schedule to what was received within a week of each due date. Send a short reminder a few days before the due date for the first two months. If a payment is late, call or email the owner the same week rather than waiting for the default date. Most broken plans start with one missed payment that nobody mentioned. When an owner defaults, send a written notice saying the plan has ended, give the current balance, and say which collection step comes next under your policy. Do not quietly restart late fees without that notice. Report the number of active plans and defaults to the board each month by account number, so the board knows the policy is working.

Mistakes boards make with payment plans

Making up terms on the phone. A director agrees to $50 a month with an owner, nothing is written down, and three months later nobody agrees on what was promised. Use the form every time. Forgetting current dues. A plan that covers only the old balance lets the owner fall further behind every month. Using a stale Colorado offer. An offer with fewer than 18 installments, or one that sets the owner's monthly amount for them, does not meet section 209.5(7), and a foreclosure built on it is at risk. Never recording the Texas guidelines. Filing with the county clerk is a small cost and it shows the board followed the statute. Treating friends differently. Approving a long plan for a neighbor and a short one for an owner the board dislikes is how fair-treatment complaints start. The policy is your protection only if you follow it. For where plans sit in the full collection sequence, see our guide on the timeline for collecting past-due dues. For fee forgiveness requests, see our guide on handling owner requests to waive late fees.

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.

More on dues & money

Or browse all hoa dues, fees & money guides.