Michigan Condo & HOA Assessment Collections: A Board’s Step-by-Step Playbook

In Michigan, condominium  and HOA boards can usually collect unpaid assessments effectively when they follow a consistent, documented process: accurate ledgers, clear notice, a written collections policy, timely escalation, and disciplined decision-making around liens, payment plans, and enforcement. The key is to treat collections as governance—consistent and defensible—not as a personal dispute with an owner.

Key Takeaways

• Collections works best when the board follows one written policy—every time.
• Your biggest risk isn’t “being tough”—it’s being inconsistent or sloppy with documentation.
• A predictable escalation path (notice → demand → lien/next step) reduces drama and increases recovery.
• Boards should separate business decisions (budgets/reserves) from personal conflict with owners.
• The fastest way to reduce disputes is to publish the policy and stick to it.

Board-Level Reality Check

Most boards don’t “choose” to become debt collectors. You’re volunteers trying to keep the community running, then a handful of owners stop paying, and suddenly your reserve study, roof replacement, and landscaping contract are all under pressure. The worst part: if your process isn’t consistent, the association can end up spending more in legal fees arguing about how it collected than about what is owed.

Step 1: Adopt a Written Collections Policy the Board Can Defend

A written policy is your “seatbelt”.  It keeps the board consistent, fair, and harder to attack.

A board collections policy should clearly state:

• When assessments are due and when an account is considered delinquent
• What happens at day 15/30/45/60/90 (or your chosen timeline)
• Late fees, interest, and administrative charges (if authorized)
• When accounts are turned over to counsel/collections
• Whether payment plans are allowed and on what terms
• When the board will consider lien/enforcement options
• How disputes are handled (ledger questions vs. “I’m mad at the board”)

Board mistake to avoid: “We handle it case-by-case.” That sounds fair, but it often becomes inconsistent.  And inconsistency is what can get boards into trouble.

Implementation tip: Adopt the policy by resolution and keep it with your governance documents. Publish a short “owner-facing summary” so it doesn’t feel like a surprise.

Step 2: Fix the #1 Hidden Problem—Your Ledger and Paper Trail

If the ledger is messy, every collections step becomes slower, riskier, and more expensive.

Before you escalate anything, confirm:

• The owner’s correct legal name and mailing address on file
• The assessment schedule (and any approved increases/special assessments)
• What was billed, what was paid, and how payments were applied
• Whether credits, waivers, or adjustments exist (and who approved them)
• Whether the association followed its own notice requirements

Board mistake to avoid: Sending a “demand” when the ledger has obvious holes. It undermines credibility and invites disputes.

Treat your delinquency list like financial statements: review it monthly, not “whenever it gets bad.”

Step 3: Use a Simple Escalation Timeline (and Don’t Negotiate Against Yourself)

Collections works when the timeline is predictable and boring.

Here’s a board-friendly model (adjust to your documents and management practices):

• Day 1–15: Courtesy reminder / statement
• Day 30: First delinquency notice (clear amount + due date)
• Day 45–60: Final notice + intent to turn over to counsel/collections
• Day 60–90: Turnover + formal demand + board decision point on next leverage step
• 90+ days: Consider lien/enforcement track + payment plan standards

Board mistake to avoid: Re-starting the clock every time the owner calls angry. Your process should be stable even when emotions are not.

Step 4: Payment Plans

Payment plans can increase recovery, but only if they are written, consistent, and enforceable.

A good board payment plan typically includes:

• A signed agreement (not informal emails)
• Current assessments must stay current (autopay is ideal)
• A fixed monthly catch-up amount
• A clear default clause (missed payment = immediate escalation)
• No waiver of lien/enforcement rights unless the board affirmatively decides otherwise

Step 5: Know Your Leverage Options (and When Each Makes Sense)

Common collection methods:

• Formal demand letter (often the first “serious” step)
• Lien
• Lawsuit for money judgment/ foreclosure of the lien
• Foreclosure options (when permitted and economically sensible)
• Post-judgment tools (garnishment, etc., if a judgment is obtained)

How boards should decide:

• Amount owed (small balance vs. meaningful arrearage)
• Owner behavior (communicative + consistent vs. chronic avoidance)
• Equity and collectability (is there a realistic path to recovery?)
• Community impact (fairness to paying owners, deterrence, precedent)

Board mistake to avoid: Threatening the “nuclear option” too early, then backing down. If you escalate, do it thoughtfully, and be prepared to follow through.

Board Checklist

• Adopt a written collections policy (resolution + owner summary).
• Review delinquency report monthly (board visibility matters).
• Audit ledger accuracy before escalation.
• Standardize notices and keep proof of sending.
• Establish payment plan standards (autopay + default clause).
• Decide a clear “turnover threshold” (days delinquent and/or amount).
• Separate ledger disputes from governance disputes (two tracks).
• Track attorney/collection costs as you go.
• Document board decisions in minutes.
• Revisit policy annually based on results.

When to Call a Michigan Condo/HOA Lawyer

Call counsel when:

• Your delinquency rate is rising and you need a system, not one-off letters.
• An owner claims selective enforcement, discrimination, or “the board can’t do this.”
• The owner demands a hearing, threatens suit, or escalates publicly.
• The account is large enough that a lien/enforcement decision has real risk.
• You’re seeing repeated hardship claims with inconsistent documentation.
• You have a disputed ownership/tenant situation, probate, bankruptcy, or title confusion.

Frequently Asked Questions About Condo/HOA Collections

Contact Us

If delinquencies are threatening your budget or reserves, schedule a focused Michigan condo/HOA collections strategy review. We’ll review your documents, your current delinquency profile, and recommend a clear escalation track your board can follow consistently.

This article provides general Michigan-oriented information for association boards and is not legal advice. Associations should consult counsel about their specific documents, facts, and enforcement options.

About the Author

Richard M. Delonis is a Michigan condominium and HOA lawyer at Szura & Delonis, PLC in Southfield (Metro Detroit). He advises association boards and community association managers on governance, rule enforcement, assessment collections, document amendments, and risk management, with a practical focus on helping boards reduce disputes and run defensible, well-documented processes.