Arrears: Are the courts really on your side?
- Onyx Capital Management
- Dec 24, 2025
- 5 min read
As an HOA Member in arrears, you may think the court is doing you a favor, but is it?
When a homeowner falls behind on HOA assessments, the situation often feels personal, emotional, and urgent. Once a matter reaches small claims court, it can appear, at least on the surface, that the legal system is stepping in as a neutral referee, or even offering relief. But the reality is far more complicated, and in many cases, far more costly for everyone involved.
Understanding how the collection process works, why HOAs are required to pursue delinquent accounts, and what happens when courts intervene can help homeowners make better decisions before the problem escalates.
How HOA Collections Typically Work
HOA assessments are not optional fees; they are legally binding obligations tied to property ownership. When a homeowner becomes delinquent, most associations follow a structured, progressive collection process:
Courtesy notices and late notices: These are intended to resolve the issue early and without legal action.
Late fees and interest: These are applied according to the governing documents and state law.
Formal demand letters from legal counsel: At this stage, legal fees are incurred, not as punishment, but as a necessary step to enforce the association’s obligations.
Filing in small claims or civil court: This is typically a last resort, used when all other attempts at resolution have failed.
By the time a case reaches court, the HOA has already exhausted less expensive and less adversarial options.
When Courts Reduce Fees, a Dangerous Message Is Sent
Occasionally, a judge may decide to award the association only the unpaid assessments, reducing or eliminating late fees and legal costs. While this may seem like a win for the homeowner in arrears, it creates a serious unintended consequence.
When courts do not fully reimburse the HOA for collection costs:
The community absorbs the loss, meaning compliant homeowners indirectly subsidize delinquency.
A precedent is set, signaling that delaying payment may reduce consequences.
Future delinquencies increase, as others assume they can “wait it out” and negotiate later.
This undermines the financial stability of the association and erodes trust among homeowners who pay on time.
The Court Did Not Do the Homeowner Any Favors
What many homeowners don’t realize is that a reduced judgment often does not end the matter.
In many cases:
The HOA’s legal counsel will appeal or continue enforcement
Additional legal fees accrue
The homeowner ultimately owes more than they would have by resolving the matter earlier
What initially looks like leniency can quickly become a deeper financial hole. Court involvement almost always increases, not decreases, the total cost to the homeowner in arrears.
The Board’s Fiduciary Responsibility
HOA boards are not acting out of spite or inflexibility. They have a fiduciary duty to protect the financial health of the entire community.
This includes:
Ensuring vendors are paid
Maintaining reserves
Preserving property values
Treating all homeowners equitably
Failing to pursue delinquent accounts exposes the board to legal risk and shifts the financial burden onto responsible homeowners. Selective enforcement or informal forgiveness is not only unfair, it may be unlawful.
The Myth: “I’ll Withhold Payment to Force a Dispute”
One of the most damaging misconceptions in HOA communities is the belief that withholding payment is an effective way to resolve a dispute.
In reality:
Nonpayment does not pause enforcement
Disputes do not negate the obligation to pay assessments
Late or refused payments trigger automatic collection processes
If a homeowner believes an error has occurred or a dispute exists, the correct approach is to pay under protest and pursue resolution through proper channels. Do not to stop paying altogether.
How Delinquency Affects the Entire Community
Late or unpaid assessments don’t exist in a vacuum. They can result in:
Deferred maintenance
Special assessments
Reduced reserve funding
Higher dues for everyone else
Even a small number of delinquent accounts can have outsized effects on a community’s finances and long-term stability.
Advice for Homeowners Who Are Struggling
If you find yourself falling behind, the most important step is early communication.
Consider the following:
Contact the management company or board immediately
Ask about payment plans or temporary hardship options
Address disputes separately from payment obligations
Avoid letting the account reach legal action whenever possible
Most HOAs would rather work with a homeowner than escalate to court but they can only do so if the homeowner engages early and in good faith.
Final Thoughts
Courts are not a safety net for HOA delinquency, and reduced judgments are not victories. They often lead to longer, more expensive legal battles and place unfair strain on the community as a whole.
HOA living is a shared financial responsibility. Addressing problems early, before attorneys and judges are involved, is almost always the least expensive and least stressful path forward for everyone.
Frequently Asked Questions: What to Do If You’re Behind on HOA Dues
What should I do first if I know I’m going to miss a payment? Contact your property manager or HOA as soon as possible. Early communication often allows for solutions that prevent late fees, legal escalation, and damage to your account.
Can I withhold payment if I disagree with the HOA or board? No. Withholding payment does not suspend enforcement and almost always makes the situation worse. Disputes should be addressed separately and through the proper process while assessments continue to be paid.
Will going to court lower what I owe? Rarely and often temporarily. Court involvement almost always increases total costs due to additional legal fees and enforcement actions.
Why is the HOA required to pursue collections? HOA boards have a fiduciary duty to protect the association’s finances and ensure fairness to all homeowners. Ignoring delinquent accounts shifts costs onto neighbors who pay on time.
Are payment plans ever an option? In many cases, yes, but they are most effective when requested early, before legal action begins.
A Message from Onyx Capital Management
At Onyx Capital Management, our role is to protect the financial health of the entire community while treating every homeowner with fairness and respect. We believe most collection issues can be resolved before they escalate like when communication happens early and expectations are clear.
If you’re experiencing financial hardship, reaching out sooner rather than later gives everyone the best chance for a reasonable outcome.
If you’re a board member, enforcing assessments consistently isn’t about being punitive, it’s about fulfilling your fiduciary responsibility and protecting property values for all owners.
Important Legal Disclaimer
HOA laws, collection procedures, and homeowner rights vary by state and by governing documents. This article is intended for informational purposes only and does not constitute legal advice. Homeowners and boards should consult qualified legal counsel for guidance specific to their situation.