Is Your HOA Delinquency Rate Hurting Your Community?

What Is an HOA Delinquency Rate?

Simply put, your delinquency rate measures what percentage of homeowners are behind on

their association assessments. It responds to the significant inquiry of who owes money, the

amount owed, and how long they have been owing it. When banks and lenders see

delinquency rates, they extend loans or call in debts. Your organization will have unique but

equal importance upon making decisions. The rate of delinquency indicates whether your

community can afford to function properly.

The Real Consequences of High Delinquency Rates

Delinquency rates are created because of the community effects. These effects play out time

and again with associations throughout Florida and can be catastrophic if nothing is done.

Cash Flow Problems

If homeowners do not pay their assessments, your operating account will not have the

money you budgeted when preparing your annual budget. This creates immediate practical

problems. Services might need to be cut, vendors may not get paid on time, resulting in late

fees, maintenance gets deferred, and projects get delayed.

Special Assessments Become Necessary

Communities often rely on special assessments for cash flow issues from delinquency.

These one-time fees help associations get by when operating funds come up short, but they

come with their own problems — putting pressure on homeowners and damaging

community morale.

Difficulty Securing Loans

Lenders consider delinquency rates when reviewing HOA loan applications. High

delinquency rates can lead to worse loan terms or even rejection, stalling important

community projects.

Decreased Property Values

High delinquency rates can lead to lower property values and difficulty selling homes.

Industry consensus shows rates beyond 8% are viewed unfavorably, and over 15% indicate

crisis conditions.

How to Calculate Your HOA Delinquency Rate

There are two main methods: Account-Based and Balance-Based.

- Account-Based Delinquency Rate: (Number of delinquent accounts ÷ Total accounts) × 100

- Balance-Based Delinquency Rate: (Total delinquent dollars ÷ Total owed dollars) × 100

Both rates provide valuable insight — one showing how many homeowners are struggling,

and the other showing financial impact.

What's an Acceptable Delinquency Rate?

A rate between 2–5% is considered healthy. Rates above 8% require attention, and above

15% indicate crisis levels.

What We're Doing to Manage Delinquencies

- Early outreach and courtesy notices at 15 days past due.

- Consistent collection procedures for fairness.

- Payment plans for temporary hardship.

- Partnering with specialized collection attorneys when necessary.

- Regular reporting and homeowner communication.

Your Role as Board Members

Board members should review delinquency reports regularly, approve recommended

actions promptly, and communicate the importance of timely payments to homeowners.

The Bottom Line

Your HOA’s delinquency rate impacts cash flow, borrowing capacity, property values, and

the overall financial health of your community. Early intervention and consistent

management prevent long-term damage.

For assistance, contact your community manager or visit https://www.ssmgfl.com/.