Pacific Association Collections - PAC
Delinquent Assessments - Board Members
It is common for some board members to expect special treatment when they become delinquent in their assessments. When this occurs, there are several factors the board needs to consider:
- The bylaws or election rules may disqualify a director from serving on the board if he or she is not in good standing. The governing documents must be reviewed in this regard.
- The board owes the membership a duty to treat all members of the association equally. It would be a breach of the board members’ duty to give preferred treatment to one member over the other members. Unequal treatment can also result in discrimination claims, wrongful collection claims, and wrongful foreclosure claims.
- The delinquent board member must recuse himself or herself from voting on any matter in which he or she has a conflict of interest. This would include:
- Any decisions on how to deal with all delinquent accounts,
- Any decision concerning the establishment of a delinquency policy,
- Any decision concerning the approval of a budget,
- Any decision concerning raising the amount of the assessments, and
- Any decision concerning the approval of a special assessment.
As a practical matter, board members who are delinquent in paying their assessments have so many conflicts of interest, they should seriously consider resigning unless they can cure their delinquency quickly.
Lastly, it should be noted that board members who are delinquent become very vulnerable to recall actions by the membership.
Pacific Association Collections