To Accelerate or Not to Accelerate – That is the Question

Hal R. Kyles, March 15, 2022

Some board members may not be familiar with this valuable collection strategy. If authority to accelerate is specified in the Declaration, acceleration permits the association to debit a delinquent owner’s account the remaining total assessments approved through the end of the fiscal year.

Let’s look at an example:

Association One’s fiscal year begins in January and ends in December. Each member’s monthly assessment is $200. As of February 1, Bob Jones owes $500 to the Association. The Association could accelerate Bob’s assessments for March thru December ($2,000) and demand payment. In this example, the balance of the account is now $2,500.

Acceleration – or the threat of acceleration – can provide the association leverage and motivate an owner to cure the delinquency in a timely manner. The common use of acceleration (best practice) is for the association to send a delinquency notice and indicate that the owner must pay the existing balance by a certain deadline, to avoid acceleration.

Acceleration is also a good tactic to use against a repeat offender – an owner who has previously fallen behind, cures the delinquency and again falls behind. If it becomes necessary for the association’s attorney to file a lawsuit, any judgment may include future assessments. Enforcement of a judgment typically requires time. If the owner is not making current payments, by the time the judgment is collected the account has accumulated new debt, thus creating a cycle of collection activity.

Pitfalls of Acceleration

Acceleration, to be effective, should be exercised early in the fiscal year. It can, however, present a couple of pitfalls. First, an owner could file bankruptcy and wipe out future assessment obligations, or a lender could initiate a foreclosure and threaten the association’s lien. Although these scenarios are possible, they are the exception in most HOA collection matters.

In summary, association board members and community managers should review the declaration to determine if acceleration is an available collection remedy. The “effect of non-payment” section of the association’s declaration commonly addresses the provision.

Associations should consider acceleration:

• Early in the fiscal year
• Against a habitual delinquent owner
• As an incentive for the owner to cure the existing debt

The association should consult its collection attorney about the use and benefits of acceleration.