Budget season is upon us and one of the most controversial subjects that boards face when budgeting is budgeting for bad debt. What exactly is bad debt? It’s those assessments that are not collectible from the homeowner.
How can a community plan for these homeowners who can’t or unable to pay their assessments? By budgeting properly for bad debt. Sounds simple but it’s not because in communities where delinquencies are high, the board is hesitant to raise assessments. But when homeowners don’t pay assessments, the end result affects the entire community in that oftentimes the end result is higher assessments for everyone.
Suzan Kearns, CMCA, AMS
President and Chief Executive Officer
Community Management Professionals, Inc. AAMC
This article is provided by Associa Living.