Zelmanski, Danner & Fioritto, PLLC

Experienced Condominium and HOA Attorneys
734-459-0062 (Plymouth)
586-465-1330 (Mt. Clemens)


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On Behalf of | Mar 30, 2020 | COVID-19 Support Center |

By Gregory J. Fioritto, Esq.

Prior to the beginning of the COVID-19 pandemic, many Associations were experiencing record-low levels of owner delinquencies.  This is the expected result of a national (and local) economy that improved by leaps and bounds from the dark days of The Great Recession of 2007-2009.  Indeed, prior to the recent unprecedented turn of events, it was not uncommon for many Associations to have no delinquencies at all.

If the expected unemployment forecasts for the next six months hold, the COVID-19 crisis may present a sudden and significant increase in the level of delinquencies for condominium and homeowners Associations across the State of Michigan.

Fortunately, Boards should have at least a few months “lag time” before a potential recession takes firm hold of our State’s economy and starts significantly increasing Owner delinquencies.

We would recommend that Boards take the following steps in preparation for a possible increase in delinquencies:

  1. EXAMINE (AND ADJUST) YOUR 2020 BUDGET AND EXPENDITURES: A COVID-19 recession could hurt an Association in two primary ways – a decrease in the amount of assessments collected (income), and an increase in administrative costs incurred in pursuing delinquencies (expenses).

These sudden (and perhaps drastic) changes in an Association’s income and expenses could put a real damper on its financial health.

In light of this new reality, Boards should consider reducing, deferring or eliminating any unnecessary capital expenditures or costly projects that may have been planned for the year.  The Board will have to exercise its best business judgment in deciding how to re-prioritize such expenditures and projects in view of the changed financial landscape.

Given the dearth of delinquencies in recent years, many Association may have allocated very little funds to collections matters (relatively speaking) in their 2020 budgets.  Boards should review the current allocation of funds to collections matters in their 2020 budgets and consider adjusting the budget to allocate a larger share of funds to collections efforts than was originally planned.   Such re-allocations could perhaps come from excess funds that the Board had planned to put in reserves, or from contingency line items in the existing budget.

The Board, with the support and input of qualified financial professionals, should continue to monitor the COVID-19 crisis and make further adjustments to income projections and expenditures as needed through the remainder of 2020.


We recommend that all Associations have a collections policy in place at all times so that the procedures and standards that the Board will apply in pursuing collections matters are clearly understood by all and fairly administered.

If an Association has not had a policy in place to date, then it should consider adopting one.  If it already has a policy, then it should consider whether or not the policy needs to be amended to best suit the needs of the Board and the Association in the current crisis.

For example, a policy that currently provides for delinquencies to be turned over to the Association’s attorney after 90 days may need to be shortened to require such turnover after 60 days if the Board decides that a more aggressive approach is warranted.

If the Board plans on granting concessions to those Owners who are hardest hit by this crisis, then the standards that the Board will apply in granting such concessions should be laid out in their policy.  For example, the policy could provide that a delinquent Owner whose financial hardship is directly related to the Owner (or one of their family members) contracting COVID-19 is eligible for a payment plan of a longer term, or automatic forgiveness of all late charges on their account.


Again, given the very low overall level of Association delinquencies in recent years, an Association’s 2020 budget may well have been rendered obsolete in many ways, especially in regard to expenditures related to delinquencies.

Boards should plan their 2021 budgets to account for expected decreases in income and increased delinquency-related expenditures.  As we move through 2020, Board should gain a better understanding of just how large these budget adjustments will need to be.

For further guidance on how to plan their 2021 budgets, Boards may be well-served to examine old budgets from years past (say, from 2007-2015) to gauge how their 2021 budgets may need to be adjusted to properly manage the financial fallout of the COVID-19 pandemic.


It almost goes without saying that (ideally) every Association should already have experienced and qualified professionals in place to handle their collections matters.

If an Association has sustained good financial health through the recent economic recovery, the Association’s Board may not even know which firm or collections agent their Association has used in the past to handle their delinquencies.

Each Board should review the existing relationships (and contracts) with their collections professionals/attorneys and make sure that such professionals are well-versed in handling Association collections issues and that the Board is comfortable with the existing contractual arrangement with such professionals (e.g., how much they charge, which methods of collections they employ, etc.)


As with almost all Association issues, good communication (i.e., open, honest and transparent) between the membership and the Board can go a very long way.

In the collections context, this may mean that the Board mails (or re-mails) a copy of the Association’s collections policy to the membership so that all Owners are aware of how such matters will be handled by the Board and its agents.

It may also mean that the Board keeps the Association apprised on a regular basis as to the total amount of current Association delinquencies, so that all Owners are aware of the impact that the pandemic may be having on the Association’s financial status.

Of course, it bears mentioning that the Board should never disclose specific information about individual Owner delinquencies to the membership at large, as such disclosures could result in violations of the Owner’s right to privacy, generate ill will, and create possible legal liability for the Association and the Board.

In sum:  the bad news is that Michigan Associations are likely to face an increase in Owner delinquencies through the remainder of 2020, and perhaps beyond.  The good news is that there is still time for Boards to take action now to minimize the adverse impact that COVID-19 may have on their Association’s financial health.

Gregory J. Fioritto is a partner with the Firm.  He graduated from the University of Michigan in Ann Arbor with High Distinction in 1997, where he obtained his Bachelor of Arts in Psychology and received numerous honors, including Phi Beta Kappa and recognition as an Angell Scholar.  Mr. Fioritto earned his Juris Doctorate from the University of Michigan Law School in 2000.  He joined the Firm in 2003 and has spent nearly his entire legal career practicing in the field of condominium, HOA and community association law.

Mr. Fioritto has extensive experience in virtually every facet of condominium and HOA law, including, but not limited to: drafting master deed and bylaw amendments and guiding associations through the amendment process, drafting rental restriction amendments (including rental caps and bans), managing condominium conversions, handling Fair Housing disputes and claims, counseling boards and managers on insurance and casualty loss matters, collecting  assessments, conducting lien foreclosures, assisting associations with bylaw enforcement, and the handling of FHA certification issues.

He is also well-versed in the many developer-related matters that can and do affect associations, including the application of the Condominium Act and other laws to “unfinished” condominium and HOA projects, “transition of control” issues, defect litigation, and the enforcement of association rights in developer disputes.  He has significant expertise in assisting new associations with maximizing and protecting their legal rights and leverage in transition negotiations with new project developers and builders.

Mr. Fioritto has attended literally hundreds of board and association meetings over the course of his career.  His experience has given him a particular interest in educating co-owners and board members on the many benefits of the proper application and use of parliamentary procedure at meetings.

He has lectured on a frequent basis for many years on condominium and HOA-related topics at seminars sponsored by the Community Associations Institute (CAI) and the United Condominium Owners of Michigan (UCOM).

As a partner with the firm, Mr. Fioritto helped pioneer the firm’s exclusive “Condo & HOA B.E.A.T. (Board Education and Training)” program, an ongoing monthly series of free educational sessions held in Canton and Mt. Clemens and which are open to all (not just firm clients).

In further service of the firm’s dedication to the ongoing education of condominium and HOA boards and their association members, Mr. Fioritto recently helped create the firm’s “Neighborhood Know How” educational program.  As part of this program, the firm provides valuable free educational sessions in conjunction with local municipalities.

In addition to community association law, Mr. Fioritto has experience with commercial and residential real estate transactions and small business formation (including corporations and limited liability companies).

Mr. Fioritto currently serves as President of his own condominium association in Canton, Michigan.  His years of service on his own Michigan condominium board give him a unique and more complete perspective among attorneys of the many practical problems and legal issues that are encountered by community association boards on a daily basis.

He enjoys spending his free time with his two sons, attending Michigan football games (Go Blue!) as well as vacationing up north in the state’s “thumb area.”

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