Collections in 2020 Why Race Matters

The first seven months of 2020 have been difficult and uncertain for our country. With the emergence of the COVID-19 pandemic, we are all navigating uncharted waters and doing our best to adapt. Amid this unprecedented challenge, racial tensions and inequities have come into focus that require us to consider whether collection practices within our industry contribute to the problem, or create a perception that might result in liability for boards and managers. 

As we considered the impact of traditional collection practices, it became clear that these practices often disproportionately impact both the health and finances of certain minority populations.  Being in an industry created to develop, maintain, and improve communities, we must recognize these inequities and make changes to the way we approach delinquent assessment collections. The traditional model of rapid legal action without any meaningful proactive outreach only adds to the unbalanced negative impact on groups who may already be suffering. That is why it is more important now than ever to initiate compassionate collections and provide homeowners with the proper education and means of communication to resolve their delinquent account prior to legal action.

A recent survey from Equity Experts of over 100 presidents and leaders in the community management industry around the nation found that 91% agreed that, given the current social injustices and pandemic, community associations should be more lenient with delinquent homeowners who claim hardships. On top of that, a staggering 81% of participants said that they expect a substantial increase in delinquencies - but over 40% felt that they were unprepared to handle such an increased volume of delinquencies. Given this information, it is crucial to analyze the effects the current social and pandemic environment have on community associations, and the solution to navigating through it and beyond.

Minorities Hit Harder in Both Health & Finance

The health effects - both mental and physical - of COVID-19 are far-reaching across all demographics, but it is clear that certain populations are affected significantly more. The following is from an April 2020 survey by the Pew Research Center:

“Among the public overall, 15% say they personally know someone who has been hospitalized or died as a result of having COVID-19. However, about a quarter of black adults (27%) say they personally know someone who has been hospitalized or died due to having the coronavirus. By comparison, about one-in-ten white (13%) and Hispanic (13%) adults say they know someone who has been so seriously affected by the virus.”

Additionally, APM Research Lab found that black Americans are 3.8 times more likely to die from the coronavirus than white Americans. As concerns mount in these communities about keeping themselves and their loved ones safe, it is understandable that many people may fall behind on their assessments while addressing their health and safety as a more urgent priority. As an industry, we should recognize this potential outcome and be prepared to address their delinquencies with the compassion and empathy they deserve.


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