Staying compliant with HOA/COA regulations – especially when it comes to accounts receivable recovery and collections – is becoming increasingly challenging for community association management companies. With new legislation introduced regularly, it feels like the goalposts are always moving – and missing the rules can be costly. States like Colorado, Texas, and Virginia have passed laws requiring stricter rules around payment plans, notification methods, and lien thresholds – and there’s no sign of this slowing down in 2025. It’s reasonable to anticipate that the legislative changes disrupting communications for management companies in the states mentioned above will soon expand to others. Even if your management company doesn’t currently operate in states with strict communication mandates, it’s essential to stay vigilant and prepared for similar regulations to emerge elsewhere.
The Growing HOA Compliance Challenge
Managing compliance for collections communications isn’t just a hassle; it’s a high-stakes process that impacts both efficiency and homeowner trust. Here are some of the key pain points management company executives regularly face:
- Frequent Legislative Updates: New state laws demand constant policy reviews and updates.
- Administrative Burden: Ensuring compliance requires hours of research, policy changes, and manual communication updates.
- Increased Attorney Fees: As legislation continues to increase and be regularly updated, many management companies are resorting to a review of their policies from their attorney, further increasing cost and time. Unfortunately, this could lead to a potential increase in HOA fees for homeowners.
- Risk of Errors: Missing a step in the process could lead to costly penalties, legal disputes, and strained homeowner relationships. This could result in not just paying a fine, but losing a client.
- Lack of Consistency: With multiple communities across different states, maintaining uniform compliance across all properties can feel nearly impossible. In fact, there is no such thing as uniform compliance any more; what works in South Carolina doesn’t work in North Carolina, and what works in California doesn’t work in Colorado. Management companies who oversee a portfolio of HOAs and COAs across multiple states are especially feeling the burden.
Is AI the Solution?
AI is becoming a driving force of change in community association management. From communications to accounting, every aspect of work is being transformed.
The main question one must ask is, where is AI here to stay? After all, there are many trending AI tools that are nice-to-haves, but not must-haves. Not every AI tool is producing positive ROI, either, as users aren’t necessarily adopting AI on a regular basis.
When it comes to compliance, however, things are different. Maintaining compliant HOA/COA regulations is a necessary function of management companies and boards. Therefore, AI-fueled compliance solutions are more likely to be here to stay versus trendier tech tools.
Here’s why AI could be the game-changer for HOA and COA collections compliance:
- Automated Rule Adherence: AI can be programmed to apply state-specific rules for fees, liens, and notification timelines, ensuring every action meets legal standards.
- Real-Time Updates: AI dynamically updates workflows as laws change, keeping processes compliant without the need for constant retraining or manual intervention.
- Error Reduction: Automation minimizes human error, reducing the risk of non-compliance and potential legal disputes.
- Customizable Communication: AI can tailor messages to meet both state regulations and homeowner preferences, such as language or preferred channels (email, mail, or text).
- Scalability: Whether managing one community or dozens across multiple states, AI ensures consistent compliance at scale, saving time and resources.
- Cost Efficiency: By reducing the administrative burden and the need for costly legal consultations, AI lowers the overall expense of maintaining compliance.
- Proactive Risk Management: AI can identify at-risk accounts early, allowing for timely intervention before delinquencies escalate.
- Improved Engagement: Personalized, automated communication fosters smoother relationships with homeowners, making AR recovery a faster process and ensuring less attorney action is needed.
- Centralized Oversight: With AI, management companies can manage compliance for multiple communities in multiple states on one single platform, simplifying oversight and reporting.
Exploring AI Solutions to Manage Compliance
If you’re tired of the constant struggle to monitor compliance and maintain consistency, AI could be the transformative tool you need. You can read further into the potential of AI with respects to compliance and legislation in our report AI at the Helm. And if you wish to see TechCollect’s AI-fueled solution to manage your compliance needs, reach out to us for a demo.
