Delinquency Policy
Delinquency Procedures
Approved by the Board October 16, 2014
Policy Statement
GHI members are responsible for the payment of their monthly co-op fees, which are due on the first of each month. A grace period is extended through the close of business on the tenth day of the month, after which a late fee is applied according to the terms of the Mutual Ownership Contract.
When requested, it is the cooperative's practice to attempt to work out payment plans with members who become delinquent due to extenuating circumstances. GHI staff will provide financial counseling or make referrals to appropriate agencies when requested.
Collection Procedures
The relationship between a member and GHI is not only a contractual ownership relationship, but also that of landlord/tenant, according to Maryland law. It can become a debtor/creditor relationship if payments are not made on time by the member. The Board of Directors is responsible for assuring that all financial obligations of the cooperative are met. It has the responsibility for collecting unpaid co-op fees from members by initiating court action to collect delinquent fees and/or repossess the member's unit. Legal fees and other costs may be collected in accordance with Maryland state law.
Timeline
| TIMELINE | ACTION |
| 1st of the month | Payment is due |
| 10th of the month | Grace period expires |
| First business day following the 10th of the month | Late fee applied & late notice sent to member (M-1) |
| First business day following the 10th of the first full month of delinquency (minimum 40 days late) | Late fee applied, request for immediate payment & notice of delinquency sent to member and financing institution (M-2), includes warning of referral to attorney for judgment for past due amount and attorney fees. Thirty day notice of termination of leased rental spaces |
| First business day following the 10th of the second month (minimum 70 days late) | Late fee applied, request for immediate payment & notice of delinquency sent by certified mail to member and financing institution (M-3), includes notice of a meeting with the Board of Directors if matter not resolved prior to the 1st of third month. Account referred to attorney for judgment for past due amount and attorney fees |
| First business day following the 1st of the third month (minimum 90 days late) | Notice sent by certified mail to member and financing institution of cooperative's intent to evict. (M-4) |
| First Board of Directors meeting following 90 days delinquency | Include item on agenda for executive session of 1st scheduled Board of Directors meeting following 90 day delinquency period. Generally beginning @ 6:30 P.M. |
| If payment rendered after termination of membership | Re-instatement letter must be sent to member |
Relationship to Lender
GHI enters into an agreement with lenders, the Recognition Agreement, whereby each party agrees to notify the other if the member becomes delinquent in either the co-op fee or loan payment. GHI agrees, upon request of the lender, to exercise its powers to terminate the membership, and is obligated to assist in the removal of the member from the unit, where possible.
Right of Redemption
Under Maryland law, a member has a right to retain possession of the unit by paying to GHI an amount equal to the amount of the judgment (and costs of the suit). A member has this right before and after the judgment. Payment is accepted until such time as the sheriff begins the actual eviction. Note:Under Maryland law, the "right of redemption" does not apply to any member who has received more than three court summonses for rent due in the twelve months preceding the current complaint.
