Late Fees

Our HOA changed the late fee arrangement from $20 late fee if not paid by the 15th of the month to 25% of the outstanding balance monthly. Our month maintenance fee is $275.00. We have a resident that has been trying to sell their condo for 29 months. On month 29 the penalty on unpaid fees for one month was $138,990. They had accumulated total late fee of $2,697,310.70 so far. I personally feel that a one month late fee of $140,000 on a monthly $275 maintenance fee is a problem. At some point the late fee amount becomes disproportional to the actual expense of colleting the missed payment. So I would like to hear some opinions on this issue.

Richard,

I have to agree with Susan. To go for 2 1/2 years without paying annual assessments is unfair to every other member of the Association. I am surprised that foreclosure proceedings haven't started.

That said, I also agree that 25% of the outstanding balance is excessive. However, I suspect your Association made this rule as a deterrent rather then expecting to have to actually charge it. It is possible that if the individual went to court over the excessive fees, they might win some of it back. Of course, if they can't afford to pay their assessments it's probable that they can not afford to pay an attorney and the assessments.

My Association has a 10% per month late fee, which if not paid in a timely manner I believe could be considered excessive. However, the membership did agree to it when they voted on it.

Tim