Late Dues Policies

I have a question. I was wondering if people can post their policies regarding late duess. We do not have any in place right now because it hasn't been much of an issue.. Now we have a few problems and I think it's time to get something written down. If you don't mind can you write your policy so we can have an idea what the norm is? For example when they are x amount of months late they get a letter, at x months we contact the lawyer. at x amount we foreclose.
What do you do if the homeowner is going through tough financial times like a job loss or divorce?

Sharon,

You can take our policy as an example. As John points out, each state's laws are slightly different and any policy must be consistent with your governing documents, especially regarding the amount of late fees and interest

Following is the collection policy approved by the Board of Directors:
1. Amounts Payable to the Association
Amounts Payable to the Association include regular assessments, special assessments, specific assessments, fines duly assessed, late fees, legal fees, and other costs associated with collection of funds on behalf of the Association.
2. Payment Schedule
Unless otherwise provided by the Board, the annual assessment is due and payable at the start of the fiscal year on January 1. The Board may elect to allow members in good standing to pay assessments in installments. The amount of the annual assessment and any installment policy will be communicated by mail to all members via postal mail at least thirty (30) days prior to the end of the previous fiscal year. Annual assessments are delinquent if not received by January 1, or according to the installment policy, if any. Special Assessments and Specific Assessments, including fines, will be due on the date set in their respective announcements. Failure by a homeowner to comply with the terms of an installment policy, if any, will suspend the use of the installment policy for that homeowner.
3. Late and Interest Charges
A late charge equal to the greater of ten dollars ($10.00) or ten percent (10%) of the amount not paid will be charged to all delinquent accounts thirty (30) days past due. Delinquent changes shall accrue interest at the rate of ten percent (10%) per annum from the due date of the assessment, which will be posted monthly to each delinquent account.
4. Order of Crediting Payments
Payments received shall be applied first to post-judgment attorneys' fees, costs and expenses, then to costs and attorneys' fees not reduced to a judgment, then to interest, then to late charges, then to delinquent assessments, and then to current assessments.
5. Process For Delinquency Notification
First Notice
First notice of past due charges, including detail of assessments, late charges, interest, and any other charges that apply, will be sent to an owner whose balance is thirty (30) days past due. This notice will be sent via postal mail by the Treasurer of the Association.
Second Notice
Second Notice of past due charges, including detail of assessments, late charges, interest, and other charges that apply, will be sent to an owner whose balance is sixty (60) days past due. This notice will be sent via postal mail by the Treasurer of the Association.
6. Attorney Action and Attorney’s Fees
If an account is delinquent for more than ninety (90) days, the account will be referred to the Association’s Attorney for collection. If a delinquent account is referred to an attorney for collection, the owner shall be charged the Association’s fees actually incurred and all related costs.
7. Judicial Foreclosure
Pursuant to the Official Code of Georgia, the Association may foreclose any lien it has against a delinquent owner by filing an action for judicial foreclosure, in addition to an action for a money judgment. This option may be exercised by the Board on any account totaling at least two thousand dollars ($2,000.00) in delinquent charges and being delinquent for over one hundred twenty (120) days.
8. Suspension of Right to Use Common Elements
In the event any assessment is delinquent thirty (30) days or more, the Association will suspend the owner’s right to use the common elements and common building services. Notice of a delinquent account is sufficient for informing owners and their guests of the suspension of privileges. The suspension of privileges will continue until the homeowner has satisfied all debts owed to the Association and has satisfied all liens on their property held by the Association.
9. Returned Checks
Checks returned to the Association for insufficient funds or other reasons will result in a charge to the applicable homeowner of twenty-five dollars ($25.00) plus whatever fees are charged to the association by the bank.
10. Questions or Correspondence
All questions concerning this policy, or questions relating to a specific account, should be directed to:
Address
OurTown, GA

Thanks Everybody! The information was extremely valuable.
I've been over our documents a million times. Basically it says we can do what we need to do in order to get the dues. There are no specifics for us to follow which is part of the problem.

I feel our treasurer up to this point has given anybody who is having problems a break. Which I really haven't really cared about because it was so few people.. Now there are a few more people that are behind. Unfortunately, I just do not think he has it in him to turn it over to the attorney which I have asked him to do on multiple occasions. I told him we need a firm policy like the one posted, in order to take out anything personal out of it. He says we aren't in the business to kick people while they are down. I understand that and agree with that up to a point.

As a practical matter of bookkeeping, what does your ledger look like if the order of crediting payments is to apply a late payment to interest before application to a delinquent assessment? An owner might be assessed a couple of dollars of interest, and so after his next monthly payment is applied first to the interest, he is still a couple of dollars short. Do your books show such details and is there an easier way? My accounting skills are not that great.