Late fees on a late fee

I am a member of Mill Creek HOA in Brownstown MI. I recently was made aware that a $25.00 late fee could be added on a late fee. To me this seems like Pyramiding Late Charges.

As a member, yes I should be aware of the By Laws. Unfortunately when we purchased our home we were not given a copy of the By Laws, we were told we would have them soon. My error in not following up and making sure that I received the By Laws.

Anyways, this recent letter was sent to me saying they will place my home in foreclosure if I do not pay the $250.000 in arrears. Of course I was surprised with this and called our property management company this letter came from, KS Management in Wyandotte, MI. I requested many times, asking, if they could tell me where its stated in the By Laws of such late fees, that I borrowed a neighbors copy and could not find it anywhere. I was told by one of their property managers “pay it or have a lien” that’s all. I continued to leave messages requesting a simple answer on where I could find the rule and I would of course pay the late fees. They refuse to return any of my calls. I did speak with the office manager on this as well, and asked how can you impose late fees without the member being aware they are there, and receive such a notice. I told her I never received any notices of late fees until now. She said they never send late notices. Excuse me?? I have since filed a complaint with the BBB, and will be seeking legal advice on what actions I can take.

I completely understand HOA payments and the items they pay for within our community. I would understand the late fees as well, if I could simply see where they are stated in our By Laws.

my advice, pay the assessment and the initial late fee charge (if you know it).
Send that with a letter nicely requesting the regulation number/rule that addresses late fees.
Send the same request to the board.

keep it nice. You are asking to become informed, educated, and to learn more about the HOA you live in. That's all. keep it simple and nice, a simple request for information.

Once you get (or do not get) that information, you can make your next step (Pay the charges, fight the extra charges, etc.)

Doing it this way shows you are willing to pay your dues (good) and even a late fee (great! you admit you missed paying, and are doing the right thing). All you are asking about is information on the rest, and you might pay it too, if you understood it. And, that you are making an effort!

If i ever received a letter from one of my owners asking nicely for information about the rules, I always happily answered it. I loved that they were making an effort, even if they were incorrect in their thinking.

Pay the assessment, and the initial late fee. that puts you on decent footing with the board to start asking questions. Without doing that, you will be labelled a "non paying troublemaker".

Thank you for your time and reply. Needless to say this has caused me stress, especially when I cannot get the management company to return any of my calls. I have been polite when leaving messages, just cannot get a reply. $100.00 of the late fees are because I was told the incorrect online payment information from THEIR staff. When I noticed the payment had not cleared my account, I called their office immediately, and let them know the information was incorrect, and that my payment did not process. The person, Kathy, I spoke with remembered my first call, and apologized for the wrong information. And said she would note my account. Now, when receiving this notice to foreclose, I spoke with her again, and she did recall, and said she noted my account. I asked again, why I was not sent a notice of the late fees compiling, and she said, we do not send notices. I would have glady paid the 25.00 late fee, even though thats up for debate, then to have to know pay 250.00 in late fees, and have the threat of my home being foreclosed if I do not.

I certainly intend to attend on next HOA meeting.

They can't foreclose for fines/late fees. They can foreclose for unpaid assessments WITH the late fees plus interest. What the letter should have said is that they would place a lien on your property for this amount owed. You would still have to pay the legal costs of them filing the lien plus what you owed.

For waiting on someone to give you a copy of the by-laws or CC&R's...That is YOUR responsibility to be informed. If you didn't get a copy from the seller at closing as a courtesy, then you have to go to the records department of your local courthouse. They are PUBLIC records. It's best to go and get whatever copy is on actual file at your courthouse as that is the one the court system would go by.

Not sure why you felt you needed to go to the general attorney's office. They most likely won't do anything. You still owe money and thus far no damages has resulted on your side. It's all on the HOA's side. Until you actually pay that money, legally not much can happen because all you got was a notification letter. A legal notification letter stating you are in violation.

The amount isn't much and there may be roomm to negotiate in making payments. I would pay up now while things are still affordable than pursue something that isn't.

"They can't foreclose for fines/late fees. They can foreclose for unpaid assessments WITH the late fees plus interest."

Melissa, again you need to be careful when making such blanket statements, while several States have put prohibitions on this practice in place, not all of them have. Even if you know for an ironclad fact that it cannot be done in the OP's State, it is still a dangerous statement to make as someone in a similar situation could rely on it as a "gospel fact" and lose their home or at the least be out $ in legal fees.

The reasoning for contacting the Attorneys Generals Office is simple, if this is an illegal practice, Pyramid Late Charging, then it should be brought to the attention of the AG Office. I doubt that my case is rare.

Corrine,

Just to follow up..the Michigan state HOA statute has no guidelines and there is nothing in your Declaration of Covenants either (please check it carefully) than your Association cannot impose any late fees. The terms for charging any fees have to be documented somewhere.

Not sure if this is of any help, but here is a link Disputing late payment fee in Michigan .. there is a hot line for seniors (?)

http://www.michiganlegalaid.org/library_client/housing/sample_letter_4_disputing_a_late_fee/html_view

Carrine,

As others have said, it depends on the wording within your Associations governing documents and your State laws.

Just to pay and hope all goes away, when a person knows they are in the right, is not the answer. And why so many companies get away with things they do today. If something does not seem right, a person should always question.

Here's the deal...If you had paid, that expense could have been used as a basis for a lawsuit. A court can only make you "Whole" so if you hadn't lost any money yet, you really couldn't sue for anything. That is why I was saying it's better to pay it up and then find your recourse before more damages were incurred. I've seen cases where 250 can turn into 2,500..

Congrats you were able to work things out. Just didn't want to see you get an expanded bill as others have in the past. A HOA has a funny way of finding out how to charge you lawyer consultation fees and other expenses if you question them sometimes...

It seems to me that you should be able to ask the board to pay your legal fees, as they forced you
to hire an attorney (who proved the board was wrong). This is the problem with some boards. They act
without checking their facts first, causing people to needlessly spend money on an attorney.

Steve