One time late fee forgiveness

As an unwritten policy, we will waive a late fee if a person requests it, and has good reason, and has been consistantly on time.

If there is a written policy of one freebie per year, then that could possibly be an invitation to take advantage of it. If many people did, then it could potentially cause a lot of extra work for our MC. And since they are getting that freebie, it would cost us $5.00 per collection letter per late account that we couldn't recover because we granted all the freebies.

This is the worst case scenario, but if in a 200 home HOA, everyone took advantage of the one time per year freebie, and they all took it in January every year, with the fee for the late letter, that would have to be sent. being $5.00, the cost to the HOA would be $1,000, plus a deficit in working capital for that month.

We will waive a late fee if the home owner request it and they have had a good payment record.

In fact, I just got a notice I was late and got assessed a late fee but I have the documentation that my bank paid it (automatic payment). Our Management Company has made this mistake before, not posting the payment then asking for a late fee.

Thanks for the replies. It's a tough issue balancing between trying to do what's right and enforcing the rules. If one fee is waived, then everyone would want theirs waived and then why have the rule.

Our Board is still wrestling with the issue.

Thanks everyone for the input.

Tom

No I do not think it was ok to excuse the payments. While I can appreciate the sentiment behind it the Board would have been better off soliciting donations to pay the fees for the families who had the deaths.

Tom, the associations we manage have Rules and Regulations on Delinquent Accounts which includes the statement: "An owner may request consideration by the Board of Directors to defer payment due to extenuating circumstances." I think forgiveness of late charges should be considered when applied for promptly and when there is a justification which the Board feels is warranted. I don't believe there should be an automatic forgiveness of late fees.

We wouldn't waive a monthly assessment in the case of a death. The estate is responsible for all debts of the deceased, so the monthly assessment should be paid until the property is sold.

The late fee is different, however. I think if the monthly payment is late due to a death, the late fee should be waived until the estate gets a chance to put things in order. I feel the late fee is a penalty imposed on a resident to change their behavior ie., paying late. If it happens one time over several years, the behavior doesn't need to be changed, therefore, no late fee penalty.

Tom

Glen:

I think you should use common sense, if you would actually go back and re-read my post I agreed with one month waiver of fees, not two years. Since she hasn't paid in two years you have every right to foreclose. However, I think it is an appropriate gesture of sorrow for an association to provide one month or partial month off of the dues. I would be willing to bet money if you asked your members they would agree with this, if the association is that hard up it can't do without the $100 then you have bigger problems.

Roger:

I respectfully disagree, if the homeowners and board agree on it then I see no issues with it. You are right about precedents in some situations, but how often does someone in an association die, most people don't do that to avoid paying.

Not to sound heartless, but I was against the HOA "Excusing" the monthly dues. I felt the HOA should have declined adding any late charges to the dues until the property was sold or properly turned over to family members. I also felt the decision to "Excuse" the monthly dues was NOT a board decision but ALL the HOA members. The decision was NOT voted on by ANY members except the board. I felt that the board should have presented the "option" for the member to donate money to the families to cover the debt/dues.
I don't think the HOA should EVER excuse a monthly payment or use it as an "incentive" to excuse it. (For example board member being exempt due to being board member or doing maintenance work). The money should be paid and if services are rendered then paid out of the HOA budget. This keeps the records straight and everything fair/equal.
By the way, the people who died in our HOA, the family was able to sell the one house for a significant profit and the other went into probate court. So the HOA was out $50 on one house and then it was out $700 while waiting on probate court to release it for bank foreclosure. Due to it being a bank foreclosure and NOT a HOA one, the HOA NEVER got paid ANY backdues! So yes, $100 is important to the budget. And YES, that HOA has serious budget issues..