Payments for fees

Our deed restrictions, while serving the community for over 35 years, are really a mess in what they don't say rather than what they do say. Part of the problem is that no one saved any documentation to "follow" things that were changed (i.e. payments going to annual, fiscal year changing from January/December to October/September). The paragraph concerning fees says a fee up to $25.00 a month may be charged as may be set from time to time. Previous boards have allowed owners to make payments (on a $250 annual assessment).

What I proposed was a payment policy that allows for payments of $50.00 per month but to start in June (prior to the due date of the assessment) and be finished by October 31st. Presently payments are allowed from October to March. The covenants state fees remaining unpaid for 30 days following the date payable shall be charged a late fee of $25.00. An additional late fee of $25.00 shall be applied for each consecutive month on the 30th of that month that the account remains in arrears. By collecting payments from June to October, those accounts would not need special treatment (not accessing late fees).

The President is reluctant to make this change because he feels the governing documents are not specific enough. I say this is an area where the board can write the policy that really only affects less than 6 members per year.

Any forseeable problems with making this change?

JoAnne

Joanne,

If I'm following you correctly:

1) Assessments are $250 per year
2) Assessments are made in October (start of fiscal year)
3) Members are allowed to pay installments of $50 per month (1st payment due by Oct 31).
4) Installment payments that are late are charged a $25 fee per month.
5) Per the language cited, the amount of this charge is set by the board.

You Desire to:

1) change the first payment due date from Oct 31 to June 30

Typically, assessments are due on the first day of the fiscal year. Most Associations allow members to make monthly installments. It's normal for these installments to start on the first month of the fiscal year.

Based on the above, I see the following issues with what you are suggesting:

1) It's outside the normal expectations for monthly payments and can cause confusion.

2) Typically there are bills that must be paid at the beginning of the year. If you start collecting assessments in the middle of the year, will there be enough funds to cover those bills at the beginning of the year?

3) Since your from Florida, how many members are snow birds? Changing the payment schedule may cause some to miss the payments because they aren't there when the assessments are due.

Instead of changing when the first payment is due, why not change the amount of the monthly installments (12 months of $25 per month vs. 6 months of $50 per month)? This could provide the financial relief some members might be looking for and not change the payment schedule for those who have an expectation of monthly payments beginning at the start of the fiscal year.

You are correct, it's normal for the CC&Rs to simply establish the basics about assessments and for the board to adopt a policy to define procedures on how the assessments will be collected.

Tim