HOA Making Interest Free Loan to a Member

This isn't a loan. It is a payment plan. It is best the HOA get some money out of this debt than none at all. As I see it, the person is trying to avoid a foreclosure or lien expenses. I would often waive late fees on members who were less than 6 months behind if they agreed to pay their dues and a half to catch up.

The payment plan this owner set up sounds reasonable as long as they stay current from the date they are at as well. I would make sure the HOA doesn't lose the ability to lien after a few missed payments. We had a 6 month we liened policy in place. If you did not make payment arrangements, then after 6 months of behind dues we would lien. After a year, depending on circumstances, we would consider foreclosure. That is an expensive process and one that just stops the bleeding not profit making.

I see nothing wrong with this plan as long as they keep up with it.

I agree, its a payment plan, not a loan.

There certainly is no law against it. Therefore, it would be legal.
The question should be, is the Board authorized to do this based on your governing documents?

Typically the governing documents require assessment payments. Late fees and charges for collection actions are typically authorized by the documents but not required to be imposed. This gives the Board the option of waiving any late fees or charges imposed on a case by case basis.

It appears, that after hearing all the facts surrounding the issue, your Board concluded that waiving those fees was appropriate. Unless you were the party involved or on the Board it is unlikely that you will ever have all the facts surrounding the issue. Therefore, you will need to rely on those you elected to the Board to make the right decision for each case.

Melissa,

You're correct. The payback would certainly be in addition to regular dues payments. 36 months is a long time for an already delinquent dues payer to catch up without slipping again. Shame on the HOA for letting the delinquency last so long.