Member in good standing with a late fee of $4.00 on the books

Started by KellyT • 8 replies • 1655 views

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KellyT (Ga)
Posts: 25

Posted:

We have several homeowners who owe $4.00 in late fees. Our management company says they won't collect on it and will just tack it on to their next years annual dues. We are about to have our annual meeting and of course need a list of members in order to determine a quorum. Are the homeowners who owe the $4.00 late fee still members? They may even be unaware they still owe this money and shouldn't they at least be contacted?

In my opinion, I say they are not members in good standing, since they still owe the HOA money, even if it is only $4.00. I think to be fair we can't just let it go. I also don't understand why our management company, hired by us, won't at least contact the homeowners to make them aware they still have an amount due on their account. What are some of your thoughts?

Cheers,

Kelly

FredS7 (Arizona)
Posts: 927

Posted:

This is really nitpicking. The reason the management company doesn't want to do it is because it probably costs more than the amount owed to bill them.

Can the board vote a motion that owners owing less than $5 are deemed to be current?

GlenL (Ohio)
Posts: 5,491

Posted:

The Board doesn't have the power to forgive assessments, it DOES have the power to forgive late fees. Forgive and move on, it will cost more to try to collect $4.00 than it is worth.

Studies show that 5 out of 4 people have problems with fractions

KellyT (Ga)
Posts: 25

Posted:

Good point. Thank you.

DaveD3 (Michigan)
Posts: 796

Posted:

Quote:

Posted By GlenL on 11/19/2014 10:59 AM
The Board doesn't have the power to forgive assessments, it DOES have the power to forgive late fees. Forgive and move on, it will cost more to try to collect $4.00 than it is worth.

Saying that owners owing less than $XXX are still members in good standing and may cast votes, isn't the same as forgiving the debt.

EmmaH1
Posts: 674

Posted:

Why don't you just send out an email notice to the people that owe the late fee to remind them to bring the $4 with them when they show up to vote and see if you can collect most of that on the night of the meeting? (I'm sure you'd get some) as for the rest the most sensible thing seems to be just tack it on to next years dues like the MC said. I mean honestly, really think about it, $4.00?

EmmaH1
Posts: 674

Posted:

If some members forget or don't have the $4.00 on hand or had sent a proxy in then just wait till next year. It may be "technically" correct that they are not in good standing but would be ridiculous and may cause resentment within you community. HOA's already have bad enough reputation for being silly at times and not using sensibility at times. No one should be denied a vote on their own property matters because of $4.00 period.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Most of our members never had a "0" balance on their accounts. It's almost impossible in older communities. Plus this being a "late charge" is not very well enforceable. It's NOT a "Dues balance" because late charges work more like fines.

I say that it's hard to have a "0" balance is due to many factors. You have to consider how the charges are tacked on and when. Let's say your not late till the 15th. You send in your payment on the 15th and dated your check as such. Well the PM or accountant is not going to see that check for a day or two. Then it still has to process through the bank. It will then make someone look "late" when they are not. However, it may have a fee tacked on then that will roll over with the account. The PM may try to attach a "service charge" for checks arriving at the last minute and adjusting the time line in the records. Who knows for sure with different accounting practices in play.

Our biggest reason is that the bill goes to the address of the house of which a person is an owner. If that person sells their home in the middle of the month or anytime during the month, the dues should be prorated to the new buyer and seller. There is a time issue of when this occurs. It depends on each sell. It could be the seller agrees to pay the full amount or the buyer. They may agree to prorate it. Which could mean the seller stiffing the HOA the prorated amount. Which that amount will then stick onto the account for awhile. New buyer not responsible for the former owner's debts. Former owner is no longer a member... Collecting against a non-member gets tricky after that.

I would change it to say that "good standing" means all dues are up to date but not include late fees. Special Assessments owed is not good standing either. A few dollars due to clerical issues is enough to be ignored.

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

Kelly,

Part of the issue may be the lack of a policy on assessments.

Our policy states when late charges will post and that any payments received after that date will be applied first to charges then to assessments. It also states that voting rights are suspended if assessments are not paid in full and will immediately be restored upon bringing the account current.

Therefore, based on my Associations policy being applied to your situation, there would be no unpaid late charges as the payment would have paid those. The balance due would be an assessment. Behind in paying assessments suspend voting privileges.

If you have no policy or your policy is silent on those issues, you may want to consider updating your policy.

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