Illinois - When is HOA Late fee considered usury?

So I did as much searching as I could on trying to find out whether an HOA can charge unlimited late charges and I found a great post on here from 2006 from LisaS.

Here is my question: I own a rental property where the HOA is $100 a year. I apparently missed one year's payment (not even sure if I got an invoice to be honest) and never received any late/collection notices until the following year's invoice. They wanted to charge me $365 for the late fee - on a $100 association fee.

They incurred no additional costs as they don't send out late notices EVER. They just wait til next year's bill.

In LisaS' post, she stated that in illinois, associations were not allowed to charge late penalties other than for incurred costs (i.e. additional mailings, collections, etc). But they were allowed to charge interest. But that interest could not be usury (which in illinois is 18% I believe).

So they are effectively charging me 365% as an interest rate. I am trying to find specific case law that I can give to my attorney to contest this but nothing out there seems to even remotely address what associations can charge for a late fee.

Anyone have any specific things they can quote that could be used for court.

I actually offered the HOA guy (its just one guy that runs the thing) to pay $100 for a late fee. I told
him this was 100% interest on the association dues. He wouldn't budge.

Now I actually think its worth taking to court because as a landlord, I'm tired of these crazy
villages, associations, etc, who think their power is absolute just because noone is willing
to stand up to them. But I really would like to know where I can find some case law
based on LisaS' post so that I have something specific to reference.

Any help would be greatly appreciated.

thanks

Mike

Not sure about IL but when we send a late dues payer (after 180 days and several warning letters) to our attorney, they add $350 for "legsal costs". Perfectly legal here. We are limited in what late fees we can charge (18% per year) but we can charge "costs".

Mike,

You can always contact the Board and ask that some or all of the late charges be waived.
If you have a good reason, then they may very well waive some or all of the charges, I know we do.

Your issue is that the Assessment is a year late.
Not receiving an invoice is not a good reason, especially if you had been paying assessments in previous years.

OP forgot to pay a year's assessment. Now he wants to blame somebody else for the consequences of his own inaction. Too busy trying to remember who's late on their rent to worry about who he owes money to himself.

By all means get a breakdown of the costs and, if not valid, demand an accounting for the charges. Otherwise just pay the bill. It's probably a third of one month's rent on the property. Maybe it will be a lesson to help you remember not to forget to pay it again next year.

I would skip trying to find the answer yourself and go directly to an attorney. Late fees are so common that any HOA attorney in Illinois should be able to answer your question off the top of their head. I would also speak to your board. Anyone with a brain can see that the late fee is unreasonable. Depending on your governing documents, they may be able to change the policy.

Lets see, a 10% late fee per month would equal $110 + 100 assessment previous year + 100 assessment this year = $310.

If calculated differently, a 10% late fee per month could be more.
Feb $10 (10% of 100)
Mar $11 (10% of 110)
Apr $12.10 (10% of 121)
May $13.31 (10% of 133.10)
Jun $14.64 (10% of 146.41)
Jul $ 16.11 (10% of 161.05)
etc.

And our documents set it at 18% per annum so you have to break it down to 1.5% per month. You do not charge 18% each month.

The initiating event here was the owner's failure to make good on his obligation to the association of which he is a member. It has been hashed out here before and elsewhere that while an association may provide additional statements of assessments and charges, the lack of those does does not relieve the owner of his obligation to pay assessments.

I guess in the land of the slumlord that's crazy talk and "the dog ate my invoice" is a reasonable defense against paying one's bills. You sign the contract for sale, you accept that you're going to have to pay assessments, and when they ding you for not paying on time, you look for someone else to blame. What kind of world would we live in if people thought, "Oh gee! Look at that, my bad. Guess I'd better pay more attention to that next year." The horror.

Some have characterized the OP as a criminal and they got what was coming to them.

What if the person had been there for twenty years and this is the only time a payment was missed. This was one annual dues and maybe no notices were ever sent out and one person took it upon themselves, out of spite, to punish this individual. Sorry, sometimes s**t happens and something is forgotten. I'm sure it's never happened to the ones who criticized.

As a MC I look at the bigger picture and I look at history.