How to calculate or determine HOA late fees

Started by FayW • 7 replies • 803 views

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FayW (Virginia)
Posts: 1

Posted:

Hello everyone:
My name is Fay Winston and Im the president of my HOA(Avon Estates) in Hampton, Va. Having issues with residents not paying their annual dues and wondering how to calculate late fees thats not specified in bylaws.

CathyA3 (Ohio)
Posts: 6,299

Posted:

Check in your Declaration (the CC&Rs) and look for a section on Assessments. That's where things are spelled out for my association. If you find nothing, check for state statutes governing HOAs or COAs, as appropriate (actually, check these anyway just in case there is something that would override your CC&Rs).

GenoS (Florida)
Posts: 4,276

Posted:

Fay, welcome. Please read Out Posting Rules before contributing any further. They're behind the big yellow smiley face up top.

TimB4 (Tennessee)
Posts: 21,059

Posted:

There is only three rules:

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TimB4 (Tennessee)
Posts: 21,059

Posted:

Hi Fay,

If the covenants and bylaws are silent on late fees, one should follow the applicable statutes:

Virginia Property Owners' Association Act if an HOA

Virginia Condominium Act if in a COA

Per the Property Owner's Association Act:

§ 55-513.3. Assessments; late fees

Except to the extent that the declaration or any rules or regulations promulgated pursuant thereto provides otherwise, the board may impose a late fee for, not to exceed the penalty provided in § 58.1-3915, any assessment or installment thereof that is not paid within 60 days of the due date for payment of such assessment.

§ 58.1-3915. Penalty for failure to pay taxes by December 5 (referenced in the above passage)

Except as otherwise provided by ordinance under § 58.1-3916, any person failing to pay any county, town and city levies on or before December 5 shall incur a penalty thereon of five percent, which shall be added to the amount of taxes or levies due from such taxpayer, and which, when collected by the treasurer, shall be accounted for in his settlements.

Laymans' Translation:

After 60 days, a 5% penalty can be incurred (unless your CC&Rs or Bylaws say otherwise)

SteveM9 (Massachusetts)
Posts: 3,699

Posted:

Late fees are useless because they are too low per state law. Simply start foreclosure. That gets people's attention and they start paying on time.

StephanieD7 (Texas)
Posts: 10

Posted:

Our Association does not address late fees in the bylaws or CCRs and our attorney advised that we couldn't assess them. We've had a lot of issues with collections and so last year engaged an attorney to pursue. It was very, very expensive but we've recouped most of the expense already and anticipate collecting it all in the next two years. I will warn that homeowners have complained about how much we've spent on collections not realizing that we have more money now than we would have if we hadn't shelled out the cash up front for attorney's fees (our bylaws allow collection of these from the homeowner when they eventually pay.) If you go the attorney route I recommend ensuring you and the rest of the board are aware of how much you're going to pay out of pocket - don't want to start the process and then stop it when the bills get high. My understanding is that you don't pursue on schedule and collect attorney's fees might not be collectible later if the account sits idle for years after starting the process.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

My experience on collecting late dues is nothing happens until the threat of legal action comes for an attorney.

Our dues are $70 per month, payable monthly. We have a 3 step past due process:

1. When 30 days late our PM writes a letter that says if not caught up in 30 days, the matter will be turned over to an attorney for collection. If not collected, we notify our attorney.

2. The attorney writes a letter saying if not caught up within 30 days, they will file a lien and begin foreclosure. The attorney charge the HOA $80.00 to write this letter and does nothing more at this point. If still not collected or a BOD approved payment plan has not been put in place, we notify the attorney.

3. The attorney notifies them a lien has been filed and foreclosure is commencing. Additionally there is now a $400.00 attorney fee added to the amount owed. The HOA is now out of the loop. Any payments must be between the attorney and the owner. The attorney then forwards the payments to us less his $400.00.

At Step 3, the attorney has said foreclosure has commenced but nothing more specific. The attorney will only actually go through with foreclosure until the HOA ask him to and we have not had to yet.

Our attorney is one of the largest HOA attorney practices in SC. They have a department that deals with late dues collection.

Our Covenants allow for late charges but I am to lazy to look them up. The PM does begin adding them when 30 days overdue.

In SC we cannot foreclose based on fines. Can only foreclose based on unpaid dues.

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