MikeS1
Posts: 668
Posts: 668
Posted:
Our quarterly assessments is currently $252. What's reasonable and customary out there today in terms of late fee charges? How about some feedback?
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What's a reasonable Late Fee Charge?
Started by MikeS1 • 14 replies • 4863 views
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DaneC (California)
Posts: 210
Posts: 210
Posted:
California Civil Code
1366.(e).(2) A late charge not exceeding 10 percent of the delinquent
assessment or ten dollars ($10), whichever is greater, unless the
declaration specifies a late charge in a smaller amount, in which
case any late charge imposed shall not exceed the amount specified in
the declaration.
1366.(e).(2) A late charge not exceeding 10 percent of the delinquent
assessment or ten dollars ($10), whichever is greater, unless the
declaration specifies a late charge in a smaller amount, in which
case any late charge imposed shall not exceed the amount specified in
the declaration.
GloriaM (North Carolina)
Posts: 829
Posts: 829
Posted:
In NC the Planned Community Act allows for $20.00 per month on any late dues.
MicheleD (Kentucky)
Posts: 4,491
Posts: 4,491
Posted:
Our By-laws and CC&Rs specify our late fee is 50%.
So for $150 assessment, late fee is $75.
So for $150 assessment, late fee is $75.
MikeS1
Posts: 668
Posts: 668
Posted:
Zow! Thanks for the info Folks.
NancyD1 (Florida)
Posts: 447
Posts: 447
Posted:
Quote:
Posted By MicheleD on 10/16/2007 2:01 PM
Our By-laws and CC&Rs specify our late fee is 50%.
So for $150 assessment, late fee is $75.
Our By-laws and CC&Rs specify our late fee is 50%.
So for $150 assessment, late fee is $75.
Michelle,
I would check your states usury limits. There are only two states that can charge 45%. There are no states than can charge 50%. If you charge a savvy homeowner they can make a big stink about this. The following quote:
Many state's laws provide that you cannot lend money at an interest rate
in excess of a certain statutory maximum. This is a "usury limit."
Unless Otherwise Stated, The Rates Are Simple, Not Compound Interest.
Further We Are Stating The **Present** Limits, the ones applicable at
the time that this research was completed. Many states have had lower
limits in the past.Further, in most states a late charge or other fee
exacted from someone who owes another money is also counted as interest
NancyD1 (Florida)
Posts: 447
Posts: 447
Posted:
Florida just enacted $25. or 5%, whichever is higher.
SidneyP (Florida)
Posts: 302
Posts: 302
Posted:
Nancy, can you please direct me to this written statement....We have never charged a late fee but need to impliment one now as we have 14 delinquent account this go around....thanks
RogerB (Colorado)
Posts: 5,067
Posts: 5,067
Posted:
We suggest from $10 to $25/month depending on the severity of the delinquency problem.
NancyD1 (Florida)
Posts: 447
Posts: 447
Posted:
Quote:
Posted By SidneyP on 10/17/2007 8:50 AM
Nancy, can you please direct me to this written statement....We have never charged a late fee but need to impliment one now as we have 14 delinquent account this go around....thanks
Nancy, can you please direct me to this written statement....We have never charged a late fee but need to impliment one now as we have 14 delinquent account this go around....thanks
Sidney,
Sorry, I have Internet access to legal documents. Each state has usury laws though. IMO you should always charge a late fee. A percentage of the maintenance fee. It should be uniform so that you are not charging one homeowner 5% and another 10%. We have quarterly dues that are due the first of the quarter, late after the 10th. Our 5% late fee is automatically calculated by our accounting program on the 11th of the month. We also do not accept a check after the 11th if you do not pay the late fee also. This cuts down on the delinquencies.
NancyD1 (Florida)
Posts: 447
Posts: 447
Posted:
Quote:
Posted By SidneyP on 10/17/2007 8:50 AM
Nancy, can you please direct me to this written statement....We have never charged a late fee but need to impliment one now as we have 14 delinquent account this go around....thanks
Nancy, can you please direct me to this written statement....We have never charged a late fee but need to impliment one now as we have 14 delinquent account this go around....thanks
Sidney,
Sorry, I have Internet access to legal documents. Each state has usury laws though. IMO you should always charge a late fee. A percentage of the maintenance fee. It should be uniform so that you are not charging one homeowner 5% and another 10%. We have quarterly dues that are due the first of the quarter, late after the 10th. Our 5% late fee is automatically calculated by our accounting program on the 11th of the month. We also do not accept a check after the 11th if you do not pay the late fee also. This cuts down on the delinquencies.
SidneyP (Florida)
Posts: 302
Posts: 302
Posted:
Nancy/Joe/Roger/or anyone......We collect $409. semi annually (Jan/July) This late fee is a monthly charge right plus interest? (that's what banks and credit cards do) You say you won't except the check unless they pay the added fees at the same time...So if we have a HO that didn't pay on Jan 1st and come July still doesn't pay, I just continue to charge both fees until they pay. So they owe us $818 plus late fees and interest, so if they come in Aug. and offer me $600, do I deduct the $600. dollars and continue to charge them late fee and interest on the balance. With 14 delinquencies out of 77 units, we have to do something.
Our first MC, got the liens themselves at a cost of $10.00 each. It did no good, they still owe. But the second MC had their attorney do it at the cost to the HOA of $325. each lien. This killed us, we have no money to even maintain our common area. I know it is added to the HO's account but that doesn't help us survive in the mean time. The Board has now fired this MC and hired another one starting Oct.15th.....Does this mean all the work and money the attorney got is down the drain because this MC has their own attorney they use or does the old attorney continue to try and collect for us?
Our first MC, got the liens themselves at a cost of $10.00 each. It did no good, they still owe. But the second MC had their attorney do it at the cost to the HOA of $325. each lien. This killed us, we have no money to even maintain our common area. I know it is added to the HO's account but that doesn't help us survive in the mean time. The Board has now fired this MC and hired another one starting Oct.15th.....Does this mean all the work and money the attorney got is down the drain because this MC has their own attorney they use or does the old attorney continue to try and collect for us?
GloriaM (North Carolina)
Posts: 829
Posts: 829
Posted:
Unless you live in a state that has a Planned Community Act, you better follow the Act.
DonN (Michigan)
Posts: 357
Posts: 357
Posted:
Many of the problems posted on HOA Talk can be answered by the governing documents and the law. Most likely, the fees for nonpayment are limited by what is specifically stated in the CC&Rs. This provides protection for the owner. Also state and federal laws provide protection as has been included in the replies. While not decided yet by a pattern of case law,, it appears that the Debt Collection Acts may also apply.
Don Nordeen
Governance of Property Owners Associations
Governance of Property Owners Associations
NancyD1 (Florida)
Posts: 447
Posts: 447
Posted:
Sidney,
IMO you are correct and you would apply the $600 to the oldest balance. The interest and late fees will still apply to the balance. If you follow these rules you will be in compliance with any collection law.
This is what we do: maintenance fees late after 10 day grace, collection letter with late fee to homeowner on 11th day. 45 days later if no money, lawyer. Lawyer sends collection letter with lien notice, and gives homeowner 20 days to pay collection fee, maintenance fee, and late fee. If not paid after 20 days he files a lien. Then a 60 day period, no check, foreclosure.
We have 389 homes. Two years ago it was common for us to have at least 10-15% late each quarter. Our attorney was not very busy because the previous BOD did not believe in using a lawyer to collect. When I went on the BOD in May of 2006 as Treasurer I walked in on $13,000 uncollected maintenance fees. I immediately interviewed attorneys and chose one that could handle our collections with no charge to the HOA up to the foreclosure process. The homeowner would bear all fees as part of the collections. We followed the above procedures for the collections. In July 2007 the collection rate was down to 6% for the late letter. 3 homeowners went to the attorney for collections. On September 20th all were paid. We have never in 12 years had every homeowner paid. One thing that we did notice when we sent out late notices, there were very few repeat offenders.
I have found that if the HOA tries to collect the fees, they are successful to a point. Homeowners believe that because you are a neighbor you will forgive and they take advantage. I was receiving calls from many homeowners before the attorney collecting, now I can't remember when I had a call. When you divorce yourself from collections the homeowner cannot impose themselves on you because you are not collecting, the attorney is.
Many may feel that this is a cold procedure but the HOA is a business and has to be run as one.
IMO you are correct and you would apply the $600 to the oldest balance. The interest and late fees will still apply to the balance. If you follow these rules you will be in compliance with any collection law.
This is what we do: maintenance fees late after 10 day grace, collection letter with late fee to homeowner on 11th day. 45 days later if no money, lawyer. Lawyer sends collection letter with lien notice, and gives homeowner 20 days to pay collection fee, maintenance fee, and late fee. If not paid after 20 days he files a lien. Then a 60 day period, no check, foreclosure.
We have 389 homes. Two years ago it was common for us to have at least 10-15% late each quarter. Our attorney was not very busy because the previous BOD did not believe in using a lawyer to collect. When I went on the BOD in May of 2006 as Treasurer I walked in on $13,000 uncollected maintenance fees. I immediately interviewed attorneys and chose one that could handle our collections with no charge to the HOA up to the foreclosure process. The homeowner would bear all fees as part of the collections. We followed the above procedures for the collections. In July 2007 the collection rate was down to 6% for the late letter. 3 homeowners went to the attorney for collections. On September 20th all were paid. We have never in 12 years had every homeowner paid. One thing that we did notice when we sent out late notices, there were very few repeat offenders.
I have found that if the HOA tries to collect the fees, they are successful to a point. Homeowners believe that because you are a neighbor you will forgive and they take advantage. I was receiving calls from many homeowners before the attorney collecting, now I can't remember when I had a call. When you divorce yourself from collections the homeowner cannot impose themselves on you because you are not collecting, the attorney is.
Many may feel that this is a cold procedure but the HOA is a business and has to be run as one.
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