How to calculate late fees in North Carolina

My HOA was created by a developer and turned over to the residents this past March. I am the first treasurer, and we are not using a management company. Would anyone like to help me figure out how to calculate late fees, please? First I'll post the NC law and relevant CC&R language.

North Carolina law (G.S. 47F-3-102 #11):
the association may "Impose reasonable charges for late payment of assessments, not to exceed the greater of twenty dollars ($20.00) per month or ten percent (10%) of any assessment installment unpaid and, after notice and an opportunity to be heard, suspend privileges or services provided by the association (except rights of access to lots) during any period that assessments or other amounts due and owing to the association remain unpaid for a period of 30 days or longer."

The HOA's CC&Rs:
"In the event any Assessments or any portion thereof are not paid when due the same shall be subject to a late charge in an amount determined and uniformly applied by the Board from time to time and the Owner of such Lot or Dwelling shall be deemed in default herewith. In the event any Assessments or any portion thereof are not paid within thirty (30) days after the due date of the same, then the unpaid portion of the Assessment shall accrue simple interest at the lesser of eighteen percent (18%) per annum or the highest rate which may be charged to said Owner by law (the "Applicable Rate") from and after the thirtieth (30) day from the due date until the same is paid in full. In the event the Association employs an attorney or otherwise takes any legal action in attempting to collect any amounts due from any Owner, such Owner agrees to pay all attorney's fees, court costs, and all other expenses paid or incurred by the Association in attempting to collect any unpaid Assessments."

The NC law talks about the greater of $20 per month or 10% of an unpaid amount. Am I supposed to calculate this once a month? The CC&Rs talk about 18% per annum. Should that be calculated monthly too? In other words, if someone owes $170, and they are 34 days late, do I charge them $170 * (.18 / 365 * 4) for 4 days after the 30 and a different amount if they paid after 7 days, or do they get hit with a month's worth whether they pay it 1 day or 30 days late? $170 * (.18 / 12)

While I'm asking, how do you handle due dates? Is it reasonable to say the monthly amount is due on the 1st of each month and that late fees begin after 30 days?

Thanks in advance!

Our governing documents caps "interest on late payments" at 12%. It does not mention late fees charged. We charge a flat late fee and don't call it interest. We may be in the wrong. Another issue for research on the list.

So if someone owes $75 and they pay on the 5th of the month, are they charged an extra $20?

Let us not forget that any collection expenses can also be added to unpaid dues amount. We had one late payer who the actual amount late was of unpaid sues was $1,800.00 (3 years) but with late payments, interest fees, collection costs, lawyer costs, they ended up owing over $5,000.00.

I don't give a shit if I'm liked or not. I'm always going to try and set the monthly fees and the reserve fund based on supporting data that backs it up.

I'm trying to figure out what the rules are in the first place. It sounds like my CCRs specify that if the unpaid dues are $170, and they are late 1 month, all I can charge is 1 month's worth of interest at 18% which comes to a whopping $2.55.

I'm the Treasurer but not a lawyer, so I'm trying to get this right.

You may need to speak with an attorney. None of us here have access to your governing docs.

Many governing documents will states assessments are due on the 1st and become delinquent after the 15th. On the 16th, a late fee can be assessed. Your mortgage note will have similar language. State law may or may not have higher authority than your governing docs. So in short, you need to know what is state law and does it conflict with your docs. What is the max allowed for late fees, what is the max allowed for interest, What are your priority of payments. When do assessments first become delinquent.

If you have a PM, they should know this stuff. If you are self managed, get professional help, this is not an area you want to screw up.

What is the state max, as that will always take precedence?

One is late fee, the other is interest rate.

Add to this that we have very clear guidance from our lawyer and other sources that the order of precedence is Fed / State / CCRs / Bylaws / Rules and Regs and that the only time regs at a lower level apply is where they don't conflict with a higher level or where the higher level is silent on the subject.