HOA monthly dues late fees

1) In the state of California, can unpaid late fees for HOA dues be used as a lien against one's property?

2) If a monthly dues late fee has been assessed and the homeowner then pays two months of dues, is the default to (A) apply the funds to the two months of dues first and leave the late fees on the books or (B) apply the funds to the late fees first and the rest to the monthly dues - leaving the dues less than fully paid for the second month.

Did you ask your property manager or check your collection policy? I seem to recall you're on the board, so you should already know this.

In checking Google, one website read" Pursuant to California law, if an assessment (regular monthly dues and special assessments) are not paid within 15 days of the due date, a delinquency occurs. Once delinquent, the homeowners' association (HOA) may impose a "late fee" of $10.00 or 10%, whichever is greater, unless the CC&Rs specify a lesser amount. If an assessment becomes delinquent for over 30 days, in addition to the late fee the HOA may assess interest up to 12% per year on the unpaid balance owed by the delinquent homeowner. If the homeowner still fails to pay the delinquent assessments, the HOA can seek a personal judgment and/or lien the delnquent homeowner's property for the amounts owed plus attorneys fees and costs. And most important, if the assessed debt reaches $1,800 or more or becomes more than one year old (even if only $100), the homeowners association (HOA) can initiate foreclosure proceedings."

You don't say how much your assessments are, but in looking at this, I would think the costs to place a lien would far exceed the late fee, so I don't see the HOA doing this. When liens are applied a substantial amount of money should be involved. They shouldn't be used to be vindictive (although some board members might try that - and they usually find out the hard way that's not the way it works).

On the other hand, you didn't say if your association accelerates unpaid assessments for the rest of the year if the account goes delinquent. In my community, we turn the account over to the attorney if two months go by without payment, and at that point the assessments are accelerated. So a lien shouldn't be obtained for two late fees totaling $50.

We want to be sure the management company is doing the right thing. It is my understanding that the default is to apply the past due to unpaid or underpaid dues first and late fees second. However, one of our homeowners is stating this is not how the management company is doing it - in other words, they apply to the late fees first and unpaid dues second. The homeowner also expressed concern that the late fees - by themselves - could become a lien against the property. What should we tell her (it is kind of a put off to refer her to an attorney)? The answer is not 100% clear at Davis-Stirling.

Our association attorney charges $40/e-mail sent if the e-mail is 3 lines or less. Longer than 3 lines cost more.

So a simple "what is the status of the delinquent account" with a response of "heard nothing from the homeowner" costs $40.

Paul, I read Max's citation and strongly recommend your Board ensure the management company is following the statute regarding the sequence for application of payments to past due amounts owed the Association.

It is not up to the management company to decide how the payment is applied; the California Civil Code citation is as clear as it can be.

Not that it applies to you, we must follow almost the same language in Texas.

If an extra payment is sent, then, yes, the extra payments can be applied to any additional outstanding debt. If there is a credit, that will be applied to dues for the following month.

As a management company, I also have the authority to waive the late fee.

Ours used to do this but didn't have official authority. For a while, we let it slide because the owners usually had an otherwise clean record and it never happened again, but when the delinquencies started getting out of hand in a big way, we said nope, this will have to be a board decision.

Now, if the manager feels strongly about a waiver, she'll bring that to the board for consideration. Before I stepped down, we had one who was thisclose to be referred to the attorney. We decided to do the waiver, but had the manager send a letter stating there would be no waivers in the future. I don't know if the board does today, but our accounts receivables have come down quite nicely, so I doubt it.