How can monthly HOA payments be applied

I am wondering if our management company can take someone's monthly dues and instead of putting it 100% toward the communities budget, take apart of it FIRST for a late fee on the account. Not stated in our bylaws. I am new on this site and hope someone may have an answer.

LaraV, are you new as well to the fact that state statutes often have something to say about situations like this? If so, please respond to the following:

Is this a condominium?

What year was your association established?

Check your documents first to see what they say. The management company works at tg5e direction of tge board so if you don't see anything there, ask the board. Also look through tge documents you received at closing - is the HOA'S collection policy buried in the other paperwork? Depending on how long you've lived in the community, there may have been updates.

In my community, we apply delinquent payments to the oldest account first. That is, if you've had two years of delinquencies, your payments will go to year 1 assessments, then costs incurred by the association in collecting the debt.

In my community, we found it easier to total everything owed and then your payments are applied to that, although you receive a breakdown of what made up that total- late fees, collection costs from the management company in monitoring the account, attorney's fees, costs of court filing, liens etc.

We also accelerate delinquent accounts - if you haven't paid within 60 days, it goes to the attorney.
Since we pay every month, acceleration means all assessments for the rest of the year becume due immediately Homeowners must also pay current assessments at the same time do they don't fall further behind.

If you're delinquent, you need to find out RIGHT NOW how payments are applied. Get a copy of your account ledgerto see what was paid and check against your records to ensure you weren't assessed Kate fees by mistake. If you dont want to fall further behind, take a hard look at your budget and ask if you can negotiate a payment plan.

In FL condo law requires that payments on delinquent accounts are applied to late fees and interest before applying to the delinquent assessment. That is good for the association since interest can accrue on late assessments but not fees and interest.

I am confused about why you say the payments don't go toward operations. Doesn't the payment get deposited into the operating checking account? Sure it wouldn't show as assessment revenue on an income statement but it doesn't seem likely that those funds would be restricted as they would be if they were if they were reserve assessments. It may be different for us because by law, we do accrual accounting.

Exactly why I hate this method of applying assessments. On the surface it does give the HOA more power and grit. However it just just a bad way to do business. Leaving everyone with bad taste in their mouths. I get the purpose. It just that a HOA use of fines is so misunderstood and applied in many HOAs. Our HOA never fined. There were stronger ways to enforce than fines. Which when you can correct a violation and send the owner the bill works much better. (More details apply).

Order of application of payments should be stated in your declaration or collections policy.

Many boards don’t even realize what it is or that it exists; attend the next board meeting and bring it up.

I agree with this method. What I have seen, and it is totally wrong, applying to "fines" first when fine can be wrong and/or capricious.

Most declarations are silent on this. Your association’s board should have adopted a late payment policy. In some associations legal has access to the homeowner records and legal action is automatically initiated at a value established by the board.