Simple Question on Paying Dues

Sorry to bug everyone again with my questions. But is it normal for a management company to charge owners to pay their HOA dues? We are on our third management company in a year. I understand the fee if paying via credit card. That is just about everywhere; however, their is a fee is you also pay with your bank account and a check processing fee if you send in a check. The only way to avoid the fee is to pay in person by driving 800 miles and paying in person with cash at the corporate office. This is the first month and I already don't like them.

Thanks, I thought I was just lucky all these years

It varies.

Some associations pass the cost of printing coupon books on to homeowners who use them. It's not a trivial expense, and if the board is trying to pinch every penny, then this is a good option.

Our association doesn't because our community management company doesn't allow us to print them for some owners and not for others. (According to our manager, this is because the company is "run by a bunch of old fuddy-duddies who cling to the old ways". Her words, not mine.) Once the management company gets with these newfangled notions, we too will only print coupon books only for owners who want them. We may or may not charge for them.

(Personally, I have no clue why anyone wants to use paper checks. ACH Transfers and banks' bill payment services are often free to the user, and you don't have to worry about forgetting to pay.)

I know the management company is charging the HOA to manage us. It is a line item on the budget. This was thru the online portal. I expected a fee to pay via Credit Card, but when I went to the option to pay via bank account, there is a 3% processing fee for that. I look to see how to pay via check and there is a $5 for that. The only free way is to pay in cash via the corporate office which is in Northern California and we are in Southern California.

It is being labeled as a processing fee.

We are paying the management company $75k

In Ohio, the fees for a small court action are rather in expensive. If an HOA was charging for payment by check, I wwould be inclined to sue both the HOA and the MC amd let the court figure it out.

It doesn’t make any difference if it is new or not, or whether to board approved the charge in the management agreement. Can the board charge / authorize a service fee for the most common form of payment. I think not.

Civil Code § 5650. Debt of Owner; Late Charges and Interest

(a) A regular or special assessment and any late charges, reasonable fees and costs of collection, reasonable attorney’s fees, if any, and interest, if any, as determined in accordance with subdivision (b), shall be a debt of the owner of the separate interest at the time the assessment or other sums are levied.

(b) Regular and special assessments levied pursuant to the governing documents are delinquent 15 days after they become due, unless the declaration provides a longer time period, in which case the longer time period shall apply. If an assessment is delinquent, the association may recover all of the following:

(1) Reasonable costs incurred in collecting the delinquent assessment, including reasonable attorney’s fees.

(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.

(3) Interest on all sums imposed in accordance with this section, including the delinquent assessments, reasonable fees and costs of collection, and reasonable attorney’s fees, at an annual interest rate not to exceed 12 percent, commencing 30 days after the assessment becomes due, unless the declaration specifies the recovery of interest at a rate of a lesser amount, in which case the lesser rate of interest shall apply.
(c) Associations are hereby exempted from interest-rate limitations imposed by Article XV of the California Constitution, subject to the limitations of this section.

(Added by Stats. 2012, Ch. 180, Sec. 2. Effective January 1, 2013. Operative January 1, 2014, by Sec. 3 of Ch. 180.)

Sorry to say, but it is getting more common to charge a fee for any payment other then automatic withdrawal. Especially more so when paying with a paper check or credit card.

And is that fee allowed in their contract?

I don't think this would be covered under 1770 because it applies to "the sale or lease of goods or services." I had to change my rental rates because of the new law but I doubt it could be applied to the current situation.

Checks are legal tender. Unless the payment is late there is no basis to charge a person a fee for using legal tender.

Every management company we had we were paying into their bank. For the third management company in a year. That was brought up during the last meeting. According to the board, they were fired because they didn't communicate enough.

That is a 3% fee for that.

Just as an fyi- our management company does not charge for each check, but the servicing company they use for credit charges $25, which I feel is abhorrent. Any else have to pay such a high fee for paying by credit card?

I don't think our management company charges that much, but I don't think anyone pays that way. We pay by check/money order, a few drop it off at the office (which is very rare today) or they do direct deposit by setting that up with the property manager or their own bank.

Unless you're paying off your credit card balance every month to avoid interest rates, I wouldn't use it to pay assessments, regardless of whether you pay every month, quarterly or annually. At my bank, you can also pay by phone, although there's a service charge. I'm able to skip that because my paycheck is direct deposited and as long as you keep a minimum balance or higher, there aren't any charges on your account, other than returned check fees. Some banks even drop those if you make the check good within 24 hours or so.

You may need to start shopping around for another bank as well as take a good look at your account statements to see if there are any fees you can avoid by changing your behavior. As for HOAS, they might also consider looking for other banks and make low fees (preferably none) as one of the deciding factors. That could also include the property management company- ask if you can use your own bank and if not, what is a prospective company willing to do to keep your business?

And if you can't avoid fees, you might need to make that a part of your operating costs and adjust your budgets and assessments accordingly. If homeowners have to pay anyway, the least the association could do is to see that the service is charged only once so 0eople aren't paying tge management company AND their own bank.