Late fees

Started by SandyW1 • 7 replies • 1161 views

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SandyW1 (California)
Posts: 12

Posted:

I have 2 questions. I am the secretary on our board of a complex of 72 townhome. My question is apparently we hired and signed a contract with a management company that state all $25.00 late fees will go directly to the mamangement company. Shame on us for signing that contract, but is that normal?
Also, the presedent is our laison with the management company, and I understand that process, BUT even when our electrican is asked to do a small job that may involve $20.00 or $100.00 isn't it required that all board members vote on that expediture?

Thanks
confused in California

GlenL (Ohio)
Posts: 5,491

Posted:

In our association the late fee comes to us. Our MC has a pre set limit on what they can spend on repairs without BOD approval. If they came out to estimate every repair or light change then had to wait for BOD approval before coming back to do the repair, nothing would get done in a timely manor.

Studies show that 5 out of 4 people have problems with fractions

DaneC (California)
Posts: 210

Posted:

Interesting problem. Obviously therefore, this "fee income" is NOT in your budget - so what if you simply amend your rules to waive this fee?

SandyW1 (California)
Posts: 12

Posted:

It is stated in our CC&R that a 10% of the dues will apply as a late fee, but nobody read the fine print in the contract of the managment company that all late fees will go to them due to processing cost. That is C--p!!!
Their job is to process all income. I'm fed up. Thanks for your input.

BrianB (California)
Posts: 2,820

Posted:

caveat emptor

RogerB (Colorado)
Posts: 5,067

Posted:

Sandy, we chage on an hourly basis for collecting delinquent accunts. This is one of those items which a management company can not predict in advance. Our collection cost runs $10.00/notice unless garnishment or foreclosure are necessary. In which case an attorney is required. We also charge to coordinate with the attorney if necessary. When an attorneys' office is involved in collection of delinquent assessments the costs become significantly greater.

KathyS (California)
Posts: 145

Posted:

Things could be worse. Our contract allows the MC to collect the late fees from the association and when the homeowner pays the late fee, THEN the MC pays us back.

GeraldT4
Posts: 1,022

Posted:

SandyW1 - Your budget should be balanced separate from any late fee that is collected. Therefore, what I would be more interested in is what the management company will do for the $25.00. I would also move to increase the late fee to offset the loss in earned interest from not getting the initial maintenance payment and stipulate that the offset go back into the budget, rather than towards management.

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