Late Fees for Late Fees (The Pyramid Scam)

We are an Ohio HOA and our Board has change our late fee policy without an official notice to the community.
The policy now allows them to charge a late fee (every month)if you have not paid for a late fee on a single HOA payment.

Isn't this a pyramid scheme and isn't it ilegal in most states?

I wouldn't call it a late fee on a late fee if the dues/bill was not paid in full....Our docs say that any money sent in goes first to the late fee and interest...so the balance left would be Association dues. This would then accuire interest if not paid.

Tom if you don't pay the late fee for the month owed then you continue to be late until they're paid. In addition if you live in a condo Association in Ohio then the BOD may have to credit them in this fashion:

5311.18 Lien for common expenses.
(A)(1) Unless otherwise provided by the declaration or the bylaws, the unit owners association has a lien upon the estate or interest of the owner in any unit and the appurtenant undivided interest in the common elements for the payment of any of the following expenses that are chargeable against the unit and that remain unpaid for ten days after any portion has become due and payable :

(a) The portion of the common expenses chargeable against the unit;

(b) Interest, administrative late fees, enforcement assessments, and collection costs, attorney’s fees, and paralegal fees the association incurs if authorized by the declaration, the bylaws, or the rules of the unit owners association and if chargeable against the unit.

(2) Unless otherwise provided by the declaration, the bylaws, or the rules of the unit owners association, the association shall credit payments made by a unit owner for the expenses described in divisions (A)(1)(a) and (b) of this section in the following order of priority:

(a) First, to interest owed to the association;

(b) Second, to administrative late fees owed to the association;

(c) Third, to collection costs, attorney’s fees, and paralegal fees incurred by the association;

(d) Fourth, to the principal amounts the unit owner owes to the association for the common expenses or penalty assessments chargeable against the unit.

Though we could do this, and there's nothing wrong with it, we don't charge a late fee if the only remaining delinquency is a previous late fee.

Oops, I meant almost not (all most) but didn't see it until I hit send.

Ellen,
My Florida HOA was very fortunate to have a P.M that was very alert to missing dues because the payments were sent to the management company and were posted by their accounting dept. We had it in the bylaws that the Board had the right to send out late notices. The Board instructed her to send out a reminder letter after 15 days. It usually kept everyone alert as to their payments being late. Not everyone paid attention but most all did.

Oops! I meant to say "a continual assessment delinquency".