late fees on aassessments

Started by CherylC • 8 replies • 3740 views

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CherylC (Florida)
Posts: 10

Posted:

All,

Our HOA is located in Lake County Florida and I need to know where I can go to look up when you can start charging late fees on assessments and what is the limit and is it compounded.

Please help!!

Thanks,
C

JulieS (Georgia)
Posts: 412

Posted:

Our documents are specific on this. The assessment is due 4/1 and considered late on 4/10. We can charge an 18% late fee with interest. You may want to check your documents and then see if FL has any laws regarding this.

RogerB (Colorado)
Posts: 5,067

Posted:

Cheryl, you can charge late fees based on what is defined in your Declaration (and possibly your Bylaws or Rules). The late charge is usually monthly until there is no remaining balance. When interest is charged it must not exceed smaller of the State and Declaration defined limit.

I prefer not to have interest charges as they are difficult to calculate and the amount is not worth the effor for the minor in amount compared to late charges. A $25/month late charge if not received within 10 days after the due date is easy to determine.
However, based on 20%APR, try to calculate the monthly interest charge on the following delinquent account with quarterly assessment of $150 and a $25/month late charge?

Delinquent 1 month $150 assessment + $25 late charge. Interest =
Delinquent 2 months $150 assessment + $50 late charges. Interest =
Delinquent 3 months $300 assessments + $75 late charges. Interest =

Did you get a total of slightly over $11?

CherylC (Florida)
Posts: 10

Posted:

RogerB,

WOW!!! I guess I am not understanding how you are calculating the interest.

Let's just say this: Our assessment fees are $125 due annually on June 1st. We can charge 18% interest and they pay their bill on Aug 1st. How would you calculate?

Thanks,
CherylC

CherylC (Florida)
Posts: 10

Posted:

RogerB,

it specifically states:

Any assessment not paid within 15 days after the due date shall bear interest fro the due date at the maximum rate (18%) allowed by law or a lower rate set by this association per annum. Th eboard of directors if the association may accelerte the remaining installments and declare the entire assessment as to the delquent owner due and payable in full as if the entire amount was originally assessed, with interest accuring on any unpaid amount at the highest rate allowed by law.

How do you interpret this?

Thanks,
C

RogerB (Colorado)
Posts: 5,067

Posted:

Cheryl, the interest on $125 paid August 1 (2 months late) with no late charges and interest at 18%APR (approximately 1.5% per month) is:
Balance due on July 1: $125 x 0.015 = $1.87 interest + $125 = 126.87
Balance due on August 1: $126.87 x 0.015 = $1.90 interest + 126.87 = $128.77

The statement "at the maximum rate (18%) allowed by law" does not state what the interest rate is. Is it 18% APR? I doubt it means 18% per month since this would be over 200% APR.

The statement "accelerte the remaining installments and declare the entire assessment as to the delquent owner due and payable in full as if the entire amount was originally assessed, with interest accuring on any unpaid amount at the highest rate allowed by law." can be interpreted thusly:
Let's assume the annual assesment is $600/year and can be paid monthly and the first payment is due January 1. Then the account become delinquent April 1. That means 3 payments of $50 each were made leaving a balance of $450 for the remainder of the year. The Board can assess the delinquent owner with $450 due on April 1 plus interest at the maximum rate allowed by state statute until the account is paid. If not paid before the next annual assessment the entire year's assessment would be due by January 1 of the next year.

JohnM3 (Florida)
Posts: 288

Posted:

Be carefull in Florida. This state has some real crazy laws. All the powers of the HOAs have been given a sudden death neal by a certain democratic senator from Miami cause a certain law firm we are about to hire piles charges on top of charges on top of charges. They are real sharks. Keep in mind florida has manditory no judical hearings on fines and interest add on's. you as the assoc have to pay for an arbitrator for the hearing. They are licensed by the state of florida. they charge $250.00 per hour. Too boot your lawyer charges 200 to 500 per hour. In 1 hearing your entire treasurery can be wiped out........................

But there is another way out.Hire a law firm that specializes in collections. I have one who took us from 45 per-cent accounts recieveable ( 6 pages over $200 ) down to a total of 8 members over $500 which gives us a accounts recieveable percentage of less than 5%. But we built a system and we constantly fine tune it. We have not lost a case tried in court in the past 8 years.....

So whats more important getting members to pay on time or a lousy 10-50 bucks?

Send me a private e-mail and I will try to give you their name and telephone number.I am not sure if they will go that far north but they are all over Broward County.

Good Luck

AnthonyJ (Georgia)
Posts: 1

Posted:

Does the law firm charge the fees to the owners and collects on your behalf? How much do they charge the owner or is every case different? Do you have their name and number? I live in Atlanta and have looked into hiring an attorney here. I've been told by a friend at another HOA that The Dillon Law Firm is the best in Atlanta, but not sure what the "standard" is. Thanks

CharlesW1 (Georgia)
Posts: 826

Posted:

CherylC,
I have read the previous responses to your post. Unless it states in your by-laws on how much is charged (as far as interest). I think it would be much easier to charge a later fee for every month the assessments were late, appose to compounded interest. It would be much easier to figure out and so much easier to explain to a delinquent homeowner! “It is x amount if late. Even by one day. Rules are the rules. If you establish them you have enforce them.
What JulieS had stated about her by-laws said that delinquent dues or fines is perfect. This is the way I would want mine.

What does your by-laws say about delinquent dues?

Chuck W.

Charles E. Wafer Jr.

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