Late fees for not paying fine?

Lisa,

Your ByLaws might list the power to levy fines and for what. Have you checked them?

This how we handle it:

>>>WHEREAS, Article V, Sec. 5.9 of the XX HOA Bylaws empowers the Board with the power to assess late charges for homeowners who do not pay assessment dues as due to the HOA,

IT IS RESOLVED,

1. Effective 01 April 2008, the current late fee of $15 per quarter is increased to $20 a month, that is, beginning 30/31 days after payment is due. The date will be determined by either a postmark on payments mailed to the PO Box or by actual delivery to one of the Board members.
2. If a household goes 180 days without tendering dues on or before the due date, or is otherwise in arrears, starting 02 January 2008, the matter will be transferred to a 3rd party for collection. Under the Bylaws, this process will cover not only the quarterly dues, amounts in arrears, and any late fees, but also all costs of collection.
3. The Board realizes that there may arise situations (financial setbacks, family illness, etc.) in which action should not be taken, so, by a unanimous vote by the Board, on a month-to-month basis, the Board may delay acting as described in Paragraph 2, though late fees will continue to accumulate.

RESOLVED & ENACTED by the Board this _____ day of ___________, 2008.<<<

This BOD Resolution, as we interpret it, allows for fines for any amount in arrears, including fines for unpaid fines.

But that's just us.

I'd be surprised that somewhere in the fine print, and maybe not so fine, in your governing documents the Board is not given the authority to "collect assessments." Usually, that means at the most severe point - a lien on the property, which would be supported by your local and state laws. Our Bylaws state: Section c: Payment of Assessments: Each Owner shall pay or cause to be paid to the Treasurer of the Association the assessement against the Unit on a timely basis according to the payment schedules established by the Board. Any assessment not paid in a timely manner shall be considered and subject to late charges, interest charges and collection procedures as established by these Bylaws." Further in it states that the "Board may from time to time establish late charges and a rate of interest to be charged on assessments that may thereafter become delinquent. In the absence of another established nonsurious rate, delinquent assessments shall bear interest at the rate of twelve percent (12%) per annum." And then both the CC&R's and the Bylaws specify the legal action for non-compliance.

So, our dues are $300 a year, paid either in full or semi-annually. They are due either in full or half by January 1, with a 30-day grace period. If half are not received by February 1st, a 12% late fine is charged. The second half or all must be paid by June 1st, with the 30-day grace period, with another 12% late fee charged. By July 1st all dues should be paid in full. They get three notices and an opportunity for a hearing, but if there is no response lien action is started.

If you do find that your governing documents truly don't have hidden somewhere in all that legalize a system of collecting unpaid assessments, you have the authority and the responsibility of establishing such a system, and probably without a vote, as most Boards have much leeway in making rules and resolutions in the management of the Association. Good luck.

Dorothy

Our covenants address late fees for dues assessments. It can be a certain percentage of the amount owed and is added to the next invoice as a late fee.
We also have created penalties for non payment of fines levied. We usually give the offending party 14 or 15 days to pay and if not paid by that date, the fine is doubled and doubled again if not paid within that time frame. Then we file a lien against the property.

We did it this way because the cost of filing a lien on a $50.00 fine was $15.00 and there was also travel involved to the clerk's office in another town. We felt it would be more cost effective to wait for a higher amount owed, which would show a pattern of non-payment, versus them being a few days late. We decided this after we filed a lien against a delinquent owner one day and found the payment in the mail that afternoon. Then we also had the expense of removing the lien in addition to what we had just paid to file it!