late fee date change

Started by GraceH • 10 replies • 1137 views

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GraceH (Virginia)
Posts: 224

Posted:

In our By-Laws under Compliance and default, Section 2 Lien for assessments. (d) Late Charges, it states:

Any assessment levied pursuant to the Declaration or these By-Laws, or any installment thereof, which is not paid within fifteen (15) days after it is due, may at the option of the Board of Directors be subject to a late charge of not less than ten dollars ($10.00) per month for each monthly assessment in arrears or such other amounts as the Board of Directors may fix, and in addition, the Board of Directors may declare the installments which would otherwise be due during the remaining fiscal year immediately due and payable and may take those actions to collect such accelerated amounts as are provided in these By-Laws for the collection of assessments.

My question is, wouldn't this need to be amended to charge a late fee after the 5th day of the month?

DonnaS (Tennessee)
Posts: 5,671

Posted:

Grace,

In my opinion, because this late fee statement is in your Bylaws, in order to change the date for receipt and the amount charged for late fees, it must be thru an amendment voted on by the members. This is a good example of why dates and amounts should never be included in bylaws or CC&Rs . The ability to have the power to charge should be there but never specific amounts.

But, if you read this carefully it says " may " at the option of the Board of Directors be subject to a late charge of not less than ten dollars ($10.00) per month for each monthly assessment in arrears "or such other amounts" as the Board of Directors " may " fix, and in addition, the Board of Directors may declare the installments which would otherwise be due during the remaining fiscal year immediately due and payable and "may" take those actions to collect such accelerated amounts as are provided in these By-Laws for the collection of assessments.

All of these "mays" gives the Board the option to act if they so please.

GraceH (Virginia)
Posts: 224

Posted:

Donna,
Thank you For responding.
I should have worded the question better.

Wouldn't that By-Law need to be amended to change the date the late fee is to be charged on?

I do understand that the amount can be changed however, the part that states: "which is not paid within fifteen (15) days after it is due".

Ours has changed twice through the years and nothing was amended.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Grace, I read these that the board can assess late fees at ANY date for the remaining assessments, after giving 15 days on the FIRST late payment.

So if you were late on the first payment after the 15th day you got a late fee, then the board could accelerate your grace days for the other assessments. In this case, they are giving people just 5 days.

GraceH (Virginia)
Posts: 224

Posted:

Susan,
Thank you for responding.

I had recently come across that section in the By-Laws and was asking the question because through the years, the late fee date has changed from the 15, to the 10th, and last year to the 5th. It is for the whole association, not just an individual that was late.

The way it is now, for everyone is that you pay a late fee if you pay after the 5th of the month. Being that the 15th is clearly the date in the By-Laws, wouldn't that need to be amended?

DonnaS (Tennessee)
Posts: 5,671

Posted:

Grace,

I believe that this part of the statement is ambiguous -- ( in addition, the Board of Directors may declare the installments which would otherwise be due during the remaining fiscal year immediately due and payable and may take those actions to collect such accelerated amounts as are provided in these By-Laws for the collection of assessments. )
and allows the Board leiniancy in it's timeline for collections. We need a lawyer to interpret this tho.

GraceH (Virginia)
Posts: 224

Posted:

Donna,
Thank you for yor responce.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Grace,

First of all, I don't see it stated anywhere in the bylaws you posted that would allow the BOD to assess the lat fee as Susan describes.

Secondly, the bylaws are explicit in stating the assessments are late if not paid by the 15th. The board has no authority to change this unless they are authorized to change the bylaws w/o a vote of the members and this is what they've done through the years. First of all, check the bylaws to see who can amend the bylaws. Then, if the board can amend w/o a vote of the members (which is standard for many HOAs) check to see if this has been done. Of course if the bylaws had been amended the board should have sent the amendment to all the members. Shoulda, woulda, coulda. . .

MaryA1 (Arizona)
Posts: 7,043

Posted:

Donna,
Note that the bylaws says ". . .assessments or any installment thereof. . .", which to me means a regular assessment or a special assessment that is paid in installments. The assessment is late if not paid by the 15th of the month; however the board may declare the installment (of a special assessment) to be due immediately -- with no 15-day grace period. For example, the board may send a notice to all members stating the remainder of the installment shall be due on May 1. If not paid on that date the late fee would be charged immediately. But this only applies to installment payments not regular assessments unless the regular assessments are allowed to be paid in installments.

GraceH (Virginia)
Posts: 224

Posted:

Mary,
Thank you for your response.
The By-Laws state : Except as otherwise permitted by the Condominium Instruments, the prior written approval of two - thirds (2/3) of all institutional holders of First Mortgages will be required for any material amendment to the Declaration or By-Laws of the Unit Owners Association.

I was under the impression that the By-Laws were the Condominium Instruments.

What are the Condominium Instruments?

MaryA1 (Arizona)
Posts: 7,043

Posted:

IMO, the "condo instruments" would be ALL of the gov docs -- articles of inc., bylaws, CCRs, and rules. If your bylaws have a definitions article or exhibit it should be there.

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