AMENDING ASSESSMENTS IN DC&Rs

I need help in understanding if the board has the right to amend late fees without recording the new fees with the county that the HOA resides in and notifying all its members.

Our DC&Rs state; “All assessments shall be due and payable in the manner and at the time specified by the Board of Directors. Any assessment not paid within 30 days after the due date shall bear interest from the due date until paid at the rate of 13% per annum, and the Association shall be entitled to collect a late fee of $10.00 for each assessment payment or installment. Said late fee may be amended in amount, from time to time, by the affirmative vote of two-thirds (2/3) of the full Board of Directors”.

Our board has stated that in the above DC&R assessment article, the last sentence is saying they can change the amount and the word “amended” means “to improve or correct “. Therefore, when the late fees were amended, the board says it was recorded in the minutes and does not have to be officially recorded with the county nor do they have to notify the members, it is now on the billing statement.
We pay our assessments quarterly. Some members paid their assessments 45 after the date on the invoice and received late fee of $25.00.
This last billing cycle the billing now has service charges on it saying: $25.00 after 30 days, $50.00 after 60 days, and $100.00 after 90 days.

Members are now going back to the DC&Rs on this and are saying that the DC&Rs as they read them are saying ‘Any assessment not paid within 30 days after the due date’ therefore if someone pays their assessment in 45 days they should not be charged a late fee?

Tam, 30 days after the due date is usually not 30 days after the invoice date. So I think those members are probably correct.

For example, we provide quarterly statements 3 weeks before the due date, which for quarterly payments is the first day of the quarter. After a 10 day grace period there is a late charge of $xx.00 each month the account remains delinquent. Thus, for a quarterly payment due 1/1/10 the invoice date will be 12/11/09 and a late charge will be added if not received by 1/11/10.

Roger, Just for your information, this HOA is in the state of Idaho.

Now that you have sent me, your posting it makes sense when billing is sent out earlier than the month that it is due.

I assume our quarterly dues are as everyone else’s January, April, July and October.
However, our quarterly invoice is always dated and sent the same month. Our last quarterly was dated 10/1/2009 and then sent to the members. The board has now added the due date on the invoice so on last month’s quarterly the invoice date is 10/1/2009 and below it states DUE DATE 10/31/2009 or service charge will apply.

Some of the members are reading the Article for Assessments “Any assessment not paid within 30 days after the due date shall bear interest”. The word “After” is the one that is in play here. Therefore, members are saying that would make it 30 days from 10/31/2009 so, are the member’s right or is the board right.
Does that make sense to you?

I want you all to know that I really appreciate all this information and help.
Tam

Tam,

I'm a little confused as to why the board stated the due date would be 10/31/09. Frankly, I think that is an error. IMO, the due date is the first day of each quarter. The 3rd quarter starts on October 1 and that should be the due date. The article you posted says late fees can be assessed 30 days past the due date which would be October 31. My assn also bills quarterly and my 3d quarter statement says: "Late fee $15; Re-bill $5 after 10/31/09". Does it state anywhere in the CCRs that the due date is 30 days past the beginning of the quarter?

Roger

I have another question, on the DC&Rs Article of Assessments.
If the board changes that sentence, will they have to officially have the change recorded and send notice to the member’s?
Tam

Tam: The board does not have to amend the documents and re-record them in order to make any changes to the billing late fees or due dates. It's built into the amendment for them (the board) to be able to change and adjust either or both independent of any membership approval.

Tam,

As Michele pointed out, they do not have to officially record a change to the CCRs because the CCRs are not being changed. However, they definitely should send a letter to the members stating an error was made on the October statement and the incorrect due date was specified. The correct due date is October 1 and past due if not paid b/4 October 31. Because of the error, IMO, late fees should not be assessed for the 4th quarter except for assessments that remain delinquent after Nov 30th. If late fees were already assessed and collected they should be applied to the 1st qtr, 2010 assessment. A letter should be sent to all those members explaining this. Of course you BOD can do as they choose, I'm just stating what I would propose be done if I were a board member. IMO, the board should always strive to show that they are fair-minded. The members should not be made to suffer for their mistakes.

By the way, my saying that all they need to do is say "this is how it's going to be now" is that they can make the due date be whatever they want, as long as it's 30 days prior to the date the late fee begins.

So all they would have to do is back-track from that date and make that the new due date.