HOA Vs MC documents

Started by AdamK • 9 replies • 1424 views

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AdamK (Arizona)
Posts: 23

Posted:

In the original By-laws it says that my dues are to be collected quarterly, and there is a $10 late fee. I then found meeting minutes that increased the fee from $10 to $12.

Our management company (which we have a contract with) is using a coupon book with monthly slips and envelopes and on the slip it says that the late fee is $15 if not recieved by the 15th of each month.

The MC is saying that my April payment was late and I owe $15.00.

I would think that I have until the end of the 2nd quarter (June 30th) to pay the quarterly dues (3 months worth). And if I don't, then my late fee should be $12.00. That information is in our By-laws

Am I to be held accountable for what is in our by-laws and meeting minutes, or because the board/association hired the MC, do I have to adhere to their rules for collecting payments? Is the coupon book a document of the association whereas the information of due dates and late fees on the coupon book supercede the by-laws?

Hope this makes sense what I'm asking. I've asked both the board (which i'm on) and the MC to get back to me with documents in either case. I know it's only a few bucks and really I'm just trying to see who will take responsibility as the board usually defaults all of its problems to the MC and the MC always says it is the boards decission. Just wnated to get some thoughts.

DanielH1 (California)
Posts: 482

Posted:

It may depend on what the contract with the MC says. The contract might give the MC latitude, especially since MCs often write the contract and not the HOA.

I had a similar question a while back and the forum got all confused and misunderstood the question so I never got a good answer (or even a good argument on one side or the other).

But I would think that the any Bylaws would be superior; that is, any Bylaws Amendments passed by a vote of the Membership or adopted when the HOA was organized. I would think that rules passed by the Board or contracts would have less force than Bylaws but have equal force with each other, meaning that whichever was passed more recently. However, the MC is only obligated to follow their contract so they don't have to obey Bylaws or rules unless the contract tells them so. So, it's all confused.

JamesC (Maryland)
Posts: 282

Posted:

Adam:
The buck begins, and stops with the Board.The Board of Directors cannot shift the blame onto anyone who is under contract with the Association.
The Board of Directors hire, fire, and give "ALL" directions to every contractor responsible for maintaining the community.
The Management "CANNOT" increase or decrease any fees without the Board telling them too.
You say you are on the Board, is it possible the fees were passed by the board before you become a member?
How many homes are in your community, and are you a condo, or Association?
This would make no difference, but just curious about your assessment fees being so low.

Jim

AdamK (Arizona)
Posts: 23

Posted:

thanks.

James,

There are 117 lots in our HOA. we area ll detached homes, no clubhouse, no pool, no tennis courts, no nothing. dues go towards small tracst of landscapping in front of some homes (our project is in the shape of a "U" with cul-de-sacs coming off of the "U" both towards the middle and towrads the outside). only the houses that are on the actual part of the "U" maybe 10 total get front yard maintenance. Our dues are $38 a month. We were built in 2001. I joined the board 2 years ago when I moved in.

Like I said, I found when the increase went from $10 - $12 and that was only 2 years ago so I would have rememberd or had records of the increase from $12 to $15. The monthly thing I just realized now as I have been studying our CC&Rs and By-laws lately for some other issues. I would assume that they changed it, but i think it's one of those things that the board never officially change, however, just let the MC run with the way they usually do business. I briefly read through our contract with the MC and it says nothing about how they collect dues. So I'm thinking that unless the by-law was changed prior to me joining the association, i should be in the clear.. fingers crossed

DanielH1 (California)
Posts: 482

Posted:

Suppose, for the sake of argument, that the MC says the extra $3 is a processing fee. The HOA gets $12 and the MC keeps $3 for a total of $15.

Can a MC collect additional fees for its own costs if the contract is silent on the issue?

I don't know, maybe. MCs can legally charge fees for document retrieval and duplication to individual homeowners even if the HOA contract is silent. A processing fee seems similar.

AdamK (Arizona)
Posts: 23

Posted:

thanks daniel,

i would think that that information would be in the contract. and that clearly isn't. i was left a message by the MC saying that they "thought" the changes were made january of 2009, but i was on the board then and really don't recall this change. it makes sense that we go from quarterly to monthly and we may have voted on it, but i just don't see any record of it. same with the late charge. like i said, it's only $3 and i'll pay it if it was voted in, but it's just not on any of the records so it doesnt seem fair to enforce.

RogerB (Colorado)
Posts: 5,067

Posted:

Adam, The Board should have a well defined Collection Policy which has been provided to all homeowners. The MC must follow that Policy. The Rules and Regulations we have written for HOAs states quarterly assessments are due the first day of the quarter and after a 10 day grace period for receipt of payment there is a late charge of $xx.00/month for every month the account remains delinquent. A $15 late charge is reasonable; perhaps your HOA has a late charge of $12 plus a service charge of $3.00.

Meanwhile the Board establish these charges to the homeowner, not the MC. The MC establishes its charges to the association via its management agreement.

MaryA1 (Arizona)
Posts: 7,043

Posted:

Adam,

Listen to Roger; what he says makes sense and is most often the norm.

One other note, AZ law puts a cap on the amount of late fees that can be changed: "Charges for the late payment of assessments are limited to the greater of $15 or 10% of the amount of the unpaid assessment." So, the $15 late fee seems to be within the law. However, as Roger stated, there should be a collection policy which outlines this. If your HOA doesn't have one then, as a board member, you might suggest they adopt one. The members should always be informed of any changes made to the manner in which assessments are collected; what they can expect to be charged if late; what collection actions will be taken, etc. If the MC's contract states they can charge a fee for sending delinquent notices then that should be relayed to the members. As a board member you certainly should know what the late fee is. The fact that you can't find anything in the minutes may have no bearing; the minutes are not always accurate and oftentimes the board members don't bother to make corrections.

AdamK (Arizona)
Posts: 23

Posted:

thanks again for all the responses. i talked to the MC in-charge of collecting dues, the accountant had no clue and our proprety manage left me a choppy message that he listed several "possible dates" when the change might have been approved by the board. I have asked our president for the information (we just had a change in positions so i left it up to her to see if she had the books or the old or new secretary). The dates that the MC manager gave was during a time we had an excellent secretary that kept a log of approved action items, which both of my items were not on. so we shall see..

GlenL (Ohio)
Posts: 5,491

Posted:

In the mean time pay the late fee before it ends up costing you more in the end.

Studies show that 5 out of 4 people have problems with fractions

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