Robert
Posts: 6
Posts: 6
Posted:
Several homeowners are delinquent on dues payments. Our Board wants to charge penalties, such as late payments, compounding interest, and liens. What are typical financial penalties imposed by other HOA's.
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Late Dues Penalty
Started by Robert • 11 replies • 4543 views
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JenniferH (Florida)
Posts: 1
Posts: 1
Posted:
Our dues are due in January, I believe we give 30 days and then charge $25 a month...whatever you decide just put it in writing in your by-laws and have board member approve
JimS (Delaware)
Posts: 10
Posts: 10
Posted:
Our dues are due On June 1. If they pay by then we give a percent discount, usually 5%. If not postmarked by June 1 then up until June 15 we eliminate the 5% discount. After June 15 there is a $25 penalty. Then $10 each month on the 15th. If not paid bu July 15, a letter is sent reminding them. Then around August we place a lien on the house. That gets their attention. That adds another $30 for filing etc. Have only had to go to court for one resident. They decided they were not in the association. They learned they were. We had 100% pay last year. Sometimes you go the limit once and after that the word gets around.
We also always keep the dues at $100. When the budget requires less we use an early pay disount. 5 - 15 %. Therefore if we ever have to charge the full $100, we are not raising the assessment actually, just lowering the discount. This seems more palatable to the residents than stating that we are raising or lowering the assessment each year. Just a word game, but it seems to fly!!
We also always keep the dues at $100. When the budget requires less we use an early pay disount. 5 - 15 %. Therefore if we ever have to charge the full $100, we are not raising the assessment actually, just lowering the discount. This seems more palatable to the residents than stating that we are raising or lowering the assessment each year. Just a word game, but it seems to fly!!
LisaS (Illinois)
Posts: 341
Posts: 341
Posted:
The State of Illinois has passed an ammendment to our condo/association law that eliminates the ability of Associations here to charge late penalties unless the fee is supported by an actual cost/loss. So for he most part, we are unable to use a late 'penalty', but are still allowed to charge interest on the late amounts up to the maximum Illinois allows (not much).
Our dues are yearly. They are charged in december, late if not paid by Feb 1. Our Declaration gives 30 additional days to pay before a lien can be placed. We placed 13 liens last year (out of 300 homes). As of today, only 2 remain unpaid. Everyone in our association said it was mean to place a lien. But it was easy to do, guarantees (most of the time) collection, and is effective.
Good luck,
Lisa
Our dues are yearly. They are charged in december, late if not paid by Feb 1. Our Declaration gives 30 additional days to pay before a lien can be placed. We placed 13 liens last year (out of 300 homes). As of today, only 2 remain unpaid. Everyone in our association said it was mean to place a lien. But it was easy to do, guarantees (most of the time) collection, and is effective.
Good luck,
Lisa
TonyT (Massachusetts)
Posts: 8
Posts: 8
Posted:
We send a letter after the payment is 15 days late that costs the condo owner $5.00, then if we still have not received it after 30 days they get a $20.00 late charge.
Tony
North Andover, MA.
North Andover, MA.
RogerB (Colorado)
Posts: 5,067
Posts: 5,067
Posted:
Here is an example of Rules and Regulations on Delinquent Assessments for a Colorado HOA. These were provided to each homeowner in advance and has resulted in 100% collection with no legal action required.
Assessments are delinquent when payment has not been received by the due date. A 10 day grace period is provided for receipt of payment after which the property is assessed a late charge of $10.00 per month.
Assessments may include, but are not limited to, the annual (regular) assessment which may be paid quarterly, special assessments, late charges, interest, fees, fines, attorney fees, collection costs and court costs. The Declaration (Covenants) establishes that an assessment is a continuing lien upon the property and a personal obligation of the owner.
The annual assessment is determined by the Board of Directors as part of the annual budget. The annual budget is ratified, or vetoed, by homeowners at the annual meeting. If the members veto the budget, then the prior budget, including the annual assessment, remains in effect until a new budget is approved. The annual assessment may be paid on a quarterly basis with payments due on the first day of each quarter which shall beginning January 1st, April 1st, July 1st, and October 1st. Partial assessment payments shall be applied to the oldest assessment first and progress toward the most recent assessment.
Assessment statements shall be provided by mail, e-mail, or coupons as a reminder to homeowners of the amount and due date. Every delinquent account shall receive a monthly statement by first class mail. However, it is the responsibility of the homeowner to remember to pay by the due date even if a statement is not received. An owner may request consideration by the Board of Directors to defer payment due to extenuating circumstances.
An account DELINQUENT OVER 10 DAYS shall be charged $10.00 each month it maintains a balance over $10.00. If a check is returned the account becomes delinquent plus there is a charge of $35.00 for the returned check.
An account DELINQUENT OVER 70 DAYS shall be provided a written warning that a lien will be recorded on the property if payment is not received within 30 days.
An account DELINQUENT OVER 100 DAYS will have a lien filed with the Douglas County Clerk. The lien amount will include a filing charge of $100.
An account DELINQUENT OVER 130 DAYS shall be provided a written warning that the account will be referred to an attorney for collection if not paid within 30 days.
The Association shall make a good faith effort to resolve disputes with the Owner. If resolution is not reached the Association stands ready to go to binding arbitration under the Uniform Arbitration Act. Please be forewarned that if court proceedings are necessary to resolve a dispute, the court will award to the prevailing party reasonable collection costs, attorney fees, and other costs.
Comment: In all cases apply the "Golden Rule" - never create an advisarial situation amongst neighbors when it can be avoided.
Assessments are delinquent when payment has not been received by the due date. A 10 day grace period is provided for receipt of payment after which the property is assessed a late charge of $10.00 per month.
Assessments may include, but are not limited to, the annual (regular) assessment which may be paid quarterly, special assessments, late charges, interest, fees, fines, attorney fees, collection costs and court costs. The Declaration (Covenants) establishes that an assessment is a continuing lien upon the property and a personal obligation of the owner.
The annual assessment is determined by the Board of Directors as part of the annual budget. The annual budget is ratified, or vetoed, by homeowners at the annual meeting. If the members veto the budget, then the prior budget, including the annual assessment, remains in effect until a new budget is approved. The annual assessment may be paid on a quarterly basis with payments due on the first day of each quarter which shall beginning January 1st, April 1st, July 1st, and October 1st. Partial assessment payments shall be applied to the oldest assessment first and progress toward the most recent assessment.
Assessment statements shall be provided by mail, e-mail, or coupons as a reminder to homeowners of the amount and due date. Every delinquent account shall receive a monthly statement by first class mail. However, it is the responsibility of the homeowner to remember to pay by the due date even if a statement is not received. An owner may request consideration by the Board of Directors to defer payment due to extenuating circumstances.
An account DELINQUENT OVER 10 DAYS shall be charged $10.00 each month it maintains a balance over $10.00. If a check is returned the account becomes delinquent plus there is a charge of $35.00 for the returned check.
An account DELINQUENT OVER 70 DAYS shall be provided a written warning that a lien will be recorded on the property if payment is not received within 30 days.
An account DELINQUENT OVER 100 DAYS will have a lien filed with the Douglas County Clerk. The lien amount will include a filing charge of $100.
An account DELINQUENT OVER 130 DAYS shall be provided a written warning that the account will be referred to an attorney for collection if not paid within 30 days.
The Association shall make a good faith effort to resolve disputes with the Owner. If resolution is not reached the Association stands ready to go to binding arbitration under the Uniform Arbitration Act. Please be forewarned that if court proceedings are necessary to resolve a dispute, the court will award to the prevailing party reasonable collection costs, attorney fees, and other costs.
Comment: In all cases apply the "Golden Rule" - never create an advisarial situation amongst neighbors when it can be avoided.
ReneeD (Illinois)
Posts: 201
Posts: 201
Posted:
Lisa, I would truly appreciate if can you cite this amendment and where I can find that eliminates late penalties? Also, what would constitute an actual cost/loss? Thank you so much. -ReneeD
Robert
Posts: 6
Posts: 6
Posted:
Thanks to all of you that have responded. After reading many of the other posts, I went about trying to find the correct state codes. I live in Georgia, and believe me, it took a lot of reading to find the correct statue(s). The statues basically allows for a $10.00 late fee and 10% APR interest of unpaid balance. However, since our dues are annually collected, in the loose interpretation, the statue indicates "each assesment", which means only one late fee ( I choose to interpret this as, a late notice each month (assesment) with a monthly late fee. The 10% APR applies to the principal and late fees. I hope I have interpreted this correctly.
I have enjoyed, and learned a lot from reading all the discussion forums.
Thanks,
Robert
I have enjoyed, and learned a lot from reading all the discussion forums.
Thanks,
Robert
DGuy (Florida)
Posts: 1
Posts: 1
Posted:
Here is what we do. Our Dues are due in January. If not paid by Jan 31, we impose a $15 late fee. On top of that we charge interest at the highest legal limit. Now just to make sure that you are clear, you cannot charge interest on itself or late fees. You can only charge interest on the assessment itself. Example: Our dues are $150/year Leagal limit is 18% (18/12=1.5) Monthly interst we charge is 1.5% so we charge each aged account 2.25 each month they are late. That is in writing in our covenants.
ReneeD (Illinois)
Posts: 201
Posts: 201
Posted:
What determines an actual cost/loss? Also, we pay our assessments monthly. Thanks. ReneeD
LisaS (Illinois)
Posts: 341
Posts: 341
Posted:
Actual loss is the amount of money it costs the Association by not having collected the dues. This can include many things...lost interest on reserves, late fees on Association bills, collection costs ( from certified mail to collection agency fees), attroney fees, fees to file a lien, etc.
The applicable updated law for the State of Illinois can be found at their web site. They have been -tweaking' it again so check updates and changes regularly.
The applicable updated law for the State of Illinois can be found at their web site. They have been -tweaking' it again so check updates and changes regularly.
BrianB (California)
Posts: 2,820
Posts: 2,820
Posted:
I feel lucky...
our dues are $20 per month, and our late fee is $10, plus 13% interest.
We have the lowest dues in Phoenix, i believe, and yet people continually donate another $10 per month because they forget to pay. I can't imagine paying 50% more on top of my dues because I can't:
Write one check a year to cover the entire amount
Use an autodeposit feature free from my bank
write 12 checks and give them to the book keeper
remember to write one check each month on the 1st
set up an auto payment plan with my bank
It always reminds me of the people I knew in my hometown who would write a check they KNEW would bounce for bread and milk at the store. $7 check they knew would hit them for $15 in fees... and yet they continued to spend $22 or more for milk and bread.
our dues are $20 per month, and our late fee is $10, plus 13% interest.
We have the lowest dues in Phoenix, i believe, and yet people continually donate another $10 per month because they forget to pay. I can't imagine paying 50% more on top of my dues because I can't:
Write one check a year to cover the entire amount
Use an autodeposit feature free from my bank
write 12 checks and give them to the book keeper
remember to write one check each month on the 1st
set up an auto payment plan with my bank
It always reminds me of the people I knew in my hometown who would write a check they KNEW would bounce for bread and milk at the store. $7 check they knew would hit them for $15 in fees... and yet they continued to spend $22 or more for milk and bread.
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