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| IHG Insurance (National Insurance Provider) |
| Providing Community Association Insurance for over 25 years: D&O Liability, Crime Products, Umbrella Coverage and Property Manager's Errors & Omissions Liability. |
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JulieS
(Georgia)
Posts:412
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| 06/23/2006 9:54 AM |
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Since we are on the topic of late fees....our management company charges a $10/month late fee on past due accounts and keeps it as income to themselves. Our documents state that a late fee percentage is charged after April 10th. I asked the question to our MC if they keep all of the late fees or just the $10/month per their contract. It seems that if they keep the late fee mandated by the covenants that would be wrong. I have not heard back from them yet.
Does anyone else have an MC that charges an additional late fee? Any ideas, suggestions, etc.? I'm guessing they charge this fee to recoup additional costs that are not covered in the general contract that we have.
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RogerB
(Colorado)
Posts:3725
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| 06/23/2006 10:13 AM |
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Julie, under our Agreements we usually charge the association $10 for each late charge notice. Since the number of delinquencies due to not paying on time varies monthy, the effort involved also varies and this procedure is often chosen as an additional cost rather than adding the cost to the monthly basic Agreement.
We notify the owner each month when there is a late charge. Delinquent owners are billed from and pay the late charge to the association never to the MC. |
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Roger Borcherding
Official HOATalk.com Sponsor
DARCO Property Management (Colorado)
(303) 925-0150 
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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JulieS
(Georgia)
Posts:412
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| 06/23/2006 10:23 AM |
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| This is what I figured but my question or concern is more with the original late fee required in the covenants. I'm assuming you don't keep that, correct? |
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RogerB
(Colorado)
Posts:3725
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| 06/23/2006 10:46 AM |
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No Julie, as I said all late charges are paid to the HOA. We will not accept any check from a homeowner which is made out to DARCO. So if an owner owes a late charge of $10.00 they make their check payable to the HOA in the amount of the assessment due plus $10 for the late charge.
Meanwhile DARCO will bill the HOA on our monthly invoice the association a charge of $10.00 for the accounting and time involved in issuing the delinquency statement to the owner.
On an aside, the HOA should never depend on late charges to fund their operations. The late charge amount should be established to encourage owners to pay on time. |
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Roger Borcherding
Official HOATalk.com Sponsor
DARCO Property Management (Colorado)
(303) 925-0150
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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JulieS
(Georgia)
Posts:412
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| 06/23/2006 10:56 AM |
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That is all correct and I'm sure that is what is happening.
We do not depend on late fees to finance operations but it is amazing how many people pay late and then expect you to waive the late fee. |
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RogerB
(Colorado)
Posts:3725
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| 06/23/2006 1:04 PM |
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| Yes Julie, it is amazing. Particularly when million dollar homes are sometimes involved. IMHO late fees should not be waived except in extreme cases, such as the bread winner lost their job. In those cases there should be policies and procedures, which have been provided in advance to all owners, which gives the Board the right to consider special circumstances. Otherwise if you waive for one you have set a pecedent. |
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Roger Borcherding
Official HOATalk.com Sponsor
DARCO Property Management (Colorado)
(303) 925-0150
*See legal notice below (end of page) or go to www.hoatalk.com/legal |
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BrianB
(California)
Posts:1748
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| 06/23/2006 5:44 PM |
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I just want to brag on one set of owners in our community... after using every trick short of Guido and Vic visits on some recalcitrant owners, and hearing every excuse in the book for why they get $200 to $500 behind or stop paying for a year, we had one owner who sent us a letter, carefully explaining that they were in a rough patch and declaring bankruptcy. They wanted to know their balance, which was in the positive, and we told them. We filled out the forms for their court case, and i was thinking "well, that's the last money we will see from them! With that excuse, why bother to pay at all?"
Since then, they have never missed a payment... sometimes dropping a check by our door just before the deadline (which is fine in our HOA), sometimes paying just a bit ahead if they have the extra. They check every other month or so, just to make sure they are okay.
It's refreshing to deal with someone like that: a valid excuse to ask for a handout, and they never did. Just paid up, and kept up, and showed up their lazy neighbors. |
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