Covenant enforcement and late fees

Started by JanD2 • 4 replies • 1733 views

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JanD2 (Mississippi)
Posts: 3

Posted:

Our bylaws and covenants do not provide any enforcement mechanism for late dues payments or penalties for violation of covenants. Home owners are angry that the board is not enforcing the covenants but our hands are tied unless we can put together an enforcement mechanism. How can we do this when it is not mentioned in the bylaws or the covenants? If we are able to add an enformcement mechanism, are we allowed to go after homeowners who are delinquent in their dues or should we just start enforcement when homeowners become deliquent after the time that the enforcement mechanism has been added?

ChrisG5 (Maryland)
Posts: 7

Posted:

Are you sure there are no assesement enforcement provisions in your governing documents? This is a good question for your HOA attorney. Your HOA has one, correct? If not, get one that specializes in hoa's right away.

Your by-laws can be updated. You can wait until your annual board meeting to propose an amendment to your by-laws approved by your board to include a Late Dues Penalty clause. It must not exceed any state homeowners association act/laws. It would require the majority vote of the members. Once approved, your hoa attorney would handle adopting it into your governing docuements.

In addition to late fees, typically by-laws also include a clause that would disallow homeowers voting rights if they are not in good standing, i.e. dues are in arrears, or any outstanding covenant violation(s.
It is common to escalate outstanding dues to your hoa attorney to handle collections and/or liens.

Once established, homeowners must be notified in advance of the policy or revision in the by-laws.
Any reminder notices should be clear about "what happens if I don't pay on time". Six months in arrears should be about the time frame to escalate to collecitons/attorneys assuming you have sent an original notice plus two reminders. All court costs and back dues would be charged to the homeowners.

see Homeowners Association Manuel, Peter Dunbar and Marc Dunbar
Homeowner's Association Management, Huber and Tyler

JanD2 (Mississippi)
Posts: 3

Posted:

Thanks for your reply. One more question along these lines. Our HOA consists of approximately 72 homes. There has been a large turnover of residents in the neighborhood. Frequently, new owners buy property without beging given notice, at the closing, that there is a homeowners association to which they are expected to pay dues. We are not sure if there is documentation in the court records for each property indicating that the buyer must pay dues to the HOA. Do we need to go to the courthouse and check each individual property? Can we legally collect dues from these people? We have about 15 homes that are not paying dues. We use most of the dues to pay for street lights in the community.

GeorgerwilliamsW (Indiana)
Posts: 975

Posted:

Jan, in most states, the declaration of covenants is recorded as part of the deed to the property. Both the new owner and any mortgage company would receive copies at closing. You may want to seek the advice of the county recorder of deeds as to what steps may be appropriate to pursue. Something does not sound quite right here.

SusanW1 (Michigan)
Posts: 5,202

Posted:

There have been many discussions on this board about collecting late fees, filing liens, definition of member-in-good-standing, and other topics that deal with collecting dues.

Go to the SEARCH at the upper fight hand corner and type in key words. Many threads will pop up.

You board needs to develop and adopt some Standing Rules about assessments and their collection. Look in your bylaws for what it says about powers of the board. Are you incorporated? Does you state have a non profit corporation act? That may give you some guidance. It sounds like you need a real estate lawyer or a parlimentarian to help you write some bylaws or rules that will have some teeth.

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