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Old 08-15-2019, 11:33 AM
 
1 posts, read 437 times
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I recently was elected to an office in our HOA. Our small community has a community trash dumpster that all the homeowners uses. The monthly charge for the trash service is drafted out of the HOA checking account. The HOA bills the owners quarterly for their part of the trash service. Some of the owners are not paying their bill within the 30 day time. Can our HOA legally charge a 1% late fee to these owners?
This is not part of our HOA By-Laws.
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Old 08-15-2019, 12:13 PM
 
Location: Austin, TX
13,617 posts, read 30,315,525 times
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Quote:
Originally Posted by jwilliams4263 View Post
I recently was elected to an office in our HOA. Our small community has a community trash dumpster that all the homeowners uses. The monthly charge for the trash service is drafted out of the HOA checking account. The HOA bills the owners quarterly for their part of the trash service. Some of the owners are not paying their bill within the 30 day time. Can our HOA legally charge a 1% late fee to these owners?
This is not part of our HOA By-Laws.
You need to talk to an attorney and get a professional opinion. There are ones that specialize in HOA management.

At the end of the day, though, it may be more expensive, especially if these people are paying eventually anyway.
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Old 08-15-2019, 07:02 PM
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Location: Ohio
17,031 posts, read 34,493,745 times
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Late fees are one of the ways HOA management companies make their money. They are baked into the terms of the contract that your HOA signed with its management company.
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Old 08-15-2019, 09:46 PM
 
Location: Austin, TX
13,617 posts, read 30,315,525 times
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Originally Posted by Bo View Post
Late fees are one of the ways HOA management companies make their money. They are baked into the terms of the contract that your HOA signed with its management company.
My last HOA did not hire a management company, as we were small enough to handle it ourselves. The current HOA I am in does have a management company, and it is pretty much pointless - a 'fine' generator
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Old 08-20-2019, 05:13 PM
 
2,898 posts, read 3,600,342 times
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Quote:
Originally Posted by Bo View Post
Late fees are one of the ways HOA management companies make their money. They are baked into the terms of the contract that your HOA signed with its management company.
In fact the management companies are behind the "priority of payment scam". They will "advise" a board to adopt all sorts of "resolutions" including one purporting to allow the HOA (and therefore its agents) to misapply your payments to all sorts of categories invented by the management company with assessments to be the last, if ever paid.

Through this mechanism when you pay, the management company misapplies your assessment payment to leave you in "arrears" on assessments - to generate a "late fee" or "collection fee" to the management company. The management company works in collusion with the HOA attorney to threaten foreclosure in order to collect windfall fees for the management company and attorney fees for the HOA attorneys. The 2011 legislation in Texas curbed some but not all of this - it is also rampant in condominiums.

In some states these practices have been determined to run afoul of the FDCPA. The trade group for HOA attorney and HOA management companies promulgates "public policies" where they want to change statutes like the FDCPA to permit their unscrupulous practices.

The management companies always proclaim it is the "board" making these decisions. In reality you can look at the resolution adopted and often tell which management company was responsible.
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Old 08-21-2019, 12:02 PM
 
1,030 posts, read 199,445 times
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Quote:
Originally Posted by jwilliams4263 View Post
I recently was elected to an office in our HOA. Our small community has a community trash dumpster that all the homeowners uses. The monthly charge for the trash service is drafted out of the HOA checking account. The HOA bills the owners quarterly for their part of the trash service. Some of the owners are not paying their bill within the 30 day time. Can our HOA legally charge a 1% late fee to these owners?
This is not part of our HOA By-Laws.
If your governing documents do not currently impose late fees, it would be difficult to justify doing so. You should consult an attorney with an understanding of HOA legislation to determine how to do this legally.

Would a 1% late fee even be that much of an incentive to pay on time? It would be a very small amount.

Perhaps an easier solution would be to have the association pay the trash bill and raise the regular assessment to cover that cost.
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