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Community living: Board can't change late fees on a whim

Board can't change late fees on a whim

Q: How much can the condominium charge as a late fee? If the documents show one amount, do the documents have to be changed or can it be done at a board meeting?

A: In order to charge a late fee, it must be in your documents. The board cannot simply change the documented amount.

To be enforceable, the board will need to seek guidance from an attorney. When you have a late fee listed in your documents, the board must apply the fine uniformly.

Owners need to understand that fees are due on the first of the month and are considered late on the second day. Most associations have a grace period of about three to 10 days. What this means is if the payment was in the mail on the first of the month and was delayed for postal reasons, it had to be received by the association within this grace period and should not be charged the late fee.

It is an owner's responsibility to pay on time with or without the association's notice or invoice.

I suggest that any delinquent payment not received by the 10th of the month have a letter sent by the board to notice the payment not received. If the payment is not received by the end of the month, a second letter is sent.

If the owner does not pay by the second month, on the 10th of the second month a certified collection letter should be sent to the owner. In that letter, explain that the collection matter will be turned over to the association's attorney to lien the unit if the delinquent amounts are not immediately paid. The attorney will be able to determine what late fees and interest can be added to the lien. Boards need to seek legal guidance when applying late fees to delinquent fees.

Policies should be part of association records

Q: In a previous article you answered a question about owners having the right to talk at board meetings. You explained that the board should establish a policy regarding how a member can request to talk.

There have been numerous times when our boards have created policies. However, other than recording that in the minutes of the board meeting, they are not recorded or posted for the members' information. Should they be recorded elsewhere?

Being a retired member of the military, we had all kinds of policies and these were often numbered and filed in a book with an index. I do not think our HOA has a book like this, and to find a policy one would have to read through all the minutes.

Can you please tell me if there is proper procedure for filing policies and should they be made part of our documents, i.e., rules and regulations or bylaws?

A: It would depend on the type of policy. Maybe the board establishes a board operation policy that only involves the board of directors. Or, maybe it is a collections policy or a rule enforcement policy that does involve the members and their actions. But regardless of the policy, it should be communicated to the owners and made part of the association's records.

Communication is one of the missing elements that many boards forget.

Though policy creation is very important for good operations, the members must be part of the information line. Most policies do not need to be recorded in the county court records but they should be in a form that is easily accessible by the owners.

What I like to suggest is that a copy of the unapproved minutes be posted on a bulletin board or on a Web page three or four days after the meeting. I would suggest that they be marked as draft or unapproved.

As for the policies, a copy should be sent to the members for their records and a copy posted on the bulletin board and placed in a special policy book for the records. Such policies are not fixed in stone and can be modified at any future board meeting.

Policies are guidelines for the board and management for the operations of the association. They put all parties on notice and directions that guidelines have been approved for certain operations and management.

In simple terms, if you take a trip you need road maps. Policies are the maps of association operations and management.

Don't expect a refund of fee hike caused by delinquent unit

Q: Recently our condominium board decided to add $10 to our monthly fee. The reason for the increase is to make up for the loss of fees from one unit that is in foreclosure. Are we entitled to a refund of this additional cost when the unit is sold? Is there any reference in the statutes regarding this matter?

A: The statute requires the board to maintain and operate the association. To do so, the statute authorized the board to establish a budget or approve a special assessment that is adequate to perform their duties to cover these shortfalls.

If some units do not pay and the board has not been able to collect the delinquent amounts by collection procedures, then it will be the duty of the board to assess the other members for the shortfall.

You are lucky that you only have one unit, as many associations have delinquency rates much higher and a few exceed 25 percent of their units. No, you will not receive a refund if the unit pays the delinquent fees — but your fees could be reduced if delinquent fees are collected.

In today's economy, most delinquent fees will be lost and not recovered.

Richard White is a licensed community associations manager. Write to him at 6039 Cypress Gardens Blvd., No. 201, Winter Haven, FL 33884-4115. Please include your name and city.


Community living: Board can't change late fees on a whim 03/05/11 [Last modified: Saturday, March 5, 2011 3:30am]
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