Can an HOA Charge a late fee for an Unpaid late fee??

[Alison2]

My State is Hawaii

Our HOA Bylaws 'only' state a late fee, of $50, will be charged if the monthly fees are received after the 15th of the month. It does not subtract the late fee from the monthly fee, nor does it state any penalty for an unpaid late fee.

Our manager, who records the payments, frequently does NOT record payments the day he receives them, which I suspect is to unfairly collect late fees. The office staff is not allowed to 'log' the date they receive them.

I have a late fee I chose not to pay because I mailed it in plenty of time. It should NOT have been late. It was logged 10 days later.

I receive a monthly statement, which does not have a running balance, just the amount of the next payment. ALL my payments are on time since then, and recorded as such, but I am charged a $50 late fee every month ONLY for that first unpaid late fee.

Without our bylaws stating they can charge a late fee 'only' for an unpaid late fee, (the first being a $50 charge on $50 owed) isn't that against the law?

I have researched HI Condo Law and it doesn't mention this case so I thought Fed. law would cover this with the fair credit billing act. or The Credit Practices Rule.
It also seems excessive to charge $50 late fee for a $50 debt.

Can you help guide me to the proper set of laws that apply since the bylaws don't state anything about recharging late fees over and over
Thanks!.What is the name of your state?

[gee29]

I too have the same problem. I live in Texas and the home owner company just started pyramiding my late fees last month, that I incurred in December 2005. I have disputed those late fees because i use a service that I found on the company's website to pay my dues. For some reason, the company had technical difficulties, which they admit to, and skipped my payment, therefore making me late. I called the management company to explain but they were rude and did not agree to waive them, and said they had no relationship with the company endorsed on their website. Well I didn't pay the late fees all last year and continued to make my payments on time. I was surprised when they piled on more late fees in feb 2007 and march 2007 and now the late fees are $123 for one payment. What kind of legal recourse do I have if any? The company says that they collect late fees before they collect the dues. Is this legal? Thanks for any help.

[JETX]

Our manager, who records the payments, frequently does NOT record payments the day he receives them, which I suspect is to unfairly collect late fees. The office staff is not allowed to 'log' the date they receive them.

A very simple solution....
Spend $0.60 more on your first class letter and get PROOF of delivery.
[url]http://www.usps.com/send/waystosendmail/extraservices/deliveryconfirmationservice.htm[/url]

Without our bylaws stating they can charge a late fee 'only' for an unpaid late fee, (the first being a $50 charge on $50 owed) isn't that against the law?

No.

[JETX]

I too have the same problem. I live in Texas

1) Then it isn't the same.
2) Don't hijack someone elses thread
3) Post your OWN thread.

[Paddy Reagan]

I have a late fee I chose not to pay because I mailed it in plenty of time. It should NOT have been late. It was logged 10 days later.

First of all, suggest you do not refuse to pay late fees to protest the inefficiency of the manager. Without the evidence suggested by JETX, your assertion of when you mailed the maintenance fee has no more validity than the receipt and posting date. When these things happen, pay the late fee and argue the point later.

As for your compounding problem, most CC&Rs and state statutes are very specific about what can be charged as late fees, interest, etc. Also, the provision exists in many statutes for these fees to be collected first, before any maintenance fees are posted. So, it's possible that in the month following the late fee charge it was deducted from your regular maintenance fee and you were charged an additional late fee for the partial payment that resulted. This would explain why the charges continue to accrue even though you pay on time each month.

If all this is true in Hawaii, it's unlikely that the manager has violated any of the governing rules and all those accumulated late fees are appropriate. Here's a suggestion to help you sort things out.

First, attempt to negotiate a settlement with the manager. If this doesn't work (or if you've already made an attempt) write a letter of explanation to the board of directors, asking for a meeting to resolve the issue. If the board refuses to meet or negotiate, make a formal request for arbitration. Many states offer this service for condo owners to reduce the case load in their court systems. Be prepared to live with the outcome. But, I've found that many aggressive managers and boards quickly back off of their more draconian claims in these situations.

[Alison2]

Thank you Jetx. I will ask the P.O. if they have Delivery Conformation for Hawaii. If so, I will get one every time I send my fees.

I was already paying $1.00 for Confirmation of Mailing (to that address). Confirms the date I mailed it. But the delivery one would be better.

I would love to quote a law to the HOA regarding that states late fees only on an unpaid late fee is unlawful. I am hoping the Fed. Credit Practices Rule, or any law, applies.

[JETX]

I would love to quote a law to the HOA regarding that states late fees only on an unpaid late fee is unlawful. I am hoping the Fed. Credit Practices Rule, or any law, applies.

Hope all you want.... but there is no statute that will prohibit what you describe. There are lots of ways to look at this... and you are lucky they are not looking at this from a FIFO (First In, First Out) accounting basis.

If they did, you would be facing a late fee for EVERY month. Here is how a FIFO works.
Your monthly fee is $200.
You pay $200 late, incurring a $50 late fee (which you already agreed per the agreement YOU signed).
They apply $50 of that fee to your late, and the $150 remainder to your $200 new fee owed.... making that monthly payment late, incurring ANOTHER $50 late fee.
And so on... for every month fee payment.

[Alison2]

Jetx, is FIFO a established standard practice for most condo management ??

I read the CC&R's several times over, just looking for anything related to this. There is nothing stating FIFO. There is also nothing stating they will charge a late fee every month (which they have) until the first late fee is paid. I am also sure it is NOT subtracted from my payment because they list a 'break down' of the payment, and it does not include any subtracted amounts. The late fees they post every month are listed separately, on the statement, as late fee for unpaid balance.

I'll throw out , to see what you think, ... what I have found in HI law on the internet. Hawaii Revised Statues Chapter 480D - Collection Practices [480D-3] Prohibited practices. **(For any consumer debt, bug NOT for Collection Agencies)
It shall be a prohibited practice for any debt collector (HOA qualifies) ... to engage in any of the following practices while collecting a consumer debt:
(11) To collect or attempt to collect any interest, charge, fee, or expense incidental to the debt unless the additions are authorized by the agreement or by law.
[url]www.capitol.hawaii.gov[/url] - /hrscurrent/Vol11_Ch0476-0490/HRS0480D/
... and .....
FEDERAL - The Credit Practices Rule applies to consumer credit contracts
**(I'm not sure if this applies to my circumstances ???) **************
Under the Rule, it is illegal for a creditor to charge you late fees or payments simply because you have not yet paid a late fee you owe, or to pyramid late fees.

Since I am sure the bylaws don't give them this power for late fee pyramiding, .. I think the law governs it.
But, hey,... what do I know ..... I'm NOT a lawyer! ...

What's your opinion??

[JETX]

Jetx, is FIFO a established standard practice for most condo management ??

FIFO is an accounting practice. What your HOA uses depends on their accountant.

I'll throw out , to see what you think,
It shall be a prohibited practice for any debt collector (HOA qualifies)

The HOA does NOT qualify as a debt collector since they are the primary 'creditor'.
Read the definition of a 'debt collector'.

Since I am sure the bylaws don't give them this power for late fee pyramiding, .. I think the law governs it.

You 'think' is not correct.

What's your opinion??

Pay the bill... get a receipt. And make sure all of your future payments are on time.
If you don't pay it, the costs are only going to increase... and the HOA could file a lien on your property and take it from you.

[Alison2]

HRS Chapter 480D - Collection Practices, -2 Definitions
"Consumer debt" means any debt of a natural person incurred primarily for personal, family, or household purposes.
"Debt" means any obligation or alleged obligation of a person to pay money arising out of any transaction, whether or not the obligation has been reduced to judgment.
"Debt collector" means any person, who is not a collection agency, and who in the regular course of business collects or attempts to collect consumer debts owed or due or asserted to be owed or due to the collector.
"Person" means an individual, partnership, joint venture, corporation, association, business, trust, or any organized group of persons, or any combination thereof.

[JETX]

"Debt collector" means any person, who is not a collection agency, and who in the regular course of business collects or attempts to collect consumer debts owed or due or asserted to be owed or due to the collector.

The reason you are 'confused'.... is you are cross-referenced.

Your previous post claimed FEDERAL...
"FEDERAL - The Credit Practices Rule"
Now you are claiming STATE.

The original creditor is NOT a debt collector under federal law... so the FDCPA does NOT apply.

[HomeGuru]

Good response JETX. Allison2, in Hawaii, an AOAO can file a lien for unpaid HOA fees. And if not paid, can foreclose on the property.

[JETX]

Good response JETX. Allison2, in Hawaii, an AOAO can file a lien for unpaid HOA fees. And if not paid, can foreclose on the property.

Hey, Bro!!!
How are you doing?? Long time no hear from you... welcome back!!!

[Alison2]

Yes, I did name two different laws I thought might apply. One was Federal and one was HI State Law - (HRS)

Jetx, Not sure that I was mixed up, ... since you stated to.... Read the definition of a 'debt collector'." .... I looked up "debt collector" which was the term used in the State Law:

HRS 480D - Collection Practices [-3] Prohibited - -
It is illegal for any debt collector.... to collect any interest, charge, fee, or expense incidental to the debt unless the additions are authorized by the agreement or by law.

"Debt collector" means any person, who is not a collection agency, and who in the regular course of business collects or attempts to collect consumer debts owed or due or asserted to be owed or due to the collector. It seemed that the manager working for the HOA fits this definition ????

The FEDERAL law - The Credit Practices Rule
States It is illegal for a creditor to charge you late fees simply because you have not yet paid a late fee.

I hope that clears up the two definitions of the two laws. Do you know if either of these laws apply to HOA's collection practices?

Thanks!

[Tritium]

I am not an expert by any means... however, I recall while working for a property management company (As tech & accounting support) these are the tricks they use. You cannot be evicted for nonpayment of late fees. So, they will apply the payment toward the late fee first, and rent 2nd. Thus you owe on the rent.

How to get around this? Obviously you can't force them to record the payment properly, however... in the memo field of the check being sent out, if you note "May Rent Payment" then they can only apply it toward rent in may, and not the late fee, because it specifically states that payment was intended for Rent owed, not the late fee. This leaves the late fee unpaid.

This is how I learned of many many sneaky tactics they use. They love late fees because it's like free money. So to make a deal with someone who might be consistantly late still works for them, cause again, free money is free.. better happy resident paying 1/2 then angry eviction process to follow.