Below is a helpful tip from the Davis-Stirling.com Newsletter by ADAMS | STIRLING PLC regarding delinquent Assessments, late fees, and interest.
I received a number of messages from readers arguing against the suspension of late fees and interest on delinquent assessments. They made the following points:
Wrong Signal.: Suspending late fees and interest removes incentive for owners to pay their assessments. It sends a signal that it is okay not to pay regardless of whether they can afford to pay.
Bills to Pay. If no one pays their assessments, associations cannot meet their ongoing expenses, including management, insurance, utilities, repairs, pest control, security, etc. Unlike the Federal government, associations cannot print money.
Stimulus Bill. The economic stimulus package signed by the President is pushing cash to American households so individuals can pay their bills. Most adults will get $1,200, plus $500 per child. In addition, persons who were laid off will receive unemployment checks plus an additional $600 per week. Members should pay their assessments since the money is used to protect their homes.
Case By Case. Homeowners who can’t pay their assessments can be addressed individually and enter into payment plans. If the person sticks to the plan, the board can waive late fees accrued for the period after March 20 when the Governor shut down the state’s economy.
COMMENT: Even though I favor the temporary suspension of late fees and interest, the above arguments have merit. Boards should pay close attention to their expenses and cash on hand, and then decide whether or not to temporarily suspend late fees and interest or keep them in place and deal with delinquent owners on a case-by-case basis.
For more knowledgeable information regarding the business of HOA’s, visit: The Davis-Stirling.com Newsletter
DISCLAIMER. The Davis-Stirling.com Newsletter by ADAMS | STIRLING PLC provides commentary only, not legal advice. For legal advice, you’ll need to hire legal counsel. You can hire ADAMS | STIRLING PLC; Keep in mind they are considered corporate counsel to associations only.
