With increasing postage rates and other costs, some boards are considering raising the association’s administrative “late fee” assessed to delinquent owners. When an owner fails to make timely required payments some administrative actions are taken including account reviews, second billing statements, and the sending of delinquency reports to legal counsel. Ohio Condominium and homeowner associations are dependent upon the timely payment for the maintenance, operation, and administration of the common elements. Therefore, both Ohio’s Condominium Act and Planned Community Act permit the board’s imposition of late fees against the delinquent owner.
It is important for board members to keep in mind that like any other rule or policy that the board adopts, the late fees must be reasonable. Administrative tasks involve human and tangible resources and placing a dollar amount on each is difficult at best. Some associations may have a restriction in the Declaration or Bylaws that limits the late fee to a certain dollar amount. If the Board knows that it is in the best interest of the association to raise late fees due to rising administrative cost and this increase does not conflict with the Declaration or Bylaws, it should do so.
Following is a list of helpful tips for the board to consider when deciding to raise administrative late fees:
- Make certain that the date of imposition as well as the amount of the late fee are contained within the association’s collection policy and procedure.
- Update the written policy and procedure, reflect the updating in board minutes, and communicate the change in the late fee to owners.
- Uniformly impose the late fees.