HOA - accounting issues and late fees

3 Replies

I have a multiunit (6 units). The condo association is the worst I have seen. They don't send invoices for association fees and there is no web site to track account. Sometimes they just don't cash out the checks which I regularly send or at times cash out after 1 or 2 months. This messed up my accounting and even though I kept sending  the checks some of which were not cashed hence caused association fees accumulation for the months when checks were not cashed out. 

Out of sudden one day they sent a letter thru their attorney demanding all the left over money with invoice no, Late fees and attorney fees (again none of these invoice no came to us). The threat is that if we don't pay then they will initiate a law suit.

Whis is your advice in this case - should write a letter to attorney that we did not receive any invoice and we have been paying with carbon copies of checks etc. Or take a attorney? What are my options and a remedy which I can have.

Any advise will be useful.

Thanks a lot.

DK

I would start off with no attorney.  I'm not sure what state you're in but MD and DC both require that owners who are delinquent be notified.  The excuse that you've never receive any late notices won't get you very far, attorneys hear this all day long.  This is why I always tell people to document everything.  Copies of the checks are best so there is proof that you paid, especially when you know you're dealing with a horrible management company that can't get their act together.  Most courts view associations as the big, bad wolves who routinely overstep their bounds so you've got that going for you, though you won't be able to rely on that alone.  Once you've got your accounting squared away, get with your neighbors and attend a board meeting as a group to voice your concerns, volunteering to head a committee to find a new management company.

If you feel like you have the documentation to show you did make the payments just call the HOA's property manager and walk through it on the phone.

Going forward I recommend setting up an automatic bill pay with your bank to send the HOA payment. Saves you time and provides all the documentation you'll ever need.

You mention that they have been slow to cash your checks, but you have sent those checks regardless. How many months are you delinquent in terms of not sending any checks? Attorneys don't often come after unit owners for outstanding late fees, they come after them if they are more than 30-60 days late on the fee assessment altogether. If they are somehow coming after you for the 30-60 days and they are in possession of checks they have not cashed, you should clear that up. But if there is an outstanding balance from a period where you missed a month or several of paying the assessments, your considered delinquent from that month you didn't pay. So ask for an accounting of your payments and see when you did pay and miss payments to see if they are accurate. If you skipped some, you'll be on the hook for late payments. But they should have made a good faith effort to notify you that you have an outstanding balance before involving an attorney assuming you did plan on paying that balance off in full. If good faith effort was made at some point in time to communicate with you and you still didnt come current. The attorney fees might be justified and you will have to pay those as well. Sometimes when attorney collection has started, your only option is to respond to attorney collection as HOA might not be allowed to speak to you anymore once collection has started. So be prepared to have to chat with attorney to collect information on the past due information and what is required to become current. Good luck.

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