Can Our Community Association Refuse Late Payments?
When someone buys a home or a condominium that is governed by an association, they consent to abide by the rules and regulations put out by that association. This includes paying dues or special assessments (extra payments levied for a specific purpose) – and a failure to comply can get an owner in hot water. That said, some associations will choose to refuse late payments if they become a possibility after the account has been referred to collection. This is generally not a good idea for the association, despite it being within their power to choose that route.
Why Refuse Payments?
Every HOA member or condo owner must pay assessments, both standard and special. Assessments are sometimes called dues, and they are the owner’s percentage of the budget needed to keep up the association premises in good order. Special assessments are sometimes required, but this usually happens when a major repair is needed or when a new amenity or other construction is happening. They are usually due within a set number of days of being assessed, with interest beginning to add up if an owner is not on time with their payment.
Ostensibly, community associations that refuse late payments do so out of a wish to refrain from interfering in the collections process. That said, it is not uncommon for associations to cite other reasons – or to give no reason at all, in extreme cases. While there is no specific statutory language granting the association the right to refuse a late payment, the association’s governing documents (such as a Declaration of Condominium, or the conditions, covenants, and restrictions of the association) may address that, or it may not.
Accept Or Reject
In theory, a community association may refuse to accept late payments, but if it chooses to do so, it must reject the payment out of hand. The case of Rajabi v Villas at Lakeside Condo. Ass’n (2020) involved a condominium owner who fell behind in his assessment payments, but made an effort to pay them late. After approximately 2 years, Rajabi became aware that the association was accepting his payments, but instead of putting them toward his debt, it had placed the money in a ‘trust account’ with their attorney. Yet the association continued to charge interest and fees as if no payment had been forthcoming.
The Fifth District Court of Appeals ruled that the association was in violation of both its own Declaration of Condominium, and of state law. Sec. 718.116(3) requires late payments, once received, had to be applied to the interest on Rajabi’s obligation (and then, if some was left over, to administrative fees, attorney’s fees, and the delinquent assessment itself). Simply taking his money and holding it in a trust account while still charging the same amount of interest rendered placed the association in violation of the law. Your association may wind up in the same place if it engages in the same tactics.
Contact A Tampa Community Association Attorney
It can be difficult for a community association, especially a small association, to know the proper procedure with regard to delinquent payments. However, it is generally in your best interests to at least consider accepting these late payments instead of pursuing litigation. If you have questions or concerns on behalf of your association, a Tampa community association attorney from the Seward Law Office may be able to assist. Contact our office today to schedule a consultation.