HOAleader.com - Tip of the Week - January 3, 2014
Published: Fri, 01/03/14
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Who Knew HOA Accounting Was So Complicated?
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In this week's tip, we give you leg up in figuring out how to
assess late fees. It's not as easy as most people think.
How you determine the application of late fees in your HOA will
depend on your state and governing documents. "This is one of
those really important areas that requires people to understand
the law specific to their state," says Debra A. Warren, CMCA,
CCAM, PCAM, senior vice president at Dallas--based Associa(r), a community association management company with offices
throughout the United States, Canada, and Mexico. "And the laws
on this do vary according to state. It doesn't matter what your
documents say. The state law prevails."
If your state has no laws governing when to apply a late fee--as
in Florida, according to Jed L. Frankel, a partner at Eisinger,
Brown, Lewis, Frankel & Chaiet PA in Hollywood, Fla., who advises
community associations--then follow your governing documents.
That's also the case in Nevada. "In Nevada, late fees are
governed by associations' governing documents and usually a
collection policy," says Steven Parker, president of
FirstService Residential Nevada in Las Vegas, which manages
hundreds of community associations.
Typically, state laws and governing documents require that you
assess late fees according to common rules. Here are two:
1. No late fees are assessed during the specified grace period.
"In almost all cases, assessments are due on the first of the
month and become late, most often, on the 15th of the month,"
says Parker. "Some say the grace period ends on the 10th. Some
say the 20th of the month."
2. The final date of the grace period isn't the "real" due date.
"A lot of people don't understand that the fee is late if it
comes in any time after the due date," says Bill Worrall, vice
president of Hollywood, Fla.-based FirstService Residential,
formerly The Continental Group; it manages 1,300 condominium and
homeowner associations totaling 310,000 residential units. "If a
payment is due on the first and arrives on the second, it's late.
Governing documents typically provide for a grace period, but
that's simply to allow the check to clear the bank. You're late
if you're not paid on the first."
It gets even more complicated from there. Get all 7 Steps to
Properly Account for Late HOA Fees in our new article:
http://www.hoaleader.com/members/937.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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7 Steps to Properly Account for Late HOA Fees
An HOAleader.com reader has asked for some guidance on how to account for
late fees. It sounds easy, but it's actually fraught with complications.
For example, when is a payment considered late? In California, for
instance, state law says an assessment is delinquent 15 days after it is due.
So if a payment is due on the first, is it considered late on the 16th of the
month? And generally, if a payment is three months delinquent, can a late fee
be applied for each month? What other catches might trip up HOAs when it comes
to computing late fees? Here our experts give readers insight on how to
proceed.
Click here to read full article:
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When to Remove an HOA Board Member From Office--But Not the Board
An HOAleader.com reader asks, "[I'm c]urrently on a HOA board in Arizona,
which is part of a large condo complex. Our current president has taken
numerous actions that are not in the best interest of the owners. What is the
proper procedure to remove the current president from that position and
move him to strictly a board member role, knowing that he will most likely
quit? (Big ego.) Here, we answer two questions: Is that typically how it's
done: you remove a director from office--but not the HOA board--by a
majority vote of the board? Also, that's a serious step to take. So when is
removing a board member from office warranted, especially since you'll
still have to work with that person on the board?
Click here to read full article:
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Can You Screen and Reject Potential Owners? Florida County Says Yes, But Say
Why
Commissioners of Broward County, Fla., recently passed an ordinance
requiring HOAs to provide written notice to rejected applicants detailing
the reason for the rejection. Here we explain the ordinance and discuss
whether other states allow associations to approve or reject potential HOA
purchasers and renters, and the pros and cons.
Click here to read full article:
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Boost HOA Meeting Attendance with These Smart Tips
In this week's tip, we whet your appetite with two ideas to get your HOA
meetings back on track.
Click here to read full article:
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Six Tips to Run HOA Meetings More Effectively
Still haven't nailed down HOA meetings so they run like a well-oiled
machine? Here are six tips from our experts to make your HOA meetings run more
smoothly--and why that's important in the first place.
Click here to read full article:
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