Late Fees Explained
The Master Review Board would like to extend its heartfelt appreciation to those homeowners who have consistently paid their assessments over the past years. Assessments are essential to an association because without them, the Association cannot function at the level necessary to preserve property values and maintain the community to an acceptable standard. Unfortunately, a number of individuals have not been consistent with their payments, and the Master Review Board has felt the need to implement a late fee policy.
A late fee system was implemented in January 2002.
Also, in response to numerous requests for clarification regarding noncompliance with the CC&Rs and the fines that can be imposed as a result, please be reminded that the procedure for violations is as follows:
- A homeowner is sent a "Friendly Reminder" letter about the violation.
- If the violation is not corrected, the homeowner will be sent a "Second Notice" the following month asking him/her to comply or face possible fines.
- If the violation is still not corrected, the homeowner is sent a "Final Notice" the following month. This letter informs the homeowner that a fine will be imposed on his/her property if the violation is not corrected. The letter also invites the homeowner to an Appeals Hearing, at which the homeowner can state his/her reasons for the noncompliance before a committee of peers.
- The Appeals Committee will try to work with the homeowner to correct the noncompliance. If the homeowner resists, his/her assessment account will be fined.
Currently, if homeowners are late paying their assessments, a late fee in the amount of $2.50 per month is applied to their assessment account. A $15.00 fine will be imposed each assessment period (twice a year) on accounts that are 15 days or more delinquent, in addition to the penalty of $2.50 per month.
The charges for late payment and penalties is enforceable in the same manner as unpaid assessments. The procedure for fines is as follows:
- A fine of $25.00 is imposed for each violation.
- This fine doubles every month until it reaches $200, at which time the Association can file a lien on the property.
Continue reading about the Arizona Planned Communities Act which further explains the Late Fee System.
Late Fee System
The Arizona State Legislature passed the Arizona Planned Communities Act in March 2000. The following excerpt from Section 33.1803 of the Arizona Planned Communities Act outlines where the Master Review Board derives the authority to impose this new late fee system. We have highlighted the pertinent passages:
Unless limitations in the community documents would result in a lower limit for the assessment, the Association shall not impose a regular assessment that is more than twenty percent greater than the immediately preceding fiscal year's assessment without the approval of the majority of the members of the Association. Unless reserved to the members of the Association, the Board of Directors may impose reasonable charges for the late payment of assessments. A payment by a member is deemed late if it is unpaid fifteen or more days after its due date, unless the community documents provide for a longer period. Charges for the late payment of assessments are limited to the greater of fifteen dollars or ten percent of the amount of the unpaid assessment. Any monies paid by the member for an unpaid assessment shall be applied first to the principal amount unpaid and then to the interest accrued.
If your account should reach the fining stage, Section 33.1803 of the Arizona Planned Communities Act again outlines where the Master Review Board derives the authority to impose the system of fines:
After notice and an opportunity to be heard, the Board of Directors may impose reasonable monetary penalties on members for violations of the declaration, bylaws, and rules of the Association. Notwithstanding any provision in the community documents, the Board of Directors shall not impose a charge for a late payment of a penalty that exceeds the greater of fifteen dollars or ten percent of the amount of the unpaid penalty. A payment is deemed late if it is unpaid fifteen or more days after its due date, unless the declaration, bylaws, or rules of the Association provide for a longer period. Any monies paid by a member for an unpaid penalty shall be applied first to the principal amount unpaid and then to the interest accrued. Notice pursuant to this subsection shall include information pertaining to the manner in which the penalty shall be enforced.