My condo association is charging 2 late fees. The first one, which is interest of 3% and the other one is a flat $25. The 3% is the one that is in the condo By-laws, the $25 is one they just made up and it isn't in any of the condo documents. The $25 one is about 18% of my condo fee. I do know that with a mortgage, if you are late, they can charge you a fee up to and equal to 3% of your mortgage payment. (GeneralLaws/PartII/TitleI/Chapter183/Section59) With condo law being under the same section, is it safe to say that they can only charge me 3% which would explain why 3% late fees are included in the condo by-laws? Adding a 25 dollar fee would require re-writing the by-laws and it would need to be approved by all owners.
You must read the CC&Rs of your HOA. Following them is mandatory and not optional. It will tell you what the HOA can and can not charge. Many CC&Rs allow this type of thing as long as it was voted in properly (so see how and when votes have to be taken by the board, is a majority required? etc) to enact something like this. Then, get the minutes of the meeting where the board took this action to make sure they complied. If they did not, then it was not a legal action. If they did, then they can do it unless there is a law in your state that says they can not (you can consult a local attorney for that). In my experience, since CC&Rs are a matter of private contract, the law and courts give great deference to them as long as they are not patently unreasonable and they do not violate the Constitution i.e., saying minorities can not live here etc.
Just because two laws are in the same chapter does not mean anything. In fact condominiums are under 183A which is actually a separate chapter. 183 - 59 is inapplicable to your situation.
The answer is in the condo documents. Associations also have the ability to adopt rules and regulations for the reasonable management of the organization. 3% sounds like a $4 late charge and frankly this does not come close to covering the time and trouble of tracking and following up on late payments.
You are entitled to ask where the authority for the charge comes from. You may not find it in the recorded condo documents, because the association may have adopted by-laws.
My answers are general in nature based upon very short, and often incomplete questions. Please do not rely upon my answers. If you need a legal opinion, you need to hire a lawyer who will take the time to fully understand your problem and then take the time to research the issues.