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Legal maximum on HOA late fees and collection charges?

Minneapolis, MN |

In August of 2009, my HOA's management company changed their mailing address, and some of my automated payments were lost in the mail. My bill payment service resolved the issue and continued making payments. I didn't find out about it until several months later.

When I discovered the problem, I immediately paid the 2 missing payments and have remained current ever since. However, my HOA continued stacking late fees for every month. They have a sheriff's sale scheduled for next week and intend to foreclose. My dues are current but to keep my property I must pay $1925 in late/collection fees and $2500 for legal fees!

* Is there a limit to to how much a monthly late fee can be?
* Is it legal to stack late payments in this way?
* How do I fight this?

Attorney Answers 1


Something isn't adding up here. You are current on ALL payments, but the HOA is still moving forward with a foreclosure to ONLY collect fees (late, attorney, etc.)? Have you spoken to the HOA? Do you know what their thinking is on this - what would the purpose be for them to foreclose for what is, essentially, a non-issue. Clearly, they are having a tough time with the economy, and they are trolling for dollars due to all the people who have stiffed them over the past few years. The "limit" on their fees is what is outlined in the HOA agreement, which I'm sure allow for the recovery of collection costs, attorney's fees, etc. Frankly, you need to immediately hire an attorney and see if you can stop the sheriff's auction, because once that happens, you are in a much-worse situation.

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The question is whether the stacked late fees are considered late. Even though I caught up on my dues in July of 2010, I had an outstanding balance for the related dues legal fees. If they applied subsequent payments against the late/legal fees then they could say that I haven't been paying my dues. Thus the've been adding another $50 late penalty each month. They have hired an attorney for the foreclosure and added their fees to my statement. So the HOA can produce a statement indicating that I'm $4500 in arrears with my dues. But I can use the same numbers to produce a statement that shows my dues current and demonstrates that the $4500 is for late/legal fees. My question is whether it's legal to charge late fees against the late fees instead of accepting the monthly payments as dues. If they hadn't stacked the late fees then this never would have happened.

Michael J Corbin

Michael J Corbin


That depends entire on the HOA agreement, which I'm virtually certain allows for the payment of the late fees, etc. first as opposed to the ongoing assessment being paid - every one I've ever seen has this payment priority outlined in it. Take your HOA agreement to a local attorney ASAP to confirm and see if they can get the auction stopped and settled for some amount. You're against the gun here because the sale is next week.

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