I fell behind on my HOA dues- not going 2 make excuses I shouldn't have let it happen & have no problem paying reasonable late fee. I finally got up to date this week; was hard to pay back, i was throwing hundreds a month extra at it to catch up but balance just didnt drop as much as I would have thought. Turns out they charged 10%/month compounding monthly! I remember vote to charge 10% late fee but thought was APR since that's far more than lenders & others are capped at. I'm hoping there's a law this clearly violates. If so my plan- inform HOA of law & tell them they can quietly settle with me. Otherwise we go 2 small claims court & I educate neighbors how they could have been illegally overcharged- it would cost them a LOT to repay a large % of everyone' s late fees. Advice? Thanks!
Since you indicated there was a vote in the past, I am going to assume that the vote also subjected the association to the Georgia Property Owners Association Act (POa aCT). With that assumption, there is a maximum that can be charged. First, the association can charge a 10% late fee for any installment not paid on time and outside of any grace period. That is a one time fee. Second, the association can charge 10% simple interest on assessments and late charges from the date the assessment or late charge came due. My reading of the statute is that they cannot compound the interest. If they are doing so and have demanded compound interest, a court might disallow any interest at all. There is a 20 year old or so Georgia case that come to that conclusion for a condominium association, and the statutory language for POA Act associations is the same as for condominiums. They can also collect collection costs and attorneys fees. If they are posting those amounts to your account and also charging interest on those fees, you could challenge the interest, but whether that is proper is a little more open to question. It may depend on whether the board has formally assessed you for those costs or whether the management company or association is simply adding them without a formal assessment.
If you take the issue to court, the association may defend on the basis that payments already made were voluntary and non-refundable. There is a legal theory that would support such a claim, but if the association was filing or filed liens against your property or suits, you might counter the defense showing that the association had taken steps to impair your title to your property, and that should take it out of the realm of a voluntary non-refundable payment.
This answer is for general purposes only, and it does not create an attorney-client relationship.
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