Academy/Collections & Delinquencies
Late fees
Two documents, not one flat number, set what your association can actually charge.
A late fee is a charge your association may add to an assessment after it becomes overdue. Most states cap how much and when, and your declaration can set a tighter limit than the statute allows. There is no universal dollar amount or percentage. Check your state's statute and your declaration before setting a number.
Two documents set the rule
State law sets the outer boundary. Most states cap the late fee an association may charge on a delinquent assessment, and cap how soon interest can start piling on top of it. The exact cap, and whether it is a flat dollar figure or a percentage, varies by state. Check your state's condominium or HOA statute.
Your declaration works inside that boundary. It can set a lower late fee or a later start date than the statute allows, but it cannot go above the statutory ceiling. If your governing documents are silent on a number, the statute usually supplies a default maximum, not a mandate to charge that much.
The typical sequence, illustrated
The order usually runs the same way everywhere, even though the numbers differ: the assessment becomes due, a grace period passes, a late fee may attach, and interest may begin accruing from a fixed point. California's statute shows the shape of it.
"10 percent of the delinquent assessment or ten dollars ($10), whichever is greater"
Source: California Civil Code § 5650, California Legislature via FindLaw
California also caps interest at 12 percent a year, starting 30 days after the assessment becomes due, unless the declaration sets something lower. These are California's numbers only. Your state may use a different formula, a different grace period, or no interest cap at all. Look up your own statute before you write a number into a collection policy.
Why payment order matters too
A late fee only matters if you also know where a partial payment lands. If an owner pays less than the full balance, does that money reduce the assessment, or does it disappear into fees and interest while the assessment balance never moves? California answers that question directly.
"shall first be applied to the assessments owed, and, only after the assessments owed are paid in full shall the payments be applied to the fees and costs of collection, attorney's fees, late charges, or interest"
Source: California Civil Code § 5655, California Legislature via Justia
Whether your state requires this order, leaves it to your declaration, or says nothing at all varies. Get the answer before you post a partial payment, otherwise your delinquency reports may be wrong even when an owner is trying to catch up. See Applying owner payments for the full picture.
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
Your declaration caps the late fee at $15. Your state statute allows up to $25. What can the board actually charge?
An owner sends a partial payment that does not cover the full balance owed. In a state that follows a California-style application rule, where does that payment go first?
A newly elected board member wants to start charging interest the day an account becomes late, just because it feels fair. What actually controls that timing?
Sources
- California Civil Code § 5650, California Legislature via FindLaw
- California Civil Code § 5655, California Legislature via Justia
Related elsewhere in the Academy
Collections & Delinquencies
See how interest stacks on top of a late fee, and where your own state draws that line, in Interest.
The dollar or percentage cap on a late fee, the grace period before one applies, the interest rate, and whether your declaration can set a different figure than the statute all vary by state and by your governing documents.