First of all, you need to understand that homeowners associations (HOAs) rely on timely payments to cover expenses for a specific period of time. It could be as simple as monthly utility bills, landscaping services, common area maintenance, management services etc. Timely payments are especially critical in the beginning of every budget year, when operating funds, which could be used as a buffer, are at its lowest.
Every HOA has a specific date provisioned to receive payments from homeowners for a specific period it could be an entire year, a quarter, or a month. Each association also gives a grace period in case homeowners are not able to make their payment on time. Using this grace period on a regular basis is not recommended. If a homeowner sends his/her payments too close to the end of a grace period, there is a big chance the funds will reach destination too late and could cause a delay in payments for utilities, or other services.
Very often board of directors or HOA managers receive upset phone-calls or emails from delinquent homeowners stating that it is unfair to charge any fees only because a payment came in late. Let’s say the Board or the manager decides to waive the fee, part of it does not disappear and someone still has to pay for accountant services, assistant services, mailing charges [in case a delinquency letter was mailed to a homeowner]. All these charges become HOA’s responsibility and are paid from operating funds – the same dues diligent and responsible homeowners pay on timely manner. Let’s say delinquent charges are only $35.00. For a homeowner, it may seem like waiving such a small amount should not be that big of a deal. However, if we take it to a bigger scale and say that 10 homeowners were late with their payments, and in this case, you are the one who is never late with payments. Why should your money be used to cover $350.00 worth of services accrued because of your neighbor’s irresponsibility? Everyone would agree that it would be better to use extra funds to improve common areas, organize community events or hire a better vendor for a specific project.
Finally, I would like to mention that everyone understands that “life happens” and unpredictable circumstances may occur to any of us. If you know that you will be late with your payments, please do not hesitate to contact your board of directors and your management company. I am sure they will help you come up with a plan to go through your hardship. I hope this article helps someone see a bigger picture and make someone aware of consequences of late payments.