HOA Law late HOA dues

[beauchamp]

Hello,

My name is Chris i've just become the president of an HOA.

We have a lawsuit against one of the tenants, the problem is the former HOA Board was charging him the 18% PER MONTH and the compounding that.

Is this legal i feel we may be in a lawsuit that has basically drained our HOA for no reason.

Section 13.01 interest on delinquent assessments in the event of default in the payment of the monetary obligation to the association an owner shall be obligated to pay interest on the principle amount from the due date at a rate to be determined from time to time by the board, not to exceed the maximum permitted by law.
Section 13.02 default interest rate if the board shall refuse or fail from time to time to determine a rate of interest shall be lesser of eighteen percent 18% per annum or the highest rate permitted by applicable law.

So if he owes one year of dues at $300 a month does he owe 648 in late fees or 3900?

 

[army judge]

I always suggest that one never push the envelope in any endeavor.
We don't need laws to tell us what to do, if we use common sense.

The interest rate isn't meant to destroy a person, punish a person, but to cover your expenses of carrying the debt.
You aren't a bank, and don't really want to carry debt.
You simply seek compliance and prompt payment.

I suggest you set a month flat fee, say five bucks, or ten bucks, or use simply interest (avoid compounding interest).
You might wish to discuss this matter with your attorney, authorize him or her to negotiate, not litigate.
What's the point of bullying your members?


I suggest you offer the lesser of two evils, $648, but why not just make it a flat $6.00, or $10.00 per month late fee?

Doing it that way, the most he'd owe for a year of late fees would be $120.

I would never own a home in a development with a HOA.
I advise others not to purchase in such situations, too.
The fact that you're at least thinking about quieting thinsg down is a good sign, just do it.

In Texas, usury rates for many types of loans can vary drastically. The law that governs financing of motor vehicle sales caps the effective annual interest at 27%, while pawn shop loans can be 240% annually.

Consumer loans are made primarily for personal, family or household use. Consumer loans are authorized by Chapter 342 of the Texas Finance Code. Interest rates vary depending upon the type of loan and the amount borrowed.

The Office of the Consumer Credit Commissioner (OCCC) http://occc.texas.gov/ sets the maximum interest rate according to the guidelines set by state laws for many types of loans including rates for credit cards, pawn shop transactions and rent-to-own purchases. You can ontact the OCCC for additional information on interest rates.