|Dues & Assessments|
Dues & Assessments
Homeowners associations are required to create and distribute a budget to its members. The budget determines how much money the association is going to need to operate for the following year. Each member of the association is billed for their share of the budgeted amount through the process known as "assessments." Regular assessments are typically paid by monthly invoices or coupons supplied by the association
In the ideal world, the association sets a realistic budget and then collects sufficient money to pay its bills through the member assessments. If the assessments that are collected are insufficient to pay the association's bills, the board of directors is allowed to levy a "special" assessment. Typically, special assessments are levied for major repairs, replacement, replacement or new construction of common area, or other unanticipated expenses which are not covered by the regular assessments. The association's governing documents and applicable state laws provide procedures for increases in the amount of regular assessments and limitations that may apply.
Other assessments that may be imposed by the board of directors may be in the form of a monetary penalty against an individual owner for such things as reimbursement to the association for damage that may have been caused to common area, or which are imposed as a disciplinary measure for a violation of the associations governing documents.
Some associations also have other fees or special charges to members for services and/or activities that are not customary such as charges for the use of a common area clubhouse or other amenity for a private function. Such fees and charges are usually paid on a pay-as-you-go basis and generally do not become a lien on the lot or unit owner's separate interest.
Assessments that are not timely paid become delinquent and may be subject to additional charges such as late fees, penalties and interest. State laws impose strict requirements relative to the enforcement of and collection of assessments and associations are required to provide their members with copies of their assessment collection policy on an annual basis. Delinquent assessments that are not paid may be enforced by the imposition of a lien on a member's separate interest and ultimate foreclosure of that lien. Liability for unpaid assessments can also be enforced through a civil action against the owner of the separate interest.
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