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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Real Estate Law
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Experience:  JA Mentor
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I was two weeks late on my HOA payment. It states on the ticket

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I was two weeks late on my HOA payment. It states on the ticket stubb to pay a $15 late fee if payed after th 15th of July. I had forgot to pay the bill but as soon as I noticed I missed it was payed with the $15 late fee. The check posted to my account on the 6th of August. I recieved a demand letter for the amount of the dues plus late $15 late fee plus $50 for the demand letter. The letter stated that if not paid a lein would be placed on my home and I would be charged legal fees. Is this legal. I never recieved any communication regarding the late payment other than the demand letter and it was only a couple weeks late. Seem more like extortion to me.

My name is XXXXX XXXXX I'd be happy to answer your questions today. I'm sorry to hear that this happened.

Ariz. Rev. Stat., Section 33-1256 unfortunately does give the HOA a lien for unpaid assessments, which includes collection costs and reasonable attorney's fees. If the letter was sent before you paid, they are allowed to collect the $50 fee, even if you paid before getting the letter. If they mailed the letter after Aug. 6, then you have an argument that the letter did not need to be sent and that you therefore are not responsible.

The problem is, the law gives HOAs a lot of power and authority. If you fight fees, and they continue trying to collect, they're allowed to keep charging attorney's fees. I've seen cases where a person was ordered to pay thousands of dollars in attorney's fees to dispute assessments of less than $50. It's not fair, but it IS allowed. For that reason, some people choose to pay the assessment, under protest (written on the check), then sue for a refund.

If you have any questions or concerns about what I've written, please reply so that I may address them. It's important to me that you are 100% satisfied with the service I provide. Otherwise, please rate my service positively so that I get credit for answering your question. Thank you.
Customer: replied 3 years ago.

Are there no regulations on timelines and charges which define "reasonable". In my opinion the late fee is the penalty and to charge $50 two weeks after you asses a late fee is unreasonable. Also, if the law is going to be written to give that much power to a company who in the end works for the home owners they should require a reasonable effort to notify the home owner that they are late. Also, how is reasonable fee defined? The cost of paying a $10/hr admin to take 15 min to type a name and address into a letter template is a few dollars. So the $47 above that is profit. That also, does not seem reasonable. Do you have any other documents that you could refer me to. Thre link Ariz. Rev. Stat., Section 33-1256 is written very general and has no details in the document.

I certainly understand why you would feel that the amount charged is unreasonable, but the judge is looking at what other lawyers charge, not based on what a non-lawyer would find it reasonable to pay.

Reasonable is based on the attorney's hourly rate and the amount of time required to send a letter. It is not compared to the fee itself or how long that the fee was overdue. Since most lawyers charge over $100/hour, a $50 fee to draft and mail a letter would likely be considered reasonable. Even if you could prove that the letter was written by an admin making $10/hour, lawyers don't bill admin work at what they pay the person. They're allowed to charge whatever their usual hourly rate is for that type of work.

These things are determined on a case-by-case basis. The extensive research required to find similar cases where a judge found that specific fees was or was not reasonable unfortunately is beyond the scope of this site. It's not an issue where I could just point you at a statute. But in my experience, a judge will most likely find that a $50 fee is reasonable and you could end up spending significantly more to fight it, if the letter was sent before you paid the past-due amounts.
Customer: replied 3 years ago.

Sorry to keep bothering you on this. But a last note, the letter was written by the Management company and not an attorney. No attorney signiture is present on the demand letter.

If the letter wasn't signed by an attorney, then the $50 isn't an attorney's fee - if they want to collect an attorney's fee, they need evidence that they paid a lawyer to do the work. Otherwise, they can only charge any late fees/interest permitted by the HOA documents.
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