No good deed goes unpunished, or so the sardonic saying goes. It certainly seems fitting in the context of this month’s topic which involves the charging of interest on delinquent assessments.
Who would suspect that their association could get into legal trouble for refusing to calculate and charge interest when collecting assessments from delinquent owners? Some Boards, for example, may feel that charging interest on past-due assessments is wrong and may create a moving target for the delinquent owner who will never be able to catch up. And yet, pursuant to DBPR Rule 61B-21.003(2), the Division of Florida Condominiums, Timeshares and Mobile Home may fine a condominium association anywhere between $10 and $30 per unit, or a minimum of $500, whichever is greater, for its failure to charge interest on past-due assessments.
The Division’s reasoning here is that failure to charge interest is a violation of Section 718.116(3), Florida Statutes. The statute in question merely states: “assessments and installments on assessments which are not paid when due bear interest at the rate provided in the declaration, from the due date until paid.” If asked, the author would interpret the statute as allowing an association to charge interest, but not forcing it do so under the threat of a penalty; regardless, the Division believes charging interest is a must.
The question then becomes: can a condominium association waive interest as part of a settlement satisfying the delinquency? It’s a pretty safe bet the association would not incur a fine under this scenario, so long as the interest is correctly calculated and charged to the owner’s account, and the Board enters into the settlement on an informed basis, in good faith and in the honest belief that the settlement is in the best interests of the association.
Please note, the above discussion pertains only to condominium associations as opposed to homeowners’ associations. For a full list of violations covered by DBPR Rule 61B-21.003, please contact: firstname.lastname@example.org.