Regular and special assessments levied pursuant to an association’s governing documents are delinquent fifteen (15) days after they become due, unless the CC&Rs provide for a longer time period, in which case the longer time period applies. (Civ. Code § 5650(b).) When an assessment is delinquent, an association may recover all of the following from the delinquent member:
- Late Charge – A late charge not to exceed ten percent (10%) of the delinquent assessment or ten dollars ($10), whichever is greater (unless the CC&Rs specify a lesser amount, in which case the lesser amount applies);
- Interest – Interest on the delinquent assessment and the collection fees and costs (including reasonable attorney’s fees) incurred by the association, at an annual interest rate not to exceed twelve percent (12%), commencing thirty (30) days after the assessment becomes due (unless the CC&Rs specify a lesser interest rate, in which case the lesser interest rate applies); and
- Collection Costs – Reasonable collection fees and costs incurred in collecting the delinquent assessment (including reasonable attorney’s fees). (Civ. Code § 5650(b)(1)-(3); See also “Collection Fees & Costs.”)
No Interest on Unpaid Monetary Penalties (Fines)
Civil Code Section 5725 prohibits an association from characterizing or treating an unpaid monetary penalty (fine) “imposed by the association as a disciplinary measures for failure of a member to comply with the governing documents, except for late payments” as a delinquent assessment. Therefore, the authority to impose interest in connection with delinquent assessments does not extend to such unpaid monetary penalties.
Interest on Unpaid Reimbursement Assessments
Reimbursement assessments (aka “compliance assessments”) refer to special assessments levied against an individual member’s separate interest to reimburse the association for its costs incurred in repairing damage to the common area caused by that member, his guest or tenant. (See “Reimbursement & Compliance Assessments.”) Where an association’s CC&Rs allow for the imposition of reimbursement assessments as a form of special assessment, the association may be able to impose interest on a delinquent reimbursement assessment pursuant to Civil Code Section 5650(b).
Where the CC&Rs do not contain provisions addressing reimbursement assessments, Civil Code Section 5725(a) allows the board to impose them in the form of “monetary charges.” However, Civil Code 5725(a) does not explicitly address whether such “monetary charges” may be characterized or treated as assessments for which the association may charge interest pursuant to Civil Code Section 5650(b).
