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Does your building charge late fees to the sponsor if his payments are late? If so, what is your monthly late fee or percent?
The power and terms to implement a late charge is normally stated in the prop lease. Please review and understand your options. If your prop lease states interest charge, the fee would have to match the acceptable level of interest. If your governing documents don’t allow for a late fee or place restrictions, I would approach with caution.
We just implemented a late fee in our building which is based on interest rate – we took the lowest maintenance and came up with a standard fee – though it’s relatively low of $15, it’s what our governing docs and the law allow for in our building.
If your sponsor is paying late, this may signal a potential issue, my suggestion would be (1) meet with them and reinforce that your trying to work to improve the building and need the funds on time in accordance with the governing docs (2) ask for the latest sponsor amendment – in fact your bylaws or prop lease or offering plan may require them to provide it. This will display the income vs. maint expense.
I hope this helps.
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$50 per apartment he owns, which is our standard late fee.
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