F.A.C. 61B-37 through 41 detail specific violations and their consequences related to F.S. 721, Vacation and Timeshare Plans. Examples of violation actions: ● Books and records [F.A.C. 61B-40.003-.004]. ● Reserve funding [F.A.C. 61B-40.0061]. ● Annual audit [F.S. 721.13(3)(e)]. ● Failure to arrange annual audit; failure to file [F.A.C. 61B- 40.007]. ● Receipts and disbursements [F.S. 721.13(3)(f) and 192.037(6)(e)]. ● Assessments; guarantees, common expenses; billing [F.S. 721.15; F.A.C. 61B-40.004]. For full details regarding any of the violation categories and consequences, refer to: ● F.A.C. 61B-15 through 25, 45 and 50 (condominiums).
Examples of major violations: ● Insufficient detail in the accounting records [F.S. 718.111(12) (a)11]. ● Failure to maintain sufficient accounting records [F.A.C. 61B- 22.002]. ● Failure to assess at sufficient amounts [F.S. 718.112(2)(g)]. ● Failure to maintain adequate fidelity bonding for all persons who control or distribute association funds [F.S. 718.111(11) (d)]. ● Failure to pay annual fees to the division [F.S. 718.501(2)(a)]. ● Using association funds for other than common expenses. [F.S. 718.115(1), F.A.C. 61B-23.003(3)]. For a complete list of minor and major violations refer to F.A.C. 61B-15 through 25, 45 and 50. In similar manner, F.A.C. 61B-75 through 79, Regarding the Cooperative Act address among other aspects, accounting, budgets, records, developer, assessing, common expenses, and other violations related to cooperative associations. Part of good financial management includes the policies and activities of collecting on the debts members owe the association. The three types of assessments members are subject to are routine, special, and service-reimbursement. Routine : Routine assessments are the funds members are charged periodically as their share of the cost for routine operations and annual reserves. Special : Special assessments are generally for unanticipated expenses. Service reimbursement : A service reimbursement is charged when a member is liable for damages caused to CEs, LCEs, Collection policy While association documents usually state when regular assessments are due, they rarely define the procedure by which the association will collect monies. Florida statutes outline the information the association should maintain for each member. Every association should develop and distribute a written collection policy. An association must treat all members equally in the collection of assessments. If the association differentiates among members in Collection policy components An effective collection policy should include the following components and should be shared with management, accounting, and the association attorney: ● Identification of assessments and charges that members routinely pay. ● The frequency and due date for assessments. ● The treatment of partial payments. ● The date after which the association will impose a late fee. Late payment consequences Consequences for late payments that an association may impose includes: ● Acceleration of assessments : If the association documents allow it, an association may accelerate the assessments of a member whose payment is delinquent. Accelerated assessments must include the amount owed plus the balance for the remainder of the budget year. For example, if the member’s April assessment is delinquent, the association requires the member to pay all assessments that are due for the period from April through December of that year, if the budget is prepared on a calendar-year basis. ● Interest : The Condominium, Cooperative, and HOA Acts provide that an association may charge a maximum of 18% simple interest, unless a lesser interest rate is stated in the documents. ● Late fees : The Condominium, Cooperative, and HOA Acts provide that an association may charge a late fee of $25 or
● F.A.C. 61B-75 through 79 (cooperatives). ● F.A.C. 61B-37 through 41 (timeshares).
COLLECTION PROCEDURES
or to other member’s property intentionally or negligently. Additionally, some associations provide special services at the member’s option, such as replacement of light bulbs, or minor plumbing repairs. Members are usually billed for these services separately from assessments. However, the association may collect these monies as it would any other assessment. Note that service reimbursement is not a term used by statutes. We are using it to describe a set of charges an association may charge a member, separate from routine or special assessments. Note: Service reimbursement is not a term used by statutes. We use it to describe a set of charges an association may charge a member, separate from routine or special assessments. its collection of assessments, it may lose the right to enforce its collection. Any communications that are related to the collection of delinquent assessments may be subject to the requirements of the Federal Fair Debt Collection Practices Act (15 USC 1692 et seq.), and F.S. 559.72 - Prohibited practices generally. The board should consult an attorney when attempting to collect a debt. ○ Example : The assessment is due on the 1st of the month; therefore, the payment is late if received after the 1st. ○ Grace period : A grace period is in effect between the 1st and the 10th of the month. A late fee is assessed after the 10th. ● Other collection actions and the procedures to take such actions, such as filing liens and suspending voting rights. 5% of the assessment amount, whichever is greater, if the association documents provide for it. ● Privileges and amenities : A condominium, cooperative, or HOA may suspend the rights of the member, or the member’s tenants, guests, or invitees, to use common areas and facilities. ● Returned check or non-sufficient funds (NSF) fees : Banks usually charge the association a fee when a member has insufficient funds to cover the amount of a check. The association may pass this cost on to the member. An association may also include a labor cost for notification and collection. ● Suspension : An association may suspend certain member’s rights if the member is more than 90 days delinquent in paying any monetary amount (e.g., assessments, special assessments, fines).
EliteLearning.com/CAM/Florida
Book Code: CAMFL1524
Page 6
Powered by FlippingBook