Florida HOA and condo late fees and interest

The cap is a comparison. Take 5 percent of the installment that was late and compare it to $25. The bigger number is the most the association can charge for that installment.

On a $300 monthly HOA assessment, 5 percent is $15. That is less than $25, so the cap is $25. On a $900 quarterly condo assessment, 5 percent is $45, so the cap is $45. A flat $75 late fee would be over the line in both cases.

There is a condition first. The fee has to be authorized in the declaration or the bylaws. If neither document provides for a late fee, the statute does not let the board add one. Both statutes also take the late fee outside the state usury law, and the HOA statute adds that a late fee is not a fine.

Interest is separate from the late fee and runs from the due date until the assessment is paid. The declaration or bylaws can set the rate, but the statute says that rate cannot exceed the rate allowed by law. If the documents say nothing, the rate is 18 percent a year.

The statute does not put a number on the rate allowed by law. Florida's general usury statute, section 687.03, caps interest at 18 percent simple a year on most debts up to $500,000. If a declaration sets a rate above 18 percent, ask a Florida attorney before you accept it as enforceable.

For HOAs, a 2024 law (chapter 2024-221, effective July 1, 2024) added that the default interest is simple and that compound interest may not accrue on unpaid assessments, whatever the declaration says. At 18 percent simple, a $900 assessment that sits unpaid for two months picks up $27 in interest. The condo statute does not contain that compound interest sentence.

Florida fixes the order. A payment is applied first to interest, then to the late fee, then to collection costs and reasonable attorney fees, and last to the assessment. Writing "for March dues" on the check does not change that. The statute overrides any note or endorsement on the payment.

Say you owe a $900 assessment, a $45 late fee and $27 in interest, and you send $900. The association applies $27 to interest and $45 to the late fee, which leaves $828 for the assessment. You still owe $72 of the assessment itself, and interest keeps running on it.

Attorney fees have their own gate. Before an association can require you to pay attorney fees on a past due assessment, it has to mail a notice of late assessment that gives you 30 days to pay without them (720.3085(3)(d) for HOAs, 718.121(5) for condos).

Read these before you make an offer:

• Whether the declaration or bylaws authorize a late fee at all.
• The late fee amount, measured against the greater of $25 or 5 percent of your installment.
• The interest rate in the documents, and any rate above 18 percent.
• For an HOA, any language that compounds interest on unpaid balances.
• The estoppel certificate and seller ledger for late fees and interest already owed on the unit.

Late fees and interest on the seller's account should show up on the estoppel certificate, and you want them settled at closing. A fee schedule that runs past the statutory limits also tells you how closely the board tracks Florida law.

An HOA Notes brief reads the declaration, bylaws and fee schedule, compares the late fee and interest terms against 720.3085 or 718.116, and cites the page behind every finding.

Florida Statutes section 720.3085(3) and section 718.116(3) (Late fee and interest limits). An HOA (720.3085(3)(a)) or condo association (718.116(3)) may charge an administrative late fee only if the declaration or bylaws provide for it, and never more than the greater of $25 or 5 percent of each late installment; interest runs at the rate in the declaration or bylaws, which may not exceed the rate allowed by law, or at 18 percent per year if no rate is provided; an HOA may not charge compound interest (720.3085(3)); every payment is applied first to interest, then the late fee, then collection costs and attorney fees, then the assessment, whatever the owner writes on the check. The association may charge interest from the due date and, where its documents allow, one administrative late fee per late installment up to the cap; a late fee is not a fine and is not subject to the usury law in chapter 687; attorney fees require the separate 30-day notice of late assessment (720.3085(3)(d), 718.121(5)).

When you read the disclosure packet, watch for late fee of $50 per month regardless of the installment amount, late fee charged although the declaration and bylaws authorize none, interest compounds monthly on the unpaid balance, and payments applied first to the oldest assessment before interest and late fees. HOA Notes flags each of these against the statute and tells you which restrictions are actually enforceable.