Virginia HOA late fees

Two limits work together. The late fee is capped at 5% of the unpaid assessment, and it cannot be charged until the payment is more than 60 days late. So a board cannot pile on a fee the moment a check is a day late, and it cannot charge a flat monthly penalty that runs past 5% of what is owed.

Interest is a separate line. The 5% cap is on the late fee or penalty, not on interest the governing documents may authorize, so an owner can still owe interest on a long-unpaid balance. A late fee that compounds every month beyond the 5% limit, though, is not enforceable.

Read these before you make an offer:

• The late fee written into the CC&Rs or the fee schedule, and whether it tops 5% of an assessment.
• Whether the late fee is triggered before the 60-day mark.
• Any separate interest rate the documents authorize on unpaid balances.
• The seller's ledger for late fees already added to the account.

Late fees are small until a balance sits unpaid, then they feed the lien. A fee schedule that ignores the 5% cap or the 60-day window is also a quick read on whether the board keeps its documents current with state law.

An HOA Notes brief checks the late fee against the 5% cap and the 60-day rule, separates it from any authorized interest, and cites the page behind each finding.

Virginia Code section 55.1-1824 (Late fee cap). Late fees on delinquent assessments are capped at 5% of the unpaid amount per Virginia Code section 58.1-3915; this cap applies to any assessment or installment unpaid for 60 days after the due date; the association may not charge a flat dollar late fee that exceeds 5% of the unpaid assessment, nor impose recurring monthly late fees that compound beyond this limit. The association may charge interest on delinquent assessments at rates authorized by the governing documents (the 5% cap applies to the penalty or late fee, not separately authorized interest); the declaration may contain different provisions if expressly authorized.

When you read the disclosure packet, watch for a late fee of $25 per month on all unpaid balances, interest and penalties of 18% per annum on unpaid assessments, and flat late fees applied immediately at day 1 rather than after 60 days. HOA Notes flags each of these against the statute and tells you which restrictions are actually enforceable.