A Court in Louisiana recently took up the issue of what to award in interest, late fees, attorneys’ fees and costs when a Unit Owner paid the underlying assessments, but refused to pay anything more. (English Turn Property Owners Association v. Contogouris, 228 So.3d 793 (2017)). In this case, a Unit Owner and its Homeowners’ Association (“HOA”) were embroiled in litigation concerning four years of unpaid assessments, along with interest, late fees, attorneys’ fees and costs, the latter being authorized by the Association’s governing documents. The parties agreed to a payoff concerning the regular assessments, and that a trial would decide what other amounts were owed as a result of the Unit Owner’s failure to regularly and timely pay assessments.

The Trial Court held that as a result of the Association’s poor record keeping, and the Unit Owner’s failure to produce documents supporting her contention that she paid regular assessments, the amount sought by the Association for late fees, interest, attorneys’ fees and costs would be awarded at a reduced amount.

The Appellate Court awarded interest from the date of the delinquent assessment. However, because of the Association’s poor bookkeeping, and its failure to actually include its late fee policy in its official covenants and transmit it to the owners, no late fees were awarded. The Appellate Court then sent the case back to the Trial Court for an award of attorneys’ fees, interest and costs to be appropriately calculated.

Lesson: Make sure your Association’s documents include an enforceable collection policy, that includes the proper language for interest, fines, late fees and attorney fees.

If you have any questions, please feel free to contact us.