Interest and late fees are different
Interest
A time-based charge on an unpaid assessment balance. An annual rate must be converted to the applicable period; an annual percentage is not a monthly percentage.
Administrative late fee
A separate charge associated with a delinquent installment. Check the authority and amount before adding it to an owner’s ledger.
These charges help address delinquency, but should not become a substitute for a realistic operating budget or an accurate collection process.
Clear accounts build confidence. Consistent practices build trust.
The Florida condominium rules
Under §718.116(3):
- Unpaid assessments accrue interest from the due date at the declaration’s rate, within legal limits. If the declaration states no rate, the default is 18% annually.
- A late fee requires authority in the declaration or bylaws. The maximum is the greater of $25 or 5% of each delinquent installment.
- Payments apply first to interest, then administrative late fees, then collection costs and reasonable attorney fees, and finally delinquent assessments—even if the payer gives different instructions.
This page concerns Florida condominiums under Chapter 718. Do not substitute HOA or landlord-tenant fee rules.
Simple examples
| Illustration | Calculation | Result |
|---|---|---|
| $400 unpaid for 30 days at 18%, using simple interest and a 365-day year | $400 × 0.18 × 30 ÷ 365 | About $5.92 interest |
| $400 delinquent installment: compare statutory late-fee cap amounts | $25 versus 5% × $400 = $20 | $25 maximum |
| $800 delinquent installment: compare cap amounts | $25 versus 5% × $800 = $40 | $40 maximum |
Illustrations assume lawful authority and applicable timing. A maximum is not automatically your association’s adopted charge. Actual interest depends on the authorized method, days, balance changes, and payments.
A partial payment may leave principal unpaid
Suppose a verified account shows a $400 assessment, $6 interest, and a $25 late fee, with no collection costs. A $400 payment clears $31 in charges and $369 of principal, leaving $31 of the assessment. Ask for an updated payoff figure rather than assuming the regular assessment amount clears the account.
Do not add the maximum fee again every month merely because the same installment remains unpaid. Have counsel confirm the ledger’s treatment of each installment and avoid unsupported recurring charges or interest on fees.
A reminder is not every required collection notice
§718.121 requires a written notice of late assessment giving a 30-day opportunity to pay without attorney fees before requiring assessment-related attorney fees. It must follow the statutory form and first-class-mail requirements, including the unit address when different from the address of record.
Except where Chapter 718 provides otherwise, a separate notice and 45-day waiting requirement apply before recording a lien. A courtesy email does not replace these notices. Foreclosure has additional requirements.
Invoices and statements also have delivery requirements. Before changing their delivery method, the statute requires advance notice and the owner’s affirmative acknowledgment. Check those requirements before switching an owner to email-only billing.
A practical board and manager checklist
- Verify the authority. Keep the relevant document provisions and counsel’s instructions with the accounting procedure.
- Set up the ledger carefully. Record each installment, due date, payment date, interest period, and separate charge category.
- Check before notifying. Reconcile bank deposits and electronic payments; investigate credits, posting errors, and payment-routing problems.
- Explain the balance. Give the owner an itemized statement showing principal, interest, fees, costs, credits, and the calculation date.
- Document decisions. Ask counsel about authority for waivers or payment plans. Use consistent criteria and record the authorized decision rather than making informal promises.
- Escalate through the proper process. Retain notice and mailing records. Refer disputed charges or legal collection steps to qualified professionals.
Recommended practices: make payment instructions easy to find, provide a contact for correcting errors, and communicate privately and respectfully. Owners may face illness, travel, or a banking mistake; accurate records help resolve the issue without abandoning consistent collection practices.
Firm on process. Respectful with people.
Questions owners should ask
- What installment is unpaid, and what was its due date?
- Which document provision establishes the interest rate and late fee?
- What dates and balance were used to calculate interest?
- Have all payments and credits been posted correctly?
- What amount will fully clear the account on my planned payment date?
- Who should receive proof of payment or a written dispute?
Keep payment confirmations and notify the association promptly if something looks wrong. A disputed charge should be reviewed, but do not assume that a dispute stops all account activity. Obtain advice before withholding assessments.
Continue learning
Delinquent ownersEstoppel certificatesBack to Finances & ReservesReviewed October 17, 2026. Sources: Florida Statutes §§718.116(3) and 718.121, linked above. Educational information; verify current law and the association’s actual governing documents with counsel before imposing charges or taking collection action.
Verify a charge before escalating the account
Use a review record identifying the installment, due date, unpaid principal, rate authority, calculation period, applicable late-fee provision, payments, credits, and reviewer. Retain the calculation behind the owner’s itemized balance.
- Check recent deposits and payment-processor reports for unposted receipts.
- Separate principal, interest, late fees, collection costs, and attorney fees.
- Record any authorized correction or payment arrangement and promptly update all parties using the ledger.
- Keep a separate notice register with the document version and mailing evidence.
Use mailing and postmark guidance for evidence questions and careful communication for clear correspondence. An informal discussion or disputed balance does not establish a new legal deadline; obtain counsel’s case-specific instructions.
Connected financial and community resources
Authority matters: Florida law establishes statutory duties; governing documents define association authority subject to law; contractual duties come from applicable agreements. UCO procedures address separate UCO functions. The added registers and workflows are Board Synergy recommended practices, not prescribed statutory forms. Historical articles provide background rather than current legal instructions.