Florida Community Association Manager Practice Exam

What is the maximum late fee an association can charge?

1. $10 or 1%

2. $25 or 5%, whichever is greater

3. $50 or 2%

4. $20 or 10%

The correct answer is: $25 or 5%, whichever is greater

The maximum late fee an association can charge is often determined by state regulations, which in Florida allow a late fee that is either a flat rate or a percentage of the amount due, with the greater amount being applicable in order to ensure that the penalty is significant enough to encourage timely payments. In this case, the answer indicates a late fee of $25 or 5%, whichever is greater. This approach is designed to provide flexibility for associations; if the dues are relatively low, the percentage might not be very much, so the flat fee serves as a minimum penalty. Conversely, for higher dues, the percentage may result in a larger fee, thus serving as a stronger deterrent against late payments. This balancing of a flat fee and a percentage helps to maintain fairness and encourages timely payment while adhering to legal guidelines set forth for community associations. Understanding this allows managers to effectively implement policies that both command respect for financial obligations and foster community integrity.