Objective: To learn how to setup a late fee or interest rule that will drive the automatic applications of late fee or interest charges on Homeowner accounts.
First, navigate to the Association > Assessments screen. (All charges that are applied to Homeowner accounts are established and managed from the Association > Assessments screen, including charges that are not technically "Assessments".)
If you do not already have a late fee or interest charge created, go ahead and do that next. For a tutorial on creating a new charge, visit How to Set Up a New Charge or Assessment
Note: In order to create a late fee or interest rule, the Type of Charge must be set to Fee.
If your charge is already created, click on the dropdown arrow to the left of the charge to display the Rules tab. To Create a new Charge Rule, click the +New Rule button to open up the Edit Fee Rules screen.
This allows users to determine the frequency and timing of when late fees apply based on the association's governing documents.
The options for Charging Owners:
Monthly: this selection would only have the system scan on the night of the specified day of the month to see if an owner meets the criteria to apply a late charge once per month.
One Time Per Charge: this selection would apply the late fee on the night of the specified day only once per applicable charge that's been posted to an owner's ledger.
Fee Active Within:
The date you want this rule to be active when the association has Late Fees turned on. You can also enter an end date for the rule if you want to add a new late fee rule but keep the history of the generations.
Note: It is best practice NOT to have an End Date for an ongoing Rule. If the End Date passes without a new Rule in place, then nothing will be charged as there are no active rules.
Minimum Balance Type:
The options for Balance Type:
Fixed Amount: the dollar amount entered here would dictate if the outstanding balance is $0.01 or higher, the system would generate the late fee on the night of the Day of the Month listed at the top if that minimum balance on the owner account was at least X Day(s) Old.
Number of Charges: depending on the number entered here, the system would see if there is a full charge count at least X Day(s) Old for the Assessment Type selected. For example, if the Number of Charges was set to 2 and at least 17 days old, the system would only apply a late fee if there were 2 full Assessment charges.
Account for Current Month Payment: selecting this box will have any Current Month Payment be factored in. For instance, if a payment is made during the current month that would satisfy this month's charges, no fee will be generated even if there is unpaid previous balance.
The Balance Includes field is where you will indicate which charges that you would like to apply late fees against. The rule you configure here will sum total the balance due in each of the charge groupings you have listed, and then compare that total against the Minimum balance threshold and age of balance threshold you define to determine the application of the Charge Amount and/ or Percentage Amount.
The Charge Amount can be a fixed amount and/or a percentage amount. If using only one option, leave the other blank. Otherwise, specify if you wish to use the Lesser amount, Greater amount, or Both.
For Percentage setups:
There are three options to consider for the percentage calculation.
Current Balance: this selection will calculate a charge based on an annual percentage rate on the overall balance for the assessments defined in the 'Balance Includes' section. Annual Percentage Rate means that if you wished to charge 10% MONTHLY, you would enter 120%, as 120/12 = 10. In other words, multiple the amount you want monthly by 12.
Current Month Charge Balance: this selection will calculate a percentage charge only reviewing the current month's balance for the selected Balance Includes assessments.
Charge Amount: this selection will calculate an exact percentage amount of the listed assessment (dues) amount defined on the Association Assessments page.