Homeowner Resources & Knowledge Center

Understanding How Payments Are Applied to Your HOA Account

This guide explains the required legal process for applying payments to a homeowner association (HOA) account in Florida, as mandated by state law. The goal is to provide clarity on how payments are allocated to different types of outstanding balances, such as assessments, interest, and attorney fees.

The Legal Framework: Florida Statute 720.3085

The primary law governing this process is Florida Statute 720.3085(3)(b). This statute dictates a specific, non-negotiable order for how an HOA must apply any payment received from a homeowner. This legal requirement overrides any instructions or notes written on a check or payment, ensuring a consistent and transparent process for all homeowners.

Full Text of Florida Statute 720.3085(3)(b):
"Any payment received by an association and accepted shall be applied first to any interest accrued, then to any administrative late fee, then to any costs and reasonable attorney fees incurred in collection, and then to the delinquent assessment. This paragraph applies notwithstanding any restrictive endorsement, designation, or instruction placed on or accompanying a payment."

How This Affects Your Account

This statutory requirement means that even if a homeowner intends for a payment to cover their most recent assessment, the law requires the HOA to first apply that money to any outstanding interest and legal fees. This can sometimes lead to confusion, as a payment may not reduce the principal assessment balance if other charges have accrued.

For example, if an account has outstanding interest and attorney fees, a payment will be used to satisfy those balances before it is applied to the overdue assessments. This is why account ledgers show payments being applied to attorney fees first, as required by law.

Why This Order Matters

The statutory payment application order protects both homeowners and the association by:

• Ensuring transparency and consistency in how all accounts are managed
• Preventing disputes about payment allocation
• Complying with Florida law to avoid legal challenges
• Minimizing the accumulation of interest and fees over time

Interest on Delinquent Assessments

Florida law also addresses the application of interest on unpaid balances. Florida Statute 720.3085(3) states that assessments not paid when due will bear interest at the rate specified in the HOA's governing documents. For Surrey Ridge, the bylaws authorize an interest rate of 18% per year on delinquent assessments.

Florida Statute 720.3085(3):
"Assessments and installments on assessments that are not paid when due bear interest from the due date until paid at the rate provided in the declaration of covenants or the bylaws of the association, which rate may not exceed the rate allowed by law. If no rate is provided in the declaration or bylaws, interest accrues at the rate of 18 percent per year."

Surrey Ridge Interest Policy

At Surrey Ridge Community Association:

• Interest Rate: 18% per year (simple interest, not compound)
• When Applied: Interest begins accruing from the due date of the assessment
• Calculation: Interest is calculated monthly on the outstanding principal balance
• Late Fees: Surrey Ridge bylaws do NOT authorize administrative late fees - only interest charges

Summary of Key Florida HOA Laws

Topic	Rule	Source
Payment Application Order	1. Interest 2. Late Fees 3. Attorney Fees 4. Assessments	Florida Statute 720.3085(3)(b)
Interest Rate	18% per year on delinquent assessments	Surrey Ridge Bylaws & Florida Statute 720.3085(3)
Late Fees	Not authorized at Surrey Ridge	Surrey Ridge Bylaws
Assessment Due Dates	January 1 and July 1 (semi-annually)	Surrey Ridge Bylaws
Assessment Amount	$197.50 per period ($395.00 annually)	Board Resolution

Your Rights as a Homeowner

Under Florida law and Surrey Ridge governing documents, you have the right to:

• Transparent Accounting: Request a detailed ledger showing all charges and payments on your account
• Dispute Improper Charges: Challenge any charges that are not authorized by the bylaws or Florida law
• Payment Plans: Request a payment plan for delinquent assessments (subject to Board approval)
• Access to Records: Review association financial records and governing documents
• Notice Before Collection: Receive proper notice before lien filing or foreclosure proceedings

Additional Resources

Frequently Asked Questions

Q: Why was my payment applied to interest instead of my assessment?

A: Florida law (Statute 720.3085) requires payments to be applied in a specific order: interest first, then late fees, then attorney fees, and finally assessments. This is mandatory and cannot be changed, even if you write instructions on your check.

Q: Can I set up a payment plan if I'm behind on assessments?

A: Yes. Contact the Board at board@surreyridgehoa.org to request a payment plan. The Board will review your request and may approve a plan that works for both you and the association.

Q: Why am I being charged 18% interest?

A: The 18% annual interest rate is authorized by Surrey Ridge bylaws and Florida Statute 720.3085. This is the maximum rate allowed by law and is applied to delinquent assessments to encourage timely payment.

Q: Does Surrey Ridge charge late fees?

A: No. Surrey Ridge bylaws do not authorize administrative late fees - only interest charges at 18% per year on delinquent assessments. If you see "late fee" on your account statement, this is a terminology used by some accounting software systems to label interest charges, not an actual administrative late fee.

Q: How can I dispute a charge on my account?

A: Email the Board at board@surreyridgehoa.org with details about the charge you're disputing. Include your property address, the date and amount of the charge, and your reason for disputing it. The Board will review and respond.

Q: Where can I see my complete account history?

A: Log in to PayHOA to view your complete ledger, or request a detailed statement from the Board.