I worked for an association management company (albeit in Florida) and typically (and in FL statutorily) items are paid in an order similar to this: 1) legal fees, 2) interest, 3) fines and other fees (late fees, etc.), 4) special assessments, 5) regular assessments (dues). Whatever you write on the memo line of the cheque doesn't control how the disbursements from the payment will be made.
Thanks for the reply... but I have to challenge the legality of your management company's policy of what order things are paid for, specifically would that policy hold up in court.
If it went to court, wouldn't a judge invalidate that policy?
The reasoning is this: I give money using the memo line to specific what the money is to be used for if they cash it, which is only to go towards monthly dues. If the management company doesnt agree to that, then they have the right to say "we cant abide by your wishes" and send me the money back, and allow me to make monthly payments instead.
What this mgmt company did was apply my money it to fines, thereby penalizing me for attepting to pay dues in advance, by denying me the privilege of being notified that each fine was not removed (as they led me to believe). So instead of disputing one fine, I now have 4 fines to dispute, some which are too late to dispute since if you pay them then it's like an acknowledgement of guilt and acceptance of the fine.
It's like paying the city money property taxes in advance whereas the city instead decides to use the money to prepay all speeding tickets I might get before the property taxes are due.
Or it's like sending a check to my internet company for internet, and finding out they decided to apply the payment to a cable tv promo that I didnt want or sign up for. Generally the person paying has the right to decide where their money is put towards, right?
So management companies can have all the crazy policies they want, but would that type of policy be upheld in court?
Let's just clarify.
You wrote in the memo box, Monthly dues ONLY? Or you wrote, Monthly dues?
I'm pretty sure it said monthly dues ONLY. Is there a difference?
Previous cases like this...how does the judge rule on them? Any precedents for this situation?
The memo section is where you write notes for your own benefit. It's not a space where you can jot whatever you want and somehow bind the recipient of the check to your unilateral conditions. The recipient of the check must be aware of any conditions in order for them to be binding.
Quoting Blair v Brownson, E2004-00817-COA-R3-CV (Tenn. Ct. App., Feb. 22, 2005), emphasis added
Interesting case...ok so I understand this court ruling establishes that the memo field can't be used as a binding agreement of where the money goes. That binding agreement would be in writing in an associated contract.
But in this case the HOA memo stated that the HOA monthly dues comes to "$XXXX" for the year if paid as a one time lump sum.
So anybody who pays that exact amount given in response to the memo ("$XXXX") should be assure their money would go to the fees that the memo stated, right? Would anybody pay in advance for bogus violations when they have the right to contest them and have their account balance applied to the hoa fees stated in the memo? Of course not.
If a customer sends a check to the electric company with the electric bill, then I dont think the electric company has the right to apply that money to anything other than the electric bill in question, regardless of the memo field.
That said, what would my chances be if this issue went before a judge? I'm sure this has happened a lot... business applying money to purposes other than what the customer intended.