What is delinquent interest?

A:

Delinquent interest is a cost to homeowners by the HOA when assessments are not paid by the due date. It is usually a percentage of the assessments based on the Annual Percentage Rate (APR) outlined in the governing documents. The annual percentage rate is divided by twelve months to calculate the amount added to an owner’s account each month.

If the APR in the governing documents is 12%, then the owner would be charged 1% of the assessment amount (12% divided by 12 months) each month. This charge is paid to the HOA in addition to other fees and charges when an assessment payment is not paid by the due date.