IMPORTANT PAYMENT INFORMATION
Annual Fees - Changes coming for 2019 regarding usage of PayPal (and credit cards) for payment of HOA Assessment
During the February 2018 Annual HOA Meeting, a motion was made to charge an additional fee to residents who use PayPal to pay their HOA fees and the motion passed. After further investigation into our agreement with PayPal, there was some concern about the legality of the decision. We sent the question to our attorney, and the response is shown below. As a result of our attorney's advice, we have not charged residents to use PayPal this year (2018). However, the Board voted to suspend the use of PayPal for 2019 in an attempt to save the HOA over $800/year. For next year (2019), personal checks and your bank's Bill Pay service will be the two acceptable forms of payment for HOA fees.
Legal Consultation - Recovering PayPal Fees from Home Owners Who Use It
HOA requested that [our legal consultants] review whether Trails at Woodlot Homeowners Association, Inc. (the "Association") may recover the fees that it incurs related to the processing of dues paid by credit card, PayPal, and other similar services. After reviewing the PayPal User Agreement and discussing this matter with PayPal in greater detail, we do not advise that the Association attempt to recover its fees through the use of a surcharge, convenience fee, or other additional cost related to the method of payment used.
The PayPal User Agreement states, "You agree that you will not impose a surcharge or any other fee for accepting PayPal as a payment method. You may charge a handling fee in connection with the sale of goods or services as long as the handling fee does not operate as a surcharge and is not higher than the handling fee you charge for non-PayPal transactions." A partial copy of the User Agreement is attached for your convenience.
As such, the policy plainly states that a surcharge may not be imposed. The user agreement does not define a "surcharge" or a "handling fee." The Supreme Court, reviewing a case in which the term "surcharge" was not defined, used the dictionary definition of a surcharge as "a charge in excess of the usual or normal amount." This was understood to be a fee that was assessed against all credit card transactions, not just those from a specific credit service.
As with surcharge, PayPal does not define "handling fee" in its terms of service, nor do traditional dictionary resources. The Cambridge University Press Dictionary defines a handling fee as either, "(1) a charge for dealing with an order or banking activity, [or (2)] a charge for transporting, storing, or packaging goods." When we spoke with PayPal representatives, they stated that PayPal understands a "handling fee" to relate only to shipping items, and that the permission for a "handling fee" is intended to allow the merchant to recover the variable costs that are associated with packaging and mailing. We requested a written opinion, but PayPal has thus far failed to respond. We will continue to request a written opinion and will forward that to you upon receipt.
Given the court's recent precedent of defining a surcharge broadly, and PayPal's own verbal interpretation of a handling fee, we do not advise Trails at Woodlot to attempt to recover its losses by assessing a charge for the use of a PayPal, whether termed as a surcharge, a convenience fee, or otherwise.
Owners may contact the HOA Board of Directors for information regarding Annual Fees using the contact information below.
Any assessment not paid within 15 days after the due date shall bear interest from the due date at
the rate of 10% per annum and shall be subject to a late charge of $5 or 5% of the assessment,
whichever is greater, and the Board of Directors shall have th right to declare the entire balance of
the annual assessment and accrued interest thereon to be immediately due and payable. In
addition, the owner shall be liable for all costs of collecting any such assessment, including
reasonable attorney's fees and court costs. All such interest, late charges, and costs of collection
shall be deemed to be an additional assessment hereunder.