The Mountain House board of directors voted in a closed-door meeting Monday night not to assert the statute of limitations that could have limited how much money residents could be reimbursed for wrongful late fees on water bills.

Residents who were charged the 10 percent late fee before the 30-day grace period — which allowed residents time to catch up on late bills — can file for a refund, the board decided in February.

The 4-1 decision Monday night allows residents to get money back from wrongful late charges on their water bills from as early as 2003, when people first started to move to Mountain House. Before the vote, only those wrongly charged within the past three years would have been eligible for a refund.

Board vice president Eric Payne said the decision to extend the statute of limitations is very important, because it’s “the right thing to do.”

Residents have until March 2011 to submit a claim for a refund.

Originally, the policy said residents had 30 days before they would be charged a late fee. In February, the board of directors said the Mountain House Community Services District wrongfully charged residents just a day after their bills were due and said residents were eligible for a refund.

The policy has been updated to specify that residents will be charged a late penalty one day after the water bill is due.

“We updated the policy to match what the original intent was,” said board member Jim Lamb, who voted in favor of eliminating the statute of limitations and said he hopes this is the end of the water bill issues.

He said the lawyer for the board and the employees at the community services district plan to review policies that pertain to water bills to make sure everything is in compliance with the law.

Board member Bernice Tingle voted not to extend the statute of limitations.

“It wasn’t an error that was intentional,” Tingle said. “I firmly believe that there should be a statute of limitations.”