Article Courtesy of JD Supra
By Lowndes
Published
July 1, 2020
Assessments owed to condominium and homeowners
associations (Associations) now may be consumer debts as defined by the
Florida Consumer Collection Practices Act (FCCPA). Consumer debts (or
debts) under the FCCPA are defined as a consumer’s obligation or alleged
obligation to pay money arising out of a money, property, insurance or
services transaction which is (3) primarily for personal, family or
household purposes.
Florida’s Fifth District Court of Appeal’s Ruling
Florida’s Fifth District Court of Appeal (Fifth DCA) previously has held
that assessments owed to Associations are not consumer debts and,
therefore, the FCCPA does not apply. Yet in an opinion on June 12, 2020,
Williams v.
Salt Springs Resort Condominium Association, the Fifth DCA
receded from its prior precedent, ruling that assessments owed to a
condominium association can be FCCPA consumer debts. In its ruling,
however, the court declined to find that assessments owed to
Associations are automatically consumer debts; thus, whether assessments
owed to Associations are consumer debts will depend on the facts in each
case.
Why This Matters (FCCPA Compliance)
This ruling is significant as Associations and management companies now
may have to comply with the FCCPA. For example, the FCCPA prohibits
certain consumer debt collection practices, including a ban on
communicating with the debtor during certain times of the day and
publishing a list of the debtors names, commonly known as a “deadbeat
list”, for the purpose of enforcing or attempting to enforce collection,
which is what occurred in the Williams case.
Importantly, the FCCPA’s application to Association assessments does not
apply only when a unit owner is delinquent. Rather, the Fifth DCA’s
decision in Williams indicates that the FCCPA’s application originates
when a unit is purchased and can even extend to assessments owed on the
unit prior to the purchase. Lastly, if an Association, a member of an
Association’s board of directors, or a management company fails to
comply with the FCCPA, such parties may face a class action lawsuit and
could be liable for the plaintiffs’ actual damages, court costs and
reasonable attorney’s fees, together with up to $500,000.00 in
additional statutory damages depending on the number of class members
and such parties’ net worth.
|