Community associations and managers are generally exempt from the requirements of the FDCPA since the law does not apply to the collection of debt by a creditor. In most instances, the collection of assessments by an association attorney is ancillary to the other professional services provided by attorneys to associations. In the overwhelming majority of reported cases in which association attorneys have been found to have violated the requirements of the FDCPA, the violations have been found to be procedural or technical, thereby visiting no actual damages upon the assessment-debtor that were sought to be cured by the FDCPA and state law.  

In weighing the cost versus the benefit of subjecting community association attorneys to the requirements of the FDCPA for the collection of assessment debt, the scale weighs heavily in favor of removing the unnecessary increase in the cost of assessment collection borne by the assessment-debtor or the association as the result of the FDCPA and state laws, which is then passed on to the unit owners who otherwise are current in their payment of assessments.  

Inasmuch as the collection of assessments due to community associations is commonly unopposed by the debtor and, by state law or the terms of an association’s governing documents is added to the amount due from the debtor, the additional requirements imposed for association assessment debt by the FDCPA, and similar state laws causes a material increase in the amount due from the assessment debtor thereby making the ability of the debtor to pay the debt more onerous.  

Community associations rely on the collection of assessments to effectively preserve, repair, or maintain the property owned by the owners in common. Delay in the ability to collect assessments has a significant negative impact on the ability of an association to undertake the maintenance, repair, and replacement work that is essential to maintaining a safe and attractive community. The failure of one or more owners to pay an assessment creates a debt to other owners and places an unjustified financial strain on other owners. Local governments throughout the United States have increasingly shifted the burden of maintaining improvements that were historically maintained by local government to community associations. As a result, making the collection of assessments more burdensome may also result in an association’s inability to maintain improvements that are vital to the community and for emergency services.  

Accordingly, community association assessments are now more akin to local governmental taxes rather than consumer debt. Taxes are not considered “consumer debt” under the FDCPA. Common expense assessments serve the same function as taxes due local governments. Association assessments represent the financial obligation borne by the community as a whole for services that benefit the general welfare of all owners, including snow plowing of streets, maintaining stormwater management systems, fire hydrants, utilities, sidewalk repairs, recreational facilities, and the like, as do governmental entities.  

RECOMMENDATION  

CAI recommends that owners become educated as to their responsibilities, if any, to the FDCPA and state law, as it evolves and as it is interpreted in the case law in various jurisdictions and comply with the same. CAI opposes duplicative legislation at the state level that imposes state penalties for violations that are already incorporated within the FDCPA. CAI supports legislation that accomplishes any of the following:  

1. The exemption of association attorneys and community managers from the FDCPA or any similar state laws that impose unduly burdensome requirements in collecting monies owed to community associations.  

2. The elimination of penalties and attorneys’ fees for technical or procedural violations that cause no damages to a debtor.  

3. The elimination of community association assessments as “consumer debt” under the FDCPA or any similar state laws.  

Although courts have interpreted the language of the FDCPA to include assessment debt as consumer debt, CAI urges its members to educate legislators on a continuing basis concerning the similarity of assessment debt to local governmental taxes and ultimately seek the statutory removal of association assessments as consumer debt under all relevant consumer debt protection laws.