By: Robert J. Nahoum
You have suffered a health set back or lost your job. You fell behind on bills and your condo, co-op or town house was foreclosed. You thought you left all those troubles behind you but now you are getting debt collection letters and phone calls from a debt collection agency for your former home owners association. The calls have been over the top and harassing.
Can the HOA get away with it?
Federal debt collection laws, known as the Fair Debt Collection Practices Act (FDCPA for short), regulates the conduct of third party debt collectors including collection agencies, junk debt buyers a debt collection lawyers. The FDCPA generally prohibits debt collectors from using false, misleading and abusive debt collection tactics.
If a debt collector violates the FDCPA, you can sue for statutory damages up to $1,000.00, actual damages (like pain and suffering) and the debt collector may have to pay for your attorney. The FDCPA gives consumers the power to swing the pendulum in the other direction and call out the debt collector for violating your rights as a consumer.
A “debt” as defined by the FDCPA limited to “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” Home owners’ association dues are considered consumer “debts” under FDCPA.
The FDCPA only applies to “debt collectors” which is defined as “any person […] in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”
Attorneys and collection agents who collect debts on behalf of home owners’ associations are “debt collectors” as defined by the FDCPA but property management companies generally are not.
An exception to the FDCPA definition of a debt collector includes “any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.
Property management companies generally fall under the exception this exception and are therefore not obligated required to comply with the FDCPA.
WHAT YOU SHOULD DO:
If you are being harassed to pay an old HOA debt, consult with an experienced consumer attorney familiar with the FDCPA. Take note of who is communicating with you – the property manager or a third-party debt collector. If the collector is subject to the FDCPA, you may have the ability to take that debt collector to court for violating your consumer protection rights.
If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you. With office located in the Bronx, Brooklyn and Rockland County, the Law Offices of Robert J. Nahoum defends consumers in debt collection cases throughout the Tristate area including New Jersey.