Florida Consumer Collection Practices Act

Rembaum’s Association Roundup

Florida Consumer Collection Practices Act

What Every Board Member and Manager Need to Know

By Jeffrey A. Rembaum, Esq. / Published March 2020

Photo courtesy of Kaye Bender Rembaum

    Author’s Note: Welcome to the new home for Rembaum’s Association Roundup, the community association news that you can use, now in its 10th year of publication. Its continuing mission is to provide and promote association education for  board members, managers, developers, and community association members on topics to include legislation and how it may be interpreted and applied, recent appellate decisions, and other topics of interest to those who live within or provide services to Florida’s community associations. I hope you enjoy reading our column as much as we enjoy writing it!
– Jeffrey A. Rembaum, Esq.

The applicability of the Florida Consumer Collection Practices Act (FCCPA) as compared to the federal Fair Debt Collection Practices Act (FDCPA) should not be confused. The requirements of the FCCPA are far broader and apply to “all persons” while the requirements of the federal FDCPA only apply to “debt collectors.” The term “all persons” as used in the FCCPA includes board members, officers, managers, and attorneys alike. The term “debt collectors” as used in the federal FDCPA, refers to third parties attempting to collect a debt on behalf of another person or entity. For example, an association seeking to collect its own debt is not subject to the requirements of the federal FDCPA and neither is the manager who is deemed to be an agent of the association.

     The next question to be examined is whether under the FCCPA an assessment debt is considered a “debt” as such term is defined within the Florida Act. In a recent case, Kelly v. Duggan, 282 So.3d 969 (Fla. DCA 2019), the Appellate Court answered this inquiry in the affirmative. In this case, a condominium unit owner alleged the condominium association’s president violated the FCCPA by locking him out of a storage unit, making public derogatory statements about him, and disclosing information about his reputation to a vendor. Based on a case from Florida’s Fifth District Court of Appeal, which initially held that the federal FDCPA and the FCCPA’s definition of “debt” excludes maintenance assessments owed to a homeowners association, the case was dismissed at trial. However, as discussed by the Appellate Court in the Kelly case, the Fifth District did not determine whether a condominium assessment was a consumer debt but that the purchase of a condominium unit was not a “consumer” transaction. Since then, federal courts have consistently held that condominium and homeowners association assessments are “debts” under the federal FDCPA. In looking at the FCCPA, the payment obligation must arise from a consumer out of a money, property, insurance, or services transaction which is primarily for personal, family, or household purposes. As to condominium assessments, the obligation to pay condominium assessments (payment obligation) arises from the declaration of condominium to which a unit owner is bound upon purchase of a condominium unit (property transaction). Although the Appellate Court does not directly discuss the primary personal, family, or household purpose of condominium assessments, the Appellate Court held that when a purchaser must contractually agree to pay condominium or homeowners association assessments as a prerequisite to purchase, that purchaser takes on “debts” for those assessments under the FCCPA.

     Therefore, it is patently clear that the requirements of the FCCPA apply to an association—which fully includes its officers and directors, and its manager, too—seeking to collect past due assessments. Now that it has been determined that officers, directors, and managers are subject to the FCCPA, what does it mean?

     Pursuant to the FCCPA, as set out in Part VI of Chapter 559, Florida Statutes, more specifically, section 559.72, Florida Statutes, in collecting consumer debts, “no person” shall carry out the following:

  • Willfully communicate with the debtor or any member of her or his family with such frequency as can reasonably be expected to harass the debtor or her or his family, or willfully engage in other conduct which can reasonably be expected to abuse or harass the debtor or any member of her or his family.
  • Use profane, obscene, vulgar, or willfully abusive language in communicating with the debtor or any member of her or his family.
  • Disclose to a person, other than the debtor or her or his family, information affecting the debtor’s reputation, whether or not for credit worthiness, with knowledge or reason to know that the other person does not have a legitimate business need for the information or that the information is false.
  • Disclose information concerning the existence of a debt known to be reasonably disputed by the debtor without disclosing that fact. If a disclosure is made before such dispute has been asserted and written notice is received from the debtor that any part of the debt is disputed, and if such dispute is reasonable, the person who made the original disclosure must reveal upon the request of the debtor within 30 days the details of the dispute to each person to whom disclosure of the debt without notice of the dispute was made within the preceding 90 days.
  • Use or threaten force or violence.
  • Publish or post, threaten to publish or post, or cause to be published or posted before the general public individual names or any list of names of debtors, commonly known as a deadbeat list, for the purpose of enforcing or attempting to enforce collection of consumer debts.
  • Mail any communication to a debtor in an envelope or postcard with words typed, written, or printed on the outside of the envelope or postcard calculated to embarrass the debtor. An example of this would be an envelope addressed to “Deadbeat, Jane Doe” or “Deadbeat, John Doe.”
  • Communicate with the debtor between the hours of 9 p.m. and 8 a.m. in the debtor’s time zone without the prior consent of the debtor.
  • Claim, attempt, or threaten to enforce a debt when such person knows that the debt is not legitimate or assert the existence of some other legal right when such person knows that the right does not exist.
  • Tell a debtor who disputes a consumer debt that she or he or any person employing her or him will disclose to another, orally or in writing, directly or indirectly, information affecting the debtor’s reputation for credit worthiness without also informing the debtor of the existence of the dispute.
  • Communicate or threaten to communicate with a debtor’s employer before obtaining final judgment against the debtor, unless the debtor gives her or his permission in writing to contact her or his employer or acknowledges in writing the existence of the debt after the debt has been placed for collection. However, this does not prohibit a person from telling the debtor that her or his employer will be contacted if a final judgment is obtained.
  • Use a communication that simulates in any manner legal or judicial process or that gives the appearance of being authorized, issued, or approved by a government, governmental agency, or attorney at law, when it is not.
  • Communicate with a debtor under the guise of an attorney by using the stationery of an attorney or forms or instruments that only attorneys are authorized to prepare.
  • Orally communicate with a debtor in a manner that gives the false impression or appearance that such person is or is associated with an attorney.
  • Communicate with a debtor if the person knows that the debtor is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address, unless the debtor’s attorney fails to respond within 30 days to a communication from the person, unless the debtor’s attorney consents to a direct communication with the debtor, or unless the debtor initiates the communication.

     (For a full list of all prohibitions please refer to section 559.72, Florida Statutes.)

     A debtor has two years from the date of the alleged violation to bring her or his claim. A person who fails to comply with any provision of section 559.72, Florida Statutes, is liable for actual damages and for additional statutory damages as the court may allow, but not exceeding $1,000, together with court costs and reasonable attorney’s fees incurred by the plaintiff. In determining the defendant’s liability for any additional statutory damages, the court must consider the nature of the defendant’s noncompliance with section 559.72, Florida Statutes; the frequency and persistence of the noncompliance; and the extent to which the noncompliance was intentional. However, a person may not be held liable if he or she shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adapted to avoid such error. The last thing any association needs is to have to defend itself from violations of the Florida Consumer Collection Practices Act when trying to collect past due assessments. To avoid exposure, it is prudent to avoid reciting the names of assessment debtors at board meetings. Rather, consider identifying those members with assessment delinquencies only by their unit number, street address, or lot number. After all, it is not really necessary to announce the debtor’s name unless the intended purpose is to unduly embarrass or harass the debtor.

     If a list of assessment debtors is prepared by management for presentation and discussion at a board meeting, the list should not be handed out except to board members. If a non-board member desires to have the list, she or he can make a request to inspect the official records of the association. In this way, the association is not voluntarily providing any debtor names. The list of delinquencies prepared by management could even avoid using names of debtors and simply provide address, lot numbers, or unit numbers. In any event, board members and officers should try to avoid involving themselves in the collection of assessment debts except to provide direction and instruction to the manager and the attorney for the association.

     Do not send to the membership, and do not include in any newsletter type of communication, a list of all assessment debtors’ names. Rather, that information can be provided by summary. For example, “This quarter, five of eight existing collections matters were resolved. The total budget shortfall caused by all delinquencies fell from $8,000 to $3,000.”

     If you have any questions regarding the Florida Consumer Collection Practices Act, please consult with your association’s attorney, who can provide proper guidance.

Jeffrey Rembaum

Partner, Kaye Bender Rembaum

     Attorney Jeffrey Rembaum has considerable experience representing countless community associations that include condominium, homeowner, commercial, and cooperative associations throughout Florida. Every year since 2012, Mr. Rembaum has been inducted into the Florida Super Lawyers. Together with his partners, attorneys Robert Kaye and Michael Bender, their law firm, Kaye Bender Rembaum, is devoted to the representation of community and commercial associations throughout Florida. Kaye Bender Rembaum, with 17 lawyers and offices in Palm Beach and Broward Counties, strives to provide their clients with an unparalleled level of personalized and professional service. For more information, visit kbrlegal.com.