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