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How does the FDCPA impact HOAs?

On Behalf of | Oct 16, 2021 | HOA Law |

Whether you own a home or help run an HOA board, it is important to understand how HOA fees fall into legal structures. Concepts like fees and debts have different meanings in different organizations and it is when those organizations cooperate where confusion may happen.

For example, when you hear about the Fair Debt Collection Practices Act and how it regulates debt collectors, you may find yourself wondering how that affects HOA fees in the first place.

How the FDCPA treats debt collectors

As the Homeowners Protections Bureau describes, the FDCPA is a set of requirements on debt collectors that clarifies a few processes. These include requiring certain notices, prohibiting certain forms of communication and banning harassment or abusive conduct toward consumers.

Under the FDCPA, debt collectors must make specific disclosures, are unable to collect fees outside established agreements and may not communicate with third parties in certain ways.

How the FDCPA treats HOA agreements and fees

These regulations apply to specific definitions of debt collectors. An HOA collecting debt on its own behalf does not qualify as a debt collector under the FDCPA and as such is not regulated by its statutes. This act of collecting fees falls under the category of incidental duties instead.

However, HOA fees still count as debts under the FDCPA and a member of an HOA that owes that debt counts as a consumer.

The FDCPA begins to regulate these fees and agreements when the HOA hires an attorney’s office or debt collector for the purposes of collecting unpaid fees.

If you find yourself overwhelmed by these relationships and interactions between HOA fees and debtors regulation, researching more into the topic may help smooth the process.