Association Violation Letters Are Not Attempts to Collect A Debt

SJJ recently won an important case in the Federal District Court of Minnesota related to a homeowners’ association’s ability to send violation letters.

The case involved a homeowner who sued their association for alleged violations of the Fair Debt Collection Practices Act (“FDCPA”). The FDCPA is a federal law which protects consumers from unfair or abusive debt collection practices. Homeowner associations are often subject to the FDCPA when they engage the services of an attorney to collect past due assessments. Associations must be careful to abide by the FDCPA or else be subject to legal fines and consequences.

In this recent case, the homeowner alleged that the Association violated the FDCPA when it sent a letter outlining specific violations of the Governing Documents and threatening fines if the violations were not corrected.

SJJ argued that a rules violation letter is not an “attempt to collect a debt” under the FDCPA and the Court agreed. The Court explained that the letter did not mention a debt or state that the homeowner owed the association any money. The Court examined the letter to determine its purpose and found that the purpose of a rules violation letter is not to collect a debt, but instead to encourage compliance with the Association’s rules. Consequently, the Court held that this letter was not subject to the FDCPA and dismissed the case.

What does this mean for homeowner associations? It means that homeowners can continue to send violation letters-so long as it does not impose fines or mention debt-without having to navigate the complicated nuances of the FDCPA. If your association needs help enforcing its governing documents, or help with collecting past due assessment, call SJJ today for a free consultation!