HOAleader.com - Tip of the Week - May 20, 2016
Published: Fri, 05/20/16
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Know How to Avoid Lawsuits Over HOA Collection Tactics
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In this week’s tip, we double back and cover what you need to know about the Fair Debt Collection Practices Act. We at HOAleader.com talk about it a lot. It’s actually a pretty complicated law that many people don’t fully understand.
“It’s a gigantic issue for us,” states Susan Hawks McClintic, co-managing shareholder and the chair of the community association transactional practice group at the law firm of Epsten Grinnell & Howell in San Diego. “Part of the problem is that I don’t think everybody, even attorneys, understands the ins and outs of it. So it’s so easy to make a mistake.”
Overall, the FDCPA protects debtors from being harassed by creditors. If creditors violate the act, consumers can sue them for damages—even if the consumer actually owes the debt. It’s not about eliminating consumers’ debt. It’s about sparing them the stress and financial burden caused by unscrupulous creditors.
The act applies only to consumer debt, like credit card debt; it doesn’t cover business debts. Also, it restricts the activities only of third parties collecting debt on behalf of another entity.
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“It’s an important consumer protection statute that does apply to the collection of assessments,” says Gregory S. Cagle, a partner at Savrick Schumann Johnson McGarr Kaminski & Shirley in Austin, Texas, and author of Texas Homeowners Association Law. “But it typically doesn’t apply to homeowners associations attempting to collect a debt themselves. It applies only to debt collectors, which are basically third parties attempting to collect debt owned by somebody else.
“In addition, management companies typically aren’t subject to the act, either,” adds Cagle. “There are cases out there that conclude that management companies aren’t debt collectors but debt servicers. A debt collector is someone who collects debt when it’s past due. A servicer collects debt whether it’s past due or not. Because management companies are often involved in sending out invoices and aren’t strictly involved in only the collection of debt, courts have held they’re really only servicing the HOA’s account.”
That said, the interpretation of the FDCPA may depend on the courts applying the statute, with some applying it differently than the majority of other courts. In addition, your own state may have its own version of the FDCPA that does apply to your association’s collection activities.
The FDCPA allows consumers to recover $1,000 if they can prove a debt collector has violated the act. That’s in addition to any actual damages they’ve suffered, such as the loss of a job because of a flurry of phone calls to an employer. Consumers can also recover attorneys’ fees if they prevail.
What types of activities violate the FDCPA? Get details, plus tips on how to avoid stumbling into a claim, in our new article: http://www.hoaleader.com/members/1371.cfm
Best regards,
Matt Humphrey
President
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What You Need to Know to Effectively Regulate Parking in Your HOA
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Recent articles posted at HOAleader.com:
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HOA Owner Turnover: Was It Something You Said?
On just one Chicago street, there's a small, six-unit condo association that nearly always has at least unit for sale. The street is lined with similar condo associations, but just across the street, those condo associations haven't had units available for years. Does this disparity mean anything? Here we address whether your HOA's turnover rate is a problem and what you might do to lower it.
Click here to read full article: http://www.hoaleader.com/members/HOA-Owner-Turnover-It-Something-You-Said.cfm
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The Sure-Fire Way to Get Your HOA's Insurance Claim Denied
In this week's tip, we use a recent court ruling to offer some simple advice on what not to do when you have a potential insurance claim.
In Longleaf In Vinings Homeowners Association Inc. v. QBE Insurance Corp., the court held that an HOA's notice of a potential claim to its insurer nine months after it suffered damage in a hailstorm was too long--and it had no good reason for its delay, according to the appellate court.
Click here to read full article: http://www.hoaleader.com/public/SureFire-Way-Get-Your-HOAs-Insurance-Claim-Denied.cfm
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Late Notice Wipes Out Insurer's Duty to Cover HOA's Hail Damage
An HOA's notice of a potential claim to its insurer nine months after it suffered damage in a hailstorm was too long--and it had no good reason for its delay, according to an appellate court. Here we explain the case and offer tips on how to know when to provide notice of a potential claim to your insurer.
Click here to read full article: http://www.hoaleader.com/members/Late-Notice-Wipes-Out-Insurers-Duty-Cover-HOAs-Hail-Damage.cfm
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HOA Don't Preach: Madonna's Condo Bans Unsupervised Kids
'Material Girl' Madonna is reportedly suing her New York City condo association for the right to leave her minor kids behind when she's not in town. According to TMZ, the condo passed a rule prohibiting children from living in a unit without their parents.
Click here to read full article: http://www.hoaleader.com/members/HOA-Dont-Preach-Madonnas-Condo-Bans-Unsupervised-Kids.cfm
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What You Need to Know to Effectively Regulate Parking in Your HOA
One owner runs a small roofing business and parks her oversized commercial truck--complete with the company's name and phone number stenciled on the doors and ladders attached to the sides--in her driveway. Another owner has a beautiful 26-foot boat parked in front of his house. Then there's the owner who has so many guests that others complain there's never anywhere for their guests to park.
What a pain parking issues can be!
Perhaps it's time to ease the pain for everybody in your community by regulating parking in a sensible way. We can show you how. Join us for a must-attend webinar on May 26!
Click here to read full article: http://www.hoaleader.com/products/regulate-parking-in-your-hoa-a.cfm
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