Case Law Update: Assessments are Consumer Debts Under the Florida Consumer Collection Practices Act

In a recent case, Kelly v. Duggan, 282 So.3d 969 (Fla. 1st D.C.A. 2019), out of Florida’s First District Court of Appeals looked at whether condominium association assessments qualify as “consumer debts” under the Florida Consumer Collection Practices Act (FCCPA). The FCCPA, Florida Statutes §559.55 et seq. (“FCCPA”) and its federal counterpart, Federal Fair Debt Collection Practices Act, 15 U.S.C. §1692 et seq. (“FDCPA”) protect consumers from unfair and deceptive debt collection activities and regulate consumer debt collection in Florida. Like the FDCPA, the FCCPA prohibits creditors and debt collectors from engaging in fraudulent, abusive, and harassing tactics in collecting debts for the State of Florida.

In Duggan, a dispute arose between a homeowner and condominium association concerning disputed past due assessments. A condominium owner alleged that the president of the Association violated the FCCPA by locking the unit owner out of a storage unit, making derogatory public statements about the unit owner, and disclosing information about the unit owner’s reputation to a vendor. The unit owner claimed that the president’s actions violated the terms of the FCCPA. The trial court dismissed the unit owner’s complaint citing a previous case from Florida’s Fifth District Court of Appeals, Bryan v. Clayton, 698 So. 2d 1236 (Fla. 5th D.C.A. 1997), which held that the FDCPA and the FCCPA’s definition of “debt” excludes maintenance assessments owed to a homeowner’s Association.

The Court held that condominium assessments qualify as “consumer debts” under the FCCPA and reversed the dismissal of the unit owner’s complaint, and remanded for further proceedings. The Court reasoned that for the FCCPA to apply, the payment obligation or “debt” must arise (1) from a consumer out of a (2) money, property, insurance, or services transaction, which is (3) primarily for personal, family, or household purposes. The Appellate Court reasoned that because a purchaser must contractually agree to pay a condominium or homeowner association assessments as a prerequisite to purchasing, that purchaser takes on “debts” for those assessments under the FCCPA.

Accordingly, community associations and their board members should tread carefully in collecting assessments to prohibit running afoul with the FCCPA and FDCPA by consulting with an attorney to ensure the Association and its agent’s practices are compliant with both the state and federal law.

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