Debt Collection

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FDCPA
Facts

Plaintiff, O’Donnell, bought his condo in 2012 and sold it in 2019.  Beginning in 2013, O’Donnell missed various assessment payments.  In late 2013 the association filed a lien, and in 2018 the association commenced a foreclosure action.  To bring the lawsuit to an end, O’Donnell sold his unit.  The sale allowed O’Donnell to pay off the claimed past due assessments and attorney fees.  At the time of sale, he paid $23,342 to the association and $22,234.94 to the attorneys which brought the case to an end.  Plaintiff then filed suit against the association’s law firm alleging violations of the Fair Debt Collection Practices Act (“FDCPA”) by filing a foreclosure suit without legal authority.  Specifically, O’Donnell alleged the law firm failed to satisfy several of the prerequisites to proceed with a foreclosure suit against him.  Both parties moved for summary judgment.
Continue Reading Attorney Fees – FDCPA Violation – Failure to Follow Association Document Procedures

Land Mines
Facts

Plaintiffs live in Ashbrooke Property Owners Association (“Association”) and missed their annual assessment payments of $115 for three straight years.  The Association hired Defendant, Equity Experts, to collect the past due amounts.  Under the Declaration the past due assessments accrued interest at the rate of 18% per annum, plus the Association could charge a late fee and the Owner was “liable to the Association for all costs and attorney’s fees…”  Equity Experts added fees for their constant contact package and their Pre-Foreclosure package in the amount of $750 and $1,495 respectively.  In December of 2013, Defendant advised Plaintiffs that their balance was $3,199.60, but that if they did not pay within 10 days the balance may be at least $6,644.60.  Plaintiffs filed suit seeking class certification because the interest rate charged exceeded the amount allowed under Georgia law and because the demands were in excess of sums allows under the Association documents.
Continue Reading Class Action Status Granted to Association Homeowners Alleging FDCPA Violations

The COVID-19 Pandemic has created a global economic crisis impacting individual unit and home owners, and the associations they comprise.  An unfortunate result will be an increase in bankruptcy filings.  Learn how to prepare and protect your Association now.

Want to learn more about Wisconsin condominium and HOA law from experienced condo and HOA…

First, I want to thank Julie Howard and her firm NowackHoward in Atlanta, Georgia for much of this Blog (adjusted for Wisconsin Law and my commentary).  She is the former president of the College of Community Association Lawyers (“CCAL”), an excellent association attorney, and has been kind enough to allow Husch Blackwell to use much of their article.

The law does NOT require a Board to extend additional time to owners to pay assessments just because of the COVID 19 pandemic.  While such policies may show a concern for members of a community, probably without realizing it, those policies may also have significant adverse effects on the Association, especially in 2020.

With this background, Associations should first look to see which of their expenses are variable (those that can be cut or reduced because of the pandemic).  Secondly, the Board must ask can the Association really afford to extend the payment of assessments for some or all of its owners?  Associations faced this same challenge during the last financial crisis.  In an editorial published on February 5, 2008 in The Atlanta Constitution, George Nowack (another former president of the CCAL) explained that because many Associations had allowed members to not pay and suspended collection actions, the balances on unpaid accounts reached levels that members gave up trying to pay.  The lesson learned from that past is that a Board is not doing any member a favor if it allows an Association’s accounts receivable to go unaddressed.  That advice is equally true today.
Continue Reading Assessment Collections and COVID-19

Generic Drug
Summary

A company that handled fee collections for an Association engaged in unlawful practices when it falsely indicated that a lien had been filed against two homeowners.

Facts

Plaintiffs Chad and Caitlin Truhn fell behind on their assessment payments to their Homeowner’s Association. In their agreement with the Association, the Truhns agreed to pay the cost of collecting their fees, a task the Association outsourced to EquityExperts.org, LLC (“the Collector”). The Truhns eventually settled their debt and brought suit alleging that the Collector’s practices violate the Fair Debt Collection Practices Act (“FDCPA”). The Truhns claimed that the Collector’s collection letters contained incorrect and misleading information.
Continue Reading Debt Collectors Adherence to Generic Forms Were Inaccurate and Misleading

Wisconsin

Yesterday, Governor Ever’s signed Emergency Order #15 which reiterated the public health emergency relating to COVID 19.  It’s title: “Temporary Ban on Evictions and Foreclosures” also implies that foreclosure actions can not be filed or advance.  That is not the case.  Here is what the Order states relative to Foreclosures:

“7. Mortgagees are prohibited from commencing a civil action to foreclose upon real estate.

8. Mortgagees are prohibited from requesting or scheduling a sheriff’s sale of the mortgaged premises.

9, Sheriffs may not conduct sheriff’s sales of mortgaged premises nor may sheriffs act on any order of foreclosure or execute any writ of assistance related to foreclosure.

10. Nothing in this Order shall be construed to affect the ability to commence a civil action to foreclose upon real estate under Section 846.102 [abandoned premises] of the Wisconsin Statutes.

11. No provision in this order should be construed as relieving an individual of their obligations to pay rent, make mortgage payments, or any other obligation an individual may have under a tenancy or mortgage.”

The Order expires on May 26, 2020.
Continue Reading Wisconsin Governor Ever’s Emergency Order and Foreclosures

Right, Left, Wrong
Summary

Each owner of a lot in a planned community with multiple subdivisions was required to be a member of the master association – Holly Lake Ranch Association (HLRA).  Some of the owners voted to amend their particular subdivision’s respective deed restrictions.  The effect of which was to add a voting requirement for assessments, mandatory waiver of duplicate fees for additional lots, and restricted HLRA’s lien rights.  In this particular Texas case, Roddy v. Holly Lake Ranch Association, Inc., __ S.E.2d __ (2019), the court found that the amendments were “illegal” and therefore void.  In addition, the court remanded the case to the trial court to determine the reasonableness and necessity of the attorney fees it awarded to HILRA.
Continue Reading Doing Things Wrong can be VERY Costly, Which is Why Using an Experienced Association Attorney Matters

By Golly
Summary

Declarant owned nine of 10 units, controlled the board and association, failed to have an association bank account, intermingled the assessments that were paid into his business account, never held elections or annual meetings and kept no separate corporate records.  Yet, the Court held that these failures could not be used as an excuse for not paying assessments that were due under the condominium documents.  In other words, you bought into an association, pay your assessments.
Continue Reading Owners are Liable for Assessments, Even When Corporate Formalities Not Perfectly Followed

Pointing Fingers
Summary

In Florida, mere ownership of a condominium makes you liable for all assessments which come due while you are an owner AND all assessments of previous owners.

The Facts

Defendant, Fla Trust Services, bought the condominium in question on July 26, 2016 by quit claim deed. The seller was Homes HQ, LLC who had bought it on June 13, 2016 at a judicial sale held as a result of a final judgment of foreclosure obtained by JPMorgan Chase Bank, NA. After Defendant took ownership, the plaintiff association filed suit based on a lien foreclosure and for damages. The parties agreed that the sole issue was whether the was Defendant liable for unpaid assessments back to June 13, 2016 or back to 2007, when the purchasers bought the condominium.
Continue Reading Owner Liable for Prior Owners Assessments – Who Knew?

FDCPA

For years the FDCPA (Fair Debt Collection Practices Act) has been used as a sword by debtors and debtors attorneys as a means of exacting revenge from those creditors attorneys who failed to strictly, and I mean STRICTLY, follow every small detail of the law. It reached the point that one court called it a “cottage industry” for debtor’s attorneys.

The FDCPA was so difficult to comply with, that even the Federal Circuit Court (the 7th Circuit) in one of its opinions literally included in the opinion the language that it recommended that debt collectors (including attorneys) use in order to comply with the FDCPA.  Unfortunately, even the letter that they wrote within the opinion failed to comply with one aspect of the FDCPA illustrating how difficult compliance can be.
Continue Reading FDCPA – Fair Debt – The Latest Case Actually Benefits Creditors