Updates for the Week of November 12, 2013
Collection of Condo Fees and Late Charges is Not Subject to the Fair Debt Collection Practices Act. Jo-anne Ullrich, a resident of Wilmington, Delaware, was sued by her condo association, the Beacon Hill Townhomes Condominium Association, for non-payment of condo fees and late charges. She admitted her responsibility to pay the assessments, but denied she owed them. She claimed the condo association violated the federal Fair Debt Collection Practices Act when it used a third-party attorney to collect assessments and late charges without contacting her before he filed a collection lawsuit.
The Delaware court held that the Fair Debt Collection Practices Act does not apply to the collection of condo fees because even though they are a debt, neither the condominium nor its attorney is a debt collector.
A debt collector, for FDCPA purposes, is a person who uses interstate commerce or the mail in a collection business, to collect debts owed to another, but does not include a person who collects a debt that was not in default when obtained by the person seeking to collect it. Relying on a decision of the Third Circuit, the court concluded that a condo fee is a debt, but here, the person attempting to collect was a creditor, not a debt collector.
The court distinguished between creditors and debtors by noting that creditors maintain relationships with debtors, while debt collectors have contact with debtors only to collect debts. Extending this reasoning, a person representing a creditor is not a debt collector, either. Jo-anne Ullrich didn’t provide any information to show that the condo association’s lawyer was a debt collector, so the court concluded that he was representing a client, the homeowners association, not collecting debts.
Beacon Hill Townhomes Condominium Ass’n v. Ullrich, C.A. No. CPU4-12-002115 (Court of Common Pleas of Delaware, New Castle County, October 18, 2013), UNPUBLISHED [enhanced version available to lexis.com subscribers].
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