Real Cases in Real Estate By Andrea Lee Negroni, Esq. – November 12, 2013 Update

Real Cases in Real Estate By Andrea Lee Negroni, Esq. – November 12, 2013 Update

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Ass’n v. Ullrich, C.A. No. CPU4-12-002115 (Court of Common Pleas of Delaware, New Castle County, October 18, 2013), UNPUBLISHED [enhanced version available to subscribers].

Real Cases in Real Estate is a periodic update on real estate law, with legal principles illustrated and explained by lawsuits from around the country. The topics are wide-ranging for appeal to a broad spectrum of readers including lawyers, homeowners, investors and the general public. Andrea Lee Negroni, a Washington DC attorney and legal writer with 25 years of experience in financial services and mortgage law, contributes the case summaries.

Followers of Real Cases in Real Estate will learn and be entertained by lawsuits involving nuisance, trespass, zoning violations, deed restrictions, title insurance, public utilities, mechanics liens, construction defects, adverse possession, foreclosure and eviction, divorce and marital property rights, tenants' rights, and more. Real Cases in Real Estate uncovers the unpredictable, amusing, and sometimes outrageous disputes between next-door neighbors, contractors and homeowners, condo boards and residents, real estate brokers and homebuyers, and zoning administrators and developers.

Each fully cited case summary highlights the essential law of the case and explains the principal legal theories and concepts relevant to the outcome. Plain language treatment makes Real Cases in Real Estate accessible to lawyers and laymen alike.

Whether you follow real estate law professionally or as a hobby, you'll find something new and useful in every issue of Real Cases in Real Estate.

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