Since assessments are fees for maintenance and use of utilities and not consumer debt, many association board members wonder if their communities are subject to the Fair Debt Collection Practices Act (FDCPA). Some may be surprised to learn most state and federal courts consider assessment to be “debts” according to this definition:
Q: I am considering running for a seat on my HOA board. We are a community of about 80 homes. I am concerned about my indemnity as a board member. I tried to find a clause in my bylaws, but I can’t seem to locate wording that speaks directly to that. Our HOA property manager directed me to Chapter 47F of the North Carolina General Statutes (the NC Planned Community Act), but I still don’t see any language that would prevent a lawsuit from being directed toward me personally for action I take as a director of the HOA. Can you shed some light on this?
Q: I live in a townhouse complex. Neither our bylaws nor our Covenants, Conditions and Restrictions mention anything about fines for violations. Now our board of directors has decided to adopt a set of “rules” which they plan to enforce by levying fines for violations. Is this legal?
A board’s reluctance to contact an attorney could be a risk not worth taking.
A Fort Lauderdale condominium association paid $100,000.00 to settle a lawsuit after an attorney-board member who wasn’t licensed in Florida wrongly insisted how overdue assessments should be collected.
Board members of a California condominium association didn’t consult...