Florida Court Says HOA Efforts to Collect “Fines” are Subject to Consumer Collection Practices Act

PUBLISHED Florida District Appellate Court decision (November 9, 2016).

This case involved a dispute between a homeowners association and homeowners over a fine that was imposed by the association against the homeowners for alleged violations of various provisions contained in the association’s governing documents. The association contended that the homeowners improperly performed construction without proper association approval, had relocated a fence and had removed plants all in violation of the association’s governing documents. After conducting appropriate internal hearings on the alleged violations, the association imposed a fine for the continuing violation which the homeowners refused to pay.

Over a period of months following the imposition of the fine by the association, the association’s management personnel and/or attorneys sent several collection letters to the homeowners demanding payment of the fine and additional costs. In response to these letters, the homeowners requested various information in accordance with the Fair Debt Collection Practices Act (“FDCPA”). The association’s attorney maintained that the demand for payment pertained to a delinquent fine and not a debt under the FDCPA. The district court agreed with the association’s contention that the HOA fine was not a debt and granted summary judgment in favor of the association. The homeowners then filed an appeal.

The appellate court found that the homeowners’ obligations to the HOA arose from a contract – the association’s governing documents, which stated that fines are considered “assessments.” Thus, the central question under consideration in the appeal was whether a contractual obligation to pay HOA assessments constitutes a “debt” under the FDCPA and a corresponding Florida state statute (the Florida Consumer Practices Act). The appellate court ruled that because the association’s governing documents contained provisions which state that fines levied against homeowners are deemed to be assessments, and the obligation of the homeowners to pay assessments for breaches of the association’s governing documents arose out of an underlying consumer transaction, the fine must be treated as a “debt” which is subject to the Florida Consumer Collection Practices Act. Accordingly, the appellate court reversed the decision of the district court and remanded the case for further proceedings.

See case decision: Agrelo_v_Affinity_Management