4th Circuit Court of Appeals rules that property management company is not subject to the FDCPA

A June 3, 2014 ruling from the 4th Circuit Court of Appeals (which includes North Carolina) is good news for HOA property management companies.  The case arose out of a federal lawsuit  in Maryland filed by a homeowner against her HOA, its property management company and its president and manager, for alleged violations of the FDCPA.   The alleged violation was only vaguely described in the opinion, but appears to be the filing of a lawsuit by the HOA against the homeowner after expiration of the Statute of Limitations.

The court ruled that the FDCPA does not apply to property management companies that are responsible for collecting assessments all the time, not just when they are delinquent (like a collection agency would).  As such, they are not a “debt collector” as defined in the FDCPA, and thus the FDCPA does not apply to the management company.  The case is Fontell v. The Management Group Associates, Norbeck Grove Community Association, et al, 13-2270.  This is an “unpublished” opinion, and thus cannot be cited as binding precedent, but favorable rulings such as this are nevertheless indicative of the court’s leanings on FDCPA coverage.

From the opinion:  Here, it is clear that TMGA [the management company] was responsible for collecting the unpaid homeowner’s association dues from Fontell’s condominium association well before the association or Fontell arguably defaulted on that debt. Accordingly, the district court properly found that TMGA was not operating as a “debt collector.”

 

 

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