Are HOA management companies debt collectors?
Sometimes. Whether a management company counts as a "debt collector" under the FDCPA is a case-by-case question that turns on the company's "principal purpose" — collection-focused firms likely qualify, while general property managers may not.
The "principal purpose" test.
Under the federal Fair Debt Collection Practices Act ("FDCPA," 15 U.S.C. § 1692, et seq.), a "debt collector" is an individual or business that regularly attempts to collect debts owed by consumers to third parties. 15 U.S.C. § 1692a(6). Whether an individual management company falls within that definition is a case-by-case question. Ultimately, it boils down to what the "principal purpose" of that specific company is.
How courts draw the line.
If a management company focuses its time and attention on collecting unpaid assessments and enforcing liens, there is a good chance a court would view it as a "debt collector" under the FDCPA.
On the other hand, a management company more concerned with maintaining the association's facilities but occasionally tries to collect delinquent assessments as a small part of its work might not qualify as a "debt collector" under the FDCPA. See, e.g., Alexander v. Omega Management, Inc., 67 F. Supp. 2d 1052 (D. Minn. 1999); Franceschi v. Mautner-Glick Corp., 22 F. Supp. 2d 250 (S.D.N.Y. 1998).
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