Article by Awilda Esteras in Today’s Daily Business Review: “Appellate Court Reverses Itself, Finds Condo Fees Are Subject to FCCPA Restrictions”

Siegfried Rivera
September 2, 2020


The firm’s Awilda Esteras authored an article that is featured as the “Board of Contributors” expert guest commentary column in today’s edition of the Daily Business Review, South Florida’s exclusive business daily and official court newspaper.  The article, which is titled “Appellate Court Reverses Itself, Finds Condo Fees Are Subject to FCCPA Restrictions,” focuses on a recent unexpected decision by Florida’s Fifth District Court of Appeal that reverted from more than two decades of case law on the question of whether condominium association fees qualify as debts under the Florida Consumer Collection Practices Act.  Her article reads:

. . . The new opinion, which comes in a unanimous decision by all 11 judges of the Fifth DCA, redefines the term “consumer debt” under the FCCPA with its finding that obligations to pay condominium assessments may be considered debts under the FCCPA.

The appellate court’s decision in Williams v. Salt Springs Resort Association reversed the lower court’s ruling that dismissed the case in favor of the association and its property management company. In Williams, an association and property management company were sued after publicly posting a list of names of more than 100 delinquent unit owners along with the balance due by each owner. Williams, one of the owners whose name appeared on the list, filed a class action complaint against the association and the property management company asserting the public posting of “deadbeat lists” to enforce the collection of consumer debt amounted to a violation under the FCCPA.

The lower court was not swayed, as the Fifth DCA’s 1997 opinion in Bryan v. Clayton had settled the matter with its finding that condo fees do not meet the definition of a consumer debt under the FCCPA.

After the defendants prevailed based on the 1997 ruling, the appellate court reviewed all the facts and decided to reconsider its position.
The appellate court found that for the FCCPA to apply in this case, the plaintiff’s payment obligation must arise from a money, property, insurance or services transaction which is primarily for personal, family or household purposes.

“The purchase of a condominium is unquestionably a property transaction, and Williams alleged her condominium purchase was of residential property for personal, family, or household reasons,” the Fifth DCA concluded. It further reasoned that because the association’s bylaws require Williams to pay annual assessments, the obligation arose from the purchase of her unit. “Williams has sufficiently alleged that her condominium assessment arises out of a consumer transaction to purchase property, and that her ongoing obligation to pay assessments is a ‘consumer debt’ under the FCCPA.”

Essentially, the entire Fifth DCA decided that the time had come for a careful review of its 23-year-old decision. The court recognized that other state courts and even the federal courts have since ruled that association fees do indeed meet the definition of a consumer debt under other similar statutes.

“Our considered decision to recede from Bryan is informed by over 20 years of other courts’ detailed analysis of the FCCPA and the FDCPA’s plain language,” the opinion concludes. “For example, the Sixth and Tenth circuits followed Newman’s reasoning in concluding a condominium owner’s payment obligations arise in connection with the condominium purchase transaction, pursuant to condominium bylaws and state law, and are therefore ‘debt’ under the Fair Debt Collection Practices Act.”

By reversing the circuit court’s decision and remanding the case back for further proceedings, associations have been put on notice to begin abiding by the FCCPA in their collections practices and avoid such expressly forbidden tactics as the publication of a list of delinquent unit owners in an attempt to shame them into compliance. . .

Awilda concludes the article by noting that in light of this recent ruling, associations and property management firms that run afoul of the FCCPA in their collections tactics can now potentially face class action lawsuits leading to significant legal liabilities and costing hundreds of thousands of dollars.  She encourages community association boards of directors and property managers to consult with highly qualified and experienced association attorneys to conduct complete reassessments of all their collections procedures and protocols.

Our firm salutes Awilda for sharing her insights into the ramifications of this recent appellate opinion with the readers of the Daily Business ReviewClick here to read the complete article in the newspaper’s website (registration required).