HEROES Act May Impact Community Associations' Collection Efforts
To continue to provide support in response to the COVID-19 pandemic, U.S. Congress is considering passing H.R. 6800 (the Health and Economic Recovery Omnibus Emergency Solutions Act or The HEROES Act!), a bill that promises to provide financial relief to Americans that have been impacted by the pandemic. Besides extending the Paycheck Protection Program and expanding the Federal Reserve lending facilities, the bill would also freeze consumer debt collection and expand the moratorium on evictions and foreclosures.
It is important to note that the proposed bill expands the definition of “debt collector” to include condominium, homeowners, and cooperative associations. If passed by the U.S. Senate in its current form, the HEROES Act would prohibit community associations from collecting outstanding assessments until 120 days after the end of the Emergency Declaration declared by President Trump in response to the COVID-19 pandemic. With the projected outlook of when the nation will completely reopen being months away, it would be impossible to determine how long this ban could last. Since assessments are the lifeline of a community association, restricting the ability to collect unpaid assessments would be detrimental to the operation and survival of associations.
Though it is unlikely that this legislation will pass with both the Senate and President Trump openly expressing their opposition to the Act, we will continue to inform you of any updates as the bill makes its way through the Senate. It is important to underscore that similar bills intended to assist Americans experiencing financial hardships will continue to be considered. Whether they will include unintended consequences that may impair community associations’ ability to pursue the collection of assessments from delinquent owners remain to be seen. We encourage all of our readers to continue to pay attention and to monitor the relief efforts being legislated in order to stay informed of the potential financial impact that these bills may have on the community association industry.