Our board recently discussed publishing a list of debtors to collect past due assessments. Is this a bad idea?
I’m not going to beat around the bush here. It is generally a horrible idea to publish a list of delinquent owners for others to see, even if the governing documents make it permissible.
What if the delinquency information was viewed and used by a potential employer to deny an applicant? What if the delinquency information being relied upon was incorrect?
Moreover, if the association (or management company) is found by a court to be a debt collector under the Fair Debt Collection Practices Act—which can differ by federal circuit and would, to some degree, be fact specific for each suit or claim—posting a delinquency list could be viewed as blacklisting owners and, therefore, be found to be discriminatory conduct. The legal repercussions could be severe.
Finally, even if an association may not currently be considered a debt collector, this should not be the deciding factor. Rather, the association should examine the risk of sharing a delinquent owner’s private information with others before making a decision that will likely end up costing the association more (not just financially) than it would benefit. Although it might be permitted, is it in the best interest of the association? The answer, likely, is no.
HOAresources.com explores questions and comments from community association members living in condominiums, homeowners associations, and housing cooperatives. We then assemble trusted experts to provide practical solutions to your most commonly asked, timely questions. We never use real names, but we always tackle real issues. Have a question or comment about your community association? Submit here for consideration:
Join CAI’s online community for access to the industry’s most in-demand community association resources.
Thousands of your peers are sharing advice.