In South Florida, the South Florida Sun Sentinel
- In defiance of state laws, some condo associations are seeking to use all means at their disposal to get condo owners who are behind on fees to pay up, including public humiliation. A few years ago, not many boards would have asked to see a list of condo owners who were behind on association fees, because not many were delinquent. But in the midst of South Florida's foreclosure crisis, some associations have posted "deadbeat lists" in common areas in hope of turning up the heat on slow-to-pay owners — a move many say is illegal, unfair and unethical.(1)
- Tempers are heating up in South Florida as threats are being made against both the association members who try to collect debts and those who feel victimized by the harsh tactics. Board members' cars have been keyed, and amenities such as gyms and pools have been declared off-limits, assistant condo ombudsman Bill Raphan said. "Give me one good reason for putting these lists up. You put their name up, but it can be dangerous," Raphan said. "Boards want to keep [delinquents] out of the pool ... but you just can't do that in a condo."(2)
- Recently, courts have given better options to associations, particularly in the case of nonpaying landlords who lease out their units. One legal answer includes seeking a court-appointed receiver, or unbiased intermediary, who can bypass the foreclosed or delinquent owner and collect rent directly from the tenant, in place of having the tenant pay rent to the owner.(3) The funds are deposited into a receivership account, where they are then divided up between those to whom the owner owes money. [...] Receiverships are popping up in areas hit hard by the foreclosure crisis, said local receiver Seth Heller of Heller and Company.
For more, see Condo deadbeat lists may be effective, but also illegal.
(1) F.S. 559.72(14) of the Florida Consumer Collection Practices Act specifically prohibits the use of deadbeat lists within the state of Florida when collecting what it defines as a "consumer debt" (see F.S. 559.55(1)), but does not apply to the collection of any debt not falling within the "consumer debt" definition, including debts owed on units owned by business entities (ie. corporations, partnerships, joint ventures, etc. - see F.S. 559.55(2)). Unpaid maintenance fees owed by an owner-occupant (ie. a natural person using the apartment either as a principal residence, or as a part-time second home) appear to fall within the definition of "consumer debt." It is arguable, however, whether or not such unpaid maintenance fees owed by a rent-skimming, non owner-occupant (ie. a natural person owning the unit as an investment or business) leasing the premises out for profit as a landlord would fall within the statutory definition of "consumer debt."
The Florida Commercial Collection Practices Act (F.S. 559.541 et seq.), which regulates the business of collecting "non-consumer debts" within the state of Florida does not contain any specific prohibition against the use of "deadbeat lists" in the debt collection process.
The Federal law regulating debt collection practices throughout the U.S., the Fair Debt Collection Practices Act, applies only to "consumer debt" (which is defined in the same way as in Florida law), which is an obligation to pay money by a natural person (as opposed to a corporation, partnership, joint venture, etc.) arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes. (15 USC 1692a(3), 1692a(5)).
(2) If some condo associations are so intent on spreading the word about delinquent unit owners with "deadbeat lists," simply mailing out copies of the information to all the unit owners (but not tenants), without publicly posting the information on the premises, is a preferable method of doing so. This information, along with copies of any other business record of the association, is something the unit owners are legally entitled to obtain by written request anyway, so mailing the information (preferably after receiving a written request from a unit owner) without an actual public posting of it should dodge the prohibitions of the debt collection statutes.
(3) See South Florida Business Journal: 3rd DCA upholds use of condo receivers.