Delinquencies are a major concern for many community associations. As annual meeting season approaches, we often get asked: can an association publish its delinquencies to the rest of the community? We generally advise against this practice for the following reasons:
Violations of the Federal Fair Debt Collection Practices Act (“FDCPA”)
The FDCPA is a federal law that governs collection activities of debt collectors. It defines debt collectors as any person or entity who regularly collects, or attempts to collect, directly or indirectly, debts owed or asserted to be owed to another. Pursuant to the terms of the FDCPA, a debt collector may not publish or otherwise share any information about a debt to a third party or to anyone other than the debtor, the creditor, or their respective attorneys. It also specifically provides that a debt collector may not publish a list of debtors to third parties. Therefore, publishing of a list of delinquent homeowners, particularly by an association’s law firm, is a clear violation of the FDCPA.
Potential claims of libel and/or defamation
As a creditor, an association should not publish the owner names and/or addresses of owners that owe the association money because doing so may expose the association to a potential claim for libel. Libel is defined under Georgia law as the false or malicious defamation of another expressed in print, writing, pictures, or signs, tending to injure the reputation of the person and exposing him to public hatred, contempt or ridicule. If an association publishes a delinquency list that contains inaccurate information, an owner may have a claim. Since association accounts change on a daily basis, there is an increased risk of publishing outdated information. Please note, however, the association may disclose delinquency information that is public record.
In addition to the foregoing risks, it has generally been our experience that publishing delinquencies will have a negative impact in the community, which is the opposite of what boards typically expect. It can often result in a backlash against the board and the management company, not only from the delinquent owners, but also from other owners who are in good standing. Some view the practice as unconscionable or unnecessarily aggressive, especially towards those delinquent owners who may be, for reasons unknown to the board, faced with financial difficulties beyond their control. Furthermore, publishing delinquencies rarely results in more payments to the association. If an owner has failed to pay his or her association dues on a consistent basis, he or she will continue to fail to do so, regardless of the publication of his or her delinquency.
Overall, there are other collection tools available to associations that are much more effective than publishing delinquencies. For example, the association may be able to suspend use rights to the recreational facilities, suspend parking privileges, or suspend voting on association business. In sum, we advise that an association should explore all other means of collection before considering publishing delinquencies.