I am 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 [usually decades old] governing documents in the community provide that it is permissible. This is even true if a delinquency list is not posted electronically but is still published in paper form and posted on the clubhouse bulletin board to “shame” the delinquent owner (which was the original intent of provisions in governing documents which allowed for such actions) – because all it takes is for someone to take a photograph of the delinquency list on their smartphone and post it on social media – then it is literally disseminated for the entire world to see! Also, for example, what if the delinquency information was viewed and utilized by a potential employer to deny a position to a “deadbeat” applicant, and, what if the delinquency information being relied upon was incorrect? It’s like a snowball that rolls down a mountain and becomes an avalanche.
Moreover, if the Association (or management company) is found by a court to be a “debt collector” under the Fair Debt Collection Practices Act (FDCPA) (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 could therefore be found to be discriminatory conduct. The legal repercussions could be severe (i.e., expensive) if a violation of the FDCPA were to be found. See15 U.S.C. §§ 1692-1692p. Section 805 of the FDCPA, “Communication in connection with debt collection”, provides as follows in Section (b), “Communication with third parties”:
Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a post-judgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.
All of this is becomes especially true if the wrong information is published and disseminated and that information is used to the detriment of the unit owner. This opens a whole new can of worms for liability for the Association (and potentially the management company).
Finally, even if an Association may not currently be considered a debt collector under the FDCPA in many jurisdictions, this should not be the deciding factor on this type of issue. Rather, the Association should examine the entirety of the issue and the risk associated with sharing a delinquent unit owner’s private account information with other unit owners before making a decision that will likely end up costing the Association more (in many ways, not just financially) than it would benefit the Association. The correct analysis is therefore: “we might be permitted to do this, but is it in the best interest of the Association?”. The answer is likely no.
My advice: do not “publish” a list of delinquent owners!
Edward Hoffman, Jr., Esq., CCAL
* The content for this Blog post is based upon the [abbreviated] prior written work of the author as originally published in the March/April 2020 issue of CAI’s Common Ground magazine and in CAI’s HOA Resources Blog.