Dist. Ct. Rules HOA Action to Collect Fine is Not Violation of Fed & State Debt Collection Laws

U.S. District Court, Northern California District, decision (November 21, 2014).

An HOA imposed fines against the owners of a separate interest in the homeowners association for their violation of the HOA’s governing documents that prohibit the renting of the subject property. The homeowners brought suit against the HOA and its attorneys based on claims that they violated the federal Fair Debt Collection Practices Act (“FDCPA”) and California’s Rosenthal Fair Debt Collection Practices Act (“Rosenthal Act”). The homeowners contended that the disputed obligations owed to the HOA were consumer debts that were covered by the FDCPA and the Rosenthal Act. In response, the HOA and their attorneys alleged that the underlying financial obligations to pay the fines imposed by the HOA were not debts that are covered by the FDCPA and the Rosenthal Act.