HOME OWNER ASSOCIATION SUED IN CLASS ACTION FOR COLLECTION PRACTICE

Class-action suit filed over HOA debt-collection practices

By Steve Green

13 June 2011

Legal headaches seem to be intensifying for Nevada homeowner associations and their collection agencies, with the filing Monday of another class-action lawsuit over HOA debt-collection practices.
Attorneys for Benita Jones Ebel filed suit in U.S. District Court in Las Vegas against Nevada Association Services Inc. (NAS), claiming it’s been violating the federal Fair Debt Collection Practices Act by sending "dunning letters" that are "unfair and unconscionable" and invaded her privacy.
Ebel in the lawsuit seeks to represent a class of people who received such letters over alleged debts resulting from unpaid HOA assessments.
The suit specifically charges that in a Dec. 17 collection letter regarding an alleged debt to the Rancho Viejo HOA, NAS threatened to file a lien against Ebel’s home if the debt wasn’t paid within 10 days.
This violated the law in that consumers have 30 days to dispute such debts, the lawsuit suggests.
"As a result of defendant’s threat to record a notice of delinquent assessment lien, defendant threatened to take non-judicial action to effect … disablement of plaintiff’s property without the present right to do so," charged the suit, which was filed by attorneys with Cogburn Law Offices.
David Stone, president of Nevada Association Services, said Monday his company complies with the debt collection law.
"We will file the appropriate responsive pleading, and if this is found to be a frivolous lawsuit we will be seeking attorney's fees. We expect this claim to be adjudicated in our favor, as similar claims have been. We have been sued before and I expect more lawsuits. Plaintiffs are looking for a quick payday and this is not going to happen," Stone said.
With the recession causing many homeowners to fall behind on paying HOA assessments, and vacant and foreclosed homes sometimes producing no revenue for HOAs, collection activity has picked up in recent years and controversies and lawsuits have followed.
Numerous collection lawsuits are pending in state and federal court in Las Vegas and a massive complaint was filed last month with the state Real Estate Division against more than 500 Nevada homeowner associations.
Yet another pending lawsuit, filed by a Bank of America subsidiary, claims HOAs have been trying to get the bank to pay for unauthorized attorney’s fees and collection costs related to assessments against foreclosed homes.