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UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C.
20580
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Division of Credit Practices
Bureau of Consumer Protection
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August 31, 1992
Lorraine M. Sheehan
Carlton, Fields, Ward, Emmanuel,
Smith & Cutler, P.A.
One Harbour Place
P.O. Box 3239
Tampa, Florida 33601
Dear Ms. Sheehan:
This is in response to your July 22, 1992, letter requesting
an informal staff opinion concerning the Fair Debt Collection
Practices Act ("FDCPA" or "Act"). I apologize
for the delay in responding.
As we discussed in our telephone conversations and as set out
in your letter, your question is based on the following set of
facts. Your client is a management company for various time-share
condominiums. Pursuant to contracts with the various condominium
associations, the management company, in exchange for a fee, is
required to manage, maintain and operate the condominiums for
and on behalf of the associations. Each year, the management company
is responsible for preparing an itemized annual budget for each
association. Once the budgets are approved by the respective boards
of directors of the associations, the management company is responsible
for billing and collecting the annual assessment due from each
time-share owner. According to the condominium documents, the
time-share owners agree to pay the annual assessment, on a pro-rated
basis, for the expense of operating, managing and maintaining
the condominiums. The management company bills the time-share
owners for the assessments as soon as they become due; the association
does no billing of its own.
In collecting the assessments, the management company is authorized
to send follow-up letters to delinquent time-share owners and
collect late charges and interest when the assessments are not
paid when due. In addition, the management company, as agent for
the associations, has the right to file a "claim of lien"
against a time-share owner's interest in the event the assessments
are not paid. Such a claim of lien can subsequently be foreclosed
upon by judicial procedure.
You ask whether, based upon the foregoing facts, the management
company falls within the FDCPA's definition of "debt collector."
Section 803(6)(F) excludes from the definition of debt collector:
any person collecting or attempting to collect any debt
owed or due or asserted to be owed or due another to the extent
such activity . . . (iii) concerns a debt which was not in default
at the time it was obtained by such person.
It is my understanding that the assessments being collected by
your client, the management company, are current when it begins
sending bills to the time-share owners. Because the debts (the
assessments) owed to another (the condominium associations) are
not in default at the time the management company obtains them,
the management company does not appear to be a debt collector
for purposes of the FDCPA when it is collecting them.
The views expressed herein represent an informal staff opinion.
As such, they are not binding on the Commission. They do, however,
reflect the staff's current enforcement position.
Sincerely,
Thomas E. Kane
Attorney
Division of Credit Practices
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