Friday, September 21, 2012

Class action against HOA management firms for unauthorized practice of law

By George K. Staropoli

A class action suit was filed in Maricopa County, AZ against numerous HOA management firms for the unauthorized practice of law resulting from their attempts to collect HOA debts.  The two plaintiffs allege against some 30 management firms, among other things,

Upon information and belief, the Defendants represented to the public and to members of the Class that they were acting with the full measure of authority reserved for licensed legal counsel for Defendants by negotiating debt on behalf of a third party, drafting, filing and/or preparing legal papers, including liens, debt collection letters, complaints, default judgment, judgments, and other debt collections activities which require the appearance of a licensed and authorized attorney; and charging fees for the foregoing activities. . . . Defendants actions directed at these Class Members constitute the unauthorized practice of law and are clear violations of the Fair Debt Collections Practices Act and Arizona law.

Crame v. 360 Management (Maricopa County Superior Court, CV 2012-095288, Sept. 10, 2012). The case has been moved to Federal Court.
A class action is undertaken when the number of victims is so numerous and who have basically the same allegations of wrongdoing. The two plaintiffs represent the class of homeowners who meet the following criteria,

All persons or entities who, at any time from August 1, 2006 to the present (the “Class Period”), were members of a Homeowners’ Association or like entity and who were pursued for an alleged debt owed to that Homeowners’ Association or like entity by any of the Defendants or other Community Management Companies who purported to pursue collections against said persons or entities without proper legal representation and/or on behalf of their third party HOA/Condo customers and/or who improperly held themselves out to be an attorney.
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