2022 CAI-NJ September LAC Issue

NJ-LAC Poised to Seek Common Interest Community Associations Carve Out from Proposed

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By Andrew J. Podolski, Esq., Stark & Stark Attorneys at Law

19 th Century British writer and cleric Sydney Smith is credited with first articulating the familiar metaphor of forcing a square peg into a round hole. However cliché, this imagery aptly describes how a proposed bill – A3131 – would force unreasonable debt collection restrictions upon the com mon interest community (CIC) industry. On March 7, 2022, State Assemblyman Paul Moriarty of Camden and Gloucester County (District 4) intro duced A3131 to the Assembly. The spirit and intent of the bill on its face is reasonable, if not admirable, in that it restricts creditors from employing certain over zealous and unfair debt collection practices. However, if passed into law as written, A3131 will also preclude more benign and reasonable practices that CIC associ ations commonly use to collect unit owner debts. For this reason, the New Jersey Legislative Action Committee (NJ-LAC) is poised to seek a carve-out of CIC associa tions from the scope of A3131.

Existing Debt Collection Restrictions New Jersey does not currently have its own statute or regulations governing debt collection practices. Rather, the Federal Fair Debt Collection Practices Act (FDCPA) applies to debt collection in New Jersey. The FDCPA imposes a variety of restrictions for debt col lectors. By way of limited example, under the FDCPA, debt collectors cannot contact debtors at unusual times or places or use threats in any manner. They cannot pose as court personnel or law enforcement or disguise their true identity in communicating with debtors. When contacting people other than the actual debtor, debt collectors cannot disclose that the debtor owes a debt, use language on envelopes that indicates there is a debt, etc. Importantly, CIC associations that are owed money by unit owners are not defined as debt collectors under the FDCPA. A debt collector is a person or company who “uses any instrumentality of interstate commerce or the mail in any business the principal purpose of which is CONT I NUE S ON PAGE 22

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