Legal Question in Credit and Debt Law in California

My HOA fees were delinquent in the amount of ~$1,000 and the HOA is now suing for collection costs of $5,000.00 on a principal balance of only $1,000. Does this violate some sort of Fair Collection law because it seems like a form of extortion to me. I'm in California and I know that Nevada had some success on capping these collection costs that an HOA can charge. Do I have any protection from this practice here in CA.?


Asked on 3/15/12, 6:06 pm

1 Answer from Attorneys
Michael Stone Law Offices of Michael B. Stone Toll Free 1-855-USE-MIKE

Actually, the FBI has arrested and gotten indictments against some people associated with HOAs in Nevada who were allegedly running them as mob rackets. Yes, $5,000 in collection charges to collect $1,000 is unreasonable. You should send a "validation letter" to the HOA asking them to itemize how they arrived at $5,000. If they sue you, you could defend it on the grounds the fees are unconscionable. And you could also possibly sue under the Fair Debt Collection Practices Acts (state and federal).

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Answered on 3/15/12, 6:35 pm


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