Appellate Court Says HOA Debt Collection Letters Must Satisfy “The Least Sophisticated Debtor” Test

Ninth Circuit U.S. Court of Appeals opinion (January 13, 2017).

This case involved a dispute between a homeowner (“Homeowner”) and the attorneys for her homeowners’ association (“Association”), who were attempting to collect unpaid dues that were allegedly owed to Association. The genesis of the dispute lies in a debt collection letter that Association’s attorney sent to Homeowner which demanded the payment of $385.00 in past due assessments together with late charges, administrative costs, and legal fees. The letter, which was sent on May 1, 2013, contained language that threatened to record a lien on Homeowner’s property if the debt was not paid. Included with the letter were copies of Homeowner’s account statement with Association and Association’s assessment collection policy.