Q: Does community management co need collection agency lic in MD if all they are doing on behalf of Assc is send reminder?
If the management company represents a community association and one of the owner did not pay their monthly due on time and you’re only sending an automated reminder electronic notice, do you need a collection agency license in order to send that reminder notice?
A: HOAs, condo associations, and their property or association management companies, are all excluded from the definition of a debt collector under the Federal Fair Debt Collection Practices Act. The association itself is excluded because it originated the debt obligation, and the management company is excluded because its principal business is not to act as a collector of third-party debts but to act as a management company. The mailing of past due invoice notices is merely an ancillary activity to their main business function of managing the HOA affairs. If, however, the HOA retains a law firm, or uses another entity name, to pursue debt collection against owners, then the law firm or any other entity name it is acting under would likely qualify as a debt collector. But, under your factual scenario, the answer is no.
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