We have all heard the expression “that wheel won’t turn without any grease!” And every member of a Board of Directors of a community association knows that their Association cannot run without the regular and timely payment of assessments. Generally, a community’s Declaration will provide for either a statutory lien for unpaid assessments (for condominiums or homeowners associations subject to the Georgia Property Owners’ Association Act) or lien rights. Declarations also generally allow the association to collect, as part of its lien, interest, late fees, and costs of collection. But as most of us have discovered, collecting assessments through traditional legal channels is expensive and time consuming. Some condominiums are permitted to suspend certain utilities as a remedy for non-payment of assessments, but only after they have obtained a judgment. Many associations are also authorized by their Declaration or Bylaws to suspend an owner’s rights to use the amenities if they are delinquent in the payment of their assessments. Alice Richardson is president of Community Club Management, Inc. which specializes in managing single family communities with extensive amenities. She told me: “I am continually amazed by the number of people who will come to my office with cash in hand for the total amount due, not questioning late fees or interest, the week before the pool passes are issued.”

In addition to these remedies, which are contemplated by a community association’s Declaration, it seems like every Board, frustrated by assessment collection, sooner or later asks its management company or attorney if they can publish a list of the names of owners who are delinquent in the Association’s newsletter, post it at the mailboxes, or display it at the entrance of the community. In Colonial America people were put in stocks, subjected to public dunkings or forced to wear clothing emblazoned with letters reflecting their transgressions. Why not public shaming as a method of debt collection?

The position taken generally by community association professionals is that there is too much potential exposure for liability for the management company and/or the Board in publishing names of delinquents. In Georgia, libel is “a false and malicious defamation of another, expressed in print, writing, pictures, or signs, tending to injury the reputation of the person and exposing him to public hatred, contempt, or ridicule.” (O.C.G.A. Section 51-5-1.) Some Boards have been reluctant to publish names because there is the possibility that the records of the Association may not be current and that upon publication, the list may not be correct. Management companies, which provide the account information, are likewise reticent to certify lists of delinquents to a newsletter committee who may not get the newsletter out for several days or weeks, during which time some homeowners might pay. To publish the name of a person as delinquent if they were in fact current with their payments would almost certainly give rise to lawsuit. Similarly, only the record title owner of a property is generally liable for payment of assessments. Without performing a title examination, it is impossible to know who the record title owner is. Many times we have discovered, prior to filing suit, that the residents, who everyone always assumed were the owners are not. Very often only one spouse is on title to the property.

If the Association’s records are correct and current, a lawsuit for libel arising from the publication of names of delinquents would probably not be successful. The following summarizes the most current statement of the law in this area: “As respects a charge of failure to pay debts, without any imputation of insolvency, it seems to be settled that a writing containing the mere statement that a person who is not a trader or merchant, or engaged in any vocation wherein credit is necessary for the proper and effectual conduct of his business owes a debt and refuses to pay, or owes a debt which is long past due is not libelous per se and does not render the author or publisher of such statement liable without proof of special damages [Cit.]” Sumner v. First Union Nat’l. Bank &c., 200 Ga. App. 729, 409 S.E2d 212 (1991); Estes v. Sterchi Bros. Stores, 50 Ga. App. 618, 179 S.E. 222 (1935).

However, even if an Association is entirely sure that the account information is correct, it may only mean that the Association could successfully defend a lawsuit for libel, not prevent such a lawsuit from being filed. Some of the possible claims plaintiffs would assert against the management company, the Board collectively, and perhaps its members individually, would be injury to reputation, slander of credit, injury to credit and financial standing in the community, defamation and intentional infliction of emotional distress, and seek damages therefor. Because libel is an intentional tort, it is possible that an Association’s Errors and Omissions insurance policy would either provide a defense for the Association under a reservation of rights or perhaps decline coverage altogether. In that case the Association would have to underwrite the costs involved in the defense of the case.

We will come back to the legal issues in a moment, but first let us look at this issue from a pragmatic point of view. Will it work?

People do not pay their assessments for a variety of reasons, these categories are not exhaustive. First, to be blunt, some homeowners are broke and cannot pay their assessments. No one chooses this condition. Some people find themselves financially over-extended as the result of some family tragedy, inflated gas bills, illness or even death. Some arrive there due to poor planning, others by no planning at all, and some by misfortune. But bottom line, no one is thrilled to be broke and if they had the money, they would happily pay their assessments. Publishing the names of people in this category will definitely embarrass them, but it will not translate into money. You have made someone even more miserable than they were before, but not accomplished the objective of collecting the assessments. Second, this is a group of uninvolved or disaffected homeowners. These are the people who claim they never heard there was a homeowners association, have never used and will never use the pool, and do not know any of their neighbors. They will never know if their names are published in the newsletter and could care less. Again, the objective of collecting assessments has not been achieved. Third, this is a troublesome group of people who do not pay bills as a lifestyle. These are perhaps the most annoying delinquents. They generally have nice cars and homes and have jobs. To them, payment of debt is a game. If you want their money, you have to find it and get it. If you read their credit reports, it is astounding that they qualified for a mortgage at all. These people will not pay assessments, will not respond to warning letters from attorneys and generally do not even respond to lawsuits. They simply wait to have a garnishment filed against their bank account or employer. Amazingly, they sometimes do not even call when that happens. These people are callous to the entire collection process. They do not care at all if you publish their names. The fourth group of people have simply made a clerical error and overlooked payment. These people will tell you, “My wife pays the household bills and I pay the mortgage, I guess this fell through the cracks.” As soon as they learn of the oversight they pay. Publishing their names will get you the money but could alienate them in the future. Finally, you have people who are experiencing a temporary financial or personal setback which may have resulted in failing to pay on time. These are loyal and good association members who have paid their assessments every year on time, but this year did not. Do you want to publish their names without asking what the problem is, or seeing if there is anything that you, as a neighbor, can do to lighten their load? With this group you may collect your assessment as a result of publishing their names, but what did it cost you as a community?

While there are no guarantees, I believe an Association could successfully defend itself in a lawsuit arising from the publication of a list of the delinquent owners, as long as the information regarding amount due and the correct owner is current and correct. However, is a Board acting in an Association’s best interests in pursuing a policy which may well subject it to a lawsuit unnecessarily? Will enough money be collected to justify adopting such a policy? Is this a practice which reflects how we treat our neighbors, and how we would want to be treated, in this community? These are just some of the questions a Board should consider before adopting a publication policy.