Class Action Claims Certain Maryland Homeowners Charged Illegal Fees on HOA Dues

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action alleges Associations, Inc. (Associa), Select Community Services (SCS) and HOAM Ventures unlawfully charge a $2.95 convenience fee when collecting monthly homeowners’ association (HOA) dues from Maryland homeowners.

Want to stay in the loop on class actions that matter to you? Sign up for ClassAction.org’s free weekly newsletter here.

The 27-page lawsuit says Associa, a national company providing HOA and property management services, has local subsidiaries, including SCS, in over 30 states serving over six million homeowners. The case says that when SCS collects monthly HOA dues from Maryland homeowners over an app called TownSq, it routinely charges them an extra fee to pay for their “services.”

“The convenience fees are an unlawful profit center imposed and collected by Defendants and its agents, and are not simply pass-through costs to Plaintiffs and the members of the putative class,” the case states. “Even if the fees were authorized, which they are not, the sums collected are significantly in excess of Defendants’ actual costs to accept dues over the internet.”

According to the complaint, the defendants have run afoul of the Maryland Consumer Debt Collection Act (MCDCA) and the Maryland Consumer Protection Act by charging residents “pay-to-pay” fees. The suit claims that the defendants have further violated the MCDCA by collecting add-on fees not expressly authorized in the agreements creating a given debt, such as the HOAs’ governing documents.

Moreover, state law prohibits the defendants from charging any fees for debt collection because they are not licensed as a collection agency, the filing contends.

Per the complaint, the illegal fees are automatically imposed when homeowners make electronic payments via the TownSq app, which Associa owned until it was sold to HOAM in April 2022. The lawsuit states that HOAM is located at the same Texas address as Associa and was created less than a month before it acquired the TownSq app.

The lawsuit seeks to cover all consumers in Maryland who, within the past three years, paid a fee or charge imposed or collected by SCS, Associa or HOAM while making a payment arising from a homeowners or condominium association debt where the fee or charge was not expressly authorized by any agreement governing the debt or permitted by law.

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter here.