Collection of Assessments in Lieu of the Federal Racketeering Act
Posted by Ryan McCabe at 3/20/2009 8:53 AM 
Categories: Collection law,Federal Regulations,Homeowners Association,Assessments
Categories: Collection law,Federal Regulations,Homeowners Association,Assessments
Virginia Discrict Court for the Western District ruled that an association did not violate the Racketeer Influenced and Corrupt Organizations Act ("RICO"). Miller v. Dogwood Valley Citizens Assoc., Inc., C.A. No. 3:06cv00020, U.S. Dist. Ct., W.D. Va., Aug. 28, 2008. The association levied special assessments against association members without knowing or realizing that it did not have the authorization to do so. When two members sued the association for wrongfully pursuing foreclosure proceedings on delinquent properties, a court ruled that the association could not have levied special assessments.
The members then sued the association for alleged violations of the RICO act. The district court first noted that RICO liability only extends to "unlawful activities that pose a special threat to social wellbeing." RICO makes it unlawful to conduct or participate in the conduct of an enterprise using racketeering activity or collection of unlawful debt. The association, however, legitimately believed it had authority to collect debt. Once a court ruling was issued notifying the association of lack of such authority, the association stopped any attempts to collect special assessments. No violations under RICO occurred.
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