Rent Demand by Attorneys Triggers FDCPA

This folder examines the definition of "debt" under the FDCPA. Whether a "debt" is the subject matter will determine whether the FDCPA applies. Case law and the definition under the FDCPA differentiate consumer debt from business-related debt.
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David A. Szwak
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Joined: Thu Jul 13, 2006 11:19 pm

Rent Demand by Attorneys Triggers FDCPA

Post by David A. Szwak »

FDCPA requirements apply to execution and delivery of three-day rent demand
Law Reporter, Apr 1999

Romea v. Heiberger &Assocs., _ F.3d _, No. 98-7259, 1998 WL 865098 (2d Cir. Dec. 9,1998).

The Second Circuit Court of Appeals held that the requirements of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. (sec)(sec)1692-1692(o), apply to an attorney's execution and delivery of a three-day rent demand.

Heiberger & Associates (Heiberger) sent a letter to Romea demanding back rent. Romea sued Heiberger, alleging the letter had violated the FDCPA. The trial court denied defendant's motion to dismiss.

Affirming, the Second Circuit noted that under the FDCPA, a debt is defined as an obligation to pay money arising from a transaction involving personal, family, or household business. The court found that back rent is an obligation arising from a failure to pay the amounts due under a contractual lease transaction. Comparing back rent to a dishonored check, the court said the obligation to pay arises from a breach in the payment obligations, and, thus, it is considered a debt under the plain language of the FDCPA.

The court rejected defendant's argument that the threeday notice sent to plaintiff was not a communication under the FDCPA because it had been sent pursuant to state law requirements for summary proceedings to recover property. The court said that although the letter may have had the primary purpose of regaining possession of the property, it also conveyed information regarding a debt to another person, as required for a communication under the FDCPA.

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The court also concluded that a process server's exemption from the FDCPA is inapplicable to the preparer of the debt-related communication, explaining that to read the statute as carving out an exemption for anyone who prepares a communication-regardless of FDCPA violations-because the communication is ultimately served on the consumer would significantly impede the statute's effectiveness.
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