28 Mar 2023
The Fair Debt Collection Practices Act (FDCPA) was enacted in 1978 to protect consumers from abuse by debt collectors. The FDCPA defines a debt collector as “any person who regularly collects, or attempts to collect, consumer debts for another person…”. A person is certainly not considered a debt collector when it seeks to collect its own debts under its own name.
But what about a third-party management company acting on behalf of a property owner? Can a third-party manager seek to collect unpaid rent from an owner’s tenants and avoid claims of being subject to the Act? One such case was Reynolds v. Gables Residential Services, Inc. (Southern District Florida, 2006). In that case, the tenant, Reynolds, sued the property management company alleging violations of the FDCPA.
While that clarification is good news to property managers making calls to recover unpaid rent/, the FDCPA still provides a number of clarifications regarding “best practices” when it comes to collecting a debt (even unpaid rent) from a customer that is protected under the Act.
As more and more property managers, especially in remote or virtual facilities, begin communicating with their tenants regarding unpaid rent, it becomes more and more important that the role of the property manager be made clearer, including the obligation of the property manager not only to rent the units but to collect rent for those units.
This article was originally published in Self Storage Legal Monthly Minute by Scott Zucker, March 2023
Scott Zucker is a founding partner in the Atlanta law firm of Weissmann Zucker Euster Morochnik & Garber P.C. and has been practicing law since 1987. Scott represents self-storage owners and managers throughout the country on legal matters including property development, facility construction, lease preparation, employment policies and tenant claims defense. He also provides, on a consulting basis, advice to self-storage companies in the areas of foreclosure and lien sales, premises liability and loss control safeguards. Scott can be reached at 404-364-4626 or by e-mail at Scott@wzlegal.com.
