Fair Debt Collection Practices Act (FDCPA)

The following excerpt is from IREM’s publication, Practical Apartment Management, Sixth Edition (IREM © 2009):

The FDCPA is federal law that has been on the books for some time, and it includes the collection of rent. The primary points of the law that affect those in the apartment rental business are as follows:

• Collection efforts must be directed only to the debtor(s). Collection techniques in the past have included advising the employer or the parents of a late-paying resident. While this practice often brought quick results, the rights of the particular consumer were probably violated.
• Announce the purpose of your communications. The FDCPA dictates that you clearly announce that the purpose of a telephone call or letter is primarily for the purpose of collecting a debt. This allows the debtor the option to continue listening or reading once you have stated your purpose. Most landlord communiqués are very direct, so this provision should not change that part of your collection procedure.
  Always notify the resident when a post-dated check is cashed. The way to eliminate this step is to not accept post-dated checks. Most apartment operators insist that all checks carry the current date. In certain situations you may agree to hold the check for a few days before depositing it, but be sure the check carries the date it was written so that it cannot be construed as post-dated.
• The debtor has a 30-day period in which to disclaim the debt. This provision is subject to a number of varying interpretations. Some say that landlord-tenant law effectively provides the debtor with an opportunity to object. Others argue that the contractual agreement of an ongoing lease is different from a consumer debt obligation, and that this provision in the law gives a resident an automatic one-month grace period. Apartment managers should be familiar with this law and how it is interpreted locally.