A New Jersey Federal District Court recently refused to dismiss a plaintiff’s claim under the Fair Debt Collection Practices Act (FDCPA) brought against a realtor who took steps on behalf of the landlord-client to try and collect overdue rent from the plaintiff. As a Realtor you should be aware of this ruling and its potential consequences to keep yourself free from exposure.
A landlord took harsh action against the plaintiff, his tenant, who was 10 day delinquent in her rental payment. The plaintiff/tenant, who was an officer in the US Army, had received a mobilization order which included an annual salary of $84,000. Presumably in an effort to assist her client, the real estate agent, on behalf of the landlord, contacted the tenant’s military superiors and advised them her rent payment was late. Based on information supplied to them by the realtor, plaintiff’s superiors revoked her mobilization along with the accompanying $84,000 salary.
When plaintiff sued both the landlord and the real estate broker under the FDCPA, the broker moved to dismiss, arguing that she was not a “debt collector” as defined under the FDCPA. The FDCPA defines a debt collector as:
“Any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due, or asserted to be owed or due to another.”
While the broker’s liability has yet to be decided, the court ruled that plaintiff had the right to conduct discovery to determine whether the broker was a “debt collector” under the FDCPA.
While it appears the broker may have been attempting to better service the landlord-client, the better practice is to have the landlord collect its own debt or – better yet – refer the landlord to an attorney. Any broker who feels compelled to try to collect rent on behalf of a landlord-client should first become fully conversant with the somewhat labored and intertwined provisions of the FDCPA, and then adhere to its requirements because those who fail to do so could find themselves in expensive litigation in their Federal District Court, which is something no realtor wants.
If you have questions about the FDCPA or any other landlord/tenant issues, contact the law offices of Bergmann & Good. We’re here to help.