In an important decision the New Jersey Court of Appeals held that landlords and their attorneys violated the Fair Debt Collections Practices Act (FDCPA) by demanding in eviction pleadings more rent than allowed under both state and federal law.[1]
The lease in question defined late fees and other charges as additional rent. The court held both the landlord and its attorney violated both state and federal law by demanding an amount that included the additional amounts as rent.
The case is important because it has implication for landlords in every American jurisdiction, not just New Jersey. Several courts have held that attorneys who regularly perform evictions for landlords are debt collectors for the purposes of the FDCPA.[2] And although evictions are brought through state law processes, the Section 8 program is governed by federal law. [3]
Under New Jersey landlord-tenant law the tenant may avoid eviction by paying the actual rent due and owing, regardless of any outstanding non-rent or extraneous charges. [4]
Also, the court held that federal law defines “rent” for project based section 8 housing in such as way that these items are not included as rent irrespective of the terms of a lease defining them as additional rent.[5]
Plaintiffs’ leases expressly provide that in addition to the monthly rental rate, tenants are obligated to pay at least three forms of “additional rent”: late fees, court costs, and attorneys’ fees incurred by Sasil. Because the apartments are subsidized by HUD, plaintiffs’ legal “rent” obligation is strictly defined by federal statute and regulations as thirty percent of their “adjusted” monthly household income.[6]
Landlords of project based Section 8 tenants and their attorneys should be wary of this holding and very careful how much rent is demanded in eviction pleadings.
By Scott Eller
Further reading:
After ‘Romea’ Attorney Compliance With FDCPA in Landlord/Tenant Cases, Arthur Gussaroff and Allison Hertog, New York Law Journal April 29, 1998.
Landlord’s Beware: Fair Debt Collection Practices Act Applies to Eviction Actions, Posted on April 30, 2007 by Thomas S. Onder.
[1] Hodges v. Feinstein, Raiss, Kelin & Booker, LLC, 893 A.2d 21, 383 N.J.Super. 596
(N.J.Super.App.Div. 03/08/2006).
[2] See, for example, Romea v. Heiberger & Associates, 163 F.3rd 111 (2nd Cir.1998); Hairston v. Whitehorn & Delman, 97 Civ. 3015 (1998).
[3] See 42 U.S.C.A. § 1437a; (a)(1); 42 U.S.C.A. § 1437f; 24 C.F.R. 5.601; 24 C.F.R. 982.310; 24 C.F.R. 247.4.
[4] The court cited N.J.S.A. 2A:42-9.
[5] The court cited 42 U.S.C.A. § 1437a(a)(1); 24 C.F.R. 5.601(2006). Note that this authority does not apply to the tenant-based voucher program. See U.S.C.A. § 1437a(a)(1); 42 U.S.C.A. § 1437f(7); 4 C.F.R. 247.1. It is thus unclear whether the holding in Hodges would be different in case with similar facts involving the tenant-based voucher program, rather than the project based program.
[6] Hodges, 2007.NJ.0000059< http://www.versuslaw.com> at 2.