Legal Issues

Legal Issues Issues

CFPB Has (Another) New Requirement for Landlords and Other Debt Collectors

By: Brownlee Whitlow & Praet, PLLC

In addition to the other requirements imposed upon residential landlords in the past year, there is a new one to become familiar with. On April 19, 2021, the Consumer Financial Protection Bureau (CFPB) issued an interim final rule in support of the CDC’s eviction moratorium.

The CDC eviction moratorium was extended through June 30, 2021. The CDC Order generally prohibits landlords (and other persons with a legal right to pursue eviction) from evicting tenants for non-payment of rent if the tenant submits a signed written declaration with the (most up to date) elements required by the CDC Order; although, the truthfulness of the declaration may be challenged by the landlord as permitted under state or local law.

The CFPB has authority under the Fair Debt Collection Practices Act (FDCPA) to “prescribe rules with respect to the collection of debts by debt collectors.” The term “debt collector” is generally defined in the FDCPA as any person who uses any instrumentality of interstate commerce or mail in any business the principal purpose of which is the collection of 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. “Debt collector” includes landlords or owners and agents or attorneys acting on behalf of a landlord or owner.

The FDCPA interim final rule requires debt collectors to provide written notice to tenants of their rights under the eviction moratorium and prohibits debt collectors from misrepresenting tenants’ eligibility for protection from eviction under the moratorium or falsely implying to a consumer that the consumer is ineligible for temporary protection from eviction under the CDC Order. Specifically, before filing an eviction action for non-payment of rent against a consumer, if the CDC Order might reasonably apply to that consumer, a debt collector must disclose that the consumer may be eligible for temporary protection from eviction under the CDC Order. As the legal basis for the issuance of the interim rule, the CFPB found that not notifying residents about this government protection can be a violation of fair debt collection laws (unlike other government protections).

The disclosure must be clear and conspicuous and in writing. Phone calls or electronic notice such as text messages or emails are not sufficient.

A debt collector must provide the disclosure on the date the debt collector provides the consumer with an eviction notice or, if no eviction notice is required by law, on the date that the eviction action is filed. The term “eviction notice” is defined as the earliest written notice that the laws of any State, locality, territory, or tribal area require to be provided to a consumer before an eviction action against the consumer may be filed.

A debt collector may satisfy the requirement to provide the disclosure on the same date as the eviction notice or eviction action by providing the disclosure at the same time that the debt collector provides the consumer with any eviction notice or serves the consumer with any eviction action. For example, a debt collector may provide the disclosure in the same mailing as the eviction action and does not need to provide the disclosure separately on the same date.

Failure to provide the required notice to tenants is a violation of the FDCPA. Debt collectors who evict tenants who may have rights under the moratorium without providing notice of the moratorium or who misrepresent tenants’ rights under the moratorium can be prosecuted by federal agencies and state attorneys general for violations of the FDCPA and are also subject to private lawsuits by tenants. The FDCPA provides a private right of action against debt collectors, and violators can be held liable for actual damages, statutory damages, and attorney’s fees. Also, class actions may be brought under the FDCPA.

Some states and localities have adopted their own eviction moratoria. Debt collectors may also be required to provide notice of these moratoria. The CFPB’s rule does not preempt more protective state law.

The CFPB’s Rule took effect on May 3, 2021. The rule is applicable during the effective period of the CDC Order. The CFPB provides the following sample language to satisfy the rule’s disclosure requirements:

Because of the global COVID-19 pandemic, you may be eligible for temporary protection from eviction under the laws of your State, territory, locality, or tribal area, or under Federal law. Learn the steps you should take now: Visit www. cfpb.gov/eviction or call a housing counselor at 800-569-4287.

Ultimately, this CFPB requirement may be challenged and found unenforceable, but it is wise to examine your practices in light of the CDC Moratorium to ensure that they are in compliance and to notify debt collectors working on your behalf of the CDC Moratorium, applicable state or local moratoria, and those parties’ obligations under the FTC Act and the FDCPA, including under the CFPB’s interim final rule.

This is not legal advice and should not be relied on as such. You should consult your legal counsel with your specific questions.

Diversity, Equity & Inclusion (DEI) Task Force – Update

TAA’s DEI Task Force has held two meetings since its formation in late March. Thank you to the members who expressed interest in participating in this new initiative. Congrats to the 23 Task Force members who are hard at work outlining ways our Association can be impactful in the DEI space for our members and industry.

President Kelli Lea appointed Akeshia Thomas with SERVPRO of N Raleigh, Wake Forest & N Durham, and Brandon Negron with Landura Management Associates to lead this dynamic group.

They have been charged with developing a list of recommendations, along with strategies for implementation to the TAA Board of Directors by the end of this year.

TAA DEI Task Force Members

Akeshia Thomas, co-chair Alicia Poindexter Anthony Thaxton Ashley O’Connor Brandon Negron, co-chair Buddy Bryson Danielle Parker Derek Tarrant Elizabeth (Liz) Newkirk Heather Arndt Jesse Jenkins Judy Wade Keisha Purvis Kelli Lea Melody Galvez Rachel Garavito Young Rebecca Mahon Reem Shammari Rob Boggs Shauntay Johnson Susan Caulder Sydney Bryan TeJay Smith

Be a TAA Ambassador

What’s an Ambassador?

We’re glad you asked! Ambassadors serve as ‘buddies’ to new members and help on-board them into the TAA network. Take this opportunity to become acquainted with your colleagues and help be a part of TAA’s success. Owner/Operator, Independent Rental Owner and Supplier members are encouraged to participate. This is a great way to share your industry knowledge and build lasting relationships within the association.

What’s expected of an Ambassador?

• Be paired with 3-5 non-competing New Members for one (1) year • Make initial contact and self-introduction • Introduce New Member to a minimum of 3 other members at first event • Check in regularly to remind about upcoming events/education • Relay any ideas, suggestions, or concerns to the TAA Staff

Are there criteria to become an Ambassador?

• Be a Member in good standing* • Have a minimum of two (2) years of involvement within TAA • Complete participation form and return to TAA to be eligible • Complete brief training webinar on Ambassador guidelines *Member in good standing means the company has complied with all obligations and is not subject to suspension.

TAA’s popular Tour of Cities member engagement sessions had to pivot this year like so many other offerings. Special thanks to the Membership Committee for being creative in presenting this session in a virtual format, and especially to David Lowery with Thornhill Apartments who served as the MC! Over 35 members jumped on Zoom to hear great marketing tips from Rebecca Rosario with Full House Marketing, along with legal updates from Shanae Auguste with Loebsack and Brownlee, PLLC. The highlight was a video tour of Bull House Apartments in Durham, narrated by Bret Smith with Lantower Luxury Living.

Congratulations

The AANC Hall of Fame recognizes individuals in North Carolina for their significant contributions, accomplishments, and service to the multifamily housing industry. The AANC Public Relations & Marketing Committee asked each of the 7 local affiliate Board of Directors to nominate up to 5 deserving members from their market. The criteria is that individuals being nominated should have at least 10 years of membership with at least 1 North Carolina Affiliate. Nomination criteria also focuses on association involvement, character, volunteer service, and industry accomplishments. The AANC Board approved eleven 2021 AANC Hall of Fame Inductees.

Congratulations to the 2021 AANC Hall of Fame inductees for your decades of service to the multifamily industry. A special congratulations is extended to the TAA recipients: Kellie Falk, Gordon Grubb, Rebecca Rosario and Sherry Yarborough! We thank you for your lifelong dedication at the local, state and national levels. Well deserved!