Memorandum Opinion of Judge Lewis A. Kaplan








97 Civ. 4681 (LAK)



Colleen F. McGuire
Attorney for Plaintiff

Janice J. DiGennaro
Attorneys for Defendant

LEWIS A. KAPLAN, District Judge,

This motion presents the question, among others, whether a notice demanding, in the alternative, payment of rent arrearage or surrender of rented premises to the landlord, is a "communication" for the purposes of collecting a "debt" within the meaning of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. 1692 et seq.


Plaintiff rented an apartment on the east side of Manhattan from 442 3rd Ave. Realty LLC for $700 per month. On or about December 26, 1996, Defendant's predecessor in interest issued and sent to plaintiff a three day notice which, in a form familiar to New York real estate practitioners, stated:

"PLEASE TAKE NOTICE that you are hereby required to pay to 442 3rd Ave. Realty LLC Landlord of the above described premises, 700.00/Dec 96 700.00/Nov 96 700.00/Oct 96 700.00 Sep 96

"You are required to pay within three days from the day of service of this notice, or to give up possession of the premises to the landlord. If you fail to pay or to give up the premises, the landlord will commence summary proceedings against you to recover possession of the premises."

Defendant is a law firm that is said regularly to attempt to collect debts owed to other landlords. The notice, which in form complied with the statutory prerequisites to the institution of summary dispossess proceedings under New York law (N.Y. REAL PROP. ACTIONS & PROC. L. Art 7 (McKinney 1979) ("RPAPL"), allegedly violated the FDCPA because it is said to have (a) failed to disclose clearly that defendant was attempting to collect a debt and that any information obtained would be used for that purpose (b) contained threats to take actions that could not legally, or were not intended to, be taken, and (c) omitted notice of the 30 day validation period.

Defendant moves to dismiss on the ground that it fails to state a claim upon which relief may be granted.


The Unpaid Rent is a "Debt" Under the FDCPA

Defendant argues first that the unpaid rent which was the subject of the disputed notice was not a "debt" covered by the FDCPA because the obligation was incurred in a transaction that did not involve the extension of credit. It relies principally on the Third Circuit's decision in Zimmerman v. HBO Affiliate Group, 834 F.2d 1163 (3d Cir. 1987).

Zimmerman presented the question whether a demand by a cable television service provider that persons whom it claimed had pirated its signal pay a sum of money to settle claims for theft of services was an effort to collect a debt within the meaning of the statute. In concluding that it was not, the court focused on the fact that there was no consensual relationship between the cable provider and the recipients of the letter. It went on, however, to:

"find that the type of transaction which may give rise to a 'debt', as defined in the FDCPA, is .... one involving the offer or extension of credit to a consumer.

"Specifically it is a transaction in which a consumer is offered or extended the right to acquire 'money, property, insurance or services' which are 'primarily for household purposes' and to defer payment."

Defendants argument here is that the rent is paid in advance, that the transaction between landlord and tenant therefore involves no deferral of payment or extension of credit, and that the rent arrearage that was the subject of the notice in this case therefore did not involve a "debt" collection. But defendant's argument cannot be squared with the language or history of the statute.

The FDCPA defines "debt" as "Any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment." 15 USC 1692 (a)(5)

Thus, the plain language of the statute clearly embraces consumer obligations to pay money arising out of the relevant class of transactions without regard to whether the underlying transactions involve the extension of credit or the deferral of payment. Moreover, the legislative history -- resort to which is unnecessary and arguably inappropriate in the face of such clear statutory language -- confirms what the language suggests. In enacting the FDCPA, Congress dropped proposed statutory language which, if adopted, would have limited the statute to debts arising from transactions involving extensions of credit in favor of the broader language quoted above.

The view that the debts covered by the FDCPA extend beyond those arising from transactions involving deferral of payment reflects the conclusion of a majority of the Courts of Appeals to have considered the issue. In Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., for example, the Seventh Circuit relied upon the language of the statute and the legislative history referred to above to reject Zimmerman and hold that an obligation arising from the issuance of a dishonest check constitutes a "debt" under the FDCPA notwithstanding the lack of any extension of credit.


It is not without discomfort that the Court reaches this conclusion. The broad language of the FDCPA definition of 'communication' will have a significant effect on New York's statutory scheme for the fair and efficient resolution of landlord-tenant disputes. There is nothing to indicate that such was the intent of Congress in enacting the FDCPA, a statute designed to protect debtors from fraudulent and abusive debt collection practices. However, the capacious and unambiguous nature of the statutory definition of "communication" affords no basis to carve out an exception to the statute's applicability.


For the foregoing reasons, the defendant's motion to dismiss the complaint is denied.


Dated: December 22, 1997

Lewis A. Kaplan
United States District Judge

On December 22, 1997, a United States District Judge ruled that the procedures required by New York State Law for a landlord to collect rent are illegal under federal law! This means: It is now illegal to collect rent! Now you can live rent free in New York City!

Under Federal Law, your landlord's attorney or managing agent can be fined $1000 for every time he or she has asked you to pay your rent! Here is that law: Fair Debt Collection Practices Act .

More about the Fair Debt Collection Practices Act

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