Analysis of Romea v. Heiberger & Associates
By Colleen F. Mcguire, Esq.
Attorney for Plaintiff Jennifer Lynn Romea

On December 9, 1998, the U.S. Court of Appeals for the Second Circuit unanimously affirmed a number of legal issues in Romea, all of which expand the federal consumer protection law known as the Fair Debt Collections and Practices Act ("FDCPA") to include tenants.

The FDCPA does not cover acts performed by a landlord. The statute is triggered only when a third party, such as an attorney, acts on behalf of the landlord to collect a debt. In such instances, the attorney must comply with the statute's provisions pertaining to a debt collector's activities. The purpose of the FDCPA is to prevent abusive practices by debt collectors against consumers. Romea involved the FDCPA's requirement that the debt collector's initial communication to the consumer must provide the consumer a thirty-day period to dispute the debt. By contrast, under New York law, a landlord need only provide three days for a tenant to make payment before commencing an eviction proceeding for alleged nonpayment of rent (if the landlord and not the attorney signs the notice).

The Court of Appeals ruled that rent arrears are a debt since rental payments come under the statute's definition of an obligation arising out of a transaction involving "personal, family, or household purposes." The Court further held that a three day rent demand notice leading to a non-payment proceeding in Housing Court involves debt collection and it rejected the defendant law firm's argument that such proceedings are simply to adjudicate disputes over rights of possession to the property: the Court held that it involves both. The Court also held that landlord attorneys who regularly sign three-day rent demands are debt collectors within the meaning of the FDCPA and therefore must provide the debtor-consumer (i.e., the tenant) a thirty-day period to dispute the debt before demanding payment. A notice signed by the attorney which does not provide a thirty-day debt validation period violates the FDCPA since federal law preempts New York State law.

Our position is that housing is a human right, not a commodity to be bargained over. However, until society acts upon this universal truth, housing will inevitably be reduced to a profit-making venture. Since housing is treated as a commodity, then we maintain that the consumers of that commodity (i.e., tenants) must be afforded all the rights the federal consumer protection statutes afford other consumers of other personal or household products, such as cars, dishwashers, stereos or whatever.

For years, landlord-tenant relations were confined to the realm of property law. In this context, which harks back to the feudal era, the law grossly skewed the balance of power in landlords' favor. Outside of New York City and a few other urban enclaves, tenants have very few rights under the common law system that America borrowed from England. (Common law is judge-made law handed down through the ages, as opposed to statutory laws enacted by elected legislators). Within the past quarter century, however, courts began to recognize the harshness of property law's bias against tenant. The antiquated image of the lord of the land ruling over his tenant serfs which fueled so much of the philosophy undergirding property law gave way to a view of two parties engaged in a bargaining process, albeit still an inequitable one from the tenant's side. The Romea decision which grounds tenants firmly within the protected class of consumers was a natural stepping stone from the recent movement to situate landlord-tenant relationships under the rubric of contract law. As consumers of a commodity (i.e., housing), the FDCPA enlarges and enhances tenants rights vis-a-vis the owners of that commodity (i.e., landlords).

The FDCPA provides a variety of protection to consumers-tenants. Romea establishes that landlord attorneys who send rent demand notices must provide the tenant thirty days to dispute the rental debt. After Romea was decided last year, most attorneys stopped signing the demands and let their clients do it, which means the three-day period is legal. However, the FDCPA's thirty-day debt validation period is applicable to any "initial communication" sent by the attorney on behalf of his or her landlord client to collect rent. We call on housing lawyers and tenant advocates to join us in exploring other creative ways to expand tenants' rights under the FDCPA. For example, pro se tenants in Housing Court need to know that the FDCPA explicitly prohibits abusive, harassing or oppressive conduct by debt collectors. What's oppressive? How many times have attorneys scared tenants into believing that if they don't pay the rent, they'll get thrown out in a couple of days? What's abusive? How many times have attorneys misstated the law to tenants, such as, telling them they don't have any defenses? (False and misleading representations are prohibited under the statute). What's harassing? How many times has a tenant taken time off work, appeared in court, only to have the attorney discontinue the action without giving the tenant the courtesy of a telephone call?

Subsequent to the 1997 rent reform legislature -- vigorously lobbied for by landlords -- the availability of affordable housing has perilously decreased. Owners have dramatically escalated efforts to evict rent regulated tenants to maximize profits with some 400,000 eviction notices served each year. In such a climate, New York City is devolving into an apartheid state where high income tenants inhabit Manhattan and the working class and poor are relegated to the outer borough bantustans where rents are less onerous. Tenants, tenant advocates and tenant attorneys must reverse the tidal wave of benefits and profits mega-landlords are accruing off the housing market. (77% of rental units are owned by less than 12% of landlords). The Romea decision is a step in the right direction and we must not diverge from its path.

In winning Romea, Colleen McGuire wishes to acknowledge the insights and acumen of her partner, Daphna Zekaria, Esq., and the genius of her co-counsel, Robert E. Sokolski, Esq.

Colleen F. McGuire, Esq.
305 Broadway, Suite 402
New York, New York 10007
(212) 571-4080
FAX: (212) 571-4079