New CFPB Rule Requires Notifying Renters Being Evicted
New CFPB Rule Requires
Notifying Renters Being Evicted
Dear NAA Click & Lease User,
The NAA Click & Lease Program will be updated on May 3, 2021 to include the following changes to your lease forms. The Release Notes, which are accessible when logged into your NAA Click & Lease Program, include copies of these upcoming forms.
Should you have any questions about these changes, please contact NAA. As always, we recommend you and your local legal counsel review all new and/or updated forms before implementing them into your leasing operations.
On April 19, the Consumer Financial Protection Bureau (CFPB) issued an interim final rule requiring “debt collectors” to provide written notice to renters of their rights under the CDC’s eviction moratorium order and prohibiting "debt collectors" from misrepresenting renters’ eligibility for protection from eviction under the moratorium. The rule will go into effect on May 3 and last through the duration of the CDC Order, which was recently extended through June 30, 2021.
To understand the rule’s applicability, it is important to note the CFPB’s definition of “debt collector,” derived from the Fair Debt Collection Practices Act (FDCPA). According to the CFPB, under the FDCPA:
[The interim final rule requirement] may include lawyers who represent landlords or property managers in eviction court to collect unpaid rent, if they start collecting the debt for [a renter’s] landlord after [renters] fall behind on [their] payments.
Further, there may be other considerations, including relevant case law that may be more conclusive about whether property managers or management firms are categorized as “debt collectors,” and whether state eviction laws and court processes separate the process to recover possession from actions to cover outstanding rent debt.
From the text of the interim final rule: “Section 1006.9(c)(1) of Regulation F at 12 CFR 1006 (Fair Debt Collection Practices Act) requires debt collectors to provide this disclosure only to consumers to whom the CDC Order reasonably might apply. A consumer to whom the CDC Order reasonably might apply is a consumer who reasonably might be eligible to be a covered person as defined in the CDC Order. A consumer is not reasonably eligible to be a covered person if the debt collector has knowledge that the consumer is not eligible for protection under the CDC Order. If a particular consumer would not actually qualify for temporary eviction protection under the CDC Order, then there is likely no deception or unfairness to cure, no consumer benefit from receiving a disclosure about the Order, and no reason to cause debt collectors to incur the expense of providing such a disclosure.”
IMPORTANT: The National Apartment Association (NAA) is providing these new forms out of an abundance of caution; however, please contact your local counsel before proceeding with an eviction to understand whether CFPB’s rules apply. Your local counsel can help you determine if and when to use these forms, and if and when you should include these new forms with any notice to vacate or other eviction notices. For more information, please visit: https://www.consumerfinance.gov/about-us/newsroom/cfpb-rule-clarifies-tenants-can-hold-debt-collectors-accountable-for-illegal-evictions/
- Fast Facts: 2021 Debt Collection COVID-19 Interim Final Rule
- COVID-19 Eviction Notice Consumer Financial Protection Bureau Disclosure of Consumer Rights
- This form is identical for all states, except the following 5 states with minor variations:
- Arizona: Text of Section 3 reads "Date This Disclosure Was Provided To The Above-Named Resident In Conjunction With the Service of An Applicable Eviction Notice"
- Florida: Proof of Service included
- Idaho: Proof of Service included
- Illinois: Text of Section 3 reads "Date This Disclosure Was Provided To The Above-Named Resident In Conjunction With the Service of An Applicable Eviction Notice" and Proof of Service included
- Nebraska: Proof of Service included
How will the users experience within the NAA Click & Lease be affected?
The following changes will be implemented within the NAA Click & Lease Program in correlation to the form revisions.
The above-listed forms will be available in the Notice Forms section of the print menu