The Curious Case of the Delinquent Landlord: How the Fair Debt Collection Practices Act Applies to Landlords in Condominium Complexes

The Fair Debt Collection Practices Act (FDCPA) was enacted in 1977. In enacting the FDCPA, Congress intended to eliminate abusive debt collection practices, of which Congress found in abundance. Congress was primarily concerned with eliminating abusive debt collection practices of consumer debt. A consumer is defined as “any natural person obligated or allegedly obligated to pay any debt.” The Act defines a 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.” Whether an obligation is a debt under the FDCPA is often an issue for the courts to decide.

There is established case law that provides that collection of a business debt is not covered by the FDCPA. The reason for this is that business debt is not “primarily for personal, family or household purposes.” Some individuals own a condominium unit for the sole purpose of leasing it to other individuals. In that case, that individual is using their condominium for business purposes and not for personal purposes. This paper argues that the FDCPA should not apply to the collection of condominium assessments when the delinquent condominium unit owner is using the condominium unit as rental income property.