AANC Legislative Issue - Debt Collection Issue

AANC Membership,

We wanted to make sure that you are aware of an urgent issue that has arisen for all Apartment Communities in North Carolina. There are currently 5 lawsuits that we are aware of that have been filed challenging the industry wide practice of charging attorney’s fees and court costs in summary ejectment cases when allowing a tenant to pay the past due amounts and stay in the unit. In the Wake County case, the tenant paid the past due rent and late fees along with the attorney’s fees and court costs to remain in the unit and months later filed a lawsuit to challenge the legality of charging the court costs and attorney’s fees. The troubling aspect is that the Judge in one of the cases in Wake County has ruled on a motion for partial summary judgment and ruled with the Plaintiff (tenant) to say that not only can you not charge for these costs but that doing so is an unfair and deceptive trade practice that violates chapter 75 of the NC General Statutes which allows for treble (triple) damages. We are very concerned that this will spread throughout the state and that plaintiff’s attorneys will start to file class action lawsuits on behalf of tenants. This is a huge issue for our Association and all landlords and management companies around the state.

The Board of Directors of AANC has taken swift action not only to support the companies in these lawsuits but also to limit as much liability as possible for our members. The Board has directed me as your legislative counsel to attempt to have legislation approved in the short session to clarify the law to make sure it is clear that these reimbursement costs are allowable and that the law matches as much as possible with current industry practices. We have already had meetings with various legislators and allies so that we can act quickly once session begins to try to resolve this issue. It will be a difficult task as the issues and the law are very complicated and we have a short window of time to get this done. I am sure we will be reaching out for your assistance to contact legislators as we move through this process and hope you will respond as quickly as you can to assist us.

Colleen Kochanek
AANC Legislative Counsel

Questions? Contact TAA's Governement Affairs Director, Dustin Engelken.