A Lesson to all Operators
In mid-2023, the Florida legislature amended the Florida Consumer Collection Practices Act “FCCPA”. One of the changes to the FCCPA was to prohibit “debt collection communications” between the hours of 9:00 p.m. and 8:00 a.m. When we first saw this change, we did not necessarily believe that the changes to the Act applied to your self-storage operations, or if it applied, it applied to the lien noticing activities of your Facility, but not any sort of any prebilling or upcoming payment reminder due type notices that might be sent via electronic communication, email, or text.
However, some industrious class action attorneys have filed lawsuits against self-storage facilities, including at least one case where the allegation is that the facility sent an automated prebill invoice or billing reminder type email. While we should not have been shocked to see the class action bar try to sue everyone who does any sort of collection, that there are class action lawsuits going on regarding invoicing and billing, we recommend you insert a clause into your Rental Agreement providing Renter’s permission to receive collection emails between the prohibited hours (9:00 p.m. to 8:00 a.m.) just to be safe.
In the meantime, make sure all communication with your customers that may have any “debt collection communication” related intent occurs within the hours of 8:00 a.m. to 9:00 p.m. This would include, but not exclusively: prebills, invoices, collection reminders, lien notices via email, and any text communications regarding upcoming current, or past due bills.
Further, if you do not already have a Waiver of Class Action litigation in your Rental Agreement, particularly in Florida, this situation is an excellent argument for why this sort of language belonged and now even more importantly, belongs, in your Rental Agreement. Some states do not permit Waivers of Class Action, that is why it is important to check with your attorney. We encourage you to speak with your self-storage legal counsel (to fashion both this waiver of times to send notices language in Florida, the appropriate way to notify your existing tenants of this change so it becomes enforceable), and if you do not have it, to insert a class action waiver into your Rental Agreement.
Additionally, operators in all states can learn a lesson for what happened in Florida. Innocuous changes in state laws can easily be expanded or at least attempted to be expanded into claims against your Facility. We would not have predicted that Florida would have made a change like this to the Act, and certainly not that it applied to courtesy rent notices, (and I still am not certain that this law applies to what you are doing at your self-storage facility), however, there is no reason not to act out of an abundance of caution moving forward. That said, this is an excellent reason for you to take a moment and review your Rental Agreement with your attorney to make sure that, if nothing else, your Rental Agreement contains the necessary class action waiver language (if permitted in your state) that would at least, in theory, help prevent you from becoming a test case in your state, should this type of law or any other type of law go into effect now or in the future, that might cause a class action litigator to bring a claim against your facility.
Class actions are a risky type of claim to a self-storage operator, often there is not insurance coverage for class action litigation, and as you may have seen yourself, (due to class action lawsuits against every major company in this Country,) these lawsuits usually result in large attorney fee awards. Class action lawsuits are much easier to settle than fight, but they are often extremely expensive to settle. Make sure you have taken the appropriate precautions to protect yourself as much as possible from any sort of class action litigation. The operators in Florida were caught off guard. Let their experience serve as important guidance to all operators around the Country.
Jeffrey J. Greenberger is a Partner with the law firm of Greenberger & Brewer, LLP, in Cincinnati, Ohio and is licensed to practice in the states of Ohio and Kentucky. Mr. Greenberger’s practice focuses primarily on representing the owners and operators of commercial real estate, including self-storage owners and operators.
The opinions of this article are those of the author and the article should not be construed to constitute legal advice. Before undertaking any change to your policies and procedures, consult with your own attorney and insurance agent or broker. The opinions in this article should not be construed to create any sort of attorney/client relationship between Jeffrey J. Greenberger and the reader. Jeffrey’s website, www.selfstoragelegal.com, contains Jeffrey’s legal opinions and insights into the self-storage industry, as well as an article archive. Questions should be directed to Jeffrey Greenberger info@selfstoragelegal.com or by calling his office at 513-721-5151.