Debt collection practices by landlords could see stiffer regulation

Rules barring unsavory debt-collection practices by landlords could be written into state law.

HF969, sponsored by Rep. Samantha Vang (DFL-Brooklyn Center), would prohibit landlords from using certain practices to collect unpaid rents and fees. Among them:

• obscene language;
• certain types of intimidation;
• communicating misleading or deceptive information;
• threating to take property or wages if the action would be illegal;
• commencing a legal action before the time allowed under statute;
• telling a tenant that not paying the debt is a crime or could result in imprisonment; and
• communicating about the debt to the debtor’s employer or another person without their permission.

Vang said the bill is based on her work at the nonprofit HOME Line, noting stories of landlords resorting to abusive collection practices, such as threatening to call police because of unpaid rent.

As amended, the bill was laid over Thursday by the House Housing Finance and Policy Committee. Its companion, SF1653, is sponsored by Sen. Lindsey Port (DFL-Burnsville) and awaits action by the Senate Commerce and Consumer Protection Finance and Policy Committee.

Minnesota prohibits debt collectors from harassment, abuse, misleading statements and unfair practices, according to the Attorney General's office.

But Katherine Kelly, an assistant attorney general, said her understanding is the law only applies to third-party debt collectors, not landlords who collect on their own debt.

Rep. Tama Theis (R-St. Cloud) said it's frustrating as a property owner not to receive rent and asked whether anyone is looking at tenant training to ensure on-time payment

Kyle Berndt, public policy director for the Minnesota Multi-Housing Association, believes the framework for the proposal is reasonable and generally reflects industry best practices.