The Attorney General brought suit against Copper Beach Townhome Communities, the largest landlord operating in West Virginia, under the West Virginia Consumer Credit and Protection Act ("WVCCPA" or "the Act"), for charging its renters--the vast majority of which were college students--hidden and exorbitant fees. The circuit court held that a debt arising out of a residential lease agreement was a "claim" within the meaning of that term under W.V. Code § 46A-2-122. The question of whether the WVCCPA--either Article II, which in part prohibits unfair debt collection practices, or Article VI, which prohibits unfair and deceptive acts and practices in any trade or commerce--applies to residential lease agreements was certified to the Supreme Court of Appeals.
Does the WVCCPA govern lease agreements for residential real property?
In a new syllabus point, the Court held that "[t]he debt collection provisions, W.Va. Code § 46A-2-122 to -129a , and deceptive practices provisions, W.Va. Code § 46A-6-101 to -106 , both contained in the West Virginia Consumer Credit and Protection Act, do not apply to and regulate the fees a landlord may charge to a tenant pursuant to a lease of residential real property. The Court began its analysis by noting that it found no authority of any kind suggesting that "the purpose, or even a purpose" of the WVCCPA was to regulate the fees that a landlord may charge a tenant pursuant to a residential lease, and further noted that in the 43 years since the WVCCPA was enacted, this case was the first occasion in which any party attempted to apply the WVCCPA against a landlord. The Court reached its conclusion not so much by parsing the language of the Act, but instead by relying heavily on what it does not say.
Though the Court noted that Article II has its own distinct and broader definitions, it looked to the general definitions in Article I to interpret the intent of the Act. The Court found that a residential lease did not fit into the general definitions of "consumer loan", "consumer credit sale" or "consumer lease." While the Court found the general definitions in Article I, together with the lack of express language addressing residential leases in § 46A-2-122, instructive, it stopped short of accepting Copper Beach's invitation to limit our debt collection laws to transactions involving only consumer credit. Only two years ago in Fleet vs. Webber Springs Owners Association 235 W.Va. 184, 772 S.E.2d 369 (2015), the Court found that "[h]omeowners association assessments that are to be used for improving and/or maintaining common areas of a planned community, including, but not limited to, maintaining common roads and common recreational areas within the community, are an obligation primarily for personal, family, or household purposes, and, therefore, such assessments are "claims" pursuant to W. Va. Code § 46A-2-122(b) (1996) (Repl. Vol. 2006). These assessments, like fees charged by landlords, do not qualify as consumer credit. In its analysis, the Court did not mention W.Va. Code § 46A-1-103(3): "This chapter also prescribes in various articles protective measures for consumers in transactions not necessarily involving consumer credit." Nor did the Court overrule Fleet. Instead it distinguished Fleet in a footnote finding, "homeowners association assessment fees [unlike residential rent agreements] are not pervasively regulated in numerous statutory sections outside of the CCPA. The fact that leases of residential real property are extensively regulated in other chapters of the West Virginia Code appears to have been crucial to the Court's ultimate conclusion.
It is difficult to square this opinion with the Court's recent decision in Fleet vs. Webber Springs Owners Association. In Fleet, the Court faithfully applied the definitions in Article 2 of the Act and looked to opinions of other courts pertaining to an analogous federal statute for support. Justice Loughry concurred with the majority in Fleet, but in doing so expressed his displeasure with the breadth of the Act and opined that the legislature may wish to intervene. A few months later it did exactly that and most homeowners associations were carved out from application of the WVCCPA. Though this author expected a similar result here, the Court did not similarly interpret the Act. Finding that the WVCCPA was not intended to regulate residential lease agreements and that residential lease agreements are extensively regulated through other statutes, the Court exempted all landlords from liability under the Act. Thus, it is up to the legislature to provide relief to tenants who are victimized by hidden and exorbitant fees in their leases--either by amending the Act to include landlords or by passing legislation specifically aimed at these kinds of fees.