California Expands Debt Collection Protections to Commercial Debt with SB 1286

 California has long been a leader in consumer protection, and the passage of Senate Bill 1286 (Stats. 2024, ch. 522) continues that tradition. This new law, effective January 1, 2025, expands the coverage of the Rosenthal Fair Debt Collection Practices Act (RFDCPA) to include certain types of commercial debt. Historically, the RFDCPA only applied to consumer debt, providing safeguards against abusive, unfair, or deceptive collection practices. SB 1286 marks a significant shift in California’s approach to debt collection by extending these protections to small business owners and entrepreneurs.

What Does SB 1286 Do?

The Rosenthal Act, codified in Civil Code §§ 1788–1788.33, governs debt collection practices and establishes penalties for violations. SB 1286 amends the act to cover "specified commercial debt," which includes obligations incurred by small businesses for goods, services, or credit primarily used for business purposes.

This change means that debt collectors must now adhere to the same stringent rules when pursuing commercial debt as they do for consumer debt. Prohibited practices include harassment, threats, misrepresentation of the debt, and attempts to collect debts that are not legally enforceable. Small business owners, particularly those struggling in a volatile economy, now have recourse against unscrupulous collectors.

Who Does the Law Apply To?

SB 1286 primarily benefits small business owners who may lack the resources to defend themselves against aggressive or predatory debt collection tactics. It applies to debt collectors, collection agencies, and even original creditors engaging in collection efforts for commercial debts falling under the expanded definition.

The bill does not extend to large businesses or commercial debt involving entities with significant financial resources. Instead, the focus remains on small enterprises—those that often find themselves most vulnerable to economic pressures and ineq
uitable collection practices.

Why Was SB 1286 Necessary?

Governor Gavin Newsom, in signing the bill, emphasized the importance of protecting small businesses, which are the backbone of California’s economy. The COVID-19 pandemic and subsequent economic uncertainties exposed many small businesses to financial hardships, leaving them at the mercy of aggressive debt collection practices. Advocates for SB 1286 argued that extending RFDCPA protections was a matter of economic equity, ensuring that small business owners receive the same rights as individual consumers.

The bill’s proponents also pointed out that abusive debt collection practices can lead to unnecessary bankruptcies, closures, and financial ruin for entrepreneurs. Providing a fair legal framework was deemed essential to fostering a business environment where small enterprises can thrive.

 

Opposition to SB 1286

Despite its passage, SB 1286 faced significant opposition from creditor groups and business associations. Critics argued that the expanded protections could increase the cost of credit for small businesses, as lenders might pass on the cost of compliance to borrowers. They also expressed concern that the bill could lead to frivolous lawsuits, further burdening an already overextended judicial system.

However, supporters of the bill countered that fair practices benefit both lenders and borrowers by promoting transparency and accountability in the marketplace. They contended that the economic impact on creditors would be minimal compared to the societal benefits of protecting vulnerable businesses.

While SB 1286 primarily focuses on extending protections to specified commercial debt, its roots in the Rosenthal Fair Debt Collection Practices Act (RFDCPA) mean that the law continues to apply robust safeguards to consumer debt as well. For consumers, the RFDCPA prohibits practices like harassment, false statements, and attempts to collect debts not legally owed, providing a critical layer of protection against abusive debt collection practices. By expanding the scope of the RFDCPA to include small business debt, SB 1286 underscores the broader principle that fairness and transparency should govern all debt collection efforts, whether they target individual consumers or small business owners. This alignment may also indirectly benefit consumers by establishing more consistent standards and practices within the debt collection industry as a whole.

SB 1286 underscores the necessity for businesses and consumers to retain an attorney experienced in debt collection, and it represents a landmark step in California’s ongoing efforts to ensure fair treatment in financial transactions. By expanding the RFDCPA’s protections to specified commercial debt, the state aims to level the playing field for small business owners while addressing systemic inequities in debt collection practices. While the law’s long-term impact remains to be seen, it underscores California’s commitment to balancing economic growth with consumer and small business protections.

 

By: Desiree T. Washington, Esq. at Washington Law Firm

 

AB 2216 Withdrawn. Landlord May Still Charge Pet Rent, Pet Deposits and Deny Tenancy to Pet Owners.

 

Good news for Landlords. Bad news for current and prospective tenants with pets. California Assembly Bill 2216 (AB 2216), titled "Tenancy: Common Household Pets," has been withdrawn and is no longer under consideration in the current legislative session. The bill, introduced by Assembly-member Matt Haney in February 2024, aimed to prevent landlords from denying tenancy to renters with common household pets and sought to prohibit the imposition of additional pet-related fees or rent. The bill was met with vigorous opposition by the landlord lobby.

Legislative Journey of AB 2216

AB 2216 was introduced with the intent to address the challenges faced by pet-owning renters in California. The proposed legislation sought to:

• Prohibit landlords from inquiring about a prospective tenant's pet ownership before accepting their application.
• Require tenants to inform landlords of pet ownership plans at least 72 hours before entering into a rental agreement.
• Prevent landlords from denying tenancy based on pet ownership without reasonable justification.
• Disallow the charging of additional rent or fees specifically for pet ownership.

The bill garnered support from animal rights organizations and aimed to increase the availability of pet-friendly rental housing. However, it faced significant opposition from property owners and real estate associations concerned about property damage and the autonomy of landlords to set terms for their properties.

Property owners argued that the decision to allow pets should remain at their discretion, enabling them to make choices based on the specific circumstances of their properties and renters.

Their primary concerns raised included:

• Property Damage: Pets can cause significant damage to rental units, leading to costly repairs that may not be fully covered by pet deposits.
• Allergies and Safety: The presence of pets could affect other renters, particularly those with allergies or fears of certain animals.
• Increased Liability: Rental owners would face increased liability risks, including potential bites or attacks from pets, which could result in legal and insurance complications.
  

Amendments and Opposition

In response to the opposition, several amendments were made to AB 2216 to address concerns:

• Exemptions for smaller properties were introduced, recognizing the unique challenges faced by owners of such units.
• Provisions allowing landlords to charge pet deposits and fees were included, aiming to mitigate potential property damage risks.

Despite these amendments, opposition remained strong. Organizations like the East Bay Rental Housing Association (EBRHA) and the California Rental Housing Association (CalRHA) actively lobbied against the bill, arguing that it infringed upon landlords' rights and could lead to increased operational challenges. Their concerted efforts contributed to the decision to withdraw the bill from consideration.

Ebrha

Implications for Renters and Landlords

The withdrawal of AB 2216 means that the existing regulations regarding pet ownership in rental properties remain unchanged. Landlords retain the discretion to set pet policies, including the ability to:

• Prohibit pets entirely in their rental units.
• Charge additional pet rent or fees to cover potential damages or increased wear and tear.
• Establish specific conditions or restrictions related to pet ownership, such as size or breed limitations.

For renters, this outcome underscores the importance of:

• Reviewing lease agreements carefully to understand pet-related policies and any associated costs.
• Communicating openly with potential landlords about pet ownership to ensure compliance with property rules.
• Seeking pet-friendly housing options proactively, as landlords are not mandated to accommodate pets.

Future Considerations

The debate surrounding AB 2216 highlights the ongoing tension between increasing housing accessibility for pet owners and preserving landlords' rights to manage their properties. While this particular bill has been withdrawn, the issues it sought to address remain pertinent. Advocates for pet-friendly housing may continue to pursue legislative or policy changes in the future.

Both renters and landlords should stay informed about potential new proposals or local ordinances that could impact pet policies in rental housing. Engaging an experienced California landlord tenant attorney or California real estate attorney can help balance the needs and concerns of both parties in the rental market.

 By: Desiree T. Washington, Esq. at Washington Law Firm

Finding a Personal Injury Lawyer in California

Accidents and injuries are an unfortunate part of life, and when they happen due to someone else's negligence, it can be especially challenging to navigate the legal and healthcare systems to seek compensation and justice. Desiree T. Washington, Esq., explains how you can obtain legal help to initiate and resolve your personal injury claim. 

In Los Angeles County, one of the most populous and diverse counties in the United States, the personal injury process is complex but essential for those who have suffered harm to receive some measure of relief. With this article, Desiree aims to provide a comprehensive overview of the personal injury process in Los Angeles County, from the initial incident to the resolution of a personal injury claim, and how you can utilize Washington Law Firm to find just compensation for your injuries. 

1. Seek Medical Attention 

The first and most crucial step following a personal injury in Los Angeles County, as anywhere else, is to seek immediate medical attention. Your health should always be the top priority. Not only does prompt medical care ensure that you receive the necessary treatment, but it also creates a crucial medical record that can serve as evidence later in your personal injury claim. 

Hospitals may ask you for medical insurance. You should inform them that you were in an accident so that they may ensure all paperwork pertinent to your claim is filled out and that you receive the urgent medical care you need to prevent further harm. Do not worry if you do not have medical insurance. A hospital cannot legally turn you away for not having insurance. Simply inform them that you were in an accident and to forward your invoice to your attorney, Desiree T. Washington at Washington Law Firm. Make sure you receive copies of all documents you sign, and that the hospital gives you, and forward those documents to Washington Law Firm, including any detailed records of all medical bills, prescriptions, and treatment plans. 

2. Gather Evidence 

After seeking medical attention, it's essential to gather as much evidence as possible related to your injury and the incident that caused it. This may include:

a. Photographs: Take pictures of the accident scene, your injuries, and any property damage. These visual records can provide valuable proof later on. 

b. Witness Statements: If there were any witnesses to the accident, collect their contact information and statements. Witness testimonies can corroborate your version of events. 

c. Police Report: If the injury resulted from a car accident, slip and fall, or any other incident where law enforcement responded, obtain a copy of the police report. This report often contains valuable information about the accident's circumstances and the parties involved. 

d. Documentation: Keep records of all relevant documents, such as medical bills, receipts, and correspondence related to your injury. 

3. Consult an Attorney 

Hiring a personal injury attorney is critical to you obtaining the restitution you need to be made whole after your accident. Washington Law Firm will help you understand your rights, evaluate the strength of your case, and guide you through the complex legal process. Desiree T. Washington offers free initial consultations to assess your situation and provide initial guidance. 

Many Los Angeles County law firms now charge a contingency fee of upwards of 50% of your claim. DO NOT agree to those terms. They are exorbitant, unethical and will prevent you from being made whole by any injury award you may receive. Instead, demand the attorneys receive not more than 33% which should include all legal fees and costs. 33% has been the standard for contingency fees for over 100 years. At Washington Law Firm, Desiree will never charge more than 33% on contingency fee cases. 

4. Statute of Limitations 

It's essential to be aware of the statute of limitations for personal injury cases in California. In general, you have two years from the date of the injury to file a personal injury lawsuit. If you miss this deadline, you may lose your right to pursue a claim. However, some exceptions and nuances may apply, so contact Washington Law Firm to understand how the statute of limitations applies to your specific case. 

5. Negotiation with the Insurance Company

In many personal injury cases, the injured party will need to negotiate with the insurance company of the at-fault party. It's essential to have your attorney handle these negotiations to ensure that you receive a fair settlement. Insurance companies absolutely will try to minimize payouts, so it is crucial that you contact Washington Law Firm to deal with your insurers. 

6. Filing a Lawsuit

If negotiations with the insurance company do not result in a fair settlement, Washington Law Firm recommends filing a lawsuit. This formal legal action initiates the litigation process. Desiree will prepare the necessary documents, including a complaint that outlines the details of your case, and file them with the appropriate court in Los Angeles County. 

7. Discovery Process

Once a lawsuit is filed, both parties engage in the discovery process. This involves gathering evidence, questioning witnesses, and exchanging information. Discovery can be a time-consuming and is a detailed process, often lasting over a year based on the nature and extent of your injuries. However, it is crucial for building a strong case. 

8. Mediation and Settlement Discussions 

Before proceeding to trial, many personal injury cases in Los Angeles County go through mediation or settlement discussions. These processes aim to resolve the case without the need for a court trial. A neutral mediator facilitates discussions between the parties to reach a mutually agreeable settlement. Washington Law Firm will advocate for your interests during these negotiations. 

9. Trial

If mediation and settlement discussions do not lead to a satisfactory resolution, the case will proceed to trial. Washington Law Firm will present your evidence, question witnesses, and make and defend legal arguments before a judge and jury. The trial process can be lengthy, but Desiree and Washington Law Firm effectively represent your interests in court. 

10. Verdict and Compensation

After the trial, the judge or jury will render a verdict. If the verdict is in your favor, the at-fault party will be ordered to compensate you for your injuries and losses. The compensation can include medical expenses, lost wages, pain and suffering, and other damages. 

Conclusion

While the personal injury process can be challenging, it's crucial to remember that it exists to protect your rights. With Washington Law Firm at your side, you will have the right legal representation and a thorough understanding of the process. You will be able to seek the compensation and justice you deserve in Los Angeles County. 

 

Legal Disclaimer and Attorney Advertising Notice

The information contained on this website is for general information purposes only. Nothing on this website is intended as legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship. No attorney-client relationship will be established with our firm or any of our attorneys unless by a written, fully executed engagement letter provided by our firm.

Internet users and online readers should not act upon this information without seeking professional counsel.

Understanding Los Angeles' Post-Covid-19 Lockdown Tenants Rights

Many Los Angeles tenants have been blindsided by the County's decision to lift Covid-19-related moratoriums on evictions and rent increases. 

Los Angeles renters have rights to notice before entry, termination, rent increase, and habitable housing. During the COVID-19 emergency, renters cannot be evicted for nonpayment of rent if they are affected by the pandemic, but they still owe the rent and have 12 months to repay it. Renters can also seek help from lawyers and Tenants' Rights organizations which specialize in protecting tenants from predatory landlords.

Here are some common landlord-tenant laws in Los Angeles that you might find helpful:

• Tenants have a right to clean, habitable homes. 
• Tenants have a right to privacy. Landlords must give tenants reasonable notice before entering their homes.
• Tenants have a right to be free from discrimination.
• Tenants have a right to a safe home free from harassment.
• Tenants have a right to not more than a 5-10% rent increase per annum, depending on the city or town in which the tenant resides.

If you're having an issue with your landlord, contact Desiree T. Washington, Los Angeles Real Estate Lawyer at Washington Law Firm for a free consultation. Located in Torrance, attorney Desiree T. Washington assists people with evictions, unlawful detainer and landlord tenant matters throughout California. Areas served include Marina Del Rey, El Segundo, Manhattan Beach, Hermosa Beach, Redondo Beach, Torrance, Lomita, Hawthorne, Gardena, Long Beach, San Pedro, Rolling Hills, Palos Verdes, Wilmington, and Los Angeles. 

Call today for a free consultation.

If you cannot afford an attorney, contact the following organization:

Public Counsel