In Muzi Gao v. Campus 150 Venture II, LLC, No. SACV 20-01355 DDP (ADSx), 2022 U.S. Dist. LEXIS 18370, at *8-9 (C.D. Cal. Jan. 31, 2022), Judge Pregerson held that ancillary charges associated with residential rent may be a “consumer credit transaction” under the Rosenthal Act, even if the rent itself was not.
The RFDCPA limits the ways in which debt collectors may seek to collect outstanding consumer debts. Cal. Civ. Code § 1788.10. Such debts include “consumer credit transactions,” in which “property, services, or money is acquired on credit.” Cal. Civ. Code § 1788.2(e);(f). The parties appear to agree that residential rent collection is not a consumer credit transaction. See Phillips v. Archstone Simi Valley LLC, No. CV155559DMGPLAX, 2016 U.S. Dist. LEXIS 186266, 2016 WL 7444550, at *5 (C.D. Cal. Dec. 15, 2016). The parties disagree, however, as to whether the $135 debt at issue here represents a rental debt or, as Plaintiff characterizes it, a charge for a cleaning service that was payable within thirty days, and thus constituted a credit transaction. Defendants’ argument is premised on the contention that Gao missed two rent payments, and that Gao is attempting to create a credit transaction where none otherwise would have existed. This line of reasoning is not entirely clear. There is some uncertainty as to the character of Gao’s $1,920 “deposit.” Although Gao herself referred to it as such, and it appears as a “deposit” on her account statement, Defendants cite to no provision in the Lease Agreement requiring a security deposit. Rather, the Lease Agreement allows Campus to require “advance installments of basic rent.” The Lease Agreement also provides that “all such payments shall be considered advanced rent.” Although the property manager’s declaration states that Plaintiff did not make rental payments after May 2019, it appears that Plaintiff did not make rental payments for June and July because she had already paid $1,920 in “advance rent.” Thus, as the same property manager later testified, Gao never actually missed any rent payments. At the very least, there remains a triable issue as to the predicate for Defendants’ argument: that Gao failed to pay rent due. Regardless of the outcome of that question of fact, however, Defendants appear to concede that the cleaning charges were not incurred or billed, nor cleaning services provided, until after the termination of the Lease Agreement. Nor can there be any dispute that Gao was granted thirty days to settle those charges.4 There is, therefore, at least a triable issue as to whether Gao and Campus engaged in a consumer credit transaction.5