Landlords across the country have filed lawsuits seeking to overturn state and local eviction moratoriums, saying the measures jeopardize their businesses, discourage renters from paying what they owe and are unconstitutional.
The cases, filed in at least nine states, come as landlords grapple with their own mortgage obligations while having to negotiate payment plans with tenants hard hit by the coronavirus.
In New York, three landlords filed a federal lawsuit challenging the constitutionality of New York Gov. Andrew Cuomo’s eviction freeze. That lawsuit, by three landlords who own about 100 units in New York City suburbs, argued the eviction moratorium led even tenants who could afford rent to skip payments. A judge dismissed the suit late last month, ruling tenants will still have to pay the rent after the ban lifts.
But many other suits are pending, including in Arizona, Connecticut, Illinois and Kentucky, where landlords and landlord groups have sued states and governors in an effort to resume evictions.
In Kentucky, which does not have strong tenants rights laws, many landlords were surprised when Gov. Andy Beshear indicated he might extend the state’s ban on evictions — which took effect in March — until October. That’s according to Chris Wiest, who represents the Kentucky Apartment Association, which filed a federal suit to overturn the moratorium. The case argues that the freeze on evictions violates the Constitution because it impairs contracts. It cites a 180-year-old U.S. Supreme Court case that it claims struck down similar limits on evictions.
“My clients have worked out agreements with a lot of their tenants,” Wiest said. “The ones that were left were people who were abusing the system, they could be working full-time and you can’t evict them because they refuse to pay rent.”
In the early days of the pandemic, as nonessential businesses were shut down nationwide and millions of workers began losing their jobs and incomes, states began halting evictions. Many of those temporary measures were extended as the crisis wore on. Now, enhanced federal unemployment benefits are set to expire at the end of this month. Eviction bans intended to keep renters in their homes are expiring, too; eviction bans in nearly a dozen states will end next month if lawsuits don’t dismantle them first. Tenant advocates warn a flood of evictions will follow but landlords dispute that, saying the threat of eviction will lead tenants to pay rent, if they can.
Early this month, the Homeowners Association of Philadelphia — which represents residential investment and rental property owners and managers — sued the city. That followed a raft of tenant protection measures local officials passed, which included extending the eviction moratorium through August.
Blame the feds
Some multifamily owners blame the federal government for passing sweeping eviction protections for renters whose landlords have federally-backed mortgages. A provision in the CARES Act prohibits evictions for 12.3 million rental units, or more than a quarter of the 43.8 million U.S. rental units, the Urban Institute estimates.
A federal suit filed by two Texas apartment complex owners challenged those eviction protections.
The lawsuit contended that by not allowing evictions, Treasury Secretary Steven Mnuchin and Housing and Urban Development Secretary Ben Carson interfered with the “contract rights of owners…and their rights to due process and equal protection of the laws.”
Pierre Debbas, a real estate attorney in New York City, said his firm is helping landlords negotiate agreements with tenants over rent payments. While landlords in the state can once again file for evictions, proceedings are still on hold. Debbas, a partner at Romer Debbas, called the housing court reopening haphazard and confusing, and added it was preventing evictions from moving forward.
Some landlords who held off on evicting tenants during the worst of the pandemic are finding their own situations increasingly dire. While Debbas said, “you don’t want to look like you’re going to housing court and throwing out a tenant in the middle of a crisis,” he added that landlords with thin margins are left with few alternatives but to protect their investment.
Other landlords who are “suing the government can afford to survive but have said, ‘you can’t dictate how I operate my business, so enough’s enough.’”
Months into the crisis, an increasing number of landlords have pushed ahead to challenge the bans.
Landlord groups in Los Angeles and San Francisco have separately sued to toss out their local eviction bans. Two landlords have sued the California Judicial Council, the state court’s rule-making body, arguing that the state eviction suspension “immunizes” problem tenants from eviction. In a suit filed last month, the Los Angeles Apartment Association argued that the city’s eviction ban allows renters “to ignore their contractual obligations for the foreseeable future,” while landlords continue to rack up fees for water, power, trash and sewage.
The San Francisco Apartment Association alleges that the eviction moratorium violates “a basic term of any tenancy — rent in exchange for possession of property.”
The SFAA, whose members operate 65,000 rental units citywide, is a chapter of the state’s most prominent landlord group, the California Apartment Association. While CAA isn’t a party to either suit, a spokesperson said the group is involved through their San Francisco affiliate, but is on the sidelines for now. “We’re also monitoring the progress of the Los Angeles lawsuit and still might intervene,” the CAA spokesperson for CAA said.
Law firms that represent landlords may be further motivated to file challenges on their clients’ behalf, industry pros said. Attorneys at some of those firms — which Wiest called “eviction mills” — are out of work. Overturning the eviction moratoriums would restart their business, he said.
Leah Simon-Weisberg, legal director and tenant advocate at Alliance of Californians for Community Empowerment Institute, shared that sentiment. She said it is unusual to challenge eviction moratoriums in court because the measures are temporary, and may expire before the case is settled. With eviction bans in effect, “the landlord attorneys also have nothing to do,” she said. “This is their way to make money, and they have time to do it.”
Simon-Weisberg added she was confident the eviction ban would hold up in court.
“We’re not concerned [about the lawsuit] because frankly, the city attorneys took this process very seriously,” she said, “and really only passed legislation that they believed could withstand litigation.”