Landlords Enter Settlement Talks Over Pandemic Losses

The federal eviction moratorium tied to the pandemic lapsed nearly five years ago, but continues to be a source of consternation for landlords, who are moving one step closer to recouping losses.

The landlord group is in settlement discussions with the Department of Justice over a lawsuit accusing the federal government of violating constitutional rights, Bisnow reported. Despite a win for the government in 2020, the plaintiffs won a key appeal last year, leading to the negotiations, first reported by the Associated Press.

The federal moratorium on evictions began during Donald Trump’s first term in September 2020. It came to an end 10 months later, though most states and dozens of cities had their own moratorium last even longer.

The moratorium, enacted by the Centers for Disease Control and Prevention, harmed landlords, according to the lawsuit, disrupting their businesses and forcing many to cut staff or sell their properties. They allege the moratorium violated the Fifth Amendment, which pertains to due process and just compensation.

More than 1,500 property owners are involved in the lawsuit. The largest landlord in the case is California-based Investors Management Trust Real Estate Group, which has more than 15,000 units in its portfolio. Other major landlords involved in the litigation include Prosperity Capital Partners, Commerce Capital Group and Gateway Management.

The landlords are looking to score up to $1.5 billion from the federal government, as individuals are reporting losses between thousands of dollars to almost $15 million. The Justice Department declined to comment to the AP, citing pending litigation.

“It’s important for us to stand up when a group like the CDC unilaterally, functionally, decides that they have a right to oversee our business,” landlord Matthew Haines told the AP.

Depending on how the talks shake out, there will be a question on whether or not a settlement opens the compensation door for those who have stayed out of the litigation.

— Holden Walter-Warner