BY: SAM RICHARDSON, ESQ.
One of the issues that just won’t seem to go away is the notion that the government can prevent landlords from evicting tenants by claiming that the COVID pandemic created an emergency scenario in which the tenant’s rights to the property outweigh the landlord’s right to rent. State governments, including Arizona, imposed temporary moratoria on evictions for tenants who were affected or likely to be affected by COVID. Once those moratoria began to expire, the federal government jumped in with an eviction moratorium of its own…through the CDC! The Supreme Court struck down the CDC’s moratorium because the CDC has no authority to order such a moratorium. Is that the end of the debate, though?
In its opinion, the Supreme Court ended with this: “If a federally imposed eviction moratorium is to continue, Congress must specifically authorize it.” On September 17, 2021, Elizabeth Warren and Cori Bush introduced a bill that would give the Department of Health and Human Services the authority to impose a national eviction moratorium. While the bill looks unlikely to pass at this time, we should still look at how we’d oppose such a law if it did ever come to pass.
Under the Fifth Amendment to the U.S. Constitution, “No person shall . . . be deprived of life, liberty, or property, without due process of law.” When the government exercises its authority to seize private property under the doctrine of “eminent domain,” the government has to have a rational basis for taking the property, and must provide just compensation to the owner being deprived of the property. In addition, if the government regulates the use of private property to the extent that the landowner is deprived of all economically reasonable use of the property, this is considered a “regulatory taking,” and the government must pay just compensation to the landlord.
How does this apply to the eviction moratorium? There are three areas where the moratorium is subject to attack on constitutional grounds. First, COVID is not a rational basis for suspending private property rights. Now that the government has approved a vaccine for COVID, as well as provided treatment after infection with medicines like Regeneron, a landlord could argue that the basis for the moratorium has been ameliorated. Second, the law has to be reasonably related to the government’s basis for the law. In its bill, the moratorium is meant to protect tenants from health and financial effects of potential and actual COVID infection by preventing tenants from being evicted. This is likely the toughest argument, but a landlord would have to convince a court that an eviction moratorium is not related to the risk because infection is unaffected by eviction. Finally, the landlord can argue that the moratorium deprives the landlord of all economically reasonable use of the property, and the application for rental assistance fails to provide “just compensation” due to the length of time it takes to get approved and the amount of money available being too small.
Realistically, these types of provisions are tough to overcome in court. As a result, it is important that you as real estate investors reach out to your political representatives and let them know you oppose eviction moratoria, and vote for political leaders who will protect your private property rights.