Despite Court Rulings Apartment Landlords Advised to Wait on Eviction Proceedings

Last month the US District Court for the District of Columbia joined several other federal courts in ruling that the Centers for Disease Control and Prevention (CDC) eviction moratorium exceeded the agency’s authority. This week the DC Circuit Court of Appeals ruled to leave a federal prohibition on evictions intact. The issue may now go before the Supreme Court. 

For this and other reasons, landlords may not want to start eviction proceedings even though the moratorium is set to expire at the end of June. 

“I am advising my clients that they need to still be in a holding pattern if the sole basis for an eviction is failure to pay rent,” says Bonnie Y. Hochman Rothell, partner and chair of the Litigation practice at Morris, Manning & Martin LLP.

Rothell says that even in those jurisdictions where the court has overturned the CDC’s authority to issue the moratorium, there have been some stays already put in place by appellate courts to stem a floodgate of evictions while they are reviewing the issue. Also, many jurisdictions have local ordinances preventing evictions for a period of time.

“You have to look at it from a state-by-state basis,” Rothell says. “Even if the CDC moratorium is no longer in effect, there could be a local jurisdiction that would still prevent an eviction.”

Rothell also points to what she calls the “practical implications.”

“My big concern from a landlord perspective is that the moratorium currently is extended only until June 30th,” Rothell says. “At this point, from a business perspective, they could be throwing good money after bad.”

While tenants can’t be evicted, they still must pay rent. “It’s not like the landlord can’t be made whole in the long term,” Rothell says. “The problem is going to be that some tenants are not going to be able to catch up. There will be some negotiating or something to be done, or we might be facing a floodgate of evictions at that point in time. But that’s probably not in the landlord’s best interest.”

Rothell thinks it’s more likely that landlords will renegotiate with their tenants if they haven’t done so already during the moratorium.

“A lot of my landlord clients have been proactive, and I’ve encouraged them to be proactive during the moratorium and work with their tenants so that there is something in place post moratorium to catch up on the rent,” Rothell says. “We’ve come up with some really creative solutions to make it a win-win situation so that the landlord is still made whole, even if it takes a little longer.”

Rothell says many of her clients have been proactive by lengthening the lease term, which benefits the landlord, in exchange for either a reduction of rent or a longer period to pay the rent. She has built a mechanism into the lease agreements that will recover some of the past due rent at the end of the lease term. “In one instance, we got a guarantee for the additional amounts that were accrued during the moratorium so that they at least eventually get made whole,” she says.

Rothell thinks eviction cases will take some time to move through the court system as things open back up. Ultimately, the fewer evictions, the better. “From a business perspective and a society perspective, I’m hoping that some of these get worked out,” she says.