NAA Sues the Federal Government For Damages From Eviction Moratorium

The National Apartment Association announced that it filed a lawsuit on July 27, 2021 in the US Court of Federal Claims “to recover damages on behalf of rental housing providers that have suffered severe economic losses under the U.S. Centers for Disease Control and Prevention’s (CDC) overreaching federal eviction moratorium.”

Congress initially passed a national temporary moratorium on evictions for non-payment of rent on March 27, 2020, which ended on July 24, 2020. The CDC imposed a moratorium on September 4, 2020. Congress extended that moratorium through January 31, 2021. Then the CDC extended it three more times, ultimately through July 31, 2021.

There have been legal challenges, with the Supreme Court ultimately ruling on June 29, 2021 that the CDC had “exceeded its existing statutory authority by issuing a nationwide eviction moratorium.” The court did allow the moratorium to continue through July, as planned, to “allow for additional and more orderly distribution of the congressionally appropriated rental assistance funds.”

The reach of funds has been far from satisfactory for many landlords and tenants. For example, the Consumer Financial Protection Bureau announced resources only on July 28, four days before the moratorium expires, to help people find the available financial resources. 

Many renters and property owners have found the assistance process to be slow and murky. It wasn’t until May 2021 that the Treasury released an additional $21.6 billion for the program after congressional action in December 2020 provided a first $25 billion in emergency rental assistance, or nine months after the very first moratorium had begun.

The complaint (the copy the NAA uploaded doesn’t list a filing date or case number) states that the moratorium “prohibits property owners from evicting tenants of residential rental properties who are delinquent or in default on their rent payments, contrary to the property owners’ legal, contractual, and constitutional property and other rights.” 

The organization called the result “an extended Government-authorized physical invasion, occupation, or appropriation of their private property by third parties without compensation” in violation of the Fifth Amendment of the U.S. Constitution. The amendment, often associated with the right to avoid self-incrimination, in part includes the Takings Clause, which provides that private property cannot be taken for public use without just compensation.

The NAA has said that the lawsuit is “is open to all rental housing providers operating in a state or locality under the federal moratorium who have been damaged by the CDC eviction moratorium” and encourages eligible parties to sign on.