Member Article

On Thursday, February 25, 2021, a Federal Court Judge in the Eastern District of Texas sided with a group of landlords by holding that the eviction moratorium instituted by the Centers for Disease Control and Prevention (CDC) is unconstitutional by extending “far beyond the legitimate scope of federal power.”

The CDC’s eviction moratorium order, issued in September 2020 and extended to March 2021, makes it a crime for a landlord or property owner to evict a “covered person” from a residence. A “covered person” is any resident who provides the landlord or property owner with a declaration that makes five certifications, namely:

(1) the resident has used best efforts to obtain available government assistance for rent or housing;

(2) the resident falls below certain income thresholds, generally $99,000 annually or $198,000 annually if filing a joint tax return;

(3) the resident is unable to pay the full rent due to “substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary out-of-pocket medical expenses;”

(4) the resident is using best efforts to make timely partial payments that are as close to the full payment as circumstances permit; and

(5) the resident has no other available space for occupancy at the same or less housing cost and, if evicted, would either need to live without housing or move into a congregate or shared-living setting.

The CDC’s order prohibits any action to remove or cause the removal of a covered person from any residential property. However, the order allows evictions if a resident is (1) engaging in criminal activity on the premises; (2) threatening the health and safety of other residents; (3) damaging or posing an immediate and significant risk of damage to property; (4) violating any applicable building code, health ordinance, or similar regulation relating to health and safety; or (5) violating any other contractual obligation, other than timely payment of rent or similar fees.

The CDC has argued that the order is necessary to protect public health because “homelessness increases the likelihood of individuals moving into close quarters in congregate settings, such as homeless shelters, which then puts individuals at higher risk to COVID-19.”

The plaintiffs in the Texas case, one individual and six companies, argued that the CDC lacked constitutional authority to issue the eviction moratorium order and further that it is unfair to millions of landlords across the country who are owed unpaid rent and are unable to evict their tenants, all while still incurring the costs of owning and managing their properties.

Ultimately, the Court found that the eviction of one person from a dwelling does not alone have a substantial effect on interstate commerce. As a result, the Court concluded that the CDC does not have the requisite constitutional authority to issue or enforce the eviction moratorium order.

Importantly, the Court declined to issue an injunction blocking the evictions ban but noted that it expects that the CDC will respect the decision. As a result, the ban on evictions remains in place pending new developments. It is currently unclear whether the CDC will appeal the decision.

Dykema will continue to monitor new developments with respect to the eviction moratorium order. If you have questions about the matters raised in this alert, please contact Daniel Schairbaum at 313-568-5352 ([email protected]), Michael Vogt at 248-203-0739 ([email protected]), Bridget Underhill at 248-203-0735 ([email protected]), or your regular Dykema contact.

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