Big landlords are warned to comply with freeze on evictions

The Biden administration is stepping up pressure on the nation’s biggest residential landlords following reports that apartment building owners were seeking to evict tens of thousands of renters despite federal freezes on evictions implemented during the coronavirus pandemic.

On Monday, officials with the Federal Trade Commission and the Consumer Financial Protection Board sent out a letter to dozens of debt collectors and major landlords who collectively house more than 2 million people, including The Carlyle Group, Morgan Stanley, Eaton Vance, LaSalle Investment Management, Angelo Gordon & Co., and AEW Capital Management.

In it, they urged the owners to comply with two eviction moratoriums and other federal tenant protections or face regulatory action.

“With millions of families nationwide at risk of eviction, it’s vital that landlords and the debt collectors who work on their behalf understand and abide by their obligations,” Rebecca Kelly Slaughter, the acting FTC chairwoman, wrote in the letter. “We are continuing to monitor this area and will act as needed to protect renters.”

The action was spurred by a report from a nonprofit watchdog group in late April, showing that large multistate landlords, their collection agents and corporate subsidiaries had filed 57,000 legal eviction petitions around the country since a federal moratorium took effect in September 2020.

The group, the Private Equity Stakeholder Project, found that filings by private equity firms and other corporations accounted for the majority of eviction cases filed in many areas. In DeKalb County, Ga., near Atlanta, large landlords were responsible for more than 80% of eviction actions over the past six months, they reported.

The administration has yet to institute legal action based on the report, “but will continue monitoring eviction practices to evaluate whether further action is appropriate,” the two officials wrote in the letter.

The freeze, enacted by the Centers for Disease Control and Prevention, is set to expire June 30, but some state governments are considering new extensions to avoid a possible wave of displacement after the moratorium expires. The Department of Housing and Urban Development has a similar freeze in place for renters in federally

subsidized housing.

The federal freeze is intended to cover most evictions caused by a tenant’s inability to pay, but does not cover instances where a renter violates the terms of the lease, such as damaging property or disturbing other tenants — although landlords sometimes use such complaints as a pretext to evict renters who cannot pay on time.

Congress has passed billions in emergency rental assistance to keep tenants from falling behind, and many owners, even those who supported the initial moratorium, have been pressing for an end to the freeze.

“With these funds now being disbursed, vaccines being widely available and the economy opening back up, it is becomingly increasingly clear that short-term, emergency policies like the nationwide eviction moratorium should be allowed to expire,” said a spokesman for the National Multifamily Housing Council, a trade association of apartment building owners.

Since President Joe Biden took office, the CFPB enacted a new rule requiring debt collectors, which are often linked to law firms retained by big companies, to give tenants written notice of their rights under the moratorium and prohibiting them “from misrepresenting tenants’ eligibility for eviction protection.”