On Sept. 4, 2020, the Centers for Disease Control and Prevention (CDC) issued an order to temporarily halt residential evictions in an effort to prevent further spread of COVID-19.
Nearly a year later — on Aug. 26, 2021 — a group of Alabamians led the charge to overturn this eviction moratorium, taking their case to the Supreme Court and emerging victorious.
The legal effort was led by the Alabama Association of Realtors (Alabama Realtors) — which bills itself as the voice of the real estate industry in Alabama. Along with other plaintiffs, they were victorious in its assertion that the CDC does not possess the authority to arbitrarily issue or extend such an order. It is a win not just for Alabama Realtors but for all property owners, says Jeremy Walker, CEO of Alabama Realtors.
“The CDC’s eviction moratorium was so broad, so far-reaching, and so sweeping that it jeopardized the private property rights of everyone who owns property of any kind in the country,” he says. “It was a hard-fought litigation case that took a great deal of time. It was a successful outcome for our members — not just members in Alabama, but members across the country.”
In part, the Supreme Court ruling concluded that “It is indisputable that the public has a strong interest in combating the spread of the COVID-19 Delta variant. But our system does not permit agencies to act unlawfully even in pursuit of desirable ends.”
Alabama Realtors argued that the federal government prohibiting evictions for non-payment of rent was unconstitutional, claiming that the federal government cannot seize a person’s land, farm, home or private property without due process and just compensation. Additionally, Walker says, if any of the private rental owners attempted to dispute the order or enforce contracts, they were under threat of criminal prosecution for doing so and were deprived of the constitutional right to access the court system.
“If the CDC can seize private rental property, it has the ability to seize private property of any kind without due process,” Walker says. “It is one of the most far-reaching efforts by the federal government into private property rights anyone can remember. That’s why it matters to everyone who owns a home, a business, property, farmland, timberland. It matters in a big, big way. If they can do this to rental owners, they can do it to you.”
By the time the eviction moratorium order was issued in September 2020, many Alabama landlords had not received rent from tenants since the beginning of the pandemic, going back to March 2020, Walker says. Nearly 60% of private rental property across the country is owned by small mom-and-pop companies or individuals, he adds, and this 60% were the most vocal to take action against the moratorium. While landlords supported a short-term moratorium in the beginning of the pandemic as everyone attempted to grapple with the harsh new reality, as time went on, it began to do far more harm than good, Walker says.
“They [landlords] were just getting crushed after six or seven months of not receiving rent on their rental properties,” Walker says. “It was devastating to them as small business owners.”
While the eviction moratorium stood, these landlords were still legally bound to pay bank notes, sending them into financial distress.
Danny Fordham, owner of real estate property and investment company Fordham and Associates LLC in Montgomery, considers himself a part of the 60% of mom-and-pop companies and, despite the nearly $50 billion in emergency rental assistance he says is available, he has only recently — 18 months into the pandemic — seen any checks come through for those tenants who have not paid rent since the start of the pandemic.
“I’m frustrated about it,” he says. “The $45 billion for rental assistance — that’s great, but it’s in somebody else’s account besides mine. And it’s not helping me a bit.”
Fordham says the eviction moratorium — which affects only residential properties, not commercial properties — affected him drastically, and that just one of his tenants owes $10,000 from back rent payments and, despite not paying rent on the unit, the tenant still has monthly water, garbage pickup, and maintenance provided.
Hal Tillman, owner of Tillman Realty in Birmingham, says that, unless landlords had reserves built up to protect their business, the consequences of the eviction moratorium could be extremely dire.
“If you’re not a sophisticated property owner that planned for this and had reserves built up like a rainy-day fund — if you don’t have that built up, this will cause you to go bankrupt and out of business,” he says.
Many have criticized Alabama Realtors for being callous, unsympathetic and ruthless in seeking to overturn the eviction moratorium, even culminating in death threats for some members of the association’s staff, Walker says.
“No housing provider wants to evict a tenant — it is always a last resort and reserved for the rarest cases,” Alabama Realtors says in a statement after the Supreme Court victory. “The best solution for all parties is rental assistance, and all energy should go towards its swift distribution. Nearly $50 billion of aid is now available in every state to cover up to a year-and-a-half of combined back and future rent and utilities for struggling tenants.”
By May 2020, the landscape for landlords in Alabama had gotten so bad that Alabama Realtors felt they had to act.
“When our members ask us to do things, we respond to that,” Walker says. “We have very courageous leaders and fortunately they were willing to lead on this issue. We are grateful for that, and we are here to advocate for them. Our members were obviously deeply affected by the CDC moratorium and requested that we do something about it. Our volunteer leaders of the Association had the vision and the courage to lead and move forward on this.”
Walker says the Supreme Court’s ruling could not have been more forceful and, though it was an uphill fight — a David versus Goliath battle, as he put it — it is, in his opinion, a win for property owners everywhere.
And Tillman is proud that this charge was led by Alabamians.
“What Alabama Realtors did on a national level, fighting this — it’s incredible,” Tillman says. “Coming from Alabama to being successful in the Supreme Court of the United States — it’s great.”
Rachel Burchfield and Julie Bennett are freelance contributors to Business Alabama. Burchfield is based in Birmingham and Bennett in Auburn.
This article appeared in the November 2021 issue of Business Alabama.