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When the Presenter Doesn’t Show Up

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Preparation Makes Improvisation Possible

Yesterday’s CLE offered one of those reminders that even the best‑planned programs can throw a curveball.

One of the scheduled presenters simply didn’t appear — no message, no update, just an unexpected gap in the agenda that needed to be filled to keep the program running smoothly.

As chair, that’s the moment you stay anchored. I always overprepare, and I always brown‑bag my lunch when I’m chairing so I can keep an eye on the stove. You never know when you’ll need to step in.

So I did.

I covered roughly forty minutes of the absent presenter’s fifty‑minute slot with material I had ready to go, and a colleague who was scheduled to speak next filled in the remaining ten. Between the two of us, the attendees received a full, substantive program without any loss of momentum.

Afterward, the vendor rep and I talked briefly. She mentioned that some chairs check in and out throughout the day. That’s never been my approach. If you’re responsible for the program, you stay present. You watch the timing, the transitions, and the unexpected gaps — especially the unexpected gaps.

In the end, the CLE ran smoothly. Not because everything went according to plan, but because preparation makes improvisation possible. Sometimes the most important part of chairing isn’t the content you planned — it’s how you handle the moments you didn’t.

US Court of Appeals Holds CDC Eviction Moratorium Likely Invalid

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In September 2020 the Center for Disease Control (CDC) issued a nation-wide eviction moratorium,  citing generic rulemaking authority under the Public Health Service Act. The same month, landlords in Tennessee filed a lawsuit in federal court arguing that the CDC eviction moratorium exceeded statutory authority.

The Public Health Service Act statute authorizes the CDC Director to provide for “inspection, fumigation, disinfection, sanitation, pest extermination, destruction of animals or articles found to be so infected or contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary.” The CDC based its authority to supersede state law and halt evictions nation-wide on the “other measures” catchall.

Later, Congress extended the CDC eviction moratorium from December 31 to January 31. On January 29, the CDC extended the eviction moratorium through March 31, relying again on the generic catchall as authority.

The federal district court ruled that the CDC had exceeded its statutory authority. The government appealed and moved for a stay on the district court’s order.[1] The Sixth Circuit Court of Appeals concluded that the government was unlikely to prevail on the merits, and denied the motion.[2]

The Court reasoned that as the “other measures” catchall comes at the end of a list of specific items, the “other measures” catchall must be construed to be of the same nature as the specified items like “inspection, fumigation, disinfection, sanitation, pest extermination” and so on. “Plainly, government intrusion on property to sanitize and dispose of infected matter is different in nature from a moratorium on evictions.”

The Court noted that regulation of the landlord-tenant relationship has historically always been the province of the states, and the Court would not read the statute as granting the CDC power to insert itself in a traditional area of state law without “some clear, unequivocal textual evidence of Congress’s intent to do so.” The Court cited an “ordinary rule of statutory construction that if Congress intends to alter the usual constitutional balance between the States and the Federal Government, it must make its intention to do so unmistakably clear in the language of the statute.”

The government argued that since other provisions of the Public Health Service Act allow the CDC to enforce quarantines, the “other measures” catchall must be read broadly to include things like quarantine. The Court conceded that this argument has “cosmetic appeal” but concluded that it does not hold up to scrutiny. The Court reasoned that the provision the government relied upon dealt with limited power to restrict liberty by imposing quarantines. The “other measures” language is found in provisions dealing with property interest, and an eviction moratorium is radically different from the types of property interests listed there.

The government also argued that when Congress legislatively extended the CDC eviction moratorium it acknowledged that the statute authorized the moratorium. The Court noted that nothing in the congressional act expressly approved the CDC’s interpretation, and “mere congressional acquiescence in the CDC’s assertion” of statutory authority “does not make it so, especially given that the plain text indicates otherwise.”

The Court found the government unlikely to prevail on the merits, and accordingly denied the motion for a stay on the district court’s order.

[1] Tiger Lily, LLC v. US Dept. of Housing and Urban Development (6th Cir. No. 21-5256).

[2] See https://www.opn.ca6.uscourts.gov/opinions.pdf/21a0074p-06.pdf

Texas Federal Judge Hold CDC Moratorium Unconstitutional

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A federal judge in Texas has held the Centers for Disease Control eviction moratorium unconstitutional.[1]

In September 2020 the CDC issued a nation-wide residential eviction moratorium in response to the COVID-19 pandemic. The CDC eviction moratorium stopped evictions for non-payment. In Texas several landlords filed suit challenging the legal authority of the federal government to impose an eviction moratorium upon states.

The judge ruled that while states have the power to regulate residential evictions, the CDC moratorium exceeded federal authority to regulate interstate commerce. States have broad power to enact laws for the general public good—called ‘police power’—but the police power of the federal government is limited under the US Constitution.

The federal government has no general police power. The federal government must find authority either under an area reserved to it under the Constitution, such as the power to regulate interstate commerce.

The Court noted that the “federal government cannot say it has ever before invoked its power over interstate commerce to impose a residential eviction moratorium” and that the federal government had not done so during the Spanish Flu pandemic or the Great Depression. “The federal government has not claimed such a power at any point during our Nation’s history until last year.”

The government claimed broad constitutional authority. The federal government argued it had authority to issue suspend evictions even in the absence of a pandemic for any reason, including an agency’s views on “fairness.”

Note that the impact of this ruling is limited as it is the holding of a local federal district court judge, and even within its jurisdictional boundaries, the Court did not issue an injunction. Any landlord should consult with an attorney before acting, particularly as there are potential criminal penalties for violating the CDC moratorium.

An appeal is highly anticipated.

[1] Terkel et al. v. Center for Disease Control and Prevention, No. 6:20 -cv- 00564 (E.D. Texas February 25, 2021).

New CDC Eviction Moratorium

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The Center for Disease Control (CDC) issued an eviction moratorium covering essentially all residential properties. To qualify for protection the tenant must provide the landlord with a declaration under penalty of perjury that the tenant

  1. has used best efforts to obtain all available government assistance for rent or housing;
  2. expect to earn for 2020 no more than $99,000 for individuals or $198,000 for joint tax filers;
  3. is unable to pay the full rent due to substantial loss of income, loss of work hours, wages, lay-off, or extraordinary out-of-pocket medical expenses;
  4. is making best efforts to pay as close to full payment as circumstances permit;
  5. eviction would likely make the tenant homeless or forced the tenant to move in close quarters in a shared-living arrangement;

The CDC argues in its moratorium that preventing evictions will help slow the spread of COVID-19. It cites this argument as giving the CDC authority to issue the eviction moratorium.

The CDC moratorium does not apply to evictions based on a tenant

  1. engaging in criminal activity;
  2. threatening health or safety;
  3. damaging or posing an immediate and significant threat to property;
  4. violating building or health codes or similar laws;
  5. violating contractual obligations other than non-payment of rent or other charges

The CDC moratorium is set to expire December 31, 2020.

 

New York Eviction Moratorium Challenge Dismissed

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A federal judge struck down constitutional challenges to Governor Cuomo’s eviction moratorium orders.

The moratorium allows tenants to apply security deposits to rent provided the tenant replenishes the funds on a defined schedule, and temporarily prohibits landlords from starting an eviction against tenants facing financial hardship related to the pandemic.

The Governor’s Orders did not address then pending eviction cases, but as the Court pointed out the New York state courts closed in March and all eviction cases were suspended.

The first moratorium temporarily paused all evictions regardless of grounds.  A later order clarified that evictions on grounds other than non-payment against tenants experiencing financial hardships could proceed.

A group of landlords sued Governor Cuomo in federal court challenging the constitutionality of the orders on various legal theories. The Court dismissed the case in a summary judgment ruling.

The Court noted as background that evicting a tenant in New York, especially a residential tenant, is slow, cumbersome and extremely tenant-favorable process, especially when compared to analogous procedures in other states.

The Court noted several times in its opinion the temporary nature of the New York eviction moratorium. “[T]here is nothing permanent about [the eviction moratorium order]; it expires on August 19.”

The Court reasoned that the moratorium does not forgive rent, and landlords will be able to attempt to collect and/or evict tenants once the moratorium expires. “As long as the order is in place, tenants will continue to accrue arrearages, which the landlord will be able to collect with interest once the Order has expired. Furthermore, landlords will regain their ability to evict tenants once the Order expires.”

The Court pointed out that landlords “can still initiate eviction proceedings against the tenants who are not facing financial hardship but who have chosen not to pay their rent” and “will be able to move against their other tenants after August 19.”

The Court reasoned that the moratorium is not a regulatory taking because landlords still retain many economic benefits of ownership such as collecting rent from tenants not facing financial hardship and collecting security deposit funds from tenants affected by the pandemic.

The Court stated that the law is clear that “state governments may, in times of emergency or otherwise, reallocate economic hardships between private parties, including landlords and their tenants, without violating” the US Constitution.

Download a copy of the Court’s opinion.

New York Landlord-Tenant Attorneys

[businessdirectory-listings tag="New York evictions" title="New York Landlord-Tenant Attorneys"]

Portland Passes Tenant Screening Restrictions

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The Portland, Oregon city council recently passed new laws restricting landlords in screening for rental applicants.

Landlords must give 72 hours notice before accepting applications, then are required to accept the first qualified applicant. The income and credit score requirements landlords may use are capped. Landlords’ use of criminal background checks is limited.

The new laws are aimed addressing homelessness and housing affordability. Critics argue the new laws will drive some landlords out of the market, making rents more expensive and exacerbating the problems.

Rent Control Coming to Oregon

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Oregon is expected to enact rent control in the near future.

Is this a good idea? A consensus of economists is that it is a bad idea.

Liberal and conservative economists both conclude that rent control is bad economics. In a 1992 survey the American Economic Association found 93% of economists agreed that a “ceiling on rents reduces the quantity and quality of housing available.” [1]

Prominent liberal economist Paul Krugman stated in a New York Time op-ed piece that “rent control is among the best-understood issues in all of economics, and—among economists, anyway—one of the least controversial.” [2] Least controversial because the undesirable side effects of rent control are “immediately obvious” to “an economist, or for that matter a freshman who has taken Economics 101.” [3]

Rent controls exacerbate shortages of affordable housing. Rent controls push landlords to convert properties to non-rental uses, such as condominiums.

After rent control was enacted in Boston in the 1970s, about “10 percent of the city’s rent-controlled housing stock was converted to condominiums and moved out from under the grasp of the ordinance.” [4]  After rent control was reversed in the 1980s, the trend away from renting units out also reversed itself. After rent control ended there was “a 6 percentage point increase in the probability of a unit being a rental” as opposed to a condominium, or other use. [5]

Rent controls discourage landlords from investing in upkeep. With rent arbitrarily capped, landlords have less means and less incentive to maintain units. Landlords are only legally obligated to provide housing that is fit for human habitation. They are not obligated beyond that low threshold.

“Though rent control does not seem to lead to catastrophic maintenance failures, it appears to reduce the maintenance performed on rental units. As landlords can be fined for allowing water and heat failures, but not for cracked paint, this result is not surprising.” [6]

Rent controls lower property values of rental properties, often leading government to make up lost revenue by raising taxes on everyone else. The “tax burden is shifted not only to single family homeowners, but also to tenants in the uncontrolled market.” [7]

Policies that increase housing supply, rather than shrink it, might be better policy.

Minneapolis, for instance, has done away with single-family zoning, opening up development of apartments and condominiums.

 

 

 

[1] Alston, Richard M.; Kearl, J. R.; Vaughan, Michael B. (1 May 1992). “Is There a Consensus Among Economists in the 1990’s?”

[2] Reckonings; A Rent Affair, Paul Krugman, New York Times, June 7, 2000.

[3] Reckonings; A Rent Affair, Paul Krugman, New York Times, June 7, 2000.

[4] Navarro, Peter. 1985. Rent Control in Cambridge, Massachusetts. Public Interest 78(4): 83- 100.

[5] Sims, David P. 2007. Out of Control: What Can We Learn from the End of Massachusetts Rent Control? Journal of Urban Economics 61(1): 129-51.

[6] Sims, David P. 2007. Out of Control: What Can We Learn from the End of Massachusetts Rent Control? Journal of Urban Economics 61(1): 129-51.

[7] Navarro 1985, 96.

Trump Administration Threatens Marijuana Businesses

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The Trump administration recently announced that it is rolling back Obama administration polices that had tolerated marijuana businesses where legal under state law.  Federal prosecutors are now free to enforce federal laws against marijuana, even if legal under local state law.  [1]

The sale and use of marijuana has remained illegal under federal law, despite legalization under state law in several states. Marijuana businesses and the landlords who rent space to them are subject to criminal penalties including imprisonment. Landlords may lose their property in civil forfeiture actions.

Landlords who knowingly rent to marijuana businesses do so at their peril. It is best to consult with an attorney before taking actions that may place your freedom and your property in jeopardy.

 

[1] See this CNN page, for example. http://www.cnn.com/2018/01/04/politics/jeff-sessions-cole-memo/index.html

Recent D.C. Opinion on Lease and Option

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In a recent opinion the Chancery Court of the District of Columbia considered what it characterized as an “unusual” and even “bizarre” question:

Does the contract law of the District of Columbia require the owner of a building to accept a lease that no reasonable lessor would ever sign simply to facilitate the lessee’s exercise of a contractual option to purchase the building?

The option holder sought specific enforcement of an option contract.  The owner argued that to exercise the option the option holder had presented a lease that no reasonable lessor would ever sign.  The owner counterclaimed for an alleged lost opportunity to sell the property to a third person.

The court denied both parties requested relief.