Harry's Gang: Reckoning awaits when it comes to eviction moratorium

I feel sorry for landlords who have been bitten by both the federal and state eviction moratoriums during the Covid-19 pandemic. Losing the ability to evict someone for not paying their rent could seriously affect a landlord’s business model.

The eviction moratorium is a necessary consequence of the global pandemic. Not only has the pandemic affected the economy, leaving some tenants without a paycheck and thus unable to pay rent, it turns out that moving people from residence to residence — or worse, making people homeless during a pandemic — is dangerous. From a health perspective, renters who are evicted typically concentrate in high-density living situations, creating a higher likelihood of spreading Covid. An eviction ban is not just showing some mercy for those in need, it has a major health benefit. The Center for Disease Control, hardly a political organization, sees the threat as serious, thus the ban. So, I can understand both sides.

As an attorney, I’ve handled hundreds of evictions, representing both landlords and tenants. Typically, tenants facing eviction can’t afford an attorney, so most of the time I am volunteering my time for those tenants. Often, no matter which side I am representing, we reach a deal that is beneficial to both the landlord and the tenant. I remind tenants that they will be evicted if they don’t pay their rent, so agreeing to move out under some reasonable conditions makes sense. And I tell landlords that paying the sheriff to force a tenant out is expensive and those tenants often damage the property or leave huge messes behind, so coming to some kind of deal makes sense for them. It’s been a pretty good strategy.

The eviction moratorium has certainly affected local landlords. I spoke with Nate Huber, vice president of MBJ Development, who manages the company’s apartment complexes in Cloquet and Duluth. He said his company has been pretty lucky, and that the governor’s executive order has not been as devastating around here as he feared.

“There are some people behind in their rent; about 15 percent are behind some amount,” he told me. “About 5 percent are seriously delinquent. Only a very tiny portion have simply refused to pay their rent,” he said.

He told me those people annoy him the most. He’s empathetic with people struggling in this Covid economy. But there’s a tiny few who seem to be taking luxurious vacations and buying expensive things, knowing they don’t have to pay the rent. “Those few are just sticking it to us,” he said, but added that the number abusing the moratorium is small. “It’s worse at our company’s properties in Minneapolis, but around here, it hasn’t been too bad.”

The moratorium doesn’t say that people don’t have to pay rent; they do. They just can’t be evicted if they don’t. So why would some people pay rent, knowing they can’t be evicted? There are several reasons: first, if you have an eviction on your record, future landlords may not rent to you. Who wants a tenant who won’t pay rent? Plus, it’s so easy to look up a renter’s history on the Minnesota Court’s website, that having an eviction on your record is not helpful. Also, some public assistance programs won’t assist people with evictions on their record. And finally, you still owe the rent. A landlord can sue you for unpaid rent, and that can cause you financial problems for years. Once the moratorium is lifted, the Courts are certain to be clogged with cases: both evictions and small claims cases.

“We’ll make every effort to collect past due rent,” Huber told me. “In the old days, we may have decided it wasn’t worth it, but with the sophistication of modern collection agencies, we collect most past rent,” he said.

And the moratorium’s effect on their business? “It’s had a small effect,” Huber said. “But I’m lucky to have a good boss, frankly. He’s experienced enough to be able to ride out the executive order moratorium, so my company is doing OK, and my job is pretty secure.”

I’m predicting a pretty robust court calendar once the ban is lifted. I expect the ban to last to the end of March, but that’s just a guess. Once the ban is over, there will certainly be a big mess to clean up.

Pete Radosevich is the publisher of the Pine Knot News and an attorney in Esko. His opinions are his own. Contact him at [email protected].