Senate Banking Chair Knocks PE Firm On Pandemic Evictions

By Jon Hill
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Law360 (June 10, 2021, 10:00 PM EDT) -- The Senate Banking Committee's Democratic chairman told private equity firm Pretium Partners LLC on Thursday that he's "troubled" some of its portfolio companies may have bucked a federal moratorium on tenant evictions during the COVID-19 crisis and wants answers.

In a letter to the firm, Sen. Sherrod Brown, D-Ohio, flagged what he said were "concerning reports" that corporate landlords under Pretium's control have filed to evict more than a thousand tenants for unpaid rent, and at higher rates in majority-Black areas, despite the eviction moratorium put in place by the Centers for Disease Control and Prevention last fall.

The letter, which was addressed to Pretium CEO Don Mullen, went on to request a briefing for Brown's staff within two weeks, saying the senator wants to understand the firm's eviction policies and practices.

"In light of the serious potential health consequences of evictions during the pandemic, I am troubled that your companies may have pursued evictions in contravention to the CDC's moratorium," Brown wrote.

"I am also concerned that these evictions appear to have disproportionately affected renters from minority groups who have suffered greater incidence of serious COVID-related illness and death," Brown added.

Thursday's letter cited National Public Radio and Bloomberg coverage based on an April report from the Private Equity Stakeholder Project, an advocacy group, which found that Pretium's rental companies Progress Residential and Front Yard Residential have moved to evict more than 1,300 tenants across multiple states since the start of the pandemic.

According to the report, most of those eviction filings have come since the CDC instituted its nationwide moratorium in September. The report said Progress and Front Yard's eviction filings also "disproportionately impact Black renters," finding that nearly half of their filings in the first months of 2021 were concentrated in two majority-Black counties in the Atlanta metro area.

Together, the companies are "among the most prolific filers of eviction actions" during the pandemic and have sometimes even pursued eviction cases against renters who have sought to claim protections under the CDC moratorium, according to the report.

In a statement to Law360, a spokesperson for Pretium Partners said Thursday that the firm takes its "responsibilities as a provider of quality, affordable rental homes in the U.S. very seriously."

"We are in receipt of a letter from Sen. Brown and look forward to engaging with him regarding our efforts to support residents across the country throughout the pandemic as well as clearing up any misconceptions," the spokesperson said. "We can also unequivocally confirm that no individual covered by a valid CDC declaration has been evicted from our properties."

Currently set to expire at the end of the month, the CDC's moratorium prohibits evictions of struggling tenants who can't pay their rent and have nowhere else suitable to live.

The moratorium was intended as a public health measure to keep at-risk renters out of shelters and crowded living situations conducive to COVID-19 spread, but its legality has been repeatedly challenged by real estate owners and landlords, with some success.

Last month, for example, a D.C. federal judge ruled the moratorium exceeded the CDC's authority and should be vacated. This directive has been stayed while the Biden administration appeals the decision, but the U.S. Supreme Court is now weighing an emergency request by challengers to lift this stay.

In his letter Thursday to Pretium, Brown underscored what he argued is the importance of the eviction moratorium from an individual and public health perspective.

"While evictions can have long-lasting, damaging effects on renters in normal times, they are especially troubling during a pandemic where safe, stable housing can literally mean the difference between life and death," Brown said.

--Editing by Daniel King.

Update: This story has been updated with comment from Pretium Partners.

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