Property Owners Sue Walz Over Eviction Moratorium As State Lawmakers Agree On 'Off-Ramp' Plan For Ban

ST. PAUL, Minn. (WCCO) -- A group representing landlords is suing Gov. Tim Walz to end the state eviction moratorium first put in place when the pandemic began, arguing the ban is unconstitutional and should no longer be enforced.

In a 64-page lawsuit, the Minnesota Multi Housing Association and others allege Walz's executive order barring evictions for the past 15 months is unconstitutional because it "interferes with contract rights of tenants and property owners by effectively prohibiting those owners from removing tenants who are dangerous, destructive, or have harassed or intimidated other renters."

"It's regrettable and unfortunate but it's the only option we felt we had," said Cecil Smith, CEO of the Minnesota Multi Housing Association, at a news conference on the capitol steps Tuesday. "It's time for the governor to end his eviction moratorium and for us to get back to normal order."

He said the order bans property owners like him from even threatening termination, and certain tenants have "exploited that opportunity" by throwing parties and smoking in smoke-free buildings.

The lawsuit states the executive order bars all evictions, lease terminations and lease non-renewals for any reason other than in extreme exceptions "that have proven almost impossible to meet."

Preventing tens of thousands of Minnesotans from getting kicked out of their homes is a key reason Walz cites when he requests continued use of his peacetime emergency powers and keep eviction ban in place. On Monday, the executive council extended that emergency authority for another 30 days.

Walz has been firm that he is unwilling to relinquish those powers until there is an off-ramp for the moratorium in place. State lawmakers on Monday said they reached a deal that would replace the executive order with a plan that sunsets the ban after 105 days and requires a 15-day notice of any eviction, key authors of the proposal said.

It would also protect people with pending rental assistance claims until June of next year. The bill has not yet been published for public view.

"Gov. Walz's eviction moratorium clearly saved lives and we believe our agreement to off ramp the eviction moratorium will save the livelihoods of both renters and landlords," said Rep. Mike Howard, DFL-Richfield, adding the proposal is "one that offers protections and peace of mind to renters and landlords."

Estimates from a California-based nonprofit show 62,000 households in Minnesota are behind on payments with $207 million in total rent debt.

The state is flush with federal COVID relief aid, including nearly $700 million for rental assistance. Minnesota Housing launched RentHelpMN at the end of April for renters to tap into that help if they are behind on rent due to financial hardship they endured in the pandemic.

As of Friday, there have been 832 transactions totaling $4.9 million out of more than 24,500 who have applied for assistance, an agency spokeswoman said by email. She noted that not every single application gets approved.

The average payment is $5,800.

"There are checks going out but not nearly as quickly as we would like," Smith with the Minnesota Multi Housing Association said.

The lawsuit details a cumbersome process that landlords say precludes them from accessing the federal assistance themselves.

Property owners claim that the program "is not likely to lead in the near term to property owners being made whole for, in some cases, more than a year of back-rent."

"Minnesota is well behind other states in beginning to distribute funds," the lawsuit states. "Moreover, it is unlikely that—even with increased public awareness of the program—that the funds will get out to landlords faster."

In a response to the lawsuit and the criticisms of a slow rollout, Minnesota Housing in a statement said in part: "The program is making payments nearly every day and it takes time to work through the applications and approve them for payment in order to comply with federal requirements."

Walz's office in a statement said he is grateful the legislature came to an agreement that "safely" ends the eviction moratorium.

"Gov. Walz is committed to ending the eviction moratorium in a way that keeps Minnesotans safe and ensures certainty and stability for tenants and landlords," a spokeswoman said.

To apply for rental assistance, click here.

Note: This story was updated June 16 to reflect a statement from Minnesota Housing, which couldn't be reached for comment when it originally aired.