An Enormous Bill is Coming Due in Virginia

by James C. Sherlock

We had a long discussion in this space earlier about whether the Virginia Supreme Court Order of March 16, 2020, that suspended writs of eviction and residential unlawful detainers was constitutional.

The June 8 extension of the original order was especially troubling because by that order the courts were open for business to all plaintiffs except residential landlords.

Regardless of individual views of constitutionality, that order constituted unmistakably a taking of private property.

For purposes of this discussion assume:

  1. the taking of the property of the landlords in order to stem the effects of COVID was for public purposes and thus constituted a taking for public use; and
  2. the method of the taking was not impeded by any barrier of constitution or law.

Under Article I Bill of Rights, Section 11 of the Constitution of Virginia Due process of law; obligation of contracts; taking or damaging of private property; reads in part:

“That no person shall be deprived of his life, liberty, or property without due process of law; that the General Assembly shall not pass any law impairing the obligation of contracts; ….

That the General Assembly shall pass no law whereby private property, the right to which is fundamental, shall be damaged or taken except for public use. No private property shall be damaged or taken for public use without just compensation to the owner thereof.”

Under that provision, those businesses and individual citizens who are lessors of rental property rightly will present to the Comptroller bills for just compensation for loss of rent attributable to the order between March 16 and the date the Order is rescinded or allowed to expire.

The Commonwealth will have no choice but to pay.

According to the Census Bureau, in 2017 there were 960 firms doing business as lessors of residential buildings and dwellings in Virginia. Census bureau figures from 2019 show 3,562,123 housing units in Virginia, 66.2% of which were owner-occupied. Something over one million were rented. The median gross rent 2014 – 2018 was $1,202. Assume $1,300 in 2020. So, estimate $1.3 billion per month in rent payments by Virginians.

I yesterday interviewed an apartment owner in the Richmond area. One of his tenants has not paid rent since December. He obtained a writ of eviction in March.

The sheriff in his county was poised to execute it when on March 16, the Chief Justice, “having received a request from the Governor”, entered an Order declaring a judicial emergency “recognizing the need to protect the health and safety of court employees, litigants, attorneys, judges, and the general public.” The sheriffs stopped serving writs of eviction.

It gets better. The tenant was arrested for assaulting two police officers. He was confined to his apartment pending a trial. He now hasn’t paid rent for six months. So far he owes the owner $9,922.43 and counting.

Under Virginia law, the tenant is eligible for an Emergency Order of Possession as a threat to health, life and safety of other tenants, but that action, too, is suspended.

The sheriff was poised again to evict him June 10. The June 7 letter from the Governor and the Order of the court on June 8 restricted writs of eviction and residential unlawful detainer actions. The courts and services of writs were open for all other plaintiffs.

I asked the owner if the word had gotten around to his tenants that they could stay in his apartments without paying rent under the Court orders. His answer: “It has indeed”.

So, pick your own percentage of rental bills not paid under the judicial order. We’ll go with 3% for example purposes only. Three percent of $1.3 billion is $39 million per month for four months. Round it down to $150 million and counting.

None of us can estimate the actual total cost to Virginia of the claims that will be presented, but it will be enormous.

As a matter of equity as well as of law, I support reimbursing the landlords who have been forced to absorb the cost of public policy in response to COVID 19.  So I hope will we all

It is a public debt. The amount is increasing daily.