US private equity landlord seeking to evict renters despite ban: report

Published Fri, Apr 16, 2021 · 05:50 AM


CORPORATE landlords backed by a private-equity firm are seeking to evict thousands of cash-strapped tenants despite a federal moratorium, a group tracking the companies said.

Firms controlled by Pretium Partners LLC have sought evictions for unpaid rent against 1,300 residents in seven states, the Private Equity Stakeholder Project, an advocate for industry accountability, said in a report issued on Wednesday.

Pretium rental companies Progress Residential and Front Yard Residential Corp moved to oust tenants after the Centers for Disease Control (CDC) issued a halt to evictions in September, with a disproportionate number of filings in majority Black areas, according to court filings tracked by the non-profit. The companies operate more than 55,000 rental units.

"Progress and Front Yard comply with the CDC eviction moratorium and have not evicted any individual who is covered by a valid CDC declaration," a Pretium spokesperson said in a statement. "We work with our residents and seek to avoid eviction, but if a resident declines to pay rent and will not constructively engage to find a resolution, we reserve the right to proceed in accordance with applicable law."

The Stakeholder Project data offers a narrow view of evictions. It doesn't reflect the number of tenants actually removed nor does it account for settlements landlords and renters may reach that keep residents in their homes. In addition, court records aren't uniformly available across state and local jurisdictions, making it nearly impossible to compile national statistics.

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Progress and Front Yard have filed nearly 500 eviction actions this year through March 12, according to the Chicago-based group. Almost half of those were in two Georgia counties, DeKalb and Clayton, with majority Black populations, they said.

The rental companies sought to evict more than 12 per cent of their residents in DeKalb this year and 9.5 per cent in Clayton. That compared with lower rates in majority-white Florida counties such as Polk, where the figure was 2.4 per cent.

Pretium was founded in 2012 by Don Mullen, a former Goldman Sachs Group Inc credit executive known for leading the firm's bet against the subprime mortgage market, known as "The Big Short". The company managed US$12.7 billion in residential real estate across 15 markets as at Dec 31, according to its website. The properties had an occupancy rate of 96.7 per cent and an average rent of US$1,699.

Pretium and investors including Ares Management Corp in January completed the acquisition of Front Yard at roughly US$2.5 billion, making Pretium the second-largest US owner and operator of single-family rentals, they said.

The Consumer Financial Protection Bureau and Federal Trade Commission have said they're monitoring and investigating eviction practices, particularly by major landlords and private equity firms.

More than 8.8 million renters are late on payments, according to the CFPB. The CDC recently extended the pandemic eviction moratorium to June 30. BLOOMBERG


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