A federal appeals court has reinforced an important constitutional principle for rental housing providers by allowing claims for compensation stemming from the federal COVID-19 eviction moratorium to move forward.
The decision centers on Darby v. United States, one of the most closely watched property rights cases arising from the pandemic. By declining to reconsider its earlier ruling, the U.S. Court of Appeals for the Federal Circuit confirmed that landlords may continue seeking compensation under the Fifth Amendment for losses allegedly caused by the Centers for Disease Control and Prevention’s nationwide eviction ban.
A Continuing Constitutional Debate
The CDC implemented its residential eviction moratorium in 2020 as part of the federal response to COVID-19. While intended to reduce housing displacement during the public health emergency, the order prevented many housing providers from removing tenants who failed to pay rent.
For many independent landlords and small rental property owners, the moratorium created significant financial challenges. Although many tenants continued meeting their lease obligations, others accumulated unpaid rent while owners remained responsible for mortgages, taxes, insurance, maintenance, and other operating expenses.
Several property owners, along with the Georgia and Alabama Associations of REALTORS®, challenged the federal government’s actions in court. Supported through legal advocacy by the National Association of REALTORS® (NAR), the plaintiffs argued that the government effectively required private property owners to provide housing without just compensation, violating the Takings Clause of the Fifth Amendment.
Why the Federal Circuit’s Decision Matters
The Federal Circuit’s ruling does not determine whether compensation must ultimately be paid. Instead, it establishes that the plaintiffs may pursue their constitutional claims rather than having the case dismissed at the outset.
The federal government argued that because the U.S. Supreme Court later determined the CDC lacked statutory authority to issue the eviction moratorium, property owners could not bring a Fifth Amendment takings claim based on those actions.
The appeals court rejected that argument, concluding that the government’s position did not automatically prevent landlords from seeking compensation. As a result, the litigation can continue through the judicial process, where the merits of the claims will be evaluated.
For property owners, the decision represents an important procedural victory and preserves a legal pathway for recovering damages if the courts ultimately conclude that a compensable taking occurred.
NAR’s Role in the Litigation
Throughout the litigation, the National Association of REALTORS® supported the plaintiffs by filing an amicus brief advocating for strong constitutional protections for private property owners.
NAR has consistently maintained that government responses to emergencies must respect established property rights while balancing broader public interests. During the pandemic, the organization also supported billions of dollars in emergency rental assistance to help tenants remain housed while ensuring housing providers received payment for rent owed.
According to NAR leadership, direct rental assistance represented a more balanced solution than requiring individual property owners to absorb the financial burden of a nationwide public policy.
Looking Ahead
Although the Federal Circuit declined to rehear the case, the litigation is not necessarily complete. Additional proceedings remain possible, and further appellate review could still occur before a final resolution is reached.
Regardless of the ultimate outcome, the decision reinforces that constitutional property rights remain subject to judicial review, even during national emergencies. The case also continues to shape the legal conversation surrounding government authority, emergency powers, and the Fifth Amendment’s requirement that private property not be taken for public use without just compensation.
As of 2026, Darby v. United States remains one of the leading cases addressing whether landlords may recover compensation for financial losses associated with the federal eviction moratorium, and its eventual resolution could have lasting implications for future emergency housing policies and property rights jurisprudence.
Source: REALTOR® Magazine
“Court: Landlords Have Constitutional Right to Repayment”
National Association of REALTORS®
