As COVID-19 Surges in Florida and Arizona, Starwood Capital Eviction Cases Loom for Residents

Multiple cases appear to violate federal CARES Act eviction moratorium

While the COVID-19 pandemic has kept people at home, private equity firm Starwood Capital, one of the largest apartment owners in the United States, has filed dozens of complaints to evict residents since mid-March. Many of these cases are still active.

Even as stay at home orders were handed down by state and local governments across the US, Starwood Capital entities (including Starwood-affiliated property manager Highmark Residential) were filing to evict residents. In Florida alone, Starwood Capital filed nearly 60 eviction cases after March 16, 2020. Nearly half (25) of the cases were still open as of July 1. Starwood Capital affiliates have filed evictions as recently as June 15. See table below.

Barry Sternlicht, CEO, Chair, and co-founder of Starwood Capital, is also a member of President Donald Trump’s Great American Economic Revival Industry Group, which advises the President on reopening the US economy. Even as the US has seen record numbers of COVID-19 cases in recent days, Sternlicht has maintained that the US must ease restrictions related to COVID-19.[i]

Some evictions appear to violate federal moratoriums

The federal CARES Act, adopted on March 27, prohibits landlords from filing eviction cases for nonpayment of rent and charging late fees to residents of federally backed properties, including properties with Fannie Mae and Freddie Mac-backed mortgages.

Starwood Capital has drawn on billions of dollars in financing backed by government-sponsored enterprises Fannie Mae and Freddie Mac in order to acquire apartments.[ii]

In Miami Dade County, Starwood Capital affiliates filed eviction cases in county court against two residents of Kings Colony Apartments on April 2, 2020.[iii] Starwood Capital’s Kings Colony Apartments has a mortgage from Fannie Mae.[iv]

Miami Dade County declared a state of emergency related to the COVID-19 pandemic on March 12 and ordered all non-essential retail and commercial establishments to close on March 19.[v]

Also on April 2, a Starwood Capital affiliate filed an eviction case in Lake County, Florida to evict a tenant from the Spring Harbor Apartments,[vi] which has a Freddie Mac-backed mortgage.[vii]

On March 30, also after the CARES Act eviction moratorium took effect, Starwood Capital-owned management company Highmark Residential filed two eviction cases in Duval County, Florida (Jacksonville)[viii] at the Grande Court Apartments, a property with a Freddie Mac-backed mortgage.[ix]

While these cases have since been dismissed, some remained active until mid-June.[x] It is unknown whether the dismissals were contingent on tenants paying rent that Starwood Capital affiliates were seeking.

Starwood Capital also appears to have charged late fees at the Griffin Apartments in Scottsdale, Arizona, which has a Fannie Mae-backed mortgage.[xi] On April 2, after the CARES Act eviction moratorium took effect, a Starwood Capital affiliate obtained a default judgment against a tenant of the apartment complex that included a $493 late charge.[xii]

Starwood Capital files to evict residents in Arizona, Florida as COVID-19 cases rise

Florida and Arizona have both recently seen large spikes in COVID-19 cases. Florida reported 43,964 new COVID-19 cases for the week of June 21-28.[xiii] Arizona has seen a recent surge in COVID-19 cases, reporting 3,858 new coronavirus cases on Sunday, June 28, the most coronavirus cases reported in a single day in the state.[xiv]

Yet Starwood Capital affiliates have recently filed additional eviction cases in both Florida and Arizona.

On May 15, a Starwood Capital affiliate filed an eviction case in Lee County, Florida to evict a resident of the Westwood Apartments, located in Fort Meyers.[xv] The property is financed by both a Freddie Mac-backed mortgage and a Low-Income Housing Tax Credit (LIHTC).[xvi] The eviction case is still pending.[xvii]

On June 15, a Starwood Capital affiliate filed to evict a resident of a single-family rental home in in Maricopa County (Phoenix, Arizona). Starwood Capital obtained a default judgment against the resident a week later, on June 23.[xviii]

Residents respond to Starwood Capital

In some cases, residents have responded to Starwood Capital’s eviction complaints, seeking relief during the pandemic.

On March 26, a day before the CARES Act eviction moratorium took effect, Starwood Capital filed an eviction case in Hillsborough County, Florida at the Wexford Apartments in Tampa.

On April 1, the resident responded, appealing to the judge in light of hardship caused by the COVID-19 pandemic.

The resident noted that she was caring for her three children, and was a home health aid, but had difficulty finding work during the COVID-19 pandemic as clients had cancelled. She reported she was working for three delivery services, was trying to stay afloat, and asked for a payment plan to be able to catch up on what she owed, noting that “trying to find a place to live with an eviction is close to impossible.”

Her case remained open until June 26, when it was dismissed.

On March 24, a Starwood Capital affiliate filed an eviction case in Palm Beach County, Florida at the Cove at Boynton Beach apartments.[xix] The Cove at Boynton Beach has a mortgage backed by Fannie Mae.[xx]

The complaint followed a three-day notice which Starwood Capital’s property served to the resident that stated:

“I demand payment of the rent or possession of the premises within three (3) days (excluding Saturdays, Sundays, and legal holidays) from the date of delivery of this notice. To Wit: On or before the 18^th day of March, 2020. Please govern yourself accordingly!”

On April 9, the resident responded to Starwood Capital’s eviction complaint, asking for a hearing and noting that she had lost her job on March 15 because of the COVID-19 pandemic. As of July 1, the eviction case was still pending.[xxi]

[i] https://www.cnbc.com/2020/05/19/barry-sternlicht-us-should-pay-people-for-covid-19-contact-tracing.html, accessed May 19, 2020.

[ii]“Berkeley Point Backs Big Starwood Takeover,” Commercial Mortgage Alert, May 5, 2017.

[iii] Cases 2020-006200-CC-26 and 2020-006201-CC-26, Miami-Dade County, filed Apr 2, 2020.

[iv]https://www.knowyouroptions.com/rentersresourcefinder, Kings Colony Apartments, 8981 SW 142 Avenue, Miami, FL 33186

[v] https://www.miamidade.gov/global/initiatives/coronavirus/emergency-orders.page

[vi] Case 35-2020-CC-001830, Lake County, FL, filed Apr 2, 2020.

[vii]https://myhome.freddiemac.com/renting/lookup.html, Spring Harbor Apartments, 2500 Spring Harbor Circle, Mount Dora, FL 32757

[viii] Cases 2020-CC-003991-XXXX and 2020-CC-003989-XXXX, Duval County, FL, Filed Mar 30, 2020.

[ix]https://myhome.freddiemac.com/renting/lookup.html, Grande Court Apartments, 7610 Blanding Blvd, Jacksonville, FL 32244.

[x] Cases 2020-CC-003991-XXXX and 2020-CC-003989-XXXX, Duval County, FL, Filed Mar 30, 2020.

[xi]https://www.knowyouroptions.com/rentersresourcefinder, Griffin Apartments, 3234 N Scottsdale Rd, Scottsdale, AZ 85251.

[xii] Case CC2020-055320, Maricopa County, AZ, filed Mar 18, 2020.

[xiii]“Are young people to blame as COVID cases surge in Florida and Miami? DeSantis says yes,” Miami Herald, Jun 28, 2020.

[xiv]“Arizona reports 3,858 new coronavirus cases, 9 more deaths,” KTAR News, Jun 28, 2020.

[xv] Case 362020CC001973A001CH, Lee County, FL, filed May 14, 2020.

[xvi]https://myhome.freddiemac.com/renting/lookup.html, Westwood Apartments, 3721 Metro Parkeway, Fort Meyers, FL 33916

[xvii] Case 362020CC001973A001CH, Lee County, FL, filed May 14, 2020.

[xviii] Case CC2020-093284, Maricopa County, AZ, filed Jun 15, 2020.

[xix] Case 50-2020-CC-003715-XXXX-SB, Palm Beach County, FL, filed Mar 24, 2020.

[xx]https://www.knowyouroptions.com/rentersresourcefinder, The Cove at Boynton Beach Apartments, 100 Newlake Dr, Boynton Beach, FL 33426.

[xxi] Case 50-2020-CC-003715-XXXX-SB, Palm Beach County, FL, filed Mar 24, 2020.