The DOJ Is About to Pay Landlords $1 Billion for COVID Eviction Losses — the Deadline to Join Is This September

The Government Banned You From Evicting Non-Paying Tenants for a Year. Now It Might Have to Pay You Back.

If you owned a rental property between September 2020 and August 2021, there's a real chance the federal government owes you money — not in some abstract "landlords deserve better" sense, but in an actual, quantifiable, check-in-the-mail sense.

The Department of Justice is currently negotiating a settlement that could pay out roughly $1 billion — landlords are asking for as much as $1.5 billion — to property owners who lost rental income during the CDC's COVID-era eviction moratorium. The legal theory: the government effectively "took" landlords' property by stripping their right to remove non-paying tenants, and the Fifth Amendment says the government has to pay for takings. This isn't a fringe theory or a class-action shakedown that's going nowhere. It's already won on appeal, it's in active settlement talks right now, and there's a hard deadline — early September 2026 — for anyone who wants in.

Most landlords who lived through 2020-2021 have no idea this case exists, let alone that they might still be able to join it. That's the story.

The Fifth Amendment Case Nobody Told You About

The mechanics go back to March 2020, when the CARES Act imposed the first federal eviction pause. When that expired, the CDC stepped in with its own moratorium that ran from September 2020 through August 2021 — nearly a full year during which landlords in every state were legally barred from removing tenants who simply stopped paying rent, provided those tenants signed a declaration of hardship. In August 2021, the Supreme Court finally ruled the CDC never had the legal authority to impose the ban in the first place, in Alabama Association of Realtors v. HHS.

That ruling ended the moratorium, but it didn't undo the losses. More than 1,500 property owners — a number that's since grown to roughly 1,800 and counting — filed suit in the Court of Federal Claims, arguing the moratorium violated the Takings Clause of the Fifth Amendment. The argument is narrower and stronger than it sounds: the core of property ownership is the right to exclude people from your property, and the moratorium stripped landlords of that right entirely for non-paying tenants, for the better part of a year, with no compensation.

The case lost at the trial level in 2022. It didn't die there. In August 2024, the Federal Circuit Court of Appeals reversed, finding the government could be held liable. The DOJ asked for a rehearing; the appeals court said no in June 2025. Plaintiffs filed a third amended complaint on April 10, 2026 — a sign the plaintiff pool is still actively growing. Now both sides are in settlement negotiations, working out how much the government will pay and how individual landlords will document their claims.

Attorney Creighton Magid, who represents the plaintiffs, put the argument plainly: "When the government imposes this type of moratorium, the financial burden should be borne by the government." One of the named plaintiffs, property owner Matthew Haines, described the actual experience of it: "It was terrifying. We knew almost immediately that we were going to a massive deficit in cash flow."

The Numbers Behind the Settlement

Here's what's actually on the table, and why the math matters for anyone deciding whether to look into this:

• ~$1 billion is the working settlement figure both sides are negotiating around, according to reporting on the talks.
• $1.5 billion is the ceiling landlords are pushing for — still a fraction of what plaintiffs' attorneys say the industry actually lost.
• $57 billion is the industry-wide loss figure landlords' lawyers cite for the full moratorium period plus the eviction backlog that followed it.
• 1,800+ landlords are currently party to the suit, ranging from owners who lost a few thousand dollars on a single unit to one plaintiff who lost more than $14.5 million.
• Early September 2026 is when the statute of limitations closes for new claims tied to this action — meaning the window to get your losses counted is measured in weeks, not years.
• Plaintiffs' lawyers are hoping for a resolution by the end of 2026, though a signed settlement doesn't necessarily mean checks go out immediately — actual payment will likely depend on landlords submitting documented losses.

That last point is the one investors keep missing: this isn't a lump sum getting divided evenly. Payouts are expected to scale with documented, provable losses — meaning a landlord who kept clean rent ledgers and eviction-filing records from 2020-2021 is in a completely different position than one who didn't.

Common Mistakes Investors Make Here

• Assuming the window already closed. The moratorium ended in 2021, so most landlords mentally filed this under "old news" years ago. The claim window is closing in September 2026 — not 2021.
• Not knowing state and local moratoriums stack separately. California, New York, and several other states ran their own eviction bans that extended well beyond the federal one. Those are a different legal track entirely and aren't covered by this settlement — but they represent additional, separate losses worth documenting if you operated in one of those states.
• Throwing away 2020-2021 rent ledgers. If you've since sold the property, changed property management software, or just cleaned out old files, you may have destroyed the exact records — signed leases, delinquency logs, any eviction filings you attempted and had rejected or delayed — that would substantiate a claim.
• Assuming this is a big-multifamily-owner thing. The named plaintiffs include small individual owners, not just institutional landlords. Scale doesn't disqualify you; documentation does.

How to Actually Join — and Who to Contact

The case is Darby Development Company, Inc. v. United States, No. 1:21-cv-01621, in the U.S. Court of Federal Claims. If you want to read the ruling that forced the government to the settlement table, it's the Federal Circuit's August 2024 opinion holding that the CDC moratorium could be a compensable physical taking — a ruling the court declined to rehear in June 2025, and one the government ultimately chose not to take to the Supreme Court.

Two things to understand about getting in:

• This is not a class action. Nobody is going to mail you a claim form, and qualifying landlords aren't included automatically. It's a direct, multi-plaintiff lawsuit — the complaint has been amended repeatedly (most recently April 10, 2026) precisely to add new plaintiffs. Participating means affirmatively signing on, or filing your own takings claim in the Court of Federal Claims before the six-year statute of limitations on claims against the federal government (28 U.S.C. § 2501) starts closing in early September 2026 — six years after the CDC order took effect.
• The path in runs through a lawyer. The plaintiffs are represented by Creighton "Chip" Magid, partner-in-charge of Dorsey & Whitney LLP's Washington, D.C. office — reachable at (202) 442-3555 — alongside co-counsel John McDermott. Contacting plaintiffs' counsel is the most direct way to find out whether you can still be added. Alternatively, take your records to your own real estate attorney and ask specifically about "a Fifth Amendment takings claim under Darby v. United States" — that exact phrase will get you a sharper, faster answer than "the COVID eviction thing."

Either way, come with documentation. Counsel will want to see the leases in effect between September 2020 and August 2021, any CDC hardship declarations your tenants submitted, rent rolls and delinquency ledgers covering the moratorium window, and records of any eviction you attempted that was blocked or delayed. Landlords already in the case are being asked to submit exactly this — actual rent rolls and internal records of how unpaid rent was tracked — to substantiate their share of any settlement.

(This is reporting, not legal advice. Whether you qualify — and whether joining Darby or filing separately is the better route — is a call only an attorney can make on your specific facts.)

How to Use PropGPT for This

"Pull the rent roll and market-rent comps for [address] for September 2020 through August 2021, and estimate the gap between contracted rent and what was actually collected during that period." This reconstructs your actual cash-flow loss on a specific property even if your own records from that period are incomplete, using historical comp data to fill the gaps.

"Generate a documentation checklist for a Fifth Amendment takings claim tied to the 2020-2021 CDC eviction moratorium, covering lease agreements, delinquency records, and any eviction filings attempted during that window." Turns the vague idea of "gathering paperwork" into a concrete list you can actually work through property by property.

"List every property I owned as of September 2020, cross-referenced against whether the state or county had its own eviction moratorium that extended past August 2021." Flags properties that may carry a second, separate claim on top of the federal case — the state-level moratorium losses most landlords never think to document.

"Model my total portfolio-wide rental income shortfall for the CDC moratorium period, assuming [X]% of tenants stopped paying and comparing it against pre-pandemic rent collection rates." Gives you a defensible top-line loss estimate across an entire portfolio in minutes, instead of property-by-property guesswork.

"Draft a one-page loss summary for [address] I can hand to an attorney evaluating whether I qualify to join the eviction moratorium takings litigation." Produces something attorney-ready, so a consultation call turns into an actual eligibility assessment instead of a fact-finding session you're paying by the hour for.

The Bottom Line

Most real estate news is about markets that might move. This is different — it's a legal process already in motion, with real dollars being negotiated right now, and a closing window that most landlords don't know exists. You don't need to predict anything or time a market to benefit from this one. You just need to have owned rental property during a specific 11-month stretch five years ago, and be able to show what it cost you.

If that's you, the move this week isn't complicated: pull whatever records you still have from September 2020 through August 2021, use PropGPT to fill in the gaps and quantify the loss, and get in front of a real estate attorney — or plaintiffs' counsel directly (contact details above) — before the door closes in September. Waiting for the settlement to finalize before you look into it isn't a neutral choice — it's the choice that gets you left out.