The Section 8 Program was designed to enable the government to assist low income families with their rent by paying a subsidy directly to the landlord. There are currently about 60 Public Housing Authorities in New Jersey administering Section 8 Housing Vouchers and Certificates for approximately 60,000 households. The rules and regulations of the Program are vast and often complex. In this month’s newsletter, we will discuss some of these rules, as well as the consequences for landlords who participate in the program.
To Accept or Not to Accept
We are still surprised at the number of landlords who claim that they do not accept Section 8 tenants. In 1999, the State Supreme Court ruled that a Landlord may not discriminate against a prospective applicant based on source of income. Under this ruling, Section 8 assistance is deemed to be a source of income. In September 5, 2002, Governor McGreevey signed the Section 8 Anti-Discrimination Bill, which imposes substantial penalties for landlords who refuse to rent to tenants based upon their Section 8 status. Under the law, a landlord who discriminates can be fined up to $10,000 for a first offense and up to $25,000 for a second offense. Notwithstanding this edict, many landlords are not comfortable with the constraints of the Section 8 program, some of which are detailed in this newsletter.
Selection of a Section 8 Tenant
We encourage all landlords to adopt uniform standards for the selection of all prospective tenants. Generally, these standards typically include a credit check and a minimum income requirement. For purposes of screening Section 8 tenants, the latter is very often inappropriate. However, credit-worthiness still remains a valid reason to reject tenants whether they receive a Section 8 subsidy or not. The important thing to remember is that a landlord should not have different standards for accepting a Section 8 tenant than it has for accepting a non-Section 8 tenant.
Late Fees and Legal Fees
Historically, the Section 8 Certificate Program limited a family’s rent to 30% of its annual income. In Atlantic City Housing Authority v. Taylor, the State Supreme Court decided that in light of the apparent restriction on rents, a landlord should not be entitled to evict based on non-payment of other charges such as late fees or legal fees. Following the Taylor decision, the Certificate Program was replaced by the Housing Choice Voucher Program, which limits rents to 40% during the initial year of tenancy, but without restriction thereafter. Despite the change in circumstances, Taylor remains unchallenged. Essentially, this means that a Section 8 tenant can continuously wait until the day of Court to pay all rent arrearages, leaving the landlord no recourse. It should be noted, however, that the landlord may still, sue the Section 8 tenant for unpaid late fees and legal fees in another venue, such as Small Claims Court, but not in Tenancy Court.
Procedure Prior to Trial
The Section 8 Program imposes several requirements on landlords who choose to evict their tenants. Most importantly, a copy of each complaint for eviction must be served upon the appropriate Housing Authority. Failure to comply with this requirement is always a ground for dismissal. Second, the program requires all legal Notices to be hand-delivered to the tenant. Typically, this is done by placing a copy of the notice on or under the tenant’s door. While Courts often overlook this requirement, it is important to be prepared in the event that the tenant raises “improper service” as a defense. Finally, any ground for eviction requiring a 3-day Notice to Quit requires a 30-day Notice under the Section 8 program.
Non-payment of Section 8 Assistance
On occasion, Section 8 fails to pay a landlord. Most often, the lack of payment is due to the failure of the landlord to recertify or to comply with the Program’s requests for repairs. Under the rules of the program, the rented premises is inspected annually. In the event that the premises does not pass inspection, the landlord is given some time to make repairs and request a re-inspection. Section 8 will not make any payments to the landlord until the premises passes inspection. In the event that the damage is caused by the tenant, the landlord has the right to an administrative proceeding to prove that he or she is not responsible for the damage. Usually, however, these problems can be resolved with the caseworker. With regard to the topic of Section 8 payments, it is essential to note that failure of Section 8 to pay its portion is not a valid ground for eviction under the law.