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I am a section 8 landlord who has had very few negative issues but I am in a horrible battle right now: the Housing authority said it just discovered that my tenant turned off her utilities 6 to 7 months ago and Housing recouped 7 months of back rent (over $8K!) from one of my other accounts due to this!!! This would bankrupt many landlords. I did use a property mgt company. We had no notice of any issues and under the Housing contracts it was the tenant's responsibility to keep utilities on, not mine. I would love any advice. Housing is refusing to even meet with me on this matter. Is there a hearing/appeal or grievance procedure? can I sue the Housing Authority in small claims court? do I need to provide that "pre suit" notice that often is required when suing a govt entity? This is a real nightmare! Housing was not paying on behalf of this tenant at any other location during this 7 month timeframe, only mine, but is stating that the tenant must not have been living there and is refusing to reinstate this 7 months of rent that Housing recouped. I am an absentee owner with a management company, who says everything seemed OK -- rent was paid, yard kept neat, no complaints, last inspection passed with no issue, so how were we supposed to know of any issues?! Crazy and this is exactly why most landlords don't do Section 8. A large chunk of my business is with this same Housing authority (with no issues till now) so I am hesitant to sue but I feel that I must under these circumstances. Any advice is appreciated!
I can almost guarantee that you will lose any lawsuit against the housing authority. It's very likely immune to lawsuits and if not, probably has rules and procedures in place that will be upheld by a court and will be found to not have done anything wrong.
However, for over $8k, you would be wise to hire an attorney if you are going to sue. Going it without one would be like taking a rubber knife to a gunfight. You'll be the one on the ground bleeding. And, yes, you probably do have to file a notice of claim under the Tort Claims Act and wait until the claim is denied before you can sue.
I don't know what else to tell you.
When I had my rentals I used to tell people I had to be Section 8 to take Section 8. Nobody understood but it made me laugh.
You are learning why experienced landlords do not accept Section 8. You are also learning why experienced landlords pay the utility bills with the money from Section 8, and do not let the tenants pay.
You will lose. Your place was uninhabitable while the utilities were off.
Sue the management company. You will have a better chance.
The Housing Authority is abusing you. If a tenant wants to move, the first thing that they have to do is notify the Housing Authority and request a moving packet. Clearly, this family never did that - they just quietly disappeared. The Housing Authority had no right to do this to you. You have a contract with the tenant, and with them, and they have both broken that contract. But unfortunately, you will NEVER win a lawsuit against the housing authority. Better to go in and speak with them (but they're refusing). We have had better luck in dealing with them by having an in-person relationship with the administrators at the housing authority in our area, not an easy thing to achieve, considering that they make it extremely difficult to meet with them. And even then, we sometimes have trouble.
But, did they "recoup" the money by failing to make payment on several other contracts? If this only just happened, how many tenants' accounts did they not pay this month? Then those contracts are in default, and you can get their attention and cooperation really quickly by immediately filing evictions on those tenants for non-payment of rent. When you file an eviction, you also have to notify the Housing Authority. So sending all the affected tenants a Notice to Quit for non-payment of rent, and sending copies to the Housing Authority, would get their attention very, very quickly. That might get them to negotiate with you. Of course, you risk losing all your sec 8 contracts. Is there no possibility in your area of renting your units to tenants who don't have sec 8?
This is a very good warning to LLs who have Sec 8 tenants. The Housing Authorities can behave in a very arbitrary manner, and when they do, the LL will never win. It's very risky to have Sec 8 as a big proportion of your business. You get into a dispute with the Housing Authority, they can just drop you from all of your contracts, and you STILL have to evict the tenants, because they don't have the means or inclination to move, whether the Housing Authority is paying you or not.
You are learning why experienced landlords do not accept Section 8. You are also learning why experienced landlords pay the utility bills with the money from Section 8, and do not let the tenants pay.
You will lose. Your place was uninhabitable while the utilities were off.
Lots of Sec 8 contracts are for places where the tenant is responsible for the utilities. It wasn't the LL's responsibility to pay for the utilities - it was the tenant's. We have had tenants who have had their utilities off temporarily, who are Sec 8, and the Housing Authority didn't terminate the contract for this reason. Sometimes it would take the tenant three months in the summer to get the gas back on, and Housing Authority didn't terminate.
If the tenant was moving, it was the tenant's responsibility to notify both the LL and the Housing Authority. Clearly, they didn't do this, so how was anyone to know?
Still, I agree that the LL will lose in court. It's not worth the money to pay a lawyer for this, and he'll lose anyway, because the judge will rule in favor of the Housing Authority every single time, even if they blatantly breach multiple contracts, which they have done.
He is better off filing Notice to Quit against the tenants from the other units that the Housing Authority failed to pay rent on, for the simple, irrefutable cause of non-payment of rent. THAT, the judge will evict them for. He'll say that it doesn't matter what reason the Housing Authority had for not paying the LL. He'll say that the Housing Authority had other means of resolving this issue. But if the rent was not paid, he will have to allow the evictions. Of course, it won't get to that. The Housing Authority will pay up, and not let these other families be evicted. But they are very likely to then terminate LL's contracts with Housing Authority.
Had the tenant moved out 6-7 months ago, or was the tenant still living there?
It's possible to sift through Section 8 applicants and find a good one, but good section 8 tenant, bad section 8 tenant, they all come with the same beaurocratic housing authority.
A good example of why so many landlords will not accept section 8 tenants.
I've had issues where rent abatement was threatened... tenant owned the stove and had the utility turn off two of the pilots... documented in writing by the utility company and signed by the tenant.
Housing told me I had 72 hours to provide a working stove or face abatement... Utility could not speak with me since not in my name... crazy how quickly things get out of hand.
Was able to get it resolved but what a waste of time.
Another time I had a tenant give notice to move... her new place in another city was not ready so she held over... Housing continued payments as she was still in my rental.
Well... she started the new HAP contract while still in my home... had to give back two months rent and the best Housing Could Offer was Sue my former tenant...
How would I know when or if she started renting in a different city??? All I know is she was still in my home and I was getting paid...
This is why I no longer accept new Section 8...
Had another tenant give written notice of moving and confirmed by Housing... tenant decided not to move but Housing terminated the contract... the contract was 88% of the rent due...
The possibility for problems increases exponetially the more parties are involved...
City Data is not a forum for legal advice but I suspect your only remedy is with your former tenant...
Your insurance might cover this, or you might be able to take a loan for the short term.
That being said, you hired someone to manage for you, and they failed to do their job. Property management companies also have insurance. I would advise you to hire a lawyer who specializes in this (some will do this without pay until they win and then they get part of the settlement). Sue the property management company (that's why they have insurance) and then talk to your lawyer about suing the local PHA. Yes they can be sued! They are not HUD and HUD does not protect them - they are structured as independent agencies although HUD gives them guidelines that must be followed. This is true as of 2020; I didn't check the date of this thread. They must give you the money back, there is no doubt about that. Meantime you can protect yourself with a short-term loan.
And no, not all section 8 tenants are bad people. Some ended up there because a spouse died, or they became disabled and could no longer work at a job that paid enough to afford today's rent. They are as varied as any other group of people, and as with that, you hear about the bad ones. No one talks about the good people because there's no story to tell.
With section 8 they will pay as much as anyone else, and the PHA is supposed to be the guarantee that you recieve what you are owed. If your renter is still there, talk to them and find out what happened. Maybe they were afraid to say they lost their job, or any number of things. They don't want to lose their voucher or their home! They probably went into this in good faith as well.
I used to own two lovely homes. When my husband died they had to be sold. It can happen quickly and one can find themselves on the ”other side”. I have rented to people on the program and they were the same grab-bag as everyone else. Do the background checks, credit checks, large deposit ($2000 or $3000 is not uncommon). Screen them the same as you would anyone else. Hold them responsible as you would anyone else. I'm sorry this happened to you, but you can recoup your money. Please don't let it turn you against an entire, diverse group of people.
Best of luck to you in the future!
A lot depends on your local office.
But this is one of the many problems people dont here about. I would say you are out of luck. You did sign a HUD agreement that said in some words, you had to follow HUD rules, they would only pay if the tenant was living there and followed the rules.
Bottom line is sec 8 is risky. For a number of reasons. Just depends if you get lucky or not.
Only other thing could add. On the others you have and on the next renewal date. Ask for a increase to cover monthly inspections. That you now need to do in order to protect yourself. Instead of relying on luck. Would be interesting what they say.
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