CMHA Section 8 Refuse to Pay Back Rent During Inspection

Cleveland, Ohio
General Landlording & Rental Properties
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CMHA Section 8 Refuse to Pay Back Rent During Inspection

Joshua Thang
Accountant · Los Angeles · Member since 2022 · 17 posts · 13 votes

Hi Everyone,

Does anyone have experience or frustration with CMHA not paying back rent during the inspection period? In my scenario, Sec 8 came out to do their inspection on the property around end of March but it didn't pass inspection after several tries until end of June. I paid my property manager in April for the repairs that needed to be done on the property as soon as I knew about it. Now that inspection is cleared, CMHA refuses to pay back rent for May and June. Some of the reasons why it got delayed was because tenant got covid and it had to be delayed for another several weeks. Is there anyway I can recoup back rent I didn't get during the inspection period?? My PM said it's not possible.....even though everybody says Sec 8 provides guaranteed rents...

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Scott Mac
Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
3y

Too bad the mortgage doesn't work that way.

4Reply
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  • Rob Gillespie
    Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
    3y

    Hi Joshua, 

    Welcome to Cleveland. It has been my market for over 26 years and unfortunately CMHA is not super easy to deal with. We have never had back rent paid during inspection, it is just part of the game. 

    Feel free to reach out to me anytime for Cleveland help. I am pretty connected there. 

    0Reply
  • Kim Meredith HamptonBusiness Member
    Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
    3y

    Joshua,

    We have dealt with section 8 on behalf of one of our hedge funds, and when the hedge fund took their sweet time making repairs, Section 8 never paid for that back rent. Sorry, it’s just the way it works

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  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    3y
    Quote from @Joshua Thang:

    Hi Everyone,

    ... it didn't pass inspection after several tries ... ... Now that inspection is cleared, CMHA refuses to pay back rent for May and June.... ...tenant got covid and it had to be delayed for another several weeks....


    But they inspected during the Covid period...Brave employees.

    Perhaps they are no longer with us (really).

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    3y
    Quote from @Joshua Thang:

    Hi Everyone,

    Does anyone have experience or frustration with CMHA not paying back rent during the inspection period? In my scenario, Sec 8 came out to do their inspection on the property around end of March but it didn't pass inspection after several tries until end of June. I paid my property manager in April for the repairs that needed to be done on the property as soon as I knew about it. Now that inspection is cleared, CMHA refuses to pay back rent for May and June. Some of the reasons why it got delayed was because tenant got covid and it had to be delayed for another several weeks. Is there anyway I can recoup back rent I didn't get during the inspection period?? My PM said it's not possible.....even though everybody says Sec 8 provides guaranteed rents...


    No, they aren't going to pay the back rent.

    1Reply
  • Alex Rehman
    Property Manager · Cleveland, OH · Member since 2023 · 96 posts · 74 votes
    3y

    When CMHA is placing a tenant and the inspection fails then, CMHA doesn't pay until the inspection is passed & Tenant is placed. But if the inspection is an annual inspection and after the tenant has lived there for 1 year. CMHA PAYS even if the inspection fails for 3 consecutive times or almost 2 months then when they cancel the contract on the bases of failed inspection they stop paying.

    Joshua, check your inbox.

    0Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    3y

    Ok so I read this and think why take section 8 if they won't do a pre-inspection before occupancy?

    @Joshua Thang  @Kim Meredith Hampton  what kind of things are they failing for?

    I am curious as I get more section 8 requests now and one of my concerns is that the building is 1800s so some things are just different. For instance the checklist I found lists overhead lights which I don't have but the caseworker calling says that's not required. I realize your area may be different but this seems like a big hit to take if the inspection items are not safety. 

    0Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    3y

    @Joshua Thang
    If the property fails an inspection they will abate rent till it passes. So in short no you can't get the rent back. 

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  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    3y

    Too bad the mortgage doesn't work that way.

    4Reply
  • Richard F.
    Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
    3y
    Quote from @Joshua Thang:

    Hi Everyone,

    Sec 8 came out to do their inspection on the property around end of March but it didn't pass inspection after several tries until end of June. Now that inspection is cleared, CMHA refuses to pay back rent for May and June. My PM said it's not possible.....even though everybody says Sec 8 provides guaranteed rents...

    Aloha,

    "Guaranteed rent" is a fallacy. Here is the applicable section of the standard HAP contract:

    3. Maintenance, Utilities, and Other Services
    a. The owner must maintain the contract unit and premises
    in accordance with the housing quality standards (HQS).
    b. The owner must provide all utilities needed to comply
    with the HQS.
    c. If the owner does not maintain the contract unit in
    accordance with the HQS, or fails to provide all utilities
    needed to comply with the HQS, the PHA may exercise
    any available remedies. PHA remedies for such breach
    include recovery of overpayments, suspension of
    housing assistance payments, abatement or other
    reduction of housing assistance payments, termination
    of housing assistance payments, and termination of the
    HAP contract.     The PHA may not exercise such
    remedies against the owner because of an HQS breach
    for which the family is responsible, and that is not
    caused by the owner.
    d. The PHA shall not make any housing assistance pay-
    ments if the contract unit does not meet the HQS, unless
    the owner corrects the defect within the period specified
    by the PHA and the PHA verifies the correction.     If a
    defect is life threatening, the owner must correct the
    defect within no more than 24 hours. For other defects,
    the owner must correct the defect within the period
    specified by the PHA.
    e. The PHA may inspect the contract unit and premises at
    such times as the PHA determines necessary, to ensure
    that the unit is in accordance with the HQS.
    f. The PHA must notify the owner of any HQS defects
    shown by the inspection.
    g. The owner must provide all housing services as agreed
    to in the lease

    You agreed to the terms...

    0Reply
  • Joshua Thang
    OP
    Accountant · Los Angeles · Member since 2022 · 17 posts · 13 votes
    3y

    Thanks everyone for the input. In this scenario this was an inherited sec 8 tenant when I purchased the property. Based on what I've been told by my property manager, repairs were done in mid may but it took forever to reschedule the final inspection due to tenant having covid and reasons beyond our control and each time inspection was rescheduled, it was spaced out for at least another 2 weeks...

    0Reply
  • Joshua Thang
    OP
    Accountant · Los Angeles · Member since 2022 · 17 posts · 13 votes
    3y

    @Colleen F. I was getting failed for having unused hot water tank, windows nailed shut, loose hinges, defected paint areas, etc.

    1Reply
  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    3y

    @Joshua Thang so you did repairs and the delays were due to inspections and the tenant. I would think that since this is an existing tenant it should be paid because otherwise well the tenant and PHA could just keep delaying inspections. 

    Appreciate the info on what they cite. I see where it could be an issue in occuppied units.

    1Reply
  • Joshua Thang
    OP
    Accountant · Los Angeles · Member since 2022 · 17 posts · 13 votes
    3y

    @Colleen F. - My thoughts exactly! I paid for the repairs immediately but the 3rd inspection based on what I've been told, the inspector didn't show up then rescheduled again, tenant had covid, then rescheduled again. I will be having a call with my PM and CMHA because something's not adding up.

    0Reply
  • James Mc Ree
    Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 934 votes
    3y

    The trigger for CMHA to start paying is the passed inspection. They don't know if you fixed the issues the day before the inspection or months before. They go with the inspection date. It's unfortunate COVID got in the way. That impacted a lot of landlords much worse than this. Unfortunately, it's not a reason to auto-pass.

    Instead of taking CMHA to task, you might want to do so with your property manager. Ask why they are allowing unused hot water tanks, windows nailed shut, surfaces in need of painting, etc. I think CMHA will tell you they are following the contract. Your PM might not be able to say the same.

    1Reply
  • Tim Miller
    Rental Property Investor · Laurel, MD · Member since 2016 · 378 posts · 382 votes
    3y

    Just another reason among many others to not deal with section 8. 

    3Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    3y

    S8 inspection could have been setup with tenant using video chat to inspect.

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  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Joshua Thang:

    Hi Everyone,

    Does anyone have experience or frustration with CMHA not paying back rent during the inspection period? In my scenario, Sec 8 came out to do their inspection on the property around end of March but it didn't pass inspection after several tries until end of June. I paid my property manager in April for the repairs that needed to be done on the property as soon as I knew about it. Now that inspection is cleared, CMHA refuses to pay back rent for May and June. Some of the reasons why it got delayed was because tenant got covid and it had to be delayed for another several weeks. Is there anyway I can recoup back rent I didn't get during the inspection period?? My PM said it's not possible.....even though everybody says Sec 8 provides guaranteed rents...


     CMHA starts paying WHEN IT PASSES, and the tenant gets the keys. They are not going to pay you before the house past inspection. 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Tim Miller:

    Just another reason among many others to not deal with section 8. 


     Incorrect, sect 8 is the best! This poster is misguided. Why would they pay before it past inspections? The property was not " approved " so they will not pay. I have extensive experience with all the programs and would take them vs a cash tenant any day. The pay more and pay like clockwork. 

    All the best  

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Michael Smythe:

    S8 inspection could have been setup with tenant using video chat to inspect.


     Incorrect, and terrible idea. The GC is the best person to have there. If there is something small, they can fix it while the inspector is there. It also allows for you and your team to build a relationship with the inspectors. IF there is something minor, they will allow you to send a photo of it completed and pass it.  

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Joshua Thang:

    @Colleen F. - My thoughts exactly! I paid for the repairs immediately but the 3rd inspection based on what I've been told, the inspector didn't show up then rescheduled again, tenant had covid, then rescheduled again. I will be having a call with my PM and CMHA because something's not adding up.


     3rd inspection that's the red flag you should be concerned with, your PM not CMHA. It should have passed on the 2nd , 99% fail the 1st time. You concerned about 1 month, don't stress move on there is ZERO you can do about it 

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Joshua Thang:

    @Colleen F. I was getting failed for having unused hot water tank, windows nailed shut, loose hinges, defected paint areas, etc.


     TERRIBLE PM co, there's your issue. We typically fail as we forgot a closet rod or a door lock, very minor items, NOT windows nailed shut that is just complete incompetency. I would fire your PM immediately

    All the best 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Richard F.:
    Quote from @Joshua Thang:

    Hi Everyone,

    Sec 8 came out to do their inspection on the property around end of March but it didn't pass inspection after several tries until end of June. Now that inspection is cleared, CMHA refuses to pay back rent for May and June. My PM said it's not possible.....even though everybody says Sec 8 provides guaranteed rents...

    Aloha,

    "Guaranteed rent" is a fallacy. Here is the applicable section of the standard HAP contract:

    3. Maintenance, Utilities, and Other Services
    a. The owner must maintain the contract unit and premises
    in accordance with the housing quality standards (HQS).
    b. The owner must provide all utilities needed to comply
    with the HQS.
    c. If the owner does not maintain the contract unit in
    accordance with the HQS, or fails to provide all utilities
    needed to comply with the HQS, the PHA may exercise
    any available remedies. PHA remedies for such breach
    include recovery of overpayments, suspension of
    housing assistance payments, abatement or other
    reduction of housing assistance payments, termination
    of housing assistance payments, and termination of the
    HAP contract.     The PHA may not exercise such
    remedies against the owner because of an HQS breach
    for which the family is responsible, and that is not
    caused by the owner.
    d. The PHA shall not make any housing assistance pay-
    ments if the contract unit does not meet the HQS, unless
    the owner corrects the defect within the period specified
    by the PHA and the PHA verifies the correction.     If a
    defect is life threatening, the owner must correct the
    defect within no more than 24 hours. For other defects,
    the owner must correct the defect within the period
    specified by the PHA.
    e. The PHA may inspect the contract unit and premises at
    such times as the PHA determines necessary, to ensure
    that the unit is in accordance with the HQS.
    f. The PHA must notify the owner of any HQS defects
    shown by the inspection.
    g. The owner must provide all housing services as agreed
    to in the lease

    You agreed to the terms...


     Not a fallacy at all. Make the house 100% move in ready, keep up with repairs but if done correctly there will be minimal moving forward. They pay on the 1st like clockwork. I have had about 1k various govt programs tenants and would not change a thing. They pay more and each month  

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Patrick Drury:

    @Joshua Thang
    If the property fails an inspection they will abate rent till it passes. So in short no you can't get the rent back. 


     Not entirely correct. They will abate if you do not repair the items in the 30 days they give you. If you cannot do the repairs in 30 days well then you should not be in the rental business. :) 

    2Reply
  • Tim Miller
    Rental Property Investor · Laurel, MD · Member since 2016 · 378 posts · 382 votes
    2y
    Quote from @Bob S.:
    Quote from @Tim Miller:

    Just another reason among many others to not deal with section 8. 


     Incorrect, sect 8 is the best! This poster is misguided. Why would they pay before it past inspections? The property was not " approved " so they will not pay. I have extensive experience with all the programs and would take them vs a cash tenant any day. The pay more and pay like clockwork. 

    All the best  

    Well Bob I'm glad they seem to pay you more. But we will never allow it in our units. Here is a list of other reasons that we will never agree to.

    Here are just a few items in the Housing Assistance Payments Contract that keeps us from accepting section 8


    1. The owner must give the PHA any information on rents charged by owner for other unit.

    2. PHA shall not be obligated to pay any late payment if HUD determines that late payment by PHA is beyond the PHA's control.

    3. HUD shall have full & free access to contract unit, premises, & all
    accounts & other records of the owner that are relevant to HAP
    Contract.

    4. The owner must grant such access to computerized or
    other electronic records & to any computers, facilities & must
    provide any information or assistance needed to access the records.

    5. PHA failure to pay the owner is not a violation of the lease. The owner may not terminate the tenancy for nonpayment.

    6. Must give 90 days notice to vacate

    As you can see there are a number of reason not to take section 8. We will
    not allow them full access to any of our computers, smart phones,
    office and so on.

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Tim Miller:
    Quote from @Bob S.:
    Quote from @Tim Miller:

    Just another reason among many others to not deal with section 8. 


     Incorrect, sect 8 is the best! This poster is misguided. Why would they pay before it past inspections? The property was not " approved " so they will not pay. I have extensive experience with all the programs and would take them vs a cash tenant any day. The pay more and pay like clockwork. 

    All the best  

    Well Bob I'm glad they seem to pay you more. But we will never allow it in our units. Here is a list of other reasons that we will never agree to.

    Here are just a few items in the Housing Assistance Payments Contract that keeps us from accepting section 8


    1. The owner must give the PHA any information on rents charged by owner for other unit.

    2. PHA shall not be obligated to pay any late payment if HUD determines that late payment by PHA is beyond the PHA's control.

    3. HUD shall have full & free access to contract unit, premises, & all
    accounts & other records of the owner that are relevant to HAP
    Contract.

    4. The owner must grant such access to computerized or
    other electronic records & to any computers, facilities & must
    provide any information or assistance needed to access the records.

    5. PHA failure to pay the owner is not a violation of the lease. The owner may not terminate the tenancy for nonpayment.

    6. Must give 90 days notice to vacate

    As you can see there are a number of reason not to take section 8. We will
    not allow them full access to any of our computers, smart phones,
    office and so on.


     We have been dealing with them for 10 years. Thousand  of move in and move outs . Never an issue. I will take at least five more section 8 or  other government programs this week


    all the best 

    0Reply
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