Section 8 tenant is breaking lease and housing is helping her

22 Replies

I am hoping someone will have some experience with HAP contracts and Section 8. I have a tenant who is currently in a lease with me for 3 more months. She advised me that she is leaving at the end of this month and Housing has moved her voucher to a new place.  How in the world can they do that without my agreement to an early termination.  We have a contract with housing and with the tenant for three more months. I have already sent this one to my real estate attorney, just hoping someone else will have had some experience in this matter.

A word of advice for anyone thinking about Section 8 landlording: RUN!

If you have a contract with the housing authority, and they have not exercised a termination within the context of that contract, I would first speak with housing and ask if they would like to pay out the contract over the next three months or in a single lump sum at the end of this month.

If that does not produce the desired result, then you may wish to sit down with your attorney to determine your options and best course of action ... perhaps a letter from the attorney or a trip to small claims court may make sense.

Happy holidays! It is unfortunate as I have come across the same problem over years with Section 8, DSS, and other tenants. The simple answer is to start posting apartment for rent to find a suitable replacement immediately. You can advise your real estate lawyer of showing apartment cost and marketing costs. Hopefully you have security deposit that you can withhold. However, outside this it is going to be hard to get tenant to pay for rest of lease term especially with Section 8 tenant with limit money to go after even if you get a judgment to garnish wages. I changed some of our policies to help avoid and mitigate losses, such as not allowing section 8, nor DSS. Also we require first month rent, last month rent and security. Best of luck and make sure to post apartment to get need tenant into apartment.

Promotion
Sundae
Property Marketplace
Find Professionally Vetted Properties from Motivated Sellers
Eliminate the need to hunt for houses again. We bring your next investment opportunity to you.
Sign Up for Free

1. did u fail an inspection and not repair it and not know about it (resulting in your tenant receiving a voucher to move?)

2. did tenant send you a 60 day move letter and you failed to return it to section 8 claiming the tenant did not have a right to move due to active lease?

before calling the attorney, why not just go down to section 8 and speak with someone?? or dare I say....call them????

Seth- The tenant thought she was going to fail her last inspection because I did not pay for repairs for damages she caused this last time around. At the last minute the repairs were made and she passed.

She told me that housing put her in the moving program because she ' thought' she was going to fail the inspection. When she gave me written notice that she was moving, I called housing and they said if she was in an active lease then she could not move unless I agreed. I assumed that was the end of it. I told her I did not agree to early termination. I did not put it in writing to housing. In the past , housing has the landlord sign the moving package. I never received a moving package from them so I assumed we were fine.  Dumb of me.

I am so frustrated with Section 8. This tenant has caused over $5000 worth of damage, I was counting on 3 more months of rent to absorb some of the cost of the damages that exceed her security deposit.

I agree she is judgement proof. But the Section 8 program is a 3 way contract.. I may have some leverage with the housing authority.

This is the last Section 8 tenant I have. Thankfully. Hard lessons learned with this one- even though I am a very experienced landlord.

I have some experience with one Section 8 tenant in South Florida. What I have found is that the tenant will sometimes say things about the program or conversations they have had with the Section 8 office that aren't quite accurate. Have you talked to someone at Section 8 about it? What did they say to you?

On the same token, the tenant might be giving Section 8 the wrong information. Going to the reps at Section 8 with a good and professional attitude has served me really well. If they see you're not out to take advantage of the tenant but that you just have a legitimate issue with their decision they have been very open to working with me and usually see things my way. 

@Rafael Saldana  has an excellent point. The folks at the PHA probably don't know she has a continuing lease obligation, especially if this is beyond the initial lease term. This isn't something they automatically check when someone wants to move. One of the rules that your tenant signed off on when they received their voucher was that they wouldn't violate the lease, so usually a PHA will back you on something like this. It sounds like you're fed up with the tenant anyway, but no need to take it out on the PHA. 

On a general side note, the folks I know at PHAs are used to people (usually tenants, but also sometimes landlords) coming in loaded for bear, so to speak. When there's an issue, going in and talking face to face and being friendly usually gets you well past the cold, rule bound approach they're forced to take with people coming in with a hot head. 

File this one under "It seemed like a good idea at the time".

I got some answers today when the attorney reviewed the HAP contract.

There is a paragraph in the HAP  contract that states that the HAP payment will not be made if the tenant moves out and then the  HAP contract automatically terminates.

There is also a paragraph that states that if the HAP contract terminates then the lease terminates.

The attorney said forget about fighting it and move on.

Just in case someone will say " Why didn't you read the HAP contract before??" I have to say the HAP contract was not provided until 30 days after the tenant had taken possession of the unit. Today, my attorney recommends against doing business with the "Raleigh Housing Authority". He said my story is not uncommon and until enough landlords stop doing business them they will not change.

Another observation- I did speak to the landlord of this tenant prior to her moving into my place. The landlord had nothing negative to say, only that their mother had passed away and they were ceasing participation in the Section 8 program. I wonder now if they were being totally honest with me. The tenant has obviously found a new landlord to accept her. I did not receive a screening phone call.  If I had, I would not have given her a positive reference.

Properly screening tenants can sometimes prevent future headaches.

Originally posted by @Account Closed :

I am hoping someone will have some experience with HAP contracts and Section 8. I have a tenant who is currently in a lease with me for 3 more months. She advised me that she is leaving at the end of this month and Housing has moved her voucher to a new place.  How in the world can they do that without my agreement to an early termination.  We have a contract with housing and with the tenant for three more months. I have already sent this one to my real estate attorney, just hoping someone else will have had some experience in this matter.

A word of advice for anyone thinking about Section 8 landlording: RUN!

Read your Sec 8 agreement, they are not leasing the property, the tenant does, they agreed to send the voucher amounts to you so long as the tenant remains and in good standing with the HUD requirements. If your tenant breaks a lease, with or without cause, it's the tenant's money, not yours. Your recourse is against the tenant, not Sec 8 or the PHA. I doubt they are "helping" the tenant, the tenant is entitled to the voucher and may direct it to pay rents of any approved dwelling. I assume your unit is in compliance too.

See your attorney.

Realize, talking to some clerk at a PHA, you may well be speaking to a tenant in that PHA, employment preferences, so they may be speaking out of the PHA but they don't speak for the PHA, the only thing that counts are written replies by proper authority, usually the executive director or department head as authorized by the board of commissioners. :) 

We had a house we considered doing section 8 on. They told us our "minimum required rent" would be no problem. Got done with the inspection. Had a tenant lined up. Then they told us they would only pay $200.00 a month less than our minimum. Nope. See ya!

When you accept Section 8 you are entering into a very uneven relationship.  If the landlord violates many of the provisions they could be charged with a crime.  If the Agency (the State) changes any terms or fails to live up to the agreement you may be invited to sue them (the ultimate exercise in futility). I believe there are two types of landlords: those who do not accept Section 8 and those who will soon not accept Section 8.

@Account Closed  

Regarding: "Just in case someone will say " Why didn't you read the HAP contract before??" I have to say the HAP contract was not provided until 30 days after the tenant had taken possession of the unit." Your response, to some, may sound like an excuse. Maybe. But I'd say most owners/landlords don't read the entire HAP contract prior to opting in to the Section 8 program. Personally, I didn't read the entire document over a decade ago when my company started with their first S-8 house. We relied on our manager who had experience with HUD, and for the most part our experience was uneventful for almost a decade. That's the good part.

The boilerplate HAP contract is similar across the country. Implementation varies among HAs, but there shouldn't be many surprises. Indeed, the RHA web site "Sample HAP Contract" link points to a PDF form for HUD-52641. See also http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_11755.pdf which is a document anyone who is party to a HAP contract needs to read and understand.

Regarding: "Today, my attorney recommends against doing business with the "Raleigh Housing Authority". He said my story is not uncommon and until enough landlords stop doing business them they will not change."   Your attorney sounds like a smart guy. My company has about 100 S-8 lease-years(*), but we are at about 15% of what we were 2 years ago. I have posted elsewhere on BP what I think about RHA. I'd like to thing it's not the program, per se, it's the local HA implementation. I won't carry on with my bellyaching. The two RHA tenants we have are great and it would be nice for the HA to treat them more like "customers" some day. They could implement changes like Robert McDonald at the VA is doing... but my confidence that the RHA will do this is virtually NIL without wholesale changes to the HA management.

Full disclosure: my company has eliminated multiple properties from the program. This document is a good reason why: http://www.rhaonline.com/SEQUESTRTION-REDUCINGHAPCONTRACTRENT.pdf I am indifferent as to if we stay with the two S-8 properties or not.

(*) lease-year - 1 property leased for 12 months with a S-8 payment under a HAP contract.

Promotion
RentRedi
Smart Tech For The Smart Landlord
The Smart Way To Manage Your Rentals
Enjoy growing your portfolio without paying more for it. Unlimited units & easy-to-use apps.
Get Unlimited Units

I'll back up @Chris Martin  that the Raleigh PHA is pretty notorious for its request to lower rents on its Sec. 8 tenants during sequestration. I can't emphasize enough how awful a move that was in terms of landlord relations, but also how rare it was (to my knowledge, no other area has EVER done something as broad and sweeping to lower rents such as that move). Section 8 in any other area is likely to be a much improved experience, as it is an entirely locally administered federally funded program. 

That said, I'm still confused as to why you haven't discussed this with the PHA. Generally, when I have issues in multi-way partnerships, I attempt to address it with the party before lawyering up, as there's usually a good chance there's a legitimate misunderstanding or lack of information. I still suspect that if the PHA knows she's breaking her lease, they will deny the new lease she's attempting to sign. Or maybe not, it is the but I'd sure ask first. Its cheaper than a lawyer. 

Regarding "That said, I'm still confused as to why you haven't discussed this with the PHA." if that was directed at me, and if that includes the HA we've been talking about, the answer is simple. They are Unapproachable. They don't have customers. Honestly, they don't care. The head guy makes 10X any other HA in the country it's size. More than much larger LA, Chicago, etc. google it. Merry Christmas party to you...

Regarding "When there's an issue, going in and talking face to face and being friendly usually gets you well past the cold, rule bound approach they're forced to take with people coming in with a hot head." A complete fallacy in this area 

I'm just curious about the $5000 worth of damage   Was it all at one time or over the course of the lease?  What did she/he/it do?   That's a hell of a lot of damage to be caused unless they poked holes in the roof or stole the hvac system.  I've seen a lot of damage done to a property such as tearing up flooring, knocking holes in the wall, but very cumulative and had to be fixed upon moveout to makeready for the next tenant. 

You are correct @Chris Martin . Talking to the Raleigh Housing Authority is like talking to a weasel.  My attorney commented that they are public employees but don't act like it.  So for Mr. @Bradley Bogdan  OF COURSE I have attempted to respectfully advise them that the tenant has a current lease. How far did that go? Actually worse. They advised the tenant to complain to Fair Housing. REALLY. And how exactly am I discriminating? I guess by asking to enforce our lease. I believe they are trying to intimidate me so I go away. Which is exactly what the attorney advised me to do.

They have been in the news for many scandals including this instance

Judge Wins

 for taking a voucher. Also for the ridiculous management salaries that are paid by taxpayers.

Raleigh Housing Authority Controversy

Now their fearless leader has announced his 'retirement' amidst a large scandal: Head who Did Magic Announces Retirement

In a city as fine as Raleigh it is a shame that landlords are reluctant to participate in the Section8 program. I believe that most landlords who are willing to accept Vouchers are trying to be a part of the housing crisis solution. Any business person who willingly agrees to the arduous extra inspections and paperwork required by participating in the Section8 program has a good heart for people. I have always been proud of the properties that I had that participated in the program. I know I provided clean safe affordable housing to families in great need. I will have to find another way to serve. Unfortunately, the Raleigh Housing Authority is not a good business partner in my opinion.

@Account Closed ,  I know every housing authority handling section vouchers is different and it is sometimes very frustrating to work with them. I have a few section 8 tenants and my experience with section 8 so far has been generally positive so dont give up yet!

For example, regarding a tenant wanting to move out early, I had that situation a few months ago. The initial 12 month lease had expired and I had not signed a new lease with the tenant. So per my own lease we were  automatically defaulted to a month to month lease with 30 days notice by either party to stop the contract ( I had incorrectly assumed that the section 8 docs represented a new lease). This was my fault for not paying attention.

Tenant gave me 27 days notice. When I called the Housing Authority about it, they agreed with me and did not allow tenant to move until tenant had provided me with a minimum of 30 days notice. Not exactly a similar situation to yours but it shows that it is possible to have contracts enforced with section 8. That was plenty of time for me to find a new tenant at a higher rent. Also, when the annual inspection was done, I failed due to some floor damages caused by the tenant. The inspector noted on his report that the tenant was responsible for those damages, so the tenant needed to make the repairs within 30 days or lose their voucher.

If you fail the annual inspection, you usually only have 30 days to make the repairs and it doesnt matter what the tenant says. But if you fail the re-inspection then they will give a new voucher to the tenant to move! is that what happened in your case?

The key is to know how section 8 works, and have a great working relationship with the case managers.

Also, if you have low income tenants ie section 8, there are programs out there that can help you update your property at no/or minimal cost to you. Usually, the requirement is that you do not sell the property for a certain number of years based on the amount of money you received + keep renting to low income families.

Im currently using such a program to renovate a large duplex I own, which is also a historic home ( expensive all wood - no vinyl- new windows, de-leading, etc...). Very expensive! Both apts have section 8 tenants. THERE ARE DEFINITELY SOME ADVANTAGES TO RENTING TO SECTION 8 TENANTS...

Section 8 it's all a crap shoot. Some local authorities are good and others are horrible.

The case worker assigned for Section 8 can be good or sometimes awful.

Some say the section 8 tenants will keep the place up as to not make waves getting the free rent. I haven't found that to be the case.

In fact I have had tenants say before they do not want to work because then the voucher gets reduced on the amount of paid rent. They said they would be working for free each dollar for dollar earned and then to add insult they would be taxed on their job earnings. So from what they said they get penalized to try and work. The system self defeats itself in a way.

The original poster of this topic it is a good idea to go at least 2 landlords back because the current one will usually say anything to get rid of them. I will not do section 8 again. They are not collectable and cause a lot of damage. Section 8 picks apart the pickiest of things to not pay the money that a regular tenant wouldn't care about.  

Originally posted by @Joel Owens :

Section 8 it's all a crap shoot. Some local authorities are good and others are horrible.

The case worker assigned for Section 8 can be good or sometimes awful.

Some say the section 8 tenants will keep the place up as to not make waves getting the free rent. I haven't found that to be the case.

In fact I have had tenants say before they do not want to work because then the voucher gets reduced on the amount of paid rent. They said they would be working for free each dollar for dollar earned and then to add insult they would be taxed on their job earnings. So from what they said they get penalized to try and work. The system self defeats itself in a way.

The original poster of this topic it is a good idea to go at least 2 landlords back because the current one will usually say anything to get rid of them. I will not do section 8 again. They are not collectable and cause a lot of damage. Section 8 picks apart the pickiest of things to not pay the money that a regular tenant wouldn't care about.  

 I can't debate that there are definitely the full range of PHAs. Ralegh appears to be the worst of any I've heard and has an awful reputation on this forum, there are plenty of others that are a pleasure to work with. Hopefully everyone here makes their Section 8 choice based on their local situation and not entirely on whats true other places. 

I will point out that tenants don't lose assistance dollar for dollar, they lose it roughly one dollar for every three additionally earned, so even if someone was being taxed at 33% (which of course they aren't), you're still making your situation notably better at a rate of 2/1. Not only that, but you can also rent a more expensive place under the Section 8 program than you would otherwise be allowed. Its much like being on Supplemental Security Income or Social Security Disability, you don't trade them back dollar for dollar (though the trade is a less generous 2/1 pre-tax). You can even earn a decent portion before you lose any benefits. 

Account Closed 

Why do you want to keep a tenant, section 8 or otherwise who has done $5,000 worth of damage?  seems them leaving is a good thing?