Section 8 headache?

9 Replies

Greetings! i closed on a short sale 4 plex in Stockton in January. All units vacant but for one section 8 tenant who lost her vouchur before close of escrow. Seller had let her stay by collecting her portion of the rent knowing fully well that the property will be out of his hand shortly. We did not get any leases on the tenant. Sure enough tenant does not pay a dime and of course does not qualify to pay full rent herself. So, 3 months on, we have a non paying tenant. In the absence of any documentation, how do we get her out? I offered her cash for keys but no luck. I am told her adult kids have a criminal history. The attorney calls me and indicates that we should give them a 3 day notice and in the absence of any documentation, we should ask them to pay 3 months of their portion of the rent. Of course, we have no portion of what their portion is, except that during one of the conversation, we found out that her portion used to be ~$203. He believes that the tenant pay not be able to come up with 3 months of 203= 609. If she does come through, on May 1st, she will have to come up with May's portion of $203. At that time, we also give her a 30 or 60 day notice on intent to increase the rent to market rate of 600.
So, in short, this will be a long drawn process. Questions
1) Will Section 8 share any historical info on her, prior to me taking over ownership
2) How do I get her out? Anyone else ever dealt with a similar issue? Is this the best approach?

I have a few other section 8 tenants and they are model tenants. But of course, there has to be a bad apple in the basket!!

Jak, the title of your thread is "sec 8 headache". Doesn't sound like you have an issue with Sec 8 or a sec 8 tenant! By law section 8 cannot give you information on the squatter. File eviction today for non payment of rent. I would have filed eviction within 72 hours of taking ownership of the property.

Sanjiv,

You are right. that ws a typo..i meant lost section 8 headache...i guess posting at 3 am is not a good idea....i learnt a lesson of investing in non local properties, u r at the mercy of property management firms. don't u need a lease for eviction? the attorney wants to file based on the undocumented 203. My concern is if the tenant comes thru with $203 per mo, i do not want to sign a lease at that rent....

Maybe your housing authority is different but the one I deal with has a lease between myself and the HA, not the tenant. The portion of rent that the tenant pays gets paid to the HA and they pay me in full at the beginning of the month. So if the "tenant" lost her housing voucher, then she effectively no longer has a lease. I wouldn't try to collect any rent from her as your acceptance of that could constitute an agreement between the two of you in the judge's eyes. Serve the 3 Day and start to end the headache. Anything else is only going to make it worse for you.

Jak
File for eviction with the county court in the precinct of the 4plex. When you bought it all leases came with it. Even if you do not have the paper from the seller which you should get from the seller. Squatters are harder to get out legally than renters according to my lawyer, at least in Texas, so proceed that way.

Unfortunately, we did not get any lease from the seller, because it was a short sale transaction...
Brian: you are right about the lease with HA, except this was the previous owner :-(
But when you provide the 3 day notice, doesn't that essentially give them 3 days notice to collect past due rent? My challenge is that the attorney is not going for the full amount but only the tenant portion ($203)..we do not have documentation on either amounts, so because of the implied agreement, shouldn't we go for $600 in the 3 day notice?

I would make it for the full amount. The rent on the unit after all was $600, not the $203 that she was paying. If the HA terminated her voucher, that also terminates the lease.

I would ask my attorney if I should also file eviction against the Housing Authority, if the arrangement is what Brian has posted. I file eviction against all parties involved with the lease, and against all occupants (both those that are known and those that are unknown). Again, the idea is to gain possession of the property.

You file a 3-day for the amount due on the unit. The tenant is responsible for the rent on her unit if she lost her S-8 eligibility. That's her problem. It's her responsibility to pay in full or quit. And it's your job to follow through on the eviction if she doesn't pay. If you do not want her as a tenant even if she does pay, you need to send her termination of tenancy at the same time. If she's been there longer than a year, she gets 60 days notice in CA. But she is still required to pay or quit even if she is served termination. Any good eviction service can take care of all this for $500.00.

So are you working on getting the other 3 units filled so you can get cash flow??

I had another person contact me from another state on this topic.

My response will be the same for you. DO NOT take on these properties with existing tenants in place if you don't want them there.

If you can't have a condition of the building being vacant before closing then factor in lost rents and possible damage to the property in your purchase price and exit strategy.

One benefit to having someone there even with lost rent is you keep a tenant living there and the building from sustaining huge damage if it was totally vacant.

I know some people that will let the tenant stay there for just enough time to rehab and fill the others.Eviction takes awhile so you should have started long before now.

The voucher doesn't mean anything to you as the lease was with the prior owner.You would have to get with the case worker and the supervisor possibly.If an annual inspection has not been performed you might have massive repairs to get it up to passing.

If the place is not habitable and section 8 deems it not fit for living they will tell the section 8 tenant to move or lose their voucher.Also if the property has been unstable or the area section 8 might take the property or building off it's approved section 8 voucher list.

At this point you just have a holdover tenant that you should have tried to get out long ago.You have to look at tenancy laws in your area.

It is a common mistake I see for investors to think that section 8 works the same way in a different area or that the landlord laws are close or the same to where they live or have been investing currently.This is far from the truth.

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