Posted over 1 year ago 4 Reasons Landlords won't rent through Section 8 Owning a rental property today presents many challenges; one must learn how to screen for the best tenants without breaking federal law; avoid being sued over rejecting Emotional Support Animals; or simply maintaining properties while maintaining a positive cash flow-and more-have lead many a landlord to greener investment pastures. And then there is Section 8. While Section 8 does provide financial assistance to those who can not afford to pay for their own housing, many landlords are simply finding it too troublesome-in this overly heated rental economy-to bother with and are avoiding using Section 8 for filling vacancies. The Section 8 program presents its own set of challenges to landlords, leading many property investors-landlords-to avoid the program altogether. I am offering four issues we have encountered using the Section 8 program.A. Inspection Insanity.Prior to renting a property through the Section 8 program, a landlord must show proof that the real estate taxes and municipal utilities are paid up. Landlords also must complete and submit the Section 8 Voucher to the case worker, and then submit to a unit inspection.During the inspection, the property is evaluated to ensure it meets code requirements: electrical issues such as GFCIs and grounding is checked, plumbing is checked to ensure flow is sufficient and there are no drainage issues, and safety issues-like handrails and fire safety items-are inspected. The inspector will also ensure there is no peeling paint, as lead-based paint is a major issue in many older properties. Once the inspection is completed-and any corrections required are made-and the paperwork is completed, the Section 8 program will approve the unit and pay the landlord, and the tenant can move in.That is where Section 8 program support ends; if the tenant begins to violate the lease-a popular choice is to invite family and friends to move into a Section 8 unit-the landlord will receive no assistance from the Section 8 caseworker in helping the tenant ‘remember’ the rules. We have had a caseworker tells us that ‘Section 8 is a funding source; if you have a problem with a tenant you need to evict them.’ Many landlords are capable of dealing with tenants that violate lease terms, and often these issues can be corrected, but on occasion the easiest resolution is to simply not renew the contract. At the end of the year, the landlord must inform Section 8 the contract will not be renewed and the tenant-if they want to continue having a Section 8 Voucher-must move. And this is where the insanity comes into play. When the contract ends, Section 8 conducts no inspection of the unit to ensure the tenant has left the property how they received it. For a landlord, this can be the worst of rental scenarios; a tenant can get up and leave with no concern whatsoever for the condition of the property. We have had Section 8 tenants leave piles of trash, furniture-including those old ‘monster’ TVs-and filthy apartments, while Section 8 simply provides the tenant a Voucher for their next location. Compliments of a Section 8 tenant Compliments of a Section 8 tenant Having a tenant get another Section 8 Voucher while leaving your place a trash dump makes participating in the Section 8 program far less appealing. B. To evict or not evict: that is the question.As is probably clear, we have had to evict a tenant or two over the years, and some of those evictions have been Section 8 tenants. In Pennsylvania, where we live, evicting a Section 8 tenant requires the landlord to file for possession at the local magistrate’s court. Winning an eviction case against a Section 8 tenant can result in the tenant being kicked out of the Section 8 program for five years: that means no Voucher for FIVE YEARS! It would seem that this fact would provide for a powerful deterrent to tenants who don’t follow the rules: getting kicked out of the Section 8 program for five years may make it impossible for some of these folks to pay for any housing. It would seem….A little more than a year ago, we rented to a young lady with a baby less than a year old. This young women was moving into her own place for the first time, so learning how to follow the rules of a lease and the rules of Section 8 may have been a bit daunting.As with all new tenants, I provided her with a Move-In Checklist: identify anything that is not working properly and we will get right on it. While we were conducting the walk-through with her, we found sound safety locks broken off one of our Window World windows. I made a note, and made the call to Window World to get the locks replaced. Within a few weeks, Window World responded, and we agreed to meet the technician at the property so he could replace the locks. The tenant had told us she would be on vacation in Florida: yes, you read that correctly, the Section 8 tenant was on vacation in Florida. We entered the unit, and immediately discovered a young man sleeping on the couch: the tenant had violated her lease in allowing someone to stay in her unit while she was out of town. Our lease specifically requires that tenants not permit anyone be in the unit at any time unless the tenant is present (non-tenants can’t be expected to know or follow the lease). So, upon getting this young man out, we gave the tenant a written warning, reminding her of her obligation to follow the lease, reminding her that she may not permit guests in the unit unless she is there.Two weeks later, when the Window World technician returned to make a second repair (we found it during his first visit) we again met at the apartment and proceeded to enter and complete the repair. (If you are wondering, we reserve the right to enter the unit anytime between 9AM and 7PM any day without advance notice: we wrote it this way because our experience suggests if you tell a tenant you are coming-and they are breaking the rules-they will fix the issue before you arrive.) And to our surprise, another young man was in the unit without the tenant. Immediately we called the tenant and let her know we had no choice but to proceed to evict her for repeatedly breaking the lease.And that is when the fun began. Upon finding out that she was going to be evicted, the tenant called her Section 8 caseworker with the news. Apparently she was quite upset, and the case worker called us soon after, telling us of how the tenant was crying, asking for another chance, asking for us to reconsider. After a discussion that lasted about ten seconds, our response was a firm ‘no’ to the case worker: the tenant must move out, and we would be proceeding to the magistrate’s office to file for possession. Before we hung up, the caseworker implore us to not go to the magistrate: “let me talk to her, I’ll get her out, and she won’t lose her Voucher that way” was what the caseworker told us. Really? The tenant breaks the lease-twice-and the caseworker is going to work to help her keep her Voucher? Is this really the type of tenant the Section 8 program wants? Was the next landlord even told of the issues we had with the tenant? While I do understand that she was young, and this was her first rental, she did understand the rules, yet chose to break them. Twice. And what happened to the idea ‘Section 8 is a funding source; if you have a problem with a tenant you need to evict them?’ Needless to say, the tenant got a brand new Voucher, and we got left cleaning up her mess-because, as you might have guessed, she left a mess for us.C. A Section 8 background check may bounce.Our local Section 8 office has the local police department conduct background checks for Section 8 tenants. To be honest, I still do not know what-on a background report-would prevent the Section 8 program from eliminating someone from the Section 8 program.For years, we attended the annual Section 8 training and were told that the police were conducting the background checks. Because of this, we did not complete background checks on our Section 8 tenants, assuming these were being completed adequately by the police, and additionally-and naively-assumed that the Section 8 program would not be giving Vouchers to people with legal or civil issues. Well, you know what they say about the word ‘assume.’What we discovered is that while the police department does conduct a background check for each Section 8 participant, many of these prospects have extensive issues, on both the civil and criminal sides. And Section 8 does not provide the background report to the landlord, so a landlord may unwittingly-as we did numerous times-end up renting to Section 8 participants that would not otherwise meet solid rental criteria.We now conduct our own background checks-even for Section 8 tenants-and a stringent review of each tenant’s legal history. You might be surprised to find Section 8 tenants with multiple Landlord/Tenant judgments; you will be shocked when you review the criminal history of some Section 8 tenants, wondering how it is that a HUD program could give a housing Voucher-paid for with U.S. tax dollars-to someone with multiple convictions and even felonies.If Section 8 is going to conduct background checks on its participants, those should be complete reports including all civil (evictions) and criminal (convictions) history. The background checks should be nationwide checks, ensuring records from all states are included. And the background report should be included in the Voucher booklet a Section 8 tenant gives to a landlord. Many landlords have a Zero-tolerance policy when it comes to renting to tenants who have evictions: evictions speak as loudly to a landlord as anything. It says this tenant has a history of not paying rent on time or following rules, either of which are of primary concern to a landlord. I do believe that if landlords were provided a more complete background report on prospective Section 8 tenants-in fact, if the rules about who receives a Section 8 Voucher were tightened by the Section 8 program itself-then the Section 8 program would receive a warm welcome from many landlords who simply refuse to rent through the program today. D. No skin in the game.While the Section 8 program provides assistance to help tenants pay the rent, it does not assist with the paying of a Security Deposit, and this can cause delays for the tenant in finding housing. The primary reason most Section 8 participants are using the Section 8 program is their lack of funds: how then can anyone expect they would have the funds for the Security Deposit? In the county where we live, and rent our properties, tenants without the funds to pay a Security Deposit must either borrow from family and friends, or go through a challenging process that begin at the welfare office and ends at the Community Action Program. The CAP helps many low-income tenants-yes, even Section 8 tenants-with the funds they need to cover a Security Deposit.There are two instances when CAP can’t help a tenant: when CAP is out of funds, or when the tenant is moving from one government-sponsored housing property to a Section 8 unit. Moving from one program to another is known as ‘double-dipping,’ and CAP can not provide funds to tenants leaving a government-run housing project for the Section 8 program.One real issue that arises from Section 8 paying the rent and CAP helping with the Security Deposit is that the tenant bears no financial responsibility for the unit: they have no “skin in the game.” Because there is no financial investment on the part of the tenant, often there is also a loss of accountability on the part of the tenant. Since they bear no risk of financial loss, many tenants fail to value the property that others have made available to them. Our experience has been less than good in these situations: those tenants that have nothing to commit to the unit have nothing to lose, and often-I should say usually-leave the unit in a shambles when they move out. This needs to change: first, the Section 8 program should conduct a Move-Out inspection as I already mentioned. Secondly, if the tenant is getting financial assistance from a group like CAP, it should be a loan not a grant: this ensures a financial stake in the unit for the tenant. It requires them to pay back the loan over 12 months with the understanding that if they do not they will not get further help from that program in the future. Another benefit of paying back the loan is that will actually help the tenant improve their credit report.The Section 8 program provides vital assistance to families in need of housing: with a few minor changes, more landlords may be willing to participate.