Transitioning from Section 8

[Matt Watson]

I am currently thinking of putting an offer on a triplex in the Seattle area. Two of the units are occupied and the other is vacant. The occupied units are both section 8 tenants with leases that do not auto-renew. This would be my first rental and not sure I would want to continue down the S8 route once the current tenants leases expire. Should I anticipate difficulties making this transition even if the current leases do not auto-renew?

Thanks!

[Greg Bishop]

@Matt Watson Be careful when you talk about whether you want to accept Section 8 vouchers from tenants. It's illegal to discriminate and not accept Section 8. In fact, the purpose of the Section 8 program is to provide renters a level playing field on which to qualify on an income basis for housing. There is no such thing as a "Section 8 property". All properties are eligible for renters with Section 8 vouchers to apply to. In fact, now that Seattle has passed the "1st qualified applicant" law, you are now obligated to offer the home to rent to the first qualified applicant for your rental.

What this means is that you cannot remove a tenant solely on the premise that they are using the Section 8 program to subsidize their payment. That's the purpose of the program. It helps the tenant qualify on an income basis for the property. It also means that you cannot deny selection of an applicant for having a Section 8 voucher. In fact, the tenant does not need to tell you they are using a Section 8 voucher until they submit an application and you are verifying income on your application.

If there are other reasons to vacate a tenant, then as long as you provide the appropriate notice and reasons you are fine, such as remodeling units, etc. If you raise the rents and the tenant can no longer afford the unit because their voucher will not cover the difference, that is another reason a tenant might move. But, if you do that simply to force a tenant to move, you are opening up your potential to being sued. If the tenants are actively violating any terms of their current leases or agreements, that's a valid approach to managing the tenant and potentially replacing the tenant. But eviction is neither fun nor cheap. Be respectful of the tenants and mindful of your approach as a landlord and you will be more successful.

In my experience as a landlord that has had at least one Section 8 tenant for 16 years, the best way approach is to have your defined list of qualifications for applicants documented and be vigilant about qualifying your applicants prior to renting. Do your due diligence! It is much more costly and difficult to remove a tenant than to find the right tenants. If you have defined criteria for applicant qualifications that do not discriminate or violate any local, state or federal laws but still serve your needs for finding quality tenants, that is the best method for protecting yourself. Document, document, document....

If you buy this property, you will inherit the tenants in place. How you replace the tenants respectfully and legally, Section 8 or not, is the real question. Stick to that mindset.