Multifamily Horror Story: Section 8 Abatement

[Ryan Daigle]

Thought you all would appreciate a dose of reality from the trenches of a multifamily operator - Section 8 abatement.

If you have Section 8 tenants at your property you have to be aware that there are three parties involved in the relationship (you, the landlord, the tenant, and HUD). There are certain situations, such as repair requests going ignored, where the tenant can report you to HUD and they will withhold paying rent. This is called abatement and can be an unwelcome surprise if it happens to you.

We recently had this happen to us not because we were being negligent in our landlord duties, but because there were outstanding maintenance requests to the previous landlord that caused HUD to stop paying until it got resolved. This information didn't transfer to us with the change of ownership so the first we knew of it was when we didn't get paid by HUD.

There are a lot of moving pieces when you're responsible for the living arrangements of your tenants, but even more so when there's another party involved that acts on their behalf. We caught this particular issue quickly and closed the gap with HUD to ensure it doesn't happen in the future so it's all good. Just something to be aware of when you're dealing with government programs and other third parties!

Do you have any abatement horror stories?