Section 8 tenant question

[Account Closed]

Hi experts!

I recently purchased multiplex in Ohio. One of unit is occupied with section 8 tenant who is paying lower than a market rent (also lower than current section 8 rent).

I’d like to confirm the following items:

1. Do I need to submit an ownership change form?

2. Current condition of the building and unit needs some repairs and maintenances. If I request a written request (assuming it passed 1 year period), is there any chance that section 8 rent can be decreased because of the unit/building condition?

3. I’ve heard horror stories re section 8 in Ohio area. Should I send a lease termination letter to the tenant since it is currently MtoM and find new tenant?

I am new to all of these and want to hear from others who have more experience.

Thank you!

[Tom Dickerson]

John,

I am a PM in Albuquerque NM so take what I say and vet it with your local housing authority.

1. Yes you need to notify the HA of the change in ownership so that you receive the rent payments now instead of the previous owner. 

2. Typically section has an annual inspection of the property that you will be notified of. If I were you, I would have your own inspection prior to this date and make any necessary repairs are done prior to the housing inspection. Or if you wait, Housing will send you a report of what needs to be fixed and have a follow up inspection scheduled to make sure all the items on the list are fixed. They have never stopped paying rent or lowered the rent because of repairs needing to be done. Just make sure you get the items addressed prior to the 2nd inspection. 

As far as the rent amount, If you decide to keep the tenant, I would make sure that the rent is at market rent for the area and if it is not, I would send the housing office the notice that you are going to be raising the rent and signing a new 1 year contract. In NM we have to give this notice 90days prior to the renewal to both the tenant and section 8. Check the Ohio rules to verify timing of notice and rent raises. 

3. To answer your last question about dealing with section 8, I have found section 8 great to deal with, it is the tenants that we have had struggles with. So, if this is a good tenant and takes care of the place, do what I just said about raising the rents to market and sign a one year lease. If the tenant is not good, this is the time to get the out and start fresh since it is MTM. 

I hope this was helpful! Good luck and happy investing. You might want to find a good property manger to deal with all of this. If you need a recommendation I can get you one. 

Thank you,

Tom