Previous owner collected the Section 8 rent

[Ranviir Hussein]

I have recently bought a house with a section 8 tenant in place. I have not done my due diligences as the seller was supposed to notify the housing agency of the change of ownership of the property. I have closed the house on the 27th of the month, which meant I was supposed to be getting paid for the rent of the upcoming month. But the seller circumvent and went to the tenant and collected the portion that was due from the tenant on the 31st of the month. When I went on the first of the month to collect the rent, she told me that she has already paid the rent to the landlord. I tried to get a hold of the seller but to no avail. I waited for the other portion of the rent from the government and nothing came. I went to the tenant and ask for her caseworker contact information. Once I got the information, I contacted the caseworker and that is when she explained to me that at the closing the seller was supposed to notify them and I was supposed be filling out a paperwork with them. Since I was too late to contact them, the first and the second month has already been processed and she will put on hold for the upcoming month till I complete the paperwork with them. I was wondering if there is any recourse for me to take to collect back the money that he took or should I just forget this and take it as learning lesson.  Thank you an advance!

[Greg M.]

If I understand it correctly, basically you became owner of the house on (let's say) March 27 and on March 31 the previous owner collected the April rent from the tenant and they also received the April S8 payment. 

First thing is make sure that you weren't credited these amounts during escrow. There is the possibility that the seller anticipated receiving these payments due to the timing of the closing date and the escrow company credited them to you.

If not, and if the seller refuses to return the money, that is fraud. File a police report. Depending on the area, the police will do nothing as it is a civil matter all the way up to arresting the seller and charging them with a felony. At the very least it can scare the seller. You will also be able to use it in court to help strengthen your case.