Can I Deny a section 8 Applicant From applying to my rental home?

Question

Is it legal to say "Sorry, We do not accept section 8"

Patricia Steiner · Answer

If your property is in DC, it won't be legal:

"In October (2017), a D.C. Superior Court judge ruled that temporary housing vouchers are, in fact, protected by the city’s prohibition on source of income discrimination and that it is illegal to discriminate against potential tenants with such short-term subsidies." (Source:
https://equalrightscenter.org/source-of-income-voucher-denials/)

In general:" Section 8 Discrimination. If your city or state prohibits this type of discrimination, you cannot reject all Section 8 applicants outright. You cannot advertise "No Section 8 Accepted" or "Section 8 Do Not Apply." However, this does not mean you are required to accept every prospective tenant with a Section 8 voucher."My recommendation for my clients (which I practice as well) is to offer an application to anyone requesting one; do not try to talk them out of applying which could be deemed discriminatory too.  Always welcome everyone to apply.  Then choose the best qualified candidate.  Make sure you have your criteria documented (length of employment, past tenant references, income to rent multiplier, credit history/score, etc) - and let that rule in and out candidates.

Thanks for raising an important topic for all investors.

Section 8 DiscriminationIf your city or state prohibits this type of discrimination, you cannot reject all Section 8 applicants outright. You cannot advertise "No Section 8 Accepted" or "Section 8 Do Not Apply." However, this does not mean you are required to accept every prospective tenant with a Section 8 voucher.

Charlie MacPherson · Answer

@Charlie Moore As the others have said, you really need to study fair housing laws in the location where the rental property s located.

Here in Mass, source of income (including Section 8) is a protected class.  If you discriminate against any protected class here, the housing court will eat you alive.  There will be a smoking crater where your business last stood if you get this wrong.

Bryan Devitt · Answer

@Charlie Moore if you don't want them then make it so your unit doesn't pass their inspections. In MA they have ridiculous standards and find nitpicking crap just to justify their jobs of inspecting. Some people I know accept it and jump through the hoops though because they can charge much more than they normally can so it is worth the risk

Russell Brazil · Answer

If the property is in DC, no you can not. Source of income is a protected class in DC.

John Thedford · Answer

I am not set up to accept Section 8 and have no intention of doing so. The government is enough of a PITA without voluntarily signing up for more.

Daryl Luc · Answer

I'm not in DC, but after looking into Section 8 some time ago, I walked away because: The inspection to be approved as an available property PRECEEDED having any tenant from the program.  This inspection wasn't free, was annual afterwards and was a H.U.D program.  All of that equaled extra cost and implied vacancy during the approval period.  If re-inspection turned up a deficiency, then cash flow suffered until the remedy was approved.  I get calls all the time from people who are in the program and I've never shown a property to any of them.  I don't have to since I'm not in the program.  There were other reasons for me to walk...all involved me getting the return on time and money I require, but, and this should be stressed, it's a Federal program and could have been modified to your benefit since I examined it.  I seriously doubt that, but it is possible since there are clearly a lot of investors making a good go of it.  I so know one landlord who finds buying trailers in trailer home parks and renting those out makes him more money than he ever saw from "8" tenants. Consider your alternatives.

Patricia Steiner · Answer

@Tony Gunter

Correct...you don't have to select a tenant because they're Section 8.  You simply cannot refuse to let them make application because they receive assistance.

Bottom line:  They can apply, you don't have to select them.

For all of us, the best thing we can do is not to make it an issue...if you do Section 8 housing, the Housing Authority knows who you are and they will refer prospective tenants to you.  If you don't participate in Section 8, don't advertise that...just allow all interested parties to apply, screen all using your normal criteria to avoid any possibility of a discrimination claim on any grounds, and select your strongest tenant.  Even those owners who participate in Section 8 have the right to select their tenant based on their selection criteria.

So, again, just focus on marketing the property.  Don't restrict anyone from making application (another reason for having tenants pay the screening fee!).  Then select your strongest tenant.  Retain documentation showing the selection criteria.

Steve Vaughan · Answer

No need to blatantly say you are against a certain thing.  That's what will hang you up wherever you are.

Having written screening criteria that applies to everybody with a standard income requirement will probably take care of this.  As will standard credit score minimums, etc usually.

I've had good experiences with section 8.  Why so against it? Blind fear or actual facts and experience?

Tony Gunter · Answer

@Patricia Steiner

@Russell Brazil

Question for the DC folks. You may be obligated to accept Section 8 applicants, but your not obligated to select them as your tenant, correct? Landlords still have the prerogative over who they deem to be the most qualified and best fit, barring discrimination of course, correct? Some of this can be mitigated by your advertising and showing methods ( think taking applications at the same time such as only at the open house for example).

Second, are there consequences if the property will not pass Section 8 inspections? Failing can be something as simple as a couple of cracked receptacle covers. Not hard to fail your property if you wanted to fail. Does this bring in the city for code violations etc?

Third, what if the applicant can’t afford the rent even with their voucher? The voucher holder can’t contribute more than 30% of their income. They can’t pay the difference themselves over that level. They are prohibited from doing so. Still obligated to take an application from a voucher holder? I’ve seen that circumstance before personally. The housing authority had the “market rent” lower than what the market really was in the area for a high quality property. The result was unused vouchers for the county because the slum lord homes in the area had no chance of passing the Section 8 inspections.

Unusually nothing is completely black or white.

Can I Deny a section 8 Applicant From applying to my rental home?

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