Section 8 ask me to pay back 5 year rent for $44,000

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Section 8 ask me to pay back 5 year rent for $44,000

Jason Yuan
Member since 2019 · 13 posts · 4 votes

5 years ago, i advertised my house for rent for $780. a lady said she has a section vouch for $760, but she can pay the difference of $20 from her pocket. so we signed the lease for $780, but she changed the amount to $760 for the copy sent to section 8. the lease between I and the tenant and section 8 was signed by my realtor for $760 because I was not in the States. I was not aware and was not informed that it is not allowed to collect that $20 from the tenant. after 5 years, Section 8 found out about this $20 this month and made a decisions as follows:
1, i have to return all money i received from section 8 for last 5 years for a total of $46,000;2, i have to return all money i received from the tenant for last 5 years for a total of $7,600;3, i am not allowed to rent my house to section 8 tenant for next 5 years.
I really do not think it is fair. How could I gave my house to section 8 tenant for 5 years for free, and in the meantime, I had to pay the property tax, maintenance and management. Should I find an attorney to fight their decision?

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Marc Winter
Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
6y

Section 8 and their portable vouchers--they make it simple enough to read the terms, conditions, and responsibilities of both the landlord and the tenant participating in the program.

The time for an attorney and review of what you were getting into should have been before you committed what is actually a big NO-NO (as per section 8 guidelines).

I say this with no love for Sec 8, and I am sorry to hear of your troubles; however, with almost unlimited resources and with the Gubment on their side, you should consider yourself lucky they do not prosecute you for fraud.

Get yourself a good attorney!

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  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    6y

    First Why were you “ not in the states” ? 
    second heck yeah I’d find a lawyer ! That’s a lot of money !

    1Reply
  • Marc Winter
    Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
    6y

    Section 8 and their portable vouchers--they make it simple enough to read the terms, conditions, and responsibilities of both the landlord and the tenant participating in the program.

    The time for an attorney and review of what you were getting into should have been before you committed what is actually a big NO-NO (as per section 8 guidelines).

    I say this with no love for Sec 8, and I am sorry to hear of your troubles; however, with almost unlimited resources and with the Gubment on their side, you should consider yourself lucky they do not prosecute you for fraud.

    Get yourself a good attorney!

    5Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    6y

    Whoa, this sucks and I empathize with you. To a point.

    I would consult with legal counsel and most likely send a letter of apology, that you did not know, didn't mean harm, had an agent and will return the 7600 to the tenant forthwith. 

    Like @Marc Winter mentions,  the rules are clear. No under the table deals.  You can probably understand why.

    I have had about 20% Sec 8 and VA-HUD tenants for 15 years and like the programs. Once, I exceeded the cap allowed by 6 bucks. They helped me figure it out and we were good. 1 bedroom didnt have a legal window so they took it away in their cap calc.

    Not even $1 can come from the tenants on the side as you now know. It's unfortunate that landlords in the past have abused the system enough for them to demand back all rent paid. For a lousy $20 per month no less. 

    The 1 problem I had with Sec 8 was when a tenant died on the 25th.  The deceased's portion for the following month was already in the works, so they asked for it back. No notice period or nothing. Had he not died until the 1st, I could have kept it they said.  Ok, I'll put that in the lease from now on LOL. No dying late in the month. Weird rule, but overall I like Sec 8👍

    3Reply
  • Jason Yuan
    OP
    Member since 2019 · 13 posts · 4 votes
    6y

    To Dennis: i live in Canada, i am a Canadian citizen, not a US citizen

    0Reply
  • Jason Yuan
    OP
    Member since 2019 · 13 posts · 4 votes
    6y

    i will return the $20 portion and after it is returned, i will ask section 8 to reverse their decision. if they refuse, then i will get an attorney. anybody can recommend a good real estate lawyer?

    1Reply
  • Pat L.
    Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
    6y
    Originally posted by @Jason Yuan:

     anybody can recommend a good real estate lawyer?

    might help if you indicate the state the Sect. 8 debacle occurred. 

    0Reply
  • Jason Yuan
    OP
    Member since 2019 · 13 posts · 4 votes
    6y

    To Pat L: GA

    0Reply
  • Jason Yuan
    OP
    Member since 2019 · 13 posts · 4 votes
    6y

    To Pat L: Thank you very

    much

    1Reply
  • Patrick M.
    Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes
    6y

    @Jason Yuan hire the attorney now. Do not make any admissions or apologies. Do not pay anything.
    Your best thinking landed you in this mess, time to fix it properly.

    1Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    6y

    $20/mo for 5 years is $1,200, not $7,600 ?????

    1Reply
  • Jason Yuan
    OP
    Member since 2019 · 13 posts · 4 votes
    6y

    @Wayne Brooks: it is an error, it should be $2800 because 3% increase each year.

    0Reply
  • Jason Yuan
    OP
    Member since 2019 · 13 posts · 4 votes
    6y

    thank you for pointing it out

    0Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    6y
    We don't do section 8 but reading this thread has not done anything to increase the likelihood of any future moves in that direction.
    I can't imagine that a court would require the return of ALL the rent over that time period. That would be really unfair.
    3Reply
  • Ralph R.
    Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
    6y

    @Dennis M. Why does it matter he was not stateside? I regularly travel outside the USA and keep 16 units rented and self manage a 36 unit self storage facility. RR

    0Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    6y
    Originally posted by @Ralph R.:

    @Dennis M. Why does it matter he was not stateside? I regularly travel outside the USA and keep 16 units rented and self manage a 36 unit self storage facility. RR

    I wasn’t faulting the fella for being outside the country . There are certain instances That I imagine where this could be serious fraud not being a citizen or funneling money to avoid tax etc .. I was just trying to get a full understanding of his situation and why or how this happened . 

    0Reply
  • Ralph R.
    Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
    6y

    @Jason Yuan. Have the Attorney do all the dealings with sec 8. Your interference my inadvertently make it harder for the attorney to defend you. Don’t start down one road only to find there’s another option.

    3Reply
  • Ralph R.
    Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
    6y

    @Dennis M. Gotcha!

    0Reply
  • Ralph R.
    Investor · Bethel, AK · Member since 2013 · 1k+ posts · 852 votes
    6y

    This is why I use a pm that deals regularly with section 8. They know the rules they set it up with sec 8. If they screw it up their erros and omissions Ins is liable. I started my career as an out of state investor. (Alaska). I would never have dreamed of attempting to invest from 3000 miles away. I would be correcting this error as well were I in your boots!! RR

    1Reply
  • Meg K.
    Investor · Rochester, NY · Member since 2013 · 130 posts · 36 votes
    6y

    I do not understand why this happened? www.hud.gov states:

    "A family which receives a housing voucher can select a unit with a rent that is below or above the payment standard. The housing voucher family must pay 30% of its monthly adjusted gross income for rent and utilities, and if the unit rent is greater than the payment standard the family is required to pay the additional amount. By law, whenever a family moves to a new unit where the rent exceeds the payment standard, the family may not pay more than 40 percent of its adjusted monthly income for rent."

    2Reply
  • Kyle J.
    Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
    6y

    I've rented to Section 8 before (and have a Section 8 tenant now), and I really don't see how this could happen. 

    As a landlord/property owner, both you and the tenant sign a lease which has the full rent amount listed on it.  You would have submitted a copy of this to the Housing Authority.  

    Both you and the tenant also sign a Housing Authority form called "Request for Tenancy Approval" which has the full proposed rent amount listed on it.  You would have submitted this form to the Housing Authority too (along with all the other required Housing Authority paperwork).

    Then, at some point, after the Housing Authority reviewed/approved everything, they would have sent you the HAP (Housing Assistance Payment) Contract for your review/approval and, if you agreed, signature.  This contract says how much of the monthly rent amount is payable by the family, and how much is payable by the Housing Authority.  So you should have known if the tenant forged anything at that point, but I don't even see how that's possible since you should have turned in the other aforementioned documents showing the true rent amount.   

    On top of all that, it's been my experience that the Housing Authority does annual reviews of the tenant's income and composition and then sends the owner a letter letting them know if the rent will be changing or staying the same.  I've received one of these letters every year and it's always stated what the total rent is, what the tenant's portion is, and what the Housing Authority's portion is. 

    So again, I just don't see how this could have happened in the first place, and certainly not went on for five years.

    But I guess if it happened as you say it did, I would fight it.  And I certainly wouldn't return all the money the tenant paid.  I have no idea why that would be your first move if they're the ones who put you in this mess, as you claim, by forging the paperwork.  Seems like the opposite of what you should do.

    3Reply
  • Jason Yuan
    OP
    Member since 2019 · 13 posts · 4 votes
    6y

    @Dennis M. we filed our income tax every year.

    0Reply
  • Patti RobertsonBusiness Member
    Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
    6y

    @Jason Yuan - You said your realtor signed the lease on your behalf. Who was identified as the Payee on the RFTA that was submitted to the housing authority? Did payments go directly to you or to your realtor/property manager? Once the signed lease sent to the housing authority they would have returned a Housing Assistance Payments Contract that outlined the rent amount and the terms you were bound to, which includes that you would not receive any "side" rent. In order for an agent to sign on your behalf, the agent has to submit paperwork that shows that they have signing authority for you. Usually that is a property management agreement. Was your agent acting as a property manager or did your agent forge your signature - with or without your permission? You would have received a copy of this contract and if you don't have it, you can google HUD HAP Agreement and see a copy of the terms you would have agreed to.

    You are going to be hard pressed to fight this, in my opinion.  You are lucky if they don’t seek criminal charges, because what you are describing is fraud.  You or someone you gave authority to act on your behalf altered a legal document and then signed a contract with a government agency agreeing to very specific terms, knowing that you were intentionally violating those terms from day one.  

    If I were you I would delete this threat.  You openly admitted to committing fraud against the US Government - even if it was only $20/month.

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    3Reply
  • Jason Yuan
    OP
    Member since 2019 · 13 posts · 4 votes
    6y

    @Ralph R.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    6y
    Originally posted by @Meg K.:

    I do not understand why this happened? www.hud.gov states:

    "A family which receives a housing voucher can select a unit with a rent that is below or above the payment standard. The housing voucher family must pay 30% of its monthly adjusted gross income for rent and utilities, and if the unit rent is greater than the payment standard the family is required to pay the additional amount. By law, whenever a family moves to a new unit where the rent exceeds the payment standard, the family may not pay more than 40 percent of its adjusted monthly income for rent."

    exactly some section 8 have 100% vouchers but the vast majority have to pay something out of their pocket per month. not sure what is going on here..  but being out of country.. I doubt US can do any thing to them other than lien the house.

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    2Reply
  • Jason Yuan
    OP
    Member since 2019 · 13 posts · 4 votes
    6y

    @Kyle J. @Jay Hinrichs: the voucher is for $760 which is the section 8 approved amount, and there is no tenant portion of payment because of her low income I guess. my advertised rent is $780, so the tenant did not want to lose the opportunity and voluntarily offered to pay the difference of $20 from her own pocket without letting section 8 knew. the lease between I and the tenant is for $780, the section 8 contract was for $760 and the copy of the lease between me and the tenant sent to section 8 by tenant was changed by the tenant to $760. section 8 never did a review each year for 5 years and the $760 amount was for 5 years and never changed. 

    0Reply
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