Section 8 not honoring original agreement

[Nick James]

Hey BP,

I recently renovated a 3 bedroom unit in my East Oakland Duplex and put it up for rent. I decided to accept section 8 applications and ended up selecting a single mom who lives with her 12 year old daughter. She was already living in a 3 bedroom home with a 3 bedroom section 8 voucher at the time she applied to live in my unit. We signed all the necessary forms provided by section 8, went through the inspection and my new renter was given a new 3 bedroom voucher and the agreed upon rent was $2900 a month. I still have the paper that was given to me from the HUD inspector. From there we signed a lease agreement and my tenant moved in on July 25th, 2017.

Today I received a call from section 8 saying they cannot give my tenant a 3 bedroom voucher. They screwed up and should have never given her a 3 bedroom voucher. She used to have 3 kids living with her but now she only has the one so they want to offer her a 2 bedroom voucher that maxes out around $2200 a month. It's a $700 a month difference and rents cant be increased for 12 months. I can accept the new offer and eat the loss, or I can deny it and my tenant would technically need to start looking for another place. However, I do have a third option.

My new renter is partially disabled and submitted an application for "Reasonable Accommodation" to section 8. Reasonable accommodation means section 8 can break certain rules if a need is there. If for example my tenant needs a live in aid, or has a bunch of medical equipment that needs to be placed somewhere, they may approve the request to have a third bedroom. Problem is I would have to deny the offer for the 2 bedroom pay, wait for the decision on the reasonable accommodation, and then resubmit the forms in order to get $2900. If I go this route, I will not receive any money from section 8 until the new application is turned in and it can take 1-6 months for the reasonable accommodation to be approved. Thats a long time for my tenant to be living there basically rent free. There is also the possibility that the request for the third bedroom is denied. I would have waited all that time for nothing and lost a lot of money. This is my first time dealing with section 8 and I really just want them to honor the original agreement. I hate the thought of evicting the lady since I really like her, she just moved in less than a month ago, and she is disabled. Plus it isn't even her fault. Any advice would be greatly appreciated. Thanks.

[Patti Robertson]

@Nick James - I would chalk this up to a rookie mistake.  Both you and the tenant should have known the criteria that that housing authoirty uses to determine bedroom size.  The tenant did know - no doubt about that. In no housing authority any place in the country will a household of two people ever be given a three bedroom voucher.  In some HAs, these two people would only be eligible for a one bedroom voucher.  One of the screening steps that you need to use with a SEC 8 applicant is to see if the number of people on their application match the bedroom size on their voucher.  Make sure you physically see their voucher, because they will tell you they have a 2-3 bedroom voucher, because if they have a 2, they can live in a 3 but ONLYif it meets the budget for a 2 bedroom voucher holder.  If they have more people than they should, they could be hiding income from SEC 8.  If they have less people, as in this person's case, they have had people move other places and the voucher holder has not reported it, which sounds like is what happened here.  In a rare instance it is possible she reported and someone made a human error of not processing it.  More likely the voucher holder didn't report, even if she is telling you she did.

Personally I would most likely accept the lower rent, but on the condition the tenant agreed to do a mutual lease termination in 60 days.  This will give you both time to minimize your losses.  She can get her paperwork reissued and find a new place.  You can start advertising and find a valid three bedroom voucher holder who works. It will take the tenant way too long to get approved for a live in aid.  It won't be hard for SEC 8 to process it if she actually gets one, but what government entity is going to approve her for that and agree to pay for the aid? That's a shot in the dark that you don't want to wait around for. If it were already in place it may be worth appealing over, but don't rely on the tenant to make this happen, because you have way more to lose than she does.  She knows the system and basically tricked you and put you in the position you are in now. 

Oh - and don't promise the tenant she will get all her deposit back.  The hardest think on our units is the move in and move out.  She has moved in and needs to be accountable for any damage she creates during the 3 or so months she lived there.  Take whatever allowance your state allows to do a property move out inspection.  She should easily be able to get charity or social services assistance in this situation, especially if her case worker is willing to say her situation is due to a SEC 8 administrative error.   This way if you do have deposit money to refund, the tenant will have an added benefit because her new deposit will have already been paid. This will be a good selling point when pitching the plan to the tenant and a good incentive for her to leave your place in perfect condition.