In This Issue

• Eviction – Waiver by Acceptance of Rent
• HUD Is Not Required to Make Subsidy Payments When a Tenant Fails to Recertify Income
• Credit History Results in Denial of Public Housing

Eviction – Waiver by Acceptance of Rent

Lawrence F.
Feheley

It has been a long-standing principle that a landlord can lose the right to evict a tenant by continuing to accept rent from the tenant after a breach of the lease. This principle applies four-square to PHAs.

In Cuyahoga Metropolitan Housing Authority v. Hairston, 124 Ohio Misc. 1 (Cuy. Mun. 2003), police discovered drugs in a tenant's unit. However, the Authority continued to accept the tenant's rental payments for the next seven months, at which point it served a notice of termination of the lease.

The Authority argued that it would offend public policy to allow the offending tenant to remain a resident. The public policy relied upon by the Authority was the federal "One Strike You're Out" policy, along with other state and local drug statutes. The Court did not agree. The Court observed that the federal regulations only require that the lease provide that the PHA "may" evict for criminal drug activity, which the Court interpreted to be permissive rather than mandatory. Therefore, the Court reasoned, the PHA had discretion whether or not to evict a tenant for drug activity. Since the eviction was discretionary, the right could be waived. Quite the contrary, the Court ruled that it would violate public policy to allow a landlord to accept rent for several months, without putting the tenant on notice that the landlord felt the lease had been breached, and then belatedly commence an action for eviction.

Having determined that the PHA could waive the breach of the lease, the Court applied the established rule that a landlord waives the right to evict a tenant for breach of the lease if, after becoming aware of the breach, the landlord acts inconsistently by continuing to accept rent.

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HUD Is Not Required to Make Subsidy Payments When a Tenant Fails to Recertify Income

A federal district court in Georgia recently ruled that HUD has no obligation to make Section 8 subsidy payments when a tenant fails to recertify his income.

The ruling came as a result of an interesting procedural twist. In this case, the Section 8 landlord filed an action to evict the tenant because she failed to recertify her income. The court ruled that the tenant owed the landlord over $2,000, which was the market value of her unpaid rent. In addition, the court ruled that if the tenant appealed, she would also have to pay the full value of her monthly rent, which was $735 per month. The tenant then argued that she should only have to pay $109 per month, which was the tenant's share of the subsidized rent. HUD was added as a party to the suit when the tenant made the claim because, if successful, HUD would have to pay the subsidy to the landlord.

The federal court ruled that nothing in the HAP contract requires HUD to make assistance payments when a tenant fails or refuses to recertify his income. 5th Bedford Pines Apts., Ltd. v. Brandon, 2003 U.S. Dist. Lexis 8601 (N.D. Ga. 2003).

[Source: Housing and Development Reporter, 6/9/03, pg. 376]

By the same token, a landlord's delay in seeking recertification can affect its rights. In an Ohio case, Amherst Village Mgmt. v. Vestal, 2000 Ohio App. Lexis 4981 (Wood Co. 2000), the tenant in Section 8 housing paid rent based upon her income and the income of her boyfriend, who lived in the unit with her. The tenant then advised the landlord that her boyfriend was moving out of the unit at the end of the month (for which the rent had already been paid). When the landlord later sought to evict the tenant for nonpayment of the full rent, the court denied the eviction. The court held that by not recertifying the tenant's rent upon learning of the change in the household, the landlord violated HUD Regulations. Since there was no determination of the date that the boyfriend vacated, or the new rental amount, the eviction was improper.

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Credit History Results in Denial of Public Housing

In this case, the PHA required all applicants for housing to meet minimum standards, set forth in its Admissions Policy, which included requirements for financial responsibility and responsible conduct. The applicant's history showed that (a) he owed money to a former private landlord for property damage when he left a prior apartment, and (b) he had several outstanding legal judgments against him. However, his recent tenant history had been acceptable.

The PHA held a full hearing and then determined that the applicant would not be admitted to housing because of his adverse rental and credit history. The applicant sued in the Minnesota state court.

The court ruled that the PHA's reliance on credit and rental history was permissible, even though it did not involve other public housing. The court observed that "past behavior is an indicator of future behavior." Okabue v. Metropolitan Council HRA, 2003 Minn. App. Lexis 619 (Minn. App. 2003).

[Source: Housing and Development Reporter, 6/9/03, pg. 380]

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