What is Section-8 and the HAKC? I sum that up in this article!
Like most things the government is overseeing the answer is as convoluted and difficult as figuring out your taxes. While it may not be illegal on a federal level it may be a violation of some statute or regulation in your state or municipality.
New York, for instance has ruled that refusing to accept a section 8 voucher from an existing tenant is somehow discriminatory. I have attached a document below detailing that court battle.
While that ruling appeared to address only existing tenants who later qualify and receive section 8 funding, it left open (at least by my reading) the choice of refusing to rent to section 8 tenants who are applying to rent your property. That said I wouldn't want to be the one facing some liberal New York judge to be the test case for their axe to grind.
By the same token, a California court has held that a landlord may refuse to accept section 8. I will also attach that document below.
In a case with important and lasting implications for landlords, the California Courts of Appeal has found that a landlord may legally refuse to participate in the Section 8 Program.1 This important case interprets the California Fair Employment and Housing Act (“FEHA”), and in particular, California Government Code Section 12955 which prohibits discrimination based upon source of income. The Court of Appeal’s decision ends several years of conflict between tenant advocacy groups and landlords who disputed whether FEHA prohibited a landlord from refusing to accept Section 8 rental assistance payments.
Once again this was decided, as well it should be by a State Court and not a Federal Court! But the fact remains that none of us want to be the bellwether case that makes it to the Supreme Court of the US! Most of these cases are handled outside of a courtroom because of the heavy-handed tactics of HUD and their contractors most of these cases never see the light of day. Most landlords are frightened into submission and settle before it ever become public.
You can read how HUD uses extortion and coercion to entice guilty pleas form their victims in this article, Fair Housing Truths and Myths.
Since our clientele is mostly investing in the Midwest, how do these two extremely liberal state court rulings affect us here in fly-over country? The answer is simple what happens on the coast is usually a harbinger of what is to come to the rest of America.
- Never advertise or state that you do not accept Section-8
- Have a written policy of minimum criteria for rental applicants
- Always state that the home MAY NOT QUALIFY for section-8! Since most housing authorities have inspection requirements there is as yet, no law requiring you to submit to those inspections or make their required repairs.
- If asked if you accept section-8 your response should never be no!
- If a tenant with a section-8 voucher wishes to apply for your rental unit DO NOT REFUSE! This could be seen as discrimination and wind up getting you into a big mess. You should take the application and explain to them your policy of minimum criteria for rental applicants!