Dealing With Section 8 Tenants

Law Changes for Section 8 Tenants: Does it Apply to Manufactured Housing?

Many tenants receive rental assistance through a federal program referred to as “Section 8”.  This is actually part of a federal statutory rental subsidy scheme found in Title 42 of the United States Code, Section 1437(f).   The question is when is a landlord obligated to accept these rental payments from a tenant?  The answer in New Jersey had been that a landlord could not discriminate against tenants in taking these payments.  A landlord could choose not to participate in Section 8 if the Section 8 agreement which had to be signed by a landlord was in any way different from the landlord’s lease or rules and regulations.  If less protection were afforded by the Section 8 agreement, then the landlord had a rational basis for rejecting the Section 8 payment and the landlord therefore could reject the Section 8 payment.  However, if a landlord had accepted Section 8 payments from some tenants, then it would have to take them from all the tenants.  This was the law as promulgated by the Appellate Division in M.T. v. Kentwood Construction Company, 278 N.J. Super. 346 (App. Div. 1994).

A more recent Appellate Division decision, however, now undermines a landlord’s choices.  In Franklin Tower One, LLC v. N.M., a panel has now ruled that it doesn’t matter whether a landlord already has Section 8 tenants or not.  A landlord is compelled to take Section 8 payments because of a New Jersey State statute which indicates that “no (landlord)… shall refuse to rent or lease any house or apartment to another person because of the source of any lawful income received by the person with a source of any lawful rent to be paid for the house or apartment.”

The Appellate Division has ruled in the Franklin Tower case that this statute prohibits landlords from discriminating and refusing to take Section 8 payments.  This law clearly applies to apartment and garden apartment type rentals.

However, a question has been raised about whether or not this would apply to manufactured homeland lease communities since those communities are not involved with the rental of a house or apartment.  An argument can be made that the statute which provides the prohibition against discrimination does not apply to these type of leases and therefore, the non-discriminatory guidelines set forth in the Kentwood Construction case would still apply, i.e., if a community has not accepted any Section 8 payments, it still has the right to reject the first of these type of rental payments and insist upon direct payment from the tenant.

By Christopher J. Hanlon, Esq., a NJ Landlord/Tenant Attorney

If you are a Section 8 Landlord or if you should require the need for legal counsel in this area, please contact chanlon@hnlawfirm.com or call toll-free (855) 376-5291.