High Court Rules:
Once a Landlord Takes a Section 8 Tenant the Landlord is Bound Forever
The New York Court of Appeals, on July 2, 2007, in the matter of Rosario, et al., respondents and Gumanovsky, et al., plaintiffs v. Diagonal Realty, LLC, et al., appellants, et al., defendants, ruled that a landlord’s acceptance of federal Section 8 rent subsidy payments is a “term and condition” of a lease executed with a rent stabilized tenant. As such the rent stabilized tenant must be offered a renewal lease containing the same terms and conditions as in prior leases. The landlord thus may not “opt-out” of the Section 8 program upon a lease’s termination.
What is Section 8?
The Section 8 program is a Federal Housing Certificate program which authorizes a local housing authority to subsidize the rent paid by eligible families. Those families pay 30% of their income toward their rent while the Voucher Program requires the local housing authority to pay the owner the remaining rent subject to a cap referred to as “Fair Market Rent” (FMR) as determined by HUD (The United States Department of Housing and Urban Development). A landlord cannot charge a Section 8 tenant more than the FMR even if the landlord charges higher rents to non-Section 8 tenants in
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