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Appellate Court Rules Rental Property Owners Do not have to Participate in Section 8 Voucher Program

In the case of Sabi v. Sterling, the California Court of Appeal for the Second District confirmed what CAA has known all along – California law does not require rental property owners to participate in the Federal Section 8 program, and an owner’s refusal to participate in the program is not grounds for a discrimination action.

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The California Apartment Association (CAA) filed an Amicus Brief in this case in June of 2009, arguing that Section 8 should remain voluntary (as dictated by the U.S. Congress) and that property owners should not be compelled by state and local governments to enter into these contracts. Furthermore, property owners should continue to have the right to exit the program for a variety of business and economic reasons without risking a discrimination charge based on "source of income."

The tenant in this case argued that current state law prohibits a landlord from discriminating based upon a tenant’s “source of income.”   Anticipating these types of claims, CAA successfully lobbied the State Legislature in 2004 to include in the statute a definition of “source of income” which provides that “source of income means lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant.  For the purposes of this section, a landlord is not considered a representative of a tenant.”

The court noted CAA’s argument in the legislative history when it wrote, “CAA asserts that some consumer organizations have incorrectly argued that the property owner is the representative of the tenant when a tenant’s lawful, verifiable income is paid to the landlord, such as the case in Section 8 housing.”  Referencing this language, the court concluded that the Legislature “made its purpose quite clear.”   While some may believe that Section 8 payments should be protected in the law, the Legislature does not think so.  The court did acknowledge that the Legislature was obviously quite aware of the Section 8 issue.   However, “being aware of a problem is not the same as doing something about it.”  In summary, the court wrote that “there is nothing on the face of the legislation that suggests that it was the purpose and intent of the Legislature to compel landlords to participate in the Section 8 program. “

On a separate issue, the tenant argued that the landlord’s refusal to accept her Section 8 assistance payments interfered with her use and enjoyment of the apartment and that because she was disabled the landlord should alleviate her financial impediments to living at the property.  The court disagreed.  Referencing this argument as “dysfunctional,” the court wrote “it appears to be obvious that a person who concededly has the full use and enjoyment of the premises cannot claim, in the next breath, that her use and enjoyment is curtailed.

The court ordered the appellant (tenant) to pay for the owner’s costs of the appeal.

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