Legal Affairs News

Landlord Not Required to Accept Section 8 Payments

Most agents and owners involved with residential rental properties are familiar with the phrase “Section 8 assistance.”  Section 8 is a portion of the United States Housing Act of 1937 (now title 42 United States Code section 1437f.)  The statute sets forth a program that authorizes assistance payments “for the purpose of aiding low-income families in obtaining a decent place to live and of promoting economically mixed housing….”

A recent California appellate case (Elisheba Sabi v. Donald Sterling et al) addresses whether a landlord was legally obligated to accept Section 8 assistance payments. The case drew a great deal of attention from both landlord groups and from tenant advocacy organizations. Although the California case is not binding throughout the country, various aspects of it may be instructive and/or of interest to those in other jurisdictions.

Elisheba Sabi immigrated to the United States from Iran in 1985 when she was 53 years old.  At the time the underlying action was brought, she suffered from both physical and psychological disabilities and as a consequence, received supplemental security income (SSI) from the Social Security Administration.  She had been living in an apartment owned by the defendant Sterling and/or his corporation since 1987.  (Mr. Sterling is one of the largest landlords in California and owner of the Los Angeles Clippers NBA franchise.)  After her husband died in January of 2004, Ms. Sabi’s SSI was no longer adequate to cover the rent.

Ms. Sabi and her husband had applied for Section 8 assistance in 1998, but it was not until 2003 that they were notified that they had become eligible.  They were issued a voucher in July of 2003.  In August, Ms. Sabi approached the building manager with the request that Section 8 assistance payments be accepted.  From that time until the suit was filed in April of 2004, the landlord/defendant refused to participate in the Section 8 program.  At the time of the appellate decision (April 2010) Ms. Sabi continued to live in the apartment, had not been asked to vacate, and continued to pay the rent.

The suit, filed in 2004, alleged two causes of action:
(1)  that the landlord had violated California’s Fair Employment and Housing Act (FEHA), and
(2)  that the landlord had discriminated against Ms. Sabi in violation of California’s Civil Rights Act .

The trial court found that the landlord had not violated FEHA, and also dismissed the claim that there had been discrimination in violation of California’s Civil Rights Act.  The tenant appealed.

The allegation that the Fair Employment and Housing Act was violated centered on the prohibition against housing discrimination on the basis of source of income.

The appellate court ruled that the landlord’s refusal to participate in Section 8 was not an act of discrimination regarding the tenant’s source of income, because the Section 8 payment is not a source of income to the tenant.  The law defines income as money “paid directly to the tenant or paid to a representative of the tenant.” But Section 8 payments are not made to the tenant; they are made directly to the landlord. And the code specifically states that the landlord is not considered a representative of the tenant.

As to the discrimination charge, the appellate court noted that California’s law is virtually identical to federal provisions.  The state code provides that a landlord may not refuse to make reasonable accommodations in rules, policies, practices, or services, when those accommodations may be necessary to afford individuals with a disability equal opportunity to use and enjoy the premises.

But the appellate court found that it was obvious that the landlord’s policy of refusing to participate in Section 8 did not prevent Ms. Sabi from the use and enjoyment of the premises.  She had lived there for 17 years before filing suit, and she continued to live there as the suit progressed. She had every bit as much use and enjoyment of the premises as she would have had were the Section 8 payments accepted. Thus, the appellate court upheld the trial court’s dismissal.

Different jurisdictions might reach different conclusions about some of these matters, and different facts could yield different results.  But, in this case, the defendant, Donald Sterling, prevailed.

posted @ Friday, December 10, 2010 3:47 PM by Mitchell2255