Landlords have relied on so-called “Section 8” housing as a source of income for decades, going back to the creation of the government-assisted housing program in the Housing Act of 1937, from which the name “Section 8” derives. The primary benefit of Section 8 housing is that it benefits low-income tenants and landlords alike by providing federal assistance for rent payments. At the same time, however, some neighbors are less than thrilled to be in such close proximity to Section 8 housing based on the belief that it will drive down property values through association with low-income tenants and whatever perceived quality-of-life issues might follow. Which leads to the question of whether an HOA is required to alert condo owners about Section 8 tenants in neighboring properties.
There is No Federal Right to Notify of Section 8 Housing
The federal regulations allowing for Section 8 housing do not require HOAs to notify homeowner members of the presence of Section 8 housing, nor do they require that HOAs accept Section 8 housing (but things can get tricky there; see below). As for state and local laws affecting notice, an HOA should speak with its attorney regarding this matter, but such a requirement is unlikely.
That said, there may be internal HOA notice procedures that must be followed whenever a member landlord rents to a tenant (whether a Section 8 tenant or not), but, for the reasons below HOAs should act cautiously (and, again, speak with their attorney) in creating any type of policies related to Section 8 housing.
HOAs Should Be Careful in How They Deal With Section 8 Housing
Again, federal law does not require a landlord to accept a Section 8 tenant, although a state or local law may prohibit a landlord from discriminating on the basis of Section 8 funding; see, for example, a recently enacted statute in Santa Monica, California barring just that.
Absent such a statute, a landlord may use income or employment requirements which may effectively keep out Section 8 tenants. But such requirements may not be used as a pretext for an illegal purpose such as racial discrimination, and, when they are, they can invite expensive lawsuits and significant reputational damage. All in all, HOAs are strongly encouraged to seek legal counsel in crafting policy and responding to concerns relating to Section 8 funding.
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At Goodman Holmgren, our sole focus is on meeting the legal needs of HOAs, including creating and implementing HOA policy and responding to homeowner concerns. Contact us today to discuss any legal challenge your HOA is facing.