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Section 8 Tenants: Legal Aspects you Need to Know

Landlords have many questions about their rights surrounding Section 8 requirements and restrictions. Can landlords refuse to rent to a voucher holder? No. In Baltimore City, landlords cannot refuse a tenant based on them having a housing voucher. Additionally, Fair Housing Law protects Baltimore City residents from discrimination based on the source of income, which includes vouchers. So, join us below as we discuss important facts landlords should know regarding rental housing vouchers.

What is Section 8?

The Housing Choice Voucher Program, commonly known as Section 8, is a government rent assistance program funded by the U.S. Department of Housing and Urban Development. Congress established Section 8 of the Housing and Community Development Act in 1974. This act’s primary goal was to ensure low-income individuals can find “decent housing and a suitable living environment” outside of public housing units.

In Maryland, residents must apply to the program, meet income requirements, and complete all necessary paperwork. Once approved and in their new rental home, the local housing authority begins sending payment to the landlord. Typically, a tenant pays around 30% to 40% of their income towards housing, although this varies based on various factors. In certain cases, such as tenant’s temporary unemployment, HUD may be paying 100% of the rent.

Top Benefits of Rental Housing Vouchers

Rental housing vouchers may scare off some landlords unaware of the benefits they can offer. Not only do they help families and individuals in need, but they are also good for landlords as well. Below we examine a few of these further.

  • Consistent Government Payments
  • Pre-Screened Tenants
  • Targeted Marketing
  • A Broader Tenant Base

Consistent Government Payments

The government backs rental housing vouchers. Therefore, they allow families and individuals who qualify to seek housing within a certain rental price range. Once the property is rented, the local housing authority sends payment directly to the landlord each month while the tenant pays their portion. So, tenants with a voucher come with the advantage of receiving rent payments consistently from the government. Additionally, when the tenant is responsible for a portion of the rent, any violation of the lease or non-payment could jeopardize their voucher status. For landlords, this offers an added incentive for the tenants to pay on time.

Pre-Screened Tenants

Landlords should always complete a thorough income, credit, criminal, and reference check on any potential applicant. However, all tenants with rental housing vouchers are prescreened as part of the program requirements. This is an added layer of benefit for landlords. While the primary focus is income screening, they often come across other issues such as criminal history. It is important to note that a housing office does not provide rental housing vouchers to individuals evicted within the last 3 years due to drug-related activities.

Targeted Marketing

Section 8 offers many opportunities for landlords to take advantage of targeted marketing sites. If you advertise online, sites such as GoSecion8.com and Socialserve.com are available in addition to familiar traditional outlets. Many sites specifically set up to attract voucher tenants require a landlord to register first. However, the process is simple for the potential exposure it can offer.

A Broader Tenant Base

Another advantage of rental housing vouchers is an expanded client base for landlords. The high demand for affordable housing in many areas means there is a high demand for Section 8. The program is limited to the number of participants, so many areas have a waitlist. This waitlist often contains hundreds, even thousands, of people long. So, how does this benefit landlords? It reliably provides a large number of potential applicants. Therefore, in addition to regular market tenants, this expanded rental pool can help rent your property faster.

Want to Rent to Tenants with Rental Housing Vouchers?

Landlords and real estate investors find many benefits to renting to individuals with rental housing vouchers. However, there is a process involved that can take some time. Let’s take a look at how rental housing vouchers work below.

  1. You register with the local public housing office and list your property.
  2. Your property will need to pass inspection to determine whether it meets Section 8 housing requirements. Take a look at the inspection checklist if you would like to know what the inspectors will be looking for.
  3. If you pass the inspection, your property will be added to the local Section 8 housing listings. If you don’t pass, you can either modify your property to meet the requirements, or you could use the reason for rejection to deter any future inquiries from Section 8 tenants.
  4. Once you find a tenant, you sign the Section 8 contract.

Are There Any Exceptions if Landlords Do Not Want to Accept Rental Housing Vouchers?

A landlord cannot advertise as “No Section 8” in a rental ad or property listing description. However, if a property meets certain exceptions, landlords have some recourse not to accept a housing voucher tenant. These reasons include:

  • The landlord is not authorized to rent to Section 8 tenants because the property did not go through registration and inspection.
  • The property does not meet the Section 8 requirements or has failed to pass the annual inspection.
  • Your rental agreement has closures contradicting the Section 8 contract (for example, by accepting a Section 8 tenant, you have to offer a lease for a minimum of 12 months).
  • The landlord occupies a room or a unit in the dwelling you are renting out, which makes you exempt from certain regulations.

Understanding Fair Housing Discrimination

As we mentioned above, a landlord cannot refuse to rent to a tenant solely because they have a voucher. Doing so is considered income-based discrimination and may lead to a costly lawsuit for landlords. That said, you can reject a Section 8 applicant based on the same criteria you use for any other applicants – incomplete tenant application, bad references from previous landlords, criminal record, or other non-discriminative reasons.

Who Does the Fair Housing Law Protect?

The Fair Housing Act refers to federal, state, and local guidelines that guarantee an individual’s right to fair housing choice. Therefore, it is illegal for a landlord to discriminate against anyone under a protected class. For Baltimore City landlords, this includes a source of income. The Fair Housing Act protects the following groups:

  • Race
  • Color
  • National Origin
  • Religion
  • Sex
  • Disability
  • Familial Status

Additional Classes Under Maryland Law

  • Marital Status
  • Sexual Orientation
  • Gender Identity

Additional Classes Under Baltimore City Law

  • Age 18+
  • Ancestry
  • Source of Income

Conclusion

For landlords, becoming familiar with the Maryland Fair Housing Law ensures none of your actions and the words you use are discriminating in nature. As a Baltimore property management company, we consider it one of our duties to stay up to date on state and federal laws and regulations pertaining to landlord/tenant relationships.

At Bay Property Management Group, we many clients who successfully participate in the Section 8 housing program. Our Baltimore property managers are happy to answer any questions you have regarding rental housing vouchers. Give us a call today to find out more about our full-service approach to property management in Northern Virginia, Washington DC, Philadelphia and throughout Maryland.