Section 8 tenants forced into illegal side contracts by landlord get class certification

Section 8 tenants forced into illegal side contracts by landlord get class certification

By Lynda Carson - August 1, 2018

According to court documents filed on July 30, 2018, in the United States District Court for the Eastern District of California (Case# 2:15-cv-00799-KJM-DB), some Section 8 tenants (aka Housing Choice Voucher Program tenants) that were forced into illegal side contracts by their landlord get class certification.

The case is known as: USA, ex rel. Dennis Terry and Roy Husky lll, and each for themselves individually, and for all other persons similarly situated and on behalf of the USA, v. Wasatch Advantage Group, LLC, Wasatch Pool Holdings, LLC, Chesapeake Commons Holdings, LLC, Logan Park Apartments, LLC; Logan Park Apartments, LP.

The Section 8 program (aka Housing Choice Voucher Program) provides that participating tenants pay between thirty percent and forty percent of their adjusted monthly income toward rent and utility costs and the federal government and local housing agencies pay the balance of rent directly to the property owner.

Section 8 tenants are not allowed to be involved in illegal side contracts, and Section 8 tenants are not allowed to pay more for their portion of monthly rental payments than what the HAP contract requires of them.

Dennis Terry and Roy Husky lll, filed their complaint on April 14, 2015. These Section 8 tenants who receive rental assistance through the federally subsidized Housing Choice Voucher Program commonly known as “Section 8,” claim that the landlord illegally charged them for washer and dryer rentals, renters’s insurance, and covered parking.

According to court documents, “the tenants allege that the landlord repeatedly demanded payment of additional charges, rent payments or “side payments,” all in violation of the HAP Contracts and without authorization of the local housing agency or the U.S. Department of Housing and Urban Development (HUD).”

As an example, the Resident Ledger for the Terry residence for the month of January 2012 reflects a monthly charge of $40 for “Washer/Dryer Rental,” $17.91 for “Renter’s Insurance” and $10 for “Covered Parking Charges.”

Similarly, the Resident Ledger for the Huskey residence for the month of January 2012 reflects a monthly charge of $50 for “Washer/Dryer Rental” and $17.91 for “Renter’s Insurance.”

To enforce additional rent payment requirements, the landlord threatened Terry and Huskey each with eviction for nonpayment of the “side payments.” According to court documents, the landlord eventually filed an eviction action against Terry for not making the unlawfully demanded “side payments.”

The Wasatch Advantage Group, LLC, owns or controls properties in Fresno, Hanford, Kingsburg, Norco, Rancho Cordova, Sacramento, San Diego and Spring Valley, California, with hundreds of Section 8 tenants that may have experienced a similar situation which is why class certification has been granted.

According to the website for the Wasatch Group, they are a fully integrated real estate development, construction, property management and guaranty capital company, with holdings that include 16,344 apartments plus commercial properties with assets totaling over $4 billion. Wasatch Advantage Group, LLC, is an affiliate of the Wasatch Group.

The tenants involved in the above mentioned case are represented by the Law Office of Andrew Wolff in Oakland, and the landlord is represented by Joseph A. Salazar Jr. and Yoon-Woo Nam of Lewis Brisbois Bisgaard and Smith in Sacramento.

Section 8 tenants forced into illegal side contracts may be a widespread problem.

According to a September 16, 2015, release from the United States Attorney’s Office, District of Minnesota, “Twin Cities Landlords To Pay $130,000 To Resolve Alleged Section 8 Housing Assistance Violations.” The release reveals that landlords collected thousands of dollars in illegal “side payments” from low-income Section 8 tenants.

And reportedly in Nevada, “Law firm says landlords’ fraud ignored in Las Vegas Valley.” It was reported in the Las Vegas Review-Journal that “landlords have forced some of Clark County’s poorest Section 8 tenants to pay thousands in fraudulent fees in recent years, but the government agency tasked with stopping the abuse has done little to investigate the accused.”

Lynda Carson may be reached at tenantsrule [at] yahoo.com

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