Owner Update “Question of The Month”

Q: What happens when the housing authority is withholding the Housing Assistance Payment from the owner. Does the tenant still have to pay their part of the rent?

A. The short answer is Yes. Here’s the reason. It’s important to sort out the pertinent documents first, and then see how they apply. The Housing Assistance Payment (HAP) Contract is between TMHA and you the owner. It is the document that allows TMHA to pay some portion of the rent to the owner on behalf of the tenant. The tenant is not a party to the HAP Contract. If TMHA is withholding HAP normally sent to an owner, it is because of a breach of the Contract, generally inspection issues that have gone beyond whatever due date is in place.

The tenant rent (if any) that is owed to you the owner on an assisted unit is paid by virtue of the Lease, which is the document between you and the tenant. The legal basis for the lease is Ohio Revised Code, specifically that section that applies to Tenant-Landlord Law. ORC governs tenancy issues in Ohio, including those rental units assisted under HUD’s Voucher Program. TMHA is not a party to the Lease. However, the Lease has been written so that it does not inadvertently create a conflict with the HUD program regulations.

So, let’s get back to the question. TMHA is withholding the HAP payment because for example there are inspection items that have not been repaired and passed by TMHA. Let’s say based on this, the tenant says they are also going to withhold their part of the rent because of the inspection issues. Bottom line is that the tenant cannot withhold - UNLESS the tenant escrows the rent with the local court and in that case, the court is likely to accept the rent only if the failure AFFECTS THE HEALTH AND SAFETY OF THE TENANT.

This is good news for the owner. However, there is a significant caution, which is that the owner under HUD regulations CANNOT force the tenant to pay the amount being withheld by the housing authority. Remember this amount is being withheld under provisions of the HAP Contract. The tenant is not a party to this contract.

In the case that the tenant attempts to withhold their part of the rent (and doesn’t escrow it), the owner has the right to evict for non-payment of rent. This situation does create a difficult situation for the tenant in that if the tenant is successfully evicted in a court action while being assisted by TMHA, they are automatically terminated from the Voucher program, as specified in regulations.

A final caution would be that a case that came to court under the circumstances described above could be unpredictable for both sides. A magistrate would have to consider the lease violation(s) by the tenant , but might also find mitigating circumstances because of the owner’s HAP Contract violations, and could take these conflicting factors into account in the final ruling.

 

TMHA Office Closings For the Holiday Season

The Tuscarawas Metropolitan Housing Authority office will observe the following holidays in the months of December and January and will be closed for business these days:

December 21st — At 11:45 a.m. closing for Holiday Luncheon
December 26th – Christmas Day Observed
January 2nd – New Year’s Day Observed
January 16th—Martin Luther King Jr. Day

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