Shared Top Border
sdcia_head3.jpg (14795 bytes)
SDCIA Message Board
Register New Posts Chat
 
 
 


Reply
 
Author Comment
 
norcalrei

Senior Member
Registered: 07/13/05
Posts: 113
Reply with quote  #1 
I have a unit that I rent out to section 8 tenants which is currently vacant, and I have a family member with a section 8 voucher looking for a unit.  Would I be breaking any section 8 rule by renting my unit to her? 

I searched high and low for an answer to this question but I couldn't find anything.  I could call my local housing authority on Monday but I don't want to raise any eyebrows  if I don't have to.  She is in my immediate family but has a different last name so it wouldn't be very obvious.

Thanks in advance for any help!





corkhorner

Senior Member
Registered: 05/12/05
Posts: 2,865
Reply with quote  #2 
Raising eyebrows never killed anybody?

c h

__________________
IDEAS ENGINEERING UNLIMITED
Cork Horner & Associates
Realty&Construction Solutions
Since 1963
norcalrei

Senior Member
Registered: 07/13/05
Posts: 113
Reply with quote  #3 
Ahhh, toushe.

I'll call on Monday.  The more I think about it, there really shouldn't be any issues. 
GeorgeB

Senior Member
Registered: 01/05/07
Posts: 455
Reply with quote  #4 
Quote:
Originally Posted by norcalrei
I have a unit that I rent out to section 8 tenants which is currently vacant, and I have a family member with a section 8 voucher looking for a unit.  Would I be breaking any section 8 rule by renting my unit to her? 


I believe it is against the rules to rent to family. Circumventing those rules would not be a good idea.
SFL

Senior Member
Registered: 05/20/07
Posts: 559
Reply with quote  #5 
Quote:
Originally Posted by norcalrei
I have a unit that I rent out to section 8 tenants which is currently vacant, and I have a family member with a section 8 voucher looking for a unit.  Would I be breaking any section 8 rule by renting my unit to her? 



From a 1997 article in the LA Times:  "HUD Targets Aid for Rentals to Relatives"

http://articles.latimes.com/1997/aug/10/news/mn-21302

"Under new federal regulations, which take effect next month, tenants renting from relatives who are already in the subsidy program will be allowed to continue. But new tenants will have to verify that they are not related to their landlords, unless the tenant is physically or mentally disabled."

The rules may have changed any number of times since 1997, either favorably or unfavorably.  It would not be recommendable for either landlord or tenant to sign anything fraudulently claiming that there is no relationship if there in fact is one.

If I were in this position, I would want to know exactly what the rules are, and I would want to have a copy of the relevant paragraph(s).  If nobody can find any rule against this, and if the paperwork doesn't contain any false representations, then I don't see why you would have to assume that you cannot do something which otherwise would make sense to all parties.

If there is a prohibition, then you would want to carefully check the definition of "relative" in this specific case.  Often, the law can be counterintuitive.  For example, parents may be considered relatives while siblings are not.  Or vice versa.  There is not necessarily any logic to this - you need to see the specific rule in writing, and then determine whether or not the relative you have in mind is affected by it.


corkhorner

Senior Member
Registered: 05/12/05
Posts: 2,865
Reply with quote  #6 

The above interpretations and explanations is 'xactly why I said 'raised eyebrows never killed anybody".

My favorite quote of the now famous Mr O is this " CHANGE HAS COME".  He wasn't just whistlin' Dixie, was he.

Yes 'rules' change. Like the wx. Like leaders. Like politics. Like cultural positions. Like the 'isms'.  etc.
Or----"it ain't over til its over"....yogi bara

As one 'ages' [as we all do], we become aware of the unlimited aspects of 'change'. For me, I absolutely love and cherish change.

So to with HUD, Sect 8, and many of the other multitude of HUD/FHA 'rules'....BTW, Ted Kennedy, was honored by a son's eulogy  that his dad always found out what 'rules' could be circumvented.  In my view, 'god' gave us a biologically and chemically driven device to be creative, rational and intelligent.  That device is between one's ears.

Of course, via greed and irrational behavior there are usually some who negate the need to live in harmony with the needs of others.

This Sect 8 question has been going around the horn and the cre boards a loooonnnnngggggg time.  If/when Obamma gets a chance to catch his breath, I think he will take on some of the crazy HUD/FHA 'rules' .

It is the best we can do as mere humans to welcome CHANGE and relish it. 

cork horner
Change Aficionado

ps
Another , if ya wanna study strange HUD rules/guidelines,
take on fha 203k.  War and Peace is a comic book in comparison. 



__________________
IDEAS ENGINEERING UNLIMITED
Cork Horner & Associates
Realty&Construction Solutions
Since 1963
norcalrei

Senior Member
Registered: 07/13/05
Posts: 113
Reply with quote  #7 

Thanks for the responses, especially SFL. 

Cork - I read over your last post a few times, and I can't make any sense of it   Are you basically saying the rules are always changing and recommending that I contact my local HUD office to see where they are at now?

I am going to check over the paperwork as I don't want to make any false representations.

I have done a bit of research and found this: http://www.access.gpo.gov/nara/cfr/waisidx_00/24cfr982_00.html



 

§ 982.352 Eligible housing.

The following types of housing may not be assisted by a PHA in the tenant-based programs:

6) A unit occupied by its owner or by a person with any interest in the dwelling unit. (However, assistance may be provided for a family residing in a cooperative.  Assistance may be provided to the owner of a manufactured home leasing a manufactured home space. In the case of shared housing, an owner unrelated to the assisted family may reside in the unit, but assistance may not be paid on behalf of the resident owner. For provisions on cooperative housing, manufactured home space rental, and shared housing, see part 982, subpart M.); and

 

 

So as long as I don't live in the same unit I'm fine, but I'm not sure if the issue is addressed anywhere else in the code.

 

 

 

 

corkhorner

Senior Member
Registered: 05/12/05
Posts: 2,865
Reply with quote  #8 
well, with all due respect, my like minded crowd hang on my every word!

I think what I said is very clear, requiring a little reading between the lines, interpolating etc.

If one understands that Disraeli said Change Is Constant, and Obamma corroborated it, what's the problem?

Go with flow---find change--make change---use the Gift of God---'Rational Exuberance'.

FHA/HUD is merely run by people. Therein lies the key to the kingdom.

Nothing is written in Stone---cept for mah man...Rick Jagger.

In other words....'just because'....a reg, a regulator, a law,  ad nauseum states 'whatever' does not mean there isn't change afoot, does it.

That's why lawyers are paid to 'think around' any issue!

If it wasn't so damn boring, I shoulda been one.

c h
ps
For my money , follow The O.

__________________
IDEAS ENGINEERING UNLIMITED
Cork Horner & Associates
Realty&Construction Solutions
Since 1963
RobertB

Senior Member
Registered: 10/17/06
Posts: 1,740
Reply with quote  #9 
Just put the property into a Land Trust.  Can the land trust be related to anyone? Did they write the regulation stating clearly that the majority shareholder of a trust may not rent to a immediate relative? Probably not!  Keep asking questions until someone agrees with your objective.
corkhorner

Senior Member
Registered: 05/12/05
Posts: 2,865
Reply with quote  #10 
Robert B....DAMN, your good.



__________________
IDEAS ENGINEERING UNLIMITED
Cork Horner & Associates
Realty&Construction Solutions
Since 1963
ocalcala

Junior Member
Registered: 03/24/05
Posts: 49
Reply with quote  #11 
I'm new to this and I could be wrong, but here are my observations

If you put the house into a trust with you as the bene, you'll still have an interest in the property, like an owner would have.

If such rule exists, then you'd still  be violating the rule.. I seem to remember that judges look at substance over form..

maybe you can get around this rule by having you or an entity controlled by you, be the trustee of the landtrust. You'd have to give the beneficial interests to a 3rd party, maybe your kids or another relative that is NOT a relative to the renter? or  how about your Living trust with your kids as bene?

This is where the language and interpretation of the rule comes into play, like it was said earlier: what does relative in this context?


Oz

corkhorner

Senior Member
Registered: 05/12/05
Posts: 2,865
Reply with quote  #12 
One of the few experts Tom Standen Sr....Equity Holding Corp, a mutual benefit trustee.
u can google him.....and...tell him I sent you.
No, he doesn't pay me.
They have millions under ownership as trustee.

c h

__________________
IDEAS ENGINEERING UNLIMITED
Cork Horner & Associates
Realty&Construction Solutions
Since 1963
RobertB

Senior Member
Registered: 10/17/06
Posts: 1,740
Reply with quote  #13 
Cork- we are of the same mind, which is good and bad.  Bad cause who is there is get you out of trouble.  Most people who say you cannot do something probably are not as sure as they should be but don't tell you that either.  Attorneys still get paid when they are wrong.  God I hate that part!  
corkhorner

Senior Member
Registered: 05/12/05
Posts: 2,865
Reply with quote  #14 
OK Robert---howz this  Your right, AND wrong, and don't bother me yada yada ---JUST KIDDING, friend.


As to lawyers, gotta be careful here what with the sharp dudes watching us....

My lawyer when I first started early 60's always went to my closings with me....He also didn't withhold chewing my butte out in front of title company, seller, buyer whoever!
but, he also was the best in town.

As to this thread and land trusts....I recommended a friend Tom Standen SR who is very likely the most knowledgeable expert in trustee positions.

more later.

c h

__________________
IDEAS ENGINEERING UNLIMITED
Cork Horner & Associates
Realty&Construction Solutions
Since 1963
GeorgeB

Senior Member
Registered: 01/05/07
Posts: 455
Reply with quote  #15 
Here is the full text of the rule:

http://frwebgate5.access.gpo.gov/cgi-bin/PDFgate.cgi?WAISdocID=702986445631+0+2+0&WAISaction=retrieve

This is an excerpt:

Under that proposed rule, a
housing agency (HA) may not approve
a unit for lease if the owner is the
parent, child, grandparent, grandchild,
sister, or brother of the Section 8
voucher or certificate holder that is
seeking to rent the unit. (Under
§ 982.306(e), ‘‘owner’’ includes a
principal or other interested party.) The
HA, however, could still approve the
unit for lease, if the HA determines that
approving the unit would provide
reasonable accommodation for a family
member who is a person with
disabilities.


What owner means:
http://www.alamedahsg.org/library/admin_plan/ADMIN%20PLAN%20Chapter%2013%20OWNERS.pdf

This is an excerpt:

The term “owner” refers to any person or entity with the legal right to lease or sublease a unit to a participant in the HCV program [24 CFR 982.4(b)]. The term “owner” includes a principal or other interested party [24 CFR 982.453; 24 CFR 982.306(f)], such as a designated agent of the owner.


It would be interesting to find out what your local agency has to say, especially with regard to RobertB's Land Trust idea. Keep us posted.

SFL

Senior Member
Registered: 05/20/07
Posts: 559
Reply with quote  #16 

From GeorgeB's excellent link:

"Leasing to Relatives [24 CFR 982.306(d), HCV GB p. 11-2]

The AHA must not approve a RFTA if the owner is the parent, child, grandparent,
grandchild, sister, or brother of any member of the family. The AHA may make an
exception as a reasonable accommodation for a family member with a disability. The
owner is required to certify that no such relationship exists. This restriction applies at
the time that the family receives assistance under the HCV program for occupancy
of a particular unit. Current contracts on behalf of owners and families that are
related may continue, but any new leases or contracts for these families may not be
approved."

Unless you have very good counsel (a written legal opinion) that it is ok to do otherwise, I wouldn't try to pull the wool over the authorities' eyes by claiming not to be the owner of real estate of which you de facto are the beneficial owner. 

A better idea might be full disclosure, since it appears that the authorities have some discretion.  If it is clear that the transaction is a reasonable one for all parties including the taxpayer, perhaps they have enough discretion with the "disability" provision or some other provision to allow the transaction to proceed?  If you can find someone at the bureaucracy willing to discuss this (perhaps at first on a theoretical basis), you might find a solution.

One key is always that everyone needs to pass the "red face" test.  You cannot claim not to be the owner when you obviously continue to be the beneficial owner.  And the government employee never wants to get into a position of being embarrassed by approving a transaction which later is shown to be clearly unreasonable by the press, political adversaries, a boss looking to get rid of extra employees, or others.  If everyone is comfortable that the transaction makes sense, and there is a level of trust and goodwill, then I would not be surprised if there were a way to make this work.

If you fail at the bureaucracy level, you might take it up at the political level - contact your local politicians (the ones who need your vote).  Again, you'd have to show that the transaction makes sense for everyone and nobody could get embarrassed; the only problem is that the rule is not being interpreted in a reasonable way.

Seems to me that if the terms of the arrangement are the same as the terms were with a previous unrelated party, then this would be a strong argument in your favor.

No guarantees, of course.  Sometimes reasonable things end up not being permitted.  But given the facts as they appear to be, I would not suggest trying to conceal the beneficial ownership of the property, nor would I try to hide a relationship that exists if you would have to make a false certification in writing.

Good luck!
corkhorner

Senior Member
Registered: 05/12/05
Posts: 2,865
Reply with quote  #17 
I say, follow The Obama path----CHANGE HAS COME.

These entities/gov't orgs are run by people who have discretionary powers.  Also, they tend to come and go, as with the wind.

If ya think about it 'reel hard', who cares about family relationships if a tenant is qualified for assistance?

some of these 'rules' need a whole new massage.

Just because they are government programs and guidelines, they are subject to CHANGE when a better set of thinking guidelines come forth.

I absolutely love CHANGE. It is a popular promotion on street corners these days?

I believe, that Ted Kennedy had the right system. Learn the rules and find the weak spots. Go for it.  All of Congress came out to salute him.

I do agree that 'high powered' legal beagles can be very helpful. For many reasons not given to the public limelight.

A long time back, i was riding an elevator full of lawyers who were all friends. Their greeting?  "are you for or against , today; counselor!".  Think about that.


Rationality persists,
c h

__________________
IDEAS ENGINEERING UNLIMITED
Cork Horner & Associates
Realty&Construction Solutions
Since 1963
Previous Topic | Next Topic
Print
Reply

Quick Navigation:

Policy

Powered by Website Toolbox - Create a Website Forum Hosting, Guestbook Hosting, or Website Chat Room for your website.