Scenario:
A tenant family appeared to qualify at move-in and both the first and second recertifications. At the third recertification we discovered that they had failed to list a job they had at move-in and held until we were in the process of certifying them for the third time. (They must have forgotten not to list that additional job which would have put them over-income).
Once we learned about this, we moved to correct it with a 30-day notice to vacate. Now the tenant family member has quit that job and insists that they qualify. They are threatening to sue if we force the issue.
We like the tenants and don’t want things to get ugly.
What should we do?
Answer:
#1) Keep Doing Your job. It amazes us how many times households get caught at this and then try to make it the property manager’s fault. So keep doing your job. If they are threatening to sue, you can
probably think of a nice way to agree with them that it’s a good idea.
What is your job, exactly?
#2) Protect the owners’ credits by maintaining compliance. And remember, it’s their credit flow so we’re going to suggest that you…
#3) Contact the investor group because when credits are at risk, they need to know. They are the
ones who must decide the best course of action.
#4) Don’t let personal feelings about the family get in the way. That’s a recipe for trouble. If the family was causing other problems, it might feel easier to enforce the law. But that’s exactly why the law exists. We need to treat the facts and circumstances without personal interest. Do what the law requires.
Technically, we agree that the unit could not be considered ‘in compliance’. However, the fact that the tenant appears to have committed fraud at the time of move-in (and at two recertifications) shows a
probable intent to defraud the program. The fact that someone quit a job in order to fix the problem only adds to our suspicions. Think outside the box of how much you like the family.
As the management agent, you acted appropriately as soon as the non-compliance was discovered. Now the question is whether or not to permit the family to remain in the unit. Here are some additional facts to consider:
a) Consistency is key: If your lease contains a clause that permits you to require the family to vacate
due to fraudulent practices (and/or if they signed documents under penalty of perjury) you could pursue eviction based on the facts and circumstances at the time of move-in. If you become involved in a court case, these can become lengthy and expensive but is a reasonable attempt to cure even though in this
case an eviction action might appear to be an‘after the fact’ cure since the family now ‘qualifies’. We can’t pick and choose who to apply the law to.
b) Particularly in these types of cases, if the family now qualifies and there is no repercussion against their prior action, they could take that as permission to commit the same illegal activity again. There has to be a
mechanism that protects our federal housing program from these types of events. The 8823 Guide indicates that such activities be reported to the state agency in a manner described on pages 25-1 and 25-2 of the Guide. We’d suggest that at minimum this be considered. However, once again, make certain there
is full agreement between the management agent and the investor group before proceeding.
A tenant family appeared to qualify at move-in and both the first and second recertifications. At the third recertification we discovered that they had failed to list a job they had at move-in and held until we were in the process of certifying them for the third time. (They must have forgotten not to list that additional job which would have put them over-income).
Once we learned about this, we moved to correct it with a 30-day notice to vacate. Now the tenant family member has quit that job and insists that they qualify. They are threatening to sue if we force the issue.
We like the tenants and don’t want things to get ugly.
What should we do?
Answer:
#1) Keep Doing Your job. It amazes us how many times households get caught at this and then try to make it the property manager’s fault. So keep doing your job. If they are threatening to sue, you can
probably think of a nice way to agree with them that it’s a good idea.
What is your job, exactly?
#2) Protect the owners’ credits by maintaining compliance. And remember, it’s their credit flow so we’re going to suggest that you…
#3) Contact the investor group because when credits are at risk, they need to know. They are the
ones who must decide the best course of action.
#4) Don’t let personal feelings about the family get in the way. That’s a recipe for trouble. If the family was causing other problems, it might feel easier to enforce the law. But that’s exactly why the law exists. We need to treat the facts and circumstances without personal interest. Do what the law requires.
Technically, we agree that the unit could not be considered ‘in compliance’. However, the fact that the tenant appears to have committed fraud at the time of move-in (and at two recertifications) shows a
probable intent to defraud the program. The fact that someone quit a job in order to fix the problem only adds to our suspicions. Think outside the box of how much you like the family.
As the management agent, you acted appropriately as soon as the non-compliance was discovered. Now the question is whether or not to permit the family to remain in the unit. Here are some additional facts to consider:
a) Consistency is key: If your lease contains a clause that permits you to require the family to vacate
due to fraudulent practices (and/or if they signed documents under penalty of perjury) you could pursue eviction based on the facts and circumstances at the time of move-in. If you become involved in a court case, these can become lengthy and expensive but is a reasonable attempt to cure even though in this
case an eviction action might appear to be an‘after the fact’ cure since the family now ‘qualifies’. We can’t pick and choose who to apply the law to.
b) Particularly in these types of cases, if the family now qualifies and there is no repercussion against their prior action, they could take that as permission to commit the same illegal activity again. There has to be a
mechanism that protects our federal housing program from these types of events. The 8823 Guide indicates that such activities be reported to the state agency in a manner described on pages 25-1 and 25-2 of the Guide. We’d suggest that at minimum this be considered. However, once again, make certain there
is full agreement between the management agent and the investor group before proceeding.
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