Scott v. Kaiuum, decided 1/4/17 (Fresno
Superior Court Appellate Department)
In January 2015, a landlord leased
a rental unit to a low-income tenant for a term of one year with rent set at
the market rate of $700 per month. A portion of the rent was subsidized
under the HUD Section 8 Housing Choice Voucher Program (the “Program”). Under
the Program, the local public housing authority (“PHA”) agreed to pay $684 per
month of the rent with the tenant paying the remaining $16 per month.
In accordance with the Program,
the landlord entered into the required housing assistance payment contract (commonly
known as a “HAP contract”) with the PHA. A HAP contract expressly
obligates the landlord to comply with HUD’s Housing quality standards (“HQS”).
On October 27, 2015, the
Housing Authority sent the landlord and tenant a letter stating that the rental
unit had failed a recent inspection, and listing multiple violations of the
federal habitability standards, all but one of which were deemed to be caused
by the landlord. The letter warned that there would be another inspection on
November 17, 2015, and that, if the defects were not cured by the time of that
inspection, the Housing Authority would abate all further Section 8 payments
effective December 1, 2015, and the HAP contract would be canceled effective
December 17, 2015.
On November 18, 2015, the
PHA sent the landlord a second letter stating that the rental unit flunked the
second inspection, that all further Section 8 payments would be cancelled effective
December 1, 2015, and that the HAP contract would be terminated effective
December 17, 2015. The letter also informed the respondent that it was “not
permitted to recover monies from the resident.”
Nevertheless, when rent came
due on December 1, 2015, the landlord demanded that tenant pay the entirety of
the $700 rent under the rental agreement. When rent became past due on December
4, 2015, respondent served appellant with a three-day notice to pay or quit,
again demanding the full $700 rental payment. When the tenant failed to cure
the notice, the landlord filed an unlawful detainer action against the tenant.
The eviction was filed on December 16, 2015.
The trial court found that,
because the deficiencies were not cured by the deadline, the Section 8 contract
had terminated and thus the tenant was required to pay the full amount of rent
under the rental agreement. Therefore, the court granted the unlawful detainer
judgment in favor of the landlord.
The appellate court
reversed. It pointed out that the tenant is not responsible for payment of the
portion of the rent covered by the PHA. Furthermore, during the term of the
lease, the landlord may not terminate the tenancy due to nonpayment of the PHA
housing assistance payment. Because the
landlord’s three day notice to pay rent or quit demanded a portion of the rent
covered by the PHA, it overstated the amount of rent owed and hence was
defective. The Court also pointed out
that, under California Civil Code section 1941.2, landlord was not entitled to
demand rent until the repairs were made and the premises were habitable.
For further information, please contact Ruzicka, Wallace & Coughlin, LLP at (949) 748-3600; website:
www.rwclegal.com.
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throughout the State of California in real estate, business and employment
litigation. The information provided herein is for general interest only and
should not be relied upon or construed as legal advice.
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