National Housing Law Project Housing Law Bulletin

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California Leads the Way: First State to Provide Nonproject-Based Section 8 Tenants a 90-Day Notice of Contract Termination

California law now requires a landlord who terminates participation or fails to renew a tenant-based Section 8 contract (or other government rent subsidy) to give a 90-day written notice to the tenant(1). As of January 1, 2000, the provisions of the statute are an implied term of the lease and Housing Assistance Payment (HAP) contract for all Section 8 tenant-based program participants.(2)

The statute provides that the contract that is terminated must be a contract with "rent limitations," which includes the HAP contract under the tenant-based Section 8 program(3). Under the Section 8 program, the PHA approves the rent and any rent received in excess of the approved rent must be returned to the tenant(4). At all times, both during the initial term and during any extensions, the rent cannot exceed the "reasonable rent" for the unit or the rent charged by the owner for comparable unassisted units(5). The owner may not demand or accept rent from the tenant in excess of the approved rent. During the initial term, the rent may not be raised above that initially approved by the PHA(6). When a rent increase is proposed, the PHA must review it and disapprove increases that are unreasonable(7). The owner certifies that the rent charged the holder of the Section 8 voucher is comparable to the rent charged by the owner for other comparable units.(8)

Claims that the statute is preempted by federal law cannot be sustained. Although there are several theories under which a state statute may be preempted, preemption is not easily presumed(9). There are three circumstance in which federal law may be found to preempt state law under the Supremacy Clause of the Constitution. First, Congress can clearly express the intent to preempt state law. In this case, there is no evidence that the federal government has acted to preempt state law that provides for a 90-day notice. Second, preemption may be implicit if Congress intended the federal government to exercise exclusive regulatory authority(10). Again this is not the case, as the Section 8 program is a funding program that contemplates substantial state participation.(11)

Finally, preemption may be implied when state law actually conflicts with federal law. Conflict preemption includes situations where it is a physical impossibility to effectuate the purposes of both state and federal law and where state law "stands as an obstacle to the accomplishment and execution of the full purposes of Congress"(12). Again there is no conflict, as both the state law and federal law may be implemented. Moreover, the state law does not interfere with the purposes of the Section 8 program, which are "aiding lower-income families in obtaining a decent place to live and of promoting economically mixed housing"(13). The purpose of the 90-day notice provision is consistent with that goal. It provides advance notice during which a tenant can determine why the landlord wants to get out of the Section 8 program and work to resolve those problems(14). Alternatively, the extended notice allows the tenant to save the necessary funds for a move (first month’s rent and a security deposit) and search for and obtain a decent place to live(15). In other words, the 90-day notice assists the tenant in avoiding homelessness and the filing, by the landlord, of an unlawful detainer action. HUD recognizes the need for more time to find a unit and recently amended the Section 8 regulations so as to allow PHAs to increase the search time beyond 120 days(16). Moreover, the time is needed, as it is well-documented that discrimination in the market place is common and substantially interferes with a Section 8 tenant’s ability to locate decent housing, especially in locations that are not areas of poverty concentration(17). The increased time will enable the tenant to locate a landlord willing to accept Section 8 vouchers and avoid a break in subsidy while simultaneously furthering housing goals of economically mixed housing. The state statute is harmonious with the Section 8 statute.

The statute is effective January 1, 2000. California advocates should bring the new statute to the attention of their PHA in the Annual and Five-Year Planning process. The Annual Plan or the Section 8 Administrative Plan should provide that the PHA inform participating tenants and landlords of the new statute and insert into the lease and Housing Assistance Payment (HAP) contract the new 90-day notice provision.

Notes-

(1) Cal. Civ. Code section 1954.535. The tenant is not obligated to pay more than the tenant’s portion of the rent for the 90 days. Owners of project-based Section 8 housing and/or federally insured multifamily housing are required by California law to provide tenants with a nine-month notice of termination of a subsidy contract or prepayment of the federally insured or federally held mortgage indebtedness. Cal. Gov. Code § 65863.10. Other states have also placed special notice requirements on project-based Section 8 owners (as contrasted with tenant-based Section 8 owners) who no longer want to participate in the Section 8 program. See Preserving Federally Assisted Housing at the State and Local Level: A Legislative Tool Kit, 29 HOUS. L. BULL. 183 (Oct. 1999).

(2) See Merrill Tenant Council v. United States Department of Housing and Urban Dev., 638 F.2d 1086 (7^th Cir. 1981).

(3) See Legislative History of SB 1098, Senate Judiciary Committee, SB 1098 (Burton), as amended April 7, 1999, page 3 (which implicitly refers to tenant-based Section 8 by discussing termination of month-to-month tenancies); 24 C.F.R. § 982.503 redesignated § 982.507 by 64 Fed. Reg. 26,632, 2,648 (May 14, 1999); Housing Assistance Payments Contract, Part B, ¶ 8 and Tenancy Addendum; Section 8 Tenant-Based Assistance Housing Choice Voucher Program, ¶ 4.

(4) Housing Assistance Payments Contract, Part B, ¶ 8.