Daily Development for Friday, January 15, 2010-
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Husch Blackwell Sanders
Kansas City, Missouri
HOUSING; LOW INCOME HOUSING; RENT: Housing authority may charge increased rent where tenant has received retroactive compensation award for periods in which tenant payed lower rent, but such may not be in excess of fair market rent of apartment
Northampton Housing Authority v. Kahle, 908 N.E.2d 814 (Mass.App.Ct.).
Housing authority brought summary process action against tenant, seeking rent in excess of fair market rent of apartment.
During tenant’s occupancy, the Board of Veterans' Appeals ("VA") ruled that tenant was entitled to compensation, including retroactive payment in the amount of $173,704, for his service-connected disability of post traumatic stress disorder. Before the additional compensation, he paid $254 per month in rent. He notified the authority of his new compensation and subsequently it determined that he was required to pay thirty percent of his net household income as rent, which amounted to $934 per month. This amount exceeded the fair market rent of the unit. Also, he was required to pay a retroactive amount of $54,000 because of the retroactive payment.
Although tenant’s income may now, in fact, have been higher than the threshold for low income housing, rules binding the authority prohibited terminating a veteran’s lease that had been in effect for more than eight years. So the tenant was permitted to stay, but at what rent?
The tenant claimed that he was obligated to pay no more than market rent for the apartment. The Housing Court allowed the authority’s motion for summary judgment and entered judgment for $56,297.90 and costs. Tenant appealed. Tenant pointed out that the statutes required that no housing authority should manage and operate any such project for profit. M.G.L.A. c. 121B, § 32. The Appeals Court agreed with him that, as a consequence of this statute, the authority could not charge in excess of the fair market rental value of his apartment.
Tenant lost, however, as to the retroactive rent claim. The relevant code of the regulation provides that an agreement may requires tenant to pay increased rent for the period in which the retroactive compensation would have been paid. The code does not require that veterans be back charged for disability benefits, but permits the practice. The authority had earlier determined that it would back charge in this case. Also, sections in tenant's lease require that tenant make an additional rental payment on account of such payments and that both he and the NHA are bound by the regulations. 760 Code Mass. Regs. §6.04(9).
The judgment was vacated and the matter was remanded to the Housing Court to enter a judgment for retroactive rent based on the fair market vale of the tenant's apartment at the respective time periods covered by each of the retroactive payments.
Comment: The editor only has rare opportunities to discuss low income housing cases because (a) no one sends them to him and (b) they tend to be fact and state law and regulation-specific. Here, however, the primary issue appears to be the policy that authorities may not operate for a profit. The editor suspects that this policy appears in many state housing law schemes, and the application of it in this case is what provoked the editor to write.
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