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
dirt@umkc.edu
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.
Items reported here and in the ABA publications
are for general information purposes only and
should not be relied upon in the course of
representation or in the forming of decisions in
legal matters. The same is true of all
commentary provided by contributors to the DIRT
list. Accuracy of data and opinions expressed
are the sole responsibility of the DIRT editor or
individual contributors and are in no sense the
publication of the ABA.
Parties posting messages to DIRT are posting to a
source that is readily accessible by members of
the general public, and should take that fact
into account in evaluating confidentiality
issues.
ABOUT DIRT:
DIRT is an internet discussion group for serious
real estate professionals. Message volume varies,
but commonly runs 5 to 15 messages per work day.
DIRT Developments are posted periodically, as supply dictates.
To subscribe, send the message
subscribe Dirt [your name]
to
listserv@listserv.umkc.edu
To cancel your subscription, send the message
signoff DIRT to the address:
listserv@listserv.umkc.edu
for information on other commands, send the message
Help to the listserv address.
DIRT has an alternate, more extensive coverage that includes not only
commercial and general real estate matters but also focuses specifically upon
residential real estate matters. Because real estate brokers generally find
this service more valuable, it is named “BrokerDIRT.” But residential
specialist attorneys, title insurers, lenders and others interested in the
residential market will want to subscribe to this alternative list. If you
subscribe to BrokerDIRT, it is not necessary also to subscribe to DIRT, as
BrokerDIRT carries all DIRT traffic in addition to the residential discussions.
To subscribe to BrokerDIRT, send the message
subscribe BrokerDIRT [your name]
to
listserv@listserv.umkc.edu
To cancel your subscription to BrokerDIRT, send the message
signoff BrokerDIRT to the address:
listserv@listserv.umkc.edu
DIRT is a service of the American Bar Association
Section on Real Property, Probate & Trust Law and
the University of Missouri, Kansas City, School
of Law. Daily Developments are copyrighted by
Patrick A. Randolph, Jr., Professor of Law, UMKC
School of Law, but Professor Randolph grants
permission for copying or distribution of Daily
Developments for educational purposes, including
professional continuing education, provided that
no charge is imposed for such distribution and
that appropriate credit is given to Professor
Randolph, any substitute reporters, DIRT, and its sponsors.
All DIRT Developments, and scores of other cases, arranged topically, are reported in hardcopy form in the ABA Quarterly Report. This is a limited subscription service, available to ABA Section Members, ACMA members and members of the NAR. Qualified subscribers may Subscribe to this Report ($30 for Two Years) by Sending a Check to Ms. Bunny Lee, ABA Section on Real Property, Trust & Estate Law, 321 N. Clark Street, Chicago, Il 60610. Contact Bunny Lee at (312) 988-5651, Leeb@staff.abanet.org ABA members also can access prior and current editions of this report on the ABA RPTE section website.
DIRT has a WebPage at:
http://dirt.umkc.edu/
*************************************