Staying Out of Trouble With Rental Vouchers

September 4, 2019

- By Stephen M. Perry

For almost 50 years, Massachusetts has prohibited landlords and their agents from discriminating against the recipients of public housing assistance, including those using Section 8 vouchers.

In today’s column we are going to look at a longstanding feature of Massachusetts non-discrimination law that is not well understood. This law has more applicability to rentals than to sales, so if you never do rentals, this may be a good time to catch up on this law.

For almost 50 years, Massachusetts has prohibited landlords and their agents from discriminating against the recipients of public housing assistance, including those using Section 8 vouchers. A Supreme Judicial Court decision in 1987, involving Boston’s storied landlord, Harold Brown, left some ambiguity as to what the law prohibited and what it allowed. The Court was receptive to the landlord’s defense that he was not discriminating against those on public assistance, but simply refusing to agree to certain unfavorable program requirements, such as a prohibition against collecting the last month’s rent in advance.

Legislative Changes

The Legislature apparently didn’t like the Court’s ruling. In 1990 it amended the statute to make it unlawful not just to discriminate against recipients of public housing, but also to refuse to rent to someone because of any requirement contained in a public assistance or rental subsidy program. That remains the law today.

Accordingly, it is unlawful in Massachusetts for a landlord or an agent to refuse to rent to someone simply because the prospective tenant is going to use Section 8 vouchers, or similar public subsidies, to pay a portion of the rent. It is equally unlawful to refuse to rent to someone because the landlord does not want to deal with the red tape or special lease provisions that the housing subsidy program entails.

A press release issued just last fall by the Massachusetts Attorney General shows that not all Massachusetts brokers or landlords understand this statutory prohibition. The press release included a description of two separate enforcement actions against real estate agents for discriminating against section 8 participants.

The Enforcements

In one of the cases, the agent told a tenant that the landlord did not accept Section 8 vouchers. The Attorney General slapped the agent and landlord with a $10,000 fine. This perhaps sounds like an egregious violation – until one considers that even today, on the Boston Housing Authority’s website, there is a sentence that reads, “Voucher holders are responsible for finding an apartment that accepts Housing Choice vouchers in the private market.” This wording, by the agency that administers the program, certainly makes it sound like landlords can choose not to accept the vouchers. The BHA lifted its misleading language from the federal government’s program description. While federal law does not require landlords to accept Section 8 vouchers, refusing to accept them in Massachusetts, and several other states, is unlawful.

In the other case brought against a real estate broker, the agent told the tenant that an advertised rental unit was still available. The prospective tenant then asked if Section 8 was okay. The broker replied that the unit was not approved for Section 8. This was deemed unlawful discrimination and resulted in a $10,000 fine against the agent and landlord. It seems unlikely that the broker intentionally violated the law. Most likely the broker was confusing Section 8’s private voucher system, where there are no such preapprovals, with project-based Section 8 housing, where a housing project has been specifically constructed and maintained as section 8 housing.

The Attorney General’s enforcement actions against real estate brokers arose under Section 8’s “Housing Choice Vouchers” program. There are no preapproval of units under this program. Rather, the individuals and families who have received the vouchers are free to search for and select units within a certain rent range. Once they’ve identified a unit that they would like to rent, the landlord can screen the tenant in essentially the usual manner, but should not disqualify the tenants based solely on insufficient income to pay the full rent, as the tenants will be paying a portion of the rent, and the government will be paying the rest.

The Process

Once the agent has screened the prospective tenants in a non-discriminatory manner, the landlord or agent contacts the applicable local housing authority, which reviews the rent for reasonableness. If the proposed rent is deemed too high, the landlord can presumably rent the property for the full amount to someone else without violating the law.  If the rent is deemed reasonable, the housing authority will also make sure that the lease conforms to program requirements. Certain lease provisions are not allowed, and a special Section 8 rider must be attached. The landlord must accept these lease provisions. Then, an inspector is sent out to the property to ensure that it meets program safety standards. If all goes well, the landlord signs a contract with the Section 8 housing authority as well as the approved form of lease with the tenant. The family pays its designated portion of the rent, and the housing authority directly pays the landlord the balance.

What if the unit fails the inspection? There do not appear to be any published Massachusetts cases directly addressing this issue. If the repairs are needed to bring the unit up to code, or to address a safety hazard, it would be legally risky and probably unlawful to refuse to make them. On the other hand, if the requested repairs are more in the nature of an upgrade, it seems questionable that the landlord would have to make them without being allowed to increase the rent. It is a gray area.

Obviously, in a hot real estate rental market such as exists in the Boston area, many landlords might prefer to avoid the perceived hassle of involving a local housing authority in the rental process and complying with housing assistance program requirements. This may tend to put the broker in the middle, but the legal requirements are clear: if a prospective tenant identifies an available rental property and wishes to have part of the rent paid for through a voucher program, the real estate agent must counsel the landlord that compliance with program requirements is mandatory. You don’t want to be the subject of the Attorney General’s next enforcement action.