BLOG | Counsels’ Corner: Court Invalidates Requirement That Landlords Accept Section 8
By: Kenneth J. Finger, Esq., Dorothy M. Finger, Esq., Carl L. Finger, Esq., and Daniel S. Finger, Esq.
(NEW YORK) New York State Supreme Court Justice Mark G. Masler, on June 27, 2023, held the New York State Human Rights Law requiring Property Owners to accept Section 8 unconstitutional.
The New York State Human Rights Law was amended in 2019. The amendment rendered it an “unlawful discriminatory practice to refuse to rent or lease housing accommodations” based on a person’s Source of Income. Source of Income was defined to include public assistance, federal, state or local, and specifically included Section 8 Vouchers. The Section 8 program, by its nature under Federal Law, is a voluntary program. Owners will recall that over 20 years ago the law was specifically changed to eliminate the “take one take all” provision and render the program completely at the will of the property owner. Owners have simply stated that a voluntary program should be voluntary and that making the program more attractive would entice owners to participate.
Nonetheless, municipalities have passed laws and courts have issued decisions requiring Property Owners to participate in the Section 8 program and to accept Section 8 Vouchers. Property Owners have objected due to the quantity of paperwork, required agreements, investigations by Section 8 staff, inspections of the premises by Section 8 staff, including common areas and systems not part of the leased premises, and other objectionable aspects of the program.
Nonetheless for Rent Stabilized and Emergency Tenant Protection Act (ETPA) tenancies, the acceptance of Section 8 Vouchers became all but mandatory. Thereafter counties such as Westchester County enacted laws requiring the acceptance of Section 8 Vouchers and all that they entailed. And finally, in 2019, New York State enacted a law requiring Property Owners to accept Section 8 Vouchers. A Property Owner would then be required to comply with all Section 8 regulations and requirements including physical inspections and inspections of books and records.
As of March 27, 2023, the legality of this requirement has once again risen to the forefront and, at least in this instance, been declared unlawful.
In the case of People of the State of New York v. Commons West, LLC, et al, County of Tompkins, State of New York, Index No. EF2022-0558, the Respondents were Property Owners purportedly subject to the provision of the law holding that their refusal to rent or lease based on Source of Income, including Section 8, would constitute a violation of the Human Rights Law and subject them to the accordant penalties. In order to require the Respondents to accept Section 8, New York State commenced this proceeding seeking an order directing the Respondents to lease apartments to Section 8 recipients and for penalties.
Respondents defended the case brought by New York State and requested that the Court dismiss the case. The basis of the defense was that in requiring the Respondents to accept Section 8 Voucher recipients, the law required Respondents to sign agreements with the Section 8 administrator, a Public Housing Agency. The agreements in turn required the Respondents to subject their physical properties and their books and records to inspection by the Public Housing Agency. Such inspection rights also included computers, equipment, and facilities with such records. The Respondents claimed that such a requirement violated their right under the Fourth Amendment of the United States Constitution to be free from unreasonable searches and seizures.
Petitioner asserted that the Human Rights Laws do not mandate participation in Section 8, it only prohibits owners from denying an applicant an apartment based on Source of Income, such as Section 8. In other words, according to New York State the Respondents could accept the tenant and voucher but not participate in the Section 8 program. Of course, every Property Owner knows this to be a false assertion as Section 8 will not provide the voucher payment if the Owner is not participating in the Section 8 program including executing all documents and permitting all inspections.
The Court held consistent with reality that in order to accept the Section 8 Voucher the Owner is required to participate in the Section 8 program. The Court further held that the legislation amending the Human Rights law effectively requires Property Owners to participate in Section 8.
The Court, having dispensed with the claim by New York State that owners were not required to participate in Section 8 by law, discussed the impact of the argument by Respondents that participation in the program required them to waive their Fourth Amendment rights. The Court referenced prior decisions by the Court of Appeals of the State of New York, which held specifically that laws authorizing the inspection of residential rental properties without the permission of the Owners violated the Fourth Amendment. The Court concluded that the compulsion to participate in the Section 8 program conclusively required and compelled Property Owners to consent to warrantless searches of their property.
A Key Violation
In addition to the warrantless searches of the property, the Court further held that the requirement that compels Owners to consent to searches of their records without a warrant similarly violated the Fourth Amendment. The Court again found New York States arguments unconvincing and determined that the law improperly compelled Owners to waive their rights.
In other words, the Court held that forcing Property Owners to participate in a program which forces Property Owners to waive their constitutionally protected rights to privacy is unconstitutional. The case brought by New York State was therefore dismissed.
It remains to be seen whether other Courts in New York State will follow suit and certainly New York State will appeal the case. However, this is a positive result for Property Owners seeking to avoid the burdensome and unreasonable aspects of the Section 8 program and Property Owners can hope it is a harbinger of things to come.
Editor’s Note: The authors are attorneys with Finger and Finger, A Professional Corporation. The firm, based in White Plains, is Chief Counsel to The Building and Realty Institute of Westchester and the Mid-Hudson Region (BRI) and its seven component associations.