Many, if not most, agents and owners involved with residential rental properties are familiar with the phrase "Section 8 assistance". Section 8 was a portion of the United States Housing Act of 1937 (now title 42 United States Code section 1437f.) The statute sets forth a program that authorizes assistance payments "for the purpose of aiding low-income families in obtaining a decent place to live and of promoting economically mixed housing…".
A recent California appellate case (Elisheba Sabi v. Donald Sterling et al.; 2nd Appellate District) addresses whether a landlord was legally obligated to accept Section 8 assistance payments. The case drew a great deal of attention from both landlord groups and from tenant advocacy organizations. Although the California case is not binding throughout the country, various aspects of it may be instructive and/or of interest to those in other jurisdictions.
Elisheba Sabi immigrated to the United States from Iran in 1985 when she was 53 years old. At the time the underlying action was brought, she suffered from both physical and psychological disabilities and, as a consequence, received supplemental security income (SSI) from the Social Security Administration. Since 1987 she lived in an apartment owned by the defendant and/or his corporation. Her sons, who no longer live there, were and are listed on the lease for the apartment. After her husband died in January of 2004, her SSI was no longer adequate to cover the rent.
Ms. Sabi and her husband had applied for Section 8 assistance in 1998. It was not until 2003 that they were notified that they had become eligible. They were issued a voucher in July of 2003. Beginning in August of that year, Ms. Sabi approached the building manager with the request that Section 8 assistance payments be accepted. From that time until the suit was filed in April of 2004, the landlord/defendant refused to participate in the Section 8 program. At the time of the appellate decision (April, 2010) Ms. Sabi continued to live in the apartment, had not been asked to vacate, and continued to pay the rent.
The suit that was filed in 2004 basically alleged two causes of action: (1) that the landlord had violated California’s Fair Employment and Housing Act (FEHA) and that (2) the landlord had discriminated against Ms. Sabi in violation of California’s Unruh Civil Rights Act (Civil Code Section 54). The trial court found that the landlord had not violated FEHA and it also granted nonsuit with regard to the claim that there had been discrimination in violation of California’s Civil Rights Act. The tenant appealed.
Did I mention that there was considerable interest in this case? Briefs in support of the plaintiff were filed by Disability Rights Advocates, Disability Right Education and Defense Fund, National Senior Citizens Law Center, Housing Rights Center, Inner City Law Center, and the Tenderloin Housing Clinic, among others. The California Apartment Association, the Apartment Association of Orange County, and the California Apartment Law Information Foundation filed briefs in support of the defendant.
The allegation that the Fair Employment and Housing Act was violated centered on the prohibition against housing discrimination on the basis of "race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, or disability of that person." (Emphasis added.)
The appellate court ruled that the landlord’s refusal to participate in Section 8 was not an act of discrimination regarding the tenant’s source of income. That is because, as it explained in a lengthy discussion, the Section 8 payment is not a source of income to the tenant. In the code, "income" is defined as money "paid directly to the tenant or paid to a representative of the tenant." But Section 8 payments are not made to the tenant; they are made directly to the landlord. And the code specifically states that the landlord is not considered a representative of the tenant.
As to the discrimination charge, the appellate court noted that California’s law is practically identical to the federal provisions. The state code says that a landlord "…shall not refuse to make reasonable accommodations in rules, policies, practices, or services, when those accommodations may be necessary to afford individuals with a disability equal opportunity to use and enjoy the premises."
But, quite simply, it was obvious that the landlord’s policy of refusing to participate in Section 8 did not prevent Ms. Sabi from the use and enjoyment of the premises. She had lived there for 17 years before filing suit, and she continued to live there as the suit progressed. She had every bit as much use and enjoyment of the premises as she would have had were the Section 8 payments accepted. Thus, the appellate court upheld the trial court’s dismissal.
Different jurisdictions might reach different conclusions about some of these matters; and different facts could yield different results. But, in this case, the defendant, Donald Sterling, prevailed. For those who might not have inferred the connection, this particular Donald Sterling is the Donald Sterling who owns the Los Angeles Clippers. He needed a win.