The answer is, it depends. First off it depends what state you're in, in Oregon starting July 1, 2014 it will be illegal to reject an applicant because they are on HUD. In California it's still legal but Connecticut it's not and on and on, so please check your state laws regularly. In my post a couple weeks ago called A New Year is Coming, Time to Review Your State's Rental Regulations I highlighted some other changes that we as landlords and Property Managers need to be mindful of. Secondly, it depends if the prospective tenant meets all of your tenant screening criteria. If the tenant does not meet any one of your established criteria then you can, and should, choose to not rent to that individual.
This same bill (Oregon House Bill 2639) that will make it illegal to discriminate against Section 8 recipients also has a HUD guaranty Program which is a fund established to offset the damages caused by Section 8 tenancies. HUD will pay for damages that exceed normal wear and tear if damages are determined to be over $500 but not more than $5,000. The landlord does have to go to small claims court and get a judgment in there favor to receive the compensation.
As a landlord, I like Section 8. I do find that my Section 8 properties have more issues as far as accelerated wear and tear, neighbor feuds, and maintenance requests. However, I think that it has more to do with the fact that they are lower end (cheaper) rental units and therefor I would likely have the same issues whether they were Section 8 or not. So far the benefits outweigh the negatives for me. I get my payments on time, I generally get higher rent rates than I could otherwise, HUD will often cover the tenants portion of the rent if they are going through some kind of hardship, and my properties are rented quickly. What are your experiences with Section 8 rentals? Does your state allow rejection of HUD or do they consider it discrimination?
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Dulcey is a member of Rentec Direct who provides Property Management Software, tenant ach payment processing, Rentec credit, criminal, and eviction screening for property managers and landlords.
Learn more about tenant screening here: https://www.rentecdirect.com/blog/category/tenant-screening/
*The information in this post is just that, informational and should not be used as a substitute for legal consult or advice.
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