5th Bedford Pines Apartments, Ltd. v. Brandon

262 F. Supp. 2d 1369, 2003 U.S. Dist. LEXIS 8601, 2003 WL 21142171
CourtDistrict Court, N.D. Georgia
DecidedMarch 13, 2003
Docket1:02-cv-01036
StatusPublished
Cited by1 cases

This text of 262 F. Supp. 2d 1369 (5th Bedford Pines Apartments, Ltd. v. Brandon) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
5th Bedford Pines Apartments, Ltd. v. Brandon, 262 F. Supp. 2d 1369, 2003 U.S. Dist. LEXIS 8601, 2003 WL 21142171 (N.D. Ga. 2003).

Opinion

ORDER

STORY, District Judge.

This case was originally filed in the Magistrate Court of Fulton County, Georgia, by a landlord, 5th Bedford Pines Apartments, Ltd. (“Bedford Pines”) against a tenant, Sonya Brandon. Defendant U.S. Department of Housing and Urban Development (“HUD”) was added as a necessary party, after which HUD removed the case to this Court. Now before the Court is HUD’s Motion to Dismiss [4-1].

I. Background

A. Factual History

The following facts are undisputed. This case began as a landlord-tenant eviction proceeding in the Magistrate Court of *1372 Fulton County, Georgia. The plaintiff-landlord, Bedford Pines, sought to evict the defendant-tenant, Brandon, pursuant to Georgia’s summary eviction procedures. Brandon held a lease under the Section 8 Substantial Rehabilitation (“Sub Rehab”) Program administered by the U.S. Department of Housing and Urban Development (“HUD”). As described in more detail below, the Sub Rehab Program allows tenants to pay reduced rent, while HUD makes housing assistance payments to project owners that make up the difference between the full rent and the tenant’s reduced rent. This program requires tenants to recertify their income annually to remain eligible for their reduced rent obligations. If a tenant fails to recertify, the landlord may terminate the tenancy.

Pursuant to state law, Bedford Pines filed a Writ of Possession against Brandon. The Magistrate Court found that Brandon had violated her Section 8 lease by failing to recertify her income. Fifth Bedford Pines Apartments Ltd. v. Brandon, No. 01-ED-076511 (Mag. Ct. of Fulton County, Ga. Oct. 25, 2001). The court entered a final judgement against Brandon for $2,205.00 (the market value of her unpaid rent), plus costs and interest. Id. The court further ordered that in the event of an appeal, Brandon must pay the full judgment plus $735 per month-the market value of her lease-into the court’s registry. Id. Brandon then filed a “Motion to Determine the Amount to Be Paid into Court,” arguing that her HUD-subsidized monthly rent was only $109 per month, and that the amount owed and required during appeal should reflect her original obligation. Thereafter, the magistrate court issued an order stating that it needed to determine whether HUD was required to pay the rent subsidy into the court’s registry pending final adjudication of Brandon’s eviction on appeal, and inviting Brandon to move the court to add HUD as a necessary party. Brandon so moved, and the magistrate court entered an order joining HUD. HUD removed the case to this Court and filed the pending Motion to Dismiss.

B. Statutory and Regulatory Framework

The U.S. Department of Housing and Urban Development (“HUD”) administers the Section 8 Program pursuant to the U.S. Housing Act of 1937, 42 U.S.C.A. § 1437 et seq. (West 1994 & Supp.2002). This program was established “[f]or the purpose of aiding low-income families in obtaining a decent place to live and of promoting economically mixed housing ....” Id. § 1437f(a). Bedford Pines participates in the Section 8 Sub Rehab Program, the regulations for which are codified at 24 C.F.R. §§ 5, 881 (2002). This program provides project-based assistance to owners of housing who enter into contracts with HUD or a Public Housing Authority. 1 24 C.F.R. § 888.201. Under the Program, participants make rental payments (“tenant rent”) based on their income and ability to pay. See 24 C.F.R. §§ 5.628, 5.624 (describing calculation of tenant rent). HUD makes housing assistance payments to owners to make up the difference between the tenant rent and the total amount of rent for the housing unit. Id. § 881.501(d).

*1373 Owners who participate in the Sub Rehab program enter into Housing Assistance Payment (“HAP”) Contracts with HUD. HAP Contracts address how subsidy payments will be claimed and made. In this case, section 1.3b(l) of the contract states:

The Government hereby agrees to make housing assistance payments on behalf of Families for the Contract Units, to enable such Families to lease Decent, Safe, and Sanitary housing pursuant to section 8 of the Act. Such housing assistance payments shall equal the difference between the Contract Rents for units leased by Families and the portion of such rents payable by Families as determined by the Owner in accordance with schedules and criteria established by the Government.

(HUD’s Mot. to Dismiss Ex. 4 (HAP Contract § 1.Sb(1) Nov. 8, 1978).) The Contract further requires that “the Owner shall submit monthly requests to the Government for housing assistance payments.” (Id. § 1.6f(1).)

The Sub Rehab regulations assign most of the administration of the Program to project owners. See, e.g., 24 C.F.R. § 880.601(b) (providing owner is responsible for “all management functions,” including reexamination and verification of family income). 2 At least annually, the owner must “conduct a reexamination and rede-termination of family income and composition.” Id. § 5.657(b). The family must supply any information requested by the owner of HUD for use in the annual reexaminations. Id. § 5.659(b)(2).

If a tenant fails to recertify her income, a project owner must comply with the requirements in HUD Handbook 4350.3:

5-15. FOR FAILURE TO RECERTIFY. If the owner sends the notices required by paragraph 5-6 [Recertification Notices] or 5-13 [Tenant Failure to Supply Interim Reports] ... and the tenant still does not supply the required recertification information, the owner must give the tenant a notice of intent to terminate assistance.... The notice must clearly advise the tenant that the assistance will be canceled unless the tenant meets with the owner’s representative and supplies the required information within 10 calendar days of the date of the notice....
b. If the tenant does not meet with the owner and supply required information within 10 calendar days of the owner’s notice of intent to terminate, the owner may stop assistance.
* 1. Following an action in 5-15(b), if the tenant meets with the owner after the 10-day period, but by the end of the calendar month, the owner may recertify the tenant and continue assistance.

(HUD’s Mot. to Dismiss Ex. 5 (HUD Handbook 4350.3 ¶ 5-15).) Not only may the owner discontinue assistance in the event of a tenant’s failure to recertify, such failure also constitutes a material breach of the tenant’s lease and justifies termination of the tenancy. See generally

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262 F. Supp. 2d 1369, 2003 U.S. Dist. LEXIS 8601, 2003 WL 21142171, Counsel Stack Legal Research, https://law.counselstack.com/opinion/5th-bedford-pines-apartments-ltd-v-brandon-gand-2003.