Leasing Procedure

Rent

The Brooke Amendment mandates that federally subsidized low-income residents pay 30% of monthly adjusted income* for rent. The U.S. Department of Housing and Urban Development (HUD) has traditionally interpreted "rent" to include certain utility costs. Therefore, Section 8 participants—as well as those receiving rental subsidies from other federal programs—pay 30% of monthly adjusted income for rent, plus a reasonable amount for utilities.

Rents in the Section 8 Voucher Program

The Voucher Program operates under Payment Standards (PS) which are determined by LTRAP in accordance with federal regulations. Like Fair Market Rents, Payment Standards are also published by bedroom size, but rather than stipulating a maximum amount of contract rent, they are the basis for determining LTRAP’s share of the rent. The following example illustrates:

A new Section 8 tenant and landlord agree that $1,250 is a reasonable rent for the landlord’s three bedroom unit.
LTRAP has determined that $350 is 30% of the tenant’s monthly adjusted income*.
LTRAP subtracts $350 from the three bedroom Voucher Payment Standard of $1,243 resulting in a subsidy of $893.
The tenant’s share of the rent is the balance of $357, ($1,250 less $893.)

LTRAP pays $893 directly to the landlord each month, and the landlord must collect $357 from the tenant.

Housing Choice Voucher Payment Standards**
Lakewood Township Residential Assistance Program, (LTRAP) 01/01/2010.

Bedrooms	Studio	1	2	3	4	5	6
Payment Standard	$811	$937	$1144	$1490	$1617	$1860	$2102
* Information is subject to change without notice. For additional information, please click here.

While utility costs do not figure directly into the calculation of Voucher subsidies, they are taken into consideration by LTRAP when establishing the Payment Standards.

The above examples generally illustrate the results of subsidy calculations for most Voucher holders, but may not reflect the influence of more complex factors where other regulations and policies apply.

Renting to or from Relatives

The following relatives are ineligible for rental assistance when renting from an owner: the Owner’s children, grandchildren, siblings, parents, and grandparents. In other words, if any member of the tenant household is a son, daughter, grandchild, parent, grandparent, or sibling of the owner they are ineligible to receive Section 8 assistance in that unit. Other relatives are not disqualified, such as nephews, nieces, aunts, uncles, cousins, and non-blood relatives such as a brother-in-law who owns the home in his own name, or a step-parent. In such cases, however, if there is a spouse who is a blood relative, that spouse may not have any ownership interest in the unit.

Rent Increases

Owners may request annual adjustments in the contract rent at least 120 days before the lease anniversary in accordance with the terms of the Housing Assistance Payments (HAP) Contract they have entered into with LTRAP. Such requests are reviewed under the same guidelines as the initial lease negotiations. Owners must be careful when requesting a rent increase. A rent reasonableness determination must be made by LTRAP, whenever a rent increase is requested. In cases where the rent reasonableness survey that comparable rents have decreased the owner’s rent increase request will be denied and the rents will be lowered in line with comparable market rents.

Requirements for Determining Rent Reasonableness

LTRAP complies with HUD requirements for determining rent reasonableness initially and during the term of a HAP contract by determining comparable rents for units that are "like and similar" to the assisted unit.

Q. Why are comparable rents required?

A: To insure that the contract rent approved for each unit under the HAP program is (1) reasonable in relation to the rents currently being charged for comparable units in the private, unassisted market and (2) not in excess of rents currently being charged by the owner for comparable unassisted units.

Q: When are Comparable rents required?

A: Comparable rents are required at the time of initial leasing; at the HAP contract anniversary date, and if there is any increase in the rent to the owner.

Q: How are comparable rents determined?

A: LTRAP purchased a web-based program to determine comparable rents. This program contains data of unassisted rental units in Lakewood. The proposed unit data is then entered into the system and is automatically matched with similar units to arrive at a comparable rent, or rental range.

Q: What criteria is used to obtain comparable rents?

A: The following criteria are used to compare units: location, size, type, quality and age of the units, amenities, housing services, maintenance and utilities provided by the owner.

Q: How do utilities provided by the landlord effect the comparable rent?

A: If utilities are provided by the landlord, the comparable rent will reflect an amount that includes utilities, or a mathematical adjustment will be made to allow for the difference.

Q: If the landlord has an unassisted unit in the building which is like and similar to the assisted unit which rents for more than the comparable the inspector found outside of the building, can the rent be based on the landlord’s unassisted unit?

A: No. HUD regulations require at least one comparable rent from a "like and similar" unassisted unit, not owned by the landlord.

Q: What will happen if a landlord is notified that the contract rent or the annual increase he requested will not be approved because the comparable rents are lower than his asking rent?

A: If the subject unit is a new unit that a Voucher Holder wishes to move into, the lease will not be approved, and the Voucher Holder cannot take the unit, unless the landlord agrees to lower the rent to the comparable rent. If the rent reasonableness study was performed for an annual rent increase request, the rent will be lowered to the comparable rent, if the rent is above the comparable range.
Deposits
The security deposit charged of Section 8 participants by the housing provider must be the same or less as that charged of non-subsidized tenants, and it must be fair and reasonable. LTRAP does not assist Section 8 participants with the payment of security or damage deposits.

Damages

Under HUD regulations, the tenant’s damage and/or security deposit is used to cover the cost of damages, just as in non-subsidized units. Under New Jersey State law, tenants are responsible for the damages they have caused.

Term of the Lease

The initial lease covers a term of 12 full months. If the lease begins after the first day of the month, it will end on the last day of that month in the following year. The lease can be terminated at any time with the mutual agreement of both landlord and tenant. After twelve full months, the lease can be renewed for an additional 12 months at each anniversary.

Utilities

Most Section 8 landlords in Lakewood pay for the cost of garbage removal/disposal. Other utility costs associated with the unit, (such as heat, lights, cooking, water heating, and water/sewer), may be paid by either the landlord or tenant, depending on the terms agreed to as part of the lease. Depending on the total utility arrangement, the total amount of contract rent received by the owner may be influenced upward or downward.
It is important to remember that both Section 8 tenants and landlords have significant obligations above and beyond the basic responsibilities required under state law, such as may be found in the Obligations of the Family, the Housing Quality Standards, and those agreed to in the Section 8 Lease and the Housing Assistance Payments Contract.

Avoiding Abatement

Q: What is an abatement?

A: An abatement is the suspension of Housing Assistance Payments (HAP) payments to the landlord because the landlord did not correct owner responsible deficiencies within the allowable timeframe.

Q: Why was my Section 8 HAP abated?

A: The most common cause for abatement is a Section 8 rental unit failing Housing Quality Standards (HQS). Landlords are responsible for ensuring that their units conform to HQS. Section 8 units that fail HQS inspection, either at the annual inspection or when a tenant calls the Housing Authority for a maintenance compliant, will have the HAP abated if you do not correct the deficiencies within the required timeframe. If the problem is a life threatening or a serious health and safety violation, you must correct the problem within 24 hours.

Q: How do I know what the deficiencies are in the unit?

A: The housing inspector will give you a copy of the inspection report which tells you what needs to be fixed in the unit. You will be given 28 days (or 24 hours for life threatening situations) to correct the problems. After 28 days (or 24 hours), the unit will be re-inspected.

Q: How do I avoid an abatement?

A: To avoid abatement, make sure that your units meet Housing Quality Standards (HQS) at all times. You should read LTRAP’s "Informational Booklet for Section 8 Owners." It gives you detailed information HQS requirements. If you do not have the booklet, contact your advisor. When the unit is scheduled for annual inspection, you may be present at the time of the inspection. We recommend that you inspect your unit before the annual inspection and correct any deficiencies you find before the inspection. If the housing inspector finds any problems in the unit which you must fix during the annual inspection, you must fix the problem(s) within 28 days (or 24 hours if it is a life threatening problem) when the unit will be re-inspected.

*Monthly Adjusted Income

*The term "monthly adjusted income" is used as defined in the Code of Federal Regulations at (1999)24CFR5.603 and 5.611, where it states, "…monthly adjusted income (means) one twelfth of adjusted income;" and "…adjusted income means annual income less…deductions."
24CFR5.611 further defines deductions as being (1) $480 for each dependent; (2) $400 for an elderly or disabled family; (3) for elderly or disabled families, disability assistance expense and/or medical expense in excess of 3% of annual income; and (4) child care expenses. Each deduction listed in the definition is further defined elsewhere in the CFR as to applicability.
The terms "monthly adjusted income, adjusted income, and annual income" all refer to income earned or received before taxes. Tenant rent is always calculated on pre-tax income and no other deductions or allowances apply.