A recent court case provides a lesson in why it is a good idea for Owners/Agents (O/As) to have a policy requiring confirmation of the move-out of a household member prior to performing an interim recertification for a change in household composition. In the case of Greene v. HUD, June 2017, a New York district court ruled that HUD may have violated a residents due process rights when upholding her removal from the household composition of a unit.
Background
The daughter of a resident had lived most of her life at a Section 8 site. In or prior to 2007, without the daughter’s knowledge, her mother removed her from the household composition forms. The daughter actually never left the unit. When the mother moved out, the daughter attempted to take over the lease, but was denied because she was no longer a party to the lease.
The mother had verbally notified management in or before 2007 that the daughter no longer lived in the unit. There was no written request for the daughter’s removal and management did not require any evidence that the daughter had moved out. The mother admitted that she had been a drug addict at the time and could not remember what had actually happened. Recertification forms submitted by the mother from 2007 to 2011 did not list the daughter as a member of the household composition, yet the daughter lived in the unit the entire time. During that time, the daughter was employed and none of her income was counted, increasing the subsidy paid by HUD.
The mother indicated that for three years after removing her daughter, she tried to add her back to the household, but management refused. The owner told the mother that once a person was removed from a household, they could not be added later. The daughter was never added back to household composition.
The daughter sued HUD and the owner to challenge the denial of her Section 8 subsidy, alleging violations of the due process clause, and the constitutional safeguard against arbitrary denial of property by the government. HUD asked the court for a judgment without trial.
The court ruled in favor of the daughter, stating that the daughter’s removal from the housing composition deprived her of her entitlement to the continued receipt of the subsidy. HUD’s position had been that, under §3-16 of HUD Handbook 4350.3, removal of the daughter from the household composition made her ineligible for consideration as a remaining family member, and thus, ineligible for continuing Section 8 subsidy.
However, the court took the position that removal of the daughter, and refusal to add her back to household composition, deprived her of her property interest. The court noted that HUD regulations, the HUD handbook, and the site’s policy all require independent verifications when an individual is removed from household composition. HUD regulations require an owner to conduct annual reexaminations of family income and composition and to conduct interim recertifications upon a family’s request. HUD Handbook 4350.3, §3-27, indicates that owners may want to verify a family member’s departure from a unit. It was the property’s policy to require a notarized letter from the head of household, a notarized letter from the person moving out, and proof that the individual moved out, such as a new lease or phone bill. None of these steps were taken in this case. For this reason, the court ruled that the daughter was denied continued receipt of the Section 8 subsidy without her knowledge or consent and without notice or due process, in violation of the Constitution and applicable regulations.
Conclusion
This case indicates the importance of following company policies and procedures with regard to handling household recertifications. It also makes clear that properties may have policies requiring verification of a move-out prior to removing a person from household composition. While such a policy is not a requirement, it is permitted by HUD regulation, and is one that I recommend.