Section 8 Protected Class STATUS? Property Managers Beware

By
Real Estate Services with RE/MAX Kai Lani

Well, here it is--Back Again!   The Oahu Chapter of NARPM has informed us that two bills have now been introduced at the Hawaii State Legislature that will make "source of income" a protected class. In other words, anyone with "legal income" (welfare, Social Security, Section 8) will become a protected class.

First off, I applaud NARPM getting involved in this issue.   I think, however, we may have a problem opposing this. The signs of the times are not with the rights of property owners.      

We at RE/MAX Kai Lani have changed our Property Management Policy and will consider section 8 applicants for any and all rentals that we are offering.  We insist that the tenants meet the same qualifications that we ask other tenants to meet:  1) Credit Report.  2)  Proof of Adequate income to pay rent.  3)  Suitable References.   Most do not qualify under the current law, but no one knows what the intended and unintended consequences of the proposed legislation will unleash once passed.   

There are at least two problems with the Administration of the Section 8 Program as it now stands:

1)  The requirement that we must put a tenant on an interim rental contract that has to be approved by the government is time consuming and confusing.   The time problem is a huge impediment in that owners lose rental income waiting for the system to process.   

            a. How do you complete the interim rental contract required by the government without obligating the property to the tenant? 

            b. While the Section 8 Administrator generally gets this done in two or three days, this remains costly to the owner in terms of lost rent for those two or three . . . or ten days. 

c. The bigger issue is that the tenant has us over a barrel so to speak in that once the process is in motion and the interim rental contract is in place, the tenant can drag out their moving into the property and moving out of another section 8 unit interminably thus causing huge losses of rental income to the owner.   Section 8 cannot start paying until the tenant clears the other section 8 unit in which the tenant may have been living.   We end up holding the bag while the tenant moves at his/her convenience.

2)  Equally difficult is that the property condition inspection of the property needs to be done prior to the tenant moving in and prior to the income flow starting.   Even though this is done expeditiously in terms of normal government responses, the two three or five days lost income is significant. 

From the perspective of a Property Manager, it is imperative that Section 8 applicants not be afforded "protected class" status in fairness to our owners. 

Jerry Bangerter, RA -- Property Manager, RE/MAX Kai Lani, Kailua, Oahu, Hawaii

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Location:
Hawaii
Groups:
It's all about them (ThemThem)
Politics And Real Estate
Property Management
Property Management Referrals and References
Silent Majority
Tags:
section 8
narpm
oahu
protected class
property manager
owner
rental income
hawaii state legislature
welfare
social security

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Rainer
17,001
Jerry Bangerter
RE/MAX Kai Lani

Thanks Diane!   It is a real concern to lose the flexibility we have had in freely choosing whether to service Section 8 clients, but I guess the problem has been that too many of us have chosen to lay down a blanket policy of no section 8 applicants at all.   This too we will survive, but it is just another complication in a complicated business.   I can't wait for your "Truth" article.   Go Girl, GO!   Jerry

March 03, 2009 03:36 AM
Rainer
227,208
Diane Rice
SFR, SRES, CNC
Diane Rice, Rice Prprty Mgmnt & Rlty, LLC, South Holland, IL

Jerry, did you read part one?  Here it is:  The TRUTH

March 03, 2009 04:43 PM
Rainer
17,001
Jerry Bangerter
RE/MAX Kai Lani

Diane, I just did, and I loved your observations.   Thanks for sending the easy connect link along for my convenience.  Jerry

March 03, 2009 04:51 PM
Rainmaker
320,458
Yolanda Hoversten
Broker - O Fallon, IL Real Estate
Prudential One Realty Centre

Hi, Jerry.  You know they only have good intentions in passing this kind of legislation.  :) They should be forced to go through this process before they impose their will on to the landlords.

April 26, 2009 03:42 PM
Rainer
17,001
Jerry Bangerter
RE/MAX Kai Lani

Hi Yolanda!   Sure, and . . . . water always runs uphill!    But, life is good, but what with the increased cost of electricity and with condo maintenance fees going up, up, up, and property taxes going up, up, up, soon there will not only be a shortage of "affordable" rentals, there will be a shortage of rentals across the board, and then prices will go up to where an investor will not cry at his property manager every month to hold down those maintenance costs.   But, then the tenans will be living five deep in these homes to be able to afford to live at all!   Cheers, Jer

April 28, 2009 10:07 PM
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Rainer
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Jerry Bangerter

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