Requiring Landlords to Continue Accepting Section 8

Rosario v. Diagonal Realty, LLC, Index No. 402448/04 (Sup. Ct. N.Y. Co.)

Nature of Claims: This action challenges the refusal of rent stabilized landlords and landlords who receive J-51 tax benefits to continue participating in the Section 8 program when a tenant's Section 8 lease expires.

Background: The New York City Rent Stabilization Code (9 N.Y.C.R.R. § 2522.5 (g) (1)) requires a rent stabilized landlord to renew a lease on the same terms and conditions as the expired lease. The New York City Administrative Code (§ 11-243(k)) prohibits any housing owner who receives a “J-51” tax benefit from denying the housing "or any of the privileges or services incident to occupancy" because participation in or being eligible for Section 8. The plaintiffs in this case argue that these provisions require rent stabilized landlords and landlords who receive J-51 tax benefits to renew participation in the Section 8 program when a tenant's Section 8 lease expires.

Current Status: On July 2, 2007, the New York Court of Appeals sustained the plaintiffs’ position in all respects. The Court noted that federal law requires all Section 8 landlords to include, in the leases they sign with Section 8 recipients, a tenancy addendum specifying that the tenant is participating in the Section 8 program. Consequently, the Court held, participation in Section 8 is a “term and condition” of any rent-stabilized lease and must be renewed when the lease expires. This requirement is not, the Court held, preempted by federal law. Likewise, the anti-discrimination provision of the J-51 statute is not preempted by federal law. Rosario v. Diagonal Realty, LLC, 8 N.Y.3d 755, 840 N.Y.S.2d 748 (2007), ), cert. denied, 128 S. Ct. 1069 (Jan. 14, 2008). As a result of this case, 60,000 rent stabilized tenants who have section 8 vouchers are protected against eviction should their landlords desire to exit the Section 8 program.

Related Actions: Daly v. M/S Capitol LLC, 44 A.D.3d 313, 844 N.Y.S.2d 194 (1st Dep't 2007); Ortiz v. Five Seven Naught Assocs., Index No. 402804/05 (Sup. Ct. N.Y. Co.)

No. Persons Affected: An estimated 60,000 Rent Stabilized tenants have Section 8 vouchers.

Reported decisions: Rosario v. Diagonal Realty, LLC, 9 Misc. 3d 681, 803 N.Y.S.2d 343 (Sup Ct, NY Co. 2005), aff'd, 32 A.D.3d 739, 821 N.Y.S.2d 71 (1st Dep't 2006), aff'd, 8 N.Y.3d 755, 840 N.Y.S.2d 748 (2007), cert. denied, 128 S. Ct. 1069 (Jan. 14, 2008).