Section 8 Protected Class STATUS? Property Managers Beware

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