In Montgomery Street Housing Urban Renewal, LLC v. Sheriff (June 2021), a property owner sued to evict a resident for lease violations relating to an unauthorized occupant. The New Jersey property, Montgomery Heights Apartments, is a Low-Income Housing Tax Credit (LIHTC) property with project-based Vouchers.
The rules of both programs require that income be established based on the income of all household members. The property’s occupancy standards require a minimum of three and a maximum of six household members for three-bedroom units. The property also had a procedure in place for adding new household members after the initial household moved in. This procedure required management approval and established eligibility of the new applicant.
On December 15, 2016, the defendant applied for a three-bedroom apartment at the property, stating that she was the head of a five-person household, which included herself and four children. She stated that she was separated from her husband and that she expected no additions to the household in the next 12 months. She also stated that there were no “temporarily absent” household members.
The application was approved, and the defendant signed a lease with an expiration of April 30, 2018. The lease specified that no more than one adult and four children could live in the unit and named the authorized occupants. The lease also permitted the landlord to terminate the lease with a 30-day written notice if any unauthorized occupant lived in the apartment.
In April 2018, the lease was renewed, and the defendant certified that the same people were in the unit as were there at move-in.
On January 2, 2019, a LIHTC self-certification was completed, certifying the same household members.
On April 11, 2019, management notified the tenant that an unauthorized male had been found to be living in the unit, and it was believed to be the resident’s husband. The resident was given until April 26, 2019, to remove the unauthorized occupant.
Instead of removing her husband, on June 6, 2019, the resident delivered a letter to management asking that her husband and son be permitted to apply to be added to the lease. On June 3, 2019, her husband had submitted a change-of-address form to the United States Postal Service, indicating that his mail should be sent to a post office box instead of the defendant’s apartment, where it had been sent.
On June 10, 2019, management sent the tenant a “LOW INCOME HOUSING TAX CREDIT NOTICE TO QUIT AND DEMAND FOR POSSESSION.” The tenant was advised that the lease would terminate on July 31, 2019. The reason for the termination was the unauthorized occupant.
The defendant did not vacate and on September 18, 2019, the landlord filed a complaint for possession. The defendant asserted that her apartment was large enough for herself and her five children, as well as her husband. She admitted that her 13-year-old son had moved in in August 2019 and that her husband had been “in and out” of the apartment since January 2019. On January 9, 2020, the trial court ruled in favor of the landlord, finding “there has been substantial non-compliance by unauthorized occupants.”
The defendant appealed, citing in part that “family reunification” does not constitute good cause to evict, that a seven-person occupancy did not violate LIHTC or HUD regulations, and that the eviction was contrary to law.
The appeals court determined that “a continuing substantial violation of a reasonable lease term after the tenant has received a written notice to cease, is one of the statutory good causes for eviction.” The court ruled that the language in the lease was “clear and unambiguous,” and that the provisions of the lease were reasonable and consistent with public policy. Based on this reasoning, the appeals court upheld the eviction due to unauthorized occupancy.
Owners of affordable housing properties should carefully review the language in their property leases relating to unauthorized occupancy. Make sure it is clear and precise. Also, when unauthorized occupancy is suspected, evidence and documentation of the lease violation will go a long way to ensuring the successful pursuit of the eviction.