For over three decades, Sonia Rosario has lived in a New York City rent-stabilized apartment and, for a good chunk of that time, has received benefits from the Tenant Based Assistance: Housing Choice Voucher Program , commonly known as "Section 8."
In February 2003, Rosario's landlord, Diagonal Realty, LLC, informed her that it would no longer accept Section 8 payments. When Rosario did not tender the full rent herself, Diagonal commenced a non-payment proceeding in the New York County Civil Court.
Rosario then brought suit in New York County Supreme Court seeking a declaration that Diagonal could not "opt out" of the Section 8 Program. The Supreme Court agreed and granted summary judgment in Rosario's favor; an outcome which was affirmed by the Appellate Division, First Department , and the New York State Court of Appeals .
New York's Rent Stabilization Code is a regulatory scheme that affords tenants an array of protections. One such protection is that landlords are required to provide renewal leases to these tenants "on the same terms and conditions as the expired lease, except where the owner can demonstrate that the change is necessary in order to comply with a specific requirement of law ...."
The state's highest court concluded that the acceptance of payments made by the Section 8 Program is a "term and condition" of the parties' lease. Thus, a landlord who has accepted Section 8 payments on behalf of a rent-stabilized tenant may not later refuse to do so.
Diagonal argued that it was not required to continue accepting Section 8 payments due to a change in federal regulations allowing landlords to terminate participation in the program "without cause" upon the expiration of the lease. This new regulation, Diagonal contended, preempted the state's Rent Stabilization Code.
The Court of Appeals rejected that interpretation and was of the opinion that Congress intended to allow state protections to remain in place when federal protections for Section 8 tenants were repealed.
Thus, while "free-market" Section 8 tenancies may end upon the expiration of a lease term, rent-regulated Section 8 participants remain "untouchable."
For a copy of the Court of Appeals's decision, please use this link: Rosario v. Diagonal Realty, LLC