Author Topic: HUD / Section 8 lease - termination for new ownership?  (Read 1359 times)

YoungStache

  • Stubble
  • **
  • Posts: 104
  • Location: California
HUD / Section 8 lease - termination for new ownership?
« on: August 26, 2018, 02:12:02 PM »
I am working with a wholesaler on a property that is under market value in Pennsylvania. The house is currented rented out to a section 8 tenant, with an HUD contract. The lease expired in February of this year, and is currently month to month.

Is it legal to give a 30-day notice to vacate due to new ownership? I want to make sure because if not, I would not want to purchase the property and have no desire to do section 8 housing. I want to make sure I'm not doing anything illegal. In the lease, it does say the lease can be terminated for economic or business reasons, such as sale / new ownership...

What's the best way of handling this? Would the previous owner be able to start the process as a condition of the sale?

neophyte

  • Pencil Stache
  • ****
  • Posts: 584
  • Location: A wretched hive of scum and villainy
Re: HUD / Section 8 lease - termination for new ownership?
« Reply #1 on: August 27, 2018, 06:58:47 AM »
Unless there are some restrictions on Section 8 that I'm not aware of, the seller should be able to terminate the lease with proper notice.  If I were you, I'd make it a condition of sale and make sure there's time for the tenents to move out before closing. That way if they refuse to vacate and have to be evicted, it's not your problem.

wbranch

  • Stubble
  • **
  • Posts: 183
  • Age: 32
  • Location: Some Mountain Ridge
Re: HUD / Section 8 lease - termination for new ownership?
« Reply #2 on: August 27, 2018, 07:22:31 PM »
Yes, we recently bought a duplex with month to month tenants and put it into agreement that seller had to give 30 day notice to vacate. They countered that they would do it after inspection contingency was completed, which we accepted. Unfortunately with timing of things, we ended up with the tenants for 1.5 weeks. They were very low quality but got them out with only a few days of unpaid rent... could have been worse.

YoungStache

  • Stubble
  • **
  • Posts: 104
  • Location: California
Re: HUD / Section 8 lease - termination for new ownership?
« Reply #3 on: August 28, 2018, 12:58:37 PM »
I'm working with a wholesaler, and they want to do as-is and close in 2 weeks. I left some voicemails and an email to the local Housing Authority, and I'm holding off on signing a contract until I find out more info.

I wonder if there's something I need to be approved for (like being a section 8 landlord/owner), before purchasing the property, or I inherit that month-to-month lease and can just submit new paperwork for increased rent?

Any experiences?

genesismachine

  • Stubble
  • **
  • Posts: 100
Re: HUD / Section 8 lease - termination for new ownership?
« Reply #4 on: August 28, 2018, 03:01:40 PM »
We just bought a duplex with section 8 tenants. Having no experience with the program, the administrator told me we needed to give 60 days notice per their program, but Portland says I have to give 90 days.

It depends on jurisdiction apparently, not just HUD

YoungStache

  • Stubble
  • **
  • Posts: 104
  • Location: California
Re: HUD / Section 8 lease - termination for new ownership?
« Reply #5 on: September 02, 2018, 01:01:30 PM »
All of the replies to this topic on the Bigger Pockets forums suggest that Section 8 is a privilege, that you should keep the section 8 tenant, and that the HUD approves market-rate rent.

The property management company seemed inexperienced with section 8 / Housing Choice Voucher program, and recommended to give a 60-day notice to vacate upon closing.

I will try to contact the HCV department to see if I can find out more info, because if they would approve market-rate rent, there would be no reason to terminate the current tenant's lease and spend money on updates and have to re-lease it.

blikeafox

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: HUD / Section 8 lease - termination for new ownership?
« Reply #6 on: September 02, 2018, 01:16:22 PM »
We bought a 2 family with an existing section 8 tenant and kept her. We had to fill out a packet (after the closing; one thing they needed to see was the warranty deed). It took about a month to process the paper work so we got 2 months rent once everything was set up, but it was pretty easy. I'm sure the process will vary based on your housing authority.

YoungStache

  • Stubble
  • **
  • Posts: 104
  • Location: California
Re: HUD / Section 8 lease - termination for new ownership?
« Reply #7 on: September 02, 2018, 02:11:49 PM »
We bought a 2 family with an existing section 8 tenant and kept her. We had to fill out a packet (after the closing; one thing they needed to see was the warranty deed). It took about a month to process the paper work so we got 2 months rent once everything was set up, but it was pretty easy. I'm sure the process will vary based on your housing authority.

Did you request a rent increase with the new owner packet? Did you contact the housing authority ASAP so they would withhold rent from giving it to the previous owner?

blikeafox

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: HUD / Section 8 lease - termination for new ownership?
« Reply #8 on: September 03, 2018, 11:41:26 AM »
We didn't request a rent increase, so not sure how it works. It is a basement apartment and the rent they had was max we could charge. We closed mid-month, so we did have enough time to get everything to them before the next rent payment was due, but in hindsight they probably would have given me the packet before closing. We still wouldn't have been able to turn it in for a couple of days after since we had to wait for the warranty deed to be recorded to get a copy.