Fair Employment and Housing Act Does Not Compel Landlords To Accept Section 8 Housing Assistance Payments

In Sabi v. Sterling, (— Cal.Rptr.3d —-, Cal.App. 2 Dist., April 8, 2010), a California Court of Appeal considered whether a tenant could state claims against her landlord for violating the Fair Employment and Housing Act (“FEHA”) and the Unruh Civil Rights Act because the landlord refused to accept rent subsidy payments under the Federal Section 8 program. The Court of Appeal held that the tenant could not state a claim because the law cited by tenant does not compel landlords to accept Section 8 housing assistance payments.

Facts

Elisheba Sabi (“Sabi”) suffers from several physical and psychological disabilities. She has lived in an apartment owned by Donald T. Sterling and the Donald T. Sterling Corporation (“Landlord”) since 1987. In 1998, Sabi and her husband applied to the Housing Authority of the City of Santa Monica (“Authority”) for Section 8 assistance. Section 8 assistance payments are made under a federal program to aid low-income families in obtaining adequate housing. Authority notified Sabi and her husband they were eligible for assistance and Authority issued the couple a voucher in July 2003.

Landlord rejected Sabi’s request to accept Section 8 assistance payments and refused to participate in the Section 8 program. Despite Landlord’s repeated rejection of Sabi’s request to participate in the program, Sabi and her family concluded that it would be best if she continued to live in the apartment she rented from Landlord. Sabi continued to pay rent at her apartment and Landlord had not asked her to vacate the apartment.

Sabi brought a lawsuit asserting Landlord discriminated against her in violation of the FEHA and the Unruh Act because of her disabilities, her source of income, and her status as a recipient of Section 8 housing. After the trial court dismissed most of Sabi’s causes of action, a jury found Landlord had not violated the FEHA.

Decision

Discrimination based on source of income is prohibited by the FEHA, specifically Government Code section 12955. Sabi claimed Section 8 payments constitute a source of income under the FEHA. The court rejected Sabi’s claim finding Section 8 payments are not a source of income.

The court conducted an extensive analysis of the legislative history of section 12955 and amendments to this statute. Subdivision (p) of Section 12955 defines source of income as “lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant.” In 2004, the Legislature added the following sentence to subdivision (p): “For the purposes of this section, a landlord is not considered a representative of a tenant.” The court characterized the voucher issued to Sabi as an indication of eligibility to receive Section 8 assistance, not a payment of money. The court found that such “vouchers are not income under any definition of income.” The court further found “Section 8 assistance payments to the landlord are not payments to a representative of a tenant” and are not included in a tenant’s income. The operative effect of the amendment to section 12955, subdivision (p) “is to make clear that a Section 8 assistance payment to a landlord is not income to the tenant.”

The court concluded that nothing in the 1999 or 2004 amendments to section 12955 indicates that the Legislature intended to compel landlords to participate in the Section 8 program. Although the Legislature recognized that some landlords refuse to participate in the Section 8 program, it found that the record in this case does not indicate that the Legislature intended to enact legislation to compel landlords to participate in the program.

The Unruh Civil Rights Act at Civil Code section 54.1 provides that a person leasing, renting or otherwise providing real property shall not refuse to make reasonable accommodations when such accommodations are necessary for an individual with a disability to have an equal opportunity to use and enjoy the premises. Sabi still resided in the apartment she rented from Landlord. Sabi, however, asserted Landlord’s refusal to accept the assistance payments under Section 8 interfered with her use and enjoyment of the apartment. The court rejected this argument finding that “it is foundational to a claim” under this provision of the Unruh Act “that the rules, policies, practices, or services in question actually impinge on the tenant’s use and enjoyment of the premises.” That is not the case here because Sabi still had the use and enjoyment of her apartment. Accordingly, the Court of Appeal affirmed the decision of the trial court rejecting the FEHA and Unruh Civil Rights Act claims.

Questions

If you have any questions concerning the content of this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.

Jon E. Goetz | 805.786.4302