Q: I heard that I can circumvent the obligation to accept Section 8 tenants and reduce the risk of being sued for discrimination by offering a month-to-month lease. I'm looking for a second opinion.
A: You are correct in saying that Section 8 will refuse to subsidize tenancies when there is a month-to-month lease agreement. The minimum is 12 months. If you choose to do this, however, it should be a uniform policy of offering month-to-month tenancies in all of your rental units, rather than singling out any particular dwelling.
Having said that, we don’t recommend leasing vacant units out on a month-to-month basis because you are shooting yourself in the foot.
If you elect to do month-to-month tenancies, you exclude a large pool of prospective candidates who want stability in their lives with a 12-month lease. These rental applicants will likely be more appealing than someone who is looking for a place to flop monthly.
In other words, if you have a preconceived notion that Section 8 tenants will be problematic, a month-to-month lease may only attract a group of people who end up being undesirable; while you are attempting to exclude unwanted tenants, this month-to-month policy may be a magnet for those you don't want to rent to.
Owners have a love-or-hate relationship with Section 8. It’s a trade-off to have guaranteed money in the door from the government and the red tape that comes with it.
We want to put an asterisk on those housing providers in Oakland who may have to potentially wait months to collect the tenant’s portion of the rent because before we can serve a 3-day notice demanding rent, it must reach a certain threshold; the amount owed must be equivalent to fair market rate, as determined by HUD.
Keep in mind, there are a myriad of fair housing laws and housing providers cannot summarily deny tenancies because the applicant has a housing voucher, as we explain here.