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Park Village Apts. Tenants Ass'n v. Mortimer Howard Trust

636 F.3d 1150 (9th Cir. 2011).
After owner opted out of project-based Section 8 program, elderly tenants obtained preliminary injunction enforcing their federal statutory right to remain with enhanced vouchers.

After settlement of prior litigation concerning the owner's failure to comply with federal opt-out notice requirements (for details see Park Village pleadings under "Section 8 Opt-Outs -- Cases"), elderly tenants filed a separate action when the owner refused to accept their enhanced vouchers. They obtained a preliminary injunction enforcing their federal statutory right to remain with enhanced vouchers after owner opted out of project-based Section 8 program, which prevents rent increases and evictions, and requires the owner to take the steps necessary to participate in the enhanced voucher program.

On appeal, the Ninth Circuit affirmed the main part of the injunction preventing rent increases and evictions, but reversed that portion requiring the owner to execute the HAP contracts. The U.S. Supreme Court denied review on Nov. 28, 2011.

File includes complaint, tenants' motion for PI, PI order, order denying the owner's request for a stay; and appellate briefs and opinion.

1. Opening Brief of Owner - Appellants

• No federal statute gives these tenants a right to remain after the expiration of the HAP contract and after proper notice and expiration of the one-year waiting period.
• No federal statute requires Howard to accept such enhanced vouchers or to enter into contracts to facilitate the acceptance of such vouchers.
• Section 531 or Section 1437f(t) must be read in conjunction with 42 U.S.C. § 1437f(c)(8)(B), which recognizes a property owner’s right to evict tenants or raise rents after termination of the project-based contract, proper notice, and the expiration of that waiting period.

2. Answering Brief of Tenants - Appellees

• In the July 2008 notice, Howard certified that he would honor tenants’ right to remain with tenant-based enhanced vouchers. However, when attempting to increase the rent after the notice and prior injunction expired, the owner refused to honor his prior certification to accept enhanced vouchers.
• The enhanced voucher statute clearly establishes tenants’ right to remain, and the District Court properly relied on HUD’s policy statement to conclude that Tenants have a right to remain. All other courts have reached the same conclusion.
• Tenants’ right to remain under the enhanced voucher statute is not limited by the notice statute, 42 U.S.C. § 1437f(c)(8). The notice statute and the enhanced voucher statute exist independently. When read together, the statutes serve the same purpose of protecting tenants from involuntary displacement.

3. Reply Brief of Appellants

• The legislative history of 42 U.S.C. §1437f(t) concerns only HUD’s obligations to the tenant, not the owner’s obligations. HUD cannot insist that tenants leave when the owner’s project-based contract with HUD terminates; if a tenant elects to remain, HUD must provide an enhanced voucher. Section 1437f(t)(1)(B) does not create any rights or obligations of the tenant and the owner vis-à-vis each other.
• Section 1437f(t) does not contain, or refer to, any “right to remain.”
• While Section 1437f(c)(8)(B) does set forth a procedural requirement which must be satisfied before an owner is permitted to evict and to raise the tenant’s rent payment, it also recognizes that an owner may do so after proper notice and waiting period. Section
• 1437f(c)(8)(B) recognizes that owners do have the right to evict and to raise tenants’ rent payment after complying with Section 1437f(c)(8)(A).

4. 9th Circuit Opinion

• Affirmed in part, reversed and remanded in part.
• Owners are free to opt out so long as they respect the eligible tenants’ statutory right to remain. If owners are willing to forego significant rental income in order to avoid the obligations imposed by HAP contracts, they are free to do so.
• The statute does not authorize owners to raise rents to a reasonable market rate, while refusing to accept payment by means of an enhanced voucher, and evict an “assisted family” for nonpayment. The statute requires owners to permit tenants to remain in the complex while paying only their statutorily prescribed portion of the rent.
• The notice provisions in § 1437f(c)(8) must be harmonized with the later-enacted enhanced voucher provision in § 1437f(t)(1)(B). HUD has harmonized these two sets of tenant-protective provisions by requiring that the notice contemplated in § 1437f(c)(8) incorporate and refer to the “right to remain” provided by § 1437f(t)(1)(B).
• The district court did not abuse its discretion by entering an injunction preventing Defendants from evicting Plaintiffs for paying their pre-lawsuit Section 8 contribution, or from charging Plaintiffs an increased rent without accepting enhanced vouchers.
• Plaintiffs have not identified any statutory authority upon which to base a mandatory injunction compelling Defendants to enter voucher HAP contracts.

5. Petition for Rehearing En Banc

• Few will be willing to join the Section 8 program if this decision is allowed to stand.
• The three-judge panel’s finding of a right to remain is simply untrue, and its interpretation of the statutory history is unsound.
• The holding that tenants have an absolute “right to remain” cannot be reconciled with its holding that Appellants may not be compelled to sign new HAP contracts.

6. Owner’s Petition for Writ of Certiorari

7. Tenant’s Opposition

8. Owner’s Reply

9. U.S. Supreme Court’s Order Denying Certiorari

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