Owner May Be Liable for Breach of Contract

Facts: A former Section 8 resident sued the local PHA and an owner for alleged housing discrimination and breach of contract. The resident claimed that after making written promises to transfer the resident to a new unit free of dangerous inhalants, the owner refused to deliver keys to the new unit.

The resident had sought medical assistance for shortness of breath, which she believed was caused by mold in her unit. She was advised by a doctor not to return to her unit until an independent inspection had been performed to determine the presence of mold.

The PHA allegedly advised the resident to seek another unit. She claimed that the owner agreed to allow her to transfer to another unit as long as she provided notice that she would vacate her unit within 30 days. The resident claimed that her daughter provided the required notice on her behalf via email.

The resident claimed that the owner notified her that the new unit wasn’t available and offered her another one instead. But the owner then allegedly informed her that she wouldn’t be able to move into the unit as expected because the rent for the unit was too high and she didn’t qualify to receive housing assistance for that unit. The resident claimed that this is tantamount to an eviction from her original unit and that the PHA terminated her access to the voucher program. The owner asked the court to dismiss the resident’s claim.

Ruling: The South Carolina district court denied the owner’s request to dismiss the resident’s breach of contract claim.

Reasoning: According to the court, to find a breach of contract accompanied by fraudulent acts, there must be: (a) a breach of contract; (b) fraudulent intent relating to the breaching of the contract and not merely to its making; and (c) a fraudulent act accompanying the breach. Here, the court stated the resident had sufficiently pled a breach of contract claim.

The breach of contract was the owner’s failure to transfer the resident to the new unit, and the fraudulent act existed in the owner’s insistence that the resident sign an early termination agreement accompanied by a general release that stripped her of the ability to seek all legal and equitable remedies. Further, the breach allegedly occurred when the owner “failed to deliver the keys to the new apartment, as promised, on September 30, 2015.” Consequently, the court denied the owner’s request to dismiss the resident’s breach of contract claim.

• Hunt v. S.C. State Hous. Fin. & Dev. Auth., September 2019