Owner Didn't Give Resident Proper Notice

Facts: A project-based Section 8 housing owner entered into an agreement to rent a unit with a resident in April 2009. The agreement, based on the HUD model lease, required the owner, with the resident's cooperation, to conduct a recertification of the resident's household income and composition at least once a year. In anticipation of the 2011 recertification, the owner gave the resident the necessary reminder notices. The resident attended her recertification interview and provided all the information and signatures that the owner required to calculate her rent. She responded before her April 1 anniversary date.

On March 29, the manager sent her a typed letter captioned "Lease Amendment," which informed the resident that she owed rent of $0, effective April 1, 2011, based upon the recently completed review of her income and household composition, and that she wasn’t due for recertification until April 1, 2012. The manager also informed her that he had attached a copy of the "Form 50059 Owner's Certification of Compliance with HUD's Tenant Eligibility and Rent Procedures and applicable worksheet(s)" and that she "should substitute these forms in place of the previous 50059 and worksheet(s), which are attached to your lease."

Finally, in this letter the manager informed the resident that she was to sign on the bottom of the notice to acknowledge her receipt of this information. The manager also testified that he wrote a note on the top right corner of the notice that stated: "Please come to the office to sign your annual recertification paperwork." The manager then sent a second copy of the letter on April 12, 2011, after the resident failed to respond to the earlier letter.

Nothing in either letter expressly informed the resident that the recertification was incomplete without her signature on the Form 50059 or that her rent would increase to $710 on May 1, 2011. On May 6, the owner notified the resident that her tenancy was being terminated for material noncompliance with the lease since she "failed to complete the annual recertification process.

After receiving the notice, the resident immediately contacted the manager and signed the Form 50059 and became recertified on May 20, with her anniversary date remaining on April 1. On May 27, 2011, the owner pursued an eviction action for failure to pay rent and damages for back rent.

The trial court ruled for the owner, finding that the resident, who had completed the recertification process for multiple years, became liable for market rent in May 2011 and failed to pay it. The resident appealed.

Ruling: An Ohio appeals court reversed the trial court's ruling.

Reasoning: The court ruled that the resident wasn’t properly notified. The model language in Exhibit 7-6 of the HUD Handbook is an appropriate way to obtain a resident’s outstanding signature. It clearly informs the resident of the need to go to the rental office to sign the Form 50059 within seven days. In contrast, the owner's notice informed her that her recertification was complete, and it never mentioned that she needed to sign the form, only that it was included and that she should substitute it for the previous year's form.

The owner also provided no evidence that the letter it sent to the resident on March 29 and resent on April 12 was based on a HUD model form, and nothing in the handbook suggests that it was. Therefore, the owner's notice didn’t properly inform the resident of her obligation to sign the Form 50059.

• Hidden Meadows Townhomes v. Ross, December 2012