Resident Can Be Evicted for Concealing Her Income

Facts: In the late 1990s, a resident became employed for the first time as a bookkeeper. But she failed to disclose her new earnings to the site owner, each year stating in an affidavit of income that she didn’t work. This omission allowed her to pay a substantially lower rent than she would have had she revealed the income.

When housing authority officials discovered the misrepresentation, the resident was charged criminally with grand larceny in the third degree. In July 2008, she pleaded guilty to a reduced charge of petit larceny and received a conditional discharge, upon her agreement to repay the housing authority in monthly installments totaling $20,000. Thereafter, the housing authority sought to evict her on the grounds of non-desirability, misrepresentation, non-verifiable income, and breach of rules and regulations.

During the hearings, she admitted that she failed to report her income. She also testified that her three children, two of whom have learning disabilities, live with her, and that she needed a larger home for her family, but couldn’t afford to rent one. The hearing officer ruled that, despite the plight of the family, termination of her tenancy was the only appropriate outcome.

She then challenged this determination in court. She contended that the penalty of termination was so harsh as to constitute an abuse of discretion as a matter of law. For the first time, she claimed that eviction might leave her homeless. And she included documentary evidence concerning her sons’ learning disabilities and the negative impact on their schooling should the family be forced to move to a homeless shelter. The trial court upheld the housing authority’s determination.

However, an appeals court reversed the ruling and sent the case back to the housing authority for a lesser penalty. It concluded that termination of the tenancy was so disproportionate to the offense, in light of all the circumstances, as to shock the judicial conscience. The housing authority then appealed this decision.

Ruling: New York’s highest court reversed the appeals court’s decision.

Reasoning: The court ruled that the lower court didn’t consider any analysis about how probable it was that the resident’s eviction would result in homelessness. While the resident testified that she couldn’t afford a larger unit, she didn’t claim at her hearings that she would become homeless if evicted. Her lawsuit in trial court had no affidavit to that effect or any support for her claim. Nor was it alleged that the resident would lose her job or be forced to resign if she were obliged to move. She knowingly and intentionally concealed her income from the housing authority for seven years. Therefore, the court ruled that termination of her tenancy wasn’t so disproportionate to the offense, in the light of all the circumstances, as to be shocking to one’s sense of fairness.

• In the Matter of Jacqueline Perez v. Rhea, February 2013