Contracting and Rent

 

Owner FAQs:  General Questions    Contracting and Rent    Finance and Ownership    Tenant Issues and Terminations

When a family with a Section 8 voucher applies to rent a unit, the family will provide the owner with an Owner Information packet that contains information about the Section 8 Program.  The packet includes a Request for Tenancy Approval form.  Once the Los Angeles County Development Authority (LACDA) receives a completed Request for Tenancy Approval form and any required attachments from the owner, staff will contact the owner to schedule an inspection of the rental unit.

The purpose of the inspection is to:

- Confirm that the previous tenant has vacated the rental property
- Ensure the unit is in decent, safe, and sanitary condition
- Verify that the proposed rent amount is reasonable for the unit

The LACDA determines rent reasonableness based on factors including size, quality, and amenities.  After the unit passes a Housing Quality Standards (HQS) inspection, and the LACDA has all of the necessary documents, the LACDA and the owner enter into a Housing Assistance Payments (HAP) contract. Payment responsibilities will be established once the LACDA and the owner sign the HAP contract.

You must use your own lease.  The LACDA will review it to make sure it complies with program requirements.  The lease must contain Utility and Appliance responsibilities. 
You may collect a security deposit from a Section 8 tenant.  The security deposit amount must be in line with State and local law and cannot exceed amounts collected from non-Section 8 tenants.  For more information, please refer to the California Tenant Guidebook on the Department of Consumer Affairs website.

The LACDA does not provide security deposit assistance to families.
Payment Standards are used to calculate how much rent subsidy the LACDA can pay an owner on behalf of a Section 8 tenant. The Payment Standards do not limit or affect the amount of rent an owner may charge or the Section 8 tenant may pay.  A Section 8 tenant can select a unit with rent that is below or above the Payment Standard; however, a tenant is not allowed to pay more than 40% of their income toward rent in the first contract year.  (Note: These Payment Standards do not apply to the LACDA’s Section 8 Moderate Rehabilitation Program).

The Payment Standard is the amount generally needed to rent a moderately-priced dwelling unit in the local housing market.  The LACDA sets this amount between 90% and 110% of the Fair Market Rent that the U.S. Department of Housing and Urban Development (HUD) determines each year for Los Angeles County.

Setting Payment Standards at this level keeps them high enough to ensure that quality housing is available, and also keeps them in a range that allows us to assist as many families on the waiting list as possible.

Under the Section 8 Program, the LACDA subsidizes housing costs, so that low-income families can pay an affordable percentage of their monthly adjusted income towards rent.  The LACDA encourages families to find rental units that are affordable based on their income.  The payment standard will be used to calculate how much the LACDA contributes to the rent payment. 

If the unit’s gross rent (rent plus utilities) is equal to or below the payment standard, the family’s contribution is based on 30% of their income, and the LACDA subsidizes the balance.  If the unit’s gross rent exceeds the payment standard, the family will need to contribute a larger percent of their income towards rent. In a family’s first year in a contracted unit, their rent portion is not allowed to exceed 40% of their monthly adjusted income. For an explanation of how the rent is calculated please click on the link Rent Calculation Explanation. 

How Much Owners Can Charge

The rent you charge should be comparable to the rent of other privately rented units, and it must not be higher than what you would charge a non-Section 8 tenant.  The LACDA bases approval of a proposed rent solely on a rent reasonableness test.  Rent reasonableness is determined on a case-by-case basis.  We compare your proposed rent to the rents currently charged by other owners for comparable units in the area.

Comparable Units

Comparable units are units that are of the same number of bedrooms, unit type, age and quality, taking factors such as amenities and facilities into consideration.  Comparable units must be in the same area, which the LACDA defines by census tract. The LACDA generally relies on non-Section 8 units to determine comparability with the private market, though a Section 8 unit may be calculated into a rent reasonableness test under certain circumstances.

Charging More than Approved by the LACDA

The Section 8 tenant must pay only the amount approved by the LACDA.  Any amount paid by the tenant other than the authorized amount is considered an unauthorized side payment, and is considered grounds for termination of the housing assistance contract and may adversely affect your ability to participate in the program in the future. The LACDA may approve payments for extra services or amenities, such as parking spaces or appliances (other than range and refrigerator).  However, any payment agreement between the tenant and owner, for items not included in the lease, must be made in writing, and pre-approved by the LACDA.

Requesting an Increase

A rent increase may be requested at any time after the initial term of the lease and in accordance with any rent increase provisions specified in the lease. If the request is approved, the owner may not request another rent increase during the twelve month period from the effective date of the last approved rent increase.  Owners whose rent increase requests are denied can resubmit a rent increase request at any time in the future. 

Owners may submit a rent increase request by fax, mail, or online via the Rent Café owner’s portal. If you are submitting a rent increase request by fax or mail, please use the LACDA Rent Increase Request form located here  Rent Increase Request Form. 

If the Section 8 rental unit is in a complex of five (5) or more units, you must submit information on your last three (3) most recently leased unassisted rental units of like or similar characteristics to the subject rental unit. The LACDA defines “most recently leased” as leases entered into within the last twelve (12) months.

Your rent increase request must be in accordance with the terms of your lease and the HUD tenancy addendum.  The LACDA will deny rent increase requests made during the first 12 months of the lease, or from owners whose contracts are in abatement for owner violations.

When the LACDA receives a rent increase request, the proposed rent amount is subject to a rent reasonableness test.

Timeline to Process an Increase Request

The LACDA will process the rent increase requests within 30 days of receipt.  You may check the status of your rent increase request by contacting your tenant's case manager.

Please remember that rent increase requests will be paid retroactive to the approved date.  Meanwhile, please do not charge the tenant for the increase.

Denials and Appeals

The LACDA's decision is final.  The LACDA uses an independent contractor service to determine rent reasonableness for new units and for rent increase requests. The independent contractor utilizes continually refreshed market data and a reliable, commonly-accepted statistical methodology.

If a cost or service covered in the lease (utility responsibility or appliance ownership, security deposit, maintenance) changes, the tenant must be served with a 30-day notice regarding the change(s), and a copy must be sent to the LACDA. The tenant and owner must sign a new lease, and a new contract must be signed by the owner and the LACDA.