CLAIM: The plaintiffs—landlords who participate in the Housing Choice Voucher program—alleged that their local housing authority did not comply with the Housing and Economic Recovery Act of 2008, which, among other things, issues standards for determining rent reasonableness under the HCVP. The plaintiffs sought approximately $120,924 and $155,016 for past rent increase amounts not paid by the housing organization.
DETAILS: HAI Group removed the case to federal court and filed a motion to dismiss, arguing that the plaintiffs based their claims on Section 8 of the U.S. Housing Act of 1937 and its implementing regulations, but failed to consider the 2010 Moving to Work Agreement between the housing authority and HUD. The court noted that the MTW Agreement authorized the housing authority to “develop a local process to determine rent reasonableness,” which may “differ from the current mandated program requirements” of the 1937 act and its implementing regulations, and otherwise waives certain regulatory requirements. The housing authority had done just that. Operating within the MTW program, it implemented methods for setting reasonable rents and for reviewing rent increase requests and payment standards, which HUD approved each year. The court found that because the alleged contractual obligations upon which the plaintiffs based their claim are not applicable to the housing authority by operation of its 2010 MTW Agreement, no relief may be granted based on the factual matter contained in plaintiffs’ complaint.
OUTCOME: HAI Group successfully defended the claim, and the housing organization was dismissed from the matter. The plaintiffs have since filed an appeal.