What Constitutes “Good Cause” for Termination?

As a site owner or manager, you probably know that you can evict residents for lease violations. But there is another basis for eviction—independent of lease violations—known as termination for “good cause.” But what exactly is good cause?

If a household creates disturbances, engages in fights, or allows family members or guests to do anything that interferes with other residents at the site, you may have “good cause” to evict your troublesome residents, says Mark Chrzanowski, a trainer at the Gene B. Glick Company in Indiana, and an expert in HUD rules.

Lease Addendum Spells Out Grounds for Termination

HUD's Tenancy Addendum for the Section 8 Tenant-Based Assistance Housing Choice Voucher (HCV) Program gives a list of reasons an owner may have for terminating a resident's tenancy. According to HUD, the Addendum must always be attached to a resident's lease for a rental assisted unit.

Lease violations. The Addendum, which states that an owner may terminate a tenancy only in accordance with the lease and HUD requirements, provides as a ground for termination “serious or repeated violations of the lease” [par. 8(b)(1)]. One example of repeated lease violations is nonpayment of rent or chronic lateness in paying rent.

Criminal activity, alcohol abuse. Another basis listed in the Addendum is “criminal activity or alcohol abuse” [par. 8(c)(3)]. HUD's “One Strike” rule is an example of this legal basis. According to the One Strike rule, a resident who engages in any illegal activity, such as drug or alcohol abuse or violent conduct, may have rental assistance terminated based on a first offense.

For example, a resident of a New Jersey public housing authority (PHA) physically attacked her neighbor, who then filed a police complaint. The resident pleaded guilty to “simple assault” and disorderly conduct. The PHA sued to evict the resident based on a violation of the lease, which contained HUD's One Strike clause authorizing the PHA to terminate rental assistance and evict the resident for any “criminal activity” that threatens the safety of the premises or of other persons at the site.

The resident argued that simple assault and disorderly conduct were insufficient to constitute a crime as defined by New Jersey law, and that the eviction proceeding should be dismissed. But the New Jersey Superior Court ruled for the PHA. The court relied on principles of “statutory construction,” indicating that if Congress had wanted to enact a law that applied only to “crimes,” it would have done so.

The federal law incorporating HUD's One Strike rule imposes penalties for “criminal activity” that is broader than “crime” and includes offenses such as simple assault and disorderly conduct. Furthermore, the court reasoned that if it agreed with the resident's argument that simple assault was insufficient to trigger eviction, public housing could not be made safe, as mandated by federal law [Housing and Redevelopment Authority of the Township of Franklin v. Miller, November 2007].

Interference with other residents. There are other ways to get rid of undesirable residents, according to the HUD Addendum. “Any criminal activity that threatens the health or safety of, or the right to peaceful enjoyment of the premises by other residents” is a legal basis for you, as a site owner or manager, to terminate a resident's rental assistance [par. 8(c)(1)(a)].

Furthermore, if a household creates disturbances, engages in fights, or allows family members or guests to do anything that interferes with other residents at the site, you may have “good cause” to evict your troublesome residents.

Evicting Undesirable Residents for 'Other Good Cause'

The HUD Addendum also lists “other good cause” as a legal basis for terminating a resident's tenancy. The Addendum elaborates on that legal basis in paragraph 8(d), which states as follows:

(1) During the initial lease term, other good cause for termination of tenancy must be something the family did or failed to do.

(2) During the initial lease term or during any extension term, other good cause includes:

(a) Disturbance of neighbors,

(b) Destruction of property, or

(c) Living or housekeeping habits that cause damage to the unit or premises.

(3) After the initial lease term, such good cause includes:

(a) The tenant's failure to accept the owner's offer of a new lease or revision;

(b) The owner's desire to use the unit for personal or family use for a purpose other than use as a residential rental unit; or

(c) A business or economic reason for termination of the tenancy (such as sale of the property, renovation of the unit, the owner's desire for a higher rent).

These legal grounds for evicting an undesirable resident are largely self-explanatory: If a resident fails to maintain a unit properly (as in par. 2(c)), or is actively destructive toward its condition (as in par. 2(b)), or threatens the health, safety, or welfare of neighbors (as in par. 2(a)), you have a solid basis for getting rid of the undesirable resident. All these reasons are independent of the lease, being grounded in the HUD catch-all basis of “other good cause,” Chrzanowski says.

Failure to report income. Recently, courts have opened up an additional legal ground: eviction based on the resident's failure to report income.

For example, a Minnesota resident, who had been receiving voucher program rental assistance, added her then-boyfriend to the household in 2006. The local PHA received a HUD Enterprise Income Verification (EIV) report that between 2003 and 2005 the boyfriend received income that he did not report to the PHA.

After contacting the boyfriend's employer, who confirmed his employment, the PHA notified the resident that it intended to end her rental subsidy. The resident sought a hearing, at which an administrative law judge (ALJ) terminated her benefits. The resident appealed, arguing that she should not be deprived of rental assistance as a result of her boyfriend's failure to report income.

But the Court of Appeals of Minnesota ruled in favor of the PHA, ruling that the entire household was required to supply accurate information and that the resident, as voucher holder, was responsible for the actions of all members of her household. The resident had also argued that, absent any proof that she knew her boyfriend was not reporting income, she should not forfeit rental assistance. Again, the court disagreed, finding that her claim of ignorance about her boyfriend's income was not credible.

The record showed that during 2003 to 2005, two cars were purchased and registered to the resident and her boyfriend, the court said. In addition, the court had to presume that she knew her boyfriend was employed, because she herself rarely worked. And because they lived together, she must have known when he was working. The court also found that the ALJ's decision was proper, based on the evidence, and legally sufficient to terminate the resident's rental assistance [Rawlings v. Washington County Housing, July 2007].

Comply with Due Process Requirements

When you decide to evict, make sure you send the resident a thorough lease termination notice, Chrzanowski advises. The HUD Handbook spells out what the notice must include [Handbook 4350.3, par. 4-21]. For instance, the notice must give the reason for the lease termination and advise the resident that he or she has the right to meet with you to discuss the termination before you go to court.

Further Reading: For a related article, see “Residents Can't ‘Cure’ Criminal Activity to Avoid Eviction,” Insider, October 2008, p. 4.

Section 8 Tenant-Based Assistance Housing Choice Voucher Program, HUD, OMB Approval No. 2577-0169.

Insider Source

Mark Chrzanowski: Training Specialist, Gene B. Glick Co., 8425 Woodfield Crossing Blvd., Ste. 300W, Indianapolis, IN 46240; (317) 469-5885; mchrzanowski@glickco.com.

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