Impact Fund Stands With Low-Income “Section 8” Tenants
Rianna Hidalgo, Law Fellow
Impact Fund Appointed Class Counsel in Class Action Lawsuit Challenging Illegal Charges for Section 8 Tenants
Denika Terry, a single mother of two, relied on rental assistance to afford her apartment near Sacramento. As part of the federal Housing Choice Voucher Program, also known as “Section 8,” Terry’s portion of the rent was fixed based on her income. A housing agency paid the rest directly to her landlord. The agency initially set Terry’s personal rent responsibility at $0 because of her extremely limited income.
But throughout Terry’s tenancy, her property manager demanded that she pay for “additional services,” such as laundry machines, renter’s insurance, and parking—including for a period when she did not own a car. When she couldn’t pay, they tried to evict her.
Terry was not alone. Wasatch Property Management and its related entities, whose portfolio includes more than 16,000 units across five states, charged hundreds of Section 8 tenants similar fees, using 3‑day notices to threaten eviction when tenants failed to pay.
Hundreds of Section 8 tenants were charged fees for “additional services” and then threatened with eviction.
The Housing Choice Voucher Program was created to provide very low-income families with safe, clean, and affordable private housing by limiting participants’ rent payment to no more than 30 to 40 percent of their income and subsidizing the rest. When property managers demand side payments from Section 8 tenants, a practice prohibited by the rules, they undermine the purpose of the program.
There are more than 300,000 households in California with federal housing vouchers. The program disproportionately serves people of color, who are more likely to face housing insecurity, homelessness, and high rental cost burdens because of America’s history of racist and discriminatory policies.
In November 2021, Impact Fund joined the federal class action lawsuit filed by Ms. Terry and others, representing more than 2,000 Section 8 tenants who have lived at Wasatch properties in California and bringing a federal false claims action spanning four states.
Plaintiffs Denika Terry, Tamera Livingston, and Roy Huskey III say that Wasatch violated state and federal law by demanding additional rent from Section 8 tenants in the form of a lengthy list of service charges, from washers and dryers to a credit reporting system called “Rent Plus.” They also allege that Wasatch applied any payments to service charges before rent, a strategic practice that would enable Wasatch to pursue eviction for unpaid service charges.
Plaintiffs filed the case U.S. ex rel. Denika Terry v. Wasatch Advantage Group, LLC, in 2015. The U.S. District Court for the Eastern District of California certified the class of California residents in 2018. Original Class Counsel Centro Legal de la Raza and Law Offices of Andrew Wolff, P.C., were later joined by Goldstein, Borgen, Dardarian & Ho and now the Impact Fund.
Impact Fund is proud to stand with California tenants and our co-counsel to hold property managers accountable to our state’s lowest income residents.
To learn more, read the complaint.
UPDATE 11.23.22
The Eastern District of California granted our motion for summary judgment, finding that amenities charges paid by tenants were excess rent and violated the Section 8 contract. The Impact Fund will keep fighting to make sure that tenants receive refunds of the unlawful charges.