Through the years we have had several Section 8 tenants attempt to make a side payment agreement with us in an effort to entice us to accept their vouchers. We declined.
What are Section 8 side payments?
Let’s assume the asking rent for a unit is $2,500. The Housing Authority has authorized a maximum amount for the unit of $2,300. The owner and the tenant make an agreement that the tenant will pay the additional $200 outside of the agreement with the Housing Authority. This is considered a Section 8 side payment. It is illegal.
By making a side agreement the tenant could jeopardize losing their voucher. However, the Housing Authority has come up with a very creative way for the tenant to report the additional payment while remaining anonymous. The result could be quite lucrative for the tenant while extremely costly for the owner who participated.
In May 2014, the Housing Authority of Santa Clara County addressed a letter to Section 8 voucher tenants entitled “Confidential Rent “Side Payment” Survey.” The letter encourages the tenant to take a survey provided by Project Sentinel to assure their answers are kept confidential and their housing voucher status is protected.
The letter is posted on the Project Sentinel website at http://housing.org/. Project Sentinel does not share the survey information with the Housing Authority.
The survey consists of three questions:
1. In the past 6 years, have you (or anyone in your household) paid rent that was higher than the “tenant rent” amount listed on your most recent Housing Authority rent portion letter?
2. Currently, are you (or anyone in your household) paying rent that is higher than the “tenant rent” amount listed on your most recent Housing Authority rent portion letter?
3. At any time in the past, has a landlord requested or collected rent payments that were higher than the “tenant rent” amount listed on your most recent Housing Authority rent portion letter?
If you’re a landlord whose tenant can answer “yes” to any of these three questions you should be concerned.
According to Project Sentinel, a tenant may be awarded a refund of the total side payments made to owner. In addition, the tenant could be awarded $1,650 to $3,300 for each month they made a side payment to the owner, regardless of the amount of side payment. Refund payments can go back as far as six years.