Public Housing: Possible Fraud Problem... Need help ASAP.

[NewLandlordIL]

What is the name of your state (only U.S. law)? IL

This is my first time experience with public housing (commonly known as Section 8).

I got a tenant who is with public housing. At the time of rental application with the govt., she asked me to put lower amount then the agreed rent else govt won't agree to pay its share. She promised to pay whatever extra by her own. She also told me that she's been doing this for long time and even gave references of her earlier landlords (who confirmed). We sigend the first lease with actual amount, her lease period, security deposit, etc.

As part of the application process, the govt. asked me to provide a copy of the lease signed with the tenant. Without realizing the consequences, I took the existing lease changed the rent and the lease period. Since govt. processing takes time and the tenant wanted to move in early, the offical lease period is two weeks after her actual move in (per first lease).

That's when the problem started: The govt. after signing the lease changed the amount it promised to pay and lowered the figure. They then asked me to sign that document which I did, making the tenant the primary payer unlike the earlier terms.

Just to keep discussion short... a number of problems got developed with the tenant resulting in breakdown of the relationship with her and she has now informed the govt. agency that I am asking her to pay MORE!!!

I am surprised she did that, may be thinking that I'll lose more than she'll. But the question is:

1. Am I committing fraud? And, if yes, what will be the consequences of that?

2. What is the value of the first lease that the tenant signed with me? Can I use that as an evidence? OR due to the second lease (for the govt) the first one is now illegal?

3. Will it help my cause if I try to prove that the tenant herself is causing fraud? For instance, in the first lease she put name of her husband that she didn't put in govt. application. May be, her joint income disqualifies her. When I broght the second lease for her signing she said that she'd call her husband name as one of her other sons living in FL (meaning that it is the son).

PLEASE HELP.

[Hot Topic]

So, it's okay to encourage fraud -altering the amount of the rent - because you've confirmed that other landlords have done the same thing?

You took the other lease and knowingly, willingly, changed the rent and the lease period. Don't treat us like idiots and expect us to believe you didn't know there could be consequences.

You committed fraud; however, I can't tell you what the exact consequences will be.

The first lease is fraudulent due to your change. It always has been.

You willingly engaged in fraud against the government. You cannot make your partner the scapegoat.

[rhinocl]

I am a Section 8 landlord. You are in serious danger of going to prison on this. You need to hire an attorney who is well versed in federal housing law right now to try and limit your exposure to punishment.
Once you put this behind you remember:
1)NEVER TAKE ADVICE FROM SOME ONE ON THE OPPOSITE SIDE OF THE NEGOTIATING TABLE-the tenant in this case.
2)Any time some one says let's do the deal this way and write the paperwork that way, you are probably at risk of committing a fraud-run away or run it by an attorney or insist on writing the paperwork your way.

[NewLandlordIL]

Originally Posted by Hot Topic

So, it's okay to encourage fraud -altering the amount of the rent - because you've confirmed that other landlords have done the same thing?

You took the other lease and knowingly, willingly, changed the rent and the lease period. Don't treat us like idiots and expect us to believe you didn't know there could be consequences.

You committed fraud; however, I can't tell you what the exact consequences will be.

The first lease is fraudulent due to your change. It always has been.

You willingly engaged in fraud against the government. You cannot make your partner the scapegoat.

I agree it was really silly on my part to get into it in the first place. However, when I signed the first lease with the tenant I never knew about the Section 8 laws and only saw the agreement once the application was filed.

Even on the application I filled the original rent amount and I'd to change the figure and initialize it once the tenant told me that the housing authority won't accept it.

Besides getting an attorney, what else I can do on immediate basis?

P.S. It was really really stupid on my part but it may be due to special/critical nature of my wife's pregnancy and I was distracted. Again, it is not a legal excuse but my frame of mind. I am not a cheater in any way and have always been upfront in my dealings.

[NewLandlordIL]

Originally Posted by rhinocl

I am a Section 8 landlord. You are in serious danger of going to prison on this. You need to hire an attorney who is well versed in federal housing law right now to try and limit your exposure to punishment.
Once you put this behind you remember:
1)NEVER TAKE ADVICE FROM SOME ONE ON THE OPPOSITE SIDE OF THE NEGOTIATING TABLE-the tenant in this case.
2)Any time some one says let's do the deal this way and write the paperwork that way, you are probably at risk of committing a fraud-run away or run it by an attorney or insist on writing the paperwork your way.

Will it help if the lease has started just two months ago and govt has just paid me less than $ 1,000/- in one payment? I asked them to stop the payment till some of the lingering issues are resolved but they were processed by that time.

[Cvillecpm]

You should be asking your question on the Mrlandlord Q&A forum....more landlords with experiences similar to yours who can respond appropriately

[NewLandlordIL]

Originally Posted by Cvillecpm

You should be asking your question on the Mrlandlord Q&A forum....more landlords with experiences similar to yours who can respond appropriately

Thank you. I'll check that site as well.

What I am not sure is whether I need to hire a real estate attorney or a criminal attorney? May be you or someone else can shed somelight on that.

Also... what can be the best outcome I can expect and strive for... a deferred sentence with some fine?

[Hot Topic]

A landlord who doesn't thoroughly understand the Section 8 rules shouldn't deal with Section 8 renters. Alterations on government documents aren't "silly." They constitute fraud. You don't seem to get that, with your talk about deferred sentences and fines.

Man up and admit that you did what you did because you wanted to; stop using your wife's pregnancy, the other landlords and the renter as excuses.

You've already been told that you need to hire an attorney well versed in federal housing law. Find one at quickly as you can, and remember that upfront people don't get into this kind of situation.

[BL]

Originally Posted by NewLandlordIL

What is the name of your state (only U.S. law)? IL

This is my first time experience with public housing (commonly known as Section 8).

I got a tenant who is with public housing. At the time of rental application with the govt., she asked me to put lower amount then the agreed rent else govt won't agree to pay its share. She promised to pay whatever extra by her own. She also told me that she's been doing this for long time and even gave references of her earlier landlords (who confirmed). We sigend the first lease with actual amount, her lease period, security deposit, etc.

As part of the application process, the govt. asked me to provide a copy of the lease signed with the tenant. Without realizing the consequences, I took the existing lease changed the rent and the lease period. Since govt. processing takes time and the tenant wanted to move in early, the offical lease period is two weeks after her actual move in (per first lease).

That's when the problem started: The govt. after signing the lease changed the amount it promised to pay and lowered the figure. They then asked me to sign that document which I did, making the tenant the primary payer unlike the earlier terms.

Just to keep discussion short... a number of problems got developed with the tenant resulting in breakdown of the relationship with her and she has now informed the govt. agency that I am asking her to pay MORE!!!

I am surprised she did that, may be thinking that I'll lose more than she'll. But the question is:

1. Am I committing fraud? And, if yes, what will be the consequences of that?

2. What is the value of the first lease that the tenant signed with me? Can I use that as an evidence? OR due to the second lease (for the govt) the first one is now illegal?

3. Will it help my cause if I try to prove that the tenant herself is causing fraud? For instance, in the first lease she put name of her husband that she didn't put in govt. application. May be, her joint income disqualifies her. When I broght the second lease for her signing she said that she'd call her husband name as one of her other sons living in FL (meaning that it is the son).

PLEASE HELP.

What have you received from .Sec 8 besides their rent share ?

If it hasn't gone that far ,just the tenant is complaining you want more , adhere to the lower amount , then end the lease when it's up per proper notice .

You agreed to it and should have known if something happened ,you'd be stuck with it .

[DeenaCA]

Your tenant isn't on the public housing program; public housing is "the projects". Your tenant is on the voucher program ("Section 8").

It's going to be tough to show that you didn't know the program rules, since you signed a contract with the local housing authority ("HAP Contract"). Under the terms of that contract, you certified that you would not accept any side payments above the contract amount. You also certified that no-one would live in the unit except those listed in the (fraudulent) lease. You can review the HAP contract at [url]http://www.hud.gov/offices/adm/hudclips/forms/files/52641.pdf[/url].

1. Am I committing fraud? And, if yes, what will be the consequences of that?

Yes. This is taxpayer money and HUD and law enforcement take fraud seriously. The possible consequences include fines of up to $11,000 for each individual incident of accepting side payments. In 2007 a court fined a landlord $33,000 for accepting six side payments of $60 each. See [url=http://www.thefederalregister.com/d.p/2008-07-10-E8-15663]Notices: OIG Fraud Alert; Bulletin on Charging Excess Rent in the Housing Choice Voucher Federal Register [FR Doc E8-15663] [Docket No. FR-5230-01][/url].

2. What is the value of the first lease that the tenant signed with me? Can I use that as an evidence? OR due to the second lease (for the govt) the first one is now illegal?

Thie first lease might show that the tenant agreed to the fraud. The housing authority staff has likely seen many cases in which the tenant offered to make side payments, then claimed that it was all the landlord's idea when things went bad.

3. Will it help my cause if I try to prove that the tenant herself is causing fraud? For instance, in the first lease she put name of her husband that she didn't put in govt. application. May be, her joint income disqualifies her. When I broght the second lease for her signing she said that she'd call her husband name as one of her other sons living in FL (meaning that it is the son).

You and the tenant both committed fraud. It's really important that you inform the housing authority that the husband is living in the unit, and provide them with the lease showing his name. This will enable the housing authority to terminate the voucher assistance for this tenant. The tenant will also have to repay any overpaid subsidy based on the husband's income. If you don't report this, the tenant might be able to move on and scam the next landlord.

[Baranov]

As part of the application process, the govt. asked me to provide a copy of the lease signed with the tenant. Without realizing the consequences, I took the existing lease changed

the rent and the lease period. Since govt. processing takes time and the tenant wanted to move in early, the offical lease period is two weeks after her actual move in (per first lease).

That's when the problem started: The govt. after signing the lease changed the amount it promised to pay and lowered the figure. They then asked me to sign that document which I did, making the tenant the primary payer unlike the earlier terms.

Just to keep discussion short... a number of problems got developed with the tenant resulting in breakdown of the relationship with her and she has now informed the govt. agency that I am asking her to pay MORE!!!

Deny! Deny! Deny!
and only accept the funds outlined on the lease agreement.

Then turn the tenant in for fraud regarding her husband.

[NewLandlordIL]

Originally Posted by Baranov

As part of the application process, the govt. asked me to provide a copy of the lease signed with the tenant. Without realizing the consequences, I took the existing lease changed


Deny! Deny! Deny!
and only accept the funds outlined on the lease agreement.

Then turn the tenant in for fraud regarding her husband.

I am sure the tenant must have covered her basis and have kept the stubs of the money orders she gave to me and that can be tracked.

[NewLandlordIL]

Originally Posted by Hot Topic

A landlord who doesn't thoroughly understand the Section 8 rules shouldn't deal with Section 8 renters. Alterations on government documents aren't "silly." They constitute fraud. You don't seem to get that, with your talk about deferred sentences and fines.

Man up and admit that you did what you did because you wanted to; stop using your wife's pregnancy, the other landlords and the renter as excuses.

You've already been told that you need to hire an attorney well versed in federal housing law. Find one at quickly as you can, and remember that upfront people don't get into this kind of situation.

I am not shying away from saying that I screwed up and its my mistake no one else's.

Having said that I mentioned other side factors to show that I couldn't pay much attention to where I should have. Its not that I am trying to be a cry baby and most of what I've mentioned won't stand in a court of law but I was putting it to provide context.

Would you be able to suggest some checks I should make and questions should ask when hiring someone?

[Baranov]

Originally Posted by NewLandlordIL

I am sure the tenant must have covered her basis and have kept the stubs of the money orders she gave to me and that can be tracked.

OK, you are screwed since you already have accepted funds.

Time to sit down with the tenant and have her retract her statement. You can mention the part about her husband on the lease. You can agree to charge only the stipulated amount on the lease and reimburse her for the overcharges. The downfall is whether or not she has provided proof to the housing auth.

[debtcollector`]

Originally Posted by Baranov

OK, you are screwed since you already have accepted funds.

Time to sit down with the tenant and have her retract her statement. You can mention the part about her husband on the lease. You can agree to charge only the stipulated amount on the lease and reimburse her for the overcharges. The downfall is whether or not she has provided proof to the housing auth.

Or the tenant over paid and he returned cash to her, since otherwise, she would have been late on the rent. ...

DC