ALJDEC

99-L527652891-MCH · Maricopa County Housing Department · 1999-06-28

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: June 28, 1999. APPEARANCES: Geneva A. Sutton, Representative of the Maricopa County Housing Department (“Housing Agency”), appeared on behalf of the Housing Agency. Jackie Izaguirre, Respondent, appeared on her own behalf.

ADMINISTRATIVE LAW JUDGE: Kip M. Micuda _____________________________________________________________________ The hearing in this matter was held for the purpose of determining whether the Housing Agency is justified in canceling the Section 8 Tenant- Based Assistance it pays and administers on behalf of Respondent. Evidence and testimony were presented and, based upon the entire record, the following Findings of Fact, Conclusions of Law, and Recommended Decision are made:

FINDINGS OF FACT 1. Respondent has received Section 8 Tenant-Based Assistance from the Housing Agency since the late 1980’s. She continues to receive such benefits pending the outcome of the instant matter. 2. During the summer of 1995, Respondent leased a residence—contract unit--located at 32230 S. Center, Wittman, Arizona, from her mother Carol Cook. During the same time, Ms. Cook entered a Housing Assistance Payments Contract (”Contract”) with the Housing Agency. As part of the Contract, Ms. Cook certified that Respondent “does not own or have any interest in the contract unit.” (Housing Agency’s Exhibit B, Part B, Section 13(e)). Execution of both the lease and the Contract sanctioned housing assistance payments to be paid by the Housing Agency to Ms. Cook on Respondent’s behalf. 3. The instant matter arises out of the Housing Agency’s investigation into information related to it by the Arizona Department of Economic Security. The information indicated that Respondent, not her mother, owns the contract unit. As a result its investigation, the Housing Agency notified Respondent, on December 4, 1998, of its intent to cancel her housing assistance due to violations of federal regulations, including fraud. 4. The preponderance of the evidence establishes that Ms. Cook owned the residence in issue prior to May 1995. Because she could not qualify on her own to refinance the home, Ms. Cook and Respondent agreed that the home would be titled in Respondent’s name and that Respondent would apply to refinance the home. The preponderance of the evidence establishes further that Ms. Cook actually conveyed the home to Respondent and that Respondent did, in fact, refinance the home. Neither Respondent nor Ms. Cook disclosed these facts to the Housing Agency. 5. In August 1995, Respondent and Ms. Cook completed two different forms of a quit-claim deed to transfer the house back to Ms. Cook. Again, neither Respondent nor Ms. Cook disclosed these facts to the Housing Agency. In any event, neither of the quit-claim deeds was properly recorded with the Maricopa County Record’s Office. As a result, the transfer back to Ms. Cook was unperfected. Indeed, the record presently reveals that the home has yet to be properly conveyed from Respondent to Ms. Cook. 6. Respondent testified that she did not intend to misrepresent anything to the Housing Agency and that she acted unknowingly in light of the applicable law. At the very least Respondent should have known the consequences of her actions above. She should have reviewed carefully the documents she obtained from the Housing Agency, and should have made an inquiry of the Housing Agency or legal counsel if she had questions.

APPLICABLE LAW Section 982.1(a) of Volume 24 of the Code of Federal Regulations (“C.F.R.”) outlines the purpose and structure of the tenant-based programs of United States Department of Housing and Urban Development (“HUD”): 1. The HUD rental voucher program and the HUD rental certificate program provide rent subsidies so eligible families can afford rent for decent, safe and sanitary housing. Both programs are administered by State, local governmental or tribal bodies called housing agencies (HAs). HUD provides funds to an HA for rent subsidy on behalf of eligible families. HUD also provides funds for HA administration of the programs.

2. Families select and rent units that meet program housing quality standards. If the HA approves a family’s unit and lease, the HA contracts with the owner to make rent subsidy payments on behalf of the family. An HA may not approve a lease unless the rent is reasonable.

3. In the certificate program, the rental subsidy is generally based on the actual rent of a unit leased by the assisted family. In the voucher program, the rental subsidy is determined by a formula, and is not based on the actual rent of the leased unit.

4. In the certificate program, the unit rent generally may not exceed a HUD-published fair market rent for rental units in the local housing market. For most families, the subsidy is the difference between the unit rent and 30 percent of adjusted monthly income. In the voucher program, the subsidy for most families is difference between 30 percent of adjusted monthly income and a “payment standard” that is based on the HUD-published fair market rent. If the unit rent is less than the voucher payment standard, the family pays a smaller share of the rent. If the unit rent is more than the payment standard, the family pays a larger share of the rent.

Subsection (b) explains further tenant-based and project-based assistance: 1. Section 8 assistance may be “tenant-based” or “project- based”. In project-based programs, rental assistance is paid for families who live in specific housing developments or units. With tenant based assistance, the assisted unit is selected by the family. The family may rent a unit anywhere in the United States in the jurisdiction of an HA that runs a certificate or voucher program.

2. Except for project-based assistance under the certificate program (covered in 24 C.F.R. Part 983), all assistance under the certificate and voucher programs is “tenant-based”. After the family selects a suitable unit, the HA enters into a contract with the owner to make rent subsidy payments to the owner to subsidize occupancy by the family. The contract only covers a single unit and the specific assisted family. If the family moves out of the leased unit, the contract with the owner terminates. In the tenant based programs, the family may move to another unit with continued assistance so long as the family is complying with program requirements.

Section 982.551 outlines the participant’s obligations. Subsection (j) states that “[t]he family must not own or have any interest in the unit.” Section 982.552(b) adds that a Housing Agency may terminate program assistance for a participant, for any of the following, in part: 1. If the family violates any family obligations under the program (see §982.551). xxx 5. If any member of the family commits fraud, bribery or any other corrupt or criminal act in connection with any federal housing program.

CONCLUSIONS OF LAW 1. The Housing Agency has jurisdiction over this matter, under Title VI of the Civil Rights Act of 1964. 2. The Housing Agency has the burden of demonstrating by a preponderance of the evidence that it may terminate housing assistance it pays and administers on behalf of Respondent. Cf. 24 C.F.R. §982.555(e)(6); 60 Federal Register (“F.R.”) 34687-34692; Culpepper v. State of Arizona, 187 Ariz. 431, 437-38, 930 P.2d 508 (Ariz. App. 1996). Proof by “preponderance of the evidence” means that the evidence is sufficient to persuade the finder of fact that the proposition is “more likely true than not.” In re Arnold and Baker Farms, 177 B.R. 648, 654 (9th Cir. BAP (Ariz.) 1994). It “is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (rev. 6th ed. 1990). 3. With respect to Respondent’s alleged interest in the home she has rented since mid-1995, the Housing Agency sustains its burden of demonstrating that Respondent owns the home, in violation of C.F.R. §982.551(j). As a result, the Housing Agency sustains also its burden of demonstrating that Respondent violated C.F.R. §§982.552(b)(1) and (5).

RECOMMENDED DECISION In view of the foregoing, it is recommended to the Housing Agency that it cancel Respondent’s Section 8 Tenant-Based Assistance. Done this day, July 12, 1999.

______________________________________ Kip M. Micuda Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 1999, to:

Maricopa County Housing Department Joanne D'Amico, Executive Director 2024 North 7th Street, Suite 101 Phoenix, Arizona 85006-2155

By ___________________________

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826