In March 2006, the landlord of the Morton Gardens apartment complex in Los Angeles sent tenant Debora Barrientos and her neighbors "Notice(s) of Withdrawal from Section 8 Assisted Housing Program and Notice of Change in Terms of Your Tenancy," which stated that the tenants’ Section 8 tenancies were being terminated and that they would be charged full market rents going forward, according to court records.

The notices went on to provide that "(t)he owner/agent for the owner wishes to remove the Subject Premises from the Federally Assisted Section 8 Housing Program, and intends to rent the unit at market rents," and stated that the tenants’ options were to either pay the full market rent or move out.

The owner’s desire to remove the homes from the Section 8 program was the only reason provided for the change in terms/eviction.

The tenants submitted the notices for review to the Los Angeles Housing Department, which rejected the notices.

Then, the landlord sent new eviction notices to the tenants, elaborating that the rationale underlying the notice included terms in the contract and the Section 8 program guidelines that "allow(s) the landlord to terminate the rental agreement for a business or economic reason, including but not limited to, the desire to opt-out of the Tenant Based Section 8 Program and or the desire to lease the unit at a higher rental rate.

"Prior to the service of this notice, the landlord made a business decision to no longer participate in the Section 8 voucher program for your unit."

Because Section 8 is a federal program, the tenants filed suit to prevent their eviction in the federal district court, which ruled in their favor, finding the eviction notices to be invalid because they were not based on the permissible grounds for eviction under the Los Angeles Rent Stabilization Ordinance (LARSO).

The landlord appealed the matter to the Ninth Circuit Court of Appeals, which affirmed the lower court’s ruling.

First, the Court of Appeals rejected the landlord’s arguments that there were grounds for the evictions other than a desire to raise the rents, which is not a permissible grounds for eviction under the LARSO.

While the lower court acknowledged that the revised notices did state some undefined "business or economic reason" motivating the evictions, at no time prior to the court proceedings did the landlord specify what this "reason" might be, nor did the landlord at any time provide any evidence as to what the costs of their participation in the Section 8 program were (despite the argument at trial that the burdensome cost of participating was the "other business or economic reason").

Further, the Court of Appeals explained, the only other grounds for the eviction specified in the notices — the landlord’s desire to opt out of participating in Section 8 — is not a valid grounds for evicting a Section 8 tenant, given that Section 8 imposes a "good cause" requirement for evictions.

Even if the landlord had clearly specified "other business and economic reasons" for the evictions, the Court of Appeals elaborated, they would also have failed under the LARSO.

HUD’s Section 8 regulations do provide that evictions for "business and economic reasons" are possible, out of an expressly stated legislative intent to allow courts to strike a balance, on a case-by-case basis, between the economic rights of a landlord and the rights of Section 8 tenants not to be evicted except for good cause.

Where, as in this case, a local rent or eviction control ordinance applies, the Ninth Circuit declared, the good causes for Section 8 eviction are properly limited by a court to the good causes for eviction authorized under the local statute: the LARSO, in this matter.

As the LARSO does not recognize "business and economic reasons," this would not have been a justifiable rationale for the evictions in this matter, even if the landlord had proven the costs of participating in Section 8 to be economically burdensome. Accordingly, the trial court’s rejection of the eviction notices was upheld.

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