Landlords! The rules for Section 8 applicants have changed significantly in recent years. Ignoring these new requirements could result in Fair Housing or Civil Rights complaints, which are not uncommon and can lead to costly fines ranging from $10,000 to $40,000+.
“No Section 8” policies are against the law since 2020 (SB 329). Landlords must respond affirmatively when someone asks if you accept Section 8 (tenant vouchers).
Income requirements for Section 8 applicants must be applied only to their portion of the rent (California Government Code 12955(o)). For example, if a tenant’s portion of the rent is $200, then a landlord can only require that they earn three times that amount—$600. This means that nearly all Section 8 applicants qualify based on income.
Blanket bans on applicants with a criminal record and policies that consider arrests without convictions are prohibited (Note - this paragraph applies to all applicants - not just Section 8 applicants).
Landlords should also be cautious about policies that automatically exclude Section 8 applicants. Under the legal principle of disparate impact, any policy that disproportionately affects a protected class may be deemed illegal. For instance, your policy could be legally problematic if your local Section 8 program only offers one-year leases and you exclusively offer month-to-month rentals.
A significant new law—SB 267—further modifies the screening process for Section 8 tenants. Specifically, landlords cannot run a credit report on a Section 8 applicant without first offering an alternative way for them to demonstrate their ability to pay rent.
SB 267 allows landlords to consider alternative forms of financial verification, including but not limited to:
Additionally, I believe phone bills and utility payments are good indicators of an applicant's ability to pay.
SB 267 acknowledges that traditional credit reports can be inaccurate or discriminatory when assessing the financial reliability of subsidized tenants. Many individuals have low credit scores due to factors beyond their control, such as medical debt or past financial hardships. The new law ensures Section 8 applicants are not unfairly excluded from rental opportunities.
While SB 267 requires adjustments to the tenant screening process, landlords can still find reliable ways to assess prospective tenants:
By understanding these legal changes and adjusting your screening procedures accordingly, you can remain compliant while maintaining effective tenant selection practices.
Giving credit where credit is due: SB 267 was authored and passed predominantly by Democrats, with one Republican vote, and signed into law by Governor Gavin Newsom (Democrat). You can read the full text of SB 267 here. SB 267 Amend Section 12955 of the Government Code relating to housing.
Disclosure: John Tiner is not an attorney, and Tiner Property Management is not a law firm. Do not consider this blog legal advice - seek legal advice from an attorney for your particular situation.
How to contact us: If you need help with your rental and would like to hire Tiner Property Management, please call 916-974-6003 or email info@tiner.com. To learn more about our services or read our other blogs, check out our website:
www.tiner.com.
About the author: John Tiner is the owner/CEO/broker of Tiner Property Management, a Sacramento-based property management company operating since 1976. Tiner Property Management manages 1,250+ homes with a 99.9% eviction-free track record.
Additional Resources:
CAA Section 8 Compliance Reminder
Consideration of Criminal History and Information in Housing
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