Implications on Federal Legislation on Voucher and Certificate Programs

Petitioner Sava Holding Corporation operates and owns an eighteen-unit residential development in New Jersey. The verbal contract of the lease provides that the tenants of the building pay monthly rent while leasing. Respondent Nellie Martinez. , a sixty-five-year-old widow, had been a tenant for six years, whose only source of income was the monthly Social Security benefits which was just enough to pay for the monthly rent of $450, later reduced to $425.

The leased building is regulated by the West New York Rent Control Ordinance. During the course of her tenancy, respondent later qualified as beneficiary to a Section 8 voucher to be used as substitute payment for rent which can likewise be redeemed by the landlord from the West New York Housing Authority or any of its instrumentality. Thereafter, respondent furnished the necessary documents of her qualifications and gave the voucher to the landlord to pay for her next month’s rent.

However, inasmuch as the landlord has never been a participant to the Section 8 program or other federal rental assistance program, it refused to accept said voucher because it was wary of being entangled with the tedious process of claiming receipt inherent in the complex “bureaucracy” of the program. A few months later, by virtue of non-payment, the landlord filed a summons and complaint against respondent.

In due course, the trial court held that Sava is not obliged to accept a Section 8 voucher and that the state statute prohibiting refusal can not hold sway before the voluntary nature of the federal Section 8 program of U. S. C. A. The said ordinance is preempted by the Supremacy clause. The trial court ordered respondent to pay the total rent due and a judgment of possession was thereafter entered.

This prompted respondent to a file a notice of appeal through which the Appellate Court division reversed the decision of the trial court and upheld the prohibition against the landlord to refuse the vouchers under the N. J. S. A. ordinance. Accordingly, it held that there was no conflict between the state statute and the federal law. The clauses are complementary to each other in the pursuit of regulating housing rent under state subsidy and both are aligned with the state policy regarding the security of affordable housing for low-income people. In addition, pending appeal, Sava transferred and sold the building to Franklin Tower One, L. L. C. , herein petitioner, which assumed economic interest as to the outcome of the litigation.

II. Issues of the Case The case filed before the Supreme Court of New Jersey is on whether or not N. J. S. A. 2A:42-100 is a valid prohibition against a landlord from refusing to accept a Section 8 voucher from a tenant who later becomes qualified for state benefits during the period of her tenancy, while the same landlord has not participated in the rental assistance program of federal law Section 8 before.

Corollary to the issue on appeal is the question whether N. J. S. A. , prohibiting a landlord to refuse voucher payments, preempts or is contrary to the spirit and tenor of Section 8 of the Housing and Community Development Act of 1974 where it makes the participation of the landlord under a federal policy for affordable houses and rent voluntary. Anent the issue of the case, the Supreme Court adumbrated the legislative history and intent of both the Section 8 housing assistance program and the N. S. J. A.

Accordingly, the Section 8 program was enacted to give aid to low-income families “in obtaining a decent place to live and of promoting economically mixed house” 42 U. S. C. A. 1437 f(a). It was established by the Housing and Community Development act of 1974 which superseded the United States Housing Act of 1937. Section 8 authorizes the state “to enter into annual contribution contracts with local public housing authorities so that they may make assistance payments to owners of existing welling units, id. (b).