SCOV Law Blog: Housing authority takes the heat

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Editor’s note: This analysis of a recent Vermont Supreme Court ruling is by Daniel Richardson, the founder of SCOV Law Blog.

Bennington Housing Authority v. Lake, 2012 VT 82.

In the practice of law there are cases that come to your doorstep mid-process. That is the client has done things a certain way for a long enough time that whether you agree with the steps they have taken or not, you are going to have to defend it in court.

This is why lawyers make the big bucks and what infuriates the public so much. How can you defend your client’s actions, they ask? The answer is we have no choice. The client did what he or she did. Our job is to just put the best face on it and go forward.

I am not sure if today’s case was such a situation, but the rapidity with which the SCOV disposes of the legal issues suggests that the plaintiffs had it wrong long before the attorney stepped in to prosecute.

Here is the lowdown. Plaintiff is a public housing authority. That is it is an agency that provides low-income housing in the Bennington area to needy individuals and families through either housing subsidies or through the administration of its own government subsidized housing.

Today’s case involves the latter and is essentially an eviction case for the non-payment of rent. Or at least, it started that way.

When fuel rates started going up, plaintiff instituted a policy that would fine tenants if they were caught with their windows open on days where the temperature was below 40 degrees.

Why would a person open a window in the middle of winter? The SCOV does not explain, but one suspects one of two things: negligence or an older heating system. If you have ever lived on the second floor of house with steam heat, you know that it can get sub-tropical on a regular basis. Poor insulation combined with a heating system that has two settings (off and full bore) can make even the most dedicated hothouse flower open the window for a little relief.

Of course, the heat escaping is essentially money out the window, and to a landlord squeezed by reduced resources, it is an insult and a cost the landlord will not bear.

So someone, somewhere in plaintiff’s organization came up with the brilliant idea to police the property and begin fining tenants caught with their windows up. The fines were quite harsh: $50 for the first two days and $75 every day thereafter. Make no mistake the SCOV notes later that the potential fines for leaving a window up for the entire month ($2,200) greatly exceeds cost of the potential heating lost ($965).

As might be expected, several tenants were caught, and as is common in low-income households, they were unable to make rent and the additional fine payments.

This led to a meeting between the individual tenants and plaintiff’s executive director. The parties achieved no resolution. Plaintiff sent a follow-up letter, but tenants still were unable to pay. An action for defendants’ ejectment from the apartments followed shortly thereafter.

The main problem with plaintiff’s case stems from the fact that it is a public housing authority and subject to federal housing authority regulations. Despite plaintiff’s arguments that the regulations do not apply, the SCOV rules at the beginning of the case that the rules apply.

This ruling is fatal to plaintiff’s case. There are three glaring issues with plaintiff’s process that make its ejectment action in proper. All three stem from the federal regulations and bring a tart response from the SCOV.

The SCOV begins with the final meeting between the executive director and the defendant tenants. This meeting was ostensibly to warn the tenants that they needed to pay back rent and fines or face eviction. Such a meeting, though, had to come with notice that tenants were entitled to grieve the executive director’s decision and how to do it. As you can imagine, neither the meeting nor the follow-up letter contained any such information. Plaintiff did make an oblique reference to the lease language on grievances, but it is couched in such technical terms that it does not meet the federal regulation in either letter or spirit.

Moving backward, the SCOV finds the same defect in the plaintiff’s notice of fines and repairs that charged tenants for violations of the open window policy (not to be confused with the early 20th century “open door policy” by which various Western powers exploited China). The notice of fines and violations did not include any information about the tenants’ grievance rights or even notification of the grievance process.

If there are problems, the grievance process is the best way for the housing authority and tenant to work things out. In this case, there needed to be a serious conversation with tenants about their open windows. The SCOV suggests that a proper regulation coupled with a grievance process could have resolved this well short of court action.

As with the notice of eviction, the lack of notice of the tenants’ right to grieve is fatal, and the SCOV affirms the dismissal of these bills.

Finally, the SCOV goes back to the beginning and finds that the open window penalties were excessive and exceeded the plaintiff’s authority as a public housing authority. Federal law allows a housing authority to impose two charges beyond rent: for repairs to excess wear and tear, and for excess utility usage. Open windows do not fall into either category.

As you can tell, the tone of the SCOV decision is somewhat curt, bordering on harsh. When an agency is subject to federal regulations and by extension an administrative grievance process, the purpose is usually two-fold.

First, the clients or tenants of the agency are low-income/high-need groups to whom the agency should be serving. After all, if a housing authority will not house these individuals, who is likely to? The rules discourage the type of summary process that stacks the deck against these individuals and removes the benefit upon which they rely.

Second, the administrative grievance process is intended as an in-house conflict resolution system. If there are problems, the grievance process is the best way for the housing authority and tenant to work things out. In this case, there needed to be a serious conversation with tenants about their open windows. The SCOV suggests that a proper regulation coupled with a grievance process could have resolved this well short of court action. Ignoring the grievance process brought things to a head but not in a permissible manner, and the plaintiff is dinged three times as a result.

And with that, defendants are entitled to resume their tenancy in what is likely the happiest rental property on earth. Plaintiff, meanwhile, will no doubt be settling in with a copy of Volume 24 of the Code of Federal Regulations for what should be a bracing read.

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