South-Western Legal Studies in Business

Once In Federal Rent Assistance Program, Landlord May Not Opt Out

New York high court held that once a landlord agrees to accept rent-assistance payments for low-income tenants under the Section 8 federal assistance program, the landlord may not opt out, as the federal rules become part of the lease.

Topic Real and Personal Property
Key Words

Lease, Tenant, Rent Stabilization, Section 8

C A S E   S U M M A R Y

Rosario lived in a rent-stabilized (rent-controlled) apartment for 30 years in New York City. The apartment was owned by Diagonal Realty, which has received Section 8 payments from the New York City Housing Authority (NYCHA). Section 8 is a federal program that provides housing assistance to low-income families by giving subsidies to landlords who rent apartments to them. Acceptance of Section 8 payments means the landlord is subject to Section 8 rules, NYCHA rules, and Housing Assistance Payments (HAP) rules. Diagonal informed NYCHA that it no longer wished to participate in the Section 8 program and refused further subsidy payments for Rosario. It moved to evict her from her apartment. She sued, seeking a ruling that landlords could not quit the Section 8 program. The trial court held for Rosario and the appellate division affirmed. Diagonal appealed to the high court of New York.


Affirmed. A landlord’s acceptance of Section 8 rent subsidy payments was a “term and condition” of the lease, within the meaning of New York’s Rent Stabilization Code. So that lease renewals must continue with that term and condition. Acceptance of Section 8 payments meant the landlord signed a contract stating that its rules became part of the lease.


Rosario v. Diagonal Realty, LLC, 872 N.E.2d 860 (Ct. App., N.Y., 2007)

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