Opinion ID: 2341820
Heading Depth: 1
Heading Rank: 4

Heading: Effect on Tenant Holding Over Statute

Text: The requirement of good cause is but one prong of petitioner's argument. The other is that the requirement gives to petitioner a right or entitlement to continued occupancy and thus effectively converts a fixed-term lease into an indefinite one that continues in existence and does not expire until the end of the extended use period. This is based on the notion that, as good cause is required to terminate the tenancy, the tenancy cannot be terminated simply because the underlying lease expires. That second prong, indeed, is the linchpin of her argument that the tenant holding over statute is inapplicable because, until the expiration of the extended use period, she cannot be a tenant holding over. Consistently with our interpretation of 26 U.S.C. § 42, we agree with petitioner that her tenancy may not be terminated solely because of the expiration of her leasethat good cause is required to evict even as a tenant holding overbut we do not agree that she cannot be a tenant holding over, that the lease is one that continues indefinitely until the end of the extended use period. At one time, the law may have supported petitioner's view of an indefinite lease. Prior to the consolidation of the certificate and voucher programs in a new § 1437f( o ) in 1998, the leasing provisions governing those programs were contained in § 1437f(d)(1)(B), which provided, in relevant part, that (1) the lease between owner and tenant had to be for at least one year and shall contain other terms and conditions specified by the Secretary, and (2) the owner could not terminate the tenancy except for serious or repeated violation of the terms and conditions of the lease, for violation of applicable Federal, State, or local law, or for other good cause. Section 1437f(d)(1)(B)(iii) through (v) listed certain conduct that would be cause for termination. In 1995, the Secretary adopted new regulations for the certificate and voucher programs. See 60 FR 34660 (July 3, 1995) adopting new 24 C.F.R. § 982.309. Those regulations required the lease to be for an initial term of at least one year and to provide either [f]or automatic renewal for successive definite terms (e.g., month-to-month or year-to-year); or ... [f]or automatic indefinite extension of the lease term. § 982.309(b)(1) and (2). It provided that the term of the lease would terminate if the owner, the tenant, or the two together terminated the lease, but stated that, during the term of the lease, the owner could not terminate the lease except for good cause. §§ 982.309(b)(3), 982.310(a). In proposing those regulations, the Department noted that they were intended merely to confirm and clarify the existing principle that the tenancy continues automatically after the end of the initial lease term and that [t]here is no need or requirement for the parties to execute a new lease or lease extension as [t]he automatic extension is provided for in the lease originally executed by the landlord and family. 58 FR 11292 (Feb. 24, 1993). It continued: The difference between an automatic indefinite extension and an extension for pre-defined definite terms is only a difference of form. For all program tenancies, the owner may only terminate the tenancy for statutory good cause grounds, whether during the course of the initial or extended term, or at the end of the initial or any extended term. In this respect, tenancies in the Section 8 tenant-based programs differ from private unassisted tenancies, where the owner may typically evict the tenant without cause at the end of the lease term. In the tenant-based Section 8 programs, simple expiration of the lease term is not grounds for termination of tenancy.  Id. Under that regime, most of the few courts that considered the matter concluded that the requirement of good cause applied not only during the term of the lease but after the lease expiredthat it governed as well the decision whether to renew or extend the lease. In Swann v. Gastonia Housing Authority, 502 F.Supp. 362, 365 (W.D.N.C.1980), aff'd in part, 675 F.2d 1342 (4th Cir.1982), the District Court observed: The purpose of the Act would be frustrated if a landlord were allowed to participate in and take advantage of the economic security provided to landlords under the Act, and yet the tenant were stripped of any reciprocal security by being vulnerable to eviction without good cause at the expiration of the lease term. Congress could not have intended such unfairness and insecurity in an area as critical for low-income families as is basic housing. That aspect of the decision was affirmed by the Fourth Circuit Court. See 675 F.2d at 1345. A Federal court in California reached a similar conclusion, on a somewhat more precise basis. In Mitchell v. U.S. Dept. of Housing & Urban Develop., 569 F.Supp. 701, 707-08 (N.D.Cal.1983), the court noted that the limitation in § 1437f(d) was on a termination of the tenancy, not termination of the lease. It concluded that, [i]f Congress had intended the good cause requirement to be applicable only to mid-lease evictions, it could have easily selected the phrase `terminate the lease.' Applying the good cause requirement to non-renewals following expiration, the court said, is not onerous, but merely fair. Id. at 709. See also Templeton Arms v. Feins, supra, 220 N.J.Super. 1, 531 A.2d 361; Cimarron Village v. Washington, supra, 659 N.W.2d 811; Joy v. Daniels, 479 F.2d 1236 (4th Cir.1973). We intimated as much, although the issue was not directly before us, in Carroll v. Housing Opportunities Comm'n, 306 Md. 515, 510 A.2d 540 (1986). The issue there was whether a § 8 tenant, who challenged a tenant-holding-over action, had sufficiently alleged a controversy involving more than $500 to entitle her to a jury trial. Noting the good cause requirement in the Federal regulations, we concluded that she has a right to remain in her townhouse indefinitely until the Commission can establish good cause for eviction and that that right of continued tenancy, coupled with the rent subsidy, caused the value of the controversy to exceed $500. Id. at 525, 510 A.2d at 545. Compare Whitehall Manor Properties, Inc. v. Lamothe, 13 Mass.App.Ct. 917, 430 N.E.2d 852 (1982) (holding that the Federal procedures apply only when the lease is in effect). The statutory and regulatory regime changed significantly in 1998, however, when Congress consolidated the certificate and voucher programs in a new § 1437f( o ). In place of the lease requirements of § 1437f(d), the new programs became subject to § 1437( o )(7) which, after requiring a one-year initial lease (unless the public housing agency approves a shorter term), provides that the lease shall (1) be in a standard form used in the locality by the dwelling unit owner, (2) contain terms and conditions that(I) are consistent with State and local law; and (II) apply generally to tenants in the property who are not assisted under this section, and (3) provide that during the term of the lease, the owner shall not terminate the tenancy except for serious or repeated violation of the terms and conditions of the lease, for violation of applicable Federal, State, or local law, or for other good cause. (Emphasis added). See P.L. 105-276, 112 Stat. 2461, 2599. Those are the current provisions. In conformance with that statutory change, the applicable regulations were also significantly rewritten. See 64 FR 26632 (May 14, 1999). They continue to require an initial lease of one year, unless the public housing agency approves a shorter term, but gone are the provisions requiring automatic renewal. They are replaced by the new provisions in § 982.308 requiring the lease to conform with standard leases in the community and with State landlord-tenant law. As the Department advised in proposing these new regulations, [t]he lease form must be in the standard form used in the locality by the owner and must contain terms that are consistent with State and local law, and that apply generally to unassisted tenants in the same property. 64 FR 26632, supra. The pre-1998 version of § 1437f, and the regulations implementing it, were far more consistent with the post-1990 structure of the tax credit provision in establishing that good cause was required to terminate the tenancy of a voucher program tenant, whether during the term of a lease or upon its expiration. Whether they would have gone further and supported the notion of an indefinite tenancy is a moot point now, as the provisions in the old law that may have supported that proposition have been deleted in favor of the requirement that voucher program leases be consistent with leases generally used in the community, leases, like the one in this case, that ordinarily carry fixed expiration dates and that permit eviction under the State tenant holding over law. The new, current, provisions clearly militate against the notion of an indefinite tenancya never-ending lease. We do not believe that the new provisions were intended, or effective, to delete the requirement that decisions not to renew or extend a lease upon its expiration require good cause, however. For one thing, that would place § 1437f( o ) in conflict with 26 U.S.C. § 42 which, as we noted, precludes both the eviction and the termination of tenancy of existing low-income tenants other than for good cause. The two sections are part of an integrated statutory scheme, and, as we have often said, a provision contained within an integrated statutory scheme must be understood in that context and harmonized to the extent possible with other provisions of the statutory scheme. Balto. Gas & Elec. v. Public Serv. Comm'n, 305 Md. 145, 157, 501 A.2d 1307, 1313 (1986), and cases cited there. See also Baltimore v. Chase, 360 Md. 121, 129, 756 A.2d 987, 992 (2000); Liverpool v. Baltimore Diamond, 369 Md. 304, 327, 799 A.2d 1264, 1278 (2002); State v. Ghajari, 346 Md. 101, 115, 695 A.2d 143, 149 (1997), quoting from State v. Harris, 327 Md. 32, 39, 607 A.2d 552, 555 (1992) (We presume that the legislature intends its enactments `to operate together as a consistent and harmonious body of law.'). Such a construction is also more consonant with the Congressional intent. Although the changes to § 1437f were certainly intended to allow landlords more flexibility and to bring some aspects of the voucher program more in line with both private residential leasing practices and with State landlord-tenant law, we do not believe that they were intended to subject voucher tenants to the arbitrary whims of landlords who are reaping a significant tax advantage from the program. If we were to conclude that the good cause requirement applies only to mid-term evictions and not to renewal decisions, the program would lose substantial stability, as tenants could be evicted for no reason at the end of a one-year lease or at any time thereafter on 60 days notice. That would hardly be consistent with the declared Congressional purpose of aiding low-income families in obtaining a decent place to live and of promoting economically mixed housing. § 1437f(a). The two statutes can easily be read harmoniously, with each other and with the overall Congressional purpose. We hold that, whatever term may be stated in the lease, a voucher program tenant may not be evicted by a landlord who has qualified for a § 42 tax credit and is continuing to receive rent subsidies, either during the term of the lease or at the expiration of that term, except for conduct or circumstances that qualify under the Federal law as good cause. We hold further, however, that neither § 42 nor § 1437f( o ), as currently worded, preclude use of the State tenant holding over statute as a procedural mechanism to remove a tenant who is, indeed, holding over after the expiration of the term of his/her lease. To succeed under that statute, the landlord must comply with its terms and conditions and establish good cause for refusing to renew the tenancy.