Court Opinion

ID: 2821966
Source: CourtListenerOpinion
Date Created: 2015-07-30 16:01:11.159599+00
Date Added: 2024-06-11T11:31:03.130587
License: Public Domain

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                                   Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                            File Name: 15a0173p.06

                       UNITED STATES COURT OF APPEALS
                                        FOR THE SIXTH CIRCUIT
                                          _________________

 WALESKA A. VELEZ; KIMBERLY M. HATCHER,          ┐
                          Plaintiffs-Appellants, │
                                                 │
                                                 │                         No. 14-3978
      v.                                         │
                                                                  >
                                                                 │
 CUYAHOGA METROPOLITAN HOUSING AUTHORITY,                        │
                         Defendant-Appellee.                     │
                                                                 ┘
                             Appeal from the United States District Court
                            for the Northern District of Ohio at Cleveland.
                      No. 1:13-cv-01022—Christopher A. Boyko, District Judge.
                                          Argued: April 30, 2015
                                     Decided and Filed: July 30, 2015

        Before: KETHLEDGE and WHITE, Circuit Judges; LUDINGTON, District Judge.*

                                            _________________

                                                 COUNSEL

ARGUED: Peter M. Iskin, LEGAL AID SOCIETY OF CLEVELAND, Cleveland, Ohio, for
Appellants. Kathryn M. Miley, WILKERSON & ASSOCIATES CO., LPA, Cleveland, Ohio,
for Appellee. ON BRIEF: Peter M. Iskin, Maria A. Smith, LEGAL AID SOCIETY OF
CLEVELAND, Cleveland, Ohio, for Appellants. Kathryn M. Miley, Ernest L. Wilkerson, Jr.,
WILKERSON & ASSOCIATES CO., LPA, Cleveland, Ohio, for Appellee.

    *
     The Honorable Thomas L. Ludington, United States District Judge for the Eastern District of Michigan, sitting
by designation.

                                                        1
No. 14-3978                                   Velez, et al. v CMHA                            Page 2

                                              _________________

                                                    OPINION
                                              _________________

          LUDINGTON, District Judge. The question raised on appeal in this case is whether fees
charged by lessors for lease terms shorter than one year are “rent” under Section 8 of the
Housing Act of 1937 (“Act”).1 Appellants Waleska Velez and Kimberly Hatcher, Plaintiffs
below, appeal the district court’s order denying their motion for summary judgment and granting
Appellee Cuyahoga Metropolitan Housing Authority’s (“CMHA”) motion for summary
judgment. Appellants argue that the district court incorrectly determined that the term “rent,” as
used in the Act and its accompanying regulations, does not encompass the fees charged by
lessors on short-term leases.

          Because the subject fees are an expense payable by the lessees for the occupancy of the
rental unit, we conclude that the expenses are part of the lessees’ rent under the Act. We reverse.
Further, we remand to the district court for proceedings consistent with that conclusion.

                                                         I.

          The underlying facts that are germane to the legal issues on appeal are few. Appellants
are two individuals who qualify for the Section 8 low-income housing assistance voucher
program, known as the Housing Choice Voucher Program. 42 U.S.C. § 1437f(o).

                                                         A.

          Title 42 U.S.C. § 1437f codifies Section 8 of the Housing Act of 1937. Pub. L. No. 75-
412, 50 Stat. 888, 891. Under this provision the relevant housing authority (at the time, the U.S.
Housing Authority—now, the U.S. Department of Housing and Urban Development (HUD)) was
authorized to make loans and contributions to local public housing authorities to assist in the
construction and administration of “low-rent housing” (i.e., public housing projects) for “families
of low income.” 50 Stat. at 888, 891. In its original form, the Act did not provide for a tenant-
based housing subsidy program. Section 8 read: “The Authority may from time to time make,

   1
       The case below has also generated a related appeal. That appeal is docketed as Case No. 14-4019.
No. 14-3978                                 Velez, et al. v CMHA                           Page 3

amend, and rescind such rules and regulations as may be necessary to carry out the provisions of
this Act.” Id. at 891.

        In 1974, Congress amended the Housing Act to “significantly enlarge[] HUD’s role in the
creation of housing opportunities.”          Hills v. Gautreaux, 425 U.S. 284, 303 (1976) (citing
Housing and Community Development Act of 1974, Pub. L. No. 93-383, sec. 201, § 8, 88 Stat.
633, 662–66). In the 1974 amendatory act, Congress authorized the first permanent tenant-based
rental housing assistance program—the Section 8 Rental Certificate Program—which allowed
the use of federal funds to subsidize a tenant’s monthly rental housing costs.2 “Building on the
success of the Certificate Program,” 80 Fed. Reg. 8243, 8244 (Feb. 17, 2015), Congress created
the Housing Choice Voucher Program in 1983.3 See Housing and Urban-Rural Recovery Act of
1983, Pub. L. No. 98-181, sec. 207, 97 Stat. 1155, 1181–82 (codified as amended at 42 U.S.C.
§ 1437f(o)).4 The provisions governing the voucher program are at issue here.

        Under the Section 8 Housing Choice Voucher Program, 42 U.S.C. § 1437f(o), and its
accompanying regulatory framework, see 24 C.F.R. § 982, certain low-income individuals
qualify to receive housing assistance vouchers that subsidize the cost of renting privately-owned
housing units. Under the program, HUD “pays rental subsidies so eligible families can afford
decent, safe and sanitary housing.” 24 C.F.R. § 982.1(a). The voucher program is administered
“by State or local governmental entities called public housing agencies (PHAs),” such as
CMHA. Id.

        The Act and regulations contain various provisions that govern the amount of the rental
subsidy paid by a public housing agency on behalf of a low-income tenant. The regulations refer
to subsidy payments by the public housing agency on behalf of a low-income renter as “housing
assistance payments.” These payments are defined as “[t]he monthly assistance payment by a

    2
      Congress created the Experimental Housing Allowance Program in 1970, the first tenant-based rental housing
assistance program. See Housing and Urban Development Act of 1970, Pub. L. No. 91-609, sec. 504, 84 Stat. 1770,
1786–88.
    3
     The voucher program was later made permanent in 1988. See Housing and Community Development Act of
1987, Pub. L. No. 100-242, sec. 143, 101 Stat. 1815, 1850–51 (1988).
    4
    Congress subsequently consolidated the certificate and voucher programs in 1998. See Quality Housing and
Work Responsibility Act of 1998, Pub. L. 105-276, sec. 545, 112 Stat. 2518, 2596–604.
No. 14-3978                                     Velez, et al. v CMHA                              Page 4

PHA, which includes: (1) A payment to the owner for rent to the owner [sic]5 under the family’s
lease; and (2) An additional payment to the family if the total assistance payment exceeds the
rent to owner.” 24 C.F.R. § 982.4(b). In turn, the regulations define “rent to [the] owner” as
“[t]he total monthly rent payable to the owner under the lease for the unit. Rent to owner covers
payment for any housing services, maintenance and utilities that the owner is required to provide
and pay for.” Id.

                                                           B.

           Appellants are tenants receiving subsidy payments under the voucher program.
Appellant Velez has participated in the program since February 4, 2012.                              Am. Proposed
Stipulations, ECF No. 26, Page ID 279. Appellant Hatcher has participated in the program since
July 1, 1999. Id. at 281. Both Appellants initially entered into one-year leases with third-party
defendant The K&D Group, Inc. (“K&D”). At the end of the one-year lease terms they renewed
their leases for terms less than one year. The standard lease designates “RENT” as a specified
amount to be paid per month. Id. at 293. The lease further provides: “If Resident(s) shall
holdover after the end of the term of this Rental Agreement, said holdover shall be deemed a
tenancy of month to month and applicable month to month fees shall apply.” Id. The lease does
not prescribe the amount of the month-to-month fee.                        K&D maintains a separate policy
establishing the month-to-month fee, id. at 280, and lessees are notified of the fee when K&D
issues lessees a “Lease Renewal Notice,” id. at 308.

           Velez entered into a month-to-month tenancy after her initial one-year term expired in
2013 without executing a new agreement, id., and Hatcher entered into two separate month-to-
month tenancies, in 2007 and 2012, and, in 2011, a nine-month lease agreement, id. at 283–86.
Under each of these short-term agreements, K&D charged Appellants Velez and Hatcher
monthly month-to-month and short-term lease fees.6 These fees varied in amount based upon the
length of the short-term lease but ranged between $35.00 per month for the nine-month lease

    5
      Although not made clear in the regulations’ definition of “housing assistance payment,” “rent to the owner”—
or “rent to owner” as it is denoted elsewhere—has a specific meaning under the regulations. Consequently, the
apparent redundancy in the definition is readily explained by reference to the definition for “rent to owner.”
    6
        For consistency, the fees will be referred to as short-term fees, rather than both month-to-month and short-term
fees.
No. 14-3978                            Velez, et al. v CMHA                      Page 5

term and $100.00 per month for the month-to-month lease. K&D imposed these fees as a means
of recovering the increased turnover expenses, marketing costs, and market risks associated with
shorter-term leases.

       Both parties acknowledge that this practice, while not unusual, is not uniform. Some
lessors choose to account for the risks and costs of shorter leases by increasing the monthly rent
charge in the lease rather than identifying them as a discrete charge.

       It was CMHA’s policy not to treat these short-term rental fees as rent under the voucher
program. Id. at 276–77. Under its policy, the fees would not be submitted to CMHA for
calculation of Appellants’ eligible voucher subsidy. As a result of the policy, Appellants Velez
and Hatcher were required to pay the entire amount of the fees.

                                                 C.

       On May 7, 2013, Appellants Velez and Hatcher filed a claim pursuant to 42 U.S.C.
§ 1983 against CMHA in the Northern District of Ohio. They claimed that the short-term fees
imposed upon them are rent under the Act. Appellants sought injunctive relief as well as
damages in the amount of the unpaid subsidies related to the short-term rental fees they paid.

       On July 3, 2013, CMHA filed a third-party complaint against K&D seeking indemnity
and contribution in the event the district court determined the fees were properly considered as
rent. CMHA took the position that if the fees are rent, K&D should have been submitting the
fees as part of the rent charge, which CMHA would have used to calculate the subsidies it paid.
K&D’s failure to do so, CMHA claimed, renders K&D liable to CMHA in any amount CMHA
would be liable to Appellants.

       On February 14, 2014, Appellants Velez and Hatcher and Appellee CMHA filed cross-
motions for summary judgment. ECF Nos. 42 & 44. Appellants claimed that the short-term fees
were rent and that they were, accordingly, entitled to damages from CMHA. Appellee CMHA
took the opposite position, that the fees were not rent and that its policy of treating them in such
a manner was consistent with the Act.         It also argued, in the alternative, that K&D was
contributorily liable to CMHA if the district court determined that the fees were rent. On March
No. 14-3978                                Velez, et al. v CMHA                         Page 6

10, 2014, third-party Defendant K&D filed a motion for summary judgment against CMHA.7
ECF No. 47. K&D argued that it had put CMHA on notice of the fees when it sought guidance
from CMHA in 2010 on whether they should be treated as rent. CMHA expressly informed
K&D that the fees were separate from rent.

          The district court issued an Opinion and Order granting CMHA’s motion for summary
judgment against plaintiffs on September 16, 2014. Op. & Order, ECF No. 63. The district
court held that the short-term fees were not rent. Pursuant to this holding, the district court
denied Plaintiffs’ motion for summary judgment against CMHA, denied CMHA’s motion for
summary judgment against K&D as moot, and granted K&D’s motion for summary judgment
against CMHA.

          Velez and Hatcher appeal the district court’s decision holding that the fees are not rent.

                                                     II.

          “We review a district court’s grant of summary judgment de novo.” Cass v. City of
Dayton, 770 F.3d 368, 373 (6th Cir. 2014). A motion for summary judgment should be granted
if the “movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).

                                                    III.

          The primary issue presented by the appeal concerns the definition of rent in 42 U.S.C.
§ 1437f and its attendant regulations. The issue is whether the definition of rent in Section 8 of
the Act includes the short-term rental fees charged to tenants. If so, public housing authorities,
such as CMHA, would be required to pay rental voucher subsidies on the short-term rental fees
imposed by lessors. Appellants contend that these fees constitute rent paid for the use of their
housing unit, irrespective of how the lessors account for the fees. Appellee responds that they
are mere convenience fees, charged by the lessors as consideration for the increased costs
associated with administering leases with shorter rental terms.

   7
       CMHA’s February 14, 2014 motion for summary judgment included a claim for judgment against K&D.
No. 14-3978                                   Velez, et al. v CMHA                             Page 7

                                                         A.

         The term “rent” is used extensively throughout § 1437f and its regulations but is not
defined in the context of the Housing Choice Voucher Program, § 1437f(o).8 Nor is rent defined
in any other provision of the Housing Act or its regulations despite also being used extensively
therein.9 In light of this consistent usage and absent any reason justifying the contrary, the
definition of rent throughout the Act, not only in Section 8, must be uniform. See Ratzlaf v.
United States, 510 U.S. 135, 143 (1994) (“A term appearing in several places in a statutory text
is generally read the same way each time it appears.”). But see Atl. Cleaners & Dyers v. United
States, 286 U.S. 427, 433-34 (1932) (holding that the presumption of uniformity gives way
“[w]here the subject-matter to which the words refer is not the same in the several places where
they are used”).

                                                         1.

         In determining what Congress intended when it referred to rent in the Housing Act of
1937, we look to the traditional rules of statutory construction. The beginning point is the text of
the Act. Desert Palace, Inc. v. Costa, 539 U.S. 90, 98 (2003). If the meaning of rent is
“unambiguous, the judicial inquiry is complete.” Id. (quoting Conn. Nat’l Bank v. Germain,
503 U.S. 249, 253–254 (1992)) (internal quotation marks omitted). Further, “where Congress
uses terms that have accumulated settled meaning under . . . the common law, a court must infer,
unless the statute otherwise dictates, that Congress means to incorporate the established meaning
of these terms.” Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 739 (1989) (quoting
NLRB v. Amax Coal Co., 453 U.S. 322, 329 (1981)). When interpreting federal law, we draw on

    8
      The Act does provide that “the terms ‘rent’ or ‘rental’ mean, with respect to members of a cooperative, the
charges under the occupancy agreements between such members and the cooperative.” 42 U.S.C. § 1437f(f).
Although this definition of rent is limited to “members of a cooperative,” it supports the view that Congress intends
that rent means the charges under occupancy agreements.
    9
      HUD, as the regulatory authority delegated the power of administering the Act, may define in its regulations
what rent means in the Housing Act of 1937. This definition would, of course, be subject to review. The Supreme
Court has determined, however, that HUD is entitled to deference in its interpretation of the Act. Wright v. City of
Roanoke Redevelopment & Hous. Auth., 479 U.S. 418, 430 (1987). HUD has yet to define rent.
     Before its repeal in March 2000, HUD regulations provided an admission preference (into a Section 8 program)
for families with rent burdens—i.e., applicants who pay more than 50% of their family income in rent. Those
regulations defined “rent” to mean the “actual monthly amount due under a lease or occupancy agreement between a
family and the family’s current landlord; and for utilities purchased directly by tenants from utility providers[.]”
24 C.F.R. § 5.430 (1999), repealed by 65 Fed. Reg. 16,692, 16,716 (Mar. 29, 2000).
No. 14-3978                                     Velez, et al. v CMHA                               Page 8

federal definitions, not definitions that arise under the common law of discrete states. Id. (noting
that an express purpose of copyright law was creating uniform federal copyright regulation, thus
federal, not state, agency law must be relied upon).

         “A fundamental canon of statutory construction is that, unless otherwise defined, words
will be interpreted as taking their ordinary, contemporary, common meaning.” Perrin v. United
States, 444 U.S. 37, 42 (1979). Thus, when determining what definition was intended by
Congress, we must look to the time the statute was enacted. See Taniguchi v. Kan Pac. Saipan,
Ltd., 132 S. Ct. 1997, 2003, (2012) (drawing on dictionary definitions from time statute in
question was enacted). The Court must look to the definition of rent in 1937 to determine what
Congress meant when it enacted the statute.

         Shortly after Congress enacted the Act, the Supreme Court reaffirmed the prevailing
federal definition of rent: “Rent is a fixed sum, or property amounting to a fixed sum, to be paid
at stated times for the use of property[.]” M.E. Blatt Co. v. United States, 305 U.S. 267, 277–78
(1938) (quoting Duffy v. Cent. R. Co. of N.J., 268 U.S. 55, 63 (1925) (defining the term
“rentals”)) (internal quotation marks omitted).                 Dictionaries around the time of enactment
similarly understood rent as the amount paid to use the rental dwelling. The legal definition of
rent recognized by a contemporary edition of Webster’s New International Dictionary was:

         The return made by the tenant or occupant of land or corporal hereditaments to
         the owner for the use thereof; a certain periodical profit, whether in money
         provisions, chattels, or services, issuing out of lands and tenements in payment for
         the use; commonly, a certain pecuniary sum agreed upon between a tenant and his
         landlord, for the use of land or its appendages; as, rent for a farm, a house, a park,
         etc.

“Rent, n. 4.a”,10 Webster’s New International Dictionary (2d. ed., 1935); see also Webster’s
New International Dictionary (2d. ed., 1939) (providing same definition).

         The 1974 amendatory act similarly understands rent. In the 1974 Act, Congress amended
Section 8 to authorize “assistance payments” “[f]or the purpose of aiding lower-income families
    10
       While the legal definition appears at the fourth entry, the first entry differs only in its comparative generality:
“A render; a return or payment receivable from another or chargeable on land, as an annuity or corody; also, the
property charged with such a payment; hence, revenue; income.” In addition, the first three lines of definitions were
all, by 1935, recognized to be obsolete. See also “Rental, n. 4,” Webster’s New International Dictionary (2d. ed.,
1935) (equating the definition of “rental” to the definition of “rent”: “= RENT, 4 a.”) and Webster’s New
International Dictionary (2d. ed., 1939) (same).
No. 14-3978                           Velez, et al. v CMHA                     Page 9

in obtaining a decent place to live and of promoting economically mixed housing.” 88 Stat. at
662. This housing assistance program authorized PHAs to enter into “assistance contracts” with
owners of private dwellings, which must “provide that assistance payments may be made only
with respect to a dwelling unit under lease for occupancy by a family determined to be a lower
income family at the time it initially occupied such dwelling unit . . . .” Id. at 664. The
assistance contract establishes “the maximum monthly rent (including utilities and all
maintenance and management charges) which the owner is entitled to receive for each dwelling
unit with respect to which such assistance payments are to be made.” Id. at 663. The 1974 Act
thus understands rent as the amount the “owner is entitled to receive” under the “lease for
occupancy.” Rent operates, then, as the sum paid to live in and make use of rental property.
Further, rent had the same meaning in 1974 as in 1937. Cf. “Rent, n. 3.a”, Webster’s New
International Dictionary 1923 (3d ed. 1976) (materially the same as 1935 edition); American
Heritage Dictionary 1102 (New College ed. 1976) (materially the same); Black’s Law Dictionary
1166 (5th ed. 1979) (“Consideration paid for use or occupation of property. . . . At common law,
term referred to compensation or return of value given at stated times for the possession of lands
and tenements corporeal.”).

       Similar to the 1974 Act, the 1983 Act authorizes “monthly assistance payment[s]” to
owners on behalf of qualifying families. 97 Stat. at 1181. Importantly, under the voucher
program (as with the certificate program), the monthly assistance payment subsidizes a family’s
monthly rent; the family pays in rent the amount required by the lease minus the assistance
payment. Although not explicit, the 1983 Act operates under the same assumption as the
1974 Act that the family pays a monthly sum to the owner in exchange for its use and occupancy
of the housing. And, again, the dictionary definition of rent remained materially unchanged
between 1974 and 1983. Cf. Webster’s New International Dictionary 1923 (3d ed. 1981) (same
as 1976 edition); Webster’s New Collegiate Dictionary 998 (9th ed. 1985) (materially the same).
We conclude that, based on the plain meaning of the word in context, rent in Section 8 of the
No. 14-3978                                    Velez, et al. v CMHA                             Page 10

U.S. Housing Act means the amount paid under the lease for the use and occupancy of the
property.11

         Under the prevailing definition of rent, the short-term fees at issue are rent.                          That
means the fee is “a fixed sum . . . paid at stated times for the use of property[.]” Blatt, 305 U.S.
at 277–78 (internal quotation marks omitted). The definition of rent plainly includes the tenant’s
total expense for the use of land during the term of occupancy.

         Appellants do not appear to dispute Appellee’s assertion that the lessors who employ a
short-term fee do so because of the increased expense associated with the risks and costs of a
shorter lease term. But any rent charge, which is no more than the price of occupying property
for a specific period of time, includes such risks and costs. The price for the tenant’s occupancy
takes into account the term of rental, regardless of whether the term is for three months or twelve
months. Indeed, “the prices charged by suppliers convey information on how they value the
effort and inputs needed for production.” “Price,” A Dictionary of Economics (4th ed., 2013).
The increased rental charge for shorter leases is nothing more than a cost-accounting device
employed by lessors to reflect that they have increased effort, expenses, and risks that are
associated with the shorter occupancy. The best evidence of this, in this case, is the fact that
some lessors simply respond to the increased cost of short-term leases by increasing the rental
rate.

         Merely recasting the charge as a short-term fee, rather than as a rent charge, does not
change the fact that it is consideration paid by the tenant for use of the rental unit. See United
States v. Pileggi, 192 F.2d 878, 879 (2d Cir. 1951) (“[I]t is settled that ‘rent’ is received or
demanded when a tenant is required as a condition of rental to purchase or pay for a service he
does not want regardless of the person to whom the money must be paid.”). Neither party argues
that these fees, despite not always being nominally designated as rent, were in any way optional.

    11
       The general definition adopted by the Supreme Court in the early portion of the twentieth century has been
adopted, unaltered, by other courts up to the present day, including this Court. See Wuebker v. C.I.R., 205 F.3d 897,
904 (6th Cir. 2000) abrogation recognized on other grounds by Aeroquip-Vickers, Inc. v. C.I.R., 347 F.3d 173, 180
(6th Cir. 2003) (“Rent is defined as ‘[c]onsideration paid . . . for the use or occupancy of property . . . .’” (quoting
Black’s Law Dictionary 1299 (7th Ed. 1999))); Aujero v. CDA Todco, Inc., 756 F.2d 1374, 1376 (9th Cir. 1985)
(citing Black’s Law Dictionary (1979) in defining rent as “consideration paid for use or occupation of property”).
These later definitions helpfully demonstrate that courts have not recognized any material change in the definition of
rent up to the present day.
No. 14-3978                                      Velez, et al. v CMHA                          Page 11

See, e.g., Nov. 2007 Hatcher-K&D Lease, Am. Proposed Stipulations, ECF No. 26-1, Page ID
315–16 (providing for short term fee payment with rent charge as one “rental payment,” the
nonpayment of which “shall be cause for eviction under the appropriate sections of the
applicable code”).12 Instead, it was a monthly charge that the tenants were required to pay to
continue occupying the rental unit.13

           Furthermore, treating these discrete fees as outside the ambit of rent would create
incongruities in the Act’s treatment of short-term leases. As acknowledged in the parties’
papers, some lessors choose to assess the additional charge in the form of an increased monthly
rent payment, rather than as a discrete charge. Tenants that enter into short-term leases that have
a single, increased rent charge would have their full amount of rent qualify for subsidy under the
Act. Conversely, tenants entering into short-term leases that impose two separate charges would
not. The definition of rent encompasses all monies paid in consideration for the periodic use of
property not simply the discrete charge labelled as rent in a lease agreement.

           Appellee seeks support for its position in the testimony of two experts upon which it
relied at the summary judgment stage. Both experts, according to Appellee, testified during
deposition that the short-term rental fee “compensate[d] the landlord for risks in having a short-
term tenant.” Appellee’s Br. 10. But, as explained above, the administrative and transactional
costs associated with the duration of that lease are always a factor in the rental price. The rental
value of a property with no term or time limitation14 should equal the price of acquiring the fee
simple absolute estate. By contrast, the lessor-lessee relationship—a term of years estate—is
defined by the fact that it “endure[s] for any fixed or computable period of time.” Restatement
(Second) of Property, Land. & Ten. § 1.4 (1977). Since rent, no matter how it is characterized in
a lease, is the price paid for the lessee’s use of the property for a distinct period of time, the lease
term and physical occupation of the property by a tenant cannot be separated. That is, the length
    12
        This is the only rental agreement between the parties that specifically denotes the fee. All other short-term
fee agreements were default rollover agreements that were automatically renewed on a month-to-month basis
following an original one-year lease agreement. It should be noted that this agreement includes the fee under the
section of the lease titled “Rent” and reads: “Resident(s) will pay $799.00 +$ 75.00 Month to Month Fee=$ 874.00
per calendar month for rental payments plus the monthly URC, payable in advance and without demand on or before
the 1st day of each month for a term of one year.” Id. (sic to formatting throughout).
    13
        Allowing a lessor the ability to divide out mandatory, discrete charges related to the usage cost of the rental
unit is not only not authorized by the Act, it would completely defeat the statutory subsidy scheme.
    14
         If such a thing could be conceived, as Appellee argues it can.
No. 14-3978                              Velez, et al. v CMHA                  Page 12

of time a tenant is permitted to make “use” of a rental property is necessarily and always
circumscribed by the term of the agreement authorizing the use.

        Because there is no rational legal or economic reason to consider the short-term lease fees
as separate from rent, the judgment of the district court is reversed.

                                                   2.

        Appellee argues, in the alternative, that even if the short-term fees are “rent” under the
Act, it still is not liable for payments not made on those fees. This is so, CMHA asserts, because
the regulations require that the tenants submit the fees for reimbursement as rent. Since they did
not, they forfeited their ability to now claim the lost subsidies.

        The district court did not reach Appellee’s argument that Appellants did not properly
submit the fees for subsidization. For that reason, this issue will be remanded for proper
consideration by the district court.

                                                   B.

        CMHA also argues that some of Appellant Kimberly Hatcher’s claims are time-barred by
the applicable statute of limitations. Appellee’s Br. 19. As with Appellee’s prior argument, this
issue was not decided by the district court. It will also be remanded for a determination of the
applicability of the relevant statute of limitations.

                                                  IV.

        The district court’s Order granting summary judgment to Appellee CMHA and denying
summary judgment to Appellants is REVERSED. The case is REMANDED for proceedings
consistent with this opinion.