DOWNTOWN — In what was hailed as a victory for landlords, a state appellate court ruled recently that property owners have the right to not accept Section 8 vouchers from low-income tenants.

The ruling stems from a case filed by an elderly Santa Monica widow who tried to use her Section 8 voucher to remain in an apartment owned by Los Angeles Clippers’ owner Donald Sterling, who recently agreed to pay nearly $3 million after settling a housing discrimination lawsuit brought by the federal government.

Section 8 is a part of the United States Housing act and provides low-income residents and their families financial aid, covering 70 percent of a tenant’s rent .

“This is a fairly significant case,” for landlords, said attorney Karen K. McCay with the law firm of Pahl & McCay, which joined the case on behalf of the California Apartment Association. “While we are a big supporter of the Section 8 program, it does have some restrictions on property owners. It should be voluntary. That was how it was designed.”

In the last few years, however, there has been a debate about whether or not a landlord’s decision to not accept Section 8 vouchers, and therefore not rent to low-income tenants, is an act of discrimination. Under the state Fair Employment and Housing Act, landlords cannot discriminate based on a person’s source of income a well as their race, religion or sexual orientation. Sources of income could include welfare checks, and alimony and child support payments.

Advocates for low-income tenants say there is a growing trend amongst landlords to flatly refuse to rent to anyone on Section 8, and some have blatantly tried to evict those tenants who are because the owner no longer wants to participate in the program.

McCay said there are benefits for landlords in Section 8, such as 70 percent of the rent being guaranteed each month. Tenants have to abide by certain rules to remain in the program.

However, landlords must prepare more paperwork and allow inspections.

“This is about property rights,” McCay said.

The tenant in the Sterling case, Elisheba Sabi, moved into her rent-controlled apartment in 1987, two years after emigrating from Iran. Disabled, she lived with her husband on disability payments, according to records filed with the state Court of Appeal, Second District.

After her husband died of cancer in January 2004, Sabi’s income was not substantial enough to cover her rent, which was $1,233 a month, Her sons helped cover the rent while Sabi applied for a Section 8 voucher. After roughly five years, she was granted a voucher.

Sabi’s daughter asked the apartment manager if they would take her mother’s voucher, however, the management company refused. Sabi and her family enlisted the help of the Legal Aid Foundation of Los Angeles, and a lawsuit was filed in April 2004.

Sabi is said to still live in her apartment. Family members felt it was best to have her remain there instead of relocating, according to court records.

Sabi’s attorneys argued that the Section 8 voucher she received from the Santa Monica Housing Authority was a source of Sabi’s income in the form of cash paid to her landlord by the housing authority.

The court ruled that the voucher only represents Sabi’s eligibility to participate in Section 8 and does not represent actual cash money, even if money is paid directly to the landlord from the housing authority. The funds are not anyone’s income, the court ruled.

The court also dismissed Sabi’s argument that by refusing to accept her Section 8 voucher, they were discriminating against her because of her disability, which restricts her income.

Attorneys for Sabi could not be reached for comment. McCay said she would not be surprised if Sabi takes the case to the state Supreme Court.

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