Lease clause caught me slipping on a Section 8 renewal

Was going through a tenant's renewal paperwork last Tuesday and almost missed a clause that would've let them break the lease with zero penalty if their voucher got delayed. Caught it at 11pm in my home office after staring at the PDF for 20 minutes straight. How do you guys vet lease addendums for government programs before signing?

3 comments

3 Comments

wendy_henderson2112d ago

Jumping in to say this exact nightmare keeps me up at night honestly. I had a tenant last year bring in a lease addendum that looked totally standard at first glance, but buried on page three it said if the annual inspection report was late by more than two weeks, the lease automatically converted to month-to-month with full tenant termination rights. Our local housing authority is so backed up right now that inspections regularly take six to eight weeks, so basically they'd written in a free escape hatch for the tenant without either of us realizing it until my husband read it at midnight. I feel your pain on staring at that PDF for 20 minutes, I've been there squinting at my laptop screen at 11pm wondering if I'm just being paranoid or actually saving my own skin. It's scary how one little line in those government templates can completely flip who's protected and who's stuck holding the bag.

max_cooper2112d ago

My buddy Dave (owns four duplexes across town) had almost the exact same thing happen on a Section 8 renewal last year. He was about to sign all the paperwork when his wife noticed a line that said the tenant could terminate the lease if the voucher wasn't renewed within 30 days of the expiration date. Problem was the voucher renewal can take 60 to 90 days in our county right now, so the tenant could've just bailed on him with zero notice if HUD was slow (which they always are around here). He ended up having to pay a real estate lawyer $400 to rewrite the whole addendum to match state law instead of the generic template the tenant brought in. Now he has a rule where he runs every single government program addendum past a local landlord association first, just to catch these hidden clauses before they cost him.

emma_wells8312d agoMost Upvoted

Oh man, this hits way too close to home honestly. I had a similar scare with a Section 8 renewal last spring where I almost signed a HUD template that had this tiny clause about the tenant being able to break the lease if the inspection wasn't passed within 10 days of the move-in date. Our local inspector is backed up like 3 weeks minimum, so that basically gave the tenant a free out if the city dragged their feet. I caught it because I was reading through everything one more time at 11pm on my couch, but it gave me actual chills thinking about how close I was to signing it. That $400 lawyer fee Dave paid sounds brutal but honestly it's probably cheaper than what would've happened if the tenant walked out mid-year on a lease that had a loophole like that. I completely get why he goes through the landlord association now, I started doing the same thing after my close call, it's just not worth the gamble with these government templates.