Justia Government Contracts Opinion Summaries

Articles Posted in Landlord - Tenant
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The U.S. Department of Housing and Urban Development (HUD) oversees the Section 8 low-income housing assistance program, 42 U.S.C. 1437f. New Lansing renewed its Section 8 contract with Columbus Metropolitan Housing Authority in 2014 for a 20-year term. In 2019, at the contractual time for its fifth-year rent adjustment, New Lansing submitted a rent comparability study (RCS) to assist CM Authority in determining the new contract rents. Following the 2017 HUD Section 8 Guidebook, CM Authority forwarded New Lansing’s RCS to HUD, which obtained an independent RCS. Based on the independent RCS undertaken pursuant to HUD’s Guidebook requirements, the Housing Authority lowered New Lansing’s contract rents amount.The Sixth Circuit affirmed the dismissal of New Lansing’s suit for breach of contract. The Renewal Contract requires only that the Housing Authority “make any adjustments in the monthly contract rents, as reasonably determined by the contract administrator in accordance with HUD requirements, necessary to set the contract rents for all unit sizes at comparable market rents.” HUD has authority to prescribe how to determine comparable market rents, the Renewal Contract adopted those requirements, and thus the Housing Authority was required to follow those HUD methods. The Housing Authority did not act unreasonably by following the requirements in the 2017 HUD guidance. View "New Lansing Gardens Housing Limited Partnership v. Columbus Metropolitan Housing Authority" on Justia Law

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Joliet condemned a housing complex managed by New West and paid $15 million. HUD rent subsidies for low-income tenants provided almost all of the money for operating the development. A $2.7 million fund had been established by New West and HUD, to cover necessary maintenance and repairs in the event of a default by New West. HUD refused to release that account to New West, contending that it now holds the account to cover Joliet’s obligations.The Seventh Circuit affirmed the summary judgment rejection of New West’s suit to recover the account. New West cannot establish conversion of the fund without first establishing ownership. HUD’s lien on the fund does not establish ownership of the fund and New West has not established its ownership by showing that it treated deposits into the fund as taxable income. View "New West, L.P. v. Fudge" on Justia Law

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Plaintiff H.C. Equities, L.P. asserted contract claims against its commercial tenant, the County of Union, after the County began to withhold rent payments in response to a dispute about the condition of the leased commercial buildings. During negotiations to settle the contract matter, the County directed its co-defendant, the Union County Improvement Authority (Authority), to assess the County’s real estate needs. H.C. Equities obtained a copy of a consultant’s report prepared as part of that assessment and objected to statements in the report about the condition of the buildings that it had leased to the County. H.C. Equities filed suit against the County and the Authority, asserting conspiracy claims against both defendants and trade libel and defamation claims against the Authority. Plaintiff did not apply for permission to file a late tort claims notice until more than eight months after the expiration of the one-year period allowed under N.J.S.A. 59:8-9 for the filing of such motions. The trial court held that H.C. Equities had failed to file the notices of claim that the Tort Claims Act required and dismissed its tort claims. H.C. Equities appealed, and the Appellate Division reversed the trial court. Relying on a combination of excerpts from three letters written by H.C. Equities’ counsel, the Appellate Division found that H.C. Equities substantially complied with the Act’s notice of claim provisions. The New Jersey Supreme Court disagreed that a finding of substantial compliance with the Tort Claims Act could be premised on comments made by plaintiff’s counsel in three different letters sent to lawyers representing the defendant public entities. The Supreme Court did not find that H.C. Equities’ letters, individually or collectively, communicated the core information that a claimant had to provide to a public entity in advance of filing a tort claim. The Appellate Division’s determination was reversed, and the matter remanded to the trial court. View "H.C. Equities, LP v. County of Union" on Justia Law

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GSA leased a building from NOAA’s predecessor; the annual rent includes agreed “[b]ase year taxes.” GSA must compensate NOAA for “any increase in real estate taxes during the lease term over the amount established as the base year taxes” and defines “real estate taxes” as “only those taxes, which are assessed against the building and/or the land upon which the building is located, without regard to benefit to the property, for the purpose of funding general Government services. Real estate taxes shall not include, without limitation, general and/or special assessments, business improvement district assessments, or any other present or future taxes or governmental charges that are imposed upon the Lessor or assessed against the building and/or the land upon which the building is located.In 2016, NOAA asked GSA to reimburse it for the Stormwater/Chesapeake Bay Water Quality tax, the Washington Suburban Transit Commission tax, the Clean Water Act Fee, and a Supplemental Education Tax. All four appear on the consolidated tax bill. The clean water tax, effective in 2013, is collected for the Watershed Protection and Restoration Fund, “in the same manner as County real property taxes and [has] the same priority, rights, and bear[s] the same interest and penalties, and [is] enforced in the same manner as County real property taxes.”GSA denied the claim. The Civilian Board of Contract Appeals held that the lease provision excludes all taxes enacted after the date of the lease, even if those taxes meet expressly stated criteria for being a real estate tax. The Federal Circuit reversed. Under ordinary interpretive principles, a real estate tax qualifies under the Lease provision whenever it satisfies the three criteria of the first sentence. View "NOAA Maryland, LLC v. General Services Administration" on Justia Law

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G4, LLC, entered into a lease in 2009 with the City of Picayune, Mississippi, for land on the grounds of the Picayune Municipal Airport. After the Pearl River County Board of Supervisors assessed ad valorem taxes on the leased land, G4 paid the taxes under protest and petitioned the Board for a refund and for a refund of taxes it had paid on lots in the Tin Hill subdivision. The Board denied G4’s petition, and G4 appealed to the Circuit Court of Pearl River County, which affirmed. G4 appealed, asserting that, according to the Mississippi Supreme Court’s decision in Rankin County Board of Supervisors v. Lakeland Income Properties, LLC, 241 So. 3d 1279 (Miss. 2018), it was automatically exempt from paying ad valorem taxes on the airport property. The Supreme Court agreed, reversed and remanded the circuit court’s decision that affirmed the Board’s refusal to refund the airport property taxes. The Court affirmed the circuit court’s decision that G4 was not entitled to a refund of taxes paid on the Tin Hill subdivision lots. View "G4, LLC v. Pearl River County Board of Supervisors" on Justia Law

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The U.S. Department of Housing and Urban Development (HUD) administers the project-based Section 8 housing program using Housing Assistance Payments renewal contracts. The landlords own publicly-assisted housing in Yonkers and allege that the government breached the renewal contracts, resulting in money damages. The trial court determined that it had jurisdiction, found the government liable for breach of contract, and awarded $7.9 million in total damages. The Federal Circuit vacated, finding that the trial court lacked jurisdiction because the parties were not in privity of contract. The contracts at issue were executed in a two-tiered system. First, HUD contracted with a public housing agency (New York State Housing Trust Fund Corporation), which contracted with the Landlords. Neither contract explicitly named both the government and the Landlords as directly contracting parties. View "Park Properties Associates v. United States" on Justia Law

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The property owners, participants in the “Section 8” federal rental assistance program (42 U.S.C. 1437f(a)), sued the Wisconsin Housing and Economic Development Authority for allegedly breaching the contracts that governed payments to the owners under the program, by failing to approve automatic rent increases for certain years, by requiring the owners to submit comparability studies in order to receive increases, and by arbitrarily reducing the increases for non-turnover units by one percent. Because Wisconsin Housing receives all of its Section 8 funding from the U.S. Department of Housing and Urban Development (HUD), the Authority filed a third-party breach of contract claim against HUD. The district court granted summary judgment in favor of Wisconsin Housing and dismissed the claims against HUD as moot. The Seventh Circuit affirmed, noting that the owners’ Section 8 contracts were renewed after the challenged requirements became part of the program. “The doctrine of disproportionate forfeiture simply does not apply,” and Wisconsin Housing did not breach any contracts by requiring rent comparability studies in certain circumstances or by applying a one percent reduction for non-turnover units. View "Evergreen Square of Cudahy v. Wisconsin Housing & Economic Development Authority" on Justia Law

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In September 2003, Bachner Company Inc. entered into a contract with the Alaska Department of Administration, to lease portions of the Denali Building in Fairbanks. After a ten-year lease term and a one-year renewal, Bachner alleged that the State was in default on its rent payments, and it filed suit in superior court to recover. The State moved to dismiss the complaint, arguing that the claim was governed by the Alaska State Procurement Code and that Bachner had failed to exhaust its remedies under the code before filing suit. The superior court agreed and granted the State’s motion to dismiss. Bachner appealed. After review, the Supreme Court concluded the procurement code covered a rent dispute over an ongoing lease, that the Bachner's claim fell under the procurement code, and Bachner had to exhaust its administrative remedies before filing suit in superior court. View "Bachner Company Incorporated v. State, Dept. of Administration" on Justia Law

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In 2000 the Port Authority signed a 30-year lease for the largest marine terminal at Port Elizabeth (445 acres including structures and berthing) with Maher, which handles cargo. The Lease requires “Basic Rental,” (in 2012, $50,413 per acre, totaling $22,433,612) plus “Container Throughput Rental,” based on the type and volume of cargo at Maher’s terminal. For eight years, Maher was exempted from Throughput Rental. Since 2008 the first 356,000 containers are exempted; for containers 356,001 to 980,000, Maher paid $19.00 per container in 2012; and for each additional container, Maher paid $14.25. Maher must handle a minimum amount of cargo to maintain the Lease and pay an annual guaranteed minimum Throughput Rental. Maher paid $12.5 million in Throughput Rental in 2010, and expected the 2012 amount to be $14 million. Maher claims the Port Authority profits from the Lease and uses the revenue to fund harbor improvements and projects unrelated to services provided to Maher or vessels. In 2012 Maher sued, alleging violations of the Constitution’s Tonnage Clause; the Rivers and Harbors Appropriation Act, 33 U.S.C. 5(b); and the Water Resources Development Act, 33 U.S.C. 2236. The Third Circuit affirmed dismissal, agreeing that Maher lacked standing to bring its Tonnage Clause and RHA claims because it was not a protected vessel and did not adequately plead that fees imposed on vessels were not for services rendered. Maher’s WRDA claim failed because Maher had not shown that the Authority imposed fees on vessels or cargo and because the WRDA did not prohibit use of Lease revenue to finance harbor improvements. View "Maher Terminals LLC v. Port Auth. of NY" on Justia Law

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In the 1950s and ’60s, to encourage private developers to construct, own, and manage housing projects for low- and moderate-income families, the government insured mortgages on those projects in exchange for provisions, such as a 40-year mortgage term, an agreement to maintain affordability restrictions for the duration of the mortgage, and prepayment limitations or prohibitions. The Emergency Low Income Housing Preservation Act of 1987 and the Low-Income Housing Preservation and Resident Homeownership Act of 1990 instituted a process to request the right to prepay mortgages. There were substantive restrictions on HUD granting prepayment requests, limiting its discretion, 12 U.S.C. 4108(a)). Prepayment is one step toward renting at market prices. The Acts permit HUD to grant incentives rather than permission to prepay. Owners claimed that the Acts constituted an as-applied taking. The Claims Court granted the government’s motions: for summary judgment that the takings claims for some properties were unripe for failure to exhaust administrative remedies; for summary judgment that no taking occurred for properties for which mortgages did not include a prepayment right; and for summary judgment of collateral estoppel as to one owner. The Federal Circuit affirmed as to ripeness and prepayment, but reversed as to collateral estoppel. View "Biafora v. United States" on Justia Law