Landlord in Delaware pays $430,000 to settle federal lawsuit

Lawsuit: false reports filed to ‘justify the inflated rent’

Lukacs and his entities own about 90 homes in the neighborhood of 544 aging two-story townhomes, the lawsuit said. At that time he rented “roughly 19” of the homes to Section 8 clients and the rest to tenants who did not receive federal assistance.

The Section 8 program, officially called the Housing Choice Voucher Program, is overseen by the U.S. Department of Housing and Urban Development.

The rules for Section 8 require that landlords don’t charge higher rents to voucher recipients than they charge to tenants who live in comparable units but don’t get federal assistance, the lawsuit said.

Landlords also need to file monthly reports and certify that they are complying with that rule.

The lawsuit said that going back to at least January 2015, Lukacs had received a total of about $950,000 in voucher payments. But he engaged in fraud to secure some of those payments, the lawsuit said.

Court documents cited a handful of examples.

In April 2018, Lukacs filed a false report to get the federal subsidy on a 1,225-square-foot home with three bedrooms and one bathroom, the lawsuit said.

The proposed monthly rent: $1,150.

Regulations required him to list the “three most recent unassisted rentals of comparable properties,’’ the lawsuit said. Instead, he listed older rentals whose average rent was nearly $1,150, and omitted two more recent rentals whose rent was $1,000 — $150 less than he proposed charging.

One of the properties was not even comparable, the lawsuit said. It had four bedrooms and was 1,675 square feet — more than 35% larger.

Over a 25-month period, Lukacs received a rent subsidy between $611 and $920 toward the tenant’s $1,150 monthly rent, even though tenants in comparable units without vouchers paid less in rent.

Sparrow Runs, located in Bear, was once known as Brookmont Farms. (Cris Barrish/WHYY)

‘I’m glad that the people caught them’

Sparrow Run, once known as Brookmont Farms, consists of tightly clustered homes laid out in a horseshoe shape with one road that winds around the neighborhood.

About 70% of the homes are rental units, and about 100 are rented through Section 8, said Carrie Casey, general manager of the county’s Department of Community Services, which oversees county housing programs.

Casey said the neighborhood is the frequent target of police activity and has been identified as a “hot spot” for crime.

County housing official Carrie Casey says the demand for Section 8 homes far exceeds the supply, but rules be followed by landlords. (Cris Barrish/WHYY)

Sparrow Run residents had little to say about the lawsuit being settled this week.

Some said they owned their homes and the case did not affect them.

Others said they didn’t want to get involved in a legal matter or speak out and potentially jeopardize their relationship with their own landlord.

One rental agent who declined to identify himself said the system works better when landlords follow the rules.

One Section 8 recipient whose landlord is not Lukacs but also did not want to give her name said the owner of her home is fair, and responds quickly when repairs are needed. The woman, who uses a wheelchair and once suffered a stroke, said the federal crackdown is a welcome one.

“I’m glad that the people caught them,’’ she said. “My landlord is good. I don’t know about the other ones but if they are asking for more money from the government, they should be investigated.”