COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 68836 JANICE M. FOSS : : Plaintiff-appellee : : JOURNAL ENTRY vs. : and : OPINION GLORIA REDDY : : Defendant-appellant : : : DATE OF ANNOUNCEMENT OF DECISION : NOVEMBER 2, 1995 CHARACTER OF PROCEEDING : Civil appeal from : Cleveland Municipal Court : Case No. 94 CVI 14013 JUDGMENT : REVERSED AND REMANDED. DATE OF JOURNALIZATION : _______________________ APPEARANCES: For plaintiff-appellee: PAUL T. KIRNER Attorney at Law Timber Ridge Corp. Center 8025 Corporate Circle N. Royalton, Ohio 44133 For defendant-appellant: PETER M. ISKIN Attorney at Law 1223 West Sixth Street Cleveland, Ohio 44113 EDWARD GREGORY Attorney at Law 3408 Lorain Avenue Cleveland, Ohio 44113 TIMOTHY E. McMONAGLE, J.: Defendant-tenant Gloria Reddy appeals from a decision of the Cleveland Municipal court which rendered judgment for the plaintiff-landlord on the complaint and first counterclaim of the defendant and determined that the defendant had no standing to bring her second counterclaim. This appeal concerns the trial court's determination on the defendant's lack of standing to bring the second counterclaim. For the reasons set forth below, we reverse. On June 28, 1994, plaintiff-appellee Janice M. Foss filed a complaint for money only against defendant-appellant Gloria Reddy in the Small Claims Division of the Cleveland Municipal Court. Plaintiff was the landlord of the defendant/tenant of the property which gave rise to this matter. The complaint alleged that the defendant was liable for damage to the rental unit. On August 16, 1994, defendant filed her answer and counter- claims. The first counterclaim alleged that plaintiff had wrong- fully withheld the defendant's security deposit and requested relief pursuant to R.C. 5321.16. The second counterclaim re- quested relief pursuant to R.C. 5321.04(A) for the plaintiff/land- lord's failure to maintain the rental unit. - 3 - The case was called for trial on December 19, 1994 and was referred to the referee for decisions on all issues of law and fact. The report of the referee was approved and confirmed by the trial court judge and filed January 18, 1995. On January 30, 1995, the defendant filed "Objections to the Referee Report and Recommendations." On March 28, 1995, the "Objections" were overruled and judgment was entered for the plaintiff. On April 12, 1995, the defendant-appellant filed this timely appeal. The facts which gave rise to this matter are as follows. Plaintiff-appellee owned the rental property which the defendant- appellant leased, pursuant to the Section 8 Existing Housing Program that CMHA administers, from approximately February 1993 until October 1993. Throughout the tenancy, the rental obligation for the rental unit was $400 per month. Pursuant to the Section 8 Existing Housing Program, the defendant was required to pay $15 per month of the rental obligation and CMHA was required to pay, on behalf of the defendant, $385 per month. After the defendant had vacated the rental unit, the plain- tiff sued for damages allegedly caused by the defendant and her children. The defendant counterclaimed for her security deposit and made a claim for money damages against the plaintiff/landlord for the landlord's failure to maintain the premises in compliance with R.C. 5321.04(A). - 4 - The trial court found that the defendant was liable to the plaintiff for damage in the amount of $346.50 on plaintiff's com- plaint. The trial court allowed defendant's first counterclaim, the return of the security deposit, as a set-off to the amount due to the plaintiff for the defendant's liability for the damage claimed in the suit. The trial court determined that the defen- dant lacked standing to bring her second counterclaim based upon R.C. 5321.04(A) as the defendant "was the third party beneficiary to the rental contract between the Plaintiff and C.M.H.A. because the defendant paid only $15.00 per month rent and C.M.H.A. paid $385.00 as rent on the defendant's behalf." For the reasons set forth below we reverse. I. Appellant's sole assignment of error for our review provides: THE TRIAL COURT ERRED AS A MATTER OF LAW IN HOLDING THAT GLORIA REDDY, A TENANT, LACKS STANDING TO PROSECUTE HER R.C. 5321.04(A) CLAIM FOR MONEY DAMAGES AGAINST JANICE M. FOSS, HER LANDLORD. Appellant argues that a tenant who leases residential prem- ises pursuant to the Section 8 Existing Housing Program, 42 U.S.C. 1457f(b), has standing to prosecute a R.C. 5321.04(A) claim for money damages against a landlord for the landlord's failure to maintain the premises in compliance with R.C. 5321.04(A) during the tenancy. We agree. - 5 - To determine whether the appellant has standing to prosecute her claim pursuant to the statutory mandate of R.C. Chapter 5321, statutory language must be reviewed. R.C. 5321.04(A) establishes a residential landlord's obligations with respect to maintenance of and services for his or her rental units. The landlord is to put and keep the rental premises in a fit and habitable condition. R.C. 5321.04(A)(2). Section 8 landlords are "landlords" as de- fined in R.C. 5321.01(B). The appellant herein was a person entitled under a rental agreement to the use and occupancy to the exclusion of others, which makes the appellant a "tenant" as defined in R.C. 5321.01(A). R.C. 5321.12 provides that in any action under Chapter 5321 of the Revised Code, any party may recover damages for the breach of contract or the breach of duty imposed by law. A landlord who fails to maintain rental premises as required by R.C. 5321.04 is liable both for damages for breach of contract, as the rental contract necessarily incorporates the duties imposed by the re- vised code, and for damages for negligence, as the violation of a duty imposed by statute constitutes negligence per se. Shroades v. Rental Homes (1981), 68 Ohio St. 2d 20. The parties in the within matter were participants in the Section 8 Existing Housing Program, a federally-funded rent sub- sidy program for lower-income families. Participants in this program lease existing, private, rental units as tenants, and a - 6 - public housing agency ("PHA") pays the owner/landlord of the property a portion of the contract rent. Eligible applicants receive a certificate of family partici- pation and then find an existing rental unit that meets the re- quirements of the program and whose owner is willing to lease the unit to the family in accordance with the requirements of the program. The PHA determines whether program requirements are met with respect to the housing quality of the rental unit, the amount of the contract rent and the other terms of the lease. The pro- gram requirements for the lease include the HUD Lease Addendum. It is a requirement that the landlord and the tenant be parties to the rental agreement. The owner of the property and the PHA execute the contract for the housing assistance payments ("HAP"). The PHA contracts with the owner to make housing assistance payments to the owner (the Section 8 landlord) on behalf of the Section 8 tenant in an amount equal to the difference between the contract rent and the tenant rent. There are, then, two contracts which govern the relationship of the parties: the HAP contract and the HUD Lease Addendum. The PHA and the appellee (landlord) in this matter are the parties to the HAP contract. The appellant (tenant) and the appellee (land- lord) are the parties to the lease agreement. The appellant brought her second counterclaim against her landlord pursuant to R.C. 5351.04(A) based upon the appellant's - 7 - status as a tenant and the appellee's status as the landlord within the Lease Addendum to which they each were a party. The trial court erred in its determination that the appellant was a third-party beneficiary to the agreement and found that the appellant had no standing to bring her claim. The rationale of the trial court for its conclusion was the requirement of the rental agreement that the appellant's portion of the monthly contract rent obligation be only $15 of the rent of $400. The provision in the rental agreement concerning the payment of Section 8 subsidies on behalf of the appellant by the PHA does not alter the fact that the appellant was a party to the rental agreement. The appellant here falls within the statutory requirements of R.C. Chapter 5321. Appellant was a tenant and appellee was the landlord of the property pursuant to a lease agreement and, there- fore, appellant has standing to bring her action as stated in her second counterclaim pursuant to R.C. 5321.04(A) against her land- lord for the landlord's failure to maintain the rental property as required. We note that we are only addressing the issue of the appel- lant's standing to maintain her action before the trial court against her landlord pursuant to R.C. 5321.04. We do not address the merits of the appellant's claim nor do we address the issue of damages should the appellant prevail. Accordingly, the defendant-appellant's assignment of error is well taken. - 8 - Judgment reversed and remanded. - 9 - This cause is reversed and remanded to the lower court for further proceedings consistent with this opinion. It is, therefore, considered that said appellant recover of said appellee her costs herein. It is ordered that a special mandate be sent to said court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. JAMES M. PORTER, P.J. and JOSEPH J. NAHRA, J. CONCUR JUDGE TIMOTHY E. McMONAGLE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announce- ment of decision (see Rule 26). Ten (10) days from the date hereof, this document will be stamped to indicate journalization, .