| (9) Utility Allowance. The RAC will identify the Department
approved Utility Allowance used for the Assisted Units for the Eligible
Multifamily Property. The Owner must notify the Department if there
are changes to the Utility Allowance calculation methodology being
used.
(10) Termination. Although the Department has discretion
to terminate a RAC due to good cause, an Owner cannot opt-out of a
RAC. The RAC survives a foreclosure, assignment, sale in lieu of foreclosure,
or sale of the Eligible Multifamily Property to the extent allowed
by law.
(11) Foreclosure of Eligible Multifamily Property.
Upon foreclosure, assignment, sale in lieu of foreclosure, or sale
of the Eligible Multifamily Property to the extent allowed by law:
(A) The RAC shall be transferred to new owner by contractual
agreement or by the new owner's consent to comply with the RAC, as
applicable;
(B) Rental Assistance Payments will continue uninterrupted
in accordance with the terms of the RAC; and
(C) Voluntary and involuntary transfers or conveyances
of property must adhere to the ownership transfer process in §10.406
of this title (relating to Ownership Transfers (§2306.6713)).
(i) Advertising and Affirmative Marketing.
(1) Advertising Materials. Upon the execution of the
Property Agreement, the Owner must provide materials for the purpose
of advertising the Eligible Multifamily Property, including but not
limited to:
(A) Depictions of the units including floor plans;
(B) Brochures;
(C) Tenant selection criteria;
(D) House rules;
(E) Number and size of available units;
(F) Number of units with accessible features (including,
but not limited to units designed to meet Uniform Federal Accessibility
Standards, the Fair Housing Act, or the Americans with Disabilities
Act);
(G) Documentation on access to transportation and commercial
facilities; and
(H) A description of onsite amenities.
(2) Affirmative Marketing. The Department and its service
partners are responsible for affirmatively marketing the Program to
Eligible Applicants.
(3) At any time, the Department may choose to advertise
the Eligible Multifamily Property, even if the Eligible Multifamily
Property has not yet entered into a RAC.
(j) Leasing Activities.
(1) Segregation of Assisted Units. The Owner must take
actions or adopt procedures to ensure that the Assisted Units are
not segregated to one area of a building (such as on a particular
floor or part of a floor in a building) or in certain sections within
the Eligible Multifamily Property.
(2) Form of Lease. The Owner will use the HUD Section
811 PRA Model Lease (HUD-92236-PRA), Exhibit 11 of the Cooperative
Agreement and any Department approved Addendums, for all Eligible
Families once a RAC is signed. The initial lease will be for not less
than one year.
(3) Communication. Owners are required to document
in writing all communication between the Eligible Tenant and the Owner,
or Owner-designated agent regarding applications, notifications, evictions,
complaints, non-renewals and move outs.
(4) Lease Renewals and Changes. The Owner must notify
the Department of renewals of leases with Eligible Families and any
changes to the terms of the lease.
(5) Development Policies. Upon the execution of the
RAC, an Owner is required to submit a copy of the Development Policies
(House Rules) to the Department for review. If deficiencies are noted,
the Development will be required to correct and resubmit to the Department
until all deficiencies have been properly corrected. The Owner is
required to send a copy of amendments to the House Rules to the Department
before implementing changes.
(k) Rent.
(1) Tenant Rent Payment.. The Owner will determine
the Tenant Rent payment of the Eligible Tenant, based on HUD Handbook
4350.3 and HUD Notices, and is responsible for collecting the Tenant
Rent payment.
(2) Utility Reimbursement. The Owner is responsible
for remitting any Tenant Rent payment due to the Eligible Tenant if
the Utility Allowance exceeds the Total Tenant Payment no later than
the 5th day of each month, beginning 30 days after initial move in.
(3) Rent Increase. Owner must provide the Eligible
Tenant with at least 30 days notice before increasing rent, in accordance
with HUD Handbook 4350.3.
(4) Rent Restrictions. Owner will comply with the following
rent restrictions:
(A) If a Unit at the Development has a Department enforced
rent restriction that is equal to or lower than Fair Market Rent (FMR),
the initial rent is the maximum Department enforced rent restriction
for that Unit, not to exceed the 60% Area Median Family Income limit.
(B) If there is no existing Department enforced rent
restriction on the Unit, or the existing Department enforced rent
restriction is higher than FMR, the Department will work with the
Owner to conduct a market analysis of the Eligible Multifamily Property
to support that a rent higher than FMR is attainable.
(C) After the signing of the original RAC with the
Department, the Owner may request a new anniversary date to be consistent
with other rent restrictions on the Eligible Multifamily Property
allowed by the Department.
(D) After the signing of the original RAC, upon request
from the Owner to the Department, Rents may be adjusted on the anniversary
date of the RAC.
(E) Adjustments may not result in higher rents charged
for an Assisted Unit as compared to a non-assisted unit. The calculation
or methodology used for the annual increase amount will be identified
in the Eligible Multifamily Property's RAC.
(F) Owner can submit a request for a rent increase
or to change the contract anniversary date using HUD Form 92458.
(l) Vacancy; Household Changes; Transfers; Eviction.
(1) Holding Assisted Units. Once an Owner signs a RAC,
the Eligible Multifamily Property must hold an available Assisted
Unit for 60 days while a qualified Eligible Applicant applies for
and moves into the Assisted Unit.
(2) Notification. Owner will notify the Department
of determination of ineligibility or the termination of any participating
Eligible Families or any member of a participating Eligible Family.
(3) Initial Lease-up. Owners of a newly constructed,
acquired and/or rehabilitated Eligible Multifamily Property must notify
the Department no later than 180 days before the Eligible Multifamily
Property will be available for initial move-in. Failure to reserve
the agreed upon number of Assisted Units for Eligible Families will
be cited as noncompliance, be referred for administrative penalties,
and be considered possible grounds for Debarment.
(4) Vacancy. Upon execution of the RAC, the Owner must
notify the Department of any vacancy of an Assisted Unit at the Eligible
Multifamily Property as soon as possible, not to exceed seven calendar
days from when the Owner becomes aware of the eligible Unit availability.
Once the Department acknowledges receipt of the notice, the Department
will notify the Owner within three business days if the Unit is acceptable
and submit a referral. If the qualifying Eligible Tenant vacates the
Assisted Unit, the Department will determine if the remaining family
member(s) is eligible for continued assistance from the Program.
(5) Vacancy Payment. The Department may provide vacancy
payments that cannot exceed 80% of the Contract Rent for up to 60
days from the effective date of the RAC. After the 60 days, the Owner
may lease the Assisted Unit to a non-Eligible Tenant. Developments
without an executed RAC are not eligible for vacancy payments.
(6) Household Changes. Owner will notify the Department
of any changes in family composition in an Assisted Unit within three
business days. If the change results in the Assisted Unit being smaller
or larger than is appropriate for the Eligible Family size, the Owner
must refer to the Department's written policies regarding family size,
unit transfers and waitlist management. If the Department discovers
the Eligible Family is ineligible for the size of the Assisted Unit,
the Owner will be notified but Rental Assistance Payments will not
be reduced or terminated until the Eligible Family can be transferred
to an appropriate sized Assisted Unit.
(7) Transfers. Owner must notify the Department if
the Eligible Family requests a transfer to another Assisted Unit within
the Development. The Department will determine if the Eligible Family
qualifies for the unit transfer, if the new Unit is eligible as an
Assisted Unit and then notify the Owner. If the Department determines
the Eligible Family is ineligible for the size of the Assisted Unit,
the Department will notify the Owner and Rental Assistance Payments
will not be reduced or terminated until the Eligible Family can be
transferred to an appropriate sized Assisted Unit.
Cont'd... |
