Biden Administration Introduces "Renters Bill of Rights"

person A.J. Johnson today 03/12/2023

In late January 2023, the Biden administration released a Blueprint for a Renters Bill of Rights.  This blueprint describes federal actions around five guiding renter protections: Safe, Quality, Accessible, and Affordable Housing; Clear and Fair Leases; Education; Enforcement and Enhancement of Renters Rights; the Right to Organize; and Eviction Prevention, Diversion, and Relief.

The Federal Housing Finance Agency (FHFA) announced it will identify the opportunities and challenges of adopting and enforcing tenant protections, including policies that limit egregious rent increases at properties with Government Sponsored Enterprise (GSE) backed mortgages going forward.

FHFA is also going to publish a GSE Look-Up Tool to determine if a property is backed by Fannie Mae or Freddie Mac financing and requires a 30-day notice to vacate for non-payment of rent. HUD will also issue a notice of proposed rulemaking requiring that PHAs and owners of project-based rental assistance properties provide no less than a 30-day notice of lease termination due to nonpayment of rent.

The blueprint also recommends that local governments take the following actions: (1) immediately seal eviction filings and only unseal them in the case of a decision against the tenant; (2) provide the right to counsel in eviction proceedings; and (3) prohibit source of income discrimination.

Following is a description of the "five principles" outlined in the Blueprint.

First Principle: Access to Safe, Quality, Accessible, and Affordable Housing

Renters should have access to housing that is safe, decent, and affordable and should pay no more than 30 percent of household income on housing costs. Owners of rental housing and state and local governments should ensure that homes for rent meet habitability standards and are free of health and safety hazards, such as lead or mold. In addition, owners should provide services and amenities as advertised or included in the lease (such as utility costs and functional appliances) and ensure that the residential housing unit is well maintained (including common areas). Renters should face minimal barriers when applying for housing and receiving housing assistance, which includes minimally burdensome application and documentation requirements and fair and equal tenant screening. Increases in rents should be reasonable, with the acknowledgment that rents may need to increase to cover operating costs. These increases should be transparent and fair to protect against gouging.

In 2019, almost 25% of renters spent half their income on rent. Nationally, rents rose 26% during the pandemic. Limited housing supply has created more competition for fewer available units, which gives owners even more leverage in deciding to whom to rent to, what lease terms to offer, and whether and how much to raise rents. At the same time, the housing stock in America is aging, and more rental housing is facing obsolescence or poor housing conditions.

Perhaps in recognition of the fact that private owners who do not operate under any programmatic regulations (i.e., conventional housing) are not responsible for making housing affordable. These owners operate rental housing for the profits that can be made from such housing. Offering incentives for affordability is the responsibility of the government, at the federal, state, and local levels. To accomplish this, the Biden Administration has proposed the largest expansion of the Housing Choice Voucher program in decades. In addition to this step, the Administration has proposed the following:

  • The Federal Trade Commission (FTC) will explore ways to expand the use of its authority under the FTC Act to take action against acts and practices that unfairly prevent consumers from obtaining and retaining housing.
  • As announced in November, the Federal Housing Finance Agency (FHFA), an independent agency, will increase affordability in the multifamily rental market by classifying multifamily loans with loan agreements that restrict rents at levels affordable to households with incomes between 80 and 120 percent of Area Median Income as "mission-driven." In 2023, FHFA required that at least 50 percent of all Freddie Mac and Fannie Mae purchases of multifamily loans be mission-driven. In 2022, Freddie Mac and Fannie Mae purchased a combined $142 billion in multifamily loans supporting over one million units. If the same activity holds in 2023, this will mean an investment in approximately 700,000 affordable units.

Second Principle: Clear & Fair Leases

Renters should have a clear and fair lease that has defined rental terms, rights, and responsibilities. Leases should not include mandatory arbitration clauses, unauthorized terms, hidden or illegal fees, false representations, or other unfair or deceptive practices. A lease should provide a transparent policy regarding security deposits, with those deposits being appropriately sized and placed in an interest-bearing account for the duration of the lease. The lease should also provide reasonable advance notice of actions related to the unit, including notice of entry for inspection by the housing provider and significant changes to the unit. Finally, the lease terms should be written in simple and clear language accessible to the renter, and the leasing process should ensure tenants understand the terms of the lease through a plain-language briefing.

A lease establishes the foundation for the housing provider and tenant relationship, highlighting the rights, responsibilities, and recourse that exists for both parties. A lease covers the terms for what is likely the largest single expense a household makes each month and over the course of a year. The trend of more leases with problematic provisions can be partially attributed to the increased use of shared forms, which are easily accessible through the internet and may include terms that are not legally enforceable in the state or locality in which the property is located.

To ensure fair leases to the greatest extent possible, the Administration is announcing the following new actions:

  • USDA will institute a broad set of actions that will advance clear leases and ensure tenants can seek compliance with lease terms without facing retaliation across its portfolio of 400,000 units of multifamily rental housing.
  • Specifically, USDA is developing a clear and fair lease that is similar to the model lease used in HUD Section 8 properties.
  • USDA will also create a tenant grievance FAQ outlining clear steps for tenants appealing a management decision and will distribute it to owners and management agents,  and ask for distribution to tenants and tenant advocacy groups.
  • Further, USDA Rural Development is working to create a Tenant Rights and Responsibilities brochure modeled after the HUD Multifamily brochure for assisted housing residents, increasing consistency between the two agencies and clarifying Rural Development tenants’ rights and responsibilities.
  • USDA will explore updating its regulations to require borrowers with federal credit from the department’s Rural Housing Service to utilize the brochure.

Owners and managers in the RD Section 515 Program should be prepared for this upcoming change. A good starting point is a review of the current HUD Model Lease for Multifamily Housing and the HUD Rights & Responsibilities Brochure. This will give operators of Section 515 housing an idea of what may be coming down the road.

Third Principle: Education, Enforcement, and Enhancement of Rights

The Administration position is that Federal, state, and local governments should do all they can to ensure renters know their existing legal rights and to protect renters from unlawful discrimination and exclusion that can take many different forms.

The Fair Housing Act (FHA) bans discrimination based on race, color, religion, sex (including sexual orientation and gender identity), disability, familial status, and national origin, including practices that have an unjustified disparate impact on a protected class. The Administration proposes to expand the FHA to prohibit discrimination based on source of income.

In order to implement this third principle, HUD is finalizing a rule to clarify that the Fair Housing Act continues to bar practices with unjustified discriminatory effects notwithstanding efforts to weaken its reach. In addition, HUD has published a proposed Affirmatively Furthering Fair Housing rule to strengthen and better align grantee planning efforts to advance fair housing goals.

The federal government has advanced other rights beyond those protected by the Fair Housing Act. For example, discrimination against a holder of a Housing Choice Voucher is banned in the federal Low-Income Housing Tax Credit (LIHTC) program, which is the largest affordable housing production program in the country. The Administration has announced the following new actions:

Tenant Background Checks:

  • The Consumer Financial Protection Bureau (CFPB) has said it will identify guidance or rules that it can issue to ensure that the background screening industry adheres to the law and coordinate law enforcement efforts with the FTC to hold tenant background check companies accountable for having reasonable procedures to ensure accurate information in the credit reporting system.
  • HUD, FHFA, FTC, and USDA have said they will work with CFPB to release best practices on the use of tenant screening reports, including the importance of communicating clearly to tenants the use of tenant background checks in denying rental applications or increasing fees and providing tenants the opportunity to address inaccurate information contained within background screening reports. HUD, FHFA, and USDA have said they will strongly encourage property owners in their respective portfolios to align with these best practices and inform them of any additional relevant legal requirements in their respective portfolios. HUD will also release guidance addressing the use of tenant screening algorithms in ways that may violate the Fair Housing Act.

Source of Income Discrimination:

  • Discrimination based on a person’s source of income is not expressly prohibited under the Fair Housing Act. There are several ongoing agency actions that will be enhanced, consistent with agency authorities, to reduce such discrimination going forward. Consistent with existing LIHTC rules, the Treasury Department reiterates that LIHTC building owners should lease units in a manner consistent with HUD’s nondiscrimination rules and are prohibited from refusing to lease units to prospective tenants due to their status as holders of Housing Choice Vouchers or certificates of eligibility. The Treasury Department will meet with tenants, advocates, housing providers, and researchers to discuss ways to further the goals of tenant protections, including those around source of income, as well as broader issues of affordability and eviction prevention with respect to the LIHTC incentive.  HUD will explore opportunities to address source of income discrimination through guidance.

Fourth Principle: The Right to Organize

The Administration believes that renters should have the right to organize without obstruction or harassment from their housing provider or property manager and should not risk losing housing over organizing.

Tenants in different types of HUD and RD programs have recognized rights to organize. The Administration is not proposing that the government impose this requirement on non-assisted properties. They are taking the following steps:

  • The Department of Defense (DoD) commits to ensuring that military members living in DoD’s government-owned, government-controlled, or privatized housing have the right to organize and affirms their right to report housing issues to their chain of command and/or Military Housing Office without fear of retribution or retaliation.
  • HUD’s Office of Multifamily Housing is developing a Notice of Funding Opportunity (NOFO) to distribute appropriated funds to support tenant capacity-building activities, including tenant education and outreach.
  • HUD’s Office of Multifamily Housing will build on existing training and technical assistance strategies to promote engagement with residents and implementation of the Rental Assistance Demonstration (RAD) resident protections, including grievance procedures, by owners of RAD-converted properties. This will include fact sheets and similar public resources, targeted outreach to owners of recently converted properties, and measures to refresh awareness of program expectations following the completion of the conversion process.

It should be noted that these actions will not apply to LIHTC properties.

Fifth Principle: Eviction Prevention, Diversion, and Relief

Before the pandemic, roughly 900,000 evictions were completed against tenants every single year. In order to reduce the number of evictions, the Administration is taking the following actions:

  • HUD will issue a notice of proposed rulemaking, to build upon the previously issued Interim Final Rule, which will propose to require that PHAs administering a public housing program and owners of project-based rental assistance properties provide no less than 30 days advanced notification of lease termination due to nonpayment of rent.
  • HUD will award $20 million for the Eviction Protection Grant Program in fiscal year 2023, which will fund non-profits and governmental entities to provide legal assistance to low-income tenants at risk of or subject to eviction.
  • FHFA, Freddie Mac, and Fannie Mae have indicated their commitment to publishing information about the Enterprise Look-Up Tools, which allow tenants to determine if their property is backed by Fannie Mae or Freddie Mac financing and requires the 30-day notice to vacate for non-payment of rent. The Enterprises will continue to publish this information and assess how the individual tools might be enhanced to improve utility.

Bottom Line -  This "Renters Bill of Rights" will have a direct impact on federally assisted housing, with some minor effects across the non-federal universe of rental housing. The most immediate impact will be felt in the rural housing community due to the Rural Development Service development of a Model Lease and "Rights & Responsibilities" brochure. At the same time, the push to create "best practices" relative to applicant background screening should lead landlords to examine current practices - before they are forced to do so by state or local agencies.

With regard to the LIHTC program, The Treasury Department will meet with tenants, advocates, housing providers, and researchers to discuss ways to further the goals of tenant protections, including those around source of income, as well as broader issues of affordability and eviction prevention with respect to the LIHTC incentive. 

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HUD Expands List of Federally Mandated Income Exclusions

On January 31, 2024, the Department of Housing and Urban Development (HUD) published an updated list of income excluded for HUD-assisted housing programs. Since the Low-Income Housing Tax Credit Program (LIHTC) must follow HUD rules regarding income determination, these exclusions also apply to the LIHTC program. Four new income exclusions were added, and existing exclusions were modified to specifically identify which sources of income are excluded from income calculations and asset determinations. This is the first comprehensive update of income exclusions since May 2014, and it incorporates the Housing Opportunities Through Modernization Act (HOTMA) exclusions. New Income Exclusions HUD has added four types of income that will no longer be counted for affordable housing program purposes. These include specific tax refunds, allowances for children of some veterans, distributions from ABLE accounts, and emergency rental assistance payments. Tax Refunds: The amount of any refund (or advance payment for a refundable credit) issued under the Internal Revenue Code is excluded from income. Such refunds are also excluded from assets for 12 months after being received. Children of Certain Service Members: Allowances paid to children of certain Thailand service veterans born with spina bifida are excluded from income and assets. This is in addition to any allowances paid to children of Vietnam veterans born with spina bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean service veterans born with spina bifida. ABLE Account Distributions: Any amount in an Achieving a Better Life Experience (ABLE) account is excluded from income and assets. This includes the value of distributions from and certain contributions to ABLE accounts. Emergency Rental Payments: Payments received by a household under the Emergency Rental Assistance Program, which was part of the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021, are excluded from income and assets. Modifications to Existing Exclusions In addition to adding new income exclusions, HUD is modifying existing exclusions. AmericorpsVISTA payments: In the past, payments to volunteers under the Domestic Volunteer Service Act of 1973 were always excluded. Now, such payments are included in income if the CEO of the Corporation for National and Community Service determines that the value of the payments, adjusted to reflect the number of hours served by volunteers, is equal to or greater than the federal or state/local minimum wage, whichever is greater. Tribal Trust Settlements: The first $2,000 of per capita payments are excluded unless the per capita payments exceed the amount of the original Tribal Trust Settlement. NAHASDA Benefits: The change more accurately captures the language in the United States Code that describes the exclusion of programs under the Native American Housing Assistance & Self-Determination Act. Individual Development Accounts (IDA): Any amounts in an IDA are excluded from assets, and any assistance, benefit, or amounts earned by or provided to an individual development account are excluded from income. This exclusion was updated to clarify that an IDA is excluded from assets, and any IDA benefits are also excluded from income. This program was defunded in 2017, so the exclusion is moot. It is important to note that HUD s updated list of federally mandated income exclusions is not a comprehensive list of all exclusions from income. Following are the types of income that are expressly excluded by federal law. Other income exclusions, as listed in various HUD Handbooks and Notice H 2023-10/PIH 2023-27, remain applicable. Also note that the exclusions listed below apply to income only, except where noted concerning assets. The value of the allotment provided to an eligible household under the Food Stamp Act of 1977. This exclusion also applies to assets. Payments, including for supportive services and reimbursement of out-of-pocket expenses, for volunteers under the Domestic Volunteer Service Act of 1973 are excluded from income except that the exclusion shall not apply in the case of such payments when the Chief Executive Officer of the Corporation for National and Community Service appointed under 42 U.S.C. 12651c determines that the value of all such payments, adjusted to reflect the number of hours such volunteers are serving, is equivalent to or greater than the minimum wage then in effect under the Fair Labor Standards Act of 1938 or the minimum wage, under the laws of the State where such volunteers are serving, whichever is the greater. This exclusion also applies to assets. Certain payments received under the Alaska Native Claims Settlement Act. This exclusion also applies to assets. Income derived from certain submarginal land of the United States is held in trust for certain Indian tribes. This exclusion also applies to assets. Payments or allowances made under the Department of Health and Human Services Low-Income Home Energy Assistance Program. This exclusion also applies to assets. Income derived from the disposition of funds to the Grand River Band of Ottawa Indians. This exclusion also applies to assets. The first $2,000 of per capita shares received from judgment funds awarded by the National Indian Gaming Commission or the U.S. Claims Court, the interests of individual Indians in trust or restricted lands, and the first $2,000 per year of income received by individual Indians from funds derived in interests held in such trust or restricted lands. This exclusion does not include proceeds of gaming operations regulated by the Commission. This exclusion also applies to assets. Amounts of student financial assistance funded under Title IV of the Higher Education Act of 1965, including awards under Federal work-study programs or the Bureau of Indian Affairs student assistance programs. For Section 8 programs only, any financial assistance in excess of amounts received by an individual for tuition and any other required fees and charges under the Higher Education Act of 1965 from private sources or an institution of higher education (as defined under the Higher Education Act of 1965), shall not be considered income to that individual if the individual is over the age of 23 with dependent children. Payments received from programs funded under Title V of the Older Americans Act of 1965. Payments received on or after January 1, 1989, from the Agent Orange Settlement Fund or any other fund established pursuant to the settlement in Re Agent Orange Product Liability Litigation, M.D.L. No 381 (E.D.N.Y.). This exclusion also applies to assets. Payments received under the Maine Indian Claims Settlement Act of 1980. This exclusion also applies to assets. The value of any childcare provided or arranged (or any amount received as payment for such care or reimbursement for costs incurred for such care) under the Child Care and Development Block Grant Act of 1990. Earned income tax credit (EITC) refund payments received on or after January 1, 1991, for programs administered under the United States Housing Act of 1937, title V of the Housing Act of 1949, Section 101 of the Housing & Urban Development Act of 1965, and Sections 221(d)(3), 235, and 236 of the National Housing Act. This exclusion also applies to assets. Note - while this income exclusion addresses EITC refund payments for certain HUD programs, the exclusion in 26 U.S.C. 6409 excludes Federal tax refunds more broadly for any Federal program or under any State or local program financed in whole or in part with Federal funds. The amount of any refund (or advance payment for a refundable credit) issued under the Internal Revenue Code is excluded from income and assets for 12 months after receipt. Payments by the Indian Claims Commission to the Confederated Tribes and Bands of the Yakima Indian Nation or the Apache Tribe of the Mescalero Reservation. This exclusion also applies to assets. Allowances, earnings, and payments to AmeriCorps participants under the National and Community Service Act of 1990. Any allowance paid to children of Vietnam veterans born with spina bifida, children of women Vietnam veterans born with certain birth defects, and children of certain Korean and Thailand service veterans born with spina bifida. This exclusion also applies to assets. Any amount of crime victim compensation that provides medical or other assistance (or payment or reimbursement of the cost of such assistance) under the Victims of Crime Act of 1984 received through a crime victim assistance program, unless the total amount of assistance that the applicant receives from all such programs is sufficient to fully compensate the applicant for losses suffered as a result of the crime. This exclusion also applies to assets. Allowances, earnings, and payments to individuals participating in programs under the Workforce Investment Act of 1988, reauthorized as the Workforce Innovation and Opportunity Act of 2014. Any amount received under the Richard B. Russell School Lunch Act and the Child Nutrition Act of 1966, including reduced-price lunches and food under the Special Supplemental Food Program for Women, Infants, and Children (WIC). This exclusion also applies to assets. Payments, funds, or distributions authorized, established, or directed by the Seneca Nation Settlement Act of 1990. This exclusion also applies to assets. Payments from any deferred U.S. Department of Veterans Affairs disability benefits that are received in a lump sum or in prospective monthly payments. Any amounts (i) not received by the family, (ii) that would be eligible for exclusion under 42 U.S.C. 1382b(a)(7), and (iii) received for service-connected disability under 38 U.S.C. chapter 11 or dependency and indemnity compensation under 38 U.S.C. chapter 13 as provided by an amendment by the Indian Veterans Housing Opportunity Act of 2010 to the definition of income applicable to programs under the Native American Housing Assistance and Self Determination Act (NAHASDA). A lump sum or a periodic payment received by an individual Indian under the class action settlement agreement in the case titled Elouise Cobell et al. v. Ken Salazar et al., 816 F. Supp.2d 10 (Oct 5, 2011, D.D.C), for one year from the time of receipt of that payment as provided in the Claims Resolution Act of 2010. This exclusion also applies to assets. As provided by the Assets for Independence Act, as amended, any amounts in an "individual development account are excluded from assets, and any assistance, benefit, or amounts earned by or provided to the individual development account are excluded from income. An Individual Development Account (IDA) is a special bank account that assists a family in saving for education, purchasing a first home, or starting a business. To enroll in the program, participants must (1) Have a paying job, (2) earn less than 200% of the federal poverty level, and (3) not have more than $10,000 in assets, excluding one car and one home. The owner of the account contributes money from their job to the account. The contributions are matched from the State TANF program or a special state fund. These additional funds are excluded from income or assets. Per capita payments made from the proceeds of Indian Tribal Trust Settlements listed in IRS Notice 2013-1 and 2013-55 must be excluded from annual income unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe s private bank account in which the Tribe has deposited the settlement proceeds. Such amounts received in excess of the Tribal Trust Settlement are included in the gross income of the members of the Tribe receiving the per capita payments as described in IRS Notice 2013-1. The first $2,000 of per capita payments are also excluded from assets unless the per capita payments exceed the amount of the original Tribal Trust Settlement proceeds and are made from a Tribe s private bank account in which the Tribe has deposited the settlement proceeds. Individuals and families receiving federal assistance for a major disaster or emergency under the Robert T. Stafford Disaster Relief and Emergency Assistance Act and comparable disaster assistance that is provided by States, local governments, and disaster assistance organizations. This exclusion also applies to assets. Any amount in an Achieving Better Life Experience (ABLE) account, distributions from, and certain contributions to an ABLE account established under the ABLE Act of 2014, as described in Notice PIH 2019-09/H 2019-06 or a subsequent or superseding notice. This exclusion also applies to assets. Assistance received by a household under the Emergency Rental Assistance Program under the Consolidated Appropriates Act of 2021 and the American Rescue Plan Act of 2021. While all these exclusions will be reflected in a future update of HUD Handbook 4350.3, that update is not yet available. Therefore, owners and managers of properties subject to HUD income and asset exclusions should keep this list handy.

HUD Provides Guidance on Non-Rent Fees for Subsidized Multifamily Housing Programs

In February 2024, the Department of Housing and Urban Development (HUD) provided guidance on existing policies regarding the fees that owners may and may not charge tenants. None of the guidance is new or reflects any change in HUD regulations. The purpose of the guidance is twofold: (1) to remind owners of the current requirements relative to fees and (2) to seek input from stakeholders on any possible changes to the requirements. Following is an overview of existing HUD policy regarding fees in addition to rent. Application Fees: Owners may not require fees or other costs to accept and process applications. These costs are considered project expenses. Charges at Initial Occupancy: Owners may not collect any money from tenants at initial occupancy other than rent and the maximum HUD-allowed security deposit unless they receive HUD approval to do otherwise. Pet Deposit: An owner of housing specifically designed for occupancy by the elderly and persons with disabilities may require tenants to pay a refundable pet deposit. The pet deposit applies only to tenants who own or keep cats or dogs in their units. HUD Handbook 4350.3 outlines the maximum amount of the pet deposit that may be charged by an owner on a per-unit basis. An owner may use the pet deposit only to pay reasonable expenses directly attributable to the pet's presence on the property, including (but not limited to) the cost of repairs and replacements to, and fumigation of, the unit and the cost of animal care facilities. Owners must return the unused portion of a pet deposit to the tenant within a reasonable time after the tenant moves from the property or no longer owns or keeps a pet in the unit. Screening Fees: Owners may not charge applicants for costs associated with screening applicants, including screening for criminal history or verifying income and eligibility. Hence, owners must not require applicants to pay credit report charges, charges for home visits, charges to obtain police reports or other costs associated with the above functions. These costs are considered project expenses. Security Deposit: Owners may collect a security deposit during the initial lease execution. However, the owner must collect a refundable security deposit at the time of the initial lease execution for the following programs:Section 8 New Construction with an AHAP executed on or after November 5, 1979;Section 8 Substantial Rehabilitation with an AHAP executed on or after February 20, 1980;Section 8 State Agency with an AHAP executed on or after February 29, 1980;Section 202/8;Section 202 PAC;Section 202 PRAC; and Section 811 PRAC. Owners may collect the security deposit on an installment basis. The security deposit amount established at move-in does not change when a tenant s rent changes. The amount of the security deposit to be collected is dependent upon: The type of housing program; The date the AHAP or HAP contract for the unit was signed and The amount of the total tenant payment or tenant rent. The HUD Handbook 4350.3, Figure 6-7, outlines the security deposit amount that may be collected for each program. When a tenant transfers to a new unit, an owner may: Transfer the security deposit, or Charge a new deposit and refund the deposit for the old unit. Assistance Animals: Owners may not require an applicant or tenant to pay a fee or a security deposit as a condition of allowing the applicant or tenant to keep an assistance animal. However, if an assistance animal causes damage to the unit or common areas of the dwelling, the owner may charge the individual for the cost of repairing the damage if the owner regularly charges tenants for any damage they cause to the premises. Attorney/Legal Costs: There may be no lease provision that the tenant agrees to pay all attorney and other legal costs if the owner brings legal action against the tenant, even if the tenant prevails. However, as a party to a lawsuit, a tenant may be obligated to pay attorney s fees or other costs if the tenant loses the suit. Owners may accept payment of court filing, attorney, and sheriff fees from tenants who wish to avoid or settle an eviction suit provided it is permitted under state and local laws, and the fees appear reasonable and do not exceed the actual costs incurred. Bad Behavior: Owners may not charge tenants for bad behavior, such as foul language, noise, or failure to supervise children. Checks Returned for Insufficient Funds: Owners may impose a fee on the second time, and each additional time thereafter, a check is not honored for payment. The owner may bill a tenant only for the amount the bank charges for processing the returned check.HUD or a Contract Administrator (CA) may authorize additional charges if such charges are consistent with local management practices and are permitted under state and local law. Owners of Section 202/8, Section 202 PAC, Section 202 PRAC, and Section 811 PRAC projects may never charge fees for checks returns for insufficient funds. Damages: Whenever damage is caused by carelessness, misuse, or neglect by the tenant, household member, or visitor, the tenant is obligated to reimburse the owner within 30 days of receiving a bill from the owner. The owner s bill is limited to actual and reasonable costs incurred by the owner for repairing the damages. Facilities & Services: Owners may not charge tenants separately for equipment and services included in the rent. Owners may charge tenants for other services or facilities (e.g., cable TV or use of community space in the project) only if all of the following conditions are met:Part C of the most recently approved rent schedule includes the services, facilities, and charges.A schedule of those charges has been posted or distributed to the tenants.The tenant can use those facilities or services if they are optional. If not previously authorized, the charges must be approved by HUD before implementation. Owners may charge for parking only in unsubsidized projects where HUD previously approved it. They may also charge for car heaters in cold climates where parking spaces are equipped with them. Infestation Treatment: Owners may not charge a tenant for the extermination cost unless the owner can demonstrate that the tenant's carelessness or neglect caused the infestation. Keys & Lockouts: Owners may charge tenants for answering lock-out calls and providing extra keys. At the time of move-out, the owner may charge the tenant for unreturned keys. Late Payment of Rent: Owners may charge a late fee if the tenant has been given at least five calendar days as a grace period to pay the rent. The rent must be received by the fifth day, not postmarked on that day. On the sixth day, the owner may charge a fee not to exceed $5.00 for the period of the first through fifth day that the rent is not paid. After that, the owner may charge a fee of $1.00 per day for each additional day the rent remains unpaid for the month. HUD or CAs may approve a higher initial late fee if (1) it is permitted under state and local laws, (2) it is consistent with local management practices, and (3) the total late charge assessed for the month does not exceed $30.00. An owner may deduct accrued, unpaid late charges from the security deposit at the time of move-out if such a deduction is permitted under state and local laws. An owner may not evict a tenant for failure to pay late charges. Owners of Section 202/8, Section 202 PAC, Section 202 PRAC, and Section 811 PRAC projects may never charge late rent payment fees. Meals Fee: Owners of properties for the elderly or persons with disabilities for which HUD approved a mandatory meals program before April 1, 1987, may charge a HUD-approved meals fee. The tenants pay such costs, and the fees are not rent. Meeting Space for Tenant Organizations: An owner may charge a reasonable fee, approved by HUD, as may normally be imposed for using such facilities in accordance with procedures prescribed by HUD for the use of meeting space. Other Charges: Owners may require tenants to pay other charges if:HUD or CA has approved the charges, and The schedule of charges is either:Listed in the lease agreement or Has been distributed to all tenants in accordance with the modification of the lease requirements and procedures listed in paragraph 6-12D of Handbook 4350.3. HUD s Office of Multifamily Housing Programs is seeking feedback from stakeholders regarding these policies. Owners and Agents of affected programs may provide comments and feedback to HUD at AssetManagementPolicy@HUD.gov. Responses are due by March 29, 2024.

A. J. Johnson Partners with Mid-Atlantic AHMA for December Training on Affordable Housing - April 2024

During the month of April 2024, A. J. Johnson will be partnering with the MidAtlantic Affordable Housing Management Association for two live webinar training sessions intended for real estate professionals, particularly those in the affordable multifamily housing field. The following sessions will be presented: April 16, Violence Against Woman Act - This two-hour webinar guides owners and managers of affordable housing developments subject to the requirements of VAWA. It covers the background of the law and discusses who the law protects. A full discussion of notice requirements, all required (and prohibited) documentation, lease bifurcation issues, actual and imminent threats, emergency transfer plans, and enforcement mechanisms. Recommendations relating to confidentiality procedures are also provided, as are the basic requirements of a VAWA Plan. April 18: Limited English Proficiency (LEP) and Section 504; Understanding the Requirements for Multifamily Housing - Two of the most misunderstood laws relating to federally assisted affordable housing are the rules regarding Limited English Proficiency (LEP) and the Section 504 requirements. This three-hour live webinar will cover the requirements of each and outline the basic steps affordable housing managers must take to remain compliant with both sets of rules. Most individuals living in the U.S. read, write, speak, and understand English. There are many, however, for whom English is NOT their primary language. For this reason, affordable housing operators with federal assistance are required to comply with the federal government's Limited English Proficiency (LEP) requirements. All programs and operations of entities that receive financial assistance from the federal government, including but not limited to state agencies, local agencies, and for-profit and non-profit entities, must comply with the LEP requirements. Sub-recipients must also comply (i.e. when federal funds are passed through a recipient to a sub-recipient). As an example, Federal Housing Administration (FHA) insurance is not considered federal financial assistance, and participants in that program are not required to comply with Title VI's LEP obligations unless they receive federal financial assistance as well (such as project-based Section 8). This section of the webinar will assist affordable housing owners and managers in their understanding of LEP requirements and will cover the following areas: (1) Ensuring plan compliance; (2) the "four-factor analysis; (3) translation "safe harbors ; (4) monitoring and updating the Plan; and (5) issues relating to reasonableness. The training will also outline exactly which programs and properties are - and are not- subject to LEP requirements. Section 504 of the Rehabilitation Act of 1973 is usually just referred to as "Section 504. Section 504 provides rights to persons with disabilities in federally funded programs and activities, including HUD and RD programs. Specifically, Section 504 states, "No otherwise qualified individual with a disability in the United States ... shall, solely by reason of her or his disability, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program, service or activity receiving federal financial assistance or under any program or activity conducted by any Executive agency or by the United States Postal Service. Section 504 is not the only law prohibiting disability discrimination in programs receiving HUD and RD funds or financial assistance. Other federal laws that require nondiscrimination based on disability include the Fair Housing Act, the Americans with Disabilities Act, and the Architectural Barriers Act. However, this training focuses on Section 504 requirements, including (1) the properties that are subject to Section 504, (2) what is meant by the term "integrated setting, (3) what is meant by program accessibility, (4) who covers costs relating to Section 504 compliance, (5) the definition of an "accessible unit, (6) what physical accessibility features are required, and (7) Section 504 applicability to rehab deals. At the end of this session, participants will understand the requirements of both LEP and Section 504 and will be better able to serve the intended beneficiaries of these two laws and protect the interests of property owners. These sessions are part of a year-long collaboration between A. J. Johnson and MidAtlantic AHMA designed to provide affordable housing professionals with the knowledge needed to manage the complex requirements of the various agencies overseeing these programs effectively. Persons interested in any (or all) training sessions may register by visiting either www.ajjcs.net or https://www.mid-atlanticahma.org.

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