HUD Proposed Rule on Pet Deposits for Multifamily Housing

HUD published a proposed rule in the Federal Register on May 24, 2013 that would change the requirements for owners of HUD-assisted multifamily housing relative to the collection of pet deposits on projects intended for occupancy by elderly or disabled residents.


The current regulation requires that owners collect pet deposits only through gradual accumulation, i.e., an initial payment followed by subsequent monthly payments. The initial deposit may not exceed $50.00 followed by no more than $10.00 per month until the full deposit (no more than $300) is reached.


Other HUD programs give owners the flexibility of accumulating the deposit or requiring the full amount when the pet is brought into the unit. This proposed rule gives HUD-assisted multifamily housing the same discretion, and would apply to a number of HUD programs, including project-based Section 8.


The current requirement has at times imposed an undue hardship on property owners. If costs relating to a pet (e.g., repair, replacement, fumigation, etc.) are incurred shortly after move-in, the accumulated deposit may be inadequate to cover the cost, meaning the owner would have to use reserves or the tenant’s security deposit.


While the proposed regulation encourages owners to consider allowing accumulated deposits from lower-income residents when economically feasible to do so, it does not impose any special requirement to do so.


Keep in mind that this is a proposed rule – you should make no changes in your current policies until and if the rule becomes final. Comments are due to HUD by July 23, 2013. Any final rule will be published after HUD reviews and considers all comments.