News

Tax Reform Overview - September 27, 2017

On September 27, 2017, the Trump Administration, the House Committee on Ways and Means, and the Senate Finance Committee released "Unified Framework for Fixing Our Broken Tax Code." This nine-page proposal put out by the "big-six" represents the first significant overview of tax reform as it will be proposed by the President and the Congressional tax writing committees. The framework is clearly tilted to favor the wealthy and corporations.   The goals outlined in the publication include: Tax relief for middle-class families; Simplified tax-filing for most Americans; Tax relief for businesses, especially small businesses; Ending tax incentives that send jobs, capital, and tax revenue overseas; and Broaden the tax base and increase fairness by closing special interest tax breaks and loopholes.   The process of developing specific legislation by the Ways and Means and Finance committees will now begin, and will include a series of hearings and (hopefully) bipartisan participation.   Following is an outline of goals for the legislation (and some of my own observations):   Tax Relief & Simplification for American Families   Simplify the tax code and provide tax relief by roughly doubling the standard deduction to: $24,000 for married taxpayers filing jointly, and $12,000 for single filers. This change is designed to eliminate taxes on the first $24,000 of income earned by a married couple and $12,000 earned by a single individual. Under current law, taxable income is subject to seven tax brackets. This proposal reduces the number to three brackets of 12%, 25%, and 35%. The concept is that families in the current 10% bracket will benefit from the larger standard deduction, a larger child tax credit and additional relief to be developed during the committee process. An additional top rate may be added to avoid shifting the tax-burden from high-income to lower- and middle-income taxpayers. The current top rate is 39.6%. Enhanced Child Tax Credit and Middle Class Tax Relief: Personal exemptions for dependents would be repealed but the Child Tax Credit would be increased. The current law allows the first $1,000 of the credit to be refundable and that provision would be retained. Increase the income levels at which the Child Tax Credit begins to phase out. Non-refundable credit of $500 for non-child dependents to help offset the cost of caring for other dependents. Individual Alternative Minimum Tax [AMT]: No details were provided on this, but the stated goal is to simplify the tax code by repealing the existing individual AMT, which requires taxpayers to do their taxes twice. Itemized Deductions: Most itemized deductions will be eliminated, but the home mortgage interest and charitable deductions will be retained. Among the deductions that may be eliminated are the deductions for state and local taxes (most of which are present in "blue" states. Work, Education, and Retirement: No details are provided, but the stated goal is to retain tax benefits that encourage work, higher education, and retirement security. Other Provisions Affecting Individuals: Again, no details - just a statement of intent to simplify the tax code by repealing many exemptions, deductions, and credits for individuals. Death and Generation-Skipping Transfer Taxes: These taxes would be repealed.     Competitiveness & Growth for All Job Creators   Tax Rate Structure for Small Businesses Limits the maximum tax rate applied to the business income of small and family-owned businesses conducted as sole proprietorships, partnerships and S Corporations to 25%. About 95% of businesses in the US are structured as pass-throughs (e.g., S Corporations) and they generate a majority of the government s corporate tax revenue. Adopt measures to prevent the recharacterization of personal income into business income to prevent wealthy individuals from avoiding the top personal tax rate. Tax Rate for Corporations Reduce the corporate tax rate to 20%. Expensing of Capital Investments Permit businesses to immediately write off ("expense") the cost of new investments in depreciable assets other than structures made after September 27, 2017, for at least five years. Interest Expense The deduction for net interest expense incurred by C Corporations will be partially limited. Other Business Deductions & Credits Many business credits will be repealed, but business credits in two areas where tax incentives have proven to be effective will remain: Research & Development; and The Low-Income Housing Tax Credit. Tax Rules Affecting Specific Industries No specifics given - just a desire to improve the current tax code.   The American Model for Global Competitiveness   Territorial Taxation of Global American Companies End incentives to keep foreign profits offshore by exempting them when they are brought back to the United States. Stop Corporations from Shipping Jobs and Capital Overseas Wills set rules to protect the U.S. tax base by taxing at a reduced rate and on a global basis the foreign profits of U.S. multinational corporations.   The cost of this framework is unknown, but estimates range from $2 trillion to more than $5 trillion over the next ten years. The devil is in the details and how this plan will be paid for will determine how quickly it moves through Congress (or if it moves through Congress). The key issue as it stands right now is that the government simply does not have enough money to pay for the plan. Ironically, in order for the Senate to avoid a filibuster (and reliance on the democrats to pass a plan), taxes may actually have to be raised - by as much as $3 trillion over the next decade in order to ensure that the bill is revenue neutral.   The term "revenue neutral" means that the overall legislation will not change the total revenues collected by the Federal government. For example, if tax rates are reduced, as proposed, that reduction has to be paid for by raising revenue in other ways, such as scaling back tax preferences. As noted above, the initial framework scales back a number of preferences, but - what are the chances that these preferences will actually be passed? This is only part of what will make a final tax reform bill so difficult. Here are a few minefields the tax-writing committees will have to navigate:   Scrapping the deduction for what businesses spend on interest is going to be a tough sell - this is a treasured benefit for industries that rely on debt financing - i.e., big banks, private equity firms, electric utilities, real estate developers, farms, and small businesses. Doing away with deductions for state and local taxes will be resisted by House Republicans from high-tax states such as New York and New Jersey. Major objections are already being heard from the real estate industry. While the plan specifically calls for preserving the mortgage interest deduction, a proposal to double the standard deduction will make taxpayers less likely to itemize their tax returns and claim the mortgage deduction. Therefore, one of the main financial advantages to homeownership will be diminished.   While all of us in the affordable housing industry applaud the fact that the Low-Income Housing Tax Credit is included in this initial plan, there is no guarantee it will be there at the end of the process. We will are going to have to be diligent and continue to make the case for the program, or face the possibility that it will be sacrificed to retain the other, less socially beneficial, tax benefits.    

Notice of Solicitation for Multifamily Preservation and Revitilization (MPR) Demonstration Program for Section 514, 515, and 516 Rural Properties

On September 5, 2017, the Rural Housing Service published a Notice of Solicitation for Multifamily Preservation and Revitalization (MPR) Demonstration Program for Section 514, 515, and 516 Rural Properties in the Federal Register.   This notice announces the timeframes to submit preapplications to participate in a demonstration program to preserve and revitalize existing Multi-Family Housing (MFH) projects currently financed under Section 514, Section 515, and Section 516 of the Housing Act of 1949. These are the Section 515 Rural Rental Housing Program and Section 514/516 Off-Farm Labor housing programs. The goal for projects participating in this program is to extend their affordable use without displacing tenants because of increased rents.   This notice does not provide any funding for additional units (with one exception as noted below).   Dates   Pre-applicants selected to submit final applications will be funded to the extent an appropriation act provides sufficient funding. Pre-application submission deadlines are: For pre-applications requesting multiple MPR funding tools (including debt deferral of eligible Section 514 or 515 loans) complete pre-applications are due no later than 5:00 PM Eastern Time December 1, 2017; For any MPR applicants requesting debt deferral only for eligible Section 514 or 515 loans, pre-applications are due no later than 5:00 PM September 28, 2018, and may be submitted on an on going basis.   MPR pre-applications will only be accepted electronically.   Program Description   MPR funds cannot be used to build community rooms, add additional parking areas, playgrounds, or laundry facilities. The funds may be used to repair or renovate existing project items identified in a Capital Needs Assessment (CNA) and to satisfy accessibility transition and fair housing requirements.   If a market study or another acceptable information source demonstrates a need for additional affordable rental housing, MPR funds may be used to add new units, and/or reconfigure the present units, but only within the existing footprint of a project s current or previously resident-occupied structure(s) (e.g., converting the non-residential portion of a mixed-use space into residential units). MPR funds may also be used to meet the projects 5% fully accessible requirement.   Among the tools available under the MPR program are: Debt payment deferral for up to 20-years; Grants (for non-profit applicants only); Zero percent loans; Soft-second loans; and Transfers/Subordination/Consolidations   Award Information   Pre-applications selected under this Notice that become an Agency approved application may be funded with current or future fiscal year funds subject to the availability of Congressional appropriations. Interested parties should note that the Agency has unfunded applications carried over from prior Notices that will receive priority consideration for funding approval.   The Agency anticipates it may not have sufficient funding under this Notice to fund every approved application.   Contact Information   Owners interested in submitting a pre-application under this demonstration program may contact either of the following for additional information: Dean Greenwalt, greenwalt@wdc.usda.gov, [314]457-5933; or Abby Boggs, boggs@wdc.usda.gov, [615]783-1382.

Washer and Dryer Fees for Voucher Holders

Owners of properties that accept applicants who use Housing Choice Vouchers (HCV) need to carefully review the Housing Assistance Payments (HAP) Contract and Voucher Lease Addendum for language relating to who must pay the cost of "utilities and appliances." A recent court case (U. S. v. Wasatch Advantage Group, July 2017) indicated that a washer or dryer may be considered an "appliance," and unless payment for washers and dryers is specifically excluded in the HAP contract and lease addendum, owners may not be able to charge a fee for their use.   Section 8 of Part A of the HAP Contract for vouchers states that the owner shall pay for all utilities and appliances provided by the owner. Part B, 5.b states that the lease must specify what appliances are to be provided or paid by the owner or the tenant, and that the lease must be consistent with the HAP contract.   Part C, 5.e provides that the owner may not charge or accept, from the family or any other source, any payment for rent of the unit in addition to the rent to the owner. Rent to the owner includes all housing services, maintenance, utilities, and appliances to be provided and paid by the owner in accordance with the lease.   When units contain washer/dryer hookups, but not the actual appliances, many owners offer tenants the option of providing their own washer and dryer or renting from the owner. This is common in the apartment industry, and until now, the charging of a fee for rental of the washer and dryer has not been considered an issue. While this case is certainly not determinative with regard to whether an owner may charge for washers and dryers in these cases, it does indicate that owners should be cautious when it comes to offering this service to voucher holders. Certainly if the option is given to non-voucher users it should be offered to residents with vouchers. But, owners should ensure that the HAP Contract and Voucher Lease Addendum specifically state that the washer and dryer are not provided by the owner and that the tenant has the option of providing their owner washer/dryer, not having a washer/dryer, or renting one from the owner.

Understanding the VAWA Certification of Domestic Violence, Dating Violence, Sexual Assault or Stalking and Alternate Documentation, form HUD-5382

On August 1, 2017, HUD released an updated form HUD-5382, Certification of Domestic Violence, Dating Violence, Sexual Assault or Stalking and Alternate Documentation. The purpose of this form is to provide a method for victims of domestic violence, dating violence, sexual assault, or stalking to certify their victim status. Tenants and applicants may use this form to certify victim status and request VAWA protections.   Owners and Agents (O/As) should be familiar with the contents of this form in order to have a full understanding of what the form does.   Applicable Definitions   The form provides definitions of terms relating to VAWA protections, including (1) domestic violence; (2) dating violence; (3) sexual assault; and (4) stalking.   The form is optional. The form informs the applicant/tenant that the owner may give them a written notice requesting that the applicant/tenant submit documentation about the incident or incidents of domestic violence, dating violence, sexual assault, or stalking. It informs the person that they have the option of using this form or submitting one of the following types of third-party documentation to the housing provider: A document signed by the applicant/resident and an employee, agent, or volunteer of a victim service provider, an attorney, medical professional, or a mental health professional from whom they have sought assistance relating to domestic violence, dating violence, sexual assault, or stalking; A record of a Federal, State, tribal, territorial or local law enforcement agency, court, or administrative agency; or At the discretion of the housing provider, a statement or other evidence provided by the applicant or tenant.   Timeframe for Submitting Documentation   The Notice informs the person that they must submit the requested documentation to the housing provider within 14 business (not calendar) days from the date that they receive the written request from the housing provider requesting the documentation of the occurrence of domestic violence, dating violence, sexual assault, or stalking. The Notice also lets the person know that the owner may extend the deadline, but is not required to, and if the information is not provided by the deadline (including any extension), the owner may take action against them, such as denial of admission, assistance, participation, or tenancy. It also informs the person that owners must provide reasonable accommodations for disabled individuals, and that the applicant or tenant may challenge the owner s decision.     Confidentiality   The Notice informs the person that all information they provide relating to the domestic violence, dating violence, sexual assault, or stalking must remain confidential and provides details regarding the confidentiality requirements on the owner.   The key thing for owners and agents to remember with regard to requiring a certification of domestic violence, dating violence, sexual assault, or stalking, is that if the applicant or tenant chooses to use the form HUD-5382, unless there is conflicting information relative to the request for VAWA protection, no certification beyond this form may be required.

Required Elements of VAWA Emergency Transfer Plan

HUD recently published a revised form HUD-5381, "Model Emergency Transfer Plan for Victims of Domestic Violence, Dating Violence, Sexual Assault, and Stalking." The model contains only general provisions of an Emergency Transfer Plan. Adoption of the model plan without further information will not be sufficient to meet a covered housing provider s responsibility to adopt an emergency transfer plan. Owners of housing projects that are covered by the VAWA regulations were to have put an Emergency Transfer Plan into place no later than June 14, 2017. Owners who have not done so should do so immediately, using the following information to ensure that all required elements are contained in the plan. Owners who have created Emergency Transfer Plans should refer to the information in this article to ensure that all statutorily required elements are in the Plan.   Definitions The Plan should include the following definitions: Internal Emergency Transfer: refers to an emergency relocation of a tenant to another unit where the tenant would not be categorized as a new applicant; that is, the tenant may reside in the new unit without having to undergo an application process. External Emergency Transfer: refers to an emergency relocation of a tenant to another unit where the tenant would be categorized as a new applicant; that is the tenant must undergo an application process in order to reside in the new unit. Safe Unit: refers to a unit that the victim of domestic violence, dating violence, sexual assault, or stalking believes is safe.   Aside from these definitions, the Emergency Transfer Plan must include the following elements: A tenant receiving rental assistance through, or residing in a unit subsidized under, a covered housing program who is a victim of domestic violence, dating violence, sexual assault, or stalking qualifies for an emergency transfer if: The tenant expressly requests the transfer; and The tenant reasonably believes there is a threat of imminent harm from further violence if the tenant remains within the same dwelling unit that the tenant is currently occupying; or In the case of a tenant who is a victim of sexual assault, either the tenant reasonably believes there is a threat of imminent harm from further violence if the tenant remains within the same dwelling unit that the tenant is currently occupying, or the sexual assault occurred on the premises during the 90-calendar-day period preceding the date of the request for transfer. The plan must detail the measure of any priority given to tenants who qualify for an emergency transfer under VAWA in relation to other categories of tenants seeking transfers and individuals seeking placement on waiting lists. Tenant Selection Plans (TSPs) should be amended to include any VAWA preference (this does not require HUD approval). The plan must incorporate strict confidentiality measures to ensure that the housing provider does not disclose the location of the dwelling unit of the tenant to a person who committed or threatened to commit an act of domestic violence, dating violence, sexual assault, or stalking against the tenant. The plan must allow a tenant to make an internal emergency transfer under VAWA when a safe unit is immediately available. The plan should define the term "immediately available." For example, "a vacant unit, ready for move-in with a reasonable period of time." Include time frames, possible internal transfer locations, and priority status relative to other tenants seeking an internal transfer. The plan must describe policies for assisting a tenant in making an internal emergency transfer under VAWA when a safe unit is not immediately available, and these policies must ensure that requests for internal emergency transfers receive, at a minimum, any applicable additional priority that housing providers may already provide to other types of emergency transfer requests (e.g., transfers based on disability). The plan must describe reasonable efforts the housing provider will take to assist a tenant who wishes to make an external emergency transfer when a safe unit is not immediately available. The plan must include policies for assisting a tenant who is seeking an external emergency transfer under VAWA out of the housing provider s program or project, and a tenant who is seeking an external emergency transfer under VAWA into the housing provider s program or project. These policies may include: Arrangements, including memoranda of understanding, with other housing providers to facilitate moves (such documents should be attached to the plan); and Outreach activities to organizations that assist or provide resources to victims of domestic violence, dating violence, sexual assault, or stalking. Nothing may preclude a tenant from seeking an internal emergency transfer and an external emergency transfer concurrently if a safe unit is not immediately available. It is recommended that this policy be clearly stated in the plan. The plan should state that a request does not guarantee continued assistance or an external transfer to other HUD housing. Where applicable, the plan must describe policies for a tenant who has tenant-based rental assistance (e.g., voucher) and who meets the requirements of #1 above to move quickly with that assistance. Housing providers should coordinate with local providers of the tenant-based assistance (e.g., local PHA). The plan may require documentation from a tenant seeking an emergency transfer, provided that: The tenant s submission of a written request to the housing provider, where the tenant certifies that they meet the eligibility requirements to request a VAWA transfer, shall be sufficient documentation of the requirements necessary to request an emergency transfer; The housing provider may, at its discretion, ask an individual seeking an emergency transfer to document the occurrence of domestic violence, dating violence, sexual assault, or stalking, in accordance with 24 CFR 5.2007, for which the individual is seeking the emergency transfer, if the individual has not already provided documentation of that occurrence; and No other documentation is required to qualify the tenant for an emergency transfer. The housing provider must make its emergency transfer plan available upon request and, when feasible, must make the plan publicly available. Nothing in the plan may supersede any eligibility or other occupancy requirements that may apply under any other covered housing program.   With regard to #9 above, housing providers are not required to require documentation from a tenant claiming VAWA protection. Verbal requests may be accepted. However, if documentation will be required, the requirement (as outlined above) must be included in the plan. The housing provider must keep a record of all emergency transfers requested under its plan, and the outcomes of such requests, and retain these records for a period of three years, or for a time period as specified in program regulations. Requests and outcomes of such requests must be reported to HUD annually. I recommend that all elements of the Model Emergency Transfer Plan be incorporated, plus the elements outlined above.

Proposed Guidance- Form HUD-5380, Notice of Occupancy Rights Under the Violence Against Women Act To All Tenants and Applicants

On August 1, 2017, HUD published a Notice of proposed rulemaking that revises a number of forms and requirements relative to the Violence Against Women Act (VAWA). One of the forms proposed for change is form HUD-5380, Notice of Occupancy Rights Under the Violence Against Women Act To All Tenants and Applicants. This article provides details on the proposals regarding the notice requirements under VAWA, and outlines the specific rights of VAWA victims.   Protection for Applicants   Applicants for assistance under a covered housing program may not be denied admission or assistance on the basis or as a direct result of the fact that they are or have been a victim of domestic violence, dating violence, sexual assault, or stalking, as long as they would otherwise qualify for the program.   Protection for Tenants   Tenants housed or receiving assistance under a covered program may not be denied assistance, terminated from participation in, or be evicted from the housing on the basis or as a direct result of the fact that they are or have been a victim of domestic violence, dating violence, sexual assault, or stalking.   Tenants also may not be denied assistance or residency solely on the basis of criminal activity relating to domestic violence, dating violence, sexual assault, or stalking, if: The criminal activity is engaged in by a member of the household or any guest or other person under the control of the tenant; and If the tenant or an affiliated individual of the tenant is or has been the victim of domestic violence, dating violence, sexual assault, or stalking. "Affiliated individual" means a spouse, parent, brother, sister, or child, or a person the tenant stands in the place of a parent or guardian (e.g., a person that is in the custody, care, or control of the tenant). It also refers to any individual, tenant, or lawful occupant living in the household.   Removing the Abuser or Perpetrator from the Household   When a member of the household engages in criminal activity directly related to domestic violence, dating violence, sexual assault, or stalking, the owner may remove the abuser or perpetrator from the lease (i.e., bifurcate the lease) without affecting the occupancy rights of the victim. Any bifurcation must be carried out in accordance with any requirements or procedures required by Federal, State, or local law for termination of assistance in leases and in accordance with the requirements of the applicable housing program. If the owner removes the abuser or perpetrator through bifurcation, and that person was the eligible tenant under the program, the owner must allow any remaining tenant(s), who are not already eligible, time to apply to establish eligibility under the same or another housing program covered by VAWA, or find alternative housing. Before bifurcating a lease, an owner may, but is not required to, ask the tenant for documentation or certification of the incidence of domestic violence, dating violence, sexual assault, or stalking.   Emergency Transfers   Victims of domestic violence, dating violence, sexual assault, or stalking may request emergency transfers to other units or projects. Before permitting such a transfer, owners may request that the tenant submit a written request or fill out form HUD-5383 (Certification form). In this way, the tenant will be certifying that he or she meets the criteria for an emergency transfer. The criteria are: The tenant (or member of the household) must be a victim of domestic violence, dating violence, sexual assault, or stalking; The tenant must expressly request the emergency transfer (submission of form HUD-5383 is considered a request for a transfer); and The tenant reasonably believes that he or she is threatened with imminent harm from further violence if they remain in the current unit, or he or she has been a victim of sexual assault and the assault occurred on the premises during the 90-calendar-day period before the request for transfer. Owners must keep requests for emergency transfers, and the location of any such move, in strict confidence.   Owners are not required to automatically provide copies of emergency transfer plans to applicants or tenants, but the Notice of Rights states that if requested by an applicant or tenant, a copy of the Plan must be provided.   Documentation of Status as a Victim of Domestic violence, Dating violence, Sexual Assault, or Stalking   Owners may, but are not required to, ask tenants or applicants to provide documentation to "certify" that they are or have been a victim of domestic violence, dating violence, sexual assault, or stalking. If requested, the applicant or tenant must submit the documentation within 14 business days from the date that they receive the written request from the housing provider asking for the documentation of the occurrence of domestic violence, dating violence, sexual assault, or stalking. I recommend that such requests be sent certified mail, return receipt requested, so that the beginning date of the 14 business days is undisputed. Housing providers may extend the time period to submit the documentation. If the documentation is not provided within the 14-business day timeframe, or any extension of the timeframe, owners are not limited in their ability to deny admission, assistance, participation, or tenancy. However, owners should remember that other laws or regulations may require different time periods. For example, owners may have to grant reasonable accommodations to disabled individuals in the form of additional time or assistance with responding to written requests.   If an owner requires documentation, applicants or tenants have the right to choose from one of four methods of documentation: A completed HUD-approved certification, form HUD-5382; A record of a Federal, State, tribal, territorial, or local law enforcement agency, court, or administrative agency that documents the incident of domestic violence, dating violence, sexual assault, or stalking. Examples of such documentation include police reports, protective orders, and restraining orders; A statement signed by an employee, agent, or volunteer of a victim service provider, an attorney, a medical or mental health professional from whom the applicant or tenant sought assistance relative to the domestic violence, dating violence, sexual assault, or stalking. The applicant or tenant must also sign this statement; or Any other statement or evidence that the owner has agreed to accept.   If an owner receives conflicting evidence that an incident of domestic violence, dating violence, sexual assault, or stalking has been committed (such as receiving certification forms from two or more members of a household each claiming to be a victim and naming one or more of the other petitioning household members as the abuser or perpetrator), the owner has the right to request that third party documentation be provided within 30-calendar days to resolve the conflict. The responding applicant or tenant may satisfy this request by providing any of the documentation described above, except for the self-certification, form HUD-5382. If the applicant or tenant fails to provide such documentation when there is conflicting evidence, the owner may deny them admission, assistance, participation, or tenancy. However, owners should remember that other laws or regulations may require different time periods.   Confidentiality   Owners must keep strictly confidential any information provided concerning the incident(s) of domestic violence, dating violence, sexual assault, or stalking. Information about the incident(s) and the person s status as a survivor, such as the information provided on form HUD-5382 and HUD-5383, may only be available to the owner s employees or contractors if explicitly authorized by the owner for reasons that specifically call for those individuals to have access to the information under applicable Federal, State, or local law. Owners should ensure that third party file reviewers not have access to any information relative to requests for protection under VAWA. Information about the incident(s) and a person s status as a survivor may not be entered into any shared database or disclosed to any other entity or individual, except to the extent that the disclosure is: Consented to by the victim in writing in a time-limited release; Required for use in an eviction proceeding or hearing regarding termination of assistance; or Otherwise required by applicable law. VAWA does not limit an owner s duty to honor court orders relating to access to or control of the documentation.   Reasons a Tenant Eligible for Occupancy Rights under VAWA May Be Evicted or Assistance May Be Terminated   Serious or repeated lease violations that are not related to an act or acts of domestic violence, dating violence, sexual assault, or stalking; The owner can demonstrate that not evicting the tenant or terminating assistance will present a real physical danger that: Would occur within an immediate time frame; and Could result in death or serious bodily harm to other tenants or those who work at the property. If an owner can demonstrate this kind of danger, assistance should only be terminated or eviction undertaken if there are no other actions that could be taken to reduce or eliminate the threat.   HUD does not define "immediate," but I recommend that the threat be so serious that a dangerous situation is expected without delay and literally could occur at any moment.   Other Laws   VAWA does not replace any Federal, State, or local law that provides greater protection for victims of domestic violence, dating violence, sexual assault, or stalking, so owners should be aware of any such laws.   While the form HUD-5380, in its current form, is a draft, it is highly likely that there will be few, if any, changes to the final form. Owners should familiarize themselves with the content of the form and understand the rights of VAWA victims.    

HUD Publishes Draft VAWA Notices, August 1, 2017

HUD published a "60-Day Notice of Proposed Information Collection: Implementation of the Violence Against Women Reauthorization Act of 2013," in the August 1, 2017 Federal Register.   This notice provides four draft documents associated with VAWA, (1) form HUD 5380, Notice of Occupancy Rights Under the Violence Against Women Act to All Tenants and Applicants; (2) form HUD- 5381, Model Emergency Transfer Plan Under VAWA; (3) form HUD-5382, Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking and Alternate Documentation; and (4) form HUD-5383, Emergency Transfer Request for Certain Victims of Domestic Violence, Dating Violence, Sexual Assault, or Stalking. HUD is seeking public comment on these draft forms, and comments are due no later the October 2, 2017.   The first three forms (5380, 5381, and 5382) are forms that the VAWA 2013 law requires HUD to develop and provide. The final form (5383) is one that HUD has chosen to develop and provide.   Owners and managers should obtain copies of the draft notices and carefully review them. Comments should be sent to HUD with suggestions for improvements to the forms.   A summary of the proposed changes from the earlier editions of the forms follows:   Form 5380: clarifies the "Tenant Protections" and "Removing the Abuser or Perpetrator from the Household" sections to align with the regulations and provide more information about bifurcation of the lease; Renamed "Moving to Another Unit" to "Emergency Transfer;" Includes more emergency transfer language Adds language in the "Documenting That You Are or Have Been a Victim" section about reasonable accommodations and updates the language to be consistent with the regulation; and Updates the "Confidentiality" section to more closely follow the regulation and put individuals on notice of confidentiality protections. Form 5381: Adds a note to covered housing providers that the use of the model form without adding program specific and housing provider specific policies will not be sufficient to meet the emergency transfer plan requirements. In other words, a property s emergency transfer plan will have to be specific to both the property and the applicable program at the property; Adds a definition section; Renames the section titled "Emergency Transfer Timing and Availability" to "Emergency Transfer Procedures" and adds two new sections, "Emergency Transfer Policies" section, which clarifies that the provider must specify their individual policies for different categories of transfers (i.e., internal or external transfers) where applicable; and a "Priority for Transfers" section, which requires providers to provide any type of priority being provided to a victim consistent with federal regulations. Updates the "Confidentiality" section to more closely follow the regulation and put individuals on notice of confidentiality protections; and Add a "Making Plan Available" section to describe how the plan will be made publicly available, where possible. Form 5382: Updates the "Submission of Documentation" section to include information about reasonable accommodations. Adds a warning for making false submissions to ensure users of the form are aware of the legal nature of submitting false information to an entity when seeking access to Federal funds. Form 5383: Updates the "Confidentiality" section to more closely follow the regulation and put individuals on notice of confidentiality protections; Reframes question #11 as a "Yes" or "No" question; and Adds a warning for making false submissions to ensure that users of the form are aware of the legal nature of submitting false information to an entity when seeking access to Federal funds. Drafts of the revised forms are being published along with the new HUD notice so that the public will have chance to review the proposed changes.

Recommendation: Verify Changes in Household Composition Before Completing an Interim Certification

A recent court case provides a lesson in why it is a good idea for Owners/Agents (O/As) to have a policy requiring confirmation of the move-out of a household member prior to performing an interim recertification for a change in household composition. In the case of Greene v. HUD, June 2017, a New York district court ruled that HUD may have violated a residents due process rights when upholding her removal from the household composition of a unit.   Background The daughter of a resident had lived most of her life at a Section 8 site. In or prior to 2007, without the daughter s knowledge, her mother removed her from the household composition forms. The daughter actually never left the unit. When the mother moved out, the daughter attempted to take over the lease, but was denied because she was no longer a party to the lease. The mother had verbally notified management in or before 2007 that the daughter no longer lived in the unit. There was no written request for the daughter s removal and management did not require any evidence that the daughter had moved out. The mother admitted that she had been a drug addict at the time and could not remember what had actually happened. Recertification forms submitted by the mother from 2007 to 2011 did not list the daughter as a member of the household composition, yet the daughter lived in the unit the entire time. During that time, the daughter was employed and none of her income was counted, increasing the subsidy paid by HUD. The mother indicated that for three years after removing her daughter, she tried to add her back to the household, but management refused. The owner told the mother that once a person was removed from a household, they could not be added later. The daughter was never added back to household composition. The daughter sued HUD and the owner to challenge the denial of her Section 8 subsidy, alleging violations of the due process clause, and the constitutional safeguard against arbitrary denial of property by the government. HUD asked the court for a judgment without trial. The court ruled in favor of the daughter, stating that the daughter s removal from the housing composition deprived her of her entitlement to the continued receipt of the subsidy. HUD s position had been that, under 3-16 of HUD Handbook 4350.3, removal of the daughter from the household composition made her ineligible for consideration as a remaining family member, and thus, ineligible for continuing Section 8 subsidy. However, the court took the position that removal of the daughter, and refusal to add her back to household composition, deprived her of her property interest. The court noted that HUD regulations, the HUD handbook, and the site s policy all require independent verifications when an individual is removed from household composition. HUD regulations require an owner to conduct annual reexaminations of family income and composition and to conduct interim recertifications upon a family s request. HUD Handbook 4350.3, 3-27, indicates that owners may want to verify a family member s departure from a unit. It was the property s policy to require a notarized letter from the head of household, a notarized letter from the person moving out, and proof that the individual moved out, such as a new lease or phone bill. None of these steps were taken in this case. For this reason, the court ruled that the daughter was denied continued receipt of the Section 8 subsidy without her knowledge or consent and without notice or due process, in violation of the Constitution and applicable regulations.   Conclusion This case indicates the importance of following company policies and procedures with regard to handling household recertifications. It also makes clear that properties may have policies requiring verification of a move-out prior to removing a person from household composition. While such a policy is not a requirement, it is permitted by HUD regulation, and is one that I recommend.