News

HUD Issues Notice Regarding LGBT Protections

On August 20, 2014, HUD published Notice PIH 2014-20 (HA), which provides details on the final rule published by HUD on February 3, 2012 guaranteeing equal access to housing in HUD programs regardless of Sexual Orientation or Gender Identity. This final rule requires that HUD assisted and insured housing programs be open to all eligible individuals regardless of sexual orientation, gender identity, or marital status.   The rule does not create any new protected classes under the Fair Housing Act or any other civil rights law. Although the Fair Housing Act does not include sexual orientation, gender identity, or marital status as protected classes, complaints involving LGBT persons may raise claims that are actionable under one or more of the Fair Housing Act s protected classes. The HUD Notice gives examples of these situations.   This rule applies to all HUD housing programs, and covers private owners that participate in the Section 8 program. Private owners that participate in the Housing Choice Voucher (HCV) Program become subject to the rule when the owner executes a Housing Assistance Payments (HAP) contract with the PHA.   Public Housing Agencies (PHAs) affected by the rule must make revisions to various plans and policies, including the Annual Plan; Section 8 Administrative Plan; and Public Housing Tenant Selection Policies The PHA s definition of family as provided in the admissions and continued occupancy policies will have to be amended as a result of the rule and Notice.   The Notice provides various examples of violations that could occur.       Fair Housing Implications   While the Fair Housing Act does not specifically include sexual orientation, gender identity and marital status as protected characteristics, courts have recognized that the Fair Housing Act s prohibition against discrimination because of sex includes discrimination based on non-conformance with sex stereotypes. Under certain circumstances, complaints involving sexual orientation, gender identity and marital status may be investigated under the Fair Housing Act.   Many states and localities prohibit housing discrimination on the basis of sexual orientation, gender identity and marital status, and HUD may refer complaints or other information concerning these protected classes to appropriate state and local fair housing agencies.   All owners and managers involved with HUD housing programs should obtain a copy of the Notice and carefully review and implement the requirements.  

HUD REAC Rules Updated (August 12, 2014)

HUD released HUD Compilation Bulletin on August 12, 2014, providing updated guidance to REAC inspectors regarding when certain areas of properties are not to be inspected for REAC purposes and changing the way certain inspection elements will be reviewed. These changes apply to all properties that are subject to HUD REAC inspections, as well as LIHTC properties that are subject to State HFA inspection under the Uniform Physical Condition Standard (UPCS).   Following are the changes owners and managers should be aware of:   1. Commercial Space: Commercial space in projects that are not HUD insured will not be inspected. This should apply for LIHTC properties also since such space may not be included in eligible basis. Examples would be retail shops, rented office space, commercial parking, etc. However, if these spaces share equipment with part of the building that is part of the HUD or LIHTC project, the equipment will be inspected. If there is an issue, it will be reported on REAC inspections as "Other Hazard," which is a non-scoring category. Since LIHTC inspections are not scored in the same manner as REAC, this may still be reported to the IRS. 2. Building Elements that have been Removed from Service: If a building component has been completely and permanently removed from service, it is not to be inspected. Examples would include trash chutes that are no longer used, as long as the doors have been welded or screwed shut to show an intention to permanently remove from service; property access gates, as long as the gates have actually been removed from the property, etc. If there is any way the item could be brought back to a usable condition, it will be inspected. 3. Model Units: Permanent models will be inspected as common area. Models that are available for rent will be considered "vacant" units. 4. Exposed Bare Wires: These are now defined as "non-insulated high voltage conductors, connectors, and terminals." Fully insulated and capped wires will not be considered a defect - even if in an open junction box. Junction boxes that show exposed, uninsulated wiring will be cited as exposed wires. Essentially, this means that a junction box with a missing cover is no longer reportable, as long as there are no exposed wires. [It is still recommended that junction boxes have secure covers at all times]. 5. Call for Aid Systems: If all pull cords have been removed and only the light fixtures over the doors remain (for auto release door hardware), these items will no longer be evaluated. While these are some of the major changes that owners and managers should be aware of, anyone responsible for preparing properties for physical inspections that are subject to UPCS should obtain a copy of the HUD Bulletin and review it for all changes.

Violence Against Womens Act (VAWA) Recommendations Relative to the LIHTC Program

  United States Code Title 42, Chapter 136, Subchapter III, effective March 7, 2013, provides housing protections for victims of domestic violence, dating violence, sexual assault, and stalking. The following housing programs are required to comply with the VAWA: *Supportive Housing for the Elderly under 12 USC 1701q; *Section 811 Program; *Housing provided under the 'Aids Housing Opportunity Act'; *Housing provided under the McKinney-Vento Homeless Assistance Act; *HOME Program; *Housing for Moderate Income and Displaced Families under paragraph (3) of 1751l(d) of Title 12; *HUD Rental and Cooperative Housing for Lower-Income Families under 1715z-1 of Title 12; *Public Housing; *Rural Development Section 515 Rural Rental Housing, Section 514/516 Farm Labor Housing, Section 538 Guaranteed Rural Rental Housing, and Section 533 Housing Preservation Grant Programs; and *The Low-Income Housing Tax Credit Program under 42 of Title 26. The VAWA Act provides tenant rights and protections for tenants in the programs noted above. HUD has issued comprehensive regulations relating to the implementation of VAWA on HUD properties, and the Rural Development Service recently issued guidance regarding the establishment of a Model Emergency Transfer Plan for Rural Development housing programs (RD AN No. 4747 [1944-N], February 10, 2014). While the IRS has not yet issued guidance relating to VAWA implementation for the LIHTC program, the law does apply to tax credit properties and owners must take whatever steps they can, within the rules of the Section 42 program as they currently exist, to ensure compliance with the law.   Highlights of VAWA Provides legal rights and protections for victims of domestic violence, dating violence, sexual assault or stalking, as well as their immediate family members; Prohibits victims of domestic violence, dating violence, sexual assault or stalking from being evicted or being denied housing if an incident of violence is reported and confirmed; Criminal activity directly related to domestic violence, dating violence, sexual assault or stalking is not grounds for termination of the victim s tenancy (see 7 CFR 3560.154[j]); Provides for the bifurcation of the lease in order to remove an offending household member from the home, while allowing the victim, who is a tenant or lawful occupant, to remain (for implementation guidance, see 7 CFR 3560.158[b] and [d]); Allows owners and managers to request that a tenant certify that he or she is a victim of domestic violence, dating violence, sexual assault or stalking in determining whether the protections afforded under VAWA are applicable; Requires that all information pertaining to an incident of domestic violence, dating violence, sexual assault or stalking remain confidential. A notice of victim s right to confidentiality will be provided to applicants and tenants by owner or manager, once the notice is made available by HUD (to date, this Notice has not been developed); and Impacted tenants may be transferred to another available safe dwelling unit. Recommendations to Owners and Managers for Implementation of VAWA Owners and managers of housing affected by VAWA should update their tenant selection policies and occupancy rules (if any). The update should incorporate the tenant s rights and protections in order to ensure that applicants and residents know their rights under the law and to avoid improper evictions. Owners and managers of housing that receive Section 8 assistance should comply with HUD requirements, and owners and managers of Rural Development Section 515 projects should follow recently provided RD guidance. HUD currently utilizes Lease Addendum, Form HUD 91067, which includes certain rights and provisions of VAWA.   Prohibited Basis for Denial or Termination of Assistance or Eviction In general, an applicant for or tenant of housing assisted under any of the covered housing programs may not be denied admission to, denied assistance under, terminated from participation in, or evicted from the housing due to the fact that the applicant or tenant is or has been a victim of domestic violence, dating violence, sexual assault, or stalking, if the applicant or tenant otherwise qualifies for admission, assistance, participation or occupancy.   An incident of actual or threatened domestic violence, dating violence, sexual assault, or stalking shall not be construed as - A serious or repeated violation of a lease for housing assisted under a covered program by the victim or threatened victim of such incident; or Good cause for termination of assistance, tenancy, or occupancy rights to housing assisted under a covered housing program of the victim or threatened victim of such incident.   No person may deny assistance, tenancy, or occupancy rights to housing assisted under a covered housing program to a tenant solely on the basis of criminal activity directly relating to domestic violence, dating violence, sexual assault, or stalking that is engaged in by a member of the household of the tenant or any guest or other person under the control of the tenant, if the tenant or an affiliated individual of the tenant is the victim or threatened victim of such domestic violence, dating violence, sexual assault, or stalking.   Bifurcation An owner or manager of housing assisted under a covered housing program may bifurcate a lease for the housing in order to evict, remove, or terminate assistance to any individual who is a tenant or lawful occupant of the housing and who engages in criminal activity directly relating to domestic violence, dating violence, sexual assault, or stalking against an affiliated individual or other individual, without evicting, removing, terminating assistance to, or otherwise penalizing a victim of such criminal activity who is also a tenant or lawful occupant of the housing. If the owner evicts an individual who engages in domestic violence, dating violence, sexual assault, or stalking, and the individual is the sole tenant eligible to receive assistance under a covered housing program, the owner or manager of the housing shall provide any remaining tenant an opportunity to establish eligibility for the covered housing program. If such tenant cannot establish eligibility, the owner or manager of the housing shall provide the tenant a reasonable time, as determined by the appropriate agency, to find new housing or to establish eligibility for housing under another covered housing program. {Note: IRS guidance is needed in this area for projects operated under the LIHTC program}. Rules of Construction Nothing in the law limits the ability of an owner or manager to evict or terminate assistance of a tenant for any violation of a lease not premised on the act of violence in question against the tenant or an affiliated person of the tenant. The law also does not limit the authority to terminate assistance to a tenant or evict a tenant if the owner or manager of the housing can demonstrate that an actual and imminent threat to other tenants or individuals employed at or providing service to the property would be present if the assistance is not terminated or the tenant is not evicted. Documentation If an applicant for, or tenant of, housing assisted under a covered housing program represents to an owner or manager of the housing that the individual is entitled to protection under VAWA, the owner or manager may request, in writing, that the applicant or tenant submit to the owner or manager a form of documentation described below. If an applicant or tenant does not provide the documentation requested within 14 business days after the tenant receives a request in writing for such certification from the owner or manager, nothing in the law prohibits the owner or manager from - Denying admission to the applicant or tenant; Denying assistance under the covered program; Terminating the participation of the applicant or tenant in the covered program; or Evicting the tenant or a lawful occupant that commits violations of a lease. Owners or managers may extend the 14-day deadline at their discretion. Allowable documentation includes: A certification form approved by the appropriate agency (for LIHTC projects, guidance from the IRS is needed regarding whether the IRS will provide the form or the State HFA) that - States that an applicant or tenant is a victim of domestic violence, dating violence, sexual assault, or stalking; States that the incident of domestic violence, dating violence, sexual assault, or stalking that is the ground for protection meets the requirements of VAWA; and Includes the name of the individual who committed the domestic violence, dating violence, sexual assault, or stalking, if the name is known and safe to provide. A document that is signed by i. An employee, agent, or volunteer of a victim service provider, an attorney, a medical professional, or a mental health professional from whom an applicant or tenant has sought assistance relating to domestic violence, dating violence, sexual assault, or stalking, or the effects of the abuse; and ii. The applicant or tenant; and States under penalty of perjury that the person described in clause (B)(a)(i) believes that the incident of domestic violence, dating violence, sexual assault, or stalking that is the ground for protection meets the requirements of VAWA; A record of a Federal, State, tribal, territorial, or local law enforcement agency, court or administrative agency; or At the discretion of the owner or manager, a statement or other evidence provided by an applicant or tenant. Confidentiality Any information submitted to an owner or manager under the VAWA, including the fact that an individual is a victim of domestic violence, dating violence, sexual assault, or stalking must be maintained in confidence and may not be entered into any shared database or disclosed to any other entity or individual, except as requested or consented to by the individual in writing, required for use in an eviction proceeding, or otherwise required by law. There is nothing in the law that requires an owner or manager to request that an individual submit documentation of the status of the individual as a victim of domestic violence, dating violence, sexual assault, or stalking. Response to Conflicting Certification If an owner or manager of covered housing receives documentation that contains conflicting information, the owner or manager may require an applicant or tenant to submit third party documentation as described earlier in this memo. Notification Requirements Owners or managers of affected housing must provide a notice of rights of individuals under the VAWA, including the right to confidentiality and the limits to that right. HUD is required to develop this Notice, and to date has not done so. This Notice, together with the form that individuals may use to state their status as victims of domestic violence, dating violence, sexual assault, or stalking, must be provided to applicants and tenants At the time an applicant is denied residency in a dwelling unit assisted under the covered housing program; At the time the individual is admitted to a dwelling unit assisted under the covered housing program; With any notification of eviction or notification of termination of assistance; and In multiple languages, consistent with the requirements of Executive Order 13166, relative to persons with limited English proficiency. (I have developed a recommended Notice for properties to use until HUD publishes an official notice. If you would like a copy of the Proposed Notice, please contact me. I recommend you seek approval from the Agency overseeing your property prior to using the Notice). Emergency Transfers While agencies administering covered programs should adopt model transfer policies for owners and managers, neither the IRS nor most state agencies have done so (HUD is drafting a policy and RD has created a model transfer policy), owners of LIHTC properties should consider developing their own policies until Agency guidance is available. Such policies should provide that Tenants who are victims of domestic violence, dating violence, sexual assault, or stalking may transfer to another available and safe unit assisted under the program, if The tenant specifically requests the transfer; and The tenant reasonably believes that the tenant is threatened with imminent harm from further violence if the tenant remains within the same dwelling unit; or In the case of a tenant who is the victim of sexual assault, the sexual assault occurred on the premises during the 90-day period preceding the request for transfer; Aside from the cost of the actual transfer, no transfer fee should be assessed to the Tenant; and The policy must incorporate reasonable confidentiality measures to ensure that the owner or manager does not disclose the location of the dwelling unit of a tenant to a person that commits an act of domestic violence, dating violence, sexual assault, or stalking against the tenant. I recommend that operators of LIHTC properties develop a basic principle regarding allowing the transfer of a tenant who is a victim of domestic violence, dating violence, sexual assault, or stalking. My recommended policy statement is as follows: LIHTC Model Emergency Transfer Plan Tenants who are actual or imminent victims of domestic violence, dating violence, sexual assault, or stalking, shall be permitted by the owner or manager to transfer to another available and safe dwelling unit within the project when a transfer is requested by a tenant, and (1) the tenant reasonably believes that he or she is threatened with imminent harm from further violence if he or she remains within the same dwelling; and (2) in the case of a tenant who is a victim of sexual assault, the sexual assault occurred on the premises during the 90-day period preceding the request for transfer; and (3) if requesting a transfer to a different building in the project, the income of the tenant, on the most recently completed Tenant Income Certification, did not exceed 140% of the maximum qualifying income for a new household of the same size as the tenants on the date of the completed Tenant Income Certification. If the income of the tenant exceeds the income as stated in (3), the Tenant will be allowed to terminate the lease in order to move to a safer environment, without the penalties outlined in the lease for early termination of lease. The tenant will remain responsible for any damage to the unit beyond normal wear and tear. The owner/manager will not reveal the location of the new dwelling unit to the person that committed an actual or imminent act of violence.   Recommended Plan of Action for Owners and Managers of LIHTC Projects 1. Update Tenant Selection Policies and Occupancy Rules, incorporating tenant's rights and protections. 2. Pending development by the appropriate agencies, owners should develop a certification form on which an applicant or tenant can certify their status as a victim of domestic violence, dating violence, sexual assault or stalking. This form should be sent to the appropriate state agency for approval. 3. Develop a Notice of rights to individuals under the VAWA, including the rights to confidentiality and the limits to that right. 4. Develop an emergency transfer policy (I have included an example of such a policy for LIHTC properties).

RD Proposed Amendment to 3560 Regarding Reserve Accounts (August 2014)

On August 13, 2014, the Rural Housing Service (RHS) issued a Proposed Rule to amend 7 CFR 3560.306 (e) (2) to change the requirements of the Reserve Account for Section 515 Rural Rental Housing Projects that also have funding from the Section 328 program. The amendment also clarifies that reserve account funds cannot be used to pay for fees associated with the Section 538 guaranteed loan program. The current requirement states that reserve accounts require Agency countersignature with the borrower on all withdrawals. The Section 538 Guaranteed Rural Rental Housing Program (GRRHP) often provides funding to an existing Section 515 property. The GRRHP regulations require that all property reserve accounts be held by the lender, which eliminates the unauthorized use of these funds by the borrower since the borrower does not have access to the funds. Many Section 538 loans are sold on the secondary market, and in most cases, transferred to Ginnie Mae. Ginnie Mae requires that property reserve accounts be pledged as collateral for the loan. In order to meet this secondary market requirement, the reserve accounts must be titled exclusively in the lender s name, and cannot be countersigned by any other party. Requiring the RHS signature on all withdrawals ensures that the borrower does not have uncontrolled use of the funds and this requirement will remain in place for properties that have only Section 515 direct loans. The proposed amendment will eliminate the requirement that the Agency countersign on properties with Section 538 loans. The Agency s interest in the reserve accounts will still be protected by the change in the regulation, since the lender is required to get Agency approval before funds can be disbursed from the reserve account. Therefore, funds from the lender controlled reserve account cannot be used for items not agreed to by the Agency. Additionally, RHS proposes to amend 3560.306(g) to clarify that reserve account funds cannot be used to pay fees associated with the loan guarantee. Lenders are currently using the Replacement Reserve to pay fees associated with the loan guarantee, such as the annual renewal fee. These fees are considered a project expense and must be paid from the operating account - not the replacement reserve account. Comments on this proposed regulation are due on or before October 14, 2014.

Uniform Relocation Act Requirements

Overview of the Uniform Relocation Act (URA) The Uniform Act, passed by Congress in 1970, is a federal law that establishes minimum standards for federally funded programs and projects that require the acquisition of real property or displace persons from their homes, businesses or farms. The Act's protections and assistance apply to the acquisition, rehabilitation, or demolition of real property for federal or federally funded projects. The Act does not apply to private activities, but persons involved in projects funded by state or local governments should be aware that those programs might have their own relocation requirements. 49 CFR Part 24 is the government-wide regulation that implements the URA. HUD Handbook 1378 provides HUD policy and guidance in implementing the URA and 49 CFR Part 24 for HUD funded programs and projects. This overview covers only requirements relating to residential displacement. When displacing a tenant from a residence, the following services are required: Provide relocation advisory services to displaced tenants and owner occupants; Provide a minimum 90-days written notice to vacate prior to requiring possession; Reimburse for moving expenses; and Provide payments for the added cost of renting or purchasing comparable replacement housing.   Planning the Relocation Program Planning can "make" or "break" your project. A well planned project may be completed on time and on schedule, whereas, a poorly planned project can result in delays, funding shortfalls, bad publicity, and even legal action. As a result, all acquisition and relocation activities should begin early in the project planning process. Section 205 of the URA requires that, "Programs or projects undertaken by a federal agency or with federal financial assistance shall be planned in a manner that: Recognizes, at an early stage in the planning of such programs or projects and before the commencement of any actions which will cause displacements, the problems associated with the displacement of individuals, families, businesses, and farm operations, and Provides for the resolution of such problems in order to minimize adverse impacts on displaced persons and to expedite program or project advancement and completion." Agencies should plan their projects to ensure adequate time, funding, and staffing is available to carry out their responsibilities under the URA. What issues do you need to consider when planning for acquisition and relocation? Minimizing Displacement: HUD requires that all reasonable steps be taken to minimize displacement as a result of a HUD assisted project. Budgetary Implications: Planning is essential to ensure that sufficient funds are available to comply with all applicable requirements. Plan early so that project budgets will include realistic estimates for acquisition and relocation expenses. Coordination of the Project: The grantee should take steps to coordinate activities and facilitate cooperation among government agencies, neighborhood groups, and persons affected by the project. This will ensure that the project can proceed efficiently and with minimal duplication of effort. Determining Resource Needs: During the planning stage, HUD recommends that the grantee review applicable relocation policies, staffing needs, and training or other capacity building needs to anticipate any issues that may hinder the acquisition and relocation process. Administrative Requirements: Grantees must adhere to HUD administrative requirements involved in the planning for acquisition and relocation projects. Definition of "Program or Project" The phrase "program or project" is defined in 49 CFR Part 24 as, "any activity or series of activities undertaken by a federal agency or with federal financial assistance received or anticipated in any phase of an undertaking in accordance with the federal funding agency guidelines." The "any phase" language is important. For example, privately owned housing with low-income housing tax credits are not subject to the URA, but if the water/sewer lines for the project were paid for by Community Development Block Grant funds (CDBG), the URA would apply. Details are found in 49 CFR 24.2(a)(22), and Chapter 1 and 8 of HUD Handbook 1378. Among the HUD programs covered: CDBG; UDAG; Section 108 Loan Guarantees; State CDBG program; HOME; HOPWA; Shelter plus Care; Supportive Housing Program; Emergency Shelter Grants; Public Housing Capital Fund Program; HOPE VI; Project Based Voucher Program; Section 202; Section 811; and Section 8 LMSA for projects with HUD-insured and HUD-held mortgages. Voluntary Acquisition vs. Involuntary Acquisition of Property Oftentimes, HUD funded projects require the acquisition of real property. Agencies may acquire the needed real property from owners by voluntary or involuntary means. Under the URA, an acquisition is considered to be involuntary when an agency acquires property under threat or use of eminent domain. Eminent domain is the power of the government to take private property for public purposes with payment of just compensation. The Fifth Amendment of the U.S. Constitution states that "private property shall not be taken without payment of just compensation" and that "no person shall be deprived of life, liberty, or property without due process of the law." These constitutional rights form the basis of the URA's protections for property owners. The URA requirements for voluntary acquisitions and involuntary acquisitions differ significantly. While there are protections for property owners in both circumstances, only involuntary acquisitions trigger the full acquisition requirements of the URA found in 49 CFR Part 24 Subpart B. Grantees must understand the critical differences between voluntary acquisitions and involuntary acquisitions under the URA before acquiring property for a HUD funded project. What makes a transaction "voluntary"? For agencies with eminent domain authority, if: No specific site is needed and any of several properties could be acquired for project purposes; and The property is not part of an intended, planned or designated project area where other properties will be acquired within specific time limits; and The agency informs the owner in writing of the property's market value; and The agency also informs the owner in writing that the property will not be acquired, through condemnation, if negotiations do not reach an amicable agreement. If tenants are displaced, the tenants are provided relocation assistance. For agencies without eminent domain authority, if: The agency notifies the owner in writing of the property's market value; and The agency notifies the owner prior to making an offer, that it will not acquire property if an amicable settlement cannot be reached. If tenants are displaced, the tenants are provided relocation assistance. Where can you go to find more information about voluntary and involuntary acquisition? You should consult 49 CFR 24.101(b)(1)-(5) and Chapter 5 of HUD Handbook 1378 for more guidance.   Key Acquisition Steps - Involuntary Acquisition The following steps represent the general process an agency must follow under the URA when acquiring property under threat of eminent domain: Notify owner of the agency's intentions to acquire the property and their protections under the URA Appraise the property and invite the owner to accompany the appraiser Review the appraisal Establish just compensation for the property Provide owner with written offer and summary statement for property to be acquired Negotiate with owner for the purchase of property If negotiations are successful, complete the sale and reimburse property owner for related incidental expenses If negotiations are unsuccessful, consider an administrative settlement to complete the sale If negotiations are still unsuccessful, the agency should acquire the property through use of eminent domain   What is "just compensation"? Just compensation is derived from the appraisal process. Typically, the approved appraisal's estimate of fair market value is the basis for the amount of just compensation offered for the property to be acquired. Just compensation cannot be less than the approved appraisal's estimate of fair market value of the property being acquired. What is an administrative settlement? When negotiations result in a purchase price exceeding the agency's estimate of just compensation, it is called an administrative settlement. Administrative settlements are made for administrative reasons that are considered to be in the best interest of the public. Authorized agency officials may approve administrative settlements if they are: Reasonable Prudent, and In the public interest Agency files should include proper documentation to justify and support the decision for an administrative settlement.   Who is Displaced? / Who is Not Displaced? Who is a Displaced Person? Generally, a displaced person under the URA is an individual, family, partnership, association, corporation, or organization, which moves from their home, business, or farm, or moves their personal property, as a direct result of acquisition, demolition or rehabilitation for a federally funded project. Displaced persons are eligible for relocation assistance under the URA.   Who is Not Displaced? Generally, persons not displaced are not eligible for relocation assistance under the URA. Examples of persons not displaced include, but are not limited to, the following: Persons displaced temporarily from their dwelling for less than 12 months while it is being rehabilitated Illegal aliens; the URA prohibits providing relocation assistance to persons not lawfully present in the U.S. The URA contains specific definitions of a "displaced person" and "persons not displaced." These definitions in addition to the HUD handbook should be used when making any determinations of relocation eligibility. When in doubt, grantees should contact their HUD Regional Relocation Specialist for assistance.   Relocation Notices The URA regulations require three (3) notices to be issued to eligible persons. These notices provide important information about the project, the affected persons' resulting rights, their protections, and their eligibility for relocation assistance and payments under the URA. It is critical for agencies to issue appropriate notices to affected persons at the appropriate time. One of the most important URA notices is the 90-Day Notice. No person shall be required to move without a minimum of 90 days written notice of the required date of the move. HUD has specific requirements relating to the three URA notices and also requires additional notices be issued when conducting acquisition and relocation activities for HUD funded programs and projects. Agencies should refer to the HUD handbook for more information on this topic.   What notices are required under the URA? General Information Notice (GIN): Informs affected persons of the project and that they may be displaced by the project. Notice of Relocation Eligibility: Informs persons that they will be displaced by the project and establishes their eligibility for relocation assistance and payments. 90-Day Notice: Informs displaced persons of the earliest date by which they will be required to move. This notice may not be issued unless a comparable replacement dwelling is available and the displaced person is informed of its location and has sufficient time to lease or purchase the property.   Relocation Advisory Services In addition to being required by law, relocation advisory services are the single most important part of a successful relocation program. Relocation advisory services are required to be provided to all eligible displaced persons including nonresidential displaced persons. What are some key relocation advisory services requirements? Determine the needs and preferences of displaced persons Explain available relocation assistance Explain a person's right to appeal if they are not satisfied with agency decisions Offer and provide transportation to locate replacement housing Offer other assistance (e.g. social services or financial referrals, housing inspection, etc.) Provide current and ongoing listings of comparable dwellings for residential displacements and replacement sites for businesses Supply information on other federal and state programs offering assistance Provide counseling and other assistance to minimize hardship in adjusting to relocation And other required and appropriate assistance   Residential Relocation In addition to relocation advisory services, residential displaced persons may be eligible for other relocation assistance including relocation payments for moving expenses and replacement housing payments for the increased costs of renting or purchasing a comparable replacement dwelling. What types of moving payment options are available to residential displaced persons? The URA provides the following moving payment options: Payment for the actual, reasonable moving costs and related expenses; Payment based on a fixed schedule; or A combination of both based on circumstances In cases where a displaced person's move is performed by the agency at no cost to the person, the displaced person should receive a $100 expense and dislocation allowance. What types replacement housing payments are available to residential displaced persons? The URA provides for different replacement housing payments (RHP) based on a displaced person's occupancy status and length of occupancy. Tenant occupants may be eligible for a rental assistance payment to supplement the costs of leasing a comparable replacement dwelling, or downpayment assistance payment to purchase a replacement dwelling. Owner occupants may be eligible for a price differential payment, mortgage interest differential payment, or incidental payments to supplement the costs of purchasing a comparable replacement dwelling. For tenant occupants of 90 days or more: A rental assistance payment is based on the difference, if any, between the cost of the monthly rent and utilities of the displacement dwelling and a comparable decent, safe, and sanitary replacement dwelling, as determined by the agency. The URA established a 42-month period for supplementing this payment difference, for a total amount up to $5,250. It is important to note that a rental assistance payment should be based on income for low-income persons. (See 49 CFR 24.402(b). Furthermore, tenant occupants may be eligible to use their rental assistance payment as a downpayment for the purchase of a replacement dwelling. For owner occupants of 180 days or more A price differential payment is based on the difference, if any, between the acquisition price of the acquired dwelling and the purchase price of a comparable decent, safe, and sanitary replacement dwelling, as determined by the agency. The URA established a maximum amount of $22,500 for a RHP for 180-day owner occupants. For owner occupants of 90 to 180 days Short-term owners may be eligible for similar assistance as tenant occupants listed above.   Housing of Last Resort The URA requires that comparable decent, safe, and sanitary replacement (DSS) housing within a person's financial means be made available before that person may be displaced. When such housing cannot be provided by using replacement housing payments, the URA provides for "housing of last resort." Housing of last resort may involve the use of replacement housing payments that exceed the URA maximum amounts. Housing of last resort may also involve the use of other methods of providing comparable decent, safe, and sanitary housing within a person's financial means. Agencies have broad flexibility in the use of housing of last resort. It is intended to enable agencies to respond to difficult or special displacements, but it should not be used as a substitute for lack of time or lack of relocation advisory services. Remember that it is crucial to identify potential housing of last resort situations early so that they may be addressed in a proper manner. Temporary Relocation Sometimes a project may require persons to be displaced from their dwellings for only a short period of time. Although temporarily displaced persons do not receive the same relocation assistance and payments as persons permanently displaced under the URA, they do have certain rights and protections. What are the requirements for temporary relocation? When necessary or appropriate, residential tenants who will not be required to move permanently may be required to relocate temporarily for the project. Temporary relocation should not extend beyond one year before the person is returned to his or her previous unit or location. Any residential tenant who has been temporarily relocated for more than one year must be offered all permanent relocation assistance, which may not be reduced by the amount of any temporary relocation assistance previously provided. All conditions of temporary relocation must be reasonable. At a minimum, the tenant shall be provided the following: Reimbursement for all reasonable out-of-pocket expenses incurred in connection with the temporary relocation, including the cost of moving to and from the temporarily occupied housing and any increase in monthly rent or utility costs at such housing. Appropriate advisory services, including reasonable advance written notice of the following: o Date and approximate duration of the temporary relocation; o Address of the suitable decent, safe, and sanitary dwelling to be made available for the temporary period; o Terms and conditions under which the tenant may lease and occupy a suitable decent, safe and sanitary dwelling in the building/complex upon completion of the project; and o Provisions of reimbursement for all reasonable out of pocket expenses incurred in connection with the temporary relocation as noted above.   Overview of Section 104(d) Section 104(d) of the Housing and Community Development Act (HCD) provides minimum requirements for certain HUD funded programs or projects.   Which HUD programs are subject to Section 104(d) requirements? CDBG HOME UDAG What are the Section 104(d) requirements? Funding recipients must certify they have in effect and are following a Residential Antidisplacement and Relocation Assistance Plan (RARAP); Relocation assistance to lower-income residential tenants displaced as a direct result of demolition of any dwelling unit or conversion of a lower-income dwelling unit in connection with an assisted activity; and Replacement, on a one-for-one basis, of all occupied and vacant occupiable lower-income dwelling units that are demolished or converted to a use other than lower income dwelling units in connection with an assisted activity   What are the relocation requirements under Section 104(d)? The relocation assistance and payments for eligible persons under Section 104(d) are similar to those required for the URA but there are a number of differences. One significant difference between the laws is the period of time used to calculate a rental assistance payment; Section 104(d) uses 60 months vs. 42 months for the URA. Section 104(d)-eligible displaced persons may also choose to receive relocation assistance under Section 104(d) or relocation assistance under the URA.   What are the guiding regulations for Section 104(d) relocation requirements? Section 104(d) Regulations: 24 CFR Part 42 is the regulation that implements Section 104(d) of the Housing and Community Development Act.                

HUD Update of Tenant Participation Requirements - June 13, 2014

On June 13, 2014, HUD issued a memorandum amending Notice H 2012-21, Implementation of Tenant Participation Requirements.   Section F of the Notice was amended, and clarifies what information must be included in written complaints from tenants.   The Notice states that a tenant or tenant organization may file a written complaint with the local HUD office, with copies to the owner/management agent, alleging a consistent pattern of violations of HUD program requirements. A tenant or tenant organization may file a written complaint citing a single violation if there are conditions that cause serious injury to tenants or the public.   Written complaints must include factual evidence in support of the complaint. Examples of such evidence include:   i. Signed statements from tenants who have observed violations of HUD rules or regulations; ii. Documents from owners expressing opposition to tenant organizing activities; iii. Documents denying the use of facilities for purposes of organizing an association or holding meetings; or iv. Any other form of documentation may be considered when providing evidence supporting the complaint.   Once HUD receives a tenant complaint, HUD is required to attempt to bring the parties together to try to conciliate the issue. However, conciliation is completely voluntary on the part of both parties.   If HUD finds no reasonable cause to believe a violation has occurred, the case will be closed. The case will also be closed if the parties sign a conciliation agreement, but may be re-opened if either party breaches the agreement.   If HUD decides to pursue action against the owner, a Notice of Violation will be sent to the project owner who will have 30-days to respond. If the owner does not respond, or if HUD finds that a violation occurred, the Owner will be flagged for further action.   This Notice should serve as a reminder to owners of your responsibilities relative to tenant organizations in HUD projects; basically, you can do nothing to interfere with their activities, including refusing to permit them to use community space for their meetings.

Insufficent Recertification Notices Void Landlord Right to Collect Contract Rent

If owners and managers of HUD Project-Based Section 8 properties doubt the importance of ensuring that tenant notices contain the exact wording required by HUD, a recent court case out of New York [Lambert Houses Redevelopment Company v. Jobi, May 2014] should be instructive.   Resident Jobi had last recertified on March 1, 2012. On November 1, 2012, the owner personally served her with the first annual recertification reminder. The second notice was served on December 1, 2012 and the third notice was sent by certified mail on January 2, 2013.   The notices informed the resident that failure to recertify would result in her having to pay contract rent of $1,423 per month beginning in March 2013. The owner even served fourth, fifth and sixth notices. Still, the resident failed to recertify and her subsidy was terminated. On June 18, 2013, the owner sent a ten-day notice of termination, demanding $5,380 in rent arrears. No payment was received and the resident did not move.   The owner went to court to recover rent arrears of $6,803 (this included amounts that had accrued after the subsidy termination). Jobi failed to appear at the July 29, 2013 hearing and judgment was entered in favor of the landlord.   The resident s attorney asked that all judgments be vacated because the resident was unlawfully charged the full contract rent without being properly represented and terminated from the Section 8 program. The attorney argued that the three recertification notices were deficient in that they did not include all information required by HUD in the notices - specifically, the name and contact information and office hours of the person who would be handling the recertification.   The owner argued that all HUD requirements were met, but the New York civil court disagreed and dismissed the owner s nonpayment proceeding.   The court stated that the owner was required to provide very detailed notices as mandated by HUD regulations, and that the owner did not do so. Specifically, the notices did not (1) state the name of the staff person to contact about scheduling the recertification; (2) provide contact information for this person; and (3) give the location, days and office hours during which the staffer would be available. Also, the third notice was required to have been sent no less than 60 days prior to the recertification date of March 1, 2013. It was sent January 2, 2013, which was 58 days prior to the recertification date; it should have been sent on December 31, 2012.   This case reiterates the importance of strict adherence to HUD requirements regarding notice language. The failure to comply with these notice requirements invalidates the notices and bars collection of contract rent from a tenant in a project-based Section 8 project.

Medical Marijuana and Multifamily Housing

Medical Marijuana and Multifamily Housing   An increasing number of states are legalizing the use of marijuana for medical purposes. Alaska, Arizona, California, Colorado, Connecticut, DC, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington have all passed such laws.   Florida, New York, Ohio and Pennsylvania have pending legislation or ballot measures on the issue. Colorado and Washington have legalized Marijuana for recreational use.   The Drug Enforcement Administration (DEA) still lists marijuana as a Schedule 1 drug. Schedule 1 drugs are those with no currently accepted medical use and a high potential for abuse. This are considered by the DEA to be the most dangerous, and in addition to marijuana, include heroin, LSD, ecstasy, meth and peyote. There is no indication that the federal government is anywhere near changing this categorization.   How should housing providers respond in the affected states when asked to provide a reasonable accommodation to permit medically prescribed marijuana?   For purposes of the federal Fair Housing Act, medically prescribed marijuana is not considered a required reasonable accommodation, since it violates federal drug law. Also, the definition of a disability under the Fair Housing Act states that current illegal use or addition to a controlled substance is not considered a disability.   It is clear that landlords are under no obligation to permit medically prescribed marijuana under federal fair housing law - but what about under State laws?   California: The Unruh Civil Rights Act prohibits discrimination by any business in CA, including housing and public accommodations. The Act states that "all persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status or sexual orientation are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever." It is possible that California, as well as other states, would consider it a violation of State fair housing law not to consider a reasonable accommodation request for the use of medical marijuana.   While HUD has stated that applicants to HUD assisted properties that use marijuana for any reason must be rejected, they are taking a softer stance on existing residents, essentially leaving it up to owners and PHAs regarding how to handle the situation.         Recommendations   1. Carefully research the specifics of marijuana-related laws in your state to ensure you comply with state requirements; 2. Examine loan and regulatory documents for any language relating to onsite drug use; 3. Make sure your lease complies with state law and any federal requirements; 4. If an applicant or tenant requests permission to smoke medically prescribed marijuana, consider asking if it would be possible for them to take it in a different form, such as edibles or tinctures; 5. Review any smoke-free policies you may have to determine the impact on medical marijuana users; and 6. Do not ask potential tenants if they are medical marijuana users (may violate privacy rights). These recommendations apply only to states where the use of medically prescribed marijuana is permitted under state law; the use of marijuana for any purpose in any other state should not be permitted.