Finding Text
Criteria
Tenant lease files are required to be maintained and tenant eligibility determined in accordance with
HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs.
Condition
In connection with our lease file review, we noted the following deficiencies:
- 1 out of 1 lease files for new tenants did not follow EIV guidelines, no EIV report was generated
for move-in certification.
- 3 out of 11 lease files for existing tenants did not follow EIV guidelines, EIV reports were
generated outside of the allowed 120-day period.
- 3 out of 11 lease files for existing tenants did not contain necessary documentation, files were
missing gross rent change forms and latest executed versions of HUD-50059 form.
Cause
Management's policies with respect to the determination of eligibility and the maintenance of tenant
lease files in accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized
Multifamily Housing Programs were not consistently followed.
Effect or Potential Effect
The procedures for eligibility and maintaining tenant lease files were not consistently applied in
accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily
Housing Programs. This could result in units being rented to ineligible tenants or errors in the rent
subsidies paid by HUD.
Recommendations
Management should establish procedures and monitor compliance with those procedures to ensure
that tenant eligibility is correctly determined and that tenant lease files are properly maintained in
accordance with the requirements of HUD Handbook 4350.3, Occupancy Requirements of
Subsidized Multifamily Housing Programs.
Auditor Noncompliance Code:
Z. Other View of Responsible Officials
Management agrees with the finding and has implemented the below policies and will continue to
train, and connect our team members with the in house HUD Compliance Specialist for support.
1. Move in EIV's - All move in files will be sent to our in house compliance department and
Franklin Group has an EIV specialist how follows and tracks all moves for accuracy for all
move files and the EIV specialist also sends out the 90 day reminders for all move in.
2. Existing Tenant EIV - It is the policy that all existing tenant EIV & 120-day reports are run
per the 4350 guidelines. The Community Manager for Renaissance Gardens has been
provided the HUD Trainings and have noted on her daily task reminder from One Site to pull
all reports as required. The RM is required during monthly visits to spot check at least 5
existing tenants.
3. Gross Rent Change & Medical Reporting - The policy states that all Gross Rent Changes
are to be completed as approved by the new rent schedule - The Community Manager is
required to scheduled appointments with all residents to sign the effective gross rent change
and file in tenants files, it is also required that residents 50059s are signed and in the file,
the Community Manager has taken the latest HUD training with our in house HUD
Compliance Manager- The Regional Manager will also spot check files to be certain that all
Gross Rent Changes are in it's 6 part file folders. Medical reporting records were discussed
in our HUD Compliance Training and all expenses must be in the 6-part file folder. Again,
the RM will continue to spot check files during the monthly required inspections. All HUD
Communities were required to participate in the HUD Training as a reminder tool.
4. Security Deposit - Franklin Companies has a policy that all security deposit refunds must be
submitted within the 3 days move out period. This situation was due to the changeover in
Management.
Finding Resolutions Status: Resolved