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:
- Five out of 10 existing tenants tested did not follow EIV guidelines;
- Two out of 10 existing tenants had issues where the files were not maintained in accordance
with guidelines;
- One out of one former tenant had an issue where the file was not maintained in accordance
with guidelines; and
- One out of one new tenant tested did not follow EIV guidelines.
Cause
Management's policies with respect to 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 determining tenant security deposits and 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.
Identification as a Repeat Finding
This is a repeat finding.
Recommendation
Management should establish procedures and monitor compliance with those procedures to
ensure that tenant security deposits are correctly recorded, 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. Views of Responsible Officials
Management agrees with the finding and recommendation and has reviewed the HUD
requirements.
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 who 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 and 120-day reports are run
per the 4350 guidelines. The Community Manager for Renaissance Gardens has been
provided the HUD Trainings and has 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 five
existing tenants.
3. Gross Rent Change and 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 ("RM") will also spot check files to be certain
that all Gross Rent Changes are in its 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 three-day move out period. This situation was due to the changeover in
Management.