Finding Text
Criteria
In accordance with HUD Handbook 4350.3, Occupancy Requirements of Subsidized Multifamily Housing Programs, within 30 days after the move-out date (or shorter time if required by state and/or local laws), management must either: refund the full security deposit plus accrued interest to a tenant that does not owe any amounts under the lease; or provide the tenant with an itemized list of any unpaid rent, damages to the unit, and an estimated cost for repair, along with a statement of the tenant's rights under state and local laws.
Condition
In connection with the procedures applied to a sample of one tenant that moved out of the project during the year, we noted one instances where management failed to refund the tenant security deposit and/or provide the tenant with an itemized list of charges deducted from the deposit within thirty days after the move-out date.
Cause
The Project failed to follow the policies and procedures which have been established for timely refunding of tenant security deposits which require refunds or notice to occur within 30 days, established by HUD.
Effect or Potential Effect
Management failed to comply with the HUD occupancy requirement to timely refund the tenant security deposits or to provide the tenant with a list of charges.
Questioned Costs
None Context
A sample of 1 tenant file from a population of 5 were selected. We identified exceptions in 1 out of the 1 files tested. The sample in not a statistically valid sample.
Identification as a Repeat Finding
Not a repeat finding
Recommendation
Management should change its policies and procedures related to refunding of tenant security
deposits to comply with the thirty-day timeline required by HUD regulations.
Auditor Noncompliance Code: M - Security deposits
Finding Resolution Status: In-processViews of Responsible Officials
As there has been a change in the Management Agent, the agent will ensure that move-outs
are processed within the proper time frame. Management has instituted company policy as well
as corporate compliance monitoring that requires timely processing.