Finding Text
Statement of Condition – The Project paid property management fees exceeding the limit per Form HUD-9839-B, which is defined as the lesser of 4.15% of residential and miscellaneous income collected or $81.21 per unit per month. Criteria – HUD Handbook 4381.5, REV-2 and the executed Form HUD-9839-B stipulate that management fees must not exceed the amount approved by HUD. Any deviation requires prior written approval from HUD. Effect – The Project is not in compliance with HUD regulations. Cause – The Project paid the property management fee based on 4.15% of residential and miscellaneous income without consideration of the $81.21 per unit per month limitation. Amount – $8,915 Recommendation – Management should reimburse the Project for the overpayment of property management fees. Management’s Response – Management acknowledges the error and agrees to the amount owed for the overpayment of property management fees and have updated their procedures to ensure future compliance. The Project was reimbursed for the overpayment as of the independent auditor’s report date.