Finding Text
Department of Housing and Urban Development Finding 2022-002 Section 202 Supportive Housing for the Elderly, AL 14.157 Statement of Condition During the procedures applied to a sample of one tenant lease file, Management was unable to provide evidence of timely refund to tenant of security deposit. 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. Effect Management may have 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. Cause The project failed to follow the policies and procedures which have been established for proper tenant file maintenance documentation of timely refund of security deposits to tenants in accordance with HUD guidelines, due to the property sale. Recommendation Management should establish procedures and monitor compliance with those procedures to insure that tenant security deposits are refunded timely 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: M. Security deposits (REAC); N - Special Tests and Provisions (UG) Finding Resolution Status: Unresolved Reporting Views of Responsible Officials Management agrees with the finding. The property was sold subsequent to audit period end and current management agent did not provide the requested documents.