Finding Text
Statement of Condition In connection with the procedures applied to a sample of 2 tenants that moved out of the Project during the year, we noted 1 instance 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. 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. Questioned Costs None Effect Management failed to comply with the HUD occupancy requirement to timely refund the tenant security deposits. Cause On tenant move out property management failed to timely notify the accounting staff of the move out and to issue the check to the tenant. Recommendation Management should ensure its policies and procedures related to refunding of tenant security deposits are followed and comply with the thirty-day timeline required by HUD regulations.