[Federal Register Volume 64, Number 191 (Monday, October 4, 1999)]
[Rules and Regulations]
[Pages 53868-53869]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25733]
[[Page 53867]]
_______________________________________________________________________
Part V
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 882
Section 8 Moderate Rehabilitation Program; Executing or Terminating
Leases on Moderate Rehabilitation Units When the Remaining Term of the
Housing Assistance Payments (HAP) Contract is for Less Than One Year;
Interim Rule
Federal Register / Vol. 64, No. 191 / Monday, October 4, 1999 / Rules
and Regulations
[[Page 53868]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 882
[Docket No. FR-4472-I-01]
RIN 2577-AB98
Section 8 Moderate Rehabilitation Program; Executing or
Terminating Leases on Moderate Rehabilitation Units When the Remaining
Term of the Housing Assistance Payments (HAP) Contract is for Less Than
One Year
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Interim rule.
-----------------------------------------------------------------------
SUMMARY: The current program regulations for the Section 8 Moderate
Rehabilitation Program state that the initial lease term between an
owner and a family must be for at least one year. The regulation is
silent on the requisite lease term when the Housing Assistance Payments
(HAP) contract term expires in less than one year. The purpose of this
interim rule is to implement the statutory language that requires that
any initial lease term not extend beyond the term of the HAP contract.
This interim rule also revises the program regulation to allow an owner
and a public housing agency (PHA) to mutually agree to terminate a unit
from the HAP contract if a unit becomes vacant and the term of the HAP
contract is for less than one year.
DATES: Effective Date: November 3, 1999.
Comments Due Date: December 3, 1999.
ADDRESSES: Interested persons are invited to submit comments regarding
this rule to the Office of General Counsel, Rules Docket Clerk, Room
10276, U.S. Department of Housing and Urban Development, Washington, DC
20410-0500. FAX comments will not be accepted. Communications should
refer to the above docket number and title. A copy of each
communication submitted will be available for public inspection and
copying on weekdays between 7:30 a.m. and 5:30 p.m. (eastern time) at
the above address.
FOR FURTHER INFORMATION CONTACT: Gerald J. Benoit, Director, Real
Estate and Housing Performance Division, Office of Public and Assisted
Housing Delivery, Room 4210, U.S. Department of Housing and Urban
Development, 451 Seventh Street, SW, Washington, DC 20410-5000;
telephone: (202) 708-0477 (this is not a toll-free number). Persons
with hearing or speech impairments may access this number via TTY by
calling the toll-free Federal Information Relay Service at (800) 877-
8339.
SUPPLEMENTARY INFORMATION:
I. Background
a. General
Section 8(d)(1)(B)(i) of the United States Housing Act of 1937 (42
U.S.C. 1437f) requires that the initial lease between the tenant and
the owner be for at least one year or the term of the HAP contract,
whichever is shorter. In most cases, Section 8 Moderate Rehabilitation
dwelling leases will terminate concurrently with Housing Assistance
Payments (HAP) contract expirations. In some cases, however, a dwelling
lease may end prior to the expiration of the Moderate Rehabilitation
HAP contract. A lease may end as a result of (1) an action by an owner
to terminate tenancy in accordance with the lease addendum and program
regulations; (2) a tenant's action to terminate the lease agreement; or
(3) an action by a housing authority to terminate the family from the
program for failure to comply with the family's obligations under the
Statement of Family Responsibility and the owner chooses to terminate
the lease with the family.
Section 882.403(d) of the program regulations at 24 CFR part 882
provides, in pertinent part, that the initial lease between the family
and owner must be for at least one year. If a lease agreement ends with
less than twelve months remaining on the HAP contract, Sec. 882.403(d)
effectively prohibits an owner from reoccupying the unit with a new
family. Thus, Section 8 Moderate Rehabilitation owners may lose rental
income on units because the remaining term of the HAP contract is for
less than twelve months and Sec. 882.512(a) prohibits an owner from
occupying a unit under a HAP contract with an ineligible family (i.e. a
family other than one participating in the Section 8 Moderate
Rehabilitation program). The statutory language supersedes the limited
regulatory language and requires PHAs to allow owners to enter into
initial leases with assisted families for less than one year provided
the lease does not extend beyond the term of the HAP contract.
b. Reoccupying a Unit for Less Than One Year
When a unit becomes vacant, and less than twelve months remain on
the HAP contract, the lease agreement must clearly state that the lease
is for less than one year and provide the date on which the HAP
contract and Section 8 Moderate Rehabilitation assistance will
terminate. Families renting Moderate Rehabilitation units with
contracts that have terms of less than one year must be informed at
their Section 8 briefing that when the Moderate Rehabilitation HAP
contract expires, the units will be replaced with Section 8 tenant-
based vouchers (in cases where the Moderate Rehabilitation HAP contract
is not renewed in accordance with HUD procedures) and that they must
find a suitable unit in which to relocate upon expiration of the
Moderate Rehabilitation HAP contract or remain in the unit with tenant-
based rental voucher assistance if the owner wishes to participate in
the Section 8 rental voucher program.
c. Mutual Agreement To Terminate
If less than one year remains on the HAP contract and a unit
becomes vacant, an owner and a PHA may mutually agree to terminate the
unit from the HAP contract. An owner who will not be eligible for a one
year HAP contract renewal or who does not wish to renew his Moderate
Rehabilitation HAP contract, may choose to terminate the HAP contract
on the vacant unit and rent to a market-rate tenant rather than execute
an assisted lease for less than one year. An owner may possibly choose
this course when, for example, costs involved in preparing the unit for
a new assisted tenancy for less than twelve months would be greater
than costs associated with terminating the assisted unit and renting to
a market-rate tenant.
If an owner agrees to terminate the vacant unit from the HAP
contract, the housing authority must amend the HAP contract to reflect
the reduced number of units. Both the housing authority and owner must
sign and date the amendment. The housing authority should attach the
amendment to the original HAP contract. In addition, the housing
authority must send a copy of the HAP contract amendment to the Section
8 Financial Management Center (FMC). Upon receipt of the amendment, the
Section 8 FMC will enter the change into HUDCAPS.
d. This Interim Rule
For the reasons set forth above, Sec. 882.403(d) is revised to
permit an initial lease for at least one year or the term of the HAP
contract, whichever is shorter. If the initial term of the lease is for
less than one year because the remaining term of the HAP contract is
for less than one year, the Owner and the PHA may mutually agree to
terminate the unit from the HAP contract. The provision that any
renewal
[[Page 53869]]
or extension of the lease term may not extend beyond the remaining term
of the HAP contract remains unchanged.
e. Justification for Interim Rule
In general, the Department publishes a rule for public comment
before issuing a rule for effect, in accordance with its own
regulations on rulemaking at 24 CFR part 10. Part 10, however, provides
in Sec. 10.1 for exceptions from that general rule where the Department
finds good cause to omit advance notice and public participation. The
good cause requirement is satisfied when the prior public procedure is
``impracticable, unnecessary, or contrary to the public interest.''
The Department finds that good cause exists to publish this interim
rule for effect without first soliciting public comment. To require
public comment first would be impracticable and contrary to the public
interest. In keeping with the statute, this rule allows leases for
terms of less than twelve months where the remaining term of the HAP
contract is less than twelve months. It also permits the Owner and the
PHA to mutually agree to terminate a unit from the HAP contract where
the remaining term of the HAP contract is for less than one year. The
existing rule would continue a prohibition that would prevent an owner
from reoccupying a vacant unit with a new family.
II. Findings and Certifications
Environmental Impact
A Finding of No Significant Impact with respect to the environment
for this rule has been made in accordance with HUD regulations at 24
CFR part 50, which implement section 102(2)(C) of the National
Environmental Policy Act of 1969 (42 U.S.C. 4332). The Finding of No
Significant Impact is available for public inspection between 7:30 a.m.
and 5:30 p.m. weekdays in the Office of the Rules Docket Clerk, Office
of the General Counsel, U.S. Department of Housing and Urban
Development, Room 10276, 451 Seventh Street, SW, Washington, DC 20410.
Federalism Impact
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this rule do not have significant impact on States or
their political subdivisions, or the relationship between the Federal
government and the States, or on the distribution of power and
responsibilities among the various levels of government. As a result,
the rule is not subject to review under the Order. The rule merely
provides an exception to allow leases for terms of less than twelve
months under the Moderate Rehabilitation Program.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1532) (UMRA) establishes requirements for Federal agencies to assess
the effects of their regulatory actions on State, local, and tribal
governments, and on the private sector. The Secretary, in accordance
with UMRA, has reviewed this rule before publication and by approving
it has determined that it does not impose any Federal mandates on any
State, local, or tribal governments, or on the private sector that will
result in the expenditure of State, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million or more in any
one year.
Impact on Small Entities
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that this rule will not have a significant
impact on a substantial number of small entities, because it does not
place major burdens on housing authorities or housing owners. The rule
merely provides an exception to allow leases for terms of less than
twelve months under the Moderate Rehabilitation Program. Nevertheless,
the Department is sensitive to the fact that the uniform application of
requirements on entities of differing sizes often places a
disproportionate burden on small entities. The Department, therefore,
is soliciting alternatives for compliance from small entities.
List of Subjects for 24 CFR Part 882
Grant programs--housing and community development, Homeless, Lead
poisoning, Manufactured homes, Rent subsidies, Reporting and
recordkeeping requirements.
Accordingly, 24 CFR part 882 is amended as follows:
PART 882--SECTION 8 MODERATE REHABILITATION PROGRAM
1. The authority citation for part 882 continues to read as
follows:
Authority: 42 U.S.C. 1437a, 1437c, 1437f, and 3535(d).
2. Revise paragraph (d) of Sec. 882.403 to read as follows:
Sec. 882.403 ACC, housing assistance payments contract, and lease.
* * * * *
(d) Term of Lease. (1) The initial lease between the family and the
Owner must be for at least one year or the term of the HAP contract,
whichever is shorter. In cases where there is less than one year
remaining on the HAP contract, the owner and the PHA may mutually agree
to terminate the unit from the HAP contract instead of leasing the unit
to an eligible family.
(2) Any renewal or extension of the lease term for any unit must in
no case extend beyond the remaining term of the HAP contract.
Dated: August 13, 1999.
Deborah Vincent,
General Deputy Assistant Secretary for Public and Indian Housing.
[FR Doc. 99-25733 Filed 10-1-99; 8:45 am]
BILLING CODE 4210-33-P
