HUD’S 30-DAY NONPAYMENT RULE EFFECTIVE FOR HUD ASSISTED RESIDENTS
In response to the number of evictions for non-payment after the COVID lockdowns, HUD issued an interim rule requiring certain housing program recipients to issue a 30-day notice for non-payment instead of the 14-day notice of non-payment. The interim rule became a proposed rule published on December 1, 2023 and was to remain in effect until such time as HUD issued a final rule. On December 13, 2024, HUD released its final rule regarding the provision of a 30-day notice for non-payment of monthly housing charges for select federally subsidized projects with an effective date of January 13, 2025 despite its required application in the interim.
The final rule requires affected housing cooperatives to issue a written notice to program recipients at least 30 days before a formal judicial eviction is filed due to nonpayment of monthly housing charges if they live in public housing or one of several project-based monthly housing charges assistance (PBRA) properties. The final rule applies only to evictions for nonpayment of monthly housing charges. Covered programs include:
- Section 8 Project-Based Monthly housing charges Assistance; and,
- Certain Section 202 Supportive Housing for the Elderly programs; and,
- Section 811 Supportive Housing for Persons with Disabilities programs.
The final rule does not however, apply to Housing Choice Vouchers (HCVs) or Project-Based Vouchers (PBVs). The rules does not extend protections to evictions pursued due to other occupancy violations or for material noncompliance. This rule also does not create, expand, or retract any existing legal requirements for submitting VAWA notifications and requisite HUD forms to affected residents, therefore existing VAWA notification requirements must continue to be adhered to.
Along with adopting the interim rule provisions, HUD’s final rule added some new requirements for affected housing cooperatives when issuing a non-payment notice. The final rule requires that the 30-day notice include instructions on how recipients can cure occupancy violations for nonpayment of carrying charges, though HUD refers to it as monthly housing charges. These instructions would allow affected recipients to clearly understand how to avoid the commencement of a formal judicial eviction proceeding for non-payment of monthly housing charges. Instructions on how the affected recipient can cure the nonpayment violation would include the alleged amount of carrying charges owed, any other arrearages allowed by the HUD program, and the date by which the affected recipient must pay the carrying charges and arrearages to avoid the filing of an eviction action in State court against the affected recipient's household. The final rule also requires the cooperative to include information on how the affected recipient can recertify their income and how affected recipients can request a minimum monthly housing charges hardship exemption if applicable.
The proposed rule requires affected cooperatives to provide the 30-day notice in accessible formats to ensure effective communication with individuals with disabilities and in a form to allow meaningful access for individuals with limited English proficiency (LEP) and to comply Title VI nondiscrimination requirements of the Civil Rights Act of 1964 and section 504 of the Rehabilitation Act of 1973.
HUD 30-DAY NOTICE RULE FOR NONPAYMENTS MANDATED FOR AFFECTED PROPERTIES
Additionally, HUD suggests the 30-day notice advise individuals of their right to request reasonable accommodations, include information on how individuals with disabilities can request reasonable accommodation, and include a point of contact for reasonable accommodation requests. There are instances in which a Member may be entitled to a reasonable accommodation in cases of non-payment of monthly housing charges. For example, if a housing provider usually requires monthly housing charges be paid on the 1st of the month, but a Member receives disability-related government assistance later in the month, the housing provider may be required to accept a Member's request to pay monthly housing charges on this later date as a reasonable accommodation.
Lastly, this final rule requires the 30-day notice include an itemized amount, which is separated by month, of alleged monthly housing charges owed by the Member, along with any other arrearages allowed by HUD and included in the occupancy agreement which must also be separated by month, and the date by which the Member must pay the amount of monthly housing charges owed before a formal judicial eviction can be filed for nonpayment of monthly housing charges. The arrearages, which might include late fees or other fees, must also be itemized separately from the alleged monthly housing charges amount owed by the affected recipient.
This is important because if the affected recipient pays the full amount of the alleged carrying charges owed but not the arrearages, the nonpayment will still be considered cured, and an eviction for nonpayment cannot be filed. This means that if there are late charges, legal fees/costs, carrying charges and separate fines assessed, if the affected resident pays the outstanding carrying charges, but not the late fees or fines, the cooperative may not proceed with the non-payment eviction action. HUD emphasizes that the protections in this rule do not apply to other types of evictions that result from non-monthly housing charges lease violations, such as nonpayment of arrearages (such as late charges, fines, and legal fees), if allowed under the applicable HUD program and specified in the lease.
HUD indicates it will issue revised leases soon and covered housing cooperative will have 14 months to use them. HUD Occupancy Handbook 4350.3 REV-1 CHG-3 dictates that cooperatives subject to regulatory tenancy requirements use a HUD-approved occupancy agreement in lieu of a model lease. Occupancy agreements for assisted cooperatives must incorporate the cooperative’s policy on unit transfers and the Model Lease paragraphs covering recertification, termination of assistance, and fraud penalties. Cooperatives subject to the final rule should be prepared to amend their occupancy agreements to come into compliance with HUD’s Final Rule, or, minimally, adopt an Occupancy Agreement Addendum incorporating the required language for the 30-day notice including the new rights of affected recipients in receipt of the 30-day notice under the final rule.
HUD advised that it will issue sample notice language but affected housing cooperative may also draft their own notices as long as they include the required elements. We strongly encourage affected properties to reach out to their cooperative attorney to assist with the new required compliance language as well as the necessary occupancy agreement amendments. Further, affected cooperatives should discuss the potential issues created by the shortcomings of HUD’s final rule and how it could impact future operations with both their cooperative attorney and their Property Manager/Management Agent.
- April E. Knoch, Esq.
Pentiuk, Couvreur & Kobiljak, P.C.