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condition for acceptance of the project. underpayment in alleged violation of Contract Rents may not be increased by said provisions of the Agreement. In the reason of any changes or modifications. event there are any such pending claims

(d) Inspection of HUD-FHA insured to the knowledge of the owner, HUD, or projects. For projects financed with the PHA (if applicable), the Owner HUD-FHA insured mortgages, required shall be required to place a suficient HUD inspection procedures shall be fol- amount in escrow, as determined by lowed including compliance with equal HUD, to assure such payments. opportunity requirements.

§ 1277.216 Project completion. (e) Equal opportunity review. Equal opportunity review may be conducted (a) Notification of completion. The with any scheduled HUD inspection or at Owner shall notify HUD (with a copy to any other time deemed advisable by the PHA in the case of a Private-Owner/ HUD.

PHA Project) when the work is com(f) Commencement of marketing. The pleted and shall submit to HUD the Owner shall commence and diligently

evidence of completion described in paracontinue marketing as soon as possible, graph (b) of this section. but in any event no later than 60 days (b) Evidence of completion. Compleprior to the estimated completion date. tion of the project shall be evidenced by The Owner shall notify HUD (or the furnishing HUD with all of the following: PHA in the case of a Private-Owner/ (1) A certification by the Owner that PHA Project) of the date of the com- (i) the property was treated and is in mencement of marketing. The Owner compliance with applicable HUD Lead shall also comply with all reporting re- Based Paint regulations 24 CFR 35, (ii) quirements under the Affirmative Fair if the property was constructed prior to Housing Marketing Regulations. Not 1950, the Family upon occupancy will later than 30 days prior to the estimated receive the notice required by HUD Lead completion date and periodically there- Based Paint regulations and procedures after, the Owner shall notify HUD (or regarding the hazards of lead based paint the PHA in the case of a Private-Owner/ poisoning, the symptoms and treatment PHA Project) of any units which he of lead poisoning and the precautions to anticipates will be vacant on the effective be taken against lead poisoning and that date of the Contract. At the time the records showing receipt of such notice Contract is executed (see § 1277.217), the by each tenant will be maintained. Owner will be required to submit a list (2) A certificate of occupancy and/or of the dwelling units leased as of the ef- other official approvals necessary for ocfective date of the Contract and a list of cupancy. the units not so leased, if any. The Owner (3) A certification by the Owner, which will be entitled to housing assistance will be supported by the Owner's warpayments for any unleased units, pur- ranty in the Contract, that: suant to § 1277.103(e) (2), only if he has (i) All work has been completed in acfully complied with the requirements of cordance with the requirements of the that section and of this paragraph.

Agreement; (g) Management certification. Prior (ii) The project is in good and tenantto acceptance of the project by HUD, the able condition; and Owner must certify in writing that there (iii) There are no defects or deficienhas been no change in the evidence of

cies in the project except for ordinary management capability or in the pro

punchlist items, or incomplete work posed management program (if one was awaiting seasonal opportunity such as required) specified in his Final Proposal

landscaping and heating system test other than changes approved in writing

(such excepted items to be specified). by HUD in accordance with the Agree

(iv) The project has been rehabiliment.

tated in accordance with applicable zon(h) Labor standards certification.

ing, building, housing and other codes, Prior to acceptance by HUD of any proj

ordinances or regulations, as modified by ect consisting of nine or more Contract

any waivers obtained from the approunits, the Owner must certify in writing that he has complied with the provisions

priate officials. of the Agreement relating to the payment

(4) A certification (if working drawof not less than prevailing wage-rates

ings and specifications were prepared and and that to the best of his knowl- certified to by a registered architect) by edge and belief there are no claims of the registered architect responsible for

inspection of construction that such in- (1) If the defects or deficiencies are spection was performed by him or under only punchlist items or incomplete items his supervision with the frequency and awaiting seasonal opportunity, the projthoroughness required by the generally ect may be accepted and the Contract accepted standards of professional care executed. If the Owner fails to complete and judgment, and that to the best of such items within a reasonable time to his knowledge, belief, and professional the satisfaction of HUD, HUD may, upon judgment:

30 days notice, terminate or require ter(i) All work has been completed in mination of the Contract or exercise its conformance with the certified working other rights under the Contract. drawings and specifications for the proj

(2) If the defects or deficiencies are ect or approved changes thereto (such other than punchlist items or incomplete changes to be listed);

work awaiting seasonal opportunity, but (ii) The project is in good and tenant- HUD determines that: (i) a certificate of able condition; and

occupancy and/or other official approvals (iii) There are no defects or deficien- necessary for occupancy has been issued, cies in the project except for ordinary

(ii) the project is in good and tenantable punchlist items, or incomplete work

condition, and (iii) the project has been awaiting seasonal opportunity such as

rehabilitated in accordance with the aplandscaping and heating system test plicable zoning, building, housing and (such excepted items to be specified by

other codes, ordinances or regulations, the architect).

as modified by any waivers obtained from (iv) The project has been rehabili

the appropriate officials, the project may tated in accordance with applicable zon

be accepted after the Owner corrects the ing, building, housing and other codes,

defects or deficiencies or the project may ordinances or regulations, as modified by

be accepted subject to a specified reducany waivers obtained from the appro

tion of the Contract Rents as determined priate officials.

by HUD. (c) Inspection. (1) Within ten work

(3) If HUD determines that the projing days of the receipt of the Owner's

ect is not acceptable under paragraphs notification of project completion, a

(d) (1) or (d) (2) of this section, HUD HUD representative (accompanied by a

shall determine: (i) whether the defects PHA representative, if applicable) shall

or deficiencies can be corrected, and inspect the project and review the evi

(ii) whether a reduction in Contract dence of completion listed in paragraph

Rents will be required as a condition to (b) of this section. Such inspection shall

acceptance of the project. If it is deterbe sufficient to enable the HUD inspector

mined that the defects or deficiencies to state in his inspection report that he

can be corrected, the Owner thereupon has inspected the observable elements

shall be notified of HUD's determinations and features of the project in accordance

under paragraphs (d) (3) (i) and (d) (3) with professional standards of care and

(ii) of this section, and, if he agrees to judgment and that, in the basis of such

comply with the conditions, an agreeinspection, the project has been com

ment shall be entered into pursuant to pleted in accordance with the Agree

which the defects, or deficiencies will be ment and, in particular, that there are

corrected and the project then accepted. no observable conditions inconsistent

If the Owner is unwilling to enter into with the certification of the Owner or

such agreement or if he fails to perform the design architect or the inspecting the agreement, the project shall not be architect. As promptly as possible, HUD

accepted. shall notify the Owner in writing as to (e) Completion in stages. If the projwhether or not the project has been com- ect is to be completed in stages, the propleted in an acceptable manner.

cedures of this section shall apply to (2) In the event the Owner disputes

each stage. HUD's determinations, he may submit § 1277.217 Execution of Housing Assistthe controversy to third-party arbitra

ance payments contract. tion, at his expense, provided that the arbitration is advisory only.

(a) Upon acceptarce of the project

by the Government pursuant to (d) Acceptance of project. If HUD de

$$ 1277.215 and 1277.216, the Contract termines that the project is not accept- shall be executed first by the Owner and able under paragraph (c) (1) of this sec- then by HUD, or, in the case of a Privatetion, the following shall apply:

Owner/PHA Project, executed by the

Owner and the PHA and then approved shall retain copies of all completed apby HUD.

plications together with any related cor(b) At the time of execution of the respondence for three years. For each Contract, HUD (or the PHA, as appro- Family selected for admission, the Owner priate) shall examine the lists of dwell- shall submit one copy of the completed ing units leased and not leased, referred and signed application to the HUD field to in § 1277.215(f), and shall deter- office (in the case of Private-Owner/ mine whether or not the Owner has met PHA Projects, the Owner simultaneously his obligations under that section with shall send a copy of the form to the respect to any unleased units. HUD (or PHA), Housing assistance payments will the PHA, as appropriate) shall state not be made on behalf of an admitted in writing its determination with respect

Family until after this copy has been to the unleased units and for which of

received by the HUD field office. those units it will make housing assist

(3) If the Owner determines that the ance payments. The Owner shall indicate applicant is eligible on the basis of inin writing his concurrence with this de- come and family composition and is termination or his disagreement, re

otherwise acceptable but the Owner does serving his rights to claim housing assist

not have a suitable unit to offer, the ance payments for the unleased units Owner shall place such Family on his pursuant to the Contract, without preju

waiting list and so advise the Family. dice by reason of his signing the Con

(4) If the Owner determines that the tract. Copies of all documents referred applicant is eligible on the basis of into in this paragraph shall be furnished come and family composition and is HUD in the case of a Private-Owner/

otherwise acceptable and if the Owner PHA project.

has a suitable unit, the Owner and the

Family shall enter into a Lease. Such & 1277.218 Project operation.

Lease shall be on the form of Lease in(a) Compliance with Equal Opportu- cluded in the Owner's approved Final nity requirements. Marketing of units Proposal and shall otherwise be in conand selection of Families by the Owner formity with the provisions of this part. shall be in accordance with the Owner's (5) Records on applicant families and HUD-approved Affirmative Fair Housing approved Families shall be maintained Marketing Plan, if required, and with all by the Owner so as to provide HUD with regulations relating to fair housing ad

racial, ethnic and gender data and shall vertising including use of the equal op

be retained by the Owner for three years. portunity logotype, statement, and slogan

(6) In the case of a PHA-Owner projin all advertising. Projects shall be ect, (i) if the PHA places a Family on manageä and operated without regard its waiting list, it shall notify the Family to race, color, creed, religion, sex, or

of the approximate date of availability national origin.

of a suitable unit insofar as such date (b) Eligiblity, selection and admis- can be reasonably determined, and (ii) sion of families. (1) The Owner shall be if the PHA determines that an appliresponsible for determination of eligi- cant is ineligible on the basis of income bility of applicants, selection of families or family composition, or that the PHA from among those determined to be

is not selecting the applicant for other eligible, and computation of the amount

reasons, the PHA shall send the appliof housing assistance payments on behalf

cant a letter notifying him of the deterof each selected Family, in accordance with schedules and criteria established

mination and the reasons and that the by HUD.

applicant has the right within a reason(2) For every family that wishes to

able time (specified in the letter) to reapply for admission, the Owner and the

quest an informal hearing. If, after conapplicant shall complete and sign the

ducting such an informal hearing, the form of application prescribed by HUD,

PHA determines that the applicant shall except that if there are no vacant units not be admitted, the PHA shall so notify and the Owner's waiting list is such that the applicant in writing and such notice there would be an unreasonable length shall inform the applicant that he has of time before the applicant could be the right to request a review by HUD of admitted, the Owner may advise the ap- the PHA's determination. The procedures plicant that the Owner is not accepting of this subparagraph do not preclude the applications for that reason. The Owner applicant from exercising his other

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rights if he believes he is being discriminated against on the basis of race, color, creed, religion, sex, or national origin. The PHA shall retain for three years a copy of the application, the letter, the applicant's response if any, the record of any informal hearing, and a statement of final disposition.

(c) Lease requirements. The Lease shall contain all required provisions specified in paragraph (c) (2) of this section and none of the prohibited provisions listed in paragraph (c)(3) of this section and shall otherwise conform to the form of Lease included with the Owner's approved Final Proposal.

(1) Term of lease. The term of the Lease shall be generally for not less than one year. The Lease may (or, in the case of a Lease for a term of more than one year, shall) contain a provision permitting termination upon 30 days advance written notice by either party.

(2) Required provisions. The Lease between the Owner (Lessor) and the Family (Lessee) shall contain the following provisions:

"ADDENDUM TO LEASE “The following additional Lease provisions are incorporated in full in the Lease between

(Lessor) and -(Lessee) for the following dwelling unit:

-.. In case of any conflict between these and any other provisions of the Lease, these provisions shall prevail.

"a. The total rent shall be $---- per month.

“b. Of the total rent, $------ shall be payable by or at the direction of the Department of Housing and Urban Development (“HUD") as housing assistance payments on behalf of the Lessee and $-- shall be payable by the Lessee. These amounts shall be subject to change by reason of changes in the Lessee's family income, family composition, or extent of exceptional medical or other unusual expenses, or by reason of adjustment by HUD of any applicable Allowance for Utilities and Other Services. Any such change shall be determined in accordance with HUDestablished schedules and criteria and shall be effective as of the date stated in a notification to the Lessee.

"c. The Lessor shall not discriminate against the Lessee in the provision of services, or in any other manner, on the grounds of race, color, creed, religion, sex, or national origin.

"d. The Lessor shall provide the following services and maintenance: (Here insert the complete list as contained in the approved Final Proposal.)

"Lessor Ву

Date Lessee

Date (3) Prohibited provisions. Lease clauses which fall within the classifications listed below shall not be included in any Lease.

(i) Confession of judgment. Prior consent by tenant to any lawsuit the landlord may bring against him in connection with the Lease and to a judgment in favor of the landlord.

(ii) Distraint for rent or other charges. Authorization to the landlord to take property of the tenant and hold it as a pledge until the tenant performs any obligation which the landlord has determined the tenant has failed to perform.

(iii) Exculpatory clause. Agreement by tenant not to hold the landlord or landlord's agents liable for any acts or omissions whether intentional or negligent on the part of the landlord or the landlord's authorized representative or agents.

(iv) Waiver of legal notice by tenant prior to actions for eviction or money judgments. Agreement by tenant that the landlord may institute suit without any notice to the tenant that the suit has been filed.

(v) Waiver of legal proceedings. Authorization to the landlord to evict the tenant or hold or sell the tenant's possessions whenever the landlord determines that a breach or default has occurred, without notice to the tenant or any determination by a court of the rights and liabilities of the parties.

(vi) Waiver of jury trial. Authorization to the landlord's lawyer to appear in court for the tenant and to waive the tenant's right to a trial by jury.

(vii) Waiver of right to appeal judicial error in legal proceedings. Authorization to the landlord's lawyer to waive the tenant's right to appeal on the ground of judicial error in any suit or the tenant's right to file a suit in equity to prevent the execution of a judgment.

(viii) Tenart chargeable with costs of legal actions regardless of outcome. Agreement by the tenant to pay attorney's fees or other legal costs whenever the landlord decides to take action against the tenant even though the court finds in favor of the tenant. (Omission of such clause does not mean that the tenant as a party to a lawsuit may not be obligated to pay attorney's fees or other costs if he loses the suit.)

(d) Termination of tenancy. The he will be entitled to resumption of housOwner shall be responsible for termina- ing assistance payments for the vacated tion of tenancies, including evictions. dwelling unit if: However, conditions for payment of (1) The unit is restored to Decent, housing assistance payments for any re- Safe, and Sanitary condition; sulting vacancies shall be as set forth in

(2) The Family is willing to and does § 1277.103 (e) (3) (ii).

move back to the restored dwelling unit; (e) Maintenance, operation and in- and spections.-(1) Maintenance and opera- (3) A deduction is made for the extion. The Owner shall maintain and op

penses incurred by the Family for both erate the project so as to provide Decent,

moves. Safe, and Sanitary housing and he shall

(g) Reexamination of family income, provide all the services, maintenance and

composition, and extent of exceptional utilities which he agrees to provide under medical or other unusual expenses. Rethe Contract, subject to abatement of

examination of Family income, composihousing assistance payments or other tion, and the extent of medical or other applicable remedies if he fails to meet

unusual expenses incurred by the Family these obligations.

shall be made by the Owner at least (2) Inspection. Prior to occupancy of annually (except that such reviews may any unit by a Family, the Owner and the

be made at intervals no longer than two Family shall inspect the unit and both

years in the case of elderly Families), shall certify, on the form prescribed by and appropriate redeterminations shall HUD, that they have inspected the unit be made by the Owner of the amount of and have determined it to be Decent, the Family contribution and the amount Safe, and Sanitary in accordance with

of the housing assistance payment, all the criteria provided in the prescribed in accordance with schedules and criteria form. HUD (or the PHA, as appropriate) established by HUD. will inspect or cause to be inspected each

(h) Overcrowded and underoccupied Contract unit and related facilities at

units. If HUD or the PHA, as the case least annually and at such other times

may be, determines that a Contract unit (including prior to initial occupancy of assisted under this part is not Decent, any unit) as HUD (or the PHA) may de

Safe, and Sanitary by reason of overtermine to be necessary to assure that

crowding, or that & Contract unit is the Owner is meeting his obligation to

larger than appropriate for the size of maintain the units in Decent, Safe, and

the Family in occupancy, housing asSanitary condition and to provide the

sistance payments with respect to such agreed upon utilities and other services.

unit will not be abated, unless the Owner HUD (or the PHA) will take into ac

fails to offer the Family a suitable unit count complaints by occupants and any

as soon as one becomes vacant and ready other information coming to its atten

for occupancy. In the case of an overtion in scheduling inspections.

crowded unit, if the Owner does not have (f) Units not decent, safe, and sani

any suitable units or if no vacancy of a tary. If HUD (or the PHA, as appropri- suitable unit occurs within a reasonable ate) notifies the Owner that he has

time, HUD (or the PHA) will assist the failed to maintain a dwelling unit in De- Family in finding a suitable dwelling unit cent, Safe, and Sanitary condition and and require the Family to move to such the Owner fails to take corrective action

a unit as soon as possible. The Owner within the time prescribed in the notice, may receive housing assistance payments HUD (or the PHA) may exercise any of for the vacated unit if he complies with its rights or remedies under the Con

the requirements of § 1277.103(e) (3) (i). tract, including abatement of housing

(i) Adjustment of allowance for utiliassistance payments, even if the Family ties and other services. HUD or the PHA, continues to occupy the unit. If, how

as the case may be, shall determine, as ever, the Family wishes to be rehoused in

part of its annual inspection and at such another dwelling unit with Section 8 assistance and HUD (or the PHA) does

other times as it deems appropriate, not have other Section 8 funds for such

whether an adjustment is required in the

and Allowance for Utilities

Other purposes, HUD (or the PHA) may use the abated housing assistance payments for

Services applicable to the dwelling units the purpose of rehousing the Family in in the project, on grounds of changes in another dwelling unit. Where this is utility rates or other change of general done, the Owner shall be notified that applicability to all units in the project.

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