The CA Quarterly Review (Spring 2021)

THE NEWS AND INFORMATION QUARTERLY FOR OWNERS AND AGENTS OF THE PERFORMANCE BASED CONTRACT ADMINISTRATION

Special Claims and the Proper Handling of PII

What is PII (Personally Identifiable Information)? It is information that can be used to identify an individual, either by itself or when combined with other information that is linked or able to be linked to a specific individual.

For example, your social security number is unique and sufficient by itself to identify you. Your full name may not distinguish you from other people with the same name, but when used in combination with your mother’s maiden name or your date of birth, it may be sufficient to identify you.

The following are examples of types of PII that may be present in tenant documents:

SS # Date of birth Mother’s maiden name

Medical information Financial information Bank account numbers

Passport numbers Criminal history Driver’s license number

Privacy is important at all times when handling PII. When submitting Special Claims to your CA for processing, HUD requires specific documentation which may contain PII. For example, a copy of the original Move-In 50059 for the tenant who has vacated the unit is required. The 50059 may contain, a Social Security Number, Date of Birth, Financial information, etc.

In order to safeguard this PII, Owner/Agents must redact all PII on documentation prior to transmitting it to your CA for processing. Redact is defined as: obscuring or removing text (sensitive information) from a document prior to publication or release. Common practices of redacting include: covering with tape or post-it note, white out, black marker line etc. As long as the PII is not visible to outside reviewers it is considered safe.

The appropriate handling and safeguarding of personally identifiable information is our responsibility, which is why this is considered an excellent management best practice!

Reporting Changes Between Annual Recertifications

To ensure that assisted tenants pay rents appropriate with their ability to pay, tenants must report changes of family income and composition for use in interim recertifications of family income and composition in accordance with HUD requirements.

This article provides a brief summary of interim certifications. The HUD Handbook 4350.3, Rev-1, Chg-4, Chapter 7, Section 2, provides a full description of the program requirements and procedures for performing interim recertifications when a tenant experiences a change in income or family composition between annual recertifications.

Tenant Responsibilities
Tenants must notify the O/A when:

• A family member moves out of the unit;
• The family proposes to move a new member into the unit;
• An adult member of the family who was reported as unemployed on the most recent certification or recertification obtains employment; or

The family’s income cumulatively increases by $200 or more per month.

Tenants may request an interim recertification due to any changes that may affect the TTP or tenant rent and assistance payment:

• Decreases in income (i.e. loss of employment, reduction in hours, loss /reduction of welfare income);
• Increases in allowances (i.e. medical expenses, child care costs); and
•  Other changes affecting the calculation of a family’s annual or adjusted income (i.e. family member turning 62 years old, becoming a full-time student or, becoming a person with a disability).

Tenants are not required to report when:

• A family member turns 18 years of age between annual recertifications.

1. Tenants must follow the requirements in their lease for reporting changes in the household income.
2. However, when a tenant turns 18 and has not signed the form HUD-9887, the O/A must not use the EIV income reports until the form is signed. Owners must address in their policies and procedures notification requirements and timeframes for tenants who turn 18 between annual recertifications to sign the consent forms HUD-9887 and HUD9887-A and/or lease. If the tenant fails to sign the consent form(s) the household is in non-compliance with their lease and assistance to, and the tenancy of, the household may be terminated.
   • Rent increases. O/A must implement the increase retroactive to the first of the month following the date that the action occurred.
   • Rent decreases. Rent decrease must be implemented effective the first rent period following completion of the recertification.

NOTE: Section 236 and BMIR cooperatives must enforce the interim recertification procedures only for members who executed occupancy agreements after February 15, 1984. Cooperatives may impose interim recertification requirements on members who executed occupancy agreements prior to February 15, 1984, only if the cooperative amended its by-laws to make such requirements binding on all members or a member voluntarily agreed to include such clauses in his/her occupancy agreement.

Owner Responsibilities
When processing an interim recertification, the O/A must ask the tenant to identify all changes in income, expenses, or family composition since the last recertification. The O/A only needs to verify those items that have changed.

Upon receiving a tenant request for an interim recertification, the O/A must process a recertification of family income and composition within a reasonable time, which is only the amount of time needed to verify the information provided by the tenant. Generally, this should not exceed 4 weeks.

The O/A must process an interim recertification if a tenant reports:

• A change in family composition;

1. The O/A must screen the proposed additional person(s), including live-in aides, for drug abuse and other criminal activity, including a State lifetime sex offender registration check.
2. The O/A must also obtain the new household member’s SSN, unless the household member does not contend eligible immigration status or is an individual age 62 or older as of January 31, 2010, and does not have a SSN but was receiving HUD rental assistance at another location on January 31, 2010. (See Chapter 3, Paragraph 3-9.D.7, Adding New Household Members.)
3. The O/A must apply additional owner established screening outlined in the property’s Tenant Selection Plan. In the case of live-in aides, the owner established screening criteria may also be applied, except for the criteria to pay rent on time.

• An increase in a family’s cumulative income of $200 or more a month;

1. If a tenant reports any other change along with an increase in income that does not increase the household’s cumulative income by $200 or more a month, the owner should not include the increase in income in processing the interim recertification

• An increase in allowances;
• A change in citizenship or eligible immigration status of any family members, or
• Most decreases in income except in the circumstance described in the next paragraph.

The O/A may refuse to process an interim recertification when the tenant reports a decrease in income only if the following apply:

• The decrease was caused by a deliberate action of the tenant to avoid paying rent (e.g. O/A receives documented evidence that a tenant quit a job in order to qualify for a lower rent).
• The O/A has confirmation that the decrease will last less than one month (e.g. O/A receives confirmation from the tenant’s employer that the tenant will be laid off for only two weeks).

1. If the O/A determines that the decrease in income will last less than one month, the O/A may choose, but is not obligated, to process an interim recertification.
2. The O/A must, however, implement this policy consistently for all tenants in the property who experience a decrease in income that will last for less than one month.

• Owners do not have to perform interim recertifications for individual tenants who are paying market rent.

The O/A may delay, but not refuse, to process an interim recertification if they have confirmation that a tenant’s income will be partially or fully restored within two months. Processing may be delayed only until the new income is known.

• When owners decide to delay processing, the following apply:

1. May require the tenant to pay the current amount of rent until the interim recertification is complete.
2. Must not evict the tenant for nonpayment of rent.
3. Must not charge the tenant a late fee for paying rent after the 5th of the month because the owner elected to delay processing, knowing the tenant has experienced a change in income.

• Once owners are able to verify the tenant’s new income, they must do as follows:

1. Recertify the tenant, as described in paragraph 7-12.
2. Retroactively apply any reduction in rent to the first day of the month after the date of the action that caused the decrease in income.
3. Notify the tenant in writing of any rent due for the period of delay. If the tenant fails to pay this amount within 30 days of notification, the owner may pursue eviction for nonpayment of rent.

The O/A should not recertify a tenant receiving welfare assistance in an as-paid welfare program when the Public Assistance Agency reduces the tenant’s shelter and utility allowance because it is greater than the tenant’s actual rent.

Processing Interim Recertifications
When processing an interim recertification, the O/A must conduct an interview with the tenant to obtain information on the reported change and review and ask if there have been other changes to family composition, income, assets, or allowances since the most recent certification. The O/A will obtain third party verification of the income or other facts reported as changed since the last recertification and maintain documentation in the tenant file. The EIV system must be used at the time a tenant reports a change in employment or income to determine if any information has been provided by the employer or if the tenant had unreported income. Changes in the tenant’s rent and assistance payment will be documented by obtaining required signatures on the HUD50059 and maintaining the original copy in the tenant file. The tenant information will be updated when the certification is transmitted to TRACS.

Effective Date of Interim Recertifications
The O/A must provide the tenant with written notice of the effective date and the amount of the change in TTP or tenant rent resulting from the interim recertification.

If the tenant complies with the interim reporting requirements, rent changes must be implemented as follows:

• Rent increases. The O/A must give the tenant 30 days advance notice of the increase. The effective date of the increase will be the first of the month commencing after the end of the 30-day period.
• Rent decreases. The rent change is effective on the first day of the month after the date of action that caused decrease. A 30-day notice is not required for rent decreases.

If the tenant does not comply with the interim reporting requirements as described in the HUD Handbook 4350.3, Chapter 7, Paragraph 7-10, most likely this results in a repayment agreement and the O/A initiates an interim recertification and implements rent changes as follows:

• Rent increases. The O/A must give the tenant 30 days advance notice of the increase. The effective date of the increase will be the first of the month commencing after the end of the 30-day period.
• Rent decreases. Rent decrease must be implemented effective the first rent period following completion of the recertification.

Updated HUD COVID-19 FAQ

Updated HUD COVID-19 FAQ
On April 26, 2021 HUD updated the COVID FAQ document.

Updated topics include:

• Eviction moratorium
• Vaccination Information
• CARES Act
• Financial and Audits

Click here to review the document that highlights the changes.

CDC Eviction Moratorium

The Centers for Disease Control and Prevention (CDC) extended its eviction moratorium, further preventing the eviction of tenants who are unable to make rental payments. The moratorium that was scheduled to expire on March 31, 2021 is now extended through June 30, 2021. You can read the revised order and the White House press release with additional resources.

The CDC has also provided an FAQ document to help navigate the eviction moratorium. The full FAQ can be found here and a summary of the document is outlined below.

What does the Order do?
The Order temporarily halts residential evictions of covered persons for nonpayment of rent during September 4, 2020, through June 30, 2021. This means that covered persons cannot be evicted for nonpayment of rent from any residential property in any U.S. state or U.S. territory where the Order applies.

Who is a “covered person” for purposes of the Order?
A “covered person” is any tenant, lessee, or resident of a residential property who provides to their landlord, the owner of the residential property, or other person with a legal right to pursue eviction or a possessory action, a declaration under penalty of perjury that:

1. The individual has used best efforts to obtain all available government assistance for rent or housing;
2. The individual either (i) earned no more than $99,000 (or $198,000 if filing jointly) in Calendar Year 2020, or expects to earn no more than $99,000 in annual income for Calendar Year 2021 (or no more than $198,000 if filing a joint tax return) (ii) was not required to report any income in 2020 to the U.S. Internal Revenue Service, or (iii) received an Economic Impact Payment (stimulus check); 3
3. The individual is unable to pay the full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, a layoff, or extraordinary out-of-pocket medical expenses;
4. The individual is using best efforts to make timely partial payments that are as close to the full payment as the individual's circumstances may permit, taking into account other nondiscretionary expenses; and
5. Eviction would likely render the individual homeless— or force the individual to move into and live in close quarters in a new congregate or shared living setting—because the individual has no other available housing options

How do I use this protection?
A tenant, lessee, or resident of a residential property must provide a completed and signed copy of the declaration, as described above, to their landlord, owner of the residential property where they live, or other person who has a right to have them evicted or removed from where they live. This may include the property managers and attorneys or agents for the landlord or owner, or other person with a legal right to carry out the eviction.

The declaration can be signed and transmitted electronically or by hard copy.

Each adult listed on the lease, rental agreement, or housing contract should complete the declaration. In certain circumstances, such as individuals filing a joint tax return, it may be appropriate for one member of the residence to provide an executed declaration on behalf of other adult residents party to the lease, rental agreement, or housing contract at issue. For more information about the declaration form, see below.

If you are eligible for protection under the CDC Order, do you still owe rent to your landlord?
Yes. The CDC Order does not cancel rent. You must still fulfill your obligation to pay rent and follow all the other terms of your lease and rules of the place where you live. You must use best efforts to make timely partial payments that are as close to the full payment as their individual circumstances permit, considering other nondiscretionary expenses.

This Order temporarily halts residential evictions. When the Order expires, consistent with the applicable landlord-tenant or real-property laws, you will owe your landlord any unpaid rent and any fees, penalties, or interest as a result of your failure to pay rent or make a timely housing payment during the period of the Order.

Do landlords have to make their tenants aware of the CDC order and Declaration?
The Order itself does not require landlords to make tenants aware of the Order and Declaration. But other relevant law, for instance the Fair Debt Collection Practices Act and the Federal Trade Commission Act, may require landlords, or their agents, to do so. Under these statutes, evicting tenants in violation of the CDC, state, or local moratoria, or evicting or threatening to evict them without apprising them of their legal rights under such moratoria, may violate prohibitions against deceptive and unfair practices. Landlords must otherwise comply with all requirements of the Order. Also, even if not legally required, landlords are encouraged to tell their tenants about the Order.

REACs Return to Operations Plan

HUD Notice 2021-01 was released on April 27, 2021, outlining REACs return to operations plan. Effective June 1, 2021, REAC will expand its inspections in support of the prioritized backlog of inspections. REAC Inspectors will follow CDC recommended guidance for travel, social distancing, the use of hand-sanitizer and the wearing of appropriate personal protective equipment (PPE) (e.g., wearing face masks and gloves) throughout an inspection.

This notice requires REAC Inspectors to adhere to the following procedures:

Pre Inspection Clarification

• REAC will advise the property at least 28 days prior to their inspection. In addition, the REAC Inspector will call and provide written notification to the Public Housing Agency (PHA) and/or property owner/agent 14 days prior to the inspection date. This additional temporary 28-day notification is being implemented to ensure the safety of the inspectors, residents, and property staff.
• Prior to the inspection, the REAC Inspector will ask if there are any known COVID-19 case (s) on the property. If positive case(s) are reported by the PHA or POA, the REAC Inspector shall:

1. Inform the Technical Assistance Center (TAC) (888) 245-4860 and call case number.
2. Send an email notification to Covid19inspectioninquiry@hud.gov.
3. A second call shall be made two (2) working days prior to the inspection. The REAC Inspector will re-confirm with the PHA or POA there are no known cases of COVID-19. If a positive case is reported, the REAC inspector shall follow the guidance listed in 1.1.1.
4. On inspection day, if a unit in the inspection sample has a known COVID-19 case, the REAC Inspector shall replace with an alternate unit as required by the inspection protocol.

• REAC Inspectors are required to inspect properties that are deemed as priority inspections by HUD until further notice.
• REAC Inspectors shall follow CDC’s recommendations on domestic travel during COVID19 for both Not Vaccinated and Fully Vaccinated persons.

Inspection Protocol Clarifications
Personal Protective Equipment (PPE) is required to be worn throughout all phases of the inspection process. At a minimum, a properly fitting mask and pair of gloves must be worn throughout the inspection, even if local requirements are less stringent. For details on acceptable masks, please utilize the CDC’s Mask Guidance. For property inspections with an elderly population, a face shield is also required.

Additional guidance and information on key COVID-19 items may be found below:

1. Proper procedures for wearing a mask can be viewed at the CDC website by clicking https:// www.cdc.gov/mmwr/volumes/70/wr/ mm7007e1.htm.
2. Review the CDC Guidance for InHome Service regarding Cleaning and Disinfecting Your Home
3. CDC Guidance on “When You Can be Around Others” provides guidance about the length of isolation periods for ill persons, and quarantine periods for persons exposed to COVID-19. Additionally, the Coronavirus Self-Checker is an interactive clinical assessment tool to assist individuals on deciding when to seek testing or medical care if they suspect they or someone they know has contracted COVID-19 or has come into close contact with someone who has COVID-19.
4. All inspectors must review the COVID-19 FAQs PPE/glove guidance (search gloves). Topics include how to properly dispose of gloves; how to disinfect gloves; and the proper use of alcohol-based hand sanitizer.

Before entering each unit for inspection, the REAC Inspector shall clean his/her inspection tools. After the cleaning procedures have been performed, the REAC Inspector shall dispose of his/her used gloves and cleaning material into an outside trash bag the inspector brings to the inspection. Afterwards, the inspector can close the trash bag and throw in the regular trash when the inspection is completed.

• A REAC Inspector shall avoid physical contact greetings
• A REAC Inspector shall keep indoor conversations focused on the inspection itself.
• A REAC Inspector shall follow CDC guidance on sanitizing hands, gloves, and equipment.
• Due to the number of people entering the unit for inspection, inspectors shall encourage PHA staff, owners/agents, and residents to open windows for ventilation.
• A REAC Inspector shall not dispose of any PPE in a dwelling
• Social Distancing - A REAC Inspector shall maintain social distancing throughout the entire inspection.

Post Inspection COVID-19 Guidelines

• Inspectors will conclude their inspection in accordance with the inspection protocol.
• After leaving the property, REAC Inspectors shall dispose of used PPE and cleaning material as outlined above.
• Inspectors should complete health checks for every post inspection to help make decisions on when to seek testing and medical care.

REAC will continue to collaborate with headquarters and field offices throughout CY 2021 to further identify program needs and evaluate the effectiveness of our methodology and inspection protocol. Moreover, REAC will perform ongoing, regular re-evaluations and validations of the properties receiving 28-day notices; and notify the inspector if the status of the scheduled inspection changes due to safety concerns. If a property is in an area that experiences an increase in cases after the notification, the REAC Inspector shall contact TAC for further guidance. When in doubt, inspectors are directed to follow CDC guidance. For questions regarding this notice, please contact the Technical Assistance Center (TAC) at 1-888-245-4860 or via email (REACTAC@HUD.gov).

Existing Tenant Search

REMINDER!

You must run the EIV Existing Tenant search prior to move-in. It identifies applicants who may be receiving subsidy at another Multifamily or Public and Indian Housing project. It is to be run at the time of applicant processing - you will want to run it before you establish an effective date for their 50059 but you don’t want to run it too far in advance so that the data may not be current by the time the move-in occurs.

You must establish written procedures for utilizing the EIV Existing Tenant Search in the Tenant Selection Plan. All screening criteria must be outlined in the TSP and consistently applied to all applicants

Spring Cleaning– Records Retention Requirements

Since more tenants move in during the spring and summer months, this gives property managers and landlords a perfect reason to conduct a thorough spring cleaning of files. This article will discuss retention requirements as well as purging of documentation.

Applicant File Retention – HUD Handbook 4350.3 Chapter 4, 4-22
Applicant Files must be maintained from the time the application is accepted, through the wait list period and for three years after the applicant is removed from the waist list.

• The current application must be retained as long as applicant is active on the waiting list.
• If the applicant was removed from the waitlist, then the application, supplement to application (HUD 92006), initial rejection notice, applicant reply, copy of the owners final response and all documentation supporting the reason for removal must be retained for three years.
• After an applicant moves in to the property the application and supplement to application (HUD 92006) must be maintained in the tenant file for the term of tenancy plus three years.

Resident File Retention – HUD Handbook 4350.3 Chapter 5, 5-23
Resident files (all documentation) must be maintained for the term of tenancy plus three years thereafter. Owners must keep the following documentation in the resident file:

• All original, signed HUD 9887s and 9887As;
• A copy of signed consent forms;
• A copy of the EIV Income Report, the HUD 50059 and any other documentation obtained supporting rent and income determinations; and
• Any third party verifications

Retention of EIV Reports – HUD Handbook 4350.3 Chapter 9, 9-14

• The Income Report, Summary Report and the Income Discrepancy Report along with any supporting documentation must be retained in the resident file for the term of tenancy plus three years.
• Any tenant provided documentation to supplement the Social Security Administration or National Database of New Hires data must be retained in the resident file for the term of tenancy plus three years.
• Results of the Existing Tenant Search must be retained with the application:
• If the applicant was not admitted, it must be retained with the application for three years.
• If the applicant was admitted, it must be retained in the resident file for the term of tenancy plus three years.
• The master file containing the New Hires Report, Identity Verification Reports, Multiple Subsidy Report and Deceased Tenant Report must be retained for three years

Once the retention period has expired for all of the above listed requirements, owners must dispose of the data in a manner that will prevent any unauthorized access to personal information (shred, burn, pulverize, etc.). It is recommended to review the above requirements once a year to ensure unnecessary documentation is not being kept and stored on-site.

Long term residents will have tenant files that can get a bit large and difficult to manage. Owner/ Agents in this situation may choose to move some of the older documents to storage to reduce file sizes and help with file management. However, it is recommended that all move-in documentation, along with the most recent five years’ worth of certifications, be kept in the main/primary file. If file documentation is removed from the property it must be kept in secure storage and the documentation cannot be destroyed. It is recommended to include this policy in the owner/agents written management procedures.

HUD 2021 Income Limits

HUD has published 2021 income limits Effective 4/1/2021. Owner/Agents must ensure that they utilize these income limits for files with certifications dated 4/1/2021 and after. Click here to see new limits.

Please keep in mind the RHIIP Listserv #293 - Timing of Income Eligibility Determinations - Clarification to Existing Policy Published on 12/19/2012.

The RHIIP guidance specifically states: if a unit becomes available and an applicant is selected from the waiting list, is processed for eligibility, and meets all eligibility requirements at the time of processing, the applicant is eligible to move-in to the project even if new income limits have been published.

Enjoy Spring and Stay Safe!