(a) The PHA must not approve an assisted tenancy if the PHA has been informed (by HUD or otherwise) that the owner is debarred, suspended, or subject to a limited denial of participation under 2 CFR part 2424.
(b) When directed by HUD, the PHA must not approve an assisted tenancy if:
(1) The federal government has instituted an administrative or judicial action against the owner for violation of the Fair Housing Act or other federal equal opportunity requirements, and such action is pending; or
(2) A court or administrative agency has determined that the owner violated the Fair Housing Act or other federal equal opportunity requirements.
(c) In its administrative discretion, the PHA may deny approval of an assisted tenancy for any of the following reasons:
(1) The owner has violated obligations under a HAP contract under Section 8 of the 1937 Act (42 U.S.C. 1437f);
(2) The owner has committed fraud, bribery or any other corrupt or criminal act in connection with any federal housing program;
(3) The owner has engaged in any drug-related criminal activity or any violent criminal activity;
(4) The owner has a history or practice of non-compliance with the HQS for units leased under the tenant-based programs, or with applicable housing standards for units leased with project-based Section 8 assistance or leased under any other federal housing program;
(5) The owner has a history or practice of failing to terminate tenancy of tenants of units assisted under Section 8 or any other federally assisted housing program for activity engaged in by the tenant, any member of the household, a guest or another person under the control of any member of the household that:
(i) Threatens the right to peaceful enjoyment of the premises by other residents;
(ii) Threatens the health or safety of other residents, of employees of the PHA, or of owner employees or other persons engaged in management of the housing;
(iii) Threatens the health or safety of, or the right to peaceful enjoyment of their residences, by persons residing in the immediate vicinity of the premises; or
(iv) Is drug-related criminal activity or violent criminal activity; or
(6) The owner has a history or practice of renting units that fail to meet State or local housing codes; or
(7) The owner has not paid State or local real estate taxes, fines or assessments.
(d) The PHA must not approve a unit if the owner is the parent, child, grandparent, grandchild, sister, or brother of any member of the family, unless the PHA determines that approving the unit would provide reasonable accommodation for a family member who is a person with disabilities. This restriction against PHA approval of a unit only applies at the time a family initially receives tenant-based assistance for occupancy of a particular unit, but does not apply to PHA approval of a new tenancy with continued tenant-based assistance in the same unit.
(e) Nothing in this rule is intended to give any owner any right to participate in the program.
(f) For purposes of this section, “owner” includes a principal or other interested party.