Tenn. Comp. R. & Regs. 0770-01-05-.24 - OWNER RESPONSIBILITIES (24 C.F.R. 982.54(d)(5), (8); 982.153(b)(1); 982.306; 982.302(a)(8); 982.453)

(1) Owner Outreach (24 C.F.R. 982.54(d)(5); 24 C.F.R. 982.153(b)(1); 24 C.F.R. 982.153(b)(1)).

(a) Outreach to owners of decent, safe, and sanitary housing units is a critical part of the HCV Program, as the more owners participate, the wider the range of housing choices for families.

(b) The THDA continually invites owners to make dwelling units available for leasing by eligible families in areas outside of low income or minority concentration.

(c) Applicants and participants are referred to TNHousingSearch.org to search for available listings.

(d) Owner outreach outlines that:

1. Rental assistance promotes stable occupancy and reduces tenant turnover.

2. Tenant selection rests with the owner.

3. Housing Assistance Payments (HAP) are not considered late until the 5th business day of the month. HAP by the THDA is deemed received by the owner upon transmittal of payment by the THDA. The THDA is not required to pay a late payment penalty if HUD determines that the payment is late for reasons beyond the THDA's control. In addition, late payment penalties are not required if the THDA intentionally delays or denies payment as a remedy to an owner breach of the HAP contract.

4. The THDA does not interfere with the owner-tenant relationship, except to ensure compliance with HCV Program.

5. Rents may only be adjusted at the family's annual reexamination.

6. Owner's current tenants may be eligible to participate in the program.

7. Owners will be notified of program changes via periodic mailers and/or the THDA website. The notices will contain updates on federal, state, and THDA regulations.

(2) Owner Briefings. At the time of the initial leasing of a unit and periodically as needed, the basic features of the program are explained to the owner or manager by the THDA by informal briefings, usually by telephone. The purpose of the briefing is to assure successful owner participation in the program. Program requirements are explained and printed material is offered to acquaint the owner/manager with the opportunities available under the program.

(a) The briefing may include, but is not limited to, the following:

1. Owner rights and responsibilities under the terms of the lease and the HAP contract.

2. Tenant rights and responsibilities under the lease and the HCV Program.

3. The role of the THDA in administering the HCV Program.

4. How the rent is to be paid, the THDA portion and the tenant portion.

5. What information and assistance is available from the THDA.

6. Housing Quality Standards.

7. Fraud.

(b) For owners not able to attend a briefing at any time, the THDA supplies a Landlord Information Booklet with information pertinent to the program.

(3) Owner Selection. Owners do not have a right to participate in the HCV Program.

(a) Acceptance of the Owner by the THDA. The selection of a unit is the tenant's responsibility and any owner willing to participate in the program is accepted as long as:

1. The unit and rent meet the program requirements;

2. The owner is in good standing with the program;

3. There is no conflict of interest; and

4. The owner is not barred or disapproved according to any guidelines under the next section below.

(b) Disapproval of Owner (24 C.F.R. 982.306). The THDA will disapprove an owner from participation in the HCV Program if the owner:

1. Has a conflict of interest because of a position the owner or their agent occupies through employment, appointment, or election;

2. Has committed fraud or bribery or any other corrupt act in connection with any federal housing program;

3. Has violated an owner obligation under any Section 8 HAP contract (including contracts under the project-based Section 8 program or the HCV (tenant-based) program) or has a history of renting units that fail to meet State or local housing codes;

4. Has engaged in drug-related criminal activity or violent criminal activity;

5. Has broken a lease with a subsidized tenant without cause or other lease violation and not in accordance with HCV Program Guidelines;

6. Noncompliance with HQS and/or any HUD-required inspection, such as REAC inspections;

7. Has failed to comply with regulations, the mortgage or note, or the regulatory agreement for projects with mortgages insured by HUD or the THDA or loans made by HUD or the THDA;

8. Has engaged in threatening verbal or physical abusive behavior towards the THDA's staff; or

9. 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 threatens the right to peaceful enjoyment of the premises by other residents; threatens the health or safety of other residents, of employees of the THDA, or of owner employees or other persons engaged in management of the housing; 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 is drug-related criminal activity or violent criminal activity.

10. The owner has not paid State or local real estate taxes, fines, or assessments.

11. Other good cause as defined or directed by HUD.

(c) Disbarment of an Owner from the HCV Program. When an owner engages in the following activities that are in direct violation of a THDA policy or HUD HCV Program regulations, the housing assistance payment will be discontinued and the owner will be barred from participating in the program for a period of three (3) years:

1. Making an alternative or side rent agreement with the tenant that is not included in the lease, without the THDA's knowledge or consent;

2. Failing to notify the THDA that the tenant has vacated the unit and continuing to accept housing assistance payments from the THDA on behalf of the family;

3. Failing to make repairs;

4. Failing to submit required paperwork (leases, contracts, addenda) within the required timeframe;

5. Evidence of discrimination;

6. Evidence of documented harassment or abuse of tenants or the THDA's staff;

7. Knowingly allowing unauthorized household members to reside in the assisted unit;

8. Not following HUD and the THDA's guidelines in terminating the lease during the initial lease term and other subsequent terms;

9. Failing to make requisite notifications to the THDA in the time specified under this plan;

10. Terminating a lease or evicting an assisted family when the THDA is unable to approve a rent increase either because the rent requested is not found by the THDA to be comparable to other similar, unassisted units or when the THDA is unable to approve a rent increase due to funding restrictions;

11. Committing fraud in any federal or state program. However, if the owner has knowingly committed fraud, but returns the overpaid HAP and repays the THDA in full, the owner will be allowed to continue in the program.

12. Breach of the HAP Contract under 24 C.F.R. 982.453. If the owner has violated any obligation under the HAP contract for the dwelling unit, including the owner's obligation to maintain the unit in accordance with the HQS.

(i) If the owner has violated any obligation under any other HAP contract under Section 8 of the 1937 Act (42 U.S.C. § 1437f).

(ii) For projects with mortgages insured by HUD or loans made by HUD, if the owner has failed to comply with the regulations for the applicable mortgage insurance or loan program, with the mortgage or mortgage note, or with the regulatory agreement; or if the owner has committed fraud, bribery or any other corrupt or criminal act in connection with the mortgage or loan.

(iii) If the owner has engaged in drug-related criminal activity.

(iv) If the owner has committed any violent criminal activity.

(v) The PHA rights and remedies against the owner under the HAP contract include recovery of overpayments, abatement or other reduction of housing assistance payments, termination of housing assistance payments, and termination of the HAP contract.

(4) Owner Responsibilities. Failure to fulfill these requirements will result in the withholding, abatement, or termination of housing assistance payments or the disbarment of the owner from the HCV Program. The owner must:

(a) Comply with all requirements contained in the owner lease and HAP Contract.

(b) Perform routine management functions, including the screening and selection of tenants, maintenance of the assisted unit, rent collection, and handling of tenant relations and issues.

1. Screening and Selection of Tenants. The THDA has no liability or responsibility to the owner or other persons for the family's behavior or suitability for tenancy. It is the responsibility of the owner to determine the suitability of prospective tenants. Owners are encouraged to screen applicants for rent payment history, eviction history, damage to units and other factors related to the family's suitability as a tenant.

2. Maintenance of the Unit. The Owner shall maintain the unit at all times in accordance with HUD's Housing Quality Standards.

3. Rent Collection. The Owner shall collect only the amount of rent from the tenant that is specified in the lease and the HAP Contract or in accordance to any interim adjustment approved by the THDA. Any charges in addition to the monthly rent must be stated in the lease or lease addendum.

4. Owner and Tenant Relations and Issues. The legal relationship between the owner and tenant is defined by the lease and any addenda. The THDA is not a legal party to the lease. Therefore, owners are responsible for managing their relations with the assisted tenant and any problems that may arise. The THDA will not mediate between the two parties, but will only be involved to the extent necessary to administer the program.

(c) Submit proof of ownership or proof of a management agent agreement.

(d) Furnish a social security number or tax identification number and complete a W-9 form.

(e) Promptly notify the tenant and the THDA prior to the commencement of eviction proceedings in accordance with HUD requirements and state and local laws.

(f) Notify the THDA in writing immediately upon knowledge of the tenant vacating the unit. Owners are not eligible to receive rental payments if the tenant is not living in the unit. The HAP Contract automatically terminates at the end of the month the tenant vacates the unit. If any rental payments are received by the owner for the month following the month the tenant vacates the unit, such payments must be returned to the THDA.

(g) Notify the THDA in writing immediately upon the unit being placed under receivership or in a foreclosure proceeding.

(h) Notify the THDA and tenant in writing at least sixty (60) days prior to the lease anniversary date if a rental increase is requested for the next year or if other lease revisions are requested and if applicable submit the new lease to the THDA for approval.

(i) Assure that utilities are connected to the unit at all times if paid for by the owner.

(j) Provide the owner's current residential address, not P.O. Box.

(k) Owners must notify the THDA in writing of any changes in mailing addresses or ACH (direct deposit) account numbers. The THDA requires thirty (30) days from the date the THDA received the notification to process the changes.

(5) Information to Owners (24 C.F.R. 982.307(b); 982.54(d)(7)). In accordance with HUD requirements, the THDA must furnish prospective owners with the family's current address and prior address as shown in the THDA's records and, if known, the name and address of the landlord at the family's current and prior address. An exception will be made to this requirement if the family's whereabouts must be protected due to domestic abuse or witness protection.

(6) Making Housing Assistance Payments to Owners.

(a) Once the HAP Contract is executed, the THDA begins processing payments to the owner. The HAP Contract allows the THDA a maximum of sixty (60) days to process the initial HAP payment. If the THDA does not meet the 60-day deadline for the initial payment, a late fee may be applicable.

(b) Once the initial payment is processed, payment will be made to the owner on the first working day of the month in which the payment is due. Monthly Housing Assistance Payments are not considered late until after the 5th of the month.

(c) Late Fees. If the owner does not receive the HAP by the fifth business day of the next month due to a delay caused by the THDA, the payment will be considered late and the THDA will be responsible for a late payment penalty if requested by the owner within thirty (30) calendar days.

1. If the THDA can verify that the payment was processed appropriately, a late fee will not be allowed.

2. The THDA is not responsible for mail delays or other delays that are beyond the control of the THDA.

3. Owners must notify the THDA in writing of any changes is mailing addresses or ACH (direct deposit) account numbers. The THDA requires thirty (30) days from the date the THDA received the notification to process the changes. Therefore, the THDA is not responsible for delays in payments when an owner changes their mailing address or ACH (direct deposit) account number, and the THDA is not notified promptly.

4. The date of the check and the postmark date will be used to determine if the payment was mailed late or if the check was delayed due to the postal service.

5. If the THDA is responsible for the late fee, the fee will equal $5.00 for each day the payment is delayed beyond the 5th working day, not to exceed 10% of the monthly HAP payment, as per the HAP Contract.

6. Checks lost in the mail will not be replaced by a duplicate check until a cancel payment is in place, and the State Treasury confirms the original check cannot be cashed.

7. Owners are required to set up ACH payments timely, and the THDA may terminate a HAP contract for an owner who fails to set them up.

Notes

Tenn. Comp. R. & Regs. 0770-01-05-.24

Original rule filed May 16, 1980; effective June 30, 1980. Repeal filed September 28, 2004; effective December 12, 2004. Repeal and new rule filed June 4, 2015; effective September 2, 2015. Amendments filed October 5, 2018; effective January 3, 2019. Amendments filed June 11, 2024; effective 9/9/2024.

Authority: T.C.A. §§ 13-23-104 and 13-23-115(18), 42 U.S.C. § 1437, and 24 C.F.R., Part 982.