HUD’s Office of Multifamily Housing issued Notice 2011-29, presenting the penalties that may be enforced if owners or managers of HUD-assisted private multifamily housing violate the tenant participation requirements found at Part 245 of the regulations. These regulations pertain to tenants at properties assisted with Project-Based Section 8, Section 202, Section 811, and a variety of other older programs. Part 245 does not pertain to public housing or housing choice vouchers.
The Notice echoes the statute, which “recognizes the importance and benefits of cooperation and participation of tenants in… contributing to the successful operation of projects,” and of tenants’ rights to organize.
Residents and advocates will find the Notice useful because it presents the Part 245 regulations in an easy-to-read format, elaborating on the rights of tenants to organize and the types of protected organizing activities. It also identifies specific actions by owners and managers that are impediments to the right to organize, as listed in Chapter 4 of HUD Handbook 4381.5 (REV-2).
What is new and made more explicit by the Notice is that a tenant or tenant organization may file a written complaint with the local HUD office. It also explains the types of penalties that may be applied for violating any of the tenant organizing provisions of Part 245. The most severe penalty is debarment, which is exclusion from conducting business with any federal agency, typically for three years. A suspension is similar to debarment, but for a shorter period of time. Another possible penalty is a Limited Denial of Participation (LDP), which is exclusion from participation in a specific HUD program area, generally for one year.
In addition, HUD may levy a fine of up to $37,500 for each offense. The actual amount of any fine will depend on a variety of factors, such as the gravity of the offense, an owner’s history of prior offenses, the degree of injury to the public, and the owner’s ability to pay.
Notice H 2011-29, a detailed follow up to and elaboration on Memoranda issued on June 18 and August 27, 2010, is at