Coordinating Move-out/Move-in Dates

Q Suppose an incoming resident wants to sign a lease for a unit at our site beginning March 1, and the prior site is moving the resident out on February 29. But the incoming resident wants “to sign in” at our site on February 26 to take possession of the unit and move in his belongings.

Typically, in this situation we would sign the lease on February 26 and charge the incoming resident rent at market rate until March 1. This is because a CGI inspector told us to do it that way, but I suspect this practice is wrong. Was the CGI inspector's instruction incorrect?

A Yes, the CGI inspector was incorrect, says A.J. Johnson, an affordable housing consultant and expert in HUD rules. The HUD Model Lease states that the “monthly rent is less than the market (unsubsidized) rent due on this unit,” so move-in should not be permitted prior to the date the subsidy will take effect. Charging market rent for the period February 26 to March 1 would violate the terms of the HUD Model Lease.

In this situation, you should follow the guidance outlined in HUD Handbook 4350.3, Change 2, Paragraph 9-12, E, says Johnson. It explains that owners are entitled to an assistance payment only for the actual number of days during the month that a resident occupies a unit.

Suppose you have a January 29 move-out from site #1 and a move-in on the same day to site #2. Site #1 would be entitled to subsidy through January 28. Site #2 will be entitled to subsidy beginning on January 29 and should not charge the resident market rent; the rent charged should be the properly calculated tenant contribution.

If a resident was charged market rent in this situation, the resident should be rebated the excess over the rent he was supposed to pay and the correct amount of subsidy should be requested from HUD. Owners should discuss with their local contract administrator or HUD whether to process the request as a correction to a prior payment request or as a special claim.

Insider Source

A.J. Johnson: A.J. Johnson Consulting Services, Inc., 3521 Frances Berkeley, Williamsburg, VA 23188; (757) 259-9920; ajjohn@cox.net.