How to Comply with Federal Protections for Tenant Organizing in HUD-Assisted Housing

The penalties for violating a resident’s right to organize are stiff.

Residents have certain rights involving resident organizations. HUD has “Right to Organize” regulations that affirm and protect the rights of residents in privately owned HUD-assisted multifamily housing to organize their neighbors and collectively address issues in their buildings without management harassment and intimidation [24 CFR Part 245].

The Resident Rights and Responsibilities brochure that you’re required to distribute to each resident and HUD’s model lease also emphasize these rights. The model lease says you agree to let residents and resident organizers establish and operate a resident organization as required by HUD’s tenant participation rule. The rule requires owners and managers to recognize legitimate resident organizations and to listen to their concerns about certain management decisions and living conditions. It spells out the activities that you must allow residents and organizers to conduct so that they can organize and operate resident organizations at your site [par. 28].

Recently, HUD’s Office of Multifamily Housing Programs issued a reminder to owners and managers of private housing assisted by the Section 8 Project-Based Rental Assistance program that they must “reasonably make available the use of any community room or other available space appropriate for meetings to residents for meetings." HUD’s communication emphasized the important benefits to both tenants and properties when “tenants are allowed to participate in creating and maintaining a suitable living environment.”

We’ll go over how the regulations define a “legitimate” resident association and discuss the protected activities residents have the right to perform to establish, promote, and operate a resident organization. We’ll also cover owner duties with regard to resident organizing and provide examples of interference that violate a resident’s right to organize.

Legitimate Resident Organizations

Residents have a right to organize, and resident organizations have a right to represent their members. In public housing, resident participation regulations are found in Part 964 and require resident councils with specific bylaws and elections with PHA supervision. There’s no requirement that these councils be independent from the PHA, and resident councils can receive $15 per unit per year from the site budget for resident activities.

On the other hand, the regulations governing the right to organize at HUD multifamily sites found in Part 245 require owners and HUD to recognize a “legitimate tenant organization” and to give reasonable consideration to its concerns. HUD multifamily residents are not entitled to $15 per unit per year unless the building is converted through HUD’s Rental Assistance Demonstration (RAD) program.

A legitimate resident organization is defined in Part 245 of the regulations as a group established by the residents in a covered property that:

• Meets regularly;
• Operates democratically;
• Is representative of all residents in the development; and
• Is completely independent of owners, management, and their representatives.

The regulations are written to give tenants in an early-stage group protected rights to organize, as long as they meet these standards. It’s important to note that the regulations don’t require written bylaws, incorporation, or even elections, for a resident group to be protected by HUD and recognized by HUD and owners as a legitimate tenant association. In other words, resident organizations that are starting out might implement bylaws and elections later, but they aren’t required to be recognized by owners in HUD-assisted housing.

The sites that are covered by Part 245 include the following:

• Project-based Section 8 properties (unless the Section 8 contract is administered by a Public Housing Agency);
• Properties with HUD-insured or HUD-held mortgages assisted under Section 236 or Section 221(d)(3);
• Formerly HUD-owned properties that were sold with a Use Agreement to maintain them as low- or moderate-income housing;
• State or local housing finance agency properties that receive assistance under the Section 236 program;
• Properties that receive Enhanced Section 8 Vouchers;
• Section 202 properties for the elderly; or
• Section 811 properties for persons with disabilities.

Protected Organizing Activities

The right-to-organize regulations also provide a list of activities that HUD residents have the right to perform to establish, promote, participate in, and operate a resident organization. Residents and resident organizers don’t have to obtain the owner or manager’s permission to do these protected activities.

Owners must allow tenants and tenant organizers to conduct the following activities related to establishing a tenant organization [24 CFR 245.115]:

• Distribute leaflets in lobby areas, common areas, and to tenants’ doors;
• Initiate contact with tenants and conduct door-to-door surveys to establish a tenant organization;
• Post information on bulletin boards;
• Help tenants participate in tenant organization activities;
• Hold regularly scheduled tenant meetings in a space on site without management present;
• Develop responses to the owner’s request for rent increases, conversion to tenant-paid utilities, reducing the utility allowance, conversion of units to nonresidential use or condos, major capital additions, and loan prepayments.

Meeting Space Requirements

The rule also gives tenant organizations the right to hold regularly scheduled meetings on site premises. Owners and managers of covered sites must reasonably make available the use of any community room or other available space appropriate for meetings when requested by residents or the tenant organization for activities related to the operation or establishment of the tenant organization or to collectively address issues related to their living environment.

In addition, resident meetings must be accessible to persons with disabilities unless it’s impractical for reasons beyond the organization’s control. The rules also permit owners to charge a “reasonable, customary, and usual” fee, which HUD has previously approved, for the use of the space. This means that you can’t charge a higher fee to tenant organizations or charge them at all if you don’t charge other groups for the use of the space. An owner may elect to waive this fee and isn’t required to charge a HUD-approved fee. An owner doesn’t need HUD approval to waive this fee.

Resident Organizers

A tenant organizer is a tenant or non-tenant who assists in establishing or operating a tenant organization and who is not an employee or representative of the owner, managers, or buyer of the property [24 CFR.125]. Owners must allow tenant organizers to assist tenants in establishing or operating an organization.

You may, however, require that a tenant organizer who doesn’t live at the site be accompanied by a resident, unless the organizer is from a group with a HUD-funded VISTA Volunteer (VAHPP Project, NOT NAHT Safe & Healthy Homes) or a HUD grant to provide education and outreach to tenants, but only if your site has a written policy against canvassing and enforces it consistently. If you don’t have such a policy, or if you have a policy that permits canvassing, then you must give nonresident organizers the same access and canvassing privileges you give other nonresidents.

Penalties for Violating Right to Organize

HUD Handbook 4381.5, the Management Agent Handbook, Chapter 4, “Working with Residents,” gives examples of unacceptable actions by owners and management agents. Be sure to avoid these when dealing with residents and tenant associations. These unacceptable impediments include:

• Unreasonable denial of meeting space;
• Repeatedly sending management representatives to resident meetings when tenants have requested management not to attend;
• Evicting or threatening to evict, withholding entitlements, or otherwise penalizing tenants for organizing or asserting their rights;
• Attempting to buy tenants off by offering employment, transfers, rent abatements, repairs, or other benefits not available to all residents of the property;
• Attempting to form a competing organization under the control of the management company or owner; or
• Running for office or otherwise serving as a member of the resident organization.

The penalties for violating the resident participation rule are tough. Owners or agents who violate any of these provisions and interfere with residents’ right to organize may be sanctioned by HUD with one or more of the following:

• Debarment: Prohibited from conducting business with any federal agency for a period of time, usually three years.
• Suspension: This is a temporary action with the same effect as debarment.
• Limited Denial of Participation: This generally excludes a party from future participation in HUD programs. It usually lasts 12 months. It can also be limited to a certain geographic area.
• Civil Money Penalties: These are fines imposed on owners, principals of owners, and agents who knowingly and materially fail to comply with any of the provisions. The maximum fine is $42,500.

HUD Releases $10M Notice of Funding Opportunity

for Tenant Education and Outreach

HUD’s Office of Multifamily Housing Programs recently published a Section 514(f)(3) Notice of Funding Opportunity of $10 million for tenant education and outreach to serve residents living in eligible properties under the Section 8 Project-Based Rental Assistance program. According to HUD, this funding will support capacity-building efforts that “enable tenants to better engage with property management and help sustain safe, decent, and quality affordable housing.”

The Tenant Education and Outreach program aims to engage tenants in efforts to preserve eligible properties as affordable housing, and to provide tenants with information on their rights and responsibilities. It will assist tenants in their efforts to work productively with property management, hold management accountable for property conditions, improve management and oversight of these multifamily properties, and advocate for the preservation of affordability. Funding can be used for training and technical assistance as well as to help establish tenant organizations and support their ongoing operations. Applications must be submitted by Oct. 23, 2023, and more information can be found at www.hud.gov/program_offices/spm/gmomgmt/grantsinfo/fundingopps/tenanteducation.