Reissuance Not Necessary for Leases Without OMB Approval Number

December 24, 2008

On Sept. 18, 2008, HUD clarified its position on the use of the new model lease, after generating a storm of controversy by requiring that all leases contain an Office of Management and Budget (OMB) approval number and expiration date, which is currently 2011.

HUD announced that owners and managers of Section 8 sites may remove the OMB approval number and expiration date from HUD model leases. Consequently, HUD eliminated the problem that had raised an outcry—namely, that substitution of the new model lease would require all residents to sign reissued leases.

On Sept. 18, 2008, HUD clarified its position on the use of the new model lease, after generating a storm of controversy by requiring that all leases contain an Office of Management and Budget (OMB) approval number and expiration date, which is currently 2011.

HUD announced that owners and managers of Section 8 sites may remove the OMB approval number and expiration date from HUD model leases. Consequently, HUD eliminated the problem that had raised an outcry—namely, that substitution of the new model lease would require all residents to sign reissued leases.

HUD clarified its position in a memo to multifamily field offices, says Linda Kornegay, director of HUD's rental housing integrity and improvement project (RHIIP). The memo was made available though an RHIIP ListServ.

The memo indicates that owners and managers who use leases posted on HUDCLIPS are to use the model lease on which an OMB approval number and expiration date are stamped. This is the lease to use for applicants who have been accepted for units and for current residents, Kornegay says. However, when a change occurs to the OMB expiration date, owners and managers must reissue leases.

HUD's clarifying memo indicates also that owners and managers using leases that had been modified prior to the new model lease may use the modified leases if the local contract administrator or HUD's multifamily office approves the modifications.

In addition, the memo says that a local contract administrator or staff at HUD's multifamily office is prohibited from sanctioning owners or managers if a lease is found not to contain an OMB approval number and expiration date. As a result, no citation or fine will be issued to an owner or manager for using a lease containing modifications approved before the release of the new model lease or a lease that does not have an OMB number or expiration date.

Nevertheless, the memo directs local contract administrators and HUD multifamily office staff to cite owners and managers for standard violations, such as not using the correct model lease or modifying a model lease without prior approval from HUD.

EDITOR'S NOTE: HUD's new model lease forms were posted on HUDCLIPS on May 15, 2008. The forms make no major changes to the HUD model lease, but add an OMB approval number and expiration date. On May 19, 2008, HUD issued implementation guidance on the new model lease forms in a “frequently-asked-question” (FAQ) on a Listserv for the RHIIP. RHIIP archives are available online by going to Listserv-Multifamily RHIIP Tips on the HUD Web site at http://www.hud.gov/offices/hsg/mfh/rhiip/mfhrhiip.cfm.

Insider Source

Linda Kornegay: Director, Rental Housing Integrity Improvement Project, HUD, 451 7th St. SW, Washington, DC 20410; (202) 708-1112; Linda.Kornegay@hud.gov.

 

Search Our Web Site by Key Words: model leases; OMB approval; OMB expiration date

Topics