HOW TO SUCCEED AT YOUR MANAGEMENT AND OCCUPANCY REVIEW (MOR)

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2 HOW TO SUCCEED AT YOUR MANAGEMENT AND OCCUPANCY REVIEW (MOR) Raising The Bar In Cmpliance Presented By: Rse Dubin Natinal Husing Cmpliance MAHMA Reginal Affrdable Husing Cnference 2014

3 AN EXAMPLE OF EVERYONE S GOALS Natinal Husing Cmpliance Raising The Bar In Cmpliance

4 OVERVIEW Frequency f Reviews Rewards and cnsequences HUD frm 9834 The three parts f a MOR: I. Desk Review II. III. On-site Review Summary Reprt Industry Best Practices fr Owners, & Agents and Managers 4

5 FREQUENCY OF MANAGEMENT REVIEWS PBCA s and CA s are waiting fr HUD t determine if MOR s will be perfrmed n an annual basis r risk based. If risk based is chsen, the MOR s perfrmed will be based n the last MOR rating: Unsatisfactry/Belw Average Every -year Satisfactry - Every Other Year Abve Average & Superir - Every Three 3 Years (Anticipated) Each Year Full Mark-2-Market 5

6 FREQUENCY OF MANAGEMENT REVIEWS Handbk , Chapter 6, Par. 6-4 Cnducting Management Reviews: After a prject cmmences ccupancy, and fllwing a change in prject wnership/management; When physical, financial r management prblems exist; When deficiencies have been identified at ther prjects f the same wner/management agent; Prir t granting preliminary apprval f a transfer f physical assets (TPA) prpsal; and, As necessary t mnitr the wner/agent s implementatin f any required crrective actins r prject imprvement effrts. 6

7 REWARDS OF COMPLIANCE N additinal actin is needed if there are n findings. Mre cnfident emplyees. Pssible lwer repair & maintenance csts based n gd management skills. Ability t cntinue participating in the prgram. Ultimately, (hpefully) mnetary gains due t Superir prperty management practices and physical cnditin. 7

8 CONSEQUENCES OF NON-COMPLIANCE HUD Administrative Actins: Subsidy assistance abatement r suspensin. Sanctins e.g. lss f future participatin. Replacement f the management agent. Flag in Active Partners Perfrmance System (APPS). Referral t Departmental Enfrcement Center (DEC). 8

9 THE PURPOSE OF FORM 9834 HUD Frm 9834 Implementatin by : Develped t ensure cmpliance with terms & cnditins f HUD agreements. Determines the level f cmpliance with HUD s business agreement. Designed t assess management & versight f MF husing prjects. Mnitrs fr HUD s Office f Fair Husing & Equal Opprtunity (FHEO). 9

10 THREE PARTS OF FORM 9834 The Management Review cnsists f three parts: I. Desk Review II. III. On-Site Review, which includes: Addendum A Tenant File Review Wrksheet. Addendum B FHEO (Sectins I, II & III). Addendum C Dcument t be made available. Addendum D State Lifetime Sex Offender Statistics. The Summary Reprt 10

11 PART I DESK REVIEW 11

12 DESK REVIEW Can be cmpleted prir t cnducting the n-site review r while n site: Prvides a well-runded view f the prject. Identifies ptential issues r prblems. Includes a: Review f Financial Assessment (FASS) & Scre, (HUD nly). Review f plicy & prcedures dcuments. Review f REAC inspectins. Review f prir MORs. 12

13 REVIEW OF DOCUMENTS The fllwing dcuments can be requested and reviewed prir t MOR being cnducted Tenant Selectin Plan (TSP) Applicatin & attachments (HUD Frm 92006) Current lease & addendums Huse Rules/Handbk Pet Rules EIV plicy & prcedures *Affirmative Fair Market Husing Plan (required in sme states) 13

14 TENANT SELECTION PLAN (TSP) TSP must be develped accrding t HUD s guidance t include required and recmmended cntents. TSP shuld be reviewed at least annually. HUD r Cntract Administratr des nt apprve the TSP. TSP must be available t tenants, applicants and the public. 14

15 TENANT SELECTION PLAN (TSP) TSP s required cntents accrding t HUD : 1. Prject s eligibility requirements 2. Citizenship Requirements 3. Scial Security Requirements 4. HUD Incme limits 5. Prcedures fr taking applicatins/pre-applicatins and selecting frm the waiting list 6. Occupancy Standards 7. Unit Transfer Plicies 8. Plicies t cmply with 504 f the rehabilitatin act, fair husing act, and civil rights act 15

16 TENANT SELECTION PLAN (TSP) TSP s required cntents accrding t HUD : 9. Plicies fr pening & clsing the waiting list. 10. Plicies fr applying Vilence Against Wmen s Act (VAWA) (VAWA) plicies. 11.Preferences and applicatin f preferences. 12. Other allwable applicant screening criteria. 13. EIV Existing Tenant Search. 14. Incme Targeting. 15. Prcedure fr rejecting ineligible applicants. 16

17 AFHMP (FORM 935.2A) AFHMP is nt required f prjects built befre February 1972, unless substantially rehabilitated. A new frm HUD 935-2A was psted t HUDCLIPS n Must be apprved by HUD r State Finance Agency. O/A must cmply with the requirements f AFHMP. O/A must be able t prvide dcumentatin f marketing activities cnsistent with the AFHMP. O/A must review AFHMP: At least every 5 years, r When cmmunity develpment jurisdictin s cnslidated plan is updated. 17

18 APPLICATION & ATTACHMENTS An Applicatin is required fr all husehlds, and must be signed and dated by tenant and time and date psted by management when received. HUD r the CA des nt apprve applicatins. HUD des nt have a specific applicatin frmat; hwever, a list f the fllwing infrmatin must be requested n the applicatin: Supplement t Applicatin fr Federally Assisted Husing, HUD frm Must have language regarding state lifetime sex ffender registratin. Request all states lived in fr all Husehld members. Space fr disclsure f Scial Security Number fr all husehld members except thse wh d nt cntend eligible immigratin status. Infrmatin n applicants 62 r lder as f January 31, 2010 wh d nt have a SSN, if they were receiving assistance as f January 31,

19 HUD RECOMMENDED DATA Data that shuld be requested n the applicatin: Husehld characteristics f each HH member. General husehld cntact infrmatin. Identificatin f apprved preferences. Surces and estimates f husehld incme & assets. Citizenship declaratin. Marketing infrmatin; hw applicants heard abut the prperty. Screening infrmatin cnsistent with the TSP. 19

20 CURRENT LEASE Use HUD Mdel Lease under yur specific Sec. 8 prgram. May be mdified nly with prir apprval frm HUD. Management shuld be sure t keep the apprval letter/ frm HUD. Cperatives may use HUD apprved Occupancy Agreements in lieu f the HUD Mdel Lease. Required attachments must be kept in the tenant file with the lease. The landlrd, head f husehld, spuse, c-heads, and all adult members f the husehld must sign and date the lease. Initial term f the lease must be the lesser f ne year, r the remaining term f the HAP cntract. 20

21 REQUIRED ATTACHMENTS The fllwing attachments t the lease are required: HUD frm 50059/A signed/dated by landlrd & tenant. Mve-in Inspectin signed and dated by landlrd and tenant. Huse rules, if they have been develped by the landlrd. Lead-based paint disclsure frm, if applicable. VAWA Lease Addendum. Pet rules, if applicable. Live-in aide addendum, if applicable. 21

22 EIV POLICY & PROCEDURES EIV plicy & prcedures are required by HUD fr the site staff t fllw when: Using EIV as 3rd. party verificatin f emplyment & incme, and Using ther EIV reprts. T ensure that applicants and tenants are: Treated fairly, and Nt being discriminated against. Des nt have t be apprved by HUD but is reviewed at time f/r prir t MOR. 22

23 EIV POLICY & PROCEDURES EIV plicy & prcedures recmmended cntents are: Prcess fr btaining a signed HUD frm 9887/A fr family members turning 18 between certificatins. Plicy indicating that EIV incme reprt will be accessed fr tenants within 90 days after mve-in. A list f all EIV reprts, and when they will be run. Plicy fr running the n-incme reprts at events ther than recertificatin. Prcedure fr using EIV as 3rd. party verificatin. Prcedures regarding authrized use f EIV. 23

24 HOUSE RULES Huse rules are beneficial fr identifying allwable and prhibited behavir fr yur tenants. Huse rules are develped by the wner. HUD des nt need t review r apprve but they are reviewed by HUD/PBCA at MOR t determine what is reasnable. Must be cnsistent with HUD requirements fr perating HUD subsidized prjects and Fair Husing Must nt infringe n tenants civil rights. 24

25 PET RULES /POLICY Pet Rules in HUD apply nly t elderly and disabled husehlds. Family husing is nt required t allw pets. They d nt apply t assistance animals and their wners. Must nt cnflict with applicable state r lcal laws r regulatins. Must include mandatry rules regarding: Inculatins and Sanitary standards Pet restraints Registratin Ntificatin t pet wners fr failing t register Assistance animals are exempt frm the pet depsit. 25

26 PRIOR MORS Review at least the tw mst recent MOR t: Understand the issues, cnditins and challenges facing the prject. Ensure that findings were in fact addressed and crrected. Prcedures are crrected, currently in place, and are being fllwed. Be n the lkut fr reccurring findings. Thse may shw up in the Summary Reprt as Repeat Findings. 26

27 INDUSTRY BEST PRACTICES Develp methds t btain the latest infrmatin n HUD prgram changes thrugh expert trainers and ffered webinars. Review yur internal plicy and prcedures dcuments at least annually, making sure all changes are cnsistently disseminated thrughut yur prtfli f prperties Seek legal and industry expert cnsultants as necessary. Receive HUD Listserv s Subscribe t industry relevant newsletters. 27

28 PART II ON-SITE REVIEW 28

29 ON-SITE REVIEW Categries 1. General Appearance & Security 2. Fllw-up and Mnitring f Prject Inspectins 3. Maintenance & Standard Operating Prcedures 4. Financial Management/Prcurement 5. Leasing & Occupancy 6. Tenant/Management Relatins 7. General Management Practices 29

30 APPEARANCE & SECURITY General appearance includes a review f: Prject s exterir & cmmn areas fr cleanliness and damage. Areas f cncerns are; grunds, landscaping, hallways, stairways, laundry rms, etc Security includes frequency f events such as break-ins, vandalism, theft, assaults, arrests & drug activities. Crrective actins and measures taken by the O/A, and Whether rents were increased due t the cst f O/A s actins and ther security measures. 30

31 PROJECT INSPECTIONS Fllw-up n REAC / EH&S t determine if: EH&S deficiencies have been crrected and dcumented accrding t the O/A s certificatin. All ther deficiencies nted n the REAC inspectin have been crrected, r if there is a schedule fr cmpleting deficiencies within a reasnable timeframe. There are repetitive r systematic prblems. There is a Lead-Based Free certificatin fr prjects cnstructed prir t

32 MAINTENANCE & PROCEDURES Determine if the prject has a/an: Schedule fr preventive maintenance & servicing. Inventry system t accunt fr tls, equipment, supplies and keys. Written prcedures fr; 1. inspecting units (at least annually) using a detailed checklist. 1. cmpleting wrk rders, & 2. handling emergency wrk rders. Dcumentatin by unit t track the date f purchase, manufacturer, mdel & serial numbers fr appliance purchases. 32

33 MAINTENANCE & PROCEDURES Determine the number f: Vacant units. Units ready fr ccupancy. (Cntinued) Units nt ready fr ccupancy. Identify factrs cntributing t the vacancy prblems. What actins are being taken by the O/A t fix vacancy prblems. e.g. are yu asking HUD fr waivers in extenuating circumstances? Are yu actively seeking new HUD/State prgrams t assist with filling vacancies? 33

34 FINANCIAL MANAGEMENT This categry is cnducted by HUD & carries 25% weight f the MOR verall rating. Review the fllwing areas: Budget management Cash cntrls Cst cntrls Prcurement cntrls Accunts receivable/payable Accunting & Bkkeeping 34

35 HUD FORM Supplement t Applicatin HUD Frm : Must be presented t all new applicants. Applicants are nt required t fill ut; hwever Applicants must check the bx, and sign the frm. May be used t cntact an individual r rganizatin t assist t prvide any delivery f services r special care t applicants wh becme tenants and t assist with reslving any tenancy issues arising during tenancy. Best Practices: Gives t all yur tenants t fill ut Update infrmatin annually 35

36 Review t determine if: LEASING & OCCUPANCY Applicatin Prcessing & Tenant Selectin (Cntinued) There is a written tenant selectin plan that cntains all f the required infrmatin The prject maintains a waiting list. Applicants are selected frm the waiting list in the prper rder. Are yur preferences clearly identified? There is dcumentatin t demnstrate cmpliance with incme targeting 30%), including marketing & utreach effrts. 36

37 Review t determine if: LEASING & OCCUPANCY Applicatin Prcessing & Tenant Selectin (Cntinued) Advertising prgram cmplies with the existing Affirmative Fair Husing Marketing Plan (AFHMP). The fair husing lg is included in published advertising material. The fair husing sign is psted in the rental ffice. 37

38 LEASING & OCCUPANCY Leases & Depsits Review t determine if: Mdificatins have been made t the mdel lease, & if HUD apprval was btained. Other charges are assessed in additin t rent & security depsit & if HUD apprval was btained. Plicy n late fee assessment in cmpliance. Damages by tenants are charged t the tenants. 38

39 Review t determine if: LEASING & OCCUPANCY Evictins & Terminatin f Assistance Tenants are ntified f evictins r terminatins accrding t HUD rules. Evictin r terminatin is pursued fr all sex ffenders admitted errneusly after Addendum-D identifies evictins f sex ffenders in the last 12 mnths. 39

40 Review t determine if: LEASING & OCCUPANCY Tenant File Security Tenant files and files cntaining EIV reprts are lcked and secured. Dcumentatin relating t VAWA cases are kept in a separate file in a secure lcatin frm ther tenant files. Access t tenant files is limited t authrized staff nly. Tenant files retentin and dispsal are carried ut accrding t HUD rules. 40

41 LEASING & OCCUPANCY Summary f Tenant File Review Review tenant files t determine if: Files are rganized & cntain all required back-up dcuments t demnstrate eligibility. Applicatins are in the files; signed & dated by the applicant. Screening is dne accrding t prject s TSP. Unit size is apprpriate with husehld cmpsitin. Husehlds are eligible at mve-in. Have yu received , Change 4 training? 41

42 LEASING & OCCUPANCY Summary f Tenant File Review (Cntinued) Review tenant files t determine if: The crrect mdel lease is being used. Leases & apprpriate addendums are signed & dated by all required parties. The crrect amunt f security depsits is cllected, (refer t HUD , Fig. 6-7 n Pg. 6-34). If a mve-in file had a crrectins, was the security depsit changed? 42

43 LEASING & OCCUPANCY Summary f Tenant File Review (Cntinued) Review tenant files t determine if all acknwledgements are signed, & cpies f dcuments indicate receipt f the fllwing: HUD-9887 Fact Sheet Hw Yur Rent Is Determined Lead-Based Paint Disclsure (if applicable) Resident Right & Respnsibilities Brchure EIV & Yu Brchure 43

44 LEASING & OCCUPANCY Certificatin/Recertificatin Activities Review tenant files t determine if: Recertificatin ntices are issued accrding t HUD requirements. Certificatins are cmpleted n time, and 30-day ntices were given fr rent increases. All verificatins are cmpleted & dcumented, within 120 days, f receipt. EIV incme reprts are used as third party verificatins. Incme & assets are calculated crrectly. 44

45 LEASING & OCCUPANCY Certificatin/Recertificatin Activities (Cntinued) Review tenant files t determine if: Deductins are crrect & allwable. Infrmatin n the certificatin agrees with verified infrmatin. Third party verificatin is used when EIV reprted incme is disputed. Apprpriate actin is taken t reslve incme discrepancies, and dcumented. Repayment agreements are in accrdance with HUD requirements. 45

46 LEASING & OCCUPANCY Certificatin/Recertificatin Activities (Cntinued) Review tenant files t determine if: Ntices fr rent increase are prvided t tenants. Crrect grss rents & utility allwance are being used. Utility reimbursement checks are distributed t tenants within five (5) business days frm receipt f subsidy payment. 46

47 LEASING & OCCUPANCY Mve-in & Mve-ut Files Review tenant files t determine if: Crrect incme limits are used at mve-in. Mve-in/mve-ut inspectins are in the files, signed/dated. Mve-in files after indicate that EIV existing tenant search is being utilized fr all husehld members. This includes children. Tenants submitted a written ntice t vacate. Security depsits refunded in 30 days r as required by state law. Tenants are prvided a list f charges and billed when charges exceed security depsits. 47

48 LEASING & OCCUPANCY Applicatin Rejectin Files Review tenant files t determine if: Applicants are denied accrding t prject s TSP. Rejectin letters prvide; 1. the reasn fr rejectin, 2. applicants right t appeal within 14 days, and 3. persns with disabilities the right t request reasnable accmmdatin. Appeals are reviewed by smene ther than the riginal persn wh made the riginal decisin. Decisins are made within 5 days f the meeting. 48

49 TENANT MANAGEMENT RELATIONS Tenant Cncerns Review the plicy & prcedures t determine if: Prcedures are in place t reslve tenants cncerns. Prcedures adequately cver appeals. The prject has an active tenant rganizatin. Tenants invlvement in prject peratins is encuraged. 49

50 GENERAL MANAGEMENT PRACTICES General Operatins Review general peratins t determine if: Staff is able t adequately perfrm management and maintenance functins. Cmplaints are reslved satisfactrily. There is a prcess t implement HUD changes. A frmal nging training prgram exists. 50

51 INDUSTRY BEST PRACTICES When reviewing the AFHMP (every 5 years), the census shuld be reviewed t determine if demgraphics have/nt changed. Demgraphics shuld always be printed and retained as evidence f n changes. Mve-in inspectins must be signed/dated by the tenant and management. Even if the mve-in frm is dated n tp, the signature must be dated. Mdify yur frm if necessary t include space fr the date. Huse rules shuld be signed/dated by the tenant. Include the date when the huse rules were last updated n the bttm f the huse rules. This ensures that the tenant has received the mst current versin. 51

52 INDUSTRY BEST PRACTICES (Cntinued) Be sure that yur waiting list can be easily fllwed fr anyne reviewing it. Make sure that yur cmments sectin clearly explains what actins were taken and, if smene was hused prir t the persn befre them n the waiting list. Dcument why this ccurred. Review yur TSP at least annually and updated it as needed, r when HUD changes require that new data is included. 52

53 PART III SUMMARY REPORT 53

54 SUMMARY REPORT MOR Categries & Weighted Percentage The MOR cnsists f seven (7) categries and each is assigned a weighted percentage f the verall rating: Categry Percentage f Overall Rating 1. General Appearance and Security 10% 2. Fllw-up and Mnitring f Prject Inspectins 3. Maintenance and Standard Operating Prcedures 10% 10% 4. Financial Management/Prcurement 25% 5. Leasing and Occupancy 25% 6. Tenant/Management Relatins 10% 7. General Management Practices 10% Ttal 100% 54

55 SUMMARY REPORT Perfrmance Indicatrs Perfrmance indicatrs are ratings assigned t each categry f the MOR t determine O/A s cmpliance with HUD requirements: Superir Abve Average Satisfactry Belw Average Unsatisfactry 55

56 SUMMARY REPORT Superir Rating Assigned if O/A s perfrmance cnsistently exceeds statutry, regulatry and handbk requirements: Plicy & prcedures are highly successful in carrying ut HUD s bjectives. O/A strictly adheres t prcedures. In cmpliance with HUD s lead-based paint rules. The prperty is in an exceptinal physical cnditin. Few errrs fund & n majr adverse findings. O/A demnstrates that AFHMP is peridically updated & fllwed by staff. 56

57 SUMMARY REPORT Abve Average Rating Assigned if O/A s perfrmance ccasinally exceeds statutry, regulatry and handbk requirements: Plicy & prcedures are successful in carrying ut HUD s bjectives. O/A adheres t prcedures with very few exceptins. In cmpliance with HUD s lead-based paint rules. Prperty is in gd physical cnditin with minr deficiencies. Minimal errrs fund & n majr adverse findings. AFHMP is apprved & staff trained t implement it. 57

58 SUMMARY REPORT Satisfactry Rating Assigned if O/A s perfrmance meets statutry, regulatry and handbk requirements: O/A successfully carries ut HUD s bjectives. Plicy & prcedures are nt always adequate t prevent errrs. Lead hazard cntrl plan is pending HUD apprval. Sme EH&S and majr deficiencies bserved, but many have already been crrected by O/A. O/A & staff deviated frm established plicies; hwever, minr errrs fund can be easily crrected. Apprved AFHMP is available and fllwed by staff. 58

59 SUMMARY REPORT Belw Average Rating Assigned if O/A s perfrmance rarely meets statutry, regulatry and handbk requirements: Plicy & prcedures are ineffective r inapprpriate, d nt meet HUD requirements, resulting in frequent failure t cmply. Repeat majr adverse findings. Open findings frm prir year s MOR. Lead hazard cntrl plan des nt cmply with HUD s apprved plan. 59

60 SUMMARY REPORT Belw Average Rating (Cntinued) Substantial number f EH&S and majr deficiencies bserved & very few crrected. Significant changes t existing plicy & prcedures and staff training is required t cure deficiencies. Apprved AFHMP is available but nt utilized by staff. 60

61 SUMMARY REPORT Unsatisfactry Rating Assigned if O/A s perfrmance des nt meet statutry, regulatry and handbk requirements: O/A s actins have frustrated the achievements f husing bjectives. Majr adverse findings in financial management & prcurement prcesses such as mrtgage default, failure t fund R&R, failure t reprt, etc Repeat majr adverse findings. Open findings frm prir year s MOR. 61

62 SUMMARY REPORT Unsatisfactry Rating (Cntinued) Failure t submit a Lead hazard cntrl plan t HUD. Many EH&S and majr deficiencies bserved & nne have been crrected. O/A s failure t meet state & lcal husing cde. Plicy & prcedures are ineffective r lacking, resulting in frequent and ften serius failures t cmply. N HUD apprved AFHMP in the ffice. 62

63 SUMMARY REPORT Perfrmance Indicatr Values When each f the categries is rated, ne f the fllwing perfrmance indicatr values is used: Perfrmance Indicatr Perfrmance Indicatr Value Superir Abve Average Satisfactry Belw Average Unsatisfactry <=59 63

64 SUMMARY REPORT Overall Rating When rating all categries: Perfrmance Indicatr Perfrmance Indicatr Value Percentage f Overall Rating Calculatin General Appearance and Security Superir 94 10% 9.4 Fllw-up and Mnitring f Prject Inspectins Maintenance and Standard Operating Prcedures Financial Management/Prcurement Superir 94 10% 9.4 Abve Average 82 10% 8.2 Abve Average 82 25% 20.5 Leasing and Occupancy Abve Average 82 25% 20.5 Tenant/Management Relatins Abve Average 82 10% 8.2 General Management Relatins Abve Average 82 10% 8.2 Ttals 100% 84.4 Overall Rating 84 64

65 SUMMARY REPORT Overall Rating Limited review ratings: Perfrmance Indicatr Perfrmance Indicatr Value Percentage f Overall Rating Calculatin General Appearance and Security Superir 94 10% 9.4 Fllw-up and Mnitring f Prject Inspectins Maintenance and Standard Operating Prcedures Financial Management/Prcurement Superir 94 10% 9.4 Abve Average 82 10% 8.2 Nt Rated 0 0% 0 Leasing and Occupancy Abve Average 82 25% 20.5 Tenant/Management Relatins Abve Average 82 10% 8.2 General Management Relatins Abve Average 82 10% 8.2 Ttals 75% 63.9 Overall Rating 85 65

66 INDUSTRY BEST PRACTICES Cnduct yur wn MOR. Owner/Supervisry Staff shuld get invlved & attend the MOR. Use a checklist & a standard file rganizatin t; eliminate missed/lst dcuments, reduce errrs, and facilitate the review prcess. Use an independent third party t spt-check yur files. Cnduct frequent physical inspectins f the prperty and units. 66

67 INDUSTRY BEST PRACTICES Attend regulatry meetings t learn abut new prgram changes. Update yur plicy & prcedures immediately t implement changes, and cmmunicate with staff. O/A & staff shuld frequently attend industry training t imprve their knwledge base & skills. Cnduct yur business every day as if yur next MOR is scheduled fr tmrrw. Cmmunicate with nsite staff regarding implementatin prcedures. 67

68 THANK YOU AND ENJOY THE REST OF THE CONFERENCE! Natinal Husing Cmpliance Raising The Bar In Cmpliance 68