HUD Revises Appeal Process for Tenant Participation Complaints

On Sept. 4, 2014, HUD issued Notice H 2014-12 (Implementation of Tenant Participation Requirements in accordance with 24 CFR Part 245). HUD regulations governing tenant participation in multifamily housing projects are found at 24 CFR Part 245 Subpart B. According to HUD, tenant participation is an important element to maintaining sustainable projects and communities. The notice addresses available sanctions and the use of civil money penalties as tools to enforce HUD’s commitment to tenant participation.

The recent notice supersedes the prior notice addressing the same subject. The part that changed was Section F, detailing the appeal procedure for tenants or tenant organizations when complaints haven’t been resolved at the local level.

Tenants’ Right to Organize

HUD regulations give residents of an assisted site the right to establish and operate a tenant organization for the purpose of addressing issues related to their living environment as well as activities related to housing and community development.

A tenant organization is considered legitimate if it has been established by the tenants, meets regularly, operates democratically, is representative of all residents in the development, and is completely independent of owners, management, and their representatives. The definition of legitimate tenant organization includes “organizing committees” newly formed by members, and doesn’t require specific structures, written bylaws, elections, or resident petitions.

HUD regulations identify activities that owners and management agents must allow tenants and tenant organizers to conduct related to establishing or operating a tenant organization. These activities include:

• Distributing leaflets in lobbies and common areas and under tenants’ doors;
• Posting information on bulletin boards;
• Initiating contact with tenants;
• Conducting door-to-door surveys to ascertain interest in establishing a tenant organization and to offer information about the tenant organization;
• Offering assistance for tenants to participate in tenant organization activities; and
• Convening tenant organization meetings on-site in a manner that’s fully independent of management representatives.

Enforcement Process

The enforcement process begins with a tenant or tenant organization filing a written complaint with the local HUD office, alleging a consistent pattern of violations of HUD program requirements or one violation that caused serious harm to tenants or the public.

The written complaint must include evidence presented in support of the complaint. Evidence supporting the complaint may be:

• Signed statements from tenants who have observed violations of HUD regulations regarding tenant participation or other program obligations;
• Documents from owners expressing opposition to tenant organizing activities;
• Documents denying the use of facilities for purposes of organizing an association or holding meetings; and
• Any other forms of documentation that support the complaint.

If, after investigating, the Hub director doesn’t find reasonable cause to support the complaint, the director will close the case. If the case remains open, the Hub director will bring the parties together to try to conciliate. If the parties reach an agreement that would correct any alleged violations, they’ll execute a conciliation agreement containing the terms for such correction. The Hub director will approve and sign the agreement only if it protects the public interest.

The choice to participate in conciliation is completely voluntary on the part of both parties. If the parties sign a conciliation agreement, the Hub director will end its investigation and close the case. However, if either party breaches the agreement, the Hub director can reopen the case and pursue an enforcement action.

If conciliation is unsuccessful, the Hub director will conduct a thorough investigation into the alleged violations. If, after investigating, the Hub director finds no reasonable cause to believe that a violation has occurred or is about to occur, the Hub director will issue a determination of “no reasonable cause” and close the case.

If, after conducting a thorough investigation, the Hub director determines that the owner has committed one or more violations of the requirements contained in 24 C.F.R. Part 245, the Hub director will provide written notice of the violations to the owner. The Hub director could pursue an enforcement action after notifying the owner and giving him a chance to respond. If the owner fails to respond or to address the issue(s) in a satisfactory way, then a referral will be sent to the Enforcement department and the owner will be flagged in APPS (Active Partners Participation System).

If one of the complainants disagrees with the Hub director’s decision of “no reasonable cause,” she can request that the case be reconsidered by sending a letter to the Office of Asset Management. HUD will then invite all parties to submit any additional evidence, review the evidence, and then inform the parties of its decision.

If HUD decides to re-open the complaint, the Hub director will resume investigation and conciliation. If the Hub director affirms its finding of “no reasonable cause,” HUD will take no further action on the complaint. If the investigation produces reasonable cause to believe that a violation has occurred or is about to occur, HUD will issue a determination of “reasonable cause” and pursue enforcement remedies.