Instruct Staff Not to Accept Rent Checks from Nonresidents

From time to time, you or a staff member may get a rent check from someone other than the resident named on the lease. If you deposit the check and it turns out that the resident is illegally subletting his unit to the person who sent the rent check, you could run into problems. A court may rule that you have had knowledge of and consented to the sublet by accepting and depositing the rent check even if you never intended to.

And if a court rules that you have consented to a low-income resident’s sublet, you won’t be able to continue counting that unit as low income. The tax credit law requires you to certify the income of all households that occupy your low-income units. But if a qualified, low-income household sublets its unit, you’ll have a situation where the unit’s actual occupants were never certified. As a result, your state housing agency may cite you for noncompliance.

To help prevent this from happening at your tax credit site, give your staff a memo instructing them to hold off depositing rent checks from people who aren’t named on the lease. Instruct staff that before they can deposit such rent checks, they must investigate and make sure the resident isn’t illegally subletting his unit. We’ll give you a Model Memo: Give Staff Instructions for Handling Rent Payments from Nonresidents, which you can adapt and use at your site.

What Memo Should Say

Your memo, like our Model Memo, should instruct your staff:

• To hold off depositing any rent checks from people not listed on the lease;
• To visit the unit in question to see if the resident is subletting the unit without your consent;
• To deposit the check if investigation shows that it’s from an acceptable source (such as a relative paying rent for a resident), and make a notation to that effect in the file; and
• To notify management immediately if there’s an illegal sublet, so you can take appropriate action.