Laws and Regs

[Code of Federal Regulations]
[Title 24, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR245.320]
[Page 381-382]
TITLE 24--HOUSING AND URBAN DEVELOPMENT
CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING
COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 245--TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS--Table of Contents
Subpart D--Procedures for Requesting Approval of an Increase in Maximum
Permissible Rents
Sec. 245.320

Request for increase.

Upon expiration of the period for tenant comments required in the
notice format in Sec. 245.310 and after review of the comments submitted
to the mortgagor, the mortgagor must submit to the local HUD office, in
addition to the materials enumerated in Sec. 245.315 and any revisions
thereto, the request for an increase in the maximum permissible rents,
together with the following:
(a) Copies of all written comments submitted by the tenants to the
mortgagor;
(b) The mortgagor's evaluation of the tenants' comments with respect
to the request;
(c) A certification by the mortgagor that:
(1) It has complied with all of the requirements of this subpart;
[[Page 382]]
(2) The copies of the materials submitted in support of the proposed
increase were located in a place reasonably convenient to tenants in the
project during normal business hours and that requests by tenants to
inspect the materials, as provided for in the notice, were honored;
(3) All comments received from tenants were considered by the
mortgagor in making its evaluation; and
(4) Under the penalties and provisions of title 18 U.S.C., section
1001, the statements contained in this request and its attachments have
been examined by me and, to the best of my knowledge and belief, are
true, correct, and complete.

[Code of Federal Regulations]
[Title 24, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR245.325]
[Page 382]
TITLE 24--HOUSING AND URBAN DEVELOPMENT
CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING
COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 245--TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS--Table of Contents
Subpart D--Procedures for Requesting Approval of an Increase in Maximum
Permissible Rents
Sec. 245.325

Notification of action on request for increase.

(a) When processing a request for an increase in maximum permissible
rents, HUD shall take into consideration reasonably anticipated
increases in project operating costs that will occur (1) within 12
months of the date of submission of materials to HUD under
Sec. 245.315(a) (profit and loss approach) or (2) within 12 months of
the anticipated effective date of the proposed rent increase for
submissions under Sec. 245.315(b) (forward-budget approach).
(b) After HUD has considered the request for an increase in rents,
has found that it meets the requirements of Sec. 245.320, and has made
its determination to approve, adjust upward or downward, or disapprove
the request, it will furnish the mortgagor with a written statement of
the reasons for approval, adjustment upward or downward, or disapproval.
The mortgagor must make the reasons for approval, adjustment, or
disapproval known to the tenants, by service of notice on them as
provided in Sec. 245.15.

[Code of Federal Regulations]
[Title 24, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR245.330]
[Page 382-383]
TITLE 24--HOUSING AND URBAN DEVELOPMENT
CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING
COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 245--TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS--Table of Contents
Subpart D--Procedures for Requesting Approval of an Increase in Maximum
Permissible Rents
Sec. 245.330

Non-insured projects.

(a) In the case of a proposed rent increase for a project assisted
under section 236 of the National Housing Act or section 101 of the
Housing and Urban Development Act of 1965, but which does not have a
mortgage insured by HUD or held by the Secretary, the provisions of this
section and of Secs. 245.305 through 245.320 shall apply to the
mortgagor (project owner), except that-(1) The notice format prescribed in Sec. 245.310 must be modified to
reflect the procedural changes made by this section;
(2) The material (including tenant comments) required to be
submitted to HUD under Secs. 245.315 and 245.320 must be submitted to
the State or local agency administering the section 236 assistance or
rent supplement assistance contracts, rather than to HUD. An equivalent
State or local agency form or standard accounting form may be
substituted for the Statement of Profit and Loss, Form HUD-92410
required under Sec. 245.315(a)(2), if approved by the local HUD office;
and
(3) The State or local agency must certify that the mortgagor has
complied with the requirements of Secs. 245.310, 245.315, 245.320, and
245.325.
(b) After the State or local agency has considered the request for
an increase in maximum permissible rents that meets the requirements of
Sec. 245.320 (including consideration of anticipated cost increases, as
provided in Sec. 245.325(a)), it must make a determination to approve,
adjust upward or downward, or disapprove the request. If the agency
determines to approve or adjust the request, it must submit to the
appropriate local HUD office the mortgagor's requests for approval of an
increase in maximum permissible rents, along with the comments of the
tenants and the mortgagor's evaluation of the comments, and must certify
to HUD that the mortgagor is in compliance with the requirements of this
subpart. HUD shall review the agency's determination and certification

and, within 30 days, of their submission to HUD, notify the agency of
its approval, adjustment upward or downward, or disapproval of the
proposed rent increase. HUD will not unreasonably withhold approval of a
rent increase approved by the State or local agency.
(c) If the agency determines to disapprove the request, there is no
HUD review of the agency's determination.
(d) The agency must notify the mortgagor of the final disposition of
the request, and it must furnish the mortgagor with a written statement
of the reasons for its approval, adjustment, or
[[Page 383]]
disapproval. The mortgagor must make the reasons for approval,
adjustment or disapproval known to the tenants, by service of notice on
them as provided in Sec. 245.15.

[Code of Federal Regulations]
[Title 24, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR245.305]
[Page 380]
TITLE 24--HOUSING AND URBAN DEVELOPMENT
CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING
COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 245--TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS--Table of Contents
Subpart D--Procedures for Requesting Approval of an Increase in Maximum
Permissible Rents
Sec. 245.305

Applicability of subpart.

Source: 50 FR 32403, Aug. 12, 1985, unless otherwise noted.
(a) The requirements of this subpart apply to any request by a
mortgagor, as provided by Sec. 245.10, for HUD approval of an increase
in maximum permissible rents.
(b) For purposes of this subpart, an increase in utility charges
paid directly by the tenant does not constitute an increase in rents.

[Code of Federal Regulations]
[Title 24, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR245.310]
[Page 380-381]
TITLE 24--HOUSING AND URBAN DEVELOPMENT
CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING
COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 245--TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS--Table of Contents
Subpart D--Procedures for Requesting Approval of an Increase in Maximum
Permissible Rents
Sec. 245.310

Notice to tenants.

(a) At least 30 days before submitting a request to HUD for approval
of an increase in maximum permissible rents, the mortgagor must notify
the tenants of the proposed rent increase. Copies of the notice must be
served on the tenants as provided in Sec. 245.15. The notice must
contain the following information in the following format or an
equivalent format:
Notice to Tenants of Intention To Submit a Request to HUD for Approval
of an Increase in Maximum Permissible Rents
________________________________________________________________________
Date of Notice
Take notice that on [date] we plan to submit a request for approval
of an increase in the maximum permissible rents for [name of apartment
complex] to the United States Department of Housing and Urban
Development (HUD). The proposed increase is needed for the following
reasons:
1.
2.
3.
The rent increases for which we have requested approval are:
--------------------------------------------------------------------------------------------------------------Present rent \1\
Proposed increase
\1\
Proposed rent \1\
Bedrooms
------------------------------------------------------------------------------Basic
Market
Basic
Market

Basic
Market
--------------------------------------------------------------------------------------------------------------5............................... $........... $........... $..........
$.......... ........... $
0............................... ............ ............ ...........
........... ........... ...........
1............................... ............ ............ ...........
........... ........... ...........
2............................... ............ ............ ...........
........... ........... ...........
3............................... ............ ............ ...........
........... ........... ...........
4............................... ............ ............ ...........
........... ........... ...........
--------------------------------------------------------------------------------------------------------------\1\ Separate columns for basic and market rent should be used only for projects
assisted under sec. 236 of the
National Housing Act. In addition, in projects with more than 1 type of apartment
having the same number of
bedroom but different rents, each type should be listed separately.
A copy of the materials that we are submitting to HUD in support of
our request will be available during normal business hours at [address]
for a period of 30 days from the date of service of this notice for
inspection and copying by tenants of [name of apartment complex] and, if
the tenants wish, by legal or other representatives acting for them
individually or as a group.
During a period of 30 days from the date of service of this notice,
tenants of [name of apartment complex] may submit written comments on
the proposed rent increase to us at [address]. Tenant representatives
may assist tenants in preparing those comments. (If, at HUD's request or
otherwise , we make any material change during the comment period in the
materials available for inspection and copying, we will notify the
tenants of the change or changes, and the tenants will have a period of
15 days from the date of service of this additional notice (or the
remainder of any applicable comment period, if longer) in which to
inspect and copy the materials as changed and to submit comments on the
proposed rent increase). These
[[Page 381]]
comments will be transmitted to HUD, along with our evaluation of them
and our request for the increase. You may also send a copy of your
comments directly to HUD at the following address: United States
Department of Housing and Urban Development [address of local HUD field
office with jurisdiction over rent increases for the project],
Attention: Director, Housing Management Division, Re: Project No. [Name
of Apartment Complex].

HUD will approve, adjust upward or downward, or disapprove the
proposed rent increase upon reviewing the request and comments. When HUD
advises us in writing of its decision on our request, you will be
notified. If the request is approved, any allowable increase will be put
into effect only after a period of at least 30 days from the date you
are served with that notice and in accordance with the terms of existing
leases.
________________________________________________________________________
[Name of mortgagor or managing agent]
(b) The mortgagor must comply with all representations made in the
notice. The materials to be made available to tenants for inspection and
copying are those specified in Sec. 245.315.

[Code of Federal Regulations]
[Title 24, Volume 2]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR245.315]
[Page 381]
TITLE 24--HOUSING AND URBAN DEVELOPMENT
CHAPTER II--OFFICE OF ASSISTANT SECRETARY FOR HOUSING--FEDERAL HOUSING
COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 245--TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS--Table of Contents
Subpart D--Procedures for Requesting Approval of an Increase in Maximum
Permissible Rents
Sec. 245.315

Materials to be submitted to HUD.

When the notice referred to in Sec. 245.310 is served on the
tenants, the mortgagor must send to the local HUD office copies of the
following documents described in either paragraph (a) or (b) of this
section, as specified by the local HUD office:
(a) Documents to be submitted under profit and loss approach:
(1) A copy of the notice to tenants;
(2) An annual Statement of Profit and Loss, Form HUD-92410, covering
the project's most recently ended accounting year (this statement must
have been audited by an independent public accountant if the project is
required by HUD to prepare audited financial statements), and Form HUD92410 for the intervening period since the date of the last annual
statement if more than four months have elapsed since that date;
(3) A narrative statement of the reasons for the requested increase
in maximum permissible rents; and
(4) An estimate of the reasonably anticipated increases in project
operating costs that will occur within twelve months of the date of
submission of materials under this section.
(5) A status report on the project's implementation of its current
Energy Conservation Plan.
(b) Documents to be submitted under the forward-budget approach:
(1) A cover letter summarizing the reasons a rent increase is
needed;
(2) A copy of the notice to tenants;
(3) A rent increase worksheet providing an income and expense budget
for the 12 months following the anticipated effective date of the
proposed rent increase;
(4) A brief statement explaining the basis for the expense lines on
the rent increase worksheet;
(5) A partially completed Rent Schedule, Form HUD-92458;
(6) If the tenants receive utility allowances, the mortgagor's

recommended utility allowance for each unit type and brief statement
explaining the basis for the recommended increase; and
(7) A status report on the project's implementation of its current
Energy Conservation Plan.
(The information collection requirements in paragraph (a) of this
section were approved by the Office of Management and Budget under
control number 2502-0310 and the information collection requirements in
paragraph (b) were approved under control number 2502-0324)