HUD HCV Guidebook § 5.2

Part B is the body of the HAP contract. Part B describes in detail program requirements affecting the
owner and owner roles and responsibilities under the HCV program.

Part B of HAP Contract: Body of Contract
                                     Contents by Section Number
                1. Purpose                            9. Prohibition of Discrimination
                2. Lease of Contract Unit            10. Owner’s Breach of HAP Contract
                3. Maintenance, Utilities, and Other 11. PHA and HUD Access to Premises
                   Services                              and
                4. Term of HAP Contract                  Owner’s Records
                5. Provision and Payment of          12. Exclusion of Third Party Rights
                   Utilities and Appliances          13. Conflict of Interest
                6. Rent to Owner: Reasonable Rent 14. Assignment of the HAP Contract
                7. PHA Payment to Owner              15. Foreclosure
                8. Owner Certification               16. Written Notices
                                                     17. Entire Agreement: Interpretation

1. Purpose. This is a HAP contract between the PHA, which is entered to provide assistance for the
   family under the HCV program, and the owner of the unit rented by the assisted family. The HAP
   contract only applies to the family and unit specified in Part A of the contract. The family will
   reside in the unit with assistance under the Section 8 voucher program. During the HAP contract,
   the PHA will pay housing assistance payments to the owner to assist the tenant to lease the unit.

2. Lease of Contract Unit. The HAP contract states the following: 1) the owner has leased the
   contract unit to an HCV program family; 2) the PHA has approved the lease; and 3) the lease
   includes word-for-word all provisions of the tenancy addendum (Part C of the HAP contract).

The HAP contract also states that it is the owner’s responsibility to screen for family behavior or
    suitability for tenancy, and the PHA is not responsible for such screening. The HAP contract also
    clarifies that the PHA is not liable or responsible to the owner or other persons for the family’s
    behavior or conduct in tenancy.

    The HAP contract also contains the owner’s certification that: 1) the owner and the tenant have
    entered into a lease for the contract unit which contains all provisions of the tenancy addendum;
    2) the lease is in a standard form as used by the owner and is generally used for unassisted
    tenants in the premises; and 3) the lease is consistent with state and local law.

3. Maintenance, Utilities, and Other Services. The owner must29 provide all housing services agreed
   to in the lease. The owner must30 maintain the unit and premises in accordance with HQS and
   supply all utilities needed to comply with HQS. If the owner fails to do this, the PHA may take
   action against the owner, including recovering overpayments, suspending housing assistance
   payments, abating or reducing housing assistance payments, and terminating housing
   assistance payments and the HAP contract. In the case of an HQS breach, these actions can be
   taken only if the owner, and not the family, is responsible for the breach.

    The PHA must31 not make any housing assistance payments to the owner if the unit is in violation
    of HQS unless the owner corrects the deficiencies within the required timeframe and the PHA
    verifies that the corrections have been properly made. The PHA may inspect the unit and
    premises at any time the PHA determines necessary to ensure that the unit meets HQS. The PHA
    must32 notify the owner of any HQS deficiencies uncovered.

4. Term of HAP Contract. The term of the HAP contract begins on the first day of the initial term of
   the lease and terminates on the last day of the term of the lease (including the initial lease term
   and any extensions).

    The HAP contract also states when the HAP contract will automatically terminate, and when the
    PHA may in its discretion terminate the HAP contract.

5. Provision and Payment for Utilities and Appliances. The lease and the HAP contract must33
   specify what utilities and appliances are to be provided or paid by the owner or the tenant. The
   language contained in the lease and the HAP contract regarding payment for utilities and
   appliances must34 be consistent.

29 Form HUD-52641, Page 4, Part B Section 3. a.
30 Form HUD-52641, Page 4, Part B Section 3. b
31 Form HUD-52641, Page 4, Part B Section 3 d
32 Form HUD-52641, Page 4, Part B Section 3 f
33 Form HUD-52641, Page 5, Part B Section 5 a and b
34 Form HUD-52641, Page 5, Part B Section 5 c.

6. Rent to Owner: Reasonable Rent. During the HAP contract term, the rent to owner must35 never
   exceed the reasonable rent for the contract unit as determined by the PHA. The PHA determines
   the reasonable rent in accordance with HUD requirements and may re-determine reasonable rent
   at any time. During the HAP contract term, the rent to owner may not exceed the rent charged by
   the owner for comparable unassisted units on the premises. The owner must give the PHA any
   reasonable rental information requested by the PHA.

7. PHA Payment to Owner. Unless the owner has complied with provisions of the HAP contract, the
   owner does not have a right to receive housing assistance payment under the HAP contract. The
   amount of the monthly housing assistance payment shall be determined by the PHA in
   accordance with HUD requirements and is subject to change.

    Housing assistance payments shall only be paid to the owner while the family is residing in the
    contract unit during the term of the HAP contract. The PHA shall not pay a housing assistance
    payment to the owner for any month after the month when the family moves out.

    For deceased single member households or a household where the remaining household
    member is a live-in aide, the owner may keep the HAP for the month in which the death occurred.
    No payments may be made for subsequent months.

    If the PHA determines that the owner is not entitled to the housing assistance payment or any
    part of it, the PHA, in addition to other remedies, may deduct the amount of the overpayment
    from any amounts due the owner (including amounts due under any other HAP contract).

8. Owner Certification. The HAP contract contains the owner’s certification that during the term of
   the HAP contract:
        The owner maintains the unit and premises in accordance with HQS;
        The unit is leased to the tenant;
        The lease includes the HUD tenancy addendum, is in accordance with the HAP contract
         and program requirements, and has been provided to the PHA;
        Rent to owner does not exceed rents charged by the owner for comparable unassisted
         units in the premises;
        Other than the rent to owner, the owner will not receive any payments or other
         consideration from any source for rental of the unit during the contract term from the
         family, PHA, or HUD;
        The family does not own or have any interest in the unit;
        To the owner’s knowledge, the family resides in the contract unit, and the unit is its only
         residence;
        The owner is not a relative of any family member unless the PHA has approved the
         tenancy as a reasonable accommodation for a family member who is a person with

35 Form HUD-52641, Page 5, Part B Section 6 a

disabilities.

9. Prohibition of Discrimination. The HAP contract specifies that the owner must36 not discriminate
   against any person because of race, color, religion, sex, national origin, age, familial status, or
   disability in connection with the HAP contract. Eligibility for HUD’s programs must be made
   without regard to actual or perceived sexual orientation, gender identity, or marital status. In
   addition, the owner must37 cooperate with the PHA and HUD in conducting equal opportunity
   compliance reviews and complaint investigations in connection with the HAP contract. 38

10. Owner’s Breach of HAP Contract. Any of the following actions by the owner, principal, or other
    interested party is a breach of the HAP contract:
         Violation of any obligation under the HAP contract, including the requirement to maintain
           unit in accordance with HQS;
         Violation of any obligation under any other Section 8 housing assistance payment
           contract;
         Fraud, bribery, or any other corrupt or criminal act in connection with the any federal
           housing program;
         For projects with HUD-insured mortgages or HUD loans, failure to comply with the
           applicable program regulations, the mortgage or mortgage note, or the regulatory
           agreement or fraud, bribery or any other corrupt or criminal act in connection with the
           mortgage or loan; or
         If the owner has engaged in any drug-related criminal activity or violent criminal activity.

If the PHA determines that a breach or noncompliance of the contract has occurred, the PHA may
exercise any of its rights and remedies under the HAP contract. The PHA must39 notify the owner of
its determination and provide in writing the reasons for the determination. The notice may require
the owner to take a corrective action by an established deadline. The PHA may recover any
overpayment, suspend housing assistance payments, abate or reduce the housing assistance
payment, terminate the payment or terminate the HAP contract. The PHA may also obtain additional
relief by judicial order or action, including specific performance, other injunctive relief, or order for
damages. The PHA must40 provide the owner with written notice of any termination or reduction in
housing assistance payments or the termination of the HAP contract.

11. PHA and HUD Access to Premises and Owner Records. The owner agrees to provide the PHA and
    HUD with any pertinent information related to the HAP contract. The HAP contract states that the

36 Form HUD-52641, Page 6, Part B Section 9 a
37 Form HUD-52641, Page 6, Part B Section 9 b
38 Equal opportunity compliance reviews refer to compliance reviews under federal civil rights authorities,

including, but not limited to, Title VI of the Civil Rights Act, Section 504 of the Rehabilitation Act, Title II of the
Americans with Disabilities Act, and the Age Discrimination Act.
39 Form HUD-52641, Page 6, Part B Section 10b
40 Form HUD-52641, Page 6, Part B Section 10c

PHA, HUD, and the Comptroller General of the United States have full and free access to the
    contract unit and the premises and to all accounts and other records of the owner that are
    relevant to the HAP contract. The owner must41 grant access to computerized or electronic
    records and to any computers, equipment or facilities containing such records. The owner must42
    assist the PHA in obtaining records.

12. Exclusion of Third Party Rights. The HAP contract states that the family is not a party to or third
    party beneficiary of Part B of the HAP contract. The family, therefore, cannot enforce any
    provision of Part B and cannot take action against the owner or the PHA under Part B. However,
    the family may enforce and take action against the owner under Part C, Tenancy Addendum, of
    the HAP contract.

    The PHA is not responsible for or liable to any person injured as a result of the owner’s action or
    failure to act in connection with managing the unit or premises or implementing the HAP contract.
    The owner is not the agent of the PHA, and the HAP contract does not create or affect any
    relationship between the PHA and the lender to the owner or any suppliers, employees,
    contractors or subcontractors used by the owner in connection with managing the unit or
    premises or implementing the HAP.

13. Conflict of Interest. The HAP contract contains conflict of interest provisions that may prohibit
    some owners from participation in the program. The owner certifies and is responsible for
    assuring that there are no conflicts of interest related to the HAP contract or in any benefits or
    payments under the contract.

14. Assignment of the HAP Contract. The owner may not assign the HAP contract to a new owner
    without the prior written consent of the PHA. The owner must43 provide to the PHA any pertinent
    information requested by the PHA. Any new owner is subject to the same owner approval criteria
    as was the original owner.

    The new owner must agree to be bound by and comply with the HAP Contract. The agreement
    must44 be in a written form acceptable to the PHA. The new owner must45 give the PHA a copy of
    the executed agreement.

15. Foreclosure. In the case of any foreclosure, the immediate successor in interest in the property
    pursuant to the foreclosure shall46 assume such interest subject to the lease between the prior
    owner and the tenant and to the HAP contract between the prior owner and the PHA for the

41 Form HUD-52641, Page 6, Part B Section 11c
42 Form HUD-52641, Page 6, Part B Section 11c
43 Form HUD-52641, Page 7, Part B Section 14b
44 Form HUD-52641, Page 7, Part B Section 14g
45 Form HUD-52641, Page 7, Part B Section 14g
46 Form HUD-52641, Page 8, Part B Section 15

occupied unit. This provision does not affect any State or local law that provides longer time periods
    or other additional protections for tenants.
16. Written Notices. Any notice by the PHA or the owner in connection with the HAP contract must47
    be in writing.

17. Entire Agreement: Interpretation. The HAP contract contains the entire agreement between the
    owner and the PHA. The HAP contract must48 be interpreted and implemented in accordance
    with HUD requirements and regulations at 24 C.F.R. § 982.