Get HUD Approval for Lease Modifications

In this month’s feature, The Risk of the Incomplete Lease, we told you what documents HUD requires you to attach to your leases. But can you make other modifications to a HUD model lease?

The only way to modify a HUD model lease is to create a lease addendum [HUD Handbook 4350.3, par. 6-5(C)(2)]. Because addendums are just as legally binding on tenants as the rest of the lease, HUD requires that all lease addendums be approved by HUD or the contract administrator before implementation. If the proposed lease addendum is approved, then the owner must follow the tenant notification proce

Modifications to an existing tenant’s lease can be effective only at the end of the lease term. You must give the tenant the approved modifications at least 60 days before the end of the lease term. The notice to the tenant must include a copy of the revised lease or the new addendum revising the existing lease agreement. Your notice must also include a letter clearly stating that the tenant can either accept the modification or move, but she must respond within 30 days of the letter. The tenant will accept the modification by signing and returning the updated lease or addendum, or she’ll refuse the modification and give 30 days’ notice of intent to vacate.

Check that Bedbug Addendum Has HUD Approval

In 2012, HUD issued Housing Notice 2012-5 to provide guidance on preventing and responding to pest infestations, particularly bedbugs, at HUD-assisted sites. As a result of this guidance, many sites added Bedbug Lease Addendums to the HUD Model Lease that contained provisions that may conflict with current guidance.

In 2019, HUD issued a memo reiterating that sites that add a lease addendum must get HUD approval. And in reviewing addendums for approval, the memo says HUD staff should consider that:

• The  model lease: (a) requires the landlord to provide extermination services, as necessary; (b) requires the tenant to keep the unit clean; and (c) allows for the resident to be charged for damages caused by the resident’s carelessness, misuse, or neglect.
• Rental assistance, owner advances, and reserve for replacement funds may be used to control infestations.
• Sites should have an Integrated Pest Management (IPM) plan, including resident education on bedbugs.
• A regular, proactive inspection program by management is a crucial component of IPM.

A lease addendum that duplicates or contradicts these provisions will be denied. For example, language that shifts the cost of extermination to the resident isn’t allowed. Unless you can show that the infestation was caused by the resident’s neglect, shifting the extermination cost to the resident isn’t acceptable.

Also, placing the burden of inspection on residents isn’t allowed. You should have an educational program to help residents understand the importance of prevention. When bedbugs are present, you must conduct regular inspections and exterminate.