Know When to Dispose of Old Household Files
Files on households can take up a lot of space. After a few years, you may be tempted to throw out some of these files, which contain documents relating to former and current households as well as to applicants who were rejected or withdrew their applications. If you're not careful, you might throw out documents that could help you thwart lawsuits or documents HUD needs to look over for management reviews and audits to ensure that you're complying with HUD rules.
Fortunately, the HUD Handbook spells out the minimum requirements regarding the proper time and procedures for disposing of old files.
Applicants. If your site has a waiting list, you're required to retain current applications of prospective households as long as their status on the waiting list is active [HUD Handbook 4350.3, par. 4-22(A)]. In addition, HUD requires you to keep files relating to an applicant household for at least three years after you reject the household or it withdraws its application. Files should include the application, any correspondence between you and the household such as the initial rejection notice, the applicant reply, a copy of the owner’s final response, any verification forms, and all documentation supporting the reason for removing the applicant from the waiting list [HUD Handbook 4350.3, par. 4-22(B)].
During the application process, you may have conducted your own criminal background check on the applicant. Owners are allowed to use sources other than the housing authority to conduct criminal background checks. The owner may conduct his or her own background search of criminal records, or may hire a contractor. HUD says that criminal records obtained by the owner are to be maintained confidentially, not misused or improperly disseminated, and destroyed three years after tenancy is terminated. And criminal records received for applicants who never move in are to be retained with the application for three years [HUD Handbook, par. 8-14 (C)(14)].
Current households. Don't dispose of any portion of a current household's file while the household still lives at the site [HUD Handbook 4350.3, par. 4-22(C)]. You might need to draw upon old information in the files about current households. For example, a household might claim that you improperly calculated its rent in the past. Old information in the files will show that your rent calculations were justified.
Former households. Keep a former resident household's file for at least three years after it moves out. The file should include all application paperwork, certification and recertification forms, a signed lease, and copies of any notices you sent to the household. In addition, you're required to maintain documentation of all verification efforts throughout the term of each tenancy and for at least three years after the tenant moves out [HUD Handbook 4350.3, par. 5-23(B)].
Disposal of files. If you dispose of files, be sure to do it carefully and thoroughly. HUD requires owners to maintain applicant and tenant information in a way to ensure confidentiality. In fact, any applicant or tenant affected by negligent disclosure or improper use of information is allowed to sue and seek damages [HUD Handbook 4350.3, par. 5-23 (D)].
Owners are required to dispose of all files and records in a manner that will prevent any unauthorized access to personal information [HUD Handbook 4350.3, par. 5-23 R)]. Methods of disposal include shredding or burning. Leaving unshredded or unburned files out at the curb for collection or tossing them in a Dumpster is too risky. The files contain confidential information such as Social Security and bank account numbers. And you could be sued or fined if any misuse of this information can be traced to your negligent disposal of household files.