Use Checklist to Process 10 Documents at Household’s Lease Signing
When you sign a lease with a new household, you must process certain documents. In some cases, this means that both you and household must sign the documents. In other cases, it simply involves giving the documents to the households. If you forget to give a document to a household or process a required document, you risk losing points on your management and occupancy review, and could face other problems, as well.
To help you avoid mistakes, we’ll give you a checklist of the 10 documents you must process at lease signing. The checklist is divided into the five documents you and the household must sign and the five documents you just must give to the household. The checklist describes the documents and tells you where to get copies of them. It also tells you about problems that may arise, in addition to losing points on your occupancy and management review, if you make mistakes with certain documents.
DOCUMENTS YOU AND HOUSEHOLD MUST SIGN
When you sign a new lease with a household, HUD requires that you and certain household members (the household head, co-head, spouse, and all other adult members of the household) sign the following documents. Keep copies of these signed documents in the household file.
 50059 Printout
What is it? The 50059 printout details the household’s certification or recertification information and shows a household’s rent.
Potential problems. If you sue a household for nonpayment, you might have trouble winning your court case if you don’t have a signed copy of the 50059, says Rita Gilbert, a HUD compliance expert. That’s because the HUD model leases point to the 50059 as backup for the rent amount.
Where to get it. After you’ve gathered and verified a household’s certification and/or recertification information, use TRACS-compliant software to generate the 50059 printout.
 Move-In Inspection Report
What is it? A move-in inspection report details the condition of a unit before a household moves in. You and the household must jointly inspect the unit before the lease signing, then sign the report at the lease signing.
Potential problems. If you don’t have a move-inspection report signed by the household, you could run into trouble getting reimbursed by the household for damage it caused to the unit, says Kay McIlmoil, a HUD compliance consultant. The household could argue that the unit was damaged before it moved in. It will be hard to refute this argument if you don’t have the signed move-in inspection report, points out McIlmoil.
You could also run into trouble getting your local HUD office or contract administrator to approve a damage claim. Without seeing a signed move-in inspection report, many of them will reject these claims, says McIlmoil.
Where to get it. HUD Handbook 4350.3 has a sample form for a move-in inspection report in Appendix 5. You can use it or create your own [Handbook 4350.3, par. 6-29(B)(3)].
 Lead-Based Paint Disclosure Form
What is it? The lead-based paint disclosure form tells households what you know about lead at your site. The disclosure form is designed to document receipt of the Lead Hazard Information Pamphlet and to disclose the presence of known lead-based paint/hazards. On it, you certify that you’ve given the household all available records you have about lead at your site or that you don’t have any such records. The household must sign this form before it signs the lease [Handbook 4350.3, par. 6-8(C)(1)(b)].
Some entire sites and some units at some sites are exempt from this requirement. Either they don’t have to get this form signed by any households at the site, or they don’t have to get it signed by households in some units at the site. To determine if this exemption applies to your site or to some units there, see Figure 6-4 (Disclosure Rule Exemptions) of Handbook 4350.3.
Potential problems. If you don’t give the form to households where required, you can face substantial civil or possibly criminal penalties.
Where to get it. You can get the lead-based paint disclosure form at Exhibit 6-3 of Handbook 4350.3. You can download the English version of the form from www.hud.gov/offices/lead/library/enforcement/lesr_eng.pdf.
 Lease Addenda
What are they? The attorney for your site may have drafted lease addenda for various purposes—for instance, to comply with a state law requirement or to clarify that a live-in aide may not stay in a unit after the household leaves (called a live-in aide addendum).
Potential problems. A state or local government could impose penalties on you if a household doesn’t sign a government-required lease addendum, says McIlmoil. Also, if a household doesn’t sign a lease addendum your attorney drafted, the addendum doesn’t bind the household.
Where to get them. You and/or your attorney write them. Remember that HUD must approve all modifications to the HUD model leases, including lease addenda, before you can implement them, says Gilbert.
 Initial Certification Notice
What is it? The initial certification notice informs a household that you’ll review its income and family composition every year to redetermine its rent and assistance. For specifics on what an initial certification notice must contain, see Handbook 4350.3, par. 7-7(B)(1).
Potential problems. If you don’t have a signed copy of the initial certification notice and you sue a household for nonpayment of rent, you might have trouble winning your case. In one case, a court dismissed a nonpayment case because the site’s recertification notices (notices sent after the initial certification notice) didn’t give all the information that Handbook 4350.3 required [Lower East Side Assoc. v. Estevez, October 2004]. A court might be even more unforgiving if you don’t have proof that you gave a household an initial certification notice.
Where to get it? You can find a sample initial certification notice at Exhibit 7-1 of Handbook 4350.3.
DOCUMENTS YOU MUST GIVE HOUSEHOLD
Although HUD requires that you give each household the following documents at lease signing, neither you nor the household must sign these documents. But you should document in the household file that you gave a copy of the document to the household, says McIlmoil. You can do this in a number of ways, such as asking households to sign a form acknowledging receipt of the document or adding a clause to your site’s HUD model lease (after receiving HUD approval) that says that the household acknowledges receipt of the document.
 House Rules
What are they? House rules must be “reasonable” and relate to the safety, care, or cleanliness of the site or the safety and comfort of the residents [Handbook 4350.3, par. 6-9(B)]. HUD doesn’t require you to create house rules, but many managers find that having them makes it easier to run a site [Handbook 4350.3, par. 6-9(A)(2)].
Where to get them. You or your attorney writes them. Also, the HUD model leases each have a clause that says that the household signing the lease acknowledges receipt of the house rules. Ask your contract administrator or local HUD office if this is sufficient to document receipt of your house rules or if it wants you to do more.
 Pet Rules
What are they? Pet rules set out the rules governing pets at sites [Handbook 4350.3, par. 6-10(B)(1)-(3)]. HUD-assisted sites designated for elderly and disabled households must allow pets, explains McIlmoil.
Where to get them. HUD has provided in Exhibit 6-4 of the Handbook 4350.3 some mandatory pet rules that you must apply at sites designated for the elderly and disabled. In Exhibit 6-4, Handbook 4350.3 also provides some sample subjects that you might want to cover in discretionary pet rules.
The HUD model leases for elderly and disabled sites have a clause that says that by signing the lease the household acknowledges receipt of the pet rules. Ask your contract administrator or local HUD office if this is sufficient to document receipt of your pet rules or if it wants you to do more.
 HUD/EPA Lead Hazard Information Pamphlet
What is it? This pamphlet is officially titled, “Protect Your Family from Lead in Your Home.” It informs households about the dangers of lead.
Where to get it. You can download the HUD/EPA lead hazard information pamphlet from HUD’s Web site in English, Spanish, Vietnamese, Russian, Arabic, or Somali. To do this, go to http://portal.hud.gov/hudportal/HUD?src=/program_offices/healthy_homes/enforcement/disclosure and follow the links. If you don’t have to give a household the lead-based paint disclosure form, you also don’t have to give it the HUD/EPA lead hazard information pamphlet (again, see Figure 6-4 of Handbook 4350.3).
Potential problems. If you’re required to give a household the lead hazard information pamphlet and don’t, you can be hit with substantial civil and possibly criminal penalties.
 Resident Rights and Responsibilities Brochure
What is it? The Resident Rights and Responsibilities brochure outlines a household’s rights and responsibilities (such as the right to fair and equal access to the site’s services and facilities and the responsibility to comply with the lease).
Where to get it. You can download a copy of the brochure at http://portal.hud.gov/hudportal/documents/huddoc?id=DOC_12162.pdf, or if you need a translated copy you can find them at http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/promotingfh/lep#multi. You must also give copies of the brochure to households annually at recertification [Handbook 4350.3, pars. 5-15 (C)(2) and 6-27(B)(1)(i)].
 Race and Ethnicity Certification Reporting Form
What is it? Households may certify the race or ethnicity of their members on this form. But they’re not required to do so.
Where to get it. You can find this form at Exhibit 4-3 of the handbook.
Keep in mind that lease signing isn’t the only time HUD requires you to have households sign documents or give households other documents. For example, you must have households sign consent forms that authorize the release of information (HUD Forms 9887 and 9887-A) at application interviews [Handbook 4350.3, par. 4-24(B)(5)], and you must give households a copy of a HUD fact sheet during their interview [Handbook 4350.3, par. 4-24(B)(12)].
Rita Gilbert: Compliance Manager, Gene B. Glick Mgmt. Co., 8425 Woodfield Crossing Blvd., Indianapolis, IN 46240; www.genebglick.com.
Kay McIlmoil: Managing Member, McIlmoil Real Estate Consulting Services, 4111 Lakeview Pkwy., Locust Grove, VA 22508; (540) 846-7677.
What’s a Lease Attachment?
HUD Handbook 4350.3 and the HUD model leases identify a number of documents in our checklist as lease attachments. Some contract administrators and local HUD offices require you to actually attach these documents to the lease. Others don’t, saying it’s sufficient if the lease identifies the document as an attachment. Ask your contract administrator or local HUD office what it wants you to do.
HUD Handbook 4350.3 identifies these documents as lease attachments:
- 50059 printout (signed by you and the household);
- Move-in inspection report (signed by you and the household);
- House rules (if you developed them);
- Lead-based paint disclosure form (if applicable to unit);
- Pet rules (if applicable to site); and
- Live-in aide lease addendum (if applicable to household) [Handbook 4350.3, par. 6-5(A)(4)(g)].