Mary Celone (00:05.862)
Hello everyone. Welcome to today's Tuesday tip. I'm Mary Celone. Today we're going to be talking a little bit about what happens when a tenant falls out of compliance with their annual recertification and what the time frame is for completing termination and initial certifications in this case.

Mary Celone (00:30.476)
As any property manager is well aware, recertifications, of course, must be processed in a timely manner. And HUD lays out the steps and timeline for this for us in chapter seven of the 4350.3, especially figure seven three. And both the owner agent and tenants have the responsibility to do their part for annual recertifications, right? The owner agent has to make sure to notify the tenants at appropriate times.

And ensure verifications and calculations are complete on time. And the tenant must respond with complete information in the appropriate timeframe as well. And this all, of course, has to be done in enough time to give the required 30 day notice should there be an increase in the tenant portion of rent. But as we all know, not every recertification happens like clockwork. And one of the most difficult situations is when a

Resident fails to respond for annual recertification altogether or until after their anniversary date or when the recertification would have been effective. Meaning the owner agent completed all their steps on time, right? All three reminder notices were sent on time, and the tenant did not respond before the recertification anniversary date or effective date, and there were no extenuating circumstances.

Now luckily HUD does provide guidance for this case, but getting the dates right might be a little tricky sometimes.

Mary Celone (02:07.77)
So first remember, if a new AR hasn't been completed and submitted through TRACS within 15 months after the prior year's AR date, assistance payments will be terminated. So if no certification is received for a household, TRACS will show a termination 90 days after the date the AR would have been effective.

But in this circumstance we're talking about with the tenant not responding by their anniversary date for annual recertification, we know what to do, and it should happen before that 90 days.

Mary Celone (02:51.056)
So if the tenant doesn't respond for an AR by their anniversary date and there were not any extenuating circumstances, the tenant is out of compliance and their assistance needs to be terminated. The termination 50059 needs to be effective the day before the AR would have been effective or that anniversary date. So if this was an 81 AR.

The termination or TM 50059 is effective 731. And this is because the tenant begins paying market rent, meaning they're receiving no assistance, beginning the day the AR would have been effective, that anniversary date. Now, quick note for our viewers that also have 202 PRACs or 811 PRACs, you'll handle these differently. So consult your HUD handbook for guidance on those units.

Mary Celone (03:51.778)
Now, after you do all of this, of course, the tenant may respond, right? So if the tenant responds and submits the required information, and there is still assistance available, and they still qualify for that assistance, assistance can be reinstated. And this is done with an initial certification or IC. The IC 50059 would be effective the first day of the month.

Following the date they reported for the certification. So again, if this was an 8.1AR with assistance ending on 731 and the tenant finally responded, let's say on 8 15, the IC 50059 reinstating assistance would be effective 9 1. From termination until the effective date of the IC, however, they are.

Paying market rent.

Mary Celone (04:58.326)
And keep in mind the ICs change the recertification or anniversary dates for tenants. So in our example, the original AR or anniversary date was 8.1, but assistance was terminated due to failure to recertify and reinstated on 9-1. The tenant's new annual recert date or anniversary date will be 9-1 instead of 8-1.

And one final reminder, as always, with every recertification, be sure you are checking to make sure you've correctly captured these dates and any adjustments that go along with them on your vouchers.

And that's all for today, everybody. Thank you for watching. And as always, please don't hesitate to contact us with any questions, comments, or suggestions for any future Tuesday tips. Thanks again and we will see you next week.