[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR884.120]

[Page 120]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL
 
PART 884_SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM, NEW CONSTRUCTION 
SET-ASIDE FOR SECTION 515 RURAL RENTAL HOUSING PROJECTS--Table of Contents
 
            Subpart A_Applicability, Scope and Basic Policies
 
Sec. 884.120  Responsibility for contract administration and defaults 
(private-owner/PHA projects).

    (a) Contract administration. The PHA is primarily responsible for 
administration of the Contract, subject to review and audit by HUD.
    (b) Defaults by PHA and/or owner. (1) The ACC and the Contract shall 
contain a provision to the effect that in the event of failure of the 
PHA to comply with the Contract with the Owner, the Owner shall have the 
right, if he is not in default, to demand that HUD determine, after 
notice to the PHA giving it a reasonable opportunity to take corrective 
action, whether a substantial default exists, and if HUD determines that 
such a default exists, that HUD assure that the obligations of the PHA 
to the Owner are carried out.
    (2) The ACC shall contain a provision to the effect that if the PHA 
fails to comply with any of its obligations (including specifically 
failure to enforce its rights under the Contract, in the event of any 
default by the Owner, to achieve compliance to the satisfaction of HUD 
or to terminate the Contract in whole or in part, as directed by HUD), 
HUD may, after notice to the PHA giving it a reasonable opportunity to 
take corrective action, determine that there is a substantial default 
and require the PHA to assign to HUD all of the PHA's rights and 
interests under the Contract. In such case, HUD will continue to pay 
annual contributions in accordance with the terms of the ACC and the 
Contract.
    (3) The Contract shall contain a provision to the effect (i) that if 
the PHA determines that the Owner is in default under the Contract, the 
PHA shall notify the Owner, with a copy to HUD and RHCDS, of the actions 
required to be taken to cure the default and of the remedies to be 
applied by the PHA including abatement of housing assistance payments 
and recovery of overpayments, where appropriate; and (ii) that if he 
fails to cure the default, the PHA has the right to terminate the 
Contract or to take other corrective action, in its discretion or as 
directed by HUD.

[41 FR 47168, Oct. 27, 1976, as amended at 61 FR 13593, Mar. 27, 1996]