[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: 24CFR886.315]

[Page 152-153]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
  CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL
 
PART 886_SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM_SPECIAL 
ALLOCATIONS--Table of Contents
 
 Subpart C_Section 8 Housing Assistance Program for the Disposition of 
                           HUD-Owned Projects
 
Sec. 886.315  Security and utility deposits.

    (a) Amount of deposits. If at the time of the initial execution of 
the Lease the Owner wishes to collect a security deposit, the maximum 
amount shall be the greater of one month's Gross Family Contribution or 
$50. However, this amount shall not exceed the maximum amount allowable 
under State or local law. For units leased in place, security deposits 
collected prior to the execution of a Contract which are in excess of 
this maximum amount do not have to be refunded until the Family is 
expected to pay security deposits and utility deposits from its 
resources and/or other public or private sources.
    (b) When a Family vacates. If a Family vacates the unit, the Owner, 
subject to State and local law, may use the security deposit as 
reimbursement for any unpaid Family Contribution or other amount which 
the Family owes under the Lease. If a Family vacates the unit owing no 
rent or other amount under the Lease consistent with State or local law 
or if such amount is less than the amount of the security deposit, the 
Owner shall refund the full amount or the unused balance to the Family.
    (c) Interest payable on deposits. In those jurisdictions where 
interest is payable by the Owner on security deposits, the refunded 
amount shall include the amount of interest payable. The Owner shall 
comply with all State and local laws regarding interest payments on 
security deposits.
    (d) Insufficient deposits. If the security deposit is insufficient 
to reimburse the Owner for the unpaid Family Contribution or other 
amounts which the Family owes under the Lease, or if the

[[Page 153]]

Owner did not collect a security deposit, the Owner may claim 
reimbursement from HUD for an amount not to exceed the lesser of: (1) 
The amount owed the Owner, (2) two months' Contract Rent, minus, in 
either case, the greater of the security deposit actually collected or 
the amount of security deposit the owner could have collected under the 
program (pursuant to paragraph (a) of this section). Any reimbursement 
under this section must be applied first toward any unpaid Family 
Contribution due under the Lease and then to any other amounts owed. No 
reimbursement shall be claimed for unpaid rent for the period after the 
family vacates.