[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR886.116]

[Page 138]
 
                 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 A_Additional Assistance Program for Projects With HUD-Insured 
                         and HUD-Held Mortgages
 
Sec. 886.116  Security and utility deposits.

    (a) An Owner may require Families to pay a security deposit in an 
amount up to, but not more than, one month's Gross Family Contribution. 
If a Family vacates its unit, the Owner, subject to State and local 
laws, may utilize the deposit as reimbursement for any unpaid rent or 
other amount owed under the Lease. If the Family has provided a security 
deposit and it is insufficient for such reimbursement, the Owner may 
claim reimbursement from HUD, not to exceed an amount equal to the 
remainder of one month's Contract Rent. Any reimbursement under this 
section shall be applied first toward any unpaid rent. If a Family 
vacates the unit owing no rent or other amount under the Lease or if 
such amount is less than the amount of the security deposit, the Owner 
shall refund the full amount or the unused balance, as the case may be, 
to the Family.
    (b) In those jurisdictions where interest is payable by the Owner on 
security deposits, the refunded amount shall include the amount of 
interest payable. All security deposit funds shall be deposited by the 
Owner in a segregated bank account, and the balance of this account, at 
all times, shall be equal to the total amount collected from tenants 
then in occupancy, plus any accrued interest. The Owner shall comply 
with all State and local laws regarding interest payments on security 
deposits.
    (c) Families shall be expected to obtain the funds to pay security 
and utility deposits, if required, from their own resources and/or other 
private or public sources.