[Code of Federal Regulations]

[Title 24, Volume 4]

[Revised as of April 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 24CFR883.607]



[Page 110-111]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

  CHAPTER VIII--OFFICE OF THE ASSISTANT SECRETARY FOR HOUSING-FEDERAL 

 

PART 883_SECTION 8 HOUSING ASSISTANCE PAYMENTS PROGRAM_STATE HOUSING 

AGENCIES--Table of Contents

 

             Subpart F_Housing Assistance Payments Contract

 

Sec.  883.607  Default by owner and/or agency.



    (a) Rights of Owner if Agency defaults under Agreement or Contract. 

The ACC, the Agreement and the Contract will provide that, in the event 

of failure of the Agency to comply with the Agreement or Contract with 

the owner, the



[[Page 111]]



owner will have the right, if he/she is not in default, to demand that 

HUD investigate. HUD will first give the Agency a reasonable opportunity 

to take corrective action. If HUD determines that a substantial default 

exists, HUD will assume the Agency's rights and obligations under the 

Agreement or Contract and meet the obligations of the Agency under the 

Agreement or Contract including the obligation to enter into the 

Contract.

    (b) Rights of HUD if Agency defaults under ACC. The ACC will provide 

that, if the Agency fails to comply with any of its obligations, HUD may 

determine that there is a substantial default and require the Agency to 

assign to HUD all of its rights and interests under the Contract; 

however, HUD will continue to pay annual contributions in accordance 

with the terms of the ACC and the Contract. Before determining that an 

Agency is in substantial default, HUD will give the Agency a reasonable 

opportunity to take corrective action.

    (c) Rights of Agency and HUD if Owner defaults under Contract. (1) 

The Contract will provide that if the Agency determines that the owner 

is in default under the Contract, the Agency will notify the owner, and 

lender, if applicable, with a copy to HUD,

    (i) Of the actions required to be taken to cure the default,

    (ii) Of the remedies to be applied by the Agency including specific 

performance under the Contract, abatement of housing assistance payments 

and recovery of overpayments, where appropriate; and

    (iii) That, if he/she fails to cure the default, the Agency has the 

right to terminate the Contract or to take other corrective action, in 

its discretion.

    (2) If the Agency provided the permanent financing, the Contract 

will also provide that HUD has an independent right to determine whether 

the owner is in default and to take corrective action and apply 

appropriate remedies, except that HUD will not have the right to 

terminate the Contract without proceeding in accordance with paragraph 

(c) of this section.