[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: 24CFR886.312]



[Page 151-152]

 

                 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.  886.312  Rent adjustments.



    (a) Limits. Housing assistance payments will be made in amounts 

commensurate with contract rent adjustments under this paragraph, up to 

the maximum amount authorized under the contract. (See Sec.  886.308.)

    (b) Annual adjustments. The contract rents may be adjusted annually, 

at HUD's option, either (1) on the basis of a written request for a rent 

increase submitted by the owner and properly supported by substantiating 

evidence, or (2) by applying, on each anniversary date of the contract, 

the applicable automatic annual adjustment factor most recently 

published by HUD in the Federal Register. If HUD requires that the owner 

submit a written request, HUD within a reasonable time shall approve a 

rental schedule that is necessary to compensate for any increase 

occurring since the last approved rental schedule in taxes (other than 

income taxes) and operating and maintenance costs over which owners have 

no effective control, or shall deny the increase stating the reasons 

therefor. Increases in taxes and maintenance and operating costs shall 

be measured against levels of such expenses in comparable assisted and 

unassisted housing in the area to ensure that adjustments in the 

contract rents shall not result in material differences between the 

rents charged for assisted and comparable unassisted units. Contract 

rents may be adjusted upward or downward as may be appropriate; however, 

in no case shall the adjusted rents be less than the contract rents on 

the effective date of the contract, provided there was no fraud or 

mistake adverse to the Department's interest in determining the initial 

contract rent.

    (c) Special adjustments. Special adjustments in the contract rents 

shall be requested in writing by the owner and may be authorized by HUD 

to the extent HUD determines such adjustments are necessary to reflect 

increases in the actual and necessary expenses of owning and maintaining 

the contract



[[Page 152]]



units which have resulted from substantial general increases in real 

property taxes, utility rates or similar costs (i.e., assessments and 

utilities not covered be regulated rates) which are not adequately 

compensated for by the adjustment authorized by paragraph (b) of this 

section.

    (d) Comparability between assisted and unassisted units. 

Notwithstanding any other provisions of this subpart, adjustments as 

provided in this section shall not result in material differences 

between the rents charged for assisted and comparable unassisted units, 

as determined by HUD: Provided, however, That this limitation shall not 

be construed to prohibit differences in rents between assisted and 

comparable unassisted units to the extent that such differences may have 

existed with respect to the initial contract rents assuming no fraud or 

mistake adverse to the Department's interest.

    (e) Addendums to contract and leases. Any adjustment in contract 

rents shall be incorporated into the contract and leases by dated 

addendums to the contract and leases establishing the effective date of 

the adjustment.