[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: 24CFR902.79]



[Page 286-288]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 902_PUBLIC HOUSING ASSESSMENT SYSTEM--Table of Contents

 

                 Subpart G_PHAS Incentives and Remedies

 

Sec.  902.79  Substantial default.



    (a) Events or conditions that constitute substantial default. The 

following events or conditions shall constitute substantial default.

    (1) HUD may determine that events have occurred or that conditions 

exist that constitute a substantial default if a PHA is determined to be 

in violation of Federal statutes, including but not limited to, the Act, 

or in violation of regulations implementing such statutory requirements, 

whether or not such



[[Page 287]]



violations would constitute a substantial breach or default under 

provisions of the relevant ACC.

    (2) HUD may determine that a PHA's failure to satisfy the terms of a 

memorandum of agreement entered into in accordance with Sec.  902.75, or 

to make reasonable progress to execute or meet requirements included in 

a memorandum of agreement, are events or conditions that constitute a 

substantial default.

    (3) HUD shall determine that a PHA that has been designated as 

troubled and does not show substantial improvement, as defined in Sec.  

902.75(g)(2), is in substantial default.

    (4) HUD may declare a substantial breach or default under the ACC, 

in accordance with its terms and conditions.

    (5) HUD may determine that the events or conditions constituting a 

substantial default are limited to a portion of a PHA's public housing 

operations, designated either by program, by operational area, or by 

development(s).

    (b) Notification of substantial default and response. If information 

from an annual assessment or audit, or any other credible source 

(including but not limited to the Office of Fair Housing Enforcement, 

the Office of the Inspector General, a judicial referral or a referral 

from a mayor or other official) indicates that there may exist events or 

conditions constituting a substantial breach or default, HUD shall 

advise a PHA of such information. HUD is authorized to protect the 

confidentiality of the source(s) of such information in appropriate 

cases. Before taking further action, except in cases of apparent fraud 

or criminality, and/or in cases where emergency conditions exist posing 

an imminent threat to the life, health, or safety of residents, HUD 

shall afford the PHA a timely opportunity to initiate corrective action, 

including the remedies and procedures available to PHAs designated as 

troubled PHAs, or to demonstrate that the information is incorrect.

    (1) Form of notification. Upon a determination or finding that 

events have occurred or that conditions exist that constitute a 

substantial default, the Assistant Secretary shall provide written 

notification of such determination or finding to the affected PHA. 

Written notification shall be transmitted to the Executive Director, the 

Chairperson of the Board, and the appointing authority(ies) of the 

Board, and shall include, but is not limited to:

    (i) Identification of the specific covenants, conditions, and/or 

agreements under which the PHA is determined to be in noncompliance;

    (ii) Identification of the specific events, occurrences, or 

conditions that constitute the determined noncompliance;

    (iii) Citation of the communications and opportunities to effect 

remedies afforded pursuant to paragraph (a) of this section;

    (iv) Notification to the PHA of a specific time period, to be not 

less than 10 calendar days, except in cases of apparent fraud or other 

criminal behavior, and/or under emergency conditions as described in 

paragraph (b)(4) of this section, nor more than 30 calendar days, during 

which the PHA shall be required to demonstrate that the determination or 

finding is not substantively accurate; and

    (v) Notification to the PHA that, absent a satisfactory response in 

accordance with paragraph (b) of this section, HUD will refer the PHA to 

the Enforcement Center, using any or all of the interventions specified 

in Sec.  902.83, and determined to be appropriate to remedy the 

noncompliance, citing Sec.  902.83, and any additional authority for 

such action.

    (2) Receipt of notification. Upon receipt of the notification 

described in paragraph (b)(1) of this section, the PHA must demonstrate, 

within the time period permitted in the notification, factual error in 

HUD's description of events, occurrences, or conditions, or show that 

the events, occurrences, or conditions do not constitute noncompliance 

with the statute, regulation, or covenants or conditions to which the 

PHA is cited in the notification.

    (3) Waiver of notification. A PHA may waive, in writing, receipt of 

explicit notice from HUD as to a finding of substantial default, and 

voluntarily consent to a determination of substantial default. The PHA 

must concur on the



[[Page 288]]



existence of substantial default conditions which can be remedied by 

technical assistance, and the PHA shall provide HUD with written 

assurances that all deficiencies will be addressed by the PHA. HUD will 

then immediately proceed with interventions as provided in Sec.  902.83.

    (4) Emergency situations. In any situation determined to be an 

emergency, or in any case where the events or conditions precipitating 

the intervention are determined to be the result of criminal or 

fraudulent activity, the Secretary or the Secretary's designee is 

authorized to intercede to protect the residents' and HUD's interests by 

causing the proposed interventions to be implemented without further 

appeals or delays.



[65 FR 1738, Jan. 11, 2000, as amended at 65 FR 36046, June 6, 2000]