[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: 24CFR941.403]



[Page 380]

 

                 TITLE 24--HOUSING AND URBAN DEVELOPMENT

 

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

               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

 

PART 941_PUBLIC HOUSING DEVELOPMENT--Table of Contents

 

                      Subpart D_Project Development

 

Sec.  941.403  Acceptance of work and contract settlement.



    (a) Notification of completion. The contractor or developer shall 

notify the PHA in writing when the contract work, including any approved 

off-site work, will be completed and ready for inspection.

    (b) Acceptance--(1) General. A PHA may carry out the final 

inspection of the work and may accept the completed work. If, upon 

inspection, the PHA determines that the work is complete and 

satisfactory, except for work that is appropriate for delayed 

completion, the work shall be accepted by the PHA. The PHA shall certify 

to HUD before it pays the contractor or developer that it has inspected 

the work and determined that it is acceptable and in compliance with the 

construction contract or contract of sale and HUD requirements. The PHA 

shall determine any hold-back for items of delayed completion, and the 

amount due and payable for the work that has been accepted including any 

conditions precedent to payment that are stated in the construction 

contract or contract of sale. The contractor or developer shall be paid 

for items of delayed construction only after inspection and acceptance 

of this work by the PHA.

    (2) Limitation. In the case of a PHA determined to be troubled or 

modernization troubled in accordance with part 901 of this chapter or a 

PHA that has for other reasons been notified in writing that it may not 

use the procedure specified in paragraph (b)(1) of this section, the 

procedure described in paragraph (b)(1) of this section will be 

followed, except that HUD must concur in the necessary PHA 

determinations and approvals.

    (c) Guarantees and warranties. The construction contract or contract 

of sale shall specify the project guaranty period and amounts to be 

withheld and shall provide for assignment to the PHA of all manufacturer 

and supplier warranties required by the construction documents. The PHA 

shall inspect each dwelling unit and the overall project approximately 

three months after the beginning of the project guaranty period and 

three months before its expiration and also as may be necessary to 

exercise its rights before expiration of any warranties. The PHA shall 

require repair or replacement, prior to the expiration of the guaranty 

or warranty periods, of any defective items.

    (d) Title to turnkey projects--(1) General. When the work has been 

inspected and accepted on a turnkey project, in accordance with 

paragraph (b) of this section, the PHA is authorized to take title to 

the completed project in accordance with the following certification. 

The PHA shall certify to HUD that it obtained a title insurance policy 

that guaranteed that the title was good and marketable before taking 

title and that it promptly recorded the deed and declaration of trust in 

the form prescribed by HUD.

    (2) Limitation. After inspection and acceptance of the work in 

accordance with paragraph (b) of this section, a PHA that has been 

determined to be troubled or modernization troubled in accordance with 

part 901 of this chapter, or a PHA that has for other reasons been 

notified in writing that it may not use the procedure specified in 

paragraph (d)(1) of this section shall submit to HUD evidence that title 

to the completed project is good and marketable. If HUD approves the 

title evidence, it will inform the PHA that it is authorized to acquire 

title to the completed project. The PHA shall record promptly the deed 

and declaration of trust in the form prescribed by HUD, and HUD may 

require submission of evidence of such recordation.



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