[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2007]
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, 
 
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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