Tenant Paid Utility Allowances Cindy Ross Contract Management Services Master Class Training Tenant Paid Utility Allowances Cindy Ross Contract Management Services

Utility Allowance Regulations Source: HUD HQ Memo dated June 20, 2011 Carol J. Galante, Deputy Assistant Secretary for Multifamily And HUD-Seattle Utility Allowance Procedure

Analysis – and – supporting documentation BOLD lettering throughout this presentation is a representation of the most common submission deficiencies… The Owner must provide the Contract Administrator (CA) a 12 month analysis of utility costs that residents incur on an annual basis Analysis – and – supporting documentation Must be sent to the CA at least 120 days prior to the HAP contract’s anniversary date, along with the Owner’s annual Rent Adjustment/Contract Renewal packet

At least six (6) months prior to the contract’s anniversary date, the Owner collects utility data from either the: 1) Resident; 2) Utility Provider; or 3) a combination of both. Example: HAP contract = 2/1/2015 – 1/31/2020 The entire Owner’s Packet: Utility Allowance Analysis and Rent Adjustment or Contract Renewal paperwork should be received at the CA’s office on or before 10/3/2014 (120 days prior to the contract’s anniversary) Contract Anniversary = February 1st Six months prior to February 1st = August 1st, 2014 Data collection period = July 2013 through June 2014

Suggested: The Owner generates a 12 month vacancy report for the property that reflects the months included (July 2013 – June 2014) in the analysis: Include the vacancy report as supporting documentation for the analysis (not required, but this helps YOU and US in case discrepancies exist) Remove all units that experienced a vacancy during the analysis timeframe from the calculations The analysis and supporting documentation (copies of billings, or unit specific data obtained directly from the utility provider) must be for all units that did NOT experience a vacancy during the 12 month analysis period (assisted units)

When the property has unit types (1 Bd. , 2 Bd. , etc When the property has unit types (1 Bd., 2 Bd., etc.) with 10 or fewer units Data should be collected for all units which have not experienced a vacancy No less than three (3) units When the property has unit types (1Bd., 2 Bd. , etc.) with 11 or more units Data must be collected for 20% of units for each unit type No more than 20 units

The data collected must: Be for the most recent 12 month period possible Begin or end during the same service month, when the unit’s resident pays for more than one type of utility February’s gas billing dates: 2/10/2014 – 3/9/2014 February’s electric billing dates: 1/25/2014– 2/24/2014 Include billed charges (cost of electricity, gas, etc.) Include total billing adjustments, as applicable

The Owner prepares a spreadsheet that averages utility costs incurred for each qualifying unit over the 12 month analysis period by unit type Sample spreadsheet available at www.cms-results.com The CMS spreadsheet will calculate the average allowance(s) and has a space for the Owner’s recommendation

Sample posting/letter is available at: www.cms-results.com When the spreadsheet indicates that a decrease of any amount is warranted to one or more of the unit types at the property, the Owner must inform the residents in writing that they are submitting a request to lower the tenant-paid utility allowance. Sample posting/letter is available at: www.cms-results.com Tenant Notification

The Owner serves notice to residents approximately five (5) months prior to the Contract Anniversary Notice must be served by delivery (1 or 2 story buildings) Notice may be served by mail or direct delivery or by posting in three (3) conspicuous places within each building that has three (3) or more floors All materials associated with the Rent Adjustment or Contract Renewal and Utility Allowance Analysis must be made available to the residents for review and copying for 30 calendar days When the Owner makes any material change after initial tenant notification, they must re-post and give the residents an additional 15 calendar days to review and comment All of these steps should be completed prior to 120 days before the contract’s anniversary date Tenant Notification

Tenants have the right to participate, establish and operate a tenant organization to address issues related to their living environment The Owner must recognize tenant organizations providing reasonable consideration to concerns raised Legitimate Tenant Organizations: Must be established by the residents of multifamily housing properties Must meet regularly Must operate democratically Must be completely independent of Owners, Management and their Representatives Tenant Notification

All comments received from residents or a tenant organization must be evaluated by the Owner; the Owner may: Respond via letter Respond via “Town Hall” type meeting The Owner must certify that they are compliant with all of the requirements of the CFR, after the 30 day posting period has ended: Certification available at: www.cms-results.com Tenant Notification

See www.cms-results.com for detailed checklists of necessary forms The Owner may electronically submit their Contract Renewals, Rent Adjustments, and Utility Analysis paperwork to the CA via email: mailto:contractdept@cms-results.com Additionally, any documents with “wet” Owner signatures must also be mailed to the CA The Owner packet will include: Renewal or Rent Adjustment Forms & Certifications Utility Allowance Summary/Recommendation, supporting documentation, copies of all resident comments received, and the Owner’s response to the residents’ comments Owner’s Certificate of Compliance with tenant notification requirements See www.cms-results.com for detailed checklists of necessary forms

© 2015 Contract Management Services Should you have any further inquiries, please contact: Cindy Ross CMS Associate Director (360) 616-7220 cross@cms-results.com © 2015 Contract Management Services All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of Contract Management Services. Questions?