# 30-Day Notification Requirement Prior To Termination of Lease for Nonpayment of Rent > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2024-28861 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** December 13, 2024 - **Citation:** 89 FR 101270 ## Text DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 24 CFR Parts 247, 880, 884, 886, 891, and 966 [Docket No. FR-6387-F-02] RIN 2501-AE09 30-Day Notification Requirement Prior To Termination of Lease for Nonpayment of Rent AGENCY: Office of the Secretary, U.S. Department of Housing and Urban Development (HUD). ACTION: Final rule. SUMMARY: This final rule provides that public housing agencies (PHAs) and owners of properties receiving project-based rental assistance (PBRA) must provide written notification to tenants facing eviction for nonpayment of rent 30 days prior to filing a formal judicial eviction procedure. For purposes of this rule, PBRA and other forms of project rental assistance includes projects in the following programs: Section 8 Project-Based Rental Assistance, Section 202/162 Project Assistance Contract (PAC), Section 202 Project Rental Assistance Contract (PRAC), Section 811 PRAC, Section 811 Project Rental Assistance Program (811 PRA), and Senior Preservation Rental Assistance Contract Projects (SPRAC). This final rule largely adopts the proposed rule and, in response to public comments, has been revised to include additional requirements in the 30-day notice and to clarify the timing of the notice. DATES: Effective date: January 13, 2025. Compliance dates: Compliance with this rule is required no later than January 13, 2025, except PHA compliance with 24 CFR 966.4(q) is required no later than June 15, 2026. PBRA owner compliance with certain requirements in new 24 CFR 880.606(b), 884.215, 886.127(c), 886.327(c), and 891.425(d), is required no later than 14 months from the date that HUD publishes final model leases that incorporates these requirements. FOR FURTHER INFORMATION CONTACT: For Public and Indian Housing: Danielle Bastarache, Deputy Assistant Secretary for Public Housing and Voucher Programs, 451 7th Street SW, Room 4204, Washington, DC 20410, telephone number 202-402-1380 (this is not a toll-free number). For a quicker response, email publichousingpolicyquestions@hud.gov. For Multifamily: Ethan Handelman, Deputy Assistant Secretary for the Office of Multifamily Housing Programs, 451 7th Street SW, Room 6106, Washington, DC 20410, telephone number 202-708-2495 (this is not a toll-free number). For a quicker response, email mfcommunications@hud.gov. HUD welcomes and is prepared to receive calls from individuals who are deaf or hard of hearing, as well as individuals with speech or communication disabilities. To learn more about how to make an accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. SUPPLEMENTARY INFORMATION: I. Background On October 7, 2021, HUD published an interim final rule titled “Extension of Time and Required Disclosures for Notification of Nonpayment of Rent” (the “interim final rule”), to assist with the response to the national COVID-19 pandemic and future national emergencies (86 FR 55693, October 7, 2021). HUD, along with other Federal agencies, responded to the national emergency declaration during the COVID-19 pandemic with efforts to support families impacted financially by the COVID-19 pandemic and at risk of losing their housing. Pursuant to the interim final rule, HUD also issued a joint Public and Indian Housing (PIH) and Housing notice on October 7, 2021 (Notice PIH 2021-29 and H 2021-06). On December 1, 2023, HUD published for public comment the “30-Day Notification Requirement Prior to Termination of Lease for Nonpayment of Rent” proposed rule (the “proposed rule”) (88 FR 83877, December 1, 2023). The proposed rule sought to make the interim final rule generally applicable and no longer contingent on the existence of a national emergency or the availability of emergency rental assistance funds by revising HUD's regulations to provide for a 30-day notification requirement prior to initiating an eviction proceeding against a tenant for nonpayment of rent. Prior to 2021 when the interim final rule was implemented, certain HUD programs had requirements for non-payment of rent evictions and timing of eviction notices. 1 For example, PBRA programs require 30 days' notice for a termination of tenancy for “other good cause.” Public Housing and Section 8 Moderate Rehabilitation Program require a 14-day, or 5 business day, notice respectively before initiating a termination of tenancy action for nonpayment of rent. However, absent a Federal rule, tenants in HUD-subsidized housing are subject to varying State and local notice requirements. PHAs and owners have had to comply with State and local tenant laws and only the District of Columbia requires 30 days' notice prior to the initiation of eviction proceedings for the nonpayment of rent, while two States require 30 days' notice in certain cases. 2 1 88 FR 83880. 2 Estimate based on HUD's cross-reference on distribution of subsidized households across states with external analysis of legal requirements per state for non-payment of rent notice ( https://www.nolo.com/legal-encyclopedia/state-laws-on-termination-for-nonpayment-of-rent.html ). The following States require 30 days' notice: Wisconsin (only if the lease term is longer than one year) and Minnesota (only if the lease term is longer than twenty years). HUD seeks to remove the variable patchwork of notice requirements and reduce the number of preventable evictions filed against HUD-assisted tenants. Most households in HUD-subsidized housing are low-income, with annual household incomes in public housing and project-based Section 8 PBRA both under $16,000. 3 Studies have shown that evictions cause housing instability, an increased risk of homelessness, loss of employment, physical and mental health issues, and long-term negative consequences to families, especially children. 4 Studies have also shown that evictions are unequally distributed as people of color, women, and families with children are more likely to be evicted. 5 Yet, evictions for HUD-assisted housing could be prevented with more time and notice which might help all parties work together to pay the rent owed or attain a rent hardship exemption, rent recalculation, and/or other financial rental assistance. 3 Data available at https://www.huduser.gov/portal/datasets/assthsg.html. 4 Sandel, Megan, et al. (2018). Unstable housing and caregiver and child health in renter families. Pediatrics 141(2); Cutts, Diana B., et al. (2022). Eviction and household health and hardships in families with very young children. Pediatrics 150(4); Treglia, Daniel, Thomas Byrne, and Vijaya Tamla Rai. 2023. “Quantifying the Impact of Evictions and Eviction Filings on Homelessness Rates in the United States.” Housing Policy Debate; Desmond, Matthew and Carl Gershenson. 2016. “Housing and Employment Insecurity among the Working Poor.” Social Problems. 63(1): 46-67; Desmond, M., Gershenson, C., & Kiviat, B., Forced Relocation and Residential Instability Among Urban Renters, Journal of Urban Health, 92(2), 254-267 (2015), https://doi.org/10.1007/s11524-015-9932-2; and Desmond, M., & Shollenberger, T., Forced Displacement from Rental Housing: Prevalence and Neighborhood Consequences, Demography, 52(5), 1751-1772 (2015), https://doi.org/10.1007/s13524-015-0424-y; Cutts, D.B., Darby, M.L., & Billings, J., The Role of Housing Assistance in Achieving Educational Goals for Low-Income Children, American Journal of Public Health, 100(S1), S84-S90 (2010), https://doi.org/10.2105/AJPH.2009.170910; Desmond, M., & Kimbro, R.T., Eviction's Fallout: Housing, Hardship, and Health, Social Forces, 94(1), 295-324 (2015), https://doi.org/10.1093/sf/sou065; HUD (2021), Affordable Housing, Eviction, and Health, Evidence Matters, https://www.huduser.gov/portal/periodicals/em/Summer21/highlight1.html. See also Desmond, Matthew, Unaffordable America: Poverty, housing, and eviction, Fast Focus, 22-2015, University of Wisconsin-Madison, Institute for Research on Poverty, 4. 5 Hepburn, P., Louis, R., & Desmond, M., Racial and Gender Disparities among Evicted Americans. Sociological Science 7, 657 (2020), https://doi.org/10.15195/v7.a27. There are other tools to employ before reaching an eviction. For example, when a tenant or household's income is reduced, they can request an interim reexamination to determine whether the current amount that they pay in rent can be changed, and the PHA or owner must process this request within a reasonable time. 6 Tenants can also request a rent hardship exemption which is an exemption from paying the minimum rent that the PHA or owner normally charges if the household experiences a qualifying financial hardship. 7 A rent recalculation may be granted based on the household's income reduction. 8 Even if a tenant or household does not qualify for a rent hardship exemption, repayment agreements are another option to prevent evictions at the PHA's and owner's discretion. 6 24 CFR 960.257(b); see also https://www.hud.gov/sites/dfiles/PIH/documents/PHOG_Reexaminations_FINAL.pdf and https://www.hud.gov/sites/documents/43503c5HSGH.PDF. 7 24 CFR 5.630, see also Public Housing Minimum Rent and Hardship Exemption Requirements Toolkit, HUD Exchange, https://www.hudexchange.info/programs/public-housing/public-housing-minimum-rent-and-hardship-exemption-requirements-toolkit/ and the specific additional circumstances that qualify as qualifying financial hardships in the PHA's or Multifamily housing (MFH) owner's ACOPs (Admissions and Continued Occupancy Policy), Administrative Plans, or Tenant Selection Plans, as applicable; Circumstances that always constitute a qualifying financial hardship are detailed in 24 CFR 5.630(b)(1)(i) through (iv); additional circumstances are provided by the housing provider in the PHA's or MFH owner's ACOPs, Administrative Plans, or Tenant Selection Plans, as applicable. 8 Section 3(a) United States Housing Act of 1937, as amended by section 102 of the Housing Opportunity Through Modernization Act of 2016 (HOTMA), Public Law 114-201, 130 Stat. 782. Also see, HUD's implementing regulations at 24 CFR 5.657(c)(2); 882.515(b)(2); 891.410; 960.257(b)(2); and 982.516(c)(2). The proposed rule included a requirement that the 30-day notice include instructions on how tenants can cure lease violations for nonpayment of rent; the alleged amount of rent owed by the tenant and any other arrearages allowed by HUD; the date by which the tenant must pay rent and arrearages to avoid the filing of an eviction; information on how tenants can recertify their income; how tenants can request a minimum rent hardship exemption, if applicable; and in the event of a Presidential declaration of a national emergency, such information as required by the Secretary. HUD also recommended that PHAs and owners provide rental repayment agreements to tenants as an alternative to requesting lump-sum payments for past due amounts and required PHAs to include information about how to switch from flat rent to income-based rent. Additionally, the proposed rule reminded PHAs and owners that the 30-day notice must be provided in accessible formats to ensure effective communication with individuals with disabilities and in a form to allow meaningful access for individuals with limited English proficiency (LEP). The proposed rule explained that the 30-day notice requirement sets a minimum requirement so that PHAs and owners can provide a longer notice period at their discretion. HUD stated that it will issue sample language PHAs and owners may use, but PHAs and owners are also permitted to draft their own notices as long as they include the required contents. HUD further noted that the requirements under this rule, including the requirement that the 30-day notice may run consecutive to any additional State or local notice requirements if required by State or local law, do not preempt any State or local law that provides greater or equal protection for tenants. Lastly, the proposed rule emphasized that PHAs and owners must amend all current and future leases to incorporate the 30-day notice requirement for nonpayment of rent and therefore need to provide tenants with notification of changes to the lease under existing requirements in 24 CFR 880.607(d) and 966.3. 9 9 Section 880.607(d) requires that an owner, when modifying a lease, serve appropriate notice to tenants at least 30 days prior to the last date on which a tenant has the right to terminate tenancy. This provision applies to PBRA projects under 24 CFR parts 880, 881, and 883 (the New Construction, Substantial Rehab and Housing Finance Agency (HFA) programs). Section 966.3 requires a PHA to provide at least 30 days' notice to tenants of proposed changes to the lease, and an opportunity for tenants to present written comments. II. This Final Rule This final rule adopts the proposed rule with the following revisions based on public comments. First, to clarify the timing of the 30-day notice, HUD is revising 24 CFR 247.4(c) and adding new §§ 880.607(c)(7), 884.216(e), and 966.4(r). The revised and added language states that a PHA or owner must not provide tenants with a termination notice before the day after the rent is due according to the lease. Also, a PHA or owner must not proceed with filing an eviction if the tenant pays the alleged amount of rent owed within the 30-day notification period. 10 Second, HUD uses clarifying language to explain that notification must be provided before a formal judicial eviction can be filed in 24 CFR 247.4(e)(1), 880.606(b), 880.607(c)(6)(i), 884.215, 886.216(d)(1), 886.127(c), 886.327(c), 891.425(d), and 966.4(l)(3)(ii)(A). 10 24 CFR 886.128 and 891.430 applies the provisions in 24 CFR part 247 for termination of tenancy. Lastly, this final rule revises 24 CFR 247.4(e)(1), 880.607(c)(6)(i), 884.216(d)(1), and 966.4(1)(3)(ii)(A) to require the 30-day notice include an itemized amount, which is separated by month, of alleged rent owed by the tenant, along with any other arrearages allowed by HUD and included in the lease which must also be separated by month, and the date by which the tenant must pay the amount of rent owed before a formal judicial eviction can be filed for nonpayment of rent. The arrearages, which might include late fees or other fees, must also be itemized separately from the alleged rent amount owed by the tenant. 11 If the tenant pays the full amount of the alleged rent owed but not the arrearages, the nonpayment will still be considered cured, and an eviction for nonpayment of rent cannot be filed. This will alleviate confusion among tenants, PHAs, and owners about when and how much is due to avoid an eviction filing for nonpayment of rent. However, HUD emphasizes that the protections in this rule do not apply to other types of evictions that result from non-rent lease violations, such as nonpayment of arrearages if allowed under the applicable HUD program and specified in the lease. 12 11 See Non-Rent Fees for Subsidized Multifamily Housing Programs and Non-Rent Fees for Public Housing https://www.hud.gov/sites/dfiles/Housing/documents/Existing_Policy_on_Non-Rent_Fees_for_Subsidized_Multifamily_Housing_Programs.pdf; https://www.hud.gov/sites/dfiles/PIH/documents/PH%20Non-Rent%20Fees%20Chart_Final.pdf. 12 Evictions for certain arrearages are not permissible under certain HUD programs. See, e.g., HUD Handbook 4350.3: Occupancy Requirements of Subsidized Programs (Change 4—November 2013), p. 6-39, “An owner must not evict a tenant for failure to pay late charges.” HUD also reiterates in this final rule that HUD strongly recommends the best practice of entering into a rental repayment agreement as an alternative to a lump-sum payment for past due amounts. PHAs must also include information in the 30-day notification about how to switch from flat rent to income-based rent. Additionally, HUD reminds PHAs and owners that the 30-day notice must be provided in accessible formats to ensure effective communication for individuals with disabilities, and the notice must provide meaningful access for persons with LEP. PHAs and owners must also comply with the nondiscrimination requirements contained in title VI of the Civil Rights Act of 1964 and section 504 of the Rehabilitation Act of 1973 (section 504) along with HUD's regulations implementing those laws. Title VI's requirements with respect to national origin discrimination including meaningful access for people with limited English proficiency are explained in HUD's “Final Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons” issued on January 22, 2007, and available at https://www.hud.gov/sites/documents/FINALLEP2007.PDF. HUD also suggests the 30-day notice advise individuals of their right to request reasonable accommodations, include information on how individuals with disabilities can request a reasonable accommodation, and include a point of contact for reasonable accommodation requests. III. Severability It is HUD's intention that the provisions of this rule operate independently of each other. The purpose of this rule is to require that PHAs and owners provide written notification to tenants facing eviction for nonpayment of rent 30 days prior to filing a formal judicial eviction procedure. In the event that this rule or any portion of this rule is ultimately declared invalid or stayed as to a particular program, it is HUD's intent that the rule nonetheless be severable and remain valid with respect to those programs not at issue. Additionally, it is HUD's intention that any provision(s) of the rule not affected by a declaration of invalidity or stayed shall be severable and remain valid. HUD concludes it will separately adopt all of the provisions contained in this rule. IV. The Public Comments The public comment period for the proposed rule ended on January 30, 2024. HUD received 316 comments. These comments were received from individuals, landlords, tenants, property owners (“owners”), housing authorities, housing cooperatives, non-profit housing organizations, non-profit organizations representing seniors or individuals with disabilities, housing associations, case managers for individuals experiencing homelessness, churches, law firms, etc. The public comments are discussed in four categories: comments in support of the rule, comments in opposition to the rule, suggested changes and clarifications to the rule, and alternative solutions and issues. A. Comments in Support of the Rule General Support Several commenters generally supported the proposed rule. Many commenters said the rule is a step in the right direction. One commenter stated that this rule is consistent with the history of tenant-landlord law which balances the landlord's right to reclaim a property over nonpayment of rent with the right for the tenant to pay the arrears to save their housing. Many commenters noted their support for this rule, stating that families are struggling financially and housing instability is increasing. A commenter stated that those who live in government assisted homes are already seeking help and struggling to get by. The commenter stated that average income has not kept up with recent financial hardships such as the pandemic and rising cost of living and therefore tenants' housing options are very limited if they are evicted. A commenter noted that this rule will add important protections for America's most vulnerable populations including children, families of color, and victims of domestic abuse. Another commenter stated the 30-day notification period is helpful to avoid evictions for those with low housing security. One commenter said that the rule is a great idea especially since people with children are struggling financially. Additionally, a commenter stated that the rule comes during a time of record homelessness and unaffordable housing, and that we must tackle these issues from a moral and just standpoint. Another commenter stated that the rule honors the challenges that Americans face such as unemployment, disabilities, low income, and the healthcare crisis. One commenter cited a survey that found that HUD evictions are returning to pre-pandemic levels or higher, underscoring the need to formalize the proposed rule. 13 Another commenter cited an article noting that eviction filings are up an estimated 50% compared to pre-pandemic averages. 14 The commenter pointed to the large number of evictions by PHAs in Omaha, New York City, Baltimore, and Massachusetts. 13 National Law Housing Project, “Rising Evictions in HUD-Assisted Housing” (2022). 14 Michael Casey and R.J. Rico, Eviction filings are 50% higher than they were pre-pandemic in some cities as rents rise, Associated Press (Jun. 16, 2023), https://apnews.com/article/evictions-homelessness-affordable-housing-landlords-rental-assistance-dc4a03864011334538f82d2f404d2afb. A commenter in Connecticut stated that rent and other costs of living continue to rise in the State with inflation making it harder for tenants to maintain housing stability. The commenter also stated that rent has increased 33% since 2017 and 53% of tenants are already cost-burdened and spending 30% of their income on rent. The commenter expressed that more families in Connecticut are facing eviction than prior to the pandemic. 15 The commenter also stated that advancing policies to keep people housed will benefit children and reduce stress for caregivers. The commenter cited the Connecticut Department of Education which reported that 2,516 students experienced homelessness in the 2022-2023 school year. 15 The commenter cited to https://www.ctdata.org/evictions-report. Another commenter pointed to data showing that 32% of adults in Colorado are living in households where the likelihood of eviction or foreclosure within the next two months is distressingly high, and nearly 56,000 households are behind on rent, impacting 45,000 children. A few commenters noted the struggle for families to find affordable housing and that many Americans are cost burdened, spending more than 30% of their income on rent. A commenter noted that high-cost burdens were most prevalent among very low-income tenants and households of color and that families with young children are disproportionately impacted by eviction. Commenters noted that this rule would align non-payment requirements across HUD programs. A commenter said that a uniform 30-day notice standard will provide clarity and consistency for landlords, potentially reducing wrongful eviction claims. Commenters also stated that the rule will help individuals and families remain in their current homes and provide protection from homelessness. A commenter stated that the rule will reduce housing instability for tenants of public housing and PBRA properties. Additionally, commenters noted that this rule will reduce evictions and its consequences related to finding subsequent housing, maintaining employment, accessing education and medical care. HUD Response: HUD appreciates the comments and recognizes the trends in the rental market that may be increasing people's housing cost burdens and its downstream effects that may result in homelessness. Data from the Census' Household Pulse Survey from March 2024 suggests that nearly five million renter households in the United States are behind on their rent and nearly two million fear eviction in the next two months. 16 Renters living in HUD-assisted housing have some protections from evictions, such as the ability to recertify their income. However, it has been reported to HUD that it can take a significant amount of time to work through the administrative process and to resolve issues that routinely come up for assisted households, such as problems meeting annual recertification deadlines, supplying the required paperwork, or insufficient information about how to obtain a hardship exemption. Providing assisted households with information about accessing additional rental assistance, or other emergency funding, and additional time to take advantage of these programs enhances the protections already in place and gives households a better chance to resolve their nonpayment of rent with the housing provider. 16 HUD analysis of data collected between March 5, 2024, and April 1, 2024, through the Census Household Pulse Survey . Eviction Harms Many commenters wrote about the detrimental effects of evictions. One commenter cited an article stating that eviction is associated with loss of income, onset of depression, aggravation of mental illness, increased substance abuse, domestic violence, marital breakdown, accidents and disease, decreased school performance, and homelessness. 17 Another commenter also cited to an article explaining that evictions can have a detrimental effect on housing stability and a tenant's health and well-being. 18 17 The commenter cited to Collinson and Reed, “The Effects of Evictions on Low-Income Households,” New York University School of Law (2018). 18 The commenter cited to Collinson, Robert, John Eric Humphries, Nicholas Mader, Davin Reed, Daniel I. Tannenbaum, and Winnie van Dijk. 2023. “Eviction and Poverty in American Cities”. 30382; Desmond, Matthew. 2016. “Evicted: Poverty and Profit in the American City.” New York: Broadway Books; Graetz, Nick, Carl Gershenson, Sonya R. Porter, Danielle H. Sandler, Emily Lemmerman, and Matthew Desmond. 2023. “The Impacts of Rent Burden and Eviction on Mortality in the United States, 2000-2019.” Social Science & Medicine 340(October 2023):116398; and So, Wonyoung. 2023. “Which Information Matters? Measuring Landlord Assessment of Tenant Screening Reports.” Housing Policy Debate 33(6):1484-1510. Commenters stated that eviction records will make it more difficult to keep and find housing. Some commenters stated that those who live in government assisted homes are already seeking help and struggling to get by and eviction often means the loss of the only housing the tenant can afford. A commenter said that an eviction filing, no matter how the case is resolved, will show up on tenant screening reports every time the tenant applies for rental housing in the future and can prevent tenants from finding housing. A few commenters stated that tenant applications may be rejected following an eviction from a PBRA property for three years, or more if the amount is still owed. Commenters also noted that eviction filings can negatively impact credit scores, which broadly impact tenants' lives. A commenter noted the loss of connections to community support that comes with evictions. One commenter noted that this rule will help protect the vital human-animal bond that tenants share with pets and companion animals. A commenter noted that pets are also impacted by evictions because pets are more likely to be surrendered to shelters when a family faces unstable housing. The commenter noted that pets may be locked inside rental units because of legal lockouts and property managers may release pets or tie them up alone next to tenants' personal possessions on the street. One commenter explained that many tenants living in Durham, North Carolina, only require one emergency to create a financial hardship, and many of them are women of color with nontraditional jobs. The commenter stated that when these tenants have to go through the eviction process their income is further reduced due to court costs and taking time off of work for any judicial proceedings. Many commenters noted that evictions can disrupt a positive relationship with public housing staff. Commenters also noted the strain that evictions have on landlords, including court costs and fees, the costs of turning over units, and that landlords are often unable to collect the unpaid rent. One commenter stated that evictions are costly in time and money for public housing agencies. Additionally, many commenters noted the strain evictions have on government and social service providers such as health care systems and shelter systems. One commenter quoted the Delaware Legislature stating that eviction proceedings create significant costs for State and local governments related to shelters, education, health care, transportation, and foster care. HUD Response: HUD agrees with commenters that evictions can cause detrimental harm. Research has shown that evictions can cause an increased risk of homelessness, job loss, and long-term negative consequences, especially for children. 19 Through this rule, HUD seeks to reduce the harms that evictions cause by curtailing preventable and unnecessary eviction filings and evictions for nonpayment of rent. 19 See background section of the proposed rule at 88 FR 83877. Homelessness and Housing Insecurity Commenters also stated that the rule will help individuals and families remain in their current homes and provide protection from homelessness. Another commenter explained that giving tenants time to get their affairs in order is the difference between an individual remaining stable, employed, and housed, and losing everything due to homelessness. Another commenter stated that homelessness has been on an upward trend since 2017 and the number of people experiencing homelessness on a single night increased by 12% between 2022 and 2023. One commenter pointed to articles and reports stating that because those who rely on public housing have very low income, they are more likely to become unhoused when evicted. The commenter noted the harms of evictions and homelessness, including the risk to unhoused lives from extreme heat and cold. Further, the commenter stated that in Detroit, the systems that unhoused people rely on are dysfunctional and can be traumatizing. The commenter also stated that the lack of affordable housing in Detroit means that unhoused people spend longer times in shelters and temporary housing, and shelters and emergency services in Detroit have operated at or near capacity for years. A commenter stated that low-income renters are more severely cost burdened and are often paying more than 50% of income towards housing costs, leaving limited resources for other necessities. Additionally, a commenter stated that housing in their community is scarce for low to moderate income families and that housing security is important to a thriving economy. The commenter also explained that they have witnessed housing insecurity in their workplace and how it negatively impacted employees' performances and has led to unemployment. HUD Response: HUD agrees with the commenters' concerns about homelessness and appreciates the commenters' support for the rule. There is evidence that over the past year, eviction filings increased in many parts of the country, as did the incidence of homelessness. The Eviction Lab tracks eviction filings in 32 cities across the country and found that eviction filings increased from 2022 to 2023 in 25 of the 32 cities. 20 The number of people experiencing homelessness on a given night, as documented through local point-in-time counts, also increased between 2022 and 2023, by approximately 12 percent. 21 20 https://evictionlab.org/ets-report-2023/. 21 https://www.huduser.gov/portal/sites/default/files/pdf/2023-AHAR-Part-1.pdf. According to HUD's 2023 Worst Case Needs Report to Congress, a record 8.53 million renter households were severely housing cost burdened—meaning they paid more than half their income on rent—or lived in substandard housing, or both. Thus, there is a significant number of households that may be on the verge of homelessness due to high housing costs and an unexpected cost or loss of income could increase their likelihood of eviction and ultimately homelessness. Although the increase in homelessness largely reflects the shortage of affordable housing, eviction can be a contributing factor. Several studies have found that eviction substantially increases the likelihood that a family will subsequently experience homelessness. 22 Most recently, a major study linking eviction records to other administrative datasets in New York and Chicago has found that an eviction order increases the probability of using an emergency shelter by 3.4 percentage points in the year following the eviction, which translates to a more than 300 percent increase compared to those who are not evicted. 23 22 Collinson, R., & Reed, D. (2018), The effects of evictions on low-income households, https://www.law.nyu.edu/sites/default/files/upload_documents/evictions_collinson_reed.pdf. Richter, F.G.C., Coulton, C., Urban, A., & Steh, S. (2021). An integrated data system lens into evictions and their effects. Housing Policy Debate, 31(3-5), 762-784. 23 Robert Collinson, John Eric Humphries, Nicholas Mader, Davin Reed, Daniel Tannenbaum, Winnie van Dijk, Eviction and Poverty in American Cities, The Quarterly Journal of Economics, Volume 139, Issue 1, February 2024, Pages 57-120, https://doi.org/10.1093/qje/qjad042. The Impact on People With Disabilities, Seniors, and Lower-Income Families Commenters noted that a 30-day notice would be beneficial to people with disabilities. A commenter said that people with disabilities often have fewer housing options because they have additional factors to consider in finding an apartment, such as proximity to a bus stop, lower counters, or a roll-in shower. The commenter also said that an eviction on a physically disabled person's record could make it nearly impossible for that person to find adequate housing and 30 days would give the tenant more time to find adequate housing if they are required to vacate. The commenter noted that 30 days would allow tenants with mental or intellectual disabilities time to seek assistance from an agency or attorney. Another commenter said that people with disabilities often rely on Supplemental Security Insurance or other public benefits which are not enough especially with the increase of rent and cost of living. The commenter stated that if disabled individuals do become homeless, they have a harder time getting rehoused and if they move constantly, they risk losing their benefits and risk their health. One commenter noted that people with disabilities who face eviction face a specific danger of landing in an institution where they are seen as “less than” and where it can be difficult to leave. The commenter stated their support for this measure because it will reduce the chances of this happening and is not an undue burden on owners and managers. Other commenters noted that the 30-day notice is particularly essential for older adults and people with disabilities who have limited access to work to quickly pay off the balance or who are on a fixed income. Another commenter noted that the 30-day notice period would be especially beneficial to older adults on fixed incomes. The commenter cited studies stating that nearly 11.2 million older adults are spending more than 30% of their income on rent and that older households of color are even more at risk. One commenter noted that the number of elderly renters is growing and expected to continue growing, especially among Black renters, leading to more potential evictions in the future. Another commenter noted that adults aged 55 and older accounted for 35% of total evictions in the country in 2023 and made up 30% of the homeless population. One commenter noted that for these populations, homelessness can be fatal because of the fragility of older adults. The commenter gave an example of an older Black man who secured legal assistance and avoided eviction by setting up a payment plan during the 30-day notice period provided by the CARES Act. A commenter cited a report that showed eviction filings during the COVID-19 pandemic were concentrated in neighborhoods with predominantly lower income immigrants and renters of color, and that statewide eviction filings are nearly back to pre-pandemic levels. A commenter noted that the 30-day notice requirement would offer a potentially life-saving buffer to tenants escaping domestic violence. HUD Response: HUD agrees that the rule is beneficial to individuals with disabilities and emphasizes that housing providers are required to provide reasonable accommodations at any time during tenancy, not just prior to eviction. PHAs and owners are required to provide and pay for reasonable accommodations unless it would result in an undue financial and administrative burden or a fundamental alteration of the program, service, or activity. If an undue burden or fundamental alteration exists, PHAs and owners are still required to provide other reasonable accommodations that would not result in an undue financial and administrative burden on the particular recipient and/or a fundamental alteration of the program, service, or activity. 24 For example, one such common reasonable accommodation that has helped families avoid eviction is to allow persons with disabilities who receive Social Security Income or other benefits to pay their rent after the first of the month to align with receipt of those payments. 24 Section 504 of the Rehabilitation Act of 1973 is a Federal law, codified at 29 U.S.C. 794; See also https://www.hud.gov/program_offices/fair_housing_equal_opp/disabilities/sect504faq#_Reasonable_Accommodation. The Fair Housing Act's requirements to provide reasonable accommodations also apply to PHAs and assisted owners. The Fair Housing Act is codified at 42 U.S.C. 3601-3619, 3631. PHAs must also adhere to the requirements of title II of the Americans with Disabilities Act, which includes making reasonable modifications in policies, practices, or procedures when necessary to avoid disability discrimination. Title II of the Americans with Disabilities Act is codified at 42 U.S.C. 12131-12165. HUD also agrees with commenters that tenants, such as seniors and people of color, may be more susceptible to eviction, especially if they are on a fixed income. This rule helps to ensure more housing security for tenants living in the HUD-assisted housing programs covered under this rule. Use of Evictions To Collect Rent A commenter, who strongly supports the rule, cited various articles concerning PHAs and their repeated eviction filings on the same tenants to collect rent without evidence that such behavior is effective. 25 A commenter said the additional time to gather funds would benefit tenants and owners who use eviction filings as a means to collect rent. Commenters stated that according to research and their experience, eviction filings are used as a rent collection strategy because most evictions do not result in tenant removal. 25 The commenter cites to Garboden, Philip M.E., and Eva Rosen. 2019. “Serial Filing: How Landlords Use the Threat of Eviction.” City & Community 18(2):638-61; Leung, Lillian, Peter Hepburn, and Matthew Desmond. 2021. “Serial Eviction Filing: Civil Courts, Property Management, and the Threat of Displacement.” Social Forces 100(1):316-44; Ellen, Ingrid Gould, Ellie Lochhead, and Katherine O'Regan. 2022. Eviction Practices across Subsidized Housing in New York State: A Case Study. New York; Gromis, Ashley, Ian Fellows, James R. Hendrickson, Lavar Edmonds, Lillian Leung, Adam Porton, and Matthew Desmond. 2022. “Estimating Eviction Prevalence across the United States.” Proceedings of the National Academy of Sciences 119(21):1-8; and Leung, Lillian, Peter Hepburn, James Hendrickson, and Matthew Desmond. 2023. “No Safe Harbor: Eviction Filing in Public Housing.” Social Service Review 97(3):456-97. One commenter stated that a PHA in North Carolina initiated 867 evictions filings for nonpayment of rent in 2019 and only 63 evictions were actually completed. The commenter believed that the evictions were being used as a rent collection tool and stated that if tenants were given sufficient time they were able to cure their nonpayment of rent, but the eviction filings stayed on the tenants' public records for seven years and negatively impacted employment, credit, and housing putting them at risk for homelessness. The commenter explained that a local advocacy organization sought to change the PHA's eviction policy to send a notice 14 days after being late for rent and filing an eviction 21 days after being late. The local advocacy organization unsuccessfully requested that the PHA's board (1) increase the days before filing an eviction to 45 days; (2) review all accounts for inaccuracies; (3) document three attempts at meeting and communicating with the tenant concerning their non-payment; and (4) encourage tenants to use the grievance procedure. HUD Response: HUD thanks the commenters for their comments. HUD believes this rule encourages PHAs to work with families to resolve nonpayment of rent prior to filing evictions. HUD also encourages PHAs to review and evaluate policies, procedures, or practices to ensure tenants are informed on how to recertify their income in a timely manner and apply for hardship exemptions. HUD reminds PHAs of their obligation to include information to tenants in the termination notice of their right to a grievance hearing under 24 CFR 966.4(l)(3)(ii), 966.51(a)(1), and 966.53(a). Tenants Need Time and Resources Many commenters stated that this rule would help eliminate fast evictions and provide tenants, especially low-income households, with time to gather resources and to secure funding for their rent through personal means, community resources, or time to find alternate housing. A commenter said that the rule will give tenants time to arrange for alternative accommodations or negotiate a repayment plan. One commenter cited research from the Eviction Lab that notification requirements can be an effective tool in reducing eviction rates and providing tenants with time and information needed to address nonpayment violations. 26 A commenter noted that nonpayment of rent often stems from unexpected life events and providing time for renters to recover without losing their homes is critical. Another commenter stated that sometimes tenants who have not paid rent will have the funds to pay rent within a couple of weeks. 26 Lillian Leung et al., Serial Eviction Filings: How Landlords Use the Courts to Collect Rent, 2020. Additionally, a commenter said that the combination of available legal representation, time to work with lawyers, and time to pay arrears before trial effectively deters Maryland landlords from filing eviction cases and aids housing stability. One commenter demonstrated the impact of the 30-day notice by sharing the story of a client who was facing eviction after losing affordable childcare and being forced to spend more of their paycheck on babysitters. The commenter noted that with the 30-day notice, the tenant was able to seek legal assistance, apply for rental assistance, and avoid eviction. A commenter stated that getting rental assistance is a multi-staged process and succeeds only when renters have time to see it through. Another commenter stated that because rent is so high, it takes multiple agencies within the community to provide the assistance, a process that can take several weeks. A nonprofit organization commented that the services it provides could not exist without the additional notice time. The commenter noted that its work connecting municipal financial empowerment services to tenants facing eviction showed that financial counseling can help sustain and build on the initial stabilizing effects of emergency housing assistance services and there are opportunities for stronger coordination across eviction prevention services. The nonprofit noted that its clients who engage with one-on-one financial counselors after receiving eviction assistance were able to improve credit scores, reduce consumer debt, and build savings. A commenter said that they recently worked with a single mother living in HUD-subsidized housing who lost her minimum wage job and fell behind on rent. Even though she was back to work less than a month later, her landlord gave her an eviction notice after three days, per California law. The commenter said they were able to work with the tenant and other community organizations to inform the landlord of this 30-day rule, apply for rental assistance, and set up a payment plan. Because of the additional time, the landlord was able to be paid and the family remained housed. The commenter also stated that there are many low-wage workers and elderly in their county who rely on HUD-supported housing and need more than the three days allotted under California law. The commenter noted that the additional time would alleviate the burden on rental assistance agencies that are forced to spend additional time, effort, and funding on negotiating with landlords to accept rent payments after the third day. Another commenter stated the State law in Ohio only provides a three-day notice, making it nearly impossible for rental offices to process interim recertification and minimum hardship exemption requests, work out a repayment deal with the landlord through the 10-day meeting or grievance process, pay back the amount owed, have time to locate alternate housing, or seek new employment or unemployment benefits which will aid in paying the balance owed. Several commenters noted that the 30-day notice required by the CARES Act has proven indispensable to local rental assistance efforts which takes several weeks to complete. A commenter noted that it represented a tenant who fell behind on rent due to a hospitalization but with the time given to them under the CARES Act, they were able to find legal assistance, file a reasonable accommodation request, and negotiate a repayment plan with the tenant's landlord. The commenter noted that no financial burden was placed on the landlord since they received what they were owed, and the tenant avoided eviction and potential homelessness, a consequence that would have been especially detrimental because the tenant was being treated for an illness. HUD Response: HUD appreciates the comments and agrees that providing tenants with additional time will help to cure nonpayment of rent violations, preventing unnecessary eviction filings and evictions. Tenant Rights and Judicial Process Some commenters expressed that tenants deserve the additional time to take advantage of rent relief resources and the time to take advantage of legal support and their due process rights to properly defend themselves against eviction. A commenter expressed that the 30-day notice would prevent landlords from using self-help evictions to put families on the street without due process. Another commenter stated that giving tenants more notice of an eviction due to nonpayment of rent would help tenants fully access their due process rights. Other commenters stated that a 30-day notice would ensure tenants are treated with dignity and respect, and that tenants are given a fair chance to sustain housing. Another commenter stated that a 30-day notice will provide support to organizations to assist with a fair and just judicial process. A commenter stated that the implementation of the rule is imperative and that it will uphold the principles of fairness and compassion. The commenter explained that one of their program participants had only received a three-day notice from their housing provider to vacate due to issues with rent. This contributed to the individual being quickly subjected to homelessness. Additionally, the housing provider kept the individual's deposit, contributing to their financial and emotional distress. The commenter stated that if the individual had more notice, they could have rectified their rent issues or considered alternative housing options. A commenter said that technological advances have made things more difficult in housing courts. The commenter stated that providing 30-day notice will give tenants time to negotiate and acquire assistance from a qualified attorney which might help them avoid an unnecessary eviction. Another commenter stated that giving tenants additional time to respond to an eviction notice will benefit all parties involved, including the government. The commenter cites to a report by the State legislature of Connecticut, which launched the right-to-counsel program and saved the State between $5.8 and $6.3 million between January and November of 2022. 27 27 The commenter cites to Rosa DeLauro proposes wide-scale expansion of right-to-counsel ( ctmirror.org ) Evictions Report—CTData; CT right to counsel program saved state millions, report finds ( ctmirror.org ); Report Shows Connecticut's Right-to-Counsel Program to Be Effective at Preventing Evictions. A commenter said the 30-day notice would help their program more effectively resolve recertification issues and uphold tenants' rights because it would provide more time for tenants and legal aid providers to investigate facts and prepare defenses for any eventual trial. The commenter noted that it is difficult for tenants to figure out landlords' licensure status and how to raise a successful rent escrow claim. The commenter said that tenants of subsidized housing face even more complexity due to frequent procedural problems in the income recertification process and the time it takes property managers to provide tenant files. HUD Response: HUD appreciates the comments and agrees that providing tenants with additional time will help to cure nonpayment of rent violations, preventing unnecessary eviction filings and evictions. Notification Requirements Currently in Place Commenters said that public housing agencies and owners have already demonstrated their ability to comply with a 30-day notice requirement. Commenters also noted that the 30-day notice is not more onerous for housing providers than the existing requirements under the CARES Act which has been in effect for over three years and covers similar programs as this rule. A commenter stated that certain HUD programs already operate under a 30-day notice requirement and when the notice expires without any resolutions, a detainer summons is filed which makes it easier for housing managers with multiple properties and different funding. A commenter noted that various states and localities have notice periods ranging from 7 to 30 days and that more than a quarter of households assisted by HUD reside in areas where an 8 to 14-day notice period is already mandatory. One commenter reiterated that the vast majority of tenants in HUD-assisted households live in states that require notice 7 days or less before eviction, while a mere 3% live in states that require 15-30 days. Another commenter said they had no issue with the rule as a 30-day notice requirement is already implemented in many municipalities. One commenter said that a 30-day notice requirement has already been implemented in Oregon and it is a wonderful benefit to tenants. A commenter said that most Tennessee renters are entitled to no notice before they are brought to court for nonpayment because state law allows landlords to include a waiver of notice rights in leases. The commenter noted that they have worked with tenants who misunderstand the law and are not aware there is no notice period until they are already in court. Furthermore, the commenter said that many of these tenants would have been able to pay all or most of what they owe, had they been allowed a few days or weeks. The commenter also said that even though the CARES Act has a similar notice requirement to this rule and applies to the same public housing and PBRA properties as this rule, the CARES Act requirements are not universally followed or enforced. The commenter cited to a 2022 National Housing Law Project poll which stated that 88% of surveyed attorneys reported inconsistent or no court enforcement of the CARES Act 30-day notice requirement. 28 28 The commenter cites to National Housing Law Project, “Rising Evictions in HUD-Assisted Housing: Survey of Legal Aid Attorneys” at 1 (July 2022), https://www.nhlp.org/wp-content/uploads/HUD-Housing-Survey-2022.pdf. The commenter also noted that in Middle Tennessee, counsel for most landlords interpret the 30-day notice requirement of the CARES Act to have expired with the 120-day eviction moratorium which is counter to HUD's interpretation of the law. The commenter stated that making the 30-day notice requirement final would create a clear and easily enforceable rule, preventing unlawful evictions and alleviating attorney and judge burden when presented with conflicting accounts of interpretation and application. Another commenter echoed this statement noting that non-compliance with the CARES Act 30-day notice requirement is widespread in Maryland because few property managers understand the requirement either per the CARES Act or the October 7, 2021, interim final rule (“Extension of Time and Required Disclosures for Notification of Nonpayment of Rent”). A commenter said that evictions in Texas are increasing and even though some municipalities have passed local ordinances to confront rising evictions, a State bill prohibiting local regulation of evictions threatens those protections. The commenter stated that this rule would be life changing for Texas tenants who would otherwise receive 3-day notices, no opportunity to cure, and the potential for being homeless within 21 days after a missed rent payment under State law. A commenter stated that a 5-day notice, 14-day notice, and no notice has shown to be insufficient. Another commenter said that many eviction cases in Maryland are filed after one missed payment, but the amount of eviction filings decreased when Maryland gave tenants facing eviction the right to counsel and 10-day notice including information on rental assistance and legal services. The commenter noted that even with the 10-day notice requirement, many tenants in Maryland receive notice late or not at all. One commenter stated that Ohio has a short notice requirement which does not afford enough time to obtain rental assistance funds to avoid homelessness. Another commenter noted that Florida law requires 3-day notice, but it takes several weeks to complete an application at a local rental assistance program. The commenter stated that the 30-day notice requirement under the CARES Act allowed Florida tenants to apply for rental assistance and negotiate payment plans allowing tenants to remain in their homes. HUD Response: HUD agrees that PHAs and owners have already demonstrated their capacity to comply with a 30-day notice requirement prior to an eviction filing and that a rule codifying the requirement would provide more clarity to housing providers in order to achieve uniform application of HUD's notification requirements. As demonstrated by HUD's interim final rule and the provisions under the CARES Act, PHAs and owners were able to provide the required minimum 30-day notice to terminate a lease for nonpayment of rent during and after the COVID-19 pandemic. As commenters have mentioned, several HUD programs already require 30-day notice for certain types of evictions. Properties covered under Section 8 Project-Based Rental Assistance require 30-day notice when the grounds for eviction is “other good cause.” State law and the lease govern the length of the notice period for material noncompliance with the lease, noncompliance with State law, or criminal activity/alcohol abuse. Section 202 and section 811 programs require 30-day notice for all eviction grounds. HUD also acknowledges that states and local jurisdictions may have specific timeframes for which a notice to vacate for nonpayment of rent, or other violations of the lease, may be given and that this rule may be beneficial to tenants and owners in places that have shorter or no notification periods. This rule provides clarity and consistency to tenants and will assist PHAs and owners to remain compliant with HUD regulations. Financial Impacts on Landlords Commenters noted that evictions are expensive for landlords and they often never get back unpaid rent from evicted tenants. Commenters said this rule would help mitigate landlords' eviction costs which should be taken into account when weighing the costs and benefits of the rule. A commenter noted that the cost to landlords to evict a tenant can range between $2,500 and $12,988, while past due rents may only range from $600 to $1,200. A commenter also said that under the CARES Act notice requirements, there was a marked decrease in eviction rates without any substantial financial burden to housing providers. Another commenter stated that support would still be provided to landlords through programs which would prevent major negative financial effects. A commenter stated that they balance the need to collect rent with the acknowledgement that tenants struggle to pay rent and evictions do not align with their policy of ensuring housing stability. In 2022, the commenter said they implemented a policy to provide its tenants with arrears above a certain threshold with a 30-day notice of termination for nonpayment of rent. The commenter explained that tenants are offered the option to enter into reasonable repayment agreements and are not served a notice of termination for arrears below the threshold. The commenter stated that given its experience with this policy, it is important that PHAs across the country be subject to this rule and that HUD should consider providing technical assistance and other resources to support training and oversight of third-party owners/management companies and for PHAs. A commenter said that the goal should be to keep people housed and not to protect landlords' profits through quick turnarounds with renting. Commenters stated that the concerns of a potential financial and administrative burden to owners does not outweigh the importance of providing tenants with additional time to respond to an eviction notice. A commenter expressed that housing is a human right and should be treated that way. Another commenter noted that effects of heightened administrative costs for landlords are expected to be nominal when considering the advantages of the rule. HUD Response: HUD agrees that evictions can be costly for both tenants and landlords; however, HUD believes that this rule strikes a balance between potentially increasing some of the financial impacts on PHAs and owners, and supporting families who need additional time to address financial issues that result in nonpayment of rent. B. Comments in Opposition to the Rule Several commenters opposed the rule. Some commenters stated that a 30-day notice requirement is unnecessary or unreasonable, that it does not make sense, and that tenants are already aware that their rent is late. A commenter said this rule is an example of something that sounds great in theory but will not work as intended. Another commenter said that the rule is a slippery slope, and that the eviction process should be quickened instead of muddled. HUD Response: HUD disagrees with the commenters, especially in stating that the rule is unnecessary and will not positively impact tenants who seek to cure their nonpayment of rent violations, and that the eviction process should be quickened. As previously discussed in the proposed rule and the Regulatory Impact Analysis (available at regulations.gov in the docket file for this rule), it is estimated that between 1,600 and 4,900 nonpayment related moveouts in Public Housing and PBRA-assisted housing are prevented each year because of the 30-day notice requirements of the CARES Act and HUD's interim final rule. Furthermore, in HUD's experience, tenants do not always know that their rent is late, including when their landlord made an accounting, recertification, or notice error. Financial Burden and Hardships Commenters stated that the rule will be a financial burden or create hardships for landlords, owners, housing commissions, and PHAs, especially small PHAs and those already struggling. Commenters strongly urged HUD to not implement the rule and stated that adopting the rule will cause undue and unnecessary harm to landlords, especially landlords who rely on income from rental properties. A commenter said that the rule will burden a work field that is already overworked and underpaid. Another commenter stated that the rule will tarnish the relationship between the PHA and tenant and eliminate any discretion the PHA has to negotiate. A commenter stated that they do not approve of the rule and think it should only occur when the tenant is being subsidized. Additionally, the commenter said that not all tenants in the Low-Income Housing Tax Credit program (LIHTC) or living in HUD-subsidized housing are unable to pay rent and giving an additional 30 days will set back owners. Another commenter said that many HUD and LIHTC properties are on “shoestring budgets” and this rule will be detrimental to their communities. HUD Response: HUD understands the fiscal impacts of nonpayment of rent to a PHA's or owner's operating budget. HUD believes that a 30-day notification period strikes the appropriate balance that provides enough time for the tenant to cure the lease violation and does not overly burden the PHA and owner. Additionally, many PHAs and owners seem to have demonstrated their ability to comply with the CARES Act and interim final rule and thus should be able to establish systems and procedures to minimize burden. 29 29 See Exhibit 2 of the Regulatory Impact Analysis which demonstrates that rates of owner-initiated move-outs due to nonpayment of rent have remained below pre-CARES Act levels but have also increased between 2022 and 2023 (when most eviction moratoria expired). PHAs, landlords, owners, and housing commissions will still have discretion to file an eviction action for nonpayment of rent if the tenant does not cure the rent owed within the 30-day notification period. The final rule will give both the landlord and the tenant additional time to resolve any nonpayment issue in a constructive manner that will benefit both parties. HUD notes that this rule applies to the public housing, Section 8 Project-Based Rental Assistance, Section 202/162 Project Assistance Contract, Section 202 Project Rental Assistance Contract (PRAC), Section 811 PRAC, Section 811 Project Rental Assistance Program (811 PRA), and Senior Preservation Rental Assistance Contract Projects (SPRAC). Small Housing Providers Commenters said that their small PHAs would be burdened by the rule. A commenter said that if a tenant does not pay their rent, the PHA's rent income goes down 5%. The commenter said if the tenant is given 30 days of notice after missing a payment, the PHA will be missing two months of rent, which they might not be able to recover in court. The commenter further stated that the 30-day notice would add more of a burden on an already over-documented process and that with only two employees, most of the staff's time is spent “taking care of tenants, paperwork, banking, payroll, HUD requirements, and much more.” Another commenter said that the rule's impact on tenants would exacerbate poverty and homelessness and pose a significant threat to small business owners. The commenter also stated that the rule seems to carry risks for citizens and does not have benefits that address broader issues. A commenter said that the eviction process could take months and the expense will be unbearable especially for small housing commissions. Another commenter said that the rule will cripple small rural PHAs since their occupancy and rental amounts are so low. The commenter said that if they have one unit vacant, their occupancy drops to below 95%, so they cannot wait to evict someone for nonpayment of rent. Additionally, a commenter stated that lost rent, tenant charges, staff time, and attorney fees have become an increasing financial burden to small and medium PHAs. A commenter said that as a small PHA in Mississippi, prolonged eviction proceedings lead to months of missed rent payments that are rarely recovered in full. Additionally, the commenter said that without reliable rental income, the PHA would fall short in providing care for tenants and fulfilling HUD's mission. HUD Response: HUD recognizes that small PHAs and owners often have limited staff and resources when operating rental assistance programs. HUD is also aware that smaller PHAs and owners may be more susceptible to financial variations to their operating budgets; and that they may experience a more significant financial impact due to nonpayment of rent by a tenant during the notification period. Due to these reasons, HUD emphasizes the need for PHAs and owners to attempt to work with the tenant to correct any noncompliance with the program requirements and/or establish repayment arrangements with the tenant. Although limited to programs regulated by the Office of Multifamily Housing, owners of Section 8 PBRA, Section 202 PAC, Section 202 PRAC, and the Section 811 PRAC can make a claim to HUD for up to one month's rent, less the security deposit collected, for unpaid rent under the family's lease after the family has vacated the unit. This rule balances the potential for rental income loss through the additional time provided to households to resolve nonpayment of rent with the operating impact to all PHAs and owners. It provides families and PHAs and owners time to work through potential repayment solutions and help families come back into compliance with program requirements to resume their housing assistance. As stated in other public comments, eviction proceedings can be equally—if not more—costly to smaller PHAs and owners. For PHAs and owners, the 30-day notice can be issued without hiring an attorney and may lead to the tenant paying what is owed, extinguishing the need to hire an attorney to address that delinquency at all. Thus, HUD believes that the 30-day notification period will enable more cost-effective measures for both the tenant and PHA/owner. Loss of Rental Income Commenters said that since the 30-day requirement implemented during the COVID-19 pandemic, there has been an increase in past due balances causing lost revenue. A commenter said the impact of the government-mandated eviction mortarium is still being felt and the 30-day notice period is too long. Another commenter said that due to loss in income, housing providers were unable to pay bills such as staff and maintenance, and were not able to turn over units to make them habitable to those on waiting lists. A commenter said the PHAs are already challenged with providing decent, safe, and sanitary housing for those in need in addition to retaining staff. Commenters said the rule will negatively impact underfunded public housing providers and PBRA operators who are unable to recover lost revenue and have few tools to collect rent. Commenters also said that there will be 90-120 days of nonpayment of rent before a tenant can be removed causing PHAs a huge loss in rental income. A commenter stated that it can take 2-3 months to obtain possession of a unit, which causes a huge financial burden to owners. Additionally, commenters said that PHAs cannot afford delays due to this rule. Commenters said that for every dollar in rent, 93 cents is used to cover the costs of operations, such as property maintenance, insurance, staffing, and property taxes. 30 The commenters stated that PBRA funding ensures that tenants' housing costs are consistent, but PHAs continue to see an increase in their expenses. 30 https://www.naahq.org/breaking-down-one-dollar-rent-2023. Another commenter said that in Virginia, owners receive six cents for every dollar they receive in rent, and under this rule, owners will go without income for up to 90 days. The commenter stated that with less income owners do not have money to maintain the community and people will not build low-income housing if they cannot collect rent. A commenter said that as a PHA, they have experienced higher rental loss due to nonpayment in addition to the cost to repair units. Additionally, a commenter stated that apartment communities have been taking a lot of hits due to eviction regulations implemented during the COVID-19 pandemic, and the loss of rent is draining management communities' budgets and frustrating staff. Another commenter said that if the rule is implemented many new landlords who only rent out one property may go bankrupt and we will start to see more investment homes and multifamily properties go into foreclosure. A commenter said this requirement will affect at least two months of utilities at their PHA which may be unpaid because of loss of rent. Commenters said that giving tenants twice the amount of time they already have causes more financial loss in write-offs for PHAs. A commenter also expressed that collection laws go against PHAs and that they can barely collect rent owed. Another commenter stated that the rule does not include financial reimbursement for court and legal fees due to the delay in eviction cases. Additionally, the commenter stated that tenants have learned that when they file an appeal, that adds an additional 45 days to the eviction process. Another commenter said that it can take up to a year for an appeal in their state. Commenters suggested that HUD consider a new type of special claim so owners could recover lost rent accrued during the proposed notice period. Another commenter said they disagree with the rule unless HUD will pay rent while tenants are going through the eviction process. Another commenter said owners still need to pay bills and operate, so HUD should be willing to pay the full contract rent while tenants go through the eviction process. A commenter said that the 30-day notice is causing PHAs and the Federal Government to lose money each year. The commenter stated that if a tenant is unable to afford their rent for one month, they likely will not be able to afford the next month's rent. HUD Response: HUD understands concerns from housing providers that experienced a loss of income due to nonpayment of rent and the impact it has on operating budgets. The Public Housing Operating Fund, which was developed through a negotiated rulemaking, specifically funds agencies based on rents charged, rather than rents collected, so HUD is not able to adjust operating funding for PHAs to account for nonpayment of rent issues. Further, HUD program statutes and regulations only authorize assistance payments for dwelling units under lease by eligible families. Therefore, HUD does not have the authority to make assistance payments, pay contract rent, or otherwise reimburse owners after the termination of tenancy or during eviction proceedings. However, with respect to public housing, PHAs experiencing significant shortfalls in their operating budgets are encouraged to apply for the Shortfall fund. 31 In applicable Multifamily Housing programs, an owner can submit a special claims request only. 32 The owner may then request payment for unpaid tenant rent or other amounts owed under the lease ( e.g., damages), in accordance with program regulations. There is no special claims provision for lost rent accrued for a tenant who continues to reside in a unit after termination of tenancy. 31 Operating Fund (Op-Fund) Shortfall Funding | HUD.gov /U.S. Department of Housing and Urban Development (HUD). 32 Special Claims Processing Guide (HSG-06-01) at https://www.hud.gov/program_offices/administration/hudclips/guidebooks/HSG-06-01. HUD disagrees with the assumption underlying many of these comments that a delay in pursuing a tenant for outstanding rent will necessarily and/or always lead to the tenant accruing more outstanding rent due, that will then not be paid to the landlord. As HUD has explained above, a delay in pursuing a tenant for outstanding rent can provide the tenant the opportunity to pay the outstanding rent before being evicted, leading to less outstanding rent, not more. Similarly, HUD disagrees that if a tenant is unable to afford their rent for one month, they will likely not be able to afford the next month's rent. Often, as alluded to above, there is an error or delay in recertification, which simply needs time to be corrected, or a one-time event that causes a tenant to fall behind, and tenants are able to make up their arrearage when errors in recertification are corrected, reasonable accommodations are enacted, and/or time is provided to secure outstanding balances, which sometimes can come from local nonprofits. Financial Obligations and Cost of Operations Commenters stated that the rule will hurt landlords and their ability to pay their bills, and that there is a lack of understanding of how hard it is to maintain assets. A commenter said that the rule will cause more unpaid rent, attorney fees, and expenses for staff during the judicial process. Another commenter said that in today's inflated economy, PHAs and owners cannot afford significant costs and that the number of nonpayment related moveouts should be mentioned in the rule since they cause substantial additional costs in lost rent and property damage for the PHAs and owners. Commenters also said that PHAs depend on prompt payment in order to meet financial obligations, and the rule would cause an undue financial strain on owners which would jeopardize mortgage payments and put owners at risk for property loss. Additionally, commenters said that during the extended period of 90-120 days to secure a court date for eviction, tenants fall further behind in rent and owners bear the burden of sustaining essential services ( i.e., mortgages, taxes, payroll, and necessary repairs). Another commenter stated that rent is already based on the income of a tenant so an owner should not have to suffer waiting to evict a tenant for non-payment of rent. A commenter expressed that unlike the options that tenants have, owners are subject to withholding of future services and hefty late fees when bills are not paid on time. In response to the rule stating that it is more cost efficient for housing providers to assist tenants to cure nonpayment of rent, a commenter said that “cost efficiency can only be reached if appropriate options are available to cure such nonpayment of rent.” The commenter said that HUD does not recognize that PHAs already provide repayment agreements and hardship exemptions, but without additional funding, these options only temporarily address tenants that are unable or unwilling to pay their rent. A commenter stated that the rule will cause PHAs to go bankrupt as their property's insurance has tripled in the last three years and the cost of materials has increased. Additionally, a commenter said labor and healthcare are also more expensive. A commenter stated that it usually takes 30 days to prepare a unit (clean, repaint, etc.) to get it ready for a new tenant and now PHAs will be missing rent for three months. Another commenter said that their PHA is already under-staffed and over-burdened and if the rule is implemented it will cause the PHA to be less effective and projects to be poorly maintained. Commenters stated that higher rent balances burden community resources that offer emergency rental assistance. One commenter said that chronic underfunding of public housing is the culprit and HUD's $25 million allocation is short of what is necessary to bridge the disparity gap. Additionally, the commenter said that insurance premiums, which have gone up 110% in some States, are furthering the fiscal strain and leave PHAs trying to make ends meet. The commenter stated that HUD has taken steps to decrease COVID-19 funds rather than using those funds for PHAs to address operating issues. A commenter said they hope that HUD gets rid of the 30-day notice requirement since rental assistance is no longer readily available and everyone in public housing is working or receiving social security. HUD Response: HUD understands the financial obligations of PHAs and owners, and how uncollected rent significantly impacts their operating budgets. In addition to other elevated costs, HUD acknowledges the growing cost of operating housing. HUD reminds PHAs of the ability to receive shortfall funding if they are experiencing financial challenges. 33 HUD also reminds PHAs and owners that the more PHAs and owners improve their compliance with recertification requirements, the less likely tenants will be improperly overcharged their portion of the rent. These requirements include ensuring that PHA and owner staff are not transferring burdens of recertification onto tenants that are properly the responsibility of the staff, not failing to properly and timely inform tenants of the different verification options that the tenant may provide for their income, not requiring more verification than necessary from the tenant, and/or not requiring tenants to seek verifications that staff should and/or can be seeking themselves. 33 Operating Fund (Op-Fund) Shortfall Funding | HUD.gov /U.S. Department of Housing and Urban Development (HUD). HUD believes that the 30-day notification period strikes an appropriate balance that considers the financial obligations of PHAs and owners, as well as provides enough time for tenants to rectify a lease violation stemming from nonpayment of rent. Additionally, as explained above, HUD believes there are often options available for tenants to cure, which avoids unnecessary legal costs incurred to PHAs and owners, and balances increased costs where there are not options to cure. HUD encourages PHAs and owners to review and assess their policies and practices to ensure tenants are informed on how to recertify their income or apply for a hardship exemption in a timely manner. Tenant Awareness and Responsibility Commenters said that tenants know to contact the PHA when there is a change to their income and the PHA processes interim recertifications, so extending the notice requirement will increase the financial burden when funds could be used for other means. A commenter said that nonpayment of rent is a result of tenants not telling the PHA about loss of income. Commenters stated that tenants are made aware on multiple occasions that they have an opportunity to recertify due to their income or hardship, and it is not feasible for a landlord to give 30 days' notice when the tenant is already aware. The commenters further stated that by the time a court date is set, tenants are further behind in rent, and landlords are losing out on income in addition to having to justify write offs. A commenter said that the rule would be a burden on housing authorities, creating more work and expenses when housing authorities must try to collect rent that has not been paid. A commenter stated that an additional 30-day notice should not be given since tenants already receive multiple notices that they have not paid rent. Prolonging the process will put more of a burden on staff. Another commenter said that unless there is an extreme circumstance such as death or severe illness, most tenants know that their rent will be late. Another commenter said it is obvious to tenants that they are late and must pay their rent, and once they are late “their presence is unhealthy, toxic, and perhaps dangerous to other residents.” Commenters said that it does not take long to get assistance for a tenant who is truly struggling if a tenant communicates with the PHA in a timely manner. A commenter stated that tenants are 2-3 months behind in rent by the time 30 days has passed, and when tenants try to reach out to organizations for rental assistance it creates a snowball effect because many of the organizations, including churches, are already limited in the resources they can provide. One commenter included an example of variations in a tenant's subsidized rent due to income fluctuations and asked HUD to review before finalizing a rule “that is unnecessary to protect tenants, a financial and administrative burden to owners, and costly to the taxpayers who support the programs.” HUD Response: HUD believes there is a mutual responsibility between the tenant and the PHA or owner to ensure that recertification requirements are followed by both parties. HUD would like to underscore the importance of PHAs and owners working with their tenants to identify the opportunities to improve practices and procedures that facilitate on-time recertifications, rental payments or timely re-payment plans. Additionally, the notice requirements in this rule will help those tenants who are unaware or remind tenants who are aware of ways that they can cure their nonpayment of rent. Housing Providers' Efforts To Keep Tenants Housed A commenter stated that the rule wrongfully assumes that management and staff do not attempt to assist tenants before filing evictions and that the rule does not adequately address tenants' noncommunication. Commenters stated that housing providers already work with tenants and provide every effort to avoid eviction. Additionally, commenters said that tenants are aware of their legal obligations in their signed leases, and they can speak with the PHA if there are any issues or hardships. Tenants have options that include “payment agreements, referrals to several agencies such as United Way, Action Pact and churches that can assist with rent and other resources.” A commenter said that PHAs are working with tenants to prevent evictions and ensuring that tenants have access to available tools and information to mitigate rent arrears. Another commenter stated that they strive to work with tenants with payment issues through counseling and repayment agreements before moving to the eviction process, but if an eviction is filed, then the tenants have displayed a pattern of not being able to pay rent. A commenter said that when a tenant has an unexpected financial crisis, they offer the tenant a grievance hearing and a payment plan to get caught up on rent to avoid eviction. The commenter expressed that it is in everyone's best interest to keep tenants housed rather than displacing a tenant and suffering vacancy loss. Another commenter said that PHAs do not want to evict tenants and are very good at working with tenants that get behind by offering repayment agreements and allowing more time to pay. Other commenters stated that tenants know or should know that they can report loss of income to have their rent adjusted and interim recertifications are processed quickly. Another commenter stated that their PHA is currently under a corrective action plan due to low waiting lists and extreme vacancies. The commenter said they must make every effort to work with tenants who have a valid reason to not pay rent and only use eviction as a last resort. HUD Response: HUD recognizes and appreciates the efforts of housing providers that keep tenants housed and those that use eviction as a last resort. Unfortunately, not every housing provider focuses on keeping tenants housed, and some file evictions that could have been prevented. HUD maintains that providing tenants with additional time to cure nonpayment of rent violations will limit preventable and unnecessary eviction filings and evictions. Administrative Burden Commenters said that the rule would be an administrative burden to housing providers and that HUD ignores the negative impacts that can result from modifying formal policies and amending every lease. Some commenters said that the notice requirement would cause more paperwork for staff and management. A commenter said that it will take more time administratively and give tenants an excuse to not pay rent and consistently stay a month behind. Commenters also stated that because of limited staff and funding, and many regulatory and compliance demands, there are limited resources for their PHA to have “more substantial eviction prevention interventions with tenants.” The commenters said requiring a revision to every lease to include the required information is not easy and creates a substantial administrative burden and cost, especially on small PHAs, that diverts time and resources from other priorities. Another commenter mentioned that it would divert time and resources away from the “challenging HOTMA implementation.” Additionally, a commenter said that there are more cost-effective measures to notify tenants of available resources such as “additional content in standard notices, resident newsletters, etc., issues by Public Housing Agencies.” A commenter said the additional notices should not be required since tenants are already informed, and it would be a moot point. Another commenter stated that adding further instructions to a notice will cause confusion and complicate an already well functioning process that results in little to no evictions for tenants not acting in bad faith. Additionally, a commenter asked HUD (1) whether the requirements for a repayment agreement will change; (2) if a notice will be invalid if a component of the required language from the rule is missing; (3) will this language be included in the new HOTMA lease and if so, should housing providers wait until the new HOTMA lease to implement the rule; and (4) if a housing provider decides to implement the rule via a lease addendum prior to the new lease being issued by HUD, should the lease addendum be approved by HUD? Commenters also said that HUD fails to consider the additional time needed to revise notices to place into employee and tenant trainings, computerized systems, and to obtain signatures on amended leases for every household in a 14-to-18-month period. Additionally, HUD does not include the costs to modify formal policy documents, which requires public notice and comment as well as action by the governing board of the agency. A commenter said that employee paperwork and case management time increase when tenant accounts are higher, creating a negative impact on ledgers and financial reporting scores. Another commenter said the rule creates an administrative burden on staff that are tasked with collecting rent and dealing with disgruntled tenants. A commenter said that for PHAs who have comparable policies in place, the rule creates additional administrative burdens and liabilities for PHAs for technical violations. For example, the commenter said, the rule “requires the PHAs `amend all current and future leases to properly incorporate the 30-day notice requirement,' and provide notice to tenants of these amendments. These procedural requirements apply regardless of whether PHAs currently have comparable policies in place.” The commenter said that it is concerning that the rule focuses on form instead of substance. One commenter said that their PHA letters already include information required by HUD such as how tenants can avoid eviction by obtaining a repayment agreement and/or by receiving a rent adjustment, the total amount due, and the date the tenant must pay to avoid eviction. This information is provided during move-in, recertification appointments, and when tenants receive a rent statement or account breakdown. Additionally, the commenter said that tenants see these letters and ignore them causing the PHA to move forward with the eviction process. This will result in staff having to complete multiple delinquent letters since the State law requires a 14-day letter for delinquent rent and a 30-day letter for charges past due. HUD Response: HUD recognizes the immense and varied efforts that housing providers have taken to help tenants remain stably housed. HUD agrees that it is important to consider burdens created by new requirements, and the rule has been carefully designed to minimize the impact on housing providers. Therefore, HUD is not requiring PHAs and owners to update leases at once, but to do so within 18 months of the effective date of the rule for PHAs, and for PBRAs, 14 months from the date HUD publishes a final model lease incorporating the new requirements. HUD will produce model leases for PBRA programs that will incorporate HOTMA regulations and the changes implemented by this rule. Additionally, HUD may implement additional guidance in the future to assist PHAs and owners with the implementation of this rule. HUD also reiterates that in order to be considered in compliance with the rule, the notice must include instructions on how tenants can cure lease violations for nonpayment of rent; the alleged amount of rent owed by the tenant, and any other arrearages allowed by HUD and included in the lease; the date by which the tenant must pay rent to avoid the filing of an eviction; information on how tenants can recertify their income; how tenants can request a minimum rent hardship exemption, if applicable, or request to switch from flat rent to income-based rent; and in the event of a Presidential declaration of a national emergency, such information as required by the Secretary. With regard to the comments on repayment agreements, HUD strongly encourages but will not require the use of repayment plans and reiterates that PHAs and owners have flexibility to design them to be reasonable. Repayment plans are just one way for tenants to cure their nonpayment of rent and this rule is focusing particularly on notification requirements. Tenant Accounts Receivable (TAR) Many commenters stated that the rule would negatively impact TARs and threaten PHAs' ability to function and provide adequate low-income housing. Commenters said that by the time an eviction goes through the legal process, tenants could owe an additional two or more months of rent. A commenter said that even if the tenant can address their rent arrears, the payments do not cover the current month and do not address the TARS and negative scoring issues. Another commenter said that the COVID-19 pandemic and the CARES Act increased their accounts receivable from tenants, and in some courts, evictions are backed up for a year. Additionally, a commenter said that it can take approximately three months before a tenant is evicted for nonpayment of rent which increases TARs and creates more issues on the books for PHAs. Commenters said that the rule will increase the amount of unpaid rent incurred by PHAs and have a negative impact on mandatory scoring requirements in regard to the collection of rent and vacancy rates. Commenters said the rule does not address the conflicting priorities the rule imposes on PHAs to collect rent and then be scored by HUD on their effectiveness to collect rent. Additionally, a commenter said that HUD has not provided long-term relief on this requirement and housing providers cannot effectively collect rent without sufficient tools and the eviction process. A commenter said this rule is contradictory to how HUD scores and advises. Commenters stated that there should be relief on the PHA scoring side of the rule. Another commenter asked how HUD will offset the scoring due to high balances on the agency TARs. A commenter said that tenants are graded on the size of their accounts receivable balances and the 30-day requirement has not done anything to help PHAs. The commenter said that HUD has punished PHAs for having large account receivable balances, but the rule would continue to grow these balances. Similarly, commenters said that HUD grades PHAs on their ability to collect rent, rewarding those with higher rent collections and punishing those with lower rent collections. The commenters stated that limiting the tools that PHAs can use to collect rent under governing State and local law causes confusion and limits the PHAs' ability to meet the rent collection requirements. A commenter stated that the rule would interfere with grading as they are graded on the management and occupancy reviews (MOR), which is partially their ability to collect rent. Another commenter stated that no consideration had been given to the 5% of PHA scores attributed to higher TARs because of the rule. The commenter said that their PHA currently has a low 90 score and that is with all possible points in the indicators with exception of Real Estate Assessment Center inspections. The commenter said that a “bump to `standard' HUD rating would absolutely diminish staff moral [sic].” Additionally, a commenter said that the rule prolongs wait times for other tenants which affects a PHA's Capital Fund Program score since this category focuses on occupancy rates. The commenter said that lower scores subject PHAs to remedial actions, oversight, and monitoring by HUD. Additionally, commenters pointed to HUD's example of a nonprofit affordable housing provider in Boston 34 and said that the provider is not a PHA and not subject to negative scoring which would result if a PHA pursued the same options, also the provider has the resources being one of the largest affordable housing providers in the country. Commenters said that smaller housing providers do not have the same privileges to delay collecting rent as the study mentions, and even after the amount of work mentioned in the study, 50% of tenants did not respond to efforts to avoid eviction. 34 King, S. (2021). How One of Boston's Top Evictors Changed Its Ways. Shelterforce. https://shelterforce.org/2021/12/03/how-one-of-bostons-top-evictors-changed-its-ways/. Some commenters said that the 30-day notice requirement would mean that tenants would be at least 60 days behind in rent by the time an eviction filing is filed in court and a court date is set, and if a tenant refuses to move out, “PHAs are now looking at 90-120 days of a receivable being on the books that then leads to even higher write offs each year.”. A commenter stated that the 30-day notice requirement has increased their receivables and write-offs each year, which affects their bottom line. The commenter explained that their write-offs for 2022 were over $130,000, and for 2023 they were already at $218,000 by October. The commenter further explains that they are working with tenants and a lot of local agencies to pay some of the balances but must rely on Federal assistance as well. Another commenter said that in 2019, prior to the 30-day requirement, their end of year write off amount was $2,700, but each year their collection losses has grown significantly. The commenter mentions a correlation between not being able to evict for nonpayment of rent in a timely manner and their growing TARs as why they wrote off $16,300 in 2023. Additionally, one commenter said their PHA normally sends a list of tenants who owe rent to collections, but only 15% of the time do they recover rent. The commenter further said that if HUD requires a 30-day notice for nonpayment of rent, then HUD should increase its level of operating subsidies. Last year, the commenter said their write-offs totaled $200,000 and HUD has decreased funding. A commenter said $234,000 in write offs for 2023 was the largest they have seen in 10 years working at their PHA. Commenters urged HUD to leave the notice requirement at 14 days. A commenter stated that when they issue an eviction for nonpayment of rent, the tenant does not pay and does not leave the unit within the 14 days allowed; therefore, when the eviction is filed in court, tenants owe approximately 1-2 additional months of rent. The commenter further said that they cannot imagine their write offs given the proposed 30-day notice. Another commenter stated that it is not fair that HUD continues to grade PHAs on their ability to collect debt owed while not allowing PHAs to use a fair 14-day notice. Commenters noted that the 30-day requirement has been in practice since the COVID-19 pandemic and is burdensome to PHAs especially in the timely collection of TARs. Commenters also said that during COVID-19, many tenants did not pay rent because they were not required and now PHAs are suffering from outstanding TARs which negatively affect their Public Housing Assessment System (PHAS) scores and operating income. A commenter said that their PHA currently has $2 million in TARs from tenants that have decided to not pay their rent, which does not include $1.3 million that has already been written off as bad debt from tenants that moved out with unpaid balances in 2023. Another commenter said their average TARs was under $30,000 a month and now they are over $90,000. A commenter stated that “HUD has reported that up to 50 percent of PHAs increased levels of TARs in 2023 compared to pre-pandemic levels.” The commenter also said that a longer notice period will assuredly cause higher rent arrears and will undermine the PHAs efforts to collect rent and reduce TARs. HUD Response: HUD agrees that PHAs should not be penalized as a result of compliance with this rule. The requirement to extend the notification of lease termination for nonpayment of rent may affect PHAs' financial assessment scores if TARs rates rise. HUD has been monitoring trends in TARs and the most recent data suggests that TARs are beginning to stabilize to pre-COVID-19 pandemic levels. There remain outliers that are keeping TARs elevated, but HUD believes that the majority of PHAs throughout the country are starting to experience lower TARs. HUD understands the impact of TARs on a PHA's finances and ability to operate. HUD believes the 30-day notification period to be the right balance for tenants to cure a violation of the lease for nonpayment of rent and have minimal impact for a PHAs' financials. Additionally, HUD has provided relief to PHAs for PHAS scoring of TARS for 2022 and 2023 PHAs scores and is evaluating further extensions at this time based on available data. Further, HUD is developing a proposed rule on the Public Housing Assessment Systems that HUD anticipates will be published later in 2024. 35 HUD encourages commenters to also provide public comments on that rule. 35 See HUD's Regulatory Agenda at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202310&RIN=2577-AD17. Legal Rights of Landlords Commenters said that landlords have rights. One commenter said that landlords have the right to run their business as they see fit. Another commenter stated that landlords have inalienable rights, one being “as property owner who rents by the collection of financial rental compensation in exchange of the tenant using property.” A commenter stated that property rights are guaranteed by the U.S. Constitution, and if the government interferes with “owner's rights to manage their properties by restricting their contractual rights, then the government becomes the tyrant.” Additionally, a commenter said that Texas allows tenants to be evicted after a four-day notice and by allowing a 30-day notification, it would be a violation of constitutional rights to give special treatment to one group of people. HUD Response: The Secretary has explicit statutory and regulatory authority to require that certain terms and conditions be included within leases for HUD-assisted housing, 36 including that PHAs and owners provide certain specified notice periods and other procedural protections before different types of eviction proceedings. 37 The statutory authority provides that during the lease term, the owner must not “terminate the tenancy except for serious or repeated violation of the terms and conditions of the lease, for violation of applicable Federal, State, or local law, or for other good cause[.]” 38 The Secretary is also authorized to provide additional terms and conditions that must be incorporated into the tenant's lease. 39 The Secretary has exercised this authority on previous occasions such as in the interim final rule, 40 Instituting Smoke-Free Public Housing final rule, 41 and in HUD's grievance procedures at 24 CFR 966.52. 42 This final rule is consistent with the statutory and regulatory restrictions placed on program participants under this authority. 36 42 U.S.C. 1437d(a). 37 42 U.S.C. 1437d(l); 42 U.S.C. 8013(i)(2)(B) (section 811); 24 CFR part 891 (section 202, 202/8, and 202/162). 38 42 U.S.C. 1437f(d)(1)(B)(ii). See also 42 U.S.C. 8013(i)(2)(B) (section 811). 39 42 U.S.C. 1437f(d)(1)(B)(i). See also 42 U.S.C. 8013(i)(2)(A). 40 86 FR 55693. 41 81 FR 87430 (this final rule required PHAs administering public housing to implement a smoke-free policy and to update the lease, without a statutory mandate, to incorporate the new smoke-free policy at § 966.4(f)(12)(ii)(B)). 42 See 24 CFR 966.52(b) and 966.4(n) (HUD requires PHA leases to stipulate that the tenant has an opportunity for a hearing on a grievance of any proposed adverse action against the tenant). See also the rulemaking of part 866 (Lease and Grievance Procedures), which requires the grievance procedure be incorporated into the lease at 40 FR 33406. Additionally, owners are not required to participate in HUD's federally subsidized housing programs. However, when an owner enters into an agreement to participate, the owner receives incentives and conversely subject themselves to certain obligations. Those obligations do not interfere with an owner's constitutional rights. Furthermore, courts have consistently upheld HUD's ability to ensure due process in the eviction process when it concerns participants in federally subsidized housing. Participation in HUD Programs Commenters said the 30-day notice would create a hardship for owners/landlords and will make them not want to participate in affordable housing. A commenter said that further restrictions on their business as a landlord will cause them to walk away and put their money in a market fund which would in turn lower the supply of rental housing and increase rent. One commenter stated that the private sector is responsible for the majority of affordable housing in the United States, 43 and rather than increasing burdens, HUD should incentivize the private sector to continue to invest in affordable housing. 43 See Lance Freeman & Yining Lei, An Overview of Affordable Housing in the United States, Penn IUR Policy Brief, at 2 (August 2023), available at https://penniur.upenn.edu/uploads/media/An_Overview_of_Affordable_Housing_in_the_United_States_Updated.pdf. Additionally, a commenter stated that rent is critical to ensuring housing providers are able to produce affordable housing in their communities. One commenter said the 30-day notice requirement “has proven to disrupt the rental market by reducing housing availability.” Another commenter stated that the rule will have a negative impact on the public perception of HUD, housing providers, and low-income tenants. The commenter said the rule gives a false perception of tenants receiving public and assisted housing as irresponsible and taking advantage of taxpayers which can increase resentment and distrust of Federal housing programs, housing providers, and tenants. HUD Response: HUD believes that the limited scope of the rule does not curb participation in HUD programs. Owners that participate in HUD programs governed by the Office of Multifamily Housing understand why providing affordable housing is important and tend to be mission-aligned entities. HUD seeks to achieve the appropriate balance that does not overly burden PHAs and owners, and also benefits tenants. Thus, HUD believes the 30-day notification period for a specific set of HUD programs is appropriate. Delay in Eviction Cases Many commenters stated that there is a delay in eviction court cases and offered varying times for when a court date is set after filing for eviction in their jurisdiction. Some commenters did not understand and questioned the necessity for an additional 30-day notice when it already takes several months to get into housing court or have a court date set. Commenters also said that many locations are having issues with timely court dates, and it is taking several months to evict, which is burdening housing providers and costing thousands of dollars in lost rent and legal fees. Additionally, a commenter said that asking PHAs to wait an additional 30 days to file in court is damaging to the PHA. Commenters stated that a backlog in eviction cases creates a significant financial burden for landlords that impact community resources to cover debt service, taxes, insurance, and property repair costs. Commenters also mentioned that housing providers are still feeling the impact of court backlogs from the pandemic. For example, housing providers in Atlanta reported in 2023 that they were still waiting for court dates after filing evictions six to eight months prior. A commenter said that they have been involved in many eviction cases and it can take weeks to file with an attorney and have a court date set, and then there is the possibility of a continuance. Essentially, it can take 3-4 months to evict a tenant for nonpayment of rent, meaning the landlord is missing 3-4 months of rent. The commenter also said if the tenant is evicted after a four-month period, the landlord will likely not see the money for back rent and may have to deal with any damages that the tenant may have left. Commenters stated that it is taking 90-120 days to evict due to backlog and delay in the court system. Another commenter stated that the eviction court process is incredibly lengthy and can take around 90 days after an eviction notice for a tenant to be evicted for good cause. Commenters also stated that in Michigan, it takes 90-120 days to get a court date despite a 7-day notice period. Another commenter explained that a week after rent is due, notice is sent to the tenant, and then after another week, a notice of intent to file for dispossessory is sent to the tenant. A week or so after that, the dispossessory will be filed and by this time three weeks have passed. When the court gets the dispossessory, it typically takes two weeks to process and then a letter is mailed to the tenant giving them another week to answer the court. If the tenant answers the court, it takes two weeks to process and then the court moves forward with setting a court date but must look at their already backlogged calendar which can be 4-6 weeks out. A hearing is then set, and if the PHA prevails, the tenant is given at least two weeks to vacate. If the court requires the tenant to pay the rent, the PHA does not receive late fees, or they receive around 10%. Many of the tenants do not pay and the PHA must get a writ of possession, adding more time to the process. However, one commenter said many of their PHA's nonpayment eviction cases result in non-final stay agreements which provide the tenant the ability to repay over time and make a legal agreement to secure arrearages. A commenter stated a backlog in the magistrate courts could increase PHA eviction timelines and delinquent account amounts, and potentially affect households that have been on waiting lists for months or years. Another commenter said that appeals, attorney's fees, and writs of possession must be factored into the filing of evictions, making it unlikely to have a court date within the same month. Similarly, another commenter stated that it could take weeks to get on the docket for court and the judges would like the parties to mediate the move out. If the parties cannot come to an agreement, the judge decides when the tenants will move out. However, if the tenants do not vacate the property, the owners must pay court costs to obtain a writ to have them removed, and if that does not work, the sheriff's department must be paid for possession of the property via lockout. Additionally, a commenter said that tenants should not be given 30-day notice because most evictions cases can take 3-4 weeks. Commenters said that courts need time to schedule cases and even after a case, it takes even more time to schedule a writ of possession if necessary. One commenter said that even when an eviction is granted by the court, judges allow tenants 30-60 days before the eviction can be enforced, and if a tenant refuses to leave, it takes more time to file additional paperwork and schedule an eviction with the Sheriff's department, causing the PHA to house non-paying tenants for 4-6 months before they are evicted. One commenter said that in New York, the Sheriff's department must allow 14 days before executing a writ. Additionally, a commenter said that New York has extended the time a tenant can be brought to court from 5-12 days to 10-17 days and the tenant is entitled to an immediate adjournment of at least two weeks to obtain legal counsel. Another commenter said their county takes 10-14 days to get a court date and by that time the tenant could be two months behind in rent which causes even more loss of income for the small PHA. The commenter also said the small PHA had an increase of $4,000 in write-offs due to a delay in the courts. Another commenter said that in the best-case scenario, it takes 32 days to go through the eviction process, but under this rule, it would take 52-60 days of waiting for court to deliver the dispossessory notice. Commenters said that an initial filing may be the only way to convince a tenant to pay their rent, especially when the PHA has already provided tenants with information and resources to cure their nonpayment. The urgency pushes tenants to reach out to external resources, and in some states, rental assistance is not available until an eviction is filed. A commenter that has been in property management for LIHTC for 20+ years said some tenants need encouragement from the court to pay their rent. Another commenter stated that tenants often will not reach out for assistance until they receive written notice from the landlord, and they must prove they are in danger of losing their home when seeking emergency rental assistance. HUD Response: HUD does not dictate the timelines of local courts and their processes. HUD disagrees that the increased notification period merely delays evictions. As previously discussed, it is estimated that between 1,600 and 4,900 nonpayment related moveouts in Public Housing and PBRA-assisted housing are prevented each year because of the 30-day notice requirement. Additionally, HUD emphasizes that the cost of eviction filings, including the court delays mentioned in the public comments, are a strong reason for why it is more cost-effective to work with tenants on a repayment plan. Tenants who can obtain additional assistance to pay rent can avoid unnecessary eviction filings and evictions, which will benefit housing providers as well. For similar reasons, HUD disagrees with comments that the costs to housing providers due to delays in the court system outweigh the benefits to tenants. Negative Impact on Tenants Many commenters stated that the rule will have a negative impact on tenants. Commenters stated that the rule will cause higher rent arrears for tenants which would be harder to cure, have a negative impact on their credit record, and cause issues with future housing. Commenters also said that a 30 day wait to file for eviction for nonpayment of rent would in turn compound other delays, causing tenants to get further behind on their rent and only increasing tenants' financial difficulties. Additionally, commenters said that the rule would cause delays in a tenant's access to some local emergency rental assistance programs. A commenter stated that there are few agencies in their area with funding programs that provide rental assistance to tenants living in subsidized housing. A commenter explained that when tenants fall behind in rent and are still evicted, they face overwhelming past due balances that the tenant cannot pay to satisfy judgment for years. Some commenters said they do not support the rule because it hurts the community and other tenants who are paying their rent on time and other tenants will be affected because resources are limited. Commenters stated that PHAs are working diligently to keep tenants current on their rent, but because of low funds, the 30-day notice will put tenants and the PHA even further in a financial hole. Additionally, a commenter said that even an existing 7-day notice requirement increases the hardship on tenants and owners, causing owners having to allocate more resources per tenant due to the delays which in turn reduces their capacity to support other households. Another commenter said that the longer a nonpaying tenant remains in a unit, the more compliant tenants will be impacted, interfering with their peace and enjoyment. Some commenters specifically emphasized that tenants will struggle to cure their nonpayment of rent. A commenter said that the rule will increase nonpayment amounts and contribute to a “never-ending debt situation” for tenants. A commenter said that a tenant who pays $200-$300 in rent and falls behind one month will struggle to get back on track and the 30-day notice will only push the balance into a second month. The commenter said that at this point, most PHAs and rental assistance programs cannot assist tenants in bringing their balances up to date. Commenters stated that the rule would create confusion for tenants since they will owe more in rent by the time the parties go to court. Another commenter stated the rule has caused the most vulnerable citizens in their community to get further behind in rent. Commenters also said that the rule is counterproductive and would increase evictions. A commenter said that prior to the COVID-19 pandemic, evictions for nonpayment of rent were low in most places, and now, due to reliance on rental assistance and decreased prioritization of timely rent payments, evictions have increased significantly. Another commenter said they have seen an increase in late rent due to the 30-day notice requirement and the courts' handling of eviction cases, creating greater hardship for tenants. Additionally, a commenter stated that a PHA cannot accept partial payments when an eviction is filed, so when HUD allows additional time for tenants to pay their rent, it is harder for tenants because they are now stuck with two months of rent and eviction costs. The commenter said that if the tenants had received an eviction notice on the first month of nonpayment, they might have been able to receive assistance before getting further behind. Additionally, a commenter stated that the rule will require rent increases to compensate for housing providers' additional expenses, causing the rental market to become more expensive. Another commenter said that under this rule, housing providers may have no choice but to have zero-tolerance policies for nonpayment issues instead of providing leniency since tenants can fall further behind. A commenter stated that landlords in the Housing Choice Voucher (HCV) program are not required to give 30-day notice, and since they already have so many restrictions, landlords will be less willing to rent to HCV holders. A commenter stated that tenants' unpaid balances when they vacate a unit could keep other landlords from renting to those tenants. Another commenter said operating subsidies are decreasing, causing PHAs to suffer and hurting low-income tenants. Commenters stated that for certain properties an increased delinquency rate will negatively impact an owner's ability to properly maintain a property which impacts all tenants. Commenters also said that “owners are facing high inflationary costs that exceed the cost-of-living rental increases.” One commenter stated that housing providers may become stricter in their lease enforcement practices and applicant screenings as a result of this rule. Additionally, many commenters said that the rule will increase unpaid rent and result in lost revenue not covered by HUD, which would “lead to reduced administrative and maintenance services for all tenants and may threaten agency solvency.” Some commenters stated that the rule will cause more confusion for tenants because there will be different requirements for different HUD programs because the rule would not apply to vouchers and other rental units in the market. Another commenter asked HUD to immediately rescind the 30-day notice requirement and stated that PHAs “must be allowed to manage their own lease termination procedures as has been past practice.” HUD Response: Experience from HUD's Eviction Protection Grant Program suggests that some residents of HUD-assisted housing facing eviction were able to avoid eviction by securing or maintaining rental assistance (with the assistance of legal service providers) but that this process took an average of 150 days. Most residents receiving housing assistance cannot afford legal assistance, and no-cost legal services may not be available to them. HUD's analysis of the program data suggests that as case duration increases, so does the likelihood of securing rental assistance and achieving a rent reduction, though the effects are modest. Extra time provides an opportunity for the tenant to engage with legal providers and to achieve positive outcomes when they are available. As previously mentioned, HUD has been monitoring trends in TARs and the most recent data suggests that TARs are beginning to stabilize to pre-COVID-19 pandemic levels. HUD believes that the majority of PHAs throughout the country are starting to experience lower TARs. Additionally, HUD agrees that some owners may experience revenue loss during the 30-day notification period, but a portion of this income may be recouped from HUD through the special claims process for Multifamily Housing programs, including payments for debt service and unpaid rents. HUD also recognizes that operating costs have increased and continue to increase, irrespective of tenants accounts receivable, and HUD has since appropriately adjusted the methodology for determining the annual rent operating costs adjustment factor (OCAF) to reflect this fact. HUD believes that the rule and its requirements to provide tenants time to locate the necessary resources to pay their rental arrears will result in fewer tenant delinquencies over time, and therefore, a decrease in applicant rejections when screening for patterns of nonpayment of rent. HUD urges owners to not adopt a zero-tolerance screening policy and to instead adopt a policy of tolerance for tenants who are otherwise good renters and are motivated to work with their owners to pay their back rents. In response to the comment regarding the Housing Choice Voucher program, this rule does not apply to that program. For the same reason expressed in other responses to public comment, HUD believes this rule strikes the appropriate balance of not being overly burdensome to PHAs and Owners while also benefiting tenants. Impedes Necessary Skills for Tenants Commenters said that the rule will set up tenants for failure and set a precedent for tenants of not being responsible for their bills and not adhering to contractual agreements. Some commenters said that their PHA promotes self-sufficiency and financial literacy to tenants, but the 30-day notice will not promote self-sufficiency. A commenter asked how this rule helps tenants become self-sufficient if the standard is being lowered, and how will it help tenants transition to tenant-based voucher programs and non-subsidized housing where they will be given a 14-day notice. Another commenter stated that tenants who are no longer in the program due to an increase in income will not have the financial literacy to budget appropriately and they will face eviction in the private market. For example, Ohio's State law gives tenants a 3-day notice for nonpayment of rent. Similarly, a commenter said that HUD should prepare tenants for [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2024-28861. Public record. Not legal advice.