24 C.F.R. § 886.120
§ 886.120 Responsibility for contract administration. (24 CFR Part 886)
Operative Text
(a) HUD is responsible for administration of the Contract. HUD may contract with another entity for the performance of some or all of its Contract administration functions. (b) The Contract shall contain a provision to the effect (1) that if HUD determines that the Owner is not in compliance under the Contract, HUD shall notify the Owner of the actions required to be taken to restore compliance and of the remedies to be applied by HUD including abatement of Housing Assistance Payments and recovery of overpayments, where appropriate; and (2) that if he fails to comply, HUD has the right to terminate the Contract or to take other corrective action. A default under the Regulatory Agreement shall be treated as non-compliance under the Contract.
Under 24 CFR Part 886 § 886.120, the federal Department of Housing and Urban Development (HUD) holds primary responsibility for overseeing the Housing Assistance Payments contract, though it may delegate some or all of those oversight duties to another entity. When HUD finds that a property owner is not meeting contract obligations, the contract must include a mechanism requiring HUD to notify the owner of what corrective steps are needed and what consequences may follow, including reduced or suspended assistance payments and recovery of any overpayments. If the owner does not come into compliance after notification, HUD retains the authority to terminate the contract or pursue other corrective measures. A default under the associated Regulatory Agreement is treated the same as a contract violation.
Plain English — not legal advice.
Property owners participating under 24 CFR Part 886 § 886.120 should be aware that HUD — or a designated entity acting on HUD's behalf — actively monitors compliance with the Housing Assistance Payments contract. Compliant operators generally maintain thorough records, respond promptly to any HUD compliance notices, and take the corrective actions specified in such notices within the timeframes provided. Owners should also understand that a default under the Regulatory Agreement carries the same weight as a direct contract violation, meaning both documents require careful and ongoing attention to avoid consequences such as abatement of payments or contract termination.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Tenants living in properties covered by 24 CFR Part 886 § 886.120 benefit from a federal oversight structure in which HUD monitors whether property owners are fulfilling their contractual obligations. If an owner falls out of compliance, the provision establishes that HUD can take corrective steps — including suspending housing assistance payments or ultimately terminating the contract — which can affect the availability and continuity of subsidized housing. Tenants who have concerns about whether their property owner is meeting program requirements may contact their local HUD field office, reach out to a HUD-approved housing counseling agency, or connect with a tenant-rights organization to better understand available options.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 4, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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