HUD Handbook 4350.3 § 6-12

A.      Applicability

                The properties identified in Figure 1-1 may modify their respective HUD Model
                Leases, except for the following properties:

                1.       Section 202/8;

                2.       Section 202 PACs;

                3.       Section 202 PRACs; and

                4.       Section 811 PRACs.

                NOTE: Information on the model leases for Section 202/8, Section 202 PAC,
                Section 202 PRAC, and Section 811 PRAC is located at paragraphs 6-5 D and 6-
                5 E.

        B.      Key Requirements

                1.       A lease change provided by HUD Headquarters through issuance of
                         Notices or revisions to this Handbook must be incorporated into the lease
                         *as a lease addendum * and does not require HUD Field Office or
                         Contract Administrator approval. *Lease addendums issued by HUD also
                         do not require HUD Field Office or Contract Administration approval.*
                         However, the tenant must be given notice as outlined in this paragraph.

                2.       An owner may modify the term and conditions of the lease, but he/she
                         must *make the modifications in the form of a lease addendum and must*
                         receive prior written approval of HUD or the Contract Administrator before
                         providing the modification to the tenant(s). (See Paragraph 6-4.D Note.)

                         NOTE: Implementation of the lead-based paint attachment does not
                         require HUD approval.

                3.       Although not a HUD requirement, an owner may choose to determine
                         whether any applicable state or local law (State Tenant-Landlord Law)
                         requirements also apply when modifying the lease. Such a practice
                         would ensure that an owner’s lease is in compliance with, and
                         enforceable under, state and local laws.

                4.       A modification to the lease may only be effective at the end of a lease
                         term. The owner must provide the tenant with the approved modifications
                         at least 60 days prior to the end of the lease term.

The notice must include a copy of the revised lease or an addendum
                         revising the existing lease agreement. Owners must include a letter
                         clearly stating that the tenant can either accept the modification or move,
                         but that a response is due within 30 days.

                5.       A tenant must either:

                         a.      Accept the modification by signing both copies of the modification
                                 and returning one to the owner; or

                         b.      Refuse the modification and give the owner a 30-day notice of
                                 intent to vacate.

                6.       If, within 30 days, the tenant indicates that the modification is
                         unacceptable or does not respond, the owner may begin the procedures
                         for terminating tenancy set forth in paragraph 8-13 B of this handbook.

        C.      Submission and Approval Process for Modifying the Lease

                1.       An owner must submit a proposed modification to the lease for review
                         and approval to the local HUD Field Office or Contract Administrator
                         having jurisdiction over the property. *Modifications must be in the form
                         of a lease addendum.* An owner must submit two (2) copies of the
                         proposed modification, along with an explanation as to the necessity of
                         the modification.

                                For modifications submitted to the HUD Field Office, the HUD
                                 Field Office will review the proposed modification and then forward
                                 it, along with any comments and/or concerns, to the Field
                                 Counsel. After meeting with the Field Counsel (or receiving
                                 comments from the Field Counsel), the local HUD Field Office will
                                 issue a letter to the owner either approving or denying the
                                 proposed modification, along with HUD’s reason(s) for denying the
                                 modification, if applicable.

                2.       HUD Field Offices, State Agencies, and Contract Administrators may
                         approve changes that will make the model lease comply with:

                         a.      State or local law; or

                         b.      Property management practices generally used in the project's
                                 market area.

Example – Approving Lease Changes

Examples of acceptable management practices:
    Units with a live-in aide, a lease addendum that denies occupancy of the unit to a live-in aide after
     the tenant, for whatever reason, is no longer living in the unit. (See also paragraph 3-6 E.)
    Units with a police officer or security personnel, a lease provision that states that the right of
     occupancy is dependent on continued employment as a police officer or security personnel. (See
     also paragraph 3-8 D.)

3.       HUD Field Offices, Contract Administrators and State Agencies must not
                         approve changes that would:

                         a.      Eliminate any provision related to HUD's subsidy rules;

                         b.      Circumvent HUD rules, or state or local law; or

                         c.      Effectuate any change to the required lease provisions.
                                 (Paragraph 6-5 F lists the required lease provisions.)

        D.      Providing Notice to the Tenant

                The tenant must be provided with proper notice when *HUD or the* owner
                modifies the lease. An owner must comply with the following requirements to
                provide such notice.

                1.       The owner must provide the tenant with the approved modifications at
                         least 60 days prior to the end of the lease term.

                2.       The notice must include a copy of the revised lease or *lease* addendum
                         revising the existing lease agreement. Owners must include a letter
                         clearly stating that the tenant can either accept the modification or move,
                         but that a response is due within 30 days.

                3.       The notice must be served by:

                         a.      Sending a letter by first-class mail, properly stamped and
                                 addressed and including a return address, to the tenant at the unit
                                 address; and

                         b.      Delivering a copy of the notice to any adult person answering the
                                 door at the unit. If no adult answers the door, the person serving
                                 the notice may place it under or through the door, or affix it to the
                                 door.

                4.       The date on which the notice is deemed received by the tenant is the later
                         of:

                         a.      The date the first-class letter is mailed; or

b.      The date the notice is properly given.

                    5.     Service of the notice is deemed effective once the notice has been both
                           mailed and delivered.