HUD Handbook 4350.3 § 7-16

A.       Determining Whether a Unit Transfer Should Occur

                  If a tenant reports a change (or the owner becomes aware of a change) in family
                  composition, the owner must do the following:

                  1.       Determine appropriate unit size. Owners should use the occupancy
                           standards established for the property to determine whether the unit is
                           still the appropriate size for the tenant. The property’s occupancy
                           standards must be consistent with the requirements discussed in
                           paragraph 3-23.

                  2.       Determine whether a transfer is required. The following considerations
                           determine whether the tenant is required to move:

                           a.       Is there a unit of appropriate size in the property? If there are
                                    appropriately sized units available, then a transfer to an
                                    appropriately sized unit is required. If a unit of appropriate size is
                                    not available, then the tenant should be moved to the most
                                    appropriately sized unit.

                           b.       Is there a market for the size of unit the tenant would be vacating?
                                    If the tenant is occupying a unit that is larger than needed and
                                    there is no demand for that larger unit, the owner does not have to
                                    require the tenant to move from the larger unit until there is a
                                    demand for that size of unit.

                           c.       How long will the tenant remain in the property? If the tenant has
                                    given a written notice to vacate, the owner need not require the
                                    tenant to transfer.

                           NOTE: In Section 236 and Section 221(d)(3) BMIR cooperatives in which
                           the member is receiving no other assistance, the cooperative may
                           establish its own policy on whether the cooperative should offer over-
                           housed members smaller units and require members who refuse such
                           offers to pay the market-rate carrying charge as described in paragraph
                           3-23 H.1.

         B.       Transfer Requirements

                  1.       When an owner determines that a transfer is required, the Model Lease
                           for Subsidized Programs states that the tenant:

                           a.       May remain in the unit and pay the HUD-approved market rent; or

                           b.       Must move within 30 days after the owner notifies the family that a
                                    unit of the required size is available within the property.

2.       Depending upon the circumstances of the transfer, a tenant may be
                           obligated to pay all costs associated with the move. However, if a tenant
                           is transferred as a reasonable accommodation to a household member’s
                           disability, then the owner must pay the costs associated with the transfer,
                           unless doing so would be an undue financial and administrative burden.
                           See Chapter 2 for a thorough discussion of the requirements of Section
                           504 of the Rehabilitation Act of 1973 and Chapter 2, Subsection 4 for
                           information and guidance on Reasonable Accommodation.

         C.       Written Policies

                  Owners are required to describe the unit transfer policies in a written tenant
                  selection plan for the property, and address the following topics (refer to Chapter
                  4, Figure 4-2 and Paragraph 4-4 C for Required Contents of a Tenant Selection
                  Plan):

                  1.       Transfer waiting lists;

                  2.       Acceptable reasons for transfers;

                  3.       Procedures for filling vacancies; and

                  4.       Owner’s policy for establishing priority for filling vacant units with either
                           tenants awaiting transfers or applicants from the property waiting list.

         D.       Transfer Fees in Section 236 and BMIR Cooperatives

                  1.       A cooperative may collect fees for processing transfers of membership if
                           such fees are approved by the cooperative’s board and consistent with
                           the cooperative’s by-laws and occupancy agreements.

                  2.       While these fees must be reasonable in amount, the cooperative need not
                           request HUD approval of the amount of the fee.

                  3.       The cooperative may only impose a transfer fee on a member who
                           voluntarily initiates a transfer. Cooperatives must not charge transfer fees
                           when transfers are required pursuant to changes in household
                           composition.