OFFICE OF AUDIT DRAFT
REGION 7
For Discussion and Comment Only - Subject to Review and Revision
KANSAS CITY, KS
Windridge Apartments
Wichita, KS
Section 221(d)(4) Multifamily Insurance Program
2014-KC-1001 November 7, 2013
U.S. DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
OFFICE OF INSPECTOR GENERAL
Issue Date: November 7, 2013
Audit Report Number: 2014-KC-1001
TO: Joseph D. Pennel, Acting Director, Kansas City Office of Multifamily Housing,
6AHMLAS
//signed//
FROM: Ronald J. Hosking, Regional Inspector General for Audit, 7AGA
SUBJECT: Windridge Apartments Did Not Administer Its Program in Accordance With
HUD Rules and Regulations and Its Own Policies and Procedures
Attached is the U.S. Department of Housing and Urban Development (HUD), Office of
Inspector General’s (OIG) final results of our review of Windridge Apartments.
HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on
recommended corrective actions. For each recommendation without a management decision,
please respond and provide status reports in accordance with the HUD Handbook. Please furnish
us copies of any correspondence or directives issued because of the audit.
The Inspector General Act, Title 5 United States Code, section 8L, requires that OIG post its
publicly available reports on the OIG Web site. Accordingly, this report will be posted at
http://www.hudoig.gov.
If you have any questions or comments about this report, please do not hesitate to call me at
913-551-5870.
Office of Audit Region 7
400 State Avenue, Suite 501, Kansas City, KS 66101
Phone (913) 551-5870, Fax (913) 551-5877
Visit the Office of Inspector General Web site at www.hudoig.gov.
November 7, 2013
Windridge Apartments Did Not Administer Its Program
in Accordance With HUD Rules and Regulations and Its
Own Policies and Procedures
Highlights
Audit Report 2014-KC-1001
What We Audited and Why What We Found
We selected Windridge Apartments in The property (1) did not obtain three written cost
Wichita, KS, for audit based on a estimates for goods or services expected to exceed
referral from the Region 7 Office of $10,000, (2) did not provide proper notice and start
Multifamily Housing due to high tenant eviction procedures for nonpayment of rent, and (3)
receivables and excessive travel paid more than $39,000 in travel expenses for
expenses. Our audit objectives were to individuals not employed by the property.
determine whether Windridge
Apartment Associates, L.P., (1)
followed U.S. Department of Housing
and Urban Development (HUD) rules
and regulations when it procured
products and services, (2) followed
HUD rules and regulations and its own
policies and procedures for rent
collection, and (3) followed HUD rules
and regulations when charging travel
expenses to the operating account.
What We Recommend
We recommend that HUD require the
property to provide cost justification for
$200,362 spent on goods or services
and have the management agent
reimburse the property for $39,466 in
ineligible travel expenses.
TABLE OF CONTENTS
Background and Objectives 3
Results of Audit
Finding 1: The Property Did Not Obtain Three Written Cost Estimates 4
for Goods or Services Expected To Exceed $10,000
Finding 2: The Property Did Not Provide Proper Notice and Start 6
Eviction Procedures for Nonpayment of Rent
Finding 3: The Property Paid for Travel Expenses for Individuals Not 8
Employed by the Property
Scope and Methodology 10
Internal Controls 11
Appendixes
A. Schedule of Questioned Costs 13
B. Auditee Comments and OIG’s Evaluation 14
C. Ineligible and Unsupported Costs Detail 22
D. Criteria 23
2
BACKGROUND AND OBJECTIVES
Windridge Apartments is located at 2502 Wildwood Lane, Wichita, KS. The property is a 136-
unit housing project insured under the U.S. Department of Housing and Urban Development’s
(HUD) section 221(d)(4) of the National Housing Act. HUD regulates the property’s rent
charges and operating methods.
HUD’s control over the property is exercised by a regulatory agreement, form HUD-92466,
signed on September 13, 2007. The agreement outlines terms and conditions for the HUD-
insured mortgage, such as what expenses can be paid with project funds.
The property is owned by Windridge Apartments Associates, L.P., and the general partner is
Windridge-Michaels, LLC. The property’s management agent, Interstate Realty Management
Company, is an identity-of-interest management agent. A majority of the property’s day-to-day
activities are managed at the property, while the bulk of the financial operations are managed at
the management agent’s home office in Marlton, NJ.
The property receives a material portion of its revenue under a Federal Section 8 rent subsidy
program for 133 of its 136 units. This program provides for direct rent subsidy payments to the
property on behalf of certain tenants who qualify under the program’s rules. Between January 1,
2010, and March 31, 2013, the Property received more than $2.9 million in housing assistance
payments.
Our audit objectives were to determine whether Windridge Apartment Associates, L.P.,
(1) Followed HUD rules and regulations when it procured products and services for the
property,
(2) Followed HUD rules and regulations and its own policies and procedures for rent
collection, and
(3) Followed HUD rules and regulations when charging travel expenses to the operating
account for travel to the property in preparation for a management review.
3
RESULTS OF AUDIT
Finding 1: The Property Did Not Obtain Three Written Cost Estimates
for Goods or Services Expected To Exceed $10,000
The property did not obtain written cost estimates from at least three contractors for goods or
services expected to exceed $10,000. This condition occurred because the property did not have
adequate procurement policies and procedures. As a result, it could not ensure that more than
$200,000 spent on goods or services were reasonable.
The Property Did Not Obtain
Written Cost Estimates
The property did not obtain written cost estimates from at least three contractors
for goods or services exceeding $10,000. It had one contract for trash collection
and waste management, and it used a sourcing company to negotiate this contract.
However, neither the property nor the sourcing company obtained written cost
estimates from at least three contractors for this service. In 2011 and 2012, the
property spent $32,511 on waste management.
Further, although the property had only the one contract in place, it received
ongoing supplies or services for grounds maintenance, wall repair and painting,
carpet and carpet installation, security and protection services, and audit services.
The amount paid for each of these supplies or services exceeded $10,000 for
calendar years 2011 and 2012; however, the property did not receive written cost
estimates from at least three contractors. In 2011 and 2012, it spent $167,851 for
ongoing supplies and services. The property’s expenses are detailed in the table
below.
Goods or services 2011 2012 Total
Audit services $11,250 $12,350 $23,600
Grounds 10,350 * 10,350
Trash collection & waste 14,496 18,015 32,511
management
Security & protection ** 14,352 14,352
services
Wall repair & painting 42,812 26,933 69,745
Carpet & carpet 13,308 36,496 49,804
installation
Total $92,216 $108,146 $200,362
* Funds spent in 2012 did not exceed $10,000 threshold
** Funds spent in 2011 did not exceed $10,000 threshold
4
In total, the property spent more than $200,000 for goods or services without
obtaining at least three written cost estimates. According to HUD Handbook
4381.5, paragraph 6.50, when contracting for goods or services, the property was
expected to solicit written cost estimates for any contract, ongoing supply, or
service that was expected to exceed $10,000 per year
This condition occurred because the property did not have adequate procurement
policies and procedures. Its contract policy consisted of guidelines for contracts
and did not provide guidance for establishing cost reasonableness for contracts
and ongoing supplies or services. As a result, the property could not ensure that
more than $200,000 spent on goods or services were reasonable.
Recommendations
We recommend that the Acting Director of HUD’s Kansas City Office of
Multifamily Housing require the property to
1A. Provide cost justification for the $200,362 spent on goods or services in
fiscal years 2011 and 2012 and any goods or services expected to exceed
$10,000 in fiscal year 2013 by obtaining written cost estimates from at
least three contractors or reimburse the unsupported amount to the
property’s operating account from non-project funds.
1B. Develop and implement procurement policies and procedures to ensure
compliance with HUD regulations, including Handbook 4381.5, paragraph
6.50.
5
RESULTS OF AUDIT
Finding 2: The Property Did Not Provide Proper Notice and Start
Eviction Procedures for Nonpayment of Rent
The property did not provide proper notice and start eviction procedures for nonpayment of rent
in accordance with its policy. This condition occurred because the property manager disregarded
the rent collection policy. As a result, the property lacked funds in its operating account to pay
other property expenses.
The Property Did Not Provide
Proper Notice and Start
Eviction Procedures
The property did not provide notice and start eviction procedures for nonpayment
of rent in accordance with its policy. The property’s rent collection policy
required it to provide tenants with an initial notice of late rent, allowing the tenant
10 days to meet with the property manager and discuss the pending lease
termination for nonpayment of rent. According to the property’s policy, the
property manager should serve a second notice 7 days from the initial notice,
allowing the tenant 3 days to pay rent or vacate the property. If the tenant still
had not paid the rent, the property should begin eviction procedures 3 days
following the second notice.
This condition occurred because the property manager disregarded the rent
collection policy. The property manager served tenants with a 3-day notice to pay
or vacate for nonpayment of rent without mentioning that the tenant had 10 days
to discuss the termination with property staff. Additionally, the tenants were not
served with a second notice if rent remained unpaid after 7 days, in accordance
with its policy. Instead, the property waited until the tenant did not pay for a
second month before serving a second notice and starting eviction procedures.
As a result of not collecting rent and not starting eviction procedures in
accordance with its policy, the property lacked funds in its operating account to
pay other property expenses. As of December 31, 2012, the property owed its
management agent more than $298,000 at a time when the property had $46,136
in tenants’ accounts receivable, including $18,268 due to nonpayment of rent.
6
Recommendations
We recommend that the Acting Director of HUD’s Kansas City Office of
Multifamily Housing
2A. Require the property to implement its existing rent collection policy.
2B. Perform additional monitoring to ensure the rent collection policy is
properly implemented by the property.
7
RESULTS OF AUDIT
Finding 3: The Property Paid for Travel Expenses for Individuals Not
Employed by the Property
The property paid travel expenses for individuals not employed by the property. This condition
occurred because the property did not have a travel expense policy. As a result, it did not have
over $39,000 in its operating account to pay other property expenses.
The Property Paid for Travel
Expenses for Nonemployees
The property paid for travel expenses for individuals who were not front line
employees of the property. In discussions with property staff, we learned that the
individuals traveled to the property to prepare for monitoring reviews and
physical inspections. Further, after receiving an unsatisfactory rating during a
management review in 2011, the property had these individuals travel to the
property to help clean up the physical property and tenant files. These files and
the physical property should be properly maintained by front line staff.
Preparation before and correction of deficiencies found after a review or
inspection should not be necessary if they are adequately performing their front
line duties. If their performance is not adequate, this is a management problem to
be dealt with at the management agent level and at a cost to the management
agent. The table below outlines the property’s travel expenses, and the table in
Appendix C includes a more detailed breakdown.
Year Travel Expenses
2011 $37,560
2013 1,905
Total $39,465
Note: In 2012, the property did not incur
any travel expenses for nonemployees.
This condition occurred because the property did not have a travel expense policy
that ensured only travel costs related to the project were paid. The property’s
management agent charged the travel expenses to the property because it
incorrectly classified the travel as an allowable front-line travel expense, such as
meeting with contractors or making bank deposits. However, according to HUD
Handbook 4381.5, paragraph 6.39(b)(1), costs for designing procedures/systems
to keep the project running smoothly and in conformity with HUD requirements
should be paid out of management fee funds. Furthermore, paragraph 6.39(b)(5)
states fees associated with monitoring projects by visiting the project should be
8
taken from the management fee and not charged to the operating account.
Therefore, the property’s management agent should have paid for the travel
expenses and not the property.
As a result of the improper payment, the property did not havethese funds
available to pay other property expenses. In 2011 and 2013, the property spent
more than $39,000 on travel expenses for individuals not employed by the
property.
Recommendations
We recommend that the Acting Director of HUD’s Kansas City Office of
Multifamily Housing require
3A. The management agent to reimburse the property for the $39,465 in
ineligible travel expenses.
3B. The property to create and implement a travel expense policy to ensure
compliance with HUD Handbook 4381.5.
9
SCOPE AND METHODOLOGY
Our review generally covered the period January 1, 2011, through March 31, 2013. We
performed onsite work from April 29 through June 21, 2013, at Windridge Apartments, located
at 2502 Wildwood Lane, Wichita, KS.
To accomplish our objectives, we
• Reviewed applicable Federal regulations and HUD handbooks, as well as the property’s
tenant selection plan, rent collection policy, and other internal policies and procedures;
• Reviewed the property’s audited financial statements;
• Reviewed the property’s general ledger and monthly accounting reports;
• Reviewed support for the property’s travel expenses for January 1, 2011, through March
31, 2013; and
• Interviewed property and HUD Kansas City Office of Multifamily Housing staff.
We reviewed a sample of 40 of 216 tenant files (18.5 percent). We selected 2 of the 40 tenants
because they had the largest credit balances as of December 31, 2012, and we selected another
35 of the 40 due to the tenants’ owing the highest amount of rent and damages to the property.
Additionally, we randomly selected one tenant who was written off as uncollectible in 2012, and
we randomly selected the last two tenants from the 2012 tenants’ accounts receivable listing. As
of December 31, 2012, the tenants selected collectively owed $14,823 in unpaid rent and
$23,687 in damages, totaling $38,510 in tenants’ accounts receivable. As of December 31, 2012,
the property had $46,136 in tenants’ accounts receivable, but before that date, the property wrote
off more than $35,000 in 2012 and $49,000 in 2011.
We also reviewed a sample of 194 invoices totaling $76,615. We randomly selected 29 of the
194 invoices from the property’s general ledger after reviewing the ledger for expenses
exceeding $10,000 annually. The other 165 invoices represented 100 percent of invoices for
2011 and 2012 for three vendors that performed heating and air conditioning repair for the
property. The population from which we selected our sample consisted of 1,072 invoices
totaling $380,329. We sampled more than 20 percent of the total dollar amount of the
population.
We relied, in part, on accounting data provided by the property. Although we did not perform a
detailed assessment of the reliability of the data, we determined that the computer-processed data
were sufficiently reliable to be used in meeting our objectives because the data in the sampled
items were corroborated by documentary evidence that the property supplied for the sampled
vendors.
We conducted the audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
10
INTERNAL CONTROLS
Internal control is a process adopted by those charged with governance and management,
designed to provide reasonable assurance about the achievement of the organization’s mission,
goals, and objectives with regard to
• Effectiveness and efficiency of operations,
• Reliability of financial reporting, and
• Compliance with applicable laws and regulations.
Internal controls comprise the plans, policies, methods, and procedures used to meet the
organization’s mission, goals, and objectives. Internal controls include the processes and
procedures for planning, organizing, directing, and controlling program operations as well as the
systems for measuring, reporting, and monitoring program performance.
Relevant Internal Controls
We determined that the following internal controls were relevant to our audit
objectives:
• Controls over procurement, rent collection, travel, and damage assessment.
We assessed the relevant controls identified above.
A deficiency in internal control exists when the design or operation of a control does
not allow management or employees, in the normal course of performing their
assigned functions, the reasonable opportunity to prevent, detect, or correct (1)
impairments to effectiveness or efficiency of operations, (2) misstatements in
financial or performance information, or (3) violations of laws and regulations on a
timely basis.
Significant Deficiencies
Based on our review, we believe that the following items are significant deficiencies:
• The property did not have adequate procurement policies and procedures to
ensure that HUD funds were expended in compliance with HUD rules and
regulations (see finding 1).
• The property did not have adequate travel expense policy to prevent travel for
nonemployees from being charged to the property’s operating account (see
finding 3).
11
Separate Communication of
Minor Deficiencies
We reported minor deficiencies to the auditee in a separate management
memorandum.
12
APPENDIXES
Appendix A
SCHEDULE OF QUESTIONED COSTS
Recommendation
Ineligible 1/ Unsupported 2/
number
1A $200,362
3A $39,465
1/ Ineligible costs are costs charged to a HUD-financed or HUD-insured program or activity
that the auditor believes are not allowable by law; contract; or Federal, State, or local
policies or regulations.
2/ Unsupported costs are those costs charged to a HUD-financed or HUD-insured program
or activity when we cannot determine eligibility at the time of the audit. Unsupported
costs require a decision by HUD program officials. This decision, in addition to
obtaining supporting documentation, might involve a legal interpretation or clarification
of departmental policies and procedures.
13
Appendix B
AUDITEE COMMENTS AND OIG’S EVALUATION
Ref to OIG Evaluation Auditee Comments
Comment 1
14
Ref to OIG Evaluation Auditee Comments
Comment 1
15
Ref to OIG Evaluation Auditee Comments
16
Ref to OIG Evaluation Auditee Comments
17
Ref to OIG Evaluation Auditee Comments
Comment 2
18
Ref to OIG Evaluation Auditee Comments
Comment 3
Comment 3
19
Ref to OIG Evaluation Auditee Comments
20
OIG Evaluation of Auditee Comments
Comment 1 The property did not provide documentation to support they obtained cost
estimates from additional contractors, nor were they able to provide support that
the sourcing company had obtained cost estimates from other vendors. Further,
the property did not take steps to ensure that the prices provided by Buyers
Access were reasonable by obtaining cost estimates from at least three
contractors.
Comment 2 The rent collection procedures provided by the property and posted in the
property’s office were the only procedures that stated the steps the property would
take to collect the rent. Additionally, the property’s rent agreement states that all
termination notices must specify the date the agreement will be terminated and
advise the tenant that he/she has 10 days to discuss the proposed termination of
tenancy with the landlord. The property served tenants with a three-day notice to
pay or evict, and did not follow through with evictions in accordance with the
notice when tenants failed to pay rent.
Comment 3 The fees owed to the management agent are considered property expenses and
should be paid timely. As of December 31, 2012, the property’s accounts payable
balance included $298,756 payable to its management agent for management fees,
bookkeeping fees, and payroll and related expenses. This amount increased more
than $63,000 from 2011.
21
Appendix C
INELIGIBLE AND UNSUPPORTED COSTS DETAIL
Finding 3 – Travel expenses
Employee 2011 2013
1 $3,223 $0
2 7,577 0
3 300 0
4 1,722 0
5 427 0
6 1,962 0
7 4,378 0
8 2,507 942
9 1,781 963
10 2,076 0
11 2,836 0
12 468 0
13 559 0
14 684 0
15 876 0
16 225 0
17 178 0
18 492 0
19 210 0
20 5,079 0
Total $37,560 $1,905
Note: The property did not incur any travel
expenses for nonemployees in 2012.
22
Appendix D
CRITERIA
Form HUD-9839-B – Project Owner’s/Management Agent Certification
3. We agree to:
a. Comply with this project’s Regulatory Agreement, Mortgage & Mortgage Note, and
any Subsidy Contract or Workout/Modification Agreement.
b. Comply with HUD handbooks, notices or other policy directives that relate to the
management of the project.
4. The Agent agrees to:
a. Ensure that all expenses of the project are reasonable and necessary.
b. Exert reasonable effort to maximize project income and take advantage of discounts,
rebates and similar money-saving techniques.
c. Obtain contracts, materials, supplies and services, including the preparation of the
annual audit, on terms most advantageous to the project.
d. Credit the project with all discounts, rebates or commissions (including any sales or
property tax relief granted by the State and local government) received.
e. Obtain the necessary verbal or written cost estimates and document the reasons for
accepting other than the lowest bid.
f. Maintain copies of such documentation and make such documentation available for
your inspection during normal business hours.
g. Invest project funds that HUD policies require to be invested and take reasonable
effort to invest other project funds unless the owner specifically directs the Agent
not to invest those other funds
HUD Handbook 4381.5, REV 2 – The Management Agent Handbook, Chapter 6
6.39 Management Costs Paid from the Management Fee
a. Expenses for services that are not front-line activities must be paid out of management
fee funds, except for centralized accounting and computer services.
b. Salaries, fringe benefits, office expenses, fees, and contract costs for the following
activities must be paid out of management fee funds. These costs include:
(1) Designing procedures/systems to keep the project running smoothly and in
conformity with HUD requirements
(2) Preparing budgets required by the owner or HUD, exclusive of rent increase
requests and MIO (Management Improvement and Operating) Plans.
(3) Recruiting, hiring, and supervising project personnel.
(4) Training for project personnel that exceeds the line item budget for training
expenses.
(5) Monitoring project operations by visiting the project or analyzing project
performance reports.
(6) Analyzing and solving project problems.
(7) Keeping the owner abreast of project operations.
23
(8) Overseeing investment of project funds.
(9) Ensuring that project positions are covered during vacations, sickness, and
vacancies.
6.50 Contracting Guidelines
a. When an owner/agent is contracting for goods or services involving project income, an
agent is expected to solicit written cost estimates from at least three contractors or
suppliers for any contract, ongoing supply or service which is expected to exceed
$10,000 per year, or the threshold established by the HUD Area Office with jurisdiction
over the project.
b. For any contract, ongoing supply or service estimated to cost less than $5,000 per year,
the agent should solicit verbal or written cost estimates in order to assure that the project
is obtaining services, supplies and purchases at the lowest possible cost. The agent
should make a record of any verbal estimate obtained.
c. Documentation of all bids should be retained as a part of the project records for three
years following the completion of the work.
Windridge Rent Collection Policy
1. All rent must be paid by money order or check (NO CASH ACCEPTED) on or before the
first (1st) day of each month and will be considered late after the fifth (5th) day.
2. All rent not paid by the fifth (5th) day of each month will be subject to a $5.00 late fee on
the sixth (6th) day of the month. Thereafter, management may collect $1.00 for each
additional day that rent remains unpaid during the month it is due. All rents not paid by
the tenth (10th) of each month will result in eviction proceedings beginning on the
eleventh (11th) day of the month.
Residents shall pay a service charge of $30.00 on the second or each additional time a
check is not honored for payment (bounces). It is a policy of Interstate Realty that we do
not accept check from Residents after they have had two returned checks. All rent must
be paid by a money order or cashier’s check after having two returned checks.
3. At the time late charges are assessed (the close of the 5th day), a notice will be served in
accordance with HUD regulations. This notice will allow ten (10) days for Lessee(s) to
meet with the community manager and discuss the pending lease termination for non-
payment of rent. In no way does this policy state or imply that additional time has been
granted for payment of rent. All arrangements for deferred payments must be made prior
to the time that rent is due on the 1st of each month
4. Seven (7) days from service of the initial notice of lease termination, a second notice will
be served in accordance with the state law. This notice will allow three (3) days to vacate
the premises. If the rent remains unpaid, legal action will be taken by the community
office filing a forcible entry and detainer for possession of the premises and all rents are
due. Failure to respond to this court summons and/or a decision for possession by the
judge will require that you vacate the apartment and pay all charges and penalties
awarded by the courts decision.
24
NO RENT WILL BE ACCEPTED AFTER THE FORCIBLE ENTRY AND
DETAINER HAS BEEN FILED, EXCEPT THROUGH THE DIRECTION OF
THE COURT.
5. As stated in item 3 above, all arrangements, for deferred payments must be made prior to
the first of the month that rent is due. After the rent is delinquent, partial payments of
rent cannot be accepted. All rents due must be paid in full. Any resident wishing to
retain his/her rights of occupancy after the official three (3) day notice (required by the
state) is served, must pay all delinquent rent, all late charges, all court costs (if any), and
any damage charges. In addition, the rent for the following month must be paid.
After the forcible entry and detainer is filed, no payment will be accepted except as
directed by the court. It is not the policy or practice of this apartment community to use
local courts as a collection agency. Any court action filed for possession of the premises
and all accrued charges permitted under state law. Any resident may present a legal
defense at any hearing that affects his/her occupancy at said property.
Windridge Landlord/Tenant Agreement
Paragraph 23
Termination of Tenancy:
a. To terminate this Agreement, the Tenant must give the Landlord 30-days written notice
before moving from the unit.
b. Any termination of this Agreement by the Landlord must be carried out in accordance with
HUD regulations, State and local law, and the terms of this Agreement.
c. The Landlord may terminate this Agreement for the following reasons:
(1) the Tenant's material noncompliance with the terms of this Agreement;
(2) the Tenant's material failure to carry out obligations under any State Landlord and
Tenant Act;
(3) drug related criminal activity engaged in on or near the premises, by any tenant,
household member, or guest, and any such activity engaged in on the premises by any
other person under the tenant's control;
(4) determination made by the Landlord that a household member is illegally using a drug;
(5) determination made by the Landlord that a pattern of illegal use of a drug interferes
with the health, safety, or right to peaceful enjoyment of the premises by other
residents;
(6) criminal activity by a tenant, any member of the tenant's household, a guest or another
person under the tenant's control:
(a) that threatens the health, safety, or right to peaceful enjoyment of the premises by other
residents (including property management staff residing on the premises);
(b) or that threatens the health, safety, or right to peaceful enjoyment of their residences by
persons residing in the immediate vicinity of the premises;
(7) if the tenant is fleeing to avoid prosecution, or custody or confinement after conviction,
for a crime, or attempt to commit a crime, that is a felony under the laws of the place
from which the individual flees or that in the case of the State of New Jersey is a high
misdemeanor;
(8) if the tenant is violating a condition of probation or parole under Federal or State law;
25
(9) determination made by the Landlord that a household member's abuse or pattern of
abuse of alcohol threatens the health, safety, or right to peaceful enjoyment of the
premises by other residents;
(10) if the Landlord determines that the tenant, any member of the tenant's household, a
guest or another person under the tenant's control has engaged in the criminal activity,
regardless of whether the tenant, any member of the tenant's household, a guest or
another person under the tenant's control has been arrested or convicted for such
activity.
d. The Landlord may terminate this Agreement for other good cause, which includes, but is not
limited to, the tenant's refusal to accept change to this agreement. Terminations for "other
good cause" may only be effective as of the end of any initial or successive term.
The term material noncompliance with the lease includes: (1) one or more substantial
violations of the lease; (2) repeated minor violations of the lease that (a) disrupt the livability
of the project; (b) adversely affect the health or safety of any person or the right of any tenant
to the quiet enjoyment to the leased premises and related project facilities, (c) interfere with
the management of the project, or (d) have an adverse financial effect on the project (3)
failure of the tenant to timely supply all required information on the income and composition,
or eligibility factors, of the tenant household (including, but not limited to, failure to meet the
disclosure and verification requirements for Social Security Numbers, or fail me to sign and
submit consent forms for the obtaining of wage and claim information from State Wage
Information Collection Agencies), and (4) Non-payment of rent or any other financial
obligation due under the lease beyond any grace period permitted under State law. The
payment of rent or any other financial obligation due under the lease after the due date but
within the grace period permitted under State law constitutes a minor violation.
e. If the Landlord proposes to terminate this Agreement, the Landlord agrees to give the Tenant
written notice and the grounds for the proposed termination. If the Landlord is terminating
this agreement for "other good cause," the termination notice must be mailed to the Tenant
and hand-delivered to the dwelling unit in the manner required by HUD at least 30 days
before the date the Tenant will be required to move from the unit and in accordance with
State law requirements. Notices of proposed termination for other reasons must be given in
accordance with any time frames set forth in State and local law. Any HUD required notice
period may run concurrently with any notice period required by State or local law. All
termination notices must:
• specify the date this Agreement will be terminated;
• state the grounds for termination with enough detail for the Tenant to prepare a defense;
• advise the Tenant that he/she has 10 days within which to discuss the proposed
termination of tenancy with the Landlord.
The 10-day period will begin on the earlier of the date the notice was hand-delivered to
the unit or the day after the date the notice is mailed. If the Tenant requests the meeting,
the Landlord agrees to discuss the proposed termination with the Tenant;
• and advise the Tenant of his/her right to defend the action in court.
f. If an eviction is initiated, the Landlord agrees to rely only upon those grounds cited in the
termination notice required by paragraph e.
26
Windridge Apartments Did Not Administer Its Program in Accordance With HUD Rules and Regulations and Its Own Policies and Procedures
Published by the Department of Housing and Urban Development, Office of Inspector General on 2013-11-07.
Below is a raw (and likely hideous) rendition of the original report. (PDF)