6-12 Modifying the Lease

• 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.

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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.

• 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.

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