10.7.2 Required Contents

A. The owner and agent may negotiate their own form of agreement provided that it contains language which meets the following requirements:

1. Scope of services. All management agreements must describe the services the agent is responsible for performing and for which the management fee will be paid.

2. Required clauses. All management agreements must contain the following required provisions, in addition to the language from the Regulatory Agreement, form HUD-92466M (see sections 17. Books Maintained by Management Agents, and 21. Management, or any successor provisions), and the requirements in the Project Owner’s Management Agent’s Certification form HUD-9839-B (see paragraphs 1.b, 8 and 9, or any successor provisions.

Management fees will be computed and paid according to HUD requirements.

HUD may require the owner to terminate the agreement:

• 1. Immediately without penalty if an event of default occurs under the Security Instrument, Note or Regulatory Agreement; or
• 2. Upon 30 days written notice, for failure to comply with the provisions of the Management Certification or for other good cause; or
• 3. When HUD takes over the property as Mortgagee in Possession.

NOTE: The management agreement must always give the owner the ability to terminate the contract for cause, with no more than a 30-day notice period.

• If HUD terminates the agreement pursuant to its authority under the loan documents (form HUD92466M, Regulatory Agreement provision 21), the owner will promptly make arrangements for obtaining an alternative Management Agent that is satisfactory to HUD.

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Chapter 10 Management Analysis 10.8 Approval of Proposed Management Agent

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• HUD’s rights and requirements will prevail in the event of any conflicts with the terms of the management agreement.

• The Management Agent must turn over to the owner all of the project’s cash, accounts, deposits, investments, and records immediately, but in no event no longer than 30 days after the date the management agreement is terminated.