HUD REAC Publishes Additional Requirements for Database Adjustment Appeals

As of March 20, 2019 additional rules will be added to documentation required in order for REAC appeals involving "Ongoing Modernization Work in Progress". Essentially, these changes are expanding upon the documentation requirements for REAC appeals already in place, adding new levels of detail and additional scrutiny.The following language was added to REAC's website:

Changes to the below documentation requirements for the Database - Modernization Work in Progress will be effective on or after March 20, 2019 inspections Modernization Work in Progress – Properties and developments undergoing modernization work in progress may qualify for a database adjustment for observed deficiencies actively being worked on at the time of the inspection.
What is supporting documentation for a DBA request based on modernization work in progress?

To request a database adjustment based on modernization work in progress at the time of inspection, the request must be submitted within the 45-day timeframe and include:

1. An executed contract with a copy of the scope of work, including change orders if applicable;
2. A Notice to Proceed with start and completion dates;
3. An affidavit from the contractor's authorized representative identifying:
(a) the modernization work in progress that it was performing at the time of the inspection
(b) the identifiable location of the work in progress;
(c) the work it has completed as of the date of the affidavit;
(d) the date on which the work was completed; and
(e) if the work is not completed as of the date of the affidavit, an explanation of why the work is still in progress and when it will be completed; and
4. Photographic evidence sufficient to show that the observed deficiencies have been corrected or are in the process of being corrected.
Documents submitted from the contractor(s) must be on the contractor's letterhead and include the contractor's licensing and contact information. Only the observed deficiencies that were in the process of being corrected by modernization work in progress at the time of inspection are eligible for consideration. Modernization work to be performed under an executed contract, but was not in progress at the time of the inspection, is not eligible for a database adjustment.

Before processing a database adjustment, REAC may contact the contractor for additional information or visit the property to verify the information submitted in the appeal.

This change in document requirements is not substantially different than what was previously required, with the exception of new requirements for photographs of work in progress to be included, as well as language about the need for the work to be in progress at the time of the inspection, which in some cases could be open to interpretation.

With this coinciding with the effective date of the new 14 calendar day notice for REAC Inspections, there are many additional considerations to include when considering non-compliance exposure. This may include delaying modernization work until after REAC inspections to mitigate possible non-compliance risks or other approaches to prevent large scale improvements to intersect with REAC Inspections. At the bare minimum, where REAC inspections and attempts to perform modernization intersect, owners/agents will need to carefully prepare documentation before and after their inspections. 

HUD Notice on Processes to Delay REAC Inspection S...
Preparing for New REAC Realities: A Time to Re-Exa...

Latest Blogs

13 January 2020
REAC Inspections
Resident Involvement in REAC/NSPIRE Inspection Process​​As part of the NSPIRE pilot process, HUD has announced that additional processes will be added to engage the residents in the REAC/NSPIRE process. You can read the press release on HUD's website...
24 August 2019
REAC Inspections
On August 21, 2019, HUD published a set of proposed rules in the Federal Register "Notice of Demonstration To Assess the National Standards for the Physical Inspection of Real Estate and Associated Protocols" 24 CFR Parts 5 and 200; [Docket No. FR–6...
21 August 2019
REAC Inspections
On August 20, 2019, HUD released the first of the new NSPIRE protocols which will be expected to become active once the pilot/demonstration program has concluded. This is a first look at what deficiencies will look like under NSPIRE, the inspection ...
16 July 2019
REAC Inspections
July 8, 2019 HUD's Office of Multifamily Housing Asset Management and Oversight released a memorandum reiterating the rules surrounding notice prior to entering resident's units, availability of documentation for residents to review, and clarificati...
09 July 2019
REAC Inspections
The House Financial Services Committee passed a bill - the Safe Housing for Families Act of 2019 (H.R. 1690), and it will likely move forward to a full vote in the near future. The bill provides $300 million over three years to fund the installation...

Blog Archive