What are the processing guidelines when changes are reported?
When a tenant requests an interim recertification or when a tenant reports changes in income or other circumstances as required, the owner must take the following steps when processing an interim recertification.
What if a tenant failed to report a change?
Owners must take the following steps upon learning that a tenant failed to report a change in income or family composition, as stated in the lease.
What effective date should be used?
The most common IR-related question we receive at US Housing Consultants is what effective date to utilize for IRs and the answer depends on the owner’s policy. How many days does your policy allow for reporting required changes? How many days does your policy allow for reporting optional changes?
The HUD Handbook 4350.3 Rev-1, Chg-4 suggests that required changes need to be reported within a reasonable timeframe. Since the Handbook mentions that four weeks is a reasonable timeframe to complete an IR, it can be assumed that a month to report changes is considered reasonable, unless the owner’s policy is more strict.
If no policy is currently in place, it is recommended that one is created, implemented and distributed to all tenants as soon as possible. Without a policy, it is difficult to ensure IRs are being processed in a consistent manner.
If the tenant complies with the interim reporting requirements (and within the timeframe established by the owner), rent changes must be implemented as follows:
If the tenant does not comply with the interim reporting requirements (and within the timeframe established by the owner), and the owner discovers the tenant has failed to report changes as required, the owner initiates an interim recertification and implements rent changes as follows:
Owners must provide the tenant with written notice of the effective date and the amount of the change in TTP or tenant rent resulting from the interim recertification.
For interim recertifications, both the change in assistance payment and change in TTP or tenant rent are effective on the same day.
What effective date should be utilized for this IR to remove employment income?
Answer: May 1, 2016. Since the tenant did not comply with owner’s policy of reporting changes within 10 days, the action that is causing the IR is the tenant reporting the change; therefore, the effective date is May 1, 2016.
What effective date should be utilized for this IR to add employment income?
Answer: June 1, 2016 to allow a 30-day notice of rent increase (unless the state and/or local law dictates a date that is of greater benefit to the tenant) since the tenant reported the required change timely.
What effective date should be utilized for this IR to add the child?
Answer: May 1, 2016. The tenant did not report a required change timely; therefore, the action that is causing the reduction in tenant rent is the tenant reporting the change.
What effective date should be utilized for this IR to change citizenship status?
Answer: May 1, 2016. The tenant did not report an optional change timely; therefore, the action that is causing the reduction in tenant rent is the tenant reporting the change.
The Labor Department recently issued its final rule that lifts the overtime pay threshold from $23,660 to $47,476 for exempt Executive, Administrative and Professional workers. The effective date of this rule is December 1, 2016 and the threshold will be updated every three years.
What is the difference between an exempt and a non-exempt employee?
Non-exempt employees are eligible for overtime pay. Employers must pay non-exempt employees one-and-a-half times their regular rate of pay when they work more than 40 hours in a week.
Exempt employees are not eligible for overtime pay. The Fair Labor Standards Act contains dozens of exemptions under which specific categories of employers and employees are exempted from overtime requirements. The most common exemptions are the white-collar exemptions for administrative, executive, and professional employees, computer professionals, and outside sales employees.
Exempt employees who were not required to receive overtime pay for time worked over 40 hours per week are now required to receive overtime pay at one-and-a-half times their regular rate of pay if their salaries are less than $47,476 per year.
For example, an administrative assistant works 50 hours per week and is exempt/salaried and earns $45,000 per year. The employers’ options with this newly updated standard salary level are:
How does this affect the affordable housing industry?
As always, owners/management agents must ensure the accuracy of the salary and hourly rate provided by the employer on the employment verification. Additional employer clarification may be required as a result of the Final Rule which becomes effective December 1, 2016. We recommend consulting with your state housing finance agency and/or local HUD office/Contract Administrator for additional guidance.