1. Tenant Paid Utility Allowances Cindy Ross Contract Management Services
Master Class
Training
Tenant Paid
Utility Allowances
Cindy Ross
Contract Management Services

2. Utility Allowance Regulations
Source: HUD HQ Memo dated June 20, 2011
Carol J. Galante, Deputy Assistant Secretary for Multifamily
And
HUD-Seattle Utility Allowance Procedure

3. Analysis – and – supporting documentation
BOLD lettering throughout this presentation is a representation of the most common submission deficiencies…
The Owner must provide the Contract Administrator (CA) a 12 month analysis of utility costs that residents incur on an annual basis
Analysis – and – supporting documentation
Must be sent to the CA at least 120 days prior to the HAP contract’s anniversary date, along with the Owner’s annual Rent Adjustment/Contract Renewal packet

4. At least six (6) months prior to the contract’s anniversary date, the Owner collects utility data from either the: 1) Resident; 2) Utility Provider; or 3) a combination of both.
Example:
HAP contract = 2/1/2015 – 1/31/2020
The entire Owner’s Packet: Utility Allowance Analysis and Rent Adjustment or Contract Renewal paperwork should be received at the CA’s office on or before 10/3/2014 (120 days prior to the contract’s anniversary)
Contract Anniversary = February 1st
Six months prior to February 1st = August 1st, 2014
Data collection period = July 2013 through June 2014

5. Suggested: The Owner generates a 12 month vacancy report for the property that reflects the months included (July 2013 – June 2014) in the analysis:
Include the vacancy report as supporting documentation for the analysis (not required, but this helps YOU and US in case discrepancies exist)
Remove all units that experienced a vacancy during the analysis timeframe from the calculations
The analysis and supporting documentation (copies of billings, or unit specific data obtained directly from the utility provider) must be for all units that did NOT experience a vacancy during the 12 month analysis period (assisted units)

6. When the property has unit types (1 Bd. , 2 Bd. , etc
When the property has unit types (1 Bd., 2 Bd., etc.) with 10 or fewer units
Data should be collected for all units which have not experienced a vacancy
No less than three (3) units
When the property has unit types (1Bd., 2 Bd. , etc.) with 11 or more units
Data must be collected for 20% of units for each unit type
No more than 20 units

7. The data collected must:
Be for the most recent 12 month period possible
Begin or end during the same service month, when the unit’s resident pays for more than one type of utility
February’s gas billing dates: 2/10/2014 – 3/9/2014
February’s electric billing dates: 1/25/2014– 2/24/2014
Include billed charges (cost of electricity, gas, etc.)
Include total billing adjustments, as applicable

8. The Owner prepares a spreadsheet that averages utility costs incurred for each qualifying unit over the 12 month analysis period by unit type
Sample spreadsheet available at
The CMS spreadsheet will calculate the average allowance(s) and has a space for the Owner’s recommendation

9. Sample posting/letter is available at: www.cms-results.com
When the spreadsheet indicates that a decrease of any amount is warranted to one or more of the unit types at the property, the Owner must inform the residents in writing that they are submitting a request to lower the tenant-paid utility allowance.
Sample posting/letter is available at:
Tenant Notification

10. The Owner serves notice to residents approximately five (5) months prior to the Contract Anniversary
Notice must be served by delivery (1 or 2 story buildings)
Notice may be served by mail or direct delivery or by posting in three (3) conspicuous places within each building that has three (3) or more floors
All materials associated with the Rent Adjustment or Contract Renewal and Utility Allowance Analysis must be made available to the residents for review and copying for 30 calendar days
When the Owner makes any material change after initial tenant notification, they must re-post and give the residents an additional 15 calendar days to review and comment
All of these steps should be completed prior to 120 days before the contract’s anniversary date
Tenant Notification

11. Tenants have the right to participate, establish and operate a tenant organization to address issues related to their living environment
The Owner must recognize tenant organizations providing reasonable consideration to concerns raised
Legitimate Tenant Organizations:
Must be established by the residents of multifamily housing properties
Must meet regularly
Must operate democratically
Must be completely independent of Owners, Management and their Representatives
Tenant Notification

12. All comments received from residents or a tenant organization must be evaluated by the Owner; the Owner may:
Respond via letter
Respond via “Town Hall” type meeting
The Owner must certify that they are compliant with all of the requirements of the CFR, after the 30 day posting period has ended:
Certification available at:
Tenant Notification

13. See www.cms-results.com for detailed checklists of necessary forms
The Owner may electronically submit their Contract Renewals, Rent Adjustments, and Utility Analysis paperwork to the CA via
Additionally, any documents with “wet” Owner signatures must also be mailed to the CA
The Owner packet will include:
Renewal or Rent Adjustment Forms & Certifications
Utility Allowance Summary/Recommendation, supporting documentation, copies of all resident comments received, and the Owner’s response to the residents’ comments
Owner’s Certificate of Compliance with tenant notification requirements
See for detailed checklists of necessary forms

14. © 2015 Contract Management Services
Should you have any further inquiries, please contact:
Cindy Ross
CMS Associate Director
(360)
© 2015 Contract Management Services
All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without prior written permission of Contract Management Services.
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