Note: Taping the Notice to the outside of each unit is not acceptable.

3. If the population of the project speaks a language other than English, owners must provide the notification letters in the appropriate language(s). The cost of the translation of the letter is an eligible project expense.

• C. Content of Notification Letter. Owners must include certain information in a notification letter. To meet the legal requirements for notification, this Guide provides owners with a sample one-year notification letter for use when an owner intends to opt-out of the project-based Section 8 contract. The sample is Appendix 11-1.

  1. Owners must use a letter that contains the language included in the sample letters provided in this Guide.

  2. While owners are not required to specify the reasons for opting out, owners are encouraged to provide as much information as possible to the tenants and HUD.

  3. Owners must state that they will honor the tenants’ right to remain and will continually renew leases if:

     • The project is offered as rental housing;

     • The PHA continues to find the rent reasonable; and

     • There is no cause for eviction under Federal, State or local law.

  4. If an owner states that it intends to renew the contract, but later decides to opt-out of the contract, the owner must provide tenants, HUD, and the CA with a new one-year notification of this change of plans. Tenants, HUD, and the CA must receive a one-year notification of an owner’s decision to opt-out.

  5. If an owner elects to go to Recap for a debt restructure and/or rent reduction, upon execution of the Interim-Lite or Interim-Full Contract, the owner must provide a new one-year notification to the tenants.

  6. Owners who elect to go to Recap and who decide during the restructuring process that they want to opt out of the project-based Section 8 contract, must provide tenants with a 120-day notice of their decision to opt-out (Sample found at

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Appendix 11-3). The 120-day notice is in addition to the one-year notice issued upon entry to Recap and discussed in 5 above.

• D. AE/CA Review. All tenant notification letters must be reviewed by the AE/CA either before the letters are sent to the tenants or at the time the letters are sent to the tenants to confirm the letters are consistent with the established requirements. In cases where HUD is not the CA, the owner must send a copy of the notification letter to HUD. Although HUD does not require owners to submit the notification letter for review before issuance, to avoid situations where a faulty notice must be corrected after it has been given to the tenants, owners are encouraged to submit letters for review 30 days in advance of the one-year period. Absent early submission to the AE/CA, owners must submit the tenant notification letters to the AE/CA and the tenants at the same time.

owners to submit the notification letter for review before issuance, to avoid situations where a faulty notice must be corrected after it has been given to the tenants, owners are encouraged to submit letters for review 30 days in advance of the one-year period. Absent early submission to the AE/CA, owners must submit the tenant notification letters to the AE/CA and the tenants at the same time.

In cases where an owner issues “intend to renew” letters, no AE/CA action beyond reviewing the letters for established requirements is required. However, if an owner sends “does not intend to renew” letters, the AE/CA must review the letter within 30 days of receipt from the owner. No HUD approval is required before the one-year clock starts; however, if the AE/CA review determines that the letter is not in compliance with HUD requirements, the owner will be notified that a corrected notice must be issued. In these cases, the one-year clock does not begin until the proper notice is provided to HUD, the CA and the tenants. (See Appendix 11-2 for a sample letter)

1. If the AE/CA review determines that the letter is acceptable, no action by the AE/CA is necessary.

2. If the AE/CA review determines that the letter is unacceptable, the AE/CA will notify the owner that it has failed to provide proper notification to HUD/CA and the tenants.

• E. Unacceptable Notice. If an owner fails to provide proper one-year notification to HUD/CA and the tenants, the owner must permit the tenants to remain in their units without increasing their portion of the rent for whatever period is necessary to meet all the notification requirements.

  1. Section 524(d)(1) of MAHRA requires HUD to make enhanced voucher assistance available to low-income families residing in an assisted unit in a project consisting of more than four dwelling units upon HAP expiration. Section 524(d)(1) makes no exception for cases in which the owner fails to issue a Notice or in which the Notice issued by the owner does not comport with HUD’s regulations.

  2. When a HAP contract expires without the proper notice requirement being met, the PHA will still decide regarding family eligibility for enhanced voucher assistance.

     • a. If the family is eligible and wishes to move from the project, the PHA will immediately provide the family with a voucher to do so (the special enhanced provisions do not apply in the case where the family uses the voucher).

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  - b. If the family is eligible and wishes to stay in the project, the PHA will inform the family and the owner that the assisted tenancy with enhanced voucher assistance will commence as soon as the owner satisfies the proper one-year notice requirements. Since the law provides that the family can remain in the assisted unit with no increase in their portion of the rent until proper notice is given, there is no need for the enhanced voucher assistance to begin before that time. 

  - c. If the family is not eligible for enhanced voucher assistance, the family may remain in the unit with no increase in their rent payment until the owner satisfies the notice period.

3. In instances where the owner intends to opt-out of the Section 8 contract and additional time is needed to meet the full one-year notice period, owners are encouraged to enter into a short-term renewal contract (at current rents) with a term that is sufficiently long to allow the owner to provide the full one-year notice of contract expiration. Unless the owner enters into a short-term renewal contract, the owner will receive only the tenant portion of the rent the families were paying under the expired contract until the full one-year notice period has been met, since the enhanced voucher assisted tenancy will not commence until that time.

• F. Short-term Contracts. In general, upon execution of a short-term contract, the owner must provide a one-year notification to tenants and HUD/CA. Over the course of this one-year period, the owner and HUD/CA may agree to additional short-term extensions. The owner is not required to provide a new Notice each time a subsequent short-term extension is granted within the one year time-frame of the Notice. If the owner accepts another short-term renewal after the 12-month notification period has expired, the owner will be subject to another 12-month notification requirement. Exceptions to this general policy are as follows:

  1. Where the owner has fulfilled his/her notification requirement, but agrees to execute a contract for less than one year solely to provide HUD with enough time to provide Section 8 tenant-based assistance, execution of a short-term contract does not require a new notice requirement because it is granted to protect the tenants.

  2. Where an owner provided tenants and HUD with the proper notification of its intent to opt-out and then accepts a short-term renewal to consider accepting a Section 8 contract under the terms of Mark-Up-To-Market (MUTM), the owner shall not be subjected to another one-year notification requirement.

• G. Selection of Option at Contract Expiration. One hundred twenty (120) days before the contract expiration, owners must notify HUD’s local Regional Center/Satellite Office Director/CA (whichever is applicable) in writing that they are going to renew or opt-out of their Section 8 contract (as noted in earlier chapters). In cases of an opt-out, HUD needs this time to obtain enhanced vouchers for the eligible families living in the assisted units. At this time, the AE/CA should again contact the owner to explore alternatives to opting out, particularly MUTM. HUD will renew the contract up until the day the contract expires if the owner decides against opting out.

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• H. Reserved

• I. State and Local Requirements. In addition to meeting the above Federal notification requirements, Section 8 project owners are reminded to comply with any State or local notification requirements. Owners should check with their appropriate local authorities to find out about such requirements.

• J. Long-Term Contracts. Upon signing a long-term contract renewal, owners are encouraged to notify tenants in writing that they have agreed to a long-term contract renewal agreement with HUD. This letter should inform the tenants that they will receive a one-year written notification of the expiration of the long-term contract.