[Federal Register Volume 65, Number 110 (Wednesday, June 7, 2000)]
[Rules and Regulations]
[Pages 36272-36282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-14217]
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Part V
Department of Housing and Urban Development
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24 CFR Part 245
Tenant Participation in Multifamily Housing Projects; Final Rule
Federal Register / Vol. 65, No. 110 / Wednesday, June 7, 2000 / Rules
and Regulations
[[Page 36272]]
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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 245
[Docket No. FR-4403-F-02]
RIN 2502-AH32
Tenant Participation in Multifamily Housing Projects
AGENCY: Office of the Assistant Secretary for Housing-Federal Housing
Commissioner, HUD.
ACTION: Final rule.
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SUMMARY: This rule enhances and expands the rights of tenants in HUD-
insured and assisted housing to organize and participate in project
operation. Pursuant to statutory changes enacted in 1998, the rule
expands the assistance programs in which tenants have rights to
organize. The rule also defines general characteristics of a legitimate
tenant organization, such as regularity of meeting and democratic
organization, while leaving the specific organizational structures and
procedures to local decisionmaking by the tenants themselves. The rule
outlines examples of appropriate tenant organization activities that
housing owners and managers must allow, and requires that tenants have
input on certain management decisions. The rule sets parameters as well
for the conditions under which tenant organizers may operate. Finally,
in response to public comments, the rule clarifies that existing
administrative enforcement mechanisms apply.
DATES: Effective Date: July 7, 2000.
FOR FURTHER INFORMATION CONTACT: Willie Spearmon, Director, Office of
Housing Assistance and Grant Administration, U.S. Department of Housing
and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-
8000; telephone (202) 708-3000 (this is not a toll-free number).
Hearing-or speech-impaired individuals may access this number via TTY
by calling the toll-free Federal Information Relay Service at (800)
877-8339.
SUPPLEMENTARY INFORMATION:
I. The June 17, 1999 Proposed Rule
The proposed rule of June 17, 1999 (see 64 FR 32782) amended the
tenant participation rules in 24 CFR part 245. Implementing the
statutory mandate of section 599 of the Public Housing Reform Act, Pub.
L. 105-276 (approved October 21, 1998), codified at 12 U.S.C. 1715z-1b,
the proposed rule expanded the categories of multifamily housing
projects covered by part 245. The proposed rule sought to clarify the
reasonable tenant organizing activities that the owner of a covered
multifamily housing project must allow, and set forth extremely
detailed requirements for establishing, operating, and structuring a
tenant organization. In addition, the proposed rule established
policies regarding outside tenant organizers, the establishment of more
than one tenant organization, and the right of tenants to replace the
leadership of existing tenant organizations. A discussion of the
specific provisions is found in the preamble of the proposed rule at 64
FR 32782-32783 (June 17, 1999).
II. This Final Rule
This final rule adopts certain of the provisions of the proposed
rule, while adding certain provisions and eliminating others in
response to public comments. Specifically, this final rule
significantly revises proposed Sec. 245.110, and eliminates proposed
Secs. 245.115--245.135 (this final rule renumbers proposed
Secs. 245.140-160 as Secs. 245.115--245.135). A large number of
commenters stated that these sections, which proposed specific
requirements for the structure, voting procedures, and governing boards
of tenant organizations, tended to be overly prescriptive and that
tenants should be allowed to decide these matters for themselves based
on their particular situations and the best arrangements for their
housing complexes. While HUD would like tenant organizations to move
toward some sort of formal structures, HUD has decided to adopt this
``grassroots'' approach in arriving at those structures. Thus, rather
than defining in detail what constitutes a properly established tenant
organization, the final rule establishes basic general principles for
legitimate tenant organizations. For similar reasons, the final rule
eliminates proposed Sec. 245.160, related to additional tenant
organizations and recall elections.
The final rule revises the purpose statement in Sec. 245.100 to
more fully implement the purpose of the statute. In addition, the
revision responds to commenters who noted that the proposed language
defined the purpose of tenant organizations too narrowly.
One of the basic principles is that a tenant organization should be
independent of management. In order to insure the independence of
tenant organizations from owners and managers, the final rule revises
proposed Sec. 245.140 (now Sec. 245.115) to clarify that management
representatives may not attend organization meetings unless invited by
the organization to attend specific meetings to discuss particular
issues.
The final rule has made a change to the provisions regarding non-
tenants who seek to organize the tenants at a complex, in order to
conform this rule to the requirements of the mark-to-market program.
Specifically, persons who have received HUD grants to inform tenants
regarding mark-to-market, and who are acting pursuant to the terms of
such grant, may enter the property and speak to tenants without being
accompanied.
In response to comments regarding tenants with disabilities, the
rule has been slightly revised to take into account the fact that, if a
building, for whatever reason, does not have or has not been
retrofitted with accessible common areas, the tenant organization may
have to work with management to find a cooperative solution so that
disabled tenants may attend.
Finally, numerous commenters stated that HUD should include an
enforcement scheme. The rule adds a new Sec. 245.135 to clarify that
the administrative enforcement mechanisms in 24 CFR part 24 apply.
The public comment period on this proposed rule closed on August
16, 1999. HUD received 73 comments from a wide variety of commenters,
including individual tenants, tenant organizations, public housing
authorities, legal aid organizations, public interest advocacy groups,
building industry representatives, multifamily management
representatives, and one member of Congress. It should be noted that a
number of commenters were organizations and associations whose comments
were supported by a large number of other commenters. Because the
commenters commented on a wide variety of topics related to the
proposed rule, the following summary groups the comments by subject.
III. Summary of Public Comments
1. General Comments
Comment: The applicability of the rule should be curtailed. Tenant
participation in rental housing is not essential to the operation of
housing, and the final rule should not provide tenants with day to day
input into management decisions.
Nonprofit elderly projects should be excluded from the rule.
Response. The rule implements a statutory requirement that project
owners not impede the reasonable efforts of tenants to organize and
represent their members (see 12 U.S.C. 1715z-1b(b)(4)). In addition,
elderly projects are included in the tenant
[[Page 36273]]
management provisions of the statute, and hence cannot be excluded from
the rule. Therefore, HUD has made no change to the rule as a result of
these comments.
Comments: Certain technical changes should be made. The term
``resident'' should be used in place of ``tenant.''
The final rule should include a statement that it preempts local
law with respect to tenant organization, because owners may claim that
state laws allow them to bar one or more protected activities.
The regulations should be made consistent with the public housing
tenant participation regulations at 24 CFR part 964.
Response. Regarding the use of the term ``tenant,'' this is the
appropriate term based on the language in the statute, which extends
the right to organize to ``tenants'' (see section 202(a) of the Housing
and Community Development Amendments of 1978, 12 U.S.C. 1715z-1b(a)).
Regarding the suggestion that the regulation contain an explicit
statement that it preempts State law, HUD has concluded that regulatory
preemption is not necessary for HUD to fully implement the tenant
participation statute.
Regarding consistency with the public housing regulations, there
are important differences between public housing and housing with
mortgages insured or assisted under other HUD programs. In public
housing, the operation of the housing itself is much more pervasively
regulated than the private assisted housing that this regulation
affects. The tenant participation guidelines in this rule are designed
to fit the characteristics of assisted housing programs other than
public housing.
For these reasons, HUD has not made any changes to this rule as a
result of these comments.
Comment: Sensitivity training is necessary. HUD should provide
sensitivity training in tenants' rights to HUD field office staff and
property owners and management.
Response. Any sensitivity issues will be addressed via handbook
revisions, rather than implementing sensitivity training as part of
this rule.
Comment: Cooperation by HUD field offices is necessary. HUD's
Washington Headquarters must enforce cooperation from local HUD
offices, since not all local HUD offices support tenant organization.
Response. All HUD offices will be required to comply with this
regulation. No further change in this regulation is required as a
result of this comment.
Comment: Notices to tenants. The rule should directly implement the
policies regarding tenant organizations contained in the HUD
publication entitled ``Tenants' Rights and Responsibilities.''
Owners and managers should be required to issue to tenants a notice
regarding tenants' rights to organize.
Once a tenant organization has been formed at a particular housing
complex, all local notices regarding building code violations and all
Federal notices concerning programmatic regulations should be formally
transmitted to the tenant organization.
Response. Regarding implementation of the policies concerning
tenant organizations in the HUD publication (which is entitled
``Resident Rights and Responsibilities''), the publication reiterates
in a user-friendly manner the policies relating to tenant organizations
that are incorporated in the rule itself. Therefore, it is not
necessary to separately implement the policies stated in the brochure
as a rule.
Regarding the suggestion that project owners be required to notify
tenants of their rights to organize, however, HUD does plan to require
affected property owners and managers to provide information on
tenants' rights to tenants and tenant organizations through changes to
the model lease, Use Agreement and Regulatory Agreement.
Regarding the formal transmission to tenant organizations of
notices of local building code violations and all Federal notices
regarding new program regulations, while HUD is sympathetic to the need
for information, HUD does not believe that the best way to accomplish
this goal is through a generally applicable regulation. Local code
violations are a matter governed by local law, and individual tenant
organizations can negotiate information sharing with management on this
subject, in accordance with procedures and policies for their area.
Certainly, HUD expects assisted housing owners to comply with HUD's
Uniform Physical Conditions Standards as set forth in regulations.
As to new program regulations, such regulations are published in
the Federal Register, which is publicly accessible (see HUD World Wide
Web site instructions in the following paragraph). To the extent that
HUD sends notices to assisted housing providers regarding HUD policies,
these notices are also available from HUD's World Wide Web site or by
calling the local HUD field office or HUD's Multifamily Housing
Clearinghouse (800-685-8470).
Accessing HUD's World Wide Web: if you have a computer with
Internet access, you can access HUD notices and rules. From the HUD
home page - (http://www.hud.gov) select ``Reading Room'' from the left
hand side of the HUD home page. On the next screen, select ``Bookshelf
12: Legal Information.'' On the next screen, scroll down to ``HUD
Handbooks, Regulations and Notices.'' Click on that link. On the next
page, click on ``Search HUDCLIPS databases.'' Alternatively, you can go
directly to HUDCLIPS at http://www.hudclips.org. HUDCLIPS provides
tools to search or browse through various HUD materials, including
Federal Register publications, handbooks and notices (please keep in
mind that these instructions are current as of this date, and WWW pages
may change from time to time).
2. Comments on Section 245.10, the Applicability of Part 245
Comment: Exemption from coverage should be omitted. The exception
in Sec. 245.10(a)(3), which exempts from the coverage of ``Subpart B ``
Tenant Organizations'' all State or local housing finance agency
projects receiving assistance under section 236 of the National Housing
Act (see 12 U.S.C. 1715z-1) but without FHA-insured or HUD-held
mortgages, should be dropped.
Response: HUD is currently investigating whether the exclusion of
the State-financed Section 236 projects is appropriate, and is strongly
considering proposing a rule that would reverse this exclusion.
However, that change will have to be part of a separate rulemaking, as
notice of coverage of State-financed section 236 projects was not given
in the proposed rule.
Comment: ``Enhanced'' vouchers should not be included. Projects
receiving enhanced vouchers should not be included in the rule because
doing so would segregate tenants paying market rent from those
receiving rental assistance, and also because it may deter owners from
accepting enhanced vouchers.
Some commenters questioned how the rule could be enforced as to
enhanced vouchers in the absence of a regulatory agreement with HUD.
Other commenters took a contrary view and asserted that the rule
should clearly state that it applies to housing with ``enhanced'' or
``preservation'' vouchers.
Response. Section 599 of the Public Housing Reform Act, Pub. L.
105-276 (approved October 21, 1998) expressly includes in the coverage
of section 202 ``* * * a project which receives * * * enhanced vouchers
under the Low-Income Housing Preservation and Resident Homeownership
Act of 1990,
[[Page 36274]]
the provisions of the Emergency Low Income Housing Preservation Act of
1987, or the Multifamily Assisted Housing Reform and Affordability Act
of 1997.'' Section 245.10(a)(5) implements this express legal
requirement. Section 538 of the FY 2000 Department of Veteran's Affairs
and Housing and Urban Development and Independent Agencies
Appropriations Act (Pub. L. 106-74, approved October 20, 1999), unified
the various enhanced voucher authorities. This section is codified at
42 U.S.C. 1437f(t).
As to the issue of enforcement, payments of the non-tenant portion
of rent on enhanced vouchers are made to the owner by the PHA via a
Housing Assistance Payment contract. Such a contract is a lower-tier
covered transaction for the purposes of the enforcement mechanisms at
24 CFR part 24, which include Limited Denials of Participation,
Suspension and Debarment. Therefore, the enforceability of this rule in
the case of enhanced vouchers is clear.
Comment: Definition of ``project.''. The final rule should include
a definition of the term ``project'' to make clear that an entire
development or complex is encompassed in the rule.
Response. The term ``project'' is generally understood. For
example, see the definition of project under HUD's part 200 regulations
at 24 CFR 200.3. A further definition of ``project'' for part 245 is
not required.
3. Comments on Section 245.100, the Right of Tenants To Organize
Comment: Purpose clause is too narrow. The proposed purpose for
organizing and operating a tenant organization, that is, ``for the
purpose of addressing the terms and conditions of their tenancy,'' is
too narrow. Tenant organizations can be involved in a variety of
community activities, such as related to job training, neighborhood
improvements, Crime Watch, Meals on Wheels, and other activities.
This section should be broadly phrased to protect tenants' First
Amendment right to organize for any lawful purpose.
Response. The purpose of the underlying legislation includes a
recognition of the benefits of tenant participation in ``creating a
suitable living environment in multifamily housing projects'' (see 12
U.S.C. 1715z-1b(a)). Indeed, as commenters point out, tenant
organizations have been involved in a variety of activities that
enhance their living environment beyond merely the terms and conditions
of their tenancy, including the examples mentioned by the commenters
listed above. Therefore, HUD agrees that the purpose of addressing
``terms and conditions of tenancy'' should be revised. HUD has revised
Sec. 245.100 to read: ``The tenants of a multifamily housing project
covered under Sec. 245.10 have the right to establish and operate a
tenant organization for the purpose of addressing issues related to
their living environment, which includes the terms and conditions of
their tenancy as well as activities related to housing and community
development.''
Regarding the suggestion that the rule should be as broad as the
tenants' First Amendment right to organize for any purpose, HUD
strongly supports the First Amendment rights of all assisted housing
tenants, and expects assisted housing owners and managers to respect
those rights. This statute and rule, however, are specifically
addressed to tenant organizing for the purpose of enhancing the
tenants'' living environment.
Comment: Clarify independence from owners. Tenants have the right
to operate tenant organizations independently of the owner and the
owner's agents. To accomplish this, the final rule should add a
provision that permits a tenant organization to exclude from its
governing board, its membership, and its meetings any employee or agent
of the owner, including one who is a tenant.
Response. HUD agrees that tenant organizations should be
independent of owners and management. Therefore, this final rule
revises Sec. 245.110 to state in part that a legitimate tenant
organization ``meets regularly, operates democratically, is
representative of all residents in the development, and is completely
independent of owners, management, and their representatives.'' The
final rule also specifies that, in order to preserve independence,
tenant organization meetings should take place without the presence of
management representatives, unless the organization has invited them to
specific meetings to discuss specific issues.
4. Section 245.105, Recognition of Tenant Organizations
Comment: Preamble language undercuts rule. One commenter stated
that language in the preamble that states that ``[w]hile HUD encourages
owners to take these responses into consideration, the proposed rule
would not require that owners modify or abandon their proposals based
on the recommendations made by the tenant organization'' weakens the
assumption that tenant opinions will be given any reasonable
consideration, and calls into question the purpose of the rule.
Response. HUD believes that the rule as crafted strikes the right
balance between the rights of tenants and project owners and managers.
The language in the preamble does nothing more than recognize, in the
context of a discussion of the impact of the rule on small business,
that the rule does not grant tenant organizations the right to force
management to alter its proposals. On the other hand, the rule requires
management ``to give reasonable consideration'' to concerns raised by
tenant organizations and requires multifamily housing owners to allow
tenants to formulate responses to owners' requests for rent increases,
partial payment of insurance claims, reduction in tenant utility
allowances, and other matters stated in Sec. 245.115(a)(9). HUD fully
expects owners to consider the comments and input of tenant
organizations. Since HUD believes that the existing regulatory language
strikes the appropriate balance, HUD has adopted no change as a result
of this comment.
Comment: Rights of individual tenants. The proposed rule will
negatively affect the rights of individual tenants outside of
organizations. The rule implies that the owner is not required to give
consideration to the concerns of individual tenants.
The rule should clarify that it does not supersede subparts D and
E.
Response. HUD has carefully reviewed the rule, and determined that
nothing in the rule purports to deprive individual tenants of any
existing legal rights, or supersede subparts D and E (indeed, the rule
only purports to revise a portion of subpart A, and subpart B).
Therefore, HUD concludes that no further clarification of the
regulation is needed.
5. Section 245.110, ``Properly Established'' Tenant Organization;
Cross-References to Sections 245.115 (Constitution or By-Laws); 245.120
(Governing Board); 245.125 (Qualified Voting Member); 245.130 (Number
of Votes); 245.135 (Election Notices)
Comments: The proposed rule micro-manages the structure of tenant
organizations. A ``properly established'' tenant organization should
not be defined in terms of its compliance with proposed Sec. 245.110
and the other particular proposed organizational requirements that
section cross-referenced, but rather, HUD should use the definition in
its Management Agent Handbook 4381.5 REV-2, which states that
legitimate tenant organizations are groups that meet regularly, operate
democratically, are representative of all residents in the development,
and are
[[Page 36275]]
independent of non-resident owners and management agents. In addition,
a legitimate tenant organization should be completely independent of
management and the owner.
The ``properly established'' concept as proposed undermines the
right of tenants to establish and operate tenant organizations.
The following proposed sections represent inappropriate and
unnecessary intrusions into the rights of tenants to determine the
structure of their organizations: Secs. 245.115(b), 115(c);
245.120(a)(2), 120(b)(2), 120(c); 125; 130; and 135.
Proposed Secs. 245.110-245.135 may be appropriate in the public
housing context, but for privately owned housing, they are
unreasonable, unworkable, unduly burdensome, and serve no useful
purpose. HUD should adopt the definition from the Management Agent
Handbook.
The proposed requirements would interfere with existing functional
tenant organizations. Such organizations should be allowed to continue
operating as they have.
A tenant organization's legitimacy is not derived from written by-
laws, staggered terms, and term limits. Rather, it is derived from the
respect tenants accord the organization. The organizational proposals
are not based on reality and should be dropped.
Response. While HUD believes that tenant organizations should have
formal organizational structures, HUD recognizes that, given the wide
variety of possible structures that tenant organizations could use,
depending on their particular needs and membership, it is appropriate
to allow tenants to determine their organizations' structures and
procedures based on their needs. Therefore, HUD has accepted the
suggestion of a number of commenters to incorporate the guidance for
tenant organizations from the Management Agent Handbook in place of the
detailed organizational requirements of proposed Secs. 245.110-245.135.
Tenant organizations will be able to establish their procedures and
structures within those basic requirements of meeting regularly, being
democratically operated, representing all the residents of the
development, and being completely independent of owners and management
and their representatives.
6. Section 245.115, Constitution or By-Laws
Comment: Elections every three years. The rule should require that
elections be held at least every three years. The rule should require
that an independent third party oversee the elections.
Response. As stated above, given the multiplicity of different
types of tenant organizations and the large number of comments opposed
to HUD imposing specific organizational requirements by regulation, HUD
has revised the rule to require that tenant organizations, inter alia,
operate democratically and represent all the residents. Thus, tenant
organizations will have flexibility to set their own election
procedures within those guidelines.
7. Section 245.120, Governing Board
Comment: Independence from owners. The final rule should clarify
that owners and management employees may not run for elected office or
serve on a tenant organization's board of directors.
Response. The provision in Sec. 245.110 that tenant organizations
are completely independent of owners, management and their
representatives implies that management personnel may not serve on a
tenant organization's board of directors or as officers, and adequately
addresses this issue.
Comment: Procedures for electing governing board. The governing
board should be democratically elected by qualified voting members.
The issue of staggered terms (see proposed Sec. 245.120(a)(2))
should be decided by the tenant organization.
The proposed three year term limit for members of the governing
board should be removed because it will undermine the effectiveness of
tenant organizations by depriving them of their best leaders after
three years.
The requirement that governing board members be in compliance with
their leases should be dropped. First, there are tenant confidentiality
concerns. Secondly, the requirement gives the owner too much control
over the membership of the governing board. The appropriate sanction
for lease noncompliance is eviction.
Response. HUD agrees not to include the governing board regulations
in the final rule, but rather, in accordance with the approach taken
regarding other portions of the rule, to allow tenant organizations to
select their own organizational structures. Any governing boards would
be covered by the overall requirements that the tenant organization
must operate democratically and be representative of the residents.
8. Section 245.125, Qualified Voting Member
Comment: Conformance with public housing requirements. This section
should be revised to conform with 24 CFR 964.115(c), the public housing
resident council requirements.
Response. The requirements of the public housing program are not
necessarily appropriate for other assisted housing, which is privately
owned and operated. Furthermore, considering the numerous comments that
HUD received that the proposed rule was overly prescriptive as to the
nature of tenant organizations, HUD has decided to allow the tenants
themselves to decide this issue rather than closely regulating this
area.
9. Section 245.130, Number of Votes
Comment: There should be more than one vote per unit. Commenters
stated that there should be one vote per resident rather than one vote
per unit. One suggestion was that each member of a tenant family whose
income is counted toward rent should be allowed to vote. Other
commenters stated that any resident who is at least 18 years of age and
whose name appears on the unit lease should be allowed to vote, as in
public housing.
Response. Considering the numerous comments that HUD received that
the proposed rule was overly prescriptive as to the structure and
procedures of tenant organizations, HUD has decided to allow the
tenants themselves to decide this issue.
10. Section 245.135, Election Notices
Comment: 30 day notice. This section should require at least thirty
days' notice of nominations, as does 24 CFR 964.115(c), relating to
public housing resident councils.
Response. Considering this comment along with other comments
stating that HUD's proposals, including this section, were too
prescriptive in view of the varying needs of different tenant
organizations, HUD has eliminated proposed Sec. 245.135. Tenant
organizations can establish their own procedures within the parameters
of democratic operation.
11. 24 CFR 245.140, Protected Activities
Comment: Prior permission not required. The final rule should
include additional language that makes it clear that no prior notice to
or permission from owners and managers of a project is needed prior to
the tenant organization undertaking the activities permitted by this
section.
Response. Upon consideration of this comment, HUD agrees that a
management requirement of prior permission before conducting activities
permitted by the regulation could constitute a significant impediment
to tenants' enjoyment of the right to
[[Page 36276]]
organize and to the organization's independence, contrary to the
purpose of the underlying statute. Therefore, HUD has revised the final
rule to clarify this point. However, HUD believes that it is good
practice for tenant organizations to communicate with management about
their activities, and doing so supports a spirit of partnership in
maintaining a positive living environment.
Comment: Certain permitted tenant activities should be omitted. HUD
should remove from the list of permitted activities certain matters
under Sec. 245.140(a)(9) (Sec. 245.115(a)(9) in this final rule),
including partial payment of claims; conversion from project-based paid
utilities to tenant paid utilities; converting residential units to
non-residential use, cooperative housing, or condominiums; major
capital improvements; and prepayment of loans. Including these items in
the list may give a false impression that an owner must do what the
tenant organization recommends. These decisions are best determined by
individuals who have specialized training, not tenants.
Requiring an owner to receive tenant comments on proposed capital
improvements is unreasonable and unwarranted. Similarly, it is
inappropriate for tenants to be involved in property financing
decisions, such as prepayment of loans.
Response. The commenters' concern that the list of examples of
permitted activities may give a false impression that owners have to
comply with tenant recommendations is not supported by the text of the
rule, which only requires that owners and their agents give
``reasonable consideration'' to concerns that tenant organizations
raise. Therefore, HUD does not believe that the commenters' fears in
this regard warrant a revision of the proposed rule. Furthermore, the
list of areas on which tenant organizations may comment can affect the
living conditions of tenants. Thus, permitting tenant comment in these
areas is both reasonable and within the parameters of the underlying
statute.
Comment: Permitting leaflets will permit offensive materials.
Giving blanket protection to leaflet and post information on bulletin
boards would strip the owners of the ability to control offensive
materials, particularly in culturally diverse environments.
Response. Tenant activities, including distributing leaflets and
posting on bulletin boards, are protected by this rule insofar as they
are ``related to the establishment or operation of a tenant
organization'' (see proposed Sec. 245.140(a)). The purpose of a tenant
organization is to address matters relating to the tenants' living
environment. Activities outside of those parameters are not protected
by this rule (although there may be other general legal protections,
such as broader First Amendment rights). For this reason, HUD does not
adopt the suggestion to eliminate leaflets and posting from the tenant
organizations' permitted activities.
Comment: Additional facilities. One commenter asked whether the
rule would require the installation of additional facilities, such as a
bulletin board if the housing complex had none.
Response. The rule does not require housing complexes to add
additional facilities.
Comment: The list of permitted activities is not exhaustive. The
rule should make clear that the list of permitted activities in
proposed Sec. 245.140(a) is not exhaustive.
Response. Section 245.115(b) (proposed as Sec. 245.140(b)) makes
sufficiently clear that the list is not exhaustive.
Comment: Right of tenants to conduct door to door contact. The
right of tenants to contact other tenants door to door should not be
limited to an initial survey to solicit interest (see proposed
Sec. 245.140(a)(5)).
Response. While the list in proposed Sec. 245.140(a) does not
purport to be exhaustive, HUD agrees, for the sake of improved clarity,
to amend proposed Sec. 245.140(a)(5) as suggested (see
Sec. 245.115(a)(5) of this final rule). In accordance with the comment
below regarding use of the word ``solicit,'' HUD is substituting other
language for that term in this section as well.
Comment: Remove the term ``solicit'' from the rule. Use of the term
``solicit'' inaccurately describes the work done by tenant organizers
and will support attempts by management to prevent tenant organizers
from conducting legitimate outreach activities.
Response. HUD agrees that the term ``solicit'' has negative
connotations unrelated to tenant organizing, and will use other terms
in the final rule.
Comment: The term ``reasonable'' should be removed from proposed
Sec. 245.140(b). Section 245.140(b) provides that tenant organizations
may conduct other ``reasonable'' activities related to the
establishment or operation of a tenant organization. Owners could use
this language to attempt to intimidate tenants or tenant organizers by
claiming they are not acting ``reasonably.'' Alternatively, the rule
could alter the wording to ``activities reasonably related * * *''.
Response. ``Reasonableness'' is a common, generally understood
legal principle, which is also used in the underlying statute. The list
of activities in proposed Sec. 245.140(a) (Sec. 245.115(a) in this
final rule) provides examples of the sorts of activities that might be
considered ``reasonable.'' Since the activities of tenant organizations
do, in fact, have to be reasonable, HUD has made no changes to the rule
as a result of this comment.
Comment: Support for proposed Sec. 245.140. Proposed Sec. 245.140
should not be ``watered down.''
Response: HUD is not making any change to Sec. 245.140 that would
``water it down.''
Comment: There should be specific instructions regarding leaflets.
Placing leaflets at tenants' doors creates a potential safety hazard.
The rule should require that leaflets either be placed under doors,
attached to doors, or placed in an orderly fashion in a public
location.
Response. HUD has considered this comment, but does not believe
that a rule concerned with general policies regarding tenant
organizations is the appropriate venue for instructions on distributing
leaflets. If HUD were to provide any such guidance, it would most
likely be in the form of handbook revisions or informational brochures.
12. Section 245.145, Meeting Space
Comment: The rule should clarify that tenants have a right to meet
without representatives of owners and management. A new paragraph
should be added to this section clarifying this principle and further
stating that tenants who are not management representatives should have
the option to exclude tenants who are management representatives from
their meetings.
Response. The final rule provides that legitimate tenant
organizations are ``completely independent of owners, management, and
their representatives'' (see Sec. 245.110). In order to preserve this
independence, while organizations can certainly choose to invite
management representatives to attend specific meetings on specific
issues, as a general practice, absent such invitation, meetings should
be without the presence of management representatives or agents. This
rule makes a clarifying change to Sec. 245.115(a)(8) (redesignated from
proposed Sec. 245.140(a)(8)).
Comment: Persons with disabilities. The rule should require tenant
organizations only to make ``reasonable efforts'' to make their
meetings accessible to persons with disabilities. Under the proposed
rule, a tenant organization may be effectively
[[Page 36277]]
prohibited from holding meetings if the only reasonable place to hold a
meeting is in a project's community room and the room is inaccessible
to persons with disabilities.
Response. Under section 804(f)(3)(C) of the Fair Housing Amendments
Act of 1988, 42 U.S.C. 3604(f)(3)(C), multifamily dwellings built for
initial occupancy after March 13, 1991 are generally required to have
accessible common areas. In addition, section 504 of the Rehabilitation
Act of 1973, 29 U.S.C. 794, prohibits discrimination against disabled
individuals by recipients of federal financial assistance, which
includes housing complexes receiving HUD assistance through the Section
8 and other programs. Pursuant to these legal requirements, HUD expects
that many of the complexes at which tenant organizations have been or
will be formed under this regulation would have accessible common
areas, including meeting rooms. For those complexes which do not have
accessible common areas, because, for example, they predate the legal
requirement to have them and have not been retrofitted, HUD expects
tenant organizations and management to work together to find a solution
so that all tenants who wish to do so may participate in organizational
meetings.
Comment: Owners should not be allowed to charge fees for meeting
space. Through the charging of fees, deposits or amounts to cover
additional insurance, owners could effectively deny tenants the right
to use community rooms. As an alternative, the regulation could provide
that the costs of providing meeting space are eligible project
expenses.
Response. The proposed rule simply continues HUD's current policy
of allowing reasonable, customary and usual fees, as approved by HUD,
that owners would normally charge for the use of such facilities. Under
this approach, owners may not charge fees for tenant organizations to
use meeting space where they do not charge such fees for other uses of
the space, and they may not single out tenant groups for higher fees.
HUD believes that this approach reasonably balances the tenant
organizations' needs against the owner's costs.
The alternative suggestion of charging the fees to project costs
does not necessarily resolve the issue of owner's costs. While some
owners may be willing to waive fees altogether and use their project
accounts to defray the costs, others may not be in a financial position
to do so because of other costs of operating the project.
13. Section 245.150, Tenant Organizers
Comment: Independence from owners. The rule should make clear that
tenant organizers cannot be affiliated with current or prospective
owners or management.
Response. In order to further the intent of the rule that tenant
organizations be independent from owners and management, HUD has
revised proposed Sec. 245.150 as suggested. That section is renumbered
as Sec. 245.125 in this final rule.
Comment: Tenant organizers should be held to standards. Tenant
organizers should be held to the same standards as agents and owners.
Outside organizers should be required to disclose background
qualifications, experience and potential conflicts of interest.
The final rule should establish qualifications for non-resident
tenant organizers, who otherwise could potentially serve as agents for
outside influences with no stake in the ultimate impact on the tenant
community.
Response. HUD believes that the proposed disclosures and
requirements would overly restrict tenant organizing activity. It
should be up to the tenants themselves to assess whether to speak to
tenant organizers and make their own judgments about the organizers'
presentation and potential agenda.
Comment: Advance notification. Owners should be notified in advance
when a non-resident tenant organizer plans to visit a property, and be
permitted to have a representative monitor the organizer while he or
she conducts organizing activities.
Response. While HUD believes it is good practice for tenants to
provide information to owners regarding their organizing activities,
the intent of this regulation is to ensure that tenant organizations
are independent from owners and management. Thus, for example,
Sec. 245.115 (proposed Sec. 245.140) does not require permission from
owners to conduct organizing activities. Requiring advance notice of a
non-resident tenant organizer would make such independence more
difficult and could have the effect of impeding organizational efforts,
contrary to section 202(b)(4) of the Housing and Community Development
Amendments of 1978, 12 U.S.C. 1715z-1b. Therefore, HUD has adopted no
change to the rule as a result of this comment.
Comment: Owner's policies regarding door to door canvassing. With
respect to non-resident tenant organizers, the proposed rule
differentiates between a situation where the owner has a ``consistently
enforced'' policy against door to door canvassing, and where the owner
does not have such a policy. One comment inquires who will make the
determination of whether the owner has such a policy. A number of
comments stated that the policy should be required to be in writing to
avoid disputes.
Response. In order to avoid disputes and selective enforcement of
anti-canvassing rules, HUD has revised the proposed regulation to
require that policies be in writing, in addition to being consistently
enforced as the proposed rule stated. HUD hopes that these criteria are
sufficiently objective so as to avoid most disputes, but in the event
disputes arise the HUD field office can assist in resolving the issue.
Comment: New policies. The final rule should clarify that owners
and management may not initiate a new policy against contacting
residents door to door in response to, or to prevent tenant organizing.
Response. Under the system set forth in the rule, a policy against
door to door canvassing would not serve to prevent tenant organizing.
Rather, it would simply require non-resident tenant organizers to be
accompanied by a tenant. Furthermore, the rule requires the policy to
be both ``consistently enforced'' and ``written.'' A written policy
solely applied against tenant organizers and not other door to door
canvassers would not meet the standards of the rule for a consistently
enforced policy. Also, it is contrary to law and regulation for an
owner to impede the reasonable efforts of tenants to organize. HUD can
enforce this regulation by proceedings under 24 CFR part 24, including
Limited Denials of Participation, suspension, and debarment. Thus, HUD
believes there are sufficient protections in the rule and statute to
guard against contrived or bad faith uses of anti-canvassing policies.
Comment: There should be no restrictions on tenant organizers.
Tenants should not be required to accompany non-tenant organizers
because tenants are often not willing to take on this role because of
fears of retaliation by management.
The rule requiring that organizers be accompanied by a tenant when
canvassing door to door if management has a consistently enforced
policy against canvassing will likely lead to a proliferation of non-
solicitation policies. It will be difficult to prove if the policies
have been consistently enforced. There is a long tradition in this
country of door to door outreach of this kind in buildings that are not
subsidized by the Federal government. Supreme Court decisions have
supported the right of organizers to go door to door.
[[Page 36278]]
The final rule should provide that organizers may contact tenants
door to door if either accompanied by a resident or acting at the
request of one.
It would be preferable to omit any limitation on non-resident
tenant organizers from the rule. However, if retained, Sec. 245.150(c)
should be revised as follows:
Sec. 245.150(c)(1): ``If a multifamily project covered under
Sec. 245.10 has a consistently enforced pre-existing, written policy
against contacting residents door-to-door that is not otherwise
prohibited by law, then a non-tenant tenant organizer conducting door-
to-door contact while on any property or building of the project may do
so if either accompanied by or acting at the request of a tenant of the
property.''
Sec. 245.150(c)(2): Change the word ``solicitation'' to ``door-
to-door contact.''
Sec. 245.150(c)(3): ``Where a pre-existing, written policy
against contacting residents door-to-door does not exist as of the
date of publication of these regulations, an owner or management
agent may not initiate a new policy against contacting residents
door-to-door in response to or to prevent tenant organization
activities.''
Sec. 245.150(c)(4): ``The limitation on door-to-door contact by
non-tenant tenant organizers in paragraph (c)(1) shall not be
construed to prohibit or limit any other protected activities by
non-tenant tenant organizers enumerated in Sec. 245.140 or to
prohibit or limit the right of tenant of the covered project to
contact other residents door-to-door or otherwise assert their
rights under Sec. 245.140.''
Sec. 245.150(c)(5): ``Where a pre-existing, written policy
against contacting residents door-to-door already exists, a non-
tenant tenant organizer may conduct an initial door-to-door contact
without an invitation by a resident.''
Sec. 245.150(c)(6:) ``Non-tenant tenant organizers funded
through HUD's Outreach and Training Grant or Intermediary Technical
Assistant Grant program or through VISTA Volunteer positions
provided by the Corporation for National Service (CNS) and funded by
HUD through a contract with CNS to provide outreach and training
assistance to residents of covered projects may conduct initial or
on-going door-to-door contact with residents without an invitation
by a resident.''
Response. HUD believes that the issue of non-resident tenant
organizers requires balancing of an owner's property rights with
tenants' right to organize. There are a variety of forums by which non-
residents can contact residents, including mail or meeting them in a
public area outside the project property. In addition, HUD agrees that
in cases where management has a bona fide policy against contacting
residents door-to-door, it is reasonable to require outside organizers
to be accompanied by a tenant to ensure that at least one tenant has
invited the organizer onto the property. However, HUD also agrees that
the activities of certain grant recipients whose purpose is to provide
education and outreach to tenants concerning restructuring of
assistance under the mark-to-market program, should not be so
conditioned. HUD has therefore made a change to the proposed rule at
Sec. 245.150(c), codified in this final rule as Sec. 245.125(c).
Comment: Section 245.150(c) violates the First Amendment. This
section will have a chilling effect on tenants' rights of association,
and as such is unconstitutional under Laird v. Tatum, 408 U.S. 1, 11
(1972). Therefore, the section should be omitted entirely.
Response. The proposed regulation permitting outside organizers to
canvass on private property despite non-soliciting policies serves to
protect tenants' organizational rights as well as the property
interests of owners. HUD disagrees that this regulatory accommodation
violates the holding of Laird v. Tatum or any case law concerning First
Amendment rights that applies in this situation.
14. Section 245.155, Re-solicitation
Comment: Proposed Sec. 245.155 should be omitted from rule. The
section is not necessary, because any tenant can simply refuse to speak
to tenant organizers and choose not to attend meetings of the tenant
organization. On the other hand, the section can be used by owners to
keep tenant organizers from the property. Owners can seek out
dissenters as a means to undermine legitimate tenant organizations.
Response. HUD has considered this comment and believes that the
rule should respect the wishes of tenants, having been made aware of
their rights, not to be repeatedly solicited. Since the right not to be
re-solicited only applies to ``a tenant,'' that is, on an individual
basis, HUD does not believe management can use this section as a
mechanism to keep tenant organizers from talking to tenants who have
not asserted this right. Proposed Sec. 245.155 is renumbered as
Sec. 245.130 in this final rule.
15. Section 245.160, Additional Tenant Organizations
Comment: The rule should not allow more than one tenant
organization at a project. Allowing more than one tenant organization
could cause legal and administrative difficulties.
Allowing multiple tenant organizations would make it unclear who
speaks for the community.
From management's perspective, multiple tenant organizations would
be burdensome for management to accommodate. From the tenants'
perspective, they would be better served by a single, strong
organization that a multitude of fragmented organizations. At a
minimum, the rule should provide that a tenant organization must
represent at least 10% of all a project's residents, and not less than
five residents in any case.
Allowing multiple tenant organizations could encourage confusion
and dissension among tenants when a minority of tenants decide to form
their own organization.
Allowing additional tenant organizations would create schisms,
issue-based factions, and animosity among tenants and effectively
destroy the effectiveness of the rule, and provide no means to
establish an effective consensus among tenants in representing issues
to management.
Response. The final rule omits the proposed language explicitly
providing for multiple tenant organizations, in favor of the general
definition in Sec. 245.110. HUD believes that this general definition
supplies sufficient guidance.
Comment: Management control. The rule should not permit the
creation of a second organization under management control.
Response. HUD believes that the provision for complete independence
of the tenant organization in Sec. 245.110 adequately addresses this
concern.
Comment: Proposed section 245.160(b), replacement of leadership.
The final rule should only require owners to recognize the right of
tenants to replace their leadership if the replacement is done
according to the written procedures contained in the tenant
organizations' by-laws, that meet the standards of proposed
Sec. 245.115.
Response. HUD also received numerous comments generally on proposed
Secs. 245.110--245.135, to the effect that these sections sought to
excessively micro-manage tenant organizations, and would eliminate or
hamper many effective organizations that follow different procedures.
Therefore, HUD has decided to allow tenants to choose their
organizational procedures and structures within the general guidelines
of Sec. 245.110. For this reason, the final rule omits proposed
Sec. 245.160(b).
16. Enforcement
Comment: Final rule should expressly provide tenants with the right
to enforce the regulations. The rule will only be meaningful if it can
be enforced by
[[Page 36279]]
tenants and tenant organizations in addition to HUD. In addition to
providing by regulation tenant enforcement rights, HUD should
explicitly make the tenants third party beneficiaries of the regulatory
agreement between HUD and the owners. HUD should make tenants partners
in the enforcement of HUD requirements.
The final rule should explicitly state enforcement procedures and
penalties for violations.
The following should be added as new enforcement sections to the
final rule:
Section 245.170 Enforcement.
(a) HUD staff shall utilize the procedures prescribed in the
Management Agent Handbook 4381.5 REV-2 to identify, assess, and respond
to resident complaints regarding owner agent conduct or omissions,
including harassment of residents or resident associations who attempt
to exercise their rights, lease violations, failure to maintain HQS
requirements, or failure by the owner/agent to properly carry out its
management responsibilities.
(b) HUD field staff shall assess resident complaints regarding
harassment and owner/agent responses on these matters as part of field
Management Reviews.
(c) If the owner/agent fails to adequately respond to outstanding
resident complaints within a reasonable time period set by the HUD
field office, HUD staff shall implement sanctions against the agent
and/or owner.
(d) HUD staff shall classify the property as ``troubled'' due to
persistent, validated resident complaints of a serious nature,
including but not limited to harassment of the residents association or
individual tenants for asserting their rights.
(e) Upon publication of a final rule, HUD shall revise regulatory
agreements and contracts with owners and their agents to include the
rights of tenants to organize and assert their individual rights
explicitly in the agreements and contracts themselves, including but
not limited to the renewal of expiring project-based or Preservation
Voucher Section 8 contracts, amendments to existing regulatory
agreements (which might occur in a partial payment of claim, bond
refinancing, transfer of physical assets, or sale of the property), new
regulatory agreements, and a revision to HUD's Model Lease as published
in the Handbook 4350.3, Occupancy Standards for HUD Assisted Housing.
Section 245.180 Sanctions and Penalties.
(a) HUD shall pursue removal of the agent or appropriate civil and/
or criminal penalties as sanctions for violations of residents rights
to organize or assert their individual rights as tenants, including but
not limited to:
(1) Removal of an agent under a HUD regulatory agreement, if any;
(2) Civil penalties up to $25,000 for violations of residents'
right to organize or their individual rights as tenants;
(3) A fine of not more than $10,000, imprisonment of not more than
five years or both for knowingly and willingly falsifying, concealing,
or making any false, fictitious or fraudulent statement regarding
harassment or interference with residents asserting their right to
organize or their individual rights as tenants;
(4) Referral to the Attorney General and/or HUD's Enforcement
Center with a recommendation for civil action, including mandatory or
injunctive relief, to enjoin against owner/agent actions violating
residents' right to organize or assert their individual rights as
tenants.
(b) In cases of extended noncompliance affecting a property, or
widespread noncompliance affecting more than one property, HUD will
consider taking the following enforcement actions, without further
notice to the owner/agent:
(1) Debarment from or limited denial of participation in HUD
programs;
(2) Initiate legal action to place the property in receivership;
(3) Partially abate the project's assistance contracts;
(4) Take steps to have the property declared in default of the
mortgage and initiate foreclosure proceedings.
(c) HUD shall otherwise follow the procedures prescribed in the
Management Agent Handbook (4381.5, REV-2) in assessing these penalties.
Response. HUD agrees that it is important that tenants' rights to
organize be enforceable. HUD can enforce the provisions of this tenant
participation rule under the procedures of 24 CFR part 24, which
provides for Limited Denials of Participation (``LDP''), debarment, and
suspension in the case of such violations. These are powerful
sanctions, and HUD will use them as necessary to address interference
with tenants' right to organize. HUD has made an amendment to the rule
to clarify that this existing authority applies with respect to this
regulation.
Regarding tenant enforcement of the right to organize, HUD expects
to consider whether to require prospective changes to the model lease,
Regulatory Agreement and Use Agreement memorializing the right to
tenant participation, and making tenants third-party beneficiaries of
the Regulatory and/or Use Agreement. Such changes could strengthen the
ability of tenants to enforce their rights to organize, if necessary.
On the issues of civil money penalties and criminal sanctions,
HUD's statutes provide specific instances in which civil money
penalties are applicable. HUD does not believe it can expand those
instances to include tenant organizational rights without a statutory
change. Likewise, HUD does not have statutory authority to impose
criminal penalties such as imprisonment. However, HUD can use the
existing administrative enforcement system. Because of the availability
of the sanctions of LDP, suspension and debarment, HUD believes it
currently has sufficient enforcement authority to address violations of
this regulation.
Comment: The final rule should expressly prohibit harassment.
Because of the lack of enforcement actions by HUD, the final rule
should state that HUD will no longer tolerate harassment of tenants and
tenant organizations asserting their protected rights.
The prohibited harassment tactics listed in chapter 7 of HUD's
Management Agent Handbook should be included in the final rule, along
with the listed sanctions available.
Response. The rule states that: tenants have a right to organize
(Sec. 245.100); owners and their agents must recognize legitimate
tenant organizations and give reasonable consideration to their
concerns; and owners and their agents must allow tenants to conduct
reasonable activities related to the establishment and operation of a
tenant organization. These provisions suffice to require owners and
their agents to allow tenant organizations to function. Violations of
these regulatory provisions can be addressed through administrative
means, as set forth in new Sec. 245.135. A provision specifically on
harassment would not add significantly to these existing protections,
which apply to any interference with tenants' organizational rights.
Comment: The rule should include a list of prohibited activities.
The rule should contain the following additional section:
Section 245.170 Impediments to residents or resident associations
attempting to exercise their rights.
(a) Actions by owners/agents that constitute impediments to
resident or
[[Page 36280]]
resident associations attempting to exercise their rights include, but
are not limited to, the following:
(1) Unreasonable denial of accessible meeting space to residents;
(2) Sending management representatives (including residents who are
management employees or who receive rent concessions in exchange for
management services) to resident meeting when residents have not
invited these representatives to attend;
(3) Evicting, threatening to evict, withholding entitlements, or
otherwise penalizing tenants for organizing or asserting their rights;
(4) Attempting to adversely influence resident leaders by offering
individual inducements such as employment, preferential transfers, rent
abatements, favored repairs, or other benefits not available to all
residents in the development;
(5) Attempting to form a competing resident organization under the
control of the management company or the owner;
(6) Sexual harassment of residents by owners/agents;
(7) Interfering with or obstructing residents or non-tenant tenant
organizers from engaging in any protected activities set forth in
Sec. 245.140 of these regulations; and
(8) Engaging in any activity designed to intimidate, harass, or
retaliate against tenant or non-tenant tenant organizers exercising
their right to organize or assert their rights.
(b) Owner or management employees may not run for elected office or
serve on the board of directors of the residents organization.
(c) HUD considers any of the above action taken by owner/agents to
be a violation of residents' rights to organize and assert individual
rights.
Response. The rule as proposed contains a list exemplifying
protected activities (see Sec. 245.115(a)), and also protects other
reasonable activities related to establishing and operating a tenant
organization (see Sec. 245.115(b)). Therefore, actions that interfere
with these activities are prohibited. Additionally, some of the
suggested additions are simply beyond the scope of this rulemaking in
any case; the prohibition on sexual harassment of residents, for
example, is enforced through the Fair Housing Act, 42 U.S.C. Sec. 3601
et seq., and the regulations promulgated pursuant thereto. Therefore,
HUD makes no change to the final rule as a result of this comment.
IV. Findings and Certifications
E.O. 12866 Statement
The Office of Management and Budget (OMB) reviewed this rule under
Executive Order 12866 (entitled ``Regulatory Planning and Review'').
OMB determined that this final rule is a ``significant regulatory
action,'' as defined in section 3(f) of the Order (although not
economically significant, as provided in section 3(f)(1) of the Order).
Any changes made to the rule subsequent to its submission to OMB are
identified in the docket file, which is available for public inspection
in the office of the Rules Docket Clerk, Room 10276, U.S. Department of
Housing and Urban Development, 451 Seventh Street, SW, Washington, DC,
20410-0500.
Impact on Small Entities
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)), has reviewed this rule before publication and by
approving it certifies that this rule does not have a significant
economic impact on a substantial number of small entities. The rule,
while it requires owners and their agents to permit reasonable tenant
organizing activities, does not impose any affirmative obligation on
owners to give financial or other assistance to tenant organizations in
the conduct of these activities.
The rule would permit tenant organizations to develop responses to
economic proposals made by owners that could affect the living
environment of the tenants, such as rent increases and major capital
additions, and requires owners of give reasonable consideration to such
responses. However, it does not require owners to adopt such proposals.
Environmental Impact
In accordance with 24 CFR 50.19(c)(1) of HUD's regulations, this
rule does not direct, provide for assistance or loan and mortgage
insurance for, or otherwise govern or regulate, real property
acquisition, disposition, leasing, rehabilitation, alteration,
demolition, or new construction, or establish, revise, or provide for
standards for construction or construction materials, manufactured
housing, or occupancy. Therefore, this rule is categorically excluded
from review under the National Environmental Policy Act (42 U.S.C. 4321
et seq.).
Federalism Impact
Executive Order 13132 (entitled ``Federalism'') prohibits, to the
extent practicable and permitted by law, an agency from promulgating a
regulation that has federalism implications and either imposes
substantial direct compliance costs on State and local governments and
is not required by statute, or preempts State law, unless the relevant
requirements of section 6 of the Executive Order are met. This rule
does not have federalism implications and does not impose substantial
direct compliance costs on State and local governments or preempt State
law within the meaning of the Executive Order.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1531-1538)(UMRA) establishes requirements for Federal agencies to
assess the effects of their regulatory actions on State, local, and
tribal governments and the private sector. This final rule does not
impose any Federal mandates on any State, local, or tribal governments
or the private sector within the meaning of the UMRA.
List of Subjects in 24 CFR Part 245
Condominiums, Cooperatives, Grant programs--housing and community
development, Loan programs--housing and community development, Low and
moderate income housing, Rent subsidies, Reporting and recordkeeping
requirements, Utilities.
For the reasons stated in the preamble, HUD amends part 245 as
follows:
PART 245--TENANT PARTICIPATION IN MULTIFAMILY HOUSING PROJECTS
1. The authority citation for 24 CFR part 245 continues to read as
follows:
Authority: 12 U.S.C. 1715z-1b; 42 U.S.C. 3535(d).
Subpart A--General Provisions
Sec. 245.10 [Amended]
2. Amend 24 CFR 245.10 as follows:
a. Remove paragraph (a)(2);
b. Remove from paragraph (c) the definition of ``Section 202 Loans
for the Elderly or Handicapped BMIR Program'';
c. Redesignate paragraphs (a)(3) and (a)(4) as paragraphs (a)(2)
and (a)(3), respectively;
d. Revise redesignated paragraphs (a)(2)(ii) and (a)(3); and
e. Add paragraphs (a)(4)-(7) to read as follows:
Sec. 245.10 Applicability of part.
(a) * * *
(2) * * *
(ii) Was sold by the Secretary subject to a mortgage insured or
held by the
[[Page 36281]]
Secretary and an agreement to maintain the low- and moderate-income
character of the project;
(3) State or local housing finance agency project. The project
receives assistance under section 236 of the National Housing Act (12
U.S.C. 1715z-1) or the Rent Supplement Program administered through a
State or local housing finance agency, but does not have a mortgage
insured under the National Housing Act or held by the Secretary.
Subject to the further limitation in paragraph (b) of this section,
only the provisions of subparts A and C of this part and of subpart D
of this part for requests for approval of a conversion of a project
from project-paid utilities to tenant-paid utilities or of a reduction
in tenant utility allowances, apply to a mortgagor of such a project;
(4) The project receives project-based assistance under section 8
of the United States Housing Act of 1937 (this regulation does not
cover tenant participation in PHAs that administer such project-based
assistance);
(5) The project receives enhanced vouchers under the Low-Income
Housing Preservation and Resident Homeownership Act of 1990, the
provisions of the Emergency Low Income Housing Preservation Act of
1987, or the Multifamily Assisted Housing Reform and Affordability Act
of 1997, as amended;
(6) The project receives assistance under the Section 202 Direct
Loan program or the Section 202 Supportive Housing for the Elderly
program; or
(7) The project receives assistance under the Section 811
Supportive Housing for Persons with Disabilities program.
* * * * *
3. Subpart B is revised to read as follows:
Subpart B--Tenant Organizations
Sec.
245.100 Right of tenants to organize.
245.105 Recognition of tenant organizations.
245.110 Legitimate tenant organizations.
245.115 Protected activities.
245.120 Meeting space.
245.125 Tenant organizers.
245.130 Tenants' rights not to be re-canvassed.
245.135 Enforcement.
Subpart B--Tenant Organizations
Sec. 245.100 Right of tenants to organize.
The tenants of a multifamily housing project covered under
Sec. 245.10 have the right to establish and operate a tenant
organization for the purpose of addressing issues related to their
living environment, which includes the terms and conditions of their
tenancy as well as activities related to housing and community
development.
Sec. 245.105 Recognition of tenant organizations.
Owners of multifamily housing projects covered under Sec. 245.10,
and their agents, must:
(a) Recognize legitimate tenant organizations; and (b) Give
reasonable consideration to concerns raised by legitimate tenant
organizations.
Sec. 245.110 Legitimate tenant organizations.
A tenant organization is legitimate if it has been established by
the tenants of a multifamily housing project covered under Sec. 245.10
for the purpose described in Sec. 245.100, and meets regularly,
operates democratically, is representative of all residents in the
development, and is completely independent of owners, management, and
their representatives.
Sec. 245.115 Protected activities.
(a) Owners of multifamily housing projects covered under
Sec. 245.10, and their agents, must allow tenants and tenant organizers
to conduct the following activities related to the establishment or
operation of a tenant organization:
(1) Distributing leaflets in lobby areas;
(2) Placing leaflets at or under tenants' doors;
(3) Distributing leaflets in common areas;
(4) Initiating contact with tenants;
(5) Conducting door-to-door surveys of tenants to ascertain
interest in establishing a tenant organization and to offer information
about tenant organizations;
(6) Posting information on bulletin boards;
(7) Assisting tenants to participate in tenant organization
activities;
(8) Convening regularly scheduled tenant organization meetings in a
space on site and accessible to tenants, in a manner that is fully
independent of management representatives. In order to preserve the
independence of tenant organizations, management representatives may
not attend such meetings unless invited by the tenant organization to
specific meetings to discuss a specific issue or issues; and
(9) Formulating responses to owner's requests for:
(i) Rent increases;
(ii) Partial payment of claims;
(iii) The conversion from project-based paid utilities to tenant-
paid utilities;
(iv) A reduction in tenant utility allowances;
(v) Converting residential units to non-residential use,
cooperative housing, or condominiums;
(vi) Major capital additions; and
(vii) Prepayment of loans.
(b) In addition to the activities listed in paragraph (a) of this
section, owners of multifamily housing projects covered under
Sec. 245.10, and their agents, must allow tenants and tenant organizers
to conduct other reasonable activities related to the establishment or
operation of a tenant organization.
(c) Owners of multifamily housing projects and their agents shall
not require tenants and tenant organizers to obtain prior permission
before engaging in the activities permitted under paragraphs (a) and
(b) of this section.
Sec. 245.120 Meeting space.
(a) Owners of multifamily housing projects covered under
Sec. 245.10, and their agents, must reasonably make available the use
of any community room or other available space appropriate for meetings
that is part of the multifamily housing project when requested by:
(1) Tenants or a tenant organization and used for activities
related to the operation of the tenant organization; or
(2) Tenants seeking to establish a tenant organization or
collectively address issues related to their living environment.
(b) Tenant and tenant organization meetings must be accessible to
persons with disabilities, unless this is impractical for reasons
beyond the organization's control. If the complex has an accessible
common area or areas, it will not be impractical to make organizational
meetings accessible to persons with disabilities.
(c) Fees. An owner of a multifamily housing project covered under
Sec. 245.10 may charge a reasonable, customary and usual fee, approved
by the Secretary as may normally be imposed for the use of such
facilities in accordance with procedures prescribed by the Secretary,
for the use of meeting space. An owner may waive this fee.
Sec. 245.125 Tenant organizers.
(a) A tenant organizer is a tenant or non-tenant who assists
tenants in establishing and operating a tenant organization, and who is
not an employee or representative of current or prospective owners,
managers, or their agents.
(b) Owners of multifamily housing projects covered under
Sec. 245.10, and their agents, must allow tenant organizers to assist
tenants in
[[Page 36282]]
establishing and operating tenant organizations.
(c) Non-tenant tenant organizers. (1) If a multifamily housing
project covered under Sec. 245.10 has a consistently enforced, written
policy against canvassing, then a non-tenant tenant organizer must be
accompanied by a tenant while on the property of the multifamily
housing project, except in the case of recipients of HUD Outreach and
Assistance Training Grants (``OTAG'') or other direct HUD grants
designed to enable recipients to provide education and outreach to
tenants concerning HUD's mark-to-market program (see 24 CFR parts 401
and 402), who are conducting eligible activities as defined in the
applicable Notice of Funding Availability for the grant or other
effective grant document.
(2) If a multifamily housing project covered under Sec. 245.10 has
a written policy favoring canvassing, any non-tenant tenant organizer
must be afforded the same privileges and rights of access as other
uninvited outside parties in the normal course of operations. If the
project does not have a consistently enforced, written policy against
canvassing, the project shall be treated as if it has a policy favoring
canvassing.
Sec. 245.130 Tenants' rights not to be re-canvassed.
A tenant has the right not to be re-canvassed against his or her
wishes regarding participation in a tenant organization.
Sec. 245.135 Enforcement
(a) Owners of housing identified in Sec. 245.10, and their agents,
as well as any principals thereof (as defined in 24 CFR 24.105), who
violate any provision of this subpart so as to interfere with the
organizational and participatory rights of tenants, may be liable for
sanctions under 24 CFR part 24. Such sanctions may include:
(1) Debarment. A person who is debarred is prohibited from future
participation in Federal programs for a period of time. The specific
rules and regulations relating to debarment are found at 24 CFR part
24, subpart C.
(2) Suspension. Suspension is a temporary action with the same
effect as debarment, to be taken when there is adequate evidence that a
cause for debarment may exist and immediate action is needed to protect
the public interest. The specific rules and regulations relating to
suspension are found at 24 CFR part 24, subpart D.
(3) Limited Denial of Participation. An LDP generally excludes a
person from future participation in the Federal program under which the
cause arose. The duration of an LDP is generally up to 12 months. The
specific rules and regulations relating to LDPs are found at 24 CFR
subpart G.
(b) These sanctions may also apply to affiliates (as defined in 24
CFR part 24) of these persons or entities.
(c) The procedures in 24 CFR part 24 shall apply to actions under
this subpart.
Dated: June 1, 2000.
William C. Apgar,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 00-14217 Filed 6-2-00; 2:57 pm]
BILLING CODE 4210-33-P