Guidance for Owner/Agents on Special Claims Processing Changes Effective August 1, 2006 The new Special Claims Processing Guide has been approved by OMB and is effective August 1, 2006. Below is a list of changes affecting processing of special claims. Please read these carefully before submitting your special claims to CGI for processing. NOTE: If monies for damages have been reimbursed from Residual Receipts or Insurance coverage, they are ineligible for special claims reimbursement. General Changes for ALL types of Special Claims: Tenants Failing to Meet Obligations: Owners MAY submit a special claim on a unit where tenancy was terminated if the subsidy was terminated prior to move out because the tenant failed to comply with his or her responsibilities to fulfill program requirements, such as: Failure to provide needed info Failure to provide SSN Failure to sign consent forms Failure to sign HUD 50059 Failure or inability to establish citizenship/immigration status Failure to move into a different size unit within 30 days of notification to do so. Tenants Moving to Market Rent: OWNERS MAY NOT SUBMIT a special claim if the termination of tenancy was based on taking the tenant to Market because the tenant no longer qualifies for assistance OR for the period of occupancy by a police officer or security personnel. Unit Transfers: In partially assisted projects, if a tenant moves out and the assistance is immediately given to another tenant in another unit, the owner is NOT ENTITLED to a special claim for VACANCY LOSS. (He is still entitled to Damage claims). Example: S8/236 property. Jones in Unit 26 moves out on July 26. The owner gives the S8 assistance to the tenant in Unit 30, effective July 27. The owner is NOT entitled to receive a vacancy claim for Unit 26. Unit NOT Leased from the Waiting List: If the unit is not leased from the waiting list (for example, the property has no waiting list); CA must review documentation of advertising or invoices for advertising expenses that support that marketing was undertaken. This documentation must substantiate the date the marketing occurred. If the waiting list is CLOSED, review of the owner/agent’s marketing and outreach methods is not needed. Not Providing an Itemized List of Damages: If an owner fails to provide the tenant with an itemized list of damages, the claim will be DENIED. Useful Life Expectancy of Items Damaged: The owner determines the useful life expectancy of items damaged. For example: carpet. The amount approved must be pro-rated given the expected life of the carpet. For Damage Claims: Different types of properties have different maximum allowable Damage Claim amounts. These are as follows: For Section 8, damage amounts may not exceed the monthly contract rent in effect when the tenant vacated the unit For LMSA, the total claim limit is the security deposit and the remainder of one month’s contract rent. For PD, the limit is two month’s rent minus the security deposit collected. Other Important Issues: Verify that the attached checklist is included with every special claims submission and that all documents have been signed. If preparing a re-submission of an incomplete claim or an appeal, owner/agent must ensure that CGI receives your submission within 30 days of the date of CGI’s determination letter. Must supply documentation that the appropriate security deposit was collected from the tenant: for example, a copy of the original lease, a copy of the tenant’s rent ledger card, or a copy of the receipt(s) for security deposit. Approved claims MUST be submitted for payment within 90 days of the date of the approval decision. Checklist Special Claim for Vacancies during Rent-Up Property Name: _________________ Contract No. _________________ Attach the following items to the claim submission 1. _________ Completed form HUD-52670-A, Part 2 2. _________ Completed form HUD-52671-B. 3. _________ A list of all units leased and available for lease as of the effective date of the Permission to Occupy (form HUD-92485 signed by the HUD Architect or Engineer) or the effective date of the contract, whichever is later. Also include justification for all un-leased units explaining why they remain vacant. 4. _________ Evidence that marketing began not less than 90 days prior to initial occupancy, including copies of advertisements, or invoices for advertising expenses substantiating the date marketing began and a copy of the waiting list. 5. _________ Waiting-list documentation. Documentation should include the outcome of applicant contacts, (i.e. date applicant was contacted, response of applicant and the status of applicant’s move-in). 6. _________ Copies of letters to rejected applicants demonstrating rejection for good cause. Checklist Special Claim for Regular Vacancies Project Name: ______________________________________ Contract Number: ______________________________________ Unit Number _______________________________________ Attach the following items to the claim submission: 1. ________ Completed form HUD-52670-A Part 2. 2. ________ Completed form HUD-52671-C. 3. ________ A copy of the signed form HUD-50059 completed at move-in for the former tenant which shows the amount of the security deposit required. 4. ________ Documentation that the appropriate security deposit was collected from the tenant: for example, a copy of the original lease, a copy of the tenant’s ledger card, or a copy of the receipt(s) for security deposit. 5. ________ A copy of the security deposit disposition notice provided to the tenant which indicates the move-out date, amount of security deposit collected, amount of security deposit returned and any charges withheld from the deposit for unpaid rent, tenant damages or other charges due under the lease. 6. ________ Documentation that verifies the date the unit was ready for occupancy. 7. ________ Copy of the waiting list from which the tenant was selected (i.e. unit transfer waiting list, one-bedroom waiting list, etc.) 8. ________ If the unit was not filled from the waiting list(s), documentation of marketing efforts must be included such as copies of advertising or invoices for advertising expenses that substantiate the date marketing occurred in accordance with the AFHMP. Checklist Special Claim for Debt Service Claims Project Name: ______________________________________ Contract Number: ______________________________________ Unit Number: ______________________________________ Attach the following items to the claim submission 1. _______ Completed form HUD 52670-A, Part 2. 2. _______ Completed form HUD-52671-D. 3. _______ Un-audited financial statements covering a six-month period for which claims are made. Written narrative detailing the following items: 4. _______ Causes of vacancies. 5. _______ Causes for financial problems. 6. _______ Actions being taken to correct the financial condition and to prevent recurrence. 7. _______ Sources of funds and time frames for paying off delinquent mortgage and excessive accounts. 8. _______ Efforts to market the vacant units if applicable. Checklist Special Claims for Unpaid Rent/Damages 1. Project Name: ______________________________________ 2. Contract Number:______________________________________ 3. Unit Number: __________________ Attach the following required items to the claim submission: A. For all claim submissions: 1. ________ Completed form HUD-52670-A, Part 2. 2. ________ Completed form HUD-52671-A. B. If claim is for both unpaid rent and other charges and tenant damages are for the same unit and tenant, the claim for tenant damages must be calculated on the same form HUD-52671-A and filed as one claim. C. Unpaid rent and other charges: 1. _________ Documentation, such as a copy of the original lease or a copy of a security deposit receipt indicating the amount of the security deposit collected the tenant. 2. _________ A copy of the signed form HUD-50059 completed at move-in 3. _________ A certified letter sent to the tenant detailing the unpaid rent and other charges, the disposition of the security deposit, demanding payment, and advising the tenant that failure to pay the sums due will result in the owner/agent hiring a collection agency to collect the debt. 4. ________ Documentation that the matter was turned over to a collection agency and that collection agency attempted to collect the debt. 5. ________ Documentation for other charges that were due under the lease that demonstrates the charges were approved by HUD. D. Tenant damages: In addition to documentation for unpaid rent and other charges: 1. ________ Copies of the signed and dated move-in and move-out inspection reports. 2. ________ Itemized list of damages. 3. ________ Breakdown of costs to repair the damages, which may include invoices, receipts, copies of work orders or maintenance records supporting dates work was completed. 4. ________ A copy of the security deposit disposition notice provided to the tenant. 5. _________ The owner/agent must certify the submitted claim is not the result of normal wear and tear or routine maintenance.