Sec. 222.
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Any entity receiving housing assistance payments shall maintain decent, safe, and sanitary conditions, as determined by the Secretary of Housing and Urban Development (in this section referred to as the Secretary ), and comply with any standards under applicable State or local laws, rules, ordinances, or regulations relating to the physical condition of any property covered under a housing assistance payment contract. The Secretary shall take action under subsection
(c)when a multifamily housing project with a section 8 contract or contract for similar project-based assistance— receives a Uniform Physical Condition Standards
(UPCS)score of 60 or less; or fails to certify in writing to the Secretary within 3 days that all Exigent Health and Safety deficiencies identified by the inspector at the project have been corrected. Such requirements shall apply to insured and noninsured projects with assistance attached to the units under section 8 of the United States Housing Act of 1937 ( 42 U.S.C. 1437f ), but do not apply to such units assisted under section 8(o)(13) ( 42 U.S.C. 1437f(o)(13) ) or to public housing units assisted with capital or operating funds under section 9 of the United States Housing Act of 1937 ( 42 U.S.C. 1437g ). Within 15 days of the issuance of the REAC inspection, the Secretary must provide the owner with a Notice of Default with a specified timetable, determined by the Secretary, for correcting all deficiencies. The Secretary must also provide a copy of the Notice of Default to the tenants, the local government, any mortgagees, and any contract administrator. If the owner's appeal results in a UPCS score of 60 or above, the Secretary may withdraw the Notice of Default. Thirty days following the issuance of a Notice of Default for failure to provide decent, safe and sanitary conditions or notice of violation of a regulatory agreement for failure to maintain a property in accordance with HUD regulations, and when a physical inspection score underlying such notices has not been successfully appealed, the project owner shall pay to residents occupying units 25 percent of the HUD contract rent for such unit each month until owner has certified to HUD that the project has been restored to decent, safe and sanitary condition. These payments cannot be made from Federal funds including housing assistance payments by HUD. Projects exempted from this provision are those under a HUD-approved corrective action plan of a third party sale. Owners shall post in the management office all notices of violation and-or default by HUD, owner’s HUD-approved corrective action plan and owners certification that the property is decent, safe and sanitary. This creates a private right of action limited to enforcing payment of 25 percent of HUD contract rent for residents of these properties. At the end of the time period for correcting all deficiencies specified in the Notice of Default, if the owner fails to fully correct such deficiencies, the Secretary may— require immediate replacement of project management with a management agent approved by the Secretary; impose civil money penalties, which shall be used solely for the purpose of supporting safe and sanitary conditions at applicable properties, as designated by the Secretary, with priority given to the tenants of the property affected by the penalty; abate the section 8 contract, including partial abatement, as determined by the Secretary, until all deficiencies have been corrected; pursue transfer of the project to an owner, approved by the Secretary under established procedures, which will be obligated to promptly make all required repairs and to accept renewal of the assistance contract as long as such renewal is offered; transfer the existing section 8 contract to another project or projects and owner or owners; pursue exclusionary sanctions, including suspensions or debarments from Federal programs; seek judicial appointment of a receiver to manage the property and cure all project deficiencies or seek a judicial order of specific performance requiring the owner to cure all project deficiencies; work with the owner, lender, or other related party to stabilize the property in an attempt to preserve the property through compliance, transfer of ownership, or an infusion of capital provided by a third-party that requires time to effectuate; or take any other regulatory or contractual remedies available as deemed necessary and appropriate by the Secretary. For purposes of this section and notwithstanding any provision of law, the amount of the civil money penalties under paragraph
(2)shall be the higher of one percent of the housing assistance payment contract budget authority for such project or the applicable civil money penalty under current law. The Secretary shall also take appropriate steps to ensure that project-based contracts remain in effect, subject to the exercise of contractual abatement remedies to assist relocation of tenants for major threats to health and safety after written notice to the affected tenants. To the extent the Secretary determines, in consultation with the tenants and the local government, that the property is not feasible for continued rental assistance payments under such section 8 or other programs, based on consideration of— the costs of rehabilitating and operating the property and all available Federal, State, and local resources, including rent adjustments under section 524 of the Multifamily Assisted Housing Reform and Affordability Act of 1997 ( MAHRAA ); and environmental conditions that cannot be remedied in a cost-effective fashion, the Secretary may contract for project-based rental assistance payments with an owner or owners of other existing housing properties, or provide other rental assistance. The Secretary shall report quarterly on all properties covered by this section that are assessed through the Real Estate Assessment Center and have UPCS physical inspection scores of less than 60 or have received an unsatisfactory management and occupancy review within the past 36 months. The report shall include— the enforcement actions being taken to address such conditions, including imposition of civil money penalties and termination of subsidies, and identify properties that have such conditions multiple times; actions that the Department of Housing and Urban Development is taking to protect tenants of such identified properties; and any administrative or legislative recommendations to further improve the living conditions at properties covered under a housing assistance payment contract. This report shall be due to the Senate and House Committees on Appropriations no later than 30 days after the enactment of this Act, and on the first business day of each Federal fiscal year quarter thereafter while this section remains in effect. For each day after the due dates herein that this report has not been submitted to such Committees, the appropriations under this title for the Executive Offices account, the Housing account, and for the Office of the Chief Financial Officer under the Administrative Support Offices account shall each be reduced by $50,000.
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