Oakwood Gardens Preservation, the petitioner in this proceeding (“Petitioner”), commenced this summary proceeding against Rhonda Henderson, the respondent in this proceeding (“Respondent”) seeking a money judgment and possession of 630 East Lincoln Avenue, 3P, Mount Vernon, New York (“the subject premises”) on the basis of nonpayment of rent. Petitioner, an owner of housing financed by the Department of Housing and Urban Development (HUD), commenced this nonpayment proceeding against Respondent, a recipient of a Section 8 rent subsidy, to recover rent increases which had allegedly accrued as a result of tenant’s delinquency in the recertification process. Respondent’s answer alleged that landlord had failed to complete the recertification process as required by HUD and was therefore precluded from increasing tenant’s rent. The parties seek a legal ruling regarding whether the recertifications done by Petitioner were done properly and in conformance with the rules set forth in the United States Department of Housing and Urban Development Handbook 4350.3:Occupancy Requirements of Subsidized Multifamily Housing Programs (HUD Handbook) and therefore can be relied upon to increase the Respondent’s share of the rent. The parties agree that the HUD Handbook governs the procedure for therecertification process at the subject premises. Recertification is a process whereby the tenant’s income and household composition are re-examined so that the tenant’s rent and assistance payments can be adjusted in accordance with HUD standards. Recertification either takes place annually, upon the anniversary of the effective date of the tenant’s lease, or in the interim period between regularly scheduled recertification if there is a change in either the tenant’s income or household composition. There are different notice requirements for regularly scheduled and interim adjustment recertifications. To further its regulatory scheme, HUD promulgates a handbook which sets forth procedures governing recertification that many courts have deemed binding: HUD Handbook 4350.3 REV-1 (the “Handbook;” Park Front Apartments LLC v. Peterson, 53 Misc 3d 1201(A) [Civ Ct NY County 2016]; E. Harlem Pilot Block Bldg. 1 HDFC v. Cordero, 196 Misc 2d 36, 40 [Civ Ct NY County 2003]; Lower E. Side I Assoc. LLC v. Estevez, 6 Misc 3d 632, 636 [Civ Ct NY County 2004]; Green Park Assoc. v. Inman, 121 Misc 2d 204, 205 [Civ Ct Kings County 1983], citing Thorpe, 393 US 268; Jackson Terrace Assoc. v. Rice, 142 Misc 2d 438, 440 [Dist Ct Nassau County 1988]; see Park Lane Residences, L.P. v. Boose, 26 Misc 3d 1233(A) [Dist Ct Nassau County 2010] ["Even those decisions that have not found the language mandatory rely on the provisions and give them considerable weight"]). Included among the Handbook’s procedures, with limited exceptions not present here, are recertification notices which must be provided to a tenant, including an initial notice “[u]pon initial signing of the lease,” which “must do the following” (emphasis added): a. (1) Refer to the requirements in the HUD model lease regarding the tenant’s responsibility to recertify annually. (2) Specify the cutoff date (the 10th day of the 11th month after the last annual recertification) by which the tenant must contact the owner and provide the required information and signatures necessary for the owner to process the recertification. b. The tenant must sign and date the initial notice to acknowledge receipt; the owner or manager must sign and date the notice as a witness. c. The owner must maintain the notice with original signatures in the tenant’s file and provide a copy of the signed notice to the tenant. (Handbook at Ch 7, §1, 7-7[B][1]). The Handbook also requires three recertification notices 120 days, 90 days, and 60 days prior to the recertification anniversary date which must detail the recertification process and consequences of failure to recertify (id. at Ch 7, §1, 7-7[B][2]-[4]). As noted by the Handbook’s explicit text, the notices are mandatory (see Lower E. Side I Assoc. LLC v. Estevez, 6 Misc 3d 632, 633 [Civ Ct NY County 2004] [dismissing nonpayment proceeding for petitioner's failure to comply with HUD Handbook's recertification notice requirements]; Impac Assoc. Redevelopment Co. v. Robinson, 9 Misc 3d 1065, 1067 [Civ Ct NY County 2005] [granting motion to dismiss and dismissing action without prejudice to petitioner's commencement of a new proceeding, if appropriate, after it complies with procedures in the HUD Handbook"]). The Handbook states, “It is the owner’s responsibility to process all recertifications in a timely manner” (Handbook at 7-8) and requires, among other things, that an owner give a tenant a 30-day notice prior to a rent increase (id. at 7-10), obtain the signature of all adults in a tenant’s household on a compliance form (id.), and provide the tenant with the initial notice for the next year’s annual recertification (id.). Respondent claims that the Petitioner has improperly processed recertifications for her numerous times since 2017. Respondent submits documentary evidence as exhibits showing recertifications completed twice in 2017, once in 2018 and three times in 2019. The Petitioner alleges that in 2019 the Respondent did not timely report a change in household income and thus is required to pay a higher rent for the period after which she failed to recertify and report a change in household income. Petitioner further contends that Respondent’s rent increase in 2019 was done lawfully. Petitioner does not, however, address the recertifications in 2017 and 2018. Nor does Petitioner submit proof of serving Respondent with any of the notices required in the HUD recertification process. An owner’s compliance with the Handbook’s recertification requirements is a necessary prerequisite to the completion of the recertification process (see Starrett City, Inc. v. Brownlee, 22 Misc 3d 38, 40 [App Term, 2d Dept, 2d & 11th Jud Dists 2008]; Good Neighbor Apt. Assoc. v. Rosario, NYLJ, July 9, 2008 [Civ Ct, NY County 2008]). This Court finds, and Petitioner does not dispute, that Petitioner has failed to comply with the HUD Handbook’s recertification requirements, including the requirements that Respondent receive recertification notices and 30 days’ advance notice of a rent increase. Accordingly, since Petitioner failed to implement changes in Respondent’s rent in accordance with the procedures set forth in the HUD Handbook, Petitioner is not in the circumstances presented, entitled to recover the increased rent from 2017. The parties are directed to appear in Court for a pre-trial conference on February 10, 2020 at 2:00 p.m. This constitutes the Decision and Order of this Court. Dated: January 30, 2020 Mount Vernon, New York
