How to Have Households Inform You of Long Absences
Sometimes a household will disappear for weeks at a time. No one answers the phone, their mail piles up, and their assigned parking space remains empty. When a unit is left unattended, health and safety hazards such as rotting food or frozen pipes can result.
These unexplained absences can be frustrating. But you can’t simply clean out these units and re-rent them, because returning households could sue you for illegally evicting them or disposing of their belongings. To avoid these problems, you can put lease language in place that requires households to notify you when they’ll be absent from the unit for an extended period of time. We’ll tell you why it’s to your benefit to adopt this measure and give you a Model Lease Clause: Use Clause to Implement Extended Absence/Abandonment Policy, which you can show to your site’s attorney.
4 Reasons to Know About Absences
It’s important to have measures in place to be notified about extended absences and abandonment so that you can:
Prevent households from keeping more than one residence. As a general rule, the LIHTC unit in which the adult members of the household reside must be their primary residence. As part of the LIHTC program, owners certify that all low-income units in the site are used on a non-transient basis, unless an exception applies to your site such as transitional housing for the homeless or single-room-occupancy units. This requirement prevents tax credit sites from being used for short-term housing. In addition, the LIHTC program defines “residential rental project” in the same way as it is defined for housing financed by tax-exempt bonds. That is, a residential rental project is “rented by or available to members of the general public on a continuous basis.” The continuous occupancy and non-transient basis requirements mean that for a household in an LIHTC unit that unit must be their only residence. However, it’s permissible for an LIHTC resident to own real estate including a house or rental property as an asset, provided the tenant doesn’t reside there.
Know whether unit is abandoned. When households skip out on their leases in the middle of the night, managers must prepare the abandoned units for re-renting. This may involve packing up and disposing of the property left behind. Managers generally have the right to do this, as long as they know the unit is abandoned.
Unfortunately, managers can’t always tell when a unit is abandoned. Households rarely announce that they’re abandoning their units; they just leave. Waiting in vain for a household to return can cost your site money. But prematurely treating a unit as abandoned could make you liable for a wrongful eviction and misappropriation of property if the household does return.
Having a site rule or policy on extended absences and abandonment will help you determine whether a unit is abandoned. That’s because if a household has gone away without notifying you as required and has stopped paying rent, you’ll have good reason to believe that the household has abandoned the unit.
Avoid damage to units. It’s important to know when households are absent, so you can keep tabs on their units and take action if necessary. For example, if a cold spell arrives and a pipe bursts, a break like this that goes unchecked for several days will cause significant damage. And if you suspect a unit has been abandoned, it’s important to have the right to inspect the unit for any health and safety problems.
Schedule maintenance and improvements. Another reason to stay on top of absences is that the most convenient time to get into a unit and do proactive maintenance is when households are away. If you know a household is going to be away, you can use this opportunity to arrange with them to fix any issues while they’re gone.
Require Advance Notice
The solution to the problem of unexplained household absences is to require households to tell you before they go away for extended periods of, say, 14 days or more. You can include this requirement as a lease clause. Or you can insert a provision in your site rules. Your lease clause, like ours below, should cover the following points:
Require households to notify you. Your first step in solving the problem of unexplained household absences is to require households to tell you before they go away for extended periods. Our lease clause requires households to give you written notice when they’ll be absent for 14 days or more.
Tell households you may enter the unit. If you consider a unit to be abandoned, the clause says you’ll enter the unit at times that are reasonably necessary such as for emergency inspections. During these inspections, you can check for health and safety hazards. Be sure to check your state or local law for any other actions you must take.
Define “abandonment.” If a household has gone away without notifying you, and it has stopped paying rent, you’ve got good reason to believe it has abandoned its unit. Define abandonment as a household’s absence from its unit for more than a set period of days, combined with not paying the rent; and not acknowledging or responding to your notices regarding the overdue rent.
Our Model Lease Clause defines abandonment as being in default for nonpayment of rent for more than 14 days and the household has removed a substantial portion of belongings from the unit. Be sure to check with your attorney on this definition as you must comply with your state and local laws on abandonment.
Tell households what steps you’ll take to handle and dispose of property. Your state or local law will most likely govern how long you must wait until you can dispose of a household’s property. Our lease clause says the site will consider any and all remaining personal property belonging to the household and left on the premises to be abandoned and may remove and dispose of all such personal property in accordance with applicable state and local law.
Comply with Vacant Unit Rule
If you find that a household has abandoned an LIHTC unit, be sure to keep records to comply with the vacant unit rule. Write a memo for the household's file that specifies the exact date that you deemed the unit abandoned and vacant. You should do this because the tax credit program's vacant unit rule lets you continue to claim tax credits for low-income units that are unoccupied. But it's still important to know when a unit has been vacated. That's because, although the IRS permits you to continue claiming tax credits for vacant units, you must:
- Make reasonable attempts to rent the vacant unit (or other available units of comparable or smaller size) to another qualified low-income household; and
- Not rent any other units of comparable or smaller size to nonqualified households as long as the unit is vacant.
See The Model Tools For This Article
|Use Clause to Implement Extended Absence/Abandonment Policy|