Use Orientation Letter to Improve New Households’ Lease Compliance

The alarming rise of the Omicron variant may have postponed your site’s return to normal operations regarding welcoming and informing new households of site rules and certain obligations imposed by the tax credit program. In pre-pandemic times, sites may have held new household orientation meetings. These individual or group sessions would’ve allowed staff to communicate clearly what’s expected of residents. And their knowing what they can expect from you will make your staff’s job much easier when it comes to day-to-day site management tasks, such as performing unit inspections, complying with tax credit and other program requirements, and maintaining the unit.

Although the IRS and HUD don’t require sites to hold household orientation meetings, HUD recommends pre-occupancy briefings as a good management practice, stating that: “Holding a meeting prior to occupancy helps an owner ensure that new tenants understand the terms of the lease. . . At the same time, information provided during tenant briefing topics gives tenants a clear understanding of the owner’s responsibilities and better enables tenants to fulfill their own responsibilities. The briefing gives the tenant an opportunity to ask questions and discuss the information being presented.”

It may be the case that in adapting to COVID-19 pandemic conditions, you’ve merely passed along a stack of documents such as a copy of the lease, house rules, and other papers and pamphlets in the hopes that the household would review these on their own initiative. These documents explain the responsibilities of households including tax credit responsibilities such as annual income recertifications if you manage a mixed-income site.

Later, when you inform households that they’re breaking certain rules or are in noncompliance with certain lease provisions, they may claim ignorance and that they were unaware of the specific lease provisions or house rules that they’ve violated because they didn’t have time to read everything you gave them.

To prevent households from claiming ignorance of basic tax credit and other lease requirements, consider giving them an orientation letter shortly after move-in. This can help them start out on the right foot by ensuring that they have a clear understanding of their obligations for adhering to lease provisions and the house rules for your site.

The letter should highlight the most important responsibilities of households who live at tax credit sites. You can also use the letter to encourage households to communicate with you about their problems with the site or their lease obligations. We’ll give you a Model Letter: Explain Basic Duties of Households, which you can use to put together an orientation letter for your site.

What Letter Should Cover

Here are some important items you should cover in your orientation letter.

Lease responsibilities. Tell households that living in a tax credit site brings certain responsibilities that may be different from those at other places they’ve lived. Remind them that these responsibilities are spelled out in the lease and house rules. Encourage them to read the lease and house rules and become familiar with them and ask them to contact you if they lose or don’t understand them. This makes it more difficult for households to later claim that they violated the lease or house rules for these reasons.

Next, give households a short list of their main responsibilities. If you manage a mixed-income site, be sure to include a reminder to households of the specific tax credit requirement of annual income recertifications. It’s important to note that the IRS requires owners to verify the student status of each low-income household annually even at 100 percent LIHTC sites that aren’t required to complete annual income recertifications.

Also, remind them in this letter that they may not permit anyone to move into the unit without your written permission. This will help ensure that they don’t give you tax credit problems later with unauthorized live-ins.

Your site may have other important household obligations beyond paying rent on time and complying with tax credit requirements, so you should feel free to make points different from the ones we’ve spelled out. However, you shouldn’t try to summarize every lease requirement and house rule. The letter isn’t a substitute for the kind of comprehensive overview sites typically present in orientation sessions.

Even if you tried to cover all a household’s major responsibilities, you would likely miss one, and households that didn’t live up to that obligation might point to the orientation letter, saying that it shows you thought violations of this kind were no big deal. And listing all responsibilities could make it easier for households to claim that they didn’t read the lease since your letter attempted to be so comprehensive.

Maintenance communications. You should ask households to alert you to any maintenance or security problems. Since you’ve just detailed household obligations, explaining that notifying you about maintenance and security problems helps you serve them better. This returns the emphasis to what the management and staff can do for them.

Communications about other problems. Ask households to let you know about any other problems that come up. For added benefit, refer specifically to problems that frequently come to your attention tardily. Also, invite residents to contact you about reasonable accommodations. This shows the site’s commitment to fair housing laws.

When ending the letter, it’s important to close on a positive note. And suggesting that you’ll get to know households better reinforces your message and encourages them to maintain open lines of communications about their problems and concerns.