I 

116TH CONGRESS 

1ST SESSION H. R. 3745 

To provide physical standards and reform the inspection process for housing 

assisted under section 8 of the United States Housing Act of 1937, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 12, 2019 

Mr. LAWSON of Florida (for himself, Ms. ADAMS, Ms. VELA ́ZQUEZ, Mr. CRIST, 

Mr. BISHOP of Georgia, Mr. RASKIN, Ms. NORTON, Mr. MCGOVERN, Ms. 

PRESSLEY, Ms. LEE of California, Mrs. CAROLYN B. MALONEY of New 

York, Ms. GARCIA of Texas, Ms. ROYBAL-ALLARD, Mrs. DEMINGS, Mr. 

VARGAS, and Mr. LYNCH) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To provide physical standards and reform the inspection 

process for housing assisted under section 8 of the 

United States Housing Act of 1937, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘HUD Inspection Over5 sight Act of 2019’’. 


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1 SEC. 2. ENFORCEMENT OF PHYSICAL CONDITION STAND2 ARDS AND TENANT PROTECTION. 

3 Section 8(c) of the United States Housing Act of 

4 1937 (42 U.S.C. 1437f(c)) is amended by adding at the 

5 end the following: 

6 ‘‘(9) MAINTENANCE OF PROPERTY.—Any entity 

7 receiving housing assistance payments with respect 

8 to dwelling units covered by a housing assistance 

9 payments contract shall— 

10 ‘‘(A) maintain decent, safe, and sanitary 

11 conditions at those dwelling units, as deter12 mined by the Secretary; and 

13 ‘‘(B) comply with any standards under ap14 plicable State or local laws, rules, ordinances, or 

15 regulations relating to the physical condition of 

16 those dwelling units. 

17 ‘‘(10) ENFORCEMENT OF PHYSICAL CONDITION

18 STANDARDS.— 

19 ‘‘(A) IN GENERAL.—The Secretary shall 

20 take action under subparagraph (C) against an 

21 entity with a housing assistance payments con22 tract for project-based assistance with respect 

23 to a multifamily housing project if— 

24 ‘‘(i) the project receives an inspection 

25 score of not more than 60; or 


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1 ‘‘(ii) the entity fails to certify in writ2 ing to the Secretary within 3 days of re3 ceiving the score under clause (i) that all 

4 exigent health and safety deficiencies iden5 tified by the inspector at the project have 

6 been corrected. 

7 ‘‘(B) APPLICABILITY.—Subparagraph (A) 

8 shall— 

9 ‘‘(i) apply with respect to insured and 

10 noninsured projects with dwelling units re11 ceiving assistance under this section other 

12 than under subsection (o)(13); and 

13 ‘‘(ii) not apply to dwelling units re14 ceiving assistance with capital or operating 

15 funds under section 9. 

16 ‘‘(C) NOTIFICATION AND ENFORCE17 MENT.— 

18 ‘‘(i) IN GENERAL.—If an entity vio19 lates clause (i) or (ii) of subparagraph (A), 

20 within 15 days after the results of the in21 spection the Secretary shall issue the enti22 ty a Notice of Default, which shall provide 

23 for a reasonable period to cure all project 

24 deficiencies and for the entity to provide 


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1 any response determined appropriate by 

2 the Secretary. 

3 ‘‘(ii) PLAN AND NOTICE OF DE4 FAULT.—If violations remain at a project 

5 after the expiration of the cure period pre6 scribed by the Secretary in the Notice of 

7 Default pursuant to clause (i), the Sec8 retary shall— 

9 ‘‘(I) develop a remediation plan, 

10 separate from the Notice of Default, 

11 and in consultation with tenants or le12 gitimate tenant organizations, or both, 

13 not later than 45 days after the expi14 ration of the cure period prescribed by 

15 the Secretary in the Notice of Default, 

16 to bring the project into compliance; 

17 ‘‘(II) provide the owner with the 

18 remediation plan with a specified 

19 timetable, determined by the Sec20 retary, for correcting all project defi21 ciencies, and 

22 ‘‘(III) provide the tenants of the 

23 property, legitimate tenant organiza24 tions, the local government, any mort25 gagees, and any contract adminisVerDate Sep 11 2014 02:46 Jul 26, 2019 Jkt 034408 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3745.IH H3745

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1 trator of the project with the Notice 

2 of Default and the remediation plan 

3 with the specified timetable, deter4 mined by the Secretary, for correcting 

5 all deficiencies. 

6 ‘‘(iii) WITHDRAWAL OF NOTICE OF

7 DEFAULT.—If an appeal submitted by the 

8 entity results in an inspection score of not 

9 less than 60, the Secretary may withdraw 

10 a Notice of Default issued under clause 

11 (ii)(II). 

12 ‘‘(iv) PENALTIES.—If, at the end of 

13 the timetable described in clause (ii)(II), 

14 the entity fails to fully correct all defi15 ciencies in the project, the Secretary shall 

16 take one or more of the following actions, 

17 and provide additional notice of those ac18 tions to the owner, the tenants of the prop19 erty, legitimate tenant organizations, the 

20 local government, any mortgagees, and any 

21 contract administrator: 

22 ‘‘(I) Require immediate replace23 ment of project management with a 

24 management agent approved by the 

25 Secretary. 


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1 ‘‘(II) Impose civil money pen2 alties, which shall be used solely for 

3 the purpose of supporting safe and 

4 sanitary conditions at the property, as 

5 designated by the Secretary, with pri6 ority given to the tenants of the prop7 erty affected by the penalty. 

8 ‘‘(III) Abate the housing assist9 ance payments contract under this 

10 section, including partial abatement, 

11 as determined by the Secretary, until 

12 all deficiencies have been corrected. 

13 ‘‘(IV) Pursue transfer of the 

14 project to an owner, approved by the 

15 Secretary under established proce16 dures, which will be obligated to 

17 promptly make all required repairs 

18 and to accept renewal of the housing 

19 assistance payments contract as long 

20 as such renewal is offered. 

21 ‘‘(V) Transfer the existing hous22 ing assistance payments contract 

23 under this section to another project 

24 or projects and owner or owners. 


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1 ‘‘(VI) Pursue exclusionary sanc2 tions, including suspensions or 

3 debarments from Federal programs. 

4 ‘‘(VII) Seek judicial appointment 

5 of a receiver to manage the property 

6 and cure all project deficiencies or 

7 seek a judicial order of specific per8 formance requiring the owner to cure 

9 all project deficiencies. 

10 ‘‘(VIII) Work with the owner, 

11 lender, or other related party to sta12 bilize the property in an attempt to 

13 preserve the property through compli14 ance, transfer of ownership, or an in15 fusion of capital provided by a third16 party that requires time to effectuate. 

17 ‘‘(IX) Take any other regulatory 

18 or contractual remedies available as 

19 deemed necessary and appropriate by 

20 the Secretary. 

21 ‘‘(D) CONTRACTS.— 

22 ‘‘(i) IN GENERAL.—The Secretary 

23 shall take appropriate steps to ensure that 

24 project-based contracts remain in effect, 

25 subject to the exercise of contractual 


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1 abatement remedies to assist relocation of 

2 tenants for major threats to health and 

3 safety after written notice to and informed 

4 consent of the affected tenants and use of 

5 other remedies under this paragraph. 

6 ‘‘(ii) OTHER ASSISTANCE.—To the ex7 tent the Secretary determines, in consulta8 tion with the tenants, legitimate tenant or9 ganizations, and the local government, that 

10 a property is not feasible for continued 

11 rental assistance payments under this sec12 tion or other housing programs, based on 

13 consideration of the costs of rehabilitating 

14 and operating the property and all avail15 able Federal, State, and local resources, in16 cluding rent adjustments under section 

17 524 of the Multifamily Assisted Housing 

18 Reform and Affordability Act of 1997 (42 

19 U.S.C. 1437f note) and environmental con20 ditions that cannot be remedied in a cost21 effective fashion, the Secretary may, in 

22 consultation with the tenants of the prop23 erty and any legitimate tenant organiza24 tions, contract for project-based rental as25 sistance payments with an owner or owners 


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1 of other existing housing properties, or 

2 provide other rental assistance. 

3 ‘‘(E) REPORT.— 

4 ‘‘(i) IN GENERAL.—The Secretary 

5 shall, on a quarterly basis, issue a publicly 

6 available report on all properties covered 

7 by this paragraph that— 

8 ‘‘(I) are assessed through the 

9 Real Estate Assessment Center; and 

10 ‘‘(II)(aa) have an inspection 

11 score of less than 60; or 

12 ‘‘(bb) received an unsatisfactory 

13 management and occupancy review 

14 during the 36-month period preceding 

15 the report. 

16 ‘‘(ii) CONTENTS.—Each report issued 

17 under clause (i) shall include specific infor18 mation, disaggregated by the property to 

19 which it relates, regarding— 

20 ‘‘(I) the enforcement actions 

21 being taken to address the physical 

22 conditions of the properties covered in 

23 the report, including imposition of 

24 civil money penalties and termination 

25 of subsidies, and identify properties 


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1 that have those conditions multiple 

2 times; 

3 ‘‘(II) actions that the Depart4 ment of Housing and Urban Develop5 ment is taking to protect tenants of 

6 those properties; and 

7 ‘‘(III) any administrative or leg8 islative recommendations to further 

9 improve the living conditions at each 

10 property covered under a housing as11 sistance payments contract. 

12 ‘‘(11) TENANT PROTECTION.— 

13 ‘‘(A) IN GENERAL.—The Secretary may 

14 provide tenant-based assistance for dwelling 

15 units covered under a project-based assistance 

16 subsidy contract if— 

17 ‘‘(i) the owner of the dwelling units 

18 has received a Notice of Default; and 

19 ‘‘(ii) the dwelling units pose an immi20 nent health and safety risk to the tenants 

21 of those dwelling units. 

22 ‘‘(B) REIMBURSEMENTS.—To the extent 

23 that the Secretary determines that dwelling 

24 units described in subparagraph (A) are not 

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1 ments or transfer of the project-based assist2 ance subsidy contract associated with those 

3 dwelling units to another project or projects 

4 and owner or owners, any remaining amounts 

5 associated with those dwelling units shall be re6 captured and used to reimburse amounts used 

7 for tenant-based assistance under subparagraph 

8 (A).’’. 

9 SEC. 3. STANDARDS FOR PHYSICAL CONDITION AND MAN10 AGEMENT OF HOUSING RECEIVING ASSIST11 ANCE PAYMENTS. 

12 Section 8 of the United States Housing Act of 1937 

13 (42 U.S.C. 1437f) is amended by inserting after sub14 section (v) the following: 

15 ‘‘(w) STANDARDS FOR PHYSICAL CONDITION AND

16 MANAGEMENT OF HOUSING RECEIVING ASSISTANCE PAY17 MENTS.— 

18 ‘‘(1) STANDARDS FOR PHYSICAL CONDITION

19 AND MANAGEMENT OF HOUSING.—Any entity receiv20 ing assistance payments under this section shall 

21 maintain decent, safe, and sanitary conditions, as 

22 determined by the Secretary, for any structure cov23 ered under a housing assistance payment contract. 

24 ‘‘(2) SURVEY OF TENANTS.— 


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1 ‘‘(A) IN GENERAL.—The Secretary shall, 

2 on a semiannual basis, conduct a survey of the 

3 tenants of each structure covered under a hous4 ing assistance payment contract for the purpose 

5 of identifying consistent or persistent problems 

6 with the physical condition of the structure or 

7 performance of the manager of the structure. 

8 ‘‘(B) CONFIDENTIALITY.—The Secretary 

9 shall ensure that the surveys pursuant to sub10 paragraph (A) are conducted in an anonymous 

11 manner such that the identities of tenants iden12 tifying such problems through such survey are 

13 not disclosed. 

14 ‘‘(3) REMEDIATION.—If a consistent or per15 sistent problem with the structure or the manage16 ment of the structure covered under a housing as17 sistance payment contract is identified— 

18 ‘‘(A) by the Secretary pursuant a survey 

19 conducted under paragraph (2), the Secretary 

20 shall undertake remediation for the structure or 

21 manager; or 

22 ‘‘(B) by the Performance-Based Contract 

23 Administrator based on any other observation 

24 made by the Administrator during the normal 

25 course of business, the Administrator shall refer 


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1 the structure or manager to the Secretary for 

2 remediation. 

3 ‘‘(4) PENALTY FOR FAILURE TO UPHOLD

4 STANDARDS.— 

5 ‘‘(A) IN GENERAL.—The Secretary may 

6 impose a penalty on any owner of a structure 

7 covered under a housing assistance payment 

8 contract if the Secretary finds that the struc9 ture or manager of the structure— 

10 ‘‘(i) did not satisfactorily meet the re11 quirements under paragraph (1); or 

12 ‘‘(ii) is repeatedly referred to the Sec13 retary for remediation by a Performance14 Based Contract Administrator through the 

15 process established under paragraph (3). 

16 ‘‘(B) AMOUNT.—A penalty imposed under 

17 subparagraph (A) shall be in an amount equal 

18 to not less than 1 percent of the annual budget 

19 authority the owner is allocated under a hous20 ing assistance payment contract. 

21 ‘‘(C) USE OF AMOUNTS.—Any amounts 

22 collected under this paragraph shall be used 

23 solely for the purpose of supporting safe and 

24 sanitary conditions at applicable structures or 

25 for tenant relocation, as designated by the SecVerDate Sep 11 2014 02:46 Jul 26, 2019 Jkt 034408 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H3745.IH H3745

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1 retary, with priority given to the tenants of the 

2 structure that led to the penalty. 

3 ‘‘(5) APPLICABILITY.—This subsection shall not 

4 apply to any property assisted under subsection 

5 (o).’’. 

Æ 


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