1.  Scrivener's Error in Management Certification (4/13/15)

1.  I’m working on a request for a change of Management Agent for a project.  The Management Agreement must include the provisions of Section H of the Management Certification (HUD-9839-ORCF).  Section H.4 of the Management Certification states the following:

“If the Management Agreement is terminated the Agent will immediately, not later than ten (10) calendar days from the effective date of the termination, give to the Borrower (or Operator, if applicable) all of the real and personal property in the Agent’s possession or control, including without limitation any of the Project’s cash, trust accounts, investments, books and/or records.” (Emphasis added).

Section 8.7(A)(3)(e) of the Section 232 Handbook only requires the Management Agent to turn over to the Borrower “all of the project’s cash trust accounts, investments and records” in the event the Management Agreement is terminated.  Is it permissible for the Borrower to modify the language from Section H.4 of the Management Certification to clarify that the Management Agent must only deliver all of the project’s real and personal property in the Agent’s possession or control after termination of the Management Agreement?

Additionally, Section 8.7(A)(3)(e) of the Section 232 Handbook requires the Management Agent to turn over the project’s cash trust accounts, investments and records to the Borrower no later than 30 days after the termination of the Management Agreement.  However, the required language in Section H.4 of the Management Certification requires the Management Agreement to turn over the same to Borrower no later than 10 days after the termination of the Management Agreement.  Should the Management Agreement include the 10 day or 30 day requirement?

Section H.4 of the Management Certification should be changed as follows: 

“If the Management Agreement is terminated the Agent will immediately, not later than ten (10) thirty (30) calendar days from the effective date of the termination, give to the Borrower (or Operator, if applicable) all of the Project’s real and personal property in the Agent’s possession or control, including without limitation any of the Project’s cash, trust accounts, investments, books and/or records.”

A corrected version of the document will be posted on hudclips shortly.  In the meantime, please make the change manually.