Tenant's legal capacity. The tenant must have legal capacity to enter a lease under State and local law. “Legal capacity” means that the tenant is bound by the terms of the lease and may enforce the terms of the lease against the owner.

Form of lease. (1) The tenant and the owner must enter a written lease for the unit. The lease must be executed by the owner and the tenant.

If the owner uses a standard lease form for rental to unassisted tenants in the locality or the premises, the lease must be in such standard form (plus the HUD-prescribed tenancy addendum). If the owner does not use a standard lease form for rental to unassisted tenants, the owner may use another form of lease, such as a PHA model lease (including the HUD-prescribed tenancy addendum). The HAP contract prescribed by HUD will contain the owner's certification that if the owner uses a standard lease form for rental to unassisted tenants, the lease is in such standard form.

State and local law. The PHA may review the lease to determine if the lease complies with State and local law. The PHA may decline to approve the tenancy if the PHA determines that the lease does not comply with State or local law.

Required information. The lease must specify all of the following:

The names of the owner and the tenant;

The unit rented (address, apartment number, and any other information needed to identify the contract unit);

The term of the lease (initial term and any provisions for renewal);

The amount of the monthly rent to owner; and

A specification of what utilities and appliances are to be supplied by the owner, and what utilities and appliances are to be supplied by the family.

Reasonable rent. The rent to owner must be reasonable (see § 982.507).

Tenancy addendum. (1) The HAP contract form required by HUD shall include an addendum (the “tenancy addendum”), that sets forth:

The tenancy requirements for the program (in accordance with this section and §§ 982.309 and 982.310); and

The composition of the household as approved by the PHA (family members and any PHA-approved live-in aide).

All provisions in the HUD-required tenancy addendum must be added word-for-word to the owner's standard form lease that is used by the owner for unassisted tenants. The tenant shall have the right to enforce the tenancy addendum against the owner, and the terms of the tenancy addendum shall prevail over any other provisions of the lease.

Changes in lease or rent. (1) If the tenant and the owner agree to any changes in the lease, such changes must be in writing, and the owner must immediately give the PHA a copy of such changes. The lease, including any changes, must be in accordance with the requirements of this section.

In the following cases, tenant-based assistance shall not be continued unless the PHA has approved a new tenancy in accordance with program requirements and has executed a new HAP contract with the owner:

If there are any changes in lease requirements governing tenant or owner responsibilities for utilities or appliances;

If there are any changes in lease provisions governing the term of the lease;

If the family moves to a new unit, even if the unit is in the same building or complex.

PHA approval of the tenancy, and execution of a new HAP contract, are not required for changes in the lease other than as specified in paragraph (g)(2) of this section.

The owner must notify the PHA of any changes in the amount of the rent to owner at least sixty days before any such changes go into effect, and any such changes shall be subject to rent reasonableness requirements (see § 982.503).