The Housing Assistance Payment contract is the legal agreement between you and the Montgomery Housing Authority. Understanding its terms, obligations, and renewal process is critical for any landlord participating in the voucher program. We break down every section in plain English.
What Is a HAP Contract?
A Housing Assistance Payment (HAP) contract is the legally binding agreement between the property owner (or their management company) and the Montgomery Housing Authority (MHA). It establishes the terms under which MHA will pay a portion of the tenant’s rent directly to the landlord. Without a signed HAP contract, no housing authority payments can be made.
The contract is separate from your lease with the tenant. You have two agreements: a standard lease between you and the tenant, and a HAP contract between you and MHA. Both must be in place before the tenant moves in.
Key Terms in the HAP Contract
Contract rent: The total monthly rent approved by MHA. This is determined through a rent reasonableness analysis — the housing authority compares your property to similar non-subsidized units in the area. We prepare documentation to support the highest justifiable rate.
HAP payment: The portion MHA pays directly to you. This is the contract rent minus the tenant’s share (typically 30% of the tenant’s adjusted income). For most Montgomery Section 8 properties, MHA pays 70–90% of the total rent.
Tenant share: The amount the tenant pays you directly. This is usually $50–$300/month depending on their income. You collect this separately from the HAP payment.
Contract term: The HAP contract runs for the same period as the lease, typically 12 months, and renews annually as long as the property remains in compliance and the tenant remains eligible.
Landlord Obligations Under the HAP Contract
By signing a HAP contract, you agree to:
- Maintain the property to Housing Quality Standards (HQS) at all times
- Allow HQS inspections (initial and annual)
- Not charge the tenant more than the approved contract rent
- Not charge the tenant for any services that MHA determines should be included in the rent
- Provide reasonable notice before any changes to the property or lease terms
- Report any changes in ownership to MHA
How Payments Work
MHA deposits the HAP payment directly into your bank account (or your property manager’s account) on a monthly schedule. Payments are typically received between the 1st and 5th of each month. The tenant pays their share separately, either through your online payment portal or direct deposit.
If the tenant fails to pay their portion, you follow the same collections and eviction procedures as any other tenancy. The HAP payment from MHA continues as long as the tenant resides in the unit and the contract remains active.
Rent Increases and Contract Amendments
You can request a rent increase once per year, typically at the lease anniversary or when HUD adjusts Fair Market Rent rates. MHA reviews the request against current rent reasonableness comparables and either approves, modifies, or denies the increase. At James-Hawkins, we file increase requests annually for every managed property and prepare the supporting documentation to maximize approval rates.
What Happens If the Tenant Moves Out?
When a Section 8 tenant vacates, the HAP contract terminates. To continue receiving Section 8 tenants, you’ll need a new voucher holder to select your property, pass a new HQS inspection, and execute a new HAP contract. Our listing on AffordableHousing.com and our Tenant Turner platform help fill vacancies quickly.
How James-Hawkins Handles HAP Contracts
We manage the entire HAP contract lifecycle: initial setup, payment tracking, annual rent increase requests, compliance monitoring, and contract amendments. You never interact with the housing authority directly unless you want to. Read our complete Section 8 guide for the full picture, or schedule a free consultation to discuss how we can manage your Section 8 properties.
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