§ 401.560 Property management standards.

(a) General. Each PAE is required by section 518 of MAHRA to establish management standards consistent with industry standards and HUD guidelines. The management standards must be included or referenced in the Restructuring Plan. (b) HUD guidelines. At a minimum, the PAE's management standards must require the project management to: (1) Protect the physical integrity of the property over the long term through preventative maintenance, repair, or replacement; (2) Ensure that the building and grounds are routinely cleaned; (3) Maintain good relations with the tenants; (4) Protect the financial integrity of the project by operating the property with competitive and reasonable costs and maintaining appropriate property and liability insurance at all times; (5) Take all necessary measures to ensure the tenants' physical safety; and (6) Comply with other provisions that are required by HUD, including termination of the management agent for cause. (c) Conflicts of interest. The PAE management standards must also conform to any guidelines established by HUD, and industry standards, governing conflicts of interest between owners, managers, and contractors.