Phil Querin Q&A: 80/20 Rule and 55 & Older Housing

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Phil Querin

Question.  We have just begun managing a 55+ community. However, we are confused about the 80/20 rules and the possibility of losing our 55+ status. What is a safe margin for occupancy limits?  And if our community percentage is 85%, are we required to rent the 15% remainder to families with children?  



Answer:  You must have at least one person who is 55 years of age or older living in at least 80% of its occupied units. This 80/20 rule is critical.  Generally, communities strive to be over 80%, since falling below 80% occupancy[even upon death of a qualifying 55+ resident]means immediatedisqualification.  Does this mean that your 15% safety margin must be reserved for families with children? The answer is “No.”  In fact, a 55+ community should strive for 100% occupancy by persons age 55 or over.  Does it mean that community management must accept otherwise qualified age 55+ applicants when the second or subsequent person occupant is 18 years of age? Again, the answer is “No.”  If desired, a 55+ community may impose a minimum age requirement for the second or subsequent occupant to 25 years, 30 years, or even 55+ years.   


However, it is also important for you to publish and adhere to policies and procedures that demonstrate an intent to operate as a 55+ community. This requirement is fairly self-explanatory; i.e. you should make sure that in all advertising, rules, rental agreements, and  policies, you alwayshold the community out as a 55+ facility.  


Lastly, you must comply with HUD’s age verification of occupancy procedures to substantiate compliance with the requirement that at least 80% of the community is intended to be occupied by at least one person age 55 or over.The law provides that the followingdocuments are considered reliable for such verification: (1) Driver’s license; (2) Birth certificate; (3) Passport; (4) Immigration card; (5) Military identification; (6) Any other state, local, national, or international official documents containing a birth date of comparable reliability or; (7) A certification in a lease, application, affidavit, or other document signed by an adult member of the household asserting that at least one person in the unit is 55 years of age or older.  

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