Skip to Content

DEC Actions/Notice of Default

The DEC attempts to work cooperatively with non-compliant owners who received a Notice of Default. For those who refuse to follow HUD’s statutory and regulatory requirements, the DEC takes appropriate enforcement action. This can take the form of various sanctions.  In serious cases involving multifamily housing, the Department can abate owners' federal subsidy payments and, if necessary, foreclose on properties.

Enforcement action may be taken against owners with physically substandard properties, those with financial audit findings, and those owners who fail to submit annual financial statements. The DEC may pursue civil money penalties or double damages where program violations have occurred. In general, the DEC refers to the U.S. Justice Department or local US Attorney's Offices cases of civil violations of laws governing HUD programs. Criminal referrals are made to HUD's Office of the Inspector General.

Type of Actions

Civil money penalties may be pursued against property owners who violate HUD's statutes and regulations. Judicial actions may be initiated with the assistance of the Department of Justice against project owners who fail to operate their properties in compliance with HUD's requirements.

Two general types of remedies exist for judicial actions - those against the owner participant and those against the project itself.

Participant-based remedies include litigation for breach of contract, which may involve the Double Damage Statute and statutory actions like the False Claims Act. Project-based remedies may involve the appointment of a receiver, a change in management, an injunctive action, a recommendation to foreclose, and/or abatement of housing assistance payments.