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2. A PHA representative must inspect the unit(s) to be assisted to determine that the <br />work has been completed in accordance with the requirements of this Agre e- <br />ment. If the inspection discloses defects or deficiencies the inspector will report <br />them to the PHA with sufficient detail and information for purposes of this <br />section. <br />E. Acceptance. If the PHA determines from the review and inspection that all the work has <br />been completed in accordance with the requirements of this Agreement, the unit(s) must <br />be accepted. <br />F. Acceptance Where Defects or Deficiencies Reported. If the work is not acceptable, the <br />following shall apply: <br />If there are any items of delayed completion which are minor items or which are <br />incomplete because of weather conditions and in any case which do not preclude <br />or affect occupancy, and all other requirements of the Agreement have been met, <br />the unit(s) may be accepted. The Owner shall deposit in escrow with the PHA <br />funds in an amount the PHA determines to be sufficient to assure completion of <br />the delayed items, and shall execute a written agreement with the PHA (in the <br />form prescribed by the PHA) which specifies the schedule for completion of the <br />items. If the Owner fails to deposit such escrow, or to execute such written <br />agreement, or if items are not completed within the agreed time period, the PHA <br />may terminate the Agreement or Contract or exercise other rights under the <br />Agreement or Contract. <br />2. If other defects or deficiencies exist, the PHA shall determine whether and to <br />what extent the defects or deficiencies are correctable, whether the unit(s) will be <br />accepted after correction of defects or deficiencies, and the requirements and <br />procedures for such correction and acceptance. Furthermore, the PHA shall <br />determine whether lower initial Contract Rents shall be established, and whether <br />the term of the Contract shall be reduced. The Owner shall be notified of the <br />PHA's decision. <br />G. Notification of Nonacceptance. If the PHA determines that, based on the review of the <br />evidence of completion and inspection, any unit is not accepted, the Owner shall be <br />promptly notified of this decision and the reasons. <br />H. Completion in Stages. Where completion in stages is provided for, the procedures of this <br />section shall apply to each stage. <br />Page 8 of 15 form HUD - 52531 -A (4/90) <br />ref. Handbook 7420.8 <br />