Q & A Certs

Question:  One of my tenants had a 12/1/11 AR, and I used 6 paystubs to calculate his income.  Now (in February of 2012), he’s come in asking for an AR Correction because his 2011 W2 shows less income than I used on the AR. What should I do? ~ Angie in NY

Answer: For all certs, income is a projection of what we anticipate the tenant will earn in the coming 12 months.  So using EIV along with 4-6 current, consecutive paystubs was the proper way to do the AR.  Since your tenant’s W2 covers 2011, it’s not relevant to his 12/1/11 AR.  That’s because the AR is for the 12/1/11 – 11/30/12 time period.  Tenants have an obligation to let you know when their income goes down.  And, when they do let you know, the proper procedure (after verification) is to process an Interim – not a correction to a prior cert.  So if the tenant’s income has decreased since the AR, then an IR should be done.