Section 401.550 - Monitoring and compliance agreements(a)Compliance agreements. The PAE must ensure long-term compliance by the owner with MAHRA, this part, and the Restructuring Plan. As part of this responsibility, the PAE must require each owner with an approved Restructuring Plan to execute and record a Use Agreement that satisfies the requirements of § 401.408 . All provisions of this subpart apply as long as the Use Agreement is in effect.(b)Periodic monitoring and inspection. At least once a year, a PAE must review the status of each project for which it developed an executed restructuring Plan. Monitoring must include on-site inspections. HUD will accept an inspection by a PAE that complies with subpart G of part 5 of this title in lieu of an inspection required by any other party under that subpart.(c)HUD acting instead of PAE. HUD will perform, or contract with other parties to perform, the PAE's functions under this section if:(1) The project is subject to a PRA with a PAE that is not qualified to be a section 8 contract administrator; or(2) The project is not currently subject to a PRA.(d)Regulatory agreement. As long as the Secretary is the holder of a second mortgage or an additional mortgage under § 401.461 , HUD will regulate the operations of the mortgagor through a regulatory agreement providing terms, conditions, and standards established by HUD, which may be in addition to any regulatory agreement otherwise required in connection with mortgage insurance programs. The regulatory agreement must contain remedies for breach, including monetary damages in the event of non-compliance.65 FR 15485, Mar. 22, 2000, as amended at 65 FR 53901, Sept. 6, 2000