(a) Homeless assistance provided pursuant to paragraph (2) of subdivision (f) of Section 11450 shall be subject to restricted payments consistent with federal regulations when the county welfare department has made a determination that mismanagement exists. Instances where mismanagement exists include, but are not limited to, the following situations.
(1) Nonpayment of rent unless nonpayment is due to:
(i) A rent increase which results in the recipient’s share of the rent being over 80 percent of the maximum aid payable pursuant to Section 11450.
(ii) Domestic violence by a spouse, partner, or roommate.
(iii) Reasonable exercise of a tenant’s right to withhold rent for cause.
(2) The homeless assistance payment was not used for shelter.
(3) The recipient or applicant fails to provide verification that homeless assistance payments were used for shelter.
(b) To the extent allowed by federal law, the department is authorized to issue regulations defining additional situations when mismanagement may exist.