(a) Apartment assignments must conform to the following occupancy chart provided such assignment does not violate Federal, State, and local building, health, safety and fair housing laws:

It is the housing company's responsibility to verify household composition. For both new admission and transfer applications, the members of the applicant's household must be residing together and must meet the applicable household size requirements at the time of application and at the time of apartment availability. Nevertheless, when appropriately documented, a child subject to a joint custody agreement who lives with the family 50 percent or more of the time, or a child away at school, may be included in the household count.

(b) Exceptions to the minimum household size in the above schedule may be permitted in the following circumstances:

1. (1) To encourage downsizing from underutilized units, a transfer to a smaller apartment may be permitted even if the household size is less than the minimum. A housing company may create a plan, with the division's approval, to provide additional incentives for such downsizing.
2. (2) If no applicants on the waiting list meet the occupancy standard for an apartment of a particular size, despite active marketing efforts, the apartment may be offered to applicants eligible for the next smaller sized apartment in chronological order based on application date. In such cases, it will not be counted as a refusal if the applicant declines the larger apartment.