The legal implications of a LURA are that the owner/developer must abide by the restrictions placed upon the property in order to receive tax credits in the future. The LURA specifically documents the restrictions placed upon the property and typically helps guarantee that the project receives a specific number of LIHTC credits over a specific time period. Along with the basic requirement that a property meets the 40/60 test or the 20/50 test and keeps rents at these levels for at least 15-years, LURA agreements also involve an extended use period, which is often 15 years but is sometimes longer or shorter, depending on the state. It’s important to realize that if an owner sells a property and the LURA is still active, the new buyer will still have to abide by all of its rules.
For more information, please visit:
LURA: Land Use Restrictive Agreements in Commercial Real Estate
LURAs: Land Use Restrictive Agreements and the LIHTC Program