New York Codes, Rules and Regulations › Title 9 - EXECUTIVE DEPARTMENT › Subtitle S - Division of Housing and Community Renewal › Chapter VI - Neighborhood Park Land Acquisition Program › Subchapter B - Low-income Housing Tax Credit Program › Part 2040 - Low-income Housing Tax Credit Program › Section 2040.5 - Regulatory agreement

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
Restrictive covenant.
The division shall require the owners of projects which
						receive a credit allocation after 1989 to execute a regulatory agreement. The
						regulatory agreement must be recorded as a restrictive covenant which runs with
						the land and returned to the division after recording (prior to the issuance of
						the final credit allocation). The regulatory agreement shall be made available
						for public inspection at the rental office of the owner and referenced in all
						marketing materials and a copy, or a division approved summary thereof,
						attached to the lease of each low-income unit.
(b)
Other provisions.
The regulatory agreement shall specify, for the
						low-income portion of the building(s) that: the agreement shall be binding on
						all successors of the owner; the owner agrees to be bound by any regulations
						duly promulgated by the division or the Federal government for projects
						receiving low-income housing credits; the owner shall disclose the restricted
						rent for a dwelling unit to the prospective tenant prior to the execution of a
						lease; the owner shall secure from the tenant such information as is reasonably
						necessary to annually verify income; the owner shall address any citations for
						building code violations made by a municipality within 90 days of receipt; the
						owner shall ensure that the applicable fraction, as defined in the code, for
						the building for each taxable year in the extended use period will not be less
						than the applicable fraction specified therein; the owner shall consent to
						enforcement in any State court of the extended use requirement by any income
						eligible person; the owner shall annually submit a certification to DHCR
						stating that the building(s) is (are) owned and operated in compliance with the
						provisions of the code and any regulations promulgated thereunder, and provide
						such other information as the division may deem necessary; and the owner shall
						not retaliate against any tenant who notifies the division of alleged
						violations of the regulatory agreement. The extended use agreement shall
						include an agreement to waive any right to request a qualified contract and
						provide that the extended use period will not be subject to early termination
						pursuant to the
qualified contract provisions
as defined in
						section 42(h)(6)(F) of the code. The extended use agreement shall contain a
						provision which states that the agreement shall not be terminated if ownership
						is transferred by foreclosure or by a deed-in-lieu of foreclosure as a result
						of any action to collect debt which is owed to any entity which at any time
						after the issuance of a final credit allocation had any ownership interest in
						the project.
(c)
Request for a qualified contract.
This section only applies to projects in which the
						project owner has a regulatory agreement executed by the division which
						specifically grants the right to request a qualified contract. The owner may
						request only in writing, by certified mail to DHCR to the attention of the
						LIHTC monitoring officer, that DHCR produce a qualified contract from a buyer
						who will continue to operate the building(s) for low-income use. A request for
						a qualified contract shall be an irrevocable offer to sell during the
						applicable one-year period. If DHCR presents a qualified contract during the
						above one-year period, such qualified contract shall confer upon the buyer an
						exclusive right to purchase the project. For the purpose of determining the
						value of a qualified contract, "cash distributions from (or available for
						distribution from) the project" as set forth in the code shall include
						management incentive fees paid or due to anyone who at any time after the
						issuance of a final credit allocation had any ownership interest in the
						project. DHCR will specify the checklist of items required to be submitted as
						part of a request for a qualified contract. A nonrefundable fee, in an amount
						determined by DHCR, is due upon submission of a request for a qualified
						contract. The owner shall be required to pay for any services reasonably
						determined by DHCR to be necessary for the technical review of a request for a
						qualified contract by an accountant, appraiser or other relevant expert.
(d) All projects shall at all
					 times maintain adequate records concerning vacancies. These records should be
					 updated at least monthly and, upon DHCR's request, provided to DHCR in order to
					 maintain the State's ability to quickly respond to natural disasters and other
					 emergencies.