Cal. Code Regs. Tit. 4, § 5220 - Regulatory Compliance
(a)
All QRRP allocation recipients are required to execute a Bond Regulatory
Agreement (the "Regulatory Agreement"), as a condition to the Committee's
making an allocation, which will be recorded against the property for which the
allocation is used, and will reflect all commitments outlined in exhibit A of
the Committee's resolution. For projects submitted to CDLAC after December 31,
2016, the Regulatory Agreement shall terminate prior to the end of the CDLAC
Resolution affordability term only in the event of (i) involuntary
noncompliance with the provisions of the Regulatory Agreement caused by fire or
other casualty, seizure, requisition, change in a federal law or an action of a
federal agency after the bond issuance which prevents the Issuer, Fiscal Agent
and/or the Trustee (as applicable) from enforcing such provisions, or (ii)
foreclosure, exercise of power of sale, and/or transfer of title by deed in
lieu of foreclosure in connection with a deed of trust directly or indirectly
securing the repayment of Standard Permanent Bonds, or repayment of a non-Bond
related obligation that provides permanent project financing and meets the
requirements of section
5193 or condemnation or a similar
event, but only if, in the case of the events described in either clause (i) or
(ii) above, the bonds are redeemed within a reasonable period or the proceeds
for the event are used to provide a project that meets the requirement of the
Regulatory Agreement.
(b) If Cash
Flow Permanent Bonds finance project costs in projects submitted to CDLAC after
December 31, 2016, all units identified in the CDLAC resolution, including both
the Federally Bond-Restricted Units and the Other Restricted Units, will be
incorporated into the Bond Regulatory Agreement. Assumptions to be included in
the Bond Regulatory Agreement regarding the Other Restricted Units will include
the AMI as outlined in the CDLAC resolution, a limitation that tenants pay no
more than 30% of their income, and 1.5 person per bedroom occupancy standard to
determine the applicable rent.
(c)
For projects receiving allocation after December 31, 2016, The Bond Regulatory
Agreement will:
(1) Incorporate the CDLAC
resolution by reference and as an attachment;
(2) Have a term consistent with the income
and rental restrictions established in the Resolution. The Bond Regulatory
Agreement shall terminate in 55 years (50 years for Projects located on Native
American Lands) from the date 50% occupancy is achieved or the commencement of
the CDLAC Qualified project period, whichever date is earlier;
(3) Include all applicable income and
affordability requirements outlined in
26 U.S.C. §
142, Cal. H&S Code §
34312.3 (c)(1)
& (2), Cal. H&S Code §
51335(a), and Cal.
H&S Code §
52080
(a)(1);
(4) Clarify that compliance with items not
contained within the body of the Bond Regulatory Agreement but referred to in
the CDLAC resolution are the responsibility of the Sponsor to report to the
Issuer;
(5) Designate CDLAC to
receive notice of changes in ownership, Issuer, project name and management
company; and
(6) Designate CDLAC to
receive all notices regarding defaults associated with the rents and income
requirements, Bond Default, Qualified Bond Default, and regulatory
termination.
(d) Where a
Project is receiving renewable project-based rental assistance or operating
subsidy:
(1) the Sponsor shall in good faith
apply for and accept all available renewals; and
(2) if the project-based rental assistance or
operating subsidy is terminated through no fault of the owner, the property
owner shall immediately notify CDLAC in writing and shall make every effort to
find alternative subsidies or financing structures that would maintain the
deeper income targeting contained in the CDLAC resolution. Upon documenting to
CDLAC's satisfaction unsuccessful efforts to identify and obtain alternative
resources, the owner may increase rents and income targeting for rent
restricted units above the levels allowed by the CDLAC resolution up to the
federally and state-permitted maximums. Rents shall be raised only to the
extent required for financial feasibility, as determined by CDLAC. Where
possible, remedies shall include skewing rents higher on portions of the
project in order to preserve affordability for units regulated by CDLAC at
extremely low income targeting. Any necessary rent increases shall be phased in
as gradually as possible, consistent with maintaining the project's financial
feasibility. If housing special needs populations, the property owner shall
attempt to minimize disruption to existing households, and transition to
non-special needs households only as necessary and upon vacancy whenever
possible.
Notes
2. New article 6 (section 5220) and section refiled 1-6-2011 as an emergency; operative 1-6-2011 (Register 2011, No. 1). A Certificate of Compliance must be transmitted to OAL by 4-6-2011 or emergency language will be repealed by operation of law on the following day.
3. New article 6 (section 5220) and section refiled 4-1-2011 as an emergency; operative 4-6-2011 (Register 2011, No. 13). A Certificate of Compliance must be transmitted to OAL by 7-5-2011 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 4-1-2011 order, including repealer of subsection (c), transmitted to OAL 6-2-2011 and filed 7-1-2011 (Register 2011, No. 26).
5. Renumbering of former article 6 to article 7 filed 12-9-2011 as an emergency; operative 12-9-2011 (Register 2011, No. 49). A Certificate of Compliance must be transmitted to OAL by 6-6-2012 or emergency language will be repealed by operation of law on the following day.
6. Renumbering of former article 6 to article 7 refiled 6-1-2012 as an emergency; operative 6-1-2012 (Register 2012, No. 22). A Certificate of Compliance must be transmitted to OAL by 8-30-2012 or emergency language will be repealed by operation of law on the following day.
7. Renumbering of former article 6 to article 7 refiled 8-29-2012 as an emergency; operative 8-29-2012 (Register 2012, No. 35). A Certificate of Compliance must be transmitted to OAL by 11-27-2012 or emergency language will be repealed by operation of law on the following day.
8. Certificate of Compliance as to 8-29-2012 order transmitted to OAL 11-26-2012 and filed 1-8-2013 (Register 2013, No. 2).
9. Amendment of subsection (a) and new subsections (c)-(c)(2) filed 2-4-2016 as an emergency pursuant to Government Code section 8869.94; operative 2-4-2016 (Register 2016, No. 6). A Certificate of Compliance must be transmitted to OAL by 8-2-2016 or emergency language will be repealed by operation of law on the following day.
10. Certificate of Compliance as to 2-4-2016 order transmitted to OAL 5-4-2016 and filed 6-14-2016 (Register 2016, No. 25).
11. Amendment of article heading, section heading and section filed 12-15-2016 as an emergency pursuant to Government Code section 8869.94; operative 12-15-2016 (Register 2016, No. 51). A Certificate of Compliance must be transmitted to OAL by 6-13-2017 or emergency language will be repealed by operation of law on the following day.
12. Amendment of article heading, section heading and section refiled 5-30-2017 as an emergency pursuant to Government Code section 8869.94; operative 6-14-2017 (Register 2017, No. 22). A Certificate of Compliance must be transmitted to OAL by 9-12-2017 or emergency language will be repealed by operation of law on the following day.
13. Reinstatement of section as it existed prior to 12-15-2016 emergency amendment by operation of Government Code section 11346.1(f) (Register 2017, No. 38).
14. Amendment of article heading, section heading and section filed 10-13-2017; operative 10-13-2017 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 41).
15. Amendment of subsection (c)(2) filed 2-1-2021 as an emergency pursuant to Governmental Code section 8869.94; operative 2-1-2021. Emergency expiration extended 60 days (Executive Order N-40-20) plus an additional 60 days (Executive Order N-71-20) (Register 2021, No. 6). A Certificate of Compliance must be transmitted to OAL by 11-30-2021 or emergency language will be repealed by operation of law on the following day.
16. Refiling of 2-1-2021 order on 12-3-2021 as an emergency; operative 12-3-2021 (Register 2021, No. 49). A Certificate of Compliance must be transmitted to OAL by 3-3-2022 or emergency language will be repealed by operation of law on the following day.
17. Certificate of Compliance as to 12-3-2021 order, including amendment of subsection (c)(2), transmitted to OAL 4-11-2022 and filed 5-23-2022; amendments operative 5-23-2022 pursuant to Government Code section 11343.4(b)(3) (Register 2022, No. 21).
Note: Authority cited: Section 8869.94, Government Code. Reference: Sections 8869.84(c), 8869.85(a) and 8869.85(b), Government Code.
2. New article 6 (section 5220) and section refiled 1-6-2011 as an emergency; operative 1-6-2011 (Register 2011, No. 1). A Certificate of Compliance must be transmitted to OAL by 4-6-2011 or emergency language will be repealed by operation of law on the following day.
3. New article 6 (section 5220) and section refiled 4-1-2011 as an emergency; operative 4-6-2011 (Register 2011, No. 13). A Certificate of Compliance must be transmitted to OAL by 7-5-2011 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 4-1-2011 order, including repealer of subsection (c), transmitted to OAL 6-2-2011 and filed 7-1-2011 (Register 2011, No. 26).
5. Renumbering of former article 6 to article 7 filed 12-9-2011 as an emergency; operative 12-9-2011 (Register 2011, No. 49). A Certificate of Compliance must be transmitted to OAL by 6-6-2012 or emergency language will be repealed by operation of law on the following day.
6. Renumbering of former article 6 to article 7 refiled 6-1-2012 as an emergency; operative 6-1-2012 (Register 2012, No. 22). A Certificate of Compliance must be transmitted to OAL by 8-30-2012 or emergency language will be repealed by operation of law on the following day.
7. Renumbering of former article 6 to article 7 refiled 8-29-2012 as an emergency; operative 8-29-2012 (Register 2012, No. 35). A Certificate of Compliance must be transmitted to OAL by 11-27-2012 or emergency language will be repealed by operation of law on the following day.
8. Certificate of Compliance as to 8-29-2012 order transmitted to OAL 11-26-2012 and filed 1-8-2013 (Register 2013, No. 2).
9. Amendment of subsection (a) and new subsections (c)-(c)(2) filed 2-4-2016 as an emergency pursuant to Government Code section 8869.94; operative 2-4-2016 (Register 2016, No. 6). A Certificate of Compliance must be transmitted to OAL by 8-2-2016 or emergency language will be repealed by operation of law on the following day.
10. Certificate of Compliance as to 2-4-2016 order transmitted to OAL 5-4-2016 and filed 6-14-2016 (Register 2016, No. 25).
11. Amendment of article heading, section heading and section filed 12-15-2016 as an emergency pursuant to Government Code section 8869.94; operative 12-15-2016 (Register 2016, No. 51). A Certificate of Compliance must be transmitted to OAL by 6-13-2017 or emergency language will be repealed by operation of law on the following day.
12. Amendment of article heading, section heading and section refiled 5-30-2017 as an emergency pursuant to Government Code section 8869.94; operative 6-14-2017 (Register 2017, No. 22). A Certificate of Compliance must be transmitted to OAL by 9-12-2017 or emergency language will be repealed by operation of law on the following day.
13. Reinstatement of section as it existed prior to 12-15-2016 emergency amendment by operation of Government Code section 11346.1(f) (Register 2017, No. 38).
14. Amendment of article heading, section heading and section filed 10-13-2017; operative
15. Amendment of subsection (c)(2) filed 2-1-2021 as an emergency pursuant to Governmental Code section 8869.94; operative
16. Refiling of 2-1-2021 order on 12-3-2021 as an emergency; operative
17. Certificate of Compliance as to 12-3-2021 order, including amendment of subsection (c)(2), transmitted to OAL 4-11-2022 and filed 5-23-2022; amendments operative
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