N.J. Admin. Code § 7:22-3.44 - Termination of loans

Current through Register Vol. 54, No. 7, April 4, 2022

(a) Termination of loans by the Department shall be conducted as follows:
1. The Department may terminate a Fund loan in whole or in part for good cause. The term "good cause" shall include but not be limited to:
i. Substantial failure to comply with the terms and conditions of the Fund loan agreement;
ii. Default by the recipient;
iii. A determination that the Fund loan was obtained by fraud;
iv. Without good cause therefor, substantial performance of the project work has not occurred;
v. Gross abuse or corrupt practices in the administration of the project have occurred; or
vi. Fund moneys have been used for non-allowable costs.
2. The Department shall give written notice to the recipient (certified mail, return receipt requested) of its intent to terminate a Fund loan, in whole or in part, at least 30 days prior to the intended date of termination.
3. The Department shall afford the recipient an opportunity for consultation prior to any termination. After such opportunity for consultation, the Department may, in writing (certified mail, return receipt requested), terminate the Fund loan in whole or in part.
(b) Project termination by the recipient shall be subject to the following:
1. A recipient shall not unilaterally terminate the project work for which a Fund loan has been awarded, except for good cause and subject to negotiation and payment of appropriate termination settlement costs. The recipient shall promptly give written notice to the Department of any complete or partial termination of the project work by the recipient.
2. If the Department determines that there is good cause for the termination of all or any portion of a project for which the Fund loan has been awarded, the Department may enter into a termination agreement or unilaterally terminate the Fund loan effective with the date of cessation of the project work by the recipient. The determination to terminate the Fund loan shall be solely within the discretion of the Department. If the Department determines not to terminate, the recipient shall remain bound by the terms and conditions of the Fund loan agreement.
3. If the Department determines that a recipient has ceased work on a project without good cause, the Department may unilaterally terminate the Fund loan pursuant to this section.
(c) The Department and recipient may enter into a mutual agreement to terminate at any time pursuant to terms which are consistent with this subchapter. The agreement shall establish the effective date of termination of the project and the schedule for repayment of the Fund loan.
(d) Upon termination, the recipient may be required to immediately refund or repay to the State the entire amount of the Fund loan moneys received. If the loan is guaranteed by a security/deficiency agreement, such agreement may have to be brought into effect to ensure the entire repayment of the Fund loan. The Department may, at its discretion, authorize the immediate repayment of a specific portion of the Fund loan and allow the remaining balance to be repaid in accordance with a revised Fund loan repayment schedule.
(e) The recipient shall reduce the amount of outstanding commitments insofar as possible and report to the Department the uncommitted balance of Fund moneys awarded under the Fund loan. The recipient shall make no new commitments without the Department's specific approval thereof. The Department shall make the final determination of the allowability of termination costs.
(f) In addition to any termination action, the Department retains the right to pursue other legal remedies as may be available under federal, State and local law as warranted.

Notes

N.J. Admin. Code § 7:22-3.44
Amended by R.1992 d.42, effective 1/21/1992.
See: 23 New Jersey Register 3282(a), 24 New Jersey Register 246(a).
References to "Director" and "Assistant Director" changed to "Department".

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