(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 C ode, 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 regulatory 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 regulatory 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
office, 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 C ode 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.
Notes
N.Y. Comp.
Codes R. & Regs. Tit. 9
§
2040.5
Amended
New
York State Register May 26, 2021/Volume XLIII, Issue 21, eff.
5/26/2021
Amended
New
York State Register June 11, 2025/Volume XLVII, Issue 23, eff.
6/11/2025
