Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) All assistance provided by the Department shall be governed by contracts binding all applicants and sponsors in accordance with this section, except that assistance through the Agency shall be governed by an Interagency Agreement pursuant to Article 6, and the Agency's sponsors by Section 7882.
(b) Assistance to local finance entities under the sponsor development component shall be governed by a state contract between the Department and the local finance entity and by a development agreement and a regulatory agreement between the local finance entity and the sponsor.
(c) Assistance to local housing authorities under the rights of occupancy component shall be governed by a state contract between the Department and the local housing authority and by a regulatory agreement between the local and housing authority and the sponsor.
(d) Assistance to local housing authorities under the housing authority component shall be governed by a state contract, a development agreement and a regulatory agreement between the Department and the local housing authority. The terms of the contract and the agreements may be incorporated in a single document if the Department so requires.
(e) Provisions and requirements relating to assistance under the annuity trust fund shall be incorporated into the state contract and regulatory agreement governing assistance under the appropriate main component.
(f) Provisions and requirements relating to assistance under the management reserve account and the feasibility account may be incorporated by way of amendment into the state contract and regulatory agreement governing assistance under the appropriate main component.
(g) The Department may require such additional contracts and agreements between the Department, applicants and sponsors as it deems necessary to meet the purposes of the Program.
(h) All state contracts other than the Interagency Operational Agreement and all regulatory agreements shall be recorded or referenced in a recorded document in the office of the county recorder in the county in which the rental housing development to which they relate is located. When so recorded, they shall constitute a lien on the rental housing development in accordance with Section 7818 for the performance of conditions, including the payment of any money, specified therein. Recorded state contracts shall be indexed in the grantor index to the name of the sponsor and in the grantee index to the State of California. Recorded regulatory agreements shall be indexed in the grantor index to the name of the sponsor and in the grantee index to the name of the applicant.
(i) All state contracts and regulatory or development agreements shall contain such provisions as the Department considers necessary to meet the purposes of the Program, including but not limited to:
(1) a description of how the assistance under the Program will be used to ensure that each assisted unit will remain available on a priority basis to or occupied by eligible households for a period of not less than thirty (30) years or the term of the below market interest financing, if any, whichever is greater.
(2) specification of the amount, manner, terms and timing of payments, including annuity fund payments, by the Department and the applicant under state contracts and regulatory agreements, respectively, so as to ensure the economic feasibility of the rental housing development and to protect the interests of the State.
(3) requirements for reporting in accordance with Section 7850.
(4) a provision that the covenants and conditions of such contracts and agreements shall be binding upon the successors in interest to the parties thereto,
(5) a provision requiring that the local finance entity and sponsor agree to abide by the directives of the Department with respect to excess annuity fund payments and/or excess rent receipts when incoming from assisted units and/or annuity fund payments are greater than approved operating costs and when, in the Department's judgment, the assisted units can operate with less rent receipts and/or annuity fund payments, and
(6) a provision stating that the Department and the local finance entity, by mutual agreement, may reduce the number of assisted units in a rental housing development only if the annuity fund cannot provide adequate assistance to maintain the development's fiscal integrity. Any such reduction shall be reviewed no less often than annually as to its continued necessity.
(j) State contracts, in addition to provisions required in subdivision (i), shall contain provisions which:
(1) require the Department's approval of regulatory agreements and development agreements, or any amendments thereto, before such agreements or amendments are entered into by the parties thereto,
(2) assign to the Department the responsible agency's right to enforce the regulatory and development agreements in the event of the responsible agency's failure to enforce such agreements, and
(3) govern the use of annuity trust fund payments in accordance with Section 7834.
(k) Regulatory agreements, in addition to provisions required in subdivision (i), shall contain provisions which:
(1) restrict availability and occupancy of assisted units to eligible households, in accordance with this subchapter, for a period of no less than thirty (30) years or the term of the below market interest financing, if any, whichever is greater,
(2) specify the number of non-assisted and assisted units in the rental housing development and the projected rents for those units.
(3) with respect to the assisted units, specify tenant selection and occupancy standards in accordance with this subchapter,
(4) with respect to all units in the rental housing development, specify the terms of occupancy agreements in accordance with this subchapter,
(5) with respect to all units in the rental housing development, specify procedures for increases in rent in accordance with Section 7864,
(6) limit the sponsor's return on investment in accordance with Section 7866,
(7) make the agreement, or any amendment thereto, of no force or effect unless it has been approved by the Department before being entered into by the parties thereto.
(8) with respect to all units in the rental housing development, require for all documents made available or used by occupants, that copies be available in the language(s) commonly spoken by residents of the area, and
(9) with respect to the non-assisted units authorize the responsible agency to fix and alter a schedule of rents such as may be necessary to provide residents of the rental housing development with affordable rents to be consistent with the financial integrity of the rental housing development.
(10) with respect to all units in the rental housing development, require an annual budget in accordance with Section 7850.
(11) with respect to the assisted units in the rental housing development, require the return of all excess rents to the Department, and
(12) govern the establishment, procedures for use, and terms for recapture of the occupancy reserve and surplus payment reserve, if any, provided in subsection 7834(d).
(l) All development agreements shall contain provisions which:
(1) require, pursuant to state or federal law, payment of prevailing wage rates in the construction of a rental housing development,
(2) require, pursuant to state or federal law, the use of affirmative action by hiring by all contractors and subcontractors involved in the construction of a rental housing development,
(3) require, pursuant to state or federal law, such contractors and subcontractors to provide employment and training opportunities for building trades apprentices, and
(4) specify the building and property codes and standards applicable to the rental housing development.
1. Amendment filed 11-13-80 as an emergency; effective upon filing (Register 80, No. 46). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 3-13-81.
2. Certificate of Compliance transmitted to OAL 3-13-81 and filed 4-14-81 (Register 80, No. 16).
3. Amendment of subsections (k) and (l) filed 10-25-82; effective upon filing pursuant to Government Code section 11346.2(d) (Register 82, No. 44).
Note: Authority cited: Section 50737, Health and Safety Code. Reference: Sections 50739, 50745, 50749, 50755, 50756, 50757, and 50766, Health and Safety Code.
