The Housing and Economic Recovery Act of 2008 (HERA) eliminated the annual income recertification requirement for 100 percent buildings. Each state agency, however, may opt to tighten the rule and impose its own recertification requirements. For mixed-use tax credit sites, owners are required to meet with low-income households to recertify their incomes and determine whether the site needs to follow the available unit rule because any household went over income.
Suppose people showed up at your management office with official-looking badges and asked to see a copy of a resident’s file. Chances are you may not have encountered a situation like this before. Many well-meaning managers would probably hand over the file, especially if the agents said they were investigating some serious crime involving the resident.
From time to time, you or a staff member may get a rent check from someone other than the resident named on the lease. If you deposit the check and it turns out that the resident is illegally subletting his unit to the person who sent the rent check, you could run into problems. A court may rule that you have had knowledge of and consented to the sublet by accepting and depositing the rent check even if you never intended to.
With certain exceptions, households made up entirely of full-time students aren’t eligible to occupy low-income units at a tax credit site. So when you screen applicants, it’s essential to ask them questions to determine whether you can rent to them without violating this rule, known as the student rule. And you must also make sure throughout the compliance period that you continue renting to households only if they stay eligible under the rule.
The IRS recently issued final and temporary regulations relating to LIHTC compliance monitoring. The temporary regulations expire Feb. 22, 2019. The amendments revise and clarify the requirement to conduct physical inspections and review low-income certifications and other documentation.
Unauthorized occupants can cause a host of problems at your community. Relatives or acquaintances of residents who move in without management’s knowledge are often the source of a site’s crime problems. Also, if an unauthorized occupant does something wrong at your community, such as damaging a unit, you’ll have a hard time holding him liable for his action since you have no lease agreement with him. In addition, unauthorized occupants can overtax your site’s systems, such as your hot water heater and available parking spaces.
There’s more at stake when you approve applicants for units in tax credit buildings than when you approve applicants for other assisted sites. That’s because a move-in mistake on a tax credit site can result in an immediate loss of tax credit dollars for owners, possibly jeopardizing any management contracts between an owner and a management company.
Suppose a resident’s unit is burglarized or a site visitor falls when a stairway handrail becomes loose or something happens at your site which causes property loss or bodily injury. Are you certain your employees let you know about certain incidents like these as soon as they happen? If they don’t, you risk insurance coverage problems.Most insurance policies require owners to notify their insurance companies as soon as possible after there’s any incident that could lead to a claim. If your notice comes too late, the insurance company can refuse to cover you.
Creating a resident selection plan is a good idea for any type of site you might manage, including a tax credit site. Although the tax credit program doesn’t require written resident selection plans, creating one can help you process applications more effectively, educate your prospects about your site’s requirements, and show your state housing agency that you treat prospects fairly.
