(3) All equity contributions will be adjusted based
upon the lesser of the consumer price index or 5% for each year, from
the end of the year of the contribution to the end of year fourteen
or the end of the year of the request for a QC Price if requested
at the end of the year or the year prior if the request is made earlier
than the last month of the year; and
(4) These guidelines are subject to change based upon
future IRS Rulings and/or guidance on the determination of Development
Owner distributions, equity contributions and/or any other element
of the QC Price.
(f) Appeal of Qualified Contract Price. The Department
reserves the right, at any time, to request additional information
to document the QC Price calculation or other information submitted.
If the documentation does not support the price indicated by the CPA
hired by the Development Owner, the Department may engage its own
CPA to perform a QC Price calculation and the cost of such service
will be paid for by the Development Owner. If a Development Owner
disagrees with the QC Price calculated by the Department, a Development
Owner may appeal in writing in accordance with §11.902 of this
title (relating to Appeals Process). A meeting will be arranged with
representatives of the Development Owner, the Department and the CPA
contracted by the Department to attempt to resolve the discrepancy.
The 1YP will not begin until the Department and Development Owner
have agreed to the QC Price in writing. Further appeals can be submitted
in accordance with §11.902 of this title (relating to Appeals
Process) and Tex. Gov't Code §2306.0321 and §2306.6715.
(g) Marketing of Property. By submitting a Request,
the Development Owner grants the Department the authority to market
the Development and provide Development information to interested
parties. Development information will consist of pictures of the Development,
location, amenities, number of Units, age of building, etc. Development
Owner or broker contact information will also be provided to interested
parties. The Development Owner is responsible for providing staff
any requested information to assist with site visits and inspections.
Marketing of the Development will continue until such time that a
Qualified Contract is presented or the 1YP has expired. Notwithstanding
subsection (d)(2) of this section, the Department reserves the right
to contract directly with a Third Party in marketing the Development.
Cost of such service, including a broker's fee, will be paid for by
the existing Development Owner. The Department must have continuous
cooperation from the Development Owner. Lack of cooperation will cause
the process to cease and the Development Owner will be required to
comply with requirements of the LURA for the remainder of the Extended
Use Period. Responsibilities of the Development Owner include but
are not limited to the items described in paragraphs (1) - (3) of
this subsection. The Development Owner must:
(1) Allow access to the Property and tenant files;
(2) Keep the Department informed of potential purchasers;
and
(3) Notify the Department of any offers to purchase.
(h) Presentation of a Qualified Contract. If the Department
finds a Qualified Purchaser willing to present an offer to purchase
the property for an amount at or above the QC Price, the Development
Owner may accept the offer and enter into a commercially reasonable
form of earnest money agreement or other contract of sale for the
property and provide a reasonable time for necessary due diligence
and closing of the purchase. If the Development Owner chooses not
to accept the QC offer that the Department presents, the QC request
will be closed and the possibility of terminating the Extended Use
Period through the Qualified Contract process is eliminated; the Property
remains bound by the provisions of the LURA for the remainder of the
Extended Use Period. If the Development Owner decides to sell the
development for the QC Price pursuant to a QC, the purchaser must
complete all requirements of an ownership transfer request and be
approved by the Department prior to closing on the purchase, but the
consummation of such a sale is not required for the LURA to continue
to bind the Development for the remainder of the Extended Use Period.
(1) The Department will attempt to procure a QC only
once during the Extended Use Period. If the transaction closes under
the contract, the new Development Owner will be required to fulfill
the requirements of the LURA for the remainder of the Extended Use
Period.
(2) If the Department fails to present a QC before
the end of the 1YP, the Department will file a release of the LURA
and the Development will no longer be restricted to low-income requirements
and compliance. However, in accordance with §42(h)(6)(E)(ii)
of the Code, for a three-year period commencing on the termination
of the Extended Use Period, the Development Owner may not evict or
displace tenants of Low-Income Units for reasons other than good cause
and will not be permitted to increase rents beyond the maximum tax
credit rents. Additionally, the Development Owner should submit to
the Department a request to terminate the LURA and evidence, in the
form of a signed certification and a copy of the letter, to be approved
by the Department, that the tenants in the Development have been notified
in writing that the LURA will be terminated and have been informed
of their protections during the three-year time frame.
(3) Prior to the Department filing a release of the
LURA, the Development Owner must correct all instances of noncompliance
at the Development.
(i) Compliance Monitoring during Extended Use Period.
For Developments that continue to be bound by the LURA and remain
affordable after the end of the Compliance Period, the Department
will monitor in accordance with the applicable requirements in Subchapters
F and G of this chapter (relating to Uniform Multifamily Rules).
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