| (a) All Developments funded by the Department must
be decent, safe, sanitary, in good repair, and suitable for occupancy
throughout the Affordability Period. The Department will use HUD's
Uniform Physical Condition Standards (UPCS) to determine compliance
with property condition standards. In addition, Developments must
comply with all local health, safety, and building codes.
(b) HTC Development Owners are required by Treasury
Regulation §1.42-5 to report (through the Annual Owner's Compliance
Report) any local health, safety, or building code violations. HTC
Developments that fail to comply with local codes shall be reported
to the IRS.
(c) The Department is required to report any HTC Development
that fails to comply with any requirements of the UPCS or local codes
at any time during the compliance period to the IRS on IRS Form 8823.
Accordingly, the Department will submit IRS Form 8823 for any UPCS
violation.
(d) Acceptable evidence of correction of deficiencies
is a certification from an appropriate licensed professional that
the item now complies with the inspection standard or other documentation
that will allow the Department to reasonably determine when the repair
was made and whether the repair sufficiently corrected the violation(s)
of UPCS standards. Acceptable documentation includes: copies of work
orders (listing the deficiency, action taken or repairs made to correct
the deficiency, date of corrective action, and signature of the person
responsible for the correction), invoices (from vendors, etc.), or
other proof of correction. Photographs are not required but may be
submitted if labeled and only in support of a work order or invoice.
The Department will determine if submitted materials satisfactorily
document correction of noncompliance.
(e) Selection of Units for Inspection.
(1) Vacant Units will not be inspected (alternate Units
will be selected) if a Unit has been vacant for fewer than 30 days.
(2) Units vacant for more than 30 days are assumed
to be ready for occupancy and may be inspected. No deficiencies will
be cited for inspectable items that require utility service, if utilities
are turned off and the inspectable item is present and appears to
be in working order.
(f) The Department will consider a request for review
of a UPCS score using a process similar to the process established
by the U. S. Department of Housing and Urban Development Real Estate
Assessment Center. The request must be submitted in writing within
45 calendar days of receiving the initial UPCS inspection report and
score.
(g) Examples of items that can be adjusted include,
but are not limited to:
(1) Building Data Errors--The inspection includes the
wrong building or a building that is not owned by the Development.
(2) Unit Count Errors--The total number of units considered
in scoring is incorrect as reported at the time of the inspection.
(3) Non-Existent Deficiency Errors--The inspection
cites a deficiency that did not exist at the time of the inspection.
(4) Local Conditions and Exceptions--Circumstances
include inconsistencies between local code requirements and the UPCS
inspection protocol, such as conditions permitted by local variance
or license (e.g., child guards allowed on sleeping room windows by
local building codes) or preexisting physical features that do not
conform to or are inconsistent with the Department's physical condition
protocol.
(5) Ownership Issues--Items that were captured and
scored during the inspection that are not owned and/or not the responsibility
of the Development. Examples include sidewalks, roads, fences, retaining
walls, and mailboxes owned and maintained by adjoining properties
or the city/county/state and resident-owned appliances that are not
maintained by the Owner.
(6) Modernization Work In Progress--Developments undergoing
extensive modernization work in progress, underway at the time of
the physical inspection, may qualify for an adjustment. All elements
of the unit that are not undergoing modernization at the time of the
inspection (even if modernization is planned) will be subject to the
Department's physical inspection protocol without adjustment. Any
request for a Database adjustment for modernization work in progress
must include proof the work was contracted before any notice of inspection
was issued by the Department.
(h) Examples of items that cannot be adjusted include,
but are not limited to:
(1) Disagreements over the severity of a defect, such
as deficiencies rated Level 3 that the Owner believes should be rated
Level 1 or 2;
(2) Deficiencies that were repaired or corrected during
or after the inspection; or
(3) Deficiencies recorded with no associated point
loss (for example, inoperable smoke detectors) or deficiencies for
survey purposes only (for example, fair housing accessibility).
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