From the Ohio Housing Finance Agency’s Fall Newsletter:
The Office of Program Compliance (PC) has received a significant increase in resident complaints regarding lease non-renewal, lack of good cause eviction and other termination of tenancy. As such, PC has revised the Low-Income Housing Tax Credit (LIHTC) Lease Addendum currently used at LIHTC projects (also known as Housing Tax Credit or HTC). The revised lease must be used by owners/property managers effective January 1, 2016.
The IRS makes clear that termination/eviction in a LIHTC development can only be done on the basis of good cause. Non-renewal of the lease does not constitute good cause. IRS Revenue Rule 2004-82 provides in relevant part: “Section 42(h)(6)(B)(i) requires that an extended low income housing commitment include a prohibition during the extended use period against (1) the eviction or the termination of tenancy (other than for good cause) of an existing tenant of any low income unit (no-cause eviction protection).”
In order to ensure protection for residents in LIHTC- or HTC-funded projects, OHFA requires that owners/property managers use the revised addendum, effective January 1, 2016. At that time, the revised addendum should also be used for all new move-ins. For residents that are in place prior to January 1, 2016, owners/property managers should use the revised addendum at the time of annual recertification or verification of student status. The revised addendum will be posted on our website in the next couple of months. Owners/ property managers should keep in mind the revised LIHTC Addendum is not to be used for projects federally subsidized (i.e. any project-based rental assistance, Section 8 or Rural Development 515).
Failure to use the revised addendum may result in the issuance of Form 8823 and/or placement on OHFA’s Watch List, which could limit an owner’s ability to access OHFA program funding.
