Title 34
Property

Chapter 45
Preservation of Federally Insured or Assisted Housing

§ 34-45-11. Rights of tenants.

(a) As used in this section the following words shall have the following meanings:

(1) “Assistance required action” means any prepayment of a mortgage obligation secured by a development or an owner’s failure to renew a § 8 assistance contract to the full extent of owner’s renewal rights thereunder.

(2) “Assisted household” means an individual or individuals who occupy a rental unit in a development and whose gross annual income does not exceed upper income limits imposed by any federal, state, or local government program providing financial assistance to a development.

(3) “Assisted units” means all the dwelling units in a federally insured or assisted development subject to regulatory requirements with respect to:

(i) The rents chargeable by the owner; or

(ii) The maximum annual income of the tenant occupying the unit, which may depend upon the income of the tenant where a given percentage of the total number of units are required to be occupied by income qualifying tenants.

(4) “Designated household” means any of the following households:

(i) An assisted household which includes a senior citizen or a person with a disability, provided that the senior citizen or the person with a disability has been a member of the household for a period of at least twelve (12) months preceding the giving of the notice of intent required by this section; or

(ii) An assisted household which includes any child under the age of ten (10) years.

(5) “Person with a disability” means a person within the definition of handicapped person in 42 U.S.C. § 1437a(b)(3).

(6) “Owner” or “property owner” means the person or combination of persons who hold legal title to a development.

(7) “Relocation expenses” means costs incurred to:

(i) Hire contractors, labor, vehicles, or equipment to transport personal property;

(ii) Pack and unpack personal property;

(iii) Disconnect and reconnect utilities such as water, telephone, gas, electricity, and related services; and

(iv) Disconnect and install personal property.

(8) “Senior citizen” means a person who is at least sixty-two (62) years old on the date that the notice of intent is given.

(9) “Tenant protection assistance” means the payments to, and extension of leases for, the occupant or former occupant of any assisted unit in connection with an assistance required action as required under this section.

(b) This section does not apply if, prior to any assistance required action, the owner or purchaser records a covenant running with the land on which the development is located, in a form satisfactory to the corporation, which continues for the development the existing low and moderate income rental restrictions of the federal housing program:

(1) For the duration of the term remaining as of the date of prepayment of any mortgage secured by a development; and

(2) For the duration of the remaining term as of the date of termination, including all stated and unexercised renewal terms of any rental assistance agreement described in § 34-45-5.

(c)(1) Not less than ninety (90) days before the effective date of any assistance required action, the owner of a development shall give a written notice of intent in accordance with the provisions of this section.

(2) The notice of intent to be sent to each assisted household shall contain a brief summary of the assistance required action, and shall include:

(i) A summary statement of the assisted household’s rights and obligations under this section;

(ii) Notice that the corporation may have additional information regarding the anticipated assistance required action; and

(iii) The name, address, and phone number of the owner’s agent to whom the assisted household may apply for tenant protection assistance under this section.

(d) The owner shall provide the tenant protection assistance by:

(1) Paying to each assisted household, an amount equal to the sum of:

(i) The lesser of five hundred dollars ($500) or an amount equal to any security deposit tenant is required to make and first month’s rent and any part of the last month’s rent tenant is required to pay in advance for the tenant’s new residence no later than the date on which the assisted household vacates the unit; and

(ii) Reimbursement to the assisted household for relocation expenses up to four hundred fifty dollars ($450) which are actually and reasonably incurred; and

(2) Offering to each assisted household which is current in its rent payment and has not violated any other material term of its lease, a lease extension for a period of at least one year from the date of the assistance required action.

(e)(1) The portion of rent for the extended lease under subdivision (d)(2) that the tenant is obligated to pay from tenant’s own income may not exceed thirty percent (30%) of the tenant’s income, and may only be increased on the anniversary of the commencement date of the assisted householder’s then current lease.

(2) Any such increase may not exceed the lesser of:

(i) the amount of increase permitted by applicable federal, state, or local law; and

(ii) an amount determined by multiplying the amount required to be contributed by the assisted household for rent for the preceding year by the percentage increase for the applicable U.S. consumer price index, as selected by the corporation, for the most recent twelve (12) month period.

(3) Except as permitted or required by the corporation, all other terms, conditions, and procedures governing the extended lease shall be the same as the lease in effect on the day preceding the giving of the notice of intent.

(f) An owner may not take an assistance required action affecting any unit in an assisted project occupied by a designated household without offering to the assisted household which is the tenant of the unit a lease extension for a period of at least two (2) years from the date of the assistance required action, if the designated household:

(1) Is current in its rent payment and has not violated any other material term of its lease;

(2) Has provided the owner, within thirty (30) days after the giving of the notice of intent, with a written notice:

(i) Stating that the designated household is applying for an extended lease under this section; and

(ii) Setting forth facts, as applicable, showing that:

(A) A member of the household is either a person with a disability or a senior citizen who has been a member of the household for at least twelve (12) months preceding the giving of the notice of intent; or

(B) A member of the household is a child under the age of ten (10) years; and

(3) Has executed an extended lease and returned it to the owner within thirty (30) days after the giving of the notice of intent.

(g) The owner shall deliver to each assisted household entitled to receive the notice of intent, simultaneously with the notice of intent:

(1) An application on which may be included all of the information required by subdivision (f)(2);

(2) A lease containing the terms required by this section and clearly indicating that the lease will be effective only if the assisted household executes and returns the lease not later than thirty (30) days after the giving of the notice of intent; and

(3) A notice setting forth the rights and obligations of the assisted household under this section.

(h) Within forty-five (45) days after the giving of the notice of intent, the owner shall notify each assisted household whether it meets the applicable criteria for an extended lease under subdivision (d)(2) and such notice shall include the approximate ending date of the extended lease and each designated household which submits to the owner the documentation required by subdivisions (f)(2) and (3) shall be entitled to notification by the owner as to the following:

(1) Whether the household meets the applicable criteria of subsection (f), and, if not, an explanation of which criteria have not been met; and

(2) Whether the extended lease has been effective under subsection (f).

(i)(1) The extended lease of a designated household shall provide for a term commencing on the date of the assistance required action and terminating not less than two (2) years from that date.

(2) The initial rate of rent for the extended lease may not exceed an amount which requires the tenant to contribute more than thirty percent (30%) of the tenant’s income.

(3)(i) Annually, on the anniversary of the commencement date of the extended lease of a designated household, the rental fee for the unit may be increased.

(ii) The increase may not exceed an amount determined by multiplying the amount required to be contributed by the household for annual report for the preceding year by the percentage increase for the applicable U.S. consumer price index, as selected by the secretary, for the most recent twelve (12) month period.

(4) Except as this section otherwise permits or requires, the extended lease of a designated household shall contain the same terms and conditions as the lease in effect on the day preceding the giving of the notice of intent.

(j) The extended tenancy provided for in this section shall cease upon the occurrence of any of the following:

(1) Ninety (90) days after the death of the last surviving member of the assisted household who was residing in the unit at the date of the notice of intent, or ninety (90) days after the last member of the assisted household at the date of the notice of intent has moved from the unit;

(2) Eviction for failure to pay rent due in a timely fashion or violation of a material term of the lease; or

(3) Voluntary termination of the lease by the designated household.

(k) No later than the date on which the designated household vacates the unit, the owner shall pay relocation expenses in accordance with this section.

(l) In connection with any assistance required action:

(1) An owner may not terminate or alter the terms and conditions of any leases entered into before the effective date of the assistance required action, or otherwise take any action to interfere with any existing rights of tenants to occupy their units of the assisted project under existing leases or under any applicable federal, state, or local law;

(2) All tenants shall cooperate with the owner in providing information necessary to certify eligibility for housing subsidy payments, including execution of all necessary documents.

(m) Notwithstanding any provision of subsections (e) or (f) to the contrary, in the event that an owner is unable to obtain from the U.S. department of housing and urban development an extension of existing rental subsidies to cover the lease extension, the owner shall only be required to provide for each assisted household, whether or not occupied by a designated household, a lease extension of a period of one year from the date of the assistance required action; provided, however, that an owner may withdraw funds from existing reserve and residual accounts of the development to pay any deficit in the debt service or operating expenses of the development resulting from the tenant’s obligation to pay as rent only, a sum not more than thirty percent (30%) of the tenant’s income as provided in subsection (e), but only to the extent that the withdrawal is approved by the corporation, approval to be given if adequate funds remain in reserve and residual accounts, for the maintenance and repair of the development in accordance with the standards of the corporation.

(n) The owner shall inform those assisted households which the owner has deemed not to meet the applicable criteria for an extended lease of the reasons the households failed to meet the criteria, and of their right to appeal the decision to the corporation. Any assisted household may appeal the decision of an owner to deny the household an extended lease under subdivision (d)(2) or subsection (f) to the corporation by requesting in writing an informal hearing before the corporation within ten (10) days of the owner’s decision. The corporation shall hear and resolve the appeal within ten (10) days of receiving the hearing request, by either affirming the owner’s decision or ordering the owner to execute the appropriate extended lease with the assisted household.