(1) An owner's
written request to the Corporation for a qualified contract (a "qualified
contract request") shall be governed by
26 CFR
1.42-18 (the "qualified contract
regulations"), Section 42 of the IRC, as applicable, Section
420.503(4),
F.S., and Section
420.503(36),
F.S., and this rule section in effect at the time of the qualified contract
request. As used in this rule section:
"Bona fide contract" has the same meaning as in Section
420.503(4),
F.S.
"Qualified contract" has the same meaning as in Section
420.503(36),
F.S.
(2) For purposes of
this rule and processing a qualified contract request, the Corporation shall be
deemed to have fulfilled its responsibility to present the owner with a
qualified contract by presenting the owner with a contract deemed by the
Corporation to be a qualified contract pursuant to Section
420.503(36),
F.S., within the one-year period described in Section 42(h)(6)(I) of the IRC.
The initial deposit required by Section
420.503(36),
F.S., to be deposited in escrow in order for the bona fide contract to be
deemed a qualified contract must be deposited in escrow with a nationally
recognized title insurance company which offers escrow services ("escrow
agent") designated by the owner at the time of submission of the qualified
contract request, or if no such escrow agent is designated by the owner, with
an escrow agent selected by the purchaser, contemporaneously with the
submission of the contract to the owner. The contract shall be accompanied by
written notice from the Corporation to the owner that the contract has been
deemed by the Corporation to be a qualified contract pursuant to Section
420.503(36),
F.S. It shall be the owner's responsibility to negotiate with the purchaser the
specific terms of the contract, and the owner's rejection of the contract or
failure to act on the contract shall in no way affect the status of the
contract as a qualified contract. The Corporation shall have no duty and is not
responsible to either the owner or the purchaser for negotiating the details of
the qualified contract following its presentation to the owner.
(3) After the 14th year of the Compliance
Period, unless otherwise obligated under the Extended Use Agreement, or a Land
Use Restriction Agreement under another Corporation program, and provided the
right to request a qualified contract for the Development was not waived in
exchange for or in connection with the award of Housing Credits, the owner of a
Development may submit a qualified contract request to the Corporation. When
submitting a qualified contract request, the owner shall utilize the Qualified
Contract Package in effect at the time of the request and shall remit payment
of the required Qualified Contract Package fee as provided therein. The
Qualified Contract Package consists of the forms and instructions, obtained
from the Corporation at 227 North Bronough Street, Suite 5000, Tallahassee,
Florida 32301-1329, or on the Corporation's website under the Multifamily
Programs link or from
http://www.flrules.org/Gateway/reference.asp?No=Ref-12013,
which shall be completed and submitted to the Corporation in order to request a
qualified contract. The Qualified Contract Package, Rev. 03-2020, is adopted
and incorporated herein by reference.
(4) All information contained in a Qualified
Contract Package is subject to independent review, analysis and verification by
the Corporation or its agents. The Corporation may request additional
information to document the qualified contract amount calculated by the owner.
The Corporation may also engage the services of its own certified public
accountant (CPA) and real estate appraiser to assist in the review of a
Qualified Contract Package. Real estate appraisers involved in the qualified
contract process must be licensed by the state of Florida, be an MAI-designated
general appraiser and be otherwise acceptable to the Corporation.
(5) The qualified contract regulations
provide that the fair market value of the non-low-income portion of the
building includes the fair market value of the underlying land and that the
valuation of the underlying land must take into account the existing and
continuing requirements contained in the Extended Use Agreement. Pursuant to
Section 193.017, F.S., and the statutes
cited therein, the Extended Use Agreement recorded in connection with a Housing
Credit property is a land-use regulation and a limitation on the highest and
best use of the property during the term of the agreement that must be
considered by the county property appraiser in assessing the value of the
property. Unless the owner elects otherwise as provided below, for purposes of
a qualified contract request, the fair market value of the underlying land
shall be the value attributed to the underlying land by the county property
appraiser in the most recent year's assessed value of the Development provided
that the county property appraiser's valuation of the land takes into account
the existing and continuing requirements contained in the Extended Use
Agreement. The county property appraiser's valuation methodology shall be
verified upon submission of a qualified contract request in order to determine
if the valuation of the land has taken into account the existing and continuing
requirements contained in the Extended Use Agreement. If the owner is of the
opinion that the county property appraiser's valuation does not represent the
fair market value of the underlying land within the contemplation of the
qualified contract regulations at the time of the qualified contract request,
the owner may elect to submit with its qualified contract request a value (the
"owner's appraised value") for the underlying land at the fair market value
determined by a real estate appraiser (the "owner's appraiser") engaged by the
owner for that purpose in lieu of the county property appraiser's valuation. A
copy of the real estate appraisal (the "owner's appraisal report") upon which
the owner's appraised value is based shall be included with the owner's
qualified contract request. If the owner elects to rely on the county property
appraiser's valuation of the land and the Corporation determines that the
county property appraiser's valuation did not take into account the existing
and continuing requirements contained in the Extended Use Agreement, the county
property appraiser's valuation shall be disregarded, and instead, the owner
must obtain and submit to the Corporation an owner's appraisal report together
with the owner's appraised value as provided above. The owner's appraiser must
certify in the appraisal report that the valuation represents the fair market
value of the underlying land taking into account the existing and continuing
requirements contained in the Extended Use Agreement for the property. The
owner's appraisal report must also include a narrative describing the
methodology or manner in which the requirements contained in the Extended Use
Agreement were considered by the owner's appraiser in arriving at the owner's
appraised value of the underlying land, and, for comparison and evaluation
purposes, the opinion of the owner's appraiser as to what the fair market value
of the underlying land would be if unencumbered by the requirements of the
Extended Use Agreement. The lower of the restricted and unrestricted appraised
values should be included in the qualified contract price if the owner's
appraised value is submitted. The owner's appraised value of the underlying
land and the owner's appraisal report shall be subject to review and approval
by the Corporation. The Corporation may engage the services of one or more real
estate appraisers, or other professionals, to assist in the review and
evaluation of the owner's appraised value and the owner's appraisal
report.
(6) In addition to the
Qualified Contract Package fee, the owner shall be responsible for all
third-party fees in connection with the owner's qualified contract request.
Third party fees include, but are not limited to, the costs of the services
provided by CPAs and real estate appraisers or other real estate professionals
engaged by the Corporation to assist it in the review of a qualified contract
request, and the fees and commissions of any real estate broker in connection
with the marketing and sale of the development to a buyer under a qualified
contract.
(7) When offering a
development for sale to the general public pursuant to a qualified contract
request, the Corporation may, but shall not be required to, utilize the
services of a real estate broker under contract with or designated by the
Corporation to market and sell the development. The owner of the development
shall be responsible for the fees and commissions due any such real estate
broker in connection with the marketing and sale of the development, and, upon
request of the Corporation or the real estate broker, the owner shall enter
into a written agreement with the real estate broker pursuant to which the
owner agrees to pay to the real estate broker such fees and commissions in
connection with the marketing and sale of the development.
(8) The running of the one-year period
described in Section 42(h)(6)(I) of the IRC shall be suspended by the
Corporation at any time upon written notice to the owner if:
(a) The Corporation concludes that the
owner's request lacks information required in the Qualified Contract Package or
other essential information;
(b)
The owner fails to pay the Qualified Contract Package fee or, thereafter, fails
to timely pay any other fees or costs for which the owner is responsible
hereunder;
(c) The owner and the
Corporation are unable to reach mutual agreement on the qualified contract
amount;
(d) The Development that is
the subject of the qualified contract request is not in compliance with the
applicable program requirements or if any fees related to the Development are
delinquent;
(e) The owner fails to
allow the Corporation, its agents or prospective buyers timely access to the
Development for purposes of verification, inspection or due
diligence;
(f) The Applicant or
Developer, or Principal, Affiliate or Financial Beneficiary of an Applicant or
a Developer is in arrears to the Corporation or any agent or assignee of the
Corporation;
(g) Following request,
the owner fails to enter into the written agreement with the real estate broker
designated by the Corporation to market and sell the development;
(h) Administrative or civil proceedings are
commenced at any time during the one-year period contesting a determination or
decision made by the Corporation regarding a qualified contract request or a
qualified contract; or
(i) The
owner otherwise fails to comply with the requirements of this rule section or
the qualified contract regulations.
The term of any such suspension shall begin on the date of
the written notice provided by the Corporation to the owner, and shall continue
unabated until such date as the deficiency, non-payment, litigation or
disagreement giving rise to the suspension is cured or otherwise resolved. The
Corporation shall acknowledge the cure or resolution by written notice to the
owner within 10 days thereafter. The owner's election to value the underlying
land based on the owner's appraised value as provided in subsection (6), above,
shall automatically prevent the owner's purported qualified contract request
from beginning the one-year period described in Section 42(h)(6)(I) of the IRC
until such time as the Corporation and the owner shall mutually agree on the
value of the underlying land for purposes of the owner's qualified contract
request.
References in this rule to the one-year period shall mean
the running of the one-year period as same may be affected as a result of being
suspended pursuant to this subsection (8).
(9) Upon mutual agreement of the owner and
the Corporation, the qualified contract amount shall be documented in writing
signed by the Corporation and the owner.
(10) The owner shall cooperate with the
Corporation and its agents, real estate brokers and prospective buyers in
connection with the processing of the owner's qualified contract request and
the marketing of the Development to prospective buyers. If the Corporation
presents a qualified contract within the one-year period regardless of whether
the owner accepts, rejects or fails to act upon the contract, the Development
shall remain subject to the Extended Use Agreement, and the owner shall be
deemed to have waived any right or option to submit another qualified contract
request for the Development. If the Corporation is unable to present during
such one-year period a qualified contract, the Extended Use Agreement shall
terminate, subject, however, to Section 42(h)(6)(E)(ii) of the IRC which
provides that the termination of an extended low-income housing commitment
under Section 42(h)(6)(E)(i) will not be construed to permit before the close
of the 3-year period following the termination (a) the eviction or termination
of tenancy (other than for good cause) of an existing tenant of any Low-Income
unit, or (b) any increase in the gross rent with respect to a Low-Income unit
not otherwise permitted under Section 42 of the IRC.
(11) An owner shall be allowed only one
qualified contract request per Development.
(12) This rule shall apply to qualified
contract requests first submitted to the Corporation on or after the effective
date of the rule.
Notes
Fla. Admin.
Code Ann. R. 67-48.031
Rulemaking Authority
420.507,
420.508 FS. Law Implemented
420.5099 FS.
New 7-22-96,
Repromulgated 12-23-96, 1-6-98, Formerly 9I-48.031, Amended 11-9-98,
Repromulgated 2-24-00, 2-22-01, 3-17-02, 4-6-03, 3-21-04, Amended 2-7-05,
1-29-06, 4-1-07, 3-30-08, 8-6-09, 11-22-11, 10-9-13, Repromulgated by
Florida
Register Volume 40, Number 185, September 23, 2014 effective
10/8/2014, Amended by
Florida
Register Volume 42, Number 169, August 30, 2016 effective
9/15/2016, Amended
by
Florida
Register Volume 43, Number 090, May 9, 2017 effective
5/24/2017, Amended
by
Florida
Register Volume 44, Number 124, June 26, 2018 effective
7/8/2018, Amended by
Florida
Register Volume 45, Number 123, June 25, 2019 effective
7/11/2019, Amended
by
Florida
Register Volume 46, Number 112, June 9, 2020 effective
6/23/2020,
Repromulgated by
Florida
Register Volume 47, Number 086, May 4, 2021 effective
5/18/2021, Amended
by
Florida
Register Volume 48, Number 120, June 21, 2022 effective
7/6/2022, Amended by
Florida
Register Volume 49, Number 114, June 13, 2023 effective
6/28/2023.