Article 3. Contracts With Local Public Entities of California Health And Safety Code >> Division 31. >> Part 2. >> Chapter 9. >> Article 3.

The department may contract with local public entities to provide funds to be used by those entities to obtain a right of occupancy or leasehold for eligible households in some or all of the units in a rental housing development. In order to maximize the number of units for which a right of occupancy or leasehold is obtained, the payment made by the local public entity in obtaining the right or leasehold shall not exceed the costs of developing the unit. The local public entity may be authorized by the department to pay the entire amount of the development costs as soon as the unit is available for occupancy. Any contract executed pursuant to this article which provides for a right of occupancy or leasehold in favor of a local public entity shall be recorded or referenced in a recorded document in the office of the county recorder of the county in which the real property is located. The contract shall particularly describe the real property subject to the right of occupancy or leasehold, designate the specific rental units or proportion of the rental housing development subject to the right of occupancy or leasehold, and specify the period for which the right of occupancy or leasehold extends.

Each contract pursuant to Section 50755 shall be recorded or referenced in a recorded document in the office of the county recorder of the county in which the rental housing development is located, and shall be indexed by the recorder in the grantor index to the name of the sponsor and in the grantee index to the name of the State of California. The contract shall contain all of the following provisions:
  (a) The amount and terms of payments to be provided under this article.
  (b) A description of the way in which the payments will be used to provide affordable rents to eligible households occupying dwelling units within the rental housing development.
  (c) A description of the rental housing development, projected rent levels for all units, and the number of units to be occupied by eligible households.
  (d) A requirement for periodic reports by the local public entity, which shall at a minimum include information on the fiscal condition of the rental housing development, the maintenance of the development, and the number of units occupied by eligible households.
  (e) The terms of the regulatory agreement to be entered into between the sponsor and the local public entity pursuant to Section 50757 after the department's approval.
  (f) Standards which govern selection of tenants by housing sponsors to ensure occupancy by eligible households consistent with the requirements of Sections 50736 and 50739 and the terms of occupancy agreements to be used in rental housing developments.
  (g) Provisions sufficient to ensure that dwelling units shall be available to, or occupied by, eligible households for a period of not less than 30 years.
  (h) Provisions which specify the timing and manner in which payments are made by the department so as to ensure the economic feasibility of the rental housing development and to protect the interests of the state.
  (i) A provision which specifies the conditions under which the department and any intended beneficiary may enforce the regulatory agreement.
  (j) A provision that failure to operate the assisted units in accordance with the regulatory agreement shall be deemed a violation of the regulatory agreement or deed of trust, as the case may be. In the alternative, or in addition, the agreement may contain a lien on the rental housing development for the purpose of securing performance of the agreement. That lien shall include a legal description of the assisted real property which is subject to the lien and shall specify the duration of the lien on the assisted property.
  (k) Provisions necessary for the administration, disbursement, and protection of annuity fund payments, including provisions specifying the conditions under which the department may recover or reallocate all or any part of those payments for the benefit of eligible households in additional or existing assisted units.
  ( l) Provisions that do both of the following:
  (1) Govern the recovery and reallocation by the department of rent revenues, derived by the sponsor from the assisted units which are not necessary to defray costs of operation attributable to the units.
  (2) Specify the allowable return on the sponsor's investment. Those rent revenues shall be handled by the department in the same manner as annuity payments recovered pursuant to subdivision (k).
  (m) Authorization for the local public entity to fix and alter rents pursuant to subdivision (a) of Section 50759.
  (n) Any other provisions necessary to carry out the purposes and to exercise the powers granted by this chapter.

Any rental housing development assisted pursuant to this article shall be governed by a regulatory agreement between the sponsor and the local public entity. The regulatory agreements shall contain all of the following:
  (a) Restrictions on occupancy of the dwelling units within the rental housing development necessary to meet the requirements of Sections 50736 and 50739.
  (b) A requirement that all contractors and subcontractors use affirmative action in hiring.
  (c) Provisions implementing the terms of tenant selection standards and occupancy agreements.
  (d) Provisions necessary for the administration and protection of annuity funds established pursuant to Section 50748 and for recapture and reallocation of annuity fund payments and rent revenues pursuant to subdivisions (k) and ( l) of Section 50756.
  (e) Any other provisions necessary to carry out the purposes and to exercise the powers granted by this chapter.

With respect to units for which a local public entity has obtained a leasehold or right of occupancy, the local public entity may manage the units or may contract for management of the units with the housing sponsor or other persons designated by the local public entity, with the approval of the department.

With respect to assisted units developed pursuant to this article, the local public entity shall do all of the following:
  (a) Ensure the provision of affordable rents.
  (b) Ensure that the incomes of tenants are recertified annually.
  (c) Ensure that upon income recertification rents are adjusted and take effect within 30 days of adjustment.
  (d) Determine standards for, and ensure fair procedures for, the selection of tenants by housing sponsors or other management designated pursuant to Section 50758 to ensure occupancy by eligible households consistent with the requirements of Sections 50736 and 50739.
  (e) Regulate the terms of tenant occupancy agreements.

With respect to units developed pursuant to this article, the local public entity may, and at the direction of the department shall, do any of the following:
  (a) Through its agents or employees enter upon and inspect the lands, buildings, equipment, and books and records of the rental housing development at any time before, during, or after construction of the units assisted pursuant to this article. Entry or inspection of any occupied unit is subject to Section 1954 of the Civil Code.
  (b) Supervise the operation and maintenance of any housing assisted pursuant to this section and order any repairs necessary to protect the public interest or the health, safety, or welfare of occupants of the housing.