51200-51207

HEALTH AND SAFETY CODE
SECTION 51200-51207




51200.  With respect to housing developments financed by a mortgage
loan from the agency, the agency shall:
   (a) Prescribe uniform systems of accounts and records for rental
and cooperative housing developments and require the housing sponsors
to make reports and give answers to specific questions on such forms
and at such times as may be necessary for the purposes of this part.
   (b) Establish minimum reserves to be maintained by nonprofit and
limited-dividend housing sponsors of rental and cooperative housing
developments.
   (c) Fix and alter from time to time a schedule of rents such as
may be necessary to provide residents of rental and cooperative
housing developments who are lower and very low income households
with affordable rents to the extent consistent with the maintenance
of the financial integrity of the housing developments and to provide
profits to housing sponsors subject to the limitations of Section
51202. Income from commercial facilities constituting a portion of a
housing development or residential structure financed pursuant to
this part shall, to the extent they receive the benefit of
below-market-interes t financing from the agency, assist in the
support of appurtenant residential facilities. No housing sponsor
shall increase the rent charged on any restricted rental or
cooperative unit of a housing development without the prior
permission of the agency, which shall be given only if the housing
sponsor affirmatively demonstrates that the increase is required to
defray necessary operating costs or avoid jeopardizing the fiscal
integrity of the housing development or to provide the agreed rate of
return with respect to additional equity money contributed by
investors pursuant to Section 51202, and additional debt service and
necessary operating costs with respect to increases in mortgage loans
for improvements to the housing development deemed necessary by the
agency.
   Applications to the agency for permission to adjust rents shall
include a statement of the existing and proposed rent for each unit,
a detailed statement of the necessity and authority for the increase
under this subdivision, and the extent to which rent increases would
be paid by residents of restricted units and not offset by increased
subsidy payments. Prior notice of any rent increase shall be given in
writing as required by Section 1946 of the Civil Code. Prior to the
time any rent increase is effective the housing sponsor shall notify
every affected resident, in writing, of informal meetings with the
housing sponsor to review the proposed rent increase and that each
resident, upon request, will be provided the information submitted to
the agency under this subdivision.
   "Restricted," as used in this subdivision, means required to be
made available for occupancy by lower income households or very low
income households pursuant to an agreement between the agency and the
housing sponsor.
   (d) Determine standards for, and control selection by housing
sponsors of, tenants and purchasers.
   (e) Regulate the terms of occupancy agreements to be used in
housing financed under this chapter.
   (f) Provide bilingual services and publications, or require
housing sponsors to provide bilingual services and publications,
which are necessary to ensure informed access to housing financed
pursuant to this part for persons and families of low or moderate
income who have limited fluency in the English language.




51201.  The agency may do any of the following with respect to
housing sponsors of rental and cooperative housing financed pursuant
to this part.
   (a) Through its agents or employees, enter upon and inspect the
lands, buildings, and equipment of a housing sponsor, including all
parts thereof, and examine the books and records of a housing
sponsor. However, there shall be no entry or inspection of occupied
units without consent of the occupant.
   (b) Supervise the operation and maintenance of any housing
financed pursuant to this part and order such repairs as may be
necessary to protect the public interest or the health, safety, or
welfare of occupants of the housing.
   (c) Require any housing sponsor to pay to the agency such fees as
it may prescribe to defray its costs incurred in connection with the
examination, inspection, supervision, auditing, or other regulation
of the housing sponsor.
   (d) Regulate the retirement of any capital investments or the
redemption of stock or the distribution of any equity interest in any
housing sponsor.
   (e) Order any housing sponsor to do, or to refrain from doing, any
act, as may be necessary to comply with the provisions of state,
federal, or local laws, the rules and regulations of the agency, or
the terms of any contract between the agency and the housing sponsor.
   (f) Withhold the transfer of construction payments to a housing
sponsor pending adequate performance, as determined by the agency, of
any acts required of such housing sponsor pursuant to the provisions
of this division or pursuant to any agreement by and between the
agency and such housing sponsor.



51202.  Every housing sponsor of a rental or cooperative housing
development which receives a construction loan or mortgage loan or a
grant pursuant to this part shall enter into an agreement with the
agency providing for the regulation of the disposition of property.
No housing sponsor of a rental housing development receiving a
mortgage loan pursuant to this part shall receive an earnings
distribution of more than 6 percent of the equity invested in the
housing development, unless a higher limitation on earnings
distribution is otherwise provided by rules and regulations of the
agency.
   The agency may permit a distribution greater than 6 percent to
investors contributing additional equity money to an existing housing
development, or in the case of a housing development over which the
agency has assumed managerial and financial control pursuant to
Section 51203, or in any case where it would materially contribute to
meeting the policies or goals of this division.



51203.  Upon making a determination that the financial status of a
rental or cooperative housing development is such as to jeopardize
any economic interest of the agency in such housing development, the
agency may assume managerial and financial control of the housing
sponsor and may supervise and prescribe the activities of the housing
sponsor in such manner and under such terms and conditions as the
agency may stipulate in any contract with the housing sponsor. Such
control may be exercised through appointment by the agency to the
governing body of such housing sponsor of a number of new members
sufficient to constitute a voting majority of the governing body
thereof, notwithstanding the provisions of the articles of
incorporation or other documents of organization of the housing
sponsor.



51204.  The agency may prescribe regulations specifying the
categories of cost which shall be allowable in the construction or
rehabilitation of a housing development. The agency may require any
housing sponsor to certify the development costs upon completion of
the housing development. Such certification of development costs
shall be subject to audit and verification by the agency.



51205.  (a) The agency may institute any action or proceeding
pursuant to applicable provisions of law against any housing sponsor
receiving or assuming a loan under this part in any court of
competent jurisdiction in order to enforce this part or the terms and
provisions of any contract between the agency and the housing
sponsor, to foreclose its mortgage, or to otherwise protect the
public interest or the occupants of the housing development. Where
necessary to protect the interests of the agency, it may, in
connection with the action or proceeding, apply to the court for the
appointment of a receiver to take over, manage, operate, and maintain
the affairs of the housing sponsor of a rental or cooperative
housing development. No receiver shall be appointed unless approved
by the agency.
   (b) (1) In the event of the reorganization of any housing sponsor,
to the extent permitted by law, that reorganization shall be subject
to the supervision and control of the agency. No reorganization of a
housing sponsor shall be effected without the prior written consent
of the agency.
   (2) The agency may provide in its loan agreements that, in the
event of a judgment against any housing sponsor in any action to
which the agency is not a party, there shall be no sale of the
housing development or any portion thereof, except upon 60 days'
written notice to the agency. Upon receipt of notice, the agency or
Attorney General shall take steps that, in its judgment, are
necessary to protect the rights of all parties.
   (c) Notwithstanding any other provisions of law, if, prior to
foreclosing on any collateral provided by a housing sponsor, the
agency institutes any judicial proceeding or takes any action against
a housing sponsor to enforce compliance with the obligations set out
in subdivision (d) or to collect or offset any sum owed the agency
as a result of any violation of any obligation set out in subdivision
(d), that remedy or action shall not constitute an action within the
meaning of subdivision (a) of Section 726 of the Code of Civil
Procedure, or in any way constitute a violation of the intent or
purposes of Section 726 of the Code of Civil Procedure, or constitute
a money judgment for a deficiency or a deficiency judgment within
the meaning of Section 580a, 580b, or 580d of, or subdivision (b) of
Section 726 of, the Code of Civil Procedure. However, the
above-referenced provisions of the Code of Civil Procedure shall
apply to any judicial proceeding instituted, or nonjudicial
foreclosure action taken, by the agency to collect the principal and
interest due on the mortgage loan with the housing sponsor.
   (d) Subdivision (c) shall apply to the obligations of the housing
sponsor to do any or all of the following:
   (1) Establish a schedule of rents, tenant standards and tenant
selection process, and terms of occupancy, and to provide bilingual
services and publications for tenants, pursuant to Section 51200.
   (2) Permit the agency to inspect the premises, books, and records;
supervise the day-to-day operation and maintenance of the housing
financed by the agency, and to pay the fees to defray the cost
thereof, pursuant to subdivisions (a) to (d), inclusive, of Section
51201.
   (3) Comply with the provisions of federal, state, or local laws
and ordinances, with the rules and regulations of the agency, or with
the terms of any contract with the agency, pursuant to subdivisions
(e) and (f) of Section 51201.
   (4) Adhere to the limitation on earnings required by Section 51202
or by the agency's regulatory agreement, or both.
   (5) Turn over managerial and financial control to the agency
pursuant to Section 51203.
   (6) Properly certify development costs pursuant to Section 51204.
   (7) Remit earned surplus to the agency as required by Section
51206.
   (e) This section shall apply to housing sponsors, as defined in
Section 50074 and as used in Chapter 6.7 (commencing with Section
51325).
   (f) Notwithstanding any other provision of law, the prevailing
party in any action instituted pursuant to this section shall be
awarded costs and reasonable attorney's fees, in an amount to be
determined in the court's discretion.
   (g) As used in this section, "mortgage loan" shall be defined as
in Section 50086.



51206.  Whenever a housing sponsor of a rental or cooperative
housing development accumulates an earned surplus greater than such
operating and replacement reserves as the agency may require, that
surplus shall be used to reduce rents within the housing development
to a level at which no person or family of low or moderate income
occupying the housing development pays more than the affordable rent.
Whenever a housing sponsor of a rental or cooperative housing
development accumulates an earned surplus greater than such operating
and replacement reserves as the agency may require and no person or
family of low or moderate income occupying the housing development
pays more than the affordable rent, then such surplus shall be
transferred to the agency for use in lowering the rents for persons
and families of low or moderate income in other housing developments
to a level no greater than the affordable rents.



51207.  A person or family of low or moderate income shall not
receive financial assistance under this part if such person or family
has already received assistance under this part for purchase of
other real property, unless such property is sold or transferred for
good cause as determined by the agency.