Section 7870 - Transfer, Foreclosure, Breach, or Termination of Assistance(a) If the sponsor intends to sell or convey the rental housing development, express, prior written approval of both the local finance entity and the Department is required and may be given provided that the following terms shall be incorporated: (1) The successor in interest to the grantor agrees to assume the obligation of the grantor relating to the Program.(2) The successor in interest is an eligible sponsor and demonstrates that it can successfully own and operate the rental housing development.(b) If the payment of development assistance is accomplished by way of loan, a deed of trust securing said loan shall provide, among other things, that the responsible agency, upon default in payment or conditions of the loan by the sponsor under the terms of the deed of trust and in the responsible agency's discretion, either may declare all sums secured thereby immediately due and payable by executing and recording or causing to be executed and recorded a notice of default and election of sale or by commencing an appropriate foreclosure action. In addition, upon the occurrence of a default, the responsible agency may, in person, by agent or by receiver appointed by a court enter upon and take possession of the rental housing development, collect all rents, and perform any acts necessary to maintain or operate it, in such a manner as to not cause the default of a superior creditor or the cessation of any other subsidies.(c) If the payment of development assistance is accomplished by way of grant, the responsible agency, at its discretion, may demand repayment of the grant less an amount equivalent to the value of prior use of the premises or seek enforcement by proceeding at law and/or in equity, at the option of the responsible agency, against any person or persons or entity violating or attempting to violate any covenant or condition of the regulatory agreement.(d) Prior to taking any action under subdivisions (b) or (c), the responsible agency shall: (1) provide the sponsor with 30 days notice of the breach or default, and seek and encourage correction or compliance,(2) provide the Department 14 days written notice of the breach and then the intention to foreclose, default, or litigate, and(3) obtain Department approval for the action intended, which approval shall not be unreasonably withheld.(e) In the event of foreclosure or forced sale, the purchaser shall take title subject to these conditions and limitations.Cal. Code Regs. Tit. 25, § 7870
1. Amendment of subsection (e) filed 11-13-80 as an emergency; effective upon filing (Register 80, No. 46). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 3-13-81.
2. Certificate of Compliance transmitted to OAL 3-13-81 and filed 4-14-81 (Register 81, No. 16). Note: Authority cited: Section 50737, Health and Safety Code. Reference: Sections 50746, 50755 and 50765, Health and Safety Code.
1. Amendment of subsection (e) filed 11-13-80 as an emergency; effective upon filing (Register 80, No. 46). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed on 3-13-81.
2. Certificate of Compliance transmitted to OAL 3-13-81 and filed 4-14-81 (Register 81, No. 16).