Cal. Code Regs. tit. 25 § 8135

Current through Register 2024 Notice Reg. No. 50, December 13, 2024

Section 8135 - Sales, Transfers, and Encumbrances

(a) A sponsor shall not sell, assign, transfer, or convey a rental housing development, or any interest therein or portion thereof, without the express prior written approval of the department. A sale, transfer, or conveyance shall be approved only if all of the following requirements are met:

(1) the existing sponsor is in compliance with the Regulatory Agreement or the sale, transfer, or conveyance will result in the cure of any existing violations;

(2) the successor-in-interest to the sponsor agrees to assume all obligations of the existing sponsor pursuant to the Regulatory Agreement and this program;

(3) the successor-in-interest is an eligible sponsor pursuant to section 8113 and demonstrates to the department's satisfaction that it can successfully own and operate the rental housing development and comply with all program requirements; and

(4) no terms of the sale, transfer, or conveyance jeopardize either the department's security or the successor's ability to comply with all program requirements.

(b) The department's approval of sale, assignment, transfer, or conveyance subject to such terms and conditions as may be necessary to preserve or establish the fiscal integrity of the project. Such conditions shall include:

(1) the deposit of sales proceeds, or a portion thereof, to maintain required reserves, or to offset negative cash flow;

(2) the recapture of syndication proceeds or other funds in accordance with special conditions included in the Standard Agreement or any other agreement executed by the sponsor; and

(3) such conditions as may be necessary to ensure compliance with the program requirements.

(c) The sponsor shall not encumber, pledge, or hypothecate the rental housing development, or any interest therein or portion thereof, or allow any lien, charge, or assessment against the rental housing development without the prior written approval of the department. The department may permit refinancing of existing liens or additional financing secured by the rental housing development to the extent necessary to maintain or improve the fiscal integrity of the project, to maintain affordable rents, or to decrease rents.

Cal. Code Regs. Tit. 25, § 8135

1. New section filed 12-14-90 as an emergency; operative 12-14-90 (Register 91, No. 11). A Certificate of Compliance must be transmitted to OAL by 4-15-91 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of law on 4-16-91.
3. New section filed 7-19-91 as an emergency; operative 7-19-91 (Register 92, No. 16). A Certificate of Compliance must be transmitted to OAL 11-6-91 or emergency language will be repealed by operation of law on the following day.
4. New section refiled 11-15-91 as an emergency; operative 11-15-91 (Register 92, No. 16). A Certificate of Compliance must be transmitted to OAL 3-16-92 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 11-15-91 order transmitted to OAL 12-12-91 and filed 1-13-92 (Register 92, No. 16).

Note: Authority cited: Sections 50406(n), 50884 and 50895, Health and Safety Code. Reference: Sections 50881.5 and 50893, Health and Safety Code.