Md. Code Regs. 05.05.09.07

Current through Register Vol. 51, No. 24, December 2, 2024

Section 05.05.09.07 - Terms and Conditions - Repayment

A. Conditional Repayment Obligation. Repayment of capital assistance may not be required unless the project ceases to be owned by a sponsor or operated in accordance with the requirements of this chapter and the terms and conditions of the capital assistance documents.

B. Conditions for Repayment. The Department may recover capital assistance from the sponsor if:

(1) The sponsor terminates the project before completion; or

(2) Within 15 years following completion of the project:

(a) The sponsor refinances, assigns, conveys, sells, or transfers an interest in all or some portion of the project or property:

(i) To any person, agency, or organization without the prior written consent of the Department; or

(ii) For use other than as a shelter, transitional, or other housing facility for homeless households;

(b) The sponsor ceases to operate all or a portion of the project as a shelter, transitional, or other housing facility for homeless households; or

(c) The sponsor encumbers or permits any other lien against the project or the property without the prior written consent of the Department.

C. Amount of Repayment. If the conditions in either §B(1) or (2) of this regulation exist, the Department shall recover from the sponsor:

(1) The amount of capital assistance provided to the project divided by the total development costs of the project, multiplied by the fair market value of the project at the time the condition for repayment occurs; and

(2) All costs and reasonable attorney fees incurred by the Department in recovery proceedings.

D. Notice of Repayment.

(1) Before the payment of any capital assistance, the sponsor shall record notice, in the form acceptable to the Department, in the land records of the jurisdiction in which the project is located, of the Department's right to repayment.

(2) The sponsor shall provide evidence of the recordation to the Department.

Md. Code Regs. 05.05.09.07

Regulations .07 amended effective October 5, 1998 (25:20 Md. R. 1527)