093_SB0591

 
                                     LRB093 10662 DRJ 10992 b

 1        AN ACT in relation to housing.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Federally Subsidized Housing Preservation
 5    Act is amended by changing Sections 1, 3, 4,  5,  6,  7,  and
 6    10.1 as follows:

 7        (310 ILCS 60/1) (from Ch. 67 1/2, par. 1151)
 8        Sec. 1.  Short title.  This Act shall be known and may be
 9    cited   as   the   Federally   Assisted   Subsidized  Housing
10    Preservation Act.
11    (Source: P.A. 86-810.)

12        (310 ILCS 60/3) (from Ch. 67 1/2, par. 1153)
13        Sec. 3.  Definitions.  As used in this Act:
14        (a)  "IHDA"  means  the  Illinois   Housing   Development
15    Authority.
16        (b)  (Blank).     "FmHA"    means    the   Farmers   Home
17    Administration or a local housing authority administering  an
18    FmHA program.
19        (c)  (Blank).   "HUD"  means the United States Department
20    of Housing and Urban  Development,  or  the  Federal  Housing
21    Administration  or  a local housing authority administering a
22    HUD program.
23        (d)  "Owner"   means   the   person,   partnership,    or
24    corporation   that   holds   title  to  an  assisted  housing
25    development is a  party  to  a  contract  with  HUD  or  FmHA
26    providing  for  a  mortgage,  mortgage  assistance,  mortgage
27    insurance,  or  rent subsidy; or any spouse, employee, agent,
28    partner, master lessee, business affiliate or  associate,  or
29    successor   in   interest  of  such  person,  partnership  or
30    corporation, that receives or demands rent for the subsidized
 
                            -2-      LRB093 10662 DRJ 10992 b
 1    housing.
 2        (e)  "Assisted housing" or "assisted housing development"
 3    means a rental housing development that  receives  government
 4    assistance under any of the following programs:
 5             (1)  New  construction,  substantial rehabilitation,
 6        moderate rehabilitation, property  disposition  and  loan
 7        management  set-aside  programs,  or  any  other  program
 8        providing  project-based rental assistance, under Section
 9        8 of the United States Housing Act of 1937, as amended.
10             (2)  The  Below-Market-Interest-Rate  Program  under
11        Section 221(d)(3) of the National Housing Act.
12             (3)  Section 236 of the National Housing Act.
13             (4)  Section 202 of the National Housing Act.
14             (5)  Programs for rent supplement  assistance  under
15        Section  101  of the Housing and Urban Development Act of
16        1965, as amended.
17             (6)  Programs  under  Section  514  or  515  of  the
18        Housing Act of 1949.
19             (7)  Section  42  of  the  Internal  Revenue   Code.
20        "Subsidized housing" means any housing or unit of housing
21        financed  by a loan or mortgage insured or held by HUD as
22        follows:
23        (1)  insured or held by HUD under  Section  221(d)(3)  of
24    the  National  Housing  Act and assisted under Section 101 of
25    the Housing and Urban Development Act of 1965 or Section 8 of
26    the United States Housing Act of 1937;
27        (2)  insured or held by HUD and bears interest at a  rate
28    determined  under  the  proviso  of  Section 221(d)(3) of the
29    National Housing Act;
30        (3)  insured, assisted or held by HUD under  Section  236
31    of the National Housing Act;
32        (4)  insured  or  held by HUD under Section 514 or 515 of
33    the Housing Act of 1949; or
34        (5)  held by HUD and formerly  insured  under  a  program
 
                            -3-      LRB093 10662 DRJ 10992 b
 1    listed in this subsection (e).
 2        (f)  "Tenant"   means   a   tenant,   subtenant,  lessee,
 3    sublessee or other person entitled to  possession,  occupancy
 4    or  benefits  of a rental unit within the assisted subsidized
 5    housing.
 6        (g)  "Tenant   Association"   means    an    association,
 7    corporation  or other organization that represents at least a
 8    majority of the tenants in the  assisted  subsidized  housing
 9    building.
10        (h)  "Prepayment"   means   the   payment   in   full  or
11    refinancing  of  the  federally  insured  or  federally  held
12    mortgage indebtedness prior to its original maturity date, or
13    the voluntary  cancellation  of  mortgage  insurance,  on  an
14    assisted housing development described in paragraph (2), (3),
15    or  (4)  of  subsection  (e)  that  would  have the effect of
16    removing the current  low-income  affordability  restrictions
17    contained   in   the   applicable  laws  and  the  regulatory
18    agreement.
19        (i)  "Termination"  means  an  owner's  decision  not  to
20    extend or  renew  its  participation  in  a  federal  subsidy
21    program  for  assisted  housing described in paragraph (1) of
22    subsection (e) either at or prior to the  scheduled  date  of
23    the  expiration  of  the  contract, or the termination of the
24    rental  restrictions  for  assisted  housing   described   in
25    paragraph  (7)  of  subsection  (e)  that  may  result  in an
26    increase in tenant rents or a change in the form  of  subsidy
27    from project-based to tenant-based.
28        (j)  "Affected  public  entities" means: the mayor of the
29    city in which the assisted housing development is located or,
30    if the development is located in an unincorporated area,  the
31    chairperson  of  the  county  board;  the  appropriate public
32    housing authority, if any; and IHDA.
33    (Source: P.A. 86-810.)
 
                            -4-      LRB093 10662 DRJ 10992 b
 1        (310 ILCS 60/4) (from Ch. 67 1/2, par. 1154)
 2        Sec. 4.  Notice of intent to sell.
 3        (a)  An owner  may  not  sell  or  otherwise  dispose  of
 4    assisted   subsidized   housing,   complete   prepayment,  or
 5    terminate a subsidy contract or rental restrictions   unless,
 6    not  less  than  12 6 months before the sale or disposal, the
 7    owner submits to  all  tenants  of  the  assisted  subsidized
 8    housing  and to all affected public entities IHDA a notice of
 9    intent to sell or otherwise dispose of the property.
10        (b-5)  Every notice required under  subsection  (a)  must
11    include  the address of the assisted housing, characteristics
12    of the property including the number of units, and the  names
13    and addresses of the owners. The notice must also include the
14    date  on which the owner intends to sell, lease, or otherwise
15    dispose of the property, complete  prepayment,  or  terminate
16    rental restrictions, as well as a detailed list of applicable
17    rental  restrictions.  IHDA  shall adopt rules concerning the
18    content, format, delivery, and publication of such notices.
19        (b)  Within 60 days after the date of the owner's  notice
20    pursuant  to subsection (a), the tenants may notify the owner
21    that they  have  formed  a  Tenant  Association  meeting  the
22    requirements  of this Act and shall designate the name of its
23    representative or representatives in the notice.  The  Tenant
24    Association  may  conclude an agreement with a not-for-profit
25    corporation or private purchaser in which the  not-for-profit
26    corporation  or  private  purchaser  agrees  to represent the
27    residents and maintain  the  development  in  a  manner  that
28    preserves the development's low-income benefits. Once such an
29    agreement  is  concluded,  the  not-for-profit corporation or
30    private   purchaser   shall    assume    all    rights    and
31    responsibilities  attributed  to the Tenant Association under
32    this Act.
33    (Source: P.A. 86-810; 86-1352.)
 
                            -5-      LRB093 10662 DRJ 10992 b
 1        (310 ILCS 60/5) (from Ch. 67 1/2, par. 1155)
 2        Sec. 5.  Offer for sale to Tenant Association.  Within 60
 3    days after the  Tenant  Association  has  complied  with  the
 4    requirements  of  Section 4, the owner shall, before selling,
 5    leasing or  otherwise  disposing  of  the  assisted  housing,
 6    completing  prepayment,  or terminating a subsidy contract or
 7    rental  restrictions  property,   provide   to   the   Tenant
 8    Association  a bona fide offer for sale of the property which
 9    shall contain the essential terms of the sale, including,  at
10    a  minimum,  the  following:   the  sales price; the terms of
11    seller financing, if any, including the amount, the  interest
12    rate,  and  amortization rate thereof; the terms of assumable
13    financing, if any, including the amount, the  interest  rate,
14    and the amortization rate thereof; and proposed improvements,
15    if any, to the property to be made by the owner in connection
16    with the sale.
17    (Source: P.A. 86-810.)

18        (310 ILCS 60/6) (from Ch. 67 1/2, par. 1156)
19        Sec. 6.  Notice of intent to purchase.
20        (a)  The  Tenant  Association  shall  notify the owner in
21    writing, within 90 30 days after the receipt of the bona fide
22    offer of  sale,  of  its  intent  to  purchase  the  assisted
23    subsidized housing.
24        (b)  The  owner  shall, after receiving a notice pursuant
25    to subsection (a), comply with any reasonable request to make
26    documents available to the Tenant Association, during  normal
27    business  hours  at  the  owner's principal place of business
28    within 15 days of receiving such a request, including but not
29    limited to:  a floor plan of the development; itemized  lists
30    of  monthly  operating expenses, capital expenditures in each
31    of the 2 preceding calendar years  and  deferred  maintenance
32    costs;  the  amount  of project reserves; utility consumption
33    rates; copies of financial and  physical  inspection  reports
 
                            -6-      LRB093 10662 DRJ 10992 b
 1    filed  with federal, State or local agencies; the most recent
 2    rent roll; a list of tenants; a list of vacant units;  and  a
 3    statement  of the vacancy rate at the development for each of
 4    the 2 preceding calendar years.
 5    (Source: P.A. 86-810.)

 6        (310 ILCS 60/7) (from Ch. 67 1/2, par. 1157)
 7        Sec. 7.  Bona fide offer to purchase; contract.
 8        (a)  The Tenant Association shall, within 90  days  after
 9    it  notifies the owner of its intent to purchase, provide the
10    owner with a bona fide  offer  to  purchase  evidenced  by  a
11    purchase  contract  reflecting a sales price and terms agreed
12    to by the parties or the sales  price  and  terms  determined
13    pursuant  to  subsection  (b)  of this Section and an earnest
14    money deposit equal to 5% of the bona fide offer to purchase.
15        (b)  If the parties are unable to agree to a sales  price
16    within  the  first  60 days of the 90 day period specified in
17    subsection (a), the sale price  of  the  assisted  subsidized
18    housing  shall  be  based  upon  its  fair  market  value  as
19    determined  by  2 independent appraisers qualified to perform
20    multi-family housing  appraisals.   One  appraiser  shall  be
21    selected  and  paid  by  the  owner  and  the  other shall be
22    selected  and  paid  by  the  Tenant  Association.   If   the
23    appraisers  fail to agree upon a fair market value, the owner
24    and the Tenant Association shall either  jointly  select  and
25    pay  a  third  appraiser whose appraisal shall be binding, or
26    agree to take an average of the 2 appraisals.  All appraisers
27    shall be MAI certified.  The determination of the sales price
28    pursuant to this subsection shall be completed within the  90
29    day period specified in subsection (a) of this Section.
30        (c)  The  Tenant  Association shall agree to close on the
31    sale within 90 days  from  the  date  the  parties  sign  the
32    contract to purchase.
33    (Source: P.A. 86-810; 86-1352.)
 
                            -7-      LRB093 10662 DRJ 10992 b
 1        (310 ILCS 60/10.1) (from Ch. 67 1/2, par. 1160.1)
 2        Sec.  10.1.  Civil  action  against  owner.   The  Tenant
 3    Association,   or   one  or  more  tenants  in  the  assisted
 4    subsidized housing, may bring a civil action against an owner
 5    who has violated this Act.  An owner found to  have  violated
 6    any  provision  of  this  Act shall, in addition to any other
 7    damages, pay a civil penalty to each tenant in  the  assisted
 8    subsidized  housing  in  the  amount  of $500 per tenant, and
 9    shall also pay the attorney's  fees  and  costs  incurred  in
10    bringing the action.
11    (Source: P.A. 86-810; 86-1352)

12        Section  99.  Effective date.  This Act takes effect upon
13    becoming law.