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99 110475 the gross rent above the maximum allowed under the Code with respect to such low income unit. (d) If the Project experiences financial trouble it can request a waiver of the applicable rent restriction stated on the summary page (u) of this document. The right to grant a rent restriction waiver is vested in the Executive Director of the Authority. A waiver will be based on the written evidence supplied by the owner which is evaluated and certified by an independent third party CPA. The Authority may waive or adjust the specified rent restriction for a period not to exceed 36 months. After 30 months a review of the current evidence will be conducted to determine if the waiver should be extended. Conditions justifying a waiver of the rent restriction include but are not limited to: (1) Extraordinary changes in operating expenses. (2) Capital requirements necessary to maintain a safe, sanitary unit, suitable for occupancy. (3) Lender originated changes to financial conditions and debt arrangement that substantially impacts debt service coverage ratios. Any dispute of the waiver decision by the Executive Director of the Authority can be appealed and settled by arbitration. The arbitration board shall consist of the following mutually acceptable representatives: (1) A representative selected by the Executive Director of the Authority; (2) A representative selected by the Owner of the Project; and (3) A representative from the American Arbitration Association (moderator or voting member). Under no circumstances shall the waiver process provide an opportunity for a project to deviate from the rent restriction because of improved market conditions or for any reason other than an increase in the certain county area median income, without the prior approval of the Executive Director of the Authority. Section 6. Internal Revenue Service Notification. In the event the Authority discovers any noncompliance of any provisions hereof, the Authority will immediately give written notice to the Owner. The Owner shall have 90 days from the date of such notice (the "Correction Period") to correct such noncompliance. Following the Correction Period, the Authority will file with the IRS a copy of IRS Form 8823, explaining the nature of the noncompliance and whether or not such noncompliance has been corrected. Noncompliance includes, but is not limited to (1) failure to receive or failure to permit the Authority to inspect tenant income certifications, supporting documentation and rent records, (2) upon inspection, non-compliance with provisions of Section 42, and (3) any change in the applicable fraction or eligible basis that would result in a decrease in the Qualified Basis. The Authority is authorized and entitled to do all acts necessary 01-204659.01 9