|
(i) Approve a rental schedule that is necessary to compensate
<br />forany net increase, occurring since the last approvedrental
<br />schedule, in taxes (other than income taxes) and operating
<br />and maintenance in over which Owners have no effective
<br />control or;
<br />(ii) Deny the increase stating the reasons therefor.
<br />5. (a) If the mortgage is originally a Secretary-beld purchase money
<br />mortgage, or is annually endorsed for insurance under any
<br />Section other than Sections 231 or 232 and is not designed
<br />primarily for occupancy by elderly persons, Owners shall not in
<br />selecting tenants discriminate against any person or persons by
<br />reason of the fact that there are children in the family.
<br />(b) Ifthe mortgage is originally endorsed for insurance under Section
<br />221, Owners shall in selecting tenanta give to displaced persons
<br />or fami I ies m absolute preference or priority of occupancy which
<br />shall be accomplished as follows:
<br />(1) For a period of sixty (60) days from the dam of original
<br />offering, unleas a shorter period of time is approved in
<br />writing by the Secretary, all units shall be held for such
<br />preferred applicants, after which time any remaining
<br />unmerited its may be mated to non - preferred applicants;
<br />(2) Thereafter, and on a continuing basis, such preferred appli-
<br />rant s shall be givenpreference over nonprefenedapplicants
<br />in their placement on a waiting list to be maintained by the
<br />Owners; and
<br />(3) Through such further provisions agreed to in writing by the
<br />parties.
<br />(c) Without the prior written approval ofthe Secretary not more than
<br />25% ofthenumbcrofunitsinapmjectinsuredmder Section231
<br />shall be occupied by persons other than elderly persons.
<br />(d) All advertising or efforts to rent a project insured notice Section
<br />231 shall reflect a bona fide effort of the Owners to obtain
<br />occupancy by elderly persons.
<br />6. Owners shall not without the prior written approval of the Secretary
<br />(a) Convey, transfer, or encumber any ofthe mortgaged property, or
<br />permit the conveyance, transfer or encumbrance of such property.
<br />(b) Assign, trurefer, dispose of, or encumber my personal property
<br />of the project, including rents, or pay out any funds except from
<br />surplus cash, except for reasonable operating expenses and me-
<br />essary repaint.
<br />(c) Convey, assign, or transfer my beneficial interest in any cost
<br />holding title to the property, or the interest crusty general partner
<br />in a partnership owning the property, or any right to manage or
<br />receive the rents and profits from the mortgaged property.
<br />(d) Remodel, add to, recomcoct, or demolish my part of the mort-
<br />gaged property or subtract from any real or personal property of
<br />the project.
<br />(e) Make, or receive and retain, any distribution of assets or my
<br />income ofany kind of the project except surplus cash and except
<br />on the following conditions:
<br />(1) All distributions shall be made only as ofmd after the end of
<br />a semianoual or annual fiscal period, and only as permitted
<br />by the law ofthe applicable jurisdiction;
<br />200304289
<br />(3) Any distribution ofany funds oEtheprojects which the party
<br />receiving such funds is not entitled to retain hereunder, shall
<br />be held in trust separate and apart from any other funds; and
<br />(4) There shall have been compliance with all outstanding
<br />notices of requirements for proper maintenance of the
<br />project.
<br />(f) Engage, except for mmml persons, in any other business or
<br />activity, including the operation of my other rental project, or
<br />incur any liability or obligation not in connection with the project.
<br />(g) Re quire, as a condition ofthe occupancy or leasing ofany unit in
<br />the project, any consideration or deposit other than the prepay-
<br />ment ofthe first month's rent plus a security deposit in an amount
<br />not on excess ofone month's rent to guarantee the performance of
<br />the covenants of the lease. Any funds collected as security
<br />deposits shall be kept separate multipart from all otherfunds ofthe
<br />project in a unit account the amount of which shall at all times
<br />equal or exceed the aggregate of all outstanding obligations under
<br />said account.
<br />(h) Permit the use ofthe dwelling accommodations or nursing facili-
<br />ties of the project for any purpose except the use which was
<br />originally intended, or permit commercial use greater than that
<br />originally approved by the Secretary.
<br />]. Owners shall maintain the mortgaged premises, accommodations and
<br />the grounds and equipment appurtenant thereon, in good repair and
<br />condition. In the event all or any of the buildings covered by the
<br />mortgage Bl all be destroyed or damaged by fire in other casualty, the
<br />money derived from any insurance on the property shell be applied in
<br />accordance with the terms of the mortgage.
<br />S. Owners shall not file any petition in bankruptcy or for areceiver or in
<br />insolvency or for reorganization or composition, or make my assign-
<br />ment for the benefit ofereditore or to a trustee for creditor, or permit
<br />an adjudication in banlwptoy or the taking possession of the mort-
<br />gaged property or my part thercofby a receiver or the seizure and sale
<br />of th e mortgaged property or any pmt thereof underjudicial process or
<br />pursuant to my power of wit, and fail to have each adverse actions set
<br />aside within forty-five (45) days.
<br />9. (a) Any management contract commit into by Owners or my ofthem
<br />involving the project shall contain a pro vision that, in the event of
<br />default hereunder, it shall be subject In termination without
<br />penalty upon written request by the Sc rcury. Upon such request
<br />Owners shall immediately arrange to terminate the contract
<br />within a period of not more than thirty (30) days and shall make
<br />arrangements satisfactory to the Secretary for continuing proper
<br />management of the project.
<br />(b) Payment fm services, supplies, or materials shall not exceed the
<br />a mount ordinarily paid for such services, mpplies, ormaterials in
<br />the area where the services arc rendered in the supplies or
<br />materials furnished.
<br />(c) The mortgaged property, equipment, buildings, plans, offices,
<br />apparatus, devices, books, contracts, records, documents, and
<br />other papers relating thereto shall at all times be maintained in
<br />reasonable condition for proper audit and subject to examination
<br />and inspection at my reasonable time by the Secretary or his duly
<br />authorized agents. Owners shall keep copies of all written con.
<br />tracts or other instruments which affect the mortgaged property,
<br />all or my ofwhich maybe subject to inspection and examination
<br />by the Secretary or his duly authorised agents.
<br />(2) No distribution shall be made from borrowed funds, prior to
<br />the completion of the project or when there is my default
<br />under this Agreement or under the note or mortgage;
<br />Replaces FHA -2466 which may be used until supply exhausted Page 2 of 6 form HUeD-824k146 1
<br />
|