National Housing Law Project Low-Income Housing Tax Credit

Low-Income Housing Tax Credit Program: Good Cause for Eviction

Created: 2/25/05
Revised: 04/18/05

For many years, it has been uncertain whether owners of properties funded under the federal Low-Income Housing Tax Credit program must have good cause to evict tenants. Following several state appellate courts, in July of 2004, the IRS issued a Revenue Ruling confirming that the statute does in fact require properties to have a recorded covenant that prohibits evictions without cause. Here are some resources to help tenant advocates implement this requirement administratively or judicially.

1. General Resources

a. IRS Revenue Ruling 2004-82 (July 30, 2004). Q & A 5 interprets the Low-Income Housing Tax Credit statute, Section 42 of the Internal Revenue Code, to require that each property have an Extended Low-Income Housing Commitment (Land Use Covenant or Regulatory Agreement) which prohibits evictions or terminations of tenancy without cause. State tax credit agencies have until December 31, 2004 to determine whether their properties are in compliance. Owners have one year from the date of any noncompliance determination to cure and retain their ability to claim the credits. Click here for IRS Revenue Ruling

b. NHLP, IRS Finally Clarifies Good Cause Eviction Protection for Tax Credit Tenants, 34 HOUS. LAW. BULL. 208 (Oct. 2004) on the IRS Revenue Ruling. Click here for article.

c. For more background, see Marc Jolin, Good Cause Eviction and the Low Income Housing Tax Credit, 67 U. CHI. L. REV. 521 (2000).

d. Letter from NHLP to Treasury Secretary John Snow (March 7, 2005), urging IRS to require prompt implementation of Rev. Ruling by state housing credit agencies. Click here for letter.

2. Compliance Documents

a. Housing Justice Network memo to National Council of State Housing Agencies (Sept. 2004). Contains attached sample forms which advocates and state agencies can use to implement Revenue Ruling, including amendment to extended low-income housing commitment, letter to owners, and lease addendum. Click here for HJN Memo.

b. Sample Extended Low-Income Housing Commitments Containing Required Good Cause Language, from Massachusetts (para 3(l) requires language in lease), Wisconsin (para 2(o)), Florida (para 3(c)). Click here for MA Document; Click here for WI Document; Click here for FL Document

c. Sample Extended Low-Income Housing Commitments Without Required Good Cause Language, from California and Indiana. Click here for CA document; Click here for IN document.

d. Additional State Agency Compliance Documents and Correspondence

1. WA State Hous. Fin. Comm'n compliance package developed in response to litigation (letter to owners, required lease addendum, notice to tenants), attached as Exhibits to Declaration of Mark Flynn, Mendoza v. Frenchman Hill Apts. and Washington Housing Finance Comm’n, No. CS-03-0494-RHW (E.D. Wa. Pending 2005). Click here for copy of Declaration

2. Rhode Island Hous. and Mortgage Fin. Comm'n (letter to owners and required lease addendum) (not yet available).

3. Letter from Maryland Attorney General to Legal Aid Bureau (Sept. 30, 2004) re reluctance to implement Rev. Ruling. Click here for Letter

4. Letter from Tex Rural Legal Aid to TDHCA re implementation of good cause requirement (Oct. 8, 2004). Click here for copy of Letter

5. Reg. Hous. LS memo to PA HFA (Dec. 10, 2004) re compliance. Click here for copy of memo

6. California Tax Credit Allocation Committee Letter to Owners (click here for TCAC Letter) and Checklist (click here for checklist), required Resident Notification Letter, Good Cause Lease Rider, and Notice to Residents (re Good Cause Rights) (April 2005), developed in negotiation with advocates in response to IRS Rev. Ruling. Note that Regulatory Agreements for pre-2005 LIHTC properties have not yet been amended per the Rev. Ruling. Click here for California Lease Rider packet.

3. Litigation on Good Cause Eviction Issue

a. Affirmative actions against owners and state agencies

1. Mendoza v. Frenchman Hill Apts. and Washington Housing Finance Comm'n, No. CS-03-0494-RHW (E.D. Wa. pending 2005). Filed before Rev. Ruling 2004-82, suit challenges owner's proposed eviction without cause and owner's and agency's failure to comply with Sec. 42 as a violation of federal law via Sec. 1983 and due process.

a. Amended Complaint. Click here for copy

b. Plaintiffs' Memo in Support of Motion for Summary Judgment. Click here for copy

c. WSHFC Memo in Opposition to SJ. Click here for copy

d. Private Defendants' Memo in Opposition to SJ. Click here for copy

e. Plaintiffs' Reply Memo on SJ. Click here for copy

f. WSHFC Statement of Facts. Click here for copy

g. WSHFC Declaration of Mark Flynn (with Attachments). Click here for copy

h. Private Defendants' Statement of Facts. Click here for copy

i. Plaintiffs' Reply to WSHFC Statement of Facts. Click here for copy

j. Plaintiffs' Reply to Priv. Defendants' Statement of Facts. Click here for copy

k. Order Denying in Part and Granting in Part Plaintiffs' Motion for SJ (Jan. 20, 2005). Click here for copy Court rules (1) that the LIHTC statute means what it says, requiring ELIHCs prohibiting evictions without cause, as urged by the tenants and the Rev Ruling; 2) that, under its application of Gonzaga, this requirement is not enforceable via Section 1983; 3) that, on the limited facts of this case, where a local housing authority was a general partner of the partnership owner, the tenants have shown a procedural due process violation, satisfied by state eviction procedure, except for the requirement and content of the eviction notice (which must be for cause). Note that: ruling is under reconsideration as of February 25, 2005; complaint did not include any state law mandamus claim against state agency. In response to court's invitation, plaintiffs filed objections to this ruling (click here for objections). In a ruling dated Feb. 15, 2005, the court nevertheless entered partial summary judgment on the 1983 claim for defendants (click here for Feb. 15 order).

b. State Cases. Prior to the Rev. Ruling, numerous state appellate courts, and doubtless many trial courts, had ruled that owners must have good cause to terminate tenancies (not linked) Cimarron Village Townhomes, Ltd. v. Washington, No. C5-98-15671, 1999 Minn. App. LEXIS 890, 1999 WL 538110 (July 27, 1999) (LIHTC tenants may be evicted only for good cause), on appeal after remand, 659 N.W.2d 811 (Minn. App. 2003) (upholding finding that good cause existed); Bowling Green Manor Ltd. Partnership v. Kirk, No. 94CVG01059, 1995 Ohio App. LEXIS 2707, 1995 WL 386476 (Ohio App. June 30, 1995) (finding sufficient state action to require good cause for termination of LIHTC and Section 8 tenancy); Bowling Green Manor Ltd. Partnership v. LaChance, 1995 Ohio App. LEXIS 2767, 1995 WL 386496 (Ohio App., June 30, 1995) (same); Carter v. Maryland Mgmt. Co., 2003 WL 22533198, 2003 Md. LEXIS 740 (Md. Ct. App. Nov. 10, 2003) (good cause required for termination of LIHTC/Voucher tenancy, but good cause found). See also YWCA v. Park, No. 93SC4248 Wis. Cir Ct., Dane Co. May 28, 1993), Clearinghouse No. 49,421 (good cause required to evict existing tenant per Wisconsin regulatory agreement) (decision) Click here for YWCA decision

Since the Rev. Ruling, the following state courts have ruled that good cause is required Lend-Lease Apt. Mgmt, LLC v. Stribling, No. H-WA-30495 (Ct. Super. Ct, Waterbury, 2004) (decision) Click here for Stribling decision; Galbraith Pointe Apartments v. Humphrey, No. 03-CV-29876 (Ohio, Hamilton County Mun. Ct., Aug. 20, 2004).

c. Sample forms and memos for Eviction Defense

1. Legal Aid Soc. of Minneapolis form answer ** (Not yet available)

2. Tenant's Memo from Lend-Lease Apt. Mgmt, LLC v. Stribling, No. H-WA-30495 (Ct. Super. Ct, Waterbury, 2004) Click here for copy of Stribing Memo

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