Sec. 05.05.05.06. Management

A. The sponsor shall directly manage or contract with a qualified for-profit or nonprofit management agent for the management of the operation of a project.

B. The management contract:

(1) Shall be acceptable to the Department and its counsel;

(2) If the capital assistance is funded from the proceeds of tax-exempt revenue bonds, shall have a duration not greater than 1 year, unless a longer term is approved by counsel to the Treasurer, and shall contain such other provisions necessary to ensure the tax-exempt status of the bonds; and

(3) May be renewed at 1-year intervals, or such longer intervals as approved by counsel to the Treasurer, at the option of the parties.

C. The sponsor shall agree in writing that as long as the capital assistance is outstanding, the sponsor shall:

(1) Maintain the project in good physical and financial condition;

(2) Cooperate with the Department in periodic monitoring of the:

(a) Physical condition of the project;

(b) Financial condition of the project;

(c) Incomes of households residing in the project; and

(d) Contributions of the households in the project to enhance and maintain the project or the community;

(3) Maintain project accounts as required by the loan documents, including accounts for operating costs, tenant security deposits, insurance, taxes, and reserves for replacements, and a residual receipts account containing all project revenues in excess of allowable project expenses; and

(4) Operate the project in accordance with the requirements of the Act and this chapter.