Resource Center

Good Cause Eviction

Owners of properties funded under the federal Low-Income Housing Tax Credit program must have good cause to evict tenants. This rule was first clarified statutorily in 1990. Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508, § 11701(a)(7), 104 Stat. 1388-506 (1990). However, many state finance agencies did not implement this rule for well over a decade. Following several state appellate courts, in July of 2004, the IRS issued a Revenue Ruling which confirmed that the statute requires properties to have a recorded covenant that prohibits evictions without cause. This requirement provides an important tool in ensuring that low-income tenants can remain in their homes. Advocates should ensure that their state LIHTC properties are in compliance with these requirements.

Articles

IRS Finally Clarifies Good Cause Eviction Protection for Tax Credit Tenants

This October 2004 NHLP Housing Law Bulletin article provides background on the IRS Revenue Ruling requiring all owners of LIHTC properties to place good cause eviction requirements in their property’s recorded restrictions.

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

This article, only available from the University of Chicago Law Review, was written prior to the IRS Rev. ruling. It argues for reading the tax code to require good cause and provides useful background on the issue.

Cases

State Cases

Prior to the Revenue Ruling, numerous state appellate courts, and doubtless many trial courts, had ruled that owners must have good cause to terminate tenancies.

Mendoza v. Frenchman Hill Apts. and Washington Housing Finance Comm'n, No. CS-03-0494-RHW (E.D. Wa. 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.

Materials

IRS Revenue Ruling 2004-82 (July 30, 2004)

This ruling 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.

Letter from NHLP to Treasury Secretary John Snow (March 7, 2005)

This letter urges the IRS to require prompt implementation of Rev. Ruling by state housing credit agencies.

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.

Sample Extended Low-Income Housing Commitments Containing Required Good Cause Language

Massachusetts (para 3(l) requires language in lease), Wisconsin (para 2(o)), Florida (para 3(c)). Sample Extended Low-Income Housing Commitments Without Required Good Cause Language, from California and Indiana

WA State House Finance Commission compliance package

WA State House Finance Commission 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 Commission, No. CS-03-0494-RHW (E.D. Wa. Pending 2005).

Letter from Maryland Attorney General to Legal Aid Bureau

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

Reg. Hous. LS memo to PA HFA (Dec. 10, 2004) regarding compliance

Reg. Hous. LS memo to PA HFA (Dec. 10, 2004) regarding compliance.

California Tax Credit Allocation Committee Letter, Checklist, and Lease Rider

California Tax Credit Allocation Committee Letter to Owners and Checklist, required Resident Notification Letter, Good Cause Lease Rider, and Notice to Residents (regarding Good Cause Rights) (April 2005), developed in negotiation with advocates in response to IRS Revenue Ruling. Note that Regulatory Agreements for pre-2005 LIHTC properties have not yet been amended in accordance with the Revenue Ruling.

Letter from Tex Rural Legal Aid to TDHCA regarding implementation of good cause requirement (Oct. 8, 2004)