On 2/26/19 the Treasury Department will officially publish significant changes to LIHTC monitoring requirements. A copy of the publication can be found HERE
- Advance notice of file reviews and inspections will be limited to no more than 15 days.
- Same day notification of the particular units and files to be reviewed.
- The number of units and files reviewed will increase for properties with 100 or fewer units, decrease for properties with more than 100 units.
The IRS has severely limited the amount of advance notice monitoring agencies are allowed to give LIHTC property owners of upcoming file reviews and physical inspections. This is presumably because some owners have used the advance notice to make deferred repairs and improvements they otherwise would have put off. As a result, the conditions noted at the time of the inspections do not accurately reflect the conditions the tenants experience on a regular basis. The IRS believes giving Owners no more than 15 days advance notice of an inspection and/or file review will help eliminate this gaming of the system. By using same-day notice of which units/files in particular will be reviewed, the IRS believes the results of the reviews will better reflect actual conditions.
These changes present significant logistical issues for Owners, Managers, and Monitoring Agents. Allocating Agencies are required to implement these changes no later than 12/31/2020. You should review your policies and procedures now as these changes can be put in place any time before then.
