1. (a)

   1. (1) Any charges to low-income tenants for services that are not optional generally must be included in gross rent.

   2. (2) A service is optional when:

      1. (A) The service is not a condition of occupancy; and
      2. (B) There is a reasonable alternative.
   3. (3) No separate fees can be charged for tenant facilities (swimming pools, parking, recreational facilities) if the costs of the facilities are included in eligible basis.
   4. (4) Fees cannot be charged for services considered as amenities or for which the owner received points.

2. (b)

   1. (1)

      1. (A) Refundable fees associated with renting an LIHTC unit are not included in the rent computation.
      2. (B) For example, security deposits and fees paid if a lease is prematurely terminated are one-time payments that are not considered in the rent computation.

   2. (2)

      1. (A) Required costs or fees, which are not refundable, are included in the rent computation.
      2. (B) Examples include fees for month-to-month tenancy and renter's insurance.

3. (c) The following fees may be charged if they are optional:

   1. (1) Pet fees;
   2. (2) Laundry room fees;
   3. (3) Garage; and
   4. (4) Storage fees.

4. (d)

   1. (1) Owners/managers must be careful that gross rents do not exceed tax credit limits.

   2. (2)

      1. (A) A common mistake is to charge additional fees that are prohibited under the program.
      2. (B) Prohibited fees include, but are not limited, to the following:

5. (i) Unit preparation fees;

   1. (ii) Redecorating fees; and

      1. (iii) Rekeying fees.

6. (e)

   1. (1) Application fees may be charged to cover the actual cost of checking a prospective tenant's:

      1. (A) Income;
      2. (B) Credit history; and
      3. (C) Landlord references.
   2. (2) The fee is limited to recovery of the actual out-of-pocket costs.
   3. (3) Owners or managers must provide supporting documentation to justify the amount of application fees.
   4. (4) It is also acceptable for the applicant to pay the application fee directly to the third party actually providing the applicant's rental history.

Codification Notes: "LIHTC" means low-income housing tax credit.