1. (a) Restrictions. As a condition for sale at a Reasonable Price at Priority 4, a nonprofit entity shall agree to Use and Resale Restrictions containing the terms, conditions, and restrictions imposed by the Department to ensure that the property is rehabilitated and maintained for public and community access and use. Such terms include, but are not limited to:

   1. (1) restricting the use of the property; and
   2. (2) restricting rental of the property; and
   3. (3) restricting transfers of the property; and
   4. (4) restricting refinancing of the property; and
   5. (5) specifying distribution of proceeds from a subsequent sale; and
   6. (6) monitoring and enforcement provisions.

2. (b) Restriction on Use. A property sold at Priority 4 shall be rehabilitated and maintained for public and community access and use. This restriction becomes operative:

   1. (1) If there is no current Tenant at the time of purchase; or
   2. (2) After all current Tenants vacate the property.

3. (c) Current Tenants. A non-profit entity that purchases a property at Priority 4 shall provide a current Tenant a first right of occupancy.

   1. (1) If the current Tenant meets the definition of Persons and Families of Low or Moderate Income, then the purchasing nonprofit entity shall rehabilitate the property as Decent, Safe, and Sanitary housing and provide Affordable Rents to the Tenant.
   2. (2) If the Tenant does not meet the definition of Persons and Families of Low or Moderate Income, then the purchasing nonprofit entity shall rehabilitate the property as Decent, Safe, and Sanitary housing and may collect market rent from the Tenant.

4. (d) Resale. An occupied property sold at Priority 4 shall not be resold for 120 calendar days following close of escrow. All properties sold at Priority 4 may be sold as follows:

   1. (1) To another nonprofit entity dedicated to rehabilitating and maintaining the historic home for public and community access and use only if the following conditions are met:

      1. (A) The Department has provided written approval of the sale; and
      2. (B) The sales price is the same price paid to the Department for the Priority 4 purchase; and
      3. (C) The purchasing nonprofit entity takes ownership subject to the same Use and Resale Restrictions imposed upon the selling nonprofit entity.

   2. (2) At Fair Market Value provided that the nonprofit entity pays CalHFA from the proceeds of the sale the difference between the price paid to the Department for the property and the subsequent sales price, minus:

      1. (A) Actual closing costs paid by the nonprofit entity for the subsequent sale; and
      2. (B) Increases in property value directly attributed to improvements made by the nonprofit entity.
5. (e) Removing Restrictions. The Use and Resale Restrictions described in this section will cease to encumber the property upon payment of the amounts described in (d)(2).

Note: Authority cited: Section 54237, Government Code. Reference: Sections 54236, 54237 and 54238, Government Code.

History

1. New section filed 12-13-2021 as an emergency; operative 12-13-2021 (Register 2021, No. 51). Pursuant to Government Code Section 54237.10, this is a statutorily deemed emergency and the emergency language remains in effect until 12-14-2023. A Certificate of Compliance must be transmitted to OAL by 12-13-2023 or emergency language will be repealed by operation of law on the following day.

2. Pursuant to Government Code section 54239.5(e)(3), as added by Senate Bill 959 (Stats. 2022, Ch. 668), a Certificate of Compliance must be transmitted to OAL by 9-30-2024 or language of the emergency order of 12-13-2021 (Register 2021, No. 51) will be repealed by operation of law on the following day (Register 2023, No. 27).

3. Pursuant to Government Code section 54237.10(c), as added by Assembly Bill 1038 (Stats. 2024, Ch. 347), a Certificate of Compliance must be transmitted to OAL by 1-31-2026 or the language in the emergency order of 12-13-2021 (Register 2021, No. 51) will be repealed by operation of law on the following day (Register 2024, No. 41).

4. Certificate of Compliance as to 12-13-2021 order, including amendment of subsection (d), transmitted to OAL 6-25-2025 and filed 8-7-2025; operative 8-7-2025 pursuant to Government Code section 11343.4(b)(3) (Register 2025, No. 32).