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Guide for Completing Form 8823 - page 173 / 197





173 / 197

Example 1: Tenant Vacates Before End of the Lease

A couple vacates their unit before fulfilling their initial six-month lease because the husband accepted a job in another state. Because the couple was subject to a valid six-month lease and vacated the unit for a valid reason, the low-income unit was not used on a transient basis.

Out of Compliance

Other than the two exceptions for certain transitional housing and single room occupancy units, a unit is out of compliance if the unit is rented on a transient basis. The out of compliance date is the effective date of the initial tenant income certification. A unit is out of compliance if:

  • 1.

    no lease is on file for the tenant, or

  • 2.

    the tenant’s initial lease term is not at least six months.

Example 1: Month-to-Month Initial Leases

A state agency discovers that an owner of a 100 unit LIHC property (not a SRO or transitional housing) established a policy of signing month-to-month leases at the time of initial occupancy.

At the time of the review, 84 units are occupied by households with initial month-to-month leases. All 84 units are out of compliance based on the effective date of the initial tenant income certification.

Back in Compliance

Noncompliance is corrected when a lease with a term of at least six months is executed. The correction date is the effective date of the new lease.


Revised October 2009

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