COS Real Estate Law & Regulations 3 — Questions and Answers
Question 1: Under the Low-Income Housing Tax Credit (LIHTC) program, what is the minimum percentage of units that must be rent-restricted and occupied by qualifying households under the 20-50 test?
- 20% at 50% AMI (Correct answer)
- 40% at 60% AMI
- 25% at 50% AMI
- 30% at 80% AMI
Correct answer: 20% at 50% AMI
The 20-50 test requires that at least 20% of units be rent-restricted and occupied by households at or below 50% of Area Median Income.
Question 2: A landlord refuses to rent to a prospective tenant because she has three young children. Under the Fair Housing Act, this is:
- Illegal discrimination based on familial status (Correct answer)
- Legal if the complex is designated for adults only
- Legal if the unit has fewer than two bedrooms
- Subject only to state law, not federal law
Correct answer: Illegal discrimination based on familial status
The Fair Housing Act prohibits discrimination based on familial status, which includes families with children under 18, making such a refusal illegal unless the property qualifies as housing for older persons.
Question 3: Which federal law governs the disclosure of lead-based paint hazards in housing built before 1978?
- Residential Lead-Based Paint Hazard Reduction Act (Title X) (Correct answer)
- Toxic Substances Control Act
- Safe Drinking Water Act
- Resource Conservation and Recovery Act
Correct answer: Residential Lead-Based Paint Hazard Reduction Act (Title X)
Title X of the Housing and Community Development Act of 1992 requires disclosure of known lead-based paint hazards in pre-1978 housing before sale or lease.
Question 4: Under the Uniform Residential Landlord and Tenant Act (URLTA), a landlord's failure to maintain habitable conditions generally gives a tenant the right to:
- Withhold rent or repair-and-deduct (Correct answer)
- Immediately vacate without notice
- Sue for punitive damages only
- Transfer the lease to another party
Correct answer: Withhold rent or repair-and-deduct
URLTA provides tenants remedies such as withholding rent or making repairs themselves and deducting the cost when a landlord fails to maintain habitable conditions.
Question 5: A property subject to a HUD regulatory agreement is required to maintain an annual financial audit if its project has:
- Federal expenditures exceeding $750,000 (Correct answer)
- More than 50 units
- Any Section 8 contract
- Debt issued after 1990
Correct answer: Federal expenditures exceeding $750,000
Under the Single Audit Act, entities expending $750,000 or more in federal awards in a fiscal year must obtain an annual single audit.
Question 6: The Americans with Disabilities Act (ADA) Title III applies to housing in which specific context?
- Common areas open to the public such as leasing offices (Correct answer)
- All residential units in a multifamily complex
- Only new construction after 1992
- Federally assisted housing only
Correct answer: Common areas open to the public such as leasing offices
ADA Title III covers places of public accommodation, including leasing offices and common areas open to the public, but does not apply to the residential units themselves.
Question 7: In a tax credit (LIHTC) property, what is the consequence of a unit becoming over-income after initial qualification?
- The next available comparable unit must be rented to an income-qualified household (Correct answer)
- The tenant must be immediately evicted
- The tax credits for the entire project are recaptured
- The unit is removed from the qualified basis permanently
Correct answer: The next available comparable unit must be rented to an income-qualified household
Under the available unit rule, when a tax credit unit's occupant becomes over-income, the next available comparable unit must be leased to a qualified resident to maintain compliance.
COS Real Estate Law & Regulations 3
Under the Low-Income Housing Tax Credit (LIHTC) program, what is the minimum percentage of units that must be rent-restricted and occupied by qualifying households under the 20-50 test?