Internal Revenue Code Section 42 and state statutes require CTCAC to monitor compliance throughout the entire term of the project’s regulatory period. CTCAC is required to monitor projects after they have been “placed-in-service” and every three years thereafter during the year federal credit compliance period and every five years for the remaining term of the regulatory agreement.
CTCAC’s compliance monitoring program includes determining, among other requirements, whether the income of families residing in lower-income units and the rents they are charged are within agreed upon limits stated in the regulatory agreement and inspecting units and buildings in each development to ensure they are in safe, sanitary, and habitable condition. Project owners are also required to report complete and accurate project information to CTCAC annually. All non-compliance to federal requirements or reporting failures during the federal credit compliance period, whether corrected or not, is required to be reported to the Internal Revenue Service. Thereafter, and for violations of state requirements that exceed federal standards, CTCAC may issue negative points to owners, levy fines, or pursue legal action.