§ 1715z-4a. — Double damages remedy for unauthorized use of multifamily housing project assets and income.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1715z-4a]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1715z-4a. Double damages remedy for unauthorized use of
multifamily housing project assets and income
(a) Action to recover assets or income
(1) The Secretary of Housing and Urban Development (referred to in
this section as the ``Secretary'') may request the Attorney General to
bring an action in a United States district court to recover any assets
or income used by any person in violation of (A) a regulatory agreement
that applies to a multifamily project whose mortgage is insured or held
by the Secretary under title II of the National Housing Act [12 U.S.C.
1707 et seq.]; (B) a regulatory agreement that applies to a multifamily
project whose mortgage is insured or held by the Secretary under section
1701q of this title (including property subject to section 1701q of this
title as it existed before November 28, 1990); (C) a regulatory
agreement or such other form of regulatory control as may be imposed by
the Secretary that applies to mortgages insured or held by the Secretary
under section 1715z-22 of this title, but not reinsured under section
1715z-22 of this title; or (D) any applicable regulation. For purposes
of this section, a use of assets or income in violation of the
regulatory agreement, or such other form of regulatory control as may be
imposed by the Secretary, or any applicable regulation shall include any
use for which the documentation in the books and accounts does not
establish that the use was made for a reasonable operating expense or
necessary repair of the project and has not been maintained in
accordance with the requirements of the Secretary and in reasonable
condition for proper audit.
(2) For purposes of a mortgage insured or held by the Secretary
under title II of the National Housing Act [12 U.S.C. 1707 et seq.],
under section 1701q of this title (including section 1701q of this title
as it existed before November 28, 1990) and under section 1715z-22 of
this title, the term ``any person'' shall mean any person or entity
which owns a project, as identified in the regulatory agreement,
including but not limited to any stockholder holding 25 percent or more
interest of a corporation that owns the project; any beneficial owner
under any business or trust; any officer, director, or partner of an
entity owning the project; and any heir, assignee, successor in
interest, or agent of any owner.
(b) Initiation of proceedings and temporary relief
The Attorney General, upon request of the Secretary, shall have the
exclusive authority to authorize the initiation of proceedings under
this section. Pending final resolution of any action under this section,
the court may grant appropriate temporary or preliminary relief,
including restraining orders, injunctions, and acceptance of
satisfactory performance bonds, to protect the interests of the
Secretary and to prevent use of assets or income in violation of the
regulatory agreement, or such other form of regulatory control as may be
imposed by the Secretary, and any applicable regulation and to prevent
loss of value of the realty and personalty involved.
(c) Amount recoverable
In any judgment favorable to the United States entered under this
section, the Attorney General may recover double the value of the assets
and income of the project that the court determines to have been used in
violation of the regulatory agreement, or such other form of regulatory
control as may be imposed by the Secretary, or any applicable
regulation, plus all costs relating to the action, including but not
limited to reasonable attorney and auditing fees. Notwithstanding any
other provision of law, the Secretary may apply the recovery, or any
portion of the recovery, to the project or to the applicable insurance
fund under the National Housing Act [12 U.S.C. 1701 et seq.] or, in the
case of any project for which the mortgage is held by the Secretary
under section 1701q of this title (including property subject to section
1701q of this title as it existed before November 28, 1990), to the
project or to the Department for use by the appropriate office within
the Department for administrative costs related to enforcement of the
requirements of the various programs administered by the Secretary, as
appropriate.
(d) Time limitation
Notwithstanding any other statute of limitations, the Secretary may
request the Attorney General to bring an action under this section at
any time up to and including 6 years after the latest date that the
Secretary discovers any use of project assets and income in violation of
the regulatory agreement, or such other form of regulatory control as
may be imposed by the Secretary, or any applicable regulation.
(e) Continued availability of other remedies
The remedy provided by this section is in addition to any other
remedies available to the Secretary or the United States.
(Pub. L. 100-242, title IV, Sec. 421, Feb. 5, 1988, 101 Stat. 1913; Pub.
L. 105-65, title V, Sec. 563, Oct. 27, 1997, 111 Stat. 1419.)
References in Text
The National Housing Act, referred to in subsecs. (a) and (c), is
act June 27, 1934, ch. 847, 48 Stat. 1246, as amended, which is
classified principally to this chapter (Sec. 1701 et seq.). Title II of
the National Housing Act is classified generally to this subchapter
(Sec. 1707 et seq.). For complete classification of this Act to the
Code, see section 1701 of this title and Tables.
Codification
Section was enacted as part of the Housing and Community Development
Act of 1987, and not as part of the National Housing Act which comprises
this chapter.
Amendments
1997--Subsec. (a)(1). Pub. L. 105-65, Sec. 563(1), substituted ``(B)
a regulatory agreement that applies to a multifamily project whose
mortgage is insured or held by the Secretary under section 1701q of this
title (including property subject to section 1701q of this title as it
existed before November 28, 1990); (C) a regulatory agreement or such
other form of regulatory control as may be imposed by the Secretary that
applies to mortgages insured or held by the Secretary under section 542
of the Housing and Community Development Act of 1992, but not reinsured
under section 542 of the Housing and Community Development Act of 1992;
or (D)'' for ``or (B)'' in first sentence and inserted ``, or such other
form of regulatory control as may be imposed by the Secretary,'' after
``regulatory agreement'' in second sentence.
Subsec. (a)(2). Pub. L. 105-65, Sec. 563(2), inserted ``under
section 1701q of this title (including section 1701q of this title as it
existed before November 28, 1990) and under section 542 of the Housing
and Community Development Act of 1992,'' after ``title II of National
Housing Act,''.
Subsec. (b). Pub. L. 105-65, Sec. 563(3), inserted ``, or such other
form of regulatory control as may be imposed by the Secretary,'' after
``regulatory agreement''.
Subsec. (c). Pub. L. 105-65, Sec. 563(4), in first sentence,
inserted ``, or such other form of regulatory control as may be imposed
by the Secretary,'' after ``regulatory agreement'' and inserted before
period at end of second sentence ``or, in the case of any project for
which the mortgage is held by the Secretary under section 1701q of this
title (including property subject to section 1701q of this title as it
existed before November 28, 1990), to the project or to the Department
for use by the appropriate office within the Department for
administrative costs related to enforcement of the requirements of the
various programs administered by the Secretary, as appropriate''.
Subsec. (d). Pub. L. 105-65, Sec. 563(5), inserted ``, or such other
form of regulatory control as may be imposed by the Secretary,'' after
``regulatory agreement''.
