§ 1731b. — Prohibition against transient housing.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1731b]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER V--MISCELLANEOUS
Sec. 1731b. Prohibition against transient housing
(a) Intent of Congress
The Congress declares that it has been its intent since the
enactment of this chapter that housing built with the aid of mortgages
insured under this chapter is to be used principally for residential
use; and that this intent excludes the use of such housing for transient
or hotel purposes while such insurance on the mortgage remains
outstanding.
(b) Exceptions to prohibition
Notwithstanding any other provisions of this chapter, no new,
existing, or rehabilitated multifamily housing with respect to which a
mortgage is insured under this chapter shall be operated for transient
or hotel purposes unless (1) on or before May 28, 1954, the Secretary
has agreed in writing to the rental of all or a portion of the
accommodations in the project for transient or hotel purposes (in which
case no accommodations in excess of the number so agreed to by the
Secretary shall be rented on such basis), or (2) the project covered by
the insured mortgage is located in an area which the Secretary
determines to be a resort area, and the Secretary finds that prior to
May 28, 1954, a portion of the accommodations in the project had been
made available for rent for transient or hotel purposes (in which case
no accommodations in excess of the number which had been made available
for such use shall be rented on such basis).
(c) Certification as to use as requisite for insurance; exceptions to
prohibition against insuring
Notwithstanding any other provisions of this chapter, no mortgage
with respect to multifamily housing shall be insured under this chapter
(except pursuant to a commitment to insure issued prior to August 2,
1954), and (except as to housing coming within the provisions of clause
(1) or clause (2) of subsection (b) of this section) no mortgage with
respect to multifamily housing shall be insured for an additional term,
unless (1) the mortgagor certifies under oath that while such insurance
remains outstanding he will not rent, or permit the rental of, such
housing or any part thereof for transient or hotel purposes, and (2) the
Secretary has entered into such contract with, or purchased such stock
of, the mortgagor as the Secretary deems necessary to enable him to
prevent or terminate any use of such property or project for transient
or hotel purposes while the mortgage insurance remains outstanding.
(d) Enforcement by Secretary
The Secretary is authorized and directed to enforce the provisions
of this section by all appropriate means at his disposal, as to all
existing multifamily housing with respect to which a mortgage was
insured under this chapter prior to August 2, 1954, as well as to all
multifamily housing with respect to which a mortgage is hereafter
insured under this chapter: Provided, That no criminal penalty shall, by
reason of enactment of this section, be applicable to the rental or
operation of any such existing multifamily housing in violation of any
provision of subsection (b) of this section at any time prior to August
2, 1954.
(e) Definitions
As used in this section, (1) the term ``rental for transient or
hotel purposes'' shall have such meaning as prescribed by the Secretary
but rental for any period less than thirty days shall in any event
constitute rental for such purposes, and (2) the term ``multifamily
housing'' shall mean (i) a property held by a mortgagor upon which there
are located five or more single family dwellings, or upon which there is
located a two-, three-, or four-family dwelling, or (ii) a property or
project covered by mortgage insured or to be insured under section 1713
of this title, under section 1715e of this title with respect to any
property or project of a corporation or trust of the character described
in paragraph (1) of subsection (a) thereof, under section 1715k of this
title if the mortgage is within the provisions of paragraph (3) (B) of
subsection (d) thereof, under section 1715l of this title if the
mortgage is within the provisions of paragraph (3) of subsection (d)
thereof, under section 1743, 1748b, or 1750g of this title, or (iii) a
project with respect to which an insurance contract pursuant to
subchapter VII of this chapter is outstanding.
(f) Investigation after notice of violation; cease order
Promptly after receipt of written notice that any portion of any
building is being rented or operated in violation of any provision of
this section or of any rule or regulation lawfully issued thereunder,
the Secretary shall investigate the existence of the facts alleged in
the written notice and shall order such violation, if found to exist, to
cease forthwith.
(g) Prosecution by Attorney General for continued violation
If such violation does not cease in accordance with such order, the
Secretary shall forward the complaint to the Attorney General of the
United States for prosecution of such civil or criminal action, if any,
which the Attorney General may find to be involved in such violation.
(h) Judicial procedure for injunction or other order
Whenever he finds a violation of any provision of this section has
occurred or is about to occur, the Attorney General shall petition the
district court of the United States or the district court of any
Territory or other place subject to United States jurisdiction within
whose jurisdictional limits the person doing or committing the acts or
practices constituting the alleged violation of this section shall be
found, for an order enjoining such acts or practices, and upon a showing
by the Attorney General that such acts or practices constituting such
violation have been engaged in or are about to be engaged in, a
permanent or temporary injunction, restraining order, or other order,
with or without such injunction or restraining order, shall be granted
without bond.
(i) Injunctive relief for hotel owners
Any person owning or operating a hotel within a radius of fifty
miles of a place where a violation of any provision of this section has
occurred or is about to occur, or any group or association of hotel
owners or operators within said fifty-mile radius, at his or their sole
charge or cost, may petition any district court of the United States or
the district court or any Territory or other place subject to United
States jurisdiction within whose jurisdictional limits the person doing
or committing the acts or practices constituting the alleged violation
of this section shall be found, for an order enjoining such acts or
practices, and, upon a showing that such acts or practices constituting
such violation have been engaged in or are about to be engaged in, a
permanent or temporary injunction, restraining order, or other order,
with or without such injunction or restraining order, shall be granted.
(j) Jurisdiction of district courts
The several district courts of the United States and the several
district courts of the Territories of the United States or other place
subject to United States jurisdiction, within whose jurisdictional
limits the person doing or committing the acts or practices constituting
the alleged violation shall be found, shall, wheresoever such acts or
practices may have been done or committed, have full power and
jurisdiction to hear, try, and determine such matter under subsections
(h) and (i) of this section.
(June 27, 1934, ch. 847, title V, Sec. 513, as added Aug. 2, 1954, ch.
649, title I, Sec. 132, 68 Stat. 610; amended Pub. L. 90-19,
Sec. 1(a)(3), May 25, 1967, 81 Stat. 17; Pub. L. 98-479, title II,
Sec. 204(a)(18), Oct. 17, 1984, 98 Stat. 2232.)
Prior Provisions
A prior section 513 of act June 27, 1934, was renumbered section
513A of act June 27, 1934, and is classified to section 1732 of this
title.
Amendments
1984--Pub. L. 98-479 substituted ``Prohibition against transient
housing'' for ``Prohibition against use of insured multifamily housing
for transient or hotel purposes'' in section catchline.
1967--Pub. L. 90-19 substituted ``Secretary'' for ``Commissioner''
wherever appearing in subsecs. (b) to (d), (e)(1), (f), and (g).
