How to Handle Residents Who Obstruct Fire Exits and Jeopardize Tax Credits

As a site owner or manager, you must check the common areas of your tax credit site regularly for safety hazards. If you find problems, you must immediately correct them, or risk legal liability for any potential injuries to residents, their guests, or visitors to the site. You may encounter items such as bicycles, brooms, buckets, and large plants on fire escapes or other means of egress in an emergency. Items may block public hallways, stairwells, and other common areas with such items as old furniture or baby carriages.

These items can create a fire or safety hazard and violate the local fire code or other local laws by preventing a safe and quick escape from the building if there’s a fire or other emergency. If your state housing agency auditor finds these obstructions, you’ll be reported to the IRS for noncompliance with tax credit rules. As a result, the owner may suffer recapture of the tax credits on the site, in addition to local fines and possible lawsuits by anyone injured because of these obstructions. So it’s important to take steps to keep common areas free of obstructions.

To make it clear to residents that you won’t let them obstruct the common areas with their property, we’ll give you a Model House Rule: Bar Residents from Keeping Items in Common Areas, which you can adapt and use right away to tell residents that they can’t leave any items in the common areas. This rule also gives you the right to remove items that residents have left in common areas. We’ve also put together Model Letters: Warn Residents to Remove Items from Common Areas, which you can send to residents who leave items in common areas.

IRS Bars Fire Exit Obstructions

States can and do report owners to the IRS for violations such as fire exit obstructions. The tax credit law requires that owners comply with local health, safety, and building codes [IRC Sec. 42(i)(3)(B)(ii)]. IRS Form 8823, Low Income Housing Credit Agencies Report of Noncompliance or Building Disposition, states that blockage of fire exits is a “major violation” of health, safety, and building codes. If your state agency finds such a violation at your site, it must report you to the IRS, even if you immediately correct the violation. Then it’s left in the hands of the IRS to decide if it will recapture the owner’s tax credits on the site.

What’s more, the owner of your site must certify annually to your state agency that your site is suitable for occupancy, taking into account local health, safety, and building codes. And besides the threats to the tax credits, your local fire or building inspector may hit you with a fine for obstructions in common areas that threaten the safety of another person. So you need to become vigilant about the physical conditions at your site and take action to remove common area obstructions.

Set House Rule for Common Areas

The fastest and easiest way to get your residents to clear obstructions of fire exits and other common areas is to establish a house rule barring residents from leaving items in the common areas. If your lease doesn’t go into detail about barring residents from obstructing common areas, you can use a house rule like ours to communicate this to residents. Like our Model House Rule, yours should:

List banned items and define common areas. Your rule should state that residents can’t place, store, or leave items in common areas. To avoid misunderstandings, list specific items that you want banned, such as bicycles, strollers, toys, and shopping carts. Also include a general ban on “any other items.” And you should identify which parts of the site are common areas.

Warn that management may remove items. To show residents that you’re serious about enforcement, your rule should state that you may remove items that a resident leaves in common areas. It should also state that you may charge residents your costs for removing and storing items.

Start with Oral Warning

A resident may complain to you that other residents are leaving items in common areas. You should also ask your site staff to be on the lookout for common area obstructions.

If you get complaints or your site staff spots an item in a hallway or stairway, you should first try to find out who owns the item. This may be obvious if the item is sitting right outside a resident’s unit. Staffers or other residents may recognize the item and tell you to whom it belongs. If necessary, have someone on your staff go door-to-door to residents of nearby units.

If you identify the owner of the item, have your staffers call or visit the resident and ask him or her to remove it. If the resident doesn’t respond to your request and the item is small and easy to remove such as a child’s toy, have your staffers immediately remove it before an accident occurs. Also, have your staffers remove any item whose owner you can’t identify, even if the item is large and difficult to handle. And if you do remove items from a common area, be sure to keep them in a safe place. If an item is stolen or damaged while in your possession, the resident could hold you responsible.

Send Warning Letters if Resident Doesn’t Remove Unwieldy Items

Suppose you identify the owner of an item, but the owner doesn’t remove it or can’t be reached, and the item can’t be easily removed. For instance, a resident might have left old furniture in front of a fire exit door or chained a bike or stroller to a stairway railing. Give the resident written warnings before you remove the items yourself.

Give polite warning. Start with a polite warning letter. Explain that despite your oral warning (or because you haven’t been able to contact the resident), the resident hasn’t removed the item. Point out that this violates a house rule barring residents from leaving items in common areas. Also, tell the resident about any local laws, such as the fire code, as well as federal tax credit regulations, both of which prohibit blockage of fire exits and other common areas. Ask the resident to remove the item immediately. And remind the resident that the house rule lets you remove obstructions from common areas.

Get tough if necessary. If your polite letter doesn’t work, you must get tougher. Before you remove the item yourself, give the resident a warning letter that offers her a last chance to obey the house rule. Like our Model Letter, yours should:

• Specify the house rule and the section of any local law and the Internal Revenue Code that the resident has violated;
• Point out the dangers of leaving the item in the common area—for example, that it creates a fire hazard;
• Warn the resident that she’s jeopardizing the tax credit status of the building;
• Tell the resident that you’ll remove the item on the following day if she doesn’t remove it by then; and
• Remind the resident that repeated violations of the house rule can lead to her eviction.

You should prepare for eviction even if you don’t anticipate the situation coming to that. To document the violations, take photos of residents’ items in the common areas while the items are still there. Save the pictures along with copies of your warning letters. You should also prepare and save memos about any personal visits or phone calls asking residents to remove their belongings.

Evict for Repeated Violations

If a resident is creating safety risks and repeatedly violating your common area rules, and doesn’t respond to your oral warnings or letters, discuss eviction with your attorney. For example, you should consider eviction if you had to remove old furniture that a resident had left in a hallway and you later discover that the same resident is leaving large, full cartons there. Likewise, if the resident leaves garbage cans or other items that attract rodents in common areas and doesn’t remove them when asked, you could have a good case for eviction. In court, you can use the letters, the record of phone calls or visits, and the photos to prove a resident’s violations.