OAR 309-037-0220: Declaration of Restrictive Covenants

The purpose of this rule is to establish requirements for Declarations of Restrictive Covenants (DRCs) to ensure that Behavioral Health Facilities and Community-Based Structured Housing funded with public resources remain dedicated and available for their intended public use. Declarations of Restrictive Covenants protect long-term public investment in Behavioral Health Facilities and Community-Based Structured Housing by ensuring continued availability and access. (1) The requirement for a Declaration of Restrictive Covenants applies to all Grantees receiving OHA funding for the acquisition, construction, and/or renovation of real property for the development of Behavioral Health Facilities and Community-Based Structured Housing and, depending on the amount of OHA funding, imposes a use restriction from five (5) to twenty (20) years as described in this division. This does not apply if a recipient of the funding is a federally recognized tribe and the capital development project is on tribal land, or the land or building is owned or being purchased by the tribe. (2) Duration of the Declaration of Restrictive Covenants. The use restriction period set forth in a Declaration of Restrictive Covenants is based on the total amount of OHA funding as follows: (a) A Behavioral Health Facility or Community-Based Structured Housing with OHA funding in the amount of $0 to $499,999.99 requires a use restriction for a period of five (5) years. (b) A Behavioral Health Facility or Community-Based Structured Housing with OHA funding in the amount of $500,000.00 to $1,499,999.99 requires a use restriction for a period of ten (10) years. (c) A Behavioral Health Facility or Community-Based Structured Housing with OHA funding in the amount of $1,500,000.00 to $3,999,999.99 requires a use restriction for a period of fifteen (15) years. (d) A Behavioral Health Facility or Community-Based Structured Housing with OHA funding in the amount of $4,000,000.00 or more requires a use restriction for a period of twenty (20) years. (3) Requirement to Record a Declaration of Restrictive Covenants (a) All Grantees receiving OHA funds for acquisition, construction, or renovation must execute a Declaration of Restrictive Covenants. (b) The Grantee is responsible for all recording fees. (c) The Declaration of Restrictive Covenants must be recorded in the real property records of the county in which the property is located before any capital improvement work commences on the property. (4) Compliance and Monitoring (a) Grantees must comply with and operate the property in accordance with the recorded Declaration of Restrictive Covenants for the duration of the use restriction period. (b) Annual reporting will be required for the duration of the use restriction period. (c) OHA may conduct monitoring to verify compliance, including review of facility operations, service capacity, population served, or program outputs. (d) Grantees must notify OHA prior to any transfer, sale, or refinancing of the property. (e) Regardless of any such sale or transfer, the use restriction is binding on successors and assigns in accordance with the terms of the Declaration of Restrictive Covenants.