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Owner's Certification

Mar 28, 2017 12:23PM MDT

What is the general rule for how many owners/members must sign the Owner's Certification? For example, we have projects operating as LLCs that are taxed as partnerships. Does it matter how they are taxed for purposes of the Owner's Certification (i.e. general partner only) or only that the project is operating as a LLC?

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Les Sparks AHACPA Mar 28, 2017

Lee, for most LLC we have received this year only the managing member signed. So, there are not always two signatories. Here are the actual requirements from HUD Handbook 4370.2

3-7. MORTGAGOR’S CERTIFICATION.
A. The annual financial report shall include: (1) a
certification by the mortgagor, when the project is
owned by an individual; (2) by two or more partners
(including at least two general partners if there are two
or more general partners), when it is owned by a limited
partnership; (3) by two officers one of which must be
the president of the corporation, when it is owned by a
corporation; (4) all joint venturers or partners, when the
project is a general partnership; or (5) trustee and
appropriate beneficiaries, when it is owned by a trust.

Now how that relates to you specific question is not exactly clear. I can only say that most LLCs report one managing member.

I did find another reference from the Financial Reporting and Auditng Guide (FRAG)

Owners’ Certification – include the following certification language:
“I/we hereby certify that I/we have examined the accompanying financial
statements and supplemental data of (mortgagor’s name) and, to the best of
my/our knowledge and belief, the same is complete and accurate.”
Include the name(s) of the individual certifying to the accuracy of the
financial information based on the following criteria:

  • Certification by the mortgagor, when an individual owns the property.
  • Certification by two or more partners (including at least two general
    partners if there are two or more general partners), when a limited
    partnership owns the property.
  • Certification by two officers, one of which must be the president of the
    corporation, when a corporation owns it.
  • Certification by one member, when a limited liability company or a
    limited liability partnership owns the property.
  • Certification by all joint ventures or partners, when a general partnership
    owns the property.
  • Certification by the trustee and appropriate beneficiaries when the
    property is owned by a trust.

I hope this helps.

Les

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