Version: November 20, 2023
Indemnification. With respect to the RightSource compliance services:
a. First Year File Indemnity. Subject to the time period, the dollar limits, and the last sentence in this subsection (a), Yardi agrees to defend, indemnify and hold Client harmless from and against any third-party claims, actions or demands for First Year File Damages, provided that such First Year File Damages result from an unresolved tax credit agency audit finding on a First Year File for a specific unit at issue (the “Unit”), which further results in an IRS Form 8823 issuance on such Unit in which the outcome is a loss and/or recapture of tax credits. “First Year File Damages” means the amount of Client’s recaptured tax credit for such Unit, not to exceed $200,000.00. A “First Year File” is an initial or move-in certification completed for the Unit during the time beginning on the date the unit’s building is placed in service as noted on line 5 of IRS Form 8609, through the end of the first credit year based on the election taken on line 10 of the same IRS Form 8609. The foregoing indemnity shall not apply to First Year File Damages arising from: (i) incorrect information supplied by Client or the owner/agent, residents, or applicants; or (ii) an issuance of an IRS Form 8823 for noncompliance issues that do not directly relate to the RightSource compliance services rendered by Yardi to Client under the Agreement.
b. Subsequent Year File Indemnity. Subject to the time period, the dollar limits, and the last sentence in this subsection (b), Yardi agrees to defend, indemnify, and hold Client harmless from and against any third-party claims, actions or demands for Subsequent Year File Damages, provided that such Subsequent Year File Damages result from an unresolved tax credit agency audit finding on a Subsequent Year File for a Unit, which further results in an IRS Form 8823 issuance on such Unit in which the outcome is a loss and/or recapture of tax credits. “Subsequent Year File Damages” means the amount of Client’s recaptured tax credit for such Unit, not to exceed $10,000.00. A “Subsequent Year File” is any certification completed for the Unit after the LIHTC project’s First Year File as defined above. The foregoing indemnity shall not apply to Subsequent Year File Damages arising from: (i) incorrect information supplied by Client or the owner/agent, residents, or applicants; or (ii) an issuance of an IRS Form 8823 for noncompliance issues that do not directly relate to the services rendered by Yardi to Client under the Agreement.
c. Indemnity Conditions. Yardi’s defense and indemnification obligations per subsections (a) and (b), above, are conditioned upon the following: (i) Client providing Yardi with prompt written notice of any claim for which indemnification is sought; (ii) Yardi having sole control of the defense and settlement of such claim, provided, however, that Client shall have the right to have any suit or proceeding monitored by counsel of Client’s choice and at its expense; and (iii) Client’s reasonable cooperation with Yardi in the defense and settlement of the claim. Yardi’s maximum defense and indemnification obligations to Client under subsections (a) and (b) will be $1,000,000.
Additional Terms. With respect to the Yardi RightSource compliance services:
a. Core Yardi RightSource compliance services are available only for certifications effective on or after the first date Client may upload certification files into the Yardi RightSource compliance services database for the corresponding property (the “Property RightSource Go-Live Date”). Any certifications effective prior to the Property RightSource Go-Live Date can be reviewed under a separate compliance consulting agreement.
b. 24-hour review turn-around times for Yardi RightSource compliance services are limited to certification files effective on or after the date Client uploads the certification file into the Yardi RightSource compliance services database using Yardi RightSource compliance services forms. Yardi will use commercially reasonable efforts to provide 72-hour review turn-around times for Yardi RightSource compliance services apply for any certification file containing legacy Client compliance forms, or effective before the date Client submits the certification file.
c. Client agrees to complete transition to Yardi RightSource compliance services forms within 90 days of the Property RightSource Go-Live Date. Any certification file containing legacy Client compliance forms after the date that is 90 days from the Property RightSource Go-Live Date will be rejected without review.
d. Effective beginning on the thirteenth month of Yardi RightSource compliance services, core Yardi RightSource compliance services are limited to certifications effective within the then-preceding thirteen-month period. Client acknowledges and agrees that any certifications effective outside the thirteen-month ‘look-back’ period are not within the scope of this Agreement, and review of such certifications is subject to the parties’ mutual agreement to a separate compliance consulting agreement for such certifications.
e. Core Yardi RightSource compliance services file audits are limited to affordable program qualification requirements. As a result, core Yardi RightSource compliance services file audits exclude review of:
i. Screening results;
ii. Tenant selection plan eligibility;
iii. Pet policy;
iv. Move-in unit inspection and/or annual unit inspection;
v. Accuracy/legality of lease language;
vi. Any amounts or listing of non-rent and subsidy charges on lease;
vii. Lease dates;
viii. 90-day EIV report (after move-in); and
ix. Receipt of handbook/lease agreement form.
f. Upon expiration or termination of the RightSource compliance services, Client shall have the right to download/ transfer Client data uploaded or generated in connection with Client’s use of the RightSource compliance services (“RightSource Data”) for a period of 30 days; thereafter, Client acknowledges that Yardi shall not be responsible for retaining or otherwise storing Client’s RightSource Data. At any time prior to expiration or termination of the RightSource compliance services, upon written request from Client, Yardi will take commercially reasonable steps to assist Client in downloading/transferring Client’s RightSource Data.
Assumptions. With respect to the Yardi RightSource compliance services Yardi assumes:
a. Client executive management fully supports the Yardi RightSource compliance services project (the “Project”);
b. Client and Yardi RightSource compliance services will participate in the Project on a joint basis;
c. Client will make the Project executive sponsor, Project management team, and SME’s available on a timely basis for Project issue resolution and problem management;
d. Client corporate compliance is responsible for: (i) performing internal quality assurance audits of physical resident files; (ii) providing acute training to Client employees; (iii) serving as key stakeholder and vendor partner to the Yardi RightSource compliance services team; (iv) ongoing Yardi Voyager/compliance help desk resourcing to resolve ledger and Yardi Voyager functional issues for Client site staff; (v) performing compliance due diligence on potential new deals or acquisitions; (vi) maintaining strong agency relationships; and (vii) providing updates to Client executives on compliance operations;
e. Client is responsible for paying all fees for licensed RightSource services for a minimum of twelve months for all licensed properties unless said property has been sold or otherwise disposed and no longer owned or operated by the Client.
f. Client is responsible for calculating and correctly determining the appropriate utility allowance amounts by unit type (size). The Yardi RightSource compliance services team (upon Client’s request) may assist in performing a utility allowance analysis at Yardi’s then-current prevailing rate for such services. Yardi’s current prevailing rate for such services is $200.00/hour. A complete scoping of, and estimate for, any such work will be generated for any such work and, if accepted, will be memorialized in a separate statement of work prior to initiating such work;
g. Client will assign a dedicated project manager or liaison for the duration of the Project engagement;
h. A highly interactive, results‐driven effort to accomplish the Project objectives. Accordingly, Yardi assumes Yardi will have access to appropriate Client personnel within reasonable time frames for Project-related activities;
i. Project work, with the exception of on-site consulting will be performed remotely;
j. Client is using the Yardi Voyager affordable module to support ongoing operations for Client’s sites;
k. If annual reporting must be completed outside Yardi Voyager software, Yardi RightSource compliance services will bill Client for all report generation time at Yardi’s then-current prevailing rate for such services at the time they are performed. Yardi’s current prevailing hourly rate for such services is $200.00/hour. Yardi RightSource compliance services will also bill Client at its then-current prevailing rate (and the current prevailing rate is $200.00/hour) if data in Client’s property management system is incorrect and/or requires Yardi RightSource compliance services team members to manually edit the report(s) prior to submission to the agency. Yardi will track all such expended time and billed Client as incurred on Client’s next invoice; and
l. For purposes of RightSource compliance services for Clients also using Yardi Voyager: (i) “Unit” means any residential unit in a property owned, operated, or managed by Client; and (ii) Yardi will validate a total Unit count confirming the total Unit count in Client’s instances of Yardi Voyager database(s) and RightSource software database(s). If discrepancies exist, the Yardi RightSource compliance services team will resolve the discrepancy with Client key stakeholders and invoice Client in accord with that resolution.