Repeal of 12 U.S.C. § 1441a Does Not Terminate RTC Affordable-Housing Contracts: Eleventh Circuit Confirms FDIC and Its Agents Can Enforce RTC Agreements by Contract and Under 12 U.S.C. § 1831q(n)(4)

Repeal of 12 U.S.C. § 1441a Does Not Terminate RTC Affordable-Housing Contracts: Eleventh Circuit Confirms FDIC and Its Agents Can Enforce RTC Agreements by Contract and Under 12 U.S.C. § 1831q(n)(4)

Introduction

In a published decision with significant implications for legacy affordable-housing deals born of the savings-and-loan crisis, the Eleventh Circuit held that the 2010 repeal of 12 U.S.C. § 1441a (the statute that created the Resolution Trust Corporation, or RTC) did not extinguish a purchaser’s contractual obligations under a 1994 affordable-housing agreement. The court affirmed that the Federal Deposit Insurance Corporation (FDIC)—as manager of the FSLIC Resolution Fund and successor to the RTC’s “remaining authority and responsibilities”—and its private monitoring agent, Affordable Housing Group, Inc. (AHG), can enforce those obligations both by contract and under 12 U.S.C. § 1831q(n)(4).

The case stems from a 1994 transaction in which Florida Housing Affordability, Inc. (Florida Housing), a nonprofit, acquired a 192‑unit complex at a steep discount from the RTC in exchange for a promise to maintain rent and occupancy restrictions for 40 years. After years of compliance, Florida Housing ceased reporting and paying administrative fees, and then took the broader position that its rent and occupancy obligations no longer bound it following Congress’s repeal of § 1441a. The district court rejected that contention and dismissed Florida Housing’s counterclaim seeking declaratory and injunctive relief. The Eleventh Circuit affirmed.

Parties: - Plaintiff-Counter Defendant-Appellee: Affordable Housing Group, Inc. (AHG), FDIC’s monitoring agent. - Defendant-Counter Claimant-Appellant: Florida Housing Affordability, Inc. - Counter Defendant-Appellee: Federal Deposit Insurance Corporation (FDIC), as manager of the FSLIC Resolution Fund, successor in interest to the RTC.

Summary of the Opinion

The Eleventh Circuit held:

  • The 1994 Agreement’s plain terms control. Florida Housing expressly agreed to 40 years of rent and occupancy restrictions and to judicial enforcement by the RTC “or the Agency” (defined to include successor government entities like the FDIC and their agents). Those obligations do not depend on § 1441a’s continued existence.
  • The Agreement’s “change in federal law” escape clause—terminating the agreement if a change in law “prevents RTC or the Agency from enforcing this Agreement”—was not triggered by the repeal of § 1441a because the FDIC still has the authority to enforce the Agreement. The Agreement itself independently confers that enforcement authority, and federal law (12 U.S.C. § 1831q(n)(4)) separately preserves it.
  • Recitals referencing § 1441a(c) do not transform statutory repeal into a termination of contractual obligations. Recitals are not operative commitments, and the operative provisions nowhere condition the term or obligations on § 1441a’s ongoing existence.
  • Even apart from the contract, Congress vested the FDIC with authority to carry out the RTC’s “remaining authority and responsibilities” (12 U.S.C. § 1831q(n)(4)), and that statute remains in force notwithstanding the later repeal of § 1441a.
  • Florida Housing’s new contention at oral argument—that the FDIC lacks authority to enforce these agreements—was not considered because it was raised for the first time at oral argument.
  • Result: Affirmed. Florida Housing’s counterclaim failed to state a claim and was properly dismissed with prejudice.

Analysis

1) Precedents and Authorities Cited

The court’s reasoning is grounded in well-settled principles of contract interpretation, enforcement, and statutory construction:

  • Belize Telecom, Ltd. v. Government of Belize, 528 F.3d 1298, 1307 (11th Cir. 2008) and Hamilton Construction Co. v. Board of Public Instruction of Dade County, 65 So. 2d 729, 731 (Fla. 1953): Courts begin and end with the contract’s plain language when clear and unambiguous. The panel leveraged these to reject Florida Housing’s effort to graft a statutory dependency onto obligations that the contract itself does not state.
  • Rose v. M/V Gulf Stream Falcon, 186 F.3d 1345, 1350 (11th Cir. 1999) and Barseback Kraft AB v. United States, 121 F.3d 1475, 1481 (Fed. Cir. 1997): Prefatory clauses and recitals generally “express only desires, not binding commitments.” The court cited these to diminish the legal force of the Agreement’s Recitals referencing § 1441a(c).
  • Allen v. USAA Casualty Insurance Co., 790 F.3d 1274, 1283 (11th Cir. 2015): Courts enforce contracts as written unless a statute expressly says otherwise. This reinforced the panel’s refusal to rewrite the parties’ obligations or to infer an unstated statutory condition.
  • Ernie Haire Ford, Inc. v. Ford Motor Co., 260 F.3d 1285, 1290 (11th Cir. 2001) and Mergens v. Dreyfoos, 166 F.3d 1114, 1117 (11th Cir. 1999): Courts are “powerless to rewrite” clear and unambiguous contracts to make them more advantageous for one party—applied to reject Florida Housing’s invitation to recast the Agreement’s enforcement and term provisions.
  • Hernandez v. Plastipak Packaging, Inc., 15 F.4th 1321, 1330 (11th Cir. 2021): Arguments raised for the first time at oral argument come too late. The court invoked this to decline Florida Housing’s new, more sweeping challenge to FDIC authority.
  • In re Griffith, 206 F.3d 1389, 1393 (11th Cir. 2000) (en banc): Courts disfavor interpretations that render statutory language superfluous. This supported reading 12 U.S.C. § 1831q(n)(4) as a continuing source of FDIC authority even after § 1441a’s repeal.
  • Miles v. Apex Marine Corp., 498 U.S. 19, 32 (1990): Congress is presumed to be aware of existing law when legislating. The panel used this presumption to reject the idea that Congress repealed § 1441a oblivious to the ongoing function of § 1831q(n)(4).

2) The Court’s Legal Reasoning

The opinion proceeds in two reinforcing steps: contractual interpretation and statutory authority.

Contractual interpretation:

  • Operative clauses govern; recitals do not. The Agreement’s operative provisions—Article II (occupancy), Article III (rent), and Article VI (enforcement)—contain no condition tying Florida Housing’s obligations to § 1441a’s survival. Recitals mention § 1441a(c), but recitals are not binding. Moreover, even the Recitals describe compliance “for the remaining useful life of the Property,” not “for so long as § 1441a(c) remains on the books.”
  • Term is fixed. The Agreement defines the Term as the later of 40 or 50 years depending on the property’s occupancy history; the parties agreed that the applicable term is 40 years, ending in 2034. The court enforces that term as written.
  • Express enforcement authority. Article VI § 6.1(a) authorizes “RTC or the Agency” to seek specific performance, injunction, a receiver, or other appropriate relief upon default. “Agency” is defined to include the FDIC and, by extension in this case, AHG as FDIC’s monitoring agent. This is a clear, contract-based path to judicial enforcement independent of any now‑repealed statute.
  • “Change in law” clause is not triggered. The escape clause ends the agreement upon a change in federal law “which prevents RTC or the Agency from enforcing this Agreement.” The court holds repeal of § 1441a did not “prevent” enforcement because: (a) the Agreement confers enforcement authority on the FDIC/AHG by its own terms; and (b) federal law still vests the FDIC with authority to carry out RTC responsibilities. In short, the “prevents enforcement” condition is not met.
  • Dead-end definition does not help. The Agreement defines “Act” as § 1441a (or successors), but the term “Act” never appears in any operative clause. The court characterizes this as a “dead end” that provides no support for Florida Housing’s theory.

Statutory authority:

  • Congress planned the wind-down. The RTC was temporary. In the 1993 Resolution Trust Corporation Completion Act, Congress directed that the RTC’s “remaining authority and responsibilities” would be carried out by the FDIC. Congress also amended the Federal Deposit Insurance Act to say the FDIC “shall carry out” those responsibilities “as set forth in section 1441a(c).” See 12 U.S.C. § 1831q(n)(4).
  • Section 1831q(n)(4) remains in force. Although Congress repealed § 1441a in 2010, it did not disturb § 1831q(n)(4). Reading § 1831q(n)(4) as void because it cross-references a repealed statute would make § 1831q(n)(4) meaningless and violate the anti-superfluity canon. The better reading: § 1831q(n)(4) continues to authorize the FDIC to carry out whatever obligations and rights the RTC left behind, including enforcement of affordable-housing agreements the RTC executed.
  • Contract and statute align. The Agreement itself authorizes FDIC/AHG enforcement; § 1831q(n)(4) independently vests the FDIC with the responsibility and authority to do so. Either basis suffices; together they are decisive.

3) Impact and Implications

This published Eleventh Circuit decision cements several practical rules for federal affordable-housing agreements that originated with the RTC and for legacy federal contracts more generally:

  • Legacy RTC affordable-housing obligations remain enforceable. Owners who acquired properties at discounted prices in exchange for long-term affordability covenants cannot exit those obligations based solely on § 1441a’s repeal. The obligations run for the contract term unless a qualifying “change in law” truly prevents enforcement.
  • Private monitoring agents can sue. Where the contract authorizes enforcement by the RTC “or the Agency,” third-party monitors engaged by the FDIC (like AHG) can pursue contractual remedies in court.
  • Contract drafting matters: recitals vs. operative clauses. Courts will not elevate recitals or background statements over detailed operative provisions. If a party intends an obligation to be contingent on a statute’s continuing existence, that contingency must be stated in the operative terms.
  • “Change in law” provisions are read narrowly. Clauses keyed to changes in law that “prevent enforcement” require an actual legal disability, not merely the repeal of a statute when other sources of authority and the contract itself still allow enforcement.
  • Cross-references to repealed statutes do not automatically void successor authority. Section 1831q(n)(4)’s continuing vitality despite cross-referencing repealed § 1441a illustrates that repeals do not necessarily pull the rug from successor provisions, particularly where doing so would render surviving text superfluous and frustrate planned transitions.
  • Procedural conduct matters. Litigants should not hold back core arguments until oral argument; late-raised arguments may be deemed forfeited.
  • Jurisdictional posture. When the FDIC’s presence supplies federal jurisdiction, dismissal of claims against it may prompt remand of the remaining state-law claims. Parties should plan pleadings and strategies accordingly.

Key Provisions and Concepts Simplified

  • RTC and FSLIC Resolution Fund: The RTC was a temporary federal entity created to resolve failed thrifts and liquidate assets after the S&L crisis. When the RTC ceased operations, its assets and liabilities moved to the FSLIC Resolution Fund, managed by the FDIC.
  • Affordable-housing agreements: Contracts where buyers receive discounted prices for multifamily properties in exchange for long-term rent caps and occupancy requirements benefiting lower-income tenants.
  • “Agency” (in the Agreement): Defined to include federal successors or assignees that engage in preserving affordable housing; here, the FDIC (and its monitoring agent, AHG) fits that definition.
  • Recitals vs. operative clauses: Recitals provide context; operative clauses create binding obligations and rights. Courts enforce operative text, not aspirations or background statements.
  • “Change in law” clause: This Agreement ends early only if a change in federal law “prevents” enforcement. Repeal of a statute is not enough if other law and the contract still permit enforcement.
  • 12 U.S.C. § 1831q(n)(4): A still-effective statute instructing the FDIC to carry out “any remaining authority and responsibilities of the RTC,” preserving enforcement capability after the RTC’s sunset and even after § 1441a’s repeal.
  • Rule 12(b)(6) dismissal: The district court decided that Florida Housing’s counterclaim failed on the pleadings because, as a matter of law, the Agreement remained enforceable; the Eleventh Circuit affirmed.
  • Removal and remand: The FDIC’s involvement provided federal jurisdiction to remove the case. After the counterclaim against the FDIC was dismissed, the district court remanded the case to state court because the federal anchor was gone.

Detailed Case Context

  • 1994 Agreement: Florida Housing bought a 192-unit complex from the RTC at a steep discount. In exchange, it agreed to 40 years of affordability obligations and to annual reporting and administrative fees.
  • Breach: Around 2016, Florida Housing stopped filing annual reports and paying fees. AHG notified Florida Housing of breach and sued in state court for remedies including an injunction and receiver appointment.
  • Counterclaim: Florida Housing sought a declaratory judgment that the Agreement was no longer enforceable and an injunction blocking enforcement. It relied on the Agreement’s early-termination clause and the 2010 repeal of § 1441a.
  • FDIC’s role: The FDIC intervened as counterclaim defendant, removed the case to federal court, and moved to dismiss the counterclaim. The district court dismissed with prejudice and, with the FDIC out, remanded the balance to state court. The Eleventh Circuit affirmed the dismissal.

Practice-Oriented Takeaways

  • For affordable-housing owners: Legacy RTC agreements remain enforceable through their stated terms. Compliance (including reporting and fee obligations) is still expected and judicially enforceable by the FDIC and its agents.
  • For drafters: If obligations are intended to hinge on a specific statute’s ongoing existence, say so in the operative clauses; do not rely on recitals or background references.
  • For litigators: Be mindful of “change in law” clauses—the standard is whether enforcement is actually prevented, not merely complicated. Preserve arguments in the briefs; raising new theories at oral argument risks forfeiture.
  • For agencies and monitors: This decision endorses the use of private monitoring agents as contractual enforcers where the agreement expressly authorizes an “Agency” to enforce.

Conclusion

Affordable Housing Group, Inc. v. Florida Housing Affordability, Inc. confirms that the repeal of the RTC’s enabling statute did not dissolve the contractual promises that private purchasers made in exchange for government discounts. The Eleventh Circuit hewed to core contract principles—enforcing clear, operative terms and refusing to rewrite the parties’ bargain—while reading the federal statutory framework in a way that honors Congress’s planned transition from the RTC to the FDIC. The court held that the FDIC (and its monitoring agents) can continue to enforce longstanding RTC affordable-housing covenants both because the Agreement expressly authorizes it and because 12 U.S.C. § 1831q(n)(4) remains a valid source of successor authority.

In the broader legal context, the decision is a reminder that:

  • Contractual obligations survive statutory repeals unless the contract or an extant statute clearly says otherwise;
  • Recitals cannot overcome unambiguous operative text;
  • “Change in law” termination clauses are construed according to their terms and demand an actual legal bar to enforcement; and
  • Successor-authority statutes like § 1831q(n)(4) are read to have continuing effect, especially where Congress planned for institutional succession.

The ruling will guide courts and stakeholders grappling with legacy federal agreements across the Eleventh Circuit and will likely influence how similar “successor enforcement” and “change in law” questions are framed and resolved in other jurisdictions.

Case Details

Year: 2025
Court: Court of Appeals for the Eleventh Circuit

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