HomeMy WebLinkAbout2006-021 RESOLUTION NO 2006-021
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ATASCADERO AUTHORIZING THE CITY MANAGER
TO EXECUTE HOMEBUYER DOCUMENTS FOR THE
CITY'S AFFORDABLE HOUSING PROGRAM
WHEREAS, the City of Atascadero has adopted an Inclusionary Housing Policy adopted
on June 24, 2003, and amended November 25, 2003 to increase homeownership opportunities
available and affordable to moderate-income household in the City;
WHEREAS, pursuant to the Inclusionary Policy, Atascadero Ordinance Code and
Government Code section 65915, and the conditions of approval for development projects,
Developers are required prior to the issuance of any building permits to execute numerous
agreements and documents to insure that housing units remain affordable to moderate-income
households in the City(hereinafter"Inclusionary Housing Program"),
WHEREAS, the City Council desires to authorize the City Manager and his/her designee
to execute the necessary documents for the City's Inclusionary Housing Program, and
WHEREAS, form agreements and documents for the City's Affordable Housing
Program are on file in the City Clerk's office
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of
Atascadero
SECTION 1 Recitals. The foregoing recitals are true and correct and the City Council
so finds and determines.
SECTION 2. Authorization for City Manager. The City Council hereby authorizes
the City Manager and his/her designee ("Designated Officers"), and each of them individually,
for and in the name of and on behalf of the City, to approve, execute, and deliver the following
agreements and documents
(a) Inclusionary and Density Bonus Affordable Housing Agreement-Rental or For Sale,
(b) Request for Notice of Default,
(c) Promissory Note,
(d) Inclusionary Restrictions and Option to Purchase, Deed of Trust for Moderate Income
Inclusionary
(e) Ca1HFA Agreement and
0"w (f) Any other documents necessary for the City's Inclusionary Housing Program.
City of Atascadero
Resolution No.2006-021
Page 2 of 2
The agreements and documents shall be substantially in the form presented to the City Council at
this meeting, which form agreements and documents are hereby approved, with such changes,
insertions, revisions, corrections, or amendments as shall be approved by the officer or officers
executing the agreement or document for the City Council The execution of the foregoing by a
Designated Officer or Officers shall constitute conclusive evidence of such officer's or officers'
and the City Council's approval of any such changes, insertions, revisions, corrections, or
amendment to the respective forms of agreements and documents presented to the City Council
at this meeting.
SECTION 3 Effective Date. This Resolution shall go into full effect immediately
upon its passage.
On motion by Council Member Scalise and seconded by Council Member Clay, the
foregoing Resolution is hereby adopted in its entirety on the following roll call vote
AYES Council Members Clay and Scalise and Mayor O'Malley
NOES Council Member Luna
ABSENT Council Member Pacas
fir✓
ADOPTED April 11, 2006
TY OF ATAS ERO
By-
Tom O'Malley, M or
ATTEST
Marcia McClure Torgerson, C.M.C.,UCity Clerk
i
PR�D S TOtnck� ; Enri , City Attorney
-Resolution 2006-021 Exhibit _
Affordable Housing Forms Package
Affordable Housing Agreement
CITY OF ATASCADERO
(FOR -SALE MODERATE -INCOME INCLUSIONARY UNITS - ON-SITE - NO PUBLIC
FINANCING)
ADMINISTRATIVE CHECKLIST
(Remove Upon Completion)
BLANK LINES: CHECKLIST
Date of Document, p. 1, first paragraph
Developer's Name and Entity, p. 1, first paragraph
Total Number of Units in Development and Name of Development, p. 1,
Recital C
Number of Affordable Units and Number of Market -Rate Units, pp. 1-2,
Recital D
Number of Market -Rate Units, p. 4, Section 2
Number of Affordable Units, Moderate -Income Units, Lower Income Units,
and Very Low Income Units, p. 4. Section 3
Phasing Requirements, p. 5, Sections 6(b) and 6(c)
Phasing Requirements for Release of Agreement, p. 8, Section 12
Developer's Address for Notices, p. 10, Section 19
Signatures (to be notarized), p. 12
1442\02\314746.1 _ 1.18.2006 1
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Atascadero
6905 EI Camino Real, Suite 6
Atascadero, CA. 93422
Attn: Community Development Director
No fee for recording pursuant to
Government Code Section 27383
(Space above for Recorder's Use)
AFFORDABLE HOUSING AGREEMENT
(Inclusionary For -Sale Moderate -Income Inclusionary Units—On-Site—No Public
Financing)
[Insert name of Development]
This AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into as
of this day of 200_, by and between the CITY OF
ATASCADERO, a municipal corporation (the "City"), and [Developer's Namel, a lUmt
type of entity, such as: California Corporation, Limited Liability Company, etc.1
(the "Developer"), with reference to the following facts:
A. The Atascadero City Council has an Inclusionary Housing Policy,
adopted on June 24, 2003, and amended November 25, 2003 (the "Inclusionary
Policy") to increase homeownership opportunities available and affordable to moderate -
income households.
B. Developer is the owner of certain real property in the City of Atascadero,
California described in Exhibit A attached hereto and incorporated herein by this
reference (the "Property").
C. Developer has received a discretionary approval from the City to construct
a total of (_) residential units known as [insert
name of Development] (hereinafter referred to as the "Development") on the Property.
Pursuant to the Inclusionary Policy, Developer is required to execute this Agreement
prior to the approval of any final or parcel map for the Development and prior to the
issuance of any building permit for the Development.
D. Developer intends to meet the requirements of the Inclusionary Policy by
constructing, or causing to be constructed, (_) [insert number] on-site
for -sale housing units as further described in Sections 3 through 6 below (the
"Affordable Units") and selling them to very low income, lower income, and/or moderate
income households at affordable purchase prices as described in Sections 7 through 9
3/1104
1442\02\314746.11.18.2006
below. The Development also includes a total of (_) [insert
number] market -rate housing units (the "Market Rate Units").
E. Developer and City intend to set forth in greater detail and specificity
within this Agreement the terms and conditions for producing and selling the Affordable
Units in the Development.
NOW, THEREFORE, in consideration of the benefits received by the Developer
and the City, the Developer and City agree as follows:
Section 1. Definitions. In addition to those terms defined in the Recitals, the
following terms are specially defined in this Agreement:
(a) "Administering Agency" means the San Luis Obispo Housing
Authority, the City, or another agency as determined by the Community Development
Director that has experience in the administration of affordable housing programs.
(b) "Affordable Ownership Price" means the maximum sales price as
shown on the San Luis Obispo County's Affordable Housing Standards, published
monthly or if calculated by the City of Atascadero, a sales price that includes a
reasonable down payment and results in a Monthly Housing Payment during the first
calendar year of a household's occupancy that, (i) for Very Low Income Households, is
equal to or less than one -twelfth (1/12) of thirty percent (30%) of fifty percent (50%) of
Area Median Income, as adjusted for Appropriately -Sized households; (ii) for Lower
Income Households, is equal to or less than one -twelfth (1/12) of thirty percent (30%) of
seventy percent (70%) of Area Median Income, as adjusted for Appropriately -Sized
households; and (iii) for Moderate Income Households, is equal to or less than one -
twelfth (1/12) of thirty percent (30%) of one hundred twenty percent (120%) of Area
Median Income, as adjusted for Appropriately -Sized households. If the City of
Atascadero discontinues the use of the San Luis Obispo County's Affordable Housing
Standards, then Affordable Ownership Price shall be calculated by the City as shown in
Exhibit B.
(c) "Affordable Unit Property" means the legal parcel(s) of land on
which the Affordable Units will be constructed.
(d) "Appropriately -Sized" shall be consistent with California Health and
Safety Code Section 50052.5(h), as amended from time to time, and shall be based on
presumed maximum occupancy levels of one person in a studio apartment, two (2)
persons in a one -bedroom unit, three (3) persons in a two-bedroom unit, and one
additional person for each additional bedroom thereafter.
(e) "Area Median Income" means median yearly income in San Luis
Obispo County as published pursuant to California Code of Regulations, Title 25,
Section 6932, or successor provision.
(f) "City Deed of Trust" means the deed of trust, in the form provided
by the City, executed by each buyer of an Affordable Unit at the time of purchase of the
1442\02\314746.11.18.2006 2
Affordable Unit, securing the buyer's performance under the Resale Agreement and the
City Note.
(g) "City Note" means the promissory note, in the form provided by the
City, executed by each buyer of an Affordable Unit at the time of purchase of the
Affordable Unit.
(h) "Eligible Household" means a household that is qualified by the
Administering Agency as i) a First -Time Homebuyer and ii) with Household Income not
exceeding the household income level established for each Affordable Unit as shown in
Exhibit C and as defined for the applicable income category in this Section 1.
(i) "First -Time Homebuyer" means a person who does not currently
hold an ownership interest in any real estate (as verified by a credit report) and who has
not had an ownership interest in his or her primary residence during the past three (3)
years; except that any person who is a Displaced Spouse may not be excluded from
consideration as a First Time Homebuyer on the basis that the individual, while a
homemaker, owned a home with his or her spouse. "Displaced Spouse" means a
person who is separated or divorced from his or her spouse.
0) "Initial Fair Market Value" means the sales price that the Developer
could receive for an Affordable Unit if the City did not restrict the amount that the
Developer may receive to the Affordable Ownership Price. The City may, at its option,
require that the Initial Fair Market Value be established through an appraisal by an MAI
or other qualified appraiser.
(k) "Household Income" means the combined adjusted gross income
for all adult persons living in a dwelling unit, as calculated for the purpose of the Section
8 Program under the United States Housing Act of 1937, as amended, or its successor.
(1) "Lower Income Household" means a household with a Household
Income that does not exceed the United States Department of Housing and Urban
Development's annual determination for lower income households with incomes of
approximately 80 percent of Area Median Income, adjusted for household size.
(m) "Lower Income Affordable Unit" means an Affordable Unit reserved
for purchase at the completion of construction by Lower Income Households at an
Affordable Ownership Price.
(n) "Moderate Income Household" means a household with a
Household Income that does not exceed 120 percent of Area Median Income, adjusted
for household size in accordance with adjustment factors adopted and amended from
time to time by the United States Department of Housing and Urban Development
pursuant to Section 8 of the United States Housing Act of 1937.
(o) "Moderate Income Affordable Unit" means an Affordable Unit
reserved for purchase at the completion of construction by Moderate Income
Households at an Affordable Ownership Price.
1442\02\314746.1_1.18.2006 3
(p) "Monthly Housing Payment" includes mortgage interest and
principal, property taxes, mortgage insurance, homeowner's insurance, homeowners'
association dues, assessments paid by homeowners, and a reasonable allowance for
property maintenance costs, as determined by the Administering Agency.
(q) "Resale Agreement" means the Resale and Refinancing Restriction
Agreement and Option to Purchase, in the form provided by the City, executed by each
buyer of an Affordable Unit and the City at the time of purchase of the Affordable Unit.
(r) "Very Low -Income Household" means a household with an annual
income which does not exceed the United States Department of Housing and Urban
Development's annual determination for very low income households with incomes of
approximately 50 percent of Area Median Income, adjusted for household size.
(s) "Very Low -Income Affordable Unit" means an Affordable Unit
reserved for purchase at the completion of construction by Very Low -Income
Households at an Affordable Ownership Price.
Section 2. Satisfaction of Inclusionary Housing Obligation and Conditions of
Approval. The requirements of the Inclusionary Policy shall be satisfied with respect to
the Property if the Developer constructs or causes to be constructed the Affordable Units
meeting the requirements of Sections 3 through 5 below, in compliance with the schedule
set forth in Section 6 below, and the Affordable Units are sold to homebuyers in
compliance with Sections 7 through 9 below. An amendment to this Agreement will be
required to receive final or parcel map or other City approval for additional housing units
on the Property above the requested total of [insert number] (_) Market
Rate Units included in the Development, to make any changes to the Affordable Units as
they are described in Sections 3 through 5 of this Agreement, or to otherwise change the
terms of this Agreement.
Section 3. Number of Affordable Units. Developer shall construct, or cause to
be constructed, at least (_) [insert number] Affordable Units, of which _ [insert
number] shall be Moderate Income Affordable Units, (_) [insert number]
shall be Lower Income Affordable Units, and (_) [insert number] shall
be Very Low Income Affordable Units.
Section 4. Location of Affordable Units. The Affordable Units shall be
constructed on the Property in the location(s) shown or described in the attached Exhibit
D. The legal parcel(s) of land on which the Affordable Units will be constructed, together
with any Affordable Units and appurtenant improvements constructed on the land, is the
"Affordable Unit Property."
Section 5. Appearance, Size and Bedroom Count. The Affordable Units shall
be of the same general quality of exterior appearance and overall quality of construction
as the Market Rate Units. Interior features and finishes of the Affordable Units shall be
durable, of good quality, and consistent with contemporary standards for new housing.
The Affordable Units shall include the number of bedrooms and square footage indicated
in Exhibit C to this Agreement.
1442\02\314746.1_1.18.2006 4
Section 6. Schedule for Developing Affordable Units. Developer shall provide
the Affordable Units pursuant to the following schedule:
(a) Prior to recordation of any final or parcel map or issuance of any
building permit for the Property, this Agreement shall be duly executed by the City and
the Developer and recorded against the Property.
(b) [For phased projects only] Concurrently with or following release
by the City of building permits for percent (_%) of the Affordable Units, and upon
satisfaction of all other building permit conditions for the Market Rate Units, the City
may release building permits for percent (_%) of the Market Rate Units. [Revise
to permit phased release of permits per an adopted phasing plan. For, example,
release 50% of market rate permits after release of 50% of inclusionary unit
permits — if phasing is complicated, attach exhibit]
(c) No certificate of occupancy shall be released by the City for any
Market Rate Unit until certificates of occupancy have been released by the City for one
hundred percent (100%) of the Affordable Units. [If market rate project is phased,
and phasing is part of land use approval, revise to permit phased release of
certificates of occupancy, similar to subsection (b) above]
Section 7. Sale by Developer to Eligible Households. Following completion of
construction, the Developer shall sell Affordable Units to Moderate Income
Households, Affordable Units to Lower Income Households, and Affordable Units
to Very Low Income Households, at the Affordable Ownership Price established by the
City of Atascadero as described in Section 8 below.
(a) At least thirty (30) days before offering an Affordable Unit for sale,
the Developer shall provide the City with written notice of the availability of the
Affordable Unit, including the number of bedrooms and required income level of the
unit. No later than thirty (30) days after receipt of such notice, the City shall provide
Developer with the Affordable Ownership Price for the Affordable Unit and the income
limits for Eligible Purchasers.
(b) For Moderate -Income Affordable Units, Developer shall also
provide City with Developer's proposed Initial Fair Market Value of the Affordable Unit at
least thirty (30) days before offering an Affordable Unit for sale. No later than thirty (30)
days after receipt of such notice, the City shall indicate the City's agreement, or not,
with Developer's proposed Initial Fair Market Value of the Affordable Unit. The City
may, at its option, require that the Initial Fair Market Value be established through an
appraisal by an MAI or other qualified appraiser.
(c) Developer shall follow the procedures and comply with the
requirements of the Inclusionary Policy and applicable fair housing laws in marketing
and selling the Affordable Units.
(d) Prior to close of escrow for all Affordable Units, the Administering
Agency shall provide verification to City and Developer that the purchaser of the
Affordable Units is an Eligible Household. Purchase contracts between Developer and
prospective buyers shall include requirements that buyers are verified as Eligible
1442\02\314746.11.18.2006 5
Households prior to close of escrow, and that buyers execute documents for the benefit
of the City as described in Section 9 below.
Section 8. Affordable Ownership Price.
(a) The Affordable Units shall be sold to Eligible Households at prices
that do not exceed the Affordable Ownership Price established by the City of
Atascadero for Moderate Income, Lower Income, and/or Very Low Income Affordable
Units. The method of calculating the Affordable Ownership Price is included in Exhibit B
attached hereto. Developer shall notify the City at least thirty (30) days prior to offering
an Affordable Unit for sale to allow the City adequate time to calculate and notify the
Developer of the Affordable Ownership Price applicable to the Affordable Units offered
for sale.
(b) Developer acknowledges and agrees that the Affordable
Ownership Price is determined based on Area Median Income in San Luis Obispo
County, changes to which are published annually by the State of California, Department
of Housing and Community Development, and other housing cost factors included in
Exhibit B, which change from time to time. Developer agrees that the City may
calculate the Affordable Ownership Price for the Affordable Units in its reasonable
discretion and that the City's calculation of Affordable Ownership Price shall be binding
upon the Developer.
(c) The Affordable Ownership Price established for each Affordable
Unit by the City shall be the absolute maximum price that the Developer or any other
person may receive as compensation for the Affordable Unit. The Developer or other
seller may not charge or receive any additional compensation for an Affordable Unit
regardless of whether the additional amount is (a) for options, upgrades, or additional
improvements to the unit, (b) paid through escrow or outside of escrow, (c) paid prior to,
after, or as part of the purchase escrow or (d) paid in cash or in kind.
Section 9. Homebuyer Documents and Security Instruments. Prior to the sale
of each Affordable Unit, Developer shall ensure that:
(a) The Eligible Household and the City execute the Resale
Agreement in the form provided by the City. The Resale Agreement shall be recorded
against the Affordable Unit Property at close of escrow on the sale to the Eligible
Household. The Resale Agreement shall be recorded junior only to the lien of the deed
of trust securing the Eligible Household's first mortgage loan obtained by the
homebuyer to finance the purchase of the Affordable Unit (and second mortgage loan if
such loan is provided by a public agency which requires such subordination), unless
otherwise approved in writing by the City.
(b) The Eligible Household signs the City Note in the form provided by
the City. For Moderate -Income Affordable Units, the City Note shall be equal to the
difference between the Affordable Ownership Price and the Initial Fair Market Value of
the Affordable Unit.
1442\02\314746.1 _ 1.18.2006 6
(c) The Eligible Household signs the City Deed of Trust to secure
performance of the Eligible Household's covenants under the Resale Agreement and
payment of the amounts due under the City Note. The City Deed of Trust shall be
recorded against the Affordable Unit, subordinate only to the Resale Agreement and
the lien for the first mortgage loan obtained by the homebuyer to finance the purchase
of the Affordable Unit (and second mortgage loan if such loan is provided by a public
agency which requires such subordination), unless otherwise approved in writing by the
City.
(d) A Request for Notice of Default and Sale is recorded for each deed
of trust recorded senior to the Resale Agreement and/or City Deed of Trust.
(e) The Eligible Household signs the Borrower's Disclosure in the form
provided by the City.
Section 10. City Approval of Documents. The following documents, to be
approved in writing by the City, shall be used in connection with the development and sale
of the Affordable Units. Approval of the following documents by the City shall be required
prior to the issuance of occupancy permits for the Affordable Units and the offering for
sale of the Affordable Units.
(a) Form of Purchase and Sale Agreements for sale of the Affordable
Units (to be prepared by Developer and submitted to the City).
(b) Form of Resale Agreement, City Note, City Deed of Trust, Request
for Notice of Default and Sale, and Borrower's Disclosure (to be prepared by the City,
following Developer's request). For Moderate -Income Affordable Units, Developer shall
(c) The preliminary Department of Real Estate public report for the
Development, including the Affordable Units (to be obtained by the Developer and
submitted to the City).
Section 11. Compliance, Inspections Monitoring. Within five (5) days following
the sale of any Affordable Unit by the Developer, Developer shall forward to the City
copies of the buyer's and seller's settlement statement and all closing documents,
including Resale Agreement, City Note, City Deed of Trust, Request(s) for Notice of
Default and Sale, and Borrower's Disclosure executed in connection with the sale.
Developer shall retain all records related to compliance with obligations under this
Agreement and the Inclusionary Policy for a period not less than two (2) years from the
date of sale of all units in the Development and make them available to City employees or
others designated by the City for inspection and copying on five (5) business days' written
notice.
Section 12. Release of Property From Agreement. The covenants and
conditions herein contained shall apply to and bind, during their respective periods of fee
ownership, Developer and its heirs, executors, administrators, successors, transferees,
and assignees having or acquiring any right, title or interest in or to any part of the
Property and shall run with and burden such portions of the Property until terminated in
accordance with this Section 12. Until portions of the Property are released from the
1442\02\314746.1 _ 1.18.2006 7
burdens of this Agreement pursuant to this Section 12, the owners of fee title to the
Property shall expressly make the conditions and covenants contained in this Agreement
a part of any deed or other instrument conveying any interest in such property. Upon
issuance of final certificates of occupancy for one hundred percent (100%) of the
Affordable Units, the Property, except for the Affordable Unit Property, shall be released
from the burdens of this Agreement. [Modify per the phasing plan (for instance, "all of
the units in Phase I shall be released from the burdens of this Agreement when all
of the Affordable Units in Phase I have received occupancy permits.")] As Affordable
Units are sold to Eligible Households in compliance with this Agreement, and Resale
Agreements and City Deeds of Trust are recorded against the Affordable Units, the
portions of the Affordable Unit Property sold to Eligible Households shall be released from
the burdens of this Agreement.
Section 13. Default and Remedies. Failure of the Developer to cure any
default in the Developer's obligations under the terms of this Agreement within thirty (30)
days after the delivery of a notice of default from the City will constitute a default under
this Agreement and the requirements of the Inclusionary Policy and, in addition to
remedies for breach of this Agreement, the City may exercise any and all remedies
available to it under the Subdivision Map Act, the Inclusionary Policy, the Atascadero
Municipal Code, or otherwise, with respect to the Developer's failure to satisfy the terms
of this Agreement and the requirements of the Inclusionary Policy, including but not
limited to:
(a) withholding, conditioning, suspending, or revoking any permit, license,
subdivision approval or map, or other entitlement for the Development, including without
limitation final inspections for occupancy and/or certificates of occupancy;
(b) instituting against the Developer, or other parties, a civil action for
declaratory relief, injunction or any other equitable relief, or relief at law, including
without limitation an action to rescind a transaction and/or to require repayment of any
funds received in connection with such a violation;
(c) where one or more persons have received financial benefit as a result of
violation of this Agreement or of any requirement imposed under the Inclusionary
Policy, the City may assess, and institute legal action to recover as necessary, a
penalty in any amount up to and including the amount of financial benefit received, in
addition to recovery of the benefit received;
(d) prosecuting a misdemeanor against any person who has sold a residential
unit at a price exceeding the maximum allowed under this Agreement or to a household
not qualified under this Agreement, or who has otherwise violated the Inclusionary
Policy, or any other agreement, restriction or requirement authorized or imposed under
the Inclusionary Policy; or
(e) any other means authorized under the City of Atascadero Municipal Code.
Section 14. Remedies Cumulative. No right, power, or remedy given to the City
by the terms of this Agreement or the Inclusionary Policy is intended to be exclusive of
any other right, power, or remedy; and each and every such right, power, or remedy shall
1442\02\314746.1_1.18.2006 8
be cumulative and in addition to every other right, power, or remedy given to the City by
the terms of any such document, the Inclusionary Policy, or by any statute or otherwise
against Developer and any other person. Neither the failure nor any delay on the part of
the City to exercise any such rights and remedies shall operate as a waiver thereof, nor
shall any single or partial exercise by the City of any such right or remedy preclude any
other or further exercise of such right or remedy, or any other right or remedy.
Section 15. Attorneys Fees and Costs. The City shall be entitled to receive
from the Developer or any person violating the requirements of this Agreement, in addition
to any remedy otherwise available under this Agreement or at law or equity, whether or
not litigation is instituted, the costs of enforcing this Agreement, including without limitation
reasonable attorneys' fees and the costs of City staff time.
Section 16. Appointment of Other Agencies. At its sole discretion, the City may
designate, appoint or contract with any other public agency, for-profit or non-profit
organization to perform some or all of the City's or Administering Agency's obligations
under this Agreement.
Section 17. Hold Harmless. Developer will indemnify and hold harmless
(without limit as to amount) City and its elected officials, officers, employees, and agents
in their official capacity (hereinafter collectively referred to as "Indemnitees"), and any of
them, from and against all loss, all risk of loss and all damage (including expense)
sustained or incurred because of or by reason of any and all claims, demands, suits,
actions, judgments and executions for damages of any and every kind and by whomever
and whenever made or obtained, allegedly caused by, arising out of or relating in any
manner to the Development, the Affordable Units, or Developer's performance or non-
performance under this Agreement, and shall protect and defend Indemnitees, and any of
them with respect thereto, except to the extent arising from the gross negligence or willful
misconduct of the City. The provisions of this section shall survive expiration or other
termination of this Agreement or any release of part or all of the Property from the
burdens of this Agreement, and the provisions of this section shall remain in full force and
effect.
Section 18. Insurance Requirements. Until all Affordable Units have been sold
to Eligible Households in compliance with this Agreement, Developer and its successors
and assigns acquiring title to the Property shall obtain, at their expense, comprehensive
general liability insurance for development of the Affordable Units, naming Indemnitees as
additional named insureds, with aggregate limits of not less than Two Million Dollars
($2,000,000), for bodily injury and death and property damage, including coverage for
contractual liability and products and completed operations, purchased by Developer or its
successors or assigns from an insurance company duly licensed to engage in the
business of issuing such insurance in the State, with a current Best's Key Rating of not
less than A-V, such insurance to be evidenced by an endorsement which so provides and
delivered to the City prior to the issuance of any building permit for the Affordable Units.
Section 19. Notices. All notices required pursuant to this Agreement shall be in
writing and may be given by personal delivery or by registered or certified mail, return
receipt requested, to the party to receive such notice at the addresses set forth below:
1442\02\314746.1 _ 1.18.2006 9
TO THE CITY:
City of Atascadero
6907 EI Camino Real
Atascadero, CA. 93422
Attn: Community Development Director
TO THE DEVELOPER:
Attn :
Any party may change the address to which notices are to be sent by notifying the other
parties of the new address, in the manner set forth above.
Section 20. Integrated Agreement. This Agreement constitutes the entire
Agreement between the parties and no modification shall be binding unless reduced to
writing and signed by the Parties.
Section 21. Duration and Amendment of Agreement. This Agreement shall
remain in effect for so long as the Property is subject to inclusionary housing obligations
pursuant to the Inclusionary Policy. This Agreement, and any section, subsection, or
covenant contained herein, may be amended only upon the written consent of the City
Council.
Section 22. No Joint Venture or Partnership. Nothing contained in this
Agreement or any document executed pursuant to this Agreement shall be construed as
creating a joint venture or partnership between City and Developer. Nothing contained in
this Agreement shall create or justify any claim against the City by any person that
Developer may have employed or with whom Developer may have contracted relative to
the purchase of materials, supplies or equipment, or the furnishing or the performance of
any work or services with respect to the Property or the construction of the Development.
Section 23. Applicable Law and Venue. This Agreement shall be governed by
California law. Venue for any dispute arising out of this Agreement shall be San Luis
Obispo County.
Section 24. Waivers. Any waiver by the City of any obligation or condition in
this Agreement must be in writing. No waiver will be implied from any delay or failure by
the City to take action on any breach or default of Developer or to pursue any remedy
allowed under this Agreement or applicable law. Any extension of time granted to
Developer to perform any obligation under this Agreement shall not operate as a waiver or
release from any of its obligations under this Agreement. Consent by the City to any act
or omission by Developer shall not be construed to be a consent to any other or
subsequent act or omission or to waive the requirement for the City's written consent to
future waivers.
1442\02\314746.1_1.18.2006 10
Section 25. Title of Parts and Sections. Any titles of the sections or
subsections of this Agreement are inserted for convenience of reference only and shall be
disregarded in interpreting any part of the Agreement's provisions.
Section 26. Multiple Originals; Counterpart. This Agreement may be executed
in multiple originals, each of which is deemed to be an original, and may be signed in
counterparts.
Section 27. Recording of Agreement. The Developer shall cause this
Agreement to be recorded against the Property, in the Official Records of the County of
San Luis Obispo.
Section 28. Severability. In the event any limitation, condition, restriction,
covenant, or provision contained in this Agreement is to be held invalid, void or
unenforceable by any court of competent jurisdiction, or if any provision of this Agreement
is rendered invalid or unenforceable pursuant to any California statute which became
effective after the effective date of this Agreement, the remaining portions of this
Agreement shall nevertheless remain in full force and effect.
Section 29. Exhibits. The following exhibits are attached to this Agreement:
Exhibit A Legal Description of the Property
Exhibit B Calculation of Affordable Ownership Price
Exhibit C Income Level, Size, and Bedroom Count of Inclusionary
Units
Exhibit D Location of Affordable Units
1442\02\314746.1 _ 1.18.2006 11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
DEVELOPER:
CITY:
a City of Atascadero, a municipal
California corporation
By:
By: WADE MCKINNEY, City Manager
Its:
APPROVED AS TO FORM AND LEGAL
EFFECT:
PATRICK ENRIGHT, City Attorney
1442\02\314746.1 _ 1.18.2006 12
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On _,200_, before me, personally
appeared and, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
STATE OF CALIFORNIA )
) ss.
COUNTY OF ALAMEDA )
On _,200_, before me, personally
appeared and, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
3/1/04
1442\02\314746.11.18,2006
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
1442\02\314746.1 _ 1.18.2006 A-1
EXHIBIT B
CALCULATION OF AFFORDABLE OWNERSHIP PRICE
The Affordable Ownership Price for Affordable Units shall be calculated using the
procedures and formulas described below. The current City of Atascadero Moderate,
Lower, and Very Low Income Limits as established pursuant to the Inclusionary Policy
shall be used in these calculations. The interest rate used in these calculations shall be
determined by the City at its sole discretion.
1. Determine the annual income limit for the appropriate income category (Very
Low, Low, or Moderate) for a household size that is one person larger than the
number of bedrooms in the affordable unit;
2. Multiply the income limit determined in the previous step by thirty percent (30%)
to obtain the annual housing allowance;
3. Divide the annual housing allowance determined in the previous step by twelve
(12) to determine the monthly housing allowance;
4. Calculate the average monthly cost of property taxes, mortgage insurance,
homeowner's insurance, homeowners' association dues, assessments paid by
homeowners, and a reasonable allowance for property maintenance costs.
5. Subtract the amount calculated in Step 4 from the monthly housing allowance to
compute the amount available for mortgage payments;
6. Using a standard amortization table or formula, calculate the loan amount that
can be repaid over thirty (30) years with equal monthly payments equal to the
amount available for mortgage payments using the prevailing interest rate for
thirty (30) years, and assuming a fully amortized fixed rate mortgage; and
7. Divide the loan amount calculated in the previous step by 0.95 to determine the
Affordable Ownership Price assuming a five percent (5%) down payment.
The following calculations are for a three (3) bedroom Moderate -Income Affordable Unit
based on the maximum income limits for San Luis Obispo County as of July 2004.
These calculations illustrate how the price of a Moderate Income Affordable Unit is
calculated.
1442\02\314746.11.18.2006 B-1
Step 1
Annual Moderate Income Limit for a 4 person household
$74,050
Step 2
30% of the Income Limit determined in Step 1
$22,215
Step 3
One twelfth of the amount calculated in Step 2
$1,851
Step 4
Calculate monthly cost of property taxes, mortgage insurance,
homeowner's insurance, homeowners' association dues,
assessments paid by homeowners, and a reasonable
allowance for property maintenance costs (est.)
$611
Step 5
Amount remaining for mortgage payments
$1,240
Step 6
Amount that can be financed with payment calculated in Step 5
$201,400
with a 30 year fixed-rate loan at a 6.25% interest rate
Step 7
Loan amount in Step 6 divided by 95% = Affordable Ownership
$212,000
Price
1442\02\314746.1 1.18.2006 B-2
EXHIBIT C
INCOME LEVEL, SIZE, AND BEDROOM COUNT
OF AFFORDABLE UNITS
INCOME
TYPE OF
NUMBER
NUMBER OF
SQUARE
ASSUMED
LEVEL OF
UNIT
OF
BEDROOMS
FOOTAGE
HOUSEHOLD
BUYERS
(single family
UNITS
SIZE
detached,
single family
attached, or
condominium
Moderate
Income
Lower
Income
Very Low
Income
1442\02\314746.11.18.2006 C-1
EXHIBIT D
LOCATION OF AFFORDABLE UNITS
Onsite Affordable Units: Insert Legal Description(s) of Affordable Unit Property
or if no legal description is available, attach map of Property showing general
location and distribution of Affordable Units.
1442\02\314746.1 _ 1.18.2006 D-1
Affordable Housing Agreement
CITY OF ATASCADERO
(RENTAL OR FOR -SALE INCLUSIONARY AND DENSITY BONUS UNITS — ON-SITE
— NO PUBLIC FINANCING)
ADMINISTRATIVE CHECKLIST
(Remove Upon Completion)
BLANK LINES: CHECKLIST
Date of Document, p. 1, first paragraph
Developer's Name and Entity, p. 1, first paragraph
Total Number of Units in Development, Name of Development, Density
Bonus Units, Affordable Units, Term of Affordability, pp. 1 — 2, Recital C
Number of Market -Rate Units, p. 4, Section 2
Affordable Units, p. 4. Section 3
Phasing Requirements, p. 5, Sections 6(b) and 6(c)
Number of Ownership Affordable Units, p. 5, Section 7
Phasing Requirements for Release of Agreement, p. 9, Section 15(a)
Term of Agreement for Rental Affordable Units, p. 9, Section 15(c)
Developer's Address for Notices, p. 10, Section 19
Signatures (to be notarized), p. 12
1442\02\319175.1 2.3.2006
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Atascadero
6907 EI Camino Real
Atascadero, CA. 93422
Attn: Community Development Director
No fee for recording pursuant to
Government Code Section 27383
(Space above for Recorder's Use)
AFFORDABLE HOUSING AGREEMENT
(Inclusionary For -Rent or For -Sale Inclusionary and Density Bonus Units—On-Site—No
Public Financing)
[Insert name of Development]
This AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into as
of this day of 200_, by and between the CITY OF
ATASCADERO, a municipal corporation (the "City")–, and [Developer's Name -I., a List
type of entity, such as: California Corporation Limited Liability Company etc.1
(the "Developer"), with reference to the following facts:
A. The Atascadero City Council has an Inclusionary Housing Policy,
adopted on June 24, 2003, and amended November 25, 2003 (the "Inclusionary
Policy") to increase homeownership opportunities available and affordable to moderate -
income households. The City has also adopted a Density Bonus Ordinance,
Atascadero Municipal Code Section 9-3.175(f) (the "Ordinance") to conform with State
Density Bonus Law (Government Code Section 65915), which allows a density bonus
for the provision of housing affordable to very low income and lower income
households.
B. Developer is the owner of certain real property in the City of Atascadero,
California described in Exhibit A attached hereto and incorporated herein by this
reference (the "Property").
C. Developer has received a discretionary approval from the City to construct
a total of (_) [insert number] residential units known as
[insert name of development] (hereinafter referred to as the
"Development") on the Property. Pursuant to the Ordinance, Government Code 65915,
and the Inclusionary Policy, the Development includes, and City has granted, Owner a
density bonus of [number of bonus units] units (the "Density Bonus") in
exchange for Owner's provision of units which will be affordable and [sold or
rented] to Moderate Income Households, units which will be affordable and
[sold or rented] to Lower Income Households, and units which will be
1442\02\319175.12.3.2006
affordable and [sold or rented] to Very Low Income households [complete as
appropriate for the project] (the "Affordable Units") and will remain affordable for a
term of [thirty (30) years].
D. Pursuant to the Inclusionary Policy, the Ordinance, Government Code
Section 65915, and the conditions of approval for the Development, Developer is
required to execute this Agreement prior to the approval of any final or parcel map for
the Development and prior to the issuance of any building permit for the Development.
Developer and City intend to set forth in greater detail and specificity within this
Agreement the terms and conditions for producing and selling the Affordable Units in
the Development.
NOW, THEREFORE, in consideration of the benefits received by the Developer
and the City, the Developer and City agree as follows:
Section 1. Definitions. In addition to those terms defined in the Recitals, the
following terms are specially defined in this Agreement:
(a) "Administering Agency" means the San Luis Obispo Housing
Authority, the City, or another agency as determined by the Community Development
Director that has experience in the administration of affordable housing programs.
(b) "Affordable Ownership Price" means a sales price that includes a
reasonable down payment and results in a Monthly Housing Payment during the first
calendar year of a household's occupancy that, (i) for Very Low Income Households, is
equal to or less than one -twelfth (1/12) of thirty percent (30%) of fifty percent (50%) of
Area Median Income, as adjusted for Appropriately -Sized households; (ii) for Lower
Income Households, is equal to or less than one -twelfth (1/12) of thirty percent (30%) of
seventy percent (70%) of Area Median Income, as adjusted for Appropriately -Sized
households; and (iii) for Moderate Income Households, is equal to or less than one -
twelfth (1/12) of thirty percent (30%) of one hundred twenty percent (120%) of Area
Median Income, as adjusted for Appropriately -Sized households. Affordable Ownership
Price shall be calculated by the City as shown in Exhibit B.
(c) "Affordable Rent" means monthly housing expenses, including all
fees for housing services and a reasonable allowance for utilities, not exceeding: (i) for
Very Low Income Households, is equal to or less than one -twelfth (1/12) of thirty
percent (30%) of fifty percent (50%) of Area Median Income, as adjusted for
Appropriately -Sized households; (ii) for Lower Income Households, is equal to or less
than one -twelfth (1/12) of thirty percent (30%) of sixty percent (60%) of Area Median
Income, as adjusted for Appropriately -Sized households; and (iii) for Moderate Income
Households, is equal to or less than one -twelfth (1/12) of thirty percent (30%) of one
hundred twenty percent (110%) of Area Median Income, as adjusted for Appropriately -
Sized households. Affordable Rent shall be calculated by the City as shown in Exhibit
C.
1442\02\319175.1_2.3.2006 2
(d) "Affordable Unit Property" is as defined in Section 4.
(e) "Appropriately -Sized" shall be consistent with California Health and
Safety Code Section 50052.5(h), as amended from time to time, and shall be based on
presumed maximum occupancy levels of one person in a studio apartment, two (2)
persons in a one -bedroom unit, three (3) persons in a two-bedroom unit, and one
additional person for each additional bedroom thereafter.
(f) "Area Median Income" means median yearly income in San Luis
Obispo County as published pursuant to California Code of Regulations, Title 25,
Section 6932, or successor provision.
(g) "City Deed of Trust" means the deed of trust, in the form provided
by the City, executed by each buyer of an Ownership Affordable Unit at the time of
purchase of the Affordable Unit, securing the buyer's performance under the Resale
Agreement and the City Note.
(h) "City Note" means the promissory note, in the form provided by the
City, executed by each buyer of an Ownership Affordable Unit at the time of purchase
of the Affordable Unit.
(i) "Eligible Household" means a household that is qualified by the
Administering Agency as i) a First -Time Homebuyer and ii) with Household Income not
exceeding the household income level as defined for the applicable income category in
this Section 1.
Q) "First -Time Homebuyer" means a person who does not currently
hold an ownership interest in any real estate (as verified by a credit report) and who has
not had an ownership interest in his or her primary residence during the past three (3)
years; except that any person who is a Displaced Spouse may not be excluded from
consideration as a First Time Homebuyer on the basis that the individual, while a
homemaker, owned a home with his or her spouse. "Displaced Spouse" means a
person who is separated or divorced from his or her spouse.
(k) "Household Income" means the combined adjusted gross income
for all adult persons living in a dwelling unit, as calculated for the purpose of the Section
8 Program under the United States Housing Act of 1937, as amended, or its successor.
(1) "Initial Fair Market Value" means the sales price that the Developer
could receive for an Affordable Unit if the City did not restrict the amount that the
Developer may receive to the Affordable Ownership Price. The City may, at its option,
require that the Initial Fair Market Value be established through an appraisal by an MAI
or other qualified appraiser.
(m) "Initial Maximum Rents" means the initial rents for the any Rental
Affordable Units calculated as shown in Exhibit C.
(n) "Lower Income Household" means a household with a Household
Income that does not exceed the United States Department of Housing and Urban
1442\02\319175.1 _2.3.2006
Development's annual determination for lower income households with incomes of
approximately 80 percent of Area Median Income, adjusted for household size.
(o) "Lower Income Affordable Unit" means an Affordable Unit reserved
for purchase or rent at the completion of construction by Lower Income Households at
an Affordable Ownership Price or Affordable Rent.
(p) "Moderate Income Household" means a household with a
Household Income that does not exceed 120 percent of Area Median Income, adjusted
for household size in accordance with adjustment factors adopted and amended from
time to time by the United States Department of Housing and Urban Development
pursuant to Section 8 of the United States Housing Act of 1937.
(q) "Moderate Income Affordable Unit" means an Affordable Unit
reserved for purchase or rent at the completion of construction by Moderate Income
Households at an Affordable Ownership Price or Affordable Rent.
(r) "Monthly Housing Payment" includes mortgage interest and
principal, property taxes, mortgage insurance, homeowner's insurance, homeowners'
association dues, assessments paid by homeowners, and a reasonable allowance for
utilities and property maintenance costs, as determined by the Administering Agency.
(s) "Ownership Affordable Unit Property" is as defined in Section 4.
(t) "Ownership Affordable Units" are Affordable Units initially offered
for sale.
(u) "Regulatory Agreement" means the Inclusionary Housing
Regulatory Agreement and Declaration of Restrictive Covenants between the
Developer (or its successors to the Rental Affordable Unit Property) and the City, to be
recorded against the Rental Affordable Unit Property pursuant to Section 15(a) below.
(v) "Rental Affordable Unit Property" is as defined in Section 4.
(w) "Rental Affordable Units" are Affordable Units initially offered for
rent.
(x) "Resale Agreement" means the Resale and Refinancing Restriction
Agreement and Option to Purchase, in the form provided by the City, executed by each
buyer of an Ownership Affordable Unit and the City at the time of purchase of the
Ownership Affordable Unit.
(y) "Very Low -Income Household" means a household with an annual
income which does not exceed the United States Department of Housing and Urban
Development's annual determination for very low income households with incomes of
approximately 50 percent of Area Median Income, adjusted for household size.
1442\02\319175.1_2.3.2006 4
(z) "Very Low -Income Affordable Unit" means an Affordable Unit
reserved for purchase or rent at the completion of construction by Very Low -Income
Households at an Affordable Ownership Price or Affordable Rent.
Section 2. Satisfaction of Inclusionary Housing and Ordinance Obligation and
Conditions of Approval. The requirements of the Inclusionary Policy and Ordinance
shall be satisfied with respect to the Property if: (a) the Developer constructs or causes
to be constructed the Affordable Units meeting the requirements of Sections 3 through
5 below, in compliance with the schedule set forth in Section 6 below; (b) any
Ownership Affordable Units are sold to homebuyers in compliance with Sections 7
through 10 below; and (c) if there are Rental Affordable Units, Developer records the
Regulatory Agreement as described in Section 15(a) below against the Rental
Affordable Unit Property and markets and operates the Rental Affordable Units in
compliance with Sections 11 through 13 below and in compliance with the Regulatory
Agreement. An amendment to this Agreement will be required to receive final or parcel
map or other City approval for additional housing units on the Property above the
requested total of [insert number] (_) Market Rate Units included in the
Development, to make any changes to the Affordable Units as they are described in
Sections 3 through 5 of this Agreement, or to otherwise change the terms of this
Agreement.
Section 3. Number of Affordable Units. Developer shall construct, or cause to
be constructed, at least (_) [insert number] Affordable Units, of which
[insert number] shall be [sold or rented] to Moderate Income Affordable Units,
(_) [insert number] shall be [sold or rented] to Lower Income
Affordable Units, and (_) [insert number] shall be [sold or rented]
to Very Low Income Affordable Units.
Section 4. Location of Affordable Units. The Affordable Units shall be
constructed on the Property in the location(s) shown or described in the attached
Exhibit D. The legal parcel(s) of land on which the Affordable Units will be constructed,
together with any Affordable Units and appurtenant improvements constructed on the
land, is the "Affordable Unit Property." The legal parcel(s) of land on which any
Affordable Units initially offered for sale will be constructed, together with any
Affordable Units and appurtenant improvements constructed on the land, is the
"Ownership Affordable Unit Property." The legal parcel(s) of land on which any
Affordable Units initially offered for rent will be constructed, together with any Affordable
Units and appurtenant improvements constructed on the land, is the "Rental Affordable
Unit Property."
Section 5. Appearance, Size, Bedroom Count and Tenure. The Affordable
Units shall be of the same general quality of exterior appearance and overall quality of
construction as the Market Rate Units. Interior features and finishes of the Affordable
Units shall be durable, of good quality, and consistent with contemporary standards for
new housing. The Affordable Units shall include the number of bedrooms, square
footage, and tenure indicated in Exhibit E to this Agreement.
Section 6. Schedule for Developing Affordable Units. Developer shall provide
the Affordable Units pursuant to the following schedule:
1442\02\319175.1_2.3.2006 5
(a) Prior to recordation of any final or parcel map or issuance of any
building permit for the Property, this Agreement shall be duly executed by the City and
the Developer and recorded against the Property.
(b) Concurrently with or following release by the City of building
permits for percent (_%) of the Affordable Units, and upon satisfaction of all other
building permit conditions for the Market Rate Units, the City may release building
permits for percent (_%) of the Market Rate Units. [Revise to permit phased
release of permits per an adopted phasing plan. For, example, release 50% of
market rate permits after release of 50% of inclusionary unit permits — if phasing
is complicated, attach exhibit]
(c) No certificate of occupancy shall be released by the City for any
Market Rate Unit until certificates of occupancy have been released by the City for one
hundred percent (100%) of the Affordable Units. [If market rate project is phased,
and phasing is part of land use approval, revise to permit phased release of
certificates of occupancy, similar to subsection (b) above]
Section 7. Sale by Developer of Ownership Affordable Units to Eliaible
Households. Following completion of construction, the Developer shall sell
[number] Affordable Units to Moderate Income Households, [number] Affordable
Units to Lower Income Households, and [number] Affordable Units to Very Low
Income Households, at the Affordable Ownership Price established by the City of
Atascadero as described in Section 8 below.
(a) At least thirty (30) days before offering an Ownership Affordable
Unit for sale, the Developer shall provide the City with written notice of the availability of
the Ownership Affordable Unit, including the number of bedrooms and required income
level of the unit. No later than thirty (30) days after receipt of such notice, the City shall
provide Developer with the Affordable Ownership Price for the Ownership Affordable
Unit and the income limits for Eligible Purchasers.
(b) For Moderate -Income Ownership Affordable Units, Developer shall
also provide City with Developer's proposed Initial Fair Market Value of the Ownership
Affordable Unit at least thirty (30) days before offering an Ownership Affordable Unit for
sale. No later than thirty (30) days after receipt of such notice, the City shall indicate the
City's agreement, or not, with Developer's proposed Initial Fair Market Value of the
Ownership Affordable Unit. The City may, at its option, require that the Initial Fair
Market Value be established through an appraisal by an MAI or other qualified
appraiser.
(c) Developer shall follow the procedures and comply with the
requirements of the Inclusionary Policy and applicable fair housing laws in marketing
and selling the Ownership Affordable Units.
(d) Prior to close of escrow for all Ownership Affordable Units, the
Administering Agency shall provide verification to City and Developer that the purchaser
of the Ownership Affordable Unit is an Eligible Household. Purchase contracts between
1442\02\319175.1 _2.3.2006 6
Developer and prospective buyers shall include requirements that buyers are verified as
Eligible Households prior to close of escrow and that buyers execute documents for the
benefit of the City as described in Section 10 below.
Section 8. Affordable Ownership Price.
(a) The Ownership Affordable Units shall be sold to Eligible
Households at prices that do not exceed the Affordable Ownership Price established by
the City of Atascadero for Moderate Income, Lower Income, and/or Very Low Income
Affordable Units, as applicable. The method of calculating the Affordable Ownership
Price is included in Exhibit B attached hereto. Developer shall notify the City at least
thirty (30) days prior to offering an Ownership Affordable Unit for sale to allow the City
adequate time to calculate and notify the Developer of the Affordable Ownership Price
applicable to the Ownership Affordable Units offered for sale.
(b) Developer acknowledges and agrees that the Affordable
Ownership Price is determined based on Area Median Income in San Luis Obispo
County, changes to which are published annually by the State of California, Department
of Housing and Community Development, and other housing cost factors included in
Exhibit B, which change from time to time. Developer agrees that the City may
calculate the Affordable Ownership Price for the Affordable Units in its reasonable
discretion and that the City's calculation of Affordable Ownership Price shall be binding
upon the Developer.
(c) The Affordable Ownership Price established for each Ownership
Affordable Unit by the City shall be the absolute maximum price that the Developer or
any other person may receive as compensation for the Ownership Affordable Unit. The
Developer or other seller may not charge or receive any additional compensation for an
Ownership Affordable Unit regardless of whether the additional amount is (a) for
options, upgrades, or additional improvements to the unit, (b) paid through escrow or
outside of escrow, (c) paid prior to, after, or as part of the purchase escrow or (d) paid
in cash or in kind.
Section 9. City Approval of Homebuyer Documents. The following
documents, to be approved in writing by the City, shall be used in connection with the
development and sale of the Ownership Affordable Units. Approval of the following
documents by the City shall be required prior to the issuance of occupancy permits for
the Ownership Affordable Units and the offering for sale of the Ownership Affordable
Units.
(a) Form of Purchase and Sale Agreements for sale of the Ownership
Affordable Units (to be prepared by Developer and submitted to the City).
(b) Form of Resale Agreement, City Note, City Deed of Trust, Request
for Notice of Default and Sale, and Borrower's Disclosure (to be prepared by the City,
following Developer's request).
1442\02\319175.1_2.3.2006
(c) The preliminary Department of Real Estate public report for the
Development, including the Ownership Affordable Units (to be obtained by the
Developer and submitted to the City).
Section 10. Homebuyer Documents and Security Instruments. Prior to the sale
of each Ownership Affordable Unit, Developer shall ensure that:
(a) The Eligible Household and the City execute the Resale
Agreement in the form provided by the City. The Resale Agreement shall be recorded
against the Ownership Affordable Unit Property at close of escrow on the sale to the
Eligible Household. The Resale Agreement shall be recorded junior only to the lien of
the deed of trust securing the Eligible Household's first mortgage loan obtained by the
homebuyer to finance the purchase of the Ownership Affordable Unit and only if
required by the lender (and second mortgage loan if such loan is provided by a public
agency which requires such subordination), unless otherwise approved in writing by the
City.
(b) The Eligible Household signs the City Note in the form provided by
the City. For Moderate -Income Ownership Affordable Units, the City Note shall be equal
to the difference between the Affordable Ownership Price and the Initial Fair Market
Value of the Affordable Unit.
(c) The Eligible Household signs the City Deed of Trust to secure
performance of the Eligible Household's covenants under the Resale Agreement and
payment of the amounts due under the City Note. The City Deed of Trust shall be
recorded against the Ownership Affordable Unit, subordinate only to the Resale
Agreement and the lien for the first mortgage loan obtained by the homebuyer to
finance the purchase of the Ownership Affordable Unit (and second mortgage loan if
such loan is provided by a public agency which requires such subordination), unless
otherwise approved in writing by the City.
(d) A Request for Notice of Default and Sale is recorded for each deed
of trust recorded at close of escrow.
(e) The Eligible Household signs the Borrower's Disclosure in the form
provided by the City.
Section 11. Marketing and Rental of Rental Affordable Units. Following
completion of construction, the Developer shall rent any Rental Affordable Units to
[Very Low Income or Lower Income] Households at Affordable Rents calculated in
compliance with Exhibit C attached hereto and the Regulatory Agreement. Developer
shall submit a marketing and management plan to the Administering Agency for
approval prior to commencing marketing of the Rental Affordable Units and shall market
the Rental Affordable Units in compliance with the marketing and management plan
approved by the Administering Agency. Developer shall grant a preference to
households that live or work in San Luis Obispo County. Developer shall comply with
applicable fair housing laws in the marketing and rental of the Rental Affordable Units.
Developer shall accept as tenants, on the same basis as all other prospective tenants,
persons who are recipients of federal certificates or vouchers for rent subsidies
1442\02\319175.12.3.2006
pursuant to the existing housing program under Section 8 of the United States Housing
Act, or its successor. Developer shall refer potential tenants to the Administering
Agency for income certification and not enter into a binding rental agreement with a
tenant until income and asset certification has been completed, and Developer has
been informed in writing by the Administering Agency that the potential tenant is
income -eligible to occupy the rental Affordable Unit.
Section 12. Rental Affordable Units Not Subject to Costa -Hawkins Act
Developer hereby acknowledges that the Development has received a Density Bonus in
consideration for the provision of the Rental Affordable Units. A Density Bonus is a form
of assistance specified in Chapter 4.3 (commencing with Section 65915) of Division 1 of
Title 7 of the Government Code. As consideration for the Density Bonus, Developer
hereby agrees that Civil Code Section 1954.52(a) (Costa -Hawkins Act) does not apply
to the Rental Affordable Units.
Section 13. City Approval of Documents for Rental Affordable Units. The
following documents, to be approved in writing by the Administering Agency, shall be
used in connection with the rental of the Rental Affordable Units.
11. (a) A marketing and management plan approved pursuant to Section
(b) Form of rental agreement or lease to be signed by tenants of the
Rental Affordable Units.
(c) The Regulatory Agreement, in a form to be provided by the County.
Section 14. Compliance, Inspections Monitoring.
(a) Ownership Affordable Units. Within five (5) days following the sale
of any Ownership Affordable Unit by the Developer, Developer shall forward to the City
copies of the buyer's and seller's settlement statement and all closing documents,
including Resale Agreement, City Note, City Deed of Trust, Request(s) for Notice of
Default and Sale, and Borrower's Disclosure executed in connection with the sale.
Developer shall retain all records related to compliance with obligations under this
Agreement, the Ordinance, and the Inclusionary Policy for a period not less than two (2)
years from the date of sale of all units in the Development and make them available to
City employees or others designated by the City for inspection and copying on five (5)
business days' written notice.
(b) Rental Affordable Units. Following completion of construction of
any Rental Affordable Unit, a report verifying compliance of all completed Rental
Affordable Units with the terms of the Regulatory Agreement, prepared on any form
specified by the Administering Agency, and certified as correct under penalty of perjury
by the owner of the Rental Affordable Units and any property management company
managing the units, shall be submitted annually to the Administering Agency on April 1
of each year, commencing on the April 1 following issuance of final certificates of
occupancy for one hundred percent (100%) of the Rental Affordable Units. If similar
reports on some or all of the Rental Affordable Units are required for regulatory
1442\02\319175.1 _2.3.2006 9
compliance with other financing programs, those reports may be deemed satisfactory
for the purpose of this Section 14(b) by the Administering Agency with respect to the
portion of the Rental Affordable Units covered by such reports, provided that copies are
provided on an annual basis to the Administering Agency with an owner certification
addressed to the City. Developer shall retain all records related to compliance with
obligations under this Agreement, the Ordinance, and the Inclusionary Policy for a
period not less than five (5) years from the date of origination of such records, and
make them available to the Administering Agency for inspection and copying on five (5)
business days' written notice. Developer shall permit the Administering Agency or
others designated by the City to inspect the Rental Affordable Unit Property to monitor
compliance with this Agreement or the Regulatory Agreement following two (2)
business days' written notice to Developer.
Section 15. Release of Property From Agreement.
(a) Construction of Affordable Units. The covenants and conditions
herein contained shall apply to and bind, during their respective periods of fee
ownership, Developer and its heirs, executors, administrators, successors, transferees,
and assignees having or acquiring any right, title or interest in or to any part of the
Property and shall run with and burden such portions of the Property until terminated in
accordance with this Section 15. Until portions of the Property are released from the
burdens of this Agreement pursuant to this Section 15, the owners of fee title to the
Property shall expressly make the conditions and covenants contained in this
Agreement a part of any deed or other instrument conveying any interest in such
property. Upon issuance of final certificates of occupancy for one hundred percent
(100%) of the Affordable Units and recordation of the Regulatory Agreement against
the Rental Affordable Unit Property, the Property, except for the Affordable Unit
Property, shall be released from the burdens of this Agreement. [Modify per the
phasing plan (for instance, "all of the units in Phase I shall be released from the
burdens of this Agreement when all of the Affordable Units in Phase I have
received occupancy permits.")]
(b) Ownership Affordable Units. As Ownership Affordable Units are
sold to Eligible Households in compliance with this Agreement, and Resale Agreements
and City Deeds of Trust are recorded against the Affordable Units, the portions of the
Ownership Affordable Unit Property sold to Eligible Households shall be released from
the burdens of this Agreement.
(c) Rental Affordable Units. The burdens of this Agreement shall
remain in full force and effect and recorded against the Rental Affordable Unit Property,
and the Rental Affordable Unit Property shall be restricted for affordable housing use,
for the -year (_) term of this Agreement.
Section 16. Sale of Affordable Rental Units or Conversion to Condominiums.
Should the Developer or a future owner of the Rental Affordable Unit Property choose
to sell any Rental Affordable Unit, the unit shall be sold to an Eligible Purchaser at an
Affordable Ownership Price for the household income level established by the
Regulatory Agreement for the Rental Affordable Unit. The Affordable Rental Unit shall
first be offered for sale to the existing tenant at the Affordable Ownership Price. At
1442\02\319175.1_2.3.2006 10
least thirty (30) days before offering a Rental Affordable Unit for sale, the Developer or
current owner shall provide the City with written notice of the proposed sale of the
Rental Affordable Unit, including the number of bedrooms and required income level of
the unit, and shall otherwise comply with the procedures specified in Sections 7 through
10 of this Agreement in the sale of the Rental Affordable Unit. As Rental Affordable
Units are sold to Eligible Households in compliance with this Agreement, and Resale
Agreements and City Deeds of Trust are recorded against the Affordable Units, the
portions of the Rental Affordable Unit Property sold to Eligible Households shall be
released from the burdens of this Agreement.
Section 17. Default and Remedies. Failure of the Developer to cure any
default in the Developer's obligations under the terms of this Agreement within thirty
(30) days after the delivery of a notice of default from the City will constitute a default
under this Agreement and the requirements of the Inclusionary Policy and, in addition to
remedies for breach of this Agreement, the City may exercise any and all remedies
available to it under the Subdivision Map Act, the Inclusionary Policy, the Atascadero
Municipal Code, or otherwise, with respect to the Developer's failure to satisfy the terms
of this Agreement and the requirements of the Inclusionary Policy, including but not
limited to:
(a) withholding, conditioning, suspending, or revoking any permit, license,
subdivision approval or map, or other entitlement for the Development, including without
limitation final inspections for occupancy and/or certificates of occupancy;
(b) instituting against the Developer, or other parties, a civil action for
declaratory relief, injunction or any other equitable relief, or relief at law, including
without limitation an action to rescind a transaction and/or to require repayment of any
funds received in connection with such a violation;
(c) where one or more persons have received financial benefit as a result of
violation of this Agreement or of any requirement imposed under the Inclusionary Policy
or Ordinance, the City may assess, and institute legal action to recover as necessary, a
penalty in any amount up to and including the amount of financial benefit received, in
addition to recovery of the benefit received;
(d) prosecuting a misdemeanor against any person who has sold a residential
unit at a price exceeding the maximum allowed under this Agreement or to a household
not qualified under this Agreement, or who has otherwise violated the Inclusionary
Policy, or any other agreement, restriction or requirement authorized or imposed under
the Inclusionary Policy; or
(e) any other means authorized under the City of Atascadero Municipal Code.
Section 18. Remedies Cumulative. No right, power, or remedy given to the City
by the terms of this Agreement or the Inclusionary Policy is intended to be exclusive of
any other right, power, or remedy; and each and every such right, power, or remedy
shall be cumulative and in addition to every other right, power, or remedy given to the
City by the terms of any such document, the Inclusionary Policy, or by any statute or
otherwise against Developer and any other person. Neither the failure nor any delay on
1442\02\319175.12.3.2006 11
the part of the City to exercise any such rights and remedies shall operate as a waiver
thereof, nor shall any single or partial exercise by the City of any such right or remedy
preclude any other or further exercise of such right or remedy, or any other right or
remedy.
Section 19. Attorneys Fees and Costs. The City shall be entitled to receive
from the Developer or any person violating the requirements of this Agreement, in
addition to any remedy otherwise available under this Agreement or at law or equity,
whether or not litigation is instituted, the costs of enforcing this Agreement, including
without limitation reasonable attorneys' fees and the costs of City staff time.
Section 20. Appointment of Other Agencies. At its sole discretion, the City may
designate, appoint or contract with any other public agency, for-profit or non-profit
organization to perform some or all of the City's or Administering Agency's obligations
under this Agreement.
Section 21. Hold Harmless and Indemnification. Developer will indemnify and
hold harmless (without limit as to amount) City and its elected officials, officers,
employees, and agents in their official capacity (hereinafter collectively referred to as
"Indemnitees"), and any of them, from and against all loss, all risk of loss and all
damage (including expense) sustained or incurred because of or by reason of any and
all claims, demands, suits, actions, judgments and executions for damages of any and
every kind and by whomever and whenever made or obtained, allegedly caused by,
arising out of or relating in any manner to the Development, the Affordable Units, or
Developer's performance or non-performance under this Agreement, including without
limitation the construction or sale of any unit in the Development, and shall protect and
defend Indemnitees, and any of them with respect thereto, except to the extent arising
from the gross negligence or willful misconduct of the City. The provisions of this
Section 21 shall survive expiration or other termination of this Agreement or any release
of part or all of the Property from the burdens of this Agreement, and the provisions of
this Section 21 shall remain in full force and effect.
Section 22. Insurance Requirements. Until all Affordable Units have been sold
to Eligible Households in compliance with this Agreement, Developer and its
successors and assigns acquiring title to the Property shall obtain, at their expense,
comprehensive general liability insurance for development of the Affordable Units,
naming Indemnitees as additional named insureds, with aggregate limits of not less
than Two Million Dollars ($2,000,000), for bodily injury and death and property damage,
including coverage for contractual liability and products and completed operations,
purchased by Developer or its successors or assigns from an insurance company duly
licensed to engage in the business of issuing such insurance in the State, with a current
Best's Key Rating of not less than A-V, such insurance to be evidenced by an
endorsement which so provides and delivered to the City prior to the issuance of any
building permit for the Affordable Units.
Section 23. Notices. All notices required pursuant to this Agreement shall be in
writing and may be given by personal delivery or by registered or certified mail, return
receipt requested, to the party to receive such notice at the addresses set forth below:
1442\02\319175.12.3.2006 12
TO THE CITY:
City of Atascadero
6907 EI Camino Real
Atascadero, CA. 93422
Attn: Community Development Director
TO THE DEVELOPER:
Attn:
Any party may change the address to which notices are to be sent by notifying the other
parties of the new address, in the manner set forth above.
Section 24. Integrated Agreement. This Agreement constitutes the entire
Agreement between the parties and no modification shall be binding unless reduced to
writing and signed by the Parties.
Section 25. Duration and Amendment of Agreement. This Agreement shall
remain in effect for so long as the Property is subject to inclusionary housing obligations
pursuant to the Inclusionary Policy. This Agreement, and any section, subsection, or
covenant contained herein, may be amended only upon the written consent of the City
Council.
Section 26. No Joint Venture or Partnership. Nothing contained in this
Agreement or any document executed pursuant to this Agreement shall be construed
as creating a joint venture or partnership between City and Developer. Nothing
contained in this Agreement shall create or justify any claim against the City by any
person that Developer may have employed or with whom Developer may have
contracted relative to the purchase of materials, supplies or equipment, or the
furnishing or the performance of any work or services with respect to the Property or the
construction of the Development.
Section 27. Applicable Law and Venue. This Agreement shall be governed by
California law. Venue for any dispute arising out of this Agreement shall be San Luis
Obispo County.
Section 28. Waivers. Any waiver by the City of any obligation or condition in
this Agreement must be in writing. No waiver will be implied from any delay or failure by
the City to take action on any breach or default of Developer or to pursue any remedy
allowed under this Agreement or applicable law. Any extension of time granted to
Developer to perform any obligation under this Agreement shall not operate as a waiver
or release from any of its obligations under this Agreement. Consent by the City to any
act or omission by Developer shall not be construed to be a consent to any other or
1442\02\319175.1_2.3.2006 13
subsequent act or omission or to waive the requirement for the City's written consent to
future waivers.
Section 29. Title of Parts and Sections. Any titles of the sections or
subsections of this Agreement are inserted for convenience of reference only and shall
be disregarded in interpreting any part of the Agreement's provisions.
Section 30. Multiple Originals: Counterpart. This Agreement may be executed
in multiple originals, each of which is deemed to be an original, and may be signed in
counterparts.
Section 31. Recording of Agreement. The Developer shall cause this
Agreement to be recorded against the Property, in the Official Records of the County of
San Luis Obispo.
Section 32. Severability. In the event any limitation, condition, restriction,
covenant, or provision contained in this Agreement is to be held invalid, void or
unenforceable by any court of competent jurisdiction, or if any provision of this
Agreement is rendered invalid or unenforceable pursuant to any California statute which
became effective after the effective date of this Agreement, the remaining portions of
this Agreement shall nevertheless remain in full force and effect.
Section 33. Exhibits. The following exhibits are attached to this Agreement:
Exhibit A Legal Description of the Property
Exhibit B Calculation of Affordable Ownership Price
Exhibit C Calculation of Affordable Rent
Exhibit D Location of Affordable Units
Exhibit E Income Level, Size, Bedroom Count, and Tenure of
Inclusionary Units
1442\02\319175.12.3.2006 14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
DEVELOPER:
CITY:
a City of Atascadero, a municipal
corporation
California
WADE MCKINNEY, City Manager
Its:
APPROVED AS TO FORM AND LEGAL
EFFECT:
am
1442\02\319175.12.3.2006 15
PATRICK ENRIGHT, City Attorney
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On _,200_, before me, personally
appeared and, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
STATE OF CALIFORNIA )
) ss.
COUNTY OF ALAMEDA )
On _,200_, before me, personally
appeared and, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Notary Public in and for said State
(SEAL)
3/1/04
1442\02\319175.12.3.2006
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
1442\02\319175.12.3.2006 A-1
EXHIBIT B
CALCULATION OF AFFORDABLE OWNERSHIP PRICE
The Affordable Ownership Price for Ownership Affordable Units shall be calculated
using the procedures and formulas described below. The current City of Atascadero
Moderate, Lower, and Very Low Income Limits as established pursuant to the
Inclusionary Policy shall be used in these calculations. The interest rate used in these
calculations shall be determined by the City at its sole discretion.
1. Determine the area median income for a household size that is one person
larger than the number of bedrooms in the Affordable Ownership Unit.
2. Multiply the income limit as follows to obtain the annual housing allowance;
Very Low Income: 30% of 50% of the area median income, adjusted for
household size appropriate to the unit.
Lower Income: 30% of 70% of the area median income, adjusted for
household size appropriate to the unit.
Moderate Income: 30% of 120% of the area median income, adjusted
for household size appropriate to the unit.
3. Divide the annual housing allowance determined in the previous step by twelve
(12) to determine the monthly housing allowance;
4. Calculate the average monthly cost of property taxes, mortgage insurance,
homeowner's insurance, homeowners' association dues, assessments paid by
homeowners, utilities (excluding telephone), and a reasonable allowance for property
maintenance costs.
5. Subtract the amount calculated in Step 4 from the monthly housing allowance to
compute the amount available for mortgage payments.
6. Using a standard amortization table or formula, calculate the loan amount that
can be repaid over thirty (30) years with equal monthly payments equal to the amount
available for mortgage payments using the prevailing interest rate for thirty (30) years,
and assuming a fully amortized fixed rate mortgage.
7. Divide the loan amount calculated in the previous step by 0.95 to determine the
Affordable Ownership Price assuming a five percent (5%) down payment.
The following calculations are for a three (3) bedroom Moderate -Income Affordable Unit
based on the maximum income limits for San Luis Obispo County as of July 2004.
These calculations illustrate how the price of a Moderate Income Affordable Unit is
calculated.
1442\02\319175.1_2.3.2006 B-1
Step 1
Annual Moderate Income Limit for a 4 person household
$74,050
Step 2
30% of the Income Limit determined in Step 1
$22,215
Step 3
One twelfth of the amount calculated in Step 2
$1,851
Step 4
Calculate monthly cost of property taxes, mortgage insurance,
homeowner's insurance, homeowners' association dues,
assessments paid by homeowners, utilities, and a reasonable
allowance for property maintenance costs (est.)
$611
Step 5
Amount remaining for mortgage payments
$1,240
Step 6
Amount that can be financed with payment calculated in Step 5
$201,400
with a 30 year fixed-rate loan at a 6.25% interest rate
Step 7
Loan amount in Step 6 divided by 95% = Affordable Ownership
$212,000
Price
1442\02\319175.1 _2.3.2006 B-2
EXHIBIT C
CALCULATION OF AFFORDABLE RENT
The Affordable Rent for Rental Affordable Units shall be calculated using the
procedures and formulas described below. The current City of Atascadero Moderate,
Lower, and Very Low Income Limits as established pursuant to the Inclusionary Policy
shall be used in these calculations.
1. Determine the area median income for a household size that is one person
larger than the number of bedrooms in the Affordable Rental Unit.
2. Multiply the income limit as follows to obtain the annual housing allowance;
Very Low Income: 30% of 50% of the area median income, adjusted for
household size appropriate to the unit.
Lower Income: 30% of 60% of the area median income, adjusted for
household size appropriate to the unit.
Moderate Income: 30% of 120% of the area median income, adjusted
for household size appropriate to the unit.
3. Divide the annual housing allowance determined in the previous step by twelve
(12) to determine the monthly housing allowance;
4. Calculate the average monthly cost of utilities (excluding telephone) and all
mandatory fees charged for use of the property.
5. Subtract the amount calculated in Step 4 from the monthly housing allowance
calculated in Step 3 to compute the Affordable Rent.
1442\02\319175.1_2.3.2006 C-1
EXHIBIT D
LOCATION OF AFFORDABLE UNITS
Affordable Units: Insert Legal Description(s) of Affordable Unit Property or if no
legal description is available, attach map of Property showing general location
and distribution of Affordable Units. Distinguish between Ownership Affordable
Unit Property and Rental Affordable Unit Property, if applicable.
1442\02\319175.1_2.3.2006 C-1
EXHIBIT E
INCOME LEVEL, SIZE, TENURE, AND BEDROOM COUNT
OF AFFORDABLE UNITS
INCOME
TYPE OF UNIT
NUMBER
TENURE
NUMBER OF
SQUARE
ASSUMED
LEVEL OF
(single family
OF UNITS
(rental or
BEDROOMS
FOOTAGE
HOUSEHOLD
BUYERS
detached, single
ownership)
SIZE
family attached,
or condominium
Moderate
Income
Lower
Income
Very Low
Income
1442\02\319175.1 _2.3.2006 E-1
RESALE AND REFINANCING RESTRICTION AGREEMENT
AND OPTION TO PURCHASE
CITY OF ATASCADERO
ADMINISTRATIVE CHECKLIST
(MODERATE -INCOME INCLUSIONARY UNITS — EQUITY SHARING — CALHFA AND
FANNIE MAE COMPATIBLE)
(Remove Upon Completion)
BLANK LINES: CHECKLIST
Buyer's Name, Address of Property Purchased, Affordable Price, and Fair
Market Value, p. 1, heading
Date, p. 1, first paragraph
Buyer's Name, p. 1, first paragraph
Amount of City Loan, p. 2, Recital C
First Lender's Name, p. 2, Recital E
Recorder's Serial Number for the First Lender Deed of Trust, p. 2, Recital
E
Property Address, p. 4, Section 2
Signatures, p. 19
Notary
Include Exhibit A, Property Description
1442\02\3 03 9 8 0.21.9.2006
RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 27383
When Recorded Mail To:
City of Atascadero
6907 EI Camino Real
Atascadero, CA 93422
Attention: Community Development Director
RESALE AND REFINANCING RESTRICTION AGREEMENT AND OPTION TO
PURCHASE
Owner:
Property Address:
Affordable Price:
Fair Market Value:
This Resale and Refinancing Restriction Agreement and Option to Purchase (the
"Agreement") is entered into as of this day of , 200_, by and
between the City of Atascadero, a municipal corporation (the "City"), and
(referred to in this Agreement sometimes as "Buyer"
and sometimes as "Owner").
RECITALS
A. The City has adopted an Inclusionary Housing Policy (the "Inclusionary
Policy") to increase homeownership opportunities available and affordable to moderate -
income households.
B. Buyer intends to purchase the property located in the City of Atascadero,
County of San Luis Obispo, State of California, more particularly described in Exhibit A
attached hereto and incorporated herein (the "Property").The Inclusionary Policy has
enabled the Buyer to purchase a home at a price which is affordable to moderate -
1442\02\3 03 9 8 0.21.9.2006
income families (the "Affordable Price"). The Affordable Price is lower than the fair
market value of the Property.
C. The "City Loan" is equal to the difference between the Affordable Price
and the amount reasonably determined by the City to be the fair market value of the
Property and has a principal amount of $ . The City Loan is evidenced
by a promissory note in the amount of the City Loan (the "City Note"). The City Note
also evidences certain obligations under the City Loan. The City Note is secured by a
deed of trust on the Property (the "City Deed of Trust").
D. To ensure compliance with the Inclusionary Policy, the Buyer is required
by the City or the City's designee to execute this Agreement as a condition to Buyer's
purchase of the Property. The Buyer has agreed to execute and comply with this
Agreement in consideration of the Buyer's purchase of the Property at the Affordable
Price. This Agreement ensures that the terms of the City Note and City Deed of Trust
are complied with, that certain other provisions of the Inclusionary Policy are complied
with, and that the City be given an option to purchase the Property upon transfer or
upon the occurrence of certain events of default.
E. The Buyer is receiving a First Lender Loan (the "First Lender Loan") from
(the "First Lender"). The First Lender Loan is secured
by a deed of trust executed by the Buyer in favor of First Lender and recorded in the
County of San Luis Obispo concurrently with this Agreement and assigned Recorder's
Serial No. (the "First Lender Deed of Trust").
[If Owner is receiving more than one purchase money loan, revise as
follows: The Owner is receiving [insert number] First Lender Loans from
and (collectively, the "First Lender") for
purchase of the Property (collectively, the "First Lender Loan"). The First Lender
Loan is secured by a deed of trust executed by the Owner and recorded in the
County of San Luis Obispo concurrently with this Agreement and assigned
Recorder's Serial No. and a deed of trust executed by the Owner
and recorded in the County of San Luis Obispo concurrently with this Agreement
and assigned Recorder's Serial No. [revise if more than two deeds
of trust] (collectively, the "First Lender Deed of Trust").]
NOW, THEREFORE, in consideration of the benefits received by the
Buyer and the City hereunder, the Buyer and the City agree, as follows:
DEFINITIONS AND EXHIBITS
A. The following terms are specially defined for this Agreement, and their
definitions can be found in the sections indicated below:
(1) "Advances" — Section 13B
2
1442\02\303 980.2 1.9.2006
(2) "Affordable Price" — Recital B
(3) "Agreement" — First sentence of the Agreement on Page 1
(4) "Assignee" — Section 7B
(5) "Buyer" or "Owner" — First sentence of the Agreement on Page 1
(6) "CaIHFA" — Section 22B
(7) "City" - First sentence of the Agreement on Page 1
(8) "City Deed of Trust" - Recital C
(9) "City Loan" — Recital C
(10) "City Note" — Recital C
(11) "Consent to Transfer" —Section 10B
(12) "Default" — Section 15A
(13) "Domestic Partner" — Section 6B
(14) "Excess Rents" — Section 4B
(15) "Fair Market Value" - Section 14
(16) "First Lender" - Recital E
(17) "First Lender Deed of Trust" - Recital E
(18) "First Lender Loan" - Recital E
(19) "HUD" — Section 22A
(20) "Inclusionary Policy" — Recital A
(21) "Notice of Exercise" - Section 10A
(22) "Notice of Intent to Transfer" — Section 9A
(23) "Option" — Section 7A
(24) "Option Event" — Section 8
(25) "Owner" or 'Buyer" - First sentence of the Agreement on Page 1
(26) "Property" - Recital B and Section 2
3
1442\02\303980.21.9.2006
(27) "Transaction Fee" — Section 7C
(28) "Transfer'- Section 6A
B. The following exhibits are attached to this Agreement:
(1) Exhibit A: Legal Description of the Property
(2)
Exhibit B:
Form of Owner Occupancy Certification
(3)
Exhibit C:
Form of Renter Occupancy Certification
(4)
Exhibit D:
Form of Owner's Notice of Intent to Transfer
(5) Exhibit E: Form of Owner's Request for City Subordination to
Refinanced First Lender Loan
2. DESCRIPTION OF PROPERTY
This Agreement concerns the real property commonly known as
, California , which is more fully described
in Exhibit A attached hereto and incorporated in this Agreement by reference (the
"Property").
3. BUYER CERTIFICATIONS; OWNER OCCUPANCY REQUIREMENT
The Buyer certifies that the financial and other information previously provided in
order to qualify to purchase the Property is true and correct as of the date first written
above. The Buyer shall occupy the Property as the Buyer's principal place of residence
unless the City approves the rental of the Property pursuant to the provisions of Section
4. The Buyer shall be considered as occupying the Property if the Buyer is living in the
unit for at least ten (10) months out of each calendar year. On or before February 1 of
each calendar year, the Buyer shall provide an annual written certification to the City, in
the form shown in the attached Exhibit B, that the Buyer is occupying the Property as
his or her principal place of residence, unless the City has approved the rental of the
Property pursuant to the provisions of Section 4.
4. RENTAL OR LEASE OF PROPERTY
A. The Owner shall not rent or lease the Property to another party, unless
such lease is first approved in writing by the Community Development Director or
designee. The Community Development Director or designee shall approve the leasing
of the Property only if ALL of the following conditions are met: (1) the tenant's
4
1442\02\303980.21.9.2006
household income does not exceed that of a Moderate -Income Household; and (2) the
rent for the Property does not exceed the lesser of: (i) thirty percent (30%) of the income
of the tenant household that is renting the Property, or (ii) the Owner's monthly cost of
principal and interest on the First Lender Loan, homeowners' dues, if any, and property
insurance and property taxes associated with the Property. On or before February 1 of
each calendar year, the Buyer shall provide an annual written certification to the City, in
the form shown in the attached Exhibit C, to verify that the rent for the Property does not
exceed that permitted by this Agreement. The City may impose a reasonable fee for
review and monitoring of leases pursuant to this Section.
B. Any lease of the Property in violation of this Agreement is prohibited and
shall be a default under this Agreement and the City Deed of Trust. The Owner further
agrees that, in the event the Owner leases the Property to a third party in violation of
this Section 4, any excess rents ("Excess Rents") paid to the Owner by the lessee over
the rent allowable in this Section 4 shall be due and payable to the City immediately
upon receipt by the Owner. Such Excess Rents shall be considered a recourse debt of
the Owner to the City, which the City may collect by legal action against the Owner
and/or by foreclosure under the City Deed of Trust.
5. MAINTENANCE AND INSURANCE REQUIREMENTS; NO NUISANCE
A. The Buyer shall maintain the Property, including landscaping, in good
repair and in a neat, clean and orderly condition and shall not commit waste or permit
deterioration of the Property.
B. The Buyer shall not permit any condition to exist on the Property that is
defined as. a nuisance by the Atascadero Municipal Code, nor shall the Buyer permit the
Property to be used for the commission of any misdemeanor or felony.
C. The Buyer shall maintain a standard all risk property insurance policy
equal to the replacement value of the Property (adjusted every five (5) years by
appraisal, if requested by the City), naming the City as an additional insured. Additional
insurance requirements are set forth in the City Deed of Trust.
6. TRANSFER OF THE PROPERTY; RESTRICTIONS ON RESALE OF
PROPERTY
A. Any Transfer of the Property will be subject to the provisions of this
Agreement including, without limitation, the Option described in Section 7 of this
Agreement. "Transfer" means any sale, assignment, or transfer, voluntary or
involuntary, of any interest in the Property, including, but not limited to, a fee simple
interest, a joint tenancy interest, a life estate, a leasehold interest (unless approved
pursuant to Section 4 of this Agreement), or an interest evidenced by a land contract by
which possession of the Property is transferred and Owner retains title. Any Transfer
that does not satisfy the provisions of this Agreement is prohibited.
5
1442\02\303980.21.9.2006
B. Notwithstanding Section 6A, the following shall not be considered a
Transfer for the purposes of this Agreement, but all such transferees shall continue to
be bound by the requirements of this Agreement: (i) a good faith Transfer by an Owner
to a spouse or Domestic Partner where the spouse or Domestic Partner becomes the
co-owner of the Property; (ii) a Transfer between spouses as part of a dissolution
proceeding, or between Domestic Partners as part of the dissolution of a domestic
partnership; (iii) a Transfer by an Owner into an inter vivos trust in which Owner is the
beneficiary; (iv) Transfers by devise or inheritance to an existing spouse, child, or
Domestic Partner of Owner following death of Owner; (v) a Transfer by devise,
inheritance, or operation of law on the death of a joint tenant; (vi) refinance of the First
Lender Loan in accordance with Section 23 of this Agreement; or (vii) Transfer by deed
of trust or imposition of a lien subordinate to the City Deed of Trust. For purposes of
this Section 6, "Domestic Partner" shall be as defined in Section 297 of the California
Family Code or successor provision. An individual shall be considered a Domestic
Partner of Owner upon presentation of the Declaration of Domestic Partnership filed
with the California Secretary of State.
C. Owner shall provide notice to the City of any Transfers described in
Sections 6B(i) through (vii) of this Agreement no later than fifteen (15) days before the
sale, assignment, or other Transfer occurs, except where the Transfer is by devise,
inheritance, or operation of law after death of the Owner, in which event notice shall be
provided within thirty (30) days of the date of Transfer.
7. GRANT OF OPTION TO PURCHASE; ASSIGNMENT OF OPTION BY CITY
A. In consideration of the economic benefits received by the Owner resulting
from purchase and ownership of the Property, Owner hereby grants and gives to the
City a right to purchase all of Owner's right, title and interest in and to the Property
("Option") at Fair Market Value upon the occurrence of the events specified in Section 8
of this Agreement, subject to the terms and conditions included in this Agreement.
B. The City may assign the Option to a low or moderate income household
who meets the eligibility qualifications established by the City; or to another public
agency or non-profit organization (the "Assignee"). The City's assignment of the Option
shall not extend any time limits with respect to the exercise of the Option or the
purchase of the Property. Notice of any such assignment shall be given to the
beneficiary of record under any deed of trust that secures any financing used to
purchase the property.
C. If the City or the Assignee exercises the Option, the City shall charge a
two percent (2%) transaction fee (the "Transaction Fee"), payable in equal shares by
the Owner and the Assignee.
6
1442\02\303980.21.9.2006
8. EVENTS GIVING RISE TO RIGHT TO EXERCISE OPTION
A. The City shall have the right to exercise or to assign its Option if either of
the following events occurs (an "Option Event"):
(1) The City receives a Notice of Intent to Transfer (defined in Section
9 of this Agreement); or
(2) A Default occurs as defined in Section 15A of this Agreement.
B. If the City receives a Notice of Intent to Transfer, the City may exercise its
Option pursuant to the procedures in Sections 10 and 13 of this Agreement. If a Default
occurs, the City may exercise its Option pursuant to the procedures in Section 17 of this
Agreement.
9. NOTICE OF INTENT TO TRANSFER; PREPARATION OF PROPERTY FOR
SALE
A. Notice of Intent to Transfer. If the Owner desires to Transfer the Property,
the Owner shall promptly give City written notice of such intent (the "Notice of Intent to
Transfer") in the form shown in Exhibit D attached to this Agreement. The Notice of
Intent to Transfer shall be sent to the City by certified mail, return receipt requested, at
the address provided in Section 29 of this Agreement. The Owner's Notice of Intent to
Transfer shall include the following information:
(1) the address of the Property;
(2) the date of purchase of the Property by the Owner;
(3) the purchase price for the Property paid by the Owner at the time of
his/her purchase;
(4) a copy of the HUD -1 Settlement Statement or equivalent document
from the close of escrow on the Owner's purchase of the Property;
(5) the date on which Owner intends to vacate the Property;
(6) the date the Property will be placed on the market; and
(7) the name and phone number of the person to contact to schedule
inspection of the Property by the Agency.
B. The Owner may not wish to contract with a real estate broker to sell
the Property until the Owner has received from the City a Notice of Exercise or
Consent to Transfer pursuant to Section 10 of this Agreement, as the services of a
broker will not be required if the City exercises the Option to purchase the
Property and because the City will charge a transaction fee as detailed in Section
7
1442\02\303980.21.9.2006
7C of this Agreement, that will be payable by Owner and the Assignee, in addition
to any broker's fees.
C. Following delivery to the City by the Owner of the Notice of Intent to
Transfer, the Owner shall prepare the Property for sale, as follows:
(1) within thirty (30) days of delivery of the Notice of Intent to Transfer,
the Owner shall obtain and deliver to the City a current written report of inspection of the
Property by a licensed structural pest control operator;
(2) within thirty (30) days of the date of the Owner's Notice of Intent to
Transfer, the Owner shall allow the City, or its designee, to inspect the Property to
determine its physical condition, and, if requested by the City, following such inspection
the Owner shall obtain and deliver to the City a home inspection report prepared by a
licensed home inspector. Before inspecting the Property, the City shall give Owner not
less than forty-eight (48) hours written notice of the date, time and expected duration of
the inspection. The inspection shall be conducted between the hours of 9:00 a.m. and
5:00 p.m., Monday through Friday, unless another date and time is mutually agreed to by
the parties. Owner shall make the Property available for inspection on the date and at
the time specified in the City's request for inspection;
(3) If the Property is vacant, the Owner shall maintain utility
connections until the close of escrow on the Transfer;
(4) In the event of exercise of the Option by the City or its Assignee,
the Owner shall permit a final walk-through of the Property by the City and/or its
Assignee in the final three (3) days prior to close of escrow on the Transfer.
10. CITY RESPONSE TO OWNER'S NOTICE OF INTENDED TRANSFER
The City shall respond in writing to the Owner's Notice of Intent to Transfer within thirty
(30) days of City receipt of a complete Owner's Notice of Intent to Transfer that includes
all information required under Section 9 of this Agreement, including City receipt of the
pest control report and home inspection report (if any) required pursuant to Section 9C
of this Agreement. The City shall inform the Owner of the City's election to proceed
under one of the following two alternatives:
A. City Exercise of Option. The City's response may notify the Owner that
the City elects to exercise the Option, or assign its right to another public agency or
non-profit organization or low or moderate -income household, to purchase the Property
("Notice of Exercise"). The Notice of Exercise shall include the City's calculation of the
Fair Market Value as defined in Section 14 of this agreement; all outstanding sums,
including principal and interest, due on the City Note; and the amount of the Transaction
Fee described in Section 7C.
8
1442\02\3 03 9 8 0.21.9.2006
B. Consent to Transfer. Alternatively, the City's response may notify the
Owner that the City will not at this time exercise the Option to purchase the Property
and that the Owner may proceed to Transfer the Property through sale (a "Consent to
Transfer"). The Consent to Transfer shall include the outstanding principal due on the
City Note and shall describe the procedure for calculating all additional sums due on the
City Note.
11. REPAYMENT OF CITY NOTE
Upon any Transfer of the Property (including Transfer following exercise of the Option
by the City or Assignee), all outstanding principal and interest due, if any, under the City
Note shall be repaid pursuant to the City Note.
12. SALE OF PROPERTY BY OWNER IF CITY CONSENTS TO TRANSFER
A. If the City has provided a Consent to Transfer for the Property, then, at
least fifteen (15) days prior to the close of escrow for the Transfer of the Property, the
Owner shall provide the City with the following documentation:
(1) the name and address of the purchaser;
(2) the final sales contract and all other documents setting forth all the
terms of the sale of the Property, including at least (a) the sales price; (b) the price to be
paid for the Owner's personal property or services, if any, and any credits, allowances or
other consideration, if any; and (c) the amount of any real estate commission to be paid.
(3) a copy of the appraisal;
(4) a written declaration from the Owner and the purchaser under
penalty of perjury, in a form acceptable to the City, that the sale shall be closed in
accordance with the terms of the sales contract and other documents submitted to the
City and that the property has been sold at Fair Market Value. The certification shall
also provide that neither the purchaser nor any other party has paid nor will pay to the
Owner, nor has the Owner received nor will receive from the purchaser or any other
party, money or other consideration, including personal property, in addition to what is
included in the sales contract and documents submitted to the City. The written
certification shall also include a provision that in the event a Transfer is made in violation
of the terms of this Agreement or false or misleading statements are made in any
documents or certification submitted to the City, the City shall have the right to exercise
its Option or file an action at law or at equity as may be appropriate. All costs and legal
expenses shall be borne by the prevailing party;
9
1442\02\3 03 98 0.21.9.2006
(5) The name of the title company escrow holder for the sale of the
Property, the escrow number, and name, address, and phone number of the escrow
officer.
B. Upon the close of escrow, the Owner shall provide the City with a copy of
the HUD -1 Settlement Statement showing the purchase price paid for the Property and
all other payments from escrow, escrow instructions, and any other documents which
the City may reasonably request.
13. EXERCISE OF CITY OPTION
A. Escrow. Promptly after delivering a Notice of Exercise, the City shall open
an escrow account for its purchase of the Property. Close of escrow shall take place on
such date which is the later to occur of the following: (a) forty-five (45) days after a
Notice of Exercise has been delivered by City to Owner, or (b) ten (10) days after
Owner has done all acts and executed all documents required for close of escrow.
B. Deposit of Funds Into Escrow. Prior to the close of escrow, the City shall
ensure that funds are deposited to pay the Fair Market Value of the Property, as defined
in Section 14 of this Agreement, minus any principal and interest due on the City Note,
and minus all Advances previously paid by the City. "Advances" include any payment by
the City of costs including, but not limited to, principal, interest, taxes, assessments,
insurance premiums, homeowners' fees, and associated late fees, costs, interest,
attorneys' fees, pest inspections, resale inspections, and other expenses related to the
Property, which Owner has failed to pay or has permitted to become delinquent.
Closing costs and title insurance shall be paid by City and Owner pursuant to the
custom and practice in the County of San Luis Obispo at the time of the opening of
escrow, or as may be provided otherwise by mutual agreement. Owner agrees to do all
acts and execute all documents necessary to enable the close of escrow and transfer of
the Property to the City.
C. Removal of Exceptions to Title. The Owner shall convey title to the
Property at the close of escrow free and clear of any mortgage, lien, or other
encumbrance, unless approved in advance in writing by the City. If the amounts
deposited into escrow by the City are not sufficient to satisfy all liens and encumbrances
recorded against the Property, then the Owner shall deposit into escrow the additional
sums that are required to remove the liens and encumbrances.
14. DETERMINATION OF FAIR MARKET VALUE
When the City chooses to exercise its Option and when the Owner wishes to refinance
the First Lender Loan as described in Section 23 of this Agreement, the "Fair Market
Value" of the Property shall be as determined by a certified MAI or other qualified real
estate appraiser approved in advance by the City. If possible, the appraisal shall be
based upon the sales prices of comparable properties sold in the market area during the
10
1442\02\3 03 980.2 1.9.2006
preceding three (3) -month period. If City chooses to exercise its Option after receiving
a Notice of Intent to Transfer, the cost of the appraisal shall be paid by the City. In all
other circumstances, the cost of the appraisal shall be paid by the Owner. Nothing in
this Section 14 shall preclude the Owner and the City from establishing the Fair Market
Value of the Property by mutual agreement, based on sales of comparable properties,
in lieu of an appraisal.
15. DEFAULTS
A. The following events shall constitute a "Default" by the Owner under this
Agreement:
(1) The City determines that the Owner has made a misrepresentation
to obtain the benefits of purchasing the Property or in connection with its obligations
under this Agreement.
(2) The Owner actually Transfers, or attempts to Transfer, the Property
in violation of this Agreement. The City's rights to exercise its Option shall survive any
Transfer of the Property by the Owner in violation of this Agreement. As long as the
Option has not been abandoned pursuant to Section 18 of this Agreement, any actual or
attempted Transfer of the Property in violation of the terms and conditions of this Option
shall be voidable at the election of the City,
(3) The Owner fails to owner -occupy the Property in violation of
Section 3 of this Agreement, and such failure continues following written notice by the
City and sixty (60) days opportunity to cure following the date of such notice.
(4) The Owner rents or leases the Property in violation of Section 4 of
this Agreement.
(5) The Owner otherwise fails to comply with the requirements of this
Agreement, the City Note, or the City Deed of Trust and such violation is not corrected to
the satisfaction of the City within ten (10) days after written notice to the Owner.
(6) A Notice of Default is issued under any financing secured by the
Property, or the City receives any other notice of default pursuant to Civil Code Section
2924b.
Property; (7) Judicial foreclosure proceedings are commenced regarding the
(8) The Owner executes any deed in lieu of foreclosure transferring
ownership of the Property;
(9) A proceeding or action in bankruptcy, whether voluntary or
involuntary, is commenced pursuant to Title 11 of the United States Code or other
11
1442\02\303980.21.9.2006
bankruptcy statute, or any other insolvency, reorganization, arrangement, assignment for
the benefit of creditors, receivership or trusteeship, in which the Owner is the debtor, or
assigns assets for the benefit of creditors.
B. Upon a declaration of Default by the City under this Agreement, the City
may:
(1) Declare all sums due under the City Note immediately due and
payable without further demand;
(2) Invoke the power of sale under the City Deed of Trust;
(3) Apply to a court of competent jurisdiction for such relief at law or in
equity as may be appropriate;
(4) Declare a Default under the City Note and City Deed of Trust and
pursue all City remedies under the City Deed of Trust; and
(5) Exercise the Option pursuant to Section 17 of this Agreement.
16. NOTICE OF DEFAULT AND FORECLOSURE
A request for notice of default and any notice of sale under any deed of trust or
mortgage with power of sale encumbering the Property shall be recorded by the City in
the Office of the Recorder of the County of San Luis Obispo for the benefit of the City.
17. EXERCISE OF OPTION UPON DEFAULT
A. Time Period for City Notices. The City must deliver a Notice of Exercise, if
applicable, on or before sixty (60) days after the date that the City receives notification
of any Default. For purposes of computing commencement of the delivery periods, the
City shall be deemed to have notification of a Default on the following dates:
(1) If the Option Event is the recordation of a notice of default under a
mortgage which is senior or junior in lien priority to this Agreement, a summons and
complaint or other pleading, or other writing specifically stating that a Default has
occurred, then the City shall be deemed to have received notice of the Default on the
date that the City actually received the notice of default, summons and complaint, or
writing.
(2) If an Option Event is triggered by some other Default by Owner
hereunder, the City shall be deemed to have notification of the Option Event on the date
the City issues a written notice to Owner that the Default constitutes an Option Event.
12
1442\02\3 03 9 8 0.21.9.2006
(3) If there is a stay or injunction imposed by court order precluding the
City from exercising the Option within the applicable time period, then the running of
such period shall be tolled until such time as the stay is lifted or injunction dissolved and
the City has been given written notice thereof, at which time the period for exercise of
the Option shall again begin to run.
B. Right of City to Reinstate Mortgages. If the Option Event is the
recordation of a notice of default, then the City shall be deemed to be Owner's
successor in interest under California Civil Code Section 2924c (or successor sections)
solely for the purposes of reinstating any mortgage on the Property that has led to the
recordation of the notice of default. As Owner's deemed successor in interest, the City
shall be entitled, but not required, to pay all amounts of principal, interest, taxes,
assessments, insurance premiums, advances, costs, attorneys' fees and expenses
required to cure the default.
18. NOTICE OF OPTION ABANDONMENT AND TERMINATION OF AGREEMENT
A. If the, City fails to deliver a Notice of Exercise within the time periods
stated in this Agreement, then the Option shall terminate, and Owner may Transfer the
Property to a third party. Thereafter, upon request by Owner and simultaneously with
the close of escrow and repayment of all sums due under the City Note in accordance
with Section 11 of this Agreement, the City shall record in the Office of the Recorder of
San Luis Obispo County a notice of option abandonment and termination of this
Agreement, which shall declare that the provisions of the Option and this Agreement are
no longer applicable to the Property.
B. If this Agreement shall otherwise terminate in accordance with Section 11
of this Agreement, upon request by Owner, the City shall record in the Office of the
Recorder of San Luis Obispo County a notice of option abandonment and termination of
this Agreement, which shall declare that the provisions of the Option and this
Agreement are no longer applicable to the Property.
C. If the City fails to record a notice of option abandonment and termination
of this Agreement, the sole remedy of Owner shall be to obtain a judicial order
instructing such a recordation, and Owner shall have no right to damages against the
City for failure to record such notice promptly.
19. NONLIABILITY OF THE CITY
A. No Obligation to Exercise Option. The City shall have no obligation to
exercise any option granted it under this Agreement. In no event shall the City become
in any way liable or obligated to the Owner or any successor -in -interest to the Owner by
reason of its Option nor shall the City be in any way obligated or liable to the Owner or
any successor -in -interest to the Owner for any failure to exercise its Option.
13
1442\02\303980.21.9.2006
B. Nonliability for Negligence, Loss or Damage. Owner acknowledges,
understands and agrees that the relationship between Owner and the City is solely that
of an owner and an administrator of a City affordable housing program, and that the City
does not undertake or assume any responsibility for or duty to Owner to select, review,
inspect, supervise, pass judgment on, or inform Owner of the quality, adequacy or
suitability of the Property or any other matter. The City owes no duty of care to protect
Owner against negligent, faulty, inadequate or defective building or construction or any
condition of the Property, and Owner agrees that neither Owner, or Owner's heirs,
successors, or assigns shall ever claim, have or assert any right or action against the
City for any loss, damage, or other matter arising out of or resulting from any condition
of the Property and will hold the City harmless from any liability, loss or damage for
these things.
C. Indemnity. Owner agrees to defend, indemnify, and hold the City
harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and
reasonable attorneys fees that the City may incur as a direct or indirect consequence of:
(1) Owner's default, performance, or failure to perform any obligations as and when
required by this Agreement or the City Deed of Trust; (2) the failure at any time of any of
Owner's certifications, representations, or warranties to the City to be true and correct;
or (3) Owner's purchase of the Property.
20. TERM OF AGREEMENT
All the provisions of this Agreement, including the benefits and burdens, run with the
Property and this Agreement shall bind, and the benefit hereof shall inure to, the Owner,
his or her heirs, legal representatives, executors, successors in interest and assigns,
and to the City and its successors, until the earlier of (i) thirty (30) years from the date of
this Agreement, (ii) the date of Transfer of the Property to the City or another purchaser
in compliance with this Agreement, or (iii) payment of all principal and interest due
under the City Note pursuant to the terms of the City Note.
21. SUPERIORITY OF AGREEMENT
The Owner covenants that he or she has not, and will not, execute any other agreement
with provisions contradictory to or in opposition to the provisions in this Agreement, and
that, in any event, this Agreement is controlling as to the rights and obligations between
and among the Owner, the City and their respective successors.
22. SUBORDINATION
Notwithstanding any other provision hereof, the provisions of this Agreement shall be
subordinate to the lien of the First Lender Deed of Trust and shall not impair the rights
of the First Lender, or First Lender's assignee or successor in interest, to exercise its
remedies under the First Lender Deed of Trust in the event of default under the First
14
1442\02\3 03 9 80.2 1.9.2006
Lender Deed of Trust by the Owner. Such remedies under the First Lender Deed of
Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of
foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, this
Agreement shall be forever terminated and shall have no further effect as to the
Property or any transferee thereafter; provided, however, if the holder of such First
Lender Deed of Trust acquired title to the Property pursuant to a deed or assignment in
lieu of foreclosure and no notice of default was recorded against the Property by such
holder in connection therewith, this Agreement shall automatically terminate upon such
acquisition of title, only if (i) the City has been given written notice of default under such
First Lender Deed of Trust with a sixty (60) -day cure period (which requirement shall be
satisfied by recordation of a notice of default under California Civil Code section 2924)
and (ii) the City or its designee shall not have cured the default within such sixty (60) -
day period or commenced to cure and given its firm commitment to complete the cure in
form and substance acceptable to the First Lender.. Owner agrees to record any
necessary documents to effect the termination of this Agreement, if applicable.
A. HUD -Insured Mortgages. If Owner has acquired the Property by a
mortgage insured by the Secretary of the United States Department of Housing and
Urban Development ("HUD"), and a notice of default has been recorded pursuant to
California Civil Code section 2924 (or successor provisions), this Option shall
automatically terminate if title to the Property is transferred by foreclosure or deed -in -
lieu of foreclosure, or if the insured mortgage is assigned to the Secretary.
B. CaIHFA Mortgages. If Owner has obtained financing used to purchase
the Property which is held by the California Housing Finance Agency ("CaIHFA"), all
such financing held by CaIHFA and used to purchase the Property, whether secured by
one or multiple deeds of trust from the Owner and held by CaIHFA, shall be deemed a
"First Lender Loan" for purposes of this Agreement.
23. REFINANCE OF FIRST LENDER LOAN
A. This Agreement and the City Deed of Trust shall be subordinated to a
refinanced First Lender Deed of Trust, provided that: (i) following such refinance, the
principal amount of all debt secured by the Property, including the principal and accrued
interest on the City Note, will not exceed either (a) ninety percent (90%) of the Fair
Market Value of the Property, or (b) the existing balance of the original First Lender
Loan, whichever is greater; and (ii) the refinanced First Lender Loan is fully amortized
with a fixed rate of interest for a minimum five (5) year period, permits no negative
amortization, and requires no balloon payments. If the existing balance of the original
First Lender Loan plus the principal and accrued interest on the City Note exceeds
ninety percent (90%) of the Fair Market Value of the Property, then the refinanced First
Lender Loan must reduce the Owner's principal and interest payments on the First
Lender Loan. A form for use by the Owner in requesting City subordination to a
refinanced First Lender Deed of Trust is attached as Exhibit E to this Agreement.
15
1442\02\303980.21-9.2006
B. As a condition for subordination of this Agreement and the City Deed of
Trust, a request for notice of default regarding the refinanced First Lender Loan shall be
recorded in the Office of the Recorder of the County of San Luis Obispo for the benefit
of the City.
C. The City and the Owner agree that the requirements of this Section 23 are
necessary to ensure the continued affordability of the Property to Owner and to
minimize the risk of loss of the Property by Owner through default and foreclosure of
mortgage loans.
24. NONDISCRIMINATION
The Owner covenants by and for itself and its successors and assigns that there shall
be no discrimination against or segregation of a person or of a group of persons on
account of race, color, religion, creed, age, disability, sex, sexual orientation, marital
status, ancestry or national origin in the sale, transfer, use, occupancy, tenure or
enjoyment of the Property, nor shall the Owner or any person claiming under or through
the Owner establish or permit any such practice or practices of discrimination or
segregation with reference to the use, occupancy, or transfer of the Property. The
foregoing covenant shall run with the land.
25. HUD FORBEARANCE RELIEF
Notwithstanding other provisions of this Agreement, the City Option on Default pursuant
to Section 17 of this Agreement shall not be exercised by the City when a deed of trust
insured by HUD is secured by the Property, and: (i) the owner is undergoing
consideration by HUD for assignment forbearance relief; or (ii) the owner is undergoing
consideration for relief under HUD's Temporary Mortgage Assistance Payment (TMAP)
program.
26. INVALID PROVISIONS
If any one or more of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, then such provision or
provisions shall be deemed severable from the remaining provisions contained in this
Agreement, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
16
1442\02\303980.21.9.2006
27. CONTROLLING LAW
The terms of this Agreement shall be interpreted under the laws of the State of
California. The venue for any legal action pertaining to this Agreement shall be San
Luis Obispo County, California.
28. NO WAIVER
No delay or omission in the exercise of any right or remedy of City upon any default by
Owner shall impair such right or remedy or be construed as a waiver. The City's failure
to insist in any one or more instance upon the strict observance of the terms of this
Agreement shall not be considered a waiver of the City's right thereafter to enforce the
provisions of the Agreement. The City shall not waive its rights to enforce any provision
of this Agreement unless it does so in writing, signed by an authorized agent of the City.
29. NOTICES
All notices required herein shall be sent by certified mail, return receipt requested or
express delivery service with a delivery receipt and shall be deemed to be effective as
of the date received or the date delivery was refused as indicated on the return receipt
as follows:
To the Owner:
At the address of the Property.
To the City:
City of Atascadero
6907 EI Camino Real
Atascadero, CA 93422
Attention: Community Development Director
The parties may subsequently change addresses by providing written notice of the
change in address to the other parties in accordance with this Section 29.
30. INTERPRETATION OF AGREEMENT
The terms of this Agreement shall be interpreted so as to avoid speculation on the
Property.
31. SPECIFIC PERFORMANCE
Owner acknowledges that any breach in Owner's performance of Owner's obligations
under this Agreement or in the transfer of the Property to the City shall cause
17
1442\02\303980.21.9.2006
irreparable harm to the City. Owner agrees that the City is entitled to equitable relief in
the form of specific performance upon its exercise of the Option, and that an award of
damages shall not be adequate to compensate the City for Owner's failure to perform
according to the terms of this Agreement.
32. CITY DEED OF TRUST
The obligations of the Owner contained in this Agreement are also secured by the City
Deed of Trust.
33. COVENANTS RUNNING WITH THE LAND
A. Owner agrees to subject the Property to the covenants and restrictions set
forth in this Agreement. Owner declares its express intent that the covenants and
restrictions included in this Agreement shall be deemed covenants running with the land
and shall pass to and be binding upon all parties having any interest in the Property
throughout the term of this Agreement as set forth in Section 20 of this Agreement.
Each and every contract, deed, lease, or other instrument conveying or otherwise
transferring any interest in the Property shall conclusively be held to have been
executed, delivered, and accepted subject to this Agreement, regardless of whether the
other party or parties to such contract have actual knowledge of this Agreement.
B. The Owner and the City declare their understanding and intent that: (i) the
covenants and restrictions contained in this Agreement are covenants running with the
land pursuant to California Civil Code section 1468 and not conditions which might
result in forfeiture of title by Owner; (ii) the burden of the covenants and restrictions
included in this Agreement touch and concern the Property, in that the Owner's legal
interest in the Property may be rendered less valuable because of the covenants and
restrictions; and (iii) the benefit of the covenants and restrictions included in this
Agreement touch and concern the Property by ensuring that the use of the Property is
consistent with the Inclusionary Policy.
C. All covenants and restrictions contained in this Agreement without regard
to technical classification or designation shall be binding upon Owner for the benefit of
the City, and the covenants and restrictions shall run in favor of the City for the entire
period during which the covenants and restrictions are in force and effect, without
regard to whether the City is an owner of any land or interest to which such covenants
and restrictions relate.
18
1442\02\303980.21.9.2006
34. EFFECTIVE DATE
The obligations of the City and Buyer contained in this Agreement shall be effective
when the Agreement is filed for record in the Office of the Recorder of the County of
San Luis Obispo.
35. EXHIBITS
Any exhibits referred to in this Agreement are incorporated in this Agreement by such
reference.
IN WITNESS WHEREOF, the parties have executed this Agreement on or as of the
date first written above.
CITY: BUYER:
CITY OF ATASCADERO, a municipal
corporation,
Title:
(Type Name and Title)
19
1442\02\3 03 9 8 0.21.9.2006
(Type Name)
(Type Name)
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN LUIS OBISPO )
On , 200_, before me, , personally
appeared , personally known
to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of
which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
STATE OF CALIFORNIA )
) ss
COUNTY OF SAN LUIS OBISPO )
On , 200_, before me, , personally
appeared , personally known
to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of
which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
1442\02\303980.21-9.2006
EXHIBIT A
Legal Description of the Property
A-1
1442\02\3 03980.2_ 1.9.2006
EXHIBIT B
Form of Owner Occupancy Certification
To: City of Atascadero ("City")
From:
Address of Home:
Date:
[name of owner(s)] ("Owner(s)")
("Property")
By signature below, I [insert name or names of Owner]
hereby certify to the City of Atascadero under penalty of perjury that I/we occupy the
home located at [insert address] (the
"Property") as my/our principal place of residence and that I/we have occupied the
Property for [insert number] months of the calendar year
[insert previous calendar year]. Attached to this letter is a copy of
[insert driver's license] showing my place of residence.
This Owner Occupancy Certification is signed on , 20_, under
penalty of perjury.
In
Owner [type name]
Owner [type name]
Due Date: February 1 of each calendar year.
Attach copy of driver's license showing address of Property.
B-1
1442\02\303980.21.9.2006
EXHIBIT C
Form of Rent Certification
To: City of Atascadero ("City")
From: [name of owner(s)] ("Owner(s)")
Address of Home: ("Property")
Date:
By signature below, I [insert name or names of Owner]
hereby certify to the City of Atascadero under penalty of perjury that I/we are renting the
home located at [insert address] (the
"Property") pursuant to the permission granted by the Community Development Director
on [insert date].
The following information is provided to the City pursuant to Section 4 of the Resale and
Refinancing Restriction Agreement and Option to Purchase:
1. Address of Property:
2. Monthly Rent:
3. Name of Tenant:
4. Tenant's Gross Monthly Income:
5. Monthly Principal and Interest on Property's First Mortgage:
7
Monthly Homeowner Dues:
Annual Property Taxes: _
8. Annual Hazard Insurance for Property:
Attached to this letter is a copy of the lease or rental agreement for the Property.
C-1
1442\02\303980.21.9.2006
This Rent Certification is signed on , 20_, under penalty of perjury.
IN
Owner [type name]
Owner [type name]
Due Date: February 1 of each calendar year.
Attach copy of the lease or rental agreement for the Property.
C-2
1442\02\3 03 9 80.2 1.9.2006
EXHIBIT D
Form of Owner's Notice of Intent to Transfer
To: City of Atascadero ("City")
From:
Address of Home:
Date:
[name of owner(s)] ("Owner(s)")
("Property")
Please be notified that the Owner intends to transfer the Property listed above.
A. The following information is provided to the City pursuant to Section 9 of the
Resale and Refinancing Restriction Agreement and Option to Purchase:
1. Address of Property:
2. Date Owner purchased Property:
3. Purchase Price paid by Owner when Property was purchased:
4. Date Owner intends to vacate Property:
5. Date Property will be placed on market:
6. Name and phone number of person for City to contact to schedule
inspection: and
(name)
(phone number)
B. As required by Section 9 of the Resale and Refinancing Restriction Agreement
and Option to Purchase, the following documents are attached to this Notice:
Copy of HUD -1 Settlement Statement from Owner's purchase of the property.
C. I have not yet listed the Property for sale with a multiple listing service, or
contacted a real estate broker or financial institution. I agree to prepare the Property for
sale by:
1. obtaining a pest control report within thirty (30) days of the date of this
notice,
D-1
1442\02\3 03 980.2 1.9.2006
2. allowing the City or its designee to inspect the Property within thirty (30)
days of this notice,
3. if requested by the City following the City's inspection, I will obtain a home
inspection report from a licensed home inspector,
4. maintaining utility connections until the Property is transferred,
5. permitting a walk through by the City prior to close of escrow or the
transfer.
This Owner's Notice of Intent to
correct and is signed on
of perjury.
By:
Owner
By:
Owner
Transfer is certified by Owner to be true and
[insert date] under penalty
D-2
1442\02\303980.21.9.2006
EXHIBIT E
Form of Owner Request for City Subordination to Refinanced First Lender Loan
To: City of Atascadero ("City")
From:
Property Address:
Date:
("Owner")
("Property")
The Owner hereby requests the City to approve the Owner's refinance of the existing
first mortgage on the Property. The Owner provides the following information which it
certifies to be true and correct:
1. Original Purchase Price of Property:
a,
2. Original Principal Balance of existing First Lender Loan
$
3. Current Principal Balance of existing First Lender Loan
4. Interest Rate of Existing First Lender Loan:
5. Outstanding Principal Balance of All Junior Loans Secured by the
Property:
6. Principal Amount of Proposed New First Lender Loan:
7. Interest Rate of Proposed New First Lender Loan:
$
8. Term of Proposed New First Lender Loan: years
9. Is the Proposed New First Lender Loan Fully Amortized?
Attached to this letter is a copy of promissory note for the Proposed New First Lender
Loan.
E-1
1442\02\303980.21-9.2006
The Owner hereby certifies the above information is true and correct and this Owner
Request is executed under penalty of perjury on [insert date].
By:
Owner
By:
Owner
Attach copy of the promissory note for the Proposed New First Lender Loan.
E-2
1442\02\303980.21.9.2006
Request for Notice of Default
CITY OF ATASCADERO
(MODERATE -INCOME INCLUSIONARY UNITS — EQUITY SHARING — CALHFA AND
FANNIE MAE COMPATIBLE)
ADMINISTRATIVE CHECKLIST
(Remove Upon Completion)
BLANK LINES: CHECKLIST
Date of Recording of Senior Loan, p. 1, first paragraph
Recorder's Serial Number for the First Lender Deed of Trust, p. 1, first
paragraph
Borrower's Name, p. 1, second paragraph
First Lender's Name, p. 1, second paragraph
Trustee's Name, p. 1, second paragraph
Signature, p. 1
Notary
Include Exhibit A, Property Description
NOTE: A separate Request for Notice of Default must be recorded for each deed
of trust that will be recorded senior to the City's deed of trust.
1442\02\3123 9 0.1 1.10.2006
COMPLIMENTARY RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTION 27383
When Recorded Mail To:
City of Atascadero
6907 EI Camino Real
Atascadero, CA 93422
Attention: Community Development Director
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
REQUEST FOR NOTICE UNDER CIVIL CODE SECTION 2924b
In accordance with Section 2924b, Civil Code, request is hereby made that a
copy of any Notice of Default and a copy of any Notice of Sale under the Deed of Trust
recorded on , as Instrument No. , in
the Official Records of San Luis Obispo, California, and describing land therein as
See Exhibit A attached hereto
executed by
[insert name of borrower], in which the
_ [insert name of first lender] is named as Beneficiary, and
[insert name of trustee of First Deed of Trust], as Trustee,
be mailed to the following party:
City of Atascadero
6907 EI Camino Real
Atascadero, CA 93422
Attention: Community Development Director
NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE
WILL BE SENT ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED
REQUEST. IF YOUR ADDRESS CHANGES, A NEW REQUEST MUST BE
RECORDED.
City of Atascadero
Its:
SIGNATURE MUST BE NOTARIZED
1442\02\312390.1 1.10.2006
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On June , 2005, before me, , personally appeared
, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s) or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
1442\02\312390.11.10.2006
EXHIBIT A
Legal Description of the Property
The Property referred to is situated in the State of California, County of San Luis
Obispo, City of Atascadero, and is described as follows:
1442\02\312390.11-10.2006