HomeMy WebLinkAboutStaff Report 4.C 12/16/2019p, L
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Agenda Item #4.0
DATE: December 16, 2019
TO: Honorable Mayor and Members of the City Council through City Manager
FROM: Sue Castellucci, Housing Administrator
SUBJECT: Introduction (First Reading) of an Ordinance Authorizing the City Manager to
Execute all City Documents Relating to the Twenty-five Affordable Units in the
Brody Ranch Subdivision Including Grant Deeds Transferring Land to the Housing
Land Trust of Sonoma County and, Affordable Housing Agreements with Option to
Purchase with the Housing Land Trust to Maintain the Properties in Petaluma's First
Time Homebuyer Program.
RECOMMENDATION
It is recommended that the City Council introduce the Attached Ordinance Authorizing the City
Manager to Execute all Documents Relating to the Twenty-five Affordable Units in the Brody
Ranch Subdivision Including Grant Deeds Transferring Land to the Housing Land Trust of
Sonoma County and Affordable Housing Agreements with Option to Purchase with the Housing
Land Trust to Maintain the Properties in Petaluma's First Time Homebuyer Program.
BACKGROUND
Since 1985 the City Council has developed housing goals to address the broad range of needs
within the community starting with the City's initial Housing Element. The City Council
adopted the 2015-2023 Housing Element on December 1, 2014 with Resolution No. 2014-190
which included several programs to promote the development of affordable housing, including a
First Time Homebuyer (FTHB) program.
One policy of the Housing Element is to help facilitate the entry of low -and moderate -income
households into the housing market. Actions taken by the City to address this policy include
partnering with the Housing Land Trust of Sonoma County (HLT). The last FTHB subdivision,
Frates Square, was built in partnership with the HLT. The land was donated to the Housing
Land Trust as an inclusionary requirement of the developer of Southgate. There was no city
funding for any of the individual properties.
The HLT has consistently used an approach to affordable housing whereby the HLT takes title to
fee property on which affordable housing is developed, so that the HLT retains ownership of the
land, and eligible buyers purchase the affordable homes subject to a ground lease from the HLT.
This approach keeps the home affordable in perpetuity through the HLT's ownership of the land,
the ground lease, and resale restrictions on the price of the house through an affordability and
restrictive covenants agreement the HLT enters with the City, which is in turn secured by a
performance deed of trust granted by the HLT for the benefit of the City and backed by the
HLT's fee ownership.
In 2016, DeNova Homes Inc. filed an application for development of approximately 15.9 acres
in the City of Petaluma located at 360 Corona Road and more commonly known as the "Brody
Ranch Subdivision. On August 5, 2016 DeNova Homes Inc. ("DeNova") and the HLT entered
into a Memorandum of Understanding (Attachment #3) in order to facilitate the development of
twenty-five affordable housing units in the Brody Ranch Subdivision. The City accepted
DeNova's proposal to provide twenty-five affordable housing units (Affordable Units) to meet
the City's inclusionary housing requirements under the City's 2015-2023 Housing Element for
the Brody Ranch development. Similar to the Frates Square project, the affordability partnership
with the HLT for Brody Ranch required the City to work with the HLT to take title to the land
underlying the Brody Ranch affordable detached single family dwelling and duet units (together,
making up 8 of the 25 affordable Brody Ranch units) from the developer for conveyance of the
fee to the HLT. The house improvements would then be sold to eligible homebuyers subject to
the HLT ground lease, and the terms of the affordability agreement and restrictive covenants
between the HLT and the City, backed by the performance deed of trust from the HLT. The
Brody Ranch condo units (making up 17 of the 25 affordable Brody Ranch units) require a
slightly different approach. The condo units will not involve the HLT obtaining fee ownership.
Rather, a homeowners' association will retain fee title to the land underlying the condominium
units. The HLT will still enter an affordability agreement with the City for each affordable
condominium unit. However, the HLT will not provide a performance deed of trust for the
benefit of the City regarding the condominium units. The affordability of the condominium units
will be preserved through affordability covenants, resale restrictions and an HLT option to
purchase that the HLT will enter with the eligible home buyer. On January 9, 2017, the City
Council adopted Resolution #2017-013 N.C.S., approving the vesting Tentative Subdivision map
for Brody Ranch and the Conditions of Approval recommended by the Planning Commission.
Item # 15 of the Conditions of Approval required DeNova to develop twenty-five on-site
dwellings affordable in perpetuity to low -and moderate -income households.
On July 10, 2018, an Inclusionary Housing Agreement (Attachment #4) was executed between
Petaluma 199 LP, the Subdivider of the Brody Ranch Subdivision and the City of Petaluma.
DISCUSSION
Building permits were issued in July of 2018 for DeNova to start construction. HLT has been
working closely with DeNova's marketing team to qualify applicants for the affordable units
based on the City's affordability criteria. The first five properties, 1 duet and 3 condominiums
received their final inspections and Certificate of Occupancy in September. There are five new
first-time homeowners who have moved into the development, with one homeowner being a
Petaluma Police officer. In the course of the escrow process and document execution process,
the City Attorney recommended preparing an ordinance for City Council adoption giving the
City Manager express authority to enter on behalf of the City into the Affordable Housing
Agreements for each Brody affordable property. This is a step out of an abundance of caution to
provide for express Council authorization of the transactional documents needed to implement
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the on-site affordable housing approach and agreement for Brody Ranch, which the City Council
has already approved July 10, 2018.
The documents that will be signed by the City of Petaluma are a grant deed from the Subdivider,
Petaluma 199 and a grant deed from the City to HLT for the detached single family dwellings
and duet units, and an Affordable Housing Agreement with HLT for all affordable units,
including the condominium units. Samples of all of the City documents are included in
Attachment #5 and are listed as follows:
• Affordable Housing Agreement and Declaration of Restrictive Covenants with Option to
Purchase with the HLT which will regulate and restrict future sales prices for all of the
Brody homes, and the eligibility criteria of future homebuyers according to the City's
First Time Homebuyer Program as revised by City Council with Resolution No. 2005-
213 N.C.S.
• Performance Deed of Trust that the HLT will execute for the benefit of the City to secure
the obligations agreed to in the Affordable Housing Agreement for the detached single-
family dwellings and duet units
• Grant Deed from Petaluma 199 for land transfer (not applicable for the condominiums)
• Grant Deed from the City to HLT for land transfer (not applicable to the condominiums)
The City of Petaluma's Housing Division has administered a homeownership program for over
30 years and the Council has invested over $8,000,000 to serve this part of the spectrum of
housing need. In that time, we have developed 172 homes in seven residential subdivisions,
specifically for sale to low -and moderate -income households. These twenty-five additional first-
time homebuyer properties will increase the homeownership total to 197 properties.
This development fulfills the City Council's goal of A Safe Community that Thrives with the
objective to create diverse housing opportunities for all Petalumans. Providing decent,
affordable housing is important to families. Affordable homes support the local workforce so
they can live close to their jobs. Shorter communities allow workers to spend more time with
their families while the community benefits from reduction in traffic congestion, air pollution
and expenditures on roads. Housing our workforce also improves an employer's ability to attract
and retain employees and remain competitive in the marketplace.
FINANCIAL IMPACTS
This project fulfills the City Council's goals and priorities of the 2015-2023 Housing Element
and the 2015-2020 Consolidated Plan in preserving affordable housing in Petaluma and keeping
housing affordable using resale controls. With the 99 -year renewable Ground Lease for the
single-family homes in place and the deed restriction for a term of 90 years each time the
condominium is sold, there should be no future funding needed for the resale of future
properties. The funding for administration of the First Time Homebuyer program in partnership
with the Housing Land Trust will be ongoing as funds allow.
PUBLIC OUTREACH
This item was listed on the agenda of the December 2, 2019 City Council Agenda, published in
accordance with public noticing requirements.
ATTACHMENTS
1. Ordinance
2. Exhibit A to Ordinance
3. MOU between DeNova and HLTSC
4. Inclusionary Housing Agreement with DeNova
5. City documents with HLT
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ATTACHMENT #1
AN ORDINANCE OF THE CITY COUNCILOF THE CITY OF PETALUMA
AUTHORIZING THE CITY MANAGER TO EXECUTE ALL CITY DOCUMENTS
RELATING TO THE TWENTY-FIVE AFFORDABLE UNITS IN THE BRODY RANCH
SUBDIVISION INCLUDING A GRANT DEEDS TRANSFERRING LAND TO THE
HOUSING LAND TRUST OF SONOMA COUNTY AND, AFFORDABLE HOUSING
AGREEMENTS WITH OPTION TO PURCHASE WITH THE HOUSING LAND TRUST
TO MAINTAIN THE PROPERTIES IN PETALUMA'S FIRST TIME HOMEBUYER
PROGRAM.
WHEREAS, since 1985 the City Council has developed housing goals to address
the broad range of housing needs within the community, including the City's initial General
Plan Housing Element; and
WHEREAS, the City Council adopted the 2015-2023 General Plan Housing
Element on December 1, 2014 pursuant to Resolution No. 2014-190, including several
programs to promote the development of affordable housing; and
WHEREAS, since 1988, the City, in partnership with nonprofit developers, has
helped build 172 units of for -sale housing for first time homebuyers, and has provided
homeownership to 267 families, including initial sales and re -sales; and
WHEREAS, Policy 4.3 of the Housing Element in the City's General Plan calls for
helping facilitate the entry of low and moderate -income households into the housing market by
partnering with the Housing Land Trust; and
WHEREAS, in 2016, DeNova Homes Inc. filed an application for development of
approximately 15.9 acres in the City of Petaluma located at 360 Corona Road and more
commonly known as the "Brody Ranch Subdivision;" and
WHEREAS, DeNova Homes Inc. ("DeNova") and the Housing Land Trust of Sonoma
County ("HLT") entered into a Memorandum of Understanding on August 5, 2016 in order to
facilitate the development of twenty-five affordable housing units in the Brody Ranch
Subdivision; and
WHEREAS, On January 9, 2017, the City Council adopted Resolution #2017-013
N.C.S., approving the vesting Tentative Subdivision map for Brody Ranch and the Conditions of
Approval recommended by the Planning Commission; and
WHEREAS, Item # 15 of the Conditions of Approval required DeNova to develop
twenty-five on-site dwellings affordable in perpetuity to low -and moderate -income household;
and
WHEREAS, the City of Petaluma entered into an Inclusionary Housing Agreement with
Petaluma 199, a subsidiary of DeNova Homes and on July 10, 2018, and
WHEREAS, Section 46 of the Petaluma City Charter provides that certain City
Council actions must be taken by ordinance, including certain actions for acquisition, sale
or lease of real property;
NOW, THEREFORE, be it ordained by the council of the City of Petaluma as
follows:
SECTION 1: The City Manager is hereby authorized and directed to execute on
behalf of the City all City documents relating to the twenty-five affordable units in the
Brody Ranch Subdivision, including documents transferring land to the Housing Land
Trust of Sonoma County affordability agreements with the Housing Land Trust to maintain
the units in Petaluma's First Time Homebuyer Program.
SECTION 2: The City Manager is hereby authorized and directed to execute on
behalf of the City documents substantially in accordance with those attached to and made
a part of this ordinance as Exhibit A to this ordinance, and/or revised versions of such
documents and/or additional documents as may be recommended and approved by the City
Attorney to accomplish the purchase of the affordable units in the Brody Ranch
Subdivision to maintain their affordability as part of the City's First Time Homebuyer
program consistent with the purposes of the City's General Plan Housing Element, the First
Time Homebuyer Program and this ordinance.
SECTION 3: If any part of this Ordinance is for any reason held to be
unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction, such
decision will not affect the validity of the remaining parts of this Ordinance. The City
Council of the City of Petaluma hereby declares that it would have passed and adopted this
Ordinance and each of its provisions irrespective of any part being held invalid.
SECTION 4: On January 9, 2017, the City Council adopted Resolution 2017-011
N.C.S. approving a Mitigated Negative Declaration and Mitigation Monitoring and
Reporting Program for the Brody Ranch project, including the affordable housing
components of the project. The authority granted to the City Manager to execute
transactional documents on behalf of the City to implement the on site affordable housing
component of the Brody Ranch project involves no environmental impacts not already
addressed in the Mitigated Negative Declaration and Mitigation Monitoring and Reporting
Program already approved for the project.
SECTION 5: This Ordinance will become effective thirty days after the date of
its adoption by the Petaluma City Council.
SECTION 6: The City Clerk is hereby directed to post and/or publish this
Ordinance or a synopsis for the period and in the manner required by the City Charter.
EXHIBIT A
Recording requested by and when
recorded mail to:
City of Petaluma
11 English Street
Petaluma, CA 94952
Attn: City Clerk
PERGOVERNMENT CODE
27383
ATTACHMENT #2
Space above this line for Recorder's use.
AFFORDABLE HOUSING AGREEMENT AND DECLARATION OF RESTRICTIVE
COVENANTS
("REGULATORY AGREEMENT")
This Affordable Housing Agreement and Declaration of Restrictive Covenants
(this "Agreement") is entered into effective as of , 2019 ("Effective
Date") by and between the City of Petaluma, a California municipal corporation and
charter city ("City") and the Housing Land Trust of Sonoma County, a California
nonprofit public benefit corporation ("HLT"). City and HLT are hereafter referred to as
the "Parties."
A. Pursuant to the Petaluma Implementing Zoning Ordinance, Ordinance No. 2300
N.C.S., Section 3.040 (the "Ordinance"), residential developments of five (5) or more
units are required to contribute to the provision of below market -rate housing as
specified therein. In order to satisfy its obligation under the Ordinance with respect to
that certain development known as the Brody Ranch Subdivision, consisting of One
hundred and ninety-nine (199) residential units (the "Development") in the City of
Petaluma, County of Sonoma, and State of California, Petaluma 199 LP, a Limited
Partner ("Subdivider"), has agreed to contribute a portion of the property in the
Development, for the construction of twenty-five (25) residential units to be restricted for
occupancy to certain income levels (the "Restricted Homes" or the "Project"), as set
forth herein, and as more particularly described in Exhibit B
B. As of the Effective Date, the land underlying Lot 9, 1432 Sylvia Way, Petaluma,
CA, and as more particularly described in Exhibit A, has been conveyed to HLT by
Subdivider pursuant to a Grant Deed recorded in the Official Records of Sonoma
County ("Official Records").
C. HLT has entered into, or shall enter into an agreement with Subdivider, pursuant
to which Subdivider will construct the Restricted Homes as part of the larger
Development, and sell the Restricted Homes constructed on the Property to eligible
homebuyers at an affordable price. Concurrently with the sale of each of the Restricted
Homes, HLT will enter into a Declaration of Affordability Covenants, Buyer's Occupancy
Resale Restriction and Option to Purchase ("Declaration") as well as a ground lease
("Ground Lease") for Restricted Homes with each homebuyer in order to ensure long-
term affordability of the Restricted Homes.
D. This Agreement is entered into to provide assurance to City that the Restricted
Homes shall comply with the requirements of the Ordinance and the conditions of
approval for the Brody Ranch Subdivision.
NOW, THEREFORE, the Parties agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below. Additional terms are defined in the Recitals and the text of
this Agreement.
(a) "Affordable Purchase Price" means a home purchase price resulting in
an average monthly housing payment (including mortgage loan principal and interest,
mortgage insurance fees, property taxes and assessments, a reasonable allowance for
property maintenance and repairs, homeowners insurance premiums, a reasonable
utility allowance, and homeowners association dues, if any) which is affordable to
households of Low to Moderate -Income, as determined using standard underwriting
criteria in common use by Fannie Mae or the California Housing Finance Agency.
(b) "Area Median Income" means the median household income, adjusted
for household size, applicable to Sonoma County, California as published periodically
by the State Department of Housing and Community Development in the California
Code of Regulations, Title 25, Section 6932 pursuant to California Health and Safety
Code Section 50093(c) (or successor provision).
(c) "Eligible Buyer" means a household of Low- to Moderate—Income, as
applicable, which the City has determined meets the eligibility requirements for
purchase of a Restricted Home.
(e) "Low -Income" means an annual income which does not exceed eighty
percent (80%) of the Area Median Income adjusted for household size.
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M "Median -Income" means an annual income which does not exceed one
hundred percent (100%) of the Area Median Income, adjusted for household size.
(g) "Moderate -Income" means an annual income which does not exceed one
hundred twenty percent (120%) of the Area Median Income, adjusted for household
size.
(h) "Maximum Initial Sales Price" means the initial Affordable Purchase
Price for a Home as determined by City.
2. Satisfaction of Affordable Housinq Obliqation. Subdivider will construct
twenty-five (25) Restricted Homes on the Property and sell nine(_9_) Restricted Homes
at an Affordable Purchase Price to an Eligible Buyer of Low- Income, sixteen (16)
Restricted Homes at an Affordable Purchase Price to an Eligible Buyer of Moderate -
Income, in accordance with income categories specified in Exhibit B. Concurrently with
the sale of each Restricted Home, HLT shall require the homebuyer to execute a
Declaration and related Deed of Trust (the "Deed of Trust") substantially in the form
attached hereto as Exhibit C or a Ground Lease, substantially in for the attached hereto
as Exhibit C -1. -Among other provisions, the Declaration or Ground Lease, as
applicable, will require each Restricted Home (i) to be used solely for residential
purposes (ii) to be occupied as the homebuyer's principal residence, and (iii) to be
permitted to be transferred only to HLT, another Eligible Buyer, or upon the death of the
homebuyer, to the homebuyer's heirs who qualify as Low -Income, Median -Income or
Moderate -Income, as applicable. HLT agrees that the intent of this Agreement, the
Declaration and Ground Lease is that the Restricted Homes shall be permanently
affordable to Eligible Buyers of Low -Income to Moderate -Income, as applicable, and
HLT agrees that resale of the Restricted Homes shall be so restricted pursuant to the
Declaration or Ground Lease, as applicable.
3. Marketinq and Sale to Eliqible Buyers. HLT shall require Subdivider to sell
the Restricted Homes developed on the Property at an Affordable Purchase Price as
described in Section 4 to Eligible Buyers of Low -Income, Median -Income or Moderate -
Income, as applicable, and in accordance with Exhibit B. Within the pool of eligible
applicants, preference is to be given to persons that either live or work in Petaluma. City
shall cooperate with HLT to identify Eligible Buyers; however, HLT will have primary
responsibility for marketing the Restricted Homes, finding qualified Eligible Buyers, and
screening and selecting applicants. City shall have no obligation to pay costs related to
marketing, sales efforts or real estate commissions. HLT agrees that it shall comply,
and shall require Subdivider to comply, with applicable fair housing laws in the
marketing and sale, as applicable, of the Restricted Homes.
4. Affordable Purchase Price. The Maximum Initial Sales Price for the
Homes is shown in Exhibit B attached hereto and incorporated herein.
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5. City Review of Documents. Upon request, HLT agrees that it shall provide
the the form of Ground Lease, Declaration and Deed of Trust to be executed by the
homebuyers.
6. Compliance Reports, Inspections, Monitoring. Upon completion of
construction of the Restricted Homes, and annually thereafter by no later than each
anniversary of the Effective Date, upon City's request HLT shall submit to City a
Compliance Report verifying HLT's compliance with this Agreement, and certified as
correct by HLT under penalty of perjury. The Compliance Report shall be in such
format as City may reasonably request and shall contain certifications regarding the
eligibility of homebuyers and evidence of the homebuyer's and HLT's execution of the
Ground Lease or Declaration, as applicable.
HLT shall retain all records related to compliance with this Agreement, and shall
make such records available to City or its designee for inspection and copying on five
(5) business days' written notice. HLT shall permit City and its designees to inspect the
Property to monitor compliance with this Agreement following two (2) business days'
written notice.
7. Covenants Run with the Land. The covenants and conditions herein
contained shall apply to and bind, during their respective periods of fee ownership, HLT
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. This Agreement shall remain in effect in
perpetuity unless released by City pursuant to an instrument recorded in the Official
Records of Sonoma County.
8. Default and Remedies. Failure of HLT to cure any default in HLT's
obligations under this Agreement within thirty (30) days after the delivery of a notice of
default from the City will constitute an Event of Default under this Agreement. In
addition to remedies set forth in this Agreement, the City may exercise any and all
remedies available under law or in equity, instituting against HLT or other applicable
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.
9. Option to Purchase, Enter and Possess or Assignment of Riqhts.
A. For those Restricted Homes that are subject to a Ground Lease the following
shall apply. City shall have the right at its option to purchase, enter and take
possession of the Property or any portion thereof owned by HLT with all improvements
thereon (the "Option"), if, at or after the initial sale of the Restricted Homes to Eligible
Buyers, the Restricted Homes are sold to persons who do not qualify as Eligible Buyers.
In such event City shall have an option to purchase any such Restricted Homes at the
Affordable Purchase Price as determined pursuant to this Agreement, or the City may
pursue any remedies it may have under this Agreement, the Deed of Trust or under law
or in equity.
In order to exercise the Option, the City shall give HLT notice of such exercise,
and HLT shall, within thirty (30) days after receipt of such notice, provide the City with a
summary of all of HLT's costs incurred as described in this Section. Within thirty (30)
days of the City's receipt of such summary, the City shall pay into an escrow
established for such purpose cash in the amount of all sums owing pursuant to this
Section 9, and HLT shall execute and deposit into such escrow a grant deed
transferring to the City all of HLT's interest in the Property, or portion thereof, as
applicable and the improvements located thereon.
B. For those Restricted Homes that are subject to a Declaration, the following
shall apply: If, at or after the initial sale of the Restricted Homes to Eligible Buyers, the
Restricted Homes are sold to persons who do not qualify as Eligible Buyers, the City
shall have the option to assume HLT's rights under each Declaration and Deed of Trust.
Upon notice from the City of a violation under this Section 9B and the exercise of the
option under this Section 9B by the City, HLT shall assign its interest in the applicable
Declaration(s) and Deed(s) of Trust to the City. In such event City shall assume the
rights and obligations of HLT under the applicable Declaration(s) and Deed(s) of Trust.
In order to exercise the option to assume described in 9B above, the City shall
give HLT notice of assignment, and HLT shall, within thirty (30) days after receipt of
such notice to assign its rights and obligations under the applicable Declaration and
Deed of Trust to the City.
10. Mortqaqee Protection. The City's rights pursuant to Section 9 shall not
defeat, limit or render invalid any mortgage or deed of trust recorded against the
Property or any portion thereof, including without limitation, any Restricted Home. Any
conveyance of the Property to the City pursuant to Section 9 shall be subject to
mortgages and deeds of trust permitted by this Agreement. Notwithstanding any other
provision in this Agreement to the contrary, this Agreement shall not diminish or affect
the rights of the California Housing Finance Agency ("CaIHFA"), HUD, the Federal
National Mortgage Association ("FNMA"), or the Veterans Administration ("VA") under
any mortgage recorded against the Property in compliance with the Declaration.
11. Remedies Cumulative. No right, power, or remedy specified in this
Agreement 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 available to the City under law or in equity. Neither the
failure nor any delay on the part of the City to exercise any such rights, powers or
remedies shall operate as a waiver thereof, nor shall any single or partial exercise by
the City of any such right, power or remedy preclude any other or further exercise of
such right, power or remedy, or any other right, power or remedy.
12. Attorneys' Fees and Costs. The City shall be entitled to receive from HLT
or any person violating the requirements of this Agreement, in addition to any remedy
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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. In any dispute arising in connection with
this Agreement, the prevailing party shall be entitled to recover reasonable attorneys'
fees.
13. Appointment of Other Aqencies. In its sole discretion, the City may
designate, appoint or contract with any other person, public agency or public or private
entity to perform some or all of the City's obligations under this Agreement.
14. Hold Harmless. HLT agrees to indemnify, defend (with counsel approved
by the City) and hold harmless City and its elected and appointed officials, officers,
employees, representatives and agents (all of the foregoing, collectively the
"Indemnitees") from and against all liability, loss, cost, claim, demand, action, suit, legal
or administrative proceeding, penalty, deficiency, fine, damage and expense (including,
without limitation, reasonable attorney's fees and costs of litigation) (all of the foregoing,
collectively hereinafter "Claims") arising or allegedly arising out of or relating in any
manner to the Project, the Property, or HLT's performance or nonperformance under
this Agreement, except to the extent arising from the gross negligence or willful
misconduct of the City. The provisions of this section shall survive the expiration or
other termination of this Agreement or any release of part or all of the Property from the
burdens of this Agreement.
15. Insurance Requirements. HLT shall obtain and maintain at HLT's
expense, Commercial General Liability, naming Indemnitees as additional insureds with
aggregate limits of not less than Two Million Dollars ($2,000,000) for bodily injury and
death or property damage including coverage for contractual liability and premises
operations, purchased from an insurance company duly licensed to issue such
insurance in the State of California with a current Best's Key Rating of not less than A-
V, such insurance shall be evidenced by an endorsement which so provides and
delivered to the City prior to the Effective Date.
16. 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:
City:
HILT:
City of Petaluma
11 English Street
Petaluma, CA 94952
Attn: City Clerk
Housing Land Trust of Sonoma County
P.O. Box 5431
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Petaluma, CA 94955-5431
Attn: Executive Director
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.
17. Inteqrated Aqreement; Amendments. This Agreement, together with the
exhibits hereto constitutes the entire Agreement between the Parties with respect to the
subject matter hereof. No modification of or amendment to this Agreement shall be
binding unless reduced to writing and signed by the Parties. The City Manager or his
or her designee shall have authority to approve or disapprove minor or technical
amendments to this Agreement on behalf of the City.
18. Subordination; Execution of Riders for the Benefit of Mortgage Lenders.
City agrees that if required in order to assist Eligible Buyers to secure purchase money
financing for the acquisition of a Home, the City will enter into a subordination
agreement with a purchase money lender to subordinate this Agreement under such
terms as the City and the purchase money lender shall negotiate provided that City is
granted reasonable notice and cure rights under the first mortgage. The City further
agrees that if City succeeds to the interest of HLT under the Ground Lease applicable to
any one or more Restricted Homes pursuant to the exercise of City's remedies under
this Agreement or the Deed of Trust, the City agrees that it shall recognize the Lessee
under the Ground Lease and shall comply with the requirements of Fannie Mae Form
2100 (3/06) and Fannie Mae Announcement 06-03 or similar successor policy, as such
documents may be modified or amended. Notwithstanding any other provision hereof,
the provisions of this Agreement shall be subordinate to the lien of the First Lender
Loan (as defined in the Declaration) and shall not impair the rights of the First Lender,
or the First Lender's successor or assign, to exercise its remedies under the First
Lender Deed of Trust in the event of default under the First 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 or assignment in lieu of foreclosure, this
Agreement shall be forever terminated and shall have no further effect as to the Unit or
any transferee thereafter; provided, however, if the holder of such First Lender Deed of
Trust acquired title to the Home pursuant to a deed or assignment in lieu of foreclosure
and no notice of default was recorded against the Home 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 shall not have cured the default within the sixty (60) -day period. Owner agrees to
record any necessary documents to affect such termination, if applicable
19. Parties Not Co -Venturers. Nothing in this Agreement is intended to or
shall establish the Parties as partners, co -venturers, or principal and agent with one
another.
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20. Further Assurances; Action by the City. The Parties shall execute,
acknowledge and deliver to the other such other documents and instruments, and take
such other actions, as either shall reasonably request as may be necessary to carry out
the intent of this Agreement. Except as may be otherwise specifically provided herein,
whenever any approval, notice, direction, consent or request by the City is required or
permitted under this Agreement, such action shall be in writing, and such action may be
given, made or taken by the City Manager or by any person who shall have been
designated by the City Manager, without further approval by the City Council unless the
City Manager determines in his or her discretion that such action requires such
approval.
21. Governinq Law; Venue. This Agreement shall be construed and enforced
in accordance with the laws of the State of California without regard to principles of
conflicts of law. The Parties consent to the jurisdiction of any federal or state court in
the jurisdiction in which the Property is located (the "Property Jurisdiction"). Borrower
agrees that any controversy arising under or in relation to this Agreement shall be
litigated exclusively in courts having jurisdiction in the Property Jurisdiction. Borrower
irrevocably consents to service, jurisdiction, and venue of such courts for any such
litigation and waives any other venue to which it might be entitled by virtue of domicile,
habitual residence or otherwise.
22. No Waiver. 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 HLT or to pursue any remedy allowed
under this Agreement or applicable law. Any extension of time granted to HLT 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 HLT 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.
23. Headinqs. The titles of the sections and subsections of this Agreement are
inserted for convenience of reference only and shall be disregarded in interpreting any
part of the Agreement's provisions.
24. Counterparts. This Agreement may be executed in counterparts, each of which
shall be an original and all of which taken together shall constitute one and the same
instrument.
25. Severabilitv. If any provision contained in this Agreement is to be held by a court
of competent jurisdiction to be void or unenforceable the remaining portions of this
Agreement shall remain in full force and effect.
26. Exhibits. The following exhibits attached to this Agreement are hereby
incorporated herein by reference:
15
Exhibit A Legal Description of the Property
Exhibit B Maximum Homebuyer Income Level; Unit Size and Bedroom Count;
Maximum Initial Sales Price
Exhibit C Form of Declaration and Deed of Trust
Exhibit C-1 Form of Ground Lease
%SIGNATURES ON FOLLOWING PAGE: SIGNATURES MUST BE NOTARIZED]
16
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first written above.
HLT:
Housing Land Trust of Sonoma County,
A nonprofit public benefit corporation
Its:
CITY:
City of Petaluma,
a California municipal corporation
Peggy Flynn, City Manager
ATTEST:
-31
City Clerk
Eric W. Danly, City Attorney
17
Exhibit A
Real property in the City of Petaluma, County of Sonoma, State of California, described
as follows:
Records.
APN:
, as shown upon the map entitled filed
.200 in Book of Maps Pages Sonoma County
in
I*A:I1=i1r-j
Brody Ranch
Workforce housing maximum sales price sheet
21 CONDOS:
Low Income Households: 80% area medium income:
1 Bedroom 2 Bedroom 3 Bedroom
Sales Price $144,000 $170,000 $195,100
Medium Income Household: 100% area medium income:
1 Bedroom 2 Bedroom 3 Bedroom
Sales Price $215,000 $250,000 $285,000
Moderate Income Households: 120% area medium income:
1 Bedroom
Sale Price $270,000
DUETS: Lots 9 & 10
Moderate Income Household:
4 Bedroom
Sale Price $370,000
SFH: Lots 21 & 22
Moderate Income Household:
4 Bedroom
Sale Price $393,000
Unit Income Classification
Moderate Income
Moderate Income
2 Bedroom 3 Bedroom
$315,000 $355,000
Lot Nos. Address
9 1432 Sylvia Way, Petaluma
10 1428 Sylvia Way, Petaluma
19
Exhibit C/C-1
®1
ATTACHMENT #3
This Memorandum of Understanding ("MOU") is entered into as of August 5, 2016 by
and among DeNova Homes, Inc. or its related assigns ("DeNova"), and Housing Land
Trust of Sonoma County (HLT), in order to facilitate the development of twenty-five (25)
affordable housing units in the Brody Ranch Subdivision (defined below).
1. Application for Development. DeNova has filed an application for development
("Application") of approximately 15.9 acres, in the City of Petaluma, State of
California, and more particularly described as Assessor's Parcel No. 137-061-042
located at 360 Corona Road and more commonly known as the "Brody Ranch
Subdivision."
2. Inclusionary HousinvRequirernents. In reviewing DeNova's Application, the
City has accepted DeNova's proposal to provide twenty-five (25) affordable
housing units ("Affordable Units") and pay certain sutras (as set forth below) in
order to meet the City's inclusionary housing requirements under the City's
Municipal Code,
3. Develooment and Construction of Affordable Units, DeNova has agreed to
provide the Affordable Units (made up of the Affordable Condos, Affordable
Duplex, and Affordable SFs as those terms are hereinafter defined), and will do so
under the following terms and conditions:
a. DeNova shall develop and construct, at its sole cost and expense, twenty-
one (21) condominium units ("Affordable Condos"), which Affordable
Condos shall be distributed throughout the entire condominium portion of
the Brody Ranch Subdivision (i.e., these condominium units will be
intermixed with the market rate condominium units). The goal for the unit
mix for the twenty-one (21) Affordable Condos shall include the
following: DeNova shall provide six (6) one -bedroom units, nine (9) two-
bedroom units, and six (6) three-bedroom units. Because condominium
units do not include ownership of the land underlying the condominium
building, there shall be no requirement for land transfer in connection with
the development and construction of the Affordable Condos.
b. DeNova shall develop and construct, at its sole cost and expense, one (1)
two -unit home (i.e., a duplex) on one of the Brody Ranch Subdivision lots
("Affordable Duplex"). DeNova shall dedicate the land underlying the
Affordable Duplex to the City, the City shall deed the land to HLT who in
MOU for DeNova Homes Brody Ranch
18866:6507809.2
21
turn will execute a long term ground lease (under the terms hereinafter
specified) to ensure affordability.
c. DeNova shall develop and construct, at its sole cost and expense, two (2)
single family homes ("Affordable ffs") within the Brody Ranch
Subdivision. To make the Affordable SFs homes "affordable," DeNova
shall dedicate the land underlying the Affordable SFs to the City so that
the City may deed it to HLT who will in turn execute a long term ground
lease (under the terms hereinafter specified) to ensure affordability.
Housing Land Trust shall contribute a maximum of Three Hundred
Thousand Dollars ($300,000,00) per Affordable SF to DeNova (as set
forth in Section 3(d) below) to off -set the total cost of the market rate unit
thereby making it affordable to the ultimate buyer.
In addition to providing the Affordable Units, DeNova shall provide the
total sum of Six Hundred Thousand Dollars ($600,000,00) to the Housing
Land Trust (the sum is based upon the in -lieu fees that would be due under
the City's inclusionary housing ordinance) so that the Housing Land Trust.
will have sufficient funds to subsidize the funds required for purchase of
the two Affordable SFs (at $300,000.00 per unit).
e. All Affordable Units shall be resale restricted for sale to households with
low to moderate income earners (i.e., made affordable to households with
incomes from 80% to 120% of Area Median Income).
f. DeNova shall sell the Affordable Units and shall recover and retain all
proceeds from such sales,
g. From the sales proceeds at each close of escrow for each of the Affordable
Units, DeNova shall pay to Housing Land Trust the sum of Seven
Thousand Five Hundred Dollars ($7,500) per unit, which sura shall be a
fixed cost that will cover all costs incurred by Housing Land Trust related
to marketing, homebuyer selection, homebuyer education and preparation
of documents for the close of escrow as related to the Affordable Units.
KLAY's Obligations. The City will work in partnership with the Housing Land
Trust of Sonoma County ("Housing Land Trust") to take and retain title to the
land beneath the Affordable Duplex and the Affordable SFs, and will thereafter
transfer that land to the Housing Land Trust (subJect to a Regulatory Agreement)
so that the Housing Land Trust may enter into a 99 -year renewable term ground
lease with each buyer to ensure continued affordability, Working with the
Housing Land Trust, the City will draft all documents necessary to effectuate the
intent of this MOU, including any leases, and any affordability and occupancy
restrictions designed to protect the City's interest in maintaining tile homes as
affordable workforce housing over time. The City, in conjunction with Housing
Land Trust, will coordinate outreach efforts to income -qualified buyers. DeNova
MOU for DeNova Homes Brody Ranch
18966:65078092
22
shall have no liability to the City and/or the Housing Land Trust for the policies
and procedures adopted to effectuate any workforce housing program offered.
Housim4 Land Trust Oblivations, Housing Land Trust will work in partnership
with the City to effectuate a 99 -year renewable ground lease that will ensure
continued affordability for the Affordable Duplex and the Affordable SFS.
Housing Land Trust shall implement a deed covenant for the condominiums to
ensure long term affordability, Working with the City, Housing Land Trust will
draft all documents necessary to effectuate the intent of this MOU, including any
leases, deed restrictions and any affordability and occupancy restrictions designed
to protect the City's interest in maintaining the homes as affordable workforce
housing over time and the Housing Land Trust's interest in creating workforce
housing. Housing Land Trust, in conjunction with the City, will coordinate
outreach efforts to income -qualified buyers, Housing Land Trust will be
responsible for marketing the units and finding qualified buyers. DeNova shall
have no liability to the City and/or the Housing Land Trust for the policies and
procedures adopted to effectuate any workforce housing program offered.
IN WITNESS WHEREOF, the parties hereto have executed this MOU on the first date
written above.
DeNova Homes
Trent Sanson, Director of Land Acquisition
Housing Land Trust of Sonoma County
Dev Goetschius, Executive Director
MOU for DeNova Homes Brody Ranch
18866i6507809.2
23
RECORDINGREQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Petaluma
Cio City Clerk
11 English St.
Petaluma, CA 94952
ATTACHMENT #4
2018057866
Official Of SonomCountya
,,
08/1512018 01;41 PM
PFTALUMA CITY
fj
A
AGIILCI4 63 Pgs
Fee: $0,00
lQ—
THIS DOCUMENT IS RECORDED ON BEHALF 1 PF4ID
OF THE CITY OF PETALUMA AND IS EXEMPT I
FROM RECORDING FEES PURSUANT TO
GOVERNMENT CODE §§6103 AND 27383
FOR MC01WER'S USE ONLY
Inclusionary Housing Agreement
This Inclusionary Housing Agreement ("Agreement") is made on `',' by and
between Petaluma 199, 1,P, ("Subdivider") and the City of Petaluma ("City"), a C"alifornia
inunicipal corporation and charter city.
RECITALS
A. Subdivider is the owner of certain real property (the "Property") described as
"Brody RancY' at 360 Corona Road, in the City of Petaluma, California, more particularly
described in Exhibit A attached hereto, which is entitled for the development of 199 total
residential units, as shown on the development plan for the "Brody Ranch" Subdivision (the
"Development") approved on January 9, 2017 by the City of Petaluma City Council under City
Resolution No. 2017-013 N.C.S., including the conditions of approval Cor the Development
("Conditions of Approval"), which are together referred to as the "Official Records" and are
attached hereto as Exhibit R.
B. As part of the City's approval of the Development, City has required the Subdivider
to provide Twenty Five (25) affordable housing units (individually a "Unit" and collectively the
°Urlits") as follows: no less than nine (9) units for Occupancy by low-income persons or
households to the extent qua ' lified purchasers are available per the Conditions of Approval, and
sixteen (16 units for occupancy by moderate-incoine persons or households, all in satisfaction of
the Conditions of Approval witlim Official Records, and the August 5, 2016 Memorandum of
Understanding between Subdivider and the Housing Land'.Frust of Sonoma County attached hereto
as Exhibit C. Each Unit and the plans for that residence, are designated, shown and dcscribod, in
the attached Exhibit 1),
C Subdivider's affordable housing obligations contained herein are a material part of
the consideration received by City in connection with its approval of the Development.
D. Capitalized terms not defined herein shall have the meaning ascribed to them in that
1551%01\1905088.1
WE
certain Affordable Housing Agreement and Declaration of Restrictive Covenants to be executed
between City and the Housing Land Trust of Sonoma County substantially in the Iorm which is
attached hereto as Exhibit F and which, together with the other exhibits specified in these recitals,
is made a part of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the following covenants, the parties hereto agree
as follows:
LO INCI,USIONARYHOtJSINGREQ(TIRI+,MF,,NTS
1.1 Restricted Units. Subdivider agrees, at its sole cost and expense, to construct or
cause to be Constructed, twenty five (25) Units-, which it shall cause to remain available in
accordance with Exhibit C and in any case for a minimum of forty-five (45) years for the sale,
transfer or conveyance to, and the occupancy of, the following; categories of occupants: no less
than nine (9) units for occupancy by low-incon-le persons or households to the extent cluali lied
purchasers are available per the Conditions of` Approval, and sixteen (16) units for occupancy by
moderato -income persons or households, all in satisfaction of the Conditions of Approval within the
Official Documents, and Exhibit C. Further, said Units shall be Constructed in accordance with the
City approved building plans and specifications and in compliance with the inclusionary housing
requirements set forth in Policy 4.2, Program 4.3(e) or the 2015-2023 Housing Element of the
City's General Plan,, with an average purchase price as follows, with more specific detail to specific
household size prices in Exhibit 0:
(a) For the Low-income Units, the price oil the unit will be based oil the Area Median
Income ("AMI") for a Low -Income Household income limit in existence when this
Agreement was signed, the Pricing Chart in Exhibit 1), but subject to an increase based
on as change in the "AMI" between the date this Agreement is signed and the time at
which said Low-income UllitS are available for: sale to Eligible Buycrs.Ret�r to Exhibit
D for the chart on income limits and price.
(b) For the Moderate -Income Units, the price on the unit will be based on the Area
Median Income ("AMI") for a Moderate -Income Household income limit in existence
when this Agreement was signed, but subject to an increase based on a change in the
"AMY between the date this Agreement is signed, the Pricing Chart in Exhibit D, and
the time at which said Moderate -.Income Units are available for sale to Eligible Buyers.
(c) Notwithstanding the foregoing provisions of Section 11, and the Conditions of
Approval, no less than nine of the affordable units shall be sold to low-income
households tile extent qualified purchasers are available, as determined by the Housing
Division,'I'he remaining units shall be sold to moderate -income. households,
1.2 Construction "Diming. ing, Four (4) of the Units shall be constructed as part of the
Single Family Home area within the Development and the other twenty one (21) Units as part or
the Condominium area within the Development. fit Subdivider fails to construct the Units in
compliance with this requirement, the City may withhold the issuance of building permits for the
1k,
remainder of the Development, until such time as the Subdivider comes into compliance with this
requirement.
13 Tentative Map Conditions. In addition to the foregoing, Subdivider shall satisfy all
other Conditions of Approval imposed by City on the tentative map for the Property.
1.4 Right to Annrove Buver. As between the Subdivider and the City, City -reserves the
right to approve the initial Eligible Buyers of the Units based on the Housing Land Trust of
Sonoma County's application and interview processes.
2,0 INDEMNITY
To the maxii-num extent permitted by law, Subdivider agrees to indemnify, defend (with
counsel approved by the City) and hold harmless City and its elected and appointed officials,
officers, employees, representatives and agents (collectively, "Indemnitees") from and against any
and all claims, liabilities, losses., costs, demands, damages, causes of action, legal and
administrative proceedings, penalties, deficiencies, fines, expenses and obligations (including,
without limitation, attorneys' fees and costs of litigation) arising out of or relating in any manner to
Subdivider's willful or negligent failure to perform the terms of this Agreement. The provisions of
this Section shall survive the; expiration or other termination of this Agreement or any release of all
or part of the Property from the burdens of this Agreement.
3.0. ENFORCEMENT
3.1 Default. In the event Subdivider, through no fault of the City, materially defaults in
the performance of any obligation under this Agreement, and such default remains uncured for a
period of (30) days after City has delivered a written notice of such, or in the event a cure cannot be
completed within thirty (30) days, if the Subdivider has not begun and diligently pursued the cure
to completion, then City may declare an "Event of Default" to have occurred, in which case it may
take one or more of the following steps:
(a) By mandamus or other suit, action or proceeding at law or in equity, require
Subdivider to perform its obligation under this Agreement, or enjoin any actions
which may constitute, cause or contribute to events of default and/or exacerbate
damages caused by events of default;
(b) Take such other action at law or in equity as may be reasonably necessary or
appropriate to enforce Subdivider's obligations hereunder,
3.2 Remedies Not Exclusive, In any case where this Agreement provides a specific
remedy to City for default by Subdivider, such remedy shall be in addition to, and not exclusive of,
City's right to pursue any other administrative, legal, or equitable remedy to which it may be
entitled.
4.0. COVENANTS TO RUN WITH THE LAND
4.1 Bindinp, on Successors. Subdivider hereby subjects the Property to the covenants,
reservations and restrictions set forth in this Agreement and declares its express intent that all such
covenants, reservations and restrictions shall be deemed covenants running with the land anti shall
1551\01\1905088.1
NMI
pass to and be binding upon the Subdivider's successors in title to the Property. All covenants
without regard to technical classification or designation shall be binding for the benefit of City, and
Such covenants shall run in favor of City 1`6j, the entire tease of this Agreement. Each, and every
contract, deed or other instrument hereafter executed covering or conveying the property or any
portion thereof shall be conclusively held to have been executed, delivered and accepted Subject to
Such covenants, reservations and restrictions set forth in this Agreement, regardless of whether such
covenants, reservations and restrictions are set forth in such contract, deed or other instrument.
4.2 Attorneys' Fees. In the event that a party to this Agreement brings an action against
the other party hereto by reason of the breach of any condition or covenant, representation or
warranty in this Agreement, or otherwise arising out of` this Agreement, the prevailing party in such
action shall be entitled to recover costs of suit, including reasonable attorneys'fees, as may be fixed
by the court rendering judgment. Attorney's fees shall include attorney's fees on any appeal.
43 Amendments, This Agreement shall be amended only by as written instrument
executed by the parties hereto or their successors in title, and duly recorded in the Official Records
of the Sonoma County Recorder's Office,
4.4 Severabi lity- /,Waiver / Intejiyration.
(a) If any provision of this Agreement shall be invalid, illegal or unenflorecable,
the validity, legality and enforceability of the remaining portions hereof shall not in
any Nvay be affected or impaired thereby.
RMEHXH�
(b) A waiver by either party of the performance of any covenant or condition
herein shall not invalidate this Agreement nor shall it be considered as waiver of any
other covenants or conditions,, nor shall the delay or forbearance by either party in
exercising any remedy or right, be considered a waiver of . oi- an estoppel against,
the later exercise of such remedy or right,
(c) 'chis Agreement together with any exhibits contains the entire agreement
between the parties.
W
IN WITNESS WHEREOF, the Subdivider and City have executed this Agreement on the date
first written above.
SUBDIVIDER:
PETALUMA 1.99, LP,:;
By: Dave Sanson
CITY..
CITY OF PETALUMA
John C. Brown
City Manager
ATTFST:
Claire Cooper, City Clerk
APPROVEWARS. TO FORM:
Eric Danly, City Attorney
[SIGNATURES MUST BE NOTARIZED]
1551\01k1905088.1
-D5q -0L 'r -
w
A notary public or other officer completing this certificate verifies only the identify of the individual who
signed the docurnent to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
State of California
Ss
County of Sonoma
On July 16, 2018, before me, Samantha Alison Pascoe, a notary public in and far the Slate of
California, personally appeared John C. Brown, who proved to me on the basis of satisfactory
evidence to be the persoar-ne4is/ere subscribed to the within instrument and
acknowledged to me thaed the same in his/her/ih if authorized
and that bergheir si nature on the instrument, the person�s-1, or the entity
Lim -0 WA -6.6"i
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
SAMANTHA ALISON PASCOEL
COMM. #21534113 Q
Signature l Kt NOTARY PUBLtC CALIFORNLA
LSONOMA COUNTY
MY Cormn, Expites May 16, 2020
..... .. . ......... .
ME
W
A notary public or other officer completing this certificate verifies only the identity of the individual who
signed the document to which this certificate is attached, and not Ihe truthfulness, accuracy, or
validity of that document.
Slate of California
ss
County of Contra Costa
On July 3, 2018 before one, April Huerta, a notary public in and for f fie State of California,
personally appeared Dave Sanson, who proved to me on the basis of satisfactory evidence to
be the personjo whose namej&} is/ re subscribed !o the wifNn insirument and acknowledged to
me that he/4hel-ihey executed the same in capacity(jas), and that by
NsiherAhei; signaiurefs} on fire instrument, the person(s), or the entity upon behalf of which the
person(&} acted, executed the instrument,
I certify under PENALTY OF PrRJURY under the laws of iho State of California that the foregoing
parograph is true and correct,
WITNESS my hand and official seal,
Signature
*404 Zal." - "I
APRIL HURTA
Commission # 2084210
Notary Public - California
Contra Costa County
Mr, Comm, Ex0res Oct 28, 2018
11111,611, 11 , I
30
WHEN RECORDEDTO:
Housing Land Trust of Sonoma County
P.O. Box 5431
Petaluma, CA 94955-5431
Attn: Dev Goetschius, Executive Director
ATTACHMENT #5
(Space above. for Recorder's Use)
DECLARATION OF AFFORDABILITY COVENANTS, BUYER'S OCCUPANCY
RESALE RESTRICTION AND OPTION TO PURCHASE
THIS DECLARATION OF AFFORDABILITY COVENANTS, RESALE
RESTRICTION AND OPTION TO PURCHASE (the "Declaration") is made and entered
into this day of , by and between HOUSING LAND TRUST OF
SONOMA COUNTY, a California public benefit nonprofit corporation ("HLT"), and
("Owner"), with respect to the following
recitals:
A. HLT is organized exclusively for charitable purposes, including: the
development and preservation of decent, affordable housing for persons with low to
moderate incomes; the conservation of land and natural resources by means such as
fostering responsible long-term occupancy; the promotion of neighborhood stability and
the creation of a more equitable and stable system of property and housing opportunities;
and the creation of home ownership opportunities for low to moderate income people
who otherwise would be denied such opportunities because of limited financial
resources.
B. A goal of HLT is to stimulate the conveyance of decent, affordable
housing among low to moderate income people by providing access to housing for such
persons at affordable prices. HLT owns land throughout Sonoma County that generates
affordable homeownership opportunities for many low and moderate income households
(the "HLT Program").
C. Owner shares the charitable goals and purposes of HLT and has agreed to
enter into this Declaration not only because HLT and the City Affordable Housing
Program enable Owner to acquire a home for a below market rate price that is affordable
to owner but also because Owner desires to further the charitable purposes of HLT.
D. Owner is acquiring that certain real property located at
in the City of Petaluma (the "Unit"), and more particularly described in Exhibit A.
E. As set forth in the Inclusionary Housing Agreement recorded against title
to the Unit, the City of Petaluma (the "City") required the developer of the Unit (the
31
"Developer") to dedicate the Unit for affordable housing purposes. As set forth in the
Affordable Housing Agreement and Declaration of Restrictive Covenants, which is also
recorded against the Unit, the City is requiring the Unit to remain affordable to low and
moderate income households pursuant to the City's affordable housing program
requirements (the "City Affordable Housing Program") and that HLT implement the
City Affordable Housing Program requirements. The Developer and HLT also agreed
that HLT implement affordability requirements in accordance with the HLT program.
This Declaration implements the City Affordable Housing Program and the HLT
Program.
F. In furtherance of the charitable goals and purposes of HLT, and in
exchange for the opportunity to buy the Unit for an affordable price, Owner is entering
into this Declaration with HLT. Among other requirements, this Declaration requires
Owner to occupy the Unit, and restricts the sales price for which Owner may sell the
Units in the future. In addition, HLT will have the option to purchase the Unit for an
affordable price at the end of the term of this Declaration, in the event Owner desires to
transfer the Unit, or in the event the Owner is in default under this Declaration.
G. HLT and Owner recognize the special nature of the terms and conditions
of the Declaration, and each of the parties hereto, with the independent and informed
advice of legal counsel, freely accepts said terms and conditions, including, without
limitation, such terms and conditions as might affect the marketability or resale price of
Unit.
H. HLT and Owner understand and accept that the terms and conditions of
this Declaration advance the parties' shared goals over an extended period of time and
through a succession of owners.
NOW THEREFORE, in consideration of the foregoing recitals, of the mutual promises of
the parties hereto, and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I: ACKNOWLEDGEMENTS
1.1 LETTER OF ACKNOWLEDGEMENT: Owner and each assignee and
successor to Owner's rights hereunder (each an "Owner") shall execute and deliver to
HLT a Letter of Acknowledgement, in a form substantially similar to the attached Exhibit
B, confirming Owner's review and understanding of this Declaration (including, but not
limited to, Article X of this Declaration with respect to the transfer, sale and/or
disposition of the Unit).
1.2 CERTIFICATIONS: Owner certifies that (i) the financial and other
information previously provided in order to qualify to acquire the Unit is true and correct
as of the date first written above, (ii) the Owner shall occupy the Unit as Owner's
principal place of residence, (iii) the Owner is an Income -Qualified Resident (as defined
in Section 10.2); (iv) Owner will fully cooperate with HLT in providing all information
32
requested by HLT in monitoring Owner's compliance with this Declaration within five
(5) business days of HLT's request for such information.
Throughout the Term of the Declaration, Owner shall make yearly certifications
regarding Owner's occupancy of the Unit in accordance with Section 4.4, Owner's
compliance with the insurance requirements of this Declaration in accordance with
Section 9.4, and all current occupants of the Unit. This certification shall take the form
of Exhibit C.
ARTICLE II: INTENTIONALLY BLANK
ARTICLE III: DURATION OF DECLARATION
3.1 TERM: The term of this Declaration will be 90 years, commencing on the
day of , 20 , and terminating on the day of
2 , unless terminated sooner or extended by mutual agreement
of the parties.
ARTICLE IV: USE OF UNIT
4.1 RESIDENTIAL USE ONLY: Owner shall use, and will cause all
occupants thereof to use, the Unit only for residential purposes and such incidental uses
pennitted under the applicable zoning regulations. In addition, transfers of Owner's
interest in the Unit will be subject to the restrictions in this Declaration, including
Articles X and XI below. Owner agrees and acknowledges that the foregoing limitations,
all other conditions and restrictions contained in this Declaration, and any conditions and
restrictions placed on record by HLT and any public body relating to affordability are
essential to the fulfillment of the charitable purposes of HLT and are conditions and
restrictions on the use of the Unit intended to run the full term of this Declaration.
4.2 RESPONSIBLE USE: Owner shall use the Unit in a manner so as not to
cause actual harm to others or create any nuisances, public or private, and will dispose of
any and all waste in a safe and sanitary manner and in accordance with all federal, state
and local laws and customary local practices. Owner shall, at all times during the term
hereof, maintain the Unit in a good, safe, and habitable condition (reasonable wear and
tear excepted), in full compliance with all applicable laws and regulations, and in such
condition as is required to maintain the insurance coverage required by Section 9.4 of this
Declaration.
4.3 RESPONSIBLE FOR OTHERS: Owner shall be responsible for the use of
the Unit by any residents of the Unit, their families, guests, invitees, or anyone else using
the Unit with Owner's consent, and will make them aware of the spirit, intent and terms
of this Declaration.
4.4 OCCUPANCY: Unless otherwise agreed to in writing (in advance) by
HLT, Owner shall occupy the Unit as his/her primary residence during the entire term of
this Declaration. Occupancy by domestic partners, children or other immediate family
33
members or dependents of Owner shall not be deemed occupancy by Owner. HLT and
its designated agent shall have the right to conduct periodic site visits to confirm
occupancy by Owner.
4.5 INSPECTION: HLT may inspect any portion of the Unit at any
reasonable time and in a reasonable manner upon at least 24 hours oral notice to Owner,
however, HLT may inspect any portion of the Unit at any time without notice to Owner
in the event of an emergency.
4.6 OWNER'S RIGHT TO PEACEFUL ENJOYMENT: Owner has the right
to undisturbed enjoyment of the Unit, and HLT has no desire or intention to interfere with
the personal lives, associations, expressions, or actions of Owner, subject to the terms,
covenants, conditions, provisions, restrictions, and reservations of this Declaration.
4.7 PROHIBITION OF HAZARDOUS SUBSTANCES: Owner shall not
cause or permit the presence, use, disposal, storage, or release of any Hazardous
Substances on or in the Unit. Owner shall not do, nor allow anyone else to do, anything
affecting the Unit that is in violation of any Environmental Law. The preceding two
sentences shall not apply to the presence, use, or storage at the Unit of small quantities of
Hazardous Substances that are generally recognized to be appropriate to normal
residential uses and to maintenance of the Unit.
a) Definitions.
i) "Hazardous Substances" shall mean those substances
defined as toxic or hazardous substances or hazardous waste under any Environmental
Law, and the following substances: gasoline, kerosene, other flammable or toxic
petroleum products, toxic pesticides and herbicides, volatile solvents, materials
containing asbestos or formaldehyde, and radioactive materials.
ii) "Environmental Law" shall mean all federal and state of
California laws that relate to health, safety or environmental protection.
b) Notice And Remediation. Owner shall, as soon as possible but no
later than five (5) business days of learning of such event, give HLT written notice of any
investigation, claim, demand, lawsuit or other action by any governmental or regulatory
agency or private party involving the Unit and any Hazardous Substance or
Environmental Law of which Owner has actual knowledge. If Owner learns, or is
notified by any governmental or regulatory authority, that any removal or other
remediation of any Hazardous Substance affecting the Units is necessary, Owner shall, as
soon as possible but no later than twenty-one (21) days of such notification or of learning
of such event, commence all necessary remedial actions in accordance with
Environmental Law and shall diligently pursue such remediation until completion.
C) Indemnitv. Owner shall indemnify HLT, and its agents,
employees, officers, board members and/or commission members ("Indemnified Parties")
34
for the failure of the Owner or any person or entity other than Owner, to comply with any
Environmental Law. This provision shall survive the termination of the Declaration.
ARTICLE V: MONITORING FEE
5.1 MONITORING FEE: In consideration of the opportunity to participate in
HLT's program and to use and occupy the Unit, Owner will pay to HLT a monthly fee
for HLT's costs associated with the HLT Program (the "Monthly Fee"). Subject to the
provisions of Section 5.3, below, the Monthly Fee shall be
DOLLARS ($ .00) per month. Payment of
the Monthly Fee is a condition to Owner's ownership of the Unit. The viability and
success of the HLT Program and the resulting affordable homeownership opportunities
and units depend, in part, upon such fees.
5.2 PAYMENT OF MONITORING FEE: The Monthly Fee shall be payable
to HLT, at the address specified in Section 13. 1, on the first day of each month for as
long as this Declaration remains in effect, unless, with HLT's consent, the Monthly Fee is
to be escrowed by a Permitted Mortgagee, in which case payment shall be made as
specified by that Mortgagee. If the Declaration commences on a day other than the first
of the month, a pro -rata portion of the Monthly Fee shall be paid for the balance of the
month at the time the Declaration is executed. In the event that any amount of payable
Monthly Fee remains unpaid when the Unit sold, the Declaration is terminated or
assigned to another party, the amount of payable Monthly Fee shall be paid to HLT out of
any proceeds from the sale of the Unit otherwise due to Owner at the time of such sale.
5.3 INCREASE IN MONITORING FEE: At the sole discretion of HLT, the
Monthly Fee may be increased each year during the term of the Declaration by an amount
not to exceed the lesser of (i) five percent or (ii) the annual percentage of increase in the
Consumer Price Index. "Consumer Price Index," as used in this Declaration, means the
Consumer Price Index for All Urban Wage Earners and Clerical Workers (San Francisco -
Oakland -San Jose, CA, All Urban Consumers All Items, Base 1982-1984=100), as
published by the Bureau of Labor Statistics of the United States Department of Labor. In
the event such index is not in existence when any detennination relying on such index
under this Declaration is to be made, the most comparable governmental index as
determined by HLT in its sole discretion published in lieu thereof shall be substituted for
the Consumer Price Index. HLT shall provide written notice to Owner concerning any
increase in the Monthly Fee. Owner shall be responsible for the timely payment of any/all
such increases.
5.4 REDUCTION, DELAY OR WAIVER OF MONITORING FEE: HLT, in
its sole and absolute discretion, may reduce, delay or waive, in whole or in part, the
Monthly Fee at any time and from time to time in consideration of the personal hardship
or incapacity of the Owner or Owner's general inability to pay. The intent of this Section
5.4 is to foster continued occupancy by the resident owners despite the occurrence of
unforeseeable financial and personal hardship if deemed reasonably possible by HLT.
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5.5 ADDITIONAL MONITORING FEE: In the event Owner shall owe any
fees, costs or other sums to HLT under the terins of this Declaration in addition to the
Monthly Fee described in Section 5. 1, including, but not limited to, such costs as HLT
may incur on behalf of Owner after failure of Owner to comply with its obligations under
the Declaration, HLT may charge Owner such amounts as a "Compliance Fee". HLT
shall determine and notify Owner of the time and the manner (e.g. in lump sum or several
payments) in which any Compliance Fee is to be paid by Owner. Any Compliance Fee
shall be payable to HLT, at the address specified in Section 13.1.
5.6 LATE CHARGES: HLT hereby acknowledges that late payment of the
Monthly Fee and any other sums due hereunder will cause Owner to incur costs and
expenses not contemplated by this Declaration, the exact amount of which will be
extremely difficult and impractical to fix and ascertain. Therefore, if any installment of
the Monthly Fee or other sum due from Owner shall not be received by HLT by the tenth
(10th) day of any month, Owner shall pay to HLT a late charge of five percent (5%) of the
installment or other sum due. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs HLT will incur by reason of late payment by
Owner. Acceptance of such late charge by HLT shall in no event constitute a waiver of
Owner's default or breach with respect to such overdue amount, nor prevent HLT from
exercising any of the other rights and remedies granted under this Declaration. In the
event that a late charge is payable under this Declaration, whether or not collected, for
three (3) consecutive installments of the Monthly Fee, then notwithstanding anything else
in this Declaration to the contrary, the Monthly Fee shall, at HLT's option, become due
and payable quarterly in advance.
ARTICLE VI: TAXES, ASSESSMENTS AND OTHER CHARGES
6.1 OWNER'S RESPONSIBILITY FOR TAXES, ASSESSMENTS AND
OTHER CHARGES: Owner shall be responsible for payment of all taxes (including real
property taxes levied against the Unit), governmental assessments, homeowner's
association assessments and other charges that relate to the Unit. To the extent any such
taxes, assessments and charges are not (i) collected as part of the Monthly Fee pursuant to
Section 6.3 below or (ii) collected, impounded and paid by a Permitted Mortgagee,
Owner will pay promptly when due such taxes, assessments and charges directly to the
taxing or assessing authority. Owner shall also pay directly, when due, all service bills,
utility fees and other amounts charged as a result of Owner's ownership and occupancy
of the Unit.
6.2 OWNER'S RIGHT TO CONTEST: Owner shall have the right to contest
the amount or validity of any taxes relating to the Unit. All costs and expenses of such
proceedings shall be paid by Owner. If Owner contests any such tax, assessment, or
charge, Owner may withhold or defer payment or pay under protest, but Owner shall
protect HLT and the Unit from the consequences of any such contest being unsuccessful
by adequate bond or other security acceptable to HLT.
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6.3 PAYMENTS IN EVENT OF DELINQUENCY: In the event that Owner
fails to timely pay the taxes, assessments or other charges specified in Section 6. 1, above,
which are not otherwise part of the Monthly Fee, Owner shall pay such delinquent
amounts to HLT immediately upon HLT's demand or, at HLT's sole option, Owner may
pay such delinquent amounts over time by means of an increase in the Monthly Fee
payments in amounts such that the total sum collected will offset the cost of any
delinquent and current taxes, assessments or other charges. HLT has the right, but not the
obligation, to pay any and all delinquent taxes, assessments and charges on behalf of
Owner and to charge Owner for the repayment thereof. Upon HLT's demand, Owner
shall immediately reimburse HLT for all amounts thus paid on Owner's behalf.
6.4 PROOF OF COMPLIANCE: Concurrently with the payment of any
taxes, assessments and/or charges required or permitted by the provisions of this
Declaration, each party, upon request, will furnish evidence satisfactory to the other
documenting the payment of all taxes, assessments, and charges paid by such party as
required or permitted by the provisions of this Declaration. A photocopy of a paid receipt
or cancelled check that manifests payment on or before the applicable due date will be
deemed acceptable/satisfactory evidence of timely payment by the tendering party.
ARTICLE VII: OWNERSHIP
7.1 OWNERSHIP: It is expressly understood and agreed that the Unit will be
and remain the property of Owner. Title to the Unit will be and remain vested in Owner.
Owner's exercise of the rights of ownership is subject and subordinate, however, to the
provisions of this Declaration (including but not limited to Section 7.6, Article X and
Article XII below) regarding the disposition of Unit by Owner and HLT's option to
purchase the Unit. In addition, Owner shall not partition the Unit without HLT's prior
written consent, nor shall Owner demolish the Unit without the prior written consent of
HLT.
7.2 PURCHASE OF UNIT BY OWNER: Owner is simultaneously executing
this Declaration and purchasing the Unit. Owner's right to purchase and owner of the
Unit are subject to this Declaration.
7.3 CONSTRUCTION AND ALTERATION:
a) Approval of Construction and Alteration. In the event Owner
wishes to make capital improvements or modifications to the Unit, Owner shall obtain
advanced written approval from HLT for any capital improvements or modifications
whose initial costs exceed Two Thousand Dollars ($2,000). Prior to commencing
construction or installation of the approved improvements)/modification(s), Owner shall
provide to HLT copies of any and all building permits required and issued for the
approved improvement(s)/modification(s). Notwithstanding any provision herein to the
contrary, HLT's approval of any improvement or modification pursuant to this Section
7.3(a) shall not entitle Owner to an increase in the Purchase Option Price.
37
b) Requirements of Construction and Alteration. Any construction or
modification in connection with the Unit is subject to the following conditions: (a) all
costs will be borne and paid for by Owner; (b) all construction will be performed in a
workman -like manner and will comply with all applicable laws, ordinances and
regulations, including the requirements of local and state public health authorities; (c) all
construction must be consistent with the permitted uses set forth in Article IV; (d) no
changes will be made to the exterior building envelope, if applicable, without the prior
written consent of HLT, which consent may be withheld in HLT's sole and absolute
discretion; and (e) Owner will furnish to HLT a copy of any plans therefor and all
building permits for such construction prior to commencing construction. Before
improvements or modifications are made to the Unit by a third party, Owner shall
provide HLT with evidence that such third party carries workers compensation coverage
to the extent required by law and liability insurance in an amount to be approved by HLT,
in its reasonable discretion.
7.4 PROHIBITION OF LIENS:
a) Owner will not suffer or permit any vendor's, mechanic's,
laborer's, or materialman's statutory or similar lien to be filed against the Unit which
remains more than sixty (60) days after filing thereof, and Owner will cause the same to
be discharged of record by payment, deposit, bond, order of a court of competent
jurisdiction or as otherwise permitted by law. If Owner fails to cause such lien to be
discharged within the period aforesaid, then, in addition to any other right or remedy of
HLT, HLT may, but shall not be obligated to, discharge the same by paying the amount
in question. Owner in good faith and at Owner's expense may contest the validity of any
such asserted lien, provided Owner has furnished a bond in an amount set by statute or
otherwise sufficient to release the Unit from such lien. Any amounts paid by HLT
hereunder in respect of such liens will be deemed to be a Compliance Fee payable by
Owner upon demand.
b) Owner will not permit or allow liens or encumbrances of any type
not described in 7.4(a) to attach to HLT's or Owner's title to or interest in the Unit,
including but not limited to any mortgage, deed of trust or other encumbrance, except
with the prior written consent of HLT.
7.5 MAINTENANCE: Owner shall, at Owner's sole expense, maintain the
Unit in good condition and working order and in accordance with all applicable laws,
rules, ordinances, orders and regulations of all governmental agencies and entities with
jurisdiction and all insurance companies insuring all or any part of the Unit. If Owner
fails to maintain the Unit in this manner and if the Owner has not cured such condition
within thirty (30) days after receiving a notice from HLT of such a condition, or in the
event of an emergency, then in addition to any other rights available to HLT, HLT shall
have the right (but not the obligation) to perform all acts necessary to cure such
condition. The costs of such cure shall be due from Owner as a Compliance Fee. HLT
shall not be required to furnish any services or facilities, including but not limited to heat,
electricity, air conditioning or water, or to make any repairs to the Unit, and Owner
hereby assumes the full and sole responsibility for furnishing all services and facilities. If,
for any reason, the Unit is vacant, Owner shall maintain a utility connections until the
Unit is transferred in accordance with this Declaration.
7.6 DISPOSITION OF UNIT UPON EXPIRATION OF TERM: Upon the
expiration of the term if this Declaration, HLT shall have the option to purchase the Unit,
at the Purchase Option Price calculated in accordance with Sections 10.7 and 10.8 below.
If HLT elects to purchase the Unit, shall follow the procedures set forth in Section
10.5(b) and (c) below. If HLT elects to purchase the Unit, HLT shall deliver a Notice of
Exercise of Option (as defined in Section 10.5(b) below) at least ninety (90) days prior to
the expiration of the term of this Declaration. Upon providing a Notice of Exercise of
Option, HLT may either proceed to exercise the Purchase Option directly by purchasing
the Unit or may assign the Purchase Option to an Income -Qualified Resident. The
purchase (by HLT or HLT's assignee) must be completed not more than one hundred
twenty (120) nor less than ten (10) days prior to the end of the term of this Declaration.
Title to the Unit shall be delivered by the Owner to HLT by grant deed, free and clear of
any mortgage or other liens, unless approved in writing by HLT.
7.7 DEED OF TRUST. In connection with this Declaration, Owner shall
execute and record a Deed of Trust in favor of HLT ("Deed of Trust"). This Declaration
and the Deed of Trust shall be subordinate to the lien of the First Lender Deed of Trust
(as defined in Section 8.3(b) below). The Deed of Trust shall, among other matters,
secure the amounts that may be owed to HLT under this Declaration by Owner.
ARTICLE VIII: FINANCING
8.1 PERMITTED MORTAGE(S): Owner may mortgage, pledge, or
encumber the Unit or any portion thereof or interest therein only pursuant to a Permitted
Mortgage. As used in this Declaration, a "Permitted Mortgagee" is the holder of a
"Permitted Mortgage". A "Permitted Mortgage" and "Permitted Mortgages" will be
mortgages which:
a) run in favor of either (1) a so-called "institutional lender" such as,
but not limited to, a federal, state, or local housing finance agency, a bank (including
savings and loan association or insured credit union), an insurance company, a pension
and/or profit-sharing fund or trust, or any combination of the foregoing, the policies and
procedures of such institutional lender which are subject to direct governmental
supervision, or (2) a "community development financial institution" as certified by the
U.S. Department of Treasury or similar nonprofit lender to housing projects for low- and
moderate -income persons;
b) are a lien on all or any of the Unit (the "Security") unless
otherwise approved in writing by HLT; and
C) have been consented to by HLT pursuant to Section 8.2.
The parties recognize and agree that the Unit may be subject to more than one Permitted
Mortgage at a particular time.
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8.2 HLT'S CONSENT TO PERMITTED MORTGAGE: Owner may
mortgage the Unit only with the written consent of HLT. Not less than thirty (30) days
prior to the date on which Owner requests that HLT's consent to a mortgage be effective,
Owner shall furnish to HLT true and correct copies of each and every document and
instrument to be executed in connection with the transaction represented by such
mortgage.
HLT shall be required to consent to a mortgage only if:
a) such mortgage meets the requirements of Section 8.1(a) and (b);
b) at the time of such submission and at the time proposed by Owner
for the execution of such documents, no default is then outstanding under this
Declaration;
C) such mortgage and related documentation do not contain any
provisions other than provisions generally contained in mortgages used for similar
transactions in the City;
d) the total amount of all debt financing secured against the
Improvements does not exceed the then Purchase Option Price.
e) the total amount of all debt financing secured against the Unit
does not cause the Owner's housing costs to be unaffordable to Owner, as determined by
HLT in its sole discretion and, if such debt will refinance existing debt it must comply
with HLT's refinance policy.
f) if the mortgage is not made by a public agency or nonprofit
corporation, such mortgage may not include interest only payments, negative
amortization, or a variable interest rate that will cause Owner's monthly mortgage
payments to increase over time.
For each mortgage of record, a request for notice of default and any notice of sale
under any deed of trust or mortgage with power of sale encumbering the Unit shall be
recorded by HLT in the Office of the Recorder of the County of Sonoma for the benefit
of HLT. HLT may declare a default under this Declaration upon receipt of any notice
given to HLT under Section 12.1(e) below.
In the event of default and foreclosure under any other mortgage loan on the Unit,
HLT shall have the same right as the Owner to cure defaults and redeem the Unit prior to
the foreclosure sale. Nothing herein shall be construed as creating any obligation of HLT
to cure any such default, nor shall this right to cure and redeem operate to extend any
time limitations in the default provisions of the underlying deed of trust or mortgage. If a
request for notice of default for the benefit of HLT has not been recorded, HLT's right to
purchase the Unit shall commence from the date a notice of default is given by HLT to
the Owner.
M
HLT and the Owner agree that the requirements of this Article VIII are necessary
to ensure the continued affordability of the Unit to Owner and to minimize the risk of loss
of the Unit by Owner through default and foreclosure of mortgage loans. Owner further
acknowledges that violation of the provisions of this Article VIII shall constitute a
Default under this Declaration for which HLT may exercise HLT's option upon default
pursuant to Article XII.
8.3 RIGHTS OF PERMITTED MORTGAGEE AND SUBORDINATION:
a) Notwithstanding any other provision in this Declaration or the
Deed of Trust to the contrary, this Declaration and the Deed of Trust shall not diminish or
affect the rights of the California Housing Finance Agency ("Ca1HFA"), HUD, the
Federal National Mortgage Association ("FNMA"), or the Veterans Administration
("VA") under the First Lender Deed of Trust (as defined in Section 8.3(b)) or any
subsequent First Lender deeds of trust hereafter recorded against the Unit in compliance
with this Article VIII.
b) Notwithstanding any other provision hereof, the provisions of this
Declaration and the Deed of Trust shall be subordinate to the lien of the Permitted
Mortgagee in first lien position (the "First Lender") and shall not impair the rights of the
First Lender, or the First Lender's successor or assign, to exercise its remedies under the
deed of trsut securing the loan from the First Lender (the "First Lender Deed of Trust")
in the event of default under the First 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 or assignment in lieu of foreclosure, this Declaration shall be
forever terminated and shall have no further effect as to the Unit or any transferee
thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired
title to the Unit pursuant to a deed or assignment in lieu of foreclosure and no notice of
default was recorded against the Unit by such holder in connection therewith, this
Declaration shall automatically terminate upon such acquisition of title, only if (i) HLT
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) HLT shall not have cured
the default within the sixty (60) -day period. Owner agrees to record any necessary
documents to effect such termination, if applicable.
C) Notwithstanding other provisions of this Declaration, HLT's
option to purchase on default shall not be exercised by HLT when a deed of trust insured
by HUD is secured by the Unit, 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.
8.4 REMEDIES DURING FORECLOSURE: HLT shall retain all other
remedies set forth in Article XII during such time as the Permitted Mortgagee has
commenced such foreclosure.
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8.5 NOTICE: In the event that HLT sends a notice of default under the
Declaration to Owner, HLT shall also send a notice of Owner's default to Permitted
Mortgagee. Such notice or any other notice to be given to a Permitted Mortgagee, shall
be given in the manner set forth in Article XIII, section 13.1 of the Declaration to the
Permitted Mortgagee at the address that has been given by the Permitted Mortgagee to
HLT by a written notice to HLT sent in the manner set forth in said section 13.1 of the
Declaration.
8.6 COSTS OF MORTGAGE: Owner will pay to HLT at HLT's option, as
additional rent hereunder, all fees, costs and expenses, including, without limitation,
reasonable attorneys' fees, incurred by HLT in connection with any Permitted Mortgage
or any other mortgage Owner presents to HLT for approval, where said fees, costs and
expenses exceed the aggregate amount of $
8.7 HLT'S RIGHT TO PROCEEDS IN EXCESS OF PURCHASE OPTION
PRICE: The parties recognize that it would be contrary to the fundamental concept of this
agreement and an incentive to abuse Owner's authorization to encumber its Unit with a
Permitted Mortgage if Owner could realize more than the Purchase Option Price as the
result of any foreclosure of any mortgage. Accordingly, Owner hereby irrevocably
assigns to HLT any and all net proceeds of sale of the Unit remaining after payment of
costs of foreclosure and satisfaction of the lien of any mortgage which would otherwise
have been payable to Owner, to the extent such net proceeds exceed the net proceeds that
Owner would have received had the property been sold for the Purchase Option Price
established in Article X of this Declaration, and authorizes and instructs the Permitted
Mortgagee or any party conducting any sale to pay the amount of said excess proceeds
directly to HLT. In the event that, for any reason, such excess proceeds are paid to
Owner, Owner hereby agrees to promptly pay the amount of such excess proceeds to
HLT.
ARTICLE IX: LIABILITY, INSURANCE, DAMAGE
AND DESTRUCTION, EMINENT DOMAIN
9.1 OWNER'S LIABILITY: From and after the date hereof, Owner assumes
sole responsibility and liability to any and all persons and authorities related to its
possession, occupancy and use of the Unit.
9.2 INDEMNIFICATION OF HLT: Owner will defend, indemnify and hold
HLT hannless against all liability and claims of liability for damage or injury to person or
property from any cause on or about the Unit. Owner waives all claims against HLT for
damage or injury to person or property on or about the Unit arising, or asserted to have
arisen, on or about the Unit from any cause whatsoever. Notwithstanding the foregoing
two sentences, HLT will remain liable (and Owner will not indemnify and defend HLT
against or waive such claims of liability) for damage or injury due to the grossly
negligent or intentional acts or omissions of HLT or HLT's agents or employees.
IN
9.3 PAYMENT BY HLT: In the event HLT is required or elects to pay any
sum whatsoever which is the Owner's responsibility or liability, Owner will reimburse
HLT therefor and for reasonable expenses caused thereby.
9.4 INSURANCE: Owner will, at Owner's sole expense, keep the Unit and
all Unit located thereon continuously and adequately insured against all manner of loss,
peril or damage. At a minimum, Owner shall procure and carry such contracts/policies of
insurance that will insure against general liability losses in an amount to be approved by
HLT, fire damage and other extended coverage hazards, and which contracts/policies will
provide for the full replacement value of the Unit (and which fire and other extended
coverage hazard policies shall be adjusted every five years by appraisal if requested by
HLT). All contracts/policies of insurance will name HLT as an additional insured (or
loss payee for property insurance policies) and will be written on a primary, non-
contributory basis. HLT shall have the right to designate, prescribe and modify the
precise coverage types and amounts to be carried by Owner during the term of this
Declaration. Owner hereby consents and authorizes HLT to communicate directly with
Owner's insurance broker in order for HLT to confirm Owner's compliance with this
Section 9.4.
9.5 DAMAGE OR DESTRUCTION: Except as provided below in this
Section 9.5, and subject to the rights of the First Lender, in the event of fire or other
casualty to any Unit, Owner will forthwith commence, and thereafter diligently and
continuously prosecute to completion, the repair of such damage and the restoration of
such Unit to their condition immediately prior to such damage. All such repairs and
restoration will be completed as promptly as possible but in no event longer than twelve
(12) months after the damage/casualty events, or such longer reasonable time as approved
in advance by HLT. Owner will also promptly take all steps necessary to assure that the
Unit will be and remain safe and the damaged Unit not constitute a hazard or danger to
persons or property from the time of the fire or other casualty. Any insurance proceeds
shall be paid to HLT and Owner to cover any of HLT's and Owner's expenses of
collecting the proceeds, respectively. Remaining proceeds shall be paid, to the Owner (or
its Permitted Mortgagee to the extent required by the Permitted Mortgage) for the costs of
repairing or rebuilding that part of the Unit and Unit damaged or destroyed by the fire or
other casualty. In no event will the Monthly Fee be suspended or abated, unless HLT, in
its sole and absolute discretion, decides to do so in consideration of the personal hardship
or incapacity of Owner. (The intent of this Section is to foster perpetual occupancy by
Income -Qualified Residents, as defined in Section 10.2 below, despite the occurrence of
unforeseeable financial and personal hardship.)
If Owner, using reasonable judgment and in reliance upon professional estimates and
advice, determines either that full repair and/or restoration of the Unit is physically
impossible, any proceeds of insurance payable to Owner on account of such fire or other
casualty will be paid: first, to the expenses of collection thereof. Remaining proceeds will
be paid to the Owner (or its Permitted Mortgagee if required by the Permitted Mortgage)
up to the then applicable HLT's Purchase Option Price (as of immediately prior to the
casualty) calculated pursuant to Sections 10.7 and 10.8 below. The balance of such
proceeds, if any, will be paid to HLT.
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9.6 EMINENT DOMAIN AND PUBLIC DEDICATION: In the event of a
taking of the entire Unit by reason of eminent domain or other action of public authority
prior to the expiration of the term of this Declaration, the entire amount of any award(s)
paid will be allocated between Owner and HLT according to the same order of allocation
as that calculated for a casualty according to the preceding Section 9.5.
In the event of a taking (as aforesaid) of less than the entire Unit, then the proceeds paid or
payable by reason of such taking will be allocated as follows:
a) If Unit may reasonably be restored to a residential use consistent
with this Declaration, HLT may in its discretion allocate some or all of the proceeds to
enable Owner to repair and restore that which may remain thereof.
b) Any remainder after such allocation will be paid over in
accordance with an allocation made as provided above for a taking of the entire Unit.
Any and all proceedings brought by a party in connection with the claim or claims for
damages as a result of any taking referred to in this Section will be conducted by and at the
sole expense of such party. If any provision of law now or hereafter in effect will require
that said proceedings be brought by or in the name of any owner or lessee of the premises,
such party will join in such proceedings or permit the same to be brought in its name. Each
party covenants and agrees to do any and all acts and to execute any and all documents
which may be required to enable the other to maintain such proceedings. If such party
required to join in the proceedings will incur any cost or expense in connection with such
proceedings, such party will be entitled to reimbursement for the reasonable amount thereof
and same will likewise constitute a first charge against any award.
ARTICLE X: TRANSFER, SALE OR
DISPOSITION OF UNIT
10.1 INTENT AND EFFECT: It is the express understanding and intent of the
parties that the terms and conditions of this Article X are intended to enhance the
marketability of the Unit by making it affordable to Income -Qualified Residents who,
absent such provisions, would be unable to afford them.
10.2 TRANSFERS TO INCOME -QUALIFIED RESIDENTS: Owner may
transfer its interest in the Unit only to HLT or an Income -Qualified Resident (as defined
below) or otherwise only as explicitly permitted by the provisions of this Article X. All
such transfers shall be subject to HLT's review and purchase option rights set forth in this
Article X, and the purchase price attendant to any sale, transfer and/or disposition shall
not exceed the Purchase Option Price (defined in Section 10.8 below). In addition,
concurrent with the transfer, the new owner shall execute a new declaration of
affordability covenants with resale restriction and option to purchase with HLT and a
deed of trust for the benefit of HLT, substantially similar to the form of this Declaration
(which shall include a new ninety (90) year term) and Deed of Trust, respectively. Upon
recordation of such new declaration (or a memorandum thereof) and deed of trust against
title to the Unit, this Declaration shall terminate and the Deed of Trust shall be
reconveyed. Owner hereby agrees to provide HLT with such information that HLT may
require to calculate the Purchase Option Price and verify that the transfer was completed
in accordance with the terms and conditions of this Declaration. Any purported transfer
done without following the procedures set forth below, except as permitted in Article
VIII, shall be null and void.
For purposes of this Declaration, "Income -Qualified Resident" means a person or group
of persons within a household whose combined income does not exceed percent
of the median household income for the Primary Metropolitan Statistical Area (or,
if not within such Area, for the City) for such number of persons, as determined from time
to time by the Department of Housing and Urban Development (HUD) or any successor
thereto.
10.3 TRANSFER TO OWNER'S LEGATEES OR HEIRS: Upon receipt of
notice from the personal representative of the decedent's estate given within ninety (90)
days of the death of Owner (or the last surviving co-owner of the Unit), HLT will, unless
for good cause shown, consent to a transfer of the Unit to and an assumption of this
Declaration and Deed of Trust by any heir, legatee or devisee of the Owner if, but only if,
such heir, legatee or devisee (i) submits a Letter of Acknowledgement in the form
attached hereto as Exhibit B and (ii) demonstrates to HLT's reasonable satisfaction that
he/she meets the definition of Income -Qualified Resident provided herein. If the heir,
legatee or devisee is unable or unwilling to comply with these requirements, then such
person will not be entitled to possession of the Unit and must transfer the Unit in
accordance with the provisions of this Declaration.
10.4 HLT'S NOTICE OF INTENT TO SELL: In the event that Owner wishes
to sell/convey its interest in the Unit, Owner shall notify HLT, in writing, of such desire
(the "Intent -to -Sell Notice"). Such Notice shall include a statement as to whether Owner
wishes to recommend a prospective buyer as of the date of the Notice. If Owner so
desires to recommend a purchaser, the Intent -to -Sell Notice shall be accompanied by the
following or comparable items: (1) the tax return of the proposed transferee for the
immediately preceding year; (2) a current verification of the proposed transferee's
employment; (3) the pay stubs of the proposed transferee buyer for the three months
immediately preceding the month in which notice is given to HLT; (4) a statement of the
proposed terms of sale; and (5) such other documentation as HLT shall reasonably
require.
No assignment, sale, transfer or other disposition will be effective unless and until
HLT confirms in writing within forty-five (45) days of receipt of such notice and
accompanying documentation that such assignee or buyer is an Income -Qualified
Resident and that the terms of sale are pennitted under this Declaration. HLT will be
deemed to have confirmed the status of the proposed transferee, subject to its option to
purchase set out in Section 10.5, if HLT or its agent fails to respond in writing within
forty-five (45) days of the receipt of the notice of intent to sell and accompanying
documents. HLT's confirmation or failure to confirm the status of the intended transferee
will not constitute a waiver of its option to purchase as set out in Section 10.5. Any new
owner must execute a new declaration of affordability covenants with resale restriction
and option to purchase with HLT and a deed of trust for the benefit of HLT, substantially
similar to the form of this Declaration and Deed of Trust, respectively.
10.5 HLT'S OPTION TO PURCHASE:
a) Purchase Option. Upon receipt of an Intent -to -Sell Notice from
Owner, HLT shall have the option to purchase the Unit (the "Purchase Option") at the
Purchase Option Price calculated in accordance with Sections 10.7 and 10.8 below. The
Purchase Option and Purchase Option Price are designed to further the goals and
purposes set forth herein by helping to preserve the affordability of the Unit to
succeeding Income -Qualified Residents while taking fair account of the investment of
labor and capital by Owner.
Notwithstanding the foregoing, HLT's option to acquire the Unit shall not apply if HLT's
approves of a transfer of the Unit to an Income -Qualified Resident pursuant to the
provisions of Section 10.2, above, and Owner transfers the unit to the approved purchaser.
b) Exercise of Purchase Option. If HLT elects to purchase the Unit,
HLT shall exercise the Purchase Option by notifying Owner, in writing, of such election
(the "Notice of Exercise of Option") within forty-five (45) days following HLT's receipt
of the Intent -to -Sell Notice. Upon providing a Notice of Exercise of Option, HLT may
either proceed to exercise the Purchase Option directly by purchasing the Unit or may
assign the Purchase Option to an Income -Qualified Resident.
C) Completion of Purchase. The purchase (by HLT or HLT's
assignee) must be completed within sixty (60) days, unless the parties agree in writing to
extend the time, following HLT's delivery of its Notice of Exercise of Option, or Owner
may proceed to sell the Unit in accordance with the provisions of Section 10.6, below.
The time permitted for the completion of the purchase by HLT or HLT's assignee may be
extended by mutual agreement of HLT and Owner. Title to the Unit shall be delivered by
the Owner to HLT by grant deed, free and clear of any mortgage or other liens, unless
approved in writing by HLT.
10.6 SALE/CONVEYANCE BY OWNER FOLLOWING EXPIRATION OF
HLT'S PURCHASE OPTION: If the Purchase Option has expired or if HLT (or HLT's
assignee) has failed to consummate the purchase within the sale completion period
identified in Section 10.5 (c), above, Owner may sell the Unit and assign the Declaration
to an Income -Qualified Resident for a price that does not exceed the Purchase Option
Price. If, one (1) year after the expiration of the Purchase Option or the expiration of the
sale completion period (whichever is applicable), the Unit still have not been sold, Owner
may sell the Unit, for not more than the Purchase Option Price, to any party regardless of
whether that party is an Income Qualified Resident.
10.7 HLT'S POWER OF ATTORNEY TO CONDUCT SALE: In the event
that HLT does not timely exercise the Purchase Option and complete the purchase of the
Unit in accordance with the provisions of Section 10.5, above, and Owner (a) is not then
residing in the Unit and (b) continues to hold the Unit out for sale but is unable to locate a
buyer and execute a binding purchase and sale agreement within one (1) year of the
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giving of the Intent to Sell Notice, Owner does hereby appoint HLT its attorney in fact to
seek a buyer, negotiate a reasonable price that furthers the goals set forth in this
Declaration, sell the property, and distribute proceeds of sale, minus HLT's costs of sale
and reletting and any other sums owed HLT by Owner.
10.8 PURCHASE OPTION PRICE: The Purchase Option Price will be equal
to the sales price originally paid by Owner for the Unit, SUBJECT TO:
a) increase or decrease in an amount equal to the percentage change
in the median household income for the Primary Metropolitan Statistical Area (or, if not
within such Area, for the County) for a family of equivalent size to the selling family, as
determined from time to time by the Department of Housing and Urban Development
(HUD) or any successor thereto. Such change shall be measured by comparing the
median household income on the date of the sale of the Unit to Owner to the median
household income on the date the determination is made.
b) decrease, where applicable, in an amount necessary to repair any
violations of applicable building, plumbing, electric, fire or housing codes or any other
provisions of the applicable, as well as any other repairs needed to put the Unit into a
"sellable condition". Items necessary to put a Unit into sellable condition shall be
determined by HLT, and may include cleaning, painting and making needed structural,
mechanical, electrical, plumbing and fixed appliance repairs and other deferred
maintenance repairs. In connection with this Section 10.8(c), within fourteen (14) days
request by HLT, Owner shall provide HLT with a home inspection report prepared by a
licensed home inspector.
10.9 Cost of Transfer. The Owner shall pay HLT an administrative transaction
fee equal to three percent (3%) of the Purchase Option Price to compensate HLT for
HLT's administrative activities performed in connection with Owner's sale of the Unit.
This fee will be in addition to any real estate broker fee incurred in connection with the
sale of the Unit. The Owner may not wish to contract with a real estate broker to sell the
Unit until the Owner has received a notice from HLT that HLT does not intend to
exercise or assign its Purchase Option, as the services of a broker may not be required if
HLT or and assignee of HLT purchases the Unit pursuant to this Article X.
ARTICLE XI: ASSIGNMENT AND SUBDECLARATION
Except as otherwise provided in Article VIII regarding Permitted Mortgages and Article X
regarding transfers, Owner will not assign, sublease, sell or otherwise voluntarily convey
any of Owner's interest in the Unit or rights under this Declaration without the prior written
consent of HLT. Owner agrees that HLT will have sole and absolute discretion to withhold
such consent in order to further the mutual purposes and goals set forth herein. If
permission is granted, any assignment or sublease will be subject to the following
conditions:
a) any such assignment or sublease will be subject to all of the terms
and provisions of this Declaration;
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b) in the case of a sublease, the rent or fee charged the sublessee will
not be more than that Monthly Fee amount charged Owner by HLT, plus an amount
approved by HLT to cover costs to Owner for the Unit; and
C) in the case of an assignment, the total consideration for such
assignment and the related sale or transfer of the Unit will not exceed the Purchase
Option Price as calculated in accordance with Article X hereof.
ARTICLE XII: DEFAULT
12.1 EVENTS OF DEFAULT: It will be an Event of Default:
a) if Owner fails to pay the Monthly Fee or other charges for which
provision is made herein within thirty (30) days after HLT has sent to Owner notice of
such default and such default is not cured by Owner within said grace period.
Notwithstanding the preceding sentence, if Owner makes a good faith partial payment of
at least two-thirds (2/3) of the amount owed during such initial 30 day grace period, then
such period will be extended one additional 30 -day period;
b) if Owner fails to perform or observe any other material term or
condition in this Declaration, and such failure is not cured by Owner within sixty (60)
days after notice thereof from HLT to Owner; however, in the case where the Owner has
commenced to cure such default within such sixty (60) day period and is continuing such
cure with all due diligence but cannot by the exercise of due diligence cure such default
within such period, such period will be extended for such additional period as may be
reasonably required under the circumstances to complete such cure;
C) if Owner will be judicially declared bankrupt or insolvent
according to law, or if any assignment will be made of the property of Owner for the
benefit of creditors, or if a receiver, trustee in involuntary bankruptcy or other similar
officer will be appointed to take charge of all or any substantial part of Owner's property
by a court of competent jurisdiction, or if a petition will be filed for the reorganization of
Owner under any provisions of the Bankruptcy Act now or hereafter enacted, of if Owner
shall file a petition for such reorganization, or for arrangements under any provision of
the Bankruptcy Act now or hereafter enacted and providing a plan for a debtor to settle,
satisfy or extend the time for payment of debts;
d) if Owner shall sell or transfer, or attempt to sell or transfer, the
Unit in violation of the terms of this Declaration; or
e) if a notice of default is issued under the Deed of Trust, a Permitted
Mortgage or other financing secured against the Unit;
f) if a lien is recorded against the Unit, other than the lien of a
Permitted Mortgage pursuant to Article VIII (and subject to the cure period set forth in
Section 7.4, if applicable); or
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g) if the Owner makes a misrepresentation to obtain the benefits of
purchase of the Unit or in connection with its obligation under this Declaration.
12.2 REMEDIES: If any of the acts of default specified above occurs and the
default is not cured within the relevant cure period, HLT shall have the following
remedies:
a) Cure On Behalf Of Owner. HLT may, but is not obligated to,
perforin such duty or obligation on Owner's behalf. The cost of any such performance by
HLT shall be due and payable by Owner to HLT upon invoice for such cost. If any check
given to HLT by Owner is not honored by the bank upon which it was drawn, HLT may
require that all future payments by Owner be made by cashier's or bank check,
b) Sue for Specific Perforinance. HLT may, but is not obligated,
bring an action for specific performance.
C) Recovery of Damages. HLT may recover from Owner, (i) any and
all unpaid fees and charges that may be owed under this Declaration, (ii) damages which
may be to or sustained by HLT, and (iii) all reasonable costs, fees and expenses
(including, without limitation, reasonable attorneys' fees) incurred by HLT in pursuit of
its remedies under this Declaration.
d) Purchase Unit. The Owner hereby grants to HLT the option to
purchase the Unit for the Purchase Option Price upon an Event of Default. Such option
to purchase on default shall be referred to in this Declaration as the "Purchase Option
Upon Default". The Purchase Option Upon Default is given in consideration of the
economic benefits received by the Owner resulting from Owner's purchase of the Unit at
a below market price made possible by HLT. The Purchase Option Upon Default may be
exercised upon an Event of Default. HLT shall have thirty (30) days after an Event of
Default is declared to notify the Owner of its decision to exercise its option to purchase.
Not later than ninety (90) days after the notice is given by HLT to the Owner of HLT's
intent to exercise its option, HLT shall purchase the Unit for the Purchase Option Price
set forth in Section 10.8 and title to the Unit shall be delivered by the Owner to HLT by
grant deed, free and clear of any mortgage or other liens, unless approved in writing by
HLT. In the event of exercise of the Purchase Option Upon Default and purchase of the
Unit by HLT or its assignee, the Owner shall permit a final walk-through of the Unit by
HLT or its assignee in the final three (3) days prior to close of escrow on the transfer.
HLT may assign its rights to purchase the Unit under this Section 12.2 to an Income -
Qualified Resident, or another public or nonprofit agency. In the event HLT or its
assignee exercises the Purchase Option Upon Default, the Owner shall pay HLT a
transaction fee equal to three percent (3%) of the Purchase Option Price if HLT or an
assignee of HLT purchases the Unit.
e) Excess Proceeds. If the Owner makes a sale, lease, sublease or
other transfer in violation of this Declaration, the Owner shall pay the Excess Proceeds to
HLT. For purposes of this Declaration, "Excess Proceeds" shall mean (i) the amount by
which the gross sales proceeds received by the Owner from the new purchaser exceed the
Purchase Option Price applicable at the time of transfer or (i) in the case of a lease or
sublease, the amount by which the rent or fee received Owner exceeds the amount
permitted under Article XI(b). The Excess Proceeds amount shall be a debt of the Owner
to HLT, secured by the Deed of Trust. HLT shall utilize the Excess Sales Proceeds for
HLT Program activities.
12.3 Deed of Trust. HLT may declare a default under the Deed of Trust and
exercise its remedies under the Deed of Trust.
12.4 Other Remedies: HLT may pursue any other remedies in law or in equity
now or hereafter available to HLT under the laws of California.
12.5 Remedies Cumulative: No right, power, or remedy given to HLT by the
terms of this Declaration 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 HLT by the terms of any such instrument, or
by any statute or otherwise against Owner and any other person. Neither the failure nor
any delay on the part of HLT to exercise any such rights and remedies shall operate as a
waiver thereof, nor shall any single or partial exercise by HLT of any such right or
remedy preclude any other or further exercise of such right or remedy, or any other right
or remedy.
12.6 HLT'S DEFAULT: HLT will in no event be in default in the performance
of any of HLT's obligations hereunder unless and until HLT shall have failed to perform
such obligations within sixty (60) days, or such additional time as is reasonably required
to correct any default, after notice by Owner to HLT properly specifying wherein HLT
has failed to perform any such obligation.
ARTICLE XIII: GENERAL PROVISIONS
13.1 NOTICES: Whenever this Declaration requires either party to give notice
to the other, the notice will be given in writing and delivered in person or mailed, by
certified or registered mail, return receipt requested, or by a nationally recognized
overnight delivery service such as Federal Express, to the party at the address set forth
below, or such other address designated by like written notice:
If to HLT: Housing Land Trust of Sonoma County
P.O. Box 5431
Petaluma, CA 94955-5431
Attn: Dev Goetschius, Executive Director
With copies to: Heather Gould
Goldfarb & Lipman LLP
1300 Clay Street, 11 th Floor
Oakland, CA 94612
If to Owner:
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With copies to:
All notices, demands and requests will be effective two business days after being deposited
in the United States Mail, or one business day after being deposited with a nationally
recognized overnight delivery service, or, in the case of personal delivery, upon actual
receipt or refusal to accept delivery.
13.2 NO BROKERAGE: Owner warrants and represents that it has not dealt
with any broker. In the event any claim is made against HLT relative to dealings with
brokers, Owner will defend the claim against HLT with counsel of HLT's selection and
save harmless and indemnify HLT on account of loss, cost or damage which may arise by
reason of any such claim.
13.3 SEVERABILITY AND DURATION OF: If any clause, Article, Section,
paragraph, or subparagraph of this Declaration shall be deemed unenforceable or invalid
by a court of competent jurisdiction, such material will be read out of this Declaration
and will not affect the validity of any other Section, clause, Article, paragraph, or
subparagraph, or give rise to any cause of action of either party to this Declaration against
the other, and the remainder of this Declaration will be valid and enforced to the fullest
extent permitted by law. It is the intention of the parties that their respective options to
purchase and all other rights and options hereunder will continue in full force and effect
for the duration of the term of this Declaration and any renewal thereof, and such options
and other rights will be considered to be coupled with an interest. In the event any such
option or right will be construed to be subject to any rule of law limiting the duration
thereof, the time period for the exercising of such option or right will be construed to vest
or terminate within 90 years after its creation.
13.4 WAIVER: The waiver by HLT of, or the failure of HLT to take action
with respect to, any breach of any term, covenant, condition, provision, restriction, or
reservation herein contained will not be deemed to be a waiver of such term, covenant,
condition, provision, restriction, or reservation or subsequent breach of same, or of any
other term, covenant, condition, provision, restriction, or reservation herein contained.
HLT may grant waivers in the terms of this Declaration, but such waivers must be in
writing and signed by HLT before being effective.
13.5 HLT'S RIGHT TO PROSECUTE OR DEFEND: HLT shall have the
right, but will be under no duty or obligation, to prosecute or defend, in its own or
Owner's name, any actions or proceedings appropriate or necessary to the protection of
Owner's occupancy, use, and possession of or interest in the Unit. Whenever requested
by HLT, Owner will give HLT all reasonable aid in any such action or proceeding, in
effecting settlement, securing evidence, obtaining witnesses, or prosecuting or defending
such action or proceeding.
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13.6 CONSTRUCTION: Whenever in this Declaration a pronoun is used it
will be construed to represent either the singular or the plural, masculine or feminine, as
the case will demand.
13.7 CAPTIONS AND TABLE OF CONTENTS: The captions and table of
contents appearing in this Declaration are for convenience only, and are not a part of this
Declaration and do not in any way limit or amplify the terms, covenants, conditions,
provisions, restrictions, or reservations of this Declaration.
13.8 PARTIES BOUND: This Declaration sets forth the entire agreement
between the parties with respect to the Unit; it is binding upon and inures to the benefit of
the parties and, in accordance with the provisions of this Declaration, their respective
successors in interest. This Declaration may be altered or amended only by written
notice executed by the parties or their legal representatives or, in accordance with the
provisions of this Declaration, their successors in interest.
13.9 GOVERNING LAW: This Declaration will be interpreted in accordance
with and governed by the laws of California. The language in all parts of this Declaration
will be, in all cases, construed according to its fair meaning and not strictly for or against
HLT or Owner.
13.10 RECORDING: The parties agree that HLT may require, as an alternative
to the recordation of this Declaration, the parties to execute a memorandum of this
Declaration in recordable form and complying with applicable law and reasonably
satisfactory to HLT's attorneys. In no event will such document set forth the charges
payable by Owner under this Declaration; and any such document will expressly state
that it is executed pursuant to the provisions contained in this Declaration, and is not
intended to vary the terms and conditions of this Declaration.
13.11 CONDITION OF UNIT; WAIVER AND REDECLARATION: HLT did
not design, engineer, construct or otherwise install the Unit (including any related
common area or amenities). Accordingly, and as a material part of the consideration due
HLT under this Declaration, Owner hereby releases HLT, its officers, directors,
shareholders, managers, employees and representatives (collectively "Indemnitees") and
waives, on Owner's behalf and on behalf of Owner's successors, assigns and
representatives, all claims, demands and causes of action against the Indemnitees for any
loss, liability, damages, costs and expenses (including attorneys' fees) arising from or
related to any loss, damage, injury or claim, whether incurred or made by Owner, any
other Indemnitee or any third person(s) with respect to the Unit and the buildings and
Unit located thereon.
OWNER ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS LEGAL
COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA
CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
"A GENERAL REDECLARATION DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE REDECLARATION, WHICH IF
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KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
OWNER, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY
WAIVES ANY RIGHT IT MAY HAVE THEREUNDER, AS WELL AS UNDER
ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR
EFFECT. OWNER HEREBY SPECIFICALLY ACKNOWLEDGES THAT
OWNER HAS CAREFULLY REVIEWED THIS SECTION, AND DISCUSSED
ITS IMPORTANCE WITH LEGAL COUNSEL, IS FULLY AWARE OF ITS
CONSEQUENCES, AND THAT THE PROVISIONS OF THIS SECTION ARE
A MATERIAL PART OF THIS DECLARATION.
"OWNER"
The foregoing waivers and releases shall include and apply to, without limitation,
(i) the design, construction methods, materials, locations and other matters for which HLT
has given or will give its approval, recommendation or other direction (ii) irrespective of
HLT's approval, recommendation or other direction and (iii) any damage, liability, fine,
penalty, punitive damage, cost or expense arising from or out of any claim, action, suit or
proceeding for personal injury (including sickness, disease or death), tangible or intangible
property damage, compensation for lost wages, business income, profits or other economic
loss, damage to the natural resources or the environment, nuisance, pollution,
contamination, leak, spill, release or other adverse effect upon the environment.
13.12 COVENANTS RUNNING WITH THE LAND: Owner hereby subjects
the Unit to the covenants and restrictions set forth in this Declaration. The covenants in
this Declaration, are made, in part, to benefit land owned by HLT pursuant to its HLT
Program, which includes but is not limited to the land located at . Owner
hereby declares its express intent that the covenants and restrictions set forth herein shall
be deemed covenants running with the land in perpetuity and shall pass to and be binding
upon all parties having any interest in the Unit throughout the term of this Declaration.
Each and every contract, deed, lease or other instrument covering, conveying or
otherwise transferring the Unit or any interest therein, as the case may be, shall
conclusively be held to have been executed, delivered and accepted subject to this
Declaration regardless of whether the other party or parties to such contract have actual
knowledge of this Declaration. The Owner and HLT hereby declare their understanding
and intent that: (i) the covenants and restrictions contained in this Declaration shall be
construed as covenants running with the land pursuant to California Civil Code Section
1468 and not as conditions which might result in forfeiture of title by Owner; (ii) the
burden of the covenants and restrictions set forth in this Declaration touch and concern
the Unit in that the Owner's legal interest in the Unit may be rendered less valuable
thereby; and (iii) the benefit of the covenants and restrictions set forth in this Declaration
touch and concern the land by enhancing and increasing the enjoyment and use of the
Unit by Eligible Purchasers, the intended beneficiaries of such covenants and restrictions.
All covenants and restrictions contained herein without regard to technical
classification or designation shall be binding upon Owner for the benefit of HLT and
Eligible Purchasers and such covenants and restrictions shall run in favor of such parties
53
for the entire period during which such covenants and restrictions shall be in force and
effect, without regard to whether HLT is an owner of any land or interest therein to which
such covenants and restrictions relate.
13.13 Assignment. HLT may assign its rights and interest in the Declaration and
the Deed of Trust to the City of Petaluma or another nonprofit public benefit corporation
approved by the City without the consent of the Owner.
13.14 Third Partv Beneficiary; Oher Citv Rights. The City is a third party
beneficiary to this Declaration. The City shall have the right to inspect the Unit as
permitted by the Affordable Housing Agreement between the City and HLT, recorded
against title to the Unit.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Declaration on the day
and year first above written.
"HLT"
HOUSING LAND TRUST OF SONOMA COUNTY,
a California nonprofit public benefit corporation
Dev Goetschius
Executive Director
"OWNER"
C
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Recordinq requested by and when
recorded mail to:
CITY OF PETALUMA
11 English Street, Petaluma, CA 95448
Attn: City Clerk
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE &&6103, 27383
Space above this line for Recorder's use.
PERFORMANCE DEED OF TRUST
THERE ARE RESTRICTIONS ON THE SALE OF THE PROPERTY
ENCUMBERED BY THIS DEED OF TRUST. EXCEPT FOR A TRANSFER TO
THE CITY OF PETALUMA (THE "CITY") OR CITY'S ASSIGNEE FOLLOWING
CITY'S EXERCISE OF ITS OPTION TO PURCHASE, THE HOMES
CONSTRUCTED ON THIS PROPERTY MAY ONLY BE SOLD TO "ELIGIBLE
HOUSEHOLDS" AT A PRICE NOT TO EXCEED AN "AFFORDABLE
PURCHASE PRICE."
This PERFORMANCE DEED OF TRUST ("Deed of Trust") is made as of
2019 ("Effective Date") by The Housing Land Trust of Sonoma
County, a nonprofit public benefit corporation, corporation no. C2276361
("Trustor"), in favor of Title Company ("Trustee"), for the benefit of
the City of Petaluma, a California municipal corporation and charter city("City" or
"Beneficiary") as Beneficiary.
RECITALS
A. Trustor is the owner of the real property identified as Lot 9_in the
Brody Ranch Subdivision (the "Development") located in Petaluma, California,
and more particularly described in the attached Exhibit A (the "Property).
B. Trustor shall cause the Property to be leased to Eligible Buyers
pursuant to a ninety-nine (99) -year renewable Ground Lease, and the terms of
that certain Affordable Housing Agreement and Declaration of Restrictive
Covenants with Option to Purchase (the "Affordable Housing Agreement")
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dated as of , 2019 and executed by the Parties and recorded
substantially concurrently herewith in the Official Records of Sonoma County (the
"Official Records"). Capitalized terms not defined herein shall have the
meaning ascribed to them in the Affordable Housing Agreement.
C. Pursuant to the Affordable Housing Agreement, Trustor is
obligated, among other requirements, to enter into a ground lease with the owner
of the Home constructed on the Property to ensure that the Home is purchased
only by Eligible Buyers at a price not in excess of the Affordable Purchase Price.
D. The Affordable Housing Agreement also provides (among other
provisions) that Beneficiary has an option to purchase the Property or part
thereof if Trustor defaults under the Affordable Housing Agreement.
NOW, THEREFORE, to secure the full and timely performance by Trustor
of the Secured Obligations (defined below), it is agreed as follows:
Grant in Trust. Trustor, in consideration of the promises herein recited
and the trust herein created, hereby irrevocably and unconditionally grants,
transfers, conveys and assigns to Trustee, in trust for the benefit of Beneficiary,
with power of sale, all estate, right title and interest which Trustor now has or
may later acquire in and to that certain real property located in the City of
Petaluma, County of Sonoma, State of California, described in the attached
Exhibit A (the "Parcel") together with all of the following:
(i) all improvements now or hereafter located or constructed on the
Property, and all replacements and additions thereto ("Improvements");
(ii) all easements, rights of way, appurtenances and other rights used
in connection with the Property or as a means of access thereto
("Appurtenances");
(iii) all fixtures now or hereafter attached to or used in and about the
Property or the improvements located thereon or hereafter located or constructed
on the Property, and all renewals or replacements thereof or articles in
substitution therefor, whether or not the same are, or shall be attached to the
improvements in any manner ("Fixtures and Equipment"); and
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(iv) all leases, subleases, licenses and other agreements relating to
use or occupancy of the Property ("Leases") and all rents or other payments
which may now or hereafter accrue or otherwise become payable to or for the
benefit of Trustor ("Rents") (whether or not such Leases and Rents are
permitted by the Affordable Housing Agreement).
All of the above -referenced Parcel, Improvements, Appurtenance, Fixtures and
Equipment, Leases and Rents are herein referred to collectively as the
"Property".
2. Obliqations Secured. This Deed of Trust is given for the purpose of
securing payment and performance of the following (the "Secured
Obligations"): (i) all present and future obligations of Trustor set forth in this
Deed of Trust or in the Affordable Housing Agreement (including, without
limitation, Trustor's obligation to ensure that the Home is conveyed only to
Eligible Buyers at no more than the Affordable Purchase Price); (ii) all additional
present and future obligations of Trustor to Beneficiary under any other
agreement or instrument acknowledged by Trustor (whether existing now or in
the future) which states that it is or such obligations are, secured by this Deed of
Trust; (iii) all modifications, supplements, amendments, renewals, and extensions
of any of the foregoing, whether evidenced by new or additional documents; and
(iv) reimbursement of all amounts advanced by or on behalf of Beneficiary to
protect Beneficiary's interests under this Deed of Trust.
3. Assiqnment of Rents, Issues, and Profits. Trustor hereby irrevocably,
absolutely, presently and unconditionally assigns to Beneficiary the rents,
royalties, issues, profits, revenue, income and proceeds of the Property. This is
an absolute assignment and not an assignment for security only. Beneficiary
hereby confers upon Trustor a license to collect and retain such rents, royalties,
issues, profits, revenue, income and proceeds as they become due and payable
prior to any Event of Default hereunder. Upon the occurrence of any such Event
of Default, Beneficiary may terminate such license without notice to or demand
upon Trustor and without regard to the adequacy of any security for the
indebtedness hereby secured, and may either in person, by agent, or by a
receiver to be appointed by a court, enter upon and take possession of the
Property or any part thereof, and sue for or otherwise collect such rents, issues,
and profits, including those past due and unpaid, and apply the same, less costs
and expenses of operation and collection, including reasonable attorneys' fees,
to any indebtedness secured hereby, and in such order as Beneficiary may
determine. Beneficiary's right to the rents, royalties, issues, profits, revenue,
income and proceeds of the Property does not depend upon whether or not
Beneficiary takes possession of the Property. The entering upon and taking
possession of the Property, the collection of such rents, issues, and profits, and
the application thereof as aforesaid, shall not cure or waive any default or notice
of default hereunder or invalidate any act done pursuant to such notice. If an
Event of Default occurs while Beneficiary is in possession of all or part of the
Property and/or is collecting and applying Rents as permitted under this Deed of
Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to
exercise and invoke every right and remedy afforded any of them under this
Deed of Trust and at law or in equity, including the right to exercise the power of
sale granted hereunder. Regardless of whether or not Beneficiary, in person or
by agent, takes actual possession of the Parcel and Improvements, Beneficiary
shall not be deemed to be a "mortgagee in possession," shall not be responsible
for performing any obligation of the lessor under any Lease, shall not be liable in
any manner for the Property, or the use, occupancy, enjoyment or operation of
any part of it , and unless due solely to the willful misconduct or gross negligence
of Beneficiary, shall not be responsible for any dangerous or defective condition
of the Property or any negligence in the management, repair or control of the
Property.
4. Fixture Filinq. This Deed of Trust is intended to be and constitutes a
fixture filing pursuant to the provisions of the California Uniform Commercial
Code ( the "UCC") with respect to all of the Property constituting fixtures, is being
recorded as a fixture financing statement and filing under the UCC, and covers
property, goods and equipment which are or are to become fixtures related to the
Parcel and the Improvements. Trustor covenants and agrees that this Deed of
Trust is to be filed in the real estate records of Sonoma County and shall also
operate from the date of such filing as a fixture filing in accordance with Section
9502 and other applicable provisions of the UCC. This Deed of Trust shall also
be effective as a financing statement covering minerals or the like (including oil
and gas) and accounts subject to the UCC, as amended. Trustor shall be
deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured
party" for all purposes under the UCC.
5. Trustor's Representations, Warranties and Covenants.
5.1 Trustor's Estate. Trustor represents and warrants that Trustor is
lawfully seized of the estate hereby conveyed and has the right to grant and
convey the Property in accordance herewith, that other than this Deed of Trust,
the Property is encumbered only by the Affordable Housing Agreement and
such other instruments as Trustor has disclosed to Beneficiary in writing. Trustor
59
agrees to warrant and defend generally the title to the Property against all claims
and demands, subject to any declarations, easements or restrictions of record as
of the date hereof.
5.2 Affordable Housing Agreement. Trustor will observe and perform
all of Trustor's covenants and agreements set forth in the Affordable Housing
Agreement.
5.3 Senior Loans. Trustor will observe and perform all of the covenants
and agreements of any loan documents evidencing or securing loans secured by
the Property and any other instruments that are senior in priority to this Deed of
Trust.
5.4 Charqes; Liens. Trustor will pay prior to delinquency, all taxes,
assessments and other charges, fines and impositions affecting the Property
directly to the payee thereof. Upon request by the City, Trustor will promptly
furnish to the City all notices of such amounts due. Trustor shall pay when due
each obligation secured by or reducible to a lien, charge or encumbrance which
now does or later may encumber or appear to encumber all or part of the
Property or any interest in it, whether or not such lien, charge or encumbrance is
or would be senior or subordinate to this Deed of Trust. Trustor shall not be
required to pay any tax, levy, charge or assessment so long as its validity is
being actively contested in good faith and by appropriate actions and/or
proceedings which will operate to prevent the enforcement of the lien or forfeiture
of the Property or any part thereof.
5.5 Hazard Insurance.
Trustor will keep the Property insured by 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). If the
Property is located in a flood plain, Trustor shall also obtain flood insurance. In
no event shall the amount of insurance be less than the amount necessary to
prevent Trustor from becoming a co-insurer under the terms of the policy.
The insurance carrier providing this insurance shall be licensed to do
business in the State of California and be chosen by Trustor subject to approval
by the City.
All insurance policies and renewals thereof will be in a form acceptable to
the City, and will include a standard mortgagee clause with standard lender's
endorsement in favor of City as its interests may appear and in a form acceptable
to the City. The City shall have the right to hold, or cause its designated agent to
hold, the policies and renewals thereof, and Trustor shall promptly furnish to the
City, or its designated agent, the original insurance policies or certificates of
insurance, all renewal notices and all receipts of paid premiums. In the event of
loss, Trustor will give prompt notice to the insurance carrier and the City or its
designated agent. The City, or its designated agent, may make proof of loss if
not made promptly by Trustor. The City shall receive thirty (30) days advance
notice of cancellation of any insurance policies required under this section.
Unless otherwise permitted by the City in writing, insurance proceeds,
subject to the rights of any senior lienholder, will be applied to restoration or
repair of the Property damaged. If permitted by City, and subject to the rights of
any senior lienholder, the insurance proceeds shall be used to repay any
amounts due under the Affordable Housing Agreement, with the excess, if any,
paid to Trustor. If the Property is abandoned by Trustor, or if Trustor fails to
respond to the City, or its designated agent, within thirty (30) days from the date
notice is mailed by either of them to Trustor that the insurance carrier offers to
settle a claim for insurance benefits, the City, or its designated agent, is
authorized to collect and apply the insurance proceeds at the City's option either
to restoration or repair of the Property or to pay amounts due under the
Affordable Housing Agreement.
Notwithstanding anything to the contrary set forth herein, during such time
that Trustor is not the owner in fee of the Improvements, Trustor may satisfy the
requirements of this Section by ensuring that Beneficiary is named as additional
insured/loss payee as Beneficiary's interests may appear under the policies of
insurance Trustor requires the fee owner(s) of such Improvements to maintain.
If the Property is acquired by the City, all right, title and interest of Trustor
in and to any insurance policy and in and to the proceeds thereof resulting from
damage to the Property prior to the sale or acquisition will pass to the City to the
extent of the sums secured by this Deed of Trust immediately prior to such sale
or acquisition, subject to the rights of any senior lienholder.
During the course of any construction on the Property, Trustor shall hire
only licensed contractors who maintain the following forms of insurance:
Liability Insurance. Comprehensive general liability insurance against
liability for bodily injury to or death of any person or property damage arising out
of an occurrence on or about the Property. The limits of such insurance shall be
not less than One Million Dollars ($1,000,000) combined single limit for bodily
injury and property damage.
61
Workers' Compensation Insurance. Workers' compensation insurance
covering all persons employed in connection with any work on the Property.
5.6 Preservation and Maintenance of Property. Trustor will keep the
Property in good repair and in a neat, clean, and orderly condition and will not
commit waste or permit impairment or deterioration of the Property. If there
arises a condition in contravention of this Section, and if the Trustor has not
cured such condition within thirty (30) days after receiving a City notice of such a
condition, then in addition to any other rights available to the City, the City shall
have the right (but not the obligation) to perform all acts necessary to cure such
condition, and to establish or enforce a lien or other encumbrance against the
Property to recover its cost of curing.
5.7 Protection of the City's Property Interest. If Trustor fails to perform
the covenants and agreements contained in this Deed of Trust or if any action or
proceeding is commenced which materially affects the City's interest in the
Property, including, but not limited to, default under any senior lienholder
document, eminent domain, insolvency, code enforcement, or arrangements or
proceedings involving a bankrupt or decedent, then the City, at the City's option,
without releasing Trustor from any obligation hereunder, may make such
appearances, disburse such sums and take such action as it determines
necessary to protect the City's interest, including but not limited to, disbursement
of reasonable attorneys' fees and entry upon the Property to make repairs. Any
amounts disbursed by the City pursuant to this paragraph, with interest thereon,
will become an indebtedness of Trustor secured by this Deed of Trust. Unless
Trustor and City agree to other terms of payment, such amount will be payable
upon notice from the City to Trustor requesting payment thereof, and will bear
interest from the date of disbursement at the lesser of (i) ten percent (10%); or (ii)
the highest rate permissible under applicable law. Nothing contained in this
paragraph will require the City to incur any expense or take any action
hereunder.
5.8 Inspection. The City may make or cause to be made reasonable
entries upon and inspections of the Property; provided that the City will give
Trustor reasonable notice of inspection.
5.9 Hazardous Substances. Trustor shall not cause or permit the
presence, use, disposal, storage, or release of any Hazardous Substances in,
on, under, about, or from the Property. Trustor shall not do, nor allow anyone
else to do, anything affecting the Property that is in violation of any
Environmental Law. The preceding two sentences shall not apply to the
presence, use, or storage on the Property of small quantities of Hazardous
Substances that are generally recognized to be appropriate to normal residential
M
uses and to maintenance of the Property when used and disposed of in
accordance with Environmental Law.
"Hazardous Substances" means any substance defined as toxic or as a
hazardous substance or hazardous waste, or regulated under any Environmental
Law, and the following substances: gasoline, kerosene, other flammable or toxic
petroleum products, toxic pesticides and herbicides, volatile solvents, materials
containing asbestos or formaldehyde, and radioactive materials.
"Environmental Law" means all federal, state or local statutes,
ordinances, regulations, orders, decrees and judgments that relate to health,
safety or environmental protection including without limitation the regulation of
the use, disposal, manufacture, or release of Hazardous Substances.
Trustor shall promptly give City written notice of any investigation, claim,
demand, lawsuit or other action by any governmental or regulatory agency or
private party involving the Property and any Hazardous Substance or
Environmental Law of which Trustor has actual knowledge. If Trustor learns, or
is notified by any governmental or regulatory authority, that any removal or other
remediation of any Hazardous Substance affecting the Property is necessary,
Trustor shall promptly take all necessary remedial actions in accordance with
Environmental Law.
6. Nonliability for Negligence, Loss, or Damage; No Joint Venture. Trustor
acknowledges, understands and agrees that City does not undertake or assume
any responsibility for or duty to Trustor to select, review, inspect, supervise, pass
judgment on, or inform Trustor of the quality, adequacy or suitability of the
Property or any other matter. The City owes no duty of care to protect Trustor
against negligent, faulty, inadequate or defective building or construction or any
condition of the Property, and Trustor agrees that neither Trustor, nor Trustor'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 Trustor will hold City harmless from any
liability, loss or damage for these things. Nothing contained herein or in the
Affordable Housing Agreement shall be deemed to create or construed to create
a partnership, joint venture or any relationship other than that of a borrower and
lender.
7. Indemnity. Trustor agrees to defend, indemnify, and hold the City of
Petaluma and its elected and appointed officials, officers, employees, and agents
("Indemnitees") harmless from and against all losses, damages, liabilities, claims,
actions, judgments, costs, and reasonable attorneys' fees that the Indemnitees
63
may incur as a direct or indirect consequence of Trustor's failure to perform any
obligations as and when required by the Affordable Housing Agreement and this
Deed of Trust.
8. Acceleration; Remedies. Upon Trustor's breach of any covenant or
agreement of Trustor in the Affordable Housing Agreement or this Deed of Trust,
including, but not limited to, the covenants to pay, when due, any sums secured
by this Deed of Trust, the City, prior to the exercise of its remedies hereunder,
will mail by express delivery with delivery receipt, notice to Trustor specifying: (1)
the breach; (2) the action required to cure such breach; (3) a date, not less than
thirty (30) days from the date the notice is received by Trustor as shown on the
return receipt, by which such breach is to be cured; and (4) if the breach is
curable, that failure to cure such breach on or before the date specified in the
notice may result in City's exercise of remedies and the sale of the Property. The
notice will also inform Trustor of Trustor's right to reinstate and the right to bring a
court action to assert the nonexistence of default or any other defense of Trustor
to the exercise of such remedies. If the breach is not cured on or before the date
specified in the notice, the City, at the City's option, may:
(a) declare all of the sums secured by this Deed of Trust to be
immediately due and payable without further demand and may invoke the power
of sale and any other remedies permitted by California law;
(b) either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regard to the
adequacy of its security, enter upon the Property and take possession thereof (or
any part thereof) and of any of the Property, in its own name or in the name of
Trustee, and do any acts which it deems necessary or desirable to preserve the
value or marketability of the Property, or part thereof or interest therein, increase
the income therefrom or protect the security thereof. The entering upon and
taking possession of the Property shall not cure or waive any breach hereunder
or invalidate any act done in response to such breach and, notwithstanding the
continuance in possession of the Property, the City shall be entitled to exercise
every right provided for in this Deed of Trust, or by law upon occurrence of any
uncured breach, including the right to exercise the power of sale;
(c) commence an action to foreclose this Deed of Trust as a mortgage,
appoint a receiver, or specifically enforce any of the covenants hereof;
(d) deliver to Trustee a written declaration of default and demand for sale,
pursuant to the provisions for notice of sale found at California Civil Code
Sections 2924 et seq., as amended from time to time; or
(e) exercise all other rights and remedies provided herein, in the
instruments by which the Trustor acquires title to any Property, or in any other
document or agreement now or hereafter evidencing, creating or securing all or
any portion of the obligations secured hereby, or provided by law.
The City shall be entitled to collect all reasonable costs and expenses
incurred in pursuing the remedies provided in this paragraph, including, but not
limited to, reasonable attorneys' fees.
9. Trustor's Right to Reinstate. Notwithstanding the City's acceleration of the
sums secured by this Deed of Trust or City's pursuit of other remedies
hereunder, Trustor will have the right to have any proceedings begun by the City
to enforce this Deed of Trust discontinued at any time prior to five (5) days before
sale of the Property pursuant to the power of sale contained in this Deed of Trust
or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a)
Trustor pays City all sums which would be then due under this Deed of Trust if
there were no acceleration under this Deed of Trust or the Affordable Housing
Agreement; (b) Trustor cures all breaches of any other covenants or agreements
of Trustor contained in the Affordable Housing Agreement or this Deed of Trust;
(c) Trustor pays all reasonable expenses incurred by City and Trustee in
enforcing the covenants and agreements of Trustor contained in the Affordable
Housing Agreement or this Deed of Trust, and in enforcing the City's and
Trustee's remedies, including, but not limited to, reasonable attorney's fees; and
(d) Trustor takes such action as City may reasonably require to assure that the
lien of this Deed of Trust, City's interest in the Property and Trustor's obligation to
pay the sums and perform the obligations secured by this Deed of Trust shall
continue unimpaired. Upon such payment and cure by Trustor, this Deed of
Trust and the obligations secured hereby will remain in full force and effect as if
no acceleration had occurred.
10. Reconveyance. Upon the expiration or termination of the Affordable
Housing Agreement if the Trustor is not in violation of any provisions of this
Deed of Trust or the Affordable Housing Agreement, the City will request Trustee
to reconvey the Property and will surrender this Deed of Trust and the Affordable
Housing Agreement to Trustee. Trustee will reconvey the Property without
warranty and without charge to the person or persons legally entitled thereto.
Such person or persons will pay all costs of recordation, if any.
11. Substitute Trustee. The City, at the City's option, may from time to time
remove Trustee and appoint a successor trustee to any Trustee appointed
hereunder. The successor trustee will succeed to all the title, power and duties
conferred upon the Trustee herein and by applicable law.
.c
12. Subordination. City agrees that if required in order to assist Eligible
Buyers to secure purchase money financing for the acquisition of the Home, the
City will enter into a subordination agreement with a purchase money lender to
subordinate this Deed of Trust under such terms as the City and the purchase
money lender shall negotiate provided that City is granted reasonable notice and
cure rights under the first mortgage. The City further agrees that if City succeeds
to the interest of Trustor under any ground lease applicable to any one or more
home constructed on the Property pursuant to the exercise of City's remedies
under the Affordable Housing Agreement or this Deed of Trust, the City agrees
that it shall recognize the Lessee under such ground lease and shall comply with
the requirements of Fannie Mae Form 2100 (3/06) and Fannie Mae
Announcement 06-03 or similar successor policy, as such documents may be
modified or amended.
13. Request for Notice. City requests that copies of the notice of default and
notice of sale be sent to City at the address set forth in Section 15.5.
14. Miscellaneous.
14.1 Forbearance by the City Not a Waiver. Any forbearance by the
City in exercising any right or remedy will not be a waiver of the exercise of any
such right or remedy. The procurement of insurance or the payment of taxes or
other liens or charges by the City will not be a waiver of the City's right to require
satisfaction of any obligations secured by this Deed of Trust.
14.2 Remedies Cumulative. All remedies provided in this Deed of Trust
are distinct and cumulative to any other right or remedy under this Deed of Trust
or any other document, or afforded by law or equity, and may be exercised
concurrently, independently or successively.
14.3 Successors and Assigns Bound. The covenants and agreements
herein contained shall bind, and the rights hereunder shall inure to, the
respective successors and assigns of the City and Trustor subject to the
provisions of this Deed of Trust.
14.4 Joint and Several Liability. If this Deed of Trust is executed by
more than one person as Trustor, the obligations of each shall be joint and
several.
14.5 Notices. Except for any notice required under applicable law to be
given in another manner, any notice to Trustor or to City pursuant to this Deed of
Trust will be given by certified mail, return receipt requested, express delivery
with delivery receipt or personal delivery with delivery receipt, addressed to the
applicable party at the address shown below, or such other address as such
party may designate by notice to the other party as provided herein. Notice shall
be effective as of the date received by City as shown on the return receipt.
City:
Trustor:
City of Petaluma
11 English Street
Petaluma, CA 94952
Attn: City Clerk
Housing Land Trust of Sonoma County
P.O. Box 5431
Petaluma, CA 94955-5431
Attn: Executive Director
Trustee:
Old Republic Title
151 Petaluma Boulevard, So., Suite 125
Petaluma, CA
Attn: Julie James
14.6 Governing Law. This Deed of Trust shall be governed by the laws
of the State of California.
14.7 Severability. In the event that any provision or clause of this Deed
of Trust or the Affordable Housing Agreement conflicts with applicable law, such
conflict will not affect other provisions of this Deed of Trust or the Affordable
Housing Agreement which can be given effect without the conflicting provision,
and to this end the provisions of the Deed of Trust and the Affordable Housing
Agreement are declared to be severable.
14.8 Captions. The captions and headings in this Deed of Trust are for
convenience only and are not to be used to interpret or define the provisions
hereof.
14.9 Nondiscrimination. Trustor 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 Trustor or any person claiming under or through Trustor
establish or permit any such practice or practices of discrimination or segregation
M,
with reference to the use, occupancy, or transfer of the Property. The foregoing
covenant shall run with the land.
[SIGNATURE ON FOLLOWING PAGE: SIGNATURE MUST BE
NOTARIZED.1
m,
RECORDING REQUESTED BY:
Old Republic Title Company
Escrow No.: 0612016380
APN, 137-510-009
When Recorded Mail Document and Tax Statements to:
City of Petaluma
11 English Street
Petaluma, CA 94952
Grant Deed
5FA0 AXVP 7V5 L1WrS FOR R5WR0&ZSY5E
Exempt from fee per GC27388.1(a)(2); document is subject to the imposition of documentary transfer
tax
The undersigned grantor(s) declare(s):
Documentary Transfer Tax is $�
(X) computed on full value of property conveyed, or
() computed on full value less of liens and encumbrances remaining at time of sale.
() Unincorporated area: (X) City of Petaluma $-
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
Petaluma 199, L.P., a Delaware limited partnership
hereby GRANT(S) to
City of Petaluma, a California municipal corporation
that property in City of Petaluma, Sonoma County, State of California, described as:
See "Exhibit An attached hereto and made a part hereof.
Subject to the Declaration of Covenants, Conditions and Restrictions for Brody Ranch, a Planned Development (as may
be amended or restated, the "Declaration"), recorded on November 16, 2018, as Docuemnt No. 2018-079068 In the
Official Records of Sonoma County, California ("Official Records") and that certain Declaration of Annexation Phase 5
recorded on February 2.8, 2019, as Document No. 2019-0145714SUEJECTTO:
1. Nondelinquent general and speclal real property taxes and public and private assessments,
2. The "Master Declaration for Title 7 Maintenance Recommendations & Dispute Resolution" recorded on January 29,
2019, as Document No. 2019-007542, of Official Records ("Notice of Election Proceedures"), and the restrictions,
rights, benefits and burdens contained in the Notice of Election, each and all of which (a) are covenants running with
the land, established in accordance with Section 1468 of the California Civil Code, for the benefit of and binding upon
Grantor and Grantee and each successive owner of all or any portion of the land affected by the Notice of Election, and
(b) are expressly incorporated in this Deed by reference as though set out In full in this Deed;
3.All other covenants, conditions, restrictions, easements, reservations, rights, rights-of-way and other matters of
record, including without limitation, the Declaration and the Map; and
4. All (I) matters discoverable by Inspection or survey of the Property, and (ii) zoning ordinances and any other laws
regulating the use of the Property
Date: September 20, 2019
Grant Deed MAIL TAX STATEMENTS AS DIRECTED ABOVE Page I of Z
Me
Signature page to Grant Deed
Petaluma 199, L.P., a Delaware limited partnership
By: Civic Petaluma, LLC, its General Partner
By: Civic Property oup, Inc a California
corporation, " Sole M ler
ML(
By:
Lori Sanson, Secretary
**SBE FOLLOWING PAGE FOR GRANTEE ACCEPTANCE**
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California
County of Contra Costa
On "TZI�/ (9 before me,�a Notary Public, personally
appeared C_ o; i ,,. &16 proved to me on the basis of satisfactory evidence to be the persoros —
whose name(p'>re subscribed to the within instrument and acknowledged to me that heshe ey executed the same
in hisjt their authorized capacity] rid that by his/ heir signature(s�`on the instrument the persopiss), or the
entity upon behalf of which the persoaK acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph Is true and
correct.
WITNESS my nd d o Tal eal.
Signature;
Name:
(Typed or td)
Grant Deed Order No.
CINDY RENATA WM57
— Notary public • Cafifornia
Contra Costa County
'Commission
_
9 2287503
My
Comm, Expires May d, 2023
(Seal)
Page 2 of 2
ME
RECORDING REQUESTED BY:
Old Republic Title Company
Escrow No.: 0812016686
APN : 137-51.0-021
When Recorded Mail Document and Tax Statements to:
Housing Land Trust of Sonoma County
PO Box 5+31
Petaluma, CA 94955
SPACE ABOVF W5 LINE 15 FOR RECORDERS 055
Grant Deed
Exempt from fee per GC27388.1(a)(2); document recorded in connection with a concurrent transfer
subject to the imposition of documentary transfer tax
The undersigned grantor(s) declare(s);
Documentary Transfer Tax is $0.00
(X) computed on full value of property conveyed, or
{ ) computed on full value less of liens and encumbrances remaining at time of sale.
O Unincorporated area: (X) City of Petaluma $0.00
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
City of Petaluma, a California Municipal Corporation
hereby GRANT(S) to
Mousing Land Trust of Sonoma County, a California nonprofit Public Benefit corporation
that property in City of Petaluma, Sonoma County, State of California, described as:
See "Exhibit A" attached hereto and made a part hereof.
Date: December 09, 2019
City of Petaluma, a California Municipal Corporation
By:
Grant Deed MAIL TAX STATEMENTS AS DIRECTED ABOVE Page 1 of 2
71
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of
County of
On before me, a Notary Public, personally
appeared I who
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.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and
correct.
WITNESS my hand and official seal.
Signature:
Name:
(Typed or Printed)
Grant Deed Order No. 0812016687
(Seal)
Page 2 of 2
0