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HomeMy WebLinkAboutORD 1066ORDINANCE NO. 1066 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING AN AGREEMENT RELATING TO THE DEVELOPMENT AND ONGOING OPERATION OF A 320-UNIT APARTMENT/ CONDOMINIUM PROJECT ON THE NORTH SIDE OF GERALD FORD DRIVE BETWEEN MONTEREY AVENUE AND PORTOLA AVENUE, 73-240 GERALD FORD DRIVE CASE NO. DA 03-02 AS IT RELATES TO CASE NOS. C/Z 03- 04, IT 31363 AND PP/CUP 03-06 WHEREAS, the City Council of the City of Palm Desert, California, did on the 8th day of April, 2004, hold a duly noticed public hearing which was continued to May 13, 2004 to consider the request by SARES REGIS GROUP, LLC, for approval of DA 03-02; and WHEREAS, the Planning Commission by its Resolution No. 2240 has recommended approval of said agreement; and WHEREAS, said application has complied with the regVirements of the "City of Palm Desert Procedure for Implementation of the California Environmental Quality Act, Resolution No. 02-06," in that the Director of Community Developmer.t nas determined that the project will not have an adverse impact on the environmEnt and a Negative Declaration of Environmental Impact is warranted based on the data provided as part of the University Village Master Plan, the General Plan Update and the EIR certified therefore; and WHEREAS, at said public hearing, said City Council heard and considered all testimony and arguments of all interested persons. NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Palm Desert, California, as follows: 1. That the above recitations are true and correct and constitute the findings of the City Council in this case. 2. That Agreement 03-02 (Exhibit A attached) is hereby approved. 3. That a Negative Declaration of Environmental Impact is hereby certified. (Exhibit B attached). 4. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in the Desert Sun, a newspaper of general circulation in the city of Palm Desert, California, and shall be in full force and effect thirty (30) days after its adoption. ORDINANCE NO. 1066 PASSED, APPROVED and ADOPTED at a regular meeting of the Palm Desert City Council, held on this 27th day of May , 2004, by the following vote, to wit: AYES: BENSON, FERGUSON, KULT, CRITES NOES: NONE ABSENT: SPIEGEL ABSTAIN: NONE ATTEST: RANELLE D. KLASSEN, C-ty Clerk City of Palm Desert, California BUFORD A. CRITES, MAfOA PRO 2 ORDINANCE NO. 1066 E X H I B I T A HOUSING AGREEMENT THIS Agreement is entered into this 27th , day of may , 2004, between Sares Regis Group (hereinafter "Property Owner") and the City of Palm Desert, (hereinafter "City"), a municipal corporation organized and existing under the laws of the state of California. RECITALS: This Agreement is predicated upon the following facts: A. Property Owner is owner of certain real property located within the City of Palm Desert, California, which property is described in Exhibit A attached hereto and made a part hereof (hereinafter "Property"). In consideration of the Property Owner entering into this Agreement, City has granted approval of general plan amendment through a general plan update) from low density residential (3-5 dwelling units per acre) to high density residential (10-22 units per acre), a change of zone from PR-5 (planned residential, five units per acre) to PR 13 (planned residential, 13 units per acre), a precise plan/conditional use permit, including a height exception to allow a 27 foot high roof element, and tentative tract map for apartment) condominium purposes to construct 320 residential apartment condominium units. B. City has approved an increase in the permitted maximum density from five dwelling units per acre to a maximum of 13 dwelling units per acre in return for providing -- dwelling units affordable to moderate income occupants. C. As a condition of said approval, City has required that a specified number of units associated with the project be set aside at an affordable housing cost to certain households. NOW, THEREFORE, the parties agree: Definitions. In this Agreement, unless the context otherwise requires: (a) "City" is the City of Palm Desert. (b) "Project" is the development to be constructed in the City pursuant to Precise Plan/Conditional Use Permit 03-06. (c) "Property Owner" means the person having a legal or equitable interest in the real property as described in paragraph 3 and includes the Property Owner's successors in interest and assigns. (d) "Real Property" is the real property referred to in paragraph 2. (e) "Useful Life of the Project" is 55 years. P6402-000 1 \77451 1 v 1.doc ORDINANCE NO. 1066 EX. A 2. Description of Real Pmperty. The real property which is the subject of this Agreement is described in Exhibit A. 3. Interest of Property Owner. Property Owner represents that he has a full legal and equitable interest in the Real Property and that all other persons holding legal or equitable interests in the Property are to be bound by the Agreement. 4. Assignment. The rights of the Property Owner under this Agreement may not be transferred or assigned by the Property Owner prior to the completion of the construction of the Project unless the written consent of the City is first obtained, which consent shall not be unreasonably withheld. The City shall have two weeks from the date of receipt of the request to respond. Upon the ,completion of the Project as evidenced by the issuance of a certificate of occupancy therefor, the written consent of the City shall no longer be required to transfer the rights of the Property Owner under this Agreement to any successor in interest in the Real Property. Upon the assignment of this Agreement by the Property Owner to a successor in interest in the Real Property, the City agrees that it will look solely to such successor in interest to thereafter perform all of the covenants, terms and conditions of this Agreement and the assigning Property Owner shall be released from liability accruing under this Agreement from and after the effective date of such assignment. Notwithstanding the foregoing, the Property Owner and its assignees shall have the right to collaterally assign this Agreement without the City's consent to Property Owner's lender in connection with the financing of this Project. 5. Binding effect of Agreement. The burdens and the benefits of the Agreement shall constitute covenants that shall run with the Real Property and shall be binding upon and inure to the benefit of the successors in interest to the Real Property. 6. Relationship of parties. It is understood that the contractual relationship between the City and Property Owner is such that the Property Owner is not an agent of the City. 7. Affordable Units. (a) City has amended the general plan and granted a change of zone increasing the permitted maximum density on the property from five units per acre to 13 units per acre. Based on these amendments, the City has approved the Precise Plan / Conditional Use Permit 03-06 for a 320-unit apartment /condominium project, including a height exception to allow a 27-foot high roof element on the Property. In exchange for increasing the permitted density from five units per acre to 13 units per acre, the Property Owner agrees to set aside 20% of total project units as units affordable to moderate income households. The exchange is required pursuant to the goals and objectives of the General Plan with respect to the provision of affordable housing. The project's affordable housing requirement shall therefore be established at 64 units. For the entire period that the Project is operated as an apartment project, at least 64 units in the Project shall be rented to and shall be affordable to moderate -income families P6402-0001\774511v1.doc -2- 032004 ORDINANCE NO. 1066 ES. A at 100, 105, 110 and 115 percent of area median income on a prorated basis per unit sizes for the Useful Life of the Project, as follows: No. of Units % of Income 7 @ up to 100% 32 @ 101 -- 105% 19@ 106-- 110% 6 @ 111 -- 115% 64 If in the event the Property Owner, after fifteen (15) days of vacancy, cannot fill an affordable unit at the required level of affordability, and it has made such vacant unit(s) available to moderate income families from the City's Housing Authority's tenant waiting list, the Property Owner will be permitted to fill such vacant affordable unit(s) with moderate income tenants at higher incomes. No more than six of the sixty-four units will be permitted to be occupied outside the permitted affordability levels at any given time without prior written consent of the City's Housing Authority administrator. (b) (b) If the Project is later converted to condominium units, at least 64 units in the Project shall be sold to and shall thereafter be affordable to moderate income families at 100, 105, 110 and 115 percent of area median income on a prorated basis per unit sizes for the longer of 45 years or remaining Useful Life of the Project. The 64 affordable units shall be further designated as follows: One (1) Bedroom Units Two (2) Bedroom Units Three (3) Bedroom Units TOTAL AFFORDABLE UNITS 19 39 6 64 (c) Maximum rental rates for such affordable units shall be set by the Palm Desert Housing Authority pursuant to state law at the time the units first become available for rent. Annual rent increases shall not exceed the increases permitted by state law. (d) Sales prices in the affordable units shall be set by the Palm Desert Redevelopment Agency pursuant to state law an amount such that the units will qualify as affordable to moderate income persons pursuant to state law. P6402-0001 \77451 1 v I doc -3- 052001 ORDINANCE NO. 1066 EX. A (e) City shall cause the Palm Desert Redevelopment Agency to provide second trust deed financing to buyers to secure 45-year affordability covenants. The amount of such financing shall be at the sole and absolute discretion of the Agency. (f) Subsequent sales of any affordable units shall be subject to resale controls substantially in the form of the deed restrictions attached hereto as Exhibit " A ", which will assure that said units may only be sold or rented to income qualified persons provided for in this paragraph 7. (g) Property Owner or its assigned management agent shall be responsible for determining the eligibility of prospective tenants in the affordable units. (h) Property Owner shall advise the City in writing prior to obtaining building permit regarding the method to be used to satisfy affordable housing requirement of the project. (i) Property Owner shall not discriminate on the basis of race, color or creed, sex, or national origin. 0) Change in Project. Property Owner hereby agrees that prior to the initial completion of the Project as evidenced by the issuance of a certificate of occupancy, no change, modification, revision or alteration may be made in the approved precise plan without review and approval by the City and those agencies and departments of the City approving the plan in the first instance. A change, modification, revision or alteration in the approved precise plan/conditional use permit prior to the initial completion of the Project is not effective until the parties amend this Agreement to incorporate it. (k) Hold Harmless. Property Owner agrees to and shall hold the City, its officers, agents, consultants, employees and representatives harmless from any liability for damage or claims for damage which may arise from the direct or indirect operations of the Property Owner or those of his contractor, subcontractor, agent, employee or other person acting on his behalf which relates to the Project. Property Owner agrees to and shall defend the City and its officers, agents, employees and representatives from third party actions for damages caused or alleged to have been caused by reason of Property Owner's activities in connection with the Project. This hold harmless agreement applies to all third party damages and claims for damages suffered, or alleged to have been suffered, by reason of the operation referred to in this paragraph, regardless of whether or not the City prepared, supplied, or approved plans or specifications or both for the Project. Property Owner further agrees to indemnify, hold harmless, pay all costs and provide a defense for City in any action challenging the validity of this Agreement. P6402-0001 •,774s 1 t v i .doc -4- 052004 ORDINANCE NO. 1066 EX. A (1) Periodic Review of Compliance with Agreement. So long as the Project is an apartment project, the Property Owner shall, at his expense, prepare an annual report and deliver such report to the City regarding compliance with the affordable housing provisions of this Agreement. The City may inspect the affordable units pursuant to applicable law regarding inspections. The City may, at the expense of the Property Owner, cause to be performed an audit of the affordable units in the Project. (m) Amendment or Cancellation of Agreement. This Agreement may be amended or canceled in whole or in part by mutual consent of the parties. (n) Enforcement. Unless amended or canceled as provided in paragraph (m), this Agreement is enforceable by any party to it notwithstanding a change in the applicable general or specific plan, zoning, subdivision, or building regulations adopted by City which alter or amend the rules, regulations or policies governing permitted uses of the land, density, design, improvement and construction standards and specifications. (o) Events of Default. Property Owner is in default under this Agreement upon the happening of one or more of the following events or conditions: (i) If a warranty, representation or statement set forth in this Agreement by Property Owner to City is false or proves to have been false in any material respect when it was made; (ii) A determination by the City that Property Owner has not complied with any term or condition of this Agreement. (iii) Property Owner's failure to maintain the Real Property in substantially the same condition as it exists on the date that City issues the Certificate of Occupancy with respect to the Project ordinary wear and tear and casualty excepted. (iv) Property Owner's failure to appear in and defend any action or proceeding purporting to affect the rights or powers of City under the terms of this Agreement, and to pay all costs and expenses, including attorneys' fees in a reasonable sum, in any such action or proceeding in which City may appear. (p) Procedure upon Default. If the City determines that the Property Owner is in default, the City shall notify the Property Owner in writing as to the nature of the default. Property Owner has 30 days upon receipt of such notification to take and complete remedial action. If Property Owner fails to take and complete remedial action within the 30-day period described above, the City may pursue all legal and equitable remedies the City may have at law or in equity, and City shall be entitled to specific performance and enforcement of each and every term, condition and covenant set forth herein. P6402-000 1 \77451 1 v I.doc -5- 052004 ORDINANCE N0. 1066 EX. A (q) Damages upon Cancellation, Termination of Agreement. In no event shall Property Owner be entitled to any damages against the City upon termination of this Agreement or exercise by City of its rights under this Agreement. (r) Attorney's Fees and Costs. If legal action by either party is brought because of breach of this Agreement or to enforce a provision of this Agreement, the prevailing party is entitled to reasonable attorneys' fees and court costs. (s) Notices. All notices required or provided for under this Agreement shall be in writing and delivered in person or sent by certified mail, postage prepared. Notice required to be given to City shall:be addressed as follows: City Manager, City of Palm Desert, 73-510 Fred Waring Drive, Palm Desert, California 92260. Notices required to be given to Property Owner shall be addressed as follows: Sares Regis Group, c/o Greg Albert, 18825 Bardeen Avenue, Irvine, California 92612. A party may change the address by giving notice in writing to the other party and therefore notices shall be addressed and transmitted to the new address. (t) (i) Rules of Construction and Miscellaneous Items. The singular includes the plural; the masculine gender includes the feminine; "shall" is mandatory, "may" is permissive. (ii) If there is more than one signer of this Agreement, on behalf of the Property Owner, obligations are joint and several. (u) Duration of Agreement. This Agreement shall remain in effect during the Useful Life of the Project. (v) ,Applicable Law. This Agreement shall be construed according to the laws of the State of California. (w) Severability. If any portion of this Agreement is for any reason held to be unenforceable, such determination shall not affect the validity of the remaining portions. (x) Authority. Each of the parties hereto covenants and agrees that it has the legal capacity to enter into this Agreement contained herein, that each Agreement is binding upon that party and that this Agreement is executed by a duly authorized official acting in his official capacity. P6402-000I \77451 1 v 1 doc -6- 052004 ORDINANCE NO. 1066 EX. A IN WITNESS WHEREOF this Agreement has been executed by the parties on the day and year first above written. Approved as to form: D ve ErAn, City Attorney Attest: CITY OF PALM DESERT, A Municipal Corporation By: /�7' 2. -,&,, i - obert A. Spiegel, SARES R IS GROUP Viry -�GS) By: P6402-0001 ' 77as I l v l .doc - 7- 05200.4 ORDINANCE NO. 1066 EX. A STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) On this day of 2004, before me, a Notary Public in and for said State, personally appeared , known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument on behalf of , and acknowledged to me that executed the same. P6402-0001 `77451 10 .doc -8- 052004 ALL-PURPOSE ACKNOWLEDGMENT State of California j SS. County of On 1 l �'7 �x� before me, personally appeared���%� SIGNF.RSi -personally known to me - OR - ,a N 2005 ELKE TOOLEY Comm. 11327744 jn N NOTARY PUBLIC CALIFORNIA =' County of Orange My Comm Ex9ltee Nay.27,2005 ❑ 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 signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. N OTA RY'S S IGN N I t Rh. OPTIONAL INFORMATION The information below is not required by law. However, it could prevent fraudulent attachment of this acknowl- ed>;mcnt to an unauthorized document. CAPACITY CLAIMED BY SIGNER (PRINCIPAL) DESCRIPTION OF ATTACHED DOCUMENT ❑ INDIVIDUAL ❑ CORPORATE OFFICER TITLE OR TYPE. OF DOC I'MENT Illl.laN- .. ❑ PARTNER(S) ❑ AT-FORNF.Y-IN+ACT NUMBER OF PAGES — — ❑ TRUSTEE(S) ❑ GUARDIAN/CONSERVATOR DAM%OF DOCUMENT ❑ OTHER: OTHER v SIGNER IS REPRESENTING: RIGHTTHUMBPRINT NAN1I Or- PERSON(S) OR I rrrY(n.,,) OF E J L — SIGNER o n 0 APA 5M) VAI.I.F.Y-SIERRA. 8W-362 3369 ORDINANCE NO. 1066 EXHIBIT "A" TO HOUSING AGREEMENT EX. A ORDINANCE NO. 1066 EXHIBIT A TO THE HOUSING AGREEMENT RECORDING REQUESTED BY -� AND WHEN RECORDED RETURN TO: Executive Director Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attention: City Clerk Exempt from recording fees pursuant to Gov. Code' 6103 UNIT REGULATORY AND--LIEN-AGREEMENT :AL THIS UNIT REGULATORY AND LIEN AGREEMENT (the "Agreement") is entered into this day of 1�20 by and between the PALM DESERT REDEVELOPMENT;_ AGENCY, . a public_: body, ;:corporate and politic (the "Agency"), and 4 a(n) (individu8illy or collectively, the "Owner"). _ RECITALS A. The"Owner is concurrently herewith acquiring that certain real property (the "Unit") located in.:, a Cit}i:of Palm Desert, County of Riverside, State of California, legally described in Exhibit "A" 6tfachedhereto and incorporated herein by reference, the address of which is set forth in Section 1(b) of this Agreement, and which the Owner shall occupy as the Owner's principal residence. B. For the purpose, among others, of effectuating the Redevelopment Plan for Project Area No. 1, as amended, (the "Project Area"), as originally adopted by Ordinance No. 275 on November 25, 1981 (incorporated herein in its entirety by this reference), the Agency has provided assistance to the development of the Desert Rose project for low and moderate income housing. C. The Owner has represented to the Agency that the Owner and the Owner's household qualifies as a Person or Family of Very Low, Low or Moderate Income. D. Concurrently herewith, the Owner is executing a promissory note in the amount, if any, set forth in Section 1(c), representing a loan by the Agency to the Owner to assist in the Owner's acquisition of the Unit. NOW, THEREFORE, the parties agree as follows: 1. Fundamental Provisions. The following shall serve as the basic terms of DESERT ROSE I IN IT REGULATORY AGREEMEN L 10'X . SAMPL E (a) Name of Owner: The name of the Owner is (b) Address of the Unit: The address of the Unit is , Palm Desert, California. (c) Amount of the Loan: The principal amount of the Loan is the sum of Dollars ($ ). The Loan is evidenced by a promissory note (the "Note") and secured by a deed of trust (the "Deed of Trust") executed by Owner concurrently with this Agreement. 2. Definitions. For purposes of this Agreement, the terms listed below shall have the meanings thereinafter specified. (a) AMI. As used herein arid throughoutthisAgreement, "AMI" means the median family income of the Riverside -fan Bernardino SMSA, as 'determined and published annually by the United States Department of Housing qnd Urban Development ("HUD"), pursuant ty to Califomia Health and Safe Code Sec�fiort 50093`and the regulations promulgated thereunder. ..,,_ The AMI shall be adjusted for f4* ify "size accordahc- with state regulations adopted pursuant to California Health ;arid Safety Ct�deecton 50052 5 for the number of persons in the family occupying the Unit (i) ; Affordable Housing Cost. For the purposes hereof, the term "Affordable Housing Cost" means'a housing cost which does not exceed 30 percent of the Gross Income of the hoUtehold,46d for the purposes hereof, the term "housing cost' shall have the"imeaning' ascribed to such term in Title 25 of the California Code of Regulations Section 6920, as such regulations may be amended from time to time, and the term "Gross Income" shall have the meaning ascribed to such term in Title 25 of the California Code of Regulations Section 6914, as such regulations may be amended from time to time. (c) Person or Family of Very Low, Low, or Moderate Income, or Very- Low Income Household, a Low -Income Household or a Moderate -Income Household means a person, family or household meeting the income qualification limits set forth in California Health and Safety Code Sections 50093, 50105, 50052.5, and 50053, and Title 25 of the California Code of Regulations Section 6910, et seq., as the case or context may require, as such statutes and regulations may be amended from time to time, and any successor statutes thereto. (d) Qualified Person means a person or family of Very Low, Low or Moderate Income. Unless the Agency or its designee, in its sole discretion determines otherwise, in the case of a studio unit, Qualified Person means a household of one person, in the case of a one -bedroom unit, Qualified Person means a household of two persons, in the case of a two - bedroom unit, Qualified Person means a household of three persons, in the case of a three - bedroom unit, Qualified Person means a household of four persons, and in the case of a four - bedroom unit, Qualified Person means a household of five persons. DESERT ROSE UNIT REGI LA rORY AGREEMEN r �0'Y.. SAMPLE (e) Escrow Costs means only those fees charged by an escrow agent or title insurance company charged solely for the cost of closing an escrow and does not include loan fees, refinancing fees, broker commissions, prepaid items, homeowners dues, transfer fees, or other fees, commissions or costs. (f) Unit means the real property described in attached Exhibit "A" and may include vacant land, single-family dwellings and multi -family dwellings. (g) Owner means both the paragraph of this Declaration, and any successor in Property. 3. Restriction on Transfer. party identified as`:"Owner" in the first interest of such Owner with respect to the (a) The Owner shall not sell, voluntarily orinvoluntarily, in whole or in part, convey, transfer, lease, sublease, assign, encumber, mortgage, or hypothecate the Unit, or enter into agreements to sell, convey, transfer, lease, sublease, assign, encumber, mortgage, refinance or hypothecate the Unit, except in compliance with the terms of this Agreement and with the prior written approval of the Agency's Executive Director or his designee. Failure to obtain the prior written approval of the Agency's-EXecutive Director or his designee will be deemed a breach of this Agreement. (b) Any violation or breach of the provisions of Section 3(a) hereof is prohibited and any such .sale or other transfer of interest enumerated in Section 3(a) above, in whole or -In. -part, shall be null, void and unenforceable, and at the Agency or its designee's option, result in the acquisition of the Unit by the Agency and/or an acceleration of the Note requiring the Owner to immediately repay the Note in full if such transfer is made prior to the expiration of the Term. (c) In the event of the death of the Owner with no qualified surviving joint tenants, the Agency or its designee will work with the heirs, probate court, or other responsible party to either exercise its option to reacquire the Unit in accordance with Section 8 hereof or identify a Qualified Person to purchase the Unit. 4. Term of Agreement. This Agreement shall become effective on the date it is recorded in the Official Records of Riverside County, California, and shall terminate 30 years after the date of recordation hereof (the "Term"). The Agency has determined that 30 years is the longest period feasible for continuing the Term of this Agreement. The Owner's repayment of the Loan shall not terminate this Agreement. 5. Covenant to Maintain Affordability. (a) The Unit is being sold to Owner and the Loan is being given by the Agency to the Owner to increase and improve the community's supply of low and moderate _ income housing available at an Affordable Housing Cost in accordance with the affordable DESERT ROSF.I INIT RLGI L\]ORYAGREEME f 10--SAMPLE housing requirements of the Community Redevelopment Law (California Health and Safety Code, Section 33000, et seq). Subject to the provisions of Section 3 hereof, the Owner shall sell, convey, assign, or transfer ownership or occupancy of the Unit only to Qualified Persons who cannot obtain comparable housing at an Affordable Housing Cost on the open market as provided in Health and Safety Code Section 33334.2(e)(8), as amended. To this end, the Owner agrees that during the Term the Unit shall, except as provided in Sections 6, 9.(c) and 11 hereof, remain available only at an Affordable Housing Cost and shall only be occupied by Qualified Persons. In addition, if, without the Agency or its designee's consent, the Owner fails to occupy the Unit as the Owner's sole principal residence for a period of 90 calendar days, cumulatively, in any calendar year, then the Owner shall be in breach of this Agreement. b Subject to the provisions of Section 12 hereof, if u on the expiration of the entire Term the Owner previously has not either (i) sold,conveyed, transferred, or assigned the Unit except to a Qualified Person, except where, 6Xoressly ipermitted by Section 6 hereof, or (ii) leased or subleased the Unit in violation of the ter' hereof,, or (iii) refinanced,- hypothecated, encumbered, or mortgaged the Unit in violation'of,& terms hereof, or (iv) sold the Unit at a price exceeding the maximum price permitted under SectiphAll. hereof, or (v) otherwise breached the terms and provisions hereof, then the Agency shallo(bive the Loan in full. 6. Permitted Transfers and.Mortgk6s. ja} Conveyances to Qualified Persons. Subject to the option rights of the Agency herein, the QWner may convey, the Unit to Qualified Persons on the condition that (i) the Owner complies with:_the requirements of Sections 8 and 9 hereof, (ii) the purchaser covenants to occupy the Unit as sued'. _arty'.sole principal residence, and (iii) the purchase price does not exceed the rriaximuni permitted resale price set forth in Section 11 hereof. Any permitted transferee, shall aquirethe Unit subject to the terms and conditions hereof or, at Agency or its designee's option; a=new;Unit Regulatory and Lien agreement and shall execute in recordable form any documents necessary to accommodate the transfer. (b) Intra-Family Conveyances. The following transfers of title shall not be breaches of this Agreement: transfer by gift, devise, or inheritance to the Owner's spouse; taking of title by surviving joint tenant that is the Owner's spouse; transfer of title to a spouse as part of a divorce or dissolution proceeding; acquisition of title in conjunction with marriage; transfers of title to an adult child when the child is approved by the Agency's Executive Director or his designee as a Qualified Person at the time of transfer. A transfer to children of the Owner who are not Qualified Persons shall give rise to the option in favor of the Agency to acquire the Unit described in Section 8 hereof; provided, however, such option to acquire shall be exercised by the Agency within 60 days after receipt by the Agency or its designee of written notice of such transfer, and the purchase price shall be the amount set forth in Section 8(e). (c) First Trust Deed - Purchase. The Owner may encumber the Unit with a first position deed of trust securing a purchase money loan on the condition that the first position trust deed complies with the terms of this Agreement. (d) Refinancing of First Trust Deed. Subject to compliance with the DESERT ROSE I'\IT REGI ILATORY AGREEMENT 10% S.WPI E provisions of Section 10 hereof, the Owner may refinance a first deed of trust encumbering the Unit provided that the Agency's Executive Director or his designee has previously reviewed and approved the terms and conditions thereof including, but not limited to, the principal amount of the proposed loan, the interest rate, the terms of repayment, the identity of the maker of the proposed loan, any documentation pertaining to the subordination or enforcement of the Agency's loan and related security documents, the costs and fees associated with the making of the proposed loan, and the Owner shall have received the written approval of the proposed loan by the Agency's Executive Director or his designee prior to the date of its closing. Any refinancing of a first deed of trust which has not been previously approved by the Agency's Executive Director or his designee as herein above described shall constitute a default under this Agreement and shall, at the option of the Agency or its designee, result in the acquisition of the unit by the. Agency and/or in an acceleration of the Note requiring the Owner to immediately repay the Note.in full. (e) Junior Trust Deeds. Subject to compliance with the provisions of Section 10 hereof, the Owner may enter into a loan secured by a deed of trust or mortgage junior and subordinate to the Deed of Trust provided that (i)the. proceeds of each roan shall be used solely to pay for repairs or the construction of improvements to the Unit,:and (ii) the Agency's Executive Director or his designee has prpviously.'reviewed and. approved the terms and conditions thereof, including, but not limited to, the principal amount of the proposed loan, the interest rate, the terms of repayment, the identity of the.maker of the proposed loan, the costs and fees associated with the making of the proposed loan; and the nature and costs of the proposed repairs or the constructioq pf improvements, to`oie..paid with the proceeds thereof, and (iii) the Owner shell have received,: the written approval of the proposed loan by Agency's Executive Director or his designee prior to the date of its closing, (iv) the proceeds of the proposed loan shall not be used toapay for'the.:construction of improvement of a luxury nature such as, in or above ground pools or spas,' :or iriterioror exterior decorative items, or other improvements where the reasonableuseful life does not exceed 5 years. The failure of the Owner to comply fully with the provisions of this Section 6(e) when entering into a loan which is secured by a deed of trust or mortgage junior, and subordinate to the Deed of Trust shall constitute a default under this Agreement and shall, at the option of the Agency or its designee, result in the acquisition of the Unit by the Agency and/or in an acceleration of the Note requiring the Owner to repay the Note in full. Notwithstanding the foregoing, the Agency agrees that the Owner may encumber the Unit with a third, junior deed of trust securing a loan from the County of Riverside's Economic Development Agency pursuant to its First Time Home Buyer Program, provided that the amount of such loan does not exceed the lesser of $20,000.00 or 20% of the Owner's purchase price of the property. DESERT ROSE I'NIT REGPI_1fORY 1C,REF..\IENT ,t)". SAMPLE 7. Subordination to First Trust Deed Encumbrances. (a) The Agency recognizes that Owner may be entering into a purchase money loan to acquire the Unit and also recognizes that immediately prior to the recordation hereof the Owner is or may be recording a deed of trust in connection with such financing that shall be superior to this Agreement and the Deed of Trust, and the Agency agrees that, in such event, such deed of trust recorded prior hereto shall be superior to this Agreement and the Deed of Trust. A default of such deed of trust will also be deemed a default of this Unit Regulatory and Lien Agreement and Deed of Trust in favor of the Agency, if any. Therefore, -,in the event of the foreclosure of such deed of trust, or the conveyance by deed in lieu of foreclosure of the Unit to a bank, savings and loan, or other institutional lender that is the beneficiary of such deed of trust, the provisions hereof shall terminate and be of no force or effect; provided;. however, if the senior lien holder acquires title to the Unit pursuant to a deed in lieu of foreclosure,'then the terms hereof shall terminate only if (i) the Agency has been given written notice of a default under the senior deed of trust and (ii) the Agency shall not have cured the default -under the senior deed of trust, or diligently pursued the curing of the defa_u_ It,.within 60 days after tits date the notice is received by the Agency or its designee. (b) The A— (b) further agrees that, in the event of a refinancing of a deed of trust that was superior to the lieo.Qf'the Deedof Trust, and which such refinancing complied in all respects to the, requirementt'-of Section_ 6(d) hereof, the Agency agrees to execute a subordination agreemennf in forrri_---in&'substance' acceptable to the Agency or its designee, subordinating this Agreerrient and tge`Deed-of Trust to any first deed of trust, in favor of any bank, savings and loan association,,or..oth6r :institutional lender which makes a loan to refinance the Loan for the purchase df-the Uhf(tind which secures the obligations under such loan, subject to the following terms. and conditions; The principal amount of the new loan does not exceed the original principal amount of the loan being refinanced, plus reasonable loan fees and costs up to a maximum of five percent (5%) of the original principal amount, unless Agency or its designee has provided written authorization otherwise. (ii) The terms and provisions of the loan secured by such deed of trust, including interest rate, term, amortization, fees, acceleration clauses, late payment charges, and prepayment charges, shall conform substantially to the provisions in the lender=s loan documents for comparable loans, unless deviations are given written approval in advance of the subordination by the Agency's Executive Director or his designee. (iii) The Owner shall deliver to the Agency or its designee true and accurate copies of the loan agreement, proposed promissory note, deed of trust, and a written statement from the Owner certifying that such documents are true and accurate copies of the loan documents which the Owner intends to execute in connection with the loan; and (iv) The Agency or its designee may condition any such subordination upon its receipt of a title policy or endorsement from a reputable title company, at the Owner's sole cost and expense, assuring that this Agreement and the Deed of Trust are not DESERT ROSE PNIT REGI'L4TORY AGREEMENT 40% SAMPLE being subordinated to any liens or encumbrances other than those imposed by the deed of trust or mortgage securing such new loan as the result of such subordination. If the Agency, at the election by the Executive Director or his designee, has advanced any -- sums to any senior lien holders such amounts shall immediately be due and payable by the Owner to the Agency, together with interest accrued thereon at the maximum legal rate permitted under California usury laws, upon the closing of any refinancing or sale. 8. Agency Option to Purchase. (a) Option. In order to maintain and insure that the 'Unit shall remain affordable to and only occupied by Qualified Persons, the Agency is hereby*granted an option, throughout the Term hereof, to purchase the Unit if the Owner desires to transfer the Unit, or to find another Qualified Person to purchase the Unit.... The option shall be exercised in writing by the Agency or its designee, if at all, within 60-days.-after the Agency's Executive. Director or his designee's receipt of the written notice (the "Notice of Proposed -Sale") of the Owner's desire to transfer the Unit (as more fully described in Section 9(a) hereof), During such 60 day period Owner may also concurrently. attempt to market.the Unit to sell•itto a Qualified Person, as provided in Section 9 hereof:, The Owner,may enter into an agreement to sell the Unit to a Qualified Person (previously approved by the Executive Director of the Agency or his designee) at a price that does not exceed the maximum price set forth in Section 11 hereof. In such event, the Agency shall not then exercise the option to purchase the Unit or find another Qualified Person to purchase the Unit. If,the Agency or its designee exercises the option to purchase the Unit, then the Agency's Executive, Director his designee shall promptly open escrow therefor and shall 1 close escrow for the pUrchas'e of:tp Unit prior to the date that is 60 days after the Agency opens escrow: Title to the Unit shall be delivered to the Agency at the close of escrow free and clear of monetary liens and :encumbrances, and closing costs shall be allocated in the fashion as is customary for buyers and sellers in Riverside County. (b) Agenc)�s Failure to Close Following Exercise of the Option to Purchase the Unit. If the Agency or its designee exercises the option to purchase the Unit but, due to the Agency's sole fault, the Agency does not close escrow within 60 days after the date the Agency's Executive Director or his designee opens escrow, then the Owner shall be entitled to sell the Unit to a person or family that is not a Qualified Person; provided, however, (i) if the Unit is sold to a person or family that is not a Qualified Person, or (ii) if the Unit is sold at a price that exceeds the maximum resale price set forth in Section 11 hereof, then the Owner shall repay the Loan (including all accrued interest thereon) to the Agency as provided in Section 9(c), below, plus an amount equal to 25% of the amount by which the net sale proceeds received by the Owner ("net sale proceeds" being the gross sale proceeds minus customary and reasonable costs of sale incurred by the Owner, including brokerage commissions, and adjusted for reasonable pro - rations) exceeds the maximum resale price set forth in Section 11 hereof. (c) Terms of Purchase. If the Agency or its designee exercises the option to purchase the Unit, the purchase price to be paid by the Agency shall be paid all in cash at the close of escrow. The Owner may require a deposit to open escrow in an amount not to exceed three percent (3%) of the purchase price. Title to the Unit shall be delivered to the Agency at the DESERT ROSE I MTREGI'LATORYAGREFMFNT;0"(,.SAMPLE close of escrow free and clear of monetary liens and encumbrances. Closing costs shall be allocated between the buyer and seller according to the customary practices in Riverside County in effect at the time the option is exercised. (d) Conditions to Close of Escrow. The escrow instructions may provide for conditions or contingencies of the type and nature customarily included in residential purchase escrows (including but not limited to inspection by the Agency and elimination of pests, and preliminary title report approvals), provided that any such conditions or contingencies (other than the status of title to the Unit at the time of conveyance and other conditions which by their nature cannot be satisfied prior to closing) must be satisfied or waived on or before tl'ie close of escrow. The proceeds of the sale shall be used to pay off all monetary liens and encumbrances upon the close of escrow. Escrow shall close within 60 days after.the opening ofescro% (e) Purchase Price. The purchase -price of the Unit to be paid by the f-f- Agency pursuant to the Agency's exercise of tha=i3p0ior!''Mall be the lesser of: ;..'- i The actual urc , a a rice paid by the -Owner for the Unit plus reasonable and customary escrow closing. and .ttCe,eosts (described in Section 2(e) hereof) actually incurred by the Owner in purchasi'such Uh itimes a fraction, the numerator of which is the AMI for the year in. which the sale takes. place, c!n a denominator of which is AMI in which the Owner purchasi t =the Unit (and sObtrecting there m the amount of the Loan, which the Agency shall assume ��mithe Owner); or r; P P ( ) the maximum resale rice determined pursuant to Section 11 a hereof, assuming thattftency, as purchaser, is of the same income level as was the Owner at the time the Owner puf ' Ased the Unit; or Iiii) the fair market value of the Unit, as determined by an appraiser approved by the.Agency or its designee. 9. Resale Price Controls and Procedures. (a) If the Owner elects at any time to sell the Unit, then the Owner shall, prior to signing a listing agreement or other authorization to sell with a real estate broker, first provide to the Agency's Executive Director or his designee the Notice of Proposed Sale setting forth the Owner's intention to sell the Unit. Such Notice of Proposed Sale shall contain information about the Owner's original purchase price of the Unit and such other information as the Agency shall require. Agency or its designee shall have sixty (60) days from the time following the receipt by the Agency or its designee of the Notice of Proposed Sale to find a new buyer for the Unit being sold, or sixty (60) days to exercise the Agency or its designee's option to purchase described in Section 8 hereof; provided, however, the Agency or its designee may shorten such time period upon a showing of hardship by the Owner. The Owner agrees to consider as purchasers those Qualified Persons identified on a list that may be maintained by the Agency's Executive Director or his designee. Nothing contained herein shall be construed as imposing on the Agency any obligation to find a purchaser of the Unit if the Owner has elected to sell the Unit. DESERT RUSE l'XIT REGI IL4TORY AGREEMENT 10'X.-SAMPLE 8 (b) If the Owner resells the Unit to a Qualified Person at a price that does not exceed the price set forth in Section 11 hereof, then the provisions hereof shall continue to encumber the Unit, and the Agency or its designee, if necessary, shall subordinate its interest in this Agreement and the Deed of Trust as provided in Section 7 hereof. Each successor in interest to Owner that is a Qualified Person shall acquire the Unit subject to the continuation of the restrictions on such property provided in this Agreement and the Deed of Trust; and if Agency purchases such property and resells the Unit, such acquisition shall not operate to merge this Agreement and the Deed of Trust into Agency's fee interest. (c) If, after expiration of the sixty (60) day period, Agency or its designee has failed to procure an acceptable and qualified buyer and the Agency or its designee has not exercised its option to purchase the Unit, then the Owner shall then be free to seek a'buyer for the Unit without any limitation on resale price or income level of the purchaser, provided, however, (i) if the purchaser is not a Qualified Person, or (ii) if, the, resale price exceeds the maximum resale price set forth in Section 11(a) hereof, then the Qwner shall repay the Loan (end. all accrued interest thereon) to the Agency, plus an amountequal to 25% of the amount by which the net sale proceeds received by the Owner exceed the maximum resale price- set forth in Section 11(a) hereof. �. (d) The escrow Instructions may provide for conditions or contingencies of the type and nature customarily included in residential purchase escrows (including but not limited to financing contingencies, inspection rights, and 'preliminary title report approvals), provided that any such conditions or. contingencies (other than the status of title to the Unit at the time of conveyance and other conditions which by their nature cannot be satisfied prior to closing) must be satisfied orwaived on,or before the close of escrow. The proceeds of the sale shall be used to _ pay off all monetary liens and encumbrances upon the close of escrow. Escrow shall close within a reasonable time after opening thereof. (e) The Owner shall notify any proposed purchaser in writing priorto such person's execution of escrow instructions, deposit receipt, purchase and sale agreement or similar agreement, whichever is earliest, that the title to the Unit will be restricted as provided in this Agreement. (f) The Owner may require a deposit to open escrow in an amount not to exceed three percent (3%) of the purchase price. Title to the Unit shall be delivered to the purchaser at the close of escrow free and clear of monetary liens and encumbrances, except as provided for in this Agreement. Closing costs shall be allocated between the buyer and seller according to the customary practices in Riverside County in effect at the time the escrow is opened. (g) For the purpose of confirming with the Agency that a proposed purchaser is a Qualified Person that will be paying a purchase price that is in compliance with the terms hereof, the Owner shall notify the Agency's Executive Director or his designee in writing of any offer from a prospective purchaser which the Owner intends to accept, disclosing the identity of such prospective purchaser and providing the Agency's Executive Director or his designee with such financial, credit, and other information on such prospective purchaser as required by the Agency, including the following: DESERT ROSE I INI T REGI'L4,TORY .AIJRIL\LENT 10 . SAMPLE (i) Name and address of the purchaser. (ii) Number of persons comprising the purchasers household and their names and ages. (iii) Proposed purchase price of the Unit, and any other consideration for the purchase of the Unit. (iv) Amount of down payment. (v) Terms of any loan that will be used by the. purchaser to finance the purchase of the Unit, including, but not limited to, principal; interest rate; term, and loan fees. (vi) Closing date. (vii) Aggregate annual income of the purchasers household. (viii) Most reeentfederal and state income tax returns of the purchaser and all other members of the O fthaserswhousehold for the precedirg two (2) calendar years, and verification of the proposed purchaserssalary.or wages from the purchasers employer or from current pay stubs showing yearto date as iivell as period payroll forthe preceding two (2) calendar years. (ix) -Copy of any, proposed purchase and sale agreement, escrow instructions, loan. application; orother agreements between the Owner and the purchaser of the Unit or relating to the sale of the Unit including closing documents or any other documentation that the Agency's Executive Director or his designee deems appropriate to implement this Agreement. (x) Awritten statement signed by the proposed purchaser that the Unit will be occupied by the purchaser and used as his or her sole residence. In lieu of providing the foregoing information, these requirements shall be deemed to have been satisfied by delivery to the Agency of a written certification of the foregoing information from the purchaser's lender who shall hold a first position trust deed encumbering the Unit, which certification shall be furnished to Agency's Executive Director or his designee at least 20 days prior to the close of escrow for the Unit. The Agency's Executive Director or his designee shall have 30 days from the date of its receipt by the Agency to review the information (unless the Agency received the certification from prospective purchasers lender, in which case the Agency's Executive Director or his designee shall have 15 days to review the information). If the Agency or its designee fails to approve the purchaser within such period of time, then the purchaser shall be deemed approved by the Agency. The Agency's Executive Director or his designee may require the purchaser to submit other written documentation reasonably requested by the Agency to verify the information set forth herein and to determine that the Affordable Housing Cost restrictions of this Agreement shall be satisfied. If the Agency's Executive Director or his designee receives all such prospective purchaser information requested by the Agency, the Agency's Executive Director or his designee DESERT RASE 1 NIT REGI ILATORY AGREE.\IE.NT 10k, SAMPI E 10 shall determine whether the prospective purchaser is a Qualified Person, and shall thereafter immediately notify the Owner in writing that the prospective sale is authorized and approved, or that the prospective purchaser does not qualify to purchase the Unit as a Qualified Purchaser. The Agency hereby designates the Executive Director of the Agency or his designee to make the evaluations, reviews and determinations set forth in this Section 9(g). If the Agency notifies the Owner that the sale is authorized and approved, the Owner shall proceed to complete the sale of the Unit within 75 days of the date of such approval from the Agency. 10. Notification Prior to Mortgage, Encumbrance or Hypothecation. If Owner desires to refinance any loan secured by a first trust deed encumbering the Unit, pursuant to Section 6(d) hereof, or to borrow funds for a new loan to be secured by a junior trust deed encumbering the Unit the proceeds of which are to be used to pay for repairs or the construction of improvements to the Unit, pursuant to Section 6(e) hereof, prior written approval of the Agency's Executive Director or his designee is required. Only loans encumbering the Unit pursuant to Section 6 will be allowed. The Owner must request such approval in writing at least 30 days prior to the recordation of a deed of trust or mortgage securing any such refinancing or loan, the Owner shall submit to the Agency's Executive Director or his designee in writing the following information: (a) Name and address of lender. (b) Terms of the loan, 'including, but not limited to, principal, interest rate, term, and loan fees. (c) Closing date of the loan. (d) Copy of any proposed escrow instructions, loan application, or other agreements between the Owner and the lender. .(e) Written documentation of compliance with the conditions for Agency approval as set forth in Section 6(d) or Section 6(e) hereof, as applicable. (f) Other written documentation reasonably requested by the Agency or its designee. The Agency's Executive Director or his designee shall have 20 working days after its receipt of all of such information to approve or disapprove the proposed refinancing or loan. 11. Restriction on Resale Price. Except as permitted by Sections 8 and 9(c) hereof, the Owner shall not resell the Unit at a price higher than the lesser of the following: (a) An Affordable Housing Cost (as defined in Section 2(b) hereof) for the prospective purchaser, assuming (i) a reasonable down payment, and (ii) a 30 year fixed rate mortgage at prevailing interest rates. (b) The sum of: (i) the selling Owner's original purchase price of the Unit times a DESERT ROSE I'tiITREGI11AT0RYAG9F-1MKNI tO'�, SAMPLE I I fraction, the numerator of which is the AMI for the year in which the sale takes place, and the denominator of which is AMI in which the Owner purchased the Unit; plus (ii) escrow costs, title insurance premiums paid, and other customary closing costs and fees as described in Section 2(e) hereof; plus (iii) if the Owner sells the Unit after a default under a mortgage or deed of trust, but prior to a trustee's sale or foreclosure sale, all expenses actually incurred by the holder of such mortgage or beneficiary under such deed of trust due to the Owner's default including, but not limited to, trustee's fees, attorney's fees, costs of sale and debt service on the debt secured by such mortgage or deed of trust will be paid from Owner's proceeds. (c) the fair market value of the Unit_, as determined by an appraiser approved by the Agency or its designee. 12. Repayment of the Loan Upon any resale of the Unit, the Loan shall be due and payable, except as follows:` If the resale ofthe Unit is to ano(�_ er, Qualified Pdrson and, at the option of the Agency's Executive Director or his': designee, :puck`: rchaser either executes an assumption agreement (and such other docA64 as the ,n Executive Director or his designee may require) evidencing th assumption ottt is:Agroe , ent, the Note and the Owner's obligations thereunder, or executed acid deliverS,ew Unit Regulatory and Lien Agreement, Note and Deed of Trust (subject onlyto such prior lieh§!as the Agency's Executive Director or his designee shall approve), then (i) all interest accrued 60m the date of the Owner's acquisition of the Unit through the closing dateIofthe ri�sale to the tew Qualified Person shall be paid at close of escrow of such resale, (ii) inter'e_�tt, hall f fien accrue from and after the closing date of the resale (with such accrued interest again to=tie subject to payment upon another resale to yet another Qualified Person), and (iii) the principal amount of the Loan shall be due only to the extent that the purchase price:.Odid by the purchaser exceeds the amount that would have been the maximum resale price to another purchaser at the same income level as was the Owner's at the time of the Owner's original acquisition of the Unit. (Thus, if the seller and the purchaser are of the same income level, then none of the principal would be due, but if the purchaser is of a higher income level, then it is possible that some of the principal may be due because the maximum resale price calculated pursuant to Section 11(a) hereof, may be higher if the purchaser is of a higher income level than was the Owner at the time of the Owner's acquisition of the Unit.) At the end of the Term hereof, if there have been no resales to any person or family other than a Qualified Person, the principal balance outstanding and any accrued interest shall be forgiven by the Agency subject to and in accordance with the provisions of Section 5(b) hereof. 13. Annual Report. The Agency shall have the option of requiring that the Owner provide, on an annual basis, such information as the Agency's Executive Director or his designee deems necessary to implement this Agreement. 14. Nondiscrimination Covenants. By the Owner's acceptance hereof, the Owner agrees, for itself, its successors and assigns, to refrain from restricting the transfer of the Unit on the basis of race, color, creed, religion, ancestry, sex, marital status, national origin or age of any DESERT ROSL I IN IT REGI ILA TORY AGREEMENT ; t-SA\IPLE 12 person. All such deeds entered into with respect to the Unit shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: "The grantee herein covenants by and for himself or herself, his or her heirs, — executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference. to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." The foregoing shall be a covenant running with the land for the benefit of, and as a burden upon the Unit, and shall remain in effect in perpetuity, Nothing contained herein shall be construed as permitting the Owner to transfer the Unit without the Agency's Executive Director or his designee's prior written consent. 15. Maintenance of the Unit/Prohibition Against Waste. The Owner shall not commit waste upon the Unit. The- Owner shall not remove or demolish the improvements on the Unit. The Owner shall, throughout the Term hereof, keep and maintain the Unit and the improvements thereon, in good condition and repait. If the Owner at any time fails to so keep and maintain tlae Unit in good condition and repair, after 30 days notice from the Agency, the Agency's Executive Director or his designee snail have a right to enter onto the Unit and perform such deferred maintenance, and the Owner shall promptly reimburse the Agency for all costs incurred — by the Agency in performing such maintenance. The Agency shall also use reasonable efforts to provide notice to :the Desert Rose Residents' Association prior to such entry. 16. Default. If either party defaults with regard to any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within thirty (30) days. after service of the notice of default, or if the default is not commenced to be cured within thirty (30) days after service of the notice of default and is not cured promptly within a reasonable period of time after commencement, the defaulting party shall be liable to the other party for damages caused by such default. 17. Notices. All notices to be delivered to the parties pursuant to the terms hereof shall be in writing and shall be delivered in person or by U.S. Mail or other delivery service to the addresses listed below. Any of the following addresses may be changed by written notice. If notice is given it shall be deemed effective upon 3 business days after deposit of same, postage prepaid, in the U.S. Mail, or the date of actual receipt as evidenced by personal acknowledgment, return receipt or other comparable means. If to Owner: At the address for the Unit set forth in Section 1(b). DESERT RUSE I NIT RE.GI YATORY AGRELME.\T tit• SAMI'LL 13 If to the Agency: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 — Attn: Executive Director 18. Covenants to Run With the Land. Except as otherwise provided in this Agreement, the covenants established in this Agreement shall be binding on the Owner and any successor in interest of the Owner to the Unit, and shall be for the benefit and in favor of the Agency, its successors and assigns, the City of Palm Desert, and Alphonso Sanchez the real party in interest under that certain Stipulation for Entry of Judgment. County Superior Court Case No. INDIO 51124, and the covenants shall run with the land in favor of the Agency and shall be a burden upon the Unit and shall be for the benefit of the parcels that comprise the Project Area owned by the City of Palm Desert, as described in Instrument No. 23610, recorded on December 22,1981 in the Official Records of Riverside County. The covenants established in this Agreement shall be incorporated by reference in all deeds .conveying all or any portion of the Unit. The Owner (and each successor in.ihterest, as the.case may, be) shall furnish a copy of this instrument to any successors in interest::'.:The Agency, shall have the fight, in the event of any breach b the Owner of any y :ctwenan'o�. agreement herein, 'to exercise all the rights and remedies, and to maintain anyidtions-a_tAa`w or suits in equity or other proper proceedings to enforce the curing of such breach a c6Vbhant or agreement. Notwithstanding the foregoing, however, the Owner and the suc60ss6rs.in;ihterest to the Owner named herein shall be liable for performance hereof only during tlidirces]3a6tive period of ownership of the Unit, provided that the "transferee* -Owner has in writing5sur>i'ied' and agreed to perform the "transferor" Owner's obligations hereunder s . 119 No Speculative fnyestment. The Owner ackowledges that the acquisition of the Unit by the'-�Owner, pursuant to this agreement is not intended as a speculative financial investment. ,20:Administration. The Agency may administer the terms hereof or may, from time to time assign its rights hereunder or designate another entity, person, licensed real estate broker or organization to administer the terms hereof. 21. Independent and Severable Provisions. If any provision of this instrument is held by a court of competent jurisdiction to be unenforceable or invalid, such holding shall not render unenforceable any other provision hereof, each provision hereof being expressly severable and independently enforceable to the fullest extent permitted by law. 22. Further Assurances and Recordations. The Owner covenants that upon request of the Agency, the Owner, or its heirs, successors or assigns, will execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such further instruments and agreements and do such further acts as may be necessary, desirable or proper to carry out more effectively the purpose of this instrument. At the expiration of the Term, the Agency agrees to provide to the Owner an instrument in recordable form that has the effect of confirming the termination of the affordable housing requirements of this instrument. Concurrent with the recordation of any deed of trust or mortgage which is senior or DESERT ROSE I NIT REGI 1ATORY AGRHMEN i iO`- SAMPLE 14 subordinate to the Deed of Trust, the Owner, at its sole cost and expense, shall cause to be recorded in the official records of the Office of the Riverside County Recorder a written request for a special notice of default in favor of the Agency. 23. Captions and Section Headings. Captions and section headings used herein are for convenience only and shall not be used in construing this instrument. 24. No Waiver. No waiver by the Agency of its rights hereunder, or of any breach by the Owner of any covenant, restriction, or condition herein contained, shall be effective unless such waiver is in writing, signed by the Agency's Executive Director or his designee and delivered to the Owner. Any waiver by the Agency of its power to terminate the Owner's estate herein or of any covenant, restriction, or condition herein contained, or the failure by:the.Agency to exercise any right or remedy with respect to any breach or breaches, shall not constitute a waiver or relinquishment for the future of any rights regarding subsequent sales, or of any such covenant or condition nor bar any right or remedy of the Agency in respect'of any subsequent breach. 25. Entire Agreement. =:This instrument constitutes the entire agreement of the parties hereto, and the provisions hereof may be modified or amended only by a written instrument signed by the party tp.be charged. 26. Attomeys' Fees. in any action brought to declare the rights granted herein or to enforce or to interpret any of the terms�of this Agreement, the prevailing party shall be entitled to an award of reasonable attorney's fees in an amount determined by the court. .. 27. Amendments.'`_Only-the Agency, its successors and assigns, and the Owner and the`$uccessors and assigns of the Owner in and to all or any part of the fee title to the Unit shall have the. right to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements, or other restrictions contained in this Agreement. 28,--Successors and Assigns. This Declaration shall be binding upon and inure to the benefit of the Agency and the Owner, and their respective successors, owners and assigns. The terms and provisions hereof shall run with the land and shall be a burden upon the land, including the Unit and each Unit, and shall be binding upon the Owner's successors in interest as purchasers of the Unit, for the benefit of the Agency. DESERT ROSE 1 [\IT REGI IATORY AGREI:CIF\ I And,. SAMPLE 15 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. - "AGENCY" PALM DESERT REDEVELOPMENT AGENCY, public body, corporate and politic "OWNER" DESER1 ROSEI'Nil REGI ILATORY AGREEME\1 ;ii" SAMPIF 16 State of California County of On personally appeared , 2004, before me, , a Notary Public, , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. On'` , 2004, before me, , a Notary Public, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/herltheir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) DESERT ROSE t SIT REGI'Lq IORY AGREEMENT ^• SA I P I I 1 EXHIBIT A LEGAL DESCRIPTION That certain real property situated in the City of Palm Desert, County of Riverside, State of California, described as follows: LOT OF TRACT MAP NO. 27546, IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 249 OF MAPS, PAGES 63 THROUGH-6$, INCLUSIVE, RECORDS OF SAID COUNTY. t DESERT ROSE I'NIT REGPLATORY AGREEMENT 10% SAMPLE I ORDINANCE NO. 1066 EXHIBIT B Pursuant to Title 14, Division 6, Article 6 (commencing with section 15070) of the California Code of Regulations. NEGATIVE DECLARATION CASE NO: DA 03-02 as it relates to Case Nos. C/Z 03-04, TT 31363 and PP/CUP 03-06 APPLICANT/PROJECT SPONSOR: PROJECT DESCRIPTION/LOCATION: Sares Regis Group c/o Greg Albert 18825 Bardeen Avenue Irvine, CA 92612 An agreement relating to the development and ongoing operation of a 320-unit apartment/condominium project on the north side of Gerald Ford Drive between Monterey Avenue and Portola Avenue, 73-240 Gerald Ford Drive. The Director of the Department of Community Development, City of Palm Desert, California, has found that the described project will not have a significant effect on the environment. A copy of the Initial Study has been attached to document the reasons in support of this finding. Mitigation measures, if any, included in the project to avoid potentially significant effects, may also be found attached. 5/27/04 PHILIP RELL D E DIRECT R OF COMMUNITY DEVELOPMENT In ORDINANCE NO. 1066 EXHIBIT B Pursuant to Title 14, Division 6, Article 6 (commencing with section 15070) of the California Code of Regulations. NEGATIVE DECLARATION CASE NO: DA 03-02 as it relates to Case Nos. C/Z 03-04, TT 31363 and PP/CUP 03-06 APPLICANT/PROJECT SPONSOR: PROJECT DESCRIPTION/LOCATION: Sares Regis Group c/o Greg Albert 18825 Bardeen Avenue Irvine, CA 92612 An agreement relating to the development and ongoing operation of a 320-unit apartment/condominium project on the north side of Gerald Ford Drive between Monterey Avenue and Portola Avenue, 73-240 Gerald Ford Drive. The Director of the Department of Community Development, City of Palm Desert, California, has found that the described project will not have a significant effect on the environment. A copy of the Initial Study has been attached to document the reasons in support of this finding. Mitigation measures, if any, included in the project to avoid potentially significant effects, may also be found attached. 11t-0 5!27!04 PHILIP DREL DATE DIRECTOR O COMMUNITY DEVELOPMENT 0 RECORDING REQUESTED BY, *Q; t„_�r.�;:'S FFICE WHEN RECORDED, MAIL TO: P I% L: L. L- 1 . C A SE, 20 P,1�1 9:59 City Clerk' `' ` �s Office City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260-2578 FOR THE BENEFIT OF THE CITY OF PALM DESERT - NO FEE - 6103 OF THE GOVT. CODE HOC N 2004-0623203 08/10/2004 08:00A Fee:NC Page 1 of 33 Recorded in Official Records County of Riverside Gary L. Orso Assessor, County Clerk & Recorder 11111111111111111111111111111111111111111111111111111111 J II •�PAGE i SIZE ! DA PCOR NOCOR SMF/I MISC _I jj�L��COPY LONG k NO.13 i M Recording Requested for """ ORDINANCE NO. 1066 HOUSING AGREEMENT CITY OF PALM DESERT AND SARES REGIS GROUP (Title of Document) ORDINANCE NO. 1066 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, APPROVING AN AGREEMENT RELATING TO THE DEVELOPMENT AND ONGOING OPERATION OF A 320-UNIT APARTMENT/ CONDOMINIUM PROJECT ON THE NORTH SIDE OF GERALD FORD DRIVE BETWEEN MONTEREY AVENUE AND PORTOLA AVENUE, 73-240 GERALD FORD DRIVE CASE NO. DA 03-02 AS IT RELATES TO CASE NOS. C/Z 03- 04, TT 31363 AND PP/CUP 03-06 WHEREAS, the City Council of the City of Palm Desert, California, did on the 8th day of April, 2004, hold a duly noticed public hearing which was continued to May 13, 2004 to consider the request by SARES REGIS GROUP, LLC, for approval of DA 03-02; and WHEREAS, the Planning Commission by its Resolution No. 2240 has recommended approval of said agreement; and WHEREAS, said application has complied with the requirements of the "City of Palm Desert Procedure for Implementation of the California Environmental Quality Act, Resolution No. 02-06," in that the Director of Community Development has determined that the project will not have an adverse impact on the environment and a Negative Declaration of Environmental Impact is warranted based on the data provided as part of the University Village Master Plan, the General Plan Update and the EIR certified therefore; and WHEREAS, at said public hearing, said City Council heard and considered all testimony and arguments of all interested persons. NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Palm Desert, California, as follows: 1. That the above recitations are true and correct and constitute the findings of the City Council in this case.= 2. That Agreement 03-02 (Exhibit A attached) is hereby approved. 3. That a Negative Declaration of Environmental Impact is hereby certified. (Exhibit B attached). 4. The City Clerk of the City of Palm Desert, California, is hereby directed to publish this ordinance in the Desert Sun, a newspaper of general circulation in the city of Palm Desert, California, and shall be in full force and effect thirty (30) days after its adoption. ORDINANCE NO. 1066 PASSED, APPROVED and ADOPTED at a regular meeting of the Palm Desert City Council, held on this 27th day of May , 2004, by the following vote, to wit: AYES: BENSON, FERGUSON, KELLY, CRITES NOES: NONE ABSENT: SPIEGEL ABSTAIN: NONE ATTEST: RACHELLE D. KLASSEN, City Clerk City of Palm Desert, Califomia BUFORD A. CRITES, MA10A PRO EACH DOCUMENT TO WHICH THIS CERTIFICATE IS ATTACHED. IS CERTIFIED TO BE A FULL, TRUE AND CORRECT COPY OF THE ORIGINAL ON FILE AND ON RECORD IN)NVWFICE. , F : :. /ice!/_���.��i���r���--� 2 ORDINANCE NO. 1066 E X H I B IT A HOUSING AGREEMENT THIS Agreement is entered into this 27th , day of May , 2004, between sares Regis Group (hereinafter "Property Owner") and the City of Palm Desert, (hereinafter "City"), a municipal corporation organized and existing under the laws of the state of California. RECITALS: This Agreement is predicated upon the following facts: A. Property Owner is owner of certain real property located within the City of Palm Desert, California, which property is described in Exhibit A attached hereto and made a part hereof (hereinafter "Property"). In consideration of the Property Owner entering into this Agreement, City has granted approval of general plan amendment through a general plan update) from low density residential (3-5 dwelling units per acre) to high density residential (10-22 units, per acre), a change of zone from PR-5 (planned residential, five units per acre) to PR 13 (planned residential, 13 units per acre), a precise plan/conditional use permit, including a height exception to allow a 27 foot high roof element, and tentative tract map for apartment) condominium purposes to construct 320 residential apartment condominium units. B. City has approved an increase in the permitted maximum density from five dwelling units per acre to a maximum of 13 dwelling units per acre in return for providing dwelling units affordable to moderate income occupants. C. As a condition of said approval, City has required that a specified number of units associated with the project be set aside at an affordable housing cost to certain households. NOW, THEREFORE, the parties agree: 1. Definitions. In this Agreement, unless the context otherwise requires: (a) "City" is the City of Palm Desert. (b) "Project" is the development to be constructed in the City pursuant to Precise Plan/Conditional Use Permit 03-06. (c) "Property Owner" means the person having a legal or equitable interest in the real property as described in paragraph 3 and includes the Property Owner's successors in interest and assigns. (d) "Real Property" is the real property referred to in paragraph 2. (e) "Useful Life of the Project" is 55 years. P6402-0001 \77451 k I . loc ORDINANCE NO. 1066 EX. A 2. Description of Real Property. The real property which is the subject of this Agreement is described in Exhibit A. 3. Interest of Property Owner. Property Owner represents that he has a full legal and equitable interest in the Real Property and that all other persons holding legal or equitable interests in the Property are to be bound by the Agreement. 4. Assignment. The rights of the Property Owner under this Agreement may not be transferred or assigned by the Property Owner prior to the completion of the construction of the Project unless the written consent of the City is first obtained, which consent shall not be unreasonably withheld. The City shall have two weeks from the date of receipt of the request to respond. Upon the completion of the Project as evidenced by the issuance of a certificate of occupancy therefor, the written consent of the City shall no longer be required to transfer the rights of the Property Owner under this Agreement to any successor in interest in the Real Property. Upon the assignment of this Agreement by the Property Owner to a successor in interest in the Real Property, the City agrees that it will look solely to such successor in interest to thereafter perform all of the covenants, terms and conditions of this Agreement and the assigning Property Owner shall be released from liability accruing under this Agreement from and after the effective date of such assignment. Notwithstanding the foregoing, the Property Owner and its assignees shall have the right to collaterally assign this Agreement without the City's consent to Property Owner's lender in connection with the financing of this Project. 5. Binding effect of Agreement. The burdens and the benefits of the Agreement shall constitute covenants that shall run with the Real Property and shall be binding upon and inure to the benefit of the successors in interest to the Real Property. 6. Relationship of parties. It is understood that the contractual relationship between the City and Property Owner is such that the Property Owner is not an agent of the City. 7. Affordable Units. (a) City has amended the general plan and granted a change of zone increasing the permitted maximum density on the property from five units per acre to 13 units per acre. Based on these amendments, the City has approved the Precise Plan / Conditional Use Permit 03-06 for a 320-unit apartment /condominium project, including a height exception to allow a 27-foot high roof element on the Property. In exchange for increasing the permitted density from five units per acre to 13 units per acre, the Property Owner agrees to set aside 20% of total project units as units affordable to moderate income households. The exchange is required pursuant to the goals and objectives of the General Plan with respect to the provision of affordable housing. The project's affordable housing requirement shall therefore be established at 64 units. For the entire period that the Project is operated as an apartment project, at least 64 units in the Project shall be rented to and shall be affordable to moderate -income families P0402-0001 \774 51 I v I .doc -2 - 052004 ORDINANCE NO. 1066 EX. A at 100, 105, 110 and 115 percent of area median income on a prorated basis per unit sizes for the Useful Life of the Project, as follows: No. of Units % of Income 7 @ up to 100% 32 @ 101 -- 105% 19 @ 106 -- 110% 6 @ 111--115% 64 If in the event the Property Owner, after fifteen (15) days of vacancy, cannot fill an affordable unit at the required level of affordability, and it has made such vacant unit(s) available to moderate income families from the City's Housing Authority's tenant waiting list, the Property Owner will be permitted to fill such vacant affordable unit(s) with moderate income tenants at higher incomes. No more than six of the sixty-four units will be permitted to be occupied outside the permitted affordability levels at any given time without prior written consent of the City's Housing Authority administrator. (b) (b) If the Project is later converted to condominium units, at least 64 units in the Project shall be sold to and shall thereafter be affordable to moderate income families at 100, 105, 110 and 115 percent of area median income on a prorated basis per unit sizes for the longer of 45 years or remaining Useful Life of the Project. The 64 affordable units shall be further designated as follows: One (1) Bedroom Units Two (2) Bedroom Units Three (3) Bedroom Units TOTAL AFFORDABLE UNITS 19 39 6 64 (c) Maximum rental rates for such affordable units shall be set by the Palm Desert Housing Authority pursuant to state law at the time the units first become available for rent. Annual rent increases shall not exceed the increases permitted by state law. (d) Sales prices in the affordable units shall be set by the Palm Desert Redevelopment Agency pursuant to state law an amount such that the units will qualify as affordable to moderate income persons pursuant to state law. P6402-0001 k 7 7-151 1 v 1.doc - 3- 052004 ORDINANCE NO. 1066 EX. A (e) City shall cause the Palm Desert Redevelopment Agency to provide second trust deed financing to buyers to secure 45-year affordability covenants. The amount of such financing shall be at the sole and absolute discretion of the Agency. (0 Subsequent sales of any affordable units shall be subject to resale controls substantially in the form of the deed restrictions attached hereto as Exhibit " A ", which will assure that said units may only be sold or rented to income qualified persons provided for in this paragraph 7. (g) Property Owner or its assigned management agent shall be responsible for determining the eligibility of prospective tenants in the affordable units. (h) Property Owner shall advise the City in writing prior to obtaining building permit regarding the method to be used to satisfy affordable housing requirement of the project. (i) Property Owner shall not discriminate on the basis of race, color or creed, sex, or national origin. 0) Change in Project. Property Owner hereby agrees that prior to the initial completion of the Project as evidenced by the issuance of a certificate of occupancy, no change, modification, revision or alteration may be made in the approved precise plan without review and approval by the City and those agencies and departments of the City approving the plan in the first instance. A change, modification, revision or alteration in the approved precise plan/conditional use permit prior to the initial completion of the Project is not effective until the parties amend this Agreement to incorporate it. (k) Hold Harmless. Property Owner agrees to and shall hold the City, its officers, agents, consultants, employees and representatives harmless from any liability for damage or claims for damage which may arise from the direct or indirect operations of the Property Owner or those of his contractor, subcontractor, agent, employee or other person acting on his behalf which relates to the Project. Property Owner agrees to and shall defend the City and its officers, agents, employees and representatives from third party actions for damages caused or alleged to have been caused by reason of Property Owner's activities in connection with the Project. This hold harmless agreement applies to all third party damages and claims for damages suffered, or alleged to have been suffered, by reason of the operation referred to in this paragraph, regardless of whether or not the City prepared, supplied, or approved plans or specifications or both for the Project. Property Owner further agrees to indemnify, hold harmless, pay all costs and provide a defense for City in any action challenging the validity of this Agreement. P6402-000 1'.77/451 1 v Ldoc -4- 052004 ORDINANCE NO. 1066 EX. A (1) Periodic Review of Compliance with Agreement. So long as the Project is an apartment project, the Property Owner shall, at his expense, prepare an annual report and deliver such report to the City regarding compliance with the affordable housing provisions of this Agreement. The City may inspect the affordable units pursuant to applicable law regarding inspections. The City may, at the expense of the Property Owner, cause to be performed an audit of the affordable units in the Project. (m) Amendment or Cancellation of Agreement. This Agreement may be amended or canceled in whole or in part by mutual consent of the parties. (n) Enforcement. Unless amended or canceled as provided in paragraph (m), this Agreement is enforceable by any party to it notwithstanding a change in the applicable general or specific plan, zoning, subdivision, or building regulations adopted by City which alter or amend the rules, regulations or policies governing permitted uses of the land, density, design, improvement and construction standards and specifications. (o) Events of Default. Property Owner is in default under this Agreement upon the happening of one or more of the following events or conditions: (i) If a warranty, representation or statement set forth in this Agreement by Property Owner to City is false or proves to have been false in any material respect when it was made; (ii) A determination by the City that Property Owner has not complied with any term or condition of this Agreement. (iii) Property Owner's failure to maintain the Real Property in substantially the same condition as it exists on the date that City issues the Certificate of Occupancy with respect to the Project ordinary wear and tear and casualty excepted. (iv) Property Owner's failure to appear in and defend any action or proceeding purporting to affect the rights or powers of City under the terms of this Agreement, and to pay all costs and expenses, including attorneys' fees in a reasonable sum, in any such action or proceeding in which City may appear. (p) Procedure upon Default. If the City determines that the Property Owner is in default, the City shall notify the Property Owner in writing as to the nature of the default. Property Owner has 30 days upon receipt of such notification to take and complete remedial action. If Property Owner fails to take and complete remedial action within the 30-day period described above, the City may pursue all legal and equitable remedies the City may have at law or in equity, and City shall be entitled to specific performance and enforcement of each and every term, condition and covenant set forth herein. P6402-0001 \77451 1 % l Am -5- 0520 0 4 ORDINANCE NO. 1066 EX. A (q) Damages upon Cancellation, Termination of Agreement. In no event shall Property Owner be entitled to any damages against the City upon termination of this Agreement or exercise by City of its rights under this Agreement. (r) Attorney's Fees and Costs. If legal action by either party is brought because of breach of this Agreement or to enforce a provision of this Agreement, the prevailing party is entitled to reasonable attorneys' fees and court costs. (s) Notices. All notices required or provided for under this Agreement shall be in writing and delivered in person or sent by certified mail, postage prepared. Notice required to be given to City shall be addressed as follows: City Manager, City of Palm Desert, 73-510 Fred Waring Drive, Palm Desert, California 92260. Notices required to be given to Property Owner shall be addressed as follows: Sares Regis Group, c/o Greg Albert, 18825 Bardeen Avenue, Irvine, California 92612. A party may change the address by giving notice in writing to the other party and therefore notices shall be addressed and transmitted to the new address. (t) (i) Rules of Construction and Miscellaneous Items. The singular includes the plural; the masculine gender includes the feminine; "shall" is mandatory, "may" is permissive. (ii) If there is more than one signer of this Agreement, on behalf of the Property Owner, obligations are joint and several. (u) Duration of Agreement. This Agreement shall remain in effect during the Useful Life of the Project. (v) Applicable Law. This Agreement shall be construed according to the laws of the State of California. (w) Severability. If any portion of this Agreement is for any reason held to be unenforceable, such determination shall not affect the validity of the remaining portions. (x) Authority. Each of the parties hereto covenants and agrees that it has the legal capacity to enter into this Agreement contained herein, that each Agreement is binding upon that party and that this Agreement is executed by a duly authorized official acting in his official capacity. P6402-0001 •774S I 1 % Ldoc -6- 052004 ORDINANCE NO. 1066 EX. A IN WITNESS WHEREOF this Agreement has been executed by the parties on the day and year first above written. Approved as to form: Dave E in, City Attorney CITY OF PALM DESERT, A Municipal Corporation Attest: SARES REGI GROUP Rachelle D. Masser., City Clerk By: /rt� '- r'oii By: ,A)W P6402-000 1 \7745 11 \ I.doc -7- 052004 ALL-PURPOSE ACKNOWLEDGMENT State of California County of = i (J-12 -C - I SS. On Wcaj 6 7- ccx before me, e IkL-7C C tDATE I iNOI� RY personally appeared C--irg �q l rl_)trl tiIG\FRiti, ET -personally known to me - OR - ELKE TOOLEY� .. N Comm.11327744 BIICLpPUCAIFONIANojppY oyfoamCaorr My Comm EK91fes Now. 27, 2005 " ,mm. � 1321144 g, PUBLIC _ CAUFOpN1A of Nro�a21,2005'j ❑ 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 signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. C L ( t & J-11- U-4 NOLARY'S SIG\:\Il'RI' OPTIONAL INFORMATION The information below is not required by law. However, it could prevent fraudulent attachment of this acknowl- edgment to an unauthorized document. CAPACITY CLAIMED BY SIGNER (PRINCIPAL) ❑ INDIVIDUAL. ❑ CORPORATE OFFICER rrrLE.s ❑ PARTNER(S) ❑ AT-I_ORNEiY-1.N-FACT ❑ TRUSTEE(S) ❑ (; ARDIAN/CONSERVATOR ❑ OTHER: . ..--. -- SIGNER IS REPRESENTING: N,AMF.OFITRSON(S) OR ENTITY(IES) DESCRIPTION OF ATTACHED DOCUMENT 'IITI.P. OR 'I'YPF OI-'DOCUMEN'1- NUM ER OF PAGES DATE OF DOCUMIiNT - OTHER d RIGHT THUMBPRINT OF E L SIGNFR o G O H APA 5/99 VAI-I_EY-SIERRA, SM-362-3369 ORDINANCE NO. 1066 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) EX. A On this day of , 2004, before me, a Notary Public in and for said State, personally appeared , known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument on behalf of , and acknowledged to me that executed the same. P6402-0001 ,77451 I % I .doc -8- W;21004 ORDINANCE NO. 1066 EXHIBIT "A" TO HOUSING AGREEMENT EX. A ORDINANCE NO. 1066 EXHIBIT A TO THE HOUSING AGREEMENT RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Executive Director Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attention: City Clerk Exempt from recording fees pursuant to Gov. Code ' 6103 UNIT REGULATORY AND LIEN AGREEMENT THIS UNIT REGULATORY AND LIEN AGREEMENT (the "Agreement") is entered into this day of , 20 , by and between the PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and a(n) (individually or collectively, the "Owner"). RECITALS A. The Owner is concurrently herewith acquiring that certain real property (the "Unit") located in the City of Palm Desert, County of Riverside, State of California, legally described in Exhibit "A" attached hereto and incorporated herein by reference, the address of which is set forth in Section 1(b) of this Agreement, and which the Owner shall occupy as the Owner's principal residence. B. For the purpose, among others, of effectuating the Redevelopment Plan for Project Area No. 1, as amended, (the "Project Area"), as originally adopted by Ordinance No. 275 on November 25, 1981 (incorporated herein in its entirety by this reference), the Agency has provided assistance to the development of the Desert Rose project for low and moderate income housing. C. The Owner has represented to the Agency that the Owner and the Owner's household qualifies as a Person or Family of Very Low, Low or Moderate Income. D. Concurrently herewith, the Owner is executing a promissory note in the amount, if any, set forth in Section 1(c), representing a loan by the Agency to the Owner to assist in the Owner's acquisition of the Unit. NOW, THEREFORE, the parties agree as follows: 1. Fundamental Provisions. The following shall serve as the basic terms of DESGR I Rosy: PNIT Frei 1--kTORY AGREEMENT 10%—SAMPLE (a) Name of Owner: The name of the Owner is (b) Address of the Unit: The address of the Unit is (c) of , Palm Desert, California. Amount of the Loan: The principal amount of the Loan is the sum Dollars ($ ). The Loan is evidenced by a promissory note (the "Note") and secured by a deed of trust (the "Deed of Trust") executed by Owner concurrently with this Agreement. 2. Definitions. For purposes of this Agreement, the terms listed below shall have the meanings thereinafter specified. (a) AMI. As used herein and throughout this Agreement, "AMI" means the median family income of the Riverside -San Bernardino SMSA, as determined and published annually by the United States Department of Housing and Urban Development ("HUD"), pursuant to California Health and Safety Code Section 50093, and the regulations promulgated thereunder. The AMI shall be adjusted for family size in accordance with state regulations adopted pursuant to California Health and Safety Code Section 50052.5 for the number of persons in the family occupying the Unit. (b) Affordable Housing Cost. For the purposes hereof, the term "Affordable Housing Cost" means a housing cost which does not exceed 30 percent of the Gross Income of the household, and for the purposes hereof, the term "housing cost' shall have the meaning ascribed to such term in Title 25 of the California Code of Regulations Section 6920, as such regulations may be amended from time to time, and the term "Gross Income" shall have the meaning ascribed to such term in Title 25 of the California Code of Regulations Section 6914, as such regulations may be amended from time to time. (c) Person or Family of Very Low, Low, or Moderate Income, or Very- Low Income Household. a Low -Income Household, or a Moderate -Income Household means a person, family or household meeting the income qualification limits set forth in California Health and Safety Code Sections 50093, 50105, 50052.5, and 50053, and Title 25 of the California Code of Regulations Section 6910, et seq., as the case or context may require, as such statutes and regulations may be amended from time to time, and any successor statutes thereto. (d) Qualified Person means a person or family of Very Low, Low or Moderate Income. Unless the Agency or its designee, in its sole discretion determines otherwise, in the case of a studio unit, Qualified Person means a household of one person, in the case of a one -bedroom unit, Qualified Person means a household of two persons, in the case of a two - bedroom unit, Qualified Person means a household of three persons, in the case of a three - bedroom unit, Qualified Person means a household of four persons, and in the case of a four - bedroom unit, Qualified Person means a household of five persons. PLSERTROSE I'\11 RE61 L\FORY \6R!T\1FNF1v0•;,.S: NW[F (e) Escrow Costs means only those fees charged by an escrow agent or title insurance company charged solely for the cost of closing an escrow and does not include loan fees, refinancing fees, broker commissions, prepaid items, homeowners dues, transfer fees, or other fees, commissions or costs. (f) Unit means the real property described in attached Exhibit "A" and may include vacant land, single-family dwellings and multi -family dwellings. (g) Owner means both the party identified as "Owner" in the first paragraph of this Declaration, and any successor in interest of such Owner with respect to the Property. 3. Restriction on Transfer. (a) The Owner shall not sell, voluntarily or involuntarily, in whole or in part, convey, transfer, lease, sublease, assign, encumber, mortgage, or hypothecate the Unit, or enter into agreements to sell, convey, transfer, lease, sublease, assign, encumber, mortgage, refinance or hypothecate the Unit, except in compliance with the terms of this Agreement and with the prior written approval of the Agency's Executive Director or his designee. Failure to obtain the prior written approval of the Agency's Executive Director or his designee will be deemed a breach of this Agreement. (b) Any violation or breach of the provisions of Section 3(a) hereof is prohibited and any such sale or other transfer of interest enumerated in Section 3(a) above, in whole or in part, shall be null, void and unenforceable, and at the Agency or its designee's option, result in the acquisition of the Unit by the Agency and/or an acceleration of the Note requiring the Owner to immediately repay the Note in full if such transfer is made prior to the expiration of the Term. (c) In the event of the death of the Owner with no qualified surviving joint tenants, the Agency or its designee will work with the heirs, probate court, or other responsible party to either exercise its option to reacquire the Unit in accordance with Section 8 hereof or identify a Qualified Person to purchase the Unit. 4. Term of Agreement. This Agreement shall become effective on the date it is recorded in the Official Records of Riverside County, California, and shall terminate 30 years after the date of recordation hereof (the "Term"). The Agency has determined that 30 years is the longest period feasible for continuing the Term of this Agreement. The Owner's repayment of the Loan shall not terminate this Agreement. 5. Covenant to Maintain Affordability. (a) The Unit is being sold to Owner and the Loan is being given by the Agency to the Owner to increase and improve the community's supply of low and moderate income housing available at an Affordable Housing Cost in accordance with the affordable PF.SFR I R01;I I NI I REOI LA FORY AGRFEMEN 1 1J1", . ti;\\tI'l F housing requirements of the Community Redevelopment Law (California Health and Safety Code, Section 33000, et seq). Subject to the provisions of Section 3 hereof, the Owner shall sell, convey, assign, or transfer ownership or occupancy of the Unit only to Qualified Persons who cannot obtain comparable housing at an Affordable Housing Cost on the open market as provided in Health and Safety Code Section 33334.2(e)(8), as amended. To this end, the Owner agrees that during the Term the Unit shall, except as provided in Sections 6, 9.(c) and 11 hereof, remain available only at an Affordable Housing Cost and shall only be occupied by Qualified Persons. In addition, if, without the Agency or its designee's consent, the Owner fails to occupy the Unit as the Owner's sole principal residence for a period of 90 calendar days, cumulatively, in any calendar year, then the Owner shall be in breach of this Agreement. (b) Subject to the provisions of Section 12 hereof, if upon the expiration of the entire Term the Owner previously has not either (i) sold, conveyed, transferred, or assigned the Unit except to a Qualified Person, except where expressly permitted by Section 6 hereof, or (ii) leased or subleased the Unit in violation of the terms hereof, or (iii) refinanced, hypothecated, encumbered, or mortgaged the Unit in violation of the terms hereof, or (iv) sold the Unit at a price exceeding the maximum price permitted under Section 11 hereof, or (v) otherwise breached the terms and provisions hereof, then the Agency shall forgive the Loan in full. 6. Permitted Transfers and Mortgages. (a) Conveyances to Qualified Persons. Subject to the option rights of the Agency herein, the Owner may convey the Unit to Qualified Persons on the condition that (i) the Owner complies with the requirements of Sections 8 and 9 hereof, (ii) the purchaser covenants to occupy the Unit as such party's sole principal residence, and (iii) the purchase price does not exceed the maximum permitted resale price set forth in Section 11 hereof. Any permitted transferee, shall acquire the Unit subject to the terms and conditions hereof or, at Agency or its designee's option, a new Unit Regulatory and Lien agreement and shall execute in recordable form any documents necessary to accommodate the transfer. (b) Intra-Family Conveyances. The following transfers of title shall not be breaches of this Agreement: transfer by gift, devise, or inheritance to the Owner's spouse; taking of title by surviving joint tenant that is the Owner's spouse; transfer of title to a spouse as part of a divorce or dissolution proceeding; acquisition of title in conjunction with marriage; transfers of title to an adult child when the child is approved by the Agency's Executive Director or his designee as a Qualified Person at the time of transfer. A transfer to children of the Owner who are not Qualified Persons shall give rise to the option in favor of the Agency to acquire the Unit described in Section 8 hereof; provided, however, such option to acquire shall be exercised by the Agency within 60 days after receipt by the Agency or its designee of written notice of such transfer, and the purchase price shall be the amount set forth in Section 8(e). (c) First Trust Deed - Purchase. The Owner may encumber the Unit with a first position deed of trust securing a purchase money loan on the condition that the first position trust deed complies with the terms of this Agreement. (d) Refinancing of First Trust Deed. Subject to compliance with the , I. .\1 ROSE i.\,.1rri:6� I_iIORYA.:REVNfFNi 10*'.. <A\iri.t: 4 provisions of Section 10 hereof, the Owner may refinance a first deed of trust encumbering the Unit provided that the Agency's Executive Director or his designee has previously reviewed and approved the terms and conditions thereof including, but not limited to, the principal amount of the proposed loan, the interest rate, the terms of repayment, the identity of the maker of the proposed loan, any documentation pertaining to the subordination or enforcement of the Agency's loan and related security documents, the costs and fees associated with the making of the proposed loan, and the Owner shall have received the written approval of the proposed loan by the Agency's Executive Director or his designee prior to the date of its closing. Any refinancing of a first deed of trust which has not been previously approved by the Agency's Executive Director or his designee as herein above described shall constitute a default under this Agreement and shall, at the option of the Agency or its designee, result in the acquisition of the unit by the Agency and/or in an acceleration of the Note requiring the Owner to immediately repay the Note in full. (e) Junior Trust Deeds. Subject to compliance with the- provisions of Section 10 hereof, the Owner may enter into a loan secured by a deed of trust or mortgage junior and subordinate to the Deed of Trust provided that (i) the proceeds of each loan shall be used solely to pay for repairs or the construction of improvements to the Unit, and (ii) the Agency's Executive Director or his designee has previously reviewed and approved the terms and conditions thereof, including, but not limited to, the principal amount of the proposed loan, the interest rate, the terms of repayment, the identity of the maker of the proposed loan, the costs and fees associated with the making of the proposed loan, and the nature and costs of the proposed repairs or the construction of improvements, to be paid with the proceeds thereof, and (iii) the Owner shall have received the written approval of the proposed loan by Agency's Executive Director or his designee prior to the date of its closing, (iv) the proceeds of the proposed loan shall not be used to pay for the construction of improvement of a luxury nature such as, in or above ground pools or spas, or interior or exterior decorative items, or other improvements where the reasonable useful life does not exceed 5 years. The failure of the Owner to comply fully with the provisions of this Section 6(e) when entering into a loan which is secured by a deed of trust or mortgage junior and subordinate to the Deed of Trust shall constitute a default under this Agreement and shall, at the option of the Agency or its designee, result in the acquisition of the Unit by the Agency and/or in an acceleration of the Note requiring the Owner to repay the Note in full. Notwithstanding the foregoing, the Agency agrees that the Owner may encumber the Unit with a third, junior deed of trust securing a loan from the County of Riverside's Economic Development Agency pursuant to its First Time Home Buyer Program, provided that the amount of such loan does not exceed the lesser of $20,000.00 or 20% of the Owner's purchase price of the property. DESERI ROSP'XITREGI'I_ ORYAGRFHMEXI ;ii";• SAM1 1. 7. Subordination to First Trust Deed Encumbrances. (a) The Agency recognizes that Owner may be entering into a purchase money loan to acquire the Unit and also recognizes that immediately prior to the recordation hereof the Owner is or may be recording a deed of trust in connection with such financing that shall be superior to this Agreement and the Deed of Trust, and the Agency agrees that, in such event, such deed of trust recorded prior hereto shall be superior to this Agreement and the Deed of Trust. A default of such deed of trust will also be deemed a default of this Unit Regulatory and Lien Agreement and Deed of Trust in favor of the Agency, if any. Therefore, in the event of the foreclosure of such deed of trust, or the conveyance by deed in lieu of foreclosure of the Unit to a bank, savings and loan, or other institutional lender that is the beneficiary of such deed of trust, the provisions hereof shall terminate and be of no force or effect; provided, however, if the senior lien holder acquires title to the Unit pursuant to a deed in lieu of foreclosure, then the terms hereof shall terminate only if (i) the Agency has been given written notice of a default under the senior deed of trust and (ii) the Agency shall not have cured the default under the senior deed of trust, or diligently pursued the curing of the default, within 60 days after the date the notice is received by the Agency or its designee. (b) The Agency further agrees that, in the event of a refinancing of a deed of trust that was superior to the lien of the Deed of Trust, and which such refinancing complied in all respects to the requirements of Section 6(d) hereof, the Agency agrees to execute a subordination agreement, in form and substance acceptable to the Agency or its designee, subordinating this Agreement and the Deed of Trust to any first deed of trust, in favor of any bank, savings and loan association, or other institutional lender which makes a loan to refinance the Loan for the purchase of the Unit and which secures the obligations under such loan, subject to the following terms and conditions: (i) The principal amount of the new loan does not exceed the original principal amount of the loan being refinanced, plus reasonable loan fees and costs up to a maximum of five percent (5%) of the original principal amount, unless Agency or its designee has provided written authorization otherwise. (ii) The terms and provisions of the loan secured by such deed of trust, including interest rate, term, amortization, fees, acceleration clauses, late payment charges, and prepayment charges, shall conform substantially to the provisions in the lender=s loan documents for comparable loans, unless deviations are given written approval in advance of the subordination by the Agency's Executive Director or his designee. (iii) The Owner shall deliver to the Agency or its designee true and accurate copies of the loan agreement, proposed promissory note, deed of trust, and a written statement from the Owner certifying that such documents are true and accurate copies of the loan documents which the Owner intends to execute in connection with the loan; and (iv) The Agency or its designee may condition any such subordination upon its receipt of a title policy or endorsement from a reputable title company, at the Owner's sole cost and expense, assuring that this Agreement and the Deed of Trust are not UGSERl being subordinated to any liens or encumbrances other than those imposed by the deed of trust or mortgage securing such new loan as the result of such subordination. If the Agency, at the election by the Executive Director or his designee, has advanced any sums to any senior lien holders such amounts shall immediately be due and payable by the Owner to the Agency, together with interest accrued thereon at the maximum legal rate permitted under California usury laws, upon the closing of any refinancing or sale. 8. Agency Option to Purchase. (a) Option. In order to maintain and insure that the Unit shall remain affordable to and only occupied by Qualified Persons, the Agency is hereby granted an option, throughout the Term hereof, to purchase the Unit if the Owner desires to transfer the Unit, or to find another Qualified Person to purchase the Unit. The option shall be exercised in writing by the Agency or its designee, if at all, within 60 days after the Agency's Executive Director or his designee's receipt of the written notice (the "Notice of Proposed Sale") of the Owner's desire to transfer the Unit (as more fully described in Section 9(a) hereof). During such 60 day period Owner may also concurrently attempt to market the Unit to sell it to a Qualified Person, as provided in Section 9 hereof. The Owner may enter into an agreement to sell the Unit to a Qualified Person (previously approved by the Executive Director of the Agency or his designee) at a price that does not exceed the maximum price set forth in Section 11 hereof. In such event, the Agency shall not then exercise the option to purchase the Unit or find another Qualified Person to purchase the Unit. If the Agency or its designee exercises the option to purchase the Unit, then the Agency's Executive Director or his designee shall promptly open escrow therefor and shall close escrow for the purchase of the Unit prior to the date that is 60 days after the Agency opens escrow. Title to the Unit shall be delivered to the Agency at the close of escrow free and clear of monetary liens and encumbrances, and closing costs shall be allocated in the fashion as is customary for buyers and sellers in Riverside County. (b) Agency's Failure to Close Following Exercise of the Option to Purchase the Unit. If the Agency or its designee exercises the option to purchase the Unit but, due to the Agency's sole fault, the Agency does not close escrow within 60 days after the date the Agency's Executive Director or his designee opens escrow, then the Owner shall be entitled to sell the Unit to a person or family that is not a Qualified Person; provided, however, (i) if the Unit is sold to a person or family that is not a Qualified Person, or (ii) if the Unit is sold at a price that exceeds the maximum resale price set forth in Section 11 hereof, then the Owner shall repay the Loan (including all accrued interest thereon) to the Agency as provided in Section 9(c), below, plus an amount equal to 25% of the amount by which the net sale proceeds received by the Owner ("net sale proceeds" being the gross sale proceeds minus customary and reasonable costs of sale incurred by the Owner, including brokerage commissions, and adjusted for reasonable pro - rations) exceeds the maximum resale price set forth in Section 11 hereof. (c) Terms of Purchase. If the Agency or its designee exercises the option to purchase the Unit, the purchase price to be paid by the Agency shall be paid all in cash at the close of escrow. The Owner may require a deposit to open escrow in an amount not to exceed three percent (3%) of the purchase price. Title to the Unit shall be delivered to the Agency at the DESERT ROS I'\11 REGI'1_\IORY:\GREE\1F.\T 0"6 ?\mrn close of escrow free and clear of monetary liens and encumbrances. Closing costs shall be allocated between the buyer and seller according to the customary practices in Riverside County in effect at the time the option is exercised. (d) Conditions to Close of Escrow. The escrow instructions may provide for conditions or contingencies of the type and nature customarily included in residential purchase escrows (including but not limited to inspection by the Agency and elimination of pests, and preliminary title report approvals), provided that any such conditions or contingencies (other than the status of title to the Unit at the time of conveyance and other conditions which by their nature cannot be satisfied prior to closing) must be satisfied or waived on or before the close of escrow. The proceeds of the sale shall be used to pay off all monetary liens and encumbrances upon the close of escrow. Escrow shall close within 60 days after the opening of escrow. (e) Purchase Price. The purchase price of the Unit to be paid by the Agency pursuant to the Agency's exercise of the option shall be the lesser of: (i) The actual purchase price paid by the Owner for the Unit plus reasonable and customary escrow closing and title costs (described in Section 2(e) hereof) actually incurred by the Owner in purchasing such Unit, times a fraction, the numerator of which is the AMI for the year in which the sale takes place, and the denominator of which is AMI in which the Owner purchased the Unit (and subtracting therefrom the amount of the Loan, which the Agency shall assume from the Owner); or (ii) the maximum resale price determined pursuant to Section 11(a) hereof, assuming that the Agency, as purchaser, is of the same income level as was the Owner at the time the Owner purchased the Unit; or (iii) the fair market value of the Unit, as determined by an appraiser approved by the Agency or its designee. 9. Resale Price Controls and Procedures. (a) If the Owner elects at any time to sell the Unit, then the Owner shall, prior to signing a listing agreement or other authorization to sell with a real estate broker, first provide to the Agency's Executive Director or his designee the Notice of Proposed Sale setting forth the Owner's intention to sell the Unit. Such Notice of Proposed Sale shall contain information about the Owner's original purchase price of the Unit and such other information as the Agency shall require. Agency or its designee shall have sixty (60) days from the time following the receipt by the Agency or its designee of the Notice of Proposed Sale to find a new buyer for the Unit being sold, or sixty (60) days to exercise the Agency or its designee's option to purchase described in Section 8 hereof; provided, however, the Agency or its designee may shorten such time period upon a showing of hardship by the Owner. The Owner agrees to consider as purchasers those Qualified Persons identified on a list that may be maintained by the Agency's Executive Director or his designee. Nothing contained herein shall be construed as imposing on the Agency any obligation to find a purchaser of the Unit if the Owner has elected to sell the Unit. hF.SFR1 ROSE I *NIT RGGI'1_ ORY \6KH:VF\ 1 10",, .:_ MPI F. 8 (b) If the Owner resells the Unit to a Qualified Person at a price that does not exceed the price set forth in Section 11 hereof, then the provisions hereof shall continue to encumber the Unit, and the Agency or its designee, if necessary, shall subordinate its interest in this Agreement and the Deed of Trust as provided in Section 7 hereof. Each successor in interest to Owner that is a Qualified Person shall acquire the Unit subject to the continuation of the restrictions on such property provided in this Agreement and the Deed of Trust; and if Agency purchases such property and resells the Unit, such acquisition shall not operate to merge this Agreement and the Deed of Trust into Agency's fee interest. (c) If, after expiration of the sixty (60) day period, Agency or its designee has failed to procure an acceptable and qualified buyer and the Agency or its designee has not exercised its option to purchase the Unit, then the Owner shall then be free to seek a buyer for the Unit without any limitation on resale price or income level of the purchaser; provided, however, (i) if the purchaser is not a Qualified Person, or (ii) if the resale price exceeds the maximum resale price set forth in Section 11(a) hereof, then the Owner shall repay the Loan (and all accrued interest thereon) to the Agency, plus an amount equal to 25% of the amount by which the net sale proceeds received by the Owner exceed the maximum resale price set forth in Section 11(a) hereof. (d) The escrow instructions may provide for conditions or contingencies of the type and nature customarily included in residential purchase escrows (including but not limited to financing contingencies, inspection rights, and preliminary title report approvals), provided that any such conditions or contingencies (other than the status of title to the Unit at the time of conveyance and other conditions which by their nature cannot be satisfied prior to closing) must be satisfied or waived on or before the close of escrow. The proceeds of the sale shall be used to pay off all monetary liens and encumbrances upon the close of escrow. Escrow shall close within a reasonable time after opening thereof. (e) The Owner shall notify any proposed purchaser in writing prior to such person's execution of escrow instructions, deposit receipt, purchase and sale agreement or similar agreement, whichever is earliest, that the title to the Unit will be restricted as provided in this Agreement. (f) The Owner may require a deposit to open escrow in an amount not to exceed three percent (3%) of the purchase price. Title to the Unit shall be delivered to the purchaser at the close of escrow free and clear of monetary liens and encumbrances, except as provided for in this Agreement. Closing costs shall be allocated between the buyer and seller according to the customary practices in Riverside County in effect at the time the escrow is opened. (g) For the purpose of confirming with the Agency that a proposed purchaser is a Qualified Person that will be paying a purchase price that is in compliance with the terms hereof, the Owner shall notify the Agency's Executive Director or his designee in writing of any offer from a prospective purchaser which the Owner intends to accept, disclosing the identity of such prospective purchaser and providing the Agency's Executive Director or his designee with such financial, credit, and other information on such prospective purchaser as required by the Agency, including the following: PESFRT ROSE I \11' REGI L\ FORY A\ ;RFE\11;\ I- t0"„ . Sq\IF1 F (i) Name and address of the purchaser. (ii) Number of persons comprising the purchaser's household and their names and ages. (iii) Proposed purchase price of the Unit, and any other consideration for the purchase of the Unit. (iv) Amount of down payment. (v) Terms of any loan that will be used by the purchaser to finance the purchase of the Unit, including, but not limited to, principal, interest rate, term, and loan fees. (vi) Closing date. (vii) Aggregate annual income of the purchaser's household. (viii) Most recent federal and state income tax returns of the purchaser and all other members of the purchaser's household for the preceding two (2) calendar years, and verification of the proposed purchaser's salary or wages from the purchaser's employer or from current pay stubs showing year to date as well as period payroll for the preceding two (2) calendar years. (ix) Copy of any proposed purchase and sale agreement, escrow instructions, loan application, or other agreements between the Owner and the purchaser of the Unit or relating to the sale of the Unit including closing documents or any other documentation that the Agency's Executive Director or his designee deems appropriate to implement this Agreement. (x) A written statement signed by the proposed purchaser that the Unit will be occupied by the purchaser and used as his or her sole residence. In lieu of providing the foregoing information, these requirements shall be deemed to have been satisfied by delivery to the Agency of a written certification of the foregoing information from the purchaser's lender who shall hold a first position trust deed encumbering the Unit, which certification shall be furnished to Agency's Executive Director or his designee at least 20 days prior to the close of escrow for the Unit. The Agency's Executive Director or his designee shall have 30 days from the date of its receipt by the Agency to review the information (unless the Agency received the certification from prospective purchaser's lender, in which case the Agency's Executive Director or his designee shall have 15 days to review the information). If the Agency or its designee fails to approve the purchaser within such period of time, then the purchaser shall be deemed approved by the Agency. The Agency's Executive Director or his designee may require the purchaser to submit other written documentation reasonably requested by the Agency to verify the information set forth herein and to determine that the Affordable Housing Cost restrictions of this Agreement shall be satisfied. If the Agency's Executive Director or his designee receives all such prospective purchaser information requested by the Agency, the Agency's Executive Director or his designee N-SERI ROSE. I'XII REGA I.:\IORYAGRGI.\IF`1 1010 shall determine whether the prospective purchaser is a Qualified Person, and shall thereafter immediately notify the Owner in writing that the prospective sale is authorized and approved, or that the prospective purchaser does not qualify to purchase the Unit as a Qualified Purchaser. The Agency hereby designates the Executive Director of the Agency or his designee to make the evaluations, reviews and determinations set forth in this Section 9(g). If the Agency notifies the Owner that the sale is authorized and approved, the Owner shall proceed to complete the sale of the Unit within 75 days of the date of such approval from the Agency. 10. Notification Prior to Mortgage Encumbrance or Hypothecation. If Owner desires to refinance any loan secured by a first trust deed encumbering the Unit, pursuant to Section 6(d) hereof, or to borrow funds for a new loan to be secured by a junior trust deed encumbering the Unit the proceeds of which are to be used to pay for repairs or the construction of improvements to the Unit, pursuant to Section 6(e) hereof, prior written approval of the Agency's Executive Director or his designee is required. Only loans encumbering the Unit pursuant to Section 6 will be allowed. The Owner must request such approval in writing at least 30 days prior to the recordation of a deed of trust or mortgage securing any such refinancing or loan, the Owner shall submit to the Agency's Executive Director or his designee in writing the following information: term, and loan fees. (a) Name and address of lender. (b) Terms of the loan, including, but not limited to, principal, interest rate, (c) Closing date of the loan. (d) Copy of any proposed escrow instructions, loan application, or other agreements between the Owner and the lender. (e) Written documentation of compliance with the conditions for Agency approval as set forth in Section 6(d) or Section 6(e) hereof, as applicable. (f) Other written documentation reasonably requested by the Agency or its designee. The Agency's Executive Director or his designee shall have 20 working days after its receipt of all of such information to approve or disapprove the proposed refinancing or loan. 11. Restriction on Resale Price. Except as permitted by Sections 8 and 9(c) hereof, the Owner shall not resell the Unit at a price higher than the lesser of the following: (a) An Affordable Housing Cost (as defined in Section 2(b) hereof) for the prospective purchaser, assuming (i) a reasonable down payment, and (ii) a 30 year fixed rate mortgage at prevailing interest rates. (b) The sum of: (i) the selling Owner's original purchase price of the Unit times a 1`I:1;I:RI ROSF.I NI R6GI'1:\T(--)RY,SGRF.F\1F\1 SAMPLE 1 I fraction, the numerator of which is the AMI for the year in which the sale takes place, and the denominator of which is AMI in which the Owner purchased the Unit; plus (ii) escrow costs, title insurance premiums paid, and other customary closing costs and fees as described in Section 2(e) hereof; plus (iii) if the Owner sells the Unit after a default under a mortgage or deed of trust, but prior to a trustee's sale or foreclosure sale, all expenses actually incurred by the holder of such mortgage or beneficiary under such deed of trust due to the Owner's default including, but not limited to, trustee's fees, attorney's fees, costs of sale and debt service on the debt secured by such mortgage or deed of trust will be paid from Owner's proceeds. (c) the fair market value of the Unit, as determined by an appraiser approved by the Agency or its designee. 12. Repayment of the Loan. Upon any resale of the Unit, the Loan shall be due and payable, except as follows: If the resale of the Unit is to another Qualified Person and, at the option of the Agency's Executive Director or his designee, such purchaser either executes an assumption agreement (and such other documents as the Agency's Executive Director or his designee may require) evidencing the assumption of this Agreement, the Note and the Owner's obligations thereunder, or executes and delivers a new Unit Regulatory and Lien Agreement, Note and Deed of Trust (subject only to such prior liens as the Agency's Executive Director or his designee shall approve), then (i) all interest accrued from the date of the Owner's acquisition of the Unit through the closing date of the resale to the new Qualified Person shall be paid at close of escrow of such resale, (ii) interest shall then accrue from and after the closing date of the resale (with such accrued interest again to be subject to payment upon another resale to yet another Qualified Person), and (iii) the principal amount of the Loan shall be due only to the extent that the purchase price paid by the purchaser exceeds the amount that would have been the maximum resale price to another purchaser at the same income level as was the Owner's at the time of the Owner's original acquisition of the Unit. (Thus, if the seller and the purchaser are of the same income level, then none of the principal would be due, but if the purchaser is of a higher income level, then it is possible that some of the principal may be due because the maximum resale price calculated pursuant to Section 11(a) hereof, may be higher if the purchaser is of a higher income level than was the Owner at the time of the Owner's acquisition of the Unit.) At the end of the Term hereof, if there have been no resales to any person or family other than a Qualified Person, the principal balance outstanding and any accrued interest shall be forgiven by the Agency subject to and in accordance with the provisions of Section 5(b) hereof. 13. Annual Report. The Agency shall have the option of requiring that the Owner provide, on an annual basis, such information as the Agency's Executive Director or his designee deems necessary to implement this Agreement. 14. Nondiscrimination Covenants. By the Owner's acceptance hereof, the Owner agrees, for itself, its successors and assigns, to refrain from restricting the transfer of the Unit on the basis of race, color, creed, religion, ancestry, sex, marital status, national origin or age of any person. All such deeds entered into with respect to the Unit shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under orthrough them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land." The foregoing shall be a covenant running with the land for the benefit of, and as a burden upon the Unit, and shall remain in effect in perpetuity. Nothing contained herein shall be construed as permitting the Owner to transfer the Unit without the Agency's Executive Director or his designee's prior written consent. 15. Maintenance of the Unit/Prohibition Against Waste. The Owner shall not commit waste upon the Unit. The Owner shall not remove or demolish the improvements on the Unit. The Owner shall, throughout the Term hereof, keep and maintain the Unit and the improvements thereon in good condition and repair. If the Owner at any time fails to so keep and maintain the Unit in good condition and repair, after 30 days notice from the Agency, the Agency's Executive Director or his designee shall have a right to enter onto the Unit and perform such deferred maintenance, and the Owner shall promptly reimburse the Agency for all costs incurred by the Agency in performing such maintenance. The Agency shall also use reasonable efforts to provide notice to the Desert Rose Residents' Association prior to such entry. 16. Default. If either party defaults with regard to any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within thirty (30) days after service of the notice of default, or if the default is not commenced to be cured within thirty (30) days after service of the notice of default and is not cured promptly within a reasonable period of time after commencement, the defaulting party shall be liable to the other party for damages caused by such default. 17. Notices. All notices to be delivered to the parties pursuant to the terms hereof shall be in writing and shall be delivered in person or by U.S. Mail or other delivery service to the addresses listed below. Any of the following addresses may be changed by written notice. If notice is given it shall be deemed effective upon 3 business days after deposit of same, postage prepaid, in the U.S. Mail, or the date of actual receipt as evidenced by personal acknowledgment, return receipt or other comparable means. If to Owner: At the address for the Unit set forth in Section 1(b). FE<F:RI ROSEI*\IT RE6,I'LAr0K)'A(;REE.\IEN rti^;,.�,\\tl'Ili ) If to the Agency: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attn: Executive Director 18. Covenants to Run With the Land. Except as otherwise provided in this Agreement, the covenants established in this Agreement shall be binding on the Owner and any successor in interest of the Owner to the Unit, and shall be for the benefit and in favor of the Agency, its successors and assigns, the City of Palm Desert, and Alphonso Sanchez the real party in interest under that certain Stipulation for Entry of Judgment, Riverside County Superior Court Case No. INDIO 51124, and the covenants shall run with the land in favor of the Agency and shall be a burden upon the Unit and shall be for the benefit of the parcels that comprise the Project Area owned by the City of Palm Desert, as described in Instrument No. 23610, recorded on December 22, 1981 in the Official Records of Riverside County. The covenants established in this Agreement shall be incorporated by reference in all deeds conveying all or any portion of the Unit. The Owner (and each successor in interest, as the case may be) shall furnish a copy of this instrument to any successors in interest. The Agency shall have the right, in the event of any breach by the Owner of any covenant or agreement herein, to exercise all the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach of covenant or agreement. Notwithstanding the foregoing, however, the Owner and the successors in interest to the Owner named herein shall be liable for performance hereof only during their respective period of ownership of the Unit, provided that the "transferee" Owner has in writing assumed and agreed to perform the "transferor" Owner's obligations hereunder. 19. No Speculative Investment. The Owner ackowledges that the acquisition of the Unit by the Owner pursuant to this agreement is not intended as a speculative financial investment. 20. Administration. The Agency may administer the terms hereof or may, from time to time assign its rights hereunder or designate another entity, person, licensed real estate brokei or organization to administer the terms hereof. 21. Independent and Severable Provisions. If any provision of this instrument is held by a court of competent jurisdiction to be unenforceable or invalid, such holding shall not render unenforceable any other provision hereof, each provision hereof being expressly severable and independently enforceable to the fullest extent permitted by law. 22. Further Assurances and Recordations. The Owner covenants that upon request of the Agency, the Owner, or its heirs, successors or assigns, will execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such further instruments and agreements and do such further acts as may be necessary, desirable or proper to carry out more effectively the purpose of this instrument. At the expiration of the Term, the Agency agrees to provide to the Owner an instrument in recordable form that has the effect of confirming the termination of the affordable housing requirements of this instrument. Concurrent with the recordation of any deed of trust or mortgage which is senior or DLSEM ROSEI N1I RFGI'I_\IkIKY \GREEMEN" 10^i„SA\iPIF. 14 subordinate to the Deed of Trust, the Owner, at its sole cost and expense, shall cause to be recorded in the official records of the Office of the Riverside County Recorder a written request for a special notice of default in favor of the Agency. 23. Captions and Section Headings. Captions and section headings used herein are for convenience only and shall not be used in construing this instrument. 24. No Waiver. No waiver by the Agency of its rights hereunder, or of any breach by the Owner of any covenant, restriction, or condition herein contained, shall be effective unless such waiver is in writing, signed by the Agency's Executive Director or his designee and delivered to the Owner. Any waiver by the Agency of its power to terminate the Owner's estate herein or of any covenant, restriction, or condition herein contained, or the failure by the Agency to exercise any right or remedy with respect to any breach or breaches, shall not constitute a waiver or relinquishment for the future of any rights regarding subsequent sales, or of any such covenant or condition nor bar any right or remedy of the Agency in respect of any subsequent breach. 25. Entire Agreement. This instrument constitutes the entire agreement of the parties hereto, and the provisions hereof may be modified or amended only by a written instrument signed by the party to be charged. 26. Attomeys' Fees. In any action brought to declare the rights granted herein or to enforce or to interpret any of the terms of this Agreement, the prevailing party shall be entitled to an award of reasonable attorney's fees in an amount determined by the court. 27. Amendments. Only the Agency, its successors and assigns, and the Owner and the successors and assigns of the Owner in and to all or any part of the fee title to the Unit shall have the right to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements, or other restrictions contained in this Agreement. 28. Successors and Assiqns. This Declaration shall be binding upon and inure to the benefit of the Agency and the Owner, and their respective successors, owners and assigns. The terms and provisions hereof shall run with the land and shall be a burden upon the land, including the Unit and each Unit, and shall be binding upon the Owner's successors in interest as purchasers of the Unit, for the benefit of the Agency. PFCGRI iROSLI Nil REGI;:\\wi.F 15 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. "AGENCY" PALM DESERT REDEVELOPMENT AGENCY, public body, corporate and politic in Attest: Secretary "OWNER" I)Ii'6RI ROSE I NIT RL61 ;, • \\11'I fi 16 State of California County of On personally appeared , 2004, before me, , a Notary Public, , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) State of California County of On , 2004, before me, personally appeared , a Notary Public, personally known to me (or proved to. me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribes; to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument' the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (seal) DESFRI ROSE \11 REGI LA[01,l'AOREEMEXT,0".,-SAMVIh EXHIBIT A LEGAL DESCRIPTION That certain real property situated in the City of Palm Desert, County of Riverside, State of California, described as follows: LOT OF TRACT MAP NO. 27546, IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 249 OF MAPS, PAGES 63 THROUGH 68, INCLUSIVE, RECORDS OF SAID COUNTY. DFSFRFROSI:I `ITREGI'LATORYAGRI{EMENI `^,•.S.\\wI.F. ORDINANCE NO. 1066 EXHIBIT B Pursuant to Title 14, Division 6, Article 6 (commencing with section 15070) of the California Code of Regulations. NEGATIVE DECLARATION CASE NO: DA 03-02 as it relates to Case Nos. C/Z 03-04, TT 31363 and PP/CUP 03-06 APPLICANT/PROJECT SPONSOR: Sares Regis Group c/o Greg Albert 18825 Bardeen Avenue Irvine, CA 92612 PROJECT DESCRIPTION/LOCATION: An agreement relating to the development and ongoing operation of a 320-unit apartment/condominium project on the north side of Gerald Ford Drive between Monterey Avenue and Portola Avenue, 73-240 Gerald Ford Drive. The Director of the Department of Community Development, City of Palm Desert, California, has found that the described project will not have a significant effect on the environment. A copy of the Initial Study has been attached to document the reasons in support of this finding. Mitigation measures, if any, included in the project to avoid potentially significant effects, may also be found attached. 5/27/04 PHILI DRELL DATE DIRECTOR OF COMMUNITY DEVELOPMENT N ORDINANCE NO. 1066 EXHIBIT B Pursuant to Title 14, Division 6, Article 6 (commencing with section 15070) of the California Code of Regulations. NEGATIVE DECLARATION CASE NO: DA 03-02 as it relates to Case Nos. C/Z 03-04, TT 31363 and PP/CUP 03-06 APPLICANT/PROJECT SPONSOR: Sares Regis Group c/o Greg Albert 18825 Bardeen Avenue Irvine, CA 92612 PROJECT DESCRIPTION/LOCATION: An agreement relating to the development and ongoing operation of a 320-unit apartment/condominium project on the north side of Gerald Ford Drive between Monterey Avenue and Portola Avenue, 73-240 Gerald Ford Drive. The Director of the Department of Community Development, City of Palm Desert, California, has found that the described project will not have a significant effect on the environment. A copy of the Initial Study has been attached to document the reasons in support of this finding. Mitigation measures, if any, included in the project to avoid, potentially significant effects, may also be found attached. 5/27/04 PHILIP DREL DATE DIRECTOR O COMMUNITY DEVELOPMENT Il