HomeMy WebLinkAboutCONVEYANCE OF A SINGLE FAMILY LOT TO HABITAT FOR HUMANITY - EL CORTEZ WAY - RESOLUTION 513 PALM DESERT REDEVELOPMENT AGENCY
STAFF REPORT
REQUEST: PUBLIC HEARING FOR CONVEYANCE OF A SINGLE-FAMILY LOT TO
HABITAT FOR HUMANITY OF THE COACHELLA VALLEY, INC. AND
APPROVAL OF A DISPOSITION AND DEVELOPMENT AGREEMENT
SUBMITTED BY: JANET MOORE, HOUSING AUTHORITY ADMINISTRATOR
DATE: JANUARY 12, 2006
CONTENTS: 1. AGENCY RESOLUTION NO.
2. DISPOSITION AND DEVELOPMENT AGREEMENT
Recommendation:
That the Agency Board open the public hearing and following public testimony
pursuant to Section 33445 of the Health and Safety Code take the following action:
By Minute Motion:
1. Adopt Resolution No. ; a resolution of the Palm Desert
Redevelopment Agency approving the conveyance of certain real property
located on the Northeast Corner of Portola and El Cortez known as APN 625-
061-025 to Habitat for Humanity of the Coachella Valley, Inc., for the purpose
of constructing a single-family dwelling to be made available to a very low
income family.
2. Approve a Disposition and Development Agreement and A Unit Regulatory
and Lien Agreement, substantially as to form.
3. Authorize Executive Director or his designee to execute all necessary
documents to facilitate the transfer.
Executive Summary:
The Redevelopment Agency has received a request from Habitat for Humanity of the Coachella
Valley, Inc. requesting the donation of a vacant lot from the City of Palm Desert Redevelopment
Agency to build a single-family dwelling unit. Habitat for Humanity of the Coachella Valley, Inc.
has built six (6) homes in the City of Palm Desert and has been successful in building quality
housing for low income families. The lot would be suitable for this purpose and staff recommends
that the above mentioned lot be donated to Habitat for Humanity of Coachella Valley Inc.
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Staff Report
Public Hearing - Conveyance of Single-family Lot to Habitat for Humanity
Page 2
January 12, 2006
Discussion:
The above-referenced lot is owned by the Redevelopment Agency and was acquired with the
specific intent to construct a single-family dwelling to be made available to a very low income
household.
Health and Safety Code 33433 requires that before any property of the Agency is sold or leased,
the conveyance must first be approved by the governing body by resolution at a public hearing.
The purpose of the public hearing is to receive public testimony as prescribed by law. Notice of
the time and place of the public hearing was published in a newspaper of general circulation in
the community for at least two (2) weeks prior to the hearing.
In addition, attached for your review and approval is a proposed Disposition and Development
Agreement and Unit Regulatory and Lien Agreement by and between Habitat for Humanity of the
Coachella Valley Inc., and the Redevelopment Agency,which outlines the requirements on behalf
of Habitat in consideration for the conveyance of the above-referenced property.
Conditions for the conveyance are:
1. The recordation of the 45-year affordability covenants;
2. The sale of the dwelling to a very low income household;
3. Incorporate energy efficient elements above Title 24;
3. Resale price controls; and
4. The Agency's option to purchase upon resale
Submitted by: Department Head:
Janet M. Moore Dave Yrigoyen
Housing Authority Administrator Director of Redevelopment/Housing
jmg
Approval:
Justin McCarthy, ACM/Redevelopment Carlos L. Ortega, Executive Director
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RESOLUTION NO.
A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY
APPROVING THE CONVEYANCE OF CERTAIN REAL PROPERTY LOCATED
ON THE NORTHEAST CORNER OF PORTOLA AND EL CORTEZ KNOWN AS
APN 625-061-025 TO HABITAT FOR HUMANITY OF THE COACHELLA VALLEY,
INC. FOR THE CONSTRUCTION OF A SINGLE FAMILY DWELLING AND
APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT
RECITALS
A. Pursuant to Health and Safety Code 33433, the Redevelopment Agency, is required to hold
a public hearing before any property of the Agency acquired in whole or in part, directly or
indirectly, with tax increment money is sold or leased for development pursuant to the
Redevelopment Plan, said conveyance shall first be approved by the City Council by resolution
after a public hearing.
B. Pursuant to Health and Safety Code 33013, the Redevelopment Agency hereby determines
that the proposed conveyance of the property to Habitat for Humanity of the Coachella Valley,
Inc., constitutes a "Small Housing Project", and thereby elects not to apply the requirements of
Housing Code 33433 (a) and 33433 (b).
C. Pursuant to Health and Safety Code 33433 (c), the Redevelopment Agency hereby directs
the Agency to prepare a report to the City Council on or before 30 days after the end of the
Agency's present fiscal year disclosing the name of the owner of the property,the legal description
or street address of the property, the date of the conveyance of the property, the restrictions
posed by the agreement on the owner of the property and the date on which the Agency had a
public hearing on the conveyance of the property.
NOW, THEREFORE, the Palm Desert Redevelopment Agency of the City of Palm Desert
hereby finds, determines, resolves and orders as follows:
Section 1 That a duly noted public hearing in conformity with the requirement of Health and
Safety Code 33433 (a) was held on
Section 2 The Redevelopment Agency has reviewed and considered all written and oral
comments, questions and concerns regarding the Agency's proposed conveyance
of the property to Habitat for Humanity of the Coachella Valley, Inc., received prior
to and at the public hearing on said conveyance.
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Section 3 The Redevelopment Agency hereby authorizes the Agency to convey the property
to Habitat for Humanity of the Coachella Valley, Inc. in accordance with the terms
and conditions of the Disposition and Development Agreement and pursuant to the
requirements of Health and Safety code 33433.
PASSED, APPROVED and ADOPTED by the Palm Desert Redevelopment Agency, this
12th of January, 2006, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Jim Ferguson, Chairman
ATTEST:
Rachelle D. Klassen, Secretary
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RESOLUTION NO. 513
A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY
APPROVING THE CONVEYANCE OF CERTAIN REAL PROPERTY LOCATED
ON THE NORTHEAST CORNER OF PORTOLA AND EL CORTEZ KNOWN AS
APN 625-061-025 TO HABITAT FOR HUMANITY OF THE COACHELLA VALLEY,
INC. FOR THE CONSTRUCTION OF A SINGLE FAMILY DWELLING AND
APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT
RECITALS
A. Pursuant to Health and Safety Code 33433, the Redevelopment Agency, is required to hold
a public hearing before any property of the Agency acquired in whole or in part, directly or
indirectly, with tax increment money is sold or leased for development pursuant to the
Redevelopment Plan, said conveyance shall first be approved by the City Council by resolution
after a public hearing.
B. Pursuant to Health and Safety Code 33013, the Redevelopment Agency hereby determines
that the proposed conveyance of the property to Habitat for Humanity of the Coachella Valley, Inc.,
constitutes a"Small Housing Project", and thereby elects not to apply the requirements of Housing
Code 33433 (a) and 33433 (b).
C. Pursuant to Health and Safety Code 33433(c),the Redevelopment Agency hereby directs the
Agency to prepare a report to the City Council on or before 30 days after the end of the Agency's
present fiscal year disclosing the name of the owner of the property, the legal description or street
address of the property, the date of the conveyance of the property, the restrictions posed by the
agreement on the owner of the property and the date on which the Agency had a public hearing
on the conveyance of the property.
NOW, THEREFORE, the Palm Desert Redevelopment Agency of the City of Palm Desert
hereby finds, determines, resolves and orders as follows:
Section 1 That a duly noted public hearing in conformity with the requirement of Health and
Safety Code 33433 (a)was held on
Section 2 The Redevelopment Agency has reviewed and considered all written and oral
comments, questions and concerns regarding the Agency's proposed conveyance of
the property to Habitat for Humanity of the Coachella Valley, Inc., received prior to
and at the public hearing on said conveyance.
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Section 3 The Redevelopment Agency hereby authorizes the Agency to convey the property to
Habitat for Humanity of the Coachella Valley, Inc. in accordance with the terms and
conditions of the Disposition and Development Agreement and pursuant to the
requirements of Health and Safety code 33433.
PASSED, APPROVED and ADOPTED by the Palm Desert Redevelopment Agency, this
12th of January, 2006, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Jim Ferguson, Chairman
ATTEST:
Rachelle D. Klassen, Secretary
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DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
PALM DESERT REDEVELOPMENT AGENCY
AND
HABITAT FOR HUMANITY
DATED
January 12, 2006
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TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS 2
Section 1.1 Definitions 2
1.1.1 Agency 2
1.1.2 Agency Board 2
1.1.3 Agreement 2
1.1.4 City 2
1.1.5 City Council 2
1.1.6 Certificate of Occupancy 2
1.1.7 Close of Escrow 2
1.1.8 Close of Escrow Date 2
1.1.9 Default 2
1.1.10 Escrow 2
1.1.11 Escrow Holder 2
1.1.12 Hazardous Materials 2
1.1.13 Improvements 3
1.1.14 Party 3
1.1.15 Permitted Exceptions 3
1.1.16 Property 3
1.1.17 Schedule of Performance 3
1.1.18 Scope of Development 3
ARTICLE 2 CONVEYANCE OF THE PROPERTY 4
Section 2.1 Conveyance of the Property 4
Section 2.2 Consideration 4
Section 2.3 Opening and Closing of Escrow 4
Section 2.4 Condition of Title; Title Insurance 4
Section 2.5 Escrow Charges 6
Section 2.6 Conditions to Close of Escrow 6
Section 2.7 Condition of the Property 7
Section 2.8 Deposit into Escrow 9
Section 2.9 Authorization to Record Documents and Disburse Funds 9
Section 2.10 Escrow's Closing Actions. 10
Section 2.11 Environmental Indemnity 10
Section 2.12 Additional Instructions 11
ARTICLE 3 DEVELOPMENT OF THE PROPERTY 11
Section 3.1 Development of the Improvements 11
Section 3.3 Rights of Access 11
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Section 3.4 Local, State and Federal Laws 11
Section 3.5 City and Other Governmental Agency Permits and
Approvals 12
Section 3.6 Anti-discrimination During Construction 12
Section 3.7 Taxes, Assessments, Encumbrances and Liens 12
Section 3.8 No Agency Created 12
Section 3.9 Certificates of Occupancy 12
ARTICLE 4 LIMITATIONS ON TRANSFERS AND SECURITY INTERESTS 12
Section 4.1 Restriction on Transfer of the Developer's Rights and
Obligations 12
Section 4.2 Mortgages and Deeds of Trust 13
Section 4.3 Rights of Holders 13
Section 4.4 Noninterference with Holders 13
ARTICLE 5 USE OF THE PROPERTY 14
Section 5.1 Use of Property 14
Section 5.2 Obligation to Refrain from Discrimination 14
Section 5.3 Form of Nondiscrimination and Non-Segregation Clauses 14
ARTICLE 6 EVENTS OF DEFAULT, REMEDIES AND TERMINATION 15
Section 6.1 Defaults--Definition 15
Section 6.2 Remedies in the Event of Default 16
6.2.1 Remedies Prior to the Close of Escrow 16
6.2.2 Failure to Commence or Complete Construction. 17
6.2.3 Remedies for Default After the Close of Escrow 17
Section 6.3 Liberal Construction 18
Section 6.4 No Personal Liability 18
Section 6.5 Rights and Remedies are Cumulative 18
Section 6.6 Inaction Not a Waiver of Default 18
Section 6.7 Force Majeure 18
ARTICLE 7 INSURANCE; INDEMNITY 19
Section 7.1 Insurance 19
Section 7.2 Indemnity 20
ARTICLE 8 GENERAL PROVISIONS 20
Section 8.1 Notices 20
Section 8.2 Construction 21
Section 8.3 Interpretation 21
Section 8.4 Time of the Essence 21
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Section 8.5 Warranty Against Payment of Consideration for Agreement 22
Section 8.6 Attorneys' Fees 22
Section 8.7 Entire Agreement, Waivers and Amendments 22
Section 8.8 Severability 22
Section 8.9 Headings 22
Section 8.10 No Third Party Beneficiaries other than the City 23
Section 8.11 Governing Law; Jurisdiction; Service of Process 23
Section 8.12 Survival 23
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DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT ("Agreement"), dated as of
, 2006, is entered into by and between the PALM DESERT
REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and
HABITAT FOR HUMANITYOF COACHELLA VALLEY, INC., a California non-profit,
public benefit corporation ("Developer").
RECITALS
This Agreement is entered into with reference to the following facts:
A. The purpose of this Agreement is to effectuate the Redevelopment Plan for
Project Area No. 4 of the Agency (the "Redevelopment Plan"), in the City of Palm Desert,
California, by facilitating improvements to real property within the Project Area (as defined
below).
B. The Redevelopment Plan has been approved and adopted by Ordinance No.
724 of the City of Palm Desert adopted July 19, 1993.
C. The Agency is a public body, corporate and politic, exercising governmental
functions and powers, and organized and existing under the Community Redevelopment
Law of the State of California.
D. Construction of the Improvements (as hereinafter defined) will assist in the
elimination of blight in the Project Area, provide additional jobs, and substantially improve
the economic and physical conditions in the Project Area in accordance with the purposes
and goals of the Redevelopment Plan.
E. The land uses specified in this Agreement and the provisions relating to
construction of the Improvements are consistent with the provisions of the Redevelopment
Plan and each of its applicable elements.
F. A material inducement to the Agency to enter into this Agreement is the
agreement by the Developer to pay the amounts to the Agency or the City as provided
herein.
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AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and of the mutual
covenants contained in this Agreement the parties hereto agree as follows:
ARTICLE 1 DEFINITIONS.
Section 1.1 Definitions. The following terms as used in this Agreement shall have
the meanings given unless expressly provided to the contrary:
1.1.1 Agency means the Palm Desert Redevelopment Agency, a public
body, corporate and politic, exercising governmental functions and powers, and organized
and existing under the Community Redevelopment Law of the State of California.
1.1.2 Agency Board means the board of directors of the Palm Desert
Redevelopment Agency.
1.1.3 Agreement means this Disposition and Development Agreement.
1.1.4 City means the City of Palm Desert, a municipal corporation.
1.1.5 City Council means the City Council of the City of Palm Desert, a
municipal corporation.
1.1.6 Certificate of Occupancy means a certificate issued by the City of
Palm Desert pursuant to the City's building code as defined in such code approving a
single family residence for use by occupants.
1.1.7 Close of Escrow is defined in Section 2.3.
1.1.8 Close of Escrow Date for the Property means the date upon which the
Agency by quitclaim deed shall convey title to the Property to the Developer and such
quitclaim deed is recorded in the Official Records of the County of Riverside in accordance
with this Agreement.
1.1.9 Default is defined in Section 6.1.
1.1.10 Escrow is defined in Section 2.3.
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1.1.11 Escrow Holder means Foresite Escrow, or another licensed escrow
holder mutually selected by the Parties.
1.1.12 Hazardous Materials means any chemical, material or substance now
or hereafter defined as or included in the definition of"hazardous substances,""hazardous
wastes," "hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," "toxic substances," "pollutant or contaminant," "imminently hazardous chemical
substance or mixture," "hazardous air pollutant," "toxic pollutant,"or words of similar import
under any local, state or federal law or under the regulations adopted or publications
promulgated pursuant thereto applicable to the Property, including, without limitation: the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. '9601, et seq. ("CERCLA"); the Hazardous Materials Transportation Act, as
amended, 49 U.S.C.' 1801, et seq.; the Federal Water Pollution Control Act, as amended,
33 U.S.C. ' 1251, et seq.; and the Resource Conservation and Recovery Act of 1976, 42
U.S.C. ' 6901, et seq. The term "Hazardous Materials" shall also include any of the
following: any and all toxic or hazardous substances, materials or wastes listed in the
United States Department of Transportation Table (49 CFR 172.101) or by the
Environmental Protection Agency as hazardous substances (40 CFR Part 302)and in any
and all amendments thereto in effect as of the Close of Escrow Date; oil, petroleum,
petroleum products (including, without limitation, crude oil or any fraction thereof), natural
gas, natural gas liquids, liquefied natural gas or synthetic gas usable for fuel, not otherwise
designated as a hazardous substance under CERCLA; any substance which is toxic,
explosive, corrosive, reactive, flammable, infectious or radioactive (including any source,
special nuclear or by-product material as defined at 42 U.S.C. ' 2011, et seq.),
carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any
governmental authority; asbestos in any form; urea formaldehyde foam insulation;
transformers or other equipment which contain dielectric fluid containing levels of
polychlorinated byphenyls; radon gas; or any other chemical, material or substance (i)
which poses a hazard to the Property, to adjacent properties, or to persons on or about the
Property, (ii) which causes the Property to be in violation of any of the aforementioned
laws or regulations, or (iii) the presence of which on or in the Property requires
investigation, reporting or remediation under any such laws or regulations.
1.1.13 Improvements means all buildings, landscaping, infrastructure,
utilities, and other improvements to be built on the Property, or any part thereon, as
described in the Scope of Development.
1.1.14 Party means any party to this Agreement. The "Parties" means all
parties to this Agreement.
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1.1.15 Permitted Exceptions are defined in Section 2.4.4.
1.1.16 Property is that certain real property to be developed by the Developer
described in Exhibit A, attached hereto and incorporated by reference herein.
1.1.17 Schedule of Performance means the schedule on Exhibit B.
1.1.18 Scope of Development means the description of the Improvements set
forth in Exhibit C.
ARTICLE 2 CONVEYANCE OF THE PROPERTY.
Section 2.1 Conveyance of the Property. Subject to and in accordance with the
terms and conditions hereinafter set forth, the Agency to convey to the Developer, and the
Developer agrees to acquire from the Agency, fee simple title to the Property.
Section 2.2 Consideration. The Agency convey the Property to the Developer in
consideration for the Developer's covenant to construct the improvements on the Property
described below, and the covenants of the Developer set forth in the Regulatory
Agreement.
Section 2.3 Opening and Closing of Escrow. Within five (5) business days after
the Agency's approval of this Agreement, the Agency and the Developer shall cause an
escrow(the "Escrow") to be opened with Escrow Holder for the conveyance of the Property
by the Agency to the Developer. The Parties shall deposit with Escrow Holder a fully
executed duplicate original of this Agreement which shall serve as the escrow instructions
for the Escrow. The Agency and the Developer shall provide such additional escrow
instructions as shall be necessary and consistent with this Agreement. Escrow Holder is
authorized to act under this Agreement and to carry out its duties as Escrow Holder
hereunder. Escrow shall close (the "Close of Escrow") on or before within 60 days after
the Opening of Escrow.
Section 2.4 Condition of Title; Title Insurance.
2.4.1 The Developer has received from First American ("Title Company"), a
preliminary report for CLTA Owner's Standard Coverage Policy for the Property
("Preliminary Report"), setting forth all liens, encumbrances, easements, restrictions,
conditions, pending litigation, judgments, administrative proceedings, and other matters
affecting the Agency's title to the Property (each an "Exception"), together with copies of all
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documents relating to Exceptions referred to in the Preliminary Report. The Developer
shall approve or disapprove each Exception shown on the Preliminary Report within five
(5) business days after the Opening of Escrow. Any title Exceptions that are approved or
accepted by the Developer are referred to as "Permitted Title Exceptions."
2.4.2 Any monetary liens and special assessments affecting the Property,
other than current non-delinquent real property taxes not then due and payable, are
hereby disapproved (a "Monetary Disapproved Exception").
2.4.3 If any title Exception other than a Monetary Disapproved Exception is
disapproved or deemed disapproved (each a "Non-Monetary Disapproved Exception"),
then the Agency may, at the Agency's option, exercisable at the Agency's sole and
absolute discretion, within thirty (30) days following expiration of the 5 business day period
provided under Section 2.4.1 above, elect to use its good faith efforts to cause each Non-
Monetary Disapproved Exception to be discharged, satisfied, released, or terminated, as
the case may be, of record, and in a form that is reasonably satisfactory to the Developer,
all at the Agency's sole cost and expense. If the Agency makes such election, then the
Agency shall have until the Close of Escrow to cause it to be discharged. The Agency
shall notify the Developer as soon as reasonably possible if the Agency reasonably
believes that the Agency will succeed or not succeed in causing any such Non-Monetary
Disapproved Exception to be removed at the Close of Escrow, and shall keep the
Developer informed as to the progress of the Agency's efforts in that regard.
If the Agency is unable to obtain a discharge, satisfaction, release, or
termination of a Non-Monetary Disapproved Exception, or if the Agency does not elect to
do so, then the Developer shall have the right to:
2.4.3.1 Waive the Non-Monetary Disapproved Exception and proceed with
Closing, accepting title to the Property subject to the Non-Monetary Disapproved
Exception, without any price reduction, (at which time such Exception shall be deemed a
Permitted Title Exception), or
2.4.3.2 Terminate this Agreement, in which event both the Developer and
the Agency shall be relieved of all further obligation and liability to each other under this
Agreement and all the funds and documents deposited with Escrow Agent shall be
promptly refunded or returned, as the case may be, by Escrow Agent to the depositing
party, less escrow cancellation fees of not to exceed $500.
2.4.4 At the Close of Escrow, the Agency shall convey title to the Property
to the Developer (or its Permitted Assignee) by quitclaim deed substantially in the form
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attached hereto as Exhibit D and incorporated herein by this reference (the "Quitclaim
Deed") or Grant Deed of acceptable form to the County Recorder of said County. Title to
the Property shall be conveyed subject to (i) non-delinquent current real property taxes
and assessments not yet due for the tax year during which the conveyance occurs, (ii) all
Permitted Title Exceptions, (iii) the covenants, conditions and restrictions benefiting and
burdening the Property as set forth in the Regulatory Agreement attached hereto as Exhibit
E, and (iv) any other matters which arise out of the actions of the Developer or its agents
and representatives (collectively, the "Permitted Exceptions"). The Developer agrees to
approve or disapprove any title exceptions within 5 business days after the Opening of
Escrow. The Agency shall cause to be removed by the Close of Escrow all Monetary
Disapproved Exceptions and shall use its best reasonable efforts to remove or cause to be
removed by the Close of Escrow any Non-Monetary Disapproved Exceptions, but if the
Agency is unable to remove any Non-Monetary Disapproved Exception(s), then the
Agency shall not be in breach hereof but the Developer shall have the right to terminate
this Agreement.
2.4.5 At the Close of Escrow, the Agency shall, at the Developer's sole cost
and expense, cause to be delivered to the Developer a CLTA Owner's Standard Policy of
Title Insurance, issued by First American (or another title company mutually approved by
the Parties) (the "Title Company") in favor of the Developer in the amount of$25,000.00,
insuring that title is vested in the Developer free and clear of all liens, easements,
covenants, conditions, restrictions, and other encumbrances of record, other than the
Permitted Exceptions for the Property. The Developer may obtain one or more extended
coverage policies of title insurance or special endorsements at its own cost.
Section 2.5 Escrow Charges. The Developer shall be responsible for any
recording fees, documentary and local transfer taxes, and customary escrow fees and
charges arising hereunder.
Section 2.6 Conditions to Close of Escrow. The obligation of the Agency and the
Developer under this Agreement to close Escrow shall be subject to the satisfaction or
waiver of each of the following conditions:
2.6.1 The Developer's approval of the physical condition of the Property,
which the Developer shall approve or disapprove by written notice delivered to the Agency
within 15 days after the Opening of Escrow.
2.6.2 The Developer's provision to the Executive Director the insurance
certificates conforming to Section 7 of this Agreement;
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2.6.3 The Developer's obtaining of all building permits and other
entitlements required in order for Developer to construct the Improvements on the
Property;
2.6.4 The Developer's delivery to the Agency's Executive Director of
evidence reasonably satisfactory to the Executive Director that the Developer has the due
authority to execute and deliver all of the contracts, entered into by the Developer in
connection with construction of the Improvements. Such evidence shall include, without
limitation, partnership agreements, certificates of limited partnership, articles of
incorporation, by-laws, and resolutions of the Developer, as well as good standing
certificates issued by the Developer's state of incorporation;
2.6.5 The Developer's approval of the condition of title to the Property as
described in Section 2.4.
2.6.6 The Agency's delivery of all documents required to be delivered by the
Agency pursuant to Section 2.8 hereof.
2.6.7 The Title Company shall have committed to issue a CLTA Standard
Coverage Owner's Title Insurance Policy, with any endorsements requested by the
Developer, and with liability equal to the value of the Property (as determined by the
Developer) showing fee simple title to the Property vested in the Developer or the
Developer's assignee or designee, subject only to the Permitted Exceptions, at the Close
of Escrow.
2.6.8 The concurrent recordation of a Regulatory Agreement in the form
attached hereto as Exhibit E (the "Regulatory Agreement"), restricting the sale of the
Property by the Developer to persons or families of very low income;
2.6.9 The Developer's delivery to the Agency of such other documents and
instruments as the Agency shall reasonably require.
Section 2.7 Condition of the Property.
2.7.1 The Developer shall have the right, for the period commencing with
the date hereof through the date that is 30 days after the Opening of Escrow, to approve or
disapprove the physical condition of the Property. During such period, the Developer is
hereby granted permission to enter onto the Property for the purpose of performing a
Phase I Environmental Assessment, and inspecting and testing the soil to determine the
adequacy and quality of the underlying soil to meet its building requirements. The
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Developer shall indemnify, hold harmless, and defend the Agency against and hold the
Agency and the Property harmless from, all losses, costs, damages, liabilities, liens, and
expenses, including, without limitation, reasonable attorney fees, arising out of such entry
and activities by the Developer and its agents, employees, or contractors, prior to the
Close of Escrow, except to the extent any such losses, costs, damages, liabilities, and
expenses arise out of the gross negligence or willful acts of the Agency.
2.7.2 The Agency shall convey the Property to the Developer in an "as is"
condition, and except for those representations and warranties expressly set forth in this
Agreement, the Agency makes no warranty whatsoever to the Developer as to the
condition of any portion of the Property, including whether the Property contains any
Hazardous Materials. Subject to the provisions of Section 2.7.1, the Developer has
inspected the Property and has determined that the Property is suitable for the Developer's
purposes. The Developer acknowledges and agrees:
2.7.2.1 The Agency has made no representation or warranty with respect
to the Property except for those representations and warranties contained in this
Agreement, and that prior to the Close of Escrow, the Agency will make no representations
and warranties with respect to the Property other than those contained in this Agreement.
2.7.2.2 It is purchasing the Property with the ultimate objective of
constructing new improvements thereon.
2.7.2.3 Its decision to acquire the Property will be based on the results of
its analysis and the reports it obtains during the period described in Section 2.7.1 hereof.
2.7.2.4 The Agency has made no representation or warranty as to the
accuracy or completeness of any reports and other materials prepared by persons other
than the Agency and delivered by the Agency to the Developer, and the Developer is not
relying on the accuracy and completeness of any such reports and other materials
prepared by persons other than the Agency.
2.7.2.5 Except as specifically provided in this Agreement, the Agency has
made no representation or warranty with respect to the use, fitness for a particular reason,
zoning, value, improvements, square footages or any other condition of the Property.
2.7.2.6 The Agency shall have disclosed to the Developer promptly after
the execution of this Agreement all material adverse conditions, defects and other matters
relating to the Property of which the Agency has actual knowledge which, in the Agency's
sole judgment, would have a material adverse impact upon the Property; provided that the
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foregoing disclosure obligation shall apply only to the Property itself, and not to general or
local economic or market conditions.
Except for the Agency's representations, warranties and covenants contained
in this Agreement, the Developer is accepting the Property in "AS-IS," "WHERE-IS"
condition "WITH ALL FAULTS." The Developer agrees that the Agency has no obligation
to remedy any faults, defects, or other adverse conditions described in any report or other
material obtained by the Developer or delivered by the Agency to the Developer, including
the remediation of any Hazardous Material on the Property.
2.7.3 The Developer represents and warrants to the Agency as of the date
of this Agreement and as of the Close of Escrow Date that:
2.7.3.1 The Developer is a non-profit, public benefit corporation, duly
organized, validly existing and in good standing under the laws of the State of California.
2.7.3.2 The Developer has duly authorized the execution and performance
of this Agreement and the execution and performance of all of the closing documents set
forth herein.
2.7.3.3 The Developer's execution and performance of this Agreement and
the closing documents will not violate any provision of any mortgage, lease, contract,
agreement, instrument, order, judgment or decree by which the Developer is bound.
2.7.3.4 This Agreement is valid and enforceable against the Developer in
accordance with its terms and each instrument to be executed by the Developer pursuant
to this Agreement will, when executed and delivered, be enforceable in accordance with its
terms, subject to bankruptcy, insolvency and similar laws affecting creditors= rights
generally.
Section 2.8 Deposit into Escrow. The Agency hereby covenants and agrees to
deliver to Escrow Holder prior to the Close of Escrow the following instruments and
documents, the delivery of each of which shall be a condition of the Close of Escrow:
2.8.1 A Quitclaim Deed or Grant Deed duly executed and acknowledged by
the Agency granting and conveying to the Developer good and marketable title to the
Property. Said Quitclaim Deed shall be in the form attached hereto as Exhibit D or that
which is acceptable to the County Recorder of said County;
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2.8.2 The Agency's affidavit as contemplated by California Revenue and
Taxation Code '18662 ("Withholding Affidavit");
2.8.3 A Certification of Non-Foreign Status in accordance with I.R.C.
Section 1445 (the "FIRPTA Certificate"); and
2.8.4 Such proof of the Agency's authority and authorization to enter into
this transaction as the Title Company may reasonably require in order to issue the
Developer's policy of title insurance.
Section 2.9 Authorization to Record Documents and Disburse Funds.
Escrow Holder is hereby authorized to record the documents and disburse the funds
and documents called for hereunder upon the Close of Escrow, provided each of the
following conditions has then been fulfilled:
2.9.1 The Title Company can issue in favor of the Developer a CLTA
Standard Coverage Owner's Policy of Title Insurance, with liability equal to the value of the
Property (as determined by the Developer) showing the Property vested in the Developer
subject only to the Permitted Exceptions.
2.9.2 The Agency shall have deposited in Escrow the documents required
pursuant to Section 2.8, and the Developer shall have deposited in Escrow the
Developer's share of Escrow closing costs.
2.9.3 The Agency and the Developer have confirmed to Escrow Holder that
all of the other closing conditions set forth in Section 2.6 have been satisfied or waived in
writing.
Unless otherwise instructed in writing, Escrow Holder is authorized to record at the Close
of Escrow any instrument delivered through this Escrow if necessary or proper for issuance
of the Developer's policy of title insurance. Any amendment of these escrow instructions
shall be in writing and signed by both the Agency and the Developer. At the time of any
amendment, Escrow Holder shall agree to carry out its duties as escrow holder under such
amendment. Escrow Holder is instructed to send copies of notices, demands and
communications between the Parties to or from the Agency or to or from the Developer, to
both parties to the addresses and in the manner established in Section 8.1 of this
Agreement.
Section 2.10 Escrow's Closing Actions. On the Close of Escrow, Escrow Holder
shall close Escrow as follows:
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2.10.1 Record the Quitclaim Deed or Grant Deed (marked for return to the
Developer) with the Riverside County Recorder (which shall be deemed delivery to the
Developer);
2.10.2 Record the Regulatory and Lien Agreement (marked for return to the
Agency);
2.10.3 Issue the Title Policy or cause the Title Company to issue the Title
Policy;
2.10.4 Prorate taxes, assessments, rents, and other charges as of the Close
of Escrow in accordance with the settlement statements approved by the Parties.
2.10.5 Charge the Developer for those costs and expenses to be paid by the
Developer pursuant to this Agreement and disburse any net funds remaining after the
preceding disbursements to the Developer;
2.10.6 Prepare and deliver to both the Developer and the Agency one signed
copy of Escrow Holder's closing statement showing all receipts and disbursements of the
Escrow; and
2.10.7 Deliver to the Developer the FIRPTA Certificate and the Withholding
Affidavit.
Section 2.11 Environmental Indemnity. The Developer shall indemnify, protect,
defend and hold harmless the City (as a third party beneficiary) and the Agency, and the
Agency's officials, officers, attorneys, employees, consultants, agents, and
representatives, from and against any and all claims, liabilities, suits, losses, costs,
expenses and damages, including but not limited to attorneys' fees and costs, arising out
of any claim for loss or damage to any property, including the Property, injuries to or death
of persons, or for the cost of cleaning up the Property and removing Hazardous Materials
or toxic substances, materials and waste therefrom, by reason of contamination or adverse
effects on the environment, or by reason of any statutes, ordinances, orders, rules or
regulations of any governmental entity or agency requiring the clean-up of any Hazardous
Materials caused by or resulting from any Hazardous Material, or toxic substances or
waste existing on or under, any portion of the Property acquired by the Developer.
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The buyer hereby releases herein all claims they may have now or in the future with
respect to contamination that may exist on the property, (the "Property") as of the date of
closing.
In connection with such release, Buyer hereby expressly waives its rights, if any,
under California Civil Code Section 1542 which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IS KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR."
Buyer's Initials
Section 2.12 Additional Instructions. The Parties shall execute appropriate escrow
instructions, prepared by the Escrow Holder, which are not inconsistent herewith. If there
is any inconsistency between the terms hereof and the terms of the escrow instructions,
the terms hereof shall control unless an intent to amend the terms hereof is expressly
stated in such instructions.
ARTICLE 3 DEVELOPMENT OF THE PROPERTY.
Section 3.1 Development of the Improvements. The Developer shall develop, or
cause to be developed, the Improvements on the Property, in accordance with the Scope
of Development, the Schedule of Performance, all requirements of the City's Municipal
Code, and any and all applicable federal, state and local laws, rules and regulations in
connection with such construction, any conditions of approval required by the City
(including conditions of approval for the subdivision of the Property), and all terms,
conditions and requirements of this Agreement.
Section 3.2 Cost of Construction. The cost of constructing the Improvements,
including the costs for developing and constructing the Improvements thereon, shall be
borne solely by the Developer.
Section 3.3 Rights of Access. In addition to those rights of access to and across
the Property to which the Agency and the City may be entitled by law, members of the
staffs of the Agency and the City shall have a reasonable right of access to the Property,
without charge or fee, at any reasonable time, upon reasonable notice to the Developer to
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inspect the work being performed at the Property. The Developer may require that a
representative from the Developer accompany the Agency's or City's staff members during
any such inspection.
Section 3.4 Local, State and Federal Laws. The Developer shall carry out the
construction of the Improvements on the Property in conformity with all applicable laws,
including all applicable federal and state occupation, safety and health standards. The
Developer represents and warrants that all of the Improvements to be constructed by the
Developer shall be constructed in compliance with the current City and State of California
standards and laws.
Section 3.5 City and Other Governmental Agency Permits and Approvals. Before
commencement of construction or development of any work of improvement on the
Property, the Developer shall (at the Developer's expense)secure, or cause to be secured,
any and all permits, which may be required by the City or any other governmental agency
having jurisdiction over such construction or development.
Section 3.6 Anti-discrimination During Construction. The Developer, for itself and
its successors and assigns, agrees that it shall not discriminate against any employee or
applicant for employment because of age, sex, marital status, race, handicap, color,
religion, creed, ancestry, or national origin in the construction of the Improvements.
Section 3.7 Taxes, Assessments, Encumbrances and Liens. The Developer shall
pay when due all real property taxes and assessments assessed or levied on portions of
the Property from time to time owned by the Developer.
Section 3.8 No Agency Created. In performing this Agreement, the Developer is
an independent contractor and not the agent of the Agency or the City. The Agency and
the City are not agents of the Developer. Neither the Agency nor the City shall have any
responsibility whatsoever for payment to any contractor or supplier of the Developer. The
Developer shall not have any responsibility whatsoever for payment to any contractor or
supplier of the Agency or the City.
Section 3.9 Certificates of Occupancy. Upon the Developer's completion of the
construction of the Improvements, the Developer will apply to the City for one or more
Certificates of Occupancy for the Improvements. The City's issuance of final Certificate(s)
of Occupancy for the Improvements shall constitute the acknowledgement of the Agency
and the City that the Developer has complied in all respects with its development
obligations set forth in Article 3 of this Agreement.
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ARTICLE 4 LIMITATIONS ON TRANSFERS AND SECURITY INTERESTS.
Section 4.1 Restriction on Transfer of the Developer's Rights and Obligations.
4.1.1 Prior to issuance of a Certificate of Occupancy for the Improvements,
the Developer shall not sell, assign, transfer, mortgage, hypothecate, or convey
(collectively, a "Transfer") the Property or any part thereof or any of the Developer's rights
or obligations hereunder, without the Agency's prior written consent, which consent may be
granted or withheld in the Agency's sole and absolute discretion, except for the execution
of one or more mortgages, deeds of trust and related instruments securing the Developer's
construction loan. The Developer acknowledges that the identity of the Developer is of
particular concern to the Agency, and it is because of the Developer's identity that the
Agency has entered into this Agreement with the Developer. Except for any Transferee
approved by the City pursuant to this Section 4.1, and except for any Holder (defined in
Section 4.2) that has taken possession of the Property, no voluntary or involuntary
successor in interest of the Developer shall acquire any rights or powers under this
Agreement. No transfer or assignment of the Developer's interest hereunder without the
Agency's prior written approval shall be deemed to release the Developer from the
obligations of the Developer hereunder.
4.1.2 After the issuance of a Certificate of Occupancy for the Improvements,
the Developer shall have the right to Transfer the Property to any person or entity meeting
the requirements of the Regulatory Agreement.
Section 4.2 Mortgages and Deeds of Trust. Notwithstanding any provisions of
Section 4.1 to the contrary, the Developer shall have the right to mortgage or hypothecate
its interest in the Property and the Improvements pursuant to one or more mortgages,
deeds of trust, sales and leaseback, or any other form of encumbrance or conveyance
required for any reasonable method of financing from an institutional lender approved by
the Agency (which approval shall not unreasonably be withheld), for the purpose of
securing loans of funds to be used for financing the direct and indirect costs of the
Improvements (including land development costs, reasonable and customary developer
fees, loan fees and costs, and other normal and customary project costs), or for
refinancing the construction financing with permanent financing. Any institutional lender of
record holding any such mortgage, deed of trust, or other security instrument authorized by
this Agreement shall be referred to as a Holder.
Section 4.3 Rights of Holders. The Agency shall deliver a copy of any notice or
demand to the Developer concerning any breach or default by the Developer under this
Agreement to each Holder who has previously made a written request to the Agency for
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special notice hereunder. Any notice of breach or default by the Developer shall not be
effective against any such Holder unless given to such Holder. Such Holder shall have the
right at its option to cure or remedy any such default and to add the cost thereof to the
secured debt and the lien of its security interest. If such breach or default can only be
remedied or cured by such Holder upon obtaining possession, such Holder may remedy or
cure such breach or default within a reasonable period of time after obtaining possession,
provided such Holder seeks possession with diligence through a receiver or foreclosure.
Such Holder shall be permitted to undertake or continue the construction or completion of
the Improvements beyond the extent necessary to conserve or complete the
Improvements.
Section 4.4 Noninterference with Holders. The provisions of this Agreement do
not limit the right of Holders to foreclose or otherwise enforce any mortgage, deed of trust,
or other security instrument encumbering all or any portion of the Property, and the
Improvements thereon, or to pursue any remedies for the enforcement of any pledge or
lien encumbering such portions of the Property. In the event of a foreclosure sale under
any such mortgage, deed of trust or other lien or encumbrance, or sale pursuant to any
power of sale contained in any such mortgage or deed of trust, the purchaser or
purchasers and their successors and assigns, and such portions of the Property shall be,
and shall continue to be, subject to all of the conditions, restrictions and covenants of all
documents and instruments recorded pursuant to this Agreement, including, without
limitation, the restrictions set forth in the Quitclaim Deed and the Regulatory Agreement.
The Agency agrees to execute such further documentation regarding the rights of any
Holder as is customary with respect to construction or permanent financing, as the case
may be, to the extent that such documentation is reasonably requested by any Holder and
is reasonably approved by the Agency.
ARTICLE 5 USE OF THE PROPERTY.
Section 5.1 Use of Property. For the duration of the Regulatory Agreement, the
Property and any portion thereof may be used only for the development of an affordable
single-family residence, and for sale to a single family of lower income (as described in
Section 3 (C) of Unit Regulatory Agreement) for occupancy as their principal residence,
and for no other purposes. Leasing of the Property is expressly prohibited.
Section 5.2 Obligation to Refrain from Discrimination. The Developer covenants
and agrees for itself and its successors and assigns, and for every successor in interest to
the Property, or any part thereof, and their rights under this Agreement, that there shall be
no discrimination against or segregation of any person, or group of persons, on account of
sex, marital status, age, handicap, race, color, religion, creed, national origin or ancestry in
the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property,
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and the Developer(itself or any person claiming under or through the Developer)shall not
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, subleases, or vendors of the Property or any portion thereof. This provision,
which is required by law, shall not be construed as permitting the leasing of the Property.
Section 5.3 Form of Nondiscrimination and Non-Segregation Clauses. The
Developer shall refrain from restricting the rental, sale or lease of the Property or any
portion thereof, on the basis of sex, age, handicap, marital status, race, color, religion,
creed, ancestry or national origin of any person. All deeds, leases or contracts shall
contain or be subject to substantially the following nondiscrimination or non-segregation
clauses:
1. In deeds: "The grantee herein covenants by and for himself, his 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 sex, marital status, race, age, handicap, color, religion, creed,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the land herein conveyed, nor shall the grantee himself or any person
claiming under or through him, 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, subleases or vendors in the land herein
conveyed. The foregoing covenants shall run with the land."
2. In leases: "The lessee herein covenants by and for himself, his heirs,
executors, administrators and assigns, and all persons claiming under or through him, and
this lease is made and accepted upon and subject to the following conditions:
"That there shall be no discrimination against or segregation of any person or group
of persons on account of sex, marital status, race, age, handicap, color, religion, creed,
national origin or ancestry, in the leasing, subleasing, transferring, use, or enjoyment of the
land herein leased, nor shall the lessee himself, or any person claiming under or through
him, 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,
sublessees, subtenants or vendees in the land herein leased."
3. In contracts relating to the sale or transfer of the Property, or any interest
therein: "There shall be no discrimination against or segregation of any person or group of
persons on account of sex, marital status, race, age, handicap, color, religion, creed,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
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enjoyment of the land, nor shall the transferee himself or any person claiming under or
through him, 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 of the land."
The foregoing provisions, which are required by law, shall not be construed as permitting
the leasing of the Property.
ARTICLE 6 EVENTS OF DEFAULT, REMEDIES AND TERMINATION.
Section 6.1 Defaults--Definition.
Occurrence of any or all of the following shall constitute a default ("Default")
under this Agreement:
6.1.1 Any breach of this Agreement by any Party involving the payment of
money, and the continuance of such breach for a period of thirty (30) days after the non-
defaulting Party has given written notice to the defaulting Party, as specified in Section 8.1;
6.1.2 A breach of any material term of this Agreement by any Party not
involving the payment of money and failure of such Party to cure such breach within thirty
(30) days after the non-defaulting Party has given written notice to the defaulting Party;
provided, however, if such breach is not reasonably curable within such thirty (30) day
period, then such Party shall be deemed in Default only if such Party does not commence
to cure such breach within such thirty (30) day period and thereafter fails to diligently
prosecute such breach to completion;
6.1.3 The Developer's Transfer (as defined in Section 4.1), or the
occurrence of any involuntary Transfer, of the Property or any part thereof or interest
therein, or any rights or obligations of the Developer under this Agreement, in violation of
this Agreement;
6.1.4 The Developer's failure or refusal to keep in force and effect any
material permit or approval with respect to construction of the Improvements, and the
Developer's failure to cure such breach within thirty (30) calendar days after notice from
the Agency of the Developer's breach; provided, however, if such breach is not reasonably
curable within such thirty (30) day period, then the Developer shall be deemed in Default
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only if the Developer does not commence to cure such breach within such thirty (30) day
period and thereafter fails to diligently prosecute such breach to completion;
6.1.5 Filing of a petition in bankruptcy by or against any Party or
appointment of a receiver or trustee of any property of any Party, or an assignment by any
Party for the benefit of creditors, or adjudication that such Party is insolvent by a court, and
the failure of such Party to cause such petition, appointment, or assignment to be removed
or discharged within 90 days.
6.1.6 The Developer's failure to commence or complete construction of the
Improvements on the Property by the dates set forth in the Schedule of Performance
attached hereto as EXHIBIT B. The obligation set forth in this 6.1.6 shall continue and
survive the Close of Escrow and be incorporated into and made a part of the Quitclaim
Deed.
Section 6.2 Remedies in the Event of Default.
6.2.1 Remedies Prior to the Close of Escrow. In the event of a Default by
any Party prior to the Close of Escrow, the non-defaulting Party shall have the right to
terminate this Agreement provided it is not in breach of its obligation under this Agreement,
by delivering written notice thereof to the defaulting Party and to Escrow Holder, subject to
the rights of the defaulting Party to cure such Default as provided in Section 6.1. Such
Party may seek against the defaulting Party any available remedies at law or equity,
including but not limited to, the right to receive damages or to pursue an action for specific
performance.
6.2.2 Remedies for Default After the Close of Escrow. In the event of a
Default by any party after the Close of Escrow, and prior to the issuance of the Certificate
of Completion, a non-defaulting party shall be entitled to the following remedies, as
applicable.
(a) A defaulting Party shall be liable to the non-defaulting Party for
all damages, costs and losses incurred by the non-defaulting Party, and the non-defaulting
Party may seek against the defaulting Party any available remedies at law or equity,
including but not limited to the right to receive damages or to pursue an action for specific
performance; and
(b) The Agency shall have the right of reversion provided for below
in this Section 6.2.2(b) in the event the Developer fails to commence or complete
construction of the Improvements by the dates set forth in the Schedule of Performance
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attached hereto as EXHIBIT B, as such dates may be extended by the number of days of
any period of Force Majeure Delay as provided for in Section 6.7 of this Agreement. In
such event, in the exercise of its sole discretion, the Agency may terminate this Agreement
and re-enter and take possession of the Property, will all Improvements thereon, and
revest in the Agency title to the Property theretofore conveyed to the Developer (or its
successors in interest), take any and all actions necessary to commence and complete the
enforcement of its reversionary interest and in such event the Developer agrees promptly
to take all actions and to execute all documents necessary to revert title to the Property to
the Agency free and clear of all liens and encumbrances created by or with the consent of
Developer.
6.2.3 Remedies for Default After the Close of Escrow. In addition to the
provisions of Section 6.2.2, in the event of a Default by any Party after the Close of
Escrow, and prior to the issuance of a Certificate of Occupancy, a non-defaulting party
shall be entitled to the following remedies, as applicable:
A defaulting Party shall be liable to the non-defaulting Party for all damages, costs
and losses incurred by the non-defaulting Party, and the non-defaulting Party may
seek against the defaulting Party any available remedies at law or equity, including
but not limited to the right to receive damages or to pursue an action for specific
performance.
Section 6.3 Liberal Construction. The rights established in this Article are to be
interpreted in light of the fact that the Agency will convey the Property to the Developer for
development of the Improvements thereon and the sale of it to a person or family of very
low income, and not for speculation in undeveloped land or for construction of different
improvements. The Developer acknowledges that it is of the essence of this Agreement
that the Developer is obligated to complete all Improvements.
Section 6.4 No Personal Liability. No representative, agent, attorney, consultant,
or employee of the Agency shall personally be liable to the Developer or any successor in
interest of the Developer, in the event of any Default or breach by the Agency, or for any
amount which may become due to the Developer or any successor in interest, on any
obligation under the terms of this Agreement.
Section 6.5 Rights and Remedies are Cumulative. The rights and remedies of the
parties are cumulative, and the exercise by either party of one or more of such rights or
remedies shall not preclude the exercise by it, at the same time or different times, of any
other rights or remedies for the same default or any other default by the non-defaulting
Party.
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Section 6.6 Inaction Not a Waiver of Default. Any failures or delays by either
Party in asserting any of its rights and remedies as to any default shall not operate as a
waiver of any default or of any such rights or remedies, or deprive either such Party of its
rights to institute and maintain any actions or proceedings which it may deem necessary to
protect, assert or enforce any such rights or remedies. The acceptance by a Party of less
than the full amount due from the other Party shall not constitute a waiver of such Party's
right to demand and receive the full amount due, unless such Party executes a specific
accord and satisfaction.
Section 6.7 Force Majeure. Notwithstanding anything to the contrary in this
Agreement, either Party's unexcused material failure to complete the Improvements
required by such Party to be completed according to this Agreement, the Scope of
Development, and Schedule of Performance shall be a breach hereof, provided, however,
nonperformance shall be excused when performance is prevented or delayed by reason of
any of the following forces reasonably beyond the control of such party (a "Force Majeure
Delay"): (i) civil disturbance, future order claiming jurisdiction, act of the public enemy, war,
riot, sabotage, blockade, embargo, (ii) any delay or failure to perform attributable to any
strike, lockout or other labor or industrial disturbance (whether or not on the part of the
employees of either party hereto), or the unusual inability to secure customary materials,
equipment, supplies or labor through ordinary sources, but only to the extent that any such
delay referred to in this clause (ii) is an actual, industry wide condition affecting
substantially all similar works of construction in the Coachella Valley, California, area; (iii)
delay attributable to the failure of the Developer to secure plan checks, building permits,
and other governmental permits or approvals (including any failure to obtain a temporary
certificate of occupancy)within a reasonable period of time, where such delay is not due to
any fault of the Developer; or (iv) delay attributable to severe weather, lightning,
earthquake, fire, storm, hurricane, tornado, flood, washout, explosion, or any other similar
cause beyond the reasonable control of the party from whom performance is required, or
any of its contractors or other representatives. Any prevention, delay or stoppage due to
any Force Majeure Delay shall excuse the performance of the party affected for a period of
time equal to any such prevention, delay or stoppage (except the obligations of either party
to pay money to the other party or to close escrow).
ARTICLE 7 INSURANCE; INDEMNITY.
Section 7.1 Insurance.
7.1.1 The Developer shall obtain and maintain at no cost or expense to the
Agency, with a reputable and financially responsible insurance company reasonably
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acceptable to the Agency, commercial broad form general public liability insurance,
insuring against claims and liability for bodily injury, death, or property damage arising
from the construction, use, occupancy, condition, or operation of the Property, which
insurance shall provide combined single limit protection of at least $1,000,000. Such
insurance policy shall name the City and the Agency and their council members, board
members, officers, employees, consultants, independent contractors, attorneys and
servants as additional insureds.
7.1.2 Before commencement of any demolition or construction work by the
Developer on any portion of the Property owned by the Developer, the Developer shall
obtain and maintain in force until completion of such work (i) "all risk" builder's risk
insurance, including coverage for vandalism and malicious mischief, in a form and amount
and with a company reasonably acceptable to the Agency, and (ii)workers' compensation
insurance covering all persons employed by the Developer in connection with work on the
Improvements, or any portion thereof. During the construction of Improvements on any
portion of the Property by the Developer, such builder's risk insurance shall cover
improvements in place and all material and equipment at the job site furnished under
contract, but shall exclude contractors', subcontractors', and construction managers'tools
and equipment and property owned by contractors' and subcontractors' employees.
7.1.3 The Developer shall also furnish or cause to be furnished to the
Agency evidence satisfactory to the Agency that any contractor with whom it has
contracted for the performance of work on the Property or otherwise pursuant to this
Agreement carries workers' compensation insurance as required by law.
7.1.4 With respect to each policy of insurance required above, the
Developer and each of the Developer's general contractors shall furnish to the Agency an
endorsement to the insurance policy on the insurance carrier's form setting forth the
general provisions of the insurance coverage. The Developer prior to commencement of
construction of any Improvements shall furnish the required certificate.
7.1.5 All such policies required by this Section shall be nonassessable and
shall contain language to the effect that (i) the policies cannot be canceled or materially
changed except after thirty (30) days' written notice by the insurer to the Agency, and (ii)
the Agency shall not be liable for any premiums or assessments. All such insurance shall
have deductibility limits that shall be commercially reasonable.
Section 7.2 Indemnity. From and after the execution of this Agreement, the
Developer hereby agrees to indemnify, defend, protect, and hold harmless the Agency and
the City and any and all agents, employees and representatives of the Agency and the
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City, from and against all losses, liabilities, claims, damages (including foreseeable or
unforeseeable consequential damages), penalties, fines, forfeitures, costs and expenses
(including all reasonable out-of-pocket litigation costs and reasonable attorney's fees)and
demands of any nature whatsoever, related directly or indirectly to, or arising out of or in
connection with:
(i) the development of the Improvements on the Property or the use, ownership,
management, occupancy, or possession of the Property,
(ii) any breach or Default by the Developer hereunder, or
(iii) any of the Developer's activities on the Property (or the activities of the
Developer's agents, employees, lessees, representatives, licensees, guests, invitees,
contractors, subcontractors, or independent contractors on the Property), regardless of
whether such losses and liabilities shall accrue or are discovered before or after
termination or expiration of this Agreement, except to the extent such losses or liabilities
are caused solely and exclusively by the gross negligence or intentionally wrongful acts of
the Agency. The Developer shall defend, at its expense, including attorneys' fees, the
Agency and the City, and the Agency's and the City's council members, board members,
officers, agents, attorneys, consultants, independent contractors, servants and employees
in any legal action based upon such alleged acts or omissions. The Agency and the City
may in their discretion participate in the defense of any such legal action.
ARTICLE 8 GENERAL PROVISIONS.
Section 8.1 Notices. All notices and demands shall be given in writing by certified
mail, postage prepaid, and return receipt requested, or by personal delivery. Notices shall
be considered given upon the earlier of (a) personal delivery, or (b) one business day
following deposit or delivery with a nationally recognized overnight courier delivery
charges prepaid, or(c) three (3) business days following after deposit or delivery shown on
the return receipt in the United States mail, postage prepaid, certified or registered, return
receipt requested. A copy of all notices delivered prior to the Close of Escrow shall be
sent to Escrow Holder. Notices shall be addressed as provided below for the respective
Party; provided that if any Party gives notice in writing of a change of name or address,
notices to such Party shall thereafter be given as demanded in that notice:
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The Agency: Mr. Carlos L. Ortega, Executive Director
Palm Desert Redevelopment Agency
73-510 Fred Waring Drive
Palm Desert, California 92260
(Telephone: 760-346-0611)
(Facsimile: 760-341-6372)
with a copy to: Richards, Watson & Gershon
A Professional Corporation
355 S. Grand Avenue, 40th Floor
Los Angeles, California 90071-3101
Attention: William L. Strausz
(Telephone: 213-626-8484)
(Facsimile: 213-626-0078)
The Developer: Habitat for Humanity Coachella Valley, Inc.
P.O. Box 11738
Palm Desert, CA 92255
(Telephone: (760) 342-2243)
(Facsimile: (760) 775-9053)
Section 8.2 Construction. The Parties agree that each Party and its counsel have
reviewed and revised this Agreement and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting Party shall not apply in the
interpretation of this Agreement or any amendments or exhibits thereto. This Agreement
shall be construed as a whole according to its fair language and common meaning to
achieve the objectives and purposes of the Parties.
Section 8.3 Interpretation. In this Agreement the neuter gender includes the
feminine and masculine, and singular number includes the plural, and the words "person"
and "party" include corporation, partnership, firm, trust, or association where ever the
context so requires.
Section 8.4 Time of the Essence. Time is of the essence of this Agreement.
Section 8.5 Warranty Against Payment of Consideration for Agreement. The
Developer warrants that it has not paid or given, and will not pay or give, to any third
person, any money or other consideration for obtaining this Agreement, other than normal
costs of conducting business and costs of professional services such as architects,
engineers and attorneys.
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Section 8.6 Attorneys' Fees. If any Party brings an action to enforce the terms
hereof or declare its rights hereunder, the prevailing Party in any such action shall be
entitled to its reasonable attorneys' fees to be paid by the losing Party as fixed by the
court. If either the Agency or the City, without fault, is made a Party to any litigation
instituted by or against the Developer, then the Developer shall defend the City and/or the
Agency against and save it harmless from all costs and expenses including reasonable
attorney's fees incurred in connection with such litigation. If the Developer, without fault, is
made a Party to any litigation instituted by or against the Agency or the City, then the
Agency shall defend the Developer against and save it harmless from all costs and
expenses including reasonable attorney's fees incurred in connection with such litigation.
Section 8.7 Entire Agreement, Waivers and Amendments. The Agreement may be
executed in duplicate originals. Escrow Holder may accept escrow instructions in
counterparts. This Agreement, together with all attachments and exhibits hereto, and all
agreements executed pursuant hereto, constitutes the entire understanding and
agreement of the Parties. This Agreement integrates all of the terms and conditions
mentioned herein or incidental hereto, and supersedes all negotiations or previous
agreements between the Parties with respect to the subject matter hereof. No subsequent
agreement, representation or promise made by either Party hereto, or by or to any
employee, officer, agent or representative of either Party, shall be of any effect unless it is
in writing and executed by the Party to be bound thereby. No person is authorized to
make, and by execution hereof the Developer and the Agency acknowledge that no person
has made, any representation, warranty, guaranty or promise except as set forth herein;
and no agreement, statement, representation or promise made by any such person which
is not contained herein shall be valid or binding on the Developer or the Agency.
Section 8.8 Severability. Each and every provision of this Agreement is, and shall
be construed to be, a separate and independent covenant and agreement. If any term or
provision of this Agreement or the application thereof shall to any extent be held to be
invalid or unenforceable, the remainder of this Agreement, or the application of such term
or provision to circumstances other than those to which it is invalid or unenforceable, shall
not be affected hereby, and each term and provision of this Agreement shall be valid and
shall be enforced to the extent permitted by law.
Section 8.9 Headings. All section headings and subheadings are inserted for
convenience only and shall have no effect on the construction or interpretation of this
Agreement. The references in this agreement to "Section" shall refer to the sections of this
Agreement unless it is clear from the context that another meaning is intended.
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Section 8.10 No Third Party Beneficiaries other than the City. The City shall be a
named third party beneficiary of this Agreement. This Agreement is made and entered into
for the sole protection and benefit of the Parties, the City and their successors and
assigns. No other person shall have any right of action based upon any provision of this
Agreement.
Section 8.11 Governing Law; Jurisdiction; Service of Process. California law shall
govern this Agreement and the rights of the Parties. The Parties consent to the exclusive
jurisdiction of the California Superior Court for the County of Riverside. If any legal action
is commenced by the Developer against the Agency, or by Agency against the Developer,
service of process on the Agency shall be made by personal service upon the executive
director or secretary of the Agency, or in such other manner as may be provided by law. If
any legal action is commenced by Agency against the Developer, service of process on
the Developer shall be made by personal service on the President of the Developer, or in
such other manner as may be provided by law. The Developer agrees, for the benefit of
the Agency, that it shall designate an agent for service of process in the State of California
in the manner prescribed by law, and if it fails to do so, the Secretary of State of the State
of California is designated as agent for the Developer, with full authority to receive such
service of process on its behalf, which designation and authorization shall survive the
Close of Escrow and be irrevocable.
Section 8.12 Survival. The provisions hereof shall not terminate but rather shall
survive any conveyance hereunder and the delivery of all consideration.
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IN WITNESS WHEREOF, the Parties hereto have entered into this
Agreement as of the day and year first above written.
Agency: Developer:
PALM DESERT REDEVELOPMENT AGENCY, a HABITAT FOR HUMANITY OF COACHELLA
public body, corporate and politic VALLEY, INC., a California non-profit,
public benefit corporation
By:
Jim Ferguson, Chairman By:
President
Attest: By:
Secretary
Sheila R. Gilligan, Secretary
APPROVED AS TO FORM:
RICHARDS, WATSON & GERSHON,
Special Counsel to the Palm Desert
Redevelopment Agency
Agency Counsel
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LIST OF EXHIBITS
Exhibit A. -- Legal Description
Exhibit B. -- Schedule of Performance
Exhibit C. -- Scope of Development
Exhibit D. -- Quitclaim Deed
Exhibit E. -- Unit Regulatory and Lien Agreement
Exhibit F. -- Long Form Deed of Trust and Assignment of Rents
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EXHIBIT A.
LEGAL DESCRIPTION
**************************************TO BE DETERMINED *************************************
APN 625-061-025
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EXHIBIT B
SCHEDULE OF PERFORMANCE
1. Agency's Publication of Notice of Public Hearing December 19, 2005
December 29, 2005
& January 5, 2006
2. Approval of the DDA by Agency Board January 12, 2006
3. Execution of the DDA by the Developer, and tender to the
Agency February 28, 2006
4 Developer's approval or disapproval of Preliminary Title
Report March 15, 2006
5 Developer's approval or disapproval of the physical
condition of the Property 30 days from escrow
opening
6 Close of Escrow 60 days from
opening
7 Commencement of Construction of the Improvements May 1, 2006
8 Completion of construction of the Improvements November 1, 2006
9. Transfer of Title to eligible low-income Purchaser November 30, 2009
NOTE: Schedule may be amended with written approval of the Agency's Executive Director.
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EXHIBIT C
SCOPE OF DEVELOPMENT
A. Development of a single-family residence of approximately 1,280 square feet with
four bedrooms, two baths, two-car attached garage and landscaping.
B. Developer shall endeavor to install in ADDITION to the minimum energy efficiency
standards set forth in the current edition of Title 24 Calif. Administrative Code (CAC) as
many of the following energy efficiency features or higher as described below:
1) Architectural design for energy conservation shall incorporate structural overhangs, or
architectural projections, for shading of all eastern, southern and western facing glazing.
Where shading by architectural design is unfeasible in these locations, glazing shall
consist of the following:
a) Thermal break design window and/or door frames.
b) U factor of .40 or less (NFRC tested)
c) SHGC value of 0.35 or less (NFRC tested)
2) All vented attics shall have a radiant barrier roof sheathing installed per Title 24 CAC
2005 edition.
3) All flat or low-sloped exterior roof surfaces shall have a Cool Roof reflective coating.
4) HVAC equipment minimum standards:
a) Fuel type: All heating shall be by natural gas.
b) Furnace efficiency to be a minimum AFUE rating of 80%
c) SEER: 14.0 minimum
d) EER: 11.5 minimum
e) HSPF: 8.0 minimum.
f) Duct insulation shall be R-6 or better.
g) All ducts shall be pressure tested for leakage conforming to current standards
in Title 24 CAC 2005 edition.
5) Energy Star Appliances. If provided by the developer, all the following appliances shall
be Energy Star rated:
a) Dishwashers
b) Refrigerators
c) Clothes Washers
d) Clothes Dryers (Must be Natural Gas only)
e) Ceiling fans
f) Exhaust fans
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6) Lighting: Lighting in all laundry rooms, utility rooms, mechanical rooms, closets and
garages shall be fluorescent controlled by a manual - on, automatic- off occupancy
sensor. All common area landscape lighting shall be fluorescent.
7) All common area public pools and spas shall have solar water heating conforming to
current Plumbing Code and Solar Energy Code standards. Natural gas heaters for the
common area public pools and spas are permitted with a AFUE of 92% minimum.
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EXHIBIT D.
FORM OF QUITCLAIM DEED
Recording Requested by:
Palm Desert Redevelopment Agency
And when recorded return to
and mail tax statements to:
Assessor's Parcel Map No.:
Exempt from Recording Fees Pursuant to G.C. 6103
QUITCLAIM DEED
The undersigned grantor(s) declare(s):
Documentary transfer tax is $
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
PALM DESERT REDEVELOPMENT AGENCY, a public body, corporate and politic
("Grantor")
hereby QUITCLAIMS, RELEASES AND REMISES to
HABITAT FOR HUMANITY OF COACHELLA VALLEY, INC., a California non-
profit, public benefit corporation ("Grantee")
the following described real property (the "Property") located in the City of Palm Desert,
County of Riverside, State of California:
******************************** TO BE DETERMINED *******************************
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APN 625-061-025
SUBJECT TO, all easements, covenants, conditions, restrictions, and rights of way of
record.
1. This Quitclaim of the Property is subject to the Redevelopment
Plan for Project Area No. 1 of the Palm Desert Redevelopment Agency and pursuant to
a Disposition and Development Agreement (the "Agreement") entered into by and
between Grantor and Grantee dated , 2006, the terms of which are
incorporated herein by reference. A copy of the Agreement is available for public
inspection at the offices of the Grantor, 73-510 Fred Waring Drive, Palm Desert,
California 92260. The Property is conveyed further subject to all easements, rights of
way, covenants, conditions, restrictions, reservations and all other matters of record.
2. The Grantee covenants by and for itself, its representatives, its
successors and assigns and every successor in interest to the Property or any part
thereof, that during construction of improvements and thereafter the Grantee shall not
use or permit the use of the Property in violation of the Redevelopment Plan for Project
Area No. 4, as adopted by the City of Palm Desert by its Ordinance No. 724 of the City
of Palm Desert adopted July 19, 1993. The Grantee further covenants and agrees for
itself, and its successors and its assigns, that for a period of Forty-Five (45) years after
the date of recordation of this Deed, the Grantee, such successors, and such
assignees shall use the Property and every part thereof only for only for the
construction of the Improvements (as defined in the Agreement) thereon and use
thereof for which the Improvements are designed, and any other uses expressly
permitted by the Agreement. The Grantee further covenants and agrees that upon
completion of the any Improvements described in the Agreement, for a period of Forty-
Five (45) years after the date of recordation of this Deed, the Grantee shall maintain
such Improvements (including landscaping) in good condition and repair.
3. By acceptance hereof, Grantee agrees, for itself, its successors
and assigns, to refrain from restricting the rental, sale or lease of the Property on the
basis of race, color, creed, religion, ancestry, sex, marital status, national origin or age
of any person in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Property, nor shall the Grantee itself or any persons claiming under or
through it 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 Property. The foregoing
covenants shall run with the land.
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All deeds, leases or contracts entered into with respect to the Property
shall contain or be subject to substantially the following nondiscrimination or
nonsegregation clauses:
(a) In deeds: "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, national origin, sex, marital status, age or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed,
nor shall the grantee himself or herself, 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 land herein conveyed. The foregoing
covenants shall run with the land."
(b) In leases: "The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators and assigns, and all persons
claiming under or through him or her, and this lease is made and accepted upon and
subject to the following conditions: That there be no discrimination against or
segregation of any person or group of persons, on account of age, race, color, creed,
religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing,
transferring, use or occupancy, tenure or enjoyment of the land herein leased nor shall
the lessee himself or herself, 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,
sublessees, subtenants or vendees in the land herein leased."
(c) In contracts: "There shall be no discrimination against or
segregation of, any person, or group of persons on account of race, color, creed,
religion, age, national origin, sex, marital status or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the land, nor shall the
transferee himself or herself 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 of the land."
The foregoing shall be a covenant running with the land for the benefit of, and as a
burden upon the property described herein.
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4. As provided in and subject to Sections 6.1 and 6.2 of the
Agreement, Grantee agrees and covenants that if construction of the Improvements is
not commenced by and completed by , then
Grantor shall have the right at its option to re-enter and take possession of the Property
hereby conveyed, with all improvements thereon and to terminate and revest in Grantor
the Property hereby conveyed to Grantee (or its successors in interest). Upon
Grantee's timely completion of the Improvements and conveyance of the Property to a
person or family of very low income as required by the Agreement, Grantor shall
release and convey its reversionary interest and right of re-entry to Grantee (or its
successors in interest).
5. All covenants contained in this Quitclaim Deed shall run with the
land and shall be binding for the benefit of Grantor and its successors and assigns and
such covenants shall run in favor of the Grantor and for the entire period during which
the covenants shall be in force and effect, without regard to whether the Grantor is or
remains an owner of any land or interest therein to which such covenants relate. The
Grantor, in the event of any breach of any such covenants, shall have the right to
exercise all of the rights and remedies provided herein or otherwise available, and to
maintain any actions at law or suits in equity or other property proceedings to enforce
the curing of such breach. The covenants contained in this Quitclaim Deed shall be for
the benefit of and shall be enforceable only by the Grantor and its successors and
assigns.
IN WITNESS WHEREOF, the undersigned has executed this Quitclaim Deed as of the
date set forth below.
Dated:
PALM DESERT REDEVELOPMENT AGENCY, a
public body, corporate and politic
By:
Jim Ferguson, Chairman
Attest:
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Sheila R. Gilligan, Secretary
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State of California }
}
County of }
On , 200_, 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/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)
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EXHIBIT E
UNIT REGULATORY AND LIEN AGREEMENT
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EXHIBIT F
LONG FORM DEED OF TRUST AND ASSIGNMENT OF RENTS
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DRAFT PENDING F,EVISION BY CITY ATTORNEY
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Palm Desert Redevelopment Agency
73-510 Fred Waring Drive
Palm Desert, California 92260
Attention: Housing Dept.
EXEMPT FROM RECORDING FEES PURSUANT TO G.C. 6103
UNIT REGULATORY AND LIEN AGREEMENT
THIS UNIT REGULATORY AGREEMENT (the "Agreement") including
DECLARATIONS OF CONDITIONS, COVENANTS AND RESTRICTIONS is entered into this
day of , 2006, by and between the PALM DESERT REDEVELOPMENT
AGENCY, a public body, corporate and politic(the"Agency"),and HABITAT FOR HUMANITY OF
COACHELLA VALLEY, INC., a California nonprofit corporation (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 legal description,of which is
set forth in Section 1(b) of this Agreement.
B. The Agency and the Owner are parties to that certain Disposition and Development
Agreement dated (the 'DDA"). Pursuant to the DDA, the Owner has
agreed to construct a residential dwelling unit on the Unit, and the Agency has agreed to donate
the Unit to the Owner.
C. Pursuant to the DDA,the Owner is required to restrict the sale of the Unit to persons
or families of very low and low income ('Qualified Persons").
D. The"Owner"shall, at the time Construction is completed, as described in Exhibit B
of the DDA,is required to transfer all named and recorded instruments to any successor who will
assume as "Owner" all conditions contained therein (and will conform to affordability).
E. It is the desire of the Agency and the Owner to enter into this Declaration for the
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DRAFT PENDING REVISION BY CITY ATTORNEY
creation of affordable housing within the Project Area.
NOW, THEREFORE, the parties agree as follows:
1. Fundamental Provisions. The Following shall serve as the basis terms of
this Agreement:
(a) Residential Dwelling: The Owner is to construct a residential dwelling
unit on the property as more particularly described in the DDA.
(b) Value of Property: The Agency's interest will be secured by a
Promissory Note with a Second Deed of Trust in the Amount of$20,000.00.
2. Term of Agreement. This Agreement shall become effective upon recordation
hereof(the"Term"), and shall continue from such date through the date that is 45 years after the
date this instrument is recorded in the Official Records of Riverside County, California (as
described by Section 18 herein).
3. 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 if the household does not contain four (4) persons in the case of a three-
bedroom unit,or if the household does not contain five(5) persons in the case of a four-bedroom
unit.
(b) Affordable Housing Cost. For the purposes hereof, the term
"Affordable Housing Cost" has the following meaning:
(i) For a Very-Low Income Household, housing cost will be
determined pursuant to California Health and Safety Code Section 50052.5 for the number of
persons in each family appropriate for the Unit in question.
(ii) Fora Low-Income Household, housing cost will be determined
pursuant to California Health and Safety Code Section 50052.5 for the number of persons in each
family appropriate for the Unit in question.
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DRAFT PENDING REVISION BY CITY ATTORNEY
(iii) For a Moderate-Income Household housing cost will be
determined pursuant to California Health and Safety Code Section 50052.5 for the number of
persons in each family appropriate for the Unit in question.
For the purposes hereof,the term"housing cost"shall have the meaning ascribed to such term in
25 California Code of Regulations Section 6920, as amended.
(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. The Agency may limit the occupancy and bedroom sizes as may be necessary
from time to time.
(e) Escrow and Title Costs are to include only those fees charged by an
escrow agent&title insurance company solely for the closing costs of escrow. These are not to
include loan fees, refinancing fees, broker commissions, prepaid items, homeowner's dues, or
other fees not directly related to the transfer of ownership.
(g) Unit means the real property descried in attached Exhibit"A"and may
include vacant land and single-family dwellings.
(h) Owner means both the party identified as'Owner'in first paragraph of
this Agreement, and any successor in interest of such Owner with respect to the Property.
4. Restriction on Transfer.
(a) The Owner and any Successors,shall not sell,convey,transfer,lease,
sublease, assign, encumber, mortgage, refinance, 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. (Comment[COMMENTI]:
(b) Any violation or breach of the provisions hereof is prohibited and any
Unit sale or other transfer of interest enumerated in Section 4 (a) above, in whole or in part, or
transfer in violation hereof shall be null,void and unenforceable at the option of the Agency and
shall additionally, at the option of the Agency, result in an acceleration of the Note requiring the
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DRAFT PENDING REVISION BY CITY ATTORNEY
Owner to immediately repay in full the Note if such transfer is made prior to the expiration of the
Term of this Agreement. Comment[COMMENT2]: •
5. Covenant to Maintain Affordability.
(a) The Unit conveys the Owner and any Successors, 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 housing requirements of the Community
Redevelopment Law(California Health and Safety Code,Section 33000,et seq).The Owner and
any Successors,shall sell, convey,assign, or transfer ownership or occupancy of the Unit only to
persons who cannot obtain comparable housing at affordable costs on the open market as
provided in Health and Safety Code Section 33334.2(e)(8),as amended. To this end,the Owner
and any Successors,agrees that during the Term the Unit shall, except as provided in Sections 6,
9 and 12 hereof, remain available only at an Affordable Housing Cost and shall only be used by
persons or families whose incomes do not exceed either a Very Low,Low or Moderate Income. In Comment[COMMENT]]: •
addition, if,without the Agency's consent,the Owner fails to occupy the Unit as the Owner's sole
residence for a period of 90 calendar days, cumulatively, in any calendar year, then the Owner
shall be in breach of this Agreement. Comment[COMMENT4]: _
(b) Subject to the provisions of Section 12 hereof,if after the expiration of J
the entire Term the Owner has not either (i) sold, conveyed, transferred, or assigned the Unit
except to a Qualified Person, 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 principal balance outstanding and any
accrued interest..
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 whose incomes do not
exceed either a Low or Moderate Income, on the condition that (i)the Owner complies with the
requirements of Sections 10 and 11 hereof, (ii) the purchaser covenants to occupy the Unit as
such party's sole residence, and (iii)the purchase price does not exceed the maximum permitted
resale price set forth in Section 12 hereof. Any permitted transferee shall acquire the Unit subject
to the terms and conditions hereof or a new unit regulatory at Agency's discretion. Any permitted
transferee shall execute in recordable form an assumption agreement in form and content t[COMMENT5]:
Commen
satisfactory to the Agency's Executive Director.
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DRAFT PENDING REVISION BY CITY ATTORNEY
(b) Intra-Family Conveyances. The following transfers of title shall not be
breaches of this instrument: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 children when the children's income does not exceed a low or moderate income at the time of
transfer. A transfer to children of the Owner where the income of such children exceeds the
maximum household income permitted hereunder shall give rise to the option in favor of the
Agency to purchase the Unit described in Section 8; provided, however, such option shall be
exercised by the Agency within 60 days after receipt by the Agency of written notice of such
transfer, and the purchase price shall be the amount set forth in Section 8(e). (Comment[COMMENT6]:
Comment[COMMENT7]:
(c) First Trust Deed-Purchase. The Owner may encumber the Unit with
a first position deed of trust or mortgage securing a purchase money loan. Comment[COMMENTs]:
(d) Refinancing of First Trust Deed. The Owner may refinance any first
trust deed or mortgage encumbering the Unit provided that prior written approval of the
transaction is obtained from the Agency according to the notification and approval process
designated in Section 10 below. Approval will be subject to the limitations that the principal
amount, interest,terms and conditions are reasonable at the time the refinancing takes place(in
the opinion of the Agency), and the principal amount thereof does not exceed the original
principal amount of the loan secured by the first trust deed or mortgage being refinanced (plus Comment[COMMENT9]:
reasonable loan fees and costs)and together with the second Trust Deed doesn't over-encumber
the property. Failure to obtain prior Agency approval to refinance any first trust deed or mortgage
encumbering the Unit shall be deemed a violation or breach of terms of this Agreement,subject to
the provisions of Section 4(b) and deemed a default, subject to the provisions of Section 16.
(e) Junior Trust Deeds. Any loan to be secured by a junior trust deed or
mortgage encumbering the Unit shall require the prior written approval of the Agency according to
the notification and approval process designated in Section 10 below. The Agency shall consider
in good faith whether to permit a loan of the aforementioned type,subject to the restrictions that
the proceeds of said loan are to be used to pay for repairs or the construction of improvements to
the Unit, on the following terms and conditions: (i) the principal amount of such loan shall not
exceed the cost of the repairs or the improvements(plus loan fees and loan costs), (ii)the loan is
originated by a bank, savings and loan association, or other institutional lender, (iii)the interest
rate and payment terms thereon are reasonable (in the Agency's reasonable opinion), (iv) the
Owner shall be capable of meeting the monthly payments provided by such loan (in the Agency's
reasonable opinion), and (v)the Unit is not over-encumbered. Construction of improvements is
not to include any items that are construed to be of a luxury nature, i.e., in ground pools or spas,
interior or exterior decorative items,or improvements that the reasonable useful life has expired.
Failure to obtain prior Agency approval for any loan to be secured by a junior trust deed or
mortgage encumbering the Unit shall be deemed a violation or breach of the terms of this
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DRAFT PENDING REVISION BY CITY ATTORNEY
Agreement, subject to the provisions of Section 4 (b) and deemed a default, subject to the
provisions of Section 16.
7. Subordination to First Trust Deed Encumbrances.
(a) The Agency recognizes that immediately prior to the recordation
hereof the Owner is or may be recording a deed of trust that shall be superior to this Agreement Comment[COMMENT10]:
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. 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 superior to the lien hereof,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 as determined
by the senior lien holder, within 60 days after the date the notice is sent to the Agency.
On recording any such first trust deed as above,the borrower, at the borrower's expense,
shall cause to be recorded in the Office of the Riverside county Recorder a written request for a
special notice of default in favor of the Agency (independent of the notice required by part(i) of
the preceding paragraph). Comment[COMMENT11]:
(b) The Agency further agrees that,in the event of a resale of the Unit or a
refinancing of a deed of trust that was superior to the lien hereof,the Agency agrees to execute a
subordination agreement, in form and substance acceptable to the Agency, subordinating this
Agreement and the Deed of Trust to any first deed of trust or mortgage, in favor of any bank,
savings and loan association, or other institutional lender which makes a loan to finance or
refinance the loan for the purchase of the Unit,securing 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;
(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 pre-approved in writing in advance of the
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DRAFT PENDING REVISION BY CITY ATTORNEY
subordination by the Agency;
(iii) The borrower shall deliver to the Agency true and accurate copies
of the loan agreement, proposed promissory note,deed of trust,and a written statement from the
borrower certifying that such documents are true and accurate copies of the loan documents
which the borrower intends to execute in connection with the loan;
(iv) On recording the new first trust deed, the borrower, at the
borrower's expense, causes to be recorded in the Office of the Riverside County Recorder a
written request for a special notice of default in favor of the Agency;
(v)The borrower shall deliver to the Agency,at the owner's expense,a
copy of Insurance Coverage each year in favor of the Palm Desert Redevelopment Agency as a
loss payee: and
(vi)The Agency may condition any such subordination upon its receipt
of assurances from a reputable title company that this Agreement is not being subordinated to any
liens or encumbrances other than such new loan as the result of such subordination.
If the Agency,at its sole election,advances any sums to any senior lien holders that are due and
payable by the Owner to the senior lien holder, such amounts shall immediately be due and
payable by the Owner to the Agency together with interest thereon at the maximum legal rate
permitted under California usury laws.
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8. Agency Option to Purchase.
(a) Option. In order to maintain and insure that the Unit shall remain
affordable to and only occupied by Persons or Families of Very Low, Low or Moderate Income,
the Agency is hereby granted an option,throughout the Term hereof,to purchase such Unit if the
Owner desires to transfer the Unit, or to find another Person or Family of Very Low, Low or
Moderate Income to purchase the Unit. The option shall be exercised in writing by the Agency,if
at all, within 60 days after the Agency's receipt of the written notice (the "Notice of Proposed
Sale") of the Owner's desire to transfer the Unit as provided in Section 9(a), below. 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.With Agency approval,the Owner may enter into an agreement
to sell the Unit to a Qualified Person at a price that does not exceed the maximum price set forth
in Section 11. Provided the Agency approves the qualified person that the owner presents, then
the Agency shall not then exercise the option or find another buyer. If the Agency exercises the
Option, then the Agency shall promptly open escrow thereafter 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 Comment[COMMENT12]:
sellers in Riverside County.
(b) Agency's Failure to Close Following Exercise of the Option. If the
Agency exercises the option to purchase but,due to the Agency's sole fault,the Agency does not
close escrow within 90 days after the date the Agency first received the Owner's Notice of
Proposed Sale,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,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.
(c) Terms of Purchase. If the Agency exercises the option,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 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. Comment[COMMENT13]:
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DRAFT PENDING REVISION BY CITY ATTORNEY
(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 Agency exercises its option to
purchase.
(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 (defined in Section 3 (e)) actually Comment[COMMENT14]:
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), below, assuming that the Agency, as purchaser, is of the same income category as was the
seller at the time the seller purchased the Unit; or
(iii) the fair market value of the Unit, as determined by an appraiser
approved by the Agency.
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DRAFT PENDING REVISION BY CITY ATTORNEY
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 a notice(the"Notice of Proposed Sale")setting forth the Owner's intention
to sell the Unit,and a property information form to be prepared by the Agency. Such Notice shall
contain information about the Owner's original purchase price of the Unit. Agency or its designee
shall have sixty (60)days from the time following the receipt by the Agency or its designee of the
Notice to find a new buyer for the Unit being sold, or sixty (60) days to exercise the Agency's
option to purchase described in Section 8; provided, however, the Agency or its designee may Comment[COMMENT15]:
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. 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.
(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,then the provisions hereof shall continue to encumber
the Unit, and the Agency 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 affordability covenants of Forty-Five(45)years,and 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 the Agency's fee interest. Comment[COMMENT16]:
(c) If,after expiration of the sixty(60)day period,Agency or its designee
has failed to procure an eligible and qualified buyer and the Agency has not exercised its option,
then the Owner shall then be free to seek a buyer for the Unit without any limitation on resale
price or income category 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,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.
(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.
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(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 Comment[COMMENT17]:
similar agreement, whichever is earliest, that the title to the Unit will be restricted in the manner
described herein.
(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 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 with such financial, credit, and other information on such
prospective purchaser as required by the Agency, including the following:
(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)Verification purchaser is a First Time Home Buyer.
(v)Amount of down payment.
(vi)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.
(vii) Closing date.
(viii) Aggregate annual income of the purchaser's household.
(ix)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
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DRAFT PENDING REVISION BY CITY ATTORNEY
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.
(x) 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 deems appropriate to implement this agreement.
(xi) A written statement signed by the proposed purchaser that the
Unit will be occupied by the purchaser of such Unit and used as his or her primary 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 the Agency at least 15 days prior to the close of escrow for the
Unit.
(h) The Agency shall have 30 days to review the information (unless the
Agency received the certification from prospective purchaser's lender, in which case the Agency
shall have 15 days to review the information). If the Agency fails to approve the purchaser within
such period of time,then the purchaser shall be deemed approved by the Agency. The Agency
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 instrument are being satisfied. If the Agency receives all such prospective
purchaser information requested by the Agency, the Agency 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 Person or Family of Very Low, Low or Moderate
Income. The Agency hereby designates the Executive Director of the Agency to make the Comment[COMMENT18]:
evaluations, reviews and determinations set forth in this Section.
(i) 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 seventy-five(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), 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), prior written approval of the Agency is
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DRAFT PENDING REVISION BY CITY ATTORNEY
required. To request approval, at least 30 days prior to the recordation of the intended deed of
trust or mortgage, the Owner shall submit to the Agency 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), whichever applies.
(f) Other written documentation reasonably requested by the Agency to
verify the information set forth herein.
The Agency shall have fifteen (15 ) working days, after all requested information has been
submitted,to review the documentation. If the Agency fails to affirmatively approve or disapprove Comment[COMMENT19]:
the refinancing within such period of time,then the purchaser shall be deemed approved by the
Agency. Failure to obtain prior Agency approval for the transactions covered by this Section 10
shall be deemed a violation or breach of the terms of this Agreement,subject to the provisions of
Section 3(b) and deemed a default, subject to the provisions of Section 16.
11. Restriction on Resale Price. Except as permitted by Sections 8 and 9, 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 3 (b)) for the Comment[COMMENT2o]: •
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
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
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DRAFT PENDING REVISION BY CITY ATTORNEY
customary closing costs and fees as defined by Section 3 (e). plus Comment[COMMENT21]:
(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,the purchase price shall be further
increased by 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. Comment[COMMENT22]:
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,then (i) all interest accrued
from the date of the seller's acquisition of the Unit through the closing date of the resale to the
new Qualified Person shall be paid at close of escrow, (ii)interest shall then accrue from and after Comment[COMMENT23]:
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(A)the purchase price paid by the purchaser exceeds(B)the amount
that would have been the maximum resale price to another purchaser at the same income
category as was the seller's at the time of the seller's original acquisition of the Unit. (Thus,if the
seller and the purchaser are of the same income category, then none of the principal would be
due, but if the purchaser is of a higher income category, then it is possible that some of the
principal may be due because the maximum resale price calculated pursuant to Section 11(a)
may be higher if the purchaser is of a higher income category than was the seller at the time of
the seller's acquisition of the Unit.) At the end of the Forty-Five (45) year 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 Comment[COMMENT24]: •
have the option of requesting information not more than once annually, to implement this
agreement.
14. Nondiscrimination Covenants. By the Owner's acceptance hereof,the Owner
and Successors 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, Comment[COMMENT25]:
national origin or age of any person. All such deeds and leases entered into with respect to the
Unit shall contain or be subject to substantially the following nondiscrimination or nonsegregation
clauses:
(a) In deeds: "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
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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."
(b) In leases: "The lessee herein covenants by and for himself or herself,
his or her heirs,executors,administrators, and assigns,and all persons claiming under or through
him or her, and this lease is made and accepted upon and subject to the following conditions:
'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 leasing,subleasing,transferring, use, occupancy,tenure,or enjoyment of
the premises herein leased nor shall the lessee himself, 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, sublessees, subtenants, or vendees in the premises herein leased.'" Comment[COMMENT26]:
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 or Successors to rent or lease the Unit without the Agency's prior written
consent. Comment[COMMENT27]: ...
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
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.
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.
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15
DRAFT PENDING REVISION BY CITY ATTORNEY
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: Habitat for Humanity
P.O. Box 11738
Palm Desert, CA 92255
Attention: Cindy Pieper
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. Subject to Section 6 hereof,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; subject to Section 6 hereof, 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 and assume all restrictions and conveyances as recorded
on all said instruments secured by the Deed of Trust. 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. Administration. The Agency may administer the terms hereof or may, from
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16
DRAFT PENDING REVISION BY CITY ATTORNEY
time to time assign its rights hereunder or designate another entity, person, licensed real estate
broker or organization to administer the terms hereof.
20. 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.
21. 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.
22. Captions and Section Headings. Captions and section headings used herein
are for convenience only and shall not be used in construing this instrument.
23. 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 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.
24. 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.
25. Attorneys' 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.
26. 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,or to subject the Unit
to additional covenants, easements or other restrictions.
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DRAFT PENDING REVISION BY CITY ATTORNEY
27. Successors and Assigns. This Agreement 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.
28. Foreclosure of Superior Mortgage. In the event of the foreclosure of a deed
of trust or mortgage superior to the lien hereof,or the conveyance by deed in lieu of foreclosure of
the Unit to a bank, savings and loan, or other institutional lender holding a deed of trust or
mortgage superior to the lien hereof,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 as
determined by the senior lien holder, within 60 days after the date the notice is sent to the
Agency. Comment[COMMENT28]:
IN WITNESS WHEREOF,the parties hereto have executed this Agreement as of the day
and year first above written.
"AGENCY" "OWNER"
PALM DESERT REDEVELOPMENT AGENCY, HABITAT FOR HUMANITY
a public body, corporate and politic
By: — By:
Attest :
Secretary
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18
DRAFT PENDING REVISION BY CITY ATTORNEY
State of California }
}
County of }
On , 2006, 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/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)
W'Agenda Items\2006-Jan 12'Pub Hrg El Cortez Lot'Exh E Unit Reg Agm doc 121905
DRAFT PENDING REVISION BY CITY ATTORNEY
State of California }
}
County of }
On , 200_, 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/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)
W'Agenda Items\2006-Jan 12'Pub Hrg El Cortez Lot'Exh E Unit Reg Agm doc 121905
DRAFT PENDING REVISION BY CITY ATTORNEY
EXHIBIT A
LEGAL DESCRIPTION
That certain real property situated in the City of Palm Desert, County of Riverside, State of
California, described as follows:
.............................. TO BE DETERMINED ..............................
APN: 625-061-025
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RECORDING REQUESTED BY
Palm Desert Redevelopment Agency
AND WHEN RECORDED MAIL TO
Palm Desert Redevelopment Agency
73-510 Fred Waring Drive
Palm Desert, California 92260
Attn: Housing Dept.
No Recording Fee Required - Government Code Section 6103
SPACE ABOVE THIS LINE FOR RECORDER'S USE
LONG FORM DEED OF TRUST AND ASSIGNMENT OF RENTS
A. P. N. 6625-061-025
This Deed of Trust, made this day of , 2006, between
, herein called Trustor, whose address is
, Palm Desert, California in favor of First
American Title Insurance Company, as Trustee, for the benefit of the PALM DESERT
REDEVELOPMENT AGENCY, a public body, corporate and politic, herein called
Beneficiary,
Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO
TRUSTEE IN TRUST, WITH POWER OF SALE, that property (the"Property") in Riverside
County, California, described as:
**************************** TO BE DETERMINED ****************************
TOGETHER WITH the rents, issues and profits thereof, SUBJECT, HOWEVER, to the
right, power and authority hereinafter given to and conferred upon Beneficiary to collect
and supply such rents, issues and profits.
For the Purpose of Securing:
1_ Performance of each agreement of Trustor herein contained. 2. Payment of the
indebtedness evidenced by one promissory note of even date herewith, and any
extension or renewal thereof, in the principal sum of $20,000.00 executed by
Trustor in favor of Beneficiary or order. 3. The rights of the Beneficiary set forth in
that certain Unit Regulatory and Lien Agreement (the "Unit Regulatory and Lien
Agreement") from the original Trustor to Beneficiary dated and
recorded as Instrument Number
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To Protect the Security of This Deed of Trust, Trustor Agrees:
(1) To keep said Property in good condition and repair; not to remove or
demolish any building thereon; to complete or restore promptly and in good
workmanlike manner any building which may be constructed, damaged or destroyed
thereon and to pay when due all claims for labor performed and materials furnished
thereof; to comply with all laws affecting said Property, or requiring any alterations
or improvements to be made thereon; not to commit or permit waste thereof; not to
commit, suffer or permit any act upon said Property in violation of law; and to do all
other acts which from the character or use of said Property may be reasonably
necessary, the specific enumerations herein not excluding the general.
(2) To provide or cause to provide, maintain and deliver to Beneficiary fire
insurance satisfactory to and with loss payable to Beneficiary and any superior trust
deed holder, as their interests may appear. The amount collected under any fire or
other insurance policy may be applied by Beneficiary upon any indebtedness
secured hereby and in such order as Beneficiary may determine, or at option of
Beneficiary the entire amount so collected or any part thereof may be released to
Trustor. Such application or release shall not cure or waive any default or notice of
default hereunder or invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to affect
the security hereof or the rights or powers of Beneficiary or Trustee; and to pay all
costs and expenses, including cost of evidence of title and attorney's fees in a
reasonable sum, in any such action or proceeding in which Beneficiary or Trustee
may appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust.
(4) To pay: at least ten days before delinquency all taxes and
assessments affecting said Property, including assessments on appurtenant water
stock; when due, all encumbrances, charges and liens, with interest, on said
Property or any part thereof, which appear to be prior or superior hereto; all costs,
fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein provided,
then Beneficiary or Trustee, but without obligation so to do and without notice to or
demand upon Trustor and without releasing Trustor from any obligation hereof,
may: make or do the same in such manner and to such extent as either may deem
necessary to protect the security hereof, Beneficiary or Trustee being authorized to
enter upon said Property for such purposes; appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or powers of
Beneficiary or Trustee; pay, purchase, contest or compromise any incumbrance,
charge or lien which in the judgment of either appears to be prior or superior hereto;
and, in exercising any such powers, pay necessary expenses, employ counsel and
pay his reasonable fees.
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(5) To pay immediately and without demand all sums so expended by
Beneficiary or Trustee, with interest from date of expenditure at the amount allowed
by law in effect at the date hereof, and to pay for any statement provided for by law
in effect at the date hereof regarding the obligation secured hereby any amount
demanded by the Beneficiary not to exceed the maximum allowed by law at the time
when said statement is demanded.
(6) That any award of damages in connection with any condemnation for
public use of or injury to said Property or any part thereof is hereby assigned and
shall be paid to Beneficiary (and to any superior trust deed holder, as their interests
may appear) who may apply or release such moneys received by him in the same
manner and with the same effect as above provided for disposition of proceeds of
fire or other insurance.
(7) That by accepting payment of any sum secured hereby after its due
date, Beneficiary does not waive his right either to require prompt payment when
due of all other sums so secured or to declare default for failure so to pay.
(8) That at any time or from time to time, without liability therefore and
without notice, upon written request of Beneficiary and presentation of this Deed of
Trust and said note for endorsement, and without affecting the personal liability of
any person for payment of the indebtedness secured hereby, Trustee may:
reconvey any part of said Property; consent to the making of any map or plat
thereof; join in granting any easement thereon; or join in any extension agreement
or any agreement subordinating the lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums secured
hereby have been paid, and upon surrender of this Deed of Trust and said note to
Trustee for cancellation and retention and upon payment of its fees, Trustee shall
reconvey, without warranty, the Property then held hereunder. The recitals in such
reconveyance of any matters or facts shall be conclusive proof of the truthfulness
thereof. The grantee in such reconveyance may be described as "the person or
persons legally entitled thereto." Five years after issuance of such full
reconveyance, Trustee may destroy said note and this Deed of Trust (unless
directed in such request to retain them).
(10) That as additional security, subject to the rights of superior trust deed
holders, as their interests may appear, Trustor hereby gives to and confers upon
Beneficiary the right, power and authority, during the continuance of these Trusts,
to collect the rents, issues and profits of said Property, reserving unto Trustor the
right, prior to any default by Trustor in payment of any indebtedness secured
hereby or in performance of any agreement hereunder, to collect and retain such
rents, issues and profits as they become due and payable. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent, or by a
receiver to be appointed by a court, and without regard to the adequacy of any
security for the indebtedness hereby secured, enter upon and take possession of
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said Property or any part thereof, in his own name sue for or otherwise collect such
rents, issues and profits, including those past due and unpaid, and apply the same,
less costs and expenses of operation and collection, including reasonable
attorney's fees, upon any indebtedness secured hereby, and in such order as
Beneficiary may determine. The entering upon and taking possession of said
Property, the collection of such rents, issues and profits and the application thereof
as aforesaid, shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness secured
hereby, or in performance of any agreement hereunder, Beneficiary may declare all
sums secured hereby immediately due and payable by delivery to Trustee of written
declaration of default and demand for sale and of written notice of default and
election to cause to be sold said Property, which notice Trustee shall cause to be
filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, said
note and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the
recordation of said notice of default, and notice of sale having been given as then
required by law, Trustee, without demand on Trustor, shall sell said Property at the
time and place fixed by it in said notice of sale, either as a whole or in separate
parcels, and in such order as it may determine, at public auction to the highest
bidder for cash in lawful money of the United States, payable at time of sale.
Trustee may postpone sale of all or any portion of said Property by public
announcement at such time and place of sale, and from time to time thereafter may
postpone such sale by public announcement at the time fixed by the preceding
postponement. Trustee shall deliver to such purchaser its deed conveying the
Property so sold, but without any covenant or warranty, express or implied. The
recitals in such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust,
including cost of evidence of title in connection with sale, Trustee shall apply the
proceeds of sale to payment of: all sums expended under the terms hereof, not then
repaid, with accrued interest at the amount allowed by law in effect at the date
hereof; all other sums then secured hereby; and the remainder, if any, to the person
or persons legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness
secured hereby, may from time to time, by instrument in writing, substitute a
successor or successors to any Trustee named herein or acting hereunder, which
instrument, executed by the Beneficiary and duly acknowledged and recorded in the
office of the recorder of the county or counties where said Property is situated, shall
be conclusive proof of proper substitution of such successor Trustee or Trustees,
who shall, without conveyance from the Trustee predecessor, succeed to all its title
Page 4 of 8
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estate, rights, powers and duties. Said instrument must contain the name of the
original Trustor, Trustee and Beneficiary hereunder, the book and page where this
Deed of Trust is recorded and the name and address of the new Trustee.
(13) That this Deed of Trust applies to, inures to the benefit of, and binds
all parties hereto, their heirs, legatees, devisees, administrators, executors,
successors and assigns. The term Beneficiary shall mean the owner and holder,
including pledges, of the note secured hereby, whether or not named as Beneficiary
herein. In this Deed of Trust, whenever the context so requires, the masculine
gender includes the feminine and/or neuter, and the singular number includes the
plural.
(14) That Trustee accepts this Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law. Trustee is
not obligated to notify any party hereto of pending sale under any Deed of Trust or
of any action or proceeding in which Trustor, Beneficiary or Trustee shall be a party
unless brought by Trustee.
(15) If the Trustor shall sell, lease, transfer, assign, convey, encumber,
mortgage, hypothecate or alienate the real Property described herein, or any part
thereof, or any interest therein, or shall be divested of title or any interest therein in
any manner or way, whether voluntarily or involuntarily (except as permitted by
Beneficiary pursuant to the terms and conditions set forth in the Unit Regulatory
and Lien Agreement), or if Trustor shall fail to make any payments due under the
note secured by this Deed of Trust, or fail to perform any other obligation under
said Unit Regulatory and Lien Agreement of even date herewith, this Deed of Trust
or the note secured hereby, or any other deed of trust encumbering the subject
Property, then Beneficiary shall have the right, at its option, to declare any
indebtedness or obligations secured hereby, irrespective of the maturity date
specified in any note evidencing the same, immediately due and payable.
Notwithstanding the foregoing, if the resale of the Property is to another
Qualified Person (as defined in the Unit Regulatory and Lien Agreement), and such
purchaser assumes in writing the obligations of the Unit Regulatory and Lien
Agreement, the Note, and this Deed of Trust, then (i) all interest accrued from the
date of the seller's acquisition of the Property through the closing date of the resale
to the new Qualified Person shall be paid at Close of Escrow, (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 of
the seller (at the time of the seller's original acquisition of the Property). (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
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calculated pursuant to Section 11(a) of the Unit Regulatory Agreement may be
higher if the purchaser is of a higher income level than was the seller at the time of
the seller's acquisition of the Property.) At the end of the Forty-Five (45) year 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 Beneficiary subject to and in accordance with the provisions of
Section 5 part (b) of the Unit Regulatory and Lien Agreement.
(16) Notwithstanding anything provided herein to the contrary, the
Beneficiary agrees to look solely to the Trustor's interest in the Property
encumbered hereby and improvements thereon (or the proceeds thereof) for the
satisfaction of any remedy of the Beneficiary, and for the collection of a judgment
(or other judicial process) requiring the payment of money by the Trustor, except
where such judgment results from a claim of fraud; intentional misrepresentation;
misapplication; misappropriation; or wrongful retention of rental income; casualty
insurance; condemnation proceeds; or other funds attributable to the Property; the
commission of any act of deliberate waste with respect to the Property encumbered
hereby; or the deposit of any hazardous or toxic materials on the Property
encumbered hereby; in which events there shall be no such limitation on the
Beneficiary's recourse against the Trustor.
(17) Any breach or default under the Unit Regulatory and Lien Agreement
shall be deemed a breach of this Deed of Trust.
(18) Immediately prior to the recordation hereof the Trustor is or may be
recording a deed of trust that shall be superior to this Deed of Trust. In such event,
such Deed of Trust recorded prior hereto shall be superior to this Deed of Trust.
Therefore, in the event of the foreclosure of such Deed of Trust, or the conveyance
by deed in lieu of foreclosure of the Property to a bank, savings and loan, or other
institutional lender that is the beneficiary of such Deed of Trust superior to the lien
hereof, the provisions hereof shall terminate and be of no force or effect; provided
however, if the Senior Lender acquires title to the Property pursuant to a deed in
lieu of foreclosure, then this Deed of Trust shall terminate only if(i) Beneficiary has
been given written notice of a default under the Senior Lender's Deed of Trust, and
(ii) the Beneficiary shall not have cured the default under the Senior Lender's Deed
of Trust, or diligently pursued the curing of the default as described in the Unit
Regulatory and Lien Agreement as determined by the Senior Lender, within 60
days after the date the notice is sent to the Senior Lender.
The undersigned Trustor requests that a copy of any Notice of Default and of
any Notice of Sale hereunder be mailed to him at his address hereinbefore set
forth.
Signature of Trustor
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Title Order No.
Escrow or Loan No.
Page 7 of 8
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State of California }
County of }
On , 20_ before 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/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 , 20 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/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)
Page 8 of 8
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