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1993-84703211/15/96 CITY CLERK CITY OF ENCINITAS 505 S. VULCAN AVE. ENCINITA$, CA 92024 Re: Reconveyance No. 47864 Dear Beneficiary, Pursuant to California Civil Code section 2924, please find enclosed your copy of the Full Reconveyance that this office has issued and caused to be recorded in the County Recorder's office of the County in which the property is located. Should you have any questions regarding the enclosed, please con- tact the undersigned. Yours truly,~ L~NDA C. ANDREOLI ASST. SECRETARY encl. Recording Requested By: CONTINENTAL LAWYERS TITLE ATTN: R/ KAER 4542 RUFFNER ST., STE.200 SAN DIEGO, CA 92111 Title Order: 31 196951 01 When Recorded Mail To Space above line for recorder's use Loan # 93-0847031 Reconveyance RSD # 47864 FULL RE C ONVEYAN C E FIRST AMERICAN TITLE INSURANCE COMPANY, as Present Trustee for the Deed of Trust executed by NORTH COAST HOUSING, INC. A CALIFORNIA NONPROFIT CORPORATION as Trustor(s), and recorded as; Instrument/File No. 93-0847031 on DECEMBER 15, 1993 in Book Page of official Records in the office of ~he County Recorder of SAN DIEGO County, California, having been requested in writing, by the holder of the obligations secured by said deed of trust, to reconvey the estate granted to trustee under said deed of trust, DOES HEREBY RECONVEY to the person or persons legally entitled thereto, without warranty, all the estate, title, and interest acquired by trustee under said deed of trust. IN WITNESS WHEREOF, FIRST AMERICAN TITLE INSURANCE COMPANY, as Trustee, has caused its corporate name to be affixed by a duly authorized officer on the date shown in the acknowledgement certificate below. FIRST AMERICAN TITLE INSURANCE COMPANY COUNTY OF SAN DIEGO ) By IA · . X 0 - ~C'. ANDREOLI' · .... ASST.'SECRETARY On NOVEMBER 15, 1996, before me, the undersigned, a Notary Public for said State, personally appeared LINDA C. ANDREOLI 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/s~e/they executed the same on his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the on the instrument, the person(s) or the entity upon behalf of which the person(s) acted, executed the same. WITNESS my/h~%and official seal. ~~ Signature · .GREF~ENT CONCERNING COVEN~%NT REGARD'rNG R~ PROPERTY: ~ FOR ~FORD~LE R~ HOUSING In consideration of the grant of funds in the amount of $137,000 and loan in the amount of $35,000 by the City of Encinitas to be used to purchase the real property which is referenced in the attached covenant, North Coast Housing, Inc. ("PROPERTY O~ER" hereinafter) and the City of Encinitas hereby agree to execute the attached covenant as part of escrow in which G~T RECIPIENT is acquiring title to the real property which is referenced in the attached covenant which is attached hereto and made a part hereof. Theinstruc~Cit] O~~ ~ ~ ~ ~. escrow COUNTY OF ~ ~ 0 } _ S,S. a Notary Public in and for said County and State personally appear~ ~ proved to me on the basis of satisfacto~ evidence) to be the person~ whose name~are subscribed to the within instrument and acknowledged to me that hc/;h;/;hey executed ~FICIAL SEAL thesamein~'~c:,'~heirauthoriz~capacit~andthatby~heir ~ N C ROSS signature~n the instrument the perso~ or the entity u~n behalf ~NOTARY ~BLI~OALIF~NIA~ of which the person~cted, executed the instrument. ~ SAN DI[~ COUNTY 8i~naturo 10E02A: ESP When Recorded Mail To: ) City Clerk ~ £ ..................... ] - [50f_~_~n_~v~ .... l :~ S CE ABOVE FOR RECORDER'S USE - Encinitas, CA 92024 ' COVENANT REGARDING REAL PROPERTY: GRANT TO PURCHASE PROPERTY AND PROVIDE AFFORDABLE RENTAL HOUSING Assessor's Parcel No. 260-370-20 Project No.: [--#--] A. North Coast Housing, Inc., a California corporation ("SUBRECIPIENT" hereinafter) intends to become the owner of real property which is commonly known as 2074 Manchester Ave., Encinitas, California 92007 ("PROPERTY" hereinafter) and which is described as follows: See Attachment A which is attached hereto and made a part hereof. B. In consideration of a grant of funds ("GRANT" hereinafter) by the City of Encinitas ("CITY" hereinafter) for use by the SUBRECIPIENT in the purchasing of the PROPERTY, SUBRECIPIENT hereby covenants and agrees ("COVENANT" hereinafter) for the benefit of CITY, to do the following: See Attachment B which is attached hereto and made a part hereof. C. This COVENANT shall run with the land and be binding upon and inure to the benefit of the future owners, encumbrancers, successors, heirs, personal representatives, transferees and assigns of the respective parties. D. SUBRECIPIENT agrees that SUBRECIPIENT's duties and obligations under this COVENANT are a lien upon the PROPERTY. Upon notice and opportunity to respond, CITY may add to the property tax bill of the PROPERTY any past due financial obligation owing to CITY by way of this COVENANT. E. If either party is required to incur costs to enforce the provisions of this COVENANT, the prevailing party shall be entitled to full reimbursement of all costs, including reasonable attorneys' fees, from the other party. F. Failure of SUBRECIPIENT to comply with the terms of this COVENANT shall constitute consent to the filing by CITY of a Notice of Violation of Covenant. G. Upon SUBRECIPIENT's satisfaction of SUBRECIPIENT's duties and obligations contained herein, SUBRECIPIENT may request and CITY shall execute a Satisfaction of Covenant. H. By action of the City Council, CITY may assign to a person or persons impacted by the performance of this COVENANT, the right to enforce this COVENANT against SUBRECIPIENT. ACCEPTED AND AGREED: SUBRECIPIENT North Coast Housing, Inc. Dated / ~/~/~ ~ By ~~ ~ ' / ~ (Notarization of SUBRECIPIEN signature is attached.) CITY OF ENCINITAS ' D~rlzat~f~!t~' bY ~ ( ' ' required) anager /%TTACHMENT /% TO COVENANT REGARDING REAL PROPERTY GRANT FOR AFFORDABLE RENTAL HOUSING PROJECT NO. [--#--] Land referred to herein is situated in the State of California, County of San Diego and is described as follows: Lots 19 and 20 in block 35 of Cardiff "A" in the City of Encinitas, County of San Diego, State of California, according to map there of number 1334, filed in the office of the County Recorder of San Diego County, May 12, 1911. to me on the basis of satisfactory evidence) to be the person(~ whose name~} ~[~subscribed to the within instrument and acknowledged to me that ,,~J;~xecuted the same in h!s/h~uthorized capaci~ and that by h!c/~ignatur~on the instrument the person~or ~~e perso acted, executed the instrument. WITNESS my hand ancLofficial seal· /'~ ~:A~~~iN~N~Y ~ Signature (This area for official notarial seal) ATT&CHMENT B COVENANT REGARDING RF2~L PROPERTY: GRANT TO PURCHASE PROPERTY AND PROVIDE AFFORDABLE RENTAL HOUSING This Agreement by and between CITY and SUBRECIPIENT is made in reference to the following facts: A. CITY is the recipient of funds from the United States Department of Housing and Urban Development ("HUD" hereinafter) pursuant to Title I of the Housing and Community Development Act of 1974 (41 U.S.C. 5301-5320) as amended (hereinafter "ACT"). These funds are known as Community Development Block Grant ("CDBG") funds. B. CITY desires to provide a portion of those funds to SUBRECIPIENT to carry out the purposes of the ACT. C. SUBRECIPIENT warrants that it has the expertise and experience to use those funds in accordance with this Agreement and the ACT. D. SUBRECIPIENT represents that the budget that SUBRECIPIENT prepared and submitted to CITY in applying for CDBG funds includes only allowable costs and an accurate analysis of costs applicable to CDBG funds pursuant to 24 C.F.R. 570.502, which includes requirements for compliance with the following, in addition to other requirements: Circular No. A-122, "Cost Principles for Nonprofit Organizations" or A-il0 with attachments, and A-133, "Audits of Non-Profit Agencies." NOW THEREFORE, in consideration of the foregoing recitals and based on the mutual covenants herein, the parties hereby agree as follows: 1.0 CITY'S OBLIGATIONS 1.1 Payment of Funds. CITY shall pay into the escrow concerning the PROPERTY, from CDBG funds, when, if and to the extent received from HUD, the sum of $137,000.00 (Grant) and $35,000 (Loan) for use by SUBRECIPIENT only in purchasing the PROPERTY. Grant need not be repaid to the CITY unless applicable under Section 4.1, 4.2, 4.4 or 4.5. Loan will be repaid after one year of the date of this covenant at 3% interest as outlined in promissory note. 1.2 Pro~ram Income. [Not Applicable] 1.3 Subordination. Upon approval based on whether the purposes of this document are being .accomplished, CITY agrees to execute a subordination of its interest to the primary lender, Home Savings of America. Said conditions have been met therefore City hereby subordinates this covenant to Home Savings of America's Deed of Trust recording concurrently herewith. 2.0 SUBRECIPIENT'S OBLIGATIONS 2.1 Project. SUBRECIPIENT shall perform the work (hereinafter "PROJECT") as set forth in the Statement of Work pursuant to Exhibit "1" which is attached hereto and incorporated herein by this reference as though fully set forth at length. 2.2 Acc~uisition of PROPERTY a. SUBRECIPIENT shall, upon receipt of such CDBG funds for the purpose of acquiring or improving the PROPERTY and as part of the escrow for purchasing the PROPERTY, cause a Deed of Trust, secured by a Promissory Note, to be executed and recorded, in favor of the CITY, for the amount of the CDBG funds provided by the CITY. b. SUBRECIPIENT further promises that in purchasing the PROPERTY, SUBRECIPIENT shall insure that as part of the escrow, immediately following the transfer of title of the PROPERTY to SUBRECIPIENT, this Covenant shall be recorded on the chain of title for the PROPERTY. c. There shall be no additional encumbrances placed on the PROPERTY during the period of this Agreement without the prior. written consent of CITY, which consent shall not be unreasonably withheld. d. If SUBRECIPIENT uses CDBG funds provided by the CITY as set out in the preceding paragraph, and further encumbers the PROPERTY acquired without first giving notice to the CITY, and obtaining the CITY's written consent, which consent shall not be unreasonably withheld, such action on the part of the SUBRECIPIENT will be cause for termination or revocation of this Agreement and reversion of assets as delineated in Section 4.3. 2.3 Use of Funds. SUBRECIPIENT agrees to use the CDBG funds provided by CITY only pursuant to the provisions of this Agreement. 2.4 Records and Reports. The SUBRECIPIENT shall maintain the following records and reports: a. Records: (1) Documentation of the income level of persons and/or families participating in or benefiting by the SUBRECIPIENT program; (2) Documentation of the number of persons and/or families participating in or benefiting the SUBRECIPIENT's program; (3) Documentation of all CDBG funds received from CITY; (4) Documentation of expenses as identified in the Budget; and (5) Any such other related records as CITY shall require. Reports: (1) Payment Request/Invoice; (2) Annual Performance Reports; and (3) Any such other reports as CITY shall reasonably require. 2.5 Uniform Administrative Reauirements. The SUBRECIPIENT shall comply with applicable uniform administrative requirements as described in 24 C.F.R. 570.502. 2.6 Accountina Standards. SUBRECIPIENT agrees to comply with Attachment F of OMB Circular A-il0 to the accounting principles and procedures required therein, utilize adequate internal controls, and maintain necessary source documentation for all costs incurred. 2.7 Retention of Records. All accounting records and evidence pertaining to all costs of SUBRECIPIENT and all documents related to this Agreement shall be kept available at SUBRECIPIENT's office or place of business for the duration of the Agreement and thereafter for three (3) years after completion of an audit. Records which relate to (a) complaints, claims, administrative proceedings or litigation arising out of the performance of this Agreement, or (b) costs and expenses of this Agreement to which CITY or any other governmental agency takes exception, shall be retained beyond the three (3) years until resOlution or disposition of such appeals, litigation claims, or exceptions. 2.8 Inspection: Records and Use of Funds. a. SUBRECIPIENT shall allow CITY and the United States Government and/or their representatives full access for purposes of monitoring, auditing, and examining SUBRECIPIENT'S activities and performance, under this Agreement, to include without limitation, access to SUBRECIPIENT'S books, documents and papers, and the right to examine the records of SUBRECIPIENT'S subcontractors, bookkeepers and accountants, employees and participants in regard to the Project. b. SUBRECIPIENT shall allow the CITY and the United States Government and/or their representative to conduct on-site monitoring, at their discretion. Monitoring activities may also include, but are not limited to, questioning employees and participants in said program and entering any premises or any site in which any of the services or activities funded hereunder are conducted or in which any of the records of SUBRECIPIENT are kept. Nothing herein shall be construed to require access to any privileged or confidential information as set forth in Federal or State law. c. SUBRECIPIENT shall allow CITY to annually audit all CDBG funds associated with the Project, pursuant to federal regulations found in Title 24 of the Code of Federal Regulations and other applicable federal laws and regulations. d. In the event SUBRECIPIENT does not make the above- referenced documents available within the CITY of Encinitas, California, SUBRECIPIENT agrees to pay all necessary and reasonable expenses incurred by CITY in conducting any audit at the location where said records and books of account are maintained. 2.9 Annual Statement To City. a. By January 31 of each year during the term of this COVENANT, the SUBRECIPIENT shall submit a written statement to the CITY's manager prepared by an independent certified public accountant to examine the SUBRECIPIENT's records for the prior calendar year. b. The statement shall briefly summarize the nature and disposition of all complaints received by the SUBRECIPIENT from tenants during the past year and certifying that: (1) The information, supporting documentation, and certifications of qualified households received by the SUBRECIPIENT from those commencing occupancy of reserved units during the past year was examined and the households were determined to be properly qualified for occupancy in accordance with the eligibility requirements of this COVENANT; (2) The rental paid by each tenant household to the PROPERTY OWNER during the past year was properly calculated and did not exceed the maximum allowed rental authorized by this COVENANT; and (3) Rental increases for tenant households did not occur more frequently than once a year. 2.10 Procurement. [Not Applicable] 2.11 Chanqe of Use. There shall be no alteration of the use of the PROPERTY during the period of this COVENANT without the prior written consent of CITY, which consent shall not be unreasonably withheld. 3.0 SUBRECIPIENT'S OTHER OBLIGATIONS 3.1 Compliance with APPlicable Laws. a. SUBRECIPIENT shall comply fully with all applicable Federal, State and local laws, ordinances, regulations, and permits including but not limited to Federal CDBG financial and contractual procedures, and OMB Circular Nos. A-133, A- 122, and A-il0 with Attachments A, B, C, H, N, and O, as set forth in 24 C.F.R. 570.502(b). Said Federal documents are on file in the CITY of Encinitas Community Development Department, 505 S. Vulcan Avenue, Encinitas, California 92024, and are incorporated herein by reference. b. SUBRECIPIENT shall secure any new permits required by authorities herein with jurisdiction over the Project, and shall maintain all presently required permits. c. SUBRECIPIENT shall ensure that the requirements of the California Environmental Quality Act are met for any permits or other entitlements required to carry out the terms of this Agreement. d. SUBRECIPIENT agrees to comply with the following regulations insofar as they apply to the performance of this covenant: Clean Air Act; Federal Water Pollution Control Act as amended; Environmental Protection Agency regulations pursuant to 40 CFR Part 50 as amended; National Environmental Policy Act of 1969; HUD Environmental Review Procedures, 24 CFR, Part 58. e. SUBRECIPIENT agrees to comply with the requirements of the Flood Disaster Protection Act of 1973 in regard to the sale, lease or other transfer of land acquired, cleared or improved under the terms of this covenant. f. SUBRECIPIENT agrees that any construction or rehabilitation of residential structures shall be subject to HUD Lead Based Paint Regulations at 24 CFR 570.608 and 24 CFR Par 35, and in particular Sub-Part B thereof. Such regulations pertain to all HUD assisted housing and require that all owners, prospective owners, and tenants or properties constructed prior to 1978 be properly notified that such properties may include lead based paint. Such notification shall point out the hazards of lead based paint and explain the symptoms, treatment and precautions that should be taken when dealing with lead-based paint poisoning. g. SUBRECIPIENT agrees to comply with the Historic Preservation requirements set forth in the National Historic Preservation Act of 1966, as amended and the procedures set forth in 36 CFR, Part 800, Advisory Council on Historic Preservation Procedures for Protection of Historic Properties, insofar as they apply to the performance oZ this covenant. h. No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. i. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions; and 3.2 NONDISCRIMINATION. a. Provision of Pro~ram Services. (1) SUBRECIPIENT shall not on the ground of race, color, national origin or sex, exclude any person from participation in, deny any person the benefits of, or subject any person to discrimination under any program or activity funded in whole or in part with CDBG funds. (2) SUBRECIPIENT shall not under any program or activity funded in whole or in part with CDBG funds, on the ground of race, color, national origin, or sex: (a) Deny any facilities, services, financial aid or other benefits provided under the program or activity. (b) Provide any facilities, services, financial aid or other benefits which are different or are provided in a different form from that provided to others under the program or activity. (c) Subject to segregated or separate treatment in any facility in, or in any matter of process related to receipt of any service or benefit under the program or activity. (d) Restrict in any way access to, or in the enjoyment of any advantage or privilege enjoyed by others in connection with facilities, services, financial aid or other benefits under the program or activity. (e) Treat an individual differently from others in determining whether the individual satisfies any admission, enrollment, eligibility, membership, or other requirement or condition which the individual must meet in order to be provided any facilities, services or other benefit provided under the program or activity as an employee. (f) Deny an opportunity to participate in a program or activity as an employee. (3) SUBRECIPIENT may not utilize criteria or methods of administration which have the effect of subjecting individuals to discrimination on the basis of race, color, national origin, or sex, or have the effect of defeating or substantially impairing accomplishment of the objectives of the program or activity with respect to individuals of a particular race, color, national origin, or sex. (4) SUBRECIPIENT, in determining the site or location of housing or facilities provided in whole or in part with CDBG funds, may not make selections of such site or location which have the effect of excluding individuals from, denying them the benefits or, or subjecting them to discrimination on the ground of race, color, national origin, or sex, or which have the purpose or effect of defeating or substantially impairing the accomplishment of the objectives of the Civil Rights Act of 1964 and amendments thereto. (5) In administering a program or activity funded in whole or in part with CDBG funds regarding which the SUBRECIPIENT has previously discriminated against persons on the ground of race, color, national origin, or sex, the SUBRECIPIENT must take affirmative action to overcome the effects of prior discrimination. Even in the absence of such prior discrimination, a SUBRECIPIENT in administering a program or activity funded in whole or in part with CDBG funds should take affirmative action to overcome the effects of conditions which would otherwise result in limiting participation by persons of a particular race, color, national origin, or sex, to exclude individuals from participation in, to deny them the benefits of, or to subject them to discrimination under any program or activity to which CDBG funding applies, the SUBRECIPIENT has an obligation to take reasonable action to remove or overcome the consequences of the prior discriminatory practice or usage, and to accomplish the purpose of the Civil Rights Act of 1964. The SUBRECIPIENT shall not be prohibited by this part from taking any eligible action to ameliorate any imbalance in services or facilities provided to any geographic area or specific group of persons within its jurisdiction where the purpose of such action is to overcome prior discriminatory practice or usage. (6) Notwithstanding anything to the contrary in Sub Section 3.2 (a), SubSubSections 1 through 5, nothing contained herein shall be construed to prohibit any SUBRECIPIENT from maintaining or constructing separate living facilities or rest room facilities for the different sexes. Furthermore, selectivity on the basis of sex is not prohibited when institutional or custodial services can properly be performed only by a member of the same sex as the recipients of the services. b. Employment Discrimination. (1) SUBRECIPIENT shall not discriminate against any employee or application for employment because of race, color, religion, sex, national origin, age or handicap. SUBRECIPIENT shall take affirmative action to insure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, national origin, age or handicap. Such action shall include, but not be limited to, the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rate of pay or other forms of compensation and selection for training including apprenticeship. SUBRECIPIENT agrees to post in conspicuous places available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause. (2) SUBRECIPIENT shall, in all solicitations or advertisements for employees placed by or on behalf of SUBRECIPIENT, state that all qualified applications will receive consideration for employment without regard to race, color, religion, sex, national origin, age or handicap. (3) SUBRECIPIENT shall send to each labor union or representative of workers with which it has a collective bargaining agreement or other contractor understanding, a notice to be provided by CITY's contracting officers advising the labor union or workers' representative of SUBRECIPIENT'S commitments under Section 202 of Executive Order No. 11246 of September 14, 1965, and shall post copies of the notices in conspicuous places available to employees and applicants for employment. (4) SUBRECIPIENT shall comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. (5) SUBRECIPIENT shall furnish to the CITY all information and reports required by Executive Order No. 11246 of September 24, 1965, and of the related rules, regulations, and orders. (6) SUBRECIPIENT shall include the provisions of Section 3.2, "Affirmative Action Policy," in every subcontract or purchase order unless exempted by rules, regulations, or order of the Secretary of Labor issued pursuant to Section 204 of Executive Order No. 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. SUBRECIPIENT shall take such action with respect to any subcontractor or purchase order as the CITY may direct as a means of enforcing such provisions including sections for noncompliance: Provided, however, that in the event SUBRECIPIENT becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the CITY, SUBRECIPIENT may request the United States to enter into such litigation to protect the interests of the United States. (7) SUBRECIPIENT shall not discriminate on the basis of age in violation of any provision of the Age Discrimination Act of 1975 (42 U.S.C. 6101 et seq.) or with respect to any otherwise qualified handicapped individual as provided in Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794). (8) SUBRECIPIENT shall also provide ready access to and use of all CDBG fund assisted buildings to physically handicapped persons in compliance with the standards established in the Architectural Barriers Act of 1968 (42 U.S.C. 4151 et seq.). c. Section 504. SUBRECIPIENT agrees to comply with any federal regulations issued pursuant to compliance with Section 504 of the Rehabilitation Act of 1973 which prohibits discrimination against the handicapped in any federally assisted program. d. Fair Housinq Act. SUBRECIPIENT shall administer all programs and activities in a manner to affirmatively further the policies of the Fair Housing Act which prohibits any person from discriminating in the sale or rental of housing, the financing of housing, or the provision of brokerage services, including otherwise making unavailable or denying a dwelling to any person because of race, color, religion, sex, national origin, handicap or familial status. 3.3 Conflict of Interest. In the procurement of supplies, equipment, construction and services by SUBRECIPIENT, the conflict of interest provisions in Attachment 0 of OMB Circular No. A-il0 and 24 C.F.R. 570.611 shall apply. 3.4 Independent Contractor. SUBRECIPIENT agrees that the performance of obligations hereunder are rendered in its capacity as an independent contractor and that it is in no way an employee or agent of the CITY. 3.5 Licensing. SUBRECIPIENT agrees to obtain and maintain all licenses, registrations, accreditations, and inspections from all agencies governing its operations. SUBRECIPIENT shall insure that its staff shall also obtain and maintain all required licenses, registrations, accreditations, and inspections from all agencies governing SUBRECIPIENT'S operations hereunder. 3.6 Labor Standards. SUBRECIPIENT agrees to comply with the requirements of the Secretary of Labor in accordance with the Davis-Bacon Act as amended, the provisions of Contract Work Hours, the Safety Standards Act, the Copeland "Anti-Kickback" Act and all other applicable federal, state and local laws and regulations pertaining to labor standards insofar as those acts apply to the performance of this covenant. 3.7 Relocation. SUBRECIPIENT is responsible for compliance with Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 as amended (HUD Handbook 1378) and Section 104 (d) of the Housing and Community Development Act of 1974 as amended which requires grantees to certify that it is following a residential antidisplacement and relocation assistance plan providing one-for-one replacement units. 3.8 Assianabilit¥/Chanqe Of Subrecipientship. a. SUBRECIPIENT shall notify the City, in writing, prior to the completion of any change of ownership regarding the PROPERTY. b. SUBRECIPIENT shall not assign or transfer any interest in this Agreement, whether by assignment, delegation or novation, without the prior written consent of CITY; provided, however, that claims for money due or to become due to SUBRECIPIENT from CITY under this Agreement may be assigned to a bank, trust company or other financial institution, or to a trustee in bankruptcy, without such approval. c. Notice of any proper assignment or transfer shall be promptly furnished to CITY. d. No conveyance, assignment or other transfer of any interest in the premises or the Agreement by SUBRECIPIENT, or any successor or assignee thereof, shall be valid for any purpose whatsoever unless the CITY has given its prior written approval, which approval shall not be given unless the grantee or transferee has accepted in writing the obligations incurred by the PROPERTY OWNER pursuant to this COVENANT and the CITY is satisfied that the grantee/transferee is fully capable of performing the obligations. e. Any assignment, delegation or novation other than as provided above shall be void and inoperative. 3.9 Hold Harmless. a. SUBRECIPIENT agrees to indemnify and hold CITY and CITY's officers, officials, employees and agents harmless from, and against any and all liabilities, claims, demands, causes of action, losses, damages and costs, including all costs of defense thereof, arising out of, or in any manner connected directly or indirectly with, any acts or omissions of SUBRECIPIENT or SUBRECIPIENT's agents, employees, subcontractors, officials, officers or representatives. Upon demand, SUBRECIPIENT shall, at its own expense, defend CITY and CITY's officers, officials, employees and agents, from and against any and all such liabilities, claims, demands, causes of action, losses, damages and costs. b. SUBRECIPIENT's obligation herein includes, but is not limited to, alleged defects in the plans, specifications and design of the project; but does not extend to liabilities, claims, demands, causes of action, losses, damages or costs that arise out of a defect in the plans, specifications or design that is a result of a change required by CITY to the SUBRECIPIENT's proposed plans, specifications or design so long as such change is objected to, in writing, by SUBRECIPIENT, and the writing is filed with the City Engineer more than ten days prior to the commencement of work. c. By approving the improvement plans, specifications and design. CITY shall not have waived the protections afforded herein to CITY and CITY's officers, officials, employees and agents or diminished the obligation of SUBRECIPIENT who shall remain obligated in the same degree to indemnify and hold CITY and CITY's officers, officials, employees and agents, harmless as provided above. d. SUBRECIPIENT's obligation herein does not extend to liabilities, claims, demands, causes of action, losses, damages or costs that arise out of the CITY's intentional wrongful acts, CITY's violations of law, or CITY's sole active negligence. 3.10 Insurance. a. The SUBRECIPIENT shall maintain insurance, in form acceptable to CITY, in full force and effect throughout the term of this COVENANT. The policy or policies of said insurance, except for Workers' Compensation, shall name the CITY as an "Additional Insured" and shall, as a minimum, provide the following forms of coverage in the amounts specified: (1) Workers' Compensation to statutory limits; and (2) Premises liability minimums: (a) $500,000 bodily injury, each person; and (b) $1.000.000 bodily injury, each occurrence; and (c) $250.000 property damage: OR In lieu of (a), (b), and (c) above, $2,200,000.00 combined single limit bodily injury and property damage. (3) Fire and extended coverage, including water damage as an indirect result of fire and debris cleanup provision, in an amount not less than 90 percent of the full replacement of all improvements within the project. b. The liability insurance shall be in force from the first day of the term of this COVENANT. c. Each policy of insurance, except for Workers' Compensation, shall contain the following clauses: (1) "It is agreed that this policy shall not be canceled nor the coverage reduced until thirty (30) days after the City of Encinitas shall have received written notice of such cancellation or reduction. Said notice shall be sent by certified mail or registered mail to the City." (2) "The insurer waives any right of subrogation against the CITY which might arise by reason of any payment under this policy only as it pertains to the terms and conditions of this Agreement." (3) "This coverage is considered primary coverage for the CITY as an additionally insured, except for sole negligence on the part of the City or City employees." d. SUBRECIPIENT agrees to deposit with CITY, at or before the effective date of this COVENANT, a certificate for each of the policies necessary to satisfy the insurance provision of this COVENANT, and to keep such insurance in effect during the entire term of this COVENANT. Failure to obtain and maintain said insurance shall be grounds for immediate termination of the COVENANT. e. CITY shall retain the right at any time to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of the CITY, the insurance provisions in this COVENANT do not provide adequate protection for CITY and for persons using the PROPERTY, CITY may require the SUBRECIPIENT to obtain insurance sufficient in coverage, form and amount to provide adequate protection. CITY's requirements shall be reasonable but shall be designed to assure protection from and against the kind and extent of risks which exist at the time a change in insurance is required. f. The CITY shall notify the SUBRECIPIENT in writing of changes in the insurance requirements, and if SUBRECIPIENT does not deposit with CITY within sixty (60) days of such notice a new certificate for each policy or policies of insurance incorporating such changes, this COVENANT may be terminated. g. The procuring of such required policy or policies of insurance shall not be construed to limit SUBRECIPIENT's liability hereunder to fulfill the indemnification provisions and requirements of this COVENANT. Notwithstanding said policy or policies of insurance, SUBRECIPIENT shall be obligated for the full and total amount of any damage, injury, or loss cause by it or its agents', tenants', or guests' negligence, or neglect connected with this COVENANT or with use or occupancy of the PROPERTY. h. Said insurance shall include the risks and obligations of any tenant sublessee, consignee, permittee, and/or licensee, in an amount satisfactory to the CITY. 4.0 MISCELLANEOUS PROVISIONS 4.1 Termination or Suspension of Aqreement. a. CITY or SUBRECIPIENT may terminate this Agreement by giving written notice to the other party thirty (30) days prior to effective date of termination. Additionally, the CITY Manager shall have the right, in accordance with 24 C.F.R.85.43, to suspend or terminate this Agreement immediately or withhold payment of any invoice for failure of the SUBRECIPIENT to comply materially with any term or condition of this Agreement. Should the CITY Manager decide to terminate this Agreement after a full evaluation of all circumstances has been completed, the SUBRECIPIENT shall, upon written request, have the right to appeal the CITY Manager's decision to the City Council. A copy of the appeal process will be attached to any termination notice. b. If the CITY finds that the SUBRECIPIENT has violated the terms and conditions of this Agreement, the SUBRECIPIENT may be required to: (1) Rep~all monies received from~e CITY under this Agreement; and/or (2) Transfer possession of all materials and equipment purchased with grant money to the CITY. c. In the case of termination, a final payment may be made to the SUBRECIPIENT upon receipt of a Final Report and invoices covering eligible .costs incurred prior to termination. The total of all payments, including the final payment, shall not exceed the amount specified in this Agreement. 4.2 Termination for Convenience. In accordance with 24 Code of Federal Regulations 85.44, the CITY may terminate this Agreement for convenience. 4.3 Reversion of Assets. Upon termination or expiration of the term of this Agreement, the SUBRECIPIENT shall transfer to the CITY any CDBG funds on hand including program income as defined in 570.504 at the time of such termination or expiration and any accounts receivable attributable to the use of GRANT funds. Any real property under the SUBRECIPIENT'S control that was acquired or improved in whole or in part with GRANT funds shall either be: a. Used to meet one of the national objectives stated in 24 C.F.R. 570.208 until five (5) years after termination or expiration of this Agreement, or for such longer periods of time as determined to be appropriate by the CITY; or b. Disposed of in a manner that results in the CITY being paid: (1) An amount equal to the GRANT plus interest from the date of the GRANT at the rate of 101 per year until the date of full repayment; and (2) An amount equal to the fair market value of the PROPERTY at the time of termination or expiration, less the amount needed to satisfy the obligation for funds used to acquire the PROPERTY. 4.4 In the event of SUBRECIPIENT'S failure to comply with any rules, regulations, or orders required to be complied with pursuant to this Agreement, CITY may cancel, terminate, or suspend in whole or in part its performance and SUBRECIPIENT may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order No. 11246 of September 24, 1965, and such other sanctions as may be imposed and remedies invoked as provided in Executive Order No. 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law. 4.5 ENFORCEMENT. a. If the SUBRECIPIENT fails to duly observe or perform any covenant, agreement or obligation under this COVENANT for a specific period after notice thereof is given by the CITY, then the CITY may take any one or more of the following steps: (1) By~damus or other s or proceeding a~~-~ law or in equity, require the SUBRECIPIENT to perform the covenants, agreements and obligations under this COVENANT, or enjoin any acts or things which may be unlawful or in violation of the rights of the CITY thereunder; (2) Have access to, and inspect, examine and make copies of, all of the books and records of the SUBRECIPIENT pertaining to the SUBRECIPIENT's performance of this covenant; (3) Take such other action at law or in equity as may appear necessary or desirable to enforce the covenants, agreements and obligations of the SUBRECIPIENT under this COVENANT; or (4) Terminate this COVENANT. b. SUBRECIPIENT shall obtain housing elsewhere for any tenant household adversely affected by the Owner's noncompliance. The Owner shall reimburse the CITY for all costs incurred which exceed the maximum rent allowed pursuant to this COVENANT. Reimbursement shall be made within thirty (30)days of receipt of a billing from the CITY. In the event SUBRECIPIENT fails to remit the full amount when due, there shall be imposed an additional 5% for each fifteen (15) days, or fraction thereof, that the delinquency exists, it being agreed that the actual loss due to delinquency is extremely difficult to determine and that the additional amount set forth herein is a reasonable approximation of the actual loss. When the SUBRECIPIENT has remedied the noncompliance to the CITY's satisfaction, the reimbursement obligation shall cease. 4.6 Notices. All notices to the parties required by this Agreement shall be in writing and addressed as follows, TO CITY: CITY of Encinitas Community Development 505 South Vulcan Avenue Encinitas, CA 92024 TO SUBRECIPIENT: North Coast Housing, Inc. c/o Law offices of Dwight Worden 740 Lomas Santa Fe Drive, Suite 102 Solana Beach, CA 92075 4.7 Exclusivity and Amendment of Aqreement. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the services of SUBRECIPIENT and provision of CDBG funds by CITY and contains all the, covenants and agreements between the parties with respect to the conditions of said services and funding in any manner whatsoever. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf Of any party, whi~are not,embodied herein that no oth~v agreement or amendment hereto shall be effective unless executed in writing and signed by both CITY and SUBRECIPIENT. 4.8 Laws Governina This Aareement. This Agreement shall be governed by and construed in accordance with the laws of the state of California, all applicable federal statutes and regulations as amended, and all applicable local laws. 4.9 Severability. The invalidity in whole or in part of any provision of this agreement shall not void or affect the validity of any other provisions of this Agreement. 4.10 Construction of Aqreement. The provisions of this Agreement and its Exhibits A, and B, shall be construed as a whole. The captions preceding the text of each section are included only for convenience of reference and shall be disregarded in the construction and interpretation of this Agreement. community Development Block Grant Program city of Enolnltas STATEMENT OF WORK Contract Period: November 9, 1993 to Life of Building at 2074 Manchester Ave., Cardiff, CA. Agency: North Coast Housing, Inc. Address: c/o Law offices of Dwight Worden, 740 Lomas Santa Fe Drive, Suite 102 Solana Beach, CA 92025 Contact Person: Chuck Orr Phone: 619-436-8673 Project Name: Acquisition of property at 2074 Manchester Ave, Cardiff, CA. PROJECT GOALS AND OBJECTIVES Acquire property in order to provide four units of iow income housing. PROJECT OBJECTIVES PERFORMANCE MF2~SURES PROVISION OF UNITS. SUBRECIPIENT shall create no less than four rental units ("AFFORDABLE RENTAL UNITS" hereinafter) on the PROPERTY on or before November 10, 1993, which shall be occupied only by households qualified in accordance with this COVENANT. 2~ DESIGN OF UNITS. [Not Applicable] MAINTENANCE OF UNITS. a. [Not Applicable] b. SUBRECIPIENT shall maintain and keep the PROPERTY, to include without limitation, the AFFORDABLE RENTAL UNITS and related facilities, in a decent, good, safe, sanitary and habitable condition during the term of this COVENANT and shall repair and replace the affordable units as required. c. The CITY may inspect or cause to be inspected the PROPERTY and the related facilities from time to time, including prior to initial occupancy of the units, as may be necessary to assure that the SUBRECIPIENT is meeting the obligation to maintain the units in accordance with this COVENANT. d. If the CITY notifies the SUBRECIPIENT of a failure to maintain the PROPERTY, and the SUBRECIPIENT fails to take corrective action within the time prescribed in the notice, the CITY may exercise any of its rights under this COVENANT or applicable federal, state, or local law, to enter upon the property and remedy such failure. SUBRECIPIENT shall provide the AFFORDABLE RENTAL UNITS for the life of the building. ON-SITE PROPERTY MANAGER. [Not Applicable] OUALIFICATION OF TENANT HOUSEHOLDS. a. SUBRECIPIENT shall make available the AFFORDABLE RENTAL UNITS only to low income households which are defined as being persons or families with an income which does not exceed 60% of the median income for San Diego County as determined by the United States Department of Housing and Urban Development ("HUD" hereinafter). b. At the commencement of this COVENANT and each July 1 thereafter, and continuing so long as the AFFORDABLE RENTAL UNITS are being provided, the CITY shall inform the SUBRECIPIENT of the criteria for SUBRECIPIENT to use for determining the income level of households. The criteria shall be in accordance with HUD requirements. c. The SUBRECIPIENT shall investigate the financial circumstances of potential tenant households and shall be responsible for obtaining from each household applicant the information, supporting documentation, and certifications required. Based upon this information and any other deemed necessary by the SUBRECIPIENT, the SUBRECIPIENT shall determine the applicant's eligibility to occupy an AFFORDABLE RENTAL UNIT reserved in accordance with the provisions of this COVENANT. d. Before entering into any lease or rental agreement concerning an AFFORDABLE RENTAL UNIT provided in accordance with this COVENANT, the SUBRECIPIENT shall certify in writing that the potential tenant household satisfies the requirements for the appropriate income level. e. The SUBRECIPIENT shall reexamine and recertify the income status of each existing tenant household, at the time of renewal of an existing lease or rental agreement, but in no case less than every 12 months. PREFERENCE FOR TENANTS. a. In obtaining tenants for the AFFORDABLE RENTAL UNITs, SUBRECIPIENT shall give, in the order listed in this section, preference to: (1) Persons currently residing within the City; (2) Persons employed by the City; (3) Persons employed within the City; and (4) All other financially qualified households. b. In the event that qualified households cannot be found, the SUBRECIPIENT may request the City Council to temporarily suspend the ~irements. m by c. Qualified households shall be placed on the appropriate, preference list on a first come, first served basis. 8. MAXIMUM RENT FOR AFFORDABLE RENTAL UNITS. a. The maximum amount of monthly rent that may be charged by the SUBRECIPIENT for the AFFORDABLE RENTAL UNITS, is computed as follows: Determine the number of bedrooms in the unit. Calculate the rent for the unit by determining the income level to use as the base income. (Chart below) Then apply the following formula: Monthly rents shall not exceed 30% of 60% of the San Diego County median income as determined annually by HUD divided by 12(months). Size of Unit bv Bedroom Family income level by size to use as -base income for formula One Bedroom 2 Person Household Two Bedroom 4 Person Household Three Bedroom 6 Person Household Four Bedroom 8 Person Household For example, the rent for a one bedroom unit would be $526 based on the median income of a 2 person household of $21,050. 9. SUBRECIPIENT shall prepare a management plan to the satisfaction of the CITY Community Development Director for the in place maintenance of asbestos-containing building materials (ICBM) as identified in the Asbestos Survey Report, September 30, 1993. SUBRECIPIENT shall submit the Plan to the CITY within 60 days of the close of escrow by which SUBRECIPIENT acquires the PROPERTY. After the Plan is approved by the CITY, SUBRECIPIENT shall fully comply with the provisions of the Plan. 10. RENTAL AGREEMENT BETWEEN SUBRECIPIENT AND TENANT. Rental of the AFFORDABLE RENTAL UNITS shall be established only by a written rental agreement between the SUBRECIPIENT and the qualified household. The tenant household shall be prohibited from assigning or subletting the unit and shall require personal occupancy of the person or persons qualifying for the affordable unit. The rental agreement shall also specify the dates rental increases are permitted, security deposit, project regulations and other information which will make explicit the conditions under which the unit is rented. The rental agreement must comply with all applicable provisions of the California Civil Code relating to the hiring of real property. &GENCY PROJECT BUDGET Acquisition of 2074 Manchester $137,000