2001-868422 D01] -0868422
2oo~.o~8422 NOV 29, 2OO]_ 8: 5D AM
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REOORDING REQUESTED BY
AND WHEN RE~ORDED MAIL TO:
CITY OF ENCINITAS
COMMUNITY DEVELOPMENT DEPT.
505 S. Vulcan Ave.
Encinitas, CA 92024
~¢~ This document is exempt from the
payment of a recording fee pursuant
.~ ~'//9~ to Government Code Section 27383.
Dated://-,.~'; 2001
REGULATORY AGREEMENT
AND DECLARATION OF RESTRICTIVE COVENANTS
~ This Regul,,a, tory Agreement and Declaration of Restrictive Coven.aRts (the."Regulatory
---- Agreement ) is made and entered into and is effective as of thisbe' day of, Q,oe~-V~001
by and between the City of Encinitas (hereinafter the "City"), and Encinitas Ranch
Apartments, LLC (hereinafter the "Contractor").
RECITALS
A. The Contractor (hereinafter the "Contractor") is the owner of real property
(hereinafter the "Property") described in Attachment A attached hereto
and made a part hereof. The Contractor has been approved by the City to
develop and operate a housing project consisting of one hundred twenty
('120) units (hereinafter the "Project"). Certain units located in the project
are subject to affordable housing requirements under the Encinitas Ranch
Development Agreement, State Density Bonus Law, and Federal HOME
Program Regulations.
B. The Contractor has received a Density Bonus for this Project. In order to
comply with State Density Bonus Law, the Contractor must restrict rent
and occupancy for very Iow income households in ten (10) units.
¢. The Contractor has applied to the City for financial assistance for the ten
very Iow income units, as defined by the U.S. Department of Housing and
Urban Development ("HUD"). That financial assistance will be provided by
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page I
7849
the City subject to the availability of funds and subject to the requirements
of the specific source of funds utilized for the Project (hereinafter the
"Program"). The Contractor agrees to be bound and to abide by all
applicable Program statutes, rules, and regulations with applicable to the
Project and the financial assistance provided by the City.
D. The Contractor and the City have entered into a HOME Development
Agreement, dated ,2001 (the "HOME Agreement"), regarding
the Project and the financial assistance to be provided therefor. The
HOME Agreement only speaks to the financial assistance for the HOME
assisted units.
E. There are multiple requirements some overlapping and some more
restrictive. There will be twenty-two affordable units located on site. In
order to meet Density Bonus Law, ten of those units will be restricted for
very Iow income use. As the Contractor is receiving financial assistance
for these units, the ten very Iow income units will only be counted as Iow
income units towards requirements under the Encinitas Ranch
Development Agreement.
F. In order to restrict use of the affordable units, the Contractor is bound by
this Regulatory Agreement and has consented to be regulated and
restricted as provided herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. RECITALS.
The foregoing recitals, the Contractor's application package as approved by the
City, the HOME Development Agreement and its other Exhibits are a part of this
Regulatory Agreement.
2. COMPLIANCE WITH LAW.
The Contractor agrees that at all times its acts regarding the Project shall be in
conformity with all provisions of the Program including the statutes, rules and
regulations and such policies and procedures of the City pertaining thereto. The
Contractor acknowledges that it is aware of such applicable statutes, rules and
regulations, and that professional advice is available as necessary for the
purpose of enabling the Contractor to fully comply with such statutes, rules and
regulations.
3. TERM OF AGREEMENT.
CITY OF ENCINITAS/ENCIN1TAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 2
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The term of this Agreement shall commence on the date hereof and shall
continue for at least 55 years from the date that the applicable state and/or local
government agency certify the Project for occupancy.
4. RENT SCHEDULE.
At the time of initial occupancy, Contractor shall charge only those rents for the
Iow income housing units approved by the City and which are established
pursuant to Program statutes and regulations and the initial rent shall be as set
forth on the Rent Schedule attached (the "Rent Schedule") for the Iow income
housing units. Subsequent increases or decreases in rent including special rent
increases, shall be charged only if consistent with the Program statutes and
regulations. If, at any time during the period of this Agreement, Contractor
intentionally and willfully fails to charge rent according to the Rent Schedule,
Contractor will repay all City funds then currently due and payable. Repayment
will be due within 60 days from the date of a written notice of violation delivered
by the City. A copy of the Rent Schedule in effect at the time of execution of this
Regulatory Agreement is attached hereto as Attachment B and incorporated
herein. Contractor and City agree that the Rent Schedule and the initial rent
amounts applying to the Iow income units, as attached hereto as Attachment B,
and any and all amendments thereto, shall be construed as a deed restriction on
the Property.
5. ELIGIBILITY FOR ADMISSION.
An applicant is eligible for admission to the Project lottery selection process if he
or she meets all of the following criteria:
(a) The applicant meets the income limits for the unit. Tenant income must be
verified using source documentation (e.g. tax return, wage statement,
interest statement, public benefit statement) for the family. Income is
based on the Adjusted Gross Income as defined by the IRS for purposing
of reporting income on the federal Form 1040.
(b) Contractor may determine that an applicant is not eligible for admission if,
on the basis of substantial, factual evidence of that person's prior actions
there is good cause to believe that the applicant will repeatedly fail to pay
rent, will create a substantial threat to the health and safety of other
residents, or will repeatedly breach material requirements of the lease.
Unsubstantiated oral statements will not be deemed substantial factual
evidence.
(c) The above eligibility criteria shall be exclusive and no other factors shall
be considered in determining eligibility of applicants. Applicants receiving
rental assistance must be given equal consideration for the Iow income
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 3
7551
(80%) units, income suitability should be based on required tenant p~)rtion
only.
6. OCCUPANCY
The minimum household size to occupy a unit is one person per bedroom. The
maximum household size to occupy a unit is two persons per bedroom.
7. RESIDENT SELECTION PROCEDURES
Contractor shall rent restricted housing units in the Project to eligible residents in
accordance with the Program Regulations and the Management Plan approved
by and on file with City pursuant to Paragraph 15 of this Regulatory Agreement.
That Management Plan shall include at least the following:
(a) detailed actions to be taken by Contractor to affirmatively market and rent
all units in a manner which ensures equal access to all persons in any
category protected by federal, state, or local laws governing
discrimination, and without regard to any arbitrary factor;
(b) specify reasonable criteria for determination of resident eligibility;
(c) require that eligible residents be selected based on lottery method
approved by the City;
(d) require eligible applicants to be notified of eligibility and, based on
turnover history, be notified of when a unit may be available;
(e) require ineligible applicants to be notified in writing of the reason for their
ineligibility;
(f) specify procedures through which applicants deemed to be ineligible may
appeal this determination;
(g) require maintenance of a waiting list of eligible applicants;
(h) prohibit discrimination against any prospective resident on the basis of
race, religion, sex, disability, marital status, or any other arbitrary factor in
violation of any state, federal, or local law governing discrimination in
rental housing; and
(i) address other selection issues provided for in the Program Regulations.
8. LEASE AND OCCUPANCY PROCEDURES.
CITY OF ENCIN1TAS/ENCINITAS RANCH APARTMENTS, LLC - REGULATORY AGREEMENT Page 4
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(a) Each eligible applicant selected to occupy a unit shall enter into a written
occupancy agreement or lease with the Contractor, the form of which shall
have been approved by the City and which shall contain those provisions
as are required by the Program Regulations and this Regulatory
Agreement. The rental agreement or lease shall provide for good cause
eviction and appeal and grievance procedures, all of which shall be in
accordance with the Program Regulations.
(b) The Contractor shall establish reasonable rules of conduct and
occupancy, which shall be consistent with State and Federal law and the
Program Regulations. The rules shall be in writing and shall be given to
each resident. Any amendment shall be effective no less than 30 days
after giving written notice thereof to each resident.
(c) Leases and the landlord-tenant relationship shall be subject to California
law, Program Regulations, and the provisions of this Regulatory
Agreement.
9. REPLACEMENT CHARGES.
The charges to residents covering damages to the Project property attributable to
the resident shall be made in accordance with a schedule of replacement costs
which shall be adopted by the Contractor, posted in the management office of
each Project, and shown to applicant at the time the lease is signed.
10. TERMINATION OF LEASE.
(a) The resident may end the lease at any time with a 30-day notice. Rent is
only paid for the period the resident actually occupied the housing unit.
Any unused rent shall be returned to the resident. If the resident gives at
least a 30 day notice of intent to vacate the Project the Contractor must,
on the day the resident moves out, return the unused rent to the resident.
If the resident does not give at least 30 days notice of intent to leave, the
Contractor has two (2) weeks within which to send the unused rent to the
resident's forwarding address. In the event the resident does not give
Contractor a forwarding address, Contractor shall hold the unused rent for
six months and return it to the resident if the resident picks it up or
provides a forwarding address within six months. After six months, the rent
is forfeited to the Contractor.
(b) The Contractor may require the resident to move out if the resident has
seriously or repeatedly violated important terms of the lease agreement
such as not paying rent; causing serious interference with the rights of
other residents; knowingly giving false statements of important facts to the
Contractor concerning eligibility for the Project; or for other good cause.
CITY OF ENCINITASPENC1NITAS RANCH APARTMENTS, LLC - REGULATORY AGKEEMENT Page 5
785
(c) In order for the Contractor to begin termination of the lease, it must give
the resident a written notice stating the reason(s) for termination and
notifying the resident of the right to request a hearing as allowed under the
grievance procedure. Requirements of the notice and hearing procedure
are set forth in the Program Regulations.
(d) If the resident has not paid rent, the Contractor shall give the resident a
seven (7) day notice to either pay the rent or move out. If the resident's
actions cause an immediate threat to the health and safety of the other
residents, the Contractor shall give the resident a reasonable time to move
out, but not less than three (3) days.
(e) In all other cases, the resident shall be given at least 30 days notice to
either comply with the terms of the lease or move out.
11. CONTRACTOR RESPONSIBILITIES.
Contractor shall provide administrative, fiscal, and management services, employ
staff and pumhase, rent, and use supplies and materials as needed to operate,
maintain and protect each Project in accordance with this Regulatory Agreement
and the Program Regulations. This shall include, but not be limited to,
compliance with the grounds and procedures governing grievance hearings as
set forth in the Program Regulations. In addition, grievance hearings,
conferences, notices, and summaries pursuant to this Regulatory Agreement
shall be in English or in the language of the majority of residents.
12. REQUIRED RESERVES
(a) City has approved amounts of funding for a "Replacement Reserve
Account" and an "Operating Reserve Account".
(b) Consistent with the requirements of the permanent lender, Contractor
shall make monthly deposits to reserve accounts.
(c) Withdrawals from the accounts shall be made in a manner consistent with
the requirements of the permanent lender.
13. FINANCIAL ASSISTANCE
Contractor acknowledges that the City will not provide additional financial
assistance to the Contractor in the form of operational or capital subsidies for the
Project. If Project Income is insufficient to cover operating, maintenance, and
capital costs, Contractor agrees to assume full financial responsibility for the
operating and maintenance of the Project throughout the term of this Agreement.
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT pa~e 6
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14. ACCOUNTING RECORDS
Contractor shall maintain a cash basis general ledger accounting system that is
posted monthly and that accurately and fully show all assets, liabilities, income
and expenses of the Project. All records and books relating to this system shall
be retained for not less than seven years and in such a manner as to ensure that
the records are reasonably protected from destruction or tampering. All records
shall be subject to City inspection and audit, at City's cost.
15. MANAGEMENT AND MAINTENANCE,
(a) Contractor is specifically responsible for all maintenance, repair, and
management functions including, without limitation, the following: selection
of residents, occupancy standards, complaint and grievance proceedings,
evictions, collection of rents and security deposits, routine and
extraordinary repairs, and replacement of capital items. Contractor shall
maintain units and common areas in a safe and sanitary manner in
accordance with local health, building, and housing codes; and the
Management Plan provided for in this Regulatory Agreement.
(b) Contractor is responsible for operating the Project in accordance with the
Management Plan to be developed by the Contractor as required by the
City, and which is to be approved by and on file with the City (the
"Management Plan"). All amendments to the Management Plan must
remain in compliance with Federal Regulations and this Regulatory
Agreement.
(c) Contractor, with the prior written approval of the City, may contract with a
management agent for the performance of the services or duties required
in subparagraphs (a) and (b). However, such an arrangement does not
relieve the Contractor of responsibility for proper performance of these
duties.
(d) Upon a determination by the City, and written notice to the Contractor
thereof, that the Contractor has failed to operate the Project in accordance
with this Regulatory Agreement, the City may require the Contractor to
contract with a qualified management agent to operate the Project, or to
make such other arrangements as the City deems necessary to ensure
performance of the functions required in subparagraphs (a) and (b).
(e) Contractor agrees to assume full financial and management responsibility
for all operating and maintenance costs, including all repairs, corrections
and replacements necessary to maintain and preserve the Project in a
safe and sanitary condition in accordance with standards prescribed by
the City, all obligations of this Regulatory Agreement, and all applicable
State laws and local ordinances.
CITY OF ENCINITASPENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 7
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(f) To the extent that a permanent lender or grantor imposes requirements
that are substantially different than the City's, the City may agree to adopt
those requirements or allow that entity to have primary responsibility for
monitoring management and maintenance.
16. REPORTING REQUIREMENTS.
The Contractor shall file with the City an annual report, as shown as Attachment
D, no later than 90 days after the end of each fiscal year established for the
Project. The report shall contain such information as the City may then require,
including, but not limited to, the following:
(a) An audit of the fiscal condition of the Project is required whenever financial
assistance is provided by the City. This includes a financial statement
indicating surplus or deficits in operating accounts, a detailed itemized
listing of income and expenses, and the amounts of any fiscal reserves.
Such audit shall be prepared in accordance with the requirements of the
City, certified by an independent certified public accountant licensed in
California or other accountant acceptable to the City;
(b) Any substantial physical defects in the Project, including a description of
; any major repair or maintenance work undertaken in the reporting year;
(c) The occupancy of the Project indicating:
(1) each tenant's annual income, family size and composition, race,
length of tenancy, actual monthly rent paid;
(2) records demonstrating the contractor's efforts to comply with its Fair
Housing Marketing and Equal Opportunity Plan;
(3) the number of residents actually occupying the Project.
(4) general management performance, including tenant relations and
other relevant information;
(d) A description of any fiscal or program difficulties related to the operation of
the Project consistent with the Program requirements;
(e) Each such report shall be subject to the approval of the City;
(f) At any time during the term of this Regulatory Agreement, the City or its
designee, at City's sole cost, may enter and inspect the physical premises
and inspect all accounting and resident records pertaining to the
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC - REGULATORY AGREEMENT Page 8
785-6
construction, development, or operation of the Project. Upon request by
the City, Contractor shall notify residents of upcoming inspections of their
units or records in accordance with State law;
(g) The City may request any other reasonable information that is to monitor
compliance with requirements set forth in this Regulatory Agreement and
the HOME Development Agreement. Such information shall be provided
promptly by the Contractor.
(h) Prior to the commitment of funds, the Contractor will submit to the City
certified copies of: (i) Equal Opportunity and Fair Housing marketing plan;
(ii) records demonstrating that the units meet or will meet all applicable
property standards; (iii) certification that no layering of federal funds has or
will occur; (iv) conflict of interest statements; (v) evidence of flood
insurance.
(i) Prior to the disbursement of funds, the Contractor will provide City with: (i)
evidence of actual costs incurred or estimated costs to be incurred; (ii) an
itemized Request For Payment; (iii) a certification that all funds requested
will be spent in accordance with all federal requirements; (iv) and a final
itemized development and operating budget for the Project.
In addition to the annual report required above, if required by the City, the
Contractor shall file with the City an operating report including such information
as the City may reasonably require and submitted at intervals as directed by the
City, but in no case more often than on a quarterly basis.
17. PERSONAL INJURY AND PROPERTY DAMAGE INSURANCE
a) Borrower shall purchase and maintain, and shall cause its Contractor (and
any subcontractors (hereafter, 'Contractors') to purchase and maintain, at their
sole cost and expense, throughout the term of this agreement, the following
insurance policies:
i) Comprehensive general liability insurance, with minimum limits of One
Million Dollars ($1,000,000) combined single limit per occurrence,
covering all bodily injury and property damage arising out of this
agreement. Policy must include contractual liability.
ii) Vehicle insurance covering all bodily injury and property liability incurred
during the performance of this agreement, with a minimum coverage of
$1,000,000 combined single limit per accident. If there are no company
owned vehicles, vehicle insurance covering non-owned and hired vehicles
shall be obtained.
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 9
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(1) Regarding above policies: the City and their officials, elected
officials and employees are to be covered as insureds as respects:
liability arising out of activities performed by or on behalf of
Borrower and Contractors; products and completed operations of
Borrower and Contractors; premises owned, leased or used by
Borrower and Contractors; or automobiles owned, leased, hired or
borrowed by Borrower and Contractors. The coverage shall contain
no special limitations on the scope of protection afforded to City,
the City and their officials, employees or elected officials.
Notwithstanding the foregoing, the above policies shall only coyer
activities performed pursuant to this Agreement.
(2) City, as well as their officials, employees, agents, and elected
officials shall be named as additional insured only as respects
those activities arising out of this Agreement.
iii) Workers' compensation insurance covering all employees. Workers'
compensation limits as required by the Labor Code of the State of
California and Employers' Liability limits of $1,000,000 per accident. The
insurer shall agree to waive all rights of subrogation against City, its
officials, employees and elected officials for losses arising from work
performed by Borrower and Contractor for City.
iv) Borrower shall procure and maintain comprehensive dishonesty,
destruction fire, all risk and disappearance coverage with minimum limits
of $300,000 with City named and a co-obligee covering all Borrower's
employees and owners.
v) Borrower shall keep the building and improvements located on Sites
insured for replacement value of not less than 100 percent of structural
value.
b) Any failure to comply with reporting provisions of the policies shall not affect
coverage provided to City, its officials, employees or elected officials.
c) Borrower's and Contractors insurance coverage shall be primary insurance as
respects City, their officials, employees and elected officials as respects to this
Agreement. Any insurance or self-insurance maintained by City, their officials,
employees or elected officials shall be excess of Borrower's and Contractors
insurance and shall not contribute with it.
d) Each insurance policy required by this clause shall be endorsed to state that
coverage shall not be suspended, voided, cancelled, reduced in coverage or in
limit except after thirty (30) days prior written notice by certified mail, return
receipt requested, has been given to City.
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 10
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e) Coverage shall be provided on an "occurrence" basis only.
f) Insurance will be written with only California admitted companies having a Best
Rating of A+7 or better.
g) As to all insurance coverage required herein, any deductible or self-insured
retention exceeding $5,000.00 shall be disclosed to and be subject to written
approval by City.
h) If Borrower does not keep an insurance policy in full force and effect at all
times during the term of the Agreement, City may elect to treat the failure to
maintain the requisite insurance as a breach of the Agreement and terminate this
Agreement as provided herein.
i) The effective term of this insurance provision shall continue during the term of
this Agreement.
18. CERTAIN ACTS PROHIBITED.
The Contractor shall not make any sale, encumbrance, assignment or
conveyance, or transfer in any other form, of the entire Property or the entire
Project or of its entire interest therein other than in accordance with the terms of
this Regulatory Agreement and shall not, without the prior approval of the City:
(a) Make any distribution not permitted by the terms of this Regulatory
Agreement;
(b) Assign or transfer any right to operate or manage the Project, except
pursuant to Paragraph 15;
(c) Remodel, remove, add to, reconstruct or demolish any part of the Project
or impair any real or personal property of the Project without prior written
approval by the City;
(d) Require, as a condition of the occupancy or leasing of any dwelling unit in
the Project, any consideration or deposit in excess of that permitted by the
Program Regulations to guarantee the performance of the covenants of
the lease.
(e) Permit the use of the units in the Project for any purpose except that which
was approved by the City;
(f) Enter into any contract or contracts for supervisory or managerial services
except as permitted by this Regulatory Agreement; or
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 11
(g) ~nvest any funds from the Proiect in any prope~, real or persona~, except
as authorized by this Regulatory Agreement or by the City or deposit any
such funds in a depository not authorized by this Regulatory Agreement or
approved by the City.
19. VIOLATION OF REGULATORY AGREEMENT BY THE CONTRACTOR.
In the event of the violation of any of the provisions of this Regulatory Agreement
by the Contractor, the City may give written notice thereof to the Contractor by
registered or certified mail addressed to the Contractor at the address stated in
this Regulatory Agreement, or to such other address as may have been
designated by the Contractor, and if such violation is not corrected to the
satisfaction of the City within thirty (30) days after the date such notice is mailed
(or within such further time as the City, in its reasonable discretion, may permit),
the City may, without further prior notice, declare in writing a default under this
Regulatory Agreement effective on the date of such declaration of default, and
upon any such declaration of default the City may apply to any court, State or
Federal, for specific performance of this Regulatory Agreement; for an injunction
against any violation by the Contractor of this Regulatory Agreement; for the
appointment of a receiver to take over and operate the Project in accordance
with the terms of this Regulatory Agreement; or for such other relief as may be
appropriate, it being agreed by the Contractor that the injury to the City arising
from a default under any of the terms of this Regulatory Agreement would be
irreparable and that it would be extremely difficult to ascertain the amount of
compensation of the City which would afford adequate relief, in light of the
purposes and policies of the Program.
20. AMENDMENT.
This Regulatory Agreement shall not be altered or amended except by writing
executed between the parties.
21. PARTIAL INVALIDITY.
If any provision of this Regulatory Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions
hereof shall not in any way be affected or impaired thereby.
22. BINDING ON SUCCESSORS.
This Regulatory Agreement shall bind, and the benefits thereof shall inure to, the
respective parties hereto, their legal representatives, executors, administrators,
successors in the office or interest, and assigns; provided, however, that the
Contractor may not assign this Regulatory Agreement or any of its obligations
hereunder, voluntarily or by operation of law, without the prior approval of the
City, excluding an assignment to an affiliate. As used herein, "affiliate" means
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AOREEMENT Page 12
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any entity in which Contractor holds a6 ownership interest, or any person or
entity that holds an ownership interest in the real property or the Housing Project.
23. GENDER.
The use of the plural in this Regulatory Agreement shall include the singular and
the singular shall include the plural; and the use of one gender shall be deemed
to include all genders.
24. RECORDING AGREEMENT.
This Regulatory Agreement, and any amendments thereof, shall, at the expense
of the Contractor, be acknowledged by each of the parties and recorded or
referenced in the official records of the County of San Diego.
25. ELECTION OF REMEDIES: EVENT OF DEFAULT.
The remedies of the City hereunder or under any other instrument providing for
or evidencing the financial assistance provided herein are cumulative, and the
exercise of one or more of such remedies shall not be deemed an election of
remedies and shall not preclude the exercise by the City of any one or more of its
other remedies.
26. WAIVER.
No waiver by the City of any breach of or default under this Regulatory
Agreement shall be deemed to be a waiver of any other or subsequent breach or
default hereunder.
27. CAPTIONS.
The captions used in this Regulatory Agreement are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope
of the intent of this Regulatory Agreement.
28. GOVERNING LAW.
This Regulatory Agreement shall be construed in accordance with and governed
by the laws of the State of California.
29. OTHER FEDERAL REGULATIONS.
(a) General. Contractor agrees to carry out all activities in compliance
with Title 24, Part 570 of the Code of Federal Regulations; the Housing
and Community Development Act of 1974 as amended; Title 24,
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 13
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Subtitle A, Part 58 of the Code of Federal Regulations; TiUe VI of the
Civil Rights Act of 1964; TiUe VIII of the Civil Ri9hts Ac~ of lg68;
Section 109 of the Housing and Community Development Act of 1974;
Section 3 of the Housing and Urban Development Act of 1968;
Executive Orders 11246, 11063 and 11593; the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970; Title 24,
Part 42 of the Code of Federal Regulations; OMB Circular A-122; the
Archeological and Historical Preservation Act of 1974; the Architectural
Barriers Act of 1968; the Hatch Act (Chapter 15 of Title 5, U.S.C.); the
Flood Disaster Protection Act of 1974; the Clean Air Act (42 U.S.C.
Section 1857 et seq.) and the Federal Water Pollution Control Act, as
amended (33 U.S.C. Section 1251 et seq.); and the Drug-Free
Workplace Act of 1988.
30. NOTICES.
Written notices and other written communications by and between the parties
hereto shall be addressed as follows unless and until a party hereto has in
writing, communicated a different address to the other party hereto.
City CONTRACTOR
City of Encinitas Encinitas Ranch Apartments, LLC
505 S. Vulcan Ave. 10679 Westview Parkway
Encinitas, CA 92024 San Diego, CA 92126
Attn: Housing & Grants Analyst Attn: President
31. INDEMNIFICATION AND WAIVER.
(a) In addition to the provisions of the HOME Development Agreement,
Contractor agrees to indemnify the City and its agents, employees, and
officers, and holds the City and its agents, employees and officers
harmless from, any losses, damages, liabilities, claims, actions,
judgments, court costs, and legal or other expenses (including attorneys'
fees) of every name, kind and description, which the City may incur as a
direct or indirect consequences of (i) Contractor's failure to perform any
obligations as and when required by this Regulatory Agreement, the
HOME Development Agreement; (ii) any failure at any time of any of
Contractor's representations or warranties to be true and correct; (iii) any
act or omission by Contractor, any contractor, subcontractor, material
supplier, engineer, architect or other person or entity with respect to the
Property or the construction, management, maintenance or operation of
the Project; or (iv) the presence of hazardous substances at the Project or
on the Property. The duty of Contractor to indemnify and save harmless
includes the duties to defend as set forth in Section 2778 of the Civil
Code; Contractor shall indemnify and hold harmless the City and its
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 14
78.62
agents, elected officials, ofcers,-'and employees as set forth herein
regardless of the existence or degree of fau~t or negligence whether active
or passive, primary or secondary, the Contractor, or its agents, officers,
employees, contractors, or subcontractors. Contractor's duty to indemnity
the City shall survive the term of this Regulatory Agreement.
IN WITNESS WHEREOF, Trustor has executed this Regulatory Agreement as of the
day and year first above written.
CONTRACTOR
Encinitas Ranch Apartments, LLC
By~ DATE: il ~7/2001
CITY
City of E~cin~
By: ,.~/'~~,~/. DATE:/~Il12001
~'r~ L/.. MilleK', City Manager
^TTAC. ^C "OW E E E.TS
CITY OF ENCINITASFENCINITAS RANCH APARTMENTS, LLC - REGULATORY AGREEMENT Page 15
ALL-PURPOSE ACKNOWLEDGEMENT
State of California )
) SS.
County of San Diego )
On November 1, 2001, before me, Patricia Drew, Notary Public,
appeared Kerry L. Miller, personally known to me to be the person
whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his authorized capacity, and that
by his signature on the instrument, or the entity upon behalf of which
the person acted, executed the instrument.
WITNESS my hand and official seal
Patricia Drew, Notary Public
My Commission Expires June 22, 2006 SEAL
pd~nisc\ack. LW
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of (~]~ / ,,_,F_~,~ ,. ~
Countyof ~.~'~,-- ,/-'),*.~ ~
On /~),/ ,~ 7, g~c~ o / before me,
personally appeared [~_,~ ~' ~ /'~,~-~/,~
NAME(S} OF SiGNER(S)
[~ersonally 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 ac-
knowledged 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.
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent
fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
[] INDIVIDUAL
[] CORPORATE OFFICER
Tm.E(S) TITLE OR TYPE OF DOCUMENT
[] PARTNER(S) [] LIMITED
[] GENERAL
[] A'I-rORNEY-IN-FACT NUMBER OF PAGES
[] TRUSTEE(S)
[] GUARDIAN/CONSERVATOR
[] OTHER:
DATE OF DOCUMENT
SIGNER IS REPRESENTING:
NAME OF ~RSO~(S) O~ E~m'rY(~ES)
SIGNER(S) OTHER THAN NAMED ABOVE
?865
ATTACHMENT A
LEGAL DESCRIPTION
The land referred to herein is situated in the State .of California, County of San Diego,
and described as follows:
Lot 45 of amended map of City of Encinitas Map No. 13258, City of Encinitas Tract No.
94-066, Units I, II and III, in the City of Encinitas, County of San Diego, State of
California, according to Map thereof No. 13333, filed in the office of the County
Recorder of San Diego County, June 3, 1996.
APN: 257-040-46-00
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC - REGULATORY AGREEMENT Page 16
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ATTACHMENT B
RENT SCHEDULE
Very Low Income Units
The ten (10) HOME assisted units will count as both Iow income units for the Encinitas
Ranch Affordable Housing Compliance Plan as well as the very Iow income units for
Density Bonus provisions. The ten Iow income units will consist of 1 one-bedroom unit, 7
two-bedroom units and 2 three-bedroom units. The following restrictions apply to the very
Iow income assisted units.
Maximum Income- Qualified tenants must have an adjusted gross income that is at or below
50% of the median income, as adjusted for family size.
Maximum Rents- Rents must be equal to or less than the lessor of:
· the Section 8 Fair Market Rents (FMRs) for existing housing, minus a utility allowance,
or
· 30% of monthly incomes for households at 50% of median income for unit size, minus a
utility allowance.
Initial Ru.[~/50% Median Income
Bed/Bath # of Units Square Feet Housing Utility Net Monthly
Payment Allowance Rent
1/1 1 812 $569 $20 $549
2/2 7 903 $711 $26 $685
3/2 2 1229 $768 $34 $734
Low Income Units
The twelve (12) Iow income units will count as Iow income units for the Encinitas Ranch
Affordable Housing Compliance Plan. The twelve iow income units will consist of 2 one-
bedroom units, 8 two-bedroom units and 2 three-bedroom units. The following restrictions
apply to the Iow income units.
Maximum Income-Qualified tenants must have an adjusted gross income that is at or below
80% of the median income, as adjusted for family size.
Maximum Rents-Rents must be equal to or less than 30% of monthly incomes for
households at 80% of median income for unit size, minus a utility allowance.
Initial Rents/80% Median Income
Bed/Bath # of Units Square Feet Housing Utility Net Monthly
Payment Allowance Rent
111 2 812 $910 $20 $890
2/2 8 903 $1,138 $26 $1,112
3/2 2 1229 $1,229 $34 $1,195
General Requirements
Annual Adjustments- Maximum monthly rents and income levels will be given to Contractor
by City annually. Rent increases are permitted, but tenants must be given at least 30 days
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 17
ATTACHMENT C
PROGRAM REGULATIONS
Refer to Title 24 of the Code of Federal Regulations, Par[ 92 HOME Program
regulations.
CITY OF ENCINITAS/E2qCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 19
7867
written notice before increases are implemented. Maximum rents could decrease. However,
project rents are not required to fall below the rent limits in effect at the time of project
commitment.
Annual Recertification of Income- The annual incomes of tenants in rent restricted units
must be reexamined each year using the definition used at initial occupancy. Typically, each
tenant's income will be examined on the anniversary of their original income evaluation and
lease signing.
Increases in Tenant Income- Tenants occupying rent restricted units whose annual incomes
exceed 80% of median income may stay in their apartments. Over income tenants must pay
the lessor of 30% of their adjusted monthly income for rent minus a utility allowance or the
market rent.
CITY OF ENCIN1TAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 18
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ATTACHMENT D
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
The undersigned, being duly authorized to execute this certificate on behalf of Encinitas Ranch
Apartments, LLC (the "Owner"), hereby represents and warrants that:
1. They have read and are thoroughly familiar with the provisions of the various Loan Documents,
including:
(a) the Promissory Note dated September 1,2001 from the Owner to the City representing
the Owner's obligation of the Loan;
(b) the HOME Development Agreement dated September 1, 2001
(c) The Regulatory Agreement and Declaration of Restrictive Covenants dated as of
September 1, 2001 (the "Regulatory Agreement") among the Owner and the City.
2. As of the date of this certificate, the following percentages of restricted residential units in the
project (i) are occupied by income qualified tenants at Affordable Rents (in accordance with the
Regulatory Agreement) or (ii) are currently vacant and being held available for such occupancy and have
been so held continuously since the date the previous qualified tenant vacated such unit; as indicated:
Occupied by Very Low Income Tenants: __% Units
Held vacant since last Very Low Income Tenant: __% -- Units
Occupied by Low Income Tenants: % Units
Held vacant since last Low Income Tenant: % Units
Very Low Income Affordable Rents: One BR
Two BR
Three BR
Low Income Affordable Rents: .One BR
Two BR
Three BR
3. To the best knowledge of the Owner is not in default under the terms of the Regulatory
Agreement.
Owner
Encinitas Ranch Apartments, LLC
By: DATE: / /
Its:
CITY OF ENCINITAS/ENCINITAS RANCH APARTMENTS, LLC- REGULATORY AGREEMENT Page 20
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Encinitas Ranch Apartments
1100 Garden View Rd.
Encinitas, CA 92024
Annual Report through
Listing of Very Low Income 1 BP:
Apt. # Last Name # Persons Race Move-in Date Annual Income Rent
Listing of Very Low Income 2 BP:
Apt. # Last Name # Persons Race Move-in Date Annual Income Rent
Listing of Very Low Income 3 BP:
Apt. # Last Name I # Persons Race Move-in Date Annual Income Rent
I
Listing of Low Income 1 BP:
Apt. # Last Name # Persons [ Race Move-in Date I Annual Income Rent
I
I
Listing of Low Income 2 BP:
Apt. # Last Name # Persons Race Move-in Date Annual Income Rent
Listing of Low Income 3 BP:
Apt. # Last Name # Persons I Race Move-in Date Annual Income Rent
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