The URL can be used to link to this page

1998-751314 -- -- - . . . DOC ~'1998-0751314 -- " , , ,{ 1 RECORDED AT THE REQm;s];" NOV 18" 1998 4:59 PM CHICAGO TITLE CO. 8 7 IFFICItlIÐDœ FREE RECORDING REQUESTED IWt D & IDIfIY IIlDI'S IfFIŒ PURSUANT TO GOV. CODE SECTION IDlY J. 9tI1H, aIIITY IItJIØ 27383 FŒS: 0.00 - . Recording Requested By: 111111111111111 City of Encinitas 1888.0751314 Community Development 505 S. Vulcan Avenue {IfIý Encinitas, CA 92024 And When Recorded Mail To: ;;sz, - ~ ~-Ið f\ \ City of Encinitas Community Development 505 S. Vulcan Avenue \~p Encinitas, CA 92024 ~f 7 3()9311 DEED OF TRUST -$, (This is a Second Deed of Trust) 1- /.,fJ'O -(J K' THIS DEED OF TRUST is made this 1:24;:!!. day of November. 1998, among the Trustor, Francisca Gastelum (herein "Borrower"), and Chicago Title Company (herein "Trustee"), and the Beneficiary, CITY OF ENCINITAS (herein "CITY"), whose address is 505 S. Vulcan Avenue, Encinitas, California 92024. BORROWER, in consideration of the indebtedness herein recited and the trust herein created, irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in the County of San Diego, State of California: see Exhibit" A" attached hereto and incorporated herein by this reference which has the address of 699 Sweet Pea Place, Encinitas, California 92024 (herein "Property Address"); TOGETHER with all the improvements now and hereafter erected on the Property, and all easements, rights, appurtenances and rents (subject, however, to the rights and authorities . 868 "---" '-'" . given herein to CITY to collect and apply such rents), all of which shall be deemed to be and remain part of the property covered by this Deed of Trust; and all of the foregoing, together with said property (or the leasehold estate if this Deed of Trust is on a leasehold) are hereinafter referred to as the "Property"; TO SECURE to CITY the repayment of the indebtedness evidenced by Borrower's Promissory Note dated --b\D\J.-e.tY'\b..e...r ~ ' 1998, and Note Rider, and extensions and renewals thereof (herein collectively referred to as the "Note"), in the principal sum of Sixteen Thousand One Hundred Eightv-Five U.S. Dollars ($16.185), with interest thereon, fully deferred with the total indebtedness, if not sooner paid, due and payable upon default by Borrower, a Prohibited Transfer as defined in the Deed of Trust. This Note will be forgiven on the date which is fifty-five (55) years after the recordation date hereof, if Borrower has not defaulted or made a Prohibited Transfer of the Property, or any portion thereof; CITY has received the payment of all other sums, with interest thereon, advanced in accordance herewith to protect the security of this Deed of Trust; and CITY has received the full performance of the covenants and agreements of Borrower herein contained. Borrower covenants that Borrower is lawfully seized of the estate hereby conveyed and has the right to grant and convey the Property, and that the Property is unencumbered except for encumbraœes of record. Borrower covenants that Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to encumbrances of record. UNIFORM COVENANTS Borrower and CITY covenant and agrees as follows: L Pavrnent of Principal and Interest. Borrower shall promptly pay when due the principal and interest indebtedness evidenced by the Note. 2. Payment of Taxes and Insurance. To protect the security of the Deed of Trust, Trustor agrees to pay, at least ten (10) 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; and 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, without obligation to do so 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 encumbrance, 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. IEncinitas/Deed.OO5 Page 2 of 13 869 "--" '-' 3. Application of Payments. Unless applicable law provides otherwise, all payments received by CITY under the Note shall be applied by CITY first in payment of amounts advanced by CITY to CITY by Borrower, then to interest payable on the Note, and then to the principal of the Note. 4. Prior Morta:aa:es and Deeds of Trust: Chara:es. Liens. Borrower shall perform all of Borrower's obligations under any mortgage, deed of trust or other security agreement with a lien which has priority over this Deed of Trust, including Borrower's covenants to make payments when due. Borrower shall payor cause to be paid all taxes, assessments and other charges, fines and impositions attributable to the Property which may attain a priority over this Deed of Trust, and leasehold payments, if any. 5. Hazard Insurance. Borrower shall keep the improvement(s) now existing or hereinafter erected on the Property insured against loss by fire, hazards included within the terms "extended coverage" , and such other hazards as CITY may require and in such amounts and for such periods as CITY may require. The insurance carrier providing the insurance shall be chosen by Borrower subject to approval by CITY, provided that such approval will not be unreasonably withheld. All insurance policies and renewals thereof shall be in a form acceptable to CITY and shall include a standard mortgage clause in favor of and in a form acceptable to CITY. CITY has the right to hold the policies and renewals thereof, subject to the terms of any mortgage, deed of trust or other security agreement with a lien which has priority over this Deed of Trust. In the event of loss, Borrower shall give prompt notice to the insurance carrier and CITY. CITY may make proof of loss if not made promptly by Borrower. If Property is abandoned by Borrower, or if Borrower fails to respond to CITY within thirty (30) days from the date notice is mailed by CITY to Borrower that the insurance carrier offers to settle a claim for insurance benefits, CITY is authorized to collect and apply the insurance proceeds at CITY's option either to restoration or repair of the Property or to the sums secured by this Deed of Trust. 6. Preservation and Maintenance of Propertv. Borrower will keep the Property in good repair and shall not commit waste or permit impainnent or deterioration of the Property and shall comply with the provisions of any lease if this Deed of Trust is on a leasehold. Borrower shall perform all of Borrower's obligations under the declaration of covenants, conditions and restrictions creating or governing the condominium, the bylaws and regulations of the condominium, and constituent documents. 7. Protection of CITY Security. If Borrower fails to perform the covenants and agreements contained in this Deed of Trust, or if any action or proceeding is commenced which materially affects CITY's interest in the Property, the CITY, at CITY's option, upon notice to IEncinitas/Deed.OO5 Page 3 of 13 870 '---"¡ -- Borrower, may make such appearances, disburse such sums including reasonable attorneys' fees, and take such action as is necessary to protect CITY's interest. If CITY's required mortgage insurance is a condition of making the loan secured by this Deed of Trust, Borrower shall pay the premiums required to maintain such insurance in effect until such time as the requirement for such insurance terminates in accordance with Borrower's and CITY's written agreement or applicable law. Any amounts disbursed by CITY pursuant to this paragraph, with interest thereon, at the Note rate, will become additional indebtedness of Borrower secured by this Deed of Trust. Unless Borrower and CITY agree to other terms of payment, such amounts will be payable upon notice from CITY to Borrower requesting payment thereof. Nothing contained in this paragraph will require CITY to incur any expense or take any action hereunder. 8. InspectioIL CITY may make or cause to be made reasonable entries upon and inspections of the Property, provided that CITY will give the Borrower notice prior to any such inspection, specifying reasonable cause therefor related to CITY's interest in the property . 9. CondemnatioIL The proceeds of any award of claim for damages, direct or consequential, in connection with any condemnation or other taking of the Property, or part thereof, or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to CITY subject to the terms of any mortgage, deed of trust or other security agreement with a lien which has priority over this Deed of Trust. 10. Borrower Not Released: Forbearance bv CITY Not a Waiver. Extension of the time for payment or modification of amortization of the sums secured by this Deed of Trust granted by CITY to any successor in interest of Borrower shall not operate to release, in any manner, the liability of the original Borrower and Borrower's successors in interest. CITY shall not be required to commence proceedings against such successor or refuse to extend time for payment .or otherwise modify amortization of the sums secured by this Deed of Trust by reason of any demand made by the original Borrower and Borrower's successors in interest. Any forbearance by CITY in exercising any right or remedy hereunder, or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any such right or remedy. 11. Successors and Assips Bound. Joint and Several Liability: Co-Si~ors. The covenants and agreements herein contained shall bind, and the rights hereunder shall inure to, the respective successors and assigns of CITY and Borrower, subject to the provisions of paragraph 16 hereof. All covenants and agreements of Borrower shall be joint and several. Any Borrower who co-signs this Deed of Trust, but does not execute the Note: (a) is co-signing this Deed of Trust only to grant and convey that Borrower's interest in the Property to Trustee under the terms of this Deed of Trust; (b) is not personally liable on the Note or under this Deed of Trust; and, IEncinilas/Deed.OO5 Page 4 of 13 871 <.....,/ <--..- (c) agrees that CITY and any other Borrower hereunder may agree to extend, modify, forbear or make any other acconnnodation with regard to the terms of this Deed of Trust or the Note, without that Borrower's consent and without releasing that Borrower or modifying this Deed of Trust as to that Borrower's interest in the property. 12. Notice. Except for any notice required under applicable law to be given in another manner: (a) any notice to Borrower provided for in this Deed of Trust shall be given by delivering it or by mailing such notice by certified mail, addressed to Borrower at the Property address or such other address as Borrower may designate by notice to CITY as provided herein; and, (b) any notice to CITY will be given by certified mail, return receipt requested, to CITY's address stated herein or to such other address as CITY may designate by notice to Borrower as provided herein. Any Notice provided for in this Deed of Trust shall be deemed to have been given to Borrower or CITY when given in the manner designated herein. 13. Governine Law. Severability. The state and local laws applicable to this Deed of Trust shall be the laws of the jurisdiction in which the Property is located. The foregoing sentence shall not limit the applicability of federal law to this Deed of Trust. In the event that any provision or clause of this Deed of Trust or the Note conflicts with applicable law, such conflict shall not affect other provisions of this Deed of Trust or the Note which can be given effect without the conflicting provision and, to this end, the provisions of this Deed of Trust and the Note are declared to be severable. As used herein, "costs", "expenses" and "attorneys' fees" include all sums to the extent not prohibited by applicable law or limited herein. 14. Borrower's Copy. Borrower shall be furnished a conformed copy of the Note and this Deed of Trust at the time of execution or after recordation hereof. 15. Notice to CITY. Borrower agrees that it will give the CITY notice of any prospective transfer, sale, conveyance, rental or subletting not less than forty five (45) days before the proposed sale, transfer, conveyance, rental or subletting by personal delivery of a notice at the address set forth for the CITY on Page 1 of this Deed of Trust. Time is of the essence. 16. Lease of Property Prohibited During the term of the affordability restrictions as set forth in Paragraph 17(e) of this Deed of Trust, the Borrower shall not rent or sublet the Property, or any part thereof, to any person and/or entity, unless the person is an income "Eligible Household". As used herein, an income "Eligible Household" shall mean a household whose eligible income does not exceed eighty percent (80 %) of the Area Median Income for San Diego, as determined from time to time by the U.S. Department of Housing & Urban Development. IEnciniwlDeed.OO5 Page 5 of 13 ,,-. 872 '- Further, the rent charged to the Eligible Household shall not exceed thirty percent (30 %) of eighty percent (80%) of the Median Income, minus a utility allowance. For purposes of this restriction, rents shall be based upon a household size of three (3). Leasing of the Property to a household that is not an Eligible Household or at rents that exceed the restricted rental rates set forth herein shall be deemed a prohibited transfer of the Property, within the meaning of Paragraph 18, and shall trigger the right of the CITY to foreclose and/or exercise its First Right of Refusal. 17. Transfer. Conveyance of Property Restricted for Fifty Five (55) Years. The sale, transfer and/or conveyance of the Property is restricted as follows: If Borrower sells, transfers or conveys the Property less than fifty five (55) years after the date of this Deed of Trust, then said sale, conveyance and/or transfer shall be subject to the following: (a) The Property may only be sold, transferred or conveyed to a subsequent purchaser whose income is less than eighty percent (80%) of the median income as derIDed by HUD from time to time for the San Diego metropolitan area, as adjusted for family size and as verified and approved by CITY. (b) Except as provided in Paragraph 17(d) hereof, the Property must be used only as the principal residence of the subsequent purchaser during the term of the Declaration, Le, fifty five (55) years. (c) The sale price to the subsequent purchaser must be at a price that is "affordable to the subsequent purchaser(s)". "Affordable to the subsequent purchaser(s)" is achieved if the monthly payments for principal, interest, property taxes, insurance and a utility allowance determined by CITY do not exceed thirty percent (30%) of the gross income of a family with an income that is eighty percent (80%) of the median income for the area, adjusted for a family size of three. (d) In the event that a Transferor is unable to fmd, despite diligent efforts to do so, an Eligible Person or Family to purchase a Housing Unit, the Transferor may sell the Housing Unit to a person other than an Eligible Person or Family by first offering to sell the Housing Unit to the CITY for a purchase price equal to highest purchase price at which an Eligible Person or Family could qualify to purchase the Housing Unit at an Affordable Housing Cost. The CITY shall accept or reject the offer to sell the Housing Unit to the CITY within thirty (30) days of the date of receipt of the offer to selL In the event that the CITY declines to purchase the Housing Unit, the Transferor may proceed to market and sell the Housing Unit to any purchaser without regard to the resale conditions set forth in this Agreement; provided that upon or prior to the close of escrow the Transferor shall pay to the CITY the greater of: 1) the amount of the Second Deed of Trust, or 2) "Equity Sharing Amount", hereinafter defined. IEncinitas/Deed.OO5 Page 6 of 13 873 -- '--" The "Equity Sharing Amount" means an amount equal to the appreciation in the value of the Property determined by the difference between the Sales Price and the Affordable Housing Price (as defined below). The" Affordable Housing Price" is the purchase price that could be paid by an Eligible Person or Family at an Affordable Housing Cost. The "Sales Price" is the price to be paid by the buyer of the Property (the "Buyer") to the Transferor for Transferor's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. Upon a showing of hardship by the Transferor to the CITY in writing, the CITY may waive anyone or combination of the following: the resale restrictions, the Transferor's obligation to sell to the CITY, the Transferor's obligation to pay the CITY the Equity Sharing Amount and/or the Transferor's obligation to pay the CITY the amount of the Second Deed of Trust. (e) The affordability requirement shall remain in effect for a total of fifty five (55) years, measured from the date of this Deed of Trust. This requirement shall remain in full force and effect against all subsequent purchasers during the restricted term. This restriction shall also apply to sales of the Property from the subsequent purchaser to other purchaser(s) during the restricted term. (t) If the Borrower fails, refuses or is unable to convey, sell, rent or transfer the Property to a person or persons meeting the requirements of paragraphs 16, 17a through 17e, inclusive, before the end of the affordability term as defined in paragraph 17e, then such transfer shall be deemed a Prohibited Transfer as defined in Paragraph 18 hereof. These provisions of paragraph 17 shall bind the heirs, successors and assigns of the Borrower. 18. Prohibited Transfer. If Borrower sells, agrees to sell, conveys, rents and/or transfers the Property in violation of the terms of Paragraphs 16 and 17 hereof, then CITY may, at its option, in addition to any and all other remedies available to it, require immediate payment in full of all sums secured by the Second Deed of Trust. In the instance of a prohibited transfer, the Transferor shall pay to the CITY the greater of: 1) the amount of the Second Deed of Trust, including any interest, as described in the Note, or 2) "Equity Sharing Amount", as defined above. As an alternative, CITY may, at its option, purchase the Property for a purchase price equal to the highest purchase price at which an Eligible Person or Family could qualify to purchase the Housing Unit at an Affordable Housing Cost. However, these options shall not be exercised by CITY if such exercise is prohibited by federal law as of the date of the Deed of Trust or if the CITY has executed a separate written waiver of these options. IEncinitas/Deed.OO5 Page 7 of 13 ---...,/ , - 874 If CITY exercises any of these options, CITY shall give Borrower Notice of Acceleration or, in the alternative, Notice of Exercise of First Right of Refusal Option. The notice shall provide a period of not less than thirty (30) days from the date that the notice is delivered or mailed within which Borrower must pay all sums secured by the Deed of Trust or must enter into an escrow to convey the Property to CITY, depending upon the option exercised by CITY. If Borrower fails to pay these sums or enter into an escrow prior to the expiration of this period, CITY may invoke any remedies permitted by the Deed of Trust without further notice or demand on Borrower. The escrow contemplated by this Paragraph 18 must close not more than ninety (90) days after CITY receives notice of such sale, agreement to sell, conveyance, rental or transfer of the Property in violation hereof. NON-UNIFORM COVENANTS Borrower and CITY further covenant and agree as follows: 19. Acceleration. Remedies. Upon Borrower's breach of any covenant ~r agreement of Borrower in this Deed of Trust, including the covenants to pay when due any sums secured by this Deed of Trust, and those contained in paragraphs 16, 17 and 18 hereof, CITY, prior to acceleration, shall give notice to Borrower as provided in paragraph 12 hereof specifying: (a) the breach; (b) the action required to cure such breach; (c) a date, not less than ten (10) days from the date the notice is mailed to Borrower, by which such breach must be cured; and, (d) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this Deed of Trust and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the nonexistence of a default or any other defense of Borrower to acceleration and sale. If the breach is not cured on or before the date specified in the notice, CITY, at CITY's option, may declare all of the sums secured by this Deed of Trust to be immediately due and payable without further demand and may invoke the power of sale and any other remedies permitted by applicable law. CITY shall be entitled to collect all reasonable costs and expenses incurred in pursuing the remedies provided in this paragraph 19, including, but not limited to, reasonable attorneys' fees. If CITY invokes power of sale, CITY shall execute or cause Trustee to execute a written notice of the occurrence of an event of default and of CITY's election to cause the Property to be sold and shall cause such notice to be recorded in each county in which the Property or some part thereof is located. CITY or Trustee shall mail copies of such notice in the manner prescribed by applicable law. Trustee shall give public notice of sale to the persons and in the manner prescribed IEncinitas/Deed.OO5 Page 8 of 13 ---- 875 ,-",,' by law. After the lapse of such time as may be required by applicable law, Trustee, without demand on Borrower, shall sell the Property at public auction to the highest bidder at the time and place and under the tenns designated in the notice of sale in one or more parcels and in such order as Trustee may detennine. Trustee may postpone sale of all or any parcel of the Property by public announcement at the time and place of any previously scheduled sale. CITY or CITY's designee may purchase the Property at any sale. Trustee shall deliver to the purchaser Trustee's deed conveying the Property so sold without any covenant or warranty, expressed or implied. The recitals in the Trustee's deed shall be prima facie evidence of the truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order: (1) to all reasonable costs and expenses of the sale, including, but not limited to, reasonable Trustee's and attorneys' fees and costs of title evidence; (2) to all sums secured by this Deed of Trust; and, (3) the excess, if any, to the person or persons legally entitled thereto. 20. Borrower's Ril:ht to Reinstate. Notwithstanding CITY's acceleration of the sums secured by this Deed of Trust due to Borrower's breach, Borrower shall have the right to have any proceedings begun by CITY to enforce this Deed of Trust discontinued at any time prior to five (5) days before the sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Borrower pays CITY all sums which would be then due under this Deed of Trust and the Note had no acceleration occurred; (b) Borrower cures all breaches of any other covenants or agreements of Borrower contained in this Deed of Trust; (c) Borrower pays all reasonable expenses incurred by CITY and Trustee in enforcing the covenants and agreements of Borrower continued in this Deed of Trust and in enforcing Trustee's remedies as provided in paragraph 19 hereof, in- cluding, but not limited to, reasonable attorneys' fees; and, (d) Borrower takes such action as CITY may reasonably require to assure that the lien of this Deed of Trust, CITY's interest in the Property and Borrower's obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Borrower, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred. IEncinitas/Deed.OO5 Page 9 of 13 ---' 876 ~ 21. Assienment of Rents: Appointment of Receiver: CITY in PossessiolL As additional security hereunder, Borrower hereby assigns to CITY the rents of the Property ,provided that Borrower shall, prior to acceleration under paragraph 19 hereof or abandonment of the Property, have the right to collect and retain such rents as they become due and payable. Upon acceleration under paragraph 19 hereof or abandomnent of the Property, CITY, in person, by agent or by judicially appointed receiver shall be entitled to enter upon, take possession of and manage the Property and to collect the rents of the Property including those past due. All rents collected by CITY or the receiver shall be applied first to payment of the cost of management of the Property and collection or rents, including, but not limited to, receiver's fees, premiums on receiver's bonds and reasonable attorneys' fees, and then to the sums secured by this Deed of Trust. CITY and the receiver shall be liable to account only for those rents actually received. 22. Reconvevance. Upon payment of all sums secured by this Deed of Trust, CITY shall request Trustee to reconvey the Property and will surrender this Deed of Trust and all Notes evidencing indebtedness secured by this Deed of Trust to Trustee. Trustee shall reconvey the Property without warranty and without charge to the person or persons legally entitled thereto. Such person or persons shall pay all costs of recordation, if any. 23. Substitute Trustee. CITY, at CITY's option, may from time to time appoint a successor trustee to any Trustee appointment hereunder by an instrument executed and acknowledged by CITY and recorded in the office of the Recorder of the county where the Property is located. The instrument shall contain the name of the origina11ender, Trustee and Borrower, the book and page where this instrument is recorded, and the name and address of the successor trustee. The successor trustee shall, without conveyance of the Property, succeed to all the title, power and duties conferred upon the Trustee herein and by applicable law. This procedure for substitution of trustee shall govern to the exclusion of all other provisions for substitution. 24. Request for Notices. Borrower requests that copies of the notice of sale be sent to Borrower's address which is the Property Address. 25. Statement of OblieatiolL CITY may charge a fee not to exceed Sixty Dollars ($60.00) for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California. 26. Deed of Trust Rider. The Deed of Trust Rider executed by Borrower is attached hereto and made part of this Deed of Trust. 27. Covenants. Conditions and Restrictions. The Property is subject to Covenants, Conditions and Restrictions ("Restrictions") between CITY and Borrower, which are not attached hereto but are incorporated by reference. Borrower acknowledges receipt of said Restrictions and agrees, for himself, his heirs, successors and assigns to be bound by the same. /Encinitas/Deed.OO5 Page 10 of 13 '-' 877 '--' 28. Warranties of Borrower. Borrower warrants to CITY as follows: (a) That Borrower's household annual gross income does not exceed eighty percent (80%) of the median income for the San Diego metropolitan area, as adjusted for family size, as said median income is determined by HUD, on the latter of: (1) the date of initial occupancy of the Property; or, (2) the date of the recordation of this Deed of Trust. (b) Except as provided in Paragraph 16 of this Deed of Trust, for so long as Borrower owns the Property, Borrower will reside in the Property as Borrower's principal place of residence and will not to sublet, lease or rent out the Property during the term of this Deed of Trust. 29. Foreclosure by Holder of Senior Deed of Trust. This Deed of Trust is subordinate to any deed of trust or mortgage on the Property made by or held by an institutional lender or investor. Any party, and its successors and assigns, receiving title to the Property through a trustee's sale, a judicial foreclosure sale or deed in lieu of foreclosure of such deed of trust or mortgage, and any conveyance or transfer thereafter, shall receive title free and clear of the provisions of this Deed of Trust and any and all affordability restrictions. REQUEST FOR NOTICE OF DEF AUL T AND FORECLOSURE UNDER SUPERIOR MORTGAGES OR DEEDS OF TRUST CITY will request that copies of notices of foreclosure from the holder of any lien which has priority over this Deed of Trust be sent to CITY's address, as set forth on page 1 of this Deed of Trust, as provided by Section 2924b of the Civil Code of California. IN WITNESS WHEREOF, Borrower has executed this Deed of Trust. Date: j I-) ~ - <j>~ ~ ,¿j~ . Borrower Date: Borrower IEncinitas/Deed.OO5 Page 11 of 13 878 '-- '--"" ACKNOWLEDGMENT State of California ) ) County of San Diego ) On NC\I. \':L , 1998, before me~ S. P£ùVt+u-" personally appeared, ÞV'"~CtSl'" 4. G: as+&LUYU pcrsøl18lly læQwn to me (or proved to me on the basis of satisfactory evidence) to be the perso~) whose name~ is/azf subscribed to the within instrument "DEED OF TRUST" and acknowledged to me that )é/she/tþéy executed the same in ~/her/théir authorized capacity(¥s), and that by ~/her/tl)t!Ir signature(.s1 on the instrument the person~, or the entity on behalf of which the person~ acted, executed the instrument. HOLLY S. PAINÆR COMM.t 1178882 ~ WITNESS my hand and official seal. NOTARY PU8LJC.ØlJFORNIA SAN DIEGO COUNTY .:.. MY COMMISSION EXPIRES MARCH 21, 2002 Signature ~."? ~uJu (Seal) IEncinitas/Deed.005 Page 12 of 13 879 ',- "--' REQUEST FOR RECONVEYANCE TO TRUSTEE: The undersigned is the holder of the note or notes secured by this Deed of Trust. Said note or notes, together with all other indebtedness secured by this Deed of Trust, have been paid in fulL You are hereby directed to cancel said note or notes and this Deed of Trust, which are delivered hereby, and to reconvey, without warranty, all the estate now held by you under this Deed of Trust to the person or persons legally entitled thereto. Dated: By: IEncinitas/Deed. 005 Page 13 of 13 ,- 880 - DEED OF TRUST RIDER THIS DEED OF TRUST RIDER (herein "Rider") is attached to and made a part of the Deed of Trust dated No'('6'n~, 1998 made between the CITY OF ENCINITAS, a municipal corporation (herein "CITY") and executed by Francisca Gastelum as Borrower. Borrower agrees to the provisions of this Deed of Trust Rider in addition to those of the Deed of Trust. THE LANGUAGE OF TIllS RIDER PREV AILS OVER THE DEED OF TRUST IN THE EVENT OF A CONFLICT. 1. Borrower agrees that the Property being purchased is affordable as thereafter described in the CITY's Affordable Housing Compliance Plan (lithe Plan") dated August 14, 1996, and that the continued use of the Property must be in accordance with the Plan and the Declaration of Covenants, Conditions and Restrictions dated tJolJem 00::..J1...1998, and that no transfer of the Property will be permitted and no successor-in-interest to the Borrower(s) will be permitted to assume the loan of Borrower(s) evidenced by the Note secured by this Deed of Trust Rider, unless the written consent of CITY to the transfer has been fll'st obtained. No such consent will be given by CITY except in the following limited circumstances: (a) the transfer results from the death of a Borrower and the transfer is to the surviving spouse of the Borrower and the surviving spouse is also a Borrower; (b) a transfer by a Borrower to his or her spouse when the spouse becomes, by such a transfer, a co-owner of the Property; (c) a transfer of the Property resulting from a decree of dissolution of the marriage or legal separation or from a property settlement agreement incidental to such a decree which requires the Borrower to continue to make payments on the Note and by which a spouse who is already a Borrower becomes the sole owner of the Property; (d) a transfer by a Borrower to an inter vivos trust in which the Borrower is the sole beneficiary; and/or, a transfer or rental in accordance with the ownership restrictions contained in paragraphs 16, 17 and 18 of the Deed of Trust. [remainder of page intentionally left blank] IEncinitas/Deed.OOS "þ - 881 - 2. This Deed of Trust is subordinate to any deed of trust or mortgage on the Property made by or held by an institutional lender or investor. Any party, and its successors and assigns, receiving title to the Property through a trustee's sale, a judicial foreclosure sale or deed in lieu of foreclosure of such prior deed. of trust or mortgage, and any conveyance or transfer thereafter, shall receive title free and clear of the provisions of this Deed of Trust and any and all affordability restrictions. NOTICE TO BORROWER: Do not sign this Deed of Trust Rider if it contains blank spaces. All spaces should be completed before you sign. Date: ¡/- Jj( -c;~ ~/I~ Francisca Gastelum, Borrower IEncinitaslDeed.OO5 .";'~'~. '-- 882 - EXHIBIT "A" LEGAL DESCRIPTION PAGE 1 OF 1 A CONDOMINIUM COMPRISED OF:: PARCEL A: AN UNDIVIDED 1 /15TH FEE SIMPLE INTEREST AS A TENANT IN COMMON IN AND TO THE PORTION OF THE COMMON AREA OF MODULE A OF LOT 5 OF CITY OF ENCINIT AS TRACT NO. 96-170, IN THE CITY OF ENCINIT ASCOUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 13481, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, OCTOBER 9, 1997, AS SHOWN ON THE CONDOMINIUM PLAN FOR SAXONY, PHASE 1, RECORDED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON MARCH 17,1998 AS FILE NO. 1998-0142312 C'CONDOMINIUM PLAN"). PARCEL B: RESIDENTIAL UNIT NO. 58 AS SHOWN AND DEFINED ON THE CONDOMINIUM PLAN. RESERVING THEREFROM NON-EXCLUSIVE EASEMENTS FOR MAINTENANCE, ENCROACHMENT, SUPPORT, REPAIR, DRAINAGE AND ALL OTHER PURPOSES AS DESCRIBED IN THE DECLARATION. PARCEL C: A NON-EXCLUSIVE EASEMENT, IN COMMON WITH OTHER OWNERS, FOR INGRESS AND EGRESS, USE AND ENJOYMENT, OVER, IN, TO, AND THROUGHOUT THE ASSOCIATION PROPERTY SHOWN ON THE CONDOMINIUM PLAN REFERRED TO IN PARCEL "A" ABOVE AND OVER, IN, TO AND THROUGHOUT, OTHER PHASES OF THE PROPERTY DESCRIBED IN THE DECARATION WHICH EASEMENT IS APPURTENANT TO THE RESIDENTIAL UNIT DESCRIBED ABOVE. THIS EASEMENT SHALL BECOME EFFECTIVE AS TO EACH OF SAID PHASES, RESPECTIVELY, UPON (1) RECORDATION OF A DECLARATION OF ANNEXATION, DECLARING SUCH PHASES, RESPECTIVELY, TO BE SUBJECT TO THE DECLARATION, AND (II) CONVEYANCE OF THE FIRST CONDOMINIUM IN EACH RESPECTIVE PHASE, ALL AS MORE FULLY SET FORTH IN THE DECLARATION. THE ASSOCIATION PROPERTY REFERRED TO HEREIN AS TO EACH OF SUCH PHASES SHALL BE AS SHOWN AND DESCRIBED ON THE CONDOMINIUM PLAN COVERING EACH SUCH PHASE RECORDED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CAUFORNIA, EXCEPTING THEREFROM THE COMMON AREA AND RESIDENTIAL UNITS THEREON. PARCEL D: AN EXCLUSIVE EASEMENT OVER THE PORTION OF THE ASSOCIATION PROPERTY (AS DEFINED IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR SAXONY AT ENCINITAS RANCH RECORDED IN THE OFFICE RECORDS OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA ON DECEMBER 2, 1997 AS INSTRUMENT NO. 1997-0608422, AND ANY AMENDMENTS THERETO) DESIGNATED IN THE CONDOMINIUM PLAN AS AN EXCLUSIVE USE PARKING SPACE APPURTENANT TO THE RESIDENTIAL UNIT DESCRIBED IN PARCEL "B" ABOVE. DESCLTR-OII/OB/Ø4bk '>....,..--. '--' NOTICE: This Note may require payment of principal and interest upon the sale or transfer of the property or upon a prepayment NOTE November /::2.. , 1998 San Diego, California 699 Sweet Pea Place, Encinitas, California 92024 1. Borrower's Promise to Pay. In return for a loan that I have received, I promise to pay Sixteen Thousand One Hundred Eighty-Five U.S. Dollars ($16,185) (herein "principal") to the order of the CITY OF ENCINITAS, a Municipal Corporation (herein "Lender"). I understand that Lender may transfer this Note. Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note may be called "Note Holder". 2. No Interest This Note will bear no interest unless I default under the terms of this Note, the Deed of Trust securing it and/or the Covenants, Conditions and Restrictions affecting the Property. In the event of default, interest from the date of recordation of the Deed of Trust securing this Note shall be calculated at the greater of the following amounts: (a) ten percent (10%) per annum; or, (b) two points over the 11th District Federal Reserve Bank index. Provided, however, if such rate would violate the usury laws of the State of California, then the rate shall be at set forth in Paragraph 2(a) hereof. 3. Payments. I will make any payments at Lender's offices located at 505 S. Vulcan Avenue, Encinitas, California 92024. This Note is due and payable, including the principal and interest thereon, if any, upon default by me, or when a Prohibited Transfer occurs as derIDed in the Deed of Trust. This Note will be forgiven on the date which is fifty-five (55) years after the recordation of the Deed of Trust securing this Note, if the Borrower has not defaulted or made a Prohibited Transfer of the Property, or any portion thereof. 4. This Note Secured by a Deed of Trust In addition to the protection '"- '-......./ given to Note Holder under this Note, a Deed of Trust dated the same day as this Note protects Note Holder from possible losses which might result if I do not keep the promises which I make in this Note. That Deed of Trust describes how and under what conditions I may be required to make immediate payment in full of all amounts that I owe under this Note. 5. Borrower's Waiver. I waive my rights to require Note Holder to do certain things. Those things are: (a) to demand payment of amounts due (known as "prsentment"); (b) to give notice that amounts due have not been paid (known as "notice of dishonor"); and, (c) to obtain any official certification of nonpayment (known as "protest"). Anyone else who agrees to keep the promises made in this Note, or who agrees to make payments to Note Holder if I fail to keep my promises under this Note, or who signs this Note to transfer it to someone else also waives these rights. These persons are known as "guarantors, sureties and endorsers". 6. Givin~ of Notices. Any notice that must be given to me under this Note will be given by delivering it or by mailing it by certified mail addressed to me at the Property Address above. A notice will be delivered or mailed to me at a different address if I give a notice of that different address. Any notice that must be given to the Note Holder undethis Note will be given by mailing it by certified mail to Note Holder at the address stated in paragraph 3 above. A notice will be mailed to Note Holder at a different address if I am given a notice of that different address. [remainder of page intentionally left blank] A:\NOTE.DOC Page 2 of 8 '- '-" 7. Responsibility of Persons Under This Note. If more than one person signs this Note, each of us is fully and personally obligated to pay the full amount owed and to keep all promises made in this Note. Any guarantor, surety or endorser of this Note (as described in paragraph 6 above) is also obligated to do these things. Note Holder may enforce its rights under this Note against each of us individually or against all of us together. This means that anyone of us may be required to pay all of the amounts owed under this Note. Any person who takes over my rights or obligations under this Note will have all of my rights and must keep all of my promises made in this note. Any person who takes over the rights and obligations of a guarantor, surety or endorser of this Note (as described in paragraph 6 above) is also obligated to keep all of the promises made in this Note. 8. Attorneys' Fees. Upon the breach of the terms of this Note, the Deed of Trust securing it, and/or the Covenants, Conditions and Restrictions encumbering the Property, I agree to pay Lender any and all attorneys' fees, court costs, trustee fees, and any and all other fees and costs incurred by Lender as a result of said breach and/or default. NOTICE TO BORROWER: Do not sign this Note if it contains blank spaces. All spaces should be completed before you sign. The Note Rider executed by Borrower is attached hereto and made a part of this Note. Date: J) /t?t - ~ j> /J~ Francisca Gastelum, Borrower (SIGN ORIGINAL ONLY) A:\NOTE.DOC Page 3 of 8 --/ -- NOTE RIDER ¡j. THIS NOTE RIDER is attached to and made a part of the Note, datecNovember 1998 made payable to the CITY OF ENCINITAS ("CITY") as Lender and executed by Borrower. 1. Borrower agrees to the provisions of this Note Rider in addition to those of the Note. THE LANGUAGE OF THIS RIDER PRW AILS OVER THE PROMISSORY NOTE IN THE EVENT OF A CONFLICT. 2. Transfer. Conveyance of Property Restricted for Fifty Five (55) Yeæ:s The sale, transfer andlor conveyance of the Property is restricted as follows: If Borrower sells, transfers or conveys the Property less than fifty five (55) years after the date of recordation of the Deed of Trust securing this Note Rider, then said sale, conveyance and/or transfer shall be subject to the following: (a) The Property may only be sold, transferred or conveyed to a subsequent purchaser whose income is less than eighty percent (80%) of the median income as defmed by HUD from time to time for the San Diego metropolitan area, as adjusted for family size, and verified by CITY. (b) Except as provided in Paragraph 2(d) hereof, the Property must be used only as the principal residence of the subsequent purchaser during the time of ownership. (c) The sale price to the subsequent purchaser must be at a price that is "affordable to the subsequent purchaer(s)". "Affordable to the subsequent purchaser(s)" is achieved if the monthly payments for principal, interest, property taxes, insurance and a utility allowance do not exceed thirty percent (30 %) of the gross income of a family with an income that is eighty percent (80%) of the median income for the area, for a family of three. III /11 A:\NOTE.DOC Page 4 of 8 ,,-.. -- (d) In the event that a Transferor is unable to find, despite diligent efforts to do so, an Eligible Person or Family to purchase a Housing Unit, the Transferor may sell the Housing Unit to a person other than an Eligible Person or Family by fITst offering to sell the Housing Unit to the CITY for a purchase price equal to highest purchase price at which an Eligible Person or Family could qualify to purchase the Housing Unit at an Affordable Housing Cost. The CITY shall accept or reject the offer to sell the Housing Unit to the CITY within thirty (30) days of the date of receipt of the offer to sell. In the event that the CITY declines to purchase the Housing Unit, the Transferor may proceed to market and sell the Housing Unit to any purchaser without regard to the resale conditions set forth in this Agreement; provided that upon or prior to the close of escrow the Transferor shall pay to the CITY the greater of: 1) the amount of the Second Deed of Trust, or 2) "Equity Sharing Amount", hereinafter defined. The "Equity Sharing Amount" means an amount equal to the appreciation in the value of the Property determined by the difference between the Sales Price and the Affordable Housing Price (as defined below). The" Affordable Housing Price" is the purchase price that could be paid by an Eligible Person or Family at an Affordable Housing Cost. The "Sales Price" is the price to be paid by the buyer of the Property (the "Buyer") to the Transferor for Transferor's interest in the Property, exclusive of escrow fees, title insurance costs, broker's commissions, loan fees or any other closing or transaction costs. Upon a showing of hardship by the Transferor to the CITY in writing, the CITY may waive anyone or combination of the following: the resale restrictions, the Transferor's obligation to sell to the CITY, the Transferor's obligation to pay the CITY the Equity Sharing Amount and/or the Transferor's obligation to pay the CITY the amount of the Second Deed of Trust. (e) The affordability requirement shall remain in effect for a total of fifty five (55) years, measured from the date of this Deed of Trust. This requirement shall remain in full force and effect against all subsequent purchasers during the restricted term. This restriction shall also apply to sales of the Property from the subsequent purchaser to other purchaser(s) during the restricted term. A:\NOTE.DOC Page 5 of 8 --- - (t) If the Borrower fails, refuses or is unable to convey, sell, rent or transfer the Property to a person or persons meeting the requirements of paragraphs 16, 17a through 17e, inclusive, before the end of the affordability term as defined in paragraph 17e, then such transfer shall be deemed a Prohibited Transfer as defmed in Paragraph 18 hereof. These provisions of paragraph 17 shall bind the heirs, succelDrs and assigns of the Borrower. 3. Prohibited Transfer. If Borrower sells, agrees to sell, conveys, rents and/or transfers the Property in violation of the terms of Paragraph 2 hereof and Paragraphs 16 and 17 of the Second Deed of Trust, then CITY may, at its option, in addition to any and all other remedies available to it, require immediate payment in full of all sums secured by the Second Deed of Trust. In the instance of a prohibited transfer, the Transferor shall pay to the CITY the greater of: 1) the amount of the Second Deed of Trust, including any interest, as described in the Note, or 2) "Equity Sharing Amount", as defmed above. As an alternative, CITY may, at its option, purchase the Propeqyfor a purchase price equal to the highest purchase price at which an Eligible Person or Family could quality to purchase the Housing Unit at an Affordable Housing Cost. However, these options shall not be exercised by CITY if such exercise is prohibited by federal law as of the date of the Deed of Trust or if the CITY has executed a separate written waiver of these options. If CITY exercises any of these options, CITY shall give Borrower Notice of Acceleration or, in the alternative, Notice of Exercise of First Right of Refusal Option. The notice shall provide a period of not less than thirty (30) days from the date that the notice is delivered or mailed within which Borrower must pay all sums secured by the Deed of Trust or must enter into an escrow to convey the Property to CITY, depending upon the option exercised by CITY. If Borrower fails to pay these sums or enter into an escrow prior to the expiration of this period, CITY may invoke any remedies permitted by the Deed of Trust without further notice or demand on Borrower. The escrow contemplated by this Paragraph 3 must close not more than ninety (90) days after CITY receives notice of such sale, agreement to sell, conveyance, rental or transfer of the Property in violation hereof. 4. Warranties of Borrowec Borrower waIrants to CITY as follows: (a) Borrower's household annual gross income does not exceed eighty percent (80%) of the median income for the San Diego metrpolitan area, as adjusted for family size, as said median income is determined by HUD, on the latter of: A:\NOTE.DOC Page 6 of 8 - "-' (1) the date of occupancy of the Property; or, (2) the date of the recordation of the Deed of Trust. (b) Except as provided in Paragraph 16 of the Deed of Trust for so long as Borrower owns the Property, Borrower will reside in the Property as Borrower's principal place of residence and will not rent, lease or sublet the Property during the term of the Declaration, i.e., fifty five (55) years. NOTICE TO BORROWER: Do not sign this Note Rider if it contains blank spaces. All spaces should be completed before you sign. Date: /1- I :z - r J' ~4~Æ'A!/.lß~ Francisca Gastelum, Borrower (SIGN ORIGINAL ONLY) A:\NOTE.DOC Page 7 of 8 '- ---" ACKNOWLEDGMENT State of California ) ) County of San Diego ) On Nw. I~ . 1998, before m~ j (J S. '~.h'd£r personally appeared, +=v-~~CJL., G\'Qsk.e t.UV\.¡ lJer3ðnall, known to IllC (or proved to me on the basis of satisfactory evidence) to be the person.'(> whose nameOO is/tie subscribed to the within instrument "NOTE" AND "NOTE RIDER" and acknowledged to me that \1é/she/tbéÝ executed the same in hji/her/thØ authorized capacity(~s), and that by prs/her/thtIr signature(~ on the instrument the personçs1, or the entity on behalf of which the person(/) acted, executed the instrument. HOllY S. PAINTER CQMM,t 1178882 p( NOT MY PUBlIC-CAUFORNIA SAN DIEGO COUNTY .:. MY COMMISSION EXPIRES WITNESS my hand and official seal. MARCH 21, 2002 Signature ~ 1=/ <î.LL<-t.....J'L- (Seal) A:\NOTE.DOC Page 8 of 8