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2011-108554RECORDING REQUESTED BY FIRST AMER/CAN TITLE National Commercial Services ~j FREE RECORDING REQUESTED PURSUANT TO GOV. CODE SECTION 2738: r e City of Encinitas Planning and Building Department 505 S. Vulcan Avenue Encinitas, CA 92024 And When Recorded Mail To: City of Encinitas 5883 Planning and Building Department 505 S. Vulcan Avenue Encinitas, CA 92024 Attn: Housing Administrator DOC# 2011-0108554 IIIIIIII IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIYNIII FEB 28, 2011 800 AM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE Ernest J. Dronenburg, Jr., COUNTY RECORDER FEES: 0.00 PAGES: 11 APN:258-161-11-00V/ G~ ' AFFORDABLE HOUSING REGULATORY AGREEMENT AMENDED AND RESTATED This amended and restated Affordable Housing Regulatory Agreement (hereinafter theme "REGULATORY AGREEMENT") is made and entered into and is effective as of this day of February, 2011 by and between the City of Encinitas (hereinafter the "CITY"), and Pacific Station Condo Sales, LLC, a Delaware limited liability company (hereinafter the "OWNER"). RECITALS A. Whereas, OWNER is the owner of the residential condominium units located at 687 South Coast Highway 101, Encinitas, CA. (hereinafter the "PROPERTY"); B. Whereas, the PROPERTY was previously subject to a certain Affordable Housing Regulatory Agreement dated August 5, 2008 and recorded in the Official Records of the County of San Diego on August 18, 2008 with document number 2008-0440730 (the "ORIGINAL REGULATORY AGREEMENT"); C. Whereas, the ownership of the PROPERTY has changed since the ORIGINAL REGULATORY AGREEMENT was entered into and recorded, and the UNITS (defined below) have been completed, necessitating cancellation, release, and replacement of the ORIGINAL REGULATORY AGREEMENT with this REGULATORY AGREEMENT; Affordable Housing Regulatory Agreement (Pacific Station) Page 1 of 8 5884 D. Whereas, on April 11, 2008, the CITY passed and adopted Resolution 2007-09, which approved a Tentative Map, Major Use Permit, Design Review and Coastal Permit (05-237) that permits the construction and condominium subdivision of a three-story, mixed-use development with 47 residential units, retail space, office space, and restaurant space; E. Whereas, to satisfy the provisions of Municipal Code Chapter 24.21 and certain conditions of approval of the Tentative Map, OWNER agrees to reserve four (4) of the residential units identified herein (the "UNITS") as affordable UNITS and comply with the tenant qualification and rent restrictions contained herewith; and, F. Whereas, in order to restrict use of the UNITS, the OWNER 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: TERMINATION OF ORIGINAL REGULATORY AGREEMENT; TERM OF REGULATORY AGREEMENT A. The ORIGINAL REGULATORY AGREEMENT is hereby cancelled, terminated, and released by way of a separate release of even date and recording herewith, and the PROPERTY is thereby released from the ORIGINAL REGULATORY AGREEMENT. B. The term of this REGULATORY AGREEMENT shall commence on the date of recordation of this REGULATORY AGREEMENT and shall continue in perpetuity. 2. IDENTIFICATION AND ACCEPTANCE OF THE AFFORDABLE UNITS A. The real property subject to this REGULATORY AGREEMENT consists solely of the four (4) UNITS commonly known as units 201, 203, 205, and 209, as more particularly described Attachment A attached hereto. The balance of the PROPERTY and the other residential units shall not be subject to this REGULATORY AGREEMENT. B. The UNITS are completed. The CITY has inspected the UNITS and finds that the UNITS are compliant with the Municipal Code and the requirements of the project approvals. C. The OWNER shall ensure that the appearance and amenities of the UNITS remain compatible and comparable with other units in the development. D. The UNITS shall be made affordable to very low-income households earning fifty percent (50%) or less of the Area Median Income (AMI)) for San Diego County, adjusted for household size, as published periodically by the U.S. Department of Housing and Urban Development (HUD). Affordable Housing Regulatory Agreement (Pacific Station) Page 2 of 8 5885 E. During the term of this REGULATORY AGREEMENT, the UNITS shall be utilized for residential use only in accordance with applicable local ordinances and regulations, any commercial use or transient habitation (of less than thirty (30) days) is specifically prohibited. 3. OPTION TO RENT OR SELL THE UNITS A. The OWNER shall either rent or sell the UNITS to eligible, very low-income households (as defined in Section 2.D), and in accordance with the terms and conditions contained herein. B. The OWNER shall make the UNITS available for rental or sale to the general public through an advertisement in local newspaper(s). Applications shall be made available and accepted for a minimum of fourteen (14) days. The OWNER may employ additional marketing methods that are in accordance with professional standards of the industry and fair housing laws. C. The OWNER is prohibited from selling or renting the UNITS to a family member, relative, or employee without prior written approval from the CITY. D. The OWNER may sell one or more of the UNITS to non-qualifying households provided that 1) the prior written approval of the CITY Director of Planning and Building (hereinafter the "DIRECTOR") is obtained, and 2) the UNITS will be continuously rented to qualifying low-income households. At the time of said sale(s), the subsequent owner(s) shall execute a new Affordable Housing Regulatory Agreement with the CITY. 4. OPTION TO SELL (Except as provided in Section 3.D.) A. The UNITS shall only be sold to very low-income household (as defined in Section 2.D). In addition, the homebuyers must certify that the households will occupy the UNITS as owner occupants and that the households do not own any real property in the State of California. B. For any proposed homebuyer, the income of all adult members of the household must be verified by the OWNER using source documentation (e.g., tax return, wage statement, bank statement, public benefit statement). C. Prior to opening escrow to sell UNITS, OWNER shall provide CITY with the proposed homebuyer's income statement and copies of the documentation of income. The DIRECTOR shall confirm or deny eligibility based on the documentation provided. D. The maximum affordable sales price for the UNIT shall be consistent with State law and be based on a total housing payment (including principal, interest, taxes, insurance, utility allowances, and any fees or assessments) of thirty percent (30%) of fifty percent (50%) of the AMI (as defined in Section 2.D), based on a two-person household. Affordable Housing Regulatory Agreement (Pacific Station) Page 3 of 8 5886 1) The calculation of the affordable sales price shall include a five percent downpayment. 2) The interest rate used in the calculation shall be based on the current Freddie Mac Monthly Average Commitment Rate on 30-Year Fixed- Rate Mortgages. 3) Actual financing to be obtained by any prospective homebuyer shall be a fixed rate loan fully amortized over thirty years. Prior to the sale of UNITS, the DIRECTOR shall approve the sales price (as described in Section 4.D). E. The OWNER shall record deed restrictions, approved by the DIRECTOR, that restrict the resale of the UNITS only to other eligible households for the term of the REGULATORY AGREEMENT. The CITY shall enforce the deed restrictions by recording a second deed of trust on the UNITS securing a note; the amount of the note shall be equal to the amount of subsidy provided by the OWNER (the difference between the market price and the affordable sales price). 5. OPTION TO RENT A. The UNITS shall be rented only to very low-income households (as defined in Section 2.D). Prior to occupancy, the proposed tenant's household income must be verified using source documentation for all adult members of the household (e.g., tax return, wage statement, bank statements, public benefit statements). B. The maximum rental rate to be charged for the UNITS shall be consistent with State law and be based on thirty percent (30%) of fifty percent (50%) of AMI for very low- income households (as defined in Section 2.D) based on household size (divided by twelve months). The DIRECTOR shall approve the maximum rental rate for the UNITS, including the applicable utility allowance, which the tenant paid utilities are deducted from the maximum rental rate. The rental rate may be adjusted periodically in accordance with the current AMI and utility schedule (as defined in Section 2.D). C. The OWNER shall maintain tenant files containing information on the household income and the source documentation used by OWNER to determine household income. Said files shall be maintained for a period of three years from the termination of any tenancy. Upon written request, OWNER shall allow the CITY access to review tenants' files and financial records for compliance with this REGULATORY AGREEMENT. D. The OWNER shall re-certify the tenant's income status every twelve (12) months. In the event a tenant no longer qualifies as lower-income, the Affordable Housing Regulatory Agreement (Pacific Station) Page 4 of 8 5887 OWNER shall provide said tenant with the most expeditious eviction notice process, in accordance with applicable State law. 6. MANAGEMENT AND MAINTENANCE (Applies to Rental Option Only) A. Any tenant selected to occupy the UNITS shall enter into a written occupancy agreement or lease with the OWNER. OWNER shall use the standard lease form published by the California Apartment Association or other form approved by the DIRECTOR. B. Leases and the landlord-tenant relationship shall be subject to California law and the provisions of this REGULATORY AGREEMENT. The OWNER shall establish reasonable rules of conduct and occupancy that comply with State and local laws and regulations. C. The OWNER is responsible to maintain the leased UNITS in a habitable condition and in good repair at all times. OWNER is responsible for maintenance costs, including all repairs, corrections and replacements necessary to maintain and preserve the UNITS in a safe and sanitary condition in accordance with the U.S. Department of Housing and Urban Development's (HUD) Housing Quality Standards (HQS). Upon written request by the CITY, the OWNER shall provide DIRECTOR or his/her representative with access to inspect the UNITS for compliance with this section. D. OWNER shall obtain, and at all times during the term of this REGULATORY AGREEMENT, and maintain policies of general liability and property damage insurance from an insurance company authorized to be in business in the State of California. The general liability shall be in an amount of not less then $1,000,000 for each occurrence. The property damage insurance shall be in an amount sufficient to replace the UNITS in the event of fire or other major damage. OWNER shall provide CITY with Certificate of Insurance and an additional insured endorsement naming the City of Encinitas as Additional Insured. OWNER may self-insure, with the prior written approval of the City of Encinitas's Risk Manager. E. OWNER may contract with a management agent for the performance of the services or duties. However, such an arrangement does not relieve the OWNER of responsibility for proper performance of these duties. F. The OWNER shall make a good faith effort to expeditiously re-rent the UNITS whenever it becomes vacant. In the event the UNITS are vacant for a period of more than thirty (30) days, the OWNER shall notify the CITY. If available, CITY shall provide OWNER with a list of eligible households seeking rental housing. CITY can extend the affordable housing restriction period, if the UNIT(S) is not continuously rented (i.e., vacancies of more than 30 days). Affordable Housing Regulatory Agreement (Pacific Station) Page 5 of 8 5888 7. REPORTING REQUIREMENTS (Applies to Rental Option Only) OWNER shall submit a reportto the DIRECTOR immediately of the current tenants and after lease-up of vacated UNITS and annually thereafter, on a form prescribed by the DIRECTOR. The report shall include information on the household(s) occupying the affordable UNITS during the prior year, household income, and the amount of rent collected. Whenever requested by the CITY, the OWNER shall provide source documentation demonstrating the qualified status of the household(s). 8. NON-DISCRIMINATION OWNER shall not discriminate against any prospective tenant on the basis of race, color, religion, sex, national origin, familial status, or disability. 9. CERTAIN ACTS PROHIBITED The OWNER shall not make any sale, encumbrance (except for a first Deed of Trust associated with mortgage financing), assignment or conveyance, or transfer in any other form, of the UNITS or of its entire interest therein other than in accordance with the terms of this REGULATORY AGREEMENT. 10. VIOLATION OF REGULATORY AGREEMENT BY THE OWNER In the event of the violation of any of the provisions of this REGULATORY AGREEMENT by the OWNER, the CITY may give written notice thereof to the OWNER by registered or certified mail addressed to the OWNER at the address stated in this Regulatory Agreement, or to such other address as may have been designated by the OWNER, 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 OWNER of this REGULATORY AGREEMENT; for the appointment of a receiver to take over and operate the UNITS in accordance with the terms of this REGULATORY AGREEMENT; or for such other relief as may be appropriate, it being agreed by the OWNER 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 to the CITY which would afford adequate relief, in light of the purposes of the acquisition and rehabilitation funding. Affordable Housing Regulatory Agreement (Pacific Station) Page 6 of 8 5889 11. AMENDMENT This REGULATORY AGREEMENT shall not be altered or amended except by writing executed between the parties. 12. SEVERABILITY In the event that any provision or covenant of this REGULATORY AGREEMENT is held by a court of competent jurisdiction to be invalid or unenforceable, then it shall be severed from the remaining portions of this REGULATORY AGREEMENT, which shall remain in full force and effect. 13. 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 of the OWNER'S interest in the UNITS; provided, however, and except in the case where the OWNER sells the UNITS as allowed by this REGULATORY AGREEMENT, that the OWNER 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 any entity in which OWNER holds an ownership interest, or any person or entity that holds an ownership interest in the UNITS. 14. 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. 15. 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. 16. 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. 17. GOVERNING LAW This REGULATORY AGREEMENT shall be construed in accordance with and governed by the laws of the State of California. It is understood by the parties that Affordable Housing Regulatory Agreement (Pacific Station) Page 7 of 8 5890 the provisions of Section 4 of this REGULATORY AGREEMENT relating to the OWNER'S option to sell the UNITS are subject to approval by the California Coastal Commission of the CITY'S revised inclusionary housing ordinance, Ordinance No. 2010-08 (the "ORDINANCE"). Therefore, such sale provisions of Section 4 shall not be effective unless and until the California Coastal Commission approves the ORDINANCE. The CITY makes no representation or warranty regarding when such approval might be obtained, or that it will be obtained at all. 18. 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 OWNER City of Encinitas Pacific Station Condo Sales, LLC 505 S. Vulcan Ave 1959 Palomar Oaks Way, Suite 150 Encinitas, CA 92024 Carlsbad, CA 92011 Attn: Housing Administrator. Attn: Don Underwood IN WITNESS WHEREOF, OWNER has executed this REGULATORY AGREEMENT as of the day and year first above written. OWNER Pacific Station Condo Sales, LLC a Delaware limited liability company By CH Pacific Station, LLC a Delaware limited liability company, its Manager By: Concordia Communities, LLC a Delaware limited liability company its Manager By: Print Name: Jv- Title: M-,-S er (notarization of siqnature must be attached) PLE SIi` ILV" ED CITY JU-RA,,f_' ACS KN 0F-D E, MF,NT City of Encinitas By: cvw. Tom Curriden, City Planner Affordable Housing Regulatory Agreement (Pacific Station) Page 8 of 8 5831 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 State of California County of DlC(,D~c On'i ~ i (before me, Dates r~ f Here Ins N 9 and Tie of the Officer personally appeared Name(s) of CHRISTINA SNYDER Commission # 1920661 _ ~i Notary Public - California San Diego County M Comm. Ex fires Jan 6, 2015 Place Notary Seal Above who proved to me on the basis of satisfactory evidence to be the person(s) whose name( is/are- subscribed to the within instrument and acknowledged to me that he/ehefthe7r executed the same in his/he4#ieif-authorized capacity(ieo, and that by his/k~e}ei-- signature(s)-on the instrument the person(s); or the entity upon behalf of which the person(*-acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: C4 - Signature of NotaryPublic OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Mment f( ) , Title or Type of Document: J ~ C-&')I ✓ ~lWc) 0 C~ l A V 1 -A 7 -194 Document Date: A7-c",C) ~ L2c'x Signer(s) Other Than Named Above: Capacity(ies) Claimed b Signer(s) Signer's Name: ❑ Corporate Officer - Title(s): ❑ Individual Partner- ❑ Limited ❑ General Top of thumb here ❑ Attorney in Fact L_ Trustee Guardian or Conservator ❑Other: Signer Is Representing: r of Pages: Signer's Name: /A 1, A ❑ Corporate Officer - Title(s): ❑ Individual ❑ Partner - ❑ Limited ❑ General Top of thumb here ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: © 2010 National Notary Association - NationalNotary.org - 1-800-US NOTARY (1-800-876-6827) Item #5907 5892 A4~( A V Legal Description of Real Property Real property in the City of Encinitas, County of San Diego, State of California, described as follows: Forty-seven (47) condominiums comprised of. PARCEL 1: An undivided 47/47ths fee simple interest as a tenant in common in and to the Residential Common Area, as shown on that certain Condominium Plan for Pacific Station, recorded in the Office of the County Recorder of San Diego County, California, on January 19, 2011, as Document No. 2011-0033817 and any amendments or supplements thereto ("Condominium Plan"), 1/47th of which is appurtenant to each Residential Unit described in PARCEL 2 below and all of which is located within a portion of Lot 1 of CITY OF ENCINITAS TRACT 05-237, in the City of Encinitas, County of San Diego, State of California, according to Map thereof No. 15722, filed in the Office of the County Recorder of San Diego County, October 10, 2008, as corrected by Certificate of Correction recorded February 10, 2011 as Document No. 2011-0079751, in the Office of the County Recorder of San Diego County, California ("Map"); RESERVING THEREFROM, all easements reserved in the Residential Declaration (defined below) and Master Declaration (defined below), the Condominium Plan, the Map, and all other easements of record as of the date hereof. PARCEL 2: Residential Unit Nos. 201 through 238, inclusive, and 301 through 309, inclusive, as shown and described on the Condominium Plan; RESERVING THEREFROM, all easements reserved in the Residential Declaration and Master Declaration, as set forth and defined in numbered paragraphs 1 and 2 below, the Condominium Plan, the Map, and all other easements of record as of the date hereof. PARCEL 3: An exclusive easement to use each portion of the Master Association Property (defined in the Master Declaration described below) that is designated in the Condominium Plan as being an Exclusive Use Deck Area appurtenant to a Residential Unit described in PARCEL 2 above, if any, for the purposes described in the Residential Declaration and the Master Declaration. 5893 PARCEL 4: Non-exclusive, appurtenant easements in and to the Master Association Property, subject to the Residential Declaration and the Master Declaration, as set forth and defined in numbered paragraphs 1 and 2 below, for use thereof in accordance with and subject to the terms of the Residential Declaration and Master Declaration. 1. The Declaration of Covenants, Conditions and Restrictions for The Residences at Pacific Station recorded in the Office of the County Recorder of San Diego County, California on January 19, 2011, as Document No. 2011-0033820, and any amendments or supplements thereto ("Residential Declaration"); and 2. The Master Declaration of Covenants, Conditions and Restrictions and Grant of Reciprocal Easements for Pacific Station recorded in the Office of the County Recorder of San Diego County, California, on January 19, 2011, as Document No. 2011-0033818 and any amendments or supplements thereto ("Master Declaration").