2011-626856FREE RECORDING REQUESTED
PURSUANT TO GOV. CODE SECTION
27383
Recording Requested By:
City of Encinitas
Planning and Building Department
505 S Vulcan Avenue
Encinitas, CA 92024
And When Recorded Mail To:
City of Encinitas
Planning and Building Department
505 S Vulcan Avenue
Encinitas, CA 92024
Attn• Housing Administrator
A P N 254 - 351 -30 & 31
DOC# 2011 - 0626856
111111111111111111111111111111111111111111111111111111111111111111 IN
NOV 22, 2011 4:59 PM
OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
Ernest J Dronenburg. Jr , COUNTY RECORDER
FEES 0.00
PAGES: 10
AFFORDABLE HOUSING REGULATORY AGREEMENT
�`Z 1 (Density Bonus)
' \V'
This Affordable Housing Regulatory Agreement (hereinafter the "REGULATORY
AGREEMENT ") is made and entered into and is effective as of this 2.z&day of November,
2011 by and between the City of Encinitas (hereinafter the "CITY "), and Warmington Encinitas
41, LLC, a Delaware limited liability company (hereinafter the "OWNER ")
RECITALS
A. Whereas, the OWNER is the owner of real property (hereinafter the
"PROPERTY ") described in Attachment A, attached hereto and made a part
hereof;
B Whereas, the CITY approved a Density Bonus for Tentative Map 06 -112 and 11-
121, in accordance with Government Code 65915, and under said law the
OWNER must restrict occupancy in one unit to a very low- income household for
a term of thirty (30) years;
C Whereas, the OWNER has designated Lot 10 of TM 06 -112 and 11 -121 as the
required affordable unit and the OWNER has agreed to construct a new
residential unit (hereinafter "UNIT ") on the PROPERTY; and,
D Whereas, in order to restrict use of the affordable UNIT, the OWNER is bound by
this REGULATORY AGREEMENT and has consented to be regulated and
restricted as provided herein
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NOW, THEREFORE, the parties hereto agree as follows:
TERM OF AGREEMENT.
The term of this REGULATORY AGREEMENT shall commence on the issuance of a
certificate of occupancy for the UNIT and shall continue for thirty (30) years
2 DEVELOPMENT OF THE AFFORDABLE UNIT
A. OWNER shall construct a new residential unit on the PROPERTY
B The exterior appearance of the affordable UNIT shall be compatible with units in
the surrounding neighborhood, including units within TM 06 -112 and 11 -121
The interior appearance finishes, and amenities of the affordable UNIT shall be
comparable to new, affordable homes in the CITY or surrounding communities
C Prior to the commencement of construction, the quality of materials, floor
coverings, cabinets, fixtures, appliances, doors, and windows shall be specified
in sufficient detail to ensure that the quality level is comparable to new affordable
homes in the CITY or surrounding communities to the satisfaction of the Planning
and Building Director (hereinafter, the "DIRECTOR ")
D If lots in subdivision are marketed under a custom lot sale program, then the
UNIT shall be constructed as the first unit in the subdivision. If the subdivision is
subjected to design review and /or constructed by a single builder in one or more
phases, the UNIT shall be constructed and certification of occupancy issued prior
to the construction of the eighth market rate unit.
E The UNIT shall be made affordable to a very low- income household earning fifty
percent (50 %) or less of the Area Median Income (AMI) for San Diego County, and
adjusted for household size, as published periodically by the U S Department of
Housing and Urban Development (HUD).
F Occupancy of the UNIT shall be appropriate to the number of bedrooms in the
UNIT As a general rule and policy, an appropriately sized household is no less
than one person per bedroom and no more than two persons per bedroom, which
is reasonable under the Fair Housing Act and intent of program assistance
G The UNIT shall be a minimum of 1,500 square feet of living space with a minimum
of three bedrooms and two baths, plus a two -car garage Based on a significant
reason, the UNIT size may be reduced through approval of a Design Review
permit.
H The UNIT shall be provided with adequate usable yard area comparable to new,
affordable units in the community
During the term of this agreement, the UNIT 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 days) is specifically prohibited
3 OPTION TO RENT OR SELL UNIT
A. Upon completion of construction of the UNIT, the OWNER shall either rent or sell
the UNIT to an eligible, very low- income household (as defined in Section 2.E), and
in accordance with the terms and conditions contained herein.
B OWNER shall make the UNIT available for sale or rent to the general public through
an advertisement in local newspaper(s). Applications shall be made available and
accepted for a minimum of fourteen days The OWNER may employ additional
marketing methods that are in accordance with professional standards of the
industry and fair housing laws. The CITY will require documentation of the selection
process and the CITY may additionally advertise the UNIT availability
C OWNER is prohibited from renting or selling the UNIT to a family member, relative,
employee, or pre- determined household.
D OWNER may sell the property with the prior written approval of the DIRECTOR.
The sale of the UNIT may be to a non - qualifying household, if the UNIT will be
continuously rented to a qualifying very low- income household At the time of said
sale, the subsequent owner shall execute a new Affordable Housing Regulatory
Agreement with the CITY The City shall require the subsequent owner to post a
performance bond or provide other assurances of performance within the
identified construction schedule (as described in Section 2 D)
4 OPTION TO SELL (Except as provided for in Section 3.D)
A. The UNIT shall only be sold to a very low- income household (as defined in Section
2 E) In addition, the homebuyer must certify that the household will occupy the
UNIT as owner - occupant and principal residence, and that the household does not
own or have an interest in any real property
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 the UNIT, 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 E), based on a five - person
household
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 the UNIT, the DIRECTOR shall approve the sales price (as
described in Section 4.D).
E OWNER shall record deed restrictions, approved by the DIRECTOR, that restrict the
resale of the property 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 property 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 UNIT shall be rented only to a very low- income household (as defined in
Section 2.E). 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 monthly rental rate to be charged for the UNIT shall be consistent with
State law and be based on thirty percent (30 %) of fifty percent (50 %) of AMI (as
defined in Section 2.E) for a five — person household (divided by 12 months) The
DIRECTOR shall approve the maximum rental rate for the UNIT, including the
applicable utility allowance Rental rate may be adjusted periodically in accordance
with the current AMI schedule (as defined in Section 2.E)
C 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 OWNER shall re- certify the tenant's income status every twelve months In the event a
tenant no longer qualifies as very low- income, the 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 UNIT 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.
IH
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 OWNER is responsible to maintain the leased UNIT 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 UNIT
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 representative with
access to inspect the UNIT for compliance with this section
D OWNER shall obtain, and at all times during the term of this REGULATORY
AGREEMENT shall maintain policies of general liability and property damage
insurance from an insurance company authorized to be in business in the State of
California. The property damage insurance shall be in an amount sufficient to
replace the UNIT in the event of fire or other major damage. OWNER may self -
insure, with the prior written approval of the DIRECTOR.
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. OWNER shall make a good faith effort to expeditiously re -rent the UNIT whenever it
becomes vacant. In the event the UNIT is 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 is not continuously rented (i.e , vacancies of
more than 30 days)
7 REPORTING REQUIREMENTS (APPLIES TO RENTAL OPTION ONLY)
OWNER shall submit a report to the DIRECTOR immediately after initial lease -up of the
UNIT and annually thereafter, on a form prescribed by the DIRECTOR. The report shall
include information on the household(s) occupying the affordable UNIT 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 or homebuyer on the basis
of race, color, religion, sex, national origin, familial status, disability or other individuals
protected under State and Federal fair housing law
9 CERTAIN ACTS PROHIBITED
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 PROPERTY 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 UNIT 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 Density Bonus program
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, provided, however, 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
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holds an ownership interest, or any person or entity that holds an ownership interest in
the PROPERTY
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
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
City of Encinitas
505 S. Vulcan Ave
Encinitas, CA 92024
Attn Housing Administrator
OWNER
Warmington Encinitas 41 LLC
c/o Warmington Residential California
3090 Pullman Street
Costa Mesa, CA 92626
Attn Brian Sinderhoff, President
IN WITNESS WHEREOF, OWNER has executed this REGULATORY AGREEMENT as of the
day and year first above written
OWNER
Warmington Encinitas 41 LLC, a Delaware Limited Liability Company
By- Warmington 2011 Pool, LLC, a Delaware Limited Liability Company, Its Member
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By, WRG Builder I, L.P , a California Limited Partnership, Managing Partner
Partner
By: Warmington Residential California, Inc., a California Corporation, General
By: DATE
Matthew L. Tinglei
Executive Vice President
CITY
City of Encinitas
au-
By:
(Notarization of signature must be attached)
Tom Curriden, City Planner
(Notarization not required)
M
DATE
ACKNOWLEDGMENT
State of California
County of Orange )
On November 21, 2011 before me, Catherine Goldman, Notary Public
(insert name and title of the officer)
personally appeared Matthew L. Tingley
who proved to me on the basis of satisfactory evidence to be the person(s)'whose name(e) is /aw
subscribed to the within instrument and acknowledged to me that he /sheA+M executed the same in
his /tiad#!}&W authorized capacity(ies), and that by his/her signatureW on the instrument the
person(A-), or the entity upon behalf of which the persona) 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.
CATHERINE GOLOMAN
Commission #►1940638
WITNESS my hand and official seal �i .,, Notary Public - CoWnis
Orange County
my Comm. Expires Jun 19, 2015
Signature _ �� (Seal)
ATTACHMENT A
LEGAL DESCRIPTION
PARCEL 1 (APN: 254- 351 -30)
PARCEL "A" AS SHOWN ON CERTIFICATE OF COMPLIANCE, AS EVIDENCED BY
DOCUMENT RECORDED SEPTEMBER 7, 2005 AS INSTRUMENT NO 2005 - 0773557, OF
OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS
THOSE PORTIONS OF LOTS 37, 38 AND 42 OF HILLSIDE ACRES, IN THE CITY OF
ENCIMTAS, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP
THEREOF NO 1992, RECORDED JANUARY 25, 1927 IN THE OFFICE OF THE COUNTY
RECORDER OF SAID SAN DIEGO COUNTY.
LYING NORTHERLY OF THE FOLLOWING DESCRIBED LINE.
BEGINNING AT THE EASTERLY CORNER OF SAID LOT 42, THE NORTHERLY LINE OF
SAID LOT HAVING A BEARING OF SOUTH 89° 13'28" EAST (RECORD SOUTH 89° 55'10"
EAST); THENCE SOUTH 520 39' 38" WEST 206 06 FEET, THENCE SOUTH 15° 56' 34"
WEST 131 65 FEET, THENCE SOUTH 860 50' 56" WEST 334 02 FEET TO THE POINT OF
TERMINUS ON THE WESTERLY LINE OF SAID LOT 42
PARCEL 2 (APN: 254- 351 -31)
PARCEL "B" AS SHOWN ON CERTIFICATE OF COMPLIANCE, AS EVIDENCED BY
DOCUMENT RECORDED SEPTEMBER 7, 2005 AS INSTRUMENT NO 2005 - 0773557, OF
OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS
ALL OF LOT 38 TOGETHER WITH THOSE PORTIONS OF LOTS 37 AND 42 OF HILLSIDE
ACRES, IN THE CITY OF ENC1NITAS, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA,
ACCORDING TO MAP THEREOF NO 1992, RECORDED JANUARY 25, 1927 IN THE
OFFICE OF THE COUNTY RECORDER OF SAID SAN DIEGO COUNTY.
LYING SOUTHEASTERLY AND NORTHEASTERLY OF THE FOLLOWING DESCRIBED
LINE
BEGINNING AT THE EASTERLY CORNER OF SAID LOT 42, THE NORTHERLY LINE OF
SAID LOT HAVING A BEARING OF SOUTH 89° 13'28" EAST (RECORD SOUTH 89° 55'10"
EAST), THENCE SOUTH 52° 39' 38" WEST 206 06 FEET, THENCE SOUTH 15° 56' 34"
WEST 131 65 FEET; THENCE SOUTH 39° 23' 15" EAST 196.02 FEET TO A POINT ON THE
SOUTHEASTERLY LINE OF THE NORTHWESTERLY HALF OF SAID LOT 37 THENCE
ALONG SAID SOUTHEASTERLY LINE NORTH 500 18' 30" EAST 100 00 FEET TO THE
POINT OF TERMINUS IN THE SOUTHWESTERLY LINE OF SAID LOT 38
9