2012-601013 D O C ## 201 2-0601 01 3
FREE RECORDING REQUESTED 111111111111111111111111111111111111111111111111111111111111111111IN
PURSUANT TO GOV. CODE SECTION H OCT 02, 2012 4.24 PM
27383
OFFICIAL RECORDS
Recording Requested B : SAN DIEGO COUNTY RECORDER'S OFFICE
g q y Ernest J Dronenburg,Jr.COUNTY RECORDER
!(,,I f i FEES 0.00
City of Encinitas PAGES: 10
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 255-222-46 & 47
AFFORDABLE HOUSING REGULATORY AGREEMENT
(Density Bonus)
This Affordable Housing Regulatory Agreement (hereinafter the "REGULATORY
AGREEMENT") is made and entered into and is effective as of this Z'1'lay of September,
2012 by and between the City of Encinitas (hereinafter the "CITY"), and CityMark Olivenhain
LLC, a California 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 11-063, 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 minimum
period of thirty (30) years;
C Whereas, the OWNER has designated Lot 9 of TM 11-063 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:
1. 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 11-063. The interior
appearances, finishes, and amenities of the UNIT shall be comparable to new,
affordable units in the community
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
units 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 fifth 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 1,868 square feet of living space with a minimum
of four bedrooms and two and one-half 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.
I 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
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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) for two consecutive weeks. 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.
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 cost (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 seven-person
household
1) The calculation of the affordable sales price shall include a five percent
downpayment.
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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); or, other determined
enforceable document approved by the CITY
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 seven—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.
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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.
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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 OWNER
City of Encinitas CityMark Olivenhain LLC
505 S. Vulcan Ave. 3818 Park Blvd
Encinitas, CA 92024 San Diego, CA 92103
Attn- Housing Administrator Attn: Richard Gustafson, Manager
7
IN WITNESS WHEREOF, OWNER has executed this REGULATORY AGREEMENT as of the
day and year first above written.
OWNER
CityMark Olivenhain LLc, a California limited liability company /
By: Date- ,Z-
Richard V. Gustafson, ager
(Notarization of signature must be attached)
CITY
City of Encinitas
By- -- �-� Date: '�-2-7 /Z--
Tom Curriden, City Planner
(Notarization not required)
8
ATTACHMENT A
LEGAL DESCRIPTION
PARCEL 1 (APN: 255-222-47)
THE EASTERLY 111.00 FEET (MEASURED ALONG THE NORTH LINE) OF THAT
PORTION OF LOT 12, RANCHO LAS ENCINITAS, IN THE COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 848, FILED IN THE OFFICE
OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 27, 1898, DESCRIBED AS
FOLLOWS.
BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 12; THENCE SOUTH 87°03'30"
WEST, 1213.52 FEET, ALONG THE NORTHERLY LINE OF SAID LOT TO THE TRUE POINT
OF BEGINNING; THENCE CONTINUING ALONG SAID NORTHERLY LINE, SOUTH 870
03'30" WEST, 446 00 FEET; THENCE SOUTH 02 056'30" EAST, 300.00 FEET; THENCE
NORTH 87 003'30" EAST, 446 00 FEET; THENCE NORTH 02 056'30" WEST, 300 FEET TO
THE TRUE POINT OF BEGINNING.
PARCEL 2 (APN. 255-222-46)
THE WESTERLY 111 00 FEET OF THE EASTERLY 222.00 FEET (MEASURED ALONG THE
NORTH LINE) OF THAT PORTION OF LOT 12, RANCHO LAS ENCINITAS, IN THE
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO.
848, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
JUNE 27, 1898, DESCRIBED AS FOLLOWS
BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 12, THENCE SOUTH 87 003'30"
WEST, 1213 52 FEET, ALONG THE NORTHERLY LINE OF SAID LOT TO THE TRUE POINT
OF BEGINNING; THENCE CONTINUING ALONG SAID NORTHERLY LINE, SOUTH 870
03'30" WEST, 446.00 FEET; THENCE SOUTH 02 056'30" EAST, 300.00 FEET; THENCE
NORTH 87 003'30" EAST, 446.00 FEET, THENCE NORTH 02 056'30" WEST, 300 FEET TO
THE TRUE POINT OF BEGINNING.
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT
State of Cali ornia
County of San Diego
On September 27 2012 before me, Kris Johnson, Notary Public personally
appeared Richard Gustafson who proved to me on the basis of satisfactory evidence
to be the person whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/they authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the persons) acted, executed the instrument.
I certify under PENALTY OF PERJURY, under the laws of the State of California, the
foregoing paragraph is true and correct
WITNESS my hand and official seal. KRIS JOHNSON
Commission# 1871689
ZZ
a Notary Public-California
Y� San Diego County
' My r rpm Expires Nov 20,2013
Kris ohn n, Notary Public
missio 41 1689
ti 1y Commis on Expires :November 20, 2013
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 ofAttached Document
Affordable Housing Regulatory Agreement (Density Bonus)
A.P.N—255-222-46& 47
Number of Pages 10 (including Notary Form)
Document Date September 27, 2012
CA Rev 1,01,'08