2013-587946 DOC # 20 1 3-0587946
11111 11111 1111 IN
FREE RECORDING REQUESTED SEP 26, 2013 12:07 PM
PURSUANT TO GOV. CODE SECTION ' j
27383 �� DD OFFICIAL RECORDS
(� SAN DIEGO COUNTY RECORDER'S OFFICE
Recording Requested B Ernest J. Dronenburg,Jr.,COUNTY RECORDER
g q y FEES: 2.00
II� PAGES: 10
City of Encinitas l
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. 254-400-14 &19
AFFORDABLE HOUSING REGULATORY AGREEMENT
(Density Bonus)
C
This Affordable Housing Regulatory Agreement (hereinafter the "REGULATORY
AGREEMENT") is made and entered into and is effective as of this IZ±J,day of September,
2013 by and between the City of Encinitas (hereinafter the "CITY"), and Lennar Homes of
California, Inc., A California Corporation (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 11-189, in
accordance with Government Code 65915, and under said law the OWNER must
restrict occupancy in two units to a very low-income households for a minimum
period of thirty (30) years;
C. Whereas, the OWNER has designated Lot 1 and Lot 2 of TM 11-189 as the
required affordable unit and the OWNER has agreed to construct two new
residential units (hereinafter "UNITS") on the PROPERTY; and,
D. Whereas, in order to restrict use of the affordable UNITS, 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 UNITS
A. OWNER shall construct two new residential units on the PROPERTY.
B. The exterior appearance of the affordable UNIT shall be compatible with units in
the surrounding neighborhood, including units within TM 11-189. The interior
appearances, finishes, and amenities of the UNITS 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
UNITS 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 UNITS shall be constructed and receive a certificate of final
occupancy prior to the issuance of any building permit for the thirteenth market
rate unit for the subdivision.
E. The UNITS shall be made affordable to two very low-income households 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 UNITS shall be appropriate to the number of bedrooms in each
of the UNITS. 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 UNITS shall be built as shown by the plans submitted to the City on January 7,
2013 and approved by the Planning Commission on February 7, 2013, reflecting a
three bedroom, two bathrooms and two car garage. Based on a significant reason,
the UNIT size may be reduced through approval of a Design Review permit.
H. The UNITS shall be provided with adequate usable yard area comparable to new,
affordable units in the community.
I. During the term of this 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 days) is specifically
prohibited.
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3. OPTION TO RENT OR SELL UNITS
A. Upon completion of construction of the UNITS, the OWNER shall either rent or sell
the UNITS to 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 UNITS 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
UNITS availability.
C. OWNER is prohibited from renting or selling the UNITS 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 UNITS shall only be sold very low-income households (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 UNITS, OWNER shall provide CITY with each of
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 UNITS 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 five-person
household.
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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 UNITS, 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 UNITS shall be rented only to very low-income households (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 UNITS 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 AM[ 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 UNITS shall enter into a written occupancy
agreement or lease with the OWNER. OWNER shall use the standard lease form
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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. 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 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 UNITS 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 UNITS whenever it
becomes vacant. In the event the UNITS 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 UNITS 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
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 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 Lennar Homes of California, Inc., A
California Corporation
Coastal Division
505 S. Vulcan Ave. 25 Enterprise, Suite 100
Encinitas, CA 92024 Aliso Viejo, CA 92656
Attn: Housing Administrator Attn: David Stearn
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IN WITNESS WHEREOF, OWNER has executed this REGULATORY AGREEMENT as of the
day and year first above written.
OWNER
Lennar Homes of lifornia, Inc., A California Corporation
By; Date:
John Baay (Yahya Zakour Baayoun)
( tarization of signature must be attached)
CITY
City of Encinitas _
By:
Date: q' 1 z - 13
Tom Curriden, City Planner
(Notarization not required)
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r
STATE OF CALIFORNIA )
SS.
COUNTY OF ORANGE )
On August 30, 2013, before me M. Sue Rudolph,Notary Public, personally appeared John Baayoun, who
proved to me on the basis of satisfactory evidence, to be the person whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his authorized capacity, and that
by his signature on the instrument the person, 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 M.SUE RUDOLPH
Commission#2003854
Notary Public-California i
Z � Orange County
Signature (SEAL) My Comm. Expires Feb 9,20»
ATTACHMENT A
LEGAL DESCRIPTION
Real property in the City of Encinitas,County of San Diego,State of California,described as
follows:
PARCEL A:(APN:254-400-19-00)
THAT PORTION OF LOT 1 IN BLOCK"G"OF SOUTH COAST PARK ANNEX, IN THE CITY OF
ENCINITAS,COUNTY OF SAN DIEGO,STATE OF CALIFORNIA,ACCORDING TO THE MAP
THEREOF NO. 1788,FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO
COUNTY,MARCH 29,1924,LYING EASTERLY OF A LINE DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE SOUTH LINE OF SAID LOT 1,DISTANT THEREON 413 FEET
WESTERLY FROM THE SOUTHEASTERLY CORNER OF SAID LOT 1;THENCE NORTH 00 04 50"
EAST IN A STRAIGHT LINE TO A POINT IN THE NORTHERLY LINE OF SAID LOT 1.
EXCEPTING THEREFROM THAT PORTION THEREOF CONVEYED TO THE STATE OF CALIFORNIA,
BY DEED RECORDED APRIL 20,1962 AS INSTRUMENT NO.67749 OF OFFICIAL RECORDS,
BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
ALL THAT PART OF THE PORTION OF LOT 1 IN BLOCK"G"OF SOUTH COAST PARK ANNEX,
ACCORDING TO MAP THEREOF NO. 1788,FILED IN THE OFFICE OF THE COUNTY RECORDER
OF SAN DIEGO COUNTY,MARCH 29, 1924 AS CONVEYED TO PHILLIP L.B.SCOTT,ET U;x,By
DEED RECORDED JUNE 30,1959 IN BOOK 7744,PAGE 20 OF OFFICIAL RECORDS,FILED IN
THE OFFICE OF SAID COUNTY RECORDER,DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHEASTERLY CORNER OF THAT PARCEL OF LAND AS CONVEYED TO
EUGENE C.CORNETT,ET UX,BY DEED RECORDED OCTOBER 27,1955 IN BOOK 5847,PAGE 43
OF SAID OFFICIAL RECORDS;THENCE ALONG THE SOUTHEASTERLY LINE OF SAID LOT I
SOUTH 890 00!31'EAST 147.41 FEET;THENCE LEAVING SAID SOUTHEASTERLY LINE NORTH
68-07'00-W EST,80.00 FEET;THENCE NORTH 13-39'00-WEST,291.71 FEET TO THE
EASTERLY LINE OF SAID PARCEL OF LAND AS CONVEYED TO SAID CORNETT;THENCE
SOUTHERLY ALONG SAID EASTERLY LINE,SOUTH 0-47'43-WEST,310.77 FEET TO THE
POINT OF BEGINNING.
ALSO THE UNDERLYING FEE INTEREST APPURTENANT TO THE ABOVE DESCRIBED PARCEL IN
THE ADJOINING PUBLIC WAY.
PARCEL B:(APN.-254-400-14-00)
LOT 5,BLOCK G OF SOUTH COAST PARK ANNEX,IN THE CITY OF ENCINITAS,COUNTY OF SAN
DIEGO,STATE OF CALIFORNIA,ACCORDING TO MAP THEREOF NO. 178B,FILED IN THE
OFFICE OF THE RECORDER OF SAID SAN DIEGO COUNTY,MARCH 29,1924.