2014-521610 V` * ,
Recording Requested By: D 0 C ## 2014-0521610
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Subdtv�swn Dept.
RECORDING REQUESTED NOV 26, 2014 4:59 PM
PURSUANT TO GOV. CODE SECTION OFFICIAL RECORDS
SAN DIEGO COUNTY RECORDER'S OFFICE
27383 Ernest J Dronenburg,Jr,COUNTY RECORDER
FEES 0.00
Recording Requested By: DA. 1
PAGES: 18
City of Encinitas 11111111111111 IN
Planning & Building Department
505 S. Vulcan Avenue
Encinitas, CA 92024
And When Recorded Mail To:
V� �k
\ � City of Encinitas
Planning & Building Department
505 S. Vulcan Avenue
Encinitas, CA 92024
Attn: Housing Programs Analyst
APN 254-731-11 ✓
DEED OF TRUST
(This is a Second Deed of Trust)
THIS DEED OF TRUST is made this t` day of oV " , 2014,
among the Trustor, JENNIFER L. MCCLUSKEY, AN UNMARRIED WOMAN AND PAUL
M JOHNSON, A SINGLE MAN AS JOINT TENANTS (herein "Borrower"), and FIRST
AMERICAN 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
Exhibit "A" attached hereto and incorporated herein by this reference
which has the address 1683 Shorebreak Way, 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 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 NrWAt49 200,2014, and Note Rider, and extensions
and renewals thereof (herein collectively referred to as the "Note"), in the principal sum of
three hundred sixty-seven thousand two hundred and thirty-one U S Dollars ($367,231)
with interest thereon, fully deferred with the total indebtedness, if not sooner paid, due
and payable upon default by Borrower, or when a Prohibited Transfer occurs as defined
in the Deed of Trust. The Note will become null and void on the date which is fifty-five
(55) years after the first day of the month after the date the Property is occupied by a
qualified purchaser 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 contained in the Deed of Trust (the "Expiration Date"). For purposes of the
Note and this Deed of Trust, such date of occupancy shall be deemed to be the date this
Deed of Trust is recorded. For a replacement deed of trust following an assumption, the
Expiration Date of that replacement deed of trust shall be the same day as the Expiration
Date as defined in this Deed of Trust.
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 encumbrances 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:
1. Payment of Principal and Interest. Borrower shall promptly pay
when due the principal and interest indebtedness evidenced by the Note.
The principal loan amount secured in the Deed of Trust herein, evidenced
by the Note, is calculated by determining the difference between the Affordable Housing
Price, and Market Sales Price, as such terms are defined in paragraph 17 in this Deed of
Trust (herein "Subsidy")
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.
Page 2 of 18
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.
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 Borrower, then to interest payable on the
Note, and then to the principal of the Note
4. Prior Mortgages and Deeds of Trust; Charges, 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 pay or 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.
Page 3 of 18
6. Preservation and Maintenance of Property. Borrower will keep
the Property in good repair and shall not commit waste or permit impairment or
deterioration of the Property Borrower shall perform ail of Borrower's obligations under
the declaration of covenants, conditions and restrictions.
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 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. Inspection. 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. Condemnation. 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 by 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.
Page 4 of 18
11. Successors and Assigns Bound, Joint and Several Liability; Co-
Signors. 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 17 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,
(c) agrees that CITY and any other Borrower hereunder may agree to
extend, modify, forbear or make any other accommodation 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. Governing 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.
Page 5 of 18
15. Notice to CITY. Borrower agrees that it will give the CITY notice of
any prospective transfer, sale, or conveyance not less than forty five (45) days before the
proposed sale, transfer, or conveyance 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 of this Deed of Trust, the Borrower shall not rent
or sublet the Property, or any part thereof, to any person and/or entity. Leasing of the
Property 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 Provided however, the CITY may grant temporary waivers of the
requirement in the event of hardship affecting Borrower, such as illness in the family,
military deployment or re-assignment, need to relocate to obtain employment, and the
like
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 prior to the
Expiration Date, then sale, conveyance and/or transfer shall be subject to the following
(a) The Property may only be sold, transferred or conveyed to a
qualified purchaser whose household income is less than eighty percent
(80%) of the median income as defined by the U.S Department of
Housing and Urban Development (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 time of ownership. Borrower shall make a good faith effort to
obtain a qualified purchaser residing in the City of Encinitas, prior to
considering other qualified purchasers Such effort shall include, but not
limited to, local public advertising, listing in local real estate publications,
and CITY suggested marketing The CITY shall determine if a "good faith"
effort has been performed. The CITY shall not unreasonably withhold its
approval.
(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 through the following calculation.
The maximum affordable sales price (the "Affordable Housing
Cost ) for the Property shall be consistent with State law and be
based on a total housing cost (including principal, interest, taxes,
Page 6 of 18
insurance and HOA fee) of thirty three percent (33%) of gross
household income For the two (2) bedroom units, a three (3) person
household shall be assumed; and, for the three (3) bedroom units, a
five (5) person household shall be assumed.
The calculation of the affordable sales price shall include a
five percent down payment.
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.
Actual financing to be obtained by any prospective
homebuyer shall be a fixed rate loan fully amortized over thirty
years.
(d) In the event that Borrower is unable to find, despite good faith
efforts to do so, a qualified purchaser to purchase the Property,
Borrower may sell the Property to a person other than a qualified
purchaser by first offering to sell the Property to the CITY for a
purchase price equal to highest purchase price at which a qualified
purchaser could qualify to purchase the Property at an Affordable
Housing Cost. The CITY shall accept or reject the offer to sell the
Property 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
Property, Borrower may proceed to market and sell the Property to
any purchaser without regard to the resale conditions set forth in this
Agreement; provided that upon or prior to the close of escrow
Borrower shall pay to the CITY the greater of: 1) the principal
amount, or 2) the "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 Market Sales Price and the Affordable
Housing Price at the time of subsequent sale (as defined below)
The "Affordable Housing Price" is the purchase price that could be
paid by a qualified purchaser at an Affordable Housing Cost.
The "Market Sales Price" is the price to be paid by the buyer of the
Property (the "Buyer") to Borrower for Borrower'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 any one or combination of the following the
Page 7 of 18
resale restrictions, Borrower's obligation to sell to the CITY,
Borrower's obligation to pay the CITY the Equity Sharing Amount
and/or Borrower's obligation to pay the CITY the principal amount.
(e) The affordability requirement shall remain in effect until the
Expiration Date This requirement shall remain in full force and effect
against all subsequent purchasers until the Expiration Date. This restriction
shall also apply to sales of the Property from the subsequent purchaser to
other purchaser(s) until the Expiration Date
(f) If the Borrower fails, refuses or is unable to convey, sell, or transfer
the Property to a person or persons meeting the requirements of
paragraphs 16 and 17(a) through 17(c), inclusive, before the Expiration
Date, but nevertheless conveys, sells or transfers the Property in violation of
paragraph 18 hereof, 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, refinances, and/or transfers the Property in violation of the terms of paragraph 2
and 5 of the Note, or paragraphs 16, 17 or 30 of this Deed of Trust (a "Prohibited
Transfer"), 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 this Deed of
Trust. In the instance of a Prohibited Transfer, the Transferor shall pay to the CITY the
greater of: 1) the amount of this 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 a qualified purchaser could
qualify to purchase the Property 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 18 must close not more than ninety (90) days
Page 8 of 18
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
or 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 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 terms designated in the notice of sale in one or more parcels and in such order
as Trustee may determine. 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.
Page 9 of 18
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 rp ima 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 Right 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, including, 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
21. Assignment of Rents; Appointment of Receiver; CITY in
Possession. As additional security hereunder, Borrower hereby assigns to CITY the
rents of the Property, provided that Borrower shall, prior to acceleration under paragraph
Page 10 of 18
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 abandonment 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. Reconveyance. 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
original lender, 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 Obligation. 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. If the Property is subject
to Covenants, Conditions and Restrictions ("Affordability Restrictions") between CITY and
Borrower, which are not attached hereto, Borrower acknowledges receipt thereof and
agrees, for itself, its heirs, successors and assigns to be bound by the same
28. Warranties of Borrower. Borrower warrants to CITY as follows:
Page 11 of 18
(a) 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 occupancy of the Property; or
(2) the date of recordation of the Deed of Trust.
(b) Borrower will reside in the Property as Borrower's principal place
of residence and will not rent, lease or sublet the Property until
the Expiration Date, except as permitted by the other terms of
the Note or this Deed of Trust.
29. Subordinate to Senior Deed of Trust. This Deed of Trust is
subordinate to any deed of trust or mortgage ("First Mortgage") on the Property made by
or held by an institutional lender or investor ("First Lender Loan")
30. Refinance of First Lender Loan. The outstanding principal on the
Note shall not be due upon prepayment and refinancing of the First Lender Loan, and this
Deed of Trust shall be subordinated to the refinanced First Lender Loan by way of a
Subordination Agreement, provided that (i) such refinancing is approved by the CITY, (ii)
the amount refinanced does not exceed the outstanding principal balance of the First
Mortgage at the time of refinance plus reasonable costs of refinance, and (iii) the
refinance does not result in higher monthly payments on the First Lender Loan than were
due prior to the refinance Mortgage loans or equity lines of credit junior in lien priority to
this Deed of Trust are not permitted. The CITY and the Borrower agree that the
requirements of this paragraph are necessary to ensure the continued affordability of the
Property to Borrower and to minimize the risk of loss of the Property by Borrower through
default and foreclosure of mortgage loans. Borrower further acknowledges that violation
of the provisions of this paragraph shall constitute a Prohibited Transfer under this Deed
of Trust.
REQUEST FOR NOTICE OF DEFAULT
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.
Page 12 of 18
NOTICE TO BORROWER: Do not sign this Deed of Trust if it contains blank spaces. All
spaces should be completed before you sign.
IN WITNESS WHEREOF, Borrower has executed this Deed of Trust.
Date- l Z 5 /`f Borrower
J n74rL. cCluske y
Date- orrower
Paul M. Johnson
Page 13 of 18
DEED OF TRUST RIDER
THIS DEED OF TRUST RIDER (herein "Rider") is attached to and made a
part of the Deed of Trust dated 2014 made between the CITY OF
ENCINITAS, a municipal corporation (herein "CITY") and executed by JENNIFER L.
MCCLUSKEY, AN UNMARRIED WOMAN AND PAUL M. JOHNSON, A SINGLE MAN
AS JOINT TENANTS, as Borrowers.
Borrower agrees to the provisions of this Deed of Trust Rider in addition to
those of the Deed of Trust. THE LANGUAGE OF THIS RIDER PREVAILS OVER THE
DEED OF TRUST IN THE EVENT OF A CONFLICT.
1. Borrower agrees that the Property being purchased is affordable as
described in this Deed of Trust, and that the continued use of the Property must be in
accordance with the Declaration of Covenants, Conditions and Restrictions recorded on
August 6, 2013, as Document No. 2013-0493525 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 Note secured by this Deed of Trust Rider, unless the written consent of CITY to the
transfer has been first 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 current beneficiary; and/or,
(e) a transfer in accordance with the ownership restrictions
contained in paragraphs 16, 17 and 18 of the Deed of Trust.
2 This Deed of Trust is subordinate to any first deed of trust or
mortgage on the Property made by or held by an institutional lender or investor
Page 14 of 18
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: 25 ( ° 'lf( E"� , Borrower
I J nife cCluskey
Date, 1 1 16 , Borrower
Paul M J hnson
Page 15 of 18
ACKNOWLEDGMENT
State of California )
County of San Diego )
4- V - CATHERINE R. AGUINALDO
On 1. fore.�onne NO ARY PUBLIC ersonally appeared,
c a �/l-�'/nZl w o proved to me on the basis of
'. satisfactory evidence to be the person(s) whose na s)1,s/are subscribed to the within
instrument and acknowledged to me that he/she/thdcuted the same in his/her/t rr
authorized capacity(ies), and that by his/her/ eir signature(s) on the instrument--the
person(s), or the entity upon behalf of v the person(s) 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 m hand and official seal CATHERINE R AGUINALDO y Commission# 1993153 93153
-- Notary Public-California z
z San Diego County
, My Comm.Expires Oct 17,2016
L
Signature (Seal)
Page 16 of 18
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:
Page 17 of 18
1 ,
Exhibit "A"
Legal Description
Lot 50 of CITY OF ENCINITAS TRACT NO. 03-090 CORAL COVE, according to Map
thereof No. 15613 filed with the County Recorder of San Diego County, California, on
September 19, 2007.
Page 18 of 18