2016-375066 • DOC# 2016-0375066
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FREE RECORDING REQUESTED Jul 26, 2016 04:12 PM
'n PURSUANT TO GOV. CODE SECTION OFFICIAL RECORDS
I�Y Ernest J.
I 27383 SAN DIEGO COUNTY RECO0
RDER
FEES: $0.00
Recording Requested By: PAGES II
City of Encinitas
Planning and Building Department
505 S. Vulcan Avenue
Encinitas, CA 92024
And When Recorded Mail To:
City of Encinitas
City Clerk's Office
505 S. Vulcan Avenue
Encinitas, CA 92020
C�1 r< A.P.N.258-121-12 and -13
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 i0,day of
a 2016 by and between the City of Encinitas (hereinafter the "CITY"), and
REQUIEZAM 2013, LLC (hereinafter the "OWNER").
RECITALS
A. Whereas, the OWNER is the owner of real property (hereinafter the "PROPERTY")
described in EXHIBIT A, attached hereto and made a part hereof;
B. Whereas, the CITY approved a Density Bonus for Tentative Map 15-008 by Planning
Commission Resolution (Reso. 2015-26) on August 20, 2015, in accordance with
California Government Code Section §65915;
C. Whereas, the OWNER has designated Lot Number one (1) of TM 15-008 as the
required affordable unit and the OWNER has agreed to construct a new residential
unit (hereinafter "UNIT") on the PROPERTY;
D. Whereas, in order to restrict the use of the affordable UNIT, the OWNER is bound by
this REGULATORY AGREEMENT and has consented to be regulated and restricted
as provided herein;
E. Whereas, the TENANT HOUSEHOLD is the eligible household to rent the UNIT
(hereinafter " TENANT HOUSEHOLD"); and
City of Encinitas t
Affordable Housing Regulatory Agreement-Updated February 2016
F. Whereas, the HOMEBUYER HOUSEHOLD is the eligible household to purchase the
UNIT (hereinafter " HOMEBUYER HOMEBUYER")
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 in accordance with California
Government Code Section §65915.
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 15-008. The interior
appearances, finishes, and amenities of the UNIT shall be comparable to new units
in the community, including units within TM 15-008.
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 units in the CITY or
surrounding communities to the satisfaction of the Planning and Building Director
(hereinafter, the "DIRECTOR"). Such documentation shall be provided from the
OWNER to the CITY prior to the issuance of a certification of occupancy.
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 7th market rate unit.
E. The UNIT shall be a minimum of 1,500 square feet of living space, with a minimum of 3
bedrooms and 2 bathrooms and a 2-car garage.
F. The UNIT shall be provided with an adequate usable yard area comparable to new
units in the community, including units within the TM 15-008.
3. GENERAL CONDITIONS
A. OWNER shall only rent or sell the UNIT to an income eligible household at or below
fifty percent (50%) of San Diego Area Median Income, as defined and periodically
updated by California Health and Safety Code §50105 and adjusted for household
size.
B. OWNER shall advertise the availability of the UNIT for a minimum of two
consecutive weeks in a local newspaper. The OWNER may employ additional
marketing methods that are in accordance with professional standards. The CITY
City of Encinitas 2
Affordable Housing Regulatory Agreement-Updated February 2016
may also advertise the UNIT to provide contact information to interested households.
OWNER shall make applications available for a minimum of two weeks during the
advertisement period. OWNER shall maintain a record of all interested households
and applications. OWNER must provide such documentation to the CITY.
C. OWNER shall comply with the Fair Housing Act and 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 laws.
D. OWNER is prohibited from renting or selling the UNIT to a family member, relative,
employee, or any pre-determined household.
E. 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 or below fifty
percent (50%) of San Diego Area Median Income, as defined and periodically
updated by California Health and Safety Code §50105 and adjusted for household
size. 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).
F. 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.
G. 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.
4. OPTION TO SELL (Except as provided in Section 3.E)
A. QUALIFICATION OF ELIGIBLE HOMEBUYER HOUSEHOLD
i. UNIT shall only be sold to an income eligible HOMEBUYER HOUSEHOLD at or
below fifty percent (50%) of San Diego Area Median Income, as defined and
periodically adjusted by the California Health and Safety Code §50105, and
adjusted for household size.
ii. The OWNER shall verify the income of all adult members of any proposed
HOMEBUYER HOUSEHOLD. For the purposes of determining the
HOMEBUYER HOUSEHOLD gross annual income, all adult (18 years of age
and over) members of household shall provide recent (within a year) source
documentation to verify income. Source documentation includes, but not limited
to, tax returns, paystubs, wage statements, W2s, bank statements, social
security documents, and employment verification.
City of Encinitas 3
Affordable Housing Regulatory Agreement-Updated February 2016
ii. Prior to opening escrow to sell the UNIT, OWNER shall provide CITY with
HOMEBUYER HOUSEHOLD'S income qualifying source documentation,
including, but not limited to, tax returns, W2's, paystubs, social security
statements, bank statements, etc. The CITY may require additional
documentation to verify eligibility. DIRECTOR shall confirm or deny eligibility
based on the documentation provided.
iii. HOMEBUYER HOUSEHOLD must certify that they 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. CALCULATION OF AFFORDABLE HOUSING COST
i. The maximum affordable sales price for the UNIT shall be calculated in
accordance with California Health and Safety Code Section §50052.5. The
following conditions shall also be applied when determining the maximum
affordable sales price:
a. The calculation shall include a five percent down payment.
b. The calculation shall include an interest rate which is based on the current
Freddie Mac Monthly Average Commitment Rate on 30-Year Fixed-Rate
Mortgages.
c. The calculation shall include reasonable housing costs, which includes,
but not limited to, property taxes, property insurance, Homeowners'
Association fees, additional district fees (if applicable), and an allowance
for utilities based on the current Utility Allowance Schedule, published by
the Encinitas Housing Authority
d. Actual financing to be obtained by any prospective homebuyer shall be a
fixed rate loan fully amortized over thirty years.
ii. Prior to opening escrow, the sale price of the UNIT shall be approved by the
DIRECTOR.
C. ADDITIONAL REQUIREMENTS
i. At the time of initial sale, HOMEBUYER HOUSEHOLD shall execute a new
Regulatory Agreement and Equity Sharing agreement with the CITY in
accordance with California Government Code §659159(c)(2), unless it is in
conflict with the requirements of another public funding source or law.
5. OPTION TO RENT
A. QUALIFICATION OF ELIGIBLE TENANT HOUSEHOLD
i. The UNIT shall only be rented to an income eligible TENANT HOUSEHOLD at or
below fifty percent (50%) of San Diego Area Median Income, as defined and
City of Encinitas 4
Affordable Housing Regulatory Agreement-Updated February 2016
periodically adjusted by the California Health and Safety Code §50105, and
adjusted for household size.
ii. The OWNER shall verify the income of all adult members of any proposed
TENANT HOUSEHOLD. For the purposes of determining the TENANT
HOUSEHOLD annual gross income, all adult (18 years of age and over)
members of household shall provide recent (within one-year) source
documentation to verify income. Source documentation includes, but is not
limited to tax returns, paystubs, wage statements, W2s, bank statements, social
security documents, and employment verification.
iii. OWNER shall provide CITY with TENANT HOUSEHOLD'S income qualifying
source documentation, including, but not limited to, tax returns, W2's, paystubs,
social security statements, bank statements, etc. The CITY may require
additional documentation to verify eligibility. DIRECTOR shall confirm or deny
eligibility based on the documentation provided.
B. CALCULATION OF AFFORDABLE RENTAL PRICE
I. The maximum monthly rent of UNIT shall be calculated in accordance with
California Health and Safety Code Section §50053. Rental rate may be adjusted
periodically in accordance with California Health and Safety Code Section §50053.
No additional fees or charges shall be assessed to the TENANT HOUSEHOLD in
excess of the affordable rent.
ii. An allowance for tenant-paid utilities shall be deducted from the maximum
affordable rent. The OWNER shall only use the most current Utility Allowance
Schedule, published by the Encinitas Housing Authority.
iii. The DIRECTOR shall approve the maximum rental rate for the UNIT, including
the applicable utility allowance.
C. MANAGEMENT AND MAINTENANCE
i. 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.
a. OWNER shall re-certify the TENANT HOUSEHOLD's income eligibility
every twelve months. In the event that the TENANT HOUSEHOLD no
longer qualifies, the OWNER shall provide notice in accordance with
applicable State law.
b. TENANT HOUSEHOLD shall enter into a written occupancy agreement or
lease with the OWNER. OWNER shall use the standard lease form
City of Encinitas 5
Affordable Housing Regulatory Agreement-Updated February 2016
published by the California Apartment Association or other form approved
by the DIRECTOR.
ii. Prior to the occupancy of the UNIT, the OWNER shall provide a copy of the
occupancy agreement or lease to the CITY for review and approval.
iii. 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.
a. 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) and State Law.
Upon written request by the CITY, the OWNER shall provide DIRECTOR
or representative with access to inspect the UNIT for compliance with this
section. Failure by the OWNER to maintain the UNIT shall constitute a
violation under this REGULATORY AGREEMENT.
b. 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
c. 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. OWNER
shall notify the CITY in writing within 30 days of any change of property
management of the UNIT.
iv. 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).
D. ANNUAL MONITORING
i. OWNER shall submit a report to the DIRECTOR at initial occupancy and
annually thereafter, on a form prescribed by the DIRECTOR. The report shall
include information on the household occupying the UNIT, household income,
and the amount of rent collected. Whenever requested by the CITY, the OWNER
City of Encinitas 6
Affordable Housing Regulatory Agreement-Updated February 2016
shall provide source documentation demonstrating the qualified status of the
household.
6. 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.
7. 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.
8. 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.
9. AMENDMENT.
This REGULATORY AGREEMENT shall not be altered or amended except by writing
executed between the parties.
10. 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.
City of Encinitas 7
Affordable Housing Regulatory Agreement-Updated February 2016
11. 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
holds an ownership interest, or any person or entity that holds an ownership interest in
the PROPERTY.
12. 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.
13. 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.
14. 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.
15. GOVERNING LAW.
This REGULATORY AGREEMENT shall be construed in accordance with and
governed by the laws of the State of California.
16. 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 Michael Vairin, Executive Vice President
505 S. Vulcan Ave. Melia Homes,
Encinitas, CA 92024 8951 Research Drive
Attn: Housing Management Analyst Irvine, CA 92618
Ph: (949) 759-4367, michael aamelia-
homes.com
City of Encinitas 8
Affordable Housing Regulatory Agreement-Updated February 2016
IN WITNESS WHEREOF, OWNER has executed this REGULATORY AGREEMENT as of the
day and year first above written.
OWNER
RequezaM13
20 ,,�LL
,{ 'eCI By: �I���1MMJ UVWWV Date: N E'
Mid I Vairin Executive Vice President of Melia Homes
(Notarization of signature must be attached)
CITY
City of Encinitas
By: Date: 5 00I.
Kristin G yor
(Notarization not required)
APPROVED AS TO FORM:
A414'1�' -f/i'
Glenn Sabine, City Attorney Date
City of Encinitas q
Affordable Housing Regulatory Agreement-Updated February 2016
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached,and not the truthfulness,
accuracy, or validity of that document.
State of California )
ss
County of
On a�JCD'1r �014a before me, (���z ( )/G,0AK3
Not Public,personally appeared/21 el rte
who
proved to me on the basis of satisfactory evidence to be the person(s)whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their 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 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 my hand and official seal.
KATHLEEN M.
212383
0
� Commb>tlon 1 2123638
Notary Pubk-California
Orange County
ignature MV Conan.E n Am 16.2019
(Affix Seal)
EXHIBIT A
LEGAL DESCRIPTION
APN: 258-121-12 and -13
APN: 258-121-12-00: THE SOUTHERLY 312 FEET OF LOT 9 OF RANCHO RIQUEZA, IN
THE COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF
NO. 2133, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
OCTOBER 11,1928, EXCEPTING THEREFROM THE WESTERLY 100 FEET THEREOF.
APN: 258-121-13-00: LOT 9 OF RANCHO RIQUEZA, IN THE COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 2133, FILED IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, OCTOBER 11, 1928.
EXCEPTING THE EASTERLY 85 FEET OF THE WESTERLY 100 FEET OF THE
SOUTHERLY 200 FEET THEREOF. ALSO EXCEPTING THAT PORTION OF THE
SOUTHERLY 312 FEET LYING EASTERLY OF THE EAST LINE OF THE WEST 100 FEET
OF SAID LOT.
City of Encinitas 10
Affordable Housing Regulatory Agreement-Updated February 2016