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2019-492093 •` DOC# 2019-0492093 �� 1 111111 IIIII IIIII IIIII IIII 111111 IIIII IIIII IIIII IIIII IIIII II II IIII.1111 NO FEE FOR RECORDING Oct 29, 0 O PM PURSUANT TO GOV. CODE SECTION OFFICIAL RECORDS 27383 Ernest J. Dronenburg, Jr., SAN DIEGO COUNTY RECORDER FEES: $0.00 (S132 Atkins: $0.00) Recording Requested By: PAGES: 15 City of Encinitas Development Services 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 92024 A.P.N. 254-331-23-00 AFFORDABLE HOUSING REGULATORY AGREEMENT (Density Bonus) This Affordable Housing Regulatory Agreement (hereinafter the "RE G 4TORY AGREEMENT") is made and entered into and is effective as of this day of , 2019 by and between the City of Encinitas (hereinafter the "CITY"), and Russell Haley, stee of the Russell C. Haley Trust dated January 10, 2019, as to an undivided 33.3% interest; Vince Hoenigman, Trustee of the Hoenigman Living Trust dated September 17, 1998, as to an undivided 33.3% interest; and-Richard V. Gustafson, Trustee of the Gustafson Family Trust dated February 1, 2005, as to an undivided 33.3% interest; all as tenants in common (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 13-187, 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 Nine (9) of TM 13-187 as the required affordable unit and the OWNER has agreed to construct a new residential unit (hereinafter "UNIT") on the PROPERTY; D. Whereas, the UNIT was previously subject to a certain Affordable Housing Regulatory Agreement dated July 25, 2017 and recorded in the Official Records 1 of the County of San Diego on August 1, 2017 with document number 2017- 0348241 (the "ORIGINAL REGULATORY AGREEMENT") and was an agreement made between the CITY and Citymark Hymettus, LLC (hereinafter the "ORIGINAL OWNER"); E. Whereas, the ORIGINAL OWNER has fulfilled the obligations and requirements under the ORIGINAL REGULATORY AGREEMENT; F. Whereas, the ownership of the UNIT has changed since the ORIGINAL REGULATORY AGREEMENT was entered into and recorded, and the UNIT has been conveyed to the OWNER, necessitating a partial release from the ORIGINAL REGULATORY AGREEMENT pertaining to the UNIT, and replacement of the ORIGINAL REGULATORY AGREEMENT with this REGULATORY AGREEMENT specific to the PROPERTY; and, G. 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. 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. MAINTENANCE OF THE AFFORDABLE UNIT A. The exterior appearance of the affordable UNIT shall be compatible with units in the surrounding neighborhood, including units within TM 13-187. The interior appearances, finishes, and amenities of the UNIT shall be comparable to new units in the community. B. The UNIT shall be a minimum of 2,764 square feet of living space, with a minimum of 4 bedrooms and 3 bathrooms and a 2-car garage. C. The UNIT shall be provided with an adequate usable yard area comparable to new units in the community. 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 2 marketing methods that are in accordance with professional standards. The CITY 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.C). 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. r G. Occupancy of the UNIT shall be appropriate to the number o f 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 for 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 3 and over) members of household shall provide recent (within a year) source documentation to verify income. Source documentation may include, but is not limited to, any of the following: tax returns, paystubs, wage statements, W2s, bank statements, social security documents, and employment verification. iii. Prior to opening escrow to sell the UNIT, OWNER shall provide CITY with HOMEBUYER HOUSEHOLD'S income qualifying source documentation, which may include, but is not limited to, any of the following: tax returns, paystubs, wage statements, W2s, bank statements, social security documents, and employment verification. The CITY may require additional documentation to verify eligibility. DIRECTOR shall confirm or deny eligibility based on the documentation provided. iv. 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 other 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 §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 with the CITY in accordance with California Government Code §65915(c)(2), unless it is in conflict with the requirements of another public funding source or law. 4 ii. HOMEBUYER HOUSEHOLD shall submit a report to the DIRECTOR at initial occupancy and annually thereafter, on a form prescribed by the DIRECTOR. The report shall certify that the HOMEBUYER HOUSEHOLD occupies the UNIT as their primary residence. The HOMEBUYER HOUSEHOLD shall provide source documentation verifying the occupancy status of the HOMEBUYER HOUSEHOLD. 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 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 may include, but is not limited to, any of the following: 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, which may include, but is not limited to, any of the following: tax returns, paystubs, wage statements, W2s, bank statements, social security documents, and employment verification. 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 §50053. Rental rate may be adjusted periodically in accordance with California Health and Safety Code §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 5 L 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 five 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 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. 6 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 30 days, the OWNER shall notify the CITY. If available, CITY shall provide OWNER with a list of eligible households seeking rental housing. Upon a showing that OWNER failed to make a good faith effort to expeditiously re-rent the UNIT, CITY can extend the affordable housing restriction period, if the UNIT is not continuously rented (i.e., vacancies of more than 30 days), for a period equal to the total amount of time that the UNIT remained vacant in excess of 30 days between vacancies. 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 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 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. 7 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. 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 8 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 Russ Haley 505 S. Vulcan Ave. c/o CityMark Development Encinitas, CA 92024 3818 Park Boulevard Attn: Housing Management Analyst San Diego, CA 92103 Ph: (619) 231-1161 IN WITNESS WHEREOF, OWNER has executed this REGULATORY AGREEMENT as of the day and year first above written. OWNER Russell Haley, Trustee of the Russell C. Haley Trust dated December January 10, 2019 By: C Date: Ru ell C, Haley, TrusteL Vince Hoenig , Trustee for t man Living Trust dated September 17, 1998 By: Date: �� Vince oenig n, ste Richard V. Gustafson, Trustee of the Gustafson Family Trust dated February 1, 2005 By: Date: 7, : / Richard V. Gustafson, Trustee (Notarization of each signature must be attached) 9 CITY City of Encinitas, a municipal corporation By: Date: *an ust, City M- anager (Notarization of signature must be attached) APPROVED AS TO FORM: City Attorney Date 10 ATTACHMENT A LEGAL DESCRIPTION Real property in the City of Encinitas, County of San Diego, State of California as follows: APN: LOT 9 OF THE CITY OF ENCINITAS TRACT NO. 13-187, IN THE CITY OF ENCINITAS, COUNTY OF SAN DIEGO. STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO.16257 FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNA ON March 27, 2018, ("FINAL MAP"). 11 CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT A Notary Public or other Officer Completing this certificate verifies only the identify 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 County of San Diego On July 31, 2019 before me, Kris Johnson, Notary Public, personally appeared Russell C. Haley, Trustee , 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 person(S) acted, executed the instrument. 1 certify under PENALTY OF PERJURY, under the laws of the State of California, the foregoing paragraph is true and correct. WITNESS my and official seal. icRlsjoHNSON Notary Public—California San Diego County D Commission#2219707 n ohnson N Itary Public My Comm.Expires Nov 20,2021 Commission#2219707 My Commission Expires: November 20, 2021 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 of Attached Document: Affordable Housing Regulatory Agreement—(Density Bonus)—Lot 9 City of Encinitas CA Rev. 1/01/2015 1 CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT A Notary Public or other Officer Completing this certificate verifies only the identify 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 County of San Diego On July 31, 2019 before me, Kris Johnson, Notary Public, personally appeared Vince Hoenigman Trustee , 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 person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY, under the laws of the State of California, the foregoing para raph is true and correct. WIT E S a d and official seal. KRIS JOHNSON Notary Public—California 1 i San Diego County 0 Commission# KrisJohnson N tart' Public My Comm.Expires Nov 20,2021 Commission 219707 My Commission Expires: November 20, 2021 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 of Attached Document: Affordable Housing Regulatory Agreement—(Density Bonus)—Lot 9 City of Encinitas CA Rev. 1/01/2015 CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT A Notary Public or other Officer Completing this certificate verifies only the identify 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 County of San Diego On July 31, 2019 before me, Kris Johnson, Notary Public, personally appeared Richard V. Gustafson, Trustee , who proved to me on the basis of satisfactory evidence to be the person whose nome(s) is are subscribed to the within instrument and acknowledged to me that he she/they executed the some 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 person(s) 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. ITNESS my d nd official seal. KRIS JOHNSON Notary Public-California San Diego County ; Commission#2219707 Kris Johnson, No ary Public My Comm.Expires Nov 20,2021 Commission #2219707 My Commission Expires: November 20, 2021 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 of Attached Document: Affordable Housing Regulatory Agreement—(Density Bonus)—Lot 9 City of Encinitas CA Rev. 1/01/2015 i ALL-PURPOSE ACKNOWLEDGMENT 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 Y S6un��en SS. Count of On l ZL�— , before me, 4n aed 0— O 1'7 , Notary Public, DATE D personally appeared kr -en 9 B r U�� ,who proved to me on the basis of satisfactory evidence to be the person(s) whose na02er re subscribed to within instrument and acked to me that he she hey executed the same in heir authorized capacity(ies), and that by his/ signature(s) on the instrument the personhe entity upon behalf of which the ANGELA A. SIMON person(s) acted, executed the instrument. .�. Comm.#2182396 in 8 NOTARY PUSUC•CALIFORNIA $AN woo CouRn I certify under PENALTY OF PERJURY under the MY Con.UP.MAR. ----- laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. PLACE NOTARY SEAL IN ABOVE SPACE NOTARY'S SI ATURE OPTIONAL INFORMATION The information below is optional. However,it may prove valuable and could prevent fraudulent attachment of this form to an unauthorized document. 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