2023-294131FREE RECORDING REQUESTED
PURSUANT TO GOV. CODE SECTION
27383
Recording Requested By:
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: 266-090-06 and 266-090-07
DOC# 2023-0294131
111111111111111 11111111111111111111111111111111111111111111111111 IT IN
Oct 26, 2023 09:25 AM
OFFICIAL RECORDS
JORDAN Z. MARKS,
SAN DIEGO COUNTY RECORDER
FEES: $0.00 SB2 Atkins: $0.00)
POOR: N/A
PAGES: 20
REGULATORY AGREEMENT AND DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS FOR AFFORDABLE HOUSING UNITS
(Affordable Housing Ordinance/Density Bonus)
THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS FOR AFFORDABLE HOUSING UNITS (hereafter
"REGULATORY AGREEMENT" or ."AGREEMENT') is made and entered into and is
effective as of this 16"' of _0 cb ber - 2023 by and between the City of Encinitas
(hereafter "CITY") and DLSI?Holdings LP, a California limited partnership (hereafter
"OWNER").
RECITALS
A. Whereas, the CITY has adopted an affordable housing ordinance, Encinitas
Municipal Code ("EMC") Chapter 30.41 (hereafter "Affordable Housing Ordinance") to
enhance the public welfare by establishing policies which require the development of housing
affordable to households of very low, low, and moderate incomes, meet the CITY'S regional
share of housing needs, and implement the goals and objectives of the general plan and
housing element, and which requires that a percentage of residential units that are developed
be affordable to very low or low income households;
B. Whereas, the CITY has adopted a density bonus ordinance, EMC
§30.16.020(C) ("Density Bonus Ordinance") in conformance with state density bonus law,
Government Code §§ 65915 — 65918 (Density Bonus Ordinance and state law collectively,
the "Density Bonus Law"). Density Bonus Law allows a density bonus, concessions, and other
regulatory incentives when a developer proposes to provide affordable housing meeting the
standards of Density Bonus Law;
FREE RECORDING REQUESTED
PURSUANT TO GOV. CODE SECTION
27383
Recording Requested By:
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: 266-090-06 and 266-090-07
REGULATORY AGREEMENT AND DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS FOR AFFORDABLE HOUSING UNITS
(Affordable Housing Ordinance/Density Bonus)
THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS FOR AFFORDABLE HOUSING UNITS (hereafter
"REGULATORY AGREEMENT" or "AGREEMENT") is made and entered into and is
effective as of this 2� , W or O chber 2023 by and between the City of Encinitas
(hereafter "CITY") and DLS- Holdings LP, a California limited partnership (hereafter
"OWNER").
RECITALS
A. Whereas, the CITY has adopted an affordable housing ordinance, Encinitas
Municipal Code ("EMC") Chapter 30.41 (hereafter "Affordable Housing Ordinance") to
enhance the public welfare by establishing policies which require the development of housing
affordable to households of very low, low, and moderate incomes, meet the CITY'S regional
share of housing needs, and implement the goals and objectives of the general plan and
housing element, and which requires that a percentage of residential units that are developed
be affordable to very low or low income households;
B. Whereas, the CITY has adopted a density bonus ordinance, EMC
§30.16.020(C) ("Density Bonus Ordinance") in conformance with state density bonus law,
Government Code §§ 65915 — 65918 (Density Bonus Ordinance and state law collectively,
the "Density Bonus Law"). Density Bonus Law allows a density bonus, concessions, and other
regulatory incentives when a developer proposes to provide affordable housing meeting the
standards of Density Bonus Law;
C. Whereas, the OWNER is the owner of real property (hereafter "PROPERTY")
located in the City of Encinitas, County of San Diego, California, described in Exhibit A
attached hereto and made a part hereof;
D. Whereas, the CITY approved the development of a housing project MULTI-
002569-2018; SUB-002571-2020; DR-002572-2018; BADJ-003989-2020 & CDPNF-002573-
2018; 18-220 TMDB/DR/CDP consisting of twelve (12) units by City Council Resolution (Reso.
2020-85) on October 28, 2020 ("PROJECT");
E. Whereas, a total of one (1) unit located at the PROJECT are subject to
affordable housing requirements (hereafter "AFFORDABLE UNITS" or "UNITS") under the
Affordable Housing Ordinance and/or Density Bonus Law, and the OWNER has agreed to
construct the AFFORDABLE UNITS on the PROPERTY;
F. Whereas, one (1) AFFORDABLE UNIT is required by the Affordable Housing
Ordinance to be maintained as affordable to VERY LOW-INCOME HOUSEHOLDS in
perpetuity in accordance with EMC § 30.41.060(A)(1);
G. Whereas, in accordance with Density Bonus Law, OWNER acknowledges and
agrees that, in addition to the Density Bonus, OWNER is receiving incentives and concessions
pursuant to and in accordance with the requirements of the State Density Bonus Law;
H. Whereas, the OWNER has designated the descriptions and location(s) of the
AFFORDABLE UNITS on Exhibit "B";
I. Whereas, in order to obtain the Density Bonus, the OWNER: (i) has agreed to
restrict the use of the AFFORDABLE UNITS; (ii) agrees that the OWNER and the PROPERTY
are bound by this REGULATORY AGREEMENT; (iii) agrees that this REGULATORY
AGREEMENT shall run with the land and shall be binding upon the PROPERTY and upon every
person having any interest therein at any time and from time to time during the term of this
REGULATORY AGREEMENT; and (iv) has consented to regulation and restriction of the
OWNER and the PROPERTY as provided herein; provided, however, if the PROJECT is
mapped as individual condominium units, the OWNER and CITY shall amend the definition of
the term "PROPERTY" and Exhibit A to this REGULATORY AGREEMENT, so that this
REGULATORY AGREEMENT will encumber only the AFFORDABLE UNITS.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the parties hereto agree as follows:
1. RECITALS. The foregoing recitals and City Council Resolution No. 2020-85 and that
certain Covenant of Real Property which was recorded as Document No. 2023-0206616 in
the Official Records of the San Diego County Recorder on August 1, 2023 are a part of this
REGULATORY AGREEMENT.
2. TERM OF AGREEMENT. The term of this REGULATORY AGREEMENT shall
commence on the date hereof and shall continue to govern the PROPERTY and the
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AFFORDABLE UNITS thereon from issuance of Certificate of Occupancy and in perpetuity
for the one (1) unit specified in Exhibit B as "Inclusionary Housing Affordable Units," in
accordance with EMC §§ 30.16.020(C)(9) and 30.41.100 as applicable.
3. DEVELOPMENT OF THE AFFORDABLE UNITS
A. OWNER shall construct the AFFORDABLE UNITS on the PROPERTY. The
AFFORDABLE UNITS are described on Exhibit B. Issuance of building permits for
construction of the one (1) AFFORDABLE UNITS shall occur on or before the earliest of (i)
issuance of building permits for the construction of the 6th market rate dwelling unit; or (ii) the
date which is twenty-four (24) months after the issuance of the first building permit for a market
rate dwelling unit. In no event shall issuance of a building permit for the construction of the 6th
market rate dwelling unit occur until building permits are issued for the construction of the one
(1) AFFORDABLE UNITS. Further, if individual parcels are sold by OWNER prior to obtaining
building permits for the construction of dwelling units on such parcels, every such parcel sold
shall nonetheless be included in the calculation of the total number of building permits issued,
regardless of whether such building permits have actually been issued. Time is of the essence
in the completion and occupancy of the AFFORDABLE UNITS. No final inspection may be
completed or certificate of occupancy may be issued for the 6th market rate dwelling unit, until
final inspections have been completed and certificates of occupancy have been issued for all
of the AFFORDABLE UNITS.
B. Pursuant to EMC §§30.16.020(C)(10)(b) and 30.41.060(A), the exterior
appearance and overall quality of construction of the AFFORDABLE UNITS and the
appearance and landscaping and the availability of amenities for the AFFORDABLE UNITS
shall be comparable to that of market -rate units within the PROPERTY.
C. Pursuant to EMC §§ 30.16.020(C)(10)(b) and 30.41.060(A), prior to the
commencement of construction, the quality of materials, floor coverings, cabinets, fixtures,
appliances, doors, and windows shall be specified by the OWNER to the CITY in sufficient
detail to ensure that the exterior appearance and overall quality of construction of the
AFFORDABLE UNIT is comparable to that of market -rate units at the PROPERTY and that
interior finishes and amenities are not of substandard or inferior quality, to the satisfaction of
the Development Services Director (hereinafter, the "DIRECTOR").
D. The AFFORDABLE UNIT sizes and bedroom mix shall be as set forth on Exhibit
"B," which the parties acknowledge is proportional to the unit mix and bedroom count of the
market -rate units. AFFORDABLE UNITS shall be dispersed throughout the PROJECT, on
each floor, elevation, and section of the building(s) and throughout the site pursuant to EMC
§§ 30.16.020(C)(10)(c) and 30.41.060(A).
4. GENERAL CONDITIONS
A. OWNER shall either: (i) rent each AFFORDABLE UNITS to QUALIFIED
TENANT HOUSEHOLDS; or (ii) sell each AFFORDABLE UNIT to QUALIFIED HOMEBUYER
HOUSEHOLDS. If the AFFORDABLE UNITS are initially rented, the AFFORDABLE UNITS
may not subsequently be sold.
It]
B. OWNER shall advertise the availability of the AFFORDABLE UNITS for a
minimum of two consecutive weeks. The OWNER may employ additional marketing methods
that are in accordance with industry standards. The CITY may also advertise the
AFFORDABLE UNITS and provide contact information to interested households. The
advertisements must include the following details: that the AFFORDABLE UNITS are subject
to affordability restrictions, set forth the application instructions and deadlines, contact
information, and fair housing statement. OWNER shall utilize an advertisement template
provided by the CITY and the advertisement period shall be for a minimum of two weeks.
OWNER shall not begin the selection process until after the two -week advertisement period
has ended. OWNER shall maintain a record of all interested households and applications and
shall provide such documentation to the CITY upon request.
C. OWNER shall comply with all applicable State, Federal and local laws, including
but not limited to the Americans with Disabilities Act, Fair Housing Act and California Fair
Employment and Housing Act and shall not discriminate against any prospective tenant or
homebuyer on the basis of race, color, religion, sex, national origin, familial status, disability,
gender, gender identity, gender expression, sexual orientation, marital status, national origin,
ancestry, familial status, source of income, disability, veteran or military status, or genetic
information of that person or any other status protected under State and Federal fair housing
laws.
D. OWNER shall not rent any AFFORDABLE UNIT to OWNER or any relative (by
blood or marriage) of OWNER or any person employed by OWNER or any individuals who
are members, principals, executives, directors, partners or shareholders of OWNER or in any
entity having an ownership interest in OWNER or in the Property, or to any pre -determined
household. A "pre -determined household" is any household with a pre-existing relationship
with the OWNER, such as a friend, associate, or any other household that has an existing
relationship with the OWNER, or whose occupancy of the AFFORDABLE UNIT would
decrease its availability to the general public as intended by DENSITY BONUS LAW.
E. Other than renting or leasing to a QUALIFIED TENANT HOUSEHOLD, as
defined below, or a sale to a QUALIFIED OWNERSHIP HOUSEHOLD, as defined below, or
PERMITTED TRANSFERS as defined below, OWNER shall not lease, sell, transfer, allow the
possession of, and/or dispose of the AFFORDABLE UNITS to any person and/or entity,
unless the proposed transferee shall have executed and delivered to the CITY an express
written assumption of all of OWNER's obligations under this REGULATORY AGREEMENT,
on a form reasonably acceptable to the CITY. Upon any PERMITTED TRANSFER, and upon
the transferee's express written assumption, the transferor shall be released from, and the
CITY shall look solely to the transferee for, the performance of any and all obligations under
this REGULATORY AGREEMENT. Any purchaser of the AFFORDABLE UNITS shall be, and
must agree in writing, to bound by the terms of this REGULATORY AGREEMENT.
F. "Permitted Transfer" means any of the following:
(i) A conveyance of a security interest in the AFFORDABLE UNITS in
connection with any permitted mortgage;
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(ii) Any transfer of title by foreclosure, deed or other conveyance in lieu of
foreclosure in connection with a loan security interest;
(iii) The granting of easements or permits to facilitate the development of
the Property in accordance with this REGULATORY AGREEMENT;
G. During the term of this REGULATORY AGREEMENT, the PROPERTY and the
AFFORDABLE 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.
H. Occupancy of the AFFORDABLE UNITS shall be appropriate to the number of
bedrooms in each AFFORDABLE UNIT. As a general rule and policy, an appropriately sized
household is no less than one person per bedroom, unless a reasonable accommodation
must be made under federal or state fair housing laws in conformance with HUD guidelines
set forth in FR Doc. 98-33568, published on December 18, 1998 at 63 FR 70256-70257 --
Fair Housing Enforcement— Occupancy Standards; Notice of Statement of Policy.
I. The OWNER has received regulatory incentives and waivers from the CITY
under the DENSITY BONUS LAW. The OWNER hereby agrees to limit rents or sales prices
as provided in this REGULATORY AGREEMENT in consideration of the OWNER's receipt of
the incentives and waivers and further agrees that any limitations on rents imposed on the
AFFORDABLE UNITS are in conformance with the Costa -Hawkins Act.
6. QUALIFIED HOUSEHOLDS.
A. QUALIFIED TENANT HOUSEHOLDS.
1. QUALIFICATION OF ELIGIBLE TENANT HOUSEHOLD. If the
AFFORDABLE UNITS are rented, the AFFORDABLE UNITS shall only be rented to
QUALIFIED TENANT HOUSEHOLDS as defined herein. OWNER shall provide the CITY
with any proposed QUALIFIED TENANT HOUSEHOLD'S recent 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. The. DIRECTOR shall confirm or deny eligibility based on the documentation
provided. QUALIFIED TENANT HOUSEHOLD means a household meeting all of the
following requirements:
i. The household is a VERY LOW-INCOME HOUSEHOLD, which
means a household with household income that does not exceed the very low-income limits
applicable to San Diego County as published annually by the Department of Housing and
Community Development under Title 25 of the California Code of Regulations, Section 6932 (or
successor provision), adjusted for actual household size.
ii. No persons in the household own any other real property.
k,
2. CALCULATION OF AFFORDABLE RENTAL RATE.
i. The maximum monthly rents for the AFFORDABLE UNITS shall
be calculated in accordance with California Health and Safety Code Section 50053 and Title
25 of the California Code of Regulations, Section 6918 (or successor provision), and, in
accordance with such published rents, shall result in a monthly housing cost that does not
exceed 1 /12 of thirty percent (30%) of fifty percent (50%) of AREA MEDIAN INCOME, adjusted
for assumed household size. "AREA MEDIAN INCOME" is the median income for to San Diego
County as published annually by the Department of Housing and Community Development
under Title 25 of the California Code of Regulations, Section 6932 (or successor provision),
adjusted for actual household size.
ii. No additional fees or charges shall be charged to the QUALIFIED
TENANT HOUSEHOLD in excess of the affordable rent.
iii. An allowance for tenant -paid utilities shall be deducted from the
maximum affordable rent as set forth in the then -current Utility Allowance Schedule, published
by the Encinitas Housing Authority.
iv. The DIRECTOR shall approve the initial maximum rental rate for the
AFFORDABLE UNITS.
B. QUALIFIED HOMEBUYER HOUSEHOLDS.
1. QUALIFICATION OF HOMEBUYER HOUSEHOLDS. If the
AFFORDABLE UNITS are sold, the AFFORDABLE UNITS shall only be sold to QUALIFIED
HOMEBUYER HOUSEHOLDS as defined herein. OWNER shall provide the CITY with any
proposed QUALIFIED HOMEBUYER HOUSEHOLD'S recent 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. The DIRECTOR shall confirm or deny eligibility based on the documentation
provided. QUALIFIED HOMEBUYER HOUSEHOLD means a household meeting all of the
following requirements:
i. The household is a VERY LOW-INCOME HOUSEHOLD, which
means a household with household income that does not exceed the very low-income limits
applicable to San Diego County as published annually by the Department of Housing and
Community Development under Title 25 of the California Code of Regulations, Section 6932 (or
successor provision), adjusted for actual household size.
ii. No persons in the household own any other real property.
2. ADDITIONAL REQUIREMENTS FOR QUALIFIED HOMEBUYER
HOUSEHOLDS. Each QUALIFIED HOMEBUYER HOUSEHOLD must certify that they will
occupy the AFFORDABLE UNIT as owner -occupant and principal residence; and that the
household does not own or have an interest in any real property. Each purchaser of an
AFFORDABLE UNIT must agree in writing to bound by the restrictive covenants and shall
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execute a note and deed of trust in an amount equal to the difference between fair market value
of the AFFORDABLE UNIT and the affordable housing price.
3. CALCULATION OF AFFORDABLE HOUSING COST.
i. Prior to. opening escrow, the sale price of each AFFORDABLE UNIT
shall be approved by the DIRECTOR. The maximum affordable sales price for the
AFFORDABLE UNIT shall be calculated in accordance with California Health and Safety Code
Section §50052.5 and Title 25 of the California Code of Regulations, Section 6920 (or successor
provision), and, in accordance with these provisions, shall result in a monthly housing cost that
does not exceed 1/12 of thirty percent (30%) of fifty percent (50%) of AREA MEDIAN INCOME,
adjusted for assumed household size. "AREA MEDIAN INCOME" is the median income for to
San Diego County as published annually by the Department of Housing and Community
Development under Title 25 of the California Code of Regulations, Section 6932 (or successor
provision), adjusted for actual household size.
ii. 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 Fannie Mae Monthly Average Commitment Rate on 30-Year Fixed -Rate Mortgages.
(c) The calculation shall include reasonable housing costs, which
includes, but not limited to, principal and interest, property taxes and assessments, property
insurance, a reasonable allowance for property maintenance and repairs, 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.
4. ADDITIONAL REQUIREMENTS.
i. At the times of the initial sales, each QUALIFIED HOMEBUYER
HOUSEHOLD shall execute a new Affordable Housing Agreement ("REPLACEMENT
HOUSING AGREEMENT') with the CITY in accordance with Encinitas Municipal Code
30.16.020(C)(9).
ii. Each QUALIFIED 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 QUALIFIED HOMEBUYER HOUSEHOLD
occupies the AFFORDABLE UNIT as their primary residence. The QUALIFIED HOMEBUYER
HOUSEHOLD shall provide source documentation verifying the occupancy status of the
QUALIFIED HOMEBUYER HOUSEHOLD.
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iii. Each QUALIFIED HOMEBUYER HOUSEHOLD agrees to give the
CITY notice of any prospective transfer, sale, or conveyance of the AFFORDABLE UNIT 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 set forth in the REPLACEMENT
HOUSING AGREEMENT. Time is of the essence.
iv. During the term of the REPLACEMENT HOUSING AGREEMENT,
HOMEBUYER HOUSEHOLD shall not rent or sublet the AFFORDABLE UNIT, or any part
thereof, to any person and/or entity. Provided however, the CITY may grant temporary waivers
of this requirement in the event of hardship affecting the QUALIFIED HOMEBUYER
HOUSEHOLD, such as illness in the family, military deployment or re -assignment, need to
relocate to obtain employment, and the like.
V. The sale, transfer and/or conveyance of each for -sale
AFFORDABLE UNIT is restricted as follows: (a) except as otherwise provided herein, each
AFFORDABLE UNIT shall only be sold, transferred or conveyed to a QUALIFIED HOMEBUYER
HOUSEHOLD or to the CITY; (b) each AFFORDABLE UNIT must be used only as the principal
residence of the subsequent purchaser during the time of ownership; (c) sale price to the
subsequent purchaser must be at a price that is affordable to such subsequent purchaser(s)
using the methodology set forth in this REGULATORY AGREEMENT; and (d) transfer of the
AFFORDABLE UNIT in accordance with the terms hereof must be accompanied by a recordable
assignment and assumption of the REPLACEMENT HOUSING AGREEMENT executed by the
transferee.
vi. Notwithstanding the foregoing, the following limited circumstances
are acknowledged by the CITY to be permitted transfers: (a) the transfer results from the death
of a spouse, and the transfer is to the surviving spouse who is also a member of the QUALIFIED
HOMEBUYER HOUSEHOLD; (b) a transfer to a spouse when the spouse becomes, by such a
transfer, a co-owner of the AFFORDABLE UNIT; (c) a transfer of the AFFORDABLE UNIT
resulting from a decree of dissolution of the marriage or legal separation or from a property
settlement agreement incidental to such a decree and by which a spouse who is already an co-
owner as part of the QUALIFIED HOMEBUYER HOUSEHOLD becomes the sole owner of the
AFFORDABLE UNIT; and (d) a transfer by the HOMEBUYER HOUSEHOLD to an inter vivos
trust in which the QUALIFIED HOMEBUYER HOUSEHOLD is the sole current beneficiary.
6. MANAGEMENT AND MAINTENANCE
A. 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.
B. OWNER shall re -certify each QUALIFIED TENANT HOUSEHOLD's income
eligibility every twelve months. If, upon recertification of a QUALIFIED TENANT HOUSEHOLD's
income, the QUALIFIED TENANT HOUSEHOLD's income exceeds the income for a VERY
LOW-INCOME HOUSEHOLD, but the QUALIFIED TENANT HOUSEHOLD's income does not
exceed the AREA MEDIAN INCOME, adjusted for household size, then the VERY LOW-
INCOME HOUSEHOLD shall continue to pay rent as restricted by this REGULATORY
AGREEMENT. In the event that the TENANT HOUSEHOLD's income exceeds AREA MEDIAN
INCOME, adjusted for household size, then the TENANT HOUSEHOLD shall be given written
notice that the TENANT HOUSEHOLD must vacate the AFFORDABLE UNIT on the later of the
expiration of the TENANT HOUSEHOLD's lease or upon ninety (90) days written notice to the
TENANT HOUSEHOLD.
C. Each QUALIFIED TENANT HOUSEHOLD shall enter into a written occupancy
agreement or lease with the OWNER, which shall incorporate the provisions contained
hereinabove.
D. OWNER shall maintain the AFFORDABLE UNITS and the PROPERTY in a
decent, safe, sanitary and habitable condition and in good repair. OWNER is responsible for
maintenance costs, including all repairs, corrections, and replacements necessary to maintain
and preserve the AFFORDABLE UNITS 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 AFFORDABLE UNITS and the PROPERTY for
compliance with this section. Failure by the OWNER to maintain the AFFORDABLE UNITS shall
constitute a default under this REGULATORY AGREEMENT.
E. 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 AFFORDABLE UNITS in
the event of fire or other major damage.
F. OWNER may contract with a management agent for the performance of the
obligations and duties required under this REGULATORY AGREEMENT. However, such an
arrangement shall not relieve the OWNER of responsibility for proper performance of these
duties. OWNER shall notify the CITY in writing within thirty (30) days of any change of
property management of the AFFORDABLE UNIT and/or PROPERTY.
G. OWNER shall cause the AFFORDABLE UNIT to be continually rented to a
QUALIFIED TENANT HOUSEHOLD and shall expeditiously re -rent the AFFORDABLE UNIT
whenever the AFFORDABLE UNIT becomes vacant. In the event the AFFORDABLE 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.
H. 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 households occupying the AFFORDABLE UNITS, including, without
limitation, the 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 households occupying the AFFORDABLE UNITS.
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7. VIOLATION OF REGULATORY AGREEMENT BY THE OWNER. In the event of any
breach, default or other violation of any of the provisions of this REGULATORY AGREEMENT
by the OWNER, that remains uncured following thirty (30) days (or within such further time as
the CITY, in its reasonable discretion, may permit) written notice to OWNER from the CITY,
the CITY may, without further notice, declare a default under this REGULATORY
AGREEMENT and the CITY shall have standing to initiate and pursue any and all actions or
proceedings, at law or in equity, to enforce the provisions of this this REGULATORY
AGREEMENT and/or to recover damages for any default hereunder, notwithstanding the fact
that such damages or the detriment arising from such a default may have actually been
suffered by some other person or by the public at large. Further, OWNER expressly agrees
that injunctive relief and specific performance are proper pre-trial and/or post -trial remedies
hereunder to assure compliance with this REGULATORY AGREEMENT. Nothing in this
Section and no recovery by the CITY shall restrict or limit the rights or remedies of persons or
entities other than the CITY, against OWNER in connection with the same or related acts by
OWNER, provided that OWNER shall not be subject to duplicate awards or recoveries. The
remedies set forth in this Section are cumulative and not mutually exclusive, except to the
extent that their award is specifically determined to be duplicative by final order of a court of
competent jurisdiction. Further, an award of damages hereunder shall not bar the exercise of
police power or other governmental powers, or the pursuit of criminal, civil or administrative
penalties by the CITY in connection with any default under this REGULATORY AGREEMENT.
OWNER acknowledges that a default under this REGULATORY AGREEMENT that remains
uncured may constitute a violation of state law.
8. ENFORCEMENT. OWNER expressly agrees and declares that the CITY or any
successor public agency is a proper party and shall have standing to initiate and pursue any
and all actions or proceedings, at law or in equity to enforce the provisions hereof and/or to
recover damages for any default hereunder and/or to enforce the terms of this REGULATORY
AGREEMENT. Further, the CITY or any successor public agency shall be the proper party to
waive, relinquish, release or modify the rights, covenants, obligations, or restrictions contained
in or arising under this REGULATORY AGREEMENT.
9. ATTORNEYS' FEES. In the event of any litigation for the enforcement or interpretation
of this REGULATORY AGREEMENT, whether an action -at -law, arbitration or any manner of
non -judicial dispute resolution agreed to by both parties by reason of the breach of any condition
or covenant, representation or warranty in this REGULATORY AGREEMENT or otherwise
arising out of this REGULATORY AGREEMENT, the prevailing party in such action, arbitration
or proceeding shall be entitled to recover from the other reasonable attorneys' fees to be fixed
by the court which shall render a judgment, as well as the costs of suit.
10. AMENDMENT. This REGULATORY AGREEMENT shall not be altered or amended
except by writing executed by the CITY and the owner of the PROPERTY at the time of such
amendment. Any such amendment shall be recorded against the PROPERTY.
11. 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.
10
12. BINDING ON SUCCESSORS. This REGULATORY AGREEMENT shall inure to the
benefit of and be binding upon the parties and their respective successors and assigns, heirs,
personal representatives, grantees, and successors -in -interest.
13. COVENANTS TO RUN WITH THE LAND. The covenants contained herein shall
constitute "covenants running with the land" pursuant to Civil Code Sections 1460, 1462, 1463,
1464, 1465, 1467 and 1468, to the extent applicable, and shall bind the PROPERTY and every
person having an interest therein during the term of this REGULATORY AGREEMENT,
including OWNER and its successors, heirs, and assigns. OWNER agrees for itself and its
successors that, in the event that, for any reason whatsoever, a court of competent jurisdiction
determines that the foregoing covenants do not run with the land, such covenants shall be
enforced as an equitable servitude against the PROPERTY.
14. RECORDATION. This REGULATORY AGREEMENT shall be recorded in the Office of
County Recorder of San Diego, California, senior to all monetary liens. Any amendments to this
REGULATORY AGREEMENT, shall at the expense of the OWNER, be acknowledged by each
of the parties and recoded in the official records of the County of San Diego.
15. MORTGAGEE PROTECTION. No violation or breach of the covenants, conditions,
restrictions, provisions or limitations contained in this REGULATORY AGREEMENT shall
defeat, render invalid or, in any way, impair the lien or charge of any permitted deed of trust
recorded on the Property provided, however, that any subsequent owner of the PROPERTY
shall be bound by the covenants, conditions, restrictions, limitations and provisions of this
REGULATORY AGREEMENT, whether such owner's title was acquired by foreclosure, deed in
lieu of foreclosure, trustee's sale or otherwise.
16. HEADINGS. The headings used in this REGULATORY AGREEMENT are for
convenience only and are not to be used to interpret the meaning of any of the provisions of this
REGULATORY AGREEMENT.
17. LIBERAL CONSTRUCTION. The provisions of this REGULATORY AGREEMENT shall
be liberally construed to effectuate its purpose. Failure to enforce any provision of this
REGULATORY AGREEMENT by the CITY shall not constitute a waiver of the right to enforce
the provision later.
18. NUMBER, GENDER. The singular shall include the plural and the plural the singular,
unless the context requires the contrary; and the masculine, feminine and neuter shall include
the masculine, feminine or neuter, as the context requires.
19. EXHIBITS. Any exhibits referenced herein and attached to this REGULATORY
AGREEMENT are hereby incorporated by reference.
20. 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.
11
21. GOVERNING LAW. This REGULATORY AGREEMENT shall be construed in
accordance with and governed by the laws of the State of California. Venue shall be San
Diego County.
22. 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 DLS Holdings LP
505 S. Vulcan Ave. P.O. Box 743.
Encinitas, CA 92024 Rancho Santa Fe, CA 92067
Attn: Housing Attn: Daniel Frye
23. INDEMNIFICATION AND WAIVER. OWNER agrees to defend with attorneys of
CITY's choosing and indemnify the CITY and its agents, elected officials, employees, and
officers (collectively, the "Indemnitees"), and hold the Indemnitees harmless from, any losses,
damages, liabilities, claims, actions, judgments, costs, and legal or other expenses (including
attorneys' fees) of every name, kind and description, which any of the Indemnitees may incur
as a direct or indirect consequence of (i) OWNER's failure to perform any obligations as and
when required by this REGULATORY AGREEMENT; (ii) any failure at any time of any of the
OWNER's representations or warranties to be true and correct; (iii) any act or omission by the
OWNER, any contractor, subcontractor, material supplier, engineer, architect, or other person
or entity with respect to the PROPERTY or the construction, management, maintenance or
operation of the PROJECT; (iv) the presence of hazardous substances at the PROJECT or
on the PROPERTY; (v) otherwise arising in any way from the construction, sale, rental or
operation of the PROPERTY and/or any of the PROJECT; or (vi) third party claims related to
the PROPERTY; provided, however, that OWNER shall not be required to indemnify, defend
or hold harmless any of the Indemnitees from claims, losses, damages, costs and expenses
related to the sole negligence or willful misconduct of the Indemnitees. The duty of the
OWNER to indemnify and hold harmless includes the duties to defend as set forth in Section
2778 of the Civil Code. OWNER shall indemnify and hold harmless the Indemnitees as set
forth herein regardless of the existence or degree of fault or negligence of the OWNER,
whether active or passive, primary or secondary. OWNER's duty to indemnify the Indemnitees
shall survive the termination of this REGULATORY AGREEMENT.
24. ACCEPTED AND AGREED.
OWNER:
DLS Holdings LP, a California limited partnership
By: DLS North Vulcan LLC, a California limited liability company
Its: General Partner
By: /�j
Dated
Daniel Frye, an er
12
(Notarization of OWNER signature is attached.)
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
13
CITY OF ENCINITAS:
Dated / o , 2 5-1 2 b`2-,R
by
Pamela Antil, City Manager
(Notarization of CITY signature is attached.)
Approved as to Form for City:
Dated ( by
(Notarization not required)
ar,gUin Preziosi, City Attorney
14
CALIFORNIA ACKNOWLEDGMENT CIVIL CODE § 1189
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 j
County of SOt EN i ® J}
On &kvibeV 95,e 2'3 before me, i kJ® ^W is
Date Here Insert Name and Title of the Officer
personally appeared vamxa,I,
Name(s) of Signer(s)
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.
-
*my
BRAM L. LEWIS
Notary Rubik - California
San Diego County
Commission M 2402633
Comm. Expires May 14, 2026
Place Notary Seal and/or Stamp Above
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.
Signature "�---"� L•'
Signature of Nota ublic
Completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document.
Description of Attached Document A Mret&4k 440 1 - VtQtj w%iit --
Title or Type of Document: &Rml r .Pe f" t heaar&Hev,
Document Date:
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer(s)
Signer's Name:
❑ Corporate Officer - Title(s):
❑ Partner - ❑ Limited ❑ General
❑ Individual ❑ Attorney in Fact
❑ Trustee ❑ Guardian or Conservator
❑ Other:
Signer is Representing: ^► i
02019 National Notary Association
Number of Pages:
Signer's Name:
❑ Corporate Officer - Title(s):
❑ Partner - ❑ Limited ❑ General
❑ Individual ❑ Attorney in Fact
❑ Trustee ❑ Guardian or Conservator
❑ Other:
Signer is Representing:
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
County of San Diego
On 1KGi4"/Cr
-12 2'� 2023Aefore Me,
notary public, personally appeared who
proved to me on the basis of satisfactory evidehe to be the pe/rsop(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the
same in "/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the perso '0(s), or the entity upon behalf of which tlie—person(s) acted, 6xecuted the
instrument. I' --
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
MARIA DEWITT
WITNESS my hand and official sea[. 6 COMM. -42331655
Notary Public - California
Z San Diego County 0
Signature/ � M Comm. Expires Aug. 15, 2024 —
(Seal)
15
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
County of San Diego
On , 2023, before me, ,
notary public, personally appeared 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.
Signature
(Seal)
16
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Lot 1 of City of Encinitas TM 18-220, in the City of Encinitas, County of San Diego, State of
California, according to Map thereof No. 16574 filed in the office of the San Diego County
Recorder on July 23, 2023.
17
EXHIBIT B
AFFORDABLE UNITS
Location and Unit Mix Breakdown Tables
Inclusionary and Density Bonus Housing Affordable Unit
Unit
Type
Sq.
Ft.
Bedroom(s)
Quantity
# of
Affordable
Units
/o of Total
Affordable
ffordability
Rate
Deed
Restriction
SFD —
Unit 6
1531
3
1
1
8%
50% AMI
perpetuity
EXHIBIT C
AFFORDABLE HOUSING UNIT
APN: 256-090-06 & 256-090-07
Affordable Housing Unit #6
Vulcan 12
P
S
N
F
GRAPHIC SCALE: 1" = 40'
40 20 0 40 80 120
19