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him document is recorded for the benefit of
~he City of Arroyo Grande and is exempt from
recording fees pursuant to Government Code
(Sections 6103 and 27383.
(RECORDING REQUESTED BY:
(City of Arroyo Grande
HEN RECORDED MAIL TO:
ry of Arroyo Grande
immunity Development Director
4 East Branch Street
JULIE RODEWALD
San Luis Obispo County-ClerklRecorder
geooMed at the request of
Public
IN
3/22/2007
11:01 AM
0 o c a: 2007019176 ~ Tdlea: 1 Peges: 38
Fees o.oo
Taxes 0.00
others o.oo
PAID $0.00
.O. Box 550
rrovo Grande. CA 93421
Space above reserved for use of County Recorder
AFFORDABLE HOUSING AGREEMENT
THIS AGREEMENT is made and entered into November3D, 2006, by and between the
CITY OF ARROYO GRANDE, a municipal corporation ("City"), and Ocean Oaks LLC, a
California limited liability company, with offices at 191 S. Oak Park Blvd., Suite 10,
Grover Beach CA 93433 ("Developer"). The City and Developer are referred to herein
as the "Parties".
Whereas, Developer is the owner and developer of approximately 3.98 acres of real
property that is described in the attached Exhibit A (the "Property");
Whereas, Developer proposes to develop and construct sixty (60) residential senior
citizen condominium units and associated common area improvements, (the "Project"),
on the above-described Property;
Whereas, the Project is required to include six (6) low-income and nine (9) moderate-
income affordable housing unit(s) for senior citizens (collectively, "Affordable Units")
pursuant to the Conditions of Approval for Conditional Use Permit No. 01-010 and
Tentative Tract Map No. 2216;
Whereas, Developer and the City intend to set forth in greater detail and specificity
within this separate document the terms and conditions for producing and selling
affordable ownership housing within the Project; and
Whereas, Developer and the City intend this Agreement to run with the title of the
Property and be binding on all parties that have or will acquire any right, title, or interest
in said Property prior to the sale of the Affordable Units to individual Eligible Purchasers.
THEREFORE, in consideration of the foregoing, and of the mutual terms and covenants
hereinafter set forth, the parties hereby agree that Developer shall produce and sell or
rent Affordable Units as described in this Agreement.
Affordable Housing Agreement
Ocean Oaks Senior Condominiums Page 1 October 2006
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1. Definitions. Depending upon their context, certain words and phrases used in
this Agreement shall have the same meaning as the definitions that are included in the
Affordable Housing Ordinance. Other words and phrases used in this Agreement shall
have the meanings that are defined below:
1.1 "Above Moderate Income" means Above Moderate Income as defined in the
Affordable Housing Ordinance.
1.2 "Administering Agency" means the San Luis Obispo Housing Authority, or any
other agency as determined by the City Council, which has experience in the
administration of affordable housing programs.
1.3 "Affordable Housing Ordinance" means Chapter 16.80 of the Arroyo Grande
Municipal Code as adopted by the Arroyo Grande City Council by Ordinance No. 514
C.S. on March 31, 2000.
1.4 "Affordable Unit(s)" means, depending upon the context, either one or more of
the affordable ownership housing units, the development and sale of which are
regulated by this Agreement.
1.5 "Agreement" means this Affordable Housing Agreement.
1.6 "Eligible Purchaser" means a household that is qualified by the Administering
Agency as meeting the requirements of this Agreement for the purchase of an
Affordable Unit.
1.7 "Maximum Allowable Sales Price" means the maximum price at which an
Affordable Unit may be sold under the Affordable Housing Ordinance. The Maximum
Allowable Sale Price established for each Affordable Unit is the absolute maximum
price that the Developer or individual may charge for the unit or may receive as
compensation for the unit. The Developer or individual owner may not charge or
receive any additional amount or compensation for an Affordable Unit regardless of
whether the additional amount is a) for options, upgrades or additional improvements to
the unit, b) paid through escrow or outside of escrow, c) paid prior to, after or as part of
the purchase escrow or d) paid in cash or in kind.
1.8 "Median Income" means the median family income of City of Arroyo Grande
households as defined in section 50093 of the California Health and Safety Code and
annually estimated by the U.S. Department of Housing and Urban Development.
1.9 "Low Income" means households defined in section 50093 of the California
Health and Safety Code.
1.10 "Moderate Income" means households defined in section 50093 of the California
Health and Safety Code.
Affordable Housing Agreement
Ocean Oaks Senior Condominiums Page 2 October 2006
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1.11 "Unrestricted Fair Market Value" means the amount that an Affordable Unit could
sell for if its sales price and occupancy were not restricted under the Affordable Housing
Ordinance. The City may, at its sole option, require that the Unrestricted Fair Market
Value be established through an appraisal by an MAI or other qualified appraiser.
2. Compliance With Affordable Housing Aareement. Developer shall comply with
this Affordable Housing Agreement, all of the applicable requirements and conditions of
the Affordable Housing Ordinance and any special terms, conditions, requirements
and/or waivers that were specifically applied to the Project as part of the City's approval
of the Project.
3. Number. Location and Distribution of Affordable Units. The Developer shall
develop fifteen (15) Affordable Units, nine (9) of which shall be reserved for sale or
lease to moderate-income seniors, and six (6) of which shall be reserved for sale or
lease to low-income seniors. The Affordable Units shall be of the same or similar square
footage and design of the other units in the Project.
4. Pricing of Affordable Units. Developer shall sell each Affordable Unit for no more
than the Maximum Allowable Sales Price set for that reserved unit as established by the
City pursuant to the Affordable Housing Ordinance. Developer shall notify City thirty
(30) days prior to offering each Affordable Unit for sale to allow City adequate time to
calculate and notify Developer of the Maximum Allowable Sales Price for the unit and
the income limits for Eligible Purchasers of such units. The method for calculating the
Maximum Affordable Sales Price is described in Exhibit B of this Agreement and shall
be calculated based upon the low-income and moderate-income limits provided by the
County of San Luis Obispo in its monthly bulletin summarizing the County's Affordable
Housing Standards.
5. Recordation and Release of Agreement. This Agreement shall be recorded
against the title to the Property prior to the recordation of the Final Subdivision Map for
the Project. Upon the recordation of a Final Subdivision Map, the City shall release
from this Agreement all units created by the Final Subdivision Map that are not
designated as Affordable Units governed by this Agreement.
6. Marketing and Sales of Affordable Units. Except where this Agreement provides
otherwise, Developer shall follow the procedures and comply with the requirements of
the Arroyo Grande Municipal Code when marketing and selling the Affordable Units.
6.1 Verification of Purchaser Eligibility. Prior to the close of escrow for the sale of
each Affordable Unit, the Developer shall provide verification to the City that the
Purchaser's income does not exceed the maximum allowed for the Low-Income or
Moderate-Income Level for that unit as such income qualification has been given to it by
the Administering Agency. Incomes shall be verified (or previous verifications shall be
updated) no earlier than sixty (60) days prior to close of escrow. The San Luis Obispo
Housing Authority, or similar nonprofit entity, shall qualify owners, and Developer may
rely on such qualification in verifying incomes to the City.
Affordable Housing Agreement
Ocean Oaks Senior Condominiums Page 3 October 2006
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6.2 Individual Reaulatorv. Security and Disclosure Documents. Prior to the sale of
each Affordable Unit, Developer shall ensure that:
a. The Eligible Purchaser and the City sign a Purchaser's Occupancy and
Resale Agreement With Option to Purchase ("Resale Agreement"), which is in the form
that is attached as Exhibit C to this Agreement. The Resale Agreements shall be
recorded against the title to each designated Affordable Housing Unit immediately
following the liens for any loans that are obtained by the Purchaser to finance the
purchase of the unit.
b. The Eligible Purchaser signs a Deed of Trust, which is in the form that is
attached as Exhibit D to this Agreement, to secure performance of the Purchaser's
obligations under the Resale Agreement and, should the Purchaser fail to comply with
the terms of the Resale Agreement, payment of Excess Sales Proceeds. The Deed of
Trust shall be recorded against the title to the designated Affordable Housing Unit
following the liens for any loans that are obtained by the Purchaser to finance the
purchase of the unit.
c. The Purchaser signs a Disclosure statement concerning the Affordable
Housing Ordinance, the Resale Agreement and the Deed of Trust, provided such form
is provided to Developer by the City.
7. Restrictions on Rental of Affordable Units. The following shall only apply
to Affordable Units offered for rent:
7.1 Rental and Occupancv of Affordable Units. The Affordable Unit offered for rent
under the terms of this Affordable Housing Agreement shall be rented to and occupied by
an Eligible Household throughout the term of this Agreement.
7.2 Maximum Allowable Rent. The rent that is charged to occupy the rented
Affordable Unit shall not exceed the lower of (1) the affordable rent set forth in the
Affordable Housing Standards for an Eligible Household for a unit with the same number
of bedrooms; or (2) the unrestricted market rent charged for a comparable unit in the
community.
7.3 Verification of Tenant's Initial Eligibility. Prior to the occupancy of the rented
Affordable Unit by a new tenant, the tenant's income shall be verified and documented by
an Independent Agency to determine that the tenant's income does not exceed the
maximum allowed under the Affordable Housing Standards.
7.4 Recertification of Tenant Eligibility. Each year on the anniversary date of the
tenancy, or another date approved in advance by the City, an Independent Agency shall
conduct a recertification of the income and eligibility of the household that occupies each
Affordable Unit.
Affordable Housing Agreement
Ocean Oaks Senior Condominiums Page 4 October 2006
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7.5 Annual Resort. On or before June 30th of each year, or at such other interval as
mutually agreed by the Parties, the Developer, or its assignee, shall arrange for
preparation and delivery to the City of an Annual Report regarding rentals of the
Affordable Units to enable the City to determine if the Developer's compliance with the
terms of Section 7 of this Agreement. The Annual Report for the rentals shall include
the following information: (1) the certified income, household size, length of residency
and other demographic and financial characteristics of the household that occupies
each rented Affordable Unit; (2) the rent charged for each rented Affordable Unit; (3) the
rent charged for comparable market-rate units at the Project; and (4) other pertinent
information as may be required by the City. Annual reports shall be submitted to the
City from an Independent Agency verifying compliance with the restrictions on rental of
Affordable Units, pursuant to Arroyo Grande Planning Commission Resolution No. 02-
1834.
7.6 Default. The Proposed Resale Agreement attached hereto as Exhibit C shall
provide that the City of Arroyo Grande shall have the first opportunity to purchase an
affordable unit that has a defaulted loan.
8. Other Provisions. The following terms and conditions shall also apply to this
Agreement and the development and sale of the Affordable Units that are governed by
this Agreement.
8.1 Term of Agreement. This Agreement shall remain in force until the close of
escrow of the last Affordable Unit to an Eligible Purchaser, after which the deed
restrictions and resale agreement shall govern the transfer of such Affordable Units.
8.2 Term of Affordability. Each Affordable Unit shall remain designated as an
Affordable Unit for a minimum period of thirty (30) years from the date of its sale by
Developer to an Eligible Purchaser pursuant to a 30-year deed restriction to be
recorded against each Affordable Unit, or equivalent restrictive covenant as approved
by the City Attorney.
8.3 Arroyo Grande Municipal Code. Unless the text of this Agreement specifies
otherwise, any reference to a Section number is a reference to the Arroyo Grande
Municipal Code.
8.4 No Joint Venture or Partnership. Nothing contained in this Agreement or any
document executed with this Agreement shall be construed as creating a joint venture
or partnership between the City and Developer.
8.5 Resorting and Compliance Monitoring. Compliance with the requirements of this
Agreement covering the initial sale of the Affordable Units shall be reported to the City
by the Developer and certified by a third party such as a Certified Public Accountant
approved by the City Manager. Annual reports shall be submitted to the City by an
Affordable Housing Agreement
Ocean Oaks Senior Condominiums Page 5 October 2006
L. ti:
independent agency, such as the San Luis Obispo County Housing Authority, verifying
continuing compliance with the requirements of this Agreement. Developer shall provide
the City with other reports as reasonably required by the City to verify compliance with
this Agreement.
8.6 Appointment of Other Agencies. At its sole discretion, City may designate,
appoint or contract with any other public agency, for-profit or nonprofit organization to
perform the City's obligations under this Agreement.
8.7 Burden to Run With Proaertv. The covenants and conditions herein contained
shall apply to and bind the heirs, executors, administrators, successors, transferees,
and assignees of all the parties having or acquiring any right, title or interest in or to any
part of the Property and shall run with and burden the Property until terminated or
released in accordance with the provisions hereof. Prior to the issuance of building
permits, the Developer shall expressly make the conditions and covenants contained in
this Agreement a part of any deed or other instrument conveying any interest in the
Property. Notwithstanding anything to the contrary set forth in this Agreement,
individual purchasers of units pursuant to any approved public report in compliance with
the California Subdivided Lands Act, and mortgage lenders holding deeds of trust on
such individual units after sale to such purchasers, shall not be subject to the terms of
this Agreement; and the terms of this Agreement shall be of no further force or effect
with respect to such completed unit on the date of the recordation of a deed to the
individual purchaser.
8.8 Hold Harmless. Developer will indemnify and hold harmless (without limit as to
amount) City and its elected officials, officers, employees and agents in their official
capacity (hereinafter collectively referred to as "Indemnities"), and any of them, from
and against all loss, all risk of loss and all damage (including expense) sustained or
incurred because of or by reason of any and all claims, demands, suits, actions,
judgments and executions for damages of any and every kind and by whomever and
whenever made or obtained, allegedly caused by, arising out of or relating in any
manner to the development of the Property or the sale of units on the Property, and
shall protect and defend Indemnities, and any of them with respect thereto.
8.9 Insurance. Developer shall obtain, at its expense, comprehensive general
liability insurance for the development of the Property naming Indemnities as additional
named insureds with aggregate limits of not less than Two Million Dollars ($2,000,000)
for bodily injury and death and property damage, including coverage for contractual
liability and products and completed operations purchased by Developer from an
insurance company duly licensed to engage in the business of issuing such insurance in
the State, with a current Best's Key Rating of not less than A-VII, such insurance to be
evidenced by an endorsement which so provides and delivered to the City Clerk prior to
the issuance of any building permit for the development of the Property.
Allordable Housing Agreement
Ocean Oaks Senior Condominiums Page 6 October 2006
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8.10 Recording of Agreement. The parties hereto shall cause this Agreement to be
recorded against the Property in the official Records of the County of San Luis Obispo.
8.11 Third Partv Beneficiaries. This Agreement is made for the sole protection and
benefit of City, and its permitted successors. No other person shall have the right of
action based on any provision of this Agreement.
8.12 Aaalicabte Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of California. Any dispute arising out of this Development
Agreement shall be determined by the state courts of the County of San Luis Obispo.
8.13 Partial Invalidity or Unenforceability. If any provision of this Agreement shall be
determined by a court to be invalid and/or unenforceable, or if any provision of this
Agreement is rendered invalid or unenforceable according to the terms of any statute of
the State of California which became effective after the effective date of this Agreement,
then the remaining provisions of this Agreement shall nevertheless remain in full force
and effect.
8.14 Notices and Corresaondence. Any notices and correspondence concerning this
Agreement shall be sent to the parties at the following address:.
City of Arroyo Grande
P. O. Box 550
Arroyo Grande, CA 93421
Attn: Kelly Wetmore, City Clerk
Ocean Oaks LLC
191 S. Oak Park Blvd., Suite 10
Grover Beach, CA 93433
Attn: Jason Blankenship
IN WITNESS WHEREOF, this Agreement has been duly executed by the
undersigned as of the date set forth below.
OCEAN OAKS, LLC
By: OCEAN OAKS BUILDERS, INC.
Its: Manager
By: /~
Gary . Yo ,Its resident
CITY:
APPROVED AS TO FORM AND
LEGAL EFFECT
S~V N ADAMS, City Manager
Affordable Housing Agreement
Ocean Oaks Senior Condominiums
d~~
TIM THY J. EL, Cit ttorney
Page 7 October 2006
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STATE OF CALIFORNIA )
)SS
COUNTY OF SAN LUIS OBISPO )
On NbIA'2 a 200 before
me, LL WET oRE a notary
public~personallyappeared 5 A~F}nt5
personally known to me ( e
' ) to be the person(e)
whose name(sj is/are subscribed to the within
instrument and acknowledged to me that
he/sbe/Ikiey executed the same in his/herhtheir
authorized capacity(ies) and that by his/her/t;yem
signature(aj on the instrument the person(a), or the
entity upon behalf of which the person(sj acted,
executed the instrument.
WITNESS my hand and official seal.
Signa ure
STATE OF CALIFORNIA )
SS
COUNTY OF SAN LUIS OBISPO )
On .~'~afi,<ti ).~ , ZD~7 before
me, a notary
public pars Wally appeared eV
personally known to me
b ~ ~ o be the person(
whose name is/8td subscribed to the within
instrument and acknowledged to me that
hel>~~+ey executed the same in his/A4F/ tfa~jt
authorized capacity(ibs~ and that by his/Pied/tAsfr
signature(ffi) on the instrument the person(, or the
entity upon behalf of which the person( acted,
executed the instrument.
WITNESS and a d official seal.
Signature
Affordable Housing Agreement
Ocean Oaks Senior Condominiums Page 8
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October 2006
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Exhibits
Exhibit A -Legal Description
Exhibit B -Calculation of Maximum Allowable Sales Prices
Exhibit C -Form of Resale Agreement
Exhibit D -Form of Deed of Trust
Affordable Housing Agreement
Ocean Oaks Srnior Condominiums Page 9 October 2006
Exhibit A
Legal Description
Real property in the City of Arroyo Grande, County of San Luis Obispo, State of
California, described as follows:
Parcel A:
Parcel 1 of Parcel Map No. AG-87-35, in the City of Arroyo Grande, County of San Luis
Obispo, State of California, according to map recorded August 16, 1988 in Book 43,
Page 86 of Parcel Maps, in the office of the County Recorder of said county.
Parcel B:
A private drainage easement as granted and shown across Parcel 2 of Parcel Map AG-
87-35, in the City of Arroyo Grande, County of San Luis Obispo, State of California,
according to map recorded August 16, 1988 in Book 43, page 86 of Parcel Maps, in the
office of the County Recorder of said county.
APN: 007-776-003 through 061
Exhibit B
MAXIMUM ALLOWABLE SALES PRICE CALCULATION FOR MODERATE
AND LOWER INCOME UNITS
The maximum allowable sales price calculation for moderate and lower-income units
shall be based on the affordable housing standards issued monthly by the San Luis
Obispo County Department of Planning and Building. Below are the steps to calculate
the maximum allowable sales price. The price of the units shall be determined at the
time of sale.
1. Determine the annual Arroyo Grande Moderate or Lower Income Limit for a
household size that is one person larger than the number of bedrooms in the
affordable unit;
2. Multiply the income limit determined in the previous step by thirty percent (30%)
to obtain an annual housing allowance of thirty percent (30%) of income;
3. Divide the annual housing allowance determined in the previous step by twelve
(12) to determine the monthly housing allowance;
4. Using a standard amortization table or formula, calculate the loan amount that
can be repaid over thirty (30) years with equal monthly payments equal to the
monthly housing allowance using the prevailing interest rate for thirty (30) years,
and assuming a fully amortized fixed rate mortgage; and
5. Divide the loan amount calculated in the previous step by 0.95 to determine the
Maximum Allowable Sales Price assuming a five percent (5%) down payment.
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Exhibit C
Form of Resale Agreement
(A copy of the proposed individual Resale Agreement follows this page)
Complimentary Recording Requested
Pursuant To Government Code
Section 6103 and 27383
When Recorded Mail To:
City of Arroyo Grande
P. O. Box 550
Arroyo Grande, CA 93421
Attn: City Clerk
.,,,,
BUYER'S OCCUPANCY AND RESALE AGREEMENT
WITH OPTION TO PURCHASE
CITY OF ARROYO GRANDE INCLUSIONARY HOUSING PROGRAM
Owner:
Address of Home:
Development:
Income Category of Home:
Number of Bedrooms in Home:
Sales Price at Original Purchase
579 Camino Mercado, Suite No.
Ocean Oaks Condominiums
Circle one: Moderate Lower
Two
Circle one: $216,763.00 $97,341.00
This Buyer's Occupancy and Resale Agreement with Option to Purchase (the
"Agreement") is entered into as of this day of , 2006, by and between the City of
Arroyo Grande (the "City") and (the "Owner").
RECITALS
A. Pursuant to the City of Arroyo Grande's Affordable Housing Ordinance
(Ordinance No. 514 C.S.), Chapter 16.80 of the Arroyo Grande Municipal Code, a portion of all
new housing constructed in the City of Arroyo Grande is required to be affordable to median to
above moderate-income households.
B. Ocean Oaks LLC, a Limited Liability Company (the "Developer") entered into an
Affordable Housing Agreement dated .Pursuant to the Affordable Housing Agreement,
the Developer agreed to sell nine (9) condominium units to moderate-income households and six
(6) condominium units to low-income households at affordable prices (the "Affordable Units").
C. Owner intends to purchase the property located in the City of Arroyo Grande, and
more particulazly described in Exhibit A attached hereto and incorporated herein (the "Home").
The Home is one of the Affordable Units. The Home has been designated by the City and the
Developer as (choose: amoderate-income or low-income) unit.
D. Pursuant to the Affordable Housing Ordinance and the Affordable Housing
Agreement, the Developer and the City aze required to ensure the continued affordability of the
Home as an Affordable Unit, and the City therefore requires the Owner to execute this
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Agreement as a condition of the Owner's purchase of the Home. The Owner has agreed to
execute and comply with this Agreement in consideration of the Developer's agreement to sell
the Home to the Owner at an affordable price that is below the fair market value of the Home.
E. The purpose of this Agreement is to place resale controls on the Home and to
require the payment of any excess proceeds of sale to the City. This Agreement also provides
the City an option to purchase the Home at a restricted price, given in consideration of the
economic benefits to the Owner resulting from purchase of the Home at a below market price
under the City's Affordable Housing Program.
F. The Owner is receiving a first mortgage loan (the "First Mortgage Loan") from
(the "First Lender"). The First Mortgage Loan is secured by a deed of trust
executed by the Owner in favor of First Lender and recorded in the County of San Luis Obispo
(the "First Mortgage Deed of Trust"). The Owner may receive a second mortgage loan (the
"Second Mortgage Loan), not to exceed fifteen percent (15%) of the total purchase price, from
N/A (the "Second Lender"). The Second Mortgage Loan is secured by a deed of trust
executed by the Owner in favor of the Second Lender and recorded in the County of San Luis
Obispo (the "Second Mortgage Deed of Trust").
G. This Agreement shall be secured by a deed of trust on the Home (the "City Deed
of Trust"). This Agreement and the City Deed of Trust shall be subordinate to the lien of the
First Mortgage Deed of Trust and Second Mortgage Deed of Trust.
NOW, THEREFORE, in consideration of the benefits received by the Owner and the
City hereunder, the Owner and the City agree, as follows:
1. DEFINITIONS
The following terms aze specially defined for this Agreement and their definitions can be
found in the sections indicated below:
A. "Affordable Housing Ordinance" -Recital A
B. "Agreement" -First sentence of the Agreement on page 1
C. "Affordable Price" -Section l OB
D. "City" -First sentence of the Agreement on page 1
E. "City Deed of Trust" -Recital G
F. "City Option" -Section 12A
G. "City Option Price" -Section 12B
H. "Eligible Purchaser" -Section 11B
I. "Excess Sales Proceeds" -Section 14
"Unrestricted Fair Mazket Value" -Section lOB
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K. "First City Response Notice" -Section 8
L. "First Lender" or "Second Lender"- Recital F
M. "First Mortgage Deed of Trust" and "Second Mortgage Deed of Trust" -Recital F
N. "First Mortgage Loan" and "Second Mortgage Loan" -Recital F
O. "Home" - Recital C and Section 2
P. "Housing Price Index" -Section l0A
Q. "Indexed Value" -Section l0A
R. "Mazket Purchaser" -Section 14
S. "Mazketing Period" -Section 11A
T. "Maximum Allowable Sales Price" -Section 10
U. "Owner" -First sentence of the Agreement on Page 1
V. "Owner's Notice of Failure to Locate Eligible Purchaser" -Section 11E
W. "Owner's Notice of Intent to Sell" -Section 7
X. "Second City Response Notice" -Section 11E
Y. "Transfer" -Section 6
2. DESCRIPTION OF PROPERTY
This Agreement concerns the real property in the City of Arroyo Grande, State of
California with the street address set forth on page 1 of this Agreement, which is more fully
described in Exhibit A attached hereto and incorporated in this Agreement by reference (the
"Home").
3. OWNER CERTIFICATIONS• OWNER OCCUPANCY REOUII2EMENT
The Owner certifies that the financial and other information previously provided in order
to qualify to purchase the Home is true and correct as of the date first written above. The Owner
shall occupy the Home as the Owner's principal place of residence. The Owner shall be
considered as occupying the Home if the Owner is living in the unit for at least ten (10) months
out of each calendaz yeaz. The Owner shall provide an annual written certification to the City
that the Owner is occupying the Home as his or her principal place of residence.
4. LEASING OF HOME
The Owner shall not lease the Home to another party. Any lease in violation of this
Agreement is prohibited, and shall be a default under this Agreement and the City Deed of Trust.
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MAINTENANCE AND INSURANCE REQUIREMENTS
A. The Owner shall maintain the Home in good repair and in a neat, clean and
orderly condition and will not commit waste or permit deterioration of the Home.
B. The Owner shall maintain a standazd all risk property insurance policy equal to
the replacement value of the Home (adjusted every five (5) yeazs by appraisal, if requested by
City), naming the City as an additional insured. Additional insurance requirements are set forth
in Section 5 of the City Deed of Trust.
6. RESTRICTIONS ON RESALE OF THE HOME
Any Transfer of the Home will be subject to the provisions of this Agreement including,
without limitation, the City Option described in Section 12 below. "Transfer" means any sale,
assignment or transfer, voluntary or involuntary, of any interest in the Home, including, but not
limited to, a fee simple interest, a joint tenancy interest, a life estate, a leasehold interest, or an
interest evidenced by a land contract by which possession of the Home is transferred and Owner
retains title. Any Transfer without satisfaction of the provisions of this Agreement is prohibited.
Transfers by devise or inheritance to an existing spouse or domestic partner, or a spouse as part
of a dissolution proceeding, or in connection with mamage shall not be considered a Transfer for
the purposes of this Agreement.
7. NOTICE OF INTENDED TRANSFER: PREPARATION OF HOME FOR SALE
A. In the event the Owner intends to Transfer or vacate the Home, the Owner shall
promptly give the City written notice of such intent (the "Owner's Notice of Intent to Sell"). The
Owner's Notice of Intent to Sell shall be sent to the City by certified mail, return receipt
requested at the address provided in Section 31 of this Agreement. The Owner's Notice of Intent
to Sell shall include the information necessary for the City to determine the Maximum Allowable
Sales Price of the Home, including the following information:
(1) the address of the Property;
(2) the date of purchase of the Home by the Owner;
(3) the purchase price of the Home paid by the Owner at the time of his/her
purchase;
(4) a copy of the HUD-1 Settlement Statement or equivalent document from
the close of escrow on the Owner's purchase of the Home;
(5) the date on which Owner intends to vacate Home;
(6) the date Home will be placed on the mazket; and
(7) the name and phone number of the person to contact to schedule
inspection of the Home by the City.
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B. Following delivery to the City of the Owner's Notice of Intent to Sell, the Owner
shall prepare the Home for sale, as follows:
(1) within thirty (30) days of delivery of the Owner's Notice of Intent to Sell,
the Owner shall obtain and deliver to the City a current written report of inspection of the Home
by a licensed structural pest control operator;
(2) within the sooner of (a) sixty (60) days from the date of delivery of the
Owner's Notice of Intent to Sell, or (b) prior to close of escrow on the Transfer, the Owner shall
repair all damage noted in the pest report including damage caused by infestation or infection by
wood-destroying pests;
(3) within ten (10) business days of the date of the Owner's Notice of Intent to
Sell, the Owner shall allow the City, or its designee, to inspect the Home to determine its
physical condition;
(4) if the Home is vacant, the Owner shall maintain utility connections until
the close of escrow on the Transfer;
CITY RESPONSE TO OWNER'S NOTICE OF INTENT TO SELL
The City shall respond in writing (the "First City Response Notice") to the Owner's
Notice of Intent to Sell within ten (10) business days of City receipt of a complete Owner's
Notice of Intent to Sell that includes all information required under Section 7 above and access
to inspect the Home as required under Section 7(B)(3) above. The First City Response Notice
shall inform the Owner of the following information: (1) the maximum qualifying income for
an Eligible Purchaser; (2) the certifications required of an Eligible Purchaser; and (3) the
Maximum Allowable Sales Price the Owner may receive for the Home, calculated by the City
pursuant to Section 11 below.
9. OWNER ACKNOWLEDGMENT OF CITY RESPONSE NOTICE
No later than seven (7) days following the date of the First City Response Notice, the
Owner shall acknowledge in writing to the City that he/she has received the City Response
Notice and still intends to Transfer the Home.
10. DETERMINATION OF MAXIMUM ALLOWABLE SALES PRICE FOR
RESTRICTED SALE
If the Owner sells to an Eligible Purchaser, the maximum sales price (the "Maximum
Allowable Sales Price") that the Owner shall receive from the Eligible Purchaser for purchase of
the Home shall be the rg eater of the Indexed Value or the Affordable Price, but in no event
greater than the Unrestricted Fair Mazket Value.
A. Indexed Value. The Indexed Value of the Home means the sales price of the
Home at the time of purchase by the Owner, as set forth on page 1 of this Agreement, increased
by fifty percent (50%) of the annual percentage of increased value in the Housing Price Index
from the date of the original purchase of the Home by the Owner to the date of receipt by the
City of the Owner's Notice of Intent to Transfer, and, where applicable, adjusted pursuant to
subsection (2) below to reflect the cost of deferred maintenance. "Housing Price Index" shall
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mean the San Luis Obispo-Arroyo Grande Metropolitan Statistical Area Housing Price Index as
published from time to time by the office of Federal Housing Enterprise Oversight or, if such
index is no longer published, a comparable index designated by the City of Arroyo Grande.
B. Affordable Price. The Affordable Price of the Home means the affordable price
for a Median Income Home, Moderate Income Home, or Above Moderate Income Home (as
applicable, pursuant to the designation of the Home on page 1 of this Agreement), pursuant to
City regulations.
C. Unrestricted Fair Mazket Value. In certain circumstances it may be necessary to
determine the fair mazket value of the Home (the "Unrestricted Fair Mazket Value"). These
circumstances include: (1) where the parties wish to determine if the Maximum Allowable Sales
Price exceeds the Unrestricted Fair Mazket Value in order to determine the Maximum Allowable
Sales Price pursuant to Section 10; (2) where the Owner is selling the Home to an Market
Purchaser at an unrestricted price pursuant to Section 13; and (3) where the Owner wishes to
refinance the First or Second Mortgage Loan as described in Section 24 below. If it is necessary
to determine the Unrestricted Fair Mazket Value of the Home, it shall be determined by a
certified MAI or other qualified real estate appraiser approved in advance by the City. If
possible, the appraisal shall be based upon the sales prices of comparable properties sold in the
mazket azea during the preceding three (3)-month period. The cost of the appraisal shall be
shazed equally by the City and the Owner, unless the appraisal is obtained from a new purchaser,
or unless the appraisal is necessary because the Owner wishes to refinance the First or Second
Mortgage Loan pursuant to Section 24 below, in which event the Owner shall pay the cost of the
appraisal. Nothing in this section shall preclude the Owner and the City from establishing the
Unrestricted Fair Mazket Value of the Home by mutual agreement in lieu of an appraisal
pursuant to this section.
D. Holdback for Damage Repair Cost. If the City finds that the Owner, through
neglect, abuse, or lack of adequate maintenance, has damaged the Home, the City may require
that repairs be made at the Owner's cost prior to sale or through the escrow for the sale of the
Home.
11. SALE OF HOME TO ELIGIBLE PURCHASER AT RESTRICTED PRICE
Following receipt of the First City Response Notice notifying the Owner of the
Maximum Allowable Sales Price, the Owner may proceed to sell the Home in compliance with
the following requirements:
A. Marketing Period. The Owner shall have ninety (90) days from the date of the
First City Response Notice (the "Marketing Period") to mazket the Home and find an Eligible
Purchaser. During the Marketing Period, the Owner shall use bona fide good faith efforts to sell
the Home to an Eligible Purchaser in compliance with this Section 11, including listing the
Home on the Multiple Listing Service, keeping the Home in an orderly condition, making the
Home available to show to agents and prospective buyers, and providing buyers with Eligible
Purchaser requirements, including income qualifications and the City's form of disclosure
statement summarizing the terms of the buyer's resale agreement. A proposed purchaser
("Proposed Purchaser"), who the Owner believes will qualify as an Eligible Purchaser, shall be
referred to the City for an eligibility determination.
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B. Eligible Purchaser. A Proposed Purchaser shall qualify as an "Eligible Purchaser"
if he or she meets the following requirements, as determined by the City:
(1) Intent to Owner Occunv. The Proposed Purchaser shall certify that he or
she will occupy the Home as his or her principal place of residence throughout his or her
ownership.
(2) Agreement to Sign Buyer's Resale Agreement and to Cooperate with City.
The Proposed Purchaser shall agree to sign a buyer's resale and occupancy agreement with
option to purchase restricting future resale of the Home and shall agree to cooperate fully with
the City in promptly providing all information requested by the City to assist the City in
monitoring the Proposed Purchaser's compliance with the buyer's resale and occupancy
agreement with option to purchase.
(3) Income Eli ibg ility. The combined maximum income for all household
members of the Proposed Purchaser shall not exceed the income level designated by the City in
the First City Response Notice.
C. Maximum Allowable Sales Price and Closing Costs. The purchase price for the
sale of the Home by the Owner to the Eligible Purchaser shall not exceed the Maximum
Allowable Sales Price calculated by the City pursuant to City regulations and Section 10 above,
as set forth in the First City Response Notice. The Maximum Allowable Sales Price shall not
include closing costs paid by the Eligible Purchaser. The closing costs paid by the Eligible
Purchaser shall not exceed reasonable and customary buyers' closing costs in the County of San
Luis Obispo.
D. Disclosure and Submittals. The Owner and the Proposed Purchaser shall provide
the following information and documents to the City:
(1) The name, address and telephone number in writing of the Proposed
Purchaser.
(2) A signed financial statement of the Proposed Purchaser in a form
acceptable to the City and any other supporting documentation requested by the City. The
financial information shall be used by the City to determine the income eligibility of the
Proposed Purchaser.
(3) The proposed sales contract and all other related documents which shall
set forth all the terms of the sale of the Home. Said documents shall include at least the
following terms: (a) the sales price; and (b) the price to be paid by the Proposed Purchaser for
the Owner's personal property, if any, for the services of the Owner, if any, and any credits,
allowances or other consideration, if any.
(4) A written certification, from the Owner and the Proposed Purchaser in a
form acceptable to the City that the sale shall be closed in accordance with the terms of the sales
contract and other documents submitted to and approved by the City. The certification shall also
provide that the Proposed Purchaser or any other party has not paid and will not pay to the
Owner, and the Owner has not received and will not receive from the Proposed Purchaser or any
other party, money or other consideration, including personal property, in addition to what is set
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forth in the sales contract and documents submitted to the City. The written certification shall
also include a provision that in the event a Transfer is made in violation of the terms of this
Agreement or false or misleading statements aze made in any documents or certification
submitted to the City, the City shall have the right to foreclose on the Home or file an action at
law or in equity as may be appropriate. In any event, any costs, liabilities or obligations incurred
by the Owner and the Proposed Purchaser for the return of any moneys paid or received in
violation of this Agreement or for any of the Owner's and/or the Proposed Purchaser's costs and
legal expenses, shall be borne by the Owner and/or the Proposed Purchaser and they shall hold
the City and its designee harmless and reimburse the City's and its designee's expenses, legal fees
and costs for any action they reasonably take in good faith in enforcing the terms of this
Agreement.
(5) An executed buyer's resale and occupancy agreement and option to
purchase and an executed deed of trust from the Proposed Purchaser in forms provided by the
City. The recordation of the new deed of trust and buyer's resale and occupancy agreement and
option to purchase shall be a condition of the City's approval of the proposed sale.
(6) The name of the title company escrow holder for the sale of the Home, the
escrow number, and name, address, and phone number of the escrow officer.
(7) Upon the close of the proposed sale, certified copies of the recorded City
deed of trust and buyer's resale agreement, a copy of the final sales contract, settlement
statement, escrow instructions, and any other documents which the City may reasonably request.
E. Failure To Locate Eligible Purchaser: Notice to City. If, despite bona fide good
faith marketing efforts, the Owner is unable to locate an Eligible Purchaser during the Mazketing
Period and any extensions to the Mazketing Period granted by the City, the Owner shall provide
written notice to the City of this fact (the "Owner's Notice of Failure to Locate Eligible
Purchaser"). Within thirty (30) days of receipt of the Owner's Notice of Failure to Locate
Eligible Purchaser, the City shall provide a second response notice to the Owner (the "Second
City Response Notice") stating either (1) that the City will exercise the City Option to purchase
the Home pursuant to Section 12 below, or (2) that the Owner may Transfer the Home to a
person of the Owner's choosing (a "Market Purchaser") who is not an Eligible Purchaser, at an
unrestricted price (supported by an MAI or other qualified appraisal), but shall pay all Excess
Sales Proceeds to the City as set forth in Section 13 below.
12. CITY PURCHASE OPTION
A. Exercise of Option. If the Owner fails to sell the Home to an Eligible Purchaser
at or below the Maximum Allowable Sales Price, the City shall then have the option to purchase
the Home (the "City Option") for the City Option Purchase Price, as defined below. The City
Option maybe exercised by the City in the Second City Response Notice (as described in
Section 11 E above), to be sent by the City to the Owner within thirty (30) days of receipt of the
Owner's Notice of Failure to Locate Eligible Purchaser. If the Second City Response Notice
states that the City will exercise the City Option, the City shall purchase the Home within forty-
five (45) days of the date of the City's Second Response Notice. The City may, instead of
purchasing the Home itself, assign its right to purchase the Home pursuant to the City Option to
another public agency, a nonprofit corporation, or to an Eligible Purchaser. In the event of
exercise of the City Option and purchase of the Home by the City or its designee, the Owner
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shall permit a final walk-through of the Home by the City in the final three (3) days prior to close
of escrow on the Transfer.
B. City Option Price. If the City exercises the City Option, the purchase price to be
paid by the City (the "City Option Purchase Price") shall be the highest of the following: (1) the
outstanding principal balance of the First Mortgage Loan; (2) the total of the outstanding
principal balance of the First Mortgage Loan and any purchase money Second Mortgage Loan;
or (3) the appraised value of the Home with the affordability covenants intact, as determined by
an appraiser selected by the City and approved by the Owner, and who employs standard
appraisal practices.
13. UNRESTRICTED SALES
If the Second City Response Notice states that the City will not exercise the City Option
and that the Owner may proceed to Transfer the Home to a person of the Owner's choosing (a
"Market Purchaser") who is not an Eligible Purchaser, at an unrestricted price (supported by an
MAI or other qualified appraisal), the Owner may proceed to do so, but the Owner shall pay all
Excess Sales Proceeds to the City as set forth in Section 14 below. If the Owner Transfers the
Home pursuant to this Section 13, the purchaser shall not be required to execute a buyer's resale
and occupancy agreement with option to purchase, and the City shall reconvey the liens of this
Agreement and the City Deed of Tmst from the Home, provided that the Owner pays the Excess
Sales Proceeds to the City pursuant to Section 14 below. The Owner shall provide the City with
the following documentation associated with such a Transfer:
(1) The name and address of the purchaser;
(2) The final sales contract and all other related documents which shall set
forth all the terms of the sale of the Home. Said documents shall include at least the following
terms: (a) the sales price; and (b) the price to be paid by the Market Purchaser for the Owner's
personal property, if any, for the services of the Owner, if any, and any credits, allowances or
other consideration, if any.
(3) A written certification, from the Owner and the Market Purchaser in a
form acceptable to the City that the sale shall be closed in accordance with the terms of the sales
contract and other documents submitted to and approved by the City. The certification shall also
provide that the Mazket Purchaser or any other party has not paid and will not pay to the Owner,
and the Owner has not received and will not receive from the Market Purchaser or any other
party, money or other consideration, including personal property, in addition to what is set forth
in the sales contract and documents submitted to the City. The written certification shall also
include a provision that in the event a Transfer is made in violation of the terms of this
Agreement or false or misleading statements aze made in any documents or certification
submitted to the City, the City shall have the right to foreclose on the Home or file an action at
law or in equity as may be appropriate. In any event, any costs, liabilities or obligations incurred
by the Owner and the Market Purchaser for the return of any moneys paid or received in
violation of this Agreement or for any costs and legal expenses, shall be borne by the Owner
and/or the Mazket Purchaser and they shall hold the City and its designee harmless and
reimburse their expenses, legal fees and costs for any action they reasonably take in good faith in
enforcing the terms of this Agreement.
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(4) A copy of the MAI or other qualified appraisal for the Home.
(5) Upon the close of the proposed sale, a copy of the final sales contract,
settlement statement, escrow instructions, and any other documents which the City may
reasonably request.
14. PAYMENT TO CITY OF EXCESS SALES PROCEEDS
If the Owner Transfers the Home at an unrestricted price pursuant to Section 13 above, or
if the Owner makes a Transfer in violation of this Agreement, the Owner shall pay the Excess
Sales Proceeds to the City. For purposes of this Agreement, "Excess Sales Proceeds" shall mean
ninety percent (90%) of the amount by which the Unrestricted Fair Market Value for the Home
exceeds the Maximum Allowable Sales Price for the Home (in the amount that was stated in the
First City Response Notice). This amount shall be a debt of the Owner to the City, secured by
the City Deed of Trust. The Owner acknowledges that the City shall have no obligation to cause
reconveyance of this Agreement or of the City Deed of Trust until the Excess Sales Proceeds are
paid to the City. The City shall utilize the Excess Sales Proceeds for City affordable housing
programs. The Owner and the City acknowledge that the formula for calculation of the amount
of Excess Sales Proceeds due from the Owner to the City is intended to cause the Owner to
receive the same net sales proceeds (following payment by Owner of a standard broker's
commission) from sale of the Home at an unrestricted price to an Market Purchaser as the Owner
would receive from sale of the Home to the City or to an Eligible Purchaser at the Maximum
Allowable Sales Price.
15. DEFAULTS
A. The following events shall constitute a Default by the Owner under this
Agreement:
(1) The City determines that the Owner has made a misrepresentation to
obtain the benefits of purchase of the Home or in connection with its obligations under this
Agreement;
(2) The Owner fails to owner occupy the home, as required pursuant to
Section 3 above, and such failure continues following written notice by the City and sixty (60)
days opportunity to cure following the date of such notice.
(3) The Owner makes a Transfer in violation of this Agreement;
(4) The Owner otherwise fails to comply with the requirements of this
Agreement and such violation is not corrected to the satisfaction of the City within ten (10) days
after the date of written notice by the City to the Owner of such violation; or
(5) A notice of default is issued under First or Second Mortgage Loan or other
financing secured by the Home.
(6) Alien is recorded against the Home other than the lien of a bone fide
mortgage loan.
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(7) Owner places a mortgage on the Home in violation of Section 24 below.
B. Upon a declaration of Default by the City under this Agreement, the City may
exercise any remedies at law or in equity, including without limitation, any or all of the
following
(1) Declare all Excess Sales Proceeds immediately due and payable without
further demand and invoke the power of sale under the City Deed of Trust;
(2) Apply to a court of competent jurisdiction for such relief at law or in
equity as may be appropriate;
(3) Declaee a Default under the City Deed of Trust and pursue all City
remedies under the City Deed of Trust; and
(4) Exercise the City Purchase Option Upon Default as described in Section
17 below.
16. NOTICE OF DEFAULT AND FORECLOSURE
A request for notice of default and any notice of sale under any deed of trust or mortgage
with power of sale encumbering the Home shall be recorded by the City in the Office of the
Recorder of the County of San Luis Obispo for the benefit of the City. The City may declaze a
Default under this Agreement upon receipt of any notice given to the City pursuant to Civil Code
Section 2924b, and may exercise its rights as provided in Sections 15 and 17.
In the event of default and foreclosure, the City shall have the same right as the Owner to
cure defaults and redeem the Home prior to the foreclosure sale. Nothing herein shall be
construed as creating any obligation of the City to cure any such default, nor shall this right to
cure and redeem operate to extend any time limitations in the default provisions of the
underlying deed of trust or mortgage.
If the City failed to file the request for notice of default, the City's right to purchase the
Home shall commence from the date a notice of default is given by the City to the Owner.
17. PURCHASE OPTION UPON DEFAULT
Notwithstanding, and in addition to, the remedies provided the City in Section 16, and the
City Option provided to the City in Section 12, the Owner hereby grants to the City the option to
purchase the Home following written notice by the City to the Owner of the declaration of a
Default by the City under this Agreement. This option to purchase is given in consideration of
the economic benefits received by the Owner resulting from ownership of the Home made
possible by the City's Affordable Housing Program.
The City shall have thirty (30) days after a Default is declared to notify the Owner and
the First Lender and Second Lender of its decision to exercise its option to purchase under this
Section 17. Not later than ninety (90) days after the notice is given by the City to the Owner of
the City's intent to exercise its option under this Section 17, the City shall purchase the Home for
the City Option Price, payable in cash or by assuming existing debt and paying the balance in
cash, calculated in the manner set forth in Section 12B.
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18. NONLIABILITY OF THE CITY
A. No Obligation to Exercise Option. The City shall have no obligation to exercise
any option granted it under this Agreement. In no event shall the City become in any way liable
or obligated to the Owner or any successor-in-interest to the Owner by reason of its option to
purchase under Sections 12 and 17 nor shall the City be in any way obligated or liable to the
Owner or any successor-in-interest to the Owner for any failure to exercise its option to
purchase.
B. Nonliabilitv for Negligence, Loss, or Damage. Owner acknowledges,
understands and agrees that the relationship between Owner and the City is solely that of an
owner and an administrator of a City affordable housing program, and that the City does not
undertake or assume any responsibility for or duty to Owner to select, review, inspect, supervise,
pass judgment on, or inform Owner of the quality, adequacy or suitability of the Home or any
other matter. The City owes no duty of care to protect Owner against negligent, faulty,
inadequate or defective building or construction or any condition of the Home and Owner agrees
that neither Owner, or Owner's heirs, successors or assigns shall ever claim, have or assert any
right or action against the City for any loss, damage or other matter arising out of or resulting
from any condition of the Home and will hold the City harmless from any liability, loss or
damage for these things.
C. Indemnity. Owner agrees to defend, indemnify, and hold the City harmless from
all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys fees
that the City may incur as a direct or indirect consequence of: (1) Owner's default, performance,
or failure to perform any obligations as and when required by this Agreement or the Deed of
Trust; or (2) the failure at any time of any of Owner's representations to the City to be true and
correct.
19. RESTRICTIONS ON FORECLOSURE PROCEEDS
If a creditor acquires title to the Home through a deed in lieu of foreclosure, a trustee's
deed upon sale, or otherwise, the Owner shall not be entitled to the proceeds of sale to the extent
that such proceeds otherwise payable to the Owner when added to the proceeds paid or credited
to the creditor exceed the Maximum Allowable Sales Price. The Owner shall instruct the holder
of such excess proceeds to pay such proceeds to the City in consideration of the benefits received
by the Owner through purchase of the Home under the City's Affordable Housing Ordinance.
20. RESTRICTION ON INSURANCE PROCEEDS
If the Home is damaged or destroyed and the Owner elects not to rebuild or repair the
Home, the Owner shall pay the City the portion of any insurance proceeds received by the
Owner for such destruction or damage which is in excess of the Maximum Allowable Sales Price
calculated pursuant to Section 10 above.
21. TERM OF AGREEMENT
All the provisions of this Agreement, including the benefits and burdens, run with the
Home and this Agreement shall bind, and the benefit hereof shall inure to, the Owner, his or her
heirs, legal representatives, executors, successors in interest and assigns, and to the City and its
successors, until the earlier of (i) thirty (30) years from the date of purchase of the Home by
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Owner, or (ii) the date of Transfer of the Home to the City or another purchaser in compliance
with this Agreement.
22. SUPERIORITY OF AGREEMENT
The Owner covenants that he or she has not, and will not, execute any other agreement
with provisions contradictory to or in opposition to the provisions hereof, and that, in any event,
this Agreement is controlling as to the rights and obligations between and among the Owner, the
City and their respective successors.
23. SUBORDINATION
Notwithstanding any provision herein, this Agreement shall not diminish or affect the
rights of the First and Second Lender under the First and Second Lender Deed of Trust or any
subsequent First and Second Lender deeds of trust hereafter recorded against the Home in
compliance with Section 24 of this Agreement.
Notwithstanding any other provision hereof, the provisions of this Agreement and the
City Deed of Trust shall be subordinate to the lien of the First and Second Lender Deed of Trust
and shall not impair the rights of the First and Second Lender, or such lender's assignee or
successor in interest, to exercise its remedies under the First and Second Lender Deed of Trust in
the event of default under the First or Second Lender Deed of Trust by the Owner. Such
remedies under the First and Second Lender Deed of Trust include the right of foreclosure or
acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance
of a deed in lieu of foreclosure, this Agreement and the City Deed of Trust shall be forever
terminated and shall have no further effect as to the Home or any transferee thereafter; provided,
however, if the holder of such First or Second Lender Deed of Trust acquires title to the Home
pursuant to a deed or assignment in lieu of foreclosure, this Agreement and the City Deed of
Trust shall automatically terminate upon such acquisition of title, only if (i) the City has been
given written notice of default under such First or Second Lender Deed of Trust with a sixty
(60)-day cure period and (ii) the City shall not have cured the default within such sixty (60)-day
period or commenced to cure and given its firm commitment to complete the cure in form and
substance acceptable to the First and Second Lender, or (iii) the City shall not have exercised its
option to purchase the Home pursuant to Section 17 above within such sixty (60)-day period and
then proceeded diligently to cure the default within sixty (60) days of acquiring title to the
Home.
24. REFINANCE OF FIRST OR SECOND MORTGAGE LOAN: FURTHER
ENCUMBRANCE OF HOME
A. The City agrees to promptly upon request execute and deliver any documents
reasonably requested to subordinate this Agreement and the City Deed of Trust to a deed of trust
securing a refinanced First Mortgage Loan and Second Mortgage Loan provided that, following
such refinance, the principal amount of all debt secured by the Home will not exceed the greater
of the outstanding principal balance of the refinanced First and Second Mortgage Loan or ninety-
five percent (95%) of the Indexed Value of the Home, determined in accordance with Section
l0A above.
B. The Owner covenants and agrees: (i) not to place any additional mortgage or
deeds of trust on the Property without obtaining prior written consent of the City; and (ii) that the
total principal amount of all debt secured by the Property shall not exceed ninety-five percent
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(95%) of the Indexed Value of the Home, determined in accordance with Section l0A above,
unless specifically approved in writing by the City. The City and the Owner agree that the
requirements of this Section 24B are necessary to ensure the continued affordability of the Home
to Owner and to minimize the risk of loss of the Home by Owner through default and foreclosure
of mortgage loans. Owner further aclmowledges that violation of the provisions of this Section
24B shall constitute a Default under this Agreement.
25. NONDISCRIMINATION
The Owner covenants by and for itself and its successors and assigns that there shall be
no discrimination against or segregation of a person or of a group of persons on account of race,
color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national
origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Home, nor shall the
Owner or any person claiming under or through the Owner establish or permit any such practice
or practices of discrimination or segregation with reference to the use, occupancy, or transfer of
the Home. The foregoing covenant shall run with the land.
26. RIGHTS OF BENEFICIARIES UNDER DEEDS OF TRUSTS
This Agreement shall not diminish or affect the rights of the City under the City Deed of
Trust.
Notwithstanding any other provision in this Agreement to the contrary, this Agreement
shall not diminish or affect the rights of the California Housing Finance Agency ("CHFA"),
United States Department of Housing and Urban Development ("HUD"), the Federal National
Mortgage Association ("FNMA"), or the Veterans Administration ("VA") under the First and
Second Mortgage Deed of Trust or any subsequent First or Second Lender deeds of trust
hereafter recorded against the Home in compliance with Section 24 above.
Notwithstanding any other provisions in this Agreement to the contrary, all of the
provisions of this Agreement shall terminate and have no further force and effect upon the
occurrence of one of the following events:
A. Title is acquired by CHFA, HUD, FNMA, VA, the First or Second Lender or
another party upon foreclosure of a deed of trust to the First or Second Lender or CHFA, or a
deed of trust insured by HUD or guaranteed by VA.
B. Title is acquired by another party by a deed in lieu of foreclosure of the First or
Second Lender, CHFA, or FNMA deed of trust.
27. HUD FORBEARANCE RELIEF
Notwithstanding other provisions of this Agreement, the City Option on Default pursuant
to Section 17 above shall not be exercised by the City when a deed of trust insured by HUD is
secured by the Home, and: (i) the owner is undergoing consideration by HUD for assignment
forbearance relief; or (ii) the owner is undergoing consideration for relief under HUD's
Temporary Mortgage Assistance Payment (TMAP) program.
28. INVALID PROVISIONS
If any one or more of the provisions contained in this Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall
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be deemed severable from the remaining provisions contained in this Agreement, and this
Agreement shall be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.
29. CONTROLLING LAW
The terms of this Agreement shall be interpreted under the laws of the State of California.
The venue for any legal action pertaining to this Agreement shall be San Luis Obispo County,
California.
30. NO WAVER
No delay or omission in the exercise of any right or remedy of City upon any default by
Owner shall impair such right or remedy or be construed as a waiver. The City's failure to insist
in any one or more instance upon the strict observance of the terms of this Agreement shall not
be considered a waiver of the City's right thereafter to enforce the provisions of the Agreement.
The City shall not waive its rights to enforce any provision of this Agreement unless it does so in
writing, signed by an authorized agent of the City.
31. NOTICES
All notices required herein shall be sent by certified mail, return receipt requested or
express delivery service with a delivery receipt and shall be deemed to be effective as of the date
received or the date delivery was refused as indicated on the return receipt as follows:
To the Owner: At the address of the Home.
To the City: City of Arroyo Grande
P. O. Box 550
Arroyo Grande, CA 93421
Attn: City Manager
The parties may subsequently change addresses by providing written notice of the change in
address to the other parties in accordance with this Section.
32. INTERPRETATION OF AGREEMENT
The terms of this Agreement shall be interpreted so as to avoid speculation on the Home
and to insure to the extent possible that its sales price and mortgage payments remain affordable
to persons and families of low- and/or moderate-income.
33. EXHIBITS
Any exhibits referred to in this Agreement aze incorporated by such reference.
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1N WITNESS WHEREOF, the parties have executed this Agreement on or as of the date
first written above.
CITY:
By:
OWNER(S):
CITY MANAGER
STATE OF CALIFORNIA )
ss
COUNTY OF SAN LUIS OBISPO )
On , 2005, before me, ,
personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/aze 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.
WITNESS my hand and official seal.
STATE OF CALIFORNIA )
ss
COUNTY OF SAN LUIS OBISPO )
On , 2005, before me, personally appeaeed
personally known to
me (or 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 byhis/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
A-16
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EXHIBIT A
Legal Description
Real property in the City of Arroyo Grande, County of San Luis Obispo, State of
California, described as follows:
Parcel A:
Parcel 1 of Parcel Map No. AG-87-35, in the City of Arroyo Grande, County of San Luis
Obispo, State of California, according to map recorded August 16, 1988 in Book 43,
Page 86 of Parcel Maps, in the office of the County Recorder of said county.
Parcel B:
A private drainage easement as granted and shown across Parcel 2 of Parcel Map AG-
87-35, in the City of Arroyo Grande, County of San Luis Obispo, State of California,
according to map recorded August 16, 1988 in Book 43, page 86 of Parcel Maps, in the
office of the County Recorder of said county.
APN and Address of subject condominium unit:
A-17
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Exhibit D
Form of Deed of Trust
(A copy of the proposed individual Deed of Trust follows this page)
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Complimentary Recording Requested
Pursuant To Government Code
Sections 6103 And 27383
When Recorded Mail To:
City of Arroyo Grande
P. O. Box 550
Arroyo Grande, CA 93421
Attn: City Clerk
DEED OF TRUST
AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT ("Deed of Trust") made this
day of , 2006, among the Trustor, ("Owner"), whose address is
and City of Arroyo Grande ("Trustee"), and the City of Arroyo Grande, a
municipal (the "City") as Beneficiary.
The Owner, in consideration of the promises herein recited and the trust herein created,
irrevocably grants, transfers, conveys and assigns to Trustee, in trust, with power of sale, the
property located in the City of Arroyo Grande, San Luis Obispo County, State of California,
described in the attached Exhibit A and more commonly known as Ocean Oaks Condominiums.
TOGETHER with all the improvements now or hereafter erected on the property,
and all easements, rights, appurtenances, and all fixtures now or hereafter attached to the
property, all of which, including replacements and additions thereto, shall be deemed to be and
remain a part of the property covered by this Deed of Trust; and
TOGETHER with all azticles of personal property or fixtures now or hereafter attached to
or used in and about the building or buildings now erected or hereafter to be erected on the
Property which are necessary to the complete and comfortable use and occupancy of such
building or buildings for the purposes for which they were or are to be erected, including all
other goods and chattels and personal property as aze ever used or famished in operating a
building, or the activities conducted therein, similar to the one herein described and referred to,
and all renewals or replacements thereof or articles in substitution therefore, whether or not the
same aze, or shall be attached to said building or buildings in any manner; and all of the
foregoing, together with the Property, is herein referred to as the "Security";
To have and to hold the Security together with acquittances to the Trustee, its successors
and assigns forever;
TO SECURE to the City the performance of the covenants and agreements of Owner
contained in that certain Buyer's Occupancy and Resale Agreement with Option to Purchase
executed by and between the Owner and the City of even date herewith (the "Resale
Agreement") and to secure the payment of Excess Sales Proceeds (as defined in the Resale
Agreement) that may become due by Owner to City.
L.
.s
TO SECURE the payment of all other sums, with interest thereon, advanced in
accordance herewith to protect the security of this Deed of Trust; and the performance of the
covenants and agreements of Owner herein contained.
OWNER AND CITY COVENANT AND AGREE AS FOLLOWS:
1. Owner's Estate. That Owner is lawfully seized of the estate hereby conveyed and has the
right to grant and convey the Security, that other than this Deed of Trust, the Security is
encumbered only by: (a) that deed of trust executed by Owner in connection with a loan made to
Owner by (the "First Lender"), and (second Lender"), securing
a promissory note executed by Owner in favor of the First Lender ("First Lender Note") and
Second Lender ("Second Lender Note"), to assist in the purchase of the Property and (b) the
Resale Agreement. Owner agrees to warrant and defend generally the title to the Security
against all claims and demands, subject to any declarations, easements or restrictions listed in a
schedule of exceptions to coverage in any title insurance policy insuring the City's interest in the
Security. (As used in this Deed of Trust, the term "First Lender" shall include all successors and
assigns of the First Lender and the term "Second Lender" shall include all successors and assigns
of the Second Lender).
2. Pavment of Excess Sales Proceeds. Owner will promptly pay to the City, when and if
due pursuant to the Resale Agreement, the Excess Sales Proceeds (as defined in the Resale
Agreement).
3. Resale Agreement. Owner will observe and perform all of the covenants and agreements
of the Resale Agreement.
4. Charges; Liens. Owner will pay all taxes, assessments and other charges, fines and
impositions attributable to the Security which may attain a priority over this Deed of Trust, by
Owner making any payment, when due, directly to the payee thereof. Upon request by the City,
Owner will promptly famish to the City all notices of amounts due under this paragraph. In the
event Owner makes payment directly, Owner will promptly discharge any lien which has priority
over this Deed of Trust; provided, that Owner will not be required to discharge the lien of the
Deed of Trust securing the First or Second Lender Note (the "First Lender Deed of Trust" or
"Second Lender Deed of Trust") or any other lien described in this paragraph so long as Owner
will agree in writing to the payment of the obligation secured by such lien in a manner
acceptable to the City, or will, in good faith, contest such lien by, or defend enforcement of such
lien in, legal proceedings which operate to prevent the enforcement of the lien or forfeiture of the
Security or any part thereof.
5. Hazard Insurance. Owner will keep the Security insured by a standard all risk property
insurance policy equal to the replacement value of the Security (adjusted every five (5) years by
appraisal, if requested by the City). If the Security is located in a flood plain, Owner shall also
flood insurance. The insurance carrier providing this insurance shall be licensed to do business
in the State of California and be chosen by Owner subject to approval by the City.
All insurance policies and renewals thereof will be in a form acceptable to the City and
will include a standard mortgagee clause with standard lender's endorsement in favor of the
holder of the First and Second Lender Note and the City as their interests may appear and in a
form acceptable to the City. The City shall have the right to hold, or cause its designated agent
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to hold, the policies and renewals thereof, and Owner shall promptly fiunish to the City, or its
designated agent, the original insurance policies or certificates of insurance, all renewal notices
and all receipts of paid premiums. In the event of loss, Owner will give prompt notice to the
insurance cazrier and the City or its designated agent. The City, or its designated agent, may
make proof of loss if not made promptly by Owner. The City shall receive thirty (30) days
advance notice of cancellation of any insurance policies required under this section.
Unless the City and Owner otherwise agree in writing, insurance proceeds, subject to the
rights of the First Lender, will be applied to restoration or repair of the Security daznaged,
provided such restoration or repair is economically feasible and the security of this Deed of Trust
is not thereby impaired. If such restoration or repair is not economically feasible or if the
security of this Deed of Trust would be impaired, the insurance proceeds will be used to repay
any amounts due under the Resale Agreement, with the excess, if any, paid to Owner. If the
Security is abandoned by Owner, or if Owner fails to respond to the City, or its designated agent,
within thirty (30) days from the date notice is mailed by either of them to Owner that the
insurance carrier offers to settle a claim for insurance benefits, the City, or its designated agent,
is authorized to collect and apply the insurance proceeds at the City's option either to restoration
or repair of the Security or to pay amounts due under the Resale Agreement.
If the Security is acquired by the City, all right, title and interest of Owner in and to any
insurance policy and in and to the proceeds thereof resulting from damage to the Security prior to
the sale or acquisition will pass to the City to the extent of the sums secured by this Deed of
Trust immediate prior to such sale or acquisition, subject to the rights ofthe First Lender.
6. Preservation and Maintenance of Security. Owner will keep the Security in good repair
and in a neat, clean, and orderly condition and will not commit waste or permit impairment or
deterioration of the Security. If there arises a condition in contravention of this Section 5, and if
the Owner has not cured such condition within thirty (30) days after receiving a City notice of
such a condition, then in addition to any other rights available to the City, the City shall have the
right (but not the obligation) to perform all acts necessary to cure such condition, and to establish
or enforce a lien or other encumbrance against the Security to recover its cost of curing.
7. Protection of the Citv's Security. If Owner fails to perform the covenants and agreements
contained in this Deed of Trust or if any action or proceeding is commenced which materially
affects the City's interest in the Security, including, but not limited to, default under the First
Lender Deed of Trust, eminent domain, insolvency, code enforcement, or azrangements or
proceedings involving a bankrupt or decedent, then the City, at the City's option, upon notice to
Owner, may make such appeazances, disburse such sums and take such action as it determines
necessazy to protect the City's interest, including but not limited to, disbursement of reasonable
attorney's fees and entry upon the Security to make repairs.
Any amounts disbursed by the City pursuant to this pazagraph, with interest thereon, will
become an indebtedness of Owner secured by this Deed of Trust. Unless Owner and City agree
to other terms of payment, such amount will be payable upon notice from the City to Owner
requesting payment thereof, and will beaz interest from the date of disbursement at the lesser of
(i) ten percent (10%); or (ii) the highest rate permissible under applicable law. Nothing
contained in this pazagraph will require the City to incur any expense or take any action
hereunder.
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8. Inspection. The City may make or cause to be made reasonable entries upon and
inspections of the Security; provided that the City will give Owner reasonable notice of
inspection.
9. Forbearance by the City Not a Waiver. Any forbeazance by the City in exercising any
right or remedy will not be a waiver of the exercise of any such right or remedy. The
procurement of insurance or the payment of taxes or other liens or charges by the City will not be
a waiver of the City's right to require payment of any amounts secured by this Deed of Trust.
10. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct and
cumulative to any other right or remedy under this Deed of Trust or any other document, or
afforded by law or equity, and maybe exercised concurrently, independently or successively.
11. Successors and Assigns Bound. The covenants and agreements herein contained shall
bind, and the rights hereunder shall inure to, the respective successors and assigns of the City and
Owner subject to the provisions of this Deed of Trust.
12. Joint and Several Liability. All covenants and agreements of Owner shall be joint and
several.
13. Notice. Except for any notice required under applicable law to be given in another
manner, (a) any notice to Owner provided for in this Deed of Trust will be given by certified
mail, addressed to Owner at the address shown in the first paragraph of this Deed of Trust or
such other address as Owner may designate by notice to the City as provided herein, and (b) any
notice to the City will be given by express delivery, return receipt requested, to the City of
Arroyo Grande at P. O. Box 50000, Arroyo Grande, California, 95007-5000, Attention: City
Manager, or to such other address as the City may designate by notice to Owner as provided
above. Notice shall be effective as of the date received by City as shown on the return receipt.
14. Govemin¢ Law. This Deed of Trust shall be governed by the laws of the State of
California.
15. Severability. In the event that any provision or clause of this Deed of Trust or the Resale
Agreement conflicts with applicable law, such conflict will not affect other provisions of this
Deed of Trust or the Resale Agreement which can be given effect without the conflicting
provision, and to this end the provisions of the Deed of Trust and the Resale Agreement are
declazed to be severable.
16. Captions. The captions and headings in this Deed of Trust aze for convenience only and
aze not to be used to interpret or define the provisions hereof.
17. Nondiscrimination. The Owner covenants by and for itself and its successors and assigns
that there shall be no discrimination against or segregation of a person or of a group of persons
on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status,
ancestry or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the
Property, nor shall the Owner or any person claiming under or through the Owner establish or
permit any such practice or practices of discrimination or segregation with reference to the use,
occupancy, or transfer of the Home. The foregoing covenant shall run with the land.
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18. Nonliabilitv for Negligence, Loss, or Damage. Owner acknowledges, understands and
agrees that the relationship between Owner and City is solely that of an owner and an
administrator of a City density bonus program, and that City neither undertakes nor assumes any
responsibility for or duty to Owner to select, review, inspect, supervise, pass judgment on, or
inform Owner of the quality, adequacy or suitability of the Security or any other matter. City
owes no duty of care to protect Owner against negligent, faulty, inadequate or defective building
or construction or any condition of the Security and Owner agrees that neither Owner, or
Owner's heirs, successors or assigns shall ever claim, have or assert any right or action against
City for any loss, damage or other matter arising out of or resulting from any condition of the
Security and will hold City harmless from any liability, loss or damage for these things.
19. Indemnity. Owner agrees to defend, indemnify, and hold City and Agency harmless from
all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys fees
that City and Agency may incur as a direct or indirect consequence of:
A. Owner's failure to perform any obligations as and when required by the Resale
Agreement and this Deed of Trust; or
B. the failure at any time of any of Owner's representations or warranties to be true
and correct.
20. Acceleration: Remedies. Upon Owner's breach of any covenant or agreement of Owner
in this Deed of Trust, including, but not limited to, the covenants to pay, when due, any sums
secured by this Deed of Trust, the City, prior to acceleration, will mail by express delivery,
return receipt requested notice to Owner specifying; (1) the breach; (2) the action required to
cure such breach; (3) a date, not less than thirty (30) days from the date the notice is received by
Owner as shown on the return receipt, by which such breach is to be cured; and (4) 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 Security. The notice will also inform Owner
of Owner's right to reinstate after acceleration and the right to bring a court action to assert the
nonexistence of default or any other defense of Owner to acceleration and sale. If the breach is
not cured on or before the date specified in the notice, the City, at the City's option, may:
(a) 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 pennitted by
California law. (b) either in person or by agent, with or without bringing any action or
proceeding, or by a receiver appointed by a court, and without regazd to the adequacy of its
security, enter upon the Security and take possession thereof (or any part thereof) and of any of
the Security, in its own name or in the name of Trustee, and do any acts which it deems
necessary or desirable to preserve the value or mazketability of the Property, or part thereof or
interest therein, increase the income therefrom or protect the security thereof. The entering upon
and taking possession of the Security shall not cure or waive any breach hereunder or invalidate
any act done in response to such breach and, notwithstanding the continuance in possession of
the Security, the City shall be entitled to exercise every right provided for in this Deed of Trust,
or by law upon occurrence of any uncured breach, including the right to exercise the power of
sale; (c) commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or
specifically enforce any of the covenants hereof; (d) deliver to Trustee a written declaration of
default and demand for sale, pursuant to the provisions for notice of sale found at California
Civil Code Sections 2924, et seq., as amended from time to time; or (e) exercise all other rights
and remedies provided herein, in the instruments by which the Owner acquires title to any
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Security, or in any other document or agreement now or hereafter evidencing, creating or
securing all or any portion of the obligations secured hereby, or provided by law.
The City shall be entitled to collect all reasonable costs and expenses incurred in pursuing
the remedies provided in this paragraph, including, but not limited to, reasonable attorney's fees.
21. Owner's Right to Reinstate. Notwithstanding the City's acceleration of the sums secured
by this Deed of Trust, Owner will have the right to have any proceedings begun by the City to
enforce this Deed of Trust discontinued at any time prior to five (5) days before sale of the
Security 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) Owner pays City all sums which would
be then due under this Deed of Trust and no acceleration under this Deed of Trust or the Resale
Agreement has occurred; (b) Owner cures all breaches of any other covenants or agreements of
Owner contained in the Resale Agreement or this Deed of Trust; (c) Owner pays all reasonable
expenses incurred by City and Trustee in enforcing the covenants and agreements of Owner
contained in the Resale Agreement or this Deed of Trust, and in enforcing the City's and
Trustee's remedies, including, but not limited to, reasonable attomey's fees; and (d) Owner takes
such action as City may reasonably require to assure that the lien of this Deed of Trust, City's
interest in the Security and Owner's obligation to pay the sums secured bythis Deed of Trust
shall continue unimpaired. Upon such payment and cure by Owner, this Deed of Trust and the
obligations secured hereby will remain in full force and effect as if no acceleration had occurred.
22. Due on Transfer of the Propertv. Upon a Transfer (as defined in the Resale Agreement)
of the Property or any interest in it, the City shall require immediate payment in full of all sums
secured by this Deed of Trust.
23. Reconveyance. Upon payment of all sums secured by this Deed of Trust, the City will
request Trustee to reconvey the Security and will surrender this Deed of Trust and the Resale
Agreement to Trustee. Trustee will reconvey the Security without warranty and without chazge
to the person or persons legally entitled thereto. Such person or persons will pay all costs of
recordation, if any.
24. Substitute Trustee. The City, at the City's option, may from time to time remove Trustee
and appoint a successor trustee to any Trustee appointed hereunder. The successor trustee will
succeed to all the title, power and duties conferred upon the Trustee herein and by applicable
law.
25. Stu eriority of First Lender Documents. Notwithstanding any provision herein, this Deed
of Trust shall not diminish or affect the rights of the First Lender under the First Lender Deed of
Trust or any subsequent First Lender deeds of trust hereafter recorded against the Security in
compliance with the requirements of Section 24 of the Resale Agreement. City agrees to
promptly upon request execute and deliver any documents reasonably requested to subordinate
this Deed of Trust to any subsequent First Lender Deed of Trust permitted by Section 24 of the
Resale Agreement.
Notwithstanding any other provision hereof, the provisions of this Deed of Trust shall be
subordinate to the lien of the First Lender Deed of Trust and shall not impair the rights of the
First Lender, or such lender's assignee or successor in interest, to exercise its remedies under the
First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by the
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Owner. Such remedies under the First Lender Deed of Trust include the right of foreclosure or
acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance
of a deed in lieu of foreclosure, this Deed of Trust shall be forever terminated and shall have no
further effect as to the Property or any transferee thereafter; provided, however, if the holder of
such First Lender Deed of Trust acquired title to the Property pursuant to a deed or assignment in
lieu of foreclosure, this Deed of Trust shall automatically terminate upon such acquisition of title
by First Lender, provided that (i) the City has been given written notice of default under such
First Lender Deed of Trust with a sixty (60)-day cure period and (ii) the City shall not have cured
or commenced to cure the default within such sixty (60)-day period or commenced to cure and
given its firm commitment to complete the cure in form and substance acceptable to the First
Lender; or (iii) the City shall not have exercised its option to purchase the Property pursuant to
Section 17 of the Resale Agreement and then proceeded diligently to cure the default within such
sixty (60)-day period.
26. Request for Notice. Owner requests that copies of the notice of default and notice of sale
be sent to Owner at the address set forth in Section 13 above.
IN WITNESS WHEREOF, Owner has executed this Deed Of Trust as of the date first
written above.
u
CITY:
By:
CITY MANAGER
STATE OF CALIFORNIA )
ss
COUNTY OF SAN LUIS OBISPO )
OWNER(S):
On , 2006, before me, ,
personally appeazed ,personally known
to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/aze 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 byhis/her/their signature(s) on the
instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
STATE OF CALIFORNIA )
ss
COUNTY OF SAN LUIS OBISPO )
On , 2006, before me, personally appeazed
personally known to me (or 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.
WITNESS my hand and official seal.
~D AF D~lli1JG1'3T'