HomeMy WebLinkAboutRegulatory Agreement and Declaration of Covenants and Restriction PCCORE C REGUESTF F ;Y
CUESTA TITLE COW-Al r' JULIE RODEWAsJ AB
/'31 g8 San Luis Obispo County— Clerk/Recorder 2/24/2009
Recorded at the request of 8:00 AM
Cuesta Title Company
<RECORDING REQUESTED BY AND> o o c a : 2009008663 Tales: 2 Pages: 26
WHEN RECORDED MAIL TO:
Arroyo 214 East Branch Street lopment Agency I IIII II 1111 1111111111 III
Others 0.00
Arroyo Grande, CA 93420 PAID $0.00
Attn: Executive Director
(Space Above This Line for Recorder's Office Use Only)
(Exempt from Recording Fee per Gov. Code § 27383)
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS ( "Agreement ") is made and entered into this 2^ day of rebr-c ,
2009 ( "Effective Date "), by and between ARROYO GRANDE REDEVELOPMENT AGENCY,
a public body, corporate and politic ( "Agency ") and HOUSING AUTHORITY OF THE CITY
OF SAN LUIS OBISPO, a public body, corporate and politic ( "Owner ").
RECITALS:
A. Owner is the owner of fee title to that certain real property more particularly
described in Exhibit "A ", attached hereto and incorporated herein by this reference (the
"Property ").
B. Owner acquired the Property from Agency pursuant to an Agreement for
Purchase and Sale and Escrow Instructions, entered into by and between Owner and Agency, on
or about January 22, 2009 (the "Purchase Agreement ").
C. Reference is also made to that certain Promissory Note executed by Owner as
"Borrower" in favor of the Agency as lender, dated F'Xts[Y 23 , 2009 ( "Agency
Note "). The Agency Note evidences a loan provided by Agency to Owner to assist Owner in
acquiring the Property. The Purchase Agreement and Agency Note are referred to herein
collectively as the "Agency Agreements." The Agency Agreements are incorporated herein as if
fully set forth.
D. Pursuant to the Agency Agreements, Owner has agreed to enter into a rental
agreement with a "Moderate Income Household" (as that term is defined in Section 1.3 below)
pursuant to which the Moderate Income Household will rent the Property from Owner.
E. Agency and Owner now desire to place restrictions upon the use and operation of
the Property, in order to ensure that the Property shall be operated continuously, for a period of
fifty -five (55) years from the Effective Date, as an affordable rental unit in accordance with the
terms hereof.
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AGREEMENT:
NOW, THEREFORE, the Owner and Agency declare, covenant and agree, by and for
themselves, their heirs, executors, administrators, successors and assigns, and all persons
claiming under or through them, commencing upon the Effective Date and continuing for a
period of fifty -five (55) years following the Effective Date, as follows:
1.0 DEFINITIONS.
1.1 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall
mean the amount of monthly rent, including a reasonable utility allowance, that does not exceed
the maximum allowable rent to be charged by Owner and paid by a Moderate Income Household
occupying the Property as determined pursuant to Health and Safety Code Section 50053(b), as
of the Effective Date, and the regulations promulgated pursuant to or incorporated therein,
including, without limitation, any applicable regulations promulgated pursuant to Health and
Safety Code Section 50093.
1.2 Executive Director. As used in this Agreement, the term "Executive Director"
shall mean the individual duly appointed to the position of Executive Director of Agency, or his
or her authorized designee. Whenever an administrative action is required by Agency to
implement the terms of this Agreement, the Executive Director, or his or her authorized
designee, shall have authority to act on behalf of Agency, except with respect to matters reserved
for Agency Board determination.
1.3 Moderate Income Household. As used in this Agreement, the term "Moderate
Income Household" shall have the meaning set forth in Health and Safety Code Section 50093,
or any successor statute.
2.0 RESIDENTIAL RENTAL PROPERTY.
2.1 Residential Use. Without the Agency's prior written consent, which consent may
be given or withheld in its sole and absolute discretion, the Property shall not at any time be
utilized on a transient basis or be used as a hotel, motel, dormitory, fraternity house, sorority
house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, nor shall the
Property be used for day care facilities or as a place of business except as may otherwise be
allowed by applicable law.
2.2 No Preference. The Property shall be available for rental in accordance with the
terms of this Agreement, and the Owner shall not give preference to any particular class or group
of Moderate Income Household in renting the Property, except as provided in Section 3.3 below.
2.3 Liability of Owner. Owner shall not incur any liability under this Agreement as a
result of fraud or intentional misrepresentation by a tenant.
3.0 OCCUPANCY OF PROPERTY BY MODERATE INCOME HOUSEHOLD.
Owner hereby represents, warrants, and covenants as follows:
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3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of
this Agreement, the Property shall be continuously occupied or held vacant and available for
occupancy by a Moderate Income Household.
3.2 Income Computation and Certification. Immediately prior to a Moderate Income
Household's occupancy of the Property, Owner shall obtain an Income Computation and
Certification Form in the form attached hereto and incorporated herein as Exhibit "B" from the
Moderate Income Household dated no more than 90 days prior to the date of initial occupancy in
the Property by such Moderate Income Household. In addition, Owner shall obtain such further
information as may be reasonably required in the future by the Agency for purposes of verifying
a tenant's status as a Moderate Income Household, provided the same is reasonably available to
Owner without unreasonable expense in connection with obtaining the same. Owner shall use
good faith efforts to verify that the income provided by an applicant is accurate by taking the
following steps as a part of the verification process: (i) obtain three (3) pay stubs for the most
recent pay periods; (ii) obtain a written verification of income and employment from the
applicant's current employer; (iii) obtain an income verification form from the Social Security
Administration, California Department of Social Services, and /or California Employment
Development Department if the applicant receives assistance from any of said agencies; (iv) if an
applicant is unemployed or did not file a tax return for the previous calendar year, obtain other
evidence and/or verification of such applicant's total income received during the calendar year
from any source, taxable or nontaxable, or such other information as is satisfactory to the
Agency. Owner shall maintain in its records each Income Computation and Certification Form
obtained pursuant to this section for a minimum of five (5) years.
3.3 Rental Priority. During the term of this Agreement, Owner shall use its
reasonable commercial efforts to lease the Property to a credit -worthy Moderate Income
Household in the following order of priority: (i) displaced persons entitled to a preference
pursuant to California Health and Safety Code Section 33411.3 or successor statute; and (ii)
other persons meeting the eligibility requirements of this Agreement. Should multiple tenants be
equally eligible (as to income, credit history, and other nondiscriminatory criteria) and qualified
to rent the Property, Owner shall rent the Property to a Moderate Income Household on a first -
come, first -served basis.
3.4 Recertification. Within sixty (60) days prior to the first anniversary date of the
occupancy of the Property by a Moderate Income Household, and on each anniversary date
thereafter, Owner shall recertify the income of such Moderate Income Household by obtaining a
completed Income Recertification Form, in the form attached hereto and incorporated herein as
Exhibit "C ", based upon the current income of each known occupant of the Property.
3.5 Determination of Affordable Rent. The Property shall be rented at an Affordable
Rent. Affordable Rent may change as changes in the applicable gross rent amounts, the income
adjustments, or the monthly allowance for utilities and services warrant. Any increase in rents is
subject to the provisions of the outstanding lease. Owner must provide the Moderate Income
Household occupying the Property not less than thirty (30) days prior written notice before
implementing any rent increase.
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3.6 Certification of Continuing Program Compliance. During the term of this
Agreement, on or before each April 1 following the Term Commencement Date, Owner shall
annually advise the Agency of the occupancy of the Property during the preceding calendar year
by delivering an annual Certification stating (i) the Property has been rented to and is occupied
by a Moderate Income Household and (ii) that to the knowledge of Owner either (a) no
unremedied default has occurred under this Agreement, or (b) a default has occurred, in which
event the certification shall describe the nature of the default and set forth the measures being
taken by the Owner to remedy such default.
3.7 Maintenance of Records. Owner shall maintain complete and accurate records
pertaining to the Property, and shall permit any duly authorized representative of the Agency,
upon twenty -four (24) hours prior notice and during business hours, to inspect the books and
records of Owner pertaining to the Property.
3.8 Reliance on Tenant Representations. Owner's lease agreement shall contain a
provision to the effect that Owner has relied on the income certification and supporting
information supplied by the tenant in determining qualification for occupancy of the Property,
and that any material misstatement in such certification (whether or not intentional) will be cause
for immediate termination of such lease. The lease shall also include the lease rider attached
hereto and incorporated herein as Exhibit "D" and shall state that occupation of the Property is
subject to the income restrictions described in this Agreement.
3.9 Remedy For Excessive Rent Charge.
3.9.1 It shall constitute a default for Owner to charge or accept for the
Property a rent amount in excess of the amount provided for in Section 3.5 of this Agreement.
3.9.2 Except as otherwise provided in this Agreement, it shall constitute a
default for Owner to knowingly (or without investigation as required herein) rent the Property to
a tenant who is not a Moderate Income Household.
3.9.3 It shall constitute a default for Owner to knowingly (or without
investigation as required herein) rent the Property in violation of the leasing preference
requirements of Section 3.3 of this Agreement.
3.9.4 Notwithstanding anything herein to the contrary, in the event Owner
violates Section 3.9.1 hereof, to the extent the tenant from whom Owner charged excess rent still
resides in the Property at the time Agency discovers this violation, or Owner knows the location
of such tenant, Owner shall refund the tenant the entire amount of excess rent charged to such
tenant, calculated with interest at the lesser of the maximum legal rate or ten percent (10 %).
Owner shall provide evidence to Agency that such payment has been made, within thirty (30)
days after Agency provides notice to Owner of the default hereunder.
4.0 MAINTENANCE.
4.1 Maintenance Obligation. Owner agrees to and shall maintain all interior and
exterior improvements, including landscaping, on the Property in a first class condition and
repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws,
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rules, ordinances, orders, and regulations of all federal, state, county, municipal, and other
governmental agencies and bodies having or claiming jurisdiction and all their respective
departments, bureaus, and officials. Maintenance requirements shall include that: (a) no
improperly maintained landscaping shall be visible from public rights -of -way, including (i) no
lawns with grasses in excess of six (6) inches in height, (ii) no trees, shrubbery, lawns, and other
plant life dying from lack of water or other necessary maintenance, (iii) no trees, hedges, or
shrubbery grown uncontrolled without proper pruning, (iv) no vegetation so overgrown as to be
likely to harbor rats or vermin, and (v) no dead, decayed, or diseased trees, weeds, and /or other
vegetation; (b) no yard areas shall be left unmaintained, including (i) no broken or discarded
furniture, appliances, or other household equipment stored in yard areas for periods exceeding
one (1) week, (ii) no packing boxes, lumber, trash, dirt, or other debris stored in yards for periods
exceeding one (1) week in areas visible from public property or neighboring properties, (iii) no
unscreened trash cans, bins, or containers stored for unreasonable periods in areas visible from
public property or neighboring properties, and (iv) no vehicles parked or stored in areas other
than approved parking areas; (c) no buildings may be left in an unmaintained condition,
including (i) no violations of state law, Uniform Codes, or City ordinances, (ii) no condition that
constitutes an unsightly appearance that detracts from the aesthetics or property value of the
subject property or constitutes a private or public nuisance, (iii) no broken windows or chipped,
cracked, or peeling paint, (iv) no conditions constituting hazards and/or inviting trespassers or
malicious mischief, and (v) no graffiti or accumulation of waste or debris. Owner shall make all
repairs and replacements necessary to keep the improvements in good condition and repair and
shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with
comparable approved materials.
5.0 MANAGEMENT.
5.1 Gross Mismanagement. In the event of "Gross Mismanagement" (as that term is
defined below) of the Property, Agency shall have the authority to require that such Gross
Mismanagement cease immediately, and further to require the immediate replacement of the
manager. Agency shall provide written notice to Owner of the event(s) of Gross
Mismanagement occurring and Owner shall have five (5) business days after receipt of such
notice to commence to cure, correct, or remedy the event(s) of Gross Mismanagement identified
in the Agency's notice and to notify the Agency's Executive Director of the steps taken to effect
such cure, correction, or remedy, and upon commencing such cure, correction, or remedy to
thereafter diligently prosecute such cure, correction, or remedy to completion. For purposes of
this Agreement the term "Gross Mismanagement" shall mean management of the Property in a
manner which materially violates the terms and /or intention of this Agreement to operate an
affordable rental housing complex of the highest standard, and shall include, but is not limited to,
the following:
5.1.1 Knowingly leasing the Property to an ineligible tenant or a tenant whose
income exceeds the prescribed levels;
5.1.2 Knowingly allowing the tenants to exceed permitted occupancy levels
without taking immediate steps to stop such overcrowding;
5.3.3 Knowingly allowing a tenant to sublease the Property;
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5.1.3 Failing to timely maintain the Property in the manner required by this
Agreement or failing to submit materially complete reports;
5.1.4 Failing to timely submit the reports as required by this Agreement; and
5.1.5 Fraud in connection with any document or representation relating to this
Agreement.
6.0 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS.
6.1 Compliance With Laws. Owner shall comply with (i) all ordinances, regulations
and standards of the City, Agency, County of San Luis Obispo, any regional governmental
entity, State of California, and federal government applicable to the Property; (ii) all rules and
regulations of any assessment district of the City with jurisdiction over the Property; and (iii) all
applicable labor standards of California law and federal law; and (iv) the requirements of
California law and federal law with respect to the employment of undocumented workers or
illegal aliens.
6.2 Definitions. For the purposes of this Agreement, unless the context otherwise
specifies or requires, the following terms shall have the meanings herein specified:
6.2.1 The term "Hazardous Materials" shall mean any substance, material, or
waste which is or becomes regulated by any local governmental authority, the County of San
Luis Obispo, the State of California, a regional governmental authority, or the United States
Government, including, but not limited to, any material or substance which is (i) defined as a
"hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under Section
25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety
Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous
substance" under Section 25316 of the California Health and Safety Code, Division 20, Chapter
6.8 (Carpenter- Presley - Tanner Hazardous Substance Account Act), (iii) defined as a "hazardous
material," "hazardous substance," or "hazardous waste" under Section 25501 of the California
Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response
Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of the
California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of
Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated biphenyls,
(viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to
Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix)
designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C.
§ 1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903) or (xi) defined as
"hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. § 9601 et seq.
6.2.3 Indemnity. Owner shall save, protect, defend, indemnify and hold
harmless Agency and the City and their respective officers, officials, members, employees,
agents, and representatives from and against any and all liabilities, suits, actions, claims,
demands, penalties, damages (including, without limitation, penalties, fines and monetary
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v +-
sanctions), losses, costs or expenses (including, without limitation, consultants' fees,
investigation and laboratory fees, reasonable attorneys' fees and remedial and response costs)
(the foregoing are hereinafter collectively referred to as "Liabilities ") which may now or in the
future be incurred or suffered by Agency or City or their respective officers, officials, members,
employees, agents, or representatives by reason of, resulting from, in connection with, or existing
in any manner whatsoever as a direct or indirect result of (i) Owner's placement on or under the
Property of any Hazardous Materials after the Effective Date, or (ii) the escape, seepage,
leakage, spillage, discharge, emission or release from the Property of any Hazardous Materials
after the Effective Date.
7.0 INSURANCE.
7.1 Duty to Procure Insurance. Owner, for the term of this Agreement, shall procure
and keep in full force and effect or cause to be procured and kept in full force and effect for the
mutual benefit of Owner and Agency, and shall provide Agency evidence reasonably acceptable
to Agency's Executive Director, insurance policies meeting the minimum requirements set forth
below:
7.1.1 Commercial General Liability insurance with respect to the Property and
the operations of or on behalf of Owner, in an amount not less than One Million Dollars
($1,000,000) per occurrence combined single limit including products, completed operations,
contractual, bodily injury, personal injury, death and property damage liability per occurrence,
subject to such increases in amount as Agency may reasonably require from time to time;
provided, that the percentage increase in coverage shall not be required to exceed the percentage
increase in the CPI. Unless otherwise approved in advance by the Agency Executive Director,
the insurance to be provided by Owner may provide for a deductible or self - insured retention of
not more than Fifty Thousand Dollars ($50,000), with such maximum amount to increase at the
same rate as the periodic increases in the minimum amount of total insurance coverage set forth
above.
7.1.2 With respect to the improvements and any fixtures and furnishings to be
owned by Owner on the Property, insurance against fire, extended coverage, vandalism, and
malicious mischief, and such other additional perils, hazards, and risks as now are or may be
included in the standard "all risk" form in general use in San Luis Obispo County, California,
with the standard form fire insurance coverage in an amount equal to full actual replacement cost
thereof, as the same may change from time to time. Agency shall be a loss payee under such
policy or policies and such insurance shall contain a replacement cost endorsement.
7.2 Policy Requirements. All policies of insurance required to be carried by Owner
shall meet the following requirements and contain the following endorsements, provisions, or
clauses (as applicable):
7.2.1 The policies shall be written by responsible and solvent insurance
companies licensed in the State of California and having policyholders' rating of A or better, in
the most recent addition of "Best's Key Rating Guide -- Property and Casualty." A copy of each
paid -up policy evidencing such insurance (appropriately authenticated by the insurer) or a
certificate of the insurer, certifying that such policy has been issued, providing the coverage
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required herein, and containing the provisions specified herein, shall be delivered to Agency on
or prior to the date of this Agreement, and thereafter, upon renewals, not less than thirty (30)
days prior to the expiration of coverage. Agency may, at any time, and from time to time,
inspect and/or copy any and all insurance policies required to be procured by Owner hereunder.
In no event shall the limits of any policy be considered as limiting the liability of Owner
hereunder.
7.2.2 The insurer shall not cancel or materially alter the coverage provided by
such policy in a manner adverse to the interest of the insured without first giving Agency a
minimum of thirty (30) days prior written notice by certified mail, return receipt requested; and
7.2.3 A waiver by the insurer of any right to subrogation against Agency and
City, and their respective officers, officials, members, employees, agents, and representatives,
which arises or might arise by reason of any payment under such policy or policies or by reason
of any act or omission of Agency or City or their respective officers, officials, members,
employees, agents, or representatives.
7.2.4 The Agency and the City and their respective officers, officials,
members, employees, agents, and representatives shall be named as additional insureds on the
Commercial General Liability policies.
7.2.5 Coverage provided by these policies shall be primary and non-
contributory to any insurance carried by the Agency or City or their respective officers, officials,
members, employees, agents, or representatives.
7.2.6 Failure to comply with reporting provisions shall not affect coverage
provided to Agency and its officers, officials, members, employees, agents, or representatives.
8.0 LIMITATION ON TRANSFERS.
8.1 Agency Approval of Transfer Required. Except as set forth below, Owner shall
not transfer or assign this Agreement or any of Owner's rights hereunder, or any interest in the
Property or in the improvements thereon, directly or indirectly, voluntarily or by operation of
law, without the prior written approval of Agency, which approval shall not be unreasonably
withheld, conditioned, or delayed, and any such purported transfer without such approval shall
be null and void.
8.2 Assignment and Assumption Agreement. In the absence of specific written
agreement by Agency, no attempted transfer of any of Owner's obligations hereunder shall be
effective unless and until Owner and the transferee or successor party execute and deliver to
Agency a binding assignment and assumption agreement in a form reasonably approved by
Agency's legal counsel.
9.0 EVENTS OF DEFAULT BY DEVELOPER.
Subject to extensions of time pursuant to the terms of Section 22, the occurrence of one
or more of any of the following events shall constitute an "Event of Default" by Owner
hereunder if Owner shall have not cured, corrected, or remedied such failure within, unless a
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shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty
(30) days following the service on Owner of a written notice from Agency specifying the failure
complained of, or if it is not practicable to cure or remedy such failure within such thirty (30)
day period (which impracticality shall not apply to monetary defaults), within such longer period
as shall be reasonable under the circumstances provided that Owner has commenced to cure
within the same thirty (30) day period and has diligently prosecuted such cure to completion:
(a) Owner is in default of the Agency Note and has not cured such default
within the cure period applicable to such default as set forth in the Agency Note; or
(b) Owner is in material default of any of the covenants, terms or provisions
of this Agreement; or
(c) Owner voluntarily files or has involuntarily filed against it any petition
under any bankruptcy or insolvency act or law and the same has not been dismissed
within sixty (60) days thereafter; or
(d) Owner is adjudicated a bankrupt; or
(e) Owner makes a general assignment for the benefit of creditors in violation
of the terms of this Agreement or any of the Agency Agreements.
10.0 REMEDIES OF AGENCY.
In the event Owner defaults in the performance or observance of any covenant,
agreement or obligation of Owner pursuant to this Agreement, and if such default remains
uncured for a period of thirty (30) days after written notice thereof shall have been given by
Agency (or such lesser period as may apply under Section 4.1), or, in the event said default
cannot be cured within said time period, Owner has failed to commence to cure such default
within the applicable time period and diligently prosecute said cure to completion, then Agency
may declare an "Event of Default" to have occurred hereunder, and, at its option, may take one
or more of the following steps:
(a) With respect to (i) the physical condition of the Property, or (ii) Owner's
Gross Mismanagement, enter the Property and correct or cause to be corrected said
default and charge the costs thereof (including costs incurred by Agency in enforcing this
provision) to the account of Owner, which charge shall be due and payable within thirty
(30) days after presentation by Agency of a statement of all or part of said costs, and if
such bill is not timely paid then to place a lien on the Property for said amount due plus
interest at the maximum legal rate;
(b) Correct or cause to be corrected said default and pay the costs thereof
(including costs incurred by Agency in enforcing this provision) from the proceeds of any
insurance;
(c) Exercise its right to maintain any and all actions or proceedings at law or
suits in equity to compel Owner to correct or cause to be corrected said default.
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Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are
cumulative, and the exercise by any party of one or more of its rights or remedies shall not
preclude the exercise by it, at the same or different times, of any other rights or remedies for the
same default or any other default by another party.
11.0 NONDISCRIMINATION.
11.1 Nondiscrimination. Subject to the tenancy /occupancy restrictions not prohibited
by State or federal law as embodied in this Agreement, which may modify the following
nondiscrimination clauses: there shall be no discrimination against or segregation of any person,
or group of persons on any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any
part thereof, nor shall Owner, or any person claiming under or through him or her, establish or
permit any such practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or
vendees of the Property, or any part thereof (except as permitted by this Agreement). The
foregoing Covenants shall run with the land.
11.2 Nondiscrimination Clauses in Agreements. Except with respect to the permitted
use restrictions set forth herein, Owner agrees for itself and any successor in interest that Owner
shall refrain from restricting the rental, sale, or lease of any portion of the Property, or contracts
relating to the Property, on the basis of race, color, creed, religion, sex, marital status, ancestry,
or national origin of any person. All such deeds, leases or contracts shall contain or be subject to
substantially the following nondiscrimination or nonsegregation clauses:
11.2.1 In deeds: "The grantee herein covenants by and for himself or herself,
his or her heirs, executors, administrators, and assigns, and all persons claiming under or through
them, that there shall be no discrimination against or segregation of, any person or group of
persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the
Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code,
in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein
conveyed, nor shall the grantee or any person claiming under or through him or her, establish or
permit any practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the
premises herein conveyed. The foregoing covenants shall run with the land."
11.2.2 In leases: "The lessee herein covenants by and for himself or herself, his
or her heirs, executors, administrators, and assigns, and all persons claiming under or through
him or her, and this lease is made and accepted upon and subject to the following conditions:
"That there shall be no discrimination against or segregation of any person or
group of persons, on account of any basis listed in subdivision (a) or (d) of
Section 12955 of the Government Code, as those bases are defined in Sections
12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section
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12955, and Section 12955.2 of the Government Code, in the leasing, subleasing,
transferring, use, occupancy, tenure, or enjoyment of the premises herein leased
nor shall the lessee himself or herself, or any person claiming under or through
him or her, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use, or occupancy,
of tenants, lessees, sublessees, subtenants, or vendees in the premises herein
leased."
11.2.3 In contracts pertaining to the realty: "There shall be no discrimination
against or segregation of, any person or group of persons on account of any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in
Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955,
and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use,
occupancy, tenure, or enjoyment of the premises which are the subject of this agreement, nor
shall the grantee or any person claiming under or through him or her, establish or permit any
practice or practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises
herein conveyed. The foregoing covenants shall run with the land."
12.0 COVENANTS TO RUN WITH THE LAND.
Owner hereby subjects the Property to the covenants, reservations, and restrictions set
forth in this Agreement. Agency and Owner hereby declare their express intent that all such
covenants, reservations, and restrictions shall be deemed covenants running with the land, and
shall pass to and be binding upon the Owner's successors in title to the Property; provided,
however, that on the termination of this Agreement said covenants, reservations and restrictions
shall automatically expire. All covenants established in this Agreement shall, without regard to
technical classification or designation, be binding for the benefit of the Agency, and such
covenants shall run in favor of the Agency for the entire term of this Agreement, without regard
to whether the Agency is or remains an owner of any land or interest therein to which such
covenants relate. Each and every contract, deed or other instrument hereafter executed covering
or conveying the Property or any portion thereof shall conclusively be held to have been
executed, delivered and accepted subject to such covenants, reservations, and restrictions,
regardless of whether such covenants, reservations, and restrictions are set forth in such contract,
deed or other instrument.
Agency and Owner hereby declare their understanding and intent that the burden of the
covenants set forth herein touch and concern the land in that Owner's legal interest in the
Property is rendered less valuable thereby. Agency and Owner further hereby declare their
understanding and intent that the benefit of such covenants touch and concern the land by
enhancing and increasing the enjoyment and use of the Property by Moderate Income
Households, the intended beneficiaries of such covenants, reservations, and restrictions, and by
furthering the public purposes for which the Agency was formed.
Owner, in exchange for the Agency entering into the Purchase Agreement, hereby agrees
to hold, sell, and convey the Property subject to the terms of this Agreement. Owner also grants
to the Agency the right and power to enforce the terms of this Agreement against the Owner and
882/024600 -0002
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all persons having any right, title or interest in the Property or any part thereof, their heirs,
successive owners and assigns.
The covenants set forth in this Agreement shall remain in effect for a period of fifty -five
(55) years, commencing on the Effective Date. Notwithstanding the foregoing, pursuant to the
Agency Agreements, Agency's principal purpose in selling the Property to Owner was for
Owner's ultimate sale of the Property to a Moderate Income Household at a sales price
determined to be affordable to such household pursuant to Health and Safety Code Section
50052.5(b)(4) (an "Affordable Sales Price "). As such, at such time as (i) the home mortgage
market improves, (ii) conventional home mortgages are available on reasonable terms, and (iii)
the Moderate Income Household renting the Property (the "MIH Purchaser ") is financially able
to obtain a conventional loan in an amount necessary to purchase the Property at an Affordable
Sales Price, Owner shall sell the Property to such MIH Purchaser at such Affordable Sales Price.
At the closing for such sale, Agency and Owner shall execute and record a document terminating
this Agreement, and the MIH Purchaser shall execute and record an affordable housing
agreement in a form acceptable to Agency's legal counsel that, for a term of forty -five (45)
years, among other things, requires the Property to be owner- occupied, and restricts the resale of
the Property to a Moderate Income Household at an Affordable Sales Price.
13.0 UTILITIES AND TAXES.
Owner, while in possession of the Property, and each successor or assign of Owner while
in possession of the Property, shall remain fully obligated for the payment of (i) real and
personal property taxes and assessments in connection with the Property, and (ii) all charges for
all utilities serving the Property for which Owner is responsible.
14.0 ATTORNEYS' FEES.
In the event that a party to this Agreement brings an action against the other party hereto
by reason of the breach of any condition, covenant, representation or warranty in this Agreement,
or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to
recover from the other expert witness fees, and its reasonable attorney's fees and costs.
Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to
attorney's fees shall be entitled to all other reasonable costs for investigating such action,
including the conducting of discovery.
15.0 AMENDMENTS.
The Agency's Executive Director shall have the authority to approve, on behalf of the
Agency, amendments to this Agreement that would not substantially alter the basic business
terms or substantially increase the risk to the Agency. All other amendments shall require the
action of the Agency Board. All amendments, including those authorized to be approved by the
Agency's Executive Director, shall be in writing and shall be signed by authorized
representatives of Agency and Owner.
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16.0 NOTICE.
Formal notices, demands, and communications between Agency and Owner shall be
sufficiently given if (i) personally delivered, (ii) delivered by a reputable same -day or overnight
courier services that provides a receipt showing date and time of delivery, (iii) delivered by
United States mail, registered or certified, postage prepaid, return receipt requested, or (iv)
delivered by facsimile transmission, provided the original of the faxed communication is
delivered within twenty -four (24) hours by one of methods described in clauses (i), (ii), or (iii) of
the foregoing. Delivery shall be made to the following addresses:
If to Agency: Arroyo Grande Redevelopment Agency
214 East Branch St
Arroyo Grande, CA 93420
Attn: Executive Director
Fax: (760) 777-7101
With a copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626
Attn: John R. Ramirez, Esq.
Fax: (714) 546-9035
If to Owner: Housing Authority of the City of San Luis Obispo
487 Leff Street
San Luis Obispo, CA 93401
Attn: Executive Director
Fax: ( OS) 3 -4 90Z
With a copy to: San Luis Obispo County Housing Trust Fund
4111 Broad Street, Suite A -4
San Luis Obispo, CA 93401
Attn: Executive Director
Fax: Aga 64.5 5
Notices that are personally delivered, delivered by messenger /courier, or by fax (provided there
is compliance with the terms of clause (iv) above) shall be deemed effective upon receipt.
Notices delivered by mail shall be deemed effective upon the earlier of actual receipt by the
addressee thereof or the expiration of forty -eight (48) hours after depositing in the United States
Postal System in the manner described in this Section. Such written notices, demands, and
communications may be sent in the same manner to such other addresses as a party may from
time to time designate by mail.
17.0 NONLIABILITY OF AGENCY OFFICIALS.
No officer, official, member, employee, agent, or representative of Agency shall be
personally liable to Owner, or any successor in interest, in the event of any default or breach by
Agency or for any amount which may become due to Owner or successor or on any obligations
under the terms of this Agreement or any of the Agency Agreements.
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18.0 SEVERABILITY / WAIVER /INTEGRATION /INTERPRETATION; ENTIRE
AGREEMENT.
18.1 Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not
in any way be affected or impaired thereby.
18.2 Waiver. All waivers of the provisions of this Agreement, unless specified
otherwise herein, must be in writing and signed by the appropriate authorities of Agency or
Owner, as applicable. No delay or omission by either party hereto in exercising any right or
power accruing upon the compliance or failure of performance by the other party hereto under
the provisions of this Agreement shall impair any such right or power or be construed to be a
waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions
or agreements hereof to be performed by the other party shall not invalidate this Agreement nor
shall it be construed as a waiver of any succeeding breach of the same or other covenants,
agreements, restrictions or conditions hereof.
18.3 Integration. This Agreement contains the entire Agreement between the parties
concerning the subject matter hereof and neither party relies on any warranty or representation
not contained in this Agreement.
18.4 Interpretation. The terms of this Agreement shall be construed in accordance with
the meaning of the language used and shall not be construed for or against either party by reason
of the authorship of this Agreement or any other rule of construction that might otherwise apply.
18.5 Entire Agreement. This Agreement integrates all of the terms and conditions
mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements
between the parties or their predecessors -in- interest with respect to all or any part of the subject
matter hereof.
19.0 ENFORCED DELAY; EXTENSIONS OF TIME.
Performance by a party hereunder shall not be deemed to be in default where delays or
defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires;
casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions;
freight embargoes; lack of transportation; governmental restrictions or priority litigation;
unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other
party; acts or the failure to act of a public or governmental agency or entity (except that acts or
the failure to act of Agency or City shall not excuse performance by Agency or City unless the
act or failure is caused by the acts or omissions of Owner); or any other causes beyond the
reasonable control or without the fault of the party claiming an extension of time to perform. In
the event of such a delay (herein "Enforced Delay "), the party delayed shall continue to exercise
reasonable diligence to minimize the period of the delay. An extension of time for any such
cause shall be limited to the period of the Enforced Delay, and shall commence to run from the
time of the commencement of the cause, provided notice by the party claiming such extension is
sent to the other party within fifteen (15) days after the sending party has knowledge, or should
882/024600 -0002
976094,02 a01128/09 —1
have obtained knowledge, of the commencement of the cause. Times of performance under this
Agreement may also be extended by mutual written agreement by Agency and Owner.
20.0 THIRD PARTY BENEFICIARY.
The City of Arroyo Grande is deemed a third party beneficiary of the terms and
covenants contained in this Agreement and has the right, but not the obligation, to enforce the
terms and covenants contained herein.
21.0 FUTURE ENFORCEMENT.
The parties hereby agree that should the Agency cease to exist as an entity at any time
during the term of this Agreement, the City of Arroyo Grande shall have the right to enforce all
of the terms and conditions herein, unless the Agency had previously specified another entity to
enforce this Agreement.
22.0 GOVERNING LAW.
This Agreement shall be governed by the internal laws of the State of California.
23.0 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which shall
constitute one original and all of which shall be one and the same instrument.
[end - signature page follows]
882/024600 -0002
976094.02 a01/28/09 -1
IN WITNESS WHEREOF, the Agency and Owner have executed this Regulatory
Agreement and Declaration of Covenants and Restrictions by duly authorized representatives on
the date first written hereinabove.
"AGENCY"
ARROYO GRANDE REDEVELOPMENT
AGENCY, a public body, corporate and politic
Date: f�% t !Mg y 2- , 2009 By: -
- I- eve✓t. actors
Its: /T, e, ,i 1 ,Ye Direr
ATTEST:
' ��J . _ '-4 4 J
Agency Sec etar,
APPROVED AS TO FORM:
RUTAN TUCKER, LLP
By: /11 /V G 4" 1-C- Qtr
�?
t
Agency Special Counsel
"OWNER"
HOUSING AUTHORITY OF THE CITY OF
SAN LUIS OBISPO, a public body, corporate
and politic
Date: - , 2009 By:
- - DiClUtcfc R Boog -er
Its: C-\'CA 2 -4 $ct J
ATTEST:
419 99 )?ti's
Housing Authority Secretary
A?" O »! T f FORM:
/
By: t
Housing Authority Counsel
882/024600 -0002
976094.02 a0128/09 -16-
State of California )
County of San Luis Obispo ) /
On F- 4,brt�ary 2 before me, i�e./.1- WE --
-rp os
Ouse name and title of the officer)
Notary Public, personally appeared $t Ja iJ PtH rt 5
who proved to me on the basis of satisfactory evidence to be the person(*) whose name(*) is /are
subscribed to the within instrument and acknowledged to me that he /shc /thoy executed the same
in his/her/their authorized capacity(ies), and that by his/lheir signature(*) 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.
, KEUY WERAOaE
_ ;., ` , '�4. Commission At 1549739
WITNESS my hand and official seal. Notary Public - Caltomla
- y % son Luis Obispo Canty
My Comm. ExpM« Fob 3,
Signature "' L I / / Uk14 (Seal)
State of California )
County of San Luis Obispo )
On FQ,in tA.�U la) X09 , before me, 1OZaJ3b1 J0 thri bb�11
JJ " (ins s ert name and title of the officer)
Notary Public, personally appeared 'Da d 'R . egva -r.
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)h;.
sus ribed to the within instrument and acknowledged to me tha a. y executed the same
in oat er/theirauthorized capacity(ies), and that b Ir a e#theii 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.
ROzMyN JO al
WITNESS my hand and official seal. _ .«,` con[n0f1 • 1634361
:..ct •. ,; Noy Public • Callan.,
ci ., Noires to. Angola cotxry
Qyy� G a / MyConnr.EgrirIAJan0,201
Signature �� �'I 0" // �w!/hO'�_`�/ (Seal)
882/024600 -0002
976094 02 a01/28/09 —1
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
The land situated in the City of Arroyo Grande, in the County of San Luis Obispo, State of
California, described as follows:
LOT 11 OF TRACT NO. 2505, IN THE CITY OF ARROYO GRANDE,
COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING
TO MAP RECORDED AUGUST 18, 2004 IN BOOK 24, PAGES 12, 13, 14, &
15 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY.
APN NO.: 077 - 121 -006
882/024600 -0002
976094 02 a01/28/09 -18-
EXHIBIT "B"
INCOME COMPUTATION AND CERTIFICATION FORM
[See following pages]
882/024600 -0002
976094 02 a0128 /09 -19-
ARROYO GRANDE REDEVELOPMENT AGENCY
214 East Branch Street, Arroyo Grande, CA 93420
INCOME COMPUTATION AND CERTIFICATION FORM
252 SOUTH COURTLAND STREET, ARROYO GRANDE, CA 93420
PART I. TENANT HOUSEHOLD INFORMATION
Date of Birth Soc. Sec. # Relationship
TOTAL NUMBER OF PERSONS IN HOUSEHOLD: (Please list information on other household members below)
Mailing Address: Telephone Numbers: Work ( )
Home( )
PART 11. GROSS HOUSEHOLD INCOME Complete the following, attach copies of required verification as specified
below. Attach a note explaining any significant changes in household income between the previous year and the current year.
INFORMATION IS REQUIRED FOR ALL MEMBERS OF THE HOUSEHOLD AGE 18 OR OLDER REGARDLESS OF
WHETHER THEY CONTRIBUTE TO THE COSTS OF THE HOUSEHOLD. If you are not required to file a tax return,
please indicate this in Part V by your signature.
ANN INCOME ANN INCOME
INCOME SOURCES for owner others in hshld VERIFICATIONS (needed for file)
A. Employment earnings Last tax return & last 3 pay stubs,
employer verification
B. Self- employment earnings Last 2 tax returns & current financial stmt
C. Social Security (OASDI) Annual award letter
D. Supplemental Security Income (SSI) Annual award letter
E. Public assistance (AFDC, general Current benefit statement
assistance, unemployment, etc.)
F. Pension (s) Annual award letter, year end stmt, W -2
G. Interest income Last 2 statements for all accounts
H. Investment income (stocks, bonds, Last 2 statements for all accounts
real estate, etc.)
I. Room rental Rental agreement, copies of checks, etc.
J. Other income (list type /source)
K. TOTAL INCOME (sum of A thru J) / 12 months = mo. income
882/024600 -0002
976094 02 a01/28/09 -20-
PART III. PROPERTY STATUS
Will this property be your primary residence?
Will someone other than the individuals listed above be occupying this property?
If yes - Name of occupants:
Telephone Number: Mailing Address:
My /our housing expenses are as follows:
1. Monthly tenant rent
2. Average monthly utilities
PART IV. TENANT CERTIFICATION
I /We understand that after the initial eligibility determination, completion of monitoring forms is required on an annual basis.
1 /We certify that I /we have disclosed all information pertaining to my /our application and that the information presented in
the foregoing Sections I through IV is true and accurate to the best of my (our) knowledge.
Tenant Date Tenant Date
For more information regarding this application, please contact management staff at (760)
FOR OFFICE USE ONLY
Information verified
Income category
Maximum allowable annual income ( % of median)
Applicant's annual income gross monthly max housing costs
Comments:
Management Staff Date
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•
EXHIBIT "C"
INCOME RECERTIFICATION FORM
[See following pages]
882/024600 -0002
976094 02 a01/28/09 -22-
ARROYO GRANDE REDEVELOPMENT AGENCY
214 East Branch Street, Arroyo Grande, CA 93420
INCOME RECERTIFICATION FORM
252 SOUTH COURTLAND STREET, ARROYO GRANDE CA 93420
PART I. GENERAL INFORMATION
1. Property Owner Name: Housing Authority of the City of San Luis Obispo
2. Renter Name:
PART II. UNIT INFORMATION
4. Number of Occupants
Names:
PART III. AFFIDAVIT OF RENTER
I, , and I, , as renters of a unit assisted
pursuant to the Arroyo Grande Redevelopment Agency's (the "Agency ")
Affordable Housing Program (the "Program "), do hereby represent and warrant that the
following computation includes all income (I /we) anticipate receiving for the 12 -month period
commencing on January 1, 20_ (including the renter(s) and all family members of the
renters):
(a) amount of wages, salaries, overtime pay, commissions, fees, tips and
bonuses, and payments in lieu of earnings, such as unemployment
and disability compensation, worker's compensation and severance
pay (before payroll deduction)
(b) net income from business or profession or rental of property (without
deduction for repayment of debts or expansion of business) _
(c) interest and dividends
(d) periodic receipts such as social security, annuities, pensions,
retirement funds, insurance policies, disability or death benefits,
alimony, child support, regular contributions or gifts from persons
not occupying unit
(e) public assistance allowance or grant plus excess of maximum
allowable for shelter or utilities over the actual allowance for such
purposes
(1) regular and special pay and allowances of a member of armed
services (whether or not living in the dwelling) who is head of the
family or spouse
Subtotal (a) through (1)
LESS: Portion of above items which are income of a family member who
is less than 18 years old or a full -time student ( )
TOTAL ELIGIBLE INCOME
882/024600 -0002
976094.02 a01/28/09 -23-
•
NOTE: The following items are not considered income: casual or sporadic gifts; amounts
specifically for or in reimbursement of medical expenses; lump sum payment such as
inheritances, insurance payments, capital gains and settlement for personal or property losses;
educational scholarships paid directly to the student or educational institution; government
benefits to a veteran for education; special pay to a serviceman head of family away from home
and under hostile fire; foster child care payments; value of coupon allotments for purpose of food
under Food Stamp Act of 1964 which is in excess of amount actually charged the eligible
household; relocation payments under Title II of Uniform Relocation Assistance and Real
Property Acquisition Policies Act of 1970; payments received pursuant to participation in the
following programs: VISTA, Service Learning Programs, and Special Volunteer Programs,
SCORE, ACE, Retired Senior Volunteer Program, Foster Grandparent Program, Older American
Community Services Program, and National Volunteer Program to Assist Small Business
Experience.
2. This affidavit is made with the knowledge that it will be relied upon by the landlord and
the Agency to determine maximum income for eligibility and (I /we) warrant that all
information set forth in this Part III is true, correct and complete and based upon
information (I /we) deem reliable and that the estimate contained in paragraph 1 is
reasonable and based upon such investigation as the undersigned deemed necessary.
3. (1 /We) will assist the landlord and the Agency in obtaining any information or documents
required to verify the statements made in this Part III and have attached hereto a copy of
our federal income tax return for the last year (20 ).
4. (I/We) acknowledge that (I /we) have been advised that the making of any
misrepresentation or misstatement in this affidavit will constitute a material breach of
(my /our) agreement with the landlord to rent the unit and will additionally enable the
Agency to initiate and pursue all applicable legal and equitable remedies with respect to
the unit and to me /us.
B. (My /Our) monthly housing expenses are limited to the following:
1. Base rent
2. Average Monthly Utilities
3. Other (explain)
(I /We) understand that completion of monitoring forms is required on an annual basis and agree
to notify the Arroyo Grande Redevelopment Agency in writing of any change in ownership or
rental of the unit. (I /We) do hereby swear under penalty of perjury that the foregoing statements
are true and correct.
Date
Renter(s)
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EXHIBIT "D"
LEASE RIDER
[See following page]
882/024600 -0002
976094.02 401/28/09 -25-
ARROYO GRANDE REDEVELOPMENT AGENCY
214 East Branch Street, Arroyo Grande, CA 93420
LEASE RIDER
(252 South Courtland Street, Arroyo Grande CA 93420)
RESIDENT:
(if there is more than one adult occupant, each person must sign the rider)
LEASE DATE:
The undersigned tenant(s) hereby certify and agree as follows:
1. Income Certification. The attached income certification is true, correct and complete. I /we
agree to provide a similar certification annually upon request during the term of my
occupancy.
2. Employer Verification. The landlord or property manager has my permission to verify
my /our income from any sources of income I /we receive.
3. False Statements. If the income certification and /or lease application submitted by me /us is
false, or if I /we fail to provide annual certifications, the landlord or property manager will
have the right to terminate my /our lease and recover possession of my /our Unit. 1 /we
understand that the landlord and property manager are relying on this income certification in
accepting me /us as a tenant, and the landlord or property manager will be seriously harmed if
my /our income does not qualify the Unit for the affordable housing program.
4. This rider shall be considered as part of my /our lease.
Date:
Tenant
Tenant
Tenant
Tenant
882/024600 -0002 END OF DOCI1f1AAENT
976094.02 a01/28/09 -26-