Loading...
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. 882/024600 -0002 976094.02 a01/28/09 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: 882/024600-0002 976094.02 a01/28/09 -2- 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. 882/024600 -0002 976094.02 a01/28/09 -3- 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, 882/024600-0002 976094 02 a01/28/09 -4- 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; 882/024600 -0002 976094 02 a0128/09 -5- 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 882/024600 -0002 976094.02 a01/28/09 -6- 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 882/024600 -0002 976094 02 a01/28/09 -7- 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 882/024600 -0002 976094 02 a01/28/09 -8- 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. 882/024600 -0002 976094 02 a01/28/09 -9- 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 882/024600 -0002 976094.02 a01/28/09 - 10- 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 976094 02 a01/28/09 -1 1- 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. 882/024600 -0002 976094 02 a01/28/09 — 12- 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. 882/024600 -0002 976094 02 a01/28/09 -13- 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 882/024600 -0002 976094 02 a01/28/09 -21- • 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) 882/024600 -0002 976094.02 a0I/28/09 -24- 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-