HomeMy WebLinkAboutAffordable Housing Agreement� .; _ � � �� ��
RECORDING REQUESTED BY:
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WHEN RECORDED MAIL TO:
City of Arroyo Grande �
Community Development Director
214 East Branch Street
P. O. Box 550
Arroyo Grande, CA 93421
JULIE RQDEWALD
San Luis Obispo County— CferklRecorder
Recorded at the request ot
Cuesta Title Company
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11h4/2002
8:00 AM
� o c#: 2�02U99222 � r��ss: ��ges: 6
Faes 22.00
Taxss 0.00
D�s►� 0.00
PAID $22.00
AFFORDABLE HOUSiNG AGREEMENT
THIS AGREEMENT is made and entered into this Ist day of October, 2002, by and
between the CITY OF ARROYO GRANDE (the "City") and MATTHEW G. NIE+►lJI�ER and
JOANNE A. MAURER (collectively referred to as the "Owner"), collectively refenBd to as "the
Parties."
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A. Owner is the owner of certain real property described as Parcel 2 of Parcel
Map AG 95-068 in the City of Arroyo Grande, County of San Luis Obispo,
State of Califomia, according to the Map filed Navember 6, 1996, in B�ook 52,
Page 25 of Parcel Maps (referred to as the "Subject Property"); and
B. There exists a dwelling unit on the Subject Property which the City of Arroyo
Grande requires to be designed as a low to moderate income hau� unit ��
pursuant to Arroyo Grande Planning Commission Resolution No. 95-1539;
and
C. Owner's predecessor in interest, Arloma Corporation, entered into a
Restriction Agreement dated October 11, 1996, recorded as Document
No. 1996-057177 on November 6, 19�96, which was modified by an Amended �
Restriction Agreement dated Octc�ber 30, 1997, recorded as Documef�t
No. 1997-068842 on Decernber 5, 1997; and
C. Owner desires to amend said Amended Restriction Agreement in its entirety
and replace it with this Affordable Housing Agreement to ass�re that the
Subject Property remains affordable to low or moderate income households
for a period of at least thirty(30) years.
NOW, THEREFORE, the parties acknowledge and agree as follows:
This document is being recorded by Cussta
Title Guaranty Co. as an ACCOMODATION
ONIY and has not been examined as to its
ex�cut�n� vandlty or �s effect upon the title.
Th��les nt Is being racondNd by rw�sy
litle ISA6MAQ�,O�N
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1.01. "Moderate income households" means persons and families whose inoome does not
exc�ed 120 percent of the County of San �uis Obispo �rea median inc�ne, adjusted
for family size pursuant to the City of Arroyo Grande Affordable Housing Standar+ds.
1.02. "Low income households° means persons and families whose income does not exc�ed
80 percent of the County of San Luis Obispo area median inoome, adjua�ecf for family
size pursuant to the City of Arroyo Grande affordable Housing Standards.
1.03 Persons and families meeting the definition under Sections 1.01 and 1.02 shall be
referred to as "eligible households."
1.04 The "Subject Property" shall mean the specific real property described in this
Agreement, intended to be sold to and occupied by eligible households.
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2.01. The Subject Property shali be used for owner-occupied housing purposes and be sold
to eligible low or moderate income households only, and the sales prit;es shall be
based on and oonsistent with then current City of Arroyo Grande AfFordable F�using
Standards.
2.02. The grant deed from Owner, or Owner's sucoessors in interest and all future grant
deeds for or transfers of interest in the Subject Property shall con�ain a►�riction
providing that for the period of time speafied in this Agreement, there �U be no sale,
lease, rental, or other transfer of the Subject Property except for #he s�e to and
occupation by eligible low or moderate income households. Any sale, lease, rental, or
other transfer of the Subject Property in violation of this covenant shall be void.
2.03. The Owner agrees to retain the Housing Authority of the City of San Luis Obispo
("Housing Authority"), or other qualifled entity acxeptable to the City, fa screening of
potential buyers to determine if they qualifjr as eligible households.
2.04. These affordability requirements shall be covenants running with the Sub�ct Property
as defined in Califomia Civil Code Section 1460. Pursuant to Civil Code Sectior� 14�fi8,
which govems such covenants, the provisions of this Agreement shall be binding upon
all parties having any right, title, or interest in any of the Subject Property described
herein, or any portion thereof and on their heirs, successors in interest and as�gns for
a period of 30 years from the date of this Agreement. The parties agree that �1 future
deeds or transfers of interest regarding the Subject Property shall show the restrictions
of this Agreement for as long as the Agreement is in effect.
2.05. When the Subject Property is sold to an eligible buyer, the buyer and City shall enter
into an agreement and promissory note secured by a recorded deed of trust. Said
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agreement and deed of trust shall establish the monetary difference between the
allowable purchase price and the appraised value as a loan payable to the City. Said
loan shall accxue interest, compounded annually, at an annual rate of six percent (6%)
oompounded annually, and the monthly payments of principal and interest shall be
waived by the City as long as the owner previously approved by the Housing Authority
as an eligible household, or subsequent buyers approved by the Housing Authority as
eligible households, continue to own and reside in the Subject Properly, sut�e�ct to the
City loan, as his or her principal residence.
2.06. If the Subject Property is sold, leased, or otherwise transferred to an entity oth� than
to an eligible household, in violation of this Agreement, the City's loan shall
immediately beoome due and payable from the pror.eeds of sale of the Subject
Property. "Proceeds of sale" shall mean the value of any and all oonsideration,
however denominated, received or to be received by the seller from tfie sale of the
Subject Property after the payment of the first deed of trust.
2.07. Upon resale, the City or the Housing Authority shall have the first right of refusal to
purchase the Subject Property at current appraised value. The consfcbra�on for the
City's right of first refusal shall consist of 1 peroent of the remaining City loan balance.
The balance of the City loan remaining after deducting this 1 perc�t of the loan
balance shall be credited toward #�e purchase price if the City choo�es to ex�rase the
purchase option. The provisions of this section shaH not impair the right� of a first
mortgage lender secured by a reoorded deed of trust. The purchase money I�nnder
shall have a higher priority than the City's loan. The City's security shaN be priori�zed
as a second mortgage. This first priority applies to the purchase money lenders
assignee or sucxessor in interest, to:
(i) Foreclose on the Subject Property pursuant to the remedies pem�itted by law
and written in a recorded oontract or deed of trust; or
(ii) Accept a deed of trust or assignment to the extent of the value of the unpaid
first mortgage to the current market value in lieu of foreclosure in the event of
default by a trustor; or
(iii) Sell the Subject Property to any person at a fair market value price subsequent
to exerasing its rights under the deed of tnrst. Any value in exc� of the
unpaid mortgage and costs of sale administration shall be used to satisfy the
City loan. In no case may a first mortgage lender, exerasing for�osure
assignment in-lieu of foredosure or sale, obtain value or rights to vatue greater
than the value of the outstanding indebtedness on the first mortgage at the time
of the debt dearing action.
In addition, the following types of transfers shall remain subject to the requirements of
the City's loan and right of first refusal: transfer by gift, devise, or inheri�anoe to the
owner's spouse; transfer to a surviving joint tenant; transfer to a spouse as part of
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divorce or dissolution proceedings; or aoquisition in conjunction with a marriage.
�TICLE 3_ [:FN�Rei
3.01. Notices required to be sent to the City hereunder shall be sent by certifled mail, retum
receipt requested, to the following address:
City Manager
City of Arroyo Grande
214 East Branch Street
P. O. Box 550
Arroyo Grande, CA 93421
3.02. The Owner hereby specifically adcnowledges and agrees to be bound by the
oovenants respecting affordability on the Subject Property contained herein.
3.03 This Agreement f�s intended to and shall replace the Amended Resfiction Agreement
in its entirety.
IN WITNESS WHEREOF, this Agreement has been duly executed by the undersigned
as of the date set forth below.
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M HEW G. MAURE
�G� �'(�,. ° l�� ��ll
J ANNE A. MAURER
CITY:
T N ADAMS, City Manager
APPROVED AS TO FORM AND LEGAL EFFECT:
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DATE
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DATE
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TIMOT J. CA , ity A -
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JULIE RODEWALD
San Luis'Obispo County—ClerklRecorder
R�icor.�rw�- l��Q� c:s rED �3"
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City of Arroyo Crrande
Community Development Director
214 East Branch Street
$30,000
P.O. Box 550
Arroyo Grande, CA 93421
Date: October 1, 2002
At: Arroyo Grande, California
FOR VALUE RECEIVED, JOSHLTA BLAIlt and JAYDYN BLAIlt (collectively "Maker")
promise to pay to the order of the CITY OF ARROYO GRANDE ("City'� or order at 214 East
Branch Street, Arroyo Crrande, Califomia 93420 or such other place as City may from time to
time designate in writing, the principal sum of Thirty Thousand Dollars ($30,000), according to
the terms set forth herein with simple interest at the rate of six percent (6%) per annum,
compounded annually, on the unpaid principal balance from the date of this Promissory Note
(`Note') until paid, unless waived or forgiven, as set forth below.
1. Security for Note. This Note is secured by a deed of trust of even date herewith (the
"Deed of Trust") executed by Maker, as Trustor, and naming City as Beneficiary, covering
certain real property ("the Property") owned by Maker in the County of San Luis Obispo, State
of California, which Property is described in Exhibit A, attached hereto.
2. Incoraoration of Affordable Housing Agreemen� This Note and the Deed of Trust are
executed and delivered pursuant to that certain "Affordable Housing AgreemenY' ("Housing
Agreement") recorded in the County of San Luis Obispo�qt� con�„rrantl�h between
City and MATTHEW G. MAURER and JOANNE A. MALJRER regarding affordable housing
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3. Ci ,'ty s Right of First Refusal. Upon resale, the City or the Housing Authority of the City
of San Luis Obispo sha11 have the first right of refusal to purchase the Property at then current
appraised value. The consideration for the City's right of first refusal shall consist of one percent
(1%) of the remaining City loan balance. The balance of the City loan remaining after deducting
this one percent (1%) of the loan balance shall be credited towazd the purchase price if the City
chooses to exercise the purchase option. The provisions of this section shall not impair the rights
of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall
Recorded at ihe request ot
Cuesta Title Compan
�o
11I1412002
8:00 AM
oo�# 2�02099223
Titles: 1 Pages: 5
Fees 19.00
Taxes 0.00
Othsrs 0.00
PAID $19.00
AGREEMENT AND PRONIISSORY
NOTE SECURED BY DEED OF TRUST
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3. City's Right of First Refusal. Upon resale, the City or the Housing Authority of the City
of San Luis Obispo sha11 have the first right of refusal to purchase the Property at then current
appraised value. The consideration for the City's right of first refusal shall consist of one percent
(1%) of the remaining City loan balance. The balance of the City loan remaining after deducting
this one percent (1%) of the loan balance sha11 be credited toward the purchase price if the City
chooses to exercise the purchase option. The provisions of this section shall not impair the rights
of a first mortgage lender secured by a recorded deed of trust. The purchase money lender shall
have a higher priority than the City's loan. The City's security shall be prioritized as a second
mortgage. This first priority applies to the purchase money lender's assignee or successor in
interest, to:
a. Foreclose on the Property pursuant to the remedies permitted by law and written in a
recorded contract or deed of trust; or
b. Accept a deed of trust or assignment to the extent of the value of the unpaid first
mortgage to the current market value in lieu of foreclosure in the event of default by a
trustor; or
c. Sell the Property to any person at a fair market value price subsequent to exercising its
rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of
sale administration sha11 be used to satisfy the City loan. In no case may a first
mortgage lender, exercising foreclosure assignment in-lieu of foreclosure or sale, obtain
value or rights to value greater than the value of the outstanding indebtedness on the
first mortgage at the time of the debt clearing action.
The following types of transfers shall remain subject to the requirements of the City's loan and
right of first refusal: transfer by gift, devise, or inheritance to the owne�'s spouse; transfer to a
surviving joint tenant; transfer to a spouse as part of divorce or dissolution proceedings; or
acquisition in conjunction with a marriage.
4: Due on Transfer. In the event Maker sells, leases, rents or otherwise transfers the
Property to any person or entity other than an"eligible household" (as such term is defined in the
Housing Agreement), then the Principal of and accrued interest on the Loan sha11 be immediately
due and payable to the City as set forth in the Deed of Trust in favor of City recorded
simultaneously herewith as a second deed of trust subordinate to the deed of trust of the first
mortgage lender on the Property.
5. Waiver of Principal and Interest City waives timely payment of the Principal of and
interest on the Loan for such time as Maker, or subsequent buyer determined by City or the
Housing Authority to be an eligible household, remains as the owner and occupant of the
Property as Maker's principal residence until October 1, 2032.
6. Forgiveness of Loan. City will forgive the repayment of the outstanding Principal of the
Loan and a11 interest thereon as long as Maker, or subsequent buyer deternuned by City or the
Housing Authority to be an eligible household, remains as the owner and occupant of the
Property as Maker's principal residence until October 1, 2032.
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7. Prepayment. This Note may be prepaid in whole or in part.
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8. Paymen� The amount due under this Note sha.11 be paid without the necessity for notice or
demand by City.
9. Payment Amount. The amount due under this Note shall be paid from the net proceeds as
a result of any transfer. Net proceeds is the sales price minus any loans or liens that aze senior to
this Note and minus closing costs.
The City shall forgive the principal and interest due under this Note at the time of a transfer,
prepayment, or repayment of this Note to the extent nece�sary to ensure that the Borrower's
obligations to repay the principal and interest due on this Note and on all promissory notes
secured by deeds of trust superior to the Deed of Trust, plus the amount of the Borrower's
downpayment, do not exceed the Fair Mazket Value of the Residence.
10. Default Defined. In addition to other defaults referred to in this Note and the Deed of
Trust, it shall be a default under this Note if Maker fails to make any payment or perform any
obligation under or in connection with (a) this Note, (b) the Deed of Trust, o�r (c) any other note,
trust deed or other obligation of Maker relating to the Property, including but not limited to the
Housing Agreement, or secured by all or any pazt of the Property, whether junior or senior to this
Note, and if such failure is not cured within such time as may be pernutted by the obligation or
the obligee.
11. Options of CitY upon Default Upon the occurrence of a default, City shall have the
option, without further notice or demand:
a. To declaze the Note to be immediately due and payable;
b. If the default relates to a transfer of the Property, to bring an action at law or in equity
to require Maker and the proposed transferee to terminate and/or rescind the sales
contract or lease andlor to declare the transfer void, notwithstanding that the transfer
may have closed and become final as between Maker and the transferee; or
c. To pursue any other remedy available under this Note or the Deed of ?'rust, or at law or
in equity or under any other agreement, instrument or document entered into by Maker
and City, including but not limited to the Housing Agreement.
12. Failure to Egercise Options. Failure to exeroise any such option upon the occurrence of
one or more events of default shall not constitute a waiver of City's right to exercise any such
option at a later time.
13. Costs of Enforcement and Collection. If Maker defaults under this Note, Maker shall pay
all costs of enforcement and collection, including, but not limited to, costs and attorney's fees,
including reasonable attomey's fees, whether or not such enforcement or collection includes
filing a lawsuit or prosecution of a lawsuit, if filed.
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14. City's Right to Transfer Interest in Note. City and any subsequent holder of this Note
may at any time, without consent of Maker, sell, assign, pledge, hypothecate, transfer and
negotiate or grant participation in any part of or any interest in City's rights and benefits under
this Note to another governmental body or nonprofit organization which is eligible to receive
such transfer under state and federal law.
15. Waiver of Notice and Statute of Limitations. Except for any notice expressly required
by this Note, Maker waives demand, notice of demand, presenta.tion for payment, notice of non-
payment or dishonor, protest and notice of pmtest. To the fullest extent pernutted by law, Maker
waives the defense of the statute of limitations in any action on this Note or to recover on the
security for this Note.
16. Liabili . City's acceptance of any payment under this Note which is less than payment in
full of all amounts then due and payable, or the granting of any extension of time for payment of
any amount due under this Note or for the performance of any covenant, condition or agreement
entered into by Maker and City, or City's grant of any other indulgence to Maker, or City's taking
or release of other or additional security for the indebtedness evidenced hereby, or any other
modification or amendment of this Note shall in no way release or discharge the liability of
Maker or any endorser, guarantor or other person secondarily liable for this Note.
17. Governing Law. This Note sha11 be governed by the laws of the State of California. Maker
agrees that the site of any hearing or action of whatever nature or kind regarding this Note sha11
be conducted in the County of San Luis Obispo, State of California.
18. Severabilitv. If any provision of this Note or any application of such provision be declared
by a court to be invalid or unenforceable, such invalidity or unenforceability shall not affect any
other application of such provision or the balance of the provisions hereof, which shall, to the
fullest extent possible, remain in full force and effect. �
CITY:
te en Adams, City Manager
APPROVED AS TO FORM AND LEGAL
EFFECT:
T' thy J. C , ity
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EXHIBIT "A"
DESCRIPTION OF REAL PROPERTY
Pazce12 of Parcel Map AG 95-068 in the City of Arroyo Grande, County of San
Luis Obispo, State of California, according to the Map filed November 6, 1996, in
Book 52, Page 25 of Parcel Maps.
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END OF DOCUMEN�,
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REQUESTED BY AND Cd�ST'l9' t f TI,LZ
WHEN RECORDED RETURN TO: � d ao�3 - �C
City of Arroyo Grande
214 East Branch Street
P. O. Box 550
Arroyo Grande, CA 93421
Attn: City Manager
Recorded for the Benefit of the
City of Arroyo Crrande at No Fee Under
Section 6103 of the Government Code
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JULIE RODEWALD
San Luis Obispo Counly-Clerk/Recorder
Recorded at the request of
Cuesta Title Company
uoc#: 20�2099224
The undersigned declare that there is no documentary
transfer tax on this matter.
�o
11/14/2002
8:00 AM
�ge8: 19
0.00
0.00
0.00
$0.00
Titles: 5
Feos
Taxes
Oth�rs
PAID
PURCHASE MONEY DEED OF TRUST, DEED OF TRUST COVENANTS,
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING
THIS PURCHASE MONEY DEED OF TRUST, DEED OF TRUST COVENANTS, AS$IGN-
MENT OF RENTS, SECURITY AGREEMENT AND FIXTLTRE FILING (this "Deed of Trust")
is made as of this 1 day of October, 2002, by JOSHUA BLAIR and JAYDYN BLAIR, the
owners of the real property described hereinbelow, whose address is: 266 Aspen Street, Arroyo
Grande, Califomia 93420 (collectively "Trustor" to) Steve Adams, City Manager ("Trustee") in
favor of the CITY OF ARROYO GRANDE, a municipal corporation, whose address is 214 East
Branch Street, Arroyo Grande, California ("Beneficiary").
WHEREAS, on October 1, 2002, Beneficiary and MATTHEW G. MAURER and JOANNE A.
MAURER entered into an Affordable Housing Agreement ("Housing Agreement'�; and
WHEREAS, to implement said Affordable Housing Agreement, Beneficiary and Trustor entered
into that certain Agreement and Promissory Note ("Note") dated October 1, 2002, pursuant to
which Trustor agreed to certain restrictions on the sale or transfer of that certain real property
located in the County of San Luis Obispo, State of Califomia, which is further described in
Exhibit "A" (the "Real Property" or "Property") attached hereto; and
WHEREAS, Beneficiary and Trustor desire to ensure that the Real Property remain affordable to
low or moderate-income persons for a period of not less than 30 years, pursuant to the Housing
Agreement.
Thk; document is being recorded by Cuesta
Title Guaranty Co. as an ACCOMODATION
ONLY and has not besn examined as to its
axecution, validity or its effect upon the titls.
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NOW, THEREFORE, THIS DEED OF TRUST WITNESSETH:
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Trustor, in consideration of the indebtedness referred to below and the trust herein created,
irrevocably grants, conveys, transfers and assigns to Trustee, and its successors and assigns, in
trust, with power of sale and right of entry and possession, all of Trustor's estate, right, title and
interest in, to and under the Real Property;
TOGETHER WITH all structures and improvements now existing or hereafter erected on the
Real Property, a11 easements, rights and appurtenances thereto or used in connection therewith,
all rents, royalties, issues, profits, revenues, income and other benefits thereof or arising from the
use or enjoyment of a11 or any portion thereof (subject, however, to the right, power and authority
given herein to Trustor to collect and apply such rents, royalties, issues, profits, revenues, income
and other benefits prior to an Event of Default hereunder), all interests in and rights, royalties and
profits in connection with all minerals, oil and gas and other hydrocarbon substances thereon or
therein, development rights or credits, air rights, water, water rights (whether riparian,
appropriative or otherwise and whether or not appurtenant) and water stock, all intangible
properiy and rights relating to the Real Property or the opera.tion thereof or used in connection
therewith, including, without limitation, trade names and trademazks and all fumiture and
fixtures, now or hereafter located in, or on, or attached or affixed to, or used or intended to be
used in connection with, the Real Property, including, but without limitation, a11 heating,
lighting, laundry, incinerating, gas, electric and power equipment, pipes, plumbing, fire
prevention and fire extinguishing, refrigerating, ventilating and communication appara.tus, air
cooling and air conditioning apparatus, shades, awnings, blinds, curtains, drapes, attached floor
coverings, including rugs and carpeting and other installed appliances, attached cabinets, trees,
plants and other items of landscaping, shall, to the fullest extent permitted by law and for the
purposes of this Deed of Trust, be deemed to be part and paTCel of, and appropriated to the use
of, the Rea1 Property and, whether or not affixed or annexed thereto, be deemed conclusively to
be real property and conveyed by this Deed of Trust, and Trustor agrees to execute and deliver,
from time to time, such further instruments and. documents as may be required by Beneficiary to
confirm the lien of this Deed of Trust on any of the foregoing;
TOGETI-�R WITH all of the estate, interest, right, title, other claim or demand which Trustor
now has or may hereafter acquire in any and a11 awazds made for the taking by eminent domain,
or by any proceeding or purchase in lieu thereof, of the whole or any part of the Property (as
hereinafter defined), including, without limitation, any awazds resulting from a change of grade
of streets and awards for severance damages;
TOGETHER WITH all of the estate, interest, right, title and other claim or demand which
Trustor now has or may hereafter acquire with respect to the unearned premiums accrued,
accruing or to accrue and the proceeds of insurance in effect with respect to a11 or any part of the
foregoing. All of the foregoing properiy referred to in this Deed of Trust, together with the Real
Property, is herein referred to as the "Property."
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ARTICLE 1. PURPOSE AND CONSIDERATION
This trust deed is established for the purpose of securing, in such order of priority as Beneficiary
may elect:
(a) The repayment of the indebtedness evidenced by Trustor's Agreement and
Promissory Note (the "Note") of even date herewith payable to the order of
Beneficiary, in the principal sum of Thiriy Thousand and 00/100 Dollars
($30,000.00) ("Principal"), and any and all late charges, costs or fees required
thereunder and all extensions, renewals, modifications, amendments and
replacements thereof. The amount of the Note is the monetary difference between
said property's sales price, as allowed by the City's Affordable Housing Standards
and its mazket value, as deternuned by City's Community Development Director
based on sales information for comparable market rate units provided by Trustee.
(b) The payment of all other sums which may be advanced by or otherwise be due to
Trustee or Beneficiary under any provision of this Deed of Trust with interest (if
any) thereon at the rate provided herein or therein.
(c) Performance of all covenants of Trustor made in this Deed of Trust.
(d) Performance of all obligations and conditions of the Housing Agreement.
ARTICLE 2. DEED COVENANTS
To protect the security of this Deed of Trust, Trustor and Trustee hereby covenant and agree as
follows:
SECTION 2 .01. Restrictions on Use and Occupancy. The Real Property shall be used solely
for owner-occupied housing and occupied solely by low or moderate income households, as
defined in the Housing Agreement.
SECTION 2 .02. Restrictions on Sale. The Real Property shall be sold or otherwise transferred
only to eligible households, as defined herein, or to the City, the Housing Authority of the City
of San Luis Obispo ("Housing Authority"), or to a non-profit housing agency designated by City.
Sales prices shall be based on and consistent with the Affordable Housing Standards published
by the City's Community Development Department.
SECTION 2 .03. Term of Use, Occupancy and Sale Restrictions. Trustor agrees that the above
restrictions to the use, occupancy and sale of the Rea1 Properiy shall remain in effect for a period
of not less than thirly (30) yeazs from the date of the Housing Agreement. Further, Trustor
agrees that all future grant deeds for or transfers of interest in the Property sha11 contain a
restriction providing that for the period of time specified in this deed of trust, there shall be no
sale, lease, rental, or other transfer of the Properiy except for the sale to and occupation by
eligible low or moderate income households. Any sale, lease, rental, or other transfer of the
Property in violation of this covenant shall be void, as provided below.
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SECTION 2 .04. Determiwation of Eligibility. Trustor and Trustee agree to retain the Housing
Authority or other qualified entity. acceptable to the City, to determine whether prospective
buyers qualify as eligible households as defined in the City's Affordable Housing Standards.
SECTION 2.05. Covenants Binding. These affordability requirements shall be covenants
running with the land as defined in California Civil Code Section 1460, and sha11 apply to the
Real Property as further described on Exhibit "A." Pursuant to Civil Code Section 1468, which
governs such covenants, the provisions of this Agreement shall be binding upon all parties
having any right, title, or interest in the Property described herein, or any portion thereof and on
their heirs, successors in interest and assigns for a period of thirty (30) years from the date of the
Housing Agreement. The parties agree that all future deeds or transfers of interest regarding the
Property shall show the restrictions of this Agreement for as long as the Agreement is in effect.
SECTION 2 .06. First Right of Refusal. Upon resale, Trustor and Trustee agree that the
$eneficiary or the Housing Authority shall have the first right of refusal to purchase the Property
at the then current appraised value, as further described in the Note.
SECTION 2 .07. Performance of Obligations Secured. Trustor shall promptly pay when due the
indebtedness evidenced by the Note and any late charges, costs and/or fees pmvided for in the
Note and shall further perform fully and in a timely manner all other obligations of Trustor
contained herein or in the Note.
ARTICLE 3 — INSURANCE RE4UIREMENTS
SECTION 3 .01. Trustor shall keep the Properiy and a11 improvements thereon insured against loss
or damage by fire with extended all-risk coverage clauses, including vandalism and malicious
mischief clauses, in an amount not less than one hundred percent (100%) of the full replacement
cost of such improvements with a company or companies and in such form and with such
endorsements as may be approved or required by Beneficiary.
SECTION 3 .02. Trustor shall also maintain in full force and effect a policy of homeowners'
general liability insurance insuring Trustor against liability for bodily injury, pmperty damage
and personal injury arising out of the operation, use or occupancy of the Property. The initial
amount of such insurance shall be One Hundred Thousand Dollazs ($100,000.00) per occurrence
and not in the aggregate and sha11 be subject to periodic increase based upon increased liability
awards or the reasonable recommendation of Trustor's professional insurance advisor. Trustor
shall name Beneficiary as an additional insured under such policy. Such insurance shall be
primary with respect to any insurance maintained by Beneficiary and shall not call on
Beneficiary's insurance for contributions.
SECTION 3.03. Trustor sha11 pay all premiums for the insurance policies required to be
maintained under this Deed.of Trust within fifteen (15) days after Trustor's receipt of a copy of
the premium statement or other evidence of the amount due. At least thirty (30) days prior to the
expiration of such policy, Trustor sha11 deliver to Beneficiary a renewal of such policy.
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SECTION 3 .04. Any insurance which Trustor is required to maintain under this Deed of Trust
shall�include a provision requiring that the insurance carrier give Beneficiary not less than thirty
(30) days written notice prior to any cancellation or modification of such coverage. If Trustor (i)
fails to deliver any policy or renewal to Beneficiary required under this Deed of Trust within the
prescribed time period or (ii) if any such policy is canceled or modified to reduce the amount or
type of coverage without Beneficiary's consent and no substituted comparable coverage is
obtained by Trustor prior to such cancellation or modification, Beneficiary may obtain such
insurance. In such case, Trustor shall reimburse Beneficiary for the cost of such insurance within
fifteen (15) days after receipt of a statement that indicates the cost of such insurance and upon
proof that Beneficiary has paid said statement.
SECTION 3 .05. Trustor shall maintain all insurance required under this Deed of Trust with
companies holding a"general policy rating" of A-8 or better, as set forth in the most current issue
of "Best Key Rating Guide." Trustor acknowledges that the insurance described in this Section is
for the primary benefit of Beneficiary. Beneficiary makes no representation as to the adequacy of
such insurance to protect Trustor's or Beneficiary's interests. Therefore, Trustor shall obtain any
additional property or liability insurance that Trustor deexns necessary to protect Beneficiary and
Trustor, in the exercise of reasonable judgment.
SECTION 3 .06. Notwithstanding anything to the contrary contained herein, Trustor's obligation to
carry the insurance provided for herein may be brought within the coverage of a so-called blanket
policy or policies of insurance cazried and maintained by Trustor; provided, however, that
Beneficiary shall be named as an additional insured thereunder and that the coverage afforded
Beneficiary will not be reduced or diminished by reason of the use of such blanket policy of
insurance and provided further that the requirements set forth herein are otherwise satisfied.
SECTION 3.07. All of the above-mentioned insurance policies or certificates of insurance must
be satisfactory to Beneficiary. Beneficiary shall not by the fact of approving, disapproving,
accepting, preventing, obtaining or failing to obtain any insurance, incur any liability for or with
respect to the amount of insurance cairied, the form or legal sufficiency of insurance contracts,
insolvency of insurance companies or payment or defense of lawsuits and Trustor hereby
expressly assumes full responsibility therefor and all liability, if any, with respect thereto.
SECTION 3 .08. Condemnallon and Insurance Proceeds.
Subsection 3.08(a). Any award of damages in connection with any taking or condemnation,
or for injury to the Property by reason of public use, or for damages for private trespass or
entry onto the Properiy is hereby assigned and shall be paid to Beneficiary as further security
for all obligations secured by this Deed of Trust. Upon receipt of such pmceeds, Beneficiary
may hold the proceeds as further security or apply or release them in the same manner and
with the same effect as provided in this Deed of Trust for the disposition of proceeds of fire
or other insurance.
Subsection 3.08(b). Any insurance pmceeds or awards in connection with any casualty or
damage or injury to the Property covered by insurance ("Insurance Proceeds") are hereby
assigned to Beneficiary to be held and applied by Beneficiary in the manner hereinafter
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provided. Beneficiary may, at its option, and at its own expense, appeaz in and prosecute in
its own name any action or proceeding to enforce any cause of action for such Insurance
Proceeds. All Insurance Proceeds sha11 be applied by Beneficiary upon any indebtedness
secured by this Deed of Trust and in any order deternuned by Beneficiary or, at the option of
Beneficiary, the entire amount so collected or any part of that amount may be released to
Trustor. This application or release sha11 not cure or waive any default or notice of default
under this Deed of Trust or invalidate any act done pursuant to such notice.
Subsection 3.08(c). Trustor, immediately upon obtaining knowledge of the institution of any
proceedings relating to condemnation or other taking of or damage or injury to the Property
or any portion thereof, or knowledge of any casualty damage to the Property or damage in
any other manner, shall immediately notify Beneficiary in writing. Beneficiary may
participate, at its own expense, in any such proceedings and may join Trustor in adjusting any
loss covered by insurance.
ARTICLE 4. TAXES. LIENS AND OTHER ITEMS
Trustor shall pay, when due, all taxes, bonds, assessments, fees, liens (including prior trust deed
liens), chazges, fines, impositions and any and all other items which aze attributable to or affect
the Property and which may attain a priority over this Deed of Trust or the indebtedness or
evidence of indebtedness secured hereby, by making payment prior to delinquency directly to the
payee thereof. Trustor may initiate proceedings to contest any such taxes, bonds, assessments,
fees, liens, charges, fines, impositions or other items so long as Trustor takes steps to ensure that
Beneficiary's security is not threatened in any manner. Trustor shall pay a11 costs of the
proceedings, including any costs or fees incurred by Beneficiary. Upon the final determination of
any proceeding or contest, Trustor shall immediately pay the amounts due, together with all
costs, charges, interest and penalties incidental to the pmceedings.
ARTICLE 5. RENTS AND PROFITS
Trustor acknowledges and agrees that the Property sha11 at a11 times be occupied by the Trustor
as the Trustor's primary residence and shall not be leased or rented during the term of the Note
and this Deed of Trust. Notwithstanding the foregoing, any rents, royalties, issues, profits,
revenue, income and other benefits of the Property arising from the use and enjoyment of all or
any portion thereof or from any lease or agreement pertaining thereto (the "Rents and Profits"),
whether now due, past due, or to become due, and including all prepaid rents and security
deposits, are hereby absolutely, presently and unconditionally assigned, transferred, conveyed
and set over to Beneficiary to be applied by Beneficiary in the payment of the principal and all
other sums payable on the Note and of all other sums payable under this Deed of Trust. It is
understood and agreed that neither the foregoing assignment of Rents and Profits to Beneficiary
nor the exercise by Beneficiary of any of its rights or remedies under Article 5 hereof shall be
deemed to defeat the owner-occupied restriction set forth in the Agreement or to make
Beneficiary a mortgagee-in-possession or otherwise responsible or liable in any manner with
respect to the Property or the use, occupancy, enjoyment or operation of all or any portion
thereof, unless and until Beneficiary, in person or by agent, assumes actual possession thereof.
Further, the appointment of a receiver for the Property by any court at the request of Beneficiary
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or by agreement with Trustor, or the entering into possession of the Property or any part thereof
by such receiver, sha11 not be deemed to make Beneficiary a mortgagee-in-possession or
otherwise responsible or liable in any manner with respect to the Property or the use, occupancy,
enjoyment or operation of all or any portion thereof.
ARTICLE 6. PRESERVATION AND MAINTENANCE OF PROPERTY
Trustor shall keep the Property and every part thereof in good condition and repair and shall not
permit or commit any waste, impaixment or deterioration of the Property nor commit, suffer or
pernut any act upon or use of the Property in violation of law or applicable order of any
govemmental authority, whether now existing or hereafter enacted and whether foreseen or
unforeseen, including, without limitation, violation of any zoning, building or environmental
protection statutes, ordinances, regulations, orders and restrictions or in violation of any
covenants, conditions or restrictions affecting the Property or bring or keep any article upon any
of the Property or cause or peimit any condition to exist thereon which would be prohibited by or
could invalidate any insurance coverage maintained or required hereunder to be maintained by
Trustor on or with respect to any part of the Property and further sha11 do a11 other acts which
from the character or use of the Property may be reasonably necessary to protect the security
hereof, the specific enumerations herein not excluding the general. Trustor sha11 complete and
restore and repair pmmptly and in a good and workmanlike manner any building, structure or
improvement thereon which may be damaged or destroyed and pay, when due, a11 claims for
labor performed and materials fumished therefor, whether or not insurance or other proceeds are
available to cover, in whole or in part, the costs of any such restoration or repair. Trustor shall
nodfy Beneficiary immediately in writing of any damage to the Property in excess of Ten
Thousand Dollars ($10,000.00).
ARTICLE 7. PROTECTION OF SECURITY: COSTS AND EXPENSES
Trustor shall appeaz in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee and shall pay all reasonable costs and
expenses, including, without limitation, costs of evidence of title and reasonable attorney's fees,
in any such action or proceeding in which Beneficiary or Trustee may appear and in any suit
brought by Beneficiary to foreclose this Deed of Trust or to enforce or establish any other rights
or remedies of Beneficiary hereunder. If Trustor fails to perform any of the covenants or
agreements in this Deed of Trust or if any action or proceeding is commenced which affects
Beneficiary's interest in the Property or any part thereof, including, but not limited to, eminent
domain, code enforcement or proceedings of any nature whatsoever under any f�ieral or state
law, whether now existing or hereafter enacted or amended, relating to bankruptcy, insolvency,
arrangement, reorganization or other form of debtor relief, or to a decedent, then Beneficiary or
Trustee may, but without obligation to do so and upon ten (10) days' prior written notice to and
demand upon Trustor (unless a shorter notice period is necessary to protect Beneficiary's interest
in the security hereof, in which case only reasonable notice and demand under the circumstances
shall be required) and without releasing Trustor from any obligation hereunder, make such
appearances, disburse such sums and take such action as Beneficiary or Trustee deems necessary
or appropriate to protect Beneficiary's interest, including, but not limited to, disbursement of
reasonable attorney's fees, entry upon the Property to make repairs or otherwise protect the
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security hereof, and payment, purchase, contest or compromise of any encumbrance, charge or
lien which in the judgment of either Beneficiary or Trustee appeaz to be prior or superior hereto.
Trustor further agrees to pay all reasonable expenses of Beneficiary (including fees and
disbursements of counsel) reasonably related to the protection of the rights of Beneficiary
hereunder, and enforcement or collection of payment of the Note, whether by judicial or
non-judicial proceedings, or in connection with any bankruptcy, insolvency, azrangement,
reorganization or other debtor relief proceeding of Trustor, or otherwise. Beneficiary sha11 give
Trustor ten (10) days' prior written notice before disbursing any amounts pursuant to this Article.
Any amounts disbursed by Beneficiary or Trustee pursuant to this Section shall be additional
indebtedness of Trustor secured by this Deed of Trust as of the date of disbursement. All sueh
amounts shall be payable by Trustor immediately without demand. Nothing contained herein
sha11 be construed to require Beneficiary or Trustee to incur any expense, make any appearance
or take any other action.
ARTICLE 8. ENFORCEMENT
SECTION H .Ol. Acknowledgement of Enforceability. Trustor represents, warrants, covenants
and agrees that it is the lawful owner of the Real Property and that it has good right and lawful
authority to encumber the same as provided herein; that the Rea1 Property is free from any and
all liens and encumbrances excepting only such as have been approved by Beneficiary and that
Trustor warrants and will defend the title to the Properiy against all claims and demands
whatsoever not specifically excepted herein (and except for claims and demands arising from
acts or omissions of Beneficiary or any predecessor-in-interest to Beneficiary not previously
disclosed to Trustor), and Trustor will execute, aclrnowledge and deliver all and every such
further assurances unto Beneficiary of the title to the Property hereby conveyed and intended so
to be or that Trustor may be or shall become hereinafter bound so to do. Trustor covenants and
warrants that the Note and this Deed of Trust aze valid and enforGeable obligations of Trustor in
accordance with the terms thereof and hereof; and that this Deed of Trust does not, nor does the
Note, nor does the performance or observance by Trustor of any of the matters or things in the
Note or this Deed of Trust, contravene any covenant in any indenture or agreement affecting
Trustor.
SECTION 8 .02. Due on Sale and Other Enforcement Provisions. Trustor's agreement to ensure
the continued owner occupancy of the Real Property is a substantial material consideration to
Beneficiary and Beneficiary's agreement to accept the Note and to accept this Deed of Trust. In
accordance with California Civil Code Section 711.5 and in order to induce Beneficiary to accept
this Deed of Trust and the Note, Trustor agrees that Trustor shall not Transfer all or any part of
the Property without the prior written consent of Beneficiary. Except for a Transfer to a Eligible
Household (as defined in the City of Arroyo Crrande's Affordable Housing Standazds),
Beneficiary may grant or deny such consent in its sole and absolute discretion and as a condition
to such consent may require any transferee to assume a11 obligations hereunder and to agree to be
bound by all provisions contained herein. In the event of any proposed Transfer, Trustor shall
pmvide Beneficiary with all financial and other information pertaining to the intended transferee
reasonably requested by Beneficiary. In the event of any Transfer without the prior written
consent of Beneficiary, Beneficiary shall have the absolute right, at its option, without demand or
notice, to declaze all outstanding Principal and all other sums due hereunder and under the Note
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to be immediately due and payable. Further, Beneficiary may bring an action at law or in equity
to require Trustor and the proposed transferee to terminate and/or rescind any sales contract or
purchase and sale transaction between them and/or to declare the transfer void, notwithstanding
that the transfer may have closed and become final as between Trustor and the transferee.
Further, Beneficiary may pursue any other remedy ava.ilable under tlus Deed of Trust or the Note
or at law or in equity or under any other agreement, instnunent or document entered into by
Trustor and Beneficiary. Beneficiary's consent to one Transfer shall not be deemed to be a
waiver of the right to require consent to a future or successive Transfer. As used herein,
"Transfer" includes any sale, agreement to sell, assignment, exchange or other conveyance of the
Properiy or any portion thereof or any interest therein, whether voluntary or involuntary, by
operation of law or othervvise, except that a Transfer by gift, devise or inheritance to a spouse or
to a spouse as a part of a dissolution proceeding shall not be considered a Transfer for purposes
of this Section.
ARTICLE 9. EVENTS OF DEFAULT
Each of the following shall constitute an event of default ("Event of Default") hereunder
(including, if Trustor and Trustee consists of more than one person or entity, the occurrence of
any of such events with respect to any one or more of such persons or entities):
SECTION 9 .01. Breach of Covenants. Default by Trustor in the performance of any of the
covenants or agreements of Trustor contained herein, in the Note, in the Housing Agreement or
any other note or instrument, trust deed or other obligation of Trustor relating to the Property
secured by any part of or all of the Property, whether junior or senior to this Deed of Trust.
SECTION 9 .02. Appointment of Trustee. The appoinhnent pursuant to an order of a court of
competent jurisdiction, of a trustee, receiver or liquidator of the Property or any part thereof, or
of Trustor, or any termination or voluntary suspension of the transaction of business of Trustor,
or any attachment, execution or other judicial seizure of a11 or any substantial portion of Trustor's
assets; provided, however, that if such attachment, execution or seizure is involuntary, Trustor
shall not be deemed in default unless the same is not discharged within sixty (60) days.
SECTION 9 .03. Bankruptcy Filing. The filing by or against Trustor of a petition in bankruptcy
or for an arrangement or for reorganization or for other form of debtor relief pursuant to the
federal Bankruptcy Act, as the same may be amended or replaced from time to time, or any other
law, federal or state, whether now existing or hereafter amended or enacted relating to insolvency
or debtor relief (except that in the case of a. filing against Trustor, an Event of Default shall not
exist unless Trustor fails to have the pmceeding dischazged within sucty (60) days after such
filing), or the adjudication of Trustor as a bankrupt or an insolvent by a decree of a court of
competent jurisdiction, or the making of an assignment for the benefit of creditors, or the
admission by Trustor in writing of its inability to pay its debts generally as they become due, or
the giving of consent by Trustor to the appointment of a receiver or receivers of all or
substantially all of its property.
SECTION 9.04. Misrepresentations. Any representation or disclosure made to Beneficiary by
Trustor as an inducement to the making of the loan evidenced by the Note that pmves to be false
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or misleadi.ng in any material respect as of the time the same was made, whether or not any such
representation or disclosure appears as part of this Deed of Trust.
SECTION 9 .05. Other Events. Any other event which, under this Deed of Trust, or under the
Note or the Agreement, constitutes an Event of Default by Trustor hereunder or thereunder or
gives Beneficiary the right to accelerate the maturity of the indebtedness, or any part thereof,
secured hereby.
ARTICLE 10. REMEDIES
Upon the occurrence of any Event of Default and the expiration of any applicable period within
which to cure the same, Trustee and Beneficiary sha11 have the following rights and remedies:
SECTION 10 .01. Acceleration. Beneficiary may declare the entire outstanding Principal and all
other sums or payments required hereunder to be due and payable immediately and notwith-
standing the date such sums would otherwise be due in accordance with the Note and the
Agreement.
SECTION 10 .02. Entry. Whether or not Beneficiary exercises the right provided in Section 10.01
above, Beneficiary, in person or by agent or court-appointed receiver, may enter upon, take pos-
session of, manage and operate the Property or any part thereof and do all things necessary or
appropriate in Beneficiary's sole discretion in connection therewith, including, without
limitation, making and enforcing, and if the same be subject to modification or cancellation,
modifying or canceling leases upon such terms or conditions as Beneficiary deems proper,
obtaining and evicting tenants, and fixing or modifying rents, contracting for and making repairs
and alterations, and doing any and all other acts which Beneficiary deems proper to pmtect the
security hereof; and either with or without so t�� possession, in its own name, in the name of
Trustor or by court-appointed receiver (which may be appointed on notice or on ex parte
application without notice), suing for or otherwise collecting and receiving the rents and pmfits,
including those past due and unpaid, and applying the same less costs and expenses of operation
and collection, including reasonable attorney's fees, upon any indebtedness secured hereby and in
such order as Beneficiary may determine. Upon request of Beneficiary, Trustor shall assemble
and make available to Beneficiary at the site of the Real Property any of the Properiy which has
been removed therefrom. The entering upon and taking possession of the Property, or any part
thereof, the collection of any rents and pmfits and the application thereof as aforesaid sha11 not
cure or waive any Event of Default theretofore or thereafter occurring or affect any notice or
Event of Default or notice, and, notwithstanding continuance in possession of the Property or any
part thereof by Beneficiary, Trustor or a receiver, and the collection, receipt and application of
the rents and profits, Beneficiary shall be entitled to exercise every right provided for in this
Deed of Trust or by law or in equity upon or after the occurrence of an Event of Default,
including, without limitation, the right to exercise the power of sale. Any of the actions referred
to in this Section may be taken by Beneficiary irrespective of whether any notice of an Event of
Default or election to sell has been given hereunder and without regazd to the adequacy of the
security for the indebtedness hereby secured.
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SECTION 10 .03. Judicial Action. Beneficiary may bring an action in any court of competent
jurisdiction to foreclose this Deed of Trust or to enforce any of the covenants and agreements of
this Deed of Trust, or the Note and the Housing Agreement.
SECTION 10 .04. Power of Sale.
Subsection 10.04(a). Beneficiary may elect to cause the Property or any part thereof to be
sold under the power of sale herein granted in any manner permitted by applicable law. In
connection with any sale or sales hereunder, Beneficiary may elect to treat any of the
Property that consists of a right in action or that is property that can be severed from the Real
Property or any improvements thereon without causing structural damage thereto as if the
same were personal property and dispose of the same in accordance with applicable law,
separate and apart from the sale of the Real Property.
Subsection 10.04(b). Trustee may, and upon request of Beneficiary shall, from time to time,
postpone any sale hereunder by public announcement thereof at the time and place noticed
therefor. If the Property consists of several items of property, Beneficiary may designate- the
order in which such items shall be offered for sale or sold. Any person, including Trustor,
Trustee or Beneficiary, may purchase at any sale hereunder, and Beneficiary shall have the
right to purchase at any sale hereunder by crediting upon the bid price the amount of all or
any part of the indebtedness hereby secured.
SubsecNon 10.04(c). Should Beneficiary desire that more than one sale or other disposition
of the Property be conducted, Beneficiary may, at its option, cause the same to be conducted
simultaneously, or successively, on the same day, or at such different days or times and in
such order as Beneficiary may deem to be in its best interests, and no such sale shall
terminate or otherwise affect the lien of this Deed of Trust on any part of the Property not
sold until all indebtedness secured hereby has been fully paid. Upon any sale hereunder,
Trustee shall execute and deliver to the purchaser or purchasers a deed or deeds conveying
the Property so sold, but without any covenant or warranty whatsoever, express or implied,
whereupon such purchaser or purchasers shall be let into immediate possession; and the
recitals in any such deed or deeds of facts, such as default, the giving of notice of default and
notice of sale and other facts affecting the regularity or validity of such sale or disposition,
shall be conclusive proof of the truth of such facts and any such deed or deeds shall be
conclusive against all persons as to such facts recited therein.
Subsection 10.04(d). In case of any sale of the Property pursuant to any judgment or deeree
of any court or at public auction or otherwise in connection with the enforcement of any of
the terms of this Deed of Trust, Beneficiary, its successors or assigns, may become the
purchaser, and for the purpose of making settlement for or payment of the purchase price,
shall be entitled to deliver over and use the Note, together with all other sums, with interest,
advanced and unpaid hereunder, in order that there may be credited as paid on the purchase
price the sum then due under the Note, including principal thereon and all other sums, with
interest, advanced and unpaid hereunder.
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SECTION 10 .05. Proceeds of Sale. The proceeds of any sale made under or by virtue of this
Article, together with all other sums that then may be held by Trustee or Beneficiary under this
Deed of Trust, whether under the provisions of this Article or otherwise, shall be applied as
follows:
(a) First, to the payment of the costs and expenses of sale and of any judicial
proceedings wherein the same may be made, including reasonable compensation to
Trustee and Beneficiary, their agents and counsel, and to the payment of all
expenses, liabilities and advances made or incurred by Trustee under this Deed of
Trust, together with interest on all advances made by Trustee at the maximum rate
permitted by law to be charged by Trustee.
(b) Second, to the payment of any and all sums expended by Beneficiary under the
terms hereof (including, but not limited to, sums paid by Beneficiary on the prior
trust deed) not then repaid and all other sums required to be paid by Trustor
pursuant to any provisions of this Deed of Trust or the Note, including, without
limitation, all expenses, liabilities and advances made or incurred by Beneficiary
under this Deed of Trust or in connection with the enforcement hereof, together
with interest thereon as herein provided.
(c) Third, to the payment of the entire amount then due, owing or unpaid upon the
Note, including attorney's fees and costs.
(d) Fourth, all amounts otherwise due Beneficiary.
(e) The remainder, if any, to the person or persons legally entitled thereto.
SECTION IO .06. Waiver of Marshaliwg. Trustor, for itself and for all persons hereafter claiming
through or under it or who may at any ti�e hereafter become holders of liens junior to the lien of
this Deed of Trust, hereby expressly waives and releases all rights to direct the order in which
any of the Property shall be sold in the event of any sale or sales pursuant hereto, and to have any
of the Property and/or other property now or hereafter constituted security for any of the indebt-
edness secured hereby, marshaled upon any foreclosure of this Deed of Trust or for any other
security for any of said indebtedness.
SECTION 10 .07. Remedies Cumulative. No remedy herein conferred upon or reserved to
Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided,
but each sha11 be cumulative and sha11 be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute. No delay or omission of Trustee or
Beneficiary to exercise any right or power accruing upon any Event of Default shall impair any
right or power or shall be construed to be a waiver of any Event of Default or any acquiescence
therein; and every power and remedy given by this Deed of Trust to Trustee or Beneficiary may
be exercised from time to time as often as may be deemed expedient by Trustee or Beneficiary. If
there exists additional security for the performance of the obligations secured hereby, the holder
of the Note, at its sole option, and without limiting or affecting any of its rights or remedies
hereunder, may exercise any of the rights and remedies to which it may be entitled hereunder
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either concurrently with whatever rights and remedies it may have in connection with such other
security or in such order as it may determine. Any application of any amounts or any portion
thereof held by Beneficiary at any item as additional security hereunder, whether pursuant to this
deed of trust or otherwise, to any indebtedness secured hereby sha11 not extend or postpone the
due dates of any payments due from Trustor to Beneficiary hereunder or under the Note, or
change the amounts of any such payments or otherwise be construed to cure or waive any default
or notice of default hereunder or invalidate any act done pursuant to any such default or notice.
In the event that Beneficiary shall have proceeded to enforce any right under this Deed of Trust
by foreclosure, sale, entry or otherwise, and such proceedings sha11 have been discontinued or
abandoned for any reason or shall have been determined adversely, then, and in every such case,
Trustor and Beneficiary shall be restored to their former positions and rights hereunder with
respect to the Property subject to the lien hereof.
ARTICLE 11. MISCELLANEOUS
SECTION 11 .01. Severability. In the event that any one or more of the provisions contained in
this Deed of Trust shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any other pmvision of this
Deed of Trust, and this Deed of Trust shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
SECTION 11 .02. Certain Charges. Trustor agrees to pay the charges of Beneficiary for any
service rendered Trustor, or on its behalf, connected with this Deed of Trust or the indebtedness
secured hereby, including, without limitation, delivering to an escrow holder a request for full or
partial reconveyance of this Deed of Trust, transmitting to an escrow holder moneys secured
hereby, changing the records pertaining to this Deed of Trust and indebtedness secured hereby,
showing a new owner of the Property and replacing an existing policy of insurance held
hereunder with another such policy.
SECTION 11 .03. Notices. All notices expressly provided hereunder to be given by Beneficiary to
Trustor and all notices and demands of any kind or nature whatsoever that Trustor may be
required or may desire to give to or serve on Beneficiary shall be in writing and shall be served
by first class or registered or certified mail, retum receipt requested. Any such notice or demand
so served shall be deposited in the United States mail, with postage thereo� fully prepaid and
addressed to the party so to be served at its address above stated or at such other address of which
said party shall have theretofore notified in writing, as provided above, the party giving such
notice. Service of any such notice or demand so made shall be deemed effective on the date of
actual delivery as shown by the addressee's return receipt or the expiration of forty-eight (48)
hours after the date of mailing, whichever is the eazlier in time, except that service of any notice
of default or notice of sale provided or required by law shall, if mailed, be deemed effecrive on
the date of mailing.
SECTION 12 .04. Trustor Not Released. Extension of the time for payment or modification of
the terms of payment of any sums secured by this Deed of Trust granted by Beneficiary to any
successor-in-interest of Trustor shall not operate to release, in any manner, the liability of the
original Trustor. Beneficiary shall not be required to coxnmence proceedings against such
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successor or refuse to extend t�me for payment or otherwise modify the terms of the payment of
the sums secured by this Deed of Trust by reason of any demand made by the original Trustor.
Without affecting the liability of any person, including Trustor, for the payment of any
indebtedness secured hereby, or the lien of this Deed of Trust on the remainder of the Property
for the full amount of any such indebtedness and liability unpaid, Beneficiary and Trustee aze
respectively empowered as follows: Beneficiary may from time to time and without notice (a)
release any person liable for the payment of any of the indebtedness, (b) extend the time or
otherwise alter the tenns of payment of any of the indebtedness, (c) accept additional real or
personal property of an kind as security therefor, whether evidenced by deeds of trust, mortgages,
security agreements or any other instruments of security, or (d) alter, substitute or release any
property securing the indebtedness; Trustee may, at any time and from time to time, upon the
written request of Beneficiary (a) consent to the making of any map or plat of the Property or any
part thereof, (b) join in grant'ing any easement or creating any restriction thereon, (c) join in any
subordination agreement or other agreement affecting this Deed of Trust or the lien or charge
hereof, or (d) reconvey, without any warranty, all or part of the Property.
SECTION 12 .05. InspecNon. Beneficiary may at any reasona.ble time or times make or cause to
be made entry upon and inspections of the Property or any part thereof in person or by agent.
SECTION 12 .06. Reconveyance. Upon the payment in full of a11 sums secured by this Deed of
Trust or upon forgiveness of such payment in accordance with the Note, Beneficiary shall request
that Trustee reconvey the Property and shall surrender this Deed of Trust and Note evidencing
indebtedness secured by this Deed of Trust to Trustee. Upon payment of its fees and any other
sums owing to it under this Deed of Trust, Trustee shall reconvey the Property without warranty
to the person or persons legally entitled thereto. Such person or persons shall pay all costs of
recordation, if any. The recitals in such reconveyance of any matters of facts shall be conclusive
proof of the truthfulness thereof The grantee in such reconveyance may be described as "the
person or persons legally entitled thereto." Five (5) years after issuance of such full
reconveyance, Trustee may destroy the Note and this Deed of Trust unless otherwise dir�ted by
Beneficiary.
SECTION 12.07. Interpretation. Wherever used in this Deed of Trust, unless the context
indicates a contrary intent, or unless otherwise specifically pmvided herein, the word "Trustor"
shall mean and include both Trustor and any subsequent owner or owners of the Properiy, and
the word "Beneficiary" shall mean and include not only the original Beneficiary hereunder but
also any future owner and holder, including pledgees, of the Note secured hereby. In this Deed of
Trust wherever the context so requires, the masculine gender includes the feminine and/or neuter,
and the neuter includes the feminine and/or masculine, and the singular number includes the
plural and conversely. In this Deed of Trust, the use of the word "including" sha11 not be deemed
to limit the generality of the term or clause to which it has reference, whether or not non-limiting
language (such as "without limitation," or "but not limited to" or words of similaz import) is used
with reference thereto. The captions and headings of the Articles and Sections of this Deed of
Trust are for convenience only and are not to be used to interpret, define or limit the provisions
hereof.
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SECTION 12.08. Consen� The granting or withholding of consent by Beneficiary to any
transaction as required by the terms hereof shall not be deemed a waiver of the right to require
consent to future or successive transactions.
SECTION 12 .09. Successors and Assigns. All of the grants, obligations, covenants, agreements,
terms, provisions and conditions herein shall run with the land and shall apply to, bind, and inure
to the benefit of the heirs, administrators, executors, legal representatives, successors and assigns
of Trustor and the successors-in-trust of Trustee and the endorsees, transferees, successors and
assigns of Beneficiary. In the event that Trustor is composed of more than one party, the
obligations, covenants, agreements and warranties contained herein as well as the obligations
arising therefrom are and shall be joint and several as to each such party.
SECTION 12 .10. Governing Law. This Deed of Trust shall be govemed by and construed under
the laws of the State of California.
SECTION 12 .11. Trustor Waivers. Trustor waives the benefit of all laws now existing or that
hereafter may be enacted with respect to any statute of limitations for the filing of any action or
claims by Beneficiary.
SECTION 12 .13. Superiority of First Lender pocuments.
Subsection 12.13(a). This Deed of Trust shall not diminish or affect the rights of the First
Lender under that certain deed of trust dated �u,�� 2 ,��, executeci by the
Trustor in favor of the First Lender and recorded in th��gu��San Luis Obispo on
November 13 , 2002 , and assigned Instnunent No. or any subsequent First
Lender deeds of trust hereafter recorded against the Security (the "First Deed of Trust"),
except as provided in Subsection 12.13(b) below. Beneficiary and Trustor acknowledge and
agree that this Deed of Trust is subject and subordinate in all respects to the liens, terms,
covenants and conditions of the First Deed of Trust and to a11 advances heretofore made or
which may hereafter be made pursuant to the First Deed of Trust including all sums advanced
for the purpose of (i) protecting or further securing the lien of the First Deed of Trust, curing
defaults by the Trustor under the First Deed of Trust or for any other purpose expressly
permitted by the First Deed of Trust or (ii) constructing, renovating, repairing, fiunishing,
fixturing or equipping the Property. The terms and provisions of the First Deed of Trust are
paramount and controlling, and they supersede any other terms and provisions hereof in
conflict therewith.
Subsection 12.13(b). In the event of default, the First Lender may take the following actions
to cure the default, pmvided first that: (i) the Beneficiary has been given written notice of a
default under the First Deed of Trust, and (ii) the Beneficiary shall not have cured the default
under the First Deed of Trust, or diligently pursued curing the default as determined by the
First Lender, within the 60-day period provided in such notice sent to the Beneficiary:
1) Foreclose on the subject property pursuant to the remedies permitted by law and written
in a recorded contract or deed of trust; or
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2) Accept a deed of trust or assignment to the extent of the value of the unpaid first
mortgage to the current market value in lieu of foreclosure in the event of default by a
trustor; or
3) Sell the property to any person at a fair mazket value price subsequent to exercising its
rights under the deed of trust. Any value in excess of the unpaid mortgage and costs of
sale administration shall be used to satisfy the City loan. In no case may a first mortgage
lender, exercising foreclosure assignment in-lieu of foreclosure or sale, obtain value or
rights to value greater than the value of the outstanding indebtedness on the first
mortgage at the time of the debt clearing action.
The following types of transfers shall remain subject to the requirements of the City's loan
and right of first refusal: transfer by gift, devise, or inheritance to the owner's spouse;
transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution
proceedings; or acquisition in conjunction with a mazriage.
Subsection 12.13(c). The provisions of the Housing Agreement and this Deed of Trust shall be
subordinate to any first lien on the Property ("First Lien") and shall not impair the rights such
lender, or investor or such lender's or investor's assignee or successor in interest, to exercise its
remedies under the First Lien in the event of default under the first Lien by Borrower.
If the holder of the First Lien acquires title to the Property pursuant to a deed or assignment in
lieu of foreclosure, the Agreement and the City's Deed of Trust sha11 automatically terminate
upon such acquisition of title.
SECTION 12 .14. Request for Notices of Default and Sale.
Subsection 12.14(a). Trustor hereby requests that a copy of any notice of default and notice
of sale as may be required by law or by this Deed of Trust be mailed to Trustor at its address
above stated.
Subsection 12.14(b). In accordance with Section 2924b of the California Civil Code, request
is hereby made that a copy of any notice of default and a copy� �tg�f �e under that
deed trust recorded on November 13 2002 , y�y��L��� ��D' 2� 8630
records of San Luis Obispo County, Califorrua, executed by Joshua Blair and Jaydyn Blair as
trustor in which Wells Farqo Home Mortgage� Inc. is named as Beneficiary and
Fidelity National Tit�TntStee, be mailed to: City Manager, City of Airoyo Grande,
214 E. Branch Street, Arroyo Grande, California 93421. NOTICE: A eopy of any notice of
default and of any notice of sale will be sent only to the address contained in this recorded
request. If your address changes, a new request must be recorded.
SECTION 12 .15. No Transfer. Trustor shall not voluntarily or involuntarily (except for a transfer
in accordance with the Affordable Housing Agreement) assign or otherwise transfer any of its
rights, duties, liabilities or obligations hereunder or under the Note without the prior written
consent of Beneficiary.
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SECTION 12 .16. Attorney's Fees. In any action to interpret or enforce any provision of this
Deed of Trust, the prevailing party shall be entitled to reasonable costs and attorney's fees.
IN WITNESS WHEREOF, the undersigned have executed this Deed of Trust as of the day and
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EXHIBIT "A"
DESCRIPTION OF REAL PROPERTY
Pazce12 of Parcel Map AG 95-068 in the City of Arroyo Grande, County of San
Luis Obispo, State of Califomia, according to the Map filed November 6, 1996, in
Book 52, Page 25 of Pazcel Maps.
I
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�'
STATE OF �t1L / f �,�,(J //¢
COUNTY OF _ c�/�j(J L�l{� �/c�f�
�
On November 7, 2002 before me, �thy Dittman, Notary Public
(Name, Title of Officer)
personally appeared Joshua Blair arid= Jaydyn Blair
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
�
(Signature Notary Public)
�`. Com
� • Notary Public �
' Californla �
SAN LUIS OBtSPO COUNTY I�
My Commission Explree blayt�, 2pp5
. ....�
(This area for notarial seal)
END OF D4CUMEN�` .
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