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CC 2015-11-24_09j Lease Agreement_214 East BranchMEMORANDUM .TO: CITY COUNCIL FROM: TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR SUBJECT: CONSIDERATION OF LEASE WITH RE/MAX DEL ORO FOR THE EXISTING CITY HALL BUILDING AT 214 EAST BRANCH STREET DATE: NOVEMBER 24, 2015 RECOMMENDATION: It is recommended the City Council approve a lease with Re/Max Del Oro ("Re/Max") for the existing City Hall building at 214 East Branch Street. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: The proposed lease will be $3,732 per month gross for the main floor of the building, which is 3,110 square feet. Total annual revenue from the lease will be $44,784. The lease will have an annual escalation of 2% commencing at the beginning of the second year of the five year term: BACKGROUND: At the October 12, 2010 meeting, the City Council approved a lease of the "Old City -Hall" building at 214 E. Branch Street with Re/Max. The lease rate was $1.03 per square foot with the following terms: • The tenant will be provided half of the basement at no additional cost and the City has reserved the right to continue to use the other half for storage. • The first four months at 50% of the base rate. • Rent will escalate by 2% annually after the third year. • A five year term. • The tenant will pay possessory interest taxes. ANALYSIS OF ISSUES: The Re/Max lease expires on December 31, 2015. The City performed an analysis of the fair market lease rates of commercial office space in the area and entered into negotiations with the existing tenant. During the last five years, Re/Max has submitted its lease payments timely. Re/Max continues to be a business that is cooperative and flexible in working with the City and they have provided significant improvements and Item 9.j. - Page 1 ... • CITY COUNCIL CONSIDERATION OF LEASE WITH RE/MAX DEL ORO FOR THE EXISTING CITY HALL BUILDING AT 214 EAST BRANCH STREET NOVEMBER 24, 2015 PAGE2 proper maintenance to the building. They have subleased a portion of the building, and plan to continue to do so consistent with their lease terms. The proposed lease rate of $1.20 per square foot is within the range of market commercial lease rates. Key terms remain consistent with the previous lease: • The tenant will be provided half of the basement at no additional cost and the City has reserved the right to continue to use the other half for storage. • Rent will escalate by 2% annually. • A five year term. • The City will have the right to reoccupy some of the building upon six months notice. • The tenant will pay possessory interest taxes. • The tenant will pay operating expenses including electric, gas, cable, telephone, water, sewer and garbage. ALTERNATIVES: Alternatives available for City Council consideration include the following: • Approve the proposed lease; • Direct staff to renegotiate the terms; • Reject the lease and direct staff to maintain operations in the City Hall building. ADVANTAGES: The lease revenue will enable the City to fund maintenance improvements for City facilities. Additionally, the terms of the lease will provide flexibility for the City to partially utilize the Old City Hall building in the future, if a need arises. Lastly, the lease involves a use and tenant that has a proven track record and that is generally compatible with the historic site and building. DISADVANTAGES: No disadvantages of the proposed lease have been identified. ENVIRONMENTAL REVIEW: No environmental review is necessary for this item. Item 9.j. - Page 2 CITY COUNCIL . CONSIDERATION OF LEASE 'WITH RE/MAX DEL ORO FOR THE EXISTING CITY HALL BUILDING AT 214 EAST BRANCH STREET NOVEMBER 24, 2015 PAGE3 PUBLIC NOTICE AND COMMENT: The Agenda was posted in front of City Hall on Thursday, November 19, 2015, on the City's website on November 20, 2015. No public comment has been received .. Item 9.j. - Page 3 CALIFORNIA AS.SOC I AT ION OF REALTORS® COMMERCIAL LEASE AGREEMENT (C.A.R. Form CL, Revised~/13) Date (For reference only): November 18, 2015 ------------------~Th~e~C..:.:it~v~o=f~A=m'-'o~y~o~G=r.=a=n=d=e----------------==---=-("Landlord") and --------------=Dc:e,_I =O~ro:....:....P~ro .. p,_,e"-rt=-ie=s::z.•..:.:ln"'c""'.'-'' D=B'-'A'"'R..:.:Eli=M"-J\X='-D=el,_O=r.=o=---------------("Tenant") agree as follows 1. PROPERTY: Landlord rents to Tenant and Tenant rents from Landlord; the real property and improvements descnbed as: =2~14~E~·~B_ra=n~c=h~S~t·~·- Arroyo Grande, CA., a majority portion of the former A.G. City Hall building. ("Premises"), which compnse approximately 100.000 % of the total square footage of rentable space in the entire property. See exh1b1t ______ for a further descnption of the Premises. 2. TERM: The term begins on (date) ___________ ___,J:..:a::.n:..:u:.:a"""'rv<....:..1,c..:2::0::..:1-=6 ____________ ("Commencement Date"), (Check~ or B): . !Kl A. Lease: and shall terminate on (date) December 31, 2020 at Midnight [JAM D PM Any holding over after the term of this agreement expires, with Landlord's consent, shall create a month-to-month tenancy that either party may terminate as specified in paragraph 2B. Rent shall be at a rate equal to the rent for the immediately preceding month, payable in advance. All other terms and cond1t1ons of this agreement shall remain in full force and effect. D B. Month-to-month: and continues as a month-to-month tenancy. Either party may terminate the tenancy by giving wntten notice to the other at least 30' days prior to the intended termination date, subject to any applicable laws Such notice may be given on any date. 0 C. RENEWAL OR EXTENSION TERMS: See attached addendum------------------------ 3. BASE RENT: A. Tenant agrees to pay Base Rent at the rate of (CHECK ONE ONLY:) D (1) $ per month, for the term of the agreement. D (2) $ per month, for the first 12 months of the agreement. Commencing with the 13th month, and upon expiration of each 12 months thereafter, rent shall be adjusted according to any increase in the U.S. Consumer Pnce Index of the Bureau of Labor Stat1st1cs of the Department of Labor for All Urban Consumers ("CPI"} for ----------------------,.,- (the city nearest the location of the Premises), based on the following formula: Base Rent will be multiplied by the most current CPI preceding the first calendar month during which the adjustment is to take effect, and divided by the most recent CPI preceding the Commencement Date. In no event shall any adjusted Base Rent be less than the Base Rent for the month 1mmed1ately preceding the adjustment. If the CPI 1s no longer published, then the adjustment to Base Rent shall be based on an alternate index that most closely reflects the CPI. !Kl (3) $ 3,732.00 per month for the period commencing _~J~a=n=u=ary~1~·~2~0~1~6 __ and ending -=D~e~ce=m~b~er~3~1~·~2=0~1~6-and $ 3,806.64 per month for the penod commencing January 1, 2017 and ending December 31, 2017 and $ 3,882.77 per month for the penod commencing January 1, 2018 and ending __ D_e~c~e~m_b_e_r_3_1~,_2_0_1_8 __ D (4) In accordance with the attached rent schedule. D (5) Other: See attached Addendum 1 B. Base Rent 1s payable in advance on the 1st (or D ) day of each calendar month, and 1s delinquent on the next day. C. If the Commencement Date falls on any day other than the first day of the month, Base Rent for the first calendar month shall be prorated based on a 30-day penod. If Tenant has paid one full month's Base Rent in advance of Commencement Date, Base Rent for the second calendar month shall be prorated based on a 30-day penod. 4. RENT: A. Definition: ("Rent") shall mean all monetary obligations of Tenant to Landlord under the terms of this agreement, except secunty deposit. B. Payment Rent shall be paid to (Name) City of Arroyo Grande at (address) ---------------------------------------------'or at any other location specified by Landlord in wnting to Tenant. C. Timing: Base Rent shall be paid as specified in paragraph 3. All other Rent shall be paid within 30 days after Tenant 1s billed by Landlord. 5. EARLY POSSESSION: Tenant 1s entitled to possession of the Premises on . If Tenant is in possession prior to the Commencement Date, during this time (i) Tenant is not obligated to pay Base Rent, and (ii) Tenant D 1s D 1s not obligated to pay Rent other than Base Rent. Whether or not Tenant 1s obligated to pay Rent pnor to Commencement Date, Tenant is obligated to comply with all other terms of this agreement. 6. SECURITY DEPOSIT: A. Tenant agrees to.--eay Landlord$ 3 210.00 as a secunty deposit. Tenant agrees not to hold Broker resppns1ble for its return. (IF CHECKED·) lJ If Base Rent increases dunng the term of this agreement, Tenant agrees to increase security deposit by the same proportion as the increase in Base Rent. B. All or any portion of the security deposit may be used, as reasonably necessary, to (i) cure Tenant's default in payment of Rent, late charges, non-sufficient funds ("NSF") fees, or other sums due; (ii) repair damage, excluding ordinary wear and tear, caused by Tenant or by a guest or licensee of Tenant, (iii) broom clean the Premises, 1f necessary, upon termination of tenancy; and (iv) cover any other unfulfilled obligation of Tenant. SECURITY DEPOSIT SHALL NOT BE USED BY TENANT IN LIEU OF PAYMENT OF LAST MONTH'S RENT. If all or any portion of the secunty deposit 1s used during tenancy, Tenant agrees to reinstate the total security deposit within 5 days after written notice is delivered to Tenant. Within 30 days after Landlord receives possession of the Premises, Landlord shall. (i) furnish Tenant an 1tem1zed statement indicating the amount of any security deposit received and the basis for its d1spos1tion, and (ii) return any remaining portion of security deposit to Tenant. However, if the Landlord's only claim upon the security deposit 1s for unpaid Rent, then the remaining portion of the secunty deposit, after deduction of unpaid Rent, shall be returned within 14 days after the Landlord receives possession. C. No interest will be paid on secunty deposit, unless required by local ordinance. Landlord's Initials ( Tenant's Initials ( © 2013, California Assoc1at1on of REAL TORS®, Inc. I Reviewed by Date CL REVISED 4/13 (PAGE 1 of 6) COMMERCIAL LEASE AGREEMENT (CL PAGE 1 OF 6) Re/l\lax Del Oro, 857 Santa Rosa Street San Luis Ob1Spo, CA 93401 Phone: 805.781.8101 Fax· Randy Steiger Produced with zlpFonn® by zoploglx 18070 Fifteen Mlle Road, Fraser, Michigan 48026 www zlologlx com ~· EQUAl...MOUStflC OPPO~ City of Arroyo Item 9.j. - Page 4 Premises: 214 E. Branch St., Arroyo Grande, CA., a majority portion of the former A.G. City Hall building. 7. PAYMENTS: Date November 18, 2015 PAYMENT TQTALDUE RECEIVED BALANCE DUE DUE DATE A. Rent: From 0110112016 To 0113112016 $ 3,732.00 $ $ 3,732.00 0110112016 ' Date Date B. Security Deposit ................. $ $ $ c. Other· $ $ $ Category D. Other: $ $ $ Category E. Total .......................... $ 3,732.00 $ $ 3,732.00 8. PARKING: Tenant 1s entitled to any available unreserved and No reserved. vehicle parking spaces. The right to parking Dis ~ 1s not included in the Base Rent charged pursuant to paragraph 3. If not included in the Base Rent, the parking rental fee shall be an add1t1onal $ per month. Parking space(s) are to be used for parking operable motor vehicles, except for trailers, boats, campers, buses or trucks (other than pick-up trucks). Tenant shall park in assigned space(s) only. Parking space(s) are to be kept clean. Vehicles leaking 011, gas or other motor vehicle fluids shall not be parked in parking spaces or on the Premises. Mechanical work or storage of inoperable vehicles 1s not allowed in parking space(s) or elsewhere on the Premises. No overnight parking 1s permitted. 9. ADDITIONAL STORAGE: Storage is permitted as follows Basement -the open western appx 50% of space . The right to additional storage space ~ 1s D 1s not included in the Base Rent charged pursuant to paragraph 3. If not included in Base Rent, storage space shall be an additional$ per month. Tenant shall store only personal property that Tenant owns, and shall not store property that 1s claimed by another, or in which another has any right, title, or interest. Tenant shall not store any improperly packaged food or perishable goods, fl-ammable materials, explosives, or other dangerous or hazardous material. Tenant shall pay for, and be responsible for, the clean-up of any contamination caused by Tenant's use of the storage area. 10. LATE CHARGE; INTEREST; NSF CHECKS: Tenant acknowledges that either late payment of Rent or issuance of a NSF check may cause Landlord to incur costs and expenses, the exact amount of which are extremely difficult and impractical to determine. These costs may include, but are not limited to, processing, enforcement and accounting expenses, and late charges imposed on Landlord. If any installment of Rent due from Tenant 1s not received by Landlord within 5 calendar days after date due, or 1f a check 1s returned NSF, Tenant shall pay to Landlord, respectively, $ 100.00 as late charge, plus 10% interest per annum on the delinquent amount and $25.00 as a NSF fee, any of which shall be deemed add1t1onal Rent. Landlord and Tenant agree that these charges represent a fair and reasonable estimate of the costs Landlord may incur by reason of Tenant's late or NSF payment. Any late charge, delinquent interest, or NSF fee due shall be paid with the current installment of Rent. Landlord's acceptance of any late charge or NSF fee shall not constitute a waiver as to any default of Tenant. Landlord's right to collect a Late Charge or NSF fee shall not be deemed an extension of the date Rent 1s due under paragraph 4, or prevent Landlord from exercising any other rights and remedies under this agreement, and as provided by law. 11. CONDITION OF PREMISES: Tenant has examined the Premises and acknowledges that Premise is clean and in operative cond1t1on, with the following exceptions Exterior paint is peeling and/or stained in places. Items listed as exceptions shall be dealt with in the following manner ~S~e=e~a=tt=a=c=h~e=d~A~d=d=e=n=d=u=m~1~. ----------------- 12. ZONING AND LAND USE: Tenant accepts the Premises subject to all local, state and federal laws, regulations and ordinances ("Laws"). Landlord makes no representation or warranty that Premises are now or in the future will be suitable for Tenant's use. Tenant has made its own investigation regarding all applicable Laws. 13. TENANT OPERATING EXPENSES: Tenant agrees to pay for all ut11it1es and services directly billed to Tenant Electric, gas, cable, telephone, water, sewer and garbage. 14. PROPERTY OPERATING EXPENSES: A. Tenant agrees to pay its proportionate share of Landlord's estimated monthly property operating expenses, including but not limited to, common area maintenance, consolidated utility and service bills, insurance, and real property taxes, based on the ratio of the square footage of the Premises to the total square footage of the rentable space in the entire property.-------------------------- ORB. ~(If checked) Paragraph 14 does not apply. 1& US~ThePrem~esareforthes~euseas ~O~ffl=1:c:~~--------------------------------~ No other use is permitted without Landlord's prior written consent. If any use by Tenant causes an increase in the premium on Landlord's ex1st1ng property insurance, Tenant shall pay for the increased cost. Tenant will comply with all Laws affecting its use of the Premises. 16. RULES/REGULATIONS: Tenant agrees to comply with all rules and regulations of Landlord (and, if applicable, Owner's Association) that are at any time posted on the Premises or delivered to Tenant Tenant shall not, and shall ensure that guests and licensees of Tenant do not, disturb, annoy, endanger, or interfere with other tenants of the building or neighbors, or use the Premises for any unlawful purposes, including, but not limited to, using, manufacturing, selling, storing, or transporting illicit drugs or other contraband, or violate any law or ordinance, or committing a waste or nuisance on or about the Premises. 17. MAINTENANCE: A. Tenant OR D (If checked, Landlord) shall professionally maintain the Premises including heating, air conditioning, electrical, plumbing and water systems, 1f any, and keep glass, windows and doors in operable and safe condition. Unless Landlord 1s checked, if Tenant fads to maintain the Premises, Landlord may contract for or perform such maintenance, and charge Tenant for Landlord's cost. B. Landlord OR ~ (If checked, Tenant) shall maintain the roof, foundation, exterior walls, common areas and Landscape, HVAC (Heating and Air Conditioning System. Landlord's Initials ( Tenant's Initials ( I Reviewed by Date CL REVISED 4113 (PAGE 2 of 6) COMMERCIAL LEASE AGREEMENT (CL PAGE 2 OF 6) Produced with zipFonn® by zlploglx 18070 Fifteen Mlle Road, Fraser, Michigan 48026 wwwzlploglx com EQUAL MOUSING OPPORTUNITY City of Arroyo Item 9.j. - Page 5 Premises: 214 E. Branch St., Arroyo Grande, CA .• a maiority portion of the former A.G. City Hall building. Date November 18, 2015 18. ALTERATIONS: Tenant shall not make any alterations m or about the Premises, including installation of trade fixtures and signs, without Landlord's prior written consent, which shall not be unreasonably withheld. Any alterations to the Premises shall be done according to Law and with required permits. Tenant shall give Landlord advance notice of the commencement date of any planned alteration, so that Landlord, at its option, may post a Notice of Non-Respons1b11ity to prevent potential liens against Landlord's interest m the Premises. Landlord may also require Tenant to provide Landlord with lien releases from any contractor performing work on the Premises. 19. GOVERNMENT IMPOSED ALTERATIONS: Any alterations required by Law as a result of Tenant's use shall be Tenant's respons1b11ity. Landlord shall be responsible for any other alterations required by Law. 20. ENTRY: Tenant shall make Premises available to Landlord or Landlord's agent for the purpose of entering to make inspections, necessary or agreed repairs, alterations, or improvements, or to supply necessary or agreed services, or to show Premises to prospective or actual purchasers, tenants, mortgagees, lenders, appraisers, or contractors. Landlord and Tenant agree that 24 hours notice (oral or written) shall be reasonable and sufficient notice. In an emergency, Landlord or Landlord's representative may enter Premises at any time without prior notice. 21. SIGNS. Tenant authorizes Landlord to place a FOR SALE sign on the Premises at any time, and a FOR LEASE sign on the Premises within the 90 (orD ) day period preceding the termination of the agreement. 22. SUBLETTING/ASSIGNMENT: Tenant shall not sublet or encumber all or any part of Premises, or assign or transfer this agreement or any interest in 1t, without the prior written consent of Landlord, which shall not be unreasonably withheld. Unless such consent 1s obtained, any subletting, assignment, transfer, or encumbrance of the Premises, agreement, or tenancy, by voluntary act of Tenant, operation of law, or otherwise, shall be null and void, and, at the option of Landlord, terminate this agreement. Any proposed sublessee, assignee, or transferee shall submit to Landlord an application and credit information for Landlord's approval, and, 1f approved, sign a separate written agreement with Landlord and Tenant. Landlord's consent to any one sublease, assignment, or transfer, shall not be construed as consent to any subsequent sublease, assignment, or transfer, and does not release Tenant of Tenant's obligation under this agreement 23. POSSESSION: If Landlord 1s unable to deliver possession of Premises on Commencement Date, such date shall be extended to the date on which possession is made available to Tenant However, the expiration date shall remain the same as specified m paragraph 2. If Landlord is unable to deliver possession within 60 (or D ) calendar days after the agreed Commencement Date, Tenant may terminate this agreement by giving written notice to Landlord, and shall be refunded all Rent and security deposit paid. 24. TENANTS OBLIGATIONS UPON VACATING PREMISES: Upon termination of agreement, Tenant shall: (i) give Landlord all copies of all keys or , opening devices to Premises, including any common areas; (ii) vacate Premises and surrender 1t to Landlord empty of all persons and personal property, (iii) vacate all parking and storage spaces, (iv) deliver Premises to Landlord 1n the same cond1t1on as referenced in paragraph 11, (v) clean Premises, (vi) give written notice to Landlord of Tenant's forwarding address; and (vii) -------------------- All improvements installed by Tenant, with or without Landlord's consent, become the property of Landlord upon termination. Landlord may nevertheless require Tenant to remove any such improvement that did not exist at the time possession was made available to Tenant. 25. BREACH OF CONTRACT/EARLY TERMINATION: In event Tenant, prior to exp1rat1on of this agreement, breaches any obligation m this agreement, abandons the premises, or gives notice of tenant's intent to terminate this tenancy prior to its expiration, 1n addition to any obligations established by paragraph 24, Tenant shall also be responsible for lost rent, rental commissions, advertising expenses, and painting costs necessary to ready Premises for re-rental. Landlord may also recover from Tenant. (i) the worth, at the time of award, of the unpaid Rent that had been earned at the time of termination; (ii) the worth, at the time of award, of the amount by which the unpaid Rent that would have been earned after exp1rat1on until the time of award exceeds the amount of such rental loss the Tenant proves could have been reasonably avoided; and (iii) the worth, at the time of award, of the amount by which the unpaid Rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided. Landlord may elect to continue the tenancy m effect for so long as Landlord does not terminate Tenant's right to possession, by either written notice of termination of possession or by relettmg the Premises to another who takes possession, and Landlord may enforce all Landlord's nghts and remedies under this agreement, including the right to recover the Rent as 1t becomes due. 26. DAMAGE TO PREMISES: If, by no fault of Tenant, Premises are totally or partially damaged or destroyed by fire, earthquake, accident or other casualty, Landlord shall have the right to restore the Premises by repair or rebuilding. If Landlord elects to repair or rebuild, and 1s able to complete such restoration within 90 days from the date of damage, subject to the terms of this paragraph, this agreement shall remain 1n full force and effect. If Landlord is unable to restore the Premises within this time, or 1f Landlord elects not to restore, then either Landlord or Tenant may terminate this agreement by giving the other written notice. Rent shall be abated as of the date of damage. The abated amount shall be the current monthly Base Rent prorated on a 30-day basis. If this agreement 1s not terminated, and the damage is not repaired, then Rent shall be reduced based on the extent to which the damage interferes with Tenant's reasonable use of Premises. If damage occurs as a result of an act of Tenant or Tenant's guests, (i) only Landlord shall have the right, at Landlord's sole discretion, within 30 days after such total or partial destruction or damage to treat the lease as terminated by Tenant, and (11) Landlord shall have the right to recover damages from Tenant. 27. HAZARDOUS MATERIALS: Tenant shall not use, store, generate, release or dispose of any hazardous material on the Premises or the property of which the Premises are part. However, Tenant is permitted to make use of such materials that are required to be used in the normal course of Tenant's business provided that Tenant complies with all applicable Laws related to the hazardous materials. Tenant 1s responsible for the cost of removal and remed1at1on, or any clean-up of any contamination caused by Tenant. 28. CONDEMNATION: If all or part of the Premises is condemned for public use, either party may terminate this agreement as of the date possession 1s given to the condemner. All condemnation proceeds, exclusive of those allocated by the condemner to Tenant's relocation costs and trade fixtures, belong to Landlord. 29. INSURANCE: Tenant's personal property, fixtures, equipment, inventory and vehicles are not insured by Landlord against loss or damage due to fire, theft, vandalism, ram, water, criminal or negligent acts of others, or any other cause. Tenant 1s to carry Tenant's own property insurance to protect Tenant from any such loss. In addition, Tenant shall carry liability insurance in an amount of not less than$ 1,000,000.00 . Tenant's liability insurance shall name Landlord and Landlord's agent as additional insured. Tenant, upon Landlord's request, shall provide Landlord with a certificate of insurance establishing Tenant's compliance. Landlord shall maintain liability insurance insuring Landlord, but not Tenant, m an amount of at least $ , plus property insurance in an amount sufficient to cover the replacement cost of the property. Tenant 1s advised to carry business interruption insurance 1n an amount at least sufficient to cover Tenant's complete rental obligation to Landlord. Landlord is advised to obtain a policy of rental loss insurance. Both Landlord and Tenant release each other, and waive their respective rights to subrogation against each other, for loss or damage covered by insurance. Landlord's Initials ( Tenant's Initials ( I Reviewed by Date CL REVISED 4/13 (PAGE 3 of 6) COMMERCIAL LEASE AGREEMENT (CL PAGE 3 OF 6) Produced with zlpFonn® by zlploglx 18070 Fifteen Mlle Road, Fraser, Michigan 48026 WNW zlploglx com City of Arroyo Item 9.j. - Page 6 Premises 214 E. Branch St., Arroyo Grande, CA., a majority portion of the former A.G. City Hall building. Date November 18, 2015 30. TENANCY STATEMENT (ESTOPPEL CERTIFICATE): Tenant shall execute and return a tenancy statement (estoppel certificate), delivered to Tenant by Landlord or Landlord's agent, within 3 days after its receipt. The tenancy statement shall acknowledge that this agreement is unmodified and m full force, or m full force as modified, and state the modifications. Failure to comply with this requirement (i) shall be deemed Tenant's acknowledgment that the tenancy statement is true and correct, and may be relied upon by a prospective lender or purchaser, and ~i) may be treated by Landlord as a matenal breach of this agreement. Tenant shall also prepare, execute, and deliver to Landlord any financial statement (which will be held in confidence) reasonably requested by a prospective lender or buyer. 31. LANDLORD'S TRANSFER: Tenant agrees that the transferee of Landlord's interest shall be substituted as Landlord under this agreement. Landlord will be released of any further obligation to Tenant regarding the secunty deposit, only if the security deposit is returned to Tenant upon such transfer, or 1f the secunty deposit is actually transferred to the transferee. For all other obligations under this agreement, Landlord 1s released of any further liability to Tenant, upon Landlord's transfer. 32. SUBORDINATION: This agreement shall be subordinate to all existing hens and, at Landlord's option, the lien of any first deed of trust or first mortgage subsequently placed upon the real property of which the Premises are a part, and to any advances made on the security of the Premises, and to all renewals, modifications, consolidations, replacements, and extensions. However, as to the lien of any deed of trust or mortgage entered into after execution of this agreement, Tenant's right to quiet possession of the Premises shall not be disturbed 1f Tenant 1s not 1n default and so long as Tenant pays the Rent and observes and performs all of the provisions of this agreement, unless this agreement 1s otherwise terminated pursuant to its terms. If any mortgagee, trustee, or ground lessor elects to have this agreement placed in a security position prior to the lien of a mortgage, deed of trust, or ground lease, and gives wntten notice to Tenant, this agreement shall be deemed pnor to that mortgage, deed of trust, or ground lease, or the date of recording. 33. TENANT REPRESENTATIONS; CREDIT: Tenant warrants that all statements m Tenant's financial documents and rental application are accurate. Tenant authonzes Landlord and Broker(s) to obtain Tenant's credit report at time of application and periodically during tenancy m connection with approval, modification, or enforcement of this agreement. Landlord may cancel this agreement. (i) before occupancy begins, upon disapproval of the credit report(s); or (ii) at any time, upon discovering that information in Tenant's application 1s false. A negative credit report reflecting on Tenant's record may be submitted to a credit reporting agency, 1f Tenant fails to pay Rent or comply with any other obligation under this agreement. 34. CONSTRUCTION-RELATED ACCESSIBILITY STANDARDS: Landlord states that the Premises 0has, or 0 has not been inspected by a Certified Access Specialist. If so, Landlord states that the Premises D has, or D has not been determined to meet all applicable construction-related access1b1hty standards pursuant to GIVll Code Section 55.53. 35. ENERGY DISCLOSURE: If this 1s a lease of the entire building, Landlord shall provide Tenant, at least 24 hours pnor to execution of this Agreement, the Disclosure Summary Sheet, Statement of Energy Performance, Data Checklist, and the Facility Summary for the building as required by Public Resources Code Section 25402.10 and California Code of Regulations, Title 20, Sections 1680 through 1685. This requirement is effective for a building with total gross floor area square footage as follows· more than 50,000 square feet, July 1, 2013; more than 10,000 square feet and up to 50,000 square feet, January 1, 2014, and at least 5,000 square feet up to 10,000 square feet, July 1, 2014. For more information, see http://www.energy.ca gov/ab1103/index.html. "'"' 36. DISPUTE RESOLUTION: A. MEDIATION: Tenant and Landlord agree to mediate any dispute or claim ansing between them out of this agreement, or any resulting transaction, before resorting to arb1trat1on or court action, subject to paragraph 36B(2) below Paragraphs 36B(2) and (3) apply whether or not the arbitration provision 1s initialed. Mediation fees, if any, shall be divided equally among the parties involved. If for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through med1at1on, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party 1n any such action. THIS MEDIATION PROVISION APPLIES WHETHER OR NOT THE ARBITRATION PROVISION IS INITIALED. B. ARBITRATION OF DISPUTES: (1) Tenant and Landlord agree that any dispute or claim in Law or equity arising between them out of this agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration, including and subject to paragraphs 36B(2) and (3) below. The arbitrator shall be a retired judge or justice, or an attorney with at least 5 years of real estate transactional law experience, unless the parties mutually agree to a different arbitrator, who shall render an award in accordance with substantive California Law. In all other respects, the arbitration shall be conducted in accordance with Part Ill, Title 9 of the California Code of Civil Procedure. Judgment upon the award of the arbitrator(s) may be entered in any court having jurisdiction. The parties shall have the right to discovery in accordance with Code of Civil Procedure §1283.05. (2) EXCLUSIONS FROM MEDIATION AND ARBITRATION: The following matters are excluded from Mediation and Arbitration hereunder (i) a judicial or non-judicial foreclosure or other action or proceeding to enforce a deed of trust, mortgage, or installment land sale contract as defined 1n Civil Code §2985; (ii) an unlawful detainer action; (iii) the filing or enforcement of a mechanic's lien; (iv) any matter that 1s within the jurisd1ct1on of a probate, small claims, or bankruptcy court; and (v) an action for bodily injury or wrongful death, or for latent or patent defects to which Code of Civil Procedure §337 .1 or §337 .15 applies. The filing of a court action to enable the recording of a notice of pending action, for order of attachment, receivership, injunction, or other prov1s1onal remedies, shall not constitute a v1olat1on of the mediation and arb1trat1on prov1s1ons. (3) BROKERS: Tenant and Landlord agree to mediate and arbitrate disputes or claims involving either or both Brokers, provided either or both Brokers shall have agreed to such mediation or arb1trat1on, pnor to, or within a reasonable time after the dispute or claim is presented to Brokers. Any election by either or both Brokers to participate 1n mediation or arb1trat1on shall not result m Brokers being deemed parties to the agreement. "NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MA TIERS INCLUDED IN THE 'ARBITRATION OF DISPUTES' PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE 'ARBITRATION OF DISPUTES' PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO Landlord's Initials ( Tenant's Initials ( I Reviewed by Date CL REVISED 4/13 (PAGE 4 of 6) COMMERCIAL LEASE AGREEMENT (CL PAGE 4 OF 6) Produced with zlpFonn® by zlploglx 18070 Fifteen Mlle Road, Fraser, "!lchlgan 48026 yr.NW zlDLoqlx com EQUAL 1-!0USING CPPORT\JNfTY City of Arroyo Item 9.j. - Page 7 Premises: 214 E. Branch St., Arroyo Grande, CA .• a majority portion of the former A.G. City Hall building. Date November 18, 2015 ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY." - "WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISLNG OUT OF THE MATTERS INCLUDED IN THE 'ARBITRATION OF DISPUTES' PROVISION TO NEUTRAL ARBITRATION." Landlord's Initials Tenant's Initials 37. JOINT AND INDIVIDUAL OBLIGATIONS: If there 1s more than one Tenant, each one shall be individually and completely responsible for the performance of all obligations of Tenant under this agreement, jointly with every other Tenant, and ind1v1dually, whether or not in possession. 38. NOTICE: Notices may be served by mail, facsimile, or couner at the following address or location, or at any other location subsequently designated. Landlord Tenant ----------------------- Notice 1s deemed effective upon the earliest of the following· (i) personal receipt by either party or their agent; (ii) wntten acknowledgement of notice; or (iii) 5 days after mailing notice to such location by first class mall, postage pre-paid. 39. WAIVER: The waiver of any breach shall not be construed as a continuing waiver of the same breach or a waiver of any subsequent breach. 40. INDEMNIFICATION: Tenant shall indemnify, defend and hold Landlord harmless from all claims, disputes, litigation, Judgments and attorney fees arising out of Tenant's use of the Premises. 41. OTHER TERMS AND CONDITIONS/SUPPLEMENTS: (A) Tenant is a licensed real estate broker in the state of California. (8) Arbitration of Disputes is intentionally not initialed and is struck from this agreement (Paragraph 368). (C) Signs: Signs will require approval by the Architectural Review Committee. City sign regulations provide up to two monument signs (1 currently existing) and two wall signs (one per street frontage). (D) No private parking is available. (E) Tenant reserves the right to sublet any portion of the premises for allowable professional office and/or retail and/or food and beverage use, at Landlord's discretion wherein Landlord will not unreasonably withhold approval. Landlord to process a Development Code amendment to allow all uses allowed in the Village Core zone. Any sublease shall comply with all City regulations and permit requirements. (Fl Tenant to pay possesory interest tax. (G) Landlord reserves the right to sublet a portion of the subject property, for its own use, up to a maximum of 1 ,200 square feet at the same rental rate charged to tenant as per the terms of this lease. Landlord to give Tenant 6 months notice of intent to utilize such space. Landlord and Tenant shall work together to determine a logistically appropriate use of space that does not interfere with Tenant 1s ability to utilize the premises for Tenant's intended and historical use. (H) Tenant shall allow Landlord to use electrical outlets on the outside of the building to be used for Harvest Festival. Strawberry Festival, and the Santa Claus holiday display. Landlord shall deduct from rent the estimated cost of electricity used. m Security Deposit of $3,210 is currently held by Landlord. (J) Landlord reserves the right to use the approximate 50% of basement space, eastern portion. The following ATTACHED supplements/exhibits are incorporated in this agreement D Option Agreement IC AR Form OAl 1. Addendum 1 42. ATTORNEY FEES: In any action or proceeding arising out of this agreement, the prevailing party between Landlord and Tenant shall be entitled to reasonable attorney fees and costs from the non-prevailing Landlord or Tenant, except as provided in paragraph 36A. 43. ENTIRE CONTRACT: Time is of the essence. All pnor agreements between Landlord and Tenant are incorporated 1n this agreement, which constitutes the entire contract. It is intended as a final expression of the parties' agreement, and may not be contradicted by evidence of any pnor agreement or contemporaneous oral agreement. The parties further intend that this agreement constitutes the complete and exclusive statement of its terms, and that no extnns1c evidence whatsoever may be introduced in any JUd1c1al or other proceeding, 1f any, 1nvolv1ng this agreement. Any provision of this agreement that 1s held to be invalid shall not affect the validity or enforceability of any other prov1s1on in this agreement. This agreement shall be binding upon, and inure to the benefit of, the heirs, assignees and successors to the parties. 44. BROKERAGE: Landlord and Tenant shall each pay to Broker(s) the fee agreed to, if any, in a separate written agreement. Neither Tenant nor Landlord has utilized the services of, or for any other reason owes compensation to, a licensed real estate broker (individual or corporate), agent, finder, or other entity, other than as named in this agreement, in connection with any act relating to the Premises, including, but not limited to, inquines, introductions, consultations, and negot1at1ons leading to this agreement. Tenant and Landlord each agree to indemnify, defend and hold harmless the other, and the Brokers specified herein, and their agents, from and against any costs, expenses, or liability for compensation claimed 1ncons1stent with the warranty and representation in this paragraph 42. 45. AGENCY CONFIRMATION: The following agency relat1onsh1ps are hereby confirmed for this transact1on- L1st1ng Agent: (Print Firm Name) is the agent of (check one): D the Landlord exclusively; or 0 both the Tenant and Landlord. Selling Agent RE/MAX Del Oro (Pnnt Firm Name) (1f not same as Listing Agent) 1s the agent of (check one) ~the Tenant exclusively; or 0 the Landlord exclusively, or 0 both the Tenant and Landlord. Real Estate Brokers are not parties to the agreement between Tenant and Landlord. Landlord's Initials ( Tenant's Initials ( CL REVISED 4/13 (PAGE 5 of 6) j Reviewed by Date COMMERCIAL LEASE AGREEMENT (CL PAGE 5 OF 6) Produced with zipFonn® by zlploglx 18070 Fifteen Mlle Road, Fraser, Michigan 48026 wwwzlologlx com EQUAL HOUSING CP?ORTUNTTY Coty of Arroyo Item 9.j. - Page 8 Premises 214 E. Branch St., Arroyo Grande, CA., a majority portion of the former A.G. City Hall building. Date November 18, 2015 Landlord and Tenant acknowledge and agree that Brokers: (i) do not guarantee the condition of the Premises; (ii) cannot verify representations made by others; (iii) will not verify zoning and land use restrictions; (iv) cannot provide legal or tax advice; (v) will not provide other advice or information that exceeds the knowledge, education or experience required to obtain a real estate license. Furthermore, if Brokers are not also acting as Landlord in this agreement, Brokers: (vi) do not decide what rental rate a Tenant should pay or Landlord should accept; and (vii) do not decide upon the length or other terms of tenancy. Landlord and Tenant agree that they will seek legal, tax, insurance, and other desired assistance from appropriate professionals. Tenant Date __________ _ Del Oro Properties, Inc. (Pnnt name) Address ______________________ City _____________ State ____ Zip ____ _ Tenant Date---------- (Print name) Address _______________________ City ______________ State ____ Zip ____ _ D GUARANTEE: In consideration of the execution of this Agreement by and between Landlord and Tenant and for valuable consideration, receipt of which 1s hereby acknowledged, the undersigned ("Guarantor'') does hereby· (i) guarantee unconditionally to Landlord and Landlord's agents, successors and assigns, the prompt payment of Rent or other sums that become due pursuant to this Agreement, including any and all court costs and attorney fees included 1n enforcing the Agreement, (ii) consent to any changes, modificat1ons or alterations of any term 1n this Agreement agreed to by Landlord and Tenant; and (iii) wa1v~ any right to require Landlord and/or Landlord's agents to proceed against Tenant for any default occumng under this Agreement before seeking to enforce this Guarantee. Guarantor(PnntName) __________________________________________ _ Guarantor ___________________________________ Date _________ _ Address ____________________ C1ty ______________ State ____ Zip ____ _ Telephone ___________ Fax ___________ E-mail ____________________ _ Landlord agrees to rent the Premises on the above terms and conditions. Landlord Date __________ _ (owner or agent with authonty to enter into this agreement) City of Arroyo Grande Address 300 E Branch St City <--'A"-'rr:'""o""y""o_,G,,,r._,,a""'n""'d""e _______ State CA Zip 93420-2706 Landlord -,-----------------.,.---------------------Date _________ _ (owner or agent with authonty to enter into this agreement) Address _______________________ City ______________ State ____ Zip ____ _ Agency relationships are confirmed as above. Real estate brokers who are not also Landlord in this agreement are not a party to the agreement between Landlord and Tenant. Real Estate Broker (Leasing Firm) ~R=B~M~:AX~D~e=l~O=r.~o ____________________ _ By (Agent) ______________________ BRE Lie.# 01084549 · Randy Steiger Address 214 E. Branch Telephone (805)481-9800 Fax (805)781-8102 City Arroyo Grande E-mail randydeloro@gmail.com BRE Lie. # 01084549 Date _________ _ State _,,C""'A'--_ Z1p 93420 Real Estate Broker (Listing Firm) _____________________________ BRE Lie #~0~1~08~4~5~4=9 ___ _ By (Agent) ______________________ BRE Lie.# 01084549 Date _________ _ Randy Steiger Address _______________________ City ______________ State ____ Z1p ____ _ Telephone ___________ Fax ___________ E-mall _______________________ _ © 2013, Callfom1a Assoc1abon of REALTORS®, Inc United States copynght law (Title 17 US. Code) forbids the unauthonzed d1stnbubon, display and reproducbon of this form, or any portion thereof, by photocopy machine or any other means, mcludmg facsimile or computenzed formats. THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS® (CAR). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ACCURACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL [] Published and D1stnbuted by. REAL ESTATE BUSINESS SERVICES, INC. a subs1d1ary of the Ca/1fomia Assoc1abon of REAL TORS® ., 525 South Virgil Avenue, Los Angeles, Callfom1a 90020 CL REVISED 4/13 (PAGE 6 OF 6) I Reviewed by Date COMMERCIAL LEASE AGREEMENT (CL PAGE 6 OF 6) Produced with zlpFonn® by zlploglx 18070 Fifteen Mlle Road, Fraser, Michigan 48026 www zlologlx com EQUAL HOUS!Nl OPPOIUUNfTY City of Arroyo Item 9.j. - Page 9 CALIFORNIA ASSOCIATION OF REALTORS® ADDENDUM- (C.A.R. Form ADM, Revised 4/12) The following terms and cond1t1ons are hereby incorporated in and made a part of the. D Residential Purchase Agreement, D Manufactured Home Purchase Agreement, D Business Purchase Agreement, D Res1dent1al Lease or Month-to-Month Rental Agreement, D Vacant Land Purchase Agreement, D Residential Income Property Purchase Agreement, D Commercial Property Purchase Agreement, ~ Other Commercial Lease Agreement dated November 20, 2015 , on property known as 214 E Branch St Arroyo Grande, CA 93420-2704 in which Del Oro Properties, Inc. is referred to as ("BuyerfTenant") and City of Arroyo Grande is referred to as ("Seller/Landlord"). 1. Monthly rent to escalate by 2% per year beginning January 1 of each remaining year starting 111119, in the same manner prescribed in section 3.3 of lease agreement. 2. ADA: Landlord shall not assume responsibility for any improvements required for permits or to address Americans with Disabilities (ADA) compliance. Should any government agency and/or court of Jaw later order any part of the building to become ADA complaint after execution of this lease, lessee shall have the ability to immediately terminate the lease. 3. Tenant Improvements: Landlord shall not contribute -Tenant to clean, paint and maintain building exterior in its current historic configuration and motif. Tenant to replace awnings as is necessary at Tenant discretion. Any improvements must comply with and receive any necessary approvals required by the City's Historic Resources Ordinance and/or Architectural Review Committee. The foregoing terms and conditions are hereby agreed to, and the undersigned acknowledge receipt of a copy of this document. BuyerfT enant Seller/Landlord Del Oro Properties, Inc. City of Arroyo Grande BuyerfTenant Seller/Landlord The copynght laws of the Umted States (Title 17 U S Code) forbid the unauthonzed reproduc!Jon of this form, or any portion thereof, by photocopy machine or any other means, including facs1m1le or computenzed formats. Copynght© 1986-2012, CALIFORNIA ASSOCIATION OF REAL TORS®, INC. ALL RIGHTS RESERVED. THIS FORM HAS BEEN APPROVED BY THE CALIFORNIA ASSOCIATION OF REALTORS® (CAR.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF ANY PROVISION IN ANY SPECIFIC TRANSACTION A REAL ESTATE BROKER IS THE PERSON QUALIFIED TO ADVISE ON REAL ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL This form 1s available for use by the entire real estate industry. It 1s not intended to 1dent1fy the user as a REAL TOR®. REALTOR® 1s a registered collective membership mark which may be used only by members of the NATIONAL ASSOCIATION OF REALTORS® who subscnbe to its Code of Ethics. [J Published and D1stnbuted by 1:5:t REAL ESTATE BUSINESS SERVICES, INC a subs1d1afY of the Cahfom1a Assoc1at1on of REALTORS® - ® 525 South Virgil Avenue, Los Angeles, Cahfom1a 90020 Reviewed by Date -' ADM REVISED 4/12(PAGE1OF1) ADDENDUM (ADM PAGE 1OF1) Re/Max Del Oro, 857 Santa Rosa Street San Luis Obispo, CA 93401 Phone 805.781.8101 R nd i r .~ Fax. ~UAL HOUSING OPPORTUNITY City of Arroyo Item 9.j. - Page 10 CALIFORNIA ASSOCIATION OF REALTORS® DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (Listing Firm to Seller) (As·required by the Civil Code) D (If checked) This form 1s being provided in Code section 2079.13(k) and (I). (C.A.R. Form AD, Revised 12/14) connection with a transaction for a leasehold interest exceeding one year as per Civil When you enter into a discussion with a real estate agent regarding a real estate transaction, what type of agency relationship or representation you wish to have with the agent in the transaction. SELLER'S AGENT you should from the outset understand A Seller's agent under a listing_ agreement with the Seller acts as the agent for the Seller only. A Seller's agent or a subagent of that agent has the following affirmative obligations To the Seller A F1duc1ary duty of utmost care, integrity, honesty and loyalty in dealings with the Seller. To the Buyer and the Seller: · (a) Diligent exercise of reasonable skill and care in performance of the agent's duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or des1rab11ity of the property that are not known to, or within the diligent attention and observation of, the parties. An agent 1s not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above. BUYER'S AGENT A selling agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these s1tuat1ons, the agent is not the Seller's agent, even 1f by agreement the agent may receive compensation for services rendered, either 1n full or 1n part from the Seller. An agent acting only for a Buyer has the following affirmative obligations To the Buyer. A fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Buyer To the Buyer and the Seller: (a) Diligent exercise of reasonable skill and care in performance of the agent's duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or des1rab11ity of the property that are not known to, or within the diligent attention and observation of, the parties An agent 1s not obligated to reveal to either party any confidential information obtained from the other party that does not involve the affirmative duties set forth above. AGENT REPRESENTING BOTH SELLER AND BUYER A real estate agent, either acting directly or through one or more associate licensees, can legally be the agent of both the Seller and the Buyer in a transaction, but only with the knowledge and consent of both the Seller and the Buyer. In a dual agency situation, the agent has the following affirmative obligations to both the Seller and the Buyer- (a) A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer. (b) Other duties to the Seller and the Buyer as stated above in their respective sections. In representing both Seller and Buyer, the agent may not, without the express perm1ss1on of the respective party, disclose to the other party that the Seller will accept a price less than the listing price or that the Buyer will pay a price greater than the price offered. The above duties of the agent in a real estate transaction do not relieve a Seller or Buyer from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transaction. A real estate agent 1s a person qualified to advise about real estate If legal or tax advice is desired, consult a competent professional Throughout your real property transaction you may receive more than one disclosure form, depending upon the number of agents assisting in the transaction. The law requires each agent with whom you have more than a casual relat1onsh1p to present you with this disclosure form. You should read its contents each time 1t is presented to you, considering the relationship between you and the real estate agent in your specific transaction. This disclosure form includes the provisions of Sections 2079.13 to 2079.24, inclusive, of the Civil Code set forth on page 2. Read it carefully. I/WE ACKNOWLEDGE RECEIPT OF A COPY OF THIS DISCLOSURE AND THE PORTIONS OF THE CIVIL CODE PRINTED ON THE BACK (OR A SEPARAl"E PAGE). D Buyer D Seller~ Landlord D Tenant Date _________ _ D D City of AIToyo Grande Buyer D SellerD Landlord Tenant Date _________ _ Agent-----------.,..-...,...,,,---..,,--,--------------BRE Lie. #"""0"'"'10...,8'-'4-"5-"49=-------------- Real Estate f3roker (Firm) _By _____________________ BRE Lie. #~0_1~08~4_5_4_9 __________ Date __________ _ (Sales erson or Broker-Associate Rand Stei er Agency Disclosure Compliance (Civil Code §2079.14)· • When the listing brokerage company also represents Buyer/Tenant The Listing Agent shall have one AD form signed by Seller/Landlord and a different AD form signed by Buyer/Tenant. • When Seller/Landlord and Buyer/Tenant are represented by different brokerage companies (1) the Listing Agent shall have one AD form signed by Seller/Landlord and (ii) the Buyer's/Tenant's Agent shall have one AD form signed by Buyer/Tenant and either that same or a different AD form presented to 'seller/Landlord for signature prior to presentation of the offer. If the same form 1s used, Seller may sign here' ' (SELLERILANDLORP: DO NOT SIGN HERE) (SELLER/LANDLORD· PO NOT SIGN HERE) Seller/Landlord Date Seller/Landlord -Date The capynght laws of the United States (T1tie 17 U,S, Cade) forbid the unauthonzed reproduction of this form, or any portion thereof, by photocopy machine or any other means, mcludmg facs1m1le or computenzed formats .-----------------, Copynght © 1991-2010, CALIFORNIA ASSOCIATION OF REAL TORS®, INC I Reviewed by Date ALL RIGHTS RESERVED. AD REVISED 12/14(PAGE1OF2) DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (AD PAGE 1 OF 2) Re/Ma:r. Del Oro, 857 Santa Rosa Street San Lms Obispo, CA 93401 Phone 805.781.8101 Fax. Randy Steiger Produced with zipFonn® by z1plog1x 18070 Fifteen Mile Road, Fraser, M1ch1gan 48026 www z1plog1x com G:r EQUAL HOUSING OPP_ORllJNITY City o! Arroyo Item 9.j. - Page 11 CIVIL CODE SECTIONS 2079.24 (2079.16 APPEARS 0 THE FRONT) 2079.13 As used in Sections 2079 14 to 2079 24, inclusive, the following terms have the following meanin s (a) "Agent" means a person actmg under prov1s1ons of Title 9 (commencing with Section 2295) in a real property transaction, and includes a person who 1s licens$d as a real estate broker under Chapter 3 (commencing with Section 10130) of Part 1 of D1vis1on 4 of the Business and Professions Code, and under whose license ~ listing 1s executed or an offer to purchase 1s obtained (b) "Associate licensee• means a person who 1s licensed as a real estate broker or salesperson under Chapter 3 (commencing with Section 10130) of Part 1 of D1vis1on 4 of the Business and Professions Code and who 1s either licensed under a broker or has entered into a wntten contract with a broker to act as the broker's agent 1n connection with acts requinng a real estate license and to function under the broker's supervision 1n the capacity of an assoCJate licensee. The agent in the real property transaction bears respons1bd1ty for his or her associate licensees who perform as agents of the agent VI/hen an assoCJate licensee owes a duty to any pnnc1pal, or to any buyer or seller Who IS not a pnnc1pal, in a real property transaction, that duty IS equivalent to the duty owed to that party by the broker for whom the associate licensee funcbons. (c) "Buyer" means a transferee in a real property transaction, and includes a person who executes an offer to purchase real property from a seller through an agent, or who seeks the services of an agent 1n more than a casual, transitory, or preliminary manner, with the object of entenng into a real property transaction. "Buyer" includes vendee or lessee. (d) "Commercial real property" means all real property 1n the state, except single-family res1dent1al real property, dwelling urnts made subject to Chapter 2 (commencing with Section 1940) of Title 5, mob1lehomes, as defined in Section 798 3, or recreational vehicles, as defined in Sec!Jon 799 29. (e) "Dual agenr means an agent acting, either directly or through an assoCJate licensee, as agent for both the seller and the buyer in a real property transaction (f) "Listing agreement" means a contract between an owner of real property and an agent, by which the agent has been authonzed to sell the real property or to find or obtain a buyer (g) "Listing agent" means a person who has obtained a listing of real property to act as an agent for compensabon (h) "Listing pnce" 1s the amount expressed in dollars specified in the listing for which the seller 1s willing to sell the real property through the listing agent (i) "Offenng pnce" 1s the amount expressed in dollars specified in an offer to purchase for which the buyer 1s willing to buy the real property (j) "Offer to purchase• means a wntten contract executed by a buyer acting through a selling agent that becomes the contract for the sale of the real property upon acceptance by the seller (k) "Real property" means any estate specified by subd1v1s1on (1) or (2) of Section 761 1n property that constitutes or 1s improved with one to four dwelling urnts, any commercial real property, any leasehold in these types of property exceeding one year's duration, and mob1lehomes, when offered for sale or sold through an agent pursuant to the authonty contained in Sec!Jon 10131.6 of the Business and Professions Code. (I) 'Real property transac!Jon" means a transaction for the sale of real property 1n which an agent 1s employed by one or more of the pnnc1pals to act 1n that transaction, and includes a listing or an offer to purchase (m) "Sell," "sale,' or 'sold" refers to a transaction for the transfer of real property from the seller to the buyer, and includes exchanges of real property between the seller and buyer, transactions for the creation of a real property sales contract within the meaning of Section 2985, and transactions for the creation of a leasehold exceeding one year's duration (n) "Seller" means the transferor 1n a real property transaction, and includes an owner who lists real property with an agent, whether or not a transfer results, or who receives an offer to purchase real property of which he or she 1s the owner from an agent on behalf of another "Seller'' includes both a vendor and a lessor (o) 'Selling agent" means a lis!Jng agent who acts alone, or an agent who acts in cooperation with a lis!Jng agent, and who sells or finds and obtains a buyer for the real property, or an agent who locates property for a buyer or who finds a buyer for a property for which no listing eXJsts and presents an offer to purchase to the seller. (p) "Subagenr means a person to whom an agent delegates agency powers as provided 1n Article 5 (commencing with Section 2349) of Chapter 1 of Title 9. However, "subagent" does not include an associate licensee who 1s acting under the supervision of an agent in a real property transaction. ' 2079.14 Listing agents and selling agents shall provide the seller and buyer in a real property transaction with a copy of the disclosure form specified in Section 2079 16, and, except as provided 1n subd1v1s1on (c), shall obtain a signed acknowledgement of receipt from that seller or buyer, except as provided in this section or Section 2079 15, as follows (a) The lis!Jng agent, 1f any, shall provide the disclosure form to the seller pnor to entenng into the listing agreement (b) The selling agent shall provide the disclosure form to the seller as soon as practicable pnor to presen!Jng the seller with an offer to purchase, unless the selling agent previously provided the seller with a copy of the disclosure form pursuant to subd1vis1on (a). (c) VI/here the selling agent does not deal on a face-to-face basis with the seller, the disclosure form prepared by the selling agent may be furnished to the seller (and acknowledgement of receipt obtained for the selling agent from the seller) by the lis!Jng agent, or the selling agent may deliver the disclosure form by cer!Jfied mail addressed to the seller at his or her last known address, in which case no signed acknowledgement of receipt 1s required (d) The selling agent shall provide the disclosure form to the buyer as soon as practicable pnor to execu!Jon of the buyer's offer to purchase, except that 1f the offer tO purchase 1s not prepared by the selling agent, the selling agent shall present the disclosure form to the buyer not later than the next business day after the selling agent receives the offer to purchase from the buyer 2079.15 In any circumstance in which the seller or buyer refuses to sign an acknowledgement of receipt pursuant to Section 2079 14, the agent, or an associate licensee actmg for an agent, shall set forth, sign, and date a wntten declaration of the facts of the refusai 2079.16 Reproduced on Page 1 of this AD form. 2079.17 (a) As soon as practicable, the selling agent shall disclose to the buyer and seller whether the selling agent 1s acting 1n the real property transaction exclusively as the buyers agent, exclusively as the sellers agent, or as a dual agent represen!Jng both the buyer and the seller This relat1onsh1p shall be confirmed in the contract to purchase and sell real property or 1n a separate wnting executed or acknowledged by the seller, the buyer, and the selling agent pnor to or coincident with execu!Jon of that contract by the buyer and the seller, respec!Jvely (b) As soon as practicable, the listing agent shall disclose to the seller whether the listlng agent 1s acting in the real property transaction exclusively as the sellers agent, or as a dual agent representing both the buyer and seller This relationship shall be confirmed 1n the contract to purchase and sell real property or in a separate wnbng executed or acknowledged by the seller and the listlng agent pnor to or co1nc1dent with the execution of that contract by the seller. (c)· The confirmabon required by subd1v1s1ons (a) and (b) shall be in the following form. (DO NOT COMPLETE SAMPLE ONLY) 1s the agent of (check one) D the seller exclusively, or D both the buyer and seller (Name of Listing Agent) (DO NOT COMPLETE. SAMPLE ONLY) 1s the agent of (check one) D the buyer exclusively, or D the seller exclusively, or (_N_a_m_e-of-S.,..e-l-lin-g~A~ge--'n ... t=-1f ... n"""'o"'t=th=e~sa=m---=e~a=s~t=he~L=1s~t1=ng~A ... g~e-nt.,..) ___ D both the buyer and seller (d) The disclosures and confirmation required by this section shall be in add1t1on to the disclosure required by Section 2079 14. 2079.18 No selling agent 1n a real property transac!Jon may act as an agent for the buyer only, when the selling agent 1s also ac!Jng as the listlng agent 1n the transaction. 2079.19 The payment of compensation or the obligation to pay compensation to an agent by the seller or buyer 1s not necessanly determinative of a particular agency relat1onsh1p between an agent and the seller or buyer A listing agent and a selling agent may agree to share any compensabon or comm1ss1on paid, or any right to any compensation or comm1ss1on for which an obligation arises as the result of a real estate transaction, and the terms of any such agreement shall not necessarily be determinative of a particular relat1onsh1p. 2079.20 Nothing in this article prevents an agent from selecting, as a cond1t1on of the agent's employment, a specific form of agency relat1onsh1p not specifically proh1b1ted by this article 1f the requirements of Section 2079.14 and Section 2079 17 are complied with. 2079.21 A dual agent shall not disclose to the buyer that the seller 1s willing to sell the property at a pnce less than the listing pnc;e, without the express wntten consent of the seller A dual agent shall not disclose to the seller that the buyer 1s willing to pay a pnce greater than the offenng pnce, without the express wntten consent of the buyer This secbon does not alter in any way the duty or respons1b11ity of a dual agent to any pnnc1pal with respect to confidential information other than pnce 2079.22 Nothing m this article precludes a listing agent from also being a selling agent, and the combination of these functions m one agent does not, of itself, make that agent a dual agent _ 2079.23 A contract between the pnnc1pal and agent may be modified or altered to change the agency relationship at any time before the performance of the act which 1s the object of the agency with the wntten consent of the parties to the agency relat1onsh1p 2079.24 Nothing m this article shall be construed to either d1m1rnsh the duty of disclosure owed buyers and sellers by agents and their associate licensees, subagents, and employees or to relieve agents and their associate licensees, subagents, and employees from liab11ity for their conduct m connection with acts governed by this article or for any breach of a fiduciary duty or a duty of disclosure [] Published and D1stnbuted by REAL ESTATE BUSINESS SERVICES, INC G) a subs1d1ary of the Ca/1fom1a Assoc1at1on of REAL TORS® Reviewed by Date -~ 525 South Virgil Avenue, Los Angeles, Caltfom1a 90020 - AD REVISED 12/14 (PAGE 2 OF 2) ~~:ti~~ DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (AD PAGE 2 OF 2) Produced with 21pform® by 21pLog1x 18070 Fifteen Mile Road, Fraser, M1ch1gan 48026 www zmLornx com City of Arroyo Item 9.j. - Page 12