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HomeMy WebLinkAboutRecorded Doc 2009-018 Recording Requested By DOC # 2009-0261198 1312 First American Title Company 05/22/2009 08:00A Fee:NC Page 1 of 15 Riverside Resale Recorded in Official Records REQUESTED BY ) County of Riverside RECORDING RE Q Larry W. Ward AND WHEN RECORDED MAIL TO: ) Assessor, County Clerk & Recorder Redevelopment Agency of the 111111 IIII I I IIII II IIII DI 1111 111 I III City of Cathedral City ) 68 -700 Avenida Lalo Guerrero Cathedral City, CA 92234 S R U PAGE SIZE DA MISC LONG RFD COPY Attn: Agency Secretary I EXAM APN: 680-222-021 M A L 465 426 PCOR NCOR SMF ( NCHGf q O Lf IT: CTY UNI (EXEMPT FROM RECORDING FEES PURSUANT TO GOVERNMENT CODE SECTION 27383) DECLARATION OF AFFORDABILITY COVENANTS 044 THIS DECLARATION OF AFFORDABILITY COVENANTS (this "Declaration ") is made on N4 a.1 is , 2009, by Habitat for Humanity of the Coachella Valley, Inc., a California non - profit public benefit corporation (hereinafter referred to as the "Declarant "), with respect to certain real property located in the City of Cathedral City, County of Riverside, California, as more fully described in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property "). WHEREAS, the Redevelopment Agency of the City of Cathedral City (the "Agency ") previously transferred the Property to Declarant for purposes of developing the Property; and WHEREAS, in return for the Agency's conveyance of the Property to Declarant, Declarant has agreed to develop, one (1) detached single- family residential unit consisting of at least one thousand, two hundred eighty square feet (1,280 sf) and four (4) bedrooms (the "Residence "), which shall be reserved for the purchase and occupation by "lower income households" as defined under Health and Safety Code Section 50079.5, and maintained as lower income affordable as provided under Health and Safety Code Section 50052.5, for a term of forty -five (45) years; and WHEREAS, the Declarant desires this Declaration to serve as the instrument to impose said covenants. NOW THEREFORE, the Declarant declares that the Property described herein above are held and will be held, transferred, encumbered, used, sold, conveyed, leased and occupied subject to the covenants, restrictions and limitations set forth in this Declaration, all of which are in accordance with the requirements of the California Community Redevelopment Law. All of the restrictions, covenants and limitations will run with the land and will be binding on all parties having or acquiring any right, title or interest in the Property described above or any part thereof, 1 4 ( t and to any improvements located thereon, and will inure to the benefit of the Agency. Each grantee of a conveyance or purchaser under a contract or agreement of sale covering any right, title or interest in any part of the Property, by accepting a deed or a contract of sale or agreement of purchase, accepts the Property, subject to, and agrees to be bound by all of the restrictions, covenants and limitations set forth in this Declaration. 1. Capitalized Terms and Definitions. All capitalized terms not otherwise defined herein shall have the same meaning ascribed to them by the California Community Redevelopment Law, unless the context clearly indicates a different meaning. For purposes of this Declaration, the following terms shall have the meaning set forth below: Affordable Housing Cost - shall have the meaning set forth in Section 3 below. Allowance Adjustments - shall have the meaning set forth in Section 3 below. 1 Eligible First Loan - shall mean a mortgage issued by Declarant to a Qualified Buyer for purchase of the Property with no interest due during the term of the note evidencing such loan and in accordance with the terms and conditions of a Purchase and Sale Agreement i entered into by and between Declarant and a Qualified Buyer. t Eligible Second Loan - shall mean a "silent second" mortgage issued by the Agency with no principal or interest payments due during the term of this Declaration, except as otherwise provided in the Note evidencing such loan, the Deed of Trust securing such loan, and this Declaration. Gross Income - shall have the meaning set forth in Section 2 below. 1 Home Equity Loan - shall have the meaning set forth in Section 7(c) below. Line(s) of Credit - shall have the meaning set forth in Section 7(b) below. Principle Residence - shall mean the Property occupied by a Qualified Buyer as his or her primary residence. A primary residence is one that is not leased or rented to others for more than thirty (30) days in any calendar year. Qualified Buyers - shall have the meaning set forth in Section 2 below. 1 1 r i 2 E F Purchase Loan - shall have the meaning set forth in Section 7(a) below. Resale Price - shall have the meaning set forth in Section 6 below. Term - shall have the meaning set forth in Section 2 below. �$ 2. Affordability Covenants. The Declarant hereby agrees that the affordability covenants contained in this Declaration shall remain in effect upon the Property for forty -five (45) years from April 21 , 2002 (the "Term ") . The Declarant covenants that the Property shall be sold to, owned, occupied and maintained affordable to lower income families earning not more than eighty percent (80 %) of HUD's Area Median Income for Riverside County ( "AMI "), as adjusted from time to time ( "Qualified Buyers "). Qualified Buyers income shall be calculated on the basis of their "Gross Income ", as defined under Title 25, Section 6914, of the California Code of Regulations, as amended from time to time. In order to ensure compliance with this Declaration in connection with the sale and transfer of each Property, the Declarant and its successors shall obtain a copy of each prospective purchaser's federal income tax return for the taxable year immediately preceding the proposed purchase of the Property, or proposed qualification for purchase of the Property, and current income information such as wage statements or, if the prospective purchaser certifies and declares under penalty of perjury that he or she did not file a federal tax return, other evidence of Gross Income for such year acceptable to the Agency in its sole discretion and current income information such as wage statements, to substantiate that the prospective purchaser meets the eligibility requirements of a Qualified Buyer. In the event the Agency is unable to make a determination that a prospective buyer is a Qualified Buyer based upon the information provided, the prospective purchaser shall be determined not to meet the requirements of a Qualified Buyer and shall be disqualified from purchase. 3. Determining Maximum Property Sales Price. In order to ensure compliance with this Declaration in connection with the sale and transfer of the Property, the Property may not be sold to a Qualified Buyer for a purchase price which results in an annual "Affordable Housing Cost" (as defined below), in excess of one of the following calculations, as applicable: (a) For lower income households whose Gross Income exceeds the maximum income for very low income households and does not exceed seventy percent (70 %) of the AMI, adjusted for family size, the product of thirty percent (30 %) times seventy 3 percent (70 %) of the AMI adjusted for family size appropriate for the unit; or (b) for lower income households that have a Gross Income which equals or exceeds seventy percent (70 %) of the AMI adjusted for family size, Affordable Housing Cost shall not exceed thirty percent (30 %) of the actual Gross Income of the household. The term "adjusted for family size appropriate to the unit ", shall mean a household of five (5) persons in the case of the Residence consisting of four (4) bedrooms, unless the Residence is remodeled resulting in a bedroom count other than four (4) bedrooms; in which case "adjusted for family size appropriate to the unit" shall mean a household of four (4) 1 persons in the case of the Residence consisting of three (3) bedrooms and a household of six (6) persons in the case of the Residence consisting of five (5) bedrooms. Affordable Housing Cost shall include all of the following associated with a Property and shall be calculated on either a monthly or annual basis: 1. Principal and interest payments on an Eligible First Loan ( "PI "); and 2. Any loan insurance fees associated therewith including without limitation private mortgage insurance ( "PMI ") or mortgage insurance premiums ( "MIP "); and 3. Principal and interest payments on an Eligible Second Loan ( "SPI "); and 4. Property taxes ( "Taxes "), calculated as 1.25% of the Property purchase price; and 5. Any applicable Mello -Roos or other special assessments; and 6. A reasonable monthly utilities allowance ( "Utilities Allowance "), based upon the periodic Allowance Adjustments (as provided below); and 7. A reasonable monthly maintenance and repair allowance ( "Maintenance Allowance ") based upon the periodic Allowance Adjustments (as provided below). Allowance Adjustments. To provide an adequate level of service as required under California Code of Regulations, Title 25, section 6920, the Utilities Allowance and Maintenance Allowance shall be established periodically upon the sale of the Property 4 (the "Allowance Adjustments "). At the time of a proposed sale, the monthly Utilities Allowance shall be calculated as the product of the Housing Authority of the County of Riverside's then- published applicable annual "East County housing allowances for tenant furnished utilities and other services" (the "County Standard ") for a four (4)- bedroom residence with the particular type of amenities included in the Residence developed upon the Property (i.e. air conditioning, gas or electric stove, among others, all as identified under the County Standard). At the time of a proposed sale, the monthly Maintenance Allowance shall be recalculated as the product of twenty -five percent (25%) of the then - applicable Utilities Allowance. By way of illustration, if the Utilities Allowance at the time of a proposed sale was one hundred ninety -five dollars ($195), the Maintenance Allowance would be forty -eight dollars and seventy -five cents ($48.75), calculated as $195 multiplied by twenty -five percent (25 %). 4. Reserved. 5. Reserved. 6. First Right of Refusal. Subject only to any first right of refusal to purchase the Property retained by Declarant (as developer of the Property), the Agency shall have a continuing "right of first refusal" to purchase the Property upon the proposed resale by Qualified Buyers at the maximum sales price established by the Affordable Housing Cost (the "Resale Price "). Not less than twenty (20) days prior to the proposed sale, the Qualified Buyer shall notify the Agency of its desire to sell the Property in compliance with this Declaration. Within twenty (20) days of the Agency's receipt of the notice, the Agency shall notify the Qualified Buyer of the Agency's interest in purchasing the Property. If the Agency does not respond to the Qualified Buyer within said period or specifically declines to purchase the Property within such time, the Qualified Buyer may proceed with a sale to new Qualified Buyers at the Resale Price. In the event the Agency elects to purchase the Property, the Qualified Buyer and Agency shall, within twenty (20) days, enter into a purchase agreement for the sale of the Property to the Agency at the Resale Price. The purchase agreement shall identify the terms under which the Property will be sold to the Agency, including without limitation, the Resale Price, periods for property physical, environmental and title inspections and approval which shall be no less that fifteen (15) days, equal sharing of escrow expenses, and an escrow period which shall not exceed sixty (60) days unless otherwise mutually agreed by the parties. The sale shall be contingent upon the Agency's approval of the physical and environmental condition of the Property and condition of title. This Section 6 shall not be construed or understood to confer any 5 rights upon any third parties, including without limitation, a Qualified Buyer's lender, and exists solely for the benefit of the Agency and its assignees. 7. Prohibition on Refinance of Purchase Loan; Prohibition on Home Equity Lines of Credit; Home Equity Loan Restrictions. (a) Prohibition on Refinance of Purchase Loan. Under no circumstances may Qualified Buyers, during the term of this Declaration, refinance the loan(s) used to purchase the Property (the "Purchase Loan "). Qualified Buyers acknowledge and agree that the prohibition on refinancing the Purchase Loan is not an unreasonable restraint on property alienation rights and is necessary in order to ensure that there is sufficient equity maintained in the Property to pay -off loan balances in the event of sale, taking into account the maximum sales price of the Property upon resale as set forth in Section 3 above. (b) Prohibition on Home Equity Line(s) of Credit. Under no circumstances may Qualified Buyers obtain home equity lines of credit secured by deeds of trust or similar security instruments upon the Property (a "Line of Credit "), during the term of this Declaration. Qualified Buyers understand and agree that the prohibition against Lines of Credit is not an unreasonable restraint on property alienation rights and is necessary in order to ensure that sufficient equity is maintained in the Property to pay -off the existing loan balances in the event of sale of the Property, taking into account the maximum sales price of the Property upon resale as set forth in Section 3 above. (c) Home Equity Loan Restrictions. Following a Qualified Buyer's third (3 anniversary of Property ownership, a Qualified Buyer may, with the written approval of the Agency and Declarant, which approval may be withheld in the Agency's and Declarant's sole discretion, obtain a Home Equity Loan (as defined below) secured by the Property, for the purposes of medical expenditures, college tuition expenses, or financial hardship; provided, however; at the time of application, the total of all payments associated with the Property, including the new Home Equity Loan payment, will not exceed an Affordable Housing Cost based upon the then applicable lower income limit and maximum Property sales price set forth in Section 3 above. For purposes of this Section, Home Equity Loan(s) shall mean a fully amortized fixed rate second mortgage loan with a term of up to thirty (30) years, without a prepayment penalty, available from an institutional lender, such as a commercial bank, savings bank, credit union, or similar lender. 6 1 8. Mortgage Lender Acquisition. (a) Upon acquisition of the Property by Declarant through foreclosure action or deed in lieu of foreclosure (collectively, "Foreclosure "), Declarant may retain proceeds from the subsequent sale of the Property, provided that 1) the Agency may recover any amounts due on the Eligible Second Loan to the extent that such funds are available after Declarant recovers its } interest in the Property; and 2) this Declaration remains in effect. (b) This paragraph (b) of this Section 8 exists to accommodate and balance the Agency's interest in maintaining a supply of affordable housing units and the interest of property mortgage lenders ( "Lender(s) ") in selling property acquired through Foreclosure, and shall apply only in an instance where Declarant has sold the Purchase Loan to a Lender. Upon acquisition of the Property by a Lender through Foreclosure, the Lender shall, at least thirty (30) days prior to selling, conveying, transferring or otherwise disposing of the Property, offer to sell the Property to the Agency for a purchase price equal to the original purchase price of the Property paid by the defaulting Qualified Buyer. In the event the Agency elects to purchase the Property, the Agency E and Lender shall open escrow with a mutually agreeable escrow company and shall share equally in escrow related expenses except that Agency shall not pay any expenses customarily paid by sellers in Riverside County, California, such as transfer taxes, a standard CLTA buyers title insurance policy insuring good marketable title to the Property, or any property tax or special assessment pro - rations attributable to Lender's and the defaulting Qualified Buyer's term of ownership. In the event the Agency declines to purchase the Property within thirty (30) days of receipt of a written offer to sell the Property to the Agency as provided herein, the Lender shall be permitted to sell the Property, free of this Declaration, to any third party willing to purchase the Property. In such event, in recognition of the Agency's loss of the Property as an affordable housing unit, any sales proceeds received by a Lender in excess of those amounts due the Lender (including reasonable foreclosure expenses and closing costs), shall be remitted to the Agency concurrently with the close of escrow for the sale. In connection with such sale, the Agency shall cooperate with the Lender in the timely execution of any documents reasonably necessary to terminate this Declaration with respect to the particular Property. 9. Prohibited Transfers. Any sale or transfer of the Property in violation of the terms and conditions of this Declaration is expressly strictly prohibited, shall be null and void, and shall constitute a default of the Qualified Buyer under this Declaration, entitling the Agency to exercise all remedies 7 available at law or in equity, including without limitation, seeking injunctive relief to prevent or enjoin the prohibited transfer and /or damages as provided in this Declaration. In the event that the Agency and Declarant, in their sole election, allow the transfer but seek monetary damages for such prohibited transfer, Qualified Buyers shall be required, to the extent permitted by law, to pay to the Agency the entire amount of the sales price received, which is in excess of the maximum sales price permitted under this Declaration, and less any amounts to be paid to Declarant to repay the First Eligible Loan; provided, however, that nothing herein shall be deemed to limit the Agency's remedy for a prohibited transfer to seeking monetary damages, and the Agency shall be entitled to pursue any other equitable remedy permitted by law, including specific performance or injunctive relief, to prevent or enjoin a prohibited transfer. 10. Occupancy Standards. The Property shall be occupied as the principal residence of Qualified Buyer and for no other purpose. Qualified Buyer shall not enter into agreements for the rental or lease of the Property or otherwise allow for the rental or lease of the same. The maximum occupancy of the Property shall not exceed the maximum occupancy allowed pursuant to the general requirements of the United States Department of Housing and Urban Development, which as of the date of this Declaration, is two persons per bedroom, plus one person. 11. Maintenance of Property. During such time as the Affordability Covenants set forth in this Declaration are in effect, all improvements developed upon the Property, including without limitation, the residences, hardscaping and landscaping, shall at all times be maintained in a neat and orderly condition, good order and repair, consistent with good ownership practices, and in accordance with all applicable Federal, State and local laws. 12. Distribution of Insurance and Condemnation Proceeds. (a) Insurance. In the event of a loss, and if the insurance proceeds are sufficient to reconstruct the improvements on the Property, the insurance proceeds shall be utilized exclusively for reconstruction costs and related costs (such as, but not limited to, temporary housing of Qualified Buyer, etc. as may be covered by insurance policy for the Property). In the event of a loss, and if the insurance proceeds are insufficient to reconstruct the improvements, the proceeds shall be distributed as follows: (i) First, in payment of any outstanding expenses associated with the Property (excluding the Purchase Loan and the Eligible Second Loan); 8 (ii) Second, in payment of the Purchase Loan and the Eligible Second Loan; (iii) Third, to Qualified Buyer in an amount equal to that which would be distributed to Qualified Buyer if Declarant were to exercise is option to purchase; and (iv) Fourth, any remaining amounts shall go to Declarant. (b) Condemnation. In the event of condemnation, if proceeds thereof are distributed to the Qualified Buyer, any surplus of proceeds so distributed remaining after payment of encumbrances on the Property shall be distributed as follows: first, in payment of the Purchase Loan and the Eligible Second Loan; second, to Qualified Buyer in an amount equal to that which would be distributed to Qualified Buyer if Declarant were to exercise is option to purchase; and third, any remaining amounts shall go to Declarant. 13. Events of Default; Enforcement. In the event of a default in the performance or observance of any covenant, agreement or obligation as set forth in this Declaration and, if such default remains uncured for a period of thirty (30) days after notice thereof shall have been given by the Agency to Qualified Buyer, or such longer period as may be approved by the Agency and Declarant in writing in its sole discretion, then the Agency may declare that an Event of Default has occurred hereunder and, in addition to other default remedies provided under this Declaration, may exercise any one or more of the following, at its option: (a) By mandamus or other suit, action or proceeding at law or in equity, require the Declarant or its successors in interest to perform its obligations and covenants hereunder, or enjoin any acts or things which may be unlawful or in violation of the rights of the Agency hereunder; and (b) Take whatever other action at law or in equity may appear necessary or desirable to enforce the obligations, covenants and agreements hereunder. No delay in enforcing the provisions hereof as to any breach or violation shall impair, damage or waive the right against or recover for the continuation or repetition of such breach or violation or any similar breach or violation thereof at any later time or times. Notwithstanding the foregoing, the Agency agrees to meet and confer with Declarant prior to taking any action pursuant to this Section. 9 In the event Declarant determines a Qualified Buyer is in default with respect to any covenants, conditions or restrictions recorded against the Property in favor of Declarant, Declarant shall provide notice of such default at such time notice is provided to Qualified Buyer. Declarant further agrees to meet and confer with the Agency prior to taking any action on such default. 14. Attorneys' Fees. In any legal proceeding to enforce the terms of or restrain a violation of this Declaration, the losing party or parties must pay the attorneys' fees of the winning party or parties in the amount fixed by the court in the proceeding. 15. Amendments. This Declaration may only be amended in writing by an instrument signed by the authorized representative of the Agency or it successor in interest and the then record owner or owners of the Property. 16. Severability. If any provision of this Declaration shall be held invalid, inoperative or unenforceable as applied in any particular case, in any jurisdiction or jurisdictions or in all jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or any Constitution or Statute or rule of public policy, or for any other reason, such circumstances shall not have the effect of rendering the provisions in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatsoever. The invalidity of any one or more phrases, sentences, clauses or sections contained in this Declaration shall not affect the remaining portions of this Declaration or any part hereof. 17. Headings. The section headings are not part of this Declaration and will not affect the interpretation of any provisions hereof. 18. Time of the Essence. In each provision of this Declaration which states a specific amount of time within which the requirements thereof are to be satisfied or are to persist, time shall be deemed to be of the essence. [REMAINDER OF PAGE LEFT INTENTIONALLY] 1 3 10 1 19. Notices. Any notice required to be given hereunder shall be given by personal delivery or by registered or certified mail at the addresses specified below or at such other addresses as may be specified in writing by the parties hereto: To the Declarant: Habitat for Humanity of the Coachella Valley, Inc. PO Box 11738 Palm Desert, CA 92255 If to the Agency: Redevelopment Agency of the City of Cathedral City Civic Center 68 -700 Avenida Lalo Guerrero Cathedral City, CA 92234 Attention: Executive Director With a copy to: Green, de Bortnowsky and Quintanilla 23801 Calabasas Road, Suite 1015 Calabasas, CA 91302 Attention: Charles R. Green Notice shall be deemed given three (3) business days after the date of mailing, or, if personally delivered, when received. A party's address for notice may be changed by giving notice to the other party in the manner set forth above and indicating the new address for notice. 20. Governing Law. This Declaration shall be governed by the laws of the State of California. Any legal action brought under this Declaration must be instituted in the Superior Court of the County of Riverside, State of California, in an appropriate municipal court in that county or in the Federal District Court in the District of California in which Riverside County is located. 21. Legal Advice. Declarant and each Qualified Buyer represents and warrants the following: they have carefully read this Declaration, and in signing this Declaration and /or agreeing to be bound by the same, they do so with full knowledge of any rights which they may have: they have received independent legal advice from legal counsel as to the matters set forth in this Declaration, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Declaration: and, they have freely signed this Declaration and /or agreed to be bound by it without any reliance upon any agreement, promise, statement or representation by or on behalf of the Agency, or its respective agents, employees, or attorneys, except as specifically set forth in this Declaration, and without duress or coercion, whether 11 economic or otherwise. This Declaration shall be interpreted as though prepared jointly by both the Declarant and the Agency. [END OF PAGE] 12 IN WITNESS WHEREOF, Declarant has executed this Declaration on the date first written above, "DECLARANT" HABITAT FOR HUMANITY OF THE COACHELLA VALLEY, a California non- profit public benefit corporation By: ! ,1,vy/ 4 Lance J. Barney r 17i,1 Valerie Van Winkle 13 EXHIBIT "A" DESCRIPTION OF PROPERTY Legal Description of Property: The southern one -half of Lot 50, Ramon Palms NO. 1, as shown by map on file in Book 21, Page 44 of Maps, Official Records of Riverside County, California. Street Address of Property: 32370 Pueblo Trail, Cathedral City, CA 92234 APN: 680 - 222 -021 ATTACHMENT NO. 1 TO EXHIBIT "C -1" - Page - 1 1 1 f CALIFORNIA ALL - PURPOSE ACKNOWLEDGMENT State of California ) County of Riverside ) On May 15 2009 , before me, Judith Rogers, a NOtary PUblic Date Here Insert Name and Title of the Officer Personally appeared Lance J. Barney and Valerie Van Winkle * * * * Name(s) of Signer(s) who 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. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. jiat JUDITH ROGERS WITNESS my hand and official seal. Commission # 1 753954 f Notary Public - California z Z Riverside County '- 3 _ , _ _ _ MyComm ExpiresJu124, 201_ . Signature 4 . >L A Li b„,...4 ,A I Place Notary Seal Above OPTIONAL This acknowledgement is attached to 'Declaration of Affordability Covenants' dated May 15, 2009.