HomeMy WebLinkAboutRecorded Doc 2009-018 Recording Requested By DOC # 2009-0261198 1312
First American Title Company 05/22/2009 08:00A Fee:NC
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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
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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,
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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.
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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
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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
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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
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(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
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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.
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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
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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);
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(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.
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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.
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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
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economic or otherwise. This Declaration shall be interpreted as
though prepared jointly by both the Declarant and the Agency.
[END OF PAGE]
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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
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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
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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.