HomeMy WebLinkAboutHMP 07-02; MUROYA SUBDIVISION; Habitat Management Permit (HMP)OPEN SPACE OWNERSHIP, MANAGEMENT AND FUNDING AGREEMENT
THIS OPEN SPACE OWNERSHIP, MANAGEMENT AND FUNDING AGREEMENT C'Agreement")
is made and entered into effective as of April 4, 2012 (the 'Effective Dale") by TAYLOR MORRISON OF
CALIFORNIA., LLC, a California limited liability company ("Taylor Morrison"), with reference to the folloWing:
RECITALS:
A As of the Effective Date, Taylor Morrison was the owner of the real property legally described
in Exhibtt "/J.:', located in the City of Carlsbad (the "Property"). This Agreement affects only Lot 4 of the
Property. Nothing in thiS Agreement shall be construed as affecting any other lots in or portions of the
Property.
8. Taylor MorriSon has received approval from the City of Carlsbad ("City") for the Property for
a residential development project known as Muroya Property, Carlsbad Tract 06-27 (°Projecr). City
approval of the Project is contained in City Planning Commission Resolution No. 6686, adopted on April 7,
2010.
C. Condition No. 9 of Planning Commission Resolution No. 6690, provides as follows:
'14. Prtor to issuance of a grading pennit or clearing of any habitat, whichever occurs first,
the Developer shall take the following actions to the satisfaction of the Planning Director
in relation to the open space lots which are being conserved for natural habitat in
conformance with the City's Habitat Management Plan:
a. Select a conservation entity, subject to approval by the City, which possesses
qualifications to manage the open space lot(s) for conservation purposes.
b. Prepare a Property Analysis Record (PAR) or other method acceptable to the City
for estimating the costs of management and monitoring of the open space lot(s) in
perpetuity in accordance with the requirements of the North County Mulflple
Habitats Conservation Plan and the City's Open Space Management Plan.
c. Based on the results of the PAR, provide a non-wasting endowment or other
financial mechanism acceptable to the Planning Director and conservation entity, if
any, in an amount sufficient for management and monitoring of the open space
lot(s) in perpetuity.
d. Record a Conservation Easement over the open space lots.
e.· Prepare a Preserve Management Plan which will ensure adequate management
of the open space lots in perpetuity."
D. Taylor Morrison has selected a conservation entity, the San Diego Habitat Conservancy, a
nonprofit organization ("SDHC"), as required by Condition No. 9, paragraph (a), which is willing to take and
has taken fee title to the open space lot designated as Lot 4 on the Property. The parties wish to provide for
the future transfer of the open space lot and non-wasting endowment to SDHC, and provide for the
management of the open space lot and non-wasting endowment, pursuant to Condition No. 9, paragraph
(c). This Agreement is entered into to satisfy Condition No. 9.
E. Lot 4 of the Property will be managed, maintained, and preserved in accordance with the
Preserve Management Plan prepared by Dudek, November, 2011 (hereinafter the "PMP') incorporated
herein as if set forth in full. Taylor Morrison has paid the fees and costs necessary to create 0.87 acres ot
Southern Maritime Chaparral and 0.05 Acres of Southern Mixed Chaparral on the Property and to
maintain ii for a five (5) year period in accordance with the Mitigation Plan prepared by Dudek in January,
2012 (hereinafter the "Restoration Plan").
F. Taylor Morrison has caused preparation of the Property Analysis Record (PAR) for Lot 4.
The PAR. attached hereto as Exhibit ·a· and incorporated herein by reference, estimates the costs of
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management and monitoring of Lot 4 of the Property in perpetuity. The PAR estimates that a non-wasting
endowment in the amount of $314,867, plus emergency and legal costs of $12,594.68, for a total of
$327,461.68, will be sufficient to provide such management and monitoring (the "Endowment Funds").
Habitat Restoration Specialists (HRS), the designated preserve manager, will perform the first three (3)
years of tasks contained in Sections 9-14 of the PAR under a contract with Taylor Morrison. SDHC has
accepted fee title to Lot 4 and taken distribution of the Endowment Funds. The City has not accepted the
irrevocable offer of dedication ("IOD") and will not perform the tasks described in the PAR, unless the
provisions of Paragraph 1 O(g) apply.
NOW, THEREFORE, Taylor Morrison declares as follows:
1. Declaration of Restrictive Covenants. Taylor Morrison has recorded a Declaration of
Restrictive Covenants ("Restrictive Covenant") on January 10, 2012 as Document No. 2012-0012474 in the
Official Records of San Diego county, a conformed copy of which is attached hereto as Exhibit "C", over Lot
4 of the Property as legally described in Exhibit "D" attached hereto ("Conservation Land").
2. Irrevocable Offer of Dedication. Taylor Morrison has offered an irrevocable offer of
dedication (IOD) of fee title to the Conservation Land to the City (in the form attached hereto as Exhibit
:.E:), and the City has not accepted such IOD because SDHC has accepted fee title to the Conservation
Land.
3. Taylor Morrison's Obllgations. Taylor Morrison shall have no obligation to maintain,
repair or construct improvements upcn or perform any work in connection wi!h the Conservation Land or
the PAR after ownership and the obligation of maintenance of the Conservation Land have been transferred
to SDHC, except to the extent the following work has not been completed:
a. Preparation of the surveys and reports and performance of the maintenance
listed in Sections 9-14 of the PAR; and in accordance with the approved Preserve Management Plan
(Dudek), dated November, 2011.
b. Installation of fencing, in accordance with the approved plans and the Mitigation
Plan for the Conservation Land.
4. Management of Conservation Land. Subject to Paragraph 7 below, Taylor Morrison
(and SDHC after Taylor Morrison's ·completion of the 3-year inijial management period as set forth in
Sections 9-14 of the PAR and the 5-year period under the Restoration Plan), agrees to perform or cause to
be performed the following management and preservation activities within the Conservation Land in
accordance with the Restrictive Covenant:
(a) Remove trash and debris on an as needed basis;
(b) Post and maintain signs at the perimeter of the Conservation Land designating
the Property as "Habitat Conservation Area, No Trespassing" or similar descriptions that inform persons of
the nature of the restrictions on the Property;
(c)
Conservation Land.
Take actions reasonably necessary to prevent unauthorized trespass into the
(d) Monitor and control the encroachment of invasive and exotic weeds into, and
remove invasive and exotic weeds from the Conservation Land;
(e) All other management, maintenance surveys, reporting, and other work
described in Sections 9-14 of the PAR;
(f) Contract with HRS or another preserve manager acceptable to the parties or their
successors to perform the fo!lowing technical services no less lrequendy than the stated intervals:
(i) Site maintenance inspection once quarterly;
(ii) Vegetation assessment once every year;
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(iii) Vegetation mapping once every five years;
(iv) Sensitive plant species mapping once every three years;
(v) Gnatcatcher survey conducted according to U.S. Fish and Wildlife Service
protocol once every three years;
(vi) Removal of non-native plant material once every year, in accordance with
the recommendations of the qualified biologist; and
(vii) Annual report preparation.
To ensure continuity of the selected preserve manager, a contract for a term not to exceed three
(3) years may be entered Into by and between the selected preserve manager and Taylor Morrison and
subsequently SDHC which shall be terminable by SDHC after not longer than one (1) year without costs,
penalty, or other obligation on ninety (90) days written notice of termination to the selected preserve
manager. In the event that SDHC seeks to terminate a preserve manager, it must notify the City of Its
desire to do so and obtain approval of a replacement preserve manager, if required by the City, prior to
initiating termination proceedings.
If, and only if, the City accepts the 1OD, the City will perform, or cause to be performed, all of the
work and tasks described in Section 9 of the PAR and will assume responsibility for the proper handling
and investment of the Endowment Funds described in Paragraph 5, below.
5. Estabttshment of Endowment. As of the Effective Date, Taylor Morrison has
established the Endowment Fund tor management and maintenance of the Conservation Land in perpetuity.
The Endowment Fund is in the total amount of $327,461.68, which consists of emergency and legal costs of
$12,594.68 and an endowment principal of $314,867. Based on a rate of return of 4.5%, the $314,867
endo'M!lent amount would earn approximately $14.169.02 in interest per year. Taylor Morrison shall, within
thirty (30) days after the City's acknowledgement of this Agreement, provide the City a copy of the
statement showing the Endowment Fund has been released to SDHC.
6. Management of Endowment The Endowment Fund and interest earned thereon shall
be maintained in a separate account and shall be used only for funding the management and preservation
obligations set forth In Paragraph 4 above and for managing the Endowment.
The endowment principal of $314,867 shall be set aside, held, invested and disbursed In
trust solely for the purposes of protecting the City's rights and preserving the Conservation Values of the
Property under the Reslrictive Covenant In perpetuity. The City shall have the right to review and approve
the terms of the operating agreement wtth SDHC, and shall be a third party beneficiary of the operating
agreement with the right to review and approve any amendments.
Taylor Morrison (and subsequemly SDHC upon transfer of the Endowment Funds and any
earnings on this plincipal not used lo pay for work authorized by the PMP or PAR) shall have the fiduciary
duty to ensure that the Endowment Funds held In trust for Lot 4 are properly managed. SDHC's investment
policy (as may be amended or modified as prudent investment strategy changes from time to time, and
which present form is attached hereto as Exhibit "G") shall, upon its acceptance of fee title to Lot 4 and the
transfer of the Endowment Funds, apply as to SDHC's investment of the Endowment Funds.
If, and only if, SDHC no longer owns fee title to Lot 4 and releases possession or control of
the Endowment Funds, the following principles of fiduciary duty shall apply to the investment of the
Endowment Funds:
(a) There shall be no commingling of the endowment funds with other funds.
(bl The owner of the Conservation Land shall have the duly of loyalty and shall not
use the Endowment Funds for their own personal benefit.
(c) The owner of the Conservation Land shall act as a prudent investor of the
Endowment Funds. Investments by the owner of the Conservation Land of each
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of the following investments are examples of what Is considered a prudent
investment
(1) United States treasury notes, bonds, bills, or certificates of Indebtedness
or those for which the faith and credit of the United States are pledged for
the payment of principal and interest; and
(2) Registered state warrants or treasury notes or bonds of the State of
California, including bonds payable solely out of revenues from a
revenue-producing property owned, controlled, or operated by the state or
by a department, board, agency, or authority of this state having an "AA"
or higher rating by Moody's Investors Service, Inc., or Standard & Poor's
Corporation; and
(3) Bonds, notes, warrants, or other evidences of indebtedness of any local
agency within the State of California, including bonds payable solely out
of the revenues from a revenue-producing property owned, controlled, or
operated by the local agency or by a department, board, agency, or
authotity of the local agency having an "AA" or higher rating as provided
by Moody's Investors Service, Inc., or Standard & Poor's Corporation; and
(4) Insured certificates of deposit issued by banks or credit unions; and
(5) Money market funds Issued by diversified management companies
having at least five years of experience managing money market funds
with assets under management in excess of $500,000,000 registered by
the Securities and Exchange Commission under the Investment
Company Act of 1940 (15 U.S.C. sec. 80 a-1, et seq.); and
(6) Mutual funds that Invest in tax exempt bonds issued by any governmental
agency having an "AA" or higher rating by etther Moody's Investors
Service, Inc., or Standard & Poor's Corporation.
The owner of the Conservation Land shall not delegate the responsibility for
managing the funds to a third party, but may delega1e authority to invest the Endowment Funds to an
investment advisor w1th the oversight of the owner of the Conservation Land. The owner of the
Conservation Land shall act wtth prudence when delegating authority and in the selection of investment
advisors. No portion of the remaining principal amount of the Endowment Funds in the sum of $314,867
shall be expended without prior authorization from the City. Taylor Morrison shall be responsible for all
costs of management and preservation of the Conservation Land until conveyed to SDHC. SDHC shall be
authorized to expend earnings from the remaining endowment fund of $314,867 to pay for work required by
the approved PMP or PAR. The owner of 1he Conservation Land shall have an annual audit of the
endowment performed by a licensed CPA, and shall submit the auditor's written report to the City upon
request.
From and after the date of transfer of the principal of $314,867 by Taylor Morrison
to SDHC, and any remaining earnings on it after payment of fees or costs for work authorized by the PMP or
PAR to SDHC, SDHC will become solely responsible for the proper management and Investment of the
Endowment Funds as provided in this Agreement.
7. Transfer of ownership and Obligations. As of the Effective Date, Taylor Morrison has
established a common in1erest development project on the Property and the homeowners association
created will manage the Project and own and maintain certain portions of the Property, except the
Conservation Land. Because the City has not accepted the IOD, Taylor Morrison shall have the right without
City's consent to transfer to SDHC the following: (i) fee tttle to the Conservation Land; (ii) Taylor Morrison's
management and preservation obligations under Paragraphs 4 and 6 above; and (iii) the Endowment
Funds. Upon SDHC's express assumption of Taylor Morrisons' obligations under Paragraphs 4 and 6 above
and Paragraphs 8 and 11 below. Taylor Morrison shall be fully and forever released and discharged tram any
and all obligations under Paragraphs 4, 6, 8 and 11 of this Agreement that arise after the assignment and
shall have no further obligations under Paragraph 4, 6, 8 or 11.
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8. Transfer of Endowment to City. There are lwo procedures where the Endowment
Funds can be transferred to the City. The procedures include the City accepting the IOD for the
Conservation Land or by action of the City Council. They are described further below:
Within thirty (30) days after receipt of notice from the City that the City has accepted the
IOD. the then-owner of the Conservation Land (i.e. Taylor Morrison or SDHC) shall cause the entire
Endowment Funds to be transferred lo the City or its designee.
Within thirty (30) days after receipt of notice from the City that the City Council has
directed that the Endowment· Funds be transferred. the then-owner of the Conservation Land (i.e. Taylor
Morrison or SDHC) shall cause the entire Endowment Funds to be transferred to the City or Its designee.
All costs associated with the transfer will be borne by the Transferor (i.e. Taylor Morrison or SDHC).
9. Security. T ayior Morrison deposited the Endowment Funds in the amount of
$327,461.68 into an escrow account (No. 389567) with First American TiUe Company, with instructions
for the release of such funds, plus earnings, upon the authorization of T ayior Morrison and SDHC.
10. Enforcement by City,
(a) Notice of Violation. If City, its successors or assigns determines that the owner
of the Conservation Land Is in violation of the tem,s of this Agreement or that a violation is threatened, City
may demand the cure of such violation. In such a case, City shall issue a written notice to the owner of
the Conservation Land (hereinafter "Notice of Violation") informing the owner of the Conservation Land
of the actual or threatened violations and demanding cure of such violations
(b) Time to Cure. The owner of the Conservation Land shall cure the noticed
violations within fifteen (15) days of receipt of said Notice of Violation from City. If said cure reasonably
requires more than fifteen (15) days, the owner of the Conservation Land shall, within the fifteen (15) day
period submit to City for review and approval a plan and time schedule to diligently complete a cure. The
owner of the Conservation Land shall complete such cure In accordance with the approved plan. If the
owner of the Conservation Land disputes the Notice of Violation, it shall issue a written notice of such
dispute to City within fifteen (15) days of receipt of written Notice of Violation.
(c) Failure to Cure. If the owner of the Conservation Land fails lo cure the noticed
violations within the lime period described In Paragraph 10(b) above or Paragraph 10(d)(ii) below, City
may bring an action at law or in equity in a court of competent jurisdiclion to enforce compliance by the
owner of the Conservation Land with the terms of this Agreement. In such action, the City may:
(i) Recover any damages to which City may be entitled for violation by the
owner of the Conservation Land of the terms of this Agreement, subject to the limitations in
Paragraph 10(g) and Paragraph 10(h) below. City shall first apply any damages recovered to the
cost of undertaking any corrective action on the Conservation Land.
(ii) Enjoin the violation, ex parte If necessary, by temporary or permanent
injunction without the necessity of proving either actual damages or the inadequacy of otherwise
available legal remedies.
(iii) Obtain other equitable relief, including, but not limited to, the restoration
of the Conservation Land to the condition in which ii existed prior to any such violation or injury.
(d) Notice of Dispute. If the owner of the Conservation Land provides City with a
Notice of Dispute, as provided herein, City shall meet and confer with the owner of the Conservation
Land at a mutually agreeable place and time, not to exceed thirty (30) days from the date that City receives
the Notice of Dispute. City shall consider all relevant information concerning the disputed violation provided
by the owner of the Conservation Land and shall determine whether a violation has in fact occurred and, if
so, determine whether the Notice of Violation and demand for cure Issued by City is appropriate in light of
the violation.
(i) City shall use the following principles in making a determination:
(1) Management activities shall be chosen for their long-term
benefits to the Conservation Land's "Conservation Values" (as defined In the Restrictive
Covenant) rather than for short-term benefits;
(2) Management activities that benefit habitat protection shall be
chosen in favor of management activities designed to benefit individual species, except
where State or federally listed species are at issue;
(3) Habitat maintenance is of primary importance in protecting the
long-term Conservation Values of the Conservation Land;
(4)
order of preference:
Management activities shall be chosen according to the following
i) Preventative actions shall be taken to avoid additional Impact;
ii) Natural restoration shall be used if appropriate, based on the
magnitude of the Impact, the impacts on listed or sensitive species, and the
estimated time for recovery to occur;
iii) Active restoration shall be . required only where there are
potential severe, long-term impacts to the Conservation Land's Conservation Values,
or where highly sensitive species are impacted.
(ii) If, alter reviewing the owner of the Conservation Land's Notice of Dispute,
conferring with the owner of the Conservation Land and considering all relevant information related
to the Violation, City determines that a violation has occurred. City shall give the owner of the
Conservation Land notice of such determination in writing. The owner of the Conservation Land shall
cure the noticed violations within fifteen ( 15) days of receipt of said written notice from City. If said
cure reasonably requires more than fifteen (15) days, the owner of the Conservation Land shall, within
the fifteen (15) day period submit to City for review and approval a plan and lime schedule to diligently
complete a cure. The owner of the Conservation Land shall complete such cure in accordance with
the approved plan.
(e) Conflicting Notices of Violation.
(i) If the owner of the Conservation Land receives a Notice of Violation from
City that Is in material conflict with one or more prior written Notices of Violation that have not yet
been cured by the owner of the Conservation Land such that the conflict makes it impossible for the
owner of the Conservation Land to carry out a cure consistent with all prior active Notices of
Vtolation, the owner of the Conservation Land shall give written notice to the City within fifteen (15)
days of receipt of such conflicting Notice of Violation. A valid Notice of Conflict shall describe the
conflict with specificity, including a description of how the conflict makes compliance with all active
Notices of Violation impossible. The failure of the owner of the Conservation Land to issue a valid
Notice of Conflict within 15 days of receipt of a conflicting Notice of Violation shall result in a waiver of
the owner of the Conservation Land's ability to claim a conflict.
(ii) Upon issuing a valid Notice of Conflict to the City, as described above,
the owner of the Conservation Land shall not be required to carry out the cure described in the
conflicting Notices of Violation until such time as the City issues a revised Notice of Violation
making all active Notices of Violation consistent. Upon receipt of a revised, consistent Notice of
Violation, the owner of the Conservation Land shall carry out the cure recommended in such notice
within the time periods described in Paragraph 10(b) above. Notwithstanding Paragraph 10(!), failure
to cure within said time periods shall entitle City to the remedies described in Paragraph 10(c).
(iii) This Paragraph 10(e) shall not apply to Paragraph 10(f) below.
(f) Immediate Action. If City determines that circumstances require immediate action
to prevent or mitigate significant damage to the Conservation Values of the Conservation Land, the City may
immediately pursue all available remedies, including injunctive relief, available pursuant to both this
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Agreement and state and federal law after giving the owner of the Conservation Land at least twenty-four (24)
hours written notice before pursuing sueh remedies. So long as such twenty four (24) hour notice is given,
City may immediately pursue all available remedies without waiting for the expiration of the time periods
provided for cure or notice of dispute as described in Paragraph 10(b) and Paragraph 10(e) above. The
rights of City under this paragraph apply equally to actual or threatened violations of the terms of this
Agreement The parties agree that the remedies at law for the City for any violation of the terms of this
Agreement are Inadequate and that the City shall be entitled to the Injunctive relief described In this
paragraph, both prohibitive and mandatory, In addition to such other relief to which City may be entfiled,
including specific performance of this Agreement, without the necessity of proving either actual damages
or the inadequacy of otherwise available legal remedies. The remedies described in this paragraph shall be
cumulative and shall be in addition to all remedies now or hereafter existing at law or in equity, Including,
but not limited to, the remedies set forth In Civil Code Section815, et seq.
(g) Violation by SDHC. If a court of competent jurisdiction determines that SDHC, as
a subsequent owner of the Conservation Land, has violated any term of this Agreement
(I) Liability for damages shall be llmtted to acts or omissions covered by
SDHC'S general liability insurance policy to the coverage limits of the policy, except as described
in Paragraph 10(g)(iii) below;
(ii) Endowment Funds shall not be used to pay any damages;
(iii) If a violation arises from an intentional act by SDHC, SDHC shall be
liable for the full extent of damages resulting from the violation. even if beyond the limits of any
Insurance policy;
(Iv) In lieu of monetary damages, City may accept the IOD and
management responsibility of the Conservation Land,
(v) This Paragraph 10(g) shall only be applicable to SDHC.
(h) Acts Beyond Control of the Owner of the Conservation Land. Nothing contained in
this Agreement shall be construed to entitle City to bring any action against the owner of the Conservation
Land or make any claJm on the owner of the Conservation Land's insurance policy for any injury to or
change in the Conservation Land resulting from:
(i) Any cause beyond the control of the owner of the Conservation Land
and any acts of nature, including without limitation, fire, flood, storm, ground shaking,
earthquakes, earth movement, lightning, windstorms or any other event of nature; or
(Ii) Any prudent action taken by the owner of the Conservation Land, under
emergency conditions to prevent, abate, or mitigate significant injury to persons and/or the
Conservation Land resulting from such causes;
(iii) Any activities or actions permitted or required by the PMP, the
Restoration Plan or the PAR;
(iv)
representatives;
Acts by City or its employees, directors, officers, agents, contractors, or
(V) Acts of third parties (including any governmental agencies) that are
beyond the control of the owner of the Conservation Land, so long as the owner of the
Conservation Land takes reasonable steps to prevent prohibited uses of the Conservation Land.
Notwithstanding the foregoing, the owner of the Conservation Land must obtain any applicable
governmental permits and approvals for any activity or use permitted by this Agreement, and undertake any
activity or use in accordance with all applicable federal, state, local and administrative agency statutes,
ordinances, rules, regulations, orders or requirements.
(i) Enforcement Discretion. Enforcement of the terms of this Agreement shall be at
the discretion of City. Any forbearance by City to exercise rights under this Agreement in the event of any
breach of any term of this Agreement shall not be deemed or construed to be a waiver by City of such term
or of any subsequent breach of the same or any other term of this Agreement or of any of the rights of City
under this Agreement. No delay or omission by City in the exercise of any right or remedy upon any breach
by the owner of the Conservation Land shall impair such right or remedy or be construed as a waiver.
11. Hold Harmless, The owner of the Conservation Land shall hold harmless, protect and
indemnify City and its directors, officers, employees, agents, contractors and representatives, and the heirs,
personal representatives, successors and assigns of each of them {each, an "Indemnified Party", and
collectively, "Indemnified Parties") from and against any and all liabilities, penallies, costs, losses, damages,
expenses (Including without limitation reasonable attorneys' fees and experts' fees), causes of action,
claims, demands, orders, liens or judgments (each, a "Claim", and collectively, "Claims"), artsing from or in
any way connected with: (i) injury to or the death of any person, or physical damage to any property, resulting
from any act, omission, condition or other matter related to or occurring on or about the Conservation Land,
regardless of cause, except that this Indemnification shall not apply to Indemnified Parties with respect to
any Claim due solely to the negligence of City or any of its employees; and (ii) the existence or
administration of this Agreement. If any action or proceeding is brought against any of the Indemnified
Parties by reason of any such Claim, the owner of the Conservation Land shall, at the election of and
upon written notice from City, defend such action or proceeding by counsel reasonably acceptable to City
or reimburse City for attorneys' fees in defending the action or proceeding.
12. Notices. Unless otherwise specifically provided herein, all notices, demands or other
communications given hereunder shall be in writing and shall be deemed to have been duly delivered upon
personal delivery or as of the second business day after mailing by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to Taylor Morrison, to:
If to City, to:
TAYLOR MORRISON OF CALIFORNIA, LLC
8105 Irvine Center Drive, Suite 1450
Irvine, CA 92618
Attention: April Tomillo
Carlsbad City Clerk's Office
1200 Carlsbad Village Drive
Cansbad, CA 92008
Fax: (760) 720-6917
or to such other address or to such other person as any party will designate to the others for such purpose
In the manner hereinabove set forth.
13. Termination. Upon acceptance of the IOD by the City and transfer of the Endowment
to the City pursuant lo Paragraph 8 above, this Agreement shall terminate, and neither party shall have any
further rights, duties or obligations under this Agreement.
14. Memorandum. At the request of City, the parties shall execute and acknowledge a
memorandum of this Agreement in the form attached hereto as Exhibit "F", which City may, at its option,
have recorded in the Official Records of San Diego County, California.
15. Miscellaneous.
(a) Entire Agreement. This Agreement contains the entire Agreement between the
parties with respect to the matters set forth herein, and supersedes all prior discussions, negotiations,
understandings or contemporaneous agreements (whether oral or written) between the parties with respect
to the matters set forth herein.
(b) Amendment. This Agreement may be modified only in a writing signed by both
parties.
(c) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit to the parties and their respective heirs, personal representatives, successors and assigns,
(d} Severability. The invalidity or unenforceability of any provision of this
Agreement, as determined by a court of competent jurisdiction, shall in no way affect the validity or
enforceability of any other provision hereof, unless a party's material consideration thereby fails.
(e} Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
(f} Counterparts. The parties may execute this Agreement in two or more
counterparts, each of which shall be deemed an ·original, but all of which, taken together, shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be effective as of the
date first above written.
Taylor Morrison: TAYLOR MORRISON OF CALIFORNIA, LLC
BY:
, 2013
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EXHIBIT "A"
Legal Description of Property
LOTS I, 3, 4 AND 5 OF CARLSBAD TRACT NO. 06-27, MUROYA PROPERTY, IN THE
CITY OF CARLSBAD. COUNTY OF SAN DIEGO, STATE OF CALIFORl'-UA,
ACCORDING TO MAP THEREOF NO. 15846, FILED IN TIIB OFFICE OF THE SAN
DIEGO COUNTY RECORDER, NOVEMBER 2, 2011, DOCUMENT NO. 20II-0583227 OF
OFFICIAL RECORDS.
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EXIDBIT "B"
Property Analysis Record (PAR) (attached)
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EXHIBIT "C"
Declaration of Restrictive Covenant (attached)
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EXHIBIT "D"
Legal Description of Conservation Land
LOT 4 OF CARLSBAD TRACT NO. 06-27, MUROY A PROPERTY, IN THE CITY OF
CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO
MAP THEREOF NO. 15846, FILED IN THE OFFICE OF THE SAN DIEGO COUNTY
RECORDER, NOVEMBER 2, 2011, DOCUMENT NO. 2011-0583227 OF OFFICIAL
RECORDS.
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EXIDBIT "E"
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Carlsbad City Clerk's Office
1200 Carlsbad Village Drive
Carlsbad, CA 92008-1949
Documentary transfer tax is$ -0-[6.C §6103]
[X] Computed on full value of property conveyed, or
SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY
[ ] Computed on full value less value ofliens and encumbrances remaining at time of sale or transfer.
[ ] Unincorporated area or [X] City of Carlsbad.
IRREVOCABLE OFFER TO DEDICATE REAL PROPERTY
Re: IOD for City of Carlsbad Planning
Commission Resolution No. 6686 (CT 06-27)
APN Lot 4 of Carlsbad Tract No. 06-27 as shown
on Map No. 15864 filed in the office of
the San Diego County Recorder on November 2,
2011.
TAYLOR MORRISON OF CALIFORNIA, LLC, a California limited liability company
(hereinafter designated "Grantor"). the owner of Lot 4 of the real property as more particularly
described on Exhibit "A" attached hereto and incorporated herein by reference (the "Property"),
hereby grants this IRREVOCABLE OFFER TO DEDICATE the Property (Lot 4) to the CITY
OF CARLSBAD, a California municipal corporation (hereinafter collectively designated
"Grantee"), its successors and assigns, for fee title to the Property for open space and habitat
conservation purposes pursuant to the Grantee's Planning Commission Resolution No. 6686 (CT
06-27).
IN WITNESS WHEREOF, the Gran tor has caused this Irrevocable Offer to Dedicate Real
Property to be executed this ____ day of ________ _,-----'
TAYLOR MORRISON OF CALIFORNIA, LLC
BY: Taylor Morrison Services, Inc.
By: _____________ _
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On _________ before me, _________ notary public, personally
appeared ______________ __, 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.
Witness my hand and official seal.
Signature of Notary
-15-
EXHIBIT "A"
Legal Description of Conservation Land
LOT 4 OF CARLSBAD TRACT NO. 06~27, MlJROYA PROPERTY, IN THE CITY OF
CARLSBAD, COUNlY OP SAN DIEGO, STATE OF CALIFORNIA. ACCORDING TO
MAP THEREOF NO. 15846, Pll.,ED IN THE OFFICE OF THE SAN DIEGO COUNTY
RECORDER, NOVEMBER 2, 2011. DOCUMENT NO. 2011~0583227 OF OFFICIAL
RECORDS.
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EXHIBIT "F"
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Carlsbad City Clerk's Office
1200 Carlsbad Village Drive
Carlsbad, CA 92008
SPACE ABOVE nns LINE FOR RECORDER'S USE ONLY
MEMORANDUM OF
OPEN SPACE OWNERSHIP, MANAGEMENT AND FUNDING AGREEMENT
This Memorandum of Open Space Ownership, Management and Funding Agreement
("Memorandum") is made and entered into as of March 29, 2012 by and between TAYLOR
MORRISON OF CALIFORNIA, LLC, a California limited liability company (''Taylor
Morrison") and the City of Carlsbad, a municipal corporation (hereinafter the "City").
A. Taylor Morrison is the owner in fee simple of approximately 19.35 acres of land
located in the City of Carlsbad, County of San Diego, State of California legally described in
Exhibit "A", attached hereto and incorporated herein by reference (the "Property").
B. Taylor Morrison has obtained approval from the City of a final subdivision map
for the Property that permits the development of 37 residences and 5 lots on the Property. The
second of these open space lots, designated as Lot 4 on the final map has been set aside and
preserved as open space for the long term conservation and preservation of habitat and species.
C. On April 4, 2012 Taylor Morrison executed that certain written agreement entitled
"OPEN SPACE OWNERSHIP, MANAGEMENT AND FUNDING AGREEMENT" which
specified the rights and obligations of Taylor Morrison as it relates to the conservation and
preservation of Lot 4 only (hereinafter the "Agreement").
D. The purpose of this Memorandum is to summarize some of the basic terms
contained in the Agreement and to reflect these terms of record with the understanding that this
Memorandum does not contain all of the terms of the Agreement. A full and complete copy of
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the Agreement is on file with the City Clerk of the City and available for review through the City
Clerk's office. The entire Agreement must be reviewed to understand all terms of the
Agreement.
C-O-V-E-N-A-N-T-S
1. Effect of Agreement on Title. The Agreement affects only Lot 4 of the Property.
The Agreement does not affect title to Lots 1-3 and 5 as shown on the Final Map for the
Property.
2. Summary of Agreement Terms. Lot 4 of the Property will be managed,
maintained, and preserved in accordance with the Preserve Management Plan prepared by Dudek
in November, 2011 (hereinafter the "PMP") incorporated herein as if set forth in full. Taylor
Morrison has agreed to pay fees and costs necessary to create 0.87 acres of Southern Maritime
Chaparral and 0.05 Acres of Southern Mixed Chaparral on the Property and to maintain it for a
five (5) year period in accordance with the Restoration Plan prepared by Dudek in May 2011 (the
"Restoration Plan"). The Property Analysis Record ("PAR") has been prepared for Lot 4 that
estimates the cost of management and monitoring of Lot 4 of the Property io perpetuity. Taylor
Morrison has agreed to pay a non-wasting endowment in the amount specified io this approved
PAR.
Taylor Morrison granted the City a Restrictive Covenant over Lot 4 of the Property as
legally described in Exhibit "B" attached hereto. ("Conservation Land"). Taylor Morrison has
also agreed to grant to the City an irrevocable offer of dedication ("IOD") of fee title to the
Conservation Land in the fonn attached to the Agreement. Under the terms of the Agreement,
the Conservation Land will be transferred to the San Diego Habitat Conservancy, a nonprofit
organization, who will be responsible for perfonning management and preservation activities as
specified in the Agreement unless the City accepts the IOD. The City has the right to require
transfer of the endowment to tl1e City on thirty (30) days written notice to the then owner of the
Conservation Land as provided in paragraph 8 of the Agreement. The City has the separate right
to enforce the Agreement as set forth in paragraph 10 of the Agreement. All tenns of the
Agreement are incorporated herein by reference as if set forth io full. A full copy of the
Agreement and its terms may be obtained from the City Clerk of the City.
3. Primacv of Agreement. Nothing contaioed in this Memorandum shall be
construed as arnendiog or alteriog any of the terms of the Agreement. This Memorandum is
merely iotended to provide notice in the public record of the existence of the Agreement. The
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latest executed version of the Agreement must be reviewed to properly determine all terms and
provisions contained in the Agreement.
4. Recordation of Memorandnm. The City shall have the right to record this
Memorandum at any time and upon such recording this Memorandum shall be reflected as a
matter of title record for Lot 4 of the Property.
IN WITNESS WHEREOF, the parties have executed this Memorandum as of August 13,
2013.
TAYLOR MORRISON OF CALIFORNIA, LLC
BY: Taylor Morrison Services, Inc.
BY:
City of Carlsbad, a municipal corporation
BY:
Sandra Holder, Community Development Director
APPROVED AS TO FORM:
Ronald R. Ball, City Attorney
BY:
Assistant City Attorney
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
On _________ before me, _________ notary public, personally
appeared--------------~ 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 PENAL TY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
Witness my hand and official seal.
Signature of Notary
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EXHIBIT "A"
Legal Description of Property
LOTS I, 3, 4 AND 5 OF CARLSBAD TRACT NO. 06-27, MUROYA PROPERTY, IN THE
CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA,
ACCORDING TO MAP THEREOF NO. 15846, FILED IN THE OFFICE OF THE SAN
DIEGO COUNTY RECORDER, NOVEMBER 2, 2011, DOCUMENT NO.2011-0583227 OF
OFFICIAL RECORDS.
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EXHIBIT "B"
Legal Description of Conservation Land
LOT 4 OF CARLSBAD TRACT NO. 06-27, MUROYA PROPERTY, IN THE CITY OF
CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO
MAP THEREOF NO. 15846, FILED IN THE OFFICE OF THE SAN DIEGO COUNTY
RECORDER, NOVEMBER 2, 2011, DOCUMENT NO. 2011-0583227 OF OFFICIAL
RECORDS.
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EXHIBIT '~G"
San Diego Habitat Conservancy Investment Policy
-23-
TaylorMonison
First American Title
Attn: Karen Hagen, Sr. Escrow Officer
3131 Camino Del Rio, No. 190
San Diego, CA 92108
November 9,201 I
TA\'l.OR MORRISON OF Cf<. LLC
11105 !Nine cenw Olive
S!lile 1450
ll'lil!e,CA
92619
Re: Muroya (Carlsbad) Proiett -Deposit or Endowment Funds for Natuf!! Habitat
Escrow No.: 3889567 ("Escrow")
Dear Ms. Hagen:
This letter constinues the joint escrow instructions of Taylor Morrison of California, LLC
("TMC") and San Diego Habitat Conservancy ("SDHC'') lo First American Title ("Escrow Holder")
with respect to the above-identified Escrow. TMC and SDHC have opened the Escrow for the purpose of
facililating the transfer of certain funds 10 be used for the management and monitoring of certain real
property identified as Lot 4 of Carlsbad Tract No. 06-27, Muroya Property, in the City of Carlsbad,
County of San Diego, State of California, according to Map thereof No. 15846, filed in the Office of the
San Diego County Recorder, November 2, 2011, Document No.2011-0583227 or Official Records (the
"Proteeted Site"), which was set aside, as required by the City of Carlsbad ("City"), for protection.
As part of the approvals for a residential project adjacent to the Protected Site, the City required
TMC to create an endowment for the perpetual maintenance and monitoring of the Protected Site. Upon
satisfaction of various requirements of SDHC, SDHC will agree to accept fee title to the Protected Site
and provide the management and monitoring of the Protected Site, and accept the endowment funded by
TMC. It is !he intent of the parties that the tenns and conditions governing the transfer of fee title to the
Protected Site will be addressed in separate instructions. TMC and SDHC have agreed to open this
escrow for the deposit and transfer of lhc endowment funds to SDHC upon the satisfaction of certain
conditions, as described in more detail below.
I. TMC will deposit in10 Escrow the following documents and funds:
(a)
TMC and SDHC;
One ( l ) copy of the fully executed Memor.mdum of Understanding between
(b) Cash, in the amount of Three Hundred Twenty Se.ven Thousand, Four Hundred
Sixty One Dollars and Sixty Eight C1.'!lts ($327,461.68) (the "Endowment Funds"), plus the additional
amount necessary to cover all of the costs oflhe Escrow and recording fees (collectively, "TMC
Fundt"), with said funds to be deposited ifl an interest bearing account; and
(c) Copies ofony and all authority documents required by Escrow Holder verifying
that TMC is duly organized and validly existing and that all closing documents have been duly
authorized, executed and delivered by TMC ("TMC Authority Documents").
2. SDHC will deposit into the Escrow the following original documents:
First American Title
Escrow No. 3889567
November 9, 201 I
Page 2
(a) Copies of any and all authority documents required by Escrow Holder verifying
that SDHC is duly organized and validly existing and that all closing documents have been duly
authorized, executed and delivered by SDHC ("SDHC Authority Documents").
3. Conditions Precedent to Closing, The following are Conditions Precedent to Closing:
(a) Escrow Holder has received 1111 of the above-referenced documents and funds and
any other documents or instruments required by Escrow Holder.
(b) Escrow Holder has signed and returned a scanned copy of this instruction letter
e-mailed to TMC, in care of April Tomillo (atomillo@taylormorrison.com), and to SDHC in care of Don
Scoles ( dons@sdhabitat.org).
(c) The City has reviewed and approved Property Analysis Record, Preserve
Management Plan, and Declaration of Restrictive Covenants that all apply to the Protected Site, and the
Declaration of Restrictive Covenants is recorded in the Official Records of the County of San Diego.
(d) TMC and SDHC have executed the operating agreement governing the
relationship of said parties as it pertains 10 the Protected Site.
(e) Escrow Holder has received oral or wriuen confirmation from TMC that all other
conditions to closing that are to be satisfied outside of Escrow have been fulfilled to each party's
satisfaction and that the Escrow is ready to close.
(I) Escrow I-I older is in a position to do each 11nd all of the tasks described in this
letter.
4. Close of Escrow: Upon receipt of the TMC Funds and direction from TMC, as set forth
above, you are then authorized and directed to proceed as follows:
(a) date all undated documents as of the Close of Escrow, verify that all documents
have all exhibits attached and compile originals of any documents delivered to you in counterparts; and
(b) release to SDHC of the full amount of the Endowment Funds and disburse the
remainder of the TMC Funds 10 Escrow Holder;
S. Non-Liability of SDHC. The parties to this Escrow acknowledge and agree that if the
Endowment Funds are released to any other person or entity other than SDHC, that SDHC shall not be
responsible or liable for said Endowment Funds, or any other obligations related 10 the Protected Site.
6. Conflicring lnfonnarion. If there is any conflict or inconsistL·m:y between these
instructions and any other the instructions received from TMC or SDHC or from any other person or
entity in connection with the Close of Escrow, do not proceed until you have contacted April Tomillo on
behalf ofTMC and Don Scoles on behalf of SDHC and the conflict has been resolved by a written
document signed by TMC and SDHC.
First American Title
Escrow No. 3889567
November 9, 2011
Page3
7. Closjng Confirmation and Funher lnstructjons. Please e-mail April Tomillo on behalf of
TMC and Don Scoles on behalf of SDHC when Escrow closes or if you have any questions concerning
any of the foregoing. Also, please contact the same persons immediately if anything funher is required
from eitherTMC or SDHC in order to close Escrow. If Escrow has not closed on or before 2:00 p.m.,
Pacific Time, on June l '', 2012, you are 10 call the above-identified individuals for further instructions,
which may include the requirement that you return to the parties any and all documents. If you cannot
comply with all of the foregoing, you are not authorized to close Escrow and you are to contact the above
identified persons immediately.
8. Acceptance of Instructions. Please evidence your receipt of the documents referenced in
this letter, your agreement to proceed in accordance wilh lhc tcnns of this letter, and your agreement to
serve as lhc Escrow Holder for lhe funds and-documents in accordance with the terms oflhese Escrow
instruclions, by signing in the space provided below and returning a copy of this letter to April Tomillo
for TMC and lo Don Scoles for SDHC. In any event, lhc disbU1SCment of any ofTMC Funds will
evidence your unconditional agreement to lhc tcm1S and conditions of this letter.
lfyou have any questions, please call April Tomillo at 858-864-6206, and Don Scoles at 619-
668-7474. Thank you.
Sincerely,
TAYLOR MORRISON OF CALIFORNIA, LLC
SAN DIEGO HABrfAT CONSERVANCY
Name: Don Scoles
Title: Executive Director
THE FOREGOING TERMS AND CONDITIONS ARE ACCEPTED AND AGREED TO ON
NOVEMBER .10..__, 2011.
FIRST AMERICAN TITLE
First American Title Company
3131 Camino Del Rio North Suite 190 San Diego, CA 92108
PR: 06243 Ofe:3710 DATE: 11/10/2011
RECEIPT NO.: 1275123967
RECEIPT FOR DEPOSIT • FILE NO.: DIV-3889567
FUNDS IN THE AMOUNT OF: $327,461.68
WERE RECEIVED FROM: Taylor Morrison of Califomia. LLC
CREDITED TO THE ACCOUNT OF: Buyer
TYPE OF DEPOSIT: Personal Check REPRESENTING: Initial Deposit
Commeab:
Property LocaUon: Open-Space Lot 4 at Muroya. San Diqw, CA
BY: MartaK..Hydc, 11/10/2011
ESCROW OFFICER: Karen Hagen
"The valldity of this recelpt, for the deposit referenced,
Is IUbject to clearance by the depository flundal Institution and credit to our account."
Receivccl by Pim American Title Company
Pay Amount :1'{F.,1f~dred Twenty Seven. Thousand FO#Jr Hundred Sixty•One Dollsrs • $327,461.68
To
• The
Order . Of
.. . . • ' • '•'
. . .
1!tifst ~ERidA"' irn'E COMPANY
fl Ff,s.t Amerfcon Way ,
~Ami, CA. 92707
PAYABLE IN U.S. DOI.LARS
Escrow General Provisions-REVISED JUNE 20, 2011
Receipt of these provisions deems acceptance of the terms. Please read for general information about the escrow
process.
1. SPECIAL DISCLOSURES:
A. DEPOSIT OF FUNDS & DISBURSEMENTS
Unless directed in writing to establish a separate, interest-bearing account together with all necessary taxpayer
reporting information, all funds shall be deposited in general escrow accounts in a federally insured financial institution
including those affiliated with Escrow Holder (''depositories''). All disbursements shall be made by Escrow Holder's
check or by wire transfer unless otherwise instructed in writing. Toe Good Funds Law (california Insurance Code
12413.1) mandates that Escrow Holder may not disburse funds until the funds are, in fact, available in Escrow Holder's
account. Wire transfers are immediately disbursable upon confirmation of receipt. Funds deposited by a cashier's or
certified check are generally available on the next banking day following deposit. Funds deposited by a personal check
and other types of instruments may not be available until confirmation from Escrow Holder's bank which can vary from
2 to 10 days.
B. DISCLOSURE OF POSSIBLE BENEFITS TO ESCROW HOLDER
As a result of Escrow Holder maintaining its general escrow accounts with the depositories, Escrow Holder may receive
certain financial benefits such as an array of bank services, accommodations, loans or other business transactions from
the depositories (''collateral benefits''). All collateral benefits shall accrue to the sole benefit of Escrow Holder and
Escrow Holder shall have no obligation to account to the parties to this escrow for the value of any such collateral
benefits.
C .• MISCELLANEOUS FEES
Escrow Holder may incur certain additional costs on behalf of the parties for services performed, or fees charged, by
third parties. The fees charged by Escrow Holder for services including, but not limited to, wire transfers, overnight
delivery/courier services, etc. may include a mark up over the direct cost of such services to reflect the averaging of
direct, administrative and overhead charges of Escrow Holder for such services which shall, in no event, exceed $10 for
each markup.
D. METHOD TO DELIVER PAYOFF TO LENDERS/LIEN HOLDERS
To minimize the amount of interest due on any existing loan or lien, Escrow Holder will deliver the payoff funds to the
lender/lienholder as soon as Escrow Holder is able after confirmation of recordation/close of escrow and as demanded
by the lender/lienholder using (a) personal delivery, (b) wire transfer, or (c) overnight delivery service, unless
otherwise directed in writing by the affected party. Certain payments such as home equity line of credit payoffs
("HELOCS'') may require additional time to process.
2. PRORATIONS & ADJUSTMENTS
The term "close of escrow" means the date on which documents are recorded. All prorations and/or adjustments shall
be made to the close of escrow based on the number of actual days, unless otherwise instructed in writing.
3. CONTINGENCY PERIODS
Escrow Holder shall not be responsible for monitoring contingency time periods between the parties. The parties shall
execute such documents as may be requested by Escrow Holder to confirm the status of any such periods.
4. REPORTS
a. Preliminary Report -Escrow Holder has neither responsibility nor liability for any title search that may be performed
in connection with the issuance of a preliminary report.
b. Other Reports-As an accommodation, Escrow Holder may agree to transmit orders for inspection, termite,
disclosure and other reports if requested, in writing or orally, by the parties or their agents. Escrow Holder shall deliver
copies of any such reports as directed. Escrow Holder is not responsible for reviewing such reports or advising the
parties of the content of same.
5. INFORMATION FROM AFFILIATED COMPANIES
Escrow Holder may provide the parties' information to and from its affiliates in connection with the offering of products
and services from these affiliates.
THIS COMPANY CONDUCTS ESCROW BUSINESS UNDER CERTIFICATE OF AUTHORITY ISSUED BY THE STATE OF CALIFORNIA DEPARTMENT· OF INSURANCE,
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6. RECORDATION OF DOCUMENTS
Escrow Holder is authorized to record documents delivered through escrow which are necessary or proper for the
issuance of the requested title insurance policy(ies). Buyer will provide a completed Preliminary Change of Ownership
Report form (''PCOR''). If Buyer fails to provide the PCOR, Escrow Holder shall close escrow and charge Buyer any
additional fee incurred for recording the documents without the PCOR. Escrow Holder is released from any liability in
connection with same.
7. PERSONAL PROPERTY TAXES
No examination, UCC search, insurance as to personal property and/or the payment of personal property taxes is
required unless otherwise instructed in writing.
8. REAL PROPERTY TAXES
Real property taxes are prorated based on the most current available tax statement from the tax collector's office.
Supplemental taxes may be assessed as a result of a change in ownership or completion of construction. Adjustments
due either party based on the actual new tax bill issued after close of escrow or·a supplemental tax bill will be made by
the parties outside of escrow and Escrow Holder is released of any liability in connection with such adjustments~ The
first installment of california real property taxes is due November 1st (delinquent December 10th) and the second
installment is due February 1st (delinquent April 10th). If a tax bill is not received from the County at least 30 days
prior to the due date, buyer should contact the County Tax Collector's office and request one. Escrow Holder is not
responsible for same.
9. CANCELLATION OF ESCROW
a. Any party desiring to cancel this escrow shall deliver written notice of cancellation to Escrow Holder. Within a
reasonable time after receipt of such notice, Escrow Holder shall send by regular mail to the address on the escrow
instructions, one copy of said notice to the other party(ies). Unless written objection to cancellation is delivered to
Escrow Holder by a party within 10 days after date of mailing, Escrow Holder is authorized, at its option, to comply with
the notice and terminate the escrow. If a written objection is received by Escrow Holder, Escrow Holder is authorized,
at its option, to hold all funds and documents in escrow (subject to the funds held fee) and to take no other action until
otherwise directed by either the parties' mutual written instructions or a final order of a court of competent jurisdiction.
If no action is taken on this escrow within 6 months after the closing date specified in the escrow instructions, Escrow
Holder's obligations shall, at its option, terminate. Upon termination of this escrow, the parties shall pay all fees,
charges and reimbursements due to Escrow Holder and all documents and remaining funds held in escrow shall be
returned to the parties depositing same.
b. Notwithstanding the foregoing, upon receipt of notice of cancellation by a seller in a transaction subject to the
Home Equity Sales Contract law (CC §1695 et seq.), Escrow Holder shall have the right to unilaterally cancel the escrow
and may return all documents and funds without consent by or notice to the buyer.
10. CONFLICTING INSTRUCTIONS & DISPUTES
If Escrow Holder becomes aware of any conflicting demands or claims concerning this escrow, Escrow Holder shall
.have the right to discontinue all further acts on Escrow Holder's part until the conflict is resolved to Escrow Holder's
satisfaction. Escrow Holder has the right at its option to file an action in interpleader requiring the parties to litigate
their claims/rights. If such an action is filed, the parties jointly and severally agree (a) to pay Escrow Holder's
cancellation charges, costs (including the funds held fees) and reasonable attorneys' fees, and (b) that Escrow Holder
is fully released and discharged from all further obligations under the escrow. If an action is brought involving this
escrow and/or Escrow Holder, the party(ies) involved in the action agree to indemnify and hold the Escrow Holder
harmless against liabilities, damages and costs incurred by Escrow Holder (including reasonable attorneys' fees and
costs) except to the extent that such liabilities, damages and costs were caused by the negligence or willful misconduct
of Escrow Holder.
11.USURY
Escrow Holder is not to be concerned with usury as to any loans or encumbrances in this escrow and is hereby
released of any responsibility and/or liability therefore.
THIS COMPANY CONDUCTS ESCROW BUSINESS UNDER CERTIFICATE OF AUTHORITY ISSUED BY THE STATE OF CALIFORNIA DEPARTMENT OF INSURANCE.
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12. AMENDMENTS TO ESCROW INSTRUCTIONS
Any amendment to the escrow instructions must be in writing, executed by all parties and accepted by Escrow Holder.
Escrow Holder may, at its sole option, elect to accept and act upon oral instructions from the parties. If requested by
_Escrow Holder the parties agree to confirm said instructions in writing as soon as practicable. The escrow instructions
as amended shall constitute the entire escrow agreement between the Escrow Holder and the parties hereto with
respect to the subject matter of the escrow.
13. FIRE, HAZARD OR LIABILITY INSURANCE POLICIES
In all matters relating to fire, hazard or liability insurance, Escrow Holder may assume that each policy is in force and
that the necessary premium has been paid. Escrow Holder is not responsible for obtaining fire, hazard or liability
insurance, unless Escrow Holder has received specific written instructions to obtain such insurance prior to close of
escrow from the parties or their respective lenders.
14. COPIES OF DOCUMENTS; AUTHORIZATION TO RELEASE
Escrow Holder is authorized to rely upon copies of documents, which include facsimile, electronic, NCR, or photocopies
as if they were an originally executed document. If requested by Escrow Holder, the originals of such documents shall
be delivered to Escrow Holder. Escrow Holder may withhold documents and/or funds due to the party until such
originals are delivered. Documents to be recorded MUST contain original signatures. Escrow Holder may furnish copies
of any and all documents to the lender(s), real estate broker(s), attorney(s) and/or accountant(s) involved in this
transaction upon their request. Delivery of documents by escrow to a real estate broker or agent who is so designated
in the purchase agreement shall be deemed delivery to the principal.
15. EXECUTION IN COUNTERPART
The escrow instructions and any amendments may be executed in one or more counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute the same instruction.
16. TAX REPORTING, WITHHOLDING & DISCLOSURE
The parties are advised to seek independent advice concerning the tax consequences of this transaction, including but
·not limited to, their withholding, reporting and disclosure obligations. Escrow Holder does not provide tax or legal
advice and the parties agree to hold Escrow Holder harmless from any loss or damage that the parties may incur as a
result of their failure to comply with federal and/or state tax laws. WITHHOLDING OBLIGATIONS ARE THE EXCLUSIVE
OBLIGATIONS OF THE PARTIES. ESCROW HOLDER IS NOT RESPONSIBLE TO PERFORM THESE OBLIGATIONS UNLESS
ESCROW HOLDER AGREES IN WRmNG.
A. TAXPAYER IDENTIFICATION NUMBER REPORTING
Federal law requires Escrow Holder to report seller's social security number or tax identification number (both numbers
are hereafter referred to as the "TIN''), forwarding address, and the gross sales price to the Internal Revenue Service
("IRS''). To comply with the USA PATRIOT Act, certain taxpayer identification information (including, but not limited to,
the TIN) may be required by Escrow Holder from certain persons or entities involved (directly or indirectly) in the
transaction prior to closing.
Escrow cannot be closed nor any documents recorded until. the information is provided and certified as to its accuracy
to Escrow Holder. The parties agree to promptly obtain and provide such information as requested by Escrow Holder.
B. STATE WITHHOLDING & REPORTING
In accordance with Section 18662 of the Revenue and Taxation Code (R& TC), a buyer may be required to withhold an
amount equal to 3 1/3% (.0333) of the sale price, or an optional gain on sale withholding amount certified by the seller
in the case of a disposition of california real property interest by either:
1. A seller who is an individual, trust, estate, or when the disbursement instructions authorize the proceeds to be sent
to a financial intermediary of the sellers.
2. A corporate seller that has no permanent place of business in california immediately after the transfer of title to the
california property.
THIS COMPANY CONDUCTS ESCROW BUSINESS UNDER CERTIFICATE OF AUTHORITY ISSUED BY THE STATE OF CALIFORNIA DEPARTMENT OF INSURANCE.
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The buyer may become subject to penalty for failure to withhold an amount equal to the greater of 10 percent of the
amount required to be withheld or five hundred dollars. ($500).
However,· notwithstanding any other provision included in the California statutes referenced above, no buyer will be
required to withhold any amount or be subject to penalty for failure to withhold if any of the following applies:
1. The sale price of the California real property conveyed does not exceed one hundred thousand dollars ($100,000).
2. The seller executes a written certificate under the penalty of perjury certifying that the seller is a corporation with a
permanent place of business in California.
3. The seller, who is an individual, trust, estate, or a corporation without a permanent place of business in California,
executes a written certificate under the penalty of perjury of any of the following:
a. The California real property being conveyed is the seller's or decedent's principal residence (within the meaning of
Section 121 of the Internal Revenue Code (IRC)).
b. The last use of the property being conveyed was by the transferor as the transferor's principal residence (within
the meaning of IRC Section 121 ).
c. The California real property being conveyed is, or will be; exchanged for property of like kind (within the meaning
of IRC Section 1031), but only to the extent of the amount of gain not required to be recognized for California income
tax purposes under IRC Section 1031.
d. The California real property has been compulsorily or involuntarily converted (within the meaning of IRC Section
1033) and the seller intends to acquire property similar or related in service or use so as to be eligible for
nonrecognition of gain for California income tax purposes under IRC Section 1033.
e. The California real property transaction will result in a loss or net gain not required to be recognized for California
income tax purposes.
The seller is subject to penalty for knowingly filing a fraudulent certificate for the purpose of avoiding the withholding
requirement.
Contact FTB: For additional information regarding California withholding or for the Alternative Withholding, contact the
Franchise Tax Board at (toll free) 888-792-4900), by e-mail WSCS.GEN@ftb.ca.gov; or visit their website at
www.ftb.ra.gov.
C. FEDERAL WITHHOLDING & REPORTING
Certain federal reporting and withholding requirements exist for real estate transactions where the seller (transferor) is
a non-resident alien, a non-domestic corporation, partnership, or limited liability company; or a domestic corporation,
partnership or limited liability company controlled by non-residents; or non-resident corporations, partnerships or
limited liability companies.
D. TAXPAYER IDENTIFICATION DISCLOSURE
Federal and state laws require that certain forms include a party's TIN and that such forms or copies of the forms be
provided to the other party and to the applicable governmental authorities. Parties to a real estate transaction
involving seller-provided financing are required to furnish, disclose, and include the other party's TIN in their tax
returns. Escrow Holder is authorized to release a party's TINs and copies of statutory forms to the other party and to
the applicable governmental authorities in the foregoing circumstances. The parties agree to hold Escrow Holder
harmless against any fees, costs, or judgments incurred and/or awarded because of the release of their TIN as
authorized herein.
THIS COMPANY CONDUCTS ESCROW BUSINESS UNDER CERTIFICATE OF AUTHORITY ISSUED BY THE STATE OF CALIFORNIA DEPARTMENT OF INSURANCE.
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