HomeMy WebLinkAboutCT 14-04; Shea Homes; 2018-0022943; Affordable Housing Agreement/ReleaseRECORDING REQUESTED BY:
DOC# 2018-0022943
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CITY OF CARLSBAD Jan 19, 2018 02:29 PM
OFFICIAL RECORDS
Ernest J. Dronenburg, Jr.,
AND WHEN RECORDED
MAIL TO:
SAN DIEGO COUNTY RECORDER
FEES: $0.00 (SB2 Atkins: $0.00)
CITY OF CARLSBAD
CITY CLERK'S OFFICE
ATTN: CITYCLERK
1200 CARLSBAD VILLAGE DRIVE
CARLSBAD, CA 92008
AFFORDABLE HOUSING AGREEMENT
(Please fill in documenttitle(s) on this line)
PAGES: 24
1 D Exempt from fee per GC27388.1 due to being recorded in connection with concurrent transfer that
is subject to the imposition of documentary transfer tax, or,
2 D Exempt from fee per GC27388.1 due to being recorded in connection with a transfer that was
subject to documentary transfer tax which was paid on document recorded previously on
_______ (date) as document number ___________ of Official
Records, or,
3 D Exempt from fee per GC27388.1 due to the maximum fees being paid on documents in this
transaction, or,
4 D Exempt from fee per GC27388.1 due to the maximum fees having been paid on documents in the
transaction(s) recorded previously on _________ (date) as document number(s)
______________________ of Official Records, or
5 D Exempt from fee per GC27388.1; document transfers real property that is a residential dwelling to
an owner-occupier, or,
6 D Exempt from fee per GC27388.1 due to being recorded in connection with concurrent transfer that
is a residential dwelling to an owner-occupier, or,
7 D Exempt from fee per GC27388.1 due to it being recorded in connection with a transfer of real
property that is a residential dwelling to an owner-occupier. The recorded document transferring
s D
9 [Z]
the dwelling to the owner-occupier was recorded on _________ (date) as
document number(s)
_______________________________ , or,
Exempt from the fee per GC 27388.1 (a) (1); Not related to real property, or,
Exempt from fee under GC27388.1 for the following reasons:
RECORDING REQUESTED BY CITY OF CARLSBAD
THIS PAGEADDEDTO PROVIDE SENC\TEBlll.2EXEMPTIONINFORMAllON
(Additional recordingfeeapplies)
Recording Requested by:
City of Carlsbad
When Recorded Mail to:
City of Carlsbad
City Clerk's Office
Attn: City Clerk
1200 Carlsbad Village Drive
Carlsbad California 92008
(Space above for Recorder's Use)
AFFORDABLE HOUSING AGREEMENT
(Second Dwelling Units)
THIS AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into this
2:!:) rd. day of Mav-a.b , 2017, by and between the CITY OF CARLSBAD, a
municipal corporation ("City"), and Shea Homes, a limited partnership ("Developer"), with
reference to the following:
RECITALS
A. Developer is the owner of certain real property in the City of Carlsbad, County of San
Diego, State of California, described in "Exhibit A", which is attached hereto and incorporated
herein by this reference, and which is the subject of a Tentative Map CT 14-04, and Planned Unit
Development Plan PUD 14-06, which provides conditional approval of the construction of ten
(10) single family dwelling units ("Project").
B. Condition No.12 of Planning Commission Resolution No. 7128 states that this
Affordable Housing Agreement shall be entered into between the City and the Developer as a
means of satisfying the Developer's affordable housing obligation, as such is defined under
Chapter 21.85 of the Carlsbad Municipal Code ("Affordable Housing Obligation"). Planning
Commission Resolution No. 7128 provides that the affordable housing obligation will be
satisfied by applying the requirements set forth in this Agreement for construction of second
dwelling units on affordable housing lots ("Affordable Housing Lots"). The Affordable Housing
Lots which are subject to this Agreement are:
Lots 9 & 10 of Carlsbad Tract No, 14-04 in the Ciz of Carlsbad, County of San
Diego, State of California, according to Map No. I 215 filed with the
County Recorder of San Diego County on Au~1, sr 2q 1 '2oQ.
C. Developer intends to construct the required inclusionary units concurrent with the
project's market un_its that are also identified on Exhibit "A". The Affordable Housing Lots shall
be subject to this· Agreement and this Agreement shall be recorded on the title for each
Affordable Housing Lot.
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NOW, THEREFORE, incorporating the foregoing Recitals and in consideration of the
mutual covenants contained herein, the parties agree as follows:
1.
2.
The Recitals Are True And Correct.
THE AFFORDABLE HOUSING OBLIGATION SHALL BE SATISFIED
BY CONSTRUCTION OF SECOND DWELLING UNITS.
Performance under this Agreement satisfies the Developers' obligation for affordable
housing under Chapter 21.85 of the Carlsbad Municipal Code as applied to the land in Tentative
Map CT 14-04_, by Condition No. 12 in Planning Commission Resolution No. 7128 and any
other applicable condition of approval.
3. SECOND DWELLING UNITS.
(a) Construction of Second Dwelling Units. Developer shall at the time a residential
structure is constructed on the Affordable Housing Lot, include in such residential structure a
Second Dwelling Unit as defined under and subject to the requirements contained in Municipal
Code Section 21.85.070. The second dwelling unit shall have no interior entrance into the single
family home, a separate exterior entrance to the second dwelling unit, and provide for a one
bedroom unit with a full kitchen with full size appliances including but not limited to a full size
stove with oven, a full size refrigerator and full size sink.-The second dwelling unit may be used
for no purpose other than a residential rental unit; the unit may not be used as a short term
vacation rental or similar purpose at any time.
(b) Restriction on Rental of Second Dwelling Unit. The maximum monthly rent for any
Second Dwelling Unit, subject to this Agreement, which becomes rented or leased shall not
exceed an amount of I/12th of thirty percent (30%) of the gross monthly income of a low-income
household, adjusted for household size, at seventy percent (70%) of the San Diego County
median income, as such median income is published by the United States Department of Housing
and Urban Development from time to time. For purposes of this Agreement, "Rent" shall
include a utility allowance as established and adopted by the City of Carlsbad Housing Authority,
as well as all required monthly payments made by the tenant to the lessor in connection with use
and occupancy of a housing unit and land and facilities associated therewith, including any
separately charged fees, utility charges, or service charges assessed by the lessor and payable by
the tenant (but not including fees and charges resulting from any default by the tenant or damage
caused by the tenant, or fees or charges paid by the tenant to third party utilities or other
providers). A sample schedule showing the calculation of the maximum rental amount as for
2011 is attached to this Agreement as Exhibit "B".
(c) Restriction on Tenant Income. The Affordable Units shall be available to households
with incomes not exceeding 80% of the median income for San Diego County, adjusted for
actual household size.
( d) Covenants and Restrictions Governing Rental of Affordable Second Dwelling Unit.
Developer shall require the purchaser from Developer of an Affordable Housing Lot upon which
a Second Dwelling Unit has been constructed to execute and record the Agreement Containing
Covenants and Restrictions Governing Rental of Affordable Second Dwelling Unit as set fo1ih in
Exhibit "C" which sets fo1ih the restrictions on use of the Second Dwelling Unit and the income
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and monthly rental rate restrictions not to exceed the rate set fmth in paragraph 3(b). Developer
shall complete the agreement, obtain purchaser signature and forward a purchaser executed copy
of the Agreement to the City Housing and Neighborhood Services Director for review, approval
and execution prior to close of escrow. Following execution of said Agreement by purchaser and
the City of Carlsbad, the Agreement shall be deposited to escrow for recordation against said
property with an affected lot.
(e) Deed Restriction. Following sale of an affected lot, the Developer shall provide a
copy of the recorded Agreement Containing Covenants and Restrictions Governing Rental of
Affordable Second Dwelling Unit" owner agreement as set forth in Exhibit "C", which shall
provide proof of the deed restriction and that said restriction will run with the land so as to
restrict subsequent transfers.
4. REMEDIES
Failure by the Developer to perform in accordance with this Agreement will constitute
failure to satisfy the requirements of Chapter 21.85 of the Carlsbad Municipal Code and
Condition No.12_of Planning Commission Resolution No. 7128. Such failure will allow the City
to exercise any and all remedies available to it including but not limited to withholding the
issuance of building permits for the lots shown on Carlsbad Tract No. 14-04.
5. HOLD HARMLESS
Developer will indemnify and hold harmless (without limit as to amount) City and its
elected officials, officers, employees and agents in their official capacity (hereinafter collectively
referred to as "Indemnitees"), and any of them, from and against all loss, all risk of loss and all
damage (including attorneys' fees and expenses) sustained or incurred because of or by reason of
any and all claims, demands, suits, and/or actions, allegedly caused by, arising out of or
pertaining in any manner to Developer's actions or defaults pursuant to this Agreement, and
Developer shall protect and defend Indemnitees, and any of them with respect thereto. This
provision shall survive the term of this Agreement.
6. INSURANCE
Developer shall obtain, at its expense, commercial general liability insurance for
development of the Project naming Indemnities as additional insureds with aggregate limits of
not less than one million dollars ($1,000,000) purchased by Developer from an insurance
company duly licensed to engage in the business of issuing such insurance in the State of
California, with a current Best's Key Rating of not less than A-:VII, such insurance to be
evidenced by an endorsement which so provides and deliver to the City Clerk prior to the
issuance of any building permit for the Project.
7. NOTICES
All notices required pursuant to this Agreement shall be in writing and may be given by
personal delivery or by registered or certified mail, return receipt requested to the party to receive
such notice at the address set forth below:
TO THE CITY:
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City of Carlsbad
Housing & Neighborhood Services Department
Attn: Housing & Neighborhood Services Director
3
TO THE DEVELOPERS:
1200 Carlsbad Village Drive
Carlsbad, California 92008
Shea Homes Limited Paiinership
9990 Mesa Rim Road, #220
San Diego, Ca. 92121
Any party may change the address to which notices are to be sent by notifying the other parties of
the new address, in the manner set forth above.
8. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties and no modification
hereof shall be binding unless reduced to writing and signed by the parties hereto.
9. DURATION OF AGREEMENT
This Agreement shall terminate and become null and void upon repeal, termination, or
modification of any applicable ordinance which act would render the Affordable Housing
Obligation unnecessary or unenforceable. The restriction set forth in Paragraph 3(b) above shall
terminate as to the Affordable Housing Lot at such time as the Second Dwelling Unit on the
Affordable Housing Lot has reached the end of its useful life, which is assumed to be not less
than 55 years from the date of completion of original construction.
10. SUCCESSORS
This Agreement shall benefit and bind Developers and any successive owners of
Affordable Housing Lots.
11. SEVER.ABILITY
In the event any provision contained in this Agreement is to be held invalid, void or
unenforceable by any court of competent jurisdiction, the remaining provisions of this Agreement
shall nevertheless, be and remain in full force and effect.
(Remainder of Page Intentionally Left Blank)
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·.,
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as
of the day and year first above written.
DEVELOPER
Q~--~OFCARLSr
By: \Ld,jd,:_, b r~ )
Debbie Fountain
Housing & Neighborhood Services Director
Dated: 3fi I., la
Dated: 3 /1 '-I /11
(Chairman, president or vice-president and secretary, assistant secretary, CFO or assistant
treasurer must sign for corporations. Otherwise, the corporation must attach a resolution
certified by the secretary or assistant secretary under corporate seal empowering the office(s)
signing to bind the corporation.)
(ff signed by an individual partner, the partnership must attach a statement of partnership
authorizing the partner to execute this instrument.)
(Proper notarial acknowledgment of execution by Developer must be attached.)
APPROVED AS TO FORM:
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A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ~
COUNTY OF~ )
On ~ \i-{' a.on, before me, £A-tt-~ R~v:As. 'Notary Public, personally
appe~· e; ct-~h W\ (1\1\,Q..Rj., who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) 1*'are subscribed to the within instrument and acknowledged
to me that ~/they executed the same in 1~/their authorized capacity(ies), and that by ~/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.
r •. -PATNRIV~ · ---i .. , . CommisliOn .No. 21 ~0542 z !: . NOTARY-PUBLIC-CALIFORNIA 5!
c> SAN-QIEGp COUNTY 3 1 -CommlssiO!I~~~ 13.'2019 t Name: Pit 7fY RI VAS
Name: Notary Public
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
The easterly 300.00 feet of that portion of Lot 30 of Patterson's Addition to the Town of
Carlsbad, in the City of Carlsbad, County of San Diego, State of California, according to Map
Thereof No. 565, filed in the Office of the County Recorder of San Diego County, September 22,
1888, and of that portion of Section 31, Township 11 South, Range 4 West, San Bernardino Base
and Meridian, in the County of San Diego, State of California, according to United States
Government survey, described as a whole as follows:
Commencing at the intersection of the center line of Valley Street and Oak Avenue as shown on
Map No. 565; thence along the center line of said Valley Street, north 34°33'00" west 528.52
feet to the true point of beginning; thence continuing along said center line of Valley Street, north
34°33 '00" west, 657.07 feet to an intersection with the southerly line of said section 31; thence
along said southerly line north 89°07'00" west 43.31 feet to the most westerly corner of land
conveyed to south coast land company by deed dated November 1, 1923 and recorded January 9,
1924 in Book 976, page 435 of deeds; thence along the northwesterly line of said land conveyed
land north 54°13'30" east 759.75 feet to the northerly corner thereof; thence along the
northeasterly line of said land conveyed to south coast land company, south 35°29'00" east,
563.12 feet to said southerly line of section 31; thence along said southerly line south 89°07'00"
east, 176.33 feet to an intersection with the center line of Canyon Drive (formerly Canon Street)
as shown on said Map No. 565; thence along said center line south 19°26'00" east 36.81 feet,
more or less which bears north 55°27'00" east parallel with the centerline of said Oak Avenue
form the true point of beginning; thence along said parallel line south 55°27'00" west, 864.32
feet to the true point of beginning.
Excepting therefrom that po1iion lying southeasterly of a line that is parallel with and distant
233.03 feet northwesterly measured at right angles from the southeasterly line thereof
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EXHIBITB
MAXIMUM MONTHLY RENTAL AMOUNT
Maximum rent based on 2016 income levels. Rents may be adjusted to new income levels on an
annual basis. Maximum rent also assumes that all utilities are included within the monthly rental
rate. If utilities are not included in the monthly rental rate and the tenant must pay the utilities
separately, an adjustment must be made in the monthly rental rate for a utility allowance. Owner
should contact the City of Carlsbad Housing and Neighborhood Services Department for the
applicable utility allowance.
Rental Chart -2016 -70%of AMI maximum household income
Max. Gross HH Max. Monthly HH
HH Size Bedroom Size Income Income Max. Rent*
1 Studio $41,650 $ 3,470.83 $1,041.25
1.5 1 bedroom $ 3,718.75 $1,115.63
2 1 bedroom $47,600 $ 3,966.67 $1,190.00 ----.. ------------~moo~g
~
studio = 1 person
1 bedroom = 1.5 persons
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RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Carlsbad
City Clerk's Office
1200 Carlsbad Village Drive
Carlsbad, CA 92008
No fee for recording pursuant to
Government Code Section 27383
E HIBIT C
AGREEMENT CONTAINING COVENANTS AND RESTRICTIONS GOVERNING RENTAL
OF AFFORDABLE SECOND DWELLING UNIT
THIS AGREEMENT CONTAINING COVENANTS AND RESTRICTIONS GOVERNING
RENTAL OF AFFORDABLE SECOND DWELLING UNIT (the "Agreement") is made and entered into
as of _________ , 20 _ (the "Effective Date"), by and between the City of Carlsbad, a
municipal corporation (the "City"), and ________ , or any successor in interest (collectively,
the "Owner") with reference to the following:
RECITALS
A. Owner is the fee owner of that certain property in the City of Carlsbad, California, which
is more particularly described in Exhibit A (the "Property"). As of the Effective Date, two (2) housing
units are located, or will be constructed, on the Property. One unit shall be referred to herein as the
"Primary Unit" and the other unit shall be refe1Ted to herein as the "Second Dwelling Unit". Such units are
designated on Exhibit B.
B. The Property, and other real property, are the subject of [Tentative] Map _____ .
and Site Development Plan _____ , which provided conditional approval of the construction of
____ single family dwelling units (the "Master Development").
C. Condition No. of Planning Commission Resolution No. for the Master
Development required, among other things, that the City and _________ (the "Developer")
enter into that certain Affordable Housing Agreement dated as of ________ , 20 _, and
recorded in the Official Records of San Diego County (the "Official Records") on _____ ~, 20_,
as document ____ (the "Affordable Housing Agreement"). The Affordable Housing Agreement
encumbers the Property and the other real property on which the Master Development is developed.
D. The Affordable Housing Agreement satisfied the Developer's affordable housing
obligation, as set forth in Chapter 21.85 of the Carlsbad Municipal Code (the "Affordable Housing
Obligation"). The Owner, as the owner of the Property, is the successor-in-interest to the Developer.
E. In conjunction with the approval of the Master Development, the Developer requested,
and the City approved, the ability to satisfy the Master Development's Affordable Housing Obligation by
providing the Second Dwelling Unit on the Property as an alternative to providing for-sale single family
dwelling units, as affordable units, in accordance with Chapter 21. 85 of the Carlsbad Municipal Code.
Such approval is a form of assistance specified in Chapter 4.3 ( commencing with Section 65915) of
Division 1 of Title 7 of the Government Code (the "Incentive"). Accordingly, the Owner is required to
make the Second Dwelling Unit available for rent exclusively to Low Income Households (as defined
below) at an Affordable Rent (as defined below).
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F. This Agreement is required to be entered into by the City and the Owner, and recorded in
the Official Records against the Property, in accordance with Section [_] of the Affordable Housing
Agreement in order to comply with the requirements of the Affordable Housing Obligation and Chapter
21.85 ofthe Carlsbad Municipal Code.
NOW THEREFORE, it is hereby agreed by and between the City and the Owner (each a "Party",
and, collectively, the "Parties") as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the terms set forth below shall have the following meanings ( other defined
terms herein not referenced below shall have the meanings where first used).
1.1 "Affordable Rent" means the maximum allowable Rent for the Second
Dwelling Unit, equal to one-twelfth (I/12th) of thirty percent (30%) of seventy percent (70%) of
the Median Household Income for Low Income Households, adjusted for assumed household
size of two persons in a one-bedroom or three persons in a two-bedroom.
1.2 "Eligible Household" means a household that has been determined to be
eligible to be a Tenant of the Second Dwelling Unit as a Low Income Household.
1.3 "HCD" means the State of California Department of Housing and
Community Development, or any successor
1.4 "HUD" means the U.S. Department of Housing and Urban Development,
or any successor.
1.5 "Low Income Household" means a household whose income does not
exceed the low income limits applicable to San Diego County, adjusted for household size, as
determined by HUD and published annually by the. As of the Effective Date, such income limit
is approximately equal to eighty percent (80%) of Median Household Income.
1.6 "Median Household Income" means median yearly income in San Diego
County as determined by HUD and published by HCD.
1.7 "Rent" means the total monthly payment by the Tenant of the Second
Dwelling Unit for all of the following: (1) use and occupancy of the Second Dwelling Unit and
land and all facilities associated with the Second Dwelling Unit, including but not limited to
parking, storage, and use of any common areas; (2) any separately charged fees or service charges
assessed by the Owner to the Tenant, except security deposits; (3) an allowance for utilities paid
by the Tenant as established by the San Diego County Housing Authority, including garbage
collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not
telephone service, Internet, or cable or subscription TV; and (4) any other interest, taxes, fees or
charges for use of the Property or associated facilities that are assessed by a public or private
entity other than the Owner and paid by the Tenant.
1.8 "Tenant" means an Eligible Household entitled by written or oral
agreement with the Owner to have the exclusive right to occupy the Second Dwelling Unit as a
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home or residence to the exclusion of all others.
ARTICLE2
OWNER'S OBLIGATIONS
2.1 Rental of Second Dwelling Unit to Eligible Households. The Owner shall
ensure that the Second Dwelling Unit is rented to, and occupied by, Eligible Households in
accordance with this Agreement. The Owner shall not use the Second Dwelling Unit for any
other purpose other than as set forth in this Agreement; provided, however, nothing in this
Agreement shall be deemed to prohibit the Second Dwelling Unit from being vacant so long as
such vacant Second Dwelling Unit is not used by Owner ( or any other person) for any purpose,
including, but not limited to use by the Owner in conjunction with the use and occupancy of the
Primary Unit. Except as set forth in the preceding sentence nothing in this Agreement limits the
use or occupancy of the Primary Unit.
(a) Income Certification. The Owner shall not enter into a lease or
rental agreement, or receive Rent from a Tenant, for the Second Dwelling Unit unless the Owner
has made a good faith effort to verify that the income provided by an applicant in an income
certification is accurate by taking one or more of the following steps as a part of the verification
process: (1) obtain a pay stub for the most recent pay period; (2) obtain an income tax return for
the most recent tax year; (3) conduct a credit agency or similar search; (4) obtain an income
verification form from the applicant's cun-ent employer; (5) obtain an income verification form
from the Social Security Administration and/or the California Department of Social Services if
the applicant receives assistance from either of such agencies; or (6) if the applicant is
unemployed and has no such tax return, obtain another form of independent verification. Copies
of tenant income certifications shall be available to the City upon request.
(b) Maximum Allowable Rent. The maximum Rent charged to
the Tenant of the Second Dwelling Unit shall not exceed Affordable Rent.
(c) Increased Income of Tenants. If, upon recertification of a Tenant's
income pursuant to Section 2.2, the Owner determines that the Tenant's household income has
increased and exceeds the qualifying income for a Low Income Household, then such Tenant
shall continue to be considered an "Eligible Household", and shall be permitted to continue to
occupy the Second Dwelling Unit, at the rent set forth in subsection (c), above; provided,
however, nothing in this Agreement shall prohibit the Owner from terminating such tenancy
upon the expiration of such Tenant's lease. Following such Tenant's vacancy, the Owner shall
lease the Second Dwelling Unit to an Eligible Household.
(d) Information. At the request of the Owner, the City shall provide
the Owner with the low and very low income limits applicable to San Diego County, adjusted for
household size, as published from time to time by HCD.
2.2 Annual Certification. The Owner shall certify the Tenant's household
income on an annual basis. The Owner shall provide the City with a certification, in the form
attached as Exhibit C, no later than June 30th of each year of the Term setting forth the following
information with respect to the Tenant occupying the Second Dwelling Unit: unit address,
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Tenant name, size of Tenant's household, unit size, and date first occupied, and a copy of the
annual income certification obtained by the Owner from the Tenant. The purpose of the yearly
Owner certification is to document Owner's compliance with the restrictions set forth herein.
2.3 Lease Provisions. The Owner shall use a form of Tenant lease (the
"Tenant Lease") approved by the City for the Second Dwelling Unit. The City shall either
approve or specify its basis for disapproval, if any, within thirty (30) days after the Owner
submits such proposed form lease to City. The Tenant Lease shall, among other matters:
(a) provide that the Rent may not be raised more often than once every
twelve (12) months. The Owner will provide the Tenant with at least sixty (60) days written
notice of any increase in Rent, and any Rent increase shall not violate the limitations imposed by
this Agreement;
(b) prohibit the Second Dwelling Unit (or any portion of the Second
Dwelling Unit) from: (i) any sublease, except as permitted by Section 2.6, below; (ii) use as a
"short-term vacation rental" (as such term is defined in Chapter 5.60 of the City of Carlsbad
Municipal Code, as may be amended from time to time); (iii) use for tourist or transient use, or
any other short-tenn rental; and (iii) being listed on any "hosting platform" (as defined in
California Business & Professions Code 22590, as may be amended from time to time),
including, but not limited to any Internet-based "hosting platform", such as "airbnb.com", or any
similar service;
(c) require the Tenant to provide an annual income certification to the
Owner;
( d) include, at Owner's option, the obligation for Tenant to provide a
security deposit not exceeding two months' rent; and
( e) be for an initial term of one year.
2.4 Inspection. For purposes of confirming compliance with this Agreement,
the Second Dwelling Unit shall be made available by Owner to be inspected by the City during
regular business hours upon seventy-two (72) hours' written notice; provided, however, that any
such inspection shall occur only once during any twelve (12) calendar month period unless: (i)
the City receives a complaint that a Tenant is occupying the Second Dwelling Unit in violation of
this Agreement (or that the Owner is otherwise violating this Agreement); or (ii) a new Tenant is
occupying the Second Dwelling Unit, in which case City may re-inspect. The Owner hereby
irrevocably grants the City (and its agents) a right of entry to enter the Property for the purposes
of such inspection.
2.5 Records. The Owner shall maintain reasonably complete and accurate
records pertaining to such rental of the Second Dwelling Unit throughout the duration of each
tenancy. Owner shall permit any authorized representative of the City to inspect such records of
any current Tenant upon reasonable notice, including those resident files pertaining to said rental,
for the purpose of confirming compliance with the terms, conditions and covenants of this
Agreement.
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2.6 Assignments and Subletting. The Owner shall at no time permit the
Tenant to assign its leasehold interest in the Second Dwelling Unit or to sublet all or a po1iion of
the Second Dwelling Unit to any person other than to another Eligible Household. Owner shall
have the right to approve or disapprove any proposed assignment or sublease at Owner's sole
discretion; provided that prior to approving any proposed assignment or sublease, Owner shall
comply with the provisions of Section 2.1 above to confirm the eligibility of the proposed
assignee or sub-lessee.
2.7 Agreement to Limitation on Rents.
(a) The Owner acknowledges that the Property, as a component of the
Master Development, received the Incentive from the City in connection with the approval of the
Master Development, and the Incentive is a form of assistance specified in Chapter 4.3
(commencing with Section 65915) of Division 1 of Title 7 of the Government Code. Sections
1954.52(b) and 1954.53(a)(2) of the Costa-Hawkins Act provide that, where an owner has
received such assistance, certain provisions of the Costa-Hawkins Act do not apply if a prope1iy
owner has so agreed by contract. The Owner hereby agrees to limit the Rents for the Second
Dwelling Unit, as provided in this Agreement, in consideration of the Property's receipt of the
Incentive and fmiher agrees that any limitations on Rents imposed on the Second Dwelling Unit
are in conformance with the Costa-Hawkins Act.
(b) The Owner further warrants and covenants that the terms of this
Agreement are fully enforceable. The Owner agrees and acknowledges that the City would not
have provided the necessary approvals for the Master Development without the obligation to
record this Agreement against the Property in the Officials Records, and that in providing the
necessary approvals for the Master Development, the City was relying on the restrictions
imposed on the Second Dwelling Unit by this Agreement.
2.8 Deeds. Owner acknowledges that this Agreement shall be recorded in the
Official Records against the Prope1iy, and any deed transferring any fee interest in the Prope1iy
shall include the following language; provided, however, the failure to include the following
language shall not limit, waive, or impair the obligations set forth in this Agreement:
NOTICE: THE SECOND DWELLING UNIT ON THIS PROPERTY IS REQUIRED TO BE RENTED
TO PERSONS MEETING CERTAIN ELIGIBil.,ITY REQUIREMENTS AT A BELOW-MARKET RA TE
RENT, PURSUANT TO THE CITY OF CARLSBAD MUNICIPAL CODE. FOR MORE
INFORMATION, SEE THE AGREEMENT RECORDED AGAINST THIS PROPERTY ENTITLED
"AGREEMENT CONTAINING COVENANTS AND RESTRICTIONS GOVERNING RENTAL OF
AFFORDABLE SECOND DWELLING UNIT". THE RESTRICTIONS SET FORTH IN SUCH
AGREEMENT BIND ALL HEIRS AND SUCCESSORS TO THIS DEED.
ARTICLE3
TERM
3.1 Term. This Agreement shall become effective as of the Effective Date and
shall remain in full force and effect for a term of fifty-five (55) years following the recordation of
this Agreement in the Official Records unless the City elects, in the City's sole discretion, to
terminate this Agreement by written instrument recorded in the Official Records.
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ARTICLE4
DEFAULT
4.1 · Violations by Owner. Failure of the Owner to cure any default in the
Owner's obligations under the terms of this Agreement within thirty (30) days after the delivery
of a written notice of default from the City ( or such longer period of time up to an additional
sixty (60) days as may be necessary to remedy such default, provided that the Owner has
commenced action during the thirty (30) days necessary to remedy such default, and the Owner is
proceeding with reasonable diligence to remedy such default) will constitute a default under this
Agreement.
4.2 Remedies. Subject to the applicable notice and cure period set forth
above, the City may exercise any and all remedies available to it at law or equity with respect to
the Owner's failure to satisfy the terms of this Agreement. Owner acknowledges that any breach
in Owner's performance of Owner's obligations under this Agreement shall cause irreparable
harm to the City, and materially impair the public policy objectives set forth in the Carlsbad
Municipal Code. Therefore, Owner agrees that the City is entitled to equitable relief in the form
of specific performance, and that an award of damages may not be adequate to compensate the
City for Owner's failure to perform according to the terms of this Agreement. Notwithstanding
the foregoing, the City, in its sole and absolute discretion, may elect the appropriate remedy for
Owner's default under this Agreement.
ARTICLE 5
GENERAL PROVISIONS
5.1 Notices. All notices required pursuant to this Agreement shall be in
writing and shall be deemed to have been duly given (a) upon personal delivery, including
delivery by courier, or (b) three (3) business days after the mailing by registered or certified mail,
return receipt requested, to the Party to receive such notice at the addresses set forth below:
To the City:
City of Carlsbad
Housing and Neighborhood Services
1200 Carlsbad Village Drive
Carlsbad, CA 92008
To the Owner:
Any Party may change the address to which notices are to be sent by notifying the other Parties of the new
address, in the manner set forth above.
5.2 Entire Agreement. The Recitals set forth above, and all exhibits attached
hereto, are hereby incorporated into this Agreement by this reference. This Agreement contains
the entire agreement between the Parties as to the subject matter hereof, and supersedes any and
all prior arrangements and understandings between the Paities, and no other agreement, statement
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or promise made by either Party hereto which is not contained herein shall be binding or valid
provided, however, that nothing in this Section limits the effect or enforceability of the City of
Carlsbad Municipal Code. This Agreement shall not be construed as if it had been prepared by
one of the Parties, but rather as if both Parties had prepared it. The Parties have read and
reviewed this Agreement and agree that any rule of construction to the effect that ambiguities are
to be resolved against the drafting party (including but not limited to Civil Code Section 1654 as
may be amended from time to time) shall not apply to the interpretation of this Agreement. In
the event of any conflict between the terms of this Agreement, and the terms of the disclosure
statement executed by the City and the Owner in conjunction with this Agreement, the terms of
this Agreement shall prevail.
5 .3 Amendment. This Agreement may be amended only by the written
agreement of the Parties.
5.4 Severability. In the event any limitation, condition, restriction, covenant,
or provision contained in this Agreement is to be held invalid, void or unenforceable by any court
of competent jurisdiction, or if any provision of this Agreement is rendered invalid or
unenforceable pursuant to any California statute which became effective after the Effective Date,
the remaining portions of this Agreement shall nevertheless remain in full force and effect.
5.5 Waiver. The waiver of or failure to enforce any provision of this
Agreement shall not operate as a waiver of any future breach of any such provision or any other
provisions hereof.
5.6 Covenant Running with the Land. The covenants and conditions herein
contained shall apply to and bind, during their respective periods of fee ownership, Owner and its
heirs, executors, administrators, successors, transferees, and assignees ( each a "Transferee")
having or acquiring any right, title or interest in or to any part of the Property, whether by
operation of law or in any manner whatsoever, and shall run with and burden the Property for the
entire Term unless or until released in accordance with Article 3. All of the provisions of this
Agreement shall be enforceable as equitable servitudes and shall constitute covenants running
with the land pursuant to applicable laws, including without limitation Section 1468 of the
California Civil Code. Each covenant to do, or to refrain from doing, some act on the Property
hereunder: (a) is for the benefit of the Property and is a burden on the Property, (b) runs with the
Property, and (c) is binding upon each Party and each successive owner during its ownership of
the Property or any po1tion thereof, and shall be a benefit to and a burden upon each Pa1ty and
the Property hereunder and each other person or entity succeeding in an interest to the Property.
5.7 Assignment and Assumption; Release. Provided that a Transferee
expressly assumes Owner's obligations hereunder pursuant to an assignment and assumption
agreement in a form approved by the City in connection with the transfer of any part of the
Property, the Owner shall be released from all obligations following the recordation of such
assignment and assumption agreement in the Official Records.
5.8 Non-Discrimination. The Second Dwelling Unit shall be available for
occupancy to members of the general public. The Owner shall not give preference to any
particular class or group of persons in renting the Second Dwelling Unit or selling the Property,
except to the extent that the Second Dwelling Unit is required to be rented to Eligible
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Households; provided, however, there shall be no discrimination against or segregation of any
person or group of persons, on account of race, color, creed, religion, sex, sexual orientation,
marital status, national origin, source of income (e.g., SSI), age, ancestry, disability, or any other
basis prohibited by the Fair Housing Act or the Fair Employment and Housing Act in the leasing,
transferring, use, occupancy, tenure, or enjoyment of the Second Dwelling Unit nor shall the
Owner or any person claiming under or through the Owner, establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location, number,
use, or occupancy of Tenants of the Second Dwelling Unit. The Owner has agreed to the
obligations set forth in this Section in consideration for the Incentive.
5.9 Relationship of Parties. Nothing contained in this Agreement shall be
deemed or construed by the Parties or any third party to create the relationship of principal and
agent or of partnership or of joint venture or of association. The relationship of the Parties is that
of an owner of real property and an administrator of a City inclusionary housing program;
furthermore, the Parties agree and acknowledge that this Agreement is in furtherance of the
inherent power of City to regulate the use of land within City's jurisdiction. Owner further
acknowledges, understands and agrees that the City does not undertake or assume any
responsibility for or duty to Owner to select, review, inspect, supervise, pass judgment on, or
infonn Owner of the quality, adequacy or suitability of the Second Dwelling Unit (or any other
portion of the Property). The City owes no duty of care to protect Owner against negligent,
faulty, inadequate or defective building or construction or any condition of the Property and
Owner agrees that neither Owner, or Owner's heirs, successors or assigns shall ever claim, have
or assert any right or action against the City for any loss, damage or other matter arising out of or
resulting from any condition of the Property and will hold the City harmless from any liability,
loss or damage as set forth in Section 5 .10. Any review by the City of any documents submitted
by the Owner to the City pursuant to this Agreement, including, but not limited to any Tenant
Lease, is solely to confirm compliance with the requirements of this Agreement and shall not be
deemed to be a representation of any kind of the validity or legal enforceability of such
document(s).
5.10 Hold Harmless; Indemnity. Owner shall indemnify, defend (with counsel
reasonably selected by the City), and hold harmless the City and its officers, officials, agents, and
employees against any and all liability, claims, actions, causes of action or demands whatsoever
against any of them, including any injury or death of any person or damage to property or other
liability of any nature, or any claims by a Tenant, a former Tenant or prospective Tenant, arising
out of Owner's performance of its obligations hereunder, except where the cause of such is the
gross negligence or willful misconduct of the City. The indemnification obligations set forth in
this Section shall survive any termination or expiration of this Agreement.
5 .11 Applicable Law and Venue. This Agreement shall be governed by
California law. Venue for any dispute arising out of this Agreement shall be San Diego County.
5.12 Attorneys' Fees and Costs. In the event any action or proceeding in court
or other dispute resolution mechanism permitted under this Agreement is commenced by either
party to interpret or enforce the terms of this Agreement, the prevailing Party therein shall be
entitled to recover from the non-prevailing Party all of the prevailing Party's reasonable costs and
expenses in connection therewith, including on any appeal and including expert witness fees,
document copying expenses, exhibit preparation costs, carrier expenses and postage and
15
IO 10\17\2059295. l
communication expenses, and reasonable attorneys' fees and costs for the services rendered to the
prevailing Pa1iy in such action or proceeding (which shall include the reasonable costs for
services of the City's in-house counsel).
5 .13 Time is of the Essence. In all matters under this Agreement, the Parties
agree that time is of the essence. References in this Agreement to days shall be to calendar days.
If the last day of any period to give or reply to a notice, meet a deadline or unde1take any other
action occurs on a day that is not a day of the week on which the City of Carlsbad is open to the
public for carrying on substantially all business functions (a "Business Day"), then the last day
for giving or replying to such notice, meeting such deadline or unde1iaking any such other action
shall be the next succeeding Business Day. In no event shall a Saturday or Sunday be considered
a Business Day.
5.14 Interpretation. The use in this Agreement of the words "including", "such
as" or words of similar import when used with reference to any general term, statement or matter
shall not be construed to limit such statement, term or matter to the specific statements, terms or
matters, unless language of limitation, such as "and limited to" or words of similar import are
used with reference thereto. The headings of this Agreement are for convenience only and do not
in any way limit or amplify the terms or provisions hereof. All pronouns and variations thereof
shall be deemed to refer to the masculine, feminine, or neuter, and to the singular or plural, as the
identity of the patty or parties may require.
5.15 Government Standards. In the event any standard established and
maintained by any governmental agency which is necessary to give effect to this Agreement
ceases to exist, and no comparable replacement is issued, the Parties shall create a replacement
standard utilizing the formula and factors previously used to create the discontinued standard.
5.16 No Limitation on Municipal Powers. Nothing in this Agreement shall
limit, waive, or otherwise impair the authority and discretion of: (a) the City's Building
Department, in connection with the review and approval of any proposed construction plans for
the Property (or any change to such plans), or any use, or proposed use, of the Property; or (b)
any other office or department of the City acting in its capacity as a governmental regulatory
authority with jurisdiction over the development, use, or operation of the Property.
5.17 Counterparts. This Agreement may be executed in multiple originals, each
of which is deemed to be an original, and may be signed in counterparts, which shall constitute
one and the same agreement.
Remainder of Page Left Intentionally Blank
16
1010\1712059295. l
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the Effective
Date.
CITY:
CITY OF CARLSBAD, a municipal corporation
By:
Name:
Its:
OWNER:
By:
Name:
By:
Name:
(Signatures must be notarized)
1010\1712059295, l
IO JO\l 7\2059295. J
EXHIBIT A
PROPERTY LEGAL DESCRIPTION
[To be Inserted]
A-1
1010\17\2059295. l
EXHIBITB
DRAWING DEPICTING PRIMARY UNIT AND
SECOND DWELLING UNIT ON PROPERTY
[To be Inserted]
B-1
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L .J L-.J
COVERED DECK
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SECOND FLOOR PLAN -ELEV A TION 'A'
SECOND DWHLl1'G UNIT CARl'CT
BEDRM SUITE
CARPCT
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BATH
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9'-0' CEILING I
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~~:---=-------~~--~----------~
GREAT RM
CARPET
9'-0" CEILING
2-CAR GARAGE
9'-0"CEJLING
FIRST FLOOR PLAN -ELEVATION IA'
SCALE: 1/4'' = l '-0''
NOOK
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9'--0" CEILING
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KITCHEN
TILE
91-0• CEIUNG
DINING RM
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9'--0"CEILING
EXHIBITC
FORM OF OWNER CERTIFICATION
To: City of Carlsbad ("City")
From: __________ [name ofowner(s)] ("Owner(s)")
Address of Property: ___________ ("Property")
Date:
By signature below, I/we _________ [insert name or names of Owner(s)J hereby certify to the City,
under penalty of perjury, that the second dwelling unit located on the Property (the "Second Dwelling Unit") is being
utilized in accordance with the "Agreement Containing Covenants and Restrictions Governing Rental of Affordable
Second Dwelling Unit" (the "Agreement") recorded against the Property.
In accordance with Section 2.2 of the Agreement, I/we provide the following information regarding the Second
Dwelling Unit:
1. Tenant name:
2. Size of Tenant's household:
3. Second Dwelling Unit size (number of bedrooms):
4. Date Second Dwelling Unit first occupied by Tenant: ________ _
5. A copy of the Tenant's annual income certification is attached.
This Owner Certification is signed on-------~ 20_, under penalty ofpe1jury.
By:
Owner signature
Date:
Due Date: June 30 of each calendar year.
2 CA 05/27/2016