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HomeMy WebLinkAboutSDP 97-15; Carlsbad Family Housing Partnership; 2000-0619975; Affordable Housing-Regulatory Agreement & Dec. of Restrictive Covenants. I r* a* - Imc - ‘18. 2000-0~19975 I 3071 NtlU 155 2000 9:19 f=wi RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: OFFICIAL RECORDS W DIEGO COUNTY RECOKDEK’S OFFICE! City of Carlsbad City Clerk’s Office Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad, CA 92008 (Space above for Recorder’s Use) f-v $5 FIRST AMENDMENT TO THE a\” REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS (Carlsbad Family Housing Partnership- Ranch0 Carrillo) This First Amendment to the Regulatory Agreement and Declaration of Restrictive Covenants (“First Amendment”) is made and entered into this 4 day of Dt3ckR ,2000, by and between the City of Carlsbad, a municipal corporation (“City”) and Carlsbad Family Housing Partnership, a California limited partnership (“Owner”). RECITALS WHEREAS, on January 8,1999, City and Owner executed a Regulatory Agreement and Declaration of Restrictive Covenants for affordable apartment units within the Ranch0 Carrillo Master Plan (the “Agreement”) on the real property in the City of Carlsbad, County of San Diego, more particularly described in Exhibit A attached hereto and incorporated herein; and, WHEREAS, on January 22,1999, the Agreement was recorded in the Official Records of San Diego County as Document No. 1999-0038228; and WHEREAS, City and Owner desire to amend the Agreement consistent with the loan documents of other regulatory entities related to the affordability levels of the affordable housing units within the Ranch0 Can410 Affordable Housing Development. NOW, THEREFORE, City and Owner hereby agree to amend the Agreement as follows: Section 1 Section 1 of the Agreement is hereby amended by adding subsections “u” and “v” as follows: ‘21. “Low Income Household” shall mean a household with an Adjusted Income that does not exceed the qualifying limits for low income households as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, and as published by HCD. V. “Low Income Unit” shall mean the Units limited to occupancy by Low Income Households pursuant to Section 2.1 below.” th.3 is; WC? 1 September 28,200O 5w w/r- Section 2 Section 2.1 of the Agreement is hereby amended in its entirety as follows: “2.1 Occupancy Requirement. Twenty-three (23) of the Units shall be rented and occupied by or, if vacant, available for rental and occupancy by Very Low Income Households and thirty-four (34) of the Units shall be rented and occupied by or, if vacant, available for rental and occupancy by Low Income Households. The remainder of the Units shall be occupied by Moderate Income Households.” Section 3 Section 2.2 of the Agreement is hereby amended in its entirety as follows: “2.2 Allowable Rent. a. Subject to Section 2.3 below, the Rent charged the occupants of the Very Low Income Units shall not exceed one-twelfth of thirty percent (30%) of fifty percent (50%) of Median Income, adjusted for household size. The Rent charged the occupants of the Low Income Units shall not exceed one-twelfth of thirty percent (30%) of sixty percent (60%) of Median Income, adjusted for household size. The Rent charged the occupants of the Moderate Income Units shall not exceed one-twelfth of thirty percent (30%) of ninety percent (90%) of Median Income, adjusted for household size. b. Subject to Section 2.3.b. below, in calculating the allowable Rent for the Very Low, Low and Moderate Income Units, the following assumed household sizes shall be utilized: Number of Bedrooms Assumed Household Size Studio One Two Three Four 1 2 3 4 5’” Section 4 follows: Section 2.3 a. of the Agreement is hereby amended in its entirety as “2.3 Increased Income of Occupying Households a. In the event, upon recertification of an occupant household’s income, the Owner discovers that a Very Low Income Household no longer qualifies as a Very Low Income Household (but does qualify as a Low Income Household or Moderate Income Household), such household’s Unit shall be considered a Low Income Unit or a Moderate Income Unit (and the Rent may be increased to one-twelfth of thirty percent of sixty percent (60%) of Median Income for a qualifying Low Income Household or one-twelfth of thirty percent of ninety (90%) percent of Median Income for a qualifying Moderate Income Household upon sixty (60) days written 2 September 28,200O 5 3073 notice to the household) and the Owner shall rent the next available Unit to a Very Low Income Household to comply with the requirements of Section 2.1 above. In the event that the income of a Low Income Household increases above the qualifying limit for a Low Income Household (but does qualify as a Moderate Income Household), such household’s Unit shall be considered a Moderate Income Unit (and the Rent may be increased to one-twelfth of thirty percent of ninety percent (90%) of Median Income upon sixty (60) days written notice to the household) and the Owner shall rent the next available Unit to a Low Income Household to comply with the requirements of Section 2.1 above. In the event that the income of a Very Low, Low or Moderate Income Household increases above the qualifying limit for a Moderate Income Household, the rent shall remain at the level required for a Moderate Income Unit and the Unit shall be deemed to be a Moderate Income Unit until the occupying household vacates the Unit, and the next available Unit shall be rented to a Very Low, Low or Moderate Income Household as necessary to meet the requirements of Section 2.1 above. Moreover, a Unit occupied by a Very Low, Low or Moderate Income Household shall be deemed, upon the termination of such Very Low, Low or Moderate Income Household’s occupancy, to be continuously occupied by a Very Low, Low or Moderate Income Household, as applicable, until reoccupied, at which time the character of the Unit shall be re-determined.” Section 5 Section 3.1 of the Agreement is hereby amended in its entirety as follows: “3.1 Income Certification. The Owner will obtain, complete and maintain on file, immediately prior to initial occupancy and annually thereafter, income certifications from each Very Low, Low and Moderate Income Household renting any of the Units. The Owner shall make a good faith effort to verify that the income provided by an applicant or occupying household 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 current 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 written request.” Section 6 Section 4.5 of the Agreement is hereby amended in its entirety as follows: “4.5 Nondiscrimination. All of the Units shall be available for occupancy on a continuous basis to members of the general public who are income eligible. Owner shall not give preference to any particular class or group of persons in renting or selling the Units, except to the extent that the Units are required to be leased to Very Low, Low and Moderate Income Households or to Agency or City displacees pursuant to Section 4.6 below. 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, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor shall 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, 3 September 28,200O 307q use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons for the operation and management of the Development. All deeds, leases or contracts made or entered into by Owner as to the Units or the Development or portion thereof, shall contain covenants concerning discrimination as prescribed by the Loan Agreement.” Section 7 follows: Section 6.11 of the Agreement is hereby amended in its entirety as “6.11 Section 42(h)(6)(E)(ii) of the IRC. Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge that Section 42(h)(6)(E)(ii) of the Internal Revenue code of 1986, as amended, provides that eviction or termination of tenancy (other than for good cause) of an existing tenant of any Very Low Income Unit, Low Income Unit or Moderate Income Unit or any increase in the gross rent with respect to such unit not otherwise permitted under Section 42 for a period of three (3) years after the date the building is acquired by foreclosure or instrument in lieu of foreclosure will invalidate the extended use agreement and cause the disallowance of the low income housing tax credits. The City agrees that, in the event the City acquires the Development through foreclosure or instrument in lieu of foreclosure, it will refrain for three (3) years from terminating tenancies (other than for good cause) or increasing rents in a manner not permitted by Section 42. “ Section 8 Authority. The parties executing this First Amendment on behalf of Owner represent and warrant that they have the legal power, right and actual authority to bind Owner to the terms and conditions hereof. Section 9 Severabilitv. Each provision, term, condition, covenant, and/or restriction, in whole and in part, in this First Amendment shall be considered severable. In the event any provision, term, condition, covenant, and /or restriction, in whole and in part, in this First Amendment is declared invalid, unconstitutional, or void for any reason, such provision or part thereof shall be severed from this First Amendment and shall not affect any other provision, term, condition, covenant, and/or restriction, of this First Amendment and the remainder of this First Amendment shall continue in full force and effect. Section 10 Effective Date. This First Amendment shall be effective upon the date and year first above written. Section 11 APreement Provisions. Notwithstanding this First Amendment, all other provisions of the Agreement shall remain in full force and effect. September 28,200O 7 IN WITNESS WHEREOF, the City and Owner have executed this Agreement by duly authorized representatives, CARLSBAD FAMILY HOUSING PARTNERSHIP, a California limited partnership By: By: Title: By: By: Title: Housing Opportunities, Inc., a California nonprofit public benefit corporation, Managing General Partner Barone Galasso & Associates Incorporated a Delaware corporation, Proper notarial acknowledgment of execution by Owner must be attached) CITY OF CARLSBAD, a municipal corporation -,-CO- City Clerk ::J;;gti- City Attorney 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 officer(s) signing to bind the corporation.) September 28,200O STATE OF CALIFORNIA 1 ) ss. COUNTY OF SAN DIEGO ) on otd. Y ,2O&, before me, j4 Cl / AA b i a z I Notary Public in and for said State, personally appeared lvifda&?/ 4s. GdCSS3 personall- to u (3) to be the person@ whose name@ is/m subscribed to the within instrument and acknowledged to me that he/s&&q executed the same in his/he&h& authorized capacity@& and that by his~r signature(e) on the instrument, the person@, or the entity upon behalf of which the person@ acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) STATE OF CALIFORNIA 1 ) ss. COUNTY OF SAN DIEGO ) On O&j. I ‘3 ,20~, before me, FJ’lc, /e ?L i a~ Notary Public in and for said State, personally appeared L3 c 1 & c/ j&c I kc /r personallvwn to me (or proved to me on the basis of satisfactory evidence) to be the a person(&whose name(e is/w subscribed to the within instrument and acknowledged to me that he/se executed the same in his/he&k authorized capacity(ie+, and that by his/he&h& signature@ on the instrument, the person@+, or the entity upon behalf of which the person& acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) EXHIBIT A Property Description Lot 207 of Carlsbad Tract 97-02 Ranch0 Carrillo Villages “A Through D” according to Map No. 13582 filed with the County Recorder of San Diego County on June 10,1998. - .I . ‘ l L . ,’ - 3079 Exhibit NO. 3 EXHIBIT E This ins!rumen? is rertifie:l to be a t:r;t, enil RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: offix of ihe C;.!:n:y 2 9.chr of Ssn kg0 Cim?;. City of Carlsbad City Clerk’s Office Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad, CA 92008 (Space above for Recorder’s Use) REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS This Regulatory Agreement and Declaration of Restrictive Covenants (the “Agreement”) is made and entered into as of this 8th day of January, 1999, by and between the City of Carlsbad, a municipal corporation (the “City”) and Carlsbad Family Housing Partnership, a California limited partnership (“Owner”). RECITALS 1. The City has entered into a Loan Agreement with Owner under which the City will loan City Housing Trust Fund monies (the “Loan”) to Owner which will be used, together with funds obtained from other sources, for the development and construction of one hundred sixteen (1 16) residential units on the real property in the City of Carlsbad, County of San Diego, more particularly described in Exhibit A attached hereto and incorporated herein (the “Property”). 2. The City intends to utilize the Development to obtain affordable housing production credits for the Redevelopment Agency of the City of Carlsbad (the “Agency”) pursuant to Health and Safety Code Section 33413(b)(2)(A)(ii) as newly constructed housing units located outside of the Carlsbad Village Redevelopment Project Area and available at affordable housing cost to low and moderate income. households. Such units are required to remain affordable to such households for not less than the period of the land use controls established in the Redevelopment Plan for the Carlsbad Village Redevelopment Project Area. This Agreement is intended to implement this requirement. 3. The City has agreed to loan funds to Owner on the condition that the Development be maintained and operated in accordance with Health and Safety Section 33413(b)(2)(A)(ii) and in accordance with additional restrictions concerning affordability, operation, and maintenance of the Development, as specified in this Agreement. 4. In consideration of receipt of the Loan at an interest rate substantially below the market rate, Owner has further agreed to observe all the terms and conditions set forth below. Ranch0 Carrillo Reg Agr.Final 1 01/14/99 - 5. In order to ensure that the entire Development will be used and operated in . accordance with these conditions and restrictions, the City and Owner wish to enter into this Agreement. THEREFORE, the City and Owner hereby agree as follows: ARTICLE 1 Definitions 1.1 Definitions When used in this Agreement, the following terms shall have the respective meanings assigned to them in this Article 1. a. “Adjusted Income” shall mean the total anticipated annual income of all persons in a household, as calculated in accordance with 25 California Code of Regulations Section 69 14 or pursuant to a successor State housing program that utilizes a reasonably similar method of calculation of adjusted income. In the event that no such program exists, the City shall provide the Owner with a reasonably similar method of calculation of adjusted income as provided in said Section 69 14. b. “Agency” shall mean the Carlsbad Redevelopment Agency, Carlsbad, California, a public body, corporate and politic. C. “Agreement” shall mean this Regulatory Agreement and Declaration of Restrictive Covenants. d. “City” shall mean the City of Carlsbad, a municipal corporation. e. “Deed of Trust” shall mean the deed of trust to the City on the Property which secures repayment of the Loan and performance of this Agreement. f. “Development” shall mean the Property and the one hundred sixteen (1 16) units to be constructed on the Property, as well as all landscaping, roads and parking spaces existing thereon, as the same may from time to time exist. g* “HCD” shall mean the California Department of Housing and Community Development. h. “Loan” shall mean all funds loaned to Owner pursuant to the Loan Agreement. i. “Loan Agreement” shall mean the City Loan Agreement entered into by and between the City and Owner and dated of even date herewith. Ranch0 Carrillo Reg Agr.Final 2 01/14/99 j. “Median Income” shall mean the median gross yearly income adjusted for actual household size, in the County of San Diego, California, as published from time to time by HCD. In the event that such income determinations are no longer publishedJor are not updated for a period of at least eighteen (18) months, the City shall provide the Owner with other income determinations which are reasonably similar with respect’ to methods of calculation to those previously published by HCD. k. “Moderate Income Household” shall mean a household whose annual gross income does not exceed ninety percent,(90%) of Median Income, adjusted for household size. I. “Moderate Income Units” shall mean the Units limited to occupancy by Moderate Income Households pursuant to Section 2.1 below. m. “Note” shall mean the promissory note from the Owner to the City evidencing all or any part of the Loan. n. “Owner” shall mean Carlsbad Family Housing Partnership, a California limited partnership, and its successors and assigns to the Development. 0. “Property” shall mean the real property described in Exhibit A attached hereto and incorporated herein. P* “Rent” shall mean the total of monthly payments by the tenants of a Unit for the following: use and occupancy of the Unit and land and associated facilities, including parking; any separately charged fees or service charges assessed by Owner which are required of all tenants, other than security deposits; the cost of an adequate level of service for utilities paid by the tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not telephone service; any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than Owner, and paid by the tenant. 9. “Term” shall mean the period of time beginning on the date of recordation of this Agreement and ending fifty-five (55) years after a Certificate of Occupancy is issued by the City for all Units, but in no event later than January 1, 2056. r. “Units” shall mean the one hundred sixteen (116) rental units to be constructed on the Property by the Owner, but excluding therefrom one (1) resident manager unit. S. “Very Low Income Household” shall mean a household with an Adjusted Income that does not exceed the qualifying limits for very low income households as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937, and as published by HCD. Ranch0 Carrillo Reg Agr.Final 3 .01/14/99 - .- 3082 t. “Very Low Income Units” shall mean the Units which, pursuant to Section 2.2 below, are required to be occupied by Very Low Income Households. ARTICLE 2 Affordability Covenants 2.1 Occupancy Requirement. a. Fifty-seven (57) of the Units shall be rented and occupied by or, if vacant, available for rental and occupancy by Very Low Income Households. The remainder of the Units shall be occupied by Moderate Income Households. 2.2 Allowable Rent. a. Subject to Section 2.3 below, the Rent charged the occupants of the Very Low Income Units shall not exceed one-twelfth of thirty percent (30%) of fifty percent (50%) of Median Income, adjusted for household size. The Rent charged the occupants of the Moderate Income Units shall not exceed one-twelfth of thirty percent (30%) of ninety percent (90%) of Median Income, adjusted for household size. b. Subject to Section 2.3.b. below, in calculating the allowable Rent for the Very Low Income Units and the Moderate Income Units, the following assumed household sizes shall be utilized: Number of Bedrooms Assumed Household Size Studio One Two Three Four 2.3 Increased Income of Occupying Households a. In the event, upon recertification of an occupant household’s income, the Owner discovers that a Very Low Income Household no longer qualifies as a Very Low Income Household (but does qualify as a Moderate Income Household), such household’s Unit shall be considered a Moderate Income Unit (and the Rent may be increased to one-twelfth of thirty percent of ninety percent (90%) of Median Income upon sixty (60) days written notice to the household) and the Owner shall rent the next available Very Low Income Unit to a Very Low Income Household to comply with the requirements of Section 2.1 above. In the event that the income of a Very Low Income Household or a Moderate Income Household increases above the qualifying limit for a Moderate Income Household, the rent shall remain at the level required for a Moderate Income Unit and the Unit shall be deemed to be a Moderate Income Unit until the occupying household vacates the Unit, and the next available Unit shall be rented to a Very Low income Household or an Moderate Income Ranch0 Carrillo Reg Agr.Final 4 01/14/99 . * . - Household as necessary to meet the requirements of Section 2. I above. Mcreover, a Unit occupied by a Very Low Income Household or Moderate Income Household shall be deemed, upon the termination of such Very Low Income Household’s or Moderate Income Household’s occupancy, to be continuously occupied by a Very Low Income l-‘ousehold or a Moderate Income Household, as applicable, until reoccupied, at which time the character of the Unit shall be redetermined. b. If the Development is subject to federal Low Income Housing Tax Credit Program requirements, the provisions of those requirements regarding (i) rental and occupancy restrictions (provided such restrictions are more restrictive than those set forth herein), (ii) assumed household size, and (iii) continued occupancy by households whose incomes exceed the eligible income limitations, and rents to be charged to those households shall apply in place of the provisions set forth in subsections 2. I (a), 2.2(b) and 2.3(a) above. 2.4 Lease Provisions. Owner shall include in leases for all Units provisions which authorize Owner to immediately terminate the tenancy of any household one or more of whose members misrepresented any fact material to the household’s qualification as a Very Low Income Household or a Moderate Income Household. Each lease or rental agreement shall also provide that the household is subject to annual certification in accordance with Section 3.1 below, and that, if the household’s income increases above the applicable limits for a Very Low Income Household or a Moderate Income Household, as applicable, such household’s Rent may be subject to increase. 2.5 Section 8 Certificate Holders. The Owner will accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act, or its successor. The Owner shall not apply selection criteria to Section 8 certificate or voucher holders that is more burdensome than criteria applied to all other prospective tenants, nor shall the Owner apply or permit the application of management policies or lease provisions with respect to the Development which have the effect of precluding occupancy of units by such prospective tenants. 2.6 Condominium Conversion. The Owner shall not convert Development units to condominium or cooperative ownership or sell condominium or cooperative conversion rights to the Property during the Term of this Agreement. ARTICLE 3 Income Certification And Reporting 3.1 Income Certification. The Owner will obtain, complete and maintain on file, immediately prior to initial occupancy and annually thereafter, income certifications from each Very Low Income Household and each Moderate Income Household renting any of the Units. The Owner shall make a good faith effort to verify that the income provided by an applicant or occupying household 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 Ranch0 Carrillo Reg Agr.Final 5 01/14/99 3084 the most recent pay period; (2) obtain an income tax return for the most recent tax year; (31 conduct a credit agency or similar search; (4) obtain an income verification form from . the applicant’s current 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 written request. 3.2 Annual Report to City. Each year Owner shall submit an annual report to the City, in a form approved by the City. The annual report shall include for each Unit covered by this Agreement, the Rent and the income and household size of the household occupying the Unit. The report shall also state the date the tenancy commenced for each rental Unit and such other information as the City may be required by law to obtain. 3.3 Additional Information. Owner shall provide any additional information reasonably requested by the City. Upon five (5) days prior written request and during regular business hours, the City shall have the right to examine and make copies of all books, records or other documents of Owner which pertain to any Unit. 3.4 Records. Owner shall maintain complete, accurate and current records pertaining to the Units, and, upon five (5) days prior written request by the City, shall permit any duly authorized representative of the City to inspect records, including records pertaining to income and household size of tenant households. ARTICLE 4 Operation Of The Development 4.1 Residential Use. The Development shall be operated only for residential use. No part of the Development shall be operated as transient housing. 4.2 Compliance with Loan Agreement. Owner shall comply with all the terms and provisions of the Loan Agreement. 4.3 Property Tax Exemption. Owner shall not apply for a property tax exemption for the Property under any provision of law other than Revenue and Taxation Section 214(g) without the City’s prior written consent. 4.4 Taxes and Assessments. Owner shall pay all real and personal property taxes, assessments and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Owner shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event Owner exercises its right to contest any tax, assessment, or charge against it, Owner, on final determination of Ranch0 Carrillo Reg Agr.Final 6 01/14/99 3085 the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest. 4.5 Nondiscrimination. All of the Units shall be available for occupancy on a continuous basis to members of the general public who are income eligible. Owner shall not give preference to any particular class or group of persons in renting or selling the Units, except to the extent that the Units are required to be leased to Very Low Income Households and Moderate Income Households or to Agency or City displacees pursuant to Section 4.6 below. 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, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor shall 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, lessees, sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons for the operation and management of the Development. All deeds, leases or contracts made or entered into by Owner as to the Units or the Development or portion thereof, shall contain covenants concerning discrimination as prescribed by the Loan Agreement. 4.6 Preference to Displacees. Owner shall give a preference in the rental of any Units to eligible households displaced by activity of the Agency or the City upon receiving a written request of the Agency or the City regarding such displacement and provided giving such a preference does not violate any requirement of the Low Income Housing Tax Credit Program. ARTICLE 5 Property Management And Maintenance 5.1 Management Responsibilities. The Owner is responsible for all management functions with respect to the Development, including without limitation the selection of tenants, certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The City shall have no responsibility over management of the Development. The Owner shall retain a professional property management company approved by the City in its reasonable discretion to perform its management duties hereunder. A resident manager shall also be required, selection of whom shall be at the discretion of the Owner. 5.2 Management Agent; Periodic Reports. The Development shall at all times be managed by an experienced management agent reasonably acceptable to the City, with demonstrated ability to operate residential facilities like the Development in a manner that will provide decent, safe, and sanitary housing (as approved, the “Management Agent”). The Owner shall submit for the City’s approval the identity of any proposed Management Agent. The Owner shall also submit such additional information about the background, Ranch0 Carrillo Reg Agr.Final 7 0104199 experience and financial condition of any proposed Management Agent as is reasonably necessary for the City to determine whether the proposed Management Agent meets the standard for a qualified Management Agent set forth above. If the proposed Management Agent meets the standard for a qualified Management Agent set forth ab -ve, the City shall approve the proposed Management Agent by notifying the Owner in writing. Unless the proposed Management Agent is disapproved by the City within thirty (30) days, which disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed approved. 5.3 Performance Review. The City reserves the right to conduct an annual (or more frequently, if deemed necessary by the City) review of the management practices and financial status of the Development. The purpose of each periodic review will be to enable the City to determine if the Development is being operated and managed in accordance with the requirements and standards of this Agreement. The Owner shall cooperate with the City in such reviews. 5.4 Replacement of Management Agent. If, as a result of a periodic review, the City determines in its reasonable judgement that the Development is not being operated and managed in accordance with any of the material requirements and standards of this Agreement, the City shall deliver notice to Owner of its intention to cause replacement of the Management Agent, including the reasons therefor. Within fifteen (15) days of receipt by Owner of such written notice, City staff and the Owner shall meet in good faith to consider methods for improving the financial and operating status of the Development, including, without limitation, replacement of the Management Agent. If, after such meeting, City staff recommends in writing the replacement of the Management Agent, Owner shall promptly dismiss the then Management Agent, and shall appoint as the Management Agent a person or entity meeting the standards for a Management Agent set forth in Section 5.2 above and approved by the City pursuant to Section 5.2 above. Any contract for the operation or management of the Development entered into by Owner shall provide that the contract can be terminated as set forth above. Failure to remove the Management Agent in accordance with the provisions of this Section shall constitute default under this Agreement, and the City may enforce this provision through legal proceedings as specified in Section 6.3. 5.5 Approval of Management Policies. The Owner shall submit its written management policies with respect to the Development to the City for its review, andshall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement. 5.6 Property Maintenance. The Owner agrees, for the entire Term of this Agreement, to maintain all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, Ranch0 Carrillo Reg Agr.Final 8 01/14/99 ’ - (, ’ 3087 state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials. The City places prime importance on quality maintenance to protect its investment and to ensure that all Agency and City-assisted affordable housing projects wrthin the City are not allowed to deteriorate due to below-average maintenance. Normal wear and tear of the Development will be acceptable to the City assuming the Owner agrees to provide all necessary improvements to assure the Development is maintained in good condition. The Owner shall make all repairs and replacements necessary to keep the improvements in good condition and repair. In the event that the Owner breaches any of the covenants contained in this section and Owner fails to commence cure of such default within a period of five (5) days after written notice from the City with respect to graffiti, debris, waste material, and general maintenance or thirty (30) days after written notice from the City with respect to landscaping and building improvements (and subject to any stricter requirements included in any applicable City Ordinance), then the City, in addition to whatever other remedy it may have at law or in equity, shall have the right to enter upon the Property and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the City shall be permitted (but is not required) to enter upon the ’ Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, and to attach a lien on the Property, or to assess the Property, in the amount of the reasonable expenditures arising from such acts and work of protection, maintenance, and preservation by the City and/or costs of such cure, including an administrative charge equal to fifteen percent (15%) of such expenditures, which amount shall be promptly paid by the Owner to the City upon demand. ARTICLE 6 Miscellaneous 6.1 Term. The provisions of this Agreement shall apply to the Property for the entire Term even if the entire Loan is paid in full prior to the end of the Term. This Agreement shall bind any successor, heir or assign of Owner, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by the City. The City makes the Loan on the condition, and in consideration of, this provision, and would not do so otherwise. 6.2 Covenants to Run With the Land. The City and Owner hereby declare their express intent that the covenants and restrictions set forth in this, Agreement shall run with the land, and shall bind all successors in title to the Property, provided, however, that on the expiration of the Term of this Agreement said covenants and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof shall be held conclusively to have been executed, delivered and accepted subject to such covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other Ranch0 Carrillo Reg Agr.Final 9 01/14/99 instrument, unless the City expressly releases such conveyed portion of the Property from the requirements of this Agreement. 6.3 Enforcement by the City. If Owner fails to perform any obligation under this Agreement, and fails to cure the default within 30 days after the City has notified the Owner in writing of the default or, if the default cannot be cured within 30 days, failed to commence to cure within 30 days and thereafter diligently pursue such cure, the City shall have the right to enforce this Agreement by any or all of the following actions, or any other remedy provided by law: a. Calling the Loan. The City may declare a default under the Note, accelerate the indebtedness evidenced by the Note, and proceed with foreclosure under the Deed of Trust. b. Action to Compel Performance or for Damages. The City may bring an action at law or in equity to compel Owner’s performance of its obligations under this Agreement, and/or for damages. C. Remedies Provided Under Loan Agreement. The City may exercise any other remedy provided under the Loan Agreement. 6.4 Enforcement by the Agency. The City and the owner agree that the Agency is a third party beneficiary of this Agreement. The City and the Owner agree that this Agreement shall be fully enforceable by the Agency. 6.5 Attorneys Fees and Costs. In any action brought to enforce this Agreement, the prevailing party shall be entitled to all reasonable costs and expenses of suit, including reasonable attorneys’ fees. This section shall be interpreted in accordance with California Civil Code Section 17 7 7 and judicial decisions interpreting that statute. 6.6 Recording and Filing. The City and Owner shall cause this Agreement, and all amendments and supplements to it, to be recorded against the Property in the Official Records of the County of San Diego. 6.7 Governing Law. This Agreement shall be governed by the laws of the State of California. 6.8 Amendments. This Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title, and duly recorded in the real property records of the County of San Diego, California. 6.9 Notice. All notices given or certificates delivered under this Agreement shall be deemed received on the delivery or refusal date shown on the delivery receipt, if: (i) personally delivered by a commercial service which furnishes signed receipts of delivery or (ii) mailed by certified mail, return receipt requested, postage prepaid, addressed as shown on the signature page. Any of the parties may, by notice given hereunder, designate any Ranch0 Carrillo Reg Agr.Final 10 01/14/99 . - . - . . 3089 further or different addresses to which subsequent notices, certificates or communications shall be sent. 6.10 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portlons of this Agreement shall not in any way be affected or impaired thereby. 6.11 Section 42(h)(6)(E)(ii) of the IRC. Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge that Section 42(h)(6)(E)lii) of the Internal Revenue code of 1986, as amended, provides that eviction or termination of tenancy (other than for good cause) of an existing tenant of any low-income unit or any increase in the gross rent with respect to such unit not otherwise permitted under Section 42 for a period of three (3) years after the date the building is acquired by foreclosure or instrument in lieu of foreclosure will inva,lidate the extended use agreement and cause the disallowance of the low income housing tax credits. The City agrees that, in the event the City acquires the Development through foreclosure or instrument in lieu of foreclosure, it will refrain for three (3) years from terminating tenancies (other than for good cause) or increasing rents in a manner not permitted by Section 42. Ranch0 Carrillo Reg Agr.Final 11 01/14/99 . * . . > . IN WITNESS WHEREOF, the City and Owner have executed this Agreement by duly authorized representatives, all on the date first written above. CARLSBAD FAMILY HOUSING PARTNERSHIP, a California limited partnership CITY OF CARLSBAD, a municipal By: Housing Opportunities, Inc., a California nonprofit public benefit corporation, Managing General Partner i&q yg;/; Q J-z-- APPROVED AS TO FORM: By: i. ._ ,--.-‘-q- Title: “! b.,;e /’ .,. ,., ..J ,- ,/ :.< ’ @&; ,. ~, By: Barone Galasso & Associates / By: Title: ed a Delaware / City Attorney Ranch0 Carrillo Reg Agr.Final 12 01/14/99 State of California County of ss. Sar?Dkso ____ I Tire ‘illd’l Seal *hoYe :ersonally known to me proved to me on the basis of satisfactory evidence to be the person&$ whose name$$&&% subscribed to the within instrument and acknowledged to me tha@sheM+executed the same in @/he&h&, authorized capacity(iesj. and that by &.&‘hs signature(flon the instrument the perso&, or the entity upon behalf of which the personM acted, executed the instrument. WITNE.5j.S my hand and official seal. Though fhe rnformokm below IS not required by law it may prove valuable to persons relying on fhe document and crxdd prevent Fraudulent removal arid reaffachment of’ this form to another document. TKTe? ~.. ~... .~.~. -.-..--...-..~_-..- ___ -.- _._~-.__ Document Date. _ .~. Ntrmber of Pages ~_ ..----..-__-.-_- . . Slgnercs) Other Than Named Above Capacity(ies) Claimed by Signer ‘\ Signer’s Name. ~~_ _ ._ Individual - y;c j f “I,,“D “.-.‘e / Coworate Officer - TltWs). --.. ~-. .- -- - .._. ~-..-.-~~-~- _.- a--------- Partner - Llmited General Attorney in Fact Trustee Guardian or Conservator Other: __.. ._._ Signer Is Representing: p _ - .- ._. .- .- ._ __- . . ._ __ - -. .- _ ~~~~~~~~~~~~~~~~~.~~~~~~~~~~~~~~~~~~~~~~ c7?czxcTe3 E 1997 Nallorlal N&w, Asswla,1o” . 9350 De Solo be PO Box 2402. ihalsrlinr. CA 91313-2402 Pvd NO 5907 Reoraer Call Toll-Free 1.601%676~5.327 - - . , 3092 EXHIBIT A Property Description Lot 207 of Carlsbad Tract 97-02 Rancho Carrillo Villages “A Through D” according to Map No. 13582 filed with the County Recorder of San Diego County on June 10, 1998. Ranch0 Carrillo Reg Agr.final 01/14/99 lOiJS/OO TElU 09:33 FAX 619 -2 2127 BARONE GALASSO - 8002 BARONE GALASSO & ASSOCIA~S INCORPORATED, a Delaware corporation SECRETARY’S CERTIFICATE I, James V, Barone, Secretary and Treasurer of Barone Galasso & Associates Incorporated, a Delaware corporation (the “Corporation”), hereby certify that attached hereto is a true, correct and complete copy of resolutions adopted by the Board of Directors of the Corporation; such resolutions have not been amended, modified or rescinded and rem& in fill force and effect; and such resolutions are the only resolutions adopted by the of the Corporation’s Board of Directors relating to the transaction described therein. 4 The below-named persons are the duly elected and duly qualified offkers of the Corporation and set Nmc Michael B. Galasso James V. Barone forth opposite their names are their President Secretary and Treasurer IN WITNESS WHEREOF, I have hereunto signed my name. Dated: 3anuaryI( 1999 Secretary and Treasurer I, Michael B. Galasso, President of the Corporation, hereby certify that James V. Barone is the duly elected, qualified and acti that the signature appearing above is his genuine IN WTT’NESS WHEREOF, I have Dated: January x,1999 10i19/00 TEIT 09:34 FAX 619 X2 2127 BAROhT GALASSO RESOLUTIONS OF THE BOARD OF DIRECTORS OF BARONE GALASSO 8i ASSOCIATES INCORPORATED, a Delaware corporation WHEREAS, Barone Galasso & Associates Incorporated, a Delaware corporation (the “Corporation”), was organized for the purpose, among others, of developing and operating low income housing; WHEREAS, the Corporation wishes to participate in undertaking the necessary acts, including, but not limited to, obtaining financing, to develop, construct and operate an affordable housing project located in the City of Carlsbad, County of San Diego, Califomja and part of a master-planned community known as “Rancho Canillo” (the “Project”); WHEREAS, C&bad Family Housing Partnership, a California limited partnership (the “Partnership”), has been formed for the purposes of developing the Project, whirein the Corporation and Housing Opportunities, Inc., a California nonprofit corporation, are the general partners and Boston Capital Tax Credit Fund IV L.P. (the “Withdrawing Limited Partner”) is the limited partner; WHEREAS, the Corporation wishes to enter into an amended and restated partnership agreement for the Partnership (the “Restated Agreement”) wherein (i) the Withdrawing Limited Partner will withdraw as limited partnet, (ii) The California Corporate Tax Credit Fund III, A Limited Partnership, a Massachusetts limited partnership (the “Investor”), will be admitted as the Investment Limited Partner, and (iii) BCCC, Inc., a Massachusetts corporation (the “SLP”), will be admitted as the Special Limited Partner; WHEREAS, on behalf of the Partnership, the Corporation wishes to accept an investment in the Partnership from the Investor in the amount of approximately %2,223,000 (the “Invcsment”); WHEREAS, the Corporation, as general partner of the Partnership, wishes to cause the Partnership to acquire from Continental Ranch, Inc., a Delaware corporation (“Master Developer”), that certain real property ?n which the Project shall be developed (the “Property”), and in connection with such acquisition, the Corporation, as general partner of the Partnership, wishes to cause the Partnership to obtain purchase money financing fi-om the Master Developer in the approximate amount of $3,132,000 (the “Purchase Money Loan”); WHEREAS, the Corporation, as general partner of the Partnership, wishes to cause the Partnership to obtain the following financing to be used in the development and operation of the Project: (a) a loan from the City of Carlsbad (the “City”) in the approximate amount of $1,160,000 (the “City Loan”); (b) a loan from the Master Developer in the approximate amount of 1,297,967; and (c) a construction loan from Union Bank of California (“UB” and together with the City and the Master Developer, the “Lenders”), in the approximate lOi)9/DD THtl 09:35 FM 619 p4? 2127 BAROKE GAUSS0 @loo4 amount of $7,412,000 (the “Bank Loan” and together with the City Loan, the Purchase Money Loan, and the Master Developer ha& the “Project Loans”); and . WHEREAS, the Board of Directors of the Corporation, in its own capacity and in its capacity as general partner of the Partnership, deems it to be in the best interest of the Corporation to take all actions to facilitate the transactions set forth hereinabove by entering into any and all agreements with the Investor, the SLP, the Master Developer, the City, UB, an&or the Partnership, on its own account, and as general partner of the Partnership, and to take any aud all further actions to facilitate the Investment and the Project Loans. NOW, THEREFORE, BE IT RESOLVED, that the Corporation is her&y authorized and directed, and its actions before the date of these resolutions are hereby ratified and confirmed, to enter into any and a11 agreements with the Partnership, the Investor, the SLP and/or any other party as may be required in connection with the Investment including, without limitation, the Restated Agreement, and to take any and all fiuther actions necessary or convenient to facilitate the Investment, and any officer of the Corporation be, and each.of them acting alone hereby is, authorized, empowered and directed, on behalf of the Corporation, to enter into, execute and deliver the Restated Agreement and such other documents as may be required by the Investor and/or the SLP in connection with the Investment, all in form and content acceptable to the officer executing the same, with such modifications as such officer of the Corporation may deem necessw or appropriate, such approval to be conclusively evidenced by the execution and delivery thereof, by and on behalf of the Corporation; RESOLaD FURTHER, that the Corporation, as a general partner of the Partnez-ship, is hereby author&d and directed, and its actions before the date of these resolutions are hereby ratified and confirmed, to cause the Partnership to enter into any and all agreements with the Corporation, the Investor, the SLP and/or any other party as may be required in connection with the Investment, and to take any and all Cuther actions necessary or convenient to facilitate the Investment, and any officer of the Corporation be, and each of them acting alone hereby is, authorized, empowered and directed, on behalf of the Corporation, as a general partner of the Partnership, to cause the Partnership to enter into, execute and deliver any documents as may be required by the Investor andlor the SLP in connection with the Investment, all in form and content acceptable to the officer executing the same, with such modifications as such officer of the Corporation may deem necessary or appropriate, such appro,val to.be conclusively evidenced by the execution and delivery thereof, by and on behalf of the Corporation, as a general parker of the Partnership; RESOLVED FURTHER, that the Corporation, in its own capacity and as a general partner of the Partnership, is hereby autborized and directed, and its actions before the date of these resolutions are hereby ratified and confirmed, to enter Fnto, and fo cause the Partnership to enter into, any and aI1 agreements with the Master DeveIoper as may be required in connection with the acquisition of the Property, and to take any and all further actions necessary or convenient to facilitate the acquisition of the Property, and any officer of the 2 ~0DMA.LADDC&263897;1 lOil9/00 THlJ 09:36 FAS 619 =2 2127 BARONE GALASSO - ,' . * . . . . Boo5 Co~oration be, and each of them acting alone hereby is, authorized, empowered and directed, on behalf of the Corporation, in its own capacity and as a general partner of the Pmership, to enter into, execute and deliver any documents as may be required in connection with the acquisition of the Properry, all in form and content acceptable to the officer executing the same, with such modifications as such officer of the Corporation may deem necessary or appropriate, such approval to be conclusively evidenced by the execution and delivery thereof, by and on behalf of the Corporation, in its own capacity or as a general partner of the Partnership; RESOLVED FURTHER, that the Corporation, in its own capacity and as a general partner of the Partnership, is hereby author&d and directed, and its actions before the date of these resolutions are hereby ratified and confirmed, to enter into, and to cause the Partnership to enter into, any and all agreements required by the Lenders to obtain the Prpject Loans (the “Loan Documents”), and to take any and al1 further actions necessary or convenient to obtain the Project Loans, and any offker of the Corporation be, and each of them acting alone hereby is, authorized, empowered and directed, on behalf of the Corporation, in its own capacity and as a general partner of the Partnership, to enter into, execute and deliver the Loan Documents, all in form and content acceptable to the officer executing the same, with such modifications as such officer of the Corporation may deem necessary or appropriate, such approval to be conclusively evidenced by the execution and delivery thereof, by and on behalf of the Corporation, in its own capacity or as a general partner of the Partnership; RESOLVED FURTBBR, that the officers of the Corporation be, and each of them acting aIone hereby is, authorized, empowered and directed to take such further actions, and to execute such additional documents and instruments, as the person taking such actions or executing such documents or instruments, may deem necessary or appropriate in connection with the matters author&d in the foregoing resolutions, and the signature of such offker or officers on any document or instrument or the performance of any such actions shall be conclusive evidence of such officer’s or officers’ authority to take such actions or execute such document or instrument on behalf of the Corporation; RESOLVED FURTHER, that any and all acts heretofore taken by any officer or of’fkers of the Corporation in connection with the matters authorized by the foregoing resolutions are hereby ratified, confirmed, adopted and approved by the Board of Directors of the Corporation; and RESOLVED FURTHER, that any third party receiving a duly executed copy or a facsimile of this Resolution may rely on the foregoing resolutions, unless and until revoked by the Corporation, and that the revocation of the foregoing resolutions shall be ineffective as to such third party unless and until actual notice or knowledge of such revocation shall have been received by such third party. 3 lOi19/00 THV 09:36 FAX 619 3-22 2127 BAROhT GAWSSO - HOUSING OPPORTUNITIES, INC. BOO6 lOi19iOO THO 09:37 FM 619 X2 2127 BAROAZ GALASSO - @lOOi CFRTIFIC.ATE OF OFFICERS of HOUSSNG OPPORTUNITIES, INC. We, Walter Heiberg and Iuans Mendenhall, the President and Secretary, respectively, of Housing Opportunities, Inc., a non-profit public benefit corporation (the “Corporation”), which Corporation is the Managing General Partner of Carlsbad Family Housing Partnership, a California Limited Partnership (the “Partnership”) and as such, are familiar with the facts herein, do hereby certify as follows: 1. That the Corporation is a California nonprofit, 501(c)(3) corporation, ‘duly formed, validly existing and duly qualified to transact business in the State of California, with full power and authority to conduct all of the activities which are now conducted by it or proposed to be conducted by it in connection wirh First Amen&d and Reinstated Agreement of Limited partnership dated January 8, 1999. 2. The copy of the Restated Articles of Incorporation filed with the Secretary of State on December 6, 1993 (the “Articles”) and delivered Co the California Corporate Tax Credit Fund III (“Investment Limited Partner”), is a true, full and correct copy of the Articles which were duly adopted by the Board of Directors of the Corporation; the &ticks have not been amended, modified, supplemented, repealed or rescinded, and remain in full force and effect as of the date hereof. 3. The copy of the Bylaws of the Corporation, as amended, dared December 6, 1993, delivered to the Investment Limited Partner is a true, full and correct copy of the Bylaws of the Corporation. The Bylaws have not otherwise been amended, modified, supplemented, repealed, or rescinded, and remain in full force and effect as of the date hereof. 4. The copy of the Resolution of the Board of Directors dated October 23, 1997, delivered to the Investment Limited Partner, authorking the Corporation to act as managing partner of the Partnership, to execute and deliver the Partnership Documents, is a true, full and correct copy of the Resolution duly adopted at a meeting of the Corporation which was duly convened and held on the date stated thereon; said Resolution has not been amended. modified, supplemented, repealed or rescinded and remains in full force and effect as of the date hereof. 5. There has been no action by the Board of Directors of the Corporation and we have no knowledge of any other facts which would have the effect of dissolving or commencing the dissolution and/or the liquidation of the Corporation. . lOi19,'OO THU 09:38 FAX 619 a2 212-i BARONE GALASSO _ la 008 6. We have received no notice from any governmental agency which has advised the Corporation that it is not in good standing or till not be in good standing with notice or lapse of time or both. 7. Each of the persons listed below is, as of the date hereof, a duIy elected, appointed, qualified and acting officer of the Corporation holding the office set forth under his name, and the signature appearing above his name is a genuine signature. 8. The corporation is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever. There are no claims, actions, suits or proceedings pending or, to the knowledge of the Corporation threatened against or affecting the Corporation, or the development of the Property, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to the Corporation, materially affect the Corporation’s ability to perform under the Partnership Documents, except that HOI is currently involved in a construction defect case entitled Brandywine v. Housing Opportunities, Inc., et al. HOI is currently represented by attorneys through their insurance company and it is anticipated that the case will settle and all settlement proceeds will be obtained from the insurance companies and other cross-defendants. M WITNESS WHEREOF, we have set our hands this % day of %..“- , 1999. / Walter Heiberg, President ‘klaus Mendenhall, Secretary JJSOl ?DCdOffbjs -2- _ OCT 24 ‘00 11:34 TO-9176072-T FROH-tlCMI LLIN COMPANIES - I , l-641 P-02/02 F-234 RESOLUTION OF THE BOARD OF DIRECTORS HOUSING OPPORTUNITIES, INC. Be it hereby resolved that the Board of Directors of Housing Opportunities, Inc. authotizes Walter D. Heiberg, acting as Chairman, to execute any and all documents necessary to conduct the business of Housing Opportunities, Inc.