HomeMy WebLinkAboutPiper, Rebecca L.; 2022-04-13;Recording Requested by:
Fidelity National Title
San Diego Office
Recc1rcliag r@GfQ@Sted b¥
t.\ and when recorded mail to:
City of Carlsbad
Housing Services Manager
1200 Carlsbad Village Drive
Carlsbad, CA 92008
No fee for recording pursuant to
Government Code Section 27383
DOC# 2022-0188476
111111111111 lllll 111111111111111 lllll lllll lllll lllll 111111111111111111
Apr 29, 2022 04:15 PM
OFFICIAL RECORDS
Ernest J. Dronenburg, Jr.,
SAN DIEGO COUNTY RECORDER
FEES: $0.00 (SB2 Atkins: $0.00)
PCOR: N/A
PAGES: 13
DEED OF TRUST AND SECURITY AGREEMENT
(City of Carlsbad Affordable Housing Resale Program)
Note to Borrower: This Deed of Trust contains provisions prohibiting assumption
THIS DEED OF TRUST AND SECURITY AGREEMENT (the "Deed of Trust")
is made as of this 13th day of April, 2022, among Rebecca L. Piper, an unmarried woman,
("Borrower"), as Truster, and Fidelity National Title & Escrow ("Trustee"), as trustee, and the
City of Carlsbad, a municipal corporation ("City"), as beneficiary.
The Borrower, in consideration of the promises herein recited and the trust herein
created, irrevocably grants, transfers, conveys and assigns to the Trustee, in trust, with power of
sale, the real property located in the City of Carlsbad, State of California, described in the
attached Exhibit A (the "Property");
TOGETHER with all the improvements now or hereafter erected on the real property
described in Exhibit A, and all easements, rights, appurtenances, and all fixtures now or hereafter
attached to the property, all of which, including replacements and additions thereto, shall be
deemed to be and remain a part of the property covered by this Deed of Trust (collectively, the
"Property"); and
TOGETHER with all articles of personal property or fixtures now or hereafter attached to
or used in and about the building or buildings now erected or hereafter to be erected on the
Property which are necessary to the complete and comfortable use and occupancy of such
building or buildings for the purposes for which they were or are to be erected, including all
other goods and chattels and personal property as are ever used or furnished in operating a
building, or the activities conducted 'therein, similar to the one herein described and referred to,
and all renewals or replacements thereof or articles in substitution therefore, whether or not the
same are, or shall be attached to said building or buildings in any maimer; and all of the
foregoing, together with the Property, is herein refe1Ted to as the "Security";
To have and to hold the Security together with acquittances to the Trustee, its successors
and assigns forever;
1
I OJ 0\17\2045536.2
Exempt from fee per Gl::27388.1 due to
being recorded In connection with
?oncu:rent transfer that is subject to the
unpos1t,on of documentary transfer tax.
TO SECURE to the City the repayment of the sums evidenced by a promissory note in
the amount of Four Hundred Fomieen Thousand Dollars ($414,000), executed by the Borrower
in favor of the City as of the date of this Deed of Trust ("Note");
TO SECURE to the City the payment of all other sums, with interest thereon, advanced
in accordance herewith to protect the security of this Deed of Trust; and the performance of the
covenants and agreements of the Borrower herein contained;
TO SECURE to the City the perfo1111ance of the covenants and agreements of Borrower
contained in that certain Declaration of Restrictive Covenants Regarding Restrictions on
Transfer of Property, Occupancy Restrictions, Refinancing Restrictions and Option to Purchase
executed by and between the Borrower and the City of even date herewith and recorded against
the Property on, or about, the date this Deed of Trust is recorded as a lien against the Property
(the "Resale Restriction Agreement") and to secure the payment of Excess Sales Proceeds (as
defined in the Resale Restriction Agreement) and Unauthorized Rental Proceeds (as defined in
the Resale Restriction Agreement) that may become due by Borrower to City; and
TO SECURE the performance of any obligations of Borrower in any other agreements
with respect to the financing of the Property or the Security the failure of which would adversely
affect Beneficiary, whether or not Beneficiary is a party to such agreements.
BORROWER AND CITY COVENANT AND AGREE AS FOLLOWS:
1. Borrower's Estate. That the Borrower is lawfully seized of the estate hereby
conveyed and has the right to grant and convey the Security, that other than this Deed of Trust,
the Security is encumbered only by: (a) that deed of trust executed by the Borrower in
connection with a loan made to the Bonower by Fidelity National Title & Escrow or its
successors and assigns (the "First Lender"), dated April 19 , 2022, executed by the
Borrower in favor of First Lender, and recorded in the County of San Diego on _____ _
20_, and assigned Recorder's Serial No. _______ ("First Lender Deed of Trust"),
securing a promissory note executed by the Borrower in favor of the First Lender ("First Lender
Note"), to assist in the purchase of the Property; and (b) the Resale Restriction Agreement. The
Borrower agrees to warrant and defend generally the title to the Security against all claims and
demands, subject to any declarations, easements or restrictions listed in a schedule of exceptions
to coverage in any title insurance policy insuring the City's interest in the Security. (As used in
this Deed of Trust, the term "First Lender" shall include all successors and assigns of the First
Lender.)
2. Repayment of Loan; Prohibition on Assumptions. The Borrower will promptly
repay, when due, the principal, interest and other sums required by the Note and Resale
Restriction Agreement, including all principal and interest on the Homebuyer Loan (as defined in
the Note) and the Excess Sales Proceeds and Unauthorized Rental Proceeds due under the Resale
Restriction Agreement. Among other things, the Note contains the following provisions
concerning repayment of the loan under certain conditions:
2
IO 10\ 17\2045536.2
Limitations on Assumption of Note. The Borrower acknowledges that this Note
is given in connection with the purchase of the Property as part of a program of
the City to assist in the purchase of homes by very low and low income
households. Consequently, this Note is only assumable by Eligible Purchasers
(as defined in the Resale Restriction Agreement). This Note is due in full upon
all other Transfers. In the event this Note is assumed by an Eligible Purchaser,
the Eligible Purchaser shall execute a new note, which shall be in an amount
equal to the principal and Contingent Interest owed by Borrower, a new deed of
trust and a new resale restriction agreement with a restarted term in forms
approved by the City.
3. First Lender Loan. The Borrower will observe and perform all of the covenants
and agreements of the First Lender Note, First Lender Deed of Trust, and related First Lender
loan documents.
4. Resale Restriction Agreement. The Borrower will observe and perform all of the
covenants and agreements of the Resale Restriction Agreement. Among other things, the Resale
Restriction Agreement requires the Borrower to utilize the Property as the Borrower's principal
residence, and restricts: (i) the Borrower's ability to transfer the Property, or the obligations
under the Note; (ii) the Borrower's ability to refinance the First Lender Note; and (iii) the
Borrower's ability to use the Property as security for additional loans or financing. The
Borrower's failure to comply with the requirements of the Resale Restriction Agreement
constitutes a default under this Deed of Trust.
5. Charges; Liens. The Borrower will pay all taxes, assessments and other charges,
fines and impositions attributable to the Security which may attain a priority over this Deed of
Trust, by the Borrower making any payment, when due, directly to the payee thereof. The
Borrower will promptly furnish to the City all notices of amounts due under this paragraph, and
in the event the Borrower makes payment directly, the Borrower will promptly discharge any
lien which has priority over this Deed of Trust; provided, that the Borrower will not be required
to discharge the lien of the First Lender Deed of Trust or any other lien described in this
paragraph so long as the Borrower will agree in writing to the payment of the obligation secured
by such lien in a manner acceptable to the City, or will, in good faith, contest such lien by, or
defend enforcement of such lien in, legal proceedings which operate to prevent the enforcement
of the lien or forfeiture of the Security or any part thereof.
6. Insurance. The Borrower will keep the Security insured with a standard fire and
extended coverage insurance policy in at least an amount equal to the replacement cost of the
Security, but in no event less than the amount necessary to prevent the Borrower from becoming
a co-insurer under the terms of the policy.
The insurance carrier providing this insurance shall be licensed to do business in the State
of California and be chosen by the Borrower subject to approval by the City; provided, that such
approval will not be withheld if the insurer is also approved by the First Lender, the Federal
Home Loan Mortgage Corporation, Fannie Mae, Freddie Mac, the United States Department of
3
1010\17\2045536.2
Housing and Urban Development, the United States Department of Veterans Affairs, or any
successor thereto.
All insurance policies and renewals thereof will be in a form acceptable to the City and
will include a standard mortgagee clause with standard lender's endorsement in favor of the
holder of the First Lender Note and the City as their interests may appear and in a fonn
acceptable to the City. The City shall have the right to hold, or cause its designated agent to
hold, the policies and renewals thereof, and the BotTower shall promptly furnish to the City, or
its designated agent, the original insurance policies or certificates of insurance, all renewal
notices and all receipts of paid premiums. In the event of loss, the Borrower will give prompt
notice to the insurance carrier and the City or its designated agent. The City, or its designated
agent, may make proof of loss if not made promptly by the Borrower. The City shall receive ten
( 10) days advance notice of cancellation of any insurance policies required under this section.
Unless the City and the Borrower otherwise agree in writing, insurance proceeds, subject
to the rights of the First Lender, will be applied to restoration or repair of the Security damaged,
provided such restoration or repair is economically feasible and the Security of this Deed of
Trust is not thereby impaired. If such restoration or repair is not economically feasible or if the
security of this Deed of Trust would be impaired, the insurance proceeds will be used, subject to
the rights of the First Lender, to repay the Note and all sums secured by this Deed of Trust, with
the excess, if any, paid to the Borrower. If the Security is abandoned by the Borrower, or if the
Borrower fails to respond to the City, or its designated agent, within thirty (30) days from the
date notice is mailed by either of them to the Borrower that the insurance carrier offers to settle a
claim for insurance benefits, the City, or its designated agent, is authorized, subject to the rights
of the First Lender, to collect and apply the insurance proceeds at the City's option either to
restoration or repair of the Security or to repay the Note and all sums secured by this Deed of
Trust.
If the Security is acquired by the City, all right, title and interest of the Borrower in and to
any insurance policy and in and to the proceeds thereof resulting from damage to the Security
prior to the sale or acquisition will pass to the City to the extent of the sums secured by this Deed
of Trust immediately prior to such sale or acquisition subject to the rights of the First Lender.
7. Preservation and Maintenance of Security. The Borrower will keep the Security
in good repair and will not commit waste or permit impairment or deterioration of the Security.
Ifthere arises a condition in contravention of this section, and if the Borrower has not cured such
condition within thirty (30) days after receiving a City notice of such a condition, then in
addition to any other rights available to the City, the City shall have the right (but not the
obligation) to perform all acts necessary to cure such condition, and to establish or enforce a lien
or other encumbrance against the Security to recover its cost of curing.
8. Protection of the City's Security. If the Borrower fails to perform the covenants
and agreements contained in this Deed of Trust, the Resale Restriction Agreement, the First
Lender Note, the First Lender Deed of Trust, or if any action or proceeding is commenced which
materially affects the City's interest in the Security, including, but not limited to, default under
the First Lender Deed of Trust, the First Lender Note, eminent domain, insolvency, code
4
1010\17\2045536.2
enforcement, or arrangements or proceedings involving a bankrupt or decedent, then the City, at
the City's option, upon notice to the Borrower, may make such appearances, disburse such sums
and take such action as it determines necessary to protect the City's interest, including but not
limited to, disbursement of reasonable attorney's fees and entry upon the Security to make
repairs.
Any amounts disbursed by the City pursuant to this paragraph, with interest thereon, will
become an indebtedness of the Borrower secured by this Deed of Trust. Unless the Borrower
and City agree in writing to other tenns of payment, such amount will be payable upon notice
from the City to the Borrower requesting payment thereof, and will bear interest from the date of
disbursement at the lesser of ten percent (10%) or the highest rate permissible under applicable
law. Nothing contained in this paragraph will require the City to incur any expense or take any
action hereunder.
9. Inspection. The City may make or cause to be made reasonable entries upon and
inspections of the Security; provided that the City will give the Borrower reasonable notice of
inspection.
10. Forbearance by the City Not a Waiver. Any forbearance by the City in exercising
any right or remedy will not be a waiver of the exercise of any such right or remedy, nor shall
acceptance by the City of any payment provided for in the Note constitute a waiver of the City's
right to require prompt payment of any remaining principal and interest owed. The procurement
of insurance or the payment of taxes or other liens or charges by the City will not be a waiver of
the City's right to accelerate the maturity of the indebtedness secured by this Deed of Trust.
11. Hazardous Substances. Borrower shall not cause or permit the presence, use,
disposal, storage, or release of any Hazardous Substances on or in the Property. Borrower shall
not do, nor allow anyone else to do, anything affecting the Property that is in violation of any
Environmental Law. The preceding two sentences shall not apply to the presence, use, or storage
on the Property of small quantities of Hazardous Substances that are generally recognized to be
appropriate to normal residential uses and to maintenance of the Property.
"Hazardous Substances" shall mean those substances defined as toxic or hazardous
substances or hazardous waste under any Environmental Law, and the following substances:
gasoline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides,
volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials.
"Environmental Law11 shall mean all federal and state of California Iaws that relate to
health, safety or environmental protection.
Borrower shall promptly give City written notice of any investigation, claim, demand,
lawsuit or other action by any governmental or regulatory agency or private party involving the
Property and any Hazardous Substance or Environmental Law of which Borrower has actual
knowledge. If Borrower learns, or is notified by any governmental or regulatory authority, that
any removal or other remediation of any Hazardous Substance affecting the Property is
5
I 010\17\2045536.2
necessary, Borrower shall promptly take all necessary remedial actions in accordance with
Environmental Law.
12. Remedies Cumulative. All remedies provided in this Deed of Trust are distinct
and cumulative to any other right or remedy under this Deed of Trust or any other document, or
afforded by law or equity, and may be exercised concurrently, independently or successively.
13. Successors and Assigns Bound. The covenants and agreements herein contained
shall bind, and the rights hereunder shall inure to, the respective successors and assigns of the
City and the Borrower subject to the provisions of this Deed of Trust.
14. Joint and Several Liability. All covenants and agreements of the Borrower shall
be joint and several.
15. Notice. Except for any notice required under applicable law to be given in
another manner, all notices required in this Deed of Trust shall be sent by certified mail, return
receipt requested or express delivery service with a delivery receipt, or personally delivered with
a delivery receipt obtained, and shall be deemed to be effective as of the date shown on the
delivery receipt as the date of delivery, the date delivery was refused, or the date the notice was
returned as undeliverable as follows:
To the Owner:
Address of the Property
To the City:
City of Carlsbad
Housing and Homeless Services Division
Attn: Housing and Homeless Services Manager
1200 Carlsbad Village Drive
Carlsbad, CA 92008
The parties may subsequently change addresses by providing written notice of the change
in address to the other parties in accordance with this section.
16. Controlling Law. This Deed of Trust shall be construed in accordance with and
be governed by the laws of the State of California.
17. Invalid Provisions. If any one or more of the provisions contained in this Deed of
Trust, Resale Restriction Agreement or the Note shall for any reason be held to be invalid, illegal
or lmenforceable in any respect, then such provision or provisions shall be deemed severable
from the remaining provisions, and this Deed of Trust, the Resale Restriction Agreement and the
Note shall be construed as if such invalid, illegal or unenforceable provision had never been
contained in this Deed of Trust, Resale Restriction Agreement or the Note.
6
I 010\17\2045536.2
18. Captions. The captions and headings in this Deed of Trust are for ~onvenience
only and are not to be used to interpret or define the provisions hereof.
19. Nonliability for Negligence, Loss, or Damage. Borrower acknowledges,
understands and agrees that the relationship between Borrower and the City is solely that of a
borrower and the administrator of a municipal inclusionary housing program, and that the City
does not undertake or assume any responsibility for or duty to Borrower to select, review,
inspect, supervise, pass judgment on, or inform Borrower of the quality, adequacy or suitability
of the Security or any other matter. The City owes no duty of care to protect Borrower against
negligent, faulty, inadequate or defective building or construction or any condition of the
Security and Borrower agrees that neither Borrower, or Borrower'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 Security and will hold City hannless
from any liability, loss or damage for these things.
20. Indemnity. Borrower agrees to defend, indemnify, and hold the City harmless
from all losses, damages, liabilities, claims, actions, judgments, costs, expenses and reasonable
attorneys' fees that the City may incur as a direct or indirect consequence of:
a. Borrower's failure to perform any obligations as and when required by the
Note, Resale Restriction Agreement, and this Deed of Trust; or
b. the failure at any time of any of Borrower's representations or warranties
to be true and correct.
This provision shall survive the term of this Agreement.
21. Default; Remedies. Upon the Borrower's breach of any covenant or agreement of
the Borrower in the Note, Resale Restriction Agreement or this Deed of Trust, including, but not
limited to, the covenants to pay, when due, any sums secured by this Deed ofTrnst, the City,
prior to acceleration, will send, in the manner set forth in Section 15 of this Deed of Trust, notice
to the Borrower specifying: (1) the breach; (2) if the breach is curable, the action required to
cure such breach; (3) a date, not less than thirty (30) days from the date the notice is effective as
set forth in Section 15 of this Deed of Trust, by which such breach, if curable, is to be cured; and
(4) if the breach is curable, that failure to cure such breach on or before the date specified in the
notice may result in acceleration of the sums secured by this Deed of Trust and sale of the
Security. Notice shall be effective as of the date shown on the delivery receipt as the date of
delivery, the date delivery was refused or the date the notice was returned as undeliverable. The
notice will also inform the Borrower of the Borrower's right to reinstate after acceleration and the
right to bring a court action to assert the nonexistence of default or any other defense of the
Borrower to acceleration and sale.
If the breach is not curable or is not cured on or before the date specified in the notice, the
City, at the City's option, may: (a) declare all of the sums secured by this Deed of Trust to be
immediately due and payable without further demand and may invoke the power of sale and any
other remedies permitted by California law; (b) either in person or by agent, with or without
7
I 010\17\2045536.2
bringing any action or proceeding, or by a receiver appointed by a court, and without regard to
the adequacy of its security, enter upon the Security and take possession thereof ( or any part
thereof) and of any of the Security, in its own name or in the name of the Trustee, and do any
acts which it deems necessary or desirable to preserve the value or marketability of the Security,
or part thereof or interest therein, increase the income therefrom or protect the security thereof.
The entering upon and taking possession of the Security shall not cure or waive any breach
heretmder or invalidate any act done in response to such breach and, notwithstanding the
continuance in possession of the Security, the City shall be entitled to exercise every right
provided for in this Deed of Trust, or by law upon occurrence of any uncured breach, including
the right to exercise the power of sale; ( c) commence an action to foreclose this Deed of Trust as
a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof; (d) deliver to
the Trustee a written declaration of default and demand for sale, pursuant to the provisions for
notice of sale found at California Civil Code Sections 2924, et seq., as amended from time to
time; or (e) exercise all other rights and remedies provided herein, in the instruments by which
the Borrower acquires title to any Security, or in any other document or agreement now or
hereafter evidencing, creating or securing all or any portion of the obligations secured hereby, or
provided by law.
The City shall be entitled ta collect all reasonable costs and expenses incurred in pursuing
the remedies provided in this paragraph, including, but not limited ta, reasonable attorney's fees.
22. Acceleration. Upon the occurrence of a default under the Note, the Resale
Restriction Agreement, this Deed of Trust, the First Lender Note, or the First Lender Deed of
Trust, the City shall have the right to declare the full amount of the principal along with any
interest under the Note immediately due and payable. Any failure by the City to pursue its legal
and equitable remedies upon default shall not constitute a waiver of the City's right to declare a
default and exercise all of its rights under the Note, the Resale Restriction Agreement, and this
Deed of Trust. Nor shall acceptance by the City of any payment provided for in the Note
constitute a waiver of the City's right to require prompt payment of any remaining principal and
interest owed.
23. Borrower's Right to Reinstate. Notwithstanding the City's acceleration of the
sums secured by this Deed of Trust, the Borrower will have the right to have any proceedings
begun by the City to enforce this Deed of Trust discontinued at any time prior to five (5) days
before sale of the Security pursuant ta the power of sale contained in this Deed of Trust or at any
time prior to entry of a judgment enforcing this Deed of Trust if: (a) the Borrower pays City all
sums, if any, which would be then due under this Deed of Trust and no acceleration under the
Note has occuned; (b) the Banower cures all breaches of any other covenants or agreements of
the Borrower contained in the Note, Resale Restriction Agreement or this Deed of Trust; (c) the
Borrower pays all reasonable expenses incurred by City and the Trustee in enforcing the
covenants and agreements of the Borrower contained in the Note, Resale Restriction Agreement
or this Deed of Trust, and in enforcing the City's and the Trustee's remedies, including, but not
limited to, reasonable attorney's fees; and (d) the Borrower takes such action as City may
reasonably require to assure that the lien of this Deed of Trust, City's interest in the Security and
the Borrower's obligation to pay the sums secured by this Deed of Trust shall continue
8
I 010\17\2045536.2
unimpaired. Upon such payment and cure by the Borrower, this Deed of Trust and the
obligations secured hereby will remain in full force and effect as if no acceleration had occurred.
24. Reconveyance. Upon payment of all sums secured by this Deed of Trust, the City
will request the Trustee to reconvey the Security and will surrender this Deed of Trust and the
Note to the Trustee. The Trustee will reconvey the Security without warranty and without
charge to the person or persons legally entitled thereto. Such person or persons will pay all costs
of recordation, if any.
25. Substitute Trustee. The City, at the City's option, may from time to time remove
the Trustee and appoint a successor trustee to any trustee appointed hereunder. The successor
trustee will succeed to all the title, power and duties conferred upon the Trustee herein and by
applicable law.
26. Subordination to First Lender Mortgage. Notwithstanding any other provision
hereof, the provisions of this Deed of Trust shall be subordinate to the lien of the First Lender
Deed of Trust and shall not impair the rights of the First Lender, or the First Lender's successor
or assign, to exercise its remedies under the First Lender Deed of Trust in the event of default
under the First Lender Deed of Trnst by the Borrower. Such remedies under the First Lender
Deed of Trust include the right of foreclosw-e or acceptance of a deed or assignment in lieu of
foreclosure. After such foreclosure or acceptance of a deed or assignment in lieu of foreclosure,
or upon assigmnent of the First Lender Deed of Trust to the Secretary of the United States
Department of Housing and Urban Development (the "Secretary"), this Deed of Trust shall be
forever terminated and shall have no further effect as to the Property or any transferee thereafter;
provided, however, if the holder of such First Lender Deed of Trust acquired title to the Property
pursuant to a deed or assignment in lieu of foreclosure, or if the First Lender's Deed of Trust is
assigned to the Secretary, this Deed of Trust shall automatically terminate upon such acquisition
of title or assignment to the Secretary provided that: (i) the City has been given written notice of
default under such First Lender Deed of Trust; and (ii) the City shall not have cured or
commenced to cure the default within such thirty (30) day period and given its firm commitment
to complete the cure in the form and substance acceptable to the First Lender. Borrower agrees
to record any necessary documents to effect such termination, if applicable.
Remainder of Page Left Intentionally Blank
9
1010\17\2045536.2
IN WITNESS WHEREOF, the Borrower has executed this Deed of Trust as of the date
first written above.
Note to Borrower: This Deed of Trust contains provisions prohibiting assumption
BORROWER:
Signature
ee.v.tCL~ L-f,(k.K:
Print Name
Date
(Proper Notarial Acknowledgement of Execution by Borrower Must Be Attached)
SEE ATTACHED CERTIFICATE
I 010\17\2045536.2
CALIFORNIA ACKNOWLEDGMENT CIVIL CODE § 1189
OOIB0:000Bf&ffl8080:0800008808000880UBB8880'80@880081~888080B:O:-
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 9an Diego
On Apri\ ,., ( .2..f>2.!L. before me, C. Peterson, Nota....,.,,ru_Pc-..u ....... b ....... lic ___ _
Date .0 Here Insert Name anif Title of the Officer
personally appeared ~-J.W.....,_,.....cCJ::P,..,=-=.:.._.:,:::;l::,,w_, .,_[j'-'l~i--:er::.;;...._ _______________ _
Name(s) of Signer(s)
who proved to me on the basis of satisfactory evidence to be the personts, whose name(~ is/are subscribed
to the within Instrument and acknowledged to me that he/she/~ executed the same In his/her/tfleolr
authorized capacity(ieS), and that by l=tis/herttl:lel.r signature(&) on the Instrument the person(s), or the entity
upon behalf of which the person{&) acted, executed the instrument.
Place Notary Seal and/or Stamp Above
I certify under PENAL TY OF PERJURY under the
laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature ~cf2.:!l1P======~--------
Signature of Notary Public
OPTIONAL
Completing this information can deter alteration of the document or
fraudulent reattachment of this form to an unintended document.
Description of Attached Document
Title or Type of Document P(.-t.d Qt :lrlt\.1tt O.Cd
Document Date: '¼u~ \ \ !> , .:;o;l,"i?:-:
Se&w-i:hj Pr¥<~
Number of Pages: ___ _
Signer(s) Other Than Named Above: ____________________ _
Capac:lty(les) Claimed by Slgner(s)
Signer's Name: ___________ _ Signer's Name: ___________ _
□ Corporate Officer -Tltle(s): _____ _ □ Corporate Officer -Tltle(s): ______ _
□ Partner -□ Limited □ General □ Partner -□ Limited □ General □ Individual □ ·Attorney In Fact □ Individual □ Attorney in Fact
□ Trustee □ Guardian or Conservator □ Trustee □ Guardian or Conservator
□ Other: □ Other:
Signer ls Representing: ________ _ Signer ls Representing: ________ _
~-...... ~~om~~
Your Reference Number:
EXHIBIT A
LEGAL DESCRIPTION
Fidelity National Title Company
Order No.: 00187174-008-CP
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF CARLSBAD, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
A CONDOMINIUM COMPRISED OF:
PARCEL 1 (COMMON AREA INTEREST):
AN UNDIVIDED FRACTIONAL INTEREST AS TENANT IN COMMON IN AND TO THE COMMON AREA OF
PHASE 4 AS DESCRIBED ON THE MULBERRY AT BRESSI RANCH CONDOMINIUM PLAN (THE
"CONDOMINIUM PLAN") RECORDED ON FEBRUARY 11, 2005, AS DOCUMENT NO. 2005-117224, IN THE
OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA, BEING A PORTION OF LOT
1 OF CARLSBAD TRACT MAP CT 03-03, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14800 FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY ON MAY 21, 2004. THE UNDIVIDED FRACTIONAL INTEREST HEREBY
CONVEYED IS THE RECIPROCAL OF THE NUMBER OF LIVING UNITS SHOWN ON THE CONDOMINIUM
PLAN AS BEING WITHIN PHASE 4 OF THE CONDOMINIUM PLAN.
EXCEPTING THEREFROM ALL LIVING UNITS SHOWN ON THE CONDOMINIUM PLAN.
ALSO EXCEPTING THEREFROM ALL OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS, NATURAL GAS
RIGHTS AND OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN, GEOTHERMAL STEAM AND ALL
PRODUCTS DERIVED FROM ANY OF THE FOREGOING, THAT MAY BE WITHIN OR UNDER THE ABOVE
DESCRIBED LAND ("LANO"), TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING, EXPLORING
AND OPERATING THEREFOR AND STORING IN AND REMOVING THE SAME FROM SAID LAND OR ANY
OTHER LAND, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS
OTHER THAN THE LAND, OIL OR GAS WELLS, TUNNELS AND SHAFTS INTO, THROUGH OR ACROSS THE
SUBSURFACE OF THE LAND, AND TO BOTTOM SUCH WHIPSTOCKED TO DIRECTIONALLY DRILLED
WELLS, TUNNELS AND SHAFTS UNDER AND BENEATH OR BEYOND THE EXTERIOR LIMITS THEREOF,
AND TO REDRILL, RETUNNEL, EQUIP, MAINTAIN, REPAIR, DEEPEN AND OPERATE ANY SUCH WELLS OR
MINES WITHOUT, HOWEVER, THE RIGHT TO DRILL, MINE, STORE, EXPLORE OR OPERATE THROUGH
THE SURFACE OR THE UPPER 500 FEET OF THE SUBSURFACE OF THE LAND AS RESERVED BY BRESSI
GARDENLANE, LLC, BY DEED RECORDED JANUARY 25, 2005 AS FILE NO. 2005-61440, OF OFFICIAL
RECORDS.
PARCEL 2 {LIVING UNIT):
LIVING UNIT NO. 38, AS SHOWN UPON THE CONDOMINIUM PLAN.
PARCEL 3 (EXCLUSIVE USE AREAS):
THE EXCLUSIVE RIGHT TO USE ANY EXCLUSIVE USE AREA SHOWN ON THE CONDOMINIUM PLAN AS
BEING APPURTENANT TO THE LIVING UNIT DESCRIBED IN PARCEL 2 ABOVE.
PARCEL 4 (EASEMENT OVER ASSOCIATION PROPERTY):
A NON-EXCLUSIVE EASEMENT FOR USE AND ENJOYMENT OF AND ACCESS OVER THE ASSOCIATION
PROPERTY ("ASSOCIATION PROPERTY" IS DEFINED IN THE DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS AND RESERVATION OF EASEMENTS FOR MULBERRY AT BRESSI
RANCH DESCRIBED BELOW), EXCEPTING ANY EXCLUSIVE USE AREA. THE EASEMENT HEREBY
RESERVED, WHICH IS APPURTENANT TO THE LIVING UNIT DESCRIBED ABOVE, IS FOR ACCESS AND
USE OF THE ASSOCIATION PROPERTY, SUBJECT TO THE PROVISIONS OF THE DECLARATION OF
Your Reference Number:
Fidelity National Title Company
Order No.: 00187174-008-CP
COVENANTS, CONDITIONS AND RESTRICTIONS AND RESERVATION OF EASEMENTS FOR MULBERRY AT
BRESSI RANCH AND THE RULES AND REGULATIONS OF THE MULBERRY AT BRESSI RANCH
HOMEOWNERS ASSOCIATION, A CALIFORNIA NONPROFIT MUTUAL BENEFIT CORPORATION.
APN: 213-190-05--48
$414,000
PROMISSORY NOTE
Secured by Deed of Trust
Notice to Borrower: This Note is not assumable
Carlsbad, California
April 13 , 2022
FOR VALUE RECEIVED, the undersigned Rebecca L. Piper, an unmarried woman,
("Borrowers"), promises to pay to the City of Carlsbad, a municipal corporation ("City"), at the
Housing and Homeless Services Department, 1200 Carlsbad Village Drive, Carlsbad, California
92008, or such other place as the City may designate in writing, the principal sum of Four
Hundred Fourteen Thousand Dollars ($414,000) plus Contingent Interest calculated pursuant to
Section 4 below, plus any amounts due the City as Unauthorized Rental Proceeds or Excess
Sales Proceeds pursuant to the Declaration of Restrictive Covenants Regarding Restrictions on
Transfer of Property, Occupancy Restrictions, Refinancing Restrictions and Option to Purchase
("Resale Restriction Agreement ") by and between Borrower and City of even date herewith.
1. Purpose of Loan. Bo1rower is purchasing the real property more particularly
described in Exhibit A to the Deed of Trust and the improvements thereon located at 6218
Liberty Place, Carlsbad, CA 92009 in the City of Carlsbad ("Property"). In connection with the
Affordable Housing Resale Program and in fulfillment of its inclusionary obligation pursuant to
an Affordable Housing Agreement ("Affordable Housing Agreement") between the Lennar
Bressi Ranch Venture, LLC, a California limited liability company ("Developer") and the City
dated February 20, 2003, Developer made a subsidy loan ("Homebuyer Loan") to allow for the
purchase of a home by a low income household located in Carlsbad, California on that certain
real property and more particularly described in Exhibit A ("Property") and then assigned the
Homebuyer Loan to the City. The Homebuyer Loan is in an amount equal to the difference
between the fair market value of the Property and the price affordable to Borrower, who is a
lower income household.
Because the home is being made affordable to Borrower as part of the City's affordable
housing program, Borrower is required and has agreed to execute the Resale Restriction
Agreement. Among other things, the Resale Restriction Agreement restricts the price of the
Property upon resale and requires the Borrower to pay any Excess Sales Proceeds ( as defined
below) at resale to the City. This Note evidences both: (a) the obligation of Borrower to repay
the Homebuyer Loan; and (b) the obligation of Borrower to pay any Unauthorized Rental
Proceeds (as defined below) and Excess Sales Proceeds to the City pursuant to the Resale
Restriction Agreement.
2. Definitions. The terms set forth in this section shall have the following meanings
in this Note.
1010/17/2045538.2
(a) "Appreciation Amount" shall mean the amount calculated by subtracting
the Original Affordable Purchase Price of the Property from one of the following amounts, as
applicable: (i) in the event of a sale of the Prope1ty to the City or City designee pursuant to the
City Option, the Affordable Sales Price; or (ii) in the event of a sale of the Prope1ty to an Eligible
Purchaser (as defined in the Resale Restriction Agreement) during the Initial Period (as defined
in the Resale Restriction Agreement), the Affordable Sales Price; or (iii) in the event of any other
sale, the amount received by the Borrower as the sale price of the Property, as certified by the
Borrower; or (iv) in the event of a prepayment of this Note, a Transfer other than sale of the
Property, or in the event of a default, the Fair Market Value of the Property; or (v) in the event a
creditor acquires title to the Property through a deed in lieu of foreclosure, a trustee's deed upon
sale, or otherwise, the amount paid for the Prope1ty at a creditor's sale of the Property; or (vi) in
the event of payment at the expiration of the Tem1 the Fair Market Value of the Property. The
provisions of this Section 2(b )(iv) shall be subject to Section 16 of the Resale Restriction
Agreement which requires that when Excess Sales Proceeds are paid to the City that the
Appreciation Amount is calculated by subtracting the Original Affordable Purchase Price from
the Maximum Restricted Resale Price.
(b) "Contingent Interest" shall mean the percentage of the Appreciation
Amount set out in Section 4.
( c) "Excess Sales Proceeds" shall have the meaning set fmih in Section 16 of
the Resale Restriction Agreement.
(d) "Fair Market Value" shall be determined by a real estate appraisal made
by an independent residential appraiser designated by the City. If possible, the appraisal shall be
based upon the sales prices of comparable properties sold in the market area during the preceding
three (3)-month period. The cost of the appraisal shall be paid by the Borrower. Nothing in this
subparagraph shall preclude the Borrower and the City from establishing the Fair Market Value
of the Property by mutual agreement in lieu of an appraisal.
(e) "First Mortgage" shall mean the promissory note and deed of trust
evidencing and securing the first mortgage loan for the Property.
(f) "Maximum Restricted Resale Price" shall have the same meaning as set
forth in Section 14 of the Resale Restriction Agreement.
(g) "Original Affordable Purchase Price" shall mean One Hundred Sixty
Thousand Dollars ($160,000). the affordable price paid by Borrower to the Seller for the
purchase of the Property. The Original Affordable Purchase Price is the effective price of the
Property. The "Full Purchase Price" of the Property (as defined in the Resale Restriction
Agreement) is equal to the Original Affordable Purchase Price plus the amount of this
Promissory Note.
(h) "Property" shall mean the land and improvements thereon encumbered by
the deed of trust executed in connection with this Note.
1010/17/2045538.2
(i) "Resale Restriction Agreement" shall mean the Declaration of Restrictive
Covenants Regarding Restrictions on Transfer of Property, Occupancy Restrictions, Refinancing
Restrictions and Option to Purchase executed by the Borrower and the City in connection with
the Homebuyer Loan.
(i) "Transfer" shall mean any sale, assignment or transfer, voluntary or
involuntary, of any interest in the Property, including, but not limited to, a fee simple interest, a
joint tenancy interest, tenancy in common interest, a life estate, a leasehold interest, or an interest
evidenced by a land contract by which possession of the Property is transferred and the Borrower
retains title. Any Transfer without satisfaction of the provisions of this Note is prohibited. A
transfer: (i) to an existing spouse who is also an obligor under the Note; (ii) by a Borrower to a
spouse where the spouse becomes the co-owner of the Property; (iii) between spouses as part of a
marriage dissolution proceeding; (iv) to an existing spouse or child of the Borrower by devise or
inheritance following the death of the Borrower; (v) by the Borrower into an inter vivos
revocable trust in which the Borrower is the trustor; or (vi) by refinance of the First Mortgage
meeting the requirements of Section 11, shall not be considered a Transfer for the purposes of
this Note; provided, however, that the Borrower shall continue to occupy the Property as his or
her principal place ofresidence (except where the transfer occurs pursuant to subsection (iii) or
(iv) above, in which event the transferee shall owner-occupy the Home and affirmatively assume
Owner's obligations under this Note and the City Deed of Trust, and the Resale Restriction
Agreement) and the Borrower shall provide written notice of such transfer to the City pursuant to
Section 8 of the Resale Restriction Agreement.
(k) "Unauthorized Rental Proceeds" shall have the meaning set forth in
Section 4 of the Resale Restriction Agreement.
3. Security. This Note is secured by a second deed of trust dated the same date as
this Note (the "Deed of Trust").
4. Contingent Interest. The Borrower shall pay contingent interest equal to Eifty_
Percent (50%) of the Appreciation Amount (the "Contingent Interest"). No interest other than
Contingent Interest shall be due hereunder. The Contingent Interest shall be paid to the City at
the time set forth in Section 6 below. Borrower acknowledges that the Contingent Interest
percentage amount is equal to the Homebuyer Loan principal amount as a percentage of the total
purchase price of the Property paid by the Borrower at the time of purchase (which includes the
amount of this Note), multiplied by seventy-five one hundredths (.75). Borrower acknowledges
that this calculation of the percentage of the Appreciation Amount due to the City as Contingent
Interest includes a twenty-five percent (25%) discount to Borrower to account for any capital
improvements Borrower may make to the Property. City has agreed that the Contingent Interest
percent shall not exceed fifty percent (50%).
5. Term. The Term of this Note shall mean the period commencing on the date of
this Note and expiring on the date thirty (30) years thereafter (the "Term").
6. Repayment. The total amount of the principal and any Contingent Interest owed
under this Note (including Unauthorized Rental Proceeds and Excess Sales Proceeds due to the
1010/17/2045538.2
City pursuant to the Resale Restriction Agreement) shall immediately become due and payable:
(a) in the event of a default by the Borrower under this Note, the Resale Restriction Agreement,
the Deed of Trust, or the First Mortgage; (b) on the date Transfer is made whether voluntarily,
involuntarily, or by operation of law and whether by deed, contract of sale, gift, devise, bequest
or otherwise; ( c) in the event Borrower ceases to occupy the Property as his or her principal
place ofresidence; or (d) at the end of the Tenn of this Note as described above in Section 5.
Failure to declare such amounts due shall not constitute a waiver on the pa1t of the City to
declare them due in the event of a subsequent Transfer.
7. Late Payment Fees. If any payment due hereunder is not paid within five (5) days
from the date such becomes due, Borrower shall pay a reasonable late or collection charge equal
to five percent (5%) of the amount so unpaid. The City and Borrower agree that the actual
damages and costs sustained by the City due to the failure to make timely payments would be
extremely difficult to measure and that the charges specified in this paragraph represent a
reasonable estimate by Borrower and the City of a fair average compensation for such damages
and costs. Such charges shall be paid by Borrower without prejudice to the right of the City to
collect any other amounts provided to be paid under this Note, the Resale Restriction Agreement
or the Deed of Trust or, with respect to late payments, to declare a default.
8. Prepayments. The Borrower may prepay all or part of the balance due under this
Note including principal and Contingent Interest. In the event the entire amount of principal due
under this Note is prepaid, all Contingent Interest, calculated as of the date of prepayment, shall
also be due at the time of prepayment. In the event of pmtial prepayment, the amount of
Contingent Interest due upon prepayment shall be determined at the time of any partial
prepayment based on the Fair Market Value of the Property. Partial prepayments shall be
allocated between payment of Contingent Interest and payment of principal in the same
proportion as the ratio of each to the total amount due (principal and interest) at the time of
prepayment. Following a prepayment, the percentage of Contingent Interest due the City shall
be recalculated to reflect the paydown in principal owed the City. The recalculated Contingent
Interest shall equal the outstanding principal amount of the Note divided by Full Purchase Price.
Notwithstanding any prepayment of amounts due under this Note, the Resale Restriction
Agreement shall continue in full force and effect for the period of time set forth in Section 25 of
the Resale Restriction Agreement.
9. Limitations on Assumption of Note. The Borrower acknowledges that this Note
is given in connection with the purchase of the Prope1ty as part of a program of the City to assist
in the purchase of homes by very low income to low income households. Consequently, this
Note is only assumable by Eligible Purchasers (as defined in the Resale Restriction Agreement).
This Note is due in full upon all other Transfers. In the event this Note is assumed by an Eligible
Purchaser, the Eligible Purchaser shall execute a new note, which shall be in an amount equal to
the principal and Contingent Interest owed by Borrower, a new deed of trust and a new resale
restriction agreement with a restarted term in forms approved by the City.
10. Maintenance; Taxes; Insurance. Borrower shall maintain the Propetty in good
repair and in a neat, clean and orderly condition. Borrower shall promptly pay all prope1ty taxes
I 010/17/2045538.2
due on the Property prior to any delinquency and shall comply with the insurance requirements
set forth in the Deed of Trust and Resale Restriction Agreement.
11. Refinance of First Mortgage Loan. The outstanding principal and interest on this
Note shall not be due upon prepayment and refinance of the First Mo1tgage, and the Resale
Restriction Agreement and Deed of Trust shall be subordinated to the refinanced loan, provided
that: (a) such refinancing is approved by the City; (b) the amount refinanced does not exceed the
outstanding principal balance of the First Mortgage at the time of refinance plus reasonable costs
of refinance; and ( c) the refinance does not result in higher monthly payments on the First
Mortgage Loan than were due prior to the refinance.
12. Default.
(a) The Borrower shall be in default under this Note if he or she is in default
under the First Mortgage following the expiration of First Mo1tgage cure periods, or if, after the
notice and cure period provided by the City to the Borrower pursuant to the notice and cure
provisions of the Deed of Trust, the Borrower: (i) fails to pay any money when due under this
Note; (ii) breaches any representation or covenant made in this Note or Resale Restriction
Agreement in any material respect; or (iii) breaches any provision of the Deed of Trust.
(b) Upon the Borrower's breach of any covenant or agreement of the
Borrower in this Note, the Resale Restriction Agreement or the Deed of Trust, including, but not
limited to, the covenants to pay, when due, any sums secured by the Deed of Trust, the City,
prior to acceleration, will send, in the manner set forth in Section 17, notice to the Borrower
specifying: (i) the breach; (ii) if the breach is curable, the action required to cure such breach;
(iii) a date, not less than thirty (30) days from the date the notice is effective, by which such
breach, if curable, is to be cured; and (iv) if the breach is curable, that failure to cure such breach
on or before the date specified in the notice may result in acceleration of the sums secured by the
Deed of Trust and foreclosure by the City. The notice will also inform the Borrower of the
Borrower's right to reinstate after acceleration and the right to bring a court action to assert the
nonexistence of default or any other defense of the Borrower to acceleration and sale.
13. Acceleration. Upon the occurrence of a default under this Note, the Resale
Restriction Agreement, the Deed of Trust, or the First Mortgage, the City shall have the right to
declare the full amount of the principal along with any Contingent Interest under this Note
immediately due and payable. Any failure by the City to pursue its legal and equitable remedies
upon default shall not constitute a waiver of the City's right to declare a default and exercise all
of its rights under this Note, the Resale Restriction Agreement, and the Deed of Trust. Nor shall
acceptance by the City of any payment provided for herein constitute a waiver of the City's right
to require prompt payment of any remaining principal and interest owed.
14. No Offset. The Borrower hereby waives any rights of offset it now has or may
later have against the City, its successors and assigns, and agrees to make the payments called for
in this Note in accordance with the terms of this Note.
I 010/17/2045538.2
15. Waiver; Attorney Fees and Costs. The Borrower and any endorsers or guarantors
of this Note, for themselves, their heirs, legal representatives, successors and assigns,
respectively, severally waive diligence, presentment, protest, and demand, and notice of protest,
dishonor and non-payment of this Note, and expressly waive any rights to be released by reason
of any extension of time or change in terms of payment, or change, alteration or release of any
security given for the payments hereof, and expressly waive the right to plead any and all statutes
of limitations as a defense to any demand on this Note or agreement to pay the same, and jointly
and severally agree to pay all costs of collection when incurred, including reasonable attorney
fees. If an action is instituted on this Note, the Borrower promises to pay, in addition to the costs
and disbursements allowed by law, such sum as a court may adjudge reasonable as attorneys'
fees in such action.
16. No Waiver by the City. No waiver of any breach, default or failure of condition
under the terms of this Note shall be implied from any failure of the City to take action with
respect to such breach, default or failure or from any previous waiver of any similar or unrelated
breach, default or failure.
17. Notices. All notices required in this Note shall be sent by ce1iified mail, return
receipt requested, or express delivery service with a delivery receipt, or personally delivered with
a delivery receipt obtained and shall be deemed to be effective as of the date shown on the
delivery receipt as the date of delive1y, the date delivery was refused, or the date the notice was
returned as undeliverable as follows:
To the Bon-ower:
At the address of the Property
To the City:
City of Carlsbad
Housing and Homeless Services Division
Attn: Housing and Homeless Services Manager
1200 Carlsbad Village Drive
Carlsbad, CA 92008
The parties may subsequently change addresses by providing written notice of the change
in address to the other patties in accordance with this section.
18. Joint and Several Obligations. This Note is the joint and several obligations of all
makers, sureties, guarantors and endorsers, and shall be binding upon them and their successors
and assigns.
19. Nonliability for Negligence, Loss, or Damage. Borrower acknowledges,
understands and agrees that the relationship between Borrower and the City is solely that of
borrower and lender, and that the City does not unde1take or assume any responsibility for or
duty to Borrower to select, review, inspect, supervise, pass judgment on, or inf mm Borrower of
IOI0/17/2045538.2
the quality, adequacy or suitability of the Property or any other matter. The City owes no duty of
care to protect Borrower against negligent, faulty, inadequate or defective building or
construction or any condition of the Property and Borrower agrees that neither Borrower, or
Borrower'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 for these things .
20. Termination of Restrictions. Any legal restrictions on conveyance of the Property
(as defined in 24 CFR 203.41(a)(3)) included in this Note shall terminate upon transfer of the
Property by foreclosure, deed in lieu of foreclosure, or assignment to the Secretary of the United
States Department of Housing and Urban Development.
21. Controlling Law. This Note shall be construed in accordance with and be
governed by the laws of the State of California.
22. Assignment by City. The City may assign its right to receive the proceeds under
this Note to any person and upon notice to the Borrower by the City all payments shall be made
to the assignee.
23. Invalid Provisions. If any one or more of the provisions contained in this Note
shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such
provision or provisions shall be deemed severable from the remaining provisions contained in
this Note, and this Note shall be construed as if such invalid, illegal or unenforceable provision
had never been contained in this Note.
24. Entire Agreement. This Note (along with the Resale Restriction Agreement and
Deed of Trust) sets forth the entire understanding and agreement of the City and the Borrower
and any amendment, alteration or interpretation of this Note must be in writing signed by both
the City and the Borrower.
Rem"inder of page left intentionally blank
IO I 0/17/2045538.2
Executed by the undersigned as of the date first written above.
Notice to Borrower: This Note is not assumable
BORROWER:
~mlJ e;;o
c?ignature)
~OLCLO--: L . ~ac
(Print Name)
(Dated)
1010/17/2045538.2