HomeMy WebLinkAbout04-11-2017 Settlement Agreement_Haggie_Fully Executed_20170114SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release ("Agreement") is entered into this JI day of
- ri l 2017 (the "Effective Date") by the City of San Luis Obispo, a municipal corporation and
c ;anter city ("City") and Sabrina Haggie, an individual ("Haggie") (City and Haggie are
collectively referred to herein as the "Parties").
Recitals
WHEREAS, on July 20, 2007, Haggie purchased the property located at 3591 Sacramento Drive,
Unit No. 10, San Luis Obispo, CA 93401 (the "Property"). The Property was reserved for purchase
by moderate income households in accordance with the City's affordable housing guidelines. The
Property was subject to an Affordability Agreement/Deed of Trust Covenants for Tract 2534 which
was executed by Haggie's predecessor in interest and was recorded in the Official Records of San
Luis Obispo on January 18, 2006 as Document No. 2006004148 (the "Affordability Agreement").
As part of Haggie's purchase of the Property purchase, Haggie executed the following documents:
1. Promissory Note Secured by Deed of Trust (the "Note") dated July 3, 2007, in favor of
the City for the principal sum of $201,450 and bearing interest at the annual rate of 4.5
percentage points added to the 11 d' District Cost of Funds, published by the Federal
Home Loan Bank Board, and amortized over 30 years;
2. Purchase Money Deed of Trust, Deed of Trust Covenants Assignment of Rents
Security A&reement and Fixture Filing ("Deed of Trust") dated July 3, 2007
encumbering the Property and securing certain terms and conditions of the Note and
Affordability Agreement.
A true and correct copy of the Note, Deed of Trust and Affordability Agreement is attached as
Exhibit "A" and incorporated herein by this reference;
WHEREAS, on March 3, 2017, City notified Haggie that she was in default under the Note, Deed
of Trust and Affordability Agreement for failing to occupy the Property as her primary residence
and for renting the Property to a third party;
WHEREAS, pursuant to Code of Civil Procedure § 726 and 580b(a)(3), the City can only recover
the amount due on the Note through the underlying security (the Property) via enforcement of the
Deed of trust;
WHEREAS, the City desires to keep the Property as a deed restricted affordable unit which is
occupied by moderate income eligible individuals. Haggie has located eligible buyers, Chay and
Janeil Nance (the "Nantes"), who desire to purchase the Property subject to the affordable housing
restrictions. City desires to avoid the costs and delays associated with enforcement of the Note via
foreclosure of the Deed of Trust, either judicially or through a power of sale; and
Initials: 1A §
WHEREAS, by this Settlement Agreement, the Parties desire to resolve the default, keep the
Property as a deed restricted affordable unit occupied by an income eligible household, and enforce
the payment terms of the Note in an amount equitable and fair to the Parties.
Agreement
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein
and other good and valuable consideration, the sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the Parties hereby agree as follows:
A. Recitals. The recitals above are true and correct and are incorporated herein by this
reference.
B. Purchase and Sale of the Proper , City Reconveyance of Deed of Trust,• Partial Escrow
Instructions.
a. Subject to the terns and conditions hereof, City hereby consents to the sale of
the Property from Haggie to the Nances (the "Transaction') provided:
i. As of close of escrow for the Transaction, the Nances remain qualified
as a moderate -income household in accordance with City rules and
regulations; and
ii. Prior to close of escrow, the Nances shall execute a Note and Deed of
Trust substantially in the forms set forth as Exhibit "B." The Note will
be in the principal amount of the difference between the appraised value
of the Property and the purchase price. The Note will be in favor of City
and will be secured by a first or second Deed of Trust encumbering the
Property; and
iii. The purchase price of the Property for the Transaction shall be
$291,375 (the "Purchase Price").
iv. Close of escrow for the Transaction shall occur not later than April 30,
2017, unless otherwise agreed to in writing by City.
b. City agrees to fully reconvey the Deed of Trust at close of escrow for the
Transaction upon receiving payment in the total amount of $78,375 (the
"Payment").
C. Release. Upon close of escrow for the Transaction and City receiving the Payment,
City hereby releases and forever discharges Haggie, her agents, officers, employees,
representatives, and attorneys from any and all claims or causes of action which may now exist or
which may accrue in the future arising from or related to the compliance with the Note, the Deed
of Trust, or the Affordability Agreement including, but not limited to, waiver of any demand for
any additional sums due under the Note.
D. Miscellaneous
2
Initials:
The Parties represent and warrant that they understand that they have the right to be
represented by counsel and expressly acknowledge that they have had the opportunity to review
this Agreement with their chosen counsel. The Parties represent that they fully understand the
terns of this Agreement and agree to be bound by its contents. The Parties further represent that
they have full authority to enter this Agreement and do so of their own accord.
In any action or proceeding to enforce or interpret the terms of this Agreement or
otherwise arising out of the Agreement, the prevailing party shall be entitled to recover reasonable
attorney's fees.
This Agreement constitutes the entire agreement between the Parties with regard to the
subject matter set forth herein.
City and Haggie agree to execute all documents and instruments reasonably required
in order to consummate the Transaction and to do such further acts as may be necessary, desirable,
or proper to carry out more effectively the purposes of this Agreement.
It is expressly understood that this Agreement is in full accord and satisfaction of disputed
claims, and this Agreement will not be deemed an admission of liability or responsibility of either
Party hereto for any purpose.
This Agreement may be executed in multiple counterparts, each of which shall be deemed
an original, and all of which shall constitute one document to be effective as of the Effective Date.
Signatures that have been transmitted by facsimile or electronic mail shall be deemed to be original
signatures for the purposes of this Agreement. Photocopies of this Agreement shall have the same
effect as the original and may be used in lieu of the original for any purpose.
All notices, requests, demands, approvals, consents or other communications required
or permitted by this Agreement shall be addressed as set forth in the signature block below, shall
be in writing and shall be sent by (a) nationally recognized overnight courier, or (b) facsimile or
email shall be deemed received (i) if delivered by overnight courier, when received as evidenced
by a receipt, or (ii) if given by facsimile or email, when sent provided the sender receives no
indication that the transmission was not successful. Any notice, request, demand, direction, or
other communication sent by facsimile must also be sent within forty-eight (48) hours delivered
in accordance with the clause (a) above.
[SIGNATURES ON FOLLOWING PAGE]
Initials: /
--IN WITNESS -WHEREOF; the -Parties-have-executed-this-Agreement as ofthe last -date indicated
below.
City of San Luis Obispo
Smit na aggieidi H on, Mayor
Attest:
Send all notices herein to:
3411 Lynridge Drive, Unit B L4AM,L
Austin, TX 78723 Carrie Gallagher, City
Approved as to form:
Dietrick, City Attorney
all notices herein to:
City Attorney
990 Palm Street
San Luis Obispo, CA 93401
4
Initials: /
EXHIBIT "A"
1
2 RETURN TO:
3
4 City Clerk
5 City of San Luis Obispo
6 990 Palm Street
7 San Luis Obispo, CA 93401-3249
9
10 PROMISSORY NOTE
11 SECURED BY DEED OF TRUST
12
13 $201,450.00 Date: July 3, 2007
14
15 At San Luis Obispo, California
16
17 FOR VALUE RECEIVED, Sabrina Haggie, ("Maker") promises to pay to the order of the City of
18 San Luis Obispo ("City") at 990 Palm Street, San Luis Obispo, California 93401 or such other
19 address as City may from time to time designate, the sum of Two Hundred One Thousand, Four
20 Hundred and Fifty Dollars ($201,450.00) according to the terms set forth herein. This Note shall
21 accrue interest, compounded monthly, at an annual rate of 4.5 percentage points added to the
22 I1`' District Cost of Funds, as published by the Federal Home Loan Bank Board, amortized over
2 3 30 years. The Loan shall be amortized over thirty years, with monthly payments of principal and
4 interest due and payable to the City on the first day of each month unless waived or forgiven, as
25 set forth below.
26
27 1. Security for Note. This Note is secured by a deed of trust of even date herewith (the "Deed
28 of Trust") executed by Maker, as Trustor, and naming City as Beneficiary, covering certain real
29 property ("the Property") owned by Maker in the County of San Luis Obispo, State of California,
30 commonly knows as 3591 Sacramento Drive Unit 10, San Luis Obispo, which Property is
31 more particularly described in Exhibit A, attached hereto.
32
33 2. Incorporation of Affordable Housing Agreement. This Note and the Deed of Trust are
34 executed and delivered pursuant to that certain "Affordable Housing Agreement" (Affordability
35 Agreement") recorded in the County of San Luis Obispo on January 18, 2006, regarding
36 affordable housing requirements applying to Tract 2534, the...!Centex,Homes-Brvad 'St.'residential
37 development. Pursuant to the Affordability Agreement, Maker is to live at the Property....,
38 Consequently, this Note is subject to section 711.5 df..the California Civil Code, which grants to
39 City the authority to accelerate all amounts due under this Note if any subsequent transfer of the
40 Property at any time does not comply with the provisions of the Affordability Agreement or Deed
41 of Trust. The Affordability Agreement is incorporated herein by this reference as though set forth
42 in its entirety and attached hereto as Exhibit B.
43
44 3. City's Right of First Refusal. Upon resale, the City or the Housing Authority of the City of
15 San Luis Obispo shall have the first right of refusal to purchase the property at then current
46 appraised value. The consideration for the City's right of first refusal shall consist of 1 percent of
Affordable Housing Promissory Note
Page 2
1 the remaining City loan balance. The balance of the City loan remaining after deducting this 1
2 percent of the loan balance shall be credited toward the purchase price if the City chooses to
3 exercise the purchase option. The provisions of this section shall not impair the rights of a first
4 mortgage tender secured by a recorded deed of trust. The purchase money Iender shall have a
5 higher priority than the City's loan. The City's security shall be prioritized as a second mortgage.
6 This first priority applies to the purchase money lender's assignee or successor in interest, to:
7
8 i. Foreclose on the subject property pursuant to the remedies permitted by law and
9 written in a recorded contract or deed of trust; or
10
11 ii. Accept a deed of trust or assignment to the extent of the value of the unpaid first
12 mortgage to the current market value in lieu of foreclosure in the event of default
13 by a trustor; or
14
15 iii. Sell the property to any person at a fair market value price subsequent to
16 exercising its rights under the deed of trust. Any value in excess of the unpaid
17 mortgage and costs of sale administration shall be used to satisfy the City loan. In
18 no case may a first mortgage lender, exercising foreclosure assignment in -lieu of
19 foreclosure or sale, obtain value or rights to value greater than the value of the
1. 20 outstanding indebtedness on the first mortgage at the time of the debt clearing
p 1 action.
22
23 The following types of transfers shall remain subject to the requirements of the City's Ioan
24 and right of first refusal: transfer by gift, devise, or inheritance to the owner's spouse;
25 transfer to a surviving joint tenant; transfer to a spouse as part of divorce or dissolution
26 proceedings; or acquisition in conjunction with a marriage.
27
28 4. Due on Transfer. In the event Maker sells, leases, rents or otherwise transfers the
29 Property to any person or entity other than an "eligible household" (as such term is defined in the
30 Housing Agreement), then the Principal of and accrued interest on the Loan shall be immediately
31 due and payable to the City as set forth in the Deed of Trust in favor of City recorded
32 simultaneously herewith as a second deed of trust subordinate to the deed of trust of the first
33 mortgage lender on the Property.
34
35 5. Waiver of Principal and Interest. City waives timely payment of the Principal of and
36 interest on the Loan for such time as Maker, who has been determined by City or its Housing
37 Authority to be an eligible buyer, remains as the owner and occupant of the Property as Maker's
38 principal residence until July 30, 2037.
39
40 6. Forgiveness of Loan. City will forgive the repayment of the outstanding Principal of the
41 Loan and all interest thereon as long as Maker, or subsequent buyer determined by City or its
Affordable Housing Promissory Note
`# Page 3
1 Housing Authority to be an eligible household, remains as the owner and occupant of the
2 Property as Maker's principal residence until July 30, 2037.
3
4 7. Prepayment. This Note may not be prepaid in whole or in part, unless called due by City.
5
6 S. Payment. The amount due under this Note shall be paid without the necessity for notice
7 or demand by City.
8
9 9. Payment Amount. The amount due under this Note shall be paid from the net proceeds
10 as a result of any transfer. Net proceeds is the sales price minus any loans or liens that are senior
11 to this Note and minus closing costs.
12
13 10. Default Defined. In addition to other defaults referred to in this Note and the Deed of
14 Trust, it shall be a default under this Note if Maker fails to make any payment or perform any
15 obligation under or in connection with (a) this Note, (b) the Deed of Trust, or (c) any other note,
16 trust deed or other obligation of Maker relating to the Property, including but not limited to the
17 Affordability Agreement, or secured by all or any part of the Property, whether junior or senior to
18 this Note, and if such failure is not cured within such time as may be permitted by the obligation
19 or the obligee.
20
1 11. Options of City upon Default. Upon the occurrence of a default, City shall have the
22 option, without further notice or demand:
23
24 (a) To declare the Note to be immediately due and payable;
25
26 (b) If the default relates to a transfer of the Property, to bring an action at law or in
27 equity to require Maker and the proposed transferee to terminate and/or rescind the sales
28 contract or lease and/or to declare the transfer void, notwithstanding that the transfer may
29 have closed and become final as between Maker and the transferee; or
30
31 (c) To pursue any other remedy available under this Note or the Deed of Trust, or
32 at law or in equity or under any other agreement, instrument or document entered into by
33 Maker and City, including but not limited to the Affordability Agreement.
34
35 12. Failure to Exercise Options. Failure to exercise any such option upon the occurrence of
36 one or more events of default shall not constitute a waiver of City's right to exercise any such
37 option at a later time.
38
39 13. Costs of Enforcement and Collection. If Maker defaults under this Note, Maker shall
40 pay all costs of enforcement and collection, including, but not limited to, costs and attorney's
Affordable Housing Promissory Note
' Page 4
1 fees, including reasonable attorney's fees, whether or not such enforcement or collection includes
2 filing a lawsuit or prosecution of a lawsuit, if filed.
3
4 14. City's Right to Transfer Interest in Note. City and any subsequent holder of this Note
5 may at any time, without consent of Maker, sell, assign, pledge, hypothecate, transfer and
6 negotiate or grant participation in any part of or any interest in City's rights and benefits under
7 this Note to another governmental body or nonprofit organization which is eligible to receive
8 such transfer under state and federal law.
9
10 15. Waiver of Notice and Statute of Limitations. Except for any notice expressly required
11 by this Note, Maker waives demand, notice of demand, presentation for payment, notice of non -
12 payment or dishonor, protest and notice of protest. To the fullest extent permitted by law, Maker
13 waives the defense of the statute of limitations in any action on this Note or to recover on the
14 security for this Note.
15
16 16. Liability. City's acceptance of any payment under this Note which is less than payment in
17 full of all amounts then due and payable, or the granting of any extension of time for payment of
18 any amount due under this Note or for the performance of any covenant, condition or agreement
19 entered into by Maker and City, or City's grant of any other indulgence to Maker, or City's taking
.20 or release of other or additional security for the indebtedness evidenced hereby, or any other
1 modification or amendment of this Note shall in no way release or discharge the liability of
'22 Maker or any endorser, guarantor or other person secondarily liable for this Note.
23
24 17. Governing Law. This Note shall be governed by the laws of the State of California.
25 Maker agrees that the site of any hearing or action of whatever nature or kind regarding this Note
26 shall be conducted in the County of San Luis Obispo, State of California.
27
28 18. Severability. If any provision of this Note or any application of such provision be
29 declared by a court to be invalid or unenforceable, such invalidity or unenforceability shall not
30 affect any other application of such provision or the balance of the provisions hereof, which
31 shall, to the fullest extent possible, remain in full force and effect.
32
33N
MAKER:
34
35 Sabrina Haggie
36
37 (attach notarization)
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Affordable Housing Promissory Note
Page 5
CITY:
f
en H4rnpian, `City Ad iinistrative Officer
APPROVED AS TO FORM AND LEGAL EFFECT:
Je t1; La 1, City Attu ey
t State of California }
County of San Luis Obispo}
On July 19, 2007, before me, Diane R. Stuart, Notary Public, personally appeared
Sabrina Haggie, ( X ) personally known to me or ( ) proved to me on the basis of
satisfactory evidence to be the person whose name is subscribed to the within instrument
and acknowledged to me that she executed the same in her capacity, and that by her
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.
DIANE R. STUARi
COMM. #1581455 -�
• �. ± NOTARY PUBLIC - C FORM
Notary Public SAN LUIS OBISPO C4ipNN
MY COMM- Expires Juni 20, 2pQg
Capacity claimed by signer(s):
(X ) individual(s) ( ) corporation ( ) partnership ( ) attorney-in-fact ( ) political agency
Promissory Note (Secured by deed of Trust)
I
Affordable Housing Promissory Note
Page 6
EXHIBIT "A'
DESCRIPTION OF REAL PROPERTY
EXHIBIT A
LEGAL DESCRIPTION:
PARCEL NO. 1
Unit 38, as shown and described in the Condominium Plan for Phase 1 of Broad Street (together with any
amendments thereto, collectively, the "Plan") which was recorded on October 3, 2006, as Instrument No.
2006-69955, in Official Records of San Luis Obispo County, California ("Official Records"), which Plan
concerns a portion of Lot 2 of Tract No. 2534, according to the map ("Map") filed on May 11, 2006, in
Book 28, at Pages 35 to 38, inclusive, of Maps in the Office of the San Luis Obispo County Recorder.
PARCEL NO. 2
An undivided one -twentieth (1/20) fee simple interest as a tenant in common in and to the Common Area
described in the Plan.
PARCEL NO. 3
Exclusive easements appurtenant to Parcel Nos. 1 and 2 described above, over portions of Lot 1 of Tract
No. 2534, for use and enjoyment of yards, patios, decks and porches, all as applicable and as depicted
and assigned in the Plan, and described in the Declaration, for use and enjoyment of air conditioner
compressor pads, as described in the Declaration, and for internal and external telephone wiring
designed to serve a single Unit.
PARCEL NO. 4
Nonexclusive easements for access, use, enjoyment, drainage, encroachment, support, maintenance,
repairs and for other purposes, all as described or depicted in the Declaration, the Plan and the Map.
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RECORDING REQUESTED By
COMMERCE TITLE COMPANY
WHEN RECORDED RETURN TO:
City of San Luis Obispo
990 Palm Street
San Luis Obispo, Ca. 93401
Attn: City Clerk
JULIE RODEWALD
San Luis Obispo County— Clerk/Recorder
Recorded at the request of
Commerce Title Company
MEL ��
7/20/2007
2:11 PM
Doc # : 2007049615 Titles: 4 Pages: 18
I Fees 0.00
Taxes 0.00
Others 0.00
PAID 50.00
Recorded! for the Benefit of the
City of San Luis Obispo at No Fee Under
Section 27383 of the Government Code
The undersigned declare that there is no documentary
transfer tax on this matter.
PURCHASE MONEY DEED OF TRUST, DEED OF. TRUST"'COVENANTS,
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING
THIS PURCHASE MONEY DEED OF TRUST,`DEED OF TRUST COVENANTS,
ASSIGNMENT OF RENTS, SECURITY,AGREEMENT AND FIXTURE FILING (this
"Deed of Trust") is made as of this _3rd ,day of July 2 0 0 7 , by _Sabrina
Haggie ("Trusto?"), the,'
wner of tht+ real property described herein
below, whose address is:
3591 Sacramento Drive Unit 10 -�San..Y.uis•Obispo, California
To Commerce Title Company ("Trustee") in favor of the CITY
OF SAN LUIS OBISPO, a mutiicipal corporation, whose address is 990 Palm Street, San
Luis Obispo, California 93401,("Beneficiary").
WHEREAS, on January 18,2006, Beneficiary and Centex Homes, a Nevada general
partnership., entered into an Affordable Housing Agreement ("Affordability Agreement") to
implement Council Resolution No. 9594, approving the mixed use development called 3592
Broad Street; and
WHEREAS, to,implement said Affordability Agreement, Beneficiary and Trustor entered into
that certain Promissory Note ("Note") dated July3t 2007 pursuant to which Trustor
agreed to certain restrictions on the sale or transfer of that certain real property located in the
County of sail Luis Obispo, State of California, which is further described in Exhibit A (the
"Real Property".); and
WHEREAS, 'Beneficiary and Trustor desire to ensure that the Real Property remain affordable to
moderate -income persons for a period of not less than 30 years following the property's initial
date. of sale, pursuant to the Affordability Agreement.
Second Deed of Trust
Page 2
r
1 NOW, THEREFORE, THIS DEED OF TRUST WITNESSETH:
2
3 Trustor, in consideration of the indebtedness referred to below and the trust herein_ created;
4 irrevocably grants, conveys, transfers and assigns to Trustee, and its successors and assigns, in
5 trust, with power of sale and right of entry and possession, all of Trustor's estate,, right, title and
6 interest in, to and under the Real Property;
7 -
s TOGETHER WITH all strictures and improvements now existing or hereafter erected on the
9 Real Property, all easements, rights and appurtenances thereto or used din connection therewith,
1 o all rents, royalties, issues, profits, revenues, income and other benefits thereof or arising from the
11 use or enjoyment of all or any portion thereof (subject, however, to the right- -power and
12 authority given herein to Trustor to collect and apply such rents, royalties, issues, profits,
13 revenues, income and other benefits prior to an Event of Default hereunder), all interests in and
14 rights, royalties and profits in connection with all minerals, oil and gas -and other hydrocarbon
15 substances thereon or therein, development rights or credits, air Tights; -water, water rights
16 (whether riparian, appropriative or otherwise and- whether or not appurtenant) and water stock,
17 all intangible property and rights relating to the Real Property or the operation thereof or used in
18 connection therewith, including, without limitation, trade nauies and trademarks and all furniture
19 and fixtures, now or hereafter located in, or on, or -attached or..affixed to, or used or intended to
20 be used in connection with, the Real Property, including, but without limitation, all heating,
21 lighting, laundry, incinerating, gas, electric and power equipment, pipes, plumbing, fire
22 prevention and fire extinguishing, refrigerating, ventilating and communication apparatus, air
23 cooling and air conditioning apparatus, -shades,. awnings, blinds, curtains, drapes, attached floor
24 coverings, including rugs and carpeting and other installed appliances, attached cabinets, trees,
25 plants and other items of) andscaping,,shall, to the fullest extent permitted by law and for the
26 purposes of this Deed of Tfust, be deemed-to'be part and parcel of, and appropriated to the use
27 of, the Real Property pd,, whether or nqt affixed or annexed thereto, be deemed conclusively to
28 be real property and conveyed by this Deed of Trust, and Trustor agrees to execute and deliver,
29 from time to time, such -further -instruments and documents as may be required by Beneficiary to
30 confirm the lien of this'Deed of Trust on any of the foregoing;
31 -
32 TOGETHER WITH all of the estate, interest, right, title, other claim or demand which Trustor
33 now has or may hereafter acquire in any and all awards made for the taking by eminent domain,
34 or by any proceeding or puichase in lieu thereof, of the whole or any part of the Property (as
35 hereinafter•defined); including, without Iimitation, any awards resulting from a change of grade
36 of streets and awards for severance damages;
37
38 TOGETHER WITH all of the estate, interest, right, title and other claim or demand which
39 Trustor`riow has.or may hereafter acquire with respect to the unearned premiums accrued,
40 accruing'or to accrue and the proceeds of insurance in effect with respect to all or any part of the
41 foregoing.' till of the foregoing property referred to in this Deed of Trust, together with the Real
42 Property; is herein referred to as the "Property."
43
44 ARTICLE 1. PURPOSE AND CONSIDERATION. This trust deed is established for the
45 purpose of securing, in such order of priority as Beneficiary may elect:
Second Deed of Trust
Page 3
2 (a) The repayment of the indebtedness evidenced by Trustor's Promissory Note -(the
3 "Note") of even date herewith payable to the order of Beneficiary, in the principal sum bf ,
4 Two Hundred One Thousand, Four Hundred and Fifty Thousand Dollars {$201.,,450.00)
5 ("Principal"), and any and all late charges, interest costs or fees required thereunder and
6 all extensions, renewals, modifications, amendments and replacements•thereof. The
7 amount of the Note is the monetary difference between said property's initial sales price,
8 as allowed by the City's Affordable Housing Standards and its initial ixcarket value, as
9 determined by City's Community Development Director based oil sales information for
10 comparable market rate units provided by Trustee.
11
12 (b) The payment of all other sums which may be advanced by oi otherwise be due to
13 Trustee or Beneficiary under any provision of this Deed of Trust ,with interest (if any)
14 thereon at the rate provided herein or therein.
15
16 (c) Performance of all covenants of Trustor trade in this Deed of Trust.
17
18 (d) Performance of all obligations and conditions of•the Housing Agreement.
19
20 ARTICLE 2. DEED COVENANTS.., To protect fhe'security of this Deed of Trust, Trustor and
21 Trustee hereby covenant and agree as,follpWs:�
22 -
23 SECTION 2.01. Restrictions on Use "Mild Occupancy. The Real Property shall be used solely
24 for owner -occupied housing and occupied solely- by low- or moderate income households, as
25 defined in the Affordability.. Agreement.
26
27 SECTION 2.02. Restrictiong:on Sale. Th6leal Property shall be sold or otherwise transferred
28 only to eligible households, as dcfin"ed herein, or to the City, its Housing Authority, or to a non -
29 profit housing agency. designated by City. Sales prices shall be based on and consistent with the
30 Affordable Housing Standards published by the City's Community Development Department.
31
32 SECTION 2.03. ;n of Ilse, Occupancy and Sale Restrictions. Trustor agrees that the
33 above restriction's to to the usF,,occupancy and sale of the Real Property shall remain in effect for a
34 period of not less than thirty (30) years from the date of the property's initial sale, or until _
35 July 3 9 2037. Further, Trustor agrees that all future grant deeds for or transfers of interest in
36 the properties shall, contain a restriction providing that for the period of time specified in this
37 deed of trust, there shell be no sale, lease, rental, or other transfer of the properties except for the
38 sale_ b and occupation by eligible low or moderate income households. Any sale, lease, rental,
39 or other transfer of the property in violation of this covenant shall be void, as provided below.
40,
41 . `SECTION•,21104. Determination of Eligibility. Trustor and Trustee agree to retain the Housing
42 'Authority _of the City of San Luis Obispo, or other qualified entity acceptable to the City, to
43 determine whether prospective buyers qualify as eligible households as defined in the Affordable
44 Housing Standards.
45
Second Deed of Trust
Page 4
1 SECTION 2.05_ Covenants Binding. These affordability requirements shall be covenants
2 running with the land as defined in California Civil Code Section 1460, and shall'apply to the
3 Deal Property as further described on Exhibit A. Pursuant to Civil Code Section -1468; which
4 governs such covenants, the provisions of this Agreement shall be binding ' upon all parties
5 having any right, title, or interest in any of the properties described herein, or any portion thereof
6 and on their heirs, successors in interest and assigns for a period of 30 years from the initial date
7 of sale of the property. The parties agree that all future deeds or transfers -of interest regarding
8 the properties shall show the restrictions of this Agreement for as long as fhe `Agreeitent is in
9 effect.
to
t t SECTION 2.06. First Right of Refusal. Upon resale, Trustor and Trustee =agree that the City or
12 the Housing Authority of the City of San Luis Obispo ' shall have the first right of refusal to
13 purchase the property or properties at the then current appraised value, as further described in the
14 Note.
15
16 SECTION 2.07. Performance of Obligations Secured. Trustor shall promptly pay when due
17 the indebtedness evidenced by the Note and any late charges, costs and/or fees provided for in
18 the Note and shall further perform fully and in a-tim. ely'matuier all other obligations of Trustor
19 contained herein or in the Note.
20
21 ARTICLE 3 — INSURANCE REQUMEMEN�'
22
23 SECTION 3.01. Trustor shall keep tlie-lrroperty`and all improvements thereon insured against
24 loss or damage by fire with extended all-riskcoVerage clauses, including vandalism and
25 malicious mischief clauses; in an amount not less than one hundred percent (100%) of the full
26 replacement cost of such improvements with a company or companies and in such form and with
27 such endorsements as�may be. approved dr-fequiredby Beneficiary.
28 ,
29 SECTION 3.02. Trustor skull also maintain in full force and effect a policy of homeowners'
30 general liability insuranee'insuring Trustor against liability for bodily injury, property damage
31 and personal injury arising ou[ of the operation, use or occupancy of the Property. The initial
32 amount of such insuranee shall be One Hundred Thousand Dollars ($100,000.00) per occurrence
33 and not in the aggregate and.shall be subject to periodic increase based upon increased liability
34 awards or the reasonable recommendation of Trustor's professional insurance advisor. Trustor
35 shall name Beneficiary as an additional insured under such policy. Such insurance shall be
36 primary with respect to any insurance maintained by Beneficiary and shall not call on
37 Beneficiary's insurance for contributions.
38
39 SECTION, 3.03..Trustor shall pay all premiums for the insurance policies required to be
40maintained nder this Deed of Trust within fifteen (15) days after Trustor's receipt of a copy of
d t the premiu2 statement or other evidence of the amount due. At least thirty (30) days prior to the
42 expiration of such policy, Trustor shall deliver to Beneficiary a renewal of such policy.
43
44 SECTION 3.04. Any insurance which Trustor is required to maintain under this Deed of Trust
45 shall include a provision requiring that the insurance carrier give Beneficiary not less than thirty
4
Second Deed of Trust
Page 5
1 (30) days written notice prior to any cancellation or modification of such coverage. If Trustor (i)
2 fails to deliver any policy or renewal to Beneficiary required under this Deed of Trust within the
3 prescribed time period or (ii) if any such policy is canceled or modified to reduce the aiiiount by
4 type of coverage without Beneficiary's consent and no substituted comparable coverage is
5 obtained by Trustor prior to such cancellation or modification, Beneficiary may obtain such
6 insurance. In such case, Trustor shall reimburse Beneficiary for the cost of such insurance within
7 fifteen (15) days after receipt of a statement that indicates the cost of such irsuranee acid upon
8 proof that Beneficiary has paid said statement.
9
1 o SECTION 3.05. Trustor shall maintain all insurance required under this peed of Trust with
11 companies holding a "general policy rating" of A-8 or better; as set forth.in the-most current
12 issue of "Best Key Rating Guide." Trustor acknowledges that the insurance described in this
13 Section is for the primary benefit of Beneficiary. Beneficiary, makes no representation as to the
14 adequacy of such insurance to protect Trustor's or Beneficiary's-interestsr•Therefore, Trustor
15 shall obtain any additional property or liability insurance that Trustor-.deems necessary to protect
16 Beneficiary and Trustor, in the exercise of reasonable. judgment.
17
18 SECTION 3.06. Notwithstanding anything to the contrary'c9ntained herein, Trustor's obligation
19 to carry the insurance provided for herein may be,brought within the coverage of a so-called
20 blanket policy or policies of insurance carried and maintained by Trustor; provided, however,
21 that Beneficiary shall be narned as ar'additional insured thereunder and that the coverage
22 afforded Beneficiary will not be reduced nor diminished by reason of the use of such blanket
23 policy of insurance and provided further that tbe' requirements set forth herein are otherwise
24 satisfied.
25
26 SECTION 3.07. All of tbe. above-mentioned insurance policies or certificates of insurance must
27 be satisfactory to Beneficiary. BeneficiaiyOall not by the fact of approving, disapproving,
28 accepting, preventing,, obtaining or failing to obtain any insurance, incur any liability for or with
29 respect to the amount ofinsurance carried, the form or legal sufficiency of insurance contracts,
30 insolvency of insurance campanics or payment or defense of lawsuits and Trustor hereby
31 expressly assumesfUll responsibility therefor and all liability, if any, with respect thereto.
32
33 SECTION 3.08. Condemnation and Insurance Proceeds.
34
35 SUBSECTION_ 3.08(a). Any award of damages in connection with any taking or condemnation,
36 or for injury to the'Property by reason of public use, or for damages for private trespass or entry
37 ionto the Property is hereby assigned and shall be paid to Beneficiary as further security for all
38 obligations secured by this Deed of Trust. Upon receipt of such proceeds, Beneficiary may hold
39 the proceeds as frirther security or apply or release them in the same manner and with the same
do effect as'provided in this Deed of Trust for the disposition of proceeds of fire or other insurance.
-4 L -
42 SUBSECTION 3.08(b). Any insurance proceeds or awards in connection with any casualty or
43 damage or injury to the Property covered by insurance ("Insurance Proceeds") are hereby
44 assigned to Beneficiary to be held and applied by Beneficiary in the manner hereinafter
45 provided. Beneficiary may, at its option, and at its own expense, appear in and prosecute in its
Second Deed of Trust
Page 6
I own name any action or proceeding to enforce any cause of action for such Insurance Proceeds.
2 All Insurance Proceeds shall be applied by Beneficiary upon any indebtedness secured by this
3 Deed of Trust and in any order determined by Beneficiary or, at the option of Beneficiary, the
4 entire amount so collected or any part of that amount may be released to Trustor:,This_
5 application or release shall not cure or waive any default or notice of default udder this Deed of
6 Trust or invalidate any act done pursuant to such notice.
7 -
8 SUBSECTION 3.08(c). Trustor, immediately upon obtaining knowledge -of the institution of any
9 proceedings relating to condemnation or other taking of or damage or injury to the Property or
10 any portion thereof, or knowledge of any casualty damage to th Property or. damage in any other
I i manner, shall immediately notify Beneficiary in writing. Beneficiary may participate, at its own
12 expense, in any such proceedings and may join Trustor in adjusting any lass covered by
13 insurance.
14 `
15 ARTICLE 4. TAXES, LIENS AND OTHER ITEMS. Trustor shall pay, when due, all taxes,
16 bonds, assessments, fees, liens (including prior trust deed liens), charges, fines, impositions and
17 any and all other items which are attributable to or affect the Property and which may attain a
18 priority over this Deed of Trust or the indebtedness or evidence of indebtedness secured hereby,
19 by making payment prior to delinquency directly to the payee thereof. Trustor may initiate
20 proceedings to contest any such taxes,.bonds, assessments, -fees, liens, charges, fines, impositions
21 or other items so long as Trustor takessteps to ensure that Beneficiary's security is not
22 threatened in any manner. Trustor shall pay all costs of the proceedings, including any costs or
23 fees incurred by Beneficiary. Upon the final determination of any proceeding or contest, Trustor
24 shall immediately pay the amounts due, togetherwith all costs, charges, interest and penalties
25 incidental to the proceedings.
26
27 ARTICLE 5. RENTS AND. PROFITS. Trustor acknowledges and agrees that the Property
28 shall at all times be occupied by the Trustor as the Trustor's primary residence and shall not be
29 leased or rented during the term of the Note and this Deed of Trust. Notwithstanding the
30 foregoing, any rents, royalties, issues, profits, revenue, income and other benefits of the Property
31 arising from the use -and enjoyment of all or any portion thereof or from any lease or agreement
32 pertaining thereto (the "Rents and Profits"), whether now due, past due, or to become due, and
33 including all prepaid rents',pd security deposits, are hereby absolutely, presently and
34 unconditionally assigned, transferred, conveyed and set over to Beneficiary to be applied by
35 Beneficiary in -the payment of the principal and all other sums payable on the Note and of all
36 other sums payable under this Deed of Trust. It is understood and agreed that neither the
37 foregoing assignment of Rents and Profits to Beneficiary nor the exercise by Beneficiary of any
38 of its rights or remedies under Article 5 hereof shall be deemed to defeat the owner -occupied
39 restricti.ort.set forth in the Agreement or to make Beneficiary a mortgagee -in -possession or
40,,_ otherwiso,responsible or liable in any manner with respect to the Property or the use, occupancy,
41-, , enjoyment �r operation of all or any portion thereof, unless and until Beneficiary, in person or by
42 agent, assumes actual possession thereof. Further, the appointment of a receiver for the Property
43 by any Court at the request of Beneficiary or by agreement with Trustor, or the entering into
44 possession of the Property or any part thereof by such receiver, shall not be deemed to make
45 Beneficiary a mortgagee -in -possession or otherwise responsible or liable in any manner with
Second Deed of Trust
Page 7
I respect to the Property or the use, occupancy, enjoyment or operation of all or any portion
2 thereof.
3
4 ARTICLE 6. PRESERVATION AND MAINTENANCE OF PROPERTY. Trustor shall
5 keep the Property and every part thereof in good condition and repair and shall.not permitor
6 commit any waste, impairment or deterioration of the Property nor commit, suffer,or permit any
7 act upon or use of the Property in violation of law or applicable order of any -governmental
8 authority, whether now existing or hereafter enacted and whether foreseen or'iunfbxe5eeri,
9 including, without limitation, violation of any zoning, building or env i'ronmental-protection
10 statutes, ordinances, regulations, orders and restrictions or in•violation ofany_covenants,
11 conditions or restrictions affecting the Property or bring ov keep any article upon any of the
12 Property or cause or permit any condition to exist thereori which would be. prohibited by or could
13 invalidate any insurance coverage maintained or required'hereunder to be maintained by Trustor
14 on or with respect to any part of the Property and further shall do. all other acts which from the
15 character or use of the Property may be reasonably necessary to -protect the security hereof, the
16 specific enumerations herein not excluding the general. Trustor shall completely restore and
17 repair promptly and in a good and workmanlike manner any building, structure or improvement
18 thereon which may be damaged or destroyed and pay, When.due, all claims for labor performed
19 and materials furnished therefor, whether or natditsurance'or.:other proceeds are available to
20 cover, in whole or in part, the costs of any such restoration -or repair. Trustor shall notify
21 Beneficiary immediately in writing of any dam. age;to the Property in excess of Ten Thousand
22 Dollars ($ 10,000,00).
23
24 ARTICLE 7. PROTECTION OF'SECURJTY:-C_OSTS AND EXPENSES. Trustor shall
25 appear in and defend any action or proceeding purporting to affect the security hereof or the
26 rights or powers of Beni�fieiary'�or Ttustee and shall pay all reasonable costs and expenses,
27 including, without limitation, costs of ev-idtnce of title and reasonable attorney's fees, in any
28 such action or proceeding in.wbich Beneficiary or Trustee may appear and in any suit brought by
29 Beneficiary to foreclose this Teed of Trust or to enforco or establish any other rights or remedies
30 of Beneficiary hereunder. If Trustor fails to perform any of the covenants or agreements in this
31 Deed of Trust or if any action or proceeding is commenced which affects Beneficiary's interest in
32 the Property or any dart thereof, including, but not limited to, eminent domain, code enforcement
33 or proceedings of any nature, whatsoever under any federal or state law, whether now existing or
34 hereafter enacted or amended, relating to bankruptcy, insolvency, arrangement, reorganization or
35 other forrmbf debtor relief, or to a decedent, then Beneficiary or Trustee may, but without
36 obligation to do so,and upon ten (10) days' prior written notice to and demand upon Trustor
37 kunless•a.'shorter notice period is necessary to protect Beneficiary's interest in the security hereof,
38 in -which case only reasonable notice and demand under the circumstances shall be required) and
39 without releasing Trustor from any obligation hereunder, make such appearances, disburse such
40 sums and,take such action as Beneficiary or Trustee deems necessary or appropriate to protect
41 Beneficiary -s interest, including, but not limited to, disbursement of reasonable attorney's fees,
42 entry- upon 'the Property to make repairs or otherwise protect the security hereof, and payment,
43 purchase, contest or compromise of any encumbrance, charge or lien which in the judgment of
44 either Beneficiary or Trustee appear to be prior or superior hereto. Trustor further agrees to pay
45 all reasonable expenses of Beneficiary (including fees and disbursements of counsel) reasonably
Second Deed of Trust
Page 8
I related to the protection of the rights of Beneficiary hereunder, and enforcement or collection of
2 payment of the Note, whether by judicial or non judicial proceedings, or in connectioiz'with any
3 bankruptcy, insolvency, arrangement, reorganization or other debtor relief proceeding_dTrustax, `
4 or otherwise. Beneficiary shall give Trustor ten (10) days' prior written notice before disbursuig ,
5 any amounts pursuant to this Article. Any amounts disbursed by Beneficiary or.Trustee pursuant
6 to this Section shall be additional indebtedness of Trustor secured by this Deed of Trust as .of the
7 date of disbursement. All such amounts shall be payable by Trustor immediately.without
8 demand. Nothing contained herein shall be construed to require Beneficiary or Trustee to incur
9 any expense, make any appearance or take any other action.
10
ii ARTICLE 8. ENFORCEMENT.
12
13 Section 8.01. Acknowledgement of Enforceability. Trustorrepresents, warrants, covenants
14 and agrees that it is the lawful owner of the Real Property aid, that ..it has good right and lawful
15 authority to encumber the same as provided herein; that the Real -P-roperty is free from any and
16 all liens and encumbrances excepting only such as have been approved by Beneficiary and that
17 Trustor warrants and will defend the title to the Property against all claims and demands
18 whatsoever not specifically excepted herein (and. except -for Claims and demands arising from
19 acts or omissions of Beneficiary or any predecessor -in -interest to Beneficiary not previously
24 disclosed to Trustor), and Trustor will execute, ack,riowledge and deliver all and every such
21 further assurances unto Beneficiary of the title to the Property hereby conveyed and intended so
22 to be or that Trustor may be or shall becoine 'hereina#ter bound so to do. Trustor covenants and
23 warrants that the Note and this Deed of Trust are valid and enforceable obligations of Trustor in
24 accordance with the terms thereof and laereofy,and that this Deed of Trust does not, nor does the
25 Note, nor does the performance or observance by Trustor of any of the matters or things in the
26 Note or this Deed of Trutt, contravene any -covenant in any indenture or agreement affecting
27 Trustor.
28
29 Section 8.02. Due on -Saie,ind'Other Enforcement Provisions. Trustor's agreement to ensure
30 the continued owner occupancy of lici Real Property is a substantial material consideration to
31 Beneficiary and Beneficiary's agreement to accept the Note and to accept this Deed of Trust. In
32 accordance with Califbraia Civil Lode Section 711.5 and in order to induce Beneficiary to
33 accept this Deed of Trust and the Note, Trustor agrees that Trustor shall not Transfer all or any
34 part of the Property without the prior written consent of Beneficiary. Except for a Transfer to a
35 Eligible Household (as defined in the City of San Luis Obispo's Affordable Housing Standards),
36 Beneficiary may grant or deny such consent in its sole and absolute discretion and as a condition
37 to such consent may require any transferee to assume all obligations hereunder and to agree to be
38 bound by all provisions contained herein. In the event of any proposed Transfer, Trustor shall
39 provide Beneficiary with all financial and other information pertaining to the intended transferee
40, reasonably requested by Beneficiary. In the event of any Transfer without the prior written
41' , consent ofB�nefciary, Beneficiary shall have the absolute right, at its option, without demand
42 `'ot, notice; to declare all outstanding Principal and all other sums due hereunder and under the
43 Note to- be immediately due and payable. Further, Beneficiary may bring an action at law or in
44 equity to require Trustor and the proposed transferee to terminate and/or rescind any sales
45 contract or purchase and sale transaction between them and/or to declare the transfer void,
Second Deed of Trust
Page 9
notwithstanding that the transfer may have closed and become final as between Trustor and,the
2 transferee. Further, Beneficiary may pursue any other remedy available under this DeedofTtust
3 or the Note or at law or in equity or under any other agreement, instrument or document -entered
4 into by Trustor and Beneficiary. Beneficiary's consent to one Transfer shall not be deemed to be
5 a waiver of the right to require consent to a future or successive Transfer. As. used herein,
6 "Transfer" includes any sale, agreement to sell, assignment, exchange or other -conveyance. of the
7 Property or any portion thereof or any interest therein, whether voluntary, or -involuntary, by
8 operation of law or otherwise, except that a Transfer by gift, devise or inheritance to h spouse or
9 to a spouse as a part of a dissolution proceeding shall not be considered a Transf°er''for purposes
1 o of this Section. _
1I - -
12 ARTICLE 9. EVENTS OF DEFAULT. Each of the following shall bonstitute an event of
13 default ("Event of Default") hereunder (including, if Trustor and Trustee consists of more than
14 one person or entity, the occurrence of any of such events witli respect fo,any one or more of
15 such persons or entities):
16
17 SECTION 9.01. Breach of Covenants. Default by Trustor in the performance of any of the
18 covenants or agreements of Trustor contained herein, in the Note, in the Housing Agreement or
19 any other note or instrument, trust deed or other obligation of Trustor relating to the Property
20 secured by any part of or all of the Property, whether junior or senior to this Deed of Trust.
21
22 SECTION 9.02. Appointment of Trustee. The 'ap'p�'intment pursuant to an order of a court of
23 competent jurisdiction, of a trustee, receiver or Iiquidator of the Property or any part thereof, or
24 of Trustor, or any termination or voluntary suspension of the transaction of business of Trustor,
25 or any attachment, execution or otheiJudicial seizure of all or any substantial portion of Trustor's
26 assets; provided, however,. that if such attachment, execution or seizure is involuntary, Trustor
27 shall not be deemed in default-wiless the -same is not discharged within sixty (60) days.
28
29 SECTION 9.03. Bankruptcy Filing. The filing by or against Trustor of a petition in bankruptcy
30 or for an arrangement _or- for reorgani2ation or for other form of debtor relief pursuant to the
31 federal Bankruptcy Act, as the same may be amended or replaced from time to time, or any other
32 law, federal or state, "whether now existing or hereafter amended or enacted relating to
33 insolvency or debtor relief (except that in the case of a filing against Trustor, an Event of Default
34 shall not exist unless Trustor fails to have the proceeding discharged within sixty (60) days after
35 such filing), or the adjudication of Trustor as a bankrupt or an insolvent by a decree of a court of
36 competent jurisdiction, or the making of an assignment for the benefit of creditors, or the
37 admission by Trustor in writing of its inability to pay its debts generally as they become due, or
38 the.giving of consent by Trustor to the appointment of a receiver or receivers of all or
39 substantially all of its property.
a0 ,
41 SECTIOI 4.04. Misrepresentations. Any representation or disclosure made to Beneficiary by
42 Trustor as an inducement to the making of the loan evidenced by the Note that proves to be false
43 or misleading in any material respect as of the time the same was made, whether or not any such
44 representation or disclosure appears as part of this Deed of Trust.
45
Second Deed of Trust
Page 10
1 SECTION 9.05. Other Events. Any other event which, under this Deed of Trust, or under tie
2 Note or the Agreement, constitutes an Event of Default by Trustor hereunder or thereunder or..
3 gives Beneficiary the right to accelerate the maturity of the indebtedness, or any part thereof,_
4 secured hereby.
5
6 ARTICLE 14. REMEDIES. Upon the occurrence of any Event of Default and'the expiration
7 of any applicable period within which to cure the same, Trustee and Beneftdary shalrhave the
8 following rights and remedies:
r"
9 LL
l0 SECTION 10.01. Acceleration. Beneficiary may declare the entire outs 'imding,Ytincipal and all
I 1 other sums or payments required hereunder to be due and payable immediately-2hd
12 notwithstanding the date such sums would otherwise be due in accordance with the Note and the
13 Agreement.
14
15 SECTION 10.02. Entry. Whether or not Beneficiary exercises the right provided in Section
16 10.01 above, Beneficiary, in person or by agent or court-appointed receiver, may enter upon,
17 take possession of, manage and operate the Property or -any part thereof and do al l things
18 necessary or appropriate in Beneficiary's sole discretion in''connection therewith, including,
19 without limitation, making and enforcing, and if the same be,swbject to modification or
20 cancellation, modifying or canceling leases upon sucif terms or conditions as Beneficiary deems
21 proper, obtaining and evicting tenants; -and fixing of modifying rents, contracting for and making
22 repairs and alterations, and doing any and all other acfswhich Beneficiary deems proper to
23 protect the security hereof, and either with or without so taking possession, in its own name, in
24 the name of Trustor or by court-appointed receiver(which may be appointed on notice or on ex
25 parte application without notice), suing for or otherwise collecting and receiving the rents and
26 profits, including those past dui and unpaid, and applying the same less costs and expenses of
27 operation and collection,. inclWing reasdztable attorney's fees, upon any indebtedness secured
28 hereby and in such order as I ' 4 may determine. Upon request of Beneficiary, Trustor
29 shall assemble and make available to Beneficiary at the site of the Real Property any of the
30 Property which has been -removed therefrom. The entering upon and taking possession of the
31 Property, or any part.thereof, .the collection of any rents and profits and the application thereof as
32 aforesaid shall not ctire,orwaive any Event of Default theretofore or thereafter occurring or
33 affect any notice or Event ?f Default or notice, and, notwithstanding continuance in possession
34 of the Property or,any part thereof by Beneficiary, Trustor or a receiver, and the collection,
35 receipt and application-af the rents and profits, Beneficiary shall be entitled to exercise every
36 right provided for,itt_this Deed of Trust or by law or in equity upon or after the occurrence of an
37 Event of Default, including, without limitation, the right to exercise the power of sale. Any of the
38 actions referTed to in this Section may be taken by Beneficiary irrespective of whether any notice
39 of an Event of Default or election to sell has been given hereunder and without regard to the
40. adequacy.of the security for the indebtedness hereby secured.
42 SECTION 10.03. Judicial Action. Beneficiary may bring an action in any court of competent
43 jurisdictibn to foreclose this Deed of Trust or to enforce any of the covenants and agreements of
44 this Deed of Trust, or the Note and the Housing Agreement.
45
10
Second Deed of Trust
Page 11
i SECTION 10.04. Power of Sale.
2
3 SUBSECTION 10.04(a). Beneficiary may elect to cause the Property or any part thereof to be --
4 sold under the power of sale herein granted in any manner permitted by applicable law. In
5 connection with any sale or sales hereunder, Beneficiary may elect to treat any.,of the Property -
6 that consists of a right in action or that is property that can be severed from the Real Property or
7 any improvements thereon without causing structural damage thereto as if -the -same were
8 personal property and dispose of the same in accordance with applicable zlaw;'separate Ad apart
9 from the sale of the Real Property.
10
11 SUBSECTION 10.04(b). Trustee may, and upon request ofBeneficiaryshall, -from time to time,
12 postpone any sale hereunder by public announcement thereof at the time and place noticed
13 therefor. If the Property consists of several items of property, Beneficiary may designate the
14 order in which such items shall be offered for sale or sold. Any persop,J.ncluding Trustor,
15 Trustee or Beneficiary, may purchase at any sale ,hereunder, and Beneficiary shall have the right
16 to purchase at any sale hereunder by crediting uportfthe bid price the amount of all or any part of
17 the indebtedness hereby secured.
18
19 SUBSECTION 10.04(c). Should Beneficiary. desire that more than one sale or other disposition
20 of the Property be conducted, Beneficiary may, at its option, cause the same to be conducted
21 simultaneously, or successively, on the,,same day, tar at such different days or times and in such
22 order as Beneficiary may deem to be in its best interests, and no such sale shall terminate or
23 otherwise affect the lien of this Deed of -Trust on any part of the Property not sold until all
24 indebtedness secured hereby has been fully paid: Upon any sale hereunder, Trustee shall execute
25 and deliver to the purchaser or purchasers a deed or deeds conveying the Property so sold, but
26 without any covenant or warranty whaisoevm'express or implied, whereupon such purchaser or
27 purchasers shall be let irate in''Mediate possdssion; and the recitals in any such deed or deeds of
28 facts, such as default; the giving of notice of default and notice of sale and other facts affecting
29 the regularity or validity of such sale or disposition, shall be conclusive proof of the truth of such
30 facts and any such deed -or deeds shall be conclusive against all persons as to such facts recited
31 therein. --
32
33 SUBSECTION 10.04(d). '�n case of any sale of the Property pursuant to any judgment or decree
34 of any court or at..public auction or otherwise in connection with the enforcement of any of the
35 terms of thisDeed of Trust, Beneficiary, its successors or assigns, may become the purchaser,
36 and for the purpose -of malting settlement for or payment of the purchase price, shall be entitled
37 to deliver over and -use the Note, together with all other sums, with interest, advanced and unpaid
38 hereunder, in order that there may be credited as paid on the purchase price the sum then due
39 under theNote, including principal thereon and all other sums, with interest, advanced and
0 unpaid hereunder.
42 SECTION 10.05. Proceeds of Sale. The proceeds of any sale made under or by virtue of this
43 Article, together with all other sums that then may be held by Trustee or Beneficiary under this
44 Deed of Trust, whether under the provisions of this Article or otherwise, shall be applied as
45 follows:
1]
Second Deed of Trust
Page 12
1
2 (a) First, to the payment of the costs and expenses of sale and of any judicial proceedings
3 wherein the same may be made, including reasonable compensation to Trustee and Beriefieiary, '
4 their agents and counsel, and to the payment of all expenses, liabilities and advances made or
5 incurred by Trustee under this Deed of Trust, together with interest on all advances made by
6 Trustee at the maximum rate permitted by law to be charged by Trustee.
7 -- -
8 (b) Second, to the payment of any and all sums expended by Beneficiary udder t1lo, tei=n 'hereof
9 (including, but not limited to, sums paid by Beneficiary on the prior trtist-deed) not+then repaid
1 o and all other sums required to be paid by Trustor pursuant to.ariy 0ovisions.af this Deed of Trust
1 1 or the Note, including, without limitation, all expenses, liabilities and advances- Inade or incurred
12 by Beneficiary under this Deed of Trust or in connection ,with the enforcement hereof, together
13 with interest thereon as herein provided.
14
15 (c) Third, to the payment of the entire amount then due, owing or -.unpaid upon the Note,
16 including attorney's fees and costs.
17
18 (d) Fourth, all amounts otherwise due Beneficiary. -
19
20 (e) The remainder, if any, to the person or persons legally entitled thereto.
21
22 SECTION 10.06. Waiver of Marshal ing..Trustor, #sir itself and for all persons hereafter
23 claiming through or under it or who may at any time hereafter become holders of liens junior to
24 the lien of this Deed of Trust, hereby -expressly waives and releases all rights to direct the order
25 in which any of the Property -shall be sold in the event of any sale or sales pursuant hereto, and to
26 have any of the Propertyr add/or '"other property now or hereafter constituted security for any of
27 the indebtedness securpcd hereby; marshated� upon any foreclosure of this Deed of Trust or for
28 any other security for arty of said indebtedness.
29
30 SECTION 10.47. Remedies Cumulative. No remedy herein conferred upon or reserved to
31 Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law
32 provided, but each shall be cumulative and shall be in addition to every other remedy given
33 hereunder or now or hereaer existing at law or in equity or by statute. No delay or omission of
34 Trustee or Beneficiary to lercise, any right or power accruing upon any Event of Default shal I
35 impair anyrright or -power or shall be construed to be a waiver of any Event of Default or any
36 acquiescence therein;. and every power and remedy given by this Deed of Trust to Trustee or
37 ,Beneficiary may be exercised from time to time as often as may be deemed expedient by Trustee
38 or Beneficiary: If there exists additional security for the performance of the obligations secured
39 hereby, the holder of the Note, at its sole option, and without limiting or affecting any of its
4b , rights or'remedies hereunder, may exercise any of the rights and remedies to which it may be
41, entitled hereunder either concurrently with whatever rights and remedies it may have in
42 connection'with such other security or in such order as it may determine. Any application of any
43 amounts or any portion thereof held by Beneficiary at any item as additional security hereunder,
44 whether pursuant to this deed of trust or otherwise, to any indebtedness secured hereby shall not
45 extend or postpone the due dates of any payments due from Trustor to Beneficiary hereunder or
12
Second Deed of Trust
Page 13
1 under the Note, or change the amounts of any such payments or otherwise be construed to cure
2 or waive any default or notice of default hereunder or invalidate any act done pursuant to any
3 such default or notice. In the event that Beneficiary shall have proceeded to enforce any -right '
4 under this Deed of Trust by foreclosure, sale, entry or otherwise, and such proceedings shall
5 have been discontinued or abandoned for any reason or shall have been determined adversely, ;!
6 then, and in every such case, Trustor and Beneficiary shall be restored to their -former positions
7 and rights hereunder with respect to the Property subject to the lien hereof..----
9 ARTICLE 11. MISCELLANEOUS
10 ,
11 SECTION 11.01. Severability. In the event that any oneormore of the..provisions contained in
12 this Deed of Trust shall for any reason be held to be invalid, illegal or unenforceable in any
13 respect, such invalidity, illegality or unenforceability shall not affect any other provision of this
14 Deed of Trust, and this Deed of Trust shall be construed as if such invalid; illegal or
15 unenforceable provision had never been contained herein.
16
17 SECTION 11.02. Certain Charges. Trustor agrees to pay the charges of Beneficiary for any
18 service rendered Trustor, or on its behalf, connected. with this Deed of Trust or the indebtedness
19 secured hereby, including, without limitation, delivering to an escrow holder a request for full or
20 partial reconveyance of this Deed of Trust, transmitting to:,an escrow holder moneys secured
21 hereby, changing the records pertaining to thin Deed of Trust and indebtedness secured hereby,
22 showing a new owner of the Property and -replacing -an existing policy of insurance held
23 hereunder with another such policy.;.
24
25 SECTION 11.03. Notices. All notices expressly provided hereunder to be given by Beneficiary
26 to Trustor and all notices and demands of any kind or nature whatsoever that Trustor may be
27 required or may desire to give to or serve ail Beneficiary shall be in writing and shall be served
28 by first class or registered or. certified snail, return receipt requested. Any such notice or demand
29 so served shall be deposited in the United States mail, with postage thereon fully prepaid and
30 addressed to the party so to be served at its address above stated or at such other address of
31 which said party shall -have theretofore notified in writing, as provided above, the party giving
32 such notice. Service -6f any such notice or demand so made shall be deemed effective on the date
33 of actual delivery as shown by the addressee's return receipt or the expiration of forty-eight (48)
34 hours after the date of retailing, whichever is the earlier in time, except that service of any notice
35 of default or notice -of sale provided or required by law shall, if mailed, be deemed effective on
36 the date of mailing.
37
38 SECTION 11.04. Trustor Not Released. Extension of the time for payment or modification of
39 the terms of payment of any sums secured by this Deed of Trust granted by Beneficiary to any
40 successor-ig-interest of Trustor shall not operate to release, in any manner, the liability of the
41 original Trustor. Beneficiary shall not be required to commence proceedings against such
42 successor, or refuse to extend time for payment or otherwise modify the terms of the payment of
43 the sums secured by this Deed of Trust by reason of any demand made by the original Trustor.
44 Without affecting the liability of any person, including Trustor, for the payment of any
45 indebtedness secured hereby, or the lien of this Deed of Trust on the remainder of the Property
13
Second Deed of Trust
Page 14
1 for the full amount of any such indebtedness and liability unpaid, Beneficiary and Trustee are
2 respectively empowered as follows: Beneficiary may from time to time and without notice (a)
3 release any person liable for the payment of any of the indebtedness, (b) extend the time'vr
4 otherwise alter the terms of payment of any of the indebtedness, (c) accept additional.real or
5 personal property of an kind as security therefor, whether evidenced by deeds of trust,
6 mortgages, security agreements or any other instruments of security, or (d) alter, substitute- or
7 release any property securing the indebtedness; Trustee may, at any time and from -time. -to time,
8 upon the written request of Beneficiary (a) consent to the making of any Map -6r plat of the
9 Property or any part thereof, (b) join in granting any easement or creating_ any restriction thereon,
to (c) join in any subordination agreement or other agreement affecting this Deed.ofTrust or the
11 lien or charge hereof, or (d) reconvey, without any warranty,. all or part of the property.
12
13 SECTION 11.05. Inspection. Beneficiary may at any reasonable time or times make or cause to
14 be made entry upon and inspections of the Property or any pert thereoEin person or by agent.
15
16 SECTION 11.06. Reconveyance. Upon the payment in full of all sums secured by this Deed of
17 Trust or upon forgiveness of such payment in accordance with the Note, Beneficiary shall
18 request that Trustee reconvey the Property and shall surrender this Deed of Trust and Note
19 evidencing indebtedness secured by this Deed of Trust to Trustee. Upon payment of its fees and
20 any other sums owing to it under this Deed of Trust, Trust cc shall reconvey the Property without
21 warranty to the person or persons legally en titled:tl-ereto, Such person or persons shall pay all
22 costs of recordation, if any. The recitals in siich recdoiveyance of any matters of facts shall be
23 conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described
24 as "the person or persons legally entitled thereto." Five (5) years after issuance of such full
25 reconveyance, Trustee may, destroy the Note and this Deed of Trust unless otherwise directed by
26 Beneficiary.
27
28 SECTION 11.07. Interpreta'ti#on. Wherever used in this Deed of Trust, unless the context
29 indicates a contrary intent,"or unless othem ise specifically provided herein, the word "Trustor"
30 shall mean and include both Trustor and any subsequent owner or owners of the Property, and
31 the word "Beneficiary" shall mean and include not only the original Beneficiary hereunder but
32 also any future owner and holder, including pledgees, of the Note secured hereby. In this Deed
33 of Trust wherever the conttpxt so requires, the masculine gender includes the feminine and/or
34 neuter, and the neuter ,includes the feminine and/or masculine, and the singular number includes
35 the plural and conversely; In this Deed of Trust, the use of the word "including" shall not be
36 deemed .to limit the- genera I ity of the term or clause to which it has reference, whether or not
37 non -limiting language (such as "without limitation," or "but not limited to" or words of similar
38 import�is used with reference thereto. The captions and headings of the Articles and Sections of
39 this Deed'of Trust are for convenience only and are not to be used to interpret, define or limit the
40_ provisions hereof.
4.1 � I
42 SIrCTIONI 1.08. Consent. The granting or withholding of consent by Beneficiary to any
43 transaction as required by the terms hereof shall not be deemed a waiver of the right to require
44 consent to future or successive transactions.
45
14
Second Deed of Trust
Page 15
t SECTION 11.09. Successors and Assigns. All of the grants, obligations, covenants,
2 agreements, terms, provisions and conditions herein shall run with the land and shall,apply to.
3 bind, and inure to the benefit of the heirs, administrators, executors, legal representative's;
4 successors and assigns of Trustor and the successors -in -trust of Trustee and the, endorsees,
5 transferees, successors and assigns of Beneficiary. In the event that Trustor is composed of more'
6 than one party, the obligations, covenants, agreements and warranties contained herein as well as
7 the obligations arising therefrom are and shall be joint and several as to each such',party.
9 SECTION 11.10. Governing Law. This Deed of Trust shall be governed by and` construed under
10 the laws of the State of California. f
11 l ----
12 SECTION 11.11. Trustor Waivers. Trustor waives the benefit of all laws now existing or that
13 hereafter may be enacted with respect to any statute of limitations for the filing of any action or
14 claims by Beneficiary.
15 -
16 SECTION 11.12. Superiority of First Lender'Documents.
17
18 SUBSECTION 11.12(a). This Deed of Trust shall riot diminish or affect the rights of the First
19 Lender under that certain deed of trust dated J u rie 28, _2 Q 0L7, executed by
20 the Trustor in favor of the First Lender.,and recorddd in the County of San LE's Obispo on
21 j7" i y ZQ , ; 0 p7 , and assigned instrument No. Cats GypW4 r any subsequent
22 First Lender deeds of trust hereafter recaTded againsf he Security (the "First Deed of Trust"),
23 except as provided in Subsection 12;.13-(6) below. Beneficiary and Trustor acknowledge and
24 agree that this Deed of Trust is subject and subordinate in all respects to the liens, terms,
25 covenants and conditions of the First Deed of Trust and to all advances heretofore made or
26 which may hereafter be made p`itrsuarnt'to the First Deed of Trust including all sums advanced for
27 the purpose of (i) protecting or further ie`nring the lien of the First Deed of Trust, curing
28 defaults by the Trustor under the Firs0ced of Trust or for any other purpose expressly
29 permitted by the First Deed of Trust or (ii) constructing, renovating, repairing, furnishing,
30 fixturing or equipping the Property., The terms and provisions of the First Deed of Trust are
31 paramount and controlling, and they supersede any other terms and provisions hereof in conflict
32 therewith.
33
34 SUBSECTION H. l2(b). 7zi the event of default, the First Lender may take the following actions
35 to cure the' de fault, provided first that: (i) the Beneficiary has been given written notice of a
36 default under the First Deed of Trust, and (ii) the Beneficiary shall not have cured the default
37 -_under the First Dced of Trust, or diligently pursued curing the default as determined by the First
38 Lender, within the 60 -day period provided in such notice sent to the Beneficiary:
39
40 1) Foreclose on the subject property pursuant to the remedies permitted by law and written
41 - in a�ecorded contract or deed of trust; or
42
43 '2 -)---Accept a deed of trust or assignment to the extent of the value of the unpaid first
44 mortgage to the current market value in lieu of foreclosure in the event of default by a
45 trustor; or
15
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
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19
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24
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40,
41.
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Second Deed of Trust
Page 16
3) Sell the property to any person at a fair market value price subsequent to exercising its
rights under the deed of trust. Any value in excess of the unpaid mortgage artd--costs-_of,
sale administration shall be used to satisfy the City loan, In no case may'a first mortgage
lender, exercising foreclosure assignment in -lieu of foreclosure or sale, obtain value or
rights to value greater than the value of the outstanding indebtedness on the first
mortgage at the time of the debt clearing action. -- -
The following types of transfers shall remain subject to the requirements.of the City's loan -and
right of first refusal: transfer by gift, devise, or inheritance to the owner's spouse'; transfer to a
surviving joint tenant; transfer to a spouse as part of divorce or ,dissolution proceedings; or
acquisition in conjunction with a marriage.
SECTION 11.13. Request for Notices of Default and Salk.
SUBSECTION 11.13(a). Trustor hereby requesm.,that a copy of any notice of default and notice
of sale as may be required by law or by this Deed of Trust be mailed to Trustor at its address
above stated.
SUBSECTION 11.13(b). In accordance with .Section 2924b of the California Civil Code, request
is hereby made that a copy of any notice of defhWt and a. dopy of any notice of sale under that
deed trust recorded concurrently herewith, ,be -mailed t& Community Development Director,
City of San Luis Obispo, 990 Palm Street;:Shn,tuis'Obispo, California 93401.
SECTION 11.14. No Transfer. Trustor shall not voluntarily or involuntarily (except for a
transfer in accordance with>theHousingAgreement) assign or otherwise transfer any of its
rights, duties, liabilities or obligations hereunder or under the Note without the prior written
consent of Beneficiary.
SECTION 11.15. Attorney's fees, In any action to interpret or enforce any provision of this
Deed of Trust, the prevailing party shall be entitled to reasonable costs and attorney's fees.
IN WITNESS WHEREOF, the undersigned have executed this Deed of Trust as of the day and
year first above written. (attach notarization)
1 .
or" ,
5 4 5tr # 41 A- t4i c e
"Trustor"
16
I
STATE OF CALIFORNIA 4 D
COUNTY OF
On
before me, Lola L_WFiate _
a Notary Public in and for sold State, personally appeared
personally bnown to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the some in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument. -
WITNESS my hand and official seal. LOLA L. WINGATE
aCoM1,1. e16MM m
SMLOS OBISPQ COUNTY r
OMYC—MXP-
E4an-9.2010
WIF
Signature
EXHIBIT A
LEGAL DESCRIPTION: '
PARCEL NO. 1
Unit 38, as shown and described in the Condominium Plan for Phase 1 of Broad Street.(tog�tber with any',
amendments thereto, collectively, the "Plan") which was recorded on October 3, 2006-, As Instrument No.,) ;
2006-69955, in Official Records of San Luis Obispo County, California ("Official Recofdsi.'), whi&%-Plan
concerns a portion of Lot 2 of Tract No. 2534, according to the map ("Map") filed on'May-11, 2006, in
Book 28, at Pages 35 to 38, inclusive, of Maps in the Office of the San Luis Obispo County RecorBer.
PARCEL NO. 2
An undivided one-twentieth (1/20) fee simple interest as a tenant in common in and to;61e Common Area
described in the Plan.
PARCEL NO. 3
Exclusive easements appurtenant to Parcel Nos. 1 and 2 described above, over portions of Lot 1 of Tract
No, 2534, for use and enjoyment of yards, patios, decks and porches, all as applicable and as depicted
and assigned in the Plan, and described in the Declaration, for use and.enjoyment of air conditioner
compressor pads, as described in the Declaration, acid for internal and external telephone wiring
designed to serve a single Unit.
PARCEL NO. 4
Nonexclusive easements for access, use, enjoyment, dr-aipage, enctoachment, support, maintenance,
repairs and for other purposes, all as described or depicted in.the Declaration, the Plan and the Map.
-
C
END OF DOCUMENT
RECORDING REQUESTED BY:
City of San Luis Obispo
WHEN RECORDED MAIL TO:
Community Development Department
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401-3249
JULIE RODEWALD
San Luis Obispo county—clerk/Recorder
Recorded at the request of
Public
DOC#: 2006004148
NR
1/18/2008
3:42 PM
Titles: 1 Pages: 7
Fees
0.00
Taxes
0.00
Others
0.00
PAIO.-
$0.00
Recorded for the Benefit. of the City of
San Luis Obispo at No Fee Under
Section 27383 of the Government Code
AFFORDABILITY AGREEMENT/DEED OF TRUST COVENANTS FOR TRACT 2534
200,,THIS AGREEMENT is made and entered into this day of
by and between the City of San Luis Obispo (the ",City) and Centex -tomes, a Nevada
general partnership Centex Real Estate Corporation, a Nevada corporation, managing general
partner ("Owner"), collectively referred to as "the parties.".
RECITALS
A. In 2004, the City Council adopted,Resolution No. 9594, approving a
mixed-use condominium project with 82 dw" e.11ings and 31,280 square feet of
commercial floor area, located at 35,9�.8Poad'Street ("the project"); and
B. Mixed -Use Project Condition #11,,6( that approval requires the applicant to
provide a minimum of six (6) affordable dwelling units, including at least 3 rentals
and 3 for -sale units. (The applicant'Will pay a pro -rated Inclusionary Housing Fee
to meet the full requirement of. -10 9ffo(dable dwelling units.); and
C. The parties have agreed that .the Owner shall construct and sell homes in
conformance with the -City's Af oafahle Housing Standards; and
D. The City and Owner desire to assure that the affordable dwelling units identified
in this agreernerit remain'- affordable to low or moderate income households for a
period of at least 36 years. -
NOW, THEREFORE; the. parties�acknowledge and agree as follows:
ARTICLE 1. DEFINITIONS
1.01. "Moderate income households" means persons and families whose income does not
exceed 12d percent of the County of San Luis Obispo area median income, adjusted
for family size pursuant to the City of San Luis Obispo Affordable Housing Standards.
1.02. "Lowl,,income households" means persons and families whose income does not exceed
80 pe,'rcent of the County of San Luis Obispo area median income, adjusted for family
size pursuant to the City of San Luis Obispo Affordable Housing Standards.
1.03 Persons and families meeting the definition under Sections 1.01 and 1.02 shall be
referred to as "eligible households."
1.04 "The properties" shall mean those specific real properties described in this-agreemerit,
intended to be sold to and occupied by eligible households.
ARTICLE 2. RESTRICTIONS }
2.01. The three (3) condominium units to be constructed on the properties.shall be -used for
owner -occupied housing purposes and shall be sold to eligible households.' At initial
sale, the sales prices shall be determined at time of building occupancy release, in
accordance with City of San Luis Obispo affordable housing standards. For
subsequent sales to eligible households, sales prices shall be based on and consistent
with then current City affordable housing standards.
2.02. The grant deed from Owner, or Owner's successors, in interest and all future grant
deeds for transfers of interest in the properties shall'contain a -restriction providing that
for the period of time specified in this Agreement, there shall be no sale, lease, rental,
or other transfer of the properties except for the sale to and occupation by eligible low
or moderate income households. Any sale,.'lease, rental, or other transfer of the
property in violation of this covenant shall be void.:,
2.03. The Owner agrees to retain the Housing. Authority of the City of San Luis Obispo, or
other qualified entity acceptable to `th' City,:for screening of potential buyers to
determine if they qualify as eligible households.-"
2.04. These affordability requirements shall -be covenants running with the land as defined in
California Civil Code Section. 1460, and shall apply to the properties as shown on
Exhibit A. Pursuant to Civil Code Section 1468, which governs such covenants, the
provisions of this.Agreement shall be binding upon all parties having any right, title, or
interest in any of the properties described herein, or any portion thereof and on their
heirs, successors in interest and assigns for a period of 34 years from the date of
occupancy of the property. ' The parties agree that all future deeds or transfers of
interest regarding ' the properties shall show the restrictions of this Agreement for as
long as the Agreement is in effect.
2.05. When a designated affordable housing unit is first sold to an eligible buyer, the buyer
and City shall enter -into an Affordable Housing Agreement which shall be recorded as
an encumbrance on the property, and secured by a recorded deed of trust. Said
agreement and deed of trust shall establish the monetary difference between the initial
purchase price and the initial appraised value as a loan payable to the City. Said loan
shall accrue interest, compounded annually, at an annual rate equal to 4.5 points
added to the 11th District Cost of Funds as currently published by the Federal Home
Loan Pank Board, amortized over 30 years, and the monthly payments of principal and
interest shall be waived by the City as long as the owner previously approved by the
City Housing Authority as an eligible household, or subsequent buyers approved by the
Housing Authority as eligible households, continue to own and reside in the property
subject to the City loan as his or her principal residence.
2
2.06. If a designated affordable housing unit is sold, leased, or otherwise transferred•.to an
entity other than to an eligible household, in violation of this agreement, the City's Ivan
shall immediately become due and payable from the proceeds of sale of the property.
"Proceeds of sale" shall mean the value of any and all consideration, however
denominated, received or to be received by the Seller from the sale of the property
after the payment of the first deed of trust.
2.07. Upon resale, the City or the Housing Authority of the City of San Luis Obispo shall
have the first right of refusal to purchase the property or properties -at current appraised
value. The consideration for the City's right of first refusal shall .consist of l' -percent of
the remaining City loan balance. The balance of the City loan remaining after
deducting this 1 percent of the loan balance shall be credited toward the purchase
price if the City chooses to exercise the purchase option, -The provisions of this section
shall not impair the rights of a first mortgage lender secured by a recorded deed of
trust. The purchase money lender shall have a higher priority than the City's loan. The
City's security shall be prioritized as a second mortgage. This,first priority applies to
the purchase money lender's assignee or successor in interest,to:
(i) Foreclose on the subject property pursuant to the remedies permitted by law
and written in a recorded contract or deed of trust; or
(ii) Accept a deed of trust or assignment to the extent of the value of the unpaid
first mortgage to the current market'value in lieu of foreclosure in the event of
default by a trustor; or.,,,,,.
(iii) Sell the property to any person j'at a .fair market value price subsequent to
exercising its rights under the -'deed of�trust. Any value in excess of the unpaid
mortgage and costs of sale administration shall be used to satisfy the City loan.
In no case may a first mortgage lender, exercising foreclosure assignment
in -lieu of foreclosure or sale, obtain value or rights to value greater than the
value of theoutstanding indebtedness on the first mortgage at the time of the
debt clearing action.
In addition, the following types of transfers Shall remain subject to the requirements of
the City's loan and right of first refusal: transfer by gift, devise, or inheritance to the
owner's spouse; transfer to 'a surviving joint tenant; transfer to a spouse as part of
divorce or dissolution proceedings; or acquisition in conjunction with a marriage.
ARTICLE 3. TIMING
3.01. In the event the -Owner has not completed the construction of the housing units and
received a final building inspection on all units within two years from the date of
conveyance of the Grant Deed, the property ownership and control of the properties
small revert to the City. Extensions of this period of time may be granted at the
discretion of the City if the developer has demonstrated just cause and a "good faith"
eff6 t' �o develop the property.
3
ARTICLE 4. GENERAL
4.01. Required notices shall be sent by certified mail, return receipt requested, � 16,,Ithe
following addresses:
If to the City: City of San Luis Obispo
Community Development Director
990 Palm Street %' J
San Luis Obispo, CA 93401-3249 i
If to the Owner: Centex Homes c/o Grant Robbins .
735 A Tank Farm Road Suite 100
San Luis Obispo, CA 93401 i
4.02. The Owner hereby specifically acknowledges and agrees: to be bound by the
covenants respecting affordability on the Property, contained herein.
IN WITNESS WHEREOF, this Agreement has been'dufy--ex6cuted by the undersigned
as of the date set forth below.
Ocentexmen, a Nevada general partnership Date
Centex Real Estate Corporation,
a Nevada corporation, managing general -partner
CITY:
V'Wc,r
Kew Ratnnlan, ri ty A.1mi nistrat:i.ve Officer
by: Shelly Stanwyck; Assistant CAO
i
APPROVER AS TO FORM AND LEGAL EFFECT:
joAwhaeCowell, City Attorney
4
STATE OF CALIFORNIA )
)SS
CONN OF SAN LUIS OBISPO )
On before me,
P046AWt+ - 1
penz��
rsonally known to_melor proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s)
'(,Pre subscribed to the within instrument and
acknowledged to me that helshelihey executed the same
in Gherl their authorized caparity(ies) and that by
Ff er/their signature(s) on the instrument the person(s),
or the entity upon behalf of which the person(s) acted,
executed f ' s ru nt.
WIT SS my ha and off ic' 1,
RMANNA FULUER
� ;;'`. �pmmisstvn t114p0915
Notary. Public
cadiomia
NTYM
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MW
A 62007
(The above area for official notarial seal)
Signat
A
STATE OF CALIFORNIA }
)ss
COUNTY OF SAN LUIS OBISPO )
On January 3, 2006, before me Audreyoper, City Clerk, personally appeared M. Stanwydk,
Assistant City Administrative Officer, CITY OF SAN LUIS OBISFO, persanally.known to me
to be the person(JI whose-name(g) is/am
subscribed to the within instrument and acknowledged to me that he/she/gte�y executed the same
in htrher/trir authorized capacity(}, and that by*s/her/their 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
CiyC rk,
t
(Seal)
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END OF DOCUMENT
' " �•.. SCJ � � �, �
EXHIBIT "B"
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of San Luis Obispo
Community Development Department
919 Palm Street
San Luis Obispo, CA 93401-3249
Attn: Community Development Director
No fee for recording pursuant to (Space above for Recorder's Use)
Government Code Section 27383
OCCUPANCY, RESALE, AND REFINANCING RESTRICTION AGREEMENT, WITH
OPTION TO PURCHASE AND PROMISSORY NOTE SECURED BY DEED OF TRUST
(Long -Term Affordability Program)
[enter note amount] [enter date]
at City of San Luis Obispo, California
NOTICE TO BORROWER: THIS DOCUMENT GRANTS THE CITY AN OPTION TO BUY
YOUR PROPERTY AT A RESTRICTED PRICE THAT MAY BE BELOW THE MARKET
VALUE AND CONTAINS PROVISIONS RESTRICTING ASSUMPTIONS.
FOR VALUE RECEIVED, the undersigned [enter homeowners' name(s)] (the "Borrower")
promises to pay to the order of the City of San Luis Obispo, a California charter city and
municipal corporation (the "City"), at 990 Palm Street, San Luis Obispo, California 93401 or
such other address as City may from time to time designate, the sum of the difference between
the Appraised Market Value and the Affordable Sale Price, as those terms are hereinafter
defined, [enter note amount] (the "Loan") according to terms set forth herein. The Loan shall
accrue interest, compounded monthly, at an annual rate of three (3) percentage points added to
the 11th District Cost of Funds, published by the Federal Home Loan Bank Board. Payments of
principal and interest are due and payable to the City as set forth below.
1. Security for Note. This Occupancy, Resale, and Refinancing Restriction
Agreement, with Option to Purchase and Promissory Note Secured by Deed of Trust (the "Note"
is secured by that certain Purchase Money Deed of Trust, Deed of Trust Covenants, Assignment
of Rents, Security Agreement and Fixture Filing dated [enter Deed of Trust date] (the "Deed of
Trust") executed by Borrower, as Trustor, and naming the City as Beneficiary, covering certain
real property owned by Borrower in the County of San Luis Obispo, State of California,
commonly known as [enter property address] and more particularly described in Exhibit A to
this Note. Borrower acknowledges that this Note is given in connection with the Borrower's
purchase of the Property as part of a program of the City to assist in the purchase of residences
by low and moderate income households. Said property, including both the real property and all
improvements now or hereafter erected on the property, and all easements, rights, appurtenances
and all fixtures now or hereafter attached to the property, shall be referred to in this Note as the
1
1808\03\1835472.4
Property. The term "Property," as used herein, shall have the same meaning as the term
"Security" is used in the Deed of Trust.
2. Purpose of the Note. Borrower is purchasing the Property in conformance with
that certain Affordable Housing Agreement and Declaration of Restrictive Covenants (the
"Agreement") recorded in the Official Records of the County of San Luis Obispo on [enter date
of recordation] as Instrument No. [enter recording number] regarding affordable housing
requirements applying to [enter the residential development information].
The Agreement implements policies contained in the Housing Element of the City's General
Plan, Chapter 17.91 of the San Luis Obispo Municipal Code and the City's "Affordable Housing
Standards" published by the City's Community Development Department pursuant to Municipal
Code Section 17.91.040 B (the "Legal Requirements") as part of an effort by the City to create
affordable home ownership opportunities for [enter income level] -income persons and
households. The Legal Requirements provide for the sale of some homes at an Affordable Sales
Price to an Eligible Household, as such terms are defined below.
This Note evidences: (a) the obligation of the Borrower to occupy the Property as his or her
primary residence; (b) the resale restriction prohibiting the Borrower from transferring the
Property to any person or entity other than an Eligible Household, as such term is defined below;
(c) the grant to the City of an Option to purchase the Property following a Default under the
terms of this Note; and (d) the obligation of the Borrower to pay the Loan amount to the City.
3. Definitions. In addition to terms defined elsewhere in this Note, the following
terms have the following meanings in this Note:
(a) "Affordable Sales Price" means the maximum allowable sales price for
an Affordable Unit in effect at the time of its sale to an Eligible Household, which is to be
calculated in accordance with the formula provided in the Affordable Housing Standards, which
is subject to annual updates.
(b) "Appraised Market Value" means the value of the Property at the time of
its sale to an Eligible Household, as agreed to by the parties or, if the parties are unable to agree,
as determined by a certified MAI or other qualified real estate appraiser approved in advance 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.
(c) "Eligible Household" means a household which has been determined to
be eligible to purchase an Affordable Unit as a [enter income level] Income Household, in
compliance with the Affordable Housing Standards.
(d) "Transfer" means 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, a life estate, a leasehold interest, an interest evidenced by a land contract
by which possession of the Property is transferred and Borrower retains title, or a deed of trust.
4. Term. The Term of this Note shall be forty-five (45) years.
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5. Borrower Certifications: Borrower Occupancy Requirement. The Borrower
certifies that the financial and other information previously provided in order to qualify to
purchase the Property is true and correct as of the date first written above. The Borrower shall
occupy the Property as the Borrower's principal place of residence for the Term of this Note. The
Borrower shall be considered as occupying the Property as the Borrower's principal place of
residence if the Borrower is living in the unit for at least ten (10) months out of each calendar
year, maintains a valid homeowner's property tax exemption, and provides reasonable requested
documentation to verify occupancy.
The Community Development Director may, in its sole discretion, grant a temporary waiver of
this occupancy requirement if all of the following conditions are met: (1) the City has determined
that the Borrower will incur substantial hardship if he or she is not permitted to temporarily
vacate the Property; (2) the Borrower provides a written request to the City for a temporary
waiver of the occupancy requirement before vacating the Property; and (3) the term of the
occupancy waiver is not greater than one (1) year. A temporary vacancy shall only be
considered approved if the City approves the request in writing.
6. Grant of Option.
(a) In consideration of the economic benefits received by the Borrower
resulting from purchase and ownership of the Property at the Affordable Sales Price, Borrower
hereby grants and gives to the City a right to purchase all of Owner's right, title, and interest in
and to the Property ("Option") for the "Option Price," which shall be equal to the Affordable
Sales Price at the time the Option is exercised.
(b) The term of the Option extends for the Term of this Note. The City's rights
to exercise the Option shall survive any Transfer of the Property by the Borrower in violation of
this Note. As long as the Option has not been expressly abandoned in writing by the City, any
actual or attempted Transfer of the Property in violation of the terms and conditions of this Note
shall be a Default and shall be voidable at the election of the City.
(c) The City shall have the right to exercise the Option by providing the
Borrower with written notice of its election to exercise the Option (the "Option Notice") within
thirty (30) days of the occurrence of either of the following:
i) The City's receipt of a Transfer Notice (defined below); or
The City's Declaration of Default as provided in this Note.
(d) If the City sends an Option Notice, the City shall open an escrow account
for its purchase of the Property. Close of escrow shall take place on such date which is the later
to occur of the following: (a) ninety (90) days after the date of the Option Notice, or (b) ten (10)
days after Owner has done all acts and executed all documents required for close of escrow.
(e) Prior to the close of escrow, the City shall ensure that funds are deposited
to pay the Option Price. All Advances previously paid by the City shall be repaid from escrow.
"Advances" include any payment by the City of costs including, but not limited to, principal,
interest, taxes, assessments, insurance premiums, homeowners' fees, and associated late fees,
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costs, interest, attorneys' fees, costs of investigation (including but not limited to costs of
investigating compliance with the owner occupancy requirements of this Note), pest inspections,
resale inspections, and other expenses related to the Property, which Borrower has failed to pay
or has permitted to become delinquent or which are required to remove liens and encumbrances
as provided in Section 6(f) below or which are otherwise due to the City. Closing costs and title
insurance shall be paid by City and Borrower pursuant to the custom and practice in the County
of San Luis Obispo at the time of the opening of escrow, or as may be provided otherwise by
mutual agreement.
(f) The Borrower shall convey title to the Property at the close of escrow free
and clear of any mortgage, lien, or other encumbrance, unless approved in advance in writing by
the City. If the amounts deposited into escrow by the City are not sufficient to satisfy all liens
and encumbrances recorded against the Property, then the Borrower shall deposit into escrow the
additional sums that are required to remove the liens and encumbrances.
(g) Borrower agrees to do all acts and execute all documents necessary to
enable the close of escrow and transfer of the Property to the City.
(h) Notwithstanding the above, if Borrower has acquired the Property by a
mortgage insured by the Secretary of the United States Department of Housing and Urban
Development ("HUD") or guaranteed by the Secretary of the Department of Veteran's Affairs
("VA"), and a notice of default under such mortgage has been recorded pursuant to California
Civil Code Section 2924 (or successor provisions), this Option shall automatically terminate if
title to the Property is transferred to HUD or the VA by foreclosure, or deed -in -lieu of
foreclosure with prior written notice to the City, under such mortgage, or if the insured mortgage
is assigned to the Secretary of HUD or VA.
7. Resale Restriction.
(a) Pursuant to Legal Requirements, Borrower shall be prohibited from selling
the Property other than to Eligible Households at a sales price determined by the Borrower, but
that shall not exceed the Affordable Sales Price. In the event that the Borrower intends to
Transfer the Property to an Eligible Household, the Borrower shall promptly give the City
written notice of such intent (the "Transfer Notice") prior to notifying real estate brokers or
lenders of Borrower's intent to Transfer the Property and prior to listing of the Property on the
Multiple Listing Service. The Transfer Notice shall be sent to the City in accordance with the
notice provisions of this Note.
(b) Any Transfer without satisfaction of the provisions of this Agreement is
prohibited. In the event Borrower Transfers the Property to any person or entity other than an
Eligible Household, the City may issue a Declaration of Default, as such term is defined below.
The Community Development Director may, in its sole discretion, approve a Transfer (other than
a sale to any person or entity that is not an Eligible Household) on a case-by-case basis upon
receipt of a written request from the Borrower.
8. No Payments Due Prior to Default. In consideration of Borrower's compliance
with the terms and conditions of this Note, no payments of the outstanding principal of the Loan
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and all interest thereon shall be due and payable provided that Borrower remains in compliance
with the terms and conditions of this Note throughout the Term. Following a Default, as such
term is defined below, then the principal of and accrued interest on the Loan shall be
immediately due and payable to the City as set forth in the Deed of Trust in favor of City.
Failure to declare such amounts due shall not constitute a waiver on the part of the City to
declare them due in the event of a Default.
9. No Assumption of City Note by Subsequent Buyers. Borrower acknowledges that
this Note is given in connection with the purchase of the Property as part of an effort by the City
to assist in the purchase of the Property by [enter income level] income households.
Consequently, this Note is personal to Borrower and is not assumable by subsequent purchasers
nor by the successors and assigns of the Borrower.
10. Prepa ents. The Deed of Trust shall remain on the Property to secure
performance of this Note, including the occupancy restrictions, the Option, and the resale
restrictions, and so the Note shall not be released prior to the conclusion of the Term even if the
Borrower prepays the Loan in whole or in part.
11. PaMent. The amount due under this Note shall be paid without the necessity for
notice or demand by City.
12. Payment Amount. The amount due under this Note shall be paid from the net
proceeds. Net proceeds are the sales price minus any loans or liens that are senior to this Note
and minus closing costs.
13. Default. The Borrower shall be in Default under this Note if he or she fails to
make any payment, satisfy any covenant, or perform any obligation under or in connection with
(a) this Note, (b) the Deed of Trust, or (c) any other note, trust deed or other obligation of
Borrower relating to the Property, or secured by all or any part of the Property, whether junior or
senior to this Note, and if such failure is not cured within such time as may be permitted by the
obligation or the oblige ("Default").
14. Remedies. Upon a Declaration of Default by the City under this Note, the City
may exercise any remedies at law or in equity, including without limitation any or all of the
following, none of which shall be an exclusive remedy:
(c) Declare all sums due under the Note immediately due and payable without
further demand;
(d) Declare a Default under the Note and Deed of Trust and pursue all City
remedies under the Deed of Trust;
(e) Invoke the power of sale under the Deed of Trust;
(f) Apply to a court of competent jurisdiction for such relief at law or in
equity as may be appropriate;
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(g) Take such enforcement action as is authorized under the San Luis Obispo
Municipal Code; and
(h) Exercise the Option as provided in Section 3 of this Note.
15. Notice and Cure; Declaration of Default. The City may give written notice to the
Borrower specifying the nature of any violation. If the violation is not corrected to the
satisfaction of City within a reasonable period of time, not longer than thirty (30) days after the
date the notice is mailed, or within such further time as the City may provide at its sole
discretion, the City may declare a Default under this Note by written notice to Borrower
("Declaration of Default"). However, if the Borrower is in default under any financing secured
by the Property, the City may send a Declaration of Default upon receipt of any notice given to
the City as provided in Civil Code Section 2924b or through any other means and may exercise
its remedies upon Default as provided in Section 14 of this Note.
16. Acceleration. Upon a Declaration of Default, the full amount of the Loan or any
other amounts due under this City Note, if any, shall be 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 issue a Declaration of Default and exercise all of its rights under this
Note, 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
payments owed.
17. Request for Notice of Default. As a condition for subordination of the City Deed
of Trust or approval of a subordinate loan, a request for notice of default and notice of sale
regarding the senior or subordinate loan shall be recorded in the Office of the Recorder of the
County of San Luis Obispo for the benefit of the City.
18. Nonliability for Negligence, Loss or Damage. Borrower acknowledges,
understands and agrees that the relationship between Borrower and City is solely that of
borrower and lender, and that the City and its designated agents neither undertake nor 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 Property or any other matter.
The City and its designated agents owe 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, nor Borrower's heirs, successors or assigns shall ever
claim, have, or assert any right or action against City or its agents for any loss, damage, or other
matter arising out of or resulting from any condition of the Property and will hold City and its
agents harmless from any liability, loss, or damage for these things.
19. Indemnity. Borrower agrees to defend, indemnify, and hold the City and its
designated agents harmless from all losses, damages, liabilities, claims, actions, judgments,
costs, and reasonable attorneys' fees that the City and its designated agents may incur as a direct
or indirect consequence of:
(a) Borrower's failure to perform any obligations as and when required by this
Note and the Deed of Trust; or
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(b) the failure at any time of any of Borrower's representations or warranties
to be true and correct.
20. Attorneys' Fees and Costs. If either Party takes or commences any actions or
proceedings, including litigation or arbitration, against the other by reason of any breach or
claimed breach of any provision of, or in any way connected with, this Note, or seeks a judicial
declaration of rights under this Note, the Party prevailing in such action or proceeding shall be
entitled to recover from the other Party the prevailing Party's reasonable attorney's fees and costs,
including, but not limited to, all expert witness fees, other witness fees and associated expenses,
whether or not suit is filed or the proceeding or action proceeds to judgment.
21. 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.
22. No Offset. Borrower hereby waives any rights of offset it now has or may
hereafter have against City, its successors and assigns, and agrees to make the payments called
for herein in accordance with the terms of this Note.
23. Waiver. 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, notice of dishonor and notice of 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 attorneys' fees.
24. Notices. All notices required pursuant to this Note shall be in writing and may be
given by personal delivery or by registered or certified mail, return receipt requested, to the party
to receive such notice at the addressed set forth below:
TO THE CITY:
City of San Luis Obispo
Community Development Department
919 Palm Street
San Luis Obispo, CA 93401-3249
Attn: Community Development Director
WITH COPY TO:
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Attn: City Attorney
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TO THE BORROWER:
Attn:
Any notice shall be deemed delivered on the first business day that delivery is attempted or upon
receipt, whichever is sooner. As used herein, "business day" means any day other than a
Saturday, Sunday, or any state or federal holiday on which financial institutions in San Luis
Obispo County are authorized or required to close for observance thereof. The parties may
subsequently change addresses by providing written notice of the change in address to the other
parties in accordance with this Section.
25. Controlling Law. This Note shall be construed in accordance with and governed
by the laws of the State of California. Borrower agrees that the site of any hearing or action of
whatever nature or kind regarding this Note shall be conducted in the County of San Luis
Obispo, State of California.
26. Assignment by City. The City may assign its right to receive the proceeds under
this Note to any other governmental body or nonprofit organization which is eligible to receive
such transfer under state and federal law, and upon notice to the Borrower by the City, all
payments shall be made to the assignee.
27. Severability. If any provision of this Note shall be declared by a court of
competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall
not affect any other application of such provision or the balance of the provisions hereof, which
shall, to the fullest extent possible, remain in full force and effect.
28. Entire Agreement. This Note (along with the Deed of Trust) sets forth the entire
understanding and agreement between 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.
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1808\03\1835472.4
IN WITNESS WHEREOF, the Parties hereto have caused this Note to be executed as of
the day and year first above written.
OWNER:
,a
By:
Its:
CITY:
City of San Luis Obispo, a California charter city and municipal corporation
By:
Michael Codron, Community Development Director
APPROVED AS TO FORM AND LEGAL EFFECT:
By:
Christine Dietrick, City Attorney
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A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On , before me, , Notary
Public, personally appeared , who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Name:
Notary Public
1808\03\1835472.4
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On , before me, , Notary
Public, personally appeared , who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/tier/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Name:
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
1808\03\1835472.4
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of San Luis Obispo
Community Development Department
919 Palm Street
San Luis Obispo, CA 93401-3249
Attn: Community Development Director
No fee for recording pursuant to (Space above for Recorder's Use)
Government Code Section 27383
The undersigned declare that there is no documentary
transfer tax on this matter.
PURCHASE MONEY DEED OF TRUST, DEED OF TRUST COVENANTS,
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING
THIS PURCHASE MONEY DEED OF TRUST, DEED OF TRUST COVENANTS,
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Deed
of Trust") is made as of this [enter date] day [enter month and year], by [enter homeowner
name] ("Trustor"), the buyer of the real property described herein below, whose address is:
[Enterproperty address], San Luis Obispo, California
To [enter Trustee] ("Trustee") in favor of the CITY OF SAN LUIS OBISPO, a California
charter city and municipal corporation, whose address is 990 Palm Street, San Luis Obispo,
California 93401 ('Beneficiary" or "City").
WHEREAS, this Deed of Trust secures the obligations of the Trustor contained in that
certain Occupancy, Resale, and Refinancing Restriction Agreement, with Option to Purchase and
Promissory Note Secured by Deed of Trust in favor of the City executed by Trustor on [enter
date] and recorded in the Official Records of the County of San Luis Obispo at substantially the
same time as this Deed of Trust (the "City Note"), covering certain real property owned by
Trustor in the County of San Luis Obispo, State of California, commonly known as [enter
property address] (the "Real Property") and more particularly described in Exhibit A to this
Deed of Trust.
WHEREAS, Trustor is able to purchase the Real Property at an affordable, below market
price pursuant to the terms and conditions of the City Note.
WHEREAS, Beneficiary and Trustor desire to ensure that the Real Property remain
affordable to [enter income level] -income households for a period of not less than forty-five (45)
years.
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NOW, THEREFORE, THIS DEED OF TRUST WITNESSETH:
Trustor, in consideration of the indebtedness referred to below and the trust herein
created, irrevocably grants, conveys, transfers and assigns to Trustee, and its successors and
assigns, in trust, power of sale and right of entry and possession, all of Trustor's estate, right, title
and interest in, to and under the Real Property;
TOGETHER WITH all structures and improvements now existing or hereafter erected on
the Real Property, all easements, rights and appurtenances thereto or used in connection
therewith, all rents, royalties, issues, profits, revenues, income and other benefits thereof or
arising from the use or enjoyment of all or any portion thereof (subject, however, to the right,
power and authority given herein to Trustor to collect and apply such rents, royalties, issues,
profits, revenues, income and other benefits prior to an Event of Default hereunder), all interests
in and rights, royalties and profits in connection with all minerals, oil and gas and other
hydrocarbon substances thereon or therein, development rights or credits, air rights, water, water
rights (whether riparian, appropriative or otherwise and whether or not appurtenant) and water
stock, all intangible property and rights relating to the Real Property or the operation thereof or
used in connection therewith, including, without limitation, trade names and trademarks and all
furniture and fixtures, now or hereafter located in, or on, or attached or affixed to, or used or
intended to be used in connection with, the Real Property, including, but without limitation, all
heating, lighting, laundry, incinerating, gas, electric and power equipment, pipes, plumbing, fire
prevention and fire extinguishing, refrigerating, ventilating and communication apparatus, air
cooling and air conditioning apparatus, shades, awnings, blinds, curtains, drapes, attached floor
coverings, including rugs and carpeting and other installed appliances, attached cabinets, trees,
plants and other items of landscaping, shall, to the fullest extent permitted by law and for the
purposes of this Deed of Trust, be deemed to be part and parcel of, and appropriated to the use of,
the Real Property and, whether or not affixed or annexed thereto, be deemed conclusively to be
real property and conveyed by this Deed of Trust, and Trustor agrees to execute and deliver, from
time to time, such further instruments and documents as may be required by Beneficiary to
confirm the lien of this Deed of Trust on any of the foregoing;
TOGETHER WITH all of the estate, interest, right, title, other claim or demand which
Trustor now has or may hereafter acquire in any and all awards made for the taking by eminent
domain, or by any proceeding or purchase in lieu thereof, of the whole or any part of the Security
(as hereinafter defined), including, without limitation, any awards resulting from a change of
grade of streets and awards for severance damages;
TOGETHER WITH all of the estate, interest, right, title and other claim or demand which
Trustor now has or may hereafter acquire with respect to the unearned premiums accrued,
accruing or to accrue and the proceeds of insurance in effect with respect to all or any part of the
foregoing. All of the foregoing property referred to in this Deed of Trust, together with the Real
Property, is herein referred to as the "Security."
ARTICLE 1. PURPOSE AND CONSIDERATION.
This trust deed is established for the purpose of securing, in such order of priority as Beneficiary
may elect:
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(a) The repayment of the indebtedness evidenced by the City Note, in the principal
sum of [enter loan amount] Dollars ("Principal"), and any and all late charges,
interest casts or fees required thereunder and all extensions, renewals,
modifications, amendments and replacements thereof. The amount of the City
Note is the monetary difference between the Security's Affordable Sales Price and
the Security's Appraised Market Value at the time of the sale, as those terms are
defined in the City Note.
(b) The payment of all other sums which may be advanced by or otherwise be due to
Trustee or Beneficiary under any provision of this Deed of Trust with interest (if
any) thereon at the rate provided herein or therein.
(c) Performance of all covenants of Trustor made in this Deed of Trust.
(d) Compliance with all covenants and restrictions as set forth in the City Note and
this Deed of Trust.
ARTICLE 2. TRUSTOR RESTRICTIONS.
To protect the security of this Deed of Trust, Trustor and Trustee hereby covenant and agree as
follows:
2.01 Restrictions on Use and Occu ancy. The Security shall be used solely for owner -
occupied housing and occupied solely by [insert income level] income households, as defined in
the City Note, the terms and restrictions of which are incorporated by this reference as if fully set
forth herein.
2.02 Restrictions on Sale. The Security shall be sold or otherwise transferred only to Eligible
Households, as defined in the City Note. Sales prices shall be based on and consistent with the
City Note.
2.03 Term of Use, Occupancy and Sale Restrictions. Trustor agrees that the above restrictions
to the use, occupancy and sale of the Security shall remain in effect for a period of not less than
forty-five (45) years. All future transfers of interest in the Security, except for the sale to and
occupation by eligible [enter income level] income households, shall be prohibited for the Term.
Any sale, lease, rental, hypothecation, or other transfer of the Security in violation of this Deed
of Trust or the City Note shall be void, as provided below.
2.04 Cites tion. Pursuant to the City Note, upon resale of the Security or default under the
terms of this Deed of Trust or the City Note, Trustor and Trustee agree that the City shall have an
option to purchase the Security at the then current appraised value, as further described in the
City Note.
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2.05 Performance of Obligations Secured. Trustor shall promptly pay when due the
indebtedness evidenced by the City Note and any late charges, costs and/or fees provided for in
the City Note and shall further perform fully and in a timely manner all other obligations of
Trustor contained herein or in the City Note.
ARTICLE 3. INSURANCE REQUIREMENTS
3.01 Trustor shall keep the Security and all improvements thereon insured against loss or
damage by fire with extended all-risk coverage clauses, including vandalism and malicious
mischief clauses, in an amount not less than one hundred percent (100%) of the full replacement
cost of such improvements with a company or companies and in such form and with such
endorsements as may be approved or required by Beneficiary.
3.02 Trustor shall also maintain in full force and effect a policy of homeowners' general
liability insurance insuring Trustor against liability for bodily injury, property damage and
personal injury arising out of the operation, use or occupancy of the Security. The amount of
such insurance shall be subject to the Trustor's reasonable approval and subject to periodic
increases based upon increased liability awards or the reasonable recommendation of Trustor's
professional insurance advisor. Trustor shall name Beneficiary as an additional insured under
such policy. Such insurance shall be primary with respect to any insurance maintained by
Beneficiary and shall not call on Beneficiary's insurance for contributions.
3.03 Trustor shall pay all premiums for the insurance policies required to be maintained under
this Deed of Trust within fifteen (15) days after Trustor's receipt of a copy of the premium
statement or other evidence of the amount due. At least thirty (30) days prior to the expiration of
such policy, Trustor shall deliver to Beneficiary a renewal of such policy.
3.04 Any insurance which Trustor is required to maintain under this Deed of Trust shall
include a provision requiring that the insurance carrier give Beneficiary not less than thirty (30)
days written notice prior to any cancellation or modification of such coverage. If Trustor (i) fails
to deliver any policy or renewal to Beneficiary required under this Deed of Trust within the
prescribed time period or (ii) if any such policy is canceled or modified to reduce the amount or
type of coverage without Beneficiary's consent and no substituted comparable coverage is
obtained by Trustor prior to such cancellation or modification, Beneficiary may obtain such
insurance. In such case, Trustor shall reimburse Beneficiary for the cost of such insurance within
fifteen (15) days after receipt of a statement that indicates the cost of such insurance and upon
proof that Beneficiary has paid said statement.
3.05 Trustor shall maintain all insurance required under this Deed of Trust with companies
holding a general policy rating of A-8 or better, as set forth in the most current issue of Best Key
Rating Guide. Trustor acknowledges that the insurance described in this Section is for the
primary benefit of Beneficiary. Beneficiary makes no representation as to the adequacy of such
insurance to protect Trustor's or Beneficiary's interests. Therefore, Trustor shall obtain any
additional property or liability insurance that Trustor deems necessary to protect Beneficiary and
Trustor, in the exercise of reasonable judgment.
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3.06 Notwithstanding anything to the contrary contained herein, Trustor's obligation to carry
the insurance provided for herein may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Trustor; provided, however, that
Beneficiary shall be named as an additional insured thereunder and that the coverage afforded
Beneficiary will not be reduced or diminished by reason of the use of such blanket policy of
insurance and provided further that the requirements set forth herein are otherwise satisfied.
3.07 All of the above-mentioned insurance policies or certificates of insurance must be
satisfactory to Beneficiary. Beneficiary shall not by the fact of approving, disapproving,
accepting, preventing, obtaining or failing to obtain any insurance, incur any liability for or with
respect to the amount of insurance carried, the form or legal sufficiency of insurance contracts,
insolvency of insurance companies or payment or defense of lawsuits, and Trustor hereby
expressly assumes full responsibility therefor and all liability, if any, with respect thereto.
3.08 Condemnation and Insurance Proceeds.
a. Any award of damages in connection with any taking or condemnation, or for
injury to the Security by reason of public use, or for damages for private trespass or entry onto
the Security is hereby assigned and shall be paid to Beneficiary as further security for all
obligations secured by this Deed of Trust. Upon receipt of such proceeds, Beneficiary may hold
the proceeds as further security or apply or release them in the same manner and with the same
effect as provided in this Deed of Trust for the disposition of proceeds of fire or other insurance.
b. Any insurance proceeds or awards in connection with any casualty or damage or
injury to the Security covered by insurance ("Insurance Proceeds") are hereby assigned to
Beneficiary to be held and applied by Beneficiary in the manner hereinafter provided.
Beneficiary may, at its option, and at its own expense, appear in and prosecute in its own name
any action or proceeding to enforce any cause of action for such Insurance Proceeds. All
Insurance Proceeds shall be applied by Beneficiary upon any indebtedness secured by this Deed
of Trust and in any order determined by Beneficiary or, at the option of Beneficiary, the entire
amount so collected or any part of that amount may be released to Trustor. This application or
release shall not cure or waive any default or notice of default under this Deed of Trust or
invalidate any act done pursuant to such notice.
C. Trustor, immediately upon obtaining knowledge of the institution of any
proceedings relating to condemnation or other taking of or damage or injury to the Security or
any portion thereof, or knowledge of any casualty damage to the Security or damage in any other
manner, shall immediately notify Beneficiary in writing. Beneficiary may participate, at its own
expense, in any such proceedings and may join Trustor in adjusting any loss covered by
insurance.
ARTICLE 4. TAXES, LIENS AND OTHER ITEMS.
Trustor shall pay, when due, all taxes, bonds, assessments, fees, liens (including prior trust deed
liens), charges, fines, impositions and any and all other items which are attributable to or affect
the Security and which may attain a priority over this Deed of Trust or the indebtedness or
evidence of indebtedness secured hereby, by making payment prior to delinquency directly to the
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payee thereof. Trustor may initiate proceedings to contest any such taxes, bonds, assessments,
fees, liens, charges, fines, impositions or other items so long as Trustor takes steps to ensure that
Beneficiary's security is not threatened in any manner. Trustor shall pay all costs of the
proceedings, including any costs or fees incurred by Beneficiary. Upon the final determination of
any proceeding or contest, Trustor shall immediately pay the amounts due, together with all
costs, charges, interest and penalties incidental to the proceedings.
ARTICLE 5. RENTS AND PROFITS.
Trustor acknowledges and agrees that the Security shall at all times be occupied by the Trustor as
the Trustor's primary residence and shall not be leased or rented during the term of the City Note
and this Deed of Trust, except as otherwise provided in the City Note.
Notwithstanding the foregoing, any rents, royalties, issues, profits, revenue, income and other
benefits of the Security arising from the use and enjoyment of all or any portion thereof or from
any lease or agreement pertaining thereto (the "Rents and Profits"), whether now due, past due,
or to become due, and including all prepaid rents and security deposits, are hereby absolutely,
presently and unconditionally assigned, transferred, conveyed and set over to Beneficiary to be
applied by Beneficiary in the payment of the principal and all other sums payable on the City
Note and of all other sums payable under this Deed of Trust. It is understood and agreed that
neither the foregoing assignment of Rents and Profits to Beneficiary nor the exercise by
Beneficiary of any of its rights or remedies under Article 5 hereof shall be deemed to defeat the
owner -occupied restriction set forth in the City Note or to make Beneficiary a mortgagee -in -
possession or otherwise responsible or liable in any manner with respect to the Security or the
use, occupancy, enjoyment or operation of all or any portion thereof, unless and until
Beneficiary, in person or by agent, assumes actual possession thereof. Further, the appointment
of a receiver for the Security by any court at the request of Beneficiary or by agreement with
Trustor, or the entering into possession of the Security or any part thereof by such receiver, shall
not be deemed to make Beneficiary a mortgagee -in -possession or otherwise responsible or liable
in any manner with respect to the Security or the use, occupancy, enjoyment or operation of all
or any portion thereof.
ARTICLE 6. PRESERVATION AND MAINTENANCE OF
SECURITY.
Trustor shall keep the Security and every part thereof in good condition and repair and shall not
permit or commit any waste, impairment or deterioration of the Security nor commit, suffer or
permit any act upon or use of the Security in violation of law or applicable order of any
governmental authority, whether now existing or hereafter enacted and whether foreseen or
unforeseen, including, without limitation, violation of any zoning, building or environmental
protection statutes, ordinances, regulations, orders and restrictions or in violation of any
covenants, conditions or restrictions affecting the Security or bring or keep any article upon any
of the Security or cause or permit any condition to exist thereon which would be prohibited by or
could invalidate any insurance coverage maintained or required hereunder to be maintained by
Trustor on or with respect to any part of the Security and further shall do all other acts which
from the character or use of the Security may be reasonably necessary to protect the security
hereof, the specific enumerations herein not excluding the general. Trustor shall completely
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restore and repair promptly and in a good and workmanlike manner any building, structure or
improvement thereon which may be damaged or destroyed and pay, when due, all claims for
labor performed and materials furnished therefor, whether or not insurance or other proceeds are
available to cover, in whole or in part, the costs of any such restoration or repair. Trustor shall
notify Beneficiary immediately in writing of any damage to the Security in excess of Ten
Thousand Dollars ($10,000.00).
ARTICLE 7. PROTECTION OF SECURITY. COSTS AND
EXPENSES.
Trustor shall appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of Beneficiary or Trustee and shall pay all reasonable costs and
expenses, including, without limitation, costs of evidence of title and reasonable attorney's fees,
in any such action or proceeding in which Beneficiary or Trustee may appear and in any suit
brought by Beneficiary to foreclose this Deed of Trust or to enforce or establish any other rights
or remedies of Beneficiary hereunder. If Trustor fails to perform any of the covenants or
agreements in this Deed of Trust or if any action or proceeding is commenced which affects
Beneficiary's interest in the Security or any part thereof, including, but not limited to, eminent
domain, code enforcement or proceedings of any nature whatsoever under any federal or state
law, whether now existing or hereafter enacted or amended, relating to bankruptcy, insolvency,
arrangement, reorganization or other form of debtor relief, or to a decedent, then Beneficiary or
Trustee may, but without obligation to do so and upon ten (10) days' prior written notice to and
demand upon Trustor (unless a shorter notice period is necessary to protect Beneficiary's interest
in the security hereof, in which case only reasonable notice and demand under the circumstances
shall be required) and without releasing Trustor from any obligation hereunder, make such
appearances, disburse such sums and take such action as Beneficiary or Trustee deems necessary
or appropriate to protect Beneficiary's interest, including, but not limited to, disbursement of
reasonable attorney's fees, entry upon the Security to make repairs or otherwise protect the
security hereof, and payment, purchase, contest or compromise of any encumbrance, charge or
lien which in the judgment of either Beneficiary or Trustee appear to be prior or superior hereto.
Trustor further agrees to pay all reasonable expenses of Beneficiary (including fees and
disbursements of counsel) reasonably related to the protection of the rights of Beneficiary
hereunder, and enforcement or collection of payment of the Note, whether by judicial or non -
judicial proceedings, or in connection with any bankruptcy, insolvency, arrangement,
reorganization or other debtor relief proceeding of Trustor, or otherwise. Beneficiary shall give
Trustor ten (10) days' prior written notice before disbursing any amounts pursuant to this Article.
Any amounts disbursed by Beneficiary or Trustee pursuant to this Section shall be additional
indebtedness of Trustor secured by this Deed of Trust as of the date of disbursement. All such
amounts shall be payable by Trustor immediately without demand. Nothing contained herein
shall be construed to require Beneficiary or Trustee to incur any expense, make any appearance
or take any other action.
ARTICLE 8. ACCELERATION; REMEDIES
Upon Trustor's breach of any covenant or agreement of Trustor in the City Note or this Deed of
Trust, including, but not limited to, the covenants to pay, when due, any sums secured by this
Deed of Trust, the Beneficiary, prior to acceleration, will mail by express delivery, return receipt
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requested notice to Trustor specifying: (1) the breach; (2) the action required to cure such breach;
(3) a date, not less than thirty (30) days from the date the notice is received by Trustor as shown
on the return receipt, by which such breach is to be cured; and (4) 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. The notice will also inform Trustor of Trustor'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 Trustor to acceleration and sale. If the breach is not cured on or
before the date specified in the notice, the Beneficiary, at the Beneficiary'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 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 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 hereunder or invalidate
any act done in response to such breach and, notwithstanding the continuance in possession of
the Security, the Beneficiary 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 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 Trustor 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 Beneficiary shall be entitled to collect all reasonable costs and expenses incurred in pursuing
the remedies provided in this paragraph, including, but not limited to, reasonable attorneys' fees.
ARTICLE 9. TRUSTOR'S RIGHT TO REINSTATE.
Notwithstanding the Beneficiary's acceleration of the sums secured by this Deed of Trust,
Trustor will have the right to have any proceedings begun by the Beneficiary to enforce this
Deed of Trust discontinued at any time prior to five (5) days before sale of the Security pursuant
to 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) Trustor pays Beneficiary all sums which would be then due
under this Deed of Trust and Trustor cures all breaches of any other covenants or agreements of
Trustor contained in the City Note or this Deed of Trust; (b) Trustor pays all reasonable expenses
incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor
contained in the City Note or this Deed of Trust, and in enforcing the Beneficiary's and Trustee's
remedies, including, but not limited to, reasonable attorneys' fees; and (c) Trustor takes such
action as Beneficiary may reasonably require to assure that the lien of this Deed of Trust,
Beneficiary's interest in the Security and Trustor's obligation to perform the obligations and pay
the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure
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by Trustor, this Deed of Trust and the obligations secured hereby will remain in full force and
effect as if no acceleration had occurred.
ARTICLE 10. SUPERIORITY OF FIRST LENDER
DOCUMENTS.
Notwithstanding any provision herein, this Deed of Trust shall not diminish or affect the rights of
a senior lender, which for purposes of these documents shall be deemed also to include the
California Housing Finance Agency, its successors and assigns, hereinafter collectively referred
to as the "First Lender") under the its Deed of Trust or any subsequent First Lender deeds of
trust hereafter recorded against the Security in compliance with the requirements of the City
Note.
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 such lender's assignee or successor in interest, to exercise its remedies under the
First Lender Deed of Trust in the event of default under the First Lender Deed of Trust by the
Trustor. Such remedies under the First Lender Deed of Trust include (1) the right of foreclosure;
(2) acceptance of a deed or assignment in lieu of foreclosure or (3) the right to sell the Security
to any person at a fair market value price subsequent to exercising its rights under the deed of
trust; provided, however, that in no case may a First Lender, exercising foreclosure assignment
in -lieu of foreclosure or sale, obtain value or rights to value greater than the value of the
outstanding indebtedness on the first mortgage at the time of the debt clearing action. After such
foreclosure or acceptance of a deed in lieu of foreclosure, this Deed of Trust shall be forever
terminated and shall have no further effect as to the Security or any transferee thereafter;
provided, however, if the holder of such First Lender Deed of Trust acquired title to the Security
pursuant to a deed or assignment in lieu of foreclosure and no notice of default was recorded
against the Security by such holder in connection therewith, this Deed of Trust shall
automatically terminate upon such acquisition of title, only if: (i) the City has been given written
notice of default under such First Lender Deed of Trust with a sixty (60) -day cure period (which
requirement shall be satisfied by recordation of a notice of default under California Civil Code
Section 2924); and (ii) the City shall not have cured or commenced to cure the default within
such sixty (60) -day period or commenced to cure and given its firm commitment to complete the
cure in form and substance acceptable to the First Lender.
ARTICLE 11. MISCELLANEOUS
11.01 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
Beneficiary and Trustor subject to the provisions of this Deed of Trust.
11.02 No Assumption of Deed of Trust by Subsequent Buyers. Trustor acknowledges that this
Deed of Trust is given in connection with the purchase of the Security as part of an effort by the
City to assist in the purchase of the Security by [insert income level] income households.
Consequently, this Deed of Trust is not assumable by subsequent purchasers nor by the
successors and assigns of the Trustor.
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11.03 Notices. Except for any notice required under applicable law to be given in another
manner, all notices required pursuant to this Deed of Trust shall be in writing and may be given
by personal delivery or by registered or certified mail, return receipt requested, to the parry to
receive such notice at the addressed set forth below:
TO THE CITY:
City of San Luis Obispo
Community Development Department
919 Palm Street
San Luis Obispo, CA 93401-3249
Attn: Community Development Director
TO THE TRUSTOR:
Attn:
TO THE TRUSTEE:
Attn:
Any notice shall be deemed delivered on the first business day that delivery is attempted or upon
receipt, whichever is sooner. As used herein, "business day" means any day other than a
Saturday, Sunday, or any state or federal holiday on which financial institutions in San Luis
Obispo County are authorized or required to close for observance thereof. The parties may
subsequently change addresses by providing written notice of the change in address to the other
parties in accordance with this Section.
11.04 Nondiscrimination. The Trustor covenants by and for itself and its successors and
assigns that there shall be no discrimination against or segregation of a person or of a group of
persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital
status, ancestry or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the
Security, nor shall the Trustor or any person claiming under or through the Trustor establish or
permit any such practice or practices of discrimination or segregation with reference to the use,
occupancy, or transfer of the Security. The foregoing covenant shall run with the land.
11.05 Nonliability for Negligence, Loss, or Damage. Trustor acknowledges, understands and
agrees that the relationship between Trustor and Beneficiary is solely that of two separate parties
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in an arm's length transaction, and that Beneficiary neither undertakes nor assumes any
responsibility for or duty to Trustor to select, review, inspect, supervise, pass judgment on, or
inform Trustor of the quality, adequacy or suitability of the Security or any other matter.
Beneficiary owes no duty of care to protect Trustor against negligent, faulty, inadequate or
defective building or construction or any condition of the Security and Trustor agrees that neither
Trustor, or Trustor's heirs, successors or assigns shall ever claim, have or assert any right or
action against Beneficiary for any loss, damage or other matter arising out of or resulting from
any condition of the Security and will hold Beneficiary harmless from any liability, loss or
damage for these things.
11.06 Reconveyance. Upon payment of all sums secured by this Deed of Trust, and following
the expiration of the Term of the City Note, Beneficiary will request Trustee to reconvey the
Security and will surrender this Deed of Trust and the City Note to Trustee. 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.
11.07 Substitute Trustee. The Beneficiary, at the Beneficiary's option, may from time to time
remove 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.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first above written.
TRUSTOR:
a
Its:
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A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On , before me, , Notary
Public, personally appeared , who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Name:
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
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