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HomeMy WebLinkAboutAGMT - Seal Beach Trailer Park (LINC Conditional Rental Subsidy Agmt) • S Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 ATTACHMENT 1 CONDITIONAL RENTAL SUBSIDY AGREEMENT Conditional Rental Subsidy Agreenwnt.RDA Staff Report 4 Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects • Redevelopment Agency Staff Report January 26, 2004 CONDITIONAL RENTAL SUBSIDY AGREEMENT THIS CONDITIONAL RENTAL SUBSIDY AGREEMENT (the "Agreement") is dated as of January , 2004, and is entered into by and between LINC COMMUNITY DEVELOPMENT CORPORATION, a California nonprofit public benefit corporation ("LINC") and the REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH, a public body corporate and politic ("RDA"). A. Using low and moderate income housing set aside funds, the RDA has made a loan to Ruth Ellen Sheriff and a loan to James Paul Strangeland and Marianne Vella for the purpose of substantially rehabilitating mobilehomes owned by them in the Seal Beach Mobile Home Park (the "Park"); said mobilehomes are located at 139 Cottonwood Lane and 54 Riversea Road in Seal Beach, California 90740 (the "Mobilehomes")'. Such loans are hereinafter collectively referred to as the "Loans", and Ruth Ellen Sheriff, James Paul Strangeland and Marianne Vella are hereinafter collectively referred to as the "Borrowers". B. Applicable law requires that, as a condition to the Loans, a Unit Regulatory Agreement (i.e., restrictive covenant) for each of the Mobilehomes be recorded in the Official Records of Orange County, California that will limit the costs of owning the Mobilehomes to an "affordable housing cost" (as defined by laws applicable to the use of low and moderate income housing set aside funds by redevelopment agencies) and such limitation might result, at some point in the future, in the ground rent charged to the Borrowers by LINC for the land on which the Mobilehomes are located to be less than the rent that would otherwise be payable for such land by the Borrowers to LINC (the difference in such rent being referred to as the "Rental Deficiency"). The applicable Unit Regulatory Agreements are attached hereto as Exhibit"A". C. In order to record the Unit Regulatory Agreements in the Official Records of Orange County as required by law, LINC must execute and acknowledge the Unit Regulatory Agreements and deliver them to the RDA for recordation. D. LINC has agreed to execute and acknowledge the Unit Regulatory Agreements and deliver them to the RDA for recordation provided that the RDA agrees to pay to LINC from time to time any Rental Deficiency that might result from the restrictions in the Unit Regulatory Agreements. NOW, THEREFORE, in consideration of the foregoing recitals, the mutual terms and covenants set forth herein, and other consideration, the sufficiency of which is acknowledged, RDA and LINC hereby agree as follows: 1. Payment of Rental Deficiency Sums. Subject to Section 2 below, RDA shall, from time to time, but not more often than once each calendar month, pay to LINC Conditional Rental Subsidy Agreement.RDA Staff Report 5 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 the amount of any Rental Deficiency that is the direct result of the requirement in the Regulatory Agreements that the Mobilehomes be owned by the Borrower at an "affordable housing cost," as defined by applicable law. 2. Conditions to Disbursement. The RDA shall not be obligated to disburse the funds to LINC under the Agreement unless LINC satisfies the following conditions (but RDA may waive any or all of such conditions in its sole and absolute discretion): (I) LINC shall have requested disbursement of such funds in writing, specifying the amount requested, and describing in detail its calculation of the applicable Rental Deficiency; (ii) LINC is not in default under any obligations it may have to the RDA under any other agreements with the RDA, whether or not they relate to this transaction. 3. Miscellaneous. (i) Attorneys' Fees: If either party commences an action against the other party arising out of or in connection with this Agreement, the prevailing party shall be entitled to have and recover from the losing party reasonable attorneys' fees and costs of suit. (ii) Notices: Any notice, demand, request, consent, approval or communication that either party desires or is required to give to the other party shall be given in accordance with the Regulatory Agreements. (iii) Severability: In the event that any provision of this Agreement or the application thereof to any person or circumstances shall be declared null and void, invalid, or held for any reason to be unenforceable by a Court of competent jurisdiction, the remainder of such agreement shall nevertheless remain in full force and effect, and to this end, all covenants, conditions and agreements described herein are deemed separate. (iv) Amendments - Writing Required: No amendment or modification of this Agreement shall be effective unless in writing and executed by the RDA and LINC. (v) Successors and Assigns: This Agreement shall be binding upon the parties hereto and their successors, and assigns. (vi) Counterparts: This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Conditional Rental Subsidy Agreemenl.RDA Star Report 6 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 (vii) Governing Law: This Agreement shall be governed by the laws of the State of California. (viii) Time: Time is of the essence of all of the provisions of this Agreement. (signature page follows) Conditional Rental Subsidy Aereement.RDA Staff Report 7 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be duly executed as of the date first written above. LINC: RDA: LINC COMMUNITY DEVELOPMENT REDEVELOPMENT AGENCY OF THE CORPORATION, a California nonprofit CITY OF SEAL BEACH public benefit corporation By:. By: Name: Name: Title: Title: Conditional Rental Subsidy Agrccmcnt.RDA Staff Report 8 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 EXHIBIT "A" Form of Unit Regulatory Agreement for the Mobilehomes Conditional Rental Subsidy Agreement.RDA Staff Report 9 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report Janualy 26, 2004 Recording Requested by, and When Recorded, Return to: Redevelopment Agency of the City of Seal Beach 211 Eighth Street Seal Beach, California 90470 Attn: Executive Director Exempt from recording fees pursuant to Gov. Code §6103 UNIT REGULATORY AGREEMENT (Mobilehome Rehab Loan; Unit# ) THIS UNIT REGULATORY AGREEMENT (the "Agreement") is entered into this day of , 2004, by and among the REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH, a public body, corporate and politic (the "Agency"), , residents of the Park (the "Owner"), and LINC COMMUNITY DEVELOPMENT CORPORATION, a California non-profit corporation ("Park Owner"). RECITALS A. The Owner owns that certain mobilehome (the "Unit") located in the City of Seal Beach, County of Orange, State of California, described on Exhibit "A" attached hereto and incorporated herein by reference, the address of which is set forth in Section 1(b) of this Agreement, and which the Owner shall occupy as the Owner's principal residence. B. Park Owner owns the mobilehome park (the "Park") in which the Unit is located; the legal description of the Park is attached hereto as Exhibit `B". C. The Owner leases the portion of the Park that is depicted on the diagram attached hereto as Exhibit C (the "Space") from the Park Owner. D. The Agency has approved a Substantial Rehabilitation/Replacement Loan Program to provide assistance to owners of mobilehomes in the City of Seal Beach with respect to rehabilitation work on such mobilehomes. Conditional Rental Subsidy Agreement RDA Staff Report 10 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 E. The Owner has represented to the Agency that the Owner and the Owner's household qualifies as a Person or Family of Extremely Low, Very Low, Low or Moderate Income. F. Concurrently herewith, the Owner is executing a promissory note in the amount, if any, set forth in Section 1(c), representing a loan by the Agency to the Owner to assist in the Owner's rehabilitation of the Unit. NOW, THEREFORE, the parties agree as follows: 1. Fundamental Provisions. The following shall serve as the basic terms of this Agreement: (a) Name of Owner: The name of the Owner is (b) Address of the Unit: The address of the Unit is , Seal Beach, California. (c) Amount of the Loan: The principal amount of the Loan is the sum of Dollars ($ .00). The Loan is evidenced by a promissory note (the "Note") and secured by a Pledge and Security Agreement encumbering the Unit and a Statement of Lien recorded with the California Department of Housing and Community Development (collectively, the "Security Agreement"). 2. Definitions. For purposes of this Agreement, the terms listed below shall have the meanings thereinafter specified. (a) AMI. As used herein and throughout this Agreement, "AMP' means the median family income of the Orange County SMSA, as determined and published annually by the United States Department of Housing and Urban Development ("HUD"), pursuant to California Health and Safety Code Section 50093, • and the regulations promulgated thereunder. The AMI shall be adjusted for family size in accordance with state regulations adopted pursuant to California Health and Safety Code Section 50052.5 for the number of persons in the family occupying the Unit. (b) Affordable Housing•Cost. For the purposes hereof, the term "Affordable Housing Cost" means a housing cost which does not exceed 25 percent of the Gross Income of the household, and for the purposes hereof, the term "housing cost" shall have the meaning ascribed to such term in Title 25 of the California Code of Regulations Section 6920, as such regulations may be amended from time to time, and Conditional Rental Subsidy Agreement.RDA Staff Report I t • • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 the term "Gross Income" shall have the meaning ascribed to such term in Title 25 of the California Code of Regulations Section 6914, as such regulations may be amended from time to time. (c) Person or Family of Extremely Low, Very Low, Low, or Moderate Income, or an Extremely Low Income Household, a Very- Low Income Household, a Low-Income Household, or a Moderate-Income Household means a person, family or household meeting the income qualification limits set forth in California Health and Safety Code Sections 50093, 50105, 50052.5, 50053, 50105 and 50106, and Title 25 of the California Code of Regulations Section 6910, et seq., as the case or context may require, as such statutes and regulations may be amended from time to time, and any successor statutes thereto. (d) Qualified Person means a person or family of Extremely Low, Very Low, Low or Moderate Income. (e) Escrow Costs means only those fees charged by an escrow agent or title insurance company solely for the closing of escrow and does not include loan fees, refinancing fees, broker commissions, or other fees, commissions or costs not directly related to the loan for rehabilitation of the Unit. (f) Unit means the mobilehome described in the attached Exhibit"A". (g) Owner means both the party identified as "Owner" in the first paragraph of this Agreement, and any successor-in-interest of such Owner with respect to the Unit or any portion thereof or interest therein. (h) Park Owner means both the parties described as "Park Owner" in the first paragraph of this Agreement and any successor-in-interest of such Park Owner with respect to the Park or any portion thereof or interest therein. 3. Restriction on Transfer. (a) The Owner shall not sell, voluntarily or involuntarily, in whole or in part, convey, transfer, lease, sublease, assign, encumber, mortgage, or hypothecate the Unit, or enter into agreements to sell, convey, transfer, lease, sublease, assign, encumber, refinance or hypothecate the Unit, except in compliance with the terms of this Agreement and with the prior written approval of the Agency. Failure to obtain the prior written approval of the Agency will be deemed a breach of this Agreement. (b) Any violation or breach of the provisions of Section 3(a) hereof is prohibited and any such sale or other transfer of interest enumerated in Section 3(a) above, in whole or in part, shall be null, void and unenforceable, and at the Agency's Conditional Rental Subsidy AgreementRDA Staff Report 12 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 option, result in the acquisition of the Unit by the Agency and/or an acceleration of the Note requiring the Owner to immediately repay the Note in full if such transfer is made prior to the expiration of the Term. (c) In the event of the death of the Owner with no qualified surviving joint tenants, the Agency will work with the heirs, probate court, or other responsible party to either exercise its option to acquire the Unit in accordance with Section 7 hereof or identify a Qualified Person to purchase the Unit. 4. Term of Agreement. This Agreement shall become effective on the date hereof, and shall terminate 55 years thereafter (the "Term"). The Owner's repayment of the Loan shall not terminate this Agreement. 5. Covenants to Maintain Affordability. (a) The Loan is being given by the Agency to the Owner to improve the community's supply of mobilehomes available at an Affordable Housing Cost in accordance with the affordable housing requirements of the Community Redevelopment Law (California Health and Safety Code, Section 33000, et seq). Subject to the provisions of Section 3 hereof, the Owner shall sell, convey, assign, or transfer ownership or occupancy of the Unit only to Qualified Persons who cannot obtain comparable housing at an Affordable Housing Cost on the open market as provided in Health and Safety Code Section 33334.2(e)(2), as such statute may be amended from time to time, and all successor statutes. To this end, the Owner agrees that during the Term the Unit shall, except as provided in Sections 6, 8(c) and 10 hereof, remain available only at an Affordable Housing Cost and shall only be occupied by Qualified Persons. In addition, if, without the Agency's consent, the Owner fails to occupy the Unit as the Owner's sole principal residence for a period of 90 calendar days, cumulatively, in any calendar year, then the Owner shall be in breach of this Agreement. (b) Park Owner hereby agrees that the rental charged by Park Owner to Owner for the Space shall not exceed the rent that would result in an . Affordable Housing Cost for the Owner until the earlier of: (i) the expiration of the term of this Agreement; or (ii) a sale of the Unit as described in Section 8(c) hereof. In the case of a purchase by Agency under Section 7, the rental charged by Park Owner would not exceed the rent that would result in an Affordable Housing Cost as determined for the Owner prior to the Agency purchase until a sale by Agency of the Unit; if the buyer of the Unit from the Agency is a Qualified Person, then the rent charged by Park Owner shall not exceed the rent that would result in an Affordable Housing Cost for such Qualified Person, and if the buyer from the Agency is not a Qualified Person, then the rent restrictions on Park Owner herein shall terminate. 6. Permitted Transfers and Encumbrances by Owner. Conditional Rental Subsidy Agreement.RDA Staff Report 1 3 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 (a) Conveyances to Qualified Persons. Subject to the option rights of the Agency herein, the Owner may convey the Unit to Qualified Persons on the condition that (i) the Owner complies with the requirements of Sections 7 and 8 hereof, (ii) the purchaser covenants to occupy the Unit as such party's sole principal residence, and (iii) the purchase price does not exceed the maximum permitted resale price set forth in Section 10 hereof. Any permitted transferee, at Agency's option, shall acquire the Unit subject to the terms and conditions hereof or a new unit regulatory agreement. Any permitted transferee shall execute an assumption agreement and other reasonable documents in form and content satisfactory to the Agency. (b) Intra-Family Conveyances. The following transfers of title shall not be breaches of this Agreement: transfer by gift, devise, or inheritance to the Owner's spouse; taking of title by surviving joint tenant that is the Owner's spouse; transfer of title to a spouse as part of a divorce or dissolution proceeding; acquisition of title in conjunction with marriage; transfers of title to children when the children are Qualified Persons at the time of transfer. A transfer to children of the Owner who are not Qualified Persons shall give rise to the option in favor of the Agency to acquire the Unit described in Section 8 hereof; provided, however, such option to acquire shall be exercised by the Agency within 60 days after receipt by the Agency of written notice of such transfer, and the purchase price shall be the amount set forth in Section 7(e). (c) Junior Liens. Subject to compliance with the provisions of Section 9 hereof, the Owner may enter into a loan secured by a security agreement and lien that are subordinate to the Security Agreement provided that (i) the proceeds of such loan shall be used solely to pay for repairs or the construction of improvements to the Unit, and (ii) the Agency has previously reviewed and approved the terms and conditions thereof, including, but not limited to, the principal amount of the proposed loan, the interest rate, the terms of repayment, the identity of the maker of the proposed loan, the costs and fees associated with the making of the proposed loan, and the nature and costs of the proposed repairs or the construction of improvements, to be paid with the proceeds thereof, and (iii) the Owner shall have received the written approval of the proposed loan by the Agency prior to the date of its closing. Without limiting the foregoing, the proceeds of the proposed loan shall not be used to pay for the construction of improvement of a luxury nature such as ground pools, spas, or interior or exterior decorative items, or improvements with an unreasonable useful life. The failure of the Owner to comply fully with the provisions of this Section 6(c) when entering into a loan which is secured by a lien that is junior and subordinate to the lien of the Security Agreement shall constitute a default under this Agreement and shall, at the option of the Agency, result in the acquisition of the Unit by the Agency and/or in an acceleration of • the Note requiring the Owner to repay the Note in full. 7. Agency Option to Purchase. Conditional Rental Subsidy Agreement RDA Staff Report 14 S Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 (a) Option. In order to maintain and insure that the Unit shall remain affordable to and only occupied by Qualified Persons, the Agency is hereby granted an option, throughout the Term hereof, to purchase the Unit if the Owner desires to transfer the Unit, or to find another Qualified Person to purchase the Unit. The option shall be exercised in writing by the Agency, if at all, within 60 days after the Agency's receipt of the written notice (the "Notice of Proposed Sale") of the Owner's desire to transfer the Unit (as more fully described in Section 8(a) hereof). During such 60 day period Owner may also concurrently attempt to market the Unit to sell it to a Qualified Person, as provided in Section 8 hereof. The Owner may enter into an agreement to sell the Unit to a Qualified Person (previously approved by the Agency) at a price that does not exceed the maximum price set forth in Section 10 hereof. In such event, the Agency shall not then exercise the option to purchase the Unit or find another Qualified Person to purchase the Unit. If the Agency exercises the option to purchase the Unit, then the Agency shall promptly open escrow therefor and shall close escrow for the purchase of the Unit prior to the date that is 60 days after the Agency opens escrow. Title to the Unit shall be delivered to the Agency at the close of escrow free and clear of monetary liens and encumbrances, and closing costs shall be allocated in the fashion as is customary for buyers and sellers in Orange County. (b) Agency's Failure to Close Following Exercise of the Option to Purchase the Unit. If the Agency exercises the option to purchase the Unit but, due to the Agency's sole fault, the Agency does not close escrow within 60 days after the date the Agency opens escrow, then the Owner shall be entitled to sell the Unit to a person or family that is not a Qualified Person; provided, however, (i) if the Unit is sold to a person or family that is not a Qualified Person, or (ii) if the Unit is sold at a price that exceeds the maximum resale price set forth in Section 10 hereof, then the Owner shall repay the Loan (including all accrued interest thereon) to the Agency as provided in Section 8(c), below, plus an amount (the "Equity Share Amount") equal to the greater of (i) twenty percent (20%) of the net sales proceeds received by the Owner ("net sale proceeds" being the gross sale proceeds minus customary and reasonable costs of sale incurred by the Owner, including brokerage commissions, and adjusted for reasonable prorations); or(ii) the Agency Percentage of the amount by which such net sales proceeds exceed the maximum resale price set forth in Section 10 hereof. As used herein, the term "Agency Percentage" shall mean the percentage obtained by dividing the initial principal amount of the Loan by the value of the Unit (or, if applicable, the replacement Unit) after the rehabilitation work has been completed (as determined in good faith by the Agency based on a projection of such value before the Loan is made). (c) Terms of Purchase. If the Agency exercises the option to purchase the Unit, the purchase price to be paid by the Agency shall be paid all in cash at the close of escrow. The Owner may require a deposit to open escrow in an amount not to exceed three percent (3%) of the purchase price. Title to the Unit shall be delivered to the Agency at the close of escrow free and clear of monetary liens and encumbrances. Conditional Rental Subsidy Agreement.RDA Staff Report 15 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 Closing costs shall be allocated between the buyer and seller according to the customary practices in Orange County in effect at the time the option is exercised. (d) Conditions to Close of Escrow. The escrow instructions may provide for conditions or contingencies of the type and nature customarily included in residential purchase escrows (including but not limited to inspection by the Agency and elimination of pests, and preliminary title report approvals), provided that any such conditions or contingencies (other than the status of title to the Unit at the time of conveyance and other conditions which by their nature cannot be satisfied prior to closing) must be satisfied or waived on or before the close of escrow. The proceeds of the sale shall be used to pay off all monetary liens and encumbrances upon the close of escrow. Escrow shall close within 60 days after the opening of escrow. (e) Purchase Price. The purchase price of the Unit to be paid by the Agency pursuant to the Agency's exercise of the option shall be the lowest of the following three amounts: (i) The actual purchase price paid by the Owner for the Unit plus reasonable and customary escrow closing and title costs (described in Section 2(e) hereof) actually incurred by the Owner in purchasing such Unit, times a fraction, the numerator of which is the AMI for the year in which the sale takes place, and the denominator of which is AMI in which the Owner purchased the Unit (and subtracting therefrom the amount of the Loan, which the Agency shall assume from the Owner); or (ii) the maximum resale price determined pursuant to Section 10(a) hereof, assuming that the Agency, as purchaser, is of the same income level as was the Owner at the time the Owner purchased the Unit; or (iii) the fair market value of the Unit, as determined by an appraiser approved by the Agency. 8. Resale Price Controls and Procedures. (a) If the Owner elects at any time to sell the Unit, then the Owner shall, prior to signing a listing agreement or other authorization to sell with a real estate broker, first provide to the Agency the Notice of Proposed Sale setting forth the Owner's intention to sell the Unit and a property information form to be prepared by the Agency. Such Notice of Proposed Sale shall contain information about the Owner's original purchase price of the Unit and such other information as the Agency shall require. Agency or its designee shall have sixty (60) days from the time following the receipt by the Agency or its designee of the Notice of Proposed Sale to find a new buyer for the Unit being sold, or sixty (60) days to exercise the Agency's option to purchase described in Section 7 hereof; provided, however, the Agency or its designee may shorten such time period upon a showing of hardship by the Owner. The Owner agrees to Conditional Rental Subsidy Agreement.RDA StalT Report 16 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 consider as purchasers those Qualified Persons identified on a list that may be maintained by the Agency. Nothing contained herein shall be construed as imposing on the Agency any obligation to find a purchaser of the Unit if the Owner has elected to sell the Unit. (b) If the Owner resells the Unit to a Qualified Person at a price that does not exceed the price set forth in Section 10 hereof, then the provisions hereof shall continue to encumber the Unit, and the Agency, if necessary, shall subordinate its interest in this Agreement in writing and the Security Agreement as provided in Section 6 hereof. Each successor in interest to Owner that is a Qualified Person shall acquire the Unit subject to the continuation of the restrictions on such property provided in this Agreement and the Security Agreement; and if Agency purchases such property and resells the Unit, such acquisition shall not operate to merge this Agreement and the Security Agreement (or lien created thereby) into Agency's fee interest. (c) If, after expiration of the sixty (60) day period, Agency or its designee has failed to procure an acceptable and qualified buyer and the Agency has not exercised its option to purchase the Unit, then the Owner shall then be free to seek a buyer for the Unit without any limitation on resale price or income level of the purchaser; provided, however, (i) if the purchaser is not a Qualified Person, or (ii) if the resale price exceeds the maximum resale price set forth in Section 10(a) hereof, then the Owner shall repay the Loan (and all accrued interest thereon) to the Agency, plus an amount equal to the Equity Share Amount (defined in Section 7(b), above). (d) The escrow instructions may provide for conditions or contingencies of the type and nature customarily included in residential purchase escrows (including but not limited to financing contingencies, inspection rights, and preliminary title report approvals), provided that any such conditions or contingencies (other than the status of title to the Unit at the time of conveyance and other conditions which by their nature cannot be satisfied prior to closing) must be satisfied or waived on or before the close of escrow. The proceeds of the sale shall be used to pay off all monetary liens and encumbrances upon the close of escrow. Escrow shall close within a reasonable time after opening thereof. (e) The Owner shall notify any proposed purchaser in writing prior to such person's execution of escrow instructions, deposit receipt, purchase and sale . agreement or similar agreement, whichever is earliest, that the title to the Unit will be restricted as provided in this Agreement. (f) The Owner may require a deposit to open escrow in an amount not to exceed three percent (3%) of the purchase price. Title to the Unit shall be delivered to the purchaser at the close of escrow free and clear of monetary liens and encumbrances, except as provided for in this Agreement. Closing costs shall be allocated Conditional Rental Subsidy Agreement RDA Stair Report 17 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 between the buyer and seller according to the customary practices in Orange County in effect at the time the escrow is opened. (g) For the purpose of confirming with the Agency that a proposed purchaser is a Qualified Person that will be paying a purchase price that is in compliance with the terms hereof, the Owner shall notify the Agency in writing of any offer from a prospective purchaser which the Owner intends to accept, disclosing the identity of such prospective purchaser and providing the Agency with such financial, credit, and other information on such prospective purchaser as required by the Agency, including the following: (i) Name and address of the purchaser. (ii) Number of persons comprising the purchaser's household and their names and ages. (iii) Proposed purchase price of the Unit, and any other consideration for the purchase of the Unit. (iv) Amount of down payment. (v) Terms of any loan that will be used by the purchaser to finance the purchase of the Unit, including, but not limited to, principal, interest rate, term, and loan fees. (vi) Closing date. (vii) Aggregate annual income of the purchaser's household. (viii) Most recent federal and state income tax returns of the purchaser and all other members of the purchaser's household for the preceding two (2) calendar years, and verification of the proposed purchaser's salary or wages from the purchaser's employer or from current pay stubs showing year to date as well as period payroll for the preceding two (2) calendar years. (ix) Copy of any proposed purchase and sale agreement, escrow instructions, loan application, or other agreements between the Owner and the purchaser of the Unit or relating to the sale of the Unit including closing documents or any other documentation that the Agency deems appropriate to implement this Agreement. (x) A written statement signed by the proposed purchaser that the Unit will be occupied by the purchaser and used as his or her sole residence. Conditional Rental Subsidy Agreement.RDA Staff Report 1 8 • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 In lieu of providing the foregoing information, these requirements shall be deemed to have been satisfied by delivery to the Agency of a written certification of the foregoing information from the purchaser's lender who shall hold a first position lien encumbering the Unit, which certification shall be furnished to Agency at least 20 days prior to the close of escrow for the Unit. The Agency shall have 30 days from the date of its receipt by the Agency to review the information (unless the Agency received the certification from prospective purchaser's lender, in which case the Agency shall have 15 days to review the information). If the Agency fails to approve the purchaser within such period of time, then the purchaser shall be deemed approved by the Agency. The Agency may require the purchaser to submit other written documentation reasonably requested by the Agency to verify the information set forth herein and to determine that the Affordable Housing Cost restrictions of this Agreement shall be satisfied. If the Agency receives all such prospective purchaser information requested by the Agency, the Agency shall determine whether the prospective purchaser is a Qualified Person, and shall thereafter immediately notify the Owner in writing that the prospective sale is authorized and approved, or that the prospective purchaser does not qualify to purchase the Unit as a Qualified Purchaser. The Agency hereby designates the Executive Director of the Agency to make the evaluations, reviews and determinations set forth in this Section 8(g). If the Agency notifies the Owner that the sale is authorized and approved, the Owner shall proceed to complete the sale of the Unit within 75 days of the date of such approval from the Agency. 9. Notification Prior to Encumbrance or Hypothecation. If Owner desires to borrow funds for a new loan to be secured by a junior lien encumbering the Unit the proceeds of which are to be used to pay for repairs or the construction of improvements to the Unit pursuant to Section 6(c) hereof, prior written approval of the Agency is required. The Owner must request such approval in writing at least 30 days prior to the recordation of a security agreement securing any such refinancing or loan, the Owner shall submit to the Agency in writing the following information: (a) Name and address of lender. (b) Terms of the loan, including, but not limited to, principal, interest rate, term, and loan fees. (c) Closing date of the loan. (d) Copy of any proposed escrow instructions, loan application, security agreement, Statement of Lien and other agreements between the Owner and the lender. Conditional Rental Subsidy Agreement.RDA Staff Report 19 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 1004 (e) Written documentation of compliance with the conditions for Agency approval as set forth in Section 6(c) hereof. (f) Other written documentation reasonably requested by the Agency. The Agency shall have 15 working days after its receipt of all of such information to approve or disapprove the proposed loan. The subject loan shall be deemed approved by the Agency if it is not disapproved within such 15 working day period. 10. Restriction on Resale Price. Except as permitted by Section 8(c) hereof, the Owner shall not resell the Unit at a price higher than an Affordable Housing Cost (as defined in Section 2(b) hereof) for the prospective purchaser, assuming (i) a reasonable down payment, and (ii) a 30 year fixed rate mortgage at prevailing interest rates. 11. Repayment of the Loan. Upon any resale of the Unit, the Loan shall be due and payable, except as follows: If the resale of the Unit is to another Qualified Person and, at the option of the Agency, such purchaser either executes an assumption agreement (and such other documents as the Agency may require) evidencing the assumption of this Agreement, the Note and the Owner's obligations thereunder, or executes and delivers a new Unit Regulatory Agreement, Note and Security Agreement (subject only to such prior liens as the Agency shall approve in its sole and absolute discretion), then (i) all interest accrued from the date of the Owner's acquisition of the Unit through the closing date of the resale to the new Qualified Person shall be paid at close of escrow of such resale, (ii) interest shall then accrue from and after the closing date of the resale (with such accrued interest again to be subject to payment upon another resale to yet another Qualified Person), and (iii) the principal amount of the Loan shall be due only to the extent that the purchase price paid by the purchaser exceeds the amount that would have been the maximum resale price to another purchaser at the same income level as was the Owner's at the time of the closing of the Loan. (Thus, if the seller and the purchaser are of the same income level, then none of the principal would be due, but if the purchaser is of a higher income level, then it is possible that some of the principal may be due because the maximum resale price calculated pursuant to Section 10(a) hereof, may be higher if the purchaser is of a higher income level than was the Owner at the time of the Owner's acquisition of the Unit.) At the end of the Term hereof, if there have been no resales to any person or family other than a Qualified Person, the principal balance outstanding and any accrued interest shall be forgiven by the Agency subject to and in accordance with the provisions of Section 5(b) hereof. 12. Annual Report. The Agency shall have the option of requiring that the Owner provide, on an annual basis, such information as the Agency deems necessary • Conditional Rental Subsidy Agreement.RDA Staff Report 20 • S Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 to implement this Agreement. 13. Nondiscrimination Covenants. The Owner and the Park Owner agree, for themselves and their successors and assigns, to refrain from restricting the transfer of the Unit or the Space on the basis of race, color, creed, religion, ancestry, sex, marital status, national origin or age of any person. All bills of sale or other transfer documents entered into with respect to the Unit or the Space shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or Through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the unit." The foregoing shall be a covenant running with the land for the benefit of, and as a burden upon the Unit or the Space, and shall remain in effect in perpetuity. Nothing contained herein shall be construed as permitting the Owner to transfer the Unit without the Agency's prior written consent. 14. Maintenance of the Unit/Prohibition Against Waste. The Owner shall not commit waste upon the Unit. The Owner shall not remove or demolish the Unit. The Owner shall, throughout the Term hereof, keep and maintain the Unit and the improvements thereon in good condition and repair. If the Owner at any time fails to so keep and maintain the Unit in compliance with law or in good condition and repair, after 30 days notice from the Agency, the Agency shall have a right to enter onto the Unit and perform such deferred maintenance or compliance work, and the Owner shall promptly reimburse the Agency for all costs incurred by the Agency in performing such maintenance. 15. Default. If any party defaults with regard to any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within thirty (30) days after service of the notice of default, or if the default is not commenced to be cured within thirty (30) days after service of the notice of default and is not cured promptly within a reasonable period of time after commencement, the defaulting party shall be liable to the other parties for damages caused by such default. Conditional Rental Subsidy Agreement.RDA Staff Report 2 1 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 16. Notices. All notices to be delivered to the parties pursuant to the terms hereof shall be in writing and shall be delivered in person or by U.S. Mail or other delivery service to the addresses listed below. Any of the following addresses may be changed by written notice. If notice is given it shall be deemed effective upon 3 business days after deposit of same, postage prepaid, in the U.S. Mail, or the date of actual receipt as evidenced by personal acknowledgment, return receipt or other comparable means. If to Owner: At the address for the Unit set forth in Section 1(b). If to Park Owner: LINC Community Development Corporation 110 Pine Avenue, Suite 525 Long Beach, California 90802 Attn: If to the Agency: City of Seal Beach Redevelopment Agency 211 Eight Street Seal Beach, California 90470 Attn: Executive Director 17. Unit Successors and Assigns. The covenants established in this Agreement shall be binding on the Owner and any successor in interest of the Owner to the Unit, and the Park Owner and any successor in interest of the Park Owner to the Park or the Space and shall be for the-benefit and in favor of the Agency and its successors and assigns. The covenants established in this Agreement shall be incorporated by reference in all bills of sale and other transfer documents conveying all or any portion of the Unit or the Space. The Owner and the Park Owner (and each successor in interest, as the case may be) shall furnish a copy of this instrument to any successors in interest. The Agency shall have the right, in the event of any breach by the Owner or Park Owner of any covenant or agreement herein, to exercise all the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach of covenant or agreement. Notwithstanding the foregoing, however, the Owner, the Park Owner, and their successors in interest shall be liable for performance hereof only during their respective period of ownership, provided that the "transferee" has in writing assumed and agreed to perform the"transferor's" obligations hereunder. 18. No Speculative Investment. The Owner hereby represents to the Agency that the acquisition of the Unit by the Owner in the manner described herein is not intended as a speculative financial investment. 19. Administration. The Agency may administer the terms hereof or may, from time to time assign its rights hereunder or designate another entity, person, licensed broker or organization to administer the terms hereof. Conditional Rental Subsidy Agreement.RDA Staff Report 22 . • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects RedevelopmentAgency Staff Report January 26, 2004 20. Independent and Severable Provisions. If any provision of this instrument is held by a court of competent jurisdiction to be unenforceable or invalid, such holding shall not render unenforceable any other provision hereof, each provision hereof being expressly severable and independently enforceable to the fullest extent permitted by law. 21. Further Assurances and Recordations. The Owner and the Park Owner covenant that upon request of the Agency, the Owner or the Park Owner, as applicable, or their heirs, successors or assigns, will execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such further instruments and agreements and do such further acts as may be necessary, desirable or proper to carry out more effectively the purpose of this instrument. At the expiration of the Term, the Agency agrees to • provide to the Owner and the Park Owner an instrument that has the effect of confirming the termination of the affordable housing requirements of this instrument. 22. Captions and Section Headings. Captions and section headings used herein are for convenience only and shall not be used in construing this instrument. 23. No Waiver. No waiver by the Agency of its rights hereunder, or of any breach by the Owner or the Park Owner of any covenant, restriction, or condition herein contained, shall be effective unless such waiver is in writing, signed by the Agency and delivered to the Owner or the Park Owner, as applicable. Any waiver by the Agency of any covenant, restriction, or condition herein contained, or the failure by the Agency to exercise any right or remedy with respect to any breach or breaches, shall not constitute a waiver or relinquishment for the future of any rights regarding subsequent sales, or of any such covenant or condition nor bar any right or remedy of the Agency in respect of any subsequent breach. 24. Entire Agreement. This instrument constitutes the entire agreement of the parties hereto, and the provisions hereof may be modified or amended only by a written instrument signed by both Agency and Owner (or their successors), except that the signature of Park Owner or its successor shall be required for any changes to Section 5(b). 25. Attorneys' Fees. In any action brought to declare the rights granted herein or to enforce or to interpret any of the terms of this Agreement, the prevailing party shall be entitled to an award of reasonable attorney's fees in an amount determined by the court. 26. Amendments. Only the Agency, its successors and assigns, and the Owner and the successors and assigns of the Owner in and to all or any part of the fee title to the Unit shall have the right to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements, or other restrictions contained in this Agreement, except that the consent of Park Owner shall be required for any changes to Conditional Rental Subsidy Agreement.RDA Staff Repoli 23 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 Section 5(b). IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. AGENCY: OWNER: REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH, Print Name: • a public body, corporate and politic By: Print Name: John Bahorski, Executive Director, Redevelopment Agency Print Name: Attest: PARK OWNER: LINC COMMUNITY DEVELOPMENT CORPORATION, a California non-profit corporation By: Name: Title: • Conditional Rental Subsidy Agrecment.RDA Staff Reporl 24 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 State of California } } County of } On , 2004, before me, , a Notary Public, personally appeared , personally known 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 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. WITNESS my hand and official seal. Signature (seal) State of California } } County of } • On , 2004, before me, , a Notary Public, personally appeared , personally known 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 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. WITNESS my hand and official seal. Signature (seal) Conditional Rental SubsidyAgrccment.RDA Stall Report 25 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 State of California } } County of } On , 2004, before me, , a Notary Public, personally appeared , personally known 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 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. WITNESS my hand and official seal. Signature (seal) • State of California } County of } On , 2004, before me, , a Notary Public, personally appeared , personally known 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 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. WITNESS my hand and official seal. Signature (seal) Conditional Rental Subsidy AgreementRDA Staff Report 26 • S Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 EXHIBIT A DESCRIPTION OF UNIT That certain mobilehome situated in the City of Seal Beach, County of Orange, State of California, described as follows: (Property Address) • Seal Beach, CA 90740 Conditional Rental Subsidy AgreementRDA Staff Report 27 • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report Tanuary 26, 2004 EXHIBIT B DESCRIPTION OF PARK That certain land situated in the City of Seal Beach, County of Orange, State of California described as follows: Seal Beach Trailer Park 1-32 =32 34,35 =2 38,39 = 2 • 41-44 =4 46-58 = 13 60-64 = 5 66-113 =48 122-140 = 19 Total of 125 Units within the Park The Seal Beach Park is located off of Pacific Coast Hwy & l st Street in the City of Seal Beach. (See attached map for Trailer Park location) (See attached plat map for lot location) Conditional Rental Subsidy Aereement.RDA Staff Report 28 • • • Conditional Rental Subsidy Agreement—Substantial Rehabilitation Projects Redevelopment Agency Staff Report January 26, 2004 EXHIBIT C • DESCRIPTION OF SPACE See the diagram attached hereto. • Conditional Rental Subsidy Agree neat RDA Staff Report 29