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HomeMy WebLinkAboutAttachment No. 5 Declaration of Covenants, Conditions, and RestrictionsAttachment No. 54ewigsmsmm .4 1 (Wu 005887 /Deo? -- RECORDING REQUESTED SY: OQM ONINEALTk4 LAND TITLE CD, NO CHARGE ON THIS DOCUMENT FOR THE BENEFIT OF A STATE AGENCY FORMED BY THE CITY OF NATIONAL CITY Recording Requested By: DETISCH & CHRISTENSEN 444 W. "C" Street, Suite 200 San Diego, CA 92101 And When Recorded Mail To: Attn: Executive Director Community Development Commission of the City of National City 140 East 12th Street, Suite B National City, California 91950 11 DOC # 2002-0518422 JUN 19, 2002 11 e 23 A i 11 i OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE CREGORY J. SMITH, COUNTY RECORDER FEES: 0.00 2002-0518422 i i i DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (TENANT RESTRICTION& THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (hereafter "Declaration") is made as of December 18, 2001, by PLAZA MANOR PRESERVATION, L.P., a California limited partnership, (hereinafter "DECLARANT") in connection with that certain parcel of real property ("PROPERTY") located in the City of National City, County of San Diego, California, described in Exhibit "A" attached hereto and incorporated herein by reference. RECITALS DECLARANT has acquired title to the PROPERTY with the aid of a Loan obtained from the Community Development Commission of the City of National City (hereafter the "CDC"), and intends to operate a three hundred seventy-two (372) unit project referred to as ''Plaza Manor" as a very low and low income housing project. Concurrent with the recordation of this Declaration, the CDC is partially funding, by loan secured by deed of trust on the PROPERTY, the acquisition, rehabilitation and permanent financing of a Project described in the Owner Participation Agreement ("AGREEMENT" or "Loan Agreement" or "Owner Participation December 20, 2001 Plaza Manor CC&Rs.32200Z.doc 1 Attachment No. 5 005888 Agreement," the terms being synonymous) dated December 18, 2001. This loan is to assist DECLARANT in rehabilitating, maintaining and holding the PROPERTY and operating the PROJECT using federal HOME PROGRAM funds and local funds of the CDC. The Loan Agreement and Project Trust Deed by the CDC were conditioned in part upon the recordation of a document setting forth certain restrictions upon the use and sale of the PROPERTY. NOW, THEREFORE, DECLARANT hereby declares that the PROPERTY shall be subject to the covenants, conditions and restrictions set forth below: 1. Restrictive Covenants and Terms. DECLARANT agrees and covenants on behalf of itself and its successors and assigns, and each successor in interest to the PROPERTY, that at all times during the term of this Declaration set forth, three hundred seventy (370) of three hundred seventy-two (372) units of the PROJECT shall be set aside and reserved as "Affordable Units." As used herein, the term "Affordable Units" shall refer to those residential units in the PROJECT that are owned or held available strictly in accordance with the terms and conditions set forth below. Two (2) two bedroom units shall be set aside as Managers' Units. 2. Affordable Unit Restrictions. The following restrictions shall apply to the three hundred seventy-two (372) units. The units shall be rent and occupancy restricted in accordance with Section 8, TCAC/CDLAC, CHFA and HOME Program requirements. The restrictions set forth in the Table attached as Exhibit "1" hereto, hereinafter "Table," shall establish the rental rate, after the required reduction for utilities, and tenant income calculation criteria as follows: Maximum rents (Column 1); Unit Size and Type (Column 2); Number of Affordable Units (Column 3); and Limit in Income of Eligible Tenants based upon percentage of the Median Area Income (Column 4); Years of Restriction (Column 5); and Type of Unit (Le. Section 8, TCAC/CDLAC and CHFA) (Column 6): "Eligible Tenants" are those tenants whose aggregate gross annual income does not exceed the respective percentages set forth in the table above of annual median income, as adjusted for family size. These units shall be the "Affordable Units." For purposes of this Declaration, the current annual median income shall be the median income defined by the Department of Housing and Urban Development (HUD) as the then current median income for the San Diego Standard Metropolitan Statistical Area, established periodically by HUD and published in the Federal Register, as adjusted for family size, and as shown on the Maximum Income/Affordable Rent Table attached as Exhibit "D-1." However, for the purpose of calculating maximum rents and deducting 2 k embar 20. 2001 Plaza Manor CC&Rs.122001Aoc Attachment No. 5 005889 for utilities, Exhibit "D-2" is attached. Both exhibits shall be deemed adjusted, from time to time, in accordance with any adjustments that are authorized by HUD or any successor agency. In the event HUD ceases to publish an established median income as aforesaid, the CDC may, in its sole discretion, use any other reasonably comparable method of computing adjustments in median income. Notwithstanding anything to the contrary herein, the rent and income restrictions set forth herein shall not be applicable until such time as the HUD Housing Assistance Contract is no longer in full force and effect. At that time, these rent and income restrictions shall be fully applicable and effective. The eligibility of each prospective tenant under the restrictions set forth in 1 above shall be certified by DECLARANT who shall submit such certification and all supporting documentation on forms acceptable to the CDC, in its sole discretion, for a determination of tenant eligibility, prior to tenant occupancy. No Affordable Unit (Section 8, TCAC/CDLAC, CHFA and HOME) may be rented to a prospective tenant or occupied by any person unless and until the CDC has determined that the prospective tenant or occupant is an eligible tenant (defined above) as determined in accordance with the provisions set forth below [Sections 3 through 14, inclusive], provided, however, that the failure of the CDC to timely act upon the submission within five (5) business days of submission shall be deemed an approval of such prospective tenant. 3. Affordable Marketing Plan Compliance. Eligible Tenants shall be any tenants, provided that DECLARANT has and continues to comply with the terms of its approved affirmative marketing plan and rents to those person(s) referenced in said approved plan, as may be amended from time to time, and as approved by the CDC. 4. Determination: Annual Requalification. The CDC's determination of eligibility shall be based upon an application completed by the prospective tenant (including backup documentation such as employment and income verification documents) in accordance with the CDC's normal procedures then in effect, and submitted by DECLARANT to the CDC for review and determination of eligibility. Failure of the CDC to respond within five (5) business days of submission of complete income information shall be deemed approval. Further, tenants shall be requalified as Eligible Tenants according to the above -described process annually. Such requalification process shall be performed by DECLARANT as part of the annual certification of DECLARANT's compliance as set forth in Paragraph 4 below. Failure by DECLARANT to timely comply with the tenant qualification and requalification process described in this Paragraph 3 shall constitute a material default under this Declaration. 3 December 20. 2001 Plaza Manor CC&Rs. 122001.doc Attachment No. 5 00583 5. DECLARANT Certification: Annual Recertification. Upon the completion of the PROJECT, the occurrence of which shall be determined by the CDC, in its sole discretion, and on the anniversary date thereof in each year of the term of this Declaration, DECLARANT shall certify to the CDC, under penalty of perjury, utilizing such forms and providing such backup documentation as the CDC may require, that DECLARANT is complying with all provisions of this DECLARATION. Failure to timely complete the annual certification process described in this Paragraph 4 shall constitute a material default under this DECLARATION. The CDC may resort to the remedies set forth in this DECLARATION upon such material default, as well as any and all other remedies available at law or in equity and/or contained in the CDC Loan, as defined in the Agreement (all terms that are undefined in this Declaration shall have the meaning as used in the AGREEMENT. 6. Operating and Replacement Reserves. The DECLARANT shall, during the time of the affordability of the PROJECT as referenced in. this DECLARATION, maintain operating and replacement reserves for the PROJECT, pursuant to the terms of the Partnership Agreement and any requirements of the senior lenders, as approved by the CDC. Failure to maintain such reserves shall constitute a material default under the terms of this DECLARATION. For the purpose of this DECLARATION, operating reserves required under the terms of the CHFA loans shall be deemed acceptable during the term of the CHFA loans. In addition to the operating reserve, during the term of the DECLARATION, replacement revenues shall be maintained in an amount of not less than that required under the terms of the CHFA loans. These reserve amounts are subject to revision upward as determined by the Executive Director of the CDC, annually, based upon an increase in the consumer price index for the San Diego Metropolitan Area. The operating reserve shall be maintained in a separate account in anticipation of and as a contingency against unbudgeted and/or unforeseen expenses in the operation and maintenance of the Project. No disbursements from the operating reserve or replacement account(s) shall be made without the express written consent of the Executive Director of the CDC, or designee, which consent shall not be unreasonably withheld or denied. Annually, the sums required under the terms of the CHFA loans shall be set aside as a reserve for replacements. DECLARANT shall account to the .CDC for any monies expended from the operating reserves and/or replacement account(s), in such form as approved by the CDC. After the CHFA loans are no longer outstanding, the amount of the replacement and operating reserves shall be determined by the Executive Director of the CDC, in his/her reasonable discretion, which approval shall not be unreasonably withheld. 4 Number 20, 2001 Plaza Manor CC&Rs.122001.doe Attachment No. 5 ` t 0O5891 7. Relationship with DECLARANT. The term "Eligible Tenant" shall not include DECLARANT or any individuals who are partners or shareholders in DECLARANT or in any entity having an interest in DECLARANT or in the PROPERTY, or officer, employee, agent or consultant of the owner, developer or sponsor, or otherwise violate applicable state or federal conflict regulations. 8. No Student Dependents. The term "Eligible Tenant" shall not include any student dependent as defined in the U.S. Internal Revenue Code, unless the taxpayer (upon whom the student in question is dependent) resides in the same dwelling unit. 9. Income of Co -tenants, etc. The income of all co -tenants and/or non- dependent occupants shall be taken into account in determining whether a household is an Eligible Tenant hereunder. 10. Over Income Tenants. In the event that a tenant who was properly certified as an Eligible Tenant at the commencement of such tenant's occupancy ceases to be eligible, for any reason other than a Tenant being over income, the DECLARANT shall give sixty (60) days written notice to such Tenant to vacate the Unit. The vacated Unit shall be rented to an Eligible Tenant. Notwithstanding anything to the contrary in this Declaration, no occupant of a HOME Program Affordable Unit or Affordable Unit who previously and properly qualified as an Eligible Tenant shall be evicted by DECLARANT because such occupant fails to requalify as an Eligible Tenant, because such occupant exceeds the income limits of Exhibit "D-2," as in the case of increased income, except as provided for in Section 92.252, as amended from time to time. Rather, the next available Unit shall be designated as a HOME Program Affordable Unit or Affordable Unit to replace the Unit of the occupant in question. Further, subject to the fair market limitations set forth in HOME Regulation 92.252, such occupant shall commence paying rent equal to thirty percent (30%) of such occupant's Adjusted Income (as that term is defined in 24 C.F.R. ' 813.102), effective from and after the date of such failure to requalify, as further described herein. The over income tenant shall continue to be considered as an "Eligible Tenant" until evicted, provided this continued occupancy complies with all applicable regulations. a. CDC Local Program Funds Only. Be given one hundred eighty (180) days notice to vacate the affordable unit, effective from and after the date of such failure to requalify (i.e., the re -certification date, provided the tenant was properly certified originally). During the time the over -income tenant resides in the Affordable Unit, the tenant shall continue to pay the restricted rent. The tenant shall continue to be 5 December 20, 2001 Plaza. Manor CC&Rs. 122001.dac Attachment No. 5 i 00589,2 considered an "eligible tenant" until evicted, provided this continued occupancy complies with all applicable HOME Program requirements. b. HOME Program Funds Only. When a HOME Eligible Tenant's gross income exceeds the "low income" definition as defined in CFR 92.252(i), i.e., over eighty percent (80%) of area median income, then the tenant shall commence paying rent equivalent to thirty percent (30 %) of the Tenant's adjusted income, subject to the fair market rent ceiling as set forth in HOME Regulation 92.252(i) and the next available comparable sized and configured unit shall be designated as a HOME Affordable Unit. The tenant shall continue to be considered an "eligible tenant" until evicted, provided this continued occupancy otherwise complies with all applicable HOME Program requirements. c. HOME and CDC Local Funds. If residing in a HOME unit, shall be subject to the HOME provisions described above; the remaining units shall be subject to the CDC Local Funds provisions. d. HOME, CDC and Tax Credit Funds. When HOME, CDC and Tax Credit funds are involved, all units subject to the Tax Credit Program Rules and/or the Bond Regulatory Agreement shall be governed by the Tax Credit Provisions and the Bond Regulatory Agreement for so long as tax credits are involved, Thereafter, the HOME and CDC rules shall apply. 11. Bond and/or Tax Credit Program Funds Only. Be permitted to continue to reside in the assisted unit at the reduced rental rate, unless the over -income Tenant reaches one hundred and forty percent (140%) of the applicable income limit, whereupon the Tenant shall be given one hundred eighty (180) days notice to vacate the affordable unit, effective from and after the date of such income determination. The tenant shall continue to be considered an "eligible tenant" until evicted, provided this continued occupancy complies with all applicable tax -credit and/or bond requirements. 12. Accessibility Standards. DECLARANT represents and warrants that it will comply with all federal, state and local requirements and regulations concerning access to the units by the disabled and handicapped persons. 13. Physical Condition of Affordable Units. After completion of the PROJECT, DECLARANT shall continually maintain the Affordable Units and the landscaping and grounds in a condition which satisfies the Housing Quality Standards promulgated by HUD under its Section 8 Program, as such standards are interpreted December 20.2001 Plaza Manor CC&Rs.122001.doc 6 Attachment No. 5. 1 005893 and enforced by the CDC under its normal policies and procedures. The CDC shall have the right to inspect the Affordable Units from time to time, on reasonable notice and at reasonable times, in order to verify compliance with the foregoing maintenance covenant. Further, each Affordable Unit shall be requalified annually, as to the foregoing maintenance covenant, as part of the annual tenant requalification process described in Paragraph 4 above. Any failure to comply with Housing Quality Standards of an Affordable Unit shall be corrected by DECLARANT at DECLARANT's expense within thirty (30) days of the identification of such deficiency by the CDC. 14. CDC Monitoring Functions. It is contemplated that, during the term of this DECLARATION, the CDC will perform the following monitoring functions: (A) preparing and making available to DECLARANT any general information that the CDC possesses regarding income limitations and restrictions which are applicable to the Affordable Units; (B) reviewing the applications of prospective occupants of the Affordable Units, and determining eligibility of such persons as Eligible Tenants; (C) reviewing the documentation submitted by DECLARANT in connection with the annual certification process for Eligible Tenants described in paragraph 1 and 2 above; and (D) inspecting the Affordable Units to verify that they are being maintained in accordance with the terms of this DECLARATION above; (E) inspecting the Project to verify that the Property is being maintained in accordance with the approved Property Management Plan, as amended annually during the term of the Declaration. Notwithstanding the foregoing description of the CDC's functions, DECLARANT shall have no claim or right of action against the CDC based on any alleged failure to perform such function, except that DECLARANT may reasonably rely upon the CDC's tenant eligibility determination and shall not be liable to the CDC for any damages, as set forth in Loan Agreement, attributable to the CDC's sole negligence or willful misconduct in conducting any such tenant eligibility determinations. 15. Designation of Affordable Units. The Affordable Units, described in the "Table of Rent and Income Restriction Criteria" (the "Table") will be initially designated as referenced in the Table, but shall be floating. Such designations may only be changed with the prior written consent of the CDC, which consent may be granted or withheld in the CDC's sole and absolute discretion, provided, however, that the units before and after the change in designation are of the same unit types, size, and features. 16. Compliance with Applicable Regulations. DECLARANT shall comply with all regulations, policies and procedures promulgated by H.U.D. including but not 7 December 20, 200] Plaza Manor CC&Rs.122001.doc Attachment No. 5 i 005894 limited to the HOME Program Regulations as contained with the Owner Participation Agreement, which provisions are incorporated herein by reference, and by the CDC, in connection with the Loan which is being made to DECLARANT. DECLARANT's failure to so comply shall constitute a material default hereunder, entitling the CDC to the remedies set forth in Paragraph 23 below. 17. Successors Bound. DECLARANT covenants, for itself and its successors and assigns, not to sell, transfer, assign or otherwise dispose of ownership of the PROPERTY, unless the prospective purchaser, transferee or assignee expressly promises in writing to be bound by all of the provisions hereof, including the covenant in this Paragraph 13 to require successors to expressly assume the obligations herein. It is expressed acknowledged that the covenants and restrictions set forth herein shall survive any repayment of the CDC Loan referenced in the AGREEMENT. Further, the obligations of DECLARANT hereunder shall be deemed independent of DECLARANT's obligations under the Loan Agreement. 18. Maximum Rent To Be Collected by DECLARANT. In no event, shall the "Total Rent" including the portion paid by the Resident Tenant and any other person or entity, collected by DECLARANT for any rent restricted unit exceed the amount of rent set forth in the Table referenced in Section 1. Total Rent includes all payments made by the Resident Tenant and all subsidies received by the DECLARANT. In the case of persons receiving Section 8 benefits, who are Resident Tenants, the DECLARANT acknowledges that it shall not accept any subsidy or payment that would cause the Total Rent received for any restricted unit that exceeds the maximum rents allowed in the above -referenced Table, for any rent restricted unit. Should the DECLARANT receive Total Rent in excess of the allowable maximum rent set forth in the Table, DECLARANT agrees to immediately notify the AGENCY and reimburse the AGENCY for any such overpayment. Acceptance by DECLARANT or its successors in interest, of Total Rent in excess of the maximum rent set forth in the Table shall constitute a material breach of this DECLARATION, unless said excess rent is reimbursed to the AGENCY after receipt by DECLARANT of a ten (10) day notice from the AGENCY to the DECLARANT of the overpayment. 19. Loan Payments. If and when provided for in the NOTE, as defined in the AGREEMENT, the annual loan payments shall be made to the CDC. 20. Term. This Declaration and the covenants and restrictions contained herein shall be effective upon the earlier of April 15, 2002, or the completion of the 8 December 20, 2001 Plaza Manor CC&Rs,122001.doc i Attachment No. 5 005895 rehabilitation of the units, and shall remain in full force and effect up through and including April 15, 2032. 21. Covenant Against Discrimination. DECLARANT covenants on behalf of itself and its successors and assigns, and each successor in interest to the PROPERTY, not to discriminate against any tenant or prospective tenant of the PROJECT on the basis of their race, age, sexual orientation, marital status, color, religion, sex, handicap, or national origin, or any other basis prohibited by law, as referenced in all applicable state, local and federal law, and the Loan Agreement and Loan Documents. 22. Conflicts of Interest. Interest of current or former members, officers or employees. DECLARANT represents and warrants that no member, officer, or employee of the DECLARANT, no member of the governing body of the locality in which the CDC was activated, and no other public official of such locality or Iocalities who exercises any functions or responsibilities with respect to this DECLARATION, shall, during his or her tenure, or for one year thereafter, have any interest direct or indirect, in this DECLARATION or the proceeds thereof. Any violation of this section may, at the option of the CDC, result in unilateral and immediate termination of this DECLARATION by the CDC. Further, the Contractor, who constructs the Project, agrees to comply with all of the Conflict of Interest provisions contained in 24 CFR 92.356. 23. Inspections. The CDC shall be entitled to review, inspect and approve, without liability, all of the construction being performed pursuant to the terms of the CDC Loan and the operation of the Project after the completion of the Project. All construction and management and maintenance of the Project shall be performed to the satisfaction of the CDC, without liability to the CDC for review and observation of the construction and/or the operation of the Project after completion. Any deficiencies in construction and/or management of the Project after completion, shall be corrected by the Contractor, and/or the DECLARANT, upon written notice from the CDC to the DECLARANT, prior to any additional funding of the Loan. If funding has been completed, then correction in deficiencies in construction and/or operation shall be accomplished within thirty (30) days of written notice from the CDC to the DECLARANT. 24. Records and reports. DECLARANT shall supply the CDC, annually, on November 15th of each year during the term of this DECLARATION, with such records and reports as are required and are requested by CDC to aid it in complying with the reports and record keeping provisions, terms and conditions of 24 CFR 92.508 December 20, 2001 Plaza Manor CC&Rs, 12200I.doc 9 Attachment No. 5 and 92.509, as amended from time to time, and any and all other requirements of this DECLARATION. The records and reports include, but are not limited to the following: applicable; a. Amount of funds expended pursuant to the AGREEMENT; b. Eligible Tenant information, including yearly income verifications; c. Housing payments charged to resident tenants, to the extent d. On -site inspection results; e. Sale and resale information; f. Affirmative marketing records; g. Insurance policies and notices; h. Equal Employment Opportunity and Fair Housing records; i. Labor costs and records; j. An audited income and expense statement and balance sheets for DECLARANT; k. An audited income and expense statement and balance sheets for the PROJECT; 1. A Management Plan for the calendar year in which the report is prepared showing anticipated rental income, other income, expenses, anticipated repairs and replacements to the Project, timing of such repairs and replacements, maintenance of the Project, insurance maintained on behalf of the Project, and such other matters as the CDC shall require, in its sole discretion; m. Federal and State income tax returns for the calendar year, ending on the preceding December 3lst; n. Annual analysis of reserves for repair and replacement; 10 Decrmbtr 20, 2001 Pura Manor CC& Rs.122001. doc Attachment No. 5 005897 o. Annual certification and representation regarding status of all • loans, encumbrances and taxes; p. Annual statement regarding condition of the Property and disclosing any known defects and a proposed method of repairing the same; q• An OMB A-133 financial audit; r. A report or reports, certifying compliance with the terms and provisions of the Section 3 requirements, as set forth in the AGREEMENT and certifying compliance with the provisions of federal law as it relates to Section 3 whether or not specifically set forth in the AGREEMENT; and, s. Such other and further information and records as the CDC and/or HUD shall request in writing from the DECLARANT. The parties agree that a fee of $25.00 per day, per report and/or information is a reasonable estimation of the damages that will accrue to the CDC as a result of the failure of the DECLARANT to timely submit the required information and/or reports and that said fees shall be treated as liquidated damages by the parties, in anticipation of the damages that will be incurred by the CDC as a result of a breach by the DECLARANT. The parties further agree that it would be difficult, if not impossible, to determine the exact actual amount of damages suffered by the CDC in the event of a breach by the DECLARANT in the reporting requirements of this DECLARATION, including, but not limited to, Section 24 hereof. Notwithstanding the foregoing or anything to the contrary contained herein, the CDC shall give the DECLARANT prior written notice of any report and/or information that the DECLARANT has failed to provide the CDC pursuant to this Section 24 and the DECLARANT shall have ten (10) days to provide such report and/or information to the CDC prior to the assessment of any liquidated damages. 25. Participation. DECLARANT shall cause the fact that the CDC has provided funds to the Project to be referenced in all advertisement(s), press release(s), brochure(s), information sheet(s), and all Project Designation Placards placed on the Project site or other site(s), as approved in advance, by the CDC. The design, content and format of the press release(s), advertisement(s), information sheet(s), brochure(s), and Project Placard(s) are subject to the written approval of the Chief Executive Officer of the CDC. CDC, at its sole option, reserves the right to request, in writing, that the references to the participation of the CDC in the Project not be included in any, or all, it December 20.2001 Plaza Manor CC&Rs. 122001.do Attachment No. 5 005898 advertisements, press releases, brochures, information sheets, and/or Project Designation Placards. 26. Enforcement. DECLARANT expressly agrees and declares that the CDC or any successor public agency is a proper parry and shall have standing to initiate and pursue any and all actions or proceedings, at law or in equity, to enforce the provisions hereof and/or to recover damages for any default hereunder, notwithstanding the fact that such damages or the detriment arising from such default may have actually been suffered by some other person or the public at large. Further, the CDC, or any successor public agency, shall be the proper party to waive, relinquish, release or modify the rights, covenants, obligations or restrictions contained in or arising under this Declaration. 27. Attorney's Fees. In the event that any litigation for the enforcement or interpretation of this Declaration, whether an action at law or arbitration or any manner of non judicial dispute resolution to this Declaration by reason of the breach of any condition or covenant, representation or warranty in this Declaration, or otherwise arising out of this Declaration, the prevailing party in such action shall be entitled to recover from the other reasonable attorneys' fees to be fixed by the court which shall render a judgment, as well as the costs of suit. 28. Severability. In the event that any provision or covenant of this Declaration is held by a court of competent jurisdiction to be invalid or unenforceable, then it shall be severed from the remaining portions of this Declaration, which shall remain in full force and effect. 29. Covenants to Run With the Land. The covenants contained herein shall constitute "covenants running with the land," and shall bind the PROPERTY and every person having an interest therein during the term of this Declaration. DECLARANT agrees for itself and its successors that, in the event that, for any reason whatsoever, a court of competent jurisdiction determines that the foregoing covenants do not run with the land, such covenants shall be enforced as equitable servitudes against the PROPERTY. 30. Recordation. This Declaration shall be recorded in the Office of County Recorder of San Diego, California. 31. CDC Not Liable for Acts of Omissions of DECLARANT or Others. CDC shall in no way be liable for any acts or omissions of DECLARANT, any agent 12 December 20, 2001 Plaza Manor CC&Rs. 122001.doc Attachment No. 5 i 00589 or contractor employed by DECLARANT, or any person furnishing labor and/or materials used in or related to the construction of said improvements. 32. Remedies. a. Contract governed by law of State of California. This Declaration, its performance, and all suits and special proceedings under this Declaration, shall be constituted in accordance with the laws of the State of California and Federal law, to the extent applicable. In any action, special proceeding, or other proceeding that may be brought arising out of, under or because of this Declaration, the laws of the State of California and the United States, to the extent applicable, shall govern to the exclusion of the law of any other forum, without regard to the jurisdiction in which the action or special proceeding may be instituted. b. Standing, equitable remedies; cumulative remedies. DECLARANT expressly agrees and declares that the CDC, or any successor or public agency, shall be the proper party and shall have standing to initiate and pursue any and all actions or proceedings, at law or in equity, to enforce the provisions hereof and/or to recover damages for any default hereunder, notwithstanding the fact that such damages or the detriment arising from such a default may have actually been suffered by some other person or by the public at large. Further, DECLARANT expressly agrees that receivership, injunctive relief and specific performance are proper pre-trial and/or post -trial remedies hereunder, and that, upon any default, and to assure compliance with this Declaration. Nothing in this subparagraph, and no recovery to the CDC, shall restrict or limit the rights or remedies of persons or entities other than the CDC, against DECLARANT in connection with the same or related acts by DECLARANT. The remedies set forth in this Section are cumulative and not mutually exclusive, except the extent that their award is specifically determined to be duplicative by final order of a court of competent jurisdiction. c. Remedies at law for breach of tenant restrictions. In the event of any material default under the applicable terms of . this DECLARATION regarding restrictions on the operation and the transfer of the PROPERTY, the CDC shall be entitled to, in addition to any and all other remedies available at law or in equity: (i) declare the Loan to be all due and repayable; and (ii) recover compensatory damages. If the default in question involves the violation of the affordability and occupancy provisions above, the amount of such compensatory damages shall be the product of multiplying: (A) the number of months that the default in question has continued until the time of trial by (B) the result of subtracting (i) the rents properly chargeable 13 December 20, 2001 Plaza Manor CC&Rs.122001.doc Attachment No. 5 005300 hereunder for the Affordable Unit(s) in question from the amount actually charged. DECLARANT and the CDC agree that it would be extremely difficult or impracticable to ascertain the precise amount of actual damages accruing to the CDC as a result of such a default and that the foregoing formula is a fair and reasonable method of approximating such damages. The CDC shall be entitled to seek and to recover damages in separate actions for successive and separate breaches that may occur. Further, interest shall accrue on the amount of such damages from the date of the breach in question at the rate of seven percent (7%) per annum or the maximum rate than allowed by law, whichever is less. Nothing in this Section shall preclude the award of exemplary damages as allowed by law. d. Expert witness, attorney's fees, and costs. The parties agree that the prevailing party in litigation for the breach and/or interpretation and/or enforcement of the terms of the Loan Agreement shall be entitled to their expert witness fees, if any, as part of their costs of suit, and reasonable attorneys' fees as may be awarded by the court, pursuant to California Code of Civil Procedure ("CCP") Section 1033.5 and any other applicable provisions of California law, including, without limitation, the provisions of CCP Section 998. 33. Mortgagees Protection. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Declaration shall defeat or render invalid or in any way impair the lien or charge of any permitted deed of trust recorded on the PROPERTY provided, however, that any subsequent owner of the PROPERTY shall be bound by the covenants, conditions, restrictions, limitations and provisions of this Declaration, whether such owner's title was acquired by foreclosure, deed in lieu of foreclosure, trustee's sale or otherwise. 34. CDC's Approval of Property Manager. At all times during which these Restrictions are in full force and effect the Property shall be managed by a professional management company, as approved by the CDC, in its reasonable discretion. Further, at all times that these Restrictions are in force and effect, and CDC has served a thirty (30) day written notice of deficiencies in the Property management for the project, whether or not there has previously been a Property Management Company involved with the Project, which deficiencies have not been rectified by the DECLARANT, within the thirty (30) day period, or, if the deficiencies are not curable within thirty (30) days, if no cure has been commenced within thirty (30) days and prosecuted with diligence thereafter, then, CDC shall have the right, in its sole discretion, and upon thirty (30) days written notice: (i) to require the retention of a different professional property management firm to manage the Property; (ii) to approve, in advance and in December 20, 2003 Plaza Manor CC&Rs.122003.doe 14 Attachment No. 5 i 005901 writing, the retention of any such property management firm, including the terms of the contract governing such retention; and (iii) to require DECLARANT to terminate any such property management firm, provided that such termination shall comply with the termination provisions of the management contract in question. DECLARANT shall cooperate with the CDC to effectuate the CDC's rights. 35. CDC Approval of Management Plan. Prior to the funding of the CDC Loan, the DECLARANT shall submit to the CDC a detailed plan for the management of the Project, including the name and qualifications of the Property Manager, including references and experience of the Property Manager in managing projects similar to the Project for the approval of the CDC. The CDC shall approve or reject the Property Manager and Plan within seven (7) days after receipt of the same by the CDC. In the event that the CDC fails to object to the Property Manager and/or the Management Plan, they shall be deemed approved. Each year thereafter on November 15`h, the DECLARANT shall submit a Management Plan for the Project for the following year. The Plan shall include details covering payment of expenses of the Project, physical condition of the Project, reserves for repair and replacement of the components of the Project, Project income and expenses and all other matters reasonably requested by the CDC. The Plan shall also set forth the services that will be provided for the tenants on the Property. Failure of the CDC to approve said Plan shall constitute a material default under the terms of this DECLARATION, 36. Lease Provisions. DECLARANT agrees that it will include in all of its leases and cause its successors in interest to include in all of their leases, those provisions set forth in Addendum to Lease attached hereto, the following provisions: a. Additional Lease Provisions/Annual Income Verification. TENANT agrees to, upon written request from the Landlord or the CDC, certify under penalty of perjury the accuracy of all information provided in connection with the examination or reexamination of annual income of the tenant's household. Further, tenant agrees that the annual income and other eligibility requirements are substantial and material obligations of the tenancy and that the tenant will comply promptly with all requests for information with respect to the tenancy from the landlord and/or the CDC. Further, tenant acknowledges that tenant's failure to provide accurate information regarding such requirements (regardless of whether such inaccuracy is intentional or unintentional) or the refusal to comply with the request for information with respect thereto, shall be deemed a violation of this lease provision, and a material breach of the tenancy and shall constitute cause for immediate termination of the tenancy. Cxember 20, 2001 Plaza Manor CC&Rs.122001.doo 15 Attachment No. 5 005902 b. Term of Lease for Restricted Units. TENANT has been made aware by Landlord that the unit being leased was assisted with Section 8, TCAC/CDLAC, HOME and/ or CHFA funds. A lease must be for a period of not less than one (1) year unless the parties agree by mutual agreement that the term of the lease be less. The LESSEE acknowledges by initialing in the space below that it has been made aware of these provisions. 37. HUD Requirements. During the time the Project is encumbered by a HUD insured deed of Trust or Use Agreement, the following provisions shall be effective: a. Superiority of HUD Provisions. Notwithstanding anything in this Declaration to the contrary, in the event any provision in this Declaration contradicts, modifies, or any in any way changes the terms of the Use Agreement, as amended, encumbering the Project, the terms of the Use Agreement, as amended, shall prevail and govern or if any provision of the Declaration limits the Secretary of Housing and Urban Development, his successors or assign and/or the Federal Housing Commission (Secretary), in his administration of the National Housing Act, as amended, or the regulations made pursuant thereto or the Use Agreement, as amended, this Declaration shall be deemed amended so as to comply with the Act, regulations, or Use Agreement, as amended, (FHA requirements). In the event of a conflict between the TCAC/CDLAC or CHFA requirements and FHA requirements, the conflict shall be resolved by the Secretary. b. Subordination. This Declaration, and the restrictions contained herein, shall be subordinate to all deeds of trust in favor of the United States of America acting by and through the Secretary of Housing and Urban Development ("HUD") and recorded in the Official Records of San Diego County, California, (the "HUD Deed of Trust") against the Property in connection with the Project and the Amended and Restated Use Agreement (the "Use Agreement") executed by and between the DECLARANT and HUD in connection with the Project, and recorded in said Official Records, and subordinate to the CHFA Note and Deed of Trust, the CHFA Regulatory Agreement, and the CHFA Second Deed of Trust, referenced in the CDC Loan Agreement, and notwithstanding anything in this Declaration to the contrary, the provisions of this Declaration shall be subordinate to the HUD Deed of Trust, if any, the HUD Use Agreement and any applicable HUD regulations. In the event of any conflicts between any of the provisions of this Declaration and the provisions of the HUD Deed of Trust, HUD Use Agreement or any applicable HUD regulations or requirements, the HUD Deed of Trust, HUD Use Agreement or HUD December 20, 200I Plus Mawr CC&Rs_ I22001.doc 16 Attachment No. 5 i 005903 regulations shall control. Compliance by DECLARANT with such HUD requirements shall be deemed compliance with this Declaration. In the event of foreclosure under the HUD Deed of Trust, this Declaration and the provisions contained herein shall automatically terminate. 38. DECLARANT's Compliance With Health & Safety Code Section 33436. DECLARANT agrees to include the following nondiscrimination and non -segregation clauses required by Health & Safety Code Section 33436, in all leases, subleases, deeds, contracts, and other agreements affecting the Property, as applicable: (1) In deeds: "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 land." (2) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: 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 leasing, December 20.2001 Plan Martyr CC&Rs.122001.doc 17 Attachment No. 5 005904 subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself, 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, sublessees, subtenants, or vendees in the premises herein leased." Further, pursuant to the provisions of Health & Safety Code Section 33436(c), the DECLARANT agrees that the provisions set forth in subparagraphs (1) and (2) above shall be binding upon and shall obligate the DECLARANT, their subcontractors and their successors and assigns concerning the Project and the Property, if the same is acquired from DECLARANT. 39. Time of the Essence. Time is of the essence of this DECLARATION and of each and every provision hereof. The waiver by CDC of any breach or breaches hereof shall not be deemed, nor shall the same constitute, a waiver of any subsequent breach or breathes. DECLARANT: PLAZA MANOR PRESERVATION, L.P., a California limited partnership GENERAL PARTNERS: Las Palmas Fou By: Ffor ' • 1 onprofit corporation 4 Josh M. Michaels, President [Signatures continued on next page.] 18 December 20.2001 Plea Manor CC&Rs.1220)1.doc Attachment No. 5 005905 Plaza Manor Development Co., LLC, a California limited liability company By: The Nicholas Company, Inc., a Delaware corporation, managing mem By: William A. Witte CDC: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY, a public agency By: George C Waters, Chairman Approved as to Form: DETISCH & CHRISTENSEN By: Charles B. Christensen Special Counsel for the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY December 20, 2041 Plaza Manor CC&Rs.122001.doc 19 Attachment No. 5 005906 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Orange On April 22, 2002 before me, Grenia A. Harbin, Notary Public, personally appeared Joseph M. Michaels, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that, by his 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. ./l — N 11 A a, .. a AA A Air 4Cr"" GRENIA A. HARBIN cV '3011iN' COMM. # 1243253 � tY �!.A Ry NOTARY PUBLIC-CALIFORNIA IX 4 ORANGECOUNTY N ev � +R ,y , My Comm Expires Nov.23, 2003 G/enia A. Harbin, Notary Public Description of Attached Document OPTIONAL DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS (TENANT RESTRICTIONS) Attachment No. 5 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Orange 005907 On April 22, 2002 before me, Grenia A. Harbin, Notary Public, personally appeared William A. Witte, personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that, by his 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. GRENIA A. HARBIN COMM. # 1243253 7/ NOTARY PUBLIC-CALIFORNIA 73 ORANGE COUNTY MyComnt. Expires Nov.23, 2003 G -nia A. Harbin, Notary Public OPTIONAL Description of Attached Document DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS (TENANT RESTRICTIONS) Attachment No. 5 State of California County of San Diego ACKNOWLEDGMENT 005908 On , 2001, before me, 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 "DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (TENANT RESTRICTIONS)" 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 on behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) 22 December 20, 200F Plaza Manor CC&R5.1220oIdoc Attachment No. Exhibit "1" Table of Rent and Income Restrictions Criteria 23 December 20.2001 Plaza Manor CC&Rs.12200i.doc 005909 Attachment No. 5 005910 Exhibit "I" TABLE OF RENT AND INCOME RESTRICTION CRITERIA 1 2 3 4 5 6 MAXIMUM INITIAL RENTS (NOTE: These rents include Declarant's payment of all utilities) UNIT SIZE/UNIT TYPE NO. OF AFFORDABLE UNITS ELIGIBLE TENANTS WHOSE INCOME DOES NOT EXCEED % MEDIAN AREA INCOME BELOW YEARS OF RESTRICTION TYPE OF UNIT [i.e., Section 8, TCAC/ CDLAC, and CHFA and HOME] $468 Efficiency 26 50% 30 Section 8 $468 Efficiency 58 60% 30 Section 8 $521 1 BR/1 BA 17 50% 30 Section 8 $521 1 BR/1 BA 39 60% 30 Section 8 $684 2 BR/1 BA 2 50% 30 HOME $684 2 BR/1 BA 40 50% 30 Section 8 $684 2 BR/1 BA 95 60% 30 Section 8 $748 2 BR/ 1.5 BA 10 50% 30 Section 8 $748 2 BR/1.5 BA 21 60% 30 Section 8 $838 3 BR/2 BA 2 50% 30 HOME **Not Restricted 3 BR/2 BA 2 N/A N/A N/A $838 3 BR/2 BA 18 50% 30 Section 8 $838 3 BR/2 BA 42 60% 30 Section 8 TOTAL 372 , ** Managers' units Attachment No. 5 December 20, 2001 Plaza Manor CC&Rs.122001 Aoc Exhibit "D-1" Rent Restrictions 24 k Attachment No. 5 4 i 0 tr.CritiNf20, 2001 Plaza Manor CC&Rs.122001.da Exhibit "D-2" Utility Restrictions 25 Attachment No. 5 t. th 4 SUMMARY OF CRL RENT RESTRICTIONS, 2001 CITY OF NATIONAL CITY ESTRICTIONS (1 Family Size Very Low Income At or Below 50% AM Low Income Between 51% to 80% AMI Moderate Income Between 81% to 120% AMI 1 Person $19,900 $31,850 $47,800 2 Persons $22,750 $36,400 $54,600 3 Persons $25,600 $40,950 $61,450 4 Persons $28,450 $45,500 $68,300 5 Persons $30,750 $49,150 $73,750 (1) 2001 HUD income limits. TONS i'2 Unit Size Very Low Income 30% of 50% AMI) Low income (30% of 60% AMI) Moderate income (30% of 110% AN) Studio $440 $539 $1,037 One Bedroom $511 $625 $1,193 Two Bedroom $559 $687 $1,327 Three Bedroom $620 $763 $1,474 Four Bedroom $651 $805 $1,573 (2) California Redevelopment Law (CRL) rents less appropriate Community Development Commission of the City of National City utility allowances. Prepared by: Keyser Marston Associates, Inc. Filename: i:Library Datalresidential\Exhibit D-1.xls112120/01; ema