HomeMy WebLinkAboutReso 220-07 Rev. Resale Restriction Agmt
RESOLUTION NO 220 - 07
A RESOl.lUTION O]F THE CITY COUNCIL
OF THE CITY OF DUBLIN
**** **** * ***"''''* *** * *** * **'" *"'* **** ***
RESOLUTION OF THE C][TY COUNCIL OIB' THE C][TY OF DUBL][N AJPJPROVING
REVISIONS TO THE FORM RESALE RES'fR][CTION AGREEMENT AND OPTION TO
PURCHASE
WHEREAS, the CIty of DublIn'S (' CIty") IncluslOnary Zomng Ordmance (Dublm MunICIpal
Code, Chapter 8 68) (' IZO") reqUires developers to construct mcIuslOnary unIts affordable to very low-,
low- and moderate-mcome households and reqUires purchasers of mclusIOnary unIts to execute and record
a form Resale RestnctIOn Agreement With OptIOn to Purchase ("Resale RestnctIOn Agreement' ) , and
WHEREAS, the City CounCil approved the current form Resale RestnctIon Agreement by
resolutIon on Apn118, 2006, and
WHEREAS, Staff has proposed certam revISIons to the Resale RestnctIon Agreement attached
hereto as Exhibit A In order to make the Agreement conSlstent Wlth the Federal Home Loan Mortgage
CorporatIOn S ("Freddie Mac") and the Federal NatIOnal Mortgage ASSOCIatIOn's ("Fanme Mae") recently
revised gUldehnes so that affordable home loan products Wlll contInue to be available to purchasers of
mclusIOnary unltS
NOW, THEREFORE, the Clty CounCIl of the CIty of DublIn does hereby approve the revIsed
Resale RestnctlOn Agreement substantIally m the form attached hereto as Exhlblt A and authonzes the
CIty Manager to make non-matenal changes to the same
lPASSEID, APPROVED ANID AIDOlPl'EID trus 18th day of December, 2007, by the followmg
vote
AYES COlD.Dcdmembers HddenIDJr'and!, Oravetz, SIDrantn, Scholz, and! Mayor Lockha.rt
NOES None
ABSENT None
ABS]' AnN None
ATTEST
iLl ~~~
Intenm CItY Clerk
a~51
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
CITY OF DUBLIN,
100 Civic Plaza
Dublin, California 94568
Attn: City Clerk
To be recorded without fee.
(Gov. Code, fifi 6103 and 27383.)
(Space Above This Line For Recorder's Use Only)
RESALE RESTRICTION AGREEMENT
AND OPTION TO PURCHASE
Owner:
Property Address:
Dublin, California
Name of Development:
This RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE
("Agreement") is entered into by and between the CITY OF DUBLIN, a California municipal
corporation (the "City") and ("Owner")
regarding certain improved real property which is more particularly described in Exhibit A
attached hereto and incorporated herein and commonly known as
, Dublin, CA, (the "Property") effective as of , 20_
("Effective Date"). City and Owner are hereinafter collectively referred to as the "Parties."
RECITALS
A. The City has Inclusionary Zoning Regulations (Dublin Municipal Code Chapter
8.68) (the "Regulations") that require developers of rental and ownership housing to
construct within their projects units that are affordable to very low-, low-, and moderate-
income households ("the Program"). To further its goal of creating affordable home
ownership opportunities for very low-, low-, and moderate-income persons and families, the
City has initiated a program for the sale of some homes at a price below their market rate
("Program"). Pursuant to the Program, developers of housing developments agree to set
aside a certain number of units for purchase or rent, as applicable, by very low-, low-, and
moderate-income persons and families, as defined herein.
B. Owner is an eligible [very low-, low- or moderate-]income purchaser under the
Program, intends to live in the Property as an owner occupant, and agrees to maintain the
Property as Owner's principal residence.
1030393
-1-
Proposed Revisions 11/14/07
Exhibit A
3~51
c. In order to maintain and preserve the Property as housing affordable to eligible
[very low-, low-, or moderate-]income purchasers, it is necessary to restrict the use and
resale of the Property through imposition of the occupancy and resale restrictions set forth
herein. These restrictions are intended to prevent initial and subsequent purchasers from
using the Property for purposes incompatible with the Program and realizing unwarranted
gains from sales of the Property at unrestricted prices. The terms and conditions of this
Agreement are intended to provide the necessary occupancy and resale restrictions to
ensure that the Property is used, maintained, and preserved as housing affordable to
eligible [very low-, low-, or moderate-]income purchasers. To further serve the purposes of
the Program, it is necessary that the City be granted an option to purchase the property so
that the property may be resold by the City to an eligible household.
D. The Property constitutes a valuable community resource by providing decent,
safe, and sanitary housing to persons and families of [very low, low, or moderate] income
who otherwise would be unable to afford such housing. To protect and preserve this
resource it is necessary, proper, and in the publiC interest for the City to administer
occupancy and resale controls consistent with the Program and the Regulations by means
of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the substantial economic benefits inuring to
Owner and the public purposes to be achieved under the Program, Owner and City hereby
agree as follows:
1. Definitions.
a. "Affordable Unit Cost" shall be as defined in the Regulations, as follows:
"Owner-occupied units are deemed affordable units if the sales price results
in annual housing expenses that do not exceed 35% of income level for very-Iow-,
low-, and moderate-income households, adjusted for household size and as defined
below. For very low-income owner occupied units, the unit shall be deemed an
affordable unit if the sales price results in annual housing expenses that do not
exceed 35% of the maximum in the very low-income level, adjusted for household
size and as defined below."
b. "Area [Very Low, Low, or Moderate] Income for Alameda County" means
those income and eligibility levels determined, updated, and published each year by the
California Department of Housing and Community Development, based on Alameda County
median income levels, adjusted for household size.
c. "Persons and families of [very low, low, or moderate] income" means
persons and families whose income does not exceed [fifty percent (50%); eighty percent
(80%); or one hundred twenty percent (120%)] of the Area Median Income for Alameda
County, as adjusted for household size.
1030393
-2-
Proposed Revisions 11/14/07
4'16/
d. Persons and families meeting the definition set forth in Paragraph 1.b
above shall be referred to as "Eligible Households."
2. Program Requirements.
a. Affordability Restri'ctions. Owner hereby covenants and agrees that
during the term of this Agreement all of the requirements and restrictions of this Agreement
shall apply, and the Property shall be sold or otherwise transferred only pursuant to the
terms and conditions of this Agreement and only to (i) Eligible Households at a price not to
exceed the Adjusted Resale Price, as defined in Paragraph 5, (ii) the City pursuant to
Paragraph 3, at a price not to exceed the Adjusted Resale Price, as defined in Paragraph 5,
or (iii) a permitted transferee pursuant to Paragraph 9.
b. Disclosure. DURING THE TERM OF THIS AGREEMENT THERE
SHALL BE NO SALE OR OTHER TRANSFER OF THE PROPERTY WITHOUT THE
WRITTEN CERTIFICATION BY THE CITY THAT THE TRANSFEREE QUALIFIES AS AN
ELIGIBLE HOUSEHOLD AND THAT THE PROPERTY IS BEING TRANSFERRED AT A
PRICE NOT TO EXCEED THE ADJUSTED RESALE PRICE, WHICH IS CAPPED AT THE
AFFORDABLE UNIT COST AS DEFINED IN PARAGRAPH 1.a. ANY SALE OR OTHER
TRANSFER OF THE PROPERTY IN VIOLATION OF THIS COVENANT SHALL BE
VOIDABLE BY THE CITY.
c. Principal Residence Requirement. OWNER COVENANTS AND
AGREES THAT HE/SHE/THEY SHALL OCCUPY THE PROPERTY AS HIS/HERfTHEIR
PRINCIPAL RESIDENCE FOR THE DURATION OF HIS/HERfTHEIR OWNERSHIP AND
SHALL NOT RENT OR LEASE THE PROPERTY OR PORTION THEREOF DURING THE
TERM OF THIS AGREEMENT WITHOUT PRIOR WRITTEN APPROVAL OF CITY.
Without limiting the generality of the foregoing, any absence from the Property by Owner for
a period of ninety (90) or more days shall be deemed an abandonment of the Property as
the principal residence of Owner in violation of the conditions of this Paragraph. Upon
request by the City made from time to time, the Owner of the Property shall submit an
affidavit to the City certifying that the Property is the Owner's principal residence and
proVide such documents and other evidence as may be requested to verify Owner's
compliance with this requirement. Abandonment of the Property shall constitute an Option
Event (as defined in Paragraph 3.c below) and shall entitle the City to exercise its Option to
purchase the Property.
3. Option to Purchase.
a. Grant of Option to Purchase. Owner hereby grants to the City an option
("Option") to purchase all of Owner's right, title and interest in and to the Property upon the
occurrence of an Option Event (defined in Paragraph 3.c below), subject to the terms and
conditions contained herein.
b. Assignment of the Option. The City may assign the Option to another
government entity, a non-profit affordable housing provider or a person or family that
qualifies as an Eligible Household. The City's assignment of the Option shall not extend
any time limits contained herein with respect to the exercise period of the Option or the
period within which the Property must be purchased.
1030393
-3-
Proposed Revisions 11/14/07
5151
c. Events Giving Rise to Right to Exercise Option. The City shall have
the right to exercise its Option upon the occurrence of any of the following events (each, an
"Option Event"):
i. Receipt of a Notice of Intent to Transfer (defined in Paragraph
3.d.i below);
ii. Any actual, attempted or pending sale, conveyance, transfer,
lease or other attempted disposition of the Property or of any estate or interest therein,
except as provided in Paragraph 10 below;
iii. Any actual, attempted or pending encumbrance of the Property,
including without limitation by way of mortgage or deed of trust, or by judgment, mechanics,
tax or other lien, except as provided in Paragraph 9 below;
iv. Recordation of a notice of default and/or notice of sale pursuant
to California Civil Code section 2924 (or successor provisions) under any deed of trust or
mortgage with a power of sale encumbering the Property;
v. Commencement of a judicial foreclosure proceeding regarding
the Property;
vi. Execution by Owner of any deed in lieu of foreclosure
transferring ownership of the Property;
vii. Commencement of a proceeding or action in bankruptcy,
whether voluntary or involuntary, pursuant to Title 11 of the United States Code or other
bankruptcy statute, or any other insolvency, reorganization, arrangement, assignment for
the benefit of creditors, receivership or trusteeship, concerning the Owner; or
viii. Any violation by Owner of any provision of this Agreement
including, without limitation, the conditions set forth in Paragraph 2 above.
d. Method of Exercising the Option.
i. Notice of Intent to Transfer. If Owner desires to sell, convey,
transfer (other than pursuant to Paragraph 9 below), lease, encumber (other than pursuant
to Paragraph 10 below) or otherwise dispose of the Property or of any estate or interest
therein, no less than 45 days prior to the date of such proposed sale, conveyance, transfer,
lease, encumbrance or disposition, Owner shall notify City in writing to that effect (the
"Notice of Intent to Transfer"). The Notice of Intent to Transfer shall be in substantially the
form attached hereto as Exhibit B. In the case of a proposed sale of the Property to an
identified prospective purchaser, the Owner shall submit to the City, together with the Notice
of Intent to Transfer, a copy of the prospective purchaser's income certification, a list of all
assets owned by the prospective purchaser, and other financial information reasonably
requested by City, in a form approved by the City, along with the income certification to be
proVided to any lender making a loan to the prospective purchaser. The City may require
documentation evidencing and supporting the income and other financial information
contained in the certifications.
1030393
-4-
Proposed Revisions 11/14/07
~~~ 61
ii. Notice of Exercise. Upon the occurrence of any Option Event,
the City may exercise its Option by delivering notice, pursuant to Paragraph 17 and within
the time period specified in Paragraph 3.d.iv, to Owner of City's intent to exercise such
Option pursuant to the terms of this Agreement ("Notice of Exercise"). The Notice of
Exercise may be in the form attached hereto and incorporated herein as Exhibit C, or in
such other form as the City may from time to time adopt. If the Option Event relates to the
potential foreclosure of a mortgage under Paragraphs 3.c.iv, 3.c.v, or 3.c.vi, then the City
shall also deliver the Notice of Exercise to the mortgagee or beneficiary under such
mortgage, at such mortgagee's or beneficiary's address of record in the Office of the
Recorder of Alameda County.
iii. Notice of Consent to Transfer. If the City does not exercise
the Option, it may give its consent to the occurrence of the Option Event ("Consent to
Transfer"). If the Option Event involves a proposed sale of the Property to a prospective
purchaser, the City's consent shall be conditioned upon (i) the proposed purchaser's
qualification as an Eligible Household; (ii) the sale of the Property at a price not to exceed
the Adjusted Resale Price; (iii) the proposed purchaser's execution of a Disclosure
Statement in the form attached hereto as Exhibit F or such other form or forms as may be
promulgated by the City; (iv) the proposed purchaser's assumption of Owner's duties and
obligations under this Agreement pursuant to a written assumption agreement in a form
acceptable to City, or execution of an agreement substantially similar to this Agreement,
within thirty (30) days after the Consent to Transfer has been delivered to Owner and
recordation of such assumption agreement or substitute agreement; and (v) the proposed
purchaser's execution of a Performance Deed of Trust in the form attached hereto as
Exhibit G. SELLER SHALL PAY REAL ESTATE COMMISSIONS, IF ANY, WHICH SHALL
NOT TO EXCEED 6% OF THE ACTUAL SALES PRICE. If the prospective purchaser (i)
fails to qualify as an Eligible Household, (ii) fails to execute and deliver the Disclosure
Statement to the City, (iji) fails to execute and deliver to the City an assumption agreement
or an agreement substantially similar to this Agreement within such thirty (30) day period, or
(iv) fails to execute and deliver to the City a Performance Deed of Trust in the form attached
hereto as Exhibit G, then the Consent to Transfer shall expire and the City may, at its
option, either notify Owner of the disqualification, thereby entitling Owner to locate another
purchaser who qualifies as Eligible Household, or exercise the Option, as if no Consent to
Transfer had been delivered.
iv. Time Period for Notice. The City shall deliver a Consent to
Transfer, if applicable, not later than thirty (30) days after the date that it receives
notification of an Option Event. The City shall deliver a Notice of Exercise, if applicable, on
or before the date which is the later to occur of the following: (i) thirty (30) days after the
date that the City receives notification of an Option Event or (ji) fifteen (15) days after a
Consent to Transfer has expired. If the City delivers a Notice of Exercise to Owner upon
occurrence of an Option Event described in Paragraphs 3.c.iv, 3.c.v, or 3.c.vi, the City or its
assignee shall close escrow for the purchase of the Property no later than 90 days after the
date the City receives notification of such Option Event. For purposes of computing
commencement of the delivery periods, the City shall be deemed to have received
notification of an Option Event on the date of delivery of a Notice of Intent to Transfer,
pursuant to the terms of Paragraph 17 below or on the date it actually receives notice of
default, summons and complaint or other pleading, or other writing specifically stating that
an Option Event has occurred. The City shall have no obligation to deliver a Notice of
1030393
-5-
Proposed Revisions 11/14/07
'1~ 51
Exercise or Consent to Transfer, and the applicable time period for exercise of the Option
shall not commence to run, unless and until the City has received notification of an Option
Event in the manner specified in this subparagraph. If there is a stay or injunction imposed
by court order precluding the City from delivering its Consent to Transfer or Notice of
Exercise within the applicable time period, then the running of such period shall cease until
such time as the stay is lifted or the injunction is dissolved and the City has been given
written notice thereof, at which time the period for delivery of a Consent to Transfer or
Notice of Exercise shall again begin to run.
v. Notice of Abandonment. If the City fails to deliver a Notice of
Exercise or Consent to Transfer within the time periods set forth in Paragraph 3.d.iv, upon
request by Owner, the City shall cause to be filed for recordation in the Office of the
Recorder of Alameda County, a notice of abandonment, which shall declare that the
provisions of the Option are no longer applicable to the Property. Unless Owner requests
recordation of notice of abandonment within 30 days of the City's failure to deliver Notice of
Exercise or Consent to Transfer, the City shall have no obligation to record the notice of
abandonment. Upon recordation of a notice of abandonment, the Option shall terminate
and have no further force and effect. If the City fails to record a notice of abandonment, the
sole remedy of Owner shall be to obtain a judicial order instructing prompt recordation of
such a notice.
vi. Right to Reinstatement. If the Option Event is the recordation
of a notice of default, then the City shall be deemed to be Owner's successor in interest
under California Civil Code Section 2924(c) (or successor section) solely for purposes of
reinstatement of any mortgage on the Property that has led to the recordation of the notice
of default. As Owner's deemed successor in interest, the City shall be entitled to pay all
amounts of principal, interest, taxes, assessments, homeowners' association fees,
insurance premiums, advances, costs, attorneys' fees and expenses required to cure the
default. If the City exercises the Option, then any and all amounts paid by the City pursuant
to this Paragraph shall be treated as Adjustments to the Base Resale Price for the Property,
as defined in Paragraph 5 below.
vii. Inspection of Property. After receiving a Notice of Intent to
transfer or delivering a Notice of Exercise, the City shall be entitled to inspect the Property
one or more times prior to the close of escrow to determine the amount of any Adjustments
to the Base Resale Price. Before inspecting the Property, the City shall give Owner not less
than forty-eight (48) hours written notice of the date, time and expected duration of the
inspection. The inspection shall be conducted between the hours of 9:00 a.m. and 5:00
p.m., Monday through Friday, excluding court holidays, unless the parties mutually agree in
writing to another date and time. Owner shall make the Property available for inspection on
the date and at the time specified in the City's request for inspection.
viii. Escrow. Promptly after delivering a Notice of Exercise, the
City shall open an escrow account for its purchase of the Property. Close of escrow shall
take place on such date which is the later to occur of the following, (a) sixty (60) days after a
Notice of Exercise has been delivered, or (b) ten (10) days after Owner has performed all
acts and executed all documents required for close of escrow; provided however, if the City
exercises the Option upon the occurrence of an Option Event described in Paragraphs
3.c.iv, 3.c.v, or 3.c.vi, close of escrow shall take place no later than 90 days after the date
1030393
-6-
Proposed Revisions 11/14/07
9~51
the City receives notification of such Option Event. Prior to the close of escrow, the City
shall deposit into escrow with a title company of City's choosing, the Adjusted Resale Price
as defined in Paragraph 5 below and all escrow fees and closing costs to be paid by City.
Commissions (not to exceed 6% of the actual sales price), closing costs and title insurance
shall be paid pursuant to the custom and practice in the County of Alameda at the time of
the opening of escrow, or as may otherwise be provided by mutual agreement. Owner
agrees to perform all acts and execute all documents reasonably necessary to effectuate
the close of escrow and transfer of the Property to the City.
ix. Proceeds of Escrow; Removal of Exceptions to Title. Prior
to close of escrow, Owner shall cause the removal of all exceptions to title to the Property
that were recorded after the Effective Date with the exception of (i) taxes for the fiscal year
in which the escrow for this transaction closes, which taxes shall be prorated as between
Owner and City as of the date of close of escrow; (ii) quasi-public utility, publiC alley, public
street easements, and rights of way of record, and (iii) such other liens, encumbrances,
reservations and restrictions as may be approved in writing by City ("Permitted
Exceptions").
The purchase price deposited into escrow by the City shall be applied first to the
payment of any and all Permitted Encumbrances (as defined in Paragraph 10) recorded
against the Property in order of lien priority, and thereafter to the payment of Owner's share
of escrow fees and closing costs. Any amounts remaining after the purchase price has
been so applied, if any, shall be paid to Owner upon the close of escrow. If the purchase
price is insufficient to satisfy all liens and encumbrances recorded against the Property, the
Owner shall deposit into escrow such additional sums as may be required to remove said
liens and encumbrances. In the event that the City agrees to proceed with close of escrow
prior to the date that Owner has caused all exceptions to title recorded after the Effective
Date other than Permitted Exceptions to be removed, then Owner shall indemnify, defend
and hold City harmless from any and all costs expenses or liabilities (including attorneys'
fees) incurred or suffered by City that relate to such exceptions and their removal as
exceptions to title to the Property.
4. Base Resale Price. Prior to adjustment pursuant to Paragraph 5 the base
resale price ("Base Resale Price") of the Property shall be the lowest of:
a. Median Income. The original price ("Base Price") paid by Owner for
acquisition of the Property pursuant to the Program, increased (but not decreased) by an
amount, if any, equal to the Base Price multiplied by the percentage increase in the median
household income ("Median Income") for Alameda County pUblished by the California
Department of Housing and Community Development, Division of Housing Policy
Development, between the Effective Date and the date that the City receives notification of
an Option Event; or
b. Fair Market Value. The fair market value of the Property as determined
by an appraiser selected and paid for by Owner and approved in writing by the City.
To compute the Base Resale Price, the City may use the Base Resale Price Worksheet
attached as Exhibit D hereto, or such other form as the City may from time to time adopt.
1030393
-7-
Proposed Revisions 11/14/07
q'f .6/
5. Adjustments to Base Resale Price. Subject to the Affordable Unit Cost
restriction described in subparagraph (d) below, the Base Resale Price shall be increased
or decreased, as applicable, by the following adjustment factors ("Adjustment"):
a. Capital Improvements. An increase for capital improvements made to
the Property, but only if the amount of such improvements has been previously approved in
writing by the City after Owner has submitted original written documentation of the cost to
the City for verification. The amount of the Adjustment shall equal the original cost of any
such capital improvements.
b. Damages. A decrease by the amount necessary to repair damage to the
Property, if any, and to place the Property into saleable condition as reasonably determined
by the City upon City's exercise of its Option hereunder, including, without limitation,
amounts attributed to cleaning; painting; replacing worn carpeting and draperies; making
necessary structural, mechanical, electrical and plumbing repairs; and repairing or replacing
built-in appliances and fixtures. Owner hereby covenants to, at Owner's expense, maintain
the Property in the same condition as in existence on the date of City's Notice of Exercise,
reasonable wear and tear excepted.
c. Advances by the City. A decrease in an amount equal to the sum of all
costs advanced by the City for the payment of mortgages, taxes, assessments, insurance
premiums, homeowner's association fees and/or associated late fees, costs, penalties,
interest, attorneys' fees, pest inspections, resale inspections and other expenses related to
the Property, which Owner has failed to payor has permitted to become delinquent.
d. Adjusted Resale Price Not to Exceed Affordable Unit Cost. The Base
Resale Price as adjusted, is hereinafter referred to as the "Adjusted Resale Price."
Notwithstanding any other provision hereof to the contrary, in no event shall the Adjusted
Resale Price exceed the Affordable Unit Cost.
6. Priority and Effectiveness of the Option.
a. Recordation. This Agreement shall be recorded in the Office of the
Recorder of the County of Alameda on or as soon as practicable after the Effective Date.
The Option shall have priority over any subsequent sale, conveyance, transfer, lease or
other disposition or encumbrance of the Property, or of any estate or interest therein, and in
the event of exercise of the Option by City, the City shall take the Property subject only to
Permitted Exceptions. Except as otherwise provided in Paragraph 7.a, the exercise of the
Option by the City at any time and from time to time shall not extinguish the Option or cause
a merger of the Option into any estate or other interest in the Property, and the Option shall
continue to exist and be effective with respect to the Property against any and all
subsequent owners in accordance with the terms and conditions hereof.
b. Request for Notice of Default. The City shall file a Request for Notice of
Default for recordation in the Office of the Recorder of the County of Alameda promptly
upon execution of this Agreement (see Exhibit E).
c. Subordination. The City agrees that in order to assist qualified
purchasers to secure purch_ase money financing for the acquisition of the Property, the City
1030393
-8-
Proposed Revisions 11/14/07
10 i 5/
will enter into a subordination agreement with a senior purchase money lender to
subordinate this Agreement under such terms as the City and the senior purchase money
lender shall negotiate.
7. Survival of Option Upon Transfer.
a. In General. The City's right to exercise the Option shall survive any
transfer of the Property by Owner. Each transferee, assignee or purchaser of the Property
during the term hereof shall be required to execute an agreement substantially in the form
of this Agreement, provided that the term of any such agreement shall be for the duration of
the term hereof as of the date of any such transfer, assignment or sale. The Option may be
exercised against the Property throughout the term hereof, regardless of whether the
Property is owned, possessed or occupied by Owner or any successor, transferee,
assignee, heir, executor, or administrator of Owner, regardless of household income (if
applicable) including a debtor-in-possession, debtor or trustee pursuant to Title 11 of the
United States Code. Notwithstanding the foregoing, the Option shall not survive (i) the sale
and transfer of the Property to a third party purchaser pursuant to a judicial or non-judicial
foreclosure or a deed-in-Iieu of foreclosure under a power of sale contained in a mortgage
or deed of trust held by an institutional lender, or (ii) the recording of an instrument
conveying Owner's interest in the Property to the City, or its assignee, provided the
conveyance is in accordance with the terms of this Agreement.
b. HUD Insured Mortgage. If Owner has acquired the Property by a
mortgage insured by the Secretary of the United States Department of Housing and Urban
Development, and a notice of default has been recorded pursuant to California Civil Code
Section 2924 (or successor provisions), then this Option shall automatically terminate if title
to the Property is transferred by foreclosure or deed-in-lieu of foreclosure, or if the insured
mortgage is assigned to the Secretary.
8. Voidable Transfers. As long as the Option has not been abandoned pursuant
to Paragraph 3.d.v, any actual or attempted sale, conveyance, transfer or other disposition
of the Property, or of any estate or interest therein, in violation of the terms and conditions
of this Agreement, shall be voidable at the election of the City.
9. Permitted Transfers. Provided that the transferee assumes, within 30 days of a
written request by the City, all of Owner's duties and obligations under this Agreement
pursuant to a written assumption agreement in a form acceptable to City, or at City's
election, execution of an agreement substantially similar to this Agreement, the following
transfers ("Permitted Transfers") of title to the Property, or of any estate or interest therein,
shall not be subject to the City's prior approval, shall not trigger the exercise of the Option,
and shall not be considered Option Events: (a) a good-faith transfer by gift, devise or
inheritance to Owner's spouse or issue; (b) a taking of title by a surviving joint tenant; (c) a
court-ordered transfer of title to a spouse as part of a divorce or dissolution proceeding; (d)
a transfer by Owner into an inter vivos trust in which the Owner is a beneficiary and the
Owner continues to occupy the property as his/her primary residence; (e) an acquisition of
title, or of any interest therein, in conjunction with marriage; or (f) any good faith transfer to
an Eligible Household. Notwithstanding any Permitted Transfer, the Option shall remain
effective with respect to the Property for the duration of the term hereof.
1030393
-9-
Proposed Revisions 11/14/07
1/ i !if
10. Permitted Encumbrances. This Option shall not become exercisable as the
result of Owner's encumbering the Property (a) for the purpose of securing financing to
purchase the Property pursuant to the Program, (b) to refinance indebtedness incurred to
purchase the Property pursuant to the Program, provided that prior to refinancing the
Property Owner shall obtain City's approval of the refinancing pursuant to section 11 below,
which shall not be unreasonably withheld, or (c) to make necessary repairs to the Property
in an amount approved by City pursuant to Paragraph 5a ("Permitted Encumbrances"). The
maximum aggregate amount of such encumbrances outstanding at any time (the "Permitted
Encumbrance Amount") shall not exceed an amount equal to one-hundred percent (100%)
of the Base Resale Price calculated as provided in Paragraph 4. The Permitted
Encumbrance Amount shall be calculated as if the City had received notification of an
Option Event on the earlier of (a) the date on which the deed of trust or mortgage securing
the indebtedness is filed for record in the Office of the Recorder of the County of Alameda,
or (b) the date the City receives Notice of Intent to Transfer pursuant to Paragraph 3.d.i
above. Owner hereby covenants and agrees that he/she/they shall use his/her/their best
efforts to ensure that any deed of trust or other agreement encumbering the property shall
include provisions providing for notice to be delivered to City of any default thereunder and
for City's right to cure such default at City's election.
11. Refinancing; Junior Loans.
a. Initial Financing. Any prepayment and refinance of any financing used
to purchase the Property ("the Initial Financing") shall not be permitted unless expressly
approved by the City in writing, and the City may approve such refinancing only if all of the
following conditions are met:
i. the refinance reduces Owner's monthly payments of principal
and interest on the Initial Financing or shall be used to finance capital improvements
preapproved by the City ("Eligible Capital Improvements");
ii. the refinance does not cause the principal amount of all debt
secured by the Property to exceed the then outstanding balance (plus refinancing and
closing costs) of the Initial Improvements plus the cost of any Eligible Capital Improvements
that shall be made by Owner;
iii. the refinance does not result in Owner receiving any cash from
the refinance other than for Eligible Capital Improvements permitted pursuant to Paragraphs
11.a.i and 11.a.ii;
iv. the refinance does not cause the Property's loan to value ratio
(calculated by comparing the total debt secured by the Property to the Adjusted Resale
Price of the Home) to exceed the loan to value ratio for the Property at the time of initial
purchase by the Owner (calculated by comparing the total debt secured by the Property to
the Purchase Price paid by the Owner).
v. the total outstanding balance of principal and any accrued
interest on all loans secured by the Property does not exceed the Adjusted Resale Price,
calculated by the City pursuant to Paragraph 5 of this Agreement.
1030393
-10-
Proposed Revisions 11/14/07
)~ ~bl
b. Junior Loans. Mortgage loans or equity lines of credit junior in lien
priority to the Performance Deed of Trust are not permitted, except as when expressly
approved by the City in writing. The City shall only approve junior mortgage loans or equity
lines of credit as follows:
i. the loan or equity line of credit does not does not cause the
Property's loan to value ratio (calculated by comparing the total debt secured by the
Property to the Adjusted Resale Price of the Property) to exceed the loan to value ratio for
the Property at the time of initial purchase by the Owner (calculated by comparing the total
debt secured by the Property to the purchase paid by the Owner);
ii. the proceeds of such loan or equity line of credit are used only
for Eligible Capital Improvements; and
iii. the total outstanding balance of principal and any accrued
interest on all loans secured by the Property does not exceed the Adjusted Resale Price,
calculated by the City pursuant to Paragraph 5 of this Agreement.
c. Eligible Capital Improvements. In the event (i) the Owner refinances
the Initial Financing in accordance with Paragraph 11.a, or (ii) the Owner borrows a junior
loan or takes an equity line of credit in accordance with Paragraph 11.b, and the funds from
such refinance, loan, or line of credit shall be used for Eligible Capital Improvements, Owner
shall provide evidence to City, in a form acceptable to City in its sole and absolute
discretion, that any amount of funds received by Owner for such Eligible Capital
Improvements shall be and are used for the construction of such Eligible Capital
Improvements.
d. Affordable Housing Cost; Subordination. The City and the Owner
agree that the requirements of this Paragraph 11 are necessary to ensure the continued
affordability of the Property to Owner and to minimize the risk of loss of the Property by
Owner through default and foreclosure of mortgage loans. Owner further acknowledges
that violation of the provisions of this Paragraph 11 shall constitute a Default under this
Agreement. In no case shall this Agreement and the Performance Deed of Trust be in
lower than third lien position on the Property. Any subordination agreement to be executed
by City shall include notice and cure rights for City regarding any defaults in the mortgage to
which the City is subordinating.
12. Obligation of Owner After Option Abandonment. If the City records a notice
of abandonment of the Option, then the Property may be sold by Owner to a third party
without restriction as to price; however, upon such sale, Owner shall pay to City an amount
("City's Share") equal to twenty-five percent (25%) of the difference between (a) the actual
sales price net of reasonable and customary real estate commissions paid (such
commissions not to exceed six percent (6%) of the actual sales price), and (b) the Adjusted
Resale Price. The City's Share shall be paid to the City concurrently with close of escrow
on the sale of the Property, or upon receipt by Owner of the sale price for the Property,
whichever shall first occur.
13. Limits on Liability. In no event shall the City become liable or obligated in any
manner to Owner by reason of the assignment of this Agreement or the Option, nor shall
1030393
-11-
Proposed Revisions 11/14/07
/6 ~ ,5)
City be in any way liable or obligated to Owner for any failure of the City's assignee to
consummate a purchase of the Property or to comply with the terms of this Agreement or
the Option, or any escrow instructions or agreement for the purchase of the Property.
14. Insurance Proceeds and Condemnation Award. In the event the Property is
destroyed and insurance proceeds are distributed to Owner instead of being used to rebuild
the Property, or, in the event of condemnation, if the proceeds thereof are distributed to
Owner, any surplus of proceeds remaining after payment of the senior liens and
encumbrances on the Property shall be distributed as follows: that portion of the surplus up
to, but not to exceed, the net amount Owner would have received pursuant to Paragraph
3.d.ix had the City exercised its Option on the date of the destruction of condemnation
valuation date shall be distributed to Owner, and the balance of such surplus, if any, shall
be distributed to the City.
15. Effective Date. The rights and obligations of the City and Owner set forth in
this Agreement shall be effective as of the Effective Date.
16. Term of Agreement and Option. The restrictions contained herein and the
City's option to purchase the Property shall continue for a period of fifty-five (55) years
commencing on the Effective Date. Notwithstanding anything to the contrary in the
foregoing, the Agreement shall remain in effect until the first transfer on or after the
termination of the restrictions and option to purchase pursuant to this Paragraph. Upon
such sale, Owner shall pay to City an amount ("City's Share") equal to twenty-five percent
(25%) of the difference between (a) the actual sales price net of reasonable and customary
real estate commissions paid (such commissions not to exceed six percent (6%) of the
actual sales price), and (b) the Adjusted Resale Price on the date of the termination of the
restrictions and option to purchase pursuant to this Paragraph. The City's Share shall be
paid to the City concurrently with close of escrow on the sale of the Property, or upon
receipt by Owner of the sale price for the Property, whichever shall first occur. Following
completion of a sale in compliance with this provision, this Agreement shall terminate.
17. Notices. Except as otherwise specified in this Agreement, all notices to be sent
pursuant to this Agreement shall be made in writing, and sent to the Parties at their
respective addresses specified below or to such other address as a Party may designate by
written notice delivered to the other Party in accordance with this Section. All such notices
shall be sent by:
a. personal delivery, in which case notice shall be deemed delivered upon
receipt;
b. certified or registered mail, return receipt requested, in which case notice
shall be deemed delivered two (2) business days after deposit, postage prepaid in the
United States mail;
c. nationally recognized overnight courier, in which case notice shall be
deemed delivered one (1) day after deposit with such courier; or
1030393
-12-
Proposed Revisions 11/14/07
)Lf ~ 51
d. facsimile transmission, in which case notice shall be deemed delivered on
transmittal, provided that a transmission report is generated reflecting the accurate
transmission thereof.
Owner:
City of Dublin,
100 Civic Plaza
Dublin, California 94568
Attn: City Manager
At the address of the Property
City:
18. Remedies Upon Breach.
a. Specific Performance. Owner acknowledges that any breach in the
performance of its obligations under this Agreement shall cause irreparable harm to the
City. Owner agrees that the City is entitled to equitable relief in the form of specific
performance upon its exercise of the Option, and that an award of damages shall not be
adequate to compensate the City for Owner's failure to perform according to the terms of
this Agreement.
b. Other Remedies. City shall have all of the remedies provided for at law
or equity.
19. General Provisions.
a. Attorneys' Fees. If either party initiates legal proceedings to interpret or
enforce its rights under this Agreement, the prevailing party in such action shall be entitled
to an award of reasonable attorneys' fees and costs in additions to any other recovery to
which it is entitled under this Agreement.
b. No Joint Venture; No Third-Party Beneficiary. No joint venture or other
partnership exists or is created between the Parties by virtue of this Agreement. Except as
expressly stated herein, this Agreement does not benefit any third party.
c. Successors; Assignment. This Agreement shall inure to the benefit of
and shall be binding upon the Parties to this Agreement and their respective heirs,
executors, administrators, successors and assigns. City shall have the right to assign all of
its rights and obligations under this Agreement without the consent of Owner.
d. Entire Agreement; Amendment. This Agreement constitutes the entire
agreement of the Parties with respect to the subject matter hereof, and supersedes any and
all other prior negotiations, correspondence, understandings and agreements with respect
thereto. There are no representations, promises, agreements or other understandings
between the Parties relating to the subject matter of this Agreement that are not expressed
herein. This Agreement may be modified only by an instrument in writing executed by the
Parties or their respective successors in interest.
1030393
-13-
Proposed Revisions 11/14/07
15~51
e. Survival; No Merger. All of the terms, provisions, representations,
warranties and covenants of the Parties under this Agreement shall survive the close of
escrow of any sale of the Property and shall not be merged in any deed transferring the
Property.
f. Authority And Execution. Each Party represents and warrants that it
has full power and authority to enter into this Agreement and to undertake all of its
obligations hereunder, that each person executing this Agreement on its behalf is duly and
validly authorized to do so.
g. Severability. The invalidity or unenforceability of any term or provision of
this Agreement shall not impair or affect the remainder of this Agreement, and the
remaining terms and provisions hereof shall not be invalidated but shall remain in full force
and effect.
h. Waiver; Modification. No waiver or modification of this Agreement or any
covenant, condition, or limitation herein contained shall be valid unless in writing and duly
executed by the Party to be charged therewith. No evidence or any waiver or modification
shall be offered or received in evidence in any proceeding, arbitration, or litigation between
the Parties arising out of or affecting this Agreement or the rights or obligations of any Party
hereunder, unless such waiver or modification is in writing and duly executed as aforesaid.
The provisions of this section may not be waived except as herein set forth. A waiver or
breach of any covenant, condition or provision of this Agreement shall not be deemed a
waiver of any other covenant, condition or provision hereof.
i. Construction. The section headings and captions used in this Agreement
are for convenience of reference only and shall not modify, define, limit or amplify any of the
terms or provisions hereof. This Agreement shall not be construed as if it had been
prepared by one of the Parties, but rather as if both Parties have prepared it.
j. Governing Law. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of California.
k. Time of the Essence. Time is of the essence in this Agreement as to
each provision in which time is an element of performance.
I. Further Assurances. Each Party will, upon reasonable request of the
other Party, execute, acknowledge, and deliver, or cause to be executed, acknowledged, '
and delivered, such further instruments and documents as may be reasonably necessary in
order to fulfill the intents and purposes of this Agreement.
m. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and all which together shall constitute one and the
same instrument.
[EXECUTION PAGE FOLLOWS]
1030393
-14-
Proposed Revisions 11/14/07
!(, ~ 61
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first written above.
OWNER(S):
CITY:
CITY OF DUBLIN
Richard Ambrose, City Manager
ATTEST:
City Clerk
1030393
-15-
Proposed Revisions 11/14/07
}7 oJ: 5 ,
COUNTY OF
)
)
)
STATE OF CALIFORNIA
On before me,
in and for said county and state, personally appeared
, a Notary Public
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)
COUNTY OF
)
)
)
STATE OF CALIFORNIA
On before me.
in and for said county and state, personally appeared
, a Notary Public
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)
790277.2
Form Revised April 18, 2006
/g ~ ~I
STATE OF CALIFORNIA
COUNTY OF
)
)
)
On before me,
in and for said county and state, personally appeared
, a Notary Public
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)
790277 .2
Form Revised April 18, 2006
Iq~.6)
CERTIFICATE OF ACCEPTANCE
(Pursuant to Government Code 927281)
This is to certify that the interest in real property conveyed by the Resale Restriction
Agreement and Option to Purchase dated from
to the City of Dublin, a California municipal corporation, is
hereby accepted by the undersigned office or agent on behalf of the City of Dublin pursuant
to authority conferred by the Resolution No. dated ; and the
grantee consents to recordation thereof by its duly authorized officer.
Dated:
By:
Its:
Attest:
City Clerk
790277 .2
Form Revised April 18, 2006
;;< () ;f 5}
EXHIBIT A
LEGAL DESCRIPTION
790277.2
Form Revised April 18, 2006
dJ, ~)
EXHIBIT B
FORM: NOTICE OF INTENT TO TRANSFER
VIA CERTIFIED MAIL - RETURN RECEIPT REQUESTED
To: City of Dublin
100 Civic Center
Dublin, California 94568
Attn: City Manager
Date:
Re: Notice of Intent to Transfer
Pursuant to the terms of the Resale Restriction Agreement and Option to Purchase, dated
, the undersigned Owner(s),
hereby give(s) notice of his/her/their intent to transfer the property located at
, Dublin, California (the "Property").
Owner may be contacted at the Property or at the following address:
Owner's daytime telephone number is L)
[If applicable: The proposed transfer of the Property is to the following person(s):
Name:
Address:
Telephone: L)
The proposed transfer is (check one):
o Sale
o
Other
Specify:
Owner(s) signature(s):
790277 .2
Form Revised April 18, 2006
dd. ~5)
EXHIBIT C
FORM: NOTICE OF EXERCISE
Date:
To:
Owner or Transferee
Address
Re: Notice of Exercise
The City of Dublin ("City") hereby gives notice that it is exercising its option to
purchase the real property located at , Dublin,
California. The option has been granted to the City pursuant to the Resale Restriction
Agreement and Option to Purchase between Owner and the City dated
and recorded on as Instrument No.
City has assigned its option to purchase the real property to
escrow for the purchase will be opened with the First American Title Company.
. [The
.] An
City of Dublin
By:
Its:
790277 .2
Form Revised April 18, 2006
/
d3~~'
EXHIBIT D
INCLUSIONARY ZONING BASE RESALE PRICE WORKSHEET
Date:
Owner:
Address:
Purchase Price:
Date of Purchase:
Years Owned:
years
CALCULATION BASED ON INCREASE IN MEDIAN INCOME***
Present Median Income: $
Family of four, County pf Alameda
(at time of sale of unit)
Effective Date:
Effective Date:
Original Median Income: $
Family of four, County of Alameda
(at time of purchase of unit)
Amount of Increase:
Family of four, County of Alameda
(Present median income minus original median
income)
Increase in Price:
x
x
=
Method #1 Resale Price:
+
=
I Based on the above, the base resale price as of this date,
, is:
By:
790277 .2
Form Revised April 18, 2006
~Lr ~ e;l
EXHIBIT E
REQUEST FOR NOTICE OF DEFAULT
Order No.
Escrow No.
Loan No,
WHEN RECORDED MAIL TO:
CITY OF DUBLIN
Dublin, California
Attn:
(Space Above This Line For Recorder's Use Only)
REQUEST FOR NOTICE UNDER SECTION 2924b CIVIL CODE
In accordance with Section 2924b, Civil Code. request is hereby made that a copy of any Notice
of Default and a copy of any Notice of Sale under the Deed of Trust recorded as Instrument No.
on , _' in the Official Records of Alameda County,
California, and describing land therein as:
, Dublin. California
. as Trustor, in which
is named as Beneficiary, and
, as Trustee, be mailed to the City of Dublin,
. Attn:
executed by
By:
NOTICE: A COpy OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT
ONLY TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF YOUR ADDRESS
CHANGES, A NEW REQUEST MUST BE RECORED.
STATE OF CALIFORNIA
COUNTY OF
On before me.
said county and state, personally appeared
, a Notary Public in and for
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)
790277 ,2
Form Revised April 18. 2006
~-' ~51
EXHIBIT F
DISCLOSURE STATEMENT
THERE ARE RESTRICTIONS ON THE SALE OF THE
PROPERTY YOU ARE BUYING. EXCEPT FOR A TRANSFER
TO THE CITY FOLLOWING CITY'S EXERCISE OF ITS OPTION
TO PURCHASE, THIS PROPERTY MAY ONLY BE SOLD TO AN
"ELIGIBLE HOUSEHOLD" AT A PRICE NOT TO EXCEED THE
ADJUSTED RESALE PRICE WHICH IS CAPPED AT AN
"AFFORDABLE UNIT COST."
THIS MEANS THAT YOU MAY NOT SELL THE PROPERTY FOR MARKET VALUE TO
WHOMEVER YOU LIKE.
THESE RESTRICTIONS WILL BE IN EFFECT UNTIL .
ANY SALE OF THE PROPERTY IN VIOLATION OF THE RESTRICTIONS, SHALL BE
VOIDABLE AT THE ELECTION OF THE CITY.
TO DETERMINE WHO AN ELIGIBLE HOUSEHOLD IS, AND WHAT THE ADJUSTED
RESALE PRICE AND AFFORDABLE HOUSING COST ARE, YOU SHOULD CONTACT
THE OF THE CITY OF DUBLIN.
YOU SHOULD READ THE RESALE RESTRICTION AGREEMENT AND OPTION TO
PURCHASE RECORDED AGAINST THE PROPERTY. YOU MAY OBTAIN A COPY
FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY.
YOU SHOULD ALSO BE AWARE THAT A PERFORMANCE DEED OF TRUST WILL BE
RECORDED AGAINST THE PROPERTY TO ENSURE COMPLIANCE WITH THE
RESALE RESTRICTION AGREEMENT AND OPTION TO PURCHASE. YOU MAY
OBTAIN A COPY FROM THE CITY OF DUBLIN OR FROM THE ESCROW COMPANY.
I HAVE READ THE FOREGOING AND I UNDERSTAND WHAT IT MEANS.
BUYER
BUYER
790277.2
Form Revised April 18, 2006
;2fo ~ ~ (
EXHIBIT G
FORM: PERFORMANCE DEED OF TRUST
790277.2
Form Revised April 18, 2006