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Restrictive Covenant and Affordable Housing Density Bonus Agreement 2023-00563083/6/23, 12 :17 PM OFFICIAL BUSINESS Document entitled to free Recording per· Government Code Sections 6103 & 27383 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Poway 13325 Civic Center Drive Poway, CA 92064 Attn: City Clerk Batch 15424631 Confirmation ) ) ) ) ) ) ) ) ) ) ) ) ) DOC# 2023-0056308 1111111111111111111111111111111111111111111111111111 IIIII 1111111111111 Mar 06, 2023 11 :55 AM OFFICIAL RECORDS JORDAN Z. MARKS, SAN DIEGO COUNTY RECORDER FEES: $0.00 (SB2 Atkins: $0.00) PCOR: N/A PAGES:28 SPACE ABOVE THIS LINE IS FOR RECORDER'S USE Assessor's Parcel No . 314-192-02-00 RESTRICTIVE COVENANT AND AFFORDABLE HOUSING DENSITY BONUS AGREEMENT (McKee Orchard -13667 Twin Peaks Road, Poway, CA 92064) THIS RESTRICTIVE · COVENANT AND AFFORDABLE HOUSING DENSITY BONUS AGREEMENT ("Agreement") dated as of Ji:68UA itj .23, 2023, is entered into by and between the CITY OF POWAY, a municipal corporation of the State of California ("City"), and MCKEE ORCHARD LLC, a Cali fomia limited liability company, and its successors and assigns ("Owner"), each a "Party" and collectively the "Parties", as follows : RECITALS A. Owner is the owner of a fee interest in certain real property located at 13667 Twin Peaks Road, in the City of Poway, County of San Diego, State of California, identified by Assessor's Parcel No. 314-192-02-00, and legally described in the Legal Description of Property attached hereto as Exhibit "A" and incorporated herein by this reference ("Property"). B . The Property consists of approximately 4 .77 acres and is located within the Residential Single-Family 4 (RS-4) zone. The maximum density for the RS-4 zone is four (4) dwelling units per acre, or 15 .64 dwelling units on the Property based on the lot's gross acreage of 4.77 acres. C. In implementation of California Government Code Sections 65915 through 659 I 8 ("State Density Bonus Law"), Section 17 .26.630 of Article V of Chapter 17.26 of the Poway Municipal Code ("PMC") provides that the City shall grant one density bonus, as specified in Section 17 .26.640 of the PMC, and concessions or incentives, as described in Section 17 .26.680 Page I of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 https ://gs .secure-record ing .com/Batch/Confirmation/15424631 1/2 OFFICIAL BUSINESS Document entitled to free Recording per Government Code Sections 6103 & 27383 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Poway 13325 Civic Center Drive Poway, CA 92064 Attn: City Clerk ) ) ) ) ) ) ) ) ) ) ) ) ) SPACE ABOVE THIS LINE IS FOR RECORDER'S USE Assessor's Parcel No. 314-192-02-00 RESTRICTIVE COVENANT AND AFFORDABLE HOUSING DENSITY BONUS AGREEMENT (McKee Orchard -13667 Twin Peaks Road, Poway, CA 92064) THIS RESTRICTIVE · COVENANT AND AFFORDABLE HOUSING DENSITY BONUS AGREEMENT ("Agreement") dated as of '.Ji-B8UA t't'i :Z3 , 2023, is entered into by and between the CITY OF POWAY, a municipal corporation of the State of California ("City"), and MCKEE ORCHARD LLC, a California limited liability company, and its successors and assigns ("Owner"), each a "Party" and collectively the "Parties", as follows: RECITALS A. Owner is the owner of a fee interest in certain real property located at 13667 Twin Peaks Road, in the City of Poway, County of San Diego, State of California, identified by Assessor's Parcel No. 314-192-02-00, and legally described in the Legal Description of Property attached hereto as Exhibit "A" and incorporated herein by this reference ("Property"). B. The Property consists of approximately 4.77 acres and is located within the Residential Single-Family 4 (RS-4) zone. The maximum density for the RS-4 zone is four (4) dwelling units per acre, or 15.64 dwelling units on the Property based on the lot's gross acreage of 4 .77 acres. C. In implementation of California Government Code Sections 659_15 through 65918 ("State Density Bonus Law"), Section 17.26.630 of Article V of Chapter 17.26 of the Poway Municipal Code ("PMC") provides that the City shall grant one density bonus, as specified in Section 17.26.640 of the PMC, and concessions or incentives, as described in Section 17 .26.680 Page 1 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 of the PMC, when an applicant seeks and agrees to construct a housing development that will contain a minimum number of housing units that are affordable to lower or moderate income households. D. California Government Code Sections 65915(b)(l)(B) and 65915(f)(2) of the State Density Bonus Law and Sections 17 .26.630, subparagraph 1, and 17 .26 .640(B) of the PMC provide that if the housing development provides five percent (5%) of the total housing units for very low-income households, the City shall grant a density bonus of twenty percent (20%) over the allowable maximum allowable residential density, in accordance with applicable law. E. Owner's designee, Cornerstone Communities LLC, a California limited liability company ("Applicant") proposes to build a housing development on the Property and make five percent (5%) of the total single-family dwelling units available to very low-income households, and is therefore entitled to a density bonus of twenty percent (20%) pursuant to California Government Code Sections 65915(b)(l)(B) and 65915(f)(2) of the State Density Bonus Law and Sections 17.26.630, subparagraph 1, and I 7 .26.640(B) of the PMC. F. On July 19, 2022, the City Council of the City ("City Council") granted approval of Tentative Tract Map (TIM) 21-003 and Development Review 21-002 allowing for the subdivision and development of the Property with a residential project consisting of a total of twenty (20) single-family .dwelling units (comprised of sixteen (16) base units plus four (4) density bonus units (equal to 20% density bonus)) that will be developed on twenty (20) separate lots, in exchange for restricting one (I) of the single-family dwelling units (equal to 5% of the total units) to the rental to and occupancy by a "very low income household" as defined in Section 50105 of the California Health and Safety Code (hereinafter "Project"). The City Council adopted a Mitigated Negative Declaration with respect to the Project pursuant to the California Environmental Quality Act ("CEQA") and the CEQA Guidelines. G. As a part of the City Council's approval of the Project, at Applicant's request, and in exchange for restricting the rental and occupancy of one (I) single-family dwelling unit to a very low income household, the City Council approved five (5) waivers or reductions of applicable development standards (collectively, "Approved Waivers") pursuant to California Government Code Section 65915( e) of the State Density Bonus Law and Section 17 .26.690 of the PMC. The Approved Waivers are described as follows : I. . Lot Size -The minimum lot size for the RS-4 zone is 10,000 square feet. For the Project, the proposed lots range in size from 7,012 square feet to 13, 445 square feet; 2. Lot Width -The minimum lot width for the RS-4 zone is 70 feet. For the Project, the proposed lot widths are 60 feet; 3 . Side Yard Setback -The minimum side yard setback for the RS-4 zone is 10 feet. For the Project, the proposed side yard setbacks are 5 feet; Page 2 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 4 . Wall/Fence Heights -The sum of any combination of fence or wall and retaining wall shall not exceed 6 feet in height. For the Project, the combination of retaining walls and fences exceed 6 feet along the west property line of the Project site, along the side property lines of all lots, and along the east property line of the Project site. The heights of the retaining wall and fence combination throughout the Project site range from just over 6 feet to 8 feet; and 5. Lot Coverage -The maximum lot coverage for the RS-4 zone is thirty five percent (35%). For the Project, the lot coverage exceeds 35% on lots I, 5, 13, and 18, which range from 43% to 50%. H. With approval of the Project, the City determined, based on information provided by Applicant, that the above listed Approved Waivers applicable to the Project pursuant to California Government Code Section 659 I 5( e) of the State Density Bonus Law and Section 17.26.690 of the PMC are necessary because the applicable development standards will otherwise have the effect of physically precluding the construction of the Project at the densities or with the concessions or incentives permitted under the State Density Bonus Law and the PMC. The City further determined that the above listed Approved Waivers applicable to the Project (1) would not have a specific, adverse impact, as defined in California Government Code Section 65589.5(d)(2), upon health or safety, (2) would not have an adverse impact on any real property that is listed in the California Register of Historical Resources, and (3) would not be contrary to state of federal law. I. Owner has designated lot I of the Property, as identified in TTM 21-003, on which the one (1) single-family dwelling unit will be developed and restricted to the rental to and occupancy by a "very low income household" as defined in California Health and Safety Code Section 50105, in accordance with the terms of this Agreement and the State Density Bonus Law and Article V of Chapter 17 .26 of the PMC. J. This Agreement will serve to memorialize, among other things, Owner's obligation to develop and restrict one (1) of the single-family dwelling units of the Project for the rental to and occupancy by a "very low income household" as defined in Section 50105 of the California Health and Safety Code, the time frame for the construction and occupancy of such affordable unit, and the restrictiqn of such affordable unit by recordation of this Agreement assuring the continued affordability for a period of a total of fifty-five (55) years commencing on the Occupancy Date (defined in Section 2, below). K. The City and Owner enter into this Agreement pursuant to and in accordance with the State Density Bonus Law and Article V of Chapter 17.26 of the PMC, in order to provide housing for very low income households. NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual terms, covenants and provisions contained herein, and for other good and valuable consideration, the Parties agree as follows : Page 3 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 AGREEMENT 1. Recitals. The Recitals set forth above are true and correct and incorporated herein by this reference. 2 . Definitions. For purposes of this Agreement, the terms listed below shall have the meanings thereafter specified: a. "Adjusted for Household Size Appropriate for the Unit" means a household of one person in the case of a studio unit, two persons in the case of a one- bedroom unit, three persons in the case of a two-bedroom unit, and four persons in the case of a three-bedroom unit. b. "Affordable Rent" means the maximum monthly rent to be paid by Very Low Income Households that, when added to the Utility Allowance, does not exceed one-twelfth (1112 th ) of the product of thirty percent (30%) times fifty percent (50%) of the San Diego County Area Median Income as determined annually by_ the California Department of Housing and Community Development, Adjusted for Household Size Appropriate for the Unit, in accordance with California Health and Safety Code Section 50053. Any mandatory fees or costs Owner wishes to charge the tenant(s) of the Affordable Unit or requires the tenant(s) of the Affordable Unit to pay, as a condition of his/her/their tenancy, including, but not limited to, fees or costs such as technology fees, parking fees, fitness/recreation fees, or renter's insurance (either payable to Owner or a third-party), shall be considered a part of, included within, and calculated into the Affordable Rent. Renter's insurance shall only be considered a part of, included within, and calculated into the Affordable Rent if it is explicitly required/made mandatory by Owner or his/her/its agent as a condition of tenancy. A mere recommendation by Owner or his/her/its agent to obtain renter's insurance shall not make it required/a mandatory condition of tenancy. If renter's insurance is not required/made mandatory as a condition of tenancy, any renter's insurance that is voluntarily obtained by the tenant(s) of the Affordable Unit shall not be considered a part of, included within, and calculated into the Affordable Rent. c. "Affordable Unit" means the one (1) single-family dwelling unit, comprising of four ( 4) bedrooms and approximately three thousand (3,000) square feet, with an attached two (2) car garage, to be developed on Lot 1 of the Property as part of the Project that will be rented exclusively to and occupied by a Very Low Income Household at the Affordable Rent in accordance with the terms and conditions set forth in this Agreement. d. "Approved Waivers" shall have the meaning given in Recital "G" of this Agreement. Page 4 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 e. "Director" means the City's Director of Development Services or his or her designee. f. "Lot l" means lot 1 of the Property identified in TTM 21-003, on which the Affordable Unit will be developed and restricted by Owner to the rental to and occupancy by a Very Low Income Household at the Affordable Rent. g. "Management Plan" means a plan prepared by Owner and approved by the City's Director, as may be amended from time to time with the approval of the City's Director, describing in detail the management of the Affordable Unit, including marketing of the Affordable Unit, tenant selection criteria and process, waiting list management, application of Utility Allowance in setting the Affordable Rent, a schedule of initial rents, and similar details of the operation, annual monitoring inspections and file review. h . "Occupancy Date" means the date on which the City has completed a Final Inspection for the Affordable Unit on Lot 1 of the Property. 1. "Owner" means the person or entity defined as Owner in the introductory paragraph of this Agreement, and includes all successors and assigns of that person or entity and successors in interest to the Property (and upon recordation of the final map, successors in interest to Lot 1). j . "Project" shall have the meaning given in Recital "F" of this Agreement. k. "Project Approvals" means all approvals and entitlements for the Project, including, but not limited to, Tentative Tract Map (TTM) 21-003 and Development Review 21-002, described in Recital "F", above, and the Approved Waivers, described in Recital "G", above. 1. "Property" shall have the meaning given in Recital "A" of this Agreement, as more particularly described in Exhibit "A" attached hereto and incorporated herein by this reference. m . . "Term of Affordability Covenants" shall have the meaning given in Section 8 of this Agreement. n. "Term of Agreement" shall have the meaning given in Section 7 of this Agreement. o. "Utility Allowance" means an amount designated by the City from time to time as a reasonable estimate of the cost of utilities and services ( excluding telephone) for the Affordable Unit for purposes of calculating the Affordable Rent. Page 5 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 p . "Very Low Income Household" or "Very Low Income Households" means a household whose income does not exceed the maximum income for "very low income households" set forth in California Health and Safety Code Section 50105(a). The upper income limit for a Very Low Income Household shall be the income limits for such households published annually by the California Department of Housing and Community Development with adjustments for household size. 3. Project Approvals. The Project shall be developed in accordance with all Project Approvals, including, but not limited to , the conditions of approval of the Project, and all applicable provisions of: (a) the PMC , including the zoning regulations; and (b) local, state and federal law. The Project shall be constructed in compliance with all applicable building codes and standards, as such may be modified from time to time. 4. Agreement: Recordation; Priority. 5. a. The Parties shall cause this Agreement to be recorded in the Official Records of the County of San Diego against fee title to the Property . Upon the recordation of the final map creating twenty (20) individual legal parcels, including, but not limited to, Lot I, comprising the Property, the Parties shall cause this Agreement to be recorded in the Official Records of the County of San Diego against fee title to Lot 1 and released from fee title to the remaining portions of the Property . The City shall not be obligated to issue permits prior to delivery and recordation of this Agreement. b. This Agreement shall unconditionally be and remain at all times prior and superior to all monetary liens, any lien created by a deed of trust or other similar security instrument, and any lien created by any loan document. Affordable Unit; Owner's Covenants. a. Pursuant to, and in consideration of, the Approved Waivers and the density bonus approved as a part of the Project Approvals, Owner hereby represents , covenants, warrants, and agrees on behalf of itself and its successors and assigns, and each successor in interest to the Property (and upon recordation of the final map, each successor in interest to Lot I), that, at'all times during the Term of Affordability Covenants, the Affordable Unit shall be rented exclusively to and occupied by a Very Low Income Household at the Affordable Rent. b. Owner hereby represents, covenants, warrants, and agrees that the Affordable Unit shall be constructed in the first phase of development of the Project and shall receive a Final Inspection from the City not later than the date that the first of the market-rate dwelling units receives a Fin~! Inspection from the City. The City shall have no obligation to complete a Final Inspection for any of the market-rate units until the completion of a Page 6 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 Final Inspection for the Affordable Unit. Time is of the essence in the occupancy of the Affordable Unit. c. Owner hereby represents, covenants, warrants, and agrees that the Affordable Unit required by this Agreement shall be leased or rented and fully utilized in accordance with this Agreement; notwithstanding any other provision oflaw to the contrary, the Affordable Unit shall not be withdrawn from the market or otherwise held vacant unless required to repair or refurbish the Affordable Unit as a result of any damage or destruction to the Affordable Unit. The Term of Affordability Covenants shall be automatically extended on a day for day basis for each day in excess of thirty (30) calendar days that the Affordable Unit is not continuously rented and remains vacant for a period greater than thirty (30) calendar days. 6. Affordable Rent. Affordable Rent for the Affordable Unit, including Utility Allowance, shall be based on the San Diego County Area Median Income published in Title 25, California Code of Regulations, Section 6932, by the California Department of Housing and Community Development, as may be amended from time to time. Affordable Rent may not be increased more frequently than annually to reflect increases in Area Median Income for San Diego County. In no event shall the Affordable Unit be rented at a rate greater than the Affordable Rent. In the event the California Department of Housing and Community Development ceases to publish an established Area Median Income, the City may, in its discretion, use any other reasonably comparable method of computing Area Median Income. 7. Term of Agreement. This Agreement shall remain in effect for a term commencing on the date of its recordation against fee title of the Property and continuing until expiration of the Term of Affordability Covenants, described in Section 8, below, of this Agreement ("Term of Agreement"). Prior to recording of this Agreement, Owner must deliver to the City the Consent and Subordination Agreement ("Lender Consent"), in substantially the form appended to this Agreement, from each lender that will hold a security interest in the Property (and upon recordation of the final map, from each lender that will hold a security interest in Lot 1 ). Such Lender Consents shall be recorded a~ a substantive part of this Agreement. 8. Term of Affordability Covenants. In accordance with California Government Code Section 65915( c )(1 )(A) of the State Density Bonus Law, all covenants herein to restrict the rental and occupancy of the Affordable Unit in accordance with this Agreement shall remain in effect for a term commencing on the Occupancy Date and continuing for the longest feasible period but not less than fifty-five (55) years ("Term of Affordability Covenants"). The Term of Affordability Covenants shall be automatically extended pursuant to Section 5(c), above, of this Agreement, without the need for any action of the Parties. 9. Management Plan. Owner shall submit the Management Plan for the Director's consideration and approval at least one hundred eighty ( 180) calendar days prior to the date that Owner applies for a Final Inspection from the City for any portion of the Project. In addition to other components, the Management Plan shall contain at least all of the following: Page 7 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 a. Selection of Tenants . (1) Owner shall notify the City's Director in writing of a vacancy in the Affordable Unit at least thirty (30) calendar days prior to the effective date of the vacancy. If the tenant gives Owner less than thirty (30) calendar days notice of his or her intent to vacate the Affordable Unit, Owner shall notify the City immediately upon receipt of tenant's notice of intent to vacate. (2) Owner shall conduct affirmative marketing of the Affordable Unit, as the Affordable Unit becomes available from time to time , including wide circulation of infonnation and public notice of the availability of the Affordable Unit for rent during the marketing period required by the Management Plan . (3) Upon request by the City's Director, Owner shall publish not ices of the availability of the Affordable Unit for a minimum of two (2) consecutive weeks in newspapers circulated widely in the community, including newspapers that reach minority communities . At least one notice shall be published in the Spanish language newspaper of general circulation. The notice should briefly state the applicable income requirements, indicate where applications are available , state when the application period opens and closes, and provide a telephone number for questions . Owner shall submit proof of publication to the Director. ( 4) The City may refer to Owner person(s) or households who meet the eligibility requirements set forth in this Agreement. Owner agrees to reasonably and in good faith consider such tenants for the Affordable Unit whose applications are submitted by the City to Owner, so long as such tenants are Very Low Income Households and meet the requirements of this Agreement. (5) Owner shall initially determine eligibility of Very Low Income Households that may rent the Affordable Unit in accordance with this Agreement and the Management Plan. However, the Affordable Unit shall not be rented to any prospective tenant or occupied by any person unless and until the City, through its designated staff, has verified that the prospective tenants or occupants are eligible as a Very Low Income Household and that Affordable Rents will be charged in accordance with the criteria set forth in this Agreement. b . Owner Assurances . (1) Owner shall ensure that all tenant eligibility and rent criteria are met Page 8 of20 Restrictive Covenant and Affordable Housing Density Bonu s Agreement v4 during the Term of Affordability Covenants. (2) Annually, on the anniversary of the Occupancy Date, during the Term of Affordability Covenants, Owner shall submit to the City the Annual Report, defined in Section 13, below, of this Agreement, and Owner shall certify to the City that the Affordable Unit is being occupied by a Very Low Income Household. Said certification shall be on forms acceptable to the City. I 0. Tenant and Occupancy Restrictions. To the greatest extent allowed by applicable law, the following restrictions shall apply to the Affordable Unit during the Term of Affordability Covenants, and the Owner hereby represents, covenants, warrants, and agrees to the following: a. No Relationship with Owner or Applicant. The Affordable Unit shall not be occupied or rented to Owner or Applicant or any relative (by blood or marriage) of Owner or Applicant or any person employed by Owner or Applicant or any individuals who are members, principals, executives, directors, partners, or sha_reholders of Owner or Applicant or in any entity having an ownership in Owner or Applicant or in the Property or Lot I. b. No Full-Time Students. The Affordable Unit shall not be occupied or rented to any household comprised exclusively of persons who are full-time students, unless such persons are eligible to file a joint federal income tax return and all such persons reside in the Affordable Unit. The term "full- time student" shall be defined as any person who will be or has been a full- time student during five (5) calendar months of the calendar year in question at an educational institution ( other than a correspondence school) with regular faculty and students. c. No Student Dependents. Notwithstanding the provisions of Section I 0(b ), above, of this Agreement, The Affordable Unit shall not be occupied or rented to any student dependent as defined in the United States Internal Revenue Code, unless the taxpayer (upon whom the student in question is a dependent) resides in the Affordable Unit. d. • No Owners of Real Property. The Affordable Unit shall not be occupied or rented to any person or any household comprised of one or more persons who own real property. e. Income Computation. Prior to a prospective tenant's occupancy in the Affordable Unit, Owner shall obtain and maintain on file an income computation and certification form from such prospective tenant dated immediately prior to the date of initial occupancy of the Affordable Unit by such prospective tenant. Owner shall verify that the income informatio·n provided by an applicant is accurate by following all applicable City policies and procedures and by taking one or more of the following steps as Page 9 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 a part of the verification process: (I) obtain two (2) pay stubs from the most recent pay periods; (2) obtain written verification of income and employment from applicant's current employer; (3) obtain an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either agency; (4) if an applicant is unemployed or did not file a tax return for the previous calendar year, obtain other verification of such applicant's income as is reasonably satisfactory; or (5) obtain such other information as may be reasonably required. Owner shall update the foregoing records annually and shall make copies of updated tenant eligibility records and monthly rental records relating to the Affordable Unit to the City upon request. Owner shall retain the records described in this Section for a period of five (5) years after the date the respective records were created. f. Income of Co-Tenants. The income of all co-tenants and/or occupants shall be taken into account in determining whether a tenant or prospective tenant or household meets the requirements of this Agreement. g. Occupancy Limits. The maximum occupancy of the Affordable Unit shall not exceed more than such number of persons as is equal to two persons per bedroom, plus one. Thus, for the Affordable Unit as a four (4) bedroom household, the maximum occupancy shall not exceed nine (9) persons. h. Residential Use. The Affordable Unit shall not at any time be utilized on a transient basis or a commercial use or be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, or any other use that is inconsistent or incompatible with this Agreement. i. Conversion of Affordable Unit. No part of the Affordable Unit will at any time be owned by a cooperative housing corporation nor shall Owner take any steps in connection with the conversion to such ownership or uses to condominiums or to any other form of ownership including a for-sale dwelling unit. J. No Sublease. A tenant occupying the Affordable Unit may not sublet the unit without the express prior written permission of both Owner and the City. Owner and the City shall not grant permission to lease, rent, or sublet the Affordable Unit if it is determined that the prospective tenant or occupant is not a Very Low Income Household. Each lease for the Affordable Unit shall prohibit tenants occupying the Affordable Unit from subletting the Affordable Unit without the express prior written permission of both Owner and the City. Any individual who subleases the Affordable Unit in violation of the provisions of this Agreement shall be required to forfeit to the City all monetary amounts so obtained. Page 10 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 k. Changes in Household Income. (1) During the Term of Affordability Covenants, the Affordable Unit shall be rented to and occupied by a Very Low Income Household whose income does not exceed the very low income limits applicable to San Diego County published annually by the California Department of Housing and Community Development with adjustments for household size. (2) If, at any time during the Term of Affordability Covenants, any household which was previously determined to be a Very Low Income Household eligible to occupy the Affordable Unit becomes ineligible as a result of increased income or assets, the household shall have a period of ninety (90) calendar days to relocate from the Affordable Unit and Lot 1. The ineligible household shall by fully responsible for the costs and expenses related to the relocation. To the extent not in conflict with applicable state or federal laws, Owner shall take all reasonable steps to terminate the tenancy of the ineligible household and require the ineligible household to vacate the Affordable Unit and Lot 1. Reasonable steps to be taken by Owner include, but are not limited to, eviction of the ineligible household if necessary. Owner's failure to take reasonable steps to provide the Affordable Unit to an eligible Very Low Income Household shall constitute a default under this Agreement. (3) If, after moving into the Affordable Unit, the household's income decreases below the category for Very Low Income Households for which the household originally qualified, the tenant may continue to have the right to reside in the Affordable Unit provided that the tenant pays the Affordable Rent and performs his/her other obligations to Owner under the lease agreement. 11. Lease Agreement. a. The lease agreement between Owner or its agent and a tenant for the Affordable Unit must include provisions providing for the implementation of Section 10, above, of this Agreement. In add it ion, the lease agreement shall include the following provisions: (1) That the Affordable Unit is a rental unit to be rented exclusively to and occupied by a Very Low Income Household. (2) That Owner has relied on the income certification and supporting information supplied by the tenant in determining qualification for occupying the Affordable Unit, and that any material misstatement Page 11 of 20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 12. in such certification (whether or not intentional) will be cause for immediate termination of the tenancy. (3) That, if the tenant subleases the Affordable Unit without the express prior written permission of Owner and the City in violation of the provisions of this Agreement, tenant shall be required to forfeit to the City all monetary amounts so obtained. b. Prior to the occupancy of the Affordable Unit, Owner shall provide a copy of the lease agreement to the City's Director for review and approval. c. A fully executed copy of the lease agreement for the Affordable Unit, which shall comply with the provisions of this Agreement, shall be delivered to the City's Director within ten (10) calendar days after the date of its execution. Maintenance of Affordable Unit and Lot 1; Insurance. a. During the Term of this Agreement, Owner shall, at its cost and expense: (1) maintain and operate the Affordable Unit and Lot l in a habitable condition and in good repair so as to provide decent, safe and sanitary housing consistent with state and federal housing quality standards and the Poway Municipal Code; and (2) make any required repairs or provide any required cleanup; and (3) provide the Affordable Unit and Lot 1 with the same level of services and maintenance as are provided to any of the other dwelling units on the Property. Any deficiencies in the physical condition of the Affordable Unit shall be corrected by Owner at Owner's sole cost and expense within thirty (30) calendar days of Owner's receipt of written notice from the City identifying such deficiencies. Failure to maintain the Affordable Unit and Lot l in compliance with this Section shall constitute a default under this Agreement. b. Owner may contract with a management agent for the performance of the services or its duties. However, such an arrangement does not relieve Owner of responsibility for proper performance of its obligations and duties under this Agreement. Owner shall notify the City's Director in writing within thirty (30) calendar days of the retention of, or any change in, a property management agent for the Affordable Unit. c. Owner shall obtain, and at all times during the Term of Agreement, shall maintain policies of general liability and property damage insurance from an insurance company authorized to be in business in the State of California. The property damage insurance shall be in an amount sufficient to replace the Affordable Unit in the event of fire or other major damage. · Page 12 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 13 . Annual Report. Owner shall maintain complete and accurate records pertaining to the Affordable Unit, and shall prepare and provide the City's Director with a written annual report ("Annual Report") commencing one year after the Occupancy Date and continuing every year during the Term of Affordability Covenants, regarding the rental status and occupancy of the Affordable Unit. The Annual Report shall include information regarding the name, address and income of each resident of the Affordable Unit, identify the number of bedrooms of the Affordable Unit and the monthly rent paid by the tenant. 14. Maintenance of Records. To assist the City with its obligation to ensure continued affordability of the Affordable Unit, in supplement to the Annual Report, Owner shall prepare, maintain, and submit to the City records which demonstrate that the Affordable Unit meets the affordability and income targeting requirements of California Health and Safety Code Sections 50053 and 50105 for Very Low Income Households for the duration of the Term of Affordability Covenants. Records shall be kept for each household occupying the Affordable Unit. Owner shall maintain complete and accurate records pertaining to the Affordable Unit, and shall permit any duly authorized representative of the City to inspect the books and records pertaining to the Affordable Unit, including, but not limited to, those records pertaining to tenant eligibility and occupancy of the Affordable Unit. Owner shaH retain the records described in this Section for a period of five (5) years after the expiration or termination of this Agreement. 15. Monitoring Fee. Concurrently with the submittal of each Annual Report to the City, Owner shall pay to the City, each year during the Term of Affordability Covenants, an annual monitoring fee, in an amount as determined by the City in schedules promulgated by the City from time to time, to defray the City's cost of monitoring Owner's compliance with this Agreement. Owner's failure to timely make such payment shall constitute a default under this Agreement. 16. Federal and State Laws . Notwithstanding the above provisions, nothing contained herein shall require Owner or the City to do anything contrary to or refrain from doing anything required by federal and state laws and regulations promulgated thereunder applicable to the construction, management, maintenance, and rental of the Affordable Unit in the City of Poway . 17. Prohibition Against Discrimination. Owner shall comply with all applicable state I and federal fair housing laws, and shall not discriminate against any tenant or potential tenant on the basis of sex, color, race, ethnicity, religion, ancestry, national origin, age, pregnancy, marital status, family composition, sexual orientation, or the potential or actual occupancy of minor children. Owner furth'er agrees to take affirmative action to ensure that no such person is discriminated against for any of the above-mentioned reasons . 18. Indemnification. Owner shall defend, indemnify, protect, and hold harmless the City of Poway and its officers, officials, agencies, agents, employees, representatives, and volunteers (collectively, including the City, "City Indemnitees") from and against any suit, claim, loss, cost, demand, damage, expense, liability, lien, legal proceeding, enforcement action, administrative action or proceeding, cause of action (whether in tort, contract, under statute, at law, in equity, or otherwise), charge, award, assessment, fine, or penalty of any kind, including, but not limited to, reasonable attorneys' fees (including the reasonable value of the services of in-house counsel) and costs, any consultant and expert fees and expenses, any investigation costs of Page 13 of 20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 whatever kind or nature, and all financial or performance obligations arising from any judgment, decree, order, or other written decision or arising from any settlement, whether direct or indirect, (collectively, "Claims") arising in any way from, or relating to, the Project or this Agreement, including, but not limited to, those Claims that arise out of any of the following: (a) a default or breach by Owner of any provision_ of this Agreement or in the performance of its obligations under this Agreement; (b) the Owner's administration of this Agreement, enforcement of affordability restrictions, or rental of the Affordable Unit; (c) the City's interest in this Agreement or the Affordable Unit; (d) the construction, sale, rental, or operation of the Project, the Property, Lot 1, and/or the Affordable Unit, or (e) the City's approval of this Agreement. This indemnification shall not apply to Claims arising solely out of the established gross negligence or willful misconduct of the City lndemnitees. 19. City's Right to Inspect Affordable Unit, Lot 1, and Documents. The City shall have the right to inspect the Affordable Unit and Lot 1 prior to initial occupancy of the Affordable Unit and periodically during the Term of this Agreement, upon three (3) business days' notice to Owner. The City shall have the right to inspect any documents or records relating to the Affordable Unit and Lot 1 at any reasonable time to determine Owner's compliance with this Agreement. The City shall have the right to disclose results of those inspections to the appropriate enforcement authorities. 20. Successors and Assigns. This Agreement and its terms, covenants and conditions shall be binding upon and inure to the benefit of the City and Owner, and their respective successors, owners by deed, deed-in-lieu of foreclosure, foreclosure or otherwise, heirs, and assigns and shall continue in full force and effect. The City reserves the right to designate another public agency within the City of Poway to perform the City's obligations or to exercise the City's rights under this Agreement. 21. Burden to Run with Land. This Agreement and all terms, covenants and conditions contained in this Agreement shall run with and burden the Property (and upon recordation of the final map, shall run with and burden Lot 1) and be binding on every person and entity having any interest or encumbrance therein at any time and from time to time, and shall continue in full force and effect. This Agreement shall unconditionally be and remain at all times prior and superior to all monetary liens, any lien created by a deed of trust or other similar security instrument, and any lien created by any loan document. Any sale or conveyance of the Property (and upon recordation of the final map, any sale or conveyance of Lot 1) shall be made subject to this Agreement. Owner shall expressly make this Agreement a part of any deed or other instrument conveying an interest in the Property (and upon recordation of the final map, conveying an interest in Lot 1). Owner agrees that, if a court of competent jurisdiction determines that any of the covenants set forth in this Agreement do not qualify as covenants running with the land, such covenants shall be enforced as equitable servitudes. 22. Notices. Formal notices, demands and communications between the Authority and Developer shall be sufficiently given if, and shall not be deemed given unless, dispatched by certified mail, postage prepaid, return receipt requested, or sent by express delivery or overnight courier service, to the office of the Parties shown as follows, or such other address as the Parties may designate in writing from time to time: Page 14 of 20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 To City: City of Poway 13325 Civic Center Drive Poway, CA 92064 Attn: Chris Hazeltine, City Manager With a Copy to: City of Poway 13325 Civic Center Drive Poway, CA 92064 Attn: Alan Fenstermacher, City Attorney With a Copy to: Kane Ballmer & Berkman: To Owner: 515 S. Figueroa Street, Suite 780 Los Angeles, CA 90071 Attn: Kendall D. Levan, Esq. McKee Orchard LLC 1241 Cave Street, Suite 200 La Jolla, CA 92037 Attn: Michael Sabourin With a copy to: Allen Matkins Leck Gamble Mallory & Natsis LLP 600 W. Broadway, Suite 2700 San Diego, CA 9210 l Attn: Timothy M. Hutter, Esq. Such written notices, demands and communications shall be effective on the date shown on the delivery receipt as the date delivered or the date on which delivery was refused. For purposes of obligations to be performed by the Authority or of calculation of noticing under this Agreement, a business day on which the Poway City Hall is closed will not constitute a business day under this Agreement. 23. Governing Law. This Agreement and the legal relations between the Parties will be governed by, interpreted under, construed and enforced in accordance with, the internal laws of the State of California without reference to the rules governing the conflict of laws. This Agreement is made and entered into in the County of San Diego, California, and any legal actions or proceedings arising from or related to this Agreement will be brought in the County of San Diego. 24. Default. a. The injured Party shall give written notice of default to the Party in default specifying the default complained of by the injured Party. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shaH it change the time of default. Page 15 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 b. Failure or delay by either Party to perform any term or provision of this Agreement, which is not cured within thirty (30) calendar days after receipt of written notice from the other Party, constitutes a default under this Agreement; provided, that, if any failure or delay by either Party to perform such term or provision of this Agreement cannot reasonably be cured within said thirty (30) calendar day period, then such Party shall not be in default under this Agreement if such Party diligently commences the cure of such failure or delay in performance within said thirty (30) calendar day period and thereafter diligently pursues the cure to completion and completes the cure no later than sixty ( 60) calendar days after receipt of such written notice from the other Party. The Party who so fails or delays must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy with due diligence. Except as required to protect against further damages, the injured Party may not initiate proceedings against the Party in default until expiration of the thirty (30) calendar day cure period or, if applicable, the sixty (60) calendar day cure period, set forth hereinabove. 25. Remedies. a. Any individual who subleases the Affordable Unit in violation of the provisions of this Agreement shall be required to forfeit to the City all monetary amounts so obtained. b. The City may institute any appropriate legal actions or proceedings, at law or in equity, necessary to ensure compliance with this Agreement, including but not limited to actions for injunctive relief, specific performance, or damages. c. Owner expressly agrees and declares that the City shall be the proper party to, and shall have standing to, initiate and pursue any and all actions or proceedings, at law or in equity, to enforce the provisions of this Agreement and/or to recover damages for any event of default, notwithstanding that such damages or the detriment arising from an event of default may have .. been suffered by some other person or by the public at large. d. Owner expressly agrees that injunctive relief and specific performance are proper pre-trial and/or post-trial remedies under this Agreement to assure compliance with this Agreement. e. Nothing in this Agreement and no recovery by the City shall restrict or limit the rights or remedies of persons or entities against Owner in connection with the same or related acts of Owner. f. The remedies set forth in this Agreement are cumulative and not mutually exclusive. Further, the award of damages shall not bar the exercise of police Page 16 of 20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 power or other governmental powers, or the pursuit of criminal, civil, or administrative penalties by the City in connection with any default under this Agreement. Owner acknowledges that a default under this Agreement may constitute a violation of state law . g. It is agreed and understood that the covenants to maintain the Affordable Unit as set forth herein are a requirement of the Poway Municipal Code and as a condition to receiving the Approved Waivers and density bonus pursuant to Article V of Chapter 17.26 of the Poway Municipal Code. Accordingly, Owner agrees that an uncured default of one or more of the covenants to maintain the Affordable Unit as affordable housing for the Term of Affordability Covenants specified herein constitutes a violation of the Poway Municipal Code, subject to enforcement by all legally available means, including, but not limited to, criminal prosecution . 26. Attorneys' Fees. If an action or court proceeding is brought by a Party against the other Party under this Agreement, whether for interpretation, enforcement or otherwise, the prevailing Party in any such action or proceeding shall be entitled to recover attorneys ' fees and costs from the other Party . Notwithstanding the foregoing, should the City be required to seek enforcement of any terms, covenants , or conditions set forth in this Agreement, Owner shall pay all costs and attorneys' fees incurred by the City in seeking enforcement. 27. Waiver. A failure to exercise any right that either Party may have or be entitled to in the event of default hereunder shall not constitute a waiver of such right or any other right in the event of a subsequent default. No provision of this Agreement, or breach of any provision, can be waived except in writing. The waiver by any Party of any breach or violation of any term, covenant, or condition of this Agreement or of any provisions, ordinance, or law, shall not be deemed to be a waiver of any other term , covenant, condition, ordinance, or law or any subsequent breach or violation of the same or of any other term , covenant, condition, ordinance, or law. 28. Further Assurances. Owner shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form and do such further acts as may be necessary, desirable or proper as the City shall from time to time find necessary or appropriate to effectuare its purpose in entering into this Agreement. 29. Risk of Market Conditions . Owner shall bear sole responsibility for developing, constructing, and marketing the Affordable Unit, pursuant to the Project Approvals for the Project and the requirements contained in this Agreement. 30. Signature Authority. All individuals signing this Agreement for a Party which is a corporation, limited liability company, partnership or other legal entity, or signing under a power of attorney, or as a trustee, guardian, conservator, or in any other legal capacity, covenant to the other Party hereto that he or she has the necessary capacity and authority to act for, sign, and bind the respective entity or principal on whose behalf he or she is signing. Page 17 of20 Restrictive Covenant and Affordabl e Hou sing Den sity Bonus Agreement v4 31. Ownership of the Property. Owner represents and warrants that it is the owner of the Property, including, but not limited to, Lot 1, and has full authority to execute this Agreement. 32. Entire Agreement. This Agreement, including the Consent and Subordination Agreement, and Exhibit "A", constitutes the entire agreement and understanding between the Parties as to its subject matter. Each Party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any Party, or anyone acting on behalf of any Party, which are not embodied herein . 33. Agreement. 34. Third Party Beneficiaries. There are no third party beneficiaries of or to this Amendment of This Agreement. a. Generally. This Agreement may be amended from time to time in whole or in part by written instrument signed by both the City and Owner or their respective successors in interest, in accordance with this Agreement, the Poway Municipal Code, and the State Density Bonus Law. The City shall have no obligation to amend this Agreement, and Owner shall reimburse the City for administrative costs associated with any amendment or modification of this Agreement. b. Administrative Amendments. Notwithstanding subdivision (a) of this Section, any amendment to this Agreement, whether requested by Owner or the City, which does not relate to any of the following: the Term of Agreement or Term of Affordability Covenants; the number, percentage or type of Affordable Units; or the number or type of any waivers, incentives or concessions given by the City, may be detennined by the City's Director to be an Administrative Amendment and if so, the City's Director may approve the Administrative Amendment without notice or hearing, and this Agreement and its pertinent exhibits shall be automatically amended without further action by the Parties. A memorandum of the Administrative Amendment shall be executed and recorded in the Official Records of the County of San Diego to reflect such Administrative Amendment. 35. Severability. Every provision of this Agreement is intended to be severable. If any provision of this Agreement or the application of any provision hereof to any Party or circumstance is declared to be illegal, invalid or unenforceable for any reason whatsoever by statute or a court of competent jurisdiction, such invalidity will not affect the other terms and provisions hereof or the application of the provision in question to any other Party or circumstance, all of which will continue in full force and effect. Page 18 of 20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 36. Counterparts. This Agreement may be executed by each Party in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. [remainder of page left intentionally blank] [ signatures on following page] Page 19 of 20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 IN WITNESS WHEREOF, the City and Owner have signed this Agreement as of the dates set forth opposite their signatures. ATTEST: By:~ Carrie Gallagher, CM City Clerk APPROVED AS TO FORM: CITY: CITY OF POWAY, By: ~'~NEU IN CouNT£f'\PART Alan Fenstermacher City Attorney KANE, BALLMER & BERKMAN By: 014~£D IN Cout-nE~f1Atrr City Special Counsel OWNER: MCKEE ORCHARD LLC, a California limited liability company Date: J._~J.Q .2_2) Page 20 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached , and not the truthfulness, accuracy, or validity of that document. State of California County of San Diego on February 23, 2023 before me, __ Y_v_o_n_n_e_M_a_nn_i_o_n__,__, _N_o_t_a_.ry_P_u_b_lic _____ _ Date Here Insert Name and Title of the Officer personally appeared _______ C_h_r_is_H_a_z_e_lt_in_e ______________ _ Name(s) of Signer(s) who proved to me on the basis of satisfactory evidence· to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. YVONNE MANNION Notary Public -California San Diego County Commission# 2363699 My Comm .. Expires Jul 1, 2025 Place Notary Sea/ Above I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (/1) /1.-J.-,e- Signature of Notary Public ----------------OPTIONAL---------------- Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. Description of Attached Document Title or Type of Document: Restrictive Covenant & Affordable Housing Density Bonus Agreement Document Date: ___________________ Number of Pages: _____ _ Signer(s) Other Than Named Above: _______________________ _ Capacity(ies) Claimed by Signer(s) Signer's Name: ____________ _ Signer's Name: ____________ _ D Corporate Officer -Title(s): ______ _ D Corporate Officer -Title(s): ______ _ □ Partner -D Limited D General D Partner -D Limited D General □ Individual D Attorney in Fact D Individual D Attorney in Fact D Trustee D Guardian or Conservator D Trustee □ Guardian or Conservator D Other: ______________ _ D Other: _____________ _ Signer Is Representing: _________ _ Signer Is Representing: _________ _ ·~~ ©2016 National Notary Association• www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907 A notary public or other officer completing th is certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ST A TE OF CALIFORNIA ) ) ) 6 t ' ! ~ ' On fi . W ,~before me, , . -;:S a Notary Public, personally appeared ff) i a¾4X:t 1;l;t:o who proved to me on the basis of satisfactory evidence to be the personQ!O whose nameW- is/are subscribed to the within instrument and acknowledged to me that he/she/#iey executed the same in his/l=ter/thei-r authorized capacity(ies), and that by his/h-er/their signature~ on the instrument the person ~, or the entity upon behalf of which the personOO acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. •••••••• f JESSICA LEE STIVES Notary Public -California San Di~ County i Commission II 2382095 - y Comm. Expires Nov 10, 2025 IN WITNESS WHEREOF, the City and Owner have signed this Agreement as of the dates set forth opposite their signatures. Date: --------- ATTEST: By: _________ _ Carrie Gallagher, CMC City Clerk APPROVED AS TO FORM: CITY: CITY OF POWAY, a municipal corporation By:------------- Chris Hazeltine, City Manager By: ____________ _ Alan Fenstermacher City Attorney KANE, BALLMER & BERKMAN By: City Special Counsel OWNER: MCKEE ORCHARD LLC, a California limited liability company Date: ---------By: ------------Name: -----------Title: ------------ Page 20 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 IN WITNESS WHEREOF, the City and Owner have signed this Agreement as of the dates set forth opposite their signatures . CITY: CITY OF POWAY, a municipal corporation Date: --------By:------------- Chris Hazeltine, City Manager ATTEST: By: ________ _ Carrie Gallagher, CMC City Clerk APPROVED AS TO FORM: By J1~ la;:; Fenstermacher City Attorney KANE, BALLMER & BERKMAN By: _________ _ City Special Counsel OWNER: MCKEE ORCHARD LLC, a California limited liability company Date: ---------By: ------------ Name: ----------- Tit I e: ------------ Page 20 of20 Restrictive Covenant and Affordable Housing Density Bonus Agreement v4 CONSENT AND SUBORDINATION AGREEMENT NOTICE: THIS CONSENT AND SUBORDINATION RES UL TS IN YOUR SECURITY INTERESTS IN THE PROPERTY BECOMING SUBJECT TO AND OF A LOWER PRIORITY THAN THIS RESTRICTIVE COVENANT AND AFFORDABLE HOUSING DENSITY BONUS AGREEMENT WELLS FARGO BANK, NATIONAL ASSOCIATION ("Beneficiary"), under that certain Amended and Restated Construction Deed of Trust With Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing made as of September 29, 2022, and recorded on October 4, 2022 as Instrument No. 2022-0387133 in the Official Records of the County of San Diego, State of California ("Deed of Trust"), which Deed of Trust amends and restates in its entirety that certain Deed of Trust With Absolute Assignment of Leases and Rents, Security Agreement and Fixture Filing made as of April, 2022, and recorded on May 5, 2022 as Instrument No. 2022-0195745, hereby acknowledges its consent to the terms and provisions of this Restrictive Covenant and Affordable Housing Density Bonus Agreement. The undersigned further agrees that the Deed of Trust is and shall unconditionally be and remain at all times junior, subordinate and subject to the terms, covenants, conditions and restrictions of this Restrictive Covenant and Affordable Housing Density Bonus Agreement, provided that in consideration of Beneficiary's covenants and agreements contained in this Agreement, the City and its designated agencies hereby agree for the benefit of Beneficiary, for the period that the Deed of Trust is secured by Lot 1, that concurrently with any notice from the City to Owner that a default or breach exists under the terms of this Restrictive Covenant and Affordable Housing Density Bonus Agreement, the City shall send a copy of such notice to Beneficiary at the address listed below and Beneficiary shall have the right, but not the obligation, to cure any defaults during the cure period that is applicable for Owner. The provisions of this Section are intended to supplement, and not to limit, waive, modify or replace, those provisions of law pertaining to notice and cure rights of junior lenders including, without limitation, those set forth in California Civil Code Sections 2924b and 2924c as applicable. Beneficiary intentionally and unconditionally waives, relinquishes and subordinates the lien or charge of the Deed of Trust in favor of the Restrictive Covenant and Affordable Housing Density Bonus Agreement. [Signature on following Page] CONSENT AND SUBORDINATION AGREEMENT Agreed and Acknowledged: Dated as of: t=" e \:, 1 u.. ,, r 1 \ .S , 2023 "BENEFICIARY" WELLS FARGO BANK, NATIONAL ASSOCIATION Address of Beneficiary: With a Copy to: Wells Fargo Bank, National Association Home Builder Banking Western 401 B Street; Suite 1100 San Diego, CA 92101 Attention: John Wickenhiser Loan No. 1020963 Wells Fargo Bank, National Association Winston-Salem Loan Center 100 North Main Street, 10th Floor Winston-Salem, NC 27101 Attention: Loan Disbursement Administrator Loan No. 1020963 CONSENT AND SUBORDINATION AGREEMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF_]~j · C\~(~c_l ___ _ ) ) ) On Ftbr w;vtJ I stt,., ,~before 111 (9, 1 Joa,t b n c;(c7 P,"1 a Notary Public, personally appeared /V nfht,Lh f . R' (1 ee / who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature •n 111111111111111I11111111111111111 I lo 5 .. \'.:. JONAlliAN GREEN 5 Ii: ~~~t ._ COMM . #2392040 z ~ /~lJj HOW1Y PUBLIC · CALIFORNIA~ : ..-•••• 0 ;~,. Pt.ACER COUNTY : : My Commiss ion Expln,a 01/29/2026 : 'Ill 111111111111 Ill 1111111111111111111 P EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY Real property in the City of Poway, County of San Diego, State of California, described as follows: THAT PORTION OF THE NORTH HALF OF THE NORTHEAST QUARTER OF SECTION 12, TOWNSHIP 14 SOUTH, RANGE 2 WEST, SAN BERNARDrNO BASE AND MERIDIAN, rN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDrNG TO UNITED STATES GOVERNMENT SURVEY APPROVED SEPTEMBER 11, 1879, AND AS SHOWN ON RECORD OF SURVEY MAP NO. 1646, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY OCTOBER 16, 194 7. Assessor's Parcel. No. 314-192-02-00 Exhibit "A"