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Affordable Housing Resale Restrictions; Option Agreement and Option to Designate Purchaser 2005-0847182J to 14316 e U NO CHARGE ON THIS DOCUMENT FOR THE BENEFIT OF THE CITY OF POWAY Recording Requested By And When Recorded Mail To: THE CITY OF POWAY 13324 Civic Center Drive Poway, CA 92064 ATTN: Housing Program Manager A # 2005 - 0.8,47182 ill III III I II II I I II I I I I III II II I I II ' SEP 30, 2005 11:21 AM IIIFFICIAL RECORDS S ,IJ DIEGO CCIUdT', FIECURDER'S OFFICE GnEi=ORI'.1 SMITH COUNT ' r' REC U R E ER FEES 000 C1 I - HA F6GES 20 AFFORDABLE HOUSING RESALE RESTRICTIONS; OPTION AGREEMENT AND OPTION TO DESIGNATE PURCHASER (100% AMI) This Affordable Housing Resale Restrictions; Option Agreement and Option to Designate Purchaser ( "Resale Restriction ") is executed this 22nd day of September, 2005, by the City of Poway ( "City "), and by Patrick S. Reynolds, as owner ( "Owner ") of the real property located in the City of Poway, County of San Diego, State of California, more particularly described on Exhibit "A" attached hereto (the "Property "), RECITALS WHEREAS, concurrently with the recordation of this Resale Restriction, the City is funding a loan (the "City Loan") evidenced by a promissory note (the "Note ") and secured by a deed of trust ( "City Deed of Trust "), to aid Owner, who is a first -time homebuyer or displaced homemaker, in acquiring the Property. The City Deed of Trust and City Loan were conditioned in part upon the recordation of a document granting a purchase option to the City and setting forth certain restrictions upon the use and sale of the Property. WHEREAS, the purposes of this Resale Restriction are to (i) grant the City an option to acquire the Property, (ii) establish resale and occupancy restrictions for the residential unit on the Property, and (iii) to restrict the Property with this Resale Restriction for a period of forty -five (45) years following each sale of the Property; all to be binding on Owner and all subsequent purchasers of the Property. NOW, THEREFORE, City and Owner hereby declare and restrict the Property as follows: 1. Definition of Owner and Acknov Property from Owner and any subsequent City of Poway \SHONI %ReWeRestnctions Any purchaser of the from such purchaser or successors is each c ) 14317 referred to as "Owner "through the balance of this Resale Restriction. Each Owner shall certify his/her acknowledgment of this Resale Restriction and all the provisions and restrictions contained herein. Each Owner shall certify his /her acknowledgment by executing the form attached as Exhibit `B." 2. Warranties of Owner Each Owner warrants to City as follows: (a) that he /she is (i) a first -time homebuyer; that is, he or she has not owned a home within the three -year (3 -year) period immediately preceding the date of the purchase of the Property; or (ii) a displaced homemaker. "Displaced homemaker" shall have the meaning ascribed to it in the Family Code of the State of California, as amended from time to time; (b) that he /she will occupy the Property as his /her or their principal place of residence, throughout his/her or their ownership of the Property during the "Affordable Term ", as defined below. The Owner shall be considered as occupying the Property as a principal place of residence if the Owner is living on the Property for at least ten (10) months out of each calendar year. Owner shall not lease or rent the Property for more than thirty (30) days per calendar year; (c) that Owner's annual gross income does not exceed one hundred percent (100 %) of the median income for the San Diego County metropolitan area, as adjusted for family size, as said median income is determined by the Department of Housing and Community Development, as amended from time to time, on the date of the recordation of the Lender Deed of Trust; and (d) that Owner does not hold, directly or indirectly, "net family assets ", as defined in 25 Cal. Code of Regulations Section 6914, whose aggregate value exceeds those limits referenced within 25 Cal. Code of Regulations Section 6914. 3. Restrictions on Transfer (a) Forty -Five Year Affordable Term During the "Affordable Term", as defined below, any transfer of the Property shall be subject to the provisions of this Resale Restriction. Any subsequent transfer by the Owner to a subsequent Owner shall also be subject to the provisions of this Resale Restriction until the end of the subsequent Owner's Affordable Term. The parties intend to restrict the sale and occupancy of the Property for the "longest feasible time," as defined in California Health & Safety Code § §33334.3 and 33413, which sections define the "longest feasible time" to include "unlimited duration." (b) Affordable Term Defined The "Affordable Term" shall be the period of forty - five (45) years measured from the date each Owner obtains ownership or any interest in the Property, and provided that such ownership or any interest in the Property is transferred prior to expiration of the Affordable Term, then the Affordable Term shall begin anew from the date each subsequent Owner obtains ownership or any interest in the Property and shall run for forty - five (45) years beginning on such date. CItYGIPOWay \SHOPU DResaleResWrnons 2 L4318 (c) Sale Defined The following shall all be considered transfers or sales of the Property and.shall be referred to herein generally as a "Sale ": (i) all or any part of the Property or any interest in the Property is sold, conveyed or transferred, (ii) if Owner is not a natural person and a beneficial interest in Owner is sold, conveyed or transferred, (iii) all or any part of the Property is refinanced, except as provided in (d) below, (iv) Owner does not occupy the Property as his, her, or their, primary residence, (v) any material breach of the Note, Note Rider, this Resale Restriction or the City Deed of Trust, (vi) filing bankruptcy, or (vii) transfer to one spouse after a divorce. The term "Sell," may be used herein in place of the term "Sale," where appropriate and as used herein shall mean a Sale. (d) Exclusions from Definition of Sale Notwithstanding the foregoing, a refinancing of the Property shall not be considered a Sale, provided either: (1) The principal balance of Owner's loan after the refinancing, does not exceed the principal balance of Owner's loan before the refinancing, plus reasonable closing costs; or (2) Both of the following conditions are met, and provided that the City provides advance written consent to the Owner of the refinancing: (i) the Owner receives cash from such refinancing, which does not exceed ten percent (10 %) of the principal balance of Owner's loan before the refinancing; and (ii) such cash is borrowed for the purpose of and is used for improvements to the Property, which improvements are preapproved by the City prior to Owner's obtaining the refinancing. 4. Maintenance and Inspection of Property Owner shall maintain the Property and the improvements thereon in good condition and repair and in compliance with the standards promulgated from time to time by the City, throughout the Owner's period of ownership of the Property. In addition, upon City's receipt of a Notice of Intent to Transfer as detailed in Section 5 below, City shall be given the right to enter and to inspect the Property to determine whether any violations of applicable building, plumbing, electric, fire, housing or other applicable codes exist and whether the Property has been maintained in good condition, upon reasonable written notice of not less than ten (10) days. City shall notify Owner with regard to any noted code violations and maintenance deficiencies (collectively, the "Deficiencies "), and Owner shall cure the Deficiencies in a reasonable manner acceptable to the City within sixty (60) days of being notified in writing of the result of the inspections. 5. Notice of Transfer In the event the Owner intends to Sell the Property, the Owner shall: (a) Promptly notify City in writing of such intent ( "Notice of Intent to Transfer ") prior to notifying the public of such intent, including, without limitation, prior to notifying real estate brokers or lenders of Owner's intent to Transfer the Property and prior to listing the Property on the Multiple Listing Service (hereinafter referred to as the "Notice of Intent to Transfer, ") by certified mail return receipt requested, to the City of Poway, 13325 Civic Center Drive Poway, CA 92064 , Attention: Housing Program Manager, or such other address as the City may hereafter designate in writing. The Owner has the right to withdraw the Notice of Intent to Transfer prior to the opening of escrow to purchase the property; 3 City offtw y%SHOPV W%R1.11R1.nd1on5 1 4319 (b) Within fifteen (15) days of the delivery of the Notice of Intent to Transfer, the Owner shall obtain and deliver to the City a current written report of inspection of the Property by a licensed, structural pest control operator; (c) Prior to the close of escrow on the Transfer, the Owner shall repair all damage noted in the pest report including damage caused by infestation or infection by wood - destroying pests; (d) Within fifteen (15) days of delivery of the Notice of Intent to Transfer, the Owner shall allow the City to inspect the Property to determine its physical condition; (e) If the Property is vacant, the Owner shall maintain utility connections until the close of escrow on the transfer; and (1) In the event of a purchase of the Property by the City, the Owner shall permit a final walk - through of the Property by the City. 6. Determination of Maximum Restricted Resale Price (a) Calculation of Maximum Restricted Resale Price Except as otherwise provided herein, the amount of money and /or other consideration that any Owner may receive for any Sale of the Property shall be called the "Maximum Restricted Resale Price." The Maximum Restricted Resale Price shall be the lesser of: (i) the Fair Market Value, as defined in Section 6(f), below; and (ii) the purchase price which would result in a Monthly Housing Cost, as determined by the City, which does not exceed the sum of: (A) the product of one twelfth (1/12) of thirty-five percent (35 %) times one hundred percent (100 %) of median income for the San Diego metropolitan area, as adjusted for household size appropriate to the unit, plus (B) the Owner's four percent (4 %) downpayment. Notwithstanding the foregoing or anything contained herein to the contrary, under no circumstances shall the Maximum Restricted Resale Price be less than the sum of the current balance of the First Lien ( "First Lien" means the lien of the institution making the purchase money loan to an Owner for the purchase of the Property and/or any acceptable refinancings), plus the Owner's share of escrow, title and other closing costs as set forth herein. (b) Insurance Coverage Insurance premiums shall be the average of three quotes obtained by the City for the coverage required for the First Lender Deed of Trust. The deductible for the insurance shall not exceed the sum of Five Hundred Dollars ($500.00) per occurrence. (c) Monthly Housing Cost As used herein "Monthly Housing Cost" means all of the following associated with the Property, estimated or known as of the date of the proposed Sale of the Property: (i) principal and interest payments on a thirty -year, fixed -rate mortgage loan at the then currently prevailing market rate of interest, and any loan insurance fees associated therewith (except for a refinancing with cash out, if allowed under Section 3(c)(2), above, under no circumstances shall Borrower or any purchaser obtain a mortgage loan that contains an adjustable interest rate); (ii) property taxes, assessments, including Mello Roos fees, if applicable; (iii) fire and casualty insurance covering replacement value of property Cnyo (Poway \SHOPU f61, WmIeResmcuons 4 14320 improvements (to the extent not covered by the homeowner association encompassing the Property); (iv) any homeowner association fees; (v) private mortgage insurance, if applicable; and (vi) reasonable costs of utilities. Monthly Housing Cost of the Owner shall be an average of estimated costs for the next twelve (12) month period as of the date of the Notice of Intent to Transfer. (d) Capital Improvements The Maximum Restricted Resale Price shall be increased by a sum equal to any capital improvements to the Property, valued at their original cost plus interest at the legal rate on such improvements to the date of resale, approved by the City in writing, prior to their installation, during the term of the Owner's ownership and reasonable closing costs and marketing expenses (e) Maximum Restricted Resale Price Calculation Requests At any time during the term of this Resale Restriction, an Owner may obtain a written calculation showing the amount of the Maximum Restricted Resale Price for the Property and its method of calculation from the City, by requesting the same in writing, provided that such calculation may not be obtained more frequently than once per calendar year during the term of the Note. (f) Determination of Fair Market Value If it is necessary to determine the Fair Market Value of the Property, it shall be determined by a certified MAI or other qualified real estate appraiser approved in advance by the City. If possible, the appraisal shall be based upon the sales prices of comparable properties sold in the market area during the preceding three (3) month period. The cost of the appraisal shall be paid by the Owner, unless the appraisal is obtained from a new purchaser. Nothing in this section shall preclude the Owner and the City from establishing the Fair Market Value of the Property by mutual agreement in lieu of an appraisal pursuant to this section. 7. City's Election to Exercise Option or Require Sale to an Eligible Purchaser Within forty- five (45) days after receipt by the City of the Notice of Intent to Transfer and before Owner has opened escrow with another buyer, provided that City shall have a minimum of thirty (30) days from the date the City receives the Notice of Intent to Transfer, the City shall in its sole discretion notify the Owner of one of the following: (a) notify the Owner regarding whether or not the City intends to exercise its Option to purchase the Property, as provided in Section 8, below; (b) notify the Owner that the Owner may only Sell the Property to an Eligible Purchaser, as defined hereinbelow, for the Maximum Restricted Resale Price, as provided in Section 9, below, in which event, such Eligible Purchaser shall assume all of the obligations of Owner under the Note, the Resale Restriction and the Deed of Trust; or (c) notify the Owner that-the Owner may only Sell the Property to an Eligible Purchaser designated by the City for the Maximum Restricted Resale Price, as provided in Section 10, below, in which event, such Eligible Purchaser shall assume all of the obligations of Owner under the Note, the Resale Restriction and the Deed of Trust. 5 Gty of Po yISHOn) MReseleRmnchous 0 0 14321 8. City's Option to Purchase the Property The Owner hereby grants an option (the "Option ") to the City to purchase.the Property on.the following terms and conditions: (a) Grant of Option Owner hereby grants to City the Option to purchase the Property on.the terms,and conditions set forth herein. The purchase price payable by the City to the Owner for the Property (the "Option Price ") shall be the greater of (i) the Maximum Restricted Resale Price,,as defined in Section 6 hereof, or (ii) the sum of the then current balance of the First Lender Deed of Trust, plus the Owner's share of escrow, title and other closing costs. The Option created hereby shall be irrevocable by Owner and shall be binding upon the successors and assigns of Owner. The City shall have the right of specific performance to enforce the terms of this Option. (b) Term and Consideration for Option The term of the Option shall commence on the date that title to the Property is recorded in the name of Owner, and shall expire forty-five (45) years thereafter. Notwithstanding the foregoing, if ownership or any interest in the Property is transferred prior to expiration of such forty -five (45) year period, then the term of the Option shall commence on the date that title to the Property is recorded in the name of a subsequent Owner, and shall expire forty-five (45) years thereafter. (c) Exercise of Option The Option may be exercised_ by (i) the City's delivery to Owner of written notice of such exercise (the "Exercise Notice "), at any time after receipt by the City of the Notice of Intent to Transfer and before Owner has opened escrow with another buyer, provided that City shall have a minimum of thirty (30) days to exercise the Option; or (ii) in the event of any default the Note, the City Deed of Trust or the Resale Restriction. hi the event that the City exercises the Option as the result of an event of any default under the Note, the City Deed of Trust or the Resale Restriction, but the Owner cures the default prior to the sale of the Property to the City, the City's exercise of the Option shall be deemed revoked. The revocation of the exercise of the Option shall not "terminate the Note or preclude the City from subsequently exercising the Option' upon a later event of default. (d) Escrow and Completion of Sale Within five (5) days after City has exercised the Option, or as soon thereafter as reasonably practicable, an escrow shall be opened with Chicago Title Escrow or such other escrow company as determined by City for the conveyance of the Property to the City. The City shall deposit the Option Price in escrow not later than one (1) business day prior to the anticipated close of escrow date. The City's obligation to close escrow shall be subject to the City's approval of.a then current preliminary title report and, at City's option, environrifental and other site testing. Any exceptions shown on such preliminary title report created on or after. the Owner's acquisition of the Property shall be removed by Owner at its sole expense prior to the close of escrow, unless such exception(s) is(are) accepted by City in its reasonable discretion; provided, however, that City shall accept the following exceptions to title: (i) current taxesnot yet delinquent, (ii) matters affecting title existing on the date of Owner's acquisition of the Property, (iii) liens and encumbrances in favor of the City, (iv) the First Lender Deed of Trust, (v) the Note, and (vi) matters shown as printed exceptions in Owner's standard form CLTA owner's policy of title insurance. The parties shall each be responsible for one -half of the escrow fees, documentary transfer taxes, recording fees and any other costs and expenses of the escrow, and the Owner shall be responsible for the cost of a CLTA owner's policy of title insurance. City shall have thirty (30) days after exercise of the Option to enter upon the Property to conduct any tests, C+tyuWon ay \SHOP\IO /,ResaleResincl ins 6 0 9 14322 inspections, investigations, or studies of the condition of the Property. Owner shall permit the City access to the Property for such purposes. Escrow shall close promptly after acceptance by City of the condition of title and the.physical and environmental condition of the Property, and in no event later than ninety (90) days after the date that the City has exercised the Option. Until such closing, the terms of the Note and the documents executed and recorded pursuant hereto shall remain in full force and effect. 9. Sale of the Property to an Eligible Purchaser at or Below the Maximum Restricted Resale Price Upon receipt of the Notice of Intent to Transfer, the City shall have the right, but not the duty, to require that the Owner may only sell the Property to an Eligible Purchaser in the manner set forth in this Section 9. At any time_after receipt by the City of the Notice of Intent to Transfer and before Owner has opened escrow with another buyer, provided that City shall have a minimum of thirty (30) days from the date the City receives the Notice of Intent to Transfer, the City shall notify the Owner regarding whether or not the City intends to require the Owner to sell the Property to an Eligible Purchaser. Except as otherwise provided in this Resale Restriction, if a Sale of the Property occurs during any Affordable Term, then said Sale shall be subject to the following: (a) The Property may only be sold, transferred or conveyed to a subsequent purchaser (i) whose income is less than one hundred percent (100 %) of the median income for the San Diego metropolitan area, as adjusted for family size and as verified and approved by the City, and (ii) who does not hold, directly or indirectly, "net family assets ", as defined above, whose aggregate value does not exceed those limits allowed in 25 California Code of Regulations Section 6914. (b) The Property must be used only as the principal residence of the subsequent purchaser during the time of ownership. (c) The sale price to the subsequent purchaser must be at or below the Maximum Restricted Resale Price. (d) The subsequent purchaser must be (i) a first -time homebuyer, that is, he or she has notowned a home within the three -year (3 -year) period immediately preceding the date of the purchase of the Property; or (ii) a displaced homemaker, as defined above. (e) This Resale Restriction shall remain in effect for forty-five (45) years from the date title records in the name of the new Owner, and provided that such ownership or any interest in the Property is transferred prior to expiration of the Affordable Term, then the Affordable Term shall begin anew from the date title records in the name of each subsequent Owner and shall remain in effect for forty -five (45) years beginning on such date. (f) The purchaser of the Property assumes all of the obligations of Owner under the Note, this Resale Restriction and the Deed of Trust. In which event, the term of the Note will start over and will run for 45 years from the date title records in the name of the new Owner. (g) Provided Owner Sells the Property to a person or persons meeting the requirements of paragraphs 9(a) through 9(f), inclusive (herein an "Eligible Purchaser "), before City of Yoway�HOM)ODY.Re eR nnwv 0 14323 the end of the Affordable Term as defined in paragraph 3(a), the City shall recapture from such Sale a share of the,Equity as provide&in Section 11 hereof. 10. City's 'Right to,Designate Eligible Purchaser Upon receipt of the Notice of Intent to Transfer, the City shall have the right, but not the duty, to designate an Eligible Purchaser to purchase the Property from its list of interested buyers. At any time after receipt by the City of the Notice of Intent to Transfer and before Owner has opened escrow with another buyer, provided that City shall have a minimum of thirty (30) days from the date the City receives the Notice of Intent to Transfer, the City shall notify the Owner regarding whether or not the City intends to exercise its right to designate an Eligible Purchaser. The notification to the Owner regarding the right to designate an Eligible Purchaser shall be sent by certified mail, return receipt requested. If the City exercises this right to de_ signate an Eligible Purchaser, the City shall cause an escrow for the purchase of the Property to be opened within thirty (30) days following such notification to the Owner, and the designated Eligible Purchaser shall purchase the Property within ninety (90) days following the receipt by the City of the Notice of Intent to Transfer. The City designated buyer shall be prequalified by a lender approved by the City. . 11. Equity Sharing (a) Equity Shared Between Owner and City Upon a ,Sale of the Property to an Eligible Purchaser during an Affordable Term, then upon such Sale the City shall receive from the proceeds of such Sale, an amount equal to the City's Equity Share multiplied by the Equity, as such terms are defined.below. Provided, however, that if there are insufficient funds resulting from the Sale of the Property to fully pay off the Note and the City's Equity Share, then City shall recapture the entire net proceeds from such Sale. The net proceeds of Sale means the sale price0 the Property minus the repayment of all loans prior to the City Loan minus closing costs. Prepayment of the Note shall not affect Owner's obligation to share the Equity as provided herein and, as provided in the Resale Restriction. (b) Calculation of Equity Sharing (1) Initial Equity Shares The City's initial share, of the Equity shall be forty - four percent (44 %) (the "City's Initial Equity Share ") and the Owner's initial share of the Equity shall be fifty -six percent (56 %)°(the "Owner's Initial Equity Share "). The City's Initial Equity Share, as provided in the immediately foregoing sentence, is calculated by dividing (i) the original principal amount of the Note; by (ii) the initial purchase price of the Property. The City's Initial Equity Share will not change as a result of the assumption of the Note by an Eligible Purchaser. (2) Reduction in City's Equity Share In the event of a Sale, the City's Equity Share and the Owner's Equity Share, shall be the percentages provide_ d in the following table < (the - City's Equity Share will not change as a result of the assumption of the Note by an Eligible Purchaser): cuyofpoway�110PV WnMesaleR"16010ns Ll • 14324 If the Closing'of the The City's Equity Share The Owner's Equity Share Will Sale Occurs: Will Be: Be: more than 5 years, but City's Initial Equity Share minus Owner's Initial Equity Share plus less than 15 years one (1) percentage point one (1) percentage point after the date of the Note more than 15 years, City's Initial Equity Share minus Owner's Initial Equity Share plus but less than 30 years two (2) percentage points two (2) percentage points after the date of the Note more than 30 years, City's Initial Equity Share minus Owner's Initial Equity Share plus but less than 45 years three (3) percentage points three (3) percentage points after the date of the Note 45 or more years after City's Initial Equity Share minus Owner's Initial Equity Share plus the date of the Note four (4) percentage points four (4) percentage points (c) Equity Defined Equity means the dollar amount that constitutes the difference between the Maximum Restricted Resale Price and the sum of the following amounts: (1) the outstanding principal of the First Note and First Lender Deed of Trust, as such terms are defined in the Note; (2) the original principal of the Note and the City Deed of Trust; (3) all amounts actually paid by the Owner to purchase the Property, including (i) Owner's downpayment, if any, not including the City Loan, (ii) escrow fees, (iii) transfer taxes, (iv) recording fees, (v) brokerage commissions and (vi) similar costs of acquisition actually paid by the Owner, plus not less than the legal rate of interest on those cash payments. Provided, however, that the foregoing, amounts shall not be included to the extent any of the foregoing amounts, or any portion thereof, were "rolled into" or paid out of the Note or the First Note; and (4) amounts actually paid by the Owner for capital improvements to the Property, provided such improvements were preapproved by the City prior to construction of such improvements and provided that such improvements have been documented to the satisfaction of City, plus not less than the legal rate of interest on those cash payments. (d) No Additional Interest Except in the event of a default under the terms of the Note, the City Deed of Trust and/or this Resale Restriction, interest shall not accrue on the Note and the entire amount which the City shall be entitled is the amount determined in this Section. 9 City of Poway \SHOP W /ResaleRestnoions 0 • 14325 12. Sale After Affordable Term In the event that an Owner owns the Property for forty -five (45) years.and the Affordable Term applicable to that Owner expires, then the Note shall become due and payable in full at such time. 13. Defaults and Remedies Upon a violation of any of the provisions of this Resale Restriction, the City shall give written notice to the Owner by certified mail return receipt requested, specifying the nature of the violation. If the violation is not corrected to the satisfaction of the City within 'a reasonable period of time, not longer than thirty (30) days after the date the notice is mailed, or within such further time as the City determines is necessary to correct the violation, the City may declare a default under this Resale Restriction. Upon the declaration of a default, the City may apply to a court of competent jurisdiction for specific performance of the obligations of this Resale Restriction, for an injunction prohibiting a proposed transfer in violation of this Resale Restriction, for a declaration that a transfer in violation of the provisions of this Resale Restriction is void, or for any such other relief at law or in equity as may be appropriate. In addition, the City may declare the note immediately due and payable and if unpaid may foreclose under the Note and City Deed of Trust and/or may exercise its option to acquire the Property. In the event of a default by the Owner, and/or by the Owner's transferee in those circumstances where a transfer has occurred in violation of this Resale Restriction, the Owner and/or the Owner's transferee shall hold the City and the Owner and their respective employees or other agents harmless and reimburse the expenses, legal fees and costs for any action the City takes in enforcing the provisions of this Resale Restriction. 14. Non - liability of the City In no event shall the City become in any way liable or obligated to the Owner or to any successor -in- interest of the Owner by reason of its Option to purchase the Property, nor shall the City be in any way obligated or liable to the Owner or any successor -in- interest of the Owner for the City's failure to exercise such Option to purchase the Property. 15. Binding on Successor and Assigns This Resale Restriction shall bind, and the benefit hereof shall inure to, the Owner, subsequent Owners, and to their respective heirs, legal representative executors, successors in interest and assigns, and to the City and its successors. Provided, however, upon a release of this Resale Restriction, either through a foreclosure or the receipt of a deed in lieu of foreclosure by the holder of the First Lien, this Resale Restriction, shall not thereafter reattach. 16. Subordination This Resale Restriction may be recorded in second lien priority position to a first priority institutional lender financing the Owner's purchase of the Property. 17. General Provisions (a) Invalid Provisions if any one or more of the provisions contained in this Resale Restriction shall for any reason be held to be invalid, illegal or unenforceable in any respect then such provision or provisions shall be deemed severable from the remaining provisions contained in this Resale Restriction, and this Resale Restriction shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If a court of competent jurisdiction determines, by way of final unappealable order or judgment, that the interest rate charged under the Is Qt,.W..,y SHOVUW,'R.Il Rawd 10 0 14326 Note secured by this Resale Restriction is usurious, then such rate shall automatically and retroactively be reduced to the maximum rate allowed under applicable law. (b) Controlling Law The terms of this Resale Restriction shall be interpreted under the laws of the State of California. (c) Notices All notices required herein shall be sent to the City by certified mail return receipt requested, as follows: City of Poway Attn: Housing Program Manager 13325 Civic Center Drive Poway, CA 92064 or such other address that the City may subsequently request in writing. Notices to the Owner shall be sent by certified mail return receipt requested to the Property address. (d) Interpretation of Restriction Covenants The terms of this Resale Restriction shall be interpreted to encourage to the extent possible that the Maximum Sales Price of and mortgage payments for the Property remain affordable to households earning one hundred percent (100 %) of the median income for the Metropolitan Statistical Area of San Diego County as adjusted annually and as further adjusted for household size. (e) Non - Discrimination Covenants The Owner covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, age or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Owner itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing covenants shall run with the land. (f) Written Consent of City Required Before Transfer During the Affordable Term, the Property, and any interest therein, shall not be conveyed by any Transfer or refinancing, except as expressly provided in this Resale Restriction, except with the express written consent of the City. (g) Monitoring The Owner shall annually report to the City, in writing, confirming that they continue to reside in the Property, have not leased or rented the Property for more than the allowed, period of time, providing evidence of insurance, evidence of the payment of taxes, if not impounded, and any and all other information reasonably needed by the City to assure compliance with the terms of this Resale Restriction on a form or forms prepared by the City. Within 15 days of a written request from the City to the Owner, Owner shall respond with all information requested to enable the City to complete its monitoring responsibilities under the terms of this Resale Restriction. Failure to completely and timely comply with requests shall be deemed a material default under the terms of this Resale Restriction. 11 City of Pnw y \SIIOM I MRMIeRe tnuions 0 0 14327 IN WITNESS' WHEREOF, the parties have executed this Resale Restriction on or as of the date first written above. City of Poway R, IS IPUMU`2 i► M <Attach Notary Acknoivledgment> OWNER: Print Name: Patrick S. Reynolds Cl�yofl'oway\SHO %100° /RcseleRennctionz 12 tr 0 ACKNOWLEDGMENT State of California ) County of San Diego ) 0 14328 On CVm 1 2005, before me, rl C:tN rt)b /i C, per sonally appeared _ 2+0 CL S @Oa 4I v 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 "OPTION AGREEMENT, OPTION TO DESIGNATE PURCHASER AND AFFORDABLE HOUSING RESALE RESTRICTIONS" and acknowledged to me that he /oe /tt)iey executed the same in his/Ver /Ofeir authorized capacity(ies), and that by his/lAr /jfieir signature(s) on the instrument the person(s), or the entity on behalf of which the person(s) aEted, executed the instrument. and official seal. Commission # 1569558 ®�- Notary Public - California San Diego County My Comm. EXpires May 13,2C Signature 13 City of Pow y\ HOP \I Milt eleRennniom 0 0 14329 CALIFORNIA ALL- PURPOSE ACKNOWLEDGMENT State of California County of A '/� I On Dat, personally appeared SHRMOOLLM C I , 1, 014"353 aMComn. BOt�e01d41 :2007 I ss. personally known to me ❑ proved to me on the evidence basis of satisfactory to be the persort(ej' whose name( subscribed to the within instrument and acknowledged to me,that et�Wlhvj executed the same in (Qfyer/11Yre1'r authorized capacity(iee�, and that by Glh~ signature(srn the instrument the person(S)'or the entity upon behalf of which the persons} acted,; executed the instrument. I ESS� hand a d• ffi ial seal. Sjgaatjorgkaary Public OPTIONAL Though the information below is nol required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description.of Attached Title or Type of Document: `) 1+0 P 'Ml fHv UO C s Document Date: QI J Number of Pages: Signer(s) Other, Than Named Above: Capacity(ies) Claimed'by Signer's.Name: ❑ Individual Top of thumb here ❑ Corporate'Officer'— Ttle(s): ❑ Partner — ❑Limited El General ❑ Attorney-in-Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: O 1999 Nal,onal Notary Assoc,alpn 9350 0e Solo Avo, P.0 Boa 2.02 • Ch.M.0, CA 91313.242 • nvnv .I.alnoteryag Pmtl No. 507 Reauat r. Call ToliFree 1 -8 878 7 • ACKNOWLEDGMENT State of California County of San Diego On , 2005, before me, 0 14330 personally appeared, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is /are subscribed to the within instrument "OPTION AGREEMENT, OPTION TO DESIGNATE PURCHASER AND AFFORDABLE HOUSING RESALE RESTRICTIONS" and acknowledged to me that he /she /they executed the same in his/her /their authorized capacity(ies), and that by his/her /their signature(s) on the instrument the person(s), or the entity on behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) Cg.ft.y'SHOMIW/.RCWeRe iami 14 14331. 'LEGAL DESCRIPTION 'LOT 152 OF POWAY VALLEY UNIT NO., 2,, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF N0, 3995, FILED IN THE OFFICE'OF THE COUNTY RECORDER OF SAID SAN DIEGO COUNTY'OCTOBER 22, 1958. . DESCLTR- o9 /66 /94bk F-- 1 EXHIBIT "A" Property Description 0 14332 15 City of Pow y%SISORlW,6RemleRe t+iaiom 0 w CALIFORNIA ALL- PURPOSE ACKNOWLEDGMENT State of California County of San Ui eQc } ss. mcjn On clgav4ror m �J (TfQ A PUID)lC Data ,� Name and Tine of OfAcm (mg.. •Jana Doa, Notary Public personally appeared %1 �l C 5 rR� nLIO(S 14333 ❑ personally known to the proved to me on the basis of satisfactory evidence MARY C. HOFF o to be the perso whose name�4) is /g/e 6mv commis # t56955a [ subscribed to the within instrument and Notory loubilc- Callfomla' acknowledged�to me that he /st AVey executed san Oleg county the sam in his /hg*/th /lr authorized Comm.F Tres Moyt3,20D9 capacity(i ), and that y his /h�r /t it si natureon the instrument the person or the entit upon behalf of which the I on(� acted, executed theInstrument. 1 ESS my h rtd and official seal Place Notary Seal Awn gat a Notary PuOi c OPTIONAL Though the information below,is,not'required by law, it may prove valuable lopersons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages Signers) Other Than Named Above: Capacity(ies) Claimed by'Signer Signer' s'Name: _ ❑ Individual - _' ❑ Corporate Officer —,Title(s): Top al thumb here ❑ Partner —❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: O 1999 Naha' NoorY Ass tm •4150 a Sete An.. P.O. Boa 2a02 • ( apr re. CA 91310.2a32 • rwr+uoetaNOary.oq Pm6 No. 5807 Paeteer. CO ToY -Frea 1:000.B]bg9]) MU EXHIBIT "B" City of Poway ACKNOWLEDGMENT OF AFFORDABLE RESTRICTIVE COVENANTS The undersigned acknowledges as follows: 1. I have purchased the property at 13832 Frame Road, Poway, California. Z. There is recorded against this property a certain Option Agreement and Affordable Housing Resale Restrictions recorded Instrument No. ( "Resale. Restriction'). 3. 1 meet the current requirements, established by the City in order to be deemed an "Eligible Purchaser" as defined in the Resale Restriction. 4. I have read and fully understand the Resale Restriction.and have had the opportunity to ask City staff and my own attorney any questions I have about the document. I understand that I will.not be able to sell the Property for its fair market value daring the term of the Resale Restriction and that the Resale'Restrictibn limits the price I can sell the Property for. and how much of the equity 1 will be able to receive. 5. I understand that.this document runs with the land and is binding on me when I decide to transfer or sell the property, and I agree to comply fully with its terms. OWNER: Dated: 0��s Cliyukf'­, Pant Name: Patrick S. Reynolds l( • EXHIBIT, A • 14335 LOT 152 OF POWAY VALLEY UNIT NO_., 2, IN THE CITY 0F'POWAY, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAPTHEREOF NO,, 3995 .FILED IN THE OFFICE OF THE COUNTY RECORDER OF'SAID,SAN DIEGO''COUNTY, OCTOBER�22, 1958.