Del Mar City Council
July 25, 2022

Chapter 24.65 DEVELOPMENT AGREEMENTS1

24.65.010 Purpose.

The purpose of this Chapter is to establish procedures and requirements for the City's consideration of development agreements upon application by, or on behalf of, a property owner or other person having a legal or equitable interest in the property which is to be the subject of a development agreement. In adopting this Chapter, the City Council has considered the Community Plan (General Plan) of the City of Del Mar, and the legislative findings and declarations set forth in Section 65864 of the Government Code. (Ord. No. 811, § 1(part), 2008)

24.65.020 Development agreement—Authorized.

Pursuant to the provisions of Chapter 2.5 of Division 1 of Title 7 of the Government Code (Sections 65864 et seq.), the City Council is hereby authorized to enter into development agreements upon application by, or on behalf of, a property owner or other person having a legal or equitable interest in the property which is the subject of the proposed agreement.
(Ord. No. 811, § 1(part), 2008)

24.65.030 Same—Application, fees.

A. A developer wishing to enter into a development agreement with the City shall submit to the Director of Planning and Community Development a written application on a form provided by the Director of Planning and Community Development.

B. The Director of Planning and Community Development may require the developer to submit such additional information and supporting data as may be considered necessary to properly evaluate the proposed development agreement.

C. The written application required herein shall be accompanied by a nonrefundable processing fee in an amount as set by Resolution of the City Council.
(Ord. No. 811, § 1(part), 2008)

24.65.040 Proposed form of agreement.

Each application shall be accompanied by the form of development agreement proposed by the applicant. (Ord. No. 811, § 1(part), 2008)

24.65.050 Review of application.

The Director of Planning and Community Development shall review the application to determine whether or not it is complete. If it is found that the application is complete, the Director of Planning and Community Development shall accept it for filing. If the application is found to be incomplete, the Director of Planning and

1Note(s)—For the statutory provision regarding development agreements, see Government Code §§ 65864 et seq. 37 July 25, 2022 Item 11

Community Development shall refuse to accept the application for filing and shall inform the applicant of the items necessary to properly complete the application.
(Ord. No. 811, § 1(part), 2008)

24.65.060 Development agreement—Hearing by Planning Commission.

A. The Director of Planning and Community Development shall refer all applications for development agreements to the Planning Commission for a public hearing.

B. Upon receipt of the application, the Planning Commission shall set a date for the public hearing.

C. The Director of Planning and Community Development shall insure that the public is given proper notice of said public hearing in accordance with Section 24.65.070. (Ord. No. 811, § 1(part), 2008)

24.65.070 Public hearing, notice.

Any public hearing held pursuant to the provisions of this Chapter shall be noticed as follows:

A. Time and Manner of Notice. Notice shall be given at least ten calendar days before the hearing in the following manner.

1. Publication at least once in a newspaper of general circulation, published and circulated in the City.

2. Notice of the hearing shall be mailed or delivered at least ten days prior to the hearing to the owner of the subject real property or the owner's duly authorized agent, and to the project applicant.

3. Notice of the hearing shall be mailed or delivered at least ten days prior to the hearing to each local agency expected to provide water, sewage, streets, roads, schools, or other essential facilities or services to the project, whose ability to provide those facilities and services may be significantly affected.

4. Notice of the hearing shall be mailed or delivered at least ten days prior to the hearing to all owners of real property as shown on the latest equalized assessment roll within 300 feet of the real property that is the subject of the hearing. In lieu of utilizing the assessment roll, the City Clerk may utilize the records of the County Assessor or Tax Collector which contain more recent information than the assessment roll. If the number of owners to whom notice would be mailed or delivered pursuant to this Subsection or Subsection 2. is greater than 1,000, the City Clerk, in lieu of mailed or delivered notice, may provide notice by placing a display advertisement of at least one-eighth page in a newspaper of general circulation within the City of Del Mar at least ten days prior to the hearing.

5. If the notice is mailed or delivered pursuant to Subsection 4., the notice shall also be posted at least ten days prior to the hearing in at least three public places in the City of Del Mar, including one public place in the area directly affected by the proceeding.

B. Content of Notice. The notice required herein shall contain the following information:

1. The date, time and place of the hearing.

2. The identity of the body conducting the hearing.

3. A general explanation of the matter to be considered. 38 July 25, 2022 Item 11

4. A general description, in text or by diagram, of the location of the real property that is the subject of the Development Agreement.

5. Other information required by specific provision of these regulations or which the City, through its Department Heads, may consider necessary or desirable.

C. Declaration of Existing Law. The notice requirements referred to in Subsections A. and B. are declaratory of existing law (Government Code § 65867 and §§ 65090 and 65091 as referenced therein).

If State law prescribes a different notice requirement, notice shall be given in that manner.

D. Failure to Receive Notice. The failure of any person so entitled to receive the notice required herein shall not affect the authority of the City to enter into a development agreement. (Ord. No. 811, § 1(part), 2008)

24.65.080 Conduct of hearing.

The public hearing held pursuant to this Chapter shall be conducted as nearly as may be possible in accordance with the procedural standards adopted under Government Code § 65804 for the conduct of zoning hearings. Each person interested in the matter shall be given an opportunity to be heard. The applicant shall have the burden of proof at the public hearing on the proposed development agreement. (Ord. No. 811, § 1(part), 2008)

24.65.090 Irregularity in proceedings.

No action, inaction or recommendation regarding the proposed development agreement shall be held void or invalid, or be set aside by a court by reason of any error, irregularity, informality, neglect or omission, ("error") as to any matter pertaining to petition, application, notice, finding, record, hearing, report, recommendation, or any matters of procedure whatever unless after an examination of the entire case, including the evidence, the court is of the opinion that the error complained of was prejudicial and that by reason of the error the complaining party sustained and suffered substantial injury, and that a different result would have been probable if the error had not occurred or existed. There is no presumption that error is prejudicial or that injury was done if error is shown.
(Ord. No. 811, § 1(part), 2008)

24.65.100 Determination by Planning Commission.

A. After the hearing by the Planning Commission, the Planning Commission shall forward its written recommendation and the application to the City Council. The recommendation shall include the Planning Commission's determination of whether or not the development agreement proposed:

1. Is consistent with the objectives, policies, general land uses and programs specified in the general plan and any applicable specific plan;

2. Is compatible with the uses authorized in, and the regulations prescribed for the land use district in which the real property is located;

3. Is in conformity with public convenience, general welfare and good land use practice;

4. Will be detrimental to the health, safety and general welfare;

5. Will adversely affect the orderly development of property or the preservation of property valued.

B. The recommendation shall include the factual bases for said determinations. 39 July 25, 2022 Item 11

(Ord. No. 811, § 1(part), 2008)

24.65.110 Development agreement—Hearing by City Council.

A. Upon receipt of the application and the written recommendation of the Planning Commission, the City Council shall set a date for a public hearing on the matter.

B. The City Clerk shall insure that the public is given notice of the public hearing in accordance with Section

24.65.070.

C. The public hearing shall be conducted as required by Section 24.65.080. (Ord. No. 811, § 1(part), 2008)

24.65.120 Action by City Council.

A. After the public hearing, the City Council may approve, modify or disapprove the recommendation of the Planning Commission. It may refer back to the Planning Commission, for report and recommendation, matters not previously considered by the Planning Commission.

B. Upon receipt of a referral as set forth in Subsection A., the Planning Commission, without further public hearing, shall consider the new matters and report its recommendations in writing to the City Council within 40 days after receipt of said referral. Failure to act within the 40-day limit shall constitute a favorable endorsement on the matters set forth in the referral.

C. If the City Council approves the development agreement it shall do so by ordinance. (Ord. No. 811, § 1(part), 2008)

24.65.130 Requirements for approval.

No development agreement may be approved by the City Council unless all of the following conditions are met:

A. The City Council must find that:

1. The provisions of the agreement are consistent with the Community Plan and any applicable specific plan, and

2. The development agreement complies with all applicable zoning, subdivision, and building regulations and with the general and any relevant specific plan.

B. The agreement must state:

1. The specific duration of the agreement;

2. The permitted uses of the property;

3. The density and intensity of use;

4. The maximum height and size of proposed buildings;

5. Specific provisions for reservation or dedication of land for public purposes. (Ord. No. 811, § 1(part), 2008)
40 July 25, 2022 Item 11
Created: 2022-01-04 11:02:14 [EST]
(Supp. No. 7, Update 2)

24.65.140 Effective date of development agreement.

In adopting this Chapter, the City Council recognizes the fact that a development agreement is a legislative act which is subject to referendum. Therefore, notwithstanding the fact that the City Council adopts an ordinance approving a development agreement and causes said agreement to be signed, said agreement shall be effective and shall only create obligations on the part of the City from and after the date that the ordinance approving said development agreement takes effect.
(Ord. No. 811, § 1(part), 2008)

24.65.150 Development agreement—Amendment or cancellation.

Either party may propose an amendment to or cancellation in whole or in part of a development agreement previously entered into. However, with the exception of modification or revocation pursuant to Sections 24.65.190 through 24.65.240, both parties must agree in writing to an amendment, or cancellation, of a development agreement before it shall be effective.
(Ord. No. 811, § 1(part), 2008)

24.65.160 Amendment or cancellation procedure.

A. The procedure for proposing an adoption of an amendment to or cancellation in whole or in part of the development agreement is the same as the procedure for entering into an agreement in the first instance as outlined in this Chapter.

B. However, where the City Council initiates the proposed amendment to or cancellation in whole or in part of the development agreement, it shall first give notice to the property owner of its intention to initiate such proceedings at least 15 calendar days in advance of the giving of notice of the public hearing regarding the amendment or cancellation pursuant to Section 24.65.070. (Ord. No. 811, § 1(part), 2008)

24.65.170 Recordation of development agreement, amendment or cancellation.

A. Within ten days after the effective date of the development agreement, the City Clerk shall have the agreement recorded with the County Recorder.

B. If the parties to the agreement or their successors in interest amend or cancel the agreement as provided in Government Code § 65868, or if the City terminates or modifies the agreement as provided in Government Code § 65865.1 for failure of the applicant to comply in good faith with the terms or conditions of the agreement, the City Clerk shall have notice of such action recorded with the County Recorder. (Ord. No. 811, § 1(part), 2008)

24.65.180 Development agreement—Duration.

The City Council may establish the term of a development agreement at the time said development agreement is approved by the City Council.
(Ord. No. 811, § 1(part), 2008)
41 July 25, 2022 Item 11
Created: 2022-01-04 11:02:14 [EST]
(Supp. No. 7, Update 2)

24.65.190 Same—Periodic review.

A. Notwithstanding the provisions of Section 24.65.180, periodic reviews of the development agreement shall be conducted as follows:

1. The City Council shall review the development agreement at least once every 12 months after the effective date of the adopting ordinance (hereinafter "annual review").

2. The City Council may, on its own motion or on the advice of the City Manager, review the development agreement more often than once every 12 months as it is deemed necessary (hereinafter "special review").

3. The City Council may delegate or refer the periodic review of the development agreement to the City Manager or his/her designated representative.
(Ord. No. 811, § 1(part), 2008)

24.65.200 Notice of periodic review.

Notice of periodic review shall be given as follows:

A. Notice to Developer.

1. The Director of Planning and Community Development shall give the developer 30 calendar days' advance notice of annual review, by placing such notice to the developer into the U.S. Mail, first class, postage prepaid, and addressed to such address as the developer has listed in the development agreement.

2. The City Clerk shall give the developer notice of a special review in the same manner as provided in Subsection A.1. above for annual review.

B. Notice to the Public. Public notice of annual or special reviews shall be accomplished as set forth in Section 24.65.070.
(Ord. No. 811, § 1(part), 2008)

24.65.210 Periodic review—Hearing, burden, findings.

A. Any periodic review conducted pursuant to Section 24.65.190 shall be accomplished in the form of a public hearing as required by Section 24.65.080.

B. The burden shall be on the developer, or his successor in interest, to demonstrate good-faith compliance with the terms of the agreement.

C. At the conclusion of the public hearing, the City Council shall make findings regarding whether or not the developer has, for the period under review, complied in good faith with the terms and conditions of the agreement.
(Ord. No. 811, § 1(part), 2008)
42 July 25, 2022 Item 11

24.65.220 Same—Action by council.

A. If the City Council finds and determines on the basis of the evidence given that the property owner has complied in good faith with the terms and conditions of the agreement during the period under review, the review for that period shall be concluded.

B. If the City Council finds and determines on the basis of substantial evidence that the property owner has not complied in good faith with the terms and conditions of the agreement during the period under review, the council may modify or terminate the agreement.

C. If the periodic review has been referred by the City Council to the City Manager or his/her designated representative, the determination resulting from said review shall be appealable in writing to the City Council within ten calendar days after the final action. A hearing shall be conducted in accordance with the City Council's rules for consideration of appeals.

D. If the periodic review is conducted by the City Council, the determination resulting from said review shall be deemed to be final for all purposes.
(Ord. No. 811, § 1(part), 2008)

24.65.230 Same—Modification or termination of agreement—Public hearing, notice.

A. If, upon a finding pursuant to Subsection 24.65.220.B., the City determines to proceed with modification or termination of the agreement, the City shall set a hearing date and give notice to the property owner and the public of the hearing. Said notice shall be given in the manner set forth in Sections 24.65.200 and 24.65.070.

B. In addition to the informational content required by Sections 24.65.200 and 24.65.070, the notice required by this Section shall contain:

1. A statement concerning whether the City proposes to terminate or to modify the development agreement;

2. Other information which the City considers necessary to inform the property owner of the nature of the proceedings.
(Ord. No. 811, § 1(part), 2008)

24.65.240 Same—Modification or termination—Hearing.

A. Any public hearing on the subject of modification or termination of the agreement based upon a periodic review, shall be conducted in the manner prescribed by Section 24.65.080.

B. Upon concluding said hearing, the City Council may take whatever action it deems necessary to protect the interests of the City.

C. The decision of the City Council shall be final.
(Ord. No. 811, § 1(part), 2008)
43 July 25, 2022 Item 11

DA EXHIBIT B
Legal Description of the Development Site
LOTS 4, 5, AND 6 IN BLOCK 62 OF DEL MAR, IN THE CITY OF DEL MAR, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 368, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, OCTOBER 7, 1885, TOGETHER WITH THAT PORTION OF THE SOUTHERLY 20.00 FEET OF TENTH STREET AS SHOWN ON SAID MAP, WHICH LIES NORTHERLY OF AND

IMMEDIATELY ADJOINS SAID LOTS, AS VACATED AND CLOSED TO PUBLIC USE BY ORDER OF THE BOARD OF SUPERVISORS OF SAID SAN DIEGO COUNTY, RECORDED APRIL 16, 1926 IN BOOK 1209, PAGE 125

OF DEEDS, TOGETHER WITH THAT PORTION OF THE NORTHERLY HALF OF THE ALLEY AS SHOWN ON

SAID MAP, WHICH LIES SOUTHERLY OF AND IMMEDIATELY ADJOINS SAID LOTS, AS VACATED AND CLOSED TO PUBLIC USE BY ORDER OF SAID BOARD OF SUPERVISORS, RECORDED MAY 17, 1929 IN BOOK 1613, PAGE 470 OF DEEDS.

APN: 300-221-33-00 and 300-221-32-00
44 July 25, 2022 Item 11

DA EXHIBIT C
2131\01\3253325.2

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Del Mar
City Clerk’s Office
1050 Camino Del Mar
Del Mar, CA 92014

THE AREA ABOVE IS RESERVED FOR RECORDER'S USE
APN No. 300-221-32 and 300-221-33
This Regulatory Agreement is recorded at the
request and for the benefit of the City of Del
Mar and is exempt from the payment of a
recording fee pursuant to Government Code
Sections 27383.

This Regulatory Agreement and Declaration of Restrictive Covenants (“Agreement”) is between DM Asset Recovery LP, a California limited partnership (“Property Owner”) and the City of Del Mar, a municipal corporation (“City”).

RECITALS
A. Property Owner owns certain real property located in the City of Del Mar, County of San Diego, California consisting of approximately 25,524 square feet located at the southeast corner of Camino Del Mar and 10th Street (APN 300-221-32 and 300-221-33) and more specifically described in Exhibit A, attached hereto and incorporated herein by this reference (“Property”).

B. Property Owner submitted a Specific Plan to the City, commonly known as the 941 Camino del Mar Specific Plan, which provides the vision, standards, and guidelines for development of the Property.

C. On June 18, 2018, the City Council adopted the Specific Plan, and the Plan was subsequently approved by a public vote on November 6, 2018.

D. The Specific Plan requires that 20% of the market rate Residential Hospitality units plus one additional residential unit developed on the Property must be affordable housing and provides that density calculations resulting in a fraction of one-half (0.5) or greater of a residential unit shall be rounded up to the next whole number and a remaining fraction of less than one-half shall be rounded down. Upon completion of construction the Property Owner intends to offer 45 July 25, 2022 Item 11
2 for sale the resulting two (2) affordable units to the City or to income-qualifying households at the Restricted Sales Price (as defined below).

E. Property Owner and City have entered into a Development Agreement which sets forth specific exceptional benefits, including the affordable housing requirements, to be implemented by the Property Owner in connection with the development of the Property and consistent with the requirements of the Specific Plan.

F. The Property Owner and City now desire to enter into this Agreement to set forth their agreement regarding the affordable housing restrictions with respect to the residential units and to cause the affordable housing restrictions to run with the land.

NOW, THEREFORE, the Property Owner and City hereby agree as follows:

1. Definitions
Unless otherwise defined herein or in the Development Agreement (as such term is defined below), capitalized terms used in this Regulatory Agreement shall have the respective meanings assigned to them in this Section 1:

1.1 "Actual Household Size" means the actual number of persons in the applicable household.

1.2 “Adjusted Income” shall mean the adjusted income of all persons who intend to reside in one residential unit, calculated in the manner consistent with determinations of household income for low-income families by the California Department of Housing and Community Development, as calculated in accordance with 25 California Code of Regulations Section 6914 or pursuant to a successor State housing program that utilizes a reasonably similar method of calculation of adjusted income.

1.3 “Development Agreement” means that certain Development Agreement between the City and Property Owner dated as of , 2022, as it may be amended from time to time.

1.4 “Median Income for the Area” shall mean the gross yearly median income for San Diego County adjusted for household size as most recently published by the California Department of Housing and Community Development. In the event that such income determinations are no longer published, or are not updated for a period of at least eighteen (18) months, the City shall provide the Developer with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by the State.

1.5 “Parties” shall mean City and Property Owner.
46 July 25, 2022 Item 11
3 1.6 “Project” means collectively the Property and the structures and related buildings, and other improvements located on the Property from time to time together with all fixtures and other property owned by the Property Owner and located on, or used in connection with, such buildings, structures, and other improvements.

1.7 “Property” means the real property legally described in Exhibit A which is attached hereto and by this reference incorporated herein.

1.8 “Qualified Project Period” shall mean the period beginning upon the certification of occupancy of the Restricted Units and ending on the date which is fifty-five (55) years after the beginning of the Qualified Project Period.

1.9 “Qualified Household” shall mean the individuals occupying the Restricted Units with Adjusted Income meeting the maximum qualifying income level, adjusted for household size appropriate for the unit to be purchased.

1.10 “Regulatory Agreement” or “Agreement” means this Regulatory Agreement.

1.11 “Restricted Sales Price” means the initial sale price that will result in a Qualified Household’s annual housing expenses (average monthly payments, including property taxes, homeowner's insurance, homeowner's association dues, if any, mortgage loan principal and interest, mortgage insurance, and a reasonable allowance for utilities (as provided by the City) not exceeding the "affordable housing cost" as defined in Health and Safety Code Section 50052.5(b)(3) for Low Income Households and Section 50052.5(b)(2) for Very Low Income Households, adjusted for household size appropriate for the unit, consistent with formula described in attached Exhibit B. “Household size appropriate for the unit” means one person for a studio and two persons for a one-bedroom unit. “Maximum qualifying income level means:

For Low-Income Households: an individual or household whose gross income is 80% or less of the Median Income for the Area, adjusted for household size computed pursuant to California Health and Safety Code sections 50079.5 and 50052.5, as may be amended.

Very Low-Income Households: an individual or household whose gross income is 50% or less of the Median Income for the Area, adjusted for household size computed pursuant to California Health and Safety Code sections 50079.5 and 50052.5, as may be amended.

All maximum Restricted Sale Price for each subsequent sale shall be governed under the terms of the Deed Restriction.

1.12 “Restricted Unit” or “Restricted Units” means the affordable residential hospitality units identified in Exhibit C attached hereto and incorporated herein 47 July 25, 2022 Item 11
4 required to be sold to the City or to Qualified Households pursuant to the terms, covenants, and conditions of this Agreement.

1.13 “Owner Occupied” means that the owner(s) of a Restricted Unit occupying said unit as their primary residence for at least ten (10) months out of each calendar year, subject to temporary waivers of this occupancy requirement for good cause such as to facilitate sale of the Restricted Unit to a Qualified Household, illness, temporary job relocation, military deployment, or sabbatical. If and to the extent the City acquires the unit, Owner Occupied shall be understood to mean occupancy by an income eligible household selected by the City.

2. Property Owner hereby represents, warrants and covenants as follows:
(a) Use of Restricted Units.

As part of the initial sale of the RESTRICTED UNITS the Owner shall cause to be recorded with the San Diego County Recorder’s office a legally enforceable Deed Restriction in form substantially similar to that attached hereto as Exhibit D and approved as to form by the Del Mar City Attorney limiting and requiring the initial sale of the RESTRICTED UNITS of the PROJECT to the City or to QUALIFIED HOUSEHOLDS for no more than the RESTRICTED SALES PRICE, as determined by the City. Property Owner and successor owners of the RESTRICTED UNITS shall not sell or permit the sale of any RESTRICTED UNIT in the PROJECT except as provided in the Deed Restriction for the entire QUALIFIED PROJECT PERIOD. If and to the extent the City acquires the RESTRICTED UNITS, then the City shall cause a use restriction to be recorded against the fee interest in the RESTRICTED UNITS acquired by the City to ensure the unit remains affordable to Qualified Households in perpetuity.

Pursuant to the Deed Restriction, each RESTRICTED UNIT shall be OWNER OCCUPIED for the entire QUALIFIED PROJECT PERIOD, as verified to the City through submission of an annual “Owner Occupied Annual Certification” form substantially similar to that attached hereto as Exhibit E and approved as to form by the Del Mar City Attorney. No leasing or renting, of any RESTRICTED UNIT shall be permitted. No RESTRICTED UNITS or any portion of a RESTRICTED UNUT shall be offered or let as Short Term Rentals. If and to the extent the City or a City designee acquires the RESTRICTED UNITS, the RESTRICTED UNIT may be rented to an income eligible household at an affordable rent as defined in Health and Safety Code Section 50053.

Each RESTRICTED UNIT shall be burdened with the covenants delineated in the Deed Restriction, which covenants shall run with the land applicable to each RESTRICTED UNIT for the benefit of the City, which may enforce the covenants and compel compliance therewith. (b) First Sale of Restricted Units.

For the first sale of RESTRICTED UNITS, Property Owner shall sell the RESTRICTED UNITS to the City (the "City Option") or a QUALIFIED HOUSEHOLD for no more than the RESTRICTED SALES PRICE. If the City opts not to purchase, Property Owner 48 July 25, 2022 Item 11
5 shall adopt and submit to the City for approval, written purchaser selection policies and criteria that meet, at a minimum, all the following requirements:
a. Are consistent with the purpose of providing housing for QUALIFIED HOUSEHOLDS.
b. Provide for:
i. The selection of QUALIFIED HOUSEHOLDS from a written waiting list in the chronological order of their application in so far as is practicable;
ii. The prompt written notification to any rejected applicant of the grounds for any rejection.
c. Carry out the affirmative marketing procedures of the City, to provide information and otherwise attract eligible persons from all racial, ethnic and gender groups in the housing market area to the program. Property Owner and City shall cooperate to effectuate this provision prior to the first sale of each RESTRICTED UNIT.

The City may, instead of purchasing the RESTRICTED UNITS itself, assign its right to purchase the RESTRICTED UNITS pursuant to the City Option to another public agency, a nonprofit corporation, or to a Qualified Household. In the event the City desires to exercise the City Option, the City shall provide Property Owner written notice within ninety (90) days of the date when permitted (vertical) construction of street-level walls commences. Written notice of vertical construction shall be provided to the City by the Developer. Within ninety (90) days of City election to exercise its purchase rights, the City or its assignee shall execute a binding agreement to purchase the RESTRICTED UNITS. Title shall be delivered by the Owner to the City by grant deed, free and clear of any mortgage or other liens, unless approved in writing by the City. (c) Second and Subsequent Sales of Restricted Units
All subsequent sales of RESTRICTED UNITS sold to QUALIFIED HOUSEHOLDS will be governed by the Deed Restriction recorded at the time of initial sale. Subsequent sales of RESTRICTED UNITS sold to the City (or a City designee) shall be subject to the use restriction that requires the owner to ensure the unit remains affordable to Qualified Households. (d) Nondiscrimination Covenant.

Property Owner herein covenants by and for itself, its heirs, executors, administrators, successors, and assigns, and all persons claiming under or through them: That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the PROPERTY, nor shall Property 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. 49 July 25, 2022 Item 11
6 a. Property Owner, its successors, and assigns, shall refrain from restricting the sale of the PROPERTY or any portion thereof, on the basis of race, color, creed, religion, sex, sexual orientation, marital status, national origin, or ancestry of any person. Every deed and contract entered with respect to the PROPERTY, or any portion thereof, shall contain or be subject to substantially the following nondiscrimination or non-segregation clauses:
(1) In deeds: “The grantee herein covenants by and for themselves, or their heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through themselves establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”
(2) In contracts: “There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the land, nor shall the transferee itself or any person claiming under or through themselves establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of the land.”

3. Maintenance; Compliance with Law.

During the QUALIFIED PROJECT PERIOD, Property Owner agrees to pay all required homeowners’ association dues and to maintain all interior and exterior improvements, including landscaping on the PROJECT in good condition, repair and sanitary condition (and as to landscaping in a healthy condition) and in accordance with any management plan approved by the City under this Agreement as the same may be amended from time to and all other applicable laws, rules ordinances orders and regulations of federal state, county or municipal and other governmental agencies and bodies having or claiming jurisdiction. 50 July 25, 2022 Item 11
7 4. Consideration.

The City approved the PROJECT entitlements in part in reliance upon the Property Owner providing the affordable housing as set forth in this Agreement. In consideration for the City approvals Property Owner has entered into this Agreement and has agreed to restrict the RESTRICTED UNITS of the PROJECT on the terms and conditions set forth herein and to grant the City an option to acquire the RESTRICTED UNITS at the RESTRICTED SALES PRICE.

The requirements of the of this Agreement, shall be satisfied with respect to the Property if the Owner constructs or causes to be constructed the RESTRICTED UNITS and the RESTRICTED UNITS are sold to the City or to Eligible Buyers.

5. Sale or Transfer of the Project.

Property Owner hereby covenants and agrees not to voluntarily sell, transfer, or otherwise dispose of the PROPERTY or the PROJECT without obtaining the prior written consent of the City, which will not be unreasonably withheld. Each transferee shall expressly assume all applicable obligations of Property Owner imposed by this Agreement. Notwithstanding anything herein to the contrary, this section shall not apply to a foreclosure under any construction or permanent financing related to the construction, development, or operation of the PROJECT. Property Owner shall not sell the Project prior to completion of construction unless it first obtains the City’s approval of any prospective purchaser, such approval not to be unreasonably withheld. Property Owner shall ensure that such purchaser can demonstrate to the City it has experience in operating projects of relatable scope to the Project, and that the purchaser does not have a record of substantial loan defaults, maintenance problems, building code violations, or substantiated fair housing or other complaints at properties it owns and/or operates. Within 30 days of receiving notice of the sale and information regarding the prospective purchaser, the City shall exercise its right to approve or disapprove the prospective purchaser. Sale of individual market rate units or commercial units shall not require City review and approval. Sale of the Project after construction shall not require City review and approval.

6. Term.

This AGREEMENT and all and each of the provisions hereto shall become effective upon its execution and delivery, shall remain in full force and effect for a period of fifty-five (55) years from the date of issuance of certificate of occupancy for the last of the RESTRICTED UNITS, it being expressly agreed and understood that the provisions hereof are intended to survive termination of the DEVELOPMENT AGREEMENT.

7. Covenants to Run with the Land.
(a) All conditions, covenants , and restrictions contained in this AGREEMENT shall be covenants running with the land, and shall, in any event, and without regard to technical classification or designation, legal or otherwise, be, to the fullest extent permitted by law and equity, binding for the benefit and in favor of, and enforceable by City, its 51 July 25, 2022 Item 11
8 successors and assigns, against Property Owner, its successors and assigns, to or of the PROJECT or any portion thereof or any interest therein, and any party in possession or occupancy of said PROJECT or portion thereof.
(b) In amplification and not in restriction of the provisions set forth hereinabove, it is intended and agreed that City shall be deemed a beneficiary of the AGREEMENTS and covenants provided hereinabove both for and in its own right and also for the purposes of protecting the interests of the community. All covenants without regard to technical classification or designation shall be binding for the benefit of City and such covenants shall run in favor of City for the entire period during which such covenants shall be in force and effect, without regard to whether City is or remains an owner of any land or interest therein to which such covenants relate. City shall have the right, in the event of any breach of any such agreement or covenant, to exercise all the rights and remedies, and to maintain any action at law or suit in equity or other proper proceedings to enforce the curing of such breach of AGREEMENT or covenant.
(c) The City and its successors and assigns, and Property Owner and the permitted successors and assigns of Property Owner in and to all or any part of the fee title to the PROJECT shall jointly have the right upon written agreement signed by both PARTIES to consent and agree to changes in, or to eliminate in whole or in part, any of the covenants, easements, or restrictions contained in this AGREEMENT without the consent of any tenant, lessee, easement holder, licensee, mortgagee, trustee, beneficiary under a deed of trust, or any other person or entity having any interest less than a fee in the PROJECT. The covenants contained in this AGREEMENT, without regard to technical classification shall not benefit or be enforceable by any owner of any other real property within or outside the PROJECT, or any person or entity having any interest in any other such realty.
(d) No breach of any of the provisions of this AGREEMENT shall impair, defeat, or render invalid the lien of any mortgage, deed of trust or like encumbrance made in good faith and for value encumbering the PROPERTY or the PROJECT or any portion thereof.

8. Burden and Benefit.

The City and the Property Owner hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the PROPERTY and the PROJECT in that the Property Owner’s legal interest in the PROJECT may be rendered less valuable thereby. The City and the Property Owner hereby further declare their understanding and intent that the benefit of such covenants touching and concerning the land is the enhancement and increased enjoyment and use of the PROJECT by QUALIFIED TENANTS, the intended beneficiaries of such covenants, reservations, and restrictions, and by the furthering of public purposes for which the entitlements were approved.

9. Uniformity; Common Plan.

The covenants, reservations and restrictions hereof shall apply uniformly to the entire PROJECT to establish and carry out a common plan for the use, development, and 52 July 25, 2022 Item 11
9 improvement of the PROJECT.

10. Default.

Each of the following shall constitute an “Event of Default” by Property Owner under this AGREEMENT:
(a) Non-Monetary Failure to Perform. Property Owner fails to construct the RESTRICTED UNITS or otherwise fails to timely perform, comply with, or observe any of the terms, covenants, or-conditions of this AGREEMENT (other than those provisions elsewhere referred to in this Section 12) and such failure continues uncured or without Property Owner commencing to diligently cure for thirty (30) days after notice thereof in writing is given by the City to Property Owner; provided if Property Owner has commenced cure but cannot complete such cure reasonably within 30 days. Property Owner shall have 90 days from the date of notice to cure such failure without such failure constituting an event of default.
(b) Voluntary Suspension. The voluntary suspension of Property Owner business or the dissolution or termination of the partnership (if any) constituting Property Owner; (c) Unauthorized Transfer. Property Owner sale or other transfer of the PROJECT in violation of this AGREEMENT;
(d) Insolvency. A court having jurisdiction shall have made or entered any decree or order (i) adjudging Property Owner to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of Property Owner or seeking any arrangement for Property Owner under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee , liquidator, or assignee of Property Owner in bankruptcy or insolvency or for any of their properties, or (iv) directing the winding up or liquidation of Property Owner, if any such decree or order described in clauses (i) to (iv), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) days unless a lesser time period is permitted for cure under any mortgage on the PROPERTY, in which event such lesser time period will apply under this subsection 12 (d) as well; or Borrower shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive.

11. Remedies.

The occurrence of any Event of Default shall, either at the option of the City or automatically where so specified, give the City the right to proceed with any and all remedies set forth in this AGREEMENT or otherwise available at law or in equity or by statute (and all of the City's rights and remedies shall be cumulative), including but not limited to the following:
(a) Specific Performance. The City shall have the right to mandamus or other suit, 53 July 25, 2022 Item 11
10 action or proceeding at law or in equity to require Property Owner to perform its obligations and covenants under this AGREEMENT and/or to enjoin acts on things, which may be unlawful, or in violation of the provisions of this AGREEMENT. (b) Remedies Cumulative. No right, power, or remedy given to the City by the terms of this AGREEMENT is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against Property Owner and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the City of any such tight or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. (c) Waiver of Terms and Conditions. No waiver of any default or breach by Property Owner hereunder shall be implied from any omission by the City to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and such waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term, or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term, or condition. The consent or approval by the City to or of any act by Property Owner requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act. The exercise of any right, power, or remedy shall in no event constitute a cure or a waiver of any default under this AGREEMENT nor shall it invalidate any act done pursuant to notice of default or prejudice the City in the exercise of any right, power, or remedy hereunder unless in the exercise of any such right, power, or remedy all obligations of Property Owner to City have been satisfied.

12.Recording and Filing.

The Property Owner shall cause this AGREEMENT, and all amendments and supplements hereto and thereto, to be recorded and filed in the real property records of the County of San Diego and in such other places as the City may reasonably request. The Property Owner shall pay all fees and charges incurred in connection with any such recording.

13. Governing Law.

This AGREEMENT shall be governed by the laws of the State of California. In the event of any legal action to enforce or interpret this AGREEMENT, the sole and exclusive venue shall be a court of competent jurisdiction located in the County of San Diego, California, and the PARTIES hereto agree to and do hereby submit to the jurisdiction of such court, notwithstanding Code of Civil Procedure Section 394.

14. Amendments.

This AGREEMENT shall be amended only by a written instrument executed by the 54 July 25, 2022 Item 11
11 PARTIES hereto, or their successors in title and duly recorded in the real property records of the County of San Diego.

15. Notices.
(a) Any notice required to be given hereunder shall be made in writing and shall be given by personal delivery, certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the PARTIES hereto:

If to City, to: City of Del Mar City Hall
1050 Camino Del Mar
Del Mar, CA 92014
Attn: City Manager
Telephone: (858) 755-9313
Facsimile: (858) 755-2794
With Copies to: Leslie E. Devaney, City Attorney
Devaney Pate Morris & Cameron LLP
402 W. Broadway, Suite 1300
San Diego, CA 92101
Telephone: (619) 354-5030
Facsimile: (619) 354-5035
If to Developer, to: DM Asset Recovery LP
c/o Kitchell Development Company
Attn. Robert Schramm, President
1707 E. Highland Ave, Suite 100
Phoenix, AZ 85016
With Copies to: DM Asset Recovery LP
c/o Kitchell Development Company
Attn.: Michael Seiber
9330 Scranton Road, Suite 100
San Diego, CA 92121
(b) City shall endeavor to provide a courtesy copy of any notices sent to Property Owner to the following addressee, however, failure to do so shall not affect the validity of any otherwise proper, timely delivered notice to Property Owner:
(INSERT LENDER CONTACT)
Notice shall be deemed given three business days after the date of mailing. 55 July 25, 2022 Item 11
12 16. Severability.

If any provision of this AGREEMENT shall be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not in any way be affected or impaired thereby.

17. Additional Terms.
(a) Indemnity. To the fullest extent permitted by law, the Property Owner agrees to indemnify, hold harmless and defend the City and its elected officials, officers, governing members, employees, attorneys and agents (collectively, the “Indemnified Parties” ), from and against any and all losses, damages, claims, actions, liabilities, costs and expenses of any and every conceivable nature, kind or character (including, without limitation, reasonable attorneys' fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) to which the Indemnified Parties, or any of them, may become subject to under any statutory law (including federal or state securities laws) or at common law or otherwise, arising out of or based upon or in any way relating to:

1. This AGREEMENT or the execution or amendment thereof in connection with the transactions contemplated thereby;

2. Property Owner's ownership or operation of the PROPERTY and the PROJECT or any act or omission of the Property Owner or any of its agents, contractors, servants, employees or licensees in connection with the PROPERTY and the PROJECT, the operation of the PROJECT, or the condition, environmental or otherwise, occupancy, use, possession, conduct or management of work done in or about, or from the planning, design, acquisition, installation, operation or rehabilitation of, the PROJECT or any part thereof;

3. any lien or charge upon payments by the Property Owner to the County, or any taxes (including, without limitation, all ad valorem taxes and sales taxes), assessments, impositions and other charges imposed on the County in respect of any portion of the PROJECT;

4. any violation of any environmental law, rule, or regulation with respect to, or the release of any toxic substance from, the PROPERTY or the PROJECT or any part thereof;

5. any untrue statement or misleading statement or alleged untrue statement or alleged misleading statement of a material fact by the Property Owner contained in the Development Agreement or any of the documents or instruments relating to said Development Agreement that the City relied upon in entering into this Agreement or the Development Agreement; except to the extent such damages are caused by the gross negligence or willful misconduct of such Indemnified Party. In the event that any action or proceeding is brought against any Indemnified Party with respect to which indemnity may be sought hereunder, the Property Owner, upon written notice from the Indemnified Party, shall assume the investigation and defense thereof, including the employment and payment for of 56 July 25, 2022 Item 11
13 counsel selected by the Indemnified Party, and shall assume the payment of all expenses related thereto, with full power to litigate, compromise or settle the same; provided that the Indemnified Party shall have the right to review and approve or disapprove any such compromise or settlement.
(b) Time. Time is of the essence in this AGREEMENT.
(c) Construction. Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa, words imparting persons shall include firms, associations, partnerships and corporations, and words of either gender shall include the other gender.
(d) Waiver of Jury Trial. Unless prohibited by Federal, State or local laws, each party to this AGREEMENT hereby expressly waives any right to trial by jury of any claim, demand, action or cause of action arising under any Loan Document or in any way connected with or related or incidental to the dealings of the PARTIES hereto or any of them with respect to this AGREEMENT, or the transactions related thereto, in each case whether now existing or hereafter arising, and whether sounding in contract or tort or otherwise; and each party hereby agrees and consents that any such claim, demand, action or cause of action shall be decided by court trial without a jury, and that any party to this AGREEMENT may file an original counterpart or a copy of this section with any court as written evidence of the consent of the PARTIES hereto to the waiver of their right to trial by jury. (e) Non liability. By accepting or approving anything required to be performed or given to City under this AGREEMENT, City shall not be deemed to have warranted or represented the sufficiency or legal effect of the same, and no such acceptance or approval shall constitute a warranty or representation by City to anyone.
(f) Obligations Unconditional and Independent. Notwithstanding the existence at any time of any obligation or liability of City to Property Owner, or any claim by Property Owner against City, in connection with this AGREEMENT or otherwise, Property Owner hereby waives any right it might otherwise have (a) to offset any such obligation, liability or claim against Property Owner’s obligations under this AGREEMENT or (b) to claim that the existence of any such obligation, liability or claim excuses the nonperformance by Property Owner of any of its obligations under this AGREEMENT.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

PROPERTY OWNER:

By:

By:
57 July 25, 2022 Item 11
14 CITY:

By:

By:
58 July 25, 2022 Item 11

EXHIBIT A
Legal Description of the Development Site
LOTS 4, 5, AND 6 IN BLOCK 62 OF DEL MAR, IN THE CITY OF DEL MAR, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 368, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, OCTOBER 7, 1885, TOGETHER WITH THAT PORTION OF THE SOUTHERLY 20.00 FEET OF TENTH STREET AS SHOWN ON SAID MAP, WHICH LIES NORTHERLY OF AND

IMMEDIATELY ADJOINS SAID LOTS, AS VACATED AND CLOSED TO PUBLIC USE BY ORDER OF THE BOARD OF SUPERVISORS OF SAID SAN DIEGO COUNTY, RECORDED APRIL 16, 1926 IN BOOK 1209, PAGE 125

OF DEEDS, TOGETHER WITH THAT PORTION OF THE NORTHERLY HALF OF THE ALLEY AS SHOWN ON

SAID MAP, WHICH LIES SOUTHERLY OF AND IMMEDIATELY ADJOINS SAID LOTS, AS VACATED AND CLOSED TO PUBLIC USE BY ORDER OF SAID BOARD OF SUPERVISORS, RECORDED MAY 17, 1929 IN BOOK 1613, PAGE 470 OF DEEDS.

APN: 300-221-33-00 and 300-221-32-00
59 July 25, 2022 Item 11

EXHIBIT B
Formula to determine the Maximum Restricted Sales Price of a New Affordable Unit at the time of original sale.

The following formula and methodology shall be used to calculate the maximum Restricted Sales Price of Restricted Unit upon the original sale by the Property Owner, consistent with Health and Safety Code Section 50052.5:

A. Determine the annual income for a Qualified Household size based on whether the unit is designated for occupancy by a Lower Income or Very-Low Income Household: as defined in Health and Safety Code Section 50079.5 and Section 50105 (as applicable). The unit designation will be determined by the City consistent with the project planning approvals. i. Determine the monthly Area Median Income for San Diego County for a Household size that is one person for a studio unit and two persons for a one-bedroom unit, three persons for a two-bedroom unit and four persons for a three-bedroom unit; then
ii. Multiply the monthly Median Income for San Diego County derived by the above method:
 70% for an affordable unit designated for a Lower Income Household occupancy; or
 50% for an affordable unit designated for a Very-Low Income Household occupancy.

B. Determine the monthly household allowance available for a mortgage payment:
i. Multiply annual income from step A by 0.30 to obtain an annual housing allowance of 30% of income;
ii. Divide the housing allowance by 12 to obtain a monthly housing allowance;
iii. Deduct 20% of the monthly housing allowance for the monthly costs of property taxes, insurance, and all utilities (consistent with the US Department of Housing and Urban Development's Utility Allowance principles), and deduct 100% of the monthly homeowner's association (HOA) fees to obtain a net allowance available for mortgage payments. (Note: For the purposes of the amount of HOA fees included in this formula, and for all future transactions, HOA fees shall be set as of the date of initial occupancy at their actual amount. If future HOA fees are less than this set amount, then the lesser amount will be used in the formula and thereafter. If HOA fees include property taxes, hazard insurance costs or individual unit utility costs, these costs shall be deducted from the set HOA fee amount used in the formula.) 60 July 25, 2022 Item 11
Exhibit B
Max. Sales Price Formula

C. Determine the maximum mortgage that can be financed:
i. Determine the prevailing interest rate for a 30-year fully amortized fixedrate home mortgage that is equal to the previous year's average mortgage interest rates from Freddie Mac's "Weekly Primary Mortgage Market Survey." This rate shall be adjusted annually, effective May 1st to coincide with the changes in median income by HUD and HCD;
ii. Determine the maximum home mortgage that can be financed at the prevailing interest rate based on a mortgage payment as determined in step B.

D. Determine a maximum Restricted Unit sales price assuming a mortgage of 90% of sales price by dividing the maximum mortgage amount determined in step C by 0.9.

The Maximum Restricted Sales Price shall be exclusive of closing costs, which shall be paid by the Seller.
61 July 25, 2022 Item 11
Affordable Unit
Affordable Unit

EXHIBIT C
Identification of Affordable Units
62 July 25, 2022 Item 11

EXHIBIT D

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

City of Del Mar
City Clerk’s Office
1050 Camino Del Mar
Del Mar, CA 92014
Recording Fees Exempt Pursuant to
Government Code §27383
ABOVE SPACE FOR RECORDER’S USE

AFFORDABLE HOUSING OCCUPANCY, REFINANCING, AND

RESALE DEED RESTRICTION AGREEMENT WITH OPTION TO

PURCHASE
Assessor’s Parcel Number (APN) of Home:

Address of Home:_____________________
Number of Bedrooms: _________________
Income Category of Purchaser: Low Income
Sales Price at Original Purchase (Owner's Base Price): $______ Owner's Original Closing Costs: $______
Median Income (applicable to household size) at Time of Purchase: $______ THIS AFFORDABLE HOUSING DEED RESTRICTION is made and executed this day of 20 by (the “Owner”), whose address is and
more particularly described in Exhibit A (the "Home"), for the benefit of and enforceable by the City of Del Mar (the “City”).

RECITALS
WHEREAS, the Owner owns Home located within the development project located at 941 Camino Del Mar in Del Mar, California.

WHEREAS, Owner’s residential unit was constructed on the Property to increase affordable housing opportunities in the City; and
63 July 25, 2022 Item 11
2 WHEREAS, pursuant to the Development Agreement and in accordance with the requirements of the Regulatory Agreement and Declaration of Restrictive Covenants associated with approval of development of the Property, eligible purchasers such as the Owner are given the opportunity to purchase residential property at less than its fair market value if the purchaser agrees to certain use and transfer restrictions, including an agreement to occupy the property as a principal residence and convey the property for an amount not greater than a maximum resale price, all more fully provided herein; and
WHEREAS, the purpose of this Agreement is to control the resale of the Home. This Agreement provides the City an option to purchase the Home at a restricted price, given in consideration of the economic benefits to the Owner resulting from purchase of the Home at an affordable level. This Agreement restricts the resale of the Home and specifies, among other requirements, that the Home may only be transferred to Low Income Households (as defined below).

This Agreement also requires that the Owner pay the City Excess Sales Proceeds (as defined below) in the event the Owner sells the Home in violation of this Agreement.

WHEREAS, the Owner is receiving a first mortgage loan (the "First Lender Loan") from _________________________ (the "First Lender"). The First Lender Loan is secured by a deed of trust executed by the Owner in favor of First Lender and recorded in the official records of San Diego County (the "Official Records") concurrently with this Agreement, and assigned Instrument No. _____________ (the "First Lender Deed of Trust"). [If Owner is receiving more than one purchase money loan from the same lender revise as follows: The Owner is receiving [insert number] mortgage loans from ________________ and _______________ (collectively, the "First Lender") for purchase of the Home (collectively, the "First Lender Loan"). The First Lender Loan is secured by a deed trust dated _______________, 20__, executed by the Owner and recorded in the County of San Diego on _______________, 20__, and assigned Instrument No. _____________ and a deed of trust dated _______________, 20__, executed by the Owner and recorded in the County of San Diego on _________________, 20__, and assigned Instrument No. _____________ [revise if more than two deeds of trust] (collectively, the "First Lender Deed of Trust").

WHEREAS, this Agreement shall be secured by a deed of trust on the Home (the "City Deed of Trust"). [Choose one:] [This Agreement will be recorded senior and will not be subordinated to the First Lender Deed of Trust, but the City Deed of Trust shall be subordinate to the lien of the First Lender Deed of Trust.] [Because the First Lender Loan is financed with a HUD or VA loan, the Agreement and the City Deed of Trust will be subordinate to such HUD or VA financing.] WHEREAS, the Owner, on behalf of itself, its heirs, executors, administrators, representatives, successors, and assigns, desires to comply with the requirements of the Development Agreement by restricting the use and transfer of the Property as provided herein.

NOW, THEREFORE, in consideration of the recitals set forth above and for value received, the Owner does hereby declare and impose the following covenants on the Property.

COVENANTS

1. Covenants to Run with Property. The Property is hereby burdened with the covenants delineated herein, which covenants must be a burden upon, and run with, the Property for the benefit of the City who may enforce the covenants and compel compliance therewith. Lack of 64 July 25, 2022 Item 11
3 compelled compliance at any time, for any duration, or for any reason does not remove the right of City from enforcing the covenants and compelling compliance.

2. General Definitions.
“Guidelines” means policies, procedures, regulations, and ordinances adopted by the City, as same may be amended from time to time, to govern the administration of deed restricted affordable housing.
“Owner” means that person or persons listed in the opening paragraph of this Agreement, who have been certified as a Qualified Household.
“Qualified Household” means a household that has been certified by the City as qualified Low-Income Household that is eligible to own or occupy the Property. A Qualified Household must maintain continuous compliance with the Guidelines and the terms and provisions of this Deed Restriction during its entire term of occupancy of the Property. The combined gross income for all household members of a "Qualified Household", as determined by the City, does not exceed the qualifying limit for Low Income households as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937 ("Low Income Household").

3. Restrictions on Occupancy.

3.1 Residential Use Only. The Owner must use, and must cause all occupants to use, the Property only for residential purposes, as affordable housing, as the Owner's sole place of residence and any incidental activities related to residential use that are permitted by the applicable zoning.

3.2 Compliance with Law. The Owner must use the Property in a manner to not cause actual harm to others or create any nuisances, public or private. The Owner must use and maintain the Property in compliance with all applicable laws and regulations, including homeowner association covenants and requirements.

3.3 Occupancy. Subject to the restrictions contained in Section 8 below, the Owner must occupy the Property as the Owner’s primary residence. The Owner will be considered as occupying the Property as his/her/their primary residence if the Owner is living in the Property for at least ten (10) months out of each calendar year. On or before February 1 of each calendar year, the Owner shall provide an annual written certification to the City, in the form to be provided by the City (Exhibit E). The City may, in its sole discretion, grant a temporary waiver of this occupancy requirement for good cause such as to facilitate sale of the Property to a Qualified Household, illness, temporary job relocation, military deployment orsabbatical. The Owner must provide written request for a temporary waiver of the owner occupancy requirement to the City at least thirty (30) days prior to such temporary vacancy. The Owner’s failure to comply with the provisions of this paragraph may, following a three (3) month notice to cure, be deemed a breach of this Deed Restriction, allowing the City to purchase the Property as set forth in section 7. Occupancy of the Property as the Owner's primary residence will not be established if the Owner offers or lets the Property as a Short-Term Rental at any time during the Term in violation of Section 8, below.

3.4 Maintenance and Inspection of Property. The Owner must maintain the Property and 65 July 25, 2022 Item 11
4 any improvements thereon in good condition and repair throughout the Owner’s period of ownership.

If the City receives a report of poor maintenance or unsafe condition, the Owner must allow the City, or its designee, access to the Property upon 48 hours’ notice. The City, or its designee, will inspect the property and notify Owner if repairs or corrections are required. The Owner must make any required repairs or corrections in a reasonable manner acceptable to City within thirty (30) days of being notified. In addition, upon the City’s receipt of a Notice of Intent to Transfer, as detailed in section 6, the City must be given the right to enter and inspect the Property. The Owner is obligated to make repairs to the Property deemed necessary by the City prior to appraisal and sale. If Owner is unable to make the required repairs, the City may enter into an agreement with the Owner to make necessary repairs.

4. Taxes and Assessments.

4.1 Owner Responsibility. The Owner must be responsible for the payment of all taxes, governmental assessments, and homeowners’ dues/assessments relating to the Property.

4.2 Right to Contest. The Owner has, at the Owner’s own expense, the right to contest the amount or validity of any taxes or assessments relating to the Property.

5. Term of Covenants and Restrictions. All the provisions of this Agreement, including the benefits and burdens, run with the Home and this Agreement shall bind, and the benefit hereof shall inure to, the Owner, his or her heirs, legal representatives, executors, successors in interest and assigns, and to the City and its successors. The covenants and restrictions contained herein must continue in full force and effect for a period of fifty-five (55) years after the date of recordation of this Deed Restriction. With each sale or transfer, the Owner must ensure that the purchaser or transferee executes an occupancy, refinancing, and resale restriction agreement with option to purchase (“Deed Restriction”) in accordance with Section 6.2 of this Agreement and record the same with the San Diego County Recorder.

The Owner covenants that he or she has not, and will not, execute any other agreement with provisions contradictory to or in opposition to the provisions hereof, and that, in any event, this Agreement is controlling as to the rights and obligations between and among the Owner, the City and their respective successors.

6. Sale of the Property.

6.1 Requirements. In the event the Owner intends to Transfer or vacate the Home, the Owner shall promptly give the City written notice of such intent (the "Notice of Intent to Transfer"), in the form shown in Exhibit C attached to this Agreement. The Owner shall give the City the Owner's Notice of Intent to Transfer prior to notifying real estate brokers or lenders of Owner's intent to Transfer the Home and prior to listing of the Home on the Multiple Listing Service.
i. The Owner's Notice of Intent to Transfer shall be sent to the City by certified mail, return receipt requested at the address provided in this Agreement. The Owner's Notice of Intent to Transfer shall include the information necessary for the City to determine the Maximum 66 July 25, 2022 Item 11
5 Restricted Resale Price of the Home, including the following information:
(1) the address of the Home;
(2) the date of purchase of the Home by the Owner;
(3) the purchase price of the Home paid by the Owner at the time of his/her purchase;
(4) a copy of the HUD-1 Settlement Statement or equivalent document from the close of escrow on the Owner's purchase of the Home;
(5) if Owner has made Eligible Capital Improvements to the Home that he/she wishes to include in the calculation of Indexed Price, a description of the improvements, the date the improvements were made, a copy of the letter granting prior City approval of the improvements, evidence of cost of the improvements, and an appraisal of the value added to the Home by the Eligible Capital Improvements;
(6) the date on which Owner intends to vacate Home;
(7) the date the Home will be placed on the market; and (8) the name and phone number of the person to contact to schedule inspection of the Home by the City.

The Owner may not want to enter into a contract with a real estate broker to sell the Home until the Owner has received the City Response Notice, as the services of a broker will not be required if the City exercises the City Option to purchase the Home and in such event no brokerage commission will be paid to a third party.
ii. Within thirty (30) days of delivery of the Owner's Notice of Intent to Transfer, the Owner shall obtain and deliver to the City a current written report of inspection of the Home by a licensed structural pest control operator.
iii. No later than thirty (30) days after delivering a Notice of Intent to Transfer, the City or designee will inspect the property and notify the Owner of required repairs. The Owner must make required repairs within thirty (30) days. If Owner is unable to make the required repairs, the City may cause the repairs to be made and charge one and one-half (1.5) times the repair costs to the Owner payable out of purchase proceeds at closing. Once repairs are made, Owner must, at their own expense, commission an appraisal of the Property by a licensed appraiser. The appraisal must be by analysis and comparison of comparable properties, disregarding this Deed Restriction. The Owner must provide a copy of such appraisal to the City. iv. If the Home is vacant, the Owner shall maintain utility connections until the close of escrow on the Transfer;
v. In the event the City purchases the Home, the Owner shall permit a final walkthrough of the Home by the City, or the City's designee, in the final three (3) days prior to close of escrow on the Transfer.

The City shall respond in writing (the "City Response Notice") to the Owner's Notice of Intent to Transfer within sixty (60) days of: City receipt of a complete Owner's Notice of Intent to Transfer that includes all information required under this Section, including City receipt of the pest control report and home inspection report (if any). The City Response Notice shall inform the 67 July 25, 2022 Item 11
6 Owner of the City's election to proceed under one of the following two alternatives:
i. City Exercise of City Purchase Option. The City Response Notice may notify the Owner that the City elects to exercise the City Option, or assign to another public agency or nonprofit organization or Qualified Household the City's right to purchase the Home, and shall include the City's calculation of the Maximum Restricted Resale Price to be paid by the City (or its assignee) and the Transaction Fee to be paid by the Owner.
ii. Owner Sale at Restricted Sale Price to Qualified Household. Alternatively, the City Response Notice may notify the Owner that the City will not at this time exercise the City Option to purchase the Home and that the Owner may proceed to sell the Home to a Qualified Household at a price not to exceed the Maximum Restricted Resale Price. In this event, the City Response Notice shall include the following information: (1) the maximum qualifying income for a Qualified Household; (2) the certifications required of a Qualified Household; (3) the Maximum Restricted Resale Price the Owner may receive for the Home. iii. To proceed to the closing of the sale of the Property, the City must certify in writing that the prospective buyer is a Qualified Household. The City or its designee will maintain a list of Qualified Households and shall provide Owner with the then current list when sending the City Response Notice.

No later than seven (7) days following the date of the City Response Notice, the Owner shall acknowledge in writing to the City, that the Owner has received the City Response Notice and still intends to Transfer the Home.

6.2 Selling the Property.

The Owner agrees that the City shall have the option to purchase the Home (the "City Option") for the Maximum Restricted Resale Price, calculated pursuant to Section 6.3 of this Agreement. The City may, instead of purchasing the Home itself, assign its right to purchase the Home pursuant to the City Option to another public agency, a nonprofit corporation, or to a Qualified Household. If the City assigns its purchase option, the assignee shall sign the City Response Notice and shall thereby be bound to purchase the Home pursuant to the terms of the City Option as set forth in this Agreement. The Owner may be required to pay the City a transaction fee equal to the City's reasonable costs associated with the exercise of the Option if the City (or its assignee) exercises the City Option and purchases the Home; provided, however that such transaction fee shall not exceed six percent (6%) of the sales price of the Home. The City Option may be exercised by the City or its assignee in the City Response Notice, as described in Section 6.1 above, to be sent by the City to the Owner within thirty (30) days of the City's receipt of a complete Owner's Notice of Intent to Transfer. If the City Response Notice notifies the Owner that the City or its assignee will exercise the City Option to purchase, the City or its assignee shall purchase the Home within ninety (90) days of the date of the City Response Notice and title shall be delivered by the Owner to the City by grant deed, free and clear of any mortgage or other liens, unless approved in writing by the City. In the event of exercise of the City Option and purchase of the Home by the City or its assignee, the Owner shall permit a final walk-through of the Home by the City or its assignee in the final three (3) days prior to close of escrow on the Transfer.
68 July 25, 2022 Item 11
7 In the event the City Response Notice notifies the Owner to proceed to sell the Home to a Qualified Household at a price not exceeding the Maximum Restricted Resale Price, the Owner may proceed to sell the Home in compliance with the following requirements. The Owner may sell the Property by selling the Property directly to a Qualified Household on the City’s approved list or that of its designee. If the City does not maintain such a list, the Owner may sell to a Qualified Household of Owner’s choosing, so long as the person is certified by the City as a Qualified Household. The Proposed Buyer shall agree to sign and record an occupancy, refinancing, and resale restriction agreement with option to purchase restricting future resale of the Home and shall agree to cooperate fully with the City in promptly providing all information requested by the City to assist the City in monitoring the Proposed Buyer's compliance with the occupancy, refinancing, and resale restriction agreement with option to purchase.

6.3 Maximum Restricted Resale Price. In no event shall the Property be sold for an amount exceeding the “Maximum Restricted Resale Price,” calculated as follows:

A. The original purchase price of the Property, which reflects the affordable housing cost for the Home at the time of purchase by Owner plus an increase in the San Diego Area Median Income from the date of the of the original purchase price per year from the date of purchase to the date that the Owner’s Notice of Intent to Transfer is delivered to the City (prorated for each whole month of any part of a year and not compounded).

B. PLUS, any other costs allowed by the City pursuant to Guidelines and any applicable City policies and procedures.

6.4 No Guarantee of Price. Nothing herein shall be intended to be construed to constitute a representation or guarantee by the City that the Owner will obtain the Maximum Resale Price upon sale of the Property.

6.5 No Assumption of Owner’s Costs. The Owner must not permit any prospective buyer to assume any or all of Owner’s customary closing costs (including title policy and half of any escrow expenses) or accept any other consideration which would cause an increase in the purchase price above the Maximum Resale Price. The Owner must pay all costs of advertising and marketing the Property for sale, including real estate commissions. The Owner must not accept any other consideration which would cause an increase in the net proceeds paid to the Owner from the sale.

7. Prohibited Sale/Transfer.

7.1 Effect. Any Transfer of the Home will be subject to the provisions of this Agreement including, without limitation, the City Option. Any prohibited sale/transfer of the Property in violation of this Deed Restriction or an attempt to make a prohibited sale/transfer must be void, must be a material breach subject to the remedies reflected in section 9, below. Transfer means any sale, assignment or transfer, voluntary or involuntary, of any interest in the Home, including, but not limited to, a fee simple interest, a joint tenancy interest, a life estate, a leasehold interest, an interest evidenced by a land contract by which possession of the Home is transferred and Owner retains title, or a deed of trust. Any Transfer without satisfaction of the provisions of this Agreement is prohibited and shall constitute a Default under this Agreement and the City may then exercise any of the 69 July 25, 2022 Item 11
8 remedies set forth herein. If the Owner makes a Transfer in violation of this Agreement, the Owner shall pay the Excess Sales Proceeds to the City as set forth in this section. For purposes of this Agreement, "Excess Sales Proceeds" shall mean one hundred ten percent (110%) of the amount by which the gross sales proceeds received by the Owner from the new buyer exceed the Maximum Restricted Resale Price for the Home (in the amount that was stated in the City Response Notice).

This amount shall be a debt of the Owner to the City, evidenced by this Agreement and secured by the City Deed of Trust. The Owner acknowledges that the City shall have no obligation to cause reconveyance of this Agreement or of the City Deed of Trust until the Excess Sales Proceeds are paid to the City. The City shall utilize the Excess Sales Proceeds for City affordable housing programs and to pay for administrative fees resulting from the Transfer in violation of this Agreement. The Owner and the City acknowledge that the formula for calculation of the amount of Excess Sales Proceeds due from the Owner to the City is intended to cause the Owner to receive the same net sales proceeds (following payment by Owner of a standard broker's commission) from sale of the Home at an unrestricted price to a third party as the Owner would receive from sale of the Home to the City or to a Qualified Household at the Maximum Restricted Resale Price.

7.2 Sales/Transfers Not Prohibited. The following are not considered prohibited sales/transfers and therefore are not subject to the City’s option to purchase the Property: (i) Transfer of title by gift, devise, or inheritance to the Owner’s spouse or domestic partner, or natural or adopted children; (ii) Transfer of title due to the Owner’s death to a surviving joint tenant, tenant by entireties, or a surviving spouse of community property; (iii) transfer to a spouse as part of divorce or dissolution proceedings; (iv) transfer of title by the Owner into an inter-vivos trust in which the Owner is the beneficiary; or (v) transfer of title or an interest in the Property to the spouse in conjunction with marriage. However, for these not to be deemed prohibited sales/transfers all of the following three conditions must be met: (i) at the time of the sale/transfer, the Property was the transferee’s primary place of residence, as set forth in section 3.3, and will continue to be the transferee’s primary place of residence, or transferee meets the definition of a Qualified Household and will make the Property his/her primary place of residence; (ii) this Deed Restriction must continue to run with title of the Property following said sale/transfer; and (iii) transferee must execute and record this Deed Restriction. A transferee who satisfies the above three conditions shall then be considered the Owner. All other Transfers shall require written notice to the City pursuant to Section 6 and shall be to Qualified Households. Consideration received by the Owner for such Transfer shall not exceed the Maximum Restricted Resale Price defined in Section 6.3, above. Failure of an Inheriting Owner to follow the procedures and file the notices described in this Section shall constitute a Default under this Agreement and the City may then exercise any of the remedies set forth herein, including, without limitation, exercise of the City Purchase Option upon Default.

8. Rental of the Property.

8.1. When Permitted. The Owner is prohibited from renting the Property at any time during the Term unless the City grants a written temporary waiver of the owner occupancy requirements set forth in section 3.3 and the City grants written approval in accordance with the following procedures:
i. The Owner must deliver written notice to the City of its intent to rent the Property no less than fifteen (15) business days prior to the execution of any lease or any other occupancy agreement for the Property.
70 July 25, 2022 Item 11
9 ii. Prior to occupancy, any tenant must be certified in writing as a Qualified Household by the City in accordance with the Guidelines. iii. A signed copy of the lease must be provided to the City prior to occupancy by any tenant. Such lease must include all provisions specified in the Guidelines, if any. iv. The maximum rental rate must be determined when the notice of intent to rent is submitted and approved by the City. The monthly rent must not exceed Owner’s monthly obligations, consisting of principal, interest, taxes, insurance, and homeowners’ dues/assessments and must result in the Property being rented at an affordable housing cost as defined in Health and Safety Code Section 50053.
v. Failure of the City to approve or otherwise respond to a request to authorize rental of a Restricted Unit shall not constitute an approval of said request.

Notwithstanding anything to the contrary or any changes to the Municipal Code, in no event shall the Owner be permitted to offer or let the Property, or any portion thereof, as a short-term rental, even if the Property is within a Residential-Commercial zone, visitor commercial, or commercial zones. The purpose of this prohibition is strictly to ensure the continued use of the Property as affordable housing.

8.2 Owner’s Liability. Nothing herein shall be construed to require the City to: (i) protect or indemnify the Owner against any losses attributable to the rental, including, but not limited to, non-payment of rent or damage to the Property; (ii) require the City to obtain a qualified tenant for the Owner in the event none is found by the Owner; or (3) require the City to enforce any of the terms of or perform any of the obligations of any lease entered into by the Owner.

9. Breach.

9.1 Defaults. The following events shall constitute a Default by the Owner under this Agreement:
(1) The City determines that the Owner has made a misrepresentation to obtain the benefits of purchase of the Home or in connection with its obligations under this Agreement; (2) The Owner fails to occupy the Home as the Owner's primary residence; (3) The Owner leases the Home to any third party without prior written City approval;
(4) The Owner makes a Transfer in violation of this Agreement; (5) The Owner otherwise fails to comply with the requirements of this Agreement, or the City Deed of Trust;
(6) A notice of default is issued under the First Lender Loan; or (7) A lien is recorded against the Home other than the lien of a bona fide first mortgage loan or a junior loan approved by the City.

Notice and Cure. Upon violation of any of the provisions of this Deed Restriction, City must 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, 71 July 25, 2022 Item 11
10 not to exceed thirty (30) days after the date the notice is mailed, or within further time as is determined by the City to be necessary to correct the violation, the City may declare a default. The City shall notify the First Lender at the address provided by the First Lender, if the City has declared a default under this Agreement or under the City Note or the City Deed of Trust

9.2 Remedies Upon Default. Upon the declaration of a default, the City may invoke any remedies available to them under this Deed Restriction including, but not limited to, seeking a court order for specific performance of the obligations of this Deed Restriction, for an injunction prohibiting a proposed sale/transfer in violation of this Deed Restriction, for a declaration that a sale/transfer in violation of this Deed Restriction is void, or for any other such relief at law or equity as may be appropriate.

9.3 Attorney fees and costs. In the event of a default by the Owner, the Owner and/or the Owner’s transferee must hold the City, its officials, employees, and agents harmless and reimburse the expenses, attorney fees, and costs for any action the City takes to enforce the provisions of this Deed Restriction.

9.4 City’s Option to Purchase. In addition to these remedies, the City has the option to purchase the Property for the Maximum Resale Price, effective upon the declaration of default. City must within thirty (30) days after a default is declared to notify the Owner of its decision to exercise its option to purchase the Property.

10. Foreclosure.

10.1 Exclusivity. This paragraph applies in the event of foreclosure of the Property. In the event of foreclosure, paragraphs 6, 8 and 9 do not apply.

10.2 Notice. The Owner must deliver to the City a foreclosure notice or any similar document he/she/they receive from a mortgagee within five (5) days of receipt.

10.3 City’s Option to Purchase. The Owner grants to the City the right and option to purchase the Property upon receipt of notice of an impending foreclosure or deed in lieu of foreclosure. In the event City intends to exercise its right, City must purchase the Property within sixty (60) days of receipt of notice, at a price equal the mortgage satisfaction amount (as herein defined). “Mortgage satisfaction amount” means the sum of the outstanding principal balance of the note secured by the mortgage, plus accrued interest and all reasonable costs and expenses which the mortgagee is entitled to pursuant to the mortgage.

10.4 Effect Upon Deed Restrictions. If City does not exercise its option to purchase the Property, the rights and restrictions contained in this document will not apply to such mortgagee upon acquisition the Property, any purchaser of the Property at a foreclosure sale conducted by such mortgagee, or any purchaser of the Property from such mortgagee and the Property must thereafter be free from all such rights and restrictions.

11. Financing. The owner may not incur any debt or promissory note secured by a deed of trust or other security instrument that encumbers the Property in excess of the original 72 July 25, 2022 Item 11
11 purchase price.

At no time shall the total principal amount of all debt secured by the Home exceed the "Permitted Encumbrance Amount", which is defined as the greater of: (i) ninety percent (90%) of the Maximum Restricted Resale Price as of the date of the Owner's request to the City of approval of the Owner's refinance (the "Refinance Request Notice"); or (ii) the outstanding balance of the existing First Lender Loan as of the date of the Refinance Request Notice. Mortgage loans which include negative amortization and adjustable-rate mortgages are prohibited. If escrow does not close on the refinance within one hundred twenty (120) days of the date of the Refinance Request Notice, the City shall have the right to recalculate the Permitted Encumbrance Amount. Owner shall not be in Default hereunder at the time of initial purchase of the Home by the Owner, if, at that time, the initial debt secured by the Home exceeds the Permitted Encumbrance Amount and Owner does not further encumber the Home until the Permitted Encumbrance Amount complies with this Section.

The City shall permit and approve a prepayment and refinance of the existing First Lender Loan and shall provide for the subordination of this Agreement, the City Deed of Trust to the refinanced First Lender Loan only if such refinance does not cause the total debt secured by the Home, including junior mortgage loans and equity lines of credit, to exceed the Permitted Encumbrance Amount. The City will not approve any mortgage loan which includes negative amortization, nor will the City approve any adjustable-rate mortgages.

Mortgage loans or equity lines of credit junior in lien priority to this Agreement, the City Deed of Trust are not permitted, except when expressly approved by the City in writing. The City shall only approve junior mortgage loans or equity lines of credit which will not cause the total of all debt secured by the Home (calculated assuming a maximum permitted draw on any equity line of credit) to exceed the Permitted Encumbrance Amount. The City will not approve any mortgage loan or equity line of credit which includes negative amortization, nor will the City approve any adjustablerate mortgages.

12. Liability, Insurance, Damage, Destruction, and Improvements.

12.1 Owner’s Liability. The Owner has sole responsibility and liability to all persons and authorities related to the Owner’s possession, occupancy, and use of the Property and must hold the City harmless from all claims of liability for injury or damage to person or property from any cause, on or about the Property. The Owner waives all claims against the City for such injury or damage.

12.2 Insurance. The Owner must, at the Owner’s expense, procure and maintain a standard all risk property insurance policy equal to the current replacement value of the Home adjusted annually to reflect changes to local building costs calculated on a per square foot basis (or by appraisal, if requested by the City), naming the City, the City and their employees, agents, officers, board members and/or council members as additional insureds. The policy shall be adjusted annually to reflect changes to local building costs calculated on a per square foot basis (or by appraisal, if requested by the City). The City has the right, but not the obligation, to inform Owner of the then-current replacement value of the Home.

12.3 Damage to the Property. In the event of fire or other damage to the Property, the Owner must take all necessary steps to ensure the repair of such damage and the restoration of the 73 July 25, 2022 Item 11
12 Property to its condition immediately prior to the damage. All such repairs and restoration must be completed as promptly as possible. Provided, however: If the Owner, using reasonable judgment and relying on professional estimates, determines that either: (i) full repair and restoration of the Property and improvements is physically impossible; or (ii) insurance proceeds will pay for less than eighty percent (80%) of the cost of repair and restoration, then the Owner may elect not to repair or restore the Property. In this case, the mortgagee is to receive all condemnation or insurance proceeds, however, all proceeds in excess of the mortgage satisfaction amount must be paid to the City.

12.4 Eminent Domain. If the Property is taken by reason of eminent domain or other action of public authority prior to expiration of this deed restriction and:
i. The Property is either taken in entirety or to such extent that the Property is lost or damaged beyond repair, this Deed Restriction must terminate as of the date the Owner is required to give up possession of the Property.
ii. The taking of the Property results in damage to the Property only to such an extent that the Property can reasonably be restored to a residential use consistent with this Deed Restriction, the Owner must utilize such of the monetary compensation as is needed to repair or restoration of the Property.
iii. All proceedings brought by a party in connection with any damages as a result of any taking referred to in this section 12.4 must be conducted at the sole expense of such party. If any provision of law requires that such proceedings be brought by or in the name of the Owner, the Owner must join in the proceedings or permit the same to be brought in the Owner’s name. Each party agrees to do all acts and execute all documents that may be required to enable the other to maintain such proceedings. If the party required to join in the proceedings incurs any cost or expense in doing so, such party must be entitled to reasonable reimbursement and this entitlement must constitute a first charge against any monetary compensation for the taking.

12.5 Improvements. The Owner may make improvements to the Property and recapture some of the value of said improvements if the Owner and City enter into a written agreement regarding the cost of the improvements, the scope of work, the depreciation of the improvements, if any, and recapture of value of the improvements. General property maintenance and repairs are not considered to add value and the Owner is obligated to make such when necessary.

12.6 Indemnity. Owner agrees to defend, indemnify, and hold the City, and their agents, employees, officers and board members harmless from all losses, damages, liabilities, claims, actions, judgments, costs, and reasonable attorneys’ fees that the City, or such persons may incur as a direct or indirect consequence of: (1) Owner's default, performance, or failure to perform any obligations as and when required by this Agreement or the City Deed of Trust; or (2) the failure at any time of any of Owner's representations to the City to be true and correct.

13. General Provisions.

13.1 Notice. Any notice required or permitted under this Deed Restriction must be given in writing and delivered in person or mailed, by certified or registered mail, return receipt requested, 74 July 25, 2022 Item 11
13 at the address set forth below, or such other address designated by the written notice. All notices must be effective upon being deposited in the United States Mail or, in the case of personal delivery, upon actual receipt.

If to City: City of Del Mar
Attn:
1050 Camino Del Mar
Del Mar, CA 92014
If to Owner: At the address set forth in the opening paragraph.

13.2 Severability. Whenever possible, each provision of this Deed Restriction and any other related document must be interpreted in such manner as to be valid under applicable law.

However, if any provision must be invalid or prohibited under said applicable law, such provisions must be ineffective only to the extent of such invalidity or prohibition without invalidating the remaining provisions of such document.

13.3 Choice of Law and Venue. This Deed Restriction must be interpreted in accordance with and governed by the laws of the State of California. Venue for any legal action arising from this Deed Restriction must be in San Diego County, California.

13.4 Waiver. Waiver by the City of any term or condition of this Deed Restriction, or the failure of the City to act with respect to any breach of any such term or condition, must not be deemed to be a waiver of such term or condition regarding any subsequent breach of such term or condition, or of any other term or condition of the Deed Restriction. The City may grant waivers in the terms of this Deed Restriction, but such waivers must be in writing and signed by the City before becoming effective.

13.5 Successors. The provisions and covenants contained herein must inure to the benefit of, and be binding upon, successors and assigns of the parties.

13.6 Authority. Each of the parties warrants that it has complete and full authority, without limitation, to commit itself to all terms and conditions of this Deed Restriction, including every representation, certification and warranty contained herein.

13.7 Further Actions. The parties agree to execute such further documents and take such further actions as may be deemed reasonably necessary to carry out the provisions and intent of this Deed Restriction or any agreement or document relating hereto or entered in connection herewith.

13.8 Amendment. This Deed Restriction may not be amended unless in writing, signed by all parties, and recorded with the San Diego County Recorder.

13.9 Conflicts. To the extent any Covenants, Conditions and Restrictions, bylaws, or any other limitations or restrictions placed upon the Property by a builder, developer, or homeowner’s association conflicts with any provisions of this Deed Restriction or the Guidelines, the applicable 75 July 25, 2022 Item 11
14 provision of this Deed Restriction or the applicable Guideline shall prevail.

13.10 FHA Loans. If the Property is encumbered by a mortgage insured by the Federal Housing Authority, the provisions of 24 C.F.R. 203.41 prevail to the extent such provisions conflict with any provisions of this Deed Restriction. Notwithstanding any other provision in this Agreement to the contrary, this Agreement shall not diminish or affect the rights of the United States Department of Housing and Urban Development ("HUD") or the Veterans Administration ("VA") under the First Lender Deed of Trust.

Notwithstanding any other provisions in this Agreement to the contrary, all of the provisions of this Agreement shall terminate and have no further force in the event title is acquired by HUD or VA or another party upon foreclosure of a deed of trust insured by HUD or guaranteed by VA.

Notwithstanding other provisions of this Agreement, the City Option on Default shall not be exercised by the City when a deed of trust insured by HUD is secured by the Home, and: (i) the owner is undergoing consideration by HUD for assignment forbearance relief; or (ii) the owner is undergoing consideration for relief under HUD's Temporary Mortgage Assistance Payment (TMAP) program.

13.11 Subordination. Notwithstanding any other provision hereof, the provisions of this Agreement shall be subordinate to the lien of the First Lender Loan and shall not impair the rights of the First Lender, or the First Lender's successor or assign, to exercise its remedies under the First Lender Deed of Trust in the event of default under this First Lender Deed of Trust by the Owner.

Such remedies under the First Lender Deed of Trust include the right of foreclosure or acceptance of a deed or assignment in lieu of foreclosure. After such foreclosure or acceptance of a deed in lieu of foreclosure, this Agreement shall be forever terminated and shall have no further effect as to the Home or any transferee thereafter; provided, however, if the holder of such First Lender Deed of Trust acquired title to the Home pursuant to a deed or assignment in lieu of foreclosure and no notice of default was recorded against the Home by such holder in connection therewith, this Agreement and shall automatically terminate upon such acquisition of title, only if (i) the City has been given written notice of default under such First Lender Deed of Trust with a sixty (60)-day cure period (which requirement shall be satisfied by recordation of a notice of default under California Civil Code Section 2924), and (ii) the City shall not have cured the default within such sixty (60)-day period. Owner agrees to record any necessary documents to effect such termination, if applicable.

13.11 Nondiscrimination. The Owner covenants by and for itself and its successors and assigns that there shall be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, transfer, use, occupancy, tenure or enjoyment of the Home, nor shall the Owner or any person claiming under or through the Owner establish or permit any such practice or practices of discrimination or segregation with reference to the use, occupancy, or transfer of the Home. The foregoing covenant shall run with the land. 76 July 25, 2022 Item 11
15 IN WITNESS WHEROF, the parties have executed this Deed Restriction at Del Mar, California on the day and year first written above.

OWNER: CITY OF DEL MAR:

Owner City of Del Mar
77 July 25, 2022 Item 11

EXHIBIT A
The “Home”
LEGAL DECRIPTION:
(To be filled-in once the home exists)
78 July 25, 2022 Item 11

EXHIBIT B
2131\01\3228451.1
City of Del Mar Affordable Housing
Owner Occupied Annual Certification
Please complete this form and return to:

City of Del Mar, Planning & Community Development
1050 Camino Del Mar
Del Mar, CA 92014
Owner
Name(s): _______________________________________________ Phone: ____________________ Address: ________________________________________________ Unit: ______________________ City: ______________________________ State: ___________ Zip Code: _______________________ E-Mail: _____________________________________
I hereby certify under the penalty of perjury:

Y____ N ____. That the affordable unit listed above is my primary residence.

Y____ N ____. I have occupied the affordable unit as my primary place of residence since ______.

Y____ N ____. I have not leased the affordable unit in violation of the Resale Restriction Agreement.

Y N I have not offered or let the affordable unit be used as a Short Term Rental (STR) Please provide source documentation of your residency
(Utility Bill, HOA or Mortgage Statement, Insurance, or other verifiable documentation)

CERTIFICATION

OWNER CERTIFICATION
I/We have read the information submitted above and certify that the information is accurate and complete to my/our knowledge. I/We acknowledge and understand that a material misstatement fraudulently made in this affidavit or in any other statement made by me/us in connection with the affordability restriction recorded against this property will constitute a federal violation punishable by fine and abatement of use of subject property, which will be in addition to any criminal penalty imposed by law.
79 July 25, 2022 Item 11

EXHIBIT B
2131\01\3228451.1
This Owner Occupied Annual Certification is signed on date written below, under the penalty of perjury.

Owner(s)
___________________________ ______________________________ __________ Name (Print) Signature Date
___________________________ ______________________________ __________ Name (Print) Signature Date
80 July 25, 2022 Item 11

EXHIBIT C
FORM OF OWNER’S NOTICE OF INTENT TO TRANSFER
TO: City of Del Mar
FROM: [State names of Owners]
Address of Home: ___________________________
Date:

Please be notified pursuant to Section 6 of the Affordable Housing Occupancy, Refinancing, and Resale Deed Restriction Agreement between Owner and City dated(the “Agreement”), that the Owner intends to transfer the Home listed above.

The following information is provided to the City pursuant to Section 6 of the Agreement:

1. Address of the Home: _____________________________________________

2. Date Owner purchased the Home:

3. Purchase Price paid by Owner for the Home:
(Include a copy of the HUD-1 Settlement Statement or equivalent document from the close of escrow on the Owners purchase of the home)

4. Date Owner intends to vacate the Home:

5. Date the Home will be placed on the market:

6. Name and telephone number for City to contact to schedule inspection:

7. Have Capital Improvements been made to the Residence? ___ yes / ___ no If yes, please attach copies of the City’s written approval of the Capital Improvements, and all required permits for the Capital Improvements.

I agree to cooperate with the City to schedule an inspection of the Residence by the City or its designee.

I/we certify that this Owner’s Notice of Intent to Transfer is true and correct and is signed on:

By: ___________
Owner [type name]
By: ___________
Owner [type name]
81 July 25, 2022 Item 11

EXHIBIT E
City of Del Mar Affordable Housing
Owner Occupied Annual Certification
Please complete this form and return to:

City of Del Mar, Planning & Community Development
1050 Camino Del Mar
Del Mar, CA 92014
Owner
Name(s): _______________________________________________ Phone: ____________________ Address: ________________________________________________ Unit: ______________________ City: ______________________________ State: ___________ Zip Code: _______________________ E-Mail: _____________________________________
I hereby certify under the penalty of perjury:

Y____ N ____. That the affordable unit listed above is my primary residence.

Y____ N ____. I have occupied the affordable unit as my primary place of residence since ______.

Y____ N ____. I have not leased the affordable unit in violation of the Resale Restriction Agreement.

Y N I have not offered or let the affordable unit be used as a Short Term Rental (STR) Please provide source documentation of your residency
(Utility Bill, HOA or Mortgage Statement, Insurance, or other verifiable documentation)

CERTIFICATION

OWNER CERTIFICATION
I/We have read the information submitted above and certify that the information is accurate and complete to my/our knowledge. I/We acknowledge and understand that a material misstatement fraudulently made in this affidavit or in any other statement made by me/us in connection with the affordability restriction recorded against this property will constitute a federal violation punishable by fine and abatement of use of subject property, which will be in addition to any criminal penalty imposed by law.
82 July 25, 2022 Item 11
This Owner Occupied Annual Certification is signed on date written below, under the penalty of perjury.

Owner(s)
___________________________ ______________________________ __________ Name (Print) Signature Date
___________________________ ______________________________ __________ Name (Print) Signature Date
83 July 25, 2022 Item 11
City of Del Mar
Agenda Report
________________________________________________________________________________________________________ City Council Action:

TO: Honorable Mayor and City Council Members
FROM: Sarah Krietor, Administrative Services Manager/City Clerk Via Ashley Jones, City Manager
DATE: July 25, 2022
SUBJECT: Amended 2022 City Council Meeting Schedule
REQUESTED ACTIONS/RECOMMENDATION:

Staff recommends that the City Council adopt a Resolution (Attachment A) amending the 2022 City Council Meeting Schedule (Exhibit A to Attachment A) to add a regular City Council meeting on August 10, 2022.

DISCUSSION/ANALYSIS:

The Del Mar Municipal Code (DMMC) Section 2.20.040(A), states that, “Regular meetings of the City Council shall be held on the first and third Monday of each month,” and further states that, “The City Council may, by resolution, designate another date, time, and location for a regular meeting.”
The DMMC, and the procedures adopted by the City Council through Resolution 2009- 40, requires the City Council to annually adopt a meeting schedule for the following calendar year. On November 1, 2021, the City Council adopted Resolution 2021-47 approving the 2022 City Council Meeting schedule, which included a City Council recess and not hold regular meetings in August.

However, occasionally, it is necessary for the City Council to amend the regular meeting schedule by resolution to add, cancel, or reschedule regular meetings. Due to the time sensitive nature of current City business scheduled to come before the City Council, it is necessary for the City to hold a regular City Council meeting in August 2022.

As such, staff recommends that the City Council adopt a Resolution (Attachment A) amending the 2022 City Council Meeting Schedule (Exhibit A to Attachment A) to add a regular City Council meeting on August 10, 2022, at 2:00 p.m. The revised 2022 City Council Meeting Calendar reflecting the additional meeting is included as Attachment B.

FISCAL IMPACT:

There is no fiscal impact or action to be taken related to this agenda item. 1 July 25, 2022 Item 12
City Council Agenda Report
City Council 2022 Meeting Schedule Amendment
July 25, 2022

ENVIRONMENTAL IMPACT:

The proposed City Council action does not constitute a “project” under the definition set forth in California Environmental Quality Act (CEQA) Guidelines Section 15378 because it will not have a potential to result in a direct or indirect physical change in the environment and is, therefore, not subject to CEQA. No further action under CEQA is required.

NEXUS TO CITY COUNCIL GOALS AND PRIORITIES:

This is an operational item and not specifically related to the identified Council goals and priorities for FY 2022-23.

ATTACHMENTS:

Attachment A – Resolution Amending the 2022 City Council Meeting Schedule Exhibit A to Attachment A- Amended 2022 City Council Meeting Schedule Attachment B – Amended 2022 City Council Meeting Calendar 2 July 25, 2022 Item 12
RESOLUTION NO. 2022-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DEL

MAR, CALIFORNIA, AMENDING THE REGULAR MEETING
SCHEDULE OF THE CITY COUNCIL FOR THE 2022 CALENDAR
YEAR
WHEREAS, Del Mar Municipal Code Section 2.20.040 Regular Meetings, Subsection A, states that “Regular” meetings of the City Council shall be held on the first and third Monday of each month in the City Council Chambers; and WHEREAS, Del Mar Municipal Code Section 2.20.040 Regular Meetings, Subsection B, states, “The City Council may, by resolution, designate another date, time, and location for a regular meeting;” and
WHEREAS, Council adopted Resolution No. 2009-40 establishing procedures for setting the Council meeting schedule on an annual basis; and WHEREAS, it is important that the public know and understand when the City Council will conduct its regular meetings; and
WHEREAS, Resolution 2021-47 was adopted on November 1, 2021, approving the 2022 City Council Regular Meeting Schedule; and
WHEREAS, it is also important that there be flexibility in the schedule of regular meetings in order to complete the City’s business; and
WHEREAS, the City Council has determined that it is necessary to hold an additional regular meeting on August 10, 2022, at 2:00 p.m. to conduct time sensitive City business.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Del Mar, California, that the City Council hereby amends the City Council Regular Meeting Schedule for the 2022 calendar year to add a meeting on August 10, 2022, as shown in Exhibit A to this Resolution, and directs the City Clerk to post the amended schedule at City Hall and on the City’s website.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Del Mar, California, at a Regular Meeting held this 25th day of July, 2022. _____________________________
Dwight Worden, Mayor
City of Del Mar
3 July 25, 2022 Item 12
Resolution No. 2022-___

APPROVED AS TO FORM:

Leslie E. Devaney, City Attorney
City of Del Mar
ATTEST AND CERTIFICATION:

STATE OF CALIFORNIA

COUNTY OF SAN DIEGO

CITY OF DEL MAR
I, SARAH KRIETOR, Administrative Services Manager/City Clerk of the City of Del Mar, California, DO HEREBY CERTIFY, that the foregoing is a true and correct copy of Resolution No. 2022-__, adopted by the City Council of the City of Del Mar, California, at a Regular Meeting held the 25th day of July 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Sarah Krietor, Administrative Services
Manager/City Clerk
City of Del Mar
4 July 25, 2022 Item 12
City of Del Mar
1050 Camino Del Mar, Del Mar, CA 92014 | 858.755.9313 | www.delmar.ca.us 2022 City Council Regular Meeting Schedule
Regular Meetings are held at the Del Mar Town Hall, 1050 Camino del Mar, Del Mar, or remotely due to COVID-19, at 4:30 p.m. on the date shown, unless otherwise noted on the published agenda. Special Meetings and/or Workshops may be held in an alternate location or remotely during COVID-19 as posted on the agenda.

DATE MEETING TYPE
Monday, January 10, 2022 Regular
Monday, February 7, 2022 Regular
Tuesday, February 22, 2022 Regular
Monday, March 7, 2022 Regular
Monday, March 21, 2022 Regular
Monday, April 4, 2022 Regular
Monday, April 18, 2022 Regular
Monday, May 2, 2022 Regular
Monday, May 18, 2022 Regular
Monday, June 6, 2022 Regular
Monday, June 20, 2022 Regular
Monday, July 6, 2022 Regular
Monday, July 11, 2022 Regular
Monday, July 25, 2022 Regular
Wednesday, August 10, 2022 at 2 PM Regular
Tuesday, September 6, 2022 Regular
Monday, September 19, 2022 Regular
Monday, October 3, 2022 Regular
Monday, October 17, 2022 Regular
Monday, November 14, 2022 Regular
Monday, December 5, 2022 Regular
Monday, December 19, 2022 Regular
Adopted by Resolution 2021-47; Amended by Resolution 2022-XX 5 July 25, 2022 Item 12

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Key:

City Council Meeting
City Holiday
Special Meetings February / March, City Council Goal Setting Workshop Approved x/xx/2022
2022 Del Mar City Council Meeting Calendar
July August September
October November December
January February March
April May June
6 July 25, 2022 Item 12