no possibility that the act ivity in question may have a signifi cant effect on the environment. (State CEQA Guidelines, § 15061(b)(3).) The City’s action does not authorize any new development or other action that has the potential to significantly impact the environment.
SECTION 3. Surplus Land Act . The City Council has determined that the Property is exempt from the Surplus Land Act as exempt surplus land pursuant to Government Code section 54221(f)(1)(A) based on the findings set forth in the Resolution attached as Attachment 3 to the agenda report.
SECTION 4 . Approval; Authorization . The City Council hereby : (1) a pproves the PSA attached hereto as Exhibit “A” in substantially the form presented, subject to minor non-substantive revisions approved by the City At torney; (2) authorizes the City Manager to sign and enter into the PSA on behalf of the City; and (3) authorizes the City Manager or designee to perform the City’s obligations under the PSA.
SECTION 5. Severability. If any section, subsection, paragraph, sentence, clause or phrase of this Resolution is declared by a court of competent jurisdiction to be unconstitutional or otherwise invalid, such decision shall not affect the validity of the remaining portions of this Resolution.
SECTION 6. Certification. The City Clerk shall certify to the adoption of this Resolution.
PASSED, APPROVED AND ADOPTED by the City Counil of the City of Lake Forest at a regular meeting held on the 2nd of July 2024, by the following roll call vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
Mark Tettemer, Mayor
ATTEST:
Lisa Berglund, City Clerk
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Resolution No. _____
EXHIBIT “A”
City Sale PSA
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REAL PROPERTY PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
(Property at 20702 El Toro Road #35, Lake Forest, CA, APN: 938-741-79) by and between
City of Lake Forest
a California Municipal Corporation
And
South County Outreach, a California Non-Profit Public Benefit Corporation DATED AS OF [INSERT] ____, 2024, FOR REFERENCE PURPOSES ONLY Item: 6
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REAL PROPERTY PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS
(PROPERTY AT 20702 EL TORO ROAD #35, APN: 938-741-79)
This REAL PROPERTY PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS, ( 20702 EL TORO ROAD , APN: 938-741-79) (“Agreement”) is dated as of [insert] _____, 2024, for reference purposes only, and is entered into by and between the City of Lake Forest, a California municipal corporation (“Seller”), and South County Outreach, a California non-profit public benefit corporation (“Buyer”). Seller and Buyer enter into this Agreement with reference to the following recitals of fact (each, a “Recital”):
RECITALS
A. Seller is the owner of certain real prope rty located at 20702 El Toro Road, #35, Lake Forest, CA, Assessor Parcel Number: 938-741-79 (specifically defined in Section 1.1.50 as the “Property”).
B. Seller acquired the Property from South County Outreach (i.e., Buyer) on [ insert date], 2024. Until Seller acquired the Property, Buyer had been its sole fee simple owner since October 3, 2022.
C. Buyer desires to re-purchase the Property from Seller , together, with (a) all privileges, rights, easements, and appurtenances belonging to the Property, including without limitation all minerals, oil, gas and other hydrocarbon substances on and under the Property, (b) all development rights, air rights, water, water rights and water stock relating to the Property, and (c) all right, title and interest of Seller in and to any streets, alleys, passages, other easements and other rights -of-way or appurtenances included in, adjacent to or used in connection with such Property;
D. In consideration of the Purchase Price (as defined in Section 1.1.51), Buyer will utilize the Property for affordable housing purposes pursuant to the Regulatory Agreement (as defined in Section 1.1.52) for at least 30 years;
E. The transaction contemplated by this Agreement is exempt from the voter approval requirement of Section 1 of Article 34 of the California Constitution pursuant to California Health and Safety Code section 37001.5(a). Seller’s ownership of the Property was a temporary measure to protect its security and Seller , at all relevant times, intended to promptly change ownership to another party so that Seller would not continue to be the owner of a low-rent housing project (i.e., the Property);
NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND COVENANTS
OF SELLER AND BUYER SET FORTH IN THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, SELLER AND BUYER AGREE, AS FOLLOWS:
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TERMS AND CONDITIONS
1. DEFINITIONS
1.1 Definitions. The following words, terms and phrases are used in this Agreement with the following meanings, unless the particular context or usage of a word, term or phrase requires another interpretation:
1.1.1 Affiliate. Any other Person, directly or indirectly, Controlling or Controlled by or under common Control with the specified Person.
1.1.2 Agreement. This Real Property Purchase and Sale Agreement and Joint Escrow Instructions (20702 El Toro Road, Lake Forest, CA, Assessor Parcel Number: 938-741- 79) by and between Seller and Buyer, including all of the attached exhibits.
1.1.3 Approval. Any license, permit, approval, consent, certificate, ruling, variance, authorization, conditional use permit or amendment to any of the foregoing, as shall be necessary or appropriate under any Law to commence, perform or complete any construction on or development of the Property.
1.1.4 Bankruptcy Law. Title 11 United States Code or any other or successor State or Federal statute relating to assignment for the benefit of creditors, appointment of a receiver or trustee, bankruptcy, composition, insolvency, moratorium, reorganization or similar matters.
1.1.5 Bankruptcy Proceeding . Any proceeding, whether voluntary or involuntary, under any Bankruptcy Law.
1.1.6 Business Day. Any day other than Saturday or Sunday or a State public holiday.
1.1.7 Buyer. South County Outreach, a non-profit corporation, and any assignee of or successor to the rights, powers or responsibilities of South County Outreach.
1.1.8 Buyer’s Parties. Collectively, Buyer, and Buyer’s agents and attorneys.
1.1.9 Buyer Title Policy . A standard CLTA owners’ policy of title insurance issued by the Title Company, with coverage in the amount of the Purchase Price, showing title to the Property vested in Buyer, subject only to Permitted Exceptions.
1.1.10 City. The City of Lake Forest, California.
1.1.11 City Manager . The City Manager of Seller, or his or her designee or successor in function.
1.1.12 Claim. Any claim, loss, cost, damage, expense, liability, lien, action, cause of action (whether in tort, contract, under statute, at law, in equity or otherwise), charge, award, assessment, fine or penalty of any kind (including consultant and expert fees and expenses Item: 6
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and investigation costs of whatever kind or nature and, if an Indemnitor improperly fails to provide a defense for an Indemnitee, then Legal Costs of the Indemnitee) and any judgment.
1.1.13 Close of Escrow. The first date on which the Escrow Agent has filed the Seller Deed with the County for recording in the official records of the County.
1.1.14 Control. Possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether by ownership of Equity Interests, by contract or otherwise.
1.1.15 County. The County of Orange, California.
1.1.16 Default. An Escrow Default, a Monetary Default or a Non -Monetary Default. Notwithstanding any other provision of this Agreement, HCD’s failure to approve Seller’s SLA exemption determination for the conveyance of the Property shall not constitute a Default (of any kind) under this Agreement.
1.1.17 Default Interest. Interest at an annual rate equal to the lesser of: (a) eight (8%) per annum; or (b) the Usury Limit.
1.1.18 Due Diligence Completion Notice . A written notice from Buyer delivered to both Seller and Escrow Agent, prior to the end of the Due Diligence Period, indicating Buyer’s unconditional acceptance of the condition of the Property or indicating Buyer’s rejection of the condition of the Prope rty and refusal to accept a conveyance of title to the Property, describing in reasonable detail the actions that Buyer reasonably believes are indicated to allow Buyer to unconditionally accept the condition of the Property.
1.1.19 Due Diligence Investigations. Buyer’s due diligence investigations of the physical and economic feasibility of the Property for Buyer’s intended use of the Property, including investigation of the environmental and geotechnical conditions of the Property, obtaining Approvals for Buyer ’s intended use of the Property, studying the economic feasibility of Buyer’s intended use of the Property, obtaining tenant commitments for Buyer’s intended use of the Property, all as deemed appropriate in the reasonable discretion of Buyer and all at the sole cost and expense of Buyer.
1.1.20 Due Diligence Period. The time period of five (5) consecutive calendar days commencing on the day immediately following the Escrow Opening Date.1
1.1.21 Effective Date. Defined in Section 2.
1.1.22 Equity Interest. All or any part of any equity or ownership interest(s) (whether stock, partnership interest, beneficial interest in a trust, membership interest in a limited liability company, or other interest of an ownership or equity nature) in any entity, at any tier of ownership, that directly owns or holds any ownership or equity interest in a Person.
1 To be confirmed.
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1.1.23 Escrow. An escrow, as defined in Civil Code Section 1057 and Financial Code Section 17003(a), that is conducted by the Escrow Agent with respect to the sale of the Property from Seller to Buyer pursuant to this Agreement.
1.1.24 Escrow Agent. Chicago Title Company, Mike Slinger, 725 S. Figueroa Street, Suite 200, Los Angeles , California 90017 – Email: [email protected] or such other Person mutually agreed upon in writing by both Seller and Buyer.
1.1.25 Escrow Closing Date . The earlier of: (a) on or before the third (3rd ) Business Day following the Escrow Agent’s receipt of written confirmation from both Seller and Buyer of the satisfaction or waiver of all conditions precedent to the Close of Escrow; (b) the 30th (30th) calendar day following the Escrow Opening Date; or (c) another date mutually agreed upon in writing between the Parties for the Close of Escrow, in the Parties’ respective sole and absolute discretion.
1.1.26 Escrow Closing Statement. A statement prepared by the Escrow Agent indicating, among other things, the Escrow Agent’s estimate of all funds to be deposited or received by Seller or Buyer, respectively, and all charges to be paid by Seller or Buyer, respectively, through the Escrow.
1.1.27 Escrow Default. The unexcused failure of a Party to submit any document or funds to the Escrow Agent as reasonably necessary to close the Escrow, pursuant to the terms and conditions of this Agreement.
1.1.28 Escrow Opening Date. The first date on which a copy of this Agreement signed by both Seller and Buyer is deposited with the Escrow Agent and Escrow Agent signs and returns the acknowledgement attached hereto and delivers to Seller and Buyer a fully signed Agreement, as provided in Section 4.1.
1.1.29 Event of Default. The occurrence of any one or more of the following:
(a) Monetary Default. A Monetary Default that continues for seven (7) calendar days after Notice to the Party in Default, specifying in reasonable detail the amount of money not paid or the bond, surety or insurance not provided; (b) Escrow Default . An Escrow Default that continues for seven (7) calendar days after Notice to the Party in Default, specifying in reasonable detail the document or funds not submitted;
(c) Bankruptcy or Insolvency . Buyer admits in writing that Buyer is unable to pay Buyer’s debts as they become due or Buyer becomes subject to any Bankruptcy Proceeding (except an involuntary Bankruptcy Proceeding dismissed within ninety (90) days after commencement), or a custodian or trustee is appointed to take possession of, or an a ttachment, execution or other judicial seizure is made with respect to, substantially all of Buyer’s assets or Buyer’s interest in this Agreement or the Property (unless such appointment, attachment, execution, or other seizure was involuntary and is conte sted with diligence and continuity and vacated and discharged within ninety (90) days);
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(d) Transfer. The occurrence of a Transfer, whether voluntarily or involuntarily or by operation of Law, in violation of the terms or conditions of this Agreement; or (e) Non-Monetary Default . Any Non -Monetary Default, other than those specifically addressed in Section 1.1.29(c) or Section 1.1.29(d), that is not cured within thirty (30) days after Notice to the Party in Default describing the Non -Monetary Default in reasonable detail. In the case of such a Non-Monetary Default that cannot with reasonable diligence be cured within thirty (30) days after the effective date of such Notice, an Event of Default shall occur, if the Party in Default does not do all of the following: (a) withi n thirty (30) days after Notice of such Non-Monetary Default, advise the other Party of the intention of the Party in Default to take all reasonable steps to cure such Non-Monetary Default; (b) duly commence such cure within such thirty (30) day period; and (c) diligently prosecute such cure to completion within a reasonable time under the circumstances.
1.1.30 Federal. The federal government of the United States of America.
1.1.31 Final. Relative to issuance or denial of any Approval, when all administrative appeal periods regarding such Approval have expired, without the valid commencement of any such appeal, or all administrative appeals or challenges validly commenced regarding such Approval have been resolved to Buyer’s reasonable satisfaction.
1.1.32 FIRPTA Affidavit. A certification that Seller is not a “foreign person” within the meaning of such term under Section 1445 of the United States Internal Revenue Code in the form attached hereto as Exhibit B.
1.1.33 Form 593. A California Franchise Tax Board Form 593-C.
1.1.34 Government. Any and all courts, boards, agencies, commissions, offices or authorities of any nature whatsoever of any governmental unit (Federal, State, County, district, municipal, City or otherwise) whether now or later in existence.
1.1.35 HCD. The California Department of Housing and Community Development.
1.1.36 Indemnify. Where this Agreement states that any Indemnitor shall “indemnify” any Indemnitee from, against or for a particular Claim, that the Indemnitor shall indemnify the Indemnitee and defend and hold the Indemnitee harmless from and against such Claim (alleged or otherwise). “Indemnified” shall have the correlative meaning.
1.1.37 Indemnitee. Any Person entitled to be Indemnified under the terms of this Agreement.
1.1.38 Indemnitor. A Party that agrees to Indemnify any other Person under the terms of this Agreement.
1.1.39 Law. Every law, ordinance, requirement, order, proclamation, directive, rule or regulation of any Government applicable to the Property, in any way, including relating to any development, construction, use, maintenance, taxation, operation, occupancy of or Item: 6
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environmental conditions affecting the Property, or relating to any taxes, or otherwise relating to this Agreement or any Party’s rights, obligations or remedies under this Agreement, or any Transfer of any of the foregoing, whether in force on the Effecti ve Date or passed, enacted, modified, amended or imposed at some later time, subject in all cases, however, to any applicable waiver, variance or exemption.
1.1.40 Legal Costs. In reference to any Person, all reasonable costs and expenses such Person incurs in any legal proceeding or other matter for which such Person is entitled to be reimbursed for its Legal Costs, including reasonable attorneys’ fees, court costs and expenses and consultant and expert witness fees and expenses.
1.1.41 Monetary Default. Any failure by either Party to pay or deposit, when and as this Agreement requires, any amount of money, bond, surety or evidence of any insurance coverage required to be provided under this Agreement, whether to or with a Party or a Third Person.
1.1.42 Non-Monetary Default. The occurrence of any of the following, except to the extent constituting a Monetary Default or an Escrow Default: (a) any failure of a Party to perform any of such Party’s obligations under this Agreement; (b) any failure of a Party to comply with any material restriction or prohibition in this Agreement; or (c) any other event or circumstance that, with passage of time or giving of Notice, or both, or neither, would constitute a breach of this Agreement by a Party.
1.1.43 Notice. Any consent, demand, designation, election, notice or request relating to this Agreement, including any Notice of Default. All Notices must be in writing.
1.1.44 Notify. To give a Notice.
1.1.45 Parties. Collectively, Seller and Buyer.
1.1.46 Party. Individually, either Seller or Buyer, as applicable.
1.1.47 Permitted Exception . All of the following: (a) all items shown in the Preliminary Report as exceptions to coverage under the proposed Buyer Title Policy that are approved by Buyer pursuant to Section 3.3; (b) any lien for non -delinquent property taxes or assessments; (c) any Laws applicable to the Property; (d) this Agreement; (e) the covenants, conditions or powers in the Seller Deed; (f) any existing improvements on the Property, if any; (g) any Approval; and (h) any other document or encumbrance expressly required or allowed to be recorded against the Property pursuant to the terms of this Agreement.
1.1.48 Person. Any association, corporation, governmental entity or agency, individual, joint venture, joint -stock company, limited liability company, partnership, trust, unincorporated organization or other entity of any kind.
1.1.49 Preliminary Report. A preliminary report issued by the Title Company in contemplation of the issuance of the Buyer Title Policy, accompanied by the best available copies of all documents listed in Schedule B of the report as exceptions to coverage under the proposed Buyer Title Policy.
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1.1.50 Property. That certain real property specifically described in Exhibit A attached to this Agreement.
1.1.51 Purchase Price. One dollar and zero cents ($1.00).
1.1.52 Regulatory Agreement. The Regulatory Agreement and Declaration of Restrictive Covenants restricting the us e of Property for affordable housing in substantially the form of Exhibit C.
1.1.53 Seller. City of Lake Forest, a California municipal corporation and any assignee of or successor to the rights, powers or responsibilities of City of Lake Forest.
1.1.54 Seller Deed . A deed conveying Seller’s interest in the Property from Seller to Buyer, at the Close of Escrow, substantially in the form of Exhibit D attached to this Agreement.
1.1.55 Seller Parties . Collectively, Seller, Seller’s City Council, and Seller’s elected officials, employees, agents and attorneys.
1.1.56 SLA. The Surplus Land Act set forth in California Government Code section 54220 et seq.
1.1.57 State. The State of California.
1.1.58 Third Person. Any Person that is not a Party, an Affiliate of a Party or an elected official, officer, director, manager, shareholder, member, principal, partner, employee or agent of a Party.
1.1.59 Title Company . Chicago Title Company , Ken Cyr, 725 S. Figueroa Street, Suite 200, Los Angeles , California – Email: [email protected], or such other Person mutually agreed upon in writing by both Seller and Buyer.
1.1.60 Title Notice. A written notice from Buyer to Seller indicating Buyer’s acceptance of the state of the title to the Property, as described in the Preliminary Report, or Buyer’s disapproval or conditional approval of specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Buyer Title Policy, describing in suitable detail the actions that Buyer reasonably believes are required to obtain Buyer’s unconditional approval of the state of the title to the Property.
1.1.61 Title Notice Response. The written response of Seller to the Title Notice, in which Seller either elects to: (a) cause the removal from the Preliminary Report of any matters disapproved or conditionally approved in the Title Notice; (b) obtain title or other insurance or endorsement in a form reasonably satisfactory to Buyer insuring against any matters disapproved or conditionally approved in the Title Notice; or (c) not take either action described in clause “(a)” or “(b)” of this Section 1.1.61.
1.1.62 Title Notice Waiver . A written notice from Buyer to Seller waiving Buyer’s previous disapproval or conditional approval in the Title Notice of specific matters shown Item: 6
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in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Buyer Title Policy.
1.1.63 Transfer. Regarding any property, right or obligation, any of the following, whether by operation of Law or otherwise, whether voluntary or involuntary and whether direct or indirect: (a) any assignment, conveyance, grant, hypothecation, mortgage, pledge, sale or other transfer, whether direct or indirect, of all or any part of such property, right or obligation, or of any legal, beneficial, or equitable interest or estate in such property, right or obligation or any part of it (including the grant of any easement, lien, or other encumbrance); (b) any conversion, exchange, issuance, modification, reallocation, sale or other transfer of any Equity Interest(s) in the owner of such property, right or obligation by the holders of such Equity Interest(s); or (c) any transaction that is in substance equivalent to any of the foregoing. A transaction affecting Equity Interests, as referred to in clauses “(b)” or “(c)” of this Section 1.1.63, shall be deemed a Transfer by Buyer, even though Buyer is n ot technically the transferor. A “Transfer” shall not, however, include any of the following (provided that the other Party has received Notice of such occurrence) relating to the Property or any Equity Interest: (i) a mere change in form of ownership, with no material change in beneficial ownership, that constitutes a tax-free transaction under, as applicable, Federal income tax law or State real estate transfer tax law; (ii) a conveyance only to member(s) of the immediate family(ies) of the transferor(s) or trusts for their benefit; (iii) a conveyance only to any Person that, as of the Effective Date, holds an Equity Interest in the entity whose Equity Interest is being transferred; or (iv) an assignment of Buyer’s rights under this Agreement to any Person in which Buyer owns a majority of the Equity Interests and where such Person assumes all obligations of Buyer under this Agreement.
1.1.64 Unavoidable Delay. A delay in either Party performing any obligation under this Agreement arising from or on account of any cause whatsoever beyond the Party’s reasonable control, including strikes, labor troubles or other union activities, casualty, war, acts of terrorism, riots, litigation, governmental action or inaction, regional natural disasters or inability to obtain required materials. Unavoidable Delay shall not include delay caused by a Party’s financial condition or insolvency.
1.1.65 Usury Limit. The highest rate of interest, if any, that Law allows under the circumstances.
2. EFFECTIVE DATE. This Agreement shall become effective on the first date on which all of the following have occurred: (“Effective Date”): (a) this Agreement has been approved by Seller’s City Council; (b) this Agreement has been signed by the authorized representative(s) of both Buyer and Seller; and (c ) one (1) original of this Agreement signed by the authorized representative(s) of Buyer has been delivered by Buyer to Seller. Buyer shall send Notice of the Effective Date to Seller within five (5) days following the occurrence of the Effective Date. Seller shall sign and return a copy of such Notice to Buyer within five (5) days after receipt of such Notice.
3. PURCHASE AND SALE OF PROPERTY
3.1 Escrow. Seller shall sell the Property to Buyer and Buyer shall purchase the Property from Seller, subject to the Permitted Exceptions and the terms and conditions of this Item: 6
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Agreement. For the purposes of exchanging funds and documents to complete the sale of the Property from Seller to Buyer and the purchase of the Property by Buyer from Seller, pursuant to the terms and conditions of this Agreement, Seller and Buyer agree to open th e Escrow with the Escrow Agent. The provisions of Section 4 are the joint escrow instructions of the Parties to the Escrow Agent for conducting the Escrow.
3.2 Payment of Purchase Price. Buyer shall purchase the Property from Seller for the Purchase Price, subject to the terms and conditions of this Agreement. Buyer shall pay the Purchase Price at the Close of Escrow in immediately available funds.
3.3 Buyer’s Approval of Title to Property.
3.3.1 Title Notice. Within one (1) day after the Escrow Opening Date, Buyer shall request the Preliminary Report from the Title Company and that the Title Company deliver a copy of such Preliminary Report to Seller. Within five (5) days following Buyer’s receipt of the Preliminary Report, Buyer shall send the Title Notice to both Seller and Escrow Agent.
3.3.2 Failure to Deliver Title Notice. If Buyer fails to send the Title Notice to Seller and Escrow Agent within the time period provided in Section 3.3.1, Buyer will be deemed to disapprove the status of title to the Property and refuse to accept conveyance of the Property and Buyer or Seller shall have the right to cancel the Escrow and terminate this Agreement upon five (5) days’ Notice, in their respective sole and absolute discretion.
3.3.3 Title Notice Response. Within five (5) days following Seller’s receipt of the Title Notice (if any), Seller may send the Title Notice Response t o both Buyer and Escrow Agent. If Seller does not send the Title Notice Response, if necessary, within the time period provided in this Section 3.3.3, Seller shall be deemed to elect not to take any action in reference to the Title Notice. If Seller elects in the Title Notice Response to take any action in reference to the Title Notice, Seller shall complete such action, prior to the Escrow Closing Date or as otherwise specified in the Title Notice Response.
3.3.4 Title Notice Waiver. If Seller elects or is deemed to have elected not to address one or more matters set forth in the Title Notice to Buyer’s reasonabl e satisfaction, then within five (5) days after the earlier of: (a) Buyer’s receipt of Seller’s Title Notice Response; or (b) the last date for Seller to deliver its Title Notice Response pursuant to Section 3.3.3, Buyer shall either: (i) refuse to accept the title to and conveyance of the Property, or (ii) waive Buyer’s disapproval or conditional approval of all such matters set forth in the Title Notice by sending the Title Notice Waiver to both Seller and Escrow Agent. Failure by Buyer to timely send the Title Notice Waiver, where the Title Notice Response or Seller’s failure to deliver the Title Notice Response results in Seller’s election not to address one or more matters set forth in the Title Notice to Buyer’s reasonable satisfaction, will be deemed Buyer’s continued refusal to accept the title to and conveyance of the Property, in which case either Buyer or Seller shall have the right, in their respective sole and absolute discretion, to cancel the Escrow and terminate this Agreement upon five (5) days’ Notice to the other Party and Escrow Agent. In such event, the parties shall have no further obligation to each other except for those obligations that specifically survive the termination of this Agreement.
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3.3.5 Disapproval of Encumbrances Securing Seller Obligations .
Notwithstanding any other provision of this Agreement, Buyer disapproves any and all encumbrances against the Property securing monetary (other than non -delinquent property taxes) obligations of Seller.
3.3.6 No Termination Liability . Any termination of this Agreement or cancellation of the Escrow pursuant to this Section 3.3 shall be without liability to the other Party or any other Person. Termination shall be accomplished by delivery of a Notice of termination to both the other Party and the Escrow Agent at least five (5) days prior to the termination date.
Following issuance of a Notice of termination of this Agreement pursuant to a right provided under this Agreement, the Parties and the Escrow Agent shall proceed pursuant to Section 4.12. Once a Notice of termination is given pursuant to this Section 3.3, delivery of a Title Notice or Title Notice Waiver shall have no force or effect and this Agreement shall terminate in accordance with the Notice of termination.
3.4 Due Diligence Investigations.
3.4.1 Time and Expense . Buyer shall complete all Due Diligence Investigations within the Due Diligence Period and shall conduct all Due Diligence Investigations at Buyer’s sole cost and expense.
3.4.2 Right to Enter . As of the Effective Date, Seller licenses, permits and authorizes Buyer to enter the Property for the purpose of conducting Due Diligence Investigations.
The license given by Seller in this Section 3.4 to conduct Due Diligence Investigations shall terminate with the termination of this Agreement. Any Due Diligence Investigations by Buyer shall not unreasonably disrupt any then -existing use or occupancy of the Property. Buyer’s exercise of the license provided pursuant to this Section 3.4 after expiration of the Due Diligence Period shall not extend the Due Diligence Period. Seller shall c ooperate with Buyer in its Due Diligence Investigations and provide access to the Property, its records, or provide information to Buyer as requested so long as it is within Seller’s possession.
3.4.3 Due Diligence Completion Notice ; “ AS-IS” Condition. Buyer shall deliver a Due Diligence Completion Notice to Seller prior to the end of the Due Diligence Period.
If Buyer does not unconditionally accept the condition of the Property by delivery of its Due Diligence Completion Notice indicating such acceptance, prior to the end of the Due Diligence Period, Buyer shall be deemed to have rejected the condition of the Property and refused to accept conveyance of title to the Property. If the condition of the Property is rejected or deemed rejected by Buyer, then either Seller or Buyer shall have the right to cancel the Escrow and terminate this Agreement, in their respective sole and absolute discretion, without liability to the other Party or any other Person, by delivery of a Notice of termination to the other Party and Escrow Agent, in which case the Parties and Escrow Agent shall proceed pursuant to Section 4.12. Buyer’s delivery of its Due Diligence Completion Notice indicating Buyer’s unconditional acceptance of the condition of the Property shall evidence the acceptance of the condition of the Property by Buyer in its existing “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition, as of the last day of the Due Diligence Period. In its sole discretion, Buyer may accept the Property in its “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition at any time before the end of the Due Diligence Period.
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3.5 Seller Covenants Regarding Maintenance of the Property . Seller covenants and agrees with the Buyer that between the Effective Date and the date of the Close of Escrow:
3.5.1 No Changes to Agreements. Seller shall not modify or amend any lease or any service contract or other agreement respecting the Property, or enter into any new lease or contract respecting the Property, without the Buyer's prior written approval;
3.5.2 No Title Exceptions . Seller shall not cause, permit, allow or suffer any additional exception to the title of the Property.
3.6 Seller Representations and Warranties.
3.6.1 Condemnation. To Seller’s knowledge, Seller has not received written notice of, and is not aware of, any condemnation, eminent domain or similar action with respect to the Property.
3.6.2 Agreements. Except as disclosed in the Preliminary Report or disclosed or provided for in this Agreement, Seller has not entered into, and Seller is not aware of, any agreements that will be binding against the Property after the Close of Escrow. Notwithstanding the foregoing, the Property is currently occupied by Priscilla Verduzo, a tenant in good standing residing in the Property pursuant to a lease agreement (“ Tenant”). Tenant’s lease will remain in effect following the Close of Escrow; consummation of the transaction contemplated hereby will not, in and of itself, terminate Tenant’s lease.
3.6.3 Health & Safety Code Disclosures . To the best of Seller’s knowledge, which is based on Buyer’s representations and warranties in that certain Real Property Purchase and Sale Agreement and Joint Escrow Instructions dated [ insert], 2024, between the Parties: ( 1) the Property contains an operable smoke alarm in accordance with California Health and Safety Code section 13113.8; and (2) the Property’s water heater is braced, anchored, and/or strapped in accordance with California Health and Safety Code section 19211.
3.7 Title to the Property. Seller has good and marketable title to the Property, subject to the Conditions of Title.
4. JOINT ESCROW INSTRUCTIONS
4.1 Opening of Escrow; Escrow Instructions . The purchase and sale of the Property shall take place through the Escrow to be administered by Escrow Agent. Buyer shall cause the Escrow to be opened promptly following the Effective Date. Escrow Agent shall promptly confirm the Escrow Opening Date in writing to each of the Parties.
4.2 Escrow Instructions. This Section 4 constitutes the joint escrow instructions of the Parties to Escrow Agent for conduct of the Escrow for the purchase and sale of the Property, as contemplated by this Agreement. Buyer and Seller shall sign such further escrow instructions consistent with the provisions of this Agreement as may be reasonably requested by Escrow Agent.
In the event of any conflict between the provisions of this Agreement and any further escrow instructions requested by Escrow Agent, the provisions of this Agreement shall control.
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4.3 Escrow Agent Authority. Seller and Buyer authorize Escrow Agent to:
4.3.1 Charges. Pay and charge Seller and Buyer for their respective shares of the applicable fees, taxes, charges and costs payable by either Seller or Buyer regarding the Escrow;
4.3.2 Settlement/Closing Statements . Release each Party’s Escrow Closing Statement to such Party;
4.3.3 Document Recording . File any documents delivered for recording through the Escrow with the office of the Recorder of the County for recordation in the official records of the County, pursuant to the joint instructions of the Parties; and
4.3.4 Counterpart Documents. Utilize documents signed by Seller or Buyer in counterparts, including attaching separate signature pages to one original of the same document.
4.4 Buyer’s Conditions Precedent to Close of Escrow. Provided that the failure of any such condition to be satisfied is not due to a Default under this Agreement by Buyer, Buyer’s obligation to purchase the Property from Seller on the Escrow Closing Date shall be conditioned upon the satisfaction or waiver ( waivers must be in writing and signed by Buyer) of each of the following conditions precedent to such purchase on or before the Escrow Closing Date:
4.4.1 Title Policy. Title Company is committed to issue the Buyer Title Policy to Buyer upon payment of Title Company’s premium for such policy;
4.4.2 Due Diligence . Buyer timely delivers its Due Diligence Completion Notice to Seller stating Buyer’s unconditional acceptance of the condition of the Property, in accordance with Section 3.4.
4.4.3 Seller Escrow Deposits . Seller deposits all of the items into Escrow required by Section 4.7;
4.4.4 Settlement/Closing Statement . Buyer reasonably approves Buyer’s Escrow Closing Statement; and
4.4.5 Seller Pre -Closing Obligations . Seller performs all of the material obligations required to be performed by Seller pursuant to this Agreement prior to the Close of Escrow.
4.5 Seller’s Conditions Precedent to Close of Escrow . Provided that the failure of any such condition to be satisfied is not due to a Default under this Agreement by Seller, Seller’s obligation to sell the Property to Buyer on the Escrow Closing Date shall be conditioned upon the satisfaction or waiver (waivers must be in writing and signed by Seller) of each of the following conditions precedent to such sale on or before the Escrow Closing Date:
4.5.1 Title. Buyer accepts the state of the title of the Property, in accordance with Section 3.3.
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4.5.2 Due Diligence . Buyer timely delivers its Due Diligence Completion Notice to Seller stating Buyer’s unconditional acceptance of the condition of the Property, in accordance with Section 3.4.
4.5.3 Buyer Escrow Deposits . Buyer deposits all of the items into Escrow required by Section 4.6;
4.5.4 Settlement/Closing Statement . Seller reasonably approves Seller’s Escrow Closing Statement; and
4.5.5 Buyer Pre -Closing Obligations . Buyer performs all of the material obligations required to be performed by Buyer pursuant to this Agreement prior to Close of Escrow.
4.5.6 Approvals. All approvals from the Home Owner’s Association have been obtained, if any are required.
4.5.7 HCD. Either of the following have occurred: (i) Seller has received HCD’s approval of its SLA exemption determination for the Property; or (ii) at least thirty (30) calendar days have elapsed since Seller submitted its SLA exemption determination to HCD.
4.6 Buyer’s Escrow Deposits. Buyer shall deposit the following items into Escrow and, concurrently, provide a copy of each document submitted into Escrow to Seller, on or before the Escrow Closing Date:
4.6.1 Closing Funds . All monetary amounts required to be deposited into Escrow by Buyer under the terms of this Agreement to close the Escrow, all in immediately available funds;
4.6.2 Regulatory Agreement. The original Regulatory Agreement executed by the authorized representative(s) of Buyer in recordable form, to be recorded against the Property at the Close of Escrow.
4.6.3 Escrow Closing Statement . The Buyer’s Escrow Closing Statement signed by the authorized representative(s) of Buyer;
4.6.4 Other Reasonable Items. Any other money or documents required to be delivered by Buyer under the terms of this Agreement or as otherwise reasonably requested by Escrow Agent or Title Company in order to close the Escrow or comply with applicable Law that have not previously been delivered by Buyer.
4.7 Seller’s Escrow Deposits. Seller shall deposit the following items into Escrow and, concurrently, provide a copy of each document (excluding the Seller Deed) deposited into Escrow to Buyer, at least one (1) business day prior to the Escrow Closing Date:
4.7.1 Seller Deed. The Seller Deed signed by the authorized representative(s) of Seller in recordable form;
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4.7.2 Escrow Closing Statement. Seller’s Escrow Closing Statement signed by the authorized representative(s) of Seller;
4.7.3 Regulatory Agreement . The Regulatory Agreement signed by the authorized representative(s) of Seller in recordable form, which shall be recorded against the Property at the Close of Escrow.
4.7.4 FIRPTA Affidavit . A FIRPTA affidavit signed by the authorized representative(s) of Seller, in the form used by the Escrow Agent;
4.7.5 Form 593 . A Form 593 signed by the authorized representative(s) of Seller; and
4.7.6 Estoppel Certificates . The originals (or copies if originals are unavailable) of the contracts Buyer has elected to assume, if any, including but not limited to estoppel certificates from the current tenants residing on the Property in a form and substance satisfactory to Buyer.
4.7.7 Other Reasonable Items. Any other money or documents required to be delivered by Seller under the terms of this Agreement or as otherwise reasonably requested by Escrow Agent or Title Company in order to close the Escrow or comply with applicable Law that have not been previously delivered by Seller.
4.8 Closing Procedure. Upon Escrow Agent’s receipt of written confirmation from both Buyer and Seller that each of their respective conditions precedent to the Close of Escrow are satisfied or waived, Escrow Agent shall close the Escrow by doing all of the following:
4.8.1 Recording and Distribution of Documents . Escrow Agent shall cause the following documents to be filed with the Recorder of the County for recording in the official records of the County regarding the Property in the following order of priority at Close of Escrow:
(a) the Seller Deed; (b) the Regulatory Agreement; and (c ) any other documents to be recorded regarding the Property through the Escrow upon the join t instructions of the Parties. At Close of Escrow, Escrow Agent shall deliver conformed copies of all documents filed with the Recorder of the County for recording in the official records of the County through the Escrow to Seller, Buyer and any other Person designated in the written joint escrow instructions of the Parties to receive an original or conformed copy of each such document. Each conformed copy of a document filed for recording shall show all recording information. The Parties intend and agree that this Section
4.8.1 shall establish the relative priorities of the documents to be recorded in the official records of the County through the Escrow, by providing for recordation of senior interests prior to junior interests, in the order provided in this Section 4.8.1;
4.8.2 Funds. Distribute all funds held by the Escrow Agent pursuant to the Escrow Closing Statements approved in writing by Seller and Buyer.
4.8.3 FIRPTA Affidavit . File the FIRPTA Affidavit with the United States Internal Revenue Service;
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4.8.4 Form 593. File the Form 593 with the California Franchise Tax Board; and
4.8.5 Title Policy . Obtain from the Title Company and deliver to Buyer the Buyer Title Policy issued by the Title Company.
4.9 Close of Escrow. The Close of Escrow shall occur on or before the Escrow Closing Date. The Parties may mutually agree in writing to change the Escrow Closing Date by joint written instruction to Escrow Agent. The City Manager is authorized to agree to one or more extensions of the Escrow Closing Date on behalf of Seller up to a maximum time period extension of six (6) months in the aggregate, in the City Manager’s sole and absolute discretion. If for any reason (other than a Default or Event of Default by such Party) the Close of Escrow has not occurred on or before the Escrow Closing Date, then any Party not then in Default under this Agreement may cancel the Escrow and terminate this Agreement, with out liability to the other Party or any other Person for such cancellation and termination, by delivering Notice of termination to both the other Party and Escrow Agent. Following any such Notice of termination of this Agreement and cancellation of the Escrow, the Parties and Escrow Agent shall proceed pursuant to Section 4.12. Without limiting the right of either Party to cancel the Escrow and terminate this Agreement, pursuant to this Section 4.9, if the Escrow does not close on or before the Escrow Closing Date and neither Party has exercised its contractual right to cancel the Escrow and terminate this Agreement under this Section 4.9 before the first date on which Escrow Agent Notifies both Parties that Escrow is in a position to close in accordance with the terms and conditions of this Agreement, then the Escrow shall close as soon as reasonably possible following the first date on which Escrow Agent Notifies both Parties that Escrow is in a position to close in accordance with the terms and conditions of this Agreement.
4.10 Cost Allocations . The following costs and expenses will be paid as follows in connection with the Closing:
(i) Buyer shall pay all sales and use taxes, recording fees for the Deed and related expenses;
(ii) Buyer shall pay the premium costs and expenses for a standard or extended ALTA coverage owner’s policy of title insurance;
(iii) Seller and Buyer shall each pay one-half (1/2) of the Escrow fees; (iv) Seller and Buyer shall each pay one-half (1/2) of any and all city and/or county documentary and other transfer taxes due; and
(v) all other costs of escrow, if any, shall be paid equally by Buyer and Seller.
4.10.1 Seller shall pay real property taxes at the Close of Escrow based on the most current real property tax bill available, including any additional property taxes that may be assessed after the Close of Escrow, regardless of when notice of those taxes is rece ived or who receives the notice. Seller may seek reimbursement from the Orange County Tax Assessor’s office for any property taxes that have been assessed for a period after the Close of Escrow as Buyer is a public agency exempt from payment of such taxes. Buyer further agrees to cooperate with Seller Item: 6
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to provide any necessary information to the Assessor’s office in connection with such request for refund.
4.10.2 All utility charges shall be pr orated as of the Closing Date. All utility security deposits, if any, shall be retained by Seller. All water, electric, telephone, fuel and other utility charges based on the last ascertainable bill unless meter readings are made as of the Closing Date, in which case such meter readings shall govern, subject to readjustment as provided below upon transfer of the service to the Buyer. If the apportio nment is not based on an actual current reading upon the date of transfer, then upon the taking of a subsequent actual reading, the Parties shall, within five (5) business days following notice of the determination of such actual reading, readjust such apportionment and Seller shall deliver to Buyer or Buyer shall deliver to Seller, as the case may be, the amount determined to be due upon such readjustment.
4.10.3 All other charges, fees and taxes levied by each and every Government relative to the conveyance of the Property through the Escrow shall be paid by the applicable Party, as customary in the County.
4.11 Escrow Cancellation Charges. If the Escrow fails to close due to Seller’s Default under this Agreement, Seller shall pay all ordinary and reasonable Escrow and title order cancellation charges charged by Escrow Agent or Title Company , respectively, if any. If the Escrow fails to close due to Buyer’s Default under this Agreement, Buyer shall pay all ordinary and reasonable Escrow and title order cancellation charges charged by Escrow Agent or Title Company, respectively, if any. If the Escrow fails to close for any reason other than the Default of either Buyer or Seller, Buyer and Seller shall each pay one -half (1/2) of any ordinary and reasonable Escrow and title order cancellation charges charged by Escrow Agent or Title Company, respectively, if any.
4.12 Escrow Cancellation. If this Agreement is terminated pursuant to a contractual right granted to a Party in this Agreement to terminate this Agreement (other than due to an Event of Default by the other Party), the Parties shall do all of the following:
4.12.1 Cancellation Instructions. The Parties shall, within seven (7) Business Days following Escrow Agent’s written request, sign any reasonable Escrow cancellation instructions requested by Escrow Agent;
4.12.2 Return of Funds and Documents . Within seven (7) Business Days following receipt by the Parties of a settlement statement of Escrow and title order cancellation charges from Escrow Agent (if any) or within seven (7) Business days following Notice of termination, whichever is earlier: (a) Buyer or Escrow Agent shall return to Seller all documents previously delivered by Seller to Buyer or Escrow Agent, respectively, regarding the Escrow; (b) Seller or Escrow Agent shall return to Buyer all documents previously delivered by Buyer to Seller or Escrow Agent, respectively, regarding the Escrow; (c) Escrow Agent shall, unless otherwise provided in this Agreement, return to Buyer all funds deposited in Escrow by Buyer, less Buyer’s share of customary and reasonable Escrow and title order cancellation charges (if any) in accordance with Section 4.11; and (d) Escrow Agent shall, unless otherwise provided in this Agreement, return to Seller all funds deposited in Escrow by Seller, less Seller’s share of Item: 6
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customary and reasonable Escrow and title order cancellation charges (if any) in accordance with Section 4.11.
4.13 Report to IRS. After the Close of Escrow and prior to the last date on which such report is required to be filed with the Internal Revenue Service under applicable Federal law, if such report is required pursuant to Internal Revenue Code Section 6045(e), Escrow Agent sha ll report the gross proceeds of the purchase and sale of the Property to the Internal Revenue Service on Form 1099-B, W-9 or such other form(s) as may be specified by the Internal Revenue Service pursuant to Internal Revenue Code Section 6045(e). Concurrently with the filing of such reporting form with Internal Revenue Service, Escrow Agent shall deliver a copy of the filed form to both Seller and Buyer.
5. REMEDIES
5.1 Buyer’s Termination. This Agreement shall automatically terminate without further notice or action by Buyer upon the occurrence of any of the following events, provided that Buyer is not then in material breach of this Agreement: (a) any condition to Closing contained in Section
4.4 (Buyer’s Conditions Precedent to Close of Escrow) has not been satisfied or waived by Buyer by the Closing Date; or (b) Buyer having exercised its right to terminate this Agreement pursuant to Section 3.4 (Buyer’s Approval of Title to Property) . In such event, the parties shall have no further obligation to each other except for those obligations that specifically survive the termination of this Agreement.
5.2 Seller’s Termination . Provided that Seller is not then in material breach of this Agreement, this Agreement shall automatically terminate without further notice or action by Seller if any condition to Closing contained in Section 4.5 (Seller’s Conditions Precedent to Close of Escrow) has not been satisfied or waive d by Seller by the Closing Date; or (b) Seller having exercised its right to terminate this Agreement pursuant to Section 3.4 (Buyer’s Approval of Title to Property). In such event, the parties sh all have no further obligation to each other except for those obligations that specifically survive the termination of this Agreement.
5.3 Legal Actions. Either Party may institute legal action, at law or in equity, to enforce or interpret the rights or obligations of the Parties under this Agreement or recover damages, subject to the provisions of this Agreement, as applicable.
5.4 Buyer Indemnification of Seller. Buyer shall Indemnify Seller Parties against any Claim to the extent that such Claim arises from any of the following: (a) any wrongful intentional act or negligence of Buyer’s Parties relating to the Property or this Agreement; (b) reserved; (c) any worker’s compensation claim or determination relating to any employee of Buyer’s Parties or their contractors; and (d) any breach of Buyer’s representations and warranties set forth in Section
3.6. Such obligation to Indemnify shall include all Legal Costs, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action.
5.5 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties set forth in this Agreement are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise Item: 6
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by such Party, at the same or different times, of any other rights or remedies for the same Default or the same rights or remedies for any other Default by the other Party.
6. GENERAL PROVISIONS
6.1 Incorporation of Recitals. The Recitals of fact set forth preceding this Agreement are true and correct and are incorporated into this Agreement in their entirety by this reference.
6.2 Notices, Demands and Communications Between the Parties.
6.2.1 Delivery. Any and all Notices submitted by any Party to another Party pursuant to or as required by this Agreement shall be proper, if in writing and sent by messenger for immediate personal delivery, nationally recognized overnight (one Business Day) delivery service (i.e., United Parcel Service, Federal Express, etc.) or by registered or certified United States mail, postage prepaid, return receipt requested, to the address of the recipient Party, as designated in Section 6.2.2. Notices may be sent in the same manner to such other addresses as either Party may from time to time designate by Notice in accordance with this Section 6.2. Notice shall be deemed received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that the Notice is sent by messenger for immediate personal delivery, one Business Day after delivery to a nationally recognized overnight delivery service or three (3) calendar days after the Notice is placed in the United States mail in accordance with this Section 6.2. Any attorney representing a Party may give any Notice on behalf of such Party.
6.2.2 Addresses. The Notice addresses for the Parties, as of the Effective Date, are as follows:
To Buyer:
7 Whatney Ste B,
Irvine, California 92618
Attention: LaVal Brewer
Email: [email protected]
With Copy to: Sheppard, Mullin, Richter & Hampton LLP
650 Town Center Drive, 10th Floor
Costa Mesa, CA 92626-1993
Attention: Aaron Sobaski
Email: [email protected]
To Seller:
City of Lake Forest
100 Civic Center Dr.
Lake Forest, CA 92630
Attention: City Manager
(T) (949) 461-3400
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With a Copy to:
Best Best Krieger, LLP
18101 Von Karman Ave., Suite 1000
Irvine, CA 92612
Attention: Elizabeth W. Hull
(T) (949) 263-2608
[email protected]
6.3 Relationship of Parties. The Parties each intend and agree that Seller and Buyer are independent contracting entities and do not intend by this Agreement to create any partnership, joint venture or similar business arrangement, relationship or association between them.
6.4 Non-liability of Seller Officials and Employees. No elected official or employee of Seller shall be personally liable to Buyer, or any successor in interest to Buyer, in the event of any Default by Seller under this Agreement or for any amount that may become due to Buyer or to Buyer’s successor, or on any obligations under the terms of this Agreement, except to the extent resulting from the negligence or willful misconduct of such elected official or employee.
6.5 Calculation of Time Periods . Unless otherwise specified, all references to time periods in this Agreement measured in days shall be to consecutive calendar days, all references to time periods in this Agreement measured in months shall be to consecutive calendar months and all references to time periods in this Agreement measured in years shall be to consecutive calendar years. Any reference to Business Days in this Agreement shall mean consecutive Business Days.
6.6 Principles of Interpretation. No inference in favor of or against any Party shall be drawn from the fact that such Party has drafted any part of this Agreement. The Parties have both participated substantially in the negotiation, drafting and revision of this Agreement, with advice from legal and other counsel and advisers of their own selection. Any word, term or phrase defined in the singular in this Agreement may be used in the plural, and vice versa, all in accordance with ordinary principles of English grammar, which shall govern a ll language in this Agreement. The words “include” and “including” in this Agreement shall be construed to be followed by the words:
“without limitation.” Each collective noun in this Agreement shall be interpreted as if followed by the words “(or any part of it),” except where the context clearly requires otherwise. Every reference to a document, including this Agreement, refers to such document, as modified from time to time (excepting any modification that violates this Ag reement), and includes all exhibits, schedules, addenda and riders to such document. The word “or” in this Agreement includes the word “and.” Every reference to a law, statute, regulation, order, form or similar governmental requirement refers to each such requirement as amended, modified, renumbered, superseded or succeeded, from time to time.
6.7 Governing Law. The procedural and substantive laws of the State shall govern the interpretation and enforcement of this Agreement, without application of conflicts of laws , principles, or statutes. The Parties acknowledge and agree that this Agreement is entered into, is to be fully performed in and relates to real property located in the County. All legal actions arising from this Agreement shall be filed in the Superior Court of the State in and for the County or in the United States District Court with jurisdiction in the County.
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6.8 Unavoidable Delay; Extension of Time of Performance.
6.8.1 Notice. Performance by either Party under this Agreement shall not be deemed or considered to be in Default, where any such Default is due to the occur rence of an Unavoidable Delay. Any Party claiming an Unavoidable Delay shall Notify the other Party: (a) within twenty (20) days after such Party knows of any such Unavoidable Delay; and (b) within twenty (20) days after such Unav oidable Delay ceases to exist. The extension of time for performance under this Agreement resulting from the occurrence of an Unavo idable Delay shall commence on the date of occurrence of the conditio n causing the Unavoidable Delay . Notice of an Unavoidable Delay must describe the Unavoidab le Delay in reasonable detail. The Party claiming an extension of time to perform due to an Unavoidable Delay shall exercise reasonable efforts to cure the condition causing the Unavoidable Delay, within a reasonable time.
6.8.2 Assumption of Economic Risks . EACH PARTY EXPRESSLY
AGREES THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, OF EITHER PARTY
SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN MARKET
CONDITIONS OR DEMAND OR CHANGES IN THE ECONOMIC ASSUMPTIONS OF
EITHER PARTY THAT MAY HAVE PROVIDED A BASIS FOR ENTERING INTO THIS
AGREEMENT SHALL NOT OPERATE TO EXCUSE OR DELAY THE PERFORMANCE OF EACH AND EVERY ONE OF EACH PARTY’S OBLIGATIONS AND COVENANTS ARISING UNDER THIS AGREEMENT. ANYTHING IN THIS AGREEMENT TO THE
CONTRARY NOTWITHSTANDING, THE PARTIES EXPRESSLY ASSUME THE RISK OF
UNFORESEEABLE CHANGES IN ECONOMIC CIRCUMSTANCES OR MARKET
DEMAND OR CONDITIONS AND WAIVE, TO THE GREATEST EXTENT ALLOWED BY
LAW, ANY DEFENSE, CLAIM, OR CAUSE OF ACTION BASED IN WHOLE OR IN PART
ON ECON OMIC NECESSITY, IMPRACTICABILITY, CHANGED ECONOMIC CIRCUMSTANCES, FRUSTRATION OF PURPOSE, OR SIMILAR THEORIES. THE
PARTIES AGREE THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, EITHER OF
THE PARTY SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN
MARKET CONDITIONS OR DEMANDS, SHALL NOT OPERATE TO EXCUSE OR DELAY
THE STRICT OBSERVANCE OF EACH AND EVERY ONE OF THE OBLIGATIONS, COVENANTS, CONDITIONS AND R EQUIREMENTS OF THIS AGREEMENT. THE
PARTIES EXPRESSLY ASSUME THE RISK OF SUCH ADVERSE ECONOMIC OR
MARKET CHANGES, WHETHER OR NOT FORESEEABLE AS OF THE EFFECTIVE DATE.
_____________________
Initials of Authorized
Seller Representative(s)
___________________
Initials of Authorized
Buyer Representative(s)
6.9 Entire Agreement . This Agreement and the Exhibits hereto contain the entire agreement and understanding between Buyer and Seller concerning the subject matter of this Agreement and supersede all prior agreements, including any previous letter of intent or terms, understandings, conditions, representations and warranties, whether written or oral, made by Buyer or Seller concerning the Property or the other matters which are the subject of this Agreement.
6.10 Amendments and Waivers. No addition to or modification of this Agreement shall be effective unless set forth in writing and signed by the party against whom the addition or Item: 6
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modification is sought to be enforced. The party benefited by any condition or obligation may waive the same, but such waiver shall not be enforceable by another party unless made in writing and signed by the waiving party.
6.11 Invalidity of Provision. If any provision of this Agreement as applied to either party or to any circumstance shall be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the same shall in no way affect (to the maximum extent permissible by law) any other provision of this Agreement, the application of any such provision under circumstances different from those adjudicated by the court, or the validity or enforceability of this Agreement as a whole.
6.12 References. Unless otherwise indicated, all Section and Exhibit references are to the sections and exhibits of this Agreement. All the Exhibits attached hereto are incorpor ated herein by this reference. Whenever under the terms of this Agreement the time for performance of a covenant or condition falls upon a Saturday, Sunday or State holiday, such time for performance shall be extended to the next business day. The headings used in this Agreement are provided for convenience only and this Agreement shall be interpreted without reference to any headings. The masculine, feminine or neuter gender and the singular or plural number shall be deemed to include the others whenever the context so indicates or requires.
6.13 Confidentiality and Publicity. Seller is a public entity and as such, this Agreement, upon its presentation for approval at Seller’s City Council at a duly called and agendized public meeting, shall be subject to the Public Records Act and the Freedom of Information Act. No press release or other public disclosure may be made by Buyer or any of its agents regarding Seller’s intent for this Property this transaction without the prior consent of Seller.
6.14 Time. Time is of the essence in the performance of the parties’ respective obligations under this Agreement.
6.15 Attorneys’ Fees. In the event of any legal or equitable proceeding to enforce any of the terms or conditions of this Agreement, or any alleged disputes, breaches, defaults or misrepresentations in connection with any provision of this Agreement, the prevailing party in such proceeding shall be entitled to recover its reasonable costs and expenses, including, without limitation, reasonable attorneys’ fees and costs of defense paid or incurred in good faith.
6.16 Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Neither Seller nor Buyer shall have the right to assign all or any portion of its interest in this Agreement except to an entity that is controlling, controlled by or under common control with Buyer or Seller.
6.17 Further Assurances. The parties shall deliver such additional documents or take such additional actions consistent with this Agreement, as may be necessary or desirable for conveyance of the Property in accordance with this Agreement.
6.18 No Third Party Beneficiaries . Nothing in this Agreement, express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any person other than the parties to it and their respective permitted successors and assigns, nor is anything in this Item: 6
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Agreement intended to relieve or discharge any obligation of any third person to any party hereto or give any third person any right of subrogation or action over against any party to this Agreement.
6.19 Counterparts/Facsimile/PDF Signatures . This Agreement may be executed in counterparts and when so executed by the parties, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument that shall be binding upon the parties, notwithstanding th at the parties may not be signatories to the same counterpart or counterparts. The parties may integrate their respective counterparts by attaching the signature pages of each separate counte rpart to a single counter part. In order to expedite the transaction contemplated herein, facsimile or .pdf signatures may be used in place of original signatures on this Agreement. Seller and Buyer intend to be bound by the signatures on the facsimile or .pdf document, are aware that the other party will rely on the facsimile or .pdf signatures, and hereby waive any defenses to the enforcement of the terms of this Agreement based on the form of signature.
6.20 Remedies Cumulative. The remedies set forth in this Agreement are cumulative and not exclusive to any other legal or equitable remedy available to a party. [Signatures on following page]
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SIGNATURE PAGE
TO
REAL PROPERTY PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date:
SELLER:
City of Lake Forest, a municipal corporation
By
Its
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
By:
City Attorney
BUYER:
South County Outreach, a California non-profit
public benefit corporation
By
[insert]
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Acceptance by Escrow Holder
Escrow Holder acknowledges receipt of the foregoing Agreement and accepts the instructions contained therein. The Escrow Opening Date is [insert], 2024.
Dated: [insert], 2024 Chicago Title Company
By:
Name:
Title:
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A-1
EXHIBIT A
Property Legal Description
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EXHIBIT B
Transferor’s Certification of Non-Foreign Status
Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”), provides that a transferee of a U.S. real property interest must withhold tax if the t ransferor is a foreign person. To inform the South County Outreach , a California corporation (the “Transferee”), that withholding of tax under Section 1445 of the Code will not be required upon the transfer of a U.S. real property interest to the Transferee by the City of Lake Forest, a California municipal corporation (the “Transferor”), the under signed hereby certifies the following on behalf of the Transferor:
1. The Transferor is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Code and the Income Tax Regulations promulgated thereunder);
2. The Transferor’s U.S. employer identification number is _______________; and
3. The Transferor’s office address is ______________________________________.
The Transferor understands that this Certificate may be disclosed to the Internal Revenue Service by the Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.
Under penalty of perjury I declare that I have examined this Certification and, to the best of my knowledge and belief, it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of the Transferor.
DATED: ________________, 2024.
By: ______________________________________
Name:____________________________________
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EXHIBIT C
Regulatory Agreement and Declaration of Restrictive Covenants
[Attached Behind This Page]
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REGULATORY AGREEMENT
AND DECLARATION OF RESTRICTIVE COVENANTS
(20702 El Toro Road, #35)
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Lake Forest
100 Civic Center Drive
Lake Forest, CA 92630
Attn: City Manager
This document is exempt from the
payment of a recording fee pursuant to
Government Code Section 27383
REGULATORY AGREEMENT AND DECLARATION
OF RESTRICTIVE COVENANTS
(20702 El Toro Road, #35)
This Regulatory Agreement and Declaration of Restrictive Covenants (“ Agreement”) is made and entered into as of [ insert], 2024 (“Effective Date”), by and between the City of Lake Forest, a California municipal corporation (“City”), and South County Outreach, a non -profit corporation (“SCO”).
RECITALS
A. These Recitals refer to and utilize certain capitalized terms that are defined in Section 1 of this Agreement. The Parties intend to refer to those definitions in connection with the use of capitalized terms in these Recitals.
B. City and SCO are parties to that certain Purchase and Sale Agreement, under which City conveyed the Property to SCO in exchange for SCO’s payment of the Purchase Price and agreement to operate the Property as affordable housing.
C. To ensure that the Property will be used and operated in accordance with all applicable conditions and restrictions, City and SCO wish to enter into this Agreement.
D. The transaction contemplated hereby and in the Purchase and Sale Agreement is exempt from the voter approval requirement of Section 1 of Article 34 of the California Constitution pursuant to California Health and Safety Code section 37001.5(a). City’s ownership of the Property was a temporary measure to protect its security and City, at all relevant times, intended to promptly change ownership to another party (i.e., SCO) so that City would not continue to be the owner of a low-rent housing project (i.e., the Property).
THEREFORE, City and SCO hereby agree as follows:
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1. Definitions. When used in this Agreement, the following terms shall have the respective meanings assigned to them in this Section 1.
a. Affordable Rent . Gross monthly rent for the Property, as defined in California Health and Safety Code Section 50053(b) and accompanying regulations of the California Department of Housing and Community Development , which includes a reasonable utility allowance. For Very-low Income Households, Affordable Rent is not more than 30% times 50% of the area median income adjusted for family size appropriate for the Property.
b. Agreement. Th is Regulatory Agreement and Declaration of Restrictive Covenants (20702 El Toro Road, #35).
c. City. The City of Lake Forest, a California municipal corporation.
d. Parties. Collectively, City and SCO.
e. Party. Individually, either City or SCO, as applicable.
f. Property. That certain real property specifically described in Exhibit A attached hereto and incorporated herein by this reference.
g. Purchase Price . Has the meaning set forth in the Purchase and Sale Agreement.
h. Purchase and Sale Agreemen t. The Real Property Purchase and Sale Agreement and Joint Escrow Instructions (Property at 20702 El Toro Road #35, Lake Forest, CA, APN:938-74-179) dated [ insert], 2024 conveying the Property from City (as seller) to SCO (as buyer). The Purchase and Sale Agreement is incorporated herein by this reference.
i. Qualifying Household . A household that: (1) intends to reside in the Property; and (2) whose income does not exceed the maximum income allowable for a Very-low Income Household.
j. Term. At least thirty (30) years during which SCO shall ensure that the Property is leased to a Qualifying Household at an Affordable Rent as set forth herein.
k. Very Low Income Household . A household whose gross income does not exceed 50% of the median gross yearly income for Orange County, California, adjusted for household size as published by the State of California’s Department of Hou sing and Community Development or as otherwise defined by California Health and Safety Code Section 50105.
2. Agreement to Record. SCO agrees that this Agreement shall be recorded against the Property in the official records of the County of Orange, California.
3. Reservation of Property for Affordable Rental Housing . SCO covenants and agrees to reserve and restrict the Property for the use and residential occupancy of those who, at Item: 6
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the time of initial occupancy and continuously thereafter (subject to the other provisions of this Agreement), and until the end of the Term, are members of a Qualifying Household. SCO will not knowingly permit the Property to be used on a transient basis and will not lease or rent the Property for a period of less than twelve (12) months. The Property will not, at any time, be leased or rented for use as a hotel, motel, time share, dormitory, fraternity house, sorority house, rooming house, hospital, nursing home, sanitary or rest home.
4. Affordable Rent. The monthly rent charged to a Qualifying Household for the occupancy of the Property may never exceed an Affordable Rent in accordance with this Agreement.
a. Rent Increases. Rent for Property may be increased only once in any twelve (12) month period, based on changes in area median income or changes in the income level of the Qualifying Household occupying the Property; provided that the rent shall never exceed an Affordable Rent for the Qualifying Household occupying the Property. All rent increases must be provided to the Qualifying Households in writing.
b. Determination of Household Income . Determination of the Qualifying Household’s income shall be made by SCO at the time of initial application by an individual or family for occupancy of the Property. At the time of initial application, SCO shall require an applicant to complete an income ce rtification form and certify the accuracy of the information provided on such form. Also, at least once every twelve (12) months during the Term and within sixty (60) days following the expiration of the Term, SCO shall require the Qualifying Household occupying the Property to recertify the Qualifying Household's income on an income certification form. Additionally, on the renewal of a lease for the Property, SCO shall require the Qualifying Household occupying the Property to recertify the Qualifying Household's income on an income certification form.
c. Verification. SCO shall make a good faith effort to verify the accuracy of income information provided in any income certification form by an applicant for occupancy of the Property or by a recertifying Qualifying Household occupying the Property, by taking one or more of the following steps, as reasonably required or indicated:
i. Obtain an income tax return and copy of each W2 Wage and Earnings Statement for the most recently concluded income tax year;
ii. Contact a credit reporting agency or conduct a similar search;
iii. Obtain an income verification form from the applicant's or the Qualifying Household's current employer(s);
iv. Obtain an income verification form from the United States Social Security Administration or the California Department of Social Services, if the applicant or the Qualifying Household receives assistance from either of such agencies; or
v. If the applicant or an adult member of a Qualifying Household is unemployed and has no such income tax return, obtain another form of independent verification.
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d. Evidence. For purposes of this Section, SCO may conclusively rely upon the evidence of the age of a person as presented in a valid California Driver's License or other form of identification issued by the State of California or the United States Government that includes a date of birth and a photograph of the subject person. All such verification inform ation shall only be obtained by SCO after obtaining the applicant's or the Qualifying Household's written consent for the release of such information to SCO. Failure to consent in writing to the release of such income verification information to SCO may disqualify an applicant for occupancy of the Property or be grounds for termination of the Qualifying Household's occupancy of the Property.
5. SCO Covenant Regarding Lease of the Property. SCO, for itself, its successors, assignees and affiliates, covenants and agrees that, during the Term, the rental or lease of the Property shall be accomplished through a written lease agreement and all of the following restrictions shall apply:
a. SCO shall provide a legible copy of this Agreement to each prospective tenant of the Property, prior to entering into a lease with such tenant.
b. The lease for the Property shall expressly state that the lease is subject and subordinate to this Agreement and shall incorporate each and every provision of this Agreement, either expressly or by reference.
c. The lease for the Property shall not contain any of the following provisions:
i. An agreement by the Qualifying Household to be sued, to admit guilt or to the entry of a judgment in favor of SCO in a lawsuit brought in connection with the lease;
ii. An agreement by the Qualifying Household that SCO may take, hold or sell personal property of any member(s) of the Qualifying Household, without notice to the Qualifying Household and a court decision on the respective rights of SCO and the member(s) of the Qualifying Household, other than an agreement by the Qualifying Household concerning disposition of personal property remaining in the Property after the Qualifying Household has moved out of the Property;
iii. An agreement by the Qualifying Household not to hold SCO or its agents legally responsible for any action or failure to act, whether intentional or negligent;
iv. An agreement by the Qualifying Household that SCO may institute a lawsuit, involving or affecting the Qualifying Household or any of the Qualifying Household's members, without notice to the Qualifying Household or any affected member;
v. An agreement by the Qualifying Household that SCO may evict the Qualifying Household or any of the Qualifying Household's members without instituting a civil court proceeding in which the Qualifying Household or any affected member of the Qualifying Household has an opportunity to present a defense, or before a court decision on the respective rights of SCO and the Qualifying Household or any affected member of the Qualifying Household;
vi. An agreement by the Qualifying Household to waive any right to a trial by jury;
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vii. An agreement by the Qualifying Household to waive the Qualifying Household's right to appeal or to otherwise challenge a court decision in connection with the lease;
viii. An agreement by the Qualifying Household to pay attorney's fees or other legal costs, even if the Qualifying Household wins in a court proceeding by SCO against the Qualifying Household; provided, however, the Qualifying Household may be obligated to pay reasonable attorney's fees and other legal costs, if the Qualifying Household loses such a legal action;
ix. An agreement by the Qualifying Household to pay one (1) or more security deposits (or the equivalent) totaling in excess of the amount of one month's rent for the Property.
6. Retention of Records . SCO, and any successors, assignees and affiliates, shall maintain on file all forms contemplated by this Agreement for the length of the Term and six (6) years thereafter which shall be made available to City upon request.
7. Continuous Operation Covenant . SCO covenants and agrees to, for the benefit of City, to cause the Property to be continuously operated in accordance with the provisions of this Agreement throughout the Term.
8. Compliance with Federal and State Laws. Notwithstanding the above provisions, nothing contained herein shall require SCO or City to do anything contrary to or refrain from doing anything required by federal and state laws and regulations promulgated there under applicable to the construction, management, maintenance, and rental of the Property to Qualifying Households in the City of Lake Forest.
9. Prohibition Against Discrimination. SCO, for itself, agents, and its successors or assigns shall not discriminate against any tenant or potential tenant of the Property on the basis of actual or perceived sex, age, marital status, pregnancy, family composition, race, color, religion, creed, national origin (i.e. place of origin, immigration status, cultural or linguistic characteristics, or ethnicity), ancestry, sexual orientation, gender identity, gender expression, physical or mental disability, or medica l condition. SCO further agrees to take affirmative action to ensure that no such tenant or potential tenant of the Property is discriminated against for any of the above mentioned reasons.
10. Indemnification. SCO shall defend, indemnify and hold harmless City and its officers, agents, employees, representatives, and volunteers (collectively, “ Indemnitees”) from and against any loss, liability, claim or judgment arising from or in connection with the activities of SCO or those of SCO’s contractors, subcontractors, agents, employees or other persons acting on SCO’s behalf in connection with this Agreement, including but not limited to SCO’s development, maintenance and operation of the Property. Notwithstanding the foregoing, SCO shall not be required to indemnify and hold harmless the Indemnitees for liability attributable to the active negligence or willful misconduct of Indemnitees, provided such active negligence is determined by agreement between the parties or by the findings of a court of competent jurisdiction. In instances where an Indemnitee is shown to have been actively negligent and where Indemnitees’ active negligence accounts for only a percentage of the liability involved, the Item: 6
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obligation of SCO will be for that entire portion or percentage of liability not attributable to the active negligence of Indemnitees.
11. City’s Right to Inspect the Property and Documents. City may inspect the Property and any documents or records relating thereto, at any reasonable time during the Term, or six (6) years thereafter, to determine SCO’s compliance with this Agreement.
12. Burden to Run with the Land.
a. It is the express intent that the covenants and restrictions set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon all parties having any interest in the Property, as the case may be, throughout the Term of this Agreement.
Each and every contract, deed, lease or other instrument covering, conveying or otherwise transferring a Designated Unit or any interest therein, as the case may be (each a “ Contract”), shall conclusively be held to have been executed, delivered and accepted subject to this Agreement regardless of whether the other party or parties to such Contract have actual knowledge of this Agreement.
b. SCO a nd City hereby declare their understanding and intent that (a) the covenants and restrictions contained in this Agreement shall be construed as covenants running with the land pursuant to California Civil Code Section 1468 and not as conditions which might result in forfeiture of title by SCO; (b) the burden of the covenants and restrictions set forth in this Agreement touch and concern the Property in that SCO’s legal interest in the Property and all improvements thereon may be rendered less valuable thereby; and (c) the benefit of the covenants and restrictions set forth in this Agreement touch and concern the land by enhancing and increasing the enjoyment and use of the Property by Qualifying Households, the intended beneficiaries of such covenants and restrictions.
c. All covenants and restrictions contained herein without regard to technical classification or designation shall be binding upon SCO for the benefit of City and Qualifying Households and such covenants and restrictions shall run in favor of such parties for the entire period during which such covenants and restrictions shall be in force and effect, without regard to whether City is an owner of any land or interest therein t o which such covenants and restrictions relate.
13. Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of City and SCO, and their respective s uccessors, owners and assigns. City reserves the right to designate another public agency to perform City’s obligations or to exercise City’s rights and options under this Agreement.
14. No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any person other than the parties to it and their respective permitted successors and assigns, nor is anything in this Agreement intended to relieve or discharge any obligation of any third person to any party hereto or give any third person any right of subrogation or action over against any party to this Agreement.
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15. Notices. All notices required herein shall be sent by certified mail, return receipt requested or express delivery service with a delivery receipt and shall be deemed to be effective as date received or the date delivery was refused as indicated on the return receipt, as follows:
To SCO:
7 Whatney Ste B,
Irvine, California 92618
Attention: LaVal Brewer
Email: [email protected]
With Copy to: Sheppard, Mullin, Richter & Hampton
LLP
650 Town Center Drive, 10th Floor
Costa Mesa, CA 92626-1993
Attn: Aaron Sobaski
Email: [email protected]
To City:
City of Lake Forest
100 Civic Center Dr.
Lake Forest, CA 92630
Attention: City Manager
(T) (949) 461-3400
With a Copy to:
Best Best Krieger, LLP
18101 Von Karman Ave., Suite 1000
Irvine, CA 92612
Attention: Elizabeth W. Hull
(T) (949) 263-2608
[email protected]
16. Default. Failure or delay by either party to perform any term or provision of this Agreement, which is not cured within 30 days after receipt of notice from the other party, constitutes a default under this Agreement. The party who so fails or delays must immediat ely commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy with due diligence. The injured party shall give written notice of default to the party in default specifying the default complained of by th e injured party. Except as required to protect against further damages, the injured party may not initiate proceedings against the party in default until 30 days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default.
17. Remedies.
a. Any individual who sells or rents (including subleasing) the Property in violation of the provisions of this Agreement shall be required to forfeit to City all monetary amounts so obtained.
b. City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this Agreement, including but not limited to : (i) actions to revoke, deny Item: 6
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or suspend any permits and/or certificate of occupancy; and (ii) actions for injunctive relief or damages.
18. Governing Law. The laws of the State of California shall govern this Agreement.
Any legal action brought under this Agreement must be instituted in the Superior Court of the County of Orange, State of California, or in Federal District Court in the Central District of California.
19. Attorneys’ Fees. In any action brought to declare the rights granted herein or to enforce or to interpret any of the terms of this Agreement, the prevailing party shall be entitled to an award of reasonable attorney’s fees in an amount determined by the court.
20. No City Responsibility for the Property. City shall have no responsibility for the construction, installation, management, operation or maintenance of the Property.
21. Entire Agreement. The text herein, including attachments, constitutes the entire agreement between the parties. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that any other agreement, statement or promise not contained in this Agreement shall not be valid or binding.
This Agreement may be amended only by written instrument signed by both City and SCO.
22. No Waiver. Failure to exercise any right City may have or be entitled to, in the event of default hereunder shall not constitute a waiver of such right or any other right in the event of a subsequent default.
23. Further Assurances and Recordation. SCO shall execute any further documents consistent with the terms of this Agreement, including documents in recordable form and do such further acts as may be necessary, desirable or proper as City shall from time to time find necessary or appropriate to effectuate its purpose in entering this Agreement.
24. Enforcement. City shall have the power to enforce this Agreement and no other person or entity shall have any right or power to enforce any provision of this Agreement on behalf of City, or to compel City to enforce any provision of this Agreement against SCO.
25. Severability. If any term or provision of this Agreement or its application to any person or circumstance shall to any extent be invalid or unenforceable, then the remainder of this Agreement, or the applicatio n of such term or provision to p ersons or circumstances, other than those as to which it is invalid or unenforceable, shall not be affected by such invalidity. All remaining provisions of this Agreement shall be valid and be enforced to the fullest extent allowed by law.
(Signatures on the Following Page)
//
//
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Signature Page to
Regulatory Agreement and Declaration of Restrictive Covenants (20702 El Toro Road, #35)
IN WITNESS WHEREOF, SCO and City have signed and entered into this Agreement by and through the signatures of their respective authorized representative(s), as set forth below:
SCO:
South County Outreach, a California non-profit
public benefit corporation
By
[insert]
CITY:
City of Lake Forest, a municipal corporation
By
Its
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
By:
City Attorney
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REGULATORY AGREEMENT EXHIBIT A
Property Legal Description
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EXHIBIT D
Grant Deed
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Lake Forest
100 Civic Center Dr.
Lake Forest, CA 92630
ATTN: City Clerk
EXEMPT FROM RECORDING FEES PURSUANT
TO GOVERNMENT CODE SECTION 27383
SPACE ABOVE THIS LINE FOR RECORDER'S USE
APN: [INSERT]
Grant Deed
The undersigned Grantor(s) declare(s):
Documentary transfer tax is $0.
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, The City of Lake Forest, a California municipal corporation
hereby GRANT(S) to
South County Outreach, a non-profit corporation
the following described real property in the City of Lake Forest County of Orange
State of California:
SEE ATTACHED EXHIBIT A
[SIGNATURES ON FOLLOWING PAGES]
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GRANTOR:
THE CITY OF LAKE FOREST,
a California municipal corporation
____________________________
[insert]
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
COUNTY OF ) On , 20___ before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature:
(seal)
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EXHIBIT “1”
TO
GRANT DEED
Legal Description
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ATTACHMENT 5
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AGREEMENT BETWEEN
THE CITY OF LAKE FOREST
AND
SADDLEBACK COMMUNITY OUTREACH
For the Acquisition of Property
(Program No. B-01-MC-06-0584-00-18)
FOR PROGRAM YEAR 2001-2002
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS
THIS AGREEMENT, made and entered into as of this J./~day of //Ilk/ , 2002, by and between the CITY OF LAKE FOREST, a municipal corporation, her~ferred to as "City," and SADDLEBACK COMMUNITY OUTREACH, a California non-profit organization, hereinafter referred to as "Subrecipient".
RECITALS
WHEREAS, the City has entered into various funding agreements with the United States Department of Housing and Urban Development, which agreements provide funds ("CDBG Funds") to the City under the Federal Housing and Community Development Act of 1974 ( 42 U.S.C. Sections 5301 et. seq.), as amended from time to time, (the "Act") and the regulations promulgated thereunder (24 C.F.R. Sections 570 et. seq.); and WHEREAS, the Act provides that the City may grant or loan the CDBG Funds to non profit organizations for certain purposes allowed under the Act; and WHEREAS, Subrecipient desires to acquire one condominium unit and operate thereon transitional housing which will be located within the City of Lake Forest, County of Orange, State of California at 20702 El Toro Road, #35, Lake Forest, CA 92630 (the "Property"); and WHEREAS, the City desires to assist in the operation of the transitional housing by granting CDBG Funds to Subrecipient to finance a portion of the cost of acquiring the Property on terms and conditions more particularly set forth herein; and WHEREAS, Subrecipient is a non-profit, non-sectarian organization providing comprehensive urgent assistance to the poor and needy in Orange County, and Subrecipient will purchase the Facility in part with the CDBG funds granted by the City; and WHEREAS, the City has environmental clearance to release the funds for this project. @) OC#21425vl a-1-
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r ~•
NOW THEREFORE, in consideration of these recitals and the mutual covenants contained herein, City and Subrecipient agree as follows:
1. STATEMENT OF WORK
A. Scope of Services.
Program Delivery
The City has allocated Federal 2001-2002 COBO funds in the amount of thirty-seven thousand, five hundred dollars ($37,500.00) to the Subrecipient for partial financing for the acquisition of the Property to use for transitional housing as outlined in the Subrecipient's application to the City for COBO funds, included as Attachment "1" and fully incorporated herein, (the "Project"). Subrecipient hereby agrees to use the COBO funds provided to Subrecipient solely for the Project pursuant to all of the terms and conditions of this Agreement.
Schedule of Completing Work
The actual purchase of the Property for the Project must be completed before June 30, 2002. The use of the Property as described for the Project and generally throughout this Agreement shall continue for a period of twenty (20) years following the effective date of this Agreement unless prematurely terminated in compliance with Section 15 below.
Quarterly reports during the 2001-2002 Program Year, ending June 30, 2002, shall be provided by the Subrecipient to the City as described under Section 5 below. Following the 2001-2002 Program Year, the Subrecipient shall submit annual reports to the City, also as described in Section 5 below, for the duration of this Agreement.
Budget
The Subrecipient may request to draw down on the $37,500.00 COBO funds in one lump sum, or on a quarterly basis within the 2001-2002 Program Year, so long as appropriate receipts and documentation are provided to and approved by the City.
B. National Objectives. The Subrecipient certifies that the activities carried out with funds provided under this Agreement will meet one or more of the COBO program's National Objectives as defined in 24 CFR 570.208: 1) benefit low/moderate income persons, 2) aid in the prevention or elimination of slums or blight, 3) meet community development needs having a particular urgency as defined in 24 CFR Part 570.208.
Where the assisted activity involves the acquisition of real property, a preliminary determination of whether the activity addresses a National Objective may be based on the planned use of the Property after acquisition. A final determination will be based on the actual use of the Property.
C. Performance Monitoring. The City will monitor the performance of the Subrecipient against goals and performance standards required herein. Substandard OC #21425 vl a-2-
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performance as determined by the City will constitute non-compliance with this Agreement. If action to correct such substandard performance is not taken by the Subrecipient within a reasonable period of time after being notified by the City, contract suspension or termination procedures will be initiated.
2. TERM OF AGREEMENT
Unless sooner terminated in accordance with this Agreement, this Agreement shall continue in full force and effect for a period of twenty (20) years following the effective date. For an additional period of five (5) years following the termination or expiration of this Agreement, the Subrecipient shall be required to comply with Section 15 below, and the use of the Property shall be so restricted.
3. DISBURSEMENT OF FUNDS
A. Maximum Amount of CDBG Funds. The maximum amount of CDBG Funds to be provided to Subrecipient is of thirty-seven thousand, five hundred dollars ($37,500.00).
Subrecipient hereby acknowledges that the City cannot guarantee that the CDBG Funds will be received from HUD. The City's obligation to fund the work hereunder is limited to the availability ofCDBG Funds from HUD. If the CDBG Funds are not forthcoming from HUD for any reason, the City shall have no obligation to fund the work through any other source of funds.
B. Method of Payment. The City shall not provide any payments/reimbursements in advance of actual expenditures by the Subrecipient. The Subrecipient may submit to the Lake Forest Neighborhood Services Manager a "Reimbursement Request" setting forth the amounts actually expended by Subrecipient for the Project; provided that said expenses are included in the Budget. Each request for reimbursement shall include documentation to verify that the expenditure of funds is consistent with the project description/definition as approved by the City Council. Prior to reimbursing the Subrecipient, the City will verify that the Subrecipient has met all applicable regulations for the project.
C. Labor, Materials, and Supplies. The Subrecipient shall furnish all labor, materials and services and bear all expenses necessary to provide the subject program as outlined in this Agreement. Under this Agreement, the City's only financial obligation to the Subrecipient is to provide the CDBG funds of $37,500.00 maximum, as allocated by the City Council for CDBG Program for 2001-2002.
4. PROGRAM INCOME
A. Definition. Program Income, as defined in 24 CFR 511. 76(b ), means the Subrecipient's gross income which is directly generated from the use of the CDBG Funds less all costs incidental to the generation of the income, and shall not include any such income from Subrecipient's Project unless the gross annual income from all CDBG projects by the City and all its Subrecipients exceeds $25,000.00 per year.
OC#2142S vi a-3-
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B. Restrictions. Pursuant to Section 5 below, the Subrecipient shall report to the City any rent, interest, or other income earned as a direct result of the use of the CDBG Funds, whether or not such income constitutes Program Income. Any Program Income ( as defined in Paragraph A above) received by Subrecipient shall be retained by the Subrecipient for expenses related to the provision and operation of the transitional housing unit identified in the Project. All provisions of this Agreement shall apply to such activities funded by Program Income. All Program Income shall be expended by Subrecipient before the City is obligated to advance any other CDBG Funds to Subrecipient under this Agreement. Any proportion of Program Income attributable to the grant of CDBG Funds which is on hand when this Agreement expires, terminates, or is otherwise canceled shall be subject to Section 15 herein.
5. RECORDS AND REPORTS
A. Documentation. The Subrecipient shall, at minimum, maintain the following records and reports to assist the City in complying with its record keeping requirements. a) Documentation of the income level, ethnicity, and/or age of persons and/or households participating in or benefiting from the Subrecipient's program; and, b) Documentation of the number of persons and/or households participating in or benefiting from the Subrecipient's program; and,
c) Documentation of all CDBG funds received from the City; and, d) Docwnentation of expenses and reimbursement requests; and, e) Documentation of how and where a determination was made as to the eligibility status of persons assisted; and,
f) Any such other related records as the City shall require.
B. Reports. The Subrecipient shall submit quarterly "Progress Reports," including the information described in Paragraph A of this Section, during the program year beginning July 1, 2001 and ending June 30, 2002 within fifteen (15) calendar days of the end of each quarter. The final progress report is due no later than July 15, 2002. The report must include sufficient information to assist the City in monitoring the Subrecipient's performance. The Subrecipient must demonstrate satisfactory performance prior to reimbursement for expenditures. Following the close of the 2001-2002 Program Year, the Subrecipient shall submit to the City's Neighborhood Services Manager an annual Progress Report, including the information described in Paragraph A of this Section. The annual Progress Report shall be due no later that July 15 of each calendar year throughout the duration of this Agreement.
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6. C. Maintenance of Records. The Subrecipient shall maintain separate accounting records for the Federal CDBG funds provided by the City. The City, Federal Grantor Agency, Comptroller General of the United States, or any of their duly authorized representatives shall have access to all books, documents, papers and records maintained by the Subrecipient which directly pertain to the Project for the purpose of audit, examination, excerpts and transcriptions.
Unless otherwise notified by the City, the Subrecipient shall retain all financial records, supporting documents and statistical reports necessary to evaluate the Project as consistent with the requirements of this Agreement until four (4) years following the expiration, termination, or early cancellation of this Agreement. All records subject to an audit finding must be retained for five (5) years from the date the finding is made or until the finding has been cleared by appropriate officials and the Subrecipient has been given official written notice.
SINGLE AUDIT REQUIREMENT
If the Subrecipient shall receive more than $300,000.00 in total federal funds in one fiscal year from the City of Lake Forest and/or any other city or agency, the Subrecipient is required to submit a Single Audit Report. As required by the Federal Single Audit Act, the Subrecipient shall be required to submit to the City, a comprehensive financial audit prepared by an independent, neutral third party auditor. The audit shall cover fmancial operations of the Subrecipient for the period beginning July 1, 2001 and ending June 30, 2002 and is due not later than June 30, 2003.
7. PROGRAM REQUIREMENTS
The Subrecipient shall adhere to the terms of the City's CDBG Application and Subrecipient Agreement and with assurances and agreements made by the City to the United States Department of Housing and Urban Development.
The Subrecipient shall comply with applicable Uniform Administrative Requirements as described in Section 570.502(b) of the federal regulations for the CDBG Program, included as Attachment "2" and fully incorporated herein.
The Subrecipient shall carry out all activities in compliance with all Federal laws and regulations as described in Subpart K, such as labor standards, environmental standards, and fair housing requirements, except that:
OC#21425 vl
a) The Subrecipient will not assume the City's environmental responsibilities as described in Section 570.604; and
b) The Subrecipient will not assume the City's responsibility for initiating the review process required under the provisions of 24 CFR Part 52. a-5-
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The provisions of Subpart K of the CDBG Regulations are included as Attachment "3" and fully incorporated herein.
8. RELIGIOUS ORGANIZATION
The Subrecipient agrees that funds provided under this contract will not be utilized for religious activities, to promote religious interest, or for the benefit of a religious organization in accordance with the Federal regulations specified in 24 CFR 570.2000).
9. NONDISCRIMINATION CLAUSE
There shall be no discrimination against or segregation of any person, or group of persons, on account or race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any part thereof, nor shall Subrecipient, or any person claiming under or through it, establish or permit any such practice of 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, or any part thereof.
10. CHANGES IN USE OF FUNDS
11. Changes in the use of CDBG funds must be approved by the City Council. If the Subrecipient desires a change in the use of the CDBG funds following approval of this Agreement, a written request must be submitted to the City for review by the Council.
No change in use of the CDBG funds will be permitted by the City without prior formal approval by the City, subject to the provisions of the City's adopted Citizen Participation Plan. Notwithstanding the above, in accordance with 24 CFR 570.503(b)(8), the Property shall be used to meet one of the National Objectives summarized in Section 1.B. herein and more fully described in 24 CFR 570.208 for the duration of this Agreement plus five (5) years following or the City must be reimbursed as required under Section 15 below. If this Agreement is prematurely canceled, the Property shall be used to meet one of the CDBG National Objectives for at least five (5) years following cancellation or the City shall be reimbursed in accordance with Section 15 below.
SALE OR TRANSFER OF THE PROPERTY
Subrecipient hereby agrees not to transfer the Property or any of its interest therein except as provided in this Section. As used in this Section, the term "transfer" shall include any assignment, mortgage, hypothecation, conveyance, or encumbrance of the Property or the improvements thereon. A transfer shall also include the transfer of more than twenty-five percent (25%) (in the aggregate) of the present ownership and/or control of any person or entity constituting Subrecipient or its general partners, taking all transfers into account on a cumulative basis.
Subrecipient shall not transfer the Property or any of Subrecipient's rights hereunder, directly or indirectly, voluntary or by operation of law, without the prior written approval oc #21425 vi a-6-
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" ....
of the City during the term of this Agreement, and if so purported without written approval, said transfer shall be null and void. In considering whether the City will grant approval of any such transfer, the City shall consider such factors as: (i) whether the transfer will prevent or substantially interfere with the performance of this Agreement and the pwposes and restrictions of the Act and Regulations, (ii) the financial credit, strength, and capability of the proposed transferee to perform Subrecipient's obligations under this Agreement, and (iii) the proposed transferee's experience and expertise in the performance of similar Projects.
12. INSURANCE
If the Subrecipient shall receive more than $5,000.00 from the City in CDBG funds and/or other funds, the Subrecipient shall obtain and maintain policies of general liability insurance and a combined policy or worker's compensation and employers liability insurance from an insurance company authorized to do business in the State of California which meets the requirements of the City in an insurable amount of not less than $300,000.00 each, unless a lower amount is approved by the City Attorney or the City Manager.
This insurance shall be in force during the term of this Agreement and shall not be canceled without thirty (30) days prior written notice to the City sent by certified mail.
The City shall be named as an additional insured on these policies. The Subrecipient shall furnish certificates of insurance to the City before commencement of work.
13. HOLD HARMLESS AND INDEMNITY AGREEMENT
The City, its elected and appointed officers, employees and agents shall not be liable for any claims, liabilities, penalties, fines, or any damage to goods, properties, or effects of any person whatsoever, nor for personal injuries or death caused by, or claimed to have been caused by, or resulting from, any intentional or negligent acts, errors or omission of Subrecipient or Subrecipient's agents, employees, or representatives in completion of the Project outlined in the Agreement.
Subrecipient agrees to defend, protect, indemnify, and hold harmless the City and its elected and appointed officers, employees and agents against any of the foregoing liabilities or claims of any kind and any cost/and expense that is incurred by the City on account of any of the foregoing liabilities, including liabilities or claims by reason of alleged defects in any plans and specifications for the Project or facility, excluding only such claims or liabilities arising from the sole negligence or willful misconduct of the City.
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14. SUSPENSION AND TERMINATION OF AGREEMENT
In accordance with Title 24, Sections 85.43 and 85.44 of the Code of Federal Regulations, this Agreement may be suspended or terminated if the Subrecipient fails to comply with any term(s) of the award and/or the award is terminated for convenience.
Title 24, Section 85.43 and 85.44 of the Code of Federal Regulations are included as Attachment "4" and fully incorporated herein.
15. REVERSION OF ASSETS
Upon expiration, termination, or early cancellation of this Agreement, the Subrecipient shall transfer to the City any CDBG funds on hand at the time of expiration, and any accounts receivable attributable to the use of CDBG funds. The Subrecipient shall be required to use any real property and any Program Income (as explained in Section 4 above) under the Subrecipient's control that was acquired or improved in whole or in part with CDBG funds in excess of$25,000.00 as follows:
a) Used to meet one of the National Objectives in 24 CFR, Section 570.208 until five ( 5) years after expiration, termination, or cancellation of this Agreement; or, b) Disposed of in a manner that results in the City being reimbursed in the amount of the current fair market value of the property less any portion of the value attributable to expenditures ofnon-CDBG funds for acquisition or improvement to the property. Notwithstanding the foregoing, the City hereby agrees to subordinate this right to demand reimbursement to the deed of trust recorded against the Property by the lender providing purchase money financing for Subrecipient's acquisition of the Property.
16. MISCELLANEOUS PROVISIONS
A. Notices. Any notices which either party may desire to give to the other party under this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable document delivery service, such as but not limited to, Federal Express, that provides a receipt showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice:
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CITY:
City of Lake Forest
23161 Lake Center Drive, Suite 100
Lake Forest, CA 92630
Attn: Elaine Nagano, Neighborhood Services Manager
a-8-
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With a copy to:
City Clerk
City of Lake Forest
23161 Lake Center Drive
Lake Forest, CA 92630
SUBRECIPIENT:
Saddleback Community Outreach
23011 Moulton Parkway, B·5
Laguna Hills, CA 92653• l 222
Attn: Chairman/Executive Director
B. Assignment of Agreement. The Subrecipient shall not assign this Agreement or any monies due thereunder without the prior written consent of the City.
C. Successors or Assigns. All terms, conditions, and provisions hereof shall inure to and shall bind each of the parties hereto, and each of their respective heirs, executors, administrators, successors, and assigns.
D. Interpretation. Each party to this Agreement warrants to each other party that each party either had the assistance of counsel or had counsel available to it, in the negotiation for, and execution of, this Agreement, and all related documents. The parties acknowledge and agree that the terms and provisions of this Agreement have been negotiated and discussed between the parties and their attorneys, and this Agreement reflects their mutual agreement regarding the same. Because of the nature of such negotiations and discussions, it would be inappropriate to deem any party to be the drafter of this Agreement, and therefore no presumption for or against validity or as to any interpretation hereof, based upon the identity of the drafter shall be applicable in interpreting or enforcing this Agreement.
E. Entire Agreement. This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material.
F. Severability. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Agreement is for any reasons held to be invalid by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Agreement.
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t I ll
. .,
G. Counterparts. This Agreement may be executed in multiple counterparts, each of which so fully executed counterpart shall be deemed an original. No counterpart shall be deemed an original or presumed delivered unless and until the counterparts executed by the other parties to this Agreement are in physical possession of the party seeking performance thereof.
H. Authority to Execute this Agreement. The person or persons executing this Agreement on behalf of Subrecipient warrants and represents that he/she has the authority to execute this Agreement on behalf of the Subrecipient and has the authority to bind Subrecipient to the performance of its obligations hereunder. [END OF TEXT; FOLLOWING PAGE CONTAINS SIGNATURES]
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• , r .._
I
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first written above.
SADDLEBACK COMMUNITY
OUTREACH (Z_--JJ~
~~--~--v
.>oHrJ e. R.. ectJc,
Cha:irmM!/Executive Director
(Signaturaj
~ttyJ,H 1rv~Rr
(Name) _ c . -r,,. .A
~ ~V'J
(Title)
ATTEST:
Eric S. Vail, Assistant City Attorney
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CITY OF LAKE FOREST, a municipal
corporation
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I.
, City of Lake Forest
2001/2002 CDBG Application :-Page1
RECEf'v':eo
A.
CITY OF LAKE FOREST
Cl;TY._OF LARE FOREST
CtTY CLERK'S OFFICE
2001/2002 COMMUNITY DEVELOPMENT BLOCK G~T~'i1f.W5s
REQUEST FOR PROPOSALS FOR PUBUC SERVICES AND GRANTS
APPLICATION
GENERAL INFORMATION
I '
1. Organization: Saddleback Community Outreach (SCO)
2. Mailing Address and Telephone Number: 23011 Moulton Parkway, B-12 Laguna Hills, CA 92653
(949) 380-8144
3. Proposed Program Title: Capital Expenditure/Transitional Housing Program
4. Location Where Services Are To Be Provided: Lake Forest (Specific locations to be determined)
5. Official To Contact Regarding This Application: John Rooney, Executive Director
6. Official(s) Authorized to Sign Contract and Expend Funds:
7. Federal Tax I.D. Nwnber: 33-0330233
John Rooney, Exec. Director
Margaret McClean, CEO
Ray Havert, Chairman
8. Attach Copies of Tax Exempt Registration and Non-Profit Status Verification.
See attached 50lc3 letter.
9. Attach Proof of Coverage of Required Insurance.
See attached.
f:\common\enagano\O 1 cdbg\sbrappO I .doc ATTACHMENT 1
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,City of Lake Forest
2001/2002 CDBG Application Page8
B. PROGRAM INFORMATION
This request is for a New __ X .... * __ Existing ____ program. * .For purchase of two condominiums for transitional hous·ing.
2. Have you previously received funding for this service through the City's CDBG Program? Yes X No ____ . If yes, identify the years, amounts and programs funded. Also provide names, agencies and contact persons at those agencies if other than Lake Forest.
1999-2000 $75,000 CDBG/City of Lake Forest
1999-lOOO $192,000 SuperNofA/County of Orange
!999-2000 $25,00o· CDBG/City of Mission Viejo
2000-2001 $75,0uO CDBG/City of Lake Forest
2000-2001 $60,000 CDBG/City of Mission Viejo
3. Are you requesting CDBG funding for this progratnthrough any other cities or the County? Yes ____ No X • If yes, from whom and how
much?
4. Funding requested under which category? (Limit one.)
5. 6.
7. 8.
9. X Services to/Projects for Homeless Persons or Persons Threatened With Homelessness.
Services to/Projects for Non-Homeless Persons with Special Needs.
Services to/Projects for Other Low Income Persons.
Amount of CDBG funds requested from Lake Forest: $ 90,000 Amount of CDBG funds requested from other agencies: $ ___ o_ Other sources of income: $171,800
Total cost of proposed program: . $261.800
Total agency budget: $666,200*
f:\cornmon\enagano\Olcdbg\sbrappOl.doc
*Agency budget plus
capita 1 expense·
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' I
·City of Lake Forest
2001/2002 CDBG Application Page9
10. Estimate the number of lower income Lake Forest residents to be directly assisted with requested grant funds. (Persons or Households?) 15 persons per year in perpetuity (15 persons X 30 years X Qi;:', 900:~ persons)°
11. Narrative: See narrative
On a separate sheet(s) of paper, please provide the following information:
a) Describe the proposed program/project. Include specific activities you will undert~e, the average amount or length of service to be provided and the expected outcome of the program/project.
b) Identify the nature and extent of the community need to be addressed by the proposed program/project. Provide data which supports the unmet demand for the proposed service.
c) Describe the characteristics of the targeted client population including age, sex, income level, ethnic background, target area, and other specialized characteristics. d) Describe your organization and explain your professional qualifications to carry out the proposed program. Please list all appropriate academic credentials (if applicable), related experience and past performance.
e) Describe how referrals are made to and from your organization. f) What other source(s) of funding will your program seek to support the proposed program/project?
g) What is the alternative plan if the City of Lake Forest contribution is not granted or the funding level is reduced?
h) Please complete the budget proposal provided in Attachment A of this application. f:\common\enagano\O 1 cdbg\sbrappO l .doc
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. .
•City of Lake Forest
200112002 CDBG Application
C. CERTIFICATION
Page10
I hereby certify tha4 if funds are granted from Lake Forest to our organization, they will be used to benefit lower income residents of Lake Forest. We understand that funding is provided on a reimbursable basis only, that proof of liability insurance will be required and that our formal agreement with the City will define other reporting and programmatic requirements.
Name: ....l f£J 14- JJ IE , (<.. c .c.'I ,..., c 7
Signature: -TJ1...,......,...-_"---__ z __ ._~--~--- Date: .D &.cefVl6611- f:\common\enagano\O 1 cdbg\sbrappO I .doc
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City of Lake Forest
2001-2002 CDBG Capital Expenditure Application
Saddleback Community Outreach
A. PROGRAM DESCRIPTION
Saddleback Comm.unity Outreach (SCO) seeks to continue our expansion of the Transitional Housing Program through the purchase of two condominimns in Lake Forest. The purpose of the program is to offer long term. transitional housing to South Orange County residents. Families may re.main in the program for six to twelve months. Clients work with the Sadclleback: Community Outreach staff and volunteer mentors on building new skills such as budgeting, employment goals, and other life skills. Parents and children also participate in a mandatmy counseling program consisting of group, individual and family sessions.
Families contribute monthly to the expenses associated with the housing unit The Spirit of the program encourages stability, responsibility, and seJf-sufficiency while providing encouragement and help.
Participants are expected to secure permanent housing and financial responsibility by the end of their stay.
With the help of the City of Lake Forest and other contributors, SCO has purchased nine condommiums in South Orange County. and is in escrow on two more. Six condominiums are located in the City of Lake Forest. Between July 1999 and June 2000, fifty-one people were served in the Transitional Housing Program, representing more than ~uble the number of clients served at the same time 1ast year.
B. STATEMENT OF NEED
There are no other programs in South Orange County that provides this particular service to families in need. Despite its growth, the Transitional Housing Program has been virtually 100% occupied. and with a frequent waiting list, since its inception. Between July 1999 and June 2-000, SCO has served 6,337 Lake Forest residents in all of our social services programs. Lake Forest residents have traditionally been one of the highest utilizers of all SCO programs. Lake Forest residents received more than $10,000 in rental assistance in the above referenced time period (9% of the total program). The :families who received this assistance were imminently at risk of losing their housing or bad been homeless. Oearly there are many precariously housed residents in the City of Lake Forest, Due to the high cost of housing and rising rents in Otange Collllty, it is not unusual for very low-income families to spend 60-80% of their income on rent For these families, a single crisis (such as a lost job or illness) can lead to eviction and/or homelessness.
SCO is a safety net for these at -risk families.
C. 'l'ARGETED CLIENT POPULATION
The Transitional Housing Program targets families who are homeless or at risk of homelessness and reside in South Orange County. All participants are very low-income families. Many recipients have experienced difficulties such as divorce, domestic violence, unemployment or illness. SCO has close working relationships with other social service providers in South Omnge County, especially domestic violence programs. Through these connections, SCO is often able to provide "second step" housing to families leaving emergency shelter programs. Families are interviewed by tJained volunteers to assess their level of motivation and willingness to fully participate in the program. Last year the demographic profile of Transitional Housing Program participants was as follows: 30% Latino, 50% Caucasum, and 20% African American.
l>. ORGANIZATION DESCRIPTION
Saddleback Community Outreach is a program like no other in South Orange County. SCO was founded in 1989 with a mission to provide a comprehensive range of services to our neighbors. The mission of the services is to encourage self-sufficiency among the recipients. Between July 1999 and June 2000, SCO provided services 18,747 times to residents of South Orange County. The evidence that SCO is truly a community project is reflected in our many volunteers and the financial support received from the community. In fact. a large percentage of our budget comes from community resources including Item: 6
229
businesses, congregations, individuals and fundraisers. SCO is very cost effective, maintaining only two staff persons, and utilizing tnore than 150 community volunteers to "staff' the agency.
E. REFFERAL PROCESS
Clients are generally referred to Saddleback Community Outreach by local congregations, social ~ce agencies community centers, senior citizen prognuns and by word of mouth. Specifically for the Transitional Housing Program we coordinate with a local domestic violence program to provide "second step" housing to their graduates. Through such collaboration with other community members, we are maximizing resources and providing the best seivice to our constituents.
F. SOURCES OF FUNDING
SCO has vigorously sought funding for the Transitional Housing Program in recent years due to the high demand for services. In addition to generous private donations and other local municipalities, SCO has .received. funding through the County of Orange and the SuperNOF A process for this program. SCO has been able to minimize administrative costs and raise sufficient operating funds to .finance the program's expansion The client repayment program also. offers a small, but important, ongoing support for the program.
G. ALTERNATIVE PLAN
Should the City of Lake Forest choose not to fund our program. it would seriously impact our ability to purchase these properties, and, therefore, serve needy families. Of course, SCO will continue to seek funds from a variety of sources, but CDBG funds are uniquely targeted for large capital purchases.
B. BUDGET PROPOSAL
See attachment A
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·City of Lake Forest
200112002 CDBG Application
Organization:
CDBG SUBRECIPIENT APPLICATION
ATTACHMENT A
PROPOSED BUDGET
Saddleback Community Outreach (SCO)
Pagell
Program: Capital Expenditure/Transitional Housing Program* Administration and
Salaries
Supplies
Facilities and 4,000 4,000 Maintenance
Communications
Professional
Services (; nr. l . i=>sr.r lmwi fees) 7.000 7.000
Conferences and
Meetings
Travel and Meals
Insurance 800 800
Capital Purchases 90,000 160,000 250,000
Other
(Please Specify)
TOTAL 90,000 171,BOOi 261,800
NOTE: All expenditures must be fully documented by receipts, time records, invoices, canceled checks, inventory records or other appropriate documentation which fully and completely disclose the amount and nature of the expenditure. *Note: This budget is soley for the purchase of two condominiums to be used in the Transitional Housing Program.
f:\cornmon\enagano\O 1 cdbg\sbrapp0 l .doc
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. .
'" Name of Organization: Saddleback Community Outreach
Address: 23011 Moulton Parkway, B-12
Laguna Hills, CA
CDBG FY 2001/02
QUESTIONNAIRE
I. Is your organization a religious entity, including a nonprofit religious organization?
( ) If yes, skip to Part II.
( XX ) If no, proceed.
A. Will the funds be used for the acquisition of property to be used for religious purposes or which will otherwise promote religious interests? . . ( ) YES If yes, stop here.
( xx ) NO If no, proceed:
B. Will the funds be used for the construction or rehabilitation including historic preseivation and removal of architectural barriers of structures to be used for religious purposes or which will otherwise promote religious interests?
( ) YES
( xx ) NO
If yes, stop here.
If no, proceed:
C. What are the eligible public services for which the funds will be used? Please describe the eligible public seivices:
Provide benefit to low income persons.
ll. If your organization is a religious entity, including a nonprofit religious organization, then proceed as follows: N / A
A. Will the funds be used for the acquisition of property for ownership by your organization?
f7c/m'Olcclbg/relques
(
(
) YES
) NO
If yes, stop here.
If no, proceed:
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•,
'.
Name of Organization: Saddleback Community Outreach
Address: 23011 Moulton Parkway, B-12
Laguna Hill~, CA
CDBG FY 2001/02
Not Applicable
B. Will the funds be used for the construction of structures owned by your organization?
( ) YES If yes, stop here.
( ) NO If no, proceed:
C. Will the funds be used to rehabilitate buildings owned by your organization (including historic preservation and removal of architectural barriers)?
( ) YES If yes, proceed:
( ) NO If no, skip to Section D.
1. Is the building ( or portion thereof) that is to be improved with the CDBG funds leased to an existing or newly established wholly secular entity (including an entity established by the religious entity)?
( ) YES If yes, proceed.
( ) NO If no, stop here.
2. Will the CDBG assistance be provided to the lessee (and not the lessor) to make the improvements?
( ) YES If yes, proceed.
( ) NO If no, stop here.
3. Will the leased premises be used exclusively for secular pUiposes available to persons regardless ofre~igion?
( ) YES If yes, proceed.
( ) NO If no, stop here.
4. Are the lease payments equal to or less than the fair market rent of the premises as they were before the improvements were made? ( ) YES If yes, proceed.
( ) NO If no, stop here.
fie/en/OJ cclbg/relques
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' .. •
, .
Name of Organization: Saddleback Community Outreach
Address: 23QJ J Moul too Parkway, B-J 2
Laguna Hills, CA
CDBG FY 2001/02
Not Applicable.
S. Will the portion of the cost of any improvements that also serve a non-leased part of the building be allocated to and paid for by your organization?
( ) YES If yes, proceed.
( ) NO Ifno, stop here.
6. Has your organization entered into a bindin& aareement that it will pay to the lessee the value of the improvements if the lessee ( or qualified successor lessee) fails to retain the use of the leased premises for a wholly secular purpose for at least the useful life of the improvements and that the lessee (or qualified successor lessee) also agrees that it must remit such amount received from your organization back to the City?
( ) YES If yes, proceed.
( ) NO If no, stop here.
D. Will the funds be used by your organization for eligible public services? ( ) YES If yes, describe public services:
NOTE: All Subrecipient organizations must agree to the tenns of the Subrecipient contract which include the following:
* The applicant agrees not to discriminate against any
employee or applicant for employment on the basis of
religion and will not limit employment or give preference in employment to persons on the basis of religion;
The applicant agrees not to discriminate against any person applying for such public services on the basis of religion and will not limit such services or give preference to
persons on the basis of religion; and,
flc/cnA)lcdba/relqucs
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.. ,_.
'.
Not Applicable.
*
(
f/c/cn/01 cdbplquc:s
)
Name of Organization: Saddleback Community Outreach
Address: 23011 Moulton Parkway, B-12
Laguna Hills, CA
CDBG FY 2001/02
The applicant agrees not to provide religious instruction or counseling, conduct religious worship or services, engage in religious proselytizing, or exert any other religious influence in the provision of such public services.
NO Ifno, describe the public services for which
funding will be used.
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•.•• · i
Dr rtmcnt of tho Treasury
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Cnso Number:
95H206002
Conl:act Person:
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~•~ai~·;;:~1::. Dased on infornml:ion supr>I ied, and ai;suminu y,)u1· ,.11.u!rnl:1011u, 1-1i 11 bo atr. :.J 111• t ...... '
~•./-~tf;,·._c!tatnd .in ~,our. appl iciltion for rar.c,gni-1:ion of o><un1pl;il,n, m: hi.Iva delorminod '/C.U •~):~:::..),a,ro exe,11pl: from Fodornl inco,110 -1:ax undo.- section 501 <.c1) of' l:1-1,:: lnl:oi-md '.<~:i1 ::·;!,l?eveoue Code as an organization do5cribed in section !:iOl.<d (3). ~,:C: .. ~~ .. ~~~-t ,. .
/·:·:,·.·~·:' ·, ... Becauue you arc, a n<11-dy crcal:c,d oqJani.:1.ation, •. 1:1t.-: itr1l nol nmst mal:in!J a .;:'.:r::,· final dotnrminal:ion of your fuundul:ion 1.t:ntus unJe1· i~od:i,m !:i():J(a) ,>f l:ho C,l,fo. ,. /:,,1\.!llo1-1ovar, 1-to havo deter111inod lhat \'OU co11 roasonnl.dy L .. ·1 m11.•(•cl,HI l:o l,e a pul.,1 i(:- • ;· ·-1.:hl.Y uupporl:od orgonl.:ml:ion doacribocJ in ~~ectiom:. bO!l(a) (l) ;_rn,J J/()(l,) (l) (ti) (viL ·.:·_: ... .:,_-·:.
~. t:•••:' , •. 1 ' I
.::./.: ... · : l\ccordlngly, you NI 11 be troal:01:I m~ n pub I icly !311ppc,rl:od orgnni,rnl:ion, -,'/•>t:Jand nol: as a priva~o foun~a·tion, durinsJ .m advance ruling 1-"~riod. rhls -i:t--,:;:;·i ndvn~ce rul Ing J>er1od bB!Jlnt> and c>ndu cm l:ho datos i,l·10Hn nl,o•u: • . ,.,{!.· ;z.l, ·. 0 4' 11•f' '·•:~:·: ' . .
•·,:-.i~=??:. · 'IUt:hin 90 days ufl:or l:ho end of your advanco rul inti lhW i•:h.l, you 1nusl:
;~\\'.1,'.(;;uubm.it_ to us lnfonu1tion noedod to d,,Lormino 1-1hal:hor \1ou h:.ivo n1<:I: l:ha ri:n1uire··· .'>;l;"f)•~mts of t:he apr,licablo support ·to11t during tha ndvanoi ruling period. H you \.~.:\i<~.(IB~ab,l.iuh that you havn boctn a r>ubl icl\' supported orn,,ni:z,,Lion~ you Hi 11 bo :•.;t;;•,'_:• .. •:i-c::lauolf.led as·a socl:lon 509(a) (1) or 509(11) <2> organizal:iml au long as yQU om ff;\·,~.:;~.;~_I_ nu.a ·-to 11eet the roqu I r<u11onts or tho ar>P I i cub Io sup~,or l; Ln1; l. If y<lU do not fi[b:(;~;J~_~eol:,:.l:he publ le sup1>orl: roc1ui1•einonl:s durlng tho advance rul in~J J)arh,d, you 1-1i 11 t;i-\'.".:,/:::~_l>,a cJ.asniflod eo a 1>rlv11to foundation for future 1>cwiodt1. f\ls<,, if vou are ,•·;~•:·!',••:ciao.a.if led au n pd,,at:o foundal:ion., you 1-li 11 bo l:roule~d a,. a rwivnto foundnl:il)n ( .. \t:\•::·f.ro1n 'the da to of yo1Jr · i n<:ept ion fc1r purpoHon of so<:t i (•ns U>7 Cd) aud '1940. 1::: .. ,-}, ..
~·.'.'.:~;<-. _.GrantorH and contr.it;,utoru Nin\, rnl\' on tho dotorm1natic,n tlu~t you arr, nc,t iJ •./i~·.•.'.·· ·_.r>rlval:e -foundnl:lon. unl:11 90 dayn nfti>r l:hn cm<l of youi· ndvance rul ino 1>c1rlc,d. :;1;~;1;:1.·;;-; ~: [ f_· you tiubmi t ·the 'raqu I rod inf or mat ion 1-1 I l:h ir1 -Um 90 d.a~•s,. ~1ra11 l:or-s and conb- i - ~\~f::'.:\,l~ul:ors 111ny conl:lnuo l:o rnly on l:ho adv.mco cfolor·111inal;i,,n 11nl:i I l:hn ~;,w'li<::o I I•· I ••\ • '•: •
,'//'·,·.::.
.j
Item: 6
236
~-;INT:RNAL RKVENUE SERVIC~
DISTRICT DIRECTOR
2 CUPJ\NIA CIRCLE
MONTEREY PARK, CA 91754
Date:
MAY 151993
SADDLEBACIC COMMUNITY OUTREACH
23011 MOULTON PKY BS
LAGUNA HILLS, CA 92653-1222
Dear Applicant:
DEPARTMENT OF THE TREASURY
Employer Identification Number:
33-0330233
Contact Person:
JULIE Y CHAN
Contact Telephone Number:
(213) 725 w 6619
Our Letter Dated:
August 10, 1989
Addendum Applies:
no
This modifies our letter of the above date in which we stated that you would be treated as an organization that is not a private foundation until the expiration of your advance ruling period.
Your exempt status under section S0l(a) of the Internal Revenue Code as an organization described in section SOl(c) (3) is still in effect. Based on the information you submitted, we have determined that you are not a private foundation within the meaning of section S09(a) of the Code because you are an organization of the type described in section 509(a) (1) and 170(b} (1) (A) (vi).
Granters and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your section 509{a) (1) status, a granter or contributor may not rely on this determination if he or she was in part responsible for, or was aware of, the act or failure to act, or the substantial or material change on the part of the organization that resulted in your loss of such status, or if he or she acquired knowledge.that the Internal Revenue Service had given notice that you would no longer be classified as a section 509(a) (1) organization.
If we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter.
Because this letter could help resolve any questions about your private foundation status, please keep it in your permanent ,records.
If you have any questions, please contact the person whose name and telephone number are shown above.
Sincerely yours,
• •
Michael· uinn
District Director
Letter l0S0(DO/CG)
Item: 6
237
STAT.E1-HD_M_E_0F_F_1c_E ____ ls_AN_F_R_ANC_I_s_co_.__l ______ A_N,_.1_L_R_A_T_1N_G_E_N_o_o_R_se_M_E_N~! ____ _
COMPENSATION
INSURANCE
FUND
IT IS AGREED THAT THE CLASSIFICATIONS AND RATES PER $100 OF REMUNERATION APPEARING IN THE CONTINUOUS POLICY ISSUED TO THIS EMPLOYER ARE AMENDED AS. SHOWN BELOW.
HERE ARE YOUR NEW RATES FOR THE PERIOD INDICATED. IF YOUR NAME OR ADDRESS SHOULD BE CORRECTED OR IF INSURANCE IS NOT NEEDED FOR NEXT YEAR, PLEASE TELL US.
IMPORTANT THIS IS NOT A BILL
SEND NO MONEY UNLESS STATEMENT IS ENCLOSED
THE RATING PERIOD BEGINS AND ENDS AT 12:01AM
PACIFIC STANDARD TIME
CONTINUOUS POLICY 1421523-00
RATING PERIOD 4-01-00 TO 4-01-01
SADDLEBACK COMMUNITY OUTREACH
23011 MOULTON PKWY B-5
LAGUNA HILLS, CALIF 92653
DEPOSIT PREMIUM
MINIMUM PREMIUM
PREMIUM ADJUSTMENT PERIOD
$535.00
$535.00
SEMI-ANNUAL
R SG
-
-
NAME OF EMPLOYER- SADDLEBACK COMMUNITY OUTREACH
CODE NO.
8810
8017
(A NON PROFIT PUBLIC BENEFIT CORPORATION)
(A NON-PROFIT CORP.)
PRINCIPAL WORK AND RATES EFFECTIVE FROM 04-01-00 TO 04-01-01
INTERIM
CLERICAL OFFICE EHPLOYEES--N.O.C.
STORES--RETAIL--N.O.C.
BASE BILLING
RATE RATE*
1.16 7.05
1.16 7.05
********BUREAU NOTE INFORMATION********
FEIN 330330233
COUNTERS I G}iED i\ND ISSUED AT SAN FRANCISCO MARCH 14, 2000 POLICY FORM L 1 Item: 6
238
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION
ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR PHILADELPHIA INSURANCE COMPANIES 26300 LA ALAMEDA, SUITE 460
MISSION VIEJO, CA 92691
0 0 Cl B OW
COMPANIES AFFORDING COVERAGE
coM~ANY PHILADELPHIA INDEMNJ1Y INSURANCE COMPANY
INSURED SADDLEBACK COMMUNITY OUTREACH
23011 MOULTON PARKWAY, SUITE 8-5
LAGUNA HILLS, CA 92653
COMPANY
cc
LTR
A
A
A
B
COMPANY
C
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDmON OF PNf CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR ~y PERTAIN, THE INSURANCE AFFORDED B V THE POLICIES DESCRIBED HEREIN IS SUBJECT TO All THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES, LIMITS SHOWN W.Y HAVE BEEN REDUCED BY PAID CLAIMS.
POLICY EFFeCTM! POUCY EXPIRATION TYPE OF INSURANCE POLICY NUMBER DATE {MM/CDIYY) DATE (MMIDDlYY) LIMITS GENERAL LIABILITY PHPG106436-O 2/1/2000 2/1/2001 GENERAL AGGREGATE s 100000( X COMMERCIAL GENERAL LIABILITY PRODUCTS • COMP/OP AGG $ 1 000 ooc Cl.AIMS MADE: 0 OCCUR PERSONAL & AOV INJURY $ 1000000
OWNER'S & CONTRACTOR'S PROT EACH OCCURRENCE s 1000000
X PROFESSIONAL LIAS. FIRE OAMAGE (Any cne lire) s 100 ooc MED exP (Any one perscn) $ 5,00(
AUTOMOBILE LIABILITY PHPG106436-D 2/1/2000 211/2001 COMBINED SINGLE LIMIT s ANYAUTO 1,000,00C All OWNED AUTOS BOOIL Y INJURY $
X SCHEDULED AUTOS (Per ptll!ICn)
X HIRED AUTOS BODILY!NJURY s X NON-OWNED AUTOS {Petacoident) PROPERTY DAMAGE s
GARAGE LIABILITY AUTO ONLY. EA ACCIDENT s
ANY AUTO OTHER lHAN AUTO ONLY;
EACH ACCIDENT $
AGGREGATE $
EXCESS LIABILITY EACH OCCURRENCE s
UMBRELLA FORM AGGREGATE s
OlllER THAN UMBRELLA FORM $
WCSTAT\J. 01}+,
WORKER'S COMPENSATION AND TORY LIMITS ER
EMPLOYERS' LIABILITY EL EACH ACCIDENT s
'!HE PROPRIETOR/ INCL EL DISEASE· POLICY UMIT s PAll'INEIISIEXl!Clll"M! OFFICERS ME: EXct EL DISEASE• EA EMPLOYEE S
OTHl:R
PROPERTY PHPG106436-C 2/1/2000 2/1/2001 CONTENTS: $5,000
I C S C
THIS CERTIFICATE OF INSURANCE SERVES AS EVIDENCE OF INSURANCE. *10 DAY NOTICE OF CANCELLATION APPLIES FOR NON-PAYMENT OF PREMIUM,
SECOND HARVEST FOOD BANK
OF ORANGE COUNTY
426A WEST ALMOND
ORANGE, CA 92688
SHOULD ANY OF TH!! ABOVE DESCRIBED POLICIES BE CANCEi.LSD BeRJRE THE EXPIRATION DATE THEREOF, THE! ISSUINCl COMPANY WlLL ENDEAVOR TO MAJL ~ DAYS WRITTEN NOTICETO THECERTIF!CATEHOLDERNAMEDTO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO 0BUGATJON OR LIABILITY OF ANY KIND UPON THE COMPANY ITS AGENTS OR REPRESENTATIVES.
Item: 6
239
.
State Farm Mutual Automob1. ~surance Company
31303 Agoura Road
Westlake Village CA 91363
AUTO RENEWAL
1997 FORD F150
:~ PO!-[CY NUMBER DATE DUE PLEASE PAV THIS AMOU
1t1 C97 5954-D22-75 OCT 22 1999 to APR 22 2000 OCT 22 1999 $300.23 1---..;...:..,;__..;;_.,;_.;;.,= ___ ..__________ -------.----,,----'"--- .---::---------=---- • '1 Coverages and Limits Premlu1
A Liability
Bodily Injury 100,000/300,000
Property Damage 50,000 161. f
C Medical Payments 5,000 13. (
D 500 Deductible Comprehensive 14.E
G 500 Deductible Collision 80.£
H Emergency Road Service 3. C
II ,luril,l,llm 1,1111ll1111111 ,lull111lml1 In lmllllml R1 Car Rental/Travel Expense 10. 7 u Uninsured Motor Vehicle
Y~ur premium Is based on the following ••• If not com~c ·, contact your agent. 1997 FORD F150 VIN 1FTDF1 /22VNA23416
Bodily Injury 30,000/60,000 13.E
U1 Uninsured Motor Vehicle
Property Damage 2.~
Cl.:iaa 083HOZ1 t Amount Due '$300.Z
Driving Safety Record Rate Level A+ (See description on back).
Driven over 71500 miles annually. {National average is 10,000 miles annually.)
Principal driver or spouse has at least 49 years of driving experience. No unmarried driver in your household with less than 9 years or driving experience unless rated as a principal operator of another car insured with State Fa.rm.
Pleasure use or commuting to and from work or school.
Your premium has already been adjusted
by the following:
Premium Reductions
Multicar
Air Bags
Driving Safety Record
California Good Driver
69.9 4.5
335.B
75,0
You may be eligible for additional discounts.
See the enclosed insert for more information.
Mature Driver
CONVENIENT PAYMENT OPTION: You may use one of State Farm's alternate payment plans which divides your present premium into two separate payments.
You may pay one half of the amount due, $150.11, plus a handling charge of $2.00. The amount due on OCT 22 1999 will be $152.11 .
The remaining half will be due on DEC 21 1999. We'll send you a reminder notice.
We nlso have available a plm1 to let you pay your premium in monthly installments. For details on this plan and to determine if you qualify, please contact your Slate Farm agent.
The rollowi11g list of drivers is shown for informational purposes only and does not extend or expand coverage beyond that contained in this autoniobile policy. Our records indicate the persons listed below are the only licensed drivers reported to us:
RAY HAVERT, GERALDINE HAVERT.
If the above information is inaccurate or incomplete, please contact your agent immediately to make corrections.
Tk,,l.r fer 1:/,tirj·«J'J'.:."W, jb.t ...
Aqcmt JIM DOHERTY
To/eµhono (949)583-0411
SAODLEBACK COMMUNITY OUTREACH
23011 MOULTON PKWY., B-5
LAGUNA HILLS, CA 92653-1222
(949) 380-8144
See reverse side far important information.
Please keep this part for your record.
Prepared SEP 17 1999
Item: 6
240
J
• Saddleback Community Outreach
Annual Budgets for Years 2000, 2001 & 2002
Revised December 3, 2000
Year2000 Year Year
Account Description Year end 2001 2002
Number Estimates Budget Budget
(rev 12/03/00)
INCOME
1G Grants $186.4 $250.0 $260.0
1B Businesses $11.3 $15.0 $25.0
1C Faith Communities $32.6 $40.0 $40.0
1F Fund Raising (less expenses) $73.0 $100.0 $100.0
11 Individuals $197.5 $70.0 $70.0
10 Organizations $12.6 $15.0 $25.0
1R Rental loan repayment $10.0 $15.0 $25.0
1T Rental Income $40.3 $70.0 $55.0
1M Others/Gifts/Adjusbnents $211.3 $0.0 $0.0
TOTAL INCOME sns.o $575.0 $600.0
2 EXPENSES
2 Aid to Clients
2F Food Cash outlay $19.3 $21.2 $23.2
2HR Rental Assistance $126.1 $144.0 $144.0
2HT Transitional Housing $55.3 $60.8 $66.9
2l Lodging $4.2 $4.6 $5.0
2M Medical $1.0 $1.1 $1.2
2S Support Services $5.3 $5.8
2T Transportation $5.7 $6.3 $6.8
2U Utilities $30.6 $33.7 $36.7
20 Others $16.9 $18.6 $20.3
2 Total Aid to Clients $264.4 $298.1 $304.2
3 Operating Expense
3C Coordinator expense (JVC) $2.5 $2.8 $3.0
30 Dues/Subscriptions $2.9 $3.2 $3.5
3ER Equipment/Relocation $0.1 $0.1 $0.1
3G Grants Expense $1.7 $1.9 $2.0
31 Insurance $11.7 $12.9 $14.0
30 Office Suppffes, postage $12.9 $14.2 $15.5
3Payroll Payroll $33.3 $34.0 $34.0
3PF Professional Fees $4.0 $4.4 $4.8
3PR Public relations 7.0 $7.7 $8.4
3R Rent $9.4 $10.3 $11.3
3T Taxes, Corporate & Payroll $3.2 $3.6 $3.8
3U Utilities $7.5 $8.3 $9.0
3V Volunteer Expense $1.7 $1.9 $2.0
30THER Others $2.9 $3.2 $3.5
3b Bank Expense $0.0 $0.0 $0.0
3 Total Operating Expense $100.8 $108.3 $115.0
Operating Exp to Income % 13.01% 18.83% 19.17%
TOTAL EXPENSE $365.2 $404.4 $419.2
NET ORDINARY INCOME $409.8 $170.8 $180.8
Acquisition of Condos $200.0 $370.0 $370.0
file: 2000 financial data\budgels for 2001 & 2002, sheet 1 dee 3 'OD Item: 6
241
..
§570.502
agencies, subrecipients, or con·tractors
does not relieve the recipientf or this re-
. sponsibility. The recipient is also re
sponsible for determining the a.dequa.cy
or performance under subrecipient
agreements a.nd procurement con
tracts, a.nd for ta.king appropria.te ac
tion when perform.a.nee problems arise,
· such as the· actions· described in
§ 570.910. Where a. ··umt of genera.I local
government is pa.rticipa.ting with. or as
part or, an urban county, or as part of
a. metropolita.n city, the recipient is re
sponsible for a.pplying to the unit of
general local government the same re
quirements as are a.pplica.ble to
subrecip1ents, except that the .nve-yea.r
period identified under §570.503(b)(8)(1)
shall begin with the da.te tha.t the unit
of general· local government is no
longer considered by HUD to be a part
of the metropolitan city or urba.n coun
ty, as applicable, instead of the date·
that the subrecipient agreement ex-
pires. ·
[53 FR 8058, Mar. 11, 1988, as amended at 57
FR 27120, June l'l, 1992)
§ 670.502 Applicability of unlf'orm. ad
minhltrat1ve requirements..
(a.) Recipients and subrecipients
which are governmental entities (in
cluding public agencies) shall comply
with the requirements and· standards of
0MB Circular No. A-87, 0 Princlples for
Determining Costs Applicable to
Grants and Contracts with State, Local
and Federally recognized Indian Tribal
Governments". 0MB Circula.r A-128,
"Audits or State a.nd Local Govern
ments" (implemented a.t 24 CFR part
44) and with the following sections or 24
CFR pa.rt 85 "Unirorm Administra.tive
Requirements for Gra.nts and Coopera.
tive .Agreements to State and Local
Governments":
(1) Section 85.3. 0 Definltions";
(2) Section 85.6, 11 Except1ons":
(3) S.ection 85.12, "Specia.l rra.nt or
subgrant conditions :for 1h1gh-risk 1
grantees";
(4) Section 85.20, "Standards tor fi
nancial management systems," except
paragraph (a);
(5) Section 85.21, "Payment, 11 except
as modified by § 570.613;
(6) Section 85.22, "Allowa.ble costs";
(7) Section 85.7.6, "Non-federa.l au
dits";
24 CFR Ch. V (4-1-95 Edltlo~)
·(S) Section 85.32, "Equipment," ex
cept in all ca.ses in which the eqUip.
ment is sold, the proceeds shall be pro
gram income:
(9) Section 85.33, usupplies";
(10) Section 85.34, "Copyrights":
(11) Section 85.35, "Suba.wards to
deba.r+ed ~d suspende_d parties";
(12) Section 85.36, 1!~ourement," ex-
cept para.gra.ph (a.): · - . .
(13) Section 85~37, "Subgra.nts";
(14) Section 85.40, "Monitoring and
reporting program performance,.. ex
cept paragraphs (b) through (d) and
paragra.ph en:
(15) Section 85.41. 11 Fina.ncia.l report
ing," except pa.ra.gra.phs (a.), (b), a.nd (e);
(16) Section 85.42, "Retention and ac
cess requirements for records," except
tba.t the period shall be four years:
(17) Section 85.43, "Enforcement":
(18) Section 85.44. 0 Terminatlon for
convenience";
(19) Section 85.61 "Later disallow
a.nces and adjustments" and
(20) Sectlon 85.52, °Collectlon or
a.mounts due."
(b) Subreciplents, except
subreciplents th&t are governmental
entities, shall compiy With the require
ments and sta.nda.rds of 0MB Clrcula.r
No. A-122, ucost Principles for Non
profit Organiza.tions," or OM:B Circular
No. A-21. °Cost Principles ror Edu
cational Institutions," as applicable,
and 0MB Circular A-133, HAudits or In
stitutions or Higher Education a.nd
Other Nonpront Institutions" (a.s set
forth in 24 CFR pa.rt 45). Audits aha.ll be
conducted annua.lly. Such
aubrecipients shall a.lso comply with
the following a.ttachments to 0MB Cir
cula.r No. A-110:
(1) Attachment A, "'Ca.sh Deposi
tories", except for para.gra.ph 4 con
cerning deposit insurance;
(2) Attachment B, "Bonding and In
surance";
· (3) Atta.chment C, "Retention and
Custodial Requirements for Records",
except that in lieu of the provisions in
paragraph 4 , the retention period for
records ;>ertaimng to individual CDBG
activities starts from the date or sub
miaslon of the annual performance a.nd
evalua.tlon report. aa preBCribed in
§570.507, in which the specific a.ctlvity
is reported on for the final time:
174
ATTACHMENT2
Item: 6
242
.,
Ofc. of Asst. Secy., Comm. Planning, Develop., HUD §570.503 (4) Attachment F, "Sta.nda.rds for Fi
nancial Management Systems," except
tor para.gra.ph 2(h) which is superseded
by 0MB Circula.r A-133, "Aucilts of In
stitutions of Higher Education 'and
Other Nonprofit Institutions;"
(5) Attachment H. 11Monitoring a.nd
Reporting ProS'I'.~ Performa.n_ce",
Para.graph 2:
.. (6) Attachment N, "Property Man
agement Standards", except for para
graph 3 concern!Dg the sta.nda.rds for
real property, and except tha.t para
g:ra.phs 6 a.nd 'l are modified so ths.t-
·ci.j in all cases in which persona.I
property is sold, the proceeds shall be
programincome,a.nd
(11) Personal property not needed by
the subrecipient for CDBG activities
shall be transferred to the recipient for
the CDBG program or sha.11 be reta.1ned
after compensating the recipient; a.nd
(7) Attachment 0, "Procurement
Standards."
[53 FR 8058, Ma.r. 11, 1988, a.s a.mended at 57
FR 33256, July Zl. 1992; 60 FR 1916, Jan. 5,
1995]
t 670.503 Agreements with
subreclplents.
(a) Before cilsbursing any CDBG funds
to a subrecipient, the recipient shall
sign a written agreement with the sub
reclplent. The agreement shall remain
in effect during any .period that the
subreclpient bas control over CDBG
funds, inclucilng program income.
(b) At a minimwn, the written agree
ment with the subrecipient shall inM
elude provisions concerning- the follow
ing following items:
(1) Statement of work. The agreement
·shall include a. description of the work
to be performed, a. schedule for com
pleting the work, a.nd a budget. These
items shall be in sufficient detail to
provide a sound basis for the recipient
effectively to monitor performance
undex:-the agreement.
(2) Recorcis and reports. The recipient
shall specify in the agreement the par
ticular records the subrecipient must
maintain and the particular reports
the subrec!pient must submit in order
to assist the recipient 1n meeting its
recordkeeping a.nd reporting require
ments.
(3) Program income. The agreement
shall include the program income reM
quirements set forth in § 570.504(c).
(4) Unifonn administrative require
ments. The agreement shall require the
subrecipient to comply w1 th a.pplica.ble
uniform administrative requirements,
as descrlbed i~ § 570.502. . .
(5) · Other. program requirements. The
agreement shall require the sub- .
recipient to carry out each activity in
compliance with all Federal la.ws a.nd
regulations described in subpart K of
these regulations, except that:
(i) The subrocipient does not assume
the recipient's environmental respon
sibilities described at § 570.604; and
(11) The subrecipient does not assume
the recipient's responsibUity for initi
a.ting the review process under the pro
visions of 24 CFR part 52,
(6) Conditions for religious organiw
tfons. Where applicable, the conciltions
prescribed by HUD for the use of CDBG
funds by rell@ioua organizations shall
be included in the agreement.
(7) Suspension and termination. The
agreement sha.11 specify that, in ac
cordance with 24 CFR 85.43, suspension
or termination may occur if the sub
recipient materially falls to comply
with any tt-,rm of the award, and that
the a.ward may be terminated for conM
ven!ence in accordance with 24 CFR
85.44. (8) Reversion of a.ssets. The agreement
shall specify that upon its expiration
the subrecipient shall transfer to the
recipient any CDBG funds on hand a.t
the time of expira.tion . and any ac
counts receivable attributable to the
use of CDBG funds. It shall-also include
provisions designed to ensure that any
real property under the subrecipient's
control that wa.s acquired or improved
in whole or in pa.rt with CDBG funds
(1nclucilng CDBG funds provided to the
subreciplent in the form of a loan) in
excess of $25,000 is either;
(1) Used to meet one of the national
objectives in §570.208 (formerly
§ 570.901) until five yea.rs after expira
tion of the agreement, or for such
longer period of time as determined to
be appropriate by the recipient; or
(ii) Not used in accordance with paraM
graph (b)(B)(i) of this section, in which
event the subreclpient shall pay to the
recipient a.n- a.mount equal to the cur-
175
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243
..
\,.
J
otc. of Asst. Secy., Comm. Planning, Develop., HUD §570.600 with longer than normal repa.yment pe-
riods; or ·
(0) Provision or adminlstra.tive serv
ices in support of the rehabilitation
program by the participating financial
institution at no cost or at lower tha.n
a.otual cost.
. (c) Program income. Interest ea.med on
lump. sum dePQslts" and pa.ym.ents on .
loans ma.de from such· deposl;s are pro- .
gram income and, during the period of
the agreement, shall be used for reha
bilitation activities under the provi
sions of this section.
(d) Outstanding findings. Notwith
standing a.ny other provision or this
section, no recipient shall enter into a.
new agreement during any period of
time in which an audit or monitoring
11.nding on a previous lump sum
drawdown agreement rema.ins unre
solved.
Ce) Prior notification. The recipient
shall provide the HUD field office with
written notification or the a.mount or
funds to be distributed to a. private fi
na.nclal institution before distribution
under the provisions or this section.
(0 RecOTdkeeping requiTement.f. The re
cipient shall maintain 1n its mes &
copy or the written agreement and re
lated documents establishing contorm-
. ance with this section and concerning
performance by a flna.ncial imtitutlon
in a.ccordance with the agreement.
Subpart K-other Program
. Requirements
SOURCE: 53 FR 34456, Sept. 6. 1988. unless
otherwise noted.
f 670.600 General.
(a) Section 104{b) of the Act provides
that any grant under section 106 or the
Act shall be ma.de only 1f the grantee
certifies to the satisfaction of the Sec
retary, among other things, that the
grant 11wlll be conducted and adminis
tered in con!ormity with Pub. L. 88-352
and Pub. L. 90-284.'' and, further, that
the grantee "will comply with the
other provi&iom of thia title a.nd with
other . applicable laws." Section
104(e)(l) of the Act requires that the
Secretary determine with respect to
grants made pursuant to section 106(b)
(Entitlement Gra.nts) and 106(d)(2)(B)
(HUD-a.dmJnistered Small Cities
Grants), at least on an annua.l ba.sis,
among other things, 0 whether the
grantee has can-led out {its] certifi
cations in compliance with the require
ments and the primary objectives of
this title and with other applicable
laws * * *.11 Certa.in other statutes a.re
expressly ma.de a.pplica.ble to activities .
assisted under the Act by the Act it.:
self, while other laws· not referred to in
the Act may be applicable to such ac
tivities by their own terms. Certain
statutes or Executive Orders which
ma.y be applicable to activities assisted
under the Act by their own terms are
administered or enforced by govern
mental departments or agencies other
than the Secretary or the Department.
This subpart K enumera.tes laws which
the Secreta.ry will treat as applicable
to grants made under section 106 of the
Act, other tha.n grants to States made
pursuant to section 106(d) or the Act,
for purposes of the determinations de
scribed above to be made by the Sec
retary under section 104(e)(l) or the
Act, including statutes expressly ma.de
applicable by the Act and certain other
statutes and Executive Orders for
which the Secretary has enforcement
responslb1Uty. The absence or mention
herein or any other statute for which
the Secretary does not have direct en
forcement responsibility is not in
tended to be ta.ken as an indication
that, in the Secretary's opinion, such
statute or Executive Order is not appll
ca.ble to activities assisted under the
Act. For laws which the Secretary will
treat as a.pplicable to grants made to
States under section 106(d) or the Act
for purposes or the determination re
quired to be ma.de by the Secreta.ry
pursuant to section 104(e)(2) or the Act,
see §570.496.
(b) This subpa.rt a.lso sets forth cer
tain additional program requirements
which the Secretary has determined to
be applicable to gra.nts provided under
the Act as a matter or administrative
discretion.
(o) In.addition to grants ma.de pursu
ant to section 106(b) and 106(d)(2)(B) or
the Act (subparts D and F, respec
tively), the requirements or tbis sub
part X are a.pplioable to grants ma.de
. pursuant to sections 107 and 119 of the
Act (subparts E and G, respectively),
187
ATTACHMENT3
Item: 6
244
§570.601
a.nd to loans guarantee~~ pursuant to
subpartM.
f 570,601 Public Law 8B-852 and Public
Law 90-284; affirmatively further•
ing fa.Jr housing; Executive Order
11063.
Section 104(b) of the Act proVides
that any grant under section· 106 of the
Act shall be made only if the grantee
certifies to the satisfaction of the Sec
retary that the grant "will be con
ducted and administered in conformity
with Pub. L. 88-352 and Pub. L. 90-284
and the grantee will affirmatively fur
ther fair housing." Similarly, section
107 provides that no grant may be ma.de
under that section (Secretary's Discre
tionary Fund) or section 119 (UDAG) .
without satisfactory assurances tha.t
the grantee's progra.m will be con
ducted a.nd administered in conformity
with Pub. L. 88-352 and Pub. L. 90-284.
(a) "Pub. L. 88-352" refers to title VI
of the Civil Rights Act of 1964 (42
U.S.C. 2000d et seq.), which provides
that no person in l;he United States
shall on the ground of ra.ce, color, or
national origin, be excluded from par
ticipation in, be denied the benefits of,
or be subjected to discrimination under
any program or activity receiving Fed
eral financial assistance. Section 602 of
the Civil Rights Act of 1964 directs
each Federal department and agency
empowered to extend Federal financial
assistance to any program or activity
by wa.y of grant to effectuate the fore
going prohibition by issuing rules, reg
ulations. or orders of general applica
bility which shall be C0DSistent with
achievement of the statute authorizing
the financial assistance. HUD regula
tions implementing the requirements
of Title VI with respect to HUD pro
grams are contained in 24 CFR pa.rt 1.
(b) "Public La.w 90-284" refers to the
Fair Housing Act (42 U.S.C. 3601-20),
which states tha.t it 1s the policy of the
United States to provide, within con
stitutional limitations, for fair housing
throughout the United States and pro
hibits any person from discriminating
in the sale or rental of housing, the fi
nancing of housing, or the proVision of
brokerage services, including otherwise
ma.king unavailable or denying a dwell
ing to any person, because of race,
color, religion, sex, national origin,
24 CFR Ch. V (4-1-95 Edition)
handicap or familial status. The Fair
Housing Act further requires the Sec- ·
reta.ry to administer the programs and
activities relating to housing and
urban de,·elopment in a manner affirm
atively to further the policies of the
Fa.ir Housing Act. In accordance With
thi_s statutory direction, the Secretary
requires that grantees· administer all
programs a.nd ~ctivities related to
housing and community development
in a. ma.nner to affirmatively further
the policies of the Fair Rousing Act;
furthermore, section 104(b)(2) of the
Act requires that each grantee receiv
ing !Unds under section 106 of the Act
(entitlement or small cities grantees)
certify to the satisfaction of the Sec
retary that it will affirmatively fur
ther fa.fr housing. For each community
receiving a grant under subpart D of
this part, the certification that the
gra.ntee will a.fflrma.ti vely further fair
housing shall specifically require the
gra.ntee to assume the responsibiUty o!
fair housing planning by conducting a.n
analysis to identify impediments to
!air housing choice 'Within its jurisdic~
tion, taking appropriate actions to
overcome the effects of any impedi
ments identified through that analysis,
and ma.lnta.ining records reflecting the
analysis a.nd actions in this regard.
(c) Executive Order 11063, as amended
by Executive Order 1225£1, directs the
Department to take all action nec
essary and appropriate to prevent dis
crimina.ti on because of race, color, reli
gion (creed), sex, or na.tiona.l origin, in
the sale, leasing, rental, or other dis
position of residential property and re
lated facilities (including land to be de
veloped for residential ·use), or in the
use or occupancy thereof, if such prop
erty and related facilities a.re, a.mong
other things, provided in whole or in
part with the aid of loans, advances,
grants, or contributions agreed to be
made by the Federal Government. HUD
regulations implementing Executive
Order 11063 are contained in 24 CFR
part 107.
(5.3 FR 34456, Sept. 6, 1988, as amended a.t 54
FR 37411, Sept. 8, 1989; 60 FR 1917, Jan. 5,
1995]
§ 670.602 Section 109 of the Act.
(a.) Section 109 of the ·Act requires
that no .person in the United States
188
Item: 6
245
Ofc. of Asst. secy., Comm. Planning, Develop., HUD §570.602 . .
shall on the ground of race, color, na
tional origin or sex, be excluded from
pa.rticipa.tion in, be denied the benefits
of, or be subjected to discrimination
under, any program or activity funded
in whole or in part with community de
velopment funds ma.de available pursu
ant to the Act. For purpos~s . of this
section "program or activity" is de
fined as any .function conducted by an
identifiable a.dmlnistra.tive unit of the
recipient, or by a.ny Ullit of govern
ment, subrecipient, or private contrac
tor receiving community development
funds or loans from the recipient.
.. Funded in whole or in pa.rt with com
munity development funds" means
that community development funds in
a.ny amount in the form of grants or
proceeds from HUD guaranteed loans
have been transferred by the recipient
or a subrecipient to e.n identifiable ad
ministrative unit a.nd disbursed in e.
progra.m. or activity, In subsection (b)
of this section, "recipient" means re
cipient as defined in 24 CFR 1.2(f).
(b) Specific discriminatory actions
prohibited and corrective actions.
Cl) A recipient ma.y not, under any
program or activity to which the regu
lations of this part ma.y apply, d.lrectly
or through contractual or other ar
rangements, on the ground ·or race,
color, national origin, or sex:
(1) Deny a.ny individual any fa.cllities,
services, fina.Dcial a.id or other benefits
provided under the program or activ
ity.
(ii) Provide a.ny facilities, services,
financial aid or other benefits which
are different, or a.re provided in a. dif
ferent form, from that provided tooth
ers under the program or activity.
(111) Subject an individual to seg
regated or separate treatment in any
fac11ity in, or in any matter of process
related to receipt of any service or ben
efit under the program or activity.
(iv) Restrict an individual in any way
in access to, or in the enjoyment of,
any advantage or privilege enjoyed by
others in connection with facilities,
services, financial aid or other benefits
under the program or activity.
(v) Treat a.n individual differently
from others in determining whether
the individual satisfies a..ny adrn.ission,
enrollment, eligibility, membership, or
other requirement or condition which
the individual must meet in order to be
provided any facilities, services or
other benefit provided under the pro
gram or activity.
(vi) Deny an individual an oppor
tunity to participate in a program or
activity as an employee .
. (2) A recipient may not use criteria.
or m.ethods of administration which
ha.ve the effect of subjecting persons to
discrimination on the basis of ra.ce,
color, national origin, or sex, or have
the effect of defeating or substan tia.lly
impa.iring accomplishment of the ob
jectives of the program or activity
with respect to persons of a pa.rticula.r
race, color. national origin, or sex.
(3) A recipient, in determining the
site or location of housing or facilities
provided in whole or in part with funds
under this part, may not make selec
tions of such site or location which
have the effect of excluding persons
from, denYing them the benefits of, or
subjecting them to discrimination on
the ground of race, color, national ori
gin, or sex: or which have the purpose
or effect of defeating or substa.ntia.lly
impairing the accomplishment of the
objectives of the Act and of thls sec
tion.
(4)(1) In administering a program or
activity funded in whole or in part
with CDBG f'unds regarding which the
recipient· has previously discriminated
against persons on the ground of ra.ce,
color, national origin or sex, or if there
is sufficient evidence to conclude tha.t
such discrimination existed, the recipi
ent must ta.ke remedial affirma.tive ac
tion to overcome the effects of prior
discrimina.tlon. The word "previously"
does not exclude current discrimina
tory practices.
(11) In the absence of discrimination,
a recipient, in a.drn1nistering a. program
or activity funded in whole or in part
with funds ma.de available under this
part, ma.y ta.ke a.ny noncllscriminatory
affirmative action necessary to ensure
that the program or activity is open to
all without regard to race. color, na
tional origin or sex.
(iii) After a finding of noncomplia.oce
or after a. recipient has a firm basis to
conclude that discrimination has oc•
curred, a recipie~t shall not be prohib
ited by this section from ta.king any
action eligible under Subpart C to azne•
189
Item: 6
246
§570.603
liorate an imbalance in serVices or fa.
cilities provided to any geographic
area or specific group of persons within
its jw-isdiction, where the purpose of
such action is to remedy prior dis
criminatory practice or usage.
(5) Notwithstanding anything to the
contrary in this section, nothing con
tained herein shall be construed to pro
hibit any· recipient from maJnta.i~ng
or constructing separa.te living facili
ties or rest room facilities for the dif
ferent sexes. Furthermore, selectivity
on the basis or sex is not prohibited
when institutional or custodial serv
ices ca.n properly be performed only by
a member of the same sex as the recipi
ents of the services.
(c) Section 109 or the Act further pro
vides that any prohibition against dis
crimination on the basis of a.ge under
the Age Discrimination Act of 1975 (42
U.S.C. 6101 et seq.) or with respect to an
otherwise qualified handicapped person
a.s provided in section 504 of the Reha
bll1 ta.t1 on Act of 1973 (29 U.S.C. 794)
sha.11 also apply to any program or ac
tivity funded in whole or in part with
funds ma.de available pursuant to the
Act. HUD regula.tion5 1rnplemen ting
the Age Discrlmination Act are con
tained in 24 CFR part 146 and the regu
lations implementing section 504 are
contained in 24 CFR part 8.
§ 570.603 Labor standards.
. (a) Section llO(a) of the Act requires
tha.t all laborers and mechanics em
ployed by contractors or subcontrac
tors on construction work financed in
whole or in pa.rt with assistance re
ceived under the Act shall be pa.id
wages at rates not less than those pre
vailing on similar construction in the
locality as determined by the Sec
retary of Labor in accordance with the
Davis-Ba.con Act, as a.mended (40 U.S.C.
276a.-276a.-5). By reason or the foregoing
requirement, the Contra.ct Work Hours
and Safety Standards Act (40 U.S.C. 327
et seq.) also applies. However, these re-:
quirements apply to the rehabilit.<:.tion
of residential property only if such
property contains not less than 8 units.
With respect to the labor standards
specified in this section, the Secretary
of Labor has the authority and func
tions set forth in Reorganiz.a.t!on Plan
Number 14 of 1950 (5 U.S.C. 1332-15) and
24 CFR Ch. V (4-1-.95 Edition)
section 2 of the Act of June 13, 1934, as
amended (40 U.S.C. 276c).
(b) Under section llO(b) of the Act,
the requirements set out in para.graph
(a) of this section are inapplicable to
ind.1vidua.ls who volunteer their serv
ices under certain circumstances.
Grante.es,. subrecipients, contractors
and subcontractors shall -comply with
24 CFR part 70, which sets out the cir
cumstances under which volunteers
ma.ybe used.
(57 FR 14759, Apr. 22, 1992]
§ 570.604 Environmental standards.
Section 104(g) expresses the Intent
that "the policies of the National Envi
ronmental Policy Act or 1969 and other
provisions of la.w which further the
purposes of such Act (a.s specified in
reg-u.J.ations issued by the Sec
retary) * * * [be] most effectively im
plemented in connection with the ex
pend.1 ture or funds under" the Act.
Such other provisions or law which fur
ther the purposes of the National Envi
ronments.I Policy Act of 1969 are speci
fied in regulations issued pursuant to
section 104(g) of the Act and contained
in 24 CFR part 58. Section 104(g) also
provides that, in lieu of the environ
mental protection procedures other
wise applicable, the Secretary may
under regulations provide for the re
lease of funds for particular projects to
grantees who assume all of the respon
sib111ties for environmental review, de
cisionmaking, and action pursuant to
the National Environmental Policy Act
of 1969, .and the other provisions of law
specified by the Secretary as described
above, that would a.pply to the Sec
retary were he/she to undertake such
projects as Federal projects. Grantees
assume such environmental review, de
cisionma.king, and action responsibil
ities by execution of grant a.greements
with the Secretary. The procedures for
carrying out such environmental re
sponsibilities are contained in 24 CFR
part 68.
§ 570.605 National Flood Insurance
Program.
Section 202(a.) of the Flood D~saster
Protection Act of 1973 (42 U.S.c. 4105)
provides that no Federal officer or
agency shall approve any financial as
sistance for acquisition or Qonstruction
190
Item: 6
247
J
Ofc. of Asst. Secy., Comm. Planning, Develop., HUD §570.606 purposes (as defined under .section 3(a)
of said Act (42 U.S.C. 400(a.)), one year
a~er a. community has been formally
notified of its identification e.s a com
munity containing an area. of special
flood hazard, for use in any a.res. that
has been identified by the Director or
the Federal Emergency. MB.Da.gement
Agency as an area having special flood
hazards unless the community in which
such area. is situated is then participat
ing in the National Flood Insurance
Program. NotWithsta.nding the date of
HUD approval of the recipient's appli
cation (or, in the case of grants ma.de
unaer subpart D, the date of submis
sion of the grantee's consolidated plan,
in a.ccorda.nce with 24 CFR pa.rt 91),
funds provided under this part shall
not be expended for acquisition or con
struction purposes in an a.rea that has
been identified by the Federal Emer
gency Management Age.ncy (FEMA) as
having special flood hazards unless the
community in which the area is situ
ated is participating in the National
Flood Insurance Program in accord
ance with 44 CFR parts 59-79, or less
tha.n a. yea.r has passed since FEMA no
tification to the community regarding
such hazards; and flood insurance is ob
tained in accordance w1 th section
102(a) of the Flood Disaster Protection
Act of 1973 (42 U.S.C. 4001).
[53 FR a-4456, Sept. 6, 1988, a.s amended at 60
FR 1917, Jan. 5, 1995]
~ 570.606 Displacement, relocation, ac•
quisition, and replacement of hous
ing.
(a) General policy for minimizing dis
placement. Consistent with the other
goals and objectives or this part, grant,.
ees shall assure that they have taken
all reasonable steps to minimize the
displacement of persons (fa.miliee, indi
viduals, businesses, nonprofit organiza
tions, a.nd farms) as a result or activi
ties assisted under this pa.rt.
(b) Relocation assistance for displaced
persons at URA levels. (1) A displaced
person shall be proVided with reloca
tion assists.nee at the levels described
in, a.nd in accordance with the require
ments of, 49 CFR pa.rt 24 which con
tains the government-wide regulations
implementing the Uniform Relocation
Assistance and Real Property Acquisi-
tion Policies Act or 1970 (URA) (42
U .s.c. 4601-4655).
(2) Displaced person. (1) For purposes
of this paragraph (b), the term "dis
placed person" mea.ns any person (fam
ily, individual, business, nonprofit or
ganization, or farm) that moves from
real property, or moves his or her per
sonal property from rea.l_property. per-"
manently a.nd involuntarily, as a. direct
result of reha.bilita.tion, demolition, or
acquisition for an activity assisted
under this pa.rt. A permanent, involun
tary move for an assisted activity in
cludes a permanent move from real
property that is made:
(A) After notice by the grantee to
move permanently from the property,
1£ the move occurs on or after the date
or the initial submission to :mm of the
final • statement under 24 CFR
570.302(a.)(2) for activities under the en
titlement program; the initial submis
sion to HUD of an a.ppllcation for as
sistance under §§ 570.426, 570.430, or
570.435(d) that is later granted for ac
tl vities governed by the HUD-ad.minis
tered small cities program; the submis
sion to HUD of an application for as
sistance under § 570.458 that is later
granted for activities under the UDAG
program; the submission to HUD of an
application for assistance under part
570, subpart G (Special Purpose Grants)
that is later granted; or the submission
to HUD of a.n application for loan guar
antee assistance under §570. 701 that is
later provided for an activity under the
section 108 loan guarantee program.
(B) After notice by the . property
owner to move permanently from the
property, if the move occurs after the
date of the submission of a request for
financial assistance by the property
owner (or person in control of the site)
that is later approved for the requested
activity.
(C) Before the date described in para.
graph (b)(2)(1) (A) or (B) of this section,
if either HUD or the grantee deter
mines that the displacement directly
resulted from acquisition, rehabilita
tion, or demolition for the requested
activity.
(D) After the "initiation of negotia
tions" 1f the person is the tenant-occu
pant of a dwe111ng unit and any one of
the following three situations occurs:
191
Item: 6
248
...
§570.606
(1) The tenant has not been provided
with a reasona.ble opportunity to lease
and occupy a suita.ble decent, sa.re, a.nd
sanitary dwelling in the same building/
complex upon the completion or the
project under reasonable terms and
conditions, including a. monthly rent
that does not exceed the grea.ter or the
tenant's monthly rent a.nd estima.ted
. average utility costs before the init1-·
ation or negotia.tlons or 30 percent or
the household's average monthly gross
income; or
CZ) The tenant ls regulred to reloca.te
temporarily for the a.ctivity but (i) the
tenant is not offered payment for all
reasonable out-of-pocket expenses in
curred in connection with the tem
porary relocation, including the cost or
moving to a.nd from the t!mlpora.ry lo
ca.tion and any increased housing costs,
or other conditions or tbe temporary
relocation are not reasonable and (ii)
the tena.nt does not return to the build
ing/complex; or . ·
(3) The tenant is required to move to
another unit in the building/complex,
but is not offered reimbursement for
all reasonable out-of-pocket expenses
incurred 1n connection with the move.
(11) Notwithstanding the provisions or
para.graph (b)(2)(1) or this section, the
term "displaced person.. does not in
clude:
(A) A person who is evicted tor cause
based upon serious or repeated viola
tions or material terms or the lease or
occupa.ncy agreement. To exclude a
person on this ba.sis, the grantee must
determine tha.t the evtction wa.s not
undertaken for the purpose ot evading
the obliga.tion to provide relocation a.s
sistance under this section:
(B) A person who moves into the
property after the date of the notice
described in pa.ra.gra.ph (b)(2){1) (A) or
(B) or this section, but who received a.
written notice of the expected displace
ment before occupancy.
(0) A person who is not dlspla.ced a.s
described in 49 OFR 24.2(g)(2).
(D) A person who the gra.ntee deter.
mines is not displaced a.s a. direct result
or the acquisition, reha.bilita.tion, or
demolition for an assisted activity. To
exclude a. person on this basis, HUD
must concur in that determination.
(111) A grantee may, at any time, re
quest HUD to determine whether a. per-
24 CFR Ch. V (4-1-95 Edition)
son is a displa.ced person under this
section.
(3) Initiation of negotiations. For pur
poses or determining the type or re
placement housing assistance to be
provided under this para.graph, if the
displa.oement is the direct result or pri
vately undertaken rehabilitation, dem
olition, or acquisition or real ·propetty,
the term "initia:tlon of negptiatlons"
mea.ns the execution · or the grant or
loan agreement between the grantee
and the person owning or controlling
the real property.
(c) Residential antidi.splacement and re
location assistance plan. In accord.a.nee
with section l04(d) or the Act, ea.ch
grantee must a.dept, ma.ke public, a.nd
certify that it ls following a residential
antidisplacement a.nd relocation assist
s.nee pla.n providing one-for-one re
pla.cement units (pa.ra.gra.ph (c)(l) or
this section), and reloca.tlon assists.nee
(para.graph (c)(2) or this section). The
plan shall also indlca.te the steps tha.t
will be taken consistent with other
goals and objectives or this pa.rt to
minimize the d1spla.cement or r&m.1lies
and individuals from their homes and
neighborhoods as a. result or a.ny act,tvi
ttes assisted under this pa.rt,
(1) One-for-one replacement of lowhnod
erate-fncome dwelling unit.!. (1) All occu
pied and va.cant oocupia.ble low/mod
era.te-income dwelUng units tha.t a.re
demolished or converted to a. use other
tha.n aa low/modera.te-inoome dwelling
units in connection with a.n activity
assisted under this part must be re
pla.ced with low/moderate-income
dwe111ng units.
(ii) Replacement low/modera.te-in
come dwelling units ma.y be provided
by a.ny government agency or private
developer, and must meet the following
requirements:
(A) The units must be located within
the grantee"s Jurisdiction. To the ex
tent feasible and consistent with other
sta.tutory priorities, the units shall be
located within the same neighborhood
as the uni ts replaced.
(B) The units must be sufficient in
number and size to house no fewer than
the nwnber or occupants who could
ha.ve been housed in the units that a.re
demolished or converted. The number
or occupants who could have been
housed in units shall be determined in
192
Item: 6
249
. .
..
otc. of Asst. Secy., Comm. Planning, Develop., HUD §570.606 accordance with applicable local hous
ing oocupa.noy codes. The grantee ma.y
not replace those units with smaller
units (e.g., a. 2-bedroom unit with two
I-bedroom units), unless the grantee
has provided the information required
under para.graph (o)(l)(iil)(G} of this
section.
(C) The units must be· provided in
stands.rd conditiQn. Replacement low/
moderate-income dwelling units may
include units that have been raised to
stands.rd from substandard condition if
(l) no person was displaced from the
unit as a direct result of an assist a.o
tivity (see definition of displaced per
son in paragraph (c)(3)(ii) of this sec
tion, and (2) the unit wa.s vacant for a.t
lea.st three months before execution of
the agreement between the grantee and
the property owner.
(D) The Units must initially be ma.de
a.va.ila.ble for occupancy a.t any time
during the period beginning one yea.r
before the grantee's submission of the
information required under para.graph
(c)(l)(iii) of this section a.nd ending
three yea.rs after the commencement of
the demolition or rehabilitation relat
ed to the conversion.
(E) The units must be designed to re
ma.in low/moderate-income dwelling
units for at least 10 years from the date
of initial occupancy. Replacement low/
moderate-income dwelling units may
include, but a.re not limited to, public
housing, or existing housing receiving
Section 8 project-based assistance
under the United States Housing Act of
1937.
(111) Before the grantee enters into a
contract committing it to provide
funds under this part for any activity
that will directly result in the demoli
tion of low/moderate-income dwelling
units or the conversion of low/mod
erate-income dwelling uni ts to another
use, the grantee must make public, and
submit the following information in
writing to the HUD Field Office for
moni taring- purposes:
(A) A description of the proposed as
sisted activity;
(B) The location on a map and nwn
ber of dwelling units by size (number or
bedrooms) tha.t will be demolished or
converted to a use other than for low/
moderate-income dwelling units as a
direct result of the assisted activity;
(C) A time schedule for the com
mencement and completion of the dem
olition or conversion;
CD) The location on a. map and the
number of dwelling units by siz.e (num
ber of bedrooms) that will be provided
a.s replacement dwelllng units. I! such
data a.re not available at the time of
the general submission, the submission
shall identify .,-the.~ gen~ra.l location on
an area ma.p and the approximate num
ber of dwelling qnits by size, and infor
mation identifying the specific loca
tion and number or dwelling units by
size sha.11 be submitted and disclosed to
the public as soon as it is ava.ila.ble;
(E) The source of funding e.nd s. time
schedule for the provision or replace
ment dwelling units;
CF) The basis for concluding tha.t
ea.ch replacement dwelling unit will re
ms.in a. low/moderate-income dwelling
unit for at lea.st 10 yea.rs from the date
of initial occupancy; and
(G) Information demonstrating that
a.ny proposed replacement of dwelling
units with smaller dwelling units (e.g.,
a 2-bedroom unit with two 1-bedroom
units) is consistent with the needs
a.nalysis contained in the !IDD-a.p
proved Comprehensive Housing Afford
ability Strategy. A grantee tha.t is not
required to submit a. Housing Assist-.
a.nee Pla.n to HUD must submit lnfor
ma.tion demonstrating that the pro
posed replacement is consistent with
the housing needs of lov·- and mod
erate-income households in the juris
diction.
(iv)(A)- The one-for-one replacement
requirement of this paragraph (c)(l)
does not apply to the extent the Field
Office determines, based upon objective
da.ta, that-there is s.n adequate supply
of vacant low/moderate-income dwell
ing units in standard condition avail
able on a nondiscrlminatory basis
within the gra.ntee's jurisdiction. In de
termining the a.dequa.cy of supply, HUD
will consider whether the demolition or
conversion of the low/moderate-income
dwelling units will have a ma.teria.l im
pa.ct on the a.bili ty of low• and mod
erate-income households to find suit
able housing. HUD will consider rel
evant evidence of housing supply and
demand including, but not limited to,
the following factors: the housing va
cancy rate 1n the jurisdiction; the
193
Item: 6
250
. '
§570.606
number of vacant low/moderate-income
dwelling units in' the Jurisdiction (ex
cluding units that will be demolished
or converted); the number of eligible
fa.milies on waiting lists for housing as
sisted under the United States Housing
Act of 1937 in the jurisdiction; the
. needs a.naJysis contained in any appli
cable HU'D:-approved Comprehensive
Housing Affordability. Strategy; and
relevant past or predicted demographic
changes.
CB) RUD may consider the supply of
vacant low/moderate"."income dwelling
units in a. stand.a.rd condition available
on a nondiscriminatory basis· in a.n
area that is larger than the grantee's
jurisdiction. Such add! tiona.l dwelling
units shall be considered if the Field
Office detennines tha.t the u.n.1ts would
be suitable to serve the needs of the
low- and moderate-income households
that could be served by the low/mod
erate-income dwelling 'units that a.re to
be demolished or converted to another
use. HUD will base this determination
on geographic a.nd demographic fac
tors, such as location and access to
places of employment and to other fa
cili tles.
(C) The grantee must submit the re
quest for determination under this
para.graph (c)(l)(iv) directly to the
Field Office. Simultaneously with the
submission of the request, the grantee
must make the submission public a.nd
inform interested persons that they
have 30 days from the date of submis
sion to provide to HUD additional in
formation supporting or opposing the
request.
(2) Relocation assistance under section
104(d) of the Act. Under section 104(d),
each "displaced person" (defined in
:para.graph (c)(3)(ii) of this section) 1s
entitled to choose to receive either as
sistance at URA levels (see para.graph
(b) of this section) or the folloWing re
location assistance:
(i) Advisory services at the levels de
scribed in 49. CFR pa.rt 24, subpart C
(General Relocation Requirements).
Tenants shall be advised of their rights
under the Fair Housing Act (42 U.S.C.
3601-19) and of replacement housing op.
portunities in such a. manner that, to
the extent feasible, will provide a
choice between relocating within their
neighborhoods and other neighbor-
24 CFR Ch. V (4-1-95 Edition)
hoods consistent with the grantee's re
sponsibil1ty to affirmatively further
!a.ir bowing;
(ii) Payment for moving expenses at
the levels described in 49 C°FR part 24,
subpart D.
(ii!) The reasonable a.nd nel}essa.ry
cost of-any security deposit required to
rent the replacement dwelling unit,
and for credit checks required to rent
or purchase the repla.cemeot dwelling
unit.
(iv) Interim living costs. The grantee
shall reimburse a person for actual rea.
sona.ble out-of-pocket costs incurred in
connection with temporary relocation,
including moving expenses and in
creased housing costs, if (A) the person
must relocate temporarily because
continued occupancy of the dwelling
unit ~onstitutes a substantial danger
to the health or safety of the person or
the public, or (B) the person is dis
placed from a. "low/moderate-income
dwelling unit," none or the comparable
replacement dwelling units to which
the person has been referred qualifies
as a low/moderate-income dwelling
unit (defined in pa.rs.graph (c)(3)(1il) of
this section). and a. suita.ble low/mod
erate-income dwell1ng unit is sched
uled to become available iJJ. accordance
with pa.ragra.ph (c)(l) of this section.
(Because a. "comparable replacement
dwelling unit" ma.y be ma.de affordable
to a person through a rental assistance
payment and its market rent may ex
ceed the Fair Market Rent (FMR)
under the Section 8 Existing Housing
Program, it may not meet the defini
tion of a "low/moderate-income dwell-
ing unit.") ·
(v) Replacement housing assistance.
Persons a.re eligible to receive one of
the following two forms of replacement
housing assistance;
(A) Each person must be offered rent
al assistance equal to 60 times the
amount necessary to reduce the
monthly rent and estimated average
monthly cost of ut111ties for a replace
ment dwelling (comparable replace
ment dwelling or decent, sa.fe, and sani
tary replacement dwelling to which the
person relocates, whichever costs less)
to the "Total Tenant Payment," a.a de
termined under § 813.107 of this title.
All or a. portion of this assistance may
be offered through a certificate or
194
Item: 6
251
Ofc. of Asst. Secy., Comm. Planning, Develop., HUD §570.606 housing· voucher for rental ,assistance
(if available) provided through the
Local Public Agency (PHA) under Sec
tion 8 of the United States Housing Act
of 1937. If a. Section 8 certificate or
housing voucher is provided to a.· per
son, the grantee must provide referrals
to comparable repla.c_ement dwelling
units where the owner is willing to par
ticipate in the Sect!on 8 Existing Hous-.
ing Program. To the extent that ca.sh
a.ssista.nce is provided, it ma.y, at the
discretion of the grantee, be in either a.
lump sum or in installments.
(B) If the person purchases a.n inter
est in a. housing cooperative or mutual
housing association and occupies a de
cent, safe, and sanitary dwelling in the
cooperative or_ association, the person
.may elect to receive a lump sum pay
ment. This lump sum payment shall be
equal to the capitalized value of 60
monthly installments of the a.mount
that is obtained by subtracting the
"Total Tenant · Payment," as deter
mined under §813.107 of this title, from
the monthly rent and estimated aver
age monthly cost of util1t1es a.ta. com
parable replacement dwelling unit. To
compute the capitalized value, the in
sta.llmen ts shall be discounted at the
rate of interest pa.id on passbook sav-
-ings deposits by a federally insured
bank of savings and loan institution
conducting business within the grant
ee's jurisdiction. To the extent nec
essary to minimize hardship to the
household, the gra.ntee shall, subject to
appropriate safeguards, issue a. pay
ment in advance of the.purchase of the
interest in the housing cooperative or
mutual housing association.
(C) Displaced lowtmodera.te income
ten.ants shall be advised of their right
to elect relocation assistance pursua.nt
to the Uniform Relocation Assists.nee
and Real Property Acquisition Policies
Act of 1970 and the regulations appear
ing at 49 CFR part 24 a.s an a.lternative
to the relocation a.ssistance available
under paragraph (c)(2) of this section.
(3) Definitions. For purposes·of provid
ing section 104(d) assistance under this
para.graph (c):
(1) Comparable replacement dwelling
unlt. The term "comparable replace~
ment dwelling unit" means a dwelling
unit ths.t (A) meets the criteria of 49
CFR 24.2(d)(l) through (6); a.nd (B) is
available at a. monthly cost for rent
plus estimated average monthly utility
costs that does not exceed the "Total
Tena.nt Payment" determined under
§813.107 of this title, after taking into
account any rental a.ssista.nce the
household would receive.
(ii) Displaced person. (A) The term
"displaced person" mea.ns any low/
moderate-income family or· individual
that moves from real property, or
moves his or her personal property
from real property, permanently and
involuntarily, as a. direct result of the
conversion of a. low/moderate-income
dwelling unit (defined in paragraph
(c)(3)(iv) of this section) or demolition
in connection with a.n activity assisted
under this part. A permanent in volun
tary move for an assisted activity in
cludes a permanent move from real
property that is ma.de:
(1) After notice by the grantee to
move perma.nently from the property,
if the move occurs after the initial sub
mission to HUD of the final statement
under 24 CFR 570.302(a)(2) for activities
under the entitlements progra..m: the
initial submission to HUD of an appli
cation !or assistance under § 570.426,
§570.430, or §570.435(d) tha.t is later
granted !or activities governed by the
HUD-adn11nlstered small cities pro
gram; the submission to HUD of a.n a.p
plica.tlon for assistance under § 570.458
that is later granted for a.ctivities
under the UDAG program; or the sub
mission to HUD of an application for
loan g-ua.ra.ntee assistance under
§ 570. 701 that is later provided for the
activity under the section 108 loan
guarantee program.
(2) After notice by the property
owner, to move permanently from the
property, if the move occurs after the
date of submission of a request for fi
nancial assistance by the property
owner (or person in control of the site)
that is later approved for the requested
actiVity.
(J) :Before the date described in para
graph (c)(3)(11)(A) (J) or (2) of this sec
tion, if either HUD or the grantee de
termines that the displacement di
rectly resulted from the conversion of
a low/modera.te-inoome dwelling unit
or demolition in connection with the
requested activity.
195
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252
. .
§570.606
(4') After the execution of_ .. the agree
ment by the grantee covering the reha
bilitation or demolition, if the person
is the tenant-occupant of a. dwelling
unit a.nd any one of the following three
situa.tions occurs:
(i) The tenant has not been provided
with a. reasonable opportunity to lease
and occupy a. suitable decent, safe, and
~ta.ry: dwelling in the sa.me building/
complex upon completion of the
project, under rea.sona.ble terms and
conditions, including a. monthly rent
that does not exceed the greater of the
tenant's monthly rent a.nd estima.ted
average utflity costs before the execu
tion of such agreement, or the "Total
Tenant Payment" for the person as de
termined under § 813.107 of this title; or
(ii) The tenant, required to relocate
temporarily for the activity, does not
return to the building/complex; a.nd ei
ther the tenant is not offered pa.ymen t
for a.11 · reasonable out-of-pocket ex
penses incurred in connection with the
tempora.ry location (including the cost
of moving to and from the temporary
location and any increased housing
costs), or other conditions of the tem
pora.ry relocation a.re not reasonable;
or
(i#) The tenant is required to move to
another unit in the building/complex,
but is not offered reimbursement for
all reasonable out-of-pocket expenses
incurred In connection with the move.
(B) Notwithstanding the provisions of
pa.rs.graph (c)(3)(1i)(A) of this section,
the term "displaced person" does not
include:
(J) A person who is evicted for ca.use
based upon serious or repeated viola
tions of material terms of the lease or
occupancy agreement. To exclude a.
person on this basis, the grantee must
determine that the eviction was not
undertaken for the purpose of evading
the obliga.tion to provide relocation as
sistance under this section:
(2) A person who moves into the prop
erty after the date of the notice de
scribed in paragraph (c)(3){11)(A) (J) or
(2) of this section, but received a. writ
ten notice or the expected displace
ment before commencing occupancy.
(3) A person who is not displa.ced as
defined under 49 CFR 24.2(g)(2).
(4) A person who the grantee deter
mines is not displaced as a direct result
24 CFR Ch. V (4-1-95 Edition)
of the conversion of a low/moderate-in
come dwelling or demolition in connec
tion with an assisted a.ctivity. To ex
clude a. person on this basis, HUD must
concur in tha.t determination.
(5) A grantee ma.y, at a.ny time, re
quest HUD to determine whether a per
son is a. displs.ced person under .this
paragraph (c).
(111) · Lo~lmoderate-income dwelling
untt. The term "low/moderate-income
dwelling unit" means a. dwelling unit
with a. market rent (including utility
costs) that does not exceed the a.pplica.
ble Fair Market Rent (FMR) for exist
ing housing established under 24 CFR
pa.rt 888, except tha.t the term does not
include & unit that is owned and occu
pied by the same person before a.nd
a.fter the assisted rehabilitation.
(iv) Standard condition and sub
standard condition suitable for rehabilita
tion. If the gra.ntee has a HUD-approved
consolidated plan, the definitions of
"stands.rd condition" and "substandard
condition suitable for rehabllitation"
established in the pla.n will apply,
{v) Vacant occupiable dwelling untt,
The term .. vs.cant occupiable dwelling
unit'' mea.ns a. va.oa.nt dwelling unit
that is in a sta.ndB.rd concll tion; a va
cant dwelling unit that is in a sub
sta.nda.rd condition, but is suitable for
rehabilitation; or a. dwell1ng unit in
any condl tion tha.t has been occupied
(except by a squatter) a.t a.ny time
within the period beginning one year
before the da.te of execution of the
agreement by the grantee covering the
rehabilitation or demolition.
(d) Optional relocation assistance.
Under section 105(a)(ll) of the Act, the
grantee ma.y provide relocation pay
ments a.nd other relocation assistance
to persons displaced by a.ctivities that
are not subject to pa.ra.gre.ph (b) or (c)
of this section. The grantee may also
provide relocation assistance to per
sons receiving assistance under para.
graphs (b) or (c) of this section a.t lev
els in excess of those required by these
paragraphs. Unless such assists.nee 1s
provided under State or local law, the
grantee shall provide such assistance
only upon the basis or a written deter
mination tha.t the assistance is appro
priate (see 24 CFR 570.201(1)). The
grantee must adopt a. written policy
available to the public tha.t describes
196
Item: 6
253
. .
Ofc. of Asst. Secy., Comm. Planning, Develop •• HUD §570.608 the reloca.tion assistance.• tha.t the
grantee has elected to :furnish and pro
vides for equal reloca.tion assists.nee
within ea.ch class of displa.ced persons.
(e) .Acquisition of real property. The a.c
quisi tion of rea.l property for a.n as
sisted a.otivity is subject to 49 CFR
pa.rt 24, subpart B. .
(f) .Appeals. If·a person disagrees with
the gra.ntee's determination con·cerning
the person's eliglb11ity for, or the
a.mount of, a. reloca.tion payment under
this section, the person ma.y file a writ
ten a.ppea.l of tha.t determina.tion with
the grantee. The appeal procedures to
be followed a.re described in 49 CFR
24.10. In addition, a. low- or modera.te
income household tha.t has been dis
placed from a dwelling may file a writ
ten request for review of the grantee's
decision to the HUD Field Office.
(g) Res,:,omibility of grantee. (1) The
gra.n tee is responsible for ensuring
compliance with the requirements or
this section, notwithstanding a.ny third
party's contra.ctua.l obligation to the
grantee to comply with the proviBions
of this section.
(2) The cost of a.ssista.nce required
under this section ma.y be pa.id from
local public funds, funds provided
under this pa.rt, or funds a.vaila.ble from
other sources.
(3) The grantee must maintain
records in sufficient detail to dem
onstrate compliance with the provi
sions or this section.
(Approved by the Office or Management and
Budget under control number 2506-0102)
[55 FR 29312, July 18, 1990, as amended at 56
FR 56128, Oct. 31, 1991; 60 FR 191'1, Jan., 5,
1995}
t G70,807 . Employment and contracting
opportunities.
(a) Grantees shall comply with Exec
utive Order 11246, as a.mended by Exec
utive Order 12086, and the regulations
1cisued pursuant thereto (41 CFR cha.p-.
ter 60) which provide tha.t no person
shall be discrimina.ted aga.inst on the
basis of race, color, religion, sex, or na
tional origin 1D all phases of employ
ment during the performa.nce of Fed
eral or federally a.asisted construction
contracts. As specif'ied 1n Executive
Ord.er 11246 a.nd the implementing regu
lations, contractors a.nd subcontractors
on Federal or federally assisted con-
struction contracts shall take affirma
tive action to ensure fa.ir treatment in
employment, upgrading, demotion or
transfer, recruitment or recruitment
advertising, layoff or termination,
ra.tes o! pa.y, or other forms or com
penss.tion a.nd selection for training
and apprenticeship. ·
(b) Grantees shall comply with sec
tion 3 o! the Housing and Urban Devel
opment Act of 1968 (12 U.S.C. 1'10lu) a.nd
the implementing regulations in 24
CFR pa.rt 135. Section 3 requires that
employment and other economic op
portunities a.rising 1:n connection with
housing reha.bilita.tlon, housing con
struction, or other public construction
projects shall, to the grea.test extent
!ea.sible, and consistent With existing
Federal, Sta.te, a.nd loca.l la.ws and reg
ula.tions, be g1 ven to low- a.nd very low
income persons.
(53 FR 34456, Sept. 6, 1988, aa a.mended at li9
FR 33894, June 30, 1994)
I G70.608 . Lead-bued paint:
(a) Prohibition agaimt the we of lead
based paint. Section 40l(b) of the Lea.d
Ba.sed Pa.int Poisoning Prevention Act
(42 U.S.C. 4831(b)) directs the Secretary
to prohibit the use of lead-ba.sed paint
· in residential structures constructed or
rehabilita.ted with Federal a.ssistance.
Such prohibitions a.re contained in 24
CFR pa.rt 85, subpart B. a.nd are a.ppli
ca.ble to residential structures con
structed or reha.b111tated with assist
ance provided under this pa.rt.
(b) Notification of hazards of lead-based
paint poi.saning. (1) The Secreta.ry ha.a
promulgated requirements regarding
nottflca.tion to purchasers and tenants
of HUD-associated housing constructed
prior to 19'18 or the ha.za.rds or lead
based pa.int poisoning at 24 CFR pa.rt
35, subpart A. This paragraph is pro
mulgated pursuant to the authoriza
tion gra.nted in 24 CFR 35.5(c) a.nd su
persedes, with respect to all housing to
which it applies, the notificatlon re
quirements prescribed by subpart A of
24 CFR put 35.
(2) For properties constructed prior
to 19'18, applicants for reha.bilita.tion
a.ssista.nce provided under this pa.rt and
tenants or purchasers or properties
owned by the gra.ntee or its sub
recipient and acQuired or rehabillta.ted
197
Item: 6
254
..
•
§570.608
with assistance provided ·.·under this
pa.rt shall be notified:
(1) That the property may contain
lead-based paint;
(11) Of the hazards of lead-based
paint;
(iii) Of the symptoms and treatment
of lead-based poisoning; .
(iv) Of the precautions to be taken to
avoid lead-based paint poisoning (in
cluding maintenance and removal tech
niques for eliminating such hazards);
(v) or the advisability and a.va.ils.bil
ity of blood lead level screening for
children under seven years of a.ge; a.nd
(vi) That in the event lead-based
pa.int is foWld on the property, appro
priate abatement procedures may be
undertaken.
(c) Elimination of lead-based paint h.az-
. ard.s. The purpose of this paragraph is
to implement the provisions of section
302 of the Lead-Based Pa.int Poisoning
Prevention Act, 42 U.S.C. 4822, by es
tablishing procedures to eliminate as
fa.r as practicable the ha.zard.s due to
the presence of paint which may con
tain lead and to which children under
seven years of age may be exposed in
existing housing which 1s reha.biUta.ted
with assistance provided under this
pa.rt. The Secretary has promulgated
requirements regarding the elimi
nation of lea.d-ba.sed paint hazards in
HUD-associated housing at 24 CFR part
35, subpart C. This paragraph is pro
mulgated pursuant to the authoriza
tion granted in 24 CFR 35.24(b)(4) and
supersedes, with respect to all housing
to which it applies, the requirements
prescribed by subpart C of 24 CFR part
35. (1) Applicability. This para.graph ap
plies to the rehabilitation of applicable
surfaces in existing housing which is
assisted under this part. The following
actlvi ties assisted under the Commu
nity Development Block Gra.nt pro
gram are not covered by this para
graph:
(i) Emergency repairs (not including
lead-based paint-related emergency re
pairs):
(11) Wea.theriza.tion;
{iii) Water or sewer hook-ups:
(iv) Installation of eecw-ity devices;
(v) Fa.cm tatlon of tax exempt bond
issuances which provide funds for reha
bilitation;
24 CFR Ch. V (4-1-95 Edltton)
(vi) Other similar types of single-pur
pose programs that do not include
physical repairs or remodeling of appli
cable surfaces (as defined in 24 CFR
35.22) of residential structures; and
(vii) A:rJ.y non-single purpose reha.bili
ta.tion that does not involve applicable
surfaces · (a.s defined in 24 CFR 35.22)
that does not exceed $3,000 per untt.
(2) Definitions. .
"Applicable surface." All intact and
nonintact interior and exterior painted
surfaces of a residential structure.
"Chewable surface." All chewable
protruding painted surfaces up to five
feet from the floor or ground, which
are readily accessible to children under
seven yea.rs of age, e.g., protruding cor
ners, windowsills and fr-a.mes, doors and
frames, and other protruding wood-
work. ·
"Defective pa.int surface. Pa.int on
applicable surfaces that is era.eking,
scaling, chipping, peeling or loose.
"Elevated blood lead level or EBL."
Excessive absorption of lead. that is, a
confirmed concentration of lead in
whole blood of 25 µg/dl (microgra.ms of
lead per deciliter of whole blood) or
greater.
"Lead-based pa.int surface." A paint
surface, whether or not defective, iden
tified a.s having a. lea.d content greater
than or equal to 1 mg/cm2.
(3) Inspection and T~ting--(i) Defective
paint 3Ur/aces. The grantee shall in
spect for defective paint surfaces in all
units constructed prior to 1978 which
a.re occupied by families with children
under seven years of age and which are
proposed for reha.bilitation assistance.
The inspection shall occur a.t the same
time the property is being inspected for
rehabilitation. Defective pa.int condi
tions will be included in the work
write-up for the remainder of the reha-
bllitation work. .
(ii) Chewable surfaces. The grantee
shall be required to test the lead con
tent of chewable surfaces if the family ·
residing in a unit, constructed prior to
· 1978 and receiving rehabilitation assist
ance, includes a. child under seven
years of age with an identified EBL
condition. Lead content shall be tested
by using an X-ray fluorescence ana
lyzer (XRF) or other method approved
by HUD. Test readings of 1 mg/cm 2 or
higher using an XRF shall be coosid-
198
Item: 6
255
•
,_ .
•.· .. ... -. Q:
,.
Ofc. of Asst. Secy .• Comm. Planning, Develop., HUD §570.608 ered positive for presence o(.lead-based
pa.int. ·
(111) Abatement without testing. In lieu
or the procedures set forth in para
graph (c)(3)(11) of this section, in the
ca.se of a residential structure con
structed prior to 1978, the grantee ma.y
forgo testing a.n4 abate &11 applica.ble
surfaces in accordance with the· meth
ods set out in 24 CFR 35.24(b)(2)(11).
(4) Abatement ·Actions. (1) For inspec
tions performed under §570.608(0)(3)(1)
and where defective pa.int surfaces are
found, treatment f>hall be provided to
detective a.reaa. Treatment shall be
performed before final inspection and
a.pproval of the work.
(11) For testing performed under
§570.608(c)(3)(ll) and where interior
ohewa.ble surfaces are found to contain
lea.d-baaed pa.int, a.ll interior chewa.ble
surfaces in any a.ffected room shall be
treated. Where exterior chewable sur
faces are found to contain lead-based
pa.int, the entire exterior chewable sur
face shall be treated. Treatment shall
be performed before final inspection
and approval or the work.
(111) Wben weather prohibits repaint
ing exterior surfaces before final in
spection, the grantee may permit the
owner to abate the defective pa.int or
chewable lead-based pa.int as required
by thia section and agree to repaint by
a specified date. A separate inspection
is required.
(5) Abatement methods. At a. minimum.
treatment or the defective areas a.nd
chewable lead-based paint surfaces
shall consist of covering or removal of
the painted surface as described in 24
CFR 35.24(b)(2)(11).
(6) Funding for inspection, testing and
abatement. Program requirements and
local program design will determine
whether the cost or inspection, testing
or a.batement is to be borne by the
owner/developer, the grantee or a. com
bination of the owner/developer a.nd the
grantee. .
(7) Tenant protection. The owner/de
veloper shall ta.ke appropriate action
to protect tenants from ha.za.rda associ ..
a.ted with abatement procedures. Where
necessary, these actions may include
the temporary relooa.tlon o! tenants
during the abatement process. The
owner/developer shall notify the grant-
ee or all such a.ctions taken. ·
(8) Records. The grantee shall keep a
copy or each inspection a.nd/or test re
port tor at least three years.
(9) Monitoring and enforcement. HUD
field office monitoring or rehabilita
tion programs includes reviews for
compliance with applicable program
requirements for lead-based paint. The
OPD Field Monitoring Handbook which
currently- includes · instructions ror
monitoring lead-based pa.int require
ments will be amended as a.ppropriate.
In cases or noncompliance, HUD may
impose conditions or sanctions on
grantees to encourage prompt compli
ance.
(10) Compliance with. other program re
quirements, Federal, State and local laws.
(1) Other program requirements. To the
extent that assistance from any or the
programs covered by this section is
used in conjunction with other HUD
program assistance which have lead
based pa.int requirements which may
ha.ve more or less stringent require
ments, the more stringent require
ments will preva.11.
(ii) HUD responsibility. Ir HOD deter
mines tha.t a Sta.te or local law; ordi
na.nce, oade or regulation provides ror
lead-based pa.int testing or hazard
abatement 1n a manner which provides
a level or protection from the ha.za.rds
or lead-based paint poisoning at least
comparable to that provided by the re
quirements or this section and that ad
herence to the requirements or this
subpart would be duplicative or other
wise ca.use inefficiencies, HUD may
modify or waive the requirements of
this section in such manner as may be
appropriate to promote efficiency
while ensuring such compa.rable level
or protection.
(111) Grantee responsibility. Nothing in
this section is intended to relieve any
grantee in the programs covered by
this section of any responsibiUty for
oomplia.nce with State or local laws.
ordinances, codes or regula.tions gov
erning lead-based paint testing or haz
ard aba.tement.
(iv) Duposal of lead-based paint debris.
Lead-based paint and defective paint
debris shall be disposed of in a.ccord
ance with a.pplicable Federal, State or
199
Item: 6
256
I'
§570.609
loca.l requirements. (See e._g., 40 CFR
parts 260 through 271.) ,
[53 FR. 34456, Sept. 6, 1988; 53 FR 41330, Oct. 21,
1988]
§ 570,609 Use of debarred., suspended
or ineligible contractors or
subrecipients,
Assistance under thls pa.rt sha.11 not
be used directly oi-. indirectly to em
ploy, awa.rd contracts to, or otherwise
engage the services or, or fund any con
tractor or subreciplent during llJlY pe
riod or debarment, suspension, or
placern-:Jnt in ineligibillty status under
the provisions of 24 CFR pa.rt 24.
(53 FR 34456, Sept, 6, 1988: 53 FR 41330, Oct. 21,
1988]
§ 570.610 Uniform administrative re
quirements and cost principles.
The recipient, its agencies or instru
menta.lities, and subrecipients shall
comply with the policies, guidelines,
and requirements of 24 CFR part 85 and
0MB Circula.rs A-87, A-110, A-122, A-133
(implemented at 24 CFR part 45), and
A-128 2 (implemented a.t 24 CFR pa.rt
44), as applicable, a.s they rela.te to the
acceptance and use of Federal funds
under this part. The a.ppl!cable sections
of 24 CFR pa.rt 85 and 0MB Circular A-
110 are set forth at §570.502.
(53 FR 34456, Sept, 6, 1988; 53 FR 41330, Oct. 21,
1988, a.a amended at 57 FR 33256, July 27, 1992]
§570.611 Conflict of interest.
(a) Applicability. (1) In the procure
ment of supplies, equipment, construc
tion, a.nd services by recipients, and by
subrecipients (including those specified
at § 570.204(c)), the conflict of interest
provisions in 24 CFR 85.36 and 0MB Cir
cular A-110, respectively, shall apply.
(2) In all cases not governed by 24
CFR. 85.36 and 0MB Circular A-110, the
proVisions of this section shall apply.
Su~h cases include the acquisition and
disposition of real property and the
proVision of assistance by the recipi
ent, by its subrecipients, or to individ
uals, businesses or other private enti
tles under eligible activities which au
thorize such assistance {e.g., reha.blli
ta.tion, preservation, and other im
provements of private properties or fa-
2 See footnote l for § 570.200(a)(5).
24 CFR Ch. V (4-1-95 Edition)
cilities pursuant to §570.202, or grants,
loans and other assistance to busi
nesses, individuals and other private
entities pursuant to §570.203, §570.204 or
§570.455).
(b) Conj1icts prohibited. Except for the
use of CDBG funds to pay sala.ries and
other related administrative or person
nel costs, the general rule is· that no
persons described in paragraph (c) of
this section who exercise or have exer
cised any functions or responsibilities
with respect to CDBG activities as
sisted under this pa.rt, or who are in a
position to participate in a. decision
making process or to gain inside infor
mation with regard to such activities,
may obtain a financial interest or ben
efit from a CDBG-assisted activity, or
have a fina.ncial interest in any con
tract, subcontract, or agreement with
respect to a. CDBG-assisted activity, or
with respect to the proceeds of the
CDBG assisted activity, either for
themselves or those with whom they
have family or business ties, during
their tenure or for one yea.r thereafter.
For the TJDAG program, the a.bove
stated restriction shall apply to a.11 ac
tivities that are a pa.rt of the UDAG
project, a.nd shall cover a.ny financial
interest or benefit during, or s.t any
time after, the person's tenure.
(c) Persons covered. The conflict of in
terest provisions of paragraph (b) of
this section apply to any person who is
an employee, agent, consultant, officer,
or elected official or appointed official
of the recipient, or of any designated
public agencies, or subrecipients which
are receiving funds under this pa.rt.
(d) E:rceptiom: thre3hold requirements.
Upon the written request of the recipi
ent, HUD may grant an exception to
the provisions or para.graph (b) of this
section on a case-by-case basis when it
determines that such an exception will
serve to further the purposes of the Act
and the effective a.nd efficient a.dminls
tration or the recipient's program or
project. An exception may be consid
ered only a.fter the recipient ha.s pro
vided the following:
(1) A disclosure of the nature of the
conflict, accompanied by an assurance
that there has been public disclosure of
the conflict a.nd · a description of .how
the public disclosure was made; and
200
Item: 6
257
It
Ofc. of Asst. Secy., Comm. Planning, Develop., HUD §570.613 (2) An opinion of the rec:ipient's at
torney that the interest for which the
exception is sought would not violate
State or local law.
(e) Factors to be considered for e:ccep-.
tions. In determining whether to grant
a requested exception after the recipi
ent has sa.tisfactorily met the require- .
men.ts of par_a.graph (d) of this section, ·
HUD shall consider the cumula.tive ef
fect of the following factors, where ap-
pl1cable:
(1) Whether the exception would pro
vide a significant cost benefit or an es
sential degree or expertise to the pro
gram or project which would otherwise
not be a.vaila.ble;
(2) Whether an opportunity was pro
vided for open competitive bidding or
negotiation: .
(3) Whether the person a.f'!ected is a
member of a. group or class of low- or
modera.te-income persons intended to
be the beneficiaries of the assisted ac
tivity, and the· exception will permit
such person to receive generally the
ea.me interests or benefits as a.re being
ma.de available or provided to the
group or class;
(4) Whether the affected person has
withdrawn from his or her functions or
responsib1lities, or the decisiomnaking
process with respect to the specific as
sisted activity in question:
(5) Whether the interest or benefit
was present before the affected person
was in a. position as described in para.•
graph (b) or this section;
(6) Whether undue hard.ship will re
sult either to the recipient or the per
son affected when weighed a.gs.inst the
public interest served by a.voiding the
prohibited conflict: and
(7) Any other relevant consider
ations.
[53 FR 34456, Sept. 6, 1988; 53 FR 41330, Oct. 21,
198a, as amended at 57 FR 27120, June 17, 1992)
§ 570.~12 E:xecutlve Order 12372.
(a) General. Executive Order 12372, ·
Intergovernmental Review or Federal
Progra.ms, a.nd the Department's imple
menting regulations at 24 CFR pa.rt 52,
allow ea.ch State to establish its own
process for review and comment on
proposed Federal fina.ncia.l assistance
programs.
(b) Applicability. Executive Order
12372 applies to the CDBG Entitlement
program a.nd the UDAG program. The
Executive Order applies to all activi
ties proposed to be assisted under
UDAG, but it a.pplies to the Entitle
ment program only where a grantee
proposes to use funds for the planning
or construction (reconstruction or in
stallation) of wa_ter or sewer facilities.
. Such facilities include storm sewers a.s
well as a.11 sanitary sewers, but do .not
include water and sewer lines connect
ing a. structure to the lines in the pub
lic right-of-way or easement. It is the
responsibility of the grantee to initiate
the Executive Order review process if it
proposes to use its CDBG or UDAG
funds for a.ctiVities subject to review.
t 570.613 Eligibility restrictions for
certain resident aliens.
(a.) Restriction. Certa.in newly legal
ized aUens, a.s deecrlbed in 24 CFR part
49, are not eligible -to a.pply for benefl ts
under covered activities fU.nded by the
programs listed in para.graph (e) or this
section. "Benefits" under this section
means !lnancial assistance, public serv
ices, jobs and access to new or rehab111-
ta.ted housing and other fa.c111t1es made
a.va.ila.ble under covered activities fund
ed by programs listed in paragraph (e)
of this section, 11Benefits" do not in
clude relocation services and payments
to which displacees a.re entitled by la.w.
(b) Covered activities. "Covered activi
ties" under this section means activi
ties meeting the requirements of
§ 57D.208(a.) tha.t either:
(1) Have income eligibility require
ments limiting the benefits exclusively
to low and moderate income persons;
or .
(2) Are targeted geographically or
otherwise to primarily benefit low and
modera.te income persons (excluding
activities serving the public a.t large,
such as sewers, roads, sidewa.lks. a.nd
parks), and that provide benefits to
persons on the basis or a.n applica.tion.
(c) Limitation on coverage. The restric
tions under this section apply only to
a.pplica.nts !or new benefits not being
received by covered resident aliens as
or the effective date of this section.
(d) Compliance. Compliance can be ac
complished by obtaining certification
as provided in 24 CFR 49.20.
(e) Programs affected. (1) The Commu
nity Development Block Grant pro-
201
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258
•
§570.700
gram for small cities, adril1n1stered
under subpart F of pa.rt 570 of this title
until closeout of the recipient's grant.
(2) The Community Development
Block Grant program for entitlement
grants, admlnlstered under subpart D
of pa.rt 570 of this title.
(3) The_ Community Development
Block Grant program for Sta.tes, ad
ministered under subpart I or pa.rt 570
of this title until closeout of the unit
or genera.! local government's grant by
the State.
(4) The Urban Development Action
Grants program, administered under
subpart G of pa.rt 570 of this title until
closeout of the recipient's grant.
(55 FR 18494, May 2, 1990)
Subpart L-(Reserved)
Subpart M-Loan Guarantees
SOURCE: 59 FR 66604, Dec. 27, 1994, unless
otherwise noted.
§570.700 Purpose.
This subpart contains requirements
governing the guarantee under section
108 of the Act of debt obligations u de
fined in § 570. 701.
§570,701 Definitions.
Borrower means the public entity or
its designated public agency that is
sues debt obliga.tlons under· this sub
pa.rt.
Debt obligation means a promissory
note or other obllgatlon issued by a
public entity or its designated public
agency and guaranteed by HUD under
this subpart, or a trust certificate or
other obligation offered by HUD or by
a trust or other offerer approved for
purposes of this subpart by HUD which
is guaranteed by HUD under this sub
part and is based on and backed by a
trust or pool composed of notes or
other obligations issued by public enti
ties or their designated public agencies
and guaranteed or eligible for guaran
tee by HUD under this SU bpart.
Designated public agency means a pub
lic agency designated by a. public en
tity to issue debt obligations as bor
. rower wider this subpart.
Entitlement public entity means a met
ropolitan city or an urban county re-
24 CFR Ch. V (4-1-95 Edition)
ceiving a. grant under subpart D of this
part.
Guaranteed loan funds means the pro
ceeds payable to the borrower from the
issuance of debt obliga.tions under this
subpart.
Nonentttlement public entity means
any unit of general local government
in a. nonentitlement area.
Public entity means any unit of gen
eral local government, including units
of genera.l local government in a. non
entitlement area.
State-a.sststed public entity means a
unit of general local government in a
nonentitlement area. which is a.saisted
by a State as required in §570.704(b)(9)
and § 570. 705(b )(2).
· § 570. 702 Eligible appllcants.
The following public entities may
apply for loan guarantee assistance
under this subpart.
(a) Entitlement public entities.·
. (b) Nonent1tlement public entities
that are assisted in the submission of
applications by States that administer
the CDBG program (under subpart I of
this part). Such assistance shall con
sist, at s. minimum, of the certifi•
cations required under § 570. 704(b)(9)
(and actions pursuant thereto).
(c) Nonentitlement public entities el
igible to apply for grant assistance
under subpart F of this part.
~ 570. 703 Ellgible activities.
Guaranteed loan funds may be used
for the following activities, provided
such activities meet the requirements
of § 570.200. However, guaranteed loan
funds may not be used to reimburse the
CDBG program account or line of cred
it for costs incurred by the public en
tity or designated public agency and
paid with CDBG grant funds or pro
gram income.
(a) Acquisition of improved or unim
proved real property in fee or by long
term lease, Including acquisition for.
economic development purposes.
(b) Rehabilitation of real property
owued or acquired by the public entity
or its designated public agency.
(c) Payment of interest on obliga
tions guaranteed under this subpart.
(d) Relocation payments and other
reloca.tion assistance for individuals,
fa.milies, businesses, nonprofit organi-
202
Item: 6
259
r
Office of the Secretary, HUD
&ITa.ngements with grantees and
subgran tees to retain rmy records
which a.re continuously needed for
joint use. The awarding agency will re
quest transfer or records to its custody
when it determines that the records
possess long-term retention value.
When the records s.re transferred to. or
ma.1nta.ined by the Federal agency, the
3-yea.r retention requirement is not ap
plicable to the grantee or subgrantee.
Cc) Starting dcite of retention period-Cl)
General. Wben gra.nt support is contin
ued or renewed at annual or other in
tervals, the retention period for the
records of each funding-period sta.rts on
the da.y the grantee or subgra.ntee sub
mits to the awarding a.gency its sing'le
or la.st expenditure report for that pe
riod. However, if' gra.nt support is con
tinued or renewed quarterly, the reten
tion period for each yea.r's records
starts on the da.y the grantee submits
its expenditure report for the last quar
ter or the Federal fiscal yea.r. In all
other cases, the retention period starts
on the day the grantee submits its
final expenditure report. If an expendi
ture report has been wa.1ved, the reten
tion period starts on the day the report
would have been due.
(2) Real 1J'f'OPertJ/ arid equipment
records. The retention period for real
property and equipment records starts
from the date or the disposition or re
pla.cement or transfer at the direction
or the awa.rcllng agency.
(3) Record! for income tran.sactiom
after grant or subgrant mpport. In some
ca.ses grantees must report income
a.rter the period or grant support.
Where there is such.a requirement, the·
retention period :l'or the records per~
ta.ln1ng to the ea.ming or the income
starts from the end or the gra.ntee•s fis
ca.1 yes.r in which the income is earned.
(4) Indirect cost rate proposals. cost al
locations plans, etc. This pa.rs.graph ap
plies to the !ollowhlg types or docu
ments, and their supparting records:
Indirect cost rate computations or prer
poaa.ls, cost &lloca.tion plans, and any
similar a.cco~tiJlg computations or
the ra.te at which a particular group or
costs is cha.rgea.ble (such as· computer
usage chargeback rates or composite
:l'ringe benefit ra.tes).
(1) If submitted for negotiation. If the
proposa.l, plan, or other. computa.tion is
§85.43
required to be submitted to the Federal
Government (or to the grantee) to form
the basis !or negotiation of the rate,
then the 3-yea.r retention period for its
supporting records starts fl'om the de.te
or such submission.
(11) 1/ not submitted for negotiation. It
the proposal, plan, or. other computa
tion is not required to be submitted to
the· Federal Government (or to the
grantee) :for negotiation purposes, then
the 3-yea.r retention period for the pro
posal pla.n, or computa.tion and its sup
porting records starts from end or the
fiscal year (or other accounting- period)
covered by the proposal, pla.n, or other
computa.tion.
(d) Substitution of microfilm. Copies
ma.de by microfilming, photocopying,
or simila.r methods me.y be substituted
for the original rec.ords.
(e) Access to records-Cl) Becord3 of
grantees and subgrantees. The awarding
agency a.nd the Comptroller General or
the United States, or any or their au
thorized representa.tivea, shall have the
right or access to any pertinent books,
docwnents; pa.pers, or other records of
g-ra.ntees and subgrantees which are
pertinent to the grant, in order to
ma.ke audits, examine.tlons, excerpts,
and tra.nscripts.
(2) Expiration of right of access. The
rights or access in this section must
not be limited to the required reten
tion period but sha.ll la.st a.s long- as the
records are retained.
(1) Re.strictiom on public access. The
Federal Freedom or Intorma.tlon Act (5
U.S.C. 552) does not apply to records
Unless required by Federal, Sta.te. or
local law, grantees and subgrantees &re
not required to perm! t public access to
their records.
f 85.43 Enforcement.
(a) Remedies for noncompliance. It a.
grantee or subgra.ntee materially fails
to comply with any tenn o! an a.wa.rd,
whether stated in a Federal statute or
reg-ula.tion, an a.ssura.nce, in a State
plan or application, a notice or award,
or elsewhere, the awarding agency may
take one or more o:l' the following ac•
tions, as appropriate in the c1r
cumsta.noes:
(1) Temporarily withhold ca.sh pay
ments pending correction or the defi~
ciency by the grantee or subgra.ntee or
575
A TT ACH1\1ENT 4
Item: 6
260
_•i • ,,,._ ,IA
§85.44
more severe enforcement aqtion by the
a.warding agency. ·
(2) Disallow (that is, deny both use of
funds and matching credit for) all or
pa.rt of the cost of the activity or ac
tion not in compliance,
(3) Wholly or partly suspend or ter
minate the current award for the
grantee's or subgrantee's program, ·
_· (4) Withhold further a.wards for the
program, or
(5) Take other remedies that may be
legally available.
(b) Hearings, appeals. In ta.king an en
forcement action, the a.warding agency
will provide the grantee or subgrantee
a.n opportunity for such hearing. ap
peal, or other administrative proceed
ing to which the grantee or subgra.ntee
is entitled under any statute or regula
tion a.pplicable to the action involved.
(c) Effects of suspension and termi
nation. Costs or ST&ntee or subgra.ntee
resulting from obligations incurred by
the grantee or subgrantee during a sus
pension or after tennina.tlon or an
award a.re not allowable unless the
awarding agency expressly authorizes.
them in the notice of suspension or ter
mination or subsequently. Other grant
ee or subgrantee costs ,during suspen
sion or after termination which are
necessary and not reasonably avoida.ble
are allowable if:
(1) The costs result from obligations
which were properly incurred by the
gTa.ntee or subgTantee ·before the effec
tive da.te of suspension or termination,
a.re not in anticipation of it, a.nd, in the
case of a. termination, a.re
noncancella.ble, and,
(2) The costs would be allmvable if
the award were not suspended or ex
. pired normally a.t the end or the fund
ing period in which the termination
takes effect.
(d) Relationship to debarment and .ntS
pension. The enforcement remedies
identified in this section, including
suspension and termination, do not
· preclude grantee or subgrantee from
being subject to "Deba.rment and Sus
pension" under E.O. 12549 (see §85.35).
§ 85.44 Termination for convenience.
. Except as provided in §85.43 a.wards
may be terminated in whole or in pa.rt
only a.s follows:
24 CFR SUbtttte A (4-1-95 Edition)
(a) By the a.warding agency With the
consent of the grantee or subgrantee in
which case the two parties shall agree
upon the termina.tion conditions, in
cluding the effective date and in the
case of partis.1 termination, the portion
to be termina.ted, or
(b) By the grantee or subgrantee
upon written notification to the a.ward
ing agency, setting forth the reasons
for · such termination, the effective
date, a.nd in the case of partial termJ
ne.tion, the portion to be terminated.
However, if, in the case of & partial ter-
. mlnation, the a.warding agency deter
mines that the rema.ining portioµ or
the a ward will not a.coompllsh the pur
poses for which the a.ward was made,
the a.warding- agency may terminate
the a.ward in its entirety under either
§ 85.43 or para.graph (a) of this section.
Subpart D-Affer-The-Grant
Requirements
¾ SS.60 Closeout.
(a) General. The Federal agency will
close out the a.ward when it determines
tha.t a.11 applicable administrative ac
tions a.nd all required work of the
grant has been completed.
(b) Reports. Within 90 days after the
expiration or termination of the grant,
the grantee must submit all fina.ncla.l,
performance, and other reports re
quired as a condition of the grant.
Upon request by the grantee, Federal
agencies may extend this timeframe.
These may include but a.re not llmlted
to:
(1) Final performance or progress re-
port. .
(2) Financial Status Report (SF 269) or
Outlay Report and .Request for Reim
bursement for Construction Programs
(SF-271) (as applicable).
(3) Final request for payment (SF-270)
(if applicable).
(4) Invention disclosure (if applicable).
(5) Federally-owned property report:
In accordance with §85.32(0, a. grantee
must submit an inventory of all feder
a.lly owned property (as distinct from
property acquired with grant funds) for
which it is accountable and request dis
position instructions from the Federal
agency of property no longer needed •
(c) Cost adjustment. The Federal agen
cy will. witlµn 90 days after receipt of
576
Item: 6
261
ATTACHMENT 6
Item: 6
262
APPRAISAL OF REAL PROPERTY
20702 El Toro Rd
Lake Forest, CA 92630
TR 9667 Lot 1 Unit 35 Of Project On AP 837-461-08 With An Und 1/160 Int In Lot 1 City Of Lake Forest
7 Whatney , Suite B
Irvine, CA 92618
05/16/2024
Kristian Lovegren
Appraisal Now
13542 Onkayha Circle
Irvine, CA 92620
Borrower: City Of Lake Forest
Form GA1NV_LT - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
LOCATED AT
FOR
AS OF
BY
Item: 6
263
Appraisal Now 714-309-7318
LF20702
20702 El Toro Rd
35 Lake Forest
CA
92630
City Of Lake Forest
South County Outreach
Orange
TR 9667 Lot 1 Unit 35 Of Project On AP 837-461-08 With An Und 1/160 Int In Lot 1 938-741-79
2023
0 Pheasant Creek
1 52-C6
0320.47
0 376
Personal - Market Value
City Of Lake Forest
7 Whatney , Suite B, Irvine, CA 92618
Subject property has not been listed for sale in the past 12 months. Verifying data sources were Multiple Listing Service and RealQuest.
396
550
450
39 60
44 75
5 5
5 10
Subject neighborhood boundaries are as follows: El Toro Road to the north, Marguerite Parkway to the east, Los Alisos Boulevard to the south and Portola Parkway to the west.
Neighborhood consists of single family homes, condominiums and some commercial use, showing various age and quality. Neighborhood is located in the Lake Forest city limits, near all services, including employment centers, reflecting average condition and appeal. There were no adversities noted. The Present Land Use % under "Other" is for golf courses and public parks.
Conditions in the subject market are reflective of a balanced market, with marketing time being 1-3 months, if properly listed. Conventional / FHA / VA financing is all evident in the area. The supply is not in balance with the demand, with values being in a stable state with some decreases noted.
Level
Typical
Typical
N;Res;
R1
Condominium (938)
See attached
addenda.
Asphalt
None
X
06059C0317J
12/03/2009
The subject site is completely landscaped, also having hardscape, sharing common areas, is typical in size, is well maintained, reflecting average condition and appeal. The subject site reflected no adverse conditions at the inspection time.
CRMLS / HOA
2 0
1982
20 Stucco/Siding
Comp
1000
2 Gar/Open
Street
416
416
3 416
140
276
1 416
3 416
140
276
Appraiser was not aware of any single ownership in subject's development that exceeded 10%. Please note that appraiser did not review
CC&R's, as they were not made available for review, therefore assumed to have no adversities.
Form 1073UAD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Individual Condominium Unit Appraisal Report File #
SU B JEC TC O N TR AC TN EIG H B O R H O O DPR O JEC T SITEPR O JEC T IN FO R M ATIO N The purpose of this summary appraisal report is to provide the lender/client with an accurate, and adequately supported, opinion of the market value of the subject property.
Property Address Unit # City State Zip Code
Borrower Owner of Public Record County
Legal Description
Assessor's Parcel # Tax Year R.E. Taxes $
Project Name Phase # Map Reference Census Tract
Occupant Owner Tenant Vacant Special Assessments $ HOA $ per year per month Property Rights Appraised Fee Simple Leasehold Other (describe) Assignment Type Purchase Transaction Refinance Transaction Other (describe) Lender/Client Address
Is the subject property currently offered for sale or has it been offered for sale in the twelve months prior to the effective date of this appraisal? Yes No Report data source(s) used, offering price(s), and date(s).
I did did not analyze the contract for sale for the subject purchase transaction. Explain the results of the analysis of the contract for sale or why the analysis was not performed.
Contract Price $ Date of Contract Is the property seller the owner of public record? Yes No Data Source(s) Is there any financial assistance (loan charges, sale concessions, gift or downpayment assistance, etc.) to be paid by any party on behalf of the borrower? Yes No If Yes, report the total dollar amount and describe the items to be paid.
Note: Race and the racial composition of the neighborhood are not appraisal factors.
Neighborhood Characteristics
Location Urban Suburban Rural
Built-Up Over 75% 25-75% Under 25%
Growth Rapid Stable Slow
Condominium Unit Housing Trends
Property Values Increasing Stable Declining
Demand/Supply Shortage In Balance Over Supply
Marketing Time Under 3 mths 3-6 mths Over 6 mths
Condominium Housing
PRICE
$ (000)
AGE
(yrs)
Low
High
Pred.
Present Land Use %
One-Unit %
2-4 Unit %
Multi-Family %
Commercial %
Other %
Neighborhood Boundaries
Neighborhood Description
Market Conditions (including support for the above conclusions) Topography Size Density View
Specific Zoning Classification Zoning Description
Zoning Compliance Legal Legal Nonconforming - Do the zoning regulations permit rebuilding to current density? Yes No No Zoning Illegal (describe)
Is the highest and best use of subject property as improved (or as proposed per plans and specifications) the present use? Yes No If No, describe Utilities Public Other (describe) Public Other (describe) Electricity
Gas
Water
Sanitary Sewer
Off-site Improvements - Type Public Private
Street
Alley
FEMA Special Flood Hazard Area Yes No FEMA Flood Zone FEMA Map # FEMA Map Date Are the utilities and off-site improvements typical for the market area? Yes No If No, describe Are there any adverse site conditions or external factors (easements, encroachments, environmental conditions, land uses, etc.)? Yes No If Yes, describe Data source(s) for project information
Project Description Detached Row or Townhouse Garden Mid-Rise High-Rise Other (describe) General Description
# of Stories
# of Elevators
Existing Proposed
Under Construction
Year Built
Effective Age
General Description
Exterior Walls
Roof Surface
Total # Parking
Ratio (spaces/units)
Type
Guest Parking
Subject Phase
# of Units
# of Units Completed
# of Units For Sale
# of Units Sold
# of Units Rented
# of Owner Occupied Units
If Project Completed
# of Phases
# of Units
# of Units for Sale
# of Units Sold
# of Units Rented
# of Owner Occupied Units
If Project Incomplete
# of Planned Phases
# of Planned Units
# of Units for Sale
# of Units Sold
# of Units Rented
# of Owner Occupied Units
Project Primary Occupancy Principal Residence Second Home or Recreational Tenant Is the developer/builder in control of the Homeowners' Association (HOA)? Yes No Management Group - Homeowners' Association Developer Management Agent - Provide name of management company.
Does any single entity (the same individual, investor group, corporation, etc.) own more than 10% of the total units in the project? Yes No If Yes, Describe Was the project created by the conversion of existing building(s) into a condominium? Yes No If Yes, describe the original use and date of conversion.
Are the units, common elements, and recreation facilities complete (including any planned rehabilitation for a condominium conversion)? Yes No If No, describe Is there any commercial space in the project? Yes No If Yes, describe and indicate the overall percentage of the commercial space.
Freddie Mac Form 465 March 2005 UAD Version 9/2011 Page 1 of 6 Fannie Mae Form 1073 March 2005 Item: 6
264
LF20702
Subject's project is located in a development that is comprised of average quality constructed condominium's. The overall condition and appearance of the subject project is average and is considered typical for the area.
The common elements of subject's development are; pools, spas, sport courts, greenbelt and common areas.
The Homeowner's
Association is in control of all common element's, assumed to have no known leases for any of the current common elements.
The appraiser was not provided a copy of a budget for the current year and or a copy of the CC&R's for subject's development, therefore assumed to have no adversities
There is
assumed to be no noted additional charges to the homeowner, for the use of common element's, other than the stated HOA charges.
Appraiser is not aware of and is assuming that there is no special or unusual characteristics of subject's project that would adversely effect the value or marketability. The appraiser is NOT aware of any pending litigation involving the subject property’s condo development. 376
4,512.00
6.58 Trash Removal
Level 1
1 FAU
Gas
LamWd/Average
Drywall/Average
Wood/Average
Fiberglass/Average
Wood/Average
0 0
Patio
None
None
None
One
One
None
1 N/A
3 1
1.0 686
The subject has dual pane windows.
C3;Kitchen-updated-one to five years
ago;Bathrooms-updated-one to five years ago;Subject property is in above average condition with no needed repairs noted.
Subject property appears to be structurally sound with no apparent adverse conditions that adversely effect the livability, soundness or structural integrity of the subject's improvements. The utilities were on and functional at the time of inspection, the water heater was securely double strapped, and the smoke alarms and carbon monoxide detectors were functional.
The economic life is estimated at 75 years. The remaining economic life is 55 years and is based on the effective age of the subject property.
Appraiser utilized typical sources such as
title companies to research sales history of subject and all comparables provided within this appraisal report.
RealQuest/CRMLS
RealQuest/CRMLS
CRMLS/RealQuest
05/16/2024
11/20/2023
$340,500
CRMLS/RealQuest
05/16/2024
CRMLS/RealQuest
05/16/2024
CRMLS/RealQuest
05/16/2024
The subject property was purchased on 06/03/2002 for $135,500 with Document # 465748. Sales history of the subject and comparable properties does not adversely effect the final estimate of value.
Form 1073UAD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Individual Condominium Unit Appraisal Report File #
PR O JEC T IN FO R M ATIO NPR O JEC T AN ALYSISU N IT D ESC R IPTIO NPR IO R SALE H ISTORY Describe the condition of the project and quality of construction.
Describe the common elements and recreational facilities.
Are any common elements leased to or by the Homeowners' Association? Yes No If Yes, describe the rental terms and options.
Is the project subject to a ground rent? Yes No If Yes, $ per year (describe terms and conditions) Are the parking facilities adequate for the project size and type? Yes No If No, describe and comment on the effect on value and marketability.
I did did not analyze the condominium project budget for the current year. Explain the results of the analysis of the budget (adequacy of fees, reserves, etc.), or why the analysis was not performed.
Are there any other fees (other than regular HOA charges) for the use of the project facilities? Yes No If Yes, report the charges and describe.
Compared to other competitive projects of similar quality and design, the subject unit charge appears High Average Low If High or Low, describe Are there any special or unusual characteristics of the project (based on the condominium documents, HOA meetings, or other information) known to the appraiser? Yes No If Yes, describe and explain the effect on value and marketability.
Unit Charge $ per month X 12 = $ per year Annual assessment charge per year per square feet of gross living area = $ Utilities included in the unit monthly assessment None Heat Air Conditioning Electricity Gas Water Sewer Cable Other (describe) General Description
Floor #
# of Levels
Heating Type Fuel
Central AC Individual AC
Other (describe)
Interior materials/condition
Floors
Walls
Trim/Finish
Bath Wainscot
Doors
Amenities
Fireplace(s) #
WoodStove(s) #
Deck/Patio
Porch/Balcony
Other
Appliances
Refrigerator
Range/Oven
Disp Microwave
Dishwasher
Washer/Dryer
Car Storage
None
Garage Covered Open
# of Cars
Assigned Owned
Parking Space #
Finished area above grade contains: Rooms Bedrooms Bath(s) Square Feet of Gross Living Area Above Grade Are the heating and cooling for the individual units separately metered? Yes No If No, describe and comment on compatibility to other projects in the market area.
Additional features (special energy efficient items, etc.) Describe the condition of the property (including needed repairs, deterioration, renovations, remodeling, etc.).
Are there any physical deficiencies or adverse conditions that affect the livability, soundness, or structural integrity of the property? Yes No If Yes, describe Does the property generally conform to the neighborhood (functional utility, style, condition, use, construction, etc.)? Yes No If No, describe I did did not research the sale or transfer history of the subject property and comparable sales. If not, explain My research did did not reveal any prior sales or transfers of the subject property for the three years prior to the effective date of this appraisal.
Data source(s)
My research did did not reveal any prior sales or transfers of the comparable sales for the year prior to the date of sale of the comparable sale.
Data source(s)
Report the results of the research and analysis of the prior sale or transfer history of the subject property and comparable sales (report additional prior sales on page 3).
ITEM SUBJECT COMPARABLE SALE #1 COMPARABLE SALE #2 COMPARABLE SALE #3 Date of Prior Sale/Transfer
Price of Prior Sale/Transfer
Data Source(s)
Effective Date of Data Source(s)
Analysis of prior sale or transfer history of the subject property and comparable sales.
Freddie Mac Form 465 March 2005 UAD Version 9/2011 Page 2 of 6 Fannie Mae Form 1073 March 2005 Item: 6
265
LF20702
1 460,000
460,000
17 396,000
470,000
20702 El Toro Rd
35, Lake Forest, CA 92630
Pheasant Creek
1 N;Res;
Fee Simple
376
Pool/Spa
Greenbelts
Level 1
N;Res;
RT1L;Contemp
Q4
42 C3
3 1
1.0 686
0sf
Average
FAU/Individual
Noted
1g;Owned
Patio
20702 El Toro Rd
389, Lake Forest, CA 92630
Pheasant Creek
1 0.26 miles E
470,000
685.13
CRMLS #OC24011836;DOM 39
Real Quest Document #52344
ArmLth
Conv;0
s03/24;c03/24
N;Res;
Fee simple
376
Pool/Spa
Greenbelts
Level 1
N;Res;
RT1L;Contemp
Q4
41 0
C3
3 1
1.0 686
0sf
Average
FAU/Individual
Noted
1g;Owned
Patio
0 0.0
0.0 470,000
20702 El Toro Rd
216, Lake Forest, CA 92630
Pheasant Creek
1 0.12 miles E
457,000
666.18
CRMLS #SW24034797;DOM 10
Real Quest Document #80520
ArmLth
Conv;0
s04/24;c03/24
N;Res;
Fee simple
376
Pool/Spa
Greenbelts
Level 2
0 N;Res;
RT1L;Contemp
Q4
44 0
C3
3 1
1.0 686
0sf
Average
FAU/Individual
Noted
1g;Owned
Patio
0 0.0
0.0 457,000
20702 El Toro Rd
410, Lake Forest, CA 92630
Pheasant Creek
1 0.27 miles E
455,000
745.90
CRMLS #OC24064027;DOM 6
Real Quest Document # 112745
ArmLth
Conv;0
s05/24;c04/24
N;Res;
Fee simple
376
Pool/Spa
Greenbelts
Level 2
0 N;Res;
RT1L;Contemp
Q4
42 C3
3 1
1.0 610
0 0sf
Average
FAU/Individual
Noted
1g;Owned
Patio
0 0.0
0.0 455,000
Sales chosen and provided in this report were taken from subject's immediate area and are considered to be the best available at time of inspection. Subject and all comparables are considered similar overall and best represent the current market. The comparables chosen represent the most recent relevant sales activity in the subject's immediate market location that are similar to the subject in size,age,design,quality of construction and overall market appeal. In determining the calculation of adjustments, paired sale analysis was applied.
Adjustments were calculated at; $100 per sq. ft. for GLA and applied for a difference of 100 sq. ft. or greater, $10,000 per bathroom and garage space. Comparable sale # 5 is a pending sale and can be verified through the listing agent Suzanne Goldman at 949-278-5017. MLS photos were used when people were on the premises at the time of inspection. It is noted that the final opinion of value is higher than the predominant neighborhood value, however this is typical because the PNV is an average or a mean and in most cases they do not match-up. In the final estimate of value, the greatest weight was given to comparable sales # 1 & 2. Secondary consideration was given to the remaining comparables.
460,000
The Income Approach is not felt to be applicable for predominant owner occupied single family homes. Rental date for this type of property would be very limited, or not available. 460,000
The Market Approach is given the greatest weight in the valuation process. The Cost Approach and the Income Approach are not applicable for this type of property.
There were no conditions noted.
460,000
05/16/2024
Form 1073UAD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Individual Condominium Unit Appraisal Report File #
SALES C O M PAR ISO N APPR O AC HIN C O M ER EC O N C ILIATIO N There are comparable properties currently offered for sale in the subject neighborhood ranging in price from $ to $ .
There are comparable sales in the subject neighborhood within the past twelve months ranging in sale price from $ to $ .
FEATURE SUBJECT COMPARABLE SALE # 1 COMPARABLE SALE # 2 COMPARABLE SALE # 3 Address and
Unit #
Project Name and
Phase
Proximity to Subject
Sale Price $ $ $ $
Sale Price/Gross Liv. Area $ sq. ft. $ sq. ft. $ sq. ft. $ sq. ft.
Data Source(s)
Verification Source(s)
VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +(-) $ Adjustment DESCRIPTION +(-) $ Adjustment DESCRIPTION +(-) $ Adjustment Sales or Financing
Concessions
Date of Sale/Time
Location
Leasehold/Fee Simple
HOA Mo. Assessment
Common Elements
and Rec. Facilities
Floor Location
View
Design (Style)
Quality of Construction
Actual Age
Condition
Above Grade Total Bdrms. Baths Total Bdrms. Baths Total Bdrms. Baths Total Bdrms. Baths Room Count
Gross Living Area sq. ft. sq. ft. sq. ft. sq. ft.
Basement & Finished
Rooms Below Grade
Functional Utility
Heating/Cooling
Energy Efficient Items
Garage/Carport
Porch/Patio/Deck
Net Adjustment (Total) + - + - + -$ $ $
Adjusted Sale Price
of Comparables $ $ $
Net Adj. %
Gross Adj. %
Net Adj. %
Gross Adj. %
Net Adj. %
Gross Adj. %
Summary of Sales Comparison Approach
Indicated Value by Sales Comparison Approach $
INCOME APPROACH TO VALUE (not required by Fannie Mae)
Estimated Monthly Market Rent $ X Gross Rent Multiplier = $ Indicated Value by Income Approach Summary of Income Approach (including support for market rent and GRM) Indicated Value by: Sales Comparison Approach $ Income Approach (if developed) $ This appraisal is made "as is", subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, subject to the following repairs or alterations on the basis of a hypothetical condition that the repairs or alterations have been completed, or subject to the following required inspection based on the extraordinary assumption that the condition or deficiency does not require alteration or repair:
Based on a complete visual inspection of the interior and exterior areas of the subject property, defined scope of work, statement of assumptions and limiting conditions, and appraiser's certification, my (our) opinion of the market value, as defined, of the real property that is the subject of this report is $ , as of , which is the date of inspection and the effective date of this appraisal.
Freddie Mac Form 465 March 2005 UAD Version 9/2011 Page 3 of 6 Fannie Mae Form 1073 March 2005 Item: 6
266
LF20702
Form 1073UAD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Individual Condominium Unit Appraisal Report File #
This report form is designed to report an appraisal of a unit in a condominium project or a condominium unit in a planned unit development (PUD). This report form is not designed to report an appraisal of a manufactured home or a unit in a cooperative project.
This appraisal report is subject to the following scope of work, intended use, intended user, definition of market value, statement of assumptions and limiting conditions, and certifications. Modifications, additions, or deletions to the intended use, intended user, definition of market value, or assumptions and limiting conditions are not permitted. The appraiser may expand the scope of work to include any additional research or analysis necessary based on the complexity of this appraisal assignment. Modifications or deletions to the certifications are also not permitted. However, additional certifications that do not constitute material alterations to this appraisal report, such as those required by law or those related to the appraiser's continuing education or membership in an appraisal organization, are permitted.
SCOPE OF WORK: The scope of work for this appraisal is defined by the complexity of this appraisal assignment and the reporting requirements of this appraisal report form, including the following definition of market value, statement of assumptions and limiting conditions, and certifications. The appraiser must, at a minimum: (1) perform a complete visual inspection of the interior and exterior areas of the subject unit, (2) inspect and analyze the condominium project, (3) inspect the neighborhood, (4) inspect each of the comparable sales from at least the street, (5) research, verify, and analyze data from reliable public and/or private sources, and (6) report his or her analysis, opinions, and conclusions in this appraisal report.
INTENDED USE: The intended use of this appraisal report is for the lender/client to evaluate the property that is the subject of this appraisal for a mortgage finance transaction.
INTENDED USER: The intended user of this appraisal report is the lender/client.
MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. *Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment.
STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS: The appraiser's certification in this report is subject to the following assumptions and limiting conditions:
1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it, except for information that he or she became aware of during the research involved in performing this appraisal.
The appraiser assumes that the title is good and marketable and will not render any opinions about the title.
2. The appraiser has provided a sketch in this appraisal report to show the approximate dimensions of the improvements.
The sketch is included only to assist the reader in visualizing the property and understanding the appraiser's determination of its size.
3. The appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency (or other data sources) and has noted in this appraisal report whether any portion of the subject site is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, express or implied, regarding this determination.
4. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand, or as otherwise required by law.
5. The appraiser has noted in this appraisal report any adverse conditions (such as needed repairs, deterioration, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the research involved in performing this appraisal. Unless otherwise stated in this appraisal report, the appraiser has no knowledge of any hidden or unapparent physical deficiencies or adverse conditions of the property (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) that would make the property less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, this appraisal report must not be considered as an environmental assessment of the property.
6. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that the completion, repairs, or alterations of the subject property will be performed in a professional manner.
Freddie Mac Form 465 March 2005 UAD Version 9/2011 Page 4 of 6 Fannie Mae Form 1073 March 2005 Item: 6
267
LF20702
Form 1073UAD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Individual Condominium Unit Appraisal Report File #
APPRAISER'S CERTIFICATION: The Appraiser certifies and agrees that:
1. I have, at a minimum, developed and reported this appraisal in accordance with the scope of work requirements stated in this appraisal report.
2. I performed a complete visual inspection of the interior and exterior areas of the subject property. I reported the condition of the improvements in factual, specific terms. I identified and reported the physical deficiencies that could affect the livability, soundness, or structural integrity of the property.
3. I performed this appraisal in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place at the time this appraisal report was prepared.
4. I developed my opinion of the market value of the real property that is the subject of this report based on the sales comparison approach to value. I have adequate comparable market data to develop a reliable sales comparison approach for this appraisal assignment. I further certify that I considered the cost and income approaches to value but did not develop them, unless otherwise indicated in this report.
5. I researched, verified, analyzed, and reported on any current agreement for sale for the subject property, any offering for sale of the subject property in the twelve months prior to the effective date of this appraisal, and the prior sales of the subject property for a minimum of three years prior to the effective date of this appraisal, unless otherwise indicated in this report.
6. I researched, verified, analyzed, and reported on the prior sales of the comparable sales for a minimum of one year prior to the date of sale of the comparable sale, unless otherwise indicated in this report.
7. I selected and used comparable sales that are locationally, physically, and functionally the most similar to the subject property.
8. I have not used comparable sales that were the result of combining a land sale with the contract purchase price of a home that has been built or will be built on the land.
9. I have reported adjustments to the comparable sales that reflect the market's reaction to the differences between the subject property and the comparable sales.
10. I verified, from a disinterested source, all information in this report that was provided by parties who have a financial interest in the sale or financing of the subject property.
11. I have knowledge and experience in appraising this type of property in this market area.
12. I am aware of, and have access to, the necessary and appropriate public and private data sources, such as multiple listing services, tax assessment records, public land records and other such data sources for the area in which the property is located.
13. I obtained the information, estimates, and opinions furnished by other parties and expressed in this appraisal report from reliable sources that I believe to be true and correct.
14. I have taken into consideration the factors that have an impact on value with respect to the subject neighborhood, subject property, and the proximity of the subject property to adverse influences in the development of my opinion of market value. I have noted in this appraisal report any adverse conditions (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) observed during the inspection of the subject property or that I became aware of during the research involved in performing this appraisal. I have considered these adverse conditions in my analysis of the property value, and have reported on the effect of the conditions on the value and marketability of the subject property.
15. I have not knowingly withheld any significant information from this appraisal report and, to the best of my knowledge, all statements and information in this appraisal report are true and correct.
16. I stated in this appraisal report my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the assumptions and limiting conditions in this appraisal report.
17. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or opinion of market value in this appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law.
18. My employment and/or compensation for performing this appraisal or any future or anticipated appraisals was not conditioned on any agreement or understanding, written or otherwise, that I would report (or present analysis supporting) a predetermined specific value, a predetermined minimum value, a range or direction in value, a value that favors the cause of any party, or the attainment of a specific result or occurrence of a specific subsequent event (such as approval of a pending mortgage loan application).
19. I personally prepared all conclusions and opinions about the real estate that were set forth in this appraisal report. If I relied on significant real property appraisal assistance from any individual or individuals in the performance of this appraisal or the preparation of this appraisal report, I have named such individual(s) and disclosed the specific tasks performed in this appraisal report. I certify that any individual so named is qualified to perform the tasks. I have not authorized anyone to make a change to any item in this appraisal report; therefore, any change made to this appraisal is unauthorized and I will take no responsibility for it.
20. I identified the lender/client in this appraisal report who is the individual, organization, or agent for the organization that ordered and will receive this appraisal report.
Freddie Mac Form 465 March 2005 UAD Version 9/2011 Page 5 of 6 Fannie Mae Form 1073 March 2005 Item: 6
268
LF20702
Kristian Lovegren
Appraisal Now
13542 Onkayha Circle
Irvine, CA 92620
949-274-5352
[email protected]
05/17/2024
05/16/2024
038023
CA
08/16/2025
20702 El Toro Rd
35, Lake Forest, CA 92630
460,000
No AMC
City Of Lake Forest
7 Whatney , Suite B, Irvine, CA 92618
Form 1073UAD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Individual Condominium Unit Appraisal Report File #
21. The lender/client may disclose or distribute this appraisal report to: the borrower; another lender at the request of the borrower; the mortgagee or its successors and assigns; mortgage insurers; government sponsored enterprises; other secondary market participants; data collection or reporting services; professional appraisal organizations; any department, agency, or instrumentality of the United States; and any state, the District of Columbia, or other jurisdictions; without having to obtain the appraiser's or supervisory appraiser's (if applicable) consent. Such consent must be obtained before this appraisal report may be disclosed or distributed to any other party (including, but not limited to, the public through advertising, public relations, news, sales, or other media).
22. I am aware that any disclosure or distribution of this appraisal report by me or the lender/client may be subject to certain laws and regulations. Further, I am also subject to the provisions of the Uniform Standards of Professional Appraisal Practice that pertain to disclosure or distribution by me.
23. The borrower, another lender at the request of the borrower, the mortgagee or its successors and assigns, mortgage insurers, government sponsored enterprises, and other secondary market participants may rely on this appraisal report as part of any mortgage finance transaction that involves any one or more of these parties.
24. If this appraisal report was transmitted as an "electronic record" containing my "electronic signature," as those terms are defined in applicable federal and/or state laws (excluding audio and video recordings), or a facsimile transmission of this appraisal report containing a copy or representation of my signature, the appraisal report shall be as effective, enforceable and valid as if a paper version of this appraisal report were delivered containing my original hand written signature.
25. Any intentional or negligent misrepresentation(s) contained in this appraisal report may result in civil liability and/or criminal penalties including, but not limited to, fine or imprisonment or both under the provisions of Title 18, United States Code, Section 1001, et seq., or similar state laws.
SUPERVISORY APPRAISER'S CERTIFICATION: The Supervisory Appraiser certifies and agrees that:
1. I directly supervised the appraiser for this appraisal assignment, have read the appraisal report, and agree with the appraiser's analysis, opinions, statements, conclusions, and the appraiser's certification.
2. I accept full responsibility for the contents of this appraisal report including, but not limited to, the appraiser's analysis, opinions, statements, conclusions, and the appraiser's certification.
3. The appraiser identified in this appraisal report is either a sub-contractor or an employee of the supervisory appraiser (or the appraisal firm), is qualified to perform this appraisal, and is acceptable to perform this appraisal under the applicable state law.
4. This appraisal report complies with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place at the time this appraisal report was prepared.
5. If this appraisal report was transmitted as an "electronic record" containing my "electronic signature," as those terms are defined in applicable federal and/or state laws (excluding audio and video recordings), or a facsimile transmission of this appraisal report containing a copy or representation of my signature, the appraisal report shall be as effective, enforceable and valid as if a paper version of this appraisal report were delivered containing my original hand written signature.
APPRAISER
Signature
Name
Company Name
Company Address
Telephone Number
Email Address
Date of Signature and Report
Effective Date of Appraisal
State Certification #
or State License #
or Other (describe)
State #
State
Expiration Date of Certification or License
ADDRESS OF PROPERTY APPRAISED
APPRAISED VALUE OF SUBJECT PROPERTY $
LENDER/CLIENT
Name
Company Name
Company Address
Email Address
SUPERVISORY APPRAISER (ONLY IF REQUIRED)
Signature
Name
Company Name
Company Address
Telephone Number
Email Address
Date of Signature
State Certification #
or State License #
State
Expiration Date of Certification or License
SUBJECT PROPERTY
Did not inspect subject property
Did inspect exterior of subject property from street
Date of Inspection
Did inspect interior and exterior of subject property
Date of Inspection
COMPARABLE SALES
Did not inspect exterior of comparable sales from street Did inspect exterior of comparable sales from street
Date of Inspection
Freddie Mac Form 465 March 2005 UAD Version 9/2011 Page 6 of 6 Fannie Mae Form 1073 March 2005 Item: 6
269
LF20702
20702 El Toro Rd
35, Lake Forest, CA 92630
Pheasant Creek
1 N;Res;
Fee Simple
376
Pool/Spa
Greenbelts
Level 1
N;Res;
RT1L;Contemp
Q4
42 C3
3 1
1.0 686
0sf
Average
FAU/Individual
Noted
1g;Owned
Patio
CRMLS/RealQuest
05/16/2024
20702 El Toro Rd
387, Lake Forest, CA 92630
Pheasant Creek
1 0.26 miles E
450,000
655.98
CRMLS #OC23189837;DOM 4
Real Quest Document #270139
ArmLth
Conv;0
s11/23;c10/23
N;Res;
Fee simple
376
Pool/Spa
Greenbelts
Level 1
N;Res;
RT1L;Contemp
Q4
41 0
C3
3 1
1.0 686
0sf
Average
FAU/Individual
Noted
1g;Owned
Patio
0 0.0
0.0 450,000
CRMLS/RealQuest
05/16/2024
20702 El Toro Rd
349, Lake Forest, CA 92630
Pheasant Creek
1 0.23 miles E
460,000
670.55
CRMLS #OC24082651;DOM 16
Pending Sale
Listing
c05/24
N;Res;
Fee simple
376
Pool/Spa
Greenbelts
Level 1
N;Res;
RT1L;Contemp
Q4
41 0
C3
3 1
1.0 686
0sf
Average
FAU/Individual
Noted
1g;Owned
Patio
0 0.0
0.0 460,000
CRMLS/RealQuest
05/16/2024
4 5
6 4
5 6
The subject property was purchased on 06/03/2002 for $135,500 with Document # 465748. Sales history of the subject and comparable properties does not adversely effect the final estimate of value.
Comparable sale # 5 is a pending sale and can be verified through the listing agent Suzanne Goldman at 949-278-5017.
I have not performed any services, as an appraiser or in any other capacity, on the subject property within the three-year period immediately preceding acceptance of this assignment.
The appraiser has not identified any purchaser, borrower or seller as an intended user of this appraisal, and no such party should use or rely on this appraisal for any purpose. Such parties are advised to obtain an appraisal from an appraiser of their own choosing if they require an appraisal for their own use. Any reference to or use of this appraisal report by a purchaser, borrower or seller for their own purposes, including without limitation for the purposes of a property purchase decision or an appraisal contingency in a purchase agreement, is at such party’s own risk and is not intended or authorized by the appraiser.
The appraiser has measured the subject under ANSI methodology. Appraiser cannot warrant that the comparables used within the report were measured using the same method.
Form 1073UAD.(AC) - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Individual Condominium Unit Appraisal Report File #
SALES C O M PAR ISO N APPR O AC HSALE / TR AN SFER H ISTO RYAN ALYSIS / C O M M EN TS FEATURE SUBJECT COMPARABLE SALE # COMPARABLE SALE # COMPARABLE SALE # Address and
Unit #
Project Name and
Phase
Proximity to Subject
Sale Price $ $ $ $
Sale Price/Gross Liv. Area $ sq. ft. $ sq. ft. $ sq. ft. $ sq. ft.
Data Source(s)
Verification Source(s)
VALUE ADJUSTMENTS DESCRIPTION DESCRIPTION +(-) $ Adjustment DESCRIPTION +(-) $ Adjustment DESCRIPTION +(-) $ Adjustment Sales or Financing
Concessions
Date of Sale/Time
Location
Leasehold/Fee Simple
HOA Mo. Assessment
Common Elements
and Rec. Facilities
Floor Location
View
Design (Style)
Quality of Construction
Actual Age
Condition
Above Grade Total Bdrms. Baths Total Bdrms. Baths Total Bdrms. Baths Total Bdrms. Baths Room Count
Gross Living Area sq. ft. sq. ft. sq. ft. sq. ft.
Basement & Finished
Rooms Below Grade
Functional Utility
Heating/Cooling
Energy Efficient Items
Garage/Carport
Porch/Patio/Deck
Net Adjustment (Total) + - + - + -$ $ $
Adjusted Sale Price
of Comparables $ $ $
Net Adj. %
Gross Adj. %
Net Adj. %
Gross Adj. %
Net Adj. %
Gross Adj. %
Report the results of the research and analysis of the prior sale or transfer history of the subject property and comparable sales (report additional prior sales on page 3).
ITEM SUBJECT COMPARABLE SALE # COMPARABLE SALE # COMPARABLE SALE # Date of Prior Sale/Transfer
Price of Prior Sale/Transfer
Data Source(s)
Effective Date of Data Source(s)
Analysis of prior sale or transfer history of the subject property and comparable sales Analysis/Comments
Freddie Mac Form 465 March 2005 Fannie Mae Form 1073 March 2005UAD Version 9/2011 Item: 6
270
• Condo: Project Site - Highest and Best Use
The subject is a legally permissible use based on its current zoning. Also, the lot size, shape and land-to-building ratio allow the present structure and indicate a good utilization of the improvements. Based on current market conditions, the existing structure as a condominium is its financially feasible and maximally productive use. The highest and best use, as if vacant, would be to construct a condominium.
The quality and condition ratings for the subject and comparable sales are based upon personal inspection of the subject, and interpretation of the photos and comments for comparable sales from the MLS, and how they compare to the subject. The appraiser is not privy to and does not have access or knowledge of quality and condition ratings from other appraisers for the same comparable sales utilized. Additionally, the appraiser does not have knowledge or information regarding the adjustment methods utilized by other appraisers. There is a high degree of subjectivity associated with the condition and quality assessments of the sales comparables as the data compiled is limited county records, available MLS photos of the interior, and observation of the exterior. A best guess formula is often applied to the sales comparables in terms of quality and condition based on the data at hand and personal experience of the appraiser. Quality ratings are assigned based on the data available for each individual property (as previously discussed in this report) and according to the UAD definitions guidelines. Properties may qualify for the same quality rating based on the data available for the comparable and based on the UAD definition, but due to differences and individual market reactions to those differences, require an adjustment. In other words, it is possible for comparables to be rated the same as the subject and still require an adjustment.
Supplemental Addendum
Form TADD - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE LF20702
City Of Lake Forest
20702 El Toro Rd
Lake Forest
Orange
CA
92630
City Of Lake Forest
Borrower
Lender/Client
Property Address
City County State Zip Code
File No.
Item: 6
271
Form PICPIX.SR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Subject Photo Page
City Of Lake Forest
20702 El Toro Rd
Lake Forest
Orange
CA
92630
City Of Lake Forest
Subject Front
Sales Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
20702 El Toro Rd
686
3 1
1.0 N;Res;
N;Res;
Q4
42 Subject Rear
Subject Street
Borrower
Lender/Client
Property Address
City County State Zip Code
Item: 6
272
Form PIC6_LT - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Photograph Addendum
City Of Lake Forest
20702 El Toro Rd
Lake Forest
Orange
CA
92630
City Of Lake Forest
Kitchen
Dining Area
Living Room
Bedroom
Bathroom
Laundry
Borrower
Lender/Client
Property Address
City County State Zip Code
Item: 6
273
Form PIC6_LT - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Photograph Addendum
City Of Lake Forest
20702 El Toro Rd
Lake Forest
Orange
CA
92630
City Of Lake Forest
Patio
Detached Garage
AC Unit
Carbon Monoxide Detector
Front Door View
Address
Borrower
Lender/Client
Property Address
City County State Zip Code
Item: 6
274
Form PIC6_LT - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Photograph Addendum
City Of Lake Forest
20702 El Toro Rd
Lake Forest
Orange
CA
92630
City Of Lake Forest
Street
Borrower
Lender/Client
Property Address
City County State Zip Code
Item: 6
275
Form PICPIX.CR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Comparable Photo Page
City Of Lake Forest
20702 El Toro Rd
Lake Forest
Orange
CA
92630
City Of Lake Forest
Comparable
1 Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
20702 El Toro Rd
0.26 miles E
470,000
686
3 1
1.0 N;Res;
N;Res;
Q4
41 Comparable
2 Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
20702 El Toro Rd
0.12 miles E
457,000
686
3 1
1.0 N;Res;
N;Res;
Q4
44 Comparable
3 Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
20702 El Toro Rd
0.27 miles E
455,000
610
3 1
1.0 N;Res;
N;Res;
Q4
42 Borrower
Lender/Client
Property Address
City County State Zip Code
Item: 6
276
Form PICPIX.CR - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Comparable Photo Page
City Of Lake Forest
20702 El Toro Rd
Lake Forest
Orange
CA
92630
City Of Lake Forest
Comparable
4 Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
20702 El Toro Rd
0.26 miles E
450,000
686
3 1
1.0 N;Res;
N;Res;
Q4
41 Comparable
5 Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
20702 El Toro Rd
0.23 miles E
460,000
686
3 1
1.0 N;Res;
N;Res;
Q4
41 Comparable
6 Prox. to Subject
Sale Price
Gross Living Area
Total Rooms
Total Bedrooms
Total Bathrooms
Location
View
Site
Quality
Age
Borrower
Lender/Client
Property Address
City County State Zip Code
Item: 6
277
Borrower
City Of Lake Forest
LF20702
20702 El Toro Rd
Lake Forest
Orange
CA
92630
Lender/Client
City Of Lake Forest
The Purpose and Function of this appraisal is to estimate the value of the subject property as defined herein, and to assist the client in evaluating the subject property for a market value appraisal for personal purposes and is not intended for use by any other party for any other purpose. The appraiser is not responsible for unauthorized use of this report. 1) After receiving the assignment, an extensive search of all resources customary to the appraisal of residential real estate was made to determine general market trends, influences and other significant factors pertinent to the subject property. 2) A physical inspection of the subject property was performed, including photos. 3) A physical inspection with photos was taken of each comparable. 4) A written report was then completed, with appropriate adjustments being made to estimate an accurate estimate of value. 5) A complete report was then sent to the intended user.
The intended user of this appraisal report is the Lender/Client. The Intended Use is to evaluate the property that is the subject of this market value appraisal for personal purposes, subject to the stated Scope Of Work, purpose of the appraisal, reporting requirements of this appraisal report form, and Definition of Market Value. No additional Intended Users are identified by the appraiser.
The intended user of this appraisal report is the Lender/Client and/or assign. The Intended Use is to evaluate the property that is the subject of this appraisal for personal purposes, subject to the stated Scope Of Work, purpose of the appraisal, reporting requirements of this appraisal report form, and Definition of Market Value. No additional Intended Users are identified by the appraiser.
The subject property is not currently listed for sale.
The subject property was purchased on 06/03/2002 for $135,500 with Document # 465748. Sales history of the subject and comparable properties does not adversely effect the final estimate of value.
The estimated marketing time is estimated at 3 months. The exposure time is estimated at 3 months.
There were no Personal or non-realty Transfers recognized in this appraisal, or in this transaction.
As of the date of this report I, Kristian Lovegren, the signing Certified Real Estate Appraiser, have completed the minimum requirements of continuing education, and in accordance with the Competency Provision of the USPAP, I certify that my knowledge and experience are sufficient to allow me to complete this appraisal assignment.
EXTRAORDINARY ASSUMPTION: It is assumed that all structures, given value in this report are legally permitted as stated in this report. It is assumed that there are no unknown geological and or environmental adverse issues that would affect this appraisal. The subject structure is assumed to have no unknown mold or mildew adverse issues that would affect this appraisal. The physical characteristics of the comparables were either verified by city/county records, multiple listing service, or by owner/tenant verification. The comparables are assumed to have no sales concessions. The current zoning and the stated flood zone are assumed to be as stated in this report. The project information, monthly dues, including the number of rentals are assumed to be as stated. The CC&R's have not been supplied, and have not been reviewed, therefore it is assumed there is no adversities that would adversely affect this appraisal. If any of these noted items are found to be not true and or correct, I reserve the right to change my appraisal.
The global outbreak of a “novel coronavirus” known as COVID-19 was officially declared a pandemic by the World Health Organization (WHO).
The reader is cautioned, and reminded that the conclusions presented in this appraisal report apply only as of the effective date(s) indicated.
The appraiser makes no representation as to the effect on the subject property of any unforeseen event, subsequent to the effective date of the appraisal.
Kristian Lovegren
05/17/2024
038023
CA
08/16/2025
05/16/2024
Form FUA_LG - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE Appraisal Now 714-309-7318
FIRREA / USPAP ADDENDUM
File No.
Property Address
City County State Zip Code
Purpose
Scope of Work
Intended Use / Intended User
Intended Use:
Intended User(s):
History of Property
Current listing information:
Prior sale:
Exposure Time / Marketing Time
Personal (non-realty) Transfers
Additional Comments
Certification Supplement
1. This appraisal assignment was not based on a requested minimum valuation, a specific valuation, or an approval of a loan.
2. My compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result or the occurrence of a subsequent event.
Appraiser:
Signed Date:
Certification or License #:
Certification or License State:
Expires:
Effective Date of Appraisal:
Supervisory
Appraiser:
Signed Date:
Certification or License #:
Certification or License State:
Expires:
Inspection of Subject: Did Not Exterior Only Interior and Exterior Item: 6
278
LF20702
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE File No.
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements) Condition Ratings and Definitions
C1
The improvements have been recently constructed and have not been previously occupied. The entire structure and all components are new and the dwelling features no physical depreciation.
Note: Newly constructed improvements that feature recycled or previously used materials and/or components can be considered new dwellings provided that the dwelling is placed on a 100 percent new foundation and the recycled materials and the recycled components have been rehabilitated/remanufactured into like-new condition. Improvements that have not been previously occupied are not considered “new” if they have any significant physical depreciation (that is, newly constructed dwellings that have been vacant for an extended period of time without adequate maintenance or upkeep).
C2
The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. Dwellings in this category are either almost new or have been recently completely renovated and are similar in condition to new construction.
Note: The improvements represent a relatively new property that is well maintained with no deferred maintenance and little or no physical depreciation, or an older property that has been recently completely renovated.
C3
The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well maintained.
Note: The improvement is in its first-cycle of replacing short-lived building components (appliances, floor coverings, HVAC, etc.) and is being well maintained. Its estimated effective age is less than its actual age. It also may reflect a property in which the majority of short-lived building components have been replaced but not to the level of a complete renovation.
C4
The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building components have been adequately maintained and are functionally adequate.
Note: The estimated effective age may be close to or equal to its actual age. It reflects a property in which some of the short-lived building components have been replaced, and some short-lived building components are at or near the end of their physical life expectancy; however, they still function adequately. Most minor repairs have been addressed on an ongoing basis resulting in an adequately maintained property.
C5
The improvements feature obvious deferred maintenance and are in need of some significant repairs. Some building components need repairs, rehabilitation, or updating. The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains useable and functional as a residence.
Note: Some significant repairs are needed to the improvements due to the lack of adequate maintenance. It reflects a property in which many of its short-lived building components are at the end of or have exceeded their physical life expectancy but remain functional.
C6
The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety, soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many or most major components.
Note: Substantial repairs are needed to the improvements due to the lack of adequate maintenance or property damage. It reflects a property with conditions severe enough to affect the safety, soundness, or structural integrity of the improvements.
Quality Ratings and Definitions
Q1
Dwellings with this quality rating are usually unique structures that are individually designed by an architect for a specified user. Such residences typically are constructed from detailed architectural plans and specifications and feature an exceptionally high level of workmanship and exceptionally high-grade materials throughout the interior and exterior of the structure. The design features exceptionally high-quality exterior refinements and ornamentation, and exceptionally high-quality interior refinements. The workmanship, materials, and finishes throughout the dwelling are of exceptionally high quality.
Q2
Dwellings with this quality rating are often custom designed for construction on an individual property owner’s site. However, dwellings in this quality grade are also found in high-quality tract developments featuring residence constructed from individual plans or from highly modified or upgraded plans. The design features detailed, high quality exterior ornamentation, high-quality interior refinements, and detail. The workmanship, materials, and finishes throughout the dwelling are generally of high or very high quality.
UAD Version 9/2011 (Updated 4/2012)
Item: 6
279
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements) Quality Ratings and Definitions (continued)
Q3
Dwellings with this quality rating are residences of higher quality built from individual or readily available designer plans in above-standard residential tract developments or on an individual property owner’s site. The design includes significant exterior ornamentation and interiors that are well finished. The workmanship exceeds acceptable standards and many materials and finishes throughout the dwelling have been upgraded from “stock” standards.
Q4
Dwellings with this quality rating meet or exceed the requirements of applicable building codes. Standard or modified standard building plans are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Materials, workmanship, finish, and equipment are of stock or builder grade and may feature some upgrades.
Q5
Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades.
Q6
Dwellings with this quality rating are of basic quality and lower cost; some may not be suitable for year-round occupancy. Such dwellings are often built with simple plans or without plans, often utilizing the lowest quality building materials. Such dwellings are often built or expanded by persons who are professionally unskilled or possess only minimal construction skills. Electrical, plumbing, and other mechanical systems and equipment may be minimal or non-existent. Older dwellings may feature one or more substandard or non-conforming additions to the original structure
Definitions of Not Updated, Updated, and Remodeled
Not Updated
Little or no updating or modernization. This description includes, but is not limited to, new homes.
Residential properties of fifteen years of age or less often reflect an original condition with no updating, if no major components have been replaced or updated. Those over fifteen years of age are also considered not updated if the appliances, fixtures, and finishes are predominantly dated. An area that is ‘Not Updated’ may still be well maintained and fully functional, and this rating does not necessarily imply deferred maintenance or physical/functional deterioration.
Updated
The area of the home has been modified to meet current market expectations. These modifications are limited in terms of both scope and cost.
An updated area of the home should have an improved look and feel, or functional utility. Changes that constitute updates include refurbishment and/or replacing components to meet existing market expectations. Updates do not include significant alterations to the existing structure.
Remodeled
Significant finish and/or structural changes have been made that increase utility and appeal through complete replacement and/or expansion.
A remodeled area reflects fundamental changes that include multiple alterations. These alterations may include some or all of the following: replacement of a major component (cabinet(s), bathtub, or bathroom tile), relocation of plumbing/gas fixtures/appliances, significant structural alterations (relocating walls, and/or the addition of) square footage). This would include a complete gutting and rebuild.
Explanation of Bathroom Count
Three-quarter baths are counted as a full bath in all cases. Quarter baths (baths that feature only a toilet) are not included in the bathroom count. The number of full and half baths is reported by separating the two values using a period, where the full bath count is represented to the left of the period and the half bath count is represented to the right of the period.
Example:
3.2 indicates three full baths and two half baths.
UAD Version 9/2011 (Updated 4/2012)
Item: 6
280
Contemp
Contemporary
Sales Comparison Approach (Design)
Form UADDEFINE1 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE
UNIFORM APPRAISAL DATASET (UAD) DEFINITIONS ADDENDUM
(Source: Fannie Mae UAD Appendix D: UAD Field-Specific Standardization Requirements) Abbreviations Used in Data Standardization Text
Abbreviation Full Name Fields Where This Abbreviation May Appear ac Acres Area, Site
AdjPrk Adjacent to Park Location
AdjPwr Adjacent to Power Lines Location
A Adverse Location & View
ArmLth Arms Length Sale Sale or Financing Concessions
ba Bathroom(s) Basement & Finished Rooms Below Grade
br Bedroom Basement & Finished Rooms Below Grade
B Beneficial Location & View
Cash Cash Sale or Financing Concessions
CtySky City View Skyline View View
CtyStr City Street View View
Comm Commercial Influence Location
c Contracted Date Date of Sale/Time
Conv Conventional Sale or Financing Concessions
CrtOrd Court Ordered Sale Sale or Financing Concessions DOM Days On Market Data Sources
e Expiration Date Date of Sale/Time
Estate Estate Sale Sale or Financing Concessions
FHA Federal Housing Authority Sale or Financing Concessions GlfCse Golf Course Location
Glfvw Golf Course View View
Ind Industrial Location & View
in Interior Only Stairs Basement & Finished Rooms Below Grade Lndfl Landfill Location
LtdSght Limited Sight View
Listing Listing Sale or Financing Concessions
Mtn Mountain View View
N Neutral Location & View
NonArm Non-Arms Length Sale Sale or Financing Concessions BsyRd Busy Road Location
o Other Basement & Finished Rooms Below Grade
Prk Park View View
Pstrl Pastoral View View
PwrLn Power Lines View
PubTrn Public Transportation Location
rr Recreational (Rec) Room Basement & Finished Rooms Below Grade Relo Relocation Sale Sale or Financing Concessions
REO REO Sale Sale or Financing Concessions
Res Residential Location & View
RH USDA - Rural Housing Sale or Financing Concessions
s Settlement Date Date of Sale/Time
Short Short Sale Sale or Financing Concessions
sf Square Feet Area, Site, Basement
sqm Square Meters Area, Site
Unk Unknown Date of Sale/Time
VA Veterans Administration Sale or Financing Concessions w Withdrawn Date Date of Sale/Time
wo Walk Out Basement Basement & Finished Rooms Below Grade wu Walk Up Basement Basement & Finished Rooms Below Grade WtrFr Water Frontage Location
Wtr Water View View
Woods Woods View View
Other Appraiser-Defined Abbreviations
Abbreviation Full Name Fields Where This Abbreviation May Appear UAD Version 9/2011 (Updated 4/2012)
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LF20702
Form ACR2 - "TOTAL" appraisal software by a la mode, inc. - 1-800-ALAMODE File No.
DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions * granted by anyone associated with the sale. (Source: FDIC Interagency Appraisal and Evaluation Guidelines, October 27, 1994.) * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgement.
STATEMENT OF LIMITING CONDITIONS AND CERTIFICATION
CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions:
1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is valued on the basis of it being under responsible ownership.
2. Any sketch provided in the appraisal report may show approximate dimensions of the improvements and is included only to assist the reader of the report in visualizing the property. The appraiser has made no survey of the property.
3. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand, or as otherwise required by law.
4. Any distribution of valuation between land and improvements in the report applies only under the existing program of utilization. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used.
5. The appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous waste, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. This appraisal report must not be considered an environmental assessment of the subject property.
6. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties.
7. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice, and any applicable federal, state or local laws.
8. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner.
9. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer; consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) without having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media.
10. The appraiser is not an employee of the company or individual(s) ordering this report and compensation is not contingent upon the reporting of a predetermined value or direction of value or upon an action or event resulting from the analysis, opinions, conclusions, or the use of this report. This assignment is not based on a required minimum, specific valuation, or the approval of a loan.