81-018 Jules Duc Construction - Participation agreement for Below-Market-Rate Housing Project, Tract 6765A X'( 4P1)1.NG RL?QUES'PED B1'
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IN!'__>t6-19-039 CA #13-079 7019483
'.1',J-M.,P R17CORDING MAIL TO:
.it.!iy ,-;cot.t Mc.Kcnna
•;eru or Plaruiing Technician
t�' oL Cupertino PARTICIPATION AGREEMENT
10300 Torre Avenue
u�-X rtino, CA CITY OF CUPERTINO BELOW MARKET RATE HOUSING PROGRAM
91501.1
This agreement made and entered into this ) day of
1981, by and between the City of Cupertino,
California (hereinafter "City"), and Jules Duc Construction
Company, a corporation (hereinafter "developer"), witnesseth:
Whereas, developer is the owner and developer of that parcel
4, of real property commonly known as Lots 1 through 14, inclusive,
Tract No. 6765, and Assessor's Parcel Number 366-19-039, (which
parcel number also includes Lot 15), Cupertino, California;
Whereas, developer proposes to develop a thirteen (13) unit,
multiple family, residential housing project (hereinafter "project")
on the above-described property;
Whereas, On October 15, 1981, the City Council of the City of
Cupertino, by adoption of Tentative Map No. 17 -TM -79, approved
the development of said property in a manner consistent with the
terms and conditions herein contained, one of such conditions+.
being developer's participation in the Below Market Rate (BMR)
Housing Program of the City of Cupertino, and
Whereas, it is the intention of both parties to set forth
the covenant, conditions and restrictions applicable to BMR Program
t)art.icipation in this separate document.
Now, therefore, in consideration of the foregoing, and of
the mutual terms and covenants hereinafter set forth, the parties
hereby agree that developer shall participate in the above-described
program, subject to the following terms and conditions:
1. SATISFACTIONS OF CONDITIONS. CITY hereby agrees that
execution, recordation and performance of this agreement shall
constitute performance of those conditions of subdivision approval
for the PROJECT which relate to sale of units pursuant to the
CITY 's BMR Program and the incorporation of related terms in
the organizational documents for the PROJECT, and shall be sufficient
in that respect to permit recordation of the final subdivision map,
subject to City Council approval of said final map, satisfaction
of all other applicable conditions and compliance with all pro-
visions of law.
2. SALE OF UNITS,
Developers hereby agree that they shall
offer one unit for sale, based upon the unit description, as shown
below, to a houshold qualified by the City or its designee pursuant
to the City's Below Market Rate Housing Program and the guidelines
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established thereunder. The sales price of the unit shall be
established ninety (.90.) days prior to the projected date of occupancy
according to the formula set in the City policy based on the median
income levels for Santa Clara County as published by the San Fran-
cisco Office of the U.S. Department of Housing and Urban Development
which will be in effect on the projected date of Certificate of
Occupancy. Developer further agrees to insert in any deed or other
conveyance of any of said unit those certain terms, conditions and
restrictions attached hereto as "EXHIBIT A" and incorporated herein
by this reference,
Tract Number
.'
Lot Number Unit Type, No. of Bedrooms
6765 6 Plan B-1 3
3. OPINION OF COUNSEL. Concurrent with the execution hereof,
developer shall provide to City a letter of opinion from its legal
counsel stating that in the opinion of counsel this agreement
constitutes a valid and binding contract upon developer and that
the inclusion of the terms hereof in this agreement rather than in
the Declaration of Covenants, Conditions and Restrictions for the
project does not impair developer's legal ability to comply with
said terms nor the enforceability of this agreement by City.
4. RECORDATION. Developer shall execute this agreement,
cause the same to be acknowledged and deliver said executed and
acknowledged document to the City in such form as to permit its
recordation in the office of the County Recorder of the County
IWO
of Santa Clara, State of California. This agreement shall be recorded
at the same time as the final subdivision map for the Project is
recorded. City shall not be obligated to permit recordation of the
final subdivision map prior to such delivery of this agreement.
5. LIMITED CONSTRUCTION. Nothing contained herein shall be
deemed compliance with or waiver of any provision of law or condition
of subdivision approval except as expressly stated herein with respect
a
to conditions relating the BMR units.
6. AGREEMENT BINDING. The terms, covenants and conditions of
this agreement shall apply to, and shall bind, the heirs, successors,
executors, administrators, assigns, contractors, subcontractors and
grantees of both parties and shall be covenants running with the land.
7. WAIVERS. The waiver by any party of any breach or violation
of any term, covenant or condition of this agreement or of any pro-
vision, ordinance or law shall not be deemed to be a waiver of such
term, covenant, condition, ordinance or law or of any subsequent
breach or violation of the same or of any other term, covenant, con-
dition, ordinance or law.
8. COSTS AND ATTORNEY'S FEES. The prevailing party in any
action brought to enforce the terms of this agreement or arising out
of this agreement may recover its reasonable costs and attorney's
fees expended in connection with such an action from the other party.
IN WITNESS WHEREOF, CITY AND DEVELOPER have executed this
agreement the day and year first above written.
ATTEST: CITY OF CUPERTINO
p n
by:
�Cityvrk City Manager
JULES DUC CONSTRUCTION CO., INC.,
a corporation
Developer
by:
"JUES DUC JR.
Position: President
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STATE OF CALIFORNIA,
Notary Public ,n and for
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ACKNOWLEDGMENT—CORPORA ON
Approved:
ector of Planning Department
Approved as to Form:
Jtwu
Assistant City Attorneil
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In the case of the transfer from the original grantee to a
qualified purchaser, whenever the owner (including Grantee and
all successors in interest) of said Premises shall no longer desire
to own said Premises, owner shall notify City in writing to that
effect. Such notice shall be personally delivered or deposited in
the United States mail, postage prepaid, first class, certified,
addressed to City Manager, City of Cupertino, 10300 Torre Avenue,
Cupertino, California 95014. City, its assignee or designee, shall
then have the right to exercise its option to purchase said Premises
by delivery of written notice, by personal delivery or certified mail,
to the owner thereof at any time within sixty (60) days from the
receipt by City of such written notice from owner of intent to sell
or written notice of any other method or mode of termination of
ownership. As used hereinafter, "Grantee" shall refer to the
original grantee and all successors in interest.
If and in the event that City or its designee exercises its
option to purchase said Premises, close of escrow of said purchase
shall be within sixty (60) days of the opening of such escrow by,
either party, except in the case of the original transfer from the
developer to the City, its assignee or designee (see above). Such
escrow shall be opened upon delivery to owner of written notice of the
exercise of the option or as soon thereafter as possible. In the
case of the original transfer from the developer to the City, its
assignee or designee, closing costs shall be paid in the same manner
for Below Market Rate units as for the market rate units in the
development. In the case of subsequent transfers, closing costs
and title insurance shall be paid pursuant to the custom and practice
in the City of Cupertino, Santa Clara County, at the time of the
opening of such escrow. Any prepayment fees charged by seller's
lender will be paid by the buyer and that amount will be added to
the buyer's base purchase price to allow it to be recovered upon
resale by the buyer.
The seller will be required to obtain and pay for a structural
pest control report and to pay for any necessary corrective work.
The seller will not be obligated to perform preventative, but not
currently necessary, work; the buyer may perform such work at his
or her expense.
The purchase price shall be paid in cash at the close of escrow
or as may be otherwise provided by mutual agreement of buyer and sel-
ler.
The purchase price of the Premises shall be fixed at the lowest
amount arrived at via the following methods:
1. In the case of the original transfer from developer to
the City or its assigned interest, the purchase price
of the units shall be established ninety (90) days prior
to the projected date of occupancy according to the formula
set in the City policy based on the median income levels
for Santa Clara County as published by the San Francisco
Office of the U.S. Department of Housing and Urban Devel-
opment which will be in effect on the projected Certificate
of Occupancy.
2. In the case of all transfers other than the original transfer
from the developer to the City, its assignee or designee, the
purchase price shall be fixed at and is based upon:
a) The purchase price paid by the selling owner plus an
amount, if any, to compensate for any increase in the
cost of living as measured by the Consumer Price Index
for the San Francisco -Oakland area published by the
U. S. Department of Labor, Bureau of Labor Statistics
(herein "the Index"). For that purpose, the Index
prevailing on the date of purchase by Grantor of said
premises shall be compared with that estimated to be
prevailing sixty days subsequent to receipt by City of
notice of intent to sell.
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The yearly compounded increase in the Index, if any,
shall be computed and the base price shall be increased
in the same percentage; provided, however, that the price
as determined under subparagraph 2(a) shall in no event
be lower than the purchase price paid the selling owner.
b) The adjusted purchase price, as determined by subparagraph
2(a), shall be increased by the amount of any prepayment
fees charged by the previous owner's lender and paid by
the current seller at the time the current seller pur-
chased said Premises.
c) The adjusted purchase price, as determined under sub-
paragraph 2(a) and 2(b) shall be increased by the value of
any substantial or structural or permanent fixed improve-
ments which cannot be removed without substantial damage
to the premises or substantial or total loss of value of
said improvements as hereinafter provided. No such
adjustment shall be made except for improvements made
or installed by the selling owner. No improvement shall
be deemed substantial unless the actual initial costs of
the improvement to the owner exceeds one (1) percent of
the purchase price paid by the selling owner for the
premises. Notwithstanding the foregoing, improvements
to the common areas of a condominium or Planned Unit
Development made by a mandatory assessment by the
homeowner's association will be considered the same as
an improvement made directly by the owner. The one (1)
percent minimum expenditure requirement will not apply
to such assessments. In addition, replacement of
appliances, fixtures and equipment which were originally
sold as part of the unit will be deemed substantial
improvements if the replacement is required by the non-
operative or deteriorated nature of the original
appliance, fixture, or equipment. The replacement must
be of comparative value. The one (1) percent minimum
expenditure requirement will not apply to such replace -
ments. No adjustment shall be made for the value of
any improvements unless the owner shall present to the
City valid written documentation of the cost of said
improvements. The value of such improvements and the
amount by which the sales price shall be adjusted shall
be the appraised market value of the improvements when
considered as additions or fixtures to the premises
(i.e., the amount by which said improvements enhance
` the market value of the premises) at the time of sale.
City or its designee shall have an appraisal made by an
appraiser of its choice to establish the market value.
The owner may also have an appraisal made by an appraiser
of owner's choice to establish the market value. If
agreement cannot be reached, the average of the two
appraisals shall be termed the market price.
In all sales, the sales price, fixed as designated above, shall
be recorded clearly as a part of the deed transferring ownership.
Upon resale, an inspection of the Premises will be made by
the Chief Bulding Inspector of the City of Cupertino. Damage ddne
to the premises as a result of the selling owner's failure to ade-
quately maintain the premises will be identified by said Inspector
and the cost to repair them will be estimated. The seller has the
option, exercisable prior to the close of escrow of either repairing
the identified damaged conditions and receiving the full sale price
as established above or having the cost to repair the identified
damaged conditions deducted from the proceeds of the sale. Those
funds would remain in escrow and guarantee that the repairs be made.
In no event shall City become in any way liable to Grantee, nor
become obligated in any manner, by reason of the assignment of its
option to purchase, nor shall City be in any way obligated or liable
to Grantee for any failure of City's assignee to consummate a
purchase of -the Premises or to comply with the terms of any sale
agreement.
C
Until such time as the City's option to purchase is exercised,
waived or expires, said Premises and any interest in title thereto
shall not'be sold, leased, rented, assigned or otherwise transferred
to any person or entity except with the express written consent of
the City or its designee, which consent shall be consistent with
the City's goal of creating, preserving, maintaining, and protecting
housing in Cupertino for persons of low and moderate income.
In the event that City abandons or fails to exercise its option
to purchase said Premises within sixty (60) days after it receives
the notice of intent to sell, City will cause to be recorded in
Santa Clara County a notice of intent not to exercise its option
with respect to said Premises, and declaraing that the provisions
of this option are no longer applicable to said Premises, and shall
deliver a copy thereof to owner of said Premises. Said notice shall
be recorded within fifteen (15) days of City's decision not to
exercise its option, but no later than sixty (60) days after City
receives the notice of intent to sell. Upon recordation of said
notice, the provisions of this option shall no longer be applicable
to said Premises.
The following transfers of title or any interest therein are
not subject to the option provisions of this deed; Transfers by
gift, devise or inheritance to grantee's spouse or issue; transfers
of title to spouse as part of divorce or dissolution proceedings;
acquisition of title or interest therein in conjunction with marriage;
provided, however, that these covenants shall continue to run with
the title to said Premises following said transfers.
The provisions set forth in this deed relating to City's
option to purchase shall terminate and become void automatically
fifty (50) years following the date of recordation of this deed
unless extended in writing for one additional fifty (50) year
period at the option of the City and the same shall constitute
covenants which shall run with the land and be binding upon grantee(s)
and successors and assignee, and all parties having or acquiring
any right, title or interest in or to any part of the property.
Any attempt to transfer title or any interest therein in violation
of these covenants shall be void.
Grantee covenants to cause to be filed for record in the
Office of the Recorder of the County of Santa Clara a request for
a copy of any notice of default and of any notice of sale under any
deed of trust or mortgage with power of sale encumbering said Unit
pursuant to Section 2924(b) of the Civil Code of the State of
California. Such request shall specify that any such notice shall
be mailed to the City Manager, City of Cupertino, 10300 Torre Avenue,
Cupertino, California, 95014. In the event grantee fails to give
such notice to City, all surplus to which grantee may be entitled
pursuant to Section 727 of the Code of Civil Procedure of the State
of California shall be paid to City. If grantee gives proper notice,
any surplus to which grantee may be entitled pursuant to Code of
Civil Procedure Section 727 shall be paid as follows: That portion
of surplus (after payment of encumbrances), if any, up to, but not
to exceed, the net amount that grantee would have received after
payment of encumbrances under the formula set forth above had
City exercised its option to purchase the property on the date of
the foreclosure sale, shall be paid to grantee on the date of the
foreclosure sale: the balance of surplus, if any, shall be paid
to the City.
In the event that the Unit is destroyed and insurance proceeds
are distributed to grantee instead of being used to rebuild, or in
the event of condemnation, if proceeds thereof are distributed to
grantee, or in the event of termination of the condominium, liquida-
tion of the association and distribution of the assets of the
association to the members thereof, including grantee, any surplus
of proceeds so distributed remaining after payment of encumbrances
on said Unit shall be distributed as follows: That portion of the
surplus up to but not to exceed the net amount that grantee would
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have received under the formula set forth above had City exercised
its option to purchase the property on the date of the destruction,
condemnation evaluation date, or liquidation, shall be distributed
to grantee, and the balance of such surplus, if any, shall be
distributed to the City.
All notices required herein shall be sent to the following
addresses:
City: Declarant Purchaser
City Manager
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014
BY ACCEPTANCE of this deed, grantee accepts and agrees to be
bound by the covenants contained herein.
REC FEE
MICRO
LIEN NOT
SN1 P F
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0®19483
COLDER STAGE 7W M
APR 1 1981 8'00
A.M.
GEORGE A. MANN, Records►'
Sante CW Cmrq, Oti&I Records