HomeMy WebLinkAbout2011-100 Housing - The Landings at Winmore, LLC - Crosland, LLC - Community Home Trust - Development Agreement $300,000~ ivo
NORTH CAROLINA
ORANGE COUNTY
DEVELOPMENT AGREEMENT
This is an AGREEMENT between ORANGE COUNTY, a body politic and corporate, a
political subdivision of the State of North Carolina, (hereinafter referred to as the "County"),
THE LANDINGS AT WINMORE, LLC, a North Carolina limited liability company,
(hereinafter referred to as "The Landings"), CROSLAND, LLC, a North Carolina limited
liability company (hereinafter referred to as "Crosland") and COMMUNITY HOME TRUST,
a North Carolina no pr fit corporation (hereinafter referred to as "CHT"). The effective date of
this agreement is _/'~~~.
WITNESSTH
WHEREAS, the Orange County HOME Consortium has designated approximately
$300,000 in FY 2007 HOME funds to assist in the construction of 58 rental units known as The
Landings at Winmore in Carrboro; and
WHEREAS, the County is the lead entity of the Orange County HOME Consortium, so
designated in an agreement dated July 1, 2008 and as such is the lead entity in a representative
capacity for all members of the Orange HOME Consortium for the purposes of carrying out the
HOME Program in accordance with the Title II of the Cranston-Gonzalez National Affordable
Housing Act (Pub. L. 101-625), (42 U.S.C. 3535(d) et. seq.) (hereinafter referred to as the
"Act"), and as further defined in the Federal Program Requirements provided by the U.S.
Department of Housing and Urban Development; and
WHEREAS, The Landings is financing the construction of The Landings at Winmore
(hereinafter referred to as "the Project"),anew 58 unit affordable housing development owned
by The Landings dwelling units to 15 low income families earning less than 40% of the Area
Median Income, 21 families earning less than 50% of Area Median Income, and 22 families
earning less than 60% of Area Median Income, and which will remain affordable for low income
families throughout the term of the 99 year period of affordability. The Landings at Winmore is
located off Homestead Road in Carrboro, NC. The Project dwelling units are located on the
property more particularly described in EXHIBIT A attached hereto and made a part of this
Agreement (hereinafter referred to as "the Property"); and
WHEREAS, The Landings and Crosland agree to utilize HOME funds provided for the
purpose of constructing the Property as described in its HOME Program application dated
February 28, 2007 which is hereby incorporated into this Agreement and hereinafter referred to
as "the Project"; and
WHEREAS, The Landings, Crosland, and CHT have entered into a Homebuyer
Counseling and Managernent Contract dated July 31, 2009 (hereinafter referred to as
"Management Contract") that more specifically outlines the responsibilities of each entity in this
partnership which is attached hereto as EXHIBIT B; and
WHEREAS, notwithstanding any provision of this Agreement, the County, The
Landings, Crosland, and CHT hereto agree and acknowledge that this Agreement does not
constitute a commitment of funds or site approval, and that such commitment of funds or
approval may occur only upon satisfactory completion of an environmental review and receipt
by Orange County of a Release of Funds from the U.S. Department of Housing and Urban
Development under 24 CFR Part §58 if applicable. The parties further agree that the provision
of such funds to the project is conditioned on Orange County's determination to proceed with,
modify, or cancel the project based on the results of a subsequent environmental review.
NOW, THEREFORE, in consideration of the mutual covenants, promises, and representations
contained herein, it is agreed between the parties hereto as follows:
I. USE OF HOME FUNDS/SUBSIDY TYPE
1. The Owner shall perform the projects or tasks related to its allocation of HOME funds as
provided in Exhibit C and within the proposed budget outlined in Exhibit D. Exhibits C and D
are hereby made a part of this Agreement and are incorporated by reference, as it now reads or as
it maybe modified by the parties.
2. The Owner may not request disbursement of funds under this Agreement until the funds
are needed for payment of eligible costs. The amount of each request must be limited to eligible
costs as determined by Orange County staff.
3. Said funds shall be disbursed by check payable to the Owner.
4. HOME funds will be a fixed subsidy provided in the form of an amortized loan.
IL AMOUNT OF HOME FUNDS/LOAN TERMS
The County shall make available to the Owner up to Three Hundred Thousand Dollars
($300,000) at an interest rate of two percent (2%) pursuant to this Agreement. Said funds
shall be disbursed by the County to the Owner for performance of the services described in
Exhibit C. HOME funding will be provided in the form of an amortized loan with a 30 year term
at 2% simple interest per annum. A Deed of Trust and Promissory Note will secure the loan
funds.
The loan repayment terms shall be a thirty (30) year period to commence on April 1, 2011. The
Owner shall make consecutive monthly payments including principal and interest at the aforesaid
rate to the County of $1,108.86 per month until paid in full.
III. LIEN POSITION
Orange County hereby acknowledges that the terms and conditions of its (i) HOME Program
Development Agreement, (ii) Promissory Note, (iii) Deed of Trust and Security Agreement and
(iv) Declaration of Restrictive Covenants (collectively referred to as "Orange County Loan
Documents"), for The Landings at Winmore shall be and are expressly subordinated to the
following exceptions to title that encumber the property, as described in the Orange County Loan
Documents: (i) Deed of Trust in favor of the North Carolina Finance Deed of Trust in Favor of
North Carolina Housing Finance Agency for $4,995,112 recorded in Book 4895, Page 150,
Orange County Registry, (ii) Declaration of Land Use Restrictive Covenants for Section 1602
Exchange Program recorded in Book 4895, Page 162, Orange County Registry, (iii) UCC in
Favor of the North Carolina Housing Finance Agency recorded in Book 4895, Page 172, Orange
County Registry, (iv) Deed of Trust in Favor of the North Carolina Housing Finance Agency for
$410,160 recorded in Book 4895, Page 176, Orange County Registry, (v) UCC in Favor of North
Carolina Housing Finance Agency recorded in Book 4895, Page 188, Orange County Registry,
(vi) Deed of Trust in favor of Bank of America for $1,440,000 recorded in Book 5083, Page 80,
Orange County Registry, (vii) Deed Restrictions for Bank of America recorded in Book 5083,
Page 108, Orange County Registry, (viii) UCC in favor of Bank of America recorded in Book
5083, Page 114, Orange County Registry (ix) Deed of Trust in favor of Bank of America for
$550,000 recorded in Book 5083, Page 120, Orange County Registry, (x) UCC in favor of Bank
of America recorded in Book 5083, Page 148, Orange County Registry, and (xi) Deed of Trust in
favor of United Housing Associates for $250,000 recorded in Book 5083, Page 154 assigned to
Bank of America in Book 5095, Page 90, Orange County Registry.
IV. TIMELINESS
The Owner shall complete the Project within twelve (12) months from the date of this
Agreement. However, in the event of any alterations or additions or of circumstances beyond the
control of the Owner, which in the opinion of the Director of the County's Department of
Housing, Human Relations and Community Development will require additional time for
completion of the Project, then in that case, the time of completion shall be extended by the
County Manager in writing for a period of time not to exceed six (6) months. Any further
extensions will require the approval of the Orange County Board of County Commissioners.
IV. DURATION OF THE AGREEMENT
This Agreement will remain in effect for the Period of Affordability established below.
V. AFFORDABILITY REQUIREMENTS
Owner agrees to lease the Project dwelling units to 15 low income families earning less
than 40% of the area median income, 21 families earning less than 50% of area median income,
and 22 families earning less than 60% of area median income throughout the term of the 99 year
period of affordability. Area Median Income by family size is determined by the U.S.
Department of Housing and Urban Development and amended from time to time. Residential
leases will not exceed one year in term.
Each of the Project dwelling units must remain affordable for a period of ninety-nine
years. The Owner retains full responsibility for compliance with the affordability requirement
for each of the Project dwelling units, unless affordability restrictions are terminated due to the
sale of the Property to anon-qualified buyer in which event the Resale Provisions of this
Agreement pertain. The Owner shall assure compliance with affordability of each of the Project
dwelling units as provided in the Declaration on the Property. This Declaration shall constitute
and remain a lien on the Property during the period of affordability.
It is further the responsibility of the Owner to rerecord the Declaration of Restrictive
Covenants periodically and no less often than one day less than every 30 years from the date
hereof for the purpose of renewing the rights of first refusal in the Property or portion thereof
including any leasehold interest in the Property or portion thereof. Orange County retains the
right to, periodically and every 30 years after the first recording of the Declaration of Restrictive
Covenants on the Property to register, with the Register of Deeds of Orange County, a notice of
preservation of the Restrictive Covenants on the Properly as provided in North Carolina General
Statute § 47B-4 or any comparable preservation law in effect at the time of the recording of the
notice of preservation. It is the intent of this Agreement that the 99 year duration of this
Declaration of Restrictive Covenants be accomplished and that any future owner of the Property,
Owner, and Orange County will do what is necessary to ensure that the same is not extinguished
by N.C. Gen. Stat. § 41-29 or any comparable law purporting to extinguish, by the passage of
time, preemptive rights in the Property and by the Real Property Marketable Title Act or any
comparable law purporting to extinguish, by the passage of time, non possessory interests in real
property. Any future owner, Owner and Orange County agree to do what each must do to
accomplish the 99-year duration of this Declaration of Restrictive Covenants.
Resale Provisions
The Owner shall assure compliance with affordability of each of the Project dwelling units
through the Declaration of Restrictive Covenants of which this document is incorporated into.
The Declaration of Restrictive Covenants shall include at least the following elements in their
resale provisions for the Improvements:
If Owner no longer uses the Property as rental property or is unable to continue ownership, then
the Owner must sell, transfer, or otherwise dispose of its interest in the Property only to an
agency with similar interest in affordable housing and serve families with incomes not exceeding
80% of the area median household income by family size, as determined by the U.S. Department
of Housing and Urban Development at the time of the transfer. The non-profit fund, foundation,
or corporation of like purposes must have established its tax-exempt status under Section 501 (c)
(3) of the Internal Revenue Code.
However, if the Property is sold, transferred, or otherwise disposed of to other than an agency
with similar interest in affordable housing during the term of affordability, the Right of First
Refusal provision of the County's Long-Term Housing Affordability Policy must be followed
and the net sales proceeds (sales price less: (1) selling cost, (2) the unpaid principal amount of
the original first mortgage and (3) the unpaid principal amount of the initial County contribution
and any other initial government contribution secured by a deferred payment promissory note
and deed of trust) or "equity" will be divided 50/50 by the seller of the Property and the County.
The resale provision shall remain in effect for the full affordability period - 99 years.
VI. OWNER PERFORMANCE UNDER THIS AGREEMENT
Owner agrees and authorizes the County to conduct on-site reviews, examine client and
contractor records, client applications and to conduct any other procedures or practices to assure
compliance with these provisions.
Owner agrees to not violate any State or Federal laws, rules or regulations regarding a direct or
indirect illegal interest on the part of any employee or elected official of the Owner in the Project
or payments made pursuant to this Agreement.
Owner agrees that to the best of its knowledge, neither the Project nor the funds provided
therefore, and the personnel employed in the administration of the program shall be in any way
or to any extent engaged in the conduct of political activities in contravention of Chapter 15 of
Title 5, United States Code, referred to as the Hatch Act.
Owner shall adopt the audit requirements of the Office of Management and Budget (hereinafter
"OMB") Circular A-110, "Grants and Agreements with Institutions of Higher Education,
Hospitals, and Other Nonprofit Organizations," and Circular A-122, "Cost Principles for
Nonprofit Organizations," and OMB Circular A-133, "Audits of Institutions of Higher Education
and Other Non-Profit Institutions." Owner shall submit to the County copy of said audit report.
Owner shall permit the authorized representatives of the County, HUD and the Comptroller
General of the United States to inspect and audit all data and reports of the Owner relating to its
performance under the Agreement.
County shall provide, upon request, copies of all laws, regulations and orders cited in this
Agreement.
Owner and County shall at all times observe and comply with Title 24 CFR Part 92 and all
applicable laws, ordinances or regulations of the Federal, State, County, and local government,
which may in any manner affect the performance of this Agreement, and Owner shall perform all
acts with responsibility to the County in the same manner as the County is required to perform
all acts with responsibility to the Federal government.
Owner hereby assures and certifies that it will comply with the regulations, policies, guidelines
and requirements with respect to the acceptance and use of Bond funds in accordance with the
policies of the County. Also, Owner certifies with respect to the Project that:
The Project will be conducted and administered in compliance with:
Title VI of the Civil Rights Act of 1964 (Pub. L. 88-352, 42 U.S.C. Sec 2000d et seq.) and
implementing regulations issued at 24 CFR Part I;
Title VIII of the Civil Rights Act of 1968 (Pub. L. 90-208, 42 U.S.C. Sec 2000d at seq.), as
amended; and that the Owner will administer all programs and activities related to housing and
community development in a manner to affirmatively further fair housing;
Section 109 of the Housing and Community Development Act of 1974, as amended; and the
regulations issued pursuant hereto;
Section 3 of the Housing and Urban Development Act of 1968, as amended;
Executive Order 11246-Equal Opportunity, as amended by Executive Orders 11375 and 12086,
and implementing regulations issued at 41 CFR Chapter 60;
Executive Order 11063-Equal Opportunity in Housing, as amended by Executive Order 12259,
and implementing regulations at 24 CFR Part 107;
Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112), as amended, and implementing
regulations when published in effect;
The Age Discrimination Act of 1975 (Pub. L. 94135), as amended, and implementing regulations
when published for effect;
The Fair Housing Act (42 U.S.C. 3601-20);
VII. ADMINISTRATION AND REPORTING REQUIREMENTS
Owner shall submit to the County a quarterly Progress Report no later than the fifth day of the
months of January, April; July; October until the activity has been reported completed.
Miscellaneous Provisions
a. Uniform Administrative Requirements. The Owner must comply with the
applicable uniform administrative requirements of 24 CFR §92.505.
b. Other Program Requirements. The Owner must carry out each activity in
compliance with all Federal laws and regulations described in 24 CFR, Part 92, subpart H except
that the subrecipient does not assume the responsibilities for environmental review or
intergovernmental review.
c. Affirmative Marketing. If HOME funds will be used for housing containing
five (5) or more assisted units, The Owner must prepare and submit an Affirmative Marketing
Plan to the County.
d. Termination of Agreement. The full benefit of the Project will be realized only
after the completion of the affordability periods for all Project dwelling units. It is the County's
intention that the full public benefit of the Project shall be completed under the auspices of the
Owner for the assisted units as follows:
In the event that the Owner is unable to proceed with any aspect of the Project in a timely
manner, and County and the Owner determine that reasonable extension(s) for completion will
not remedy the situation, then The Owner will retain responsibility for requirements for any
dwelling units assisted and County will make no further payments to the Owner.
In the event that the Owner, prior to the contract completion date, is unable to continue to
function due to, but, not limited to, dissolution or insolvency of the organization, its filing a
petition for bankruptcy or similar proceedings, or is adjudged bankrupt or fails to comply or
perform with provisions of this agreement, then the Owner shall, upon the County's request,
convey to the County the Property assisted with HOME funds. Conveyance shall be at the sole
discretion of County and on a Project dwelling unit by Project dwelling unit basis.
Conveyance shall be on the terms set forth herein:
Conveyance shall occur within thirty (30) days of County and the Owner's agreement of the
Owner's inability to continue as a viable organization. The Owner shall convey the Property to
the County by general warranty deed, free and clear of all liens and encumbrances of record
except those which create a beneficial interest in County (Declaration of Restrictive Covenants
and Deed of Trust).
e. Default, Remedies. This Agreement may be terminated by anon-defaulting
party upon an event of default hereunder, after written notice thereof and thirty (30) days grace
period in which the defaulting party may act to cure. As used herein, the term "an event of
default" shall mean and refer to a failure or act of omission by either party with respect to any
undertaking, obligation, covenant or condition as set forth in this Agreement. With respect to
any event of default, the non-defaulting party may exercise any right available to it at law or in
equity with respect to such default.
f. Books and Records. The Owner shall maintain records of its grant requirements
under this contract for a period of not less than five (5) full fiscal years following the contract
completion date.
i. The Owner shall ensure access to records and financial statements, as necessary,
to provide effective monitoring and evaluation of project performance. Additionally, The Owner
shall submit a copy of its annual audit to the County.
ii. Upon reasonable advance notice, County or its authorized representatives may
from time to time inspect, audit, and make copies of any of The Owner records that relate to this
contract. If any audit by County discloses that payments to The Owner were in excess of the
amount to which The Owner was entitled under this contract, The Owner shall promptly pay to
County the amount of such excess. If the excess is greater than 1 % of the contract amount, The
Owner shall also reimburse County its reasonable costs incurred in performing the audit.
iii. The Owner shall maintain files of all tenants, regardless of length of occupancy,
residing in assisted units. Documentation shall verify eligibility for federal assisted housing at
the point of initial tenancy and every subsequent year thereafter for the period of affordability.
Information maintained shall include: tenant income level; name of family members; ethnic data;
family type - e.g. female head of household; disability status; and monthly rent.
iv. The Owner shall maintain records verifying the affordability of the dwelling units.
g. Notices. Any Notice shall be in writing and shall be given by depositing the same
in the United States mail, post-paid and registered or certified, and addressed to the party to be
notified, with return-receipt requested, or by delivering the same in person to an officer or
principal of such party. Notice deposited in the mail in the manner here in above described shall
be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless
changed as hereinafter provided, be as follows:
To the County: Orange County
c/o Housing and Community Development
Department
P.O. Box 8181
Hillsborough, NC 27278
ATTN: Director
ii. To The Owner: The Landings at Winmore, LLC
c/o Crosland
227 West Trade Street, Suite 800
Charlotte, NC 28202
iii. To CHT: Community Home Trust
P. O. Box 307
Carrboro, NC 27510
ATTN: Director
Neither the County nor Owner or CHT may change the person or address to which any future
Notice shall be given as herein provided.
h. No Assignment. No transfer or assignment of the interest of the Owner in this
Agreement shall occur without the prior written consent of the County; neither may The Owner
or CHT assign this Agreement without the prior written consent of County.
i. Conflict of Interest. The Owner and CHT agrees to abide by the provisions of
24 CFR 570.611 with respect to conflicts of interest, and covenants that it presently has no
financial interest and shall acquire any financial interest, direct or indirect, that would conflict in
any manner or degree with the performance of services required under this Agreement. The
Owner and CHT further covenants that in performance of this Agreement no person having such
a financial interest shall be employed or retained by the Owner or CHT hereunder. These
conflicts of interest provisions apply to any person who is an employee, agent, consultant, or
elected official or appointed official of the County,' or any designated public agencies or
subrecipients that are receiving funds under the County HOME Investment Partnership Program.
j. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
k. Indemnification. To the extent legally possible, The Owner and CHT shall
indemnify and hold County, its officers, agents, and employees, harmless from and against any
and all claims, actions, liabilities, costs, including attorney fees and other costs of defense,
arising out of or in any way related to any act or failure to act by The Owner and CHT, its
employees, agents, officers, and contractors in connection with this contract. In the event any
such action or claim is brought against County, The Owner and CHT shall, upon County's
tender, defend the same at The Owner's or CHT's sole cost and expense, promptly satisfy any
judgment adverse to County or to County and The Owner and CHT jointly, and reimburse the
County for any loss, cost, damage, or expense, including attorney fees suffered or incurred by the
County.
1. Subcontracting. The Owner and CHT shall not subcontract work under this
Agreement, in whole or in part, without the County's prior written approval. The Owner and
CHT shall require any approved subcontractor to agree, as to the portion subcontracted, to
comply with all applicable federal, state, and local laws, rules, ordinances, and regulations at all
times and in the performance of the work and to comply with all applicable obligations of The
Owner and CHT specified in this contract. Notwithstanding County's approval of a
subcontractor, The Owner and CHT shall remain obligated for full performance of this contract
and County shall incur no obligation to any subcontractor. The Owner and CHT shall
indemnify, defend, and hold County harmless from all claims of its contractors.
m. No Joint Venture or Agency. The County, The Owner and CHT each agree and
acknowledge that nothing contained herein or otherwise, including, without limitation, any act of
the County, The Owner or CHT under this Agreement, shall be deemed or construed to create
any relationship of joint venture, partnership or agency between the parties.
n. Effect of Waiver or Forbearance. No failure by the County to insist upon the
strict performance of any term or condition of this Agreement, or to exercise any right or remedy
upon the breach by The Owner or CHT of any of its obligations, agreements, or covenants
hereunder, shall be a waiver of such affected term or condition or of such breach; nor shall any
forbearance by the County to seek a remedy for any breach by The Owner or CHT be a waiver
by the County of its rights and remedies with respect to that or any other breach.
o. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of North Carolina. Any litigation arising out of this Agreement
shall be brought in courts sitting in North Carolina, with venue in Orange County.
p. Severability. The provisions of this Agreement are independent of and separable
from each other, and no provision shall be affected or rendered invalid or unenforceable by the
fact that for any reason any other provision may be invalid or unenforceable in whole or in part.
If any provision of this Agreement or the application thereof to any person or circumstances
shall, to any extent, be or become invalid or unenforceable, the remainder of this Agreement, or
the application of such provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, shall not be affected thereby, and each provision of this
Agreement shall be valid and be enforced to the fullest extent permitted by law. The County,
The Owner and CHT agree to substitute for such provision of this Agreement or the application
thereof determined to be invalid or unenforceable, such other provision as most closely
approximates, in a lawful manner, such invalid, illegal or unenforceable provision. If the
County, The Owner and CHT cannot agree, they shall apply to a court of competent jurisdiction
to substitute such provision as the court deems reasonable and judicially valid, legal and
enforceable. Such provision determined by the court shall automatically be deemed part of this
Agreement ab initio.
q. Equal Opportunity. The Owner and CHT shall not discriminate against any
employee or applicant for employment because of race, color, religion, sex, national origin,
political affiliation or belief, age, handicap, or familial status in the implementation of the
Project.
r. Headings. Headings are for convenience only and shall not be used to interpret or
construe its provision.
s. Gender; Singular and Plural. As used herein, the neuter gender includes the
feminine and masculine. The masculine includes the feminine and neuter, and the feminine
includes the masculine and neuter and each includes a corporation, partnership or other legal
entity when the context so requires. The singular number includes the plural and vice versa,
whenever the context so requires.
t. Recording. The parties hereto agree that upon notice to the other and at its own
cost and expense, a party may record this Agreement in the Office of Register of Deeds for
Orange County.
u. Compliance with Laws. To the extent applicable, each party hereto agrees to
comply with all laws, ordinances and regulations affecting the Property from and after the date
hereof. Without limiting the generality of the foregoing, The Owner and CHT shall comply with
all federal, state and local laws, regulations and ordinances applicable to the expenditure of funds
provided by the County, to purchase and develop the Property.
v. Publicity; Signage. The Owner and CHT agrees to provide such publicity with
respect to the County's participation in the development of the Property as the County shall
reasonably require. Any signage at the Property shall acknowledge the County's role and
contribution.
w. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall constitute on and the
same instrument.
x. No Third Party Rights. The parties hereto covenant and agree that nothing
contained in this Agreement or any act by the County, The Owner or CHT shall be deemed or
construed by the parties or any third party to create any relationship of third party beneficiary,
including third party principal or agent, or to create any right, claim or cause of action against the
County, The Owner or CHT or any of their respective officers, agents or employees by any third
party.
y. Performance of Government Functions. Notwithstanding anything in this
Agreement which may be to the contrary, nothing contained in this Agreement shall in any way
stop, limit or impair the County from exercising or performing any regulatory, policing or
governmental powers or functions with respect to the Property including, without limitation,
inspection of the Property in the performance of such functions.
z. Duration of Agreement. This Agreement shall be effective on the date of
execution and shall remain in effect during the period of affordability required by the Act under
24 CFR Part 92.
IN WI"I'NI?SS W111;RI:C~)l~, the parties hereto, intending io be legally bound, have set their hands and
seals on the day and year first above written,
A'I'l•l~.S'1
D a akcr
(; erk to the l3oard of• Comn~issi~
Approved as to c-rn) and legality
)ctte Moore, Stal'i•ntiorncy
QItANta~; .OIJN'1'Y, )R'1'1~1 CAKOL)tNA
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_ ~._~ _ _ . __ / ~_~ _ 1_ __... _,~
Drank ~ i ~, •h•., C unty Manager
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~I•Ills doclll))ent l)i-5 been 1)1'eaudlted In aCCC)rdAnC ~' ,~~° al Government a11d fiscal Control
Jet. ~ Qrai
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__ ~, ./ .Clarence Grier, hins-ncc Director
Tllh: LANll]NCS A'1' WINMORh'. L1~C.
a North Carolina limited liability company
13y: Crosland landings 1..1.C, a Nortl) Cartlina
limited liability company, Manager
13yr Crosland ~lfi'ordablc Development, L.LC',
a North Carolina limited liability company, Manager
[3y: Crosland Interests, 1.1.C, a North Carolina
limited liability company, Manager
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David Ravin
Its trice-President
Attest:
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('.RO~T~ANI),1,L(".,
a T~ot~ll~ Carolina lin~iled liability company
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COMM~1'Y I1OM1+, T215T, 11VC.
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EXHIBIT A
Property Description
Lying and being in Orange County, North Carolina, and more particularly described as follows:
BEING all of Lot 177, containing a recombined area of 1.40 acres, 61,069 square feet, more or
less; all of Lot 178, containing a recombined area of 0.95 acres, 41,333 square feet, more or less;
and all of New Lot 180, containing 0.05 acres, 2,250 square feet, more or less, all as shown on a
plat and survey prepared by The John R. McAdams Company Inc., dated 1/1/2010, and entitled
"Winmore Subdivision, recombination and Easement Dedication Plat" and recorded in Plat Book
106, Pages 102-1 04, inclusive, Orange County Registry.
EXHIBIT B
Management Contract
PROPERTY MANAGEMENT AGREEMENT
FOR
THE LANDINGS AT WINMORE APARTMENTS
THIS AGRE)MENT is made this 2~ day of 2010, between The
Landings at Winmore LLC ("Owner"), 227 W. Trade Street, Suite 800, Charlotte, North
Carolina 28202; and Crosland Residential Management Services, LLC ("Agent"), 227 W.
Trade Street, Suite 800, Charlotte, North Carolina 28202.
Back~ronnd and Purpose
A. Owner expects to complete by December 1, 2010, The Landing at Winmore
Apartments, containing tfty eight (58) dwelling units. All 5$ units will be operated as
qualified low-income units under Section 42 of the Internal Revenue Code.
B. Owner wishes to retain Agent to manage the facility.
Agreement
1. Appointment.
Owner appoints Agent as exclusive managing agent for the premises described in Section
2 hereof (the "Property"), and Agent accepts that appointment, upon the terms and
conditions set forth in this Agreement.
2. Property.
The property to be managed by Agent under this Agreement consists of the land,
buildings, and other improvements described below and shown on Exhibit A (the
"Property"), specifically, the new multifamily residential buildings for The Landings at
Winmore Apartments, located in Carrboro, North Carolina, containing 58 dwelling units,
together with related land and other improvements (the "Project").
3. Definitions.
As used in this Agreement:
(a) "Development Fiscal Year" shall mean the fiscal year of the Property, which shall
end December 31.
(f) "Gross Operating Revenue" shall mean all revenues generated by the Property
including but not limited to all rents paid by tenants occupying the Property together with
the Operating Subsidy paid by the Authority to the Owner.
(g) "HUD" shall mean the United States Department of Housing and Urban
Development, or any successor.
{h) "Management Plan" shall mean the plan prepared by Agent and approved by
Owner in accordance with Section 7 and attached hereto as Exhibit B.
(i} "Operating Account" shall mean the bank account established and maintained by
Agent in accordance with Section 14.
(rn) "Security Deposit Account" shall mean the bank account established and
maintained by Agent in accordance with Section 8 of this Agreement.
(n} "Tax Credit Restrictive Covenants" shall mean a Declaration of Land Use
Restrictive Covenants for Low-Income Housing Tax Credit Units between Developer and
the North Carolina Housing Finance Agency ("NCHFA"), which shall be recorded
against the Property in accordance with Section 42(h){6} of the Internal Revenue Code of
1986, as amended.
4. Statement of Work.
Agent shall furnish, or cause to be furnished, all tabor, materials, tools, equipment and
sen•ices necessary to perform and complete all of the work required for the management
and leasing of the Property, as described in this Agreement.
5. Agent's Compensation.
As compensation for all services rendered by Agent under this Agreement, Owner shall
pay Agent during the term hereof a monthly fee of Two Thousand
Two Hundred Sixty Two Dollars ($2,2b2} per month (calculated on an initial $39 per
unit/per month basis). Pa}-ment of the management fee shall commence the first date of
the first month after the first resident takes possession of a unit. The management fee
shall be adjusted, on an annual basis, commencing April 1, 2011 and as of April ls` of
each year thereafter (the "Adjustment Date''). The management fee set forth above shall
be adjusted for the increase in the Consumer Price Index for Urban Wage Earners and
Clerical Workers U.S. City Average, published by the United States Department of Labor
and Bureau of Labor Statistics (the "Index"), which is published for the calendar year
ended nearest to the Adjustment Date over the Index for the immediately preceding year.
Thus, if the Index, as published on December 31, 2011, is higher than the Index
published December 31, 2010, the management fee shall be increased by the percentage
increase incurred in the Index. At no time shall the management fee be adjusted to an
amount less than the amount set on the prior Adjustment Date. On or before March l5t of
each calendar year during the term of this agreement, Agent shall furnish Owner with a
statement setting forth the adjustment. Agent's compensation for the management of the
Public Housing Units may not exceed the limits of such fees established by any
applicable law, regulation, notice, or other applicable requirement of HUD or ,including
the Safe Harbor Standards for Mixed-Finance Rental Developments established by HUD,
dated April 9, 2003, or any successor document.
2
The fee earned in respect of any month during the term hereof may be withdrawn by
Agent from the Operating Account after the conclusion of each such month.
6. Term.
(a) The initial term of this Agreement shall be deemed to have begun on December
_, 2008 and end on December , 2011.
(b} After the initial term, the term of this Agreement shall be deemed renewed and
extended, automatically, for successive calendar months, unless either party gives the
other party at least 30 days prior written notice of its election not to renew at the
expiration of the renewal period specified in the notice.
(c) Notwithstanding the foregoing, this Agreement may be terminated by Owner for
cause, if Agent defaults in the performance or observance of any covenant or condition to
be performed or observed by Agent under this Agreement or the Regulatory and
Operating Agreement, and such default continues for a period of 30 days after written
notice of default from Owner. "Cause" shall be defined as any one or more of the
following events:
(i) dishonesty, malfeasance, or breach of fiduciary duty;
(ii) misappropriation of funds by Agency or any officers, employees, or agents of
Agent;
(iii} substantial or repeated failure of Agent to comply with any material term or
condition of this agreement or of the Management Plan;
(iv) past or present falsification by an officer, employee or agent of Agent or
any document or information submitted by Agent in connection with the subject mattex of
the Agreement, including falsification of by means of incomplete documents or
information;
{v) Agent's bankruptcy, insolvency, assignment for the benefit of creditors,
marshaling of assets or other events;
(vi) actions or inactions on the part of the Agent which endanger the safety of the
residents of the Property;
(vii) material failure to abide by any and all laws, regulations (including
regulations of the 1RS);
(vii) causing the Owner (or the Authority) to incur any material expense in
connection u~•ith events occurring with respect to the Property and not, in a timely
fashion, reimbursing or indemnifying the Owner (and the Authority) regarding same;
3
(d) Termination of Agent shall be conditioned upon and subject to the release of
Agent and its affiliates from any guarantee, indemnity or other financial assurance
provided by Agent or its affiliates to any tax credit investor (the "Tax Credit Investor"} in
connection with the development, financing and operation of the Project.
7. Management of the Property.
(a) Agent acknowledges and agrees: (i) that Owner is obligated to maintain and
operate the Property in compliance with all applicable requirements of Section 42 of the
IRS Code of Regulations, the Tax Credit Restrictive Covenants, and the regulations and
policies of the Owner (which shall, at ail times, be consistent with all applicable Tax
Credit requirements and regulations} and (ii) that Agent is responsible to Owner for the
management of the Property in accordance with the foregoing (and, in the event that
Agent believes that a conflict or potential conflict exists among the foregoing authorities,
Agent shall consult with Owner regarding the resolution thereof).
(b) Agent agrees to comply with the terms and conditions of the Management Plan.
Owner and Agent will comply with all applicable provisions of the Management Plan,
whether or not specific reference is made thereto in any particular provision of this
Agreement, so long as such provisions of the Management Plan are not in conflict with
this Agreement, and in the event of a conflict between the provisions of this Agreement
and the Management Plan, the provisions of this Agreement shall control. Agent will
continually review the Management Plan for the purpose of keeping Owner advised of
necessary or desirable changes.
(c) Agent agrees that one or more members of its full time on-site staff members of
the Property shall obtain one or more of the following certifications, training and
memberships within one year of the date of this Agreement, such that all of the following
shall have been undertaken by one or more of such full time on-site staff members of the
Property within one (I }year from the date hereof:
(i) tax credit certification;
(ii) fair housing training;
Upon obtaining such certificates or memberships or completing such training, such staff
members shall maintain such in good standing. At such time as any such staff person is
no longer on site on a full time basis or has failed to maintain such certifications in good
standing the Agent shall have one (1) year to either replace the staff member with a
qualifying staff member or arrange for an existing full time onsite staff member to obtain
such certificates or training.
Agent shall provide documentation to the Owner that any manager of the Property has
completed or will complete, within ninet}= (90) days after the beginning of lease-up,
training to include, but not Limited to the following areas: operating and understanding
separate software for rent receivables, tax credit eligibility°, UPCS standards, and Section
42 rules and regulations for determining income eligibility.
4
8. Resident Selection and Admission.
Agent will offer for rent and rent the Property's dwelling units in accordance with the
Management Plan, which will incorporate and reflect the following:
{a} Agent will take all applications on appropriate forms from applicants for
admission to the Property. All administrative functions in connection with determining
housing eligibility will be performed by Agent in accordance with the Owner's existing
policies and procedures, including application intake, applicant interview and screening,
verification procedures, determination of eligibility for admission to units in the Property,
qualification for preference, record maintenance, and waiting list maintenance.
(b) Agent will prepare all dwelling leases, on forms approved by Owner, and will
execute the same in Agent's name, identified thereon as agent for Owner. It will be the
responsibility of Agent to revise the leases as required by changes in applicable Tax
credit requirements and state laws, and to obtain Owner's approval prior to implementing
any amended lease.
(c) Agent will collect, deposit, and disburse security deposits, if required, in
accordance with the terms of each resident's lease. Security deposit amounts will be in
accordance with applicable guidelines of Owner. Security deposits will be deposited by
Agent, separate from all other accounts and funds, with a bank or other financial
institution whose deposits are insured by the Federal Deposit Insurance Corporation, or
any successor agency thereto created by law. The account ("Security Deposit Account")
will be carried in Agent's name and designated of record as "The Landings -Security
Deposit Trust Account." Agent will comply with any applicable state or local laws
regarding security deposits, including, without limitation, any applicable laws concerning
payment of interest thereon.
{d) A joint inspection of each dwelling unit will be conducted by Agent and the new
resident prior to move-in, and a checklist of the unit's condition will be signed by Agent
and the resident upon occupancy. Prior to a planned move-out, a joint inspection of the
unit will be conducted by Agent and the resident. Where required repairs exceed normal
wear and tear, Agent will resolve appropriate charges with the resident. Annual
inspections of occupied units will be conducted in order to ascertain the adequacy of care
of the units by the resident and any necessary repairs. Agent shall certify that service
requests are issued for each identified defect identified during the annual inspections. A
representative of the Owner and/or the Authority may choose to participate in the
inspections described in this section.
(e) As residents are accepted for occupancy, Agent will conduct an orientation
session with each family, including dialogue with the family regarding its interests and
expectations regarding community life, on-site. The residents' responsibilities relating to
the lease, rules and regulations and property policies will be discussed. Instructions will
be provided to the residents for steps they must take in contribution to the maintenance of
the unit. A listing of those who will be occupying each apartment will be kept, and
residents who add occupants to a unit in the course of the lease without Agent's approval
will be subject to eviction.
(f) Agent will conduct all recertifications of income required in respect of occupants
in any of the low income or tax credit units on the Property, and will in all respects itself
maintain, and shall require its employees and others with access to such information to
maintain the confidentiality of all such information furnished to it in this connection or in
any other where Agent receives confidential information, as required by applicable law.
9. Collection of Rents and Other Receipts.
Agent will collect when due all rents and charges due from residents for Owner's account
arising from occupancy of units in the Property.
(a) Rent pa}~ments will be accepted in the form of check or money order only, and
will be made to a location on site established by Agent for deposit into the Operating
Account established pursuant to Section 14 hereof. Cash will not be accepted at the site.
(b} Resident rents will be due and payable on the first day of the month and, as
provided in the resident tease agreement, rent will be considered delinquent after the 5th
day of the month. Residents will be sent a delinquent notice after the 5th day of the
month. Rent payments will be recorded as of date received by Agent. A late charge will
be assessed in accordance with the provisions of the resident lease against all payments
received after the fifth (5th) da}~ of the month.
(c} Partial payment of rent will not be accepted unless prior written approval has been
given to the resident by Agent's Site Manager, approval will be given only upon good
and sufficient cause documented in the resident's file. A Late charge will not be assessed
when such a prior arrangement has been made.
(d} Agent will generate a delinquency report on the sixth (5tt') day of each month. If a
resident fails to cure the delinquency by the ninth (9tt') day after notice, the lease shall be
terminated and the Agent shall commence eviction of the resident on the sixteenth (15th)
day of the month.
(e) The foregoing notwithstanding, no collection or eviction efforts shall be
undertaken that are in violation of HUD regulations.
10. Enforcement of Leases.
Agent will ensure full compliance by each resident with the terms of the lease. Voluntary
compliance will be emphasized. However, Agent may lawfully terminate any tenancy
when, in Agent's judgment, sufficient cause {including, but not limited to, nonpayment of
rent) for such termination occurs under the terms of the resident's lease.
6
For this purpose, Agent is authorized to consult with legal counsel to bring actions for
eviction and to execute notices to vacate and judicial pleadings incident to such actions;
provided, however, that Agent shall keep Owner informed of such actions and follow
such instructions as Owner may prescribe for the conduct of any such action. Agent shall
give written notice of lease termination in accordance with the provisions of the
applicable lease form and with any applicable requirements of federal, state, and local
law. Agent also shall keep Owner informed of actions taken. Reasonable attorneys' fees
and other necessary costs incurred in connection with such actions will be paid out of the
Operating Account as Property expenses.
11. Maintenance and Repair.
At all times during the term of this Agreement, Agent will maintain the Property in good
repair in accordance with {i) the terms of the Management Plan; (ii) all applicable rules,
ordinances, regulations and laws; and (iii) the reasonable expectations of Owner. This
witl include, but not be limited to, cleaning, painting, decorating, plumbing, carpentry,
grounds care, and such other maintenance and repair work as may be necessary, subject
to any limitations imposed by Owner in addition to those contained herein.
lncident thereto, the following provisions will apply:
(a) Agent will complete preventive maintenance activities in the most cost-effective
manner possible.
(b) Agent will contract with qualified independent contractors for repairs beyond the
capability of regular maintenance employees, in accordance with applicable procurement
policies of Owner.
{c) Agent will systematically receive and investigate all service requests from
residents, take such reasonable action thereon as may be justified and will keep records of
same. Emergency requests will be received and serviced on a twenty-four (24) hour
basis. Non-emergency services shall be completed within ten (10) days.
(d) Agent is authorized to purchase all materials, equipment, tools, appliances,
supplies and services reasonably necessary for property maintenance and repair. Agent
will secure for and credit to Owner any discounts, commissions or rebates obtained as a
result of such purchases.
{e} Notwithstanding any of the foregoing provisions, the prior approval of Owner will
be required for any expenditure which exceeds $2,500 in any one instance for labor,
materials, services, or other wise in connection with the maintenance and repair of the
Property, except for recurring expenses within the limits of the Management Plan,
operating budget (as approved by Owner}, or emergency repairs involving manifest
danger to persons or property, or required to avoid suspension of any necessary service to
the Property. In the latter event, Agent will inform Owner of the facts as promptly as
possible.
12. Utilities and Services.
Agent will make arrangements for provision of water, sewer, electricity, trash disposal,
exterminating services, decorating (if any), cable television. and telephone service in
accordance with the Management Plan. Subject to Owner's prior approval, Agent will
make such contracts as may be necessary to secure such utilities and services, acting as
agent for Owner. The Agent shall take all reasonable steps to insure that utility services
to the Units are not interrupted or, if interrupted, are restored in a timely manner.
13. Employees.
As Property requirements indicate, Agent may modify the number, qualifications and
duties of employees as it deems necessary. All such personnel will be employees of
Agent and will be hired, paid, supervised, and discharged by Agent. All employees of
Agent must meet all qualifications licensing and code requirements applicable to
assigned tasks and responsibilities.
Within the described staffing program, the Site Manager will have authority and
responsibility for organizing and directing the work of all on-site employees. As set forth
more fully in Section 14 below, Owner shall bear all direct costs associated with "on-
site" employees, including Site Manager and Assistant Site Manager (if any), clerical
staff, maintenance, custodial staff and security personnel (if any), including direct salary,
fringe benefits, taxes and assessments payable to federal, state and local governments in
connection with employment of such personnel. Costs attributable to other employees of
Agent who perform "front-line" functions (as defined and illustrated in HUD Handbook
4381.5 REV-2, The Management Agent Handbook, Chapter 6} will be paid from
Property funds as a property operating expense. The cost of such employee
certifications, training and memberships as are required by subsection 7 (C), shall be
allocated pursuant to the foregoing provisions.
The employees of Owner, Authority and Agent shall maintain good communications
among themselves and shall cooperate with respect to the operation of the Property and
support of the residents.
14. Operating Account.
All receipts of Owner or Agent, on behalf of Owner, arising from or on account of the
operation of the Property, including all resident rents and charges (but exclusive of
resident security deposits as described in Section 8(d) hereof) and the Operating Subsidy
shall be deposited by Owner or Agent in a separate account maintained in a financial
institution whose deposits are insured by the Federal Deposit Insurance Corporation, or
any successor agency created pursuant to law, and shall not be commingled with funds of
Owner or of any other person. Such account will be carried in Agent's name and
designated of record as "The Landings at Winmore -Operating Trust Account". Funds
shall be withdrawn from the Operating Account only in accordance with the provisions of
this Agreement for expenses of the Project or for distributions to Owner, as requested by
Owner. The Operating Account shall be the sole property of Owner.
Prom the funds held in the Operating Account, Agent will make the following
disbursements promptly when payable:
(a) Reimbursement to Agent for employee costs properly attributable to the Property
in accordance with Section 13 hereof.
(b) Payments of ad valorem property taxes and assessments, if applicable, with
respect to the Property as and when due, to the extent that such payments have not been
made directly by Owner as and when such payments are due.
(c) All sums otherwise due and payable by Owner as expenses of the Property
authorized to be incurred by Agent under the terms of this Agreement, including without
limitation:
(i) Legal expenses associated with operation of the Property and accounting
and audit expenses, including tax return preparation expenses.
(ii) Compensation payable to Agent for its services hereunder pursuant to
Section 5 hereof.
(iii) All other reasonable and necessary costs associated with the operation and
maintenance of the Property.
(d) Distributions of net cash flow to Owner when and as requested by Owner
15. Budgets.
Annual operating and reserve for replacements budgets for the Property for each
Development Fiscal Year will be prepared in a timely manner by Agent and approved by
Owner. Agent (i) will prepare and submit a recommended operating reserve for
replacements and capital expenditures budget on or before October 1St of each year, and
(ii) will prepare and submit to Owner such budgets as may be required. Recommended
budgets submitted pursuant to clause (i) of the preceding sentence shall be approved or
revised by Owner not later than thirty (30) days after submission thereof by Agent.
Owner will promptly inform Agent of any changes incorporated in the approved budget,
and Agent will keep Owner informed of any anticipated material deviation from the
receipts or disbursements stated in the approved budget.
I6. Records and Reports.
(a) Agent will establish and maintain true and accurate books, records and accounts
reflecting the operation of the Property in accordance with sound accounting practices, in
a manner sufficient to permit preparation of all required financial statements and reports
in accordance with Generally Accepted Accounting Principles and the audit thereof in
accordance with generally accepted accounting standards. All records, books and
accounts will be subject to examination at reasonable hours by any authorized
9
representative of Owner or the Authority, who may make copies of or extracts from such
books, records and accounts. Agent shall cooperate in any audit of the financial
statements or accounts of the Property- which shall be caused to be performed by Owner
or outside regulatory authority.
(b} By the 20th day of each month, or the next business day if the 20th falls on a
weekend or on a holiday, Agent will furnish Owner with a statement of receipts and
disbursements during the previous month, and other appropriate information as requested
by Owner.
17. Fidelity Bond.
The Agent shalt maintain a fidelity bond, in the principal sum of no Less than the Project
Income (as defined in that certain Regulatory and Operating Agreement by and between
the Owner and the Authority, of even date herewith} for two and one-half (2 '/z) months,
plus the total value of any cash account of the Project to which the Agent has access, to
protect the Owner against misappropriation of Project funds by the Agent and its
employees. Fidelity bond costs for the Agent's supervisory staff shall be at the Agent's
own expenses, but the Agent may charge the Operating Account for bond costs of front-
line employees.
18. Insurance.
Owner wilt inform Agent, in writing, of insurance, if any, to be carried with respect to the
Property and its operations, and the Agent will cause such insurance to be placed and
kept in effect at all times. Premiums will be paid from the Operating Account as
Property operating expenses in accordance with Section 14 hereof. All insurance will be
placed with such companies, on such conditions, in such amounts and with such
beneficial interests appearing thereon as shall be acceptable to Owner, provided that the
same will include public liability coverage, with Agent designated as an insured, in
coverage amounts acceptable to Agent as well as Owner. In no event shall the deductible
for comprehensive general liability and property casualty coverage exceed $5,000.00.
Agent will investigate and furnish Owner with reports as to all accidents, claims, and
potential claims for damage relating to the Property and will cooperate with Owner's
insurers in connection therewith.
19. Compliance with Governmental Orders.
Agent will take such action as many be necessary to comply promptly with any and all
governmental orders or other requirements affecting the Property, whether imposed by
federal, state, county, or municipal authority; provided, however, that Agent shall take no
such action so long as Owner is contesting, or has affirmed its intention to contest, any
such order or requirement. Agent will notify Owner in writing of all notices of such
orders or other requirements within forty-eight (48) hours from the time of their receipt.
10
20. Nondiscrimination and Other Federal Requirements.
Agent will comply with all applicable requirements of the following, as the same may be
amended from time to time:
(i) The Fair Housing Act, 42 U.S.C. 3601-19, and regulations issued thereunder, 24
CFR Part 100; Executive Order 11063 (Equal Opportunity in Housing} and regulations
issued thereunder, 24 CFR Part 107; the fair housing poster regulations, 24 CFR Part 110,
and advertising guidelines, 24 CFR Part 109.
(ii) Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d, and regulations issued
thereunder relating to nondiscrimination in housing, 24 CFR Part 1.
(iii) Age Discrimination Act of 1975, 42 U.S.C. 6101-07, and regulations industry
issued thereunder, 24 CFR Part 146.
(iv} Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, and regulations
issued thereunder, 24 CFR Part 8; the Americans with Disabilities Act, 42 U.S.C. 12181-
89, and regulations issued thereunder, 28 CFR Part 36.
(v) Section 3 of the Housing and Urban Development Act of 1968, 12 U.S.C. 1701u,
and its implementing regulations at 24 CFR Part 135.
(vi} The Act.
21. Standard of Care; Indemnification.
(a) In the performance of its duties and obligations under this Agreement, Agent shall
diligently and in good faith seek to protect the property rights and interests of Owner, to
promote the best economic interests of Owner in its ownership and operative of the
Property, and to manage the Property in accordance with normal and accepted standards.
So long as Agent shall exercise the standard of care provided for in this section, Agent
shall not be liable for any errors of judgment or for mistakes of fact or of law or for
anything which it may in good faith do or refrain from doing in the performance of its
duties and obligations hereunder.
(b) Agent shall indemnify and hold harmless Owner, its members and their officers,
directors, and employees from any and all liabilities, claims, actions, judgments, awards,
settlement amounts, and costs and expenses, including but not limited to, reasonable and
actual attorney's fees arising out of or resulting from acts or omissions of Agent (i} in
carrying out this Agreement, and/or (ii} constituting a breach of any term of this
Agreement, provided such acts or omissions are not caused in whole or in part by Owner.
Owner shall indemnify and hold harmless Agent, its officers, directors and employees for
ail liabilities, claims, actions, judgments, awards, settlement amounts, and costs and
expenses, including but not limited to, reasonable and actual attorney's fees arising, out
of or resulting from acts or omissions of Owner (i) in carrying out this Agreement, and/or
11
(ii) constituting a breach of any term of any term of this Agreement, provided such acts
or omissions are not caused in whole or in part by Agent.
22. Default and Remedies.
(a) A default under this Agreement shall occur if either party violates, breaches
or fails to comply with any provision of, or obligation under the Agreement (including,
without limitation) by reason of its violation.
(b) Upon determination that a default has occurred, the non-defaulting party
shall notify the defaulting party in writing of (i) the nature of the default, (ii) the actions
required to be taken to cure default, and (iii) the time within which the defaulting party
shall respond with a showing that all required actions have been taken, taking into
consideration any cure period set forth in Section 6 {c) above, which cure period shall for
purposes of this Section 22 be applicable to both parties.
{c) In the event of a default, the non-defaulting party shall have the right to
exercise any remedy available to it by reason of the nature of such default, or such
appropriate relief in any court having jurisdiction, including but not limited to, specific
performance and injunctive relief.
23. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the benefit of the successors
and assigns of each of the parties; provided, however, that Agent may not assign its
interest in the Agreement, or delegate its duties as Agent and leasing agent under this
Agreement, without the prior written consent of Owner.
(b) The rights and duties hereby granted to and assumed by Agent are those of an
independent contractor only. Nothing coartained herein shall be so construed as to
constitute the relationship hereby created between Owner and Agent as an employment,
partnership, joint venture, or joint agency relationship.
(c} No delay or omission by either party in exercising any right or remedy available
hereunder shall impair any such right or remedy or constitute a waiver thereof in the
event of any subsequent occasion giving rise to such right or availability of remedy,
whether of a similar or dissimilar nature.
{d) This Agreement may not be amended except by an instrument in writing signed
on behalf of both parties and approved by the Authority, whose approval shall not be
unreasonably withheld.
(e) Any notice or other communication given or made pursuant to this Agreement
shall be in writing and shall be deemed given if (i) delivered personally or by courier, (ii}
sent via telecopy, {iii) sent by overnight express delivery, or (iv) mailed by registered or
certified mail (return receipt requested), postage prepaid, to a party at its respective
12
address set forth below (or at such other address as shall be specified by the party by like
notice given to the other party):
If to Owner, to: The Landings at Winmore LLC
c/o Cxosiand
227 W. Trade Street, Suite 800
Charlotte, NC 282fl2
Attn: David Ravin
Copies to: TO BE COMPLETED
If to Managing Agent, to: Crosland Residential Managements Services, LLC
227 W. Trade Street, Suite 800
Charlotte, NC 28202
Attn: David Ravin
All such notices and other communications shall be deemed given on the date of personal
or local courier delivery, telecopy transmission, delivery to overnight courier or express
delivery service, or deposit in the United States Mail, and shall be deemed to have been
received (i) in the case of personal or local courier delivery, on the date of such delivery,
(ii) in the case of telecopy, upon xeceipt of electronic confirmation thereof, (iii) in the
case of delivery by overnight courier or express delivery service, on the date following
dispatch, and (iv} in the case of mailing, on the date specified in the return receipt
therefor.
(f) This Agreement shall be governed by and construed in accordance with the laws
of the State of North Carolina applicable to contracts made and to be performed therein.
[SIGNATURES APPEAR ON NEXT PAGE]
13
(signature page f'or The Landings at Winmore Apartments Management Agreement}
IN WITNESS WHEREOF, the parties hereto {by their duly authorized officers) have
executed this Agreement on the date first above written.
OWNER:
The Landings at Winmore LLC
By: Crosland Landings LLC
its Member/Manager
By: Crosland Affordable Development, LLC, a
North Carolina Limited Liability Company,
in ix aci as its manager
C
By: ,~ -
David Ravin -President
AGENT:
Croslan idential Mana m t Services, LLC
By:
Dionne Nelson -Vic -Presi en
14
EXHIBIT A
PROPERTY DESCRIPTION
Being all of Lots 149, 150, 151, 152, 153, 154, 155 and 156, Winmore, as shown on plat
recorded in Plat Book 101, Page 185, Orange County Registry, and all of Lot 177
Winmore, as shown on plat recorded in Plat Book 101, Page 181, Orange County
Registry, and all of Lot 178 Winmore, as shown on plat recorded in Plat Book 101, Page
183, Orange County Registry.
15
EXHIBIT B
MANAGEMENT PLAN
16
HOUSING MANAGEMENT PLAN
Z,2alo
ARTICLE 1 -THE PLAN DESCRIPTION
1.1 Property.
The Landings at Winmore
1.2 Location.
Carrboro, North Carolina
1.3 Number of Dwelling Units.
2 Bedroom/1 Bath 6
2 Bedroom/2 Bath 32
2 Bedroom/2.5 Bath 8
3 Bedroom/2.5 Bath 12
Total 58
1.4 Definitions.
As used in this Management Plan:
"Agent" means Crostand Residential Management Services, LLC.
"Development Fiscal Year" means the year ending December 31st.
"Management Agreement" means the Property Management Agreement, of even date
herewith, between Owner and Agent.
"Owner" means The Landings at Winmore LLC.
"Operating Account" means the bank account to be established and maintained by Agent
in accordance with Section 14 of the Management Agreement.
"Plan" means this Housing Management Plan.
"Property" means the land, buildings and other improvements comprising The Landings
at Win more.
"Restrictive Covenants" means the Tax Credit Restrictive Covenants for the Low
Income Housing Tax Credits ("LIHTC").
"Security Deposit Trust Account" means the bank account to be established and
maintained in accordance with Section 8 of the Management Agreement.
1.5 Governing Dacaments.
Agent will manage the Property with direct, on-site supervision and staffing, subject to
and in accordance with all applicable laws, rules, ordinances and regulations, including
without limitation, the requirements of the following:
a. The Management Agreement.
b. Federal regulations applicable to public housing, including, but not limited to, the
following regulations on the general subjects indicated:
-- 24 CFR Part 8 Nondiscrimination based on Handicap
-- 24 CFR Part 40 Accessibility Standards
-- 24 CFR Part 100 Discriminatory Conduct-Fair Housing Act
-- 24 CFR Part 107 Nondiscriminatian
-- 24 CPR Part 1 Nondiscrimination
-- 24 CFR Part 9 Americans with Disabilities Act of 1990
The Restrictive Covenants found in the Tax Credit Restrictive Covenants
d. Any requirements specified in one or more Regulatory Agreements that are created
as the result of the Property's financing.
1.6 Review and Modification.
This Plan shall be reviewed from time to time to maintain conformance with the policies
of Owner and applicable governmental requirements and to best serve the Property and
the Owner's interests therein.
ARTICLE 2 -MANAGEMENT OF THE PROPERTY
2.1 Management Plan Goals.
a. To provide a desirable and affordable place to live for an economically, racially
and ethnically integrated resident population, without regard to race, religion, sex,
color, family status, disability status or national origin. Notwithstanding the
above, management may give preference to certain applications.
b. To house responsible residents and maximize occupancy and rent collection
efforts;
c. To provide effective and timely services to the residents while responsibly
maintaining the property; and
d. To maintain effective working relationships with resident associations,
organizations, where applicable, local government including the police
department, other property owners in the surrounding area, lenders and investors.
2.2 Management Operations.
a. This Plan is made and shall be performed in accordance with the Documents set
forth in Section 1.5. These documents require that: (i} 25% of the Property's are
occupied by households with incomes at initial occupancy at or below 34% of the
county median income, (ii) all 58 dwelling units of the Property are to be operated
as qualified low-income units under Section 42 of the Internal Revenue Code
("IRC") in conformance with the operative Restrictive Covenants.
b. Agent will continually review the Plan as necessary and advise Owner of the
required or desirable changes.
c. The Management Agent will implement provisions which provide for:
-- Comprehensive background screening of applicants which includes
screening for criminal activity.
-- The exclusion of applicants whose criminal histories indicated that they
would not be desirable residents.
-- The exclusion of applicants who have family members who illegally use
(or show a pattern of illegal use) of a controlled substance or alcohol.
-- The eviction of residents who engage in criminal activity in their
apartment, in the development where the apartment is located, or
anywhere else.
-- Resident responsibility for all the unlawful or disturbing actions of their
households, guests or other persons under the Residents' control.
-- The screening of existing residents for criminal conduct as a part of each
recertification.
- The ready identification of nonresident individuals on development
property.
2.3 ReEationship Between Owner and Agent.
Owner has delegated to Agent the authority to manage the daily operation of the
Property. Agent will be charged with specific performance in accordance with
the Plan and will keep Owner and Authority informed on the operation of the
Property, by means of periodic budgets, financial statements, status reports and
monthly meetings.
b. Agent will comply with all budgetary procedures outlined in the Management
Agreement. The Management Agxeement sets forth the relationship between the
operating budget and Development Operating Subsidy payments made to the
Property.
c. Agent shall consider the misrepresentation of income or any other aspect of an
applicant's or resident's application or other housing related documents, to be a
serious lease and policy violation as well as a potential crime and shall take
appropriate action if fraud is discovered. Specifically:
Any applicant that has misrepresented income or family status shall be
declared ineligible for housing assistance and removed from the waiting
list for the site.
2. If an examination of a resident's file discloses that the resident made any
misrepresentations {at the time of admission or during any previous
reexamination) which resulted in the applicant/resident being classified
eligible when, in fact, the applicant/resident was ineligible, the resident
shall be required to vacate the apartment unit, even though the resident
may be currently eligible.
Any applicant that has made misrepresentations of income, transfer or
family status shall be subject to both eviction and being declared ineligible
for future housing assistance.
4. If it is determined that the resident's misrepresentations resulted in paying
a lower rent than should have been paid, the resident shall be required to
pay the difference between rent owed and the amount that should have
been paid.
5. Agent shall report apparent cases of applicant/resident fraud to the
Authority or appropriate government agency. It is the policy of the Agent
to cooperate with Federal, State, County or local authorities in prosecuting
cases which, in the Agent's reasonable judgment, appear to be willful or
deliberate misrepresentation.
2.4 Responsibilities of Agent.
Agent has entered into a Management Agreement with Owner and will be paid a fee for
ser<-•ices. That Agreement, as supplemented hereby, outlines the general responsibilities
of Agent as follows:
a. Agent will prepare an operating budget, set job standards and wage rates
previously approved by the Owner, investigate, hire, pay, supervise, and
discharge all property personnel necessary to properly maintain and operate the
property.
b. Agent will staff the property in accordance with the highest standards and
consistent with the Management Agreement and in compliance with the
governing documents. On-site staff shall include the positions indicated in
Subparagraph 2.S.b. of this Plan.
c. Agent will maintain the Property in a good, clean and safe condition at ail times
during the term of the Management Agreement. Maintenance items will include,
but not be limited to, exterior and interior cleaning, painting, decorating,
plumbing electrical, mechanical, carpentry, and other normal maintenance and
repair work necessary to maintain the property, the welfare of the residents or any
other person.
d. All maintenance requests from residents, or work orders initiated by management,
will be recorded and will become part of the resident's file and a work order
record system available for management review. Agent will make diligent efforts
to complete all emergency requests from residents within twenty-four (24) hours.
All work orders will be completed as soon as possible, but in no event mare than
twenty (20) days of receipt.
e. Agent will collect all rents due from residents and lessees and all monies due from
concessionaires and deposit them in proper accounts for the benef t of Owner.
f. Agent will maintain a list of prospective residents and will exercise diligent
efforts to renew all leases to responsible residents and attempt at all times to keep
the premises fully occupied. The selection of residents will be made in
accordance with the Resident Selection Plan outlined in Section 2.6.
g. Agent will maintain a comprehensive set of accounting records satisfactory to the
Owner and any regulatory agencies. These records will separately account for
payments received from occupants. Agent will maintain a separate bank account
under the name "Wellspring Village Operating Trust Account". The funds in this
account will be used for the payment of all reasonable and necessary Property
expenses including administrative expenses, operational expenses, maintenance
expenses and other expenditures. All deposits from rental, operating subsidies
and other income will be placed in this account for disbursements to various
vendors. All checks against this account will be written from the central office of
the Agent.
1. Agent will collect, deposit, and disburse security deposits, if required, in
accordance with the terms of each resident's lease. Security deposits will be
deposited by the Agent, separate from all other accounts and funds, with a bank or
other financial institution whose deposits are insured by the Federal Deposit
Insurance Corporation. The account will be carried in the Agent's name and
designated of record as "Wellspring Village Security Deposit Trust Account".
Agent will comply with any applicable state or local laws regarding security
deposits, including, without limitation, any applicable laws concerning payment
of interest thereon.
m. Agent will investigate and make a full written report of all personal injury
accidents relating to the operation of the Property, and will cooperate with the
insurance carriers to facilitate any claim handling that may be required from time
to time.
n. Expenses paid for by Owner and not borne by Agent are to be consistent with
HUD Management Agent Handbook, 4381.5, Chapter 6 and will include such
items listed below:
1. Site Manager's compensation and related payroll burdens.
2. Compensation of other on-site staff, such as maintenance, administrative,
and custodial personnel.
3. Cost of on-site office.
4. Cost of Property-specific and otherwise unreimbursed legal and
accounting expenses, and finance and accounting materials and services.
5. Cost of maintenance and repair, utilities, taxes, insurance, fringe benefits
related to on-site employees and other normal operating expenses.
6. Cost of security personnel and contract services.
7. Cost of preparing annual audited financial reports for Owner or Lender.
8. Cost of delinquency notices and eviction proceedings.
2.5
Personnel Policy.
a. The Agent will give priority to qualified residents of the Property pursuant
to Subparagraph 2.Sd and then to members of the local community in the
hiring of the site personnel. All pertinent information such as qualification,
racial, ethnic and disability status, required record keeping, remuneration
and application procedures will be made available to the Owner and
Authority.
b. The planned staffing for the Property shall be as follows:
Role Full or Part Time Number
Lease-up Post Lease-up
Site Manager Full Time 1/2 112
Service Manager Full Time 1/2 112
c. All employees will be employees of the Agent and will be both employed
and terminated as the Agent deems appropriate in accordance with law.
Direct and related compensation for these employees will be based on
prevailing wages for the Concord area at the time of employment.
d. Agent shall use reasonable efforts to provide employment, training and
contracting opportunities to low and very-low income persons, and in
particular, residents of the Property and the residents' businesses. Agent
will give preference to residents in all its employment and training efforts
to the greatest extent feasible.
2.6
Resident Selection and Admissions.
a. Income and Eligibility Requirements.
l . All applications must meet the income requirements of Section 42 of the
IRC further limited by representations made to the North Carolina
Housing Finance Agency as part of the Owner's application for the
allocation of tax credits as further outlined in the Restrictive Covenants.
The Agent will seek third party verification of applicant's income in
conformance with the Restrictive Covenants and Section 42 of the Internal
Revenue Code.
b. Site-based Waiting List.
Agent will develop asite-based waiting list policy governing admission to
the Wellspring Village designed to enhance the long-term viability and
sustainability of the Property as amixed-income community. Agent will
comply with the provisions of any such policy approved by the Owner.
c. Resident Selection Plan.
Except as set forth in paragraph 2 below, Agent will consistently apply the
screening criteria to ail applicants seeking housing in the Property. The
screening criteria will be used only to judge an applicant's past practices
relating to lease compliance and occupancy issues. The selection criteria
will be publicized in the cover letter to a!1 applicants upon request.
2. All applicants will be subject to the following screening criteria:
a} Credit check and contact with landlords that assesses a family's
ability to pay the rent based on record of e~•iction, judgment,
significant debt or payment history that reduces such ability to pay
rent.
b) Police record check for all household members over the age of 18.
The applicant must provide court records showing the disposition
of any charges on the police report. Applicants with police records
will be accepted only in the following circumstances:
1) No record of a felony or misdemeanor conviction for the
last five years for a crime against a person;
2) No record of a felony conviction for the last five years for a
crime against property; and
3} No record of or an unzesolved arrest record or conviction
for murder, rape, attempted murder or attempted rape,
armed robbery, child abuse or molestation, violence {e.g.,
aggravated assault) and/or drugs.
4) No current requirement by any state to register as a sexual
offender.
5} Absence of past or present behavior which poses a threat to
the health, safety, peaceful environment or welfare of other
residents and/or employees of Agent or Owner.
c) Affidavit from head of household that all family members under 16
years of age have not been convicted of a crime classifying them as
an adult. If this affidavit cannot be made, a record check on those
members must also be obtained by parent or guardian and thereby
subjected to the police check criteria for adults.
d) Current and previous landlord verification of rent payment history
and care for the unit. If previous landlord verification is not
available, the current landlord verification must be used. In all
cases, a landlord history or mortgage payment history must be
obtained.
e) To the extent employment income is a component of income
eligibility and ability to pay rent, verifiable employment history
must include the following:
1) gainful employment full time or part time for minimum of
90 days prior to the date of application; and
2) employment is anticipated by employer for next 12 months.
g) The Agent may require additional documentation as Agent deems
necessary to determine the applicant's ability to uphold the lease
agreement. Applicants are required to respond within the specified
time frame. Failure to do so will result in the applicant's removal
from the waiting list. To the extent necessary to determine
eligibility and rent, and if permitted by all applicable laws, Agent
may xequire applicants to provide satisfactory verification of their
status as a handicapped or disabled person. In the case of a
disabled applicant, reasonable accommodation will be made to
allow the applicant to comply with the lease.
h) All applicant screening verification will be accomplished by mail,
telephone, Internet or facsimile as necessary. Formal screening
interviews with applicants will not be required.
Reasons for rejection of application by Agent.
To the extent permitted by all applicable rules and regulations, Agent may
reject an application for the following reasons:
a) Applicant does not meet income, eligibility or suitability criteria;
or
b) History of one or more family members of drug abuse, and the
family member(s) has been evicted from federally assisted housing
for drug-related criminal activity, with no current verifiable,
rehabilitation services or evidence of completion of rehabilitative
services, or with no evidence that the circumstances for the
eviction no longer exist (e.g. the death or imprisonment of such
family member(s)). Such applicant will not be admitted for three
years from the date of eviction;
c} Pattern of drug or alcohol abuse of one or more family members,
or evidence of current drug or alcohol abuse by such family
member(s);
d) History of criminal activity as defined in Paragraph 2.6(c}(2)(b)
above.
e) History of disruptive or destructive behavior.
f) Unacceptable credit history in the case of prospective residents
4. Mitigating Circumstances.
In the event of the receipt of unfavorable information with respect to an
applicant, consideration shall be given to the time, nature and extent of the
applicant's conduct and to factors which might indicate a reasonable
probability of satisfactory financial prospects or future suitable conduct.
For the Section 8 Project-Based Units, such consideration will be give to
the extent permitted by Section 8 project-based program rules and
regulations. Factors to be considered:
a} Negative credit information can be mitigated through third party
verification for each credit item that: (1) the applicant has entered
into a payment plan with creditor and there has been a three month
payment history; (2}there is a three month history of payment to
the creditor; or (3} applicant has disputed such debt and can
provide verification of such dispute.
b) Record of unsuitable rental history or behavior can be mitigated if
applicant can show that the reason for unsuitable behavior relates
to a disability in which the applicant can show evidence of
rehabilitation or participation in rehabilitation. If the evidence
relates to the change in a medical condition or course of treatment,
the Agent shall have the right to refer such information to persons
qualified to evaluate the evidence and verify the mitigating
circumstance, even if such information is of a medically
confidential nature. Such inquires will be limited to the
information necessary to verify the mitigating circumstance. If the
applicant refuses to provide further information, the Agent will
give no further consideration to the mitigating circumstance.
c} In the event of the receipt of unfavorable information with respect
to an applicant, consideration shall be given to the time, nature and
extent of the applicant's conduct and to factors which might
indicate a reasonable probability of favorable future conduct or
financial prospects. For example: (1}Evidence of rehabilitation;
(2) Evidence of the applicant family's participation in or
willingness to participate in social service or other appropriate
counseling service programs and the availability of such programs;
Agent will promptly notify rejected applicants in writing. The notification
to applicants to the Authority Units will indicate the reason for the
rejection and the right to request an informal conference with the Agent
within fourteen (14) days or to show mitigating circumstances. If the
applicant requests an informal conference, Agent will give the applicant a
final decision within ten (10) days of the meeting.
Procedure for an Informal Conference.
a} An applicant must make a written request to Agent's Management
Office within fourteen (14) days from the date of adverse notice or
decision.
b) Agent will hold an informal conference with the complaining
applicant rx~Zthin ten (10} calendar days, and attempt to resolve the
complaint.
c) A decision on the informal hearing shall be prepared by Agent and
mailed to the applicant or their legal representative within ten (10)
calendar days.
7. Agent will make diligent efforts to provide units wwhich are designed for
families with physically disabled members who require such units.
Resident transfers will be accommodated in accordance with Agent's
Transfer Policy which is attached as Appendix "B".
2.7 Affirmative Marketing Efforts.
Tlie Agent will adopt a strategy for affirmatively marketing the Property in accordance
with an Affirmative Fair Housing Marketing Plan ("AFHMP").
Agent will use its diligent efforts to obtain and maintain amixed-income community and
evenly scatter units serving households with incomes below 30% of median income
throughout the Property so as not to concentrate such units in any particular area or areas.
All outreach activity will be documented by Agent, and records will be maintained that
provide racial, ethnic and gender data on al} applicants and residents, consistent with the
AFHMP.
2.8 Resident Orientation.
a. Resident orientation will be conducted by the Agent and begin during the
application stage and continue throughout the initial move-in inspection of the
dwelling unit. As residents are accepted for occupancy, Agent will conduct an
orientation session with each family. That meeting will include dialogue with the
family regarding its interest and expectations regarding community life on the
property.
b. The orientation program will cover both the resident's responsibilities and
Agent's responsibilities relating to the lease, rules and regulations and Property
policies, including lease termination and the transfer policy. Hands-on
instructions on the operation of appliances, fixtures and controls in a dwelling unit
will be provided by the Agent when the joint move-in inspection of the dwelling
unit is conducted. Resident will also be informed that the purpose of the move-in
inspection is to record the condition of the unit prior to occupancy for comparison
with a joint move-out inspection that occurs when a resident's lease is terminated
for any reason.
2.9 Rent Collection Policies and Procedures.
a. Rent payments will be made at the on-site office. Payments must be made in the
form of check or money order. Agent will encourage prepayment of rent.
b. Rent is due and payable on the first calendar day of the month. A late charge will
be assessed after the fifth {5th) day of any month in an amount determined by the
Agent.
c. Partial payment of rent will not be accepted unless prior written approval has been
given to the resident by the Property Manager. Approval must be based on good
and sufficient reason which is to be documented in the resident's file. A late
charge will not be assessed when such prior arrangement has been made.
d. Un the sixth (6th} day of the month, Agent will generate a delinquency report and
send individual letters notifying delinquent residents of the need to pay all
delinquent amounts immediately. The site staff will make personal calls to deal
with the delinquency.
e. A filing for rent and possession will be initiated in Magistrate's Court an the
eleventh {11th) day of the month in which the delinquency occurred.
2.10 Lease Enforcement.
a. Agent will ensure full compliance with the terms of the lease for all residents. All
provisions of the Lease will be explained thoroughly by Agent's site staff
members prior to the time the agreement is signed. Upon lease signing all
residents will pay a security deposit as established by Agent.
b. Agent will lawfully terminate any tenancy when, in Agent's reasonable judgment,
sufficient cause (including, but not limited to, nonpayment of rent) for such
termination occurs under the terms of the resident's lease.
Agent ma}~ consult with legal counsel to bring actions for eviction and to execute
notices to vacate and judicial pleadings incident to such actions; provided,
however, that the Agent shall keep the Owner informed of such actions and
follow such instructions as Owner may prescribe for the conduct of any such
action. Reasonable attorneys' fees and other necessary costs directly incurred in
connection with such actions will be paid out of the Operating Account (as
defined in Subparagraph 2.3 c., hereof) as Property expenses. Agent will charge
evicted residents for ail eviction costs as allowed by North Carolina law.
d. Agent will provide written notice of lease termination in accordance with the
provisions of the applicable lease form and with applicable requirements of law.
e. Agent will inspect all apartments at least once a year. The purpose of this
inspection is to make sure that every unit it being maintained in a decent, safe,
and sanitary condition. Annual unit inspections also provide Agent with an
opportunity to identify unreported maintenance problems before they become
serious.
A Service Request will be issued to take care of maintenance problems that are
the Agent's responsibility to correct. If it is the resident's responsibility to
correct, a letter should be sent to the resident outlining the conditions or problems
found and a specific time frame for correction.
A follow-up inspection should be conducted at the end of the time frame given in
the letter. If there is damage that is caused by the resident, visitor, guest or invitee
and the resident is unable to repair or correct it, then Agent shall make the
necessary repairs, and the current resident will be billed for the cost of the repairs.
In case of extreme damage or excessively poor housekeeping the lease may be
terminated or not renewed by Agent.
2.11 Maintenance and Repair.
Agent will maintain the Property in good repair in accordance with this Plan and local
codes and in a condition at all times acceptable to the Owner. This will include, but not
be limited to, cleaning, painting, decorating, plumbing, carpentry, grounds care, and such
other maintenance and repair work as may be necessary, subject to any limitations
imposed by the Owner in addition to those contained herein.
Incident thereto, the following provisions will apply:
a. Agent will complete routine and preventive maintenance activities in the most
cost effective and efficient manner as possible.
b. Agent will contract with qualified independent contractors for extraordinary
repairs beyond the capability of regular maintenance employees.
c. Agent will systematically investigate all service requests from residents, take such
action thereon as may be justified and will keep records of the same. Emergency
requests will be received and serviced on a twenty-four (24) hour basis. Serious
complaints will be reported to Owner for investigation. Non-emergency work
requests shall be completed within ten (10) days.
d. Agent is authorized to purchase all materials, equipment, tools, appliances,
supplies and services reasonably necessary for proper maintenance and repair.
The Agent will secure for and credit to Owner any discounts, commissions or
rebates obtained as a result of such purchases.
e. Notwithstanding any of the foregoing provisions, the prior approval of the Owner
will be required for any expenditure which exceeds $2,500 in any one instance for
labor, materials, services, or other in connection with the maintenance and repair
of the Property, except for recurring expenses or on a one-time planned
expenditures within the limits of the approved annual budget or emergency
repairs involving manifest danger to person or property or required to avoid
suspension of any necessary service to the Property. In the latter event, Agent
will inform Owner of the acts as promptly as possible.
2.13 Utilities and Services.
Agent will make site arrangements for water, electricity, trash disposal, exterminating
services, decorating, cable TV and telephone services to the Property. Agent will make
such contracts as may be necessary to secure such utilities and services, acting as agent
for the Owner.
All dwelling units will be individually metered for electric service. Residents will
contract directly with the utility company. An interruption notice to a resident will be
treated as material noncompliance of the lease and will be grounds for eviction. If the
resident regains service within seven days, the eviction procedures will be dropped;
however, the resident will be responsible for any charges incurred due to the eviction
procedures.
2.14 Operating Account.
All deposits to and disbursements from the Operating Account will be governed by the
terms of the Management Agreement, Section 14.
2.15 Budgets.
a. Agent will prepare and submit a recommended operating, reserve for
replacements, and capital expenditures budget for initial Development Fiscal Year
and by September 15th of each Development Fiscal Year thereafter, which budget
shall be subject to Owner's approval. The recommended budgets submitted by
Agent shall be approved or revised by Owner within fifteen (15) days after
submission thereof by Agent.
b. Owner will promptly inform the Agent of any changes incorporated in the
approved Development Fiscal Year budget.
c. Agent shall keep Owner informed of any anticipated material deviation fiom the
receipts or disbursements statedtn the approved budgets.
2.16 Record and Reports.
Agent will prepare all records and reports as outlined in the Management Agreement,
Section 16.
Agent will keep a copy of each resident's application for admission to the Property in the
resident's Zile. All occupancy and resident information collected must be retained for the
appropriate time period as required by Section 42 of the Internal Revenue. This includes,
without limitation, data on current applicants and residents, and applications from people
who were never admitted.
ARTICLE 3 -RESIDENT AND MANAGEMENT RELATIONSHIPS
3.1 Residential Safety Program.
a. Agent understands the difficult balance of providing an environment that can
maximize resident and local government involvement in steps to best promote
safety for all who come on the property. Agent will rigorously promote this
involvement while meeting its own obligation to thoroughly screen applicants and
enforce lease compliance.
b. Agent will continue to enlist the residents and the local police department in
devising and implementing security initiatives that may include hiring private
security or providing incentives for police officers to reside on the property,
subject to the Property's income restrictions.
APPROVED:
The Landings at Winrnore LLC
By: Crosland Winmore LLC,
Its Manager
By: Crosl d Affordable Development, LLC, its Manager
B: ~ ~~
Y
Davi Ravin
President
BY: C land Residential agement Services, LLC, a NC limited liability company
By•
Name: Dionne Nelson
Vi resident
Date: Z ly
! •~
APPENDIX A
TRANSFER POLICY
"hhere will be instances during property operations when residents need to be transferred from
one unit to another within the Property. In some cases, these transfers will be at the discretion of
Agent and in other cases, they will fall under the convenience or requirements of resident. Those
at the request of the resident should be treated as amove-out and amove-in into the new unit.
Policy and Procedures
1. Policy for Transfer
a. Transfers Requested by Residents.
Agent reser<~es the right to approve or deny transfer requests by a resident based
on existing market conditions, such as occupancy level and marketability of unit
based on time of year and unit availability. Transfer will be approved or
disapproved by management within 30 days of a resident request.
2. In general, transfer requests will be approved under the following standards:
a. Verif ed medical reasons such as inability to climb stairs;
b Verifiable permanent disability, not present at move-in, requiring special
features which cannot be provided through reasonable accommodations;
or
c. Change in household composition that violates the project occupancy
standards of two persons per bedroom.
3. Under these standards, a resident must meet all obligations under the Lease
including:
a. No outstanding charges for rent or additional rent;
b. No chronic rent delinquency {more than one late payment in a four month
period); and
c. No insufficient finds charges for the preceding six months.
4. If these standards and obligations are met, a transfer will be approved under terms
specified by Agent.
~.
EXHIBIT C
Scone of Services
Services to be provided are in accordance with the February 28, 2007 HOME Program Funding
Application from the Community Home Trust.
HOME funds will be used to offset the construction and soft costs associated with the
development of a 58 unit apartment complex for low-income families. Specifically, the
apartment schedule is as follows:
11 Two Bedroom units at or less than 40% of Area Median Income
4 Three Bedroom units at or less than 40% of Area Median Income
15 Two Bedroom units at or less than 50% of Area Median Income
6 Three Bedroom units at or less than 50% of Area Median Income
16 Two Bedroom units at or less than 60% of Area Median Income
6 Three Bedroom units at or less than 60% of Area Median Income
i. r
EXHIBIT D
Project Budget
Source of Funds
Orange County HOME Funds $300,000
Owner may not request disbursement of funds under this Agreement until the funds are needed
for payment of eligible costs. The amount of each request must be limited to eligible costs as
determined by the County's Housing and Community Development Department ("OCHCD").
Funds may be shifted between line items of the Project without prior approval of the County only
to the extent of "Minor Adjustments," defined as actions which do not result in a change in the
Project and so long as such Minor Adjustments do not exceed ten percent (10%) of the line item
total from which the funds are being removed or to which the funds are being added, there is no
increase to the Total Renovation Cost specified in the above budget, and there are only minor
changes to the Plans and Specifications.