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HomeMy WebLinkAbout2003 S Housing - Affordable Rentals, Inc for Housing Bond Program Development Agreement!~ 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") and Affordable Rentals, Inc., a North Carolina non-profit corporation (hereinafter referred to as "Affordable Rentals, Inc"). The effective date of this agreement is 1 `I ~ ~ 4 WITNESSTH WHEREAS, the Orange County Board of Commissioners awazded Affordable Rentals, Inc. $300,000 in FY 2001 Housing Bond funding to assist in the acquisition of rental property on June 17, 2003; and; WHEREAS, Affordable Rentals, Inc. entered into a Development Agreement with Orange County dated March 12, 2006 for $172,300 in FY 2001 Housing Bond funding to assist in the acquisition of rental property located at A-18, D-18, and F-9 University Gardens in Chapel Hill, NC; and WHEREAS, Affordable Rentals, Inc. is requesting an additional $101, 342 in FY 2001 Housing Bond funding to assist in the acquisition and rehabilitation of rental property on or about August 29, 2008; and WHEREAS, Affordable Rentals, Inc. intends to purchase a dwelling unit located at 500 Umstead Rd., Unit C-102, Chapel Hill, NC (herein after referred to as "the Project dwelling unit" or "the Project"). The Project dwelling unit is located on property more particularly described in EXHIBIT A attached hereto and made a part of this Agreement (hereinafter referred to as "the Property"); and WHEREAS, Affordable Rentals, Inc. intends to make the Project dwelling unit available for lease to a family earning up to 50% of HUD area median income; NOW, THEREFORE, in consideration of the mutual covenants, promises, and representations contained herein, it is agreed between the parries hereto as follows: a. Affordable Rentals, Inc. shall acquire the Property including the Project dwelling unit and ensure that the unit meets the Section 8 Housing Quality Standazds (HQS) prior to leasing. All repair work must be completed in accordance with applicable building and zoning ordinances and N.C. Housing Finance Agency Energy Standards. Any tenants residing in the Project dwelling unit at the time of acquisition of the Project dwelling unit that are displaced due to the repair work must be notified in writing of the need for temporary relocation and must be adequately housed in the community. Affordable Rentals, Inc. must submit within 90 days of the date of this Agreement a detailed written report of the relocation plan for all tenants. All relocation activities will be fully funded by the Affordable Rentals, Inc. Affordable Rentals, Inc. agrees to lease the Project dwelling unit to a family whose income does not exceed 50% of the area median income by family size, as determined by the U.S. Department of Housing and Urban Development and as amended from time to time. Monthly rents must not exceed the HUD Published Fair Market Rents in effect at the time of occupancy. Residential leases will not exceed one year in term. b. Financial assistance in the amount of $101,342 in Orange County Housing Bond Funding will be provided in the form of a deferred loan with aninety-nine (99) year loan term. A Deed of Trust and Promissory Note will secure the loan funds. This Deed of Trust and Promissory Note shall constitute a lien on the Property subordinate only to the Declaration of Restrictive Covenants described in Section 2 of this Agreement. The Project dwelling unit must remain affordable for a period of 99 years. This 99 year affordability requirement will be secured by a Deed of Trust, Promissory Note, and Declaration of Restrictive Covenants that will incorporate a right of first refusal that may be exercised by the County. a The Property shall be acquired and the Project dwelling unit rehabilitated and occupied by December 31, 2008. In the event that Affordable Rentals, Inc. is unable to complete its obligations to acquire, rehabilitate, and occupy the Project dwelling unit within this time or by extensions approved by the County under the terms of this Agreement, Affordable Rentals, Inc. will be required to repay the full amount of the County's outstanding loan as provided in the loan documents. d. The Project dwelling unit shall be purchased for not more than 100% of its appraised value. An independent, qualified appraiser must conduct the appraisal. e. An annual rental operations budget must be submitted to the County each year at least sixty days prior to the July 1 beginning date for the fiscal year. f. Affordable Rentals, Inc. is responsible for verifying the income of prospective tenants and maintaining eligibility data. Affordable Rentals, Inc. shall maintain tenant files as part of its Books and Records as required and for the period of time required by Section 4c. of this Agreement. Affordable Rentals, Inc. must provide the County an initial occupancy report verifying the income eligibility of all tenants at the time of initial lease-up. Affordable Rentals, Inc. must furnish the County with an annual report on the Project dwelling unit by July 31 of each year therea8er certifying that all tenants earn less than 50% of the area median income by family size, as determined by the U.S. Department of Housing and Urban Development and as amended from time to time. 2 2. Affordability Requirement. Each of the Froject dwelling unit must remain affordable for a period of ninety-nine years. Affordable Rentals, Inc. retains full responsibility for compliance with the affordability requirement for each of the Project dwelling unit, unless affordability restrictions are terminated due to the sale of the Property to a non- qualified buyer in which event the Resale Provisions of Section 3 of this Agreement pertain. Affordable Rentals, Inc. shall assure compliance with affordability of each of the Project dwelling unit by having recorded a "Declaration of Restrictive Covenants" (EXHIBIT B) on the Property. This Declaration shall constitute and remain a first lien on the Property during the period of affordability. It is further the responsibility of Affordable Rentals, Inc. 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 Property 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, Affordable Rentals, Inc., 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 Mazketable Title Act or any comparable law purporting to extinguish, by the passage of time, non possessory interests in real property. Any future owner, Affordable Rentals, Inc. and Orange County agree to do what each must do to accomplish the 99-year duration of this Declaration of Restrictive Covenants. 3. Resale Provisions. Affordable Rentals, Inc. shall assure compliance with affordability of each of the Project dwelling units through the Declazation of Restrictive Covenants. The Declaration of Restrictive Covenants shall include at least the following elements in their resale provisions for the Improvements: 3.1 In the event Affordable Rentals, Inc. no longer uses the Property as rental property or is unable to continue ownership, then Affordable Rentals, Inc. must sell, transfer, or otherwise dispose of its interest in the Property only to an agency with similar interest in affordable housing and serving families with incomes not exceeding 50% of the azea 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. 3.2 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 3 `J 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, and (2) 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. 3.3 The resale provision shall remain in effect for the full affordability period - 99 years. 4. Miscellaneous Provisions. a. 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 Affordable Rentals, Inc. for the assisted unit as follows: i. In the event that Affordable Rentals, Inc. is unable to proceed with any aspect of the Project in a timely manner, and County and Affordable Rentals, Inc. determine that reasonable extension(s) for completion will not remedy the situation, then Affordable Rentals, Inc. will retain responsibility for requirements for any dwelling unit assisted and County will make no further payments to Affordable Rentals, Inc. ii. In the event that Affordable Rentals, Inc., 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 Affordable Rentals, Inc. shall, upon the County's request, convey to the County the Property assisted with 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 Affordable Rentals, Inc.'s agreement of Affordable Rentals, Inc.'s inability to continue as a viable organization. Affordable Rentals, Inc. 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). b. 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 4 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. c. Books and Records. Affordable Rentals, Inc. shall maintain records of its requirements under this contract for a period of not less than five (5} full fiscal years following the contract completion date. i. Affordable Rentals, Inc. shall ensure access to records and financial statements, as necessary, to provide effective monitoring and evaluation of project performance. Additionally, Affordable Rentals, Inc. shall submit a copy of its annual audit to the County. Upon reasonable advance notice, County or its authorized representatives may from time to time inspect, audit, and make copies of any of Affordable Rentals, Inc 's records that relate to this contract. If any audit by County discloses that payments to Affordable Rentals, Inc. were in excess of the amount to which Affordable Rentals, Inc. was entitled under this contract, Affordable Rentals, Inc. shall promptly pay to County the amount of such excess. If the excess is greater than I% of the contract amount, Affordable Rentals, Inc. shall also reimburse County its reasonable costs incurred in performing the audit. ii. Affordable Rentals, Inc. shall maintain files of all tenants, regardless of length of occupancy, residing in the assisted unit. 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. iii. Affordable Rentals, Inc. shall maintain records verifying the affordability of the dwelling unit. d. 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: i. To the County: Orange County c% Housing and Community Development Department P.O. Box 8181 Hillsborough, NC 27278 ATTN: Director ii. To Affordable Rentals, Inc.: Affordable Rentals, Inc. P.O. Box 932 Carrboro, NC 27510 ATTN: Executive Director 5 Either the County or Affordable Rentals, Inc. may change the person or address to which any future Notice shall be given as herein provided. e. No Assignment. No transfer or assignment of the interest of Affordable Rentals, Inc. in this Agreement shall occur without the prior written consent of the County; neither may Affordable Rentals, Inc. assign this Agreement without the prior written consent of County. f. Conflict of Interest. Affordable Rentals, Inc. 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 not acquire any financial interest, direct or indirect, that would conflict in any manner or degree with the performance of services required under this Agreement. Affordable Rentals, Inc. further covenants that in performance of this Agreement no person having such a financial interest shall be employed or retained by Affordable Rentals, Inc. hereunder. These conflicts of interest provisions apply to any person who is an employee, agent, consultant, or elected official or appointed official of Affordable Rentals, Inc., or any designated public agencies or subrecipients that are receiving funds under the County Housing Bond Program. g. Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. h. Indemnification. To the extent legally possible, Affordable Rentals, Inc. 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 Affordable Rentals, Inc., its employees, agents, officers, and contractors in connection with this contract. In the event any such action or claim is brought against County, Affordable Rentals, Inc. shall, upon County's tender, defend the same at Affordable Rentals, Inc: s sole cost and expense, promptly satisfy any judgment adverse to County or to County and Affordable Rentals, Inc. jointly, and reimburse County for any loss, cost, damage, or expense, including attorney fees suffered or incurred by County. i. Subcontracting. Affordable Rentals, Inc. shall not subcontract work under this Agreement, in whole or in part, without the County's prior written approval. Affordable Rentals, Inc. 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 Affordable Rentals, Inc. specified in this contract. Notwithstanding County's approval of a subcontractor, Affordable Rentals, Inc. shall remain obligated for full performance of this contract and County shall incur no obligation to any subcontractor. Affordable Rentals, Inc. shall indemnify, defend, and hold County harmless from all claims of its contractors. j. No Joint Venture or Agency. The County and Affordable Rentals, Inc. each agree and acknowledge that nothing contained herein or otherwise, including, without limitation, any act of the County or Affordable Rentals, Inc. under this Agreement, shall be deemed or construed to create any relationship of joint venture, partnership or agency between the parties. 6 k. 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 Affordable Rentals, Inc. 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 Affordable Rentals, Inc. be a waiver by the County of its rights and remedies with respect to that or any other breach. 1. 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. m. 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 and Affordable Rentals, Inc. 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 and Affordable Rentals, Inc. 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. n. Equal Opportunity. Affordable Rentals, Inc. 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. o. Headings. Headings are for convenience only and shall not be used to interpret or construe its provision. p. 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. q. 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. 7 IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have set their hands and seals on the day and yeaz first above written. ;4 = - •~ S ®~*~s~,~\~~A COUNTY OF ORANGE, NORTH CAROLINA ~~ tr fir' ~ ~_1~~ ~-~~-- A~.. Laura E. Blackmon, County Manager ~a~.~~~3s+1- `"''%s5 ~' e xry ATTEST: Donna Baker " ' ` Clerk to the Board of Commissioners Approved as to form and legality eo 1 hi ,County Attorney This document has been preaudited in accordance with the N.C. Local Government and Fiscal Control t. Gary Humphreys, Finance Director Affordable Rentals, Inc. 9- t y - 0 8 ,President ATTEST: ~1~~\4~, Secretary 9 EXHIBIT A PROPERTY DESCRIPTION Those certain premises comprising a portion of the project known as Bolinwood Condominium, said project having been established as a horizontal property regime by Master Deed and Declaration and Bylaws dated January 8, 1985, and recorded in Deed Book 498, Page 312, in the Office of the Register of Deeds for Orange County, North Carolina, under and pursuant to the provisions of the North Carolina Unit Ownership Act, the premises hereby conveyed being more particularly described as follows: Being Unit 102-C of said project, as shown on Condominium Map filed in Plat Book 40, Pages 154 through 157, in the Office of the Register of Deeds for Orange County, North Carolina, excepting and reserving any casements through said apartment(s) appurtenant to the common elements and other apartments, all as set forth in said Declaration, together with all fixtures and appliances situated in the condominium unit(s) referred to above, including without limitation any heating and air-conditioning unit(s), refrigerator, stove, range hood, dishwasher and disposal. TOGETHER WITH and including an undivided interest in Unit 102-C's percentage interest appurtenant to the apartment(s) in all common elements of said project as described in said Declaration, including the buildings and land described in the Declaration, which said Declaration is incorporated herein as if fully set out herein. Subject, however, to the following: The reservations, restrictions on use, and all covenants and obligations set forth in the Declaration dated January 8, 1985, and filed with the Register of Deeds for Orange County, North Carolina, and as set forth in the Bylaws of the Association of Owners attached thereto and as it may be amended from time to time, said Bylaws to be filed with the Board of Directors of said Association, all of which restrictions, payments of charges, and all other covenants, agreements, obligations, conditions, and provisions are incorporated in this deed by reference and constitute and shall constitute covenants running with the land, equitable servitude, and liens to the extent set forth in said documents and as provided by law, and all of which are accepted by the Grantee(s) as binding and to be binding on the Grantee(s) and his or its successors, heirs, administrators, executors, and assigns or the heirs and assigns of the survivor of them, as the case maybe. Subject to applicable easement, restrictions, and rights of way, if any, of record PIN: 9789-01-4199.03 8 TBML: 7.30J..38