HomeMy WebLinkAbout2001 S Housing - Chapel Hill HOME Program Second Mortgage Assistance RETURN THIS COPY TO THE CLERK'S
OFFICE FOR THE PERMANENT AGENDA FILE
NORTH CAROLINA
ORANGE COUNTY
DEVELOPMENT AGREEMENT
This is an AGREEMENT between ORANGE COUNTY, a general local governmental
unit of the State of North Carolina, (hereinafter referred to as the "County") and the TOWN OF
CHAPEL HILL, a general local governmental unit of the State of North Carolina hereinafter
referred to as the "Town"). The effective date of this agreement is November 19, 2001.
WITNESSTH
WHEREAS, the Orange County HOME Consortium has designated $100,000 in FY
2000 HOME funds for the purpose of conveying these funds to assist with acquisition of one
dwelling unit in Chapel Hill to develop a proposed transitional housing plan; and
WHEREAS, the County is the lead entity of the Orange County HOME Consortium, so
designated in an agreement dated July 1, 1997 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 wit the Title 11 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 Town intends to lease the unit to current public housing family with a
rent paying ability of at least $450 per month and with incomes not exceeding 50% and below of
median income as described in their HOME Application dated February 23, 2001 which is
Exhibit A to this Agreement, and hereinafter referred to as "the Project".
NOW, THEREFORE, in consideration of the mutual covenants, promises, and
representations contained herein, it is agreed between the parties hereto as follows:
1. Project Activities
1.1 The Town shall acquire the dwelling unit defined in Project, obtain all permits and
licenses necessary to rehabilitate, the unit in the Project if necessary, and ensure
compliance with all applicable building and zoning ordinances as well as Section 8
Housing Quality Standards (HQS).
1.2 Financial assistance in the amount of $100,000 for the dwelling unit for a total of
$100,000 in Federal HOME Program funding will be provided in the form of a deferred
loan with a forty (40) year loan term, forgivable at the end of 40 years. The HOME
Program investment will be secured by a Deed of Trust and Promissory Note. This Deed
of Trust and Promissory Note shall constitute a lien on the Property, second only to the
Declaration of Restrictive Covenants described in paragraph 4 of this Agreement, with
the County as the secured party/beneficiary. The County agrees to subordinate its Deed
of Trust lien to a lien securing private, first-time permanent financing obtained by the
Town, at the time of purchase.
1.3 The period of affordability will be 99 years and will be secured by a Declaration of
Restrictive Covenants that will incorporate a right of first refusal that may be exercised
by the Town and/or Orange County.
1.4 The Town shall make certain that the seller is aware of their rights under the federal
Uniform Relocation Act prior to completing the sale of the property. The seller must also
complete a Lead Based Paint Disclosure Form if the property was built prior to 1978.
1.5 The property to be acquired must have a value that does not exceed 95% of the area
median purchase price for that type of housing.
Value must be established by one of the following methods:
i. An appraisal by a qualified appraiser.
ii. Tax assessments may be used to establish value, but only if they are
current and can be computed at 100% of market value.
1.6 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. Further, not more than 90
days after the end of each fiscal year, the Town must furnish to the County an annual
accounting of income and expenses for each dwelling unit. The operating assumptions
allowed at the time of initiation of this project including reasonable rent increases will be
acceptable for future budgets and reports. Any excess cash flow must be returned to the
County within 90 days of the end of the fiscal year for deposit into the local HOME
Program Trust Fund for use in future affordable housing projects.
1.7 The Town agrees to lease the property to families 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
establish in accordance with HOME Program guidelines. Residential leases will not
exceed one year in term and may be renewed. The Project must not cause displacement
of existing tenants.
1.8 The Town is responsible for verifying the income of prospective tenants and maintaining
eligibility data. The Town shall maintain tenant files as part of its Books and Records as
required and for the period of time required by Section 5c. of this Agreement. The Town
must provide the County an initial occupancy report verifying the income eligibility of all
tenants at the time of initial lease-up. Each year thereafter the Town must furnish the
County with an annual report on the project by July 31 of each year certifying that all
tenants earn less than 80% 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.
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2. Time for Commencement and Completion. In addition, the Town agrees to furnish to
the County a copy of its annual audit, performed by a certified public accountant within
90 days of the end of the fiscal year of expenditure of the HOME Program Funding.
The Project Completion Date must not exceed November 1, 2002 and is date the property
is acquired, rehabilitated if necessary, and occupied by a low-income family. In the
event that the Town is unable to proceed with any aspect of the Project in a timely
manner, and County and the Town determine that reasonable extension(s) for completion
will not remedy the situation, then the Termination of Agreement provisions of this
Agreement (Section 6.a.) shall pertain. The Town may, at its option, submit a written
request for a delay of completion for County approval. The County may, at its option,
approve any delay in the completion date or declare the Town in default.
The Town shall monitor the constructed unit for affordability for the period of
affordability — ninety-nine (99) years. Final contract completion date shall be the latest
end date of all assisted unit affordability periods.
3. Affordability Requirement. The unit must remain affordable for a period of ninety-nine
years. The Town retains full responsibility for compliance with the affordability
requirement for assisted 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 4 of this Agreement pertain. The Town shall assure compliance with affordability
of the assisted 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 the Town to rerecord the Declaration of Restrictive
Covenants no later than one day before the expiration of 30 years of the date of the
purchasing the property in the event that the Town is still the owner of the dwelling unit
at the time of the rerecording. 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 Section of this Agreement that the 99 year
affordability requirement contained herein be accomplished and that the Town and the
County will do what is necessary to ensure that the same is not extinguished 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. Both the Town and County
agree to do what each must do to accomplish the 99 year affordability requirement.
4. Resale Provisions. The Town shall assure compliance with affordability of assisted unit
through the Declaration of Restrictive Covenants. The Declaration of Restrictive
Covenants shall include at least the following elements in their resale provisions for the
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Improvements:
4.1 If the buyer no longer uses the Property as rental property or is unable to continue
ownership, then the buyer must sell, transfer, or otherwise dispose of their 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.
4.2 However, if the property is not sold, transferred, or otherwise disposed to 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 50150 by the seller of the Property
and the County.
4.3 The resale provision shall remain in effect for the full affordability period — 99
years.
5. 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 properties constructed with funds provide
affordable unit to low-income families. It is the County's intention that the full public benefit of
this project shall be completed under the auspices of the Town for the assisted unit as follows:
i. In the event that the Town is unable to proceed with any aspect of the Project in a
timely manner, and County and the Town determine that reasonable extension(s) for
completion will not remedy the situation, then the Town will retain responsibility for
requirements for any dwelling unit assisted and County will make no further
payments to the Town.
ii. In the event that the Town, 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 Town shall,
upon the County's request, convey to the County the properties assisted with funds.
Conveyance shall be at the sole discretion of County and on a dwelling unit by
dwelling unit basis.
Conveyance of properties shall be on the terms set forth herein:
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Conveyance of properties shall occur within thirty (30) days of County and the
Town's agreement of the Town's inability to continue as a viable organization. The
Town shall convey the subject properties 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 a non-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.
C. Books and Records. The Town 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 Town shall ensure access to records and financial statements,as necessary, to
provide effective monitoring and evaluation of project performance.
Additionally, the Town 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 the Town's records
that relate to this contract. If any audit by County discloses that payments to the
Town were in excess of the amount to which the Town was entitled under this
contract, the Town shall promptly pay to County the amount of such excess. If the
excess is greater than 1% of the contract amount, the Town shall also reimburse
County its reasonable costs incurred in performing the audit.
ii. The Town 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. The Town shall maintain records verifying the affordability of the assisted 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:
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i. To the County: Orange County
c/o Housing and Community Development
Department
P.O. Box 8181
Hillsborough,NC 27278
ATTN: Director
ii. To The Town: Town of Chapel Hill
Department of Housing
317 Caldwell Street
Chapel Hill,NC 27516
ATTN: Executive Director
Either the County or the Town 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 the Town in this
Agreement shall occur without the prior written consent of the County; neither may the Town
assign this Agreement without the prior written consent of County.
f. Conflict of Interest. The Town 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 Town
further covenants that in performance of this Agreement no person having such a financial
interest shall be employed or retained by the Town 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 HOME Investment Partnership Program.
g. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and there respective successors and assigns.
h Indemnification. To the extent legally possible, the Town 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 Town, its employees, agents, officers, and
contractors in connection with this contract. In the event any such action or claim is brought
against County, the Town shall, upon County's tender, defend the same at the Town's sole cost
and expense, promptly satisfy any judgment adverse to County or to County and the Town
jointly, and reimburse County for any loss, cost, damage, or expense, including attorney fees
suffered or incurred by County.
i. Subcontracting. The Town shall not subcontract work under this contract, in
whole or in part, without the County's prior written approval. The Town shall require any
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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 Town specified in
this contract. Notwithstanding County's approval of a subcontractor, the Town shall remain
obligated for full performance of this contract and County shall incur no obligation to any
subcontractor the Town shall to the extent permitted by law, indemnify, defend, and hold County
harmless from all claims of its contractors.
j. No Joint Venture or Agency. The County and the Town each agree and
acknowledge that nothing contained herein or otherwise, including, without limitation, any act of
the County or the Town under this Agreement, shall be deemed or construed to create any
relationship of joint venture, partnership or agency between the parties.
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 the Town 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 Town 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
the Town 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 the Town
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. The Town 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 this Project.
o. Headings. Headings are for convenience only and shall not be used to interpret or
construe its provision.
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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.
r. 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 Town 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.
S. Publicity; Signage. The Town 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.
t. 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.
U. No Third Party Rights. The parties hereto covenant and agree that nothing
contained in this Agreement or any act by the County or the Town 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 Town or any of their respective officers, agents or employees by any third party.
V. 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.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have set their hands
and seals on the day and year first above written.
COUNTY OF ORANGE, NORTH CAROLINA
(SEAL)
John . Link, Jr., eounty Manager
ATTEST:
Beverly A. e
Clerk to the Board of Commissioners
Appro d as to form and legality
eof 1 h' ounty Attorney
This document has been preaudited in accordance with the N.C. Local Government and Fiscal
Contro ct.
f-'�7 �—, Kenneth Chavious, Finance Director
NORTH CAROLINA
ORANGE COUNTY
This is to certify that on this day personally came before me Beverly A. Blythe, with
whom I am personally acquainted, and being by me duly sworn, says that John M. Link, Jr. is the
County Manager of Orange County, NC, and that she the said Beverly A. Blythe, is the Clerk to
the Board of Commissioners of the County of Orange, the body politic and corporate named
within and which executed the foregoing instrument; that she knows the common seal of said
County; that the seal affixed to said instrument is said common seal; that the name of Orange
County was subscribed thereto by the said County Manager of Orange County, NC and said
Beverly A. Blythe subscribed their names hereto and said common seal was affixed, all by order
of the Board of County Commissioners of Orange County and that said instrument is the act and
deed of Orange County.
Witness my hand and notarial seal, this the day of 20 6o�.
✓� ,/
My commission expires: Z G �G�`�" Notary blic
9
/G Es
I� Town of Chapel Hill
(SEAL) '�•:+ Cpl/ n�
W. Calvin Horton, Town Manager W�''
i
W9 instrument has been preaudited
In the manner required by the Local
ATTEST: emment Budget and Con rol Act.
Finance birector
This is to certify that on this day personally came before me -fC)jte, with
whom I am personally acquainted, and being by me duly sworn, says thak W. Calvin Horton is
the Town Manager of Chapel Hill, NC, and that she the said_YON(j- A: 5nd* , is the Clerk
to the Chapel Hill Town Council, the body politic and corporate named within and which
executed the foregoing instrument; that she knows the common seal of said County; that the seal
affixed to said instrument is said common seal; that the name of Town of Chapel Hill was
subscribed thereto by the said Town Manager of Chapel Hill, NC and said
l u)n MO p(a .1(xm C\qrt subscribed their names hereto and said common seal was
affixed, A by order of the Town Council and that said instrument is the act and deed of Chapel
Hill.
Witness my hand and notarial seal, this the day of 20LA.
0
Notary Public
My commission expires: a \��,�OQ:•••""'•••..•. +
\oTAg),
BL
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Orange County, NC
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'Propbsator'Use,o20t1Z23 OWL 'sF'rorm Fund
Applications are due February 23,2001. Please mail to: Tara Fikes,Orange County
Housing and Community Development Department,PO Box 8181,Hillsborough,N
27278
APPLICANT INFORMATION
1. Lead Or anization:CHAPEL HILL DEPARTMENT of HOUSING
2. Partner Organization if any):
3. Address: HILL NC 27516
4. Phone: (919) 968-2850 ext. 11 5. E-Mail tvaughn@town.ci.chapel-h i nc.as
6. Contact:TiM V&Mirhn 7. Federal I.D. #:
PROPOSED PROJECT
8. Please attach a brief description of the proposed project, including an explanation of h w
fiends will be used for and the specific population and/or area that will benefit from is
project, Two important criteria for judging applications N"-ill be the degree to wl, ch
projects satisfy HOME Program goals as well as the priorities of the Consolidated I an
for Housing and Community Development Programs in Orange County (see follo g
pages for descriptions).
ADDITIONAL INFORMATION
9. Is organization operated as a profit or nonprofit agency?
If nonprofit,please submit copy of 501(C)(3)documentation and a current list of Bo
members.
10. Amount of funds requested: $100,000
11. Total project costs: 110moo
Please attach project budget.including sources you intend to apply for and uses.
12. Are all funding commitments in place for the project?
Please attach commitment letters, if available.
13.Number of people to be served: 1 Public Housing Family of 4
14. If a housing project,number and type of units created:
15. If project targets beneficiaries of a certain income level, please describe:
16. What is the timetable for project completion?
Pro-Lect ig expected to he cmplated by December 20 0-1
BRIE` PROJECT DESCRIPTION
Transitional Rental Housing Profram
We propose to develop a transitional rental-housing program to help public
housing families make the transition from public housing to the private
housing market. The proposed program would assist public housing fitmili
with a rent--paying ability of at least $450 per month. The transitional
housing program would be a stepping-stone between public housing and the
private housing market. Participation in the program would be limited to .
five years. During the Five-year period,participants would receive services
such as budget counseling, homeownership counseling and debt
management, to help them make a successful transition to the private
housing market. At the end of the five-year period,participants would
receive financial assistance to help with a down payment on a home or
security deposits.
The proposed program would consist of about 10 rental units. We would
propose to acquire the 10 units by purchasing at least one single-family
detached home or town home per year over the next several years.
Estimated Project Budget
Acquisition of 3 bedroom house) $ 92,000
(house located in Chapel Hill)
Estimated repairs and closing costs $ 8,000
Total $ 100,000
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Funding Source
Application for HOME Funds $ 100,000
February 23,2001
EXHIBIT B
Prepared by: Geoffrey E. Gledhill,Attorney at Law, P.O. Drawer 1529; Hillsborough,NC 27278
After recording return to: Coleman, Gledhill &Hargrave,P.O. Drawer 1529; Hillsborough,NC 27278
DECLARATION OF RESTRICTIVE COVENANTS
THIS DECLARATION OF RESTRICTIVE COVENANTS (Declaration), dated
, by Orange County, North Carolina for itself and its successors and assigns
(Owner), is given as a condition precedent to the award of Federal HOME Investment
Partnership Program funds by Orange County, a body politic and corporate, a political
subdivision of the State of North Carolina, together with any successor to its rights, duties, and
obligations.
RECITALS:
WHEREAS, the Orange County HOME Consortium has designated $100,000 in FY
2000 HOME funds for the purpose of conveying these funds to assist with acquisition of one
dwelling unit in Chapel Hill to develop a proposed transitional housing plan; and
WHEREAS, the County is the lead entity of the Orange County HOME Consortium, so
designated in an agreement dated July 1, 1997 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 wit 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 Town intends to lease the unit to current public housing family with a
rent paying ability of at least $450 per month included future leasing to 30% and below of
median income as described in their HOME Application dated February 23, 2001 which is
Exhibit A to this Agreement, and hereinafter referred to as "the Project".
WHEREAS, Orange County will take title to the Property at the closing of the purchase
of the Property solely for the purpose of establishing the restrictions on the use of the Property
contained in this Declaration and will immediately thereafter convey title to the Property,
subject to this Declaration, to the Town of Chapel Hill.
NOW, THEREFORE, in consideration of the mutual covenants, promises, and
representations contained herein, it is agreed between the parties hereto as follows:
NOW, THEREFORE, in consideration of the promises and covenants hereinafter set
forth and of other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Owner intends, declares, and covenants that the regulatory and restrictive
covenants set forth herein governing the use, occupancy, and transfer of the Property shall be
and are covenants pertaining to the Property and running with the land for the term stated herein
and are binding upon all subsequent owners of the Property and for such term, except as
specifically provided herein, and are not merely personal covenants of Owner.
SECTION 1 REPRESENTATIONS, COVENANTS AND WARRANTIES OF OWNER
Owner hereby represents, covenants and warrants as follows:
a. It is contemplated that the Property and the Project will be used, during the ninety-nine
years after Project Completion (defined as the last of the following events: the Property
is acquired, rehabilitated, if necessary, and occupied by a low-income family), for rental
housing to families earning up to 60% of HUD area median income. In the event Owner
sells, transfers or exchanges the Property or any portion of the Property, the following
shall pertain:
1. Subject to the requirements of the DEVELOPMENT AGREEMENT (Exhibit A
hereto), the Federal HOME Investment Partnership Program and this Declaration,
Owner may sell, transfer, or exchange the Property to a non-profit fund, foundation,
or corporation of like purpose which is organized and operated exclusively for
charitable and educational purposes and which has established its tax exempt status
under Section 501 (c)(3) of the Internal Revenue Code, or to Orange County;
provided, however, Owner shall obtain the written agreement, in form satisfactory to
Orange County, of any buyer or successor or other person acquiring the Property or
any interest therein, that such acquisition is subject to the requirements of this
Declaration and to the requirements of the DEVELOPMENT AGREEMENT and the
Federal HOME Investment Partnership Program. Owner agrees that County may
void any sale, transfer, or exchange of the Property or any portion of this Property if
the buyer or successor or other person fails to assume in writing the requirements of
this Declaration and the requirements of the DEVELOPMENT AGREEMENT and
the Federal HOME Investment Partnership Program.
2. Any assignment, sale, transfer, conveyance or other disposition of the Property or
any part of the Property other than as described in subparagraph 1 above, whether
voluntary or involuntary or by operation of law shall be subject to the provisions of
SECTION 4 of this Declaration.
b. Owner will, at the time of execution, delivery and recording of this Declaration, have
good and marketable title to the Property, free and clear of any lien or encumbrance (except
encumbrances created pursuant to this Declaration or other permitted encumbrances).
C. Owner warrants that it has not and will not execute any other declaration with provisions
contradictory to, or in opposition to, the provisions hereof, and that in any event, the
requirements of this Declaration are paramount and controlling as to the rights and obligations
herein set forth and supersede any other requirements in conflict herewith.
Declaration of Restrictive Covenants
Page 2
SECTION 2 TERM OF DECLARATION
a. This Declaration, and the Terms of Affordability specified herein, apply to the Property
immediately upon recordation, and Owner shall comply with all restrictive covenants herein.
This declaration shall terminate ninety-nine years after Project Completion, unless Orange
County and Federal HOME Investment Partnership Program affordability restrictions are
terminated due to the sale of the Property to a non-qualified buyer as provided herein.
SECTION 3 RECORDING AND FILING; COVENANTS TO RUN WITH
THE LAND
a. Upon execution of this Declaration by Owner, Owner shall cause this declaration and all
amendments hereto to be recorded and filed in the Office of the Register of Deeds of Orange
County.
b. Owner intends, declares and covenants, on behalf of itself and all future Owners of the
Project during the term of this Declaration, that this Declaration and the covenants and
restrictions set forth in this Declaration regulating and restricting the use, occupancy and
transfer of the Property (1) shall be and are covenants running with the land, encumbering the
Property for the term of this declaration, binding upon Owner's successors in title and all
subsequent Owners of the Property; (2) are not merely personal covenants of Owner; and (3)
shall bind Owner (and the benefits shall inure to Orange County and any past, present or
prospective owner of the Property) and its respective successors and assigns during the term of
this Declaration. Owner hereby agrees that any and all requirements or privileges of estate are
intended to be satisfied, or in the alternate, that an equitable servitude has been created to insure
that these restrictions run with the Property. For the term of this Declaration, each and every
contract, deed or other instrument hereafter executed conveying the Property or portion thereof
shall expressly provide that such conveyance is subject to this Declaration, provided, however,
the covenants contained herein shall survive and be effective regardless of whether such
contracts, deed, or other instrument hereafter executed conveying the Property or portion
thereof provides that such conveyance is subject to this Declaration. It is further the
responsibility of Owner to rerecord the Declaration of Restrictive Covenants no later than one
day before the expiration of 30 years of the date of its sale of each of the dwelling units in the
event the purchaser of the Property from Owner is still the owner of the dwelling unit at the
time of the re-recording. 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 § 47134 or any
comparable preservation law in effect at the time of the recording of the notice of preservation.
It is the intent of this Section of this Declaration that the 99 year affordability requirement
contained herein be accomplished and that Owner and Orange County will do what is necessary
to ensure that the same is not extinguished 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. Both Owner and Orange County agree to do what each must do to accomplish the
99-year affordability requirement.
Declaration of Restrictive Covenants
Page 3
SECTION 4 ENFORCEMENT OF AFFORDABLE HOUSING
REQUIREMENTS
A. Rights of Refusal
a. Grant and Effect. Orange County is granted a right of first refusal to purchase
the Property as described in this Section. Any assignment, sale, transfer, conveyance, or
other disposition of the Property or any part thereof whether voluntarily or involuntarily
or by operation of law ("Transfer") shall not be effective unless and until the below-
described procedure is followed.
b. Right of First Refusal. If Owner contemplates a Transfer to other than an
agency with similar interest in affordable housing (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.) and to 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,
Owner shall send to Orange County, at the address noted in the Notice section of this
Declaration, not less than 90 days prior to the contemplated closing date of the Transfer,
a "Notice of Intent to Sell." This Notice of Intent to Sell shall be accompanied by a copy
of a completed, fully executed bona fide offer to purchase the Property on the then
current North Carolina Bar Association "Offer to Purchase and Contract" form. If Orange
County elects to exercise its said right of refusal, it shall notify the Owner of its election
to purchase within 30 days of its receipt of the Notice and shall purchase the Property or
portion thereof within 90 days of the receipt of the "Notice of Intent to Sell."
C. Sales After Failure to Exercise Rights of Refusal. If Orange County does not
advise Owner in a timely fashion of an intent to purchase the Property, then Owner shall
be free to transfer the property in accordance with this Section.
d. Assi ng ability. Orange County may assign its right of first refusal without Owner's
consent.
B. Resale Provisions
a. If the Owner no longer uses the Property as affordable rental property, then
Owner must sell, transfer, or otherwise dispose of their interest in the Property only to an
agency with similar interest in affordable housing and to serve families with incomes not
exceeding 60% 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.
b. However, if the property is not sold, transferred, or otherwise disposed of to an
agency with similar interest in affordable housing during the term of affordability, the net
sales proceeds (sales price less: (1) selling cost, (2) the unpaid principal amount of the
Declaration of Restrictive Covenants
Page 4
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.
C. The resale provisions shall remain in effect for the full affordability period — 99
years.
C. Owner covenants that it will not knowingly take or permit any action that would result in
a violation of the affordability requirements of Orange County or of the Federal HOME
Investment Partnership Program. Orange County, together with Owner, may execute and record
any amendment or modification of this Declaration and such amendment or modification shall be
binding on third parties granted rights under this Declaration.
D. Owner acknowledges that the primary purpose for requiring compliance by Owner with
restrictions provided in this Declaration is to assure compliance with the affordability
requirements of Orange County and the Federal HOME Investment Partnership Program, AND
BY REASON THEREOF, OWNER IN CONSIDERATION FOR RECEIVING FEDERAL
HOME INVESTMENT PARTNERSHIP PROGRAM FUNDS FOR THE PROPERTY
HEREBY AGREES AND CONSENTS THAT ORANGE COUNTY SHALL BE ENTITLED,
FOR ANY BREACH OF THE PROVISIONS HEREIN, AND IN ADDITION TO ALL OTHER
REMEDIES PROVIDED BY LAW OR IN EQUITY, TO ENFORCE BY SPECIFIC
PERFORMANCE OWNER'S OBLIGATIONS UNDER THIS DECLARATION IN A STATE
COURT OF COMPETENT JURISDICTION, WITH VENUE IN ORANGE COUNTY. Owner
hereby further specifically acknowledges that the beneficiaries of Owner's obligations hereunder
cannot be adequately compensated by monetary damages in the event of any default hereunder.
E. This Declaration may be enforced by Orange County or its designee in the event Owner
fails to satisfy any of the requirements of this Declaration by proceedings at law or in equity
against any person or persons violating or attempting to violate any covenant. If legal costs are
incurred by Orange County, such legal costs, including attorney fees and court costs (including
costs of appeal), are the responsibility of, and may be recovered from the Owner.
SECTION 6 MISCELLANEOUS
a. Severability. The invalidity of any clause,part, or provision of this Declaration shall not
affect the validity of the remaining portions thereof.
b. 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 hereinabove described shall
be effective upon mailing. For purposes of Notice, the addresses of the parties shall, unless
changed as hereinafter provided,be as follows:
Declaration of Restrictive Covenants
Page 5
L
i. To the County: Orange County
c/o Housing and Community Development Department
P.O. Box 8181
Hillsborough,NC 27278
ATTN: Director
ii. To the Town of Chapel Hill: Town of Chapel Hill
c/o Department of Housing
317 Caldwell Street
Chapel Hill,NC 27516
ATTN: Executive Director
C. Governing This Declaration shall be governed by the laws of the State of
North Carolina and, where applicable, the laws of the United States of America.
Declaration of Restrictive Covenants
Page 6
s
IN WITNESS WHEREOF, the Owner has caused this Declaration to be signed by its
duly authorized representative, on the day and year first above written.
ORANGE COUNTY,NORTH CAROLINA
By:
Barry Jacobs
Chair, Orange County Board
of Commissioners
ATTEST:
Beverly A. Blythe
Clerk to the Board of Commissioners
Approved as to form and legality
Geoffrey Gledhill, County Attorney
This document has been preaudited in accordance with the N.C. Local Government and Fiscal
Control Act.
Kenneth Chavious, Finance Director
NORTH CAROLINA
ORANGE COUNTY
I, a Notary Public of the County and State aforesaid, certify that Beverly A. Blythe
personally appeared before me this day and acknowledged that she is the Clerk to the Board of
Commissioners of Orange County, and that by authority duly given and as an act of the County,
the foregoing instrument was signed in its name by the Chair of said Board of Commissioners
and attested by her as Clerk to said Board of Commissioners.
Witness my hand and notarial seal, this the day of 20_
Notary Public
My commission expires:
lsg:orangecounty\declargrahamstreet.doc
Declaration of Restrictive Covenants
Page 7
NORTH CAROLINA
ORANGE COUNTY
AMENDMENT TO DEVELOPMENT AGREEMENT
This is an amendment to the March 6,2001 AGREEMENT("the Development
Agreement")between Orange County, a body politic and corporate, a political subdivision of the
State of North Carolina,(hereinafter referred to as"County"or"the County")and Habitat for
Humanity of Orange County,NC, Inc.,a North Carolina non-profit housing organization
(hereinafter referred to as"Habitat"). The effective date of this amendment is June 19,2001.
WITNESSETH
WHEREAS,the County and Habitat entered into a Development Agreement dated March
6, 2001 for the purpose of providing second mortgages for five(5) low-income families
purchasing homes built by Habitat for Humanity of Orange County,NC, Inc.;and
WHEREAS,the County has reallocated approximately$12,500 in FY 1999 HOME
funding to Habitat to fund a second mortgage for one(1)additional family purchasing a home
built by Habitat;and
NOW,THEREFORE,in consideration of the mutual covenants,promises and
representations contained herein, it is agreed between the parties hereto that all of the terms and
conditions of the Development Agreement are herein reaffirmed and incorporated herein by
reference and amended as follows:
1. Paragraph 1.4 of the Development Agreement is rewritten to read as follows:
Habitat is responsible for soliciting buyers for the six new dwelling units. Habitat and/or
its buyers shall be responsible for securing permanent mortgage financing for the homes.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,have set their hands
and seals on the day and year first above written.
COUNTY F ORANGE,NORTH CAROLINA
(SEAL)
J(&M. Link, Jr., County Manager
ATTEST:
Beverly A. ythe .01
Clerk to the Board of Commissioners
I - I
NORTH CAROLINA
ORANGE COUNTY
This is to certify that on this day personally came before me Beverly A. Blythe, with
whom I am personally acquainted, and being by me duly sworn, says that John M. Link, Jr. is the
County Manager of Orange County,NC, and that she the said Beverly A. Blythe, is the Clerk to
the Board of Commissioners of the County of Orange, the body politic and corporate named
within and which executed the foregoing instrument; that she knows the common seal of said
County; that the seal affixed to said instrument is said common seal; that the name of Orange
County was subscribed thereto by the said County Manager of Orange County, NC and said
Beverly A. Blythe subscribed their names hereto and said common seal was affixed, all by order
of the Board of County Commissioners of Orange County and that said instrument is the act and
deed of Orange County.
Witness my hand and notarial seal,this the /3 day of 2001.
N is
My commission expires. -CccC �I_2ocs
Habitat for Humanity of Orange County,
NC,Inc, �( AtA((SEAL) 7`r►• � 0 0 1
President
ATTEST: "'"'
Secretary
NORTH CAROLINA
ORANGE COUNTY
I, -:!SUDY }Z .SC - , Notary Public in and for the above named County and
State, do hereby certify that on this day personally appeared before me t&oZ with whom I
am personally acquainted, who, being by me duly sworn, says at he is Secretary and that
-SN e HA,9 Jr nl is President of Habitat for Humanity of Orange County, NC, Inc., a North
Carolina corporation, and that by authority duly given and as the act of the corporation, the
foregoing instrument was signed in its name by its President, sealed with its corporate seal and
attested to by its Secretary.
ta-
Witness my hand and notarial seal,this the - day of ZU N k- 20 o 1
Notary blic
My commission expires: a-Y-6'
f
f
Approved as to form an gality ,
o e e , County Attorney
This document has been preaudited in accordance with the N.C. Local Government and Fiscal
Control Act.
Kenneth Chavious, Finance Director
amendmtagreehoh.doc