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HomeMy Public PortalAbout2008.11.26 Community Housing Covenants - Lot 9 - Complete9 Instrument # 336915 VALLEY COUNTY, CASCADE, IDAHO 11-26-2008 08:40:13 No. of Pages: 17 Recorded for : CITY OF MCCALL ARCHIE N. BANBURY Fee: Ex-Officio Recorder Deputy Index to: MISCELLANEOUS RECORD Recording Requested By and When Recorded Return to: Valley -Adams Regional Housing Authority SPACE ABOVE THIS LINE FOR RECORDER'S USE ONLY COMMUNITY HOUSING COVENANTS RUNNING WITH THE LAND This Agreement for Community Housing Covenants Running with the Land is made and is effective as of the first day of recording of this Covenant ("Effective Date") and replaces the previously recorded covenants recorded in Valley County, Idaho on June 11, 2007 as Instrument No. 322190, by and between CITY OF McCALL, ("Declarant") and the VALLEY-ADAMS REGIONAL HOUSING AUTHORITY, an Idaho independent public body corporate and politic (-VARHA"). I. BACKGROUND. 1.1 Declarant owns real property which is designated to be the site of community housing, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Declarant and VARHA are entering into this Covenant. 1.2 Pursuant to the terms and conditions of this Covenant, Declarant hereby grants to VARHA an interest in the Property. This interest shall allow the VARHA to administer the terms and conditions of this Covenant and of the Guidelines, but shall not be construed to impair the ability of a mortgagee to remedy a default or foreclose under the terms of a mortgage and/or deed of trust. Notwithstanding VARHA's interest in the Property, the Declarant is the sole owner of a fee simple estate in the Property. 1.3 Declarant and VARHA hereby agree the Property shall be exclusively and permanently dedicated for use and occupancy by an Owner as outlined in this Covenant. Community Housing Covenants Running with the Land - 1 1.4 Capitalized terms not otherwise defined in this Covenant shall have the meaning ascribed to such terms in Section 2. 2. DEFINITIONS. 2.1 "VARHA" is the Valley Adams Regional Housing Authority, an Idaho independent public body corporate and politic, and its successors and assigns. 2.2 The "Guidelines" are the Community Housing Guidelines adopted by VARHA and in effect as of the applicable date for reference to such Guidelines, as such Guidelines may be amended from time to time. The most current Guidelines recorded in the official records of Valley County, Idaho are recorded as Instrument No. 319204. Amendments to these most current recorded Guidelines will not affect the rights of the holder of a mortgage or deed of trust on the Property recorded prior to the date of recordation of the amendments. 2.3 An "Owner" is either Declarant during Declarant's initial ownership of the Property, a Qualified Buyer who acquires title on the real property, buildings, structures, appurtenances, improvements and fixtures or a Qualified Occupant who rents all or any portion of the Property. 2.4 The "Property" is that certain real property described in Exhibit "A" attached hereto and incorporated herein. For purposes of this Covenant, the Property shall include, without limitation, all estates, rights, title and interest in and to the Property, at law and in equity, and all buildings, structures, appurtenances, improvements and fixtures associated therewith or attached thereto from time to time. 2.5 A "Qualified Buyer" is a person or group of people meeting and in full compliance with the qualifications and conditions of an Owner as defined at Section 4.1 below, in effect at the date a contract between an Owner and a Qualified Buyer is entered into for the Sale of the Property, and who has a complete and current application on file with VARHA at the time a contract for the Sale of the Property is entered into between an Owner and the Qualified Buyer. 2.6 A "Qualified Occupant" is a person or group of people who at the time a lease or rental agreement is entered into between the Owner and Qualified Occupant meet and are in full compliance with the qualifications and conditions set forth in these Covenants for an Owner and who has a complete and current application on file with VARHA. In the absence of Guidelines, or if a Qualified Occupant cannot be found as defined by the Guidelines, then a person or persons who are employed in Valley or Adams Counties shall be deemed Qualified Occupants. 2.7 The terms "Sale," "Sale of or "to Sell" the Property shall include, without limitation, any transfer, purchase, sale, conveyance, grant, gift, bequest or devise, by merger, consolidation, dissolution, operation of law or otherwise, of the Property or any interest therein, in whole or in part, including a long term ground lease. The terms Sale, Sale of or to Sell the Property shall not include any grant of easement or partial conveyance for utility or public right-of-way purposes. The terms Sale, Sale of or to Sell the Property shall not include any grant of a security interest in the Property either by mortgage, deed of trust or otherwise, but shall include a Sale due to foreclosure or acceptance of a deed in -lieu of foreclosure. Community Housing Covenants Running with the Land - 2 3. TRANSFER. 3.1 Except as expressly set forth in this Covenant, Owner may only Sell the Property to a Qualified Buyer. Any Sale of the Property must comply with this Covenant. Any Sale of the Property not in compliance with this Covenant is void. 3.2 At such time as an Owner seeks to Sell the Property, Owner shall complete, execute and deliver to VARHA a Notice of Intent to Sell as set forth in the Guidelines. Upon receipt of the Notice of Intent to Sell and Owner's compliance with the terms of the Notice of Intent to Sell, VARHA shall provide Owner with Qualified Buyers in accordance with the Guidelines. Owner shall then, in accordance with the Guidelines, offer the Property for Sale to the Qualified Buyers provided by VARHA, until an agreement is reached with a Qualified Buyer for the Sale of the Property. Such agreement must comply with these Covenants. 3.3 In the event Owner, in good faith compliance with the procedures set forth in the Guidelines, exhausts the pool of Qualified Buyers provided by VARHA without entering into an agreement for the Sale of the Property, Owner shall notify VARHA of such occurrence. VARHA may then provide Owner with a supplemental pool of Qualified Buyers and Owner shall proceed with the supplemental pool of Qualified Buyers according to Section 3.2. In the event Owner, in good faith compliance with the procedures set forth in the Guidelines, exhausts the supplemental pool of Qualified Buyers, Owner shall be free to market the Property for sale to a Qualified Buyer outside of any pool maintained by VARHA. 3.4 In the event VARHA becomes the fee owner of the Property, such conveyance of the fee interest to VARHA shall not work a merger of the interests of VARHA as to the Property and this Covenant shall continue to be in full force and effect unless an express written agreement signed and acknowledged by VARHA is recorded in the official records of Valley County, Idaho, to the contrary. 3.5 An Owner who transfers employment to a location outside Valley or Adams Counties, or has to move outside Valley or Adams Counties for health reasons or to care for a family member with health concerns, and such Owner is unable to sell the Property to a Qualified Buyer, then, in that event, Owner may rent the Property to a Qualified Occupant. When Owner seeks to rent all or any portion of the Property, Owner shall complete, execute and deliver to VARHA a Notice of Intent to Rent as set forth in the Guidelines. If the Property is financed through the Idaho Housing and Finance Association, further and more restrictive requirements with respect to rental of the Property to non -owner Occupants may be required. 3.6 [n the event Owner, in good faith compliance with the procedures set forth in the Guidelines, is unable to find a Qualified Occupant with whom to enter into an agreement for the rental of the Property, Owner shall notify VARHA of such occurrence. VARHA may then provide Owner with a list of Qualified Occupants from which Owner might seek to enter into a rental agreement with in accordance with Section 3.5. By providing a list of Qualified Occupants, VARHA does not warrant, represent or guarantee the Qualified Occupant's ability to perform its duties or obligations under the rental agreement. The selection of any Qualified Occupant is at the sole risk of the Owner. The maximum rental term shall not exceed one year unless Owner obtains written authorization from Declarant and VARHA after providing Declarant and VARHA with Community Housing Covenants Running with the Land - 3 such information that either Declarant or VARHA deem necessary to evaluate the request for extended lease of the Property. A Qualified Occupant either alone, or in combination with the Owner, must comply with the Covenants regulating use and maintenance of the Property set forth in Sections 4.2, 4.3, 4.4 and 4.5 below. 3.7 Owner is advised to seek professional assistance from a lawyer, accountant, licensed real estate salesperson or broker and/or other professionals with regard to the Sale or rental of the Property. VARHA does not represent and is not acting on behalf of Owner, the Qualified Buyer or the Qualified Occupant in the Sale or rental of the Property. VARHA is acting on its own account as to its interest in the Property pursuant to this Covenant and any assistance, forms or directions provided by VARHA or as set forth in the Guidelines are to further VARHA's interest in the Property. 4. USE, OCCUPANCY, MAINTENANCE AND REPAIR REQUIREMENTS. 4.1 Except as allowed at 3.5 above, Owner shall use the Property as the Owner's primary place of residence. For purposes of the preceding sentence, the Property shall be deemed the Owner's primary place of residence if the Owner (a) occupies more than thirty percent (30%) of the interior floor space (85% if the Property is financed by the Idaho Housing and Finance Association), (b) is physically present on and residing in the Property for not less than nine (9) months in every twelve (12) month period, (c) has not accepted employment outside of Adams or Valley County (distinct and isolated projects outside of Adams or Valley County not exceeding ninety (90) days in duration shall not constitute a violation of this section). 4.2 Owner shall not use or allow the Property to be used for any business or commercial operation without first obtaining a home occupation permit or otherwise complying with all laws, rules, regulations and permits pertaining to such activities. Owner shall not change the zoning designation of the Property without the prior written consent of Declarant, which consent may be granted, conditioned or withheld in Declarant's sole and absolute discretion. Furthermore, no business or commercial operation shall be conducted on the Property which materially interferes with or precludes the Property's use and occupancy as a residence and in no event shall more than 15% of the interior floor space be used for any business or commercial operation. The property shall not be used as a "recreational" or "second home". Owner shall comply with all applicable laws and regulations regarding the use and occupancy of the property, including but not limited to: the parking and storage of vehicles and equipment. 4.3 Owner shall at all times, and at its own cost and expense, maintain, repair and/or replace in good, clean and habitable condition the Property and every part thereof, including, without limitation, any home, building or improvement on the Property, the roof, foundation, walls, siding, trim, floors, doors and windows, all electrical, plumbing, sewer, septic and HVAC components, lines and fixtures, all appliances, equipment and systems on the Property, all paved surfaces, all landscaped areas, and any sprinkler systems and water lines, reasonable wear and tear excepted. Such work must be performed in a good and workmanlike manner. Owner shall maintain the landscaped areas of the Property in a neat, clean and healthy condition. Owner shall replace all dead, dying or diseased plants, shrubs and trees. Owner shall provide adequate watering for the landscaped areas shall mow, trim and prune the landscaped areas as needed for a neat and Community Housing Covenants Running with the Land - 4 presentable appearance and shall otherwise keep the Property free of harmful pests, insects and noxious weeds and plants. If Owner refuses or neglects to maintain, repair, or replace the Property, or any part thereof, in accordance with this Section, according to the provisions of Sections 11 and 12, VARHA shall have the right, but not the obligation, to perform such maintenance, repair or replacement obligations on behalf of and for the account of Owner. In such event, any costs incurred by VARHA shall be immediately due and payable upon receipt of an invoice therefore according to the terms of Section 12.5. 4.4 Owner shall make or cause to be made all repairs to the Property and perform or cause to be performed all work thereon so as not to permit any waste or deterioration of the Property. Upon the Sale of the Property, Owner shall remove all of Owner's belongings not sold to the Qualified Buyer and leave the Property in a good and clean condition, reasonable wear and tear excepted. 4.5 Owner shall comply with all laws, rules, regulations, and ordinances pertaining to the Property or the use or occupancy of the Property. Owner shall comply with any covenants, restrictions, rules or regulations encumbering the Property, including, without limitation, any covenants, conditions or restrictions imposed by any homeowner's association of which the Property is a part. 5. CLOSING. 5.1 Except in the event of a foreclosure sale, at the closing of any Sale of the Property, the Owner and the Qualified Buyer shall share equally in all escrow fees. Ad valorem taxes and assessments, homeowner association assessments and fees, rents, and utilities shall be prorated as of the date of closing. Owner shall pay the cost to release any monetary liens or encumbrances granted or caused by Owner and all premiums for a standard owner's policy of title insurance in the amount of the purchase price. In the event the Owner agrees to pay the closing costs to be paid by the Qualified Buyer pursuant to this Section 5.1 or any other closing costs to be incurred by the Qualified Buyer as permitted by the Guidelines, the price at which the property sale occurs may be increased to cover the actual expenses paid by the Owner on behalf of the Qualified Buyer. 5.2 At Closing, the Qualified Buyer shall execute and deliver to VARHA an Acknowledgment of Covenant in accordance with the Guidelines indicating Owner is aware of the terms of this Covenant and the Guidelines and agrees to be bound thereby. A Qualified Buyer's failure to execute or deliver to VARHA an Acknowledgment of Covenant shall not compromise, minimize or in any way affect the terms, covenants or conditions of this Covenant or VARHA's interest herein and the Qualified Buyer shall nonetheless be bound by and subject to this Covenant. 6. INSURANCE & CASUALTY. 6.1 Owner shall at all times during Owner's ownership of the Property cause the Property to be insured with Causes of Loss — Special Form (formerly known as "All Risk") property insurance in an amount not less than the full replacement cost of all improvements on the Property at the time of loss with like kind and quality. Such insurance shall be provided by a carrier admitted to engage in the business of insurance in the state of Idaho. No policy will contain a deductible or Community Housing Covenants Running with the Land - 5 self -insured retention in excess of three percent (3%) of the Previous Sales Price unless otherwise approved by VARHA. If requested by VARHA, Owner shall cause VARHA to be named as an additional insured as its interests may appear by endorsement acceptable to VARHA and shall promptly deliver to VARHA a copy of Owner's insurance policy in conformance with this section. If the forms of policies required by this section are superseded or no longer available, VARHA will have the right to require other equivalent or better forms. 6.2 If the Property is damaged or destroyed, Owner shall promptly notify VARHA in writing. Owner shall thereafter promptly make a claim on any insurance policy covering such damage or destruction. Mortgagee shall have first claim on such proceeds to the extent necessary to pay mortgage principal and any accrued interest. Owner shall thereafter have the option to either a) utilize the remaining proceeds of any insurance settlement, together with a new mortgage not to exceed the balance (except with written approval of the VARHA) of any mortgages paid from said settlement to repair or restore the Property to its condition prior to such damage or destruction, unless Owner obtains VARHA's prior written approval to repair or restore the Property to some other condition or state, or b) to take such proceeds from the insurance settlement as would have been generated from a sale per the terms of this Covenant (net of mortgages or other obligations paid from the proceeds from the proceeds of the insurance settlement), and assign the balance of the insurance proceeds, together with title to the Property, to VARHA. 7. ENCUMBRANCES. 7.1 Owner shall promptly pay when due all monetary liens, taxes, assessments, and encumbrances on the Property and otherwise comply with the terms and provisions of any deed of trust, mortgage or other loan documents pertaining to the Property. Owner shall instruct all lenders and their assigns to copy VARHA on all communications relating to any loan on the Property and within five (5) days after Owner's receipt, Owner shall provide VARHA with copies of any written communications from any lender not delivered to VARHA. In the event that VARHA initiates any enforcement or default action against the Owner, the VARHA shall, within five (5) days after commencement of such action, notify the mortgage holder of such action. 7.2 After any default, late payment, or missed payment on any loan or encumbrance on the Property, or if a nonconsensual lien is filed upon the Property, Owner shall, upon the request of VARHA, participate in loan counseling, budgeting, financing or distressed loan services, classes or programs. 7.3 Any breach of this Covenant shall not defeat or render invalid the lien of any mortgage or deed of trust made in good faith for value, but, except as otherwise provided in Sections 7.4 and 7.5, this Covenant shall be binding upon and be effective against any Owner whose title is acquired by foreclosure, trustee's sale or otherwise. 7.4 In the event of any foreclosure of a purchase money mortgage or deed of trust in a first priority position on the Property (but subject to this Covenant), such foreclosing party ("Foreclosing Party") may sell the Property through a duly called and noticed foreclosure sale to any person or entity provided that the foreclosing party strictly adheres to the provisions of this Section 7.4 and Section 7.5. Community Housing Covenants Running with the Land - 6 (a) The Foreclosing Party is requested to notify VARHA in writing of the pending foreclosure on or before fifteen (15) days after the trustee or beneficiary files for record the notice of default as required by Idaho Code Section 45-1505 (2005) or the mortgagee serves upon the mortgagor an action for foreclosure and thereafter the Foreclosing Party shall send a copy of all notices sent to the Owner to VARHA; and (b) At any time prior to the foreclosure sale and upon request of VARHA, the Foreclosing Party shall agree to sell, transfer and convey to VARHA the entire debt obligation owed to the Foreclosing Party and take full assignment of the debt obligation, promissory note, and other loan documentation, including foreclosure rights, for the Foreclosing Party's gross investment. VARHA may, but shall not be obligated to, purchase the debt obligation for less than the amount calculated if VARHA and the Foreclosing Party so agree. 7.5 In the event VARHA does not elect to purchase the debt obligation pursuant to Section 7.4(b) and the Foreclosing Party has strictly adhered to Section 7.4, or in the event VARHA has taken assignment of the debt obligation and is the Foreclosing Party, the Foreclosing Party may proceed with the foreclosure action and the Property may be sold to a person other than a Qualified Buyer. Proceeds, if any, from the foreclosure sale shall be distributed in accordance with this paragraph. Costs of foreclosure, including trustee services, sheriff's fees, and similar costs, and all amounts due the Foreclosing Party shall have first priority to the sale proceeds. Next, Owner shall be entitled to any amount in excess of the amounts paid in the preceding sentence. Provided that the Foreclosing Party has strictly adhered to the requirements of Sections 7.4 and 7.5 and all rights of redemption or challenges to the validity or enforceability of the foreclosure sale have expired, this Covenant, and the rights of the VARHA hereunder, shall terminate. Notwithstanding the foregoing, the termination of this Covenant shall not affect the Ground Lease covering the Property. 7.6 Any deed in lieu of foreclosure shall be subject to the requirements of paragraphs 7.4 and 7.5 with respect to notice to the VARHA, option and rights of the VARHA to purchase or take assignment of the debt obligation, and limitation of the recoverable mortgage principal amount. Provided that party acquiring title through a deed in lieu of foreclosure has strictly adhered to the requirements of Sections 7.4 and 7.5 and all rights of redemption or challenges to the validity or enforceability of said action have expired, this Covenant, and the rights of the VARHA hereunder, shall terminate. Notwithstanding the foregoing, the termination of this Covenant shall not affect the Ground Lease covering the Property. 7.7 If the Property is financed under the Mortgage Revenue Bond program administered by the Idaho Housing and Finance Association, the parties to this Covenant understand that various requirements of that program may be more stringent than those set forth in this Covenant and, in such case; the parties agree that those more stringent requirements shall prevail. 8. CONDEMNATION. 8.1 Within ten (10) days after Owner receives any notice that all or any portion of the Property is sought by condemnation, Owner shall notify VARHA. If all or any portion of the Property is taken by eminent domain or conveyed by Owner under threat of condemnation, the Maximum Sales Price, determined as of the date all or any portion of the Property is conveyed to Community Housing Covenants Running with the Land - 7 the condemning authority or the valuation date for purposes of the condemnation proceeding, whichever is earlier ("Valuation Date"), shall be decreased by the assessment of damages paid to Owner for the value of or damages to the Property. 8.2 Any assessment of damages paid by the condemning authority for the value of or damages to the Property shall be first utilized to pay the full amount of any existing mortgages, together with any accrued interest thereon. The balance of damage payment proceeds shall shared be shared between Owner (and secured mortgagees) and VARHA. In the event VARHA and Owner are unable to agree on the fair market value of the Property, within thirty (30) days after receipt of a request by either VARHA or Owner, VARHA and Owner shall each appoint an appraiser who shall be a member of the Appraisal Institute (or substitute organization which certifies and trains appraisers) with at least three (3) years experience in appraising residential real property in the county in which the Property is located. The appointed appraisers shall diligently proceed to appraise the fair market value of the Property, without regard to this Covenant, as of the Valuation Date. [f the higher of the two appraisals is more than five percent (5%) of the lower appraisal and the parties cannot agree upon the fair market value of Property, the two appraisers shall together appoint a similarly qualified third appraiser within twenty (20) days after receipt of written demand made by either party. Such third appraiser shall select one of the prior two appraisals which most closely approximates the third appraiser's opinion of the Property's fair market value and the selected appraisal shall conclusively establish the fair market value of the Property as of the Valuation Date. In the event the difference between the first two appraisals is less than five percent (5%), the amount obtained by averaging the respective appraisals shall constitute the fair market value. Each party agrees to pay its respective appraiser's fee plus one- half of the third appraiser's fees. For purposes of this Section, fair market value shall mean the amount at which the Property would change hands between a willing buyer and a willing seller, neither being under a compulsion to buy or sell and both having reasonable knowledge of the relevant facts. Furthermore, the existence of any encumbrances on Property (other than this Covenant) and the benefit of putting the Property to its highest and best use considering all factors, shall be taken into consideration when determining the fair market value of the Property. 9. INDEMNITY, WAIVER AND RELEASE. 9.1 OWNER ACKNOWLEDGES AND AGREES THAT VARHA, ITS AGENTS, EMPLOYEES AND CONTRACTORS, ARE NOT MAKING, HAVE NOT MADE AND EXPRESSLY DISCLAIM ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO ANY QUALIFIED BUYER OR QUALIFIED OCCUPANT AND/OR WITH RESPECT TO ANY ASPECT, FEATURE OR CONDITION OF THE PROPERTY INCLUDING, WITHOUT LIMITATION, THE EXISTENCE OF HAZARDOUS WASTE, THE SUITABILITY OF THE PROPERTY FOR OWNER'S INTENDED USE, OWNER'S ABILITY TO SELL THE PROPERTY IN A TIMELY FASHION OR TO RENT THE PROPERTY TO A QUALIFIED OCCUPANT FOR ANY LENGTH OF TIME OR IN A TIMELY FASHION. OWNER, QUALIFIED BUYER AND QUALIFIED OCCUPANT SHALL INDEPENDENTLY VERIFY ALL INFORMATION AND REPORTS REGARDING ANY ASPECT OR FEATURE OF THE PROPERTY, AN OWNER, A QUALIFIED BUYER OR A QUALIFIED OCCUPANT PROVIDED BY VARHA. VARHA DOES NOT GUARANTY THE ACCURACY OF ANY INFORMATION OR REPORTS PROVIDED BY VARHA, ITS Community Housing Covenants Running with the Land - 8 AGENTS, EMPLOYEES OR CONTRACTORS. TO THE FULLEST EXTENT PERMITTED BY LAW, OWNER AND QUALIFIED BUYER RELEASE VARHA FROM ANY AND ALL LIABILITY RELATING TO ANY ASPECT OR CONDITION OF THE PROPERTY, KNOWN OR UNKNOWN, FORESEEABLE OR UNFORESEEABLE, ACTUAL OR CONTINGENT, ARISING BY STATUTE, COMMON LAW OR OTHERWISE. AS USED HEREIN "HAZARDOUS WASTE" SHALL MEAN ANY HAZARDOUS WASTE OR POLLUTANTS, CONTAMINANTS OR HAZARDOUS WASTE AS DEFINED BY THE FEDERAL WATER POLLUTION CONTROL ACT, THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1990 AND ANY AMENDMENTS THERETO, THE RESOURCE CONSERVATION AND RECOVERY ACT AND ANY AMENDMENTS THERETO OR ANY SIMILAR STATE, LOCAL OR FEDERAL LAW, RULE OR REGULATION, INCLUDING, WITHOUT LIMITATION, ASBESTOS OR ASBESTOS CONTAINING MATERIALS, PCBS, PETROLEUM AND PETROLEUM PRODUCTS AND UREA -FORMALDEHYDE. 9.2 OWNER HEREBY RELEASES AND SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS VARHA FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LIABILITY, CAUSES OF ACTION, JUDGMENTS, EXPENSES (INCLUDING ATTORNEY FEES AND ATTORNEY FEES ON ANY APPEAL) (COLLECTIVELY "CLAIMS") ARISING FROM OWNER'S USE OR OCCUPANCY OF THE PROPERTY, AND SHALL FURTHER INDEMNIFY, DEFEND AND HOLD VARHA HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS ARISING FROM ANY BREACH OR DEFAULT IN THE PERFORMANCE OF ANY OBLIGATION ON OWNER'S PART TO BE PERFORMED UNDER THE TERMS OF THIS COVENANT , OR ARISING FROM ANY ACT, OMISSION OR NEGLIGENCE OF OWNER, OR ANY OF ITS AGENTS, CONTRACTORS, TENANTS, OCCUPANTS OR INVITEES, AND FROM AND AGAINST ALL CLAIMS OR ANY ACTION OR PROCEEDING BROUGHT THEREON; AND IN CASE ANY ACTION OR PROCEEDING BE BROUGHT AGAINST VARHA BY REASON OF ANY SUCH CLAIM, OWNER, UPON NOTICE FROM VARHA, SHALL DEFEND THE SAME AT OWNER'S EXPENSE BY COUNSEL REASONABLY SATISFACTORY TO VARHA. OWNER, AS A MATERIAL PART OF THE CONSIDERATION TO VARHA, HEREBY ASSUMES ALL RISK OF DAMAGE TO PROPERTY OR INJURY TO PERSONS IN, UPON OR ABOUT THE PROPERTY FROM ANY CAUSE AND OWNER HEREBY WAIVES ALL CLAIMS IN RESPECT THEREOF AGAINST VARHA, EXCEPT THOSE CLAIMS SOLELY CAUSED BY VARHA'S NEGLIGENCE OR WILFUL MISCONDUCT. 9.3 VARHA SHALL NOT BE LIABLE FOR INJURY OR DAMAGE WHICH MAY BE SUSTAINED BY THE PERSON, GOODS, WARES, MERCHANDISE OR PROPERTY OF OWNER, OR ANY OCCUPANTS OR INVITEES TO THE PROPERTY, OR ANY OTHER PERSON IN OR ABOUT THE PROPERTY CAUSED BY OR RESULTING FROM FIRE, STEAM, ELECTRICITY, GAS, WATER OR RAIN, FREEZING, OR LEAKAGE, OBSTRUCTION OR OTHER DEFECTS OF THE PIPES, SPRINKLERS, WIRES, APPLIANCES, PLUMBING, AIR CONDITION, LIGHTING FIXTURES OR OTHER ASPECT OR FEATURES OF THE PROPERTY. 10. DEFAULT. Community Housing Covenants Running with the Land - 9 10.1 Upon the expiration of thirty (30) days' (ten [10] days' for the failure to pay money) written notice from any party bound or benefited by this Covenant stating the other party has failed to perform its obligations hereunder, such party shall be deemed to be in default unless such failure to perform is cured within the thirty (30) days (ten [10] days' for the failure to pay money) period, in which case no default shall be deemed to have occurred. Notwithstanding the foregoing sentence, if such default (other than the failure to pay money) cannot be cured within the thirty (30) day period and the defaulting party is diligently working to remedy the default, the cure period shall be extended for such time as is reasonably necessary to cure the default. 10.2 In order to ensure compliance with the provisions of this Covenant, VARHA, by its authorized representative, may inspect the Property between the hours of 8:00 AM and 5:00 PM, Monday through Friday, or at such other time as may be agreed to by Owner and VARHA, after providing the Owner with not less than twenty-four (24) hours' prior written notice. 10.3 Upon receipt of a notice of default and prior to the expiration of the applicable cure period, an Owner may request in writing a hearing before the VARHA Board of Commissioners to determine the merits of the allegations. Upon VARHA's receipt of a hearing request, the remainder of the applicable cure period shall be tolled pending the outcome of the hearing, and a hearing shall be held at the next regularly scheduled meeting of the VARHA Board of Commissioners. If no hearing is requested in writing during such time period and the violation is not cured within the applicable period, the Owner shall be in default of this Covenant. If a hearing is held before the VARHA Board of Commissioners, the decision of the VARHA Board of Commissioners shall be final for purposes of determining if a violation has occurred. 10.4 It is expressly agreed that no breach of this Covenant shall entitle any Owner, Qualified Buyer, Qualified Occupant, VARHA or any other party affected by this Covenant to terminate this Covenant, but such limitation shall not affect in any manner any other rights or remedies which such persons or entities may have hereunder by reason of any breach of this Covenant. 11. REMEDIES. 11.1 In the event of a default or breach of any term, covenant, warranty or provision of this Covenant , the non -defaulting party may at any time thereafter without limiting the exercise of any right or remedy at law or in equity which the non -defaulting party may have by reason of such default or breach; (a) Seek specific performance of this Covenant; (b) Perform any work, pay any amounts due, or complete any duties or obligations of Owner and otherwise exercise any self-help remedies; (c) Enjoin any Sale of or proposed Sale of the Property; and (d) Require the immediate Sale of the Property to a Qualified Buyer in accordance with Section 3.2. Community Housing Covenants Running with the Land - 10 1 l .2 In the event VARHA pays any amount payable by Owner or incurs any expense due to the default of Owner, such amount shall be immediately due and payable by Owner upon receipt of an invoice from VARHA. Interest shall accrue from the date the invoice is received by Owner to and including the date VARHA receives payment in full at a rate equal to the lesser of (i) the highest rate allowed by law, and (ii) twelve percent (12%). Furthermore, in the event the Owner does not pay the invoice in full within ten (10) days after receipt, VARHA may file a lien on the Property for the amount of said expenses plus accrued interest as set forth above and such lien shall be effective upon recording in the county in which the Property is located. Upon any Sale of the Property, if the Owner has not previously paid all amounts due VARHA, VARHA shall be paid the amounts it is due from the sale proceeds and any escrow company or closing agent handling the transaction shall be bound to pay such amounts due as though specifically instructed by Owner and Owner agrees to and acknowledges the same. Notwithstanding the foregoing sentence, VARHA's right to the sale proceeds shall not have priority over any lien on the Property recorded prior to any lien filed by VARHA. In the event VARHA does not file a lien for the amounts it is due, VARHA's claim shall be subordinate to any recorded lien on the Property. 12. NOTICES. 12.1 All notices given pursuant to this Covenant shall be in writing and shall be given by personal service, by United States certified mail, return receipt requested, or by United States express mail or other established express delivery service (such as Federal Express) with signature confirmation required, postage or delivery charge prepaid, addressed to the appropriate party at the address set forth below. If a notice is delivered to Owner by personal service or by United States express mail or other established express delivery service (such as Federal Express), such notice may be delivered to the Property. If a notice must be given to a person other than one designated below or otherwise sent to Owner, such notice shall be sent to the person and address shown on the then current real property tax rolls of the county in which the Property is located. All notices given to the appropriate party shall be sent to the address set forth below: To Declarant: City of McCall McCall City Hall 216 E. Park Street McCall, Idaho 83638 To VARHA: Director VALLEY ADAMS REGIONAL HOUSING AUTHORITY PO BOX 843 McCALL, IDAHO 83638 Community Housing Covenants Running with the Land - 11 The person and address to which notices are to be given may be changed at any time by such party upon written notice to the other party. All notices given pursuant to this Covenant shall be deemed given upon receipt. 12.2 For the purpose of this Covenant, the term "receipt" shall mean the earlier of any of the following: (i) the date of delivery of the notice or other document to the address specified pursuant to Section 12.1 as shown on the return receipt, (ii) the date of actual receipt of the notice or other document by the person or entity specified pursuant to 12.1, or (iii) in the case of refusal to accept delivery or inability to deliver the notice or other document, the earlier of (a) the date of the attempted delivery or refusal to accept delivery, (b) the date of the postmark on the return receipt, or (c) the date of receipt of notice of refusal or notice of non -delivery by the sending party. 13. GENERAL PROVISIONS 13.1 This Covenant shall be a permanent burden on the Property, for the benefit of VARHA, and shall run with the land. 13.2 In the event any party bound or affected by this Covenant initiates or defends any legal action or proceeding in any way connected with this Covenant, the prevailing party in any such action or proceeding (in addition to any other relief which may be granted, whether legal or equitable), shall be entitled to recover from the losing party in any such action its reasonable costs and attorneys' fees (including, without limitation, its reasonable costs and attorneys' fees on any appeal). All such costs and attorneys' fees shall be deemed to have accrued on commencement of any legal action or proceeding and shall be enforceable whether or not such legal action or proceeding is prosecuted to judgment. 13.3 Whenever possible, each provision of this Covenant and any other related document shall be interpreted in such a manner as to be valid under applicable law; but if any provision of any of the foregoing shall be invalid or prohibited under said applicable law, such provisions shall be ineffective to the extent of such invalidity or prohibition without invalidating the remaining provisions of this Covenant or related document. 13.4 The laws of Idaho, without giving effect to its choice of law principles, govern all matters with respect to this Covenant, including all tort claims. 13.5 This Covenant shall inure to the benefit of and be binding upon the Owners, their heirs, personal representatives, successors and assigns, and upon any person or entity acquiring the Property, or any portion thereof, or any interest therein, whether by merger, consolidation, dissolution, operation of law or otherwise; provided, however, that if any Owner Sells all or any portion of the Property in accordance with this Covenant , such Owner shall thereupon be released and discharged from any and all obligations as Owner in connection with the Property arising under this Covenant after the Sale but shall remain liable for all obligations arising under this Covenant prior to the Sale. The new Owner of the Property or any portion thereof (including, without limitation, any Owner who acquires its interest by foreclosure, trustee's sale or otherwise) shall be liable for all obligations arising under this Covenant with respect to the Property or portion thereof after the date of Sale. Community Housing Covenants Running with the Land - 12 13.6 This Covenant may only be amended by a written agreement signed by Owner and VARHA that identifies itself as an amendment to this Covenant. 13.7 Paragraph or section headings within this Covenant are inserted solely for convenience of reference, and are not intended to, and shall not govern, limit or aid in the construction of any terms or provisions contained herein. 13.8 The parties to this Covenant, and Owners, agree to execute such further documents and take such further actions as may be reasonably required to carry out the provisions and intent of this Covenant or any agreement or document relating hereto or entered into in connection herewith. 13.9 VARHA may amend the Guidelines at any time in its sole and exclusive discretion. 13.10 The failure of VARHA to insist upon strict performance of any terms, covenants or conditions of this Covenant shall not be deemed a waiver of any rights or remedies VARHA may have, and shall not be deemed a waiver of any subsequent breach or default in the performance of any terms, covenants or conditions of this Covenant by the same or any other person or entity. A party for whose benefit a condition is inserted herein shall have the unilateral right to waive such condition. IN WITNESS WHEREOF, the parties hereto have executed this instrument on the day and year above first written. THE VALLEY-ADAMS REGIONAL DECLARANT/CITY OF McCALL: HOUSING AUTHORITY By: Title: Executive Director, Michael Davidile: Mayor, Bert Kulesza Attest: 3/"F/t-it_i c e �� �— itle: Actin City Clerk Bre�halo T g y upka Community Housing Covenants Running with the Land - 13 13.6 This Covenant may only be amended by a written agreement signed by Owner and VARHA that identifies itself as an amendment to this Covenant. 13.7 Paragraph or section headings within this Covenant are inserted solely for convenience of reference, and are not intended to, and shall not govern, limit or aid in the construction of any terms or provisions contained herein. 13.8 The parties to this Covenant, and Owners, agree to execute such further documents and take such further actions as may be reasonably required to carry out the provisions and intent of this Covenant or any agreement or document relating hereto or entered into in connection herewith. 13.9 VARHA may amend the Guidelines at any time in its sole and exclusive discretion. 13.10 The failure of VARHA to insist upon strict performance of any terms, covenants or conditions of this Covenant shall not be deemed a waiver of any rights or remedies VARHA may have, and shall not be deemed a waiver of any subsequent breach or default in the performance of any terms, covenants or conditions of this Covenant by the same or any other person or entity. A party for whose benefit a condition is inserted herein shall have the unilateral right to waive such condition. IN WITNESS WHEREOF, the parties hereto have executed this instrument on the day and year above first written. THE VALLEY-ADAMS REGIONAL DECLARANT/CITY OF McCALL: HOUSING AUTHORITY By: Title: E ecutive Dir ctor, Michae vid Title: Mayor, Bert Kulesza Attest: Title: Acting City Clerk, Brenna Chaloupka Community Housing Covenants Running with the Land - 13 STATE OF IDAHO ) ) ss. County of On this ` f day of /001/0414.4e, , 2008, before me, the undersigned, a notary public in and for the State of Idaho, personally appeared Michael David, the Executive Director of Valley Adams Regional Housing Authority, an Idaho independent public body corporate and politic, known to me, or proven to me by oath and identification, to be the person whose name is subscribed to this instrument, and acknowledged to me under oath that he executed the same on behalf of said company. IN WITNESS WHEREOF, if have hereunto set my hand and seal the day and year first above written. STATE OF IDAHO ) ) ss. County of ) L Zi Name: Notary Public f laaoG�.P Residingat My commission e g'- i ' / y On this day of , in the year 2008, before me, a Notary Public in and for said State, personally appeared Bert Kulesza and Brenna Chaloupka, known or identified to me to be the Mayor and Acting City Clerk of McCall, Idaho, respectively, the Idaho municipal corporation that executed the instrument or the person that executed the instrument on behalf of said municipal corporation, and the person who attested the Mayor's signature to the instrument, and acknowledged to me that such municipal corporation executed the same. IN WITNESS WHEREOF, if have hereunto set my hand and seal the day and year first above written. Name: Notary Public for Idaho Residing at My commission expires Community Housing Covenants Running with the Land - 14 STATE OF IDAHO ) ) ss. County of ) On this day of , 2008, before me, the undersigned, a notary public in and for the State of Idaho, personally appeared Michael David, the Executive Director of Valley Adams Regional Housing Authority, an Idaho independent public body corporate and politic, known to me, or proven to me by oath and identification, to be the person whose name is subscribed to this instrument, and acknowledged to me under oath that he executed the same on behalf of said company. IN WITNESS WHEREOF, if have hereunto set my hand and seal the day and year first above written. Name: Notary Public for Idaho Residing at My commission expires STATE OF IDAHO ) ) ss. County of On this (1 day of tjel t , in the year 2008, before me, a Notary Public in and for said State, personally appeared Bert Kulesza and Brenna Chaloupka, known or identified to me to be the Mayor and Acting City Clerk of McCall, Idaho, respectively, the Idaho municipal corporation that executed the instrument or the person that executed the instrument on behalf of said municipal corporation, and the person who attested the Mayor's signature to the instrument, and acknowledged to me that such municipal corporation executed the same. IN WITNESS WHEREOF, if have hereunto set my hand and seal the day and year first above written. `�� utiturrnnyl \` wit iv a .,,to 1.1.4.4 lot 41. i ` ATE of W) "'Mainr[lpO' 4.) Name: v6e(;.;1 e_ 1,1)01 Z4-17 Notary Public for Idah Residing at / 6 Ora I( My commission expires Community Housing Covenants Running with the Land - 14 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY Lot 9, Block 3, Greystone Village No. 3, 1559 McCall Avenue, McCall, Valley County, Idaho, according to the official plat thereof, recorded July 31, 2006, as Instrument No. 311462, records of Valley County, Idaho. Community Housing Covenants Running with the Land - 15