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HomeMy WebLinkAboutAgr 2019-09-18 (BMR) DUPLICATE Agreement for BMR Program Portfolio Management Town of Tiburon This Agreement for BMR Program Portfolio Management (the "Agreement") is made and entered into as of June 30, 2019, by and between the Housing Authority of the County of Marin (the "Authority") and the Town of Tiburon ("Jurisdiction") relating to Jurisdiction's Below Market Rate Homeownership Program (the "BMR Program"), and each unit that is part of the BMR Program is referred to a "BMR unit". NOW, THEREFORE, for and in consideration of the mutual promises contained herein, the Authority and Jurisdiction agree as follows: I. PROGRAM MANAGEMENT SERVICES. The Authority shall provide the following services to Jurisdiction: A. PRE-SALE SERVICES. i. Meet with Jurisdiction and prospective developers to discuss (1) Jurisdiction's inclusionary housing requirements; (2) how those requirements can be satisfied through the BMR Program; and (3) how to determine a specific "affordable" sales price to be applied to a general income level target. ii. Assist Townstaff in developing the Conditions of Approval for projects with affordable units. iii. Establish the initial for-sale BMR Unit pricing information for the Affordable Housing Agreement pursuant to the conditions of approval and/or the affordability requirements established by Jurisdiction. iv. Prepare and execute the three-party among Authority, Jurisdiction, and a developer/contractor, (the "Affordable Housing Agreement"), implementing the Jurisdiction's affordable housing requirements contained in the conditions of approval. The Affordable Housing Agreement shall include a description of the affordable units including number of bedrooms, the affordability levels and initial sales prices, the buyer selection criteria, and the procedures for the purchase of the unit by eligible households. The Authority shall work with the Jurisdiction to obtain the required signatures on the Agreement. BMR Memorandum of Understanding- MHA and Town of Tiburon Page 1 The Authority shall effectuate the recordation of the Affordable Housing Agreement on the subject property and provide proof of such recording to the Jurisdiction. The Authority shall be paid by the Developer for the services contained in this Section A. (iv). B. SALE AND RE-SALE SERVICES. i. Provide up to date information on the BMR program requirements, income limits, and applications on the Marin Housing Authority website. ii. Advertise the BMR Program and BMR units when appropriate and through methods deemed appropriate by the Authority, such as e-mail blasts, the Authority website and/or BMR database, and/or mailers to community service providers, and/or lenders. iii. Manage applicants for BMR unit ownership by: 1. Determining applicant eligibility pursuant to criteria established in cooperation with Jurisdiction. 2. Operating a computer-generated lottery system to establish a numerical list of eligible households for the available BMR unit. This numerical list is used to establish the priority order of the potential buyers. 3. Preparing and mailing notices for house tours to the topmost households from the numerical lottery list. 4. Verifying applicants' attendance at the open house and established interest in the available BMR unit. Removing households that are not interested in the available BMR unit from the numerical list. 5. Working with lenders on pre-approvals for topmost households on the list of eligible and interested buyers. iv. Maintain an up to date list of approved mortgage providers on Marin Housing Authority website. Provide lender training, BMR program documents and requirements to lending institution's underwriting department, and address questions from underwriters. v. Engage licensed real estate broker/agents to list, market, and complete the purchase and sale of BMR units in accordance with industry standards, while following the BMR Program requirements. vi. Subject to availability, provide assistance to BMR unit buyers with obtaining down payment assistance. Assistance programs may include, but are not limited to, the Mortgage Credit Certificate Program (MCC), CalHome and other programs available to eligible buyers within the Jurisdiction. BMR Memorandum of Understanding- MHA and Town of Tiburon Page 2 vii. Utilize the most current versions of the following documents and obtain all necessary signatures thereon, in connection with all BMR unit conveyances during the term of this Agreement: 1. Resale and Refinancing Restriction Agreement and Option to Purchase 2. Buyer's Disclosure Statement— Marin County Below Market Rate Home Ownership Program 3. Authority Deed of Trust and Security Agreement securing the Resale and Refinancing Restriction Agreement and Option to Purchase viii. Record or cause to be recorded, as appropriate, the Resale and Refinancing Restriction Agreement and Option to Purchase, the Authority Deed of Trust and Security Agreement Securing the Resale and Refinance Restriction Agreement, and a Request for Copy of Default Notice as appropriate. ix. Calculate resale price evaluations for existing BMR units for purposes of resale or refinance. x. Provide ongoing assistance to BMR owners with issues such as capital improvements, special assessments, etc. xi. Process requests from BMR owners to address life changes such as adding or removing parties from title, inheritance issues, etc. xii. When a BMR unit owner notifies Authority of owner's intention to sell their unit; request from such owner information regarding repairs or upgrades completed to that owner's BMR unit conduct an inspection of the unit to assess the work that will be required to resell the unit to another first time homebuyer and, if appropriate, adjust the sales price for such owner's BMR unit. C. BMR PROGRAM MONITORING SERVICES. i. Authority shall perform annual monitoring of no less than one-third of Jurisdiction's existing BMR units to attempt to verify compliance with the Resale Restrictions Agreement such as continuing owner occupancy, no subleasing, no refinancing without approval, no over-encumbrances etc. ii. MHA shall provide annual status reports to Jurisdiction on BMR sales activity, refinancing activity, monitoring results, and other related information that is reasonably requested by the Jurisdiction (e.g., current affordability levels, issues and concerns, etc.). BMR Memorandum of Understanding- MHA and Town of Tiburon Page 3 D. INFORMATION AND EDUCATION. i. Upon request, Authority shall provide Jurisdiction, BMR Program participants and lenders with information concerning procedures and/or restrictions regarding BMR unit conveyance refinancing, and determination of affordability levels and capital improvements. ii. Authority shall provide, or cause to be provided, HUD approved first time homebuyers' education. The HUD approved curriculum includes budgeting, financial preparedness, credit, qualifying for a loan, loan types and terms, refinancing, fair housing laws, and homeowners associations. iii. Authority shall provide Median Household Income information to Jurisdiction and prospective developers, and provide relevant information concerning Income Limits and Median Income, the relationship between those factors, and how those factors typically are used to determine affordability. E. PROGRAM MANAGEMENT SERVICES FEE Jurisdiction shall pay Authority $675.00 per BMR unit, annually, for each BMR Unit that is in the BMR Program, which shall be due to Authority on or before July 1 of each year during the term of this Agreement, commencing on July 1, 2019 and increased each anniversary date thereafter by 2.0%. As of the effective date of this Agreement, the BMR Program in the Town of Tiburon is comprised of Sixteen (16) Units. Accordingly, Jurisdiction shall pay to Authority TEN THOUSAND EIGHT HUNDRED DOLLARS ($10,800.00) for the initial 12 months of this Agreement for services rendered through June 30, 2020. The total number of BMR Units will be increased or decreased over time. The Authority will include new units during the Fiscal Year in which an eligible buyer is in contract to purchase a BMR unit. The Authority will remove units from the BMR program during the Fiscal Year in which the affordability restrictions have expired or a BMR unit is removed from the BMR program. These changes will adjust the total annual payment that Jurisdiction is obligated to pay to the Authority. BMR Memorandum of Understanding- MHA and Town of Tiburon Page 4 II. SALE AND RESALE OF EXISTING BMR UNITS A. BELOW MARKET VALUE RESALE When a BMR unit owner wishes to sell their BMR unit, Jurisdiction may elect to retain such BMR unit within the BMR Program but to increase the sales price of such BMR unit for the subsequent purchaser of that BMR unit provided the increased sales price remains affordable to the unit's designated income level. If Jurisdiction desires to increase the resale price of a BMR unit pursuant to the immediately foregoing sentence, Jurisdiction must provide written notice to Authority within 10 days of receiving notice from Authority that a BMR unit will become available for resale. B. MARKET VALUE SALE Jurisdiction may elect to release a BMR unit from the BMR Program and its affordability and resale restrictions by directing the Authority in writing to resell a BMR unit at its market value ("Market Value Sale"). If Jurisdiction desires for a Market Value Sale to occur, Jurisdiction must provide written notice to Authority within 10 days of receiving notice from Authority that a BMR unit will become available for sale. C. PROCEEDS FROM MARKET VALUE SALE After Authority's consummation of a sale pursuant to Section II (A) and II (B) above, Authority shall retain the difference between the actual sale price of the BMR unit subject to such sale, less (1) brokerage fees and all reasonable and customary closing fees, (2) satisfaction of all valid liens that the BMR unit is subject to if such lien(s) were permitted by relevant agreements with Authority and/or Jurisdiction governing such BMR unit, (3) such amount as BMR unit owner is entitled to receive at the close of a sale of their BMR unit pursuant to such owner's recorded resale restriction agreement(s) with Authority and/or Jurisdiction that govern the sale of their BMR unit, and (4) any funds that Jurisdiction owes to Authority pursuant to this Agreement. Funds remaining after satisfaction of Section II. (C) above shall be maintained in an account for the benefit of the Jurisdiction ("Jurisdiction Account"). III. AUTHORITY'S MANAGEMENT OF JURISDICTION ACCOUNT Upon approval by the Jurisdiction, this account may be used by the Authority for the benefit of the Jurisdiction BMR program including, but not limited to; the payment of legal fees, the acquisition of BMR units, payment of the Authority's annual fee, reduction in affordability levels of BMR units, and/or capital improvements to BMR units prior to resale. BMR Memorandum of Understanding- MHA and Town of Tiburon Page 5 IV. BROKERAGE FEES Up to 4 % of the total sales price of each BMR unit will be payable to a broker/agent and to the Authority (`brokerage fee"). The precise distribution of the brokerage fee will be dependent on whether there is dual representation of the BMR unit buyer and seller by an agent/broker. When a buyer is found from among the list of existing BMR applicants in the lottery drawn by the Authority, the Authority shall retain I% of the brokerage fee. V. ENFORCEMENT SPECIALIST SERVICES. A. OPTION EVENTS Should the Authority identify BMR Program violations by any BMR unit owners ("Option Events"), the Authority shall promptly notify the Jurisdiction and, upon Jurisdiction's request, the Authority shall contact such BMR unit owner and demand correction of their violation(s). The Authority, with consent of the Jurisdiction, will attempt to enforce the BMR Resale Restrictions Agreement to secure and preserve the BMR unit for the Jurisdiction and enforce compliance with the BMR Program, or as otherwise directed by the Jurisdiction with respect to each such BMR unit. The services performed by Authority pursuant to this sub-section V. (A) shall be referred to as "Enforcement Services." B. FEE TO AUTHORITY FOR ENFORCEMENT SERVICES Enforcement Services will be provided on a case-by-case basis only upon Jurisdiction's written consent pursuant to sub-section V. (A), immediately above. Enforcement Services will be provided by an employee of the Authority, and the Authority will charge Jurisdiction $95 per hour if the Enforcement Services are performed by a non-attorney and $145 per hour if the Enforcement Services are performed by an employee of the Authority that is an attorney. Charges for Enforcement Services will be at 1/a hour increments, at a maximum limit of$1,900 per BMR unit. The Authority will submit detailed monthly billings to Jurisdiction reflecting the Enforcement Services performed. Payment is due on all billings net 30 days from the date Jurisdiction receives the invoice. No fees shall be billed to Jurisdiction in excess of the above maximum without Jurisdiction's prior written approval. Compensation for Enforcement Services will be in addition to the compensation provided to Authority under other provisions of this Agreement. BMR Memorandum of Understanding- MHA and Town of Tiburon Page 6 VI. BMR PROGRAM DISPUTES. A. LEGAL SERVICES IN THE EVENT OF BMR DEFAULT OPTION EVENTS. BMR units may be subject to legal disputes, and retaining outside legal counsel to perform services relating to certain BMR units may become appropriate (with respect to each such BMR unit, a "Dispute"). The Authority will notify Jurisdiction within a reasonable period of time within which Authority learns of a Dispute. In the event Authority notifies Jurisdiction of a Dispute, the Authority may, with Jurisdiction's prior written consent, retain outside legal counsel of Authority's choosing to represent the Authority with respect to each Dispute. The Authority will manage and provide instruction to outside legal counsel, keep Jurisdiction reasonably informed and forward legal counsel's advice to Jurisdiction concerning each Dispute. Any time expended by Authority employees regarding a Dispute shall also constitute Enforcement Services and will be billed pursuant to Section V. (B), above. B. FEE TO AUTHORITY TO REIMBURSE 3RD PARTY LEGAL SERVICES. The Authority will provide Enforcement Services with respect to each Dispute until the Dispute is resolved. Upon attorneys' fees and costs incurred for a Dispute reaching $5,000 (to be billed on an hourly basis pursuant to standard industry practices, with detailed billings to be provided to Jurisdiction), the Jurisdiction will be briefed on the recommended course of action provided by legal counsel and the Jurisdiction shall provide general direction to Authority with respect to each Dispute. C. EXERCISE OF OPTION TO PURCHASE PURSUANT TO RESALE RESTRICTION AGREEMENT i. Notice of Option In the event the Authority identifies an Option Event, and option to purchase a BMR Unit may be exercised, the Authority shall: 1. Notify Jurisdiction in writing within five (5) working days of Authority learning that an option to purchase may be exercised with respect to a BMR unit (the "Notice"). 2. The Notice shall include the option-triggering event, the anticipated resale price, and any other information that may be available to Authority that will assist Jurisdiction in deciding on a course of action. BMR Memorandum of Understanding- MHA and Town of Tiburon Page 7 3. Within ten (10) working days of receipt of the Notice, Jurisdiction shall provide written instructions to the Authority directing the Authority to (1) exercise the Option, (2) assign to Jurisdiction the right to exercise the Option to purchase the BMR unit with Jurisdiction assuming responsibility to enforce the Resale Restriction Agreement and Deed of Trust and Security Agreement, or (3) file a Notice of Abandonment. ii. Exercise of Option If the Jurisdiction requests that the Authority exercise the Option, the Authority shall: 1. Utilize funds provided by the Jurisdiction; or 2. Utilize Authority's line of credit if Authority determines it would not interfere with Authority's operations. The Authority shall be reimbursed by Jurisdiction such amount that Authority contributes toward the exercise of an option. This reimbursement shall occur immediately upon re-sale of the BMR unit subject to such option or 90 days from the Authority's exercise of the Option, whichever occurs earlier. VII. JURISDICTION RESPONSIBILITIES Jurisdiction shall: i. Execute and, if appropriate, record documents that are appropriate or necessary for the operation of the BMR Program and performance of this Agreement and transactions contemplated hereby. ii. Provide conditions of approval for each new development that includes affordable units to be managed by MHA and execute the three-party (among Authority, Jurisdiction, and a developer/contractor)Affordable Housing Agreement. iii. Notify the Authority of any changes to local code requirements or policies that impact the Jurisdiction's BMR program, affordable housing program, or the terms of this MOU. iv. Communicate with Authority, including, but not limited to, meeting with Authority on an annual basis to review the asset management portfolio and the services. BMR Memorandum of Understanding- MHA and Town of Tiburon Page 8 V. Assess and pay fees due to Authority as required by this Agreement. The invoiced fees and related expenses shall be paid by Jurisdiction within thirty (30) days of Authority's submission of billings. Jurisdiction further agrees to assume and be solely responsible for all and any payment for legal services performed on Jurisdiction's and Authority's behalf per this Agreement. Vi. Provide, or cause to be provided, access by Authority to any and all Jurisdiction information and documentation necessary for the Authority to perform pursuant to this Agreement, including but not limited to, documents recorded by Jurisdiction. vii. Jurisdiction hereby agrees to defend, indemnify and hold harmless Authority and its employees, commissioners, and representatives (each an "Indemnified Party") from and against any and all damages, injuries, claims, liability and expense, whatsoever, including attorneys' fees, costs, and related disbursements (collectively, "Damages"), incurred by reason of a BMR unit, the BMR Program, or this Agreement, except such Damages caused by the willful misconduct of Authority. This sub-section VII. (vi) shall survive termination of this Agreement. VIII. BMR RENTAL PROGRAM MONITORING If requested by Jurisdiction, the Authority may provide monitoring services for the Jurisdiction's BMR rental units for an additional fee. Monitoring services include review of Tenant Income Certifications and Certificates of Continuing Compliance provided by a property management company. The Authority will provide these services upon Jurisdiction's written request to provide rental monitoring services and Authority's written acceptance of Jurisdiction's request. In connection with these monitoring services, the Authority has the capaTownand expertise to recalculate a schedule of maximum allowable BMR rents each time HUD publishes a revised Area Median Income. Utility allowances would also be revised at the same time based on the current Section 8 Housing Assistance Payment Program schedule of utility allowances determined by the Authority. The Authority will charge a fee for the performance of rental monitoring, which can be paid directly to the Authority by the Jurisdiction or by the property owner and /or property Management Company, as determined by the jurisdiction. IX. TERM OF AGREEMENT Regardless of the term of the BMR Resale Restrictions recorded with Jurisdiction's BMR Units, the term of this Agreement shall be for four (4) years from the date of this Agreement (2019-2023), and will automatically renew for an additional two (2) year term, to 2025, unless either party notifies the other in writing of its intention to terminate this Agreement at least 120 days prior to the expiration of the initial term or any renewal term. BMR Memorandum of Understanding- MHA and Town of Tiburon Page 9 X. MISCELLANEOUS A. ADDITIONAL REQUIREMENTS ON AUTHORITY Additional Jurisdictional requirements such as insurance, etc. are contained in Exhibit A attached hereto. B. INTEGRATION CLAUSE This Agreement constitutes the entire agreement between the parties to this Agreement with respect to the subject matter of this Agreement, and there are no other terms, obligations, covenants, representations, statements, or conditions except as set forth in this Agreement. No change or amendment to this Agreement will be effective unless in writing and signed by the parties to this Agreement. Failure to insist upon strict compliance with any term or provision of this Agreement will not be deemed to be a waiver of any rights under a subsequent act or failure to act. This Agreement specifically supersedes all prior agreements between the parties. C. CONSTRUCTION The parties to this Agreement have been represented by counsel in the negotiation and preparation of this Agreement and this Agreement will be construed according to its fair language. The rule of construction to the effect that ambiguities are to be resolved against the drafting party will not be employed in interpreting this Agreement. D. COUNTERPART ORIGINALS This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement. Facsimile or PDF copies of signed signature pages shall be binding originals. E. SEVERABILITY In the event that for any reason one or more of the provisions of this Agreement or its or their application to any person or circumstance is held to be invalid, illegal, or unenforceable in any respect or to any extent, such provisions will, nevertheless, remain valid, legal, and enforceable in all other respects and to such extent as may be permissible, and, in addition, any such invalidity, illegality, or unenforceability will not affect any other provision hereof, but this Agreement will be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. BMR Memorandum of Understanding- MHA and Town of Tiburon Page 10 F. NOTICES Any notice or communication required or permitted under this Agreement must be sent by e-mail (provided delivery is confirmed) or U.S. Mail (certified only) return receipt requested pursuant to the addresses set forth immediately below, or at such other addresses as shall be designated in writing by either party to the other in accordance with this Section. Such notice will be deemed to be given when received. Authority: Housing Authority of the County of Marin Attention: Executive Director 4020 Civic Center Drive San Rafael, CA 94903-4173 Jurisdiction: Town of Tiburon Attention: Town Manager 1505 Tiburon Blvd. Tiburon, CA 94920 G. EXHIBITS The following exhibits are attached to this Agreement: Exhibit A: Additional Jurisdictional requirements on Authority Exhibit B: List of BMR developments in Jurisdiction and number of BMR units in each development. BMR Memorandum of Understanding- MHA and Town of Tiburon Page 11 IN WITNESS WHEREOF, the Housing Authority of the County of Marin and the Town of Tiburon, have executed this Agreement as of the date first written above. The undersigned represent and warrant that he/ she has full power and authority to enter into this Agreement and to bind each other in accordance with its terms. For the Town of Tiburon: 11�11141'11, Greg Cha4/, Town Manager D TE Approved as to Town k torney DATE For the Housing Authority-of the County of Marin: Lewis Jordan, Executive Director -,.LL. DATE OF AGREEMENT=================== BMR Memorandum of Understanding- MHA and Town of Tiburon Page 12