HomeMy WebLinkAbout2026-024 PA 2024-15 (Dexter Village) RDR 2024-07 & Density Bonus AgreementRESOLUTION NO. 2026-24
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, APPROVING RESIDENTIAL DESIGN REVIEW NO. 2024-07 AND
DENSITY BONUS AGREEMENTS, PROVIDING BUILDING DESIGNS AND
RELATED IMPROVEMENTS FOR 230 APARTMENT UNITS, 137 SINGLE-
FAMILY DWELLING UNITS, 84 TOWNHOMES, AND THREE AMENITY
BUILDINGS FOR THE DEXTER VILLAGE PROJECT LOCATED ON DEXTER
AVENUE BETWEEN 2ND AND 3RD STREETS (APN: 377-090-013, 377-090-
037, 377-090-039, AND 377-090-040)
Whereas, James Walters, Fairbrook Communities LLC, has filed an application with the
City of Lake Elsinore (City) requesting approval of Planning Application No. 2024-15 for a 451-
unit residential development with 137 single-family homes, 84 townhomes, and 230 apartment
units, including 22 affordable units, on an existing vacant 23.05-acre site. The project’s requests
include Tentative Tract Map No. 38512 to subdivide the 23.05-acre project site into a 6.6-acre
parcel for the apartments, two lots totaling 3.8-acres for condominium purposes for the
townhomes, and 137 lots for the single-family homes; Conditional Use Permit No. 2024-08 to
allow the development of condominiums (townhomes) in in the Commercial Mixed Use (CMU)
zone; and, Residential Design Review No. 2024-07 for the proposed building designs and related
improvements including new parking, walls and fencing, and landscaping. The project is located
on Dexter Avenue between Second Street and Third Street (APN: 377-090-013, 377-090-037,
377-090-039, 377-090-040);
Whereas, Residential Design Review (RDR) No. 2024-07 proposes to construct 230
apartment units, 137 single-family dwelling units, 84 condominium/townhomes for a total of 451
dwelling units, with 1,078 (garage, driveway and open spaces) parking spaces, a 1,270 square
foot recreational building, a 5,577 square foot clubhouse building, and other related site
improvements including new parking, walls/fencing, and landscaping;
Whereas, pursuant to California Government Code Sections 65915 – 65918 and
Chapter 17.58 of the Lake Elsinore Municipal Code (LEMC), the project is proposing to provide
5% of very low-income affordable units, which equate to 22 units and would be distributed
evenly across four of the eight apartment buildings. Affordable unit sizes provided vary with 14
one-bedroom/one-bath units, six (6) two-bedroom/two-bath units, and four (4) three-
bedroom/two-bath units;
Whereas, pursuant to CEQA Guidelines Section 15063, the City conducted an Initial
Study to determine if the Project would have a significant effect on the environment. The Initial
Study revealed that the Project would have potentially significant environmental impacts, but
those potentially significant impacts could be mitigated to less than significant levels;
Whereas, based upon the results of the Initial Study (Environmental Review No. 2023-
02), and based upon the standards set forth in CEQA Guidelines Section 15070, it was
determined that it was appropriate to prepare and circulate a Mitigated Negative Declaration
(MND) for the project. In accordance with CEQA Guidelines Section 15073, the MND was made
available for public review and comment for a minimum of 30 days beginning on November 12,
2025, and ending at 5:00 p.m. on December 12, 2025;
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
CC Reso. No. 2026-24
Page 2 of 4
Whereas, on February 24, 2026, at a duly noticed Public Hearing, the City Council
(Council) by resolution adopted the MND (SCH No. 2025110457) for the Project and adopted a
Mitigation Monitoring and Reporting Program;
Whereas, pursuant to Section 17.415.050 (Major Design Review), Section 17.410.070
(Approving Authority), Section 14.58.060 (Density Bonus Implementation), and Section
17.410.030 (Multiple Applications) of the LEMC, the Planning Commission (Commission) has
been delegated with the responsibility of making recommendations to the City Council (Council)
pertaining to design review applications;
Whereas, on December 16, 2025, and subsequently on January 20, 2026, at duly noticed
Public Hearing, the Commission considered evidence presented by the Community Development
Department and other interested parties with respect to this item, and adopted a resolution
recommending that the Council Approve RDR No. 2024-07; and
Whereas, on February 24, 2026, at a duly noticed Public Hearing, the Council considered
the recommendation of the Commission as well as evidence presented by the Community
Development Department and other interested parties with respect to this item.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES
HEREBY RESOLVE, DETERMINE, AND ORDER AS FOLLOWS:
Section 1: The foregoing recitals are true and correct and are hereby incorporated into
these findings by this reference.
Section 2: The Council has reviewed and analyzed the proposed project pursuant to the
California Planning and Zoning Laws (Cal. Gov. Code §§ 59000 et seq.), the Lake Elsinore
General Plan (GP), and the LEMC and finds and determines that the proposed project is
consistent with the requirements of California Planning and Zoning Law and with the goals and
policies of the GP, and the LEMC.
Section 3: That in accordance with Section 17.415.050.G of the LEMC, the Council
makes the following findings regarding RDR No. 2024-07:
1. The Project, as approved, will comply with the goals and objectives of the General Plan,
Specific Plan, and the Zoning District in which the Project is located.
The proposed project is exempt from the General Plan land use designation objectives as
requested (Cal. Gov. Code §§ 65915 et seq.). More specifically, the project application is
eligible for unlimited waivers from the development code with the provision of 5% very low-
income dwelling units, or 22 on-site units. The applicant has requested waivers from the
land use designation, dwelling unit density, and other use-related provisions of the General
Plan. However, the proposal does support the Housing Element with the provision of
additional housing units that will aid the City in achieving the required Regional Housing
Needs Assessment (RHNA) units, particularly protected affordable units for very low-income
households. Although the proposed project deviates from some standards and regulations
in the City’s General Plan and Zoning Code, it remains compliant with State and Local laws
through the application of the Density Bonus Law.
2. The Project complies with the design directives contained in the LEMC and all applicable
provisions of the LEMC.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
CC Reso. No. 2026-24
Page 3 of 4
The Project is appropriate to the site and surrounding developments. The architectural
design of the proposed buildings complies with the Residential Development Standards
(Chapter 17.44) of the LEMC, unless otherwise requested through density bonus
concessions and waivers. Sufficient setbacks and enhanced on-site landscaping have been
provided, thereby creating interest and varying vistas as a person moves along abutting
streets. The Project will create a visually pleasing, non-detracting relationship between the
proposed development and existing projects through the use of various architectural styles,
including, but not limited to, French Country, Modern Farmhouse, and Santa Barbara, that
is cohesive with existing developments in the vicinity. In addition, safe and efficient
circulation has been achieved onsite.
3. Conditions and safeguards pursuant to Section 17.415.050.G.3 of the LEMC, including
guarantees and evidence of compliance with conditions, have been incorporated into the
approval of the subject project to ensure development of the property in accordance with
the objectives of this chapter and the planning district in which the site is located.
Pursuant to Section 17.415.050.E of the LEMC, the Project was considered by the Planning
Commission at a duly noticed Public Hearing on December 16, 2025 and January 20, 2026,
and subsequently by the City Council at a duly noticed Public Hearing held on February 24,
2026. The Project, as reviewed and conditioned by all applicable City divisions,
departments, and agencies, will not have a significant effect on the environment.
Section 4: Based upon all of the evidence presented, the above findings, and the
conditions of approval imposed upon the Project, the City Council approves RDR No. 2024-07.
Section 5: The City Council hereby approves the Density Bonus Housing Agreement
attached hereto as Exhibit A with such modifications as approved by the City Attorney. The City
Manager and City Clerk are hereby authorized and directed to execute and attest, respectively,
the Density Bonus Housing Agreement on behalf of the City of Lake Elsinore.
Section 6: This Resolution shall take effect immediately upon its adoption.
Section 7: The City Clerk shall certify to the adoption of this Resolution and enter it into
the book of original Resolutions.
Passed and Adopted at a regular meeting of the City Council of the City of Lake Elsinore,
California, this 24th day of February 2026.
Robert E. Magee
Mayor
Attest:
Candice Alvarez, MMC
City Clerk
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
CC Reso. No. 2026-24
Page 4 of 4
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF LAKE ELSINORE )
I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify that
Resolution No. 2026-24 as adopted by the City Council of the City of Lake Elsinore, California, at
the Regular meeting of February 24, 2026 and that the same was adopted by the following vote:
AYES: Council Members Tisdale, and Carroll; Mayor Pro Tem Sheridan; and Mayor Magee
NOES: None
ABSENT: Council Member Manos
ABSTAIN: None
Candice Alvarez, MMC
City Clerk
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Lake Elsinore
130 S. Main Street
Lake Elsinore, CA 92530
Attn: City Clerk
Project: Dexter Village Apartments
(Space Above For Recorder’s Use)
This Density Bonus Housing Agreement is
recorded at the request and for the benefit of
the City of Lake Elsinore and is exempt from
the payment of a recording fee pursuant to
Government Code Sections 6103 and 27383.
DENSITY BONUS HOUSING AGREEMENT
DEXTER VILLAGE
By and Between
CITY OF LAKE ELSINORE,
a California municipal corporation
and
3RD & DEXTER, LLC,
a Delaware limited liability company
[THIS AGREEMENT CONTAINS SUBORDINATION REQUIREMENTS
TO PRESERVE PRIORITY OF LAND USE AND REGULATORY COVENANTS]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx i
TABLE OF CONTENTS
Page
1. DEFINITIONS AND EXHIBITS ..................................................................................... 2
1.1 Definitions............................................................................................................. 2
1.2 Exhibits ................................................................................................................. 8
2. DEVELOPMENT OF THE PROPERTY ......................................................................... 8
2.1 Project ................................................................................................................... 8
2.2 Total Number of Units .......................................................................................... 8
2.3 Market Rate Units ................................................................................................. 9
2.4 Affordable Units ................................................................................................... 9
2.5 Minimum Development Standards For Affordable Units ..................................... 9
2.6 Authorized Incentives and Concessions ............................................................... 9
2.7 Compliance with Laws ......................................................................................... 9
2.8 Mechanic’s Liens; Indemnification ...................................................................... 9
3. AFFORDABILITY ......................................................................................................... 10
3.1 Terms .................................................................................................................. 10
3.2 Carryover of Total Affordability Term ............................................................... 10
3.3 Memorializing Commencement of Total Affordability Term ............................ 10
4. OWNERSHIP AND OPERATION OF THE PROJECT BY OWNER ......................... 11
4.1 Recording of Documents .................................................................................... 11
4.2 Rental of Units .................................................................................................... 11
4.3 Leasing Forms and Marketing Plan .................................................................... 11
4.4 Income Verification ............................................................................................ 12
4.5 Location of Affordable Units .............................................................................. 12
5. SALE OF UNITS TO INDIVIDUAL OWNERS ........................................................... 12
5.1 Conveyance of Units ........................................................................................... 12
5.2 Notice to City ...................................................................................................... 12
5.3 Designation of For Sale Affordable Units .......................................................... 12
5.4 Sale of Affordable Units ..................................................................................... 12
5.5 Unit Release from Regulatory Agreement and Density Bonus
Agreement ........................................................................................................... 15
5.6 Right of First Refusal for Existing Tenants of Affordable Units ........................ 16
5.7 Sale of Units; Indemnification ............................................................................ 17
5.8 Qualified Purchaser Marketing and Orientation ................................................. 17
6. TERM OF THIS AGREEMENT .................................................................................... 18
6.1 Term .................................................................................................................... 18
7. DEFAULT AND TERMINATION; INDEMNIFICATION .......................................... 18
7.1 Default................................................................................................................. 18
7.2 Rights and Remedies Cumulative ....................................................................... 19
7.3 Indemnification ................................................................................................... 19
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx ii
Page
8. ASSIGNMENT .............................................................................................................. 19
8.1 Assignment By Owner ....................................................................................... 19
8.2 Assignment by City ............................................................................................ 21
8.3 Covenants Run with the Land ............................................................................ 21
9. MISCELLANEOUS ...................................................................................................... 22
9.1 Notices ............................................................................................................... 22
9.2 Entire Agreement ............................................................................................... 23
9.3 Amendments ...................................................................................................... 23
9.4 Severability ........................................................................................................ 23
9.5 Interpretation and Governing Law ..................................................................... 23
9.6 Section Headings ............................................................................................... 23
9.7 Singular and Plural ............................................................................................. 23
9.8 Joint and Several Obligations............................................................................. 23
9.9 Time of Essence ................................................................................................. 23
9.10 Days ................................................................................................................... 24
9.11 Waiver ................................................................................................................ 24
9.12 Force Majeure .................................................................................................... 24
9.13 Mutual Covenants .............................................................................................. 24
9.14 Successors in Interest ......................................................................................... 24
9.15 Jurisdiction and Venue ....................................................................................... 24
9.16 Project as a Private Undertaking ........................................................................ 24
9.17 Further Actions and Instruments; Administration of Agreement ....................... 25
9.18 Estoppel Certificate ............................................................................................ 25
9.19 Subordination ..................................................................................................... 25
9.20 Attorneys’ Fees and Costs.................................................................................. 26
9.21 Authority to Execute .......................................................................................... 26
9.22 Counterparts ....................................................................................................... 26
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 1
DENSITY BONUS HOUSING AGREEMENT
DEXTER VILLAGE
This DENSITY BONUS HOUSING AGREEMENT (Dexter Village) (“Agreement”) is
entered into as of the day of , 2025 by and between the CITY OF
LAKE ELSINORE, a California municipal corporation (“City”), and 3RD & DEXTER, LLC, a
Delaware limited liability company (“Owner”). City and Owner are hereinafter sometimes
referred to collectively as the “Parties” and individually as a “Party.”
RECITALS
A. Owner is the owner in fee of that certain real property located on Dexter Avenue
between 2nd Street and 3rd Street, consisting of approximately 23.44 acres of land, and more
particularly described in the legal description attached hereto as Exhibit “A” and more particularly
depicted in Exhibit “B,” both of which are incorporated herein by this reference (the “Property”).
B. Owner has submitted plans to develop on the Property a four hundred fifty-one (451)
unit residential development, consisting of two hundred thirty (230) rental apartment units, eighty-
four (84) condominium units, and one hundred thirty-seven (137) single family units (collectively,
the “Project”). Owner intends to build the Project in two or more phases.
C. Pursuant to California Government Code Sections 65915-65918 and the
implementing ordinance in Chapter 17.58 of the City of Lake Elsinore Municipal Code, owners of
projects that include specified levels of affordable housing are entitled to apply for and receive
certain density bonuses and additional incentives in order to facilitate the economic feasibility of
those projects.
D. The General Plan designation for the Property is Commercial Mixed-Use GP. The
project’s “master case number” is PA 2024-15, and other Project entitlements include CUP 2024-
08 for the townhome/condominium units included, RDR 2024-07 for design review of the
residential building, and TTM 2024-05 for the proposed subdivision of the Property (collectively,
the “Entitlements”).
E. Based on the zoning for the Property, the number of base units permitted is four
hundred twenty-two (422) residential units. Owner has proposed constructing twenty-two (22)
affordable units in the Project (i.e., 5% of the Base Units), which would entitle Owner
to exercise a twenty percent (20%) density bonus option for the Project, resulting in up to eighty-
five (85) density bonus units. Notwithstanding the foregoing, Owner has proposed constructing
four hundred twenty-two (422) base residential units and up to twenty-nine (29) density bonus
residential units, for a total of four hundred fifty-one (451) residential units.
F. In order to take advantage of the increase in allowable density, Owner must ensure,
pursuant to the terms of this Agreement, that no less than twenty-two (22) residential units (i.e.,
5% of the Base Units) will be used and occupied or available for use and occupancy by Very-Low
Income Households (as defined below).
G. City has agreed to grant an incentive, as required by Government Code Sections
65915- 65918, by allowing the Project to be exempt from the requirements of subsection C of Lake
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 2
Elsinore Municipal Code Section 17.134.080. Additionally, City has agreed to certain waivers
requested by Owner, as required by applicable law.
H. Attached hereto as Exhibit “F” is a regulatory agreement for the provision of
affordable housing at the Project (“Regulatory Agreement”).
I. The Regulatory Agreement and this Agreement constitute the affordable housing
plan with respect to the Affordable Units (as defined below) being provided for the Project and
satisfy the affordable housing plan requirements of Chapter 17.58 of the City of Lake Elsinore
Zoning Ordinance.
J. City has prepared and Initial Study/Mitigated Negative Declaration for the Project,
and complied with the procedures set forth in the California Environmental Quality Act (Public
Resources Code Section 21000 et seq.) and the State CEQA Guidelines by the environmental
review of the Project [(__________________Final Environmental Impact Report and Addendum
(State Clearinghouse No. __________________)].
K. This Agreement (which includes by this incorporation by reference the attached
Exhibits) is intended to set forth the terms and conditions for the implementation of the Project’s
requirement to provide affordable housing units in exchange for receiving the density bonus units
and incentive set forth herein.
L. It is a condition to the approval of the Entitlements that Owner enter into and duly
record this Agreement and the Regulatory Agreement in the Official Records of the Riverside
County Recorder's Office ("Official Records") with respect to and containing affordable housing
agreements, covenants, conditions, and restrictions intended to be binding on Owner and the
Property and Project.
M. The development of the Project on the Property pursuant to this Agreement, and the
fulfillment generally of this Agreement, are in the vital and best interests of City and the welfare
of its residents, and in accordance with the public purposes and provisions of applicable federal,
state, and local laws and requirements.
COVENANTS
NOW, THEREFORE, in consideration of the Entitlements and of the mutual covenants
hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:
1. DEFINITIONS AND EXHIBITS
1.1 Definitions. In addition to the terms that may be defined elsewhere in this
Agreement, the following terms when used in this Agreement shall be defined as follows:
1.1.1 “Adjusted for household size appropriate to the unit” means a
household of one person in the case of a studio unit, a household of two persons in the case of a one-
bedroom unit, a household of three persons in the case of a two- bedroom unit, and a household of
four persons in the case of a three-bedroom unit.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 3
1.1.2 “Affordable Housing Plan” means, collectively, this Agreement
and the Regulatory Agreement attached hereto as Exhibit “F”.
1.1.3 “Affordable Rent” means for a Very-Low Income Household the
maximum Monthly Rent that does not exceed the amount of rent (including a reasonable utility
allowance) for a Very-Low Income Household authorized pursuant to Health and Safety Code
Section 50053 as such statute exists on the Effective Date, a copy of which is attached hereto and
incorporated herein as Exhibit “C”, which statute as of the Effective Date states that the maximum
Monthly Rent is equal to the product of thirty percent (30%) times fifty percent (50%) of Median
Income, adjusted for household size appropriate to the unit. An example of the calculation of
Affordable Rent is attached hereto and incorporated herein as Exhibit “D”.
1.1.4 “Affordable Units” means the twenty-two (22) Rental Units within
the Project to be rented by Owner to a Very-Low Income Household at Affordable Rent in
accordance with this Agreement. In accordance with the requirements of the Regulatory
Agreement, the Affordable Units are anticipated to be comprised of the following:
Unit Type
Very-Low
Income Units
1 Bedroom
14
2 Bedroom 6
3 Bedroom 2
Total
22
From time to time, Owner may modify the actual bedroom mix of
Affordable Units without amending this Agreement so long as Owner complies with the bedroom
mix requirements more fully set forth in the Regulatory Agreement.
1.1.5 “Agreement” means this Density Bonus Housing Agreement and all
of the exhibits attached hereto.
1.1.6 “Base Units” means the four hundred twenty-two (422) Units
(subject to adjustment pursuant to Section 2.3 below) that Owner would be authorized to develop
on the Property pursuant to the Project zoning without application of the State Density Bonus Law
(as defined below).
1.1.7 “City” means the City of Lake Elsinore, California, and the City’s
successors and assigns.
1.1.8 “City Council” means the City Council of the City of Lake Elsinore.
1.1.9 “City Attorney” means the City Attorney for the City of Lake
Elsinore.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 4
1.1.10 “City Manager” means the City Manager for the City of Lake
Elsinore or designee.
1.1.11 “City’s Planning Commission” means the Planning Commission
for the City of Lake Elsinore.
1.1.12 “Density Bonus Units” means the twenty-nine (29) Units, in
addition to the Base Units, that Owner may develop pursuant to the density allowance in the State
Density Bonus Law and the terms and conditions of this Agreement, which Owner would not be
entitled to develop without providing that twenty-two (22) of the Base Units (i.e., 5% of the Base
Units) will be Affordable Units designated for occupancy by Very-Low Income Households.
1.1.13 “Effective Date” means the date this Agreement is signed by the
City Manager, which date shall be inserted in the preamble to this Agreement.
1.1.14 “Eligible Tenant” means a Household who complies with the
income verification requirements of the Regulatory Agreement and qualifies as a Very- Low
Income Household as defined therein.
1.1.15 “Household” means all persons residing in a Unit.
1.1.16 “Housing Regulations” means the regulations published from time
to time by the California Department of Housing and Community Development pursuant to Health
and Safety Code Section 50093, as they exist as of the Effective Date, a copy of which is attached
hereto and incorporated herein as Exhibit “C”.
1.1.17 “Median Income” means the Riverside County area median income
as published periodically by the California Department of Housing and Community Development in
Section 6932 of Title 25 of the California Code of Regulations, or successor regulation based on
the median housing income as annually established by the United States Department of Housing
and Urban Development. The Median Income figures for 2025, as of the Effective Date, are set
forth in Exhibit “E”, which is attached hereto and incorporated herein by this reference. Upon
request by Owner, City shall provide to Owner the amount of the Median Income.
1.1.18 “Monthly Rent” means the total of monthly payments for (a) use
and occupancy of each Affordable Unit and land and facilities associated therewith, (b) any
separately charged fees or service charges assessed by Owner which are required of all tenants
(including mandatory renters insurance, if applicable), other than security deposits, (c) a
reasonable allowance for an adequate level of service of utilities not included in (a) or (b) above,
including garbage collection, sewer, water, electricity, gas, air conditioning and other heating,
cooking and refrigeration fuels, if such utilities are paid for separately by the tenant and which
allowance shall be based on the schedules determined by the Housing Authority of the County of
Riverside; but not including telephone, internet or cable service, and (d) possessory interest, taxes
or other fees or charges assessed for use of the land and facilities associated therewith by a public
or private entity other than Owner. In the event that all utility charges are paid by the landlord rather
than the tenant, no utility allowance shall be deducted from the rent.
1.1.19 “Owner” means 3rd & Dexter, LLC, a Delaware limited liability
company, and its permitted successors and assigns to all or any part of the Property.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 5
1.1.20 “Owner Affiliate” shall mean any person or entity controlling,
controlled by, or under common control with either such entity.
1.1.21 “Project” shall have the meaning ascribed in Recital B of this
Agreement. In the event of any inconsistency between the description of the Project in this
Agreement and the entitlements and permits for the Project, the approved entitlements and permits
shall govern. In no event shall any development be permitted that is not permitted under the
entitlements and permits in effect at the time of development.
1.1.22 “Property” shall have the meaning ascribed in Recital A of this
Agreement.
1.1.23 “Rental Unit” means a residential dwelling unit within the Project
to be rented by Owner pursuant to this Agreement, including, without limitation, the Affordable
Units.
1.1.24 “Regulatory Agreement” means that certain Regulatory Agreement
and Declaration of Covenants and Restrictions attached to this Agreement as Exhibit “F”. In the event of any
inconsistency between the terms of the Regulatory Agreement and the terms of this Agreement, the terms of
the Regulatory Agreement shall govern.
1.1.25 “State Density Bonus Law” means Government Code Sections
65915-65918 as they exist on the Effective Date.
1.1.26 “Substitute Affordable Unit” means an equivalent Unit in terms of
level of affordability restriction (Very-Low Income Household) and number of bedrooms for a
previously designated Affordable Unit, substituted during the Total Density Bonus Agreement
Term and further explained in the Regulatory Agreement.
1.1.27 “Total Affordability Term” means the fifty-five (55) year period
for which Affordable Units shall be restricted for use and occupancy by a Very-Low Income
Household. The Total Affordability Term shall commence on the date on which the last of the
Affordable Units receives a certificate of occupancy issued by the City.
1.1.28 “Total Density Bonus Agreement Term” means the total period
during which this Agreement shall be in full force and effect, as provided for in Section 5 below.
1.1.29 “Unit” means a residential dwelling unit within the Project.
1.1.30 “Very-Low Income Household” means a Household whose
income does not exceed the qualifying limits for very-low income households pursuant to Health
and Safety Code Section 50105 as it exists on the Effective Date, a copy of which is attached
hereto and incorporated herein as Exhibit “C”, which statute as of the Effective Date states that the
qualifying limits (as adjusted for household size) shall be published by the Department of Housing
and Community Development in the California Code of Regulations as soon as possible after
adoption by the Secretary of Housing and Urban Development.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 6
1.2 Exhibits. The following documents are attached to, and by this reference
made a part of, this Agreement:
Exhibit “A” Legal Description of the Property Exhibit
Exhibit “B” Map showing Property and its Location
Exhibit “C” Health and Safety Code Sections 50052.5,
50053, 50105, and 50093
Exhibit “D” Example of Affordable Rent Calculation
Exhibit “E” Median Income for 2023
Exhibit “F” Regulatory Agreement (and Attachments)
Exhibit “G” Termination and Release
1.3 Recitals. The Recitals set forth above are true and correct and incorporated
herein by this reference.
2. DEVELOPMENT OF THE PROPERTY
2.1 Project. The Property may be developed as a four hundred fifty-one (451)
unit residential community in accordance with and subject to all applicable entitlements and
permits. Nothing herein shall be construed to require Owner to proceed with the construction or
other implementation of the Project.
2.2 Total Number of Units. The Project may have up to four hundred fifty-one
(451) Units, to be developed and maintained pursuant to the terms and conditions of this
Agreement. The Project’s Units consist of up to four hundred twenty-two (422) Base Units and up
to twenty-nine (29) Density Bonus Units, for a total of up to four hundred fifty-one (451) Units.
The Parties expressly understand and agree that the State Density Bonus Law as of the Effective
Date allows up to a twenty percent (20%) increase in the number of the Base Units because Owner
shall restrict five percent (5%) of the Base Units for occupancy by Very-Low Income Households.
2.3 Affordable Units. The Affordable units shall be provided within the
development of the Rental Units, and shall be dispersed throughout that phase. Based on the
number of Units allowed on the Property pursuant to Section 2.2 above, the Project shall have
twenty-two (22) Affordable Units (i.e., 5% of the Base Units) designated for Very-Low Income
Households pursuant to the terms and conditions of this Agreement, which shall be included in the
two hundred thirty (230) Rental Units. The twenty-two (22) Affordable Units shall consist of
fourteen (14) one-bedroom Rental Units, six (6) two-bedroom Rental Units, and two (2) three-
bedroom Rental Units The average square footage of the Affordable Units shall be approximately
the same (i.e., less than 7% deviation) as the average square footage of the other Rental Units of
the same number of bedrooms. Nothing herein shall preclude Owner from increasing the number
of Affordable Units, and Owner may include a larger proportion of Affordable Units with a higher
bedroom count as compared to the other Rental Units.
2.4 Authorized Incentives and Concessions. In accordance with the State
Density Bonus Law and pursuant to the entitlements for the Project approved by City, City
authorized the incentives and concessions set forth in Recital G above.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 7
3. AFFORDABILITY
3.1 Terms. Each Affordable Unit designated for Very-Low Income Households
shall be restricted for use and occupancy by a Very-Low Income Household for a total period of no
less than the Total Affordability Term. Owner may elect to substitute a Substitute Affordable Unit
for an Affordable Unit during the Total Affordability Term. In that event, the remaining portion
of the Total Affordability Term for the Affordable Unit shall be transferred to the Substitute
Affordable Unit.
4. OWNERSHIP AND OPERATION OF THE PROJECT BY OWNER
4.1 Recording of Documents. No later than ten (10) days after approval of the
Entitlements, Owner shall record or cause to be recorded in the Official Records for Riverside
County, California, an executed original of this Agreement and the Regulatory Agreement. Owner
shall provide City with conformed recorded copies of this Agreement and the Regulatory
Agreement not later than fifteen (15) days after approval of the Entitlements. City shall cooperate
with Owner in promptly executing in recordable form this Agreement and the Regulatory
Agreement. It is the express intent and agreement between the Parties that during the Total
Affordability Term, this Agreement and the Regulatory Agreement shall remain binding and
enforceable against the portion of the Property upon which the rental units are to be constructed,
the Project, and the Affordable Units to ensure compliance with the State Density Bonus Law and
Chapter 17.58 of the Lake Elsinore Municipal Code, and to ensure the continued supply of
Affordable Units in the Project.
4.2 Rental of Units. During the Total Affordability Term, Owner shall rent or
cause to be rented the Affordable Units in accordance with the terms and conditions set forth in
the Regulatory Agreement.
5. TERM OF THIS AGREEMENT
5.1 Term. The Total Density Bonus Agreement Term shall commence on the
Effective Date and unless terminated earlier, shall continue until the expiration of the Total
Affordability Term with respect to each Affordable Unit. Upon satisfaction of the foregoing, the
City shall, at the request of Owner, record a termination of the Regulatory Agreement and this
Agreement, in the form attached hereto as Exhibit “G”. The recording of such a termination
document shall remove the Regulatory Agreement and this Agreement as an encumbrance upon
title to the entire Property. Notwithstanding any other provision herein to the contrary, Owner’s
indemnity obligations under Section 6.3 hereof shall survive the termination of this Agreement for
a period of five (5) years from the date thereof with respect to any events that occurred prior to the
expiration of the Total Affordability Term.
5.2 Release of For-Sale Property from Regulatory Agreement and Density
Bonus Agreement. Following recordation of the Final Tract Map, City shall terminate and
reconvey this Agreement and the Regulatory Agreement as to the portion of the Property upon
which the for-sale units are to be constructed.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 8
6. DEFAULT; INDEMNIFICATION
6.1 Default. Failure or delay by any Party to perform any term or provision of
this Agreement which is not cured within thirty (30) days after receipt of notice from the other Party
specifying the default (or such other period specifically provided herein) constitutes a default under
this Agreement; provided, however, if such default is of the nature requiring more than thirty (30)
days to cure, the defaulting Party shall avoid default hereunder by commencing to cure within such
thirty (30) day period, and thereafter diligently pursuing such cure to completion within an
additional sixty (60) days following the conclusion of such thirty (30) day period (for a total of
ninety (90) days). Except as required to protect against further damages, the injured Party may not
institute proceedings against the Party in default until the time for cure has expired. Failure or
delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time
of default.
6.2 Rights and Remedies Cumulative. Except as otherwise expressly stated in
this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by either
Party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or
different times, of any other rights or remedies for the same default or any other default by the other
Party.
6.3 Indemnification. Owner shall defend (with counsel acceptable to the City,
which acceptance shall not be unreasonably withheld), indemnify and hold harmless City and its
officers, officials, agents, employees and representatives (collectively, “Indemnitees”) from and
against any loss, liability, claim, or judgment (collectively, “claims”) arising from any act or
omission of Owner in connection with this Agreement, including, without limitation, liability for
damage to any third party or claims for personal injury and property damage to any third party,
which may arise out of or in connection with the direct or indirect activities of the Owner with
respect to the Project, except to the extent arising from the gross negligence or willful misconduct
of one or more Indemnitee. Owner agrees to and will defend the Indemnitees from any third-party
claim, action, or proceeding to attack, set aside, void, or annul an approval by Indemnitees
concerning this Agreement or the development of the Project or to determine the reasonableness,
legality or validity of any condition attached thereto. The Owner’s indemnification is intended to
include, but not be limited to, damages, fees and/or costs awarded against Indemnitees and costs
of suit, claim or litigation, including without limitation reasonable attorneys’ fees, penalties and
other costs, liabilities and expenses incurred by Indemnitees in connection with such proceeding.
City shall promptly notify Owner of any such claim, action or proceeding, and City shall cooperate
in the defense. Owner’s obligation to indemnify City hereunder shall survive any termination of
this Agreement.
7. ASSIGNMENT
7.1 Assignment By Owner.
7.1.1 Assignment to Affiliate. Owner shall have the right to assign its
rights and obligations under this Agreement to an Owner Affiliate in connection with a transfer of
all or any portion of Owner’s interest in the Property to such Owner Affiliate. In the event of any
such assignment, (i) assignee shall be liable for performance of the obligations of Owner after the
date of assignment with respect to the portion of the Property so transferred and (ii) following
written notice to City and delivery of an Assignment and Assumption Agreement with respect to
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 9
the rights and obligations set forth herein, Owner shall be relieved of its legal duty to perform the
assigned obligations set forth in this Agreement applicable solely to the portion of the Property so
transferred.
7.1.2 Assignment to Third Party. Subject to the terms of this Section 7.1.2,
Owner shall have the right to sell or transfer the Property or any portion thereof, and assign its
interests in this Agreement, to a non-affiliate third party (any of the foregoing, a “Transfer”). Not
less than sixty (60) days prior to any Transfer, Owner shall notify City, in writing, of the proposed
Transfer, and shall provide to City an assignment and assumption agreement pursuant to which
the transferee will agree to assume all of the obligations of Owner hereunder for review and
approval by City, such approval not to be unreasonably withheld, conditioned or delayed. Upon
notice from the City (which notice must be provided within ten (10) days following Owner’s
notification of City concerning the proposed transfer), the transferee may be required to meet with
City’s Director of Community Development regarding the implementation of the affordable
housing obligations hereunder prior to the City countersigning or otherwise approving any such
assignment and assumption agreement. The City hereby agrees that it shall be unreasonable for
the City to withhold consent to any proposed transferee with assets of at least $100,000,000.00 (as
the same may be reasonably adjusted from time-to-time for inflation relying on a base year of
2025) and experience operating residential housing projects.
Notwithstanding the foregoing, Owner shall not be required to obtain City’s
prior written approval for each individual lease entered into between Owner and a tenant of a Unit
during the Total Density Bonus Agreement Term (so long as Owner complies with the terms and
conditions of this Agreement and the form of the lease for Affordable Units complies with the
Regulatory Agreement).
7.1.3 Release of Assigning Owner. Upon any sale, transfer or assignment
that complies with the provisions of Section 7.1.1 or 7.1.2 above, City shall deliver to Owner upon
request a release in writing by City, which release shall be provided by City upon the full satisfaction
by Owner of the following conditions:
(a) Owner no longer has a legal or equitable interest in all or any part
of the portion of the Property or Project assigned.
(b) Owner is not then in default under this Agreement.
(c) Owner has provided City written evidence of the assignment and
assumption of the rights, duties and obligations arising under or from this Agreement.
7.1.4 Subsequent Assignment. As used in this Agreement, the term
“Owner” shall be deemed to include any such transferee or assignee after the date such transfer or
assignment occurs in compliance with this Agreement.
7.1.5 Unpermitted Assignments Void. Any sale, transfer, or assignment
made in violation of this Agreement by either Party shall be null and void, and the Parties shall have
the right to pursue any right or remedy at law or in equity to enforce the assignment provisions in
this Section 7.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 10
7.2 Assignment by City. City shall have the right to assign in its sole and
absolute discretion all or any part of its interests in this Agreement without Owner’s approval to
any legal entity controlled by City. City shall provide notice to Owner of any such assignment.
7.3 Covenants Run with the Land. The Property shall be held, sold, conveyed,
hypothecated, encumbered, used, occupied and improved subject to the covenants, conditions,
and restrictions set forth herein. The covenants, conditions, restrictions, reservations, equitable
servitudes, liens and charges set forth in this Agreement shall run with the Property and shall be
binding upon Owner and all persons having any right, title or interest in the Property, or any part
thereof, their heirs, and successive owners and assigns; shall inure to the benefit of City and its
successors and assigns; and may be enforced by City and its successors and assigns. The covenants
established in this Agreement shall, without regard to technical classification and designation, be
binding for the benefit and in favor of City and its successors and assigns, and the parties hereto
expressly agree that this Agreement and the covenants herein shall run in favor of City, without
regard to whether City is or remains an owner of any land or interest therein to which such
covenants relate. However, all such covenants and restrictions shall be deemed to run in favor of
all real property owned by City, which real property shall be deemed the benefited property of
such covenants, and this Agreement shall create equitable servitudes and covenants appurtenant to
all real property owned by City and running with the Property in accordance with the provisions
of Civil Code Section 1468. Furthermore, all of the covenants, conditions, and restrictions
contained herein shall also constitute easements in gross running in favor of City. City is deemed
the beneficiary of the terms and provisions of this Agreement and of the covenants running with
the land, for and in its own right and for the purposes of protecting the interests of the community
and other parties, public or private, in whose favor and for whose benefit this Agreement and the
covenants running with the land have been provided. Owner hereby declares its understanding and
intent that the burden of the covenants set forth herein touch and concern the land and that the
Owner’s interest in the Property is rendered less valuable thereby. Owner hereby further declares
its understanding and intent that the benefit of such covenants touch and concern the land by
enhancing and increasing the enjoyment and use of the Property by the residents of City and by
furthering the health, safety, and welfare of the residents of City. Owner hereby further declares
its understanding that the covenants set forth in this Agreement are required by the State Density
Bonus Law and Chapter 17.58 of the Lake Elsinore Municipal Code to run with the land and the
Property for the duration of the Total Density Bonus Agreement Term.
8. MISCELLANEOUS
8.1 Notices.
8.1.1 Delivery. As used in this Agreement, “notice” includes, but is not
limited to, the communication of notice, request, demand, approval, statement, report, acceptance,
consent, waiver, appointment or other communication required or permitted hereunder. All notices
shall be in writing and shall be considered given either: (i) when delivered in person to the recipient
named below; or (ii) on the date of delivery shown on the return receipt, after deposit in the United
States mail in a sealed envelope as either registered or certified mail with return receipt requested,
and postage and postal charges prepaid, and addressed to the recipient named below; or (iv) one
(1) day after deposit with a known and reliable next-day document delivery service (such as
FedEx), charges prepaid and delivery scheduled next-day to the recipient named below, provided
that the sending party receives a confirmation of delivery from the delivery service provider. All
notices shall be addressed as follows:
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 11
If to City: City of Lake Elsinore
130 S. Main Street
Lake Elsinore, CA 92530
Attn: City Manager
With a copy to: Barbara Leibold
City Attorney
Leibold McClendon & Mann
9841 Irvine Center Drive, Suite 230
Irvine, CA 92618
If to OWNER:
3rd & Dexter, LLC
30767 Gateway Place
Unit 144
Rancho Mission Viejo, CA 92694
Attn: James Walters
8.1.2 Change of Address. Either Party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a Party or an officer or
representative of a Party, or to a different address, or both. Notices given before actual receipt of
notice of change shall not be invalidated by the change.
8.2 Entire Agreement. This Agreement and all of its exhibits and attachments
hereto and agreements referenced herein set forth and contain the entire understanding and
agreement of the Parties, and there are no oral or written representations, understandings or
ancillary covenants, undertakings or agreements which are not contained or expressly referred to
herein. No testimony or evidence of any such representations, understandings or covenants shall be
admissible in any proceeding of any kind or nature to interpret or determine the terms or conditions
of this Agreement.
8.3 Amendments. The terms of this Agreement may only be modified or
amended by an instrument in writing executed by each of the Parties hereto; provided, however,
the City hereby authorizes the City Manager or his/her designee to make necessary corrective
amendments or modifications to this Agreement on behalf of the City.
8.4 Severability. If any term, provision, covenant or condition of this
Agreement shall be determined invalid, void or unenforceable, the remainder of this Agreement
shall not be affected thereby to the extent such remaining provisions are not rendered impractical
to perform taking into consideration the purposes of this Agreement.
8.5 Interpretation and Governing Law. This Agreement and any dispute arising
hereunder shall be governed and interpreted in accordance with the laws of the State of California
without regard to conflict of law principles. This Agreement shall be construed as a whole
according to its fair language and common meaning to achieve the objectives and purposes of the
Parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 12
the drafting party shall not be employed in interpreting this Agreement, all Parties having been
represented by counsel in the negotiation and preparation hereof.
8.6 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this Agreement.
8.7 Singular and Plural. As used herein, the singular of any word includes the
plural, and vice versa, as context so dictates. Masculine, feminine, and neuter forms of any word
include the other as context so dictates.
8.8 Joint and Several Obligations. Except as otherwise set forth in Section 8.9
below, if at any time during the term of this Agreement the same portion of the Property and/or
Project is owned by more than one Owner, all obligations of such Owner under this Agreement
shall be joint and several with respect to the portion of the Property and Project that are collectively
owned, and the default of any such Owner shall be the default of all such Owners.
8.9 Obligations upon Transfer. If at any time during the term of this Agreement,
ownership in portions of the Property are separated, each Owner of any portion of the Property
shall be solely and only liable for performance of such Owner’s obligations applicable to the
portion of the Property under this Agreement as specified in the applicable assignment agreement.
8.10 Time of Essence. Time is of the essence in the performance of the
provisions of this Agreement as to which time is an element.
8.11 Computation of Days. Unless otherwise specified in this Agreement, use of
the term “days” shall mean calendar days. For purposes of this Agreement, “business days” shall
mean every day of the week that City Hall of the City is open for business to the general public.
8.12 Waiver. Failure by a Party to insist upon the strict performance of any of
the provisions of this Agreement by the other Party, or the failure by a Party to exercise its rights
upon the default of the other Party, shall not constitute a waiver of such Party’s right to insist and
demand strict compliance by the other Party with the terms of this Agreement thereafter.
8.13 Force Majeure. Neither Party shall be deemed to be in default where failure
or delay in performance of any of its obligations under this Agreement is caused by floods,
earthquakes, other Acts of God, fires, casualties, wars, riots or similar hostilities, strikes walk-outs
and other labor difficulties beyond the Party’s control (including the Party’s employment force),
court actions (such as restraining orders or injunctions), government regulations, restrictions or
mandates, or other causes beyond the Party’s control. If any such events shall occur, the term of
this Agreement and the time for performance by either Party of any of its obligations hereunder
may be extended by the written agreement of the Parties for the period of time that such events
prevented such performance.
8.14 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the Party benefited
thereby of the covenants to be performed hereunder by such benefited Party.
8.15 Successors in Interest. The burdens of this Agreement shall be binding
upon, and the benefits of this Agreement shall inure to, all successors in interest to the Parties to
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 13
this Agreement. All provisions of this Agreement shall be enforceable as equitable servitudes and
constitute covenants running with the land. Each covenant to do or refrain from doing some act
hereunder with regard to development of the Property: (a) is for the benefit of and is a burden upon
every portion of the Property; (b) runs with the Property and each portion thereof; and, (c) is
binding upon each Party and each successor in interest during ownership of the Property or any
portion thereof.
8.16 Jurisdiction and Venue. Any legal actions arising under this Agreement or
brought by any Party hereto for the purpose of enforcing, construing or determining the validity
of any provision of this Agreement must be instituted in the Superior Court of the County of
Riverside, State of California, or in any other court in that county, and the Parties waive all
provisions of law providing for the filing, removal or change of venue to any other court.
8.17 Project as a Private Undertaking. It is specifically understood and agreed by
and between the Parties hereto that the development of the Project is a private development, that
neither Party is acting as the agent of the other in any respect hereunder, and that each Party is an
independent contracting entity with respect to the terms, covenants and conditions contained in
this Agreement. No partnership, joint venture or other association of any kind is formed by this
Agreement. The only relationship between City and Owner is that of a government entity regulating
the development of private property and the Owner of such property.
8.18 Further Actions and Instruments; Administration of Agreement. Each of the
Parties shall cooperate with and provide reasonable assistance to the other to the extent
contemplated hereunder in the performance of all obligations under this Agreement and the
satisfaction of the conditions of this Agreement. Upon the request of either Party at any time, the
other Party shall promptly execute, with acknowledgment or affidavit if reasonably required, and
file or record such required instruments and writings and take any actions as may be reasonably
necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of
this Agreement or to evidence or consummate the transactions contemplated by this Agreement.
City hereby authorizes City Manager to issue interpretations, waive provisions and enter into
amendments of this Agreement on behalf of City so long as such actions do not substantially
change the uses or development permitted on the Property. The City Manager may delegate her or
his powers and duties under this Agreement to an authorized management level employee of the
City.
8.19 Estoppel Certificate. Within thirty (30) business days following a written
request by any of the Parties, the other Party shall execute and deliver to the requesting Party a
statement certifying that (i) either this Agreement is unmodified and in full force and effect or there
have been specified (date and nature) modifications to this Agreement, but it remains in full force
and effect as modified; and (ii) either there are no known current uncured defaults under this
Agreement or that the responding Party alleges that specified (date and nature) defaults exist. The
statement shall also provide any other reasonable information requested. The failure to timely
deliver this statement shall constitute a conclusive presumption that this Agreement is in full force
and effect without modification except as may be represented by the requesting Party and that there
are no uncured defaults in the performance of the requesting Party except as may be represented
by the requesting Party. The preparation and issuance of estoppel certificates under this Section
8.17 shall be at no expense to City.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 14
8.20 Subordination. City’s approval of the necessary land use entitlements that
authorize Owner to develop, operate, and maintain the Project was based, in part, upon Owner’s
obligation to provide no less than the number of Affordable Units required pursuant to the State
Density Bonus Law and the terms and conditions of this Agreement. For the Total Density Bonus
Agreement Term, this Agreement and the Regulatory Agreement shall have priority over any and
all mortgages, deeds of trust, and other similar forms of secured financing (each a “Deed of Trust”)
recorded against the portion of the Property upon which the Rental Units are to be constructed.
Notwithstanding the preceding sentence, a Deed of Trust obtained by Owner from a reputable
lender (collectively, “Lenders”) that is regularly engaged in the business of making or owning
loans of similar types to the financing provided to Owner for the Property (hereinafter, the
“Priority Obligations”), shall, upon request of Owner or the beneficiary of a Deed of Trust
securing any Priority Obligation (hereinafter, the “Holder”), have priority over this Agreement if
(i) Holder obtains City’s approval, which shall not be unreasonably withheld or delayed, prior to
executing the Deed of Trust securing a Priority Obligation, and (ii) Holder and City execute in
recordable form a subordination agreement in such form (or other necessary document) as may be
reasonably approved by the City Attorney and Holder, confirming subordination of this Agreement
to the lien of the Deed of Trust securing the Priority Obligation. The City Manager shall have the
authority on behalf of City to provide the approval required under clause (i) above and to execute
a subordination agreement in such form as reasonably approved by the City Attorney. Any
subordination agreement must preserve the affordability requirements herein in the event of a
default on the Deed of Trust securing a Priority Obligation, it being expressly understood and
agreed by Owner that state law requires preservation of affordability covenants in connection with
the approval of this density bonus project.
8.21 Attorneys’ Fees and Costs. If either Party to this Agreement commences an
action against the other Party to this Agreement arising out of or in connection with this
Agreement, the prevailing Party shall be entitled to receive, in addition to the relief granted, actual
and reasonable attorneys’ fees, expert witness fees, costs of investigation, and costs of suit from
the losing Party; provided, however, that the attorneys’ fees awarded pursuant to this Section shall
not exceed the hourly rate paid by City for legal services multiplied by the reasonable number of
hours spent by the attorneys of the prevailing Party in the conduct of the litigation. The court may
set such fees in the same action or in a separate action brought for that purpose.
8.22 Authority to Execute. The person or persons executing this Agreement on
behalf of either Party warrants and represents that he or she/they have the authority to execute this
Agreement on behalf of his or her/their agency, corporation, partnership or business entity and
warrants and represents that he or she/they has/have the authority to bind the Party to the
performance of its obligations hereunder.
8.23 Counterparts. This Agreement may be executed by the Parties in
counterparts, which counterparts shall be construed together and have the same effect as if all of
the Parties had executed the same instrument.
[signatures on following page]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and
year set forth in the preamble above.
“CITY”
CITY OF LAKE ELSINORE, a California
municipal corporation
By:
Name: Jason Simpson
Its: City Manager
ATTEST:
Candice Alvarez, MMC , City Clerk
APPROVED AS TO FORM
David H. Mann, Acting City Attorney
“DEVELOPER”
3RD & DEXTER, LLC,
a Delaware limited liability company
By:
Name:
Its:
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx
ACKNOWLEDGMENT
State of California )
County of )
On , before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved
to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx
ACKNOWLEDGMENT
State of California )
County of )
On , before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docxEXHIBIT “A”
EXHIBIT “A”
TO DENSITY BONUS HOUSING AGREEMENT
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Lake Elsinore, County of Riverside, State of California, described as
follows:
[to come]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docxEXHIBIT “B”
EXHIBIT “B”
TO DENSITY BONUS HOUSING AGREEMENT
MAP SHOWING PROPERTY AND ITS LOCATION
[Attached]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docxEXHIBIT “C”
EXHIBIT “C”
TO DENSITY BONUS HOUSING AGREEMENT
Health and Safety Code Sections 50052.5, 50053, 50105, and 50093
[Attached]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 2
CALIFORNIA HEALTH AND SAFETY CODE SECTIONS:
50052.5
(a) For any owner-occupied housing that receives assistance prior to January 1, 1991, and
a condition of that assistance is compliance with this section, “affordable housing cost” with respect to
lower income households may not exceed 25 percent of gross income.
(b) For any owner-occupied housing that receives assistance on or after January 1, 1991,
and a condition of that assistance is compliance with this section, “affordable housing cost” may not
exceed the following:
(1) For extremely low households the product of 30 percent times 30 percent of the
area median income adjusted for household size appropriate for the unit.
(2) For very low income households the product of 30 percent times 50 percent of
the area median income adjusted for household size appropriate for the unit.
(3) For lower income households whose gross incomes exceed the maximum
income for very low income households and do not exceed 70 percent of the area median income
adjusted for household size, the product of 30 percent times 70 percent of the area median income
adjusted for household size appropriate for the unit. In addition, for any lower income household that
has a gross income that equals or exceeds 70 percent of the area median income adjusted for household
size, it shall be optional for any state or local funding agency to require that affordable housing cost
not exceed 30 percent of the gross income of the household.
(4) For moderate-income households, affordable housing cost shall not be less than
28 percent of the gross income of the household, nor exceed the product of 35 percent times 110 percent
of area median income adjusted for household size appropriate for the unit. In addition, for any moderate-income
household that has a gross income that exceeds 110 percent of the area median income adjusted for household
size, it shall be optional for any state or local funding agency to require that affordable housing cost not exceed
35 percent of the gross income of the household.
(c) The department shall, by regulation, adopt criteria defining, and providing for
determination of, gross income, adjustments for household size appropriate to the unit, and housing
cost for purposes of determining affordable housing cost under this section. These regulations may
provide alternative criteria, where necessary to be consistent with pertinent federal statutes and
regulations governing federally assisted housing. The agency may, by regulation, adopt alternative
criteria, and pursuant to subdivision (f) of Section 50462, alternative percentages of income may be
adopted for agency-assisted housing development.
(d) With respect to moderate- and lower income households who are tenants of rental
housing developments and members or shareholders of cooperative housing developments, or limited
equity cooperatives “affordable housing cost” has the same meaning as affordable rent, as defined in Section
50053.
(e) Regulations of the department shall also include a method for determining the maximum
construction cost, mortgage loan, or sales price that will make housing available to an income group at
affordable housing cost.
(f) For purposes of this section, “area median income” shall mean area median income as
published by the department pursuant to Section 50093.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 3
(g) For purposes of this section, “moderate income household” shall have the same meaning
as “persons and families of moderate income” as defined in Section 50093.
(h) For purposes of this section, and provided there are no pertinent federal statutes
applicable to a project or program, “adjusted for household size appropriate to the unit” shall mean for
a household of one person in the case of a studio unit, two persons in the case of a one-bedroom unit,
three persons in the case of a two-bedroom unit, four persons in the case of a three-bedroom unit, and
five persons in the case of a four- bedroom unit.
50053
(a) For any rental housing development that receives assistance prior to January 1, 1991,
and a condition of that assistance is compliance with this section, “affordable rent” with respect to
lower income households shall not exceed the percentage of the gross income of the occupant person
or household established by regulation of the department that shall not be less than 15 percent of gross
income nor exceed 25 percent of gross income.
(b) For any rental housing development that receives assistance on or after January 1, 1991,
and a condition of that assistance is compliance with this section, “affordable rent,” including a
reasonable utility allowance, shall not exceed:
(1) For extremely low income households the product of 30 percent times 30 percent
of the area median income adjusted for household size appropriate for the unit.
(2) For very low income households, the product of 30 percent times 50 percent of
the area median income adjusted for household size appropriate for the unit.
(3) For lower income households whose gross incomes exceed the maximum
income for very low income households, the product of 30 percent times 60 percent of the area median
income adjusted for household size appropriate for the unit. In addition, for those lower income
households with gross incomes that exceed 60 percent of the area median income adjusted for
household size, it shall be optional for any state or local funding agency to require that affordable rent
be established at a level not to exceed 30 percent of gross income of the household.
(4) For moderate-income households, the product of 30 percent times 110 percent
of the area median income adjusted for household size appropriate for the unit. In addition, for those
moderate-income households whose gross incomes exceed 110 percent of the area median income
adjusted for household size, it shall be optional for any state or local funding agency to require that
affordable rent be established at a level not to exceed 30 percent of gross income of the household.
(c) The department’s regulation shall permit alternative percentages of income for agency-
assisted rental and cooperative housing developments pursuant to regulations adopted under
subdivision (f) of Section 50462. The department shall, by regulation, adopt criteria defining and
providing for determination of gross income, adjustments for household size appropriate to the unit,
and rent for purposes of this section. These regulations may provide alternative criteria, where
necessary, to be consistent with pertinent federal statutes and regulations governing federally assisted
rental and cooperative housing. The agency may, by regulation, adopt alternative criteria, and pursuant
to subdivision (f) of Section 50462, alternative percentages of income may be adopted for agency-
assisted housing developments. For purposes of this section, “area median income,” “adjustments for
household size appropriate to the unit,” and “moderate- income household” shall have the same
meaning as provided in Section 50052.5.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 4
50105
(a) “Very low income households” means persons and families whose incomes do not
exceed the qualifying limits for very low income families as established and amended from time to
time pursuant to Section 8 of the United States Housing Act of 1937. These qualifying limits shall be
published by the department in the California Code of Regulations as soon as possible after adoption
by the Secretary of Housing and Urban Development. In the event the federal standards are
discontinued, the department shall, by regulation, establish income limits for very low income
households for all geographic areas of the state at 50 percent of area median income, adjusted for
household size and revised annually.
(b) “Very low income households” includes extremely low income households, as defined
in Section 50106. The addition of this subdivision does not constitute a change in, but is declaratory of,
existing law.
(c) As used in this section, “area median income” means the median household income of
a geographic area of the state.
50093
“Persons and families of low or moderate income” means persons and families whose income does not
exceed 120 percent of area median income, adjusted for household size by the department in accordance
with adjustment factors adopted and amended from time to time by the United States Department of
Housing and Urban Development pursuant to Section 8 of the United States Housing Act of 1937.
However, the agency and the department jointly, or either acting with the concurrence of the Secretary
of the Business, Consumer Services and Housing, may permit the agency to use higher income
limitations in designated geographic areas of the state, upon a determination that 120 percent of the
median income in the particular geographic area is too low to qualify a substantial number of persons
and families of low or moderate income who can afford rental or home purchase of housing financed
pursuant to Part 3 (commencing with Section 50900) without subsidy.
“Persons and families of low or moderate income” includes very low income households, as
defined in Section 50105, extremely low income households, as defined in Section 50106, and lower
income households as defined in Section 50079.5, and includes persons and families of extremely low
income, persons and families of very low income, persons and families of low income, persons and
families of moderate income, and middle-income families. As used in this division:
(a) “Persons and families of low income” or “persons of low income” means persons or
families who are eligible for financial assistance specifically provided by a governmental agency for
the benefit of occupants of housing financed pursuant to this division.
(b) “Persons and families of moderate income” or “middle-income families” means persons
and families of low or moderate income whose income exceeds the income limit for lower income
households.
(c) “Persons and families of median income” means persons and families whose income
does not exceed the area median income, as adjusted by the department for household size in
accordance with adjustment factors adopted and amended from time to time by the United States
Department of Housing and Urban Development pursuant to Section 8 of the United States Housing
Act of 1937.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 5
As used in this section, “area median income” means the median household income of a
geographic area of the state, as annually estimated by the United States Department of Housing and
Urban Development pursuant to Section 8 of the United States Housing Act of 1937. In the event these
federal determinations of area median income are discontinued, the department shall establish and
publish as regulations income limits for persons and families of median income for all geographic areas
of the state at 100 percent of area median income, and for persons and families of low or moderate
income for all geographic areas of the state at 120 percent of area median income. These income limits
shall be adjusted for household size and shall be revised annually.
For purposes of this section, the department shall file, with the Office of Administrative Law,
any changes in area median income and income limits determined by the United States Department of
Housing and Urban Development, together with any consequent changes in other derivative income
limits determined by the department pursuant to this section. These filings shall not be subject to Article
5 (commencing with Section 11346) or Article 6 (commencing with Section 11349) of Chapter 3.5 of
Part 1 of Division 3 of Title 2 of the Government Code, but shall be effective upon filing with the
Office of Administrative Law and shall be published as soon as possible in the California Regulatory
Code Supplement and the California Code of Regulations.
The department shall establish and publish a general definition of income, including inclusions,
exclusions, and allowances, for qualifying persons under the income limits of this section and Sections
50079.5, 50105, and 50106 to be used where no other federal or state definitions of income apply. This
definition need not be established by regulation.
Nothing in this division shall prevent the agency or the department from adopting separate
household size adjustment factors or programmatic definitions of income to qualify households,
persons, and families for programs of the agency or department, as the case may be.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docxEXHIBIT “D”
EXHIBIT “D”
TO DENSITY BONUS HOUSING AGREEMENT
EXAMPLE OF AFFORDABLE RENT CALCULATION
[Attached]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docxEXHIBIT “D”
Example of Affordable Rent Calculation
RENTAL CALCULATION EXAMPLE
For purposes of determining Affordable Rent, Owner shall use an average of estimated housing costs
for the next twelve months, which shall include all of the following:
• Use and occupancy of a housing unit and land and facilities associated therewith.
• Any separately charged fees or service charges assessed by the lessor which are required
of all tenants (including mandatory renters insurance, if applicable), other than security
deposits.
• A reasonable allowance for utilities not included in the above costs, including garbage
collection, sewer, water, electricity, gas, and other heating, cooking, and refrigeration
fuels. Utilities do not include telephone and cable service. Such an allowance shall take
into consideration the cost of an adequate level of service.
• If applicable, possessory interest taxes or other fees or charges assessed for use of the
land and facilities associated therewith by a public or private entity other than the lessor.
In explanation of the foregoing, Table 1 shows the maximum monthly gross rental housing payment
pursuant to Health and Safety Code Section 50053(b)(2) and (b)(4) for Very Low Income households.
The gross monthly cost for Very Low Income is the product of 30 percent times 50 percent of the
Riverside County Area Median Income adjusted for household size appropriate to the unit, (as shown
in Table 1).1
Table 1
2025 Very-Low Income Rental
Gross Monthly Housing Payment
[2025 RENT LEVELS TO BE ADDED PRIOR TO EXECUTION]
Renting a studio unit, payment may not exceed $
Renting a 1 bedroom unit, payment may not exceed $
Renting a 2 bedroom unit, payment may not exceed $
Renting a 3 bedroom unit, payment may not exceed $
Should utilities or other costs listed above be paid separately by the tenant, Owner shall deduct from the
above maximum monthly payment to arrive at the net rental payment for the unit. Utility cost schedules
may be confirmed by the City of Lake Elsinore, which currently utilizes the most recent Utility
Allowance Schedule issued by the Housing Authority of the County of Riverside.
The above examples are provided to illustrate how rental housing costs are calculated. Nothing in this
Exhibit shall supersede the provisions of this Agreement or the Regulatory Agreement and the provisions
of those agreements shall control and be binding on all parties.
1 1 “Adjusted for household size appropriate to the unit” shall mean for a household of one person in the case of a studio
unit, two persons in the case of a one-bedroom unit, and three persons in the case of a two-bedroom unit.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docxEXHIBIT “E”
EXHIBIT “E”
TO DENSITY BONUS HOUSING AGREEMENT
Median Income
[Attached]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docxEXHIBIT “E”
2025 Income Guidelines
Qualifying Income Levels*
Note: Per State law, only median income adjusted for household size appropriate to the unit may
be used for pricing. These incomes are shown in bold.
Income caps for specific categories are provided only for purposes of qualifying household not to
determine price/rent.
*Numbers from HCD Memorandum dated April 23, 2025.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docxEXHIBIT “F”
EXHIBIT “F”
TO DENSITY BONUS HOUSING AGREEMENT
Regulatory Agreement and Declaration of Covenants and Restrictions
[Attached]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docxEXHIBIT “G”
EXHIBIT “G”
TO DENSITY BONUS HOUSING AGREEMENT
Termination and Release
[Attached]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 1
RECORDED AT THE REQUEST OF AND
WHEN RECORDED RETURN TO:
City of Lake Elsinore
130 S. Main Street
Lake Elsinore, CA 92530
Attn: City Clerk
(SPACE ABOVE THIS LINE FOR
RECORDER’S USE)
This Termination and Release is recorded at
the request and for the benefit of the City of
Lake Elsinore and is exempt from the
payment of a recording fee pursuant to
Government Code Sections 6103 and 27383.
TERMINATION AND RELEASE
This TERMINATION AND RELEASE (the “Termination and Release”) is being entered
into by and between the CITY OF LAKE ELSINORE, a California municipal corporation (the
“City”), and FAIRBOOK COMMUNITIES LLC, a Nevada limited liability company (the
“Owner”). City and Owner are hereinafter sometimes referred to collectively as the “Parties” and
individually as a “Party.”
RECITALS
A. Owner is the owner in fee of that certain real property located at [INSERT],
consisting of approximately _________ net acres of land, and more particularly described in the
legal description attached hereto as Attachment 1 and incorporated herein by this reference (the
“Property”).
B. On or about , Owner and City entered into that certain
Density Bonus Housing Agreement (the “Density Bonus Agreement”) relating to the Property.
The Density Bonus Agreement is a public record and is available for inspection and copying in
the office of the City Clerk of City located at 130 S. Main Street, Lake Elsinore, California 92530.
Any capitalized terms not defined herein shall have the meanings ascribed to such terms in the
Density Bonus Agreement.
C. The Owner has developed o a four hundred fifty-one (451) unit residential rental
community. Pursuant to a City condition of approval for the Project and the Density Bonus
Agreement, twenty-two (22) of said units (herein, the “Affordable Units”) are required to be
rented at Affordable Rent to Very-Low Income Households.
D. Pursuant to the Density Bonus Agreement, Owner was required to execute and
record that certain Regulatory Agreement and Declaration of Covenants and Restrictions (the
“Regulatory Agreement”), recorded on , 20 , as
Instrument No. of the Official Records for Riverside County, California.
The Regulatory Agreement was recorded against the Property to memorialize the terms and
conditions of the rental restrictions on the Affordable Units within the Project and to memorialize
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx 2
and impose the restrictive covenants, including the affordability covenants that no less than
twenty-two (22) Units were to be rented at Affordable Rent to Very-Low Income Households
during the Total Affordability Term as set forth in the Density Bonus Agreement.
E. Pursuant to the Density Bonus Agreement and Regulatory Agreement, upon the
expiration of the Total Affordability Term with respect to each Affordable Unit, Owner and City
are required to execute and record or cause to be executed and recorded for the benefit of the
Property this Termination and Release, whereupon the Property and Project would be released
from the terms and conditions of the Regulatory Agreement and Density Bonus Agreement, and
Owner would be released from all obligations thereunder except as to the Survival Obligations as
defined below.
COVENANTS
Based upon the foregoing Recitals, which are incorporated herein by this reference, and
for good and valuable consideration, the receipt and sufficiency of which is acknowledged by both
parties, Owner and City agree as follows:
1. From and after the date that this Termination and Release is recorded, neither the
Property nor the Project shall be bound or burdened by any of the provisions set forth or referred
to in the Regulatory Agreement or Density Bonus Agreement; provided, however, Owner shall
continue to be bound by the obligations in the Density Bonus Agreement and Regulatory
Agreement referenced in Section 6 of the Density Bonus Agreement as surviving the termination
(“Survival Obligations”).
2. City shall cooperate in executing any further or additional documents, in recordable
form as necessary, as may be reasonably requested by any existing or prospective owner or holder
of a mortgage or deed of trust of, in, or to any of the Property and/or Project to confirm said
Termination and Release. The form of any such additional documents shall be prepared by such
existing or prospective owner or holder at no cost to City, and shall be in a form approved by the
City Attorney.
3. City does hereby certify that Owner is released from any further obligations set forth
in the Density Bonus Agreement or the Regulatory Agreement except for the Survival Obligations.
4. This Termination and Release shall not constitute evidence of compliance with or
satisfaction of any obligation of Owner to any holder of a mortgage, or any insurer of a mortgage,
securing money loaned to finance the construction or operation of work on the Property, or any
part thereof.
[Signatures on next page]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx
IN WITNESS WHEREOF, City has executed this Termination and Release as of this
day of , .
“CITY”
CITY OF LAKE ELSINORE,
a California municipal corporation
By:
_____________, City Manager
ATTEST:
, City Clerk
APPROVED AS TO FORM:
, City Attorney
On behalf of Fairbrook Communities LLC, a Nevada limited liability company, [OR
SUCCESSOR OR ASSIGNEE] I hereby consent to the recordation of this Termination and
Release for the benefit of the Property described herein.
Dated: “OWNER”
[INSERT],
a limited liability company [OR
SUCCESSOR OR ASSIGNEE]
By:
Its:
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx
ACKNOWLEDGMENT
State of California )
County of )
On , before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved
to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx
ACKNOWLEDGMENT
State of California )
County of )
On , before me, ,
(insert name and title of the officer)
Notary Public, personally appeared , who proved
to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Agreement 121625.docx
ATTACHMENT “1” TO TERMINATION AND
RELEASE OF LEGAL DESCRIPTION OF PROPERTY
LEGAL DESCRIPTION OF THE PROPERTY
Real property in the City of Lake Elsinore, County of Riverside, State of California,
described as follows:
[INSERT]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 1
RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:
City of Lake Elsinore
130 S. Main Street
Lake Elsinore, CA 92530
Attn: City Clerk
Project: Dexter Village Apartments
(Space Above For Recorder’s Use)
This Regulatory Agreement and Declaration of
Covenants and Restrictions is recorded at the request and
for the benefit of the City of Lake Elsinore and is exempt
from the payment of a recording fee pursuant to
Government Code Sections 6103 and 27383.
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS AND RESTRICTIONS
(Dexter Village)
This REGULATORY AGREEMENT AND DECLARATION OF COVENANTS AND
RESTRICTIONS (Dexter Village) (“Agreement”) is entered into as of this day of
, 2025, by and between the CITY OF LAKE ELSINORE, a California municipal
corporation (the “City”), and 3RD & DEXTER, LLC, a Delaware limited liability company
(“Owner”). City and Owner are hereinafter sometimes referred to collectively as the “Parties” and
individually as a “Party”.
R E C I T A L S
A. The City is a municipal corporation organized and existing pursuant to the laws of
the State of California.
B. Owner and/or Owner’s members are owners and operators of multifamily rental
and homeownership projects in California.
C. On or about , 202 , Owner submitted a complete or deemed
complete housing project in accordance with the City’s applicable municipal codes, regulations,
and policies, which may generally be described as follows: a four hundred fifty-one (451) unit
residential development, consisting of two hundred thirty (230) rental apartment units, eighty-four
(84) condominium units, and one hundred thirty-seven (137) single family units (collectively, the
“Project”).
D. The Project is located on Dexter Avenue between 2nd Street and 3rd Street in the
City of Lake Elsinore, County of Riverside, State of California, as more particularly described in
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 2
the legal description attached hereto as Attachment 1 and more particularly depicted in
Attachment 2, both of which exhibits are incorporated herein by this reference (the “Property”).
E. Pursuant to California law (Government Code Sections 65915-65918) (the “State
Density Bonus Law”) and implementing ordinance in Chapter 17.58 of the City’s Municipal Code
(the “City Density Bonus Ordinance”), applicants of residential projects that include specified
levels of affordable housing are entitled to apply for and receive certain density bonuses and
additional incentives that contribute significantly to the economic feasibility of lower income
housing.
F. The Project complies with the affordable housing requirements set forth in the State
Density Bonus Law as may be implemented through the City Density Bonus Ordinance. For
purposes of this Agreement, the Project is a “housing development” as defined in the State Density
Bonus Law.
G. On or about the date hereof, the City and Owner entered into that certain Density
Bonus Housing Agreement (Dexter Village), which will be recorded concurrently herewith in the
Official Records of Riverside County, California (“Density Bonus Agreement”). Among other
terms and conditions, the Density Bonus Agreement memorializes the density bonus, incentives,
and other provisions under the State Density Bonus Law applicable to the Project.
H. This Agreement (which includes by this incorporation by reference the
Attachments and Exhibits) is required to be entered into under the Density Bonus Agreement and
to be binding upon the Owner to implement, among the other terms and conditions set forth herein,
the affordability requirements for the Project in exchange for receiving the density bonus,
incentives, and other provisions applicable to the Project, as required by the State Density Bonus
Law and as may be implemented through the City’s Density Bonus Ordinance.
I. It is the intent of the City and Owner that Owner’s interests in the Property shall be
subject to this Agreement and that the terms hereof shall be binding on the Owner and its
successors in interest in the Property approved pursuant to the Density Bonus Agreement, for so
long as this Agreement shall remain in effect pursuant to the Density Bonus Agreement.
J. The development of the Project on the Property pursuant to this Agreement and
Density Bonus Agreement, and the fulfillment generally of this Agreement and Density Bonus
Agreement, are in the vital and best interests of the City, and the welfare of its residents, and in
accordance with the public purposes and provisions of applicable federal, state, and local laws and
requirements.
A G R E E M E N T
Based upon the foregoing Recitals, which are incorporated herein by this reference, and
for good and valuable consideration, the receipt and sufficiency of which is acknowledged, the
Parties hereby agree as follows:
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 3
1. Definitions and Attachments.
1.1 Definitions. In addition to the terms that may be defined elsewhere in this
Agreement, the following terms when used in this Agreement shall be defined as follows:
1.1.1 “Adjusted for family size appropriate to the unit” shall have the
meaning set forth in Health and Safety Code section 50052.5, and established and published from
time to time for state income limits by HCD in Section 6932 of Title 25 of the California Code of
Regulations, or successor regulation.
1.1.2 “Affordable Rent” means the maximum Monthly Rent that may be
charged to and paid by an Eligible Affordable Household for the Affordable Units, as determined
annually, as calculated pursuant to Health and Safety Code Section 50053, and established and
published from time to time for state income limits by HCD in Section 6932 of Title 25 of the
California Code of Regulations, or successor regulation.
1.1.3 “Affordable Unit” means individually and “Affordable Units”
means, collectively, twenty-two (22) Rental Units, which shall be comprised of fourteen (14) 1-
bedroom Units available for Very Low Income Households; six (6) 2-bedroom Units available for
Very Low Income Households, and two (2) 3-bedroom Units available for Very Low Income
Households.
1.1.4 “Agreement” and “Regulatory Agreement” means this Agreement
and all attachments hereto.
1.1.5 “Base Units” means the four hundred twenty-two (422) residential
Units that would have been authorized on the Property without application of the State Density
Bonus Law.
1.1.6 “City” means the City of Lake Elsinore, California, and the City’s
successors and assigns.
1.1.7 “City Council” means the City Council of the City.
1.1.8 “City Attorney” means the City Attorney for the City.
1.1.9 “City Manager” means the City Manager, or authorized designee
acting on behalf of the City Manager to administer this Agreement, for the City.
1.1.10 “City Monitoring Fee” means an annual monitoring fee payment to
the City in the amount of $74 per Affordable Unit, as adjusted by the lesser of 3.5% or the
percentage annual increase in the United States City Average All Items for All Urban Consumers
(CPI-U, 1982-84=100) published by the Bureau of Labor Statistics of the U.S. Department of
Labor; if the publication of the Consumer Price Index of the U.S. Bureau of Labor Statistics is
discontinued, comparable statistics on the purchasing power of the consumer dollar published by
a responsible financial periodical reasonably selected by City shall be used for making such
computations) per annum commencing in the year the Affordable Unit receives a certificate of
occupancy, to be paid annually by Owner to defray the costs incurred by City for monitoring
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 4
compliance with the affordability covenants set forth in this Agreement and the Density Bonus
Agreement, as the same may be adjusted by the City Manager from time to time.
1.1.11 “Density Bonus Agreement” means the agreement referenced in
Recital G.
1.1.12 “Density Bonus Agreement Term” means the period during which
the Density Bonus Agreement shall be in full force and effect, as provided for in Section 5.1 of the
Density Bonus Agreement.
1.1.13 “Density Bonus Units” means the twenty-nine (29) Units in
addition to the Base Units that Developer shall develop pursuant to the density allowance in the
State Density Bonus Law and the terms and conditions of the Density Bonus Agreement, of which
Developer would not be entitled to develop without providing the Affordable Units.
1.1.14 “Effective Date” has the same meaning as in the Density Bonus
Agreement.
1.1.15 “Eligible Affordable Household” means a Household that Owner
has determined constitutes a Very Low Income Household.
1.1.16 “Gross Mismanagement” has the meaning set forth in Section 8.
1.1.17 “HCD” means the California Department of Housing and
Community Development, or successor state agency responsible for the oversight and
administration of State Density Bonus Law as that law relates to statewide programs for low and
moderate income households.
1.1.18 “Home Office” means a separate area or room in an Affordable Unit
used for business purposes and claimed as a business expense pursuant to federal and state income
tax laws. Any room used for business purposes shall not reduce the number of bedrooms that are
required to be within an Affordable Unit pursuant to this Agreement and the Density Bonus
Agreement.
1.1.19 “Household” means all persons residing in a Unit.
1.1.20 “Income Computation and Certification Form” means the form
attached to this Agreement as Attachment 3 used to determine and certify whether a potential
renter is an Eligible Affordable Household.
1.1.21 “Median Income” means the Riverside County, California area
median income, adjusted for family size appropriate to the unit, established and published from
time to time, pursuant to Section 8 of the United States Housing Act of 1937, by HCD in Section
6932 of Title 25 of the California Code of Regulations, or successor regulation.
1.1.22 “Monthly Rent” means the total of monthly payments for (a) use
and occupancy of each Affordable Unit and land and facilities associated therewith, (b) any
separately charged fees or service charges assessed by Owner which are required of all tenants,
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 5
other than security deposits, (c) a reasonable allowance for an adequate level of service of utilities
not included in (a) or (b) above, including garbage collection, sewer, water, electricity, gas and
other heating, cooking and refrigeration fuels, but not including telephone or cable service, and
(d) possessory interest, taxes or other fees or charges assessed for use of the Affordable Unit and/or
land and facilities associated therewith by a public or private entity other than Owner. In the event
that all utility charges are paid by the Owner rather than the tenant, no utility allowance shall be
added to the rent for purposes of calculating Monthly Rent. “Monthly Rent” shall include any
other monthly (or monthly pro-rated) costs, fees, or payments that HCD requires pursuant to duly
adopted California Code of Regulations to be included as part of “affordable rent” for the use and
occupancy of an Affordable Unit.
1.1.23 “Project” means that certain residential development more
particularly described in Recital C.
1.1.24 “Property” means that certain real property more particularly
described in the legal description in Attachment 1 and improvements thereon, and depicted in
Attachment 2.
1.1.25 “Rental Unit” means a residential dwelling unit within the Project
(including Unrestricted Units and Affordable Units) to be rented by Owner pursuant to this
Agreement and the Density Bonus Agreement.
1.1.26 “Residential Unit” means a residential dwelling unit within the
Project (including Unrestricted Units and Affordable Units) to be sold or rented by Owner pursuant
to this Agreement and the Density Bonus Agreement.
1.1.27 “State Density Bonus Law” means Government Code
Sections 65915-65918 as they exist on the Effective Date.
1.1.28 “Substitute Affordable Units” means an equivalent Unit in terms of
number of bedrooms for an Affordable Unit.
1.1.29 “Total Affordability Term” has the meaning set forth in Section 3.1.
1.1.30 “Unit” means a “Residential Unit.”
1.1.31 “Unrestricted Units” means the Residential Units within the Project
to be sold or rented by Owner to a Household without restriction.
1.1.32 “Very Low Income Household” means a Household whose income
does not exceed the qualifying limit for “very low income families” pursuant to Health and Safety
Code Section 50105, in which such income does not exceed the state income limit for such
household as established and published from time to time by HCD in Section 6932 of Title 25 of
the California Code of Regulations, or successor regulation.
1.2 Attachments. The following documents are attached to, and by this
reference made a part of, this Agreement:
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 6
Attachment 1 – Legal Description of Property
Attachment 2 – Map showing Property and Location of Affordable Units
Attachment 3 – Income Computation and Certification Form
2. Development of the Project; Affordable Units. Owner shall complete the
construction and development of the Project on the Property subject to the entitlements for the
Project and the terms and conditions set forth in the Density Bonus Agreement. The Affordable
Units shall be dispersed throughout the Rental Units as designated on Attachment 2.
3. Affordability.
3.1 Total Affordability Term for Affordable Units. Each Affordable Unit shall
be restricted to use and occupancy by an Eligible Affordable Household for a total period of no
less than fifty-five (55) years (the “Total Affordability Term”). The Total Affordability Term for
an Affordable Unit shall commence on the date that the Affordable Unit receives all required
occupancy permits from the City. By way of explanation of the foregoing two sentences, it is
possible that the 55-year affordable period for one Affordable Unit will neither commence on the
same date nor terminate on the same date as another Affordable Unit. If the Affordable Units do
not concurrently receive on the same day all required occupancy permits from the City, this
Agreement shall remain binding and in full force and effect from the date it is required to be
recorded pursuant to the Density Bonus Agreement until the date that is fifty-five (55) years after
the last Affordable Unit received all required occupancy permits. If the Affordable Units
concurrently receive on the same day all required occupancy permits from the City, this Agreement
shall remain binding and in full force and effect from the date it is required to be recorded pursuant
to the Density Bonus Agreement until the date that is fifty-five (55) years after the Affordable
Units received all required occupancy permits.
3.2 City Monitoring Fee. For purposes of defraying the monitoring activities
required to ensure compliance with the State Density Bonus Law and affordability covenants set
forth in this Agreement, Owner shall pay to City the City Monitoring Fee no later than December
31 of each year. City may deliver to Owner an invoice for the City Monitoring Fee, but in no event
shall Owner be relieved of the payment obligation for any City Monitoring Fee even if no invoice
is provided. City shall ensure that the funds received from the City Monitoring Fee shall be used
to monitor compliance with the State Density Bonus Law and the affordability covenants set forth
in this Agreement.
4. Use; Affordability Covenants. For the entire duration this Agreement is recorded
and of full force and effect, Owner shall own, operate, and maintain the Project by renting the
Affordable Units in accordance with the covenants and conditions of this Section 4.
4.1 General. Owner shall devote the Property for use as a residential
community with associated amenities. The Affordable Units shall be rented to and occupied or
held available for occupancy only by Eligible Affordable Households at Affordable Rent. The
Affordable Units shall be consistent with the requirements and conditions set forth in all City
entitlements and approvals for the Project, and the Affordable Units shall be located as identified
in Attachment 2 as part of the Project. Subject to City’s written approval, which shall not be
unreasonably withheld, Developer may: (a) increase the number of Affordable Units or alter the
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 7
unit distribution as provided in this Agreement, provided that the Project has the minimum number
of Affordable Units and the minimum distribution thereof as specified in the Density Bonus
Agreement; and (b) elect to substitute a Substitute Affordable Unit for an Affordable Unit during
the Density Bonus Agreement Term, in which event the affordability requirements hereunder with
respect to the Affordable Unit shall be transferred to the Substitute Affordable Unit. The
Affordable Units shall be constructed with the same exterior appearance and interior features,
fixtures, and amenities, and shall use the same type and quality of materials, as provided for the
unrestricted Rental Units in the Project. Owner shall not permit any of the Units (including the
Affordable Units) to be utilized on a transient basis, or as a hotel, motel, dormitory, fraternity
house, sorority house, rooming house, nursing home, hospital, sanitarium, trailer court or park, or
non-residential uses (other than to maintain a Home Office).
4.2 Occupancy by Eligible Affordable Households. The lease for each
Affordable Unit shall provide that it is to be used as the principal residence of that Affordable
Unit’s Eligible Affordable Household and for no other purpose. The lease for an Affordable Unit
may allow an Eligible Affordable Household to have a Home Office so long as the Affordable
Unit is the Eligible Affordable Household’s principal residence. The lease shall further provide
that an Eligible Affordable Household shall not lease or sublease its Affordable Unit or its right of
occupancy.
4.3 Occupancy Limits. The number of persons permitted to occupy each
Affordable Unit shall not exceed the maximum occupancy permitted pursuant to the requirements
of the United States Department of Housing and Urban Development, which as of the date of this
Agreement is two persons per bedroom, plus one person (e.g., for a two bedroom unit the
maximum number of persons residing in the unit can be five persons). The lease for each
Affordable Unit shall include a provision limiting the number of persons permitted to occupy each
Affordable Unit in accordance with the preceding sentence and Owner shall enforce such
occupancy restrictions.
4.4 Determination of Eligible Affordable Household Status. Immediately prior
to any occupancy of an Affordable Unit, Owner shall obtain an Income Computation and
Certification Form from each applicant for an Affordable Unit dated the date of initial occupancy
of the Affordable Unit by such applicant. In addition, Owner shall provide such further
information as may be reasonably required by City for purposes of verifying a tenant’s status as
an Eligible Affordable Household. Owner shall verify that the income provided by an applicant
is accurate by obtaining the following as a part of the verification process for all proposed tenants
eighteen (18) years of age or older: (a) the Social Security Number (if available) of the proposed
tenant(s); (b) copies of the federal and state income tax returns if filed by the proposed tenant(s)
for the prior calendar year; (c) copies (if available) of the two most current wage earning statements
of the proposed tenant(s); (d) a certification as to the income and family size of the applicant
Household; and (e) any other information that City may reasonably require to verify the income
of the proposed tenant(s). Owner shall maintain in its records each Income Computation and
Certification Form obtained pursuant to this Section and Section 4.5 for a minimum period of five
(5) years.
4.5 Recertification. Within sixty (60) days prior to the first anniversary date of
the occupancy of an Affordable Unit by an Eligible Affordable Household, and on each
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 8
anniversary date thereafter, or if preferred by Owner and approved in writing by City, within sixty
(60) days prior to January 1 of each year, Owner shall recertify the income of such Eligible
Affordable Household by obtaining a completed Income Computation and Certification Form
based upon the current income of each occupant of the Affordable Unit. In the event that
recertification demonstrates that a Household’s income exceeds the maximum income permitted
for Eligible Affordable Household status, Owner shall perform either of the following: (i) To the
extent permitted by applicable law, the occupants’ lease shall not be renewed and said occupants
shall be required to vacate the unit within one hundred eighty (180) days after the recertification;
or (ii) the next available Unrestricted Unit in the Project shall be leased as an Affordable Unit at
Affordable Rent to an Eligible Affordable Household so that the Project will be in compliance
with the covenants and conditions of this Agreement, and the previous Affordable Unit shall be
redesignated as an Unrestricted Unit and the occupants thereof may be charged the amount of rent
for an Unrestricted Unit.
4.6 Leasing Affordable Units. The Affordable Units shall be available for
rental on a continuous basis and Owner shall not give preference to any particular class or group
in renting Affordable Units, except to the extent that the Affordable Units are required to be rented
to Eligible Affordable Households. Owner shall maintain a list of persons who have applied for
an Affordable Unit and, should multiple tenants be equally eligible (as to income, credit history,
and other nondiscriminatory criteria) and qualified to rent an Affordable Unit, Owner shall rent
available Affordable Units to Eligible Affordable Households on a first qualified (with reasonable
efforts made to qualify applicants in the order that the applications are received), first offered basis,
or pursuant to a lottery system. Owner shall use commercially reasonable efforts to lease
Affordable Units that become available as quickly as possible. Owner shall market the Affordable
Units to the residents of the City on a nonexclusive basis and to the extent permitted by applicable
fair housing laws and regulations.
4.7 Rental Agreement. The form of the lease agreement that will be entered
into between Owner and Eligible Affordable Households shall be reasonably approved by City
prior to the rental or leasing of any of the Affordable Units. Once approved, no material changes
shall be made to the form of the lease agreement relating to the total rent to be paid by an Eligible
Affordable Household, the qualification of an Eligible Affordable Household, or usage of the
Affordable Unit, without City’s prior written approval, which shall not be unreasonably withheld
as long as the proposed changes are consistent with implementing the terms and conditions of the
Density Bonus Agreement. The lease agreement shall obligate the Eligible Affordable Households
to comply with the provisions set forth in this Agreement, and an Eligible Affordable Household
who violates such requirements shall be in default under the rental agreement. Each lease
agreement with an Eligible Affordable Household shall include a provision to the effect that the
Owner has relied on the information provided by the Eligible Affordable Household on the Income
Computation and Certification Form and all other supporting information supplied by the Eligible
Affordable Household in determining qualification for occupancy of the applicable Affordable
Unit, and that any material misstatement in such certification (whether or not intentional) shall be
cause for immediate termination of such lease agreement. In addition, each lease agreement shall
contain a provision that failure to cooperate with the annual recertification process may disqualify
the Eligible Affordable Household as such and will be cause for immediate termination of such
lease agreement. Any termination shall be subject to fair housing laws and other laws designed to
protect the rights of tenants, of which Owner shall be obligated to follow and comply.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 9
5. Termination and Release from Regulatory Agreement. The covenants set forth in
this Agreement shall remain binding and in effect for the portion of the Property upon which the
Rental Units are to be constructed from the date of its recording until the date the executed
Termination and Release of Regulatory Agreement is recorded in the Official Records for
Riverside County, California. The Termination and Release of Regulatory Agreement shall be
executed and recorded pursuant to the terms and conditions set forth in Section 5 of the Density
Bonus Agreement. Following recordation of the Final Tract Map, City shall terminate and
reconvey this Agreement as to the portion of the Property upon which the for-sale units are to be
constructed pursuant to Section 5.2 of the Density Bonus Agreement.
6. No Discrimination. Owner shall not discriminate on account of any basis listed in
subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in
Section 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955,
and Section 12955.2 of the Government Code, in the sale, lease, or rental, or in the use, occupancy,
or enjoyment of the Property, nor shall Owner itself, or any person claiming under or through it,
establish or permit any such practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees
of the Property or any portion thereof. The foregoing covenants shall run with the land.
7. Maintenance of Property. For the Density Bonus Agreement Term, Owner shall
maintain or cause to be maintained the Property and all improvements on the Property in a good
condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all
applicable laws, rules, ordinances, orders, and regulations of all federal, state, county, municipal,
and other governmental agencies and bodies having or claiming jurisdiction. City places prime
importance on quality maintenance to ensure that residential developments which include
affordable units within the City are not allowed to deteriorate due to substandard maintenance. In
addition, Owner shall keep the Property free from all graffiti and any accumulation of debris or
waste material. Owner shall make all repairs and replacements reasonably necessary to keep the
improvements in first class condition and repair, reasonable wear and tear excepted, and shall
promptly eliminate all graffiti and replace dead and diseased plants and landscaping with
comparable materials. In the event that Owner breaches any of the covenants contained in this
Section 7, and such default continues for a period of ten (10) days after written notice from a City
or such longer period of time as is reasonably necessary to correct the condition (with respect to
landscaping, graffiti, debris, waste material, and general maintenance) or thirty (30) days after
written notice from City or such longer period of time as is reasonably necessary to correct the
condition (with respect to building improvements), then City in addition to whatever other remedy
it may have at law or in equity shall have the right to enter upon the Property and perform or cause
to be performed all such acts and work necessary to cure the default. Pursuant to such right of
entry, City shall be permitted (but not required) to enter upon the Property and perform all acts
and work necessary to protect, maintain, and preserve the improvements and landscaped areas on
the Property, and to attach a lien on the Property, or to assess the Property, in the amount of the
expenditures arising from such acts and work of protection, maintenance, and preservation by City
and/or costs of such cure, including a five percent (5%) administrative charge, which amount shall
be promptly paid by Owner to City upon demand.
8. Management. For the Density Bonus Agreement Term, Owner shall manage or
cause to be managed the Project in accordance with this Agreement and Density Bonus Agreement.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 10
In the event of “Gross Mismanagement” (as that term is defined below), City shall have the
authority to require that such Gross Mismanagement cease immediately and that management of
the Property comply with this Agreement and the Density Bonus Agreement. City shall provide
written notice to Owner of the event(s) of Gross Mismanagement occurring and Owner shall have
thirty (30) days after receipt of such notice (or such shorter period as specified in this Agreement,
or longer period as is reasonably necessary to correct the condition) to cure, correct, or remedy the
event(s) of Gross Mismanagement identified in City’s notice and to notify City of the cure,
correction, or remedy. For purposes of this Agreement the term “Gross Mismanagement” shall
mean management of the Project in a manner which violates the terms of this Agreement and/or
the Density Bonus Agreement and shall include, but is not limited to, the following:
i. Knowingly allowing an Affordable Unit to be occupied by a person
or Household that does not qualify as an Eligible Affordable
Household;
ii. Knowingly requiring a tenant of an Affordable Unit to pay more
than Affordable Rent;
iii. Allowing the prescribed occupancy levels to be exceeded without
taking immediate action to stop such overcrowding; or
iv. Failure to maintain the Property in the manner prescribed in
Section 7.
9. Records. Owner shall maintain complete and accurate records pertaining to the
Affordable Units for a period of no less than five (5) years (unless a longer period of time is
expressly set forth herein), and shall permit any duly authorized representative of City to inspect
the books and records of Owner pertaining to the Affordable Units within two (2) business days
of a request to do so.
10. Right to Inspect. City shall have the right to inspect the Property and the Affordable
Units for purposes of assuring compliance with this Agreement during normal business hours on
not less than seventy-two (72) hours written notice.
11. Indemnification. In addition to any other indemnity provided in this Agreement or
the Density Bonus Agreement, Owner shall defend (with counsel of City’s choosing), indemnify
and hold harmless City and its officers, officials, members, agents, employees, representatives,
and volunteers (collectively, “Indemnitees”) from and against any loss, damage, costs, expenses,
liability, claim, or judgment (collectively, “claims”) relating to or in connection with the operation
of the Project and Residential Units, or Owner’s performance under this Agreement, except to the
extent such claims are caused by the gross negligence or willful misconduct of one or more
Indemnitees. Owner’s indemnification is intended to include, but not be limited to, damages, fees
and/or costs awarded against Indemnities and costs of suit, claim or litigation, including without
limitation reasonable attorneys’ fees, penalties and other costs, liabilities and expenses incurred by
Indemnities in connection with such proceeding. City shall promptly notify Owner of any such
claim, action or proceeding, and City shall cooperate in the defense. Owner’s obligation to
indemnify City hereunder shall survive any termination of this Agreement.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 11
12. Insurance. Upon completion of construction of the Project and in no event later
than the date upon which the first Residential Unit has received all required occupancy permits
from the City and for the duration of this Agreement, Owner shall procure and keep in full force
and effect or cause to be procured and kept in full force and effect for the mutual benefit of Owner
and City, and shall provide City evidence reasonably acceptable to City, of insurance policies
meeting the minimum requirements set forth in this Section 12.
12.1 Types of Insurance Policies. The insurance policies to be maintained by
Owner upon the date specified above and for the duration of the term of this Agreement are as
follows:
i. Commercial General Liability insurance with respect to the Property
and the operations of or on behalf of Owner, in an amount not less
than Five Million Dollars ($5,000,000.00) per occurrence combined
single limit (which may be achieved with the use of umbrella/excess
liability policies) including products, completed operations,
contractual, bodily injury, personal injury, death and property
damage liability, subject to such increases in amount as City may
reasonably require from time to time; provided, that the percentage
increase in coverage shall not be required to exceed the percentage
increase in the Consumer Price Index published by the United States
Department of Labor, Bureau of Labor Statistics, for Urban Wage
Earners and Clerical Workers, Riverside-San Bernardino-Ontario
Average, All Items (1984 = 100) (the “Index”), from and after the
date of this Agreement, or, if said Index is discontinued, such
official index as may then be in existence and which is most nearly
equivalent to said Index (the “CPI Adjustment”). Unless otherwise
approved in advance by the City, the insurance to be provided by
Owner may provide for a deductible or self-insured retention of not
more than Fifty Thousand Dollars ($50,000.00), with such
maximum amount to increase at the same rate as the periodic
increases in the minimum amount of total insurance coverage set
forth above. City and its officers, officials, members, employees,
volunteers, agents, and representatives shall be named as additional
insureds under such policy or policies.
ii. With respect to the improvements and any fixtures and furnishings
to be owned or leased by Owner on the Property, all risk property
insurance against fire, vandalism, and malicious mischief, and such
other additional perils, hazards, and risks as now are or may be
included in the standard “all risk” form in general use in Riverside
County, California, with the standard form fire insurance coverage
in an amount equal to full actual replacement cost thereof, as the
same may change from time to time. City shall be a loss payee under
such policy or policies and such insurance shall contain a
replacement cost endorsement.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 12
12.2 Policy Requirements. A copy of each paid-up policy evidencing such
insurance (appropriately authenticated by the insurer) or a certificate of the insurer, certifying that
such policy has been issued, providing the coverage required herein, and containing the provisions
specified herein, shall be delivered to City on or prior to the date specified in Section 12 above,
and thereafter, upon renewals, not less than ten (10) days following the expiration of coverage.
City may, at any time, and from time to time, inspect and/or copy any and all insurance policies
required to be procured by Owner hereunder. In no event shall the limits of any policy be
considered as limiting the liability of Owner hereunder. In addition to the requirements set forth
in Section 12.1, each insurance policy required to be carried by Owner pursuant to this Agreement:
i. shall be primary insurance and not contributory with any other
insurance which City or its officers, officials, members, employees,
volunteers, agents, or representatives may have;
ii. shall contain no special limitations on the scope of protection
afforded to City or its officers, officials, members, employees,
volunteers, agents, and representatives;
iii. shall be “per occurrence” rather than “claims made” insurance;
iv. shall apply separately to each insured against whom claim is made
or suit is brought, except with respect to the limits of the insurer’s
liability;
v. to the extent commercially available on a reasonable basis, shall
provide that the policy will not be cancelled by the insurer or Owner
unless there is a minimum of thirty (30) days (10 days for
nonpayment of premium) prior written notice by certified mail,
return receipt requested to City;
vi. shall be written by a California approved insurer with a Best rating
of not less than A:VII;
vii. to the extent commercially available on a reasonable basis, shall be
endorsed to state that any failure to comply with the reporting
provisions of the policies shall not affect coverage provided to City
and its officers, officials, members, employees, volunteers, agents,
and representatives; and
viii. shall contain a waiver by the insurer of any right to subrogation
against City, and its officers, officials, members, employees,
volunteers, agents, and representatives which arises or might arise
by reason of any payment under such policy or policies or by reason
of any act or omission of City or its officers, officials, members,
employees, agents, or representatives.
13. Repair of Damage. If any improvements on the Property shall be totally or partially
destroyed or rendered wholly or partly uninhabitable by fire or other casualty, Owner shall
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 13
promptly proceed to obtain insurance proceeds and, provided the insurance proceeds are sufficient
to restore the Property and the insurance proceeds are made available therefor by the secured
lenders, take all steps necessary to begin reconstruction and, immediately upon receipt of insurance
proceeds, to promptly and diligently commence the repair or replacement of the improvements to
substantially the same condition as the improvements are required to be maintained pursuant to
the Density Bonus Agreement and this Agreement, and Owner shall complete the same as soon as
possible thereafter so that the Project can continue to be operated and occupied in accordance with
the Density Bonus Agreement and this Agreement. In no event shall the repair, replacement, or
restoration period exceed two years from the date of the destruction subject to events of force
majeure unless City, in its reasonable discretion, approves a longer period of time; provided
however, that to the extent there are delays caused by the City or any other governmental agency
in processing permits, inspections or any other City police power responsibilities, or there are
delays by the insurance company in processing and providing payment for a claim, each day of
delay shall extend the time period by one day in which Owner shall carry out its obligations
pursuant to this section. Nothing in this Section 13 is or shall be deemed to be a waiver or
delegation away of any of City’s police power and ability to enforce the law, policies, and
regulations enacted pursuant thereto, including but not limited to the City’s power and procedures
to issue permits, conduct inspections, or any other police power responsibility that applies to the
Property and Project.
14. Defaults and Remedies.
14.1 Defaults. Failure or delay by any Party to perform any term or provision of
this Agreement which is not cured within thirty (30) days after receipt of notice from the other
Party specifying the default (or such other period specifically provided herein) constitutes a default
under this Agreement; provided, however, if such default is of the nature requiring more than thirty
(30) days to cure, the defaulting Party shall avoid default hereunder by commencing to cure within
such thirty (30) day period, and thereafter diligently pursuing such cure to completion within an
additional sixty (60) days following the conclusion of such thirty (30) day period (for a total of
ninety (90) days). Except as required to protect against further damages, the injured Party may
not institute proceedings against the Party in default until the time for cure has expired. Failure or
delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time
of default.
14.2 Rights and Remedies are Cumulative. The rights and remedies of the
Parties are cumulative, and the exercise by either Party of one or more of its rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or remedies
for the same default or any other default by the other Party.
15. Miscellaneous.
15.1 Entire Agreement. This Agreement and the Density Bonus Agreement and
all of the exhibits and attachments thereto set forth and contain the entire understanding and
agreement of the Parties, and there are no oral or written representations, understandings or
ancillary covenants, undertakings or agreements which are not contained or expressly referred to
herein or therein. No testimony or evidence of any such representations, understandings or
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 14
covenants shall be admissible in any proceeding of any kind or nature to interpret or determine the
terms or conditions of this Agreement.
15.2 Attorneys’ Fees and Costs. If either Party to this Agreement commences an
action against the other Party to this Agreement arising out of or in connection with this
Agreement, the prevailing Party shall be entitled to recover reasonable attorneys’ fees, expert
witness fees, costs of investigation, and costs of suit from the losing Party.
15.3 Assignment and Transfer by Owner.
15.3.1 Prohibited Transfers or Assignments. The qualifications and
identity of Owner are of particular concern to City. It is because of those qualifications and identity
that City has entered into this Agreement. Except for the lease of a Rental Unit or the sale to a
homeowner of a condominium or single-family Residential Unit, Developer may sell, transfer, or
assign the Property or Project in whole or in part, or transfer or assign Developer’s rights and
obligations in this Agreement, solely in accordance with Section 7.1 of the Density Bonus
Agreement. Developer shall: (i) notify City in writing of the sale, transfer, or assignment of all or
any portion of the Property, Project, and/or this Agreement, and (ii) deliver to City an assignment
and assumption agreement (or other agreement) in a form approved by City and executed by
Developer and its transferee/assignee pursuant to which Developer’s transferee/assignee assumes
all of Developer’s covenants and obligations set forth herein with respect to the Property or the
portion thereof so transferred, and (iii) otherwise comply with the terms and conditions of Section
7.1 of the Density Bonus Agreement.
15.3.2 Release of Assigning Owner. Upon any sale, transfer, or assignment
that complies with the provisions of Section 15.3.1 above, City shall deliver to the
transferring/assigning Owner upon request a release in writing by City, which release shall be
provided by City upon the full satisfaction by such transferring/assigning Owner of the following
conditions:
i. Owner no longer has a legal or equitable interest in all or any part
of the Property or Project assigned;
ii. Owner is not then in default under this Agreement; and
iii. Owner has provided City with written evidence of the assignment
and assumption of the rights, duties and obligations arising under or
from this Agreement.
15.3.3 Subsequent Assignment. As used in this Agreement, the term
“Owner” shall be deemed to include any such transferee or assignee after the date such sale,
transfer, or assignment occurs in compliance with this Agreement.
15.3.4 Unpermitted Assignments Void. Any sale, transfer, or assignment
made in violation of this Agreement shall be null and void, and City shall have the right to pursue
any right or remedy at law or in equity to enforce the provisions of the restriction against
unpermitted sales, transfers, or assignments.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 15
15.4 Interpretation; Governing Law. This Agreement and any dispute arising
hereunder shall be governed and interpreted in accordance with the laws of the State of California
without regard to conflict of law principles. This Agreement shall be construed as a whole
according to its fair language and common meaning to achieve the objectives and purposes of the
Parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against
the drafting Party shall not be employed in interpreting this Agreement, all Parties having been
represented by counsel in the negotiation and preparation hereof.
15.5 Severability. If any term, provision, covenant or condition of this
Agreement shall be determined invalid, void or unenforceable, the remainder of this Agreement
shall not be affected thereby to the extent such remaining provisions are not rendered impractical
to perform, taking into consideration the purposes of this Agreement.
15.6 Third Party Beneficiaries. No person or entity, other than City and Owner,
shall have any right of action based upon any provision of this Agreement.
15.7 Notices.
15.7.1 Delivery. As used in this Agreement, “notice” includes, but is not
limited to, the communication of notice, request, demand, approval, statement, report, acceptance,
consent, waiver, appointment or other communication required or permitted hereunder. All notices
shall be in writing and shall be considered given either: (i) when delivered in person to the recipient
named below; or (ii) on the date of delivery shown on the return receipt, after deposit in the United
States mail in a sealed envelope as either registered or certified mail with return receipt requested,
and postage and postal charges prepaid, and addressed to the recipient named below; or (iii) two
(2) days after deposit in the United States mail in a sealed envelope, first class mail and postage
prepaid, and addressed to the recipient named below; or (iv) one (1) day after deposit with a known
and reliable next-day document delivery service (such as Fed Ex), charges prepaid and delivery
scheduled next-day to the recipient named below, provided that the sending party receives a
confirmation of delivery from the delivery service provider; or (v) the first business day following
the date of transmittal of any e-mail or facsimile, provided confirmation of successful transmittal
is retained by the sending Party. All notices shall be addressed as follows:
If to CITY: City of Lake Elsinore
130 S. Main Street
Lake Elsinore, CA 92530
Attn: City Manager
Copy to: Barbara Leibold
City Attorney
Leibold McClendon & Mann
9841 Irvine Center Drive, Suite 230
Irvine, CA 92618
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 16
If to OWNER: 3rd & Dexter, LLC
30767 Gateway Place
Unit 144
Rancho Mission Viejo, CA 92694
15.7.2 Change of Address. Either Party may, by notice given at any time,
require subsequent notices to be given to another person or entity, whether a party or an officer or
representative of a party, or to a different address, or both. Notices given before actual receipt of
notice of change shall not be invalidated by the change.
15.8 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this Agreement.
15.9 Singular and Plural. As used herein, the singular of any word includes the
plural, and vice versa, as context so dictates. Masculine, feminine, and neuter forms of any word
include the other as context so dictates.
15.10 Time of Essence. Time is of the essence in the performance of the
provisions of this Agreement as to which time is an element.
15.12 Joint and Several Obligations. If at any time during the term of this
Agreement, the Property and/or Project is owned, in whole or in part, by more than one Owner, all
obligations of such Owner under this Agreement shall be joint and several, and the default of any
such Owner shall be the default of all such Owners.
15.13 Computation of Days. Unless otherwise specified in this Agreement or any
attachment hereto, use of the term “days” shall mean calendar days. For purposes of this
Agreement and all attachments hereto, “business days” shall mean every day of the week except
Saturdays, Sundays, and official State holidays as recognized in Government Code
Section 19853(a) or successor statute.
15.14 Waiver. Failure by a Party to insist upon the strict performance of any of
the provisions of this Agreement by the other Party, or the failure by a Party to exercise its rights
upon the default of the other Party, shall not constitute a waiver of such Party’s right to insist and
demand strict compliance by the other Party with the terms of this Agreement thereafter.
15.15 Mutual Covenants. The covenants contained herein are mutual covenants
and also constitute conditions to the concurrent or subsequent performance by the Party benefited
thereby of the covenants to be performed hereunder by such benefited Party.
15.16 Successors in Interest. The burdens of this Agreement shall be binding
upon, and the benefits of this Agreement shall inure to, all permitted successors in interest to the
Property and Parties to this Agreement. All provisions of this Agreement shall be enforceable as
equitable servitudes and constitute covenants running with the land. Each covenant to do or refrain
from doing some act hereunder with regard to development and use of the Property: (a) is for the
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 17
benefit of and is a burden upon every portion of the Property; (b) runs with the Property and each
portion thereof; and (c) is binding upon each Party and each successor in interest approved
pursuant to this Agreement during ownership of the Property or any portion thereof.
15.17 Jurisdiction and Venue. Any action at law or in equity arising under this
Agreement or brought by a Party hereto for the purpose of enforcing, construing or determining
the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the
County of Riverside, State of California, and the Parties hereto waive all provisions of law
providing for the filing, removal or change of venue to any other court.
15.18 Further Actions and Instruments; City Manager Authority. Each of the
Parties shall cooperate with and provide reasonable assistance to the other to the extent
contemplated hereunder in the performance of all obligations under this Agreement and the
satisfaction of the conditions of this Agreement. Upon the request of either Party at any time, the
other Party shall promptly execute, with acknowledgment or affidavit if reasonably required, and
file or record such required instruments and writings and take any actions as may be reasonably
necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of
this Agreement or to evidence or consummate the transactions contemplated by this Agreement.
City hereby authorizes City Manager, on behalf of the City, to interpret and implement the terms
and conditions of this Agreement, to take such other actions as necessary and appropriate to
effectuate the terms and conditions of this Agreement, and to negotiate and execute any additional
documents, amendments, or agreements as may be necessary or proper to fulfill the City’s
obligations under this Agreement. The City Manager may delegate their powers and duties under
this Agreement to an authorized management level employee of the City.
15.19 Covenants Run with the Land. The Property shall be held, sold, conveyed,
hypothecated, encumbered, used, occupied and improved subject to the covenants, conditions, and
restrictions set forth herein. The covenants, conditions, restrictions, reservations, equitable
servitudes, liens and charges set forth in this Agreement shall run with the Property and shall be
binding upon Owner and all persons having any right, title or interest in the Property, or any part
thereof, their heirs, and successive owners and assigns, shall inure to the benefit of City and its
successors and assigns, and may be enforced by City and its successors and assigns. The covenants
established in this Agreement shall, without regard to technical classification and designation, be
binding for the benefit and in favor of City and its successors and assigns, and the parties hereto
expressly agree that this Agreement and the covenants herein shall run in favor of City, without
regard to whether City is or remains an owner of any land or interest therein to which such
covenants relate. However, all such covenants and restrictions shall be deemed to run in favor of
all real property owned by City which real property shall be deemed the benefited property of such
covenants and this Agreement shall create equitable servitudes and covenants appurtenant to all
real property owned by City and running with the Property in accordance with the provisions of
Civil Code Section 1468. Furthermore, all of the covenants, conditions, and restrictions contained
herein shall also constitute easements in gross running in favor of City. City is deemed the
beneficiary of the terms and provisions of this Agreement and of the covenants running with the
land, for and in its own right and for the purposes of protecting the interests of the community and
other parties, public or private, in whose favor and for whose benefit this Agreement and the
covenants running with the land have been provided. Owner hereby declares its understanding
and intent that the burden of the covenants set forth herein touch and concern the land and that the
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx 18
Owner’s interest in the Property is rendered less valuable thereby. Owner hereby further declares
its understanding and intent that the benefit of such covenants touch and concern the land by
enhancing and increasing the enjoyment and use of the Property by the citizens of City and by
furthering the health, safety, and welfare of the residents of City.
15.20 Restriction on Subordination. City’s approval of the necessary land use
entitlements that authorize Owner to develop, operate, and maintain the Project was based upon
Owner’s obligation to provide the Affordable Units pursuant to the State Density Bonus Law and
the terms and conditions of the Density Bonus Agreement and this Agreement. For the Density
Bonus Agreement Term, this Agreement and the Density Bonus Agreement shall have priority
over any and all mortgages, deeds of trust, and other similar forms of secured financing recorded
against the Property or any portion thereof, subject to the subordination provisions of Section 8.20
of the Density Bonus Agreement including but not limited to City’s obligation to reasonably
subordinate the Density Bonus Agreement and this Agreement to a reputable lender’s financing
instruments. Notwithstanding the foregoing, the exercise of any remedies shall not defeat the lien
of any deed of trust or regulatory agreement of any lender. Owner expressly understands and
acknowledges that state law requires preservation of affordability covenants in connection with
the approval of this density bonus project.
15.21 Authority to Execute. The person or persons executing this Agreement on
behalf of each Party represents and warrants that he/she/they have the authority to execute this
Agreement on behalf of his/her/their organization, corporation, partnership or other business
entity, and represents and warrants that he/she/they has/have the authority to bind the Party to the
performance of its obligations hereunder.
15.22 Force Majeure. Neither Party shall be deemed to be in default where failure
or delay in performance of any of its obligations under this Agreement is caused by floods,
earthquakes, fires, pandemic, public health emergency, wars, riots or similar hostilities, strikes and
other labor difficulties beyond the Party’s control, court actions (such as restraining orders or
injunctions), or other causes beyond the Party’s control, including delays by any governmental
entity (although the City may not benefit from this provision for a delay that results from City’s
failure to perform its obligations under this Agreement), or an insurance company of either party.
If any such events shall occur, the term of this Agreement and the time for performance by either
Party of any of its obligations hereunder may be extended by the written agreement of the Parties
for the period of time that such events prevented such performance.
15.23 Counterparts. This Agreement may be executed in two or more separate
counterparts, each of which, when so executed, shall be deemed to be an original. Such
counterparts shall, together, constitute and shall be one and the same instrument. The Parties
hereunder authorize each other to detach and combine original signature pages and consolidate
them into a single identical original. Any one of such completely executed counterparts shall be
sufficient proof of this Agreement.
[signatures on next page]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
IN WITNESS WHEREOF, City and Owner have caused this instrument to be executed on
their behalf by their respective officers or agents herein duly authorized as of the date set forth
above.
“CITY”
CITY OF LAKE ELSINORE, a California
municipal corporation
By:
Jason Simpson
Its: City Manager
APPROVED AS TO FORM:
By:
David H. Mann, Acting City Attorney
[SIGNATURE PAGE 1 OF 2 TO REGULATORY AGREEMENT]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
“OWNER”
3RD & DEXTER, LLC,
a Delaware limited liability company
By: ,
Name:
Title:
[SIGNATURE PAGE 2 OF 2 TO REGULATORY AGREEMENT]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public,
personally appeared ______________________________________, who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public,
personally appeared ______________________________________, who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity
upon behalf of which the person(s) acted, executed the instrument.
I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
ATTACHMENT NO. 1
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
ATTACHMENT 1
To Regulatory Agreement
LEGAL DESCRIPTION OF PROPERTY
The land referred to is situated in the County of Riverside, City of Lake Elsinore, State of
California, and is described as follows:
[to be inserted]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
ATTACHMENT NO. 2
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
ATTACHMENT 2
To Regulatory Agreement
MAP SHOWING PROPERTY AND LOCATION OF AFFORDABLE UNITS
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
ATTACHMENT NO. 3
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
ATTACHMENT 3
To Regulatory Agreement
INCOME CERTIFICATION FORM
[Attached]
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
ATTACHMENT NO. 3 1.
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
TENANT INCOME CERTIFICATION
Initial Certification Recertification Other _________
Effective Date: ____________________
Move-in Date: ____________________
(MM/DD/YYYY)
PART I - DEVELOPMENT DATA
Property Name: County: BIN #:
Address: Unit Number: # Bedrooms:
PART II. HOUSEHOLD COMPOSITION
HH
Mbr #
Last Name
First Name & Middle
Initial
Relationship to Head
of Household
Date of Birth
(MM/DD/YYYY) F/T Student
(Y or N)
Social Security
or Alien Reg. No.
1 HEAD
2
3
4
5
6
7
PART III. GROSS ANNUAL INCOME (USE ANNUAL AMOUNTS)
HH
Mbr #
(A)
Employment or Wages
(B)
Soc. Security/Pensions
(C)
Public Assistance
(D)
Other Income
TOTALS $ $ $ $
Add totals from (A) through (D), above TOTAL INCOME (E): $
PART IV. INCOME FROM ASSETS
Hshld
Mbr #
(F)
Type of Asset
(G)
C/I
(H)
Cash Value of Asset
(I)
Annual Income from Asset
TOTALS: $ $
Enter Column (H) Total Passbook Rate
If over $5000 $_____________ X 2.00% = (J) Imputed Income $
Enter the greater of the total of column I, or J: imputed income TOTAL INCOME FROM ASSETS (K) $
(L) Total Annual Household Income from all Sources [Add (E) + (K)] $
HOUSEHOLD CERTIFICATION & SIGNATURES
The information on this form will be used to determine maximum income eligibility. I/we have provided for each person(s) set forth in Part II acceptable verification of
current anticipated annual income. I/we agree to notify the landlord immediately upon any member of the household moving out of the unit or any new member moving in.
I/we agree to notify the landlord immediately upon any member becoming a full time student.
Under penalties of perjury, I/we certify that the information presented in this Certification is true and accurate to the best of my/our knowledge and belief. The undersigned
further understands that providing false representations herein constitutes an act of fraud. False, misleading or incomplete information may result in the termination of the
lease agreement.
Signature (Date) Signature (Date)
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
ATTACHMENT NO. 3 2.
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
PART V. DETERMINATION OF INCOME ELIGIBILITY
RECERTIFICATION ONLY:
TOTAL ANNUAL HOUSEHOLD INCOME
FROM ALL SOURCES:
From item (L) on page 1
$
Household Meets
Income Restriction
at:
Current Income Limit x 140%:
$
Current Income Limit per Family Size:
$
60% 50%
40% 30%
_____%
Household Income exceeds 140% at
recertification:
Yes No
Household Income at Move-in: $ Household Size at Move-in:
PART VI. RENT
Tenant Paid Rent
$
Rent Assistance: $____________
Utility Allowance $ Other non-optional charges: $____________
GROSS RENT FOR UNIT:
(Tenant paid rent plus Utility Allowance &
other non-optional charges)
$
Unit Meets Rent Restriction at:
60% 50% 40% 30% _____%
Maximum Rent Limit for this unit:
$
PART VII. STUDENT STATUS
*Student Explanation:
ARE ALL OCCUPANTS FULL TIME STUDENTS? If yes, Enter student explanation* 1 TANF assistance
(also attach documentation) 2 Job Training Program yes no 3 Single parent/dependent child
4 Married/joint return
Enter
1-4
PART VIII. PROGRAM TYPE
Mark the program(s) listed below (a. through e.) for which this household’s unit will be counted toward the property’s occupancy
requirements. Under each program marked, indicate the household’s income status as established by this certification/recertification.
a. Tax Credit
See Part V above.
b. HOME
Income Status
≤ 50% AMGI
≤ 60% AMGI
≤ 80% AMGI
OI**
c. Tax Exempt
Income Status
50% AMGI
60% AMGI
80% AMGI
OI**
d. AHDP
Income Status
50% AMGI
80% AMGI
OI**
e.
(Name of Program)
Income Status
__________
__________
OI**
** Upon recertification, household was determined over-income (OI) according to eligibility requirements of the program(s) marked above.
SIGNATURE OF OWNER/REPRESENTATIVE
Based on the representations herein and upon the proofs and documentation required to be submitted, the individual(s) named in Part II of this Tenant
Income Certification is/are eligible under the provisions of Section 42 of the Internal Revenue Code, as amended, and the Land Use Restriction
Agreement (if applicable), to live in a unit in this Project.
SIGNATURE OF OWNER/REPRESENTATIVE DATE
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
ATTACHMENT NO. 3 3.
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
INSTRUCTIONS FOR COMPLETING
TENANT INCOME CERTIFICATION
This form is to be completed by the owner or an authorized representative.
Part I - Development Data
Check the appropriate box for Initial Certification (move-in), Recertification (annual recertification), or Other. If Other, designate the
purpose of the recertification (i.e., a unit transfer, a change in household composition, or other state-required recertification).
Move-in Date Enter the date the tenant has or will take occupancy of the unit.
Effective Date Enter the effective date of the certification. For move-in, this should be the move-in
date. For annual recertification, this effective date should be no later than one year from
the effective date of the previous (re)certification.
Property Name Enter the name of the development.
County Enter the county (or equivalent) in which the building is located.
BIN # Enter the Building Identification Number (BIN) assigned to the building (from IRS Form
8609).
Address Enter the address of the building.
Unit Number Enter the unit number.
# Bedrooms Enter the number of bedrooms in the unit.
Part II - Household Composition
List all occupants of the unit. State each household member’s relationship to the head of household by using one of the following coded
definitions:
H - Head of Household S - Spouse
A - Adult co-tenant O - Other family member
C - Child F - Foster child(ren)/adult(s)
L - Live-in caretaker N - None of the above
Enter the date of birth, student status, and social security number or alien registration number for each occupant.
If there are more than 7 occupants, use an additional sheet of paper to list the remaining household
members and attach it to the certification.
Part III - Annual Income
See HUD Handbook 4350.3 for complete instructions on verifying and calculating income, including acceptable forms of verification.
From the third party verification forms obtained from each income source, enter the gross amount anticipated to be received for the
twelve months from the effective date of the (re)certification. Complete a separate line for each income-earning member. List the
respective household member number from Part II.
Column (A) Enter the annual amount of wages, salaries, tips, commissions, bonuses, and other income from
employment; distributed profits and/or net income from a business.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
ATTACHMENT NO. 3 4.
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
Column (B) Enter the annual amount of Social Security, Supplemental Security Income, pensions, military retirement,
etc.
Column (C) Enter the annual amount of income received from public assistance (i.e., TANF, general assistance,
disability, etc.).
Column (D) Enter the annual amount of alimony, child support, unemployment benefits, or any other income regularly
received by the household.
Row (E) Add the totals from columns (A) through (D), above. Enter this amount.
Part IV - Income from Assets
See HUD Handbook 4350.3 for complete instructions on verifying and calculating income from assets, including acceptable forms of
verification.
From the third party verification forms obtained from each asset source, list the gross amount anticipated to be received during the
twelve months from the effective date of the certification. List the respective household member number from Part II and complete a
separate line for each member.
Column (F) List the type of asset (i.e., checking account, savings account, etc.)
Column (G) Enter C (for current, if the family currently owns or holds the asset), or I (for imputed, if the family has
disposed of the asset for less than fair market value within two years of the effective date of
(re)certification).
Column (H) Enter the cash value of the respective asset.
Column (I) Enter the anticipated annual income from the asset (i.e., savings account balance multiplied by the annual
interest rate).
TOTALS Add the total of Column (H) and Column (I), respectively.
If the total in Column (H) is greater than $5,000, you must do an imputed calculation of asset income. Enter the Total Cash Value,
multiply by 2% and enter the amount in (J), Imputed Income.
Row (K)
Row (L)
Enter the greater of the total in Column (I) or (J)
Total Annual Household Income From all Sources Add (E) and (K) and enter the total
HOUSEHOLD CERTIFICATION AND SIGNATURES
After all verifications of income and/or assets have been received and calculated, each household member age 18 or older must sign and
date the Tenant Income Certification. For move-in, it is recommended that the Tenant Income Certification be signed no earlier than 5
days prior to the effective date of the certification.
Part V – Determination of Income Eligibility
Total Annual Household Income
from all Sources
Enter the number from item (L).
Current Income Limit per Family
Size
Enter the Current Move-in Income Limit for the household size.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
ATTACHMENT NO. 3 5.
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
Household income at move-in
Household size at move-in
For recertifications, only. Enter the household income from the move-in certification.
On the adjacent line, enter the number of household members from the move-in
certification.
Household Meets Income Restriction Check the appropriate box for the income restriction that the household meets according
to what is required by the set-aside(s) for the project.
Current Income Limit x 140% For recertifications only. Multiply the Current Maximum Move-in Income Limit by
140% and enter the total. Below, indicate whether the household income exceeds that
total. If the Gross Annual Income at recertification is greater than 140% of the current
income limit, then the available unit rule must be followed.
Part VI - Rent
Tenant Paid Rent Enter the amount the tenant pays toward rent (not including rent assistance payments
such as Section 8).
Rent Assistance Enter the amount of rent assistance, if any.
Utility Allowance Enter the utility allowance. If the owner pays all utilities, enter zero.
Other non-optional charges Enter the amount of non-optional charges, such as mandatory garage rent, storage
lockers, charges for services provided by the development, etc.
Gross Rent for Unit Enter the total of Tenant Paid Rent plus Utility Allowance and other non-optional
charges.
Maximum Rent Limit for this unit Enter the maximum allowable gross rent for the unit.
Unit Meets Rent Restriction at Check the appropriate rent restriction that the unit meets according to what is required
by the set-aside(s) for the project.
Part VII - Student Status
If all household members are full time* students, check “yes”. If at least one household member is not a full time student, check “no”.
If “yes” is checked, the appropriate exemption must be listed in the box to the right. If none of the exemptions apply, the household is
ineligible to rent the unit.
*Full time is determined by the school the student attends.
Part VIII – Program Type
Mark the program(s) for which this household’s unit will be counted toward the property’s occupancy requirements. Under each
program marked, indicate the household’s income status as established by this certification/recertification. If the property does not
participate in the HOME, Tax-Exempt Bond, Affordable Housing Disposition, or other housing program, leave those sections blank.
Tax Credit See Part V above.
HOME If the property participates in the HOME program and the unit this household will occupy will count towards the
HOME program set-asides, mark the appropriate box indicting the household’s designation.
Tax Exempt If the property participates in the Tax Exempt Bond program, mark the appropriate box indicating the household’s
designation.
AHDP If the property participates in the Affordable Housing Disposition Program (AHDP), and this household’s unit will
count towards the set-aside requirements, mark the appropriate box indicting the household’s designation.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C
ATTACHMENT NO. 3 6.
Dexter Villages Rental Density Bonus Reg Agt 121625.docx
Other If the property participates in any other affordable housing program, complete the information as appropriate.
SIGNATURE OF OWNER/REPRESENTATIVE
It is the responsibility of the owner or the owner’s representative to sign and date this document immediately following execution by
the resident(s).
The responsibility of documenting and determining eligibility (including completing and signing the Tenant Income Certification form)
and ensuring such documentation is kept in the tenant file is extremely important and should be conducted by someone well trained in
tax credit compliance.
These instructions should not be considered a complete guide on tax credit compliance. The
responsibility for compliance with federal program regulations lies with the owner of the building(s) for which
the credit is allowable.
Docusign Envelope ID: C334466F-0A6D-4E63-80A6-CB954E6A737C