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HomeMy WebLinkAboutResolution No 12-2022 - Authorizing Staff to Record Restrictive Covenants Required for the Performance of Lead Hazard Control Services1 RESOLUTION NO. 12-2022 A RESOLUTION OF THE BOARD OF PUBLIC WORKS OF THE CITY OF SOUTH BEND, INDIANA AUTHORIZING STAFF TO RECORD RESTRICTIVE COVENANTS REQUIRED FOR THE PERFORMANCE OF LEAD HAZARD CONTROL SERVICES WHEREAS, the City of South Bend, Indiana (the “City”), accepted grants for lead hazard reduction (the “Program”) from the Indiana Housing and Community Development Authority and the United States Department of Housing and Urban Development (“HUD”); and WHEREAS, the City executed certain grant documents and the Program is administered by the City’s Department of Community Investment (“DCI”); and WHEREAS, the grant documents require that the Program include a process by which units made lead-safe under the Program are marketed toward and priority given to families with children under six (6) years of age for a period of no less than three (3) years; and WHEREAS, the City’s process includes the execution and recordation of a Lien and Restrictive Covenant Agreement for Rental Property (“Agreement”), in substantially the same form as attached hereto as Exhibit A, which sets forth the requirements that must be met for the required three (3)-year period in exchange for participation in the Program; and WHEREAS, the Agreement applies only to rental properties and creates a duty for landlords participating in the Program to market and give priority in renting units to income- eligible families with children under the age of six (6) and documenting all efforts to comply; and WHEREAS, DCI anticipates that a number of such Agreements will be executed throughout the course of the Program; and WHEREAS, the Board of Public Works (the “Board”) exists pursuant to Indiana Code Section 36-4-9-5 and is the appropriate body to hold real estate interests of the City pursuant to Indiana Code Section 36-9-6-3; and WHEREAS, the Board desires to authorize the execution of such Agreements as needed and without additional presentation to the Board, provided that such Agreements are in substantially the same form as attached hereto. NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF PUBLIC WORKS OF THE CITY OF SOUTH BEND AS FOLLOWS: 1.The Board reaffirms its approval of the grant documents in furtherance of the Program. 2.The Board authorizes the President or Vice President and the Clerk of the Board to execute the Agreement on its behalf with regard to any rental property that is a part of the Program, provided that such Agreement is in substantially the same form as Exhibit A. 2 3.The Board further authorizes any staff member of the City’s Department of Community Investment to accept and present the executed Agreement for recordation and execute on the Board’s behalf any document or take on the Board’s behalf any action that may be required to complete the recordation of the Agreement and carry out the purposes of this Resolution. 3. This Resolution will be in full force and effect upon its adoption. ADOPTED at a meeting of the Board of Public Works of the City of South Bend, Indiana, held in person and electronically on March 8, 2022. March 8, 2022 3 EXHIBIT A Lien and Restrictive Covenant Agreement for Rental Property [See Attached] 1 HOLD FOR: AUDITORS RECORD: Department of Community Investment TRANSFER NO. City of South Bend, Indiana TAXING UNIT 227 W. Jefferson Blvd., 1400S DATE: South Bend, IN 46601 KEY NO. LIEN AND RESTRICTIVE COVENANT AGREEMENT FOR RENTAL PROPERTY LHR Program Award # This Lien and Restrictive Covenant Agreement (“Agreement”) is made by and between (“Owner(s)”), the Owner of certain real estate located at _____________________ (“address”), in St. Joseph County, Indiana, more particularly described on “Exhibit A” (“Real Estate”), and the undersigned, City of South Bend, Indiana, acting by and through its Board of Public Works (“Grantee”), as recipient of an award of funds from the United States Department of Housing and Urban Development (“HUD”). I.PURPOSE A.Grantee applied for and received an award from HUD to be used to promote lead-safe and healthy homes and to provide lead hazard control activities and healthy homes intervention measures (the "Program") for residents of qualified housing units (“Beneficiaries”). B.HUD funds were awarded to Grantee subject to certain rules, regulations, guidance and notices relating to the Program issued by HUD from time to time. C.In consideration of Owner(s) receiving assistance from Grantee in the amount of and 00/100 Dollars ($ _____. ) to remediate and rehabilitate, as applicable the Owner(s)’s housing located on the Real Estate (“Project”), which assistance is subject to the requirements of the Program, the Owner(s) also agree to comply with the requirements of the Program. D.For not less than three (3) years following the completion of lead hazard control activities, in every case, the Owner(s) shall give priority in renting units assisted under the Program to income eligible families that have a child under the age of six (6) years and document efforts to comply with this requirement., E.The Program requires that certain use restrictions be imposed upon property that is assisted with Program funds to ensure that the Program requirements are met. F.Specifically, HUD requires restrictive covenants be placed on the Real Estate at Project Completion and to remain in effect for a three (3) year period (“the Affordability Period”). G.The Affordability Period begins at project completion which begins after the following have occurred: (1) the completion of lead hazard control services, (2) the completion of the clearance examination, (3) clearance has been achieved, and (4) any findings or concerns have been resolved that the final inspection and clearance examination have been completed, clearance has been achieved, and any findings or concerns have been resolved. 2 II.AGREEMENT Grantee and Owner(s) hereby impose the following restrictive covenants upon the Real Estate, and Owner(s) hereby warrants, grants, and conveys to Grantee a lien upon the Real Estate for the Affordability Period as specified above (the “Lien”). In consideration of these mutual undertakings and covenants, the parties further agree as follows: 1.The Owner(s) shall comply with the following requirements of the Program throughout the Affordability Period: (1) marketing to and giving priority in renting units assisted under the Program to income eligible families with children under the age of six (6) years and (2) maintaining documentation of the Owner(s) efforts to comply with this requirement. 2.Upon the occurrence of any of the following events during the Affordability Period, the entire sum secured by the Lien, without interest, shall be due and payable by Owner(s) upon demand. Repayment may be demanded upon: a.Transfer or conveyance of the Real Estate by deed, land contract, lease, or otherwise, within the applicable Affordability Period; b.Commencement of foreclosure proceedings by any mortgagee (or deed in lieu of foreclosure), within the Affordability Period; or c.The Owner fails to comply with any of the requirements set forth in Subsection I of Section II of this Agreement. PROVIDED, HOWEVER, that the amount specified in Subsection C of Section I of the Agreement, shall not be due and payable if the Real Estate is transferred or conveyed to a new owner who agrees to continue to subject the Real Estate to the terms and provisions of this Agreement and agrees to take the Real Estate subject to this Agreement. 3.The Lien may be foreclosed and the restrictive covenants shall terminate on the date the Real Estate is acquired by foreclosure in accordance with the laws of the State of Indiana or instrument in lieu of foreclosure. 4.If any of the Recapture Events specified in Subsection 2 of Section II above or other non- compliance has occurred within the Affordability Period, the Grantee will recapture the amount set forth in Subsection C of Section I of the Agreement. 5.Owner(s) states and Grantee acknowledges that the financial assistance received through the Program represents good and valuable consideration for this Agreement and these restrictions on the use of the Real Estate are consistent with the statutes, regulations, terms, conditions, and requirements for the Program. 6.Notwithstanding anything to the contrary in this Agreement, Grantee and Owner(s) agree that the Lien is subject and subordinate to any Senior Debt, as defined below, in priority as to Grantee’s interest in the Real Estate and in payment of the Recapture Amount. As used in this Agreement, “Senior Debt” means any indebtedness of Owner(s) to any lender that has provided financing to Owner(s) for the purchase, construction, rehabilitation, or refinancing of the Real Estate prior to the date of this Agreement. This Agreement will not be subordinate to any debt incurred by Owner(s) after the effective date of this agreement, unless the new lender consents to the terms of this Agreement. If the Real Estate is transferred to the Senior Debt holder in lieu of foreclosure, or the mortgage securing the Senior Debt is foreclosed, the Lien is to be terminated and released. 7.This Agreement shall be binding upon the Real Estate and shall constitute covenants running with the land. Grantee and Owner(s) agree that any and all requirements of the laws of the State of Indiana which must be satisfied so that the provisions of this Agreement constitute valid and 3 binding deed restrictions and covenants running with the Real Estate shall be satisfied in full. Except as otherwise provided herein, the covenants and restrictions contained herein shall survive and be effective throughout the Affordability Period, regardless of whether any contract, deed or other instrument hereafter executed conveying the Real Estate or a portion thereof provides that such conveyance is subject to this Agreement. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, representatives, successors, and assigns. 8.In the event there is a breach or violation of the restrictions and covenants set forth herein during the Affordability Period, Grantee may bring an action at law or in equity in a court of competent jurisdiction to enforce the Lien and restrictions and covenants set forth herein against Owner or any subsequent owner in possession at the time of the breach or violation. In addition, Grantee may recover reasonable attorney’s fees and court costs incurred enforcing the Lien. This Lien and Restrictive Covenant Agreement is effective as of the day of , 20 . IN WITNESS WHEREOF, Owner and Grantee have caused this Agreement to be signed by duly authorized representatives, on the day and year first written above. OWNER: Signature Signature Printed Name Printed Name STATE OF INDIANA ) ) SS: COUNTY OF ST. JOSEPH ) Before me, the undersigned Notary Public, in and for said County and State, personally appeared this ____ day of ___________________, 20___, the above-named Owner(s) ___________________, who acknowledged the execution of the foregoing agreement to be his/her voluntary act and deed for the uses and purposes therein set forth. WITNESS, my hand and Notarial Seal. My Commission Expires: ___________________________, Notary Public 4 GRANTEE: City of South Bend, Indiana, by and through its Board of Public Works By: ________________________________________ Elizabeth A. Maradik, President ATTEST: By: _______________________________________ Anne Fuchs, Clerk STATE OF INDIANA ) ) SS: ST. JOSEPH COUNTY ) Before me, the undersigned, a Notary Public for and in said County and State this ____ day of _____________ 20_____ appeared Elizabeth A. Maradik and Anne Fuchs, known to me to be, respectively, President and Clerk of the City of South Bend, Indiana, Board of Public Works, the Grantee, and acknowledged the execution of the foregoing Lien and Restrictive Covenant Agreement for Rental Property, being authorized pursuant to Resolution No. _______________. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal. ___________________________, Notary Public Resident of _______________ County, _______ Commission expires: _____________ This instrument was prepared by Sandra L. Kennedy, Assistant City Attorney, City of South Bend, Indiana, 227 W. Jefferson Blvd. 1200S, South Bend, IN 46601. I affirm, under the penalties of perjury, that I have taken reasonable care to redact each Social Security number in this document, unless required by law. Sandra L. Kennedy 5 EXHIBIT A LEGAL DESCRIPTION BOARD OF PUBLIC WORKS AGENDA ITEM REVIEW REQUEST FORM Date 2/25/22 Name Liz Maradik Department DCI BPW Date 3/8/22 Phone Extension x5821 Review and Approval Required Prior to Submittal to Board Diversity Compliance and Inclusion Officer Officer Name BPW Attorney Attorney Name Clara McDaniels Dept. Attorney Attorney Name Sandi Kennedy, Purchasing Check the Appropriate Item Type – Required for All Submissions Professional Services Agreement Contract Proposal Open Market Contract Amendment/Addendum Special Purchase, QPA Bid Opening Bid Award Req. to Advertise Title Sheet Quote Opening Quote Award Reject Bids/Quotes Proposal Opening C/O & PCA No. PCA Chg. Order, No. Traffic Control Resolution Other: Ease./Encroach Required Information Company or Vendor Name New Vendor Yes If Yes, Approved by Purchasing No MBE/WBE Contractor MBE WBE Completed E-Verify Form Attached Yes No Project Name Project Number Funding Source Account No. Amount Terms of Contract Purpose/Description Authorizes staff to record liens related to the implementation of the Lead Hazard Reduction Demonstration Grant. _______________________________________________________________ _______________________________________________________________ For Change Orders Only Amount of Increase Decrease $ ($ ) Previous Amount $ Current Percent of Change: Increase Decrease % ( %) New Amount $ Total Percent of Change: Increase Decrease % ( %) Time Extension Amount: New Completion Date: