RESOLUTION 18-001 RE DEED OF TRUST.PDF

Requested By:
When Recorded Return to:
Maricopa County
Attn: Human Services Department
234 N. Central Ave., Ste. 300
Phoenix, AZ 85004
DEED OF TRUST
Effective Date: County and State where Real Property is
___, 2017 located:
Maricopa County, Arizona
TRUSTOR: BENEFICIARY:
Housing Authority of Maricopa County, Maricopa County
established pursuant to Title 36, Chapter 12,
Article I of the Arizona Revised Statutes
TRUSTEE:
TITLE COMPANY INFORMATION
Obligation Secured:
Project Property: Promissory Note Amount $450,000
Father Fideles Kuban Homes
9209 Calle Tomi
Guadalupe, AZ 85283
Subject Real Property: Trustor owns the property situated in Maricopa County, Arizona,
commonly known as Father Fideles Kuban Homes and further described in Exhibit A hereto (the
"Project Property"), incorporated by this reference. Trustor has all of the beneficial and equitable
interest in and is lawfully seized and possessed of the Project Property.
1. Conveyance. Trustor irrevocably grants and conveys to Trustee in trust, with power of
sale, the Project Property, subject to existing taxes, covenants, conditions, restrictions, rights of
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way and easements of record, to be held as security for the payment by Trustor of the Obligation
Secured as described on the cover page hereof, and for the performance of other obligations of
Trustor as set forth in this Deed of Trust.
2. Appurtenances. Trustor grants, together with the Project Property, all buildings and
improvements now or hereafter erected thereon and all fixtures attached to or used in connection
with the Project Property (including, without limiting the generality of the foregoing, all
ventilating, heating, air conditioning, refrigeration, plumbing and lighting fixtures), together with
all leases, rents, issues, profits or income therefrom (hereinafter “Property Income”), subject,
however, to the right power and authority hereinafter given to Beneficiary to collect and apply
such Property Income.
3. Obligation Secured. The obligations secured by this Deed of Trust are: the Contract for
Services Agreement executed by and between Trustor and Beneficiary and dated _________ (the
"HOME Agreement"); the Promissory Note dated of even date herewith in the original principal
amount of $450,000 made by Trustor in favor of Beneficiary ("Promissory Note"); and the
Declaration of Covenants, Conditions, and Restrictions of even date herewith executed by
Trustor in favor of Beneficiary in conjunction with this Deed of Trust ("Declaration"). The
HOME Agreement, Promissory Note and Declaration are collectively referred to herein as the
"Obligations Secured." Capitalized terms used herein and not otherwise defined have the same
meaning as the defined terms as set forth in the HOME Agreement.
4. Taxes, Assessments and Trust Expenses. Trustor shall pay, before delinquent, all taxes
and assessments affecting the Project Property, all encumbrances, charges and liens, when due,
with interest, on the Project Property or any part thereof, which appear to be prior or superior
hereto; all costs, fees and expenses of this trust and all lawful charges, costs and expenses of any
reinstatement of this Deed of Trust following a default.
5. Fire Insurance. Trustor shall, at Trustor’s expense, maintain in force fire and extended
coverage insurance in any amount of not less than the full replacement value of any buildings
which may exist on the Project Property with loss payable to Beneficiary. Trustor shall provide
fire insurance protection on its furniture, fixtures and other personal property on the Project
Property in an amount equal to the full insurable value thereof and promises that any insurance
coverage in this regard will contain a waiver of the insurer’s right of subrogation against
Beneficiary. The amount collected under any insurance policy may be applied to any
indebtedness hereby secured and in such order as the Beneficiary may determine, or at the option
of the Beneficiary the entire amount so collected or any part thereof may be released to Trustor.
Such application or release shall not cure or waive any default hereunder or cause discontinuance
of any action that may have been or may thereafter be taken by Beneficiary or Trustee because of
such default.
6. Liability Insurance. Trustor shall, at Trustor’s expense, maintain in force policies of
liability insurance, with Beneficiary as an additional insured thereunder, insuring Trustor against
any claims resulting from the injury to or the death of any person or the damage to or the
destruction of any property belonging to any person by reason of Beneficiary’s interest
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hereunder or the use and occupancy of Project Property by Trustor. Such insurance shall be in
the following amounts:
a. $2,000,000 against any claim resulting from injury to or the death of any one
person.
b. $4,000,000 against any claim resulting from injury to or deaths of any number of
persons from any one accident.
c. $2,000,000 against any claim resulting from the damage to or destruction of any
property belonging to any person.
7. Processing of Insurance Policies. Trustor shall promptly deliver to Beneficiary the
originals or true and exact copies of all insurance policies including flood insurance (if required)
by this Deed of Trust. Trustor shall not do or omit to do any act which will in any way impair or
invalidate any insurance policy required by this Deed of Trust. All insurance policies shall
contain a written obligation of the insurer to notify Beneficiary in writing at least 10 days prior to
any cancellation thereof.
8. Indemnification of Trustee and Beneficiary. Trustor shall hold Trustee and
Beneficiary, harmless from and indemnify them for any and all claims raised by any third party,
including but not limited to claims secured by any liens or encumbrances placed on the Project
Property, against Trustee or Beneficiary resulting from their interests hereunder or the acts of
Trustor except to the extent that any claim raised by a third party is the result of the gross
negligence or intentional misconduct of the Trustee or Beneficiary. Such indemnification shall
include reasonable attorneys’ fees and costs, including cost of evidence of title. Trustor shall
appear in, and defend, any action or proceeding purporting to affect the security hereof or the
rights or powers of the Trustee or Beneficiary; and shall pay all costs and expenses of Trustee or
Beneficiary, including costs of evidence of title and attorneys’ fees in a reasonable sum in such
action or proceeding which Trustee or Beneficiary may appear, and in suit brought by
Beneficiary to foreclose on this Deed of Trust.
9. Right of Beneficiary or Trustee to Pay Obligations of Trustor. If Trustor fails or
refuses to pay any sums due to be paid by it under the provisions of this Deed of Trust, or fails or
refuses to take any action as herein provided, then Beneficiary or Trustee shall have the right to
pay any such sum due to be paid by Trustor and to perform any act necessary. The amount of
such sums paid by Beneficiary or Trustee for the account of Trustor and the cost of any such
action, together with interest thereon at the maximum legal contractual rate per annum, from the
date of payment until satisfaction, shall be added to the Obligation Secured, unless otherwise
specified by Beneficiary at the time of such payment. The payment by Beneficiary or Trustee of
any such sums or the performance of any such action shall be prima facie evidence of the
necessity therefore.
10. Condemnation. Subject to the written requirements of any subordination agreement
executed by Beneficiary, any award of damages in connection with any condemnation or injury
to any of the Project Property by reason of public use or for damages for private trespass or
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injury thereto are assigned in full and shall be paid to Beneficiary, who shall apply them to the
payment of the principal of the Obligation Secured, the interest thereon, and any other charges
and amounts secured hereby in such manner as Beneficiary may elect. Any remaining balance
shall be paid to Trustor. Beneficiary may, at Beneficiary’s option, appeal from any such award
in the name of Trustor.
Unless Trustor and Beneficiary otherwise agree in writing, any application of such proceeds to
principal shall not extend or postpone the due dates of any installment payments of the
Obligation Secured or change the amount of such payments.
11. Care of Property. Trustor shall take reasonable care of the Project Property and the
buildings thereon and shall adequately maintain the Project Property in good repair and condition
as at the original date of this Deed of Trust, ordinary depreciation excepted. Trustor shall
commit or permit no waste and do no act which will unduly impair or depreciate the value of the
Project Property. For purposes of this section, adequate maintenance includes (a) removal of
debris, salvage, junk cars, trash in and/or around the Project Property; (b) ongoing maintenance
of landscaping of premises; and (c) compliance with “good faith effort” to maintain and clean
interior and exterior of structure in compliance with 24 CFR 92.251 (f), Minimum Property
Standards. If the Trustor fails to so care for the Project Property, then Beneficiary, at its option,
may make or contract for the necessary repairs or remediation necessary to restore the Project
Property and, the Trustor shall, at the option of the Beneficiary, reimburse Beneficiary for the
reasonable cost of such repairs and remediation, or execute a promissory note for the amount of
repairs and remediation secured by a deed of trust in favor of Beneficiary or the Beneficiary may
add the cost thereof to the Obligation Secured.
12. Right to Inspect Project Property. At all convenient and reasonable times, upon prior
notice to Trustor, Beneficiary or Trustee shall have the right and license to go on and into the
Project Property to inspect it in order to determine whether the provisions of the Obligations
Secured are being kept and performed. The Trustor agrees and understands that periodic site
inspections will be made by Beneficiary.
13. Energy Efficient Appliances. Any energy efficient appliances (clothes washers, dryers,
and dishwashers) purchased with HOME funds, shall remain in the home for the full Period of
Affordability, subject to dispensation from Maricopa County Human Services Department
Community Development Division.
14. Event of Default. Each of the following shall be considered an event of default ("Event
of Default") of this Deed of Trust:
a. The occurrence of an event of default or breach of any provision of the
Promissory Note or any other term of this Deed of Trust after written notice to Trustor
and an opportunity to cure such default or breach, or failure of Trustor to pay on demand
by Beneficiary any amount for which demand is made on Beneficiary by the U.S.
Department of Housing and Urban Development arising from the failure by Trustor of
the Project Property to comply with the HOME Program as set forth in 24 CFR 92 and is
not caused, partially or otherwise by the Trustee or Beneficiary.
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b. The failure of Trustor to perform any duty or obligation required by the
Obligations Secured and such failure continues after applicable cure periods;
c. The removal or attempted removal by Trustor of any property included in the
Project Property without the consent of Beneficiary;
d. The failure of Trustor to maintain the Project Property in accordance with
paragraph 11 above and such failure continues after applicable cure periods;
e. Abandonment of the Project Property by Trustor;
f. The filing, execution or occurrence of:
(1) A petition in bankruptcy by or against Trustor which is not dismissed within
one hundred twenty (120) days.
(2) A petition or answer seeking a reorganization, composition, readjustment,
liquidation, dissolution or other relief of the same or different kind under any
provision of the Bankruptcy Act which is not dismissed within one hundred
twenty (120) days.
(3) Adjudication of Trustor as a bankrupt or insolvent, or insolvency in the
bankruptcy equity sense.
(4) An assignment by Trustor for the benefit of creditors, whether by trust,
mortgage or otherwise.
(5) A petition or other proceedings by or against Trustor for the appointment of a
trustee, receiver, guardian, conservator or liquidator of Trustor with respect to
all or substantially all its property which petition is not dismissed within one
hundred twenty (120) days.
(6) Trustor’s dissolution or liquidation or the taking of possession of Trustor’s
property by any governmental authority in connection with dissolution or
liquidation.
g. A reasonable determination by Beneficiary that the security of the Deed of Trust
is inadequate or in danger of being impaired or threatened from any cause whatsoever.
h. The sale, conveyance, transfer or attempted conveyance or transfer, or subjection
to a mortgage or deed of trust, whether voluntary, involuntary or by operation of law, of
the Project Property or any interest in it, without prior written consent of Beneficiary
which consent will not be unreasonably withheld, conditioned or delayed.
Notwithstanding the forgoing, Beneficiary expressly agrees that any refinance of
indebtedness on the Property to which this Note and Deed of Trust are subordinate does
not constitute a default so long as such refinancing is conducted for the sole purpose of
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loss mitigation or foreclosure prevention. Any refinance activity regarding indebtedness
on the Property for purposes of “cashing out,” equity or that is otherwise not for the
purpose of loss mitigation, foreclosure prevention, or retention of the property is hereby
deemed to constitute a default of the Note and Deed of Trust during the 180 month
duration of the Note.
i. Notwithstanding anything to the contrary in the Obligations Secured and Deed of
Trust, the following shall not constitute a default under the Obligations secured (a) the
sale, transfer, conveyance or pledge of any membership interest in an investor member, if
any, and (b) any amendment to an Operating Agreement which does not affect the
financial terms of the Operating Agreement, and does not otherwise adversely affect the
security interest of Beneficiary in the Property or Declaration.
15. Cure Rights.
a. Beneficiary shall give Trustor and any other person identified in paragraph 25
below, simultaneous written notice of any monetary Event of Default occurring under the
terms of the Promissory Note prior to exercising any remedies thereunder. Trustor shall
have a period of thirty (30) business days after receipt of such notice, or such longer
period of time as may be set forth in the Promissory Note, to cure the default prior to
exercise of remedies under the Promissory Note or this Deed of Trust.
b. Beneficiary shall give Trustor and any other person identified in paragraph 25
below, simultaneous written notice of any non-monetary default or Event of Default
occurring under the term of the Obligations Secured, prior to exercising any remedies.
Such non-monetary default or Event of Default shall not remain uncured for more than
one hundred twenty (120) calendar days. If Beneficiary determines that Trustor has taken
and diligently, continually and in good faith continues corrective action and that the non-
monetary default or Event of Default cannot be corrected within the 120-day cure period,
Beneficiary may, in its sole discretion, allow Trustor such additional time as may be
reasonably necessary to cure the non-monetary default or Event of Default before
Beneficiary exercises any remedies.
c. Beneficiary agrees that any cure of any Event of Default described in the
Obligations Secured by any person identified in paragraph 25 below, shall be deemed to
be cure by Trustor and shall be accepted or rejected on the same basis as if made by
Trustor.
16. Acceleration. In the event of default by Trustor, Beneficiary may declare all sums
secured hereby immediately due and payable by delivery to Trustee of written notice setting
forth the nature thereof and of Beneficiary’s election to cause the Project Property to be sold
under this Deed of Trust. Beneficiary shall also deposit with Trustee all documents evidencing
the Obligation Secured and any expenditures secured hereby.
17. Trustee’s Sale. Upon receipt of Beneficiary’s notice of election to cause the Project
Property to be sold, Trustee shall, in accordance with all provisions of law, give Trustor notice of
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trustee’s sale and, after the lapse of the required amount of time, sell the Project Property at
public auction, at the time and place specified in the Notice of Trustee’s Sale, to the highest
bidder of cash in lawful money of the United States, payable at the time of sale. Any persons,
including Trustor, Trustee or Beneficiary may purchase at the Trustee’s Sale. Trustee may
postpone or continue the sale by giving notice of postponement or continuance by public
declaration at the time and place last appointed for sale. Upon sale, Trustee shall deliver to the
purchaser a Trustee’s Deed conveying the Project Property, but without any covenant or
warranty, expressed or implied.
18. Proceeds of Trustee’s Sale. After deducting all costs, fees and expenses of Trustee and
of this trust, including the cost of evidence of title in connection with the sale and reasonable
attorney’s fees, Trustee shall apply the proceeds of sale to payment of all sums then secured
hereby and all other sums due under the terms hereof, with accrued interest, and the remainder, if
any, to the persons legally entitled thereto or as provided by ARS §33-812 as currently codified
or as amended.
19. Defaults on Prior Encumbrances. If there are mortgages upon the Project Property or
other encumbrances which are prior in time or prior in right, then Trustor promises to comply
with the terms of those prior mortgages or encumbrances. If Trustor fails to comply with such
terms and defaults on those mortgages or obligations, such default shall also be considered a
default of this Deed of Trust, and Trustee or Beneficiary herein may advance the monies
necessary to remedy such defaults, and, if it does, such monies shall be added to the Obligation
Secured and shall bear the maximum contractual legal rate of interest from the date monies are
tendered unless otherwise specified by Beneficiary at the time of such payment. Beneficiary may
also proceed on this default by exercising the same remedies it has on this Deed of Trust.
20. Foreclosure and Other Remedies. In lieu of sale pursuant to the power of sale
conferred hereby, this Deed of Trust may be foreclosed in the same manner provided by law for
the foreclosure of mortgages on real property. Beneficiary shall also have all other rights and
remedies available hereunder and at law or in equity. All rights and remedies shall be
cumulative.
21. Reinstatement After Default. Notwithstanding Beneficiary’s acceleration of sums
secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by
Beneficiary to enforce this Deed Trust discontinued and to have the Deed of Trust reinstated at
any time before the day of the Trustee’s Sale or before the filing of a foreclosure action. In order
to have the Deed of Trust reinstated after default, the Trustor must:
a. Pay to Beneficiary the entire amount due under this Deed of Trust and the
Obligation Secured, other than such portion of the principal as would not be due had no
default occurred;
b. Cure all defaults or covenants or agreements of Trustor regarding the HOME
Agreement as contained in this Deed of Trust;
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c. Pay costs and expenses incurred by Beneficiary and Trustee in enforcing the
terms of this Deed of Trust and pursuing remedies;
d. Pay reasonable attorney’s fees actually incurred by Beneficiary and Trustee;
e. Pay the recording fee for any cancellation of notice of sale; and
f. Pay the Trustee’s fees, in an amount not to exceed $600 or one half of one per
cent of the entire unpaid principal sum secured, whichever is greater.
Upon reinstatement, this Deed of Trust and the obligation secured hereby shall remain in full
force and effect as if no acceleration had occurred.
22. Assignment of Property Income, Right of Entry and Appointment of Receiver. As
additional security, Trustor hereby gives Beneficiary the right, power and authority, during the
continuance of this Trust, to collect the Property Income, reserving to Trustor the right, prior to
any Event of Default by Trustor in payment of any indebtedness secured hereby or in
performance of any agreement hereunder, to collect and retain such Property Income as it
becomes due and payable.
Upon any such uncured Event of Default and subject to the interest of the superior lien holders
identified in Exhibit A to the Promissory Note, Beneficiary may at any time, with notice, either
in person, by agent or by a receiver to be appointed by a court, and without regard to the
adequacy of any security for the indebtedness hereby secured, enter upon and take possession of
the Property Income; in its own name sue for or otherwise collect such Property Income,
including amounts past due and unpaid; and apply the same, less costs and expenses of operation
and collection, including reasonable attorney’s fees, upon any indebtedness secured hereby, or as
otherwise appropriate to preserve Beneficiary’s security interest and ensure compliance with the
HOME Program, Department Guidance, and Federal Guidance (as those terms are defined in the
Promissory Note); and in such order as Beneficiary may determine.
The entering upon and taking possession of the Property Income, the collection of such Property
Income and the application thereof, shall not cure or waive any default or notice of Trustee’s
Sale hereunder or invalidate any act done pursuant to such notice.
23. Acts of Trustee Affecting Project Property. At any time, with notice, upon written
request of Beneficiary and presentation of this Deed of Trust and the Obligation Secured for
endorsement, Trustee may, without liability, release and reconvey all or any part of the Project
Property, consent to the making and recording, or either, of any map or plat of all or any part of
the Project Property; join in granting any easement thereon; join in or consent to any extension
agreement or any agreement subordinating the lien, encumbrance or charge hereof.
Any such action by Trustee may be taken without affecting the personal liability of any person
for payment of the indebtedness secured hereby, without affecting the security hereof for the full
amount secured hereby on all property remaining subject hereto, and without the necessity that
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any sum representing the value or any portion thereof of the property affected by Trustee’s
action be credited on the indebtedness.
24. Satisfaction of the Obligation. If Trustee receives full payment of the Obligation
Secured in the amount secured or at the Maturity Date of the Promissory Note, whichever is
earlier, at the request of Trustor, Beneficiary or Trustee shall acknowledge satisfaction of the
Deed of Trust by recording and delivering to Trustor a Satisfaction or Release of Realty Deed of
Trust in accordance with A.R.S. § 33-712. However, the Declaration of Covenants, Conditions
and Restrictions recorded against the Project property shall remain in full force and in effect for
the entire duration of its term.
25. Notices. Copies of all notices and communications concerning this Deed of Trust shall be
mailed to the Parties at the addresses specified in this Deed of Trust. Any change of address
shall be communicated to the other Parties in writing. Any documents which may adversely
affect the rights of any party to this Deed of Trust shall be dispatched by Certified Mail, Return
Receipt Requested. A copy of all foregoing notices and communications shall be mailed to:
AHP Housing Fund 106, LLC, 1999 Avenue of the Stars, Suite 3425, Los Angeles, California
90067-4657, Attention: Michael L. Fowler.
26. Headings. The marginal or topical headings of the provisions herein are for convenience
only and do not define, limit or construe the contents of these provisions.
27. Interpretation. In this Deed of Trust, whenever the context so requires, masculine
gender includes the feminine and neuter, and the singular includes the plural and vice versa.
28. Applicable Law. This Deed of Trust shall be subject to and governed by the laws of the
State of Arizona, in particular the provisions of ARS Title 33, Chapter 6.1, regardless of the fact
that one or more Parties now is or may become a resident of a different state.
29. Nonwaiver. The failure of the Beneficiary at any time to require performance of any
provision or to resort to any remedy provided under this Agreement, or the Beneficiary’s
agreement to provide accommodation outside the terms of this Agreement, shall in no way affect
the right of the Beneficiary to require contract performance or to resort to a remedy at any time,
or to refuse to make accommodation thereafter, nor shall the waiver by any party of a breach be
deemed to be a waiver of any subsequent breach. A waiver shall not be effective unless it is in
writing and signed by the party against whom the waiver is being enforced. No course of dealing
or any failure to exercise, nor any delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.
30. Succession of Benefits. The provisions of this Deed of Trust shall inure to the benefit of
and be binding upon the Parties hereto, their heirs, personal representatives, conservators and
permitted assigns.
31. Successor Trustee. Beneficiary may appoint a Successor Trustee in the manner
prescribed by law. A Successor Trustee herein shall, without conveyance from the predecessor
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Trustee, succeed to all the predecessor’s title, estate, rights, powers and duties. Trustee may
resign by mailing or delivering notice thereof to Beneficiary and Trustor.
32. Entire Agreement. The terms of this Deed of Trust, the Obligations Secured and
attached Exhibit A executed this date constitute the entire agreement among the Parties and the
Parties represent that there are no collateral or side agreements not otherwise provided for within
the terms of this Deed of Trust.
33. Time of Essence. Time is of the essence in this Deed of Trust and every term, condition,
covenant and provision hereof.
34. Modification. No modification of this Deed of Trust shall be binding unless evidenced
by an agreement in writing and signed by all Parties.
35. Partial Invalidity. If any provision of this Deed of Trust is held to be invalid or
unenforceable all the remaining provisions shall nevertheless continue in full force and effect.
36. Encumbrances. In the event all of any part of the Project Property or any interest in it is
sold, conveyed or encumbered without the prior written consent of the Beneficiary, such consent
not to be unreasonably withheld, all obligations secured by this Deed of Trust shall become due
and payable immediately upon notice to the Trustee by the Beneficiary.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
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TRUSTOR:
By: ______________________________________
Gloria Munoz, Executive Director
Address: 8910 N. 78th Ave.
Peoria, AZ 85345
COUNTY:
Maricopa County
By:_______________________________________
Denny Barney, Chairman Date
Attested to:
By _______________________________________
Clerk of the Board Date
Approved as to form:
By: _____________________________________
Deputy County Attorney Date
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IN WITNESS HEREOF, the parties have hereunto set their hands.
TRUSTOR:
STATE OF ARIZONA )
) ss.
County of Maricopa )
Before me, the undersigned Notary Public, this day of , 2017;
, personally appeared,
avowing to be the TRUSTOR and executed the foregoing instrument for the purposes therein
contained by signing his/her/their names hereto.
Notary Public:
My Commission Expires:
BENEFICIARY:
Maricopa County Chairperson of the Board
STATE OF ARIZONA )
) ss.
County of Maricopa )
Before me, the undersigned Notary Public, this day of ,;
, personally appeared,
avowing to be the ________________________ and executed the foregoing instrument for the
purposes therein contained by signing his/her/their names hereto.
Notary Public:
My Commission Expires:
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