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1996-1218_ESTATES AT SAN JUAN CAPISTRANO HOA_AgreementRECORDING REQUESTED BY: Recorded in the County of Orange, California CITY OF SAN JUAN CAPISTRANO Gary L. Granville Clerk/Recorder 12, 00 006 ,55355,5 119980362119 10;29am 06/10/98 WHEN RECORDED MAIL TO: City Clerk q 1 p 23 6.00 66.00 0 . 00 0 . 00 0 . 55 5 pp City of San .Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Space above this line for Recorder's use only AGREEMENT ESTABLISHING SLOPE DISPLACEMENT WARRANTY PROGRAM This Agreement Establishing Slope Displacement Warranty Program ("Agreement") is entered into as of December 18, 1996, by and among ESTATES AT SAN JUAN CAPISTRANO,L.P., a California limited partnership ("Developer"), ESTATES AT SAN JUAN CAPISTRANO HOMEOWNERS ASSOCIATION ("Association") and the CITY OF SAN JUAN CAPISTRANO ("City"), and pertains to that certain real property more particularly described on Exhibit "A" attached hereto and incorporated herein by this reference ("Property"). B E C I I B L a This Agreement is made with reference to the following facts: A. Developer is in the process of developing the Property as a residential project including open space lots ("Project"), in the City of San Juan Capistrano. B. On September 15, 1987, the City Council ("Council") of the City passed, approved and adopted Ordinance No. 605 ("Basic Ordinance"), requiring that certain residential developments in the City include a slope displacement warranty program. C. On June 18, 1991 the Council passed, approved and adopted Resolution No. 91-6-18-4 ("Original Resolution"), approving vesting Tentative Tract Map No. 13726 and certain other matters. Developer has been required by the City to implement a Soils Warranty Program ("Slope Displacement Warranty Program") with respect to Tract No. 13726. 068/022154-0010/2131149.8 a04/10/98 • 0 D. The Association is a California non-profit mutual benefit corporation which will own the common area lots within the Project and will serve as the homeowners' association for Tract No. 13726. E. By this Agreement, Developer satisfies in full (i) all conditions of subdivision approval relating to the Slope Displacement Warranty Program, (ii) all requirements of the Basic Ordinance, and (iii) all conditions and requirements of the City in any way relating to any soils subsidence remediation programs at any time implemented by the City. AGREEMENT Defined terms whose initial letters are capitalized herein shall have the meanings given to such terms as set forth in this Agreement, including on Exhibit "B" attached hereto. ..- 1.1 Slope Displacement Warranty Program and Term. Developer's subdivision approvals for Tract 13726 require that Developer's Project include a "Slope Displacement Warranty Program". This Agreement sets forth the above referenced Slope Displacement Warranty Program. The term or period of the Slope Displacement Warranty Program shall be for a period of ten (10) years after the date of the final grading approval for Tract 13726 ("Slope Displacement Warranty Period"). 1.2 Developer Liability Period. During Developer's Liability Period only, Developer shall make or cause to be made, at Developer's expense, all Covered Repairs necessitated by Slope Displacements of the nature referred to herein as Catastrophic Slope Displacements and/or Surficial Slope Displacements. 1.3 Liability for Certain Catastronhic Slope 12isplacements. If a Catastrophic Slope Displacement occurs during the portion of the Slope Displacement Warranty Period following expiration of the Developer's Liability Period, the Association shall make or cause to be made the Covered Repairs necessitated by such Catastrophic Slope Displacement. In the 068/022154-0010/2131149.8 a04/10/98 -2- 0 0 event the GRAD elects to make or cause such Covered Repairs to be made, the GRAD and not the Association shall make or cause such Covered Repairs to be made, and the GHAD shall bear the entire cost of the Covered Repairs necessitated by such Catastrophic Slope Displacement. The cost of Covered Repairs paid by either the Association or the GHAD shall be subject to the right to assert claims against responsible persons or entities as and to the extent provided for in Section 1.5 hereof. 1.4 Liability for Certain S=fir.ial S1ni)e nioulacements. If a Surficial Slope Displacement occurs at any time after the expiration of the Developer Liability Period, the Association shall make or cause to be made, all Covered Repairs necessitated by such Surficial Slope Displacement, at the Association's expense subject to the right to assert claims against responsible persons or entities as and to the extent provided for in Section 1.5 hereof. 1.5 Reserved Rights. Developer, the GHAD as such term is defined in Section 1.6 below and the Association reserve the right to assert claims against any person or entity responsible in whole or in part, by reason of negligence or wilful misconduct of the person or entity against whom the claim is asserted, for displacement of soil on the slopes, whether covered by the Slope Displacement definition or not, including without limitation claims against one another. These reserved rights are subject to all applicable statutes of limitation, including without limitation the ten (10) year limitations period provided by Section 337.15 of the California Code of Civil Procedure. 1.6 GHAD Formation. As a requirement of the City, as soon as practicably possible after full execution and delivery of this Agreement, Developer shall use reasonable and diligent efforts to cause a Geologic Hazard Assessment District (FIGHAD") to be created as authorized under Section 26500, et seq. of the California Public Resources Code. The GHAD boundary shall encompass the boundaries of the Property and the GHAD shall be activated upon occurrence of a Catastrophic Slope Displacement. The City shall cooperate to the fullest extent reasonably and legally possible in order to expedite prompt formation of the GRAD at the time herein contemplated and also to expedite its prompt activation upon the occurrence of a Catastrophic Slope Displacement. Further, if permitted by the California Department of Real Estate ("DRE"), all final subdivision public 068(022154-0010/2131149.8 a04/10/99 -3- reports for the Project as issued by the DRE shall contain a disclosure as to the nature and existence of the GRAD. The form of grant deed used in conveying residential lots within the Project to third parties shall contain a statement disclosing the formation and existence of the GRAD. It is understood and agreed that Declarant makes no warranty or representation as to the efficacy of the GRAD or its use for the purposes for which it is intended as expressed in this Agreement. During the Developers Liability Period, the Slope Displacement Warranty Program shall be administered by the Developer and thereafter said program shall be administered by the Association. In the event any party receives notice of a claim that a Slope Displacement has occurred, such party shall give all other parties (and the GRAD if it has requested such notice and provided its address to the parties to this Agreement) written notice of such claim setting forth the name and address of the claimant and the nature and extent of the claim to the extent such information is available. Within fifteen (15) days after receipt of any such notice, the person or entity then administering the Slope Displacement Warranty Program shall select an independent and reputable claims adjusting service, geologist and/or soils engineer (duly licensed to the extent required) with experience in handling soils and slope displacement matters (referred to herein as a "Claims Adjuster"). Any Claims Adjuster so selected shall be subject to approval by the other parties to this Agreement, which approval shall not be unreasonably withheld, delayed or conditioned. Any disapproval of the selected Claims Adjuster shall be given in writing to the then administrator of the Slope Displacement Warranty Program and to the other parties to this Agreement within ten (10) days following receipt by the disapproving party of written notice of the selection of the proposed Claims Adjuster. If such written disapproval or a written approval are not given within said ten (10) day period, then approval of the proposed Claims Adjuster shall be deemed to have been timely and properly given. If the proposed Claims Adjuster is properly and time disapproved as contemplated above, then the selection of the Claims Adjuster shall be made by an arbitrator in connection with an arbitration conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association as then in effect. Any such arbitration shall be held and conducted in Orange County, California before one arbitrator who shall be selected by mutual agreement of the parties to this Agreement within fifteen (15) days after any party to this Agreement has notified the other parties that it has commenced or desires to 068/022154-0010/2131149.8 a04/10/99 -4- • 0 commence an arbitration proceeding for the purpose of selecting a Claims Adjuster. If the parties to the Agreement cannot or do not mutually agree upon an arbitrator within the said fifteen (15) day period, then any party to this Agreement may thereafter request in writing that the presiding Judge of the Superior Court of Orange County, California select and appoint the arbitrator, and any person so selected and appointed by such Judge shall serve as the arbitrator hereunder upon his/her acceptance of such appointment. The arbitrator appointed must be independent and have experience in dealing with soils and slope displacement matters. Final decision by the arbitrator must be made within ninety (90) days from the date the arbitrator is appointed. The parties to this Agreement may submit the names and resumes of proposed Claims Adjusters to the arbitrator, but the arbitrator shall be free to select any Claims Adjuster he or she wishes to select so long as the Claims Adjuster is independent, duly licensed to the extent required,and has experience in handling soils and slope displacement matters. Each party to this Agreement shall bear its own attorneys' fees, costs and expenses incurred in connection with the arbitration. The costs and fees of the arbitrator shall be borne equally by the parties to this Agreement. The decision of the arbitrator in selecting a Claims Adjuster shall be final and judgment may be entered on it in accordance with applicable law in any court having jurisdiction over the matter. The Claims Adjuster selected by the arbitrator as aforesaid shall be deemed the "approved" Claims Adjuster. The approved Claims Adjuster shall be promptly engaged by the party then administering the Soils Displacement Warranty Program, and the Claims Adjuster so engaged shall be responsible for promptly investigating, allocating responsibility for and adjusting all claims which allege that a Slope Displacement has occurred that is within the coverage of the Slope Displacement Warranty Program. After reasonably appropriate investigation and analysis, the approved Claims Adjuster shall determine, among other things: (a) whether the claim is covered by the Slope Displacement Warranty Program and if so then the scope and estimated cost of the Covered Repairs, (b) who has responsibility under this Agreement for actually performing the Covered Repairs or causing them to be performed, and (c) who has under this Agreement the financial responsibility for the requisite Covered Repairs. The person or entity having the ultimate financial responsibility for the Covered Repairs under this Agreement shall also bear the cost of the Claims Adjuster and all investigation costs reasonably incurred by the Claims Adjuster. The Claims Adjuster shall complete his/its analysis as soon as reasonably possible and 068/022154-0010/2131149.8 a04/10/98 - 5 - 0 shall thereupon issue a written report to all of the parties to this Agreement (and to the GHAD if it has requested such notice and provided its address to the parties hereto), which written report shall set forth its findings on the issues referred to above and such other matters as the Claims Adjuster deems appropriate. The parties agree that they shall promptly comply with the decisions and findings of the Claims Adjuster as set forth in such report. The parties intend that the decisions and findings of the Claims Adjuster shall be deemed binding upon them and shall be enforceable against them by a court of competent jurisdiction and any party failing to comply with such decisions and findings of the Claims Adjuster as they affect such party shall be liable for damages and all other relief as may be determined appropriate by a court of competent jurisdiction. - •. A party shall only be deemed in default under this Agreement if such party fails to perform any of its duties or obligations under this Agreement and such failure is not cured within thirty (30) days after written notice of such failure has been given to such party. If such failure cannot reasonably be cured within thirty (30) days after the giving of such notice, then said party shall not be deemed in default under this Agreement if such party commences to cure the failure within said thirty (30) day period and thereafter diligently and in good faith continues to prosecute such curative action to completion. The notice of failure referred to in this Section 3 above shall specify the alleged failure in detail. 4.1 Cash or Bond. Developer will, as soon as practically possible following full execution and delivery of this Agreement, provide the Association with the sum of One Hundred Ten Thousand Six Hundred Forty Two Dollars ($110,642) ("Developer's Security Amount") or a bond ("Developer's Security Bond") or other collateral reasonably satisfactory to the City in like amount assuring Developer's performance of its obligation to make certain Covered Repairs under certain circumstances as provided in this Agreement. Such cash, bond or other reasonably satisfactory collateral held by the City shall be referred to herein as "Developer's Security" and/or "Developer's Security Fund". The Association shall promptly upon request, confirm its receipt of the Developer's Security and from time to time, upon request, provide the City and Developer with the then current status of the Developer's 068/022154-0010/2131149.8 a04/10/98 -6- Security. If Developer posts the Developer's Security Bond, Developer agrees to report to the Association and the City on each renewal of the Developer's Security Bond or on issuance of a new Developer's Security Bond. If Developer posts any cash as security, the Association shall place such cash in an interest bearing account ("Developer's Security Fund Account") that is insured by the Federal Deposit Insurance Corporation or other agency reasonably satisfactory to Developer and all interest accruing with respect to such cash shall inure to the benefit of Developer and may be drawn by Developer periodically (but not more frequently than semi-annually). 4.2 Form of Bond. If Developer elects to post the Bond, the surety and the form of the Bond will be subject to the approval of the City, which approval will not be unreasonably withheld. 4.3 Substitute Security. Developer may provide a substitute form of security legally acceptable to the City, the approval of which will not be unreasonably withheld by the City. To the full extent that the Association has received approved substitute security from Developer, the Association shall promptly release the security for which substitution has been made. 4.4 Insurance. At any time, Developer may, at its sole option, satisfy its security requirement set forth in this Section 4 by providing the Association and the City with evidence of insurance against Slope Displacement for which Developer is financially responsible, provided any such insurance shall be subject to the approval of the City or its authorized representatives, which approval shall not be unreasonably withheld, delayed or conditioned; and provided further that Developer agrees to promptly re-establish Developer's Security Fund to its proper level should such insurance expire or sooner terminate or otherwise become non- qualifying. M • R - ..- - 4.5.1 From time to time during the Developer's Liability Period, upon Developer's written request accompanied by reasonable substantiating evidence, the Association shall release, exonerate and/or return the Developer's Security to Developer, as appropriate, to pay for or reimburse Developer for costs incurred or to be 068/022154-0010/2131149.8 a04/10/98 -7- 0 0 incurred to implement Covered Repairs for which Developer is financially responsible under this Agreement. Notwithstanding the foregoing provisions of this Section 4.5.1, during the Developer's Liability Period, the Developer's Security remaining in the hands of the Association, when added to the current balance of the Association's Restricted Assessment Account (the sum of said addition being referred to herein as the "Sum") shall not be reduced below seventy-five percent (75%) of the Developer's Security Amount, and if during such period, said Sum falls below seventy-five percent (75%) of the Developer's Security Amount, then upon receipt of a written request from the City, Developer shall promptly post with the Association sufficient additional Developer's Security to restore such shortfall and bring the Sum up to seventy- five percent (750) of the Developer's Security Amount. 4.5.2 If at the time of the expiration of the Developer's Liability Period, the Sum (as such term is defined in Section 4.5.1 above) is less than seventy-five percent (751.) of the Developer's Security Amount, then upon receipt of a written request from the City, Developer shall post with the Association sufficient additional Developer's Security to restore such shortfall and bring the Sum up to seventy-five percent (75%) of the Developer's Security Amount. If, on the other hand, at the time of the expiration of the Developer's Liability Period, the Sum (as such term is defined in Section 4.5.1 above) is greater than seventy-five percent (75%) of the Developer's Security Amount, then upon written request from Developer, the Association shall promptly release, exonerate and/or return to Developer a sufficient amount of Developer's Security to eliminate such excess and bring the Sum equal to seventy-five percent (75%) of the Developer's Security Amount. Nothing to the contrary in this Agreement withstand- ing, following the expiration of the Developer's Liability Period, the Association shall promptly release, exonerate and/or return to Developer all of the Developer's Security still held by the Association, as and when the amount that was in the Association's Restricted Assessment Account as of the expiration of the Developer's Liability Period, -plus the aggregate amount of all assessments levied and collected by the Association for the Association's 068/022154-0010/2131149.8 a04/10/98 -8- n Restricted Assessment Fund following expiration of the Developer Liability Period equals one hundred percent (100`--) or more of the Developer's Security Amount. -. - "-r I. 5.1 Association to Levy and Collect Monthly Assessments Each month, commencing as hereinafter provided, the Association shall levy and collect homeowner assessments with respect to each residential lot in Tract 13726 (then subject to assessment] on a Fourteen and 64/100 Dollar ($14.64) per residential lot basis, commencing with all such residential lots [then subject to assessment], upon the close of escrow and conveyance of the first residential lot within the Project to be sold and conveyed to a member of the public under the auspices of a final subdivision public report issued by the DRE for any portion of the Project (the "Association's Restricted Assessment Fund"). The Association's Restricted Assessment Fund, consisting of assessment payments and interest thereon, is intended to grow to a total of One Hundred Ten Thousand Six Hundred Forty Two Dollars ($110,642) by the end of the Slope Displacement Warranty Period or earlier. The Association's Restricted Assessment Fund shall be established and maintained by the Association as a restricted reserve fund so that the funds therein shall be available to the Developer or the Association for payment or reimbursement of costs for Covered Repairs implemented or to be implemented by the Developer and/or the Association as the party responsible therefor in accordance with the provisions of this Agreement. Monies constituting the Association's Restricted Assessment Fund and interest thereon shall be deposited and retained in a restricted reserve account ("Association's Restricted Assessment Account") to be established by the Association in its name as soon as practicably possible following the later of full execution and delivery of this Agreement or the issuance by the DRE of the initial final subdivision public report covering any residential lots within the Project. Monies in the Association's Restricted Assessment Account shall only be withdrawn and used for the purposes contemplated in this Section 5.1 above. 5.2 Cessation of Assessments find rtain Circumstances. Except as otherwise provided in this Agreement, the Association may cease levying and collecting assessments as contemplated in Section 5.1 above when the total balance of the Association's 068/022154-0010/2131149.8 .04/10/98 -9- • 0 Restricted Assessment Account reaches One Hundred Ten Thousand Six Hundred Forty Two Dollars ($110,642). 5.3 Replenishment of t -hp Association'str; ed Assessment Account. In the event the Association's Restricted Assessment Account is depleted by the cost of making Covered Repairs, as contemplated by this Agreement, the Association will, by regular or special assessments, restore the total amount in the Association's Restricted Assessment Account to One Hundred Ten Thousand Six Hundred Forty Two Dollars ($110,642) within a reasonable period of time. 5.4 Responsibility of the Association and its Board of Directors. The Association and its Board of Directors shall be responsible for establishing and maintaining the Association's Restricted Assessment Fund and the Association's Restricted Assessment Account as herein provided, and for levying and using best efforts to collect assessments to fund the Association's Restricted Assessment Fund as herein provided. 5.5 Anoroval Reauired for_Chanses--in Assessments Levied by the Association Pursuant o section S. Changes in the amount of, or cessation of, the assessments to be levied by the Association, pursuant to the provisions of this Section 5 shall require the approval of the City and the Developer, which approvals shall not be unreasonably withheld. The City may enforce the provisions of this Section 5. 5.6 Insurance. At any time, Association may, at its sole option, satisfy the Association's Restricted Assessment Fund requirements set forth in this Section 5 by providing the City with evidence of insurance against Slope Displacement for which it is financially responsible; provided any such insurance shall be subject to the approval of the City or its authorized representatives, which approval shall not be unreasonably withheld, delayed or conditioned; and provided further that the Association agrees to promptly reestablish the Association's Restricted Assessment Fund to its proper level should such insurance expire or sooner terminate or otherwise become non- qualifying. 6.1 Additional L;mi a 'on on Slope Displacement Warranty Program. Nothing to the contrary in this Agreement withstanding, it is agreed that: 068/022154-0010/2131149.8 a04/10/98 -10- 6.1.1 The Slope Displacement Warranty Program provided herein expressly excludes slope displacement or any other soils or earth movement or failure of slopes, regardless of cause, not expressly referred to herein, and any and all resulting damage, whether arising out of covered Slope Displacement or not. 6.1.2 In no event will performance of repair work by any person or entity or any other circumstances extend the period of the Slope Warranty provided herein. 6.2.1 Appropriate provision in the CC&Rs and in the grant deeds will give Developer and its successors and the Association, a license and right to enter onto the common areas and individually -owned lots within the Project so that Developer or its successors and the Association and their agents may (a) inspect all landscaping, irrigation and drainage devices, and all other natural and artificial conditions which affect or might affect the integrity of the slopes which are the subject of the Slope Warranty, and (b) perform the duties of Developer to the full extent provided for herein. 6.2.2 Appropriate provisions in the CC&R's and in the grant deeds will grant the Association a license and right to enter onto the common areas and individually -owned lots of the Project so that the Association or its agents may inspect, maintain and repair the slopes within the Project to the full extent provided for herein. 6.3 Review and Approval by Association. Any proposed alterations by homeowners or any other person or entity to the landscaping, grading, irrigation or drainage on the individually -owned property or common areas will be subject to review and approval by the Board of the Association and/or by its Architectural Committee. 6.4 Reference in 12eeds and The grant deeds and the CC&R's will reference this Agreement and the Slope Displacement Warranty Program provided herein. The provisions of this Agreement constitute covenants running with the land and an equitable servitude as to the real property referenced herein. 068/022154-0010/2131149.0 .04/10/98 - 11 - 0 0 6.5 Coli ion and Report ing. The Board of the Association will be responsible for the collection of homeowner assessments for the Association's Restricted Assessment Fund and accounting for such assessments and interest thereon. The Board of the Association will report to Developer and to the City the incidence of covered and non -covered claims, as well as the balance in the Association's Restricted Assessment Fund as of the date of the report. Such reports will be made on or before January 31 and July 31 of each year. The Board will also provide to Developer at its request, and to the City at the City's request, any further information, documentation and/or cooperation as is reasonably necessary to effectuate the purposes of this Agreement. 6.6 Further Acts. The parties to this Agreement agree to perform such other and further acts and execute such other and further documents as are necessary to effectuate the intent of this Agreement. 6.7 Headings. The headings in this Agreement are inserted for convenience and identification only and are in no way intended to describe, define or limit the scope, intent or interpretation of this Agreement or any provisions hereof. 6.8 No Representations. No party or any agent, employee, representative, or attorney of or for any party has made any statement or representation to any other party regarding any fact relied upon in entering into this Agreement, and no party relies upon any statement, representation or promise of any other party or of any agent, employee, representative or attorney of any other party, in executing this Agreement, or making this settlement provided for herein, except as expressly stated in this Agreement. 6.9 Entire Agreement. This Agreement is the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions. This Agreement may be amended only by an agreement in writing among Developer (or its successors in interest or assignees), the City, and the Association. 6.10 Binding Upon Successors. This Agreement is binding upon and shall inure to the benefit of the parties hereto, their respective successors and assigns. 068/022154-0010/2131149.8 a04/10/98 -12- 6.10.1 The original Resolution as amended by the Amending Resolution and as embodied in this Agreement is binding upon Developer's successors in interest or assignees as to the Project, and any or all of them. 6.10.2 Effective upon the sale or other conveyance of Tract 13726 or any portion thereof in bulk, Developer will be relieved of its obligations under this Agreement as to the real property so sold or conveyed, to the extent that such obligations are assumed in writing by Developer's successors in interest or assignees, including without limitation the obligation to provide security for the Slope Warranty herein. Upon the City's receipt of reasonably adequate substitute security from any assuming party, the Developer's Security or the appropriate prorata portion thereof shall be appropriately released, exonerated and/or released to Developer by the City. 6.11 Construction of Agreement. Each party has cooperated in the drafting and the preparation of this Agreement. Hence, in any construction to be made of this Agreement, the same shall not be construed against any party. This Agreement shall be construed under California law. 6.12 Counteroarts. This Agreement may be executed in counterparts, and when each party has signed and delivered to the other at least one such counterpart, each counterpart shall be deemed and original, and when taken together with the other signed counterparts, shall constitute one agreement, which shall be binding upon and effective as to all parties. 6.13 Severability and No waiver, The invalidity or unenforceability of any provision of this Agreement shall not invalidate or render unenforceable any of the other provisions of this Agreement. No wavier of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any such waiver constitute a continuing waiver unless otherwise agreed in writing. 6.14 Termination. Unless otherwise agreed among the parties, this Agreement shall automatically terminate upon expiration of the Slope Displacement warranty Period at which time the obligations on the part of Developer (or its successors in interest or assignees) will automatically terminate and the unused cash, Bond or other Developer Security provided by Developer (or its successors in interest or assignees) which is 068/022154-0010/2131149.8 a04/10/98 —13— 0 0 still held by the City and/or by the Association, if any, shall be promptly and appropriately returned to Developer, exonerated and/or released from any further obligation, and upon such termination, the requirement that the Association maintain reserves in the Association's Restricted Assessment Fund shall be deemed likewise terminated. Nothing to the contrary herein withstanding, this Agreement shall not be deemed terminated as provided in this Section 6.14 above as to obligations and liabilities arising because of Slope Displacements occurring prior to the expiration of the Slope Displacement Warranty Period so long as a good faith written claim with respect to such Slope Displacement has been received by the parties prior to expiration of the Slope Displacement Warranty Period. 6.15 Attorneys' Fees. In the event of any dispute between the parties to this Agreement or any action or proceeding to enforce any provision of this Agreement or to seek a declaration of rights under this Agreement, the prevailing party or parties shall be entitled to recover from the other party or parties all expenses, fees and costs of such matter, including without limitation reasonable attorneys' fees and any costs of appeal, investigation, preparation and professional or expert consultation or testimony incurred in connection with the matter. Moreover, if any party hereto without fault is made a party to any litigation instituted by or against any other party hereto, such other party shall indemnify such innocent party against and save him harmless from all costs and expenses, including reasonable attorneys' and experts' fees and costs incurred by him in connection therewith. 6.16 Exculpation and Waiver. The City and the Association acknowledge that the State of California Public Employees Retirement System ("System") is a limited partner of the limited partner of Developer. Notwithstanding any other term or provision of this Agreement, System's liability hereunder is solely that of a limited partner of the limited partner of Developer and no personal or direct liability shall at any time be asserted or enforceable against System, its Board of Directors, any member thereof, or any employee or agent of System on account of or arising out of any obligations arising out of or related to this Agreement. City and the Association hereby waive any claim against the partners of the limited partner of Developer including the System, irrespective of the compliance or non-compliance now or in the future with any requirements relating to the limitation of liability of limited partners. 068/022154-0010/2131149.8 .04/10/98 -14- 9 0 6.17 Notices. Any notice which either party may desire to give to the other party must be in writing and may be given by personal delivery, by mailing the same by registered or certified mail, return receipt requested, postage prepaid, or by Federal Express or other reputable overnight delivery service, or by telecopier or other reliable electronic type mail system to the party to whom the notice is directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate. Any such notice shall be deemed given upon receipt if by personal delivery, forty-eight (48) hours after deposit in the United States mail, if sent by mail pursuant to the foregoing, or twenty-four (24) hours after deposit with Federal Express or other reputable overnight delivery service, or twenty-four (24) hours after transmission by telecopier or other reliable electronic type mail system. To Developer: Estates at San Juan Capistrano, L.P. 2100 W. Orangewood, Suite #180 Orange, Ca. 92668 Telecopier: (714) 935-0700 Attn: James W. Boyd Copy To: TSG Independent Property Management, Inc. P.O. Box 7027 Laguna Niguel, Ca. 92607 Attn: Sally M. Waller To Association: Estates at San Juan Capistrano Homeowners Association 2100 W. Orangewood, Suite #180 Orange, Ca. 92668 Attn: James F. Sattler 068/022154-0010/2131149.8 .04/10/98 -is- 0 To the City: The City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, California 92675 Attn.: Director of Engineering and Building Telecopier: (714) 493-1053 The City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, California 92675 Attn: City Attorney Telecopier: (714) 493-1053 IN WITNESS WHEREOF, this Agreement was executed on the date first above written. At st: City Clerk CITY: THE CITY OF SAN JUAN CAPISTRANO B�- _Uj� nes Its: Mayor DEVELOPER: ESTATES AT SAN JUAN CAPISTRANO, L.P., a California Limited partnership By: TOLL CA GP CORP., a California corporation - /I A ""m MM Title V lr_'rz' Pglt ,glogx! / ASSOCIATION: ESTATES AT SAN JUAN CAPISTRANO HOMEOWNERS'ASSOCIATION, a California non -Profit corporation 068/022154-0010/2131149.8 a04/10/98 -16- 0 By: Name Title Approve as to f and content this day of 1997 City Atto City of An Juan Capistrano 068/022154-0010/2131149.8 a04/10/98 - 17 - STATE OF CALIFORNIA COUNTY OF On APRIL 14, 1998 personally ) ss. ) before me, Rppeared.4 :• is JULIE R. YOUNG personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(/) whose name(A) is ar subscribed to the within instrum nt and acknowledged to me that she/they executed tsame in authorized capacity (i/s), and that by i /her/their signature() on the instrumenp the person(/) or the entity upon behalf of which the person(:V)acted, executed the instrument. Witness my hand and official seal. U Not V Public [SEAL] STATE OF CALIFORNIA ) ss. COUNTY OF ) On 1511 'qJ personally appeared _ JANILVOWS cmNaftwom Nd" RM-O� nj ire me, � iHH IE personally known to me (or 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. Witness my hand and official seal. 9 �a: . Mycaee►a'°e *nAM3L= Aad K' y Notar ublic 068/022154-0010/2131149.8 .04/10/98 -18- 0llOMA3lAt, �r9Dr/ �/10YrmtsD CMIO'P } 3IIl< eragv� rre�co rrse�J—�w�+ STATE OF CALIFORNIA ) COUNTY OF ) City of San Juan Capistrano Gov't Code 40814/Civil Code 1181 On April 20, 1998 personally appeared - - -Gil 0 ss. before me, Cheryl Johnson, City Clerk personally known to me (e}x-poired-to-ine-oa-t�xe-Basis -o€-sans€acTt-0y -evidence) to be the person(g) whose name(g) isAaT*2 subscribed to the within instrument and acknowledged to me that he/fsW�t executed the same in his/24 /,?§1-T authorized capacity(kas3, and that by his/h*--W A,iK signatureQ4Y on the instrument the person(XO or the entity upon behalf of which the person(s) acted, executed the instrument. Witness my hand and official seal. /M _ w „I .. ! / r [SEAL] 068/022154-0010/2131149.8 a04/10/98 -19- 0 EXHIBIT "A" • LEGAL DESCRIPTION OF THE PROPERTY That certain real property located in the City of San Juan Capistrano, County of Orange, State of California, described as follows: in the City of San Juan Capistrano, County of Orange, State of California, being all of Tract No. 13726 as per map filed in Book 734, Pages 5 through 12, inclusive, of Maps in the Office of the County Recorder of said County. EXHIBIT "A" TO AGREEMENT ESTABLISHING SLOPE DISPLACEMENT WARRANTY PROGRAM 068/022154-0010/2131149.8 a04/10/98 EXHIBIT "B" DEFINITIONS The defined terms set forth below shall have the definitions given to them herein: "Amending Resolution" shall have the definition given to such term in Paragraph C of the Recitals to the Agreement. "Association" shall mean Estates at San Juan Capistrano Homeowners' Association, a California non-profit corporation. "Association's Restricted Assessment Fund" shall have the meaning given to it in Section 5.1 of the Agreement. "Association's Restricted Assessment Account" shall have the meaning given to it in Section 5.1 of the Agreement. "Basic Ordinance" shall have the meaning given to such term in Paragraph B of the Recital to the Agreement. "Board" shall mean the Board of Directors of the Association. "Catastrophic Slope Displacement" shall mean displacement of a manufactured or natural Covered Slope at a depth greater than three (3) feet with a vertical movement of one (1) foot or more, regardless of cause except for Excluded Coverage Items. "City" means the City of San Juan Capistrano, California. "Claims Adjuster" shall have the meaning given to such term in Section 2 of the Agreement. "Covered Repairs" shall mean all repairs to correct any damage to individual lots and structures or common/public improvements located within the Covered Slopes of the Project and arising due to a specified type of Slope Displacement occurrence, but specifically excluding the Excluded Coverage Items. "Covered Slopes" means the following slopes within the Project: (a) All designated common area landscape slopes to be maintained by the Association pursuant to the provisions of the Master Declaration; EXHIBIT "B" TO AGREEMENT ESTABLISHING SLOPE DISPLACEMENT WARRANTY PROGRAM 06e/022154-0010/2131149.6 a04/10/9e 0 0 (b) All manufactured slopes having a minimum height of five (5) feet in vertical height; (c) All natural slopes within two hundred (200) feet of individual lots or all natural slopes within one hundred fifty (150) feet of individual lots to the extent that such natural Slopes are within a fuel modification zone within the Project. "Developer" means Estates at San Juan Capistrano, L.P., a California limited partnership. "Developer Liability Period" shall mean the period commencing with completion and acceptance by the City of rough grading for the Project and expiring on the last to occur of (a) expiration of the first three (3) years after completion and acceptance of rough grading of those portions of the Property to be rough graded in connection with the development of the Project, or (b) the close of escrow for the sale of the last unsold residential lot within the Project. "Developer's Security Amount" shall have the meaning given to it in Section 4.1 of this Agreement. "Developer's Security" and "Developer's Security Bond" shall have the meanings given to such terms Section 4.1 of this Agreement. "Developer's Security Fund" shall have the meaning given to it in Section 4.1 of this Agreement. "Developer's Security Fund Account" shall have the meaning given to it in Section 4.1 of this Agreement. "DRE" shall have the meaning given to it in Section 1.6 of this Agreement. "Excluded Coverage Items" means surface cracking and fissures, including without limitation desiccation cracks or erosion, defined as the wearing away of the surface of the slope, as opposed to movement of the slope, resulting from the force of water, wind, persons or vehicles moving over the surface, unless erosion ultimately results in a Slope Displacement, as defined herein, (ii) displacement of soil caused solely by earthquake or seismic activity of significant intensity. "GHAD" shall mean a Geologic Hazard Abatement District established in accordance with the provisions of Public Resources Code Section 26500, et seq. '00riginal Resolution" shall have the meaning given to it in Paragraph C of the Recitals to this Agreement. -2- 068/02215A-0010/2131149.8 a04/10/98 "Project" shall have the meaning given to it in Paragraph A of the Recitals to this Agreement. "Property" means that certain real property more particularly described on Exhibit "A" attached hereto, which real property is the subject of Tract Map 13726. "Slope Displacement" means Surficial Slope Displacement (as defined herein) and Catastrophic Slope Displacement (as defined herein), but excludes the Excluded Coverage Items and all other slope and soils displacements not specifically included within the definitions of Surficial Slope Displacement and/or Catastrophic Slope Displacement. "Slope Displacement Warranty Period" has the meaning given to it in Paragraph 1.1 of this Agreement. "Slope Displacement Warranty Program" shall have the meaning given to it in Paragraph C of the Recitals and in Paragraph 1.1 of this Agreement. "Sum" shall have the meaning given to such term in Section 4.5.1 of this Agreement. "Surficial Slope Displacement" shall mean a displacement of a manufactured Slope which qualifies as a Covered Slope at a depth of up to three (3) feet with a vertical movement of one (1) foot or more, regardless of cause excepting Excluded Coverage Items. "System" shall have the meaning given to such term in Section 6.16 of this Agreement. -3- ose/"t2is4-ooio/2131149." a04/ID/98 Brian Johnson COPY Real Estate Development Consultant August 1, 1996 Mr. William Huber Engineering & Building Director City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, CA 92675 RE: CAPISTRANO ESTATES - TRACT #13726 - LETTER OF CREDIT Dear Mr. Huber: In compliance with TITLE 9 -CHAPTER 10 SOILS SUBSIDENCE REMEDIATION PROGRAM of the City Code, specifically item (i) of (4) Covered Repairs (Long Term) of (b) Surficial Soil Displacement Remediation Program Element, please find enclosed herewith a copy of an Irrevocable Standby Letter of Credit in the amount of $110,642.00 issued to the Estates at San Juan Capistrano Homeowners Association. The original Letter of Credit has been submitted to the Association and will be retained by the management company. If any questions arise in relation to this matter, please do not hesitate to contact me. Sincerely, Brian J nson Enclosure C: Sam Shoucair-w/enc. Jim Boyd-w/enc. Rob Frakes-w/enc. 28382 Chat Drive - Laguna Niguel, CA 92677 Telephone/Fax: (714) 643-2186 BANQUE PARIBAS LOS ANGELES AGENCY IRREVOCABLE STANDBY LETTER OF CREDIT No. 030149 July 31, 1996 Estates at San Juan Capistrano Homeowners Association 2100 West Orangewood Avenue, Suite 180 Orange, CA. 92668 Amount: US$110,642.00 (UNITED STATES DOLLARS: ONE HUNDRED TEN THOUSAND SIX HUNDRED FORTY TWO AND 00/100) Expiry Date: July 31, 1997 at the counters of Banque Paribas Los Angeles Agency Ladies & Gentlemen: We hereby establish our Irrevocable Letter of Credit No. 030149 in favor of Estates at San Juan Capistrano Homeowners Association, a California mutual benefit corporation formed to act as Homeowners Association (`Beneficiary") by order and for the account of Estates at San Juan Capistrano, L.P., c/o First Huntingdon Finance Corp. up to an aggregate principal amount of United States Dollars: One Hundred Ten Thousand Six Hundred Forty Two and 00/100 (USD 110,642.00) available by your sight draft(s) drawn on Banque Paribas, Los Angeles (The "Bank") accompanied by the following: 1/ A certificate issued by a civil engineer indicating they are licensed in the State of California, and setting forth the type of damages and the estimated costs of repair in connection with a soils displacement event involving the Estates at San Juan Capistrano Homeowners Association. 2/ A written statement purportedly signed by the President and the Secretary of the beneficiairy certifying as follows: "The undersigned are the duly elected and presently acting President and Secretary of Estates at San Juan Capistrano Homeowners Association. A soils displacement event occurred on the _day of (insert date). The association requires funds to repair the subject damages and 2029 CENTURY PARK EAST, SUITE 3900 - LOS ANGELES. CALIFORNIA 90067 - TEL (310) 551-7300 - FAX (310) 556-8759 - TELEX WU 194802 PARIBAS LSA 4 4 n • Page 2 of 3 L/C 030149 Estates at San Juan Capistrano Homeowners Association hereby certify that the accompanying certificate is an estimate by a civil engineer licensed in the State of California setting forth the type of damages and the estimated costs of repair. The total amount is the sum of insert amount) , written demand has been sent to the Estates at San Juan Capistrano, L.P. (The "Declarant") at least ten (10) days in advance of the date of this certificate and declarant has failed to repair or commence the repair of the damages or provide funds for the repair of the damages. Therefore, the undersigned, on behalf of beneficiary, hereby demand payment by the bank against the principal amount of this letter of credit in the sum set forth above. All capitalized terms set forth above and elsewhere in Letter of Credit Number 030149 issued by Banque Paribas Los Angeles have the same definitions as set forth in the Estates at San Juan Capistrano CC&R's which were recorded the 19th day of July 1996 in the official records of Orange County, California as instrument No. 19960367581 ". It is a condition of this letter of credit that it shall be extended for an additional period of one year from the present or future expiration date hereof unless sixty (60) days prior to such date we shall notify you in writing by registered or certified mail, return receipt requested at the Estates at San Juan Capistrano Homeowners Association, 2100 West Orangewood Avenue, Ste 180, Orange, CA. 92668 that we elect not to renew this letter of credit for such additional period. Upon receipt by you of such notice you may draw hereunder by means of your draft on us at sight accompanied by your written statement purportedly signed by the President and Secretary of Estates at San Juan Capistrano Homeowners Association as follows: "The undersigned are duly elected and presently acting President and Secretary of Estates at San Juan Capistrano Homeowners Association and do hereby certify that we have received notice from Banque Paribas Los Angeles of their intention not to extend Letter of Credit Number 030149 beyond the current expiration date. The letter of credit by this term will expire within sixty (60) days from the date of this certificate and that the Estates at San Juan Capistrano, L.P. has failed to provide a replacement letter of credit with terms acceptable to ourselves from another financial institution and we are therefore entitled to the amount drawn". Draft(s) drawn under this letter of credit must be marked "Drawn under Banque Paribas Los Angeles Letter of Credit No. 030149 dated July 31, 1996" and accompanied by the original letter of credit for proper endorsement. This letter of credit sets forth in full the terms of our undertaking and such undertaking shall not in any way be modified, amended or amplified by reference to any document, instrument or agreement referred to herein or in which this letter of credit is referred to or to which this letter of credit relates, and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement. 4 4 n Page 3 of.3 L/C 030149 Estates at San Juan Capistrano Homeowners Association 0 We hereby engage with you that the draft(s) drawn and presented strictly in compliance with the terms of this Credit shall be duly honored by us if presented on or before the expiry date shown above (as it may have been extended as provided herein) at our office at the address shown above. Partial drawings are permitted but the aggregate of all drawings may not exceed the principal amount hereof. Except so far as expressly stated herein, this Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision) International Chamber of Commerce Publication No. 500. This letter of credit shall be deemed to be issued under the laws of the State of California and shall as to matters not governed by said uniform customs and practice be governed by and construed in accordance with the laws of the State of California. Authorized Signature Authorized Signature ft. Y A 'C-) Z ato M z O zxo +NC n 0Wo -=i m -< N m m 0 0 N 7O G M • 11 c Jmo o$vr =CC=m < y a' s 2 n w ' iF Vi 11 c Jmo o$vr =CC=m < y a' s 2 n December 9, 1997 Clerk -Recorder's Office County of Orange P. O. Box 238 Santa Ana, California 92701 Gentlemen: din � Innelo 1961 1776 The following document is enclosed for recordation: MEMBERS OF THE CITY COUNCIL COLLENE CAMPBELL JOHN GREINER WYATT HART GIL JONES DAVID M. S W ERDLIN CITY MANAGER GEORGESCARBOROUGH Agreement Establishing Slope Displacement Warranty Program for Tract 13726, Toll Brothers, Inc. A check in the amount of $76.00 is enclosed to cover recording and conformed copy fees. When placed of record, please return said document to this office. A duplicate copy of this letter is enclosed. Please stamp Document Number and date of recording on the letter and return it to this office in the enclosed, stamped, self-addressed envelope at your earliest convenience. Thank you for your cooperation. Ve ry truly yours, Cheryl Johnson City Clerk Enclosure Document Number Date 32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 9 (714) 493-1171 U'> OW Lo TIP Mrnl V 0 r8 U)� 1 00 =Z M16 as 49 ur -j ; 0 9 OW � ., zal r8 U)� 1 00 =Z M16 49 ur -j ; 0 49 41 -j z 089 0 p W6 -p I-. Fj 0 41 • December 9, 1997 soft � �IAIOPVOIAIIO uuunem 1961 1776 Mr. Jim Sattler Toll Brothers, Inc. 2100 West Orangewood Avenue, Suite 180 Orange, California 92668 Re: Agreement Establishing Slope Displacement Warranty Program Dear Mr. Sattler: MEMBERS OF THE CITY COUNCIL COLLENE CAMPBELL JOHN GREINER WYATT HART GIL JONES DAVID M. SWERDLIN CITY MANAGER GEORGESCARBOROUGH At their meeting of December 2, 1997, the City Council of the City of San Juan Capistrano approved the "Agreement Establishing Slope Displacement Warranty Program", which was a condition of approval for Tract 13726. As the signer on behalf of the Estates at San Juan Capistrano Homeowners' Association, a fully -executed copy of the Agreement is enclosed. A copy has been forwarded to the Orange County Recorder for recordation. Please feel free to contact Sam Shoucair at 443-6355 if you have any questions. Very truly yours, Cheryl Johnson, CMC City Clerk Enclosure CC] Engineering and Building Director (with copy of Agreement) Sam Shoucair (with copy of Agreement) 32400 PASEO ADELANTO, SAN JUAN CAPISTRANO. CALIFORNIA 92675 0 (714) 493-1171 C: December 9, 1997 IIto Imp I mMmuo 1961 1776 It Mr. James Boyd Toll Brothers, Inc. 2100 West Orangewood Avenue, Suite 180 Orange, California 92668 Re: Agreement Establishing Slope Displacement Warranty Program Dear Mr. Boyd: MEMBERS OF THE CITY COUNCIL COLLENE CAMPBELL JOHN GREINER WYATT HART GIL JONES DAVID M. SWEROLIN CITY MANAGER GEORGESCARBOROUGH At their meeting of December 2, 1997, the City Council of the City of San Juan Capistrano approved the "Agreement Establishing Slope Displacement Warranty Program", which was a condition of approval for Tract 13726. As the signer on behalf of the Estates at San Juan Capistrano, L.P., a fully -executed copy of the Agreement is enclosed. A copy has been forwarded to the Orange County Recorder for recordation. Please feel free to contact Sam Shoucair at 443-6355 if you have any questions. Very truly yours, Cheryl Johnson, CMC City Clerk Enclosure cc: Engineering and Building Director (with copy of Agreement) Sam Shoucair (with copy of Agreement) 32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 493-1171 0 0 gent District for Tr 13726, Toll Brothers (Estates at San an Capistrano, L.P.) and a Public Hearing Da%97- e meeting of January 6, 1998: -2-2 "GROLOGIC HAZARD %AB TEMENT - A RESOL ION OF THE CITY COUNCIL OF SAN AN CAPISTRANO, CALIF DECLARING THAT OF THE SXk4 JUAN CAPISTRANO I UBJECT TO THE PROVISIO OF P IC RESOURCES CODE, VISION 17, "GEOLOGIC H kZ ABATISMENT DISTRICTS" ITRAC 6 A RESOLUTION THE CITY COUNCIL OF&AN JUAN CAPISTRANO, CALIFORNIA DE ARING SUFFICIENCY OF PIiTITION, DIRECTING NOTICES TO BE ED AND SETTING A T AND DATE FOR PUBLIC HEARING F FORMATION OF A GE OGIC HAZARD ABATEMENT DISTRIC URSUANT TO THE REQ MENTS OF PUBLIC RESOURCES CO OF THE STATE OF C ORNIA, DIVISION 17 "GEOLOGIC ARD ABATEMENT DIS CTS" (TRACT 13726) 6. CONSIDERATION OF AGREEMENT FOR SURFICIAL SOILS REMEDIAL PROGRAM, TRACT 13726. ESTATES AT SAN JUAN CAPISTRANO- T. P (TOLL(600.30 As set forth in the Report dated December 2, 1997 from the Director of Engineering and Building, the Agreement establishing Slope Displacement Warranty Program for Tract 13726, Toll Brothers (Estates at San Juan Capistrano, L.P.) was approved. 590 50) set forth in the Report da d December 2, 1997 from the Director of,,Engineering and lding, the following Resolut n was adopted approving installation o stop signs for Zound and westbound traffic o Via Rueda at Calle San Remo: - A RESOLUTI OF THE CITY COUNCIL OF THE CNONA SAN JUAN CAPISTRAN , ALIFORNIA, APPROVING THE LATION OF EASTBOUND WESTBOUND STOP SIGNSRUEDA AT CALLE SAN RE 8. IDERA I F PS R TMR NORTH A I 600 70) As set forth in the Report dated Dece er 2, 1997 from the Public orks Director, the Personal Services Agreement with Richard . Sla`d\e & Associates for hydro ologic services, City Council Minutes -6- 12/2/97 AGENDAITEM TO: FROM: SUBJECT: 0 0 December 2, 1997 George Scarborough, City Manager William M. Huber, Director of Engineering & Building Consideration of Agreement for Surficial Soils Remediation Program ; Tract 13726, Toll Brothers (Estates at San Juan Capistrano, L.P. ). It is recommended that the City Council approve the "Agreement Establishing Slope Displacement Warranty Program" for Tract 13726, Toll Brothers (Estates at San Juan Capistrano, L.P. ). SITUATION A. Summary and Recommendation Tract 13726, Toll Brothers, is required to establish by agreement a Surficial Soils Remediation Program as provided by City Municipal Code Section 9-10. The agreement provided in Attachment 1 provides the mechanism to establish the program. The agreement has been reviewed and found to be consistent with the provisions of the Code. Staff is, therefore, recommending its approval. B. Background History On June 18, 1991, the City Council approved Glenfed Vesting Tentative Tract Map 13726, located at the south easterly end of Camino La Ronda, which allowed the subdivision of a 46 -acres parcel, known as Area H, into 63 custom home lots. One of the conditions of approval requires the developer to provide a soils subsidence warranty program. When Toll Brothers purchased Area H from Glenfed in December of 1994, they requested to change the custom home concept to production homes and to privatize / gate their community. On March 5, 1996, the Final Map and Subdivision Improvement Agreement were approved by the City Council. On August 15, 1995, City Council adopted Ordinance 768 adding Municipal Code Section 9, Chapter 10, "Soils Subsidence Remediation Program". This program consists FOR CITY COUNCIL ACS— �6 0 0 AGENDA ITEM -2- December 2, 1997 of two parts: 1) Surficial Soils Displacement Element which is directed at minor slope displacement, defined by the Municipal Code as not exceeding three feet in depth. The program provides for the developer to deposit an initial amount of funds based on the slope areas maintained by the HOA. As residents move into the development, a portion of their monthly fees would be put into this fund. Once the residents' deposits reached 75% or more of the developer's initial deposit, then that deposit would be released back to the developer and: 2) Catastrophic Soils Displacement Element which requires the formation of a Geologic Hazard Abatement District (GRAD). The GHAD provides a mechanism by which any major slope failure could be abated by assessment to the property owners. It is intended to provide for repairs in the long term beyond the developer's obligation. This Agenda Item deals only with the Surficial Soils Displacement Element. The Catastrophic Soils Displacement Element is concurrently being formed and processed separately as it requires Council authorization to initiate the District, then conduct a public hearing. Estates at San Juan Capistrano, L.P. Agreement The Agreement (Attachment 1) has been drafted and reviewed by staff and City Attorney and found to be consistent with the Municipal Code requirements. Important elements provided in the agreement include: 1) Developer's liability for any slope failure within the first three-year period. 2) Surficial slope damages could be paid for using the Geologic Hazard Abatement District if the costs exceed the amount in the Surficial Slope Damage Program fund. 3) Return of developer's funds consistent with the requirements of the San Juan Municipal Code. 4) Homeowner assessments to special fund. The City Attorney has provided a detailed review of this Agreement and found it to be consistent with the City's Municipal Code requirements and other applicable provisions of law. Staff believes the Agreement is, therefore, now ready for acceptance and approval by the City Council. 1 -CLIC Lei WUNWIJ ►_ There is no cost impact to the City's General Fund. 0 AGENDA ITEM -3- PUBLIC NOTIFICATION Mr. James W. Boyd, Toll Brothers Development Mr. Jim Sattler, Estates at San Juan Capistrano ALTERNATE ACTIONS 0 December 2, 1997 Approve the "Agreement Establishing Slope Displacement Warranty Program" for Tract 13726, Toll Brothers (Estates at San Juan Capistrano, L.P. ). Do not approve Agreement. Return to staff for additional information. It is recommended that the City Council approve the "Agreement Establishing Slope Displacement Warranty Program" for Tract 13726, Toll Brothers (Estates at San Juan Capistrano, L.P. ). Respectfully submitted, G� "0, A (, " - William M. Huber Director of Engineering & Building WMH/SS:ch Attachment: xagendw\soilToll.ss Prepared by: amcair Senior Engineer 1. Agreement Establishing Slope Displacement Warranty Program