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1999-0720_STONEFIELD SAN JUAN LLC_Agreementa a I ' , RECORDING REQUESTED BY: City of Sali Juan Capistrano WHEN RECORDED MAIL TO: City of San Juan Capistrano Attention City Clerk's Office 32400 Paseo Adelanto San Juan Capistrano, CA 92675 Recorded in the County of Orange, California Gary L. Granville, Clerk/Recorder 66.00 19990581183 C 27pm 08/09/99 008 12059504 12 21 R12 21 6.00 60.00 0.00 0.00 0.00 0.00 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 July 20 , 1999, by and among STONEFIELD SAN JUAN, LLC.,BY STONEFIELD DEVELOPMENT, a CALIFORNIA CORPORATION, MANAGING MEMBER ("Developer"),STONEFIELD SAN JUAN 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"). R E C I T A L S 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 19,1990 the Council passed, approved and adopted Resolution No. 90-6-19-2 ("Resolution"), approving vesting Tentative Tract Map No. 13823 and certain other matters. On September 15,1992, the Council adopted Ordinance 713 approving the Development Agreement for said Tract. Developer has been required by the City to implement a Soils Subsidence Program ("Slope Displacement Warranty Program") with respect to Tract 13823. 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. 13823. 068/022154-0010/2131149.8 aoe/03i99 6 0 E. By this Agreement, Developer satisfies in full (I) all conditions of subdivision approval relating to the Slope Displacement Warranty Program (including without limitation Planning Condition 12 as set forth in the Resolution, (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 Definitions. 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. Slope Displacement Warranty Program. 1.1 Slope Displacement Warranty Program and Term. Developer's subdivision approvals for Tract 13823 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 13823("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 Catastrophic Slope Displacements. 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 event the GRAD elects to make or cause such Covered Repairs to be made, the GHAD and not the Association shall make or cause such Covered Repairs to be made, and the GRAD 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 Surficial Slope Displacements. If a Surficial Slope Displacement occurs at any time after the 068/02.2154-0010/2131149.8 a06/03/99 -2- 0 • 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 ("GRAD") 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 GHAD 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 reports for the Project as issued by the DRE shall contain a disclosure as to the nature and existence of the GHAD. 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 GHAD or its use for the purposes for which it is intended as expressed in this Agreement. 2. Claims Procedures and Adjustments. During the Developer's 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 068/022154-0010/2131149.8 a06/03/99 —3 — 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 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. 066/022154-0010/2131149.6 .06/03/99 -4- 0 a 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 © 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 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. 3. Grace Period. 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. 068/022154-0010/2131149.8 a06/03/99 -5 - • a 4. Security for Developer's obligations - Developer's Security Fund and Developer's Security Fund Account. 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 Thirty -Three Thousand Four Hundred Forty -Two Dollars ($33,422) ("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 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. 068/022154-0010/2131149.8 a06/03/99 —6— • 0 4.5 Return of Develoner' 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 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 (7596) of the Developer's Security Amount, and if during such period, said Sum falls below seventy-five percent (750) 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 (750) 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 (750) 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 (750) 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 (750) 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 068/022154-0010/2131149.8 a06/03/99 —7— 0 of all assessments levied an Association for the Association's Fund following expiration of the Period equals one hundred percent Developer's Security Amount. a d collected by the Restricted Assessment Developer Liability (10016) or more of the 5. Homeowner Association Assessments to Fund the Association's Restricted Assessment Fund. 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 13823 [then subject to assessment] on a Dollar ($ ) 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 Thirty - Three Thousand Four Hundred Forty -Two Dollars ($33,442) 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 Under Certain 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 Restricted Assessment Account reaches Thirty -Three Thousand Four Hundred Forty -Two Dollars ($33,422). 5.3 Replenishment of the Association's Restricted Assessment Account. In the event the Association's Restricted Assessment Account is depleted by the cost of making Covered 068/022154-0010/2131149.8 a06/03/99 -8- 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 Thirty -Three Thousand Four Hundred Forty -Two Dollars ($33,422) 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 Approval Reauired for Changes in Assessments Levied by the Association Pursuant to 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. Miscellaneous. 6.1 Additional Limitations on Slope Displacement Warranty Program. Nothing to the contrary in this Agreement withstanding, it is agreed that: 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. 068/022154-0010/2131149.8 a06/03/99 -9 - 0 0 6.2 License and Right to Enter. 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 Deeds and CC&R's. 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. 6.5 Collection and Reporting. 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. 068/022154-0010/2131149.8 ao6/03/99 - 10 - 6.7 Headinas. 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. 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 13823 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 Counterparts. 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 nbe/022154-0010/2131199.8 .06/03/99 — 11 — 0 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 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 068/022154-0010/2131149.8 .06/03/99 -12- 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. 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: Stonefield Development 23333 Avenida La Caza Cotto de Caza California 92679 Telecopier: (949) 581-5090 To Association: Stonefield San Juan Homeowners' Association Stonefield Development 23333 Avenida La Caza Cotto de Caza California 92679 Telecopier:(949)581-5090 To the City: The City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, California 92675 Attn.: Director of Engineering and Building Telecopier: (949)493-1053 068/022154-0010/2131149.8 a06/03/99 —13— The City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, California 92675 Attn: City Attorney Telecopier: (949)493-1053 IN WITNESS WHEREOF, this Agreement was executed on the date first above written. Attest: 611�41�r� City c1e CITY: THE CITY QF S JUAN CAPISTRANO By: its, John Greiner, Mayor DEVELOPER: Stonefield San Juan, LLC By: Stonefield Development, a California Corporation, as managing member By: ROBERT PACK, President ASSOCIATION: STONEFIELD SAN JUAN HOMEOWNERS' ASSOCIATION, a Californ'a non- profit mutual beD,€ ration 0697022154-0010!2131149.8 .06703799 -14- Approved as to form and content this ? `K'day of ull 1999 Cit ttorney Cit of San Juan Capistrano 068/022154-0010/2131199.8 a06/03/99 - 1 S - STATE OF CALIFORNIA COUNTY OF On persona] ss. y known to me ) to be the person �WJ whose name{ is/mac subscribed to the within instrument and acknowledged to me that he/may executed the same in his/mss authorized capacity (�<s), and that by his/h^ r signatures on the instrument the person *� or the entity upon behalf of which the person(x acted, executed the instrument. Witness my hand and official seal. K SAVONA Commission#1 ,L3, Notary Public Notary Public - CalttaNp Orange County @My Comm. Bpkm Dec 13.2= [SEAL] STATE OF CALIFORNIA ss. COUNTY OF On before me, personally appeared 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. Notary Public [SEAL] 068/022154-0010/2131149.8 x06/03/99 -16- STATE OF CALIFORNIA ss. COUNTY OF ) CITY OF SAN JUAN CAPISTRANO Govt Code 40814 4 Civil Code 1181 On July 20, 1999 before me, Cheryl Johnson, City Clerk personally appeared - - John Greiner - - personally known to me (o-�-gewed-o-e-oma t13e-basis-o-saLisfactoiy -,vide-nee) to be the person(jabi whose name( islmma subscribed to the within instrument and acknowledged to me that he/A4jh(Ry executed the same in his/#mail-tboccK authorized capacity(i)ea), and that by his/1MrYA*W1t signature(s) on the instrument the person(s) or the entity upon behalf of which the personps) acted, executed the instrument. Witness my hand and official seal. n�A xx� k veryl Johnson, City Clerk (SEAL] 068/022159-0010/2131199.8 -06/03/99 -17- 0 EXHIBIT "A" 0 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: A portion of section 5, township 8 south, range 7 west, San Bernardino Meridian, according to the official plat of said land filed in the district land office on April 12, 1875. Upon recordation of the final map, which is currently(As of June 3, 1999) in progress, said subdivision will be referred to as all of TRACT No. 13823 in the City of San Juan Capistrano, County of Orange, State of California. EXHIBIT "A" TO AGREEMENT ESTABLISHING SLOPE DISPLACEMENT WARRANTY PROGRAM 0681022154-0010!2131149.8 a06{03!99 EXHIBIT "B" DEFINITIONS The defined terms set forth below shall have the definitions given to them herein: "Resolution" shall have the definition given to such term in Paragraph C of the Recitals to the Agreement. "Association" shall mean Stonefield San Juan Homeowners' Association, a California non-profit mutual benefit 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 3 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; (b) All manufactured slopes having a minimum height of five (5) feet in vertical height; 068/022154-0010/2131149.8 a06/24/99 0 0 (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 Stonefield San Juan, LLC., by Stonefield Development, Managing Member, a California Corporation. "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. "CHAD" shall mean a Geologic Hazard Abatement District established in accordance with the provisions of Public Resources Code Section 26500, et seq. "Resolution" shall have the meaning given to it in Paragraph C of the Recitals to this Agreement. "Project" shall have the meaning given to it in Paragraph A of the Recitals to this Agreement. -2- 068/022154-0010/2131149.8 .06/24/99 4 0 "Property" means that certain real property more particularly described on Exhibit "A" attached hereto, which real property is the subject of Vesting Tentative Map 13823. "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- 068/022154-0010/2131149.8 a06/24/99 0 0 Recorded in the County of Orange, California Gary L. Granville, Clerk/Recorder RECORDING RUQUESTED BY: II�IIIII�IIIIII IIIIII�IIIIII��IIIIIIII1IIIIII1IIII 66'00 City of Safi.Juan Capistrano 19990581183 4,27pm 08/09/99 008 12059504 12 21 WHEN RECORDED MAIL TO: R12 21 6.00 60.00 0.00 0.00 0.00 0.00 City of San Juan Capistrano Attention City Clerk's Office 32400 Paseo Adelanto APR 1 - 2000 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 July 20 , 1999, by and among STONEFIELD SAN JUAN, LLC.,BY STONEFIELD DEVELOPMENT, a CALIFORNIA CORPORATION, MANAGING MEMBER ("Developer"),STONEFIELD SAN JUAN 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"). R E C I T A L E 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 19,1990 the Council passed, approved and adopted Resolution No. 90-6-19-2 ("Resolution"), approving vesting Tentative Tract Map No. 13823 and certain other matters. On September 15,1992, the Council adopted Ordinance 713 approving the Development Agreement for said Tract. Developer has been required by the City to implement a Soils Subsidence Program ("Slope Displacement Warranty Program") with respect to Tract 13823. 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. 13823. 068/022154-0010/2131149.8 06/3309 0 0 E. Bp- this Agreement, Developer satisfies in full (I) all conditions of subdivision approval relating to the Slope Displacement Warranty Program (including without limitation Planning Condition 12 as set forth in the Resolution, (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 Definitions. 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 Slone Displacement Warrantv Program and T Developer's subdivision approvals for Tract 13823 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 13823("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 Catastrophic Slope Displacements. 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 event the GHAD elects to make or cause such Covered Repairs to be made, the GHAD 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 Surficial Slooe Displacements. If a Surficial Slope Displacement occurs at any time after the 0eei022154-0010i2131149.8 aOb/0ii99 -2- 0 0 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 ("GRAD") 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 GHAD 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 reports for the Project as issued by the DRE shall contain a disclosure as to the nature and existence of the GHAD. 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 CHAD. It is understood and agreed that Declarant makes no warranty or representation as to the efficacy of the GHAD or its use for the purposes for which it is intended as expressed in this Agreement. 2. Claims Procedures and Adjustments. During the Developer's 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 CHAD 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 O6/0`21A-0010/2131149.e a06/03/99 —3— information is available. Within fifteen (15) days after receipt of any such notice, the person or entity then administering the Slope Displa-cement 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 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. 068/022154-0010/2131149.8 a06/03/99 -4- 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 ° 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 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. 3. Grace Period. 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. 066/022154-0010/2131149.8 d06/03/99 -5 - 0 0 4. Security for Developer's Obligations - Developer's Security Fund and Developer's Security Fund Account. 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 Thirty -Three Thousand Four Hundred Forty -Two Dollars ($33,422) ("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 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, tha 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. 068/022154-0010/2131149.8 a06/03/99 —6 — 4.5 Return of Developer's Security. 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 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 (7500) of the Developer's Security Amount, and if during such period, said Sum falls below seventy-five percent (750) 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 (75%) 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 (750) 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 068/022154-0010/2131149.8 ,06/03/99 -7- 0 of - all assessments levied an Association for the Association's Fund following expiration of the Period equals one hundred percent Developer's Security Amount. 0 d collected by the Restricted Assessment Developer Liability (100%) or more of the 5. Homeowner Association A m n o Fund the Association's Restricted Assessment Fund. 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 13823 [then subject to assessment] on a Dollar ($ ) 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 Thirty - Three Thousand Four Hundred Forty -Two Dollars ($33,442) 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 CessatiQn of Assessments Under Certain 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 Restricted Assessment Account reaches Thirty -Three Thousand Four Hundred Forty -Two Dollars ($33,422). 5.3 Repleniohment of the Assoc'iation's Restricted Assessment Account. In the event the Association's Restricted Assessment Account is depleted by the cost of making Covered 0$8/022154-0010/2137149.8 x06/03/99 -8- 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 Thirty -Three Thousand Four Hundred Forty -Two Dollars ($33,422) 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 Approval Reau red for Changes in Assessments Levi d by the Association Pursuant to Section 5. 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. Miscell 6.1 Additional Limitations on Slope Displacement Warranty Program. Nothing to the contrary in this Agreement withstanding, it is agreed that: 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. 068/022154-0010/2131149.8 .06/03/99 -9- 6-2 License and Right to Enter. 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 Deeds and CC&R's. 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. 6.5 Collection and Reporting. 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. o6ei022154-0010/2131349.8 a06iO3i99 —10— (• • 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. 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 13823 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 Counterparts. 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 068/022159-0010/2131149.8 ao6/03/99 —11— • 0 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 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 068/022.54-0010/2131149.8 a06/03/99 -12- ) . 0 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. 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: Stonefield Development 23333 Avenida La Caza Cotto de Caza California 92679 Telecopier: (949) 581-5090 To Association: Stonefield San Juan Homeowners' Association Stonefield Development 23333 Avenida La Caza Cotto de Caza California 92679 Telecopier:(949)581-5090 To the City: The City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, California 92675 Attn.: Director of Engineering and Building Telecopier: (949)493-1053 068/022154-0010/2131149.8 a06/03/99 - 13 - The City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano, California 92675 Attn: City Attorney Telecopier: (949)493-1053 IN WITNESS WHEREOF, this Agreement was executed on the date first above written. Attest: City Cle CITY: THE CITY FS JUAN CAPISTRANO By ,kM ILS: John Greiner, Mayor DEVELOPER: Stonefield San Juan, LLC By: Stonefield Development, a California Corporation, as managing member By: ROBERT PACK, President ASSOCIATION: STONEFIELD SAN ASSOCIATION, a profit mutual b 0eeio22154-0030/2233249.8 a06iO3i99 — 14 — JUAN HOMEOWNERS' Californ'a non - i -soration '0 • Approved as to form and content this 2'O`day of Toll , 1999 Cit ttorney Cit V of San Juan Capistrano 068/022154-0010/2131.149.8 a06/03/99 -15- �e 0 STATE OF CAhIFORNIA ss. COUNTY OF _ On I I c-pq personally appeared personally known to me ( s,�:gC; ) to be the person W whose name Cvl is/ subscribed to the within instrument and acknowledged to me that he/ y executed the same in his/fir authorized capacity (i<s), and that by his/hw4=ia .cr signature`s on the instrument the person* or the entity upon behalf of which the person() acted, executed the instrument. Witness my hand and official seal. K SAVONA Commission#12D474J Notary Public Notary Public - Coffftr d0 Orange County ir My Comm. Does pec 13,2DOP [SEAL] STATE OF CALIFORNIA COUNTY OF On personally appeare ss. , before me, 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. Notary [SEAL] OGA l02215M1-OOI G/713ll49.8 a06103199 - 1 6 - STATE OF CALIFORNIA ss. COUNTY OF _ ) CITY OF SAN JUAN CAPISTRANO Govt Code 40814 4 Civil Code 1181 On July 20, 1999 before me, Cheryl Johnson, City Clerk personally appeared - - John Greiner - - personally known to me (or--proved-to--me -on-xne-oasis-o�r--saras=acrxLry .eeviden-ae) to be the person(g)) whose name Gad is/mss subscribed to the within instrument and acknowledged to me that he %4jh(Ay executed the same in his/kt=jkkgkjx authorized capacity (), and that by his/lMrYX MIlt signature(s) on the instrument the person(F.) or the entity upon behalf of which the personps) acted, executed the instrument. Witness my hand and official seal. n� xQK�#KkAbWL c eryl Johnson, City Clerk 068/022.154-0010/2131149.8 a06/03/99 —17— - 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: A portion of section 5, township 8 south, range 7 west, San Bernardino Meridian, according to the official plat of said land filed in the district land office on April 12, 1875. Upon recordation of the final map, which is currently(As of June 3, 1999) in progress, said subdivision will be referred to as all of TRACT No. 13823 in the City of San Juan Capistrano, County of Orange, State of California. EXHIBIT "A" TO AGREEMENT ESTABLISHING SLOPE DISPLACEMENT WARRANTY PROGRAM oeeio22isn—ooioi213iia9.© a06/03/99 EXHIBIT "B" DEFINITIONS The defined terms set forth below shall have the definitions given to them herein: "Resolution" shall have the definition given to such term in Paragraph C of the Recitals to the Agreement. "Association" shall mean Stonefield San Juan Homeowners' Association, a California non-profit mutual benefit 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 3 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; (b) All manufactured slopes having a minimum height of five (5) feet in vertical height; 068/022154-0010/2131149.8 a06/24/99 os MHP am -ab � ES 71 CT SITE GM VICINITY MAP ATTACHMENT 3 RA \\ 916EL (20,0(60) lat 2" 71 CT SITE GM VICINITY MAP ATTACHMENT 3 • KAIT D SM JU4Af CR£K ROAD STONEEMM TRACT 13823 J/ SAN JUAN CAPISTRANO 2 EASEMENT FOR EQUESTRIAN ACCESS DENOTES 20' EQUESTRIAN TRAIL EASEMENT AND FENCING f1 0 01 9 n 1'b 1 5/16/00 N.T.S. 11 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 493-1 171 (949) 493-1053 (FAX) July 26, 1999 Mr. Robert C. Pack Stonefield Development 23333 Avenida La Caza Coto de Caza, California 92679 IOIp ArOtlltl is uowEe 1"I' 1776 Re: Slope Displacement Warranty Program - Tract 13823 Dear Mr. Pack: MEMBERS OF THE CIN COUNCIL DOLLENE CAMPBELL JOHN GREINER WVATT HART GIL JONES DAVID M. SWERDLIN CITY MANAGER GEORGE SCARBOROUGH At their meeting of July 20, 1999, the City Council of the City of San Juan Capistrano approved the "Agreement Establishing Slope Displacement Warranty Program" for Tract 13823, Stonefield Development. A fully -signed copy of the Agreement is enclosed for your files. A copy has been forwarded to the Orange County Recorder's Office for recordation. Please feel free to contact Sam Shoucair at 949-443-6355 if you have any questions. Very truly yours, a621 Johns City Clerk Enclosure cc: Engineering and Building Director (with enclosure) Sam Shoucair (with enclosure) OIIW USE IS San Juan Capistrano: Preserving the Past to Enhance the Future 0 County Recorder rding 1061 U61�- C PAY ***Sixty. Seven and 00/100**** TO THE ORDER OF Orange County Recorder 11100L06311' �:L22237683�:��'000967953'4�N . RESOLUTION NO. 99-7-20-2 GEOLOGIC HAZARD ABATEMENT DISTRICTS -TRACT 13823 -A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, DECLARING THAT' THE CITY OF SAN JUAN CAPISTRANO IS SUBJECT TO THE PROVISIONS OF PUBLIC RESOURCES CODE, DIVISION 17, "GEOLOGIC HAZARD ABATEMENT DISTRICTS" (TRACT 13823/STONEFIELD SAN JUAN LLC) RESOLUTION NO. 99-7-20-3, GEOLOGIC HAZARD ABATEMENT - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, DECLARING SUFFICIENCY OF PETITION, DIRECTING NOTICE TO BE MAILED TO THE PROPERTY OWNER AND SETTING A TIME AND DATE FOR PUBLIC HEARING FOR FORMATION OF A GEOLOGIC HAZARD ABATEMENT DISTRICT PURSUANT TO THE REQUIREMENTS OF PUBLIC RESOURCES CODE OF THE STATE OF CALIFORNIA, DIVISION 17 "GEOLOGIC HAZARD ABATEMENT DISTRICTS" (TRACT I-)823/STONEFIELD SAN JUAN, LLC) —� 8. APPROVAL OF AGREEMENT FOR SURFICIAL SOILS REMEDIATION PROGRAM, TRACT 13823, STONEFIELD DEVELOPMENT (STONEFIELD SAN JUAN, LLC) (600.30) • As set forth in the Report dated July 20, 1999, from the Engineering and Building Director, the "Agreement Establishing Slope Displacement Warranty Program" for Tract 13823, Stonefield Development, was approved for recording, as required by Municipal Code Section 9-10 and as conditioned in Resolution No. 90-6-19-2. • ADOPTION OF RESOLUTION ACCEPTING AN EASEMENT FOR WALL AND LANDSCAPE PURPOSES FOR PROPERTY LOCATED AT 25642 CAMINO DEL AVION (PARKSIDE PLACE, TRACT 15301 (ANITA FORSTER) (670.501 As set forth in the Report dated July 20, 1999, from the Engineering and Building Director, the following Resolution was adopted accepting an easement from Anita Forster for Landscape and Wall purposes to allow installation of a privacy wall and adjacent landscaping east of the driveway serving 25642 Camino del Avion: RESOLUTION NO. 99-7-20-4, ACCEPTING EASEMENT FOR LANDSCAPE AND WALL PURPOSES, 25642 CAMINO DEL AVION (ANITA FORSTER) - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, ACCEPTING AN EASEMENT FOR LANDSCAPE AND WALL PURPOSES LOCATED AT 25642 CAMINO DEL AVION (ANITA FORSTER) City Council Minutes -4- 7/20/99 AGENDA ITEM TO: FS -M11-3-9 SUBJECT: July 20, 1999 George Scarborough, City Manager William M. Huber, Director of Engineering & Building Consideration of Agreement for Surficial Soils Remediation Program ; Tract 13823, Stonefield Development (Stonefield San Juan, LLC.). RECOMMENDATION It is recommended that the City Council approve the "Agreement Establishing Slope Displacement Warranty Program" for Tract 13823, Stonefield Development (Stonefield San Juan, LLC. ). SITUATION A. Summary and Recommendation Tract 13823, Stonefield San Juan, LLC., is required to establish by agreement a Surficial Soils Remediation Program as provided by City Municipal Code Section 9-10, and as conditioned by Resolution No. 90-6-19-2, item 12(Attachment 1). The agreement, provided in Attaclunent 2, provides the mechanism to establish such 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 Histo On June 19, 1990, the City Council approved Diffley's Vesting Tentative Tract Map 13823. which is located southeast of San Juan Creek Road, north of Hidden Mountain (Attachment 3), which allowed the subdivision of a 34.67 -acres parcel, currently known as Stonefield San Juan, into 13 custom home lots. One of the conditions of approval requires the developer to provide a soils subsidence warranty program. When Stonefield San Juan purchased the property from Diffley, they requested to privatize / gate their community. The Final Map was submitted to the City in April of 1999 and is currently in the review process. FOR CITY COUNCIL AGE Dg Ll 0 AGENDA ITEM -2- July 20, 1999 On August 15, 1995, City Council adopted Ordinance 768 adding Municipal Code Section 9, Chapter 10, "Soils Subsidence Remediation Program". This program consists 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 (GHAD). 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 a public hearing. Stonefield San Juan, LLC. Agreement The Agreement (Attachment 2) 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. FINANCIAL CONSIDERATIONS There is no cost impact to the City's General Fund. AGENDA ITEM -3- July 20, 1999 PUBLIC NOTIFICATION Mr. Robert C. Pack, Stonefreld Development ALTERNATE ACTIONS Approve the "Agreement Establishing Slope Displacement Warranty Program" for Tract 13823, Stonefield Development (Stonefreld San Juan, LLC.). 2. Do not approve Agreement. 3. Return to staff for additional information. RECOMMENDATION It is recommended that the City Council approve the "Agreement Establishing Slope Displacement Warranty Program" for Tract 13823, Stonefreld Development (Stonefreld San Juan, LLC.). Respectfully submitted, William M. Huber Director of Engineering & Building WMH/SS Attachments: wagendn\slopestn.fld 1. Resolution No: 90-6-19-2, Approving T. Tract Map 13823 2. Agreement Establishing Slope Displacement Warranty Program 3, Vicinity Map RESOLLTiO% %0. 90-6-19-2 APPROVING VESTING TENTATIVE TRACT MAP 13823 (DIFFLEY) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA, APPROVING VESTING TENTATIVE TRACT MAP t3823 (DIFFLEY) WHEREAS, the applicant, David Diffley, 4747 Edinburg Drive, Carlsbad, California, has submitted Vesting Tentative Tract .Map 13823, proposing to subdivide approximately 34.2 acres of land into 12 residential lots with one remainder parcel located on the south side of San Juan Creek Road, east of La Novia Avenue; and, WHEREAS, the City's Environmental Review Board has determined that the proposed project will not have a significant effect on the environment, has accordingly issued a negative declaration for the project, and has otherwise carried out all requirements of the California Environmental Quality Act; and, WHEREAS, the City's Equestrian Commission has reviewed the project and forwarded it to the Planning Commission recommending approval, subject to certain conditions; and, WHEREAS, the City's Traffic and Transportation Commission has reviewed the project and forwarded it to the Planning Commission recommending approval, subject to certain conditions; and, WHEREAS, the City's Planning Commission has reviewed the project and forwarded it to the City Council recommending approval, subject to certain conditions; and, WHEREAS, a public hearing has been duly advertised and held to review and receive public testimony on the application; and, WHEREAS, the City Council of the City of San Juan Capistrano finds and determines as follows: 1. The proposed project, as conditioned, and its design and improvements are consistent with the 1.1 Very Low Density Residential and 2.0 General Open Space designations on the General Plan map and is otherwise consistent with all other elements of the General Plan. 2. The proposed project, as conditioned, conforms to all applicable requirements of Title 9 of the City's Municipal Code (Land Use). 3. The project site is physically suitable for the type and density of the proposed development. 4. The design and improvements of the proposed project will not cause substantial environmental damage; nor will said design or improvements avoidably injure wildlife or their habitat. 5. The design or improvements of the proposed project viii not cause serious public hearth problems. 6. The design or improvements of the proposed project will not conflict with easements acquired by the public at large for access through or use of property within the proposed project. 7. The design or :mprovements of the proposed project %ill not interfere with the maintenance of preservation of an historical site. 8. The design and improvement of the equestrian/hiking trail through the remainder parcel is a prerequisite to the orderly development of the surrounding area in that it will provide the necessary link between the existing San Juan Creek Road and Hidden Mountain trails. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San Juan Capistrano does hereby certify the Negative Declaration for Vesting Tentative Tract 13823. BE IT FURTHER RESOLVED, that the City Council of the City of San Juan Capistrano does hereby approve Vesting Tentative Tract Map 13823, subject to the following conditions: Expiration of Approval - Per Section 9-2.305 of the Municipal Code, this project development approval shall expire two years from the approval date. If no building permit has been issued for the project by that date, the development approval shall become null and void. 2. Home Warranty - The provisions of Chapter 8-6 of the Municipal Code (Home Warranty Ordinance) shall apply to any person, firm or corporation selling or offering for sale within the project three or more dwelling units --not pr= io r.ly occupied for residential purposes --during any 12 -month period. 3. CC&R's - A set of conditions, covenants and restrictions (CC&R's) shall be prepared and implemented for the project. Said CC&R's shall be approved by the Director of Community Planning and Development, the City Engineer, and the City Attorney prior to approval of a final tract map. The CC&R's shall include at a minimum: a. Provisions on the use and maintenance, by the homeowners' association, of recreation areas, other common areas, and slopes. b. The prohibition of radio or television antennas projecting above any roof eaves (pursuant to Section 9-3.609 of the Municipal Code). The CC&R's shall also include a stipulation that the preceding CC&R provisions and restrictions shall not be altered to the future without prior City approval. 4. Grading Plan - A preliminary grading plan for the project shall be reviewed by the Equestrian Commission and approved by the Planning Commission prior to approval of a final map. A final grading plan shall be reviewed and approved by the Director of Community Planning and Development and the City Engineer prior to issuance of grading permits. -2- 5. Equestrian Grade Cross ng -The applicant shall nstall :ne equesv.ar. grace crossing at San Juan Creek Road prior to acceptance of rough grading arc release for building permits by the Building Official. The equestrian grace crossing malt consist of roadway striping and four signs - two on each side of San Juan Creek Road, in accordance with the recommendations in the BSI Study, dated .August 1989, on file at the City (with the deletion of the signs with arrows). 6. Landscape and Wall Plans - Landscape, street tree, and fence/wall plans snail be prepared and implemented for the entire project. Design development :andscape plans, including fence/wall plans, shall be approved by the Planning Commission prior to approval of a final map. Said pians shall comply with the approved streetscape for San Juan Creek Road. Following such plan approval, final working drawings shall be approved by the Director of Community Planning and Development prior to issuance of grading permits. The subject landscape plans shall include a massing of vertical evergreen trees such as Eucalyptus leg. camaldulensis, E. atridora, or E. globulus between the northeasterly property line and the residential parcels. Landscape plans shall incorporate the approved streetscape material for San Juan Creek Road. Landscaping Installation - Landscaping shall be installed as follows: a. Erosion -control landscaping for all manufactured slopes shall be installed immediately after acceptance of rough grading by the City. (1) Street trees and all other non -erosion -control landscaping shall be installed in accordance with a landscape plan approved by the Director of Community Planning and Development. Building permits shall not be issued for any dwelling unit within a given phase until all landscaping has been installed and approved by the Department of Community Planning and Development, pursuant to the approved plan. 8. Landscape :Maintenance and Maintenance Easements - The developer shall be responsible for adequately installing and maintaining a!! landscaping until such maintenance may be assumed by the homeowners' association. An open space maintenance easement shall be created over all major slopes that are within residential lots. Landscaping on said slopes shall be maintained by the homeowners' association. 9. Street Names - Street names shall be approved by the Director of Community Planning and Development prior to approval of a final map. 10. Vehicular Access Rights - Vehicular access rights to all primary, secondary, and commuter highways shall be released and relinquished to the City except at street intersections. ll. Geotechnical Study - A geotechnical feasibility study shall be submitted by the developer to determine the seismic safety and soils stability of all proposed grading and development within the project and preliminary pavement sections and substructure bedding/backfill requirements. The report shall be approved by the City Engineer and the Building Official prior to the approval of a final tract map. -3- 12. Soils Subsidence Program - Tn.e eevewper sra:, in, p.ement a so:.s subsidence program for all resicential lots. T -e program sna.. De a pra ed by e C,t. Engineer and the Building Official prior to the approval of a final trac-_ -nap. 13. Street Improvement Pians - The developer shall subm.: street inipro%ernent plans, prepared by a civii engineer ano conforming to Munic:pa' Code Section 9-4.103, at the time of first suori,tta: of :.nr ':nal ;raft 3,ap. �a.c pians sha:l be approved by the City Engineer prior to street construction. 14. Water and Sewer Improvements - Water and sewer improvements shall be designed and constructed per Municipal Code Section 9-4.109 and 9-4.11 1 respectively. 15. Storm Drains - Drainage facilities shall be designed and constructed per City .Master Drainage and City standards. Also, prior to the approval of a final tract map, the developer shall submit a recorded instrument providing for connection of private storm drains from the project into City storm drain facilities. 16. Utilities and Other Improvements - Ltilities shall be underground per the .Municipal Code. All utility undergrounding and all driveways, sidewalks, street lights, and drainage facilities which directl} serve the proposed development shall be located and constructed per Municipal Code Article 9-4.1. 17. Cross Gutters - Cross gutters shall be prohibited unless approved by the City Engineer. 18. Equestrian Trail -The equestrian trail shall be constructed for the entire site completing the link between the Hidden Mountain Trail and San Juan Creek Road). Near San Juan Creek Road, as shown on the subdivision map, an interim trail alignment shall be constructed within the SDG&E Row to link directly with the existing equestrian trail on the north side of the road. Prior to final t.-ct mcp approval, SDG&E shall grant an easement to the City for trail purposes and the applicant shall dedicate the ultimate trail alignment to the Diffley/Hoffman property line. Prior to the acceptance of rough grading and the release of building permits, the subdivider shall fully improve the interim trail through the SDG&E Row, fully improve the trail to the Hidden Mountain trail, and grade the ultimate trail link from the interim trail intersection to the Diffle}/Hoffman property line near San Juan Creek Road. 19. Development Concept Plan - The applicant shall submit a development concept plan for the remainder parcel indicating the development botential and feaslbiiity for said remainder parcel. The development concept plan shall indicate potential access, grading and building pad :ovation; and be prepared at an acceptable scale. The development concept plan shall be reviewed and approved by the Planning Commission prior to final tract map approval. Final approval shall take the form of either a Development .Agreement between the City and the applicant or a Specific Development Plan pursuant to .Municipal Code Section 9-3.423.5 (Planned Development District). 20. Potential Rezone Application - if the proposed development concept plan is deemed inconsistent with the existing zoning regulations (e.g., more than one residence), a -4- A 0 (.. rezone application cors stent Development District) shat; be concept. .n Slunicipa! Code Section 9-3.423.5 (P!anned s -omitted which wi:! support said development PASSED, APPROVED, AND ADOPTED this 19th day of June 1990. C7.ARY L. H L'SDORFER, titA OR ATTEST: C Y RK STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss CITY OF SAN JUAN CAPISTRANO ) 1, GEORGE SCARBOROUGH, Acting City Clerk of the City of San Juan Capistrano, California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. 90-6-19-2 adopted by the City Council of the City of San Juan Capistrano, CaLiornia, at a regular meeting thereof held on the 19th day of June , 1990, by the following vote: AYES: Councilmen Schwartze, Buchheim, Bland and Mayor Hausdorfer NOES: ABSTAIN: ABSENT: Councilman Friess (SEAL) -5- iE5 :EEiC3i1tE -.. �.• � .tea• OS T :MHP am -36 �% i t :,im& ES '~ .mora ^ri RaS..�i 0 CT SITE GM VICINITY MAP ATTACHMENT <_V. l3yfi"�iA. 0 CT SITE GM VICINITY MAP ATTACHMENT