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WATERBURG, PAULETTE / ELEANOR• 0 SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY LITTLE HOLLYWOOD AFFORDABLE HOUSING PROGRAM RESIDENTIAL LEASE This residential lease is made this 1st day of February, 2006, by and between the San Juan Capistrano Community Redevelopment Agency, hereinafter "Agency", and Paulette and Eleanor Wattenburg, hereinafter referred to as "Tenant". Recitals: 1. This Lease is for property which has been rehabilitated and purchased by the San Juan Capistrano Community Redevelopment Agency (hereinafter referred to as AAgency@) with the assistance of Community Development Block Grant (CDBG) funds from the Department of Housing & Urban Development (HUD). 2. As such, this property is required to be leased only to individuals who qualify under HUD's income standards as being in the very low and low income bracket. Rent is calculated on an annual basis based upon the recommendations and formulas of HUD and other State housing agencies. Guidelines for income qualification and rent calculation are provided in the document titled ALittle Hollywood Affordable Rental Housing Program Guidelines/Operating Procedures@ (hereinafter referred to as AProgram Guidelines@) (Exhibit A). Now Therefore, Agency and Tenant mutually agree as follows: 1. Premises: Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, on the terms and conditions hereinafter set forth, that certain real property and the residence located thereon situated in the City of San Juan Capistrano, County of Orange, State of California, commonly known as 26571 Ramos Street, San Juan Capistrano, CA 92675. 2. Term: The term of this lease shall be for a period of twelve (12) months, to and including February 1, 2006 through January 31, 2007. 3. Rent: Tenant shall pay to Landlord as rent for the Premises, the sum of 402.00 dollars per month, in advance on the first day of each month during the term hereof. Rent shall be payable without notice or demand and without any deduction, off -set, or abatement in lawful money of the United States to the Landlord at the address stated herein for notices or to such other persons or such other places as the Landlord may designate to Tenant in writing. A 0 0 4. Security Deposit: Tenant has on deposit the sum of $588.00 dollars as a security deposit for the Tenant's faithful performance of the provisions of this Lease. If Tenant fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Landlord may use the security deposit, or any portion of it, to cure the default or compensate Landlord for all damages sustained by Landlord resulting from Tenant's default. Tenant shall immediately on demand pay to Landlord the sum equal to that portion of the security deposit expended or applied by Landlord which was provided for in this paragraph so as to maintain the security deposit in the sum initially deposited with Landlord. Landlord shall not be required to keep the security deposit separate from its general account nor, shall Landlord be required to pay Tenant any interest on the security deposit. If Tenant performs all of Tenant's obligations under this Lease, the security deposit or that portion thereof which has not previously been applied by the Landlord, shall be returned to Tenant within fourteen (14) days after the expiration of the term of this Lease, or after Tenant has vacated the premises, whichever is later. 5. Possession: If the Landlord for any reason cannot deliver possession of the Premises to Tenant at the commencement of the term, the Landlord shall not be liable to Tenant for any loss or damage resulting therefrom, but there shall be a proportionate deduction of rent; nor shall this Lease be void or voidable for a period of ten (10) days thereafter; and if for any reason the Premises cannot be delivered within said ten (10) day period, the Tenant may, prior to Landlord's delivery of the Premises, declare this Lease to be null and void and all money paid to Landlord shall be refunded to Tenant. 6. Use: It is agreed that the Premises shall be used only for residence purposes, for one family consisting of 2 adult(s), (hereinafter referred to as ATenant Household@ and as referenced in Exhibit A ), 0 minor children, and _ 0_ pet(s)', and for no other purposes whatsoever. Any change in occupants must be approved in writing by Landlord. Tenant in his possession, use and occupancy of the Premises agrees to observe and comply with all restrictions, laws and ordinances affecting said property or occupancy thereof including all rules and requirement as outlined in the Little Hollywood Affordable Rental Housing Program Guidelines and Operating Procedures as amended from time to time (See Exhibit A). Tenant further agrees that no use shall be made of the Premises, nor acts done which will increase the existing rate of insurance upon the Premises, or will cause a cancellation of any insurance policy covering the Premises. 7. Utilities: The Tenant shall pay for all utilities including water, gas, heat, light, power, telephone service, and other services supplied to the Premises. 8. Repairs and Maintenance- The Landlord shall at its sole cost and expense keep and maintain the exterior walls, roof, electrical wiring, heating system, air conditioning systems (if any), water heater, built-in appliances, and water lines in good and sanitary order, condition and repair, except where damage (if any) has been caused by the abuse or negligence of the Tenant, in which event Tenant shall repair same at his sole cost and expense. Any damage caused by the Tenant will be repaired by the Landlord and billed to the Tenant. Except as herein provided, Tenant hereby agrees that the Premises are now in a tenantable and good condition and shall at his sole cost and expense keep and maintain the Premises, appurtenances and every part thereof, in the manner in which they were n U received, reasonable wear and tear excepted, including household furniture, fixtures, goods and chattels belonging to the Landlord, so that they shall remain in good and satisfactory order, condition and repair. The Tenant agrees to maintain landscaping, and Tenant agrees to adequately water said landscaping. 9. Alterations and Additions: Tenant shall not, without the Landlord's prior written consent, make any interior or exterior alterations, improvements or additions in or about the Premises, with the exception of movable furniture. Any approved alteration oraddition shall at once become a part of the realty and belong to the Landlord. The Tenant shall keep the Premises free from any liens arising out of any work performed, materials furnished or obligations incurred by the Tenant. 10. Hold Harmless: Tenant shall indemnify and hold Landlord harmless from and against any and all claims arising from Tenant's use or occupancy of the Premises or from any activity, work, or things which may be permitted or suffered by Tenant in or about the Premises including all damages, costs, attorney's fees, expenses and liabilities incurred in the defense of any claim or action or proceeding arising therefrom. Except for Landlord's willful or grossly negligent conduct, Tenant hereby assumes all risk of damage to property including household furniture and goods, or injury to any person in or about the Premises from any cause, and Tenant hereby waives all claims in respect thereof against Landlord. 11. Damage to Premises: (a) If the Premises are so damaged by fire or from any other causes as to render it untenantable, then either party shall have the right to terminate this Lease as of the date on which such damage occurs, through written notice to the other party, to be given within fifteen (15) days after the occurrence of such damage; except that should such damage or destruction occur as the result of the abuse or negligence of Tenant, or its invitees, so as to render the Premises untenantable, the Landlord only shall have this right of termination. Should the right be exercised by either the Landlord or Tenant, then rent for the current month shall be prorated between the parties as of the date on which such damage occurred and any prepaid rent and unused security deposit shall be refunded to Tenant. (b) If this Lease is not terminated as provided in this paragraph 13, the Landlord shall promptly repair the Premises and there shall be a proportionate reduction of rent until the Premises are repaired and ready for Tenant's occupancy, such proportionate reduction to be based upon the extent to which the making of repairs interferes with reasonable use of the Premises. 12. Assignment and Subletting: Tenant shall not voluntarily or by operation of law assign, transfer, sublet, mortgage, or otherwise transfer or encumber all or part of Tenant's interest in this Lease or in the Premises. 13. Default: It is agreed between the parties hereto that if any rent shall be due hereunder and unpaid, at any time during the term of the lease, or if the Tenant Household is not in compliance with any provision of the Program Guidelines, including income 0 0 qualifications, or if Tenant shall default and breach any other covenant or provisions, Landlord may terminate this agreement in accordance with law based upon breach of this agreement. Further, the Landlord may, at his option, either maintain the Lease in full force and effect and recover the rent and other charges as they become due or, in the alternative, terminate this Lease. In addition, the Landlord may recover all rentals and any other damages and pursue any other rights and remedies which the Landlord may have against the Tenant by reason of such default as provided by law. 14. Abandonment: Tenant shall not vacate or abandon the Premises at any time during the term of this Lease. 15. Entry by Landlord: The Tenant shall permit the Landlord and/or its agents to enter into and upon the Premises at all reasonable times and upon reasonable notice for the purpose of inspecting it or for the purpose of maintaining the Premises, or for the purpose of exhibiting the Premises to prospective purchasers or tenants. 16. Attorney's Fees: If either party commences an action against the other party arising out of or in connection with this Lease, the prevailing party shall be entitled to have and recover from the losing party reasonable attorney's fees and costs of suit. 17. Surrender: On the last day of the term of this Lease, Tenant shall surrender the Premises to Landlord in good condition, broom clean, ordinary wear and tear and damage by fire and the elements excepted. 18. Binding on Successors and Assigns: Each provision of this Lease performable by Tenant shall be deemed both a covenant and a condition. The terms, conditions and covenants of this Lease shall be binding upon and shall inure to the benefit of each of the parties hereto, their heirs, personal representatives, successors and assigns. 19. Notices: Whenever under this Lease a provision is made for any demand, notice or declaration of any kind, it shall be in writing and served either personally or sent by registered or certified United States mail, postage prepaid, addressed at the addresses as set forth below: TO LANDLORD AT: City of San Juan Capistrano Community Redevelopment Agency 32400 Paseo Adelanto San Juan Capistrano, CA 92675 TO TENANT AT: Paulette and Eleanor Wattenburg 26571 Ramos Street San Juan Capistrano, CA 92675 Such notice shall be deemed to be received within forty-eight (48) hours from the time of mailing, if mailed as provided for in this paragraph. 0 0 20. Waivers: No waiver by Landlord of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Tenant of the same or any other provisions. 21. Time: Time is of the essence of this Lease. 22. Joint and Several Obligations: "Party" shall mean Landlord and Tenant; and if more than one person or entity is the Landlord or Tenant, the obligations imposed on the party shall be joint and several. The parties hereto have executed this Lease on the date first above written. SAN JUAN CAPISTRANO COMMUNITY REDEVELOPMENT AGENCY By elv&-.._ David F. Adams, Executive Director