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10-0426_SEACOUNTRY HOMES (RSB HOMES, INC)_Memo0 0 MEMORANDUM April 27, 2010 TO: Maria Morris, City Clerk FROM: Ayako Rauterkus, Management Analyst K/ SUBJECT: Payment Bond Certificate in lieu of Home Warranty Bond — Lot 1 thru 4, Tract 16748, Lot 1, 5 &6, Tract 16749, RSB Homes, Inc; DBA SeaCountry Homes SeaCountry Homes, builder of the homes on above mentioned lots have posted the Payment Bond Certificated in lieu of Home Warranty Bond required the City. The bond will in effect for three (3) years after issuance of certificate of occupancy. Please keep the attached original in your file. r_vZ Attachments 0 0 Pacifica San Juan - The SeaCountry Group Warranty Bond 4/8/2010 16748 1 401,286.18 Bond Tract Lot Value Amount 16748 1 401,286.18 4,012.86 16748 2 353,782.25 3,537.82 16748 3 401,990.18 4,019.90 16748 4 353,782.25 3,537.82 16749 1 401,990.18 4,019.90 16749 5 351,131.55 3,511.32 16749 6 351,131.55 3,511.32 Total Bond Amount 26,150.94 Payment Received: 4'? �Q 10 Check No:_�'�( CeYPfu Account No: 90-ZwOe-23IA4-DIrO00-000 32400 PASEO ADELANTO SAN JUAN CAPISTRANO, CA 92675 (949) 4931171 (949) 493.1053 FAx www.sanjuancapzstrano.org March 22, 2010 Mr. Thomas Atkin Chief Financial Officer The SeaCountry Group 2451 Impala Drive, Suite A Carlsbad, CA 92010 Subject: Home Warranty Program — Tract 16748 Belle Cliff Dear Mr. Atkin: lavtk 10 44) 0 MEMBERS OF THE CRYCOUNGL SAMALLEYAM IAIIRAFREESE 7HOMAS W. HRISAR MARK NUAM DR LONDRES USO The purpose of this letter is to notify you that the City of San Juan Capistrano has a Home Warranty Program that will affect your above -referenced housing project. The program requires sellers offering more than four new residential dwelling units during a 12 -month period to provide home warranties to insure against faulty workmanship and materials and major construction defects. I have enclosed copies of the Home Warranty Ordinance, an example of a Statutory Performance Bond, and other information about the program. Please note that the City will not issue Certificates of Occupancy until receipt of the home warranty funds to the Planning Department either in the form of cash or a cash instrument at the rate of one - percent (I%) of the valuation amount indicated on each building permit. Please call me at (949) 443-6325 if you have any questions about the Home Warranty Program or if I can assist you in any way. Sincerely, Aa auterkus Management Analyst Community Development Department Attachments San Juan Capistrano: Preserving the Past to Enhance the Future mIW%Pwa HOME WARRANTY PROGRAM INFORMATION Overview The Home Warranty Program was established by the City Council in September, 1975 to ensure against faulty workmanship and structural defects in newly -constructed homes._ The program requires sellers offering more than four new residential dwelling units during a 12 -month period to provide home warranties for each residence for a period of three years. The City s Planning Department administers this program. Program Requirements When a builder offers for sale more than four newly -constructed homes within a 12 -month period, the Home Warranty Program provisions take effect. Issuance of the fifth Certificate of Occupancy for a particular builder will be withheld pending receipt of the financial security for all five homes. Please note that every additional home constructed and ready for occupancy within 12 months from the last Certificate of Occupancy will also be subject to the provisions of the Home Warranty Program. Financial Security The City requires a financial security of one percent (1 %) of the building valuation for each home as indicated on the building permits. The security may be in the form of a check payable to the City of San Juan Capistrano, an acceptable letter of credit, a certificate of deposit, or a surety bond with a company that has a minimum rating of "A- and PSC II, or better" as set forth in the Best Rating Guide. The security provided should be in a standard format and requires approval by the City Attorney. Warren Period Theprogramrequiresathree-yearwarrantyperiodfrom the date ofsale. Unless otherwise requested, the City uses the date of issuance of a Certificate of Occupancy as the date of sale. The City may, however, request copies of any pertinant documents to verify the close of escrow date and the end of the warranty period, At the end of the warranty period, the Citywill refund the financial security to the builder. However, . if warranty problems arise and remain unresolved by the builder during the three-year warranty period, the City will correct the problems and deduct any costs incurred from the financial securities ----deposited-by-the-builder.- Municode Pae I of 3 San Juan Capistrano, California, Code of Ordinances >> TITLE 8 - BUILDING REGULATIONS >> CHAPTER 9. - HOME WARRANTY PROGRAM Sec. 8-9.01. - Purpose and intent In keeping with the objectives of the General Plan which call for programs which provide high quality housing and which also provide for the maintenance of structures and appurtenant installations, the home warranty program described in this chapter is established. Further, the program shall require sellers of new residential dwelling units to provide home warranties to insure -against faulty workmanship and materials and major construction defects. Compliance with the terms of this program shall be a condition of approval, amendment, extension or modification to any tentative maps. (S 1, Ord. eed, as amended by § A Ord. 653, end § 1,Ord. 734) Sec. 8-9.02. —Definitions. For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows; (a) "Buyer" shall mean any person, organization or homeowner's association which acquires a possessory interest, other than a leasehold, to a dwelling unit from a seller either directly or by mesne conveyance within the three (3) year warranty period. "Buyer" shall not include any person, firm, corporation, partnership, association, or organization selfing orotfering for We not more than four (4) dwelling units during each twelve (12) month period. "Buyer' shall Include all successors in interest during the three (3) year warranty period. (b) "Seller" shall mean any person, firm, corporation, partnership, association, or organization selling, or soliciting for sale, dwelling unitswkhin the City, whether in fee, under a contract of sale, option to purchase, or in a condominium development. "Seller" shall Include any assignee or successor in interest of the original warranty seller but shall not include any person, firm, corporation, partnership, association, or organization selling or offering for sale not more than four (4) dwelling units during each twelve (12) month period. (c) "Date of sale" shall mean the date.a buyer acquires the right to occupy a dwelling unit or the date of his actual occupancy, whichever shall first occur. (d) "Dwelling unit" shall mean any residential structure, accessory structure, or condominium unit, including common ownership structures and accessory structures not previously occupied for residential purposes. (a) " sully workmanship and materials" shah mean: 0 (1) Actual damages to the structural components of a dwelling unit or its driveways, services walks, gutters, masonry, roofs, and overhangs proximately resulting from: (a) negligent or faulty design and/or installation; (b) the installation of defective or improper materials; and/or (c) the failure to install materials; (2) Actual damages- proximately resulting from Improper grading or water penetration proximately resulting from faulty design or workmanship; and, proximately resulting from Nutty design, workmanship, installation, or defective or http://library.municode.comlprint.aspx?clidntID=16607&HTMRequest=http%3a%2PIo2fli... 3/22/2010 10 Sec. 8-9.01. - Purpose and intent In keeping with the objectives of the General Plan which call for programs which provide high quality housing and which also provide for the maintenance of structures and appurtenant installations, the home warranty program described in this chapter is established. Further, the program shall require sellers of new residential dwelling units to provide home warranties to insure -against faulty workmanship and materials and major construction defects. Compliance with the terms of this program shall be a condition of approval, amendment, extension or modification to any tentative maps. (S 1, Ord. eed, as amended by § A Ord. 653, end § 1,Ord. 734) Sec. 8-9.02. —Definitions. For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows; (a) "Buyer" shall mean any person, organization or homeowner's association which acquires a possessory interest, other than a leasehold, to a dwelling unit from a seller either directly or by mesne conveyance within the three (3) year warranty period. "Buyer" shall not include any person, firm, corporation, partnership, association, or organization selfing orotfering for We not more than four (4) dwelling units during each twelve (12) month period. "Buyer' shall Include all successors in interest during the three (3) year warranty period. (b) "Seller" shall mean any person, firm, corporation, partnership, association, or organization selling, or soliciting for sale, dwelling unitswkhin the City, whether in fee, under a contract of sale, option to purchase, or in a condominium development. "Seller" shall Include any assignee or successor in interest of the original warranty seller but shall not include any person, firm, corporation, partnership, association, or organization selling or offering for sale not more than four (4) dwelling units during each twelve (12) month period. (c) "Date of sale" shall mean the date.a buyer acquires the right to occupy a dwelling unit or the date of his actual occupancy, whichever shall first occur. (d) "Dwelling unit" shall mean any residential structure, accessory structure, or condominium unit, including common ownership structures and accessory structures not previously occupied for residential purposes. (a) " sully workmanship and materials" shah mean: 0 (1) Actual damages to the structural components of a dwelling unit or its driveways, services walks, gutters, masonry, roofs, and overhangs proximately resulting from: (a) negligent or faulty design and/or installation; (b) the installation of defective or improper materials; and/or (c) the failure to install materials; (2) Actual damages- proximately resulting from Improper grading or water penetration proximately resulting from faulty design or workmanship; and, proximately resulting from Nutty design, workmanship, installation, or defective or http://library.municode.comlprint.aspx?clidntID=16607&HTMRequest=http%3a%2PIo2fli... 3/22/2010 Municode Page 2 of 3 (f) "Major construction defect" shall mean and include actual damages to the pad or the load-bearing portion of a dwelling unit "or appurtenant and accessory structures, such as damages due to soil movement, which affects its load-bearing function and has -a substantial adverse effect or is imminently likely to produce a - substantially adverse effect on the use of the dwelling unit for residential purposes. Also included are major structure and/or construction defects which do or may render the structure unsafe or hazardous for occupancy. (g) "Residential purposes" shall mean the use of a structure for human habitation or the use of a common - ownership or accessory structure for its intended purposes. (h) "Commercial home warranty provider' shall mean a commercial insurance entity or warranty corporation which is licensed to provide coverage as specified by this chapter. (fl, o% 660, as emendedbyg t Ord. 655, andg 1, Ord 734) Sec. 8-9.03. -Warranties: Required. Every seller of dwelling units within the City, prior to the date of sale, shall warrant in writing to the buyer of such dwelling units, and/or such buyers heirs, devices, assigns, or successors in interest, that the units, for a period of three (3) years after date of sale, shall be free from faulty workmanship and materials and major construction defects as defined in this chapter. (§ 1, Ord. 606, as emended by § Z OM. 655) Sec. 8-9.04. -Warranties: Form. (a) The seller shall provide evidence of active entoHmentmillha commercial -home warranty provider such that each dwelling unit o re or sate is provided warranty coverage in accordance with the terns of this chapter. (b) Seller shall submit documentation of his enrollment with a commercial home warranty provider for City review. Seller shall also provide documentation of coverage for each dwelling unit for which warranty is being provided. ($1, Ord. 600, ss amended by § Z Ord. 655, and § 1, Ord. 734) Sec. 8-9.05. - Limits of liability. Notwithstanding the foregoing provisions of this chapter, the seller shall not be liable under any warranty required by this chapter for: (a) Defective design or materials supplied by the buyer or Installed under his direction; (b) Normal wear and tear or deterioration of the dwelling unit; (c) Dampness or condensation due to the failure of the buyer to maintain adequate ventilation or reasonable and proper use and maintenance of the dwelling unit; (d) Negligence, Improper maintenance or operation, or alteration by parties other than the seller, or the sellers subcontractors or agents, with respect to the dwelling wilt and its systems, appliances, equipment, and factures; (e) Changes or alterations by parties other than the seller, or the sellers subcontractors or agents, of the grading of the ground; (1) Landscaping, including plants, grass, and trees; (g) Accidental loss or damage, including, but not limited to, fire, explosion, smoke, water escape, unforeseeable changes in the level of the underground water table, glass breakage, windstorms, hall or lightning, falling trees, aircraft, and vehicles, floods, or earthquakes; (h) Loss or damage which occurs after the dwelling unit is no longer used primarily as a residence; construed to abrogate or detract from any statutory or common law rights which a buyer may have against a http://library.municode.com/print.aspxTclientlD=16607&HTMRequest=http%3a%2Plo2fli... 3/22/2010 Municode Pae 3 of 3 seller for breach of warranty or other cause of action. f§ 1,0 rd. 660, as amended by f Z Ord. 655) _,. .. .. Sec. 8-9.06. - Compliance with terms of warranties. (a) The buyer shall promptly notify the seller, with a duplicate copy to the Administrative Services Officer of the City, of any defects which are covered by the fame warranty pursuant to this chapter. (b) The seller, upon the receipt of such notification, shall promptly respond to the notification, cause an investigation to be made, and either. (1) At his sole cost and expense, correct all defects in the home covered by the warranty; or (2) Pay to the buyer the reasonable cost of correcting such defects provided the buyer has provided estimates from two (2) licensed contractors specifying the full cost of correcting the defects. (c) Should the seller refuse or fail to discharge his obligations as specified in this section, the buyer shall be entitled to make claim directly upon the carrier of commercial home warranty coverage in which the seller is enrolled for purposes of this chapter. (§ f, Ord. 660, as amended by § 2, Ord. 655, end; f, Oro 734) Sec. 8-9.07. - Administration fee. Each seller subject to the provisions of this chapter shall pay to the Cdy at the time of providing proof of membership In a commercial home warranty program, an administration fee In an amount to be set by resolution of the City Council which is reasonably calculated to reimburse City for the actual costof administering the requirements of the program. Said fee shall be nonrefundable and subject to revision by resolution. ff f, Ord. 724) http://library.municode.com/print.aspx?clientID=16607&HTMRequest=http%3ae/62P/o2fli... 3/22/2010 STATUTORY PERFORMANCE BOND KNOW ALL MEN BY THESE PRESENTS, that . as Principal, hereinafter called DEVELOPER, and as Surety, hereinafter called SURETY, are held and firmly bound unto the City of San Juan Capistrano, as Obligee, to guarantee performance of the home warranty, as required and defined in the City of San Juan Capistrano Municipal Code, Sections 8-9.01 et seq., for San Juan Capistrano residential tract # , Lots I in the amount of Dollars ($ ) for payment whereof DEVELOPER and SURETY bind themselves, their heirs, executors, administrators, successors, and assigns, jointly and severally, fairly by these presents. WHEREAS, DEVELOPER is required under San Juan Capistrano Municipal Code Sections 879.01 et seq. to post a statutory performance bond to provide a home warranty to insure against faulty workmanship and materials and construction defects. NOW, THEREFORE, the condition of these obligations is such that, If Principal shall promptly and faithfully perform said statutory obligations, as set forth in the San. Juan Capistrano Municipal Code Sections 8-9.01 and following, then these obligations shall be null and void; otherwise they shall remain in full force and effect. SURETY waives whatever legal right it may have to require that'a demand be made first against the DEVELOPER in the event of a default. BE IT FURTHER RESOLVED, that: 1. As a part of the obligation secured hereby, and in addition to the face amount specified, there shall be included costs and reasonable expenses and fees, including reasonable attorney's fees incurred by City in successfully enforcing such obligation, all to be taxed as cost and included in any judgment rendered. 2. Said SURETY, for value received, hereby stipulates and agrees that no change, extension of time, alteration, or modification of statutory obligation, or of the work to be performed thereunder, shall in any way affect its obligations or this bond, and it does hereby waive notice of any such change, extension of time, alterations, or modifications, or of the work to be performed thereunder. Executed the _ day of at California. APPROVED AS TO FORM: DEVELOPER By- Title (NOTARIZATION AND SEAL) Omar Sandoval City Attorney SURETY By Title UNION BANK, N.A. PAYMENT BOND CERTIFICATE • Automatic Renewal, Non-Negotiable Certificate Serial Number: 2349007928 Office of Account: SAN DIEGO REAL ESTATE DEPOSITS Account Number: 2349007928 Amount Deposited $26,150.94 On April 20, 2010, Twenty Six Thousand One Hundred Fifty And 94/100 Dollars was deposited for 091 Days by RSB HOMES, INC.; DBA SEACOUNTRY HOMES (Depositor) and is payable to CITY OF SAN JUAN CAPISTRANO on July 20, 2010 (the Maturely Date), upon presentation of this certificate, properly endorsed. This deposit will earn interest at the rate of 00.250% compounded daily using a 365-day year, for an annual percentage yield of 00.250%. Interest will be paid to the Depositor At Maturity. If this Certificate is not presented for payment on the account's Maturity Date or within 10 days after that date, the deposit will be renewed for a like term at the interest rate in effect on the account's Maturity Date.This Certificate is transferable. If all or any part of this deposit is withdrawn before the account's Maturity Date, the amount withdrawn may be subject to an early withdrawal or compensating fee. ijk_ — AUTH IZED SIGNATURE FORM 03117-OASIS (F.REV.07/2009)