(A) Sample subdivision improvement agreement.
ELWOOD CITY SUBDIVISION IMPROVEMENT AGREEMENT Parties. The parties to this subdivision improvement agreement (“the agreement”) are ____________________(“the developer”), ___________________ (“bank”), and Elwood City (“the city”). Effective date. The effective date of this agreement will be the date that final subdivision plat approval is granted by the Elwood City Council (“the City Council”). (A) Recitals. WHEREAS, the developer seeks permission to subdivide property within the Elwood City, to be known as _______________________________________ (the “subdivision”), which property is more particularly described on Exhibit A attached hereto and incorporated herein by this reference (the “property”); and WHEREAS, the city seeks to protect the health, safety and general welfare of the residents by requiring the completion of various improvements in the subdivision and thereby to limit the harmful effects of substandard subdivisions, including premature subdivisions which leave property undeveloped and unproductive; and WHEREAS, the purpose of this agreement is to protect the city from the cost of completing subdivision improvements itself and is not executed for the benefit of material, men, laborers, or others providing work, services or material to the subdivision or for the benefit of lot or home buyers in the subdivision; and WHEREAS, the mutual promises, covenants, and obligations contained in this agreement are authorized by state law and the city’s subdivision ordinances: THEREFORE, the parties hereby agree as follows: (B) Developer’s and bank’s obligations. (1) Improvements. The developer will construct and install, at his, her, or their own expense, those on-site and off-site subdivision improvements listed along with the cost of those improvements on Exhibit B attached hereto and incorporated herein by this reference (“improvements” or “improvement”). The developer’s obligation to complete the improvements will arise upon final plat approval by the city, will be independent of any obligations of the city contained herein, and will not be conditioned on the commencement of construction in the development or sale of any lots or improvements within the development. (2) Security. To secure the performance of the developer’s obligations hereunder, the developer shall, prior to the effective date, deposit escrow or provide a letter of credit in the amount of $______________. This amount is the estimated costs for construction and guaranty of said improvements and facilities as specifically itemized in Exhibit B, plus an additional 10% and which also includes the estimated cost for the city’s inspections and administration. This amount is for the purpose of guaranteeing the completion of said improvements. The escrow or letter of credit hereinafter referred to as “escrow” or “letter,” depending on the form, will be issued by _____________________ Bank (or other financial institution approved by the city) to be known as (“bank”), will be payable at sight to the city and will bear an expiration date not earlier than two years after the effective date of this agreement. The escrow or letter will be payable to the city at any time upon presentation of: (a) A sight draft drawn on the issuing bank in the amount to which the city is entitled to draw pursuant to the terms of this agreement; or (b) An affidavit executed by an authorized city official stating that the developer is in default under this agreement; and (c) The original of the escrow certificate. An escrow certificate will be presented to the city, will be attached as Exhibit C to this agreement, will be substantially similar to the escrow certificate attached hereto and titled “Example of Escrow Certificate,” and will be incorporated herein by this reference. (3) Standards. The developer will construct the improvements according to the public works standards and technical specifications adopted by the city, as incorporated herein by this reference. (4) Warranty. The developer shall warrant and guarantee the improvements provided for herein and every part thereof, will remain in good condition for a minimum period of one year, after the City Engineer has accepted the improvements in writing, and the developer agrees to make all repairs to and maintain the Improvements and every part thereof in good working condition during the guarantee period with no cost to the city. (5) Completion periods. The developer will commence work on the improvements within one year from the effective date of this agreement (the “commencement period”) and the improvements, each and every one of them, will be completed within two years from the effective date of this agreement (the “completion period”). (6) Compliance with law. The developer will comply with all relevant laws, ordinances, and regulations in effect at the time of final subdivision plat approval when fulfilling his, her, or their obligations under this agreement. When necessary to protect public health, the developer will be subject to laws, ordinances, and regulations that become effective after final plat approval. (7) Dedication. The developer will dedicate to the city or other applicable agency as designated by the city the improvements listed on Exhibit B attached hereto and incorporated herein by this reference pursuant to the procedure described in this agreement. (C) City’s obligations. (1) Plat approval. The city will grant final subdivision plat approval to the subdivision under the terms and conditions previously agreed to by the parties if those terms and conditions are consistent with all relevant state laws and local ordinances in effect at the time of final plat approval. Release of the final plat Mylar shall not be released for recording until this agreement is executed and the escrow agent or financial institution has issued a certificate that the funds have been secured with them in accordance with this agreement. (2) Inspection and certification. The City Engineer will inspect the improvements as they are being constructed and, if acceptable to the City Engineer, certify such improvements as being in compliance with the standards and specifications of the city. Developer shall notify the City Engineer of its intent to install or commence installation of each off-site and on-site improvement within 24 hours prior to commencement so that the City Engineer, or an authorized representative, may inspect and verify and approve such installation. Such inspection and certification by the City Engineer, if appropriate, will occur within seven days of notice by the developer that he, she, or they desires to have the city inspect the improvements. Before obtaining certification of any such improvements, the developer will present to the city valid lien waivers from all persons providing materials or performing work on the improvements for which certification is sought. Certification by the City Engineer does not constitute a waiver by the city of the right to draw funds under the escrow or letter on account of defects in or failure of any improvement that is detected or which occurs following such certification. All fees, including drive time to site, for inspections and reviews of the improvements by the City Engineer shall be paid by the developer to the city within 30 days of receiving an invoice from the city of those City Engineer fees. (3) Notice of defect. The city will provide timely notice to the developer whenever inspection reveals that an improvement does not conform to the standards and specifications shown on the approved subdivision improvement drawings on file in the City Engineer’s office or is otherwise defective. The developer will have 30 days from the issuance of such notice to cure or substantially cure the defect. The city may not declare a default under the agreement during the 30-day defect. The developer will have no right to cure defects in or failure of any improvement found to exist or occurring after the city accepts dedication of the improvement(s). (4) Acceptance of dedication. The city or other applicable agency will accept the dedication of any validly certified improvement within 30 days of the developer’s offer to dedicate the improvement. The city or agency’s acceptance of dedication is expressly conditioned on the presentation by the developer of a policy of title insurance, where appropriate, for the benefit of the city showing that the developer owns the improvement in fee simple and that there are no liens, encumbrances, or other restrictions on the improvement unacceptable to the city in its reasonable judgment. Acceptance of the dedication of any improvement does not constitute a waiver by the city of the right to draw funds under the escrow on account of any defect in or failure of the improvement that is detected or which occurs after the acceptance of the dedication. The improvements must be offered to the city in no more than one dedication per month. (5) Reduction of security. After the acceptance of any improvement, the amount which the city is entitled to draw on the escrow or letter may be reduced by an amount equal to 90% of the estimated cost of the improvement as shown on Exhibit B. At the request of the developer upon completion and acceptance of any improvements, the City Engineer will execute a certificate of release verifying the acceptance of the improvement and waiving its right to draw on the escrow to the extent of such amount. A developer in default under this agreement will have no right to such a certificate. At the same time as the certificate of release, the developer may file with the City Engineer a written request for partial withdrawal from said improvements construction account for payment of those certified and accepted improvements. Approval by the City Engineer shall be given within ten working days. City Engineer will authorize in writing to the escrow or letter holder to disburse direct payments, up to the costs of construction and inspections listed in Exhibit B, to the developer’s contractor, or persons furnishing such services as requested by developer. The improvements construction account shall not be reduced to an amount less than the 10% subdivision guaranty surety listed in attached Exhibit C. Upon the acceptance of all of the improvements, the balance that may be drawn under the escrow or letter will be available to the city for 90 days after expiration of the one year warranty period. Nothing contained herein shall prevent developer from paying any or all costs of improvements from separate financial sources or funds, should developer determine to do so. (6) Use of proceeds. The city will use funds drawn under the escrow or letter only for the purpose of completing the improvements or correcting defects in or failures of the improvements. (D) Other provisions. (1) Events of default. The following conditions, occurrences or actions will constitute a default by the developer during the construction period: (a) Developer’s failure to commence construction of the improvements within one year of final subdivision plat approval; (b) Developer’s failure to complete construction of the improvements within two years of final subdivision plat approval; (c) Developer’s failure to cure the defective construction of any improvement within the applicable cure period; (d) Developer’s insolvency, the appointment of a receiver for the developer, or the filing of a voluntary or involuntary petition in bankruptcy respecting the developer; (e) Foreclosure of any lien against the property or a portion of the property or assignment or conveyance of the property in lieu of foreclosure; and (f) The city may not declare a default until written notice of developer’s default has been given to the developer and developer has been given ten days from the date of the notice to respond. (2) Measure of damages. The measure of damages for breach of this agreement will be the reasonable cost of completing the improvements. For improvements upon which construction has not begun, the estimated cost of the improvements as shown on Exhibit B will be prima facie evidence of the minimum cost of completion; however, neither that amount nor the amount of the escrow establishes the maximum amount of the developer’s liability. The city will be entitled to complete all unfinished improvements at the time of default regardless of the extent to which development has taken place in the subdivision or whether development ever commenced. (3) City’s right upon default. When any event of default occurs, the city may draw on the escrow or letter to the extent of the face amount of the escrow less 90% of the estimated cost (as shown on Exhibit B) of all improvements theretofore accepted by the city. The city will have the right to complete improvements itself or contract with a third party for completion, and the developer hereby grants to the city, its successors, assigns, agents, contractors and employees, a nonexclusive right and easement to enter the property for the purposes of constructing, maintaining, and repairing such improvements. Alternatively, the city may assign the proceeds of the escrow to a subsequent developer (or a lender) who has acquired the subdivision by purchase, foreclosure, or otherwise who will then have the same rights of completion as the city if and only if the subsequent developer (or lender) agrees in writing to complete the unfinished improvements. In addition, the city also may suspend final plat approval during which time the developer will have no right to sell, transfer, or otherwise convey lots or homes within the subdivision without the express written approval of the city or until the improvements are completed and approved by the city. These remedies are cumulative in nature except that during the warranty period, the city’s only remedy will be to draw funds under the escrow. (4) Indemnification. The developer hereby expressly agrees to indemnify and hold the city harmless from and against all claims, costs, and liability of every kind and nature, for injury or damage received or sustained by any person or entity in connection with, or on account of the performance of work at the development site and elsewhere pursuant to this agreement. The developer further agrees to aid and defend the city in the event that the city is named as a defendant in an action concerning the performance of work pursuant to this agreement except where such suit is brought by the developer. The developer is not an agent or employee of the city. (5) No waiver. No waiver of any provision of this agreement will be deemed or constitute a waiver of any other provision, nor will it be deemed or constitute a continuing waiver unless expressly provided for by a written amendment to this agreement signed by both city and developer; nor will the waiver of any default under this agreement be deemed a waiver of any subsequent default or defaults of the same type. The city’s failure to exercise any right under this agreement will not constitute the approval of any wrongful act by the developer or the acceptance of any improvement. (6) Amendment or modification. The parties to this agreement may amend or modify this agreement only by written instrument executed by the city and by the developer or his, her, or their authorized officer. Such amendment or modification will be properly notarized before it may be effective. (7) Attorney’s fees. Should either party be required to resort to litigation, arbitration, or mediation to enforce the terms of this agreement, the prevailing party, plaintiff or defendant, will be entitled to costs including reasonable attorney’s fees and expert witness fees, from the opposing party. If the court, arbitrator, or mediator awards relief to both parties, each will bear its own costs in their entirety. (8) Vested rights. The city does not warrant by this agreement that the developer is entitled to any other approval(s) required by the city, if any, before the developer is entitled to commence development of the subdivision or to transfer ownership of property in the subdivision. (9) Third party rights. No person or entity who or which is not a party to this agreement will have any right of action under this agreement, except that if the city does not exercise its rights within 60 days following knowledge of any event of default, a purchaser of a lot or home in the subdivision may bring an action in mandamus to compel the city to exercise its rights. (10) Scope. This agreement constitutes the entire agreement between the parties and no statement(s), promise(s) or inducement(s) that is/are not contained in this agreement will be binding on the parties. (11) Time. For the purpose of computing the commencement, abandonment, and completion periods, and time periods for city action, such times in which civil disaster, acts of God, or extreme weather conditions occur or exist will not be included if such times prevent the developer or city from performing obligations under the agreement. (12) Severability. If any part, term or provision of this agreement is held by the courts to be illegal or otherwise unenforceable, such illegality or unenforceability will not affect the validity of any other part, term or provision and the rights of the parties will be construed as if the part, term, or provision was never part of the agreement. (13) Benefits. The benefits of this agreement to the developer are personal and may not be assigned without the express written approval of the city. Such approval may not be unreasonably withheld, but any unapproved assignment is void. Notwithstanding the foregoing, the burdens of this agreement are personal obligations of the developer and also will be binding on the heirs, successors, and assigns of the developer. There is no prohibition on the right of the city to assign its rights under this agreement. The city will release the original developer’s escrow or letter if it accepts new security from any developer or lender who obtains the property. However, no act of the city will constitute a release of the original developer from this liability under this agreement. (14) Notice. Any notice required or permitted by this agreement will be deemed effective when personally delivered in writing or three days after notice is deposited with the U.S. Postal Service, postage prepaid, certified, and return receipt requested, and addressed as follows: If to developer (Attn) _______________________________ (Address) ______________________________________ If to city: Attn: City Engineer 5871 N. 4700 W. Elwood City, UT 84301 (15) Recordation. Either developer or city may record a copy of this agreement in the Clerk and Recorder’s office of Box Elder County, Utah. (16) Immunity. Nothing contained in this agreement constitutes a waiver of the city’s sovereign immunity under any applicable state law. (17) Legal counsel. The city has been represented by legal counsel and developer acknowledges that they have had an opportunity to consult with legal counsel before signing this document. The parties acknowledge that they each voluntarily sign this agreement believing it to be in their best interests. The parties acknowledge that the various rights and awards granted herein are contractual and based upon the consideration bestowed by each upon the other through the provisions of this agreement. (18) Personal jurisdiction and venue. Personal jurisdiction and venue for any civil action commenced by either party to this agreement whether arising out of or relating to the agreement or escrow or letter will be deemed to be proper only if such action is commenced in the First District Court in Box Elder County. The developer expressly waives their right to bring such action in or to remove such action to any other court whether state or federal. __________________________ __________________________ Developer Date Bank Date ___________________________________ Mayor, Elwood City Date ATTEST: ___________________________________ Elwood City Recorder Date APPROVED AS TO FORM: _______________________________ City Attorney Date EXHIBIT A: PROPERTY DESCRIPTION TO BE SUBDIVIDED EXHIBIT B: REQUIRED ON & OFF SITE SUBDIVISION IMPROVEMENTS EXHIBIT C: FINANCIAL GUARANTEE |
(B) Sample escrow certificate.
EXHIBIT C EXAMPLE OF ESCROW CERTIFICATE TO ELWOOD CITY, UTAH: The undersigned Escrow Agent does hereby certify that it has in its possession and custody, cash in the sum of $____________________________ which said sum Escrow Agent is holding in escrow to guarantee the installation and completion, according to ordinance, of all off-site improvements, as specified in Exhibit “A” on the following described tracts of land in the City of Elwood, Utah to wit: In the event the funds so provided herein do not pay for and complete in full all of the specified improvements set forth in Exhibit “A” and as contemplated herein, then and in that event, developer agrees to forthwith pay to Elwood City all additional amounts necessary to so complete such improvement. Said Escrow Agent hereby covenants and agrees that it will not release said funds to any person, firm or corporation (other than as is hereinafter provided) without the express written consent and direction from said Elwood City, Utah and that if said improvements are not satisfactorily installed and completed according to code within one month short of two years from the date hereof, that the said Escrow Agent will, upon demand, deliver said funds to said Elwood City, Utah for the sole purpose of making and/or completing all of said improvements, with said city to return to the said Escrow Agent any and all funds which may prove to be in excess of the actual cost to the city to make and/or complete said improvements. It is understood that the city may, at its sole option, extend said period of two years for such completion of such improvements upon request of the Escrow Agent or the subdivider, if the City Council determines that such extension is proper. It is further understood and agreed that all matters concerning this agreement shall be subject to appropriate ordinances and code provisions adopted by said Elwood City, Utah. DATED this _____ day of __________, 20_____ _____________________________Escrow Agent signature ______________________________Please print name and title |
(Ord. 2020-005, passed 3-9-2021)