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IP #1020 destroy 2029PROJECT NO. 1020 3924 Utah Ave N (scattered site lhot.ising program) Res. 2018-24 12/10/18 Resolution approving Purchase Agreement for the acquisition of 3924 Utah Avenue North (improvement project no. 1020) EDA Res. 8/12/19 Resolution awarding the contract for rehabilitation work in association with the EDA- 2019-04 owned property located at 3924 Utah Avenue North (improvement project no. 1020) EDA Res. 2/24/20 Resolution approving extension of completion date for remodeling contract with Day 2020-03 Construction, LLC for 3924 Utah Avenue North (Improvement Project No. 1020) EDA Res. 6/8/20 Resolution approving sale of 3924 Utah Avenue North (Improvement Project No. 1020) 2020-06 Request for Action June 8, 2020 Agenda Section EDA Approved by: Kirk McDonald, City Manager Item Number Originating Department: Community Development 5 By: Jeff Alger, Community Development Specialist; Jeff Sargent, Director of Community Development Agenda Title Resolution approving sale of 3924 Utah Avenue North (Improvement Project No. 1020) Requested Action Staff requests that the Economic Development Authority approve a resolution approving the sale of the property at 3924 Utah Avenue North to Ethan Lederer at the sale price of $387,000. Policy/Past Practice The Economic Development Authority must approve the sale of scattered site housing properties owned by the city. Background In December of 2018, the Economic Development Authority (EDA) purchased the vacant and distressed property located at 3924 Utah Avenue North for $190,100 as part of the city's scattered site housing program. The intent of the purchase was to rehabilitate the home for resale and maximize the value of the finished product. The house was in disrepair and substantial exterior and interior work was needed in order to make it habitable and desirable. On August 12, 2019, the EDA approved a $173,671 contract with Day Construction for rehabilitation of the home. This included an alternate to remodel the two bedrooms on the north side of the second floor to create a master -suite, including a large bedroom, a bathroom, and a walk-in closet. The scope of work for the project included improvements to nearly all interior and exterior areas of the house. During the construction process, it was determined that additional repairs to the home were needed and change orders were processed for the replacement of the roof ($7,814) and air conditioning unit ($4,250). Including the change orders, the city has invested $185,735 into making improvements to the property. Before and after photos from the project are attached. The goal of the project was to rehabilitate the house and create the highest valued product possible. When the contract was approved in 2019, staff presented the EDA with a "worst case scenario" and "best case scenario" relating to costs associated with the project. The "best case scenario" resulted in a loss of approximately $12,080. The "worst case scenario" resulted in a loss of approximately $64,080. Factors included the state of the housing market, the final sale price, unexpected costs for other improvements, and whether or not the buyer and/or city would be paying brokerage fees to real estate agents. When the rehabilitation contract was approved in 2019, staff committed to attempting to sell the home without utilizing a real estate agent in order to reduce costs and limit potential losses for the EDA. Once the house was completed, staff began marketing the property. An appraisal was completed and the list price was set at $371,900. Professional photos were taken, a virtual 3D tour was produced, and a website was created for the listing. A for sale sign was placed in the front yard of the property. The project was advertised in city publications and on websites with real estate listings. Staff emailed the listing to more than 250 real estate agents in the area as well as members of the city's Business Networking Group. Staff received a fair amount I:\RFA\COMM DEV\2020\EDA\Scattered Site Housing\Q -3924 Utah Ave N Sale 06-08-20.docx Request for Action, Page 2 of interest on the property and two offers were submitted. The offer being recommended for approval by the EDA sets the purchase price at $387,000 with a 2.5% ($9,675) brokerage fee to the buyer's real estate agent. Under these terms, it is estimated that the city would incur a loss of $14,152, slightly more than the "best case scenario" presented in 2019. The potential buyer has provided the city with a check for $5,000 in earnest money and is pre -approved for a loan with a sale price up to $387,000. By selling the home without a listing agent, it is anticipated that the city will save between $10,000 and $12,000 in brokerage fees. The attached Purchase Agreement has been signed by the prospective buyer and city manager and is contingent upon approval by the EDA. Rehabilitation of the home was intended to be a demonstration project for the city. Many other homes in the neighborhood and surrounding areas were constructed with similar floorplans. The intent was to highlight improvements and floorplan changes that could be implemented by other property owners with similar homes. Due to the COVID-19 pandemic, the city elected not to host an open house for neighbors this summer. Those interested in seeing the inside of the house are able to view a 3D tour and photos at newhopemn.gov/forsale. Neighbors within 500 feet of the property were mailed a flyer with a link to the virtual tour. Cost & Tax Impact of Improvements It is anticipated that expenses associated with the project will be approximately $391,477.06. Revenue from the sale of the lot would be $377,325, resulting in an estimated loss of $14,152.06. The proposed improvements would result in a substantial increase in the taxable value of the property. If the property were to be valued at $370,000 in 2020, its market value will have increased by $168,000 since it was acquired in 2019. Such a valuation would result in an estimated increase of $1,065.08, or 87.44%, in taxes payable to the city in 2021, as compared to taxes payable in 2019. Before Rehabilitation After Rehabilitation Estimated Market Value 2018, Payable 2019 Projected Market Value 2021, Payable 2022 Change % Change $202,000 $370,000 $168,000 83.17% Taxable Market Value 2018, Payable 2019 Projected Taxable Market Value 2021, Payable 2022 Change % Change $182,940 $366,060 $183,120 100.10% Taxes Payable 2018, Payable 2019 Projected Taxes Payable 2021, Pa able 2022 Change % Change $3,267.52 $6,124.64 $2,857.12 87.44% Taxes Allocated to City 2018, Payable 2019 Taxes Allocated to City 2021, Pa able 2022 (estimated) Change % Change $1,218.07 $2,283.15 $1,065.08 87.44% The following table illustrates the Return On Investment (ROI) and tax benefit associated with the estimated increase in taxable property value over the next several years: Request for Action, Page 3 # of Years (Year) Additional Taxes Collected By City Total Cost/ Revenue Return On Investment 0 (payable 2021) $0 ($14,152.06) -3.62% 1 a able 2022 $1,065.08 ($13,086.98) -3.34% 2 a able 2023 $2,130.16 ($12,021.90) -3.07% 3 (payable 2024) $3,195.24 ($10,956.82) -2.80% 4 (payable 2025 $4,260.32 ($9,891.74) -2.53% 5 (payable 2026 $5,325.40 ($8,826.66) -2.25% 10 (payable 2031 $10,650.80 $3,501.26) -0.89% 15 (payable 2036 $15,976.20 $1,824.14 0.47% 20 (payable 2041 $21,301.60 $7,149.54 1.83% 25 (payable 2046) $26,627.00 $12,474.94 3.19% 30 (payable 2051) $31,952.40 $17,800.34 4.55% *Based on new home valued at $370,000 (2020 payable formula) The estimated ROI for the project over 30 years is 4.55%. The city's initial investment of $14,152.06 into the project would result in additional taxes being allocated to the city from the subject property. Estimated at $1,065.08 per year, newly collected property taxes would result in a 14-year payback period for the city's original investment (assuming other substantial improvements are not made to the property). The estimated Internal Rate of Return (IROR) for the project over 30 years is 6.33% (calculation attached). The city's financial consultant AEM continues to work on a template that will modify ROI and IRR calculations for such projects to include assumptions. Once completed, staff will utilize the template for future calculations. Funding Funding for this project came from the EDA budget. Funds collected from the sale will be reallocated to the EDA budget and losses incurred on the project will diminish the EDA fund balance. Recommendation Staff recommends that the EDA conduct a public hearing and approve a resolution approving the sale of the property at 3924 Utah Avenue North to Ethan Lederer at the sale price of $387,000. If the sale is approved, the Purchase Agreement sets July 16, 2020, as the date of closing. Attachments • Resolution • Purchase Agreement • Before and after photos • Virtual tour flyer • Budget • Estimated Tax Impact of Improvements • Estimated Return on Investment • Estimated Internal Rate of Return 0 Public Hearing Notice CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO.20- 06 RESOLUTION APPROVING SALE OF 3924 UTAH AVENUE NORTH (IMPROVEMENT PROJECT NO. 1020) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope ("EDA") as follows: WHEREAS, the EDA purchased the single family home located at 3924 Utah Avenue North, New Hope, MN, P.I.D. 18-118-21-41-0077, and legally described as Lot 23, Block 6, Hopewood Hills, Hennepin County, Minnesota (the "Property") on December 21, 2018 for $190,100; WHEREAS, the EDA acquired the Property with the intention of substantially remodeling and rehabilitating the existing house to bring it into compliance with the City Building Code; WHEREAS, the Property was in fact substantially remodeled and rehabilitated; WHEREAS, New Hope City staff received an offer from Ethan Lederer ("Buyer") regarding the purchase of the renovated Property; WHEREAS, the EDA arrived at an agreement with Buyer to sell the Property for the purchase price of $387,000.00, subject to the review and approval of the EDA with a closing date of July 16, 2020; WHEREAS, the EDA has accepted Buyer's offer and has presented a draft of the Purchase Agreement to Buyer, for his review, a copy of which is attached hereto as Exhibit A ("Purchase Agreement") and incorporated herein by reference; WHEREAS, it is in the best interest of the EDA to sell the Property to Buyer for the sum of $387,000.00, in accordance with the City's scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval from the EDA of the Purchase Agreement, subject to other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the sale of the Property by the EDA to Buyer, for the purchase price of $387,000.00, with other terms and conditions as set forth in the Purchase Agreement attached hereto as Exhibit A, is approved, it being in the best interest of the EDA to sell the rehabilitated Property for use as a single-family home in accordance with the City's scattered site housing program and policy. 3. The sale of the rehabilitated Property by the EDA will return the Property to the tax rolls and maximize the tax base for the benefit of all taxing jurisdictions. 4. The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the sale of the Property in accordance with the Purchase Agreement. Dated the 81 day of June, 2020. Kathi n, Pre s1 e11t Attest:�Lll 1� Kirk McDonald, Executive Director P:\Attorney\SAS\l Client Files\2 City of New Hope\99-11432 3924 Utah Ave N\Resolution Approving Sale of 3924 Utah Ave N.docx wthentisign ID: D52C28A7-792D-4E71-BD62-4D1 FE11595BD ' L A K E S PURCHASE AGREEMENT f AREA This form approved by the Minnesota Association of REALTORS®, ❑ ❑ which disclaims any liability arising out of use or misuse of this form. R E A L T Y © 2019 Minnesota Association of REALTORS®, Edina, MN 1. Date May 21st 2020 2. Page 1 3. BUYER (S): Ethan Lederer 4. 5. Buyer's earnest money in the amount of 6 Five Thousand Dollars ($ 5, 000.00 ) 7. shall be delivered to listing broker, or, if checked, to no later than two (2) Business .........................................("Earnest Money 8. Days after Final Acceptance Date of this Purchase Agreement. Buyer and Seller agree that earnest money shall be 9. deposited in the trust account of Earnest Money Holder as specified above within three (3) Business Days of receipt 10. of the earnest money or Final Acceptance Date of this Purchase Agreement, whichever is later. 11. Said earnest money is part payment for the purchase of the property located at 12. Street Address: 3924 Utah Avenue North 13. City of New hope , County Of Hennepin 14. State of Minnesota, Zip Code 55427 , legally described as _Lot 023 Block 006 Hopewood Hil 15. is 16. Said purchase shall include all improvements, fixtures, and appurtenances on the property, if any, including but not 17. limited to, the following (collectively the "Property"): garden bulbs, plants, shrubs, trees, and lawn watering systems; 18. sheds; storm sashes, storm doors, screens, and awnings; window shades and blinds; traverses, curtain and drapery 19. rods, valances, draperies, curtains, and window coverings and treatments; towel rods; attached lighting and bulbs; 20. fan fixtures; plumbing fixtures; garbage disposals; water softeners; water treatment systems; water heating systems; 21. heating systems; air exchange systems; environmental remediation systems (e.g., radon, vapor intrusion); sump pumps; 22. TV antennas, cable TV jacks and wiring, and TV wall mounts; wall and ceiling -mounted speakers and mounts; carpeting; 23. attached mirrors; garage door openers and all controls; smoke detectors; doorbells; thermostats; fireplace screens, 24. doors, and heatilators; ANY OF THE FOLLOWING, IF BUILT-IN: dishwashers, refrigerators, wine and beverage 25. refrigerators, trash compactors, ovens, cook -top stoves, warming drawers, microwave ovens, hood fans, shelving, 26. work benches, intercoms, speakers, air conditioning equipment, electronic air filters, humidifiers and dehumidifiers, 27. liquid fuel tanks and all controls, pool and spa equipment, propane tanks and all controls, security system equipment, 28. TV satellite dishes; the above -mentioned inclusions AND the following personal property shall be transferred with no 29. additional monetary value, and free and clear of all liens and encumbrances: 30. All current appliances that where in during our showing on 5/20/2020 31. Notwithstanding the foregoing, leased fixtures are not included. 32. Notwithstanding the foregoing, the following item(s) are excluded from the purchase: 33. _ 34. PURCHASE PRICE: 35. Seller has agreed to sell the Property to Buyer for the sum of ($ 387, 000.00 36. Three Hundred Eighty -Seven Thousand _ Dollars, 37. which Buyer agrees to pay in the following manner: 38. 1. 5 percent (%) of the sale price in CASH, or more in Buyer's sole discretion, which includes the earnest 39. money; 40. 2. 95 percent (%) of the sale price in MORTGAGE FINANCING. (See following Mortgage Financing section.) 41. 3. o percent (%) of the sale price by ASSUMING Seller's current mortgage. (See attached Addendum to 42. Purchase Agreement: Assumption Financing.) 43. 4, 0 percent (%) of the sale price by CONTRACT FOR DEED. (See attached Addendum to Purchase 44. Agreement: Contract for Deed Financing.) 45. CLOSING DATE: 46. The date of closing shall be July 16th 2020 , Minnesota MN:PA-1 (8/19) Realtor wlhenllslgn ID: D52C29A7.792D-4E71-BD62.4D1FE11595BD PURCHASE AGREEMENT 47. Page 2 Date May 21et 2020 48. Property located at 3924 Utah Avenue North New Hone MN 55427 49. MORTGAGE FINANCING: 50. This Purchase Agreement Q IS ❑ IS NOT subject to the mortgage financing provisions below. If IS, complete the -------(Check one.)-------- 51. MORTGAGE FINANCING section below. If IS NOT, proceed to the SELLER'S CONTRIBUTIONS TO BUYER'S 52. COSTS section. 53, Such mortgage financing shall be: (Check one.) 54. 1C❑ FIRST MORTGAGE only ❑ FIRST MORTGAGE AND SUBORDINATE FINANCING. 55. Financing ❑ DOES X] DOES NOT include a grant, bond program, or other loan assistance program. If "DOES;' 56. please specify: _ 57. Buyer shall apply for and secure, at Buyer's expense, a: (Check all that apply.) 58. ❑K- CONVENTIONAL 59. ❑ DEPARTMENT OF VETERANS' AFFAIRS ("DVA") GUARANTEED 60. ❑ FEDERAL HOUSING ADMINISTRATION ("FHA") INSURED 61. ❑ PRIVATELY INSURED CONVENTIONAL 62. ❑ UNITED STATES DEPARTMENT OF AGRICULTURE ("USDA") RURAL DEVELOPMENT 63. ❑ OTHER 64. mortgage in the amount stated in this Purchase Agreement, amortized over a period of not more than 30 65. years, with an initial interest rate at no more than 4 percent (%) per annum. The mortgage application IS 66. TO BE MADE WITHIN FIVE (5) BUSINESS DAYS after the Final Acceptance Date of this Purchase Agreement. 67. Buyer agrees to use best efforts to secure a commitment for such financing and to execute all documents required to 68. consummate said financing. 69. MORTGAGE FINANCING CQQITIN_GENSQ: This Purchase Agreement is contingent upon the following and applies 70. to the first mortgage and any subordinate financing. (Check one.) 71. J If Buyer cannot secure the financing specified in this Purchase Agreement, and this Purchase Agreement does not 72. close on the closing date specified, this Purchase Agreement is canceled. Buyer and Seller shall immediately 73. sign a Cancellation of Purchase Agreementconfirming said cancellation and directing all earnest money paid here to be 74. ❑ REFUNDED TO BUYER ❑ FORFEITED TO SELLER. ............_.................��..,.........(Check one. ........... _-�� 75. NOTE: If this Purchase Agreement is subject to DVA or FHA financing, FORFEITED TO SELLER maybe prohibited. 76. See the following DVA and FHA Escape Clauses. 77. 0 Buyer shall provide Seller, or licensee representing or assisting Seller, with the Written Statement, on 78. or before June 26th, 2020 79. For purposes of this Contingency, "Written Statement' means a Written Statement prepared by Buyer's mortgage 80. originator(s) or. lender(s) after the Final Acceptance Date that Buyer is approved for the loan(s) specified in this 81. Purchase Agreement, including both the first mortgage and any subordinate financing, if any, and stating that an 82. appraisal, satisfactory to the lender(s), has been completed and stating conditions required by lender(s) to close 83. the loan. 84. Upon delivery of the Written Statement to Seller, or licensee representing or assisting Seller, the obligation for 85. satisfying all conditions required by mortgage originator(s) or lender(s), except those conditions specified below, 86. are deemed accepted by Buyer: 87. (a) work orders agreed to be completed by Seller; 88. (b) any other financing terms agreed to be completed by Seller here; and 89. (c) any contingency for the sale and closing of Buyer's property pursuant to this Purchase Agreement. MN: PA-2 (8/19) Minnesota Realtors' wthentisign ID: D52C28A7-792D-4E71-BD82-4DIFE11595BD PURCHASE AGREEMENT 90. Page 3 Date may _ 21et 2020 91. Property located at 3924 Utah Avenue North New MN 55427- 92. Upon delivery of the Written Statement, if this Purchase Agreement does not close on the stated closing date for 93. ANY REASON relating to financing, including, but not limited to interest rate and discount points, if any, then Seller 94, may, at Seller's option, declare this Purchase Agreement canceled, in which case this Purchase Agreement is 95. canceled. If Seller declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a 96. Cancellation of Purchase Agreement confirming said cancellation and directing all earnest money paid here to be 97. forfeited to Seller as liquidated damages. In the alternative, Seller may seek all other remedies allowed by law. 98. Notwithstanding the language in the preceding paragraph, Seller may not declare this Purchase Agreement canceled 99. if the reason this Purchase Agreement does not close was due to: 100. (a) Seller's failure to complete work orders to the extent required by this Purchase Agreement; 101. (b) Seller's failure to complete any other financing terms agreed to be completed by Seller here; or 102. (c) any contingency for the sale and closing of Buyer's property pursuant to this Purchase Agreement, except as 103. specified in the contingency for sale and closing of Buyer's property. 104. If the Written Statement is not provided by the date specified on line 78, Seller may, at Seller's option, declare this 105. Purchase Agreement canceled by written notice to Buyer at any time prior to Seller receiving the Written Statement, 106, in which case this Purchase Agreement is canceled. In the event Seller declares this Purchase Agreement canceled, 107. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation and 108. directing all earnest money paid here to be refunded to Buyer. 109. If the Written Statement is not provided, and Seller has not previously canceled this Purchase Agreement, this 110. Purchase Agreement is canceled as of the closing date specified in this Purchase Agreement. Buyer and Seller 111. shall immediately sign a Cancellation of Purchase Agreement confi rmi ng said cancellation and directing all earnest 112. money paid here to be refunded to Buyer. 113. LOCK ING__OF_MOR`fGAGE INTEREST -RATE ("RATE"}: The Rate shall be locked with the lender(s) by Buyer: 114. (Check one.) 115. ❑ WITHIN FIVE (5) BUSINESS DAYS OF FINAL ACCEPTANCE DATE OF THIS PURCHASE AGREEMENT; OR 116. X❑ AT ANYTIME PRIOR TO CLOSING OR AS REQUIRED BY LENDER(S). 117. LENDER COMMITMENT WORK ORDERS: Seller agrees to pay up to $ o - oo to make 118. repairs as required by the lender commitment. If the lender commitment is subject to any work orders for which the 119. cost of making said repairs shall exceed this amount, Seller shall have the following options: 120. (a) making the necessary repairs; or 121. (b) negotiating the cost of making said repairs with Buyer; or 122. (c) declaring this Purchase Agreement canceled, in which case this Purchase Agreement is canceled. Buyer and Seller 123. shall immediately sign a Cancellation of Purchase Agreementconfirming said cancellation and directing all earnest 124. money paid here to be refunded to Buyer, unless Buyer provides for payment of the cost of said repairs or escrow 125. amounts related thereto above the amount specified on line 117 of this Purchase Agreement. 126. ❑ SELLER © BUYER agrees to pay any reinspection fee required by Buyer's lender(s). ------------(Check one.) -- FHA ESCAPE CLAUSE (FHA Financing onlyi: "It is expressly agreed that, notwithstanding any other provisions 128. of this contract, the purchaser shall not be obligated to complete the purchase of the Property described here or to incur 129. any penalty by forfeiture of earnest money deposits or otherwise, unless the purchaser has been given in accordance 130. with the Department of Housing and Urban Development ("HUD")/FHA or DVA requirements a written statement by the 131. Federal Housing Commissioner, Department of Veterans' Affairs, or a Direct Endorsement lender setting forth the 132. appraised value of the Property as not less than $ (sale price) 133. The purchaser shall have the privilege and option of proceeding with consummation of the contract without regard 134. to the amount of the appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage 135. HUD will insure; HUD does not warrant the value nor the condition of the Property.The purchaser should satisfy himself/ 136. herself that the price and condition of the Property are acceptable.' MN:PA-3 (B/19) Minnesota Realtors`: wthentisign ID: D52C26A7.792D-4E71-BD62.4D1 FE115958D PURCHASE AGREEMENT 137, Page 4 Date May 21st 2020 138. Property located at 3924 Utah Avenue North New MN 55427 139. LENQKR PROCESSING FEES (FHA. DVA Financing Only): Seller agrees to pay Buyer's closing fees and 140. miscellaneous processing fees which cannot be charged to Buyer, not to exceed $ 141. This amount is in addition to Seller's Contributions to Buyer's Costs, if applicable. 142. DVA FUNDING FEE (DVA Financing only): Pursuant to federal regulations, a one-time Funding Fee must be paid 143. at the closing of this transaction as follows: 144. 145. paid by Buyer ❑ AT CLOSING ❑ ADDED TO MORTGAGE AMOUNT one.--------------------- ------------- --_------- paid by Seller 146. NOTE: DVA regulations limit the fees and charges Buyer can pay to obtain a DVA loan. 147. DEPARTM-ENT OF nd : "It is expressly agreed that, 148. notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest 149. money or otherwise be obligated to complete the purchase of the Property described here, if the contract purchase 150. price or cost exceeds the reasonable value of this Property established by the Department of Veterans' Affairs. The 151. purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without 152. regard to the amount of reasonable value established by the Department of Veterans' Affairs:' 153. NOTE: Verify DVA requirements relating to payment of all special assessments levied and pending, and 154. annual installments of special assessments certified to yearly taxes. 155. OTHER MORTGAGE FINANQINra ITEMS: 156 157. 5ELLER'S CONTRIBUTiONSiQBUYER' COSTS: 158. Seller ❑ IS 0 IS NOT contributing to Buyer's costs. If answer is IS, Seller agrees to pay at closing, up to: (Check one.) ...... (Chack ones----- 159. ❑ $ 160. ❑ __ . percent (%) of the sale price 161. towards Buyer's closing fees, title service fees, title searches, title examinations, abstracting, lender's title insurance, 162. owner's title insurance, prepaid items, other Buyer's costs allowable by lender, if any, and/or mortgage discount points. Any 163. amount of Seller's contribution that exceeds Buyer's allowable costs, or which cannot be used because Seller's 164. contribution exceeds the maximum Seller contribution allowed by law or by mortgage requirements, shall be retained 165. by Seller. 166. NOTE: The amount paid by Seller cannot exceed the maximum Seller contribution allowed by FHA, DVA, or 167. lender. All funds paid by Seller on behalf of Buyer must be stated on the Closing Disclosure at closing. 168. INSPECTIONS: 169. Buyer has been made aware of the availability of. Property inspections. Buyer X ELECTS ❑ DECLINES to have a 170. Property inspection performed at Buyer's expense. -- --(Check one.)------------ 171. This Purchase Agreement X IS ❑ IS NOT contingent upon any inspection(s) of the Property obtained by Buyer to -------(Check one.)------ 172. determine its condition, including any non -intrusive testing or any intrusive testing as allowed pursuant to this Purchase 173. Agreement. 174. Any inspection(s) or test(s) shall be done by an inspector(s) or tester(s) of Buyer's choice. Buyer shall satisfy Buyer 175. as to the qualifications of the inspector(s) or tester(s). For purposes of this Purchase Agreement, "intrusive testing" 176. shall mean any testing, inspection(s), or investigation(s) that changes the Property from its original condition or otherwise 177. damages the Property. 178. Seller ❑ DOES © DOES NOT agree to allow Buyer to perform intrusive testing or inspection(s). 179. If answer is DOES, Buyer agrees that the Property shall be returned to the same condition it was in prior to Buyer's 180. intrusive testing at Buyer's sole expense. W PA-4 (8/19) 129 Minnesota Realtors° wlhenllslgn ID: D52C2BA7-792D-4E71-BD62-4D1FE11595BD 182. Property located at 3924 Utah Avenue North PURCHASE AGREEMENT 181. Page 5 Date max 21et 202 New Hope Lei 55427 183. Seller will provide access to attic(s) and crawlspace(s). 184. Within 7 Calendar Days of Final Acceptance Date of this Purchase Agreement, all inspection(s), test(s), and 185. resulting negotiations, if any, shall be done ("Inspection Period"). 166. If this Purchase Agreement is contingent upon inspection, Buyer may cancel this Purchase Agreement based on the 187. inspection(s) or test result(s) by providing written notice to Seller, or licensee representing or assisting Seller, of Buyer's 188. intent to cancel no later than the end of the Inspection Period. If Buyer cancels this Purchase Agreement, Buyer and 189. Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation and directing all 190. earnest money paid here to be refunded to Buyer. If Buyer does not cancel this Purchase Agreement before the end 191. of the Inspection Period, then this Inspection Contingency shall be deemed removed and this Purchase Agreement 192. shall be in full force and effect. 193. OTHER INSPECTION ITEMS: 194. 195. 196. 197. SALE OF BUYER'S PROPERTY: 198. (Check one.) 199. ❑ 1. This Purchase Agreement is subject to an Addendum to Purchase Agreement: Sale of Buyer's Property 200. Contingency for the sale of Buyer's property. (If checked, see attached Addendum.) 201. OR 202. ❑ 2. This Purchase Agreement is contingent upon the successful closing on the Buyer's property located at 203. _ , which is scheduled to close on 204. pursuant to a fully executed purchase agreement. If Buyer's 205. property does not close by the closing date specified in this Purchase Agreement, this Purchase Agreement 206. is canceled. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said 207. cancellation and directing all earnest money paid here to be refunded to Buyer. The language in this paragraph 208. supersedes any other provision to the contrary in any financing contingency made a part of this Purchase 209. Agreement, if applicable. 210. OR 211. ❑KC 3. Buyer represents that Buyer has the financial ability to perform on this Purchase Agreement without the sale 212. and closing on any other property. 213. REAL ESTATE TAXES/SPECIAL ASSESSMENTS: 214. REAL ESTATE TAXES: Seller shall pay on the date of closing all real estate taxes due and payable in all prior years 215. including all penalties and interest. 216. Buyer shall pay ❑X PRORATED FROM DAY OF CLOSING ❑ ALL ❑ NONE ❑ /12ths OF real estate taxes one.} --- _------------- __-_--........ _ 217. due and payable in the year of closing. 218. Seller shall pay © PRORATEDTO DAY OF CLOSING ❑ALL ❑ NONE; �_/12ths OF real estate taxes due and �............._.. ............... _..._-.._tcheckone.}-_.-....».Y__.___._...................-..... 219. payable in the year of closing. 220. If the Property tax status is a part- or non -homestead classification in the year of closing, Seller❑�C SHALL[] SHALL NOT one.) ................ 221. pay the difference between the homestead and non -homestead. 222. Buyer shall pay real estate taxes due and payable in the year following closing and thereafter, the payment of which 223. is not otherwise here provided. No representations are made concerning the amount of subsequent real estate taxes. MNRA-5 (8/19) Minnesota Realtors,;-, wthentlsign ID: D52C2BA7-792D-4E71-BD624D1FE11595BD 225, Property located at 3924 PURCHASE AGREEMENT 224. Page 6 Date May Utah Avenue North New Hope 226 DEFERRED TAXESISPECIAL ASSESSMENTS: 21st 2020 HN 55427 227. ❑ BUYER SHALL PAY © SELLER SHALL PAY on date of closing any deferred real estate taxes (e.g., Green 228. Acres) or special assessments, payment of which is required as a result of the closing of this sale. 229. Fj BUYER AND SELLER SHALL PRORATE AS OF THE DATE OF CLOSING ❑X SELLER SHALL PAY ON --------- W._..-.----------- -------------- ..(Chedr one.) ...... _---------- ._----- _................._-...._.-- ...__.._. 230. DATE OF CLOSING all installments of special assessments certified for payment, with the real estate taxes due and 231. payable in the year of closing. 232. ❑ BUYER SHALL ASSUME ❑Q SELLER SHALL PAY on date of closing all other special assessments levied as one.) ---- _..._............:..�._-____._._- 233. of the Date of this Purchase Agreement. 234. ❑ BUYER SHALL ASSUME 0 SELLER SHALL PROVIDE FOR PAYMENT OF special assessments pending as one.) ...................................................... ...._....... 235. of the Date of this Purchase Agreement for improvements that have been ordered by any assessing authorities. (Seller's 236. provision for payment shall be by payment into escrow of two (2) times the estimated amount of the assessments 237. or less, as required by Buyer's lender.) 238. Buyer shall pay any unpaid special assessments payable in the year following closing and thereafter, the payment of 239. which is not otherwise here provided. 240. As of the Date of this Purchase Agreement, Seller represents that Seller ❑ HAS ❑X HAS NOT received a notice ------------(Check one.)---•-------- 241. regarding any new improvement project from any assessing authorities, the costs of which project may be assessed 242. against the Property. Any such notice received by Seller after the Date of this Purchase Agreement and before closing 243. shall be provided to Buyer immediately. If such notice is issued after the Date of this Purchase Agreement and on 244. or before the date of closing, then the parties may agree in writing, on or before the date of closing, to pay, provide 245. for the payment of, or assume the special assessments. In the absence of such agreement, either party may declare 246. this Purchase Agreement canceled by written notice to the other party, or licensee representing or assisting the other 247. party, in which case this Purchase Agreement is canceled. If either party declares this Purchase Agreement canceled, 248. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation and 249. directing all earnest money paid here to be refunded to Buyer. 250. ADDITIONAL PROVISIONS: 251. PREVIOUSLY WRITTEN PURCHASE_ AGREEMENT: This Purchase Agreement ❑ IS IS NOT subject to ------(Check one. ---- --- 252. cancellation of a previously written purchase agreement dated 253. (If answer is IS, said cancellation shall be obtained no later than 254. If said cancellation is not obtained by said date, this Purchase Agreement is canceled. Buyer and Seller shall immediately 255. sign a Cancellation of Purchase Agreement confirming said cancellation and directing all earnest money paid here to 256. be refunded to Buyer.) 257. DEED/MARKETABLE TITLE: Upon performance by Buyer, Seller shall deliver a: (Check one.) 258. Q WARRANTY DEED ❑ PERSONAL REPRESENTATIVE'S DEED []CONTRACT FOR DEED[]TRUSTEE'S DEED 259. ❑ OTHER: _ DEED joined in by spouse, if any, conveying marketable title, subject to 260. (a) building and zoning laws, ordinances, and state and federal regulations; 261. (b) restrictions relating to use or improvement of the Property without effective forfeiture provisions; 262. (c) reservation of any mineral rights by the State of Minnesota; 263. (d) utility and drainage easements which do not interfere with existing improvements; 264. (e) rights of tenants as follows (unless specified, not subject to tenancies): 265. 266. (f) others (must be specified in writing): 267. MN: PA-6 (8/19) ;and Minnesota Realtors' wlhentisign ID: D52C28A7-792D-4E71-BD52-4D1FE11595BD 269. Property located at 3924 Utah Avenue North PURCHASE AGREEMENT 268. Page 7 Date May 21st 2020 New HoDe 270. POSSESSION: Seller shall deliver possession of the Property: (Check one.) 271, X❑ IMMEDIATELY AFTER CLOSING; or 272. ❑ OTHER: MN 55427 273. Seller agrees to remove ALL DEBRIS AND ALL PERSONAL PROPERTY NOT INCLUDED HERE from the Property 274. by possession date. 275. LINKED DEVICES: Seller warrants that Seller shall permanently disconnect or discontinue Seller's access or service 276. to any device or system on or serving the property that is connected or controlled wirelessly, via internet protocol ("IP") 277. to a router or gateway or directly to the cloud no later than delivery of possession as specified in this Purchase 278. Agreement. 279. PRORATIONS: All interest; unit owners' association dues; rents; and charges for city water, city sewer, electricity, and 280. natural gas shall be prorated between the parties as of date of closing. Buyer shall pay Seller for remaining gallons of 281. fuel oil or liquid petroleum gas on the day of closing, at the rate of the last fill by Seller. 282. TITLE AND EXAMINATION: As quickly as reasonably possible after Final Acceptance Date of this Purchase Agreement: 283. (a) Seller shall deliver any abstract of title and a copy of any owner's title insurance policy for the Property, if 284. in Seller's possession or control, to Buyer or Buyer's designated title service provider. Any abstract of title or 285. owner's title insurance policy provided shall be immediately returned to Seller, or licensee representing or 286. assisting Seller, upon cancellation of this Purchase Agreement; and 287. (b) Buyer shall obtain the title services determined necessary or desirable by Buyer or Buyer's lender, including 288. but not limited to title searches, title examinations, abstracting, a title insurance commitment, or an attorney's 289. title opinion at Buyer's selection and cost and provide a copy to Seller. 290. Seller shall use Seller's best efforts to provide marketable title by the date of closing. Seller agrees to pay all costs 291. and fees necessary to convey marketable title including obtaining and recording all required documents, subject to the 292. following: 293. In the event Seller has not provided marketable title by the date of closing, Seller shall have an additional thirty 294. (30) days to make title marketable, or in the alternative, Buyer may waive title defects by written notice to Seller. In 295. addition to the thirty (30)-day extension, Buyer and Seller may, by mutual agreement, further extend the closing 296. date. Lacking such extension, either party may declare this Purchase Agreement canceled by written notice to 297. the other party, or licensee representing or assisting the other party, in which case this Purchase Agreement is 298. canceled. If either party declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a 299. Cancellation of Purchase Agreement confirming said cancellation and directing all earnest money paid here to be 300. refunded to Buyer. 301. SUBLOWISION OF LAND, BOUNDARIES.ANp_ACCESS: If this sale constitutes or requires a subdivision of land 302. owned by Seller, Seller shall pay all subdivision expenses and obtain all necessary governmental approvals. Seller 303. warrants that the legal description of the real property to be conveyed has been or shall be approved for recording as 304. of the date of closing. Seller warrants that the buildings are or shall be constructed entirely within the boundary lines 305. of the Property. Seller warrants that there is a right of access to the Property from a public right-of-way. 306. MECHANIC'S LIENS: Seller warrants that prior to the closing, payment in full will have been made for all labor, materials, 307. machinery, fixtures, or tools furnished within the 120 days immediately preceding the closing in connection with 308. construction, alteration, or repair of any structure on, or improvement to, the Property. 309. NOTICES: Seller warrants that Seller has not received any notice from any governmental authority as to condemnation 310, proceedings, or violation of any law, ordinance, or regulation. If the Property is subject to restrictive covenants, Seller 311. warrants that Seller has not received any notice from any person or authority as to a breach of the covenants. Any 312. such notices received by Seller shall be provided to Buyer immediately. 313. DIMENSIONS: Buyer acknowledges any dimensions, square footage, or acreage of land or improvements provided 314. by Seller, third party, or broker representing or assisting Seller are approximate. Buyer shall verify the accuracy of 315. information to Buyer's satisfaction, if material, at Buyer's sole cost and expense. 316. ACCESS AGREEMENT: Seller agrees to allow reasonable access to the Property for performance of any surveys or 317. inspections agreed to here. MN:PA-7 (8/19) lMinnesota Realtorso wthentisign ID: D52C2BA7-792D4E71-BD62-4D1FE11595BD 319. Property located at 3924 Utah Avenue North PURCHASE AGREEMENT 318. Page 8 Date MaY list 2020 New Hope MN 55427 320. RISK QF LOSS: If there is any loss or damage to the Property between the Final Acceptance Date and the date of 321. closing for any reason, including fire, vandalism, flood, earthquake, or act of God, the risk of loss shall be on Seller. If 322. the Property is destroyed or substantially damaged before the closing date, this Purchase Agreement is canceled, 323. at Buyer's option, by written notice to Seller or licensee representing or assisting Seller. If Buyer cancels this Purchase 324. Agreement, Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation 325. and directing all earnest money paid here to be refunded to Buyer. 326. TIME OF E E : Time is of the essence in this Purchase Agreement. 327. CALCULATION F DAYS: Any calculation of days begins on the first day (Calendar or Business Days as specified) 328. following the occurrence of the event specified and includes subsequent days (Calendar or Business Days as specified) 329. ending at 11:59 P.M. on the last day. 330. BUSINESS DAYS: "Business Days" are days which are not Saturdays, Sundays, or state or federal holidays unless 331. stated elsewhere by the parties in writing. 332. CALENDAR DAYS: "Calendar Days" include Saturdays, Sundays, and state and federal holidays. 333. RELEASE OF EARNEST MONEY: Buyer and Seller agree that the Earnest Money Holder shall release earnest money 334. from the Earnest Money Holder's trust account: 335. (a) at or upon the successful closing of the Property; 336. (b) pursuant to written agreement between the parties, which may be reflected in a Cancellation of Purchase 337. Agreement executed by both Buyer and Seller; 338. (c) upon receipt of an affidavit of a cancellation under MN Statute 559.217; or 339. (d) upon receipt of a court order. 340. DEFAULT: If Buyer defaults in any of the agreements here, Seller may cancel this Purchase Agreement, and any 341. payments made here, including earnest money, shall be retained by Seller as liquidated damages and Buyer and Seller 342. shall affirm the same by a written cancellation agreement. 343. If Buyer defaults in any of the agreements here, Seller may terminate this Purchase Agreement under the provisions 344. of either MN Statute 559.21 or MN Statute 559.217, whichever is applicable. If either Buyer or Seller defaults in any 345. of the agreements here or there exists an unfulfilled condition after the date specified for fulfillment, either party may 346. cancel this Purchase Agreement under MN Statute 559.217, Subd. 3. Whenever it is provided here that this Purchase 347. Agreement is canceled, said language shall be deemed a provision authorizing a Declaratory Cancellation under MN 348. Statute 559.217, Subd. 4. 349. If this Purchase Agreement is not canceled or terminated as provided here, Buyer or Seller may seek actual damages 350. for breach of this Purchase Agreement or specific performance of this Purchase Agreement; and, as to specific 351. performance, such action must be commenced within six (6) months after such right of action arises. 352. NOTICE REGARDING PREDATORY OFFENDER INFORMATION: Information regarding the predatory offender 353. registry and persons registered with the predatory offender registry under MN Statute 243.166 may be obtained 354. by contacting the local law enforcement offices in the community where the Property is located or the Minnesota 355. Department of Corrections at (651) 361-7200, or from the Department of Corrections web site at 356. www.corr.state.mn.us. 357. BUYER HAS THE RIGHT TO A WALK-THROUGH REVIEW OF THE PROPERTY PRIOR TO CLOSING TO 358. ESTABLISH THAT THE PROPERTY IS IN SUBSTANTIALLY THE SAME CONDITION AS OF THE DATE OF 359. THIS PURCHASE AGREEMENT. 360. BUYER HAS RECEIVED A: (Check any that apply.) ❑ DISCLOSURE STATEMENT. SELLER'S PROPERTY 361. DISCLOSURE STATEMENTOR A 0 DISCLOSURE STATEMENT.- SELLER'S DISCLOSUREALTERNATIVES FORM. 362. DESCRIPTION OF PROPERTY CONDITION: See Disclosure Statement: Seller's Property Disclosure Statement or 363. Disclosure Statement: Seller's Disclosure Alternatives for description of disclosure responsibilities and limitations, if 364. any. 365. BUYER HAS RECEIVED THE INSPECTION REPORTS, IF REQUIRED BY MUNICIPALITY. 366. BUYER IS NOT RELYING ON ANY ORAL REPRESENTATIONS REGARDING THE CONDITION OFTHE PROPERTY 367. AND ITS CONTENTS. MN:PA-8 (8/19) Minnesota Realtors' Ili wthentlslgn ID; D52C29A7.792D-4E71-BD62-0D1FE11595BD 369. Property located at 3924 Utah Avenue North PURCHASE AGREEMENT 368. Page 9 Date May 21et 2020 New MN 55427 370. (Check appropriate boxes.) 371. SELLER WARRANTS THAT THE PROPERTY IS EITHER DIRECTLY OR INDIRECTLY CONNECTED TO: 372. CITY SEWER YES ❑ NO / CITY WATER FKIYES ❑ NO 373. SUBSURFACE SEE AGE TREATMENT SYSTEM 374. SELLER ❑ DOES F91 DOES NOT KNOW OF A SUBSURFACE SEWAGE TREATMENT SYSTEM ON OR ---------------- Check one. 375. SERVING THE PROPERTY. (If answer is DOES, and the system does not require a state permit, see Disclosure 376. Statement: Subsurface Sewage Treatment System.) 377. PRIVATE WEL 378. SELLER ❑ DOES K❑ DOES NOT KNOW OF A WELL ON OR SERVING THE PROPERTY. one.)------ ------------- 379. (If answer is DOES and well is located on the Property, see Disclosure Statement. Well.) 380, THIS PURCHASE AGREEMENT ❑ IS K❑ IS NOT SUBJECT TO AN ADDENDUM TO PURCHASE AGREEMENT. ---------(Check one.) .....---- 381. SUBSURFACE SEWAGE TREATMENT SYSTEM AND WELL INSPECTION CONTINGENCY. 382. (If answer is IS, see attached Addendum.) 383, IF A WELL OR SUBSURFACE SEWAGE TREATMENT SYSTEM EXISTS ON THE PROPERTY, BUYER HAS 384. RECEIVED A DISCLOSURE STATEMENT: WELL AND/OR A DISCLOSURE STATEMENT SUBSURFACE SEWAGE 385. TREATMENT SYSTEM. 386, HOME PROTECTIONIWARF3ANTY�L�IN: Buyer and Seller are advised to investigate the various home protection/ 387. warranty plans available for purchase. Different home protection/warranty plans have different coverage options, 388, exclusions, limitations, and service fees. Most plans exclude pre-existing conditions. (Check one.) 389. ❑ A Home Protection/Warranty Plan will be obtained by ❑ BUYER ❑ SELLER and paid for by one.)--- ----- ---------- 390. [_j BUYER ❑ SELLER to be issued by .... ............ (Che& one.)- — 391. at a cost not to exceed $ 392. ❑K No Home Protection/Warranty Plan is negotiated as part of this Purchase Agreement. However, Buyer may elect 393. to purchase a Home Protection/Warranty Plan. 394. 395. (Licensee) 396. (Real Estate Company Name) 397. Seth D Kulics (Licensee) 398 Lakes Area Realty (Real Estate Company Name) AGENCY NOTICE is ❑ Seller's Agent ❑ Buyer's Agent ❑ Dual Agent ❑ Facilitator. ....... .-..___............._-.. .................(check ene-)--------- ------ --------- ........ — is ❑ Seller's Agent © Buyer's Agent ❑ Dual Agent ❑ Facilitator. ..................... ..--•- -----1 • -------I...[Gtrerk nee.}•----------------- .................. ............... 399. THIS NOTICE DOES NOT SATISFY MINNESOTA STATUTORY AGENCY DISCLOSURE REQUIREMENTS. MN:PA-9 (8/19) Minnesota Realtors 9 , Lulhentisign ID: D52C2BA7-792D-4E71-BD62-4D1FE11595BD 401. Property located at 3924 Utah Avenue North PURCHASE AGREEMENT 400. Page 10 Date May 21et 2020 New MN 55427 402. DUAL AGENCY REPRESENTATION 403. PLEASE CHECK ONE OF THE FOLLOWING SELECTIONS: 404. ❑X Dual Agency representation DOES NOT apply in this transaction. Do not complete lines 405-421. 405. ❑ Dual Agency representation DOES apply in this transaction. Complete the disclosure in lines 406-421. 406. Broker represents both the Seller(s) and the Buyer(s) of the Property involved in this transaction, which creates a 407. dual agency. This means that Broker and its salespersons owe fiduciary duties to both Seller(s) and Buyer(s). Because 408. the parties may have conflicting interests, Broker and its salespersons are prohibited from advocating exclusively for 409. either party. Broker cannot act as a dual agent in this transaction without the consent of both Seller(s) and Buyer(s). 410. Seller(s) and Buyer(s) acknowledge that 411. (1) confidential information communicated to Broker which regards price, terms, or motivation to buy or sell will 412, remain confidential unless Seller(s) or Buyer(s) instructs Broker in writing to disclose this information. Other 413. information will be shared; 414. (2) Broker and its salespersons will not represent the interest of either party to the detriment of the other; and 415. (3) within the limits of dual agency, Broker and its salespersons will work diligently to facilitate the mechanics of 416. the sale. 417. With the knowledge and understanding of the explanation above, Seller(s) and Buyer(s) authorize and instruct Broker 418. and its salesperson to act as dual agents in this transaction. r 419. Seller Buyer 5lnf" G i DA : • AV COT 420. Seiler _ Buyer 05/22/2020 421. Date _ . Date 422. CLOSINGQOSTS: Buyer or Seller may be required to pay certain closing costs, which may effectively increase the 423. cash outlay at closing or reduce the proceeds from the sale. 424. SETTLEMENT STATEMENT: Buyer and Seller authorize the title company, escrow agent, and/or their representatives 425. to disclose and provide copies of the disbursing agent's settlement statement to the real estate licensees involved in 426. the transaction at the time these documents are provided to Buyer and Seller. 427. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT ("FIRPTA"): Section 1445 of the Internal Revenue Code 428. provides that a transferee ("Buyer") of a United States real property interest must be notified in writing and must withhold 429. tax if the transferor ("Seller") is a foreign person and no exceptions from FIRPTA withholding apply. Buyer and Seller 430. agree to comply with FIRPTA requirements under Section 1445 of the Internal Revenue Code. 431. Seller shall represent and warrant, under the penalties of perjury, whether Seller is a "foreign person" (as the same 432. is defined within FIRPTA), prior to closing. Any representations made by Seller with respect to this issue shall survive 433. the closing and delivery of the deed. 434. Buyer and Seller shall complete, execute, and deliver, on or before closing, any instrument, affidavit, or statement 435. reasonably necessary to comply with the FIRPTA requirements, including delivery of their respective federal taxpayer 436. identification numbers or Social Security numbers. 437. Due to the complexity and potential risks of failing to comply with FIRPTA, including the Buyer's responsibility for 438. withholding the applicable tax, Buyer and Seller should seek appropriate legal and tax advice regarding FIRPTA 439. compliance, as the respective licensee's representing or assisting either party will be unable to assure either 440. party whether the transaction is exempt from FIRPTA withholding requirements. MNTA-10 (8/19) Minnesota Realtors" It•7 wthenlisignID: D52C26A7.792D-4E71-BD62-4D1FE11595BD 442. Property located at 3924 Utah Avenne North PURCHASE AGREEMENT 441. Page 11 Date?'!Y 21st 2020 New Hone MN 55427 443. ENTIRE AGREEMENT: This Purchase Agreement and any addenda or amendments signed by the parties shall 444. constitute the entire agreement between Buyer and Seller. Any other written or oral communication between Buyer and 445. Seller, including, but not limited to, e-mails, text messages, or other electronic communications are not part of this 446. Purchase Agreement. This Purchase Agreement can be modified or canceled only in writing signed by Seller and 447. Buyer or by operation of law. All monetary sums are deemed to be United States currency for purposes of this Purchase 448. Agreement. 449. ELECTRONIC SIGNATURES: The parties agree the electronic signature of any party on any document related to this 450. transaction constitute valid, binding signatures. 451. FINAL ACCEPTANCE: To be binding, this Purchase Agreement must be fully executed by both parties and a copy 452. must be delivered. 453. SURVIVAL: All warranties specified in this Purchase Agreement shall survive the delivery of the deed or contract 454. for deed. 455. DATE OF THIS PURCHASE AGREEMENT: Date of this Purchase Agreement to be defined as the date online one 456. (1) of this Purchase Agreement. 457. OTHER: seller's obligation to sell the Property under this Purchase Agreement is contingent on the 458. following: 459. -Review and approval of the terms of the Purchase Agreement by the Economic Development Authority in and for the City of New Hope. 460. -if the above contingency is not met, Seller may declare this Purchase Agreement 461. canceled by written notice to Buyer in which case this Purchase Agreement is canceled and Buyer's earnest money will be fully refunded to Buyer. If Seller declares this Purchase 462. Agreement canceled due to the failure of one of this contingency, Buyer and Seller shall 463. immediately sign a Cancellation of Purchase Agreement confirming said cancellation. 464. 465. 466. 467. 468. 469, ADDENDA: The following addenda are attached and made apart of this Purchase Agreement. 470. NOTE: Disclosures and optional Arbitration Agreement are not part of this Purchase Agreement. 471. 7 Addendum to Purchase Agreement 472. ❑ Addendum to Purchase Agreement: Assumption Financing 473. ❑ Addendum to Purchase Agreement: Buyer Move -In Agreement 474. [ 1 Addendum to Purchase Agreement: Buyer Purchasing `As Is" and Limitation of Seller Liability 475. ❑ Addendum to Purchase Agreement: Condominium/Townhouse/Cooperative Common Interest Community 476. ("CIC") 477. ❑ Addendum to Purchase Agreement: Contract for Deed Financing 478. ❑ Addendum to Purchase Agreement, Disclosure of Information on Lead -Based Paint and Lead -Based Paint 479. Hazards 480. ❑ Addendum to Purchase Agreement. Sale of Buyer's Property Contingency 481. ❑ Addendum to Purchase Agreement: Sellers Rent Back Agreement 482. j] Addendum to Purchase Agreement: Short Sale Contingency 483. ❑ Addendum to Purchase Agreement: Subsurface Sewage Treatment System and Well Inspection Contingency WPA-11 (8/19) Minnesota 19 Realtors° wlhentlslgnlD: D52C28A7-792D4E71-BD62-4D1FE11595BD PURCHASE AGREEMENT 484. Page 12 Date maY- . 485. Property located at 3924 Utah Avenue North 486. 1 agree to sell the Property for the price and on the 487. terms and conditions set forth above. 488. 1 have reviewed all pages of this Purchase 489. Agreement. 490, ❑ If checked, this Purchase Agreement is subject to 491. attached Addendum to Purchase Agreement: 492. Counteroffer. 493. FIRPTA: Seller represents and warrants, under penalty 494. of perjury, that Seller ❑ IS X] IS NOT a foreign person (i.e., a — -- (Chet*- 495. non-resident alien individual, foreign corporation, foreign 496. partnership, foreign trust, or foreign estate for purposes of 497. income taxation. (See lines 427-440.)) This representation 498, and warranty shall survive the closing of the transaction 499. and the delivery of the deed. ` r 500. X (Seller's Signature) (Date) 501. X (Seller's Printed Name) 502. X (Marital Status) 503. X (Seller's Signature) 504. X (Sellers Printed Name) 505. X (Marital Status) (Date) New Hope 21st 2D20 MN 55427 I agree to purchase the Property for the price and on the terms and conditions set forth above. I have reviewed all pages of this Purchase Agreement. X �Aul6M1*ww 05/22/2020 + t►e RedeM (�oyrar3az> �grml&NO)un CDT (Date) X Ethan Lederer (Buyer's Printed Name) X Single (Marital Status) X (Buyer's Signature) X (Buyers Printed Name) X (Marital Status) 506. FINAL AG('E,!T NCE GATE: 507, is the date on which the fully executed Purchase Agreement is delivered. - The Final Acceptance Date 508, THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLER(S). 509. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. 510, 1 ACKNOWLEDGE THAT I HAVE RECEIVED AND HAVE HADTHE OPPORTUNITYTO REVIEWTHE DISCLOSURE 511. STATEMENT: ARBITRATION DISCLOSURE AND RESIDENTIAL REAL PROPERTYARBITRATIONAGREEMENT, 512. WHICH IS A �PTI(q %AL,VOLUA NTARY GREEMENT AND IS NOT PART OF THIS PURCHASE AGREEMENT,AulhenfiSIW 513. SELLERS) BUYER(S) ` n 5rM020 10:30 13 AM CDT 514. SELLER(S) BUYER(S) MN:PA- 12 (8/19) Minnesota Realtors® wlhentisign ID: D52C2BA7-792D-4E71-BD62-4D1FE11595BD WIRE FRAUD ALERT Internet fraud — the use of Internet services or software with Internet access to defraud victims — is on the rise in real estate transactions. THESE SOPHISTICATED CRIMINALS COULD: ■ HACK INTO YOUR E-MAIL ACCOUNT or the e-mail of others involved in your real estate transaction and may direct you to wire money to the hacker's account. • SEND FRAUDULENT E-MAILS that appear to be from your real estate licensee, lender, or closing agent. • CALL YOU claiming they have revised wiring instructions. Buyers/Tenants and Sellers/Owners are advised to: (1) Never wire funds without confirming the wiring instructions directly with the intended recipient. (2) Verify that the contact information for the wire transfer recipient is legitimate by calling a known phone number for the broker or closing agent. Do not rely on the information given to you in an e-mail communication. (3) Never send personal information through unsecured/unencrypted e-mail. If you suspect wire fraud in your transaction: (1) Immediately notify your bank, closing agent, and real estate licensee. (2) File a complaint online at the Internet Crime Complaint Center (IC3) at http://www.ic3.gov. The undersigned acknowledge receipt of this wire fraud alert and understand the importance of taking proactive measures to avoid being a victim of wire fraud in a real estate transaction. Authenfisicn- �' Xedvt" 05/22/2020 ,ORMP@y 10:35:57 AM CDT (Date) 6� ZG4 (Signature) (Date) This form approved by the Minnesota Association of REALTORS®, which disclaims any liability arising out of use or misuse of this form. © 2018 Minnesota Association of REALTORS°, Edina, MN MN-WFA (8/18) Minnesota , Realtors° wthentislgn ID: FOA62DB2.6EBl-409B-BD5B-6EOB24E93AEF ADDENDUM TO PURCHASE AGREEMENT: L A K ES DISCLOSURE OF INFORMATION ON A R E A LEAD -BASED PAINT AND LEAD -BASED a ❑ PAINT HAZARDS R E A L T Y This form approved by the Minnesota Association of REALTORS®, which disclaims any liability arising out of use or misuse of this form. © 2019 Minnesota Association of REALTORS®, Edina, MN 1. Date May 21st, 2020 2. Page 1 3. Addendum to Purchase Agreement between parties, dated May 21st 2020 pertaining to 4. the purchase and sale of the Property at 3924 Utah Avenue North 5 New Hope MN 55427 6. Lead Warning Statement 7. Every buyer of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified 8. that such property may present exposure to lead from lead -based paint that may place young children at risk of 9. developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including 10. learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also 11. poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide 12. the buyer with any information on lead -based paint hazards from risk assessments or inspections in the seller's 13. possession and notify the buyer of any known lead -based paint hazards. A risk assessment or inspection for possible 14. lead -based paint hazards is recommended prior to purchase. 15. Seller's Disclosure (Check one.) 16. FXJ Seller has no knowledge of, or records or reports relating to, lead -based paint and/or lead -based paint hazards 17. in the housing. 18. ❑ Seller has knowledge of lead -based paint and/or lead -based paint hazards in the housing and has provided Buyer 19. with all available details, records, and reports, if any, pertaining to lead -based paint and/or lead -based paint hazards 20. in the housing. (Please explain and list documents below.): 21. 22. --- 23.- --- 24. Buyer's Acknowledgment 25. Buyer has received copies of all information listed above, if any. 26. Buyer has received the pamphlet, Protect Your Family from Lead in Your Home. 27. Buyer has: (Check one.) 28. ❑>K Waived the opportunity to conduct a risk assessment or inspection for the presence of lead -based paint and/or 29. lead -based paint hazards; or 30. ❑ Received a 10-day opportunity (or mutually agreed -upon period) to conduct a risk assessment or inspection for 31. the presence of lead -based paint and/or lead -based paint hazards. 32. If checked, this contract is contingent upon a risk assessment or an inspection of the property for the presence of lead- 33. based paint and/or lead -based paint hazards to be conducted at Buyer's expense. The assessment or inspection 34. shall be completed within ❑ TEN (10) ❑ Calendar Days after Final Acceptance of the Purchase -------------- (Cner:.e one) ---- 35. Agreement. TLX:SALE 1 (8/19) Minnesota 19 Realtors° InstanetFORM wthentlsign ID: FOA62DB2-BEB1-009B-BD5B-6EDB24E93AEF 37 38. 39. 40. 41. 42, 43. 44. 45. 46. 47. 48. 49. 50. 51. Property located at 3924 Utah Avenue North ADDENDUM TO PURCHASE AGREEMENT: DISCLOSURE OF INFORMATION ON LEAD -BASED PAINT AND LEAD -BASED 36. Page 2 PAINT HAZARDS New Hope MN 55427 This contingency shall be deemed removed, and the Purchase Agreement shall be in full force and effect, unless Buyer or real estate licensee representing or assisting Buyer delivers to Seller or real estate licensee representing or assisting Seller, within three (3) Calendar Days after the assessment or inspection is timely completed, a written list of the specific deficiencies and the corrections required, together with a copy of any risk assessment or inspection report. If Buyer and Seller have not agreed in writing within three (3) Calendar Days after delivery of the written list of required corrections that: (A) some or all of the required corrections will be made; or (B) Buyer waives the deficiencies; or (C) an adjustment to the purchase price will be made; this Purchase Agreement is canceled. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation and directing all earnest money paid here to be refunded to Buyer. It is understood that Buyer may unilaterally waive deficiencies or defects, or remove this contingency, providing that Buyer or real estate licensee representing or assisting Buyer notifies Seller or real estate licensee representing or assisting Seller of the waiver or removal, in writing, within the time specified. 52. 53. 54. Real Estate Licensee's Acknowledgment Real estate licensee has informed Seller of Seller's obligations under 42 U.S.C. 4852(d) and is aware of licensee's responsibility to ensure compliance. 55. Certification of Accuracy 56. The following parties have reviewed the information above and certify, to the best of their knowledge, that the information 57. provided by the signatory is true and accurate. Aulhenfiscrr �L 5_2,6- F,Itf�cuL.G..1e 05/21/2020 58 . (Seller) (Date) ifo6f2D20 5:08:31 PM CDT (Date) 59. (Seller) (Date) (Buyer) (Date) FAulhsnfisicn• S A J9 x" ifc6 60. (Real Estate Licensee) (Date) IFFvs5NY�W 1BAWC0T (Date) TLKSALE-2 (8/19) Minnesota Realtors' InstonetFORM wthentlsign ID: D7B56424-CA12-4FBE-BA10-4F1F145D7E62 L A K E S DISCLOSURE STATEMENT: o A R E A COMPENSATION DISCLOSURE REALTY TO BUYER/TENANT This form approved by the Minnesota Association of REALTORS®, which disclaims any liability arlsing out of use or misuse of this form. © 2019 Minnesota Association of REALTORS®, Edina, MN 1. Date May 21st, 2020 2. If Broker is receiving any compensation from a party other than Buyer/Tenant, relating to the property at 3 3924 Utah Avenue North _ New Hope MN 55427 4 Lot 023 Block 006 Ho ewood Hills 5. the Broker hereby notifies Buyer/Tenant that the amount of compensation to be paid to Broker, excluding listing portion, 6. is: (Check all that apply.) 7. From Seller/Owner or their Broker 0 2.5 % of sale price. 8. ❑ $ 9. ❑ 10. From Buyer/Tenant [Ji __ % of sale price. 11. ❑$ 12. ❑. 11 I/We hereby acknowledge that I/we have received a copy of this Compensation Disclosure prior to signing a lease or 14. an offer to purchase the property. Aufhentisic 15. Lakes Area Realty r£L _ 05l21/2020 (Real Estate Company Name) (Date) A-VO �s°�il� s1 PF11 COT (Date) EsA „ +C.)hw� 05121 /2020 16. BY: J9 Xulkh (L epA6llAl gTorAssistingBuyer/Tenant) (Date) 17 1428 W 26th ST (Address) 18.Minneapolis MN 55408-1903 (City/State/Zip) 19 sethkulics@gmail.com (E-mail Address) 20. 21. 22. MN.DS:CDB (8119) (Address) (City/State/Zip) ethan.lederer@sciton.com (E-mail Address) (Buyer/Tenant) (Date) (Address) (City/Stale/Zip) (E-mail Address) Minnesota Realtors' wthentlsign ID: D7B56424•CA12.4FBE-6A1D-4F1F145D7E62 LA K E S ADDENDUM TO PURCHASE AGREEMENT A R E A This form approved by the Minnesota Association of REALTORS®, k which disclaims any liability arising out of use or misuse of this form. R E A L T Y © 2019 Minnesota Association of REALTORSe, Edina, MN 1. Date May list, 2020 2. Pagel 3. Addendum to Purchase Agreement between parties, dated May 218L 2020 , pertaining to the 4. purchase and sale of the Property at 3924 Utah Avenue North 5 New Hope MN 55427 6. In the event of a conflict between this Addendum and any other provision of the Purchase Agreement, the language 7. in this Addendum shall govern. Buyer agrees to allow the city of New Hope to show the property to the community to promote 8. "Scattered Site Housing Project" until July 2nd. The city of New Hope agrees to fix anything 9. damaged during the time of showings. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. • AvFhentisscu 05/21/2020 31. (Seller) (Date) (gum PM Wr (Dale) 32. (Seller) (Date) (Buyer) (Date) 33. THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLER(S). 34, IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. MN-APA (8/19) Minnesota Realtors® InstanetFORM! wlhentisign ID: C0BC57F0-C9A5.48D2-AFE4.3C63110CC2A7 M.S.B.A. Real Property Form No. 15 (2005, 2016, 2017) CONDITION OF THE PROPERTY PAGE 1 of 11 CONDITION OF THE PROPERTY. © Copyright 1998-2004, 2005, 2016, 2017 by Minnesota State Bar Association, Minneapolis, Minnesota. No copyright is claimed for statutory text. Intended for use with "Minnesota Standard Residential Purchase Agreement," M.S.B.A. Real Property Form No. 1, (2004 version or later). BEFORE YOU USE OR SIGN THIS FORM, YOU SHOULD CONSULT WITH A LAWYER TO DETERMINE THAT THE RIGHTS, OBLIGATIONS, AND CONSEQUENCES INVOLVED IN THE USE OF THIS FORM ADEQUATELY PROTECTS YOUR LEGAL RIGHTS. Minnesota State Bar Association disclaims any liability arising out of use of this form. This document, dated 2020 concerns the real property located at: [street address] 3924 Utah Ave. N., New Hope, MN and legally described as: Lot 23, Block 6, Hopewood Hills, Hennepin County, Minnesota DISCLOSURE STATUTES. Section 513.52 Definitions. Subdivision 1. Scope. Forpurposes of sections 513.52 to 513.60, the terms defined in this section have the meanings given them. Subd. 2. Prospective buyer. "Prospective buyer" [Weans a person negotiating or offering to acquire for value legal or equitable title, or the Tight to acquire legal or equitable title, to residential real property. Subd. 3. Real estate licensee. "Real estate licensee" means a person licensed under chapter 82. Subd. 4. Residential real property or residential real estate. "Residential real property" or "residential real estate" means property occupied as, or intended to be occupied as, a single-family residence, including a unit in a common interest community as defined in section 51513.1-103, clause (10), regardless of whether the unit is in a common interest community not subject to chapter 515B. Subd. 5. Seller. "Seller" means a person who owns legal or equitable title to residential real property. Section 513.53 Applicability. The seller disclosure requirements in sections 513.52 to 513.60 apply to the transfer of any interest in residential real estate, whether by sale, exchange, deed, contract for deed, lease with an option to purchase, or any other option. Section 513.54 Exceptions. The seller disclosure requirements in sections 513.52 to 513.60 do not apply to any of the following: (1) real property that is not residential real property; (2) a gratuitous transfer; (3) a transfer pursuant to a court order; (4) a transfer to a government or governmental agency; (5) a transfer by foreclosure or deed in lieu of foreclosure; (6) a transfer to heirs or devisees of a decedent; (7) a transfer from a cotenant to one or more other cotenants; (8) a transfer made to a spouse, parent, grandparent, child, or grandchild of the seller, (9) a transfer between spouses resulting from a decree of marriage dissolution or from a property settlement agreement incidental to that decree; (10) a transfer of newly constructed residential property that has not been inhabited; (I I ) an option to purchase a unit in a common interest community, until exercised; (12) a transfer to a person who controls or is controlled by the grantor as those terns are defined with respect to a declarant under section 515113.1-103, clause (2); (13) a transfer to a tenant who is in possession of the residential real property; or (14) a transfer of special declarant rights under section 515B.3-104. Section 513.55 General disclosure requirements. Subdivision 1. Contents. (a) Before signing an agreement to sell or transfer residential real property, the seller shall make a written disclosure to the prospective buyer. The disclosure must include all material facts of which the seller is aware that could adversely and significantly affect: (1) an ordinary buyer's use and enjoyment of the property; or (2) any intended use of the property of which the seller is aware. (b) The disclosure must be made in good faith and -based upon the best of the seller's knowledge at the time of the disclosure. [Emphasis added.] Subd. 2. Disclosure to licensee. A seller may provide the written disclosure required undersections 513.52 to 513.60 to a real estate licensee representing or assisting the prospective buyer. The written disclosure provided to the real estate licensee representing orassisting the prospective buyer is considered to have been provided to the prospective buyer. If the written disclosure is provided to the real estate licensee representing or assisting the prospective buyer, the real estate licensee shall provide a copy to the prospective buyer. Section 513.56 Disclosure not required. Subdivision 1. General. Section 513.55 does not create a duty to disclose the fact that residential property: (1) is or was occupied by an owner or occupant who is or was suspected to be infected with human immunodeficiency virus or diagnosed with acquired immunodeficiency syndrome; (2) was the site of a suicide, accidental death, natural death, or perceived paranormal activity; or (3) is located in a neighborhood containing any adult family home, community - based residential facility, or nursing home. Subd. 2. Offenders. Section 513.55 does not create a duty to disclose information regarding an offenderwho is required to registerunder section 243.166, or about whom notification is made under that section, if the seller, in a timely manner, provides a written notice that information about the predatory offender registry and persons registered with the registry may be obtained by contacting the local law enforcement agency where the property is located or the Department ofCorrections. This section does not create a duty to disclose any facts described in subdivision I and this subdivision for property that is not residential real property. Subd. 3. Inspections. (a) Except as provided inparagraph (b), a seller is not required to disclose information relating to the real property if a written report that discloses the information has been prepared by a qualified third party and provided to the prospective buyer. For purposes of this paragraph, "qualified third party" means a federal, state, or local governmental agency, or any person whom the seller, or prospective buyer, reasonably believes has the expertise necessary to meet the industry standards of practice for the type of inspection or investigation that has been conducted by the third party in order to prepare the written report- (b) A sel ler shall disclose to the prospective buyer material facts known by the seller that contradict any information included in a written report under paragraph (a) if a copy of the report is provided to the seller. Section 513.57 Liability for error, inaccuracy, or omission. Subdivision 1. No liability. Unless the prospective buyer and seller agree to the contrary in writing, a seller is not liable for any error, inaccuracy, oromission of any information delivered under sections 513.52 to 513.60 if the error, inaccuracy, or omission was not within the personal knowledge of the seller, or was based entirely on information provided by other persons as specified in section 513.56, subdivision 3, and ordinary care was exercised in transmitting the information. It is not a violation of sections 513.52 to 513.60 if the seller fails to disclose information that could be obtained only through inspection or observation of inaccessible tuthentisign ID: COSC57FO-C9A54aD2-AFE4-3C63110CC2A7 M.S.B.A, Real Property Form No. 15 (2005, 2016, 2017) PAGE 2 of 11 CONDITION OF THE PROPERTY portions of the real estate or could be discovered only by a person with expertise in a science or trade beyond the knowledge of the seller. Subd. 2. Liability. A seller who fails to make a disclosure as required by sections 513.52 to 513.60 and was aware of material facts pertaining to the real property is liable to the prospective buyer, A person injured by a violation of this section may bring a civil action and recover damages and receive other equitable relief as determined by the court. An action under this subdivision must be commenced within two years after the date on which the prospective buyer closed the purchase or transfer of the real property. Subd. 3. Other actions. Nothing in sections 513.52 to 513.60 precludes liability for an action based on fraud, negligent misrepresentation, or other actions allowed by law. Section 513.58 Amendment to disclosure. Subdivision 1. Notice. A seller must notify the prospective buyer in writing as soon as reasonably possible, but in any event before closing, if the seller learns that the seller's disclosure required by section 513.55 was inaccurate. Subd. 2. Failure to notify; liability. A seller who fails to notify the prospective buyer of any amendments to the initial disclosure required under subdivision 1 is liable to the prospective buyer as provided in section 513.57. Section 513.59 Transfer not invalidated. A transfer subject to sections 513.52 to 513.60 is not invalidated solely because of the failure of any person to comply with a provision of those sections. This section does not prevent a court from ordering a rescission of the transfer. Section 513.60 Waiver. The written disclosure required under sections 513.52 to 513.60 may be waived if the seller and the prospective buyer agree in writing. Waiver of the disclosure required under sections 513.52 to 513.60 does not waive, limit, or abridge any obligation for seller disclosure created by any other law. [Emphasis added.] Seller: If you are using M.S.B.A. Real Property Form No. 1, Minnesota Standard Residential 2 Purchase _Agreement (©2004 or Iaterj, skip this section on "Compliance With Statute." It, 3 , duplicates Paragraph 10., of your purchase agreement. j 5 1 COMPLIANCE WITH STATUTE 6 Seller and Buyer may agree to inspections conducted by Buyer regardless of how Seller and Buyer 7 decide to comply with this disclosure law. If Buyer wants an inspection, the purchase agreement 8 should include provisions for a Buyer -obtained inspection. 9 Pursuantto Minnesota Statutes sections 513.52 - 513.60, to comply with the statute: Seller must provide 10 a written disclosure [see (1) below], or Buyer must have received an inspection report [see (2) below], or 11 Buyer and Seller may waive the written disclosure requirements [see (3) below]. This compliance is for 12 Seller's real property located at [street address]: 3984 Zealand Ave. N., New HODe. MN 55427 13 14 [SELECT ONLY ONE OF THESE THREE.] 15 ® (1) Seller's Disclosure. Seller is providing a written disclosure to Buyer. Seller's disclosure is 16 included in this form on page 3. Seller shall correct in writing any inaccuracies in the disclosure 17 as soon as reasonably possible before closing. 18 19 (2) Inspection Report. [If (2) is selected, pages 3-8 of this form may be discarded.] Buyer has' 20 received an inspection report by a qualified third -party. If a copy of the inspection report is 21 provided to Seller, Seller shall disclose to Buyer material facts known to Seller that contradict 22 any information in the inspection report. Seller's disclosure of contradictory information is 23 below on page 2 of this form. 24 25 ®✓ 26 27 28 29 30 31 (3) Waiver of Disclosure. [If (3) is selected, pages 3-8 of this form may be discarded.] By signing here, Seller and Buyer waive the written disclosure and inspection report required under sections 513.52 to 513.60. DO NOT 51TNJ7�UNLES WAI R le SELECTED. A� th��.� SELLER: �`(� } BUYER: 5/26/2020 3:11:07 PM CDT SELLER: BUYER: wthentlsign 10: COBC57FO-C9A54ED2-AFE4-3CB3110CC2A7 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 M.S.B.A. Real Property Form No. 15 (2005, 2016, 2017) PAGE 3 of 11 CONDMON OF THE PROPERTY J SELLER'S DISCLOSURE OF CONDITIONS CONTRADICTORY TO THE INSPECTION REPORT If a copy of the inspection report has been provided to Seller, Seller discloses to Buyer material facts known by Seller that contradict any information included in the written inspection report: [Use additional sheets if necessary.] NOTICE REGARDING PREDATORY OFFENDERS: Information about the predatory offender registry and persons registered with the registry may be obtained by contacting the local law enforcement agency or by contacting the Minnesota Department of Corrections at 651-642-0200 or at http://www.doc.state.mn.us. BUYER'S STATEMENT OF INTENDED USE. To assist Seller with the requirements of Minn. Stat. section 513.55, Subd. 1(a)(2), Buyer states that Buyer intends to use the property as a single-family residence and for the following uses: wthentisign ID: COBC57FO-C9A548D2.AFE4.3C03110CC2A7 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 M.S.B.A. Real Property Form No. 15 (2005, 2016, 2017) PAGE 4 of 11 CONDITION OF THE PROPERTY SELLER'S DISCLOSURE: CONDITION OF THE PROPERTY. PART A: SELLER'S STATUTORY DISCLOSURE. LIST HERE ALL MATERIAL FACTS OF WHI AFFECT. (1) AN ORDINARY BUYER'S USE AND (2) ANY INTENDED USE OF THE PROI wthenlisign ID: COBC57FO-C9A5d6D2.AFE4-3C6311OCC2A7 M.S.B.A. Real Property Form No. 15 (2005, 2016, 2017) PAGE 5 of 11 CONDITION OF THE PROPERTY 121 The statutes printed above do not provide guidance or interpretation as to what condition 122 might be a "material fact ... that could adversely and significantly affect an ordinary buyer's 123 use and enjoyment of the property." The following questions in Parts B, C, D, and E 124 ("Optional and Supplemental Disclosures"), while not specifically required by the statute, 125 are here to help Seller consider all of the common components of the property that might 126 have conditions (now or in the past) to be disclosed to Buyer. 127 128 OPTIONAL AND SUPPLEMENTAL DISCLOSURES. 129 130 PART B: CONDITION OF THE REAL PROPERTY: BUILDINGS, 131 IMPROVEMENTS, LAND. The condition of any personal property to be 132 transferred to Buyer is excluded from this Disclosure. 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 Question Answer CIRCLE ONE What year did you buy the property? What year was the house built? How old are the roof shingles or roof surface on the house and attached garage? How old are the roof shingles or roof surface on the detached garage? Have you occupied the property continuously for the past year? If "No," please explain. YES NO Is the house suitable for year-round use? If "No," please explain. YES NO Do you have the prior owner's disclosure statements to you? If so, please attach a copy. YES NO Are you aware of any of the following, now or in the past? Explain all of your "YES" answers in the space at the end of this section. Soil or settling problems? YES NO Diseased trees? YES NO Animal or insect infestations? YES NO Flooding? YES NO Wet floors or wet walls? YES NO Water leakage or seepage anywhere in the buildings? YES NO Problems with the drain tile system, if there is one? YES NO Cracked floors or walls? YES NO Foundation cracks, settling, deterioration or other problems? YES NO Sewer backups? YES NO Ice damage to any of the buildings? YES NO Fire or smoke damage in the house or garage (except fires in fireplace or wood burning stove)? YES NO Explain all of your "YES" answers for this section. [Attach additional sheets, if necessary.] wthentisign ID: COBC57FO-C9A5-48D2-AFE4-3C6311OCC2A7 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 M.S.B.A. Real Property Form No. 15 (2005, 2016, 2017) CONDITION OF THE PROPERTY_ .___ .- PAGE 6of11 Question Answer CIRCLE ONE Have you made any warranty claims against manufacturers for problems with the property? YES NO Has the structure been altered, for example, adding a room, changing the roof, or remodeling an interior wall? YES NO Have there been any roof repairs or replacements? YES NO Have you had any pets in the house? YES NO Explain all of your "YES" answers for this section. (Attach additional sheets, if necessary. ] 183 PART C: CONDITION OF THE MECHANICAL SYSTEMS (HEATING, 184 PLUMBING, ELECTRICAL, GAS), FIXTURES, AND APPLIANCES. 185 The question to be answered for all of these items is, "Is this item in working order?" "In working order" means that the item 196 functions for the purpose that it is intended to perform, that it does not now need repairs or service, that it is not missing any 187 essential parts, and that its only imperfections are "cosmetic" or signs of "wear and tear" or diminished effectiveness associated 189 with a product of its age. 189 ARE THE FOLLOWING ITEMS IN WORKING ORDER? 190 191 192 193 194 195 196 197 199 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 Cross out items not included in this sale. Explain all of your "NO" answers for this section in the space at the end. [CIRCLE ONE.] Air Conditioners, Window Units (if built into windows) YES NO Air Conditioning, Central YES NO Awnings YES NO Ceiling fan(s) YES NO Central Heating System / Furnace YES NO Central Vacuum Cleaning System YES NO Dishwasher YES NO Door bells and buttons YES NO Drain Tile System YES NO Electrical system YES NO Electronic Air Cleaner YES NO Exhaust system / make-up air unit YES NO Fire Sprinkler System YES NO Fireplace flues, dampers, and mechanisms YES NO Fireplace Inserts YES NO Fireplace(s) YES NO Garage Door Opener Automatic Reverse YES NO Garage Door Opener YES NO Garage Door Opener Controls YES NO Garbage Disposal YES NO Gas grill (built in) YES NO Hot tub (spa), plumbing and equipment I YES NO Humidifier YES NO wthentisign ID: COBC57FO-C9A5-48D2-AFE4-3C63110002A7 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 260 261 262 263 264 265 M.S.B.A. Real Property Form No. 15 (2005, 2016, 2017) PAGE 7 of 11 CONDITION OF THE PROPERTY Incinerator YES NO Intercom system YES NO Microwave (built in) YES NO Plumbing YES NO Plumbing fixtures, faucets, sinks, toilets, baths, showers and drains YES NO Range / Oven (built in) YES NO Stove hoods YES NO Refrigerator(s) (built in) YES NO Satellite Dish YES NO Sauna heating equipment YES NO Security system YES NO Smoke Detectors YES NO Solar Collectors YES NO Storm Doors YES NO Storm Windows YES NO Sump Pump YES NO Supplemental heaters YES NO Swimming pool, plumbing and equipment YES NO Trash Compactor YES NO TV Antenna / Cable TV System YES NO Underground irrigation system (sprinklers) YES NO Water heater(s) YES NO Water treatment systems (softener, clarifier, filter) YES NO Window glass and seals YES NO Window hardware YES NO Window coverings, shades and drapery mechanisms YES NO Window screens YES NO Wood burning stove and chimney YES NO Explain all of your "NO" answers for this section: [Use additional sheets if necessary.] PART D: ENVIRONMENTAL DISCLOSURES. RADON. Seller's disclosures concerning radon gas are contained in the accompanying Radon Disclosure, M.S.B.A. Real Property Form No. 24 (2013). ASBESTOS. Question Answer CIRCLE ONE Comment or Explanation wthentleign ID: COBC57FO-C9A5-48D2-AFE4-3C6311OCC2A7 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 M.S.B.A. Real Property Form No. 15 (2005, 2016, 2017) CONDITION OF THE PROPERTY PAGE 8of11 Are you aware of any asbestos on the property? If "Yes," YES NO please explain. Are you aware of any inspections for the presence of YES NO asbestos? If "Yes," please explain and attach a copy of any inspection reports that you have. WELL WATER / MUNICIPAL WATER. Question Answer CIRCLE ONE Comment or Explanation Do you know if the well water has been tested for YES NO contamination? Attach a copy of any test reports that you have. If the drinking water is supplied to the property from a well YES NO that is not located on the property, has the water from that well been tested for contamination? Attach a copy of any test reports that you have. If the drinking water is supplied to the property from a YES NO municipal water supply, has the water from that source been tested for contamination? Attach a copy of any test reports that you have. Do you know if there are any contaminated ground water YES NO wells within one-half mile of the well on the property? If "Yes," please explain. AIR POLLUTION. Question Answer CIRCLE ONE Comment or Explanation Do you know of any air pollution problems affecting the YES NO property? If "Yes," please explain. Do you know of any odor problems affecting the property? YES NO If "Yes," please explain. Have there been dust, airborne dirt, or soot problems YES NO affecting the property? If "Yes," please explain. Has anyone smoked tobacco in the house? YES NO NOISE POLLUTION I VIRRATION_ Question Answer CIRCLE ONE Comment or Explanation Do you know if there has been any noise problems affecting YES NO the property? If "Yes," please explain. Do you know if there have been any vibrations affecting the YES NO property that are not generated at the property? If "Yes," please explain. Have you ever called the police to complain about noise in YES NO the neighborhood? If "Yes," please explain. MOLD. Question Answer [CIRCLE ONE] I Comment or Explanation wlhentlsign ID: COBC57F0•C9A5.4602•AFE4.3C6311OCC2A7 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360 361 362 363 M.S.B.A. Real Property Form No. 15 (2005, 2016, 2017) PAGE 9 of 11 CONDITION OF THE PROPERTY Are you aware if there has been any mold, mildew, YES NO moisture, or water inside the walls? Are you aware if there has been any mold, mildew, YES NO moisture, or water inside the ceiling and roof system? INSURANCE AND INSURABILITY Have you made any claims against your homeowner's YES NO insurance for damage to the building or its contents? If "Yes," please explain. Have you been denied homeowners insurance for this YES NO property? If "Yes," please explain. Have there been any liability claims made against your YES NO homeowners insurance because of the condition of the property? If "Yes," please explain. Is the property insured through the Minnesota FAIR Plan? If YES NO "Yes," please explain. UNDERGROUND STORAGE TANKS. Are there any underground storage tanks on the property? YES NO For each tank disclosed, has it been used for the storage of petroleum products? YES NO For each tank disclosed, has it leaked? YES NO For each tank disclosed, is the tank a single wall or double wall tank? 05/2fV2020 YES NO For each tank disclosed, is there an electronic leak monitor? YES NO For each tank disclosed, do you have an owners manual or other technical data describing the tank? YES NO PART E: SELLER'S CONCLUDING DISCLOSURE. LIST HERE ANY OTHER MATERIAL FACTS, NOT ALREADY DISCLOSED. _ _ _ jUse additional sheets if nemLy..� Seller(s) signatures:':ar'3•�,� .� C; Buyer received this Disclosure on [date] Aulhenfi N- Buyer(s) signatures: &hem jeedeen SQ<'5377�06 PM CpT 05/26/2020 S-2G - ZC) tuthenllsign ID: COBC57FO-COA546D2-AFE4.3C63110002A7 364 365 366 367 368 369 370 371 372 373 374 375 376 377 378 379 380 381 382 383 384 385 386 387 388 389 390 391 392 393 394 395 396 397 398 399 400 401 402 403 404 405 406 407 408 409 410 411 412 413 414 415 416 417 418 M.S.B.A. Real Property Form No. 15 (2005, 2016, 2017) PAGE 10 of 11 CONDITION OF THE PROPERTY SELLER'S SUPPLEMENTAL DISCLOSURE FOR CHANGED CONDITIONS OR FOR INACCURACIES IN THE INITIAL DISCLOSURE. CAUTION: The Minnesota law requiring a Seller's Disclosure can be interpreted to mean that Seller shall notify Buyer in writing as soon as reasonably possible before closing of any changed or incorrectly stated conditions. Since the date of Seller's Disclosure will likely be several weeks before the closing date, Seller is cautioned to supplement the Disclosure by disclosing any conditions that have changed since the date of the initial Disclosure and to correct any inaccuracies in the initial Disclosure. wthentisign7D: COBC57FO-C9A5-46D2-AFE4-3C63110CC2A7 M.S.B.A. Real Property Form No. 15 (2005, 2016, 2017) CONDITION OF THE PROPERTY 419 SUPPLEMENTAL PAGE PAGE 11 of 11 Ethan Lederer 6400 Barrie Road Minneapolis, Mn 720-235-6901 Ethan.lederer@sciton.com May 20, 2020 To whom it may concern at 3924 Utah Ave N, My name is Ethan Lederer and I would love for the opportunity to purchase your home. I've been searching for my first home for the last few months with very little luck finding something that I truly saw myself living in. However, I knew that I found the one when I first pulled up to the showing. I am a young, motivated individual looking to take the next step in life, planning for a family of my own. I was born and raised in Denver where my family still resides. To call your house my own would mean that I would have a safe and comfortable place for them to come visit. I am also in a relationship with "the one" who lives in Fargo. She has custody of her younger sister and does not get to visit often because of little space for her sister to have of her own. Your home would allow for frequent visits where we would all have a comfortable place to spend time together. From the three bedrooms, to the large backyard and everything in-between, this house checks all of the boxes that fits my personal and professional lifestyle. Your home is one that I see myself and myfuture in for years to come. I would be honored to be the next owner of the home you have so beautifully renovated. I hope that you consider my offer and allow me to continue building my future within the walls of 3924 Utah Ave N. I hope you are all safe and healthy during this time. Sincerely yours, e.rr- THEJosh Hennesyw M E C A�iA R .N"IGL ,DPP May 22, 2020 Ethan Lederer 6400 Barrie Road, APT 1601 Edina, MN 55345 Megastar Financial Corporation is pleased to notify you that based on the information you have provided and a credit report, you are pre -approved for conventional financing on the property located at 3924 Utah Ave N, New Hope, MN at the sales price of $387,000. All income and asset related documents have been received and verified. This Platinum Pre Approval is subject to the following conditions: • A valid sales contract on the subject property; • A satisfactory appraisal on the subject property to support the sales price; • A binder of hazard insurance to be furnished prior to closing; • A satisfactory flood zone determination; • Satisfactory review of the title insurance commitment by Lender; ■ Verification and acceptance of all mortgage -related information and documentation. In addition to the above standard conditions, your pre -approval is subject to the following conditions: This pre -approval expires on 8115/2020. This pre -approval is not a guaranty of final approval or a commitment to lend. Final approval is subject to receipt and validation of all documentation listed above, and other factors pertinent to satisfactory underwriting criteria. Sincerely, Joshua James Hennesy NMLS 452548 = oshOu meaastarfinancial. corn Megastar Financial Corporation 530 N 3'd St, STE 310 Minneapolis, MN 55401 Pit" 1 i F� B=Zl IN m"Imsm 11,01-11 Mol Before & After - 3924 Utah Avenue North J 'Wil Before & After - 3924 Utah Avenue North 1 Before & After - 3924 Utah Avenue North IT- ■ Am IE Before & After - 3924 Utah Avenue North Before & After - 3924 Utah Avenue North Le 11 ir Before & After - 3924 Utah Avenue North IN w Before & After - 3924 Utah Avenue North Before & After - 3924 Utah Avenue North �f Ll -A rz rzpv�7 Before & After - 3924 Utah Avenue North "Oka JR a ! I Ale 3924 UTAH AVENUE NORTH PRICE: $371,900 CITY OF NEW HOPE DEMONSTRATION PROJECT Demonstration project for city's scattered site housing program with improve- ments to nearly all interior and exterior areas of the house. Open kitchen and dining room floor plan with new 5' Center island, New quartz countertops, cabinets, and appliances, New/refinished wood flooring throughout main level and new carpeting upstairs and downstairs. Master suite with walk -In closet and master bath. Updated bathrooms with new vanities, fixtures, and tile. Half of basement finished. Great curb appeal with all new windows, sid- ing, roof, gutters, garage door, entry doors, driveway, and landscaping. VRTLYJ G'OL)R I NEWHOPEMN.GOWFORSALE Due to the CUVID-19 pandemic, the city of New Hope is unable to host an o in Ise ¢Ir t;`he tl-6!; sij-nrner. Those who are interested in viewing the interior of the home are encouraged to tour the property virtually (3D) and view photos at newhopemn.gov/forsale. Potential buyers or realtors interested in touring or the home in person should contract Jeff Alger, Community Development Specialist, for rnore informatign. 3 BEDROOMS ✓ 3 BATHROOMS 1,973 SQ FEET ✓ 0.24 ACRES CONTACT Jeff Alger, C❑ Specialist 763.531.5119 hrpernn.gov Budget for 3924 Utah Avenue North EXPENSES AMOUNT Acquisition (including closing costs) $ (191,968.70) Legal (purchase, contract extension) $ (2,736.00) 1st half real estate taxes $ (3,267.52) Lawn services $ (945.00) Utility billing $ (511.24) CenterPoint - gas $ (1,849.02) Xcel Energy - electric (estimated) $ (545.58) Base improvements $ (158,794.00) Alternate #1 $ (14,877.00) Change order #1- Roof $ (7,814.00) Change order #2 - A/C $ (4,250.00) Appraisal $ (375.00) Photos and 3D tour $ (265.00) Tree branch removal $ (575.00) Closing costs for sale (estimated) $ (1,500.00) Legal costs for sale (estimated) $ (1,000.00) Future utility billing (estimated) $ (64.00) Future CenterPoint - gas (estimated) $ (40.00) Future Xcel Energy - electric (estimated) $ (100.00) TOTAL $ (391,477.06) REVENUE AMOUNT EDA (home sale proceeds) $ 387,000.00 BLiyer's realtor fees (2.5%) $ (9,675.00) TOTAL $ 377,325.00 TOTAL COST/REVENUE $ (14,152.06) Estimated Tax Impact of Improvements at 3924 Utah Avenue North Estimated Market Value 2018, Payable 2019 Projected Estimated Market Value 2020, Payable 2021 Change Percent Change $202,000 $370,000 $168,000 83.17% Taxable Market Value 2018, Payable 2019 Projected Taxable Market Value 2020, Payable 2021 Change Percent Change $182,940 $366,060 $183,120 100.10% Net Taxes 2018, Payable 2019 Projected Net Taxes 2020, Payable 2021 Change Percent Change $3,267.52 $6,124.64 $2,857.12 87.44% Taxes Allocated to City 2018, Payable 2019 Projected Taxes Allocated to City 2020, Payable 2021 Change Percent Change $1,218.07 $2,283.15 $1,065.08 87.44% Project Expenses ($391,477.06) Lot Sale Revenue $377,325.00 Total Cost/Revenue ($14,152.06) # of Years (Year) Additional Taxes Collected By City Total Cost/ Revenue Return On Investment 0 (payable 2021) $0 ($14,152.06) -3.62% 1 (payable 2022) $1,065.08 ($13,086.98) -3.34% 2 (payable 2023) $2,130.16 ($12,021.90) -3.07% 3 (payable 2024) $3,195.24 ($10,956.82) -2.80% 4 (payable 2025) $4,260.32 ($9,891.74) -2.53% 5 (payable 2026) $5,325.40 ($8,826.66) -2.25% 10 (payable 2031) $10,650.80 ($3,501.26) -0.89% 15 (payable 2036) $15,976.20 $1,824.14 0.47% 20 (payable 2041) $21,301.60 $7,149.54 1.83% 25 (payable 2046) $26,627.00 $12,474.94 3.19% 30 (payable 2051) $31,952.40 J$17,800.34 4.55% *Based on new home valued at $370,000 (2020 payable formula) Estimated Return on Investment for 3924 Utah Avenue North Description Amount Investment $ (391,477.06) Return, Year 1 $ 1,065.08 Return, Year 2 $ 1,065.08 Return, Year 3 $ 1,065.08 Return, Year 4 $ 1,065.08 Return, Year 5 $ 1,065.08 Return, Year 6 $ 1,065.08 Return, Year 7 $ 1,065.08 Return, Year 8 $ 1,065.08 Return, Year 9 $ 1,065.08 Return, Year 10 $ 1,065.08 Return, Year 11 $ 1,065.08 Return, Year 12 $ 1,065.08 Return, Year 13 $ 1,065.08 Return, Year 14 $ 1,065.08 Return, Year 15 $ 1,065.08 Return, Year 16 $ 1,065.08 Return, Year 17 $ 1,065.08 Return, Year 18 $ 1,065.08 Return, Year 19 $ 1,065.08 Return, Year 20 $ 1,065.08 Return, Year 21 $ 1,065.08 Return, Year 22 $ 1,065.08 Return, Year 23 $ 1,065.08 Return, Year 24 $ 1,065.08 Return, Year 25 $ 1,065.08 Return, Year 26 $ 1,065.08 Return, Year 27 $ 1,065.08 Return, Year 28 $ 1,065.08 Return, Year 29 $ 1,065.08 Return, Year 30 $ 1,065.08 Total Returns $ 31,952.40 Investment Cost $ 391,477.06 Selling Price $ 377,325.00 Return on Investment 4.55% Estimated Internal Rate of Return for 3924 Utah Avenue North ❑escription Amount Investment $ (14,152.06) Return, Year 1 $ 1,065.08 Return, Year 2 $ 1,065.08 Return, Year 3 $ 1,065.08 Return, Year 4 $ 1,065.08 Return, Year 5 $ 1,065.08 Return, Year 6 $ 1,065.08 Return, Year 7 $ 1,065.08 Return, Year 8 $ 1,065.08 Return, Year 9 $ 1,065.08 Return, Year 10 $ 1,065.08 Return, Year 11 $ 1,065.08 Return, Year 12 $ 1,065.08 Return, Year 13 $ 1,065.08 Return, Year 14 $ 1,065.08 Return, Year 15 $ 1,065.08 Return, Year 16 $ 1,065.08 Return, Year 17 $ 1,065.08 Return, Year 18 $ 1,065.08 Return, Year 19 $ 1,065.08 Return, Year 20 $ 1,065.08 Return, Year 21 $ 1,065.08 Return, Year 22 $ 1,065.08 Return, Year 23 $ 1,065.08 Return, Year 24 $ 1,065.08 Return, Year 25 $ 1,065.08 Return, Year 26 $ 1,065.08 Return, Year 27 $ 1,065.08 Return, Year 28 $ 1,065.08 Return, Year 29 $ 1,065.08 Return, Year 30 $ 1,065.08 Total Returns $ 31,952.40 Internal Rate of Return 6.33% NOTICE OF PUBLIC HEARING SALE OF EDA OWNED PROPERTY 3924 UTAH AVE NORTH CITY OF NEW HOPE, MINNESOTA Notice is hereby given that the Economic Development Authority in and for the City of New Hope will meet at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota on Monday, June 8, 2020, at 7 p.m. to hold a public hearing for the sale of EDA owned property located at 3924 Utah Avenue North, legally described as follows: Lot 23, Block 6, Hopewood Hills, Hennepin County, Minnesota PID # 18-118-21-41-0077 Such persons as desire to be heard with reference to the proposal will be heard at this meeting. Options for providing feedback are as follows: 1. Submit written comments prior to the meeting to Valerie Leone, City Clerk, by email (vleone@newhopemn.gov) or by US mail (4401 Xylon Ave N, New Hope MN, 55428, attention Valerie Leone). 2. Provide comments during the meeting by telephone (call Valerie Leone, City Clerk, at 763-531- 5117 in advance of the meeting to obtain the call in number and details). 3. Attend the meeting at city hall (social distancing will be in place). Accommodations such as a sign language interpreter or large printed materials are available upon request at least five working days in advance. Please contact the city clerk to make arrangements (telephone 763- 531-5117). Dated: May 21, 2020 Valerie Leone City Clerk (Published in the New Hope -Golden Valley Sun -Post on May 28, 2020) Request for Action February 24, 2020 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Jeff Alger, Community Development Specialist; Jeff Sargent, Director of Community Development Agenda Section EDA Item Number 4 Agenda Title Resolution approving extension of completion date for remodeling contract with Day Construction, LLC for 3924 Utah Avenue North (Improvement Project No. 1020) Requested Action Staff requests the EDA approve a resolution extending the deadline for completion of the remodel and rehabilitation of the single-family home at 3924 Utah Avenue North. Policy/Past Practice In the past, the city has renegotiated the terms of development contracts when circumstances call for amendments that are necessary and/or beneficial to both parties. Background The Economic Development Authority (EDA) awarded a contract for the remodel and rehabilitation of 3924 Utah Avenue North to Day Construction in the amount of $173,671 in August of 2019. It included the base bid of $158,794 and alternate #1 (remodel northeast second -floor bedroom to create a master -suite) at a cost of $14,877. The contractor has requested an extension to the completion deadline required by the contract. The contract calls for all work to be completed by February 19, 2020, and allows the city to pursue liquidated damages of $100 per calendar day if the contract remains uncompleted after the deadline. The project is nearing completion; however, the contractor is requesting a one -month extension to the completion deadline. If the one -month extension were to be approved, the contract would require completion of the project by March 20, 2020. During the rehabilitation process, significant roof damage was discovered, resulting in a change order for its replacement. Additionally, city staff was in contact with an interested buyer who had expressed interest in several upgrades to the property. The interested buyer elected not to move forward with submitting an offer at the time, however, the negotiations delayed the design and finish selection process for some items by a few weeks. The contractor also cited longer than anticipated lead times on several products and difficulties scheduling subcontractors during the holiday season for the delay. For these reasons, the contractor is requesting that liquidated damages not be applied and that the contract be extended. In addition, the contractor has requested until May 15, 2020, to complete outdoor installations/ finishes that are weather dependent. This includes installation of the driveway and foundation plantings and exterior painting. Final payment would not be issued until these items have been completed. Recommendation Staff recommends approval of a resolution extending the deadline for the rehabilitation contract with Day Construction for the remodel and rehabilitation of the property located at 3924 Utah Avenue North to March 20, 2020. In addition, the deadline to complete outdoor installations that are weather dependent would be extended through May 15, 2020. L•\RFA\COMM DEV\2020\EDA\Scattered Site Housing\Q - 3924 Utah Ave N Contract Extension 02-24-20.docx Request for Action, Page 2 Attachments • Resolution • Extension request from Day Construction (February 17, 2020) • First amendment to remodeling contract • Contract CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 20-o3 APPROVING EXTENSION OF COMPLETION DATE FOR REMODELING CONTRACT WITH DAY CONSTRUCTION, LLC FOR 3924 UTAH AVENUE NORTH (IMPROVEMENT PROJECT NO. 1020) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope ("EDA") as follows: WHEREAS, the EDA entered into a Remodeling Contract with Day Construction, LLC ("Day Construction") for the Rehabilitation of the property located at 3924 Utah Avenue North, New Hope, MN ("Contract") legally described as: "Lot 23, Block 6, Hopewood Hills, Hennepin County, Minnesota" ("Property") dated August 26, 2019; and WHEREAS, paragraph 4 of the Contract states that Day Construction shall complete performance under the Contract by February 19, 2020 which is the Completion Date; and WHEREAS, Day Construction has requested two separate extensions to the Completion Date in the Contract, depending on whether the Work is "weather dependent": (1) extension until March 20, 2020 for the completion of the Work that is located inside and is not weather dependent; and (2) extension until May 15, 2020 for the completion of the Work that is "weather dependent" such as exterior painting, driveway replacement and landscape plantings; and WHEREAS, Day Construction has listed several reasons that delayed the timely completion of the Work including: greater than expected time off around the holidays, delays relating to discussions with potential buyer regarding selection of finishes, adding roof - replacement to Work items, and unexpectedly longer lead times on delivery of several products; and WHEREAS, it is in the best interest of the EDA to grant an extension to Day Construction in order for Day Construction to complete the remodeling and rehabilitation of the single family home on the Property in accordance with the City's scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval from the EDA of the amendment to the Contract. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the amendment of the Contract between the EDA and Day Construction, Inc., as set forth in the attached Exhibit A, is approved, it being in the best interest of the EDA to assist Day Construction, Inc. in the successful remodeling and rehabilitation of a single-family home on the Property in accordance with the City's scattered site housing program and policy. 3. The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to amend the Contract. Dated the 241h day of February, 2020. Kathi NeLkm, President Attest: Kirk c onald, Executive Director P:\Attomey\SAS\l Client Files\2 City of New Hope\99-11432 3924 Utah Ave N\Resolution Approving Extension regarding 3924 Utah Ave N.docx FIRST AMENDMENT TO REMODELING CONTRACT THIS FIRST AMENDMENT TO REMODELING CONTRACT (this "Amendment") is dated effective as of February 24, 2020, by and between The Economic Development Authority, in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("EDA") and Day Construction, LLC ("Contractor"). RECITALS A. EDA and Contractor are parties to that certain Remodeling Contract for the Rehabilitation of 3924 Utah Avenue North, New Hope, Minnesota dated August 26, 2019 ("Contract"), for the rehabilitation of that certain real property legally described in the Contract. B. EDA and Contractor now wish to amend the Contract to extend the Completion Date. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth below, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Co pletion Date. The Completion Date as defined in Paragraph 4 of the Contract shall be extended to March 20, 2020 for the interior Work and May 15, 2020 for the "weather dependent" items including exterior painting, driveway replacement and landscape plantings. All the remaining terms shall remain the same. 2. Ratification. Except as expressly amended hereby, the Contract is fully ratified and confirmed and continues in full force and effect. 3. Counterparts. This Amendment may be executed in any number of counterparts, which, when taken together, shall constitute a complete and original instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first above written. The Economic Development Authority, in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota By: Kirk McDonald Its: Executive Director Day Construction, LLC By: Matthew Day Its: Chief Manager P:\Attomey\SAS\l Client Files\2 City of New Hope\99-11432 3924 Utah Ave N\First Amendment to Remodeling Contract.docx Jeff Alger From: Matthew Day <matthew@day-construction.com> Sent: Monday, February 17, 2020 6:52 AM To: Jeff Alger; Stacy A. Woods Subject: 3924 Utah Extension Good morning - This email serves to formally request an extension for the project at 3924 Utah Ave N. The reasons for the extension are: -Greater than expected time off around holidays -Potential buyer created delays in completing selections, and subsequently created scheduling delays as timeline for selections was unknown and critical path work tasks couldn't be scheduled, putting the project at the back of the line for several vendors. -Added roof replacement to project -Unexpectedly long lead times on several products (tile, siding special order, cabinets) We request an extension to March 20 for work that is not weather dependent, and an extension until May 15 for weather dependent items including exterior paint, driveway replacement, and landscape plantings. Thanks in advance for your consideration, Matthew Day I Day Construction Office: 651-565-7877 1 Cell: 612-802-4907 www.Day-Construction.com I I Mot 8__)A1 EDA IN & FOR CITY OF NEW HOPE REMODELING CONTRACT WITH DAY CONSTRUCTION, LLC FOR THE REHABILITATION OF 3924 UTAH AVENUE NORTH For valuable consideration as set forth below, this contract dated the _? to :day of ,Qm. ("Contract") is made and signed by the Economic Development Authority in and for th City of New Hope ("EDA") and Day Construction, LLC ("Contractor"). Contractor is licensed as a general contractor by the State of Minnesota, License No. BC641777. I. CONTRACT DOCUMENTS Contractor hereby promises and agrees to perform and comply with all the provisions of this Contract and specifications, all of which are incorporated hereby by this reference. This Contract shall compromise the total agreement of the parties hereto. No oral order, objection or claim by any party to the other shall affect or modify any of the terms or obligations contained in this Contract. 2. THE WORK A. The work to be performed by Contractor under this Contract is defined in Scope of Work and Proposal for the rehabilitation of 3924 Utah Avenue North, New Hope which is legally described as "Lot 23, Block 6, Hopewood Hills, Hennepin County, Minnesota" ("Property"). The "Work" is comprised of the completed construction required by the construction documents and includes all labor necessary to produce such construction, and all materials and equipment incorporated or to be incorporated in the construction or expended during the course of construction. Contractor has agreed by the terms of this Contract to perform labor and material in renovation, repairs and/or improvement of the single-family residential dwelling located upon the Property in accordance with the Scope of Work and Proposal ("Contract Documents") attached hereto as Exhibit A. Any modifications to the Work defined in Exhibit A will be made in writing. B. All materials, labor, efforts, equipment, supplies and appurtenances specified in the Contract Documents or reasonably required for the Work shall be furnished by Contractor. All labor and materials when completed are to conform to the Contract Documents. Any and all changes in the Contract Documents shall be agreed to by the parties, in writing, specifying the nature of the change. The contract price shall be subject to upward or downward adjustment resulting from any such change. Contractor accepts the relationship of trust and confidence established between Contractor and EDA and warrants to and covenants with EDA to furnish: (i) its best skill and judgment to further FDA's interest; (ii) efficient business administration and superintendence; (iii) an adequate supply of workmen, equipment and materials; and (iv) to perform the improvements in the most expeditious and economical manner consistent with good construction. C. Contractor shall comply with all laws, ordinances, rules and regulations bearing on the Work. If Contractor performs any of the Work contrary to such laws, ordinances, rules and regulations, Contractor shall bear all costs arising therefrom. D. Contractor warrants to EDA that materials of good grade and quality fit for the purposes specified will be utilized in completing the Work. Contractor will also transfer to EDA any warranties upon materials and equipment used which are given by the manufacturer, as set forth in Section 7. These warranties shall be in addition to all warranties provided by law and not in limitation thereof. E. All improvements as constructed, and the Work upon completion, will comply fully with applicable building, fire and electrical codes, and all zoning, platting and subdivision laws, ordinances and regulations. 3. CONTRACT PRICE The EDA agrees to pay Contractor for completed work based upon the submitted bid prices and quantities as defined in Exhibit A. The total amount of this Contract shall not exceed 17� 3,671 ("Contract Price"). The Contract Price shall be paid in separate equal progress payments as follows: A. Down payment $23,671 B. Progress payment 1 (16.67% complete) $25,000 C. Progress payment 2 (33.33% complete) $25,000 D. Progress payment 3 (50% complete) $25,000 E. Progress payment 4 (66.67% complete) $25,000 F. Progress payment 5 (83.33% complete) $25,000 G. Final Instal nt 6 100°Ja com 1 to '� TOTAL $173,671 It shall be in the EDA's discretion to approve each progress/installment payment based upon progress of the Work. Progress payments for portions of the Work completed shall be made as set forth above and in the EDA's discretion. EDA may issue checks directly to suppliers and subcontractors for those portions of the Work being performed by suppliers and subcontractors. Each draw request shall update the sworn construction statement and lien waivers for labor and material previously furnished shall be provided. *Final Installment: Final completion following inspection subject to the terms below: Final Installment Payment. The balance of the Contract Price shall be due upon substantial completion of all Work. The final payment shall be made only after Contractor has delivered a sworn construction statement identifying all subcontractors and material suppliers who provided labor or material to the Work attesting that all of them have been paid in full, and accompanied by final lien waivers for each of them along with recordable satisfactions or releases of any liens of record. Prior to final payment of the Contract Price and upon substantial completion of the Work, Contractor and EDA, shall inspect the Work and its completion. If such inspection discloses minor incomplete or defective items of construction, Contractor and EDA shall list such items and Contractor shall deliver in writing its unconditional promise to complete said items, together with Contractor's estimated time for completion for each item (the "Punch List") in similar form to the document attached as Exhibit B. All work required to be completed and/or corrected as listed on the Punch List shall be completed within the specified period. 4. COMPLETION DATE Time is of the essence as respects performance of obligations under this Agreement. Contractor shall complete his performance under this Contract by the 19`h day of February, 2020 (hereinafter "Completion Date"). Contractor will be charged liquidated damages assessed in the amount of $100 per day for every calendar day that the Contract remains uncompleted beyond the 19t" day of February, 2020. 5. CHANGZ ORDERS — CONCEALED CONDITIONS ADDITIONAL. WORK A. In the event Contractor discovers during the course of performing the Work conditions or defects in the Property which require changes which potentially increase the Contract Price, Contractor shall promptly notify the EDA. The parties, without invalidating this Contract, agree that the Work may be modified within the general scope of the Contract consisting of additions, deletions or other revisions. Such change shall be authorized by written change order ("Change Order") and shall be executed under the applicable conditions of the Contract Documents. A copy of the approved form of the Change Order is attached hereto as Exhibit C and is by reference incorporated herein. The Contract Price and the Completion Date 2 may be adjusted only through the use of a Change Order. All Change Orders shall be signed by EDA and by Contractor. B. This Agreement is based solely on the observations Contractor was able to make with the structure in its current condition at the time this proposal was bid. If additional concealed conditions are discovered once the Work has commenced which were not visible at the time this proposal was bid, Contractor will suspend the Work and point out these unforeseen concealed conditions to EDA so that EDA and Contractor can execute a Change Order for any changes to the Work which are necessary. 6. INSURANCEIBOND Before beginning actual work under this Contract, Contractor shall submit to the EDA and obtain the EDA's approval of a certificate of insurance on Standard Form C.I.C.C.-701 or ACORD 25 forms, showing the following insurance coverage and listing the EDA and City of New Hope as loss payees under the policies: a. General Contractor Liability: $1,000,000.00 b. Automobile Liability for all Automobiles: $1,000,000.00 c. Workman's Compensation: Statutory Amounts This certificate must provide for the above coverages to be in effect from the date of the Contract until 30 days after the Completion Date and must provide the insurance coverage will not be canceled by the insurance company without 30 days written notice to the EDA of intent to cancel. The certificate must further provide that Contractor's insurance coverage is primary coverage notwithstanding any insurance coverage carried by the EDA that may apply to injury or damage relating to the maintenance or repair of the Property by either the City of New Hope, EDA or any employee, agent, independent contractor or any other person or entity retained by the EDA to perform the services described herein. 7. LAWS, REGULATIONS AND SAFETY Contractor shall give all notices and comply with all laws, ordinances, rules and regulations applicable to performance under this Contract. S. WARRANTY A. The Statutory Warranties applicable to "home improvement work" in Minnesota Statutes Chapter 327A are applicable to this Agreement. A copy of applicable provisions of Minn. Stat. Chapter 327A is attached as Exhibit D. B. Except as otherwise limited by the statutory warranties referenced in paragraph A above, Contractor's warranties applicable to this Agreement and the performance of the Work are limited by the following: 1. Contractor will provide a limited warranty on all Contractor and subcontractor supplied labor and materials used in this Work for a period of one (1) year following substantial completion of all the Work. 2. No warranty is provided by Contractor on any materials furnished by EDA for installation. No warranty is provided on any existing materials that are moved and/or reinstalled by Contractor within the dwelling (including any warranty that existing/used materials will not be damaged during the removal and reinstallation process) as part of the Work. 3. Contractor will transfer to Owner any warranties upon materials and equipment used in the Work which are given by the manufacturer. One (1) year after Substantial Completion of the project, EDA's sole remedy (for materials and labor) on all materials that are covered by the manufacturer's warranty is strictly with the manufacturer, not with Contractor. C. Contractor warrants that provided all payments as required by this Agreement are received, Contractor shall cause all labor, material, machinery, fixtures or tools furnished in connection with the Work to be paid in full and shall provide lien waivers for all labor and material. 9. INDEMNIFICATION Contractor agrees to indemnify, defend and hold the EDA harmless from any damages, including costs and attorney's fees, from any claims, demands, actions or causes of action arising out of any act or omission on the part of Contractor or its agents, servants or employees in the performance of or with relation to any of the work or services performed or furnished by Contractor under this Contract. 10. ASSIGNMENT Contractor shall not assign or transfer, whether by an assignment or notation or otherwise, any of its rights, duties, benefits, obligations, liabilities or responsibilities without prior written consent of the EDA. 11. NOTICE The address and telephone number of Contractor for purposes of giving notices and any other purpose under this Contract shall be Matthew Day, Day Construction, LLC at 8716 301 Avenue North, New Hope, MN 55427. The address of the EDA for purposes of giving notices and any other purpose under this Contract shall be 4401 Xylon Avenue North, New Hope, MN 55428. The contact person for this Contract is Jeff Sargent, EDA of New Hope Director of Community Development at (763) 531-5119. 12. PERMITS EDA agrees that all City of New Hope construction permits and related fees shall be waived for Contractor's Work at this Property. This does not include any surcharge imposed by the State of Minnesota which will not be waived. 13. MECHANIC'S LIEN NOTICE See attached Exhibit E. SIGNATURE AND NOTARY PAGE FOLLOWS 4 SIGNATURE AND NOTARY PAGE FOR REMODELING CONTRACT IN WITNESS WHEREOF, the parties to this Contract have hereunto set their hands and seals as of the day and year first above written. The Economic Development Authority in and for the City of New Hope By C Its Pre ' ent By� ` Its Executive Director STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) The foregoing was acknowledged before me this q-U day of August, 2019, by Kathi Hemken and Kirk McDonald, the President and Executive Director, respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota, on behalf of said entity. JESSICA J WEBER Notary Public State of Minnesota My Commission Expiree January 31, 2023 STATE OF MINNESOTA ) } ss. COUNTY OF HENNEPIN ) ""Xi_LAA(0jA NolarlllP lic CONTRACTOR Day Construction, LLC By Aldhief Manager The foregoing was acknowledged before me on this ZZ, day of August, 2019, by Matthew Day, the Chief Manager of Day Construction, LLC, a Minnesota limited liability company on behalf of the limited liability company. JESSICA J WEBER N i ' q Notary Public State of Minnesota My Commission Expires Notaryu lic I January 31.2023 5 EXHIBIT A Contract Documents The following are Contract Documents for the purpose of the Agreement to which this Exhibit A is attached: 1. Scope of Work. 2. Proposal dated July 5, 2019 3. Any supplemental Contract Documents, modifications executed by both parties after the date of this Agreement. 6 EXHIBIT B Punch List This Punch List is a record of all items of the Work described in the Agreement to which this Exhibit "B" is attached that Contractor must complete before the Work is considered complete. EDA and Contractor shall jointly conduct a project walk-through to observe all items that need further attention before the Work is considered finished. All parties understand that when EDA agrees that the Punch List details itemized below have been completed, the Work is entirely complete and any remaining payments under the Agreement shall be paid immediately to Contractor. Completed Punch List items submitted by: Day Construction, LLC All Punch List items are complete: I� Its: Date: , 20 Date: , 20 EDA's Initials: Contractor's Initials: 7 EXHIBIT C Change Order CHANGE ORDER NO. This Change Order is made this day of , 2019, by and between the Economic Development Authority in and for the City of New Hope ("EDA") and Day Construction, LLC, a Minnesota limited liability company ("Contractor"), to approve and carry out work that is substantially different than the original project scope set forth in that certain Agreement by and between EDA and Contractor dated , 2019 (the "Agreement"). EDA and Contractor understand that the requested changes, as specified below, may alter the project's schedule as set forth in the Agreement. It is also understood that any differences in estimated costs due to this Change Order will be accounted for as provided in the Agreement. Contractor will provide all labor and material for the following work: Total Labor and Materials: Does Change Affect Schedule: New Estimated Completion Date: Approved: Approved Yes Economic Development Authority in and for the City of New Hope Day Construction, LLC Its: W (Add/Deduct) EDA's Initials: / Contractor's Initials: N. EXHIBIT D STATUTORY WARRANTIES MINNESOTA STATUTE 327A 327A.01 DEFINITIONS. Subdivision 1.Scope. As used in sections 327A.01 to 327A.07, the terms in this section shall have the meanings assigned to them. Subd. 2.Building standards. "Building standards" means the materials and installation standards of the State Building Code, adopted by the commissioner of labor and industry pursuant to sections 326B.101 to 326B.194, in effect at the time of the construction or remodeling. Subd. 3.Dwelling. "Dwelling" means a new building, not previously occupied, constructed for the purpose of habitation; but does not include appurtenant recreational facilities, detached garages, driveways, walkways, patios, boundary walls, retaining walls not necessary for the structural stability of the dwelling, landscaping, fences, nonpermanent construction materials, off -site improvements, and all other similar items. Subd. 4.Initial vendee. "Initial vendee" means a person who first contracts to purchase a dwelling from a vendor for the purpose of habitation and not for resale in the ordinary course of trade. Subd. 5.Major construction defect. "Major construction defect" means actual damage to the load -bearing portion of the dwelling or the home improvement, including damage due to subsidence, expansion or lateral movement of the soil, which affects the load -bearing function and which vitally affects or is imminently likely to vitally affect use of the dwelling or the home improvement for residential purposes. "Major construction defect" does not include damage due to movement of the soil caused by flood, earthquake or other natural disaster. Subd. 6.Vendee. "Vendee" means any purchaser of a dwelling and includes the initial vendee and any subsequent purchasers. Subd. 7.Vendor. "Vendor" means any person, firm, or corporation that constructs dwellings, including the construction of dwellings on land owned by vendees. Vendor does not include a subcontractor or material supplier involved in the construction of a dwelling. Subd. 8.Warranty date. "Warranty date" means the date from and after which the statutory warranties provided in section 327A.02 shall be effective, and is the earliest of: (a) the date of the initial vendee's first occupancy of the dwelling; or (b) the date on which the initial vendee takes legal or equitable title in the dwelling. In the case of a home improvement, the warranty date is the date on which the home improvement work was completed. E Subd. 9.Home improvement. "Home improvement" means the repairing, remodeling, altering, converting or modernizing of, or adding to a residential building. For the purpose of this definition, residential building does not include appurtenant recreational facilities, detached garages, driveways, walkways, patios, boundary walls, retaining walls not necessary for the structural stability of the building, landscaping, fences, nonpermanent construction materials, off -site improvements, and all other similar items. Subd. IO.Home improvement contractor. "Home improvement contractor" means a person who is engaged in the business of home improvement either full time or part time, and who holds out to the public as having knowledge or skill peculiar to the business of home improvement. Subd. 11.Owner. "Owner" means any person who owns a residential building on which home improvement work is performed, and includes any subsequent owner of the residential building. Subd. 12.Inspection. "Inspection" means a visual or invasive examination of the alleged property damage. History: 1977 c 65 s 1;1981 c 119 s 1-5;1986 c 444; 2001 c 207 s 8,1Sp2003 c 8 art s 12; 2007 c 140art 4s 61; art 12s 12; arl 13s4;2010c 343s4.5 327A.02 STATUTORY WARRANTIES. Subdivision 1.Warranties by vendors. In every sale of a completed dwelling, and in every contract for the sale of a dwelling to be completed, the vendor shall warrant to the vendee that: (a) during the one-year period from and after the warranty date the dwelling shall be free from defects caused by faulty workmanship and defective materials due to noncompliance with building standards; (b) during the two-year period from and after the warranty date, the dwelling shall be free from defects caused by faulty installation of plumbing, electrical, heating, and cooling systems due to noncompliance with building standards; and (c) during the ten-year period from and after the warranty date, the dwelling shall be free from major construction defects due to noncompliance with building standards. Subd. 2.Warranties to survive passage of title. The statutory warranties provided in this section shall survive the passing of legal or equitable title in the dwelling to the vendee. Subd. 2a.Remedies unaffected by corporate dissolution. The statutory warranties provided in this section are not affected by the dissolution of a vendor or home improvement contractor that is a corporation or limited liability company. Subd. 3.Home improvement warranties. (a) In a sale or in a contract for the sale of home improvement work involving major structural changes or additions to a residential building, the home improvement contractor shall warrant to the owner that: 10 (1) during the one-year period from and after the warranty date the home improvement shall be free from defects caused by faulty workmanship and defective materials due to noncompliance with building standards; and (2) during the ten-year period from and after the warranty date the home improvement shall be free from major construction defects due to noncompliance with building standards. (b) In a sale or in a contract for the sale of home improvement work involving the installation of plumbing, electrical, heating or cooling systems, the home improvement contractor shall warrant to the owner that, during the two-year period from and after the warranty date, the home improvement shall be free from defects caused by the faulty installation of the system or systems due to noncompliance with building standards. (c) In a sale or in a contract for the sale of any home improvement work not covered by paragraph (a) or (b), the home improvement contractor shall warrant to the owner that, during the one-year period from and after the warranty date, the home improvement shall be free from defects caused by faulty workmanship or defective materials due to noncompliance with building standards. Subd. 4.Response from vendor or home improvement contractor to notice of claim; right to inspect. (a) The vendee or owner must allow an inspection for purposes of the preparation of an offer to repair the alleged loss or damage under subdivision 5. The inspection must be performed by the vendor or home improvement contractor within 30 days of the notification under section 327A.03, clause (a). Any damage to property caused as a result of an inspection must be promptly repaired by the inspecting party to restore the property to its preinspected condition. (b) The applicable statute of limitations and statute of repose for an action based on breach of a warranty imposed by this section, or any other action in contract, tort, or other law for any injury to real or personal property or bodily injury or wrongful death arising out of the alleged loss or damage, is tolled from the date the written notice provided by the vendee or owner is postmarked, or if not sent through the mail, received by the vendor or home improvement contractor until the latest of the following: (1) the date of completion of the home warranty dispute resolution process under section 327A.051; or (2) 180 days. (c) Upon completion of repairs as described in an offer to repair, the vendor must provide the vendee with a list of the repairs made and a notice that the vendee may have a right to pursue a warranty claim under this chapter. Provision of this statement is not an admission of liability. Compliance with this subdivision does not affect any rights of the vendee under this chapter. Subd. 5.Right to repair; agreement. (a) Within 15 days of completion of the inspection required by subdivision 4, the vendor or home improvement contractor must provide to the vendee or owner a written offer to repair. The offer to repair must include, at a minimum: (1) the scope of the proposed repair work; and (2) the proposed date on which the repair work would begin and the estimated date of completion. 11 (b) This subdivision does not prevent the vendee or owner from obtaining the information in paragraph (a) from another contractor or from negotiating with the vendor or home improvement contractor for a different scope of work. (c) If the parties agree to a scope of work, the vendor or home improvement contractor must perform the repair work in accordance with the offer to repair. If the parties do not agree to a scope of work, the vendee or owner must submit the matter to the homeowner warranty dispute resolution process under section 327A.051. (d) Upon completion of repairs described in an offer to repair, the vendor or home improvement contractor must provide the vendee or owner with a written notice that the scope of the work agreed upon has been completed. Subd. 6.Failure to perform inspection or repair. If the vendor or home improvement contractor fails to perform an inspection under subdivision 4 or fails to make an offer to repair or perform agreed upon repairs under subdivision 5, the vendee or owner may commence an action. Subd. 7.Processes required before commencement of action. Except as provided in subdivision 6, a cause of action for which the statute of limitations or statute of repose is tolled under subdivision 4, paragraph (b), must not be commenced in district court until the earlier of: (1) the completion of the home warranty dispute resolution process under section 327A.05 I.; or (2) 60 days after the written offer of repair is provided to the vendee or owner. History: 1977c65s2;1981 c119s6;2001 c207s9,10;2006c202s56;2010c343s6-9 327A.03 EXCLUSIONS. The liability of the vendor or the home improvement contractor under sections 327A.01 to 327A.07 is limited to the specific items set forth in sections 327A.01 to 327A.07 and does not extend to the following: (a) loss or damage not reported by the vendee or the owner to the vendor or the home improvement contractor in writing within six months after the vendee or the owner discovers or should have discovered the loss or damage; unless the vendee or owner establishes that the vendor or home improvement contractor had actual notice of the loss or damage; (b) loss or damage caused by defects in design, installation, or materials which the vendee or the owner supplied, installed, or directed to be installed; (c) secondary loss or damage such as personal injury or property damage; (d) loss or damage from normal wear and tear; (e) loss or damage from normal shrinkage caused by drying of the dwelling or the home improvement within tolerances of building standards; (f) loss or damage from dampness and condensation due to insufficient ventilation after occupancy; (g) loss or damage from negligence, improper maintenance or alteration of the dwelling or the home improvement by parties other than the vendor or the home improvement contractor; (h) loss or damage from changes in grading of the ground around the dwelling or the home improvement by parties other than the vendor or the home improvement contractor; 12 (i) landscaping or insect loss or damage; 0) loss or damage from failure to maintain the dwelling or the home improvement in good repair; (k) loss or damage which the vendee or the owner, whenever feasible, has not taken timely action to minimize; (1) loss or damage which occurs after the dwelling or the home improvement is no longer used primarily as a residence; (m) accidental loss or damage usually described as acts of God, including, but not limited to: fire, explosion, smoke, water escape, windstorm, hail or lightning, falling trees, aircraft and vehicles, flood, and earthquake, except when the loss or damage is caused by failure to comply with building standards; (n) loss or damage from soil movement which is compensated by legislation or covered by insurance; (o) loss or damage due to soil conditions where construction is done upon lands owned by the vendee or the owner and obtained by the vendee or owner from a source independent of the vendor or the home improvement contractor; (p) in the case of home improvement work, loss or damage due to defects in the existing structure and systems not caused by the home improvement. History: 1977 c_¢5 s 3;1981 c 119 s 7;1986 c 444; 2010 c 343 s 10 327A.04 WAIVER AND MODIFICATION LIMITED. Subdivision 1.Waiver. Except as provided in subdivisions 2 and 3, the provisions of sections 327A.01 to 327A.08 cannot be waived or modified by contract or otherwise. Any agreement which purports to waive or modify the provisions of sections 327A.01 to 327A.08, except as provided in subdivisions 2 and 3 of this section, shall be void. Subd. 2 . Mo dification. At any time after a contract for the sale of a dwelling is entered into by and between a vendor and a vendee or a contract for home improvement work is entered into by and between a home improvement contractor and an owner, any of the warranties provided for in section 327A.02 may be excluded or modified only by a written instrument, printed in boldface type of a minimum size of ten points, which is signed by the vendee or the owner and which sets forth in detail the warranty involved, the consent of the vendee or the owner, and the terms of the new agreement contained in the writing. No exclusion or modification shall be effective unless the vendor or the home improvement contractor provides substitute express warranties offering substantially the same protections to the vendee or the owner as the statutory warranties set forth in section 327A.02. Any modification or exclusion agreed to by vendee and vendor or the owner and home improvement contractor pursuant to this subdivision shall not require the approval of the commissioner of labor and industry pursuant to section 327A.07. Subd. 3.Exception. If a major construction defect is discovered prior to the sale of a dwelling, the warranty set forth in section 327A.02. subdivision 1, clause (c) may be waived for the defect identified in the waiver instrument, after full oral disclosure of the specific defect, by an instrument 13 which sets forth in detail: the specific defect; the difference between the value of the dwelling without the defect and the value of the dwelling with the defect, as determined and attested to by an independent appraiser, contractor, insurance adjuster, engineer or any other similarly knowledgeable person selected by the vendee; the price reduction; the date the construction was completed; the legal description of the dwelling; the consent of the vendee to the waiver; and the signatures of the vendee, the vendor, and two witnesses. A single waiver agreed to pursuant to this subdivision may not apply to more than one major construction defect in a dwelling. The waiver shall not be effective unless recorded with the county recorder or registrar of titles who shall file the waiver for record. History: 1977 c 65 s 4;1981 c 119 s 8; 2005 c o s 61; 2008 c 337 s 59; 2009 c 91 s l 327A.05 REMEDIES.L Subdivision 1.New home warranties. Upon breach of any warranty imposed by section 327A.02, subdivision 1, the vendee shall have a cause of action against the vendor for damages arising out of the breach, or for specific performance. Damages shall be limited to: (a) the amount necessary to remedy the defect or breach; or (b) the difference between the value of the dwelling without the defect and the value of the dwelling with the defect. Subd. 2.Home improvement warranty. Upon breach of any warranty imposed by section 327A.02, subdivision 3, the owner shall have a cause of action against the home improvement contractor for damages arising out of the breach, or for specific performance. Damages shall be limited to the amount necessary to remedy the defect or breach. History: 1977c65s5;1981 c119s9 327A.051 HOME WARRANTY DISPUTE RESOLUTION. Subdivision 1.Panel of neutrals. (a) The commissioner of labor and industry shall maintain a list of persons who consent to serve as qualified neutrals for purposes of this section. The commissioner shall establish application requirements and qualifications for qualified neutrals, taking into consideration the education, experience, and training of the applicant, potential conflicts of interest, and that the purpose of the process is to assist parties in determining an agreeable scope of repair or other resolution of their dispute. (b) As a condition of being included on the panel of neutrals identified in this section, the commissioner of labor and industry may charge each qualified neutral a fee of $200 per year for the administration of the home warranty dispute resolution process. Subd. 2.Dispute resolution process. (a) The home warranty dispute resolution process required by this section is commenced by written application to the commissioner. A request must include the complete current address and full name of the contact person for each participating party. 14 (b) Within ten days of receiving a written request, the commissioner shall provide each party with a written list of three qualified neutrals randomly selected from the panel of neutrals established under subdivision 1. The commissioner shall also provide complete contact information for each qualified neutral. (c) Within five business days after receipt of the list from the commissioner, the parties shall mutually select one of the three qualified neutrals identified by the commissioner to serve as the qualified neutral for their dispute. If the parties cannot mutually agree on a neutral, the vendor or home improvement contractor shall strike one of the neutrals from the list, the vendee or owner shall subsequently strike one of the remaining neutrals from the list, and the remaining neutral shall serve as the qualified neutral for the dispute resolution process. The parties shall notify the selected qualified neutral and the commissioner of the selection. Subd. 3.Neutral evaluation; fee. (a) The qualified neutral selected by the parties shall convene, and each party shall attend, an in -person conference of the parties. The qualified neutral shall select the date for the conference after consulting the parties. The conference must occur no later than 30 days after the neutral's selection, except by mutual agreement of the parties. In addition, the neutral shall collect from each party an administrative fee of $25 and shall submit those fees to the commissioner no later than ten days after the completion of the conference. (b) At least seven days before the conference, each party must provide the qualified neutral and the other party with all information and documentation necessary to understanding the dispute, or the alleged loss or damages. (c) After reviewing the information and documentation provided by the parties and after consulting with the parties at the conference, the neutral shall issue to the parties a nonbinding, written determination, which must include, to the extent possible, findings and recommendations on the scope and amount of repairs necessary, if any. The qualified neutral shall mail the determination to each party within ten days after the conference. (d) The parties shall share the expense of the qualified neutral's billed time equally, unless otherwise agreed. The neutral's billed time for evaluation of documents, meeting with the parties, and issuing a written determination must not exceed six hours, unless agreed to in writing by both parties. The neutral must identify the neutral's hourly rate to the parties. Subd. 4.Alternative process. If both parties agree, the parties may designate an alternative dispute resolution process in lieu of participating in the home warranty dispute resolution process established by this section. If the parties agree to an alternative dispute resolution process, they shall provide written notice of the agreement and a description of the selected process to the commissioner as soon as practicable, but no later than the date the parties are required to select a neutral under subdivision 2. Subd. 5.Effect on future proceedings. (a) The written determination issued by the qualified neutral and all communications relating to the home warranty dispute resolution process, except those between any party and the commissioner, are deemed confidential settlement communications pursuant to Rule 408 of the Minnesota Rules of Evidence. (b) No party may use the written offer of repair provided by a vendor or home improvement contractor, a counteroffer to repair, or a written determination issued by the 1s qualified neutral as evidence of liability in subsequent litigation between the parties. The qualified neutral may not be called to testify regarding the dispute resolution proceedings. (c) Any amount paid by a party for the services of a qualified neutral under this section is deemed a taxable cost of the prevailing party in a subsequent litigation involving the same subject matter. Subd. 6.Noncompliance with timelines; effect. Failure to strictly comply with the timelines in this section shall not be grounds for dismissal of any claim brought under section 327A.05, provided that the parties establish good faith effort in complying with this section. History: 2010 c 343 s 11 327A.06 OTHER WARRANTIES. The warranties provided for in section 327A.02 shall be in addition to all other warranties imposed by law or agreement. The remedies provided in section 327A.05 shall not be construed as limiting the remedies in any action not predicated upon breach of the statutory warranties imposed by section 327A.02. History: 1977c65s6:2009c91 s2 327A.07 VARIATIONS. The commissioner of labor and industry may approve pursuant to sections 14.05 to 14.28, variations from the provisions of sections 327A.02 and 327A.03 if the warranty program of the vendor or the home improvement contractor requesting the variation offers at least substantially the same protections to the vendee or owner as provided by the warranties set forth in section 327A.02. History: 1977 c 65 s 7;1981 c 119 s 10;1982 c 424 s 130;1995 c 233 ai•12 s 56. 2008 c 337 s 60; 2009 c 91 s 3 327A.08 LIMITATIONS. Notwithstanding any other provision of sections 327A.01 to 327A.08: (a) the terms of the home improvement warranties required by sections 327A.01 to 327A.08 commence upon completion of the home improvement and the term shall not be required to be renewed or extended if the home improvement contractor performs additional improvements required by warranty; (b) the home improvement warranties required by sections 327A.01 to 327A.08 shall not include products or materials installed that are already covered by implied or written warranty; and (c) the warranties required by sections 327A.01 to 327A.08 must be set forth as written warranty instruments and must be included as part of the construction contract. The warranties and the exclusions under section 327A.03, the right to inspect and offer to repair under section 327A.02, subdivisions 4 and 5, and the home warranty dispute resolution process under section 327A.051 must be conveyed in writing to the owner. Failure to comply with this paragraph is a violation of section 326B.84. 16 (d) If the warranties required by sections 327A.01 to 327A.08 are not provided to the owner in writing as required by paragraph (c), they are implied statutory warranties that have the same effect as if the vendor or home improvement contractor had complied with paragraph (c). (e) The owner's right under this section to receive the written warranty required under this section may not be waived or modified by contract or otherwise. Any agreement that purports to waive or modify the right to the written warranty required under this section is void. (f) This section does not limit the ability of the vendor or home improvement contractor and the owner to enter into the agreements permitted under section 327A.04, subdivisions 2 and 3. History: 1981 c 119s 11;1997c Tarr 1 s 126;2009c 91 s 4;2010 c343 s 12 17 EXHIBIT E Mechanic's Liens Pursuant to Agreement between Contractor and EDA, Contractor will be providing labor and material in improvement of the Property. Contractor will contract with subcontractors and materialmen for the furnishing of labor, skill and materials in the construction of this home. Accordingly, EDA is entitled under Minnesota law to the following Notice: (a) ANY PERSON OR COMPANY SUPPLYING LABOR OR MATERIALS FOR THIS IMPROVEMENT TO YOUR PROPERTY MAY FILE A LIEN AGAINST YOUR PROPERTY IF THAT PERSON OR COMPANY IS NOT PAID FOR THE CONTRIBUTIONS. (b) UNDER MINNESOTA LAW, YOU HAVE THE RIGHT TO PAY PERSONS WHO SUPPLIED LABOR OR MATERIALS FOR THIS IMPROVEMENT DIRECTLY AND DEDUCT THIS AMOUNT FROM OUR CONTRACT PRICE, OR WITHHOLD THE AMOUNTS DUE THEM FROM US UNTIL 120 DAYS AFTER COMPLETION OF THE IMPROVEMENT UNLESS WE GIVE YOU A LIEN WAIVER SIGNED BY PERSONS WHO SUPPLIED ANY LABOR AND MATERIAL FOR THE IMPROVEMENT AND WHO GAVE YOU TIMELY NOTICE. 18 Request for Action August 12, 2019 Agenda Section EDA Approved by: Kirk McDonald, City Manager Item Number Originating Department: Community Development 5 By: Jeff Alger, Community Development Specialist; Jeff Sargent, Director of Community Development Agenda Title Resolution approving awarding the contract for rehabilitation work in association with the EDA owned property located at 3924 Utah Avenue North (improvement project no. 1020) Requested Action Staff requests that the Economic Development Authority approve a resolution awarding the rehabilitation contract for the remodel and rehabilitation of 3924 Utah Avenue North to Day Construction in the amount of $173,671. This includes the base bid of $158,794 and alternate #1 at a cost of $14,877. Policy/Past Practice The Economic Development Authority reviews proposals for the redevelopment of EDA-owned scattered site properties prior to executing a contract with the preferred buyer/builder. Background In December of 2018, the Economic Development Authority (EDA) purchased the vacant and distressed property located at 3924 Utah Avenue North for $190,100 as part of the city's scattered site housing program. The intent of the purchase was to rehabilitate the home for resale and maximize the value of the finished product. The house is in disrepair and substantial exterior and interior work is needed in order to make it habitable and desirable. Since 2014, the EDA has acquired 15 single-family homes and one vacant lot. Of the 15 single-family homes, 13 have been demolished (four lot splits), one has be rehabilitated, and staff is proposing that the home at 3924 Utah Avenue North be rehabilitated. Staff remains committed to identifying scattered site housing opportunities for demolition; however, these properties have become more difficult to acquire for a variety of reasons. The primary barrier is lack of inventory, as the EDA has purchased many of the worst single-family nuisance properties available in the city. Secondly, the acquisition price for distressed properties has increased steadily over the past five years, as property values have risen citywide. These market forces have led staff to pursue opportunities within the rehabilitation market, including 3924 Utah Avenue North. Staff believes the EDA has an opportunity to make a substantial impact with its neighborhood revitalization efforts relating to rehabilitation. The most recent rehabilitation project completed by the EDA was at 3984 Zealand Avenue North, which is located in the same neighborhood as the subject property. The EDA purchased the home for $165,000, completed a broad scope of work that improved nearly every aspect of the home, and sold the home for $295,000. All costs associated with the improvements were covered with proceeds from the sale of the property. When the purchase of 3924 Utah Avenue North for $190,100 was approved at the December 10, 2018, EDA meeting, it was noted that the larger scope of work and possible recommendation of alternates would likely increase the budget to a point where proceeds from the sale would not cover all costs. The possibility of an open house or multiple open houses was also discussed as the project could serve as a "demonstration project" for the neighborhood. I: \ RFA \ COMM DE V \ 2019 \ EDA \ Scattered Site Housing \ Q - 3924 Utah Ave N Rehab Contract 08-12-19.docx Request for Action, Page 2 After the property was acquired, community development staff developed a scope of work that included a "base" level of work to be completed in order to make the home habitable and desirable. Staff worked with the builder that completed the rehabilitation project at 3984 Zealand Avenue North and the building official to develop and refine the scope of work. The complete scope of work is attached and involves improving nearly every aspect of the house (interior and exterior). Major exterior improvements include a new driveway, garage door, siding, windows, doors, and landscaping. Major interior improvements include removing the partition walls that separate the kitchen from the dining room and a complete kitchen renovation with quartz countertops, new cabinets, appliances, hardwood flooring (kitchen and dining room), light fixtures, and a five- foot island with overhang seating. The new appliances were retained from the property the EDA acquired at 5212 Pennsylvania Avenue North and will be utilized as part of the rehabilitation at 3924 Utah Avenue North. The previous owner installed them in an effort to better market the property before the city purchased the home. The main level and upper level bathrooms would be completely renovated and the hardwood floors in the living room would be refinished. Second floor bedrooms would receive new carpeting and light fixtures. All rooms would receive new doors, outlets, appliances, and painted/repaired walls and ceilings. Drain tile would be installed in the basement and half of it would be finished. The house has 1,598 square feet of finished space above ground, and finishing half of the basement would result in 300 square feet of finished space below ground. Two alternates were also denoted: 1. Remodel northeast second -floor bedroom to create a master -suite. This would convert the northeast bedroom into a bathroom and walk-in closet. 2. Install cultured stone accent wall to front of home in area where vertical board and batten siding is located. A Request for Proposals (RFP) outlining the scope of work and alternates was sent to five contractors on June 14, 2019. The contractors were asked to provide a cost for the base improvements and individual costs for each alternate. Staff received one quote for the project, from Day Construction, the New Hope -based builder that completed the rehabilitation project at 3984 Zealand Avenue North. Other contractors stated that they were too busy to bid on the project at this time. The bid from Day Construction is as follows: Base bid $158,794 Alternate #1 $14,877 Alternate #2 $7,128 According to Day Construction, a contingency of $3,200 has been built into the bid to cover items such as unforeseen mechanical (plumbing, electrical, heating) changes within the original scope of work, variances in trade partner and supplier pricing, and minor changes that typically occur during construction. Staff is recommending that the EDA approve the base bid and alternate #1 as part of the project. Staff believes creating a master -suite with a bathroom and walk-in closet will significantly improve the marketability and overall value of the property. The city was able to sell the property at 3984 Zealand Avenue North without a realtor, saving thousands of dollars in realtor fees. These savings were reinvested into the home in the form of a new roof. Staff would like to attempt to sell the home at 3924 Utah Avenue North without a realtor in order to reduce costs and limit potential losses for the EDA. Request for Action, Page 3 Return on Investment As previously stated, it is not anticipated that revenue from the sale of the property would cover all costs. A "best case scenario" involving a sales price of $365,000, no realtor fees, and no unexpected costs beyond what is included within the contingency (total expenses of $377,080) would result in a loss of approximately $12,080. A "worst case scenario" involving a sales price of $330,000, $12,000 in realtor fees, and $5,000 in unexpected costs (total expenses of $394,080) would result in a loss of approximately $64,080. If the housing market where to change significantly, that would also affect the sales price of the house. The proposed improvements would result in an increase in the taxable property value for the subject property. If the property were to be valued at $330,000 in 2020, it is estimated that taxes allocated and payable to the city in 2021 would represent an increase of $929.71, or 76.33%, as compared to those that were payable in 2019. Estimated Market Value 2018, Payable 2019 Projected Market Value 2020, Payable 2021 1 $202,000 $330,000 Taxable Market Value 2018, Payable 2019 Projected Taxable Value 2020, Payable 2021 $182,940 $322,460 Taxes Payable 2018, Pa able 2019 Projected Taxes Payable 2020, Payable 2021 $3,267.52 1 $5,674.32 Taxes Allocated to City 2018, Payable 2019 Taxes Allocated to City 2020, Pa able 2021 $1,218.07 $2,147.78 The following table demonstrates the tax benefit associated with the increase taxable property value over the course of 30 years: Additional Taxes Collected By City Year # of Years $929.71 2021 1 $1,859.42 2022 2 $2,789.13 2023 3 $3,718.84 2024 4 $4,648.55 2025 5 $9,297.10 2030 10 $13,945.65 2035 15 $18,594.20 2040 20 $23,242.75 2045 25 $27,891.30 2050 30 Utilizing the "best case scenario," the increase in property taxes allocated to the city would cover the shortfall associated with the project after 13 years. Under the "worst case scenario," the increase in property taxes allocated to the city would not cover the shortfall for 69 years, unless other substantial improvements were made to the property. It should be noted that demolition and rebuild projects often involve a much larger loss margin as compared to a rehabilitation project. The primary focus of the scattered site program is to target Request for Action, Page 4 distressed single-family properties throughout the city, with the goal of improving residential neighborhoods. It is understood that potential losses are incurred on each project, as the cost to acquire the distressed properties and redevelop or rehabilitate often exceeds the value of the new vacant lot or rehabilitated home. Staff is working with AEM on a template that can be used for future scattered site housing projects to calculate the Internal Rate of Return for potential projects. It will be discussed at the August 19, 2019, work session meeting when the Community Development Department provides an annual update to the City Council. Funding Funding for this project would come from the EDA budget. Any loss incurred on this project would diminish the EDA fund balance. Recommendation Staff recommends approval of a resolution awarding the rehabilitation contract for the remodel and rehabilitation of 3924 Utah Avenue North to Day Construction in the amount of $173,671. This includes the base bid of $158,794 and alternate #1 at a cost of $14,877. The assistant city attorney has indicated that the City Council may award a contract to a single bidder if the contract amount is less than $175,000 and the contractor is capable of doing the work. The City Council has the option of awarding the bid to the lowest responsible bidder, Day Construction, or directing staff to request bids again with the goal of receiving additional bids. Attachments • Resolution with RFP and proposal • Budget & Return on Investment (2 scenarios) CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 19- 04 RESOLUTION APPROVING AWARDING THE CONTRACT FOR REHABILITATION WORK IN ASSOCIATION WITH THE EDA OWNED PROPERTY LOCATED AT 3924 UTAH AVENUE NORTH (IMPROVEMENT PROJECT NO. 1020) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope ("EDA") as follows: WHEREAS, the Economic Development Authority in and for the City of New Hope ("EDA") purchased the single family home located at 3924 Utah Avenue North, New Hope, MN, P.I.D. 18-118-21-41-0077, and legally described as Lot 23, Block 6, Hopewood Hills, Hennepin County, Minnesota (the "Property") on December 21, 2019 for $190,100; WHEREAS, the exterior and interior of the house located at the Property requires rehabilitation to bring the house into compliance with the City Building Code, achieve suitable living conditions and create a marketable home for re -sale as a part of the City's scattered site housing program; WHEREAS, the EDA solicited rehabilitation quotes pursuant to a Request for Proposal with Guidelines outlining the Scope of Work of rehabilitation work that is needed ("Work"); WHEREAS, Day Construction, LLC submitted a proposal that meets the Scope of Work and is the low bid for the Work with a base bid of $158,794 and bid for Alternate #1 of $14,877 for a total bid of $173,671; WHEREAS, the Proposal is attached hereto with the Request for Proposal as Exhibit A ("Proposal"); WHEREAS, it is in the best interests of the EDA to enter into a contract with Day Construction, LLC for the purpose of performing the Work including Alternate 1 but not Alternate 2; WHEREAS, the EDA is requested to approve the selection of Day Construction, LLC as the duly qualified contractor to perform the Work and approval of the Proposal; and WHEREAS, City staff, EDA and City Attorney have reviewed the Proposal and are agreeable with the terms, believing them to be in the best interest of the EDA that Day Construction, LLC be selected to perform the Work. NOW, THEREFORE, BE IT RESOLVED, by the Economic Development Authority in and for the City of New Hope as follows: Exhibit A Proposal See attached Request for Proposal with Proposal. P:\Attomey\SAS\l Client Files\2 City of New Hope\99-11432 3924 Utah Ave N\Resolution approving award to rehabilitation contractor.docx Exhibit A The City of New Hope Economic Development Authority (EDA) is requesting proposals from builders to renovate and remodel the single-family home located at 3924 Utah Avenue North. The home was purchased as part of the city's scattered site housing program, which focuses on the removal or rehabilitation of dis- tressed properties. The home, which is currently vacant, will be completely rehabilitated and sold upon com- pletion. Enclosed, please find the Proposal Form and Guidelines for submitting a proposal. To receive consideration, proposals must be submitted on a completed Proposal Form and the required attachments and additional information must be included. Incomplete proposals will not be considered. Proposals are due on Friday, July 5, 2019, at noon. If you would like to setup a time to walk-through the house or have questions about the RFP process or the enclosed Guidelines, please contact Jeff Alger in the Community Development Department at the city of New Hope, 763-531-5119 or jalger@newhopemn.gov. Thank you for your interest! Regards, Jeff Alger Community Development Specialist General Notes: 1. Only complete proposals will be considered. The city retains absolute discretion in deciding whether to accept any particular proposal. 2. Proposals must be submitted by state -licensed builders. 3. Following proposal approval by the City Council, the selected builder will be asked to enter into a remodeling contract, which limits the number of payments or draws that can be requested by the contrac- tor. With each invoice, the contractor must submit lien waivers that cover all itemized components of the invoice. If subcontractors are being paid, lien waivers will be required for each subcontractor. Following project completion the contractor must submit a sworn construction statement. 4. Upon execution of the remodeling contract, all interior and exterior work must be completed and permits must be closed within six (6) months. Scope of Work Exterior • Remove existing bituminous driveway and replace with new bituminous pavement. Retain existing con- crete garage apron. • Fill holes in with concrete for both damaged block sections on both sides of overhead garage door. • Remove all siding from home, and replace with new vinyl siding, color by owner. Remove address numbers and install new address numbers. Style and color by owner. ■ Remove all existing gutters and downspouts from home. Replace with new seamless gutters. Color by owner. New downspouts to match new gutters. Install 5' kick -outs to all new downspouts. Include new gutters and downspouts on garage. Install new roof edge to entire home and garage. Color by owner. ■ Install new aluminum soffit and fascia to entire home and garage as part of the siding project. Color by owner. • Remove all existing windows from home, including frames. Replace with new, mid -grade, Energy Star qualified white vinyl windows with nail fins. The windows in the front of the home should include decora- tive colonial style grids. Meet egress requirements when necessary. • Remove existing overhead garage door and replace with new insulated door. Color by owner. Retain exist- ing opener. Wrap door frame with aluminum coil stock. Color by owner. New overhead door shall have windows with grids in the top panel. Remove front door and replace with similar style new door with double sidelites. • Remove and replace walk door from rear of garage to back yard. New door should be a six -panel insulated door. ■ Remove and replace the rear door to the home that exits to the back yard. This door should be insulated with, 3/a glass, with grids. = Provide and install matching lock sets that are keyed alike for all exterior doors (3). • Remove all existing orange colored landscaping rock from perimeter of entire home and garage. Re -grade around entire home and garage to provide positive drainage. Install plastic edging to separate the lawn from areas where rock was removed. Replace orange rock with new clean landscaping rock, color by own- er. Install new heavy-duty plastic sheeting between ground and new rocks. • Remove patio pavers from rear of home. • Remove gas grill from back of home and ensure that the gas connection is terminated properly. Remove and dispose of garden shed in backyard. • Remove miscellaneous refuse, debris, brush and yard waste that is located throughout the entire lot, includ- ing the area behind the garden shed. • Install sod and/or grass seed in disturbed or dirt areas. • Remove all exterior lights (4) from home and replace with new lights. Style and color by owner. Provide fixture allowance with bid. General Interior (apply these specs to entire home): • Remove all wallpaper from entire home. • Fix and repair all sheetrock defects. • Remove all trim from home, casing, baseboard, etc. Replace with new pre -finished white poplar trim. Co- lonial detail for new baseboard and casing. l Scope of Work General Interior (apply these specs to entire home): • Remove all interior doors, and replace with new white, pre -finished, hollow -core, three -panel doors. Color to match casing. Provide new handle sets. Locking handles for bathrooms and bedrooms. Color by owner. • All walls should be finished to a flat finish and painted the same color with eggshell interior paint. Color by owner. • Remove all existing ceiling texture from entire home. All ceilings should be textured with new medium knock -down finish and painted with white ceiling paint. • Remove all outlets, switches, and cover plates from home and replace with new white, outlets, switches and cover plates. Install GFCI outlets to meet code. • Hardwire entire home to be compliant with current code for smoke and CO2 detectors. • Remove all existing HVAC grills for supply and return ducts. Replace with new white grill covers. Kitchen, Dining, Back Door Hall, and Front Entry: • Remove all existing kitchen cabinets, countertops, soffit, sink, and appliances, dispose of appliances. ■ Remove existing door from garage to house and replace with white, insulated, six -panel, 20-minute fire - rated door. Install new, mid -grade, pre -finished white kitchen cabinets with quartz counters. New layout should in- clude a 5' island with overhang seating. Install and move utilities as necessary (countertop color by own- er). Retain current general layout of kitchen. However, the new kitchen should have a full height pantry cabinet in place of the current oven, and the drop in range should be replaced with a freestanding gas range/oven combo. The new kitchen appliances have already been purchased for this home and are stored in the garage. Please ask city staff for dimensions. New kitchen cabinets should include crown molding. Install new stainless steel, under mount double basin sink and faucet with sprayer. • Remove existing light fixture over kitchen sink and replace with new hanging pendant, provide fixture al- lowance. Color by owner. ■ Remove and abandon existing fluorescent fixture in middle of kitchen. • Install six (6) new can lights in kitchen, evenly spaced. These lights should cover the hallway area towards the back door. • Remove existing hanging light in kitchen. Replace with hanging pendant over new kitchen island. • Completely remove the partition walls that separate the kitchen from the dining room. Transfer loads in this area as necessary with new beams. Re -arrange mechanical work as necessary, electrical, and HVAC. This will include removal of the second hall closet in this vicinity. ■ Remove existing flooring from kitchen and dining rooms. Install oak hardwood to match existing flooring in living room. Stain and finish all wood flooring, new and old to match (color by owner). Run new wood flooring in kitchen and dining in same direction as wood floor in living room. The new wood flooring will run through the front entryway. ■ Remove and replace dining room light fixture, new fixture will be chandelier style, provide fixture allow- ance. • Remove existing light fixture at front entry. Replace with new 3-bulb surface mounted fixture. Color by owner, provide allowance. • Remove existing doorbell button and chime, replace with new. • Remove existing light fixture near back door. Replace with new 3-bulb surface mounted fixture. Color by owner, provide allowance. Scope of Work Main Floor Living Room: Re -finish existing hardwood floors to match kitchen and dining. • Install six new can lights evenly spaced in room. • Remove pocket door from living room to kitchen. Abandon this door and finish opening with white jambs and casing to match other trim. Stairs: • Remove existing metal handrail and replace with wooden rail, top and bottom of stairs. • Install carpet over stairs, to match bedrooms, color by owner. ■ Secure existing treads and risers. Main -floor Bath: Gut entire existing bathroom. ■ Remove tile wainscoting, replace with sheetrock. Install new ceramic tile flooring, color by owner • Install new vanity cabinet and sink, to replace existing wall mounted sink. New vanity top should be cul- tured marble with built-in sink. • Provide and install new faucet. Provide and install new toilet with elongated bowl. • Install new can light fixture. • Abandon laundry chute. • Install new decorative mirror with wood frame. Second -floor Bath: ■ Gut entire bathroom. • Remove existing toilet. Replace with new white toilet with elongated bowl. • Remove existing vanity and counter top. Replace with new, white vanity cabinet to match kitchen cabinets and pre -formed cultured top with built-in sink. Install new faucet. ■ Remove existing tile wainscoting and replace with sheetrock. • Remove existing tile flooring. ■ Install new tile flooring (color by owner). Install new fan/light combo in main area of bathroom, vent to outside. • Remove and replace existing can light. ■ Install new decorative mirror with wood frame. Second -floor Bedrooms, Including Master: (4 total) • Install new carpet and pad in all rooms. Color by owner ($20/yard allowance). • Remove existing light fixtures. Install new surface mounted light fixtures in center of each room, provide fixture allowance. • Remove existing closet shelving and replace with new wire shelving and rod. 0� Scope of Work Basement Living Room: • Remove and replace bottom stair tread. • Remove all sheetrock from stairwell and basement walls and ceiling. • Remove carpet from stairs. • Remove and replace all rotten wood from stair well framing. • Remove all paneling, insulation, and firing strips from basement walls. • Install four can lights evenly spaced in room. • Paint entirety of interior foundation walls white with moisture sealant paint before installing insulation and sheet rock. • Fir -out all exterior walls and insulate with rigid foam insulation. • Hang new sheet rock throughout entire room. Finish with flat walls and medium knock -down on the ceil- ing. Paint to match rest of house. • Install carpet to match second -floor bedrooms. ■ Install drain tile along all walls. Utility and Laundry Room: • Inspect and repair plumbing as necessary. • Have furnace inspected and cleaned. ■ Have water heater inspected and cleaned. • Remove all fluorescent light fixtures and replace with new similar fixtures. • Clean entire floor, and paint floor with garage floor paint. ■ Paint entirety of interior foundation walls white with moisture sealant paint. • Gut entire bathroom in this area. Close off plumbing as necessary to prepare for potential future bathroom. • Install drain tile along all walls except garage (north) wall. Garage: + Repair hole in foundation wall between garage and house. Pressure wash garage floor. Attic: • Blow in cellulose insulation to entire attic to meet current energy code. Build up attic access area to accom- modate the new insulation. Insulate attic access lid. • Install or extend existing vent chutes between every rafter to maintain attic ventilation and prevent insula- tion from contacting roof deck. Alternates 1. Remodel northeast second -floor bedroom to create a master -suite. This project would convert the NE bed- room into a bathroom and walk-in closet. Design the bathroom with 3' X 4' the walled shower with fiber- glass pan. The vanity cabinet should match specs from the other two bathrooms. Floors should be ceramic tile. Include all necessary mechanical upgrades to make this conversion possible. Include new vent fan that is vented to exterior, can light over shower, and wall -mounted vanity light over the sink. 2. Install cultured stone accent wall to front of home in area where vertical board and batten siding is located. This proposal is not a purchase agreement or other binding contract. At this time, the builder is submitting a proposal to complete the scope of work for $ in accordance with the RFP guidelines. Please attach allowances for items specified within the scope of work. The builder is also submitting a proposal to complete alternates specified within the scope of work: Alternate #1: $ Alternate #2: $ Company Name: State License Number: Telephone:, Address: Signature: Print Name and E-mail City/State/Zip: Proposals are due by Friday, July 5, 2019, at noon Submit this proposal form and required attachments to: Jeff Alger City of New Hope I Community Development Specialist 4401 Xylon Avenue North I New Hope, MN 55428 763.531.5119 jalger@newhopen-Ln.gov Date: Proposals may be submitted by hand delivery, U.S. Mail, or email This proposal is not a purchase agreement or other binding contract. At this time, the builder is submitting a proposal to complete the scope of work for $ 158,794 in accordance with the RFP guidelines. Please attach allowances for items specified within the scope of work. The builder is also submitting a proposal to complete alternates specified within the scope of work: Alternate #1: $ 14,877 Company Name: Day Construction Telephone: 651-565-7877 Alternate #2: $ 7,128 State License Number: BC641777 E-mail Matthew@Day-Construction.com Address: 8716 30th Ave N City/State/Zip: New Hope MN 55427 Signature: Date: July 5th. 2019 Print Name and Title: Matthew Day- Owner Proposals are due by Friday, July 5, 2019, at noon Submit this proposal form and required attachments to: Jeff Alger City of New Hope I Community Development Specialist 4401 Xylon Avenue North I New Hope, MN 55428 763.531.5119 jalger@newhopemn.gov Proposals may be submitted by hand delivery, U.S. Mail, or email Main: 651-565-7877 Fax: 651-565-7876 info@day-construction.com www.day-construction.com License BC641777 ro CONSTRUCTION 3924 Utah Ave - Notes on RFP and bid submittal Bid Notes • Regarding removal of wall between kitchen and dining room • A portion of the wall near the garage entrance will be retained. This section of the wall is needed for an existing heating supply duct, and to provide space for plumbing lines for the possible addition of the master bathroom. As much of the wall will be removed as is practical. The aesthetics of the open plan will not be impacted by this adjustment. • Connection to existing range vent is included- not specified in RFP • New bathtub and tub/shower faucet not specifically identified in RFP. These items are included in our price. • Carpet allowance of $25/yard has been included. Prices from suppliers have increased since the Zealand project and this is the allowance we recommend. • Siding budget includes LP SmartSide 4" window and door casing to match the aesthetic of the surrounding neighborhood. The alternative would be no trim around the windows which isn't common in older neighborhoods. • Removal of chain link fence on north and south sides of home is included • Removal of clothes -line posts is included • Work will be done in compliance with EPA Lead RRP best practices • Abatement of asbestos, if found, is not included • Duct Cleaning and final cleaning are included as part of bid price • Building Permit fee not included Additional Recommended Options: New air conditioning condenser- $4260 • Existing unit is at least 15 years old and the refrigerant (R22) has become very expensive which makes maintenance impractical New laundry tub in basement - $792 includes white plastic laundry tub, brass faucet, demo and disposal of existing laundry tub -DAY CONSTRUCTION- 651-565-7877 - infoo@day-construction.com - www.day-construction.com License #BC641777 Allowances fleeded Eacb House Numbers 4 $ 10.00 Bathtub- enameled steel 1. $ 220.00 Kitchen Faucet 1 $ 300.00 Bathroom Faucet 2 $ 150.00 Shower/Tub Faucet 1 $ 180.00 Toilet 2 $ 150.00 Bathroom Hardware Set 2 $ 75.00 General Lighting Allowance 1 $ 1,500.00 Cabinets (kitchen) 1 $ 9,500.00 Cabinets (bathrooms) 1 $ 1,200.00 Countertop (granite/quartz) (quantity is estimated 60 $ 65.00 based on general kitchen layout) Door Handle- Interior 16 S 20.00 Door handle- Exterior 3 S 60.00 Carpet 171 yards $ 24.00 Floor Tile 5/sf Wall Tile 5/sf Backsplash Tile 15/sf Vanity Light 1 $ 125.00 Floor Tile $5/sf Wall Tile $5/sf Accent Tile (recessed shelf) $ 30.00 Shower Door 1 $ 1,200.00 Mirror(s) $ 150.00 Vanity Cabinet i $ 600.00 Vanity Top 1 $ 500.00 1. That the EDA hereby approves the Proposal submitted by Day Construction, LLC for the base bid of $158,794 and Alternate #1 bid of $14,877, for a total bid of $173,671, attached as Exhibit A. 2. The President, Executive Director, New Hope City staff and the City Attorney are authorized and directed to draft the contract and all other appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the Contract and engage the services of Day Construction, LLC. Dated the 12th day of August 2019. G� Kathi He Presid AttestML Kirk McDonald, Executive Director Budget & Return on Investment for 3924 Utah Avenue North (1 of 2) "Best case scenario" EXPENSES AMOUNT Acquisition (including closing costs) $ (191,968.70) Legal (purchase) $ (1,812.00) 1st half real estate taxes $ (1,633.76) Lawn services $ (270.00) Utility billing $ (197.29) CenterPoint - gas $ (748.82) Xcel Energy - electric (estimated) $ (350.00) Base improvements $ (158,794.00) Alternate #1 $ (14,877.00) Closing costs for sale (estimated) $ (1,500.00) Legal costs for sale (estimated) $ (1,000.00) 2nd half real estate taxes (estimated) $ (1,633.76) Tree branch removal (estimated) $ (750.00) Future lawn services (estimated) $ (220.00) Future utility billing (estimated) $ (200.00) Future CenterPoint - gas (estimated) $ (700.00) Future Xcel Energy - electric (estimated) $ (425.00) TOTAL $ (377,080.33) REVENUE AMOUNT EDA (home sale proceeds) $ 365,000.00 TOTAL $ 365,000.00 RETURN ON INVESTMENT TOTAL COST/REVENUE $ (12,080.33) -3.20% PROJECTED ADDITIONAL TAX REVENUE AMOUNT TOTAL COST/REVENUE Year 1 (2021) $ 929.71 $ (11,150.62) -2.96% Year 2 (2022) $ 1,859.42 $ (10,220.91) -2.71% Year 3 (2023) $ 2,789.13 $ (9,291.20) -2.46% Year 4 (2024) $ 3,718.84 $ (8,361.49) -2.22% Year 5 (2025) $ 4,648.55 $ (7,431.78) -1.97% Year 10 (2030) $ 9,297.10 $ (2,783.23) -0.74% Year 13 (2033) $ 12,086.23 $ 5.90 0.00% Year 15 (2035) $ 13,945.65 $ 1,865.32 0.49% Year 20 (2040) $ 18,594.20 $ 6,513.87 1.73% Year 25 (2045) $ 23,242.75 $ 11,162.42 2.96% Year 30 (2050) $ 27,891.30 $ 15,810.97 4.19% *Based on new home valued at $330,000 Budget & Return on Investment for 3924 Utah Avenue North (2 of 2) "Worst case scenario" EXPENSES AMOUNT Acquisition (including closing costs) $ (191,968.70) Legal(purchase) $ (1,812.00) 1st half real estate taxes $ (1,633.76) Lawn services $ (270.00) Utility billing $ (197.29) CenterPoint - gas $ (748.82) Xcel Energy - electric (estimated) $ (350.00) Base improvements $ (158,794.00) Alternate #1 $ (14,877.00) Closing costs for sale (estimated) $ (1,500.00) Legal costs for sale (estimated) $ (1,000.00) 2nd half real estate taxes (estimated) $ (1,633.76) Tree branch removal (estimated) $ (750.00) Future lawn services (estimated) $ (220.00) Future utility billing (estimated) $ (200.00) Future CenterPoint - gas (estimated) $ (700.00) Future Xcel Energy - electric (estimated) $ (425.00) Contingency (estimated) $ (5,000.00) Realtor Listing Fee/Broker Commission (estimated) $ (12,000.00) TOTAL $ (394,080.33) REVENUE AMOUNT EDA (home sale proceeds) $ 330,000.00 TOTAL $ 330,000.00 RETURN ON INVESTMENT TOTAL COST/REVENUE $ (64,080.33) -16.26% PROJECTED ADDITIONAL TAX REVENUE AMOUNT TOTAL COST/REVENUE Year 1 (2021) $ 929.71 $ (63,150.62) -16.02% Year 2 (2022) $ 1,859.42 $ (62,220.91) -15.79% Year 3 (2023) $ 2,789.13 $ (61,291.20) -15.55% Year 4 (2024) $ 3,718.84 $ (60,361.49) -15.32% Year 5 (2025) $ 4,648.55 $ (59,431.78) -15.08% Year 10 (2030) $ 9,297.10 $ (54,783.23) -13.90% Year 15 (2035) $ 13,945.65 $ (50,134.68) -12.72% Year 20 (2040) $ 18,594.20 $ (45,486.13) -11.54% Year 25 (2045) $ 23,242.75 $ (40,837.58) -10.36% Year 30 (2050) $ 27,891.30 $ (36,189.03) -9.18% Year 69 (2088) $ 64,149.99 $ 69.66 0.02% *Based on new home valued at $330,000 FIRST AMENDMENT TO REMODELING CONTRACT THIS FIRST AMENDMENT TO REMODELING CONTRACT (this "Amendment") is dated effective as of February 24, 2020, by and between The Economic Development Authority, in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota ("EDA") and Day Construction, LLC ("Contractor"). RECITALS A. EDA and Contractor are parties to that certain Remodeling Contract for the Rehabilitation of 3924 Utah Avenue North, New Hope, Minnesota dated August 26, 2019 ("Contract"), for the rehabilitation of that certain real property legally described in the Contract. B. EDA and Contractor now wish to amend the Contract to extend the Completion Date. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth below, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Completion Date. The Completion Date as defined in Paragraph 4 of the Contract shall be extended to March 20, 2020 for the interior Work and May 15, 2020 for the "weather dependent" items including exterior painting, driveway replacement and landscape plantings. All the remaining terms shall remain the same. 2. Ratification. Except as expressly amended hereby, the Contract is fully ratified and confirmed and continues in full force and effect. 3. Counterparts. This Amendment may be executed in any number of counterparts, which, when taken together, shall constitute a complete and original instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first above written. The Economic Development Authority, in and for the City of New Hope, a public body corporate and politic created pursuant to the laws of the State of Minnesota By: Kirk McDonald Its: Executive Director Day Cons on, LLC By: ew Day Its: Chief Manager P:\Attomey\SAS\l Client Files\2 City of New Hope\99-11432 3924 Utah Ave N\First Amendment to Remodeling Contract.docx Request for Action December 10, 2018 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Aaron Chirpich, CD Specialist Agenda Section EDA Item Number 5 Agenda Title Resolution approving Purchase Agreement for the acquisition of 3924 Utah Ave N (project no. 1020) Requested Action Staff requests the Economic Development Authority (EDA) authorize entering into a Purchase Agreement for the acquisition of 3924 Utah Avenue North, for $190,100 (purchase price) plus any associated fees. Policy/Past Practice In the past, the EDA has successfully acquired vacant and distressed properties as part of the city's scattered site housing program. Background The EDA has directed community development staff to pursue the acquisition of distressed single-family homes. For the past four years, the EDA has focused on homes that were candidates for demolition. During this time, the EDA has purchased fourteen homes that have been razed to make room for the construction of eighteen new homes. Staff remains committed to finding additional opportunities for demolition. However, these properties have become more difficult to acquire for a variety of reasons. The primary barrier is lack of inventory, as the EDA has purchased many of the worst single-family nuisance properties available in the city. Secondly, the acquisition price for distressed properties has increased steadily over the past four years, as property values have risen citywide. These market forces have led staff to pursue opportunities within the rehabilitation sector, where staff believes the EDA has an opportunity to make a substantial impact with its neighborhood revitalization efforts. The most recent rehabilitation project completed by the EDA was at 3984 Zealand Avenue, which is located in the same neighborhood as the subject property. For the Zealand Avenue project, the EDA was able to complete a broad scope of work that improved nearly every aspect of the home. In the end, the EDA was able to cover all project costs with the proceeds received from selling the property. The same goal would be pursued for 3924 Utah Avenue. However, staff would like to explore the option of completing a demonstration project at 3924 Utah Avenue, and bid out key alternates for the home that would serve to exhibit potential remodeling ideas for New Hope residents that have similar homes. It is likely that such options would increase the project budget to a point where proceeds from the sale would not cover all costs. The EDA may recall that single-family remodeling demonstration projects are one of the activities identified in the recent study completed by staff that identifies housing revitalization programs of neighboring cities. The study identified two cities, Fridley and Coon Rapids, where moderately -scaled demonstration projects had been completed. In both cases, the cities purchased distressed properties and completed remodeling improvements that were showcased to residents through open house events. If the EDA is interested in pursuing such an option for 3924 Utah Avenue, staff would incorporate a plan that would invite residents into the home during critical phases of the construction process. I: \RFA\ COMM DEV \ 2018 \ EDA \ 12-10-18 \ Q & R 3924 Utah Acquistion 12-10-18.docx Request for Action, Page 2 3924 Utah Avenue Scope of Work 3924 Utah Avenue is a vacant and distressed two-story home that has received very few upgrades since it was built in 1961, and the home has suffered from a lack of general maintenance for several years. Despite its deficiencies, it remains a solid home with enough positive attributes to build off. At a minimum, staff would like to complete the following work on the home: • New siding, windows, doors, gutters, and driveway • New kitchen with quartz counter -tops, tile back -splash, and new appliances • Re -condition existing hardwood floors in select areas of the home • Install new interior doors and trim throughout the home • Replace all existing light fixtures, and add new lights to select areas • Completely redo all bathrooms (3) • Install new flooring throughout the entire home • Fresh paint throughout the home The following options would be bid as demonstration project alternates: • Install cultured stone accent wall to front of home • Remodel kitchen and dining room to create an open concept layout • Convert 2nd floor bedroom into a walk-in closet and master bath to create a modern master -suite ■ Install egress window in basement to add bedroom Offer Details 3924 Utah Avenue was offered for sale with a list price of $219,900. After viewing the property, staff submitted an offer of $180,000. Staff was notified two days later that the seller had received multiple offers, and was requesting the "best and final" offer from each interested buyer. Staff responded by increasing the EDA's offer to $190,100, and the seller accepted. The offer submitted is contingent upon EDA approval. A full project budget including alternates is attached. Funding Staff recommends using EDA funds for this project, and the primary goal would be recapture of the EDA's investment through the sale of the home. Once all bids are received, the EDA can decide if they would like to pursue a full-scale demonstration project with this home. Recommendation Staff is seeking approval of the acquisition of 3924 Utah Avenue. Staff recommends the EDA approve the attached resolution prepared by the City Attorney and the terms of the attached purchase agreement. Attachments • Resolution • Project budget • Location map • MLS listing for the property Purchase agreement • Housing assistance programs summary memo City of New Hope Single -Family Acquisition and Rehab-- Scattered Site Housing Program Total Project Cost and Total Funding Sources 3924 Utah Avenue New Hope MN, 55427 USES Amount Acquisition 190,100 Base Improvements 87,000 Real Estate Taxes 2,800 Current Tax Value $202,000 Legal 1,600 Current Property Tax $2,842 Listing Fee/Broker Commission 12,000 Closing, Recording Fees 1,500 Estimated Tax Amount "after rehab" $4,900 Alternates 20,000 "based on a value of $300,000" Contingency 5,000 Total 320,000 SOURCES Amount Proceeds from Sale 300,000 EDA Reserves 20,000 Total 320,000 Estimated Loss 20,000 CL cl U Joe! 75 Awrn Ab Apr 11/26/2018 NorthstarMLS Matrix Property/Agent Full Display, Single Family Residential, MLS #: 5020159 Type: For Sale 3924 Utah Avenue N, New Hope MN SS427- Status: Active List Price: $219,900 An Offer Has Been Accepted Contingent Upon: Inspection 1/18 Total Bed/Bath: 4/ 3 Garage: 2 Style: (SF) Two Stories Const Status: Previously Owned Foundation Size: 816 AbvGrdFinSgFt: 1,598 Total Fin SgFt: 1,598 Acres: 0.237 Lot Size: 75x14Ox75xi35 Yearly/Seasonal: Yearly 12ndA",N z u r Northwood Park 36ih Ay, Original List Price: $230,000 " Map data 02018 Google Map Page: 91 Map Coord: D3 _—Directions: Year Built: 1961 36th to Winnetka, left on 38 1/2, right on Utah Avenue List Date: 11/06/2018 Received By MLS:11/06/2018 General Property Information Legal Description: LOT 023 BLOCK 006 HOPEWOOD HILLS County: Hennepin Postal City: New Hope School District: 281 - Robbinsdale, 763-504-8000 Rental License Y/N: No Manufactured Home?No Complex/Dev/Sub: Common Wall: No Zoning: Residential -Single TAX INFORMATION Property ID: 1811821410077 Tax Year: 2018 Tax Amt: $2,842 Assess Bal: $ Tax w/assess: $2,842 Assess Pend: Unknown Homestead: Yes Days On Market:20 PDOM Accessibility: None 20 CDOM: Remarks Agent Remarks: There is no sign in front. Home is sold AS -IS. There is a 20K escrow balance from the city POS for repairs Buyer assumes repairs and escrow balance from city inspection, full list is in supplements. The family room down stairs is large, but unfinished. The furnace/AC were recently tuned up, the water heater is new as of 2016. Lot's of potential, but does require work. Please call Christine with any questions. Public Remarks: Investor/handy man special! Home is located in a great neighborhood and very close to many amenities and commuting. Home needs work but lot's of potential. Nice large yard, good sized rooms and original hardwood floors. Home is sold AS -IS. Structure Information Room Level Dimen Other Rooms Level Dimen Heat: Forced Air Living Rm Main 12x22 Laundry Basementl6x21 Fuel: Natural Gas Dining Rm Main 11x10 Air Cond: Central Family Rm Basemellx2l Water: City Water/Connected Kitchen Main 16x11 Bathrooms arooms Sewer: City Sewer/Connected Bedroom 1 Upper 9x11 Total: 3 3/4: 0 1/40 Garage: 2 Bedroom 2 Upper 12x11 Full: 1 1/2: 2 Oth Prkg: Bedroom 3 Upper 11x16 Pool: Bedroom 4 Upper 9x11 https://matrix.northstarmis.com/Matrix/Public/DisplaylTQPopup.aspx?iid=1 &did=17697&params=150%20NzYxN Dc5NQ))&pbs=1 &L=1 &exk=fOe27786... 1/2 11/26/2018 NorthstarMLS Matrix Finished Sq Ft Total Sg Ft Abv Grd: 1598 Abv Grd:782.00 Blw Grd: 0 Main Fir:816.00 Blw Grd:816.00 Total: 1,598 Total: 1,598 Bath Description: Main Floor 1/2 Bath, Upper Level Full Bath, Basement Dining Room Desc: Separate/Formal Dining Room, Kitchen/Dining Room Fireplaces: 0 Fireplace Characteristics Appliances: Cooktop, Wall Oven, Exhaust Fan/Hood, Dishwasher, Refrigerator, Washer, Dryer, Disposal Basement: Full, Unfinished Exterior: Fiber Board Fencing: Chain Link Amenities -Unit: Ceiling Fan(s) Parking Char: Attached Garage Special Search: 4 BR on One Level Out Buildings: Storage Shed Financial Cooperating Broker Compensation Buyer Broker Comp: 2.70 % Sub -Agent Comp: 0.00 % Facilitator Comp: 0.00 % Variable Rate: N List Type: Exclusive Right Financial Remarks: Rehab loans, conventional, cash Sellers Terms: FHA Rehab 203k, Conventional, Conventional Rehab, Cash In Foreclosure?: No Lender Owned?: No Potential Short Sale?; No Owner is an Agent?: No Contact Information Listing Agent: Christine A. Wikstrom 651-460-0019 Appointments: ShowingTime Co -List Agt: Heidi Priebe 952-270-0341 Listing Office: Midwest Management Incorporated dba Midwest Hbffice Phone: 952-500-8410 Management Incorporated dba Midwest Homes MLS #: 5020159 Address: 3924 Utah Avenue N , New Hope, MN 55427 https://matrix.northstarmis.com/Matrix/Public/DisplaylTQPopup.aspx?iid=1 &did=17697&params=150%2ONzYxNDc5NQ))&pbs=1 &L=1 &exk=fOe27786... 2/2 11 /26/2018 NorthstarMLS Matrix 3924 Utah Avenue N , New Hope, MN 55427 MLS Number: 5020159 https://matrix.northstarmis.com/Matrix/Public/PhotoPopup.aspx?n=18&i=0&L=1 &tid=1 &key=7614795&mtid=1 &pbs=1 &View=G 1 /3 11 /26/2018 NorthstarMLS Matrix 3924 Utah Avenue N , New Hope, MN 55427 MLS Number: 5020159 https://matrix.northstarmis.com/Matrix/Public/PhotoPopup.aspx?n=18&i=0&L=1 &tid=1 &key=7614795&mtid=1 &pbs=1 &View=G 2/3 11 /26/2018 3924 Utah Avenue N , New Hope, MN 55427 MLS Number: 5020159 NorthstarMLS Matrix https://matrix.northstarmis.com/Matrix/Public/PhotoPopup.aspx?n=18&i=0&L=1 &tid=1 &key=7614795&mtid=1 &pbs=1 &View=G 3/3 Memorandum To: Jeff Sargent, Director of Community Development CC: Kirk McDonald, City Manager From: Jeff Alger, Community Development Coordinator/Management Analyst Date: November 13, 2018 Subject: Housing Assistance Programs At the September 17, 2018, work session, staff presented details on renewing a loan origination agreement with the Center for Energy and Environment (CEE). The city has allocated $80,000 to the program through 2021, which includes funding for the following programs: 1. Emergency Deferred Loan Program: Deferred loan designed specifically for homeowners that have emergency improvement needs but do not qualify for other home improvement loan or grant programs. 2. Interest Subsidy Grant Program: Subsidy that supplements existing loan programs available from Minnesota Housing Finance Agency (MHFA), CEE, private lenders, and other housing resources. 3. Low Interest Revolving Loan Program: Revolving loan that helps New Hope homeowners make improvements to their properties. There are income restrictions on the Emergency Deferred Loan Program and Interest Subsidy Grant Program, but none on the Low Interest Revolving Loan Program. In discussing the topic, the city manager directed staff to research other types of housing assistance programs being utilized by other cities. In considering the possibility of funding additional housing assistance programs, the City Council may wish to consider the goal(s) of the program(s). If the City Council would like to provide additional assistance to property owners having difficulties maintaining minimum property standards, additional low -interest, income - restricted loans/grants offered through the CEE may be most appropriate. If the City Council would like to promote major renovation projects and increase property values in a manner similar to how the scattered site housing program is utilized, a customized program similar to Homes for Generations II (Coon Rapids) may be most appropriate. The following summary highlights some of the programs being offered by other cities, including free/discounted remodeling consultation services, rebates for new energy -efficient appliances, home improvement demonstration projects, city -specific housing assistance programs, and other loans and grants that are being offered through the CEE. 1 Remodeling Consultation Services Remodeling Advisor Visits (Coon Rapids, Fridley, Richfield, St. Louis Park) • Free remodeling advisor visits, city covers $225 cost. • Offered through Center for Energy and Environment (CEE). • Experienced remodeling advisors visit homes and offer construction -related advice. • Help prioritize projects, discuss remodeling options, provide ideas on how best to utilize existing space, make suggestions for kitchen and bathroom remodels, review bids, and give ideas on cost. • Homeowners receive a copy of the advisor's observations/opinions/suggestions. • Costs approximately $15,000 per year for Coon Rapids, $10,000 per year for Fridley, $15,000 per year for Richfield, and $15,000-$20,000 per year for St. Louis Park. Architectural Design Service (Coon Rapids, Richfield, St. Louis Park) ■ $25 or $50 (Richfield) for a two-hour consultation with an architect, the city covers $225 or $200 (Richfield) of $250 cost, which is limited to one per household. • Design -related service offered through the American Institute of Architects Minnesota. ■ No standard product that homeowners receive, although architects typically casually draw out suggested layout(s) for the space to be remodeled and make smaller suggestions such as the ideal placement of outlets. • Homeowners that have a clear idea of what they want to do are given the opportunity to affirm that their plan is well -thought-out and practical. • One of the participating architects can be selected to ensure that an addition fits with the style of an existing home and is compatible with the neighborhood (20 participating architects in St. Louis Park, 12 in Richfield, and six in Fridley). Appliances Energy Efficiency Rebates (St. Louis Park) • City matches 50% of utility rebates for energy -efficient furnaces, water heaters, and air conditioners, in addition to air sealing and insulation. st it a copy of utility rebate within one year of check date. Demonstration Projects a e pr monstration (Fridley) • City purchased two homes to be remodeled and serve as roadmap for updating the city's housing stock utilizing inexpensive improvements. • Residents were invited to see the transformation at one of three open houses — before, during, and after. • A "Remodeling Planbook" and "Remodeling Handbook" were made available as resources for residents. 2 Homes for Generations (Coon Rapids) • Demonstrated remodeling options for older style homes to meet current needs. • City purchased vacant, bank -owned properties and worked with contractors to showcase remodeling options between 2009-2012. • Reused materials and shopped at liquidators and reuse centers to keep projects within a modest budget. • pen hous�s_showcased the improvements and helped share ideas with residents. Housing Assistance Programs Homes for Generations II (Coon Rapids) • Consultation with architect required. • Incentives for homeowners who take on home improvement projects valued at $35,000 or more that add living space or involve a major remodel. • Eligible properties must be homesteaded and owner -occupied homes at least 20 years old. ■ Grants equal to 10% of total project cost, not to exceed $5,000, available when a project includes 2+ eligible exterior upgrades. o Eligible upgrades include altering the roofline on the front of house, constructing columns at the front entrance, building a covered front porch, adding shakes/brick/stone to the front of home, replacing/upgrading the front door and/or garage door if they face the street, or landscaping (consultation required). o The replacement of windows, siding, roofing, and driveways are not considered eligible exterior upgrades, but count towards the total project cost. • Grants equal to 5% of total project cost, not to exceed $2,500, available when a project only includes eligible interior improvements or does not include 2+ eligible exterior upgrades. o Eligible upgrades include additions, new sunrooms, finishing a previously unfinished space, new covered front porches, converting garage space into livable space, new bathrooms, reconfiguring living space, and major kitchen, bathroom, and basement remodels. • Rebate of 50% of building permit fees upon completion of the project. • City budgets $100,000 per year for program (includes grants, permit rebates, and architectural consultations), and has not exceeded that budget, unused funds roll over to following year. • 60 applications annually, 45 have architectural consultations, and 25 complete the project. ■ Some would do remodel with or without program, intent is that the project is better thought-out and nicer as a result (e.g. upgraded countertops or expanded scope of work). • Do not track those who would have done/not without program, receive verbal testimony. Transformation Home Loan Program (Richfield) • Forgivable interest -free loans for large remodeling projects. • For owner -occupied, single-family home improvement projects valued at $50,000 or more. • May borrow 15% of project cost with maximum loan limit of $25,000. • No income limits/payments/interest, due upon sale of home or forgiven after 30 years. 3 Loans/Grants Offered Through CEE By Other Cities Annka • Low Interest Loan: Up to $35,000, 3-4% fixed interest rate depending on income, 15 years. • Owner Occupied Deferred Loan: Up to $10,000 matching deferred loan, 0% fixed interest rate with income limit of 80% AMI, households less than 50% AMI do not need to provide a match, households between 50-80% match 1:1. • Rental Conversion Deferred Loan: Up to $50,000, 0% fixed interest rate with 1:1 borrower match to convert rental properties to owner -occupied single-family. • Homebuyer Assistance Deferred Loan: Up to $2,500, 0% fixed interest rate for households less than 80% of HUD median family income, deferred until sale or refinance. Blaine • Low Interest Loan: Up to $50,000, 5% fixed interest rate, 20 years, no income limit. • Manufactured Home Improvement Loan: Up to $7,500, 5% fixed interest rate, 8 years, income limits may apply. Brooklyn Park • Home Energy Loan: Up to $10,000, 2.99% fixed interest rate, 60 months, no income limit, must have completed CEE home energy visit within 90 days of application. • Home Improvement Loan: Up to $25,000, 5% fixed interest rate, 15 years, MHFA income limits apply. Coon Rapids • Home Improvement Incentive Program: Up to $25,000, 5.365%-5.865% fixed interest rate, 20 years, no income limit. • Home Rehabilitation Assistance Program: Up to $30,000, 0.5%-2.75% fixed interest rate, 25 years, income limits apply. • Two -Family Home Rehabilitation Program: Up to $30,000, 0.5%-4.5% fixed interest rate, 25 years, no income limit. Crystal • Home Improvement Grant: Up to $10,000 per calendar year, 20% of eligible expenses, no income limit. • Low Interest Loan: Up to $50,000, 3% fixed interest rate, 20 years, income limit of 110% AMI. Fridley • Emergency Deferred Loan: Up to $10,000, 0% fixed interest rate, 100% due after 20 years or if property ownership changes, whichever comes first. • Home Improvement Loan: Up to $50,000, 4.5% fixed interest rate, 20 years, no income limit. • Mobile Home Improvement Loan: Up to $10,000, 4.5% fixed interest rate, 10 years, no income limit. • Multi Family Exterior Improvement Loan: Up to $50,000 for 1-4 unit properties and additional $3,000 per additional unit, 4.5% fixed interest rate, 10 years. 4 Home Energy Loan: Up to $10,000, 2.99% fixed interest rate, 60 months, no income limit, must have completed CEE home energy visit within 90 days of application. Senior Deferred Loan: Up to $25,000, 0% fixed interest rate, must be 62+ years old, due upon sale, transfer, or if no longer owner -occupied, no income limit. Minnetonka • Low Interest Loan: Up to $15,000, 3% fixed interest rate, 10 years, income limit of 120% AMI, $25,000 asset limit and property value limit of $300,000. • Down -Payment Loan: Up to $10,000, 1% fixed interest rate, must contribute at least 25% of total down payment or closing cost, income limit of 120% AMI. Richfield • Home Energy Loan: Up to $10,000, 2.99% fixed interest rate, 60 months, no income limit, must have completed CEE home energy visit within 90 days of application. • Low Interest Loan: Up to $50,000, 3% fixed interest rate, 20 years, MHFA income limits apply. Roseville • Low Interest Loan: Up to $50,000, 3% fixed interest rate, 20 years, no income limit, must have completed CEE home energy visit, property value limit of $226,800. St. Louis Park • Home Energy Loan: Up to $10,000, 2.99% fixed interest rate, 60 months, no income limit, must have completed CEE home energy visit within 90 days of application. • Live Where You Work Program: Up to $2,500 for down payment, closing costs, or gap financing, forgivable after 3 years, income limits apply, must have been employed for at least six months in city and work at least 20 hours per week. • Low Interest Loan: Up to $35,000, 4%-5% fixed interest rate, up to 20 years, income limits apply. • Move Up In The Park Deferred Loan: Up to $25,000, 0% fixed interest rate, owner pays 75% of project cost, 100% forgiven after living in home after 30 years, income limits apply. 5 CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 18__ 24 RESOLUTION APPROVING PURCHASE AGREEMENT FOR THE ACQUISITION OF 3924 UTAH AVENUE NORTH (IMPROVEMENT PROJECT NO. 1020) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (`EDA") as follows: WHEREAS, on September 22, 2014, the City Council adopted Resolution No.14-126 at the City Council meeting authorizing City community development staff to actively pursue the acquisition of distressed single family homes for potential purchase by the EDA, as part of the City's scattered site housing program; WHEREAS, the City Council has directed City staff to negotiate for the terms most favorable to the City and EDA, and the execution of purchase agreements so as to secure purchase rights for these real properties, contingent on the review and approval of the EDA to the terms of the purchase agreements; WHEREAS, City staff have identified the opportunity to purchase certain real property located at 3924 Utah Avenue North, New Hope, MN, P.I.D. 18-118-21-41-0077, and legally described as Lot 23, Block 6, Hopewood Hills, Hennepin County, Minnesota (the "Property") from Rae D. Simonson ("Seller"); WHEREAS, the house located on the Property was built in 1961, and while suffering from a lack of general maintenance and upgrades, is a solid home that City staff believes could be rehabilitated; WHEREAS, it is in the best interest of the EDA to purchase the Property from Rae D. Simonson, in order to substantially improve the Property in accordance with the City's scattered site housing program and policy; WHEREAS, City staff believes that the best use of the Property is rehabilitation and renovation in order to maximize the tax base by substantially improving the condition and marketability of the Property; WHEREAS, the Property will be acquired with EDA funds; WHEREAS, it is in the best interest of the EDA to purchase the Property from Seller, in order to rehabilitate the Property in accordance with the City's scattered site housing program and policy; WHEREAS, it is not necessary for the Planning Commission to review this acquisition as this Property acquisition will have no effect on the comprehensive municipal plan pursuant to the terms of this Resolution; and WHEREAS, City staff is hereby seeking approval from the EDA of the Purchase Agreement, subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the closing on the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. It is in the best interest of the EDA to purchase the Property for rehabilitation and renovation in accordance with the City's scattered site housing program and policy. 3. That the purchase of the Property by EDA from Seller, for a sum of $190,100.00, with other terms and conditions as set forth in the Purchase Agreement attached hereto as Exhibit A, is approved subject to the review and approval by the City Attorney of proper title evidence and other terms relating to the closing on the sale of the Property. 4. This property acquisition will not have any effect on the comprehensive municipal plan and the Property's zoning classification will remain as R-1, single-family residential district. 5. The City and EDA shall use due diligence for rehabilitating the Property's condition and conducting any necessary renovations and cleanup of the Property to pursue this rehabilitation purpose and return the Property to the tax rolls for the benefit of all taxing jurisdictions 6. The President and Executive Director and the New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the purchase of the Property in accordance with the Purchase Agreement. Dated the 10' day of December, 2018. Attest: Kirk McDonald, Executive Director f Kathi en, Prelident Exhibit A Purchase Agreement See attached. P:\Attorney\SAS\l Client Files\2 City of New Hope\99-11432 3924 Utah Ave N\Resolution approving purchase of 3924 Utah Ave N.docx Aw�Y� p: iYaAi8a9-RipA iea�-soap-sCs76sTCE F 16 00� ADDENDUM TO PURCHASE AGREEMENT: COUNTEROFFER Ttas form approwd by the Mlnneaoffi Association of REALTOW ~ d wiaims any 4abWry afw*V out of use or n9suea of this form. #fFdwesttl mes 1 m 2018 Mlnnesma Aasodabw of REACTORS', Edina, MN 1. fate 11/16/2019 2. Page 1 S. Addendum to Purchase Agreement between parties, dated 190v► bor 9t h 20111 4. pertaining to the purchase and sale of the Property located at 3924 Mob Ara p 5. - -Ndw go a r4ta 55427 S. This CotirlWvffor does not fndude the terms or condtions In sny preWws Counbraffor(a) 7. The Purchase Agreement is rejected and the following Counteroffer is hereby made. AN terms and conditions remain 8. the same, as stated In the Purchase Agreement, except the fogowing: 9. (Sated appmprlate changes from original offer.) 10. ❑ Salo price shall be $ 11. ❑ Eamest money shell be a total of $ 12. ❑ Cash of _ percent (%) of the sale price, which Includes the earnest money. 13. ❑ Mortgage financing of percent (°/6) of the sale prioe. 14. ❑ Closing date shall be . 20 . 15. ❑ Seger agrees to complete all FHAILender required repairs, not to exceed $ 16. 0 Sew shag pay Buyer's closing costs, prop", Insurance and 17. not to exceed $ or percent (0/*) of the sale price. 18. ® OTHER: 1$ Buyer agrees to pay $1200.00 towards Pallerrs cloning costa. 20. All other torltRB to remain the same. f Q.t—►*rtJ A -'IAA 21. 22. 23. 24. 25. 11/18/2018 Id 2A2'34 FM Cff (Daft) (aww) (080) 27. (SAW) 28, 29. 30. MrkAWC (8118) (Date) ATTACH ONLYTHE FINAL COUNTEROFFER ADDENDUM TO THE PURCHASE AGREEMENT. THIS IS A LEGALLY BINDING COtlMACT BETWEEN BUYER(S) AND SELLER(S). IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. k9E1LTQR4 InstanetfoRMs AuthentisignID: 394A2045.B428-48B4-BD42-9C55657CBF16 PURCHASE AGREEMENT This form approved by the Minnesota AssoOdon of IEALTOW, which clisclalms arty liabilty arising out of use or misuse of this foram. ® 2018 Wffwesft Associa*m of RFALTOW, Edina, MN 1. Date 11/09/2028 2. Pagel 3. BUYER (S): The Woonanic D*velopwnt iwthority in and for tho City of Now ,a public body 4_ - coM2rate and politic, created purbu=t to the laws of the State of hii4nerota 5. Buyer's earnest money in the amount of 6. - Two Tlwunand Dollars ($ 2,000.00 _ ) 7. shall be delivered to listing broker, or, if checked, to ❑ no later than two (2) Business --M ►neet Money 8. Days after Final Acceptance Date of this Purchase Agreement. Buyer and Seller agree that earnest money shall be 9. deposited in the trust account of Earnest Money Holder as specified above within three (3) Business Days of receipt 10. of the earnest money or Final Acceptance Date of this Purchase Agreement, whichever is later. 11. Said earnest money is part payment for the purchase of the property located at 12. Street Address: 3924 Utah Avenue H 13. City of Now 2b" , County of El an napin , 14. State of Minnesota. leaaliv, described as 15. LOT 023 BLOCK 006 HOPZWOOD HILLS 16. Said purchase shall include all improvements, fixtures, and appurtenances on the property, if any, including but not 17. limited to, the following (collectively the 'Property': garden bulbs, plants, shrubs, trees, and lawn watering system; 18. shed; storm sash, storm doors, screens, and awnings; window shades, blinds; traverse, curtain, and drapery 19. rods, valances, drapes, curtains, window coverings, and treatments; towel rods; attached lighting and bulbs; fan fixtures; 20. plumbing fixtures; garbage disposals; water softener; water treatment system; water heating systems, heating systems; 21. air exchange system; environmental remediation system (e.g., radon, vapor intrusion); sump pump; TV antennalcable 22. TV jacks and w1ring1TV wall mounts; wall/ceiling-mounted speakers and mounts; carpeting; mirrors; garage door 23. openers and all controls; smoke detectors; fireplace screens, door, and heatilators; BUILVNS: dishwashers; refrigerators; 24. wine/beverage refrigerators; trash compactors; ovens; cook -top stoves; warming drawers; microwave ovens; hood fans; 25. shelving; work benches; intercoms; speakers; air conditioning equipment; electronic air filter; humidifier/dehumidifier; 26. liquid fuel tanks (and controls); pooVapa equipment; propane tank (and controls), security system equipment;T V satellite 27. dish; AND the following personal property shall be transferred with no additional monetary value, and free and clear 28. of all liens and encumbrances: 29. 30. Notwithstanding the foregoing, leased fixtures are not induded. 31. Notwithstanding the foregoing, the following item(e) are exduded from the purchase: 32. 33- PURCHASE PRICE: 34. Seller has agreed to sell the Property to Buyer for the sum of ($ 190,100.00 35. one Hundred NinaThourand one Hundred Dollars, 36. which Buyer agrees to pay in the following manner: 37. 1. l0o percent of the sale price in CASH, or more in Buyer's sole discretion, which includes the earnest 38. money; 39. 2. percent (%) of the sale price in MORTGAGE FINANCING. (See following Mortgage Financing section.) 40. 3. percent (%) of the sale price by ASSUMING Seller's current mortgage. (See attached Addendum to 41. Purchase Agreement Assumption Financing.) 42. 4, percent (%) of the sale price by CONTRACT FOR DEED. (See attached Addendum b,Purchase 43. Agreement: Contract for Deed Financing.) 44. 45. The date of closing shall be °A Qz before Dote bow 14th , 20 is . WWI (SM S) 4 heALYCmd, InskmetfoRms Authentislgn ID: 394A2045-B426ABB4-BD42.9C55657CBF16 a 48. PURCHASE AGREEMENT 46. Page 2 Date _11/0J ZoltL Property located at 3924 Utah avenue N Now as NN 55427 MOMAGE FINANCING: 49. This Purchase Agreement [] IS © IS NOT subject to the mortgage financing provisions below. If IS, complete the _- (Ohmkore.}-._ 50. MORTGAGE FINANCING section below. If IS NOT, proceed to the SELLER'S CONTRIBUTIONS TO BUYER'S 51, COSTS section. 52. Such mortgage financing shall be: (Check one.) 53. ❑ FIRST MORTGAGE only ❑ FIRST MORTGAGE AND SUBORDINATE FINANCING. 54. Financing ❑ DOES ❑ DOES NOT Include a grant, bond program, or other loan assistance program. If "DOES" 55. please specify: 56. Buyer shall apply for and secure, at Buyer's expense, a: (Check all that apply.) 57. ❑ CONVENTIONAL. 58. ❑ DEPARTMENT OF VETERANS'AFFAIRS ("OVA") GUARANTEED 59. ❑ FEDERAL. HOUSING ADMINISTRATION ("FHA") INSURED 60. ❑ PRIVATELY INSURED CONVENTIONAL 61. ❑ UNITED STATES DEPARTMENT OF AGRICULTURE ("USDA") RURAL DEVELOPMENT 62. ❑ OTHER 63. mortgage in the amount stated in this Purchase Agreement, amortized over a period of not more than 64. years, with an initial interest rate at no more than percent ("/e) per annum. The mortgage application IS 65. TO BE FADE WITHIN FIVE (5) BUSINESS DAYS after the Final Acceptance Date of this Purchase Agreement. 66, Buyer agrees to use best efforts to secure a commitment for such financing and to execute all documents required to 67. consummate said financing. 68. MOFtTG&GE EINANCING CQtMNGENCY: This Purchase Agreement is contingent upon the following and applies 69. to the first mortgage and any subordinate financing. (Chedr one.) 70. ❑ If Buyer cannot secure the financing specified in this Purchase Agreement, and this Purchase Agreement does not 71. close on the dosing date specified, this Purchase Agreement is canceled. Buyer and Seller shall immediately 72, sign a Car►celfation ofPurdww Agreementconfirming said cancellation and directing all earnest money paid hereto be 73. ❑ REFUNDED TO BUYER ❑ FORFEITED TO SELLER. 74. NOTE: If this Purchase Agreement is subject to DVA or FHA financing, FORFEITEDTO SELLER maybe prohibited. 75. See the following OVA and FHA Escape Clauses. 76. ❑ Buyer shall provide Seller, or licensee representing or assisting Seller, with the Written Statement, on 77. or before ,20 78. For purposes of this Contingency, "Written Statement" means a Written Statement prepared by Buyer's mortgage 79. originator(s) or lender(s) after the Final Acceptance Date that Buyer is approved for the loan(s) specified In this 80. Purchase Agreement, Including both the first mortgage and any subordinate financing, if any, and stating that an 81. appraisal, satisfactory to the lender(s), has been completed and stating conditions required by lender(s) to dose 82. the loan. 83. Upon delivery of the Written Statement to Seller, or licensee representing or assisting Seller, the obligation for 84. satisfying all conditions required by mortgage originators) or lender(s), except those conditions specified below, 85. are deemed accepted by Buyer: 86. (a) work orders agreed to be completed by Seller; 87. (b) any other financing terms agreed to be completed by Seller here; and 88. (c) any contingency for the sale and dosing of Buyer's property pursuant to this Purchase Agreement. MNAA-2 (ene) ra i n N e s o r• REALTORS InslanetFORMs Authentlsign ID: 394A2045-B428.48B4-BD42-9C55657CBF16 PURCHASE AGREEMENT 89. Page 3 Date 11 a92 Q 18 90. Property located at 3924 Utah Avenue N New 80 55427 91. Upon delivery of the Written Statement, if this Purchase Agreement does not close on the stated closing date for 92. ANY REASON relating to financing, including, but not limited to interest rate and discount points, ff any, then Seller 93. may, at Seller's option, declare this Purchase Agreement canceled, in which case this Purchase Agreement is 94. canceled. If Seller declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a 95. Cancellation? of Purchase Agreement confirming said cancellation and directing all earnest money paid here to be 96. forfeited to Seller as liquidated damages. In the aFternative, Seller may seek all other remedies allowed by law. 97. Notwithstanding the language in the preceding paragraph, Seller may notdeclare this Purchase Agreement canceled 98. 9 the reason this Purchase Agreement does not close was due to: 99. (a) Seller's failure to complete work orders to the extent required by this Purchase Agreement; 100. (b) Seller's failure to complete any other financing terms agreed to be completed by Seller here; or 101. (c) any contingency for the sale and dosing of Buyer's property pursuant to this Purchase Agreement, except as 102. specified In the contingency for sale and dosing of Buyer's property. 103. If the Written Statement is not provided by the date specified on line 77, Seller may, at Seller's option, declare this 104. Purchase Agreement canceled by written notice to Buyer at any time prior to Seller receiving the Written Statement, 105. in which case this Purchase Agreement is canceled. in the event Seller declares this Purchase Agreement canceled, 106. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation and 107. directing all earnest money paid here to be refunded to Buyer. 100. if the Written Statement is not provided, and Seller has not previously canceled this Purchase Agreement, this 109. Purchase Agreement is canceled as of the closing date specified in this Purchase Agreement Buyer and Seller 110. shall immediately sign a Cancellation ofPurchaseAgreementconfirming said cancellation and directing all earnest 111. money paid here to be refunded to Buyer. 112. LOCKING OF MORTGQE INTEREST RATE (°RATE" 3: The Rate shall be locked with the lender(s) by Buyer: 113. (Check one.) 114. ❑ WITHIN FIVE (5) BUSINESS DAYS OF FINAL ACCEPTANCE DAM OF THIS PURCHASE AGREEMENT; OR 115. ❑ AT ANYTIME PRIORTO CLOSING OR AS REQUIRED BY LENDER(S). 116. LENDEH fAMITMEb!T WDEIK OHQER : Nothing in this Purchase Agreement shall be construed as a warranty 117. that Seller shall make repairs required by the lender commitment. However, Seller agrees to pay up to 118. $ to make repairs as required by the lender commitment. If the lender commitment 119. is subject to any work orders for which the cost of making said repairs shall exceed this amount, Seller shall have the 120. following options: 121. (a) making the necessary repairs; or 122. (b) negotiating the cost of making said repairs with Buyer; or 123. (c) declaring this Purchase Agreement canceled, in which case this Purchase Agreement is canceled. Buyer and Seller 124. shall immediately sign a Cancellaflon of Purchase Agneementoonfirmktg said cancellation and directing all earnest 125. money paid here to be refunded to Buyer, unless Buyer provides for payment of the cost of said repairs or escrow 126. amounts related thereto above the amount specified on line 118 of this Purchase Agreement. 127. ❑ SELLER ❑ BUYER agrees to pay any reinspection fee required by Buyer's lender(s). Chit lc-- 128. FHA ESCAPE_CI.AUSK. (EHA Flnancino_Qniy : "It is expressly agreed that, notwithstanding any other provisions 129. of this contract, the purchaser shall not be obligated to complete the purchase of the Property described here or to incur 130. any penalty by forfeiture of earnest money deposits or otherwise, unless the purchaser has been given in accordance 131. with the Department of Housing and Urban Development ("HUD")/FHA or DVA requirements a written statement by the 132. Federal Housing Commissioner, Department of Veterans' Affairs, or a Direct Endorsement lender setting forth the 133. appraised value of the Property as not less than $ (sale Price) 134. The purchaser shall have the privilege and option of proceeding with consummation of the contract without regard 135. to the amount of the appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage 136. HUD will insure; HUD does not warrant the value nor the condition of the Property. The purchaser should satisfy himself/ 137. herself that the price and condition of the Property are acceptable" MN;PA-3 (8118) M+ H K E 50 T A REALTORS InstanetfoRMs AuthentisignID: 394A2045.B428.48B4-BD42.9C55657CBF16 139. Property located at 3924 trt" Avenue S PURCHASE AGREEMENT 138. Page 4 Date 1109 2010 Now Sop* laf 55427 140. LF.NDERPH=IESSING F F : Seller agrees to pay Buyer's closing fees and 141. miscellaneous processing fees which cannot be charged to Buyer, not to exceed $ 142. This amount is in addition to Seller's Contributions to Buyer's Costs, if applicable. 143• Fi : Pursuant to federal regulations, a one-time Funding Fee must be paid 144. at the dosing of this transaction as follows: 145. 146. paid by Buyer[] AT CLOSING ❑ ADDED TO MORTGAGE AMOUNT paid by Seller 147. NOTE: DVA regulations limit the fees and charges Buyer can pay to obtain a OVA loan. 148. V ly). "it is expressly agreed that, 149. notwithstanding any other provisions of this contract, the purchaser shall not incur any penalty by forfeiture of earnest 150. money or otherwise be obligated to complete the purchase of the Property described here, if the contract purchase 151. price or cost exceeds the reasonable value of this Property established by the Department of Veterans' Affairs. The 152. purchaser shall, however, have the privilege and option of proceeding with the consummation of this contract without 153. regard to the amount of reasonable value established by the Department of Veterans' Affairs " 154. NOTE: Verify DVA requirements relating to payment of all special assessments levied and pending, and 165. annual Installments of special assessments certified to yearly taxes. 157. 158.DUMB'S COSTS: 159. Seller ❑ IS 91 IS NOT contributing to Buyer's costs. If answer is IS, Seller agrees to pay at closing, up to: (Chet* one.) --- fc ono.}----- 160. ❑ $ 161. ❑ percent (%) of the sale price 162. towards Buyer's dosing fees, title service fees, title searches, title examinations, abstracting, lender's title Insurance, 163. owner's title insurance, prepaid items, other Buyer's costs allowable by lender, if any, and/or mortgage discount points. Any 164. amount of Seller's contribution that exceeds Buyer's allowable costs, or which cannot be used because Seller's 165. contribution exceeds the maximum Seller contribution allowed by law or by mortgage requirements, shall be retained 166. by Seller. 167. NOTE: The amount paid by Seller cannot exceed the maximum Seller contribution allowed by FHA, DVA, or 168. lender. All funds paid by Seller on behalf of Buyer must be stated on the Closing Disclosure at closing. 169. INSPECTIONS: 170. Buyer has been made aware of the availability of Property inspections. Buyer ❑ ELECTS® DECLINES to have a 171. Property inspection performed at Buyer's expense.----(Chwk one.)------ 172. This Purchase Agreement ❑ IS © IS NOT contingent upon any inspection(s) of the Property obtained by Buyer to ----{Check onsJ_ 173. determine its condition, including any non -intrusive testing or any intrusive testing as allowed pursuant to this Purchase 174. Agreement. Any Inspection(s) or test(s) shall be done by an inspector(s) or tester(s) of Buyer's choice. Buyer shall 175. satisfy Buyer as to the qualifications of the Inspector(@) or tester(s). For purposes of this Purchase Agreement, 176. 'intrusive testing" shall mean any testing, inspection(s), or investigation(s) that changes the Property from its original 177. condition or otherwise damages the Property. 178. Seller ❑ DOES ❑ DOES NOT agree to allow Buyer to perform intrusive testing or inspection(s). one.}--.----- 179. If answer is DOES, Buyer agrees that the Property shall be returned to the same condition it was in prior to Buyer's 180. intrusive testing at Buyer's sole expense. MN:PA-4 (8118) REALTORS" InstanetFoRms Authentlsign ID: 394A2045-8420-48B4-BD42.9C55657CBF16 PURCHASE AGREEMENT 181. Page 5 Date - ii o9 2ois 182. Property located at 3924 Utah Avenue N 183. Seller will provide access to attic(s) and crawlspace(s). 55427 184. All inspection(s), test(s), and resulting negotiations, if any, shall be done within Calendar Days of Final 185. Acceptance Date of this Purchase Agreement (`inspection Period"). Buyer may cancel this Purchase Agreement based 186, on the inspections) or test result(s) by providing written notice to Seller, or licensee representing or assisting Seller, of 187. Buyer's Intent to cancel no later than the and of the inspection Period. if Buyer cancels this Purchase Agreement, 188. Buyer and Seller shall immediately sign a Carweliation of Purchase Agreement confirming said cancellation and 189. directing all earnest money paid here to be refunded to Buyer If Buyer does not cancel this Purchase Agreement before 190. the end of the Inspection Period, then this Inspection Contingency shall be deemed removed and this Purchase 191. Agreement shall be in full force and effect. 192. OTHER INSPECTION ITEMS: 193. 194. 195, 196• SALE OF BUYER'S PROPERTY: 197. (Check one.) 198. ❑ 1. This Purchase Agreement is subject to an Addendum to Purchase Agreement: Sale of Buyers Property 199. Confingencyfor the sale of Buyers property. (If checked, see attached Addendum.) 200. OR 201. ❑ 2. This Purchase Agreement is contingent upon the successful closing on the Buyer's property located at 202. , which is scheduled to close on 203. , 20 pursuant to a fully executed purchase agreement. If Buyer's 204. property does not close by the closing date specified in this Purchase Agreement, this Purchase Agreement 205. is canceled. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said 206. cancellation and directing all earnest money paid here to be refunded to Buyer. The language in this paragraph 207. supersedes any other provision to the contrary in any financing contingency made a part of this Purchase 208. Agreement, if applicable. 209. OR 210. R] 3. Buyer represents that Buyer has the financial ability to perform on this Purchase Agreement without the sale 211. and closing on any other property. 212, REAL ESTATE irAXE; (SPECIAL ASSESSMENTS: 213. REAL EaIAU TAXES: Seller shall pay on the date of closing all real estate taxes due and payable in all prior years 214. including all penalties and interest. 216. Buyer shall pay ❑X PRORATED FROM DAY OF CLOSING ❑ ALL [] NONE ❑ A2the OF real estate taxes --- - --- - .... .......... 216. due and payable in the year of closing. 217. Seller shag pay© PRORATEDTO DAY OF CLOSING ❑ ALL ❑ NONE ❑ 112the OF real estate taxes due and -- - -- - - - (c7u ck ow. }--..--- -._- - --------.- 218. payable in the year of dosing. 219. If the Property tax status is a part -or non -homestead classification in the year of closing, Seller❑SHALL[ SHALL NOT 220. pay the difference between the homestead and non -homestead. 221. Buyer shall pay real estate taxes due and payable in the year following closing and thereafter, the payment of which 222. is not otherwise here provided. No representations are made concerning the amount of subsequent real estate taxes. MN:PA-5 (8h 6) M I N N C 9 0 r A REALTORS InstonetFoRms Aulhentisign ID: 394A2045-B428.4BB4-BD42.9C55657CBF16 PURCHASE AGREEMENT 223. Page 6 Date _ xx o9 2a1e 224. Property located at 3924 tFtsh AV*nUO Dr MeW Hops W 55427 225 P - 226. ❑ BUYER SHALL PAY 91 SELLER SHALL PAY on date of closing any deferred real estate taxes (e.g., Green -•-------_•-.__---.--{CheDk one. .._.... 227. Acres) or special assessments, payment of which is required as a result of the closing of this sale. 228. ❑ BUYER AND SELLER SHALL PRORATE AS OF THE DATE OF CLOSING © SELLER SHALL PAY ON 229. DATE OF CLOSING all installments of special assessments certified for payment, with the real estate taxes due and 230. payable In the year of closing. 231. ❑ BUYER SHALL ASSUME FRI SELLER SHALL PAY on date of dosing all other special assessments levied as 232. of the date of this Purchase Agreement. 233. ❑ BUYER SHALL ASSUME N SELLER SHALL PROVIDE FOR PAYMENT OF spectral assessments pending as 234. of the date of this Purchase Agreement for improvements that have been ordered by any assessing authorities. (Seller's 235. provision for payment shall be by payment into escrow of two (2) times the estimated amount of the assessments 236. or less, as required by Buyer's lender.) 237. Buyer shall pay any unpaid special assessments payable in the year following closing and thereafter, the payment of 238. which is not otherwise here provided. 239. As of the date of this Purchase Agreement, Seller represents that Seller ❑ HAS n HAS NOT received a notice ----(ChK* DWI -- 240. regarding any new improvement project from any assessing authorities, the costs of which project may be assessed 241. against the Property. Any such notice received by Seiler after the date of this Purchase Agreement and before closing 242. shall be provided to Buyer immediately. If such notice is issued after the date of this Purchase Agreement and on 243. or before the date of closing, then the parties may agree in writing, on or before the date of closing, to pay, provide 244. for the payment of, or assume the special assessments. In the absence of such agreement, either party may declare 245. this Purchase Agreement canceled by written notice to the other party, or licensee representing or assisting the other 246. party, in which case this Purchase Agreement is canceled. If either party declares this Purchase Agreement canceled, 247. Buyer and Seller shall immediately sign a Cancellation of Purchase Agreement confirming said cancellation and 248. directing all earnest money paid here to be refunded to Buyer. 249. 250. : This Purchase Agreement ❑ IS N IS NOT subject to 251. cancellation of a previously written purchase agreement dated _-_-___ , 20 252. (If answer is IS, said cancellation shall be obtained no later than , 20 . 253. If said cancellation is not obtained by said date, this Purchase Agreement is canceled. Buyer and Seiler shall immediately 254. sign a Cancellation of Purchase Agreement confirming said cancellation and directing all earnest money paid here to 255. be refunded to Buyer.) 256. DEEDIMARKETA LF T1TLE. Upon performance by Buyer, Seiler shall deliver a: (Check one.) 257. nWARRANTYDEED❑PERSONALREPRESENTA-nVE'SDEED❑CON1'RACTFOR DEED❑TRUSTEE'S DEED 258. ❑ OTHER: DEED joined in by spouse, if any, conveying marketable title, subject to 259. (a) building and zoning laws, ordinances, and state and federal regulations; 260. (b) restrictions relating to use or improvement of the Property without effective forfeiture provisions; 261. (c) reservation of any mineral rights by the State of Minnesota; 262. (d) utility and drainage easements which do not Interfere with existing improvements; 263. (e) rlghts of tenants as folk wa (unless specified, not subject to tenancies): 264. -_ ; and 265. (f) others (must be specified in writing); 266. _ MN:M-a (13/1 el RE A IIILTORS� InstanetFoati, Authentisign ID: 394A2045-B42848B4-BD42.9C55657C8F16 PURCHASE AGREEMENT 267. Page 7 Date _ 1110912018 268. Property located at 3924 Utah Avenue N Now Hope IIr 55427 269• 20529-*MQN: $eller shall deliver possession of the Property: (Check one.) 270. R] IMMEDIATELY AFTER CLOSING; or 271. ❑ OTHER: 272. Seller agrees to remove ALL DEBRIS AND ALL PERSONAL PROPERTY NOT INCLUDED HERE from the Property 273. by possession date. 274. LINKER DEVICES: Seller warrants that Seller shall permanently disconnect or discontinue Seller's access or service 275. to any device or system on or serving the property that is connected or controlled wirelessly, via internet protocol (9131) 275, to a router or gateway or directly to the cloud no later than delivery of possession as specified in this Purchase 277. Agreement. 278. E8Q8AI QN--S: fill interest; unit owners' association dues; rents; and charges for city water, city sewer, electricity, and 279. natural gas shall be prorated between the parties as of date of dosing- Buyer shall pay Seiler for remaining gallons of 280, fuel oil or liquid petroleum gas on the day of closing, at the rate of the last fill by Seller. 281. JW AND MINABON. As quickly as reasonably possible after Final Acceptance Date of this Purchase Agreement: 282. (a) Seiler shall deliver any abstract of title and a copy of any owner's title insurance policy for the Property, if 283. in Seller's possession or control, to Buyer or Buyer's designated title service provider. Any abstract of title or 284. owner's title insurance policy provided shall be immediately retumed to Seller, or licensee representing or 285. assisting Seller, upon cancellation of this Purchase Agreement, and 286. (b) Buyer shall obtain the title services determined necessary or desirable by Buyer or Buyer's lender, including 287. but not limited to title searches, tide examinations, abstracting, a title insurance commitment, or an attorney's 288. title opinion at Buyer's selection and cost and provide a copy to Seiler. 289. Seller shall use Seller's best efforts to provide marketable title by the date of closing. Seller agrees to pay all costs 290. and fees necessary to convey marketable tide including obtaining and recording all required documents, subject to the 291. following: 292. In the event Seller has not provided marketable tide by the date of closing, Seller shall have an additional thirty 293. (30) days to make tide marketable, or in the alternative, Buyer may waive title defects by written notice to Seller. In 294, addition to the thirty (30)-day extension, Buyer and Seller may, by mutual agreement, further extend the closing 295, date. Lacking such extension, either party may declare this Purchase Agreement canceled by written notice to 296. the other party, or licensee representing or assisting the other party, in which case this Purchase Agreement is 297. canceled. If either party declares this Purchase Agreement canceled, Buyer and Seller shall immediately sign a 298. Cancellation of Purchase Agreement confirming said cancellation and directing all earnest money paid here to be 299. refunded to Buyer. 300. SUBDIVISION QF LAND. BOUNDARIE% AND ACCE". If this sale constitutes or requires a subdivision of land 301. owned by Seller, Seller shad pay all subdivision expenses and obtain all necessary governmental approvals. Seller 302. warrants that the legal description of the real property to be conveyed has been or shall be approved for recording as 303. of the date of dosing. Seller warrants that the buildings are or shall be constructed entirely within the boundary lines 304. of the Property. Seller warrants that there is a right of access to the Property from a public right-of-way. 305. I01ECHANW1 LI .- Seller warrants that prior to the closing, payment In full will have been made for an labor, materials, 306. machinery, fixtures, or tools furnished within the 120 days immediately preceding the closing in connection with 307. construction, alteration, or repair of any structure on, or improvement to, the Property. 308. NOTICES: Sellerwarrants that Seller has not received any notice from any governmental authority as to condemnation 309. proceedings, or violation of any law, ordinance, or regulation. If the Property is subject to restrictive covenants, Seller 310. warrants that Seller has not received any notice from any person or authority as to a breach of the covenants. Any 311. such notices received by Seller shall be provided to Buyer immediately. - 312. DIMENSIONS: Buyer acknowledges any dimensions, square footage, or acreage of land or improvements provided 313. by Seller, third party, or broker representing or assisting Seller are approximate. Buyer shall verify the accuracy of 314. Information to Buyer's satisfaction, if material, at Buyer's sole cost and expense. 315. ACCESS, AGREEMENT: Seller agrees to allow reasonable access to the Property for performance of any surveys or 316. inspections agreed to here. MN:PA-7 ($/18) Y I M H E $ O T A REALTORS InstanetFORMS Authentisign ID: 394A2045-B426-48B4-BD42-9C55657C6F76 PURCHASE AGREEMENT 317. Page 8 Date 11 os 2019 318. Property located at 3924 Utah Avenue n now move HN 35427 319. 81aK QF LOgfi: 11 there is any loss or damage to the Property between the Final Acceptance [date and the date of 320. dosing for any reason, including fire, vandalism, flood, earthquake, or act of God, the risk of loss shall be on Seller_ If 321. the Property is destroyed or substantially damaged before the closing date, this Purchase Agreement is canceled, 322. at Buyer's option, by written notice to Seller or licensee representing or assisting Seller. If Buyer cancels this Purchase 323. Agreement, Buyer and Seller shall Immediately sign a Caocellativn of Purchase Agreementconfirming said cancellation 324. and directing all earnest money paid here to be refunded to Buyer. 325. TIME OF,E$;ENCE: Time is of the essence in this Purchase Agreement. 326, CALCULATION OF DAYS: Any calculation of days begins on the first day (Calendar or Business Days as specified) 327. following the occurrence of the event specified and includes subsequent days (Calendar or Business Days as specified) 328. ending at 11:59 P.M. on the last day. 329. BUSINESS DAYS: "Business Days° are days which are not Saturdays, Sundays, or state or federal holidays unless 330. stated elsewhere by the parties in writing. 331. CALENDAR DAYS: "Calendar Days' include Saturdays, Sundays, and state and federal holidays. 332. RJELEASE OF EARNEST MONF.: Buyer and Seller agree that the Earnest Money Holder shall release earnest money 333. from the Earnest Money Holder's trust account: 334. (a) at or upon the successful closing of the Property; 335. (b) pursuant to written agreement between the parties, which may be reflected in a Cancellation of Purchase 336. Agreement executed by both Buyer and Seller; 337. (c) upon receipt of an affidavit of a cancellation under MN Statute 659.217; or 338. (d) upon receipt of a court order. 339. DEFAULT: If Buyer defaults in any of the agreements here, Seller may cancel this Purchase Agreement, and any 340. payments made here, including eamest money, shall be retained by Seller as liquidated damages and Buyer and Seller 341. shall affirm the same by a written cancellation agreement. 342. If Buyer defaults in any of the agreements here, Seller may terminate this Purchase Agreement under the provisions 343. of either MN Statute 559.21 or MN Statute 559.217, whichever is applicable. If either Buyer or Seller defaults in any 344. of the agreements here or there exists an unfulfilled condition after the date specified for fulfillment. either party may 345. cancel this Purchase Agreement under MN Statute 569.217, Subd. 3. Whenever it is provided here that this Purchase 346. Agreement is canceled, said language shall be deemed a provision authorizing a Declaratory Cancellation under MN 347. Statute 559.217, Subd. 4. 348. If this Purchase Agreement is not canceled or terminated as provided here, Buyer or Seller may seek actual damages 349. for breach of this Purchase Agreement or specific performance of this Purchase Agreement; and, as to specific 350. performance, such action must be commenced within six (6) months after such right of action arises. 361. NOTICE REGAflpING PREDATORY OFFENDgR.I[+ EQ9MATIpN: Information regarding the predatory offender 352. registry and persons registered with the predatory offender registry under MN Statute 243.156 may be obtained 353. by contacting the local law enforcement offices in the community where the Property Is located or the Minnesota 354. Department of Corrections at (651) 361-7200, or from the Department of Corrections web slte at 355. www corr stats.mmus. 356. BUYER HAS THE RIGHT TO A WALK-THROUGH REVIEW OF THE PROPERTY PRIOR TO CLOSING TO 357. ESTABLISH THAT THE PROPERTY IS IN SUBSTANTIALLY THE SAME CONDITION AS OF THE DATE OF 358. THIS PURCHASE AGREEMENT. 359. BUYER HAS RECEIVED A: (Check any that apply.) ❑ DISCLOSURE STATEMENT., SELLER'S PROPERTY 360. DISCLOSURE STATEMENTORAL@ DISCLOSURE STATEMENT:SELLER'S DISCLOSURE ALTERNAnM FORM. 361. DESCRIPTION OF PROPERTY CONDITION: See Disclosure Statement: Seller's Property Disclosure Statement or 362. Mclosure Statement: Sellers disclosure Alternatives for description of disclosure responsibilities and limitations, if 363. any. 364. BUYER HAS RECEIVED THE INSPECTION REPORTS, IF REQUIRED BY MUNICIPALITY. 365. BUYER IS NOT RELYING ON ANY ORAL REPRESENTATIONS REGARDING THE CONDITION OFTHE PROPERTY 366. AND ITS CONTENTS. MN;PA-B (8✓13) " I N N E 3 O T A REALTORS InstanetFaP,,.s Authentlsign ID: 394A2045-B4284BB4-BD42.9C55657CBF16 366. Property located at 3924 Utah kvenue N PURCHASE AGREEMENT 367. Page 9 Date 11 0 9 2 018 New Hope KN 55427 369. (Cho* appropriate boxes.) 370. SELLER WARRANTS THAT THE PROPERTY IS EITHER DIRECTLY OR INDIRECTLY CONNECTED TO: 371. CITY SEWER ©YES ❑ NO / CITY WATER ©YES ❑ NO 372. 373. SELLER ❑ DOES © DOES NOT KNOW OF A SUBSURFACE SEWAGE TREATMENT SYSTEM ON OR 374. SERVING THE PROPERTY. (it answer is DOES, and the system does not require a state permit, see Disclosure 375. Statement: Subsurface Sewage Treatment System.) 376. PRIVATE WELL 377. SELLER ❑ DOES ®. DOES NOT KNOW OF A WELL ON OR SERVING THE PROPERTY. 378. (If answer is DOES and well is located on the Property, see Disclosure Statement Well.) 379. THIS PURCHASE AGREEMENT ❑ IS © IS NOT SUBJECT TO AN ADDENDUM TO PURCHASE AGREEMENT.- f one.}---- 380. SUBSURFACE SEWAGE TREATMENT SYSTEM AND WELL INSPECTION CONTINGENCY. 381. (It answer is IS, see attached Addendum.) 382. IF A WELL OR SUBSURFACE SEWAGE TREATMENT SYSTEM EXISTS ON THE PROPERTY, BUYER HAS 383. RECEIVED A DISCLOSURESTATi=MENT, WELL AND/OR A DISCLOSURESTATiEMENT. SUBSURFACESEWAQE 384. TREATMENT SYSTEM. 385. HOME PROTECTIONIMIARRANTY PLAN. Buyer and Seller are advised to investigate the various home protection/ 386. warranty plans available for purchase. Different home protectiontwarranty plans have different coverage options, 387. exclusions, limitations, and service fees. Most plans exclude pre-existing conditions. (Check one.) 388. ❑ A Home Protection/Warranty Plan will be obtained by ❑ BUYER ❑ SELLER and paid for by -------1ChaCk one.}------- 389. ❑ BUYER ❑ SELLER to be issued by -•••--..•---rl hs& ano_--- --- - -- - - 390. at a cost not to exceed $ 391. Z No Home Protection/Warranty Plan is negotiated as part of this Purchase Agreement, However, Buyer may elect 392. to purchase a Home Protection/Warranty Plan. 393. AGENCY NOTICE 394 Christine Am Vikatram is Seller's Agent ❑ Buyer's Agent ❑ Dual Agent ❑ Facilitator. (Lloenaee) _ - — —---------(ctux* c+ne.r- — -- - — - - - 395. uidwrt tue.eeeemc zncorporatae dpa nidwe K*aea (Real Estate Company Name) 396. Anthony J Rawk is ❑ Seller's Agent ® Buyers Agent ❑ Dual Agent ❑ Facilitator. (I-lcensee) __.r_..-- .� fC►aeak orre.}--------..._------- --- 397. Hawk Realty Compaay (Real Estate company Name) 398. THIS NOTICE DOES RM SATISFY MINNESOTA STATUTORY AGENCY DISCLOSURE REQUIREMENTS. MNAA-9 (8/18) 11111, ALTORS Instanstfop. s Auihentisign ID: 394A2045-B4284BB4-BD42-9C55657CBF16 400. Property located at 3924 t7t&h 1lvenuo N PURCHASE AGREEMENT 399. Page 10 Date ix a 20xa Now Hope !EN 55427 401. 17 AL AC€NCY9EPRFSI=NTATION 402. PLEASE CHECK ONE OF THE FOLLOWING SELECTIONS: 403. ® Dual Agency representation DOES NOT appl y in this transaction. Do not complete lines 404-420. 404. ❑ Dual Agency representation DOES apply in this transaction. Compiete the disclosure in lines 405-420. 405. Broker represents both the Seller(s) and the Buyer(s) of the Property involved In this transaction, which creates a 40& dual agency. This means that Broker and its salespersons owe fiduciary duties to both Seller(s) and Buyer(s). Because 407- the parties may have conflicting Interests, Broker and its salespersons are prohibited from advocating exclusively for 408. either parry- broker cannot act as a dual agent in this transaction without the consent of both Seller(s) and Buyer(s). 409. Sellers) and Buyer(s) acknowledge that 410. (1) confidential information communicated to Broker which regards price, terms, or motivation to buy or sell will 411. remain confidential unless Seller(s) or Buyer(s) instructs Broker in writing to disclose this information. Other 412. information will be shared; 413. (2) Broker and Its salespersons will not represent the interest of either party to the detriment of the other; and 414. (3) within the limits of dual agency, Broker and its salespersons will work diligently to facilitate the mechanics of 415. the sale. 416. With the knowledge and understanding of the explanation above, Sellers) and Buyer(s) authorize and instruct Broker 417. and its salesperson to act as dual agents in this transaction. 418. Seller Buyer 419. Seller ___ Buyer 420. Date Date -- -- - - 421. CLOSING COSTS: Buyer or Seller may be required to pay certain closing costs, which may effectively increase the 422. cash outlay at closing or reduce the proceeds from the sale. 423. SETTLEMENT STATEMENT: Buyer and Seller authorize the title company, escrow agent, and/or their representatives 424. to disclose and provide copies of the disbursing agent's settlement statement to the real estate licensees Involved in 425. the transaction at the time these documents are provided to Buyer and Seller. 426. " : Section 1445 of the Internal Revenue Code 427. provides that a transferee ("Buyer") of a United States real property interest must be notified in writing and must withhold 428. tax if the transferor (Seller") is a foreign person and no exceptions from FIRPTA withholding apply. Buyer and Seller 429. agree to comply with FIRPTA requirements under Section 1445 of the Internal Revenue Code. 430. Seger shall represent and warrant, under the penalties of perjury, whether Seller is a "foreign person" (as the same 431. Is defined within FIRPTA), prior to closing. Any representations made by Seller with respect to this issue shall survive 432. the closing and delivery of the deed. 433. Buyer and Seller shall complete, execute, and deliver, on or before closing, any instrument, affidavit, or statement 434. reasonably necessary to comply with the FIRPTA requirements, including delivery of their respective federal taxpayer 435. identification numbers or Social Security numbers. 436. Due to the complexity and potential risks of failing to comply with FIRPTA, including the Buyer's responsibility for 437. withholding the applicable tax, Buyer and Seller should seek appropriate legal and tax advice regarding FIRPTA 438. compliance, as the respective llcansWe representing or asslsdng either party will be unable to assure either 439. party whether the transaction is exempt from FIRPTA withholding requirements. 440. EWIREAGREEMEflT: This Purchase Agreement and any addenda or amendments signed by the parties shall 441. constitute the entire agreement between Buyer and Seller. Any other written or oral communication between Buyer and 442. Serer, including, but not limited to, e-mails, text messages, or other electronic communications are not part of this 443. Purchase Agreement. This Purchase Agreement can be modified or canceled only in writing signed by Seller and 444. Buyer or by operation of law. All monetary sums are deemed to be United States currency for purposes of this Purchase 445. Agreement. MN:PA-10 (0/18) M i a N R 5 0 T A A REALTORS InslanetFORMS AuthentisignID: 394A2045-B428-48B4-BD42-9C55657C8F76 447. Property located at 3924 ntah Avenue N PURCHASE AGREEMENT 446. Page ll Date ii a e NewSope NN 55427 448. ELEQjRQNICJj0LNATUM. The parties agree the electronic signature of any party on any document related to this 449. transaction constitute valid, binding signatures. 450• KNAL ACCEETAKU: To be binding, this Purchase Agreement must be fully executed by both parries and a copy 451. must be delivered. 452. SURVIVAL: All warranties specified in this Purchase Agreement shall survive the delivery of the deed or contract 453. for deed. 454. MER: Seller does not have to complete the City of New Hope Code Compliance 455. repair items . 456. 457- The purchase agreement is contingent on the following: 468. Review and approval of the terms of the Purchase Agreement by the New 459. Hope City Council; '460• If the above contingency in not met, Buyer may declare this Purchase 461. Agreement cancelled by written notice to Seller, or licensee representing or assisting Seller, in which case this purchase agreement 462. is cancelled. If Buyer declares this Purchase Agreement cancelled due 463 to the failure of the above contingency, Buyer and Seller shall immediately sign a Cancellation of Purchase lgreement confirming said 464.cancellation and directing all earnest money paid hereunder to be 465 refunded to Buyer. 467. 468. 469. A20NfZ: The following addenda are attached and made a part of this Purchase Agreement. 470. NOTE: Disclosures and optional Arbitration Agreement are not part of this Purchase Agreement. 471. ❑ Addendum to Purchase Agreement 472. ❑ Addendum to Purchase Agreement Assumption Financing 473. ❑ Addendum to Purchase Agreement: Buyer Move -in Agreement 474. © Addendum to Purchase Agreement Buyer Purchasing "As Is" and Limitation of Seller Liability 475. ❑ Addendum to Purchase Agreement CondominiumITownhouselCooperadve Common Interest Community 476. MIC") 477. ❑ Addendum to Purchase Agreement: Contrect for Deed Financing 478. © Addendum to Purchase Agreement- Disclosure of information on Lead -Based Paint and Lead -Based Paint 479. Hazards 480. ❑ Addendum to Purchase Agreement Sale of Buyers Property Contingency 481. ❑ Addendum to Purchase Agreement Seller's Rent Back Agreement 482. ❑ Addendum to Purchase Agreement Short Sale Contingency 483. ❑ Addendum to Purchase Agreement: Subsurface Sewage Treatment System and Well Inspection Contingency MN:PA-11 (6118) REALTORS InStOnetFORMS Authentlslgn ID: 394A2045-B428-48B4.BD42.9C55657C8F16 485. Property located at 3924 17t+Lt Avenue V 486. 1 agree to sell the Property for the price and on the 487. terms and conditions set forth above. 488. 1 have revliswed all pages of this Purchase 489. Agreement. 490. [k If chocked, this Purchase Agreement Is subject to 491. attached Addendum to Purchase Agreement: 492. Counteroffer. 493. PTA: Seller represents and warrants, under penalty 494. of perjury, that Seller❑ IS [?IS NOT a foreign person (i.e., a 495. non-resident alien individual, foreign corporation, foreign 496. partnership, foreign trust, or foreign estate for purposes of 497. Income taxation. (See fines 426-439.)) This representation 498. and warranty shall survive the closing of the transaction 499. and the delivery of the deed. Avlhn rt9S 5 c-: 500. X `sae 0. Sbnonoo �- 11/16/2018 PM CST (Daft) Rae D. Simonson 501. x (Sallart Printed Name) 502. X (Marital status) 603. X (Selwa signature) (Date) 504: X (Seller's Printed Name) 505. X (Marital Status) PURCHASE AGREEMENT 484. Page 12 Date 11/09/2018 New Hope tar 55427 I agree to purchase the Property for the price and on the terms and conditions set forth above. 1 have reviewed all pages of this Purchase Agreement. X 31�p( "A � (says 6 Sigrtaltlfe) (Date) r XM L � (Buy" Printed Name) X (Marital Status) X (Buyer's Signature) X (Buyses Printed Name) X (Mwftl Status) (Date) 506. FINAL ACCEPTWICCE DATE: The Final Acceptance Date 507. is the date on which the fully executed Purchase Agreement is delivered. 508. THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLER(S). 509. IF YOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. 510. 1 ACKNOWLEDGETHAT I HAVE RECEIVED AND HAVE HADTHE OPPORTUNITYTO REVIEWTHE DISCLOSURE 511. STATEMENT ARBITRA7ION DISCLOSUREAND RESfDENTTAL REAL PROPERTYARBITRATIONAGiREEMENT, 512. WHICH IS AN OPTIONAL, VOLUNTARY AGREEMENT AND IS NOT PART OF. HIS PURCHASE A EMENT. Auiiwr,li 11 /16/2018 513. SI LLFzR(51-5?= 2. S 60n BU1/ER(S) 11/16M010 2:4332 PM CST 514. SELLER($) - BUYER(S) MWA-12 (8118) 4 N I N M i 8 n= A REALTORS InstanefFoRms Authentisign ID: 394A2045.B426-4BB4-BD42-9C55657CBF76 Internet fraud — the use of Internet services or software with Internet access to defraud victims — is on the rise in real estate transactions. THESE SOPHISTICATED CRIMINALS COULD: • HACK INTO YOUR E-MAIL ACCOUNT or the e-mail of others involved in your real estate transaction and may direct you to wire money to the hacker's account. • SEND FRAUDULENT E-MAILS that appear to be from your real estate licensee, lender, or closing agent. ■ CALL YOU claiming they have revised wiring instructions. Buyerarrenants and Sellers/Owners are advised to: (1) Never wire funds without confirming the wiring instructions directly with the intended recipient. (2) Verify that the contact information for the wire transfer recipient is legitimate by calling a known phone number for the broker or closing agent. Do not rely on the information given to you in an e-mail communication. (3) Never send personal information through unsecured/unencrypted e-mail. If you suspect wire fraud in your transaction: (1) Immediately notify your bank, closing agent, and real estate licensee. (2) File a complaint online at the Internet Crime Complaint Center (IC3) at httpJ/www_ic3.gov. The undersigned acknowledge receipt of this wire fraud alert and understand the importance of taking proactive measures to avoid being a victim of wire fraud in a real estate transaction. Authentisw Am 9 Shnanean 11 /16/2018 i62:i32v Pin CST (Date) {Signature) This corm approved by the Minnesota Association of REALTORS•, which disclaims any liability arising out of use or misuse of this form. ® 2018 Minnesota Association of REALTORS•, Edina, MN MN-WFA (8/18) (Date) Instant k,,, s AuthentislgnID: 394A2045-B428.48B4.BD42.9C55657CBF16 000' ADDENDUM TO PURCHASE AGREEMENT: BUYER PURCHASING "AS IS" AND LIMITATION OF SELLER LIABILITY This 6" approved by the Nlinnssola Association 0 FtEALTflRSc. �YYIIaWoRIlR 4 whft djwWJM any ksbaity ark*V OW of use or misuse of Itti8 form, O 2017 Vinn9auu A6saaation o1 REAt.TOnSo. Edina. MN 1. Date xolz'al7aia 2. Pagel 3. IN THE EVENT SELLER HAS COMPLETED, AND BUYER HAS RECEIVED, A 4. SELLER'S PROPERTY DISCLOSURE STATEJWENT, DQ NOT USE THIS 5. A DENDUM WITHOUT FIRST SEEKING LEGAL ADVICE. 6. Addendum to Purchase Agreement between parties, dated , 20 7. pertaining to the purchase and sale of the Property located at 3924 Utah Ave N 8. New 8o NN 55427 g i The Property is being sold In Its existing condition. Buyer acknowledges that the Property, 10. including all improvements, Is being sold on an "As -is" and `Where -Is" basis, with all existing reults. Prior to closing, 11. Buyer will make such inspections of the Property as are consistent with the terms of this Purchase Agreement in order 12. to sati* Buyer as to the condition of the Property. The Seller warranties contained in the Purchase Agreement shall 13. remain unmodified by this Addendum. 14. The "Risk of Loss" provisions of the Purchase Agreement shall remain unmodified by this Addendum., 15. Seller and Buyer shaft execute a Disclosure Statement Seller'sD sc{oesure Aftemafteswith the "Waive?'section completed. 16. Sellerrernains obligated to make `Other Required Disclosures" in the Ddsclosure Stahvrmnt: S68errs D[wkxure Altermlivas. 17. ExcW for "Older Required Disclosures," Buyer acknowledges that Seller has not made any oral or written representations 18. regarding the condition of the Property subject to this Purchase Agreement. By accepting delivery of the deed at dosing, 19. Buyer will be deemed to have accepted the condition of the Property subject to this Purchase Agreement as satisfactory 20. to Buyer, and Seller shall have no liability with respect to the Condition of such Property. Buyer waives any claims 21. related in any wary to the condition of the Property. 22. W I • THIS ADDENDUM WILL AFFECT THE LEGAL RIGHTS OF BUYER 23. AND SELLER. BUYER AND SELLER ARE STRONGLY ENCOURAGEDTO OBTAIN 24. LEGAL ADVICE BEFORE AGREEING TO THIS ADDENDUM. 26. Seger) t �) (BUY" fDanel 26. Ie►l (oetel (Buret) loge) 27. THIS IS A LEGALLY BINDING CONTRACT BETWEEN BUYER(S) AND SELLERS). 28. IFYOU DESIRE LEGAL OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. MN:APAAI (8117) REALI"aRS Instonet Authentisign ID: 394A2045-B426-46134-BD42.9C55657CSF16 ADDENDUM TO PURCHASE AGREEMENT: DISCLOSURE OF INFORMATION ON LEAD -BASED PAINT AND LEAD -BASED PAINT HAZARDS Tries farm approved tyy the Minnesota Association of REALTl7RSO. which disclaims any liability arising out 01 use or Miswe of this farm. CI 2018 Minnesota Awociatban of REALTQRS4, 541na, MIN 1, Date io x91ze��e 2. Pagel 3. Addendum to Purchase Agreement between parties, dated , 20 4. pertaining to the purchase and sale of the property at 3924 Dtrah Ave IN 5. liar lei 55427 6. Lead Warning Statement 7. Every buyer of any interact in residentfail real property on which a residential dwelling was built prior to 1878 Is notified 8. that such property may present exposure to lead from lead -based paint that may place young children at risk of 9. developing lead poisoning_ Lead poisoning in young children may produce permanent neurological damage, including 10. learning disabilities, reduced intelligence quotlent, behavioral problems, and impaired memory. Lead poisoning also 11. poses a particular rrak to pregnant women. The seller of any interest in residential real property Is AVulred to provide 12. the buyer KIM any information on lean! -based paint hazards from risk assessments or inspections in the seller's 13. possession and notify the buyer of any known read -based paint hazards. A risk assessment or inspection for possible 14. lead -based paint hazards is recommended prior to purchase. 15. Saber's Disclosure (Check one.) 16. [ Seller has no knowledge of, or records or reports relating to, lead -based paint and/or lead -based paint hazards 17. in the housing. 18. ❑ Seller has knowledge of lead -based paint and/or loam -based paint hazards in the housing and has provided Buyer 19, with all available details, records, and reports, if any, pertaining to lead -based paint and/or lead -based paint hazards 20. in the housing. (Please explain and list documents below.): 21. 22. 23. 24. Buyar's Acknowledgment 25. Buyer has received copies of all information listed above. If any. 26. Buyer has received the pamphlet, Protect Your Family hom Lead in Your Home. 27. Buyer has (Check one.). 28. Waived the opportunity to conduct a risk assessment or inspection for the presence of lead -based paint and/or 29. lead -based paint hazards; or 30. ❑ Received a 10-day opportunity (or mutually agreed -upon period) to conduct a risk assessment or inspection for 31. the presence of lead -based paint and/or lead -based paint hazards. 32. If checked, this contract is contingent upon a risk assessment or an inspection of the property for the presence of lead- 33. based paint and/or lead -teased paint hazards to be conducted at Buyer's expense. The assessment or inspection 34. shall be completed within ❑ TEN (10) [] Calendar Days after Final Acceptance of the Purchase ... . {Chao* arm.) .» 35. Agreement. TM�-1 «/18) 4 REALTY Authentisign ID: 394A2045-B428-48B4.BD42-9C55657CBF16 ADDENDUM TO PURCHASE AGREEMENT: DISCLOSURE OF INFORMATION ON LEAD -BASED PAINT AND LEAD -BASED PAINT HAZARDS 36. Page 2 37. Property kxsted at 3924 ur.wt, aw a Now Rope tm 55427 38. This contingency shall be deemed removed, and the Purchase Agreement shall be in full force and effect, 39. unless Buyer or real estate licensee representing or assisting Buyer dellvars to Seiler or real estate licenses 40. representing or assisting Seiler, within three (3) Calendar Days after the assessment or inspection is timely 41. completed, a written list of the Specific deficiencies and the corrections required, together with a copy of any risk 42. assessment or inspection report. If Buyer and Seller have not agreed in writing within three (3) Calendar Days 43. after delivery of the written list of required corrections that. 44, (A) some or all of the required corrections will be made; or 46. (B) Buyer waives the deficiencies; or 46. (C) an adjustment to the purchase price will be made; 47. this Purchase Agreement is canceled. Buyer and Seller shall immediateiy sign a Cancellaflon of Purchase 48. Agreement confirming said cancellation and directing all earnest money paid here to be refunded to Buyer. It is 49. understood that Buyer may unilaterally waive deficiencies or defects, or remove this contingency, providing that 5o. Buyer or real estate licensee representing or assisting Buyer notifies Seller or real estate licensee representingor 51. assisting Seller of the waiver or removal, In writing, within the time specified, 52. Reel Estate Licensee's Acknowledgment 53. R" estate licensee has informed Seller of Seller's obligations under 42 U.S.C. 4852(d) and is aware of licensee's 54. responsibility to ensure compliance. 55. Certiflcatlon of Accuracy 56. The following parties have reviewed the information above and certify, to the best of their knowledge, that the Information 57. provided by the signatory is true and accurate. 5$. & - 10 YA maw ! C 1 (oars> (Buyer) (Dap) 59. (DR*) (Buyer) (Dees) S e llcerls�le) (Date) (Rasa Feta idctanow) (f)eee) TLX.,SALE-2 (0/1e) Authentislgn ID: 394A2045-B428-48B4-BD42.9C 8F46 DISCLOSURE STATEMENT: �M SELLER'S DISCLOSURE ALTERNATIVES This form aPPramd by the Minnesota Association of REALTORS•, which dMdalms any ligb4lity arising ocl of use fir rnL%wa of Ihis form. 02016 Minnesota Association el REALTORS*, Edina. INN 1. Date io 29 2Qis 2. Page 1 of F pages: RECORDS AND 3. REPORTS, IF ANY, ARE ATTACHED AND MADE A 4. PART OF THIS DISCLOSURE S. Property located at 3924 Utah h Ave p 6. City of _ x�+r APPR , County of g*+�p1� , State of Minnesota. 7. NOTICE: Sellers of residential property, with limited exceptlons, are obligated to satisfy the requirements of MN Statutes 8. 513.52 through 513.60. To comply with the statute, Sutler must provide either a written disclosure to the 9. prospective Buyer (see Dhu*wvure Statwwrr[: Setlor�s Property t hWasure SUtarn 4 or satisfy one of the 10. following two options. Disclosures made here, if any, are not a warranty or guarantee of any kind by Seger or 11. liioensee(s) representing or assisting any party in this transaction and are not a substitute for any Inspections or 12. warranties the party(ies) may wish to obtain. 13. {S"WME p wpn only.) 14. 1) ❑ QUALIFIED THIRD -PARTY INSPECTION: Seller shall provide to prospective Buyer a written report that 16. discloses material Information relating to the real property that has been prepared by a qualified third party. 16. "Qualified third party" means a federal, state, or local governmental agency, or any person whom Seller or 17. prospective Buyer reasonably believes has the expertise necessary to meat the industry standards of practice 18. for the type of inspection or investigation that has been conducted by the third party in order to prepare the 19. written report, 20. Seller shall disclose to prospective Buyer msterhd facts known by Seller that contradict any information 21. that is included in a written report, or material facts known by Seiler that are not included In the 22. report. 23. The inspection report was prepared by 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. and dated ,20 Seller discloses to Buyer the following material facts known by Seller that contradict any information included in the above referenced inspection report, Seller discloses to Buyer the following material facts known by Seller that are not included in the above referenced inspection report. 34. 35. X 2) ® WAIVER: The written disclosure required may be waived if Seller and prospective Buyer agree in writing. Seller 37. and Buyer hereby waive the written disclosure required under MN Statutes 513.52 through 513.60. 38- NOTE: If both Seger and prospective Buyer agree, in writing, to waive the written disclosure required under 39. MN Statutes 513.52 through 513.60, Seller is not obligated to disclose ANY material facts of which Seller 40. is aware that could adversely and significantly affect the Buyers use or enjoyment of the property or any 41. intended use of the property, other than those disclosure requirements created by any other law. Seller is 42. not obligated to update Buyer on any changes made to material facts of which Seller Is aware that could 43. adversely and significantly affect the Buyer's use or enjoyment of the property or any intended use of the 44. property that occur, other than those disclosure requirements created by any other law. 45. Waiver of the disclosure required under MN Statutes 513.52 throw 513.60 does not , limtt, or 46. abridge any obligation for Seller disclosure created by any other 4 law. WALAMS MN:DS:SDA-1 (0/16) Instanet Authentisign ID:MA3045.8428-486A•SD4;;;J�jjC8F1G "i DISCLOSURE STATEMENT: mid"W"n,p SELLER'S DISCLOSURE ALTERNATIVES 47. Page 2 48. Property located at 3924 Utah AV* V Now so KH 55427 49. OTHER REQUIRED DISCLOSURES: 50• NOTE: In addition to electing one of the above alternatives to the material fact disclosure, Minnesota law also 51. requires sellers to provide other disclosures to prospective buyers, such as those disclosures listed below. 52• Additionally, there may be other required disclosures by federal, state, local, or other governmental entities 53. that are not listed below. 64. A. SUBSURFACE SEWAGE TREATMENT SYSTEM DISCLOSURE: (A subsurface sewage treatment system 55. disclosure is required by MN Statute 115.55.) (Check appropriate box.) 566, Seller certifies that Seller[] DOES FYI DOES NOT know of a subsurface sewage treatment system on or serving 57. the above -described real property. (If answer is DOES, and the system does not require a state permit, see 58. Disctosure Statement: Subsu► J208 Sewage Treatment System.) 59. ❑ There Is a subsurface sewage treatment system on or serving the above -described real property, 60. (See Disclosure Statement: Subsurface Sewage Treatment System.) 61. ❑ There Is an abandoned subsurface sewage treatment system on the above -described real property. 62. (See Disclosure Statement: Subsurface Sewage Treatment System.) 63. B. PRIVATE WELL DISCLOSURE: (A well disclosure and Certificate are required by MN Statute 1031.235.) 64. (Check appropriate box.) 65. ® Seiler certifies that Gaper does not know of any wells on the above -described real property. 66. ❑ Seller certifies there are One ar more wells located on the above -described real property. 67. (See Disclosure Statement- Well.) 68. Are there any wells serving the above -described property that are not located on the property? ❑ Yes ❑ No 69. To your knowledge, is the property In a Special Well Construction Area? []Yes ❑ No 70. Comments: 71. 72. C. VALUATION EXCLUSION DISCLOSURE: (Required by MN Statute 273.11, Subd.18) 73. There ❑ IS Z IS NOT an exclusion from market value for home improvements on this property. Any valuation MW&CM3 - 74. exclusion shall terminate upon sale of the property, and the property's estimated market value for property tax purposes 75. shall increase. If a valuation exclusion exists, Buyers are encouraged to look Into the resulting tax 76. consequences. 77, Additional comrnents: 78. 79. D. FOREIGN INVESTMENT IN REAL PROPERTYTAX ACT ("FIRPTA"): Section 1446 of the Internal Revenue Code s0. provides that a transferee ("Buyee) of a United States real property Interest must be notified In writing and must al. withhold tax If the transferor ("Seller") Is a foreign person and no exceptions from FIRPTA withholding apply. 82. Seller represents that Seller❑ ISMS NOT a foreign person (i.e., a non-resident alien Individual, foreign corporation, ( okra.}-- 83. foreign partnership, foreign trust, or foreign estate) for purposes of income taxation. This representation shall 84. survive the closing of any transaction involving the property described here. 85. NOTE: If the above answer Is "IS, Buyer may be subject to income tax withholding in connection with the 86. transaction (unless the transaction is covered by an applicable exception to FIRPTA withholding). In 87. nosy -exempt transactions, Buyer may be liable for the tau if Buyer fails to withhold. Be. H the above answer Is "IS NOT, Buyer may wish to obtain specific documentation from Seller ensuring 89. Buyer is exempt from the withholding requirements as prescribed under Section 1445 of the Internal 90. Revenue Code. 91. Due to the complexity and potential risks of failing to comply with FIRPTA, including Buyer's responsibility 92. for withholding the applicable tax. Buyer and Seller should seek appropriate legal and tax advice regarding 93, FIRPTA compliance, ens the respective licensees reprssanting or assisting either party will be unable to 94. "sum either party whether the transaction Is exempt from the FIRPTA withholding requl uts w " NtN:Ds:sDA-2 (8/16) 7TREALY151119 Authentisign ID: 394A2045.B42848B4-BD4;-9 F4G "11111 Mkkvsmft KTJ 97. 98. 99. 100. 101. DISCLOSURE STATEMENT: SELLER'S DISCLOSURE ALTERNATIVES 95. Page 3 Properly located at 3924 Utah Aw B N�►r Ho JOIN 53427 E. METHAMPHEl•AMINE PRODUCTION DISCLOSURE: (A methamphetarnine production disclosure is required by MN Statute 152.0275, Subd. 2 (m).) [] Seller is not aware of any metharnphetamine production that has occurred on the property. ❑ Seiler is aware that mathamohataminlq nrMi iNlmn trot .. 4 ......._ ____ _ s . 102. F. RADON DISCLOSURE: 103. (The following Seller disclosure satisfies MN Statute 144.496.) 104. RADON WARNING STATEMENT: The Minnesota Department of Health strongly recommends that ALL 105. hoMetuyers have an indoor radon test performed prior to purchase or taking Occupancy, and reoornrnends having 106. the radon levels mitigated if elevated radon concentrations are found. Elevated radon concentrations can easily 107. be reduced by a quaiif"ied, certified, or licensed, if applicable, radon mitigator. 108. Every buyer of any interest in residential real property is notified that the property may present exposure to 109. dangerous levels of indoor radon gas that may place occupants at risk of developing radon -induced lung cancer. 110. Radon, a Class A human carcinogen, Is the leading cause of lung cancer in nonsmokers and the second leading ill, Cause overall. The seller of any interest in residential real property Is required to provide the buyer with any 112. information on radon lest results of the dwelling. 113. RADON IN REAL ESTATE: By signing this Statement, Buyer hereby acknowledges receipt of the Minnesota 114. Department of Health's publication entitled Radon In Riml Estate 7ianssct'lons, which is attached hereto and 115. can be found at www.heakh-state.mn.ua(divs/eh/indoondr/radoNmroalestatoweb.pclf. 116. A seller who falls to disclose the information required under MN Statute 144,496, and is aware of material facts 117. pertaining to radon concentrations In the property, is liable to the Buyer. A buyer who is injured by a violation of MN 118. Statute 144.496 may bring a civil action and recover damages and receive other equitable relief as "ermined by 119. the court. Any such action must be commenced within two years after the date on which the buyer closed the 120. purchase or transfer of the real property. 121. SELLER'S REPRESENTATIONS: The following are representations made by Sellerto the extent of Seller's actual 122. knowledge. 123. (a) Radon test(s) [I HAVE ©HAVI= NOT occurred on the properly. 124. (b) Describe any known radon concentrations, mitigation, or remediation. NOTE: Seller shall attach the most 125. current records and reports pertaining to radon oonaerttratlart within the dwellirrp• t2s. 127. 128. 129. (c) There ❑ IS ®IS NOT a radon mitigation system currently installed on the property. 130. M 98"Seller shall disclose, if known. information regarding the radon mitigation system, including system 131. description and documentation. 132. 133. 134. 135. G. NOTICE REGARDING AIRPORT ZONING REGULATIONS: The property may be in or near an airport safely zone 136. with zoning regulations adopted by the governing body that may affect the property. Such zoning regulations are 137. filed with the county recorder In each county where the zoned area Is located. If you would like to determine If such 138. zoning regulations affect the property, you should contact the county recorder where the zoned area is located. MN:QS:SDA-3 (0/16) �, REALTQRS Instanet Authentisign ID: 394A2045-B42848B4-BD42.9L'S DISCLOSURE STATEMENT: SELLER'S DISCLOSURE ALTERNATIVES 139. Page 4 140. Property located at 3924 Utah Ave H Now Hope iAd 53427 141. H. NOTICE REGARDING CARBON MONOXIDE DETECTORS: 142. MN Statute 299F51 requires Carbon Monoxide ❑ejectors to be located within ten (10) feet from all sleeping 143. rooms. Carbon Monoxide Detectors may or may not be personal property and may or may not be included in the 144. sale of the home. 145. I. WATER INTRUSION AND MOLD GROWTH: Studies have shown that various forms of water intrusion affect many 146. homes. Water intrusion may occur from exterior moisture entering the home and/or interior moisture leaving the 147. home. 148. Examples of exterior moisture sources may be 149. • improper flashing around windows and doors, 150. 8 Improper grading, 151. • flooding, 152. • roof leaks. 153. Examples of Interior moisture sources may be 154. G plumbing leaks, 155. V condensation (caused by indoor humidity that is too high or surfaces that are too cold), 156. overflow from tubs, sinks, or toilets, 157. firewood stored Indoors, 158. d humidifier use, 169. • inadequate venting of kitchen and bath humidity, 160. improper venting of clothes dryer exhaust outdoors (including electrical dryers), 161, line -drying laundry indoors, 162. houseplants -watering them can generate large amounts of moisture. 163. In addition to the possible structural damage water intrusion may do to the property, water intrusion may also result 164. in the growth of mold, mildew, and other fungi. Mold growth may also cause structural damage to the property. 165. Therefore, it is very important to detect and remediate water Intrusion problems. 166. Fungi are present everywhere In our environment, both indoors and outdoors. Many molds are beneficial to humans. 167. However, molds have the ability to produce myootoxins that may have a potential to cause serious health problems, 168. particularly in some immun000mpromised individuals and people who have asthma or allergies to mold. 169. To complicate matters, mold growth is often difficult to detect, as it frequently grows within the wall structure. If you 170. have a concern about water Intrusion or the resulting mold/mildow/fungi growth, you may want to consider having 171. the property inspected for moisture problems before entering into a purchase agreement or as a condition of your 172. purchase agreement. Such an analysis is particularly advisable If you observe staining or any musty odors on the 173. property. 174. J. NOTICE REGARDING PREDATORY OFFENDER INFORMATION: Information regarding the predatory 175. offender registry and persons registered with the predatory offender registry under MN Statute 243.166 178. may be obtained by contacting the local low enforcement offices In the community where the property Is 177. located orthe Minnesota Department of Corrections at (651) 361 7200, orfrom the Department of Corrections 178. web site at www corn state.mmus. WDSADA-4 (1r18) 4 RHEA RSA Insi ones. Authen8signID: 394A2045.8428-48B4.BDC2.9 DISCLOSURE STATEMENT. SELLER'S DISCLOSURE ALTERNATIVES 179. Page 5 180. Property located at 3924 uttb Ilya N now yopo M 55427 181. K. SELLER'S STATEMENT: 182. (Ta be signed at time of lisu ng.) 183. Sailers) hereby authorizes any licensee(s) representing or assisting any party(les) in this transaction to provide 184. a copy of this Disclosure Statement to any person or entity in connection with any actual or anticipated sale of the 185. property. A seller may provide this Disclosure Statement to a real estate licensee representing or assisting a 186, prospective buyer. The Disclosure Statemant provided to the real estate licensee representing or assisting a 187. prospective buyer is considered to have been provided to the prospective buyer. If this Disclosure Statement is 188. provided to the real estate licensee representing or assisting the prospective buyer, the real estate licensee must 189. provide a COPY to the prospective buyer. 190. QUALIRED THIRD -PARTY INSPECTION. it Seller has made a disclosure under the Qualified Third -Party 191. Inspection, Seller is obligated to disclose to Buyer in writing of any new or changed facts of which Seller is aware 192. that could adversely and significantly affect the Buyer's use or enjoyment of the property or any intended use of 193. the property that occur up to the time of clooing. To disclose new or changed facts, please use the Amendment to 194. Disclosure Statement form. 195. WAIVER: It Seller and Buyer agree to waive the seller disclosure requirement, Seller is NOT obligated to disclose 196. and will NOT disclose any new or changed information regarding facts. 197. OTHER REQUIRED DISCLOSURES(Seatkmv A-F): Whether Seller has elected a Qualified -Third Party Inspection 198. or Waiver, Sailer Is obligated to notify Buyer, in writing, of any new or changed facts regarding Other Required 199. Disclosures up to the time of closing. To disclose new or changed facts, please use the Amendmanl to Seller's 200. Disclosure forrn. 201.�,�� ("W) 202. L BUYER'S ACKNOWLEDGEMENT: 203. (To be signed at time of purse agreement) (09") 204. VWe, the Buyers) of the property, acknowledge receipt of this Seller's Disclosure Alternatives form and agree to 205. the seller's disclosure option selected in this form. I/We further agree that no representations regarding facts have 206_ been made, other than those made In this form. This Disclosure Statement is not a warranty or a guarantee of 207. any kind by Seller or licensee representing or asalatiN any party in the transaction and is not a suitable substitute 208. for any inspections or warranties the party(ies) may wish to obtain. 209. The information disclosed is given to the best of the Seller's knowledge. 210. (earn (om.) (et►yer)-_..... _. r.._ (oared 211. LISTING BROKER AND LICENSEES MAKE NO REPRESENTATIONS HERE AND ARE 212. NOT RESPONSIBLE FOR ANY CONDMONIS EXISTING ON THE PROPERTY. Nln1:DS.SDA-5 (8/16) RtEALTORS if lnstonetl AuthenBslgnID: 394A2045•B42848B4-BD42-9C55657CBF16 Radon in Real Estate Transactions All Minnesota homes can have dangerous levels of radon gas. Radon is a colorless, odorless and tasteless radioactive gas that can seep into homes from the soil. When inhaled, It can damage the lungs- Long-term exposure to radon can lead to lung cancer. About 21,000 lung cancer deaths each year in the United States are caused by radon. The only way to know how much radon gas has entered the home is to conduct a radon test. MDH estimates 2 in 5 homes exceed the 4.0 pCi/L action level. Whether a home is old or new, arty home can have high levels of radon. The purpose of this publication is to educate and inform potential home buyers of the risks of radon exposure, and how to test for and reduce radon as part of real estate transactions. DisdosmIre Reui men s Effective January 1, 2014, the Minnesota Radon Awareness Act requires specific disclosure and education be provided to potential home buyers during residential real estate transactions in Minnesota. Before signing a purchase agreement to sell or transfer residential real property, the seller shall provide this publication and shall disclose In writing to the buyer: 1. whether a radon test or tests have occurred on the property, 2- the most current records and reports pertaining to radon concentrations within the dwelling; 3. a description of any radon levels, mitigation, or remediation; 4. Information on the radon mitigation system, if a system was installed; and 5. a radon warning statement. Radom Facts Now dangerous is radon? Radon is the number one cause of lung cancer in non-smokers, and the second leading cause overall. Your risk for lung cancer increases with higher levels of radon, prolonged exposure, and whether or not you are a current smoker or former smoker. Where is your greatest exposure to radon? For most Minnesotans, your greatest exposure is at home where radon can concentrate indoors. What Is the recommended action based on my resuhx? If the average radon in the home is at or above 4.0 pCi/L, the home's radon level should be reduced. Also, consider mitigating if radon levels are between 2.0 pCVL and 3.9 pCi/L. Any amount of radon, even below the recommended action level, carries some risk. MDH Radon Program PO Box 64975 St Paul, MN 55164-0975 Minnesota health.indoor@state.mn.us Department of Health www.health.state.mn.us/radon INDOOR AIR UNIT 651-201-4601 800-798-9050 h ALym Instanet- :. e Authentislgn ID: 394A2045-B428-46B4-BD42-9C55657CBF16 Radon Testing Any test lasting less than three months requires closed -house conditions. Keep all windows and doors closed, except for normal entry and exit. Before testing: Begin closed -mouse conditions at least 12 hours before the start of the radon test. During testing: Maintain ciased-house conditions during the entire duration of the short-term test. Operate home heating or cooling systems normally during the test, zest for at least 48 hours, Where should the test be conducted? Any radon test conducted for a real estate transaction needs to be placed in the lowest livable area of the home suitable for occupancy. This is typically in the basement, whether finished or unfinished. Place the test kit: ■ twenty inches to six feet above the floor • at least three feet from exterior walls four inches away from other objects ■ in a location where it won't be disturbed ■ not in enclosed areas or areas of high heat or humidity Radon Mitt tion Now are radon tests conducted in real estate transactions? There are special protocols for radon testing, The two most common ways to test are either using a calibrated continuous radon monitor (CRM) or two -short term test kits used at the same time. The short-term test kits are placed 4 inches apart and the results are averaged. Fastest Second Fastest Ica __jVbJ All radon tests should be conducted by a certifled professional. This ensures the test was conducted Properly, in the correct location, and under appropriate building conditions. A list of these radon measurement professionals can be found at MDH's Radon website. If the seller previously conducted testing in a property at or above 4 pCVL, the home should be mitigated. When elevated levels of radon are found, they can be easily reduced by a certified radon mitigation Professional. Radon mitigation is the process used to reduce radon concentrations in buildings. This is done by drawing soil gas from under the house and venting it above the roof. A quality mitigation system should reduce levels to below 4.0 pCi/L, If not lower. After a radon mitigation system Is installed perform an independent short-term test to ensure the reduction system is effective. Operate the radon system during the entire test. This test will confirm low levels in the home. Be sure to retest the house every two years to confirm continued radon reduction. Radon in t t "The Minnesota Department of Health strongly recommends that ALL homebuyers have an indoor radon test performed prior to purchase or taking occupancy, and recommends having the radon levels mitigated if elevated radon concentrations are found. Elevated radon concentrations can easily be reduced by a qualified, certified, or licensed, if applicable, radon mitigator. Every buyer of any interest in residential real property is notified that the property may present exposure to dangerous levels of indoor radon gas that may place the occupants at risk of developing radon -induced lung cancer. Radon, a Class human carcinogen, Is the leading cause of lung cancer in nonsmokers and the second leading cause overall. The seller of any interest in residential real property is required to provide the buyer with any information on radon test results of the dwelling" 4 „ , N E o T REACTORS Instanet :•