4571.4

Appendix 14

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INSTRUCTION FOR LEASEHOLD 811 PROJECTS

The lease must be on the fee. It must have at least 75 years to

run from the date of the capital advance. The annual ground rent

and the amount for which HUD may acquire the fee in the case of

acquisition of the leasehold by the Department must be approved

by HUD. The lease must contain nothing in conflict with Section

811 requirements and otherwise be satisfactory to HUD and must

include the following provisions:

LEASE ADDENDUM SECTION 811

(Lessor - Lessee)

Notwithstanding any other provisions of this lease, if and so

long as this leasehold is subject to a Section 811 Mortgage held

by the Secretary of Housing and Urban Development (HUD), or given

to the Secretary of HUD in connection with a resale, or the

demised premises are acquired and held by him because of a

default under said mortgage:

\(1\) The Lessee is authorized to obtain a Section 811

Capital Advance from the Secretary of HUD, secured by a mortgage

on this leasehold estate. Lessee is further authorized to

execute a mortgage on the lessehold and otherwise to comply with

the requirements of HUD for obtaining a mortgage.

\(2\) The Secretary of HUD, or his successors in office,

shall have the option in the event that he or his successor in

office shall acquire title to the leasehold estate, to purchase

good and marketable fee title to the demised premises, free of

all liens and encumbrances except such as may be waived or

accepted by him or his successor in office, within twelve (12)

months after so acquiring the leasehold estate, for the sum of

\$\_\_\_\_\_\_\_\_\_ payable in cash or by certified or U.S. Treasury

check, provided all rents are paid to date of transfer of title,

upon first giving sixty (60) days written notice to the Lessor or

other person or corporation who may then be the owner of the fee,

and the owner of the fee shall thereupon execute and deliver to

the Secretary, or his successor in office, a deed of conveyance

to the demised premises, containing a covenant against the

grantor\'s acts, but excepting therefrom such acts of the Lessee

and those claiming by through or under the holder of the

leasehold estate. Nothing in this option shall require the

Lessor to pay any taxes or assessments which were due and payable

by the Lessee.

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4571.4

Appendix 14

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\(3\) If approved by the Secretary of HUD, Lessee may assign,

transfer or sell its interest in the demised premises.

\(4\) (a) Insurance policies shall be in an amount, and by

such companies, and in such form, and against such risks and

hazards, as shall be required by the mortgagee and/or the

Secretary of HUD.

\(b\) The Lessor shall not take out separate insurance

concurrent in form or contributing in the event of loss with that

specifically required to be furnished by the Lessee to HUD. The

Lessor may at its own expense, however, take out separate

insurance which is not concurrent in form or not contributing in

the event of loss with that specifically required to be.

\(5\) (a) If all or any part of the demised premises shall

be taken by condemnation that portion of any award attributable

to the improvements, or damage to the improvements, shall be paid

to the mortgagee or otherwise disposed of as may be provided in

the mortgage. Any portion of the award attributable solely to

the taking of the land shall be paid to the Lessor. After the

date of taking, the annual ground rent shall be reduced ratably

by the proportion which the award paid to the Lessor bears to the

total value of the land as established by the amount the

Secretary of Housing and Urban Development would be required to

pay upon acquisition of the fee.

\(b\) In the event of a negotiated sale of all or any

portion of the demised premises in lieu of condemnation, the

proceeds shall be distributed and ground rents reduced as

provided in cases of condemnation, but the approval of the

Secretary of HUD shall be required as to the amount and division

of the payment to be received.

\(6\) The Lessor agrees that, within ten (10) days after

receipt of written request from the Lessee, it will join in any

authorizations required by any governmental or other body

claiming jurisdiction in connection with any work which the

Lessee may do hereunder, and will also join in any grants for

easements for electric, telephone, gas, water, sewer and such

other public utilities and facilities as may be reasonably

necessary in the operation of the demised premises or of any

improvements that may be erected thereon, and if at the

expiration of such ten (10) day\'s period, the Lessor shall not

have joined in any such application, or grants for easements, the

Lessee shall have the right to execute such application and

grants in the name of the Lessor, and, for that purpose, the

Lessor hereby irrevocably appoints the Lessee as its Attorney-in-fact

to execute such papers on behalf of the Lessor.

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4571.4

Appendix 14

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\(7\) Nothing in this lease contained shall require the

Lessee to pay any franchise, estate, inheritance, succession,

capital levy or transfer tax, or any other tax, assessment,

charge or levy upon the rent payable by the Lessor under this

lease.

\(8\) Upon any default under this lease which authorizes the

cancellation thereof by the Lessor, Lessor shall give notice to

the Secretary of HUD, and the Secretary of HUD, his successors

and assigns, shall have the right any time within six (6) months

from the date of such notice to correct the default and reinstate

the lease unless Lessor has first terminated the lease as

provided herein.

At any time after two (2) months from the date a notice of

default is given to the Secretary of HUD, the Lessor may elect to

terminate the lease and acquire possession of the demised

premises. Upon acquiring possession of the demised premises,

Lessor shall notify the Secretary. The Secretary shall have six

\(6\) months from the date of such notice of acquisition to elect

to take a new lease on the demised premises. Such new lease

shall have a term equal to the unexpired portion of the term of

this lease and shall be on the same terms and conditions as

contained in this lease, except that the Secretary\'s liability

for ground rent shall not extend beyond his occupancy under such

lease. The Lessor shall tender such new lease to the Secretary

within thirty (30) days after a request for such lease and shall

deliver possession of the demised immediately upon execution of

the new lease. Upon executing a new lease, the Secretary shall

pay to Lessor any unpaid ground rentals due or that would have

become due under this lease to the date of execution of the new

lease, including any taxes which were liens on demised premises

and which were paid by Lessor, less any net rentals or other

income which Lessor may have received on account of this property

since the date of default under the lease.

\(9\) All notices, demands and requests which are required to

be given by the Lessor, the Lessee, or the Secretary shall be in

writing and shall be sent by registered or certified mail,

postage prepaid, and addressed to: \_\_\_\_\_(Insert Field
Office\_\_\_\_\_\_

Address)\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

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unless a request for a change in this address has been sent to

the party giving the notice by registered or certified mail prior

to the time when such notice is given.

\(10\) This lease shall not be modified without the consent of

the Secretary of Housing and Urban Development.

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