An owner is in default under the deed restriction in the event the owner conveys the property to an individual not eligible to own the property under the deed restriction, transferring the property prior to obtaining the Town’s certification of the transfer, failing to rent the property in accordance with the deed restriction or failing to make applicable mortgage payments. In the event Staff finds an owner in default under the deed restriction, the owner has sixty-five (65) days to cure the default, and may appeal to Town Council. The Town may pursue specific performance and other remedies at law in the event of default, and the owner will be subject to liquidated damages of $300 for each day the owner is in violation of the deed restriction.
In the event an owner defaults on their mortgage and the lender initiates foreclosure proceedings, the Town may make payments on behalf of the owner to avoid foreclosure. In the event of foreclosure, the deed restriction will remain in place, except if the property is subject to a HUD loan, in which case, pursuant to federal rules and regulations, the deed restriction is extinguished. However, the Town will have the option to purchase the property thirty (30) days after the issuance of the public trustee’s deed.