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Section 5.2 ManaizematAgent,• Periodic R orts. <br />(a) The Affordable Units shall at all times be managed by an experienced <br />management agent, with demonstrated ability to operate residential facilities like the Affordable <br />Project in a first class, decent, safe, and sanitary manner. The Owner shall for the entire Term of <br />this Agreement ensure that the management agent of the Affordable Project has demonstrated <br />experience and ability in operating and managing similar mixed -income housing projects in the <br />State of California and not less than two (2) years' experience with resident income certification <br />procedures outlined in Article 3 or similar experience ("Management Agent"). Notwithstanding <br />anything to the contrary herein, if the management agent does not meet the qualifications <br />specified above or the City and Owner agree that the management of the Affordable Units must <br />be transferred to another entity pursuant to Section 5.4(a) below, then the Owner shall contract <br />with a new management agent or subcontract with a management agent that: (a) is a California <br />entity whose primary business purpose is the construction, operation and management of <br />affordable multifamily housing, or an affiliate thereof; (b) has not less than two (2) years' <br />experience in owning, operating and managing affordable housing projects in the eleven county <br />San Francisco bay area; and (c) the proposed management agent has no record of defaults, <br />maintenance problems, housing or building code violations, or substantiated fair housing <br />complaints at properties it owns or operates. The Parties agree and acknowledge that the City <br />will have the right to disapprove a proposed management agent that has a record of defaults, <br />maintenance problems, housing or building code violations, and/or substantiated fair housing <br />complaints at properties it owns or operates. <br />(b) The initial management agent for the Affordable Units shall be identified <br />by the Owner at least ninety (90) days before the Owner commences leasing activities for the <br />Affordable Units. For any change in the Affordable Units Management Agent, the Owner shall <br />submit for the City's reasonable approval the identity of any proposed Affordable Units <br />Management Agent who meets the criteria in subsection (a) above. The Owner shall also submit <br />such additional information about the background, experience and financial condition of any <br />proposed Affordable Units Management Agent as is reasonably necessary for the City to <br />determine whether the proposed Affordable Units Management Agent meets the standard for a <br />qualified management agent set forth above. If the proposed Affordable Units Management <br />Agent meets the standard for a qualified management agent set forth above, the City shall <br />approve the proposed Affordable Units Management Agent by notifying the Owner in writing. <br />Section 5.3 Performance Review. In addition to the reporting requirements under <br />Section 3.2 above, the City reserves the right to conduct an annual (or more frequently, if <br />deemed reasonably necessary by the City) review of the management practices and financial <br />status of the Affordable Units. The purpose of each periodic review will be to enable the City to <br />determine if the Affordable Units are being operated and managed in accordance with the <br />requirements and standards of this Agreement. The Owner shall cooperate with the City in such <br />reviews. <br />Section 5.4 R lacement of Management A ent. <br />(a) If, as a result of a periodic review, the City determines in its reasonable <br />judgment that the Affordable Units are not being operated and managed in accordance with any <br />1199\10\3491196.8 16 <br />REV: 10-18-23 SK <br />