A.    The first time home buyer shall verify on a form provided by the planning director that the restricted unit being purchased is for use as the buyer’ s principal residence and that the buyer is either a lower income household, very low income household or a senior household. If the restricted unit ceases to function as the owner’ s principal residence, it shall be sold according to the requirements of the resale controls. If evidence is presented to the planning director that the owner is unable to continuously occupy the restricted unit because of illness or incapacity, the planning director may approve rental of the restricted unit to a very low income household, lower income household, or senior household.

    B.    The resale controls will place limits on the resale price of a restricted unit and on the income of the new buyer. The resale price of a restricted unit will be limited to the original price of the restricted unit, plus a factor of appreciation equal to the annual increase in the median income, plus the appraised value, at time of sale, of any documented capital improvements. In addition, when an owner sells a restricted unit, the sale must be to a very low income household, lower income household, or senior household.

    C.    Resale controls shall be recorded as part of the declaration of covenants, conditions, and restrictions on the restricted unit. The resale controls will remain in effect for the term of affordability.

    D.    The following transfers of title or any interest therein are not subject to the provisions of this section, provided, however, that the resale controls shall continue to run with the land following such transfers: transfers by gift, devise, or intestate succession to the owner’ s spouse or children, and transfers of title to a spouse as part of a dissolution of marriage proceeding or in conjunction with marriage. (Prior gen. code §§ 8-407--8-407.4)