AMENDED AND RESTATED DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR MEADOW RIDGE CONDOMINIUM PROJECT MAMMOTH LAKES, MONO COUNTY, CALIFORNIA

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1 THIS DOCUMENT APPROVED AND RECOMMENDED BY THE MEADOW RIDGE CC&R COMMITTEE ON SEPTEMBER 22, 2009 AND UNANIMOUSLY APPROVED BY THE BOARD OF DIRECTORS ON OCTOBER 28, 2009 AND RECOMMENDED FOR ADOPTION BY THE OWNERS Recording Requested By And When Recorded Return To: Law Offices of Timothy B. Sanford P.O. Box 8081 Mammoth Lakes, CA AMENDED AND RESTATED DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR MEADOW RIDGE CONDOMINIUM PROJECT MAMMOTH LAKES, MONO COUNTY, CALIFORNIA, 2009 DMWEST # v31

2 TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS Articles Assessment Association Board; Board of Directors Bylaws Common Area Common Expenses Common Facilities Common Interest Condominium Condominium Plan Default Rate Eligible First Mortgagee Exterior Walls First Mortgage Foreclosure Improvements Invitees Land Manager Manager s Premises Member Mortgage Mortgagee Mortgagee Approval Official Person Official Records Owner; Owners Person Primary Deck Primary Entrance Door Project Project Documents Restricted Common Area Roof Rules and Regulations Secondary Entrance Door Town Unit Utility Facilities Voting Power... 7 DMWEST # v31 i

3 ARTICLE 2 DESCRIPTION AND DIVISION OF PROJECT AND CREATION OF PROPERTY RIGHTS Description of Project Units Common Area Rights of Entry and Use Partition Prohibited ARTICLE 3 ASSOCIATION, ADMINISTRATION, MEMBERSHIP AND VOTING RIGHTS Association to Manage Common Areas Board of Directors Membership Transfer of Memberships Voting Rights ARTICLE 4 MAINTENANCE AND ASSESSMENTS Creation of the Lien and Personal Obligation of Assessments Purpose of Assessments Assessments Restrictions on Regular or Special Assessments Effect of Nonpayment of Assessments Transfer of Condominium by Sale or Foreclosure Enforcement; Remedies; Priorities Unallocated Taxes ARTICLE 5 DUTIES AND POWERS OF THE ASSOCIATION Duties Powers Limitation of Liability; Indemnification ARTICLE 6 OBLIGATIONS OF OWNERS TO MAINTAIN AND REPAIR Utility Facilities Owner s Right and Obligation to Maintain and Repair Owners Compliance Mechanics Liens Taxes and Utilities Owner Liability For Damage Notice of Danger; Security Notification of Sale of Condominium ARTICLE 7 USE RESTRICTIONS Use of Units Time Sharing Offensive Activities Rubbish Vehicle Restrictions DMWEST # v31 ii

4 7.6 Flags and Signs Pets; Animals Architectural Control Antenna and Other Exterior Items Storage; Use of Balconies and Decks Exterior Fires; Gas Barbecues Only Flammable, Corrosive or Explosive Materials Power Equipment and Vehicle Maintenance Sports Apparatus Leasing Restrictions ARTICLE 8 INSURANCE Insurance Amount, Term and Coverage; Review of Policies; Carriers Payment of Deductible; Processing of Claims Authority of Board Owner Insurance Additional Provisions Regarding Insurance Policies Limitation of Liability Regarding Insurance ARTICLE 9 DAMAGE OR DESTRUCTION; EMINENT DOMAIN Initial Board Determination; Notice Reconstruction Without Election by Owners Repair or Reconstruction by Consent of Owners Assessments Obligation of Board When Rebuilding Determination Not to Rebuild Interior Damage Negotiations with Insurer Condemnation ARTICLE 10 GENERAL PROVISIONS Enforcement Alternative Dispute Resolution Invalidity of Any Provision Term Amendments Encroachment Rights Rights of Mortgagees Notices Fair Housing Conditional Use Permit Requirements DMWEST # v31 iii

5 This AMENDED AND RESTATED DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS is made as of, 2009, with reference to the following facts: A. This Amended and Restated Declaration ( this Declaration ) completely amends and completely restates that certain Meadow Ridge Homeowners Association Declaration of Covenants, Conditions and Restrictions dated as of August 10, 1979 recorded in the Official Records of Mono County, California (the Official Records ) on August 22, 1979 in Book 276, page 244 and re-recorded September 11, 1979 in Volume 277, Page 574, as previously supplemented and amended by (a) that certain Declaration by Subdivider dated May 2, 1980 recorded in the Official Records on May 5, 1980, in Volume 296, Page 426, (b) that certain undated First Amendment to Meadow Ridge Homeowners Association Declaration of Covenants, Conditions and Restrictions recorded in the Official Records on March 29, 1982 in Volume 351, Page 293, (c) that certain Second Amendment to Meadow Ridge Homeowners Association Declaration of Covenants, Conditions and Restrictions dated as of September 2, 1995 and recorded in the Official Records on December 12, 1997 in Volume 783, Page 319, and (d) that certain Third Amendment to Meadow Ridge Homeowners Association Declaration of Covenants, Conditions and Restrictions dated as of February 3, 1998 and recorded in the Official Records on April 14, 1998 in Volume 795, Page 552 (as so amended, re-recorded and supplemented, the Original Declaration ). B. Nothing in this Declaration shall supersede, modify or impair those grants of easement contained in the Original Declaration, which grants of easement shall remain in full force and effect except as may be specifically modified by this Declaration. Except as set forth in the previous sentence, the Original Declaration shall have no further force or effect whatsoever. C. The condominium project which is the subject of this Declaration is located in the Town of Mammoth Lakes, California. The land portion of the Project (as such term and certain other capitalized terms are defined in Article I; the Land ) is described in Exhibit A attached hereto. The Land has been improved by the construction thereon of fifty-one (51) condominium units, which (together with related appurtenances) have been sold and conveyed to various Persons subject to the basic protective covenants, conditions, restrictions, reservations, liens and charges set forth in the Original Declaration. Declaration. D. The Owners desire to completely amend and restate the Original NOW, THEREFORE, the Original Declaration is hereby amended to read in its entirety as follows: It is hereby declared that the entire Project is held and shall be held, conveyed, hypothecated, encumbered, leased, rented, used, occupied and improved subject to the following limitations, covenants, conditions, restrictions, reservations, liens and charges, all of which are hereby declared and established and agreed to be in furtherance of a general plan and scheme for the subdivision, development, improvement and sale of condominiums in a condominium project, as defined in Civil Code Sections 783 and 1351(f), and all of which are declared, DMWEST # v31

6 established and agreed upon for the purpose of enhancing and protecting the value, desirability and attractiveness of the Project and every part and portion thereof. All of said limitations, covenants, conditions, reservations, liens, charges and restrictions are hereby established and imposed upon the Condominiums, and each of them, and upon the Project, for the benefit of the Project and each and every individual Condominium hereinafter described and of each Owner of one (1) or more Condominiums, and the owners of an interest of any kind or character in the Project or any portion thereof. All of said limitations, covenants, conditions, reservations, liens, charges and restrictions shall run with the land and shall be binding on all parties having or acquiring any right, title or interest in the Project or any part thereof, whether as sole owners, joint owners, lessees, tenants, occupants, or otherwise. Each and all of said limitations, covenants, conditions, restrictions, reservations, liens and charges shall be deemed to be, and shall be construed as equitable servitudes, enforceable by any of the Owners of any of the Condominiums or any interest in the Project against any person bound thereby or subject thereto, and shall be enforceable by the Board, or its duly appointed representatives, against any such person. Notwithstanding the provisions contained in this Declaration, the provisions of various laws may supplement or override the provisions contained herein. These laws include the Davis-Stirling Common Interest Development Act (Civil Code Sections 1350 et seq.) and the California Nonprofit Mutual Benefit Corporation Law (Corporations Code Sections 7110 et seq.). ARTICLE 1 DEFINITIONS As used herein, the following terms shall have the meanings indicated. In this Declaration, the singular and plural number and masculine, feminine and neuter gender shall each include the other where the context requires. All references to Sections of the California Civil Code (the Civil Code ), the California Corporations Code (the Corporations Code ), the California Health and Safety Code (the H&S Code ), and the California Vehicle Code (the Vehicle Code ) mean such Sections as they may be hereafter amended, renumbered, superseded, or incorporated into other provisions of California law. 1.1 Articles. Articles means and refers to the Articles of Incorporation of the Association, as amended from time to time. 1.2 Assessment. Assessment means that portion of the cost of maintaining, improving, repairing, operating and managing the Project (as defined below) and the cost of enforcing the Association s governing documents that is to be paid by each Owner as determined by the Board, and includes Regular and Special Assessments, as follows: (a) Regular Assessment means an Assessment duly made and levied by the Board against an Owner and such Owner s Condominium, representing such Owner s share of the total Common Expenses which are to be levied among all the Owners and their Condominiums, in the manner and proportions specified herein. DMWEST # v31 2

7 (b) Special Assessment means an Assessment, other than a Regular Assessment, from time to time duly made and levied by the Board against all Owners and their Condominiums, or against a particular Owner and such Owner s Condominium, in the manner and proportions specified herein. 1.3 Association. Association means and refers to the Meadow Ridge Homeowners Association, a California nonprofit mutual benefit corporation. 1.4 Board; Board of Directors. Board or Board of Directors means the governing body of the Association. 1.5 Bylaws. Bylaws means and refers to the Bylaws of the Association, as amended from time to time. 1.6 Common Area. Common Area means and refers to all of the Project (excepting the Units), title to which is held in common by all Owners. The Common Area includes, without limitation, the Restricted Common Areas, the Common Facilities, and each of the components specified in Section Common Expenses. Common Expenses means any use of common funds authorized by the Project Documents, including without limitation: (a) Maintenance and Repair Costs. All expenses or charges incurred by or on behalf of the Association for the management, maintenance, administration, insurance, operation, repairs, additions, replacements, alterations or reconstruction of the Common Area or Common Facilities or any portion of any Condominium that the Association is obligated to maintain, repair or replace pursuant to this Declaration. (b) Insurance. All expenses or charges reasonably incurred to procure insurance for the protection of the Association and the Board or as otherwise required under Section 8. (c) Reserves. Any amounts reasonably necessary for reserves for maintenance, repair and replacement of the Common Area or any portion thereof, or any portion of any Condominium that the Association is obligated to maintain, repair or replace, as well as for the nonpayment of Assessments. (d) Discharge of Duties. The use of such funds to defray the costs and expenses incurred by the Association in the performance of its functions or in the proper discharge of the responsibilities of the Board as provided in the Project Documents. 1.8 Common Facilities. Common Facilities means all buildings and improvements in the Project (except the Common Area that is part of a building containing one or more Units) and specifically includes the Manager s Premises, the street, drainage, trees, hedges, plantings, lawns, shrubs, landscaping, fences, berms, lighting fixtures and other facilities (including Utility Facilities serving more than one Unit) constructed or installed, or to be constructed or installed, or currently located within and forming an integral part of the Common Area. DMWEST # v31 3

8 1.9 Common Interest. Common Interest means a one fifty-first (1/51 st ) proportionate undivided interest in the Common Area Condominium. Condominium means a condominium as defined in Civil Code Sections 783 and 1351(h), consisting of a Common Interest, a separate interest in a Unit, and a non-exclusive easement for access to, use and enjoyment of, and ingress and egress through the Common Area Condominium Plan. Condominium Plan means and refers to the recorded plan of the Condominiums which identifies the Common Area and each separate interest pursuant to Civil Code Section 1351, a copy of which Plan was recorded on September 14, 1979 in Volume 278, Page 303 of the Official Records. In the event of any conflict between the Condominium Plan and this Declaration, the provisions of this Declaration shall govern Default Rate. Default Rate means the lesser of (a) 12% per annum or (b) the highest rate of interest that the parties are permitted to contract for under applicable law Eligible First Mortgagee. Eligible First Mortgagee means a First Mortgagee who has requested notice of certain matters from the Association in accordance with Section 10.7(c) and has provided proof to the Association of its status as a First Mortgagee. A First Mortgagee may be an Eligible First Mortgagee notwithstanding that the voting rights of the Owner with respect to the Condominium encumbered by the applicable First Mortgage are suspended Exterior Walls. Exterior Walls means the exterior perimeter walls including the siding of a building and the connected framing and drywall (including any waterproof paper and insulation incorporated therein) but excluding any interior finish First Mortgage. First Mortgage means a Mortgage which is superior to the lien of any other Mortgage Foreclosure. Foreclosure means foreclosure of a Mortgage, a trustee s sale thereunder, or a deed in lieu of foreclosure thereof Improvements. Improvements means all structures and appurtenances thereto of every type and kind, including, but not limited to, the following (if applicable) whether now existing or hereafter located on the Land or otherwise within the Project: dwelling units and other buildings, awnings, trellises, terraces, balconies, upper and lower decks, patios, lobbies, swimming pools, spas, fitness or recreational facilities, meeting rooms, walkways, hallways, stairways, storage areas, driveways, parking areas, fences, screening walls, block walls, retaining walls, bearing walls, columns, vertical supports, girders, ceiling joists, raised ceilings, subfloors, floors, windows, skylights, walls, roofs, slabs, foundations, paint on surfaces of any structure, heating and cooling equipment, water heaters, water softeners, reservoirs, tanks, pumps, motors, ducts, flues, and chutes, conduits, pipes, plumbing, sprinkler systems, irrigation systems, drainage systems, landscaping, hedges, trees, shrubs, windbreaks, poles, fire protection systems, security systems (including security cameras), television antennas, satellite dishes, telephone and internet facilities, wires, lighting, basketball standards, sports apparatus, or exterior decoration. DMWEST # v31 4

9 1.18 Invitees. Invitees means and includes a Person s family members, guests (including tenants), employees, servants, licensees, representatives, agents and invitees Land. Land has the meaning set forth in Recital C hereof Manager. Manager means the managing agent, if any, whether an individual or an entity, retained by the Board, on contract, to whom the Board delegates the management activities related to the Project pursuant to Section 5.2(i) Manager s Premises. Manager s Premises means the unit identified as Unit 1 in the Condominium Plan (including the office, the laundry room, and the storage room). The Manager's Premises is commonly referred to as "Unit 1," but is not a Unit. The Manager s Premises is Common Area. The 51 Units are designated on the Condominium Plan and are commonly referred to as Units 2 through Member. Member means and refers to a Person entitled to membership in the Association as provided in Section Mortgage. Mortgage means a deed of trust or mortgage which encumbers a Condominium, which has been recorded in the Official Records and is made in good faith and for value. Mortgage Mortgagee. Mortgagee means a holder of, or a beneficiary under, a 1.25 Mortgagee Approval. Mortgagee Approval means the approval of at least seventy-five percent (75%) of Eligible First Mortgagees given in person or by proxy or by written consent. 5.3(a). A hereof Official Person. Official Person has the meaning set forth in Section 1.27 Official Records. Official Records has the meaning set forth in Recital 1.28 Owner; Owners. Owner or Owners means and refers to the record holder or holders, if more than one, of title to a Condominium as evidenced by a document properly recorded in the Official Records. Owner does not include any Person having any interest merely as security for the performance of an obligation Person. Person means a natural person, a corporation, a partnership, a limited liability company, a limited liability partnership, a trustee of a trust, or any other legal entity Primary Deck. Primary Deck means the one deck attached to each Unit adjacent to the living room thereof. DMWEST # v31 5

10 1.31 Primary Entrance Door. Primary Entrance Door means the one door which is the primary entrance to each Unit Project. Project means and refers to the Land and all Improvements now or hereafter erected thereon and all property (real, personal or mixed) intended for or used in connection with the maintenance thereof by the Association Project Documents. Project Documents means this Declaration, as amended from time to time, the exhibits attached hereto, together with the other basic documents used to create and govern the Project, including the Articles, the Bylaws, the Condominium Plan, and all Rules and Regulations Restricted Common Area. Restricted Common Area means and refers to those portions of the Common Area set aside for exclusive use of an Owner or Owners pursuant to Section 2.3, and shall constitute exclusive use common area within the meaning of Civil Code Section 1351(i) Roof. Roof means the exterior topmost surface including the shingles of a building and the connected framing, subsheeting and drywall (including any waterproofing material and/or insulation incorporated therein), but excluding any interior finish Rules and Regulations. Rules and Regulations means the rules and regulations adopted by the Board in accordance with applicable law, including Civil Code Sections et seq., pertaining to the Project, including, without limitation, the use of the Common Area (including the Restricted Common Area) and the Units, as such rules and regulations may be amended from time to time Secondary Entrance Door. Secondary Entrance Door means the doorway between the living room and the Primary Deck of a Unit (whether a sliding glass door or otherwise), and not including any screens Town. Town means the Town of Mammoth Lakes, California, and its various departments, divisions, employees and representatives Unit. Unit means and refers to a separate interest in space and includes the spatial elements of a Condominium that are not owned in common with the other Owners, such Units and their respective boundaries being shown and particularly described in the Condominium Plan and/or deeds conveying Condominiums and/or this Declaration. Unit includes such particular components as are specified in Section 2.2 or elsewhere in this Declaration, but does not include other interests in real property that are less than estates in real property, such as exclusive or nonexclusive easements or exclusive uses. In interpreting deeds and plans the existing physical boundaries of a Unit (or of a Unit modified or reconstructed in substantial accordance with the Project Documents) shall be conclusively presumed to be its boundaries, rather than the description expressed in the deed or Condominium Plan, regardless of minor variance shown on the Condominium Plan or in the deed and those of the building and regardless of settling or lateral movement of the building. Wherever reference to a Unit is made in the Project Documents, in any deed, or elsewhere, it shall be assumed that such reference is made to the Unit as a whole, including each of its component elements. The Manager s Premises DMWEST # v31 6

11 is not a Unit, even if referred to as Unit 1 in one or more Project Documents. The Manager s Premises is Common Area Utility Facilities. Utility Facilities means connections, lines, wires, cables, ducts, pipes, valves, switches, circuit breakers, and other similar equipment located on the Project, and include, without limitation, any and all of the following: sanitary sewer, water, drainage, electric, gas, propane, television receiving, internet, telephone equipment, cables and lines, exhaust flues, and any heating facilities Voting Power. Voting Power means the number of Condominiums in the Project (51) less the number of Condominiums as to which voting rights are suspended in accordance with this Declaration or the other Project Documents at the time the counting of any vote of the Owners. Except as otherwise specified herein, a Majority of the Voting Power means more than fifty percent (50%) of the Voting Power. ARTICLE 2 DESCRIPTION AND DIVISION OF PROJECT AND CREATION OF PROPERTY RIGHTS 2.1 Description of Project. The Project is a condominium project consisting of the Land, the Condominiums and all other Improvements located thereon in accordance with the Condominium Plan or otherwise in accordance with the Project Documents. The Project is divided as hereafter set forth. 2.2 Units. Each of the units as separately shown, numbered and designated in the Condominium Plan consists of the space bounded by and contained within (but not including) (i) the Exterior Walls, (ii) the Roof, (iii) the exterior windows and window frames, (iv) the exterior doors and frames, and (v) exterior trim of the applicable unit, each of such spaces being defined and referred to herein as a Unit, subject to the following and the other provisions of this Declaration: (a) Fireplaces, inserts and stoves are part of the Unit. (Chimneys, flues and stovepipes are Restricted Common Area.) (b) Window screens and door screens are part of the Unit. (c) Each Unit includes the Utility Facilities located within its boundaries of which the Owner has exclusive use. (All Utility Facilities located outside of the boundaries of a Unit but serving a single Unit are Restricted Common Area allocated exclusively to such Unit. All Utility Facilities serving more than one Unit are Common Facilities and, consequently, part of the Common Area.) (d) Each Unit includes both the portions of the building so described and the airspace so encompassed. The Unit does not include those areas and those things which are defined as Common Area in Section 2.3. DMWEST # v31 7

12 (e) Each Unit is subject to such encroachments as are contained in the building, whether the same now exist or may be later caused or created in any manner referred to in Section (f) Each Unit shall have appurtenant to it nonexclusive rights of ingress, egress, and support through the Common Area, subject to the exclusive rights of each Owner in any Restricted Common Area appurtenant to that Owner s Unit. 2.3 Common Area. The remainder of the Project constitutes and shall be referred to herein as Common Area and includes, without limitation, the Common Facilities, the Restricted Common Areas and all of the following elements: (a) The Land described on Exhibit A; (b) The Manager s Premises; (c) The tennis court, the swimming pool, the spa, and related amenities including the adjacent building and equipment in the pool area; (d) Parking and driveway areas; (e) Storage areas used by the Association, including the garage and storage room located between Units 40 and 41; (f) Foundations, which means any concrete slab supporting a Unit, including concrete slab on grade; two adjoining Units; screens therefor); (g) (h) The space between the interior common walls which are shared by All exterior windows (including exterior trim but excluding any (i) Water heaters, tanks, pumps, motors, and associated utilities servicing facilities in the Common Area (including the Manager s Premises, the swimming pool and spa, the storage area/garage, and the tennis court); (j) All Utility Facilities serving more than one Unit; (k) Exterior lighting fixtures, even if actuated from switches controlled from or separately metered to a Unit; and (l) All smoke detectors, whether inside or outside of a Unit. Each Owner may use the Common Area in accordance with the purposes for which it is intended without hindering the exercise of or encroaching on the rights of any other Owners, subject to the exclusive rights of each Owner in any Restricted Common Area appurtenant to that Owner s Unit. DMWEST # v31 8

13 (m) Restricted Common Areas. The following described portions of the Common Area, referred to as Restricted Common Areas, are set aside and allocated for the exclusive use of the Owner of the Unit to which they are attached, and are appurtenant to that Condominium: (1) The Primary Entrance Door; (2) The Secondary Entrance Door and any other entrance doors (in each case excluding any screens); (3) The exterior stoop and exterior stairway to the Primary Entrance Door; (4) Exterior windows (excluding any screens); (5) Decks and balconies; (6) Utility Facilities located outside of the boundaries of a Unit but serving a single Unit; (7) The Exterior Walls and all walls located within the interior of a Unit (whether bearing walls or otherwise), exposed beams in ceilings, columns (such as columns located on the foundation), ceiling joists, subfloors, unfinished floors, unfinished stairways, and Roofs (provided, however, that the finished surfaces of walls, floors, stairways, and exposed beams in ceilings are part of the Unit); and (8) Those portions of the chimney structures, flues and/or stovepipes located within a Unit. 2.4 Rights of Entry and Use. The Units and the Common Area (including the Restricted Common Areas) shall be subject to the following rights of entry and use: (a) The right of the Association agents or employees (including any Manager) to enter any Unit to cure any violation of the Project Documents, provided that the Owner has received notice and a hearing if and to the extent required by the Bylaws (except in the case of an emergency) and the Owner has failed to cure the violation or take steps necessary to cure the violation within thirty (30) days after the finding of a violation by the Association. (b) The access rights of the Association to inspect, maintain, repair or replace Improvements, Utility Facilities or other property located in the Common Area or which are otherwise the responsibility of the Association hereunder. (c) The rights of the Owners to have reasonable access to the Common Area for the purpose of maintaining or replacing the Utility Facilities (to the extent maintenance thereof is the responsibility of the Owner under Article 6) or in order to fulfill the other obligations of the Owners under the Project Documents. DMWEST # v31 9

14 (d) The encroachment easements described in Section (e) The rights of Owners to make improvements or alterations authorized by Civil Code Section 1360, subject to the provisions of Article 7 and other provisions hereof to the extent applicable. 2.5 Partition Prohibited. The Common Area shall remain undivided as set forth above. Except as provided by Civil Code Section 1359 or authorized under Section 9.9, no Owner shall bring any action for partition of the Common Areas, it being agreed that this restriction is necessary in order to preserve the rights of the Owners with respect to the operation and management of the Project. Judicial partition by sale of a single Condominium owned by two (2) or more Persons and division of the sale proceeds is not prohibited hereby, but partition of title to a single Condominium is prohibited. ARTICLE 3 ASSOCIATION, ADMINISTRATION, MEMBERSHIP AND VOTING RIGHTS 3.1 Association to Manage Common Areas. The management and administration of the Common Area shall be vested in the Association in accordance with this Declaration and the other Project Documents. 3.2 Board of Directors. The Association shall be governed by a Board of Directors, who shall be elected in accordance with the Bylaws. The Board of Directors shall have all authority to govern and manage the affairs of the Association consistent with Civil Code Section , other applicable law and the Project Documents. 3.3 Membership. Each Owner shall automatically, upon becoming the Owner of a Condominium, be a member of the Association, and shall remain a member thereof until such time as such ownership ceases for any reason, at which time the membership in the Association shall automatically cease. Ownership of a Condominium shall be the sole qualification for membership in the Association. Membership shall be held in accordance with this Declaration and the other Project Documents. 3.4 Transfer of Memberships. Membership in the Association shall not be transferred, encumbered, pledged, or alienated in any way, except upon the sale or encumbrance of the Condominium to which it is appurtenant, and then only to the purchaser, in the case of a sale, or Mortgagee, in the case of an encumbrance of such Condominium. On any transfer of title to a Condominium, including a transfer on the death of an Owner, membership shall pass automatically to the transferee upon such transfer of title. No Mortgagee shall have any membership rights unless and until it obtains title to the Condominium by Foreclosure. Any attempt to make a transfer prohibited hereunder shall be void and of no effect whatsoever. No member may resign his or her membership. On notice of a transfer, the Association shall record the transfer on its books. 3.5 Voting Rights. Each Condominium shall be entitled to cast one vote on each question presented to the membership. Fractional voting shall not be allowed. If the Condominium has more than one Owner and the joint Owners are unable to agree among DMWEST # v31 10

15 themselves as to how their vote shall be cast, the vote shall be forfeited on the matter in question. If one Owner casts the vote attributed to a particular Condominium, the vote shall conclusively bind all Owners of that Condominium. If more than one (1) Owner casts the vote attributed to a Condominium, the votes cast by such Owners shall not be counted and shall be considered void. Except as herein or in the Bylaws provided to the contrary, a Majority of the Voting Power shall decide each question, provided that a quorum (as defined in the Bylaws) existed at the beginning of the meeting. Except as otherwise provided herein, voting rights and procedures shall be set forth in the Bylaws. ARTICLE 4 MAINTENANCE AND ASSESSMENTS 4.1 Creation of the Lien and Personal Obligation of Assessments. Each Owner by acceptance of a deed for a Condominium, whether or not it shall be so expressed in such deed, covenants and agrees: (1) to pay to the Association Regular Assessments or charges, and Special Assessments for purposes permitted herein, such Assessments to be established and collected as hereinafter provided; and (2) to allow the Association to enforce any Assessment lien established hereunder by nonjudicial proceedings under a power of sale or by any other means authorized by law. All Assessments, together with interest at the Default Rate, late charges, collection costs, and reasonable attorneys fees, shall be a charge on the Condominium and shall be a continuing lien upon the Condominium against which each such Assessment is made, the lien to become effective upon recordation of a notice of delinquent Assessment. Each such Assessment, together with interest at the Default Rate, late charges, collection costs, and reasonable attorneys fees, shall also be the personal obligation of the Person who was the Owner of such Condominium at the time when the Assessment became due. No Owner shall be exempt from liability for payment of Assessments by waiver of the use or enjoyment of any of the Common Areas or by the abandonment of the Owner s Condominium. 4.2 Purpose of Assessments. The Assessments levied by the Board shall be used exclusively to promote the economic interests, recreation, health, safety, and welfare of all the Owners, and to provide insurance, improvement, and maintenance of the Common Area for the common good of the Project. 4.3 Assessments. (a) Regular Assessments. The Board shall establish and levy Regular Assessments in an amount, based upon an approved budget, that the Board estimates will be sufficient to raise the funds needed to perform the duties of the Association during each fiscal year. The Regular Assessment shall include a portion for reserves in such amounts as the Board in its discretion considers appropriate to meet the costs of the future repair, replacement or additions to the major components of the Project that the Association is obligated to maintain and repair. Reserve funds need not be deposited in a separate account, but must be separately accounted for on the books of the Association. Except as provided in the Bylaws and Civil Code Section (c), reserve funds may not be expended for any purpose other than the repair, restoration, replacement or maintenance of, or litigation involving the repair, restoration, replacement, or maintenance of, the major components that the Association is obligated to repair, restore, replace, or maintain and for which the reserve fund was established, without the consent DMWEST # v31 11

16 of Owners holding a Majority of the Voting Power at a duly held meeting or by written ballot. Regular Assessments shall be collected on a monthly basis unless the Board directs otherwise. (b) Special Assessments. The Board, at any time, may levy a Special Assessment in order to raise funds for unexpected operating or other costs, insufficient operating or reserve funds, or such other purposes as are authorized in this Declaration. Except as provided in Sections 4.3(c) and (d), Section 5.1(a)(ii), Section 6.6 and Section 8.3(a), Special Assessments shall be allocated among the Units in the same manner and according to the same percentages as Regular Assessments, provided that the Board may levy a Special Assessment against an Owner to reimburse the Association for costs incurred in bringing the Owner and such Owner s Unit into compliance with the Project Documents. Special Assessments may be collected in one (1) payment or periodically as the Board shall direct. (c) All Regular Assessments and all Special Assessments shall be determined by the Board and levied equally among the Units, except as provided in Sections 4.3(b) and (d) and except for those portions of the Assessments allocated to meet the cost of the following: (1) Fire and casualty insurance obtained pursuant to Section 8.1(a) covering the Common Area elements of the buildings containing the Units (but not the Common Facilities), which shall be levied among the Condominiums in the proportions set forth on Exhibit B, which proportions are based upon the approximate total square footage of the interiors of the various Units (the costs of liability and other insurance and the costs of fire and casualty insurance covering the Common Facilities benefit all Units equally and shall not be allocated in such manner); (2) Exterior painting and/or staining. Assessments for routine exterior painting and/or staining of the exterior siding of the Units (but not the Common Facilities) shall be levied among the Condominiums in the proportions set forth on Exhibit C, which proportions are based upon the approximate square footage of the exterior siding of the various Units. Notwithstanding the foregoing, Assessments for the cost of any exterior painting and/or staining to the exterior siding of particular Units and not of all of the Units equally (such as resulting from greater exposure to the elements) shall be allocated to the Units benefiting therefrom; (3) Repairs of the exterior siding of the Units and the funding of reserves therefor (but not for repairs or reserves relating to the siding of the Common Facilities), which shall be levied among the Condominiums in the proportions set forth on Exhibit C; (4) Repairs of the Roofs of the Units and the funding of reserves therefor (but not for repairs or reserves relating to the roofs of the Common Facilities), which shall be levied among the Condominiums in the proportions set forth on Exhibit D, which proportions are based upon the approximate square footage of the Roofs of the various Units; and DMWEST # v31 12

17 (5) Repairs of the following elements of the Project (notwithstanding that they may be part of the Common Area and therefore not included within the scope of Section 6.2) and the funding of reserves therefor, which shall be levied upon the Owner of the applicable Unit: walls; Deck; (i) (ii) (iii) The glass portion of all windows and doors; Any walls other than Exterior Walls or bearing All decks and balconies other than the Primary (iv) All entrance doors (except the Primary Entrance Door and the Secondary Entrance Door) and all interior and other doors, in each case including all hardware thereon; (v) All Utility Facilities which exclusively service a Unit but which are not part of the Unit (and excluding exterior lighting which is part of the Common Area); (vi) All cable, antennas and/or satellite dishes exclusively servicing a Unit but which are not part of the Unit (to the extent such items are permitted under this Declaration); (vii) Heating and ventilating equipment, including air ducts, which are not part of the Unit; and (viii) The cost of installation of flues into fireplaces and/or chimney structures, in the event that the Town or any other governmental entity requires such installation. The foregoing allocations have been determined to be equitable based upon the cost and value of the common services furnished by the Association and listed above to the respective interests of the various Owners. Such proportions shall be modified if and to the extent that the floor space, siding or Roof areas of any Unit are materially changed as the result of modifications thereto. (d) If an Owner reasonably demonstrates to the Board that such Owner has previously replaced or substantially improved one or more windows, the Primary Entrance Door, the Secondary Entrance Door, and/or the Primary Deck of such Owner s Unit at such Owner s expense, and if the Association later determines to make similar replacements or substantial improvements to other Units and therefore such replacements or substantial improvements are not required for such Owner s Unit (all as reasonably determined by the Board), then such Owner will not be assessed for its proportionate share of such replacements or substantial improvements and the costs thereof shall be shared among the other Owners. This paragraph (d) does not apply to the replacement of glass in a window or Secondary Entrance Door. The rights of any Owner under this Subsection 4.3(d) shall automatically be deemed transferred to any subsequent Owner of the same Unit. DMWEST # v31 13

18 4.4 Restrictions on Regular or Special Assessments. The Association shall at all times comply with Civil Code Sections 1366 et seq. regarding Assessments. The Board may not impose a Regular Assessment which is more than twenty percent (20%) greater than the Regular Assessment for the immediate preceding fiscal year or levy a Special Assessment to defray the cost of any action or undertaking on behalf of the Association which in the aggregate exceeds five percent (5%) of the budgeted gross expenses of the Association for that fiscal year, without the consent of Members casting a majority of the votes in an election held in accordance with Civil Code Section and other applicable law. Notwithstanding the foregoing, the Board, without approval of the Members, may increase Regular Assessments or levy Special Assessments necessary for an emergency situation. For purposes of this Section 4.4, an emergency situation is one of the following: (a) An extraordinary expense required by an order of a court; (b) An extraordinary expense necessary to repair or maintain the Project or any part of it for which the Association is responsible where a threat to personal safety on the Project is discovered; or (c) An extraordinary expense necessary to repair or maintain the Project or any part of it for which the Association is responsible that could not have been reasonably foreseen by the Board in preparing and distributing the pro forma operating budget, provided, however that prior to the imposition or collection of the Special Assessment, the Board shall pass a resolution containing written findings as to the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process, and the resolution shall be distributed to the Members with the notice of the Assessment. This Section 4.4 incorporates the statutory requirements of Civil Code Section 1366(b). If this Section of the Civil Code is amended in any manner, this Section 4.4 automatically shall be amended in the same manner without the necessity of amending this Declaration. 4.5 Effect of Nonpayment of Assessments. Any Assessment not paid within thirty (30) days after the due date shall be delinquent, and shall bear interest at the Default Rate commencing thirty (30) days after the due date until paid, and shall incur a late payment charge in the amount of ten percent (10%) of the delinquent assessment or $10.00, whichever is greater. In the event the Civil Code is amended to permit a higher late payment charge, the foregoing limitation shall be deemed to be automatically amended to such higher amounts. The Association shall also be entitled to recover from the Owner liable for the delinquent Assessment reasonable costs, including attorneys fees, incurred in collecting the delinquent assessment. 4.6 Transfer of Condominium by Sale or Foreclosure. (a) Sale or transfer of any Condominium shall not affect the lien of any Assessment. However, the sale of any Condominium pursuant to the Foreclosure of a First Mortgage shall extinguish the lien of such Assessments (including attorneys fees, late charges, DMWEST # v31 14

19 or interest levied in connection therewith) as to payments which became due prior to such sale or transfer (except for assessment liens recorded prior to the recordation of such First Mortgage). No sale or transfer shall relieve such Condominium from liability for any Assessments thereafter becoming due or from the lien thereof. (b) Where the Mortgagee under a First Mortgage or other purchaser of a Condominium obtains title to such Condominium as a result of Foreclosure of any such First Mortgage, such acquirer of title, and his or her successor and assigns, shall not be liable for the Assessment chargeable to such Condominium which became due prior to the acquisition of title to such Condominium by such acquirer (except for Assessment liens recorded prior to such First Mortgage). Such unpaid share of Common Expenses or Assessments shall be deemed to be Common Expenses collectible from all of the Owners including such acquirer, and his or her successors or assigns. (c) In any transfer of a Condominium, including a transfer by Foreclosure of a Mortgage, a grantor or prior Owner shall remain personally liable to the Association for all unpaid Assessments against the Condominium up to the date of the record transfer. The grantee shall be entitled to a statement from the Association dated as of the date of record transfer, setting forth the amount of the unpaid Assessments against the grantor due to the Association, and the Condominium so transferred shall not be subject to a lien for unpaid Assessments in excess of the amount set forth in the statement; provided, however, the grantee shall be liable for any such Assessments that become due after the date of the record transfer. Under no circumstances shall transfers not evidenced by the proper recordation of a document of transfer in the Official Records be effective to alter or discharge the liability of the purported transferor under this Declaration. Members of the Association shall remain Members for all purposes until the date of recordation of a valid document of transfer. 4.7 Enforcement; Remedies; Priorities. (a) If an Assessment is delinquent, after providing notice to the Owner pursuant to Civil Code Section 1367 and otherwise complying with such Section and other applicable law, the Association may record a notice of delinquent assessment and establish a lien against the Condominium of the delinquent Owner. Such lien shall be prior and superior to all other liens except (1) all taxes, bonds, assessments, and other liens which, by law, would be superior thereto, and (2) the lien or charge of any First Mortgage. The notice of delinquent assessment shall state the amount of the Assessment together with collection costs, attorneys fees, late charges, and interest at the Default Rate, a description of the Condominium against which the Assessment and other sums are levied, the name of the Owner, and the name and address of the trustee authorized by the Association to enforce the lien by sale. An assessment lien may be enforced in any manner permitted by law, including sale by the court, sale by the trustee designated in the notice of delinquent assessment, or sale by a trustee substituted pursuant to Civil Code Section 2934(a). Any sale shall be conducted in accordance with the provisions of Civil Code Sections 2924, 2924b, 2924c, 2924f, 2924g, and 2924h, or any successor statutes thereto, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted by law. Nothing herein shall preclude the Association from bringing an action directly against an Owner for breach of the personal obligation to pay Assessments. Notwithstanding the foregoing, the Association shall not foreclose an assessment lien for sums DMWEST # v31 15

20 lower than such amount as may be specified in Civil Code Section or other applicable law from time to time, but shall be entitled to collect the indebtedness in small claims court or in any other manner provided by law. (b) The Association, acting on behalf of the Owners, shall have the power to bid for the Condominium at Foreclosure sale, and to acquire and hold, lease, mortgage, and convey such Condominium. Where the purchase of a Condominium in Foreclosure will result in a five percent (5%) or greater increase in Assessments, the purchase shall require the approval of a Majority of the Voting Power. During the period a Condominium is owned by the Association following Foreclosure: (1) no right to vote shall be exercised on behalf of the Condominium; (2) no Assessment shall be assessed or levied on the Condominium; and (3) each other Condominium shall be charged, in addition to its usual Assessment, its share of the Assessment that would have been charged to such Condominium had it not been acquired by the Association as a result of Foreclosure. Suit to recover a money judgment for unpaid Assessments and other amounts shall be maintainable without a Foreclosure or waiver of the lien securing the Assessment. (c) After acquiring title to the Condominium at Foreclosure, the Association may execute, acknowledge, and record a deed conveying title to the Condominium which deed shall be binding on the Owners, their successors, and all other parties. (d) The Board may temporarily suspend the voting rights and the right to use recreational facilities of a Member who is in default in payment of any Assessment, after notice and hearing, as provided in the Bylaws. Fines and penalties for violation of the Project Documents are not Assessments and are not enforceable by assessment lien. (e) In acting to collect delinquent Assessments, the Association shall at all times comply with Civil Code Sections , and and other applicable law. 4.8 Unallocated Taxes. In the event that any taxes are assessed against the Common Area or other property of the Association, rather than against the Condominiums, such taxes shall be included in the Assessments made under the provisions of Section 4.1 and, if necessary, a Special Assessment may be levied in an amount equal to said taxes, to be paid in two (2) installments, thirty (30) days prior to the due date of each tax installment. ARTICLE 5 DUTIES AND POWERS OF THE ASSOCIATION 5.1 Duties. In addition to the duties elsewhere provided for in this Declaration or in the other Project Documents, and without limiting the generality thereof, the Association shall perform the following duties: (a) Maintenance. The Association shall maintain, repair, replace, restore, operate and manage all of the Common Area (including all of the Restricted Common Area) and all facilities, including Utility Facilities (except as set forth in Section 6.1), improvements, furnishings, equipment and landscaping thereon, and all property that may be DMWEST # v31 16