Mountain Creek Townhome Condominium Association Estes Park, Colorado. Amended and Restated Policies, Rules and Governance Standards

Transcription

1 Mountain Creek Townhome Condominium Association Estes Park, Colorado Amended and Restated Policies, Rules and Governance Standards Adopted by the Board of Directors Board Approved Revisions 5/13/ Introduction. The Board of Directors (the Board ) of the Mountain Creek Townhome Condominium Association, a Colorado non-profit corporation (the Association ), acting pursuant to the powers set forth in the Association s Bylaws, its Articles of Incorporation and the recorded Declaration for Mountain Creek Townhome Condominium ( Declaration ), (such documents being collectively referred to as the Association Documents ), and in conformity with the Colorado Common Interest Ownership Act ( CCIOA ) and the Colorado Condominium Ownership Act, has enacted a series of Policies, Rules and Governance Standards effective on July 3, 2006, with certain subsequent amendments and revisions as noted, all of which are binding on all of the Unit Owner Members of the Association. These Policies, Rules and Governance Standards, as amended, sometimes hereinafter referred to as the PR&GS, supersede any previously adopted Rules and Regulations or Policies with respect to the same subject matter. The definition of all capitalized terms not defined herein shall have the same meaning ascribed to such terms in the Declaration. In the event of any conflict in the definitions of capitalized terms defined herein and in the Declaration, the Declaration shall control. 2. Policies and Rules Purposes. The PR&GS adopted by the Board, as required by the Colorado Revised Statutes ( C.R.S. ) , serve as guidelines for the effective and efficient management of the resources of the Association. Senate Bill passed by the Colorado Legislature in 2005 amended the State Statutes on governance of CCIOA communities (now codified primarily in Article 33.3 ( et seq. of the C.R.S.). Some of the Policies and Rules were adopted by the Board to bring the Association into compliance with the C.R.S. 3. Scope of Policies, Rules and Governance Standards for the Association. PR&GS for the Mountain Creek Townhome Condominium and the Association can be viewed as documents designed to clarify and supplement the Declaration and Bylaws of the Association. The PR&GS cover financial, governance, insurance, landscaping, maintenance, parking and restrictive covenants as they relate to the Association management and the utilization of property within the Mountain Creek Townhome Condominium development. The document presented here incorporates the PR&GS adopted and/or revised by the Board in 2006, along with subsequent amendments which are noted as to effective date of approval. # Page 1 of 30

2 4. Variance. The Board may from time to time vary from the requirements set forth in the PR&GS if the Board determines in its sole discretion that such variance is reasonable under the circumstances, so long as previously completed actions or conduct in reasonable reliance on prior provisions of these PR&GS are not materially adversely affected. 5. Amendment. The PR&GS may be amended from time to time by the Board, pursuant to procedures set out herein. 6. Effective Date for the Policies, Rules and Governance Standards. The prior effective date for the PR&GS presented in this document is July 3, 2006, along with subsequent amendments which are set out with a different effective date. Policies, Rules and Governance Standards with an E following the year of adoption indicate that Section was later edited by the Board without a change of substance or meaning from the date of original adoption. 7. Certification. The undersigned, being the duly elected and acting Secretary of the Mountain Creek Townhome Condominium Association (the Association ) certifies that the following Amended and Restated Policies, Rules and Governance Standards was approved by the vote of at least a majority of the Association s Directors at a meeting of the Association s Board of Directors held on, Dated this day of, MOUNTAIN CREEK TOWNHOME CONDOMINIUM ASSOCIATION By: Robert H. Christian (printed name) (Signature of Secretary) * * * * * * * * # Page 2 of 30

3 TABLE OF CONTENTS Page GOVERNANCE STANDARDS FOR THE ASSOCIATION...5 GOVERNANCE STANDARD E: Communicating With Owners About Special, Annual and Board Meetings. (C.R.S )...5 GOVERNANCE STANDARD : Conduct of Association and Board Meetings. (C.R.S )...5 GOVERNANCE STANDARD : Insurance Coverage for Personal Belongings and Other Insurance Needs to be Provided Through Owner s Insurance Policy. (Declaration 21)...7 GOVERNANCE STANDARD : Insurance: Definition of the Association Master Policy. (Declaration 21)...7 GOVERNANCE STANDARD : Insurance: What Is Covered by the Master Policy. (Declaration 21 and C.R.S )...7 GOVERNANCE STANDARD E: Managers, Agents and Employees of the Association Subject to the Mandates of CCIOA. (C.R.S )...8 GOVERNANCE STANDARD E: Membership in the Association. (Association Bylaws, II.1)...8 GOVERNANCE STANDARD : Owner Education. (C.R.S )...8 GOVERNANCE STANDARD : Proxy Voting by Owners. (Association Bylaws, II.9; C.R.S )...8 GOVERNANCE STANDARD : Sale of Unit (repealed) Note: C.R.S Sale of Unit Disclosure to Buyer under CCIOA was repealed May 26, GOVERNANCE STANDARD : Voting Rights of Association Members. (Association Bylaws, II.1)...8 POLICIES OF THE ASSOCIATION...9 POLICY E: Amending Association Bylaws. (Association Bylaws, X)...9 POLICY E: Amending the Declaration. (Declaration 34; C.R.S )...9 POLICY : Amending Governance Standards, Policies and Rules....9 POLICY E: Association Records, Copying and Inspection of. (C.R.S )...10 POLICY : Attorney-Client Privilege Preservation After Board Consultation...12 POLICY : Attorneys Fees and Cost Incurred in Collecting Past-Due Amounts. (C.R.S )...12 POLICY : Claim Filing Against the Association Master Insurance Policy, Normal Procedure POLICY : Conflict of Interest of Board Members and Board Member Education. (C.R.S and )...13 POLICY : Governance Standards, Policies and Rules Enforcement, Including Notice and Hearing Procedures and Schedule of Fines POLICY : Disclosures to Owners Required on an Annual Basis. (C.R.S )...16 POLICY E: Emergency Vehicle Parking for Owners and Renters in Mountain Creek Townhome Condominium. (C.R.S )...17 POLICY : Fire Mitigation POLICY E: Landscape Change Requests by a Unit Owner POLICY E: Maintenance, Reporting Problems of. (Board Adopted 2006)...18 POLICY : Maintenance Responsibilities of the Association. (Declaration 18)...18 POLICY : Maintenance Responsibilities of the Unit Owner. (Board revised 2010)...18 POLICY E: Owner Filing of Claims Against the Association Master Insurance Policy. (C.R.S )...19 # Page 3 of 30

4 POLICY : Reserve Funds Investment. (C.R.S )...19 POLICY E: Unpaid Assessments, Collection of POLICY : Xeriscaping as a Part of Landscaping POLICY : Granting of Variances from the Rules RULE E: Central Air Conditioning. (Board Adopted 2006)...21 RULE : Fence and Barrier Installation. (Board Adopted 2006)...21 RULE : Flags at Units. Deleted and Combined with Rule RULE E: Garages May Not Be Converted into Living Space. (Declaration 26.F)...21 RULE E: Garage Sales in Mountain Creek Townhome Condominium. (Board Adopted 2006)...21 RULE : Gate Addition to Unit Decks. (Board Adopted 2006)...21 RULE E: General Remodeling or Alterations. (Declaration 18)...22 RULE : Holiday Decorations. (Board Adopted 2006)...22 RULE : Lighting, Exterior. (Board Adopted 2006)...22 RULE : Maintenance and Repair, Association Responsibility. (Declaration 3 and 18)...22 RULE : Maintenance and Repair, Unit Owner Responsibility. (Declaration 4 and 18)...22 RULE : Maintenance of Unit Decks. (Board Revised 2010)...22 RULE : Noise, Offensive or Loud. (Board Adopted 2006)...23 RULE : Occupancy Type in the Mountain Creek Townhome. (Declaration 26.A)...23 RULE : Owner May Not Engage in Activities That May Negatively Affect the Association Master Insurance Policy Coverage. (Declaration. 26.G)...23 RULE : Pet Feces, Owner Must Clean Up. (Town of Estes Park Animal Control Ordinance, Board Recognized 2006)...23 RULE E: Pets in Mountain Creek Townhome Association. (Declaration 26.B)...23 RULE : Pets to be Kept on Leash When Outside Unit. (Town of Estes Park Animal Control Ordinance, Board Recognized 2006)...24 RULE : Playground Equipment, Playhouses, and Greenhouses. (Board Adopted 2006)...24 RULE E: Porch and Other Exterior Lights at Night. (Board Adopted 2006)...24 RULE E: Recreational Vehicle Parking Limitations. (Declaration 26.d)...24 RULE E: Renting of Mountain Creek Townhome Condo Units. (Declaration 26.A)...24 RULE E: Satellite Dish and Antenna Installation. (Declaration 26.E)...26 RULE : Satellite Dish and Antenna Installation, Exception To. (Board Revised 2010)...26 RULE E: Storage of Trash Outside of Any Unit. (Declaration 26.C)...26 RULE : Display of Flags and Signs At Individual Units. (C.R.S )...27 RULE : Storage of Items Outside Condo Units. (Board Revised 2010)...27 RULE E: Storm/Screen Door Installation. (Board Adopted 2006)...27 RULE E: Structural Modifications. (Declaration 18)...28 RULE : Trailer and Boat Parking Limitations. (Declaration 26.d)...28 RULE : Unoccupied Units, Recommended Precautions. (Declaration 26.H)...28 RULE : Vehicle Parking in Mountain Creek Townhome. (Board Revised 2010)...28 RULE E: Wind Chimes Outside Units. (Board Adopted 2006)...28 RULE E: Window Coverings, Interior. (Board Adopted 2006)...29 # Page 4 of 30

5 GOVERNANCE STANDARDS FOR THE ASSOCIATION The Governance Standards for the Association describe the method or methods by which the Board governs the Association. GOVERNANCE STANDARD E: Communicating With Owners About Special, Annual and Board Meetings. (C.R.S ) In attempts to keep Members informed about the operations of the Association, the Board will use one or more of the following tools to communicate with the Members: (a) Notifications sent by electronic or U.S. Post Office mail, or by hand-delivery; and (b) Posting of information on the Association website. (Adopted by the Board, July 3, 2006.) GOVERNANCE STANDARD : Conduct of Association and Board Meetings. (C.R.S ) Association Meetings Association Meeting refers to any meeting at which all Members participate or have been invited to participate, as differentiated from meetings of Board members only called by the Board of Directors as part of the Association management. Unless otherwise provided in the Association Documents, and except as set forth in the code of conduct below, meetings of the Members shall be conducted in accordance with (a) Robert s Rules of Order Newly Revised, or (b) such other generally recognized rules of parliamentary procedure as may be adopted by resolution of the Board. Conduct of Meeting Members meetings shall be conducted in accordance with the following code of conduct: (a) Anyone wishing to speak must first be recognized by the meeting chair; (b) Members shall not interrupt anyone who validly has the floor; (c) When speaking, Members shall abide by any time limits set by the meeting chair for comments; (d) Members shall at all times speak and otherwise behave with common courtesy and civility, in particular, Members shall refrain from personal attack, and from using profane, rude or threatening language; (e) Any comments should be relevant to the agenda item being discussed; (f) No Member may speak for a second time on an issue until everyone who wants to speak about that issue has been given the chance to speak once; (g) Members may not speak more than twice on any one issue, subject to the discretion of the meeting chair; and (h) Members shall obey all orders made by the meeting chair, including an order to step down (i.e., an order to stop speaking and yield the floor). Order of Business Unless otherwise provided in the Association Documents, or unless a different order of business is set forth in any meeting agenda established by the Board, the order of business at meetings of the Members will include (a) Establish Quorum; (b) Call Meeting to Order; (c) Approval of Minutes of Prior Meeting; (d) Reports of Committees/Officers; (e) Election of Directors (if annual meeting); (f) Approval of Budget (if annual meeting); (g) Old Business; (h) New Business; and (i) Adjournment. Minutes of Meeting Minutes of Member meetings will be taken by (a) The Association Secretary; (b) In the absence of the Secretary, any other officer designated by the President; or (c) A representative # Page 5 of 30

6 of the Association s management company, provided that the Secretary must review and sign the minutes prepared by such representative, and further provided that the Secretary is ultimately responsible for the accuracy of the minutes. The minutes will be maintained in the Association s permanent records. Because minutes of Member meetings will be taken, and in order to encourage full discussion by the Members, no Member meeting may be recorded by audio or video means unless otherwise allowed by the Board in its sole discretion. Association Board Meetings Conduct of Meeting Meetings of the Association s Board shall be conducted in accordance with the requirements of the Association Documents (especially the Bylaws), CCIOA and the Nonprofit Act, to the extent applicable. Unless otherwise provided in the Association Documents, and except as set forth in the code of conduct below, meetings of the Board shall be conducted in accordance with (a) Robert s Rules of Order Newly Revised or (b) Such other generally recognized rules of parliamentary procedure as may be adopted by resolution of the Board. Participants in Board meetings shall abide by a code of conduct that observes the following principles: (a) Board members shall conduct themselves in a professional and businesslike manner; (b) No personal attacks may be made against other Board members, Association Members, residents or managing agents; (c) Board members shall at all times speak and otherwise behave with common courtesy and civility, in particular, refraining from personal attack, and from using profane, rude or threatening language; (d) Though differences of opinion are inevitable, they must be expressed in a professional and businesslike manner. Executive or Closed-Door Sessions Executive or closed-door sessions of the Board may be called for to discuss litigation or potential litigation, Association employee matters, matters which would be defined as an invasion of privacy for individuals if conducted in public and other types of matters as described in C.R.S (4). Order of Business Unless otherwise provided in the Association Documents, or unless a different order of business is set forth in any meeting agenda established by the Board, the order of business at meetings of the Board will be the following: (a) Confirm the existence of a Quorum (Board members may be present at Board meetings by telephone); (b) Call Meeting to Order; (c) Approval of Minutes of Prior Meeting; (d) Reports of Committees/Officers; (d) Election of Officers (at meeting immediately after Annual Meeting); (e) Approval of proposed annual budget (at meeting prior to annual Association meeting); (f) Old Business; (g) New Business; (h) Adjournment. Minutes of Meeting Minutes of Board meetings will be taken by (a) The Board Secretary; (b) In the absence of the Secretary, any other officer designated by the President; or (c) A representative of the Association s management company, if any, provided that the Secretary must review and sign the minutes prepared by such representative, and further provided that the Secretary is ultimately responsible for the accuracy of the minutes. The minutes will be maintained in the Association s permanent records. Because minutes of Member meetings will be taken, and in order to encourage full discussion by the Members, no Member meeting may be recorded by audio or video means unless otherwise allowed by the Board in its sole discretion. (Adopted by the Board, July 3, 2006.) # Page 6 of 30

7 GOVERNANCE STANDARD : Insurance Coverage for Personal Belongings and Other Insurance Needs to be Provided Through Owner s Insurance Policy. (Declaration 21) Individual Unit Owners should consult with their choice of insurance agents to determine the type and amount of coverage they need to cover their Upgrades and Improvements (as defined in Governance Standard 5 below) furniture, furnishings and other personal belongings as well as coverage for general personal liability and other aspects of their privately held property. (Adopted by the Board, July 3, 2006, amended by the Board, May, 13, 2010.) GOVERNANCE STANDARD : Insurance: Definition of the Association Master Policy. (Declaration 21) The Association Master Insurance Policy is the Policy covering the buildings housing each Unit (including builder originally installed fixtures), the General Common Elements and certain Limited Common Elements (i.e. exterior decks), General Liability and Liability for its elected non-compensated Board members. The insurance policy is negotiated by the Board, and pursuant to the Declaration the Board is designated to act as the agent for each Unit Owner as well as for the Association as a whole for such insurance purposes. Some examples of such covered fixtures are built-in cabinets, sinks, tubs, toilets, wall and floor coverings, furnaces, boilers and hot water heaters. (Adopted by the Board, July 3, 2006, amended by the Board, May 13, 2010.) GOVERNANCE STANDARD : Insurance: What Is Covered by the Master Policy. (Declaration 21 and C.R.S ) The Association Master Insurance Policy provides for standard Special Form coverage property and casualty insurance for all buildings (i.e. all exterior and structural elements to the inner surface of all exterior, structural and load bearing walls, ceilings and floors), the original fixtures installed by the original builder and insurable Common Elements, which collectively includes, without limitation, building structural elements, roofing and roof decking, siding, pavement, insulation, exterior decks, exterior windows, doors and garage doors, all originally installed builder s fixtures (including lighting, plumbing, electrical, heating and ventilating equipment, original flooring including wall-to-wall carpeting, kitchen, bathroom and laundry room cabinets, permanently attached or built-in appliances, but not appliances which are merely plugged into an electric outlet). The Master policy also includes any replacements for the originally installed fixtures, but only if they are of equal grade, quality and size. It does not include or cover any upgrades to originally provided fixtures or any higher grade, quality or quantity of such fixtures, nor improvements or alterations made after initial Unit completion (collectively Upgrades and Improvements ), such as floor coverings not originally installed (unless substantially similar floor coverings of equal quality, grade and quantity replaced the originals) nor any permanent structural building modifications, improvements or additions that were or have been made to the Unit after its initial completion by the original Developer, unless the Unit Owner reports such permanent improvements or additions to the Association for inclusion in the Master Policy. The insurance coverage is complex and Owners are advised that if they have a specific question, the insurance agent may have to be contacted to accurately answer the question. If a Unit Owner makes a structural improvement or addition to a Unit, the Owner is responsible for promptly reporting such addition or improvement to the Board for purposes of increasing # Page 7 of 30

8 the casualty insurance coverage. The additional premium to cover such specifically identified improvements or additions will be paid by the Association and the Unit Owner shall be billed and shall be liable for reimbursement of such additional premium. Those previously described Upgrades and Improvements, all plug-in appliances (e.g. washing machines, dryers, refrigerators, electric ranges, etc.), a Unit Owner s personal contents and the Owner s personal liability insurance are not covered by the Association Master Policy. Those items should be covered by an individual condominium owners policy purchased by each Unit Owner from his or her own insurance agent. (Adopted by the Board, July 3, 2006, amended by the Board, May 13, 2010.) GOVERNANCE STANDARD E: Managers, Agents and Employees of the Association Subject to the Mandates of CCIOA. (C.R.S ) The Board hereby approves the extension of all provisions of the CCIOA to managing agents, employees, independent contractors or any other person acting on behalf of the Association Even though the Association s governing documents may already do so, this PR&GS reiterates the right of the Association to terminate a contract with a management company for cause without penalty to the Association, and further allows for re-negotiation of any such contract. (Adopted by the Board, July 3, 2006.) GOVERNANCE STANDARD E: Membership in the Association. (Association Bylaws, II.1) All Owners of a Unit in the Mountain Creek Townhome Condominium, Estes Park, Colorado, are Members of the Mountain Creek Townhome Condominium Association. (Article II, Section 1, Bylaws of the Association provides complete details on definition of Membership.) (Adopted by the Board, July 3, 2006.) GOVERNANCE STANDARD : Owner Education. (C.R.S ) The Association, shall provide, or cause to be provided, an educational opportunity to all Unit Owners at no cost on at least an annual basis, as to the operations of the Association, the Board and the rights and responsibilities of the Unit Owners, the Association and its Board of Directors under Colorado law. Such educational opportunity may be provided at the Association general meeting, through the Association s newsletter, the Mountain Creek Townhome website, messages, or as otherwise determined by the Board from time to time. (Adopted by the Board, July 3, 2006, amended by the Board May 13, 2010.) GOVERNANCE STANDARD : Proxy Voting by Owners. (Association Bylaws, II.9; C.R.S ) The procedure for filing Proxy for voting at Association Meetings is covered in Article II, Section 9, of the Bylaws of the Mountain Creek Townhome Condominium Association, adopted February 29, (Adopted by the Board, July 3, 2006.) GOVERNANCE STANDARD : Sale of Unit (repealed) Note: C.R.S Sale of Unit Disclosure to Buyer under CCIOA was repealed May 26, GOVERNANCE STANDARD : Voting Rights of Association Members. (Association Bylaws, II.1) # Page 8 of 30

9 Voting Rights of Association Members are contained in Article II, Section 1, of the Bylaws of the Association, adopted February 29, (Adopted by the Board, July 3, 2006.) * * * * * * * * * * POLICIES OF THE ASSOCIATION Procedures adopted by the Association Board to describe processes used in carrying out its assigned or legally mandated responsibilities in the governance of the Association. POLICY E: Amending Association Bylaws. (Association Bylaws, X) The procedure for amending the Bylaws of the Association is contained in Article X of the Bylaws of the Association, adopted February 29, 2000 and readopted by the Board on April 7, 2010 as amended (Art. III, Sec. 6 Quorum of the Board ) on November 18, (Adopted by the Board, July 3, 2006, amended by the Board, May 13, 2010.) POLICY E: Amending the Declaration. (Declaration 34; C.R.S ) Section 34 of the Declaration establishes the process for Amending the Declaration as follows: This Declaration may be amended only in writing, which written amendment must include the signatures of all of the owners of at least sixty-seven percent of the Units then completed and for which a Map or supplemental Map has been recorded, together with the signatures of all holders of any recorded first deed of trust or first mortgage. Holders of deeds of trust or first mortgages on Association units shall be given opportunity to vote on Proposed Amendments to the Declaration. The Association must (1) Send a dated written notice and a copy of the Proposed Amendment by certified mail to the most recent address of the first mortgagee contained on the applicable deed of trust or assignment of deed of trust in the public record; (Statute does not specify a form of notice for the first mortgages, however, due process considerations suggest that any such notice: (a) Specify the statutory section under which the notice is issued; (b) Provide appropriate contact information for the Association; and (c) Specify clearly and unambiguously the consequences of failing to provide the Association with a negative response and the 60-day time frame within which this must occur) and (2) The Association must publish a notice, at least two (2) times (and at least a week apart), in a newspaper of general circulation in Larimer County, State of Colorado. The notice must be dated and contain information relative to how to obtain a copy of the Proposed Amendment. Any first mortgagee who does not deliver a negative response to the Association within 60 days after the date of the notice is deemed to have approved the Proposed Amendment. (Adopted by the Board, July 3, 2006.) POLICY : Amending Governance Standards, Policies and Rules. Except as otherwise required by the Association Documents prior to the adoption or amendment of the PR&GS, the Board shall provide notice of the proposed adoption or amendment to all Owners. Notice shall be provided by regular U.S. or of the proposed adoption or amendment to each Owner at least ten (10) days prior to the meeting at which the Board intends to adopt or amend the PR&GS. Owners may provide written comments or # Page 9 of 30

10 attend the meeting and provide comments prior to the Board s vote. The Board may consider Owner comments, but is not bound to act on those comments. The Board shall have the discretion and final authority to adopt or amend in accordance with the Association Documents and Colorado law. A copy of all Policies adopted or amended by the Board shall be communicated to all Owners. (Adopted by the Board, July 3, 2006, amended by the Board, May 13, 2010.) POLICY E: Association Records, Copying and Inspection of. (C.R.S ) Owners wishing to inspect or copy Association Records shall submit a request to the Association s Secretary or, if applicable, the Association s managing agent. Records of the Association are the historical Archives of the Association and to protect these records, and yet make them available to Members, it is the policy of the Association to maintain the Archive records in written or electronic form, with a preference given to electronic storage so long as such documents can be easily converted to written form within a reasonable time. For purposes of this section, reasonable time shall mean a time period sufficient to allow conversion of documents to written form within five (5) business days following a proper request for review and copying as provided below. It is also the policy of the Association that original records of the Association shall be appropriately protected from damage, loss or spoliation. As such, original documents shall not be subject to unsupervised inspection and review, and the Association will either provide for supervised review of original materials or the provision of photocopies of the requested materials with the requesting Owner responsible for reimbursement of the Association s actual cost for duplication expenses. Document Inspection/Copying Request Form. An Owner seeking to inspect or copy Association records shall submit a copy of the attached Request for Inspection/Copying of Association Records (the Request) to the Association through the Association's Secretary or otherwise, if applicable, the Association s managing agent. The date on which a written request is received by the responsible Association representative shall be deemed the Date of the Request. The Request form is available from the Association s Secretary. Review of Request. Upon receipt of a written Request, the Association's Secretary or otherwise, if applicable, the Association s managing agent shall review the Request and determine in good faith whether the purpose of the Request is proper; whether the Request describes the records with reasonable particularity; and whether the records sought are relevant to the purpose of the Request. In making such determination, consideration shall be given to the following: (a) Purpose of the Request. The reason stated by the requesting Owner must be such that the Request can be considered to be made in good faith and for a proper purpose. For purposes of this section, any Request which, on its face, appears to be made for purposes of commercial marketing, for direct sales campaigns, to financially benefit the Owner or which is made to annoy, harass, or oppress the Association or any Owner or Owners shall not be considered to be made for a proper purpose. Likewise, a Request seeking information, the disclosure of which would constitute an unwarranted invasion of privacy (such as, for example, Owners or Board members Social Security numbers, their vital statistics, their bank account numbers, or other sensitive financial or personal data) shall not be considered made for a proper purpose; (b) Description of Materials Sought. A Request shall state with # Page 10 of 30

11 reasonable particularity the records sought and their connection with the purpose identified as the reason for the Request. For purposes of this section, for example, a Request seeking all Association documents would not be a Request made with reasonable particularity. However, a Request identifying specific classifications of documents (such as minutes, decision, contracts, or policies) that is appropriately limited in time and scope (i.e., seeking records for a specific and pertinent time frame) shall be considered to have the required reasonable particularity; (c) Relevance. Finally, a Request shall seek only documents that are relevant to the stated purpose of the Request. In determining whether the materials sought are relevant to the purposes identified in the Request, the Association s managing agent, if applicable, or else the Association Secretary shall consider the nexus or link between the materials and the Owner s stated purpose, as well as any further explanation provided by the requesting Owner; (d) Production of Records. The Association shall make the requested records available for inspection or copying within five (5) business days of the Date of Request. In the event that the Association determines some part of the Request is improper, it shall nevertheless produce such records as are responsive to the Request to the extent such Request is proper. The Association shall generally identify any records it has elected to withhold in order to preserve the attorney-client privilege as contemplated by CCIOA, and in addition, it shall advise the requesting Owner if any part of the Request is rejected because the Association believes it seeks records for an improper purpose, or does not identify the records sought with reasonable particularity, or if the records sought are not deemed by the Association as relevant to the stated purpose; (e) Where Copies are Requested. Where an Owner requests photocopies of all records requested, the Association's Secretary or otherwise, if applicable, the Association s managing agent shall provide the requesting Owner with a good faith estimate of the approximate number of pages subject to the Request and shall identify the expected actual copying cost per page for which the Owner will be responsible. Prior to any copies being made, the Association may at its election require the requesting Owner to prepay the estimated per page copying expense. Once copies are made and the actual cost per page copying charges are ascertained, the Association shall credit any such prepayment toward the actual costs, and either collect any shortfall or refund any overage. All copying shall be performed within five (5) business days of the Date of Request; (f) Policies Related to Inspection. Inspection of Association records may be accomplished by providing either original records of photocopies of such records. Where original records are to be inspected, this process shall be supervised by any designee of the Association s Secretary or, if applicable, by any designee of the Association s managing agent. No Owner shall remove any original record from the place of inspection, nor shall any Owner cause marks, notes, deletions or any other modification of original documents to be made during any inspection. All inspections shall be scheduled to commence within five (5) business days of the Date of Request. Inspections shall occur during business hours and at the time and place designated by the Association. Supervised inspections of original Association documents shall not exceed two (2) hours in any single session. Where the Association elects to make photocopies of documents available for inspection instead of originals, an Owner may inspect the same for up to five (5) hours per business day. During records inspections, an Owner may designate certain portions of the records for copying, in which case the policies related to copying specified above shall apply from the time such records are designated. This Policy shall not impact, affect, or limit any Owner s rights relative to access to, or inspection and copying of Association records as may exist under Colorado corporate status, # Page 11 of 30

12 in litigation proceedings involving the Association and an Owner, or the power of a Court of appropriate jurisdiction to compel production of records on proof by an Owner of a proper purpose. See Form Request for Inspection / Copying of Mountain Creek Townhome Condominium Association Records to request Association records. (Adopted by the Board, July 3, 2006.) POLICY : Attorney-Client Privilege Preservation After Board Consultation. After final resolution of any matter for which the Board received legal advice or that concerned pending or contemplated litigation, the Board reserves the right at its discretion to preserve the attorney-client privilege in any appropriate manner or to disclose the information. The decision of the Board in this matter shall be final. (Adopted by the Board, July 3, 2006.) POLICY : Attorneys Fees and Cost Incurred in Collecting Past-Due Amounts. (C.R.S ) In the event the Association hires an attorney to assist in the collection of past due assessments or other amounts past due, it shall be entitled to recover reasonable attorneys fees and costs incurred in collecting past due Assessments or other money whether or not a lawsuit is commenced. The Association or any Owner adversely affected by failure to comply with the provisions of CCIOA or an Association Document, other than the payment of Assessments or other money due, may recover its reasonable attorney fees and costs whether or not a lawsuit is commenced. If a lawsuit is commenced, the court shall award the prevailing party reasonable attorney fees and costs incurred in asserting or defending a claim. If a lawsuit is commenced claiming that an Owner violated a provision of the CCIOA or an Association s governing document, and the court finds that the Owner did not commit the alleged violation, the court must award the Owner its reasonable attorney fees and costs incurred in defending the claim and cannot award fees and costs to the Association. The Association cannot add any fees and costs to an Owner s account where the Owner is a prevailing party. (Adopted by the Board, July 3, 2006.) POLICY : Claim Filing Against the Association Master Insurance Policy, Normal Procedure. Any damage to any General Common Element or to any a building shall be immediately reported to a Board Member by the Unit Owner or its Renter upon becoming aware of same. A Board designated representative of the Association shall promptly investigate and evaluate the damage and attempt to determine the cause of same, and the Board may hire experts to assist in such investigation and evaluation. If it appears appropriate (for example, that the damage claim may exceed the deductible) the Board may file a claim under the Association s Master Insurance Policy, and at its option take steps to initiate the repair or mitigation of any further damage to potentially accrue from or after the initial damage. The failure of a Unit Owner or its Renter of a Unit or a building housing his Unit to immediately notify a Board Member of such damage to his Unit or building after such person became aware, or reasonably should have became aware, of such damage shall, at the Board s discretion, make the Unit Owner of the Unit housed by the damaged building personally liable for any additional loss or damage resulting from the failure to promptly notify a Board Member. # Page 12 of 30

13 If the Board determines that the negligence of the Unit Owner, its Renter, visitor, guest or agent was responsible for, or substantially contributed to, the damage, the Unit Owner shall be responsible to pay, or to reimburse the Association if it has previously paid, any deductible under the Association s insurance policy. If the damage caused by negligence or intentional act of the Unit Owner, its Renter, visitor, guest or agent is not covered under the Special Form coverage property and casualty insurance policy carried by the Association, the Unit Owner above shall be liable and responsible for the deductible portion of the damage and its prompt repair. POLICY : Conflict of Interest of Board Members and Board Member Education. (C.R.S and ) Board Members shall identify any conflict of interest that may exist in their participation in business conducted by the Board. A conflict of interest exists where: (a) a contract, decision or other action being considered by the Board would financially benefit: any Board member; or, any person who is a Board member s parent, grandparent, spouse, child, and sibling; or, who is the parent or spouse of one of these persons, or, (b) the applicable Board Member has a direct personal interest in a matter pending before the Board which is not common to a majority of the Unit Owners, as a whole. A Board member who has a conflict of interest regarding any contract, decision or other action shall declare and disclose the conflict of interest in an open meeting before the Board conducts any substantive discussion of the issue. In making such declaration and disclosure, the affected Board member shall: Identify, by agenda item or otherwise with such particularity as necessary to identify the issue in question, the specific pending contract, decision or other action as to which the conflict of interest arises; describe the person or person(s) among those described above in the definition of conflict of interest who would financially benefit from the contract, decision or other action; and disclose the nature and magnitude of the financial benefit that would arise out of or as a function of the Board s decision on the contract, decision or other action. A Board member who has a conflict of interest shall, after an initial presentation of his or her position on the matter, recuse himself or herself from further participation in the discussion of or the decision respecting the applicable matter. A Board member who has a conflict of interest shall not vote on any matter related to considering of the contract, decision or other action implicated by the conflict of interest. A contract, decision or other action of the Board which is adopted subject to a conflict of interest in violation of the identification, disclosure and participation limitations set forth above shall be void and unenforceable. Where the Board identifies a previous contract, decision or other action which was adopted in violation of the identification, disclosure and participation limits above, the Board shall, at an open meeting, take the matter up for reconsideration. At such meeting the Board member with the conflict of interest shall fully identify and disclose the conflict as provided above; and the Board shall discuss the reason(s) why the identification, disclosure or participation limitations above were overlooked or otherwise improperly handled during previous adoption of the decision; and the Board shall discuss whether, after having considered the foregoing considerations, the contract, decision or other action should be ratified by a new vote in compliance with this Policy, and the Board shall conduct a new vote # Page 13 of 30

14 on the question of ratification with the Board member(s) affected by the conflict of interest abstaining from participation in such vote, as required by this Policy. At least annually, the Board of Directors shall cause some internal orientation respecting the role of the Board in the management of the Association, and all other information deemed necessary for the Board members to carry out the business of the Association. (Adopted by the Board, July 3, 2006.) POLICY : Governance Standards, Policies and Rules Enforcement, Including Notice and Hearing Procedures and Schedule of Fines. The Association may levy fines for violations of the Association Documents (i.e. the Declaration, Bylaws, and the Policies, Rules and Governance Standards) in accordance with the following notice and hearing procedures. The Notice of Violation process is as follows: (a) The Association or any Member of the Association may note a violation; if noted by a Member, the Member should report the violation in writing to the Association at the Association s Secretary s address; (b) The Board of Directors will verify the violation and issue a written Notice of a verified violation to the violating Owner; the Notice will describe the nature of the violation, the time frame for correcting the violation (expressed as a certain number of days after the effective date of the Notice as determined below), and that the Association may seek to remedy the violation and otherwise protect its rights as specified in the Association Documents and as provided by law; (c) The Notice, together with a copy of this Policy, will be sent by the Board of Directors via U.S. Mail, first class postage prepaid, addressed to the last registered address of the Owner as listed in the Association's records; the Notice will be considered effective three (3) days* after it is deposited in the mail first class U.S. postage prepaid ( Effective Date ); (d) The Owner receiving the Notice then has the amount of time specified in the Notice to correct the violation; (e) If the violation is not corrected within the specified time, a fine is levied starting on the first day after the time period for correcting the violation expires, subject to the Request for a Hearing provisions below. Any Owner who believes the Notice was sent in error, or who feels there are mitigating circumstances, has the right to request a hearing before the Board. To request a hearing, the Owner must contact the Association in writing within ten (10) business days* after the effective date of the Notice. The Association s Board shall then set a date for the hearing. The hearing may be scheduled by telephonic notice to the Member requesting the hearing and the hearing may be conducted by telephone if the Member cannot be physically present for the hearing. If the hearing, for whatever reason, cannot be held prior to the date when the fine is otherwise scheduled to commence, the date the fine begins shall be extended to the day following the hearing. The Board will decide if any potential conflict of interest exists on a case-by-case basis. The purpose of the hearing is to (1) Determine if there was a mistake made in issuing the Notice; (2) Determine if there are mitigating circumstances; and (3) Make arrangements for bringing the violation into compliance over a period of time if warranted. The hearing process will not and cannot be used to determine if a particular provision of the Association Documents is desirable. The general procedure for the hearing is as follows: (a) The presiding Board member shall (1) Confirm the establishment of a quorum (at least 51% of the Board Membership present in # Page 14 of 30

15 person or telephonically); (2) Explain the Fine Policy and procedures; and (3) Describe the nature of the violation as specified in the Notice; (b) The Owner may then provide rebuttal to the Notice using witnesses or any other information deemed relevant and necessary; (c) After all testimony and other evidence has been presented, the Board shall decide whether or not the Notice was justified, or whether there were mitigating circumstances. If the Board finds the Notice was justified, a fine shall then be assessed by the Board or mutually agreeable arrangements made with the Owner to ensure correction of the violation and compliance in the future. If the Board finds the Notice was not justified, no fine shall be assessed. If an Owner fails to timely correct a violation, the Board has the right to assess a one-time fine in the amount of $ $5, (as the Board deems reasonable and necessary to promote correction of the violation). In addition, the Board may assess daily fines for any continuing or persistent violation in the amount of $ $25.00 per day (as the Board determines to be reasonable and necessary to promote correction of the violation) until the Owner has corrected the violation. The Owner is responsible for notifying the Association in writing if and when the violation has been corrected. Any daily fine shall continue at the stated rate until the earlier of (a) The date on which the Owner gives written notice of correction, regardless of when the violation was corrected, or (b) one hundred twenty (120) days after commencement of the daily fine. If the violation has not been corrected within one hundred twenty (120) days after commencement of a daily fine, or after imposition of a one-time fine, the Association may commence the necessary legal proceedings under the Association Documents or under Colorado law to compel correction of the violation as well as to recover any unpaid fines, court costs, attorneys fees and other Association expenses arising from the violation. Nothing in this paragraph shall preclude the Association from commencing legal proceedings to correct the violation prior to expiration of the one hundred twenty (120) day period. Assessed fines shall be billed to the Owner by U.S. Mail and are legally collectable as Assessments in accordance with the Association Documents and Colorado law. The fines are the personal obligation of the violating Owner and, in addition, constitute a lien against such Owner s Unit. Furthermore, the violating Owner is responsible for all costs and reasonable attorney fees incurred by the Association as a result of the violation. A repeat violation is a violation committed by an Owner which is the same as the original violation committed by that Owner, and which occurs within twelve (12) months after the original violation, and thus an Owner committing a repeat violation is not entitled to the same hearing procedures set forth above. However, the Association shall provide Notice of the repeat violation to the Owner in accordance with the procedures outlined above. If the repeat violation has not been corrected within the time period specified in the Notice for correction of the violation, then the fine (which will be determined by the Board and may be up to double the amount of the fine assessed for the original violation) will commence upon the expiration of the correction time period, notwithstanding any other provisions of this Fine Policy to the contrary. An Owner committing a repeat violation shall have no right to a hearing on such repeat violation before the Board. Fines levied under this Policy are not the Association s exclusive remedy for addressing a violation. Nothing in the Fine Policy precludes the Association from pursuing any other remedy provided under the Association Documents or under Colorado law for correcting the violation. # Page 15 of 30

16 In the event of a dispute between the Association and any Owner, except disputes regarding past due assessments or any matter that may require an injunction, restraining order or protection order, either the Association or an Owner may request mediation by an independent, third-party mediator. A request for mediation (the Request) must be in writing and mailed to the Association or Owner by U.S. Mail, first class postage prepaid to such address for the recipient shown by the public records. The Request shall be considered effective three (3) days* following deposit in the mail. The parties shall make reasonable efforts to select a mediator and schedule mediation of the dispute within thirty (30) days* after the effective date of the Request, or such longer time as the parties may agree upon in writing. If the mediation does not occur within thirty (30) days* (or longer if so agreed in writing), or the parties are unable to settle the dispute through mediation, the Association or Owner may pursue any other lawful remedy allowed by the Association Documents or Colorado law. Fees and costs associated with the mediation, including payment of fees to the mediator, shall be paid as follows: (a) The requesting party shall pay the mediator in advance for the first two (2) hours of mediation; (b) If the mediation lasts more than two (2) hours, the mediator s fees for time beyond the first two (2) hours shall be divided equally between the Association and the Owner(s), and paid at the conclusion of the mediation; (c) The Association and any participating Owner may be represented by their respective attorneys at the mediation. Each party shall pay their respective attorney fees associated with the mediation; (d) If an Owner requests mediation but fails to appear at the date and time scheduled for the mediation, the Owner shall pay all expenses of the Association related to the mediation, including attorney fees and costs, and those expenses shall be assessed against the Owner as part of the Owner s Assessment. A request for mediation shall not suspend or stay any hearing or imposition of fines in accordance with the Fine Policy set forth below. Any fines imposed prior to or after a request for mediation shall remain in place or continue to accrue (in the event of a continuing violation where a daily fine is imposed) pending mediation of the dispute. Unless otherwise agreed at mediation, such fines shall remain legally collectable as Assessments in accordance with the Association Documents and Colorado law. If a lawsuit for the collection of Assessment or enforcement of the Association Documents is commenced prior to receiving a request for mediation, such request shall not suspend or stay the lawsuit. The lawsuit shall continue forward, in addition to the mediation process described above, unless otherwise agreed upon by the parties in writing. (Adopted by the Board, July 3, 2006, amended by the Board, May 13, 2010.) *Note: These times shall be reasonably extended by the Board for Unit Owners who are not regular residents of the United States. POLICY : Disclosures to Owners Required on an Annual Basis. (C.R.S ) The Mountain Creek Townhome Condominium Association shall communicate annually and no later than April 1 of each year, beginning with April 1, 2007, as mandated by Colorado State Law the following information to all Members of record: (a) The Association Name: Mountain Creek Townhome Condominium Association. # Page 16 of 30