2011/06/16 Easement Chicago Title CompanyRECORDING REQUESTED BY:
WHEN RECORDED, MAIL TO:
JACKSON, DeMARCO, TIDUS,
& PECKENPAUGH (FSJ)
2030 Main Street, Suite 1200
Irvine, CA 92614
DOC a 201 1-02GG 157
06/16/2011
Customer Copy Label
The paper to which this label is
affixed has not been compared
with the recorded document
Larri W Ward
County o Riverside
Assessor, County Clerk & Recorder
(Space Above for Recorder's Use)
COMMUNITY DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS
AND RESERVATION OF EASEMENTS
FOR
AUDIE MURPHY RANCH
NOTE: CERTAIN DISPUTES ARISING UNDER THIS COMMUNITY DECLARATION,
INCLUDING DISPU'11,S CONCERNING THE DESIGN OR CONSTRUCTION OF THE
COMMUNITY, SHALL BE SUBMITTED TO JUDICIAL REFERENCE AND/OR
ARBITRATION, WHICH ARE FORMS OF ALTERNATIVE DISPUTE RESOLUTION, IN
ACCORDANCE WITH SECTION 12.4.
5624 405 CRS1552191.15
6ANNED
TABLE OF CONTENTS
(continued)
Page
3.10
Change in Plans............................................................................................... 37
3.11
Maintenance Districts......................................................................................
37
3.12
Water Quality Basins......................................................................................
37
3.13
Sewer Lift Stations ......................................... .................................................
37
3.14
Proposed Elementary and Middle Schools .....................................................
37
3.15
Proposed Public Parks.....................................................................................
37
3.16
Surrounding Uses............................................................................................
38
3.17
Utility Improvements......................................................................................
39
3.18
Reclaimed Water.............................................................................................
39
3.19
Mold................................................................................................................39
3.20
Radon..............................................................................................................
40
3.21
Soil Conditions ........................................ ........................................................
40
3.22
Natural Hazard Zone Disclosures ................ ............................................................
41
3.23
Salt Creek Riparian Area................................................................................
44
3.24
Proposed Public Trails....................................................................................
44
3.25
Community Recreational Facilities................,................................................
44
3.26
Commercial/Industrial Zoning Disclosure......................................................
45
3.27
Airport Proximity Notice................................................................................
46
3.28
Special Districts..............................................................................................
46
3.29
Supplemental Taxes........................................................................................
47
3.30
No Enhanced Protection Agreement..,............................................................
47
3.31
Exterior Lighting Limitations............:............................................................
47
3.32
Additional Provisions......................................................................................
48
ARTICLE IV
THE COMMUNITY ASSOCIATION...........................................................
48
4.1
General Duties And Powers............................................................................
48
4.2
Specific Duties And Powers...........................................................................
48
4.3
Standard of Care, Non -Liability ................. .............
........................................
56
4.4
Membership....................................................................................................
57
4.5
Voting Rights..................................................................................................
59
ARTICLE V
DESIGN REVIEW COMMITTEE.................................................................
60
5.1
Members Of Committee..................................................................................
60
5.2
Powers and Duties.- ......................................... ..............................................
61
5.3
Review of PIans and Specifications................................................................
61
5.4
Meetings and Actions of the Design Review Committee ...............................
64
5.5
No Waiver of Future Approvals......................................................................
64
5.6
Compensation of Members.............................................................................
64
5.7
Inspection of Work..........................................................................................
65
5.8
Variances.........................................................................................................65
5.9
Pre -Approvals .................................................. .......................................
66
5.10
Appeals............................................................................................................66
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6/8/11
TABLE OF CONTENTS
COMMUNITY DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS
AND RESERVATION OF EASEMENTS
FOR
AUDIE MURPHY RANCH
Page
ARTICLE I DEFINITIONS AND INTERPRETATION..................................................... 2
1.1 Definitions .............
1.2 Interpretation................................................................................................... 15
ARTICLE II MAINTENANCE COVENANTS AND USE RESTRICTIONS ................... 16
2.1
Repair and Maintenance ....................
2.2
Single Family Residence..................................................................................
22
2.3
Further Subdivision ...........................
2.4
Resale and Rental............................................................................................
23
2.5
Business and Commercial Activities..............................................................
23
2.6
Nuisances................................................................................ 11... . ...............
24
2.7
Signs................................................................................................................26
2.8
Parking and Vehicular Restrictions ...........................................
2.9
Animal Regulations.......................................................................................
28
2.10
Antenna Restrictions.......................................................................................
28
2.11
Trash................................................................................................................29
2.12
Owner -Installed Improvements..........................................................._............
30
2.13
Mechanics' Liens.............................................................................................
31
2.14
Drainage..................................................................................................
31
2.15
Water Supply System ......................................... .......... ..,._..... ............. ............
32
2.16
Obstructions of light and air; Spite Fences., .................. ....................... ........
32
2.17
Rights of Disabled...........................................................•...............................
32
2.18
Temporary Buildings ............................................ ............. :........ ............. .......
32
2.19
Community Common Property ......................................................................
33
2.20
Mineral Exploration and Extraction................................................................
33
2.21
Stormwater Pollutant Control.........................................................................
33
2.22
Post -Tension Concrete Slabs...........................................................................
33
ARTICLE III DISCLOSURES---
....................... 34
3.1 Community Enhancement Fee Agreement..................................................... 34
3.2 No Representations or Warranties.................................................................. 34
3.3 Specific Plan .................................................................................................... 35
3.4 Electric Power Lines....................................................................................... 35
3.5 Rural Area....................................................................................................... 35
3.6 Notice of Right to Farm.................................................................................. 36
3.7 Archaeological Findings................................................................................. 36
3.8 Offers of Dedication........................................................................................ 36
3.9 Property Lines................................................................................................. 36
_i 5624-840581CCAs155219I.15
61811I
TABLE OF CONTENTS
(continued)
Page
ARTICLE VI PROPERTY EASEMENTS AND RIGHTS ................ 6.1 Easements .........66
6.2
6.3 Right to Grant Easements ............................'......................................_............. 66
Delegation of
6.4 Right f EntryUss.................................. -..•-'....................................................................... 68
ARTICLE ....... ... 68
COMMUNITY ASSOCIATION ACCOUNTS--- 68
7.1 Personal Obligation to Pa AND ASSESSMENTS....... 69
7.2 g y Assessments
Community, Association """'
7.37.4 punts.... • • • • •. 69
Purpose of Assess .........................
7.5 Waiver of ••.................
Use ....... .......................... 70
Limits on Annual
.................................................................
Assessment Increases......... ••-• 70
7.7 7.6 Annual Assessments ... ......................... 70
Capital lmpro........................................................ 72
7 8 vemlent Assessments
Level Asses ..................
Assessment Procedure .................. ............ 74
ARTICLE VIII 74
INSURANCE .................... .....,................
......................................................
8.1 Duty to Obtain Ins ....................... 75
8.2 insurance; Z
Waiver of Claim Types
aim Against Co .
8.3 Right and Duty Community Association . •................................ 75
y Of Owners to Insure . '...................... 76
8.4 Notice of E xp'ration Re ...........
gtsirements....... ................
8.5 ................ 76
Trustee For Policies ................ .........
8.6 Actions ...................
as Trustee ..... ........................
8.7
Annual Insurance Review .."""•.....
Required Waiver ••••-•.•..,.
........................ 77
....................
ARTICLE IX ...........................
DESTRUCTION OF ...•.•.•."'-•""
. 77
9.1 Restoration of the Community
................................. ............. 78
9.2 Damage to Reside ..................
9.3 races-Recflnstruction.............
78
Interior Da .........................................
9.4 Damage ............... .._.. 78
Notice to Owners and Listed........ ......
.........
.............................
Mor[ agees ....................... 79
ARTICLE X b.............................................
EMINENT DOM .•••••..... 79
10.1
Cond .............. 79
emnation of Co '-•"""-"'•
10.2 Community of unity Common Area
79
10.3 Notice to Owners and Mortgagees ........... ...79
ARTICLE XI RIGHTS OF "'
79
11.1 MORTGAGEES..................
General ""' Protections ...... ............................... 80
11.2 Additional Rights is .......................
ARTICLE XII ENFORCEMENT AND DISPUTE RESOLUTION............ 80
12.1 Enforcement of Governing Documents 81
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................................... 81
5624-84058\CCRS\552191,15
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TABLE OF CONTENTS
(continued)
Page
12.2
Delinquent Assessments................................................................................. 83
12.3
Enforcement of Bonded Obligations...............................................................
88
12.4
Disputes With Declarant Parties.....................................................................
88
ARTICLE XIII
DURATION AND AMENDMENT...............................................................
96
13.1
Duration...........................................................................................................96
13.2
Termination and Amendment ..................................................................... 96
ARTICLE XIV
GENERAL PROVISIONS............................................................................. 99
14.1
Mergers or Consolidations.............................................................................. 99
14.2
No Public Right or Dedication........................................................................ 99
14.3
Notices.............................................................................................................99
14.4
Constructive Notice and Acceptance.............................................................. 99
ARTICLE XV
DECLARANT'S AND PARTICIPATING BUILDERS' RIGHTS,
EXEMPTIONS, AND RESERVATIONS....................................................
100
15.1
Construction Rights.......................................................................................
100
15.2
Sales and Marketing Rights..........................................................................
100
15.3
Creating Additional Easements.....................................................................
101
15.4
Design Review Rights and Exemptions........................................................
101
15.5
Development Exemptions............................................................................
101
15.6
Assignment of Rights ............................ .
.......................................................
101
15.7
Amendment...................................................................................................102
15.8
Power of Attorney.........................................................................................
102
15.9
Participation in Community Association......................................................
102
15.10
Declarant Approval of Actions.....................................................................
103
15.11
Declarant's Rights after Sale of all Lots in the Community .........................
103
15.12
Marketing Name............................................................................................
104
ARTICLE XVI
ANNEXATION OF ADDITIONAL PROPERTY .......................................
104
16.1
Additions By Declarant or Participating Builders ........................................
104
16.2
Other Additions.............................................................................................
104
16.3
Rights and Obligations -Added Territory......................................................
104
16.4
Notice of Addition.........................................................................................
104
16.5
De -Annexation and Amendment...................................................................
105
ARTICLE XVII
CITY -REQUIRED PROVISIONS...............................................................
105
17.1
Term..............................................................................................................
105
17.2
County Restrictions.......................................................................................
105
17.3
Additional Provisions....................................................................................
106
EXHIBIT A-1 LEGAL DESCRIPTION OF ANNEXABLE TERRITORY
-iv- 5624-84058\CCRS\552191.15
6/8/11
TABLE OF CONTENTS
(continued)
Page
EXHIBIT A-2 APPROXIMATE LOCATIONS OF ANNEXABLE TERRITORY
EXHIBIT B ARTICLES OF INCORPORATION OF THE COMMUNITY
ASSOCIATION
EXHIBIT C BYLAWS OF THE COMMUNITY ASSOCIATION
EXHIBIT D LEGAL DESCRIPTION OF INITIAL COVERED PROPERTY
EXHIBIT E FUEL MODIFICATION ZONES AND COMBUSTIBLE
RESTRICTED ZONES IN THE INITIAL COVERED PROPERTY
EXHIBIT F MAINTENANCE AREAS IN THE INITIAL COVERED PROPERTY
EXHIBIT G COMMUNITY ASSOCIATION MAINTENANCE AREAS IN THE
INITIAL COVERED PROPERTY
EXHIBIT H FORM OF COMMUNITY RECREATIONAL FACILITIES NOTE
EXHIBIT I LAND USE DESIGNATIONS FROM SPECIFIC PLAN
-V- 5624-84058\CCRS\552191.15
6/8/11
COMMUNITY DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS
AND RESERVATION OF EASEMENTS
FOR
AUDIE MURPHY RANCH
THIS COMMUNITY DECLARATION is made by SUTTER MITLAND 01, LLC,
a Delaware limited liability company ("Declarant'. The capitalized terms used in the Preamble
are defined in Article I.
PREAMBLE:
A. Declarant owns certain real property located in the City of Murrieta, County of
Riverside, California, as described on Exhibit D (`Initial Covered Property").
B. All of the Community will be developed with certain common objectives and
Owners of Lots within the Community will have certain common interests. Any area of the
Annexable Territory added to the Community will be developed with objectives designed to
benefit all real property within the Community, even though the areas are of different character.
This common development scheme created by Declarant imposes reciprocal burdens and
benefits on all of the Community, so that the Community is both burdened and benefited by the
provisions of this Community Declaration.
C. , Declarant has deemed it desirable, for the efficient preservation of the amenities
in the Community, to create a "master planned development" as defined in Section 2792.32 of
Title 10 of the California Code of Regulations that is also a "common interest development"
within the meaning of Section 1351(c) of the California Civil Code, pursuant to the Davis -
Stirling Common Interest Development Act. The Community is planned to constitute
a "subdivision" as defined in Section 11000 of the California Business and Professions Code
containing two (2) or more product types constructed by two (2) or more Participating Builders.
The general plan of development of the Community will include forming a corporation (the
"Community Association') pursuant to the California Nonprofit Public Benefit Corporation Law
to which will be assigned the powers of (1) owning, maintaining and administering portions of
the Community Common Property, (2) administering and enforcing the Governing Documents,
and (3) collecting and disbursing the Assessments and charges hereinafter created. In addition,
the Community Association will exercise such powers required by Section 1363 of the California
Civil Code. The members of the Community Association will be the Owners of Lots in the
Community.
D. It is presently contemplated that the Eastern Municipal Water District, the
Riverside County Flood Control District, the Riverside Conservation Authority, CFD 2011-01
and/or to one or more additional special districts formed by the City (collectively, "Maintenance
Districts") will maintain certain areas within the Community described herein as Maintenance
Areas. However, the Maintenance Districts may be unwilling or unable to maintain the
Maintenance Areas in the future. At the discretion of the County or City (as applicable),
responsibility for owning and maintaining all or portions of the Maintenance Areas may be
-1-
5624-84058\CCRS\552191.15
6/8/11
transferred to the Community Association. Upon transfer of the maintenance responsibility to
the Community Association, the Maintenance Areas will constitute Community Common Area
or Community Association Maintenance Areas (as applicable) and the Community Association
shall be obligated to (1) manage and maintain any such Community Common Area or
Community Association Maintenance Areas, subject to the conditions and restrictions of the
Governing Documents affecting such areas and (2) collect Annual Assessments in the amount
needed to meet its new maintenance obligations.
E. Declarant hereby declares that the Community will be held, sold, conveyed,
encumbered, hypothecated, leased, used, occupied and improved subject to the easements,
restrictions, reservations, rights, covenants, conditions and equitable servitudes contained in this
Community Declaration, all of which are for the purpose of enhancing the attractiveness and
desirability of the Community, in furtherance of a general plan for the protection, maintenance,
subdivision, improvement and sale of the Community and in accordance with the Specific Plan,
any conditions of approval set forth by the County, and any other land use entitlement processes
authorizing the Community. All provisions of this Community Declaration are imposed as
equitable servitudes on the Community. The covenants, conditions, restrictions, rights,
reservations, easements and equitable servitudes set forth herein will (1) run with and burden the
Community and will be binding upon all Persons having or acquiring any interest in the
Community or any part thereof, and their heirs, successors and assigns; (2) inure to the benefit of
every portion of the Community and any interest therein; (3) inure to the benefit of and be
binding upon Declarant, the Participating Builders, and their respective successors -in -interest,
each Owner and each Owner's successors -in -interest; and (4) may be enforced by Declarant, any
Participating Builder, any Subassociations, any Owner and the Community Association.
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. Unless otherwise expressly provided, the following words and
phrases when used in this Community Declaration have the following meanings.
1.1.1. ACS. ACS means Audie Murphy Ranch Community Services, a
California nonprofit corporation (formed pursuant to the California Nonprofit Public Benefit
Corporation Law), and its successors and assigns, formed to provide various community services
for the Community.
1.1.2. Annexable Territory. Annexable Territory means the real property
described and approximately depicted on Exhibits A-1 and A-2 which may be made subject to
this Community Declaration pursuant to Article XVI. Any references in this Community
Declaration to Annexable Territory are references to the Annexable Territory as a whole and to
portions thereof.
1.1.3. Annual Assessment. Annual Assessment means a charge against the
Owners and their Lots representing their share of the Common Expenses. The Annual
Assessment is a regular assessment as described in California Civil Code Section 1366.
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5624-84058\CCRS\552191.15
6/8/11
1.1.4. Articles. Articles means the Articles of Incorporation of the
Community Association currently in effect. A copy of the Articles is attached as Exhibit B.
1.1.5. Assessment. Assessment means any Annual Assessment, Capital
Improvement Assessment, Reconstruction Assessment and Special Assessment.
1.1.6. Board or Board of Directors. Board or Board of Directors means the
Community Association's Board of Directors.
1.1.7. Budget. Budget means a written, itemized estimate of the Community
Association's income and Common Expenses prepared pursuant to the Bylaws. The phrase
DRE-reviewed Budget shall mean the initial budget of the Community Association which was
reviewed by the DRE as part of its review of the Community.
1.1.8. Bylaws. Bylaws means the Bylaws of the Community Association as
currently in effect. A copy of the Bylaws as initially adopted by the Board is attached as
Exhibit C.
1.1.9, Capital Improvement Assessment. Capital Improvement Assessment
means a charge against the Owners and their Lots representing their share of the Community
Association's cost for installing or constructing capital Improvements on the Community
Common Area. Capital Improvements Assessments shall be levied in the same proportion as
Annual Assessments. However, Capital Improvement Assessments for a particular Special
Benefit Area shall be levied in the same proportion as Annual Assessments only against Owners
responsible for such Special Benefit Area. Capital Improvement Assessments are special
assessments as described in California Civil Code Section 1366.
1.1.10. City. City means the City of Menifee, California, and its various
departments, divisions, employees and representatives.
1.1.11. Close of Escrow. Close of Escrow means the date on which a deed
conveying a Lot is Recorded in a transaction entered into under authority of a Final Subdivision
Public Report issued by the DRE. The term "Close of Escrow" shall not apply to any transfer of
real property that is exempt from the Final Subdivision Public Report requirement, including
without limitation "bulk sales" pursuant to California Business & Professions Code Section
11010.35 (which includes all transfers of real property between Declarant and any successor to
any rights of the Declarant, or any Participating Builder, or transfers between Participating
Builders), and transfers by judicial foreclosure, power of sale or deed in lieu.
1.1.12. Combustible Restricted Zone. Combustible Restricted Zone is
defined in Section 2.1.1(1).
1.1.13. Common Expenses. Common Expenses means those expenses for
which the Community Association is responsible under the Governing Documents. Common
Expenses include the actual and estimated costs of and reserves for maintaining, managing and
operating the Community Common Property and Improvements thereon all as described in the
Governing Documents, which include the following:
-3-
5 624-8405 8\CCRS\552191.15
6/8/1 1
(a) Community Common Property and Improvements thereon,
including maintenance of Fuel Modification Zones, Community Walls, landscape services and
other services benefiting the Community Common Area, except for Community Common Area
that is maintained by a Maintenance District or other governmental entity;
(b) The Community Recreational Facilities Charges, and the
operating costs for the Community Recreational Facilities;
(c) Reasonable reserves for the Community Recreational Facilities,
the collection of which shall commence on the first day of the first month following the date of
Recordation of a Notice of Completion on such Community Recreational Facilities under
California Civil Code Section 3093, as required under Title 10, California Code of Regulations
Section 2792.320)(11);
(d) The cost of complying with NPDES requirements pursuant to
the requirements of this Community Declaration, as applicable;
(e) The cost of all utilities and mechanical and electrical equipment
serving the Community Common Property, utilities which serve individual Lots but which are
subject to a common meter, trash collection and removal (as applicable to the Community
Common Property);
(f) The costs and fees attributable to managing and administering
the Community Association, compensating the Manager, accountants, attorneys and employees,
all insurance covering the Community and the Directors, officers and agents of the Community
Association, and bonding the members of the Board;
(g) Unpaid Special Assessments, Reconstruction Assessments and
Capital Improvement Assessments;
(h) Taxes paid by the Community Association;
(i) Amounts paid by the Community Association for discharge of
any lien or encumbrance levied against the Community; and
0) All other expenses incurred by the Community Association for
the Community, for the common benefit of the Owners.
1.1.14. Community. Community means (a) the Initial Covered Property, and
(b) each Phase described in a Final Subdivision Public Report, Notice of Addition or a
Supplemental Community Declaration. The Community is a "common interest development"
and a "planned development" as defined in Sections 1351(c) and 1351(k) of the California Civil
Code. Any references in this Community Declaration to the Community are references to the
Community as a whole and to portions thereof. Provided, however, that the Community
Association shall have no obligation to perform any maintenance on any part of the real property
constituting the Community until the first Close of Escrow in the Phase that includes such real
property.
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1.1.15. Community Association. Community Association means AUDIE
MURPHY RANCH COMMUNITY ASSOCIATION, a California nonprofit corporation
(formed pursuant to the California Nonprofit Public Benefit Corporation Law), and its
successors -in -interest. The Community Association is an "association" as defined in Section
1351(a) of the California Civil Code or its successor statutes.
1.1.16. Community Association Accounts. Community Association Accounts
means the accounts created for Community Association receipts and disbursements pursuant to
Article VII.
1.1.17. Community Association Maintenance Area. Community Association
Maintenance Area means those Improvements in residential Lots or other real property which are
not owned in fee by the Community Association, but which are designated for maintenance by
the Community Association.
(a) Generally. The Community Association Maintenance Areas in a
Phase may include one or more of the following:
streets in the Community;
(1) Parkway landscaping in the public right of way and along
(ii) Entry monumentation;
(ill) Portions of certain Community Walls that are designated
in the Governing Documents for partial maintenance by the Community Association; and
(iv) Landscaping on the land gifted to the Pechanga Band of
Luiseno Indians.
(b) Community Association Maintenance Areas in the Initial
Covered Property. The Community Association Maintenance Areas in the Initial Covered
Property are depicted on Exhibit G. Except as provided in Section 2.1.2(b) below, the obligation
to maintain a Community Association Maintenance Area in a particular Phase shall not
commence until after the commencement of Annual Assessments in the Phase, notwithstanding
its depiction on Exhibit G.
(c) Community Association Maintenance Areas in Future Phases.
Community Association Maintenance Areas in each future Phase shall include the items listed in
subparagraphs (a)(i) through (a)(iv) above as applicable to such Phase. Declarant may designate
additional Community Association Maintenance Areas in a Notice of Addition or Supplemental
Community Declaration.
1.1.18. Community Common Area. Community Common Area means real or
personal property and Improvements which are owned in fee by the Community Association and
made subject to the Governing Documents. Community Common Area Improvements may
eventually include paseos, open space, greenbelts, entry monumentation, Fuel Modification
Zones, Combustible Restricted Zones, Community Walls designated in the Governing
Documents to be owned and maintained in their entirety by the Community Association, and the
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5624-84058\CCRS\552191.15
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Community Recreational Facilities, as they are annexed to the Community. Any references in
this Community Declaration to Community Common Area are references to the Community
Common Area as a whole and to portions thereof. The Community Common Area is "common
area" as defined in Section 1351(b) of the California Civil Code. Additional Community
Common Area may be annexed to the Community pursuant to Article XVI. Except as provided
in Section 2.1.2(b) below, the obligation to maintain Community Common Area in a particular
Phase shall not commence until after the commencement of Annual Assessments in the Phase, or
as otherwise directed under the Governing Documents, notwithstanding its depiction in this
Community Declaration.
1.1.19. Community Common Property. Community Common Property
means, collectively, all the Community Common Area and Community Association Maintenance
Areas. Any references to the Community Common Property are references to the Community
Common Property as a whole and to portions thereof.
1.1.20. Community Declaration. Community Declaration means this
instrument as currently in effect, and as amended from time to time.
1.1.21. Community Recreational Facilities. Community Recreational
Facilities means, collectively, the real property, Improvements and related equipment designated
as such in a Supplemental Community Declaration or Notice of Addition. If constructed as
currently planned, Community Recreational Facilities may include Improvements such as a pool,
spa, wading pool, community building, play structure, seating and related Improvements. The
Community Recreational Facilities shall be conveyed to the Community Association to be
owned and operated as private amenities for the benefit of the Owners of Lots in the Community
and their respective Families, tenants and guests. The Community Recreational Facilities will be
a part of the Community Common Area when conveyed to the Community Association.
1.1.22. Community Recreational Facilities Charges. Community
Recreational Facilities Charges means and refers to a component of Common Expenses
representing the monthly portion of the installments of principal and interest due under the
Community Recreational Facilities Note(s), together with amounts necessary to establish a 5%
Purchase Price Sinking Fund to cover defaults by Owners in such payments of principal and
interest, all in accordance with Title 10 California Code of Regulations Section 27920)(11).
Community Recreational Facilities Charges will be levied against every Lot in the Community
as a mandatory element of Annual Assessments, and in addition to a proportionate share of the
operating costs and reserves for the Community Recreational Facilities. An Owner's non-use of
the Community Recreational Facilities does not excuse the Owner from paying the Community
Recreational Facilities Charges element of the Annual Assessments.
1.1.23. Community Recreational Facilities Note. Community Recreational
Facilities Note means and refers to any unsecured promissory note in favor of Declarant, as
"Holder," executed by the Community Association, as "Maker," evidencing amounts owing to
Declarant for the purchase of the Improvements constituting the Community Recreational
Facilities. The Community Recreational Facilities Note shall be in substantially the form
attached hereto as Exhibit H. The principal amount of the Community Recreational Facilities
Note shall represent the "Purchase Price" under the Community Recreational Facilities Purchase
-6-
5624-8405 8\CCRS\552191.15
6/8/11
Agreement, and it shall consist of Declarant's actual hard costs incurred in constructing the
Improvements making up the Community Recreational Facilities, as reasonably determined by
Declarant ("Declarant's Costs"). While the Community Association shall be conveyed fee title
to the land and Improvements constituting the Community Recreational Facilities, the
Community Association will not be required to purchase the land on which the Community
Recreational Facilities are constructed, and the principal amount of the Community Recreational
Facilities Note shall not include the cost of such land. The principal amount shall be set forth in
the Community Recreational Facilities Note at such time as the Declarant's Costs are determined
from executed construction contracts, invoices and/or other reasonable documentary evidence
provided by Declarant. The Community Association, acting by and through its Board of
Directors, shall be obligated to execute and deliver to the Declarant the Community Recreational
Facilities Note no later than the date on which Declarant conveys fee title to the Community
Recreational Facilities to the Community Association.
1.1.24. Community Recreational Facilities Purchase Agreement.
Community Recreational Facilities Purchase Agreement means and refers to the Purchase
Agreement between Declarant, as "Seller," and the Community Association, as "Buyer,"
evidencing the agreement between the parties, pursuant to Title 10, California Code of
Regulations Section 2792.320), concerning the purchase and sale of Community Recreational
Facilities.
1.1.25. Community Wall. Community Wall means any sound wall, retaining
wall, or fence in the Community that is maintained entirely or partially by the Community
Association. Walls maintained entirely by the Owners are not Community Walls. The
obligation to maintain Community Walls in a particular Phase will not arise until the
commencement of Annual Assessments in the Phase or as otherwise directed in this Community
Declaration, or in a Supplemental Community Declaration. Community Walls in the
Community in general (a) are constructed on or along a tract boundary; or (b) separate a Lot
from Community Common Area, including Community Recreational Facilities and paseos, or
public property including parks; or (c) are constructed entirely within Community Common
Area, or (d) are designated as a Community Wall by Declarant in this Community Declaration,
or in a Supplemental Community Declaration. Unless designated as such in a Supplemental
Community Declaration, view fences separating Lots from the Salt Creek Riparian Area or from
other open space are not Community Walls, as they shall be maintained entirely by the Owners
of the Lots that are enclosed thereby.
1.1.26. County. County means Riverside County, California, and its various
departments, divisions, employees and representatives. If the Community is annexed to the City,
then the term "County" shall include the City where appropriate.
1.1.27. Declarant. Declarant means SUTTER MITLAND 01, LLC, a
Delaware limited liability company, its successors and any Person to which it shall have assigned
any of its rights by an express written assignment. As used in this Section, "successor" means a
Person who acquires Declarant or substantially all of Declarant's assets by sale, merger, reverse
merger, consolidation, sale of stock or assets, operation of law or otherwise. Declarant shall
determine in its sole discretion the time, place and manner in which it discharges its obligations
and exercises the rights reserved to it under this Community Declaration. Declarant is a
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"builder" as described in California Civil Code Section 1375. Participating Builders are not
Declarants except to the extent that they are assigned one or more Declarant rights in a Recorded
assignment by Declarant.
1.1.28. Declarant's Costs. Declarant's Costs is defined in Section 1.1.23
above.
1.1.29. Design Guidelines. Design Guidelines mean the rules or guidelines
setting forth procedures and standards for submission of plans for Design Review Committee
approval.
1.1.30. Design Review Committee or Committee. Design Review Committee
or Committee means the Design Review Committee created in accordance with Article V.
1.1.31. Disclosure Report. Disclosure Report has the meaning given it in
Section 3.22.
1.1.32. DRE. DRE means the California Department of Real Estate and any
department or agency of the California state government which succeeds to the DRE's functions.
1.1.33. Family. Family means natural individuals, related or not, who live as a
single household in a Residence.
1.1.34. Fannie Mae. Fannie Mae means the Federal National Mortgage
Association, a government -sponsored private corporation established pursuant to Title VIII of
the Housing and Urban Development Act of 1968 and its successors.
1.1.35. FHA. FHA means the Federal Housing Administration of the United
States Department of Housing and Urban Development and its successors.
1.1.36. Final Subdivision Public Report. Final Subdivision Public Report
means a Final Subdivision Public Report that is issued by the DRE for a particular Phase of the
Community.
1.1.37. Fire Control Plan. Fire Control Plan means the fuel modification
maintenance notes and exhibits for the Community. Copies of the Fire Control Plan are on file
with the Community Association and the County.
1.1.38. Fiscal Year. Fiscal Year means the fiscal accounting and reporting
period of the Community Association.
1.1.39. Freddie Mac. Freddie Mac means the Federal Home Loan Mortgage
Corporation created by Title 11 of the Emergency Home Finance Act of 1970 and its successors.
1.1.40. Fuel Modification Zone. Fuel Modification Zone means portions of
the Community Common Area or other real property designated by the County for maintenance
by the Community Association or Owners in accordance with the Fire Control Plan.
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1.1.41. Ginnie Mae. Ginnie Mae means the Government National Mortgage
Community Association administered by the United- States Department of Housing and Urban
Development and its successors.
1.1.42. Governing Documents. Governing Documents means this Community
Declaration, the Articles, Bylaws, Design Guidelines, Rules and Regulations, Supplemental
Community Declarations and Notices of Addition.
1.1.43. Improvement. Improvement means any structure and any
appurtenance thereto. The Design Review Committee may identify additional items that are
Improvements.
1.1.44. Includes, Including. Whether capitalized or not, includes and
including means "includes without limitation" and "including without limitation," respectively.
1.1.45. Initial Covered Property. Initial Covered Property means all of the
real property described on Exhibit D attached hereto. The Initial Covered Property is not a
Phase, although it may consist of one or more Phases as they are described in the applicable
Final Subdivision Public Reports.
1,1.46. Lot. Lot means any residential Lot or parcel of land shown on any
Recorded subdivision map or Recorded parcel map of the Community, except the Community
Common Area owned in fee simple by the Community Association.
1.1.47. Maintain, Maintenance. Whether capitalized or not, maintain and
maintenance mean "maintain, repair and replace" and "maintenance, repair and replacement,"
respectively; provided, however, that maintain or maintenance shall not include repair and
replace(ment) where the context or specific language of this Community Declaration provides
another meaning.
1.1.48. Maintenance Areas. Maintenance Areas means any public real
property, including any Improvements or landscaping thereon, within or adjacent to the
Community, which is owned and maintained by a Maintenance District and for which the
Community Association has "back-up" maintenance responsibilities as described in this
Community Declaration. The Salt Creek Riparian Area is not a Maintenance Area. The
approximate locations of the Maintenance Areas in the Initial Covered Property are shown on
Exhibit F attached hereto. Additional Maintenance Areas may be designated in a Notice of
Addition or Supplemental Community Declaration. Those portions of Maintenance Areas that
have been transferred to the Community Association for maintenance purposes on a particular
Transfer Date shall constitute either Community Common Area or Community Association
Maintenance Area on such Transfer Date, and they shall thereafter be subject to the covenants,
conditions and restrictions on Community Common Property described in the Governing
Documents. Any references in this Community Declaration to Maintenance Areas are references
to the Maintenance Areas as a whole and to portions thereof.
1.1.49. Maintenance District. Maintenance District means, collectively, the
Eastern Municipal Water District, the Riverside County Flood Control District, Riverside
Conservation Authority, CFD 2011-01, and Landscape & Lighting Maintenance Districts or
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other special assessment districts that may be formed by the City to take responsibility for
maintenance of Improvements in the Community.
1.1.50. Maintenance Guidelines. Maintenance Guidelines means any current
written guidelines, setting forth procedures and standards for the maintenance and operation of
Community Common Property or the Lots. Maintenance Guidelines may be provided by
Declarant, a Participating Builder, by the Community Association or by any governmental
agency. Maintenance Guidelines include any maintenance manual initially prepared at
Declarant's or Participating Builder's direction and containing recommended frequency of
inspections and maintenance activities for components of the Community Common Property or
pertaining to a Residence or Lot.
1.1.51. Manager. Manager means the Person retained by the Community
Association to perform management functions of the Community Association as limited by the
Governing Documents and the terms of the agreement between the Community Association and
the Person.
1.1.52. Membership. Membership means the voting and other rights,
privileges, and duties established in the Governing Documents for members of the Community
Association.
1.1.53. Model Leaseback Agreement. Model Leaseback Agreement means a
lease or rental agreement pursuant to which the Declarant or Participating Builder is permitted to
use and occupy a Model Lot as a sales model, office, design center, or for a similar purpose, after
the Close of Escrow for its sale.
1.1.54. Model Lot. Model Lot means a Lot that is being used by Declarant or a
Participating Builder as a sales model, office, design center, or for a similar purpose, with or
without a Model Leaseback Agreement.
1.1.55. Model Lot Sale. Model Lot Sale means the initial sale of a Model Lot
by Declarant or a Participating Builder in a transaction requiring a Final Subdivision Public
Report, subject to a Model Leaseback Agreement.
1.1.56. Model Phase. Model Phase means a Phase that contains one or more
Model Lots. A Model Phase may include one or more Production Lots in addition to the Model
Lots.
1.1.57. Mortgage. Mortgage means any Recorded document, including a deed
of trust, by which a Lot, Lots, or Community Common Area is hypothecated to secure
performance of an obligation.
1.1.58. Mortgagee. Mortgagee means a Person to whom a Mortgage is made,
or the assignee of the Mortgagee's rights under the Mortgage by a recorded instrument. For
purposes of this Community Declaration, the term Mortgagee shall include a beneficiary under a
deed of trust.
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1.1.59. Mortgagor. Mortgagor means a person who has mortgaged- his
property. For purposes of this Community Declaration, the term Mortgagor shall include a
trustor under a deed of trust.
1.1.60. Neighborhood. Neighborhood means an area in the Community that is
subject to a Neighborhood Declaration. A Neighborhood may include one or more Phases.
1.1.61. Neighborhood Declaration. Neighborhood Declaration means a
Declaration of Covenants, Conditions and Restrictions which solely affects a Neighborhood.
Neither this Community Declaration nor any Supplemental Community Declaration is a
Neighborhood Declaration.
1.1.62. Neighborhood Supplemental Declaration. Neighborhood
Supplemental Declaration means a Recorded instrument solely affecting a Neighborhood or a
portion thereof, which imposes conditions, covenants, or restrictions or reserves easements in
addition to the conditions, covenants, restrictions and easements established in the Neighborhood
Declaration. A Neighborhood Supplemental Declaration may also annex real property to the
coverage of the Neighborhood Declaration. A Supplemental Community Declaration is not a
Neighborhood Supplemental Declaration.
1.1.63. Notice and Hearing. Notice and Hearing means written notice and a
hearing before the Board as provided in the Bylaws.
1.1.64. Notice of Addition. Notice of Addition means an instrument Recorded
pursuant to Article XVI to annex additional real property to the Community. A Notice of
Addition is a Supplemental Community Declaration that describes real property to be annexed to
the Community and the coverage of this Community Declaration.
1.1.65. Official Records. Official Records means the Official Records of the
County.
1.1.66. Operating Account. Operating Account means the Community
Association Maintenance Account(s) for the deposit of funds to pay that portion of the Common
Expenses allocated for the daily operation of the Community Association.
1.1.67. Owner. Owner means the Person or Persons, including Declarant and
any Participating Builder, holding fee simple interest to a Lot. Each Owner has a Membership in
the Community Association. The term "Owner" includes sellers under executory contracts of
sale but excludes Mortgagees. The term "Owner" may be expanded in a Supplemental
Community Declaration to include other Persons.
1.1.68. Participating Builder. Participating Builder means a Person
designated by Declarant as a Participating Builder in a Recorded document. Those Persons who
Declarant intends to designate as Participating Builders are Persons who acquire a portion of the
Community for the purpose of developing such portion for resale to the general public. The term
"Participating Builder" does not include Declarant, although Declarant may also develop
portions of the Community for resale to the general public. Each Participating Builder is a
"builder" as defined in California Civil Code Section 1375.
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1.1.69. Party Wall. Party Wall means any wall or fence that separates adjacent
Lots. Parry Walls are not Community Walls, unless so designated in this Community
Declaration or in a Notice of Addition or Supplemental Community Declaration.
1.1.70. Person. Person means a natural individual or any legal entity
recognized under California law. When the word "person" is not capitalized, the word refers
only to natural persons.
1.1.71. Phase. Phase means all or any portion of the real property that has been
made subject to this Community Declaration and described in a Final Subdivision Public Report
issued by the DRE, unless otherwise provided in the respective Notice of Addition,
Supplemental Community Declaration or in this Community Declaration. Notwithstanding the
foregoing, a Phase may also consist solely of Community Common Property, if designated as
such in a Recorded Notice of Addition or Supplemental Community Declaration encumbering
such Community Common Property. The Initial Covered Property is not a Phase. Declarant
may otherwise define the term "Phase" in a Notice of Addition or Supplemental Community
Declaration.
1.1.72. Production Lot. Production Lot means a Lot that is not a Model Lot.
1.1.73. Purchase Price Sinking Fund. Purchase Price Sinking Fund means a
sinking fund that will be established by the Community Association, into which will be
deposited a portion of the total Community Recreational Facilities Charges, all in accordance
with Title 10, California Code of Regulations Section 2792.320)(11). The Purchase Price
Sinking Fund will be used to cover Owner delinquencies in payment of principal and interest
under the Community Recreational Facilities Notes, and when the balance of the Purchase Price
Sinking Fund equals the outstanding principal balance of the Community Recreational Facilities
Note(s) it shall be used to pre -pay such outstanding principal.
1.1.74. Reconstruction Assessment. Reconstruction Assessment means a
charge against the Owners and their Lots representing their share of the Community
Association's cost to reconstruct any Improvements on the Community Common Area. Such
charge shall be levied among all Owners and their Lots in the same proportions as Annual
Assessments. Reconstruction Assessments are "special assessments" as described in California
Civil Code Section 1366.
1.1.75. Record or File. Record or File means, with respect to any document,
the entry of such document in Official Records.
1.1.76. Reserve Account. Reserve Account means the Community Association
Account(s) for the deposit of funds to pay that portion of the Common Expenses allocated (a) for
the future repair and replacement of, or additions to, structural elements, mechanical equipment
and other major components of Community Association -maintained Improvements, and (b)
amounts necessary to cover the deductibles under all insurance policies maintained by the
Community Association.
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1.1.77. Residence. Residence means the dwelling unit constructed on a Lot,
excluding the garage area, which is designed and intended for use and occupancy as a residence
by a single Family.
1.1.78. Right to Repair Law. Right to Repair Law means Division 2, Part 2,
Title 7 (commencing with Section 895) of the California Civil Code.
1.1.79. Right to Repair Law Claim. Right to Repair Law Claim means any
claim brought by one or more Owners or by the Community Association against one or more
Declarant Parties (as defined in Section 12.4) on any design or construction defect matters that
are governed by the Right to Repair Law.
1.1.80. Rules and Regulations. Rules and Regulations or "Rules" means the
current rules and regulations for the Community.
1.1.81. Salt Creek Riparian Area. Salt Creek Riparian Area means the
riparian habitat area located in Parcel 13 of Parcel Map No. 32269 along the north side of
Newport Road. The Salt Creek Riparian Area will not be part of the Community Common
Property, nor will it be a Maintenance Area. It will eventually be turned over to the City for
maintenance in accordance with a Recorded restrictive covenant.
1.1.82. Special Assessment. Special Assessment means (a) a reasonable
monetary penalty imposed against an Owner and the Owner's Lot in accordance with California
Civil Code Section 1367.1(e), as a disciplinary measure for the failure of an Owner to comply
with the Governing Documents, or (b) a monetary charge imposed against an Owner and the
Owner's Lot in accordance with California Civil Code Section 1367.1(d) to recover costs
incurred by the Community Association for reimbursement of costs incurred in the repair of
damage to Community Common Property, all as further described in this Community
Declaration.
1.1.83. Special Benefit Area. Special Benefit Area means a group of Lots, the
Owners of which are designated to receive the exclusive or disproportionate benefit of specified
Community Common Property or services provided by the Community Association. Costs
attributable to Special Benefit Area Improvements and services will be assessed to the Lots in
the Special Benefit Area. There are no Special Benefit Areas in the Initial Covered Property as
of the date this Community Declaration is Recorded. Declarant may designate Special Benefit
Areas in any Phase or Phases (or portions thereof) in one or more Recorded Notices of Addition
or Supplemental Community Declarations.
1.1.84. Special Benefit Area Assessment Component. Special Benefit Area
Assessment Component means that portion of the Annual Assessments of the Community
Association that is levied against the Lots in and applied exclusively to a particular Special
Benefit Area. A Special Benefit Area Assessment Component shall be assessed to the Lots
designated in a Notice of Addition or in a Supplemental Community Declaration as part of a
Special Benefit Area. The Special Benefit Area Assessment Component consists of those
maintenance and operating costs, reserves and administrative costs that are fairly allocable to the
Improvements or services benefiting the Special Benefit Area. Special Benefit Area Assessment
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Components shall be allocated among the Lots in a Special Benefit Area in accordance with
Section-7.6.5.
1.1.85. Special Benefit Area Operating Account. Special Benefit Area
Operating Account means for each Special Benefit Area, a separate Special Benefit Area
Operating Account for the deposit of funds to pay that portion of the Common Expenses
allocated for the daily operating costs of the Special Benefit Area.
1.1.86. Special Benefit Area Reserve Account. Special Benefit Area Reserve
Account means for each Special Benefit Area, a separate Special Benefit Area Reserve Account
for the deposit of reserves attributable to that Special Benefit Area.
1.1.87. Specific Plan. Specific Plan means Specific Plan No. 209, Amendment
No. 4, dated January 25, 2005, as approved by the County and as subsequently amended.
1.1.88. Subassociation. Subassociation means any California corporation or
unincorporated association, or its successor, established in connection with a Neighborhood
Declaration, the membership of which is composed of Owners of Lots within a portion of the
Community. The Community Association is not a Subassociation.
1.1.89. Subassociation Property. Subassociation Property means real or
personal property that is designated by the Declarant or any applicable Participating Builder to
be part of a Neighborhood and maintained by a Subassociation in accordance with the applicable
Neighborhood Declaration or Neighborhood Supplemental Declaration. Any references in this
Community Declaration to Subassociation Property are references to the Subassociation Property
as a whole and to portions thereof. Subassociation Property satisfies the definition of "common
area" in Section 1351(b) of the California Civil Code.
1.1.90. Supplemental Community Declaration. Supplemental Community
Declaration means an instrument Recorded by Declarant from time to time against all or any
portion of the Community in order to supplement, modify, or clarify conditions, covenants,
restrictions or easements established under this Community Declaration. A Supplemental
Community Declaration may affect one or more Lots and Community Common Area, and it may
annex real property to the Community and the coverage of this Community Declaration. A
Participating Builder may only Record a Supplemental Community Declaration against real
property that it owns, provided it obtains the prior written consent of the Declarant. A
Supplemental Community Declaration may modify this Community Declaration only as it
applies to the property encumbered by the Supplemental Community Declaration.
1.1.91. Telecommunications Facilities. Telecommunications Facilities means
Improvements constructed in the Community, including cables, conduits, ducts, vaults,
connecting hardware, wires, poles, transmitters, towers, antennae and other devices now existing
or that may be developed in the future to provide Telecommunication Services to the
Community.
1.1.92. Telecommunications Services. Telecommunications Services means
the reception, distribution or transmission of video, audio, data, telephony, all related vertical
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services, and any other similar services now existing or that may be developed in the future.
Declarant may expand this definition in any Supplemental Community Declaration.
1.1.93. Transfer Date. Transfer Date means the date on which the applicable
Maintenance District transfers its responsibility for maintaining a Maintenance Area to the
Community Association, and requires the Community Association to manage and maintain such
Maintenance Area.
1.1.94. VA. VA means the Department of Veterans Affairs of the United States
of America and any department or agency of the United States government which succeeds to
the VA's function of issuing guarantees of notes secured by Mortgages on residential real estate.
1.2 INTERPRETATION.
1.2.1. General Rules. This Community Declaration shall be liberally
construed to effectuate its purpose of creating a uniform plan for subdividing, maintaining,
improving and selling the Community. As used in this Community Declaration, the singular
includes the plural and the plural the singular. The masculine, feminine and neuter each includes
the other, unless the context dictates otherwise.
1.2.2. Articles, Sections and Exhibits. The Article and Section headings are
inserted for convenience only and may not be considered in resolving questions of interpretation
or construction. Unless otherwise indicated, any references in this Community Declaration to
articles, sections or exhibits are to Articles, Sections and Exhibits of this Community
Declaration. Except for Exhibits B, C and H, all of the Exhibits attached to this Community
Declaration are incorporated in this Community Declaration by this reference. The locations and
dimensions of any Improvements depicted on the Exhibits attached hereto or attached to any
Notice of Addition or Supplemental Community Declaration are approximate only and the as -
built location and dimension of any such Improvements shall control.
1.2.3. Priorities and Inconsistencies — Articles, Bylaws, Rules and
Regulations. If there are conflicts or inconsistencies between this Community Declaration and
the Articles, Bylaws, or Rules and Regulations, then the provisions of this Community
Declaration shall prevail; however, the conflicting documents shall be construed to be consistent
with this Community Declaration to the extent possible.
1.2.4. Priorities and Inconsistencies — Notices of Addition, Supplemental
Community Declarations, Neighborhood Declarations. As each Phase of the Community is
developed, Declarant, or Declarant and a Participating Builder may, concerning that Phase,
Record one (1) or more Supplemental Community Declarations which shall designate the use
classifications within the areas affected and which may supplement this Community Declaration
with such additional covenants, conditions, restrictions and land uses as Declarant may deem
appropriate for the real property described therein. The provisions of any Supplemental
Community Declaration may impose such additional, different or more restrictive conditions,
covenants, restrictions, land uses and limitations as Declarant, or Declarant and the Participating
Builder may deem advisable, taking into account the particular requirements of each Phase. If
there is any conflict between any Notice of Addition or Supplemental Community Declaration,
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and the Community Declaration, the Notice of Addition or Supplemental Community
Declaration shall control concerning the real property encumbered thereby. If there is any
conflict between any Neighborhood Declaration and the provisions of the Community
Declaration or applicable Notice of Addition or Supplemental Community Declaration, the
Community Declaration and applicable Notice of Addition or Supplemental Community
Declaration shall control, although such documents shall be construed to be consistent with one
another to the extent possible. A Neighborhood Declaration may, but need not, provide for the
establishment of a Subassociation. Notwithstanding the foregoing, if a Neighborhood
Declaration imposes on a Neighborhood restrictions or covenants that are more restrictive than
those set out in this Community Declaration or applicable Supplemental Community
Declarations, then the more restrictive provisions shall control in the Neighborhood. If a
Subassociation is established to govern the Neighborhood, the Neighborhood Declaration may
require the Subassociation to undertake some or all of the maintenance or other obligations that
are imposed on Owners under the Governing Documents, and in such event, the Neighborhood
Declaration shall control as to such maintenance or other obligations.
1.2.5. Severability. The provisions of this Community Declaration are
independent and severable. A determination of invalidity or partial invalidity or unenforceability
of any one provision of this Community Declaration by a court of competent jurisdiction does
not affect the validity or enforceability of any other provisions of this Community Declaration.
1.2.6. Statutory References. All references made in this Community
Declaration to statutes are to those statutes as currently in effect or to subsequently enacted
replacement statutes.
ARTICLE II
MAINTENANCE COVENANTS AND USE RESTRICTIONS
The Community shall be held, used and enjoyed subject to the following restrictions and
subject to the exemptions of Declarant and Participating Builders set forth in the Governing
Documents.
2.1 REPAIR AND MAINTENANCE.
2.1.1. By Owners.
(a) The Lot. Each Owner shall maintain, at his sole expense, all of
his Lot, including the Residence, landscaping (as discussed in more detail in part (b) below), and
all other Improvements on the Owner's Lot (except for any Community Common Property or
other Improvements designated for maintenance by the Community Association, a
Subassociation, a Maintenance District, another governmental entity or the holder of an
easement), in a clean, sanitary and attractive condition, and as directed in the Governing
Documents and all applicable Maintenance Guidelines. Each Owner shall pay when due all
charges for any utility service separately metered to his Lot.
(b) Landscape Maintenance. All landscaped areas of the Lot shall
be properly maintained, evenly cut, evenly edged, free of bare or brown spots, debris and weeds
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above the level of the lawn. All trees and shrubs shall be trimmed so they do not impede
pedestrian traffic and root -pruned to prevent root damage to sidewalks, driveways and structures.
(c) Open Space Lots Adjacent To Streets. Where a Lot abuts an
open space parcel lying adjacent to a street, the Owner of the Lot will be responsible for
installation (unless installed by Participating Builder) and maintenance of the landscaping on
some or all of the adjacent open space parcel as designated in this Community Declaration, or in
the applicable Supplemental Community Declaration or Neighborhood Supplemental
Declaration. The landscape irrigation system installed on the Lot (whether installed by the
Owner or a Participating Builder) shall extend onto and cover the adjacent open space parcel.
By accepting a deed to a Lot abutting an open space parcel, the Owner -agrees to maintain the
landscaping in the adjacent open space parcel in a neat and attractive condition, and to provide
landscape irrigation on at the Owner's sole expense in accordance with the Governing
Documents.
(d) Cul-De-Sac Streets. The two residential Lots located at the bulb
end of a cul-de-sac may be separated by a Community Common Area Lot, or they may abut one
another, but the driveways constructed on each such Lots will not in all events be constructed
adjacent to the sideyard property line. On such Lots, the space between the edge of the driveway
and the sideyard property line is part of the Lot, and by accepting a deed to such a Lot, the
Owner is deemed to have agreed to install landscaping between the edge of the driveway and the
sideyard property line when the rest of the front yard landscaping is installed (if not already
installed), and the Owner shall thereafter be responsible for maintaining the landscaping in this
area in a neat and attractive condition consistent with the Governing Documents.
(e) Parkways. By accepting a deed to a Lot in the Community, each
Owner is deemed to agree to maintain the parkway landscaping within the right-of-way located
between the back of the curb and the Owner's property line (whether located at the front of the
Lot or along the sideyard of a Lot) in accordance with the Governing Documents
(f) Corner Lots. By accepting a deed to a corner Lot, the Owner of
the corner Lot is deemed to agree to install (if not already installed) and to maintain at the
Owner's sole expense, the landscaping within the side yard lying outside the side perimeter fence
in a neat and attractive condition consistent with the Governing Documents.
(g) Slopes in Rear and Side Yards. Rear- and side -yard slopes that
are located within the Lot boundaries and are visible from the street or from neighboring Lots,
are to be landscaped and maintained (including appropriate irrigation) by Owner of the Lot at the
Owner's sole expense in a neat and attractive condition consistent with the Governing
Documents.
(h) Party Walls. To the extent not inconsistent with the provisions
of this Section, the general rules of law regarding Party Walls and liability for property damage
due to negligence or willful acts or omissions shall apply.
(i) Sharing of Repair and Maintenance. The cost of
reasonable repair and maintenance of a Party Wall shall be shared equally by the Owners of the
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Lots connected by such Party Wall. However, each Owner shall be solely responsible for
repainting the side of any Party Wall facing the Owner's Lot.
(ii) Destruction by Fire or Other Casualty. Unless covered
by a blanket insurance policy maintained by the Community Association under Section 8.1, if a
Party Wall is destroyed or damaged by fire or other casualty, any Owner whose Lot is affected
thereby may restore it, and the Owner of the other Lot affected thereby shall contribute equally
to the cost of restoration thereof, without prejudice. However, such an Owner may call for a
larger contribution from the other under any rule of law regarding liability for negligence or
willful acts or omissions.
(ii) Weatherproofing. Notwithstanding any other provision
of this Article, an Owner who by his negligence or willful act or omission causes a Party Wall to
be exposed to the elements, to deteriorate, or to require repair or replacement shall bear the
whole cost of furnishing the necessary protection against such elements or the necessary repairs
or replacement.
(iv) Right to Contribution Runs With Land. The right of any
Owner to contribution from any other Owner under this Article is appurtenant to the land and
passes to such Owner's successors in title.
(i) Combustible Restricted Zone. Portions of some Lots include a
combustible restricted zone ("Combustible Restricted Zone"), which is an area of the Lot in
which no combustible structures (e.g., gazebos, patio overhangs, playhouses, room additions,
tool sheds or wood fences) or devices that produce flames or sparks (e.g., fire pits, barbecues,
outdoor fireplaces, or gas heaters for pools or spas) may be placed or constructed, all as set forth
in more detail in the Fire Control Plan. The Community Association has authority to enforce
restrictions on combustible structures on all restricted portions of the Community. Combustible
Restricted Zones may be designated in this Community Declaration, a Supplemental Community
Declaration or Notice of Addition. Combustible Restricted Zones in the Initial Covered Property
are approximately depicted on Exhibit E attached hereto (as applicable) or in a Supplemental
Community Declaration.
0) Pest Eradication. Each Owner shall regularly inspect the
Improvements on the Lot for wood -destroying pests, and if such pests are found, the Owner shall
be responsible for the costs of eradication and future prevention.
(k) Other Responsibilities. Unless otherwise provided in a
Supplemental Community Declaration:
(i) Each Owner shall maintain his individual mailbox and
shall share equally with the other Owner(s) in such Owner's mailbox structure the costs of
maintenance of the post or other supporting structure (as applicable). If clustered mailboxes are
installed (containing more than four mailboxes in a single cluster), maintenance of such clustered
mailboxes will be a Common Expense.
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(ii) Each Owner whose Lot utilizes a sewer system lateral is
responsible for the maintenance and repair of that portion of the lateral which exclusively serves
such Owner's Lot.
(1) Community Walls. Except as otherwise specified in a
Supplemental Community Declaration or in a Subordinate Declaration, Owners shall be
responsible for the maintenance of Community Walls as follows:
(i) Each Owner shall be responsible for maintaining the
structural and support components of in -tract portions of the Community Wall that enclose the
Owner's Lot (including pilasters, caissons, footing, cap, masonry, vinyl, wood, tubular steel and
wrought iron), and all Residence -facing surfaces thereof. The Community Association shall be
responsible only for maintaining the cosmetic appearance and surface finishes of the surface
facing away from the Residence.
(ii) Owners of corner Lots on which are constructed any
street -exposed sideyard fence or wall are solely responsible for maintaining the structural and
support components of those portions of the wall or fence that enclose the Owner's Lot
(including pilasters, caissons, footing, cap, masonry, vinyl, wood, tubular steel and wrought
iron), and all the cosmetic appearance and surface finishes of all exterior surfaces thereof.
(iii) Owners of Lots that abut the Salt Creek Riparian Area or
other open space in the Community shall be responsible for maintaining the structural and
support components of any view fence that encloses the Owner's Lot (including pilasters,
caissons, footing, cap, masonry, vinyl, wood, tubular steel and wrought iron), and the cosmetic
appearance and finishes on all exterior surfaces thereof.
(iv) Notwithstanding the foregoing, where a Community
Wall abuts a Community Common Area paseo, park, or Community Recreational Facilities, the
Owner of a Lot that is enclosed thereby shall be responsible only for the cosmetic appearance of
the Residence -facing surface thereof, and the Community Association shall be responsible for
the structural and support components and the surface facing the Community Common Area.
2.1.2. By Community Association. The Community Association shall
maintain everything it is obligated to maintain in a clean, sanitary and attractive condition
reasonably consistent with the level and frequency of maintenance reflected in the current
adopted Budget; provided, however, that the Community Association shall at all times at least
perform the level and frequency of maintenance specified in the applicable Maintenance
Guidelines.
(a) Maintenance Areas. The Community Association's obligation
to maintain any Maintenance Areas shall commence on the Transfer Date for such Maintenance
Area. Thereafter the transferred Maintenance Area shall constitute Community Common Area
or Community Association Maintenance Area (as applicable). Until the applicable Transfer
Date, the Maintenance Districts shall maintain their Maintenance Areas.
(b) Commencement of Obligations — Community Common
Property. The Community Association's obligation to maintain the Community Common
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Property in a Phase composed solely of Community Common Property shall commence on
conveyance of such Community Common Property to the Community Association. Except as
provided in Section 7.6, the Community Association's obligation to maintain the Community
Common Property in any Phase that includes Lots shall commence on the date on which Annual
Assessments commence on Lots in the Phase. Until the Community Association is responsible
for maintaining the Community Common Property in a Phase, Declarant or the applicable
Participating Builder shall maintain the -Community Common Property. The Community
Association must accept ownership of and maintenance responsibility for each portion of
Community Common Property when title and maintenance responsibility are tendered by
Declarant or a Participating Builder, whether in fee simple, by easement or otherwise, and the
Community Association shall execute each deed and any accompanying escrow instructions if
requested to do so by Declarant or a Participating Builder, and it shall execute any bond
exonerations when presented if the bonded obligations are satisfied. No Owner shall interfere
with the exercise of the foregoing obligations by the Community Association, or with the rights
or obligations of Declarant or a Participating Builder.
(c) Maintenance Requirements. Unless specifically provided in
any Maintenance Guidelines, the Board shall determine, in its sole discretion, the level and
frequency of maintenance of the Community Common Property. The Community Association
shall be responsible for maintaining the Community Common Property and for all other
maintenance not provided by the Owners pursuant to Section 2.1.1, above, or by a governmental
entity (unless such maintenance is designated to be performed by a Subassociation in a
Supplemental Community Declaration, Notice of Addition, Neighborhood Declaration or
Neighborhood Supplemental Declaration).
(d) Fuel Modification Zones and Combustible Restricted Zones.
The Community Association is responsible for maintaining, in accordance with applicable
County requirements, those portions of the Community Common Property identified as Fuel
Modification Zones in the Fire Control Plan. Construction or maintenance of any combustible
structural Improvements on or adjacent to Fuel Modification Zones (or in Combustible
Restricted Zones), and installation, maintenance or modification in Fuel Modification Zones (or
in Combustible Restricted Zones) of any landscaping Improvements which are inconsistent with
any landscape palette required by the County, are prohibited. All Persons must comply with
Fuel Modification Zone and Combustible Restricted Zone setback requirements. Owners of Lots
must comply with any applicable fire protection policies and requirements, designed to reduce
fire danger to structures adjacent to natural areas, adopted by the County ("Fuel Modification
Guidelines"). Landscaping and irrigation Improvements shall be installed and maintained in
conformance with applicable Fuel Modification Guidelines. Fuel Modification Zones and
Combustible Restricted Zones may be designated in this Community Declaration, a
Supplemental Community Declaration or Notice of Addition. Fuel Modification Zones and
Combustible Restricted Zones in the Initial Covered Property are approximately depicted on
Exhibit attached hereto (as applicable) or in a Supplemental Community Declaration.
(e) Community Walls. Except as otherwise specified in a
Supplemental Community Declaration or in a Subordinate Declaration, the Community
Association shall maintain those portions of the Community Walls that are not designated in the
Governing Documents for maintenance by Owners. Such maintenance shall include the
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structural components of the Community Walls (including pilasters, caissons, footing, cap,
masonry, vinyl, wood, tubular steel and wrought iron), and maintenance of the cosmetic
appearance of the surfaces that face Community Common Area, parks, streets, and other public
property.
(f) Additional Items. The Community Association shall also be
responsible for maintaining any Improvements that a majority of the voting power of the
Community Association designates for maintenance by the Community Association. Such
Improvements shall be deemed Community Common Property and subject to provisions of the
Governing Documents that are applicable to the Community Common Property.
2.1.3. Inspections. The Board shall periodically cause a compliance
inspection of the Community to be conducted by the Design Review Committee to report any
violations thereof. The Board shall also cause condition inspections of the Community Common
Property and all Improvements thereon to be conducted in conformity with the applicable
Maintenance Guidelines, and in the absence of inspection frequency recommendations in any
applicable Maintenance Guidelines at least once every three (3) years, in conjunction with the
inspection required for the reserve study to be conducted pursuant to the requirements of the
Bylaws, to (a) determine whether the Community Common Property is being maintained
adequately in accordance with the standards of maintenance established in Section 2.1.2(c),
(b) identify the condition of the Community Common Property and any Improvements thereon,
including the existence of any hazards or defects, and the need for performing additional
maintenance, refurbishment, replacement, or repair, and (c) recommend preventive actions which
may be taken to reduce potential maintenance costs to be incurred in the future. The Board shall,
during its meetings, regularly determine whether the recommended inspections and maintenance
activities set forth in any applicable Maintenance Guidelines have been followed and, if not
followed, what corrective steps need to be taken to assure proper inspections and maintenance of
the Community Common Property. The Board shall keep a record of such determinations in the
Board's minutes. The Board shall keep Declarant fully informed of the Board's activities under
this Section 2.1.3. The Board shall employ, consistent with reasonable cost management, such
experts, contractors and consultants as are necessary to perform the inspections and make the
reports required by this Section.
2.1.4. Reporting Requirements. The Community Association shall prepare a
report of the results of the inspection required by this Section. The report shall be furnished to
Owners and Declarant within the time set for furnishing the Budget to the Owners. The report
must include at least the following:
(a) a description of the condition of the Community Common
Property, including a list of items inspected, and the status of maintenance, repair and need for
replacement of all such items;
(b) a description of all maintenance, repair and replacement planned
for the ensuing Fiscal Year and included in the Budget;
reason for such deferral;
(c) if any maintenance, repair or replacement is to be deferred, the
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(d) a summary of all reports of inspections performed by any expert
or consultant employed by the Community Association to perform inspections;
(e) a report of the status of compliance with the maintenance,
replacement and repair needs identified in the inspection report for preceding years; and
(f) such other matters as the Board considers appropriate.
For a period of ten (10) years after the date of the last Close of Escrow in the
Community, the Board shall also furnish to Declarant (a) the report of each Condition Inspection
performed for the Board, whenever such inspection is performed and for whatever portion of the
Community Common Property that is inspected, within thirty (30) days after the completion of
such inspection, and (b) the most recent Condition Inspection report prepared for any portion of
the Community Common Property, no later than the date that is ten (10) days after the
Community Association receives Declarant's written request.
2.1.5. Damage by Owners. Each Owner is liable to the Community
Association for all damage to the Community Common Property that is sustained due to the
negligence or willful act of the Owner, the Owner's Family, tenants or invitees, and any other
Persons who derive their use of the Community Common Property from the Owner or from the
Owner's Family, tenants or invitees. The Community Association may, after Notice and
Hearing, levy a Special Assessment against the Owner representing a monetary charge imposed
as a means of reimbursing the Community Association for costs incurred by the Community
Association in the repair of damage to Community Common Property and facilities for which the
Owner or the Owner's Family, tenants or invitees were responsible. The amount of the Special
Assessment may include (a) the amount of any deductible payable on the insured portion of the
loss (if the Community Association elects to make a claim under its insurance policy), (b) all
costs and expenses actually incurred by the Community Association to correct damage that is not
covered by the Community Association's insurance or for which no claim has been made, and
(c) the amount of the increase in premiums payable by the Community Association, to the extent
the increase is directly caused by damage that was attributed to the Owner or the Owner's
Family, tenants or invitees. In accordance with California Civil Code Section 1367.1(d), the
Community Association shall have the power to impose a lien for the foregoing Special
Assessment. If a Lot is jointly owned, the liability of its Owners for damage to Community
Common Property is joint and several, except to the extent that the Community Association and
the joint Owners have otherwise agreed in writing.
2.2 SINGLE FAMILY RESIDENCE. The Residence shall be used as a dwelling
for a single Family and for no other purpose.
2.3 FURTHER SUBDIVISION. Except as otherwise provided in this Community
Declaration, no Owner may physically or legally subdivide a Lot in any manner, including
dividing the Lot into time-share estates or time-share uses. This provision does not limit the
right of an Owner to (a) rent or lease his entire Lot by a written lease or rental agreement subject
to this Community Declaration, (b) sell such Owner's Lot, or (c) transfer or sell any Lot to more
than one (1) Person to be held by them as tenants -in -common, joint tenants, tenants by the
entirety or as community property.
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2.4 RESALE AND RENTAL. Nothing in this Community Declaration shall be
deemed to (a) prevent an Owner from selling the Lot (subject to any Owner occupancy or anti -
speculation requirements that may be separately imposed by Declarant or Participating Builder)
or (b) prevent an Owner from entering a written lease or rental agreement for occupancy of the
Residence and the Lot by a single Family, provided that the lease or rental agreement is made
expressly subject to this Community Declaration. All lessees, tenants, and their Families, agents
and invitees are bound by the Governing Documents when present in the Community, and any
violation of the Governing Documents constitutes a default under the lease or rental agreement.
Declarant may not lease any portion of the Community Common Property to the Owners or the
Community Association.
2.5 BUSINESS AND COMMERCIAL ACTIVITIES.
2.5.1. Generally. No Owner or other occupant of the Community may
undertake any activity on any Lot nor use any portion of the Community Common Area for any
business, commercial or non-residential purposes, nor for any other purpose that is inconsistent
with the Governing Documents, including manufacturing, storage, vending, auctions, vehicle or
equipment repair, entering into any lease or rental agreement under which the Residence would
be occupied by numbers of persons in excess of the maximum occupancy permitted under
applicable law, and transient occupancy purposes (such as vacation rental, hotel, motel, inn, or
similar temporary lodging). Any lease or rental agreement for a term of fewer than thirty (30)
days or pursuant to which the lessor provides any services normally associated with transient
occupancy shall be deemed to be for transient purposes and prohibited under this Community
Declaration. All of the foregoing activities are prohibited whether they are engaged in full-time
or part-time, whether they are for -profit or non-profit, and whether they are licensed or
unlicensed.
2.5.2. Exceptions. This Section shall not be interpreted to prohibit any of the
following:
(a) Rental or leasing of a Lot to Declarant or Participating Builder
for use as a sales office, model homes or parking area for any period of time;
(b) The hiring of employees or contractors to provide maintenance,
construction or repair services that are consistent with the Governing Documents;
(c) Exercise by Declarant of any rights reserved to it under
Article XV;
(d) The provision of in -home health care or assisted -living services
to any resident of the Community;
(e) The provision of family home child care services as defined in
California Health and Safety Code Section 1597.40, et seq. so long as such services comply with
all applicable state and local laws, including licensing, inspection and zoning requirements.
Provided, however, that the Community Association has the power to limit or prohibit use of the
Community Recreational Facilities or other recreational facilities in the Community Common
Area by clientele of the business;
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(f) The -operation of small home -based service businesses that
comply with all of the following:
(1) The operator of the business lives in the Residence on a
permanent, full-time basis;
(ii) When conducted in the Community, business activities
take place solely inside the Residence;
(iii) Visits by clientele or suppliers are limited to regular
business hours and clientele and suppliers park their vehicles only in the driveway or garage of
the Lot;
(iv) The activity complies with all laws, regulations and
ordinances applicable to the Community, including zoning, inspection, health and licensing
requirements;
(v) The activity otherwise complies with the Community
Declaration and is consistent with the residential character of the Community;
(vi) The operator of the business posts no signage anywhere
in the Community;
(vii) There is no visible evidence in the Community of the
activity, other than visits by clientele or suppliers;
(viii) The activity does not generate noise or odors that are
apparent outside the Residence; and
(ix) The business does not increase the Community
Association's liability or casualty insurance obligation or premium.
(g) Other activities that have been determined by governmental
authorities to be consistent with the single-family residential uses in the Community, including,
for example, residential care facilities that are operated in accordance with California Health and
Safety Code Section 1566.5.
2.6 NUISANCES. Noxious or offensive activities are prohibited in the Community
and on any public street abutting or visible from the Community. The Board is entitled to
determine if any device, noise, odor, or activity constitutes a nuisance.
2.6.1. Nuisance Devices. Nuisance devices may not be kept or operated in the
Community or on any public street abutting the Community, or exposed to the view of other Lots
or Community Common Area. Nuisance devices include the following:
(a) All horns, whistles, bells or other sound devices (except security
devices used exclusively to protect the security of a Residence or a vehicle and its contents)
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(b) Noisy or smoky vehicles, power equipment (excluding lawn
mowers and other equipment used in connection with ordinary landscape maintenance), and
Restricted Vehicles (defined below);
(c) Devices that create or emit loud noises or noxious odors;
(d) Construction or demolition waste containers (except as permitted
in writing by the Committee);
reception to a Lot;
(e) Devices that unreasonably interfere with television or radio
(f) Plants or seeds infected with noxious insects or plant diseases;
(g) The presence of any other thing in the Community which may
(i) increase the rate of insurance in the Community, (ii) result in cancellation of the insurance,
(iii) obstruct or interfere with the rights of other Owners or the Community Association,
(iv) violate any law or provisions of the Governing Documents or (v) constitute a nuisance or
other threat to health or safety under applicable law or ordinance.
2.6.2. Nuisance Activities. Nuisance activities may not be undertaken in the
Community or on any public street abutting the Community, or exposed to the view of other Lots
or Community Common Area without the Board's prior written approval. Nuisance activities
include the following:
(a) Hanging, drying or airing clothing, fabrics or unsightly articles
in any place that is visible from other Lots, Community Common Area or public streets;
(b) Unreasonable levels of noise arising from parties, recorded
music, radios, television or related devices, or live music performance;
(c) Unreasonable levels noise arising from a barking dog or other
animal kept in the Community (e.g., chronic daily nuisance barking by a dog over extended
periods of time);
(d) Repair or maintenance of vehicles or mechanical equipment,
except in a closed garage or rear yard screened from view by other Lots or Community Common
Area;
(e) Outdoor fires, except in barbecue grills and fire pits designed
and used in such a manner that they do not create a fire hazard;
(f) Outdoor storage of bulk materials or waste materials except in
temporary storage areas designated by the Committee.
(g) Any activity which may (i) increase the rate of insurance in the
Community, (ii) result in cancellation of the insurance, (iii) obstruct or interfere with the rights
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of other Owners, (iv) violate any law or provisions of the Governing Documents, or
(v) constitute a nuisance or other threat to health or safety under applicable law or ordinance.
2.7 SIGNS. Subject to California Civil Code Sections 712, 713 and 1353.6, no sign,
advertising device or other display of any kind shall be displayed in the Community or on any
public street in or abutting the Community except for the following signs:
(a) Entry monuments, community identification signs, and traffic or
parking control signs maintained by the Community Association;
(b) For each Lot, one (1) nameplate or address identification sign
which complies with Design Review Committee rules;
(c) For each Lot, one (1) sign advising of the existence of security
services protecting a Lot which complies with Design Review Committee rules;
(d) For each Lot, one (1) sign advertising the Lot for sale or lease
that complies with the following requirements:
(i) the sign has reasonable design and dimensions (which
shall not exceed eighteen (18) inches by thirty (30) inches in size), provided the sign is promptly
removed at the close of the resale escrow or the lease, or upon the Owner's withdrawal of the Lot
from the resale or lease market;
(ii) the sign is of a color, style and location authorized by the
Design Review Committee;
(e) For each Lot, a noncommercial sign, poster, flag or banner
which must comply with the following requirements:
(i) a noncommercial sign or poster must not be more than 9
square feet in size and a noncommercial flag or banner must not be more than 15 square feet in
size; and
(ii) a noncommercial sign, poster, flag or banner may not be
made of lights, roofing, siding, paving materials, flora, or balloons, or any other similar building,
landscaping, or decorative component, or include the painting of architectural surfaces.
(f) Other signs or displays authorized by the Design Review
Committee.
2.8 PARKING AND VEHICULAR RESTRICTIONS.
2.8.1. Definitions. The following definitions shall apply to parking and
vehicular restrictions set forth in this Community Declaration:
2.8.2. Authorized Vehicle. An "Authorized Vehicle" is an automobile, a
passenger van designed to accommodate ten (10) or fewer people, a motorcycle, or a pickup
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truck having- a manufacturer's rating or payload capacity of one (1) ton or less. The Community
Association has the power to identify additional vehicles as Authorized Vehicles in the Rules and
Regulations in order to adapt this restriction to other types of vehicles that are not listed above.
2.8.3. Restricted Vehicles. The following vehicles are "Restricted Vehicles:"
(a) large commercial -type vehicles (e.g., stake bed trucks, tank trucks, dump trucks, step vans,
and concrete trucks), (b) buses, limousines or vans designed to accommodate more than ten (10)
people, (c) inoperable vehicles or parts of vehicles, (d) aircraft, (e) boats, jet skis and other water
craft, (f) trailers (for example, trailers designed for horses, boats, motorcycles or other equipment
or materials), (g) motor homes, motor coaches and recreational vehicles (for example, fifth -
wheels, folding camping trailers, travel trailers, but not including van conversions and truck
campers), (h) any vehicle or vehicular equipment deemed a nuisance by the Community
Association, and (i) any other vehicle not classified as an Authorized Vehicle. If a vehicle
qualifies as both an Authorized Vehicle and a Restricted Vehicle, then the vehicle is presumed to
be a Restricted Vehicle, unless the vehicle is expressly authorized in writing by the Community
Association. The Community Association has the power to identify additional vehicles as
Restricted Vehicles in the Rules and Regulations to adapt this restriction to other types of
vehicles that are not listed above.
2.8.4. Parking Restrictions.
(a) Streets and Driveways. If an Authorized Vehicle will not fit in a
garage it may be parked in the driveway or street, provided that the vehicle does not encroach
onto the sidewalk or other public or private right-of-way.
(b) Restricted Vehicles. No Restricted Vehicle may be parked,
stored or kept on the streets or residential driveways in the Community except for brief periods
to accommodate loading, unloading, or emergency repairs. At all other times, Restricted
Vehicles must be stored or parked outside the Community or in a fenced sideyard or backyard if
the Restricted Vehicle is screened from view by other Lots and Community Common Area, or in
the garage so long as the garage is kept closed and the presence of the Restricted Vehicle does
not prevent any Authorized Vehicle from being parked in the garage or driveway at the same
time.
(c) Garage Parking. Each Owner shall at all times ensure that the
garage physically accommodates at least the number of Authorized Vehicles for which it was
originally constructed by Declarant or Participating Builder. The garages shall be used for
parking of vehicles and storage of personal property only. No garage may be used for any
dwelling, commercial, recreational, or other purpose. Garage doors must be kept closed except
as necessary for entry or exit of vehicles or persons.
2.8.5. Repair, Maintenance and Restoration. No Person may repair,
maintain or restore any vehicle in the Community, unless such work is conducted in the garage
with the garage door closed. However, no Person may carry on in any portion of the Community
any vehicle repair, maintenance or restoration business.
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2.8.6. Enforcement. The streets in the Community are public. The Board has
the right and power to enforce all parking and vehicle use regulations applicable to the
Community, including the removal of violating vehicles from alleys, streets and other portions of
the Community in accordance with California Vehicle Code Section 22658 or other applicable
laws. The City may, but is not required to, enforce such restrictions, rules and regulations, in
addition to applicable laws and ordinances.
2.8.7. Regulation and Restriction by Board. The Board has the power to:
(a) establish additional rules and regulations concerning parking in the Community Common
Area, including designating "parking," "guest parking," and "no parking" areas; (b) prohibit any
vehicle repair, maintenance or restoration activity in the Community if it determines in its sole
discretion that such activity is a nuisance; and (c) promulgate rules and regulations concerning
vehicles and parking in the Community as it deems necessary and desirable.
2.9 ANIMAL REGULATIONS. No commercial or farm livestock, including
poultry, may be kept in the Community. However, up to two (2) dogs, cats, birds or other
customary household pets may be kept in each Residence, subject to local ordinances and such
rules and regulations as may be adopted by the Board. No Person may keep any animal that is
determined by the Board to be a nuisance to other residents in the Community. The Board has
the power and discretion to determine whether types or numbers of animals kept on a Lot are a
nuisance, and the Board shall have the power to abate the nuisance through any legal procedure
that is available to the Community Association. Small household pets such as fish and caged
birds may be kept in reasonable numbers so long as there is no external evidence of their
presence in the Community. Animals belonging to residents or guests in the Community must be
kept in the Residence or in fenced areas of the Lot. If an animal is taken outside enclosed areas,
whether on the Lot or off, it must be kept under the control of a Person capable of controlling the
animal, either on a leash or other appropriate restraint. Each Owner shall be absolutely liable to
each and all remaining Owners, their families, tenants, residents and guests for damages or
injuries caused by any animals brought or kept in the Community by an Owner, by members of
the Owner's Family, or by the Owner's guests, tenants or invitees. Each Owner shall
immediately remove any excrement or clean other unsanitary conditions left by the Owner's
animals on any portion of the Community.
2.10 ANTENNA RESTRICTIONS. No Person may install on any Lot any antenna
or over -the -air receiving device except for an "Authorized Antenna." An Authorized Antenna is
(a) an antenna designed to receive direct broadcast satellite service, including direct -to -home
satellite service, that is one (1) meter or less in diameter, (b) an antenna designed to receive
video programming service, including multi -channel multipoint distribution service, instructional
television fixed service, and local multipoint distribution service, and is one (1) meter or less in
diameter or diagonal measurement, (c) an antenna designed to receive television broadcast
signals, or (d) an antenna used to receive and transmit fixed wireless signals. The foregoing
definition is not intended to prohibit cordless or wireless telephones, PDAs, computers, wireless
home data networking equipment or other portable wireless data or telephony devices that do not
otherwise constitute a nuisance device under the Governing Documents. An Authorized
Antenna may be mounted on a mast to reach the height needed to receive an acceptable quality
signal, subject to local governmental agency permitting requirements for safety purposes. No
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mast shall be installed in such a way that it overhangs a neighboring Lot or Community Common
Property, or poses a threat of damage to property or injury to persons.
2.10.1. Restrictions on Installation. The Committee may adopt reasonable
restrictions on installation and use of an Authorized Antenna as part of its Design Guidelines in
order to minimize visibility of the Authorized Antenna from other Lots. Such restrictions may
designate one (1) or more preferred installation locations, or require camouflage such as paint
(subject to the antenna manufacturer's recommendations) or screening vegetation or other
Improvements. However, no restriction imposed by the Committee may (a) unreasonably delay
or prevent the installation, maintenance or use of an Authorized Antenna, (b) unreasonably
increase the cost of the installation, maintenance or use of an Authorized Antenna, or
(c) preclude acceptable quality reception. For detached Residences on legal Lots, the initial
preferred installation locations shall include rear yard areas and portions of the rooftop at the rear
of the Residence.
2.10.2. Prohibitions on Installation. No Owner may install any Authorized
Antenna or other device on any real property which such Owner does not own or is not entitled
to exclusively use or control under the Governing Documents. The Committee may prohibit the
installation of an Authorized Antenna in a particular location if, in the Committee's opinion, the
installation, location or maintenance of such Authorized Antenna unreasonably affects the safety
of the Owners or any other Person, or for any other safety -related reason established by the
Committee. The Committee also has the power to prohibit or restrict the installation of any
antenna or other over -the -air receiving device that does not meet the definition of an Authorized
Antenna as set forth above.
2.10.3. Review after Installation. The Committee may review the location
and installation of an Authorized Antenna after it is installed. After its review, the Committee
may require that the Authorized Antenna be moved to a preferred location (if one has been
designated) for safety reasons or to comply with reasonable restrictions subject to this Section
and applicable law.
2.10.4. Restatement of Applicable Law. This Section is intended to be a
restatement of the authority granted to the Committee under the law. All amendments,
modifications, restatements and interpretations of the law applicable to the installation, use or
maintenance of an antenna or over -the -air receiving device shall be interpreted to amend,
modify, restate or interpret this Section.
2.11 TRASH. Trash and recyclables must be stored in closed sanitary containers. No
trash, recyclables, or containers may be stored in view of other Lots or Community Common
Property except that closed containers may be set out at curbside in view of other Lots or
Community Common Property for a reasonable period of time on trash collection days (not to
exceed twelve (12) hours before and after scheduled trash collection hours). At all other times,
Owners must store containers in the fenced area, out of sight of other Lots and Community
Common Property, or in the garage, until scheduled collection times.
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2.12 OWNER -INSTALLED IMPROVEMENTS.
2.12.1. Outdoors. No Person shall install any permanent outdoor
Improvements on a Lot if the Improvements are visible from other Lots, or from the streets or the
Community Common Area, without the prior written approval of the Design Review Committee
obtained in accordance with Article V, the Design Guidelines and the Rules and Regulations.
Examples of outdoor Improvements that require prior Committee approval include the following:
(a) Solar energy systems (including roof -mounted Improvements)
that receive a County Planning Department permit;
(b) Screening structures that are intended to hide roof -mounted
Improvements (such Improvements may be hidden from view only by extension of the main
structure);
(c) Modifications to the building exteriors including room additions,
second -story additions or other cosmetic or structural changes in the architectural elements of the
Residence;
(d) Permanent athletic equipment (however, portable athletic
equipment may be used in front yards or driveways or as otherwise authorized by the Board, but
it must be brought indoors or out of the view of other Lots and Community Common Area when
not in use);
(e) Security bars, sunshades, awnings or patio covers;
(f) Accessory structures such as sheds, barns and casitas;
(g) Paint or other surface finishes (unless the paint or finish used is
the same as originally used by Declarant or Participating Builder on the Improvement or the
same as previously approved in writing by the Committee);
(h) Front yard or parkway landscaping and hardscape, including
flatwork, fences or walls, or statuary, if visible from other Lots, Community Common Area or
streets; and
(i) Rear yard landscaping and hardscape, including flatwork and
fences or walls.
The foregoing list is provided for guidance but it is not intended to be an
exhaustive list. The Committee has the power to require prior review and approval of other
Improvements that are not listed above. Outdoor patio or lounge furniture, potted plants and
portable barbecue equipment may be kept pursuant to the Rules and Regulations.
Persons who intend to install or construct outdoor Improvements on their Lots
must consult the Committee prior to installation to determine if prior review and approval are
required. This Section shall not apply to any Improvements installed by Declarant, Participating
Builder or by the Community Association, nor shall it apply to maintenance, repair, replacement
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or reconstruction of existing Improvements by Declarant, Participating Builder or by .the
Community Association.
2.12.2. Installation of Yard Landscaping. If not installed by Declarant or
Participating Builder, each Owner shall complete the installation of landscaping on all portions
of the yards on such Owner's Lot in accordance with a plan approved by the Design Review
Committee. Installation must be completed within six (6) months after the Close of Escrow.
Each Owner shall obtain all permits necessary and shall comply with all requirements of the
County. If a Neighborhood Declaration specifies a shorter period, then the Neighborhood
Declaration shall control.
2.12.3. Indoors. No Owner or other resident of the Community may apply
paint, foil, film, or other reflective material to the glass portion of any window in the Residence
or garage.
2.12.4. No Liability. Neither the Declarant nor the Community Association
shall be liable or responsible for any damage that results from Improvements installed,
constructed or modified by or at the direction of an Owner. Owners are advised to consult and
use qualified consultants and contractors when installing, constructing or modifying
Improvements on the Owner's Lot.
2.13 MECHANICS' LIENS. No Owner may cause or permit any mechanic's lien to
be filed against the Community Common Property or another Owner's Lot for labor or materials
alleged to have been furnished or delivered to such Owner and any Owner who permits a
mechanics' lien to be so filed shall cause the lien to be discharged no later than five (5) days
after written notice to discharge the lien is received from the Board. If the Owner fails to remove
such mechanic's lien after written notice from the Board, the Board may discharge the lien and
levy a Special Assessment against the violating Owner's Lot to recover the cost of discharge.
2.14 DRAINAGE. There shall be no interference with or obstruction of the
established surface drainage pattern(s) over any Lot in the Community, unless an adequate
alternative provision is made for proper drainage.
2.14.1. Established Drainage. Any alteration of the established drainage
pattern must at all times comply with all applicable local governmental requirements. For the
purpose hereof, "established" drainage is defined as the drainage which exists at the time of the
first Close of Escrow for the sale of the Lot by Declarant, or as shown on any plan approved by
the Committee. Established drainage includes drainage from Lot to Lot and to and from property
lying outside the Community. The grading design in the Community may not be altered to
redirect surface water flow toward the Lots or onto adjacent property, or to trap water so that it
ponds or floods. Grading modifications are subject to law, approval by the Board, and the terms
of any Recorded drainage easements.
2.14.2. Surface Drainage Improvements. The established drainage system on
a Lot may consist of any or all of the following: earthen or concrete drainage swales, concrete
channels, catch basins and inlets with underground drainage pipelines, roof -mounted gutters or
downspouts ("Surface Drainage Improvements'. Each Owner shall maintain, repair, and
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replace and keep free from debris or obstructions all Surface Drainage Improvements, if any,
located on the Owner's Lot, except those for which the Community Association, a public
authority or a utility is responsible.
2.14.3. Sub -Drains. Each Owner, by accepting a grant deed to his Lot,
acknowledges and understands that in connection with the development of the Community,
Declarant or Participating Builders may have installed one or more "drain lines" beneath the
surface of such Owner's Lot ("Sub -Drains'. The Sub -Drains and all appurtenant
improvements constructed or installed by Declarant or Participating Builders, if any, provide for
subterranean drainage of water from and to various portions of the Community. Each Owner
must maintain, repair, replace and keep free of debris and obstructions all Surface Drainage
Improvements and Sub -Drains located on the Lot, except those for which the Community
Association, a Subassociation, or a public authority or utility are responsible. To ensure
adequate drainage within the Community, it is essential that the Surface Drainage Improvements
and the Sub -Drains, if any, not be modified, removed or blocked without having first made
alternative drainage arrangements. Therefore, no Owner may install, alter, modify, remove or
replace any Surface Drainage Improvements or Sub -Drains located within such Owner's Lot
without first making alternative drainage arrangements approved by the Committee and
applicable governmental agencies. Owner -installed irrigation systems must be installed and
maintained to prevent excess runoff and accumulation of surface water.
2.15 WATER SUPPLY SYSTEM. No individual water supply, sewage disposal or
water softener system is permitted on any Lot unless such system is designed, located,
constructed and equipped in accordance with the requirements, standards and recommendations
of any water district having jurisdiction, the City, the County, the Design Review Committee and
all other applicable governmental authorities with jurisdiction. The City shall have the right but
not the duty to enforce this Section 2.15.
2.16 OBSTRUCTIONS OF LIGHT AND AIR; SPITE FENCES. There are no
protected views in the Community. However, no Owner or other resident may install vegetation,
fences or other obstructions in such locations or of such heights that they unreasonably obstruct
the passage of light and air onto any other Lot in the vicinity thereof. If there is a dispute
between Owners under this Section, the dispute shall be submitted to the Design Review
Committee, whose decision in such matters shall be binding. Any item or vegetation maintained
on any Lot which is exposed to the view of any Owner must be removed or altered to the Design
Review Committee's satisfaction, if the Design Review Committee determines that the item or
vegetation in its then existing state does not comply with this Community Declaration.
2.17 RIGHTS OF DISABLED. Subject to Article V, each Owner may modify his
Residence and the route over the Lot leading to the front door of his Residence, at his sole
expense to facilitate access to his Residence by persons who are blind, visually impaired, deaf or
physically disabled, or to alter conditions which could be hazardous to such persons, in
accordance with California Civil Code Section 1360 or any other applicable law.
2.18 TEMPORARY BUILDINGS. No outbuilding, tent, shack, shed or other
temporary building or Improvement may be placed upon any portion of the Community either
temporarily or permanently, without the prior written consent of the Design Review Committee.
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No garage, carport, trailer, camper, motor home, recreational vehicle or other vehicle may be
used as a residence in the Community, either temporarily or permanently.
2.19 COMMUNITY COMMON PROPERTY. The Community Common Property
may not be altered without the Board's prior written consent.
2.20 MINERAL EXPLORATION AND EXTRACTION. No oil drilling, oil, gas or
mineral development operations, oil refining, geothermal exploration or development, quarrying
or mining operations of any kind may be conducted on the Community, nor are oil wells, tanks,
tunnels or mineral excavations or shafts permitted upon the surface of any Lot or within five
hundred (500) feet below the surface of the Community. No derrick or other structure designed
for use in boring for water, oil, geothermal heat or natural gas may be erected, maintained or
permitted on any Lot.
2.21 STORMWATER POLLUTANT CONTROL. The Community is subject to all
federal, state and local requirements of the National Pollutant Discharge Elimination System
("NPDES'), adopted in accordance with the Federal Clean Water Act. The Santa Ana Region
Regional Water Quality Control Board has adopted Board Order R8-2010-0033 in compliance
with the NPDES Municipal Separate Storm Sewer System (MS4) Clean Water Act requirements.
This Board Order regulates the discharge of pollutants from the County's storm sewer system,
and requires the City to implement measures to mitigate the water quality impacts of new
developments within its jurisdiction. In compliance with this Board Order, the Community is
required to comply with the Water Quality Management Plan for Urban Runoff (WQMP). The
WQMP addresses post -development water quality impacts from new development and
redevelopment projects, and it identifies mitigation measures, also known as Best Management
Practices or "BMPs." The Community Association and the Owners shall comply with all post -
construction BMPs that apply to the Community. Some BMPs may impose long term
maintenance obligations on the Community Association and each Owner in the Community and
shall include the following:
2.21.1. All structural BMPs shall be inspected and, if necessary, cleaned by the
Community Association no later than October 151h of each year; and
2.21.2. Owners, residents, occupants or tenants of a Lot shall receive
educational materials on good housekeeping practices which contribute to the protection of storm
water quality. These educational materials shall be provided by the County's Public Information
Specialist for the NPDES and shall be distributed by the Community Association.
The BMPs are in addition to any local ordinances established by the City and any
rules and regulations imposed by the Community Association concerning discharge of non -storm
water into storm drains.
2.22 POST -TENSION CONCRETE SLABS. Concrete slabs for Residences
constructed in the Community may be reinforced with a grid of steel cable installed in the
concrete slab and then tightened to create extremely high tension. This type of slab is commonly
known as a "Post -Tension Slab." Cutting into a Post -Tension Slab for any reason (e.g., to install
a floor safe, to remodel plumbing, etc.) is very hazardous and may result in serious damage to the
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Residence and garage, personal injury, or both, and accordingly should be avoided whenever
possible. Each Owner shall determine if his Residence and garage have been constructed with a
Post -Tension Slab and, if so agrees that except in the event repairs are required beneath the Post -
Tension Slab: (a) Owner shall not cut into or otherwise tamper with the Post -Tension Slab;
(b) Owner shall not permit or allow any other Person to cut into or tamper with the Post -Tension
Slab so long as Owner owns any interest in the Lot; and (c) Owner shall disclose the existence of
the Post -Tension Slab to any Person who rents, leases or purchases the Lot from Owner. If
repairs are required beneath the Post -Tension Slab, Owner shall cause such repairs to be done by
licensed professionals having a specialized knowledge of Post -Tension Slabs. In any event,
Owner shall indemnify and hold Declarant and Declarant's agents, free and harmless from and
against any and all claims, damages, losses or other liability (including attorneys' fees and costs
of court) arising from any actions of Owner, or others at Owner's request, resulting in a breach
of or damage to the Post -Tension Slab or the Residence or garage.
ARTICLE III
DISCLOSURES
This Article discloses information that was obtained from third -party sources such as
consultants, government and public records. No Person should rely on the ongoing accuracy or
completeness of the information discussed in this Article because many of the matters discussed
below are outside the control of Declarant, Participating Builders and the Community
Association. Accordingly, neither Declarant nor any Participating Builder makes any guarantee
as to the accuracy or completeness of the matters disclosed below. Furthermore, Declarant and
Participating Builders are under no obligation to update or revise any matter disclosed in this
Article. This Article is intended to provide Owners with information known or provided to
Declarant as of the date this Community Declaration was Recorded, to be used as a starting point
for further independent investigation.
3.1 COMMUNITY ENHANCEMENT FEE AGREEMENT. By accepting a deed
to a Lot in the Community, each Owner acknowledges that a Community Enhancement Fee
Agreement ("Fee Agreement") has been Recorded against the Lot. Each Owner understands
that the fees collected under the Fee Agreement will finance the cost of special community
services ("Community Services'l to be provided by ACS to residents of the Community.
Community Services include sponsoring and coordinating various community activities and
other programs that are not provided by the Community Association. The Community
Association does not provide the Community Services, they are not paid from Common
Expense, and no part of the Annual Assessments will be used to defray their cost. Instead, the
Fee Agreement governs the funding of ACS. The Fee Agreement requires each initial buyer to
pay a "Community Enhancement Fee" of one -eighth (1/8) of one percent of the purchase price at
the Close of Escrow for purchase of the Lot from Declarant. Thereafter, when an Owner re -sells
a Lot to a subsequent purchaser, the Community Enhancement Fee will be one-fourth (1/4) of
one percent of the resale purchase price.
3.2 NO REPRESENTATIONS OR WARRANTIES. No representations or
warranties, express or implied, have been given by Declarant, Participating Builders, the
Community Association or their agents in connection with the Community, its physical
condition, zoning, compliance with law, fitness for intended use, or in connection with the
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subdivision, sale, operation, maintenance, cost of maintenance, taxes or regulation of the
Community as a planned unit development, except as expressly provided in this Community
Declaration, as submitted by Declarant or Participating Builder to the DRE, or provided by
Declarant or Participating Builder to the first Owner of each Lot.
3.3 SPECIFIC PLAN. The Community is within the boundaries of the Specific
Plan. The Specific Plan governs development activities within its boundaries, and it restricts the
types of construction that may be undertaken in the Community. A depiction showing the land
use plan for the Community as provided in the Specific Plan is attached hereto as Exhibit L
Owners are advised that the Specific Plan may change from time to time with the approval of the
City. The effectiveness of a Specific Plan amendment affecting land uses in the Community
shall not depend upon any amendment to this Community Declaration or other Governing
Documents, notwithstanding the attachment of a copy of the current land use plan for the
Community as Exhibit L
3.4 ELECTRIC POWER LINES. Underground or overhead electric transmission and
distribution lines and transformers are located in and around the Community. The lines and
transformers are owned, operated and maintained by a local utility. Power lines and transformers
produce extremely low -frequency electromagnetic fields ("ELF-EMF' when operating. For some
time, there has been speculation in the scientific community about health risks associated with living
near ELF-EMF sources. In 1992, the United States Congress authorized the Electric and Magnetic
Fields Research and Public Information Dissemination Program ("EMF RAPID Program') to
perform research on these issues and to analyze the existing scientific evidence in order to clarify the
potential for health risks from exposure to ELF-EMF. In May of 1999, the National Institute of
Environmental Health Sciences ("NIEHY) issued a report to Congress summarizing its review of
scientific data from over three hundred (300) studies on ELF-EMF health risks. The ELF-EMF
studies consist of both epidemiological studies (studies of exposure in human populations) and
controlled laboratory experiments on animal and cell models. While some epidemiological studies
suggested some link between certain health effects and exposure to ELF-EMF, the laboratory
experiments did not support such a link. According to the NIEHS report, the scientific evidence
shows no clear pattern of health hazards from ELF-EMF exposure, and the NIEHS report did not
find evidence of any link sufficient to recommend widespread changes in the design or use of
electrical transmission equipment. However, because the evidence does not clearly rule out any
effect, NIEHS advocated continuing inexpensive and safe reductions in exposure to ELF -ENE and
endorsed current utility practices regarding design and siting of new transmission and distribution
lines. Further information on this subject is available from the Regional ENT Manager, Southern
California Edison Company, 1851 West Valencia Drive, Fullerton, California 92833. Additional
information on ELF-EMF and copies of the NIEHS report are available from the ENT -RAPID
website at http://www.niehs.nih.gov/health/topies/agents/emf.
3.5 RURAL AREA. The Community is located in a rural area which includes
various rural land uses. As a result of the rural character of the area in the vicinity of the
Community, Lots may be affected by wildlife, noises, odors, reptiles or insect life typically
found in rural areas. Snakes, rodents, mountain lions and coyotes are some of the wildlife
typically encountered in rural areas. Owners should expect to encounter insects of all types
including flies, ticks, Africanized (killer) bees, mosquitoes, spiders, black and red fire ants,
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crickets and aphids. Declarant, Participating Builders and the Community Association are not
responsible for wildlife control or eradication.
3.6 NOTICE OF RIGHT TO FARM. This Property is located within one mile of a
farm or ranch land designated on the current county -level GIS "Important Farmland Map" issued
by the California Department of Conservation, Division of Land Resource Protection.
Accordingly, the Property may be subject to inconveniences or discomforts resulting from
agricultural operations that are a normal and necessary aspect of living in a community with a
strong rural character and a healthy agricultural sector. Customary agricultural practices in farm
operations may include, but are not limited to, noise, odors, dust, light, insects, the operation of
pumps and machinery, the storage and disposal of manure, bee pollination, and the ground or
aerial application of fertilizers, pesticides and herbicides. These agricultural practices may occur
at any time during the 24-hour day. Individual sensitivities to those practices can vary from
person to person. You may wish to consider the impacts of such agricultural practices before
you complete your purchase. Please be advised that you may be barred from obtaining legal
remedies against agricultural practices conducted in a manner consistent with proper and
accepted customs and standards pursuant to Section 3482.5 of the Civil Code or any pertinent
local ordinance.
Each Owner, for and on behalf of himself, and the members of his family, his tenants,
lessees, guests and invitees, expressly acknowledges and accepts these existing and future
impacts and forever waives any and all causes of actions against the City, County, Declarant,
Participating Builders, the Community Association and their respective directors, officers,
employees, agents, representatives and consultants for any damages or injuries which may arise
from or relate to any such conditions or risks. Neither the City, County, Declarant, Participating
Builders nor the Community Association have any control over agricultural operations on lands
outside the Community.
3.7 ARCHAEOLOGICAL FINDINGS. Significant archaeological relics have been
found in and near the Community. Owners are advised that any materials suspected to be of an
archeological or paleontological nature should be left untouched and the Community Association
should be immediately notified. Certain areas in and around the Community, including land
gifted to the Pechanga Band of Luiseno Indians, are closed to use. Trespassing in these areas is
prohibited.
3.8 OFFERS OF DEDICATION. Portions of the Community Common Area are
subject to irrevocable offers of dedication as shown on the Recorded tract maps for the
Community. The City or County may accept the offer of dedication and assume responsibility
for maintaining these portions of the Community Common Area at any time. If accepted by the
City or County at a later time, the level of maintenance provided by the City or County may not
be the same as that provided by the Community Association,
3.9 PROPERTY LINES. The boundaries of each Lot in the Community and the
Community Common Area owned in fee simple by the Community Association are delineated
on subdivision (tract) maps, lot line adjustments or parcel maps that are public records and are
available at the County Recorder's office.
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3.10 CHANGE IN PLANS. Declarant and Participating Builders have the right to
develop the Annexable Territory with Improvements that may be different in design, size,
character, style and price from those in any other Phase.
3.11 MAINTENANCE DISTRICTS. The Maintenance Areas will be owned and
maintained by the Maintenance Districts until they are unwilling or unable to maintain all or a
portion of the Maintenance Areas. While the Maintenance Districts are maintaining the
Maintenance Areas, the costs of such maintenance will be charged to the Owners on their
property tax bills. Responsibility for maintaining the Maintenance Areas within the district's
responsibility (together with any fee or easement interest(s) therein) would be transferred to the
Community Association at the City's or County's discretion, as applicable, and the Community
Association shall be obligated to accept such Maintenance Areas and maintenance responsibility
when tendered. Thereafter, such Maintenance Areas shall be Community Common Property and
the Community Association shall collect Annual Assessments in the amount needed to maintain
such Maintenance Areas.
3.12 WATER QUALITY BASINS. Water quality basins will be constructed in the
vicinity of the Community and will be owned and maintained by the Riverside County Flood
Control District. It is expected that these basins will contain water during seasonal rains and
may contain water at all times of the year. Children and animals must be closely watched to
prevent accidental drowning and other such injuries around these basins. Neither Declarant, the
Community Association, nor any Participating Builder is responsible for maintenance of the
water quality basins, or for the safety of an Owner or an Owner's family, guests, invitees,
tenants, agents or employees.
3.13 SEWER LIFT STATIONS. Sewer lift stations may be constructed near the
Community. Owners of Lots near the lift stations may experience an increase in noise and dust
levels in the area of the lift stations during construction periods and less significant noise levels
after completion. Owners may encounter some odors in the areas near the lift stations. The lift
stations will be operated and controlled by Eastern Municipal Water District. Neither Declarant,
the Community Association, nor any Participating Builder will have any control over the use,
maintenance or care of the lift stations.
3.14 PROPOSED ELEMENTARY AND MIDDLE SCHOOLS. A public
elementary school and a public middle school are proposed for development in the vicinity of the
Community. The schools, if constructed, will be owned and operated by the Menifee Unified
School District. Declarant makes no representations or warranties that children residing in the
Community will be offered a place in either of the schools. If the schools are constructed,
residents of the Community will notice noise and traffic connected with school activities.
3.15 PROPOSED PUBLIC PARKS. The Specific Plan proposes that public parks
may be developed in the vicinity of the Community. If constructed, these parks may offer sports
fields with night lighting, tot lots, picnic areas and passive recreational amenities, and public
parking lots. Some proposed parks may be directly accessible from public streets in the
Community. The public parks will be owned and maintained by the City of Menifee, and neither
Declarant, the Participating Builders, nor the Community Association have the power to restrict
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or control public access to or use of the public parks. Residents of Lots in the vicinity of the
parks will notice noise and traffic from normal use of the parks and maintenance activities.
3.16 SURROUNDING USES. Uses and Improvements in the immediate vicinity of
the Community include the items listed below. Neither Declarant, the Participating Builders nor
the Community Association has any control over uses of property lying outside the Community.
Owners are advised to contact applicable local governmental agencies for updated information.
3.16.1. North of the Community:
(a) Single-family homes and vacant land which may be developed
in the future. The vacant land is not a part of the Community.
(b) EMWD Sewer Treatment Plant. Residents of the Community
in the vicinity of the treatment plant may be inconvenienced by noise and odors from the use of
the treatment plant.
3.16.2. South of the Community:
(a) Holland Road. Residents of the Community may notice noise
on this public street at any hour of the day or night.
(b) Future residences of Canyon Hills Specific Plan. Additional
information regarding this development is available from the City of Elsinore, California.
3.16.3. West of the Community:
(a) Canyon Lake and single-family homes. Residents of the
Community in the vicinity of Canyon Lake may notice noise from recreational activities around
the lake.
(b) Commercial Center. Residents of the Community in the
vicinity of the commercial center may notice noise and traffic due to the use of the commercial
center.
(c) Church. Residents of the Community in the vicinity of the
church may notice additional noise and traffic in the area associated with normal church
activities.
3.16.4. East of the Community:
(a) Single-family homes and vacant land. The vacant land may be
developed in the future with homes or other uses and is not a part of the Community.
(b) Commercial Center. Residents of the Community in the
vicinity of the commercial center may notice noise and traffic due to the use of the commercial
center.
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(c) Murrieta Road. Residents of the Community may notice noise
on this public street at any hour of the day or night.
3.17 UTILITY IMPROVEMENTS. There may be above -ground and subterranean
utility Improvements such as transformers, lift stations, water or sewer facilities,
telecommunications vaults and other visible Improvements necessary for the delivery of utilities
or other services either on or adjacent to each Lot. Each Owner understands that the placement
of such Improvements is dictated by the needs of the applicable utility or service provider, and
the presence of such Improvements in the Community is in accordance with easements created
prior to or during the development of the Community. Each Owner, by accepting a deed to a Lot
in the Community, understands that each Lot and portions of the Community Common Property
are subject to one or more such easements for placement of utility Improvements. No Owner
may modify, remove or otherwise interfere with utility Improvements on any Lot or other
portion of the Community.
3.18 RECLAIMED WATER. In its efforts to conserve water, the local water district
("Water District") requires the use of reclaimed water to irrigate parks, school yards, golf
courses, greenbelt areas, Fuel Modification Zones, major slopes and other large landscaped
areas. Reclaimed water is partially treated waste water. It is not treated to be suitable for
consumption by humans or domestic animals.
Declarant has installed in parts of the Community Common Property irrigation
equipment that is designated for reclaimed water service. Such equipment is purple in color for
ready identification. The Water District may extend reclaimed water service to the Community.
There is no fixed date for the commencement of reclaimed water service, but all Persons in the
Community should always assume that water originating from purple irrigation equipment is
reclaimed, and therefore never suitable for human or domestic animal consumption. There is no
way to reliably tell the difference between potable water and reclaimed water without a chemical
test. The water delivered to the Residences will at all times be domestic potable water.
As with any water overspray, the repeated spray of reclaimed water used in irrigation
may stain or discolor personal property, fences, walls and other Improvements. Neither
Declarant, Participating Builders nor the Community Association nor their officers, directors,
employees or agents are liable for any property damage or personal injury caused by reclaimed
water. Further information concerning reclaimed water is available at the Water District's
headquarters.
3.19 MOLD. Molds are simple, microscopic organisms, present virtually everywhere,
indoors and outdoors. Mold can be any color, but is usually green, gray, brown or black. Mold
requires a food source (such as paper, wood, leaves or dirt), a source of moisture and a suitable
temperature (generally 40-100 degrees Fahrenheit) to grow.
Individuals are exposed to molds on a daily basis, and in most instances there are no
harmful effects. However, the buildup of molds in the indoor environment may contribute to
serious health problems for some individuals. Due to a variety of factors, including the fact that
sensitivities to various types of molds and other potential contaminants vary from person to
person, there are currently no state or federal standards concerning acceptable levels of exposure
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to mold. Sources of indoor moisture that may lead to mold problems include, but are not limited -
to flooding, leaks, seepage, sprinkler spray hitting the Residence, overflow from sinks or sewers,
damp basement or crawl space, steam from shower or cooking, humidifiers, wet clothes drying
indoors, watering house plants, and clothes dryers exhausting indoors.
Each Owner should take precautions to prevent the growth of mold in the Residence from
these and other sources. Preventative measures include, but are not limited to the following: (1)
regularly cleaning the Residence; (2) regularly checking for accumulated moisture in corners and
unventilated areas; (3) running fans, dehumidifiers and air conditioners to reduce indoor
humidity; (4) stopping the source of any leak or flooding; (5) removing excess water with mops
or a wet vacuum; (6) moving wet items to a dry, well ventilated area; (7) regularly cleaning and
disinfecting indoor and outdoor surfaces that may contain mold; (8) having major appliances,
such as furnaces, heat pumps, central air conditioners, ventilation systems and furnace -attached
humidifiers inspected, cleaned and serviced regularly by a qualified professional; (9) cleaning
the refrigerator, air conditioner and dehumidifier drip pans and filters regularly and ensuring that
refrigerator and freezer doors seal properly; and (10) avoiding over -watering of landscaping.
It is the Owner's responsibility to monitor the Residence and Lot on a continual basis for
excessive moisture, water and mold accumulation. For additional information regarding mold,
please refer to the following websites: California Department of Public Health is
http://www.edph.ca.gov; Centers for Disease Control and Prevention — http://www.cdc.gov/nceh;
U.S. Environmental Protection Agency — http://www.epa.gov; Illinois Department of Public
Health — http://www.idph.state.il.us; and Washington State Department of Health —
http://www.doh.wa.gov.
3.20 RADON. Radon is a colorless, odorless radioactive gas that is produced by the
natural decay of uranium, which is found in nearly all soils. Because radon is a gas, it can seep
from the ground into the air in a house through openings in the ground, and its presence increases
the risk of lung cancer. The U.S. Environmental Protection Agency (the "EPA") and U.S.
Geological Survey have produced a map that assigns one to three zone designations based on
radon potential to each county. According to the EPA, each zone designation reflects the
average short-term radon measurement that can be expected to be measured in a building without
the implementation of radon control measures. This map is not meant to be used to determine
whether a particular home should be tested for radon, but is used to assist various government
agencies and organizations in focusing their radon program resources. Declarant has been
informed by its consultants that the County is currently in Zone 2, which has a radon potential of
moderate (from 2 to 4 pCi/L). Declarant, Participating Builders and the Community Association
make no representations, warranties or guarantees as to the degree of radon risk within the
Community. Owners are advised to consult with the County or other public agencies and
appropriate experts to evaluate the potential risk. Additional information may be found at
http://eetd.lbl.gov/IEP/high-radon/USgm.httn.
3.21 SOIL CONDITIONS. For in-depth information regarding the geotechnical
aspects of the Community, Owners should review the geotechnical report entitled "Geologic and
Geotechnical Report for use with Special Land Use Plan/EIR, Audie Murphy Ranch Property,
Canyon Lake Area, Riverside County, California" dated August 24, 2001 ("Soils Report'.
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A copy of the Soils Report is available for viewing at the City of Menifee, Engineering
Department.
3.21.1. Expansive Soil. According to the Soils Report, soil in the Community
is expansive in nature. Expansive soil expands when it becomes wet and it contracts when it
dries out. Expansion and contraction of soils may cause movement, lifting, cracking and distress
in slabs, patios, sidewalks and other flatwork improvements. Some cracking is normal in all
flatwork improvements, with or without expansive soils. However, some expansion damage
may be reduced by use of appropriate design and construction techniques. When designing
flatwork and other Improvements, Owners should advise their consultants that designs must
accommodate soils with expansion potential.
3.21.2. Geogrid Slope Reinforcement. According to the Soils Report, it may
be necessary to install Geogrid in some Lots that are adjacent to slopes. Geogrid is a buried
fiberglass reinforcing structure that is intended to stabilize certain slopes in the Community. By
accepting a deed to Lots containing Geogrid, the Owner agrees to consult a soils engineer prior
to performing any excavation in the backyard or in any other areas that are adjacent to a slope.
Owner further agrees not to construct any Improvements that will interfere with or disturb the
Geogrid.
3.21.3. Rocky Soils. According to the Soils Report, soils within portions of the
Community may contain subterranean rock. Consequently, installation of spas, landscaping and
other Improvements which require digging, trenching or other excavation may be more
expensive due to the possibility of encountering buried rocks and the necessity of removing
them. Owners should advise their consultants or contractors of this condition.
3.21.4. Corrosive Soil. Soils in the Community may be corrosive. Corrosive
soil may corrode buried metal Improvements. Owners should advise their consultants that
below -ground Improvements must be constructed of materials that are compatible with corrosive
soils.
3.21.5. Shallow Groundwater. According to the Soils Report, the nature of
the onsite soil and bedrock makes shallow groundwater a possibility. In some areas of the
Community, groundwater may be found at a depth of four feet below the surface of the land.
Owners must maintain existing drainage away from slopes and structures and toward the street.
3.22 NATURAL HAZARD ZONE DISCLOSURES. The following disclosures are
made in reliance on information disclosed in the California Developer Disclosure Report dated
June 14, 2010 ("Disclosure Report'), which was prepared for Declarant by Disclosure Source.
According to the Disclosure Report, all or portions of the Community lie within the mapped
boundaries of the following natural hazard zones:
3.22.1. Seismic Hazard Zones. According to the Disclosure Report, the State
of California has not yet produced any Seismic Hazard Zone maps for the Community as of the
date thereof. As maps are issued by the state, they are provided to each state agency, City or
County having jurisdiction over lands containing an area of seismic hazard. The County
Recorder is required to record all information transmitted as a part of the public record.
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"Seismic Hazard Zone" is defined in the Seismic Hazards Mapping Act (California Public
Resources Code Section 2690, et seq.) to include landslide zones and liquefaction zones. In a
landslide zone, shaking may cause movement of unstable slopes. In a liquefaction zone, water -
saturated soils become unstable under heavy shaking and thereby jeopardize foundations and
other structures. Land and Improvements located in a Seismic Hazard Zone may be at increased
risk of damage to property from landslides or liquefaction. The Soils Report provides that
although the published geologic maps do not indicate any faults crossing the Community, the
land in the Community has experienced strong ground shaking in the past due to earthquakes on
faults within 100 km and will likely experience strong ground shaking in the future, and because
of earthquake induced strong ground motion, localized areas within the Salt Creek River 100-
year flood plain may be subject to liquefaction.
3.22.2. Supplemental Seismic/Geologic Hazard. Although state -produced
seismic maps do not yet exist for the Community, the County has produced maps that indicate
many hazards that may or may not be seismically related, including liquefaction, landslides,
debris flows, mudslides, erosion, seismic activity, or even human activity. The severity of a
geologic hazard depends on the underlying geology, slope, proximity to earthquake faults, and
soil type in the area. According to the Disclosure Report, County maps disclose that portions of
the Community lie within areas of moderate or very high liquefaction potential, depending on
location, and an area of potential subsidence. Subsidence is vertical displacement, gradual
settling or sinking of soils, and it may occur if groundwater, oil or natural gas is withdrawn from
the ground where soils have a high silt or clay content. Subsidence can cause uneven settling of
structures.
3.22.3. State Responsibility Area. According to the Disclosure Report,
portions of the Community are located within a State Responsibility Area due to wildland
exposure. State Responsibility Areas are usually wildland areas that may contain substantial risk
of forest fire and hazards. Government regulations may impose restrictions and requirements on
building that could substantially limit or otherwise impact the Owner's right to construct and
modify Improvements pursuant to Section 4125 of the Public Resources Code. An Owner's Lot
is subject to the maintenance requirements of Section 4291 of the Public Resources Code. It is
not the state's responsibility to provide fire protection services to any building or structure
located within the State Responsibility Area, unless the Department of Forestry and Fire
Protection has entered into a cooperative agreement with a local agency for those purposes
pursuant to Section 4142 of the Public Resources Code. These maps are updated periodically,
and Declarant and Participating Builders make no representations, guarantees or warranties with
respect to any future state responsibility area determinations.
3.22.4. Supplemental Fire Hazard Disclosure - Moderate Fire Hazard.
According to the Disclosure Report, portions of the Community are located within a Moderate
Fire Hazard Zone, as designated by the County. These are zones described as areas lying
adjacent to extensive wildland areas, which contain the condition and type of topography,
weather, vegetation and structure density to increase the susceptibility to fires. In these areas, the
County will likely impose strategies to enforce stringent fire enforcement measures, including
fire or fuel breaks, brush clearance, and fuel load management measures. For example, emphasis
on roof type and fire -resistive materials may by necessary for new construction or roof
replacement. In addition, other fire defense Improvements may be demanded, including special
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weed abatement, brush management, and minimum clearance around structures. Insurance rates
may be affected. Owners are advised to contact the local fire department or planning
commission to ascertain what additional required Improvements are needed, as well as the
Owner's insurance carrier for accurate rate data.
3.22.5. Supplemental Fire Hazard Disclosure - High Fire Hazard.
According to the Disclosure Report, portions of the Community are located within a High Fire
Hazard Zone, as designated by the County. These are zones described as areas lying adjacent or
within areas containing highly combustible plant communities which are susceptible to fires. In
these areas, the County will likely impose strategies to enforce stringent fire enforcement
measures, including fire resistive construction materials, brush clearance, fire breaks, and fuel
load management measures. For example, Class "A" roofs may be necessary for new
construction or roof replacement, plus other fire defense Improvements may be demanded,
including minimum clearances around structures. Insurance rates may be affected. Owners are
advised to contact the local fire department or planning commission to ascertain what additional
required Improvements are needed, as well as the Owner's insurance carrier for accurate rate
data.
3.22.6. Area of Potential Flooding. According to the Disclosure Report,
portions of the Community are located within an Area of Potential Flooding (or Dam Inundation
Zone) pursuant to dam failure inundation maps that are shown on a particular Transfer Date on
maps reviewed, approved and maintained by the Office of Emergency Services. These maps are
designate areas within which inundation and flooding could result from the sudden, partial or
total failure of any dam. The actual risk of dam failure is not defined by the maps. These areas
of potential flooding, as defined in the California Emergency Services Act (California
Government Code Section 8984.4, et seq.), are shown on maps released by the Office of
Emergency Services, copies of which are also on file with the County. These maps are updated
periodically, and Declarant and Participating Builders make no representations, guarantees or
warranties with respect to any future dam inundation zone determinations. Owners should
contact the Office of Emergency Services for further information concerning Areas of Potential
Flooding.
3.22.7. Special Flood Hazard Area. A portion of the Community lying
alongside Salt Creek is located in a Special Flood Hazard Area ("SFHA'� designated as a Zone
A or Zone V by the Federal Emergency Management Agency ("FEMA'� known as a flood
plain. FEMA is required by Federal law to compile Flood Insurance Rate Maps identifying areas
of potential flooding. If a property is located in a Special Flood Hazard Area, the cost and
availability of flood insurance may be affected. Property located within a SFHA is subject to a
one percent (1%) or greater chance of complete or partial flooding in any given year. FEMA
defines this type of flood as the "base flood" which is more commonly known as a "100-year
flood." A 100-year flood has a 26% chance of occurring during any 30 year period. Further
information is available from FEMA and the County. According to FEMA maps current as of
the date of Recordation hereof, no residential Lot is located within the SFHA. Declarant is
advised that a 100-year flood event could cause stormwater to run through Salt Creek at
approximately 16,000 cubic feet per second during the peak of the storm. Children and pets
should be kept away from the Salt Creek Riparian Area particularly during storm periods.
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3.23 SALT CREEK RIPARIAN AREA. Salt Creek is a seasonal creek and
floodplain that passes through the Community. The portion of the Salt Creek Riparian Area that
has drainage features will be owned and maintained by the Riverside County Flood Control
District. The environmentally sensitive portion of the Salt Creek Riparian Area will be owned
and maintained by the Declarant during a mitigation period pursuant to Recorded restrictive
covenants entered into with the City. At the end of the mitigation period, the environmentally
sensitive portion of the Salt Creek Riparian Area will be conveyed to the City which will assume
responsibility for its maintenance that will likely be funded through a special maintenance
district. Because the area and trails will be publicly owned, members of the public will have the
right to pass through the Community on the trails. Owners and other residents are advised that
this area contains endangered species and sensitive habitats and that certain areas within the
riparian area will be closed to use. Signage will be posted to inform the public of the sensitive
nature of portions of the riparian area.
3.24 PROPOSED PUBLIC TRAILS. The Specific Plan proposes that public trails
may be developed in the vicinity of the Community. Portions of the public trails that cut across
the Salt Creek Riparian Area will be maintained by the County Parks District. The remainder of
the public trails will be maintained by the City Maintenance District. By accepting a deed to a
Lot in the Community, each Owner acknowledges that the City has required that members of the
public be allowed free access to the trails. Each Owner is advised that ownership of a Lot in the
Community does not confer any exclusive right to use the trails. Occupants of the Community
may notice noise from use of the trails at various times of the day. Neither Declarant, the
Community Association, nor any Participating Builder has any control over whether the trails
will be constructed as proposed in the Specific Plan, or whether any or all will be constructed at
all.
3.25 COMMUNITY RECREATIONAL FACILITIES. As of the date of Recording
of this Community Declaration, Declarant plans to construct and sell the Community
Recreational Facilities to the Community Association. The Community Recreational Facilities
will be conveyed to the Community Association after construction is complete (as evidenced by
Recordation of a Notice of Completion as defined in California Civil Code Section 3093). Upon
conveyance of completed Community Recreational Facilities, the Community Association will
deliver to the Declarant a fully executed Community Recreational Facilities Note with a
principal amount representing the purchase price for the Community Recreational Facilities.
3.25.1. Community Recreational Facilities Note. The principal amount of the
Community Recreational Facilities Note represents the amount that the Community Association
shall pay to purchase completed Community Recreational Facilities from Declarant. The
principal amount is determined from Declarant's Costs (as defined in Section 1.1.22). The
Community Recreational Facilities Note requires the Community Association to pay Declarant
regular installments of principal and interest to fully amortize the purchase of the Community
Recreational Facilities over a period of ten years, and to pay such other costs and fees as
described in the Community Recreational Facilities Note, all as disclosed in the DRE-reviewed
Budget. The installments payable by the Community Association under the Community
Recreational Facilities Note shall be a Common Expense of the Community Association, and
they will be charged to each of the Owners as part of the Community Recreational Facilities
Charges component of each Owner's Annual Assessments. Installments under the Community
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Recreational Facilities Note shall commence concurrently upon, or after the date on which the
Community Association is conveyed fee title to the Community Recreational Facilities, all as
provided in the Community Recreational Facilities Note, the substantial form of which is
attached hereto for informational purposes as ExhibitH.
3.25.2. Purchase Price Sinking Fund. The Community Association shall
regularly assess each Owner, as part of each Owner's Community Recreational Facilities
Charges component of Annual Assessments, amounts sufficient to establish a 5% Purchase Price
Sinking Fund to cover defaults in the payment by individual Owners of amounts charged for
principal and interest under the Community Recreational Facilities Note, as disclosed in the
DRE-reviewed Budget. Assessments to create the Purchase Price Sinking Fund shall begin upon
the commencement of payments of principal and interest under the Community Recreational
Facilities Note. The Purchase Price Sinking Fund may be used only to cover defaulting
individual Owner payments of attributable to principal and interest due under the Community
Recreational Facilities Note. The Purchase Price Sinking Fund payments shall be retained in a
separate account by the Community Association until such time as the amount of the total
Purchase Price Sinking Fund equals the outstanding balance of the Community Recreational
Facilities Note, at which time the Purchase Price Sinking Fund shall be applied to payment of
such outstanding balance.
3.25.3. Reserves for Community Recreational Facilities. Consistent with
Title 10, California Code of Regulations Section 2792.320)(11), on the first day of the first
month following the date of Recordation of a Notice of Completion against the Community
Recreational Facilities under California Civil Code Section 3093, Annual Assessments shall
include amounts attributable to reserves for the Community Recreational Facilities amenities as
disclosed in the DRE-reviewed Budget. This obligation shall commence without regard to
whether the Community Recreational Facilities has been conveyed in fee to the Community
Association.
3.25.4. Impact of Community Recreational Facilities on Surrounding Area.
Owners and other residents living in the area of the Community Recreational Facilities will most
likely notice noise from activities in the Community Recreational Facilities, noise from
landscaping and other maintenance activities, night-time glare from outdoor lighting, and be
subject to or otherwise inconvenienced by pedestrian and vehicular traffic in the areas
surrounding the Community Recreational Facilities. Additionally, from time to time, balls and
other objects may be hit out of the Community Recreational Facilities and into Lots and adjacent
areas. The Board may, from time to time, promulgate rules for use and operation of the
Community Recreational Facilities, including reasonable hours of operation.
3.26 COMMERCIAL/INDUSTRIAL ZONING DISCLOSURE. The Community
is located within one (1) mile of a property zoned for commercial or industrial use. This
disclosure is made in accordance with California Code of Civil Procedure Section 731a which
requires disclosure when real property may be affected by industrial uses in accordance with
California Civil Code Section 1102.17. Neither Declarant, Participating Builders nor the
Community Association has any control over the use, operation or maintenance of the
commercial/industrial property.
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3.27 AIRPORT PROXIMITY NOTICE. According to information provided to
Declarant from its consultants, the Community is located within the below estimated distances of
the following airports:
Perris Valley Airport 5.9 miles
Bear Creek Airport -8.8 miles
French Valley Airport 12.8 miles
3.28 SPECIAL DISTRICTS. The Community may be within the boundaries of the
following special districts:
3.28.1. Perris Union High School District Community Facilities District No.
92-1. Perris Union High School District Community Facilities District No. 92-1 is a Mello -Roos
Community Facilities District formed to provide financing for a portion of the construction and
acquisition of a high school. Mello -Roos Community Facilities Districts are created by local
government agencies to finance public improvements and services when no other source of funds
is available. The district will levy a special tax lien against each Lot in the district's boundaries.
District charges will appear on each Owner's property tax bill. Such districts also have the
power to sell municipal bonds to raise additional funds if they are necessary to build the public
improvements or fund the services. Such districts have rights to accelerated foreclosure if
assessments are delinquent for more than a specified amount of time. The amount of the special
tax and any other information pertaining to any such district can be obtained from the County
Assessor's office.
3.28.2. Menifee Union Unified School District Community Facilities
District. Menifee Union Unified School District Community Facilities District is a Mello -Roos
Community Facilities District formed to finance public improvements and services. Once
formed and approved, the district will levy a special tax lien against each Lot in the district's
boundaries. District charges will appear on each Owner's property tax bill. Such districts also
have the power to sell municipal bonds to raise additional funds if they are necessary to build the
public improvements or fund the services. Such districts have rights to accelerated foreclosure if
assessments are delinquent for more than a specified amount of time. The amount of the special
tax and any other information pertaining to any such district can be obtained from the County
Assessor's office.
3.28.3. CFD 2011-01; Future City Maintenance Districts. The Community
will be annexed to CFD 2011-01 (Audie Murphy Ranch Services) and/or to one or more other
special districts, which has the responsibility to maintain any of the following: certain drainage
facilities, street lighting, entry monumentation, slopes, parkways, paseos, parks, trails and open
space in and around the Community, performing street sweeping in and around the Community,
all as approximately depicted on Exhibit F, and for eventual maintenance of the Salt Creek
Riparian Area. The Maintenance Districts will each have the power to assess a service charge
against the Lots in the Community that are within their respective jurisdictional boundaries.
Such service charges will constitute a continuing lien on each Owner's Lot and will appear as a
charge on each Owner's County real property tax bills. In the event an Owner fails to pay the
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service charges when due, the City or applicable authority may exercise its legal remedy to
foreclose on such Owner's Lot. By accepting a deed to a Lot, each Owner agrees to support and
not oppose the annexation of any portion of the Community into the Maintenance Districts.
Declarant and other developers of real property in the jurisdiction of the Maintenance Districts
may be required to advance the cost of the sewer and drainage Improvements to be maintained
by the district. At least some of the costs advanced by Declarant may be reimbursed by the
district from service charges or from funds received by the district from state or federal sources.
Any right to reimbursement of funds advanced by Declarant shall belong exclusively to
Declarant, and no Owner of a Lot in the Community (except for Declarant) shall have the right to
any such reimbursement by the district. By accepting a deed to a Lot in the Community, each
Owner waives any and all claim to any such reimbursement which may accrue by virtue of
ownership of a portion of the Community.
3.28.4. Other Districts. This Section is not intended to be an exhaustive list of
districts that presently affect the Community. The Community may at present lie within other
districts, or it may be annexed to other districts from time to time in the future. Owners are
advised to consult the County Assessor's office for further information.
3.29 SUPPLEMENTAL TAXES. The following notice is given pursuant to Section
1102.6c of the California Civil Code:
"California property tax law requires the Assessor to revalue real
property at the time the ownership of the property changes.
Because of this law, you may receive one or two supplemental tax
bills, depending on when your loan closes. The supplemental tax
bills are not mailed to your lender. If you have arranged for your
property tax payments to be paid through an impound account, the
supplemental tax bills will not be paid by your lender. It is your
responsibility to pay these supplemental bills directly to the Tax
Collector. If you have any question concerning this matter, please
call your local Tax Collector's Office."
3.30 NO ENHANCED PROTECTION AGREEMENT. No language contained in
this Community Declaration, any Notice of Addition, or any Supplemental Community
Declaration shall constitute or be interpreted to constitute an "enhanced protection agreement" as
defined in Section 901 of the California Civil Code. Further, no express or implied
representations or warranties made by Declarant in any other writing are intended to constitute,
or to be interpreted to constitute, an enhanced protection agreement.
3.31 EXTERIOR LIGHTING LIMITATIONS. The Community is subject to
restrictions for the benefit of Mount Palomar Observatory, which are set forth in "County
Ordinance No. 655, an Ordinance of the County of Riverside Regulating Light Pollution"
("Ordinance 655") and are intended to reduce the effects of night lighting on the Mount Palomar
Observatory. All exterior lighting systems and fixtures in the Community must comply with the
restrictions in Ordinance 655. General requirements of Ordinance 655 include the designation of
low-pressure sodium lamps as a preferred illuminating source, shielding of lighting to minimize
light spill into the night sky and onto adjacent properties, prohibiting certain light sources
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entirely, and limiting the hours of operation for all nonexempt light sources. A copy of
Ordinance 655 is available on the County website: http://www.co.riverside,ca.us/depts/
brdofsup/ords/655.htm.
3.32 ADDITIONAL PROVISIONS. There may be provisions of various laws,
including the Davis -Stirling Common Interest Development Act codified at Sections 1350, et
seq. of the California Civil Code and the Federal Fair Housing Act codified at Title 42 United
States Code, Section 3601, et seq., which may supplement or override the Governing
Documents. Declarant makes no representations or warranties regarding the future
enforceability of any portion of the Governing Documents.
ARTICLE IV
THE COMMUNITY ASSOCIATION
4.1 GENERAL DUTIES AND POWERS. The Community Association has the
duties and powers enumerated and described in the Governing Documents, in addition to the
general and implied powers of a nonprofit mutual benefit corporation, generally to do all things
that a corporation organized under the laws of the State of California may lawfully do which are
necessary or proper in operating for the general welfare of the Owners, subject only to the limits
on the exercise of such powers listed in the Governing Documents. Unless otherwise indicated
in the Articles, Bylaws, this Community Declaration, or the Supplemental Community
Declarations, the powers of the Community Association may be exercised by the Board.
4.2 SPECIFIC DUTIES AND POWERS. In addition to its general powers and
duties, the Community Association has the following specific powers and duties.
4.2.1. Maintenance Area. If any Maintenance District (i) declines or fails to
fulfill its maintenance obligations as to any portion of the Maintenance Areas or any
Improvements located thereon, or (1) is otherwise prevented from performing its obligations
with respect to the Maintenance Areas due to lack of funding pursuant to voter disapproval of
taxes, assessments, fees or levies, the Community Association shall have the power and duty to
undertake such maintenance. Such power and duty shall include the obligation to bring the
Maintenance Areas and any Improvements located thereon into compliance with any applicable
governmental regulations, laws or rules.
4.2.2. Community Common Property. The power and duty to accept,
maintain and manage the Community Common Property in accordance with the Governing
Documents. The Community Association may install or remove capital Improvements on the
Community Common Property. The Community Association may reconstruct, replace or
refinish any Improvement on the Community Common Property.
4.2.3. Utilities. The power and duty to obtain, for the benefit of the
Community, all water, gas and electric services necessary for the Community Common Property,
and the power, but not the duty, to provide for trash collection and cable or master television
service.
4.2.4. Granting Rights. The power to grant exclusive or nonexclusive
easements, licenses, rights of way or fee interests in the Community Common Area owned in fee
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simple by the Community Association, to the extent any such grant is reasonably required (a) for
Improvements to serve the Community, (b) for purposes of conformity with the as -built location
of Improvements installed or authorized by Declarant or the Community Association, (c) in
connection with any lawful lot line adjustment,_ or (d) for other purposes consistent with the
intended use of the Community. This power includes the right to create and convey easements
for one or more Owners over portions of the Community Common Area. The Community
Association may de -annex any portion of the Community from the encumbrance of the
Community Declaration in connection with any lawful lot line adjustment.
After the Community Association acquires fee title to or any easement right over
Community Common Property, the affirmative vote of members owning at least sixty-seven
percent (67%) of the Lots shall be required before the Board may grant exclusive use of any
portion of that Community Common Property to any member, except as provided in California
Civil Code Section 1363.07. Any measure placed before the members requesting that the Board
grant exclusive use of any portion of the Community Common Property shall specify whether
the Community Association will receive any monetary consideration for the grant and whether
the Community Association or the transferee will be responsible for providing any insurance
coverage for exclusive use of the Community Common Property.
4.2.5. Employ Personnel. The power to employ Persons necessary for the
effective operation and maintenance of the Community Common Property, including legal,
management and accounting services.
4.2.6. Insurance. The power and duty to keep insurance for the Community
Common Property in accordance with this Community Declaration.
4.2.7. Sewers and Storm Drains. The power and duty to maintain any
private sewer systems, private storm drains, or private drainage facilities in the Community
Common Property in accordance with the Governing Documents.
4.2.8. Maintenance Guidelines. The power and duty to (a) operate, maintain
and inspect the Community Common Property and its various components in conformity with
any Maintenance Guidelines and any maintenance manual, and (b) review any maintenance
manual for necessary or appropriate revisions no less than annually after the Board has prepared
the Budget.
4.2.9. Rules and Regulations. The power, but not the duty, to adopt, amend,
repeal, and create exceptions to, the Rules and Regulations.
(a) Standards for Enforceability. To be valid and enforceable, a
Rule must satisfy all the following requirements:
(i) The Rule must be in writing;
(ii) The Rule is within the authority of the Board conferred
by law or by this Community Declaration, the Articles or the Bylaws;
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(iii) The Rule- is not inconsistent with governing law, this
Community Declaration, the Articles, or the Bylaws;
(iv) The Rule is adopted, amended or repealed in good faith
and in substantial compliance with the requirements of Article 4 of Title 6 of Part 4 of Division 2
of the California Civil Code;
(v) The Rule is reasonable; and
(vi) The Rule complies with the requirements of California
Civil Code Section 1357.110 (as amended from time to time).
(b) Areas of Regulation. The Rules and Regulations may concern
use of the Community, signs, parking restrictions, minimum standards of property maintenance,
and any other matter under the Community Association's jurisdiction.
(c) Limits on Regulation. The Rules and Regulations must apply
uniformly to all Owners and must comply with this Community Declaration and all applicable
state and local laws. The rights of Owners to display in or on their Lots religious, holiday and
political signs, symbols and decorations of the kinds normally displayed in single family
residential neighborhoods shall not be abridged. However, the Community Association may
adopt time, place and manner restrictions for such displays if they are visible outside the Lot. No
modification to the Rules and Regulations may require an Owner to dispose of personal property
that was in compliance with all rules previously in force; however, this exemption shall apply
only during the period of such Owner's ownership of the Lot and it shall not apply to: (i)
subsequent Owners who take title to a Lot after the modification is adopted; or (ii) clarifications
to the Rules and Regulations.
(d) Procedure for Adoption, Amendment and Repeal. Rules or
procedures concerning (1) the use of Community Common Property, (2) the use of a Lot,
including any aesthetic standards or Design Guidelines that affect Lots, (3) Owner discipline,
including any schedule of monetary penalties for violation of the Governing Documents, (4) any
procedure for the imposition of penalties, (5) any standards for delinquent assessment payment
plans, and (6) any procedures adopted by the Community Association for resolution of
assessment disputes (each, a "Covered Rule' may only be adopted, amended or repealed (each,
a "Rule Change") in accordance with the following procedure:
(i) The Board must provide written notice ("Notice' of a
proposed change in a Rule Change to the members at least thirty (30) days before making the
Rule Change, except for an Emergency Rule Change (defined below). The Notice must include
the text of the proposed Rule Change and a description of the purpose and effect of the proposed
Rule Change;
(ii) The decision on a proposed Rule Change shall be made
at a Board meeting after consideration of comments made by the members of the Community
Association;
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(iii) The Board shall deliver Notice of the adopted Rule
Change to every member of the Community Association within fifteen (15) days of adoption. If
the change was an Emergency Rule Change, the Notice shall include the text of the Emergency
Rule Change, and the date on which the Emergency Rule Change expires;
(iv) If the Board determines that an immediate Rule Change
is required to address an imminent threat to public health or safety, or an imminent risk of
substantial economic loss to the Community Association, it may make the change on an
emergency basis ("Emergency Rule Change' and no Notice will be required. An Emergency
Rule Change is effective for one hundred -twenty (120) days, unless the Emergency Rule Change
provides for a shorter effective period. Any Rule Change that is adopted as an Emergency Rule
Change may not be re -adopted under authority of this subpart.
(v) A Notice required by this Section 4.2.9(d) is subject to
California Civil Code Section 1350.7.
(vi) A Rule Change made pursuant to this Section 4.2.9(d)
may be reversed as provided in California Civil Code Section 1357.140.
(e) Exceptions to Procedure. The procedure in Section 4.2.9(d)
does not apply to:
(i) Rules that do not meet the definition of Covered Rules
above;
(ii) Decisions of the Board regarding maintenance of
Community Common Property;
(iii) A decision on a specific matter that is not intended to
apply generally;
(iv) A decision setting the amount of an Annual Assessment
or a Special Assessment;
(v) A Rule Change that is required by law if the Board has
no discretion as to the substantive effect of the changes; or
(vi) Issuance of a document that merely repeats existing law
or the Governing Documents.
(f) Use of Facilities. The Rules and Regulations may (i) specify a
maximum number of guests which an Owner, tenant or other Person may admit to the
Community Recreational Facilities or other Community Common Area facilities at one time,
(ii) establish rules for allowing Owners, tenants or other Persons to use Community Common
Area facilities for private functions, or (iii) establish admission fees, deposit requirements and
other fees for the use of any facilities on the Community Common Area.
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4.2.10. Borrowings. The power, but not the duty, to borrow money for
purposes authorized by the Articles, Bylaws, Community Declaration, any Supplemental
Community Declarations- or any Notice of Addition, and to use the Community Common Area
owned in fee simple by the Community Association as security for the borrowing.
4.2.11. Contracts. The power, but not the duty, to enter into contracts. This
includes contracts with Owners or other Persons to provide services or to maintain
Improvements in the Community and elsewhere which the Community Association is not
otherwise required to provide or maintain by this Community Declaration.
4.2.12. Lease Agreements. The power to enter into one or more leases with
Declarant or a Participating Builder for the use by the Declarant or Participating Builder of
portions of the Community Recreational Facilities in connection with the marketing and sale of
the Community.
4.2.13. Acceptance of Community Recreational Facilities. The power and
duty to accept conveyance of title to the Community Recreational Facilities when tendered by
Declarant upon Declarant's satisfaction of the requirements of Section 3.25 above and the
reasonable requirements of the DRE. The approval of the Membership shall not be a condition
to acceptance of title to the Community Recreational Facilities.
4.2.14. Execution and Delivery of Community Recreational Facilities
Purchase Agreements and Community Recreational Facilities Notes. The power and duty to
cause the Community Association to execute and deliver to Declarant (a) the Community
Recreational Facilities Purchase Agreements when required by Declarant, and (b) the
Community Recreational Facilities Notes, in accordance with Section 3.25.1 above. The
approval of the Membership shall not be a condition to execution and delivery of the Community
Recreational Facilities Purchase Agreements or the Community Recreational Facilities Notes.
4.2.15. Amendment of Community Recreational Facilities Purchase
Agreements and Community Recreational Facilities Notes. The power to approve
amendments to Community Recreational Facilities Purchase Agreements and Community
Recreational Facilities Notes by a vote of a majority of Directors not appointed by Declarant.
4.2.16. Commencement of Payments under Community Recreational
Facilities Notes, Sinking Fund. The power and duty to collect Community Recreational
Facilities Charges from the Owners, and apply amounts so collected to installments of principal
and interest payable under the Community Recreational Facilities Notes, in accordance with
Section 3.25.1 above, and to establish a sinking fund for the purposes described in Section 3.25.2
above, all as disclosed in the DRE-approved Budget.
4.2.17. Funding Reserves for Community Recreational Facilities. The
power and duty to commence funding reserves for the Community Recreational Facilities as
disclosed in the DRE-reviewed Budget and in accordance with Section 3.25.3.
4.2.18. Telecommunications Contract. Notwithstanding anything in the
Governing Documents to the contrary, the Board shall have the power to enter into, accept an
assignment of, or otherwise cause the Community Association to comply with the terms and
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provisions of a telecommunications services contract ("Telecommunications Contract's with a
telecommunications service provider ("Service Provider', pursuant to which the Service
Provider shall serve as the provider of Telecommunications Services to each Lot in the
Community. The Board shall only enter into, accept an assignment of, or otherwise cause the
Community Association to comply with the terms of the Telecommunications Contract if the
Board determines that the Telecommunications Contract is in the best interests of the
Community Association. Although not exhaustive, the Board shall consider the following
factors in making such a determination in the exercise of its business judgment:
(a) Initial Term and Extensions. The initial term of the
Telecommunications Contract should not exceed five (5) years, and, if the Telecommunications
Contract provides for automatic extensions, the length of each such extension should also not
exceed five (5) years.
(b) Termination. The Telecommunications Contract should provide
that: (i) at least six (6) months prior to the expiration of either the initial or any extended term of
the Telecommunications Contract, the entire Membership of the Community Association may,
with the vote or written approval of more than fifty percent (50%) of all Owners other than
Declarant, prevent any automatic extension that the Telecommunications Contract may provide
for (with or without cause), and thereby cause the Telecommunications Contract to expire, and
(ii) at any time with reasonable notice periods, the Board may terminate the Telecommunications
Contract if, in the sole discretion of the Board, the Service Provider fails to provide quality,
state-of-the-art Telecommunications Services.
(c) Fees. Whether the monthly fee charged to the Community
Association by the Service Provider for the provision of the Telecommunications Services to all
of the Lots represents a discount from the comparable retail fees charged by the Service Provider
in the general geographic area in which the Community is located, and, if so, the amount of such
discount.
(d) Installation of Telecommunications Facilities. Whether the
Service Provider is solely responsible for the installation, and the cost thereof, of all of the
Telecommunications Facilities necessary to provide Telecommunications Services to each Lot.
(e) Removal of Telecommunications Facilities. Whether the
Service Provider has the right to remove the Telecommunications Facilities upon expiration or
termination of the Telecommunications Contract.
4.2.19. Resale Program. After Declarant no longer owns a Lot or portion of
the Annexable Territory, or with Declarant's consent, the Community Association may provide
services related to the sale of real property and may own, operate, and staff a center for the
purpose of facilitating sale of real property in the Community. Any such center shall be operated
in accordance with policies and procedures adopted by the Community Association.
4.2.20. Indemnification.
(a) For Community Association Representatives. To the fullest
extent authorized by law, the Community Association has the power and duty to indemnify
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Board members, Community Association officers, Design Review Committee members, and all
other Community Association committee members for all damages, pay all expenses incurred,
and satisfy any judgment or fine levied as a result of any action or threatened action brought
because of performance of an act or omission within what such person reasonably believed to be
the scope of the Person's Community Association duties ("Official Act'. Board members,
Community Association officers, Design Review Committee members, and all other Community
Association committee members are deemed to be agents of the Community Association when
they are performing Official Acts for purposes of obtaining indemnification from the Community
Association pursuant to this Section. The entitlement to indemnification under this Community
Declaration inures to the benefit of the estate, executor, administrator and heirs of any person
entitled to such indemnification.
(b) For Other Agents of the Community Association. To the fullest
extent authorized by law, the Community Association has the power, but not the duty, to
indemnify any other Person acting as an agent of the Community Association for damages
incurred, pay expenses incurred, and satisfy any judgment or fine levied as a result of any action
or threatened action because of an Official Act.
(c) Provided by Contract. The Community Association also has the
power, but not the duty, to contract with any Person to provide indemnification in addition to any
indemnification authorized by law on such terms and subject to such conditions as the
Community Association may impose.
4.2.21. Annexing Additional Property. The power, but not the duty, to annex,
pursuant to Section 16.2, additional property to the Community encumbered by this Community
Declaration.
4.2.22. Vehicle and Parking Restrictions. The power granted in Section 2.8
to identify Authorized Vehicles or Restricted Vehicles and to modify the vehicle and parking
restrictions in the Governing Documents.
4.2.23, License and Use Agreements. The Community Association may enter
into agreements with Declarant or any homeowners association having jurisdiction over the
Annexable Territory to share facilities located on the Community Common Area with the
Owners of Residences in the Annexable Territory that is not annexed to the Community. Any
such agreement shall be in form and content acceptable to Declarant, the Board of Directors
(without the approval of Owners) and Declarant or the board of directors of any adjacent
homeowners association and shall include provisions regarding use and sharing of maintenance
costs for the shared facilities.
4.2.24. Landscaping. The Board has the power, but not the duty, to grant
Owners revocable licenses that allow Owners to replace and/or add landscaping Improvements to
any portion of the Community Common Area, subject to the prior written approval of the Board,
any reasonable restrictions or conditions the Board may impose, and the right of the Board to
revoke such license, remove the Improvements and charge the Owner for the cost of such
removal.
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4.2.25. Special Events. Subassociations, ACS or other Persons may desire to
sponsor special events and activities in the Community. -The Community Association has the
authority to issue such Persons, their guests, invitees, employees, agents, contractors and
designees, a nonexclusive license of access and use over some or all of the Community Common
Property as reasonably necessary for the operation of the special event or activity. The
Community Association may also issue permits which authorize the sponsor and its guests and
invitees to park vehicles on the streets within the Community at reasonable times before, during
and after the special event or activity. The Community Association may charge fees it
determines are appropriate in connection with allowing groups to use the Community Common
Property.
4.2.26. Control of ACS. The power and duty to (a) assume control of and
accept membership in ACS if and when control and membership are tendered to the Community
Association by the member of ACS and its board of directors, and (b) operate ACS in
accordance with its articles of incorporation and bylaws. This Section may not be amended or
terminated without the Declarant's approval.
4.2.27. Prohibited Functions.
(a) Off -site Nuisances. The Community Association shall not use
any Community Association funds or resources to abate any annoyance or nuisance emanating
from outside the physical boundaries of the Community.
(b) Political Activities. The Community Association shall not
conduct, sponsor, participate in or expend funds or resources toward any activity, campaign or
event, including any social or political campaign, event or activity which does not directly and
exclusively pertain to the authorized activities of the Community Association. Furthermore, the
Community Association shall not participate in federal, state or local activities or activities
intended to influence a governmental action affecting areas outside the Community (e.g.,
endorsement or support of legislative or administrative actions by a local governmental
authority), nor shall it support or campaign for or against candidates for elected or appointed
office or ballot proposals. There shall be no amendment of this Section so long as Declarant
owns any portions of the Community.
4.2.28. Standing to Resolve Disputes. The Community Association shall have
standing to institute, defend, settle or intervene in litigation, alternative dispute resolution or
administrative proceedings (each, an "Action's in its own name as the real party in interest and
without joining the Owners, in matters pertaining to (a) damage to the Community Common
Property, and (b) damage to portions of the Lots which arises out of, or is integrally related to,
damage to the Community Common Property (each, a "Claim'. However, the Community
Association shall not have standing to institute, defend, settle or intervene in any Action in any
matter pertaining only to an individual Lot and not included in clauses (b) and (c) above.
The Community Association may, in its sole discretion, elect to institute,
intervene in, continue, settle or dismiss an Action at any time. If the Community Association
institutes or intervenes in an Action on a Claim, the Community Association's standing shall be
exclusive, and the Owners shall thereafter be barred from instituting a new Action or maintaining
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a pending Action on the same Claim. The Community Association's election to institute or
intervene in an Action on a particular Claim shall not create any affirmative obligation on the
part of the Community Association to maintain, settle or dismiss the Action, except in the
Community Association's sole discretion, and subject to Section 12.4. If the Community
Association elects to settle an Action, the terms of the settlement shall be binding on the Owners,
and the Owners shall be barred from instituting or continuing any other Action on the same
Claim. If the Community Association elects to dismiss an Action, the dismissal shall be with
prejudice to the institution or continuation by one or more Owners of any Action on the same
Claim.
4.3 STANDARD OF CARE, NON -LIABILITY.
4.3.1. Scope of Powers and Standard of Care.
(a) General Scope of Powers. Rights and powers conferred on the
Board, the Design Review Committee or other committees or representatives of the Community
Association by the Governing Documents are not duties, obligations or disabilities charged upon
those Persons unless the rights and powers are explicitly identified as including duties or
obligations in the Governing Documents or law. Unless a duty to act is imposed on the Board,
the Design Review Committee or other committees or representatives of the Community
Association by the Governing Documents or law, the Board, the Design Review Committee and
the committees have the right to decide to act or not act. Any decision not to act is not a waiver
of the right to act in the future.
(b) Business Affairs. This Section 4.3.1(b) applies to Board
member actions in connection with management, personnel, maintenance and operations,
insurance, contracts and finances, and Design Review Committee member actions. Each Board
member shall perform the duties of a Board member in good faith, in a manner the Board
member believes to be in the best interests of the Community Association and with such care,
including reasonable inquiry, as an ordinarily prudent person in a like position would use under
similar circumstances. When performing his duties, a Board member is entitled to rely on
information, opinions, reports or statements, including financial data prepared or presented by:
(i) One (1) or more officers or employees of the Community
Association whom the Board member believes to be reliable and competent in the matters
presented;
(ii) Counsel, independent accountants or other Persons as to
matters which the Board member believes to be within such Person's professional or expert
competence; or
(iii) A committee of the Board upon which the Board member
does not serve, as to matters under its designated authority, which committee the Board member
believes to merit confidence, so long as, in any such case, the Board member acts in good faith,
after reasonable inquiry when the need therefor is indicated by the circumstances and without
knowledge that would cause such reliance to be unwarranted.
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This Section 4.3.1(b) is intended to be a restatement of the business judgment
rule established in applicable law as it applies to the Community Association. All modifications
and interpretations of the business judgment rule applicable to the Community Association shall
be interpreted to modify and interpret this Section 4.3.1(b).
(c) Community Association Governance. This Section 4.3 applies
to Board actions and Design Review Committee decisions in connection with interpretation and
enforcement of the Governing Documents, architectural and landscaping control, regulation of
uses within the Community, rule making and oversight of committees. Actions taken or
decisions made in connection with these matters shall be reasonable, fair and nondiscriminatory.
4.3.2. Non -liability.
(a) General Rule. No Person is liable to any other Person (other
than the Community Association or a parry claiming in the name of the Community Association)
for injuries or damage resulting from such Person's Official Acts, except to the extent that such
injuries or damage result from the Person's willful or malicious misconduct. No Person is liable
to the Community Association (or to any party claiming in the name of the Community
Association) for injuries or damage resulting from such Person's Official Acts, except to the
extent that such injuries or damage result from such Person's negligence or willful or malicious
misconduct. The Community Association is not liable for damage to property in the Community
unless caused by the negligence of the Community Association, the Board, the Community
Association's officers, the Manager or the Manager's staff.
(b) Nonliability of Volunteer Board Members and Officers.
A volunteer Board member or volunteer Community Association officer shall not be personally
liable to any Person who suffers injury, including bodily injury, emotional distress, wrongful
death or property damage or loss as a result of the tortious act or omission of the volunteer
officer or Board member if all applicable conditions specified in Section 1365.7 of the California
Civil Code are met.
4.4 MEMBERSHIP.
4.4.1. Generally. Every Owner shall automatically acquire a Membership in
the Community Association and retain the Membership until such Owner's Lot ownership
ceases, at which time such Owner's Membership shall automatically cease. Ownership of a Lot
is the sole qualification for Membership. Memberships are not assignable except to the Person to
whom title to the Lot is transferred, and every Membership is appurtenant to and may not be
separated from the fee ownership of the Lot. The rights, duties, privileges and obligations of all
Owners are as provided in the Governing Documents.
4.4.2. Transfer. The Membership of any Owner may not be transferred,
pledged or alienated in any way, except on the transfer or encumbrance of such Owner's Lot, and
then only to the transferee or Mortgagee of the Owner's Lot. A prohibited transfer is void and
will not be reflected in the records of the Community Association. Any Owner who has sold his
Lot to a contract purchaser under an agreement to purchase may delegate the Owner's
Membership rights to the contract purchaser. The delegation must be in writing and must be
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delivered to the Community Association before the contract purchaser may vote. The contract
seller shall remain liable for all Assessments attributable to the contract seller's Lot which accrue
before title to the Lot is transferred. If the contract seller fails or refuses to delegate his
Membership rights to the contract purchaser before the Close of Escrow, the Community
Association may record the transfer to the contract purchaser in the Community Association's
records. However, no contract purchaser will be entitled to vote at Community Association
meetings during the term of a purchase contract without satisfactory evidence of the delegation
of the contract seller's Membership rights to the contract purchaser. The Community
Association may levy a reasonable transfer fee against a new Owner and such Owner's Lot
(which fee shall be paid through escrow or added to the Annual Assessment chargeable to such
new Owner) to reimburse the Community Association for the administrative cost of transferring
the Membership to the new Owner on the Community Association's records. Such fee may not
exceed the Community Association's actual cost involved in changing its records. At ACS's
request, the Community Association shall provide ACS with the name, address, telephone
number and e-mail address (if applicable) of each new Owner and the forwarding address of any
former Owner.
4.4.3. Classes of Membership. The Community Association classes of
voting Membership are as follows:
(a) Class A. Class A members are all Owners except Declarant and
the Participating Builders for so long as a Class B Membership exists. Class A members are
entitled to one (1) vote for each Lot owned by such Class A members which is subject to
Assessment. Declarant and the Participating Builders shall become a Class A member on
conversion of the Class B Membership as provided below. The vote for each Lot shall be
exercised in accordance with Section 4.5.1, but no more than one (1) Class A vote may be cast
for any Lot.
(b) Class B. The Class B members are Declarant and the
Participating Builders. Class B members are entitled to three (3) votes for each Lot owned by
Declarant or such Participating Builder subject to Assessment. The Class B Membership shall
convert to Class A Membership upon the earlier to occur of the following events:
(i) The Close of Escrow for the sale of the 17381h Lot in the
overall development composed of the Community and Annexable Territory.
(ii) The fifth (5th) anniversary of the first Close of Escrow in
the Phase for which a Final Subdivision Public Report was most recently issued.
(iii) The twenty-fifth (25th) anniversary of the first Close of
Escrow for the sale of a Lot in the Community.
(c) Class C Board Appointment Right. The Class C Membership is
a Board appointment right, and it shall not be considered a part of the voting power of the
Community Association for any other purposes. The Class C member shall be Declarant. The
Class C Board appointment right entitles Declarant to select a majority of the members of the
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Board of Directors until the Class C Termination Date. The "Class C Termination Date" shall be
the earlier to occur of the following events:
(i) The Close of Escrow for the sale of the 1738th Lot in the
overall development composed of the Community and Annexable Territory.
(ii) The fifth (5th) anniversary of the first Close of Escrow in
the Phase for which a Final Subdivision Public Report was most recently issued.
(ill) The twenty-fifth (25th) anniversary of the first Close of
Escrow for the sale of a Lot in the Community.
(d) Selection of Twenty Percent of the Board. Notwithstanding
expiration of the Board Appointment Right, until the Selection Termination Date. Declarant is
entitled to select twenty percent (20%) of the members of the Board of Directors. The "Selection
Termination Date" shall be the earlier to occur of the following events:
(i) The Close of Escrow for the sale of the 2,086th Lot in the
overall development comprising the Community and Annexable Territory.
(ii) The fifth (51h) anniversary of the first Close of Escrow in
the Phase for which a Final Subdivision Public Report was most recently issued.
(iii) The twenty-fifth (25th) anniversary of the first Close of
Escrow for the sale of a Lot in the Community.
(e) No Ainendment without Declarant Consent. Notwithstanding
anything to the contrary in this Community Declaration, this Section 4.4.3 shall not be amended
without the prior written consent of Declarant until Declarant no longer owns any portion of the
Community or Annexable Territory.
4.5 VOTING RIGHTS. Voting rights attributable to the Lots in a Phase shall be
exercised only after Annual Assessments have commenced in the Phase.
4.5.1. Limits Generally. All voting rights are subject to the Governing
Documents. Except as provided in Sections 4.5.2 and 12.3 of this Community Declaration and
as provided in the Bylaws, as long as there is a Class B Membership, any provision of the
Governing Documents which expressly requires the vote or written consent of a specified
percentage (instead of a majority of a quorum) of the Community Association's voting power
before action may be undertaken shall require the approval of such specified percentage of the
voting power of both the Class A and the Class B Memberships. Except as provided in
Section 12.3 of this Community Declaration and as provided in the Bylaws, on termination of the
Class B Membership, any provision of the Governing Documents which expressly requires the
vote or written consent of Owners representing a specified percentage (instead of a majority of a
quorum) of the Community Association's voting power before action may be undertaken shall
then require the vote or written consent of Owners representing such specified percentage of both
(a) the Community Association's total Class A voting power, and (b) the Community
Association's Class A voting power represented by Owners other than Declarant. All provisions
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of this Community Declaration requiring the vote or approval of a specified percentage of
Owners regarding a Special Benefit Area charge shall only require the vote or approval of the
requisite -percentage of Owners of Lots actually located in the Special Benefit Area.
4.5.2. Vote to Initiate Right to Repair Law Claim. Commencing on the
date of the first annual meeting of Owners, Declarant relinquishes control over the Community
Association's ability to decide whether to initiate a Right to Repair Law Claim. This means that
Declarant, current employees and agents of Declarant, Board members who are appointed by
Declarant, Board members elected by a majority of votes cast by Declarant, and all other Persons
whose vote or written consent is inconsistent with the intent of the preceding sentence, are
prohibited from participating and voting in any decision of the Community Association or
Owners to initiate a Right to Repair Law Claim. The Community Association must obtain the
vote or written consent of a simple majority of the Community Association's voting power,
excluding votes attributable to Declarant and Participating Builders, in order to initiate a Right to
Repair Law Claim.
4.5.3. Joint Ownership. When more than one (1) Person holds an interest in
any Lot ("co -owners"), each co-owner may attend any Community Association meeting, but
only one (1) co-owner shall be entitled to exercise the single vote to which the Lot is entitled.
Co -owners owning the majority interests in a Lot may designate in writing one (1) of their
number to vote. Fractional votes shall not be allowed and the vote for each Lot shall be
exercised, if at all, as a unit. Where no voting co-owner is designated or if the designation is
revoked, the vote for the Lot shall be exercised as the co -owners owning the majority interests in
the Lot agree. Unless the Community Association receives a written objection in advance from a
co-owner, it shall be conclusively presumed that the voting co-owner is acting with his co -
owners' consent. No vote may be cast for any Lot if the co -owners present in person or by proxy
owning the majority interests in such Lot fail to agree to the vote or other action. The nonvoting
co-owner or co -owners are jointly and severally responsible for all obligations imposed on the
jointly -owned Lot and are entitled to all other benefits of ownership. All agreements and
determinations lawfully made by the Community Association in accordance with the voting
percentages established in the Governing Documents are binding on all Owners and their
successors in interest.
ARTICLE V
DESIGN REVIEW COMMITTEE
5.1 MEMBERS OF COMMITTEE. The initial Design Review Committee shall be
composed of three (3) members. The initial members of the Design Review Committee shall be
representatives of Declarant until one (1) year after the original issuance of the Final Subdivision
Public Report for the first DRE Phase in the Community. Thereafter, the Committee will be
expanded to five members, two of which shall be Owners who are appointed by the Board.
Declarant may, but is not obligated to, appoint and remove a majority of the members of the
Design Review Committee and fill any vacancy of such majority, until the earlier to occur of
(a) Close of Escrow for the sale of ninety percent (90%) of all the Lots in the Community and the
Annexable Territory, or (b) the fifth (5th) anniversary of the first Close of Escrow in the Phase
for which a Final Subdivision Public Report was most recently issued, after which the Board
may appoint and remove all members of the Design Review Committee. Design Review
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Committee members appointed by the Board must be Owners, but Design Review Committee
members appointed by Declarant need not be Owners. Directors may serve as Design Review
Committee members.
5.2 POWERS AND DUTIES.
5.2.1. General Powers and Duties. The Design Review Committee shall
consider and act upon all plans and specifications submitted for its approval, including inspection
of work in progress to assure conformity with plans approved by the Design Review Committee,
and shall perform such other duties as the Board assigns to it.
5.2.2. Issuance of Standards. The Design Review Committee shall issue and
regularly update its Design Guidelines and provide notice of any requirements for Committee
approval of proposed Improvements. The notice shall describe the types of proposed
Improvements that require Committee approval, and it shall include a copy of the procedure used
to review and approve or disapprove such proposed Improvements. The Design Guidelines may
require a fee to accompany each application for approval, and may identify additional factors
which the Design Review Committee will consider in reviewing submissions. The Design
Review Committee may provide that fees it imposes be uniform, or that fees be determined in
any other reasonable manner. The Design Review Committee may require such detail in plans
and specifications submitted for its review as it deems proper, including landscape plans, floor
plans, site plans, drainage plans, elevation drawings and descriptions or samples of exterior
materials and colors.
5.2.3. Retaining Consultants. The Design Review Committee has the power,
but not the duty, to retain licensed architects, contractors and other professionals to advise its
members in connection with decisions.
5.3 REVIEW OF PLANS AND SPECIFICATIONS.
5.3.1. Improvements Requiring Approval. No construction, reconstruction,
installation, removal or alteration of any outdoor Improvement on a Lot, including landscaping,
grading, excavation, filling or other alteration to the grade or level of the land, may be
commenced by any Owner without prior Design Review Committee approval. However, a
Residence may be repainted or refinished without prior Design Review Committee approval so
long as the Residence is repainted or refinished with materials that are identical to the materials
originally used by Declarant or Participating Builder or last applied to the Improvement with
Committee approval (as applicable). The provisions of this Article apply to construction,
installation and alteration of solar energy systems, as defined in Section 801.5 of the California
Civil Code, subject to the provisions of California Civil Code Sections 714 and 714.1, the
applicable Building Code, zoning regulations, and other laws.
5.3.2. Application Procedure. Owners who seek Committee approval shall
submit plans and specifications showing the dimensions, exterior elevation, color, materials used
and location of the proposed Improvements, along with a review fee in an amount set in writing
from time to time by the Committee, along with all other review materials required under this
Article (collectively, an "Application"). Until changed by the Board, the address for the
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submission of the Application is the Community Association's principal office. The form of
Application used by the Design Review Committee may include spaces allowing "Adjacent
Owners" to sign or initial the Application confirming that they have been notified of the
application. The Design Review Committee may establish a defmition of "Adjacent Owners" in
its Design Guidelines. Applications will be complete and may be approved or disapproved by
the Design Review Committee even if all of the Adjacent Owners do not initial the Applications
so long as the Owner submitting plans and specifications ("Applicant") certifies that the
Applicant has asked the Adjacent Owners to sign the Applications. The requirement that the
Applicant attempt to obtain the signatures of Adjacent Owners is intended only to provide notice
of the pending application to the Adjacent Owners. It does not create in the Adjacent Owners
any power to approve or disapprove the Application by signing or withholding a signature. Only
the Committee may approve or disapprove an Application.
The Design Review Committee shall deliver its written approval, disapproval, or
request for additional information or materials to the Applicant at the address listed in the
Application no later than the date that is forty-five (45) calendar days after the date on which the
Design Review Committee has received the complete Application ("Review Deadline"). If, on
the Review Deadline, the Committee has failed to deliver to the Applicant its written approval,
disapproval, or request for additional information or materials, then the Application shall be
deemed approved and the Manager or a representative of the Board or Committee shall at the
written request of the Applicant execute a written approval therefor within fifteen (15) days after
receipt of the written request. A decision on a proposed Improvement shall be consistent with
California law, made in good faith and may not be unreasonable, arbitrary or capricious. If
disapproved, the written decision shall include both an explanation of why the proposed
Improvement is disapproved and a description of the procedure for reconsideration by the Board
of Directors.
5.3.3. Standard for Approval. The Design Review Committee shall approve
an Application only if it determines that (a) installation, construction or alterations of the
Improvements in the locations proposed will not be detrimental to the appearance of the
Community as a whole, (b) the appearance of the proposed Improvements will be in harmony
with the existing Improvements and the overall design theme in the Community, (c) installation,
construction or alteration of the proposed Improvements will not detract from the beauty,
wholesomeness and attractiveness of the Community or the enjoyment of the Community by the
Owners, (d) maintenance of the proposed Improvements will not become a burden on the
Community Association, and (e) the proposed Improvements are consistent with the Governing
Documents. The Committee's decision on any proposed change may not violate any governing
provision of law, including the Fair Employment and Housing Act, or a building code or other
applicable law governing land use or public safety. The Design Review Committee may
consider the impact of views from other Lots, reasonable privacy right claims, passage of light
and air, beneficial shading and other aesthetic factors in reviewing, approving or disapproving
any Application. However, no views in the Community are protected. No Lot is guaranteed the
existence or unobstructed continuation of any particular view.
5.3.4. Conditions of Approval. The Design Review Committee may
condition its approval of an Application for any Improvement on any one (1) or more of the
following: (a) the Applicant's agreement to furnish the Community Association with security
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acceptable to the Community Association against any mechanic's lien or other encumbrance
which may be Recorded against the Community Common Property or another Owner's Lot as a
result of such work; (b) such changes to the Application as the Design Review Committee
considers appropriate; (c) the Applicant's agreement to grant to the Community Association or
other Owners such easements as are made reasonably necessary by the existence of the
Improvement; (d) the Applicant's agreement to install water, gas, electrical or other utility
meters to measure any increased utility consumption; (e) the Applicant's agreement to reimburse
the Community Association for the cost of maintaining the Improvement (should the Community
Association agree to accept maintenance responsibility for the Improvement as built); or (f) the
Applicant's agreement to complete the proposed work within a stated period of time. The
Committee may also require the Applicant, prior to commencing work, to deposit with the
Community Association adequate funds to repair or restore any Community Common Property
that may be damaged by the Applicant or the Applicant's contractors. The Design Review
Committee will determine the actual amount of the deposit in each case, but the amount shall be
at least enough to cover the cost of repairing or restoring damage that is reasonably foreseeable
to the Design Review Committee. The deposit shall be refundable to the extent the Design
Review Committee finds that the work of Improvement is complete, and that the Community
Common Property was not damaged or was restored at least to the condition it was in prior to the
commencement of work. The Design Review Committee may also require submission of
additional plans and specifications or other information before approving or disapproving
material submitted. The Applicant shall meet any review or permit requirements of the City
before making any construction, installation or alterations permitted under this Community
Declaration.
5.3.5. Governmental Approvals. The Applicant shall meet the requirements
of all applicable ordinances, codes and regulations of the City, including zoning laws, building
and safety codes, fire codes and applicable inspection and permit requirements before making
any construction, installation or alterations permitted under this Community Declaration. All
approvals issued by the Committee are in addition to, and not in lieu of, applicable governmental
approvals, which the Applicant must also obtain at his sole cost, prior to or concurrently with
Committee approvals, and before commencing any work. Furthermore, governmental approvals
are in addition to, and not in lieu of, Committee approvals required under the Governing
Documents. No determination by any governmental agency that the Applicant has met
applicable governmental requirements for a particular Improvement shall relieve the Applicant
of its obligation to obtain all required Committee approvals.
5.3.6. Matters Outside Scope of Approval. The Design Review
Committee's approval or disapproval of each Application shall be based solely on the aesthetic
considerations listed in this Article including the standards in Section 5.3.3, subject to the
Applicant's full compliance with the applicable conditions of Section 5.3.4. Approval of any
Application does not constitute a fmding or a warranty by the Design Review Committee that the
work of Improvement described in the Application (a) incorporates good engineering practices,
(b) complies with applicable law, ordinance, code, or regulation; including zoning laws, building
and safety codes or fire codes, (c) complies with the requirements of any utility providers, or
(d) is permissible under the terms of any easement, license, permit, Mortgage, or other recorded
or unrecorded instrument (other than the Governing Documents) that affects the land. Nothing
in this Community Declaration shall be construed to require Design Review Committee approval
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of any construction, reconstruction, installation, removal or alteration of an Improvement by
Declarant, Participating Builders, or the Community Association.
5.3.7. Exculpation of Committee. By submitting an Application, each
Applicant is deemed to agree that neither the Design Review Committee, nor the members
thereof, nor Declarant, nor their respective agents, employees, attorneys or consultants shall be
liable to any Person for:
(a) Any matter outside the Committee's scope of approval as
discussed in Section 5.3.4 above;
(b) Any defect in any Improvement constructed by or on behalf of
the Applicant pursuant to an approved Application;
(c) Any loss, damage, or injury to Persons or property arising out of
or in any way connected with work performed by or on behalf of the Applicant pursuant to an
approved Application; or
(d) Any loss, damage, or injury to Persons or property arising out of
or in any way connected with the performance of the Design Review Committee's duties
hereunder, unless due to willful misconduct or gross negligence.
5.4 MEETINGS AND ACTIONS OF THE DESIGN REVIEW COMMITTEE.
The Design Review Committee shall meet as necessary to perform its duties. The Design
Review Committee may, by resolution unanimously adopted in writing, designate an Owner or a
Declarant representative to serve as a Design Review Committee Representative to take any
action or perform any duties for and on behalf of the Design Review Committee except the
granting of variances. The Design Review Committee Representative need not be a current
member of the Design Review Committee. In the absence of such designation, the vote or
written consent of a majority of the Design Review Committee constitutes an act of the Design
Review Committee. All approvals issued by the Design Review Committee must be in writing.
Verbal approvals issued by the Design Review Committee, any individual Design Review
Committee member or any other representative of the Community Association are not valid, are
not binding on the Community Association and may not be relied on by any Person. If within
six (6) months of issuance of the approval, an Owner either does not commence work pursuant to
approved plans or obtain an extension of time to commence work, the approval shall be
automatically revoked and a new approval must be obtained before work can be commenced.
5.5 NO WAIVER OF FUTURE APPROVALS. The Design Review Committee's
approval of any proposals, plans and specifications or drawings for any work done or proposed
in connection with any matter requiring the Design Review Committee's approval does not
waive the right to withhold approval of any similar proposals, plans and specifications, drawings
or matters subsequently or additionally submitted for approval.
5.6 COMPENSATION OF MEMBERS. The Design Review Committee's
members shall receive no compensation for services rendered, other than reimbursement for
expenses incurred by them in performing their duties.
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5.7 INSPECTION OF WORK. The Design Review Committee or its duly
authorized representative may inspect any work for which approval of plans is required under
this Article ("Work'. The right to inspect includes the right to require any Owner to take such
action as may be necessary to remedy (including removal of) any noncompliance with the
Design Review Committee -approved plans for the Work or with the requirements of this
Community Declaration ("Noncompliance's.
5.7.1. Time Limit for Inspections. When the Work is complete, the
Applicant shall immediately provide the Committee with written notice of completion on the
form prescribed by the Committee. The Design Review Committee's right to inspect the Work
and notify the responsible Owner of any Noncompliance shall terminate on the date that is sixty
(60) calendar days after the date on which the Committee has received the written notice from
the Applicant on a form provided by the Committee that the Work is complete. If the Design
Review Committee fails to send a written notice of Noncompliance to an Applicant before this
time limit expires, the Work shall be deemed to comply with the approved Application.
5.7.2. Noncompliance. If an Improvement that requires the prior approval of
the Design Review Committee is (a) commenced or completed without prior written approval by
the Committee, or (b) an Improvement is not completed within the time limit established by the
Committee in its approval, or (c) an Improvement is not completed in substantial conformity
with the approved Application, or (d) if no time limit is established by the Committee, the
Applicant fails to complete the Work within one (1) year of the date on which the Application
was approved, then a Noncompliance is deemed to exist, and the Committee has the right, but
not the obligation, to deliver a written notice of Noncompliance to the violating Owner, and the
Community Association may, but is not required to, pursue the remedies set forth in this Section.
5.7.3. Remedy for Noncompliance. The Committee shall notify the Board in
writing when an Owner fails to remedy any Noncompliance within sixty (60) days after the date
of the notice of Noncompliance. After Notice and Hearing, the Board shall determine whether
there is Noncompliance and, if so, the nature thereof and the estimated cost of correcting or
removing the same. If a Noncompliance exists, the Owner shall remedy or remove the same
within a period of not more than forty-five (45) days after the date that notice of the Board ruling
is given to the Owner. If the Owner does not comply with the Board ruling within that period,
the Community Association may record a Notice of Noncompliance against the Lot (if allowed
by law), correct the Noncompliance and charge the Owner for the Community Association's
costs, or commence an action for damages or injunctive relief, as appropriate.
5.8 VARIANCES. The Design Review Committee may authorize variances from
compliance with any of the architectural provisions of this Community Declaration or the Design
Guidelines including restrictions on height, size, floor area or placement of structures, or similar
restrictions, when circumstances such as topography, natural obstructions, hardship, aesthetic or
environmental consideration require. Variances must be evidenced in writing, must be signed by
a majority of the Design Review Committee, and become effective on Recordation. After
Declarant's right to appoint a majority of the Design Review Committee's members expires, the
Board must approve any variance recommended by the Design Review Committee before any
such variance becomes effective. If variances are granted, no violation of the covenants,
conditions and restrictions in this Community Declaration shall be deemed to have occurred with
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respect to the matter for which the variances were granted. The granting of a variance does not
waive any of the provisions of this Community Declaration for any purpose except as to the
particular property and particular provision of this Community Declaration covered by the
variance, nor does it affect the Owner's obligation to comply with all laws affecting the use of
his Lot. The Committee's written variance shall be Recorded against the Applicant's Lot in the
Official Records. The cost of Recording the variance shall be borne solely by the Applicant. No
variance shall conflict with local ordinances or any specific plan for the Community without the
prior written approval of the City.
5.9 PRE -APPROVALS. The Design Review Committee may authorize pre -
approval of specified types of construction activities if, in the exercise of the Design Review
Committee's judgment, a pre -approval is appropriate to carry out the purposes of the Governing
Documents.
5.10 APPEALS. If a proposed Improvement is disapproved, the Applicant is entitled
to reconsideration by the Board of Directors at an open meeting that satisfies the requirements of
Civil Code Section 1363.05, or in executive meeting if the Applicant so requests in writing. This
Section does not require reconsideration of a decision that is made by the Board, or by the
Design Review Committee if the Committee has the same membership as the Board.
ARTICLE VI
PROPERTY EASEMENTS AND RIGHTS
6.1 EASEMENTS.
6.1.1. Maintenance and Repair. Declarant reserves for the benefit of the
Community Association and all Community Association agents, officers and employees,
nonexclusive easements over the Community as necessary to fulfill the obligations and perform
the duties of the Community Association.
6.1.2. Utility Easements. Declarant reserves easements to install and
maintain utilities over the Community Common Property for the benefit of the Owners and their
Lots. Declarant reserves the right to grant additional easements and rights -of -way throughout the
Community to utility companies and public agencies as it deems necessary for the proper
development and disposal of the Community. Such right of Declarant shall expire on the Close
of Escrow for the sale of the last Lot in the Community and the Annexable Territory.
6.1.3. Encroachments. Declarant reserves, for its benefit, for the benefit of
Participating Builders and for the benefit of all Owners and their Lots, a reciprocal easement
appurtenant to each Lot over the other Lots and the Community Common Property to
accommodate (a) any existing encroachment of any wall or any other Improvement installed by
Declarant or approved by the Design Review Committee, and (b) shifting, movement or natural
settling of the Residences or other Improvements. Use of the easements may not unreasonably
interfere with each Owner's use and enjoyment of the burdened Lots.
6.1.4. Easements for Public Service Use. Declarant reserves easements over
the Community for public services of the local government agencies, including but not limited
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to, the right of law enforcement and fire protection personnel to enter upon the Community to
carry out their official duties.
6.1.5. Easements for Water and Utility Purposes. Declarant reserves
easements over the Community for public and private utility purposes, including but not limited
to, the right of any public utility or mutual water district of ingress and egress over the
Community to read and maintain meters, and use and maintain fire hydrants.
6.1.6. Completion of Improvements. Declarant reserves the right and
easement to enter the Community to complete any Improvement which Declarant considers
desirable to implement Declarant's development plan.
6.1.7. Owners' Easements in Community Common Property. Declarant
reserves, for the benefit of every Owner, and each Owner's Family, tenants and invitees,
nonexclusive easements for pedestrian and vehicular access (all as applicable) over the
Community Common Property as reasonably necessary for the use and enjoyment of each Lot in
the Community. This easement is appurtenant to and passes with title to every Lot in the
Community.
6.1.8. Easements for Maintenance of Community Association
Maintenance Areas. Declarant reserves, for the benefit of the Community Association,
nonexclusive easements over the property on which Community Association Maintenance Areas
are located, for maintenance of the Community Association Maintenance Areas and for access,
ingress and egress necessary to perform such maintenance. No Owner may interfere with the
Community Association's exercise of its rights under the easement reserved in this Section.
Declarant shall have the right to grant these easements to the Community Association before and
after the conveyance of any Lot to an Owner.
6.1.9. Easement for Declarant and Participating Builders Over
Community Common Property. Declarant hereby expressly reserves for the benefit of
Declarant and all Participating Builders, for the benefit of their respective agents, subcontractors,
invitees, employees and contractors, and for the benefit of their respective successors and
assigns, a nonexclusive easement appurtenant to the Annexable Territory, in, to, and over the
Community Common Property for access, ingress, egress, use and enjoyment, in order to show
the Community or Annexable Territory to Participating Builders and other prospective
purchasers, or to develop, construct, market, sell, lease or otherwise dispose of the Community
or the Annexable Territory. Such easement shall continue until the last Close of Escrow in the
Community and the Annexable Territory has occurred; provided, however, that such use shall
not unreasonably interfere with the rights of enjoyment of the other Owners as provided herein.
6.1.10. Telecommunications Easement. Declarant reserves blanket easements
(collectively, "Telecommunications Easements' over the Community for access and for
purposes of constructing, installing, locating, altering, operating, maintaining, inspecting,
upgrading, removing and enhancing Telecommunications Facilities for the delivery of
Telecommunications Services (collectively, "Telecommunications Purposes' for the benefit of
Declarant. Such easements are freely transferable by Declarant to any other Person and their
successors and assigns. No one, except for Declarant and Declarant's transferees, may use the
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Community for Telecommunications Purposes. All Telecommunications Facilities shall be
owned, leased or licensed by Declarant, as determined by Declarant, in its sole discretion and
business- judgment. Transfer of the Community does not imply transfer of any
Telecommunications Easements or Telecommunications Facilities. The holders of the
Telecommunications Easements may not exercise the rights reserved hereunder in any manner
which will unreasonably interfere with the reasonable use and enjoyment of the Community by
any Owner. If the exercise of any Telecommunications Easement results in damage to the
Community, then the easement holder who caused the damage shall, within a reasonable period
of time, repair such damage. If Declarant has not conveyed the Telecommunications Easements
in a Phase to another Person before the last Close of Escrow in the Community and the
Annexable Territory, then Declarant grants the Telecommunications Easements to the
Community Association effective as of the last Close of Escrow in the Community and the
Annexable Territory.
6.1.11. Drainage Easements. Declarant reserves, for the benefit of the
Community, the Owners, the Participating Builders and the Community Association, reciprocal
nonexclusive easements for drainage of water over, across and on the Community.
6.2 RIGHT TO GRANT EASEMENTS. Declarant reserves easements over the
Community Common Area owned in fee simple by the Community Association for the exclusive
use by an Owner or Owners of contiguous property as a yard, recreational, gardening, and
landscaping area. Any such easement may be conveyed by the Declarant before the last Close of
Escrow for sale of a Lot in the Community and the Annexable Territory. Such conveyance must
be approved by the Board, which approval must not be unreasonably withheld. The purpose of
the easement, the portion of the Community Common Area affected, the Lot to which the
easement is appurtenant, and any restrictions on use of the easement area shall be identified in a
Recorded grant of easement.
6.3 DELEGATION OF USE. Any Owner may delegate in writing his right to use
the Community Common Property to his tenants, contract purchasers or subtenants who reside in
such Owner's Residence, subject to regulation by the Board. An Owner who has delegated his
rights may not use the recreational facilities on the Community Common Property so long as
such delegation remains in effect. On receipt of notice from ACS that an Owner owes an amount
to ACS, the Community Association may bar the Owner or anyone claiming a right through that
Owner from using Community Common Property facilities until the amount is paid.
6.4 RIGHT OF ENTRY.
6.4.1. Community Association. The Community Association has the right to
enter the Lots to inspect the Community, and may take whatever corrective action it determines
to be necessary or proper. Entry onto any Lot under this Subsection may be made after at least
three (3) days' advance written notice to the Owner of the Lot except for emergency situations,
which shall not require notice. Nothing in this Subsection limits the right of an Owner to
exclusive occupancy and control over the portion of his Lot that is not Community Common
Property. Any damage to a Residence or Lot caused by entry under this Subsection shall be
repaired by the Community Association.
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6.4.2. Declarant and Participating Builders. The Declarant and
Participating Builders have the right to enter the Lots and the Community Common Property
(a) to comply with requirements for the recordation of subdivision maps or lot line adjustments
in the Community or Annexable Territory, (b) for repair of Improvements in accordance with the
provisions of the Right to Repair Law, (c) to accommodate grading or construction activities, and
(d) to comply with requirements of applicable governmental agencies. Declarant or Participating
Builder, as applicable, shall provide the applicable Owner reasonable notice before such entry,
except for emergency situations, which shall not require notice. Any damage that is caused by
entry under this Subsection shall be repaired by the Declarant or Participating Builder, as
applicable. Unless otherwise specified in the initial grant deed of the subject Lot or Community
Common Property from the Declarant or Participating Builder, as applicable, this right of entry
shall automatically expire on the date that is ten (10) years from the last Close of Escrow in the
Community.
6.4.3. Owners. Each Owner shall permit other Owners, and their
representatives, to enter his Lot to perform installations, alterations or repairs to the mechanical
or utility services to a Lot if (a) requests for entry are made in advance, (b) entry is made at a
time reasonably convenient to the Owner whose Lot is to be entered; and (c) the entered Lot is
left in substantially the same condition as existed immediately preceding such entry. Any
damage to the Lot caused by entry under this Subsection shall be repaired by the entering Owner.
ARTICLE VII
COMMUNITY ASSOCIATION ACCOUNTS AND ASSESSMENTS
7.1 PERSONAL OBLIGATION TO PAY ASSESSMENTS. Each Owner shall
pay to the Community Association all Assessments established and collected pursuant to this
Community Declaration. The Community Association shall not levy or collect any Assessment
that exceeds the amount necessary for the purpose for which it is levied. All Assessments,
together with late payment penalties, interest, costs, and reasonable attorney fees for the
collection thereof, are a charge and a continuing lien on the Lot against which such Assessment
is made. Each Assessment, together with late payment penalties, interest, costs and reasonable
attorney fees, is also the personal obligation of the Person who was the Owner of the Lot when
the Assessment accrued. The personal obligation for delinquent Assessments may not pass to
any new Owner unless expressly assumed by the new Owner or unless the new Owner has actual
or constructive knowledge of such delinquent Assessments, whether by virtue of the Recordation
of a Notice of Delinquent Assessment or receipt from the Community Association of a certificate
pursuant to Section 1368(a)(4) of the California Civil Code.
7.2 COMMUNITY ASSOCIATION ACCOUNTS. The Community Association
shall establish no fewer than two (2) separate Community Association Accounts into which shall
be deposited all money paid to the Community Association and from which disbursements shall
be made, as provided in this Community Declaration. The Community Association Accounts
may be established as trust accounts at a banking or savings institution and shall include: (a) an
Operating Account for current Common Expenses, (b) an adequate Reserve Account for the
portion of Common Expenses allocated to (i) reserves for Improvements which the Board does
not expect to repair or replace on an annual or more frequent basis, and (ii) payment of
deductible amounts for insurance policies which the Community Association obtains, and (c) any
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other accounts which the Community Association may establish including Special Benefit Area
Operating Account and Special Benefit Area Reserve Account.
7.3 PURPOSE OF ASSESSMENTS. The Assessments shall be used exclusively to
(a) promote the Owners' recreation and welfare, (b) operate, improve and maintain the
Community Common Property, and (c) discharge any other Community Association obligations
under this Community Declaration. All amounts deposited into the Community Association
Accounts must be used solely for the common benefit of all Owners for purposes authorized by
this Community Declaration. Disbursements from the Operating Account generally shall be
made by the Community Association to discharge Community Association responsibilities which
cannot be discharged by disbursements from the Reserve Account. However, if the Board
determines that the Operating Account contains excess funds, the Board may transfer the excess
funds to any other Community Association Account. Disbursements from the Reserve Account
shall be made by the Community Association only for the purposes specified in this Article and
in Section 1365.5(c) of the California Civil Code.
7.4 WAIVER OF USE. No Owner may exempt himself from personal liability for
Assessments duly levied by the Community Association, nor release such Owner's Lot from the
liens and charges thereof, by waiving use and enjoyment of the Community Common Property
or by abandoning such Owner's Lot.
7.5 LIMITS ON ANNUAL ASSESSMENT INCREASES. The following shall
apply to the general component of Annual Assessments, as well as to any Special Benefit Area
charge that may be established from time to time by Declarant or the Community Association,
provided that where a proposed increase is intended only for a particular special benefit area
component of Annual Assessments, then only the Lots in the applicable Special Benefit Area
shall participate in the election processes specified below.
7.5.1. Maximum Authorized Annual Assessment For Initial Year of
Operations. During the Fiscal Year in which Annual Assessments commence, the Board may
levy an Annual Assessment per Lot in an amount which exceeds one hundred twenty percent
(120%) of the amount of Annual Assessments disclosed for the Community in the most current
Budget filed with and reviewed by the DRE only if the Board first obtains the approval of
Owners casting a majority of votes at a meeting or election of the Community Association in
which more than fifty percent (50%) of the Lots are represented ("Increase Election'. This
Section does not limit Annual Assessment increases necessary for addressing an "Emergency
Situation" as defined in Section 7.5.5.
7.5.2. Maximum Authorized Annual Assessment For Subsequent Fiscal
Years. During the Fiscal Years following the Fiscal Year in which Annual Assessments
commence, the Board may levy Annual Assessments which exceed the Annual Assessments for
the immediately preceding Fiscal Year only as follows:
(a) If the increase in Annual Assessments is less than or equal to
twenty percent (20%) of the Annual Assessments for the immediately preceding Fiscal Year,
then the Board must either (i) have distributed the Budget for the current Fiscal Year in
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accordance with Section 1365(a) of the California Civil Code, or (ii) obtain the approval of
Owners casting a majority of votes in an Increase Election; or
(b) If the increase in Annual Assessments is greater than twenty
percent (20%) of the Annual Assessments for the immediately preceding Fiscal Year, then the
Board must obtain the approval of Owners casting a majority of votes in an Increase Election.
This Section does not limit Annual Assessment increases necessary for addressing an
"Emergency Situation" as defined in Section 7.5.5.
7.5.3. Supplemental Annual Assessments. If the Board determines that the
Community Association's essential functions may be properly funded by an Annual Assessment
in an amount less than the maximum authorized Annual Assessment described above, it may
levy such lesser Annual Assessment. If the Board determines that the estimate of total charges
for the current year is or will become inadequate to meet all Common Expenses, it shall
immediately determine the approximate amount of the inadequacy. Subject to the limits
described in Sections 7.5.1, 7.5.2 and 7.5.5, the Board may levy a supplemental Annual
Assessment reflecting a revision of the total charges to be assessed against each Lot.
7.5.4. Automatic Assessment Increases. Despite any other provisions of this
Section 7.5, on the annexation of each portion of the Annexable Territory pursuant to Article
XVI, the Annual Assessment shall be automatically adjusted by the additional amount, if any,
necessary to maintain the Community Common Property identified in the applicable Notice of
Addition or Supplemental Community Declaration as a part of the Phase, as long as (a) the
annexation is permitted under the Governing Documents and development plan, and (b) the
amount of such increase does not result in the levy of an Annual Assessment which is greater
than the maximum potential Annual Assessment disclosed in all Final Subdivision Public
Reports for the Community.
7.5.5. Emergency Situations. For purposes of Sections 7.5.1 and 7.5.2, an
"Emergency Situation" is any one of the following:
(a) An extraordinary expense required by an order of a court;
(b) An extraordinary expense necessary to maintain the portion of
the Community for which the Community Association is responsible where a threat to personal
safety on the Community is discovered; and
(c) An extraordinary expense necessary to maintain the portion of
the Community for which the Community Association is responsible that could not have been
reasonably foreseen by the Board when preparing the Budget. Before imposing or collecting an
Assessment pursuant to this subsection (c), the Board shall adopt a resolution containing written
fmdings regarding the necessity of the extraordinary expense involved and why the expense was
not or could not have been reasonably foreseen in the budgeting process. The resolution shall be
distributed to the Owners with the notice of the assessment.
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7.6 ANNUAL ASSESSMENTS.
7.6.1. Commencement of Annual Assessments. Except as provided below,
Annual Assessments shall commence on all Lots in a Phase on the first day of the first calendar
month following the first Close of Escrow in such Phase.
7.6.2. Delayed Commencement in Model Phases without Production Lots.
Notwithstanding Section 7.6.1 above, in a Model Phase with no Production Lots, the Close of
Escrow for a Model Lot Sale shall not automatically cause the commencement of Annual
Assessments in the Model Phase, nor the conveyance of Community Common Property in the
Model Phase to the Community Association, nor shall the Community Association have any
obligation to maintain any Community Common Property in the Model Phase. Until the
Community Association is responsible for maintenance of the Community Common Property in
such Model Phase (in accordance with this Section 7.6), the maintenance and the costs thereof
shall be the responsibility of the Declarant or the applicable Participating Builder. Upon
turnover of ownership and maintenance of the Community Common Property to the Community
Association, the Declarant or applicable Participating Builder shall also contribute to the
Community Association's Reserve Fund such reserves as have accrued on the Community
Common Property in the Model Phase (as evidenced in the current Budget of the Community
Association) from the date of completion of such Community Common Property through the
date of its turnover (as evidenced by Recordation of a deed in Official Records) to the
Community Association. Declarant or the applicable Participating Builder shall enter into such
maintenance agreements and post such security as is acceptable to DRE to ensure the
maintenance and turnover of the Community Common Property and the reserves to the
Community Association. On the first Close of Escrow for a Model Lot Sale, the following
provisions shall apply:
(a) Annual Assessments shall commence in the Model Phase on the
first day of the first calendar month following the earliest date on which a Model Leaseback
Agreement in the Model Phase is no longer in effect; and
(b) The Community Common Property in the Model Phase shall be
conveyed to the Community Association no later than the date on which Annual Assessments
commence in the Model Phase.
7.6.3. Delayed Commencement in Model Phases with Production Lots.
Notwithstanding Section 7.6.1 above, in a Model Phase that includes Production Lots, the Close
of Escrow for sale of one or more Model Lots in such Model Phase shall not automatically cause
the commencement of Annual Assessments in the Model Phase, nor the conveyance of
Community Common Property in the Model Phase to the Community Association, nor shall the
Community Association have any obligation to maintain any Community Common Property in
the Model Phase. Until the Community Association is responsible for maintenance of the
Community Common Property in such Model Phase (in accordance with this Section 7.6), the
maintenance and the costs thereof shall be the responsibility of the Declarant or the applicable
Participating Builder. Upon turnover of ownership and maintenance of the Community
Common Property to the Community Association, the Declarant or applicable Participating
Builder shall also contribute to the Community Association's Reserve Fund such reserves as
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have accrued on the Community Common Property in the Model Phase (as evidenced in the
current Budget of the Community Association) from the date of completion of such Community
Common Property through the date of its turnover (as evidenced by Recordation of a deed in
Official Records) to the Community Association. Declarant or the applicable Participating
Builder shall enter into such maintenance agreements and post such security as is acceptable to
DRE to ensure the maintenance and turnover of the Community Common Property and the
reserves to the Community Association. If the first Close of Escrow in such Model Phase is for a
Model Lot Sale, then the following provisions shall apply:
(a) Annual Assessments shall commence in the Model Phase on the
first day of the first calendar month following the earlier to occur of (i) the date of the first Close
of Escrow for sale of a Production Lot in the Model Phase, or (11) the earliest date on which any
Model Leaseback Agreement in the Model Phase is no longer in effect; and
(b) The Community Common Property in the Model Phase shall be
conveyed to the Community Association no later than the earlier to occur of (i) the date of the
first Close of Escrow for sale of a Production Lot in the Model Phase, or (ii) the date on which
Annual Assessments commence in the Model Phase.
7.6.4. Assessment and Proration. Annual Assessments for fractions of a
month shall be prorated. Declarant shall pay its full pro rata share of the Annual Assessments on
all unsold Lots for which Annual Assessments have commenced. The Board shall fix the
amount of the Annual Assessment against each Lot at least thirty (30) days in advance of each
Annual Assessment period. However, unless otherwise established by the Board, the initial
Annual Assessments shall be assessed in accordance with the most recent Budget on file with
and reviewed by the DRE. Written notice of any change in the amount of any Annual
Assessment, Capital Improvement Assessment or Reconstruction Assessment shall be sent via
first-class mail to every Owner subject thereto not less than thirty (30) nor more than sixty (60)
days before the increased Assessment becomes due.
7.6.5. Apportionment of Annual Assessments. All Annual Assessments
shall be assessed uniformly and equally against the Owners and their Lots based on the number
of Lots owned by each Owner, except as may be otherwise provided in a Supplemental
Community Declaration, except that the Special Benefit Area Assessment charge shall be
assessed equally only against Owners responsible for such Special Benefit Area. The Board may
determine that funds in the Operating Account at the end of the Fiscal Year be retained and used
to reduce the following Fiscal Year's Annual Assessments. On dissolution of the Community
Association incident to the abandonment or termination of the Community as a planned
development, any amounts remaining in any of the Community Association Accounts shall be
distributed to or for the benefit of the Owners in the same proportions as such money was
collected from the Owners. The Board may determine that funds remaining in the Special
Benefit Area Operating Account at the end of the Fiscal Year be retained and used to reduce the
following Fiscal Year's Special Benefit Area Assessment charge.
7.6.6. Payment of Annual Assessments. Each Owner shall pay Annual
Assessments in installments at such frequency, in such amounts and by such methods as are
established by the Board. If the Community Association incurs additional expenses because of a
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payment method selected by an Owner, the Community Association shall charge the additional
expenses to the Owner. Each installment of Annual Assessments may be paid to the Community
Association in one (1) check or in separate checks as payments attributable to specified
Community Association Accounts. If any payment of an Annual Assessment installment (a) is
less than the amount assessed and (b) does not specify the Community Association Accounts into
which it should be deposited, then the amount received shall be credited in order of priority first
to the Operating Account, until that portion of the Annual Assessment has been satisfied, and
second to the Reserve Account.
7.6.7. Exemption from Annual Assessments. The Board may, at its sole
discretion, exempt each Owner (including Declarant and Participating Builders) from paying that
portion of any Annual Assessment allocated to defraying expenses and reserves directly
attributable to the existence and use of any Improvement on the Community Common Property
or Subassociation Property the construction of which has not yet been completed. If granted,
such exemption shall continue until the earlier to occur of (i) the Recordation of a notice of
completion of an Improvement on the Community Common Property or Subassociation
Property, or (ii) the placement of such Improvement into use.
7.7 CAPITAL IMPROVEMENT ASSESSMENTS. The Board may levy, in any
Fiscal Year, a Capital Improvement Assessment or Reconstruction Assessment to defray, in
whole or in part, the cost of any construction, repair or replacement of a capital Improvement or
such other addition to the Community Common Property. No Capital Improvement Assessments
in any Fiscal Year which, if added to the Capital Improvement Assessments already levied
during such Fiscal Year, exceed five percent (5%) of the Community Association's Budgeted
gross expenses for such Fiscal Year, may be levied without the vote or written consent of
Owners casting a majority of votes at an Increase Election. The Board may levy, in any Fiscal
Year, a Capital Improvement Assessment applicable to that Fiscal Year which exceeds five
percent (5%) of the Community Association's Budgeted gross expenses for such Fiscal Year if
such increase is necessary for addressing an Emergency Situation as defined in Section 7.5.5.
7.8 LEVEL ASSESSMENT PROCEDURE. For so long as Annexable Territory
may be added to the Community as a Phase, the Board may, subject to prior DRE approval, elect
to implement a level assessment procedure in accordance with applicable DRE guidelines
("Level Assessment Procedure', to minimize the need for frequent adjustments in the amount
of the Annual Assessments during the development of the Community. Where the Level
Assessment Procedure is used, the Annual Assessments for certain Phases may be less than or
more than the actual Common Expenses for a given year. To implement the Level Assessment
Procedure, the Board must:
7.8.1. Establish and maintain a separate account for the cumulative operating
surplus;
7.8.2. Use the account established under clause (a) above and the funds therein
only for the funding of Annual Assessments in a given Fiscal Year (as determined by the Board);
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7.8.3. Include in the Inspection Report referenced in Section 2.1.4 a review of
the Level Assessment Procedure, to ensure that adequate Annual Assessments are being
collected; and
7.8.4. Meet any other requirements which may be imposed by the DRE.
ARTICLE VIII
INSURANCE
8.1 DUTY TO OBTAIN INSURANCE; TYPES. The Community Association
shall obtain and keep in effect at all times the following insurance coverages:
8.1.1. Commercial General Liability. A policy of commercial general
liability insurance (including coverage for medical payments), insuring the Community
Association and the Owners against liability for bodily injury, death and property damage arising
from or relating to the ownership or use of the Community Common Property. Such policy shall
specify amounts and include protection from liability and risks as are customarily covered in
similar planned unit developments in the area of the Community, and shall include a severability
of interest endorsement or the equivalent which shall preclude the insurer from denying the claim
of an Owner because of negligent acts or omissions of other Owners, or the Community
Association or the Community Association's officers and directors acting in their capacity as
officers and directors. The Community Association's policies shall at all times specify limits no
less than the minimum amounts required by California Civil Code Sections 1365.7 and 1365.9.
8.1.2. Fire and Casualty Insurance. Fire and casualty insurance with
extended coverage, special form, without deduction for depreciation, in an amount as near as
possible to the full replacement value of all insurable Improvements on the Community Common
Property. The casualty insurance shall not include earthquake coverage unless the Board is
directed to obtain earthquake coverage by a majority of the Community Association's voting
power.
8.1.3. Fidelity Insurance. Fidelity insurance coverage for any Person
handling funds of the Community Association, whether or not such persons are compensated for
their services, in an amount not less than the estimated maximum of funds, including reserve
funds, in the custody of the Person during the term of the insurance. The aggregate amount of
the fidelity insurance coverage may not be less than the sum equal to one-fourth (1/4) of the
Annual Assessments on all Lots in the Community, plus reserve funds.
8.1.4. Requirements of Fannie Mae, Ginnie Mae and Freddie Mac.
Notwithstanding anything in the Governing Documents to the contrary, the amount, term and
coverage of any policy of insurance required under this Article VHI (including the endorsements,
the amount of the deductible, the named insureds, the loss payees, standard mortgage clauses,
notices of changes or cancellations, and the insurance company rating) shall also satisfy the
minimum requirements established for this type of development (if applicable) by Fannie Mae,
Ginnie Mae and Freddie Mac, or any successor to those entities, so long as any of those entities
is a Mortgagee or Owner of a Lot in the Community, except to the extent such coverage is not
reasonably available or has been waived in writing by the entity requiring the insurance
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coverage. If the above entities have not established requirements on any policy required
hereunder, the term, amount and coverage of such policy shall, subject to Section 8.1.1 above, be
no less than that which is customary for similar policies on similar projects in the area of the
Community.
8.1.5. Other Insurance. Such other insurance insuring other risks
customarily insured by associations managing planned unit developments similar in construction,
location and use.
8.1.6. Beneficiaries. The Community Association's insurance shall be kept
for the benefit of the Community Association, the Owners and the Mortgagees, as their interests
may appear as named insureds, subject, however, to loss payment requirements established in
this Community Declaration.
8.2 WAIVER OF CLAIM AGAINST COMMUNITY ASSOCIATION. All
policies of insurance kept by or for the benefit of the Community Association and the Owners
must provide that the Community Association and the Owners waive and release all claims
against one another, the Board, Participating Builders and Declarant, to the extent of the
insurance proceeds available, whether or not the insurable damage or injury is caused by the
negligence or breach of any agreement by any of the Persons.
8.3 RIGHT AND DUTY OF OWNERS TO INSURE. Each Owner is responsible
for insuring his personal property and all other property and Improvements on his Lot. Nothing
in this Community Declaration precludes any Owner from carrying any public liability insurance
he considers desirable; however, Owners' policies may not adversely affect or diminish any
coverage under any of the Community Association's insurance policies. Duplicate copies of
Owners' insurance policies shall be deposited with the Community Association on request. If
any loss intended to be covered by the Community Association's insurance occurs and the
proceeds payable are reduced due to insurance carried by any Owner, such Owner shall assign
the proceeds of the Owner's insurance to the Community Association, to the extent of such
reduction, for application to the same purposes as the reduced proceeds are to be applied.
8.4 NOTICE OF EXPIRATION REQUIREMENTS. If available, each of the
Community Association's insurance policies must contain a provision that the policy may not be
canceled, terminated, materially modified or allowed to expire by its terms, without at least ten
(10) days' prior written notice to the Board and Declarant, and to each Owner and Mortgagee,
insurer and guarantor of a first Mortgage who has filed a written request with the carrier for such
notice and every other Person in interest who requests such notice of the insurer. In addition,
fidelity insurance shall provide that it may not be canceled or substantially modified without at
least ten (10) days' prior written notice to any insurance trustee named pursuant to Section 8.5
and to each Fannie Mae servicer who has filed a written request with the carrier for such notice.
8.5 TRUSTEE FOR POLICIES. The Community Association is trustee of the
interests of all named insureds under the Community Association's insurance policies. Unless an
insurance policy provides for a different procedure for filing claims, all claims must be sent to
the insurance carrier or agent by certified mail and be clearly identified as a claim. The
Community Association shall keep a record of all claims made. All insurance proceeds under
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any Community Association insurance policies must be paid to the Board as trustees. The Board
has the authority to negotiate loss settlements with insurance carriers, with participation, to the
extent the Board desires, of first Mortgagees who have filed written requests within ten (10) days
of receipt of notice of any damage or destruction as provided in Section 9.4. The Board is
authorized to make a settlement with any insurer for less than full coverage for any damage, so
long as the Board acts in accordance with the standard of care established in this Community
Declaration. Any two (2) officers of the Community Association may sign a loss claim form and
release form in connection with the settlement of a loss claim, and such signatures are binding on
all the named insureds. A representative chosen by the Board may be named as an insured,
including a trustee with whom the Community Association may enter into an insurance trust
agreement and any successor to such trustee, who shall have exclusive authority to negotiate
losses under any insurance policy and to perform such other functions necessary to accomplish
this purpose.
8.6 ACTIONS AS TRUSTEE. Except as otherwise specifically provided in this
Community Declaration, the Board has the exclusive right to bind the Community Association
and the Owners to all matters affecting insurance carried by the Community Association, the
settlement of a loss claim, and the surrender, cancellation and modification of all such insurance.
Duplicate originals or certificates of all policies of fire and casualty insurance kept by the
Community Association and of all renewals thereof, together with proof of payment of
premiums, shall be delivered by the Community Association to all Owners and Mortgagees who
requested them in writing.
8.7 ANNUAL INSURANCE REVIEW. The Board shall review the Community
Association's insurance policies at least annually to determine the amount of the casualty and
fire insurance referred to in Section 8.1. If economically feasible, the Board shall obtain a
current appraisal of the full replacement value of the Improvements on the Community Common
Property, without deduction for depreciation, from a qualified independent insurance appraiser,
before each such annual review.
8.8 REQUIRED WAIVER. All of the Community Association's insurance policies
insuring against physical damage must provide, if reasonably possible, for waiver of:
8.8.1. Subrogation of claims against the Owners and tenants of the Owners;
8.8.2. Any defense based on coinsurance;
8.8.3. Any right of setoff, counterclaim, apportionment, proration or
contribution due to other insurance not carried by the Community Association;
8.8.4. Any invalidity, other adverse effect or defense due to any breach of
warranty or condition caused by the Community Association, any Owner or any tenant of any
Owner, or arising from any act or omission of any named insured or the respective agents,
contractors and employees of any insured;
8.8.5. Any right of the insurer to repair, rebuild or replace, and, if the
Improvement is not repaired, rebuilt or replaced following loss, any right to pay under the
insurance an amount less than the replacement value of the Improvements insured;
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8.8.6. Notice of the assignment of any Owner of his interest in the insurance
by virtue of a conveyance of any Lot;
8.8.7. Any right to require any assignment of any Mortgage to the insurer;
8.8.8. Any denial of an Owner's claim because of negligent acts by the
Community Association or other Owners; and
8.8.9. Prejudice of the insurance by any acts or omissions of Owners that are
not under the Community Association's control.
ARTICLE IX
DESTRUCTION OF IMPROVEMENTS
9.1 RESTORATION OF THE COMMUNITY. Except as otherwise authorized by
the Owners, if any portion of the Community which the Community Association is responsible
for maintaining is destroyed, the Community Association shall restore the same to its former
condition as promptly as practical and in accordance with applicable law and County codes and
approvals, including plan checks, permits, and fee payments. The Community Association shall
use the proceeds of its insurance for reconstruction or repair of the Community unless otherwise
authorized in this Community Declaration or by the Owners. The Board shall commence such
reconstruction promptly. The Community shall be reconstructed or rebuilt substantially in
accordance with the original construction plans if they are available, unless changes
recommended by the Design Review Committee have been approved by the Owners. If the
insurance proceeds amount to at least ninety-five percent (95%) of the estimated cost of
restoration and repair, the Board shall levy a Reconstruction Assessment to provide the
additional funds necessary for such reconstruction. If the insurance proceeds amount to less than
ninety-five percent (95%) of the estimated cost of restoration and repair, the Board may levy a
Reconstruction Assessment and proceed with the restoration and repair only if both of the
following conditions ("Conditions To Reconstruction's have been satisfied: (a) the levy of a
Reconstruction Assessment to pay the costs of restoration and repair of the Community is
approved by the Owners, and (b) within one (1) year after the date on which the destruction
occurred, the Board Records a certificate of the resolution authorizing the restoration and repair
("Reconstruction Certificate'. If either of the Conditions to Reconstruction does not occur
following a destruction for which insurance proceeds available for restoration and repair are less
than ninety-five percent (95%) of the estimated cost of restoration and repair, then the Board
shall deposit the funds in the Operating Account.
9.2 DAMAGE TO RESIDENCES -RECONSTRUCTION. If all or any portion of
any Residence or other Improvements on a Lot is damaged or destroyed by fire or other casualty,
the Owner of the damaged Lot shall rebuild, repair or reconstruct the Residence and
Improvements in accordance with all applicable laws and codes and in a manner which will
restore them substantially to their appearance and condition immediately before the casualty or
as otherwise approved by the Design Review Committee. The Owner of any damaged Lot or
Residence and the Design Review Committee shall proceed with all due diligence, and the
Owner shall cause reconstruction to commence within six (6) months after the damage occurs
and to be completed within twelve (12) months after damage occurs, unless prevented by causes
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beyond such Owner's reasonable control. The transfer of a damaged Lot or a Lot with a
damaged Residence to another Person will not extend the time allowed in this Section for
commencement and completion of reconstruction by the transferee. However, no such transferee
will be required to commence or complete reconstruction in less than thirty (30) days from the
date the transferee acquired title to the Lot.
9.3 INTERIOR DAMAGE. With the exception of any casualty or damage covered
by insurance kept by the Community Association, restoration and repair of any damage to the
interior of any individual Residence, including all fixtures, cabinets and improvements therein,
together with restoration and repair of all interior paint, wall coverings and floor coverings, must
be made by and at the individual expense of the Owner of the Residence so damaged. If a
determination to rebuild the Community after partial or total destruction is made, as provided in
this Article, such interior repair and restoration shall be completed as promptly as practical and
in a lawful and workmanlike manner, in accordance with plans approved by the Design Review
Committee as provided in this Community Declaration.
9.4 NOTICE TO OWNERS AND LISTED MORTGAGEES. The Board,
immediately on having knowledge of any damage or destruction affecting a material portion of
the Community Common Area owned in fee simple by the Community Association, shall
promptly notify all Owners and Mortgagees, insurers and guarantors of first Mortgages on Lots
in the Community who have filed a written request for such notice with the Board.
ARTICLE X
EMINENT DOMAIN
The term "taking" as used in this Article means inverse condemnation by exercise of the
power, of eminent domain or by sale under threat of the exercise of the power of eminent domain.
The Board shall represent the Owners in any proceedings, negotiations, settlements, or
agreements regarding takings. All takings proceeds shall be payable to the Community
Association for the benefit of the Owners and their Mortgagees, and shall be distributed to such
Owners and Mortgagees as provided in this Article.
10.1 CONDEMNATION OF COMMUNITY COMMON AREA. If there is a
taking of the Community Common Area owned in fee simple by the Community Association,
then the award in condemnation shall be paid to the Community Association and shall be
deposited in the Operating Account.
10.2 CONDEMNATION OF LOTS. If there is a taking of a Lot, the award in
condemnation shall be paid to the Owner of the Lot; however, such award shall first be applied
to the balance then due on any Mortgages encumbering such Owner's Lot, in order of priority.
10.3 NOTICE TO OWNERS AND MORTGAGEES. The Board, on learning of
any condemnation proceeding affecting a material portion of the Community Common Area, or
any threat thereof, shall promptly notify all Owners and those Mortgagees, insurers and
guarantors of Mortgages on Lots in the Community who have filed a written request for such
notice with the Community Association.
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ARTICLE XI
RIGHTS OF MORTGAGEES
11.1 GENERAL PROTECTIONS. No amendment or violation of this Community
Declaration defeats or renders invalid the rights of the Mortgagee under any Mortgage
encumbering one (1) or more Lots made in good faith and for value, provided that after the
foreclosure of any such Mortgage, the foreclosed Lot(s)-will remain subject to this Community
Declaration. For purposes of this Community Declaration, "first Mortgage" means a Mortgage
with first priority over other Mortgages or Deeds of Trust on a Lot, and "first Mortgagee" means
the Mortgagee of a first Mortgage. For purposes of any provisions of the Governing Documents
which require the vote or approval of a specified percentage of first Mortgagees, such vote or
approval is determined based on one (1) vote for each Lot encumbered by each such first
Mortgage.
11.2 ADDITIONAL RIGHTS. In order to induce the VA, FHA Freddie Mac, Ginnie
Mae and Fannie Mae to participate in the financing of the sale of Lots, the following provisions
are added hereto (and to the extent these added provisions conflict with any other provisions of
the Governing Documents, these added provisions control):
11.2.1. Notices. Each Mortgagee, insurer and guarantor of a Mortgage
encumbering one (1) or more Lots, upon filing a written request for notification with the Board,
is entitled to written notification from the Community Association of. (a) any condemnation or
casualty loss which affects either a material portion of the Community or the Lot(s) securing the
respective first Mortgage; (b) any delinquency of sixty (60) days or more in the performance of
any obligation under the Governing Documents, including the payment of Assessments or
charges owed by the Owner(s) of the Lot(s) securing the Mortgage, which notice each Owner
hereby consents to and authorizes; and (c) a lapse, cancellation, or material modification of any
policy of insurance or fidelity bond kept by the Community Association.
11.2.2. Right of First Refusal. Each Owner who obtains title to a Lot
(including a first Mortgagee who obtains title to a Lot pursuant to (a) the remedies provided in
such Mortgage, (b) foreclosure of the Mortgage, or (c) deed or assignment in lieu of foreclosure),
is exempt from any "right of first refusal" created or purported to be created by the Governing
Documents.
11.2.3. Unpaid Assessments. If the first Mortgagee of a Lot obtains fee title to
the Lot either by foreclosure or by any other remedy provided under the Mortgage (except for
deed -in -lieu of foreclosure), then the Mortgagee shall take title to the Lot free and clear of any
claims for unpaid Assessments or charges against the Lot to the extent the Assessments or
charges accrued before the date on which the Mortgagee acquired title to the Lot.
11.2.4. Community Association Records. All Mortgagees, insurers and
guarantors of first Mortgages, on written request to the Community Association, shall have the
right to:
(a) examine current copies of the Community Association's books,
records and financial statements and the Governing Documents during normal business hours;
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(b) receive written notice of all meetings of Owners; and
(c) designate in writing a representative who shall be authorized to
attend all meetings of Owners.
11.2.5. Payment of Taxes. First Mortgagees may, jointly or singly, pay taxes
or other charges which are in default and which may or have become a charge against any
Community Common Area property and may pay any overdue premiums on hazard insurance
policies, or secure new hazard insurance coverage on the lapse of a policy, for Community
Common Area, and the Community Association shall immediately reimburse first Mortgagees
who made such payments.
11.2.6. Intended Improvements. All intended Improvements- in any Phase
other than the Phases in the Initial Covered Property must be substantially completed or the
completion of such Improvements must be secured by a bond or other arrangement acceptable to
the DRE before the first Close of Escrow in such Phase. All intended Improvements in any
Phase other than the Phases in the Initial Covered Property shall be substantially consistent with
the Improvements in the Initial Covered Property in structure, type and quality of construction.
The requirements of this Section are for the benefit of and may be enforced only by Fannie Mae.
11.2.7. Contracts. The Board may enter into such contracts or agreements on
behalf of the Community Association as are required in order to satisfy the guidelines of the VA,
FHA, Freddie Mac, Ginnie Mae, Fannie Mae or any similar entity, so as to allow for the
purchase, insurance or guaranty, as the case may be, by such entities of first Mortgages
encumbering Lots improved with Residences. Each Owner hereby agrees that it will benefit the
Community Association and the Owners, as a class of potential Mortgage borrowers and
potential sellers of their Lots, if such agencies approve the Community as a qualifying
subdivision under their respective policies, rules and regulations. Each Owner hereby authorizes
his Mortgagees to furnish information to the Board concerning the status of any Mortgage
encumbering a Lot.
ARTICLE XII
ENFORCEMENT AND DISPUTE RESOLUTION
12.1 ENFORCEMENT OF GOVERNING DOCUMENTS. All violations of the
Governing Documents, except for: (a) those governed by Sections 12.2 or 12.3, or (b) those
subject to the Right to Repair Law and accordingly subject to resolution through the statutory
non -adversarial pre -litigation process commencing at California Civil Code Section 910 and
alternative dispute resolution provisions commencing at Section 12.4 below), or California Civil
Code Section 1375, et seq., shall be resolved as follows:
12.1.1. Right to Enforce. The Board, the Community Association, the
Declarant and any Owner may enforce the Governing Documents as described in this Article,
subject to Sections 1363.810, et seq. and 1369.510, et seq. of the California Civil Code. Each
Owner has a right of action against the Community Association for the Community
Association's failure to comply with the Governing Documents. Each remedy provided for in
this Community Declaration is cumulative and not exclusive or exhaustive.
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12.1.2. Violations Identified by the Community Association. If the Board or
the Design Review Committee determines that there is a violation of the Governing Documents,
other than nonpayment of any Assessment, then the Board shall give written notice to the
responsible Owner identifying (a) the condition or violation complained of, and (b) the length of
time the Owner has to remedy the violation including, if appropriate, the length of time the
Owner has to submit plans to the Design Review Committee and the length of time the Owner
has to complete the work proposed in the plans submitted to the Design Review Committee.
This requirement shall apply notwithstanding the fact that this Community Declaration may
duplicate City or County ordinances or regulations. If an Owner does not perform corrective
action within the allotted time, the Board, after Notice and Hearing, may remedy such condition
or violation complained of, and the cost thereof shall be charged to the Owner as a Special
Assessment. If the violation involves nonpayment of any Assessment, then the Board may
collect such delinquent Assessment pursuant to the procedures established in Section 12.2.
12.1.3. Violations Identified by an Owner. If an Owner alleges that another
Person is violating the Governing Documents (other than nonpayment of any Assessment), the
complaining Owner must first submit the matter to the Board for Notice and Hearing before the
complaining Owner may resort to alternative dispute resolution, as required by Section
1369.510, et seq. of the California Civil Code, or litigation for relief.
12.1.4. Legal Proceedings. Failure to comply with any of the terms of the
Governing Documents by any Person is grounds for relief which may include an action to
recover damages, injunctive relief, foreclosure of any lien, or any combination thereof, however,
the procedures established in Sections 1363.810, et seq. and 1369.510, et seq. of the California
Civil Code and in Sections 12.1.2 and 12.1.3 must first be followed, if they apply.
12.1.5. Additional Remedies. After Notice and Hearing, the Board may
impose any of the remedies provided for in the Bylaws. The Board may adopt a schedule of
reasonable fines or penalties which, in its reasonable discretion, the Board may assess against a
Person for the failure of such Person to comply with the Governing Documents. Such fines or
penalties may only be assessed pursuant to Civil Code Section 1363. After Notice and Hearing,
the Board may direct the officers of the Community Association to Record a notice of
noncompliance (if allowed by law) against a Lot owned by any Owner who has violated any
provision of this Community Declaration. The notice shall include a legal description of the Lot
and shall specify the provision of this Community Declaration that was violated, the violation
committed, and the steps required to remedy the noncompliance. Once the noncompliance is
remedied or the noncomplying Owner has taken such other steps as reasonably required by the
Board, the Board shall direct the officers of the Community Association to Record a notice that
the noncompliance has been remedied.
12.1.6. No Waiver. Failure to enforce any provision of this Community
Declaration does not waive the right to enforce that provision, or any other provision of this
Community Declaration.
12.1.7. Limit on Expenditures. The Community Association may not incur
litigation expenses, including attorneys' fees, or borrow money to fund litigation, where the
Community Association initiates legal proceedings or is joined as a plaintiff in legal proceedings,
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unless the Community Association first obtains the consent of a majority of the Community
Association's voting power (excluding the voting power of any Owner who would be a
defendant in such proceedings) and, if applicable, complies with the requirements of Sections
1363.810, et seq. and 1369.510, et seq. of the California Civil Code. Such approval is not
necessary if the legal proceedings are initiated (a) to enforce the use restrictions contained in
Article II, (b) to enforce the architectural and landscaping control provisions contained in Article
V, (c) to collect any unpaid Assessments levied pursuant to the Governing Documents, (d) for a
claim, other than a Right to Repair Law Claim, the total value of which is less than Five Hundred
Thousand Dollars ($500,000), or (e) as a cross -complaint in litigation to which the Community
Association is already a party. If the Community Association decides to use or transfer Reserve
Account funds or borrow funds to pay for any litigation, the Community Association must notify
the Owners of the decision by mail. Such notice shall provide an explanation of why the
litigation is being initiated or defended, why Operating Account funds cannot be used, how and
when the Reserve Account funds will be replaced or the loan will be repaid, and a proposed
budget for the litigation. The notice must state that the Owners have a right to review an
accounting for the litigation which will be available at the Community Association's office. The
accounting shall be updated monthly. If the Community Association action to incur litigation
expenses or borrow money to fund litigation concerns a Right to Repair Law Claim, then the
voting requirements of both Sections 4.5.2 and 12.1.7 must be met.
12.2 DELINQUENT ASSESSMENTS.
12.2.1. Delinquency. Assessments are delinquent if not paid within fifteen (15)
days after the due date established by the Community Association. Assessments not paid within
thirty (30) days after the due date, plus all reasonable costs of collection (including attorneys'
fees) and late charges bear interest at the maximum rate permitted by law commencing thirty
(30) days after the due date until paid. The Community Association may also require the
delinquent Owner to pay a late charge in accordance with California Civil Code Section
1366(e)(2). The Community Association need not accept any tender of a partial payment of an
Assessment and all costs and attorneys' fees attributable thereto. Acceptance of any such tender
does not waive the Community Association's right to demand and receive full payment.
12.2.2. Creation and Release of Lien.
(a) Priority of Lien. All liens levied in accordance with this
Community Declaration shall be prior and superior to (i) any Community declaration of
homestead Recorded after the Recordation of this Community Declaration, and (ii) all other
liens, except (1) all taxes, bonds, Assessments and other levies which, by law, would be superior
thereto, and (2) the lien or charge of any first Mortgage made in good faith and for value and
Recorded before the date on which the "Notice of Delinquent Assessment" (described in this
Section) against the assessed Lot was Recorded.
(b) Notice Before Creating Lien. Before the Community
Association may place a lien on a Owner's Lot to collect a past due Assessment, the Community
Association shall send written notice ("Notice of Intent to Lien', at least thirty (30) days prior
to Recording the lien, to the Owner by certified mail which contains the following information:
(1) the Community Association's fee and penalty procedure, (2) an itemized statement of the
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charges owed by the Owner, including the principal owed, any late charges, any interest, the
method of calculation, and any attorneys' fees, (3) the collection practices used by the
Community Association, (4) a statement that the Community Association may recover
reasonable costs of collecting past due Assessments, (5) a statement that the Owner has the right
to inspect the Community Association's records, pursuant to California Corporations Code
Section 8333, (6) the following statement in 14-point boldface type or all capital letters:
"IMPORTANT NOTICE: IF YOUR SEPARATE INTEREST IS PLACED IN FORECLOSURE
BECAUSE YOU ARE BEHIND IN YOUR ASSESSMENTS, IT MAY BE SOLD WITHOUT
COURT ACTION," (7) a statement that the Owner shall not be liable to pay the charges,
interest and costs of collection if it is determined the Assessment was paid on time to the
Community Association, and (8) a statement that the Owner has the right to request a meeting
with the Board, as provided by California Civil Code Section 1367.1(c) and Section 12.2.2(g)
below, and (9) a statement concerning the Owner's right to dispute the Assessment debt by
submitting a written request for dispute resolution to the Community Association pursuant to the
Community Association's "meet and confer" program required in California Civil Code Section
1363.810, et seq., and (10) a statement concerning the Owner's right to request alternative
dispute resolution with a neutral third party pursuant to California Civil Code Section 1369.510
before the Community Association may initiate foreclosure against the Owner's separate interest,
except that binding arbitration shall not be available if the Community Association intends to
initiate a judicial foreclosure.
(c) Dispute Resolution Before Recording Lien. Prior to Recording
a Notice of Delinquent Assessment, the Community Association shall offer the Owner and, if so
requested by the Owner, participate in dispute resolution pursuant to the Community
Association's "meet and confer" program.
(d) Dispute Resolution Before Foreclosure. Prior to initiating a
foreclosure for delinquent Assessments, the Community Association shall offer the Owner and,
if so requested by the Owner, shall participate in dispute resolution pursuant to the Community
Association's "meet and confer" program or alternative dispute resolution with a neutral third
party. The decision to pursue resolution or a particular type of alternative dispute resolution is
the choice of the Owner, except that binding arbitration is not available if the Community
Association intends to initiate a judicial foreclosure.
(e) Board Approval. The decision to Record a Notice of Delinquent
Assessment shall be made only by the Board and may not be delegated to an agent of the
Community Association. The Board must approve the decision by a majority vote of the Board
members in an open meeting. The Board shall record the vote in the minutes of that meeting.
(f) Dispute by Owner. An Owner may dispute the Notice of Intent
to Lien by submitting to the Board a written explanation of the reasons for the Owner's dispute.
The Board shall respond in writing to the Owner within fifteen (15) days after the date of the
postmark of the explanation, if the explanation is mailed within fifteen (15) days after the date of
the postmark of the Notice of Intent to Lien.
(g) Owner's Right to Request Meeting. An Owner may submit a
written request to meet with the Board to discuss a payment plan for the debt noticed in
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Section 12.2.2(b) above. The Community Association shall provide the Owner with the
standards for payment plans, if any exist. The Board shall meet with the Owner in executive
session within forty-five (45) days after the date of the postmark of the request, if the request is
mailed within fifteen (15) days after the date of the postmark of the Notice of Intent to Lien,
unless there is no regularly scheduled Board meeting within that period, in which case the Board
may designate a committee of one or more members to meet with the Owner.
(h) Notice of Delinquent Assessment. The lien becomes effective
on Recordation by the Board or its authorized agent of a Notice of Delinquent Assessment
("Notice of Delinquent Assessment's securing the payment of any Assessment or installment
thereof levied by the Community Association against any Lot Owner, as provided in Section
1367 or 1367.1 of the California Civil Code. The Notice of Delinquent Assessment must
identify (1) the amount of the Assessment and other authorized charges and interest, including
the cost of preparing and Recording the Notice of Delinquent Assessment, (2) the amount of
collection costs incurred, including reasonable attorneys' fees, (3) a sufficient description of the
Lot that has been assessed, (4) the Community Association's name and address, (5) the name of
the Owner of the Lot that has been assessed, and (6) if the lien is to be enforced by nonjudicial
foreclosure, the name and address of the trustee authorized by the Community Association to
enforce the lien by sale. The Notice of Delinquent Assessment must be signed by an authorized
Community Association officer or agent and must be mailed in the manner required by Section
2924b of the California Civil Code to the Owner of record of the Lot no later than ten (10)
calendar days after Recordation. The lien relates only to the individual Lot against which the
Assessment was levied and not to the Community as a whole.
(i) Service on Owner's Legal Representative. In addition to the
requirements of California Civil Code Section 2924, a Notice of Delinquent Assessment shall be
served by the Community Association on the Owner's legal representative as provided in
California Code of Civil Procedure Section 415.10 and following.
0) Secondary Addresses. Upon receipt of a written request by an
Owner identifying a secondary address for purposes of collection notices, the Community
Association shall send an additional copy of any Notice of Intent to Lien, Notice of Delinquent
Assessment or other Notice given under Section 12.2.2 to the secondary address provided. The
Community Association shall notify Owners of their right to submit secondary addresses to the
Community Association, at the time the Community Association issues the proforma operating
budget pursuant to California Civil Code Section 1365. The Owner's request must be in writing
and mailed to the Community Association in a manner which indicates the Community
Association has received it. The Owner may identify or change a secondary address at any time,
provided that, if a secondary address is identified or changed during the collection process, the
Community Association shall only be required to send Notices to the indicated secondary
address from the point the Community Association receives the request.
(k) Exceptions. Assessments described in Section 1367(c) of the
California Civil Code and Section 2792.26(c) of the California Code of Regulations may not
become a lien against an Owner's Lot enforceable by the sale of the Lot under Sections 2924,
2924(b) and 2924(c) of the California Civil Code.
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(1) Release of Lien. Within twenty-one (21) days after payment of
the full amount claimed in the Notice of Delinquent Assessment, or other satisfaction thereof, the
Board shall cause to be Recorded a Notice of Satisfaction and Release of Lien ("Notice of
Release') stating the satisfaction and release of the amount claimed. The Community
Association shall provide the Owner with a copy of the Notice of Release or any other notice that
the full amount claimed in the Notice of Delinquent Assessment has been satisfied. The Board
may require the Owner to pay a reasonable charge for preparing and Recording the Notice of
Release. Any purchaser or encumbrancer who has acted in good faith and extended value may
rely on the Notice of Release as conclusive evidence of the full satisfaction of the sums identified
as owed in the Notice of Delinquent Assessment.
12.2.3. Enforcement of Liens. The Board shall enforce the collection of
amounts due under this Community Declaration by one (1) or more of the alternative means of
relief afforded by this Community Declaration, subject to the restrictions in California Civil
Code Section 1367.4.
(a) The lien on a Lot may be enforced by foreclosure and sale of the
Lot after failure of the Owner to pay any Assessment, or installment thereof, as provided in this
Community Declaration.
(b) The decision to initiate foreclosure after Recording a Notice of
Delinquent Assessment shall be made only by the Board of Directors of the Community
Association and may not be delegated to an agent of the Community Association. The Board
shall approve the decision by a majority vote of the Board members in an executive session. The
Board shall record the vote in the minutes of the next meeting of the Board open to all members.
The Board shall maintain the confidentiality of the Owner or Owners by identifying the matter in
the minutes by the Lot number, rather than the name of the Owner or Owners. A Board vote to
approve foreclosure of a lien shall take place at least thirty (30) days prior to any public sale.
(c) The Board shall provide notice by personal service to an Owner
who occupies the Lot or to the Owner's legal representative, if the Board votes to foreclose on
the Lot. The Board shall provide written notice to an Owner who does not occupy the Lot by
first-class mail, postage prepaid, at the most current address shown on the books of the
Community Association. In the absence of written notification by the Owner to the Community
Association, the address of the Owner's Lot may be treated as the Owner's mailing address.
(d) The sale shall be conducted in accordance with the provisions of
the California Civil Code applicable to the exercise of powers of sale in Mortgages, or in any
manner permitted by law. The Community Association (or any Owner if the Community
Association refuses to act) may sue to foreclose the lien if (i) at least thirty (30) days have
elapsed since the date on which the Notice of Delinquent Assessment was Recorded, and (1) at
least ten (10) days have elapsed since a copy of the Notice of Delinquent Assessment was mailed
to the Owner affected thereby. The Community Association may bid on the Lot at foreclosure
sale, and acquire and hold, lease, mortgage and convey the same. On completion of the
foreclosure sale, the Community Association or the purchaser at the sale may file suit to secure
occupancy of the defaulting Owner's Lot, and the defaulting Owner shall be required to pay the
reasonable rental value for the Lot during any period of continued occupancy by the defaulting
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Owner or any persons claiming under the defaulting Owner. A nonjudicial foreclosure to collect
delinquent Assessments shall be subject to the right of redemption within 90 days after the sale,
as provided in California Civil Code Section 1367.4.
(e) A suit to recover a money judgment for unpaid Assessments
may be brought without foreclosing or waiving any lien securing the same, subject to the
provisions of California Civil Code Section 1367.1(b), but this provision or any suit to recover a
money judgment does not affirm the adequacy of money damages. Any recovery resulting from
a suit at law or in equity initiated pursuant to this Section may include reasonable attorneys' fees
as fixed by the court.
12.2.4. Priority of Assessment Lien. Mortgages Recorded before a Notice of
Delinquent Assessment have lien priority over the Notice of Delinquent Assessment. Sale or
transfer of any Lot does not affect the Assessment lien, except that the sale or transfer of any Lot
pursuant to judicial or nonjudicial foreclosure of a first Mortgage extinguishes the lien of such
Assessments as to payments which became due before such sale or transfer. No sale or transfer
relieves such Lot from liens for any Assessments thereafter becoming due. No Person who
obtains title to a Lot pursuant to a judicial or nonjudicial foreclosure of the first Mortgage is
liable for the share of the Common Expenses or Assessments chargeable to such Lot which
became due before the acquisition of title to the Lot by such Person. Such unpaid share of
Common Expenses or Assessments is a Common Expense collectible from all Owners including
such Person. The Community Association may take such action as is necessary to make any
Assessment lien subordinate to the interests of the Department of Veterans Affairs of the State of
California under its Cal -Vet loan contracts as if the Cal -Vet loan contracts were first Mortgages
of record.
12.2.5. Alternative Dispute Resolution. An Owner may dispute the
Assessments imposed by the Community Association as provided in this Community
Declaration and in California Civil Code Sections 1367.1 and 1367.4. If it is determined through
dispute resolution pursuant to the Community Association's "meet and confer" program required
in this Community Declaration or alternative dispute resolution with a neutral third party
pursuant to California Civil Code Section 1369.510, that the Community Association Recorded a
Notice of Delinquent Assessment in error, the Community Association shall promptly reverse all
late charges, fees, interest, attorney's fees, costs of collection, costs imposed for the Notice
prescribed in California Civil Code Section 1367.1(a), and costs of Recordation and release of
the lien authorized under California Civil Code Section 1367.4(b), and pay all costs related to the
dispute resolution or alternative dispute resolution.
12.2.6. Receivers. In addition to the foreclosure and other remedies granted to
the Community Association in this Community Declaration, each Owner, by acceptance of a
deed to such Owner's Lot, conveys to the Community Association all of such Owner's right, title
and interest in all rents, issues and profits derived from and appurtenant to such Lot, subject to
the right of the Community Association to collect and apply such rents, issues and profits to any
delinquent Assessments owed by such Owner, reserving to the Owner the right, before any
default by the Owner in the payment of Assessments, to collect and retain such rents, issues and
profits as they may become due and payable. On any such default, the Community Association
may, on the expiration of thirty (30) days following delivery to the Owner of the "Notice of
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Delinquent Assessment" described in this Community Declaration, either in person, by agent or
by receiver to be appointed by a court, and without regard to the adequacy of any security for the
indebtedness secured by the lien described in this Community Declaration, (a) enter in or on and
take possession of the Lot or any part thereof, (b) in the Community Association's name sue for
or otherwise collect such rents, issues and profits, including those past due and unpaid, and
(c) apply the same, less allowable expenses of operation, to any delinquencies of the Owner, and
in such order as the Community Association may determine. The entering upon and taking
possession of the Lot, the collection of rents, issues and profits and the application thereof, shall
not cure or waive any default or notice of default under this Community Declaration or
invalidate any act done pursuant to such notice.
12.2.7. Compliance with Law. To the extent that any provision in this
Section 12.2 conflicts with the provisions of the Davis -Stirling Act (California Civil Code
Section 1350, et seq.) the statutory provisions shall control.
12.3 ENFORCEMENT OF BONDED OBLIGATIONS. If (a) the Community
Common Property Improvements in any Phase are not completed before issuance of a Final
Subdivision Public Report for such Phase by the DRE, and (b) the Community Association is
obligee under a bond or other arrangement (`Bond's required by the DRE to secure performance
of Declarant's commitment to complete such Improvements, then the following provisions of
this Section will be applicable:
12.3.1. Consideration by the Board. The Board shall consider and vote on the
question of action by the Community Association to enforce the obligations under the Bond with
respect to any such Improvement for which a Notice of Completion has not been filed within
sixty (60) days after the completion date specified for that Improvement in the Planned
Construction Statement attached to the Bond. If the Community Association has given an
extension in writing for the completion of any Community Common Property Improvement, then
the Board shall be directed to consider and vote on the aforesaid question if a Notice of
Completion has not been filed within thirty (30) days after the expiration of the extension.
12.3.2. Consideration by the Owners. A special meeting of Owners for the
purpose of voting to override a decision by the Board not to initiate action to enforce the
obligations under the Bond or on the Board's failure to consider and vote on the question shall be
held no fewer than thirty-five (35) nor more than forty-five (45) days after the Board receives a
petition for such a meeting signed by Owners representing five percent (5%) of the Community
Association's total voting power. A vote of a majority of the Community Association's voting
power (excluding Declarant and Participating Builders) to take action to enforce the obligations
under the Bond shall be deemed to be the decision of the Community Association, and the Board
shall thereafter implement such decision by initiating and pursuing appropriate action in the
Community Association's name.
12.4 DISPUTES WITH DECLARANT _PARTIES. Any dispute between the
Community Association or any Owners, on the one hand, and the Declarant, any Participating
Builder, or any director, officer, partner, shareholder, member, employee, representative,
contractor, subcontractor, design professional or agent of the Declarant or Participating Builder
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(each, a "Declarant Party," and collectively, the "Declarant Parties', on the other hand, which
dispute:
(a) Arises under this Community Declaration or otherwise relates to the
Community (including Right to Repair Law Claims);
(b) Involves neither Community Common Area completion bonds, nor the
collection of delinquent Assessments from Declarant;
(c) Does not involve an amount in controversy that is subject to the Small
Claims Act (California Code of Civil Procedure Section 116.110, et seq.; and
(d) Concerns matters that are not resolved under the written warranty
delivered by a Declarant Party,
shall be a "Dispute" for purposes of this Section 12.4.
Any Right to Repair Claim where the parties are limited to one or more Owners, on the
one hand, and a Participating Builder (or any director, officer, partner, shareholder, member,
employee, representative, contractor, subcontractor, design professional or agent of Participating
Builder), on the other hand, shall be considered a "Participating Builder Dispute." A
Participating Builder Dispute shall not constitute a Dispute for purposes of this Section 12.4 so
long as (a) neither Declarant nor the Community Association are parties, and (b) the
Participating Builder has elected to institute its own alternative dispute resolution procedure for
the resolution of Participating Builder Disputes, and has given notice of its election in an
instrument recorded against the Participating Builder's Lots (and any Subassociation common
areas where applicable). All Participating Builder Disputes shall be resolved pursuant to the
procedure elected by the Participating Builder.
All Disputes shall be resolved in accordance with the alternative dispute resolution
procedures commencing at Section 12.4.1 below. All Right to Repair Law Claims shall be
resolved in accordance with the statutory "prelitigation procedure" set out in Chapter 4 of the
Right to Repair Law (commencing at California Civil Code Section 910) in lieu of the
procedures set forth in Sections 12.4.1 to 12.4.3 below, and if not resolved by the statutory "pre -
litigation procedure," then submitted to judicial reference as described in Section 12.4.4 below:
12.4.1. Notice. Any Person with a Dispute shall give written notice of the
Dispute by personal or mail service as authorized by Code of Civil Procedure Sections 415.10,
415.20, 415.21, 415.30 or 415.40 to the party to whom the Dispute is directed ("Respondent's
describing the nature of the Dispute and any proposed remedy (the "Dispute Notice'.
12.4.2. Right to Inspect and Correct. Commencing on the date the Dispute
Notice is delivered to the Respondent and continuing until the Dispute is resolved, the
Respondent and its representatives have the right to (a) meet with the party alleging the Dispute
at a reasonable time and place to discuss the Dispute, (b) enter the Community to inspect any
areas that are subject to the Dispute, and (c) conduct inspections and testing (including
destructive or invasive testing) in a manner deemed appropriate by the Respondent. If
Respondent elects to take any corrective action, Respondent and its representatives shall be
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provided full access to the Community to take and complete the corrective action. Respondent is
not obligated to take any corrective action. Respondent, with the consent of Declarant, has the
right to select the corrective action Respondent believes is appropriate. The right to inspect and
correct granted in this Section is in addition to the rights granted in California Civil Code Section
1375 (the "Calderon Act"). The procedures established in the Calderon Act may be
implemented before, during or after the procedure in this Section is implemented.
12.4.3. Mediation. If the Dispute is not resolved within ninety (90) days after
the Respondent receives the Dispute Notice, any party may submit the Dispute to mediation by
delivering a request for mediation ("Mediation Notice' in the same manner as allowed for
delivery of the Dispute Notice, The Dispute shall be mediated pursuant to (a) the Judicial
Arbitration and Mediation Service ("JAMS") mediation procedures in existence when the
Dispute Notice is delivered, as modified by this Section, or (b) the mediation procedures of any
successor to JAMS in existence when the Dispute Notice is delivered, as modified by this
Section, or (c) mediation procedures approved by the parties of any entity offering mediation
services that are acceptable to the parties to the Dispute (each, a "Party" and collectively, the
"Parties'. Except as provided in Section 12.4.5, no Person shall commence litigation regarding
a Dispute without complying with this Section 12.4.3.
(a) Selection of Mediator. The mediator shall be selected within
sixty (60) days from delivery of the Mediation Notice. The mediator shall be selected by mutual
agreement of the Parties. If the Parties cannot agree on a mediator, the mediator shall be selected
by the entity providing the mediation service. No Person shall serve as a mediator in any
Dispute in which the Person has any financial or personal interest in the result of the mediation,
except by the written consent of all Parties. Before accepting any appointment, the prospective
mediator shall disclose any circumstances likely to create a presumption of bias or to prevent a
prompt commencement of the mediation process.
(b) Position Letter; Pre Mediation Conference. No later than sixty
(60) days after selection of the mediator, each Party to the Dispute shall submit a letter
("Position Statement's containing (i) a description of the Party's position concerning the issues
that need to be resolved, (ii) a detailed description of the defects allegedly at issue, and (ill) a
suggested plan of repair, remediation or correction. The mediator may schedule a pre -mediation
conference. All Parties shall attend unless otherwise mutually agreed. The mediation shall be
commenced within twenty (20) days after submittal of all Position Statements and shall be
concluded within fifteen (15) days after the mediation began unless either the mediator extends
the mediation period, or the Parties mutually agree to extend the mediation period. The
mediation shall be held in the County or another place mutually acceptable to the Parties.
(c) Conduct of Mediation. The mediator has discretion to conduct
the mediation in the manner in which the mediator believes is most appropriate to achieve the
goal of settling the Dispute. The mediator is authorized to conduct joint and separate meetings
with the Parties and to make oral and written recommendations for settlement. The mediator
may also obtain expert advice concerning technical aspects of the Dispute, provided the Parties
agree to and do assume the expenses of obtaining such advice. The mediator shall not have the
authority to impose a settlement on the Parties.
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(d) Application of Evidence Code. The provisions of California
Evidence Code Sections 1115 through 1128 shall be applicable to the mediation process. Use
and disclosure of statements, evidence and communications offered or made in the course of the
mediation shall be governed by these sections, including the sections which preclude use of
material in future proceedings and the sections which provide for confidentiality of material.
(e) Parties Permitted at Mediation. Persons other than the Parties,
their liability insurers, Declarant, attorneys for the Parties and the mediator may attend mediation
sessions only with the permission of the Parties and the consent of the mediator. Declarant has
the right to attend the mediation session even if Declarant is not one of the Parties.
(f) Record. There shall be no stenographic, video or audio record
of the mediation process.
(g) Expenses. Each Party shall bear its own attorneys' fees and
costs incurred in connection with the mediation. All other expenses of the mediation including
the fees charged by the mediator and the cost of any proof or expert advice requested by the
mediator shall be borne equally by each of Declarant and the Declarant Parties to whom the
Dispute is directed, unless the Parties agree otherwise. This provision does not modify any
provision of a contract between Declarant and any Declarant Party requiring indemnification or
establishing a different allocation of costs between the Declarant and the Declarant Party.
12.4.4. Judicial Reference. If a Dispute remains unresolved after the
mediation required by Section 12.4.3 is completed, or if a Right to Repair Law Claim remains
unresolved after resort to the statutory "prelitigation procedures" described in Chapter 4 of the
Right to Repair Law, then any of the Parties may file a lawsuit, provided that the Community
Association must obtain the vote or written consent of Owners other than Declarant who
represent not less than sixty-seven percent (67%) of the Community Association's voting power
(excluding the voting power of Declarant) prior to filing a lawsuit in a Dispute or Right to Repair
Law Claim with Declarant or a Declarant Party. All lawsuits regarding Disputes or Right to
Repair Law Claims must be resolved by general judicial reference pursuant to California Code of
Civil Procedure Sections 638 and 641 through 645.1, as modified by this Section 12.4.4. The
Parties shall cooperate in good faith to ensure that all necessary and appropriate parties are
included in the judicial reference proceeding. No Party shall be required to participate in the
judicial reference proceeding if all Parties against whom such Party would have necessary or
permissive cross -claims or counterclaims will not or cannot be joined in the judicial reference
proceeding. The general referee shall have the authority to try all issues of fact and law and to
report a statement of decision to the court. The referee shall be the only trier of fact and law in
the reference proceeding, and shall have no authority to further refer any issues of fact or law to
any other Person unless all parties to the judicial reference proceeding consent, or the referee
determines that a conflict of interest or similar situation has arisen which would make it
inappropriate for the referee to act as the trier of fact or law concerning an issue or matter. In the
second alternative, an alternative judicial- referee shall be selected in accordance with
Section 12.4.4(b) solely for resolving or rendering a decision concerning the issue or matter
involved in the conflict.
(a) Place. The proceedings shall be heard in the County.
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(b) Referee. The referee shall be a retired judge who served on the
Superior Court of the State of California in the County with substantial experience in the type of
matter in dispute and without any relationship to the Parties or interest in the Community, unless
the Parties agree otherwise. The parties to the judicial reference proceeding shall meet to select
the referee no later than thirty (30) days after service of the initial complaint on all defendants
named in the complaint. Any dispute regarding the selection of the referee shall be resolved by
the court in which the complaint is filed.
(c) Commencement and Timing of Proceeding. The referee shall
commence the proceeding at the earliest convenient date and shall conduct the proceeding
without undue delay.
(d) Pre -hearing Conferences. The referee may require pre -hearing
conferences.
(e) Discovery. The parties to the judicial reference proceeding shall
be entitled only to limited discovery, consisting of the exchange of the following: (i) witness
lists, (11) expert witness designations, (iii) expert witness reports, (iv) exhibits, (v) reports of
testing or inspections, and (vi) briefs. Any other discovery authorized in the California Code of
Civil Procedure shall be permitted by the referee upon a showing of good cause or based on the
consent of all parties to the judicial reference proceeding.
(f) Motions. The referee shall have the power to hear and dispose
of motions, including motions relating to discovery, provisional remedies, demurrers, motions to
dismiss, motions for judgment on the pleadings and summary judgment and/or adjudication
motions, in the same manner as a trial court judge. The referee shall also have the power to
adjudicate summarily issues of fact or law including the availability of remedies whether or not
the issue adjudicated could dispose of an entire cause of action or defense.
(g) Record. A stenographic record of the hearing shall be made
which shall remain confidential except as may be necessary for post -hearing motions and any
appeals.
(h) Statement of Decision. The referee's statement of decision shall
contain an explanation of the factual and legal basis for the decision pursuant to California Code
of Civil Procedure Section 632. The decision of the referee shall stand as the decision of the
court, and upon filing of the statement of decision with the clerk of the court, judgment may be
entered thereon in the same manner as if the matter had been tried by the court.
(i) Remedies. The referee may grant all legal and equitable
remedies and award damages in the judicial reference proceeding.
0) Post -hearing Motions. The referee may rule on all post -hearing
motions in the same manner as a trial judge.
(k) Appeals. The decision of the referee shall be subject to appeal in
the same manner as if the matter had been tried by the court.
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(1) Expenses. Each Party shall bear its own attorneys' fees and
costs incurred in connection with the judicial reference proceeding. All other fees and costs
incurred in connection with the judicial reference proceeding, including the cost of the
stenographic record, shall be advanced equally by each of Declarant and the Declarant Parties to
whom the Dispute or Right to Repair Law Claim is directed. However, the referee shall have the
power to reallocate such fees and costs among the Parties in the referee's final ruling. This
provision does not modify any provision of a contract between Declarant and any Declarant
Party requiring indemnification or establishing a different allocation of costs between the
Declarant and the Declarant Parry.
12.4.5. Arbitration of Disputes. To the extent that the Dispute is not resolved
during mediation and cannot be submitted to Judicial Reference as provided in Section 12.4.4,
the entire matter shall proceed as one of binding arbitration governed by the Federal Arbitration
Act (9 U.S.C. §1-16) ("Arbitration's. To the extent the rules of procedure set forth herein do
not conflict with the Federal Arbitration Act, such rules of procedure shall be the rules of
procedure for the Arbitration. Judicial Arbitration and Mediation Services ("JAMS', its
successors, or any other entity offering arbitration services agreed to by the parties shall hear, try
and decide all issues of both fact and law and make any required findings of fact and, if
applicable, conclusions of law. Notwithstanding the requirements to submit Disputes to
Arbitration, if the party seeking to submit a Dispute to Arbitration chooses, the Dispute may
instead, as an alternative to Arbitration, be submitted to the California small claims court subject
to the limitations on the jurisdiction of such court. The decision of the small claims court and
any small claims appeals court will be final as to the Dispute.
(a) Interpretation. The procedures specified in this Section
pertaining to Arbitration are to be interpreted and enforced as authorized by the Federal
Arbitration Act (9 U.S.C. §1-16), which is designed to encourage use of alternative methods of
dispute resolution that avoid costly and potentially lengthy court proceedings. Interpretation and
application of those procedures shall conform to Federal court rules interpreting and applying the
Federal Arbitration Act. The Community is constructed of or uses materials and products
manufactured throughout the United States which are then shipped to the Community for
installation in the Community. The shipment of these materials and products across state lines to
the Community causes the products and materials to enter into the stream of interstate commerce
and become subject to the Interstate Commerce Clause (Article 1, Section VIII of the United
States Constitution) and ensuing Federal laws. References to California procedural law shall not
be construed as a waiver of any rights of the Parties under the Federal Arbitration Act or the right
of the Parties to have the procedures set forth in this Section 12.4.5 interpreted and enforced
under the Federal Arbitration Act.
(b) Amendment. The provisions of this Section 12.4.5 shall not be
amended nor shall other provisions be adopted that purport to supersede it without Declarant's
prior written consent. The Parties shall cooperate in good faith and shall diligently perform such
acts as may be necessary to carry out the purposes of this Section.
(c) Initiation of Claim. Any Party wishing to initiate Arbitration
pursuant to this Section shall serve a demand for Arbitration upon the responding Parties and
upon JAMS its successor, or to any other entity offering arbitration services agreed to by the
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Parties. Except as otherwise set forth herein, the Arbitration shall be conducted by and in
accordance with the rules of JAMS its successors, or to any other entity offering arbitration
services agreed to by the Parties.
(d) Arbitrator. The arbitrator to be appointed shall be employed by
JAMS, its successor, or to any other entity offering arbitration services agreed to by the Parties.
Except as otherwise set forth herein, the Arbitration shall be conducted by and in accordance
with the rules of JAMS or any successor thereto. Except for procedural issues, the proceedings,
the ultimate decisions of the arbitrator, and the arbitrator himself shall be subject to and bound
by existing California case and statutory law. Should JAMS cease to exist, as such, then all
references herein to JAMS shall be deemed to refer to its successor or, if none, to the American
Arbitration Association (in which case its commercial arbitration rules shall be used). The
Parties shall cooperate in good faith and shall diligently perform such acts as may be necessary
to ensure that all necessary and appropriate parties are included in the proceeding. Declarant
shall not be required to participate in the proceeding if all parties against whom Declarant would
have necessary or permissive cross -claims or counterclaims will not or cannot be joined in the
proceeding.
(e) Selection of Arbitrator. The proceeding shall be conducted by
one (1) qualified arbitrator selected in accordance with the rules of JAMS. The term "qualified"
shall mean a retired judge who has experience with the laws governing residential real estate
development and construction or an attorney who has actively practiced law in California for at
least fifteen (15) years and who has experience with the laws governing real estate development
and construction.
(f) Motions and Remedies. The arbitrator shall have the power to
hear and dispose of motions, including motions relating to provisional remedies, demurrers,
motions to dismiss, motions for judgment on the pleadings and summary judgment and/or
adjudication motions, in the same manner as a trial court judge. In addition, the arbitrator shall
have the power to summarily adjudicate issues of fact or law, including but not limited to the
availability of remedies, whether or not the issue adjudicated could dispose of an entire cause of
action or defense. The arbitrator shall have the power to grant provisional remedies including
preliminary injunctive relief. Prior to the selection of the arbitrator, any Party shall have the
right to petition the Superior Court of the County for any necessary provisional remedies.
(g) Discovery. Except as limited herein, the Parties shall be entitled
to limited discovery consisting of (i) witness lists; (11) expert witness designations; (iii) expert
witness reports; (iv) exhibits; (v) reports of testing or inspections, including but not limited to,
destructive or invasive testing; (vi) arbitration briefs; and (vii) the deposition, under oath, of any
designated experts and two other depositions of their choosing without obtaining the consent of
the arbitrator. All other discovery shall be permitted by the arbitrator at his discretion upon a
showing of good cause or based on the agreement of the Parties. The arbitrator shall oversee
discovery and may -enforce all discovery orders in the same manner as any trial court judge.
(h) Full Disclosure. Each Party shall, in good faith, make a full
disclosure of all issues and evidence to the other Parties prior to the hearing. Any evidence or
information that the arbitrator determines was unreasonably withheld shall be inadmissible by
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the party that withheld it. The initiating Party shall be the first to disclose all of the following, in
writing, to the other Party and to the arbitrator: (i) an outline of the issues and its position on
each such issue; (ii) a list of all witnesses it intends to call; and (iii) copies of all written reports
and other documentary evidence whether or not written or contributed to by its retained experts
(collectively, the "Outline'. The initiating Party shall submit its Outline to the other Parties and
to the arbitrator within thirty (30) days of the final selection of the arbitrator. Each responding
Party shall submit its written response as directed by the arbitrator.
(i) Hearing. The hearing shall be held in the County. The
arbitrator shall promptly commence the hearing giving due consideration to the complexity of
the issues, the number of Parties and necessary discovery and other relevant matters. The
hearing shall be conducted as informally as possible. Evidence Code Section 1152, et seq., shall
be applicable for the purpose of excluding from evidence offers, compromises, and settlement
proposals, unless the Parties thereto consent to their admission. Attorneys are not required and
any Party may elect to be represented by someone other than a licensed attorney. Cost of an
interpreter shall be born by the Parry requiring the services of the interpreter in order to be
understood by the arbitrator and the expenses of witnesses shall be born by the Party or Parties
producing such witnesses.
6) Decision. The decision of the arbitrator shall be binding on the
Parties and if the award of the arbitrator is not paid within sixty (60) days of the award it shall be
entered as a judgment in the Superior Court of the County. The arbitrator shall cause a complete
record of all proceedings to be prepared similar to those kept in the Superior Court, shall try all
issues of both fact and law, and shall issue a written statement of decision, such as that described
in Code of Civil Procedure Section 643 (or its successor), which shall specify the facts and law
relied upon in reaching his/her decision within twenty (20) days after the close of testimony.
(k) Fees and Costs. The total cost of the proceedings, including the
initiation fees and other fees of JAMS and any related costs and fees incurred by JAMS (such as
experts and consultants retained by it) shall be reallocated in accordance with the Federal
Arbitration Act and supporting case law, as determined by the arbitrator. The arbitrator shall not
award attorneys' fees to any Party, each Party to bear its own attorneys fees. The arbitrator may
award recoverable costs pursuant to California law. This provision does not modify any
provision of a contract between Declarant and any Declarant Party requiring indemnification or
establishing a different allocation of costs between Declarant and a Declarant Party.
12.4.6. Statutes of Limitation. Nothing in this Section 12.4 shall be
considered to toll, stay, reduce or extend any applicable statute of limitations; provided,
however, that Declarant, the Declarant Parties, the Community Association and any Owner may
commence a legal action which in the good faith determination of that Person is necessary to
preserve that Person's rights under any applicable statute of limitations so long as no further
steps in processing the action are taken except those authorized in this Section 12.4.
12.4.7. Agreement to Dispute Resolution; Waivers of Jury Trial.
DECLARANT, THE COMMUNITY ASSOCIATION AND EACH OWNER AGREE TO USE
THE PROCEDURES ESTABLISHED IN THIS SECTION 12.4 TO RESOLVE ALL
DISPUTES AND RIGHT TO REPAIR LAW CLAIMS AND WAIVE THEIR RIGHTS TO
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RESOLVE DISPUTES AND RIGHT TO REPAIR LAW CLAIMS IN ANY OTHER
MANNER. DECLARANT, THE COMMUNITY ASSOCIATION AND EACH OWNER
ACKNOWLEDGE THAT BY AGREEING TO RESOLVE ALL DISPUTES AND RIGHT TO
REPAIR LAW CLAIMS AS PROVIDED IN THIS SECTION 12.4, THEY ARE GIVING UP
THEIR RIGHT TO HAVE DISPUTES AND RIGHT TO REPAIR LAW CLAIMS TRIED
BEFORE A JURY. THIS SECTION 12.4 MAY NOT BE AMENDED WITHOUT
DECLARANT'S PRIOR WRITTEN CONSENT.
12.4.8. Covenant Regarding Proceeds. If the Community Association or any
Owner prevails in a Dispute or Right to Repair Law Claim, and the judgment thereon or
settlement terms thereof includes a monetary award, then the proceeds of the award shall be first
applied to cure or remedy the condition that gave rise to the Dispute or Right to Repair Law
Claim.
ARTICLE XIII
DURATION AND AMENDMENT
13.1 DURATION. This Community Declaration shall continue in full force unless a
Community declaration of termination satisfying the requirements of an amendment to this
Community Declaration established in Section 13.2 is Recorded.
13.2 TERMINATION AND AMENDMENT.
13.2.1. Amendment Approval. Notice of the subject matter of a proposed
amendment to this Community Declaration, a Notice of Addition or a Supplemental Community
Declaration, in reasonably detailed form, must be included in the notice of any Community
Association meeting or election at which a proposed amendment is to be considered. To be
effective, a proposed amendment (other than amendment or termination by Declarant as
described in Section 13.2.7(a) or minor corrections by Declarant or by the Board, as described in
Sections 13.2.7(b) or 13.2.8 respectively) must be adopted by the vote, in person or by proxy, or
written consent of Owners representing not less than (a) sixty-seven percent (67%) of the voting
power of each Class of the Community Association and (b) sixty-seven percent (67%) of the
Community Association's voting power represented by Owners other than Declarant and
Participating Builders, provided that the specified percentage of the Community Association's
voting power necessary to amend a specific provision of this Community Declaration may not be
less than the percentage of affirmative votes prescribed for action to be taken under the provision
that is the subject of the proposed amendment.
13.2.2. Mortgagee Consent. In addition to the consents required by
Section 13.2.1, the Mortgagees of fifty-one percent (51%) of the first Mortgages on all the Lots
in the Community who have requested the Community Association notify them of proposed
action requiring the consent of a specified percentage of first Mortgagees must approve any
amendment to this Community Declaration, any Notice of Addition and any Supplemental
Community Declaration; which is of a material nature, as follows:
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(a) Any amendment which affects or purports to affect the validity
or priority of Mortgages or the rights or protection granted to Mortgagees, insurers or guarantors
of first Mortgages.
(b) Any amendment which would require a Mortgagee after it has
acquired a Lot through foreclosure to pay more than its proportionate share of any unpaid
Assessment or Assessments accruing before such foreclosure.
(c) Any amendment which would or could result in a Mortgage
being canceled by forfeiture, or in a Lot not being separately assessed for tax purposes.
(d) Any amendment relating to (i) the insurance provisions in
Article VIII, (ii) the application of insurance proceeds in Article IX, or (iii) the disposition of any
money received in any taking under condemnation proceedings.
(e) Any amendment which would restrict an Owner's right to sell or
transfer his or her Lot.
(f) Any amendment which would subject any Owner to a right of
first refusal or other such restriction, if such Lot is proposed to be transferred.
13.2.3. Declarant Approval of Certain Amendments.
(a) Amendment of Right to Repair Law Provisions. Neither this
Section 13.2.3 nor Sections 2.1.3, 3.30, 4.2.8, 4.5, 12.1.7, 12.4, 13.2.6 or 13.2.8 may be amended
or deleted without the prior written approval of Declarant until the expiration of all applicable
statutes of limitation or repose for the filing of a complaint or suit or other legal remedies against
Declarant or Participating Builders, or their respective affiliates, under the Right to Repair Law
(including tolling periods).
(b) Amendment of Provisions Concerning Community
Recreational Facilities. No provision of the Governing Documents concerning the Community
Recreational Facilities, the Community Recreational Facilities Purchase Agreement or the
Community Recreational Facilities Note may be amended or deleted without the prior written
approval of Declarant.
13.2.4. Termination Approval. Termination of this Community Declaration
requires approval of the Owners as provided in Section 13.2.1, and the prior written approval of
Declarant until the expiration of all applicable statutes of limitation or repose for the filing of a
complaint or suit or other legal remedies against Declarant or Participating Builders, or their
respective affiliates, under the Right to Repair Law (including tolling periods).
13.2.5. Notice to Mortgagees. Each Mortgagee of a first Mortgage on a Lot in
the Community which receives proper written notice of a proposed amendment or termination of
this Community Declaration, any Notice of Addition or any Supplemental Community
Declaration with a return receipt requested is deemed to have approved the amendment or
termination if the Mortgagee fails to submit a response to the notice within thirty (30) days after
the Mortgagee receives the notice.
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13.2.6. Certificate. A copy of each amendment must be certified by at least
two (2) Community Association officers. The amendment becomes effective when a Certificate
of Amendment is Recorded. The certificate, signed and sworn to by two (2) Community
Association officers that the requisite number of Owners and Mortgagees have approved the
amendment, when Recorded, is conclusive evidence of that fact. The Community Association
shall keep in its files for at least four (4) years the record of all such approvals. The certificate
reflecting any termination or amendment which requires the written consent of any of the
Mortgagees of first Mortgages must include a certification that the requisite approval of such
first Mortgagees was obtained.
13.2.7. Amendment or Termination by Declarant.
(a) Before First Closing. Notwithstanding any other provisions in
this Article, (i) Declarant may unilaterally amend or terminate this Community Declaration for
any purpose, until the first Close of Escrow in the Community, and (ii) Declarant may
unilaterally amend or terminate a Notice of Addition or Supplemental Community Declaration
for any purpose, until the first Close of Escrow in the real property affected by the Notice of
Addition or Supplemental Community Declaration to be amended or terminated. Amendment or
termination shall not be effective until Declarant has Recorded in the Official Records an
instrument signed and acknowledged by Declarant.
(b) Minor Corrections. Notwithstanding any other provisions of
this Article, Declarant (as long as Declarant owns any portion of the Community or the
Annexable Territory) may unilaterally amend this Community Declaration, a Notice of Addition
or a Supplemental Community Declaration by Recording a written instrument signed by
Declarant to: (1) conform this Community Declaration or any Notice of Addition or
Supplemental Community Declaration to the rules, regulations or requirements of VA, FHA,
DRE, Fannie Mae, Ginnie Mae, Freddie Mac, the City or County, (2) amend, replace or
substitute any exhibit to correct typographical or engineering errors, (3) comply with any City,
County, State or Federal laws or regulations, (4) correct typographical errors, (5) supplement this
Community Declaration with provisions which pertain to rights and obligations of Declarant,
Participating Builders, the Community Association or Owners arising under the Right to Repair
Law, (6) re -Phase any Phase of the Community in which no escrows have closed, and (7) change
any exhibit or portion of an exhibit to conform to as -built conditions.
Nothing in this Section 13.2.7 may be amended or terminated without the prior
written approval of Declarant.
13.2.8. Minor Corrections by the Board. The Board may amend this
Community Declaration, a Notice of Addition or a Supplemental Community Declaration for the
reasons stated in parts (2), (3), (4) or (7) of Section 13.2.7(b) above by Recording a written
instrument signed by two officers of the Community Association certifying that the Board
approved the amendment for the purposes described therein. However, until the end of all
applicable statutes of limitation or repose for the filing of a complaint or suit or other legal
remedies against Declarant or its affiliates under the Right to Repair Law (including tolling
periods), the Board must obtain the prior written approval of Declarant to any amendment
approved by the Board, or any other amendment by the Board or Community Association that
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affects the rights of Declarant under the Right to Repair Law, this Community Declaration or any
Supplemental Community Declaration or Notice of Addition, or for any amendment by the
Board concerning matters discussed in Article III or Article XV.
ARTICLE XIV
GENERAL PROVISIONS
14.1 MERGERS OR CONSOLIDATIONS. In a merger or consolidation of the
Community Association with another association, the property, rights and obligations of the
Community Association may, by operation of law, be transferred to another surviving or
consolidated association or, alternatively, the property, rights and obligations of another
association may, by operation of law, be added to the property, rights and obligations of the
Community Association as a surviving corporation pursuant to a merger. The surviving or
consolidated association may administer and enforce this Community Declaration, together with
the covenants and restrictions established on any other property, as one plan.
14.2 NO PUBLIC RIGHT OR DEDICATION. Nothing in this Community
Declaration is a gift or dedication of all or any part of the Community to the public, or for any
public use.
14.3 NOTICES. Except as otherwise provided in this Community Declaration, notice
to be given to an Owner must be in writing and may be delivered personally to the Owner.
Personal delivery of such notice to one (1) or more co -Owners, or any general partner of a
partnership owning a Lot, constitutes delivery to all Owners. Personal delivery of such notice to
any officer or agent for the service of process on a corporation or limited liability company
constitutes delivery to the corporation or limited liability company. Such notice may also be
delivered by regular United States mail, postage prepaid, addressed to the Owner at the most
recent address furnished by such Owner to the Community Association or, if no such address has
been furnished, to the street address of such Owner's Lot. Such notice is deemed delivered three
(3) business days after the time of such mailing, except for notice of a meeting of Owners or of
the Board, in which case the notice provisions of the Bylaws control. Any notice to be given to
the Community Association may be delivered personally to any member of the Board, or sent by
United States mail, postage prepaid, addressed to the Community Association at such address as
may be fixed and circulated to all Owners.
14.4 CONSTRUCTIVE NOTICE AND ACCEPTANCE. Every Person who owns,
occupies or acquires any right, title, estate or interest in or to any Lot or other portion of the
Community consents and agrees to every limit, restriction, easement, reservation, condition and
covenant contained in this Community Declaration, whether or not any reference to these
restrictions is in the instrument by which such Person acquired an interest in the Community. As
soon as practicable before sale or transfer of title to a Lot or other separate interest in the
Community or execution of a real property sales contract therefor, the Owner of the Lot or other
separate interest shall provide to the purchaser copies of the Governing Documents listed in
California Civil Code Section 1368(a) and its successor statutes.
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ARTICLE XV
DECLARANT'S AND PARTICIPATING BUILDERS' RIGHTS, EXEMPTIONS, AND
RESERVATIONS
If there is a conflict between any other portion of the Governing Documents and this
Article, this Article shall control.
15.1 CONSTRUCTION RIGHTS. Until neither Declarant nor any Participating
Builder owns any portion of the Community or the Annexable Territory, Declarant and
Participating Builders (with Declarant's prior written consent) each has the right, without
obtaining the approval of the Community Association, to (a) subdivide or re -subdivide the
portions of the Community owned by Declarant or the Participating Builder, (b) complete or
modify Improvements in the Community Common Property, or in any portion of the Community
or Annexable Territory that is owned or leased solely or partially by Declarant or the
Participating Builder, (c) alter Improvements and construction plans and designs, (d) modify
development plans for the Community and the Annexable Territory, including designating and
redesignating Phases, reshaping the Lots and Community Common Property, and constructing
dwellings of larger or smaller sizes, values, and of different types, (e) modify, extend, postpone
or terminate the annexation of any or all of the Annexable Territory, or the completion of the
Community, for any purpose, including changed economic conditions, changes in Declarant's or
Participating Builder's business plans or other factors determined by Declarant or Participating
Builder in their respective sole discretion, and (f) construct additional or different Improvements,
all as Declarant or such Participating Builder considers advisable in the course of development of
the Community. Declarant and Participating Builders may temporarily erect barriers, close off
and restrict access to portions of the Community Common Property as reasonably necessary to
allow Declarant and Participating Builders to exercise the rights reserved in this Section so long
as an Owner's access to that Owner's Lot is not eliminated.
15.2 SALES AND MARKETING RIGHTS. Declarant and Participating Builders
with Declarant's prior written consent shall each have the following rights related to sales and
marketing, all of which may be exercised unilaterally by Declarant or Participating Builders in
Declarant's sole discretion. The rights reserved in this Section will terminate on the date of the
last Close of Escrow for sale of a Lot in the Community and Annexable Territory.
15.2.1. Marketing and Sales Facilities. Declarant's and Participating
Builders' rights under this Community Declaration include the right to install and maintain such
structures, displays, signs, billboards, flags and sales offices in the Community, and the right to
use any land, Lots or mobile homes owned or leased by Declarant or Participating Builders in the
Community for model home purposes, or for the operation of real estate sales offices or leasing
offices, all as may be reasonably necessary to conduct the business of completing construction
and disposing of the Lots by sale, resale, lease or otherwise.
15.2.2. Use of Community Recreational Facilities. Declarant reserves for its
benefit, the right to use and occupy portions of the Community Recreational Facilities as
necessary to the promotion and advertising of the Community and the marketing of Lots in the
Community, including visits and special events for prospective or new purchasers. The
reservation of such rights shall be effective until the last Close of Escrow for a Lot in the
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Community and Annexable Territory. The right to use and occupy the Community Recreational
Facilities shall be in accordance with reasonable terms of a lease, license, permit, or other written
agreement entered into with the Community Association for such purpose; provided, however,
that Declarant may not make any use or occupancy of any portion of the Community
Recreational Facilities that would unreasonably interfere with the use and enjoyment thereof by
the Owners or their Families, tenants and invitees.
15.2.3. Use of Community Common Area. Declarant reserves for its benefit,
and for the benefit of its prospective purchasers of Lots who are entitled to the nonexclusive use
of the Community Common Area owned in fee simple by the Community Association, without
further cost for access, ingress, egress, use or enjoyment, the right to (a) show the Community to
prospective purchasers, (b) dispose of the Community as provided in this Community
Declaration, and (c) develop and sell the Annexable Territory. Declarant, its employees, agents
and prospective purchasers are also entitled to the nonexclusive use of private streets, drives and
walkways for ingress, egress and vehicle parking as necessary in connection with the marketing
and sale of the Lots. Neither Declarant, nor its employees, agents nor prospective purchasers
shall make any use of the Community Common Area that will unreasonably interfere with the
use and enjoyment thereof by the Owners or their Families, tenants and invitees.
15.3 CREATING ADDITIONAL EASEMENTS. At any time before the Close of
Escrow for a Lot, Declarant and Participating Builders each reserve the right to establish on that
Lot additional licenses, easements, reservations and rights -of -way to itself, to utility companies,
or to others as Declarant or Participating Builders determine are reasonably necessary to the
proper development and disposal of the Community and Annexable Territory.
15.4 DESIGN REVIEW RIGHTS AND EXEMPTIONS. Declarant, Participating
Builders, and any Person to whom Declarant may assign all or a portion of its exemption under
this Community Declaration need not seek or obtain Design Review Committee approval of any
Improvements constructed anywhere in the Community by Declarant, Participating Builders, or
such Person. Declarant may exclude portions of the Community from jurisdiction of the Design
Review Committee in the applicable Notice of Addition or Supplemental Community
Declaration. Declarant, may establish one or more additional design review bodies and design
review criteria for any area exempted by Declarant from the jurisdiction of the Design Review
Committee.
15.5 DEVELOPMENT EXEMPTIONS. Declarant and Participating Builders each
are exempt from the application of Article 2 of this Community Declaration and from all other
restrictions on the use and enjoyment of real property and all maintenance covenants that are
established for Owners, residents, invitees, Families and tenants under this Community
Declaration, or in a Notice of Addition, a Supplemental Community Declaration or in any other
Governing Documents, except to the extent that a particular provision expressly includes
Declarant or Participating Builders, as applicable, among the parties covered thereby.
15.6 ASSIGNMENT OF RIGHTS. All or any portion of the rights of Declarant or a
Participating Builder, as applicable, hereunder and elsewhere in these Governing Documents
may be assigned by Declarant or such Participating Builder (with Declarant's consent), as
applicable, to any successor in interest to any portion of Declarant's or Participating Builder's
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interest in any portion of the Community or the Annexable Territory (including, without
limitation, to any Participating Builder) by an express written assignment which specifies the
rights of Declarant or such Participating Builder so assigned.
15.7 AMENDMENT. No amendment may be made to this Article without the prior
written approval of Declarant.
15.8 POWER OF ATTORNEY. Each Owner of a Lot in the Community, by
accepting a deed to a Lot, shall be deemed to have (a) agreed and acknowledged that the Owners
own no interest in the Annexable Territory which may be developed, if at all, by Declarant in its
sole and absolute discretion and (b) constituted and irrevocably appointed Declarant, for so long
as Declarant owns all or any portion of the Annexable Territory, as his Attorney -in -Fact, for
himself and -each of his Mortgagees, optionees, grantees, licensees, trustees, receivers, lessees,
tenants, judgment creditors, heirs, legatees, devisees, administrators, executors, legal
representatives, successors and assigns, whether voluntary or involuntary, and thereby to have
conveyed a Power of Attorney coupled with an interest to Declarant as his Attorney in Fact to
prepare, execute, acknowledge and Record any instrument for all or any portion of the
Annexable Territory. However, nothing set forth herein shall be deemed or construed as an
agreement by Declarant that any Owner shall be entitled to any participation in or discretion over
the preparation and Recordation of an instrument for all or any portion of the Annexable
Territory. The acceptance or creation of any Mortgage or other encumbrance, whether or not
voluntary, created in good faith, or given for value, shall be deemed to be accepted or created
subject to each of the terms and conditions of the Power of Attorney described in this Section.
15.9 PARTICIPATION IN COMMUNITY ASSOCIATION. The Community
Association shall provide Declarant with written notice of the transfer of any Lot and all notices
and other documents to which a Mortgagee is entitled pursuant to this Community Declaration,
provided that Declarant shall not be required to make written request for such notices and other
documents. Commencing on the date on which Declarant no longer has a representative on the
Board, the Community Association shall provide Declarant with written notice of all meetings of
the Board that any Owner is entitled to attend (each, an "Open Meeting") as if Declarant were an
Owner, and Declarant shall be entitled to have a representative ("Declarant's Representative")
present at all Open Meetings. However, the Board has the power to withhold information from
the Declarant's Representative and to exclude the Declarant's Representative from any Open
Meeting or portion thereof if, in the good faith judgment of the Board, access to such information
or attendance at the Open Meeting would adversely affect the attomey-client privilege between
the Community Association and its counsel or if, in the good faith judgment of the Board, access
to such information or attendance at an Open Meeting would not be in the best interest of the
Community Association or the Owners. The Declarant's Representative shall not be entitled to
attend executive sessions of the Board. The Declarant's Representative will attend any Open
Meeting it is permitted to attend in an observer capacity only, and it shall not have any right to
vote on matters coming before the Board or Owners. Declarant's Representative shall be entitled
to receive copies of the minutes of all Open Meetings: The Declarant's rights to receive written
notice of meetings and to have a Declarant's Representative present at such meeting shall
continue until the later of the date that is ten (10) years after the first Close of Escrow in the
Community, or the date of expiration of all applicable statutes of limitations or repose for the
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filing of a complaint or suit or other legal remedies against Declarant under the Right to Repair
Law (including any tolling periods).
15.10 DECLARANT APPROVAL OF ACTIONS.
15.10.1. General Rights. The Initial Covered Property is a portion of a larger
parcel of land which Declarant is developing into a master -planned Community. Declarant, in
cooperation with the County, has created a comprehensive plan for the development of the
Community which includes modern master -planning objectives which have been formulated for
the common good and preservation of property values within the Community. Declarant and
Participating Builders intend to construct Residences and further improve all of the Lots in the
Community. The completion of the work by Declarant and Participating Builders, and the sale
and resale of Lots in the Community, is essential to the establishment and welfare of the
Community as a quality residential Community. Each Owner of a Lot which is part of the
Community acknowledges by acceptance of a deed or other conveyance therefor, whether or not
it shall be so expressed in any such deed or other instrument, that Declarant and Participating
Builders have substantial interests in assuring compliance with, and enforcement of, the
covenants, conditions, restrictions and reservations contained in this Community Declaration and
any amendments thereto and any Notices of Addition and Supplemental Community
Declarations Recorded pursuant to this Community Declaration.
15.10.2. Limits on Actions. Until the expiration of all applicable statutes of
limitations or repose for the filing of a complaint or suit or other legal remedies against Declarant
under the Right to Repair Law (including any tolling periods), the following actions, before
being undertaken by the Community Association, must first be approved in writing by Declarant
(a) Any amendment or action requiring the approval of first
Mortgagees;
(b) The annexation to the Community of real property other than the
Annexable Territory pursuant to Section 16.2;
(c) The levy of a Capital Improvement Assessment for the
construction of new facilities not constructed on the Community Common Area by Declarant;
(d) Any significant reduction of Community Association
maintenance or other services;
(e) Any modification or termination of any provision of the
Governing Documents benefiting Declarant or Participating Builders.
15.11 DECLARANT'S RIGHTS AFTER SALE OF ALL LOTS IN THE
COMMUNITY. For a period of ten (10) years following the last Close of Escrow in the
Community, in addition to Declarant's rights as an Owner and as a Member, Declarant shall
have the following rights: (a) access to and the right to inspect the books and financial records of
the Community Association; (b) access to and the right to inspect the Community Association
Governing Documents; (c) access to and the right to inspect the maintenance records of the
Community Association; (d) access to and the right to inspect the Community Common
-103-
5624-84058\CCRS\552191.15
6/8/11
Property; (e) right to receive notice of, attend and speak at all regular and special meetings of the
Board and meetings of the Members; and (f) right to receive copies of the minutes of Board
meetings and meetings of Members, upon request and payment of the actual costs to copy and
distribute such records and documents.
15.12 MARKETING NAME. The Community shall be marketed under the general
name "Audie Murphy Ranch." Declarant may change the marketing name of the Community or
designate a different marketing name for any Phase at any time in Declarant's sole discretion.
Declarant shall notify the DRE of any change in or addition to the marketing name or names of
the Community or any Phase.
ARTICLE XVI
ANNEXATION OF ADDITIONAL PROPERTY
Additional real property may be annexed to the Community and become subject to this
Community Declaration by any of the following methods:
16.1 ADDITIONS BY DECLARANT OR PARTICIPATING BUILDERS.
Declarant, and Participating Builders with Declarant's consent, may add the Annexable Territory
or any portion thereof to the Community and bring such added territory under the general plan of
this Community Declaration without the approval of the Community Association, the Board, or
Owners, so long as Declarant or a Participating Builder owns any portion of the Annexable
Territory. No amendment to this Section 16.1 may be made without the prior written approval of
Declarant.
16.2 OTHER ADDITIONS. Additional real property may be annexed to the
Community and brought under the general plan of this Community Declaration upon the
approval by vote or written consent of Members entitled to exercise no less than two-thirds (2/3)
of the Community Association's voting power.
16.3 RIGHTS AND OBLIGATIONS -ADDED TERRITORY. Subject to the
provisions of Section 16.4, when a Notice of Addition containing the provisions required by
Section 16.4 is Recorded, all provisions in this Community Declaration will apply to the real
property described in such Notice of Addition (the "Added Territory's in the same manner as if
the real property were originally covered by this Community Declaration. Thereafter, the rights,
powers and responsibilities of the Owners, lessees and occupants of Lots in the Added Territory,
as well as in the property originally subject to this Community Declaration, will be the same as if
the Added Territory were originally covered by this Community Declaration. After the first day
of the month following the first Close of Escrow in the Added Territory, the Owners of Lots
located in the Added Territory shall share in the payment of Assessments to the Community
Association to meet Common Expenses of the Community. Voting rights attributable to the Lots
in the Added Territory may not be exercised until Annual Assessments have commenced on such
Lots.I
16.4 NOTICE OF ADDITION. The additions authorized under Sections 16.1 and
16.2 must be made by Recording in Official Records a Notice of Addition against the real
property to be added to the coverage of this Community Declaration. The Notice of Addition
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6/8/] 1
must (a) reference by instrument number this Community Declaration and the date of its
Recordation, (b) describe with _specificity the Added Territory, (c) state that this Community
Declaration shall apply to the Added Territory, (d) describe the land use designations in the
Added Territory, and (e) identify Lots in the Added Territory that are subject to any Special
Benefit Area. The Notice of Addition for any addition under Section 16.1 must be signed by
Declarant, and by the Participating Builder, if applicable. The Notice of Addition for any
addition under Section 16.2 must be signed by at least two (2) officers of the Community
Association to certify that the Owner approval required under Section 16.2 was obtained. On
Recordation of the Notice of Addition, the Added Territory will be annexed to and constitute a
part of the Community and will become subject to this Community Declaration. Subject to
Section 16.3, the Owners of Lots in the Added Territory will automatically acquire Membership.
No Notice of Addition or Supplemental Community Declaration may revoke the covenants,
conditions, restrictions, reservation of easements, or equitable servitudes in this Community
Declaration as the same pertain to the real property originally covered by this Community
Declaration.
16.5 DE -ANNEXATION AND AMENDMENT. In addition to the rights to amend
or terminate a Notice of Addition granted elsewhere in this Community Declaration or in a
Notice of Addition, Declarant (or Declarant and a Participating Builder acting together if the
Phase is owned by a Participating Builder) may also amend a Notice of Addition for purposes
other than those described in Section 13.2.7, or delete all or a portion of a Phase from coverage
of this Community Declaration and the Community Association's jurisdiction so long as
Declarant or Participating Builder is the owner of all of such Phase and provided that (a) an
amending instrument or a Notice of Deletion of Territory, as applicable, is Recorded in the same
manner as the applicable Notice of Addition was Recorded, (b) Declarant has not exercised any
Community Association vote with respect to any portion of such Phase, (c) Assessments have
not yet commenced with respect to any portion of such Phase, (d) Close of Escrow has not
occurred for the sale of any Lot in such Phase, and (e) the Community Association has not made
any expenditures or incurred any obligations with respect to any portion of such Phase. No
Amendment of this Section 16.5 may be made without the prior written approval of Declarant.
ARTICLE XVII
CITY -REQUIRED PROVISIONS
As a condition approving the Community, the City has required the following covenants,
conditions and restrictions:
17.1 TERM. Notwithstanding anything in this Community Declaration to the
contrary, this Community Declaration shall remain in effect for a term of sixty (60) years, with
automatic renewals of ten (10) years each thereafter, until terminated.
17.2 COUNTY RESTRICTIONS. Notwithstanding any provisions in this
Community Declaration to the contrary, the following provisions shall apply:
17.2.1. The Community Association established herein shall manage and
continuously maintain the Community Common Area, more particularly described in Section
1.1.18 of this Community Declaration and the Community Association Maintenance Areas as
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5624-84058\CCRS\552191.15
6/8/11
shown on Exhibit G attached hereto, and shall not sell or transfer the Community Common Area
or any part thereof, absent the prior written consent of the Planning Director of the City or its
successor -in -interest.
17.2.2. The Community Association shall have the right to assess the Owners of
each individual Lot for the reasonable cost of maintaining such Community Common Area, and
shall have the right to lien the property of any such Owner who defaults in the payment of a
maintenance assessment. An assessment lien, once created, shall be prior to all other liens
recorded subsequent to the notice of assessment or other document creating the assessment lien.
17.2.3. This Community Declaration shall not be terminated, "substantially"
amended or property deannexed therefrom absent the prior written consent of the Planning
Director of the City or its successor -in -interest. A proposed amendment shall be considered
"substantial" if it affects the extent, usage or maintenance of the Community Common Area.
17.2.4. In the event of any conflict between this Community Declaration and
the Articles of Incorporation, the Bylaws, or the Community Association Rules and Regulations,
if any, this Community Declaration shall control.
17.2.5. Roof -mounted mechanical equipment shall not be permitted in the
Community, except that solar equipment or any other energy saving devices shall be permitted
with City Planning Department approval.
17.3 ADDITIONAL PROVISIONS. Notwithstanding any provision in this
Community Declaration to the contrary, the following provisions shall apply:
17.3.1. The Community Association shall unconditionally accept from the City,
upon the City's demand, title to all or any part of the Maintenance Areas. Such acceptance shall
be through the president of the Community Association, who shall be authorized to execute any
documents required to facilitate transfer of the Maintenance Areas. The decision to require that
the Community Association unconditionally accept title to the Maintenance Areas shall be at the
sole discretion of the City.
17.3.2. In the event that the Maintenance Areas or any part thereof, is conveyed
to the Community Association, the Community Association, thereafter, shall own such
Maintenance Areas, shall manage and continuously maintain such Maintenance Areas, and shall
not sell or transfer such Maintenance Areas or any part thereof, absent the prior written consent
of the Planning Director of the County of Riverside or the County's successor -in -interest. The
Community Association shall have the right to assess the owner of each individual lot for the
reasonable cost of maintaining such Maintenance Areas, and shall have the right to lien the
property of any such owner who defaults in the payment of a maintenance assessment. An
assessment lien, once created, shall be prior to all other liens recorded subsequent to the notice of
assessment or other document creating the assessment lien.
[SIGNATURES ON FOLLOWING PAGE]
-106-
5 624-84058\CCRS\552191.15
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[SIGNATURE PAGE TO COMMUNITYDECLARATION OF COVENANTS, CONDITIONS AND
RESTRICTIONS AND RESERVATION OF EASEMENTS]
This Community Declaration is dated for identification purposes
, 2011.
SUTTER MITLAND 01, LLC,
a Delaware limited liability company
Print Na€ne-, rk e .1 ,� C�-�,y�c•�.a...-_
Title:
By:
Print Name:•,
Title:
Declarant
NOTARIAL ACKNOWLEDGMENTS AND FURTHER SIGNATURES ON FOLLOWING PACES]
5624-84058\CCRS\552191.15
6/8/11
STATE OF CALIFORNIA
COUNTY OF ORANGE
On � .fin $ ol l ,before me, . P. {-En e A'&, L . r_n t. n �i # �-, PIClol.
(here insert name and title of the officer)
personally appeared l N: 01 A AJ
who proved to me on the basis of satisfactory evidence to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument the person, or the
entity upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS4n7t=d and official seal
CATHERINE t. MARSH
Commisslon # 1789165
Notary Public California zZ
= Orange County
MyComm. Does Feb 14, 2012 SEAL)
STATE OF CALIFORNIA
COUNTY OF ORANGE
On g i s , before me, rlRC /L.rua L. �4A/l 4
I II n (here insert name and firofthe offrecr
personally appeared}-c'
who proved to me on the basis of satisfactory evidence to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed the same in
his/frer authorized capacity, and that by his/her signature on the instrument the person, or the
entity upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
my han&4nd official seal.
CATHERINE L. MARSH
Commisslon # 1789165
-m Notary Public - California =
Orange County £
MyComm. Expires Feb 14,221 L)
5624-8405 8\CCRS\552191.15
6/8/11
EXHIBIT A-1
LEGAL DESCRIPTION OF ANNEXABLE TERRITORY
Parcel 1 (Canyon Cove)
Tentative Tract No. 32025, lying within the Southeast quarter of
Section 6, Township 6 South, Range 3 West, SBM.
Parcel 2 (Future Tracts 31390, 31390-1, 31390-2, 31391, 31391-1, 31391-2, 31391-3, 31391-
4, 31392, 31393, 31822, 31822-1, 31822-2, 31823, 31824, 31824-1, 31824-2, 31824-3, 31824-4,
31824-5, 31824-6, 31824-7)
Parcels 1 through 24 of Parcel Map 32269, as shown on a Parcel
Map recorded in Book 221, pages 13 through 24, inclusive, of
Parcel Maps in the Office of the Riverside County Recorder.
EXCEPTING THEREFROM, the Initial Covered Property
described on Exhibit D.
All as approximately shown on Exhibit A-2.
5 624-84058\CCRS\552191.15
6/8/11
EXHIBIT A-2
APPROXIMATE LOCATIONS OF ANNEXABLE TERRITORY
5624-84058\CCRS\552191 . 15
6/8/11
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EXHIBIT B
ARTICLES OF INCORPORATION OF THE COMMUNITY ASSOCIATION
5 624-84058 \CCRS\552191.15
6/8/11
2974391
State of California
Secretary of State
I, DEBRA BOWEN, Secretary of State of the State of
California, hereby certify:
That the attached transcript of page(s) has been compared
with the record on file in this office, of which it purports to be a copy, and
that it is full, true and correct.
IN WITNESS WHEREOF, I execute this
certificate and affix the Great Seal of the
State of California this day of
MAR 2 4 2007
/ In &-Erl��
-
DEBRA BOWEN
Secretary of State
Sec/State Form CE-107 (REV 112007) OSP06 99734
2914391
ARTICLES OF INCORPORATION
OF
ENDORSED - FILED
io the offiCe of the `,secretary of State
of the State of California
MAR I g 2W
AUDIE MURPHY RANCH COMMUNITY ASSOCIATION
ONE: The name of this corporation is AUDIE MURPHY RANCH
COMMUNITY ASSOCIATION (the "Corporation').
TWO: The Corporation is a nonprofit public benefit corporation and is not
organized for the private gain of any person. It is organized under the Nonprofit Public Benefit
Corporation Law for public purposes. The purpose of the Corporation is to promote the common
good and general welfare of the Audie Murphy Ranch community and the management of a
common interest development under the Davis -Stirling Common Interest Development Act.
THREE: The Corporation is organized and operated exclusively for the social
welfare purposes within the meaning of Section 501(c)(4) of the Internal Revenue Code of 1986,
as amended, and Section 23701f of the California Revenue and Taxation Code and shall have
and exercise any and all powers, rights and privileges which a corporation organized under the
Nonprofit Public Benefit Corporation Law may now or hereafter have or exercise, provided that
the Corporation shall not, except to an insubstantial degree, engage in any activities or exercise
any powers that are not in furtherance of the specific purpose of the Corporation, which is to
manage a common interest development under the Davis -Stirling Common Interest Development
Act.
No part of the activities of this Corporation shall consist of lobbying or
propaganda, or otherwise attempting to influence federal, state or local legislation of any type.
This Corporation shall not participate in or intervene in any political campaign (including
publishing or distributing statements) on behalf of or in opposition to any candidate for political
office or any proposed legislation.
FOUR: The Corporation's initial agent for service of process is Tim
McGinnis, whose business address is c/o Woodside Homes, 11870 Pierce Street, Suite 100,
Riverside, California 92505.
FIVE: The Corporation has no managing agent. The Corporation does not
have a corporate office. The common interest development is near the intersection of Goetz
Road and Railroad Canyon Road, Riverside County, California 92584-0000.
SIX: The classes of Membership and the voting and other rights and
privileges of members shall be as set forth in the Bylaws of the Corporation.
SEVEN: The Corporation's assets are irrevocably dedicated to social welfare
purposes. No part of the profits shall ever inure to the benefit of a director, officer, or any
private shareholder, member or individual. On a dissolution or a winding up of the Corporation,
its assets remaining after payment of, or provision for the payment of, all debts and liabilities of
the Corporation shall be distributed to a nonprofit organization that is organized and operated
exclusively for charitable or social welfare purposes and that has established its tax exempt status
under Internal Revenue Code Section 501(c)(3) or Section 501(c)(4).
3919-34625\ARTINCRP\ 560380 2
3/5/07
The undersigned, who is the incorporator of the Corporation, has executed these
Articles of Incorporation on March 32007.
Dennis Chapma , Incorporator
3919-34625\4RTINCRP\ 560380.2
3/5/07
EXHIBIT C
BYLAWS OF THE COMMUNITY ASSOCIATION
5 624-84058\CCRS\552191.15
6/8/11
BYLAWS
OF
AUDIE MURPHY RANCH COMMUNITY ASSOCIATION
3919-346251BYLAWS1560387.4
315107
TABLE OF CONTENTS
FOR BYLAWS
.m
AUDIE MURPHY RANCH COMMUNITY ASSOCIATION
DESCRIPTION PAGE
ARTICLE I GENERAL PLAN........................................................................................... 1
1.1
NAME................................................................ .................. ................................. 1
1.2
DEFINITIONS AND INTERPRETATION..........................................................1
1.3
COMMUNITY ASSOCIATION RESPONSIBILITIES ....................................... I
1.4 `
APPLICATION..............................................................................................
1
1.5
LIMITS..................................................................................................................
1
ARTICLE II
BOARD OF DIRECTORS.............................................................................. 2
2.1
NUMBER.............................................................................................................. 2
2.2
QUALIFICATIONS .......... :................................................................................... 2
2.3
TERM OF OFFICE...................................•---.•---...................................................
3
2.4
ELECTIONS .............................................. ...... ........... ............. ..3
2.5
REPLACEMENT MEETINGS.............................................................................
4
2.6
VACANCIES...................................................................................I.....................5
2.7
REMOVAL OF DIRECTORS.............................................................. ............
5
2.8
GENERAL POWERS AND DUTIES...................................................................
6
2.9
SPECIAL POWERS AND DUTIES..................................:..................................
6
2.10
BOOKS, AUDIT....................................................................................................
9
2.11
COMPENSATION ....... :......................................................................................
14
2.12
MEETINGS .................... ..............14
2.13
ACTION WITHOUT MEETING. ................ ........... ..........................................
16
2.14
QUORUM AND ADJOURNMENT...................................................................
16
2.15
COMMITTEES...'..... ... -- ....................................................................................
16
ARTICLE III
OFFICERS.............................................................................................:.......
17
3.1
DESIGNATION..................................................................................................17
3.2
ELECTION OF OFFICERS................................................................................
17
-i-
3919-34625\BXLAWS\ 560387.4
3/5/07
TABLE OF CONTENTS (Cont.)
DESCRIPTION
PAGE
3.3 REMOVAL OF OFFICERS................................................................................ 17
3.4 COMPENSATION............................................................................................... 17
3.5
PRESIDENT............................................................:..........................................
18
3.6
VICE PRESIDENT ............... ..................................... :.........................................
18
3.7
SECRETARY......................................................................................................18
3.8
TREASURER......................................................................................................19
ARTICLE IV
ACTIONS BY COMMUNITY ASSOCIATION OWNERS ....:...................
19
4.1
VOTING RIGHTS.......................................................................................:.......
19
4.2
ACTIONS BY ENTIRE MEMBERSHIP AT MEETING ..................................
21
4.3
ACTIONS BY THE ENTIRE MEMBERSHIP WITHOUT MEETING ............
24
ARTICLE V
AMENDMENTS......................................................................................
25
5.1
AMENDMENTS TO BYLAWS.......................................................4.................
25
5.2
AMENDMENTS TO ARTICLES......................................................................:
25
ARTICLE VI
MISCELLANEOUS......................................................................................
25
6.1
CONFLICTING PROVISIONS..........................................................................
25
6.2
CHECKS, DRAFTS AND DOCUMENTS.........................................................
25
6.3
EXECUTION OF DOCUMENTS.......................................................................
26
6.4
USE OF TECHNOLOGY.........................................•---......................................
26
6.5
AVAILABILITY OF COMMUNITY ASSOCIATION DOCUMENTS ...........
26
6.6
FISCAL YEAR....................................................................................................
27
ARTICLE VII
NOTICE AND HEARING PROCEDURE :...................:..............................
27
7.1
INITIAL COMPLAINT...................................................................4...................
27
7.2
SCHEDULING HEARINGS...........................................................................
27
7.3
CONDUCT OF HEARING.................................................................................
27
7.4
IMPOSITION OF SANCTIONS.........................................................................
28
7.5
LIMITS ON REMEDIES....................................................................................
28
-ii-
3919-346251BYLAWS1560387.4
3/5107
BYLAWS
.M
AUDIE MURPHY RANCH COMMUNITY ASSOCIATION
ARTICLE I
GENERAL PLAN
1.1 NAME. The name of the corporation is the Audie Murphy Ranch Community
Association (the "Community Association'. The -principal office of the Community
Association shall be located in Riverside County, California.
1.2 DEFINITIONS AND INTERPRETATION. Unless otherwise provided in
these Bylaws, the capitalized terms in these Bylaws have the same meanings as are given to such
terms in the Community Declaration of. Covenants, Conditions, Restrictions -and Reservation of
Easements for Audie Murphy Ranch (the "Community Declaration"). These Bylaws shall be
interpreted in accordance with Section 1.2 of the Community Declaration.
1.3 - COMMUNITY ASSOCIATION RESPONSIBILITIES. In accordance with
the Community Declaration, the Community Association is responsible for the following:
administering the Community, maintaining the Community Common Property, approving the
Budget, establishing and collecting all Assessments authorized under the Community
Declaration, providing overall architectural and landscaping control in the Community, and
enforcing the Governing Documents.
1.4 APPLICATION. The provisions of these Bylaws are applicable to the phased
Community planned community known as Audie Murphy Ranch, located in Riverside County,
California, All Persons occupying a Residence in the Community or using the facilities of the
Community in any manner are subject to the Governing Documents. By acquiring, renting or
occupying any Residence in the Community the Person doing so signifies that the Person agrees
to comply with the Governing Documents..
1.5 LIMITS.
1.5.1 Organization, Purpose and Activity. The Community Association is
organized exclusively for purposes within the meaning of Section 501(c)(4) of the Internal
Revenue Code ("IRC') and Section 23701f of the California Revenue and Taxation Code
("R & T') (or the corresponding provision of any future United States internal revenue law or
California -revenue and tax law). The speck purpose of the Community Association is to
promote the common good and general welfare of the Community within the meaning of Section
501(c)(4) of the IRC and Section 23701f of the R&T, ,and to manage a common interest
development under the Davis -Stirling Common Interest Development Act at California Civil
Code Section 1350, et seq. The Community Association shall not, except to an insubstantial
degree, engage in any activities or exercise any powers that are not in furtherance of the purposes
of the -Community Association. The Community Association shall not carry on any other
activities not permitted to be carried. on by a corporation exempt from federal income tax under
4-
39I9-34625SYLAWS1560397.4
3/5/07
Section 501(c)(4) of the IRC or the corresponding provision of any future United States internal
revenue law.
1.5.2 Political Activities. No part of the activities of the Community
Association shall consist of lobbying or propaganda, or otherwise attempting to influence
federal, state or local legislation of any type. The Community Association shall not participate
in or intervene in any political campaign (including publishing or distributing statements) on
behalf of or in opposition to any candidate for public office.
1.5.3 Assets and Property. The property, assets, profits,, and net income of the
Community Association are irrevocably dedicated to social welfare purposes. No part of the
earnings of the Community Association shall ever inure to the benefit of a director, officer,
private shareholder or member of the Community Association or to the benefit of any individual.
1.5.4 Not for Profit. The Community Association is not organized, and shall
not be operated, for pecuniary gain or profit.
1.5.5 Dissolution: The Community Association may only be dissolved upon
obtaining the approval of the Owners as provided in Section 4.1.3 of these Bylaws in accordance
with California Corporations Code Section 8724. On a dissolution or winding up of the
Community Association, its assets remaining after payment of, or. provision for the payment of,
all debts and liabilities of the Community Association, shall be distributed to a nonprofit
organization that is organized and operated exclusively for charitable or social welfare purposes
and that has established its tax-exempt status under Section 501(c)(3) or Section 501(c)(4) of the
IRC (or the corresponding provisions of any future United States internal revenue law).
ARTICLE II
BOARD OF DIRECTORS
2.1 NUMBER. Until the first election of Directors, the Community Association's
property, business and affairs shall be governed and managed by a Board of Directors composed
of three (3) persons. Beginning with the first election of Directors, the property, business and
affairs of the Community Association shall be governed and managed by a Board of Directors
composed of five (5) persons. The authorized number of Directors may be changed by a duly
adopted amendment to the Bylaws.
2.2 QUALIFICATIONS.
2.2.1 Qualifications for Nomination. Anyone nominated to serve as a Director
must be a person who is one of the following:
(a) An Owner of a Lot in the Community who is not an officer or
director of a Neighborhood Association, or
(b) An agent of Declarant or an agent of a Participating Builder for so
long as Declarant or a Participating Builder owns or has a Mortgage interest in either (i) a Lot in
the Community, or (ii) any portion of the Annexable Territory.
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2.2.2 Qualifications for Holding Office. Directors are encouraged to satisfy
the following requirements while they serve in office:
(a) Not be absent from three (3) consecutive meetings of the Board;
(b) Attend at least seventy-five percent (75%) of the Board meetings
held each year and attend the entire meeting each time;
(c) Exhibit respect, professionalism and courteous behavior to
Owners, committee members, vendors, the Manager and its staff, and any other Persons involved
with the Community Association; and
(d) For non -Declarant Board members, be an Owner in good standing.
2.3 TERM OF OFFICE. Each Director shall hold office until his successor has
been elected or until his death, resignation, removal or judicial adjudication of mental
incompetence. 'The term of office of the three (3) Directors receiving the highest number of
votes at the first election shall be three (3) years and the term of office of the two (2) Directors
receiving the next highest number of votes at the first election shall be two (2) years. At the first
election, Directors who are appointed by exercise of the Class C Board appointment right shall
be deemed to have received the highest number of votes. Thereafter, new Directors shall be
elected or appointed to fill any vacancies. The term of office of each Director elected to fill a
vacancy created by the expiration of a Director's fully completed term of office shall be three (3)
years. The term of office of each Director elected or appointed to fill a vacancy created for any
other reason shall be the balance of the unserved term. Any Director may be reelected. There is
no limit on the number of terms which a Director may serve.
2.4 ELECTIONS.
2.4.1 Nomination Procedure. The Nominating Committee, acting at the
Board's direction, will seek volunteers to run for office. The Board may establish nomination
procedures and reasonable time frames for receiving nominations in the Rules and Regulations.
The date set for close of nominations must be not Iess than fifty (50) nor more than one hundred
twenty (120) days before the date of the Directors election (the "Election Meeting'. No
nominations for the Board can be made after the date set for the close of nominations. A written
slate of candidates ("Slate of Candldates'� must be prepared and distributed to the Owners
based on the nominations that comply with the nomination guidelines established by the Board.
If more qualified people are nominated than there are positions to be filled, an election shall be
held in accordance with the procedure established in this Section 2.4. If, after the close of
nominations, the number of qualified people nominated for the Board is not more than the
number of positions to be filled, the Community Association may, without further action, declare
those people nominated and qualified to be.elected.
2.4.2 Election Meeting. The Board of Directors shall set the date for each
Election Meeting. The date for the first Election Meeting must be set within one (1) year after
the first Close of Escrow in the Community. Each subsequent Election Meeting must be held
within the sixty (60) days preceding the date on which any Director's term of office will expire.
Notice of the date of each Election Meeting must be distributed to the Owners no less than ten
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(10) nor more than ninety (90) days before the date of the Election Meeting.- The quorum for
Election Meetings is twenty-five percent (25%) of the voting power of the Community
Association. The Board may establish additional procedures for holding Election Meetings in
the Rules and Regulations.
2.4.3 Record Dates. The Board may fix a date as a record date for determining
Owners entitled to notice of each Election Meeting. The record date so fixed must be not more
than ninety (90) nor less than ten (10) days before the date of the Election Meeting. If the Board
does not fix a record date, the record date is the close of business on the business day preceding
the day on which notice is given. The Board may also fix a date as a record date for determining
Owners entitled to vote at the Election Meeting. The record date so fixed must be not more than
sixty (60) days before the date of the Election Meeting. If the Board does not fix a record date,
.the record date is the day on which the Election Meeting is held.
2.4.4 Collection of Proxies. The Board shall deliver forms of proxies to all
Owners listing the Slate of Candidates and identifying the applicable person authorized to
exercise the proxy. All proxies must be in writing. Every proxy is revocable and automatically
ceases after completion of the Election Meeting for which the proxy was provided. Any form of
proxy distributed must afford the opportunity to choose among all candidates listed on the Slate
of Candidates. The proxy must provide that, when the Owner specifies a choice, the vote shall
be cast in accordance with that choice. The proxy must also identify the length of time it will be
valid.
2.4.5 Cumulative Voting. Cumulative voting must be used in the election of
Directors for any election in which two (2) or more Directors are to be elected, To cumulate
votes, Owners may cast a number of votes equal to the Owner's share of the voting power
multiplied by the number of Directors to be elected.
2.4.6 Voting Reports. To verify compliance with the voting requirements of
this Section 2.4, the Board may require each person exercising proxy rights to execute a
certificate providing the following information: (i) the total number of Class A and/or Class B
votes represented by such person; and (ii) the total number of Class A and/or Class B votes
which are cast for individual candidates. The Board may establish rules for verifying the
certificates and proxy rights in the Rules and Regulations.
2.4.7 Special Election Requirement. So long as either (a) Declarant or any
Participating Builder is entitled to exercise a Class B vote or Class C Board appointment right, or
(b) Declarant and all Participating Builders collectively are entitled to exercise a majority of the
Community Association's voting power, not less than twenty percent (20%) of the members of
the Board must be elected solely by the votes of Owners other than Declarant and the
Participating Builders.
2.5 REPLACEMENT MEETINGS. If a vacancy in the Board of Directors exists, a
replacement Director may be elected at a "Replacement Meeting." The procedure for calling and
holding a Replacement Meeting shall be the same as that for an Election Meeting, subject to the
following modifications. The Board shall call a Replacement Meeting (a) as directed by
resolution of a majority of a quorum of the Board, (b) by request of the President of the
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Community Association, or (c) upon receipt of a petition signed by Owners holding at least five
percent (5%) of the Community Association's voting power. The Secretary shall give notice of
any Replacement Meeting within twenty (20) days after adoption of such resolution or receipt of
such request or petition. The notice must state the date, time, place and purpose of the
Replacement Meeting. The Replacement Meeting must be held not less than thirty-five (35) nor
more than ninety (90) days after adoption of such resolution or receipt of such request or
petition. No business may be transacted at the Replacement Meeting except as stated in the
notice. The quorum for Replacement Meetings is twenty-five percent (25%) of the voting power
of the Community Association. The Board may establish procedures for identifying a Slate of
Candidates and collecting proxies for Replacement Meetings in the Rules and Regulations., The
Board may establish record dates for receipt of notice of Replacement Meetings and for voting at
Replacement Meetings within time frames comparable to those for Election Meetings.
2.6 VACANCIES. Until termination of the Class C Board appointment right, a
vacancy in the office of a Director who was appointed by the Declarant shall be filled only by an
appointee of the Declarant. Any vacancies on the Board caused by removal of a Director or by a
vote of the Owners must be filled by the Owners in an Election Meeting or a Replacement
Meeting. All other vacancies on the Board caused by any other reason may be filled by vote of a
majority of the remaining Directors, even though they may constitute less than a quorum. A
Director may resign at any time by giving written notice to the President, the Secretary or the
Board. Any such resignation is effective on the date of receipt of such notice or at any later time
specified in the resignation notice. Unless specified in the notice, acceptance of the resignation
by the Board is not necessary to make it effective. If a Director's resignation is effective at a
later time, the Board may elect a successor to take office as of the date when the resignation
becomes effective. A vacancy or vacancies on the Board shall exist on the occurrence of the
following: (a) the death or resignation of any Director; (b) the declaration by resolution of the
Board of a vacancy in the office of a Director who has been declared of unsound mind by an
order of court, convicted of a felony or found by a final order or judgment of any court to have
breached a duty under Article 3 of Chapter 2 of the California Nonprofit Corporation Law; (c)
the increase of the authorized number of Directors; (d) the failure at any Election Meeting or
Replacement Meeting to elect the number of Directors required to be elected at such meeting; or
(e) the occurrence of any other events resulting in_ a vacancy as provided under the California,
Nonprofit Corporation Law. Any vacancy not filled by the Directors may be filled at an Election
Meeting or Replacement Meeting.
2.7 REMOVAL OF DIRECTORS. Any Director or the entire Board may be
removed before the expiration of their terms of office with or without cause as follows: (i) for so
long as fewer than fifty (50) Lots are included in the Community, by Owners holding a majority
of the Community Association's voting power (including votes attributable to Declarant and the
Participating Builders), and (ii) once fifty (50) or more Lots are included within the Community,
by a majority of a quorum of the Owners. However, if the entire Board is not removed as a
group pursuant to a single vote, no individual Director may be removed if the number of votes
cast against his removal would be sufficient to elect such Director if voted cumulatively at an
election at which the same total number of votes were cast and the entire number of Directors
authorized at the time of the Director's most recent election were then being elected. Any
Director whose removal has been proposed must be given an opportunity to be heard. Any
Director who has been elected to office solely by the votes attributable to Owners other than
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Declarant or the Participating Builders may be removed from office before the expiration of his
term of office only by the votes attributable to Owners holding at least a simple majority of the
Community Association's voting power, excluding votes attributable to Declarant and the
Participating Builders. Any Director who has been elected to office solely by the Class C Board
appointment right may be removed from office before the expiration of his term of office only by
the exercise of the Class C Board appointment right.
2.8 GENERAL POWERS AND DUTIES. The Board has the powers and duties
necessary to conduct, manage and control the Community Association's affairs. All of the
Community Association's powers, including those enumerated in Article IV of the Community
Declaration, shall be exercised by its Board of Directors except those powers (i) reserved in
specific provisions of the Articles, these Bylaws, the Community Declaration or any
Supplemental Community Declaration, to the Owners, Design Review Committee, or (ii)
delegated by the Board pursuant to Section 2.9.7. All powers and duties of the Board shall be
exercised in accordance with the standards established in Article IV of the Community
Declaration.
2.9 SPECIAL POWERS AND DUTIES. Without limiting the scope of the Board's
general powers and duties, the Board is also granted the following powers and duties:
2.9.1 Officers, Agents and Employees. The power and duty to select,- appoint
and remove all the Community Association officers, agents and employees, to prescribe such
powers and duties for them as may be consistent with law and with the Governing Documents, to
fix their compensation, to require from them security for faithful service when the Board deems
advisable, and to contract to provide them with such indemnification from the Community
Association as the Board determines is appropriate.
2.9.2 Contracts and Leases. The power to enter into contracts and leases.
This includes the power and duty to contract and pay for maintenance, landscaping, utilities,
materials, supplies and services relating to the Community Common Property, to retain Persons
necessary to manage the Community, including legal and accounting services, to contract and
pay for Improvements on the Community Common Property, and to contract to provide services
to areas outside of the Community when the Board determines that the Community Association
will be appropriately compensated and providing the services will not unreasonably burden the
Community Association. The Board may not enter into any contract with a term in excess of one
(1) year, without the vote or written consent of (a) a majority of the Class B Membership and (b):
a majority of the Owners (excluding Declarant), representing a quorum of more than fifty
percent (50%), except for the following:
(a) a contract with a public utility company for a term that does not
exceed the shortest term for which the public utility company will contract at the regulated rate if
the rates charged for the materials or services are regulated by the California Public Utilities
Commission;
(b) prepaid casualty or liability insurance policies of not more than
three (3) years' duration provided that the policies permit short-term cancellation by the
Community Association;
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(c) agreements for Telecommunications Services and Telecommuni-
cations Facilities that meet the requirements of Section 2.9.14;
(d) contracts for legal services rendered for (i) the collection of
assessments or other accounts receivable; (ii) the enforcement of use restrictions contained in
Article II of the Community Declaration, (iii) the enforcement of architectural and landscaping
control provisions contained in Article V of the Community Declaration; (iv) initiating a claim,
the total value of which is less than Five Hundred Thousand Dollars ($500,000), except for a
Defect Claim (defined in Section 4.1.2 below) which requires the requisite approval of the
Membership as discussed in the Community Declaration; or (v) the filing a cross -complaint in
litigation to which the Community Association is already a party;
(e) contracts with service providers benefiting the Community to
obtain trash removal and other services;
(f) lease agreements for laundry room fixtures and equipment with
terms not in excess of five (5) years, provided that the lessor under the agreement is not an entity
in which Declarant has a direct or indirect ownership interest equal to or greater than ten, percent
(10%);
(g) agreements for sale, lease or installation of burglar alarm and fire
alarm equipment and related services with terms not in excess of five (5) years, provided that
Declarant does not have a direct or indirect ownership interest in the supplier'of such services or
equipment equal to or greater than ten percent (10%);
(h) agreements for cable television services and equipment, satellite
dish services and equipment, communication services and equipment, and comparable
technology, services and equipment with terms not in excess of five (5) years, provided that
Declarant does not have a direct or indirect ownership interest in the supplier of such services or
equipment equal to or greater than ten percent (10%);
(i) a contract approved by the DRE; and
(j) a contract for a term not to exceed three (3) years that is terminable
by the Community Association after no longer than one (1) year without cause or penalty or
other obligation on ninety (90) days written notice of termination to the other parry.
2.9.3 Principal Office, Place of Meetings, Seal. The power but not the duty to
change the Community Association's principal office from one location to another within
Riverside County; to designate any place within Riverside County for meetings of Owners; to
adopt and use a corporate seal and to alter the form of such seal. .
2.9.4 Assessments. The power and duty to fix, levy and collect Assessments, as
provided in the Community Declaration. Subject to any limits imposed by the Governing
Documents, the Board may incur expenditures for any permitted purpose and accumulate
reserves. The funds collected by the Board from the Owners for reserves, maintenance recurring
less frequently than annually, and capital improvements, are at all times held in trust for the
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Owners. Disbursements from reserve funds may only be made in accordance with the
Community Declaration.
2.9.5 Enforcement. The power to enforce the Governing Documents and any
agreements entered into by the Community Association and to impose sanctions against Owners
for violations of the Governing Documents.
2.9.6 Insurance. The power and duty to contract and pay for insurance in
accordance with the Community Declaration.
2.9.7 Delegation.. The power but not the duty to delegate its powers according
to law.
2.9.8 Governing Documents. The power to adopt these Bylaws and amend
these Bylaws as authorized in Section 5.1 along with the power to adopt, amend or restate such
other Governing Documents as authorized herein and in the Community Declaration or any
Supplemental Community Declaration.
2.9.9 Conveyances. The power but not the duty to grant or quitclaim exclusive
or nonexclusive easements, licenses or rights of way in, on, or over the Community Common
Property for purposes consistent with the intended use of the Community as a Community
planned community.
2.9.10 Records. The power and duty to keep, or cause to be kept, a complete
record of the Community Association acts and corporate affairs.
2.9.11 Sale of Property. The power but not the duty to sell property of the
Community Association. Approval from (a) a majority of the Class B Membership and (b) a
majority of the Owners (excluding Declarant), representing a quorum of more than fifty percent
(50%) must be obtained before the Community Association sells, in any Fiscal Year, property
having an aggregate fair market value greater than five percent (5%) of the Community
Association's budgeted gross expenses for that Fiscal Year.
2.9.12 Agree ments with Declarant or Participating Builders. The power but
not the duty to negotiate and enter into subsidy agreements or maintenance agreements with
Declarant and Participating Builders approved by the DRE.
2.9.13 Manager. The power to engage a Manager for the Community
Association at a compensation established by the Board to fulfill such duties and provide such
services as the Board authorizes.
2.9.14 Teleco mmunications Contracts. The power to enter into, accept an
assignment of, or otherwise cause the Community Association to comply with an exclusive
Telecommunications Contract.
2.9.15 Capital Improvement Expenditures. The power to incur expenditures
for capital improvements to the Community Common Property. Approval from (a) a majority of
the Class B Membership and (b) a majority of the Owners (excluding Declarant), representing a
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quorum of more than fifty percent (50%) must be obtained before the Community Association
incurs, in any Fiscal Year, aggregate expenditures for capital improvements to the Community
Common Property in excess of five percent (5%) of the Community Association's budgeted
gross expenses for that Fiscal Year.
2.10 BOOKS, AUDIT. The Board shall distribute the following financial information
to all Owners (and any Beneficiary, insurer and guarantor of a first Mortgage -upon request)
regardless of the number of Owners or the amount of assets of the Community Association:
2.10.1 Budget. A pro forma operating budget for each Fiscal Year consisting of
at least the following information must be distributed not less than thirty (30) nor more than
ninety (90) days before the beginning of the Fiscal Year:
(a) The estimated revenue and Common Expenses computed on an
accrual basis.
(b) A summary of the Community Association's reserves based upon
the most recent review or study conducted pursuant to Section 1365.5 of the California Civil
Code, which must be printed in bold type and include all of the following:
(1) The current estimated replacement cost, estimated
remaining life, and estimated useful life of each major component of an Improvement on the
Community Common Property.
(2) As of the end of the Fiscal Year for which the study is
prepared:
i) The current estimate of the amount of cash reserves
necessary to repair, replace, restore, or maintain the major components of the Community
Common Property for which the Community Association is responsible ("Estimated Reserves'.
ii) The current amount of accumulated cash reserves
actually set aside to repair, replace, restore or maintain the major components of the Community
Common Property for which the Community Association is responsible ("Actual Reserves'o.
(3) The percentage that the Actual Reserves is of the Estimated
Reserves.
(c) A statement as to whether the Board has determined or anticipated
that the levy of one or more Capital. Improvement or Reconstruction Assessments will be
required to repair, replace, or restore any major component of the Community Common Property
for which the Community Association is responsible or to provide adequate reserves therefor.
(d) A general statement setting forth the procedures used by the Board
in calculating and establishing reserves to defray the costs of repair and replacement of, or
additions to, major components of the Community Common Property and facilities for which the
Community Association is responsible.
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The Board may distribute a summary of the Budget in lieu of the Budget itself, so
long as the Board complies with the provisions of Section 1365(c) of the -California Civil Code.
2.10.2 Financial Report. A report consisting of the following must be
distributed within one hundred twenty (120) days after the close of the Fiscal Year:
(a) A -balance sheet as of the end of the Fiscal Year.
(b) An operating (income) statement for the Fiscal Year.
(c) A statement of changes in financial position for the Fiscal Year.
(d) Any information required to be reported under Section 8322 of the
California Corporations Code.
(e) For any Fiscal Year in which the Community Association's gross
income exceeds Seventy Five Thousand Dollars ($75,000), a copy of a review of the annual
report prepared in accordance with generally accepted accounting principles by a licensee. of the
California State Board of Accountancy.
(f) A statement of the place where the names and addresses of the
Owners are located.
If the report referred to in this Section 2.10.2 is not prepared by an independent
accountant, it must be accompanied by, the certificate of an authorized Community Association
officer stating that the report was prepared from the Community Association's books and records
without independent audit or review.
2.10.3 Insurance Information: The Community Association shall distribute to
all of its Owners a summary of the Community Association's property, general liability, and
earthquake and flood insurance policies, if any, which shall be distributed within ninety (90)
days preceding the beginning of the Community Association's fiscal year (except at the
beginning of the first fiscal year when the information is distributed to Owners before the first
Close of Escrow for each Lot), that includes all of the following about each policy: (i) the name
of the insurer, (ii) the type of insurance, (iii) the policy limits of the insurance, and (iv) the
amount of deductibles, if any.
(a) The Community Association shall, as soon as reasonably practical,
notify the Owners by first-class mail in the manner required by applicable law if any of the
policies described above have lapsed, been canceled, and are not immediately renewed, restored,
or replaced, or if there is a significant change, such as a reduction in coverage or limits or an
increase in the deductible, for any of those policies. If the Community Association receives any
notice of non -renewal of a policy described above, the. Community Association shall
immediately notify the Owners if replacement coverage will not be in effect by the date the
existing coverage will lapse.
(b) To the extent that any of the information required to be disclosed is
specified in the insurance policy declaration page, the Community Association may meet its
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obligation to disclose that information by making copies of that page and distributing it to all
Owners.
(c) The summary distributed above shall contain, in at least 10-point
boldface type, the following statement required by Section 1365 of the California Civil Code:
"This summary . of the Community Association's policies of insurance
provides only certain information, as required by subdivision (e) of Section
1365 of the Civil Code, and should not be considered a substitute for the
complete policy terms and conditions in the actual policies .of insurance.
Any Community Association member may, on request and provision of
reasonable notice, review the Community Association's insurance policies
and, on request and payment of reasonable duplication charges, obtain
copies of those policies. Although the Community Association keeps the
policies of insurance specified in this summary, the Community
Association's policies of insurance may not cover your property, including
personal property or, real property improvements to or around your
dwelling, or personal injuries or other losses that occur in or around your
dwelling. Even if a loss is covered, you may nevertheless be responsible for
paying all or a portion of any deductible that applies. Community
Association members should consult with their individual insurance broker
or agent for appropriate additional coverage."
2.10.4 Enforcement Policies. In addition to financial statements, the Board shall
annually distribute within ninety (90) days before the beginning of the Fiscal Year a statement of
the Community Association's policies and practices in enforcing its remedies against Owners for
defaults in the payment of Assessments, including the recording and foreclosing of liens against
Residences.
2.10.5 Assess zment and Foreclosure Notice.
(a) The Community Association shall distribute the written notice
described in subsection (b) below to each Community Association member during the sixty (60)
day period immediately preceding the beginning of the Community Association's Fiscal Year.
The notice shall be printed in at least twelve (12) point type. A Community Association member
may provide written notice of a secondary address to the Community Association by facsimile
transmission or United States mail. If a secondary address is provided, the Community
Association shall send any correspondence and legal notices required pursuant to these Bylaws
both to the primary and the secondary address.
(b) The notice required by this Section shall read as follows:
NOTICE
ASSESSMENTS AND FORECLOSURE
This notice outlines some of the rights and responsibilities of
owners of property in common interest developments and the
associations that manage them. Please refer to the sections of the
California Civil Code indicated for further information. A portion
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of the information in this notice applies only to liens recorded on
or after January 1, 2003. You may wish to consult a lawyer if you
dispute'an assessment.
ASSESSMENTS AND NON -JUDICIAL FORECLOSURE
Assessments become delinquent 15 days after they are due, unless
the governing documents provide for a longer time. The failure to
pay association assessments may result in the loss of an owner's
property through foreclosure. Foreclosure may occur either as, a
result of a court action, known as judicial foreclosure or without
court action, often referred to as nonjudicial foreclosure. For liens
recorded on and after January 1, 2006, an association may not use
judicial or nonjudicial foreclosure to enforce that lien if the amount
of the delinquent assessments or dues, exclusive of any accelerated
assessments, late charges, fees, attorney's fees, interest, and costs
of collection, is less than one thousand eight hundred dollars
($1,800). For delinquent assessments or dues in excess of one
thousand eight hundred dollars ($1,800) or more than 12 months
delinquent, an association may use judicial or nonjudicial
foreclosure subject to the conditions set forth in California. Civil
Code. Section 1367.4. When using judicial or nonjudicial
foreclosure, the association records lien on the owner's property.
The owner's property may be sold to satisfy the lien if the amounts
secured by the lien are not paid. (California Civil Code Sections
1366, 1367.1 and 1367.4)
In a judicial or nonjudicial foreclosure, the association may recover
assessments, reasonable costs of collection, reasonable attorney's
fees, late charges, and interest. The association may not use
nonjudicial foreclosure to - collect fines or penalties, except for
costs 'to repair common areas damaged by a member or a
member's guests, if the governing documents provide for this.
(California Civil Code Sections 1366 and 1367.1)
The association must comply with the requirements of California
Civil Code Section 1367.1 when collecting delinquent
assessments. If the association fails to follow these requirements,
it may not record a lien on the owner's property until it has
satisfied those requirements. Any additional costs that result from
satisfying the requirements are the responsibility of the association.
(California Civil Code Section 1367.1)
At least 30 days prior to recording a lien on an owner's separate
interest, the association must provide the owner of record with
certain documents by certified mail. Among these documents, the
association must send a description of its collection and lien
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enforcement procedures and the method of calculating the amount.
It must also provide an itemized statement of the charges owed by
the owner. An owner has a right to review the association's
records to verify the debt. (California Civil Code Section 1367.1)
If a lien is recorded against an owner's property in error, the
person who recorded the lien is required to 'record a lien release
within 21 days, and to provide an owner certain documents in this
regard. (California Civil Code Section 1367.1)
The collection practices of the association may be governed by
state and federal laws regarding fair debt collection. Penalties can .
be imposed for debt collection practices that violate these laws.
PAYMENTS
When an owner makes a payment, he or she may request a receipt,
and the association is required to provide it. On the receipt, the
association must indicate the date of payment and the person who
received it. The association must inform owners of a mailing
address for overnight payments. (California Civil Code Sections
1367 and 1367.1)
An owner may dispute an assessment debt by submitting a written
request for dispute resolution to the association as set forth in
Article 5 (beginning with Section 1368.810) of Chapter 4 of Title 6
of Division 2 of the California Civil Code. In addition, an
association may not initiate a foreclosure without participating in
alternative dispute resolution with a neutral third party as set forth
in Article 2 (beginning with Section 1369.510) of Chapter 7 of
Title 6 of Division 2 of the California Civil Code, if so requested
by the owner. Binding arbitration shall not be available if the
association intends 'to initiate. a judicial foreclosure. (California
Civil Code Sections 1366.3 and 1367.1)
An owner is not liable for charges, interest and costs of collection,
if it is established that the assessment was paid properly on time.
(California Civil Code Section 1367.1)
MEETINGS AND PAYMENT PLANS
An owner of a separate interest that is not a timeshare may request
the association to consider a payment plan to satisfy a delinquent
assessment. The association must inform owners of the standards
for payment plans, if any exist. (California Civil Code Section
1367.1)
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The board -of the directors must meet with an owner who makes a
proper written request for a meeting to discuss a payment plan
when the owner has received a notice of a delinquent assessment.
These payment plans must conform with the payment plan
standards of the association, if they exist. (California Civil Code
Section 1367.1)
2.10.6 Reconciliations . The Board shall do -the following on at least a quarterly
basis: (a) cause to be completed and review a current reconciliation of the. Community
Association's operating and reserve accounts, (b) review the current Fiscal Year's actual reserve
revenues and expenses compared to the Budget for the then current Fiscal Year, (c) review the
income and.expense statement for the Community Association's operating and reserve accounts,
and (d) review the most current account statements prepared by the financial institutions where
the Community Association maintains its operating and reserve accounts. The signatures of
either (a) two (2) Directors, or (b) one (1) Director and one (1) officer (who is not also a
Director) are required for withdrawal of money from the Community Association's reserve
accounts. As used in this paragraph, the term "reserve accounts" means money that the Board
has identified from its Budget for use to defray the expense of future repair and replacement of,
or additions to, those major components which the Community Association is obligated to
maintain.
2.10.7 Resery a Study. The Board shall cause a study of the reserve account
requirements and an inspection of the Community to be conducted in accordance with Section
1365.5(e) of the California Civil Code. As used in this paragraph, "reserve account
requirements" means the estimated funds which the Board has determined are required to be
available at a specified point in time to repair, replace or restore those major components of the
Community Common Property which the Community Association is obligated to maintain.
2.11 COMPENSATION. Directors may not receive any salary or compensation for
their services as Directors unless such compensation is first approved by (a) a majority of the
Class B Membership and (b) a majority of the Owners (excluding Declarant), representing a
quorum of more than fifty percent (50%). However, nothing in these Bylaws precludes any
Director from serving the Community Association in some other capacity and receiving
compensation therefor, and any Director may be reimbursed for actual expenses incurred in
performance of the Community Association duties. In addition, no officer, employee or director
of Declarant, a Participating Builder or any affiliate of Declarant or a Participating Builder may
receive any compensation as a Director of the Community Association.
2.12 MEETINGS.
2.12.1 Attendance. Any meeting of the Board may be held by conference
telephone or through use of any other communication equipment, so long as the requirements for
attendance at a meeting through the selected method established by the California Corporations
Code are met. In these cases, all Directors will be deemed to be present in person at the meeting.
2.12.2 Organization Meeting of Board. The first regular meeting of a newly
elected Board ("Organization lkfeeting') must be held within ten (10) days of election of the
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Board, at such place as is fixed and announced by the Directors when such Directors were
elected at the Organization Meeting, the Directors shall organize, elect officers and transact other
business. No notice is necessary_ to the newly elected Directors in order legally to constitute the
Organization Meeting provided that (a) a majority of the whole Board is present when the time
and place are announced and (b) the meeting is held on the same day and at the same place as the
annual meeting of the Owners at which the newly constituted Board was elected.
2.12.3 Regular Meetings of Board. Regular meetings may be held at such time
and place within the Community as is determined by a resolution adopted by a majority of a
quorum of the Directors; provided, however, that such meetings must be held no less frequently
than quarterly. Regular meetings of the Board may be held without notice to the Board if the
time and place of such meetings are fixed by the Board. Otherwise, notice of regular meetings
must be given in the manner required for special meetings of the Board by Section 2,12.4.
2.12.4 Special Meetings of Board.' Special meetings may be called by the
President or by any two (2) Directors upon four (4) days' notice to Board members by first-class
mail or forty-eight (48) hours' notice to Board members delivered personally or by telephone,
including a voice messaging system or other system or technology designed to record and
communicate- messages, facsimile, electronic mail, or other electronic means. The notice must
state the time, place and purpose of the meeting.
2.12.5 Executive Sessions. The Board may convene in executive session to
discuss and vote upon personnel matters, litigation, matters relating to the formation of contracts
with third parties, Owner discipline or to meet with an Owner, upon the Owner's request
regarding (a) the Owner's discipline, or (b) the Owner's payment of Assessments, as specified in
Civil Code Sections 1367. or 1367.1. Any matter discussed in executive session must be
generally noted in the minutes of the immediately following meeting that is open to the entire
Membership. Except as expressly permitted in this Section, only board members may attend
executive sessions.
2.12.6 Eme rgency Meetings. If circumstances that could not have been
reasonably foreseen require immediate attention and possible action by the Board, and such
circumstances make it impractical to provide notice to the Owners, then an emergency meeting
of the Board may be called by the President or by any two (2) members of the Board without
providing notice to the Owners.
2.12.7 Other Meetings of the Board. Any congregation of a majority of the
members of the Board at the same time and place to hear, discuss, or deliberate upon any item of
business scheduled to be heard by the Board, except those matters that may be discussed in
executive session, shall constitute a meeting of the Board. All Owners shall have the right to
attend any regular, special or other meeting of the Board to the extent of space available, except
an executive session. ,Owners who are not Directors may not participate in any deliberation or
discussion at such meetings unless authorized by a vote of a majority of a quorum of the Board.
At each. Board meeting, except for executive sessions, the Board must set aside time for -Owners
to speak, subject to reasonable time limitations imposed by the Board.
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2.12.8 Notice to Owners. Owners shall be given notice of the time and place of
any meeting of the Board, except emergency meetings defined in this Section, at least four (4)
days before the meeting. Notice required by this Section shall be given by posting the notice in a
prominent place or places within the Community, and by mail to any Owner who had requested
notification of board meetings by mail, at the address requested by the Owner. Notice may also
be given by mail or delivery of the notice to each Lot in the Community, or by newsletter or
other similar means of communication. If there are circumstances that could not have been
reasonably foreseen which require immediate attention and possible action by the Board and
which of necessity make it not practical to provide notice to the Owners, then an emergency
meeting of the Board may be called by the President or any two (2) other members of the Board
without providing notice to the Owners.
2.12.9 Waiver of Notice.. Before or at any meeting of the Board, any Director
may, in writing, waive personal notice of such meeting and such waiver is equivalent to giving
notice to such Director. Attendance by a Director at any Board meeting waives personal notice
of the time and place of the meeting. If all the Directors are present at any Board meeting, no
notice to Directors is required and any business may be transacted at such meeting. The
transactions of any Board meeting, however called and noticed or wherever held, are valid as if
they occurred at a meeting duly held after regular call and notice, if (a) a quorum is present, (b)
notice to the Owners of such meeting was provided if required by Section 2.12.8, and (c) either
before or after the meeting, each of the Directors not present signs a written waiver of notice, a
consent to holding such meeting, or an approval of the minutes of the meeting. The Secretary
shall file all waivers, consents and approvals with the Community Association's records or make
them a part of the minutes of the meeting.
2.13 ACTION WITHOUT MEETING. The Board may act without a meeting if all
Directors consent in writing to such action. Written consents must be filed with the minutes of
the proceedings of the Board. Action by written consent has the same effect as a unanimous vote
of the Directors. Within three (3) days after the written consents of all Directors have been
obtained, an explanation of any action taken by unanimous written consent without a meeting
must be either (a) posted by the Board in a prominent place or places in the Community
Common Property, or (b) communicated to the Owners by another means the Board determines
is appropriate.
2.14 QUORUM AND ADJOURNMENT. Except as otherwise expressly provided in
these Bylaws, at all meetings of the Board, a majority of the Directors constitutes a quorum for
the transaction of business, and the acts of a majority of the Directors present at a meeting at
which a quorum is present are the acts of the Board. If at any meeting of the Board there is less
than a quorum present, the majority of those present may adjourn the meeting to another time.
At any such reconvened meeting, any business which might have been transacted at the meeting
as originally called may be transacted without further notice if a quorum is present.
2.15 COMMITTEES.
2.15.1 Gene rally. The Board may, by resolution, designate such advisory and
other committees as it desires, and may establish the purposes and powers of each such
committee. The resolution designating and establishing the committee must (a) provide for
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appointment of its members and a chairman, (b) state the purposes of the committee, and (c)
provide for reports, termination and other administrative matters the Board deems appropriate.
All committees are required to keep minutes of their meetings. Committee meeting minutes
shall be maintained at the, Community Association's principal office or at such other place as the
Board may designate.
2.15.2 No urinating Committee. The Board may form a Nominating Committee
to solicit volunteers to serve as Board members or fill other Community Association positions.
At the Board's direction, the Nominating Committee will also be responsible for assisting
candidates for Community Association offices in becoming familiar with their potential duties
and responsibilities. The Nominating Committee may, at the Board's request, assist in preparing
and distributing election materials. Any member of the Board and any Owner in the Community
may serve on the Nominating Committee. If a Nominating Committee is not formed, the Board
shall perform the duties of the Nominating Committee,
ARTICLE III
OFFICERS
3.1 DESIGNATION. The Community Association's principal officers are a
President, a Vice President, a Secretary, and a Treasurer, all elected by the Board. The Board
may appoint an Assistant Treasurer, an Assistant Secretary and such other officers as it
determines to be necessary. Officers other than the President need not be Directors. Any person
may hold more than one office except one person cannot be both the Secretary and the Treasurer.
Except for Declarant and Participating Builder representatives, anyone serving as either a
Neighborhood Association Board member or officer cannot be a Community Association officer.
3.2 ELECTION OF OFFICERS. The Board shall annually elect the Community
Association's officers at the new Board's organization meeting. The Board shall adopt rules
relating to the election of officers according to the procedures prescribed by California Civil
Code Section 1357.100 et seq., that comply with California Civil Code Section 1363.03. Each
officer shall hold his office at the pleasure of the Board, until he resigns or is removed, is
otherwise disqualified to serve or a successor is elected and qualified to serve.
3.3 REMOVAL OF OFFICERS. Upon an affirmative vote of a majority of the
Board at a meeting, any officer may be removed, either with or without cause, and his' successor
elected. Any officer may resign at any time by giving written notice to the Board or to the
President or Secretary. Any officer who ceases to be an Owner or an agent of an Owner or of
Declarant is deemed to have automatically resigned his office. Any such resignation is effective
on the date of receipt of the resignation or at any later time specified in the resignation. Unless
specified in the resignation, acceptance of the resignation by the Board is not necessary to make
it effective.
3.4 COMPENSATION. Officers may not receive any salary or compensation for
their services as officers unless such compensation is approved by the vote or written consent of
(a) a majority of the Class B Membership and (b) a majority of the Owners (excluding Declarant)
representing a quorum of more. than fifty percent (50%). However, nothing in these Bylaws
precludes any officer from serving the ' Community Association in some other capacity and
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receiving compensation therefor, and any officer may be reimbursed for actual expenses incurred
in the performance of the Community Association duties. No officer, employee or director of
Declarant, a Participating Builder or any affiliate of Declarant or Participating Builder may
receive any compensation for service as an officer of the Community Association, except
reimbursement for actual expenses incurred in the performance of Community Association
duties.
3.5 PRESIDENT. The President is the chief executive officer of the Community
Association and is responsible for the following:
3.5.1 Meetings. Presiding at all Community Association and Board meetings,
3.5.2 General Powers. Exercising all general powers and duties which are
usually vested in the office of the President of a corporation, including the power to appoint
committees from among the Owners,
3.5.3 Supervision. Subject to the control of the Board, exercising general
supervision, direction and control of the Community Association's business, and
3.5.4 Other Powers. Exercising such other powers and duties as may be
prescribed by the Board or these Bylaws.
3.6 VICE PRESIDENT. The Vice President shall take the President's place and
perform the President's duties whenever the President is absent, disabled, refuses or is unable to
act. If neither the President nor the Vice President is able to act, the Board shall appoint some
other member of the Board to do so on an interim basis. The Vice President shall also perform
such other duties as prescribed by the Board or these Bylaws.
3.7 SECRETARY. The Secretary is responsible for the following:
3.7.1 Minutes. Ensuring minutes of all meetings of the Board and the
Community Association committee meetings are taken and maintained at the Community
Association's principal office or such other place as the Board may direct,
3.7.2 The Seal. Keeping the Community Association's seal in safe custody at
the Community Association's principal office,
3.7.3 Other Community Association Documents. Keeping charge of such
books and papers as the Board may direct,
3.7.4 Notices of Meetings. Giving, or causing to be given, notices of meetings
of the Owners and of the Board,
3.7.5 Membership Register. Maintaining or causing to be maintained a record
book .of Owners, listing the names, mailing addresses, e-mail addresses, and telephone numbers
of the Owners as furnished to the Community Association ("Membership Register's and
recording or causing to be recorded the termination or transfer of ownership by any Owner in the
Membership Register, together with the date of the transfer, and
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3.7.6 Miscellaneous. In general, performing all duties incident to the office of
Secretary, and performing such other duties as prescribed by the Board or these Bylaws.
3.8 TREASURER. The Treasurer is the Community Association's chief financial
officer and is responsible for the Community Association funds. The Treasurer is responsible for
the following:
3.8,1 Books of Account. Keeping, or causing to be kept, full and accurate
accounts, tax records and records of business transactions of the Community Association,
including accounts of all assets, liabilities, receipts and disbursements in books belonging to the
Community Association,
3.8.2 Deposits. Being responsible for the deposit of all money and other
valuable effects in the name and to the credit of the Community Association in such depositories
as the Board designates,
3.8.3 Disbursements. Disbursing the Community. Association's funds as
ordered by the Board,
3.8.4 Accounting. Rendering to the President and Directors, upon request, an
account of all transactions and of the Community Association's financial condition, and
3.8.5 Other Powers. Exercising such other powers and performing such other
duties prescribed by the Board or these Bylaws.
ARTICLE IV
ACTIONS BY COMMUNITY ASSOCIATION OWNERS
4.1 VOTING RIGHTS.
4.1.1 Generally. Except as provided in Section 2.4.7, and any provision herein
which expressly excludes the votes of Declarant, any provision of the Bylaws which requires the
vote or written consent of a specified percentage of the Community Association's voting power
before action may be undertaken (i.e., other than actions requiring. merely the vote or written
consent of a majority of a quorum) requires the approval of such specified percentage of (a) the
Class A Membership and the Class B Membership (so long as a Class B Membership exists), and
(b) both the Community Association's total voting power and the Community Association's
voting power represented by Owners other than Declarant. Whenever a reference is made in
these Bylaws or the Community Declaration to the Community Association's voting power, it is
a reference to the voting power of the Class A and Class B Memberships and not to the Class C
Board appointment right. The Community Association's classes of voting Membership are as
follows:
(a) Class A. Class A members are all Owners except Declarant and
the Participating Builders for so long as there exists a Class B Membership. Class A members
are entitled to one (1) vote for each Lot subject to Assessment. Declarant and the Participating
Builders shall become a Class A member upon conversion of the Class B Membership as
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provided below. The vote for such Lot shall be exercised in accordance with Section 4.5.1, but
no more than one (1) Class A vote may be cast for any Lot.
(b) Class B. The Class B members are Declarant and the
Participating Builders. Class B members are entitled to three (3) votes for each Lot owned by
Declarant or Participating Builder subject to Assessment. The Class B Membership shall be
converted to Class A Membership upon the earlier to occur of the following events:
(i) The Close of Escrow for the sale of One Thousand Seven
Hundred Ninety -One (1,791) Lots in the overall development composed of the Community and
Annexable Territory.
(ii) The fifth (5th) anniversary of the first Close of Escrow in
the Phase for which a Public Report was most recently issued.
(iii) - The twenty-fifth (25th) anniversary of the first Close of
Escrow for the sale of a Lot in the Community.
(c) Class C Board Appointment Right. Declarant shall have a Class
C Board appointment right (whether or not Declarant is an Owner). The Class C Board
appointment right shall not be considered a part of the voting power of the Community
Association. The Class C Board appointment right entitles Declarant to select a majority of the
members of the Board of Directors until the Class C Termination Date. The "Class C
Termination Date" shall be the earlier to occur of the following events:
(i) The Close of Escrow for the sale of One Thousand Seven
Hundred Ninety -One (1,791) Lots in the overall development composed of the Community and
Annexable Territory.
(ii) The fifth (5th) anniversary of the first Close of Escrow in
the Phase for which a Public Report was most recently issued.
(iii) The twenty-fifth (25th) anniversary of the first Close of
Escrow for the sale of a Lot in the Community.
(d) Selection of Twenty Percent of the Board. Declarant (whether
or not Declarant is an Owner) is entitled to select twenty percent (20%) of the members of the
Board of Directors until the Selection Termination Date. The "Selection Termination Date" shall
be the earlier to occur of the following events:
(i) The Close of Escrow for the sale of the earlier to occur of
all . of or Two Thousand One Hundred Forty -Nine (2,149) Lots in the overall development
composed of the Community and Annexable Territory.
(ii) The fifth (5th) anniversary of the first Close of Escrow in
the Phase for which a Public Report was most recently issued.
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(iii) The twenty-fifth (25th) anniversary of the first Close of
Escrow for the sale of a Lot in the Community.
4. L2 Vote to Initiate Defect Claim. Commencing on the date of the first
annual meeting of Owners, Declarant relinquishes control over the Community Association's
ability to decide whether to initiate a construction defect claim under the Right to Repair Law (a
"Defect Claim'. This means that Declarant, current employees and agents of Declarant, Board
members who are appointed by Declarant, Board members elected by a majority of votes cast by
Declarant, and all other Persons whose vote or written consent is inconsistent with the intent of
the preceding sentence, are prohibited from participating and voting in any decision of the
Community Association or Owners to initiate a Defect Claim.
4.13 Vote to Dissolve or Transfer Assets. So long as there is any lot, parcel,
area or unit for which the Community Association is obligated to provide management,
maintenance, preservation or control, the Community Association or anyone acting on its behalf,
shall obtain the approval of one -hundred percent (1001/o) of the Owners before (a) filing a
certificate of dissolution, or (b) transferring all or substantially all of the Community
Association's assets.
4.2 ACTIONS BY ENTIRE MEMBERSHIP AT MEETING. Actions that must
be taken by the entire Membership of the Community Association, except for the election of
Directors, may be taken at a meeting of the Owners in accordance with the following procedure:
4.2.1 Majority of Quorum. Unless otherwise provided in the Governing
Documents, any action which may be taken by the Community Association may be taken by a
majority of a quorum of the Owners.
4.2.2 Quorum. Except as otherwise provided in these Bylaws, the presence in
person or by proxy of at least twenty-five percent (25%) of the Community Association's voting
power constitutes a quorum of the Membership. Owners present at a duly called or held meeting
at which a quorum is present may continue to do business until adjournment, despite the
withdrawal of enough Owners to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of a quorum. If a meeting is actually attended, in
person or by proxy, by Owners having less than one-third (1/3) of the Community Association's
voting power, then no matter may be voted on except matters which were generally described in
the notice of the meeting. No action by the Owners on any matter is effective if the votes cast in
favor are fewer than the minimum number of votes required by the Governing Documents to
approve the action.
4.2.3 Proxies. Votes may be cast in person or by proxy. Proxies must be in
writing, comply in form with the requirements of California Civil Code Section 1363.03(d), and
be filed with the Secretary in advance of each meeting. Every proxy is .revocable and
automatically ceases to have any further legal effect. after completion of the meeting for which
the proxy was filed. Any form of proxy or written ballot distributed by any Person to the
Owners must afford the opportunity to specify a choice between approval and disapproval of
each matter or group of matters to be acted on, except it is not mandatory that a candidate for
election to the Board be named in the proxy or written ballot. The proxy or written ballot must
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provide that, when the Owner specifies a choice, the vote shall be cast in accordance with that
choice. The proxy must also identify the Person authorized to exercise the proxy and the length
of time it will be valid. No proxy is valid concerning a vote on any matter described in
California Corporations Code Section 7613(g) unless the general nature of the proposal was
described in the proxy.
4.2.4 Matters- Requiring Secret Ballots. Notwithstanding any other law or
provision of the Governing Documents, an election regarding Assessments, selection of Board
members, amendments to the Governing Documents, or the grant of exclusive use of Community
Common Property under California Civil Code Section 1363.07, shall be held by secret ballot
according to the procedures set forth in this Section 4.2.
4.2.5 Place of Meetings of Owners. .Meetings of the Owners shall be held in
the Community, or such other suitable place as proximate thereto as practical and convenient to
the Owners, as designated by the Board.
4.2.6 Annual Meetings of Owners. The first annual meeting of Owners shall
be held no later than one (1) year after the first Close of Escrow for the sale of a Lot. in the Initial
Covered Property. Thereafter, the annual meetings shall be held on or about the anniversary date
of the first annual meeting. Each first Mortgagee may designate a representative to attend all
annual meetings.
4.2.7 Special Meetings of Owners. The Board shall call a special meeting of
the Owners (a) as directed by resolution of a majority of a quorum of the Board, (b) by request of
the President of the Community Association, or (c) on receipt of a petition signed by Owners
representing at least five percent (5%) of the Community Association's total voting power. The
Secretary shall give notice of any special meeting within twenty (20) days after adoption of such
resolution or receipt of such request or petition. The notice must state the date, time and place of
the special meeting and the general nature of the business to be transacted. The special meeting
must be held not less than thirty-five (35) nor more than ninety (90) days after adoption of such
resolution or receipt of such request or petition. No business may be transacted at a special
meeting except as stated in the notice. Each first Mortgagee may designate a representative to
attend all special meetings.
4.2.8 Notice. The Secretary shall send to each Owner of record, and to each
first Mortgagee who has filed a written request for notice with the Secretary, a notice of each
annual or special meeting. The notice must be sent by first-class mail, at least ten (10) but not
more than thirty (30) days before the meeting. The notice must state the purpose for the meeting
as well as the day, hour and place where it is to be held. The notice may establish time limits for
speakers and nominating procedures for the meeting. The notice must specify those matters the
Board intends to present for action by the Owners, but, except as otherwise provided by law, any
proper matter may be presented for action at the meeting. The notice of any meeting at which
Directors are to be elected must include the names of all nominees when the notice is given to
the Owners.. The mailing of a notice, postage prepaid, in the manner provided in this Section,
shall be considered notice served, forty-eight (48) hours after the notice has been deposited in a
regular depository of the United States mail. Such notice must be posted in a conspicuous place
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on the Community Common Area and is deemed served on an Owner on posting if no address
for such Owner has been then furnished the Secretary.
Notwithstanding any other provision of these Bylaws, approval by the Owners of
any of the following proposals, other than by unanimous approval of those Owners entitled to
vote, is not valid unless the general nature of the proposal was stated in the notice or in any
written waiver of the notice: (a) removing a Director without cause; (b) filling vacancies on the
Board; (c) approving a contract or transaction between the Community Association and one or
more Directors, or between the Community Association and any entity in which a Director has a
material financial interest; (d) amendment of the Articles; or (e) electing to wind up and dissolve
the Community Association.
4.2.9 Record Dates. The Board may fix a date in the future as a record date for
determining which Owners are entitled to notice of any meeting of Owners. The record date so
fixed must be not less than ten (10) nor more than sixty (60) days before the date of the meeting.
If the Board does not fix a record date for notice to Owners, the record date for notice is the close
of business on the business day preceding the day on which notice is given. In addition, the
Board may fix a date in the future as a record date for determining the Owners entitled to vote at
any meeting of Owners. The record date so fixed must be not less than ten (10) nor more than
sixty (60) days before the date of the meeting. If the Board does not fix a record date for
determining Owners entitled to vote, Owners on the day of the meeting who are otherwise
eligible to vote are entitled to vote at the meeting. _
4.2.10 Adjourned Meetings. If a quorum is not present at the time and place
established for a meeting, a majority of the Owners who are present, either in person or by proxy,
may adjourn the meeting to a time not less than five (5) nor more than thirty (30) days fxom the
original meeting date, at which meeting the quorum requirement is the presence in person or by
proxy of Owners holding at least fifteen percent (15%) of the Community Association's voting
power. Such an adjourned meeting may be held without the notice required by these Bylaws if
notice thereof is given by announcement at the meeting at which such adjournment is taken.
4.2.11 Order of Business. Meetings of Owners must be conducted in
accordance with a recognized system of parliamentary procedure or such parliamentary
procedures as the Community Association may adopt. The order of business at all meetings of
the Owners is as follows: (a) roll call to determine the voting power represented at the meeting;
(b) proof of notice of meeting or waiver of notice; (c) reading of minutes of preceding meeting;
(d) reports of officers; (e) reports of committees; (f) election of inspector of election (at annual
meetings or special meetings held for such purpose); (g) election of Directors (at annual
meetings or special meetings held for such purpose); (h) unfinished business; and (i) new
business.
4.2.12 Consent of Absentees. The actions taken at any meeting of Owners,
however called and noticed, are valid as though taken at a meeting duly held after regular call
and notice, if (a) a quorum is present either in person or by proxy, and (b) either before or after
the meeting, each of the Owners not present in person or by proxy signs (i) a written waiver of
notice, (ii) a consent to the holding of such meeting, or (iii) an approval of the minutes thereof.
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The Secretary shall file all such waivers, consents or approvals with the corporate records or
make them a part of the minutes of the meeting.
4.2.13 Minutes, Presumption of Notice. Minutes or a similar record of the
proceedings of meetings of Owners, when signed by the President or Secretary, shall be
presumed truthfully to evidence the matters described therein. A recitation in the Minutes
executed by the Secretary that proper notice of the meeting was given constitutes prima facie
evidence that such notice was given.
4.3 ACTIONS BY THE ENTIRE MEMBERSHIP WITHOUT MEETING.
Actions that must be taken by the entire Membership of the Community Association, except for
the election of Directors, may be taken by written ballot in accordance with the following
procedure.
4.3.1 Majority of Quorum. Unless otherwise provided in the Governing
Documents,:any action which may be taken by the Community Association may be taken by a
majority of a quorum of the Owners.
4.3.2 Quorum. Except as otherwise provided in these Bylaws, at least twenty-
five percent (25%) of the Community Association's voting power constitutes a quorum of the
Membership.
4.3.3 Record Date. The Board may fix a date in the future as a record date for
determining which Owners are entitled to vote. The record date so fixed must be not more than
sixty (60) days before the date of the vote. If the Board does not fix a record date for
determining Owners entitled to vote, Owners on the date the written ballot is distributed who are
otherwise eligible to vote are entitled to vote.
4.3.4 Form of Ballot. Ballots must*be delivered personally, by first class mail
or by any other written means of communication, including by a system or technology designed
to record and communicate messages, facsimile; electronic mail, or other electronic means.
Solicitations for ballots must specify (a) the number of responses needed to meet the quorum
requirements, (b) the percentage of approvals necessary to approve the action, and (c) the time
by which ballots must be received to be counted. The form of written ballot must afford an
opportunity to specify a choice between approval and disapproval of each matter and must
provide that, where the Owner specifies a choice, the vote shall be recorded in accordance
therewith.
4.3.5 Approval by Ballot. Receipt within the time period specified in the
solicitation of (i) a number of ballots which equals or exceeds the quorum which would be
required if the action were taken at a meeting, and (ii) a number of approvals which equals or
exceeds the number of votes which would be required for approval if the action were taken at a
meeting at which the total number of votes cast was the same as the total number of ballots cast,
constitutes approval by written ballot.
4.3.6 Distribution of Ballots. For each issue submitted to the Owners for vote
by written ballot, the Board will prepare and distribute (i) a statement describing the proposal
and potential arguments for and against the proposal, (ii) a form of written ballot, and (iii) any
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3919-34625\BYLAWS\ 560387.4
3/5/07
other information required by. applicable California law. A single ballot may be used for
multiple proposals.
ARTICLE V
AMENDMENTS
5.1 AMENDMENTS TO BYLAWS. These Community Association Bylaws may
be amended by the vote or written consent of Owners representing at least (a) sixty-seven
percent (67%) of the voting power of each class of the Owners, and (b) sixty-seven percent
(67%) of the Community Association's voting power represented by Owners other than
Declarant; provided that the specified percentage of each class of Owners necessary to amend a
specific provision of these Community Association Bylaws may not be less than the percentage
of affirmative votes prescribed for action to be taken under that provision. These Community
Association Bylaws may be amended by a majority of the entire Board, (i) at any time before the
Close of Escrow for the sale of the first Lot, or (ii) if the amendment is within the Board's power
to adopt without Owner approval pursuant to the California Corporations Code and either (a) the
proposed amendment conforms the Community Association Bylaws to California law or the
requirements of VA, FHA, DRE, Fannie Mae, Ginnie Mae or Freddie Mac, or (b) the proposed
amendment corrects a typographical' error in the Community Association Bylaws. Any
amendment to these Community Association Bylaws 'which materially affects _matters listed in
Article XI or Section 13.2 of the Community Declaration must be approved by the Beneficiaries
of that percentage of first Mortgages on the Lots which is specified in the affected provision of
Article XI or Section 13.2 of the Community Declaration, respectively. If an amendment to
these ommunity Association Bylaws materially affects matters listed in both Article XI and
Section 13.2 of the Community Declaration, the amendment must be approved pursuant to the
requirements of both Article XI and Section 13.2.
5:2 AMENDMENTS TO ARTICLES. So long as there are two classes of
Membership, amendment of the Articles of Incorporation of the Community Association shall
require the assent (by vote or written consent) of at least (i) sixty-seven percent (671/o) of the
Board, and (ii) sixty-seven percent (67%) of the voting power of each class of the Owners. After
conversion of the Class B. Membership to Class A Membership, amendment of the Articles of
Incorporation of the Community Association shall require the assent (by vote or written consent)
of (i) sixty-seven percent (671/6) of the Board, (ii) sixty-seven percent (67%) of the total voting
power of the Owners (including votes attributable to Declarant), and (iii) sixty-seven percent
(67%) of the voting power of the Owners other than the Declarant.
ARTICLE VI
MISCELLANEOUS
6.1 CONFLICTING PROVISIONS. In case of any conflict between the Articles
and these Bylaws, the Articles shall control; and in case of any conflict between the Community
Declaration and these Bylaws, the Community Declaration shall control.
6.2 CHECKS, DRAFTS AND DOCUMENTS. All checks, drafts, orders for
payment of money, notes and other evidences of indebtedness issued in the name of or payable
to the Community Association must be signed or endorsed in the manner and by the person or
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3919-34625\BYLAWS\ 560387.4
315107
persons the Board designates by resolution, subject to the requirements of these Bylaws for
withdrawing money from the Community Association's reserve accounts.
6.3 EXECUTION OF DOCUMENTS. The Board may authorize any Person to
enter into any contract or execute any instrument in the name and on behalf of the Community
Association, and such authority may be general or confined to specific instances. Unless so
authorized by the Board, no Person may bind the Community Association by any contract or
engagement or pledge its credit or render it liable for any purpose or in any amount.
6.4 USE OF TECHNOLOGY. Where allowed by applicable law, any information
the Community Association, its Board of Directors, officers, or other representatives is required
to distribute can be distributed by any system or technology designed to record and communicate
messages, facsimile, electronic mail, or other electronic means..
6.5 AVAILABILITY OF COMMUNITY ASSOCIATION DOCUMENTS.
6.5.1 Records To Be Maintained. The Community Association shall maintain
at its principal office (or at such other place within or near the Community as the Board may
prescribe) the Governing Documents, books of account, minutes of meetings of Owners, the
Board and committees, the Membership Register and any other documents required by law to be
maintained by the Community Association (collectively, the "Community Association
Documents', each of which shall be made available for inspection and copying by any Owner
or the Owner's duly appointed representative for a purpose reasonably related to the Owner's
interest as an Owner in accordance with applicable law.
6.5.2 Inspection Rights. The Community Association shall make Community
Association Documents available for the time periods and within the timeframes provided in
California Civil Code Section 1365.2(b)(i) and 0) for inspection and copying by a Community
Association member, or the member's designated representative. The Community Association
may bill the requesting member for the direct and actual cost of copying requested documents.
The Community Association shall inform the member of the amount of the copying costs before
copying the requested documents.
6.5.3 Manner of Inspection. The Community Association shall make the
specified Community Association Documents available for inspection and copying in
compliance with California Civil Code Sections 1365.2(c) and (d). The inspection and copying
rights provided in these Bylaws are subject to the rights and restrictions set forth in California
Civil Code Sections 1365.2(c) through (f).
6.5.4 Limitation on Information Disclosed. The Community Association may
withhold or redact information from the Community Association's Documents for any of the
reasons as set forth in California Civil Code Section 1365(d).
6.5.5 Distribution to Owners. The Community Association shall provide the
requested Community Association Documents as set forth in California Civil Code Section
1365.20). No later than ten (10) days after the Community Association receives written request
from any Owner, the Community Association shall provide to that Owner a copy of each of the
documents listed in Civil Code Section 1368(a) that have been requested by the Owner. Owners
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3/5/07
must be notified in writing when the Budget is distributed or when any general mailing to the
entire Community Association Membership is made of their right to have copies of the minutes
of meetings of the Board and how and where those minutes may be obtained.
6.6 FISCAL YEAR. The Board shall designate the Community Association's Fiscal
Year. The Fiscal Year may be changed by the Board.
ARTICLE VH
NOTICE AND HEARING PROCEDURE
7.1 INITIAL COMPLAINT. Persons who believe a violation of the Governing
Documents has occurred may file a violation complaint in a form authorized by the Board with a
Person designated by the. Board. The Board will then begin the enforcement process. In its
discretion, the Board can issue one or two violation letters to the Person alleged to have
committed the violation (the "Respondent's or set a hearing described in Section 7.2. The
Board may direct the Manager to assist the Board in any of the steps the Board chooses to take in
enforcing the Governing Documents except that decisions made at hearings must be made by the
Board itself.
7.2 SCHEDULING HEARINGS. A hearing before the Board to determine whether
a sanction should be imposed may be initiated by the Board after receipt of at least one violation
complaint. To initiate a hearing, the Board must deliver to the Respondent a notice which
includes all of the following:
7.2.1 Complaint. A written statement in ordinary, concise language describing
the acts or omissions with which the Respondent is charged,
7.2.2 Basis for Violation. A reference to the specific provisions of the
Governing Documents which the Respondent is alleged to have violated,
7.2.3 Hearing Schedule. The date, time and place of the scheduled hearing,
and
7.2.4 Sanctions. A list of sanctions which may be imposed at the hearing.
The date for the hearing may be no less than fifteen (15) days after the date the
notice of hearing is mailed or delivered to the Respondent. The Respondent is entitled to attend
the hearing, submit a statement of defense to the Board in advance of the hearing, and present a
statement of defense and supporting witnesses at the hearing. If the Respondent does not attend
the hearing, the Respondent waives these rights.
7.3 CONDUCT OF HEARING. The Board shall conduct the hearing in executive
session, affording the Respondent a reasonable opportunity to be heard. Before any sanction is
effective, proof of notice and the invitation to be heard must be placed in the minutes of a Board
meeting. Such proof is adequate if a copy of the notice and a statement of the date and manner
of delivery is entered in the Board's minutes by a Community Association officer or Board
member who mailed or delivered such notice. The minutes of the meeting must contain a written
statement of the results of the hearing and the sanction, if any, imposed.
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3919-34625\BYLAWS\ 560387.4
3/5/07
7.4 IMPOSITION OF SANCTIONS. After affording the Respondent an
opportunity for a hearing before the Board, the Board may ratify any one or more of the
following sanctions imposed by the Board: (a) levy a Special Assessment as authorized in the
Community Declaration; (b) suspend or condition the Respondent's right to use any recreational
facilities the Community Association owns, leases, operates or maintains beginning on a date in
the future selected by the Board; (c) suspend the Respondent's voting privileges established
under the Community Declaration; (d) enter upon a Lot or property owned by a Neighborhood
Association to remedy the violation of the Governing Documents, or (e) record a notice of
noncompliance (if not prohibited by law). Any suspension of Membership privileges may not be
for a period of more than thirty (30) days for any non -continuing infraction. For continuing
infractions (including nonpayment of any assessment), Membership privileges may be suspended
for so long as the violation continues. Written notice of any sanction to be imposed ("Notice of
Sanction') must be delivered to the Respondent personally, by any system or technology
designed to record and communicate messages, facsimile, electronic mail, or other electronic
means, via first class mail or certified mail return receipt requested, or any combination of the
foregoing. No action against the Respondent arising from the alleged violation may take effect
before five (5) days after the hearing. No sanctions imposed on the Declarant may interfere with
Declarant's exercise of any of the rights reserved in Article XV of the Community Declaration.
7.5 LIMITS ON REMEDIES. The Board's failure to enforce the Governing
Documents does not waive the right to enforce the same thereafter. The remedies provided by
the Governing Documents are cumulative and not exclusive. However, any individual Owner or
Neighborhood Association must exhaust all available internal Community Association remedies
prescribed by the Governing Documents before that Owner or Neighborhood Association may
resort to a court of law for relief with respect to any alleged violation of the Governing
Documents by another Owner or Neighborhood Association.
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3919-34625\BYLAWS\ 560397.4
315/07
CERTIFICATE OF SECRETARY
I, the undersigned, certify that:
1. I am the duly elected and acting Secretary of AUDIE-MURPHY RANCH
COMMUNITY ASSOCIATION, a California nonprofit public benefit corporation ("Community
Association'; and
2. The foregoing Bylaws comprising 29 pages including this page constitute the
Bylaws of the Community Association duly adopted by Consent of Directors in Lieu of First
Meeting dated March 16, 2007.
IN WITNESS WHEREOF, I have hereunto subscribed my hand and affixed the seal of
the Community Association effective March 16, 2007.
(SEAL)
U
Nicole Sutherland, Secretary
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EXHIBIT D
LEGAL DESCRIPTION OF INITIAL COVERED PROPERTY
Lots 1 to 120, inclusive, and Lots
No. 31391-1, as shown on a ma]
Pages 0 to _1-7 , inclusive,
Riverside County Recorder
121 to 130, inclusive, -of Tract
Recorded in Book LA � A , at
of Maps, in the _Office of the
5624-84058\CCRS\552191,15
6/8/11
EXHIBIT E
FUEL MODIFICATION ZONES AND COMBUSTIBLE RESTRICTED ZONES IN THE
INITIAL COVERED PROPERTY
NONE
5624-84058\CCRS\552191.15
6/8/11
EXHIBIT F
MAINTENANCE AREAS IN THE INITIAL COVERED PROPERTY
5 624-8405 8\CCR S\5 52191.15
6/8/11
EXHIBIT T
MAINTENANCE AREAS IN THE INITIAL COVERED PROPOERTY
1 J
{If
S93 3C!
197 �
/ 8Ra
isu
396 `
S97 JB5 S8d SRy } -
Me. S6a
+, 2 M2 A81
6pS y&6
4p2 .374 373 372 373
177 a7L SY6
4p} 977 379
dad 356
L A86 S78
ai6
499 Su 31p
342 37P 165 3GG 367 388 ]6B S'7p
aiMF s5I SrA 361
311 327 383 —
4W r Sa21
alp a5o s3o �.
roe � 3•Sa � aax
431, 324 377
412 ]pIM 32s 33L S6s
\, aia 307 � rS2E 35 340
1 i 414 3660
415
� 32i � 3,'ti
. 'jf 436 Jr 3p2 '�-, s2i8
All'.a33 l 35s
. r,. •', f � r ! ... •' •, ti � � � ! -� I 345 344343 z4p 3iiR
• ".. : % i. Sep, 543 i : •!4p ` 33i � �!`� �_7=' — �
y L� 41D��� 2l1p� / ,.'.! Y 3S0 3q�r�'4 4
1.
r,b � _L —�.. m .i4F. 349 M 351 552 R 53 $�4
y �
=-- �, ~�PERBY-HIEi--flfifv
LEGEND
LANDSCAPE AREA TO BE MAINTAINED BY CITY -
DESIGNATED MAINTENANCE DISTRICT
LEGEND
1. DEPICTIONS ARE FOR ILLUSTRATIVE PURPOSES ONLY
2. ALL DIMENSIONS ARE APPROXIMATE
3. AS BUILT CONDITIONS SHALL CONTROL.
DATE
oll2vn N.T.S.
EXHIBIT G
COMMUNITY ASSOCIATION MAINTENANCE AREAS
IN THE INITIAL COVERED PROPERTY
5 624-84058\CCRS\552191.15
6/8/11
EXHIBIT -C
COMMUNITY ASSOCIATION MAINTENANCE AREAS IN THE INTITIAL COVERED PROPERTY -
LEGEND
"t PRIMARY AND NEIGHBORHOOD MONUMENT SIGNAGE
"•r FEATURES AT CORNERS MAINTAINED BY HOA
COMMUNITY WALL
HOA MAINTAINED LANDSCAPEAREA
NOTES
1. DEPICTIONS ARE FOR ILLUSTRATIVE PURPOSES ONLY.
2. ALL DIMENSIONS ARE APPROXIMATE
3. AS BUILT CONDITIONS SHALL CONTROL.
DATE
01125111
EXHIBIT H
FORM OF COMMUNITY RECREATIONAL FACILITIES NOTE
5624-8405 8\CCRS\552191.15
6/8/11
UNSECURED PROMISSORY NOTE
(AUDIE MURPHY RANCH COMMUNITY RECREATION CENTER)
,20
.CA
FOR VALUE RECEIVED, AUDIE MURPHY RANCH COMMUNITY ASSOCIATION, a
California nonprofit public benefit corporation ("Maker's promises to pay, as set forth below, to
SUTTER MITLAND 01, LLC, a Delaware limited liability company ("Holder") or order, at
CA , or at such other place as the Holder
may designate in writing, the principal sum of
Dollars ($ ), together with interest thereon at a rate of four percent (4%) per annum.
Capitalized terms not otherwise defined in this Note shall have the meaning ascribed to such
terms in the Community Declaration of Covenants, Conditions, Restrictions and Reservation of
Easements for Audie Murphy Ranch (the "Community Declaration'. Maker acknowledges and
agrees that the principal amount of this Note is equal to the sum of "Declarant's Costs." As
used in this Note, Declarant's Costs shall mean all hard costs incurred by Holder in constructing
the Audie Murphy Ranch Community Recreation Center, including, without limitation, all
improvements, facilities, equipment, amenities and landscaping installed in, on or about the real
property on which the Community Recreation Center is built (the "Property'. The Property is
described on Schedule 1 attached hereto. Declarant's Costs do not include the value of the
Property. Declarant's Costs are evidenced by executed construction contracts, invoices and other
reasonable documentary evidence provided by Holder.
1. Payments. Commencing 20 (the "Payment
Commencement Date"), Maker shall make monthly payments (each, a "Monthly Payment," and
collectively, the "Monthly Payments") to Holder on the last day of each calendar month until all
amounts owing under this Note are paid in full. Each Monthly Payment shall be in the amount
of Dollars ($, which amount is determined on the
basis of an amortization period of 120 months; provided, however, that interest accruing on this
Note will be calculated on the basis of the actual number of days elapsed for any whole or partial
month in which interest is being calculated, on the basis of a calendar month and 365-day year.
Each Monthly Payment shall be applied first to the payment of accrued interest and then to
reduction of principal. Principal, interest and all other sums payable under this Note shall be
payable in lawful money of the United States. For purposes of making payments hereunder, if
the day on which such payment is due is not a Business Day, then amounts due on such date
shall be due on the immediately preceding Business Day and with respect to payments of
principal due on the Maturity Date, interest shall be payable at the Note Rate through and
including the day immediately preceding such Maturity Date. The term "business day" or
"Business Day" when used herein shall mean a weekday, Monday through Friday, except a legal
holiday or a day on which banking institutions in San Francisco, California are authorized by law
to be closed.
2. Maturity Date. Any remaining principal balance of the Loan, together with all accrued
and unpaid interest and other charges, due hereunder, shall be due on or before the date that is
ten (10) years after the Payment Commencement Date (the "Maturity Date'). If Maker fails to
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3 91 9-34625W OTE\775473.2
8/10/10
pay the entire principal balance of this Note, together with all accrued and unpaid interest and
other charges due hereunder on the Maturity Date, then such sum shall accrue interest at the rate
of ten percent (10%) per annum (the "Default Interest Rate', compounded annually, until paid,
provided however that the Default Interest Rate shall not exceed the maximum rate permitted by
law.
3. Prepayment. This Note may be prepaid in whole or in part without penalty at any time
upon ten (10) days prior written notice to Holder.
4. Events Of Acceleration. Upon the occurrence of any of the events described below
(each, an "Event of Default', all sums payable under this Note shall, at the sole option of the
Holder, become immediately due and payable without further notice or demand:
(a) The failure of Maker to make any payment when due hereunder and such failure
continues for more than ten (10) days after the date such payment was due; or
(b) The occurrence of a material default by Maker under any security instrument
which may hereafter secure this Note or any obligations secured thereby; or
(c) The occurrence of a material breach by Maker of any of the provisions of the
Community Declaration; or
(d) The insolvency of Maker, the filing by or against Maker of a petition in
bankruptcy or a petition for relief under the provisions of the federal bankruptcy act or another
state or federal law for the relief of debtors and the continuation of such petition without
dismissal for a period of ninety (90) days or more; or execution by Maker of an assignment for
the benefit of creditors.
5. Remedies. Upon the occurrence of any Event of Default, the Holder may exercise all
rights and remedies provided for herein and at law or equity, including, but not limited to, the
right to immediate payment in full of this Note.
6. No Demand Required. Maker waives presentment, demand, notice, protest, and all
other demands and notices in connection with the delivery, acceptance, performance, default or
enforcement of this Note.
7. No Offset. Maker will pay to Holder all sums owing under this Note without deduction,
offset or counterclaim of any kind whatsoever. Maker hereby expressly waives and releases all
rights Maker has or may hereafter have (at law, equity or otherwise), to claim or in any way
assert any right or defense against Holder that is based on deduction, offset and/or counterclaim.
8. Waiver. No delay or omission on the part of Holder in exercising any right hereunder or
under the Community Declaration shall operate as a waiver of such right, or of any other right of
Holder. No single or partial exercise of a power hereunder or under the Community Declaration
shall preclude other exercises thereof, or the exercise of any other power hereunder.
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3919-34625\NOTE\775473.2
8/10/10
9. Cumulative Remedies. No right, power or remedy given Holder by the terms of this
Note, or by any other instrument now or hereafter securing this Note, is intended to be exclusive
of any other right, power or remedy. Each and every such right, power or remedy, shall be
cumulative and in addition to every other right, power or remedy given Holder by the terms of
any instrument, any statute or otherwise, against Maker.
10. Severability. Should any provision of this Note prove to be invalid, unenforceable or
illegal, such invalidity, unenforceability or illegality shall in no way affect, impair or invalidate
any other provision hereof, and such remaining provisions shall remain in full force and effect.
11. California Law. This Note and the parties, rights and duties hereunder shall be governed
by the laws of the State of California.
12. Attorneys' Fees. It is expressly agreed that if this Note is referred to an attorney or if
suit is brought to collect under this Note or any part hereof or to enforce or protect any rights
conferred upon Holder by this Note or any other document evidencing or securing this Note, then
Maker promises and agrees to pay all costs, including, without limitation, attorneys' fees and
expenses, court costs, experts fees and expenses, accountants fees and expenses and
administrative costs, incurred by Holder.
13. Successors And Assigns. This Note inures to and binds the heirs, legal representatives,
successors and assigns of Holder and Maker.
14. Estonnel Certificate. The Holder of this Note shall have the right to sell, assign,
transfer, negotiate, hypothecate, pledge, or grant participations in, either in part or in its entirety,
this Note and any other instrument evidencing or securing the indebtedness of this Note, without
Maker's consent. Within ten (10) days after the Holder's request, Maker shall certify to the
Holder and any proposed transferee as to the then outstanding amounts of principal, interest and
other amounts owing hereunder, that no default exists on the part of Holder hereunder and that
Maker has no claims against Holder or offsets against amounts owing under the Note.
15. Amendment. This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of Maker or Holder, but
only by an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is sought.
16. Time Of The Essence. Time is of the essence hereof for all provisions for which time is
a factor.
17. Usury. If Holder shall ever receive as interest an amount that exceeds the highest lawful
rate, the amount that would be excessive interest shall be applied to reduce the unpaid principal
balance under this Note and not to pay interest, or if such excessive interest exceeds the unpaid
principal balance under this Note, such excess shall be refunded to Maker.
Signature on Following Page
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3919-34625\NOTE\775473.2
8/10/10
SIGNATURE PAGE TO UNSECURED PROMISSORY NOTE
(AUDIE MURPHY RANCH COMMUNITY RECREATION CENTER)
MAKER:
AUDIE MURPHY RANCH COMMUNITY ASSOCIATION,
a California nonprofit public benefit corporation
By.
Nai
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3919-34625\NOTE\775473.2
8/10/10
EXHIBIT I
LAND USE DESIGNATIONS FROM SPECIFIC PLAN
5624-84058\CCRS\552191.15
6/8/11
mK
N
I l l l l
m