VNHOA CC & Rs

THIS DECLARATION is made this 10th day of March 1989, by Valencia Company, a Division of The Newhall Land and Farming Company, (a California Limited Partnership), a limited partnership, its successors and assigns and shall hereafter/be referred to as “Declarant”.

RECITALS:

A. Declarant is the fee owner of the real property described in Exhibit A to this Declaration, and is now or may in the future be the fee owner of certain other real property, which may from time to time be annexed pursuant to this Declaration.

B. Declarant has deemed it desirable to establish covenants, conditions and restrictions upon the “Covered Property” (as hereinafter defined) and each and every portion thereof, which will constitute a general scheme for the management of the Covered Property, and for the use, occupancy and enjoyment thereof, all for the purpose of enhancing and protecting the value, desirability and attractiveness of the Covered Property and enhancing the quality of life within the Covered Property.

C. The Covered Property will be developed as a “Common Interest Development” as defined in Civil Code Section 1351(c) and as a “Planned Development”, as defined in Civil Code Section 1351(k).

D. It is desirable for the efficient management of the Covered Property and the preservation of the value, desirability and attractiveness of the Covered Property to create a nonprofit mutual benefit corporation to which should be delegated and assigned the powers of managing the Covered Property, maintaining and administering the “Common Areas” (as hereinafter defined) and administering and enforcing these covenants, conditions and restrictions and collecting and disbursing funds pursuant to the Assessment(s) (as hereinafter defined) and charges hereinafter created and referred to and to perform such other acts as shall generally benefit the Covered Property.

E. The Valencia Northbridge Homeowners Association, a nonprofit mutual benefit corporation, has been or shall be incorporated under the laws of the State of California for the purpose of exercising the powers and functions aforesaid.

F. Declarant will hereafter hold and convey title to all of the Covered Property subject to certain protective covenants, conditions and restrictions hereafter set forth.

NOW, THEREFORE, Declarant as the owner of the real property described in Exhibit A and for the purposes above set forth, hereby declares that all of said real property described in Exhibit A and each part thereof and such other real property, as may hereafter be annexed as provided in the Article entitled “Integrated Nature of the Covered Property” of this Declaration, shall be held, sold and conveyed subject to the following easements, equitable servitudes, restrictions covenants and conditions accordance with Civil Code Section 1354, which are for the purpose of protecting the value and desirability of, and which shall constitute equitable servitudes on the Covered Property and which shall run with the Covered Property and be binding on and inure to the benefit of all parties having any right, title or interest therein, or in any part thereof, their heirs, successors and assigns.

ARTICLE I – DEFINITIONS

Unless the context clearly indicates otherwise, the following terms used in this Declaration are defined as follows:

ART I Section 1. “Annexation Property” shall mean all of the real property described in Exhibit B to this Declaration.

ART I Section 2. “Architectural Committee” shall mean and refer to the committee or committees provided for in the Article hereof entitled “Architectural Control”.

ART I Section 3. “Articles” and “Bylaws” shall mean and refer to the Articles of Incorporation and Bylaws of the Association as the same may from time to time be duly amended.

ART I Section 4. “Assessments”: The following meanings shall be given to the Assessments hereinafter defined: “Regular Assessment” shall mean the amount, which is to be paid by each Member to the Association for Common Expenses.

“Remedial Assessment” shall mean a charge against a particular Owner and his Residence, directly attributable to the Owner, to reimburse the Association for costs incurred in bringing the Owner and his Residence into compliance with the provisions of this Declaration, the Articles, Bylaws or Association Rules, together with attorneys’ fees and other charges payable by such Owner, pursuant to the provisions of this Declaration, plus interest thereon as provided for in this Declaration.

“Special Assessment” shall mean any charge designated as a Special Assessment in this Declaration, the Articles, Bylaws or Association Rules.

“Reconstruction Assessment” shall mean a charge against each Owner and his Residence representing a portion of the cost to the Association for reconstruction of any portion or portions of the Common Areas pursuant to the provisions of this Declaration.

“Capital Improvement Assessment” shall mean a charge against each Owner and his Residence, representing a portion of the cost to the Association for installation or construction of any capital improvements on any of the Common Areas, which the Association may from time to time authorize pursuant to the provisions of this Declaration.

ART I Section 5. “Association” shall mean and refer to Valencia Northbridge Homeowners Association, a nonprofit mutual benefit corporation, incorporated under the laws of the State of California, its successors and assigns.

ART I Section 6. “Association Rules” shall mean rules adopted by the Association pursuant to the Article hereof entitled “Duties and Powers of the Association”.

ART I Section 7. “Board” shall mean the Board of Directors of the Association.

ART I Section 8. “Common Areas” shall mean all real property and the improvements thereon owned or leased from time to time by the Association or over which the Association has an easement for maintenance and the common use and enjoyment of the Members. Upon the date of the first conveyance of a Residence to an Owner, the Common Areas shall be that certain property described on Exhibit C. Any real property denominated as “Common Areas” in a Supplementary Declaration shall be conveyed to the Association prior to or concurrently with the first conveyance of a Residence located within the real property which is annexed to the coverage hereof by such Supplementary Declaration except as otherwise provided herein or in said Supplementary Declaration. The Common Areas shall be conveyed to the Association free of all liens and encumbrances except current real property taxes (which taxes shall be prorated as of the date of conveyance), title exceptions of record and the covenants, conditions, restrictions and reservations contained in this Declaration and the instrument which conveys the Common Areas to the Association.

ART I Section 9. “Common Expenses” shall mean and refer to the actual and estimated costs of:

A. Maintenance, management, operation, repair and replacement of the Common Areas and all other areas on the Covered Property which are maintained by the Association;

B. Unpaid Assessments;

C. Maintenance by the Association of areas within the public right-of-way of public streets in the vicinity of the Covered Property as provided in this Declaration or pursuant to agreements with the County;

D. Costs of management and administration of the Association, including, but not limited to, compensation paid by the Association to managers, accountants, attorneys and employees;

E. The costs of utilities, trash pickup and disposal, gardening and other services which generally benefit and enhance the value and desirability of the Common Areas;

F. The costs of fire, casualty, liability, workmen’s compensation and other insurance covering the Common Areas;

G. The costs of any other insurance obtained by the Association;

H. Reasonable reserves as deemed appropriate by the Board;

I. The costs of bonding of the members of the Board, any professional managing agent or any other person handling the funds of the Association;

J. Taxes paid by the Association;

K. Amounts paid by the Association for discharge of any lien or encumbrance levied against the Common Areas or portions thereof;

L. Costs incurred by the Architectural Committee or other committee established by the Board; and

M. Other expenses incurred by the Association for any reason whatsoever in connection with the Common Areas, or the costs of any other item or items designated by this Declaration, the Articles, Bylaws or Association Rules, or in furtherance of the purposes of the Association or in the discharge of any duties or powers of the Association.

ART I Section 10. “County” shall mean and refer to the County of Los Angeles, State of California.

ART I Section 11. “Covered Property” shall mean and refer to all the real property described on Exhibit A hereto and, subsequent to the annexation thereof pursuant to the Article of this Declaration entitled “Integrated Nature of the Covered Property”, any real property which shall become subject to this Declaration.

ART I Section 12. “Declarant” shall mean and refer to Valencia Company, its successors and assigns by merger, consolidation or by purchase of all or substantially all of its assets.

ART I Section 13. “Development” shall mean and refer to the real property described on Exhibits A, B and C.

ART I Section 14. “Exclusive Use Common Areas” shall mean and refer to those portions of the Common Areas delineated on Exhibit H, in, over, under and through which, Declarant and/or Association have conveyed or may convey easement(s) for the exclusive use of specific Owners, which easement(s) shall be appurtenant to such Owner’s separate interest.

ART I Section 15. “Exhibit” shall mean and refer to those documents so designated herein and attached hereto and each of such Exhibits is by this reference incorporated in this Declaration. As additional property is annexed pursuant to the Article entitled “Integrated Nature of the Covered Property” of this Declaration, exhibits similar to the exhibits attached to this Declaration may be attached to such Supplementary Declarations pertaining to the annexed property, and each of such exhibits shall thereby be incorporated in this Declaration.

ART I Section 16. “Federal Agencies” shall mean and refer to collectively one or more of the following agencies and the following letter designation of such agencies shall mean and refer to respectively the agency specified within the parentheses following such letter designation: FHLMC (Federal Home Loan Mortgage Corporation), FNMA (Federal National Mortgage Association), GNMA (Government National Mortgage Association).

ART I Section 17. “Final Subdivision Public Report” shall refer to that report issued by the Department of Real Estate of the State of California pursuant to Section 11018.2 of the California Business and Professions Code or any similar statute hereafter enacted.

ART I Section 18. “Institutional Mortgagee” shall mean and refer to a First Mortgagee which is a bank or savings and loan association or established mortgage company, or other entity chartered under federal or state laws, any corporation or insurance company, any federal or state agency, or any other institution regulated by federal or state law.

ART I Section 19. “Landscape Maintenance District” (sometimes herein after referred to as “LMD”) shall mean and refer to such district(s) as is(are) established in conjunction with Los Angeles County, which is responsible for the landscape, maintenance, repair and administration of certain portions of the Covered Property. The LMD is funded through assessment districts, which contain all of the properties within the boundary of the LMD.

ART I Section 20. “Member” shall mean and refer to every person or entity who qualifies for membership pursuant to the Article of this Declaration entitled “Membership”, including Declarant so long as Declarant qualifies for membership pursuant to said Article.

ART I Section 21. “Mortgage” shall mean and refer to any duly recorded mortgage or deed of trust encumbering a Residence. A “First Mortgage” shall refer to a Mortgage, which has priority over all other Mortgages encumbering a specific Residence.

ART I Section 22. “Mortgagee” shall mean and refer to the mortgagee or beneficiary under any Mortgage. A “First Mortgagee” shall mean the holder of a First Mortgage.

ART I Section 23. “MWD Areas” shall mean those certain areas over, which the Association has or will receive perpetual easements for limited use and enjoyment. The MWD Areas shall be subject to limited use and enjoyment as provided herein. The MWD Areas are described in Exhibit J attached hereto and made a part hereof.

ART I Section 24. “MWD Area Easement Agreements” shall mean those certain easement documents attached hereto as Exhibit F which establish the MWD Areas and easements affecting same, which have been or will be conveyed to the Association.

ART I Section 25. “Northbridge Park” shall mean that certain park area and improvements thereon, described in Exhibit G attached hereto and made a part hereof.

ART I Section 26. “Oak Tree(s)” shall mean the oak trees or portions thereof located within a “Residence”.

ART I Section 27. “Oak Tree Area” shall mean the area around Oak Tree(s) more particularly described on Exhibit E attached hereto and made a part hereof.

ART I Section 28. “Owner” shall mean and refer to one or more persons or entities who are alone or collectively the record owner of a fee simple title to a Residence, including Declarant, or the vendee under an installment land sales contract, but excluding those having any such interest merely as security for the performance of an obligation. If a Residence is leased by Declarant for a term in excess of twenty (20) years and the lease or memorandum thereof is recorded, the lessee or transferee of the leasehold ‘ interest and not the Declarant shall be deemed to be the Owner. If fee title to a Residence is owned other than by Declarant, the Owner of the fee title and not the lessee of such Residence shall be deemed the Owner regardless of the term of the lease.

ART I Section 29. “Residence” shall mean and refer to a lot shown on any final map filed for record or a parcel shown on any parcel map filed for record to the extent such lots or parcels are part of the Covered Property. “Residence” shall also include any condominium unit, which is annexed to this Association.

ART I Section 30. “School Site” shall mean those portions of the Covered Property, which have been conveyed to a school district or subject to a Joint Use Agreement for partial or full school related purposes. In the event all or any portion of the school site is abandoned by the district or otherwise available for residential development, this Declaration shall in no way prevent or inhibit such development.

ART I Section 31. “Special Maintenance Areas” shall mean those areas delineated on Exhibit H attached hereto and made a part hereof, which areas include, without limitation: (1) those areas which are or will be maintained by a Landscape Maintenance District (the “LMD Areas”), (2) those areas which will be maintained by the Association (the “Association Maintenance Areas”) and (3) those areas which will be maintained by individual Owners (the “Homeowners Maintenance Areas”) which areas shall include, without limitation, Exclusive Use Common Areas.

ART I Section 32. “Supplementary Declaration” shall mean those certain declarations of covenants, conditions and restrictions or similar instruments, annexing additional property extending the plan of this Declaration to such additional property as provided in the Article of this Declaration entitled “Integrated Nature of the Covered Property”.

ART I Section 33. “V.A.” shall mean the Veterans Administration.

ARTICLE II – MEMBERSHIP

ART II Section 1 – Membership. Every Owner shall be a Member. The terms and provisions set forth in this Declaration, which are binding upon all Owners are not exclusive, as Owners shall, in addition, be subject to the terms and provisions of the Articles, Bylaws and Association Rules to the extent the provisions thereof are not in conflict with this Declaration. Membership of Owners shall be appurtenant to and may not be separated from the interest of such Owner in any Residence. Ownership of a Residence shall be the sole qualification for membership; provided, however, a Member’s voting rights or privileges in the Common Areas, or both may be regulated or suspended as provided in this Declaration, the Bylaws or the Association Rules. Not more than one membership shall exist based upon ownership of a single Residence.

ART II Section 2 – Transfer. The membership held by any Owner shall not be transferred, pledged or alienated in any way, except that such membership shall automatically be transferred to the transferee of the interest of an Owner required for membership. Any attempt to make a prohibited transfer is void and will not be reflected upon the books and records of the Association. The Association shall have the right to record the transfer upon the books of the Association without any further action or consent by the transferring Owner.

ART II Section 3 – Voting Rights. An Owner’s right to vote shall vest immediately upon the date Regular Assessments upon such Owner’s Residence have been levied as provided in this Declaration. All voting rights shall be subject to the restrictions and limitations provided herein and in the Articles, Bylaws and Association Rules.

ART II Section 4 – Classes of Voting Membership. The Association shall have two classes of voting membership.

Class A. Class A Members shall be all Owners except Declarant and shall be entitled to one (1) vote for each Residence owned. When more than one person owns a Residence required for membership, each such person shall be a Member and the vote for such Residence shall be exercised as they among themselves determine, but in no event shall more than one (1) vote be cast with respect to any Residence.

Class B. The Class B Member shall be Declarant. The Class B Member shall be entitled to three (3) votes for each Residence owned. Class B membership shall cease and be converted to Class A membership on the happening of any of the following events, whichever occurs earlier:

A. Two (2) years from the date of the issuance of the most recently issued Final Subdivision Public Report for a phase of development; or

B. The fourth anniversary of the original issuance of the most recently issued Final Subdivision Public Report for the first phase of the development.

ART II Section 5 – Special Class A Voting Rights. Notwithstanding the provisions of this Article, if the Class A Members do not have sufficient voting power pursuant to the voting rights set forth in this Declaration and the Bylaws to elect at least twenty percent (20%) of the total number of Directors on the Board, at any meeting of Members at which Directors are to be elected, then such Class A Members shall, by majority vote, among themselves, elect the number of Directors required to equal twenty percent (20%) of the total number of Directors on the Board. In the event twenty percent (20%) of the total number of Directors is equal to any fractional number, the number of Directors to be elected pursuant to the special Class A voting right shall be rounded to the next higher whole number.

ART II Section 6 – Approval of Members. Unless elsewhere otherwise specifically provided in this Declaration or the Bylaws, any provision of this Declaration or the Bylaws which requires the vote or written assent of the voting power of the Association or any class or classes of membership shall be deemed satisfied by the following:

A. The vote in person or by proxy of the specified percentage at a meeting duly called and noticed pursuant to the provisions of the Bylaws dealing with annual or special meetings of the Members.

B. Written consents signed by the specified percentage of Members as provided in the Bylaws.

ART II Section 7 – Approval by Each Class of Members. Any provision in the governing instruments calling for membership approval of action to be taken by the Association, except provisions with respect to the action to enforce the obligations of the Declarant under any completion bond, shall expressly require the vote or written assent of the prescribed percentage of each class of membership during the time that there are two outstanding classes of membership. Any requirement elsewhere in the Articles of Incorporation, Bylaws, and Declaration, except with respect to the action to enforce the obligations of the Declarant under any completion bond, that the vote of the Declarant shall be excluded in any such determination shall be applicable only if there has been a conversion of Class B Members to Class A Members and the same shall be read as requiring the vote of the prescribed percentage of the Class A Members and the vote of the prescribed percentage of the Class A Members other than the Declarant.

ARTICLE III – COVENANT FOR MAINTENANCE ASSESSMENTS

ART III Section 1 – Creation of the Lien and Personal Obligation of Assessments. Each Owner including the Declarant to the extent Declarant is an Owner as defined herein, of any Residence by acceptance of a deed or other conveyance, creating in such Owner the interest required to be deemed an Owner, whether or not it shall be so expressed in any such deed or other conveyance, is deemed to covenant and agree to pay to the Association: Regular Assessments, Special Assessments, Capital Improvement Assessments, Remedial Assessments, and Reconstruction Assessments, such Assessments to be fixed, established and collected from time to time as provided in this Declaration. The Regular, Special, Capital Improvement, and Reconstruction Assessments, together with interest thereon, late charges, attorneys’ fees and court costs, and other costs of collection thereof, as hereinafter provided, shall be a continuing lien upon the Residence against which each such Assessment is made. Each such Assessment, including Remedial Assessments, together with such interest, late charges, costs and attorneys’ fees, shall also be the personal obligation of the Owner of such Residence at the time when the Assessment becomes due. The personal obligation for delinquent Assessments shall not pass to the successors in title of an Owner unless expressly assumed by such successors. No Owner may waive or otherwise escape liability for Assessments by nonuse of the Common Areas or any part thereof, or abandonment of his Residence.

ART III Section 2 – Purpose of Assessments. The Assessments levied by the Association shall be used exclusively for the purposes of promoting the recreation, health, safety and welfare of the Members, the management of the Covered Property enhancing the quality of life in the Covered Property, and the value of the Covered Property including, without limitation, the improvement and maintenance of the properties, services and facilities devoted to this purpose and related to the use and enjoyment of the Common Areas, or in furtherance of any other duty or power of the Association. The Association shall not impose or collect an assessment, penalty or fee that exceeds the amount necessary for the purpose or purposes for which it is levied.

ART III Section 3 – Regular Assessments. Not later than forty-five (45) days prior to the beginning of each accounting year, the Board shall distribute to each Member either (i) a pro forma operating statement or budget for the upcoming accounting year which shall, among other things, estimate the total Common Expenses to be incurred for such accounting year; or (ii) a summary of such operating statement or budget, with a written notice (in at least 10-point bold type on the front page of such notice) that such operating statement or budget is available at the Association’s business office and that copies will be provided at the Association’s expense. The budget shall specifically include the following items: (i) a statement of estimated revenue and expenses on an accrual basis; (ii) the amount of the total cash reserves of the Association currently available for replacement or major repair of Common Areas and for contingencies; (iii) an itemized estimate of the current replacement costs of the estimate remaining useful life, and the methods of funding to defray repair or replacement of or addition to, major components of the Common areas for which the Association is responsible; (iv) a general statement setting forth the procedures used by the Board of Directors in the calculation and establishment of reserves to defray the costs of future repair, replacement or additions to the Common Areas for which the Association is responsible. The Board shall at that time determine the amount of the Regular Assessment to be paid by each Member. Each Member shall thereafter pay to the Association his Regular Assessment in installments as established by the Board. Each such installment shall be due and payable on a date established by the Board in the written notice sent to Members. In the event the Board shall determine that the estimate of total charges for the current year is, or will become inadequate to meet all Common Expenses for any reason, it shall then immediately determine the approximate amount of such inadequacy and issue a supplemental estimate of the Common Expenses and determine the revised amount of Regular Assessment against each Member, and the date or dates when due. After the Association’s first accounting year of operation, it shall not impose a Regular Assessment which is increased more than twenty percent (20%) over the amount of the Regular Assessment in the immediately preceding accounting year, without the approval of the Owners constituting a quorum casting a majority of the votes at a meeting or election. For purposes of this Article, a quorum shall be defined as more than fifty percent (50%) of the Owners of the Association. Notwithstanding the foregoing, Regular Assessment increases shall not be limited in the case of “emergency situations” which include any of the following: (i) an extraordinary expense required by court order; (ii) an extraordinary expense necessary to repair or maintain the Covered Property and/or Common Areas, or any part of it for which the Association is responsible where a threat to safety of persons is discovered; (iii) repair to or maintenance of the Covered Property and/or Common Areas that could not have been reasonably foreseen in preparing the budget, provided, however, that prior to imposition of such an assessment, the Board shall make written findings, distributed to the Members, as to the necessity of the expense and why such expense could not have been foreseen.

ART III Section 4 – Capital Improvement Assessments. In addition to the Regular Assessments, the Association may levy in any calendar year, a Capital Improvement Assessment applicable to that year only, for the purpose of defraying, in whole or in part, the cost of any construction or replacement (other than due to destruction) of a described capital improvement upon the Common Areas to the extent the same is not covered by the provisions affecting Reconstruction Assessments in the Article hereof entitled “Destruction of Improvements”, including the necessary fixtures and personal property related thereto. The Association shall not impose a Capital Improvement Assessment, the total amount of which exceeds five percent (5%) of the estimated Common Expenses as set forth in the Section of this Article entitled “Regular Assessments”, without the approval of a majority of the voting power of the Association. Any reserves collected by the Association for the future maintenance and repair of the Common Areas, or any portion thereof, shall not be included in determining said annual Capital Improvement Assessment limitation. All amounts collected as Capital Improvement Assessments may only be used for capital improvements and shall be deposited by the Board in a separate bank account to be held in trust for such purposes. Said funds shall not be commingled with any other funds of the Association and shall be deemed a contribution to the capital account of the Association by the Members.

ART III Section 5 – Uniform Assessment. Regular, Reconstruction and Capital Improvement Assessments shall be fixed at an equal amount for each Residence and may be collected at intervals selected by the Board.

ART III Section 6 – Certificate of Payment. The Association shall, upon demand, furnish to any Member liable for Assessments, a certificate in writing signed by an officer or authorized agent of the Association, setting forth whether the Assessments on a specified Residence have been paid, and the amount of delinquency, if any. A reasonable charge not to exceed Fifteen Dollars ($15.00) may be collected by the Board for the issuance of these certificates. Such certificates shall be conclusive evidence of payment of any Assessment therein stated to have been paid.

ART III Section 7 – Exempt Property. All properties dedicated to and accepted by, or otherwise owned or acquired by, a public authority shall be exempt from the Assessments created herein.

ART III Section 8 – Special Assessment. In the event the Association undertakes to provide materials or services which benefit individual Residences and which can be accepted or not by individual Owners, such as tree trimming, such Owners in accepting such materials or services agree that the costs thereof shall be a Special Assessment. Special Assessments shall also be levied by the Board against a Residence to reimburse the Association for any other charge designated as a Special Assessment in this Declaration, the Articles, Bylaws or Association Rules. Notwithstanding the foregoing, the Board shall not impose Special Assessments which in the aggregate exceed five percent (5%) of the budgeted gross expenses for the current accounting year without first obtaining the approval of the Owners constituting a quorum casting a majority of votes at a meeting or election. The foregoing limitation shall be subject to the exception carved out for “emergency situations” in Section 3 above.

ART III Section 9 – Remedial Assessment. Remedial Assessments shall be levied by the Board against a Residence to reimburse the Association for costs incurred in bringing an Owner and his Resilience into compliance with the provisions of this Declaration, the Articles, the Bylaws or Association Rules, together with attorneys’ fees, interest and other charges relating thereto as provided in this Declaration.

ART III Section 10 – Date of Commencement of Regular Assessments. The Regular Assessments shall be deemed to be levied upon all Residences at the time of conveyance of the first Residence by Declarant to an individual Owner and shall commence as to all Residences on the first day of the month following said conveyance or the conveyance of the Common Areas to the Association, whichever shall first occur; provided, however, that Regular Assessments shall be levied upon all Residences within any annexed area commencing the first month following the conveyance of the first Residence within such annexed area by Declarant to an individual Owner. Regular Assessments shall commence for all Residences within such annexed area on the first day of the month following said conveyance. It is provided, further, that in the event the amount budgeted to meet Common Expenses for the then current year proves to be excessive in light of the actual Common Expenses, the Board in its discretion may either reduce the amount of the Regular Assessment or may abate collection of Regular Assessments as it deems appropriate. Until such time as the Class B Membership has ceased and been converted into Class A Membership, in no event shall a reduction in the amount or the abatement in the collection of Regular Assessments pursuant to this Section result in a quantity or quality of services diminished from those upon which the Common Expense budget for the year in question is based.

ART III Section 11 – No Offsets. All Assessments shall be payable in the amount specified by the Assessment and no offsets against such amount shall be permitted for any reason, including, without limitation, a claim that (i) the Association is not properly exercising its duties and powers as provided in this Declaration; (ii) a Member has made or elects to make no use of the Common Areas; or (iii) any construction or maintenance performed pursuant to the Section entitled “Assumption of Maintenance Obligations” of the Article entitled “Repair and Maintenance” of this Declaration shall in any way postpone Assessments or entitle a Member to claim any such offset or reduction.

ART III Section 12 – Homestead Waiver. Each Owner, to the extent permitted by law, does hereby waive, to the extent of any liens created pursuant to this Declaration, whether such liens are now in existence or are created at any time in the future, the benefit of any homestead or exemption laws of the State of California now in effect, or in effect from time to time hereafter.

ART III Section 13 – Reserves. The Regular Assessments shall include reasonable amounts as determined by the Board collected as reserves for the future periodic maintenance, repair or replacement of all or a portion of the Common Areas, or any other purpose as determined by the Board. All amounts collected as reserves, whether pursuant to this Section or otherwise, shall be deposited by the Board in a separate bank account to be held -in trust for the purposes for which they are collected and are to be segregated from and not commingled with any other funds of the Association. Such reserves shall be deemed a contribution to the capital account of the Association by the Members,

ART III Section 14 – Capital Contribution. Upon acquisition of record title to a Residence from Declarant, each Owner shall contribute to the capital of the Association $75.00. This amount shall be deposited by the buyer into the purchase and sale escrow and disbursed therefrom to the Association.

ARTICLE IV – NONPAYMENT OF ASSESSMENTS

ART IV Section 1 – Delinquency. Any Assessment provided for in this Declaration, which is not paid when due, shall be delinquent on said date (the “delinquency date”). If any such Assessment is not paid within ten (10) days after delivery of notice of such delinquency from the Association, a reasonable late charge as established by the Board not to exceed ten percent (10%) of the delinquent amount shall be levied and the Assessment shall bear interest at the rate of ten percent (10%) per annum commencing thirty (30) days after the payment is due until paid. The Association may, at its option, and without waiving the right to judicially foreclose its lien against the Residence, pursue any available remedies, including, without limitation, bringing an action at law against the Member personally obligated to pay the same, and/or upon compliance with the notice provisions set forth in the Section entitled “Notice of Lien” of this Article to foreclose the lien against the Residence. If action is commenced, there shall be added to the amount of such Assessment the late charge, interest, the costs of such action, and attorneys’ fees incurred in connection with such action; and in the event a judgment is obtained, such judgment shall include said late charge, interest and a reasonable attorneys’ fee, together with the costs of action. Each Member vests in the Association or its assigns, the right and power to bring all actions at law or lien foreclosure against such Member or other Members for the collection of such delinquent Assessments; provided, the Association may not create a lien against the Residence of any Owner based on nonpayment of Remedial Assessments. The Board shall annually distribute, within sixty (60) days prior to the beginning of each accounting year, a statement of the Association’s policies and practices in enforcing its remedies against Owners for defaults in the payment of assessments and any other monetary obligations, including the recording and foreclosing of liens against Owners’ Residences.

ART IV Section 2 – Notice of Lien. No action shall be brought to foreclose said Assessment lien or to proceed under the power of sale herein provided until thirty (30) days after the date a notice of claim of lien is deposited in the United States mail, certified or registered, postage prepaid, to the Owner of said Residence, and a copy thereof is recorded by the Association in the office of the County Recorder of the County; said notice of claim of lien must recite a good and sufficient legal description of any such Residence, the record Owner or reputed Owner thereof, the amount claimed (which shall include interest on the unpaid Assessment at the rate of ten percent (10%) per annum commencing thirty (30) days after the payment is due until paid, a late charge as established by the Board not to exceed ten percent (10%) of the delinquent amount, plus reasonable attorneys’ fees and expenses of collection in connection with the debt secured by said lien), and the name and address of the claimant.

ART IV Section 3 – Foreclosure Sale. Said Assessment lien may be enforced by sale by the Association, its attorney or any other person authorized by the Board to make the sale after failure of the Owner to make the payments specified in the notice of claim of lien within said thirty (30) day period. Any such sale provided for above is to be conducted in accordance with the provisions of Sections 2924, 2924b, 2924c, 2924f, 2924g and 2924h of the Civil Code of the State of California as said statutes may from time to time be amended, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted or provided by law. Upon the affirmative vote of a majority of the voting power present in person or by proxy at a duly and validly held meeting of the Members or by written consent, as set forth in the Bylaws, the Association, through its duly authorized agents, shall have the power to bid on the Residence using Association funds, or funds borrowed for such purpose, at the sale, and to acquire and hold, lease, mortgage and convey the same. No transfer of a Residence as the result of a foreclosure or exercise of sale shall relieve the new owner from liability for any Assessments thereafter becoming due or from the lien thereof.

ART IV Section 4 – Curing of Default. Upon the timely payment or other satisfaction of: (a) all delinquent Assessments specified in the notice of claim of lien, (b) all other Assessments which have become due and payable with respect to the Residence as to which such notice of claim of lien was recorded, and (c) interest, late charges, attorneys’ fees and other costs of collection pursuant to this Declaration and the notice of claim of lien which have accrued, officers of the Association or any other persons designated by the Board are hereby authorized to file or record, as the case may be, an appropriate release of such notice, upon payment by the defaulting Owner of a fee, to be determined by the Association, but not to exceed Fifty Dollars ($50.00) to cover the costs of preparing and filing or recording such release.

ART IV Section 5 – Assessment Power of County. If the County exercises its rights under this Declaration, it shall have the right to assess Special Assessments in equal amounts against all of the Owners in order to obtain reimbursement of any costs incurred by the County in such exercise. Furthermore, the County shall have the right to enforce said Special Assessments pursuant to this Article.

ARTICLE V – ARCHITECTURAL CONTROL

ART V Section 1 – Appointment of Architectural Committee. The Architectural Committee shall consist of not less than three (3) no more than five (5) persons as fixed from time to time by resolution of the Board. The Declarant shall initially appoint the Architectural Committee. The Declarant shall retain the right to appoint, augment or replace all members of the Architectural Committee until one (1) year after the date of the issuance of a Final Subdivision Public Report covering the property described on Exhibit A. The Declarant shall retain the right to appoint, augment or replace a majority of the members of the Architectural Committee until five (5) years after the date of the issuance of said Final Subdivision Public Report, or until ninety percent (90%) of the Residences within the Development have been conveyed by the Declarant, whichever shall first occur. Notwithstanding the foregoing, commencing one (1) year following the issuance of said Final Subdivision Public Report, the Board shall have the right but not the obligation to appoint the remaining members of the Architectural Committee. Five (5) years after the date of the issuance of said Final Subdivision Public Report, or when ninety percent (90%) of the Residences within the Development have been conveyed by Declarant, whichever shall first occur, the right to appoint, augment or replace all members of the Architectural Committee shall automatically be transferred to the Board. Persons appointed by the Board to the Architectural Committee must be Members; however, persons appointed by Declarant to the Architectural Committee need not be Members, in Declarant’s sole discretion.

ART V Section 2 – General Provisions.

A. The Architectural Committee may establish reasonable procedural rules and may assess a fee not to exceed Fifty Dollars ($50.00) per submission of plans in connection with review of plans and specifications including, without limitation, the number of sets of plans to be submitted; however, the Architectural Committee may delegate its plan review responsibilities to one or more members of such Architectural Committee. Upon such delegation, the approval or disapproval of plans and specifications by such persons shall be equivalent to approval or disapproval by the entire Architectural Committee. Unless any such rules are complied with, such plans and specifications shall be deemed not submitted.

B. The address of the Architectural Committee shall be the address established for giving notice to the Association. Such address shall be the place for the submittal of plans and specifications and the place where the current Architectural Standards shall be kept.

C. The establishment of the Architectural Committee and the systems herein for architectural approval shall not be construed as changing any rights or restrictions upon Owners to maintain, repair, alter or modify or otherwise have control over the Residences as may otherwise be specified in this Declaration, in the Bylaws or in any Association Rules.

D. In the event the Architectural Committee fails to approve or disapprove such plans and specifications within sixty (60) days after the same have been duly submitted in accordance with any rules regarding such submission adopted by the Architectural Committee, such plans and specifications will be deemed approved.

ART V Section 3 – Approval and Conformity of Plans. No building, fence, wall, structure, landscaping improvements that consist of predominantly hardscape material(s) (including but not limited to cement, rock and gravel) which hardscaping material(s) are located within the yard of any Residence visible from any street, adjoining Residence or Common Areas, any landscaping located from time to time on lots containing oak trees shall be commenced, erected, maintained upon or removed from the Covered Property, nor shall there be any addition to or change in the exterior of any Residence, building, fence, wall, structure, the painting (other than painting with the same color of paint as previously existed) of exterior walls, patio covers and solar and other energy saving devices, except in compliance with plans and specifications therefor which have been submitted to and approved by the Architectural Committee as to harmony of external design and location in relation to surrounding structures and topography. The Board may, from time to time, adopt and promulgate architectural standards (the “Architectural Standards”) to be administered through the Architectural Committee. The Architectural Standards may include among other things those restrictions and limitations upon the Owners set forth below:

A. Time limitations for the completion of the architectural improvements for which approval is required pursuant to the Architectural Standards;

B. Conformity of completed architectural improvements to plans and specifications approved by the Architectural Committee; provided, however, as to purchasers and encumbrances in good faith and for value, unless notice of non-completion or non-conformance identifying the violating Residence and its Owner and specifying the reason for the notice, executed by the Architectural Committee, shall be filed of record in the Office of the County Recorder of the County, and given to such Owner within one (1) year of the expiration of the time limitation described in subsection (a) above, or unless legal proceedings shall have been instituted to enforce compliance or completion within said one (1) year period, the completed architectural improvements shall be deemed to be in compliance with plans and specifications approved by the Architectural Committee and in compliance with the Architectural Standards of the Association, but only with respect to purchasers and encumbrances in good faith and for value;

C. Such other limitations and restrictions as the Board in its reasonable discretion shall adopt, including, without limitation, the regulation of the following: construction, reconstruction, exterior addition, change or alteration to or maintenance of any building, structure, wall or fence, including, without limitation, the nature, kind, shape, height, materials, exterior color and surface and location of such dwelling structure; and

D. A description of the types of such construction, reconstruction, additions, alterations or maintenance which, if completed in conformity with the Architectural Standards, do not require the approval of the Architectural Committee.

ART V Section 4 – Nonliability for Approval of Plans. Each Owner shall be solely responsible for any violation of this Declaration or any applicable instrument, law or regulation, caused by an improvement made by such Owner even though same is approved by the Architectural Control Committee. Plans and specifications shall be approved by the Architectural Committee as to style, exterior design, appearance and location, and are not approved for engineering design or for compliance with zoning and building ordinances, this Declaration, easements, deed restrictions and other rights and obligations affecting the Covered Property, and by approving such plans and specifications neither the Architectural Committee, the members thereof, the Association, the Members, the Board nor Declarant assumes liability or responsibility therefor, or for any defect in any structure constructed from such plans and specifications. The Architectural Control Committee shall have the right to require, as a condition of approval, that an Owner provide indemnification on terms and conditions satisfactory to the Architectural Control Committee.

ART V Section 5 – Appeal. In the event plans and specifications submitted to the Architectural Committee are disapproved thereby, the party or parties making such submission may appeal in writing to the Board. The written request must be received by the Board not more than fifteen (15) days following the final decision of the Architectural Committee. The Board shall submit such request to the Architectural Committee for review, whose written recommendations will be submitted to the Board. Within forty-five (45) days following receipt of the request for appeal, the Board shall render its written decision. The failure of the Board to render a decision within said forty-five (45) day period shall be deemed a decision in favor of the appellant.

ART V Section 6 – Inspection and Recording of Approval. Any member of the Architectural Committee or any Officer, Director, employee or agent of the Association may at any reasonable time enter, without being deemed guilty of trespass, upon any Residence after notice to the Owner in order to inspect improvements constructed or being constructed on such Residence to ascertain that such improvements have been or are being built in compliance with plans and specifications approved by the Architectural Committee and in accordance with the Architectural Standards. The Architectural Committee shall cause such an inspection to be undertaken within thirty (30) days of a request therefor from any Owner as to his Residence, and if such inspection reveals that the improvements located on such Residence have been completed in compliance with this Article, the President and the Secretary of the Association shall provide to such Owner a notice of such approval in recordable form, which, when recorded, shall be conclusive evidence of compliance with the provisions of this Article as to the improvements described in such recorded notice, but as to such improvements only.

ARTICLE VI – DUTIES AND POWERS OF THE ASSOCIATION

ART VI Section 1 – General Duties and Powers. In addition to the duties and powers enumerated in its Articles and Bylaws, or elsewhere provided for herein, and without limiting the generality thereof, the Association shall have the specific duties and powers specified in this Article.

ART VI Section 2 – General Duties of the Association. The Association through the Board shall have the duty and obligation to:

A. Assume all of the rights and duties of Declarant under the MWD Area Easement Agreements;

B. Enforce the provisions of this Declaration, the Articles, Bylaws and Association Rules, by appropriate means and carry out the obligations of the Association hereunder;

C. Maintain and otherwise manage the following:

i. All easements and real property and all facilities, improvements and landscaping thereon in which the Association holds an interest, subject to the terms of any instrument transferring such interest to the Association;

ii. All personal property in which the Association holds an interest, subject to the terms of any instrument transferring such interest to the Association; and

iii. All property, real or personal, which the Association is obligated to repair or maintain pursuant to this Declaration, including, without limitation, the Article of this Declaration entitled “Repair and Maintenance”.

D. Pay any real and personal property taxes and other charges assessed to or payable by the Association; and

E. Obtain, for the benefit of the Common Areas, water, gas and electric, refuse collections and other services.

F. Review on a quarterly basis: (1) a current reconciliation of the Association’s operating accounts, (2) a current reconciliation of the Association’s reserve accounts, (3) the current year’s actual reserve revenues and expenses compared to the current year’s budget and (4) an income and expense statement for the Association’s operating and reserve accounts.

G. Review the latter account statements prepared by the financial institutions where the Association has its operating and reserve accounts.

ART VI Section 3 – General Powers of the Association. The Association through the Board shall have the power but not the obligation to:

A. Employ a manager or other persons and contract with independent contractors or managing agents to perform all or any part of the duties and responsibilities of the Association, provided that any contract with a person or firm appointed as a manager or managing agent shall have a term of not more than one (1) year with successive one (1) year renewal periods upon mutual agreement of the parties;

B. Acquire interests in real or personal property for offices or other facilities that may be necessary or convenient for the management of the Covered Property, the administration of the affairs of the Association or for the benefit or enjoyment of the Members;

C. Borrow money in a total amount not to exceed ten percent (10%) of the then existing estimated annual Common Expenses, as may be needed in connection with the discharge by the Association of its powers and duties;

D. Establish in cooperation with the County a special tax assessment district for the performance of all or a portion of the maintenance or other functions now within the responsibility of the Association;

E. Establish and maintain a working capital and contingency fund in an amount to be determined by the Board. Such contribution shall be a Common Expense and shall be used by the Board as it deems fit to carry out the objectives and purposes of the Association; and

F. Negotiate and enter into contracts with Institutional Mortgagees and mortgage insurers and guarantors as may be necessary or desirable to facilitate the availability of loans secured by Mortgages within the Covered Property.

ART VI Section 4 – General Limitations and Restrictions on the Powers of the Board. In addition to the limitations and restrictions enumerated in the Articles and Bylaws or elsewhere provided for herein, and without limiting the generality thereof, the Board shall be prohibited from taking any of the following actions without the approval of a majority of the voting power of the Association and a majority of the votes of Members other than the Declarant:

A. Enter into contracts for materials or services, which have a term in excess of one (1) year, with the following exceptions:

i. A contract with a public utility company if the rates charged for the materials or services are regulated by the Public Utilities Commission; provided, however, that the term of the contract shall not exceed the shortest term for which the supplier will contract at the regulated rate; and

ii. Prepaid casualty and/or liability insurance policies of not to exceed three (3) years duration, provided that the applicable policy permits short rate cancellation by the insured.

iii. Management contract, the terms of which have been approved by the Federal Housing Administration or Veterans Administration.

iv. Agreements for sale or lease of burglar alarm and fire alarm equipment, installation and services of not to exceed five years duration provided that the supplier or suppliers are not entities in which the Declarant has a direct or indirect ownership interest of 10 percent or more.

B. Incur aggregate expenditures for capital improvements to the Covered Property in any accounting year in excess of five percent (5%) of the estimated Common Expenses for the accounting year as set forth in the Sections entitled “Regular Assessments” and “Capital Improvement Assessments” of the Article hereof entitled “Covenant for Maintenance Assessments”; “

C. Sell any real or personal property of the Association with an aggregate fair market value in excess of five percent (5%) of said estimated Common Expenses during any accounting year;

D. Pay compensation to Directors or to Officers of the Association for services performed in the conduct of the Association’s business; provided, however, the Board may cause a Director or Officer to be reimbursed for expenses incurred in carrying on the business of the Association;

E. Incur aggregate indebtedness in excess of ten percent (10%) of the then existing estimated annual Common Expenses; and

F. Fill any vacancy on the Board created by the removal of a member of the Board.

ART VI Section 5 – Association Rules. The Board shall also have the exclusive power to adopt, amend, and repeal such rules and regulations as it deems reasonable (the “Association Rules”) which may include the establishment of a system of fines and penalties enforceable as Special Assessments, all as provided in the Bylaws. The Association Rules shall govern such matters in furtherance of the purposes of the Association, including, without limitation, the use of the Common Areas; provided, however, that the Association Rules may not discriminate among Owners, and shall not be inconsistent with this Declaration, the Articles or Bylaws. A copy of the Association Rules as they may from time to time be adopted, amended or repealed or a notice setting forth the adoption, amendment or repeal of specific portions of the Association Rules shall be delivered to each Owner in the same manner established in this Declaration for the delivery of notices. Upon completion of the notice requirements, said Association Rules shall have the same force and effect as if they were set forth in and were a part of this Declaration and shall be binding on the Owners and their successors in interest whether or not actually received thereby. The Association Rules, as adopted, amended or repealed, shall be available at the principal office of the Association to each Owner and Institutional Mortgagee upon request. In the event of any conflict between any such Association Rules and any other provisions of this Declaration, or the Articles and Bylaws, the provisions of the Association Rules shall be deemed to be superseded by the provisions of this Declaration, the Articles or the Bylaws to the extent of any such conflict.

ART VI Section 6 – Delegation of Powers. The Association shall have the right, according to law, to delegate to committees, Officers, employees or agents any of its duties and powers under this Declaration, the Articles and Bylaws; provided, however, no such delegation to a professional management company, the Architectural Committee or otherwise shall relieve the Association of its obligation to perform such delegated duty.

ART VI Section 7 – Pledge of Assessment Rights. The Association shall have the power to pledge the right to exercise its Assessment powers in connection with obtaining funds to repay a debt of the Association; provided, however, any such pledge shall require the prior affirmative vote or written assent of not less than sixty-six and two-thirds percent (66-2/3%) of the voting power present in person or by proxy at a duly and validly held meeting of the Members or by written consent as set forth in the Bylaws. Said power shall include, but not be limited to, the ability to make an assignment of Assessments which are then payable to or which will become payable to the Association; which assignment may be then presently effective but shall allow said Assessments to continue to be paid to and used by the Association as set forth in this Declaration, unless and until the Association shall default on the repayment of the debt which is secured by said assignment. The Association may levy Special Assessments against the Members to obtain such funds. Upon the failure of any Member to pay said Special Assessment when due, the Association may exercise all its rights, including, without limitation, the right to foreclose its lien, pursuant to the Article hereof entitled “Nonpayment of Assessments”. Without limiting the generality of the foregoing, any pledge of Assessment rights in excess of an amount equal to twenty-five percent (25%) of the total Regular Assessments collected by the Association in the then preceding accounting year, shall require the prior written approval of seventy-five percent (75%) of the Institutional Mortgagees based on one (1) vote for each First Mortgage held.

ART VI Section 8 – Emergency Powers. The Association or any person authorized by the Association may enter any Residence in the event of any emergency involving illness or potential danger to life or property. Such entry shall be made with as little inconvenience to the Owners as practicable, and any damage caused thereby shall be repaired by the Association unless covered by insurance carried by the Owner.

ARTICLE VII – REPAIR AND MAINTENANCE

ART VII Section 1 – Repair and Maintenance by Association. Except to the extent that an Owner may be obligated to maintain and repair as hereinafter provided, and without limiting the generality of the statement of duties and powers contained in this Declaration, the Articles, Bylaws or Association Rules, the Association shall have the duty to accomplish the following upon the Covered Property or other land in such manner and at such times as the Board shall prescribe:

A. Maintain, repair, restore, replace and make necessary improvements to the Association Maintenance Areas as shown on Exhibit H attached hereto and made a part hereof;

B. Maintain, repair, restore, replace and make necessary improvements to the LMD Areas to the extent such actions are both (1) necessary and (2) outside the scope of the maintenance obligations of the LMD;

C. Maintain all other areas, facilities, equipment, services or aesthetic components of whatsoever nature as may from time to time be requested by the vote or written consent of a majority of the voting power of the Members;

D. The costs of any such maintenance and repair pursuant to this Section shall be paid out of the general funds of the Association, except as otherwise herein specified as payable by the particular Owners;

E. Provide for a method of continual maintenance of the open space and/or recreation lots and an adequate lighting system along all walkways to be constructed within the Covered Property, to the extent such maintenance obligations are both (1) necessary and (2) outside the scope of the maintenance obligations of the LMD;

F. Replace and repair any damage or destruction to landscaping and/or improvements caused by the maintenance, repair or relocation of any landscaping or improvements located within the MWD Areas; provided, however, that the Association shall not be responsible for replacing or repairing any damage or destruction to landscaping and/or improvements located within MWD Areas previously assigned, including without limitation those MWD Areas assigned to the County for park purposes; and

G. In the event of LMD failure, assume maintenance responsibility for the LMD Areas shown on Exhibit H.

ART VII Section 2 – Repair and Maintenance by Owner. Except to the extent that the Association shall be obligated to maintain and repair as may be provided in this Declaration, every Owner shall be responsible for the following maintenance and repair:

A. Every Owner shall maintain those portions of the exterior of his Residence which are visible from the street on which said Residence fronts, including without limitation, the walls, fences and roof of such Residence in good condition and repair;

B. Every Owner shall install and thereafter maintain in attractive condition, yard landscaping in accordance with the provisions of this Article;

C. Every Owner shall maintain in good and attractive condition all landscaping placed upon such Owner’s Lot, including without limitation, oak trees and shrubs. Such maintenance shall be consistent with applicable County ordinances.

D. Every Owner shall maintain in good and attractive condition those portions of Homeowner Maintenance Areas and Exclusive Use Common Area, including any improvements constructed or existing thereon, as have been or may be conveyed to Owner by Declarant.

E. This Section 2(e) shall apply only to Duplexes and the Owners thereof. In the event maintenance and repair or reconstruction including without limitation, painting, masonry work or roof repair, is required on the exterior portion of adjoining Residences which exterior portion is visible from the street on which the Residences front or any portion of the roof areas of said Residences, the Owners of each of said adjoining Residences shall mutually agree and consent to said maintenance and repair or reconstruction and to the allocation of the costs thereof in writing prior to the commencement thereof. In the event either of said Owners fails to so consent and agree, the other Owner shall be entitled to submit a written description of said proposed maintenance and repair or reconstruction to the Architectural Committee for a Determination as to whether the proposed maintenance is necessary and reasonable according to the standards set forth herein. In the event the Architectural Committee determines to allow said maintenance and repair or reconstruction each of said Owners shall equally share the cost thereof, except as otherwise set forth in the Article hereof entitled “Party Walls” and except to the extent the costs of said maintenance and repair or reconstruction are disproportionately allocable to one of said Residences as determined by the Architectural Committee. In the event of such a disproportionate allocation of said costs, each Owner shall bear that percentage of the costs which is allocated thereto by the Architectural Committee. In the event an Owner refuses to pay his share of said costs, the Owner initiating such repair and maintenance with the approval of the Architectural Committee shall be entitled to pay for ail of said costs and may enforce the payment by the defaulting Owner to said initiating Owner pursuant to the provisions of Section 3 of this Article. Notwithstanding the foregoing, an Owner shall be entitled to maintain and repair those portions of his Residence which are not visible from the street on which the Residence fronts as he sees fit so long as said maintenance and repair is in compliance with the standards set forth herein; and

F. In the event the Board shall determine that any lot perimeter walls and fences have been damaged from within a Residence, the Owner of the Residence shall be responsible for repairing such damage in a timely manner and in accordance with such rules as the Board or Architectural Committee shall from time to time adopt. In the event such repair is not so accomplished by the Owner, the Association or its delegates shall have the right at reasonable times to enter the Residence to effect such repair, and the cost thereof shall be charged to the Owner of the Residence, and, if not paid in a timely manner, shall be a Remedial Assessment and enforceable in accordance with the provisions of this Declaration applicable thereto.

ART VII Section 3 – Right of Association to Maintain and Install. In the event that an Owner fails to accomplish any maintenance, repair or installation required by this Section or pay his share of expenses incurred in the accomplishment of the same, the Association or its delegates may, but shall not be obligated to, cause such maintenance, repair and installation to be accomplished or such payment to be made to the appropriate parties (said maintenance, repair, installation or lack of payment shall be referred to in this Article as a “deficiency”) as hereinafter set forth.

A. Upon finding by the Board of a deficiency, the Board shall give notice of the deficiency to the violating Owner, which shall briefly describe the deficiency and set a date for the cure thereof. If the violating Owner submits a written request to the Board for a hearing within fifteen (15) days after the mailing of such deficiency notice, the Board shall set a date for such hearing before the Board or a committee selected by the Board for such purpose. The Board may delegate its powers under this subsection to a duly appointed committee of the Association.

B. Such hearing shall be held not less than ten (10) nor more than thirty (30) days from the date of said request for hearing.

C. Such hearing shall be conducted according to such reasonable rules and procedures as the Board shall adopt which shall provide the Owner with the right to present oral and written evidence and to confront and cross-examine any person offering at such hearing evidence adverse to such Owner. If the Board or any such committee renders a decision against the Owner, it may set another date by which the deficiency is to be corrected by the Owner. A decision of such committee may be appealed to the Board, but a decision of the Board shall be final.

D. If the deficiency continues to exist after the time limitation set forth in the deficiency notice or, in the event a hearing is held, the date imposed by a final decision of the Board or any such committee, the Board or such committee may cause such maintenance, repair or installation to be accomplished or such payment to be made.

E. In the event the Board or such committee elects to cause such maintenance, repair or installation to be accomplished, it shall give written notice of such election to the violating Owner and the following shall apply:

i. The Owner shall have no more than ten (10) days following the receipt thereby of said written notice of election in which to select a day or days upon which such maintenance, repair or installation work shall be accomplished;

ii. The date which said Owner selects shall be not less than ten (10) days nor more than thirty (30) days following the last day of the ten (10) day period specified in such notice of election;

iii. If said Owner does not select such day or days within the ten (10) day period specified in such notice of election, the Board or such committee may select a day or days upon which such work may be accomplished which shall be not less than twenty-five (25) nor more than fifty-five (55) days from the last day of the ten (10) day period specified in such notice of election; and

iv. Unless the Owner and the Board otherwise agree, such maintenance or installation shall take place only during daylight hours on any day, Monday through Friday, excluding holidays.

F. If the Association pays for all or any portion of correcting such deficiency or if an Owner has not paid his share of the maintenance and repair expenses as set forth in Section 2 of this Article regardless of whether the Association has reimbursed the appropriate parties or Owners pursuant to this Section, such amount shall be a Remedial Assessment to the violating Owner and his Residence.

ART VII Section 4 – Standards for Maintenance and Installation.

A. Maintenance of the exterior of the Residences, including without limitation walls, fences and roofs shall be accomplished in accordance with the Architectural Standards and, if required by the Architectural Standards, only after approval of the Architectural Committee.

B. All portions of the yard of a Residence which are unimproved and visible from the street on which said Residence fronts shall be landscaped by the Owner thereof in conformance with customary landscaping material(s), primarily living plants, trees and shrubs. Subject to the Section entitled “Approval and Conformity of Plans” of the Article hereof entitled “Architectural Control”, landscaping of the Residence shall be installed within one hundred eighty (180) days from the date of the conveyance of such Residence from Declarant to the Owner. Thereafter, such landscaping shall be maintained by the Owner in an attractive condition and according to any rules promulgated by the Board.

C. Adjoining Duplexes shall be maintained the same color as each other and otherwise in a harmonious and aesthetically consistent fashion.

ART VII Section 5 – Right of Entry. The Association shall have the right to enter upon any Residence in connection with any exterior maintenance, repair or construction in the exercise of the powers and duties of the Association. Any damage caused by such entry shall be repaired by the entering party to the extent that the damage caused was unnecessary under the circumstances to carry out the Association’s rights and obligations.

ART VII Section 6 – Maintenance by County. The County may provide for the maintenance of the Common Areas if, in the opinion of the County, it should be determined that adequate maintenance is not being performed for the Common Areas.

ART VII Section 7 – Maintenance of Public Utilities. Nothing contained herein shall require or obligate the Association to maintain, replace or restore the facilities of public utilities which are located within easements in the Common Areas owned by such public utilities. However, the Association shall take such steps as are necessary or convenient to ensure that such facilities are properly maintained, replaced or restored by such public utilities.

ART VII Section 8 – Assumption of Maintenance Obligations. Declarant, its subcontractors and the agents and employees of the same shall have the right to enter upon the Common Areas to complete the construction of any landscaping or other improvement to be installed on the Common Areas as provided in this Declaration. If any excess of Assessments collected over actual Common Expenses incurred by the Association is caused by reason of construction or maintenance pursuant to this Section, or otherwise, such excess shall be placed in reserve to offset the future expenses of the Association in any manner designated by the Board.

ART VII Section 9 – Special Maintenance Areas. Certain portions of the Common Areas will be maintained by a Landscape Maintenance District or another district which shall assume responsibility for the maintenance and repair of such Common Areas, hereinafter collectively referred to as the “LMD Areas” and delineated on Exhibit H attached hereto and made a part hereof. In the event Common Areas are to be maintained by a Landscape Maintenance District, (a) no improvement, excavation or work which in any way alters any portion of any Common Area shall take place, except (i) in compliance with all laws, regulations and (ii) upon the prior approval of the Landscape Maintenance District, and (b) such LMD Area shall be held, maintained and used to meet the recreational interests of Owners or to enhance their enjoyment of the natural environment of th.2 LMD Area and for no other purpose. If for any reason, any LMD Area ceases to be maintained by the Landscape Maintenance District, the Association shall immediately undertake maintenance and repair of such LMD Area in accordance with this Article.

ART VII Section 10 – Special Maintenance Areas: Annexation Property. Certain portions of the Annexation Property may consist of Common Areas including a paseo area, which may be annexed to the Covered Property in accordance with the Article hereof entitled “Integrated Nature of Covered Property.” The Association shall be responsible for the maintenance and repair of such Common Areas; provided, the Association may annex certain portions of the Common Areas, including the paseo area, to a Landscape Maintenance District or another district which shall assume responsibility for the maintenance and repair of such Common Areas, which Common Areas will become included in, and made a part of, the LMD Areas delineated on Exhibit H attached hereto and made a part hereof. LMD Areas within the Annexation Property are subject to the restrictions set forth in Section 9 hereinabove.

ART VII Section 11 – Slope Drainage Lots: Common Area. Certain portions of the Common Area (“Common Area Slope Lots”), delineated on Exhibit L attached hereto and made a part hereof, are subject to easements for drainage purposes. The easement areas shall include certain drainage devices (the “Drainage Devices”), which shall include without limitation, paved swales, bench drains and down drains. The Landscape Maintenance District shall be responsible for said Drainage Devices located within the Common Area Slope Lots. If for any reason, the Drainage Devices within any Common Area Slope Lot cease to be maintained by the Landscape Maintenance District, the Association shall immediately undertake maintenance and repair of such Drainage Devices in accordance with this Article.

ARTICLE VIII – INSURANCE

ART VIII Section 1 – Types. The Association, to the extent available, shall obtain and continue in effect in its own name the following types of insurance with such deductible provisions as may be appropriate so long as such amounts or type of insurance coverage are not, in the good faith judgment of the Board, prohibitively expensive or no longer necessary or appropriate for the protection of the Covered Property, the Association and the Members:

A. A comprehensive policy of public liability insurance covering the Common Areas with a limit of not less than One Million Dollars ($1,000,000) for claims for personal injury and/or property damage arising out of a single occurrence, such coverage to include protection against water damage liability, liability for non-owned and hired automobile and liability for property of others, and such other risks as shall customarily be covered with respect to similar planned unit developments in the area of the Covered Property, and shall contain 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 the Association or other Owners;

B. A policy of fire and casualty insurance with extended coverage for the full replacement value of the Common Areas (including all building service equipment and the like), without deduction for depreciation, with an “agreed amount endorsement” or its equivalent and clauses waiving subrogation against Members and the Association and persons upon the Covered Property with the permission of a Member, such insurance to afford protection against at least loss or damage by fire and other hazards covered by the standard extended coverage endorsement:, and by sprinkler leakage, debris removal, cost of demolition, vandalism, malicious mischief, windstorm, water damage, and such other risks as shall customarily be covered with respect to similar planned unit developments in the area of the Covered Property; and

C. Fidelity coverage against dishonest acts on the part of Directors, Officers, employees or volunteers who handle or who are responsible to handle the funds of the Association, and such fidelity bonds shall name the Association as obligee, shall be written in an amount equal to twenty-five percent (25%) of the estimated annual operating expenses of the Association, including reserves, and shall contain waivers of any defense based on the exclusion of persons who serve without compensation or from any definition of “employee” or similar expression.

ART VIII Section 2 – Waiver by Members. All insurance obtained by the Association shall be maintained by the Association for the benefit of the Association, the Owners and the Mortgagees as their interests may appear. As to each of said policies which will not be voided or impaired thereby, the Owners hereby waive and release all claims against the Association, the Board, other Owners, the Declarant and agents and employees of each of the foregoing, with respect to any loss covered by such insurance, whether or not caused by negligence of or breach of any agreement by said persons, but to the extent of insurance proceeds received in compensation for such loss only.

ART VIII Section 3 – Other Insurance. The Board may and, if required by any Institutional Mortgagee, shall purchase and maintain in force demolition insurance in adequate amounts to cover demolition in the event of total or partial destruction and a decision not to rebuild, as well as a blanket policy of flood insurance. The Board shall also purchase and maintain workmen’s compensation insurance, to the extent that the same shall be required by law, for all employees of the Association. The Board shall also purchase and maintain in effect such insurance on personal property owned by the Association, and such other insurance, as it deems necessary or as is required by an Institutional Mortgagee including, without limitation, earthquake insurance, plate-glass insurance and Officers’ and Directors’ liability insurance.

ART VIII Section 4 – Premiums, Proceeds and Settlement. Insurance premiums for any such blanket insurance coverage obtained by the Association and any other insurance deemed necessary by the Association shall be a Common Expense to be included in the Regular Assessments levied by the Association. Casualty insurance proceeds shall be used by the Association for the repair or replacement of the property for which the insurance was carried, or otherwise’ disposed of as provided in the Article hereof entitled “Destruction of Improvements”. The Association is hereby granted the authority to negotiate loss settlements with the appropriate insurance carriers. Any two (.) Directors of the Association may sign a loss claim form and release form in connection with the settlement of a loss claim, and such signatures shall be binding on the Members.

ART VIII Section 5 – Annual Insurance Review. The Board shall annually determine whether the amounts and types of insurance it has obtained provide adequate coverage for the Covered Property in light of increased construction costs, inflation, practice in the area in which the Covered Property is located, or any other factor which tends to indicate that either additional insurance policies or increased coverage under existing policies are necessary or desirable to protect the interests of the Owners and of the Association. If the Board determines that increased coverage or additional insurance is appropriate, it shall obtain the same.

ART VIII Section 6 – Abandonment of Replacement Cost Insurance. Unless at least seventy-five percent (75%) of the Institutional Mortgagees based on one (1) vote for each First Mortgage held have given their prior written approval, the Association shall not be entitled to fail to maintain the extended coverage fire and casualty insurance required by this Article on less than a one hundred percent (100%) Current replacement cost basis.

ART VIII Section 7 – Federal Requirements. Notwithstanding the foregoing provisions of this Article, the Association shall continuously maintain in effect such casualty, flood and liability insurance and a fidelity bond meeting the insurance and fidelity bond requirements for planned unit development projects established by any of the Federal Agencies, so long as either is a Mortgagee, Owner, or insures or guarantees a Mortgage within the Covered Property, except to the extent such coverage is not available or has been waived in writing by the foregoing entities.

ARTICLE IX – DESTRUCTION OF IMPROVEMENTS

ART IX Section 1 – Duty of Association. In the event of partial or total destruction of improvements upon the Common Areas, it shall be the duty of the Association to restore and repair same as promptly as practical pursuant to this Article. The proceeds of any casualty insurance maintained pursuant to this Declaration shall be used for such purpose, subject to the prior rights of Mortgagees whose interest may be protected by said policies.

ART IX Section 2 – Automatic Reconstruction. In the event that the amount available from the proceeds of such insurance policies for such restoration and repair shall be at least eighty-five percent (85%) of the estimated cost of restoration and repair, with each Owner contributing a like sum, may be levied by the Association to provide the necessary funds for such reconstruction, over and above the amount of any insurance proceeds available for such purpose, and the Board shall cause the damaged or destroyed Common Areas to be restored as closely as practical to its condition prior to the destruction or damage.

ART IX Section 3 – Vote of Members. In the event that the amount available from the proceeds of such insurance policies for such restoration and repair shall be lesr than eighty-five percent (85%) of the estimated cost of restoration and repair, the improvements shall be replaced or restored unless a twenty-five percent (25%) majority of the voting power of the Association objects in writing to such replacement or restoration or votes against the same at a meeting duly called therefor. Such written objections or vote must include at least a twenty-five percent (25%) majority of the Class A Members. If the Members do not disapprove such replacement or restoration, the Board shall levy a Reconstruction Assessment, with each Owner contributing a like sum, in order to provide the necessary funds for such reconstruction, over and above the amount of any insurance proceeds available for such purpose, and the Board shall cause the damaged or destroyed Common Areas to be restored as closely as practical to its former condition prior to the destruction or damage. In the event of a determination, as provided above, not to replace or restore the improvements on the Common Areas, the Common Areas shall be cleared and landscaped for community park use and the costs thereof shall be paid for with the insurance proceeds, and any deficiency may be raised by Reconstruction Assessments in an amount determined by the Board. Notwithstanding the foregoing, a determination not to repair or rebuild must also be approved in writing by the, County which shall also have authority to approve modifications to the original design standards in such repair and rebuilding.

ART IX Section 4 – Excess Insurance Proceeds. In the event any excess insurance proceeds remain, after any reconstruction by the Association pursuant to this Article, the Board, in its sole discretion, shall distribute such sums pro rata equally to the Owners subject to the prior rights of Mortgagees whose interest may be protected by insurance policies carried by the Association. In the absence of such prior rights, the rights of an Owner and the Mortgagee of his Residence as to such pro rata distribution shall be governed by the provisions of the Mortgage encumbering such Residence.

ART IX Section 5 – Use of Reconstruction Assessments. All amounts collected as Reconstruction Assessments shall only be used for the purposes set forth in this Article and shall be deposited by the Board in a separate bank account to be held in trust for such purposes. Such funds shall not be commingled with any other funds of the Association and shall be deemed a contribution to the capital account of the Association by the Members. Any excess amounts which are so collected shall be treated in the same manner as set forth in Section 4 above.

ART IX Section 6 – Reconstruction of Duplexes. In the event of the total or partial destruction of a Duplex, the reconstruction thereof shall be carried out in accordance with the provisions of Section 2(c) of the Article hereof entitled “Repair and Maintenance”.

ARTICLE X – EMINENT DOMAIN

ART X Section 1 – Definition of Taking. The term “taking” as used in this Article shall mean condemnation by eminent domain or sale under threat of condemnation of all or any portion of the Common Areas.

ART X Section 2 – Representation by Board in Condemnation Proceedings. In the event of a threatened taking of all or any portion of the Common Areas, the Members hereby appoint the Board and such persons as the Board may delegate to represent all of the Members in connection with the taking. The Board shall act in its sole discretion with respect to any awards being made in connection with the taking and shall be entitled to make a voluntary sale to the condemnor in lieu of engaging in a condemnation action.

ART X Section 3 – Inverse Condemnation. The Board is authorized to bring an action in inverse condemnation. In such event, the provisions of this Article shall apply with equal force.

ART X Section 4 – Award for Common Areas. Any awards received on account of the taking of Common Areas shall be paid to the Association. The Board may in its sole discretion retain any award in the general funds of the Association or distribute pro rata all or a portion thereof to the Members. The rights of an Owner and the Mortgagee of his Residence as to any pro rata distribution shall be governed by the provisions of the Mortgage encumbering such Residence.

ARTICLE XI – USE RESTRICTIONS

ART XI Section 1 – Commercial Use. Subject to the Section entitled “Construction and Sales” of the Article hereof entitled “Easements”, no part of a Residence shall be used or caused to be used or allowed or authorized in any way, directly or indirectly, for any business, commercial, manufacturing, mercantile, storing, vending, or any nonresidential purposes; provided, however, the Association shall have the right to provide or authorize such services on the Common Areas as it deems appropriate for the enjoyment of the Common Areas^–or for the benefit of the Members. Nothing in this Section shall prohibit Owners from conducting certain non-disturbing commercial activities, provided, however, such activities do not create unreasonable traffic congestion, involve advertising on the Residence, alter the appearance of a Residence or alter the aesthetics of the neighborhood, or violate any applicable laws or regulations.

ART XI Section 2 – Exclusive Use Common Areas.

A. No improvements shall be constructed or installed on the Exclusive Use Common Areas, except for softscape landscaping and such other improvements for which prior approval has been obtained from the Architectural Committee. Any approval made under this Section is voidable by the Architectural Committee if Owner fails to clearly disclose that the improvements will be located on Exclusive Use Common Area.

B. Owner shall be solely responsible for the maintenance of the Exclusive Use Common Areas.

C. Any Owner who violates this Section shall reimburse the Association for all expenses incurred by the Association in remedying the damage caused by said Owner’s violation of this Section. Such expense shall be assessed to the Owner as a Remedial Assessment, enforceable in the manner provided in Article III hereof.

ART XI Section 3 – Signs. No sign or billboard/ca.-any kind shall be displayed to the public view on any portion of the Covered Property except such signs as may be used by Declarant or its sales agents in connection with the development of the Covered Property and sale of the Residences; provided, however, that a Member, or his agent may display on his Residence or that portion(s) of the Common Area approved by the Board, a sign advertising its sale or lease by him so long as such sign shall comply with any customary and reasonable standards promulgated by the Board as to the size, color, shape or other qualification for permitted signs. Notwithstanding the restrictions set forth in this Section 3 of Article XI, Owners may install signs, which disclose that the Residence is protected by a Security System. Such security signs may be placed on or around the Residence; provided, however, that such signs do not exceed customary dimensions.

ART XI Section 4 – Nuisance. No noxious or offensive trade or activity shall be carried on upon any Residence, or any part of the Covered Property nor shall anything be done thereon which may be, or may become an annoyance or^–nuisance to the neighborhood, or which shall in any way interfere with the quiet enjoyment of each Of the Owners of his respective Residence, or which shall in any _sway increase the rate of insurance.

ART XI Section 5 – Temporary Structures. No structure of a temporary character, trailer, basement, tent, shack, barn or other outbuilding shall hereafter be used on any Residence at any time, either temporarily or permanently.

ART XI Section 6 – Vehicles.

A. Only “conventional passenger vehicles” are permitted to park on the Covered Property. Except as provided in this Section, no commercial or recreational vehicles or equipment shall be permitted to remain upon the Covered Property, including, without limitation, streets, alleys, driveways, or side and rear yards, unless parked, placed or maintained completely concealed from view. Nothing contained herein shall preclude the parking of a vehicle within the garage of a Residence.

B. Recreational vehicles and equipment are permitted to be parked in the front of a Residence on a non-recurring basis and only in the following circumstances:

i. Recreational vehicles and equipment owned by a Member may be parked in front of said Member’s Residence for a period not to exceed forty-eight (48) hours if prior written approval of the Board has first been obtained; and

ii. Recreational vehicles and equipment owned by guests temporarily visiting a Member may be parked in front of such Member’s Residence for a period not to exceed two (2) weeks if prior written approval of the Board has been obtained.

C. No conventional passenger vehicle, recreational vehicle or equipment or commercial vehicle or any other motorized vehicle may be dismantled, rebuilt, repaired, abandoned, disabled, serviced or repainted on a Residence unless performed within a completely enclosed garage or other area located on the Residence which completely screens the sight and sound of such activity from streets, Common Areas and neighboring Residences. The foregoing restrictions shall not be deemed to prevent temporary parking for loading or unloading of vehicles or washing and polishing and those activities normally incident to washing and polishing of vehicles.

D. As used in this Section, “conventional passenger vehicles” shall be defined to be station wagons, family sedans, compacts, subcompacts, pick-up trucks, pick-up trucks with shell not extending above the cab level beyond one (1) foot, and passenger vans and passenger vans with extended tops not extending above the top more than six (6) inches.

E. As used in this Section, “recreational vehicles or equipment” shall include without limitation, trailers, boats, campers, trailer coaches, buses, house cars, camp cars, motor homes (if a size larger than seven (7) feet in height and/or greater than one hundred twenty-four (124) inches in wheel base length), or any other similar type of equipment or vehicle.

F. As used in this Section, “commercial vehicle” shall be defined as a truck of greater than one (1) ton capacity and/or any vehicle with a sign displayed on any part thereof advertising any kind of business or on which racks, materials, and/or tools are visible, or with a body type normally employed as a business vehicle whether or not a sign is displayed on any part thereof. The type of motor vehicle license plate shall not be material to the foregoing definition.

G. Temporary parking shall mean parking of vehicles belonging to guests of Owners and commercial vehicles being used in the furnishing of services to the Association or the Owners and parking of vehicles belonging to or being used by Owners for loading and unloading purposes.

H. The Board may adopt rules for the regulation of the admission and parking of vehicles within the Covered Property, including the assessment of charges to Owners who violate or whose invitees violate, such rules. Any charges so assessed shall be Special Assessments.

I. Any fence, screen or structure required under this Section shall comply with any standards established pursuant to the Article entitled “Architectural Control” of this Declaration as to size, color, or other qualification for permitted fences, screens or other structures.

ART XI Section 7 – Animals. No animals, livestock or poultry of any kind, shall be raised, bred or kept upon the Covered Property, except that dogs, cats or other household pets may be kept on the Residences, provided they are not kept, bred or maintained for any commercial purpose, or in numbers deemed unreasonable by the Board. Notwithstanding the foregoing, no animals or fowl may be kept on the Residences which in the good faith judgment of the Board or a committee selected by the Board for this purpose, result in an annoyance or are obnoxious to residents in the vicinity. All animals permitted to be kept by this Section shall be kept on a leash when on any portion of the Covered Property except within a Residence.

ART XI Section 8 – Oil and Mineral Rights. No oil drilling, oil development operations, oil refining, quarrying, or mining operations of any kind shall be permitted upon or in the Covered Property nor, subsequent to the recording of this Declaration, shall oil or water wells, tanks, tunnels, or mineral excavations or shafts be installed upon the surface of the Covered Property or with respect to water wells, within fifty (50) feet below the surface of the Covered Property and with respect to all other matters, within five hundred (500) feet below the surface of such properties. No derrick or other structure designed for use in boring for water, oil or natural gas shall be erected, maintained or permitted upon the Covered Property.

ART XI Section 9 – Unsightly Items. All weeds, rubbish, debris, or unsightly material or objects of any kind shall be regularly removed from the Residences and shall not be allowed to accumulate thereon. All clotheslines, refuse containers, trash cans, woodpiles, storage areas, machinery and equipment shall be prohibited upon any Residence unless obscured from view of adjoining streets or portions of the Covered Property from a height of six (6) feet or less. Any fence or screen required by this Section shall comply with any standards established pursuant to the Article entitled “Architectural Control” of this Declaration as to size, color or other qualification for permitted fences or screens.

ART XI Section 10 – Antennae and Other Roof Structures. No television, radio, or other electronic towers, aerials, antennae or device of any type for the reception or transmission of radio or television broadcasts or other means of communication shall hereafter be erected, constructed, placed or permitted to remain on^.the Covered Property unless and until the same shall have been approved in writing by the Architectural Committee, or unless the same be contained within a building or underground conduits. No appliances or installations on exterior roofs of structures shall be permitted unless they are installed in such a manner that they are not visible from streets, Common Areas or neighboring Residences, except that attic ventilators and solar panels which are architecturally treated in conformity with guidelines contained in the Architectural Standards and which have been approved by the Architectural Committee pursuant to the provisions of the Article hereof entitled “Architectural Committee” shall be permitted.

ART XI Section 11 – Drainage. All drainage of water from any Residence shall drain or flow into adjacent streets or alleys and shall not be allowed to drain or flow upon, across, or under any other portion of the Covered Property unless an easement for such purpose is granted. An Owner shall not alter the drainage of water which exists pursuant to the drainage plan originally created at the time of the initial sale of his Residence by Declarant except through the use of a positive drainage device which does not materially affect the concentration or flow direction of drainage water under’ said drainage plan.

ART XI Section 12 – Garages. No garage doors shall be permitted to remain open except for a temporary purpose, and the Board may adopt rules for the regulation of the opening of garage doors, including the assessment of charges to Owners who violate or whose invitees violate such rules. Any charges so assessed shall be Special Assessments.

ART XI Section 13 – Window Covers. Curtains, drapes, shutters or blinds may be installed as window covers. No window shall be covered with aluminum foil, newspaper or other material not designed for use window cover.

ART XI Section 14 – Backboards. Unless otherwise approved by the Architectural committee, basketball backboards may only be mounted on the garage of a Residence over the driveway and only if completely painted to match the color of the Residence.

ART XI Section 15 – Single-Family Residential. All Residences shall only be used for the residential purposes of a household.

ART XI Section 16 – Maintenance by Owner. The Owner of each Residence shall maintain his Residence including the improvements which are a part thereof in a clean and attractive condition. Without limiting the generality of the foregoing, the Owner of each Residence shall:

A. Keep his Residence free from rubbish, litter and noxious weeds,

B. Maintain, cultivate and keep in good condition and repair, shrubs, trees including without limitation oak trees, grass, lawns, plantings and other landscaping located or from time to time placed upon his Residence including those in areas between the adjacent sidewalk and the street curbs, if any,

C. Trim and restrain all trees, shrubs or plantings of any kind so that they shall not be allowed to overhang or otherwise encroach upon, above or below any sidewalk or street, unless prior approval of the Architectural Committee is obtained,

D. Maintain in good condition and repair and adequately painted or otherwise finished all improvements which are from time to time a part of his Residence, and

E. Maintain all paved surfaces and keep them clean, reasonably dry and free of oil and other extraneous matter.

ART XI Section 17 – Solar and Other Energy Saving Devices. No solar and other energy saving device or system which was not part of the original construction of the Residences shall be permitted to be installed without the prior written approval of the Architectural Committee.

ART XI Section 18 – View Obstruction Prohibition. No improvement, structure or vegetation shall be constructed, installed or maintained on any Residence which unreasonably interferes with any Owner’s view of the immediate vicinity or any Owner’s access to direct and natural sunlight. If an Owner has paid a premium for his lot (“Premium View Lot”), such Owner may petition the Architectural Committee to determine, in its sole and exclusive discretion, whether a particular improvement, structure or vegetation is “unreasonable” for the purposes of this Section. Owners of lots other than Premium View Lots do not have the right to petition the Architectural Committee as provided hereinabove. Without limiting the foregoing, no hedge or fence shall be placed or located upon any lot in a manner likely, in the sole discretion of the Architectural Committee, to unreasonably interfere with or impede a view available on another lot. In connection with the approval of hedges, the Committee is expressly authorized to grant approval conditioned on the agreement of the lot owner upon which the hedge is planted to trim, top or prune the hedge in such manner so that it shall not exceed at any time a stated height deemed acceptable by the Architectural Committee. No trees or shrubs shall be placed or located on any lot in a manner likely, in the sole discretion of the Architectural Committee, to unreasonably interfere with or impede a view available on another lot. In connection with the approval of trees, the Architectural Committee is expressly authorized to grant approval conditioned on the agreement of the owner of the lot upon which the tree is planted (said agreement to be for the benefit of the Association and the lot with the affected view), to trim, top or prune the tree or shrub in such manner so that it shall not exceed at any time a stated height deemed acceptable by the Architectural Committee. Notwithstanding the foregoing, Owners acknowledge that nothing in this Section 18 guarantees that any Owner’s view, including without limitation views of Owners of Premium View Lots, will remain unobstructed or unchanged and that any Owner’s view is subject to obstruction or change due to future developments. Furthermore, any Architectural Committee approval shall not be construed to be an approval of any violation of the restrictions imposed by this Declaration or other codes and regulations; Owner shall indemnify the Architectural Committee against any action or complaint arising out of any improvements approved under this Section.

ART XI Section 19 – Limited Use Areas. Owners of lots which contain an exclusive easement in favor of a Landscape Maintenance District or similar district (“LMD”) for maintenance and repair are prohibited from constructing any improvement, including without limitation, balconies, decks and landscaping over or on such easement areas (the “Limited Use Areas”), or in any way interfering with the maintenance and repair obligations of an LMD with respect to the Limited Use Areas.

ART XI Section 20 – Slope Drainage Easements. Each of the lots set forth in Exhibit “K” shall be subject to a drainage easement (“Drainage Easement”) in favor of the LMD, which Drainage Easement shall be for the purposes of installing and maintaining slope drainage facilities in order to drain nuisance water and rain water from such slope areas as delineated in Exhibit “K” attached hereto. Owners of lots which contain Drainage Easements are prohibited from constructing any improvement(s) over or on such Drainage Easement(s), or in any way interfering with the maintenance and repair obligations of the LMD with respect to the Drainage Easements.

ART XI Section 21 – Nondisturbance of Oak Tree. No Owner shall disturb in any way, the Oak Tree(s) or any portion thereof, located within his/her Residence. No Owner shall place or erect any improvement within the Oak Tree Area located within his/her Residence, as described in Exhibit E attached hereto and made a part hereof. Each Owner shall be responsible for maintaining the Oak Tree(s) and Oak Tree Areas located on his lot; and will sign an acknowledgment form, which recites the Owners rights and obligations with respect to the Oak Tree(s) and Oak Tree Areas, along with his/her Deposit Receipt and Purchase Agreement.

ART XI Section 22 – Exceptions. The restrictions set forth in Article V and in this Article XI shall not and do not apply to any of the following:

A. Any part of the Covered Property which is owned by any public body, including, but not limited to, a School District;

B. Any act done or proposed to be done upon the Covered Property, or any condition created thereon, by any governmental agency or entity, or the agents or employees of any governmental entity acting in the scope of their authority as such agents or employees;

C. Any act done or proposed to be done upon the Covered Property, or any condition created thereon, by any utility company (including, but not limited to, companies furnishing electric, gas, water, telephone, cable television and/or sewer service to all or parts of the Covered Property), or the agents or employees of any such company, which act could be done by such company were this Declaration not made;

D. Any act done or proposed to be done upon the Covered Property, or any condition created thereon, by Declarant, or its successors, assigns, agents, employees or contractors, in connection with the marketing and sales by Declarant of the Residences, or in the course of planning for, preparing the Covered Property for and/or construction upon the Covered Property or any Residence of streets, utilities, recreational and residential buildings, and all other original improvements, or in connection with the exercise of any easement reserved to Declarant in the Article entitled “Easements” of this Declaration or in any conveyance document; provided, that Declarant, in exercising all of its rights under this Declaration, shall not unreasonably interfere with the use of the Common Areas or the Residences.

E. Any act done or proposed to be done upon the Covered Property, or any condition created thereon, by any person pursuant to court order, or the order of any public officer or public agency; provided, however, that the orders contemplated in this subparagraph are only those which are the result of action initiated by public officers or agencies and which embody mandatory requirements with penalties for non-performance, and are not those orders which result from the application of private parties or are merely permissive.

ARTICLE XII – RIGHTS OF ENJOYMENT

ART XII Section 1 – Members’ Right of Enjoyment. Every Member shall have a nonexclusive easement for use and enjoyment in and to the Common Areas and such right shall be appurtenant to and shall pass with the interest of every Residence, subject to all of the easements, covenants, conditions, restrictions and other provisions of record or contained in this Declaration, including, without limitation, the following provisions:

A. The right of the Association to limit the number of guests of Members and to limit the use of the Common Areas by persons not in possession of a Residence, but owning a portion of the interest in a Residence required for Membership.

B. The right of the Association to establish reasonable rules and regulations pertaining to the use of the Common Areas.

C. The right of the Association to borrow money for the purpose of improving, replacing, restoring or expanding the Common Areas or adding new Common Areas and in aid thereof, to mortgage said property, provided that the prior affirmative vote or written approval of a majority of each of the Class A and the Class B Members has been obtained to mortgage said property, and provided further that the rights of the lender thereunder shall be subordinated to the rights of the Members. In the event of a default upon any such mortgage of the Common Areas, the lender’s rights thereunder shall be limited to a right, after taking possession of such properties, to charge admission and other fees as a condition to continued enjoyment by the Members and, if necessary, to open the enjoyment of the Common Areas to a wider public until the mortgage debt is satisfied, whereupon the possession of such properties shall be returned to the Association and all rights of the Members hereunder shall be fully restored.

D. The rights of the Association to suspend the right of a Member to use the Common Areas or any portion thereof designated by the Board during any time in which any Assessment against his Residence remains unpaid and delinquent for a period not to exceed thirty (30) days for any single infraction of the rules and regulations of the Association; provided, that any suspension of such right to use such Common Areas, except for failure to pay Assessments, shall be made only by the Association or a duly appointed committee thereof, after notice and hearing given and held in accordance with the Bylaws. Notwithstanding the foregoing, the Association shall not have the right hereunder to suspend any Member’s right to use any portion of the Covered Property necessary for such Member to gain access to his Residence.

E. The right of the Association subject to the approval rights of Institutional Mortgagees pursuant to the Article hereof entitled “Rights of Lenders”, to dedicate or transfer all or any part of the Common Areas to any public agency, authority or utility or other entity. No such dedication or transfer, including, without limitation, the conveyance, lease or other transfer of any portion of the Common Areas to a special tax assessment district or to the County, shall be effective unless an instrument signed by Members entitled to cast two-thirds (2/3) of the voting power of the membership has been recorded, agreeing to such dedication or transfer. The certificate of the President and the Secretary of the Association attached to such instrument certifying that the Members signing such instrument represent two-thirds (2/3) of the voting power of the Association shall be deemed conclusive proof thereof.

F. The right of the Association to establish in cooperation with the County, a special tax assessment district for the performance of all or a portion of the maintenance and other functions now within the responsibility of the Association, together with the right of the Association to convey, lease or otherwise transfer, subject to the provisions of this Section, all or any portion of the Common Areas to said district.

ART XII Section 2 – Delegation of Use. Any Member may delegate his right of enjoyment to the Common Areas to the members of his family or his tenants who reside on his Residence, or to his guests, subject to rules and regulations adopted by the Board. In the event and for so long as an Owner delegates said rights of enjoyment to his tenants, said Owner shall not be entitled to said rights.

ART XII Section 3 – Waiver of Use. No Member may exempt himself from personal liability for Assessments duly levied by the Association, nor release the Residence owned by him from the liens, charges or other provisions of this Declaration, the Articles, Bylaws and Association Rules, by waiver of the use and enjoyment of the Common Areas, or the abandonment of his Residence.

ARTICLE XIII – EASEMENTS

ART XIII Section 1 – Amendment to Eliminate Easements. This Declaration cannot be amended to modify or eliminate the easements reserved to Declarant without prior written approval of Declarant and any attempt to do so shall have no effect. Any attempt to modify or eliminate this Section shall likewise require the prior written approval of Declarant.

ART XIII Section 2 – Nature of Easements. Unless otherwise set forth herein, any easement reserved to Declarant herein shall be nonexclusive.

ART XIII Section 3 – Certain Rights and Easements Reserved to Declarant.

A. Utilities. Easements over the Covered Property for the installation and maintenance of electric, telephone, cable television, water, gas, sanitary sewer lines and drainage facilities as are needed to service the Covered Property are hereby reserved by Declarant, together with the right to grant and transfer the same; provided, however, such easements shall not unreasonably interfere with the use and enjoyment by the Members of their Residences or the Common Areas.

B. Cable Television. There is hereby reserved to Declarant over the Covered Property, together with the right to grant and transfer the same, the right to place on, under or across the Covered Property transmission lines and other facilities for a community antenna television system and thereafter to own and convey such lines and facilities and the right to enter upon the Covered Property to service, maintain, repair, reconstruct and replace said lines or facilities; provided, however, that Line exercise of such rights shall not unreasonably interfere with any Owner’s reasonable use and enjoyment of his Residence.

C. Water Rights. There is hereby reserved to Declarant with full right and power, among others, to transfer or assign to others or to use or utilize on any other property owned or leased by Declarant, any and all water rights or interests in water rights no matter how acquired by Declarant, and owned or used by Declarant in connection with or with respect to the Covered Property, whether such water rights shall be riparian, overlying, appropriative, percolating, prescriptive or contractual, provided, however, that the reservation made herein shall not reserve to or for the benefit of Declarant any right to enter upon the surface of the Covered Property in the exercise of such rights.

D. Construction and Sales. There is hereby reserved to Declarant, together with the right to grant and transfer the same to Declarant’s sales agents and representatives and prospective purchasers of Residences, over the Covered Property as the same may from time to time exist, easements for construction, display, maintenance, sales and exhibit purposes in connection with the erection and sale or lease of Residences within the Covered Property; provided, however, that such use shall not be for a period beyond the earlier of

i. Seven (7) years from the conveyance of the first Residence by Declarant or

ii. The sale by Declarant of all Residences within the Covered Property, and provided further that no such use by Declarant and others shall otherwise unreasonably restrict the Members in the reasonable use and enjoyment of the Covered Property.

ART XIII Section 4 – Certain Easements for Owners.

A. Rights and Duties: Utilities and Cable Television. Wherever sanitary sewer house connections, water house connections, electricity, gas, telephone and cable television lines or drainage facilities are installed within the Covered Property, the Owners of any Residence served by said connections, lines or facilities shall have the right and there is hereby reserved to Declarant, together with the right to grant and transfer the same to Owners an easement to the full extent necessary for the-full use and enjoyment of such portion of such connections which service his Residence, and to enter upon the Residences owned by others, or to have utility companies enter upon the Residences owned by others, in or upon which said connections, lines or facilities, or any portion thereof lie, to repair, replace and generally maintain said connections as and when the same may be necessary as set forth below, provided that such Owner or utility company shall promptly repair any damage to a Residence caused by such entry as promptly as possible after completion of work thereon.

B. Ingress, Egress and Recreational Rights. Declarant hereby reserves to itself, its successors and assigns, and agrees that it will grant to all Owners nonexclusive easements for ingress, egress, pedestrian walkway and general recreational purposes over and upon the Common Areas. Such easements when granted to Owners shall be subject to the rights of the Association as set forth in the Article hereof entitled “Rights of Enjoyment”.

C. Exclusive Use Common Areas. The Common Areas, both before and after transfer to the Association, are subject to the unilateral right of Declarant or the Association to establish easements in, over, upon, under and through the Common Areas in favor of an individual Owner or Owners. Declarant or the Association has the right, from time to time, to grant to any Owner a nonexclusive or an exclusive easement in, over, upon, under and through portions of the Common Areas consisting of unimproved areas adjacent to the specific Owner’s Residence for use and enjoyment in connection with such Residence, subject to Section 2 of the Article XI entitled “Use Restrictions.” Declarant or the Association shall have the sole discretion to establish the size and shape of such Exclusive Use Common Areas. The conveyance of the portion of the Common Areas to an Owner shall be subject to this Declaration and the Association’s rights herein, and the Owner in each case, shall be responsible for maintenance and all liability associated with the use of such easement.

D. Maintenance and Party Wall Easement. This Section 4(d) shall apply only to Duplexes and the Owners thereof. Declarant hereby reserves to itself, its successors and assigns, with the right to grant and transfer to all Owners, reciprocal easements for access, ingress and egress in, to and upon Residences which are connected to each other by a common wall for the purpose of maintenance and repair of party walls as set forth in the Article hereof entitled “Party Walls” and maintenance and repair as set forth in Section 2(d) of the Article hereof entitled “Repair and Maintenance”, provided, however, that any entry upon an adjoining Residence must be conducted in a reasonable manner, at reasonable times and after reasonable notice to the Owner thereof., Any damage to said adjoining Residence caused as a result of such an entry shall be borne by the Owner so entering said adjoining Residence and causing such damage.

E. Side-Yard Easements. This Section 4(e) shall apply only to Patio Homes and the Owners thereof. There is hereby reserved to Declarant, together with the right to grant and transfer the same to the Owners of the Lots described as “Dominant Tenement” on Exhibit D, side-yard easements as shown on said Exhibit, which easements shall be appurtenant to the Lots described on said Exhibit as “Dominant Tenement”, and which easements shall burden the Lots described on Exhibit D as “Servient Tenement”, for the purposes of softscape landscaping, drainage, the establishment of a garden area and purposes related thereto subject to the following provisions.

i. The Owner of the Servient Tenement shall have the right at all reasonable times to enter upon the easement area, including the right to cross over the Dominant Tenement for such entry, in order to perform work related to the use and maintenance of the Servient Tenement, including without limitation, the right to install, maintain and/or replace utility lines but specifically prohibiting the right to install sprinkler lines; provided, however, that the Owner of the Servient Tenement is responsible for restoring the easement area to its previous condition which restoration shall be completed within a reasonable time. In addition, the Owner of the Servient Tenement shall use reasonable efforts to consult with the Owner of the Dominant Tenement and use his/her reasonable efforts to minimize any inconvenience to the Owner of the Dominant Tenement that may be caused by the installation, maintenance and/or replacement of any utility lines. The Owner of the Servient Tenement shall be responsible for all costs associated with:

1. 1. The installation of any utility lines,
  2. The removal of any softscape landscaping or garden area improvements and
  3. The restoration of the easement area to its previous condition.

ii. The Servien. Tenement shall have the right of drainage over, across and upon the easement area for water drainage from any dwelling or structure upon the Servient Tenement, the right to maintain eaves and appurtenances thereto and the portions of any dwelling structure upon the Servient Tenement as originally constructed or as constructed pursuant to the Article hereof entitled “Architectural Control”;

iii. The Owner of the Dominant Tenement shall not place or install any permanent improvement(s) or landscaping other than softscape landscaping in the easement area nor attach any object to a wall or dwelling belonging to the Servient Tenement or disturb the grading of the easement area or otherwise act with respect to the easement area in any manner which would damage the Servient Tenement;

iv. In exercising the right of entry upon the easement area as provided for above, the Owner of the Servient Tenement agrees to utilize reasonable care not to damage any softscape landscaping or other items permitted to exist in the easement area; provided, however, the Owner of the Servient Tenement shall not be responsible for damage to such softscape landscaping or other items permitted to exist in the easement area to the extent such damage could not be reasonably avoided in connection with such entry upon the easement area for authorized purposes; provided, further, nothing in this subsection shall relieve the owner of the Servient Tenement from repairing damage to the easement area caused by the installation of utility lines as provided in this Section 4(e)(i); and

v. In the event of any dispute arising concerning the rights and obligations created by this Section, the Owner of the Servient Tenement and the Owner of the Dominant Tenement shall each choose one (1) arbitrator, and such arbitrator shall choose one (1) additional arbitrator, and the decision of a majority of all the arbitrators shall be binding upon such Owners. All costs associated with the arbitration shall be apportioned by a majority of all the arbitrators.

F. Solar Easements. There is hereby reserved to Declarant, for the benefit of each and every Owner of a Residence, a solar easement in and through all air space over the Covered Property for the purpose of preserving access to natural sunlight or any solar energy collector which is originally constructed by Declarant. No Owner of a Residence, or person in control of a Residence, shall allow a tree or shrub to be placed, or if placed, to grow on such property, subsequent to the installation of a solar collector on the property of another so as to cast a shadow greater than ten percent (10%) of the collector absorption area upon that solar collector on the property of another at any one time between the hours of 10:00 a.m. and 2:00 p.m., provided that this Section 4(f) shall not apply to specific trees and shrubs which at the time of installation of a solar collector or during the remainder of that annual solar cycle cast a shadow upon that solar collector. Notwithstanding any other provisions of this Declaration, no structure, vegetation or land use shall penetrate the air space which is subject to the solar easement, unless express written permission is obtained from (1) the Board and (2) all Owners of Residences adjoining the Residence containing such structure or vegetation, or subject to such land use. This easement shall not preclude utility lines, antennae, wires and poles that are not otherwise prohibited by this Declaration, which penetrate the airspace covered by this solar easement.”

G. Rain Water Drainage Easements. There is hereby reserved to the Declarant together with the right to transfer and grant same, easements in and over portions of Lots for the purpose of the installation and placement of drainage pipes in order to drain rain water from roofs of Residences. No Owner shall interfere with the operation of such drainage pipes.

ART XIII Section 5 – Certain Easements for Association.

A. Association Rights. There is hereby reserved to Declarant easements over the Covered Property, which easements are hereby granted to the Association, for the purpose of permitting the Association to discharge its obligations and powers as described in this Declaration.

B. Rights and Duties: Utilities and Cable Television. Wherever sanitary sewer house connections, water house connections, electricity, gas, telephone and cable television lines or drainage facilities are installed within the Covered Property, and said connections, lines or facilities serve the Common Areas, the Association shall have the right and there is hereby reserved to Declarant, together with the right to grant and transfer the same to the Association an easement to the full extent necessary for the full use and enjoyment of such portion of such connections which service the Common Areas and to enter upon the Residences owned by others, or to have utility companies enter upon the Residences owned by others, in or upon which said connections, lines or facilities, or any portion thereof lie, to repair, replace and generally maintain said connections as and when the same may be necessary as set forth below, provided the Association or utility company shall promptly repair any damage to a Residence caused by such entry as promptly as possible after completion of work thereon.

ART XIII Section 6 – Support, Settlement and Encroachment. There is hereby reserved to Declarant the following reciprocal easements, which easements are hereby granted to the Owners, for the purposes set forth below:

A. An easement appurtenant to each Residence which is contiguous to another Residence or Common Areas which Residence shall be the dominant tenement and the contiguous Residence or Common Areas shall be the servient tenement.

B. An easement appurtenant to the Common Areas contiguous to a Residence, which Common Areas shall be the dominant tenement and which contiguous Residence shall be the servient tenement.

C. It is provided, however, that in the event Common Areas are the dominant tenement in an easement described in this Section, Declarant shall have the right to transfer said easement to the Association and not to owners.

D. Said easements shall be for the purposes of:

i. Engineering errors, errors in original construction and support and accommodation of the natural settlement or shifting of structures;

ii. Encroachment by reason of a roof or eave overhang from a Residence and for the maintenance of such roof or eave overhang by the Owner of the dominant tenement;

iii. Encroachment of fireplaces, doorsteps, foundation footings, garage doors, utilities and other appurtenances or fixtures and the maintenance thereof by the Owner of the dominant tenement, which, in the construction of the structures upon the dominant tenement or from any reconstruction or modifications of such structures, project beyond the external surface of the outer walls of such structures; and

iv. In the case of Duplexes and the Owners thereof, minor encroachments of the common wall or walls between two adjoining Residences.

ART XIII Section 7 – Atrium Lot Easements. This Section shall only apply to Lots with indoor atriums (Atrium Lots) and to Lots which are immediately adjacent to Atrium Lots. Each owner of an Atrium Lot shall have an appurtenant easement in, on, and over the “Water Receiving Area” (as defined below) of the Lot which is immediately adjacent to his/her Atrium Lot, and closest to the indoor Atrium located on such Atrium Lot, for the purpose of directing and discharging a reasonable amount of water overflow (which may be through a drainage pipe or otherwise) from the indoor atrium located on the Atrium Lot, onto such Water Receiving Area.

“Water Receiving Area” shall mean that portion of an adjacent Lot which is located between the outside wall of the Residence which faces the indoor atrium and the lot line of said adjacent lot which is closest to the indoor atrium.

ART XIII Section 8 – Driveway Easements. Reciprocal driveway easements, are hereby established over all Lots which contain portions of driveways which service more than one Lot for the purposes of pedestrian and vehicular ingress, egress and access, and for the backing, maneuvering and turning of vehicles, which easements shall be appurtenant to the Dominant Tenements and shall burden the Servient Tenements as shown on Exhibit I attached hereto and made a part hereof. Each of said easements shall be:

A. Perpetual;

B. Appurtenant to the Dominant Tenement as designated on said Exhibit; and

C. Nonexclusive, with each Subject Lot retaining the right to use the Easement Area located on such Subject Lot for the purposes of pedestrian and vehicular ingress, egress and access, for the backing, maneuvering and turning of vehicles. The Easement appurtenant to each Dominant Tenement shall be granted by Declarant to the subsequent owner of such Dominant Tenement by making a reference to this Declaration in the grant deed to such Dominant Tenement and the grant deed to the Servient Tenement and the grant deed to the Servient Tenement burdened by the easement appurtenant to such Dominant Tenement.

The Easement Areas shall be subject to the following:

1. No improvement, automobile or other vehicle, wall, curb, fence, grade differential, barrier or physical condition or personal property, shall be constructed, stored, placed or permitted to remain in, on, or upon any Easement Area, which unreasonably interferes with ingress, egress and access, whether by the owner of the Servient Tenement or the Dominant Tenement having an easement over such Easement Area.

2. With respect to each Easement Area, the Owner of the Servient Tenement on which such Easement Area is located and the Owners of the Dominant Tenement to which the easement over such Easement Area is appurtenant shall be jointly responsible for repairing and maintaining or causing to be repaired or maintained, such Easement Area at all times in a good, safe and usable condition. The expense of such repair and maintenance shall be shared by such parties in equal proportions. Notwithstanding the foregoing, any repair or maintenance for damage to any portion of such Easement Area, occurring due to causes not constituting normal wear and tear, shall be the sole responsibility of the party, or parties, causing such damage and said party, or parties, shall repair such damage within a reasonable time following the occurrence of such damage. The repair and maintenance required by this Paragraph shall include, but not be limited to:

a. Maintaining paved surfaces in a smooth and evenly covered condition with a type of surfacing material originally installed or a substitute equal in quality, use and durability to such original material;

b. Removing all papers, debris, leaves, and other refuse and sweeping, or washing, to the extent necessary to maintain an orderly condition; and

c. The repair and reconstruction of any damage resulting from fire, earthquake or other casualty.

3. Each and all of the Restrictions are “double covenants,” as said term is defined in Section 1468 of the California Civil Code, and are for the mutual benefit of the Subject Lots, the Dominant Tenements, the Servient Tenements, and every portion thereof. The Restrictions and other provisions of this Agreement shall run with the land of the Subject Lots, Dominant Tenements, Servient Tenements, and every portion thereof, and shall apply to and bind the respective successors in interest to the Subject Lots, Servient Tenements, Dominant Tenements, and every portion thereof, for the benefit of the Subject Lots, Servient Tenements, Dominant Tenements, and every portion thereof. Each and all of the Restrictions and other provisions of this Declaration are imposed on the Subject Lots, Serviene-Tenements, Dominant Tenements, and every portion thereof, as mutual equitable servitudes in favor of the Subject Lots, Servient Tenements, Dominant Tenements, and every portion thereof.

ARTICLE XIV – INTEGRATED NATURE OF THE COVERED PROPERTY

The Annexation Property and/or any other real property may be annexed to and become subject co this Declaration by any of the methods set forth hereinafter in this Article, as follows:

ART XIV Section 1 – Development of the Covered Property. Declarant intends to sequentially develop the Annexation Property on a phased basis; however, Declarant may elect not to develop all or any part of such real property, to annex such real property to this Declaration in increments of any size whatsoever, or to develop more than one such increment at any given time and in any given order. Moreover, Declarant reserves the right to subject all or any portion of the Annexation Property to the plan of this Declaration or one or more separate declarations of covenants, conditions and restrictions which subjects said property to the jurisdiction and powers of a homeowners association or other entity with powers and obligations similar to the Association and which is not subject to the provisions of this Declaration. Although Declarant shall have the ability to annex the Annexation Property as provided in this Article, Declarant shall not be obligated to annex all or any portion of such property, and such property shall not become subject to this Declaration unless and until a Supplementary Declaration shall have been so executed and recorded.

ART XIV Section 2 – Supplementary Declarations. A Supplementary Declaration shall be a writing in recordable form which annexes real property to the plan of this Declaration and which incorporates by reference all of the covenants, conditions, restrictions, easements and other provisions of this Declaration and shall contain such other provisions as set forth in this Declaration relating to Supplementary Declarations. Such Supplementary Declarations contemplated above may contain such complementary additions and modifications of the covenants, conditions and restrictions contained in this Declaration as may be necessary to reflect the different character, if any, of the annexed property and as are not inconsistent with the plan of this Declaration.

ART XIV Section 3 – Annexation Without Approval and Pursuant to General Plan. All or any part of the Annexation Property may be annexed to and become subject to this Declaration and subject to the jurisdiction of the Association without the approval, assent or vote of the Association or its Members, provided that a Supplementary Declaration covering the portion of the Annexation Property to be annexed, shall be executed and recorded by Declarant; provided, however, no Supplementary Declaration shall be so executed and recorded pursuant to this Section more than three (3) years (i) subsequent to the recordation of this Declaration or (ii) subsequent to the last recordation of a Supplementary Declaration, whichever of (i) and (ii) shall have later occurred. The recordation of said Supplementary Declaration shall constitute and effectuate the annexation of the said real property described therein, making said real property subject to this Declaration and subject to the functions, powers and jurisdiction of the Association, and thereafter said annexed real property shall be part of the Covered Property and all of the Owners of Residences in said annexed real property shall automatically be Members.

ART XIV Section 4 – Annexation Pursuant to Approval. Upon approval in writing of the Association, pursuant to a two-thirds (2/3) majority of the voting power of the Association residing in Members other than Declarant, any person who desires to add-real property, other than the Annexation Property to the plan of this Declaration and to subject such property to the jurisdiction of the Association, may file of record a Supplementary Declaration. The provisions of this Section shall also apply to the Annexation Property subsequent to the expiration of the power of Declarant to annex such property without the approval of the Members as provided in this Article. The certificate of the President and the Secretary of the Association attached to any Supplementary Declaration recorded pursuant to this Section certifying that the required two-thirds (2/3) majority of the voting power of the Association residing in Members other than Declarant has approved the recordation of such Supplementary Declaration shall be deemed conclusive proof thereof.

ART XIV Section 5 – Mergers or Consolidations. Upon a merger or consolidation of the Association with another association which merger or consolidation must be approved by two-thirds (2/3) of each class of Members, the Association’s properties, rights and obligations may, by operation of law, be transferred to the surviving or consolidated association, or, alternatively, the properties, rights and obligations of another association may, by operation of the law be added to the properties, rights and obligations of the Association as a surviving corporation pursuant to a merger. The surviving or consolidated association may administer the covenants, conditions and restrictions established by this Declaration within the Covered Property, together with the covenants, conditions and restrictions established upon any other property as one plan. Notwithstanding the foregoing, so long as there is a class B membership, any merger or consolidation of the Association shall require the prior approval of the V.A.; provided, however, that such approval will not be unreasonably withheld.

ART XIV Section 6 – Limitation Upon Annexation. Notwithstanding the foregoing Sections of this Article, no annexation of additional real property to this Declaration, unless there has been approval thereof by a majority of the voting power of the Association, shall have the effect of either overburdening the common interests of the then existing Owners, except as set forth in this Declaration or substantially increasing the Assessments of such Owners if such increase has not been disclosed in the California Department of Real Estate’s Final Subdivision Public Report applicable to such Owner’s Residence. Any property annexed to the Covered Property by the Declarant, in accordance with the provisions of this Declaration, may be removed by Declarant as a portion of the Covered Property and from the jurisdiction of this. Declaration and the Association at any time by the recordation of an appropriate Declaration of Removal, provided that such removal shall take place before any Residence in the annexed parcel has been sold by Declarant to a member of the general-public and if there is a class B membership, V.A. approval has been obtained. Any property which is removed by Declarant may be annexed, at a future date, to the Covered Property in accordance with the provisions of this Declaration.

ARTICLE XV – RIGHTS OF LENDERS

ART XV Section 1 – Filing Notice; Notices and Approvals. A Mortgagee shall not be entitled to receive any notice which this Declaration requires the. Association to deliver to Mortgagees unless and until such Mortgagee, or its mortgage servicing contractor, has delivered to the Board a written notice stating that such Mortgagee is the holder of a Mortgage encumbering a Residence within the Covered Property. Such notice need not state which Residence or Residences are encumbered by such Mortgage, but shall state whether such Mortgagee is a First Mortgagee. Wherever the approval of all or a specified percentage of Mortgagees is required pursuant to this Declaration, it shall be deemed to mean the vote or approval of all or a specified percentage only of those Mortgagees which have delivered such notice to the Board. Notwithstanding the foregoing, if any right of a Mortgagee under this Declaration is conditioned on a specific written request to the Association, in addition to having delivered the notice provided in this Section, a Mortgagee must also make such request, either in a separate writing delivered to the Association or in the notice provided above-in this Section, in order to be entitled to such right. Except as provided in this Section, a Mortgagee’s rights pursuant to this Declaration, including, without limitation, the priority of the lien of Mortgages over the lien of Assessments levied by the Association hereunder shall not be affected by the failure to deliver a notice to the Board. Any notice or request delivered to the Board by a Mortgagee shall remain effective without any further action by such Mortgagee for so long as the facts set forth in such notice or request remain unchanged.

ART XV Section 2 – Priority of Mortgage Lien. No breach of the covenants, conditions or restrictions herein contained, nor the enforcement of any lien provisions herein, shall affect, impair, defeat or render invalid the lien or charge of any First Mortgage made in good faith and for value encumbering any Residence, but all of said covenants, conditions and restrictions shall be binding upon and effective against any Owner whose title is derived through foreclosure or trustee’s sale, or otherwise, with respect to a Residence except as otherwise provided in this Article.

ART XV Section 3 – Curing Defaults. A Mortgagee or the immediate transferee of such Mortgagee, who acquires title by judicial foreclosure, deed in lieu of foreclosure or trustee’s sale shall not be obligated to cure any breach of the provisions of this Declaration which is noncurable or of a type which is not practical or feasible to cure. The determination of the Board made in good faith as to whether a breach is noncurable or not feasible to cure shall be final and binding on all Mortgagees.

ART XV Section 4 – Resale. It is intended that any loan to facilitate the resale of any Residence after judicial foreclosure, deed in lieu of foreclosure or trustee’s sale is a loan made in good faith and for value and entitled to all of the rights and protections afforded to other Mortgagees

ART XV Section 5 – Relationship with Assessment Liens.

A. The lien provided for in the Article hereof entitled “Nonpayment of Assessments” for the payment of Assessments (excepting Remedial Assessments) shall be subordinate to the lien or any First Mortgage which was recorded prior to the date any such Assessment becomes due.

B. If any Residence subject to a monetary lien created by any provision hereof shall to subject to the lien of a First Mortgage: (1) the foreclosure of any lien created by anything set forth in this Declaration shall not operate to affect or impair the lien of such First Mortgage; and (2) the foreclosure of the lien of said First Mortgage, (such events being hereinafter referred to as “Events of Foreclosure”) shall not operate to affect or impair the lien hereof, except that any persons who obtain an interest through any of the Events of Foreclosure, and their successors in interest, shall take title free of the lien hereof or any personal obligation for said charges as shall have accrued up to the time of any of the Events of Foreclosure, but subject to the lien hereof for all said charges that shall accrue subsequent to the Events of Foreclosure.

C. Any Mortgagee who obtains title to a Residence by reason of any of the Events of Foreclosure, or any purchaser at a private or judicial foreclosure sale, shall take title to such Residence free of any lien or claim for unpaid Assessments against such Residence which accrue prior to the time such Mortgagee or purchaser takes title to such Residence, except for liens or claims for a share of such Assessments resulting from pro rata reallocation of such Assessments to all Residences within the Covered Property.

D. Nothing in this Section shall be construed to release any Owner from his obligations to pay for any Assessment levied pursuant to this Declaration.

ART XV Section 6 – Seventy-Five Percent (75%) Vote of Institutional Mortgagees. Except upon the prior written approval of at least seventy-five percent (75%) of Institutional Mortgagees, based on one (1) vote for each First Mortgage held, neither the Association nor the Members shall be entitled to do any of the following:

A. Dissolve the Association or abandon or terminate the maintenance of the Common Areas by the Association;

B. Amend a material provision to the Declaration or to the Bylaws of the Association, provided “material amendment” shall mean amendments governing the following subjects:

1. The fundamental purpose for which the Project was created (such as a change from residential use to a different use).
2. Voting.
3. Assessments, assessment liens, and subordination thereof.
4. The reserve for repair and replacement of the Common Areas.
5. Property maintenance obligations.
6. Casualty and liability insurance.
7. Reconstruction in the event of damage or destruction.
8. Rights to use the Common Areas.
9. Annexation.
10. Any provision, which by its terms, is specifically for the benefit of First Mortgagees, or specifically confers rights of First Mortgagees.

E. Effectuate any decision to terminate professional management and assume self-management of the Covered Property; or

D. Abandon, partition, sell, alienate, subdivide, release, transfer, hypothecate or otherwise encumber the Common Areas; provided, however, the granting of easements for public utilities or other public purposes consistent with the intended use of the Common Areas shall not require such approval.

ART XV Section 7 – Other Rights of Institutional Mortgagees. Any Institutional Mortgagee or its mortgage servicing contractor, shall, upon written request to the Association, be entitled to:

A. Inspect the books and records of the Association during normal business hours;

B. Receive the annual audited financial statement of the Association ninety (90) days following the end of the Association’s fiscal year;

C. Receive written notice of all annual and special meetings of the Members of the Board, and Institutional Mortgagees shall further be entitled to designate a representative to attend all such meetings in order to. among other things, draw attention to violations of this Declaration which have not been corrected or made the subject of remedial action by the Association; provided, however, nothing contained in this Section shall give an Institutional Mortgagee the right to call a meeting of the Board or of the Members for any purpose or to vote at any such meeting; and

D. Receive written notification from the Association of any default in the performance of the obligations imposed by this Declaration by the Owner whose Residence is encumbered by such Institutional Mortgagee’s Mortgage, which default has not been cured within sixty (60) days of a request therefor by the Association; provided, however, the Association shall only be obligated to provide such notice to Institutional Mortgagees who have delivered a written request therefor to the Association specifying the Residence or Residences to which such request relates.

ART XV Section 8 – Mortgagees Furnishing Information. Mortgagees are hereby authorized to furnish information to the Board concerning the status of any Mortgage.

ART XV Section 9 – Right of First Refusal. In the event this Declaration is amended to provide for any right of first refusal to purchase or lease a Residence in the Association, a Mortgagee who comes into possession of a Residence pursuant to a judicial foreclosure, a deed in lieu of foreclosure or a trustee’s sale shall be exempt therefrom. In addition conveyances to and from third party foreclosure purchasers and mortgage insurers and guarantors shall also be exempt.

ART XV Section 10 – Conflicts. In the event of any conflict between any of the provisions of this Article and any of the other provisions of this Declaration, the provisions of this Article shall control.

ART XV Section 11 – Voting Rights of Institutional Mortgagees. In the event of a default by an Owner in any payment due under the terms of any Institutional Mortgage held by an Institutional Mortgagee or the promissory note secured thereby, the Institutional Mortgagee or his representative shall have the right, upon giving written notice to such defaulting Owner and the Association and placing of record a notice of default, to exercise the voting rights of such defaulting Owner attributable to such Residence at any regular or special meeting of the Members held during such time as such default may continue. Any such Owner’s voting rights shall be restored to him at such time as such default is cured.

ART XV Section 12 – Notice of Destruction or Taking. In the event that any Common Areas, or any portion thereof, is substantially damaged or is made the subject of any condemnation proceeding in eminent domain or is otherwise sought to be acquired by a condemning authority, the Board shall promptly notify any Institutional Mortgagee affected by such destruction, taking or threatened taking. As used herein, “substantially damaged” or “taking” shall mean damage or taking exceeding Ten Thousand Dollars ($10,000). If requested in writing by an Institutional Mortgagee, the Association shall evidence its obligations under this Section in a written agreement in favor of such Institutional Mortgagee.

ART XV Section 13 – Payment of Taxes or Premiums by Institutional Mortgagees. Institutional Mortgagees may, jointly or singly, pay taxes or other charges which are in default and which may or have become a charge against the Common Areas, unless such taxes or charges are separately assessed against the Owners, in which case the rights of Institutional Mortgagees shall be governed by the provisions of their Mortgages. Institutional Mortgagees may, jointly or singly, also pay overdue premiums on hazard insurance policies, or secure new hazard insurance coverage on the lapse of a policy, for the Common Areas and Institutional Mortgagees making such payments shall be owed immediate reimbursement therefor from the Association. Entitlement to such reimbursement shall be reflected in an agreement in favor of any Institutional Mortgagee which requests the same to be executed by the Association.

ARTICLE XVI – PARTY WALLS

ART XVI Section 1 – Definition of Party Wall. This Article shall apply only to Duplexes and the Owners thereof. Each wall which is built as a part of the original construction of the Residences upon the Covered Property and placed on the dividing line between the Lots therein shall constitute a party wall, and, to the extent not inconsistent with the provisions of this Article, the general rules of law regarding party walls and liability for property damage due to negligence or willful acts or omissions shall apply thereto. A party wall shall be considered to adjoin and abut against the property line dividing the Residences from the bottom of the foundation over the full length and height of any structure or wall.

ART XVI Section 2 – Use of Party Wall. Owners whose Residences are separated by a party wall shall equally have the right to use such party wall, except that each shall have the right to have the exclusive use of the surface of the wall on his side. Neither such Owner shall use any portion of such party wall so as to interfere with the use and enjoyment of the other Owner.

ART XVI Section 3 – Sharing of Repair and Maintenance. The cost of reasonable repair and maintenance of a party wall shall be shared by the Owners who make use of the wall in proportion to such use.

ART XVI Section 4 – Destruction by Fire or Other Casualty. If a party wall is destroyed or damaged by fire or other casualty, any Owner who has used the wall may restore it, and if the other Owners thereafter make use of the wall, they shall contribute to the cost of restoration thereof in proportion to such use without prejudice, however, to the right of any such Owners to call for a larger contribution from the others under any rule of law regarding liability for negligent or willful acts or omissions.

ART XVI Section 5 – Weatherproofing. Notwithstanding any other provision of this Article, an Owner who by his negligent or willful act causes the party wall to be exposed to the elements shall bear the whole cost of furnishing the necessary protection against such elements.

ART XVI Section 6 – Right of Contribution Runs with Land. The right of any Owner to contribution from any other Owner under this Article shall be appurtenant to the land and shall pass to such Owner’s successors in title.

ART XVI Section 7 – Arbitration. In the event of any dispute arising concerning a party wall, or under the provisions of this Article, said dispute shall be submitted to the Board for a resolution thereof. In the event the Board cannot or will not resolve such dispute it shall employ an arbitrator for said purpose. Said arbitrator shall be selected at the discretion of the Board but shall be a member of the American Arbitration Association. The arbitrator which is chosen by the Board shall resolve said dispute pursuant to the prevailing rules of the American Arbitration Association and the requirements of the law of the State of California.

ARTICLE XVII – GENERAL PROVISIONS

ART XVII Section 1 – Enforcement. The Association, or any Owner, or the County, shall have the right to enforce by proceedings at law or in equity, all restrictions, conditions, covenants and reservations, now or hereafter imposed by the provisions of this Declaration or any amendment thereto, including the right to prevent the violation of any such restrictions, conditions, covenants, or reservations and the right to recover damages or other duet for such violation. The Association or any Owner or the County shall also have the right to enforce by proceedings at law or in equity the provisions of the Articles or Bylaws and any amendments thereto. With respect to architectural control and Association Rules, the Association shall have the exclusive right to the enforcement thereof unless the Association refuses or is unable to effectuate such enforcement, in which case any Owner who otherwise has standing shall have the right to undertake such enforcement. With respect to Assessment liens, the Association and the County shall have the exclusive right to the enforcement thereof.

ART XVII Section 2 – No Waiver. Failure by the Association or by any Member to enforce any covenant, condition, or restriction herein contained, or the Articles, Bylaws or Association Rules, in any certain instance or on any particular occasion shall not be deemed a waiver of such right on any such future breach of the same or any other covenant, condition or restriction.

ART XVII Section 3 – Cumulative Remedies. All rights, options and remedies of Declarant, the Association, the Owners or Mortgagees under this Declaration are cumulative, and not one of them shall be exclusive of any other, and Declarant, the Association, the Owners and the Mortgagees shall have the right to pursue any one or all of such rights, options and remedies or any other remedy or relief which may be provided by law, whether or not stated in this Declaration.

ART XVII Section 4 – Severability. Invalidation of any one or a portion of these covenants, conditions or restrictions by judgment or court order shall in no way affect any other provisions which shall remain in full force and effect.

ART XVII Section 5 – Covenants to Run with the Land; Term. The covenants, conditions and restrictions of this Declaration shall run with and bind the Covered Property and shall inure to the benefit of and be enforceable by the Association or any Owner, their respective legal representatives, heirs, successors and assigns, for a term of sixty (60) years from the date this Declaration is recorded, after which time said covenants, conditions and restrictions shall be automatically extended for successive periods of ten (10) years, unless an instrument, signed by a majority of the then Owners and seventy-five percent (75%) of the Institutional Mortgagees, based on one (1) vote for each First Mortgage held, has been recorded at least one (1) year prior to the end of any such period, agreeing to terminate said covenants, conditions and restrictions in whole or in part.

ART XVII Section 6 – Sale or Title Transfer. Any owner, prior to the sale or transfer of his interest, must provide the prospective purchaser with a copy of (1) this Declaration, (2) the Bylaws, (3) the Articles, (4) the most recent financial statements and (5) a statement from an authorized representative of the Association listing all unpaid assessments and charges against the interest being sold.

The Association shall provide any Owner with a copy of the items listed in the preceding paragraph within 10 days of receiving a written request. The Association’s fee for this service shall not exceed the cost of providing these items.

The Association shall not collect any fee- in connection with any transfer of title except the Association’s actual costs to change records.

ART XVII Section 7 – Construction. The provisions of this Declaration shall be liberally construed to effectuate its purpose of creating a plan for the development of a residential community or tract and for the maintenance of the Covered Property. The Article and Section headings have been inserted for convenience only, and shall not be considered or referred to in resolving questions of interpretation or construction.

ART XVII Section 8 – Singular Includes Plural. Whenever the context of this Declaration requires same, the singular shall include the plural and the masculine shall include the feminine and the neuter.

ART XVII Section 9 – Nuisance. The result of every act or omission, whereby any provision, condition, restriction, covenant, easement, or reservation contained in this Declaration is violated in whole or in part, is hereby declared to be and constitutes a nuisance, and every remedy allowed by law or equity against a nuisance, either public or private, shall be applicable against every such result, and may be exercised by the Association or any Member. Such remedy shall be deemed cumulative and not exclusive.

ART XVII Section 10 – Attorneys’ Fees. In the event action is instituted to enforce any of the provisions contained in this Declaration, the party prevailing in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorneys’ fees and costs of such suit.

ART XVII Section 11 – Notices. Any notice to be given to an Owner, the Association or a Mortgagee or mortgage servicing contractor under the provisions of this Declaration shall be in writing and may be delivered as follows:

A. Notice to an Owner shall be deemed to have been properly delivered when delivered to the Owner’s Residence, whether said Owner personally receives said notice or not, or placed in the first class United States mail, postage prepaid, to the most recent address furnished by such Owner in writing to the Association for the purpose of giving notice, or if no such address shall have been furnished, then to the street address of such Owner’s Residence. Any notice so deposited in the mail within the County shall be deemed delivered forty-eight (48) hours after such deposit. In the case of co-Owners, any such notice may be delivered or sent to any one of the co-Owners on behalf of all co-Owners and shall be deemed delivery on all such co-Owners.

B. Notice to a Mortgagee or its mortgage servicing contractor shall be deemed to have been properly delivered when placed in the first class United States mail, postage prepaid, to the address furnished to the Association by such Mortgagee or such contractor for the purposes of notice or, if no such address is furnished, to any office of the Mortgagee in the County, or if no such office is located in the County, to any office of such Mortgagee.

C. The affidavit of an Officer or authorized agent of the Association declaring under penalty of perjury that a notice has been mailed to any Owner or Owners, to any Mortgagee or Mortgagees shown on the records of the Association, shall be deemed conclusive proof of such mailing, whether or not such notices are actually received.

ART XVII Section 12 – Obligations of Declarant. So long as Declarant is utilizing the easement described in the Section entitled “Construction and Sales” of the Article in this Declaration entitled “Easements”, Declarant shall not be subject to the provisions of the Article entitled “Architectural Control” or the provisions of the Article entitled “Use Restrictions” to the extent necessary to exercise Declarant’s rights and fulfill Declarant’s duties with regard to the development and disposal of the Covered Property.

ART XVII Section 13 – Effect of Declaration. This Declaration is made for the purposes set forth in the Recitals to this Declaration and Declarant makes no warranties or representations, express or implied, as to the binding effect or enforceability of all or any portion of this Declaration, or as to the compliance of any of these provisions with public laws, ordinances and regulations applicable thereto.

ART XVII Section 14 – Personal Covenant. To the extent the acceptance of a conveyance of a Residence creates a personal covenant between the Owner of such Residence and Declarant or other Owners, such personal covenant shall terminate and be of no further force or effect from and after the date when a person or entity ceases to be an Owner except to the extent this Declaration may provide otherwise with respect to the payment of money to the Association.

ART XVII Section 15 – Nonliability of Officials. To the fullest extent permitted by law, neither the Board, the Architectural Committee, any other committees of the Association or any member of such Board or committee shall be liable to any Member of the Association for any damage, loss or prejudice suffered or claimed on account of any decision, approval or disapproval of plans or specifications (whether or not defective), course of action, act, omission, error, negligence or the like made in good faith within which such Board, committees or persons reasonably believed to be the scope of their duties.

ART XVII Section 16 – Enforcement of Bonded Obligations. In the event that the improvements to the Common Areas have not been completed prior to the issuance of a Final Subdivision Public Report covering the Covered Property, and the Association is obligee under a bond or other arrangement (hereinafter the “Bond”) to secure performance of the commitment of Declarant to complete such improvements, the following provisions shall apply:

A. The Board shall consider and vote on the question of action by the Association to enforce the obligations under the Bond with respect to any improvements for which a Notice of Completion has not been filed within sixty (60) days after the completion date specified for such improvements in the Planned Construction Statement appended to the Bond. If the Association has given an extension in writing for the completion of any Common Areas improvement, the Board stall consider and vote on the aforesaid question if a Notice of Completion has not been filed within thirty (30) days after the expiration of such extension.

B. In the event that the Board determines not to initiate action to enforce the obligations under the Bond, or in the event the Board fails to consider and vote on such question as provided above, the Board shall call a special meeting of the Members for the purpose of voting to override such decision or such failure to act by the Board. Such meeting shall be called according to the provisions of the Bylaws dealing with meetings of the Members, but in any event such meeting shall be held not less than thirty-five (35) days nor more than ninety (90) days after receipt by the Board of a petition for such meeting signed by Members representing five percent (5%) of the total voting power of the Association.

C. The only Members entitled to vote at such meeting of Members shall be the Owners other than Declarant. A vote at such meeting of a majority of the voting power of such Members other than Declarant to take such action to enforce the obligations under the Bond shall be deemed to be the decision by initiating and pursuing appropriate action in the name of the Association.

ART XVII Section 17 – Leases. Any agreement for the leasing or rental of a Residence (hereinafter in this Section referred to as a “lease”) shall provide that the terms of such lease shall be subject in all respects to the provisions of this Declaration, the Articles, the Bylaws, the Association Rules and any applicable agreements between the Association and any of the Federal Agencies. Said lease shall further provide that any failure by the lessee thereunder to comply with the terms of the foregoing documents shall be a default under the lease. All leases shall be in writing. Any Owner who shall lease his Residence shall be responsible for assuring compliance by such Owner’s lessee with this Declaration, the Articles, the Bylaws and the Association Rules. No Residence shall be leased for transient or hotel purposes, which shall be defined as rental for any period less than thirty (30) days or any rental whatsoever, if the occupants of the Residence are provided customary hotel services such as room service for food and beverage, maid service, furnishing laundry and linen and bellboy service.

ART XVII Section 18 – Construction by Declarant. Nothing in this Declaration shall limit the right of Declarant to alter the Common Areas or Residences, or to construct such additional improvements as Declarant deems advisable prior to completion of improvements upon and the sale of the entire Development. Such right shall include but shall not be limited to erecting, constructing and maintaining on the Covered Property such structures and displays as may be reasonably necessary for the conduct of the business of completing the work and disposing of the same by sale, lease or otherwise. This Declaration shall not limit the right of Declarant at any time prior to acquisition of title by a purchaser from Declarant to establish on the Covered Property additional licenses, reservations and rights-of-way to itself, to utility companies, or to others as may from time to time be reasonably necessary to the proper development and disposal of the Development. Declarant reserves the right to alter its construction plans and designs as it deems appropriate. The rights of Declarant hereunder may be assigned to any successor or successors to all or part of said entity’s respective interest in the Development, by an express assignment incorporated in a recorded deed or lease, as the case may be, transferring such interest to such successor. Declarant shall exercise its rights contained in this provision in such a way as not to unreasonably interfere with the Members’ rights to use and enjoy the Covered Property.

ART XVII Section 19 – Amendments. Subject to the other provisions of this Declaration, including, without limitation, the rights of Mortgagees pursuant to the Articles hereof entitled “Insurance” and “Rights of Lenders”, or otherwise, this Declaration may be amended as follows:

A. Until such time as there is a Class A membership pursuant to this Declaration, amendments or modifications shall be effective when executed by Declarant and when recorded in the Official Records of the County. Thereafter as long as there is a Class B membership, any amendments shall require the affirmative written consent or vote of not less than sixty-seven percent (67%) of the voting power of the Association. After the Class B membership has been converted to Class A membership, amendments to this Declaration may be enacted only by the vote or written assent of Members representing both sixty-seven percent (67%) of is the total voting power of the Association and a majority of the voting power of the Association residing in Members other than the Declarant.

B. In addition to the foregoing, any amendment or modification of the Articles hereof entitled “Covenant for Maintenance Assessments”, “Nonpayment of Assessments”, Architectural Control”, “Repair and Maintenance”, “Destruction of Improvements” and “Eminent Domain” shall additionally require the prior written approval of not less than sixty-seven percent (67%) of the Class A Members.

C. An amendment or modification that requires the vote and written assent of the Members as hereinabove provided shall be effective when executed by the President and Secretary of the Association who shall certify that the amendment or modification has been approved as hereinabove provided, and when recorded in the Official Records of the County. The notarized signature of the Members shall not be required to effectuate an amendment of this Declaration.

D. Notwithstanding the foregoing, any provisions of this Declaration, or the Articles, Bylaws or Association Rules which expressly requires the approval of a specified percentage of the voting power of the Association for action to be taken under said provision can be amended only with the affirmative vote or written assent of not less than the same percentage of the voting power of the Association.

E. The Association, or any Owner, may petition the County superior court for an order reducing the percentage of the affirmative votes necessary to amend this Declaration. The petition shall describe the effort that has been made to solicit approval of the Association members in the manner provided in this Declaration. The Petition shall also describe number of affirmative and negative votes actually received, the percentage of affirmative votes required to effect the amendment in accordance with this Declaration, an,. other matters the petitioner considers relevant to the court’s determination. The petition shall also contain as exhibits thereto, copies of all of the following: (1) the governing documents, (2) a complete text of the amendment, (3) copies of solicitation and notice materials utilized in the solicitation of owner approvals, (4) a short explanation of the reason for the amendment, and (5) any other documentation relevant to the court’s determination.

F. Notwithstanding the amendment procedures set forth above, Declarant reserves the right to unilaterally make certain amendments (“Exhibit Amendments”) to the exhibits attached hereto to amend said exhibits to more precisely describe the actual sizes and locations of the areas or improvements described on said exhibits. Declarant shall effect such changes by preparing or causing to be prepared, and recording or causing to be recorded, a declaration in a form determined by Declarant or as part of any Supplementary Declaration.

G. Notwithstanding anything else in this Declaration to the contrary, any amendment to this Declaration must be approved by the V.A. so long as the developer controls the Association or a class of membership; provided, however, that such approval will not be unreasonably withheld.

IN WITNESS WHEREOF, Declarant has executed this instrument the day and year first hereinabove written.

VALENCIA COMPANY, a Division
of The Newhall Land and Farming
Company, (a California limited
partnership) a limited partnership

By: _______________
Thomas E. Dierckman
Authorized Agent

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