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HomeMy WebLinkAboutCT 05-12; Ocean Street Residences; Tentative Map (CT) (3)RECORDING REQUESTED BY: FIRST AMERICAN TITLE COMPANY WHEN RECORDED, MAIL TO: JACKSONIDeMARCOITIDUS !PECKENPAUGH (SLM) 2030 Main Street, Suite 1200 Irvine, CA 92614 (Space Above for Recorder's Use) DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND RESERVATION OF EASEMENTS FOR OCEAN STREET NOTE: CERTAIN DISPUTES ARISING UNDER THIS DECLARATION, INCLUDING DISPUTES CONCERNING THE DESIGN OR CONSTRUCTION OF THE COMMUNITY, SHALL BE SUBMITTED TO JUDICIAL REFERENCE OR BINDING ARBITRATION IN ACCORDANCE WITH SECTION 12.4. If this document contains any restriction based on race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, familial status, marital status, disability, genetic information, national origin, source of income as defined in subdivision (p) of Section 12955, or ancestry, that restriction violates state and federal fair housing laws and is void, and may be removed pursuant to Section 12956.2 of the Government Code. Lawful restrictions under state and federal law on the age of occupants in senior housing or housing for older persons shall not be construed as restrictions based on familial status. 2294-00233\CCRS\1149361.1 6/7/13 TABLE OF CONTENTS DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND RESERVATION OF EASEMENTS ARTICLE 1 1.1 1.2 ARTICLE2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 FOR OCEAN STREET Page DEFINITIONS AND INTERPRETATION ..................................................... 2 Definitions ......................................................................................................... 2 Interpretation ................................................................................................... 11 MAINTENANCE COVENANTS AND USE RESTRICTIONS ................... 13 Repair and Maintenance .................................................................................. 13 Water Meters ................................................................................................... 17 Single-Family Dwelling .................................................................................. 18 Further Subdivision ......................................................................................... 18 Leasing and Rental .......................................................................................... 18 Resale .............................................................................................................. l9 Business and Commercial Activities .............................................................. 19 Nuisances ........................................................................................................ 20 Signs ................................................................................................................ 22 Parking and Vehicular Restrictions ................................................................. 23 Storage Spaces ................................................................................................ 26 Owner Maintenance of Exclusive Use Areas .................................................. 27 Animal Regulations ......................................................................................... 27 Antenna and Satellite Dish Restrictions .......................................................... 28 Trash ................................................................................................................ 29 Owner-Installed Improvements ....................................................................... 29 Mechanics' Liens ............................................................................................ 30 Drainage .......................................................................................................... 30 Water Supply System ...................................................................................... 31 View Obstructions ........................................................................................... 31 Rights ofDisabled ........................................................................................... 32 Temporary Buildings ...................................................................................... 32 Prohibited Residential Uses ............................................................................ 32 Association Property ....................................................................................... 32 -1-2294-00233\CCRS\1149361.1 617/13 2.25 2.26 ARTICLE3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 ARTICLE4 4.1 4.2 4.3 4.4 4.5 4.6 ARTICLE 5 5.1 5.2 TABLE OF CONTENTS (continued) Page Mineral Exploration and Extraction ................................................................ 32 Post-Tension Concrete Slabs ........................................................................... 32 DISCLOSURES .............................................................................................. 32 No Representations or Warranties .................................................................. 33 Access Facilities .............................................................................................. 33 Electric Power Lines, Wireless Communications Facilities, and Human Health .............................................................................................................. 33 Urban Environment ......................................................................................... 34 Surrounding Uses ............................................................................................ 34 Beach and Lagoon Access .............................................................................. 35 Property Lines ................................................................................................. 3 5 Sewer Backflow Prevention Valve ................................................................. 35 Utility Improvements ...................................................................................... 35 Mold ................................................................................................................ 36 Radon .............................................................................................................. 36 Supplemental Real Property Taxes ................................................................. 37 Megan's Law Notice ....................................................................................... 37 Change in Plans ............................................................................................... 3 8 No Enhanced Protection Agreement.. ............................................................. 38 Additional Provisions ...................................................................................... 38 THE ASSOCIATION ..................................................................................... 38 General Duties and Powers ............................................................................. 38 Specific Duties and Powers ............................................................................. 38 Standard of Care, Non-Liability ...................................................................... 45 Membership .................................................................................................... 46 Voting Rights .................................................................................................. 48 Unsegregated Real Property Taxes ................................................................. 49 DESIGN REVIEW COMMITTEE ................................................................. 50 Members of Committee ................................................................................... 50 Powers and Duties ........................................................................................... 50 -11-2294-00233\CCRS\1149361.1 6/7/13 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 ARTICLE6 6.1 6.2 6.3 6.4 ARTICLE 7 7.1 7.2 7.3 7.4 7.5 7.6 7.7 ARTICLES 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 TABLE OF CONTENTS (continued) Page Review of Plans and Specifications ................................................................ 50 Meetings and Actions of the Design Review Committee ............................... 54 No Waiver of Future Approvals ...................................................................... 54 Compensation of Members ............................................................................. 54 Inspection ofWork .......................................................................................... 54 Variances ......................................................................................................... 55 Pre-Approvals ................................................................................................. 55 Appeals ............................................................................................................ 55 PROPERTY EASEMENTS AND RIGHTS ................................................... 56 Easements ........................................................................................................ 56 Additional Easements ...................................................................................... 58 Delegation ofUse ............................................................................................ 58 Right ofEntry .................................................................................................. 58 ASSOCIATION MAINTENANCE FUNDS AND ASSESSMENTS ........... 59 Personal Obligation to Pay Assessments ........................................................ 59 Association Maintenance Funds ..................................................................... 59 Purpose of Assessments .................................................................................. 59 Waiver of Use ................................................................................................. 60 Limits on Annual Assessment Increases ......................................................... 60 Annual Assessments ....................................................................................... 61 Capital Improvement Assessments ................................................................. 62 INSURANCE .................................................................................................. 62 Duty to Obtain Insurance; Types .................................................................... 62 Waiver of Claim Against Association ............................................................. 64 Right and Duty of Owners to Insure ............................................................... 64 Notice of Expiration Requirements ................................................................. 64 Trustee For Policies ......................................................................................... 64 Actions as Trustee ........................................................................................... 65 Annual Insurance Review ............................................................................... 65 Required Waiver ............................................................................................. 65 -iii-2294.00233\CCRS\1149361.1 6/7/13 ARTICLE9 9.1 9.2 9.3 9.4 ARTICLE 10 10.1 10.2 10.3 10.4 10.5 10.6 10.7 ARTICLE 11 11.1 11.2 ARTICLE 12 12.1 12.2 12.3 12.4 ARTICLE 13 13.1 13.2 ARTICLE 14 14.1 14.2 14.3 14.4 TABLE OF CONTENTS (continued) Page DESTRUCTION OF IMPROVEMENTS ...................................................... 66 Restoration of the Community ........................................................................ 66 Sale of Community and Right to Partition ...................................................... 66 Interior Damage .............................................................................................. 67 Notice to Owners and First Mortgagees ......................................................... 67 EMINENT DOMAIN ..................................................................................... 67 Property Condemnation .................................................................................. 67 Condemnation of Association Property .......................................................... 68 Condemnation of Exclusive Use Area ............................................................ 68 Condemnation of Condominiums ................................................................... 68 Condemnation of Portions of Units ................................................................ 68 Portions of A wards in Condemnation not Compensatory for Value of Real Property ................................................................................................... 69 Notice to Owners and First Mortgagees ......................................................... 69 RIGHTS OF MORTGAGEES ........................................................................ 69 General Protections ......................................................................................... 69 Additional Rights ............................................................................................ 69 ENFORCEMENT AND DISPUTE RESOLUTION ...................................... 70 Enforcement of Governing Documents .......................................................... 70 Delinquent Assessments ................................................................................. 72 Enforcement of Bonded Obligations ............................................................... 77 Disputes with Declarant Parties ...................................................................... 78 DURATION AND AMENDMENT ............................................................... 84 Duration ........................................................................................................... 84 Termination and Amendment ......................................................................... 84 GENERAL PROVISIONS ............................................................................. 87 Mergers or Consolidations .............................................................................. 87 No Public Right or Dedication ........................................................................ 87 Notices ............................................................................................................. 87 Constructive Notice and Acceptance .............................................................. 88 -IV-2294.()0233\CCRS\1149361.1 617/13 ARTICLE 15 15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9 15.10 15.11 ARTICLE 16 16.1 16.2 16.3 16.4 16.5 TABLE OF CONTENTS (continued) Page DECLARANT'S RIGHTS AND RESERVATIONS ..................................... 88 Construction Rights ......................................................................................... 88 Sales and Marketing Rights ............................................................................ 89 Creating Additional Easements ....................................................................... 89 Architectural Rights ........................................................................................ 89 Developer Exemption ...................................................................................... 90 Assignment ofRights ...................................................................................... 90 Amendment to Article ..................................................................................... 90 Power of Attorney ........................................................................................... 90 Participation in Association ............................................................................ 90 Declarant Approval of Actions ....................................................................... 91 Marketing Name .............................................................................................. 91 ANNEXATION OF ADDITIONAL PROPERTY ......................................... 92 Additions By Declarant... ................................................................................ 92 Other Additions ............................................................................................... 92 Added Area Rights and Obligations ............................................................... 92 Notice of Addition ........................................................................................... 92 De-Annexation and Amendment. .................................................................... 93 LENDER SUBORDINATION EXHIBIT A LEGAL DESCRIPTION OF ANNEXABLE AREA EXHIBITB ARTICLES OF INCORPORATION OF THE ASSOCIATION EXHIBIT C BYLAWS OF THE ASSOCIATION EXHIBIT D SPECIFIC MAINTENANCE OBLIGATIONS **[EXHIBIT E LOCATIONS OF ASSIGNED PARKING SPACES]** **[EXHIBIT F LOCATIONS OF ASSIGNED STORAGE SPACES]** **[EXHIBIT G ELEMENTS OF VARIABLE ANNUAL ASSESSMENTS]** -v-2294·00233\CCRS\1149361.1 617/13 DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND RESERVATION OF EASEMENTS FOR OCEAN STREET This Declaration of Covenants, Conditions, Restrictions and Reservation of Easements is made by OCEAN STREET 8 OWNER, LLC, a Delaware limited liability company. The capitalized terms used in the Preamble below are defined in Article I. PREAMBLE A. Declarant is the owner of real property ("Phase 1 ") in the City of Carlsbad, County of San Diego County, State of California, described as follows: That portion of Lot I of Tract No. CT 05-12, as shown on a subdivision map Recorded in Book __ , at Pages to __ , inclusive, of Maps, in the Office of the San Diego County Recorder, which portion is shown and described in that certain Condominium Plan for Ocean Street (Phase I), Recorded as Instrument No. , of Official Records. The Condominium Plan referenced above depicts Units ___ _ Association Property and Common Area. B. In accordance with California Civil Code Section 1353(a)(l), Declarant intends to create a "common interest development" within the meaning of California Civil Code Section 1351(c), which is also a "condominium project," as defined in California Civil Code Section 1351(£), and a "subdivision," as defined in California Business and Professions Code Section II 000. Declarant intends to impose mutually beneficial restrictions under a general plan for subdividing, maintaining, improving and selling the Condominiums in the Community for the benefit of all the Condominiums pursuant to the Davis-Stirling Common Interest Development Act. The general plan of development will include forming an owners association under the California Non-Profit Mutual Benefit Corporations Law to which will be assigned the powers of (I) owning, maintaining and administering the Association Property, (2) administering and enforcing the Governing Documents, and (3) collecting and disbursing the Assessments and charges hereinafter created. Declarant will cause the corporation to be formed to exercise such powers, as required by California Civil Code Section 1363. The Members of the Association will be the Owners in the Community, as further provided in Article 4 herein. C. The Community is to be held, conveyed, encumbered, leased, used and improved subject to covenants, conditions, restrictions and easements in this Declaration, all of which are in furtherance of a plan for subdividing, maintaining, improving and selling the Condominiums in the Community. All provisions of this Declaration are imposed as equitable servitudes on the Community. All covenants, conditions, restrictions and easements in this Declaration shall run -I-2294-00233\CCRS\1149361.1 6/7/13 with and burden the Community, and be binding on and for the benefit of all of the Community and all Persons acquiring any interest in the Community. ARTICLE I DEFINITIONS AND INTERPRETATION 1.1 DEFINITIONS. Unless otherwise expressly provided, the following words and phrases when used in this Declaration have the following meanings. 1.1.1 Annexable Area. Annexable Area means the real property described in Exhibit A which may be made subject to this Declaration pursuant to Article 16. Any references in this Declaration to Annexable Area are references to the Annexable Area as a whole and to portions thereof. 1.1.2 Annual Assessment. Annual Assessment means a charge against the Owners and their Condominiums representing their share of the Common Expenses. The Annual Assessment is a regular assessment as described in California Civil Code Section 1366. 1.1.3 Articles of Incorporation. Articles of Incorporation means the Articles of Incorporation of the Association as currently in effect. A copy of the initial filed Articles is attached for informational purposes as Exhibit B; provided, however, that the Association may amend the Articles of Incorporation from time to time without need to amend this Declaration. 1.1.4 Assessment. Assessment means any Annual Assessment, Capital Improvement Assessment, Reconstruction Assessment and Special Assessment. 1.1.5 Association. Association means **[Ocean Street Community Association}**, a California nonprofit corporation (formed pursuant to the California Nonprofit Mutual Benefit Corporation Law or successor statutes), and its successors-in-interest. The Association is an "association" as defined in California Civil Code Section 135l(a). 1.1.6 Association Maintenance Funds. Association Maintenance Funds means the accounts created for Association receipts and disbursements pursuant to Article 7. 1.1.7 Association Property. Association Property means real or personal property designated by the Declarant or the Board as Association Property and therefore made subject to the restrictions on Association Property established in the Governing Documents. Any references in this Declaration to Association Property are references to the Association Property as a whole and to portions thereof. (a) Generally. The Association Property in a Phase consists of all the real property described as Association Property in the Condominium Plan for the Phase (except for the Units and the Common Area shown on that Plan), the Improvements described below, and easements reserved for the Association as described below. Association Property Improvements and easements in the Community consist of the following: -2-2294-00233\CCRS\!!4936!.! 6/7/13 (I) Condominium Building, Land and Related Improvements. Each Condominium Building and the land below and surrounding the Condominium Building (but excluding the Units and Common Area shown in the applicable Condominium Plan), the components of the Condominium Building as listed in Section 1.1.18, and related Improvements such as exterior lighting fixtures and utility cabinets on building exteriors, facilities for the delivery of utilities to the Community (except for outlets that are located in the Unit), and cables and related equipment for the delivery of Telecommunications Services to the Community (except for any outlets or connectors that protrude into the airspace of the Unit). (2) Other Improvements. Entry gates and other access facilities, parking garage, private driveway, driveway lighting, exterior parking spaces, perimeter landscaping, other landscaped and irrigated areas, recreational building, swimming pool and spa, water features, courtyard, walkways, address identification signs, walls, fences, drainage facilities, water quality treatment facilities, private storm drains, private sewer and sewer pump station. (3) Easements Granted to or Reserved for the Association. In addition, Association Property includes all of the easements described in the Governing Documents, or in the Map or in other Recorded instruments and granted to the Association, provided, however, the Association shall only have the responsibility for maintenance of such easements where such maintenance responsibility is given to the Association. (b) Association Property in Phase I. The Association Property in Phase I consists of all the real property described as Association Property in the Condominium Plan for Phase I (except for the Units and the Common Area shown on that Plan), and the Improvements and easements described in subparagraph (a) above as applicable to the real property in Phase I. (c) Association Property in Future Phases. The Association Property in future phases shall consist of the items described above as applicable to the Phase, together with such additional association property as Declarant may designate pursuant to Article 16. 1.1.8 Board or Board of Directors. Board or Board of Directors means the Association's Board of Directors. 1.1.9 Budget. Budget means a written, itemized estimate of the Association's income and Common Expenses prepared pursuant to the Bylaws. 1.1.1 0 Bylaws. Bylaws mean the Bylaws of the Association as currently in effect. A copy of the initial form of Bylaws is attached as Exhibit C. 1.1.11 Capital Improvement Assessment. Capital Improvement Assessment means a charge against the Owners and their Condominiums representing their share of the Association's cost for installing or constructing capital Improvements on the Association Property. Capital Improvement Assessments shall be levied in the same proportion as Annual -3-2294-()0233\CCRS\1149361.1 617/13 ·---------------------. Assessments. Capital Improvement Assessments are special assessments as described m California Civil Code Section 1366. 1.1.12 City. City means the City of Carlsbad, California, and its various departments, divisions, employees and representatives. 1.1.13 Close of Escrow. Close of Escrow means the date on which a deed is Recorded conveying a Condominium pursuant to a transaction requiring the issuance of a Public Report. 1.1.14 Common Area. Common Area means the volumes of airspace described in the Condominium Plan for each Phase, which shall be owned by Owners in each Phase as tenants-in-common. Any references in this Declaration to Common Area are references to the Common Area as a whole and to portions thereof. The Common Area in each Phase of the Community constitutes the undivided interest-in-common in a portion of the real property, in accordance with California Civil Code Section 135l(f). 1.1.15 Common Expenses. Common Expenses means those expenses for which the Association is responsible under this Declaration. Common Expenses include the actual and estimated costs of and reserves for maintaining, managing and operating the Association Property (including amounts this Declaration imposes on the Association for maintenance), including: (a) Maintenance services for the Association Property, including pool and spa service and landscape maintenance; (b) The cost of all utilities (including sewer and water) and mechanical and electrical equipment serving the Association Property, utilities which serve individual Condominiums but which are subject to a common meter, and trash collection and removal from central receptacles; (c) The costs and fees attributable to managing and administering the Association, compensating the Manager, accountants, attorneys and employees, all insurance covering the Community and the Directors, officers and agents of the Association, and bonding the members of the Board; (d) The cost to repair damage to public utility Improvements if caused by the Association during installation, maintenance or repair of private utility Improvements; (e) The cost of fire alarm monitoring and system testing and maintenance; (f) The cost of elevator monitoring, testing and maintenance; (g) Unpaid Special Assessments, Reconstruction Assessments and Capital Improvement Assessments; -4-2294-00233\CCRS\1149361.1 617/13 (h) Taxes paid by the Association; (i) Amounts paid by the Association for discharge of any lien or encumbrance levied against the Community, and (j) All other expenses incurred by the Association for the Community, for the common benefit of the Owners. 1.1.16 Community. Community means (a) Phase I and (b) each Phase described in a Notice of Addition. The Community is a "condominium project" as defined in California Civil Code Section 1351 (f), and a "common interest development" as defined in California Civil Code Section 135l(c). Any references in this Declaration to the Community are references to the Community as a whole and to portions thereof. 1.1.17 Condominium. Condominium means an estate in real property as defined in California Civil Code Section 135l(t). A Condominium consists of an undivided fee simple ownership interest in the Common Area in a Phase, together with a separate ownership interest in fee in a Unit and all easements appurtenant thereto. Subject to the provisions of Section I 0.5, the undivided fee simple interest in the Common Area in a Phase is appurtenant to each Unit in such Phase and is a fraction having one (I) as its numerator and the number of Units in that Phase as its denominator; and shall be held by the Owners of Condominiums in that Phase as tenants-in-common. 1.1.18 Condominium Building. Condominium Building means any residential structure in the Community containing multiple Units as shown on the Condominium Plan. Each Building encloses Units shown in the applicable Condominium Plan, but the Condominium Building is not part of the Units. For purposes of interpreting this Declaration and the Condominium Plan, the Condominium Building is intended to include the following components: (a) the shell (including the roof, foundation and exterior surfaces and the finishes thereon) and the core of the Condominium Building; (b) all structural support elements existing in, on, under and throughout the Condominium Building that carry roof, ceiling and upper floor loads to the foundation, including all separate or common footings, girders, columns, joists, braces, foundations, temporary and permanent tieback systems, load-bearing walls and other standard support elements, and every wall, column, floor, ceiling, footing, foundation or other vertical or horizontal Improvement in the Condominium Building, but not including any wall between rooms in a Unit which is not necessary for the structural support of the Condominium Building (for purposes hereof, any wall or other structure which carries roof, ceiling or upper floor loads is "necessary for structural support"); (c) any HV AC systems which benefit the entire Condominium Building; (d) all exterior walls of the Condominium Building and their surface treatments (including siding, stone, stucco, plaster, paint and stain); -5-2294-00233\CCRS\1149361.1 617/13 (e) fixtures that are outside the boundaries of the Units, including exterior lighting fixtures and utility cabinets on Condominium Building exteriors, facilities for the delivery of utilities to the Community (except for outlets that are located in the Unit); (f) exterior fire extinguishers, fire sprinkler systems serving each Condominium Building, including fire sprinkler pipes and fire sprinkler heads that protrude into the airspace of the Unit; (g) cables and related equipment for the delivery of Telecommunications Services to the Community (except for any outlets, connectors and portions of cables that protrude into the airspace of the Unit); and (h) all or any portion of any stairway, elevator, vault, air shaft, mechanical shaft, duct, pipe, line, main, conduit, lighting, flue and any other equipment, fixtures, machinery, system or apparatus which benefits the entire Condominium Building. 1.1.19 Condominium Plan. Condominium Plan means the Recorded plan, as currently in effect, for a Phase consisting of (a) a description or survey map of the Phase or portion thereof, which shall refer to or show monumentation on the ground, (b) a three dimensional description of the Phase or portion thereof, one or more dimensions of which may extend for an indefinite distance upwards or downwards in sufficient detail to identify the Association Property, Common Area and each Unit, and (c) a certificate consenting to the Recordation thereof signed and acknowledged by the record owner of fee title to the Phase or portion thereof, and by either the trustee or the Mortgagee of each Recorded Mortgage encumbering the Phase or portion thereof. 1.1.20 County. County means San Diego County, California, and its various departments, divisions, employees and representatives. 1.1.21 Declarant. Declarant means OCEAN STREET 8 OWNER, LLC, a Delaware limited liability company, its successors and any Person to which it shall have assigned the right to act as Declarant by an express written assignment. As used in this Section, "successor" means a Person who acquires Declarant or substantially all of Declarant's assets by sale, merger, reverse merger, consolidation, sale of stock or assets, operation oflaw or otherwise. Declarant shall determine in its sole discretion the time, place and manner in which it discharges its obligations and exercises the rights reserved to it under this Declaration. Declarant is a "builder" as described in California Civil Code Section 1375. 1.1.22 Declaration. Declaration means this instrument as currently in effect. 1.1.23 Design Guidelines. Design Guidelines mean the rules or guidelines setting forth procedures and standards for submission of plans for Design Review Committee approval. 1.1.24 Design Review Committee or Committee. Design Review Committee or Committee means the Design Review Committee created in accordance with Article 5. -6-2294·00233\CCRS\1149361.1 617/13 1.1.25 DRE. DRE means the California Department of Real Estate and any department or agency of the California state government which succeeds to the DRE's functions. 1.1.26 Exclusive Use Area. Exclusive Use Area means the Association Property over which exclusive easements are reserved for the benefit of specified Owners, including the following: (a) Patios and decks, all as described m this Declaration and depicted and assigned in the Condominium Plan; (b) parking spaces as depicted and numbered in Exhibit E, and storage spaces as depicted and numbered in Exhibit F, each as assigned in the deed to a Unit; provided that Declarant reserves the right, without amending the Declaration, to unilaterally amend or replace Exhibits E and F as necessary to correct errors in numbering, in depiction, in designation, or to reflect as-built conditions, by Recording a Supplemental Declaration with the amended exhibit( s ). When Recorded, the amended exhibit( s) will control; and (c) internal and external telephone wiring designed to serve a single Unit but located outside the boundaries of the Unit, in accordance with California Civil Code Section 1351(i). The Exclusive Use Areas for patios and decks in each Phase are assigned and their approximate locations depicted in the Condominium Plan for the Phase; however, the as- built location of the Improvements constituting the Exclusive Use Areas shall control. 1.1.27 Family. Family means natural individuals, related or not, who live as a single household in a Residence. 1.1.28 Fannie Mae. Fannie Mae means the Federal National Mortgage Association, a government-sponsored private corporation established pursuant to Title VIII of the Housing and Urban Development Act of 1968 and its successors. 1.1.29 FHA. FHA means the Federal Housing Administration of the United States Department of Housing and Urban Development and its successors. 1.1.30 FHFA. FHFA means the Federal Housing Finance Agency, established pursuant to the Housing and Economic Recovery Act of2008. 1.1.31 First Mortgage. First Mortgage means a Mortgage with first priority over other Mortgages on a Condominium. 1.1.32 First Mortgagee. First Mortgagee means the Mortgagee of a First Mortgage. 1.1.33 Fiscal Year. Fiscal Year means the fiscal accounting and reporting period of the Association. -7-2294-00233\CCRS\ 1149361.1 617113 1.1.34 Freddie Mac. Freddie Mac means the Federal Home Loan Mortgage Corporation created by Title II of the Emergency Home Finance Act of 1970 and its successors. 1.1.35 Ginnie Mae. Ginnie Mae means the Government National Mortgage Association administered by the United States Department of Housing and Urban Development and its successors. 1.1.36 Governing Documents. Governing Documents means this Declaration, the Articles of Incorporation, Bylaws, Design Guidelines, Rules and Regulations, Supplemental Declarations and Notices of Addition. 1.1.3 7 Improvement. Improvement means any structure and any appurtenance thereto. The Design Review Committee may identify additional items that are Improvements. 1.1.38 Include, Including. Whether capitalized or not, include and including means "includes without limitation" and "including without limitation," respectively. 1.1.39 Local Government Agency. Local Government Agency means the City, the County, a public school district, a public water district, and any other local or municipal governmental entity or agency, including any special assessment district, maintenance district or community facilities district. 1.1.40 Maintain, Maintenance. Whether capitalized or not, maintain and maintenance mean "maintain, repair and replace" and "maintenance, repair and replacement," respectively; provided however, that maintain or maintenance shall not include repair and replace(ment) where the context or specific language of this Declaration provides another meaning. 1.1.41 Maintenance Guidelines. Maintenance Guidelines means any current written guidelines, setting forth procedures and standards for the maintenance and operation of Association Property or the Condominiums. Maintenance Guidelines may be provided by Declarant, by the Association, or by any governmental agency. Maintenance Guidelines include any maintenance manual initially prepared at Declarant's direction and containing recommended frequency of inspections and maintenance activities for components of the Association Property or pertaining to a Condominium. 1.1.42 Manager. Manager means the Person retained by the Association to perform management functions of the Association as limited by the Governing Documents and the terms of the agreement between the Association and the Person. 1.1.43 Map. Map means the final recorded map of Tract No. CT 05-12, Filed in Book __ at Pages , inclusive, of , in the Office of the San Diego County Recorder. The term also refers to alterations shown on any subsequently recorded amendment, certificate of correction, lot line adjustment or record of survey affecting any of the real property described in the Map. -8-2294-00233\CCRS\1149361.1 617/13 1.1.44 Membership. Membership means the voting and other rights, privileges, and duties established in the Governing Documents for Association members. 1.1.45 Mortgage. Mortgage means any Recorded document, including a deed of trust, by which a Condominium, Condominiums, or Association Property is/are hypothecated to secure performance of an obligation. 1.1.46 Mortgagee. Mortgagee means a Person to whom a Mortgage is made, or the assignee of the Mortgagee's rights under the Mortgage by a recorded instrument. For purposes of this Declaration, the term Mortgagee includes a beneficiary under a deed of trust. 1.1.47 Mortgagee Majority. Mortgagee Majority means the First Mortgagees holding First Mortgages that in the aggregate encumber at least fifty-one percent (51%) of the Condominiums that are subject to Mortgages. For purposes of any provisions of the Governing Documents which requires the vote or approval of a Mortgagee Majority, such vote or approval is determined based on one (I) vote for each Condominium encumbered by a First Mortgage held by a First Mortgagee. 1.1.48 Mortgagor. Mortgagor means a person who has mortgaged his property. For purposes of this Declaration, the term Mortgagor shall include a trustor under a deed of trust. 1.1.49 Notice and Hearing. Notice and Hearing means written notice and a hearing before the Board as provided in the Bylaws. 1.1.50 Notice of Addition. Notice of Addition means an instrument Recorded pursuant to Article 16 to annex additional real property to the Community. 1.1.51 Official Records. Official Records means the Official Records of the County. 1.1.52 Operating Fund. Operating Fund means that portion of the Common Expenses allocated for the daily operation of the Association. 1.1.53 Owner. Owner means the Person or Persons, including Declarant, holding fee simple interest to a Condominium. The term "Owner" includes sellers under executory contracts of sale but excludes Mortgagees. The term "Owner" may be expanded in a Supplemental Declaration to include other Persons. 1.1.54 Person. recognized under California law. only to natural persons. Person means a natural individual or any legal entity When the word "person" is not capitalized, the word refers 1.1.55 Phase. Phase means each of the following: (a) Phase I, and (b) all the real property covered by a Notice of Addition for which a Public Report has been issued by the DRE. Declarant may otherwise define the term "Phase" in a Notice of Addition or Supplemental Declaration. -9-2294·00233\CCRS\1149361.1 6/7113 1.1.56 Phase 1. Phase 1 means all of the real property described in Paragraph A of the Preamble of this Declaration. 1.1.57 Public Report. Public Report means the Final Subdivision Public Report issued by the DRE for any Phase. 1.1.58 Reconstruction Assessment. Reconstruction Assessment means a charge against the Owners and their Condominiums representing their share of the Association's cost to reconstruct any Improvements on the Association Property. Such charge shall be levied among all Owners and their Condominiums in the same proportions as Annual Assessments. Reconstruction Assessments are "special assessments" as described in California Civil Code Section 1366. 1.1.59 Record or File. Record or File means, concerning any document, the entry of such document in Official Records. 1.1.60 Reserve Fund. Reserve Fund means that portion of the Common Expenses allocated (a) for the future repair and replacement of, or additions to, structural elements, mechanical equipment and other major components of Association-maintained Improvements, and (b) amounts necessary to cover the deductibles under all insurance policies maintained by the Association. 1.1.61 Right to Repair Law. Right to Repair Law means California Civil Code Sections 895 through 945.5. 1.1.62 Right to Repair Law Claim. Right to Repair Law Claim means any claim brought by one or more Owners or by the Association against one or more Declarant Parties (as defined in Section 12.4) on any design construction defect matters that are governed by the Right to Repair Law. 1.1.63 Rules and Regulations. Rules and Regulations or "Rules" means the current rules and regulations for the Community. 1.1.64 Special Assessment. Special Assessment means (a) a reasonable monetary penalty imposed against an Owner and the Owner's Condominium in accordance with California Civil Code Section 1367.l(e), as a disciplinary measure for the failure of an Owner to comply with the Governing Documents, or (b) a monetary charge imposed against an Owner and his Condominium in accordance with California Civil Code Section 1367.l(d) to recover costs incurred by the Association in the repair of damage to Association Property, all as further described in this Declaration. 1.1.65 Supplemental Declaration. Supplemental Declaration means an instrument executed, acknowledged and Recorded by Declarant which imposes conditions, covenants, or restrictions or reserves easements for all or a portion of the Community in addition to the conditions, covenants, restrictions and easements established by this Declaration. A Supplemental Declaration may annex additional real property to the Community, and it may modify this Declaration, but only with respect to the real property encumbered by the Supplemental Declaration. -10-2294-00233\CCRS\1149361.1 617/13 1.1.66 Telecommunications Facilities. Telecommunications Facilities means Improvements constructed in the Community, including cables, conduits, ducts, vaults, connecting hardware, wires, poles, transmitters, towers, antennae and other devices now existing or that may be developed in the future to provide Telecommunication Services to the Community. 1.1.67 Telecommunications Services. Telecommunications Services means the reception, distribution or transmission of video, audio, data, telephony, all related vertical services, and any other similar services now existing or that may be developed in the future. Declarant may expand this definition in any Supplemental Declaration. 1.1.68 Unit. Unit means a separate interest in space as defined in California Civil Code Section 1351(f). Each Unit is a separate freehold estate, as separately shown, numbered and designated in the Condominium Plan. (a) Each Unit includes the entry door and entry door hardware and the glass portions of the windows and sliding glass doors that are constructed at Unit boundaries, between-room walls or partitions in the Unit boundaries that are not necessary for structural support of the Condominium Building (but not any wall separating neighboring Units), drop ceilings and soffits in the Unit and the space above and within them (and the forced-air units and the heating and air conditioning ducts located above the drop ceilings), and those portions of gas, water and waste pipes, ducts, chutes, conduits, wires and other utility installations that protrude into the Unit (but not fire sprinkler heads or pipes that protrude into the Unit). (b) The boundaries of each Unit are approximately shown in the Condominium Plan. In interpreting deeds, this Declaration and the Condominium Plan, the actual boundaries of each Unit shall be deemed to extend to the interior unfinished Unit-facing surfaces of the walls, floors, and ceilings encompassing the Unit, as constructed or reconstructed in substantial accordance with the original plans for the Unit. The foregoing interpretation shall apply notwithstanding any description expressed in the deed, the Condominium Plan or the Declaration, regardless of settling or lateral movements of Improvements, and regardless of variances between Unit boundaries shown in the Condominium Plan or deed and those of the Improvement. 1.1.69 VA. VA means the Department of Veterans Affairs of the United States of America and any department or agency of the United States government which succeeds to the VA' s function of issuing guarantees of notes secured by Mortgages on residential real estate. 1.2 INTERPRETATION. 1.2.1 General Rules. This Declaration shall be liberally construed to effectuate its purpose of creating a uniform plan for subdividing, maintaining, improving and selling the Community. As used in this Declaration, the singular includes the plural and the plural the singular. The masculine, feminine and neuter each includes the other, unless the context dictates otherwise. Any reference in this Declaration to time of performance of -11-2294-00233\CCRS\1149361.1 6/7/13 obligations or to elapsed time means consecutive calendar days, months or years, as applicable, unless otherwise expressly provided. 1.2.2 Articles, Sections and Exhibits. The Article and Section headings are inserted for convenience only and may not be considered in resolving questions of interpretation or construction. Unless otherwise indicated, any references in this Declaration to articles, sections or exhibits are to Articles, Sections and Exhibits of this Declaration. Exhibits A, D, E, F and G attached to this Declaration are incorporated in this Declaration by this reference. The Articles of Incorporation and the Bylaws that are attached as Exhibits B and C are attached for informational purposes only. Either may be amended from time to time without having to amend this Declaration. In such event, the amended version shall supersede the version attached hereto. The locations and dimensions of any Improvements shown on the Exhibits attached hereto and to any Notice of Addition are approximate only and the as-built location and dimension of any such Improvements shall control. 1.2.3 Priorities and Inconsistencies. If there are conflicts or inconsistencies between this Declaration and the Articles of Incorporation, Bylaws, Rules and Regulations, or a Condominium Plan, then the provisions of this Declaration shall prevail; however, the conflicting documents shall be construed to be consistent with the Declaration to the extent possible. If there are any conflicts or inconsistencies between this Declaration and any Notice of Addition, the provisions of the Notice of Addition shall prevail as to the real property encumbered thereby. 1.2.4 Supplemental Declarations. Declarant may, in connection with all or a portion of the Community, Record one (I) or more Supplemental Declarations, which shall designate the use classifications in the real property described therein, and which may supplement this Declaration with such additional covenants, conditions, restrictions and land uses as Declarant may deem appropriate for the affected real property. A Supplemental Declaration may impose additional, different or more restrictive conditions, covenants, restrictions, land uses and limitations as Declarant may deem advisable, taking into account the particular requirements of the real property affected thereby. If there is any conflict between any Supplemental Declaration and the Declaration, the Supplemental Declaration shall control as to the real property affected by such Supplemental Declaration. 1.2.5 Severability. The provisions of this Declaration are independent and severable. If for any reason, any provision of this Declaration becomes invalid, partially invalid, unenforceable, illegal, null and void, or against public policy, or if for any reason, a court of competent jurisdiction determines that any provision of this Declaration is invalid, partially invalid, unenforceable, illegal, null and void, or against public policy, the validity and enforceability of the remaining provisions of this Declaration shall remain in effect to the fullest extent permitted by law. 1.2.6 Statutory and Regulatory References. From and after January I, 2014, references in the Governing Documents to provisions of California Civil Code Sections 1350 to 1378, inclusive, shall be deemed to refer to the corresponding successor provisions set forth in Division 4, Part 5 of the California Civil Code. All other references made in the -12-2294-00233\CCRS\ 1149361.1 617113 Governing Documents to statutes or regulations are to those statutes or regulations as currently in effect or to subsequently enacted replacement statutes or regulations. ARTICLE2 MAINTENANCE COVENANTS AND USE RESTRICTIONS The Community shall be held, used and enjoyed subject to the following restrictions and subject to the exemptions of Declarant set forth in the Governing Documents. 2.1 REPAIR AND MAINTENANCE. 2.1.1 Maintenance Obligations and Standards. The specific items listed in Exhibit D to this Declaration shall be maintained by the party indicated. If an item is not listed in Exhibit D, then it shall be maintained in accordance with the general rules established in this Declaration, in the current adopted Budget and any applicable Maintenance Guidelines (provided, however, that only Declarant, and not the Association or any other Owner, shall have the right to revise, supplement or replace any written Maintenance Guidelines initially provided by Declarant). (a) By Association. The Association shall maintain the Association Property and those portions of the Exclusive Use Areas that are designated for Association maintenance in the Governing Documents. The Association shall maintain everything it is obligated to maintain in a clean, sanitary and attractive condition reasonably consistent with the level and frequency of maintenance reflected in the current adopted Budget; provided, however, that the Association shall at all times at least perform the level and frequency of maintenance specified in the applicable Maintenance Guidelines. (b) By Owners. Each Owner shall maintain the interior of the Unit and those portions of the Exclusive Use Area that are designated for Owner maintenance in the Governing Documents, in a clean, sanitary and attractive condition and as directed in the Governing Documents and all applicable Maintenance Guidelines. Each Owner shall immediately notify the Association of any dangerous, defective or other condition which could cause injury to person or property in such Owner's Unit or Exclusive Use Area. Unless other arrangements are approved by the Board, all Owner-installed Improvements must be maintained by the Owner who installed the Improvements. 2.1.2 Commencement of Association Maintenance Obligations. The Association's obligation to maintain the Association Property in a Phase composed solely of Association Property shall commence on conveyance of such Association Property to the Association either in fee or by maintenance easement. The Association's obligation to maintain the Association Property in any Phase that includes Condominiums commences on the date on which Annual Assessments commence on the Condominiums in the Phase, unless the terms of the Governing Documents applicable to the real property on which the Association Property is located provide otherwise. Until the Association is responsible for maintaining the Association Property in a particular Phase, Declarant shall maintain such Association Property. -13-2294-00233\CCRS\1149361.1 617/13 2.1.3 Acceptance of Association Property. The Association must accept ownership of and maintenance responsibility for each portion of Association Property when title and maintenance responsibility are tendered by Declarant, whether in fee simple, by easement or otherwise, and the Association shall execute each deed and any accompanying escrow instructions if requested to do so by Declarant, and it shall execute any bond exonerations when presented if the bonded obligations are satisfied. No Owner shall interfere with the exercise of the foregoing obligations by the Association, or with the rights or obligations of Declarant. 2.1.4 Association Power to Perform Owner Obligations. If an Owner fails to maintain any Improvement that the Owner is obligated to maintain, the Association has the power but not the duty to perform the maintenance at the Owner's expense. In an emergency, the Association may perform the maintenance immediately; in all other cases, the Association may perform the maintenance after Notice and Hearing. For purposes hereof, an "emergency" is any situation where the Board determines that there is an imminent threat of injury to persons or damage to property. 2.1.5 Disputes Regarding Maintenance Obligations. Disputes between Owners or between any Owner and the Association regarding maintenance shall be resolved in accordance with the enforcement process described in Section 12.1. 2.1.6 Inspections. The Board shall periodically cause a compliance inspection of the Community to be conducted by the Design Review Committee to report any violations thereof. The Board shall also cause condition inspections of the Association Property and all Improvements thereon to be conducted in conformity with the applicable Maintenance Guidelines (each, a "Condition Inspection"), and in the absence of inspection frequency recommendations in any applicable Maintenance Guidelines at least once every year, in conjunction with the inspection required for the reserve study to be conducted pursuant to the requirements of the Bylaws, to (a) determine whether the Association Property is being maintained adequately in accordance with the standards of maintenance established in Section 2.1.1, (b) identifY the condition of the Association Property and any Improvements thereon, including the existence of any hazards or defects, and the need for performing additional maintenance, refurbishment, replacement, or repair, and (c) recommend preventive actions which may be taken to reduce potential maintenance costs to be incurred in the future. The Board shall, during its meetings, regularly determine whether the recommended inspections and maintenance activities set forth in any applicable Maintenance Guidelines have been followed and, if not followed, what corrective steps need to be taken to assure proper inspections and maintenance of the Association Property. The Board shall keep a record of such determinations in the Board's minutes. The Board shall keep Declarant fully informed of the Board's activities under this Section 2.1.6. The Board shall employ, consistent with reasonable cost management, such experts, contractors and consultants as are necessary to perform the inspections and make the reports required by this Section. 2.1. 7 Reporting Requirements. The Association shall prepare a report of the results of the inspection required by this Section. The report shall be furnished to Owners and Declarant within the time set for furnishing the Budget to the Owners. The report must include at least the following: -14-2294.{)0233\CCRS\1149361.1 617/13 (a) a description of the condition of the Association Property, including a list of items inspected, and the status of maintenance, repair and need for replacement of all such items; (b) a description of all maintenance, repair and replacement planned for the ensuing Fiscal Year and included in the Budget; (c) if any maintenance, repair or replacement is to be deferred, the reason for such deferral; (d) a summary of all reports of inspections performed by any expert or consultant employed by the Association to perform inspections; (e) a report of the status of compliance with the maintenance, replacement and repair needs identified in the inspection report for preceding years; and (f) such other matters as the Board considers appropriate. For a period of ten (I 0) years after the date of the last Close of Escrow in the Community, the Board shall also furnish to Declarant (a) the report of each Condition Inspection performed for the Board, whenever such inspection is performed and for whatever portion of the Association Property that is inspected, within thirty (30) days after the completion of such inspection, and (b) the most recent Condition Inspection report prepared for any portion of the Association Property, no later than the date that is ten (I 0) days after the Association receives Declarant's written request. 2.1.8 Termite Eradication. If determined by the Board to be economically feasible, the Association shall adopt an inspection and prevention program for the prevention and eradication of infestation by wood-destroying pests and organisms in the Community. If the Association adopts such a program, the Association, on no less than fifteen (15) nor more than thirty (30) days' notice, may require each Owner and the occupants of the Owner's Condominium to vacate such Condominium to accommodate the Association's efforts to eradicate such infestation. The notice must state the reason for the temporary relocation, the date and time of the beginning of treatment, the anticipated date and time of termination of treatment, and that the occupants will be responsible for their own accommodations during the temporary relocation. Any damage caused to a Condominium by such entry by the Association or by any person authorized by the Association shall be repaired by the Association as a Common Expense. All costs involved in operating the inspection and preventive program as well as repairing and replacing the Association Property and Improvements thereon when the need for such maintenance, repair or replacement is the result of wood-destroying pests or organisms are a Common Expense. 2.1.9 Damage by Owners. Each Owner is liable to the Association for all damage to the Association Property that is sustained due to the negligence or willful act of the Owner, the Owner's Family, tenants or invitees, and any other Persons who derive their use of the Association Property from the Owner or from the Owner's Family, tenants or invitees. The Association may, after Notice and Hearing, levy a Special Assessment against the Owner representing a monetary charge imposed as a means of reimbursing the Association for costs -15-2294·00233\CCRS\1149361.1 6/7/13 incurred by the Association in the repair of damage to Association Property and facilities for which the Owner or the Owner's Family, tenants or invitees were responsible. The amount of the Special Assessment may include (a) the amount of any deductible payable on the insured portion of the loss (if the Association elects to make a claim under its insurance policy), (b) all costs and expenses actually incurred by the Association to correct damage that is not covered by the Association's insurance or for which no claim has been made, and (c) the amount of the increase in premiums payable by the Association, to the extent the increase is directly caused by damage that was attributed to the Owner or the Owner's Family, tenants or invitees. In accordance with California Civil Code Section 1367.l(d), the Association shall have the power to impose a lien for the foregoing Special Assessment. If a Condominium is jointly owned, the liability of its Owners for damage to Association Property is joint and several, except to the extent that the Association and the joint Owners have otherwise agreed in writing. 2.1.10 Stormwater Pollutant Control. The Community is subject to all federal, state and local requirements of the National Pollutant Discharge Elimination System ("NPDES'), adopted in accordance with the Federal Clean Water Act. In 1999, the California State Water Resources Control Board ("SWRCB') enacted a new statewide General Permit for Storm Water Discharges Associated with Construction Activity (the "General Permit'). The General Permit imposes a comprehensive series of requirements on developers and builders to file a Storm Water Pollution Prevention Plan ("SWPPP') with the Regional Water Quality Control Board that sets forth Best Management Practices ("BMPs') that are intended to mitigate runoff of silt and pollutants from the Community into storm drains. Some BMPs apply to activities undertaken by the Association and Owners, and the Association and the Owners are required to comply with the applicable BMPs. The SWPPP includes specific maintenance schedules for post-construction operation of the BMPs that may impose long term maintenance obligations on the Association and each Owner in the Community. The BMPs are in addition to any local ordinances established by the City and any rules and regulations imposed by the Association concerning discharge of non-storm water into storm drains. 2.1.11 City Required Provisions. (a) Failure to Maintain Association Property. In the event that the Association fails to maintain the Association Property, or any part thereof, as provided in this Section 2.1, the City shall have the right, but not the duty, to perform the necessary maintenance. If the City elects to perform such maintenance, the City shall give written notice to the Association, with a copy thereof to the Owners in the Community, setting forth with particularity the maintenance which the City finds to be required and requesting the same be carried out by the Association within a period of thirty (30) days from the giving of such notice. In the event that the Association fails to carry out such maintenance of the Association Property within the period specified by the City's notice, the City shall be entitled to cause such work to be completed and shall be entitled to reimbursement with respect thereto from the Owners as provided in Section 2.1.11(b) below. (b) Special Assessment Levied by City. In the event the City is required to perform maintenance to any portion of the Association Property pursuant to Section 2.1.11 above, the City shall submit a written invoice to the Association for all costs incurred by the City to perform such maintenance. The City shall provide a copy of such invoice to each -16-2294-00233\CCRS\1149361.1 6/7/13 Owner in the Community, together with a statement that if the Association fails to pay such invoice in full within the time specified, the City will pursue collection against the Owners in the Community pursuant to the provisions of this Section. Said invoice shall be due and payable by the Association within twenty (20) days of receipt by the Association. If the Association fails to pay such invoice in full within the period specified, payment shall be deemed delinquent and shall be subject to a late charge in an amount equal to six percent ( 6%) of the amount of the invoice. Thereafter the City may pursue collection from the Association by means of any remedies available at law or in equity. Without limiting the generality of the foregoing, in addition to all other rights and remedies available to the City, the City may levy a special assessment against the Owners of each Unit in the Community for an equal pro rata share of the invoice, plus the late charge. Such special assessment shall constitute a charge on the land and shall be a continuing lien upon each Unit against which the special assessment in levied. Each Owner in the Community hereby vests the City with the right and power to levy such special assessment, to impose a lien upon their respective Unit and to bring all legal actions and/or to pursue lien foreclosure procedures against any Owner and his/her respective Unit for purposes of collecting such special assessments. (c) Landscape Maintenance Responsibilities. The Association's and each individual Owner's landscape maintenance responsibilities, as applicable, shall be as set forth in Exhibit D attached hereto. 2.2 WATER METERS. Each Owner, by acceptance of a deed, acknowledges that water service is not separately metered by the water provider to measure individual condominium usage, but is instead commonly metered to the Condominium Building through a single City meter and privately submetered to the Units. The Association will receive a single water bill from the City, representing all water provided to the Community during the billing period. Other utility services are separately metered to the Units by the utility providers. 2.2.1 Allocation of Bills. Each Owner will be responsible for paying for the water supplied to the Owner's Unit, as measured by the water submeter installed for each Unit. To calculate the cost chargeable to each Unit for water service, the Association will hire a metering service company (the "Metering Company") to read the water submeters and prepare the individual water bills for delivery to each Owner. Each Owner will pay the amount shown in the water bill to the Metering Company. The Metering Company will remit amounts paid by each Owner to the Association, so that the Association is reimbursed for the cost of water used by Owners. The Metering Company's service charge will be a component of Common Expenses paid through Annual Assessments. The Metering Company will provide to the Association a statement of all amounts received from the Owners on a regular basis. If an Owner fails to pay any amounts when due, the Owner will be responsible for any penalties or delinquent amounts levied by the Metering Company. If, in the future, there are no companies which can provide the submetering service, the Association will be responsible to allocate water usage costs to each individual Owner as measured by submeters or an equivalent method. 2.2.2 Default. Any Owner who fails to timely pay his water bill to the Metering Company is in violation of this Section, and the Association may pursue reimbursement directly from the Owner by means of a Special Assessment or such other -17-2294·00233\CCRS\ll4936l.l 617/13 remedies as are available under applicable law, including shutting off water service to the Owner's Unit. 2.2.3 Submeters. Each Owner shall also have the obligation to maintain the water submeter in the Owner's Unit. If an Owner fails to maintain the submeter, the Association shall have the power to maintain the submeter and charge the cost thereof to the Owner as a Special Assessment or pursue any other remedies as provided under this Declaration. 2.2.4 Deposits. Upon the Close of Escrow for each Unit, and on any subsequent sale of a Unit by an Owner, such Owner shall be obligated to pay to the Association a deposit in an amount equal to one (I) month's average water bill for a Unit within the Community (as determined by the Association) as security for the Owner's obligation to pay the water bill when due. As provided above, the Association may apply such deposit in payment of a Defaulting Owner's water bill and such Owner shall replace the full amount of such deposit promptly upon written notice from the Association. The Association shall, within thirty (30) days after receiving written notice from an Owner that such Owner has sole Owner's Unit (provided that the subsequent Owner has paid a replacement security deposit in the amount determined appropriate by the Association) return to the Owner any amounts not expended by the Association from such Owner's deposit. The Association may increase the amount of such security deposits and require the deposit of additional amounts by the Owners, based on increases in such water bills. 2.3 SINGLE-FAMILY DWELLING. The Unit shall be used as a residential dwelling for a single Family and for no other purpose. 2.4 FURTHER SUBDIVISION. Except as otherwise provided in this Declaration, no Owner may physically or legally subdivide the Owner's Condominium in any manner, including dividing such Owner's Condominium into time-share estates or time-share uses. This provision does not limit the right of an Owner to rent or lease the Condominium pursuant to Section 2.5 below. 2.5 LEASING AND RENTAL. 2.5.1 Leasing or Rental to Declarant. Nothing in this Declaration shall be deemed to prevent an Owner from leasing or renting the Condominium to Declarant for use as sales offices, model home, parking area or for other residential or non-residential purposes. Declarant may not lease any portion of the Association Property to the Owners or the Association. 2.5.2 Leasing or Rental to Non-Declarant Parties. Nothing in this Declaration shall be deemed to prevent an Owner from leasing or renting the Condominium for residential occupancy by a single Family, provided that: (i) the terms of the lease or rental agreement are set out in a written lease or rental agreement; (ii) the lease or rental agreement is expressly made subject to this Declaration and the other Governing Documents of the Community; (iii) the lease or rental agreement shall be for a term of not less than thirty-one (31) days; (iv) the lessor or landlord shall not provide any services normally associated with transient occupancy (including hotel, inn, bed & breakfast, vacation rental, time-share or similar -18-2294.()0233\CCRS\1149361.1 617/13 temporary lodging); and (v) the lease or rental agreement shall provide that all lessees, tenants, and their Families, agents and invitees are bound by the Governing Documents when present in the Community, and any violation of the Governing Documents by a lessee, tenant or their Families, agents or invitees also constitutes a default under the lease or rental agreement. 2.6 RESALE. Nothing in this Declaration shall be deemed to prevent an Owner from transferring or selling the Condominium, either to a single Person, or to more than one (I) Person to be held by them as tenants-in-common, joint tenants, tenants by the entirety or as community property. 2.7 BUSINESS AND COMMERCIAL ACTIVITIES. 2.7.1 Generally. No Owner or other occupant of the Community may undertake any activity in any Condominium nor use any portion of the Association Property, for any business, commercial or non-residential purposes, nor for any other purpose that is inconsistent with the Governing Documents. Such purposes include manufacturing, storage, vending, auctions, vehicle or equipment repair, entering into any lease or rental agreement under which the Unit would be occupied by numbers of persons in excess of the maximum occupancy permitted under applicable law, and transient occupancy of the Unit (such as hotel, inn, bed & breakfast, vacation rental, time-share or similar temporary lodging). Any lease or rental agreement for a term of fewer than thirty-one (31) days, and any lease or rental agreement pursuant to which the lessor provides any services normally associated with transient occupancy, shall be deemed to be for transient purposes and prohibited under this Declaration. All of the foregoing activities are prohibited whether they are engaged in full-time or part-time, whether they are for-profit or non-profit, and whether they are licensed or unlicensed. 2.7.2 Exceptions. This Section shall not be interpreted to prohibit any of the following: (a) The hiring of employees or contractors to provide maintenance, construction or repair services that are consistent with the Governing Documents; (b) Rental or leasing of a Unit to Declarant for use as a sales office, model homes or parking area for any period of time; (c) Exercise by Declarant of any rights reserved to it under Article 15; (d) The provision of in-home health care or assisted-living services to any resident of the Community; (e) The provision of family home child care services as defined in California Health and Safety Code Section 1597.40, et seq., so long as such services comply with all applicable state and local laws, including licensing, inspection and zoning requirements. Provided, however, that the Association has the power to limit or prohibit use of recreational facilities and other common amenities in the Association Property by clientele of the business; -19-2294-00233\CCRS\1149361.1 6/7/13 (f) Small home-based service businesses that comply with all of the following: (I) The operator of the business lives in the Unit on a permanent, full-time basis; (2) take place solely inside the Unit; When conducted in the Community, business activities (3) The business does not generate m-person visits by suppliers or clientele; ( 4) The business complies with all laws, regulations and ordinances applicable to the Community, including zoning, health and licensing requirements; (5) The business otherwise complies with the Declaration and is consistent with the residential character of the Community; (6) The operator of the business posts no business-related signage anywhere in the Community; (7) There is no visible evidence in the Community of the business; (8) The business does not generate noise or odors that are apparent outside the Unit; and (9) The business does not increase the Association's liability or casualty insurance obligation or premium. (g) Other activities that have been determined by governmental authorities to be consistent with the single-family residential uses in the Community, including, for example, residential care facilities that are operated in accordance with California Health and Safety Code Section 1566.5. 2.8 NUISANCES. Noxious or offensive activities are prohibited in the Community and on any public street abutting or visible from the Community. The Board is entitled to determine if any device, noise, odor, or activity constitutes a nuisance. 2.8.1 Nuisance Devices. Nuisance devices may not be kept or operated in the Community or on any public street abutting the Community, or exposed to the view of other Condominiums or Association Property. Nuisance devices include the following: (a) All horns, whistles, bells or other sound devices (except security devices used exclusively to protect the security of a Unit or a vehicle and its contents); -20-2294·00233\CCRS\1149361.1 6/7/13 (b) Noisy or smoky vehicles, power equipment (excluding lawn mowers and other equipment used in connection with ordinary landscape maintenance), and Restricted Vehicles (defined below); (c) Devices that create or emit loud noises or noxious odors; (d) Construction or demolition waste containers (except as permitted in writing by the Committee); (e) Devices that unreasonably interfere with television or radio reception to a Condominium; (f) Plants or seeds infected with noxious insects or plant diseases; or (g) The presence of any other thing in the Community which may (1) increase the rate of insurance in the Community, (2) result in cancellation of the insurance, (3) obstruct or interfere with the rights of other Owners or the Association, (4) violate any law or provisions of the Governing Documents, or ( 5) constitute a nuisance or other threat to health or safety under applicable law or ordinance. 2.8.2 Nuisance Activities. Nuisance activities may not be undertaken in the Community or on any public street abutting the Community, or exposed to the view of other Condominiums or Association Property without the Board's prior written approvaL Nuisance activities include the following: (a) Hanging, drying or airing clothing, fabrics or unsightly articles in any place that is visible from other Condominiums, Association Property or public streets; (b) The creation of unreasonable levels of noise from parties, recorded music, radios, television or related devices, or live music performance; (c) The creation of unreasonable levels of noise from a barking dog or other animal kept in the Community (for example, chronic daily nuisance barking by a dog over extended periods of time); (d) Repair or maintenance of vehicles or mechanical equipment; (e) Outdoor fires, except in barbecue grills and fire pits designed and used in such a manner that they do not create a fire hazard; or (f) Outdoor storage of bulk materials or waste materials except in temporary storage areas designated by the Committee. (g) Any activity which may (1) increase the rate of insurance in the Community, (2) result in cancellation of the insurance, (3) obstruct or interfere with the rights of other Owners, (4) violate any law or provisions of the Governing Documents, or (5) constitute a nuisance or other threat to health or safety under applicable law or ordinance. -21-2294-00233\CCRS\1149361.1 6/7/13 2.9 SIGNS. Subject to California Civil Code Sections 712, 713 and 1353.6, and any applicable Design Guidelines, no sign, advertising device or other display of any kind shall be displayed in the Community or on any public street in or abutting the Community except for the following signs: 2.9.1 Traffic and Parking Control. Entry monuments, Community identification signs, and traffic or parking control signs maintained by the Association; 2.9.2 Addressing. For each Condominium, one (!) nameplate or address identification sign which complies with Design Review Committee rules; 2.9.3 Security. For each Condominium, one (1) sign advising of the existence of security services protecting a Condominium which complies with Design Review Committee rules; 2.9.4 For Sale or Lease Signs. For each Condominium, one (I) sign advertising the Condominium for sale or lease that complies with the following requirements: (a) the sign has reasonable design and dimensions (which shall not exceed eighteen (18) inches by thirty (30) inches in size), provided the sign is promptly removed at the close of the resale escrow or the lease, or upon the OWiler' s withdrawal of the Condominium from the resale or lease market; and (b) the sign is of a color, style and location authorized by the Design Review Committee. 2.9.5 Certain Noncommercial Signs. For each Condominium, a noncommercial sign, poster, flag or banner must comply with the following requirements: (a) a noncommercial sign or poster must not be more than nine (9) square feet in size and a noncommercial flag or banner must not be more than fifteen (15) square feet in size; and (b) a noncommercial sign, poster, flag or banner may not be made of lights, roofing, siding, paving materials, flora, or balloons, or any other similar building, landscaping, or decorative component, or include the painting of architectural surfaces. 2.9.6 Other Authorized Signs. Other signs or displays authorized by the Design Review Committee. 2.9.7 City Requirements. All signs or displays proposed for the Community shall be designed in conformance with the City's Sign Ordinance and, if applicable, shall require review a11d approval of the City Planning Director prior to installation. -22-2294·00233\CCRS\1149361.1 6/7/13 2.10 PARKING AND VEHICULAR RESTRICTIONS. 2.1 0.1 Defmitions. The following definitions shall apply to parking and vehicular restrictions set forth in this Declaration: 2.10.2 Authorized Vehicle. An "Authorized Vehicle" is an automobile, a passenger van designed to accommodate ten (1 0) or fewer people, a motorcycle, or a pickup truck having a manufacturer's rating or payload capacity of one (I) ton or less. The Association has the power to identity additional vehicles as Authorized Vehicles in the Rules and Regulations in order to adapt this restriction to other types of vehicles that are not listed above. 2.10.3 Restricted Vehicles. The following vehicles are "Restricted Vehicles:" (a) large commercial-type vehicles (for example, stake bed trucks, tank trucks, dump trucks, step vans, and concrete trucks), (b) buses, limousines or vans designed to accommodate more than ten (10) people, (c) inoperable vehicles or parts of vehicles, (d) aircraft, (e) boats, jet skis and other water craft, (f) trailers (for example, trailers designed for horses, boats, motorcycles or other equipment or materials), (g) motor homes and recreational vehicles (for example, fifth-wheels, folding camping trailers, travel trailers, but not including van conversions and truck campers), (h) any vehicle or vehicular equipment deemed a nuisance by the Association, and (i) any other vehicle that is not classified as an Authorized Vehicle. If a vehicle qualifies as both an Authorized Vehicle and a Restricted Vehicle, then the vehicle is presumed to be a Restricted Vehicle, unless the vehicle is expressly authorized in writing by the Association. The Association has the power to identifY additional vehicles as Restricted Vehicles in the Rules and Regulations to adapt this restriction to other types of vehicles that are not listed above. 2.10.4 Parking Restrictions. (a) Association Property Parking Garage. All Authorized Vehicles owned or operated by or under the control of an Owner or a resident of an Owner's Condominium and kept in the Community must be parked in the Owner's Exclusive Use Area parking space(s) (each, a "Parking Space'') within the Association Property parking garage (the "Parking Garage''). No Authorized Vehicles may be parked in any manner that the Association determines will restrict the normal passage of pedestrians or vehicles in the Parking Garage. The right to use any Parking Space is exclusive to the Owner of the Condominium to which the Parking Space is assigned. Parking Spaces are for parking of Authorized Vehicles only. No vehicle repair (except in emergencies) or other activities may be undertaken in the Parking Garage. The Association has the power and duty to monitor and enforce compliance with this Section 2.1 0.4. (b) Parking for Owners, Residents, Employees and Guests Only. The Parking Garage is private property and Declarant has reserved the Parking Spaces for the benefit of itself, and for the use of Owners and residents, and the employees and guests of Owners in the Community only. No Owner may transfer by sale, lease, easement or license any Parking Space to any Person other than the Association, an Owner or the Declarant. All other transfers are void. -23-2294-00233\CCRS\1149361.1 6/7/13 (c) Prohibited Vehicles. No Restricted Vehicle may be parked, stored or kept in the Community **[, except in portions of the Parking Garage designated for the parking of such vehicles}**. 2.10.5 Parking Spaces. (a) Assignment. Parking Spaces in the Community are depicted and numbered on Exhibit E attached hereto, and will be assigned in the grant deed conveying a Unit. The right to use an assigned Exclusive Use Area parking space is an exclusive easement appurtenant to the Owner's Unit, and it will run with the Unit for the benefit of the Owner and future Owners of the Unit. (b) Transfer of Assigned Parking Spaces. Each Owner may, after the Close of Escrow, transfer one or more of the Owner's Parking Space(s) to another Owner or the Association, or exchange it for a Parking Space owned by another Owner, the Association or the Declarant subject to the provisions of this Section 2.1 0.5. Each transfer of a Parking Space shall be evidenced by the completion of a Parking Space Transfer Form provided by the Association, and such other form of conveyance as is acceptable to the affected Owners' lenders and title insurers. If a lender or title insurer requires a recorded grant deed to evidence the transfer of a Parking Space, the grantor and the grantee shall be responsible for the cost of Recording such grant deed, and they shall be solely responsible for paying all documentary transfer taxes, recording fees and property taxes in connection with the transfer. Before any such transfer, the affected Owners must give the Association prior written notice of the proposed exchange or transfer (including the names of the affected Owners, their Unit numbers, and the assigned numbers of the Parking Space(s) that will be exchanged or transferred) and complete the Parking Space Transfer Form. The Owners must also fully comply with all requirements of their respective lenders, including obtaining any required lender consents to the transfer prior to Recording any deed of conveyance for a Parking Space. The Owners must also comply with any requirements that have been imposed on the Community by any Local Government Agency, including, without limitation, any minimum parking spaces per Unit requirement or parking plan imposed on the Community by the City. The Association shall have the power and duty to monitor and approve or disapprove the use, enjoyment, transfer and exchange of Parking Spaces as necessary to the effective enforcement of this covenant. (c) Use and Transfer of Handicapped Parking Spaces. Certain parking spaces within the Parking Garage are designated as handicapped parking spaces. If there are no initial Owners or occupants in the Community who are appropriately licensed by the State of California to use handicapped parking spaces (each, a "Qualified Person"), or there are fewer Qualified Persons than the number of handicapped parking spaces in the Parking Garage, Declarant may assign the handicapped parking spaces to Units which are not owned or occupied by Qualified Persons. If a Qualified Person subsequently purchases, rents or leases a Unit in the Community and the Parking Space appurtenant to such Unit is not a handicapped parking space, the Association shall first request a voluntary temporary exchange of Parking Spaces from all Owners who have handicapped parking spaces and are not Qualified Persons (each, a "Nonqualified Owner"). If no Nonqualified Owner voluntarily agrees to a temporary exchange of a handicapped parking space with a Qualified Person, the Association shall choose the handicapped parking space located closest to the Parking Garage point of access to the Unit of -24-2294-()0233\CCRS\1149361.1 617/13 the Qualified Person (and if multiple handicapped parking spaces are similarly located, the Association shall choose by lottery) and assign the handicapped parking space to the Qualified Person, and shall assign the affected Nonqualified Owner the Parking Space that is appurtenant to the Qualified Person's Unit. The exchange shall remain in effect for so long as the Qualified Person occupies the Unit and remains licensed by the State of California to use a handicapped parking space and shall terminate automatically on the date that the Qualified Person ceases to occupy the Unit or ceases to be properly licensed to use a handicapped parking space, whichever occurs first. As stated above, the exchange is temporary and shall not alter the permanent location of the Parking Spaces assigned to the affected Units in the grant deeds for such Units. The Qualified Persons and Nonqualified Owners covenant and agree to cooperate with the Association in effecting the exchange and return of the handicapped parking spaces as required hereunder. The exchange authorized hereunder shall be deemed a temporary license of the affected Parking Spaces between the affected Owners, and shall not transfer any other interest in the Parking Spaces, which shall remain appurtenant to the Units to which they are assigned by grant deed. The right of a Qualified Person to exchange a non-handicapped parking space for a handicapped parking space shall be on a first-come, first-serve basis. The Board may adopt Rules and Regulations regulating the exchange of non-handicapped parking spaces for handicapped parking spaces that are not inconsistent with the provisions of this Section 2.10.S(c). 2.10.6 Guest Parking. Marked guest parking spaces are for temporary use, not to exceed forty-eight (48) hours, by invitees of Owners only. No Owner may park any vehicle or leave any other property in any guest space. Guest parking spaces are unreserved and unassigned, and they are available on a first-come-first-served basis. 2.10.7 Repair, Maintenance and Restoration. No Person may repair, maintain or restore any vehicle in the Community, and no Person may carry on in any portion of the Community any vehicle repair, maintenance or restoration business. 2.10.8 Enforcement. The Board has the right and power to enforce all parking and vehicle use regulations applicable to the Community, including the removal of violating vehicles from streets and other portions of the Community in accordance with California Vehicle Code Section 22658 or other applicable laws. The City may, but is not required to, enforce such restrictions, rules and regulations, in addition to applicable laws and ordinances. 2.10.9 Regulation and Restriction by Board. The Board has the power to: (a) establish additional rules and regulations concerning parking in the Association Property, including designating "parking," "guest parking," and "no parking" areas, (b) prohibit any vehicle parking, operation, repair, maintenance or restoration activity in the Community if it determines in its sole discretion that the activity is a nuisance, and (c) promulgate rules and regulations concerning vehicles and parking in the Community as it deems necessary and desirable. -25-2294.00233\CCRS\1149361.1 617/13 ? Q 2.11 STORAGE SPACES. 2.11.1 Assignment. Exclusive Use Area storage spaces in the Community ("Storage Spaces") are depicted and numbered on Exhibit F attached hereto, and will be assigned by separate grant deed. The Storage Spaces will be assigned on a first-come first-serve basis, and there is no guarantee that every Unit in the Community will have an appurtenant Storage Space. The right to use a Storage Space is an exclusive easementaPPJ¥;_te!Jilllb!O the Owner's Unit, and it will run with the Unit for the benefit of the Owner and future Owners of the Unit. 2.11.2 Transfer of Assigned Storage Spaces. Each Owner of a Unit with an appurtenant Storage Space may, after the Close of Escrow, transfer one or more of the Owner's Storage Space(s) to another Owner or the Association, or exchange it for a Storage Space owned by another Owner, the Association or the Declarant subject to the provisions of this Section 2.11.2. Each transfer of a Storage Space shall be evidenced by the completion of a Storage Space Transfer Form provided by the Association, and such other form of conveyance as is acceptable to the affected Owners' lenders and title insurers. If a lender or title insurer requires a recorded grant deed to evidence the transfer of a Storage Space, the grantor and the grantee shall be responsible for the cost of Recording such grant deed, and they shall be solely responsible for paying all documentary transfer taxes, recording fees and property taxes in connection with the transfer. Before any such transfer, the affected Owners must give the Association prior written notice of the proposed exchange or transfer (including the names of the affected Owners, their Unit numbers, and the assigned numbers of the Storage Space(s) that will be exchanged or transferred) and complete the Storage Space Transfer Form. The Owners must also fully comply with all requirements of their respective lenders, including obtaining any required lender consents to the transfer prior to Recording any deed of conveyance for a Storage Space. The Owners must also comply with any requirements that have been imposed on the Community by any Local Government Agency. The Association shall have the power and duty to monitor and approve or disapprove the use, enjoyment, transfer and exchange of Storage Spaces as necessary to the effective enforcement of this covenant. 2.11.3 Storage Space Maintenance Requirements. Each Owner of a Unit with an appurtenant Storage Space shall maintain the Storage Space in accordance with any standards set forth by the Association and in this Declaration. Each Owner of a Storage Space, at such Owner's cost, shall periodically clean and maintain the Owner's Storage Space and repair any door or gate hardware and locks for such Owner's Storage Space. The Association will repair and replace, as necessary, any broken doors or gates on the Storage Spaces and the Association may charge the Owner of the Storage Space the cost of the repair and replacement of the doors or gates as a Special Assessment. The Association may also levy Special Assessments for any required maintenance of a Storage Space, in the event that the Owner of a Storage Space fails to maintain the Owner's Storage Space in accordance with the Governing Documents. 2.11.4 Storage Space Restrictions. No Owner may transfer by sale, lease, easement or license any Storage Space to any Person other than the Association, an Owner or the Declarant. All other transfers are void. -26-2294-00233\CCRS\1 I 49361.1 6n/13 2.12 OWNER MAINTENANCE OF EXCLUSIVE USE AREAS. Each Owner shall keep the interior areas of an Owners Exclusive Use Areas clean and in good order. No Owner may store in any Exclusive Use Area any explosives or other hazardous materials (including any materials listed in Title 42 U.S.C. Section 9601, et seq., Title 49 U.S.C. 1801, et seq., Title 15 U.S.C. Section 2601, et seq., or in the regulations adopted pursuant to applicable law). Owners may not store in any Exclusive Use Area any flammable, explosive, dangerous or illegal materials, firearms, or any materials classified as hazardous or toxic under any local, State or Federal law or regulation, nor may Owners use such spaces for the habitation of humans or animals or do or permit to be done any act which is illegal or creates or may create a nuisance and/or would cause any increase in property and/or liability insurance premiums to the Association. No Owner may use the Exclusive Use Area deck or balcony for storage purposes, including, without limitation, the storage of bicycles, without the approval of the Board or Declarant (for so long as Declarant owns a Unit in the Community). The Association shall have the power and the duty to monitor and approve or disapprove the use and enjoyment of the Exclusive Use Areas as necessary to the enforcement of this covenant. However, the Association shall not be liable for the safety of any items stored in any Exclusive Use Area. 2.13 ANIMAL REGULATIONS. 2.13.1 Restrictions on Numbers and Types of Animals. No commercial or farm livestock, including poultry, may be kept in the Community. However, up to two (2) dogs or two (2) cats, or one (I) dog and one (I) cat may be kept in each Unit, subject to applicable law, the Governing Documents, and such rules and regulations as may be adopted by the Board. In addition to dogs and cats, but subject to local ordinances and such Rules and Regulations as may be adopted by the Board, residents may keep in the Unit reasonable numbers of small household pets that live in containers or cages, including fish and birds, so long as there is no external evidence of their presence in the Community. The Board has the power and discretion to determine whether the types or numbers of any animals kept in a Unit are a nuisance, and the Board shall have the power to abate the nuisance through any legal procedure that is available to the Association. 2.13.2 Animal Keeping Areas. Animals belonging to Owners, tenants, residents or guests in the Community must be kept indoors. Whenever outside the Unit, animals must be kept under the control of a Person capable of controlling the animal either on a leash or other appropriate restraint or carrier. No animal may be left unattended in any Exclusive Use Area at any time. 2.13.3 Owner Responsibility. The Owner of the Unit shall be solely responsible for ensuring that there is no external evidence of the presence of any animals kept by the Owner or by the other residents of the Unit (including unreasonable noise or noticeable odor). Furthermore, each Owner shall be absolutely liable to each and all other Owners, their Families, tenants, residents and guests for damages or injuries caused by any animals brought or kept in the Community by an Owner, by members of the Owner's Family, or by the Owner's guests, tenants or invitees. Each Owner shall immediately remove any excrement or clean other unsanitary conditions caused by such Owner's animals on any portion of the Community. -27-2294-00233\CCRS\1149361.1 6/7/13 2.14 ANTENNA AND SATELLITE DISH RESTRICTIONS. No Person may install in the Community any antenna or over-the-air receiving device except for an "Authorized Antenna." 2.14.1 Defmition. An Authorized Antenna is (a) an antenna designed to receive direct broadcast satellite service, including direct-to-home satellite service, that is one (1) meter or less in diameter, (b) an antenna designed to receive video progranuning service, including multi-channel multipoint distribution service, instructional television fixed service, and local multipoint distribution service, and is one (1) meter or less in diameter or diagonal measurement, (c) an antenna designed to receive television broadcast signals, or (d) an antenna used to receive and transmit fixed wireless signals. The foregoing definition is not intended to prohibit cordless or wireless telephones, PDAs, computers, wireless home data networking equipment or other portable wireless data or telephony devices that do not otherwise constitute a nuisance device under the Governing Documents. 2.14.2 Masts. An Authorized Antenna may be mounted on a mast to reach the height needed to receive an acceptable quality signal, subject to local governmental agency permitting requirements for safety purposes. No mast shall be installed in such a way that it overhangs the deck railing or patio wall/fence, or any portion of the Association Property outside the Exclusive Use Area, or poses a threat of damage to property or injury to persons. 2.14.3 Preferred Installation Locations and Restrictions on Installation. The Exclusive Use Area patios and decks are preferred installation locations for the Authorized Antenna, subject to applicable restrictions and prohibitions in this Declaration. The Committee may adopt reasonable restrictions on installation and use of an Authorized Antenna as part of its Design Guidelines in order to minimize visibility of the Authorized Antenna from other Condominiums. Such restrictions may designate one (I) or more additional preferred installation locations, or require camouflage such as paint (subject to the antenna manufacturer's recommendations) or screening vegetation or other Improvements. However, no restriction imposed by the Committee may (a) unreasonably delay or prevent the installation, maintenance or use of an Authorized Antenna, (b) unreasonably increase the cost of the installation, maintenance or use of an Authorized Antenna, or (c) preclude acceptable quality reception. 2.14.4 Prohibitions on Installation. No Authorized Antenna or any other device may be installed in the Association Property, including landscaped areas and exterior surfaces of the Condominium Building (such as the roof, fascia, chimneys, patio walls and exterior wall surfaces). Authorized Antennae may be installed in Exclusive Use Area patios or decks on a mast or tripod, but no Person may make any installation that penetrates the exterior surface of any portion of the Condominium Building, including deck railings. The Committee may prohibit the installation of an Authorized Antenna in a particular location (including an Exclusive Use Area) if, in the Committee's opinion, the installation, location or maintenance of such Authorized Antenna unreasonably affects the safety of the Owners or any other Person, or for any other safety-related reason established by the Committee. The Committee may also prohibit an Owner from installing an Authorized Antenna on any real property which such Owner does not own or is not entitled to exclusively use or control under the Governing Documents. The Committee also has the power to prohibit or restrict the installation of any -28-2294-00233\CCRS\1149361.1 617113 antenna or other over-the-air receiving device that does not meet the definition of an Authorized Antenna as set forth above. 2.14.5 Review after Installation. The Committee may review the location and installation of an Authorized Antenna after it is installed. After its review, the Committee may require that the Authorized Antenna be moved to a preferred location (if one has been designated) for safety reasons or to comply with reasonable restrictions subject to this Section and applicable law. 2.14.6 Restatement of Applicable Law. This Section is intended to be a restatement of the authority granted to the Committee under the law. All amendments, modifications, restatements and interpretations of the law applicable to the installation, use or maintenance of an antenna or over-the-air receiving device shall be interpreted to amend, modify, restate or interpret this Section. 2.15 TRASH. Trash and recyclables must be stored in sanitary containers inside the Unit and regularly moved to the Association Property collection bin. Oversized items that will not fit in the collection bin, and hazardous waste, electronics and other materials that may not be disposed of with regular trash or recyclables may not be abandoned anywhere in the Association Property; the Owner is solely responsible for arranging the proper disposal thereof. No trash, trash containers or recyclable materials may be stored in view of other Condominiums or Association Property. The Board has the power to make additional Rules and Regulations concerning the disposal of trash and recyclables, consistent with City ordinances. 2.16 OWNER-INSTALLED IMPROVEMENTS. 2.16.1 Outdoors. No Person may install outdoors in sight of the Association Property or other Condominiums, any clotheslines, patio cover, wiring, air conditioning equipment, heating units, water softeners, other similar Improvements, or other exterior additions or alterations to any Condominium Building. Outdoor patio or lounge furniture and plants may be kept in an Exclusive Use Area patio or deck in accordance with the Rules and Regulations. Outdoor display of the flag of the United States is permitted pursuant to California Civil Code Section 1353.5, as long as the flag and flag pole are located solely within, on and over the Owner's Exclusive Use Area patio or deck. 2.16.2 Indoors. No Owner or other resident of the Community may apply paint, foil, film, or other reflective material to the glass portion of any window in the Unit. This Section shall not be interpreted to prohibit the installation of blinds, shutters, curtains and other similar window coverings. **/Pending installation of permanent window coverings, Owners may cover windows with white sheets up to __ days/months after the Close of Escrow J** 2.16.3 Structural Modification. Except as otherwise expressly provided in this Declaration, no Person may modify any Condominium Building or any other Association Property (including walls, foundation, roof or fire sprinklers) if the modification will impair the structural integrity or fire safety of the Unit or neighboring Units. No Owner may pierce or remove or otherwise modify any fire wall assembly or other interior common wall separating adjoining Units. -29-2294·00233\CCRS\1149361.1 617/13 2.16.4 Noise Mitigation. No Owner may take any actions that may interfere with structural noise mitigation Improvements installed in the Condominium by Declarant. Owners are further prohibited from (a) puncturing, piercing or otherwise altering any walls shared with another Condominium, if any, (b) installing any sound system, loudspeakers, entertainment system or other music-, sound-or noise-generating or amplifying device in any walls or ceiling of an attached Condominium, and (c) installing any tile or other hard surface flooring on the upper levels of an attached Condominium without the prior written approval of the Design Review Committee. Declarant may have installed noise mitigating floor materials in upper floors or wall Improvements in walls shared with an adjoining Condominium. No Owner shall remove any Declarant-installed noise mitigation Improvements without replacing it with materials offering the same, substantially similar or better noise mitigation as the materials that were originally installed by Declarant. (a) Approval. Before installation of hard-surface flooring or replacement of any existing noise mitigating materials that may have been installed in walls, floors or ceilings, the Owner shall present the Design Review Committee with written documentation from a licensed engineer, architect or other consultant with qualifications reasonably acceptable to the Committee that the noise mitigating properties of the proposed flooring or wall material are the same as, substantially similar to, or better than the materials originally installed by Declarant. (b) Violations. If the Committee determines that an Owner has installed hard-surface flooring in violation of this Section, then the Committee shall have the power to require the violating Owner to replace the flooring with flooring that is identical to, or, if such flooring is no longer available, replacement flooring (and underlayment as applicable) that provides the same or better noise mitigation performance as that which was installed in the original construction of the Condominium Building. Removal and replacement shall be at the violating Owner's sole expense. 2.16.5 No Liability. Neither the Declarant nor the Association shall be liable or responsible for any damage that results from Improvements installed, constructed or modified by or at the direction of an Owner. Owners are advised to consult and use qualified consultants and contractors when installing, constructing or modifying Improvements on the Owner's Condominium. 2.17 MECHANICS' LIENS. No Owner may cause or permit any mechanic's lien to be filed against the Association Property or another Owner's Condominium for labor or materials alleged to have been furnished or delivered to such Owner. Any Owner who permits a mechanics' lien to be so filed shall cause the lien to be discharged no later than five (5) days after receipt of written notice to discharge the lien is received from the Board. If the Owner fails to remove a mechanic's lien after written notice from the Board, the Board may discharge the lien and levy a Special Assessment against the violating Owner's Condominium to recover the cost of discharge. 2.18 DRAINAGE. There shall be no interference with or obstruction of the established surface drainage pattem(s) over any Condominium in the Community, unless an adequate alternative provision is made for proper drainage. -30-2294-00233\CCRS\1149361.1 617/13 2.18.1 Established Drainage. Any alteration of the established drainage pattern must at all times comply with all applicable local governmental requirements. For the purpose hereof, "established" drainage is defined as the drainage which exists at the time of the first Close of Escrow for the sale of the Condominium by Declarant, or as shown on any plan approved by the Committee. Established drainage includes drainage from Condominium to Condominium and to and from property lying outside the Community. 2.18.2 Surface Drainage Improvements; Sub-Drains. The Established Drainage on a Condominium may consist of any or all of the following: earthen or concrete drainage swales, concrete channels, catch basins with underground drainage pipelines, roof- mounted gutters or downspouts (collectively, "Surface Drainage Improvements''). In addition, one or more drain lines may have been installed beneath the surface of the Condominium or Exclusive Use Area (each, a "Sub-Drain''). Surface Drainage Improvements and Sub-Drains and appurtenant Improvements constructed or installed by Declarant (if any) provide for collection and drainage of surface waters from each Condominium and from elsewhere in the Community to proper points of disposal. 2.18.3 Maintenance of Drainage Improvements. Each Owner must maintain, and keep free of debris and obstructions all Surface Drainage Improvements and Sub- Drains located on or under the Condominium or Exclusive Use Area, except those for which the Association or a public authority or utility are responsible. To ensure adequate drainage within the Community, it is essential that the Surface Drainage Improvements and the Sub-Drains, if any, not be modified, removed or blocked without having first made alternative drainage arrangements. Therefore, no Owner may install, alter, modify, remove or replace any Surface Drainage Improvements or Sub-Drains on or under the Owner's Condominium or Exclusive Use Area without first making alternative drainage arrangements approved in writing by the Committee and by applicable governmental agencies. Owner-installed irrigation systems must be installed and maintained to prevent excess runoff and accumulation of surface water. 2.18.4 Grading. The grading design in the Community should not be altered to redirect surface water flow toward the Condominiums or onto adjacent property, or to trap water so that it ponds or floods. Grading modifications are subject to law, approval by the Board, and the terms of any Recorded drainage easements. 2.19 WATER SUPPLY SYSTEM. No individual water supply, sewage disposal or water softener system is permitted on any Condominium unless such system is designed, located, constructed and equipped in accordance with the requirements, standards and recommendations of any water district having jurisdiction, the City, County, the Design Review Committee and all other applicable governmental authorities with jurisdiction. 2.20 VIEW OBSTRUCTIONS. Each Owner acknowledges that (a) there are no protected views in the Community, and no Condominium is assured the existence or unobstructed continuation of any particular view, and (b) any construction, landscaping (including the growth of landscaping) or other installation of Improvements by Declarant or other Owners may impair the view from any Condominium, and each Owner hereby consents to such view impairment. -31-2294-00233\CCRS\1149361.1 6/7/13 2.21 RIGHTS OF DISABLED. Subject to Article 5, each Owner may modify such Owner's Unit and the route over the Association Property leading to the front door of the Owner's Unit, at the Owner's sole expense to facilitate access to the Unit by persons who are blind, visually impaired, deaf or physically disabled, or to alter conditions which could be hazardous to such persons, in accordance with California Civil Code Section 1360 or any other applicable law. 2.22 TEMPORARY BUILDINGS. No outbuilding, tent, shack, shed or other temporary building or Improvement may be placed upon any portion of the Community either temporarily or permanently, without the prior written consent of the Design Review Committee. 2.23 PROHIBITED RESIDENTIAL USES. No garage, carport, trailer, camper, motor home, recreational vehicle or other vehicle may be used as a residence in the Community, either temporarily or permanently. 2.24 ASSOCIATION PROPERTY. The Association Property may not be altered without the Board's prior written consent. 2.25 MINERAL EXPLORATION AND EXTRACTION. No oil drilling, oil, gas or mineral development operations, oil refining, geothermal exploration or development, quarrying or mining operations of any kind may be conducted on the Community, nor are oil wells, tanks, tunnels or mineral excavations or shafts permitted upon the surface of any Condominium or within five hundred ( 500) feet of the surface of the Community. 2.26 POST-TENSION CONCRETE SLABS. Concrete slabs for Improvements constructed in the Community may be reinforced with a grid of steel cable installed in the concrete slab and then tightened to create extremely high tension. This type of slab is commonly known as a "Post-Tension Slab." Cutting into a Post-Tension Slab for any reason (for example, to install a floor safe, to remodel plumbing, etc.) is very hazardous and may result in serious damage to the Unit, personal injury, or both. Each Owner shall determine if the Condominium Building containing the Owner's Unit has been constructed with a Post-Tension Slab and, if so agrees: (a) Owner shall not cut into or otherwise tamper with the Post-Tension Slab; (b) Owner will not permit or allow any other Person to cut into or tamper with the Post-Tension Slab so long as Owner owns any interest in the Unit; (c) Owner shall disclose the existence of the Post- Tension Slab to any Person who rents, leases or purchases the Unit from Owner; and (d) Owner shall indemnify and hold Declarant and Declarant's agents, free and harmless from and against any and all claims, damages, losses or other liability (including attorneys' fees and costs of court) arising from any breach of this covenant by Owner. ARTICLE3 DISCLOSURES This Article discloses information obtained from third-party sources such as consultants, government and public records. No Person should rely on the ongoing accuracy or completeness of the information discussed in this Article because many of the matters discussed below are outside the control of Declarant and the Association. Accordingly, Declarant does not make any guarantee as to the accuracy or completeness of the matters disclosed below. Furthermore, -32-2294-00233\CCRS\1149361.1 617/13 Declarant is under no obligation to update or revise any matter disclosed in this Article. This Article is intended to provide Owners with information known or provided to Declarant as of the date this Declaration was Recorded, to be used as a starting point for further independent investigation. 3.1 NO REPRESENTATIONS OR WARRANTIES. No representations or warranties, express or implied, have been given by Declarant, the Association or their agents, in connection with the Community, its physical condition, zoning, compliance with law, fitness for intended use, or in connection with the subdivision, sale, operation, maintenance, cost of maintenance, taxes or regulation of the Community as a condominium project, except as expressly provided in this Declaration, as submitted by Declarant to the ORE, and as provided by Declarant to the first Owner of each Condominium. 3.2 ACCESS FACILITIES. Vehicular and pedestrian access into the Community may be controlled by entry doors or gates located at pedestrian entrances and the entrances to the parking garage, gates located on the private drive and elevators requiring keys to reach individual Units (collectively, "Access Points''). Staffing is not planned for all Access Points. However, Declarant may provide interim staffing of Access Points at its sole cost and sole discretion as a part of the marketing and development operations for the Community. Interim staffing of Access Points may be modified or eliminated at any time without notice. Declarant has reserved the right to limit the operation of any Access Point during the period when Declarant is offering Condominiums for sale. Until the last Close of Escrow occurs in the Community, Access Points may be open to the general public. Access Points and any staffing thereof are not intended to provide security, privacy or safety for persons, personal property or Condominiums within the Community. Declarant and the Association do not undertake to provide security or privacy for the Community or Owners, nor do they make any representations or warranties concerning the privacy, security and safety of the Community or Owners. Any patrol service provided by the Association or any Improvements constructed or maintained by the Association for the purposes of protecting Association Property are not intended to provide security for Persons, personal property or Condominiums within the Community. Neither the Association nor Declarant shall be liable to any Person and each Owner waives (to the extent permitted by applicable law) any claim against the Association and Declarant, for (i) any unauthorized or criminal entry of third parties into the Community, any Unit or any Improvements within the Community, (ii) any damage or injury to Persons, or (iii) any loss of property in and about the Community, any Unit or any Improvements within the Community, by or from any unauthorized or criminal acts of third parties, regardless of any action, inaction, failure, breakdown, malfunction or insufficiency of the services and Improvements provided by the Association or Declarant. 3.3 ELECTRIC POWER LINES, WIRELESS COMMUNICATIONS FACILITIES, AND HUMAN HEALTH. Underground and overhead electric transmission and distribution lines and transformers ("Power Lines'') are located within or in the vicinity of all residential communities, including this Community. The Power Lines within and in the vicinity of the Community produce electric and magnetic fields ("EMF''). Antennas and other equipment for wireless telecommunications (for example, cellular phones) may also be located in or in the vicinity of the Community. Like all wireless communications facilities, these facilities produce radio-frequency fields ("RF''). Numerous studies concerning the effects of EMF and/or -33-2294-00233\CCRS\1149361.1 617113 RF on human health have been undertaken over the past several years and some are ongoing. There are studies that have reported a possible relationship between EMF exposure and some health conditions, such as childhood leukemia, miscarriages, and certain neurological disorders, while other studies found no such relationship. Some studies have reported associations between RF exposure and brain cancer, while other studies found no such relationship. Additional information about EMF and RF is available from the following agencies: 3.3.1 the World Health Organization's International EMF Project website at http://www.who.int/topics/electromagnetic fields/en/; 3.3.2 Southern California Edison website at https://www.sce.com/wps/portal/ home/safetv/familvlenvironmental-health; 3.3.3 the U.S. National Institute of Environmental Health Sciences website at http://www.niehs.nih.gov/healthltopics/agents/emf/; 3.3.4 San Diego Gas & Electric website at http://www.sdge.com/safetvl electric-and-magnetic-fields/emf-issue; and htto://www.sdge.com/safetvlelectric-and-magnetic- fieldsllinks-emf-resources-web; 3.3.5 Electric and Magnetic Fields Program, at http://www.ehib.org/emf/; 3.3.6 Pacific Gas & Electric Company website at http://www.pge.com/ mybusiness/edusafetvlsystemworks/electric/emf/; and 3.3. 7 Sacramento Municipal Utility District website at https://www.smud.org/en/residential/education-safetv/powerlines-and-eguipment/electric-and- magnetic-fields.htm. This list is not meant to be all inclusive. 3.4 URBAN ENVIRONMENT. Living in an attached Condominium Building within a densely populated Community entails living in very close proximity to other persons and business, with attendant limitations on solitude. Owners will hear noise from adjacent Units within the Community, including noise from showers, bathtubs, sinks, toilets or other sources of running water. Also, Owners may hear noise from items such as vacuum cleaners, stereos or televisions, or from people running, walking or exercising. Finally, Owners can expect to hear noise from adjacent residential and commercial areas. Owners may also experience light entering the Units from street lights located in close proximity to the windows and doors of the Units. 3.5 SURROUNDING USES. This disclosure is intended to provide Owners with information on surrounding uses as of the date of Recordation. Uses and Improvements in the immediate vicinity of the Community include the items listed below: land. North of the Community: Buena Vista Lagoon; single family residence; vacant -34-2294-00233\CCRS\ 1149361.1 6/7/13 South of the Community: Residential buildings. East of the Community: Tennis court; Carlsbad Boulevard. West of the Community: Pacific Ocean; residential buildings. Existing and proposed uses in surrounding areas may change without notice. Neither Declarant nor the Association have any control over uses outside the Community. Owners are advised to contact applicable local governmental agencies for updated information concerning the development plan for the surrounding community. 3.6 BEACH AND LAGOON ACCESS. Both the Pacific Ocean and the Buena Vista Lagoon (collectively, the "Water Bodies'') are within walking distance from the Community. There are several walking paths and access points to the Water Bodies within the vicinity of the Community that will be open to the public, and, therefore, the areas in and around these walkways and access points will be subject to varying levels of pedestrian traffic, noise and other related conveniences. The Water Bodies are a potential hazard and should be approached with caution. Children and pets must be closely watched to prevent accidental drowning and other such injuries around the Water Bodies. In addition, the Water Bodies may also contribute to the propagation of mosquitoes, other pests and odors in the Community. Owners acknowledge and understand that it is Owners' sole responsibility to control or otherwise abate the impact of mosquitoes and mosquito bites. Declarant makes no representations or warranties concerning the safety of any person from mosquito bites and Declarant has no control over the use, maintenance or care of the Water Bodies. Owners may be excluded from visiting the Water Bodies from time to time. By acceptance of a deed to a Condominium, each Owner acknowledges that Declarant is not responsible for maintenance of the Water Bodies or for the safety of Owner, Owner's family, guests, tenants, invitees, agents or employees. 3.7 PROPERTY LINES. The boundaries of each Condominium in the Community and the Association Property are delineated on subdivision (tract) maps, lot line adjustments, parcel maps or Condominium Plans that are public records and are available at the County Recorder's office. 3.8 SEWER BACKFLOW PREVENTION VALVE. Certain Units in the Community have been provided with sewer backflow preventors. These devices are provided in Units which have a finish floor elevation that is lower than the nearest upstream manhole rim. These devices are designed to prevent sewage from backing up into a Unit in the event of a blockage in the main sewer line in the street. The clean-out for these backflow preventors is usually in the landscaped area in front of the Unit, but on occasion may be located within the garage floor of these specified homes. If for any reason a sewer line requires snaking or cleaning, the backflow preventor should be disconnected before conducting any such work to prevent the backflow preventor device from being damaged. 3.9 UTILITY IMPROVEMENTS. There may be above-ground and subterranean utility Improvements such as transformers, lift stations, water or sewer facilities, telecommunications vaults and other visible Improvements necessary for the delivery of utilities or other services either on or adjacent to each Condominium. The placement of such -35-2294-00233\CCRS\1149361.1 617/13 Improvements is dictated by the needs of the applicable utility or service provider, and the presence of such Improvements in the Community is in accordance with easements created prior to or during the development of the Community. Each Condominium and portions of the Association Property are subject to one or more such easements for placement of utility Improvements. No Owner may modify, remove or otherwise interfere with utility Improvements on any Condominium or other portion of the Community. 3.10 MOLD. Molds are simple, microscopic organisms, present virtually everywhere, indoors and outdoors. Mold can be any color, but is usually green, gray, brown or black. Mold requires a food source (such as paper, wood, leaves or dirt), a source of moisture and a suitable temperature (generally 40-100 degrees Fahrenheit) to grow. Individuals are exposed to molds on a daily basis, and in most instances there are no harmful effects. However, the buildup of molds in the indoor environment may contribute to serious health problems for some individuals. Due to a variety of factors, including the fact that sensitivities to various types of molds and other potential contaminants vary from person to person, there are currently no state or federal standards concerning acceptable levels of exposure to mold. Sources of indoor moisture that may lead to mold problems include, but are not limited to flooding, leaks, seepage, sprinkler spray hitting the Condominium Building, overflow from sinks or sewers, damp basement or crawl space, steam from shower or cooking, humidifiers, wet clothes drying indoors, watering house plants, and clothes dryers exhausting indoors. Each Owner should take precautions to prevent the growth of mold in the Unjt from these and other sources. Preventative measures include, but are not limited to the following: (1) regularly cleaning the Unit; (2) regularly checking for accumulated moisture in comers and unventilated areas; (3) running fans, dehumidifiers and air conditioners to reduce indoor humidity; (4) stopping the source of any leak or flooding; (5) removing excess water with mops or a wet vacuum; (6) moving wet items to a dry, well-ventilated area; (7) regularly cleaning and disinfecting indoor and outdoor surfaces that may contain mold; (8) having major appliances, such as furnaces, heat pumps, central air conditioners, ventilation systems and furnace-attached humidifiers inspected, cleaned and serviced regularly by a qualified professional; (9) cleaning the refrigerator, air conditioner and dehumidifier drip pans and filters regularly and ensuring that refrigerator and freezer doors seal properly; and (1 0) avoiding over-watering oflandscaping. It is the Owner's responsibility to monitor the Residence on a continual basis for excessive moisture, water and mold accumulation. For additional information regarding mold, please refer to the following websites: California Department of Public Health -http://www.cdph.ca.gov; Centers for Disease Control and Prevention -http://www.cdc.gov/nceh; U.S. Environmental Protection Agency http://www.eoa.gov; lllinois Department of Public Health- http://www.idph.state.il.us; and Washington State Department of Health-http://www.doh.wa.gov. 3.11 RADON. Radon is a colorless, odorless radioactive gas that is produced by the natural decay of uranium, which is found in nearly all soils. Because radon is a gas, it can seep from the ground into the air in a house through openings in the ground, and its presence increases the risk of lung cancer. The U.S. Environmental Protection Agency (the "EPA") and U.S. Geological Survey have produced a map that assigns one to three zone designations based on radon potential to each county. According to the EPA, each zone designation reflects the -36-2294-00233\CCRS\ 1149361.1 6/7/13 average short-term radon measurement that can be expected to be measured in a building without the implementation of radon control measures. This map is not meant to be used to determine whether a particular home should be tested for radon, but is used to assist various government agencies and organizations in focusing their radon program resources. Declarant has been informed by its consultants that the County is currently in Zone 2, which has a radon potential of moderate (frorn 2 to 4 pCi/L). Declarant and the Association make no representations, warranties or guarantees as to the degree of radon risk within the Community. Potential buyers and residents are advised to consult with the City or other public agencies and appropriate experts to evaluate the potential risk. Additional information may be found at http://eetd.lbl.gov/IEP/high-radon!USgm.htrn. 3.12 SUPPLEMENTAL REAL PROPERTY TAXES. The County Assessor has the authority to reassess new homes after the Close of Escrow based on the difference between its appraised value and the home's unimproved value for the period after escrow closes. The Assessor will issue a supplemental tax bill to Owners for the difference in the taxes due based upon the reassessment. Declarant has no control over the valuation, timing or the amount of the supplemental bill resulting from the reassessment. Owners are solely responsible for the payment of the supplemental tax bill. Code: The following notice is given pursuant to Section 11 02.6c of the California Civil "California property tax law requires the Assessor to revalue real property at the time the ownership of the property changes. Because of this law, you may receive one or two supplemental tax bills, depending on when your loan closes. The supplemental tax bills are not mailed to your lender. If you have arranged for your property tax payments to be paid through an impound account, the supplemental tax bills will not be paid by your lender. It is your responsibility to pay these supplemental bills directly to the Tax Collector. If you have any question concerning this matter, please call your local Tax Collector's Office." Neither Declarant nor any of its authorized agents, representatives, employees or sales people have made any representations or warranties regarding supplemental real property taxes. 3.13 MEGAN'S LAW NOTICE. The following notice is given pursuant to Section 2079.1 Oa of the California Civil Code: "Pursuant to Section 290.46 of the Penal Code, information about specified registered sex offenders is made available to the public via an Internet Web site maintained by the Department of Justice at www.meganslaw.ca.gov. Depending on an offender's criminal history, this information will include either the address at which the offender resides or the -37-2294-00233\CCRS\ 1149361.1 6/7/13 community of residence and ZIP Code in which he or she resides." Neither Declarant nor the Neighborhood Associations make any representations, warranties or guarantees regarding the presence or absence of registered sex offenders within the Community or in the surrounding area. Declarant and the Association have no obligation or duty to investigate existing residents or buyers to determine whether they are sex offenders. Owners are solely responsible for making their own investigation. 3.14 CHANGE IN PLANS. Declarant has the right to develop the Annexable Area with Improvements that may be different in design, size, character, style and price from those in Phase I or any other Phase. 3.15 NO ENHANCED PROTECTION AGREEMENT. No language in this Declaration, any Notice of Addition or any Supplemental Declaration shall constitute, or be interpreted to constitute, an enhanced protection agreement ("EPA''), as defined in California Civil Code Section 90 I. Further, no express or implied representations or warranties made by Declarant in any other writing are intended to constitute, or to be interpreted to constitute, an EPA. 3.16 ADDITIONAL PROVISIONS. There may be prOVISIOns of various laws, including the Davis-Stirling Common Interest Development Act codified at Sections 1350, et seq. of the California Civil Code and the Federal Fair Housing Act codified at Title 42 United States Code, Section 3601, et seq., which may supplement or override the Governing Documents. Declarant makes no representations or warranties regarding the future enforceability of any portion of the Governing Documents. ARTICLE4 THE ASSOCIATION 4.1 GENERAL DUTIES AND POWERS. The Association has the duties and powers enumerated and described in the Governing Documents, in addition to the general and implied powers of a nonprofit mutual benefit corporation, generally to do all things that a corporation organized under California law may lawfully do which are necessary or proper in operating for the general welfare of the Owners, subject only to the limits on the exercise of such powers listed in the Governing Documents. Unless otherwise indicated in the Articles of Incorporation, Bylaws, this Declaration, or a Supplemental Declaration, the powers of the Association may be exercised by the Board. 4.2 SPECIFIC DUTIES AND POWERS. In addition to its general powers and duties, the Association has the following specific powers and duties. 4.2.1 Association Property. The power and duty to accept, maintain and manage the Association Property in accordance with the Governing Documents. The Association may install or remove capital Improvements on the Association Property. The Association may reconstruct, replace or refinish any Improvement on the Association Property. -38-2294-00233\CCRS\114936!.1 6/7/13 4.2.2 Utilities. The power and duty to obtain, for the benefit of the Community, all water, gas and electric services necessary for the Association Property. The power and duty to obtain for the benefit of the Community, all commonly metered residential utilities. 4.2.3 Granting Rights. The power to grant exclusive or nonexclusive easements, licenses, rights of way or fee interests in the Association Property owned in fee simple by the Association, to the extent any such grant is reasonably required (a) for Improvements to serve the Community, (b) for purposes of conformity with the as-built location of Improvements installed or authorized by Declarant or the Association, (c) in connection with any lawful lot line adjustment, or (d) for other purposes consistent with the intended use of the Community. This power includes the right to create and convey easements for one or more Owners over portions of the Association Property. The Association may de-annex any portion of the Community from the encumbrance of the Declaration in connection with any lawful lot line adjustment. After the Association acquires fee title to or any easement right over Association Property, the affirmative vote of members owning at least sixty-seven percent ( 67%) of the Condominiums in the Community shall be required before the Board may grant exclusive use of any portion of that Association Property to any member, except as provided in California Civil Code Section 1363.07. Any measure placed before the members requesting that the Board grant exclusive use of any portion of the Association Property shall specify whether the Association will receive any monetary consideration for the grant and whether the Association or the transferee will be responsible for providing any insurance coverage for exclusive use of the Association Property. 4.2.4 Transfer of Exclusive Use Area Parking and Storage Spaces. Subject to Section 4.2.3 above, pursuant to Sections 2.1 0.5 and 2.11.2 of this Declaration the power to enter into license, lease, rent or purchase agreements with Owners in the Community for the transfer of Exclusive Use Area parking and storage spaces, as well as the power and duty to monitor any such license, lease, rent or purchase between Owners. 4.2.5 Employ Personnel. The power to employ Persons necessary for the effective operation and maintenance of the Association Property, including legal, management and accounting services. 4.2.6 Insurance. The power and duty to keep insurance for the Association Property in accordance with this Declaration. 4.2.7 Sewers and Storm Drains. The power and duty to maintain any private sewer systems, private storm drains, or private drainage facilities in the Association Property in accordance with the Governing Documents. 4.2.8 Maintenance Guidelines. The power and duty to (a) operate, maintain and inspect the Association Property and its various components in conformity with any Maintenance Guidelines and any maintenance manual, and (b) review any maintenance manual -39-2294-00233\CCRS\1149361.1 6/7/13 for necessary or appropriate revisions no less than annually after the Board has prepared the Budget. 4.2.9 Rules and Regulations. The power, but not the duty, to adopt, amend, repeal and create exceptions to, the Rules and Regulations. (a) Standards for Enforceability. To be valid and enforceable, a Rule must satisfy all the following requirements: (I) The Rule must be in writing; (2) The Rule is within the authority of the Board conferred by law or by this Declaration, the Articles of Incorporation or the Bylaws; (3) The Rule is not inconsistent with governing law, this Declaration, the Articles of Incorporation or the Bylaws; (4) The Rule is adopted, amended or repealed in good faith and in substantial compliance with the requirements of Article 4 of Title 6 of Part 4 of Division 2 of the California Civil Code; ( 5) The Rule is reasonable; and (6) The Rule complies with the requirements of California Civil Code Section 1357.110. (b) Areas of Regulation. The Rules and Regulations may concern use of the Community, signs, parking restrictions, minimum standards of property maintenance, and any other matter under the Association's jurisdiction. (c) Limits on Regulation. The Rules and Regulations must apply uniformly to all Owners and must comply with this Declaration and all applicable state and local laws. The rights of Owners to display in or on their Units religious, holiday and political signs, symbols and decorations of the kinds normally displayed in residential condominium neighborhoods shall not be abridged. However, the Association may adopt time, place and manner restrictions for such displays if they are visible outside the Unit. No modification to the Rules and Regulations may require an Owner to dispose of personal property that was in compliance with all rules previously in force; however, this exemption shall apply only during the period of such Owner's ownership of the Condominium and it shall not apply to: (I) subsequent Owners who take title to a Condominium after the modification is adopted; or (2) clarifications to the Rules and Regulations. (d) Procedure for Adoption, Amendment and Repeal. Rules or procedures concerning (1) the use of Association Property, (2) the use of a Condominium, including any aesthetic standards or Design Guidelines that affect Condominiums, (3) member discipline, including any schedule of monetary penalties for violation of the Governing Documents, (4) any procedure for the imposition of penalties, (5) any standards for delinquent assessment payment plans, ( 6) any procedures adopted by the Association for resolution of -40-2294.(){)233\CCRS\ll4936l.l 617/!3 assessment disputes, (7) any procedures for reviewing and approving or disapproving a proposed physical change to a Condominium or to the Association Property, and (8) procedures for elections (each, a "Covered Rule") may only be adopted, amended or repealed (each, a "Rule Change") in accordance with the following procedure: (!) The Board must provide written notice ("Notice") of a proposed Rule Change to the members at least thirty (30) days before making the Rule Change, except for an Emergency Rule Change (defined below). The Notice must include the text of the proposed Rule Change and a description ofthe purpose and effect of the proposed Rule Change; (2) The decision on a proposed Rule Change shall be made at a Board meeting after consideration of comments made by the members of the Association; (3) The Board shall deliver Notice of the Rule Change to every member of the Association within fifteen (15) days of adoption. If the change was an Emergency Rule Change, the Notice shall include the text of the Emergency Rule Change, and the date on which the Emergency Rule Change expires; (4) If the Board determines that an immediate Rule Change is required to address an imminent threat to public health or safety, or an imminent risk of substantial economic loss to the Association, it may make the change on an emergency basis ("Emergency Rule Change") and no Notice will be required. An Emergency Rule Change is effective for one hundred-twenty (120) days, unless the Emergency Rule Change provides for a shorter effective period. Any Rule Change that is adopted as an Emergency Rule Change may not be re-adopted under authority of this subpart; (5) A Notice required by this Section 4.2.9(d) is subject to California Civil Code Section 1350.7; (6) A Rule Change made pursuant to this Section 4.2.9(d) maybe reversed as provided in California Civil Code Section 1357.140. does not apply to: above; Association Property; apply generally; or a Special Assessment; (e) Exceptions to Procedure. The procedure in Section 4.2.9(d) (I) Rules that do not meet the definition of Covered Rules (2) decisions of the Board regarding maintenance of (3) a decision on a specific matter that is not intended to ( 4) a decision setting the amount of an Annual Assessment -41-2294.00233\CCRS\1149361.1 617/13 ( 5) a Rule Change that is required by law if the Board has no discretion as to the substantive effect of the changes; or (6) issuance of a document that merely repeats existing law or the Governing Documents. (f) Use of Facilities. The Rules and Regulations may (1) specify a maximum number of guests which an Owner, tenant or other Person may admit to the Association Property recreational facilities at one time, (2) establish rules for allowing Owners, tenants or other Persons to use Association Property facilities for private functions, or (3) establish admission fees, deposit requirements and other fees for the use of any facilities on the Association Property. 4.2.10 Borrowings. The power, but not the duty, to borrow money for purposes authorized by the Articles of Incorporation, Bylaws, Declaration, any Supplemental Declarations or any Notice of Addition, and to use the Association Property as security for the borrowing. 4.2.11 Contracts. The power, but not the duty, to enter into contracts. This includes contracts with Owners or other Persons to provide services or to maintain Improvements in the Community and elsewhere which the Association is not otherwise required to provide or maintain by this Declaration. 4.2.12 Telecommunications Contract. Notwithstanding anything in the Governing Documents to the contrary, the Board shall have the power to enter into, accept an assigmnent of, or otherwise cause the Association to comply with the terms and provisions of an exclusive telecommunications services contract ("Telecommunications Contract") with a telecommunications service provider ("Service Provider"), pursuant to which the Service Provider shall serve as the provider of Telecommunications Services to each Condominium in the Community. The Board shall only enter into, accept an assigmnent of, or otherwise cause the Association to comply with the terms of the Telecommunications Contract if the Board determines that the Telecommunications Contract is in the best interests of the Association. Although not exhaustive, the Board shall consider the following factors in making such a determination in the exercise of its business judgment: (a) Initial Term and Extensions. The initial term of the Telecommunications Contract should not exceed five (5) years, and, if the Telecommunications Contract provides for automatic extensions, the length of each such extension should also not exceed five ( 5) years. (b) Termination. The Telecommunications Contract should provide that: (I) at least six (6) months before the end of either the initial or any extended term of the Telecommunications Contract, the entire Membership of the Association may, with the vote or written approval of more than fifty percent (50%) of all Members other than Declarant, prevent any automatic extension that the Telecommunications Contract may provide for (with or without cause), and thereby cause the Telecommunications Contract to expire, and (2) at any time with reasonable notice periods, the Board may terminate the Telecommunications Contract -42-2294-00233\CCRS\1149361.1 6/7/13 if, in the sole discretion of the Board, the Service Provider fails to provide quality, state-of-the- art Telecommunications Services. (c) Fees. Whether the monthly fee charged to the Association by the Service Provider for the provision of the Telecommunications Services to all of the Condominiums represents a discount from the comparable retail fees charged by the Service Provider in the general geographic area in which the Community is located, and, if so, the amount of such discount. (d) Installation of Telecommunications Facilities. Whether the Service Provider is solely responsible for the installation, and the cost thereof, of all of the Telecommunications Facilities necessary to provide Telecommunications Services to each Condominium. (e) Removal of Telecommunications Facilities. Whether the Service Provider has the right to remove the Telecommunications Facilities upon expiration or termination of the Telecommunications Contract. 4.2.13 Indemnification. (a) For Association Representatives. To the fullest extent authorized by law, the Association has the power and duty to indemnify Board members, Association officers, Design Review Committee members, and all other Association committee members for all damages, pay all expenses incurred, and satisfy any judgment or fine levied as a result of any action or threatened action brought because of performance of an act or omission within what such Person reasonably believed to be the scope of the Person's Association duties ("Official Act''). Board members, Association officers, Design Review Committee members, and all other Association committee members are deemed to be agents of the Association when they are performing Official Acts for purposes of obtaining indemnification from the Association pursuant to this Section. The entitlement to indemnification under this Declaration inures to the benefit of the estate, executor, administrator and heirs of any person entitled to such indemnification. (b) For Other Agents of the Association. To the fullest extent authorized by law, the Association has the power, but not the duty, to indemnify any other Person acting as an agent of the Association for damages incurred, pay expenses incurred, and satisfy any judgment or fine levied as a result of any action or threatened action because of an Official Act. (c) Provided by Contract. The Association also has the power, but not the duty, to contract with any Person to provide indemnification in addition to any indemnification authorized by law on such terms and subject to such conditions as the Association may impose. 4.2.14 Annexing Additional Property. The power, but not the duty, to annex, pursuant to Section 16.2, additional property to the property encumbered by this Declaration. -43-2294-00233\CCRS\1149361.1 617/13 4.2.15 Vehicle and Parking Restrictions. The power granted in Section 2.10 to identify Authorized Vehicles or Restricted Vehicles and to modify the vehicle and parking restrictions in the Governing Documents. 4.2.16 License and Use Agreements. The Association may enter into agreements with Declarant or any homeowners association having jurisdiction over the Annexable Area to share facilities located on the Association Property ("Facility'') with the Owners of Units in the Annexable Area. Any such agreement shall be in form and content acceptable to Declarant, the Board of Directors (without the approval of Owners) and Declarant or the board of directors of any adjacent homeowners association and shall include provisions regarding use and sharing of maintenance costs for the Facility. 4.2.17 Landscaping. The Board has the power, but not the duty, to grant Owners revocable licenses that allow Owners to replace and/or add landscaping Improvements to any portion of the Association Property, subject to the prior written approval of the Board, any reasonable restrictions or conditions the Board may impose, and the right of the Board to revoke such license, remove the Improvements and charge the Owner for the cost of such removal. 4.2.18 Prohibited Functions. (a) Property Manager. The Association shall not hire any employees, furnish offices or other facilities, or use any Association Property for an "on-site" Manager. The Manager shall at all times be a professional manager employed as an independent contractor or agent working at its own place of business. (b) Off-site Nuisances. The Association shall not use any Association funds or resources to abate any annoyance or nuisance emanating from outside the physical boundaries of the Community. (c) Political Activities. The Association shall not conduct, sponsor, participate in or expend funds or resources toward any activity, campaign or event, including any social or political campaign, event or activity which does not directly and exclusively pertain to the authorized activities of the Association. Furthermore, the Association shall not participate in federal, state or local activities or activities intended to influence a governmental action affecting areas outside the Community (for example, endorsement or support of legislative or administrative actions by a local governmental authority), nor shall it support or campaign for or against candidates for elected or appointed office or ballot proposals. There shall be no amendment of this Section so long as Declarant owns any portion of the Community. 4.2.19 Standing to Resolve Disputes. The Association shall have standing to institute, defend, settle or intervene in litigation, alternative dispute resolution or administrative proceedings (each, an "Action'') in its own name as the real party in interest and without joining the Owners, in matters pertaining to (a) damage to the Association Property, (b) damage to portions of the Condominiums which the Association is obligated to maintain or repair, and (c) damage to portions of the Condominiums which arises out of, or is integrally related to, damage to the Association Property or portions of the Condominiums that the Association is obligated to maintain or repair (each, a "Claim''). However, the Association shall not have -44-2294-00233\CCRS\1149361.1 6/7/13 standing to institute, defend, settle or intervene in any Action in any matter pertaining only to an individual Condominium and not included in clauses (b) and (c) above. The Association may, in its sole discretion, elect to institute, intervene in, continue, settle or dismiss an Action at any time. If the Association institutes or intervenes in an Action on a Claim, the Association's standing shall be exclusive, and the Owners shall thereafter be barred from instituting a new Action or maintaining a pending Action on the same Claim. The Association's election to institute or intervene in an Action on a particular Claim shall not create any affirmative obligation on the part of the Association to maintain, settle or dismiss the Action, except in the Association's sole discretion, and subject to Section 12.4. If the Association elects to settle an Action, the terms of the settlement shall be binding on the Owners, and the Owners shall be barred from instituting or continuing any other Action on the same Claim. If the Association elects to dismiss an Action, the dismissal shall be with prejudice to the institution or continuation by one or more Owners of any Action on the same Claim. 4.3 STANDARD OF CARE, NON-LIABILITY. 4.3.1 Scope of Powers and Standard of Care. (a) General Scope of Powers. Rights and powers conferred on the Board, the Design Review Committee or other committees or representatives of the Association by the Governing Documents are not duties, obligations or disabilities charged upon those Persons unless the rights and powers are explicitly identified as including duties or obligations in the Governing Documents or law. Unless a duty to act is imposed on the Board, the Design Review Cmrunittee or other committees or representatives of the Association by the Governing Documents or law, the Board, the Design Review Committee and the committees have the right to decide to act or not act. Any decision not to act is not a waiver of the right to act in the future. (b) Business Affairs. This Section 4.3.1(b) applies to Board member actions in connection with management, personnel, maintenance and operations, insurance, contracts and finances, and Design Review Committee member actions. Each Board member shall perform the duties of a Board member in good faith, in a manner the Board member believes to be in the best interests of the Association and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. When performing Board duties, a Board member is entitled to rely on information, opinions, reports or statements, including financial data prepared or presented by: (1) One (1) or more officers or employees of the Association whom the Board member believes to be reliable and competent in the matters presented; (2) Counsel, independent accountants or other Persons as to matters which the Board member believes to be within such Person's professional or expert competence; or (3) A committee of the Board upon which the Board member does not serve, as to matters under its designated authority, which committee the Board member believes to merit confidence, so long as, in any such case, the Board member acts in -45-2294-00233\CCRS\1149361.1 6/7/13 good faith, after reasonable inquiry when the need therefor is indicated by the circumstances and without knowledge that would cause such reliance to be unwarranted. This Section 4.3.l(b) is intended to be a restatement of the business judgment rule established in applicable law as it applies to the Association. All modifications and interpretations of the business judgment rule applicable to the Association shall be interpreted to modify and interpret this Section 4.3.l(b). (c) Association Governance. This Section 4.3.1 applies to Board actions and Design Review Committee decisions in connection with interpretation and enforcement of the Governing Documents, architectural and landscaping control, regulation of uses within the Community, rulemaking and oversight of committees. Actions taken or decisions made in connection with these matters shall be reasonable, fair and nondiscriminatory. 4.3.2 Non-liability. (a) General Rule. No Person is liable to any other Person (other than the Association or a party claiming in the name of the Association) for injuries or damage resulting from such Person's Official Acts, except to the extent that such injuries or damage result from the Person's willful or malicious misconduct. No Person is liable to the Association (or to any party claiming in the name of the Association) for injuries or damage resulting from such Person's Official Acts, except to the extent that such injuries or damage result from such Person's negligence or willful or malicious misconduct. The Association is not liable for damage to property in the Community unless caused by the negligence of the Association, the Board, the Association's officers, the Manager or the Manager's staff. (b) Non-liability of Volunteer Board Members and Officers. A volunteer Board member or volunteer Association officer shall not be personally liable to any Person who suffers injury, including bodily injury, emotional distress, wrongful death or property damage or loss as a result of the tortious act or omission of the volunteer officer or Board member if all applicable conditions specified in California Civil Code Section 1365.7 are met. (c) Non-liability of Owners. Pursuant to California Civil Code Section 1365.9, no Owner shall be liable for any cause of action in tort which can be brought against the Owner solely because of the Owner's undivided interest in the Common Area so long as the Association keeps one (1) or more policies of insurance which include coverage for general liability of the Association in the amount required by California Civil Code Section 1365.9 and that insurance is in effect for the cause of action being brought. 4.4 MEMBERSHIP. 4.4.1 Generally. Every Owner shall automatically acquire a Membership in the Association and retain the Membership until such Owner's Condominium ownership ceases, at which time such Owner's Membership shall automatically cease. Ownership of a Condominium is the sole qualification for Membership. Memberships are not assignable except to the Person to whom title to the Condominium is transferred, and every Membership is appurtenant to and may not be separated from the fee ownership of the Condominium. The -46-2294.00233\CCRS\1149361.1 617/13 rights, duties, privileges and obligations of all Owners are as provided in the Governing Documents. 4.4.2 Transfer. The Membership of any Owner may not be transferred, pledged or alienated in any way, except on the transfer or encumbrance of such Owner's Condominium, and then only to the transferee or Mortgagee of the Owner's Condominium. A prohibited transfer is void and will not be reflected in the records of the Association. Any Owner who has sold the Owner's Condominium to a contract purchaser under an agreement to purchase may delegate the Owner's Membership rights to the contract purchaser. The delegation must be in writing and must be delivered to the Association before the contract purchaser may vote. The contract seller shall remain liable for all Assessments attributable to the contract seller's Condominium which accrue before title to the Condominium is transferred. If the contract seller fails or refuses to delegate the Membership rights to the contract purchaser before the Close of Escrow, the Association may record the transfer to the contract purchaser in the Association's records. However, no contract purchaser will be entitled to vote at Association meetings during the term of a purchase contract without satisfactory evidence of the delegation of the contract seller's Membership rights to the contract purchaser. The Association may levy a reasonable transfer fee against a new Owner and such Owner's Condominium (which fee shall be paid through escrow or added to the Annual Assessment chargeable to such new Owner) to reimburse the Association for the administrative cost of transferring the Membership to the new Owner on the Association's records. Such fee may not exceed the Association's actual cost involved in changing its records. 4.4.3 Classes of Membership. The Association classes of voting Membership are as follows: (a) Class A. Class A members are all Owners except Declarant for so long as a Class B Membership exists. Class A members are entitled to one ( 1) vote for each Condominium owned by such Class A members which is subject to Assessment. Declarant shall become a Class A member on conversion of Declarant's Class B Membership as provided below. The vote for each Condominium shall be exercised in accordance with Section 4.5, but no more than one (1) Class A vote may be cast for any Condominium. (b) Class B. The Class B member is Declarant. The Class B member is entitled to three (3) votes for each Condominium owned by Declarant which is subject to Assessment. The Class B Membership shall convert to Class A Membership on the earlier to occur of the following events: (1) The second (2"d) anniversary of the first Close of Escrow in the most recent Phase; or (2) The fourth (4th) anniversary of the first Close of Escrow in Phase 1. 4.4.4 Class 8 Board Appointment Right. The Class B Membership shall also include a limited right to appoint a simple majority of the members of the Board of Directors (the "Board Appointment Right"'). -47-2294-00233\CCRS\1149361.1 6/7/13 (a) Limits on Exercise of Board Appointment Right. Until the expiration of the Board Appointment Right as determined below, Declarant shall not be permitted to cast any Class A or Class B vote to elect any member of the Board of Directors. Declarant's power to fill seats on the Board shall during that time be limited to exercise of the Board Appointment Right. (b) Term of Board Appointment Right. The Board Appointment Right shall remain effective until the earlier of: (I) the date on which the Class B Membership converts to Class A Membership; or (2) the date on which Declarant no longer owns any portion of the Community or Annexable Area; or (3) the date set by Declarant in a written notice delivered to the Board. (c) No Amendment without Declarant Consent. Notwithstanding anything to the contrary in this Declaration, this Section 4.4 shall not be amended without the prior written consent of Declarant until Declarant no longer owns any portion of the Community or Annexable Area. 4.5 VOTING RIGHTS. Voting rights attributable to the Units in a Phase shall be exercised only after Annual Assessments have commenced in the Phase. 4.5.1 Limits GeneraUy. All voting rights are subject to the Governing Documents. Except as provided in Sections 4.5.2 and 12.3 of this Declaration and as provided in the Bylaws, as long as there is a Class B Membership, any provision of the Governing Documents which expressly requires the vote or written consent of a specified percentage (instead of a majority of a quorum) of the Association's voting power before action may be undertaken shall require the approval of such specified percentage of the voting power of both the Class A and the Class B Memberships. Except as provided in Section 12.3 of this Declaration and as provided in the Bylaws, on termination of the Class B Membership, any provision of the Governing Documents which expressly requires the vote or written consent of Owners representing a specified percentage (instead of a majority of a quorum) of the Association's voting power before action may be undertaken shall then require the vote or written consent of Owners representing such specified percentage of both (a) the Association's total Class A voting power, and (b) the Association's Class A voting power represented by Owners other than Declarant. 4.5.2 Vote to Initiate Right to Repair Law Claim. Beginning on the date of the first annual meeting of Owners, Declarant relinquishes control over the Association's ability to decide whether to initiate a Right to Repair Law Claim. This means that Declarant, current employees and agents of Declarant, Board members who are appointed by Declarant, Board members elected by a majority of votes cast by Declarant, and all other Persons whose vote or written consent is inconsistent with the intent of the preceding sentence, are prohibited from participating and voting in any decision of the Association or Owners to initiate a Right to -48-2294-00233\CCRS\1149361.1 6/7/13 Repair Law Claim. The Association must obtain the vote or written consent of a simple majority of the Association's voting power, excluding votes attributable to Declarant, in order to initiate a Right to Repair Law Claim. 4.5.3 Joint Ownership. When more than one (I) Person holds an interest in any Condominium ("co-owners''), each co-owner may attend any Association meeting, but only one (I) co-owner shall be entitled to exercise the single vote to which the Condominium is entitled. Co-owners owning the majority interests in a Condominium may designate in writing one (1) of their number to vote. Fractional votes shall not be allowed and the vote for each Condominium shall be exercised, if at all, as a unit. Where no voting co-owner is designated or if the designation is revoked, the vote for the Condominium shall be exercised as the co-owners owning the majority interests in the Condominium agree. Unless the Association receives a written objection in advance from a co-owner, it shall be conclusively presumed that the voting co-owner is acting with the co-owners' consent. No vote may be cast for any Condominium if the co-owners present in person or by proxy owning the majority interests in such Condominium fail to agree to the vote or other action. The nonvoting co-owner or co-owners are jointly and severally responsible for all obligations imposed on the jointly-owned Condominium and are entitled to all other benefits of ownership. All agreements and determinations lawfully made by the Association in accordance with the voting percentages established in the Governing Documents are binding on all Owners and their successors in interest. 4.6 UNSEGREGATED REAL PROPERTY TAXES. To the extent not assessed to or paid by the Owners, the Association shall pay all real and personal property taxes and assessments levied on the Community. If all Condominiums in a Phase are taxed under a tax bill covering all of such Phase, then each Owner shall pay the Owner's share of any installment due under the tax bill to the Association at least ten (I 0) days before the delinquency date. The Association shall transmit the taxes to the appropriate tax collection agency on or before the delinquency date. The Association shall allocate taxes equally among the Owners and their Condominiums in such Phase, based on the total number of Condominiums in such Phase. The Association shall, at least forty five (45) days before the delinquency date of any tax installment, deliver to each Owner in such Phase a copy of the tax bill, along with a written notice setting forth the Owner's obligation to pay the Owner's share of the tax installment and the potential additional charges to the Owner for failure to comply. The Association shall pay the taxes on behalf of any Owner who does not pay the Owner's share. The Association shall add to the Annual Assessment of a delinquent Owner the amount of any sum advanced, plus interest at the rate often percent (10%) per annum and any amount necessary to reimburse the Association for any penalty or late charge actually assessed in connection with the tax bill for a Phase, which late charge results from the failure of the delinquent Owner to make timely payment of the Owner's share of the taxes. Until Close of Escrow for the sale of ninety percent (90%) of the Condominiums in the Community has occurred, this Section may not be amended without the written consent of Declarant. -49-2294-00233\CCRS\1149361.1 617113 ARTICLES DESIGN REVIEW COMMITTEE 5.1 MEMBERS OF COMMITTEE. The Design Review Committee shall be composed of three (3) members. The initial members of the Design Review Committee shall be representatives of Declarant until one ( 1) year after the original issuance of the Public Report for Phase 1 ("First Anniversary''). After the First Anniversary, the Board may appoint and remove one (1) member of the Design Review Committee, and Declarant may, but is not obligated to, appoint and remove a majority of the members of the Design Review Committee and fill any vacancy of such majority, until the earlier to occur of (a) Close of Escrow for the sale of ninety percent (90%) of all the Condominiums in the Community and the Annexable Area, or (b) the fifth (5th) anniversary of the original issuance of the Public Report for Phase 1, after which the Board may appoint and remove all members of the Design Review Committee. Design Review Committee members appointed by the Board must be Owners or agents of Owners, but Design Review Committee members appointed by Declarant need not be Owners or agents of Owners. Members of the Board of Directors may serve as Design Review Committee members. 5.2 POWERS AND DUTIES. 5.2.1 General Powers and Duties. The Design Review Committee shall consider and act upon all plans and specifications submitted for its approval, including inspection of work in progress to assure conformity with plans approved by the Design Review Committee, and shall perform such other duties as the Board assigns to it. 5.2.2 Issuance of Standards. The Design Review Committee shall annually issue and update its Design Guidelines and provide notice of any requirements for Committee approval of proposed Improvements. The notice shall describe the types of proposed Improvements that require Committee approval, and it shall include a copy of the procedure used to review and approve or disapprove such proposed Improvements. The Design Guidelines may require a fee to accompany each application for approval, and may identify additional factors which the Design Review Committee will consider in reviewing submissions. The Design Review Committee may provide that fees it imposes be uniform, or that fees be determined in any other reasonable manner. The Design Review Committee may require such detail in plans and specifications submitted for its review as it deems proper, including landscape plans, floor plans, site plans, drainage plans, elevation drawings and descriptions or samples of exterior materials and colors. 5.2.3 Retaining Consultants. The Design Review Committee has the power, but not the duty, to retain licensed architects, contractors and other professionals to advise its members in connection with decisions. 5.3 REVIEW OF PLANS AND SPECIFICATIONS. 5.3.1 Improvements Requiring Approval. No Owner may construct, install or alter any Improvements in a Condominium which affects the structural integrity of the walls, floors and ceilings of the Condominium or any structural or ornamental component of any Condominium Building without the prior written approval of the Design Review Committee. -50-2294·00233\CCRS\1149361.1 617/13 The Design Review Committee may review the Improvements' impact on (1) the structural integrity of the Condominium Building, (2) the safety of the Owners and the public, (3) the noise heard beyond the Condominium in which the Improvement is located, (4) fire safety, (5) common utilities and (6) the Association Property (collectively, the "Design Factors"'). The Design Review Committee may review the impact the construction, installation, or altering of the Improvement has on the Design Factors, as well as the impact the completed Improvement has on the Design Factors. 5.3.2 Application Procedure. Owners who seek Committee approval shall submit plans and specifications showing the dimensions, exterior elevation, color, materials used and location of the proposed Improvements, along with an initial review fee in an amount set in writing from time to time by the Committee, along with all other deposits and review materials required under this Article (collectively, an "Application"). Until changed by the Board, the address for the submission of the Application is the Association's principal office. The form of Application used by the Design Review Committee may include spaces allowing "Adjacent Owners" to sign or initial the Application confirming that they have been notified of the application. The Design Review Committee may establish a definition of "Adjacent Owners" in its Design Guidelines. Applications will be complete and may be approved or disapproved by the Design Review Committee even if all of the Adjacent Owners do not initial the Applications so long as the Owner submitting plans and specifications (the ''Applicant'') certifies that the Applicant has asked the Adjacent Owners to sign the Applications. The requirement that the Applicant attempt to obtain the signatures of Adjacent Owners is intended only to provide notice of the pending application to the Adjacent Owners. It does not create in the Adjacent Owners any power to approve or disapprove the Application by signing or withholding a signature. Only the Committee may approve or disapprove an Application. The Design Review Committee shall deliver its written approval, disapproval, or request for additional information or materials to the Applicant at the address listed in the Application no later than the date that is forty-five ( 45) calendar days after the date on which the Design Review Committee has received the complete Application (the "Review Deadline''). If, on the Review Deadline, the Committee has failed to deliver to the Applicant its written approval, disapproval, or request for additional information or materials, then the Application shall be deemed approved, and the Manager or a representative of the Board or Committee shall at the request of the Applicant execute a written approval therefor within fifteen ( 15) days after receipt of such request. 5.3.3 Standard for Approval. A decision on a proposed Improvement shall be consistent with California law, made in good faith and may not be unreasonable, arbitrary or capricious. If disapproved, the written decision shall include both an explanation of why the proposed Improvement is disapproved and a description of the procedure for reconsideration by the Board. The Design Review Committee shall approve an Application only if it determines that (a) installation, construction or alterations of the Improvements in the locations proposed will not be detrimental to the appearance of the Community as a whole, (b) the appearance of the proposed Improvements will be in harmony with the existing Improvements and the overall design theme in the Community, (c) installation, construction or alteration of the proposed Improvements will not detract from the beauty, wholesomeness and attractiveness of the Community or the enjoyment of the Community by the Owners, (d) maintenance of the proposed -51-2294-00233\CCRS\1149361.1 617/13 Improvements will not become a burden on the Association, and (e) the proposed Improvements are consistent with the Governing Documents. The Committee's decision on a proposed change may not violate any governing provision of law, including the Fair Employment and Housing Act, or a building code or other applicable law governing land use or public safety. The Committee may consider the impact of views from other Condominiums, reasonable privacy right claims, passage of light and air, beneficial shading and other aesthetic factors in reviewing, approving or disapproving any Application. However, neither the Declarant nor the Association warrants that any views in the Community are protected. No Condominium is guaranteed the existence or unobstructed continuation of any particular view. 5.3.4 Conditions of Approval. The Design Review Committee may condition its approval of an Application for any Improvement on any one (I) or more of the following: (a) The Applicant's delivery to the Association of security acceptable to the Association against any mechanic's lien or other encumbrance which may be Recorded against the Association Property or another Owner's Condominium as a result of such work; (b) The Applicant's delivery to the Association of the review fee described in Section 5.3.2 above; (c) Such changes to the Application as the Design Review Committee considers appropriate; (d) The Applicant's agreement to grant to the Association or other Owners such easements as are made reasonably necessary by the existence of the Improvement; (e) The Applicant's agreement to install water, gas, electrical or other utility meters to measure any increased utility consumption; (f) The Applicant's agreement to reimburse the Association for the cost of maintaining the Improvement (should the Association agree to accept maintenance responsibility for the Improvement as built); (g) The Applicant's agreement to complete the proposed work within a stated period of time; (h) If required by the Committee, the Applicant's deposit of adequate funds with the Association to repair or restore any Association Property that may be damaged by the Applicant or the Applicant's contractors. The Design Review Committee will determine the actual amount of the deposit in each case, but the amount shall be at least enough to cover the cost of repairing or restoring damage that is reasonably foreseeable to the Design Review Committee. The deposit shall be refundable to the extent the Design Review Committee finds that the work of Improvement is complete, and that the Association Property was not damaged or was restored at least to its condition when the work began; -52-2294-00233\CCRS\1149361.1 617113 (i) If required by the Committee, the submission of additional plans and specifications or other information before approving or disapproving the Application. 5.3.5 Governmental Approvals. The Applicant shall meet the requirements of all applicable ordinances, codes and regulations of the City and County, including zoning laws, building and safety codes, fire codes and applicable inspection and permit requirements before making any construction, installation or alterations permitted under this Declaration. All approvals issued by the Committee are in addition to, and not in lieu of, applicable governmental approvals, which the Applicant must also obtain at his sole cost, prior to or concurrently with Committee approvals, and before commencing any work. Furthermore, governmental approvals are in addition to, and not in lieu of, Committee approvals required under the Governing Documents. No determination by any governmental agency that the Applicant has met applicable governmental requirements for a particular Improvement shall relieve the Applicant of its obligation to obtain all required Committee approvals required under this Article and the Governing Documents. 5.3.6 Matters Outside Scope of Approval. The Design Review Committee's approval or disapproval of each Application shall be based solely on the aesthetic considerations listed in this Article. Approval of any Application does not constitute a finding or a warranty by the Design Review Committee that the work of Improvement described in the Application or any portion of the Application (a) incorporates good engineering practices, (b) complies with applicable law, ordinance, code, or regulation, including zoning laws, building and safety codes or fire codes, (c) complies with the requirements of any utility provider, or (d) is permissible under the terms of any easement, license, permit, Mortgage, deed of trust, or other recorded or unrecorded instrument (other than the Governing Documents) that affects the land. Nothing in this Declaration shall be construed to require Design Committee approval of any construction, reconstruction, installation, removal or alteration of an Improvement by Declarant or by the Association. 5.3.7 Exculpation of Committee. By submitting an Application, each Applicant is deemed to agree that neither the Design Review Committee, nor the members thereof, nor Declarant, nor their respective agents, employees, attorneys or consultants shall be liable to any Person for: (a) Any matter outside the Committee's scope of approval as discussed in Section 5.3.6 above; (b) Any defect in any Improvement constructed by or on behalf of the Applicant pursuant to an approved Application; (c) Any loss, damage, or injury to Persons or property arising out of or in any way connected with work performed by or on behalf of the Applicant pursuant to an approved Application; or (d) Any loss, damage, or injury to Persons or property arising out of or in any way connected with the performance of the Design Review Committee's duties hereunder, unless due to willful misconduct or gross negligence. -53-2294.00233\CCRS\1149361.1 617/13 5.4 MEETINGS AND ACTIONS OF THE DESIGN REVIEW COMMITTEE. The Design Review Committee shall meet as necessary to perform its duties. As long as a majority of the members of the Design Review Committee are Declarant representatives, the Design Review Committee may, by resolution unanimously adopted in writing, designate an Owner or a Declarant representative to serve as a Design Review Committee Representative to take any action or perform any duties for and on behalf of the Design Review Committee except the granting of variances. The Design Review Committee Representative need not be a current member of the Design Review Committee. In the absence of such designation, the vote or written consent of a majority of the Design Review Committee constitutes an act of the Design Review Committee. All approvals issued by the Design Review Committee must be in writing. Verbal approvals issued by the Design Review Committee, any individual Design Review Committee member or any other representative of the Association are not valid, are not binding on the Association and may not be relied on by any Person. If within six ( 6) months after issuance of the approval, an Owner either does not begin work pursuant to approved plans or obtain an extension of time to begin work, the approval shall be automatically revoked and a new approval must be obtained before work can begin. 5.5 NO WAIVER OF FUTURE APPROVALS. The Design Review Committee's approval of any proposals, plans and specifications or drawings for any work done or proposed in connection with any matter requiring the Design Review Committee's approval does not waive the right to withhold approval of any similar proposals, plans and specifications, drawings or matters subsequently or additionally submitted for approval. 5.6 COMPENSATION OF MEMBERS. The Design Review Committee's members shall receive no compensation for services rendered, other than reimbursement for expenses incurred by them in performing their duties. 5.7 INSPECTION OF WORK. The Design Review Committee or its duly authorized representative may inspect any work for which approval of plans is required under this Article ("Work''). The right to inspect includes the right to require any Owner to take such action as may be necessary to remedy (including removal of) any noncompliance with the Design Review Committee-approved plans for the Work or with the requirements of this Declaration ("Noncompliance''). 5.7.1 Time Limit for Inspections. When the Work is complete, the Applicant shall immediately provide the Committee with written notice of completion on the form prescribed by the Committee. The Design Review Committee's right to inspect the Work and notify the responsible Owner of any Noncompliance shall terminate on the date that is sixty ( 60) calendar days after the date on which the Committee has received written notice from the Applicant on a form provided by the Committee that the Work is complete. If the Design Review Committee fails to send a written notice of Noncompliance to an Applicant before this time limit expires, the Work shall be deemed to comply with the approved Application. 5. 7.2 Noncompliance. If an Improvement that requires the prior approval of the Design Review Committee is (a) commenced or completed without prior written approval by the Committee, (b) is not completed within the time limit established by the Committee in its approval, or (c) is not completed in substantial conformity with the approved Application, or -54-2294-00233\CCRS\1149361.1 6/7/13 (d) if no time limit is established by the Committee, the Applicant fails to complete the Work within one (I) year after the date on which the Application was approved, then a Noncompliance is deemed to exist, and then the Committee has the right, but not the obligation, to deliver a written notice of Noncompliance to the violating Owner, and the Association may, but is not required to, pursue the remedies set forth in this Section. 5.7.3 Remedy for Noncompliance. The Committee shall notifY the Board in writing when an Owner fails to remedy any Noncompliance within sixty (60) days after the date of the notice of Noncompliance. After Notice and Hearing, the Board shall determine whether there is Noncompliance and, if so, the nature thereof and the estimated cost of correcting or removing the same. If a Noncompliance exists, the Owner shall remedy or remove the same within a period of not more than forty-five ( 45) days after the date that notice of the Board ruling is given to the Owner. If the Owner does not comply with the Board ruling within that period, the Association may record a Notice of Noncompliance (if allowed by law), correct the Noncompliance and charge the Owner for the Association's costs, or commence an action for damages or injunctive relief, as appropriate, to remedy the Noncompliance. 5.8 VARIANCES. The Design Review Committee may authorize variances from compliance with any of the architectural provisions of this Declaration or the Design Guidelines including restrictions on height, size, floor area or placement of structures, or similar restrictions, when circumstances such as topography, natural obstructions, hardship, aesthetic or environmental considerations require. Variances must be evidenced in writing, must be signed by a majority of the Committee, and become effective on Recordation. After Declarant's right to appoint a majority of the Design Review Committee's members ends, the Board must approve any variance recommended by the Design Review Committee before any such variance becomes effective. If variances are granted, no violation of this Declaration shall be deemed to have occurred concerning the matter for which the variances were granted. The granting of a variance does not waive any of the provisions of this Declaration for any purpose except as to the particular property and particular provision of this Declaration covered by the variance, nor does it affect the Owner's obligation to comply with all laws affecting the use of that Owner's Condominium. The Committee's written variance shall be Recorded against the Applicant's Condominium in the Official Records. The cost of Recording the variance shall be borne solely by the Applicant. No variance shall conflict with local ordinances or any specific plan for the Community without the prior written approval of the City. 5.9 PRE-APPROVALS. The Design Review Committee may authorize pre- approval of specified types of construction activities if, in the exercise of the Design Review Committee's judgment, a pre-approval is appropriate to carry out the purposes of the Governing Documents. 5.10 APPEALS. If a proposed Improvement is disapproved, the Applicant is entitled to reconsideration by the Board of Directors at an open meeting that satisfies the requirements of California Civil Code Section 1363.05. This paragraph does not require reconsideration of a decision that is made by the Board, or the Design Review Committee if the Committee has the same membership as the Board. -55-2294-00233\CCRS\1149361.1 617/13 ARTICLE6 PROPERTY EASEMENTS AND RIGHTS 6.1 EASEMENTS. 6.1.1 Maintenance and Repair. Declarant reserves for the benefit of the Association and all Association agents, officers and employees, nonexclusive easements over the Community as necessary to fulfill the obligations and perform the duties of the Association. 6.1.2 Utility Easements. Declarant reserves easements to install and maintain utilities over the Association Property for the benefit of the Owners and their Condominiums. Declarant reserves the right to grant additional easements and rights-of-way throughout the Community to utility companies and public agencies as it deems necessary for the proper development and disposal of the Community. Such right of Declarant shall expire on the Close of Escrow for the sale of the last Condominium in the Community and the Annexable Area, 6.1.3 Encroachments. Declarant reserves, for its benefit and for the benefit of all Owners and their Condominiums, a reciprocal easement appurtenant to each Condominium over the other Condominiums and the Association Property to accommodate (a) any existing encroachment of any wall or any other Improvement installed by Declarant or approved by the Design Review Committee, and (b) shifting, movement or natural settling of the Condominium Buildings or other Improvements. 6.1.4 Easements for Public Service Use. Declarant reserves easements over the Community for public services of the local government agencies, including but not limited to, the right of law enforcement and fire protection personnel to enter upon the Community to carry out their official duties. 6.1.5 Easements for Water and Utility Purposes. Declarant reserves easements over the Community for public and private utility purposes, including but not limited to, the right of any public utility or mutual water district of ingress and egress over the Community to read and maintain meters, and use and maintain fire hydrants. 6.1.6 Completion of Improvements. Declarant reserves the right and easement to enter the Community to complete any Improvement which Declarant considers desirable to implement Declarant's development plan. 6.1.7 Owners' Easements in Association Property. Declarant reserves, for the benefit of every Owner, and each Owner's Family, tenants and invitees, nonexclusive easements for pedestrian and vehicular access (all as applicable) over the Association Property in the Community as reasonably necessary for the use and enjoyment of each Condominium in the Community. This easement is appurtenant to and passes with title to every Condominium in the Community, but is to be exercised subject to the rights, restrictions, covenants and easements in the Governing Documents and the Association's right to reasonably restrict access to rooftops, maintenance facilities and other areas of the Association Property that are designated by the Board. -56-2294·00233\CCRS\1149361.1 617/13 6.1.8 Access Easements. (a) Reserved for Declarant and the Annexable Area. Declarant reserves for its benefit and for the benefit of the owners of Condominiums located in the Annexable Area (whether annexed to the Community or not) easements for pedestrian and vehicular access, including construction access, over all private drives and sidewalks located within the Community. (b) Reserved for Models. Declarant reserves for its benefit easements for pedestrian and vehicular ingress and egress over the private drives and through any entry gates serving the Community during business hours, seven (7) days per week, for access to those Condominiums within the Community which are used by Declarant, or its assignee, for models or sales offices, as permitted by the City. Declarant shall have the right to assign this easement, by written assignment, to any successor in interest. This easement shall terminate when the use of such Condominiums by Declarant or its assignee, for models or sales office purposes, has been permanently terminated. 6.1.9 Exclusive Use Areas. Declarant reserves for the benefit of specified Owners exclusive easements over the Association Property for use and enjoyment of Exclusive Use Areas as defined in this Declaration. The foregoing easements shall be conveyed by Recorded deed, and the easements so conveyed shall be appurtenant to and run with the Owner's Unit, subject to the right of the Association and its representatives to enter the Exclusive Use Areas to carry out Association maintenance and other obligations as further described in the Governing Documents. 6.1.10 Telecommunications Easement. Declarant reserves blanket easements (collectively, "Telecommunications Easements'') over the Community for access and for purposes of constructing, installing, locating, altering, operating, maintaining, inspecting, upgrading, removing and enhancing Telecommunications Facilities (collectively, "Telecoltlmunications Purposes'') for the benefit of Declarant. Such easements are freely transferable by Declarant to any other Person and their successors and assigns. No one, except for Declarant and Declarant's transferees, may use the Community for Telecommunications Purposes. All Telecommunications Facilities shall be owned, leased or licensed by Declarant, as determined by Declarant, in its sole discretion and business judgment. Transfer of the Community does not imply transfer of any Telecommunications Easements or Telecommunications Facilities. The holders of the Telecommunications Easements may not exercise the rights reserved hereunder in any manner which will unreasonably interfere with the reasonable use and enjoyment of the Community by any Owner. If the exercise of any Telecommunications Easement results in damage to the Community, then the easement holder who caused the damage shall, within a reasonable period of time, repair such damage. If Declarant has not conveyed the Telecommunications Easements in a Phase to another Person before the last Close of Escrow in the Community and the Annexable Area, then Declarant grants the Telecommunications Easements to the Association effective as of the last Close of Escrow in the Community and the Annexable Area. -57-2294-00233\CCRS\1149361.1 617/13 6.2 ADDITIONAL EASEMENTS. Declarant reserves easements over the Association Property owned in fee simple by the Association for the exclusive use by an Owner or Owners of contiguous property as a yard, recreational, gardening, and landscaping area. Subject to Section 4.2.3, any such easement may be conveyed by the Declarant before the last Close of Escrow for sale of a Condominium in the Community and the Annexable Area. Such conveyance must be approved by the Board, which approval must not be unreasonably withheld. The purpose of the easement, the portion of the Association Property affected, the Condominium to which the easement is appurtenant, and any restrictions on use of the easement area shall be identified in a Recorded grant of easement. 6.3 DELEGATION OF USE. Any Owner may delegate the Owner's right to use the Association Property in writing to the Owner's tenants, contract purchasers or subtenants who reside in such Owner's Unit, subject to regulation by the Board. An Owner who has delegated this right may not use the recreational facilities on the Association Property so long as such delegation remains in effect. 6.4 RIGHT OF ENTRY. 6.4.1 Association. The Association has the right to enter the Exclusive Use Areas and the Units to inspect and maintain the Association Property and any other Association- maintained Improvements, and take whatever corrective action it determines to be necessary or proper. Entry onto any Exclusive Use Areas and Unit under this Subsection may be made after at least three (3) days' advance written notice to the Owner of the Condominium except for emergency situations, which shall not require notice. For purposes hereof, an "emergency situation" is a situation in which there is an imminent threat of injury to persons or damage to property, as determined by the Board in the exercise of its sound business judgment. Any damage to a Unit or Exclusive Use Area that is caused by entry under this Subsection shall be repaired by the Association. 6.4.2 Declarant. The Declarant has the right to enter the Condominiums and the Association Property (a) to comply with requirements for the recordation of subdivision maps or lot line adjustments in the Community, (b) for repair of Improvements in accordance with the provisions of the Right to Repair Law, (c) to accommodate grading or construction activities, and (d) to comply with requirements of applicable govermnental agencies. Declarant shall provide the applicable Owner reasonable notice before such entry, except for emergency situations, which shall not require notice. For purposes hereof, an "emergency situation" is a situation in which there is an imminent threat of injury to persons or damage to property, as determined by the Declarant. Any damage to the Community that is caused by entry under this Subsection shall be repaired by the Declarant. Unless otherwise specified in the applicable initial grant deed by which Declarant has transferred ownership of the subject Condominium or subject Association Property, this right of entry shall automatically expire on the later of the date that is twelve (12) years after (a) the date this Declaration is Recorded, or (b) the date the grant deed is Recorded by which Declarant first conveyed fee title to the subject real property under authority of a Public Report. -58-2294.00233\CCRS\1149361.1 6/7/13 6.4.3 Owners. Each Owner shall permit other Owners, and their representatives, to enter that Owner's Exclusive Use Area and Condominium to perform installations, alterations or repairs to the mechanical or electrical services to a Condominium if (a) requests for entry are made in advance, (b) entry is made at a time reasonably convenient to the Owner whose Exclusive Use Area or Condominium is to be entered, and (c) the entered Exclusive Use Area or Condominium is left in substantially the same condition as existed immediately preceding such entry. Any damage to the Exclusive Use Area or Condominium caused by entry under this Subsection shall be repaired by the entering Owner. ARTICLE? ASSOCIATION MAINTENANCE FUNDS AND ASSESSMENTS 7.1 PERSONAL OBLIGATION TO PAY ASSESSMENTS. Each Owner shall pay to the Association all Assessments established and collected pursuant to this Declaration. The Association shall not levy or collect any Assessment that exceeds the amount necessary for the purpose for which it is levied. All Assessments, together with late payment penalties, interest, costs, and reasonable attorney fees for the collection thereof, are a charge and a continuing lien on the Condominium against which such Assessment is made. Each Assessment, together with late payment penalties, interest, costs and reasonable attorney fees, is also the personal obligation of the Person who was the Owner of the Condominium when the Assessment accrued. The personal obligation for delinquent Assessments may not pass to any new Owner ("Purchaser") unless expressly assumed by the Purchaser or unless the Purchaser has actual or constructive knowledge of such delinquent Assessments, whether by virtue of the Recordation of a Notice of Delinquent Assessment or receipt from the Association of a certificate pursuant to California Civil Code Section 1368(a)(4). 7.2 ASSOCIATION MAINTENANCE FUNDS. The Association shall establish no fewer than two (2) separate Association Maintenance Fund accounts into which shall be deposited all money paid to the Association and from which disbursements shall be made, as provided in this Declaration. The Association Maintenance Funds may be established as trust accounts at a banking or savings institution and shall include: (a) an Operating Fund for current Common Expenses, (b) an adequate Reserve Fund for the portion of Common Expenses allocated to (I) reserves for Improvements which the Board does not expect to repair or replace on an annual or more frequent basis, and (2) payment of deductibles under the Association's insurance policies, and (c) any other funds which the Association may elect to establish. 7.3 PURPOSE OF ASSESSMENTS. The Assessments shall be used exclusively to (a) promote the Owners' recreation and welfare, (b) operate, improve and maintain the Association Property, and (c) discharge any other Association obligations under this Declaration. All amounts deposited into the Association Maintenance Funds must be used solely for the common benefit of all Owners for purposes authorized by this Declaration. Disbursements from the Operating Fund generally shall be made by the Association to discharge Association responsibilities which cannot be discharged by disbursements from the Reserve Fund. However, if the Board determines that the Operating Fund contains excess funds, the Board may transfer the excess funds to any other Association Maintenance Fund. Disbursements from the Reserve Fund shall be made by the Association only for the purposes specified in this Article and in California Civil Code Section 1365.5(c). -59-2294-00233\CCRS\1149361.1 617/13 7.4 WAIVER OF USE. No Owner may be exempt from personal liability for Assessments duly levied by the Association, nor release such Owner's Condominium from the liens and charges thereof, by waiving use and enjoyment of the Association Property or by abandoning such Owner's Condominium. 7.5 LIMITS ON ANNUAL ASSESSMENT INCREASES. The following shall apply to the general component of Annual Assessments: 7.5.1 Maximum Authorized Annual Assessment For Initial Year of Operations. During the Fiscal Year in which Annual Assessments commence, the Board may levy an Annual Assessment per Condominium in an amount which exceeds one hundred twenty percent (120%) of the amount of Annual Assessments disclosed for the Community in the most current Budget filed with and approved by the DRE only if the Board first obtains the approval of Owners casting a majority of votes at a meeting or election of the Association in which more than fifty percent (SO%) of the Condominiums are represented ("Increase Election''). This Section does not limit Annual Assessment increases necessary for addressing an "Emergency Situation" as defined in Section 7.5.5. 7.5.2 Maximum Authorized Annual Assessment For Subsequent Fiscal Years. During the Fiscal Years following the Fiscal Year in which Annual Assessments commence, the Board may levy Annual Assessments which exceed the Annual Assessments for the immediately preceding Fiscal Year only as follows: (a) If the increase in Annual Assessments is less than or equal to twenty percent (20%) of the Annual Assessments for the immediately preceding Fiscal Year, then the Board must either (I) have distributed the Budget for the current Fiscal Year in accordance with California Civil Code Section 1365(a), or (2) obtain the approval of Owners casting a majority of votes in an Increase Election; or (b) If the increase in Annual Assessments is greater than twenty percent (20%) of the Annual Assessments for the immediately preceding Fiscal Year, then the Board must obtain the approval of Owners casting a majority of votes in an Increase Election. This Section does not limit Annual Assessment increases necessary for addressing an "Emergency Situation" as defined in Section 7.5 .5. 7.5.3 Supplemental Annual Assessments. If the Board determines that the Association's essential functions may be properly funded by an Annual Assessment in an amount less than the maximum authorized Annual Assessment described above, it may levy such lesser Annual Assessment. If the Board determines that the estimate of total charges for the current year is or will become inadequate to meet all Common Expenses, it shall immediately determine the approximate amount of the inadequacy. Subject to the limits described in Sections 7.5.1, 7.5.2 and 7.5.5, the Board may levy a supplemental Annual Assessment reflecting a revision of the total charges to be assessed against each Condominium. 7.5.4 Automatic Assessment Increases. Despite any other provisions of this Section 7.5, on Declarant's annexation of the Annexable Area pursuant to Article 16, the Annual Assessment shall be automatically increased by the additional amount, if any, necessary -60-2294-00233\CCRS\1149361.1 6/7/13 to maintain the Association Property identified in the Notice of Addition as a part of the Phase that includes the Annexable Area as long as (a) the annexation is permitted by the ORE, and (b) the amount of such increase does not result in the levy of an Annual Assessment which is greater than the maximum potential Annual Assessment disclosed in all Public Reports for the Community. 7.5.5 Emergency Situations. For purposes of Sections 7.5.1, 7.5.2 and 7.7, an "Emergency Situation" is any one of the following: (a) An extraordinary expense required by an order of a court; (b) An extraordinary expense necessary to maintain the portion of the Community for which the Association is responsible where a threat to personal safety on the Community is discovered; and (c) An extraordinary expense necessary to maintain the portion of the Community for which the Association is responsible that could not have been reasonably foreseen by the Board when preparing the Budget. Before imposing or collecting an Assessment pursuant to this Subsection (c), the Board shall adopt a resolution containing written findings regarding the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process. The resolution shall be distributed to the Owners with the notice of the assessment. 7.6 ANNUAL ASSESSMENTS. 7.6.1 Commencement of Annual Assessments. Except as provided below, Annual Assessments shall commence on all Condominiums in a Phase on the first day of the first calendar month following the first Close of Escrow in such Phase. 7.6.2 Assessment and Proration. Annual Assessments for fractions of a month shall be prorated. Declarant shall pay its full pro rata share of the Annual Assessments on all unsold Condominiums for which Annual Assessments have commenced. The Board shall fix the amount of the Annual Assessment against each Condominium at least thirty (30) days in advance of each Annual Assessment period. However, unless otherwise established by the Board, the initial Annual Assessments shall be assessed in accordance with the most recent Budget on file with and approved by the ORE. Written notice of any change in the amount of any Annual Assessment, Capital Improvement Assessment or Reconstruction Assessment shall be sent by first-class mail to every Owner subject thereto not less than thirty (30) nor more than sixty ( 60) days before the increased Assessment becomes due. 7.6.3 Apportionment of Annual Assessments. All Annual Assessments shall be assessed uniformly and equally against the Owners and their Condominiums based on the number of Condominiums owned by each Owner **[except that portion of Annual Assessments attributable to those Common Expenses described on Exhibit G shall be variably assessed against the Owners and their Condominiums in proportion to the base interior square footage of Condominium Unit types, also described on Exhibit G)**. The Board may determine that funds in the Operating Fund at the end of the Fiscal Year be retained and used to reduce the following Fiscal Year's Annual Assessments. On dissolution of the Association incident to the -61-2294-00233\CCRS\1149361.1 617/13 abandonment or termination of the Community as a condominium project, any amounts remaining in any of the Association Maintenance Funds shall be distributed to or for the benefit of the Owners in the same proportions as such money was collected from the Owners. 7.6.4 Payment of Annual Assessments. Each Owner shall pay Annual Assessments in installments at such frequency, in such amounts and by such methods as are established by the Board. If the Association incurs additional expenses because of a payment method selected by an Owner, the Association shall charge the additional expenses to the Owner. Each installment of Annual Assessments may be paid to the Association in one (I) check or in separate checks as payments attributable to specified Association Maintenance Funds. If any payment of an Annual Assessment installment (a) is less than the amount assessed and (b) does not specify the Association Maintenance Fund or Funds into which it should be deposited, then the amount received shall be credited in order of priority first to the Operating Fund, until that portion of the Annual Assessment has been satisfied, and second to the Reserve Fund. 7.7 CAPITAL IMPROVEMENT ASSESSMENTS. The Board may levy, in any Fiscal Year, a Capital Improvement Assessment or Reconstruction Assessment to defray, in whole or in part, the cost of any construction, repair or replacement of a capital Improvement or such other addition to the Association Property. No Capital Improvement Assessments in any Fiscal Year which, if added to the Capital Improvement Assessments already levied during such Fiscal Year, exceed five percent (5%) of the Association's Budgeted gross expenses for such Fiscal Year, may be levied without the vote or written consent of Owners casting a majority of votes at an Increase Election. The Board may levy, in any Fiscal Year, a Capital Improvement Assessment applicable to that Fiscal Year which exceeds five percent (5%) of the Association's Budgeted gross expenses for such Fiscal Year if such increase is necessary for addressing an Emergency Situation as defined in Section 7.5.5. ARTICLES INSURANCE 8.1 DUTY TO OBTAIN INSURANCE; TYPES. The Association shall obtain and keep in effect at all times the following insurance coverages: 8.1.1 Commercial General Liability. A policy of commercial general liability insurance (including coverage for medical payments), insuring the Association and the Owners against liability for bodily injury, death and property damage arising from or relating to the ownership or use of the Association Property. Such policy shall specify amounts and include protection from liability and risks as are customarily covered in similar condominium developments in the area of the Community, and shall include a severability of interest endorsement or the equivalent which shall preclude the insurer from denying the claim of an Owner because of negligent acts or omissions of other Owners, or the Association or the Association's officers and directors acting in their capacity as officers and directors. The Association's policies shall at all times specify limits no less than the minimum amounts required by California Civil Code Sections 1365.7 and 1365.9. -62-2294-00233\CCRS\1149361.1 617/13 8.1.2 Fire and Casualty Insurance. A "master" or "blanket" policy of fire and casualty insurance with extended coverage, special form, without deduction for depreciation, in an amount as near as possible to the full replacement value of all insurable Improvements on the Association Property including fixtures, to the extent they are part of the Association Property, Condominium Building service equipment and supplies, and other common personal property belonging to the Association. The policy amount shall be at least equal to such coverage as is commonly required by prudent institutional mortgage investors in the area in which the Community is located. The casualty insurance shall not include earthquake coverage unless the Board is directed to obtain earthquake coverage by a majority of the Association's voting power. 8.1.3 Fidelity Insurance. Fidelity insurance coverage, naming the Association as insured, for any Person handling funds of the Association, including Association officers, directors, employees, volunteers, and agents, and the Manager and its employees, whether or not such Persons are compensated for their services, in an amount not less than the estimated maximum of funds, including reserve funds, in the custody of the Person during the term of the insurance. However, the aggregate amount of the fidelity insurance coverage may not be less than the sum equal to three (3) months of Annual Assessments on all Condominiums in the Community, plus reserve funds. The insurance policies or bonds shall provide that they may not be cancelled or substantially modified (including cancellation for non-payment of premium) without at least ten (I 0) days' prior written notice to the Association. 8.1.4 Requirements of Fannie Mae, Ginnie Mae, Freddie Mac and FHFA. Notwithstanding anything in the Governing Documents to the contrary, the amount, term and coverage of any policy of insurance required under this Article 8 (including the endorsements, the amount of the deductible, the named insureds, the loss payees, standard mortgage clauses, notices of changes or cancellations, and the insurance company rating) shall also satisfy the minimum requirements established for this type of development (if applicable) by Fannie Mae, Ginnie Mae, Freddie Mac and FHFA, and any successor to those entities, so long as any of those entities is a Mortgagee or Owner of a Condominium in the Community, except to the extent such coverage is not reasonably available or has been waived in writing by the entity requiring the insurance coverage. If the above entities have not established requirements on any policy required hereunder, the term, amount and coverage of such policy shall, subject to Section 8.1.1 above, be no less than that which is customary for similar policies on similar projects in the area of the Community. 8.1.5 Other Insurance. Such other insurance insuring other risks customarily insured by associations managing condominium projects similar in construction, location and use. Such additional insurance may include general liability insurance and director's and officer's errors and omissions insurance in the minimum amounts established in California Civil Code Section 1365.9. 8.1.6 Beneficiaries. The Association's insurance shall be kept for the benefit of the Association, the Owners and the Mortgagees, as their interests may appear as named insureds, subject, however, to loss payment requirements established in this Declaration. -63-2294·00233\CCRS\1149361.1 6/7/13 8.2 WAIVER OF CLAIM AGAINST ASSOCIATION. All policies of insurance kept by or for the benefit of the Association and the Owners must provide that the Association and the Owners waive and release all claims against one another, the Board and Declarant, to the extent of the insurance proceeds available, whether or not the insurable damage or injury is caused by the negligence or breach of any agreement by any of the Persons. 8.3 RIGHT AND DUTY OF OWNERS TO INSURE. Each Owner is responsible for insuring the Owner's personal property and all other property and Improvements in the Owner's Condominium. Each Owner shall obtain and keep in effect at all times a policy of insurance on form H0-6 or equivalent in at least the minimum amounts specified by Fannie Mae. Nothing in this Declaration precludes any Owner from carrying any public liability insurance he considers desirable; however, Owners' policies may not adversely affect or diminish any coverage under any of the Association's insurance policies. Duplicate copies of Owners' insurance policies shall be deposited with the Association on request. If any loss intended to be covered by the Association's insurance occurs and the proceeds payable are reduced due to insurance carried by any Owner, such Owner shall assign the proceeds of the Owner's insurance to the Association, to the extent of such reduction, for application to the same purposes as the reduced proceeds are to be applied. 8.4 NOTICE OF EXPIRATION REQUIREMENTS. If available, each of the Association's insurance policies must contain a provision that the policy may not be canceled, terminated, materially modified or allowed to expire by its terms, without at least ten (1 0) days' prior written notice to the Board and Declarant, and to each Owner and Mortgagee, insurer and guarantor of a First Mortgage who has filed a written request with the carrier for such notice and every other Person in interest who requests such notice of the insurer. In addition, fidelity insurance shall provide that it may not be canceled or substantially modified without at least ten (10) days' prior written notice to any insurance trustee named pursuant to Section 8.5 and to each Fannie Mae servicer who has filed a written request with the carrier for such notice. 8.5 TRUSTEE FOR POLICIES. The Association is trustee of the interests of all named insureds under the Association's insurance policies. Unless an insurance policy provides for a different procedure for filing claims, all claims must be sent to the insurance carrier or agent by certified mail and be clearly identified as a claim. The Association shall keep a record of all claims made. All insurance proceeds under any Association insurance policies must be paid to the Board as trustees. The Board has the exclusive authority to negotiate loss settlements with insurance carriers, with participation, to the extent the Board desires, of First Mortgagees who have filed written requests within ten (1 0) days of receipt of notice of any damage or destruction as provided in Section 9.4. The Board is authorized to make a settlement with any insurer for less than full coverage for any damage, so long as the Board acts in accordance with the standard of care established in this Declaration. Any two (2) officers of the Association may sign a loss claim form and release form in connection with the settlement of a loss claim, and such signatures are binding on all the named insureds. A representative chosen by the Board may be named as an insured, including a trustee with whom the Association may enter into an insurance trust agreement and any successor to such trustee, who shall have exclusive authority to negotiate losses under any insurance policy and to perform such other functions necessary to accomplish this purpose. -64-2294-{)02331CCRS\ll4936l.l 617/!3 8.6 ACTIONS AS TRUSTEE. Except as otherwise specifically provided in this Declaration, the Board has the exclusive right to bind the Association and the Owners to all matters affecting insurance carried by the Association, the settlement of a loss claim, and the surrender, cancellation and modification of all such insurance. Duplicate originals or certificates of all policies of fire and casualty insurance kept by the Association and of all renewals thereof, together with proof of payment of premiums, shall be delivered by the Association to all Owners and Mortgagees who requested them in writing. 8.7 ANNUAL INSURANCE REVIEW. The Board shall review the Association's insurance policies at least annually to determine the amount of the casualty and fire insurance referred to in Section 8.1. If economically feasible, the Board shall obtain a current appraisal of the full replacement value of the Improvements in the Association Property except foundations and footings, without deduction for depreciation, from a qualified independent insurance appraiser, before each such annual review. 8.8 REQUIRED WAIVER. All of the Association's insurance policies insuring against physical damage must provide, if reasonably possible, for waiver of: 8.8.1 Subrogation of claims against the Owners and tenants of the Owners; 8.8.2 Any defense based on coinsurance; 8.8.3 Any right of setoff, counterclaim, apportionment, proration or contribution due to other insurance not carried by the Association; 8.8.4 Any invalidity, other adverse effect or defense due to any breach of warranty or condition caused by the Association, any Owner or any tenant of any Owner, or arising from any act or omission of any named insured or the respective agents, contractors and employees of any insured; 8.8.5 Any right of the insurer to repair, rebuild or replace, and, if the Improvement is not repaired, rebuilt or replaced following loss, any right to pay under the insurance an amount less than the replacement value of the Improvements insured; 8.8.6 Notice of the assignment of any Owner of the Owner's interest in the insurance by virtue of a conveyance of any Condominium; 8.8. 7 Any right to require any assignment of any Mortgage to the insurer; 8.8.8 Any denial of an Owner's claim because of negligence or willful acts by the Association or other Owners; and 8.8.9 Prejudice of the insurance by any acts or omissions of Owners that are not under the Association's control. -65-2294-00233\CCRS\1149361.1 617/13 ARTICLE9 DESTRUCTION OF IMPROVEMENTS 9.1 RESTORATION OF THE COMMUNITY. Except as otherwise authorized by the Owners, if any portion of the Community which the Association is responsible for maintaining is destroyed, the Association shall restore the same to its former condition as promptly as practical and in accordance with applicable law and City approvals, including plan checks, permits and fee payments. The Association shall use the proceeds of its insurance for reconstruction or repair of the Community unless otherwise authorized in this Declaration or by the Owners. The Board shall commence such reconstruction promptly. The Community shall be reconstructed or rebuilt substantially in accordance with the original construction plans if they are available, unless changes recommended by the Design Review Committee have been approved by at least a majority of the Owners. If the insurance proceeds amount to at least ninety percent (90%) of the estimated cost of restoration and repair, the Board shall levy a Reconstruction Assessment to provide the additional funds necessary for such reconstruction. If the insurance proceeds amount to less than ninety percent (90%) of the estimated cost of restoration and repair, the Board may levy a Reconstruction Assessment and proceed with the restoration and repair only if both of the following conditions ("Conditions To Reconstruction") have been satisfied: (a) the levy of a Reconstruction Assessment to pay the costs of restoration and repair of the Community is approved by the Owners, and (b) within one (I) year after the date on which the destruction occurred, the Board Records a certificate of the resolution authorizing the restoration and repair ("Reconstruction Certificate"). If either of the Conditions to Reconstruction does not occur after a destruction for which insurance proceeds available for restoration and repair are less than ninety percent (90%) of the estimated cost of restoration and repair, then the Board shall proceed as provided in Section 9 .2. 9.2 SALE OF COMMUNITY AND RIGHT TO PARTITION. No Owner shall have the right to partition of the Owner's interest in the Condominium and there shall be no judicial partition of the Community, or any part thereof, except as provided in California Civil Code Section 1359(b). For purposes of Subsection 4 of Section 1359(b), partition may occur only if all of the following conditions are satisfied: (a) either or both of the Conditions to Reconstruction described in Section 9 .I have failed to occur; (b) within six ( 6) months after the date on which destruction occurred, restoration or repair has not actually commenced; and (c) the Owners of at least sixty seven percent (67%) of the Condominiums in the Community and a Mortgagee Majority approve the partition. In such event, the Association shall prepare, execute and Record, as promptly as practical, the certificate stating that a majority of the Board may properly exercise an irrevocable power of attorney to sell the Community for the benefit of the Owners and execute such other documents and instruments as may be necessary for the Association to consummate the sale of the Community at the highest and best price obtainable, either in its damaged condition, or after damaged structures have been razed. Such certificate shall be conclusive evidence of such authority for any Person relying thereon in good faith. The net proceeds of such sale and the proceeds of any insurance carried by the Association shall be divided proportionately among the Owners, such proportions to be determined in accordance with the relative appraised fair market valuation of the Condominiums as of a date immediately before such destruction (or condemnation), expressed as percentages, and computed by dividing such appraised valuation of each Condominium by the total of such appraised valuations of all Condominiums in the Community. The Board is authorized to hire one (I) or more appraisers -66-2294-00233\CCRS\1149361.1 6/7/13 for such purpose and the cost of such appraisals shall be a Common Expense of the Association. However, the balance then due on any valid Mortgage shall be first paid in order of priority before the distribution of any proceeds to an Owner whose Condominium is so encumbered. Nothing in this Declaration prevents partition of a co-tenancy in any Condominium. Except as provided above, each Owner and the successors of each Owner, whether by deed, gift, devise, or by operation of law, for their own benefit and for the Condominiums and for the benefit of all other Owners, specifically waive and abandon all rights, interests and causes of action for a judicial partition of the tenancy in common ownership of the Community and do further covenant that no action for such judicial partition shall be instituted, prosecuted or reduced to judgment. 9.3 INTERIOR DAMAGE. Except for any casualty or damage covered by insurance kept by the Association, restoration and repair of any damage to the interior of any individual Unit, including all fixtures, cabinets and improvements therein, together with restoration and repair of all interior paint, wall coverings and floor coverings, must be made by and at the individual expense of the Owner of the Unit so damaged. If a determination to rebuild the Community after partial or total destruction is made, as provided in this Article, such interior repair and restoration shall be completed as promptly as practical and in a lawful and workmanlike manner, in accordance with plans approved by the Design Review Committee as provided in this Declaration. 9.4 NOTICE TO OWNERS AND FIRST MORTGAGEES. The Board, immediately on having knowledge of any damage or destruction of a Unit or affecting a material portion of the Community, shall promptly notify all Owners and First Mortgagees. ARTICLE 10 EMINENT DOMAIN The term "taking" as used in this Article means inverse condemnation by exercise of the power of eminent domain or by sale under threat of the exercise of the power of eminent domain. The Board shall represent the Owners in any proceedings, negotiations, settlements, or agreements regarding takings. All takings proceeds shall be payable to the Association for the benefit of the Owners and their Mortgagees, and shall be distributed to such Owners and Mortgagees as provided in this Article. 10.1 PROPERTY CONDEMNATION. If (a) there is a taking of an interest in all or part of the Community such that the ownership, operation and use of the Community in accordance with this Declaration is substantially and adversely affected, and (b) within one hundred twenty (120) days after the effective date of the taking the Owners of Units (1) not taken, or (2) only partially taken but capable of being restored to at least ninety-five percent (95%) of their floor area and to substantially their condition before the taking (collectively, the "Remaining Units") do not by affirmative vote of at least one third (113) of their voting power approve the continuation of the Community and the repair, restoration and replacement to the extent feasible of the Association Property and the Remaining Units, then, after obtaining the consent of a Mortgagee Majority, the Board shall proceed with the sale of that portion of the Community which was not taken and distribute the net proceeds of such sale after deducting any incidental fees and expenses, in the same proportion and manner as provided in Section 9.2. -67-2294-00233\CCRS\1149361.1 617/13 10.2 CONDEMNATION OF ASSOCIATION PROPERTY. If there is a taking of the Association Property (other than Exclusive Use Area) or any interest therein, then the award in condemnation shall be paid to the Association and shall be deposited in the Operating Fund. 10.3 CONDEMNATION OF EXCLUSIVE USE AREA. If there is a taking of all or any portion of an Exclusive Use Area, the award in condemnation shall be paid to the Owner of the Condominium to which the taken Exclusive Use Area was appurtenant; however, such award shall first be applied to the balance then due on any Mortgages encumbering such Owner's Condominium, in order of priority. 10.4 CONDEMNATION OF CONDOMINIUMS. If there is a taking of a Condominium, the award in condemnation shall be paid to the Owner of the Condominium; however, such award shall first be applied to the balance then due on any Mortgages encumbering such Owner's Condominium, in order of priority. 10.5 CONDEMNATION OF PORTIONS OF UNITS. 10.5.1 Minor Takings Within Limits. If (a) there is a taking of a portion of one or more Units such that the intended use of the Units as residential dwellings is not substantially and adversely affected, and (b) restoration of such Units can be accomplished at a cost less than or equal to the sum of(1) the amount of the condemnation awards for such takings plus (2) any amounts the Owners of the taken Units wish to contribute to restoration plus (3) an amount less than or equal to five percent ( 5%) of the Budgeted gross expenses of the Association for that Fiscal Year (collectively, the "Allowable Cost'~, then the Board shall contract for such restoration and levy a Reconstruction Assessment in an amount equal to the Allowable Cost minus the amount of the condemnation awards and Owners' contributions, and the condemnation awards, Owners' contributions and Reconstruction Assessment shall be applied to such restoration. If the restoration is accomplished at a cost less than the amount of the condemnation awards, then that portion of the condemnation awards which exceeds the restoration costs shall be paid to the Owners of the partially taken Units in proportion to the decreases in the fair market values of their Condominiums; however, such awards shall first be applied to the balance then due on any Mortgages encumbering such Owners' Condominiums, in order of priority. 10.5.2 Minor Takings Exceeding Limits. If (a) there is a taking of a portion of one or more Units such that the intended use of the Units as residential dwellings is not substantially and adversely affected, and (b) restoration cannot be accomplished at a cost less than or equal to the Allowable Cost, then the Board shall call a special meeting of the Owners. If more than fifty percent (50%) of the voting power of the Association is represented at such special meeting, either in person or by proxy, and a majority of the votes cast at such special meeting are in favor of levying a Reconstruction Assessment in an amount equal to the restoration costs minus the sum of the amount of the condemnation awards and the amounts the Owners of the taken Units wish to contribute to such restoration, then the Board shall contract for such restoration and levy a Reconstruction Assessment, and the condemnation awards, Owners' contributions and Reconstruction Assessment shall be applied to such restoration. -68-2294·00233\CCRS\1149361.1 6/7/13 1 0.5.3 Major Takings. If neither Section 1 0.5.1 nor Section 1 0.5.2 applies to the taking of a Unit, then the award in condemnation shall be paid to the Owners of the taken Units; however, such award shall first be applied to the balance then due on any Mortgages encumbering such Owner's Condominium, in order of priority. The Board shall have the remaining portions of the taken Units razed. The remaining portions of the taken Units and appurtenant Exclusive Use Areas shall become part of the Association Property, and the Owners of such taken Units in any Phase, by acceptance of the award allotted to them in taking proceedings, relinquish (a) to the other Owners in such Phase, on the basis of their relative ownership of the Common Area therein, such Owners' undivided interest in the Common Area, and (b) to the Association, the remaining portions of the Units and the appurtenant Exclusive Use Areas. Each Owner relinquishing the Owner's interest in the Common Area pursuant to this Section shall, at the Board's request and at the Association's expense, execute and acknowledge such deeds and other instruments which the Board considers necessary or convenient to evidence such relinquishment Each Owner of a taken Unit is not liable for Assessments under this Declaration which accrue on or after the date such Owner accepts the Owner's condemnation award. 10.6 PORTIONS OF AWARDS IN CONDEMNATION NOT COMPENSATORY FOR VALUE OF REAL PROPERTY. Those portions of awards in condemnation which do not directly compensate Owners for takings of real property (for example, awards for takings of personal property, relocation expenses, moving expenses, or other allowances of a similar nature intended to facilitate relocation) shall be paid to the Owners whose personal property is taken, or whose relocation is intended to be facilitated. 10.7 NOTICE TO OWNERS AND FIRST MORTGAGEES. The Board, on learning of any taking affecting a Unit or a material portion of the Community, or any threat thereof, shall promptly notify all Owners and First Mortgagees. ARTICLE 11 RIGHTS OF MORTGAGEES 1 L1 GENERAL PROTECTIONS. No amendment or violation of this Declaration defeats or renders invalid the rights of the Mortgagee under any Mortgage encumbering one (1) or more Condominiums made in good faith and for value, provided that after the foreclosure of any such Mortgage, the foreclosed Condominium(s) will remain subject to this Declaration. 1 L2 ADDITIONAL RIGHTS. To induce the Freddie Mac, Ginnie Mae and Fannie Mae to participate in the financing of the sale of Condominiums, the following provisions are added hereto (and to the extent these added provisions conflict with any other provisions of the Governing Documents, these added provisions control): 11.2.1 Right of First Refusal. Any "right of first refusal" created or purported to be created by the Governing Documents shall not apply to nor adversely affect the rights of a First Mortgagee to (a) foreclose or take title to a Condominium pursuant to the remedies in the First Mortgage, or (b) accept a deed or assignment in lieu of foreclosure in the event of default by a Mortgagor, or (c) sell or lease a Condominium acquired by the First Mortgagee through any ofthe remedies described in (a) or (b)_ -69-2294-00233\CCRS\1149361.1 617/13 11.2.2 Required Mortgagee Approvals. A Mortgagee Majority must approve any amendment of any of the Governing Documents which is of a material adverse nature to First Mortgagees, as further described in Section 13.2.1. 11.2.3 Deemed Approval. Each First Mortgagee who receives proper written notices from the Association by certified or registered mail with a return receipt requested of any matter requiring the approval of a Mortgagee Majority is deemed to have approved that matter if that First Mortgagee does not submit a written response within sixty (60) days after the notice is delivered to the First Mortgagee. 11.2.4 Notices. Each Mortgagee, insurer and guarantor of a Mortgage encumbering one (I) or more Condominiums, upon filing a written request for notification with the Board, is entitled to written notification from the Association of: (a) any proposed amendment to the Governing Documents affecting a change in (i) the boundaries of any Unit, (ii) the interest in the Common Area appurtenant to any Unit or the liability for Common Expenses, (iii) the number of Association votes appurtenant to any Unit, or (iv) the purposes to which any Unit or the Association Property are restricted, (b) any proposed termination of the status of the Community as a "condominium project" as defined in California Civil Code Section 1351(f), (c) any condemnation or casualty loss which affects either a material portion of the Community or the Condominium( s) securing the respective First Mortgage, (d) any delinquency of sixty ( 60) days or more in the performance of any obligation under the Governing Documents, including the payment of Assessments or charges owed by the Owner(s) of the Condominium(s) securing the Mortgage, which notice each Owner hereby consents to and authorizes, (e) a lapse, cancellation, or material modification of any policy of insurance or fidelity bond kept by the Association, and (f) any proposed action that requires the consent of a specified percentage of First Mortgagees. 11.2.5 First Mortgagee Rights Confirmed. No provision of this Declaration or any other Governing Document gives any Owner or any other party priority over any rights of a First Mortgagee pursuant to its Mortgage concerning payment to the Owner of insurance proceeds or condemnation awards for losses to or taking of a Condominium or any portion of the Association Property. 11.2.6 Unpaid Pre-Foreclosure Assessments. The transfer of fee interest in a Condominium as the result of the exercise of the power of sale or a judicial foreclosure involving a default under the First Mortgage shall extinguish the lien of unpaid Assessments which were due and payable prior to the date of the transfer, and the transferee shall take title to the Condominium free and clear of all claims for such unpaid Assessments. ARTICLE 12 ENFORCEMENT AND DISPUTE RESOLUTION 12.1 ENFORCEMENT OF GOVERNING DOCUMENTS. All violations of the Governing Documents, except for: (a) those governed by Sections 12.2 or 12.3, or (b) those subject to the Right to Repair Law (and accordingly subject to resolution through Declarant's non-adversarial contractual provisions and alternative dispute resolution provisions commencing -70-2294-00233\CCRS\1149361.1 617/13 at Section 12.4 below), or California Civil Code Section 1375, et seq. (the "Calderon Act''), shall be resolved as follows: 12.1.1 Right to Enforce. The Board, the Association, the Declarant and any Owner may enforce the Governing Documents as described in this Article, subject to California Civil Code Sections 1363.810, et seq., and 1369.510, et seq. Each Owner has a right of action against the Association for the Association's failure to comply with the Governing Documents. Each remedy provided for in this Declaration is cumulative and not exclusive or exhaustive. The City shall have the right, but not the obligation, to enforce any provision of this Declaration. 12.1.2 Violations Identified by the Association. If the Board or the Design Review Committee determines that there is a violation of the Governing Documents, other than nonpayment of any Assessment, then the Board shall give written notice to the responsible Owner identifying (a) the condition or violation complained of, and (b) the length of time the Owner has to remedy the violation including, if appropriate, the length of time the Owner has to submit plans to the Design Review Committee and the length of time the Owner has to complete the work proposed in the plans submitted to the Design Review Committee. This requirement shall apply notwithstanding the fact that this Declaration may duplicate City ordinances or regulations. If an Owner does not perform corrective action within the allotted time, the Board, after Notice and Hearing, may remedy such condition or violation complained of, and the cost thereof shall be charged to the Owner as a Special Assessment. If the violation involves nonpayment of any Assessment, then the Board may collect such delinquent Assessment pursuant to the procedures established in Section 12.2. 12.1.3 Violations Identified by an Owner. If an Owner alleges that another Person is violating the Governing Documents (other than nonpayment of any Assessment), the complaining Owner must first submit the matter to the Board for Notice and Hearing before the complaining Owner may resort to alternative dispute resolution, as required by California Civil Code Section 1369.510, et seq., or litigation for relief. 12.1.4 Legal Proceedings. Failure to comply with any of the terms of the Governing Documents by any Person is grounds for relief which may include an action to recover damages, injunctive relief, foreclosure of any lien, or any combination thereof; however, the procedures established in California Civil Code Sections 1363.810, et seq., and 1369.510 et seq. and in Sections 12.1.2 and 12.1.3 must first be followed, if they apply. 12.1.5 Additional Remedies. After Notice and Hearing, the Board may impose any of the remedies provided for in the Bylaws. The Board may adopt a schedule of reasonable fines or penalties which, in its reasonable discretion, the Board may assess against a Person for the failure of such Person to comply with the Governing Documents. Such fines or penalties may only be assessed pursuant to California Civil Code Section 1363. After Notice and Hearing, the Board may direct the officers of the Association to Record a notice of noncompliance (if allowed by law) against a Condominium owned by any Owner who has violated any provision of this Declaration. The notice shall include a legal description of the Condominium and shall specify the provision of this Declaration that was violated, the violation committed, and the steps required to remedy the noncompliance. Once the noncompliance is remedied or the non-complying Owner has taken such other steps as reasonably required by the -71-2294-00233\CCRS\1149361.1 617/13 Board, the Board shall direct the officers of the Association to Record a notice that the noncompliance has been remedied. 12.1.6 No Waiver. Failure to enforce any provision of this Declaration does not waive the right to enforce that provision, or any other provision of this Declaration. 12.1.7 Limit on Expenditures. The Association may not incur litigation expenses, including attorneys' fees, or borrow money to fund litigation, where the Association initiates legal proceedings or is joined as a plaintiff in legal proceedings, unless the Association first obtains the consent of a majority of the Association's voting power (excluding the voting power of any Owner who would be a defendant in such proceedings) and, if applicable, complies with the requirements of California Civil Code Sections 1363.810, et seq., and 1369.510, et seq. Such approval is not necessary if the legal proceedings are initiated (a) to enforce the use restrictions contained in Article 2, (b) to enforce the architectural and landscaping control provisions contained in Article 5, (c) to collect any unpaid Assessments levied pursuant to the Governing Documents, (d) for a claim, other than a Right to Repair Law Claim, the total value of which is less than Five Hundred Thousand Dollars ($500,000), or (e) as a cross-complaint in litigation to which the Association is already a party. If the Association decides to use or transfer Reserve Funds or borrow funds to pay for any litigation, the Association must notify the Owners of the decision by mail. Such notice shall provide an explanation of why the litigation is being initiated or defended, why Operating Funds cannot be used, how and when the Reserve Funds will be replaced or the loan will be repaid, and a proposed budget for the litigation. The notice must state that the Owners have a right to review an accounting for the litigation which will be available at the Association's office. The accounting shall be updated monthly. If the Association action to incur litigation expenses or borrow money to fund litigation concerns a Right to Repair Law Claim, then the voting requirements of both Sections 4.5.2 and 12.1.7 must be met. 12.1.8 City. The City has the right, but not the obligation, to enforce any of the provisions of the Declaration in favor of the City, or in which the City has an interest. 12.2 DELINQUENT ASSESSMENTS. 12.2.1 Delinquency. Assessments are delinquent if not paid within fifteen (15) days after the due date established by the Association. Assessments not paid within thirty (30) days after the due date, plus all reasonable costs of collection (including attorneys' fees) and late charges bear interest at the maximum rate permitted by law commencing thirty (30) days after the due date until paid. The Association may also require the delinquent Owner to pay a late charge in accordance with California Civil Code Section 1366( e)(2). The Association need not accept any tender of a partial payment of an Assessment and all costs and attorneys' fees attributable thereto. Acceptance of any such tender does not waive the Association's right to demand and receive full payment. -72-2294-00233\CCRS\1149361.1 617/13 12.2.2 Creation and Release of Lien. (a) Priority of Lien. All liens levied in accordance with this Declaration shall be prior and superior to (I) any declaration of homestead Recorded after the Recordation ofthis Declaration, and (2) all other liens, except (A) all taxes, bonds, Assessments and other levies which, by law, would be superior thereto, and (B) the lien or charge of any First Mortgage made in good faith and for value and Recorded before the date on which the "Notice of Delinquent Assessment" (described in this Section) against the assessed Condominium was Recorded. (b) Notice Before Creating Lien. Before the Association may place a lien on an Owner's Condominium to collect a past due Assessment, the Association shall send written notice ("Notice of Intent to Lien''), at least thirty (30) days before Recording the lien, to the Owner by certified mail which contains the following information: (I) the Association's fee and penalty procedure, (2) an itemized statement of the charges owed by the Owner, including the principal owed, any late charges, any interest, the method of calculation, and any attorneys' fees, (3) the collection practices used by the Association, (4) a statement that the Association may recover reasonable costs of collecting past due Assessments, ( 5) a statement that the Owner has the right to inspect the Association's records, pursuant to California Corporations Code Section 8333, (6) the following statement in 14-point boldface type or all capital letters: "IMPORTANT NOTICE: IF YOUR SEPARATE INTEREST IS PLACED IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR ASSESSMENTS, IT MAY BE SOLD WITHOUT COURT ACTION," (7) a statement that the Owner shall not be liable to pay the charges, interest and costs of collection if it is determined the Assessment was paid on time to the Association, (8) a statement that the Owner has the right to request a meeting with the Board, as provided by California Civil Code Section 1367.1(c) and Section 12.2.2(g) below, (9) a statement concerning the Owner's right to dispute the Assessment debt by submitting a written request for dispute resolution to the Association pursuant to the Association's "meet and confer" program required in California Civil Code Section 1363.810, et seq. and (10) a statement concerning the Owner's right to request alternative dispute resolution with a neutral third party pursuant to California Civil Code Section 1369.510 before the Association may initiate foreclosure against the Owner's separate interest, except that binding arbitration shall not be available if the Association intends to initiate a judicial foreclosure. (c) Dispute Resolution Before Recording Lien. Before Recording a Notice of Delinquent Assessment, the Association shall offer the Owner and, if the Owner so requests, participate in dispute resolution under the Association's "meet and confer" program. (d) Dispute Resolution Before Foreclosure. Before initiating a foreclosure for delinquent Assessments, the Association shall offer the Owner and, if the Owner so requests, shall participate in dispute resolution under the Association's "meet and confer" program or alternative dispute resolution with a neutral third party. The decision to pursue resolution or a particular type of alternative dispute resolution is the Owner's choice, except that binding arbitration is not available if the Association intends to initiate a judicial foreclosure. -73-2294.{)0233\CCRS\114936l.l 6/7/13 (e) Board Approval. The decision to Record a Notice of Delinquent Assessment shall be made only by the Board and may not be delegated to an Association agent. The Board must approve the decision by a majority vote of the Board members in an open meeting. The Board shall record the vote in the minutes of that meeting. (f) Dispute by Owner. An Owner may dispute the Notice of Intent to Lien by submitting to the Board a written explanation of the reasons for the Owner's dispute. The Board shaH respond in writing to the Owner within fifteen (15) days after the date of the postmark of the explanation, if the explanation is mailed within fifteen ( 15) days after the postmark of the Notice oflntent to Lien. (g) Owner's Right to Request Meeting. An Owner may submit a written request to meet with the Board to discuss a payment plan for the debt noticed in Section 12.2.2(b) above. The Association shall provide the Owner with the standards for payment plans, if any exist. The Board shall meet with the Owner in executive session within forty-five (45) days after the date of the postmark of the request, if the request is mailed within fifteen (15) days after the date of the postmark of the Notice of Intent to Lien, unless there is no regularly scheduled Board meeting within that period, in which case the Board may designate a committee of one or more members to meet with the Owner. (h) Notice of Delinquent Assessment. The lien becomes effective on Recordation by the Board or its authorized agent of a Notice of Delinquent Assessment ("Notice of Delinquent Assessment") securing the payment of any Assessment or installment thereof levied by the Association against any Condominium Owner, as provided in California Civil Code Section 1367.1. The Notice of Delinquent Assessment must identity (1) the amount of the Assessment and other authorized charges and interest, including the cost of preparing and Recording the Notice of Delinquent Assessment, (2) the amount of collection costs incurred, including reasonable attorneys' fees, (3) a sufficient description of the Condominium that has been assessed, (4) the Association's name and address, (5) the name of the Owner of the Condominium that has been assessed, and (6) if the lien is to be enforced by non-judicial foreclosure, the name and address of the trustee authorized by the Association to enforce the lien by sale. The Notice of Delinquent Assessment must be signed by an authorized Association officer or agent and must be mailed in the manner required by California Civil Code Section 2924b to the Owner of record of the Condominium no later than ten (1 0) calendar days after Recordation. The lien relates only to the individual Condominium against which the Assessment was levied and not to the Community as a whole. (i) Service on Owner's Legal Representative. In addition to the requirements of California Civil Code Section 2924, a Notice of Delinquent Assessment shall be served by the Association on the Owner's legal representative as provided in California Code of Civil Procedure Section 415.10, et seq. (j) Secondary Addresses. Upon receipt of an Owner's written request identifYing a secondary address for purposes of collection notices, the Association shall send an additional copy of any Notice of Intent to Lien, Notice of Delinquent Assessment or other Notice given under Section 12.2.2 to the secondary address provided. The Association shall notifY Owners of their right to submit secondary addresses to the Association, when the -74-2294-00233\CCRS\1149361.1 617/13 Association issues its pro forma operating budget under California Civil Code Section 1365. The Owner's request must be in writing and mailed to the Association in a manner which indicates the Association has received it. The Owner may identify or change a secondary address at any time, provided that, if a secondary address is identified or changed during the collection process, the Association shall only be required to send Notices to the indicated secondary address from the point the Association receives the request. (k) Exceptions. Assessments described in California Civil Code Section 1367.l(e) and California Code of Regulations Section 2792.26(c) may not become a lien against an Owner's Condominium enforceable by the sale of the Condominium under California Civil Code Sections 2924, 2924b and 2924c. (I) Release of Lien. Within twenty-one (21) days after payment of the full amount claimed in the Notice of Delinquent Assessment, or other satisfaction thereof, the Board shall cause to be Recorded a Notice of Satisfaction and Release of Lien ("Notice of Release") stating the satisfaction and release of the amount claimed. The Association shall provide the Owner with a copy of the Notice of Release or any other notice that the full amount claimed in the Notice of Delinquent Assessment has been satisfied. The Board may require the Owner to pay a reasonable charge for preparing and Recording the Notice of Release. Any purchaser or encumbrancer who has acted in good faith and extended value may rely on the Notice of Release as conclusive evidence of the full satisfaction of the sums identified as owed in the Notice of Delinquent Assessment. 12.2.3 Enforcement of Liens. The Board shall enforce the collection of amounts due under this Declaration by one (I) or more of the alternative means of relief afforded by this Declaration, subject to the restrictions in California Civil Code Section 1367.4. (a) The lien on a Condominium may be enforced by foreclosure and sale of the Condominium after the Owners failure to pay any Assessment, or installment thereof, as provided in this Declaration. (b) The decision to initiate foreclosure after Recording a Notice of Delinquent Assessment shall be made only by the Board and may not be delegated to an Association agent. The Board shall approve the decision by a majority vote of the Board members in an executive session. The Board shall record the vote in the minutes of the next Board meeting open to all members. The Board shall maintain the confidentiality of the Owner or Owners by identifying the matter in the minutes by the Unit number, rather than the name of the Owner or Owners. A Board vote to approve foreclosure of a lien shall take place at least 30 days before any public sale. (c) The Board shall provide notice by personal service to an Owner who occupies the Unit or to the Owner's legal representative, if the Board votes to foreclose on the Unit. The Board shall provide written notice to an Owner who does not occupy the Unit by first-class mail, postage prepaid, at the most current address shown on the Association's books. Unless the Owner provides written notification of a different mailing address to the Association, the address of the Owner's Unit may be treated as the Owner's mailing address. -75-2294-00233\CCRS\1149361.1 617/13 (d) The sale shall be conducted in accordance with the provisions of the California Civil Code applicable to the exercise of powers of sale in Mortgages, or in any manner permitted by law. The Association (or any Owner if the Association refuses to act) may sue to foreclose the lien if (1) at least thirty (30) days have elapsed since the date on which the Notice of Delinquent Assessment was Recorded, and (2) at least ten (10) days have elapsed since a copy of the Notice of Delinquent Assessment was mailed to the Owner affected thereby. The Association may bid on the Condominium at foreclosure sale, using as a credit bid the amounts secured by its lien plus trustee's fees and expenses, Association funds, or funds borrowed for such purpose, and acquire and hold, lease, mortgage and convey the same. On completion of the foreclosure sale, the Association or the purchaser at the sale may file suit to secure occupancy of the defaulting Owner's Condominium, and the defaulting Owner shall be required to pay the reasonable rental value for the Condominium during any period of continued occupancy by the defaulting Owner or any persons claiming under the defaulting Owner. A non-judicial foreclosure to collect delinquent Assessments shall be subject to the right of redemption within ninety (90) days after the sale, as provided in California Civil Code Section 1367.4. (e) A suit to recover a money judgment for unpaid Assessments may be brought without foreclosing or waiving any lien securing the same, subject to the provisions of California Civil Code Section 1367.1(b), but this provision or any suit to recover a money judgment does not affirm the adequacy of money damages. Any recovery resulting from a suit at law or in equity initiated pursuant to this Section may include reasonable attorneys' fees as fixed by the court. 12.2.4 Priority of Assessment Lien. Mortgages Recorded before a Notice of Delinquent Assessment have lien priority over the Notice of Delinquent Assessment. Sale or transfer of any Condominium does not affect the Assessment lien, except that the sale or transfer of any Condominium pursuant to judicial or non-judicial foreclosure of a First Mortgage extinguishes the lien of such Assessments as to payments which became due before such sale or transfer. No sale or transfer relieves such Condominium from liens for any Assessments thereafter becoming due. No Person who obtains title to a Condominium pursuant to a judicial or non-judicial foreclosure of the First Mortgage is liable for the share of the Common Expenses or Assessments chargeable to such Condominium which became due before the acquisition of title to the Condominium by such Person. Such unpaid share of Common Expenses or Assessments is a Common Expense collectible from all Owners including such Person. The Association may take such action as is necessary to make any Assessment lien subordinate to the interests of the California Department of Veterans Affairs under its Cal-Vet loan contracts as if the Cal-Vet loan contracts were First Mortgages. 12.2.5 Alternative Dispute Resolution. An Owner may dispute the Assessments imposed by the Association as provided in this Declaration and in California Civil Code Sections 1367.1 and 1367.4. If it is determined through dispute resolution pursuant to the Association's "meet and confer" program required in this Declaration or alternative dispute resolution with a neutral third party pursuant to California Civil Code Section 1369.510, et seq., that the Association Recorded a Notice of Delinquent Assessment in error, the Association shall promptly reverse all late charges, fees, interest, attorney's fees, costs of collection, costs imposed for the Notice prescribed in Section 1367.1(a), and costs of Recordation and release of the lien -76-2294.00233\CCRS\1149361.1 617/13 authorized under Section 1367.4(b) and pay all costs related to the dispute resolution or alternative dispute resolution. 12.2.6 Receivers. In addition to the foreclosure and other remedies granted to the Association in this Declaration, each Owner, by acceptance of a deed to such Owner's Condominium, conveys to the Association all of such Owner's right, title and interest in all rents, i~sues and profits derived from and appurtenant to such Condominium, subject to the right of the Association to collect and apply such rents, issues and profits to any delinquent Assessments owed by such Owner, reserving to the Owner the right, before any default by the Owner in the payment of Assessments, to collect and retain such rents, issues and profits as they may become due and payable. On any such default, the Association may, on the expiration of thirty (30) days following delivery to the Owner of the "Notice of Delinquent Assessment" described in this Declaration, either in person, by agent or by receiver to be appointed by a court, and without regard to the adequacy of any security for the indebtedness secured by the lien described in this Declaration, (a) enter in or on and take possession of the Condominium or any part thereof, (b) in the Association's name sue for or otherwise collect such rents, issues and profits, including those past due and unpaid, and (c) apply the same, less allowable expenses of operation, to any delinquencies of the Owner, and in such order as the Association may determine. The entering upon and taking possession of the Condominium, the collection of rents, issues and profits and the application thereof, shall not cure or waive any default or notice of default under this Declaration or invalidate any act done pursuant to such notice. 12.2.7 Compliance with Law. To the extent that any proviSion in this Section 12.2 conflicts with the provisions of the Davis-Stirling Act (California Civil Code Section 1350, et seq.) the statutory provisions shall control. 12.3 ENFORCEMENT OF BONDED OBLIGATIONS. If (a) the Association Property Improvements in any Phase are not completed before the DRE issues a Public Report, and (b) the Association is an obligee under a bond or other arrangement (a "Bond") required by the DRE to secure performance of Declarant's commitment to complete such Improvements, then the following provisions of this Section will apply: 12.3.1 Consideration by the Board. The Board shall consider and vote on the question of action by the Association to enforce the obligations under the Bond concerning any such Improvement for which a Notice of Completion has not been filed within sixty (60) days after the completion date specified for that Improvement in the Declarant's "Planned Construction Statement" which is appended to the Bond. If the Association has given an extension in writing for the completion of any Association Property Improvement, then the Board shall be directed to consider and vote on the aforesaid question if a Notice of Completion has not been filed within thirty (30) days after the end of the extension. 12.3.2 Consideration by the Owners. A special meeting of Owners for the purpose of voting to override a decision by the Board not to initiate action to enforce the obligations under the Bond or on the Board's failure to consider and vote on the question shall be held no fewer than thirty-five (35) nor more than forty-five (45) days after the Board receives a petition for such a meeting signed by Owners representing five percent (5%) of the Association's total voting power. A vote of a majority of the Association's voting power (excluding Declarant) -77-2294-00233\CCRS\1149361.1 617/13 to take action to enforce the obligations under the Bond shall be deemed to be the decision of the Association, and the Board shall thereafter implement such decision by initiating and pursuing appropriate action in the Association's name. 12.4 DISPUTES WITH DECLARANT PARTIES. The following dispute resolution procedure is implemented for the Community with the intent to avoid costly and potentially lengthy traditional court proceedings. Any dispute between the Association or any Owners, on the one hand, and the Declarant, or any director, officer, partner, shareholder, member, employee, representative, contractor, subcontractor, design professional or agent of the Declarant (each, a "Declarant Party," and collectively the "Declarant Parties"), on the other hand, is a "Dispute" that shall be resolved in accordance with the following alternative dispute resolution procedures, if the Dispute: (a) Arises under this Declaration or otherwise relates to the Community including Right to Repair Law Claims; and (b) Involves neither Association Property completion bonds, nor the collection of delinquent Assessments from Declarant; (c) Does not involve an amount in controversy that is subject to the Small Claims Act (California Civil Procedure Sections 116.110, et seq.); and (d) Concerns matters that are not resolved under the express limited warranty provided by Declarant. In addition, Owners and the Association are advised that Sections 12.4.1 and 12.4.2 below are Declarant's alternative contractual non-adversarial procedures for the resolution of Disputes concerning matters governed by the Right to Repair Law. These procedures are different from and replace the "Pre-litigation Procedure" described in Chapter 4 of the Right to Repair Law. All Disputes shall be resolved in accordance with the following alternative dispute resolution procedures: 12.4.1 Notice. Any Person with a Dispute shall give written notice of the Dispute by personal or mail service as authorized by California Code of Civil Procedure Sections 415.10, 415.20, 415.21, 415.30 or 415.40 to the party to whom the Dispute is directed ("Respondent") describing the nature of the Dispute and any proposed remedy (the "Dispute Notice"). 12.4.2 Cooperation, Access and Repair. Commencing on the date the Dispute Notice is delivered to the Respondent, the party alleging the Dispute must promptly and reasonably cooperate with Respondent and its representatives to facilitate the resolution of the Dispute. Respondent and its representatives have the right to (i) meet with the party alleging the Dispute at a reasonable time and place to discuss the Dispute, (ii) enter the Community to inspect any areas that are subject to the Dispute, and (iii) conduct inspections and testing (including destructive or invasive testing) in a manner deemed appropriate by the Respondent. If Respondent elects to take any corrective action, Respondent and its representatives shall be provided full access to the Community to take and complete the corrective action. If the Dispute relates to the planning surveying, design, engineering, grading, specifications, construction or -78-2294-00233\CCRS\1149361.1 617113 other development of the Community, Respondent is granted the irrevocable right to inspect, repair or replace any affected parts of the Community. However, Respondent is not obligated to take any such corrective action. Respondent, with the consent of Declarant, has the right to select the corrective action Respondent believes is appropriate. The right to take corrective action granted in this Section is in addition to the rights granted in California Civil Code Section 1375 ("Calderon Act''). The procedures established in the Calderon Act may be implemented, before, during or after the procedure in this Section is implemented. 12.4.3 Judicial Reference. If a Dispute is not resolved within ninety (90) days after the Respondent receives the Dispute Notice, then any of the parties to the Dispute (each, a "Party" and collectively, the "Parties'') may file a lawsuit, provided that the Association must obtain the vote or written consent of Owners other than Declarant who represent not less than sixty-seven percent (67%) of the Association's voting power (excluding the voting power of Declarant) before filing a lawsuit in a Dispute with Declarant or a Declarant Party. All lawsuits regarding Disputes must be resolved by general judicial reference pursuant to California Code of Civil Procedure Sections 638 and 641 through 645.1, as modified by this Section 12.4.3. The Parties shall cooperate in good faith to ensure that all necessary and appropriate parties are included in the judicial reference proceeding. No Party shall be required to participate in the judicial reference proceeding if all Parties against whom such Party would have necessary or permissive cross-claims or counterclaims will not or cannot be joined in the judicial reference proceeding. The general referee shall have the authority to try all issues of fact and law and to report a statement of decision to the court. The referee shall be the only trier of fact and law in the reference proceeding, and shall have no authority to further refer any issues of fact or law to any other Person unless all Parties to the judicial reference proceeding consent, or the referee determines that a conflict of interest or similar situation has arisen which would make it inappropriate for the referee to act as the trier of fact or law concerning an issue or matter. In the second alternative, an alternative judicial referee shall be selected in accordance with Section !2.4.3(b) solely for resolving or rendering a decision concerning the issue or matter involved in the conflict. (a) Place. The proceedings shall be heard in the County. (b) Referee. The referee shall be a retired judge who served on the California Superior Court in the County with substantial experience in the type of matter in dispute and without any relationship to the Parties or interest in the Master Community, unless the Parties agree otherwise. The Parties to the judicial reference proceeding shall meet to select the referee no later than thirty (30) days after service of the initial complaint on all defendants named in the complaint. Any dispute regarding the selection of the referee shall be resolved by the court in which the complaint is filed. (c) Beginning and Timing of Proceeding. The referee shall begin the proceeding at the earliest convenient date and shall conduct the proceeding without undue delay. conferences. (d) Pre-hearing Conferences. The referee may require pre-hearing -79-2294-00233\CCRS\1149361.1 617/13 (e) Discovery. The Parties to the judicial reference proceeding shall be entitled only to limited discovery, consisting of the exchange of the following: (1) witness lists, (2) expert witness designations, (3) expert witness reports, (4) Exhibits, (5) reports of testing or inspections, and ( 6) briefs. Any other discovery authorized in the California Code of Civil Procedure shall be permitted by the referee upon a showing of good cause or based on the consent of all Parties to the judicial reference proceeding. (f) Motions. The referee shall have the power to hear and dispose of motions, including motions relating to discovery, provisional remedies, demurrers, motions to dismiss, motions for judgment on the pleadings and summary judgment and/or adjudication motions, in the same manner as a trial court judge. The referee shall also have the power to adjudicate summarily issues of fact or law including the availability of remedies whether or not the issue adjudicated could dispose of an entire cause of action or defense. (g) Record. A stenographic record of the hearing shall be made which shall remain confidential except as may be necessary for post-hearing motions and any appeals. (h) Statement of Decision. The referee's statement of decision shall contain an explanation of the factual and legal basis for the decision pursuant to California Code of Civil Procedure Section 632. The decision of the referee shall stand as the decision of the court, and upon filing of the statement of decision with the clerk of the court, judgment may be entered thereon in the same manner as if the Dispute had been tried by the court. (i) Remedies. The referee may grant all legal and equitable remedies and award damages in the judicial reference proceeding. G) Post-hearing Motions. The referee may rule on all post- hearing motions in the same manner as a trial judge. (k) Appeals. The decision of the referee shall be subject to appeal in the same manner as if the Dispute had been tried by the court. (I) Expenses. Each Party shall bear its own attorneys' fees and costs incurred in connection with the judicial reference proceeding. All other fees and costs incurred in connection with the judicial reference proceeding, including the cost of the stenographic record, shall be advanced equally by each of Declarant and the Declarant Parties to whom the Dispute is directed. However, the referee shall have the power to reallocate such fees and costs among the Parties in the referee's final ruling. This provision does not modify any provision of a contract between Declarant and any Declarant Party requiring indemnification or establishing a different allocation of costs between the Declarant and the Declarant Party. 12.4.4 Arbitration of Disputes. If the judicial reference procedures in Section 12.4.3 are legally unavailable, unenforceable at the time a Dispute would otherwise be referred to judicial reference, or if all necessary parties cannot be joined in the judicial reference proceeding described in Section 12.4.3, the entire matter shall proceed as one of binding arbitration governed by the Federal Arbitration Act (9 U.S.C. §1-16) ("Arbitration"). To the extent the rules of procedure set forth herein do not conflict with the Federal Arbitration Act, -80-2294-00233\CCRS\1149361.1 617/13 such rules of procedure shall be the rules of procedure for the Arbitration. Judicial Arbitration and Mediation Service ("JAMS''), its successors, or any other entity offering arbitration services agreed to by the Parties shall hear, try and decide all issues of both fact and law and make any required findings of fact and, if applicable, conclusions of law. Notwithstanding the requirements to submit Disputes to Arbitration, if the Party seeking to submit a Dispute to Arbitration chooses, the Dispute may instead, as an alternative to Arbitration, be submitted to the California small claims court subject to the limitations on the jurisdiction of such court. The decision of the small claims court and any small claims appeals court will be final as to the Dispute. (a) Interpretation. The procedures specified in this Section 12.4.4 pertaining to Arbitration are to be interpreted and enforced as authorized by the Federal Arbitration Act (9 U.S.C. §1-16), which is designed to encourage use of alternative methods of dispute resolution that avoid costly and potentially lengthy court proceedings. Interpretation and application of those procedures shall conform to Federal court rules interpreting and applying the Federal Arbitration Act. The Community is constructed of or uses materials and products manufactured throughout the United States which are then shipped to the Community for installation at the Community. The shipment of these materials and products across state lines to the Community causes the products and materials to enter into the stream of interstate commerce and become subject to the Interstate Commerce Clause (Article I, Section VIII of the United States Constitution) and ensuing Federal laws. References to California procedural law shall not be construed as a waiver of any rights of the parties under the Federal Arbitration Act or the right of the parties to have the procedures set forth in this Section 12.4.4 interpreted and enforced under the Federal Arbitration Act. (b) Amendment. The provisions of this Section 12.4.4 shall not be amended nor shall other provisions be adopted that purport to supersede it without Declarant's prior written consent. The Parties shall cooperate in good faith and shall diligently perform such acts as may be necessary to carry out the purposes of this Section. (c) Initiation of Claim. Any Party wishing to initiate Arbitration pursuant to this Section shall serve a demand for Arbitration upon the responding Party and upon JAMS, its successor, or to any other entity offering arbitration services agreed to by the Parties. Except as otherwise set forth herein, the Arbitration shall be conducted by and in accordance with the rules of JAMS, its successors, or to any other entity offering arbitration services agreed to by the Parties. (d) Arbitrator. The arbitrator to be appointed shall be employed by JAMS, its successor, or to any other entity offering arbitration services agreed to by the Parties. Except as otherwise set forth herein, the arbitration proceedings shall be conducted by and in accordance with the rules of JAMS or any successor thereto. Except for procedural issues, the proceedings, the ultimate decisions of the arbitrator, and the arbitrator himself shall be subject to and bound by existing California case and statutory law. Should JAMS cease to exist, as such, then all references herein to JAMS shall be deemed to refer to its successor or, if none, to the American Arbitration Association (in which case its commercial arbitration rules shall be used). The Parties shall cooperate in good faith and shall diligently perform such acts as may be necessary to ensure that all necessary and appropriate parties are included in the proceeding. -81-2294-00233\CCRS\1149361.1 617/13 Declarant shall not be required to participate in the proceeding if all Parties against whom Declarant would have necessary or permissive cross-claims or counterclaims will not or cannot be joined in the proceeding. (e) Selection of Arbitrator. The proceeding shall be conducted by one (I) qualified arbitrator selected in accordance with the rules of JAMS. The term "qualified" shall mean a retired judge who has experience with the laws governing residential real estate development and construction or an attorney who has actively practiced law in California for at least fifteen (15) years and who has experience with the laws governing residential real estate development and construction. (f) Motions and Remedies. The arbitrator shall have the power to hear and dispose of motions, including motions relating to provisional remedies, demurrers, motions to dismiss, motions for judgment on the pleadings and summary judgment and/or adjudication motions, in the same manner as a trial court judge. In addition, the arbitrator shall have the power to summarily adjudicate issues of fact or law, including but not limited to the availability of remedies, whether or not the issue adjudicated could dispose of an entire cause of action or defense. The arbitrator shall have the power to grant provisional remedies including preliminary injunctive relief. Prior to the selection of the arbitrator any Party shall have the right to petition the Superior Court of the County for any necessary provisional remedies. (g) Discovery. Except as limited herein, the Parties shall be entitled to limited discovery consisting of: (i) witness lists; (ii) expert witness designations; (iii) expert witness reports; (iv) exhibits; (v) reports of testing or inspections, including but not limited to, destructive or invasive testing; (vi) arbitration briefs; and (vii) the deposition, under oath, of any designated experts and two other depositions of their choosing without obtaining the consent of the arbitrator. All other discovery shall be permitted by the arbitrator at his discretion upon a showing of good cause or based on the agreement of the Parties. The arbitrator shall oversee discovery and may enforce all discovery orders in the same manner as any trial court judge. (h) Full Disclosure. Each Party shall, in good faith, make a full disclosure of all issues and evidence to the other Parties prior to the hearing. Any evidence or information that the arbitrator determines was unreasonably withheld shall be inadmissible by the Party that withheld it. The initiating Party shall be the first to disclose all of the following, in writing, to the other Party and to the arbitrator: (i) an outline of the issues and its position on each such issue; (ii) a list of all witnesses it intends to call; and (iii) copies of all written reports and other documentary evidence whether or not written or contributed to by its retained experts (collectively, the "Outline"). The initiating Party shall submit its Outline to the other Parties and to the arbitrator within thirty (30) days of the final selection of the arbitrator. Each responding Party shall submit its written response as directed by the arbitrator. (i) Hearing. The hearing shall be held in the County. The arbitrator shall promptly commence the hearing giving due consideration to the complexity of the issues, the number of Parties and necessary discovery and other relevant matters. The hearing shall be conducted as informally as possible. Evidence Code Section 1152, et seq., shall be applicable for the purpose of excluding from evidence offers, compromises, and settlement proposals, unless both Parties consent to their admission. Attorneys are not required and either -82-2294·00233\CCRS\1149361.1 617/13 Party may elect to be represented by someone other than a licensed attorney. Cost of an interpreter shall be borne by the Party requiring the services of the interpreter in order to be understood by the arbitrator and the expenses of witnesses shall be borne by the Party or Parties producing such witnesses. (j) Decision. The decision of the arbitrator shall be binding on the Parties and if the award of the arbitrator is not paid within sixty ( 60) days of the award it shall be entered as a judgment in the Superior Court of the County. The arbitrator shall cause a complete reC<Jrd of all proceedings to be prepared similar to those kept in the Superior Court, shall try all issues of both fact and law, and shall issue a written statement of decision, such as that described in Code of Civil Procedure Section 643 (or its successor), which shall specify the facts and law relied upon in reaching his/her decision within twenty (20) days after the close of testimony. (k) Fees and Costs. Declarant shall advance the fees necessary to initiate the arbitration proceedings, with the costs, and fees, including ongoing costs and fees, if any, to be paid as agreed by the Parties. If the Parties cannot agree, then the total cost of the proceedings, including the advanced initiation fees and other fees of JAMS and any related costs and fees incurred by JAMS (such as experts and consultants retained by it) are to be paid as determined by the arbitrator. Nothing herein shall be construed to modify or abrogate any duty to defend and/or indemnify another Party pursuant to the terms of a contract between any such Parties. 12.4.5 Statutes of Limitation. Nothing in this Section 12.4 shall be considered to toll, stay, reduce or extend any applicable statute of limitations; provided, however, that Declarant, the Declarant Parties, the Association and any Owner may begin a legal action which in the good faith determination of that Person is necessary to preserve that Person's rights under any applicable statute of limitations as long as no further steps in processing the action are taken except those authorized in this Section 12.4. 12.4.6 Agreement to Dispute Resolution; Waivers of Jury Trial. DECLARANT, THE ASSOCIATION AND EACH OWNER AGREE TO USE THE PROCEDURES ESTABLISHED IN THIS SECTION 12.4 TO RESOLVE ALL DISPUTES AND WAIVE THEIR RIGHTS TO RESOLVE DISPUTES IN ANY OTHER MANNER. DECLARANT, THE ASSOCIATION AND EACH OWNER ACKNOWLEDGE THAT BY AGREEING TO RESOLVE ALL DISPUTES AS PROVIDED IN THIS SECTION 12.4, THEY ARE GIVING UP THEIR RIGHT TO HAVE DISPUTES TRIED BEFORE A JURY. THIS SECTION 12.4 MAY NOT BE AMENDED WITHOUT DECLARANT'S PRIOR WRITTEN CONSENT. 12.4.7 Covenant Regarding Proceeds. If the Association or any Owner prevail in a Dispute, and the judgment thereon or settlement terms thereof includes a monetary award, then the proceeds of the award shall be first applied to the remediation of the condition that gave rise to the Dispute. -83-2294-00233\CCRS\114936l.I 617113 ARTICLE 13 DURATION AND AMENDMENT 13.1 DURATION. This Declaration shall continue in full force unless a declaration of termination satisfying the requirements of an amendment to this Declaration established in Section 13.2 is Recorded. 13.2 TERMINATION AND AMENDMENT. 13.2.1 Amendment Approval. Notice of the subject matter of a proposed amendment to this Declaration in reasonably detailed form must be included in the notice of any Association meeting or election at which a proposed amendment is to be considered. To be effective, a proposed amendment (other than an amendment by Declarant or by the Board, as described in Sections 13.2.6 or 13.2.7 respectively) must be (a) adopted by the vote, in person or by proxy, or written consent of Owners representing not less than (1) sixty-seven percent (67%) of the voting power of each Class of the Association and (2) sixty-seven percent ( 67%) of the Association's voting power represented by Owners other than Declarant, provided that the specified percentage of the Association's voting power necessary to amend a specific provision of this Declaration may not be less than the percentage of affirmative votes prescribed for action to be taken under the provision that is the subject of the proposed amendment, and (b) approved by the requisite percentage of First Mortgagees for the (1) amendments described in Section 13.2.1, and (2) termination of the Declaration as described in Section 13.2.4. 13.2.2 Mortgagee Consent. In addition to the consents required by Section 13.2.1, a Mortgagee Majority must approve any amendment to this Declaration, any Notice of Addition and any Supplemental Declaration which is of a material adverse nature to First Mortgagees, including the following: (a) Any amendment concerning any of the following: (I) Voting rights; (2) Increases in Assessments that raise the existing Assessment by more than twenty-five percent (25%), Assessment liens or the priority of Assessment liens; (3) Reductions m reserves for maintenance, repair and replacement of the Association Property; (4) (5) its use; or (6) (7) versa; Responsibility for maintenance and repairs; Reallocation of interest in the Common Area or rights to Redefinition of any Unit boundaries; Convertibility of Units into Association Property or vice -84-2294·00233\CCRS\1149361.1 617/13 ------------. (8) Expansion or contraction of the Community or the addition, annexation or de-annexation of real property to or from the Community other than by Declarant under Sections 16.1 and 16.5 of this Declaration; (9) Hazard or fidelity insurance requirements; (10) Imposing restrictions on leasing of Units; (11) Imposing restrictions on a Unit Owner's right to sell or transfer that Owner's Unit; (12) Any decision by the Association to establish self- management if professional management had been required previously by the Governing Documents or a First Mortgagee; (13) Restoration or repair of the Community (after damage or partial condemnation) in a manner other than that specified in this Declaration; or (14) Any provisions that expressly benefit Mortgagees. (b) Any amendment which affects or purports to affect the validity or priority of Mortgages or the rights or protection granted to Mortgagees, insurers or guarantors of Mortgages. (c) Any amendment which would require a Mortgagee after it has acquired a Condominium through foreclosure to pay more than its proportionate share of any unpaid Assessment or Assessments accruing before such foreclosure. (d) Any amendment which would or could result in a Mortgage being canceled by forfeiture, or in a Condominium not being separately assessed for tax purposes. (e) Any amendment relating to (i) the insurance provisiOns in Article 8, (ii) the application of insurance proceeds in Article 9, or (iii) the disposition of any money received in any taking under condemnation proceedings. (f) Any amendment which would or could result in partition or subdivision of a Condominium in any manner inconsistent with this Declaration. (g) Any amendment which would subject any Owner to a right of first refusal or other such restriction, if such Condominium is proposed to be transferred. (h) The termination of the legal status of the Community as a "condominium project" as defined in California Civil Code Section 1351(f) after substantial destruction or condemnation. -85-2294-{)0233\CCRS\114936I.I 617/13 13.2.3 Amendment of Right to Repair Law Provisions. Neither this Section 13.2.3 nor **[Sections 1.1.41, 1.1.61, 1.1.62, 2.1.5, 3.15, 4.2.8, 4.5, 12.1.7, 12.4, 13.2.6, 13.2.6 or 15.7}** may be amended without the prior written approval of Declarant until the expiration of all applicable statutes of limitation or repose for the filing of a complaint or suit or other legal remedies against Declarant or its affiliates under the Right to Repair Law (including tolling periods). 13.2.4 Termination Approval. Termination of this Declaration requires approval of (a) a Mortgagee Majority pursuant to Section 13.2.1, (b) the Owners as provided in Section 13.2.1, and (c) Declarant (until the expiration of all applicable statutes of limitation or repose for the filing of a complaint or suit or other legal remedies against Declarant or its affiliates under the Right to Repair Law). 13.2.5 Certificate. A copy of each amendment must be certified by at least two (2) Association officers. The amendment becomes effective when a Certificate of Amendment is Recorded. The certificate, signed and sworn to by two (2) Association officers that the requisite number of Owners and Mortgagees have approved the amendment, when Recorded, is conclusive evidence of that fact. The Association shall keep in its files for at least four ( 4) years the record of all such approvals. The certificate reflecting any termination or amendment which requires the written consent of any of the First Mortgagees must include a certification that the requisite approval of such First Mortgagees was obtained or deemed given in accordance with Section 11.2.3. 13.2.6 Amendment or Termination by Declarant. (a) Before First Closing. Notwithstanding any other provisions in this Article, (i) Declarant may unilaterally amend or terminate this Declaration for any purpose, until the first Close of Escrow in the Community, and (ii) Declarant may unilaterally amend or terminate a Notice of Addition or Supplemental Declaration for any purpose, until the first Close of Escrow in the real property affected by the Notice of Addition or Supplemental Declaration to be amended or terminated. Amendment or termination shall not be effective until Declarant has Recorded in the Official Records an instrument signed and acknowledged by Declarant. (b) Minor Corrections. Notwithstanding any other provisions of this Article, Declarant (as long as Declarant owns any portion of the Community or the Annexable Area) may unilaterally amend this Declaration, a Notice of Addition or a Supplemental Declaration by Recording a written instrument signed by Declarant to: (I) conform this Declaration, the Notice of Addition or the Supplemental Declaration to the rules, regulations or requirements of FHF A, VA, FHA, DRE, Fannie Mae, Ginnie Mae, Freddie Mac, the County or the City, (2) amend, replace or substitute any exhibit to correct typographical or engineering errors, (3) include any exhibit that was inadvertently omitted at the time of Recording, (4) comply with any City, County, State or Federal laws or regulations, (5) correct typographical errors, ( 6) supplement this Declaration with provisions which pertain to rights and obligations of Declarant, the Association or Owners arising under the Right to Repair Law, (7) re-Phase any portion of the Community, and (8) change any exhibit or portion of an exhibit to conform to as- built conditions. -86-2294-00233\CCRS\ll4936l.l 6/71!3 Nothing in this Section 13.2.6 may be amended or terminated without the prior written approval of Declarant. 13.2.7 Minor Corrections by the Board. The Board may amend this Declaration, or a Notice of Addition or Supplemental Declaration for the reasons stated in clauses (2), (3), (4), (5) or (8) of Section 13.2.6(b) by Recording a written instrument signed by two officers of the Association certifying that the Board approved the amendment for the purposes described therein. However, until the end of all applicable statutes of limitation or repose for the filing of a complaint or suit or other legal remedies against Declarant or its affiliates under the Right to Repair Law (including tolling periods), the Board must obtain the prior written approval of Declarant to any amendment approved by the Board, or any other amendment by the Board or Association that affects the rights of Declarant under the Right to Repair Law, this Declaration or any Supplemental Declaration or Notice of Addition, or for any amendment by the Board concerning matters discussed in Articles 3 or 15. 13.2.8 Amendments Requiring City Approval. Proposed amendments to this Declaration shall be submitted for review to the City, and shall be approved by the City prior to the amendments being valid. No later than the date that is thirty (30) calendar days after its receipt of a proposed amendment, the City shall deliver written notice of its approval or disapproval of the proposed amendment to the party who delivered the proposed amendment to the City. If the City fails to deliver such written notice within such 30-calendar day period, the City shall be deemed to have approved the proposed amendment. A copy of the final approved amendment shall be transmitted to the City within thirty (30) days of such final approval. ARTICLE 14 GENERAL PROVISIONS 14.1 MERGERS OR CONSOLIDATIONS. In a merger or consolidation of the Association with another association, the property, rights and obligations ofthe Association may, by operation of law, be transferred to another surviving or consolidated association or, alternatively, the property, rights and obligations of another association may, by operation of law, be added to the property, rights and obligations of the Association as a surviving corporation pursuant to a merger. The surviving or consolidated association may administer and enforce the covenants, conditions and restrictions established by this Declaration governing the Community, together with the covenants and restrictions established on any other property, as one (1) plan. 14.2 NO PUBLIC RIGHT OR DEDICATION. Nothing in this Declaration is a gift or dedication of all or any part of the Community to the public, or for any public use. 14.3 NOTICES. Except as otherwise provided in this Declaration, notice to be given to an Owner must be in writing and may be delivered personally to the Owner. Personal delivery of such notice to one (1) or more co-Owners, or any general partner of a partnership owning a Condominium, constitutes delivery to all Owners. Personal delivery of such notice to any officer or agent for the service of process on a corporation or limited liability company constitutes delivery to the corporation or limited liability company. Such notice may also be delivered by regular United State$ mail, postage prepaid, addressed to the Owner at the most recent address -87-2294-00233\CCRS\1149361.1 6/7/13 furnished by such Owner to the Association or, if no such address has been furnished, to the street address of such Owner's Condominium. Such notice is deemed delivered three (3) business days after the time of such mailing, except for notice of a meeting of Owners or of the Board, in which case the notice provisions of the Bylaws control. Any notice to be given to the Association may be delivered personally to any member of the Board, or sent by United States mail, postage prepaid, addressed to the Association at such address as may be fixed and circulated to all Owners. 14.4 CONSTRUCTIVE NOTICE AND ACCEPTANCE. Every Person who owns, occupies or acquires any right, title, estate or interest in or to any Condominium or other portion of the Community consents and agrees to every limit, restriction, easement, reservation, condition and covenant contained in this Declaration, whether or not any reference to these restrictions is in the instrument by which such Person acquired an interest in the Community. As soon as practicable before sale or transfer of title to a Condominium or other separate interest in the Community or execution of a real property sales contract therefor, the Owner of the Condominium or other separate interest shall provide to the purchaser copies of the Governing Documents listed in California Civil Code Section 1368(a) and its successor statutes. ARTICLE 15 DECLARANT'S RIGHTS AND RESERVATIONS If there is a conflict between any other portion of the Governing Documents and this Article, this Article shall control. 15.1 CONSTRUCTION RIGHTS. Until Declarant no longer owns any portion of the Community or the Annexable Area, Declarant has the right, without obtaining the approval of the Association, to (a) subdivide or re-subdivide the portions of the Community owned by Declarant, (b) complete or modify Improvements in the Association Property, or in any portion of the Community or Annexable Area that is owned or leased solely or partially by Declarant, (c) alter Improvements and Declarant's construction plans and designs, (d) modify Declarant's development plan for the Community and the Annexable Area, including designating and re- designating Phases, reshaping the Condominiums and Association Property, and constructing dwellings of larger or smaller sizes, values, and of different types, (e) modify, extend, postpone or terminate the annexation of any or all of the Annexable Area, or the completion of the Community, for any purpose, including changed economic conditions, changes in Declarant's business plans or other factors determined by Declarant in its sole discretion, and (f) construct additional or different Improvements, all as Declarant considers advisable in the course of development of the Community. Declarant may temporarily erect barriers, close off and restrict access to portions of the Association Property as reasonably necessary to allow Declarant to exercise the rights reserved in this Section so long as an Owner's access to that Owner's Condominium is not eliminated. -88-2294-00233\CCRS\1149361.1 6/7/13 ---------- 15.2 SALES AND MARKETING RIGHTS. Declarant shall have the following rights related to sales and marketing, all of which may be exercised unilaterally by Declarant in Declarant's sole discretion. The rights reserved in this Section will terminate on the date of the last Close of Escrow for sale of a Condominium in the Community and Annexable Area. 15.2.1 Marketing and Sales Facilities. Declarant's rights under this Declaration include the right to install and maintain such structures, displays, signs, billboards, flags and sales offices in the Community, and the right to use any land, Units or mobile homes owned or leased by Declarant in the Community for model home purposes, or for the operation of real estate sales offices or leasing offices, all as may be reasonably necessary to conduct the business of completing construction and disposing of the Condominiums by sale, resale, lease or otherwise. 15.2.2 Use of Recreational Facilities. Declarant reserves for its benefit, the right to use and occupy portions of the recreational facilities as necessary to the promotion and advertising of the Community and the marketing of Condominiums in the Community, including visits and special events for prospective or new purchasers. The right to use and occupy the recreational facilities shall be in accordance with reasonable terms of a lease, license, permit, or other written agreement entered into with the Association for such purpose; provided, however, that Declarant may not make any use or occupancy of any portion of the recreational facilities that would unreasonably interfere with the use and enjoyment thereof by the Owners of Condominiums in the Community, and their Families, tenants and invitees. 15.2.3 Use of Association Property. Declarant and its prospective purchasers of Condominiums are entitled to the nonexclusive use of the Association Property without further cost for access, ingress, egress, use or enjoyment, to (a) show the Community to prospective purchasers, (b) dispose of the Community as provided in this Declaration, and (c) develop and sell the Annexable Area. Declarant, its employees, agents and prospective purchasers are also entitled to the nonexclusive use of private streets, drives and walkways for ingress, egress and vehicle parking as necessary in connection with the marketing and sale of the Condominiums. Neither Declarant, nor its employees, agents nor prospective purchasers shall make any use of the Association Property that will unreasonably interfere with the use and enjoyment thereof by the Owners. 15.3 CREATING ADDITIONAL EASEMENTS. At any time before the Close of Escrow for a Condominium, Declarant reserves the unilateral right to establish on that Condominium additional licenses, easements, reservations and rights-of-way to itself, to utility companies, or to others as Declarant determines are reasonably necessary to the proper development and disposal of the Community and Annexable Area. 15.4 ARCHITECTURAL RIGHTS. Declarant and any Person to whom Declarant may assign all or a portion of its exemption under this Declaration need not seek or obtain Design Review Committee approval of any Improvements constructed anywhere on the Community by Declarant or such Person. Declarant may exclude portions of the Community from jurisdiction of the Design Review Committee in the applicable Notice of Addition or Supplemental Declaration. Declarant, may, at its option, establish an additional design review committee for any area exempted from the jurisdiction of the Design Review Committee. -89-2294-00233\CCRS\1149361.1 617/13 15.5 DEVELOPER EXEMPTION. Declarant is exempt from the application of Article 2 of this Declaration and from all other restrictions on the use and enjoyment of real property and all maintenance covenants that are established for Owners under this Declaration, or in a Notice of Addition, a Supplemental Declaration or in any other Governing Documents, except to the extent that a particular provision expressly includes Declarant among the parties covered thereby. 15.6 ASSIGNMENT OF RIGHTS. Declarant may assign any or all of its rights and exemptions under this Article 15, and any other Declarant rights, exemptions, appointment powers, veto powers or easements in the Governing Documents to any successor in interest to any portion of Declarant's interest in the Community by a Recorded written assignment. 15.7 AMENDMENT TO ARTICLE. No amendment may be made to this Article without the prior written approval of Declarant for so long as Declarant owns any portion of the Community or the Annexable Area. 15.8 POWER OF ATTORNEY. Each Owner of a Condominium in the Community, by accepting a deed to a Condominium, shall be deemed to have (a) agreed and acknowledged that the Owners own no interest in the Annexable Area, (b) agreed and acknowledged that the Annexable Area may be developed, if at all, by Declarant in its sole and absolute discretion, in accordance with Declarant's development plans, and (c) constituted and irrevocably appointed Declarant, for so long as Declarant owns all or any portion of the Annexable Area, as his attorney-in-fact, for the Owner and each of the Owner's Mortgagees, optionees, grantees, licensees, trustees, receivers, lessees, tenants, judgment creditors, heirs, legatees, devisees, administrators, executors, legal representatives, successors and assigns, whether voluntary or involuntary, and thereby to have conveyed a power of attorney coupled with an interest to Declarant as the Owner's attorney-in-fact to prepare, execute, acknowledge and Record any instrument for all or any portion of the Annexable Area, or any amendment to or restatement of the Condominium Plan, as Declarant deems to be reasonably necessary to correct errors, to conform to as-built conditions, or to bring the Condominium Plan into compliance with any City, County, State or Federal law or regulations. However, nothing set forth herein shall be deemed or construed as an agreement by Declarant that any Owner shall be entitled to any participation in or discretion over the preparation and Recordation of an instrument for all or any portion of the Annexable Area. The acceptance or creation of any Mortgage or other encumbrance, whether or not voluntary, created in good faith, or given for value, shall be accepted or created subject to each of the power of attorney provisions in this Section. 15.9 PARTICIPATION IN ASSOCIATION. The Association shall provide Declarant with written notice of the transfer of any Condominium and all notices and other documents to which a Mortgagee is entitled pursuant to this Declaration, provided that Declarant shall not be required to make written request for such notices and other documents. Commencing on the date on which Declarant no longer has a representative on the Board, the Association shall provide Declarant with written notice of all meetings of the Board that any Owner is entitled to attend (each, an "Open Meeting") as if Declarant were an Owner, and Declarant shall be entitled to have a representative ("Declarant's Representative'') present at all Open Meetings. However, the Board has the power to withhold information from the Declarant's Representative and to exclude the Declarant's Representative from any Open -90-2294-00233\CCRS\1149361.1 617/13 Meeting or portion thereof if, in the good faith judgment of the Board, access to such information or attendance at the Open Meeting would adversely affect the attorney-client privilege between the Association and its counsel or if, in the good faith judgment of the Board, access to such information or attendance at an Open Meeting would not be in the best interest of the Association or the Owners. The Declarant's Representative shall not be entitled to attend executive sessions ofthe Board. The Declarant's Representative will attend any Open Meeting it is permitted to attend in an observer capacity only, and it shall not have any right to vote on matters coming before the Board or Owners. Declarant's Representative shall be entitled to receive copies of the minutes of all Open Meetings. The Declarant's rights to receive written notice of meetings and to have a Declarant's Representative present at such meeting shall continue until the later of the date that is ten (I 0) years after the first Close of Escrow in the Community, or the expiration date of all applicable statutes of limitations or repose for the filing of a complaint or suit or other legal remedies against Declarant under the Right to Repair Law (including any tolling periods). 15.10 DECLARANT APPROVAL OF ACTIONS. 15.10.1 General Rights. Until Declarant no longer owns a portion of the Community or the Annexable Area, Declarant's prior written approval is required for any amendment to the Governing Documents which would impair or diminish Declarant's right to complete the Community or the Annexable Area or sell or lease Condominiums therein. 15.10.2 Limit on Actions. Until the end of all applicable statutes oflimitations or repose for the filing of a complaint or suit or other legal remedies against Declarant under the Right to Repair Law (including any tolling periods), the following actions, before being undertaken by the Association, must first be approved in writing by Declarant: (a) Any amendment or action requiring the approval of First Mortgagees; (b) The annexation to the Community of real property other than the Annexable Area pursuant to Section 16.2; (c) The levy of a Capital Improvement Assessment for the construction of new facilities not constructed on the Association Property by Declarant; (d) Any significant reduction of Association maintenance or other services; or (e) Any modification or termination of any provision of the Governing Documents benefiting Declarant. 15.11 MARKETING NAME. The Community shall be marketed under the general name "Ocean Street." Declarant may change the marketing name of the Community or designate a different marketing name for any Phase at any time in Declarant's sole discretion. Declarant shall notify the DRE of any change in or addition to the marketing name or names of the Community or any Phase. -91-2294-00233\CCRS\1149361.1 617/13 ARTICLE 16 ANNEXATION OF ADDITIONAL PROPERTY Additional real property may be annexed to the Community and become subject to this Declaration by any of the following methods: 16.1 ADDITIONS BY DECLARANT. Declarant may add the Annexable Area to the Community and bring such added area under the general plan of this Declaration without the approval of the Association, the Board, or Owners, as long as Declarant owns any portion of the Annexable Area. No amendment may be made to this Section 16.1 without the prior written approval of Declarant. 16.2 OTHER ADDITIONS. Additional real property may be annexed to the Community and brought under the general plan of this Declaration upon the approval by vote or written consent of Members entitled to exercise no less than two-thirds (2/3) of the Association's voting power. 16.3 ADDED AREA RIGHTS AND OBLIGATIONS. When a Notice of Addition containing the provisions required by Section 16.4 is Recorded, all provisions in this Declaration will apply to the real property described in such Notice of Addition (the "Added Area'~ in the same manner as if the real property were originally covered by this Declaration. Thereafter, the rights, powers and responsibilities of the Owners, lessees and occupants of Condominiums in the Added Area, as well as in the property originally subject to this Declaration, will be the same as if the Added Area were originally covered by this Declaration. After the first day of the month following the first Close of Escrow in the Added Area, the Owners of Condominiums in the Added Area shall share in the payment of Assessments to the Association to meet Common Expenses of the Community. Voting rights attributable to the Condominiums in the Added Area may not be exercised until Annual Assessments have commenced on such Condominiums. 16.4 NOTICE OF ADDITION. The additions authorized under Sections 16.1 and 16.2 must be made by Recording a Notice of Addition against the real property to be added to the coverage of this Declaration. The Notice of Addition must (a) reference by instrument number this Declaration and the date of its Recordation, (b) describe with specificity the Added Area, (c) state that this Declaration shall apply to the Added Area and (d) describe the land use designations in the Added Area. The Notice of Addition for any addition under Section 16.1 must be signed by Declarant. The Notice of Addition for any addition under Section 16.2 must be signed by at least two (2) officers of the Association to certify that the Owner approval required under Section 16.2 was obtained. On Recordation of the Notice of Addition, the Added Area will be annexed to and constitute a part of the Community and it will become subject to this Declaration. Subject to Section 16.2, the Owners of Condominiums in the Added Area will automatically acquire Membership in the Association. No Notice of Addition or Supplemental Declaration may revoke the covenants, conditions, restrictions, reservation of easements, or equitable servitudes in this Declaration as the same pertain to the real property originally covered by this Declaration. -92-2294-00233\CCRS\ll4936l.l 6/7/13 16.5 DE-ANNEXATION AND AMENDMENT. In addition to the rights to amend or terminate a Notice of Addition granted elsewhere in this Declaration or in a Notice of Addition, Declarant may also amend a Notice of Addition for purposes other than those described in Section 13.2.6 or delete all or a portion of a Phase from coverage of this Declaration and the Association's jurisdiction so long as Declarant is the owner of all of such Phase and provided that (a) an amending instrument or a Notice of Deletion of Territory, as applicable, is Recorded in the same manner as the applicable Notice of Addition was Recorded, (b) Declarant has not exercised any Association vote concerning any portion of such Phase, (c) Assessments have not yet commenced concerning any portion of such Phase, (d) Close of Escrow has not occurred for the sale of any Condominium in such Phase, and (e) the Association has not made any expenditures or incurred any obligations concerning any portion of such Phase. No amendment may be made to this Section 16.5 without the prior written approval of Declarant. {SIGNATURES ON NEXT PAGE} -93-2294-00233\CCRS\1149361.1 617/13 {SIGNATURE PAGE TO DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RESERVATION OF EASEMENTS} This Declaration is dated for identification purposes ________ , __ . STATE OF CALIFORNIA COUNTY OF __________ _ OCEAN STREET 8 OWNER, LLC, a Delaware limited liability company By: Zephyr Partner-re, LLC a Delaware corporation, its Manager Brad Termini, Manager Declarant On __________ , __ ,before me, ----::--:------:....,..,.-:--:--:::--,----- <here insert name and title of the officer) personally appeared--------------------------- who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: -94- (SEAL) 2294-00233\CCRS\1149361.1 617/13 LENDER SUBORDINATION The undersigned, as Beneficiary of the beneficial interest in and under the Deed of Trust, ________ ("Deed of Trust") among , a __ --:----------'' as Trustor, , as Trustee, and , a _________ _ ______ , as Beneficiary, recorded on , __ , as Instrument No. _ :----:----,..,.--------,--'' in the Official Records of County, California, hereby subordinates the Deed of Trust and its beneficial interest thereunder to the foregoing Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for--,-.,.,.--:- ---:-:-----' as amended or restated (the "Declaration"), to any Notice of Addition recorded pursuant to the provisions of Article 16 of the Declaration, as amended or restated (the "Notice''), any Supplemental Declaration, as amended or restated, and to all easements to be conveyed to the Association in accordance with the Declaration, any Notice and any Supplemental Declaration. By executing this Subordination, the undersigned agrees that if the undersigned acquires title to all or any portion of the Community by foreclosure (whether judicial or non-judicial), deed-in-lieu of foreclosure or any other remedy in or relating to the Deed of Trust, the undersigned will acquire title subject to the provisions of the Declaration, any applicable Notice and any applicable Supplemental Declaration, which shall remain in full force and effect. Dated: a ___________________ _ By: ~--------------------------­Print Name: Title: ---------------- By: ------------------Print Name: Title: ---------------- {NOTARIAL ACKNOWLEDGMENT ON NEXT PAGE} 2294-00233\CCRS\1149361, I 617/13 STATE OF CALIFORNIA COUNTY OF ____________ _ On ___________________ , ____ ,beforeme, ______ ~------------------------- (here insert name and title of the officer) personally appeared--------------------------------------- who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature: --------------------- (SEAL) 2294-00233\CCRS\1149361.1 6!7/13 EXHIBIT A LEGAL DESCRIPTION OF ANNEXABLE AREA 2294-00233\CCRS\1149361.1 6/7/13 EXHIBITB ARTICLES OF INCORPORATION OF THE ASSOCIATION 2294-00233\CCRS\1149361.1 617/13 EXHIBITC BYLAWS OF THE ASSOCIATION 2294-00233\CCRS\1149361.1 6/7/13 -------------------------------------------------------- EXHffiiTD SPECIFIC MAINTENANCE OBLIGATIONS Component Structural Integrity of Condominium Building. Roof Foundation Internal Structural Components of Condominium Building Outer Surface of Condominium Building Walls Stucco Siding Surface Finishes Unit Entry Door Door Hardware Weatherstripping Frame Replacement of Door Outdoor Paint or Other F iuish Indoor Paint or Other Finish Exclusive Use Areas Deck/Patio Parking Space Storage Space Owner Maintain. Sweep floor regularly; keep free of standing water. Maintain slider/French door. Keep free of debris and trash. Keep free of debris and trash. Maintain lock on door and door hardware. Association Maintain per schedule. Maintain per schedule. Maintain per schedule, including any fire assembly and noise mitigation measures between Unit (does not include any noise mitigating floor covering materials installed in the Unit). Maintain per schedule. Maintain per schedule. Maintain per schedule. Maintain per schedule. Maintain per schedule. Maintain per schedule. Replace per schedule. Maintain per schedule. Maintain surface membrane per schedule. Maintain per schedule. Maintain door per schedule. 2294-{)0233\CCRS\1149361.1 617/13 -------------------------------------------------------' Component Air conditioning compressor and compressor pad Unit systems-Water pressure regulator, water heater, plumbing outlets and fixtures, furnaces, ducts, built-in appliances (microwave, range, ovens), electrical wiring and circuit breakers Forced-air heater in Unit Telephone wiring exclusively serving a Unit Utility Service Interior of Unit Indoor floor coverings Indoor wall surfaces and ceiling Owner Maintain ductwork to Unit and any in the Unit airspace (including any above drop ceilings). Maintain systems and appliances in the Owner's Unit; but see also "Plumbing" below. Maintain heater and all ductwork inside the Unit. Maintain. Maintain gas lines not serviced by Gas Company or Association and water and electrical utilities not serviced by provider or Association. Maintain all elements not designated for maintenance by Association. Maintain; Committee to pre-approve in writing replacement floorings and noise mitigating underlayments. Maintain surface, including paint and other wall coverings, and patch and repair damage to drywall. No removal or replacement of drywall or ceiling without prior written approval of Committee. Association Maintain compressor and pad. Maintain all components that serve two or more Units. Maintain all utilities serving Association Property or more than one Unit. Maintain shear walls, fire assembly and any noise mitigation measures installed between walls in the Condominium Building. 2294-00233\CCRS\1149361.1 617/13 Component Owner Plumbing Immediately report water leaks, sewer backups and overflowing tnbs and sinks to the Association. Maintain in-Unit plumbing fixtnres, including sinks, toilets, bath, shower, faucets, sink hardware, and drain lines for washing machine and dishwasher and gas line and vent line (if any) for dryer. Owners and tenants must regularly inspect water supply lines/hoses connected to washing machine, toilets, faucets and dishwasher for leaks and replace when necessary at Owner's expense. Do not leave running faucets or toilets unattended. Owners are also responsible for removing blockages from all drains and sewer lines serving the Unit through laterals to the main line. Owners are responsible for damage to the Unit, to other Units and to Association Property to extent caused by Owner or tenant failure to prevent or stop leaks or overflows in the Unit and for damage caused by negligent plumbing repairs. Residents who plan to leave the Unit unoccupied for more than 24 hours should shut off water supplies to fixtnres and appliances to prevent leaks during their absence. Plumbers hired by Owners must be approved by Association. The Board has the right and power to promulgate Rules and Regulations to supplement or revise the foregoing requirements without having to amend this Declaration. Cabinets Maintain. Interior doors and hardware Maintain. Appliances Maintain. Fire Sprinklers Keep heads free of dust and debris. Do not obstruct heads nor expose them to open flame or high heat sources. Do not disable heads. Immediately report to Association any damage, leak or malfunction. Electrical Maintain outlets and switch wiring and distribution exclusively serving the Unit wherever located. Owner shall hire qualified electrical contractor approved by the Association for all electrical maintenance work. Smoke detector Maintain (including periodic testing and Association Maintain pipes and other fixtures serving more than one Unit. Maintain per schedule the pipes, valve, pressure gauges. Test all systems per schedule. Maintain wiring and distribution equipment serving more than one Unit. 2294-00233\CCRS\1149361.1 617/13 Component Owner battery replacement). Report malfunction to servicer specified in Maintenance Guidelines. Window~ (except sliding glass Maintain and regularly clean indoor and doors) outdoor surfaces of glass if accessible. Maintain weather-stripping, caulking, locks, screens, and replace broken glass. Sliding Class Doors Hardware Maintain lock, weather stripping, rollers, screen door (including screen, frame and lock) keep track clear of obstructions. Glass Replace broken glass as necessary. Regularly clean indoor and outdoor surfaces. Mailbox Replace lost key or broken lock as necessary. Outdoor Lighting Fixtures Controlled by switch in Unit or Relamp as necessary. separately metered to Unit Controlled by switch in Association Property Private Street Improvements, Landscaping, Community Walls Parking Garage Utility Submeter Maintain submeter. Owner responsible for cost of replacement or repair or damage caused by Owner or Owner's Family, tenants or guest. Common Amenities including recreatilmal room, swimming pool and spa, elevators, water features and courtyard Association Maintain frame per schedule. Wash exterior surfaces of the windows in the Condominium Building, at the frequency specified in the adopted Budget. Maintain fixtures per schedule and wiring. Maintain fixtures and wiring per schedule; relamp as necessary. Maintain streets and landscaping per schedule. Maintain parking area surfaces (including any required sweeping and trash removal), lighting, entry facilities, blowers, related improvements, all per schedule. If Owner fails to maintain submeter, Association shall have the power to perform required maintenance and charge the cost thereof to the Owner as a Special Assessment in addition to any other remedies available under law. Maintain per schedule 2294-00233\CCRS\1149361.1 617/13 NOTES: Maintain, capitalized or not, means "maintain, repair and replace." Notwithstanding anything in the Declaration or this exhibit to the contrary, all maintenance by Owners must at least conform to the recommendations in the Maintenance Guidelines. This exhibit is not intended to be an exhaustive list of Association maintenance obligations; it is intended to supplement relevant provisions of the Declaration, the applicable Notice of Addition or Supplemental Declaration, the Maintenance Guidelines, and the Association's latest adopted budget. The phrase ''per schedule," when used in connection with Association maintenance obligations, shall mean and refer to maintenance levels and frequencies in the latest adopted Budget; provided, however, that the Association shall not permit any required maintenance to fall below the levels specified in the Maintenance Guidelines (if any are specified for the Improvement). 2294-00233\CCRS\1149361.1 617/13 **/EXHIBIT E LOCATIONS OF PARKING SPACES]** 2294-00233\CCRS\1149361.1 617/13 **/EXHIBIT F LOCATIONS OF STORAGE SPACES]** 2294-00233\CCRS\1149361.1 617113 **[EXHIBIT G ELEMENTS OF VARIABLE ANNUAL ASSESSMENTS]** Variable Common Expenses: I. Insurance 2. Domestic Gas (if common) 3. Domestic Water (if common) 4. Paint S. Roof 6. Other (Electricity) Variable Assessment. The variable Common Expense components of the Annual Assessment shall be allocated and assessed against all Condominiums roughly in proportion to the base square footage of the Unit Type of each Condominium Unit as reflected in the Budget of the Association, as it may be amended from time to time. The share of the variable Common Expenses allocated to each Condominium Unit Type (the "Variable Assessment") shall be determined as follows: I. Add the total of the budgeted annual variable Common Expenses described above to arrive at the total annual "Variable Cost." 2. Divide the Variable Cost by the aggregate Unit Type base square footage of all Condominiums for which Annual Assessments have commenced (as reflected in the then current Budget), to determine the annual "Variable Cost Factor." 3. Multiply the Variable Cost Factor by the base square footage of each Unit Type for which Annual Assessments have commenced (as reflected in the then current Budget) to determine the Variable Assessment portion of the Annual Assessment for each Condominium Unit. Unit Type. The Unit type of each Condominium Unit is identified on the Unit Location Map pages of the Condominium Plan in which the Condominium Unit is located. 2294-00233\CCRS\1149361.1 617/13