HomeMy WebLinkAboutCT 96-02; Terraces at Sunny Creek; Tentative Map (CT) (6)Recording requested by:
LAWYERS TITLE
When recorded return to:
Frederick C. Moore, Esq.
GALLAGHER & MOORE
2 Park Plaza, Suite 300
Irvine, CA 92614
DECLARATION OF COVENANTS, CONDITIONS
AND RESTRICTIONS, AND
RESERVATION OF EASEMENTS FOR
THE TERRACES AT SUNNY CREEK
A Residential Planned Development
50019.008-4200.PCM 120399
DECLARATION OF COVENANTS, CONDITIONS
AND RESTRICTIONS, AND
RESERVATION OF EASEMENTS FOR
THE TERRACES AT SUNNY CREEK
THIS DECLARATION OF COVENANTS, 'CONDITIONS AND RESTRIC-
TIONS, AND RESERVATION OF EASEMENTS is made this day of
, 1999, by THE TERRACES AT SUNNY CREEK, LLC, a
California limited liability company ("Declarant").
WITNESSETH:
A. Declarant is the owner of that certain real property
located in the City of Carlsbad, County of San Diego, State of
California, more particularly described as follows:
Lots 8 through 12, inclusive, and Lots 34
through 43, inclusive, of Carlsbad Tract
j No. CT 96-02 (The Terraces at Sunny creek
I) , according to Map therefore No. ,
filed in the Office of the County Record-
er of San Diego County, California on
(hereinafter referred to sometimes as the "Lots").
B. Declarant is also the owner of that certain real
property located in the City of Carlsbad, County of San Diego,
State of California, more particularly described as follows:
A non-exclusive easement for ingress and
egress over portions of Lot 177 as generally
depicted on Exhibit "A" attached hereto and
incorporated herein by this reference, togeth-
er with a nonexclusive easement for mainte-
nance, repair, landscape, irrigation, use, in-
gress, egress, and access purposes in, on,
over, across, under and through those certain
portions of the Lots, as more particularly de-
scribed herein and depicted on Exhibit "B"
attached hereto and incorporated herein by
this reference
(hereinafter referred to as the "Common Area"). The Lots and the
Common Area are hereinafter sometimes collectively referred to as
the "Property."
C. Declarant is also the owner of that certain real
property located in the City of Carlsbad, County of San Diego,
State of California, more particularly described in Exhibit "C"
50019.008-4200.FCM 120399
attached hereto ("Annexation Property"), which may, from time to
time, be annexed to and become part of the Project (as hereinafter
defined), in accordance with the Article herein entitled "Annex-
ation of Additional Property."
D. Declarant desires to develop the Property and the
Annexation Property as a common interest development, more
particularly described in Section 1351(k) of the California Civil
Code as a "planned development" (hereinafter referred to as the
"Project"), consisting of single-family detached homes, landscaped
areas and other improvements, as more fully described below. The
development of the Project shall be consistent with the overall
plan of development submitted to and approved by the Department of
Veteran Affairs and/or theXFederal Housing Administration (herein-
after referred to as the "VA/FHA"). There is no guarantee that all
Phases will be developed or annexed to this Declaration or
developed or annexed in any particular order. Some Phases may be
developed concurrently. Declarant reserves the right during the
development of the Project to change the phasing and the design,
size, type and price of the homes to be built in the Project and
the construction and phasing of the development of the Project.
E. Declarant deems it desirable to impose a general
plan for the development, maintenance, improvement, protection,
use, occupancy and enjoyment of the Project, and to establish,
adopt and impose covenants, conditions and restrictions upon the
Project for the purpose of enforcing, protecting and preserving the
value, desirability and attractiveness of the Project.
F. Declarant deems it desirable for the efficient en-
forcement, protection and preservation of the value, desirability
and attractiveness of the Project that a corporation be delegated
and assigned the powers of administering and enforcing said
covenants, conditions and restrictions.
G. THE TERRACES AT SUNNY CREEK HOMEOWNERS ASSOCIATION,
a California nonprofit, mutual benefit corporation, is incorporated
under the laws of the State of California for the purpose of
exercising the aforesaid powers.
H. Declarant intends to convey the Property subject to
the covenants, conditions and restrictions set forth hereinbelow.
NOW, THEREFORE, Declarant agrees and declares that it has
established, and does hereby establish, a plan for the development,
maintenance, protection, improvement, use, occupancy and enjoyment
of the Project, and has fixed, and does hereby fix, the covenants,
conditions, restrictions, easements, reservations, equitable
servitudes, liens and charges (hereinafter collectively referred to
as the "Protective Covenants") upon the Project. Each and all of
the Protective Covenants shall run with the land and shall inure to
the benefit of and be binding upon Declarant, its successors and
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assigns, all subsequent owners of all or any portion of the Proj-
ect, together with their grantees, successors, heirs, executors,
administrators, devisees and assigns, and may be enforced by any
Owner or the Association.
ARTICLE I
DEFINITIONS
Section 1. "Annexation Property" shall mean and refer
to that certain real property described in Exhibit "C" attached
hereto (hereinafter referred to as "Annexation Property"), includ-
ing all Improvements (as defined below) constructed thereon, all or
any portion of which may be annexed into the Project as set forth
in the Article herein entitled "Annexation of Additional Property."
Section 2. "Architectural Control Committee" shall
mean and refer to the architectural committee created pursuant to
the Article herein entitled "Architectural Control - Approval."
action 3 . "Articles" shall mean and refer to the Ar-
ticles of Incorporation of The Terraces at Sunny Creek Homeowners
Association as filed in the Office of the Secretary of State of the
State of California, as such Articles may be amended, from time to
time.
Section 4. "Assessments" shall be used as a generic
term which shall mean and refer to the following:
(a) "Regular Assessment" shall mean and refer to an
annual charge against each Owner and his respective Lot rep-
resenting a portion of the Common Expenses of the Association;
(b) "Compliance Assessment" .shall mean and refer to
the charge against an Owner representing the costs incurred by
the Association in the repair of any damage to the Common Area
for which such Owner (or any member of his/her family, or
••• his/her guests, invitees, tenants or lessees) was responsible,
the costs incurred by the Association in bringing such Owner
and his Lot into compliance with this Declaration, any amount
due the Association based upon disciplinary proceedings
against an Owner in accordance with this Declaration, and/or
any amount due the Association to reimburse the Association
for administrative costs attributable to an Owner as provided
herein;
(c) "Special Assessment" shall mean and refer to
the charge against an Owner and his respective Lot repre-
senting a portion of the cost of reconstructing any damaged or
destroyed portion or portions of the Common Area, of con-
structing or installing any capital improvements to the Common
50019.008-4200.FCM 120399 ~3~
Area, or of taking any extraordinary action for the benefit of
the Common Area or the membership of the Association pursuant
to the provisions of this Declaration; and
(d) "Special Benefit Assessment" shall mean and
refer to a charge levied by the Association against an Owner
and his respective Lojt to cover the expenses incurred by the
Association in the operation, maintenance, repair and/or
funding of reserves for a portion of the Project designated by
Declarant or the Association as a "Special Benefit Area,"
which expenses are allocable only to the Owners and their Lots
within such an Area.
Section 5. "Association" shall mean and refer to The
Terraces at Sunny Creek Homeowners Association, a California non-
profit, mutual benefit corporation, in which all Owners shall have
a membership interest as more particularly described hereinbelow,
provided that membership shall be limited to Owners.
Section 6. "Board" shall mean and refer to the Board
of Directory of the Association, elected in accordance with the By-
Laws of the Association and this Declaration.
Section 7. "By-Laws" shall mean and refer to the By-
Laws of the Association which have been, or will be, adopted by the
Board, as such By-Laws may be amended, from time to time.
Section 8. "City" shall mean and refer to the City of
Carlsbad, California, a municipal corporation and its various
departments, divisions, employees and representatives.
Section 9. "Common Area" is used herein as a generic
term to mean and refer to: (a) all real and personal property, and
to all Improvements thereon, which are owned by the Association;
and (b) all real property, and Improvements thereon, over which the
Association has an easement (e.g., front yards, slopes, etc.),
lease and/or which the Association is otherwise responsible
pursuant to this Declaration to manage, control and/or maintain for
the common use, benefit and enjoyment of all Owners in the Project.
The Common Area may also include, without limitation, any private
street (e.g., Lots 177, 178, 179, 180 and 181), any private street
lights, private storm drains (including any storm water pollution
interceptors installed in conjunction therewith, if any), private
utilities (e.g., water or sewer), if any, external greenbelts
required by the City, parkways, retaining walls, perimeter walls,
fences and such other Improvements as may be designated, from time
to time, and set forth in one (1) or more Notices of Annexation
recorded in the Office of the County Recorder, pursuant to the
Article herein entitled "Annexation of Additional Property." The
Common Area in Phase 1 of the Project generally consists of that
certain real property more particularly described in Paragraph B of
50019.006-4200.FCM 120399 -4-
the recitals, together with the Improvements and easement areas
depicted on Exhibits "A" and "B".
Section 10. "Common Expenses" shall mean and refer to
the actual and estimated costs to be paid by the Association for
the following: (a) owning, maintaining, managing, operating,
painting, repairing, and replacing the Common Area; (b) managing
and administering the Association, including, but not limited to,
compensation paid by the Association to managers, accountants,
attorneys and any Association employees; (c) providing utilities
and other services to the Common Area; (d) providing insurance as
provided for herein; (e) paying that portion of any Assessment
attributable to Common Expenses not paid by the Owner responsible
for payment; (f) paying taxes for the Association; and (g) paying
for all other goods and services designated by, or in accordance
with, other expenses incurred by the Association for the benefit of
all Owners, and reasonably required for the Association to perform
its powers and duties as set forth in this Declaration. Additional-
ly, the Common Expenses shall include adequate reserves, as the
Board shall determine to be appropriate, for the repair and
replacementiof those elements of the Common Area which must be
repaired or replaced on a periodic basis, rather than a regular
annual basis.
Section 11. "County" shall mean and refer to the Coun-
ty of San Diego, California, and its various departments, divi-
sions, employees and representatives.
Section 12. "Declarant" shall mean and refer to The
Terraces at Sunny Creek, LLC, a California, limited liability
company, and to any person or entity acquiring those specific
Declarant's interest in the Project (including Declarant's rights
and obligations as created and established herein) identified
pursuant to a written assignment from Declarant which is recorded
in 'the Office of the County Recorder. Any such assignment may
include only certain specific rights of the Declarant and may be
subject to such conditions as Declarant may impose, in its sole
discretion.
Section 13. "Declaration" shall mean and refer to this
Declaration of Covenants, Conditions and Restrictions, and Reser-
vation of Easements, and to all amendments to this Declaration as
may be recorded, from time to time, in the Office of the County
Recorder, in accordance with Section 1351(h) and Section 1353 of
the California Civil Code.
Section 14. "ORE" shall mean and refer to the Depart-
ment of Real Estate of the State of California, which administers
the sale of subdivided lands pursuant to Sections 11000, et seq. ,
of the California Business and Professions Code, or any similar
California statute hereinafter enacted.
50019.008-4200.PCM 120399 -5-
Section 15. "Entitlements From City" shall mean that
certain disposition and development agreement" (the "Development
Agreement") , including any and all amendments thereto, if any, all
if building permits and related permits, conditions of approval, and
all documents, instruments or similar writings which regulate or
relate to utilization of real property in the Project.
Section 16. " FHLMC" shall mean and refer to the
Federal Home Loan Mortgage Corporation (The Mortgage Corporation)
created by Title III of the Emergency Home Finance Act of 1970, as
amended, from time to time, including any successors thereto.
Section 17. "FNMA" shall mean and refer to the Federal
National Mortgage Association, a government-sponsored private
corporation established pursuant to Title VIII of the Housing and
Urban Development Act of 1968, as amended, from time to time,
including any successors thereto.
Section 18. "GNMA" shall mean and refer to the Govern-
ment National Mortgage Association administered by the United
States Department of Housing and Urban Development, including any
successors thereto.
Section 19. "Improvements" shall mean and refer to all
structures and appurtenances thereto of every kind, including, but
not limited to, Residences, private streets, street lights, build-
ings, awnings, shades, screens, screen doors, skylights, side yard
and,,rear yard fencing, mail kiosks, swimming pools, spas, garages,
pavement, driveways, Project perimeter walls, fences, retaining
walls, flag poles, monument signs, patios, grading of a Lot or
disturbing the existing grade in any manner, irrigation equipment
and all related facilities, exterior air conditioning units, solar
panels and related facilities, internal and external greenbelts,
parkways, drainage swales, streetscapes, antennas and related fa-
cilities, exterior lighting and any landscaping which, if left in
its natural state, would grow to a height in excess of fifty feet
(50').
Section 20. "Lot" shall mean and refer to a plot of
land as shown upon the recorded subdivision map of the Project, and
to all Improvements, including the Residence, constructed thereon.
Only those plots of land which are designed and intended for the
construction of a Residence and ownership by an individual Owner
shall be deemed "Lots." "Lot" shall not mean or refer to any plot
of land owned in fee by the Association as Common Area.
Section 21. "Member" shall mean and refer to every
person or entity who holds membership in tl^e Association, as more
particularly set forth in the Article herein entitled "The Asso-
ciation, " and shall be synonymous with the term "Owner."
50019.008-4200.FCM 120399 -6-
Section 22. "Mortgage" shall mean and include any
mortgage or deed of trust, or other conveyance of a Lot to secure
the performance of an obligation, which conveyance will be recon-
veyed upon the completion of such performance, including an in-
stallment land sales contract (as defined in Sections 2985 through
2985.6 of the California Cfivil Code, as same may be amended, from
time to time) . The term "Deed of Trust, " when used herein, shall be
synonymous with the term "Mortgage."
Section 23. "Mortgagee" shall mean and refer to a per-
son or entity to whom a Mortgage is made, and shall include the
beneficiary of a Deed of Trust or the vendor under an installment
land sales contract, as the case may be, and the assignor of a
Mortgagee, beneficiary or vendor.
Section 24 . "Mortgagor" shall mean and refer to a per-
son or entity who mortgages his or its property to another, i.e.,
the maker of a Mortgage, and shall include the trustor of a Deed of
Trust and the vendee under an installment land sales contract.
Section 25. "Notice and Hearing" shall mean and refer
to written notice and a hearing before the Board or the Architec-
tural Control Committee of the Association, or other tribunal
created by the Board in the manner provided in the By-Laws, at
which the affected Owner shall have an opportunity to be heard in
the manner provided herein and in the By-Laws.
Section 26. "Notice of Annexation" shall mean and
refer to that certain instrument utilized to annex all or any
portion of the Annexation Property, in accordance with the provi-
sions of this Declaration, thereby subjecting said subsequent Phase
to the provisions of this Declaration and to the jurisdiction of
the Association.
Section 27. "Owner" shall mean and refer to the record
Owner, or Owners if more than one (1) , or the purchaser under a
conditional sales contract of fee title to, or an undivided in-
terest in, any Lot in the Project. The term "Owner" shall include
the Declarant, the vendee under an installment land sales contract
(as described in Sections 2985 through 2985.6 6f the California
Civil Code, as same may be amended, from time to time) and the
holder of a leasehold estate having a term of ten (10) or more
years, including renewal periods. The foregoing is not intended to
include persons or entities who hold an interest in a Lot merely as
security for the performance of an obligation.
Section 28. "Phase" shall mean and refer to: (a) the
Lots and the Common Area; and (b) one (1) or more lots within the
Annexation Property which are simultaneously annexed to the Project
by the recordation of a Notice of Annexation in the Office of the
County Recorder and for which a Final Subdivision Public Report has
been issued by the DRE.
-7 -50019.008-4200.FCM 120399 '
Section 29. "Project" shall mean and refer to the
Property and to all Improvements, including the Residences, con-
structed thereon and the Common Area and all Annexation Property
which is made subject to this Declaration in accordance with the
applicable provisions of this Declaration.
Section 30. "Property" shall mean and refer to all of
that certain real property described in recitals A and B above.
Section 31. "Residence" shall mean and refer to the
individual dwelling and the-related Improvements which are con-
structed upon a separate Lot and which are designed and intended
for use and occupancy as a residential residence.
Section 32. "Rules and Regulations" shall mean and re-
fer to the Rules and Regulations adopted by the Board pursuant to
the By-Laws and this Declaration, as they may be amended, from time
to time.
Section 33. "VA/FHA" shall mean and refer to the
United States Veterans Administration and/or Federal Housing Ad-
ministration, including the department or agency of the United
States government as shall succeed to the VA and/or FHA.
Section 34. Application of Definitions. The aforesaid
definitions shall be applicable to this Declaration and to any
supplements or amendments hereto, including, but not limited to,
any Notices of Annexation filed or recorded pursuant to the pro-
visions of this Declaration, unless the context shall prohibit such
application.
ARTICLE II
GENERAL PLAN OF DEVELOPMENT
Section 1. Introduction. The Declarant has designed
The Terraces at Sunny Creek as a multi-phase planned residential
community, which, if completed as proposed, will consist of
approximately one hundred seventy-two (172) Residences, together
with various Common Area improvements and related amenities. The
Project will be developed in accordance with the general plan of
development submitted to and approved by*" the City, VA/FHA, if
applicable, and the ORE. The Association will maintain the Common
Area and will be the management body for the Project, as provided
herein.
Section 2. Rights and Obligations of Owners. Each
Owner of a Lot in the Project shall automatically become a Member
of the Association and shall be obligated for the payment of
Assessments to the Association. Subject to the provisions of this
Declaration which reserve rights in favor of the Declarant, each
50019.008-4200.PCM 120399 -8-
Owner, his family members, tenants and invitees will be entitled to
the use and enjoyment of the Common Area of the Project.
Section 3. Description of Common Area. The Common
Area associated with the Project is currently planned to consist
generally of private streets, certain entryway improvements (such
as entry gates and entry monuments), a Project monument, perimeter
walls and fences, and parkway, slope, front yard and native
landscaping, "passive" recreation areas (such as tot lots, and
volleyball and horseshoe courts), and private utility Improvements,
if any. Each Owner of a Lot in the Project shall have a non-
exclusive easement appurtenant to his Lot for use and enjoyment of
all Common Area within the Project, in accordance with the terms
and provisions of this Declaration. The Association shall be
responsible for the ownership, if applicable, maintenance, and
operation of all Common Area within the Project, except Improve-
ments within the public easement area for pedestrian ingress and
egress, if any.
Section 4. Membership in the Association. As more
particularly set forth in this Declaration, each Owner of a Lot in
the Project'shall automatically become a member of the Association,
and shall be obligated for the payment of assessments to the
Association. In addition, each Owner, his family, members, lessees,
tenants, guests and invitees, will be entitled to the use and
enjoyment of the Common Area within the Project, in accordance with
this Declaration, the By-Laws and Rules and Regulations adopted by
the Board.
Section 5. Annexation of Subsequent Phases. At such
time as subsequent Phases are developed, if ever, Declarant shall
annex such Phases to the Project in accordance with the provisions
of the Article herein entitled "Annexation of Additional Property."
Section 6. Declarant's Use of Streets and Utilities.
Until such time as all Lots in Carlsbad Tract 96-02 and the
Annexation Property are sold, Declarant hereby reserves, together
with the right to grant and transfer all or a portion of the same,
easement rights to use the street system and any private utilities
within the Project for, including, but not limited to, construc-
tion, access and connection of utilities by Declarant for purposes
of developing the real property comprising Carlsbad Tract 96-02 and
the Annexation Property.
Section 7. Declarant's Control of Development. In
order that the Project be completed and established as a planned
residential community, so long as Declarant owns a Lot in the
Annexation Property, Declarant shall have the sole discretion and
control over all aspects of construction of Residences and Im-
provements owned by itself, and over the selling and marketing of
Lots in the Project. Further, Declarant shall have the sole
discretion and control to:
50019.008-4200.FCM 120399 -9-
(a) Install, construct, modify, alter or remove any
Improvements in the Project;
(b) Redesign or otherwise alter the style (e.g.
architectural), size (e.g., adding additional square footage
or reducing the square footage of the residences), color or
appearance of any Improvements in any portion of the Project
owned by Declarant;
(c) Construct such additional Improvements on any
portion of the Project owned by Declarant;
(d) Subdivide, re-subdivide, grade or regrade any
portion of the Property and/or Annexation Property owned by
Declarant; and/or
(e) Otherwise control all aspects of designing and
constructing the Improvements in the Project, and of regulat-
ing the marketing of Lots in the Project.
In furtherance thereof, Declarant hereby reserves unto itself, and
its successors and assigns, a nonexclusive easement for ingress and
egress on, over and across the Project as necessary to construct
Improvements, and further reserves for itself the right, (a) until
all Lots in the Annexation Property are sold (and escrows have
closed) , or (b) three (3) years from the recordation of a Notice of
Annexation for the most recent Phase of the Project, whichever
occurs last:
(a) A nonexclusive easement for_ ingress and egress
on, over and across the Project as necessary to construct the
Lots, Residences, and all other Improvements;
(b) The exclusive right to maintain one (1) or more
sales office (s), model complex(es), interior design and decor-
ator center(s) and parking area for employees, agents and pro-
spective buyers;
(c) The exclusive right to place reasonable signs,
flags, banners, billboards or other forms of advertising on
any portion of the Project owned or controlled by Declarant
and/or Common Area (specifically including the Project entry
area), as Declarant deems necessary, irrespective of size,
color, shape or materials of such items, except to the extent
that the exercise of said exclusive right conflicts with any
provision of the City's Municipal Code or other applicable
governmental regulations;
(d) A nonexclusive right to utilize the Common Area
and any unassigned open parking spaces in connection with its
program for the sale or leasing of Lots in the Project;
50019.008-4200.PCM 120399 -10-
(e) The right to install, place, replace, con-
struct, reconstruct, modify or remove any Improvement from any
Lot owned by Declarant, as Declarant may, in its sole discre-
tion, deem appropriate;
(f) The right to conduct any commercial activity
upon any Lot owned by Declarant which reasonably relates to
the development, marketing, leasing or sale of the Lots or
other property in the Project; and
(g) The right to utilize the Common Area in the
Project, and exclude Owners and their guests, for marketing,
sales and promotional activities which relate to the leasing
or sale of the Lots or other property in the Project. The
Declarant agrees to pay any and all maintenance or repair
costs associated with the use of the Common Area for marketing
purposes and to obtain a reasonable amount of liability
insurance naming the Association as an additional insured
during such use of the Common Area.
Each Owner hereby grants, upon acceptance of his or her deed to his
or her Lot, an irrevocable special power of attorney to Declarant
to execute and record all documents and maps necessary to allow
Declarant to exercise its rights under this Declaration.
Section 8. Non-Liability of Declarant. The purpose of
this Article is merely to describe the proposed general plan of
development for the Project. Without limiting the generality of the
foregoing, nothing in this Section or elsewhere in this Declaration
shall limit the right of Declarant to complete construction of the
Project, to alter same or to construct such additional Improvements
as Declarant shall deem advisable prior to the completion and sale
of all Lots in the Project. Declarant may assign any or all of its
rights under this Declaration to any successor to all or any part
of Declarant's interest in the Project by an express written as-
signment recorded in the Office of the County Recorder.
ARTICLE III
RESERVATION OF EASEMENTS AND OTHER
PROPERTY RIGHTS IN THE COMMON AREA
».Ef
Section 1. Owners' Easements. Every Owner shall have
a nonexclusive right and easement of access and use in and to the
Common Area. Said right and easement shall be appurtenant to and
shall pass with title to every Lot, subject to the limitations set
forth in Section 2 below.
Section 2. Limitations on Owners' Easement Rights.
The rights and easements of access, use and enjoyment set forth in
50019.008-4200.FCM 120399 -11-
Section 1 hereinabove shall be subject to the provisions of this
Declaration, including, but not limited to, the following:
(a) The right of the Association to reasonably
limit the number of guests of Owners;
(b) The right of the Association to establish and
enforce reasonable Rules and Regulations pertaining to use of
the Common Area;
(c) The right of the Association, in accordance
with its Articles, By-Laws and this Declaration, to borrow
money with the assent of sixty-seven percent (67%) of the
voting power of the Association, excluding Declarant, and/or
to mortgage, pledge, deed in trust or otherwise hypothecate
any or all of its real or personal property as security for
money borrowed or debts incurred, for the purpose of improving
or repairing the Common Area and related facilities;
(d) The right of the Association to suspend the
voting,rights and rights and easements of use and enjoyment of
the Common Area of any Member, and the persons deriving such
rights and easements from any Member for any period during
which any Assessment against such Member's Lot remains unpaid
and delinquent (except such rights as are reasonably required
to access said Member's Residence); and after Notice and
Hearing, to impose monetary penalties or suspend such use
rights and easements for a period not to exceed thirty (30)
days for any violation of this Declaration or Rules and
Regulations, it being understood that any suspension for
either nonpayment of any Assessments or breach of such re-
strictions shall not constitute a waiver or discharge of the
Member's obligations to pay Assessments as provided herein;
(e) Subject to the terms and provisions . of the
Article herein entitled "Mortgagee Protection," the right of
the Association to dedicate or transfer easements over all or
any part of the Common Area to any public agency, authority,
entity, individual, or utility for such purposes and subject
to such conditions as may be agreed to by the Owners. No such
dedication or transfer shall be effective unless: (1) an
instrument approving said dedication or transfer is signed by
Owners representing sixty-seven percent (67%) of the voting
power of the Association, excluding Declarant, and recorded in
the Office of the County Recorder, and (2) a written notice of
the proposed dedication or transfer is sent to every Owner not
less than fifteen (15) days nor more than thirty (30) days in
advance; provided, however, that the dedication or transfer of
easements for utilities or for other purposes consistent with
the intended use of the Common Area shall not require the
prior approval of the Members of the Association;
50019.008-4200.FCM 120399 -12-
(f) The right of Declarant (and its sales agents,
representatives, customers and prospective purchasers) to the
nonexclusive use of the Common Area without charge for sales,
display access and exhibit purposes related to selling,
marketing, showing and otherwise disposing of Lots in the
Project, which rights Declarant hereby reserves; provided,
however, such use shall cease upon the date that Declarant no
longer owns any Lot in the Annexation Property. In addition,
such use shall not unreasonably interfere with the rights of
enjoyment of other Owners as provided herein;
(g) The right of the Association, acting by and
through its Architectural Control Committee, to enact uniform
and reasonable architectural standards;
(h) The right of Declarant to designate additional
Common Area, pursuant to terms of the Article herein entitled
"Annexation of Additional Property";
(i) The right of the Association to perform and
exercise its duties and powers as set forth herein;
(j) Other rights of the Association, the Architect-
ural Control Committee, the Board, the Owners and Declarant
with respect to the Common Area as may be provided for in this
Declaration;
(k) The right of Declarant to grant and transfer
easements on, over and across Carlsbad Tract 96-02 and the
Annexation Property for the development, installation,
construction and maintenance of electric, telephone, cable
television, water, gas, sanitary sewer lines and drainage
facilities, as shown on any recorded subdivision map covering
the Project, and as may be reasonably necessary for the proper
maintenance, development and conveyance of Lots and/or Common
Area; and
(1) Any limitations, restrictions or conditions
affecting the use, enjoyment or maintenance of the Common Area
imposed by Declarant or by the City,,i.-or other governmental
agency having jurisdiction to impose any such limitations,
restrictions or conditions, including, but not limited to, the
rights of the City or such other governmental agency having
jurisdiction to use their vehicles or appropriate equipment
over those portions of the Common Area designed for vehicular
movement to perform municipal functions or emergency or
essential public services.
Section 3. Easements for Common Fences. There is
hereby created, established and granted to each Owner in the
Project, an easement appurtenant to the real property in the
Project for the placement of all common fences, where such fences
50019.008-4200.FCM 120399 -13-
were originally installed by Declarant, regardless of whether such
fences are located precisely upon the boundary separating two (2)
residential Lots or a residential Lot and Common Area. Those Owners
who have a common fence which adjoins their Lots and effectively
creates the boundary line between such Lots (including the
Association and its Common Area) shall equally have the right to
use such fence and each shall have the exclusive right to the use
of the interior surface of the fence facing his Residence or Common
Area. Neither Owner shall drive nails, screws, bolts or other
objects more than half way through any common fence, interfere with
the adjacent Owner's use and enjoyment of the common fence, or
impair, in any way, the structural integrity of the common fence.
In the event that any portion of such fence, except the interior
surface of one (1) side, is damaged or injured from any cause,
other than the act or negligence of either party, it shall be
repaired or rebuilt at their joint expense.
Section 4. Delegation of Common Area Use Rights. Any
Owner who resides within the Project may delegate, in accordance
with the By-Laws, his rights of use and enjoyment to the Common
Area to the members of his immediate family and any other persons
residing within his Residence. In the event an Owner has rented or
leased his Residence, his rights of use and enjoyment to the Common
Area shall be automatically delegated to his tenants or lessees for
the duration of their tenancy, and the Owner shall forfeit any
rights of use and enjoyment to the Common Area for the duration of
such tenancy, except those rights of ingress and egress which are
reasonably necessary to carry out the appropriate duties of a
landlord. In the event of a conditional sales contract, the seller
under the contract shall be deemed to delegate^ his rights of use
and enjoyment to the Common Area to the purchaser under the
contract.
Section 5. Easements for Publac Services . In addition
to the foregoing easements over the Common Area, there is hereby
created, established and granted easements for public services,
including, but not limited to, the right of police, fire, ambulance
and other public services to enter upon any part of the Common Area
for purposes of serving the health and welfare of all Owners in the
Project.
Section 6. Easements for Unintentional Encroachments.
Declarant reserves for its benefit, and the benefit of the Owners
and the Association, and hereby creates, establishes and grants a
nonexclusive easement appurtenant to each Lot on, over and across
those portions of any adjacent Lot (whether a residential Lot or a
Common Area Lot) , not to exceed one foot (!') / for the encroachment
by any foundations and footings, and not to exceed three feet (3')
for eaves or other overhangs, wing walls and/or chimneys existing
as of the date that escrow is initially closed for the sale of said
Lot from Declarant to an Owner. Additionally, there is hereby
created, established and granted nonexclusive easements appurtenant
50019.008-4200.FCM 120399 -14-
to any Lot on, over and across those portions of any such adjacent
Lot (whether a residential Lot or a Common Area Lot) , not to exceed
one foot (!'), for the encroachment by any Improvement resulting
from any subsequent settling or shifting of any Improvements. All
of the aforesaid encroachments shall be measured at the point of
encroachment along a line which is perpendicular to the common
property line between the affected Lots. Declarant further reserves
reciprocal easements for utility services and repairs, replacement,
and maintenance of the same over the Lots for the benefit of the
Owners. Use of the foregoing easements may not unreasonably
interfere with each Owner's use and enjoyment of the Owner's
respective Lot.
Section 7. Easements for Utilities. The rights and
duties of the Owners of Lots within the Project with respect to
sanitary sewer, water, electricity, gas, television cable (or CATV
service) and telephone lines, and other facilities, shall be
governed by the following:
(a) Each respective utility company shall maintain
all utility facilities and connections on the Project owned by
such utility company; provided, however, that if any company
shall fail to do so, it shall be the obligation of each Owner
to maintain those facilities and connections located upon such
Owner's Lot or provide service to only such Owner's Lot and it
shall be the obligation of the Association to maintain those
facilities and connections located upon and which provide
service to the Common Area;
(b) Wherever sanitary sewer, water or gas connec-
tions, television cables, electricity or telephone lines are
installed within the Project and it becomes necessary to gain
access to said connections, cables and/or lines through a Lot
owned by someone other than the Owner of the Lot served by
said connections, cables and/or lines, the Owner of the Lot
served by said connections, cables and/or lines shall have the
right, and is hereby granted an easement to the full extent
necessary therefor, to enter upon such other Lot or to have
the utility companies enter upon such other Lot to repair,
replace and generally maintain said connections, cables and/or
lines. Except as may otherwise be set forth herein, in the
event that any damage shall be proximately caused by such
entry, said Owner or utility company shall repair the same at
its respective expense,-
(c) Whenever sanitary sewer, water or gas connec-
tions, television cables, electricity or telephone lines are
installed within the Project, and said connections, cables
and/or lines serve more than one (1) Lot, the Owner of each
Lot served by said connections, cables and/or lines shall be
50019.008-4200.FCM 120399 -15-
entitled to the full use and enjoyment of such portions of
same as service his Lot;
(d) In the event of a dispute between Owners re-
specting the repair or rebuilding of the aforesaid connec-
tions, cables and/or lines, or the sharing of the cost
thereof, upon written request of one (1) of such Owners ad-
dressed to the Association, the matter shall be submitted to
the Board who shall decide the dispute, and the decision of
the Board shall be final and conclusive on the Owners;
(e) Easements over the Project for the installation
and maintenance of electric and telephone lines, water, gas,
drainage and sanitary sewer connections and facilities, and
television antenna cables and facilities, all as shown on the
recorded map of the Project and as may be hereafter required
or needed to service the Project, are hereby reserved by
Declarant, together with the right to grant and transfer the
same; and
. (f) Each Lot granted to an Owner is subject to all
easements for utility installation and maintenance, storm
drains and other purposes, as more particularly shown on the
recorded subdivision map(s) for the Project and any improve-
ment plans for the Project. Any installation or construction
of landscaping or structures within said easement areas may be
done only in accordance with the terms, conditions and
provisions of said easements.
'•?Section 8. Easements for Maintenance of the Common
Area. There is hereby created, established and granted a nonexclu-
sive easement in favor of the Association for ingress, egress and
access on, over and across those portions of the Lots in the
Project as reasonably required by the Association to perform its
maintenance obligations for the Project and Common Area, as more
particularly set forth in the Article herein entitled "Powers and
Duties of the Association." In the event it becomes necessary for
the Association to enter upon any Lot for purposes of: (a) main-
taining the Common Area; or (b) bringing an Owner and/or his Lot
into compliance with this Declaration in accordance with the provi-
sions set forth herein, the Association, and its duly authorized
agents and employees, shall have the right, after reasonable notice
to the Owner and at a reasonable hour of the day, to enter upon
such Owner's Lot for the performance of such work (the Association
however, shall have no obligation to perform such maintenance).
Such entry shall be made with as little inconvenience to the Owner
as is practicable, and in the event that any damage shall be
proximately caused by such entry, the Association shall repair the
same at its expense. Notwithstanding the foregoing, no notice of
entry is required in the event of an emergency.
50019.008-4200.FCM 120399 -16-
Section 9. Easements for Clustered Mailboxes. In or-
der to comply with the various requirements of the City and the
United States Postal Service, kiosk mailboxes may be installed on
certain Lots within the Project. Easements are hereby created,
granted and established on and over the affected Lots, if any, in
favor of all Owners and the United States Postal Service for de-
livery and deposit of mail.
Section 10. Easements Over Sidewalks. There are hereby
created and reserved non-exclusive reciprocal appurtenant ease-
ments, granted in favor .of" all Owners, the members of their
families, their lessees and tenants and/or their respective guests
and invitees, for pedestrian access, use and enjoyment on, over and
across all sidewalks located on portions of Lots immediately
adjacent to streets within the Project, if any.
Section 11. Easements for Drainage. There are hereby
created, granted and reserved over each Lot in the Project ease-
ments for drainage according to the patterns for drainage created
by the grading and construction plans for the Project approved by
the City, as well as according to the actual, natural and existing
patterns for drainage (including, but not limited to, easements to
accommodate any "cross-lot drainage," whereby water runoff from one
[1] or more contiguous Lots [or Common Area] drains across another
Owner's Lot on the surface, e.g., drainage swale originally
installed by Declarant). Each Owner covenants and agrees that he
shall not obstruct or otherwise interfere with said drainage
patterns of waters from adjacent Lots in the Project over his Lot,
or, in the alternative, that in the event it is necessary and
essential to alter said drainage pattern for the, protection and use
of his Lot, he will make adequate provisions for proper drainage
and obtain all appropriate approvals from the respective governmen-
tal authorities, and the Architectural Control Committee.
Section 12. Easement for Area Drains/Pipes/Swale.
Declarant hereby establishes, reserves and grants nonexclusive
reciprocal easements over the Lots and Common Area for drainage
purposes to accommodate the drainage system, including, but not
limited to area drains, swales, and pipes, originally installed by
Declarant pursuant to the precise grading and construction plans.
The Lot Owner served by said drainage system shall be responsible
to maintain and preserve said system in an operating condition to
ensure proper drainage on, over, under, across and through the yard
area of his or her Lot in accordance with the established drainage
patterns created by the precise grading plans for the Project, and
shall bear the cost of the maintenance, repair or replacement
associated with the drainage system which affects his or her Lot.
No Owner shall alter or remove the drainage system or modify the
grade of the yard area in his or her Lot without the express
written consent of the Board or Architectural Control Committee.
In the event any- portion of the drainage system is damaged,
destroyed or not properly maintained, any Lot Owner affected by
50019.008-4200.FCM 120399 -17-
such drainage system may cause said repair, restoration or
maintenance work to be completed and shall be entitled to recover
the appropriate expenses from the Lot Owner responsible for such
damage, destruction or improper maintenance. Notwithstanding the
foregoing, if any portion of the drainage system is damaged or
destroyed as a proximate result of any act or omission of any
Owner, or any member of his family, guests, tenants, lessees and/or
invitees (without regard to fault), such Owner shall immediately
repair and/or rebuild such drainage system, and shall bear all of
the costs thereof, including any cost and/or expense related to
personal injury or property damage to any person, Residence, or Lot
in the Project.
Section 13. Easements for Construction and Sales. De-
clarant hereby expressly reserves for itself, for the benefit of
its agents, employees and contractors, and for the benefit of its
successors and assigns, until all Lots in the Annexation Property
and Carlsbad Tract 96-02 are sold (and escrows closed), nonexclu-
sive easements for access, ingress and egress in, on, over, and
across Carlsbad Tract 96-02 and the Annexation Property as
necessary to construct the Improvements, and further reserves the
exclusive right to carry on normal sales activity, including the
operation of a models complex and sales office, and the display of
promotional signs and exhibits in connection with the sale or lease
of Lots in the Project.
Section 14. Reservation of Construction Rights by De-
clarant . In order that the Project be completed and established as
a planned residential community, nothing in this Declaration shall
limit the right of Declarant to: (a) complete construction of any
Improvements in the Project; (b) redesign or otherwise modify the
Improvements owned by Declarant; (c) construct such additional
Improvements on any portion of the Project owned by Declarant; or
(d) otherwise control all aspects of constructing the Project or
selling or leasing of Lots in the Project. Furthermore, nothing in
this Declaration shall limit the right of Declarant to establish
additional licenses, easements and rights-of-way in favor of
Declarant, utility companies or others as may, from time to time,
be reasonably necessary for the development of the Project. The
foregoing rights established and reserved by Declarant shall be
subject only to the applicable regulations and requirements of the
City and the DRE. The foregoing rights of Declarant may be
assigned to any successor to all or part of Declarant's interest in
the Property and Annexation Property by an express assignment re-
corded with the County Recorder.
50019.008-4200.FCM 120399 -18-
Section 15. Title to the Common Area.
(a) Transfer of Title to Common Area. Declarant
hereby covenants, for itself and its successors and assigns,
that it will convey to the Association fee simple title to, or
a nonexclusive easement (e.g., front yard and slope easements)
in, as appropriate, the Common Area, free and clear of all
liens and encumbrances (i.e., if the Common Area title being
conveyed is fee simple), subject to the Protective Covenants
set forth in this Declaration or which are of record at the
time of the conveyance. Declarant will similarly convey to the
Association, from time to time, in fee simple or by easement,
any Common Area located in the Annexation Property which is
designated in this Declaration or in any Notice of Annexation
for conveyance to the Association.
(b) Completion of Common Area. In the event that
Improvements proposed to be constructed on any portion of the
Common Area so annexed to the Project have not been completed
prior to the first close of escrow for a Lot in the property
being annexed or subject to this Declaration, as evidenced by
a "Notice of Completion" recorded in the Office of the County
Recorder, then the completion of such Improvements shall be
assured in accordance with Section 11018.5 of the California
Business and Professions Code, or any similar statute hereaf-
ter enacted.
(c) Commencement'of Association Responsibilities.
The Association's responsibility to maintain the Common Area
conveyed to the Association shall commence with the recorda-
tion of the grant deed conveying the Common Area. The Associa-
tion shall not interfere with the performance of any warranty
or other contractual maintenance obligations which the
contractor or subcontractors of Declarant may be bound to
perform. Notwithstanding the foregoing, maintenance performed
by such contractors and subcontractors of Declarant shall not
serve to postpone the commencement of Regular Assessments
pursuant to this Declaration, nor entitle an Owner to claim
any offset or reduction in the amount of such Regular Assess-
ments .
(d) Character of Improvements to Common Area. The
nature, design, quality and quantity of all Improvements to
the Common Area shall be determined by Declarant, in its sole
discretion. The Association shall be obligated to accept title
to any Common Area, and* undertake all maintenance responsibil-
ities for the Common Area upon the first to occur of conveying
title and/or tendering maintenance responsibilities by
Declarant to the Association, pursuant to Subparagraphs (a)
and (c) above.
50019.008-4200.FCM 120399 -19-
(e) Disputes. In the event that a dispute arises
between Declarant and the Association with respect to the
nature, design, quality or quantity of the Improvements, or
the acceptance of maintenance responsibilities therefor,
resolution of the dispute shall be submitted to arbitration
and conducted in accordance with the then existing rules for
commercial arbitration of the American Arbitration Associa-
tion. In the event of a demand for arbitration, Declarant
shall remit any fee required to initiate the arbitration.
However, the costs of arbitration, including attorneys' fees
of the prevailing party, shall be borne in such proportions as
the arbitration panel shall determine.
Section 16. Reservation of Common Area Easements.
Declarant hereby reserves the right to grant nonexclusive easements
over the Common Area in favor of Owners of any Annexation Property
which is annexed to the Project pursuant to this Declaration, and,
upon the recordation of a Notice of Annexation affecting the
Annexation Property, the Owners described in this Declaration shall
automatically obtain nonexclusive easements over all Common Area
which is a part of said Annexation Property.
ARTICLE IV *
THE ASSOCIATION
Section 1. Membership. Every person or entity who or
which is an Owner as defined hereinabove shall be a Member of the
Association. The foregoing, however, is not intended to include
persons or entities who hold an interest in a Lot in the Project
merely as security for the performance of an obligation. All
memberships in the Association shall be appurtenant to the Lot
owned by each Member, and memberships in the Association shall not
be assignable, except to the person or entity to whom the title to
the Lot has been transferred, as provided in Section 7 hereinbelow.
Ownership of such Lot shall be the sole qualification for member-
ship in the Association. The memberships in the Association shall
not be transferred, pledged or alienated in any.way, except upon
the transfer of title to said Lot, and then only to the purchaser
or Mortgagee of such Lot. Any attempt to make a prohibited member-
ship transfer shall be void and will not be reflected in the books
of the Association.
Section 2. Voting Rights. The Association shall have
two (2) classes of voting membership, as follows:
(a) Class A. Class A Members shall be all Owners,
with the exception of the Declarant until such time as the
Class B Membership terminates, and shall be entitled to one
(1) vote for each Lot owned. When more than one (1) person
holds an interest in any Lot, all such persons shall be Mem-
50019.008-4200.FCM 120399 -20-
bers. The vote for such Lot shall be exercised as they de-
termine among themselves, but in no event shall more than one
(1) vote be cast with respect to any Lot.
(b) Class B. The Class B Member shall be the
Declarant and shall be entitled to three (3) votes for each
Lot owned in the Project upon which Declarant is then paying
the appropriate monthly Assessments provided for hereinbelow.
The Class B membership shall cease and be converted to Class
A membership upon the happening of any of the following
events, whichever occurs earliest:
(1) The second anniversary of the first close
of escrow for the sale of a Lot pursuant to the original
issuance by the DRE of the most recently issued Final
Subdivision Public Report for a Phase of the Project;
(2) The fourth anniversary of the first close
of an escrow for the sale of a Lot pursuant to the
original issuance by the DRE of a Final Subdivision
Public Report for the Property; or
(3) December 31, 2005.
Any action by the Association which must have the ap-
proval of the membership of the Association before being under-
taken, shall require the vote or written assent of both a majority
of the Class B membership as well as a majority of the Class A
membership, so long as there are two (2) outstanding classes of
membership, unless a specific provision of this.. Declaration or the
By-Laws or Articles of the Association requires (i) the approval of
a greater percentage of the voting membership, (ii) a vote by
members other than Declarant, or (iii) a specific approval
percentage of all the members. Notwithstanding the foregoing, any
action by the Association pursuant to the Article contained herein
entitled "Enforcement of Bonded Obligations" shall only require a
majority of the voting power of the Owners, other than Declarant.
Declarant shall have the right at any time, and from time to time,
to commence the payment of Regular Assessments on all Lots within
a Phase prior to the close of the first escrow therein in order to
have the voting rights with respect to such Lots.
Section 3. Special Voting Procedures For Election to
the Board. The Declarant shall be entitled to solely elect a
majority of the members of the Board until the first to occur of
the following events:
(a) The election of the Board immediately following
the close of escrow by Declarant of at least One Hundred and
Twenty-Nine (129) Lots in the Project; or
,»
(b) December 31, 2005.
- 9150019. 008-4200. FCM 120399 ^ -1-
In the event Declarant shall not have sold and closed escrows for
at least one Hundred and Twenty-Nine (129) Lots by December 31,
2005, Declarant's right to elect a majority of the members of the
Board shall be automatically extended until the aforesaid number of
Lots have been sold, but in no event later than December 31, 2006.
Section 4. Vesting of Voting Rights. The voting
rights attributable to any given Lot in the Project as provided for
herein shall not vest until the Assessments provided for herein-
below have been levied by the Association against said Lot.
Section 5. Adjustment of Voting Rights. The voting
rights in the Association shall be adjusted on the first day of the
month immediately following the first close of an escrow for the
sale of a Lot in a subsequent Phase of the Project.
Section 6. Suspension of Voting Rights. The Board
shall have the authority to suspend the voting rights of any Member
to vote at any meeting of the Members for any period during which
such Owner is delinquent in the payment of any Assessment,
regardless of type, it being understood that any suspension for
nonpayment 'of any Assessment shall not constitute a waiver or
discharge of the Member's obligation to pay the Assessments pro-
vided for in this Declaration.
Section 7. Transfer. The Association membership held
by any Owner of a Lot shall not be transferred, pledged or alien-
ated in any way, except as incidental to the sale of such Lot, and
the membership shall be automatically transferred upon the sale of
such Lot. In the event of such sale, the Association membership may
only be transferred, pledged or alienatfed to the bona fide
purchaser or purchasers of the Lot, or to the Mortgagee (or third
party purchaser) of such Lot upon a foreclosure sale, deed in lieu
or other remedy set forth in the mortgage. Any attempt to make a
prohibited transfer is void and will not be reflected upon the
books and records of the Association. The Association may levy a
reasonable transfer fee against new Owners and their Lots (which
fee shall be a Compliance Assessment chargeable to such new Owner)
to reimburse the Association for the actual administrative cost of
transferring the memberships to the new Owners on the records of
the Association.
Section 8 . Proxies. Votes may be cast in person or by
proxy. Proxies must be filed with the Secretary before the ap-
pointed time for each meeting. Every proxy shall be revocable and
shall automatically terminate upon the earliest of the following:
(a) the conveyance by the Owner of his Lot; (b) the date of auto-
matic termination, if any, specified in the proxy, but not to ex-
ceed three (3) years from the date of issuance of the proxy; or (c)
eleven (11) months from the date of issuance of the proxy, if no
automatic termination date is specified in the proxy. Any form of
proxy or written ballot distributed to the membership of the
- "~) 050019.008-4200.FCM 120399 ^ ~
Association shall afford an Owner the opportunity to specify a
choice between approval and disapproval of each matter or group of
matters to be acted upon at the meeting for which said proxy was
distributed, except it shall not be mandatory that a candidate for
election to the Board be named in the proxy or written ballot. The
proxy or written ballot shall provide that, where the Owner
specifies a choice, the vote shall be cast in accordance with that
choice. In addition, the proxy shall also identify the person or
persons authorized to exercise the proxy and the length of time it
shall be valid.
Section 9. Record Dates. For the purposes of
determining Members entitled to notice of any meeting, to vote or
to .exercise any other rights with respect to any lawful action, the
Board may fix in advance record dates as provided in the By-Laws.
ARTICLE V
POWERS AND DUTIES OF THE ASSOCIATION
Section 1. Management Body. The Association is hereby
designated as the management body of the Project. The Members of
the Association shall be the Owners in the Project, as provided
herein, and the affairs of the Association shall be managed by a
Board of Directors, as more particularly set forth in the By-Laws.
The initial Directors shall be appointed by the Declarant.
Thereafter, the Board shall be elected as provided in said By-Laws.
Section 2. Powers. The Board, for and on behalf of
the Association, shall have the right and power to do all things
necessary to conduct, manage and control the affairs and business
of the Association. Subject to the provisions of the Articles, the
By-Laws and this Declaration, the Board shall have all general
powers authorized under the California Corporations Code for non-
profit, mutual benefit corporations, and shall have, but not be
limited to, the following specific powers:
(a) Enforce the provisions of this Declaration
(including, but not limited to, the ability to record a notice
of noncompliance or violation) , and all contracts or any
agreements to which the Association is a party;
(b) Acquire title, manage, maintain, repair and
replace all Common Area and Improvements located thereon,
including all personal property, in a neat, clean, safe and
attractive condition at all times, and to pay all utilities,
gardening and other necessary services for the Common Area,
all as more specifically set forth in the Article herein
entitled "Repair and Maintenance";
50019.008-4200.FCM 120399 -23-
(c) Maintain fire, casualty, liability and worker's
compensation coverage, fidelity bond coverage and other
insurance coverage pursuant to the terras of that Article
herein entitled "Insurance";
(d) Obtain, for the benefit of the Common Area, all
commonly metered water, gas and electric services, and may
provide for refuse collection and cable (or CATV) television
service;
(e) Grant easements or licenses, where necessary,
for utilities and sewer facilities over, on and across the
Common Area to serve the Project;
(f) Pay all taxes and special assessments which
would be a lien upon the entire Project or the Common Area,
and to discharge any lien or encumbrance levied against the
entire Project or the Common Area;
(g) Levy and collect Assessments on the Owners of
all Lots in the Project in which Assessments have commenced,
and enforce payment of such Assessments in accordance with the
terms and provisions set forth in the Article herein entitled
"Effect of Nonpayment of Assessments: Remedies of the Associa-
tion" ;
(h) Pay for reconstruction of any portion of the
Common Area damaged or destroyed; *
(i) Employ and retain a professional manager and/or
management company to perform all or any portion of the duties
and responsibilities of the Board and engage such other
personnel (including attorneys, budget preparers, and accoun-
tants) as necessary for the operation of the Project and
administration of the Association;
(j) Enter into any Lot when necessary in connection
with maintenance or construction for which the Association is
responsible;
(k) Contract with Declarant, its successors or
assigns, for the purpose of entry into a maintenance and/or
subsidy agreement, ma'de by and between Declarant and the
Association, for the purpose of temporarily reducing and/or
abating the financial obligations of Owners in the Project;
(1) Purchase such other labor, services, materials,
supplies and the like, as needed for the proper maintenance of
the Common Area and/or proper operation of the Association;
(m) Adopt reasonable Rules and Regulations con-
cerning the maintenance, improvement, use and/or occupancy of
50019.008-4200.FCM 120399 -24-
any portion of the Project, provided the same do not violate
any conditions or requirement of any Entitlement From City to
which the Project is subject;
(n) Grant exclusive easements to Owners over por-
tions of the Common Area;
(o) Execute lot line adjustments (and corresponding
deeds), enter into a maintenance and/or other agreement with
Declarant or a third party, grant fee title to or easements
over the Common Area, to' Declarant or a third party, and/or
receive fee title to or an easement over real property owned
by Declarant or a third party as reasonably necessary due to
those conditions in the field where it is not readily apparent
where Lot lines are located and the respective party's
maintenance responsibilities commence and end, and such
adjustments, deeds and/or agreements will promote a clearly
defined and uniform maintenance plan by the respective
parties;
, (p) Grant easements or licenses to any public
agency, governmental entity or utility, where necessary, for
utilities and sewer facilities on, over and across the Common
Area to serve the Project for purposes consistent with the use
and enjoyment of the Common Area;
(q) Subject to compliance with Section 1354 of the
California Civil Code, as same may be amended from time to
time, to institute, defend, settle or intervene on behalf of
the Association in litigation, arbitration, mediation, or
administrative proceedings in matta-rs pertaining to (i)
enforcement of the Declaration, Rules and Regulations and By-
Laws; (ii) damage to the Common Area; (iii) damage to the
Residences which arises out of, or is integrally related to,
damage to the Common Area that the Association is obligated to
maintain or repair; and
(r) Perform any and all other acts and things that
a nonprofit, mutual benefit corporation organized under the
laws of the State of California is empowered to do, which may
be necessary, convenient or appropriate in the administration
of its affairs for the specific purposes of meeting its duties
as set forth in this Declaration.
Section 3. Duties. Notwithstanding the Association's
obligations, as more specifically set forth in the Article herein
entitled "Repair and Maintenance, " the Board shall perform and
execute the following duties for and on behalf of the Association:
(a) Own, maintain and operate the Common Area, for
the common use and benefit of all Owners in the Project;
50019.008-4200.FCM 120399 -25-
(b) Provide, water, sewer, gas, electricity, gar-
bage and trash collection, and other necessary utility ser-
vices for the Common Area;
(c) Provide insurance for the Association and its
Members in accordance with the provisions of the Article
hereinbelow entitled "Insurance," and distribute notices
thereof as required by law;
(d) Accept, as part of the Project, all property
included in or annexed to the Project, in accordance with the
terms and provisions of this Declaration, and to accept all
Owners as Members of the Association. In addition, the
Association shall accept all Common Area, conveyed, leased or
otherwise transferred to it, if any, by Declarant, its
successors or assigns, or appropriate governmental agency;
(e) Maintain and repair all portions of the Common
Area in a neat, clean, safe, attractive, sanitary and orderly
condition at all times and paint, maintain, repair and replace
all of, the Common Area Improvements so as to keep same in a
neat, clean, safe, attractive, sanitary and orderly condition
at all times. Without limiting the generality of the forego-
ing, the Association shall be responsible for maintaining the
private streets and related systems in a condition comparable
to the condition initially approved by the City. In the event
any maintenance or repairs to the Common Area are required due
to the willful or negligent acts or omissions of an Owner or
Owners, the Association shall levy the cost of such mainte-
nance and repair as a Compliance Assessment against the
responsible Owner(s);
(f) In addition to all other provisions set forth
herein respecting the maintenance of the Common Area, maintain
all private streets in the Project, private sewers, slopes,
recreational equipment, storm drains, and Common Area lighting
facilities, in a condition comparable to the condition ini-
tially approved by the City;
>
(g) Pay all real and personal pfoperty taxes and
Assessments which the Association is required to pay for
pursuant to the terms and provisions of this Declaration or by
law, unless separately assessed to Owners; provided, however,
that it shall be the obligation of each Owner to pay his
respective share of the tax assessment levied on the Project
prior to separate assessments by the Tax Assessor pursuant to
the applicable provisions of the California Revenue and
Taxation Code;
(h) Contract for any other material, supplies,
furniture, labor, services, maintenance, repairs, structural
alterations and insurance which the Association is required to
50019.008-4200.PCM 120399 -26-
pay for pursuant to the terms and provisions of this Dec-
laration or by law;
(i) Cause financial statements for the Association
to be regularly prepared and copies distributed to each Member
of the Association, regardless of the number of Members or the
amount of assets of the Association:
(1) A pro forma operating statement (budget)
for each fiscal year shall be distributed not less than
forty-five (45) days nor more than sixty (60) days prior
to the beginning of the fiscal year, and shall contain
the following information:
i) An itemized estimate of the Associa-
tion's revenue and expenses, determined on an
accrual basis;
ii) A summary, printed in bold type, of
the current status of the Association's reserves,
I based upon the most recent review or study conduct-
ed pursuant to California Civil Code Section 1365.5
("Study"), as may be amended, from time to time,
setting forth the following:
a) The current estimated replace-
ment costs, estimated .^remaining life and the
estimated useful life of the Common Area,
together with an explanation of the methods of
funding being utilized by .the Association to
defray the costs of future repairs, replace-
ments or additions to the Common Area;
b) As of the end of the fiscal
year for which the Study was prepared, the
current estimate of the amount of cash re-
serves necessary to repair, replace, restore
or maintain the major Improvements to the
Common Area;
c) As of the end of the fiscal
year for which the Study was prepared, the
accumulated cash reserves .actually set aside
to repair, replace, restore or maintain such
major Improvements to the Common Area; and
d) The percentage that the current
amount of accumulated cash reserves which have
been set aside is of the current estimated
amount of cash reserves which will be neces-
sary.
50019.008-4200.PCM 120399 -27-
iii) A general statement setting forth
the procedures utilized by the Association to cal-
culate and establish reserves to defray the costs
of future repairs, replacements or additions to the
Common Area Improvements; and
iv) A statement as to whether the Board
has determined or anticipates that the levy of one
(1) of more Special Assessments will be required to
repair, replace or restore any major Improvements
to the Common Area, or to provide adequate reserves
therefor.
Notwithstanding the foregoing, in lieu of
distributing the pro forma budget required hereinabove,
the Board may elect to distribute a summary of the pro
forma budget to all Members with a written notice, in at
least 10-point bold type on the front page, that the pro
forma budget is available at the business office of the
Association, or at another suitable location within the
Project, and that copies will be provided upon request
and at the expense of the Association. If any Member
requests that a copy of the pro forma budget required
herein be mailed to said Member, the Association shall
provide the copy to the Member by first-class mail at the
expense of the Association, and mailed within five (5)
days of the receipt of said request;
(2) A balance sheet as of an accounting date
which is the last day of the month closest in time to six
(6) months from the date of closing for the first sale of
a Lot, and an operating statement for the period from the
date of the first closing to the said accounting date,
shall be distributed within sixty (60) days after the
accounting date. This operating statement shall include
a schedule of Assessments received, and receivable,
identified by the number of the Lot and the name of the
person or entity assessed;
(3) An annual report consisting of the fol-
lowing shall be distributed within one hundred twenty
(120) days after the close of the fiscal year:
i) A balance sheet as of the last day
of the Association's fiscal year;
ii) An operating (income) statement for
the fiscal year;
iii) A statement of changes in financial
position for the fiscal year; and
50019.008-4200.FCM 120399 -28-
iv) Information, if any, required to be
reported pursuant to Sections 8322 and 1365 of the
California Corporations and Civil Codes, respec-
tively, as same may be amended from time to time.
This annual report shall ordinarily be prepared by a
licensee of the California Board of Accountancy, in
accordance with generally accepted accounting principles,
for any fiscal year in which the gross income of the
Association exceeds Seventy-Five Thousand Dollars
($75,000.00). However, if for any reason the report is
not prepared by a licensee of the California Board of
Accountancy, said report shall be accompanied by a
certificate from an authorized officer of the Association
that the statements were prepared without audit from the
books and records of the Association;
(4) A statement of the Association's policies
and practices in enforcing its remedies against Members
for nonpayment of Assessments, as set forth in the
Airticle herein entitled "Effect of Nonpayment of Assess-
ments: Remedies of the Association," which shall be dis-
tributed within sixty (60) days prior to the beginning of
the fiscal year; and .*
(5) A summary of the Association's general
liability insurance policy, earthquake and flood insur-
ance policy, if one has been issued, and liability
coverage policy for the Board, which includes statements,
a summary, and information required under California
Civil Code Section 1365(e), as same may be amended from
time to time. Currently, such items of disclosure
include the following:
i) general liability, earthquake and
flood insurance policies: (1) the name of the
insurer; (2) the type of insurance; (3) the policy
limits of the insurance; and (4) the insurance
deductibles>
The Association shall, as soon as reasonably practical,
notify its Members by first-class mail if any of the
policies described in Subparagraph (i) above have lapsed,
been canceled, and are not immediately renewed, restored
or replaced, or if there is a significant change, such as
a reduction in coverage or limits, or an increase in the
deductible for any of those policies. If the Association
receives any notice of nonrenewal of a policy described
in the subparagraph above, the Association shall immedi-
ately notify its Members if replacement coverage will not
be in effect by the date the existing coverage will
lapse. To the extent: the information noted above is
50019.008-4200.FCM 120399 -29-
described within the respective insurance policies, the
Association may distribute such information to the
Members and be in compliance with the disclosure require-
ments of the referenced Civil Code Section. Notification
regarding cancellation or policy renewals must comply
with Civil Code Section 1365 (e) (2), as same may be
amended from time to time. Currently, the summary
distributed pursuant to Subparagraph (i) shall contain,
in at least 10-point boldface type, the following
statement: "This summary of the Association's policies
of insurance provides only certain information, as
required by Subdivision (e) of Section 1365 of the
California Civil Code, and should not be considered a
substitute for the complete policy terms and conditions
contained in the actual policies of insurance. Any
Association Member may, upon request and provision of
reasonable notice, review the Association's insurance
policies and, upon request and payment of reasonable
duplication charges, obtain copies of those policies.
Although the Association maintains the policies of
insurance specified in this summary, the Association's
policies of insurance may not cover your property,
1 including personal property or real property improvements
to or around your dwelling, or personal injuries or other
losses that occur within or around your dwelling. Even
if a loss is covered, you may nevertheless be responsible
for paying all or a portion of any deductible that
applies. Association Members should consult with their
individual insurance broker or agent for appropriate
additional coverage."
(j) The Bo^rd shall review on a quarterly basis,
the following:
i) A current reconciliation of the
Association's operating accounts;
ii) A current reconciliation of amounts
collected as reserves;
iii) The current year's actual amounts
collected as reserves and expenses compared to the
current year's budget;
iv) An income and expense statement for
the Association's operating and reserve accounts;
and
v) The most current account statements
prepared by the financial institutions where the
Association maintains its operating and reserve
accounts.
50019. 008-4200. PCM 120399 "30-
Withdrawal of funds from the Association's reserve
account shall require the signature of either: (i) two
(2) members of the Board; or (ii) one (1) member of the
Board and an officer of the Association who is not also
a member of its Board. As used in this Section, "reserve
account" means moneys that the Board has identified from
its annual budget for use to defray the future repair or
replacement of, or additions to, those major components
of the Common Area which the Association is obligated to
repair or replace on a periodic basis, rather than on a
regular annual basis. Except as may otherwise be allowed
pursuant to Civil Code Section 1365.5(c), the Board shall
not use any funds collected and budgeted as "reserve"
moneys for any costs and/or expenses that are not related
to repair and/or replacement costs for those elements of
the Common Area that must be repaired and/or replaced on
a periodic basis. Notwithstanding the foregoing, tempo-
rary transfer of funds may occur in compliance with Civil
Code Section 1365.5, as may be amended from time to time.
In the event reserve funds are temporarily transferred to
ppy for litigation, the Board shall comply with the
disclosure and notification requirements of Civil Code
Section 1365.5(d), as may be amended from time to time.
(k) At least ortce every three (3) years, cause a
study of the reserve account requirements of the Project to be
conducted if the current replacement value of the major
components which the Association is obligated to repair,
replace, restore or maintain is equal to or greater than one-
half (1/2) of the gross Association budget -for any fiscal year
of the Association. In connection with such study, the Board
shall cause to be conducted, if required by law, a visual
inspection of the accessible areas of the major components of
the Common Area which the Association is obligated to repair,
replace, restore, or ..maintain. The Board shall consider and
implement, as the Board determines appropriate, any necessary
adjustments to the Board's analysis of the reserve account
requirements as a result of such review. The reserve study
shall consider and include, at a minimum, the requirements set
forth in Section 1365. 5-(e) of the California Civil Code, as
the same shall be amended, from time to time;
(1) Assume and pay out of the Assessments provided
for hereinbelow all costs and expenses incurred by the
Association in connection with the performance and execution
of all of the aforesaid powers and duties, and any other
powers and duties the Association may assume as provided for
in Section 4 hereinbelow;
(m) Formulate, adopt and enforce such Rules and
Regulations as it may deem proper for the operation of the
Common Area and use of the Lots, as more particularly de-
50019.008-4200.PCM 120399 -31-
scribed herein. Notice of adoption of any such Rules and
Regulations and of any change, amendment or repeal thereof,
shall be given in writing to each Member and shall be on file
in the principal office of the Association. In the event of
any conflict between such Rules and Regulations and this
Declaration, this Declaration shall prevail;
(n) Enforce all applicable provisions of this
Declaration, the Articles, By-Laws and such Rules and Regu-
lations of the Association and Architectural Control Commit-
tee, and of all other, documents pertaining to the ownership,
use, management and control of the Project;
(o) Give notices in writing to FHLMC, FNMA and
GNMA, and other lenders and investors participating in the
financing of the sale of Lots in the Project, as required
herein;
(p) Within ten (10) days of the mailing or delivery
of a written request from an Owner, provide said Owner with a
copy of this Declaration and the By-Laws and Articles for the
Association, together with a pro forma budget, an insurance
policy summary, a true statement in writing as to the amount
of any delinquent Assessments, penalties, attorneys' fees and
other charges therein as provided by this Declaration or other
management documents of the Board as of the date of such
request, the most recent financial statement, the
Association's current Regular and Special Assessments, and any
change in the Association's current Assessments and fees which
have been approved by'* the Board but have jiot yet become due
and payable as of the date the disclosure is provided pursuant
to this Section. The Board may impose a fee for providing the
foregoing, but in no event shall the fee exceed the actual
cost to prepare and reproduce the requested documents. In
addition, the Board shall make available, as required by law,
during normal working business hours, upon request under
reasonable circumstance, to any prospective purchaser of a
Lot, any Owner of a Lot, any first Mortgagee and the hold-
er (s) , insurer(s) and guaramtor(s) of a first Mortgage of any
Lot, current copies of this Declaration, the Articles, the By-
Laws, the Rules and Regulations governing the Lot, and all of
the books, the membership register, including mailing ad-
dresses and telephone numbers, records and financing state-
ments of the Association; and
i
(q) Elect the officers of the Association and fill
any vacancies on the Board, except if such vacancy is created
by the removal of a Director.
Section 4. Discretionary Powers. The Board, at its
option, may assume, perform and execute the following powers and
duties for and on behalf of the Association:
50019. '008-4200. FCM 120399 -32-
(a) Retain the services of a manager for the
Project and provide such other personnel as the Association
deems necessary and proper to assist in the operation of the
Association and/or management of the Common Area regardless of
whether such other personnel are employed directly by the
Association or otherwise, and enforce the Entitlements From
City relating directly or indirectly to the development of the
Project;
(b) Remove or replace any Improvement that extends
into the Common Area under authority of an easement when
access to a utility line underneath such Improvement is
requested by any utility company; provided, however, that the
cost shall be assessed against the Owner of the Lot involved
as a Compliance Assessment if said Owner caused the Improve-
ment to be so placed in the Common Area without legal right to
do so; >t.
(c) Incur any liability or pay any costs or ex-
penses for a single Lot or Owner thereof; provided, however,
that in the event the Association does incur any such lia-
bility or pay any such costs or expenses, the amount thereof
shall be specially assessed to the Owner of such Lot as a
Compliance Assessment; provided further, however, that nothing
herein shall permit the Association to assess the Owners for
any new Improvements to the Common Area, except as otherwise
provided in this Declaration;
(d) Subject to the limitations set forth in this
Article, contract for any other material,- furniture, labor,
services, maintenance, repairs, structural alterations or
insurance, or pay any taxes or Assessments which, in the
opinion of the Board/ shall be necessary or proper for the
operation of the Common Area, for the benefit of the Owners or
for the enforcement of this Declaration; and
(e) Enter into a maintenance or subsidy agreement
with Declarant, at Declarant's sole discretion, for the
purpose of temporarily reducing and/or abating the financial
obligation of Owners in the Project.
Section 5. Repair of Willful Damage to Common Area.
Notwithstanding the Association's duty to maintain the Common Area,
in the event that the maintenance, repair or replacement of any
element of such Areas becomes necessary due to the willful or
negligent acts or omissions of any Owner, his family, guests or
invitees, after prior Notice and Hearing, the Board shall assess
the cost of such maintenance, repair and/or replacement as a
Compliance Assessment against the Lot owned by such Owner.
Section 6. Delegations of Duties. In the event that
the Association shall delegate any or all of its duties, powers or
50019.008-4200.PCM 120399 -33-
functions to any person, corporation or firm to act as manager,
neither the Association nor the members of its Board shall be
liable for any omission or improper exercise by the manager of any
such duty, power or function so delegated.
Section 7. Right of Entry for Emergency. The Board,
any person authorized by the Board, Declarant (so long as it owns
an interest in the Project), or any Owner may enter any Lot in the
event of any emergency involving illness or potential danger to
life or property. Such entry shall be made with as little inconve-
nience to the Owner as is .practicable, and in the event that any
damage shall be proximately caused by or result from said entry,
the Association and/or Owner shall repair the same at its expense.
Section 8. Right of Entry for Repairs. Except as
otherwise provided herein, the Board, or any person authorized by
the Board, shall have the right (but not the obligation) to enter,
upon reasonable notice, any Lot to effect necessary repairs which
the Owner has failed to perform or which are necessary in connec-
tion with the repairs to the Common Area or an adjoining Lot. Such
entry shall,be made with as little inconvenience to the Owner as is
practicable', and in the event that any damage shall be proximately
caused by or result from said entry, the Association shall repair
the same at its expense. *
Section 9. Limitations on Board Action. The Board
shall be prohibited from taking any of the following actions,
except with the vote or written assent of a majority of the voting
power of the Association and a majority of the votes residing in
Members, other than the Declarant or an Own^r who would be a
defendant in any litigation proceedings:
(a) Entering into a contract with a third person,
wherein the third person will furnish goods or services for
the Common Area or the Association for a term longer than one
(1) year, with the following exceptions:
(1) A management contract, the terms of which
have been approved by the Department of Veterans Affairs
and the Federal Housing Administration;
(2) A contract with a public utility company
if the rates charged for the materials or services are
regulated by the Public Utilities Commission; provided,
however, that the term of the contract shall not exceed
the shortest term for which the supplier will contract at
the regulated rate;
(3) Prepaid casualty and/or liability insur-
ance policies of not to exceed three (3) years duration,
provided that the policy permits for short-rate cancella-
tion by the insured;
S0019.008-4200.FCM 120399 ~34~
(4) Agreements for cable television services
and equipment or satellite dish equipment and services of
not to exceed five (5) years duration, provided that the
lessor under the agreement is not an entity in which
Declarant has a direct or indirect interest of ten
percent (10%) or more; and
(5) Agreements for sale or lease of burglar
alarm and fire alarm equipment, installation and services
of not to exceed five (5) years duration provided that
the supplier or suppliers are not entities in which the
Declarant has a direct or indirect ownership interest of
ten percent (10%) or more.
(b) Incurring aggregate expenditures for capital
improvements to the Common Area in any fiscal year in excess
of five percent (5%) of the budgeted gross expenses of the
Association for that fiscal year;
(c) Selling during any fiscal year property of the
Association having an aggregate fair market value greater than
five percent (5%) of the budgeted gross expenses of the
Association for that fiscal year;
(d) Paying compensation to Directors or to officers
of the Association for services performed in the conduct of
the Association's business; provided, however, that the Board
may cause a Director or officer to be 'reimbursed for expenses
incurred in carrying on the business of the Association;
(e) Filling a vacancy on the Board created by the
removal of a Director; or
(f) Except as otherwise allowed under Section 1375
of the California Civil Code, as same may be amended from time
to time, incurring litigation expenses, including without
limitation attorneys' fees, where the Association initiates
legal proceedings or is joined as a plaintiff in legal
proceedings. Such approval shall not be necessary if the
legal proceedings are initiated to (i) enforce the use
restrictions contained herein, (ii) enforce the architectural
control provisions contained herein; or (iii) collect any
unpaid assessments levied pursuant to this Declaration.
Section 10. Licenses, Easements and Rights-of-Way. The
Board, for and on behalf of the Association, is authorized and
empowered to grant such licenses, easements and rights-of-way for
sewer lines, water lines, underground conduits, storm drains and
other public utility purposes over those portions of the Common
Area upon which no building or other structure has been erected as
may be necessary and appropriate for the orderly maintenance,
preservation and enjoyment of the Common Area or for the preser-
50019.008-4200.FCM 120399 -35-
va.tion of the health, safety, convenience and welfare of the Owners
or consistent with development of the Project. Such licenses,
easements and rights-of-way may be granted at any time prior to
twenty-one (21) years after the death of the individuals who have
signed this Declaration and their issue who are in being as of the
date hereof, and the right to grant such licenses, easements and
rights-of-way is hereby expressly reserved. In addition, the Board,
for and on behalf of the Association, may grant exclusive easements
to Owners for use and enjoyment over portions of the Common Area,
as the Board determines is reasonable.
Section 11. New Improvements. Except as otherwise pro-
vided in this Declaration, arid subject to the Article herein
entitled "Architectural Control - Approval," the Association may
construct new Improvements or additions to the Common Area or de-
molish existing Improvements, provided that in the case of any
Improvement, addition or demolition involving a total expenditure
in excess of five percent (5%) of the budgeted gross expenses of
the Association for that fiscal year, the written consent, or vote
of the Owners in the Project as to the maximum total cost therefor
shall first be obtained in accordance,,,- with the appropriate
provisions 'herein, and provided that no Lot shall be altered or
damaged by any such demolition or construction without the consent
of the Owner thereof. The Board shall levy a Special Assessment on
all Owners in the Project for the cost of such work.
Section 12. Association Rules and Regulations. The
Board shall also have the power to adopt, amend and repeal Rules
and Regulations, as it deems reasonable, which may include the
establishment of a system of fines and penalties enforceable as
Compliance Assessments. The Rules and Regulations shall govern such
matters in furtherance of the purposes of the Association,
including, without limitation, the use of the Common Area, signs,
parking restrictions and enforcement, trash collection, minimum
standards for maintenance of Lots consistent with such standards as
may be set forth in this >Declaration or adopted by the Archi-
tectural Control Committee, and any other matter which is within
the jurisdiction of the Association; provided, however, that the
Rules and Regulations may not discriminate among Owners and shall
not be inconsistent with this Declaration, the Articles or By-Laws.
A copy of the Rules and Regulations as they may, from time to time,
be adopted, amended or repealed, or a notice setting forth the
adoption, amendment or repeal of specific portions of the Rules and
Regulations, shall be delivered to each Owner. The Rules and
Regulations shall have the same force and effect as if they were
set forth in and were part of this Declaration, and shall be
binding on the Owners and their successors in interest, whether or
not actually received thereby. The Rules and Regulations, as
adopted, amended or repealed, shall be available at the principal
office of the Association to each Owner upon request. In the event
of any conflict between any such Rules and Regulations and any
other provisions of this Declaration, or the Articles or By-Laws,
50019.008-4200.FCM 120399 -36-
the provisions of the Rules and Regulations shall be deemed to be
superseded.
Section 13_. Nonliability and Indemnification.
(a) General Limitation. Except as specifically
provided in this Declaration, or as required by law, no right,
power or responsibility conferred on the Board or the Archi-
tectural Control Committee, the Articles or the By-Laws, shall
be construed as a duty or obligation charged upon the Board,
the Architectural Control Committee, any member of the Board,
the Architectural Control Committee, or any other officer,
employee or agent of the Association. No such person shall be
liable to any party (other than the Association or a party
claiming in the name of the Association) for injuries or
damage resulting from such person's acts or omissions within
what such person reasonably believed to be the scope of his
Association duties ("Official Acts"), except to the extent
that such injuries or damage result from such person's willful
or malicious misconduct. No such person shall be 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; «*
(b) Personal Liability Limitation. No person who
suffers injury, including, but not limited to, bodily injury
(including, without limitation, emotional distress or wrongful
death) or property damage or loss as a result of the tortious
act or omission of a volunteer Board member or volunteer
Association officer shall recover damages from such Board
member or officer if all the following conditions are satis-
fied:
(1) At the time the act or omission occurred,
the Board member or officer resided in the Project as
either a tenant or an Owner of two (2) or fewer Lots;
(2) The act or omission was performed within
the scope of the Board member's or officer's Association
duties;
(3) The act or omission was performed in good
faith;
(4) The act or omission was not willful,
wanton or grossly negligent; and
(5) The Association maintained and had in
effect at the time the act or omission occurred, and at
the time a claim was made, one (1) or more policies of
50019.008-4200.PCM 120399 -37-
insurance which included coverage for general liability
for the Association and individual liability of officers
and Directors of the Association for negligent acts or
omissions in such capacity, and both types of coverage
were in the amount of at least One Million Dollars
($1,000,000.00).
(c) Indemnification. The Association shall pay all
expenses incurred by, and satisfy any judgment or fine levied
against, any person as a result of any action or threatened
action against such person to impose liability on such person
for his Official Acts, provided that:
(1) The Board determines that such person
acted in good faith and in the manner such person
reasonably believed to be in the best interests of the
Association; and
(2) In the case of an action or threatened
action by or in the name of the Association, the Board
determines that such person acted with such care,
including reasonable inquiry, as an ordinary prudent
person in a like position would use under similar
circumstances.
Any determination of the Board required under this
Section must be approved by a majority vote of a quorum
consisting of Directors who are not parties to the action or
threatened action giving rise to the indemnification. If the
Board fails or refuses to make any such determination, such
determination may be made by the vote or written consent of a
majority of a quorum of the Members of the Association,
provided that the person to be indemnified shall not be
entitled to vote. The*entitlement to indemnification hereun-
der shall inure to the benefit of the estate, executor,
administrator, heirs or devisees of any person entitled to
such indemnification.
ARTICLE VI
ASSESSMENTS
Section 1. Creation of the Lien and Personal Obliga-
tion of Assessments. The Declarant, for each Lot owned within the
Project, hereby covenants, and each Owner of any Lot, by acceptance
of a deed therefor, whether or not it shall be so expressed in such
deed, is deemed to covenant and agree to pay to the Association:
(a) Regular Assessments; (b) Special Assessments for capital im-
provements and such other purposes set forth herein; (c) Compliance
Assessments, including, but not limited to, costs incurred by the
Association in the repair of damage to the Common Area for which
50019.008-4200.FCM 120399 -38-
such Owner was responsible and costs incurred by the Association in
bringing such Owner and his Lot into compliance with this Declara-
tion; (d) Special Benefit Assessments; and (e) such other assess-
ments as the Association may periodically establish. The Regular,
Special and Special Benefit Assessments, together with interest,
costs and reasonable attorneys' fees for the collection thereof,
shall be a charge on the land and shall be a continuing lien upon
the Lot against which each such Assessment is made. Each Regular
Assessment, Special Assessment and Special Benefit Assessment,
together with interest, costs and reasonable attorneys' fees for
the collection thereof, shall also be the personal obligation of
the Owner of such property at the time when the Assessment fell
due. Each Compliance Assessment levied against an Owner, together
with interest, costs and reasonable attorneys' fees for the collec-
tion thereof, shall be the personal obligation of the Owner of the
property at the time of the Assessment. The personal obligation for
delinquent Assessments shall not pass to an Owner's successors in
title unless expressly assumed by them.
Section 2. Purpose of Regular Assessments: Lew and
Collection.. The Regular Assessments levied by the Association shall
be used exclusively to promote the health* safety and welfare of
all Owners in the Project, and to maintain and improve the Common
Area. The Association, by and through the Board, shall levy and
collect Assessments from the Owner of each Lot in the Project in an
amount sufficient to cover all of the Common Expenses incurred by
the Association in connection with the performance and execution of
its powers and duties set forth in this Declaration, the By-Laws
and the Articles. Regular Assessments may be collected on a monthly
installment basis.
Section 3. Regular Assessments - Basis. Regular
Assessments payable to the Association shall be assessed equally
against all Owners of Lots. Each Owner's proportionate share of the
Common Expenses of the Association for any fiscal year shall be a
fraction, the numerator of which shall be the number of Lots owned
by such Owner, and the denominator of which shall be the total num-
ber of Lots in the Project which are subject to assessment. Until
the first day of the fiscal year immediately following the close of
escrow for the sale of the first Lot in the Project to an Owner,
the maximum Regular Assessment shall be as set forth in the budget
reviewed and approved by the DRE. Notwithstanding the commencement
for payment of Regular Assessments, or any other provisions of this
Declaration, Declarant and any other Owner of a Lot which does not
include a structural Improvement for human occupancy shall be
exempt from the payment of that portion of any Assessment (e.g.,
Regular Assessment) which is for the purpose of defraying operating
expenses and reserves directly attributable to the existence and/or
use of such structural Improvements. This exemption shall include,
but shall not necessarily be limited to, that portion of any
Assessment attributable to roof replacement, exterior maintenance,
exterior walkway and carport lighting, refuse disposal, cable
_ "5 Q_50019.008-4200.FCM 120399 ->-'
television and domestic water supplied to Residences. This
exemption shall be in effect only until the earliest to occur of:
(a) the recordation of a notice of completion for the structural
Improvements; (b) the occupation or use of the Residence; or (c)
the completion of all elements of the Lot which the Association is
obligated to maintain, if any. Declarant and any Owner shall also
be exempted from the payment of that portion of any Assessment
which is for the purpose of defraying expenses and reserves
directly attributable to the existence and use of any Common Area
facilities that are not complete at the time Assessments commence.
This latter exemption shall only be in effect as to a particular
Common Area facility, if applicable, until the earlier of: (a) the
recordation of a notice of completion for such Common Area
facility; or (b) the placement into use of the particular Common
Area facility. Subject to the limitations of California Civil Code
Section 1366, as same may be amended, from^time to time, from and
after the first day of the fiscal year immediately following the
conveyance of the first Lot to an Owner, the maximum Regular
Assessment may be increased subject to the following limitations:
I (a) Increases in Regular Assessments for any fiscal
year which are less than or equal to twenty percent (20%)
above the maximum Regular Assessment for the immediately
preceding fiscal year may be approved by the Board, provided
that the Board shall: (1) comply with the provisions set forth
in Section 1365(a) of the California Civil Code with respect
to the distribution of the pro forma operating budget of the
Association for the forthcoming fiscal year; or (2) obtain the
approval of Members, constituting a quorum, casting a majority
of affirmative votes at a meeting or an election of the
Association conducted^in accordance with California Corpora-
tions Code Sections 7510, et seq., and Sections 7613, et seq.
For purposes of this entire Section 3, a quorum means more
than fifty percent (50%) of the Members of the Association;
(b) Increases in Regular Assessments for any fiscal
year which are greater than twenty percent (20%) above Regular
Assessments for the immediately preceding fiscal year may be
approved by the Board only after the Board obtains the
approval of Members, constituting a quorum, casting a majority
of affirmative votes at a meeting or election of the Associ-
ation, conducted in accordance with Sections 7510, et seq. ,
and Section 7613 of the Corporations Code; and
(c) The Assessment increases limitation set forth
in Subsection (b) above does not apply to increases in
Assessments related to emergency situations, which shall be
deemed to include the following:
(1) Extraordinary expenses required by an
order by a court of competent jurisdiction;
50019.008-4200.FCM 120399 -40-
(2) Extraordinary expenses for the maintenance
or repair of Common Area that is necessary to remedy any
dangerous condition in the Project that represents a
threat of damage or injury to any person or property; and
(3) Extraordinary expenses necessary to repair
or maintain the Common Area that could not have been
reasonably anticipated by the Board at the time the most
recent Association budget was prepared. Notwithstanding
the foregoing, in the event that the Board increases the
Regular Assessment above twenty percent (20%) pursuant to
this Subparagraph (3) , the Board shall distribute written
notice concerning such increase to all Owners and a copy
of a resolution adopted by the Board setting forth: (i)
the necessity of the extraordinary expenses; and (ii) the
justification why said expenses were not reasonably
foreseeable at the time the most recent budget was
prepared. For the purpose of calculating whether an
increase to Regular Assessments exceeds twenty percent
(20%), the term "Regular Assessments" shall be deemed to
include the amount assessed against each Lot by the
Association as a Regular Assessment, plus any amount paid
by the Declarant as a subsidy or pursuant to any subsidy
or maintenance agreements, to the extent such subsidy
payments offset an amount which would otherwise be paid
by Owners as Regular Assessments.
The Board may fix the Regular Assessment at an amount not in excess
of the maximum Regular Assessment. So long as Declarant is offering
Lots for sale pursuant to a Final Subdivision ..Public Report, the
Regular Assessment may not be decreased by ten percent (10%) or
more without the express prior written consent of the Declarant and
the DRE. Notwithstanding the foregoing, following the annexation of
a subsequent Phase of the Project, pursuant to the provisions set
forth in this Declaration, the maximum Regular Assessment may be
automatically increased (or decreased) for all Lots in the Project
on the first day of the month following the first close of an
escrow for the sale of a Lot in said Phase without any approval of
the Members of the Association to the amount recommended by the DRE
in connection with its review and processing of the Association
budget for such Phase. The Association may, upon ratification by a
majority of the Board, enter into an agreement with Declarant, its
successors or assigns, to reduce or abate Assessments, upon such
terms and conditions as may be agreed to by the parties.
Section 4. Special Assessments for Capital Improve-
ments . In addition to the Regular Assessments authorized above, the
Board may not, subject to the limitations of California Civil Code
Section 1366, without the vote or written approval of Members
constituting a quorum (which shall mean more than fifty percent
[50%] of Owners of the Association) casting a majority of affirma-
tive votes at a meeting or election of the Association, conducted
50019.008-4200.FCM 120399 -41-
in accordance with Sections 7510, et seq. , and 7613 of the
Corporations Code, levy Special Assessments to defray the costs of
any action or undertaking on behalf of the Association which in the
aggregate exceed five percent (5%) of the budgeted gross expenses
of the Association for that fiscal year. The five percent (5%)
limitation shall not apply to increases in Special Assessments
related to an emergency situation which shall be deemed to include
the following:
(a) Extraordinary expenses required by an order by
a court of competent jurisdiction;
(b) Extraordinary expenses for the maintenance or
repair of Common Area that is necessary to remedy any danger-
ous condition in the Project that represents a threat of
damage or injury to any person or property; and
(c) Extraordinary expenses necessary to repair or
maintain the Common Area that could not have been reasonably
anticipated by the Board at the time the most recent Associ-
ation budget was prepared. Notwithstanding the foregoing, in
the event the Board levies any Special Assessment that exceeds
the five percent (5%) limitation pursuant to this Section, the
Board shall distribute written notice concerning said Special
Assessment to all Owners and a copy of a resolution adopted by
the Board setting forth: (1) the necessity of said Special
Assessment; and (2) the justification why said Special
Assessment was not reasonably foreseeable at the time the most
recent budget was prepared.
Every Special Assessment shall be levied upon the same basis as
that prescribed for the levying of Regular Assessments.
Section 5. Compliance Assessments. A Compliance
Assessment may not be characterized nor treated as an assessment
which may become a lien against the Owner's Lot enforceable by a
sale in accordance with the provisions of Sections 2924, 2924(b)
and 2924(c) of the Civil Code; provided, however, at such time as
the sales of Lots in the Project are not governed by regulations
adopted by the DRE, the foregoing shall not apply to any Compliance
Assessment imposed against an Owner consisting of a reasonable late
payment penalty for delinquent Assessments and/or charges to re-
imburse the Association for the loss of interest and for costs
reasonably incurred (including attorneys' fees) in its efforts to
collect delinquent Assessments or imposed for costs incurred by the
Association in the repair of damage to Common Area and facilities
for which the Member or the Member's guests or tenants were
responsible.
Section 6 . Special Benefit Assessments . Special Bene-
fit Assessments shall mean and refer to a charge levied by the
Association against an Owner and his respective Lot to cover the
- 4.9 -50019.008-4200.FCM 120399 ^^
expenses incurred by the Association in the operation, maintenance,
repair, and/or funding of reserves as to a portion of the Project
designated herein or in a Notice of Annexation as a "Special
Benefit Area" or which is identified or referred to as an area or
facility benefitting only the Owners within such an Area. These
expenses chargeable to only Owners in a Special Benefit Area, and
may include, without limitation, the following:
(a) Maintenance, management, operation, repair and
replacement of particular Improvements within the Special
Benefit Area;
(b) Utilities or services for the benefit of Owners
within the Special Benefit. Area;
(c) Reasonable reserves, as deemed appropriate by
the Board, for repair and replacement of any Improvements
maintained by the Association within "a Special Benefit Area;
and
(d) Unpaid Special Benefit Assessments.
The Association shall distribute to Owners within any Special
Benefit Area a pro forma operating statement and budget for the
upcoming fiscal year which shall estimate the expenses attributable
to the Special Benefit Area, and shall set forth the amount and
payment schedule of the Special Benefit Assessments. Increases in
Special Benefit Area Assessments for any fiscal year which are less
than or equal to twenty percent (20%) above the maximum Special
Benefit Area Assessment for the immediately preceding fiscal year
may be approved by the Board, provided that the Board shall obtain
the approval of Members affected by such Assessment, constituting
a quorum, casting a majority of affirmative votes. For purposes of
this Section, a quorum means more than fifty percent (50%) of the
Members of the Association affected by the Special Benefit Area
Assessment. The Assessment increase limitation set forth herein-
above does not apply to increases in Special Benefit Area Assess-
ments related to emergency situations that could not have been
reasonably anticipated by the Board at the time the most recent
Association budget was prepared which determined the amount of the
Special Benefit Area Assessments.
Section 7. Date _of Commencement of Regular Assess-
ments: Due Dates. Subject to the terms of any maintenance and/or
subsidy agreement entered into by the Association and Declarant,
the Regular Assessments provided for herein shall commence in each
Phase on the first day of the first month following the first close
of escrow for the sale of a Lot in such Phase, or on the first day
of the first month following the first occupancy of a Lot in such
Phase pursuant to a rental or lease agreement with Declarant, or
its authorized agent, whichever occurs first. Except as otherwise
provided in this Article, the first Regular Assessments shall be
50019.008-4200.PCM 120399 -43-
adjusted according to the number of months remaining in the fiscal
year as set forth in the By-Laws. The Board shall fix the amount of
the Regular Assessment against each Lot at least thirty (30) days
in advance of each Regular Assessment period. Written notice of the
Regular Assessment shall be sent to every Owner subject thereto at
least thirty (30) days in advance of each Assessment period. The
due dates shall be established by the Board. Notwithstanding any
other provisions of this Declaration, until the earlier to occur
of: (a) the recordation of a Notice of Completion of an Improvement
to the Common Area; or (b) the placement into use of the Common
Area, each Owner (including Declarant) may be declared by the Board
to be exempt from paying that portion of" the Regular Assessment
which is directly attributable to expenses and reserves to be
incurred by the Association in the maintenance, operation and
repair of such Common Area.
Section 8. Notice of Increase in Assessments. The
Board shall provide to the Owners, by first class mail to the
address on file with the Association, notice of any increase in
Regular, Special, and/or Special Benefit Assessments not less than
thirty (30)i nor more than sixty (60) days prior to such increase
becoming due.
Section 9. Collection of Assessments. Except as oth-
erwise provided above or in any subsequent Notice of Annexation,
Regular and Special Assessments shall be levied at a uniform rate
for all Lots and may be '"collected on a monthly basis. If any
installment of a Regular Assessment is less than the amount
assessed and the payment does not specify the Association funds or
fund into which it should be deposited, the receipt thereof by the
Association from that Member shall be credited in order of
priority, first to the operating fund, until that portion of the
Regular Assessment has been satisfied, and second to the reserve
fund. Compliance and Special Benefit Assessments shall be due
thirty (30) days after such Assessment has been levied.
Section 10. Payment of Assessments Under Protest.
(a) The exception for disputes related to Assess-
ments in Subdivision (b) of Section 1354 of the California
Civil Code shall not apply if, in a dispute between the Owner
of a Lot and the Association regarding the Assessments imposed
by the Association, the Owner of the Lot chooses to pay in
full to the Association all of the charges listed as follows:
(1) The amount of the Assessment in dispute;
(2) Late charges;
(3) Interest; and
50019.008-4200.FCM 120399 -44-
(4) All fees and costs associated with the
preparation and filing of a "Notice of Delinquent Assess-
ment, " including all mailing costs and including attor-
neys' fees not to exceed Four Hundred Twenty-Five Dollars
($425.00) (unless a greater amount is allowed by Califor-
nia law) , as may be amended by the Board with only a
majority vote of the Board.
In addition to paying the above-referenced charges,
the Owner must state by written notice that the amount is paid
under protest, and the written notice must be mailed by
certified mail not more than thirty (30) days from the
recording of a Notice of Delinquent Assessment in accordance
with Section 1367 of the California Civil Code. In those
instances, the Association shall inform the Owner that the
Owner may resolve the dispute through alternative dispute
resolution, as set forth in Section 1354 of the California
Civil Code, civil action, and any other procedures to resolve
the dispute that may be available through the Association.
(b) The right of any Owner of a Lot to utilize
alternative dispute resolution under Section 1366.3 of the
California Civil Code may not be exercised more than two (2)
times in any single calendar year, and not more than three (3)
times within any five (5) calendar years. Nothing within
Section 1366.3 of the California Civil Code shall preclude any
Owner of a Lot and the Association, upon mutual agreement,
from entering into alternative dispute resolution for a number
of times in excess of the limits set forth in this subsection.
The Owner of a Lot may request and be awarded through alter-
ative dispute resolution reasonable interest to be paid by the
Association on the total amount paid under Subparagraphs (1)
through (4) above if it is determined through alternative
dispute resolution that the Assessment levied by the Associa-
tion was not correctly levied.
Section 11. Certification of Payment. The Association
shall, upon demand and for a reasonable charge, furnish a cer-
tificate signed by an officer or agent of the Association setting
forth whether the Assessments on a specified Lot have been paid. If
a certificate states that Assessments have been paid, such certif-
icate shall be conclusive evidence of such payment.
Section 12. Delivery of Statement/Documents. Each
Owner of a Lot shall, as soon as practicable prior to the transfer
of title to the Lot or the execution of a real property sales
contract, as defined in California Civil Code, Section 2985, or as
may be amended, from time to time, give to the prospective
purchaser a copy of this Declaration and copies of the By-Laws and
Articles of the Association, and a true statement, in writing, from
the Board as to the amount of the Association's current Regular and
Special Assessments and fees, as well as any delinquent Assessments
50019.008-4200.FCM 120399 -45-
and information relating to penalties, attorneys' fees and other
charges authorized by this Declaration on the Lot as of the date
the statement is issued, and any change in the Association's
current Assessments and fees which have been approved by the Board
but have not become due and payable as of the date disclosure is
provided pursuant to this Section. Upon written request, the Board
shall, within ten (10) days of the mailing or delivery, of such
request, respectively, provide the Owner of a Lot with a copy of
this Declaration, and copies of the By-Laws and Articles of the
Association, together with the pro forma budget, an insurance
policy summary, a true statement in writing as to the amount of any
delinquent Assessments, penalties, attorneys' fees and other
charges authorized by this Declaration on the Lot as of the date of
the request, the most recent financial statement, the Association
's current Regular and Special Assessments, and any change in the
Association's current Assessments and fees which have been approved
by the Board but have not become due and payable as of the date
disclosure is provided pursuant to this Section. The Board may
impose a fee for providing such documents and statements, but in no
event shall the fee exceed the reasonable cost to prepare and
reproduce the requested documents. Within ninety (90) days
following t"he first close of escrow for the sale of a lot in the
Project, or as soon as readily obtainable, the Declarant shall
provide the Association wi£h copies of the (1) recorded tract map
for the project; (2) Common Area grant deeds; (3) Declaration; (4)
filed Articles of Incorporation; (5) Association's by-laws; (6)
rules and regulations or architectural guidelines adopted by the
Association and received by the Declarant, if any; (7) notice of
completion certificates for Common Area, if any; (8) completion
bond naming the Association as a beneficiary, if any; (9) warran-
ties for Common Area equipment or fixtures, if any; (10) insurance
policies obtained for the Association; and (11) membership
register, to the extent it is available.
Section 13. Reserves. The Regular Assessments shall
include reasonable amounts, as determined by the Board, collected
as reserves for the future periodic maintenance, repair and re-
placement of all or a portion of the Common Area or any such other
purpose determined by the Board. All amounts collected as reserves
shall be deposited by the Board in a separate bank account for the
purposes for which they were collected, and are to be segregated
from and not commingled with any other funds of the Association.
The expenditure of such funds shall be limited to the repair and
replacement of those elements of the Common Area which must be
repaired or replaced according to a reserve study as permitted by
Section 1365.5 of the California Civil Code, as same may be amended
from time to time.
Section 14. Offsets and Waiver Prohibited. No Owner
may waive or otherwise avoid liability for the Assessments provided
for herein for any reason whatsoever, including, but not limited
to, non-use of the Common Area or abandonment of his Lot, nor shall
50019.008-4200.FCM 120399 -46-
any Owner be entitled to any offset against any Assessment provided
for herein for any reason whatsoever, including, but not limited
to, any expenditure made by such Owner for or on behalf of the
Association.
Section 15. Exempt Property. The following property
subject to this Declaration shall be exempt from the Assessments
herein:
(a) All property dedicated to and accepted by any
public authority;
(b) All property owned by a charitable or nonprofit
organization exempt from taxation by the laws of the State of
California. However, no land or Improvements devoted to
dwelling use shall be exempt from said Assessment; and
(c) All Common Area owned in fee by the Association
(e.g., not including the easement areas).
Section 16. Capitalization of Association. Each pur-
chaser of a Lot in the Project shall contribute to the working
capital of the Association an amount equal to one/one hundred and
seventy-second (1/172) of the product of two (2) monthly install-
ments of the Regular Assessment identified in the Phase 1 budget
(as reflected in the Phase 1 Final Subdivision Public Report issued
by the ORE), multiplied by fifteen [15] (i.e., the number of Lots
in Phase 1). Said amount shall be deposited by each purchaser into
his respective escrow for the purchase of his Lot from Declarant,
and shall be disbursed by the escrow holder to the Association at
the close of escrow for the sale of the Lot. This capital contribu-
tion shall in no way be deemed to be a prepayment of any portion of
the Regular Assessment obligation of said Owners to the Associa-
tion .
ARTICLE VII
EFFECT OF NONPAYMENT OF ASSESSMENTS:
REMEDIES OF THE ASSOCIATION
Section 1. Effect of Nonpayment of Assessments: Reme-
dies of the Association. Any installment of a Regular, Special,
Special Benefit, or Compliance Assessment not paid within fifteen
(15) days after it is due and payable, shall be deemed delinquent
and the Owner shall be required to pay: (a) reasonable costs of
collection, including reasonable attorneys' fees; (b) a reasonable
late charge not exceeding ten percent (10%) of the delinquent
Assessment or Ten Dollars ($10.00), whichever is greater, or as
may, from time to time, be established by the Board in accordance
with California law; and (c) interest on all sums imposed under
this Section at an annual percentage rate not to exceed twelve per-
cent (12%), commencing thirty (30) days after the Assessment was
50019.008-4200.FCM 120399 -47-
due. The Association need not accept any tender of a partial
payment of an assessment installment and all costs and attorneys'
fees attributable thereto, and any acceptance of any such tender
does not waive the Association's right to demand and receive full
payments thereafter. Payments for Assessments shall first be
applied to the principal owed for the Assessments and only after
such principal amount is paid in full, -"shall such payments be
applied to interest or collection expenses for such Assessments.
The Board, for and on behalf of the Association, may commence legal
action against the Owner personally obligated to pay the same, or,
in the case of a Regular, .Special or Special Benefit Assessment,
may foreclose the lien against his Lot. Such lien may also be fore-
closed by a power of sale or other nonjudicial procedure provided
for by the laws of the State of California. In furtherance thereof,
each Owner hereby vests in the Association, its successors or
assigns, the right and power to bring all actions at law or to
pursue lien foreclosure against any Owner for purposes of col-
lecting such Delinquent Assessments. To the extent permitted by
law, each Owner waives, with respect to the , extent of any liens
created pursuant to this Article, the benefit of any homestead or
exemption laws of California in effect at the time any Assessment,
or installment thereof becomes delinquent or any lien is imposed.
Section 2. Notice of Delinquent Assessments. No ac-
tion shall be brought to foreclose a lien for delinquent Assess-
ments, or to proceed under the power of sale herein, unless (1) the
Association notifies the Owner in writing by certified mail of the
delinquent Assessment and penalty procedure of the Association and
provides an itemized statement of the charges owed by the Owner,
including items on the statement which indicate the principal owed,
any late charges and the method of calculation, any attorneys'
fees, and the collection practices used by the Association,
including the right of the Association to the reasonable costs of
collection; and (2) at least thirty (30) days have expired fol-
lowing the date a "Notice of Delinquent Assessments" is deposited
in the United States mail, certified or registered, postage
prepaid, to the Owner of said Lot, and a copy of the Notice is
recorded by the Association in the Office of the County Recorder.
Said Notice of Delinquent Assessments must recite or include the
name and street address of the record Owner, a good and sufficient
legal description of any such Lot, an itemized statement of the
amount claimed due and payable (which may, at the Association's
option, include reasonable late charges as may, from time to time,
be established by the Board in accordance with California law [and
the method of calculation], interest on the unpaid Assessment, plus
reasonable attorneys' fees and expenses of collection incurred in
connection with the debt secured by said lien) , a copy of the
Association's collection practices, and the name and address of the
principal office of the Association, and, in the event of a non-
judicial foreclosure, as provided in Section 3 below, the name and
address of the trustee authorized by the Association to enforce the
lien by sale. The Notice shall be signed and acknowledged by the
50019.008-4200.FCM 120399 -48-
President, or Vice President, and the Secretary, or assistant
Secretary, of the Association and mailed in the manner set forth in
Civil Code Section 2924(b), as same may be amended, to all record
Owners of the Owner's interest in the Project no later than ten
(10) calendar days after recordation. The lien shall continue until
fully paid or otherwise satisfied.
Section 3. Foreclosure Sale. Any foreclosure sale
provided for above is to be conducted by the Board, its attorney or
other persons authorized by the Board in accordance with the
provisions of Sections 2924, 2924a, 2924b,, and 2924c of the Cali-
fornia Civil Code, as same may be amended, from time to time,
applicable to the exercise of powers of sale in Mortgages and deeds
of trust, or in any other manner permitted by law. The Association,
through duly authorized agents, shall have the power to bid on the
Lot at a foreclosure sale, and to acquire, hold, lease, mortgage
and convey the same. Any Owner, by acceptance of a deed for his
Lot, hereby expressly waives any objection to the enforcement and
foreclosure of the lien in this manner.
Section 4. Curing of Default. Upon the timely curing
of any default for which a Notice of Delinquent Assessments or lien
was filed by the Association, the officers thereof are hereby
authorized to file or record, as the case may be, an appropriate
release of such Notice upon payment by the defaulting Owner of a
reasonable fee to be determined by the Association to cover the
costs of preparing and filing or recording such release.
Section 5. Cumulative Remedies. The Association's
remedies for nonpayment of Assessments, including, but not limited
to, an action to recover a money judgment, Assessment lien and
right of foreclosure and sale, are cumulative and in addition to
and not in substitution of any other rights and remedies which the
Association and its assigns may have hereunder or at law.
Section 6. Mortgagee Protection. Notwithstanding all
other provisions hereof, no lien created hereunder, nor any breach
of the terms and provisions of this Declaration, nor the en-
forcement of any term or provision hereof, shall defeat or render
invalid the rights of any Mortgagee under any recorded Mortgage or
deed of trust upon a Lot made in good faith and for value;
provided, that after such Mortgagee or other person or entity
obtains title to such Lot by judicial or nonjudicial foreclosure,
such Lot shall remain subject to this Declaration and the payment
of Assessments which fall due subsequent to the date of taking
title.
-4.Q _50019.008-4200.FCM 120399 ^-'
ARTICLE VIII
USE RESTRICTIONS
The Lots and Common Area shall be occupied and used only
as follows, however, subject to any exceptions set forth herein
including the exemptions of Declarant set forth in this Declara-
tion :
Section 1. Private Residential Dwelling. Each Lot
shall be used as a private residential dwelling and for no other
purpose, and subject to limitations set forth in the Entitlements
From City, except such temporary uses as shall be permitted by
Declarant while the Project is being developed and Lots are being
sold by Declarant; provided, however, that Declarant reserves the
right, for a period of three (3) years from recordation of a Notice
of Annexation for the most recent Phase of the Project, or until
all Lots in Carlsbad Tract 96-02 and the Annexation Property are
sold (and escrows closed) , whichever shall first occur, to carry on
normal sales activity on the Project, including the operation of
models and sales offices, provided Declarant shall not unreasonably
interfere with any other Owner's use of the Common Area.
Section 2. Common Area Use. Use of the Common Area
shall be subject to the provisions of this Declaration, the Rules
and Regulations and to any additional limitations imposed by the
Association. Each Owner hereby acknowledges and agrees that
portions of the Common Area are subject to public pedestrian
easements and, as such, the Association is prohibited from denying
access across such property unless approved in writing by the City.
Section 3 . Conduct Affecting Insurance. Nothing shall
be done or kept in any Lot or in the Common Area which will in-
crease the rate of insurance on the Common Area without the ap-
proval of the Association. No Owner shall permit anything to be
done or kept in his Lot or in the Common Area which will result in
the cancellation of insurance on the Common Area or which would be
in violation of any law. If, by reason of the occupancy or use of
said premises by the Owner, the rate of insurance to the Common
Area shall be increased, the Owner shall become personally liable
for the additional insurance premiums.
Section 4. Liability for Damage. Each Owner shall be
liable to the Association, pursuant to the laws of the State of
California, for any and all costs and expenses which may be in-
curred by the Association to repair any damage to the Common Area
which be sustained by reason of the negligence or willful miscon-
duct of said Owner or of his family, tenants, lessees or contract
purchasers, or their respective guests or invitees, whether minor
or adult. After approval by a majority of the Board, any such costs
and expenses shall be levied by the Board as a Compliance Assess-
ment against such Owner's Lot.
50019.008-4200.FCM 120399 -50-
Section 5. Maintenance of Animals. No animals of any
kind shall be raised, bred or kept in any Lot or in the Common
Area, except that common household pets, including dogs, cats,
fish, or birds, may be kept in each Lot; provided, however, that no
animal shall be kept, bred or maintained for any commercial purpose
or in unreasonable numbers. As used herein, "unreasonable numbers"
shall ordinarily mean more than three (3) animals (excluding fish)
per Lot. Each Owner shall be responsible for cleaning up any ex-
crement or other unclean or unsanitary condition caused by said
animal in the Project. While walking or exercising an animal in the
Project, the owner thereof 'shall, at all times, have readily
available means to cleanup any excrement or other unclean or
unsanitary conditions caused by said animal. The Association, upon
the approval of a majority of the Board, shall have the right to
prohibit maintenance of any animal within the Project which con-
stitutes a private nuisance to any other person. Every person
bringing an animal upon or keeping an animal in the Project shall
be liable pursuant to the laws of the State of California to each
and all persons for any injury or damage to persons or property
caused by such animal. All animals maintained in a Lot must be kept
either within an enclosure, yard or patio, or on a leash being held
by a person capable of controlling the animal.
Section 6. Structural Changes. There shall be no
structural alteration, construction or removal of any Residence,
fence or other structure whatsoever in the Project without the
prior written approval of the Board or its designated Architectural
Control Committee, as required herein, except such works of
construction by Declarant during the development of the Project.
Section 7. Quiet Enjoyment. No Owner shall permit or
suffer anything to be done or kept upon such. Owner's Lot which will
obstruct or interfere with the rights of 'quiet enjoyment of the
other occupants, or annoy them by unreasonable noises or otherwise,
nor will any Owner commit or permit any nuisance on the premises or
commit or suffer any immoral or illegal act to be committed
thereon. Notwithstanding the foregoing, for as long as Declarant
owns an interest in the Project, the Declarant's efforts in selling
the Lots may interfere with the Owners' quiet enjoyment of the
Lots, however, each Owner acknowledges this and waives any claims
against the Declarant for nuisance due to any activity related to
constructing, selling or marketing the Lots. Each Owner shall
comply with all of the requirements of the Board of Health and of
all other governmental authorities with respect to said premises,
and shall remove all rubbish, trash and garbage from his Lot. All
refuse containers, woodpiles, storage boxes, tools and equipment
shall be prohibited from any Lot unless obscured from view by a
fence or appropriate screen approved by the Architectural Control
Committee provided for hereinbelow. No Owner shall permit any thing
or condition to exist upon his or her Lot which shall induce,
breed, or harbor infectious plant diseases, or noxious or nuisance
insects.
50019.008-4200.FCM 120399 -51-
Section 8. Improvements. No Improvement shall be
constructed upon any portion of any Common Area, other than such
Improvements as shall be constructed: (a) by the Declarant (or a
person or entity to whom Declarant assigns its rights as develop-
er) , or (b) by the Association as provided herein. Each Owner
assumes all risks which may result from improvements he makes to
his Residence, and each Owner indemnifies and holds harmless the
Association, Declarant and each other Owner from any claim,
demands, liabilities, judgments, attorneys' fees and other
obligations which arise out of or are incurred in connection with
the installation, existence or removal of such improvements. Each
Owner shall consult with a .soils engineer, licensed geologist,
soils expert or other appropriate professional prior to the
commencement of any work on Owner's Lot which may require any
amount of substitute soil removal or support, including, but not
limited to, swimming pools, spas, patios, decks, walls, block
walls, other related improvements, and the like.
Section 9. Commercial Activity. No business, commer-
cial, manufacturing, mercantile, storage, vending or industrial
operations of any kind shall be conducted in or upon any Lot or the
Common Area, except such temporary uses as shall be permitted by
Declarant. (Notwithstanding the foregoing, this Section shall not
preclude an Owner from maintaining a home-office and conducting
business activities therefrom on the following conditions: (a)
there is no external evidence of such activity; (b) such activities
are conducted in conformance with all applicable government
ordinances; (c) the patrons or clientele of such activities do not
visit the Residence or park automobiles or other vehicles within
the Project; (d) the existence or operation of such activities is
not apparent or detectable by sight, sound or smell from outside of
the boundaries of the Residence or Lot; (e)~ no such activity
increases the liability or casualty insurance obligation or premium
of the Association; and (f) such activities are consistent with the
residential character of the Project and conform with the provi-
sions of this Declaration. So long as Declarant owns a Lot in the
Annexation Property, no Owner or the Association shall use a
Residence as an office for the rental, resale or leasing of Lots
without the prior written consent of Declarant.
Section 10. Parking. All vehicles in. the Project shall
be parked in accordance with the following:
(a) Restrictions Regarding Private Streets. All
streets within the Project are private and are subject to all
applicable laws, ordinances and regulations of the Association
and all governmental agencies having jurisdiction over the
Project. The on-street parking spaces shall be available on a
first-come, first-served basis to all guests and visitors.
Notwithstanding the foregoing, no vehicle may be temporarily
parked in any parking space in the Common Area for more than
twenty (20) continuous hours or as otherwise determined by the
Board. Owners may n6t park in on-street parking spaces
designated for guest parking, and the Board may not assign on-
street guest parking to any Lot in the Project.
50019.008-4200.PCM 120399 -52-
(b) Recreational/Parking Restrictions. Except as
may otherwise be permitted by the Association, no Owner.shall
park any vehicle on any portion of the Project, except wholly
within his or her respective garage or, on his or her driveway
(if, and only if, such driveway exceeds eighteen feet [18'] in
length as measured from the edge of the sidewalk furthest from
the street to the exterior surface of the garage door),
provided however, such automobile does not extend beyond the
curb line of the street or onto the sidewalk. No garage or
driveway may be sold or assigned to, or retained in the owner-
ship of, any person not''an Owner, and no garage or driveway
may be rented or leased to a non-Owner except in connection
with the rental or lease of a Residence. Without limiting the
generality of the foregoing, unless otherwise determined by
the Board, no Owner shall park, store, or keep on his or her
Lot or Residence (including his or her driveway), Common Area,
or any portion of the Project, any large commercial type
vehicle, any recreational vehicle (including, but not limited
to, campers, motorhomes, trailers, boat trailers, mobile homes
or other similar vehicles), or any motorized or non-motorized
vehicles that exceed seven feet (T } in height, seven feet
(7') in width and nineteen feet (19') in length, except for
purposes of loading, unloading, making :deliveries:, or.- per-
forming emergency repairs for limited time periods as deter-
mined by the Board, unless wholly enclosed within his or her.
garage. The Association may adopt specific, restrictions and
provisions applicable to.the use of the recreational parking
spaces in the Project, if any. As an example, the Association
may determine it appropriate to allow use of such spaces on a
first-come, first-served basis for a specified period of time
in accordance with the lease provisions attached hereto as
Exhibit "D."
(c) Repairs. No Owner shall conduct major .repairs
to any motor vehicle of any kind whatsoever in his garage or
upon the Common Area, except for emergency repairs thereto and
then only to the extent necessary'to enable the vehicle to be
moved to a proper repair facility. No Owner shall park or
store an inoperative vehicle on his or her Lot or in the
Project for more than forty-eight (48) hours.
(d) Storage- of Goods in Garages. Each Owner shall
keep his garage readily available for parking his respective
vehicle therein, and shall not store any goods or materials
therein, nor use any portion of the garage for a workshop or
other use if such storage or use would prevent said Owner from
parking the number of four (4.) wheel vehicles therein for
which said garage was originally designed and constructed by
Declarant. Unless otherwise allowed, by the Board or the City,
each Owner shall maintain a minimum interior, space of his or
her respective garage clear,; -at ., ;all times to accommodate
parking of the appropriate four', wheel .vehicles within such
50019.008-4200.FCM 120399 ^53-...
garage that the garage was original designed to accommodate,
and ho business activity, day care, or garage sales shall be
conducted within or from any garage in the Project.
(e) Garage Doors. All garage doors shall remain
closed at all times, except as reasonably required ,for: entry
to and exit from the garage. Each Owner shall ensure that his
garage door opener is in proper working order at all times.
Section 11. Regulation of Parking. Subject to the
rights of the Association, through Its officers,' committees and
agents, the Board is required to establish "parking" and "no park-
ing" areas within the Common Area, in accordance with Section
22658.2 of the California Vehicle Code, or .any similar statute
hereafter enacted, as well as to enforce these parking limitations
by all means lawful for such enforcement, including, but not
limited to, the levying of fines and the citing and towing of
vehicles. The Board shall have the authority to tow away and store
any vehicle or similar equipment parked in violation of the above
limitations whether the same shall belong to any Owner or a:member
of his family or to any tenant, lessee, guest or invitee of any
Owner. Charges for. such towing: and storing shall be assessed
against the Owner of the Residence :wh'ich is responsible for the
violation of such restrictions,, and. such assessment may be enforced
as a Compliance Assessment. Each Owner understands ,that the
Project has strict parking regulations that .will be enforced by the
Association and the Declarant shall ensure that each Owner who
purchases a Lot from Declarant executes an acknowledgement of such
parking regulation. .."'"•'• "
Section 12. Compliance With Management Documents. All
Owners shall be Members of the 'Association and shall comply with
the terms and conditions as set forthjherein and in the Articles
and the By-Laws, and all Rules' and Regulations of the Association
and Architectural Control Committee. •; No Owner 'shall transfer any
membership or interest in the Association, except upon the.transfer
of the Lot to which it is appurtenant.- , ' ;
Section 13. Declarant's Improvements_. Nothing in this
Article or elsewhere in this Declaration shall limit the right of
Declarant to complete construction of any Improvements to the
Common Area and/or to any Lot owned by Declarant, or to alter the
foregoing or to construct such additional Improvements as Declarant
deems advisable prior to completion and sale of the entire Project.
The rights of Declarant under this Declaration may be assigned by
Declarant to any successdr; to all or any part of Declarant's
interest in the Project, as developer, by an express assignment
incorporated in a recorded deed transferring such interest to such
successor. ' '. ;
Section 14 . Solar Heating.: No solar, heating panels or
other solar energy collection equipment:,: shall be' installed on any
50019.008-4200. FCM 120399 . ,.~ ','•••• • , '' • ' '
portion of any Lot or Common Area, or any Improvement thereon, un-
less such equipment is installed', in 'such location and in .such
manner as to be obscured from the ;view of other persons ; in the
Project to the greatest degree practicable without significantly
decreasing its efficiency. No person shall install any such panels
or equipment without the prior written consent of the Architectural
Control Committee, which shall have the right to reasonably
restrict and determine the size, shape, color, style, materials or
location of any such panels or equipment -within the Project,
subject to the provisions of California Civil Code Section 714, as
same may be amended, from. time to time. At a minimum, any solar
panels are to be integrated with the roof design with the panels
and frame colored to match the roof or bronze anodized. . .
Section 15. Antennas. No radio station or shortwave
operators of any kind shall operate from any Lot. No Owner shall
install, or cause to be installed, or maintain any television,
radio, "Citizens Band" (C.B.) antenna, satellite dish or other
similar electronic receiving or broadcasting device (including
those devices having a diameter or diagonal measurement of one
meter or less) in the Project in such a manner as to be visible
from the Common Area, unless (1) approved by the Architectural
Control Committee (which approval for .a. video or television
antenna, including a satellite' dish, sha-11 not be unreasonably
withheld or delayed but may include restrictions which do not
significantly increase the cost of the installation,, maintenance or
use of the device or significantly -decrease its efficiency or
performance or preclude reception of an acceptable quality signal),
and (2) in compliance with all applicable ordinances of the City,
California Statutes (e.g., Civil Code" Section JL376) , and Federal
Regulations, as each may be amended or revised.
Section 16. Leasing. No Owner shall be permitted to
rent or lease his Lot for .transient or hotel purposes or for a
period of less than thirty (30)' days. All rental and lease agree-
ments shall be in writing and shall provide that the terms of such
agreement shall be subject in all respects to the provisions of
this Declaration, By-Laws and Articles, and that any failure by the
tenant or lessee to comply,-with the terms of such documents shall
constitute a default under such, agreement. .''
Section 17. Drilling. No oil drilling, oil development
operations, oil refining, quarrying or mining operations of any
kind shall be permitted upon or in any Lot or the Common Area, nor
shall oil wells, tanks, tunnels or mineral excavations be permitted
upon or in any Lot1, or the Common',< Area. .'• No .-derrick or other
structure designed for use in boring for oil, water' or natural gas.
shall be erected, maintained or permitted' upon any Lot.,,
Section 18. Trash.- NbYrubbish, trash, garbage or other
waste material shall be kept or permitted upon any portion of the
Project, except in covered sanitary''containers approved by the City
50019.008-4200.FGM 120399 . ,-55~ .
located in appropriate areas screened and concealed from..view by a
fence, wall or other screen, or in" such portions of the Project, if
any, improved with trash receptacles provided for the use of all
Owners, and no odor shall be permitted to arise therefrom so as to
render the Project, or any portion thereof, unsanitary, unsightly,
offensive or detrimental to any other property in the vicinity
thereof or to its occupants. All such .refuse which is put out for
pickup, shall be in conformance with all appropriate standards
established by the City or governing agency. Appropriate sanitary
containers may be exposed to the view of neighboring Residences
only when set out on the sidewalks or streets no earlier than 5:00
p.m. the night prior to the trash pick-up day and removed from the
sidewalk or street within ten (10) hours after pickup, unless
otherwise modified by the Board.
Section 19. Drainage. There shall be no interference
with the established drainage pattern over any Lot within the
Project as to affect any other Lot or the Common Area, unless
adequate alternative provision is made for proper drainage. For
purposes hereof, "established" drainage is defined as the drainage
which existp at the time such Lot is conveyed to a purchaser from
Declarant. Each Owner further agrees not to obstruct, .retard or
otherwise interfere with, in any manner whatsoever, any drainage
swales, or to perform any. grading 6r construction on his Lot which
may result in creating an excessive amount of surface water'runoff
(i.e., an amount of water beyond the flow originally intended and
provided for by the approved Project•'grading plan) to flow into
said drainage swales. Each Owner of a Lotlbhall, at his sole cost
and expense, maintain that portion of any drainage swale or other
drainage devices located on .his respective Lot..
Section 20. Prohibition Against Further Subdivision.
No Owner shall make any conveyance, execute any document or,map, or
enter into any contract which .shall purport to further, subdivide
any Lot in any manner whatsoever, including, without limitation,
subdividing such Lot into additional lots, condominiums, stock
cooperatives or timeshare uses, whether by map, .deed or contract.
Any such conveyance ,-• document, map'or contract shall be void and of
no force or effect whatsoever.
Section 21. Exemption of Declarant. Nothing in this
Article or elsewhere in this Declaration shall limit, restrict,
abridge or control, in any manner whatsoever, the. rights of De-
clarant to complete the planning,.development, grading, construc-
tion, advertising, marketing, leasing and sales of the Lots, and
all other property within the Project (including-any property which
may be annexed thereto pursuant to the provisions of this 'Declara-
tion) , including, without .limitation, the following specific
rights, which may be' exercised .'by Declarant, or by its agents and
employees, in conjunction with' such development arid'marketing, for.
a period of three (3) years., from the. date of recorda'tion of a
Notice of Annexation for the- most'; recent Phase of the Project, or
50019.008-4200.FCM 120399 -.56-
until all Lots in Carlsbad Tract. 96-02 and the Annexation Property
are sold (and escrows closed), whichever shall first occur:
(a) The right to maintain and operate one (1) or
more advertising, sales or leasing office(s) . located upon any
Lot(s) owned by Declarant or upon any Common Area without
payment of rent or approval of the Association;
(b) The right to post and display from any Lot(s)
owned by Declarant or from any Common Area any sign, flag,
banner, billboard or other advertising which Declarant may, in
its sole discretion, deem appropriate, irrespective of size,
color, shape or materials of such items; .
(c) The right to install, place, replace, con-
struct, reconstruct, modify or remove any Improvement from any
Lot owned by Declarant or from any Common Area, as Declarant
may, in its sole discretion, deem appropriate; provided that
in the event Declarant removes !any Association owned Improve-
ment from any Common Area without the express prior written
consent of the Board, Declarant shall replace such Improvement
with an Improvement of substantially similar value, appearance
and utility within a reasonable period following completion of
any work necessitating the removal of the Improvement;
(d) The right to conduct any.commercial activity
upon any Lot owned by Declarant or upon any Common Area which
reasonably relates to the development, marketing, leasing or
sales of the Lots in the Project; and
(e) The right to park vehicles upon any Lot owned
by Declarant.
All or any portion of the rights of Declarant herein and
elsewhere in this Declaration may be assigned by Declarant to any
successor-in-interest in tehe Project, including the Annexation
Property, by an express written assignment recorded in the Office
of the County Recorder.
Section 22. No Easements for View Purposes; Dis-
claimer. The Article herein entitled "Architectural Control
Approval, " sets forth procedure's for/the approval of Improvements
which may be constructed upon Lots ;in the Project which are con-
sistent with the architectural standards adopted, from time to
time, pursuant to said Article. The ..architectural standards may
have some effect on':; views- and the--'pas sage of light and air to
individual Lots. However, by:promulgation.and enforcement of the,
architectural standards, or otherwise, neither Declarant, the Board
nor the Architectural Control .Committee', .or the members, employees
or consultants of any of the foregoing, have made any representa-
tions whatsoever concerning the view,-:jif any, that a particular Lot
or other Improvement thereon, williv.'enj'oy. There are no express or
50019.008-4200.FCM 120399 -57-
implied easements or rights whatsoever appurtenant to any Lot for
view purposes, or for the passage of light and .air. Each Owner, by
accepting a deed to a Lot, hereby expressly acknowledges and agrees
that further construction within the Project may impair the view
from such Owner's Lot, and each Owner hereby expressly consents to
any such impairment. The City .makes no claim, warranty, or
guarantee that views from any Lot will be preserved as development
of surrounding properties occurs.
Section 23. Landscaping and Yard Improvements. All
portions of the yard area in a particular Owner's Lot, except that
portion, if any, landscaped by the Declarant, shall be landscaped
by the Owner thereof on or before a date which is six (6) months
from the original conveyance of such Lot by Declarant to such
Owner. Thereafter, such landscaping shall be maintained by the
Owner in a clean, safe and attractive condition according to any
Rules and Regulations promulgated by the Association.
Section 24. Common Area - No Modification by Owners.
No Owner shall have any right whatsoever to make any change or
improvementi to the Common Area and no. Owner shall cause any damage
to the Common Area. Each Owner shall be liable to the Association
and any other Owners for any damage to any of the. Common Area that
may be sustained by reason of the negligence of that Owner, that
Owner's family members, contract purchasers, tenants, guests, or
invitees. . .
Section 25. Water Softener/Systems. No individual
water supply system, water softener system or sewage disposal
system shall be permitted on any Lot unless the system is designed,
located, constructed and equipped in accordance with the require-
ments, standards and recommendations of any applicable water
district, the City and any applicable governmental health authority
having jurisdiction and has. been approved in writing by the Board
and Architectural Review Committee.
Section 26. No Warranty of Enforceabilitv. While
Declarant has no reason to believe that any of the Protective
Covenants contained in this Article or elsewhere in this Declara-
tion are or may be invalid or unenforceable for any reason or to
any extent, Declarant makes no warranty or representation as to the
present or future validity or enforceability of any such Protective
.Covenants. Any Owner acquiring a Lot in the Project in reliance on
one or more of such Protective Covenants shall assume all risks of
the validity and enforceability thereof and, by acquiring the Lot,
agrees to hold Declarant harmless 'therefrom.
Section 27:. Slopes. No Owner shall permit any act .to
be performed on such'1 Owner's Lot which would result in erosion of
the Common Area, including,,".;'but''.-hbt limited to, changing the.
grading of his Lot or over-irrigating same. If the Owner.permits
any such act resulting in erosion of or other damage to the Common
50019.008-4200.PCM 120399 -58-
Area, said Lot Owner will be personally liable to the Association
for such damage and a Special Assessment shall be levied against
such Lot Owner's Lot to recover all costs and expenses incurred to
repair or reconstruct that portion of the Common Area damaged by
such Lot Owner. It is the express intent of this Protective
Covenant to prevent erosion and'maintain orderly discharge of water
on, over and across the Common Area.
Section 28. Public Utility Easement. No Owner shall
construct any Improvement in the' public utility easement (e.g.,
approximately three feet [3'] behind the street curb), if applica-
ble, unless the Owner obtains all necessary permits from the City
and approval from the Board.
Section 29. Sight Distance. Each Owner hereby
acknowledges and agrees that no structure, fence, wall, tree,
shrub, sign, or other object over thirty^'inches (30") above the
street grade may be allowed or permitted to encroach within the
area identified as a sight distance corridor in accordance with
City Standard Public Street-Design Criteria, Section 8.B.3.
Section 30. Post Tension Slabs. Each Owner hereby
acknowledges that the concrete slab for Owner's Residence is
reinforced with a grid of steel .cables which were installed in the
concrete and then tightened to create very high tension. This type
of slab is commonly known as a "Post Tension Slab." Each Owner
further acknowledges cutting into a Post Tension Slab for any
reason (e.g. to install a floor safe, to remodel plumbing, etc.) is
very hazardous and may result in serious damage to the Residence
and/or personal injury. By accepting a grant deed to the Lot, each
Owner hereby specifically covenants and agrees that:
•'>
(a) He/she shall not cut into or otherwise tamper
with the Post Tension Slab;
(b) He/she shall not knowingly permit any other
person to cut into or tamper with the Post Tension Slab so
long as Owner owns any interest in the Lot;
(c) He/she shall disclose the existence of the Post
Tension Slab to any tenant, lessee, or grantee of the Resi-
dence; and , : .
(d). He/she shall indemnify and hold Declarant, and:
its respective ^officers, .employees, contractors and agents,
free and harmless from and ,against any and all claims,
damages, losses, or other liability (including attorneys'
fees)! arising from any breach of .this Section.
Section 31. Sidevard/Entry Easements. As mapped, the
Project will be developed as a modified-zero lot line development.
To accommodate this system of ownership, the Declarant reserves,
50019.008-4200.FCM 120399 ~59~ . :
establishes, and grants various easements for sideyard/entry, front
yard and related purposes as set forth herein. The rights and
obligations of the Owners of the Lots are as set forth herein, and
each such Owner acknowledges and agrees that he has a vested
interest in the establishment and preservation of said system of
ownership. .
(a) Definitions. The following definitions shall be
applicable to the Lots located within the Project: •
(1) "Adioining Lot" shall mean and refer to
each Lot which has a Zero Lot Line Wall constructed
thereon, and which is burdened by permanent easements
appurtenant to the adjoining Dominant Lot for sideyard/-
entry purposes (also may be referred to as "Servient
Tenement", i.e., Exhibit "E"). / .
(2) "Dominant Lot" shall mean those Lots which
have permanent easements appurtenant thereto over the
Adjoining Lot for sideyard/entry purposes as set forth
herein. «? .
(3) "Dominant Owner" shall mean and refer to
any Owner whose Lot is benefitted by permanent easements
appurtenant thereto over an Adjoining Lot.
(4) "Adjoining Owner" shall mean and refer to
any Owner whose Lot is burdened by permanent easements
appurtenant to an adjoining Dominant Lot.
(5) "Zero Lot Line Walls" shall mean the
particular structural wall of a Residence which contains
no windows or doors, and which is constructed substan-
tially parallel to the Lot line, such that one (1) side
of said Wall is the interior of the Residence located on
the Adjoining Lot; and the other side of the Wall serves
as part of the boundary between the Dominant Lot and
Adjoining Lot. .
(6) "Fences" shall refer collectively to the
types of fences and walls more particularly described
below:
i) "Front Yard Fences" shall mean and
refer to any fence or wall (other than a wall which
constitutes all or a portion of a Residence) which:
(A) generally parallels the street in front of any
Residence and extends between two (2) Residences on
adjoining Lots, or (B) extends parallel to the Lot
line Within the Front Yard Easement Area, and/or
(C) borders the street along a corner Lot.
50019.008-4200.FCM 120399 -60-
ii) "Rear. Fences" shall mean and refer
to any fence or wall (other than. a fence or wall
which constitutes all or a portion of a Residence)
which: (A) is located approximately, ori the rear
property line of a Lot; (B) is. located generally
parallel to the side property line between two Lots
and serves as the effective boundary between the
rear yard on adjacent Lots; and (C) which generally
parallels a street on a corner Lot or a side prop-
erty line paralleling the street.
(7) "Sideyard/Entry Easement Areas" shall mean
those areas designated on Exhibit "E" attached hereto.
(8) • "Front Yard Easement Areas" shall mean
those areas maintained by the Association as Common Area
and as designated on Exhibit "B" attached hereto.
(b) Establishment of Zero Lot Line Easements. In
order to create and establish a zero lot line system of owner-
ship within the Project, Declarant hereby creates, establishes
and reserves permanent easements appurtenant to certain
Dominant Lots on, over and across those certain portions of
their respective adjacent Adjoining Lots, which are more par-
ticularly shown and described on Exhibit "E." Said easements
shall be used for general recreation, gardening, drainage,
landscaping, access, maintenance and other purposes provided
herein, and shall be subject to each and all of the covenants
set forth in this Declaration. Declarant further reserves for
Adjoining Owners easements over portions of the Adjoining Lot
to accommodate drainage and encroachments for. any foundations,:
footings, eaves, overhangs'1/:.^"'.'chimneys or ; other 'similar/. Im'-.'^
provements originally , constructed .' by Declarant. or "shown . ori • -.'i
approved plans. ..-,:'':'• Y-; ;'yfv-.'/ :' ' •. ' ".'' '. •. ' •• ":>;^ :-'.'••"•:{?'*:-2
' •'•'•• V '•''{' _ " .. - '"' i . •"' _;. '
(c) Ownership of .Zero'Lot Line Walls. Ownership of,;
. . each Zero Lot Line. Wall^shall^be;fvested in: the .Owner of- <th'e '.':.
Adjoining Lot upon which':'tHe; Zero': Lot'.Line Wall is .located;'';
Notwithstanding said vestingV!6f;;!ownership,.. all Zero :Lot: 'Line
Walls constitute party .wall's^fahd^thel! rights !and obligations
of the Owners with respect to {the'use, enjoyment, mai'nte:nande
and repair of Zero Lot. Line''Walls shall be as set ;forth.
herein. ".•
(d) Maintenance'' . of;-; .TZero Lot ' Line Walls. The.
Adjoining Lot Owner, .shallY{pain't;, ;m:aintain, and repair-the Zero
Lot Line Wall, including':tha£''"portion which! faces the Dominant
Owner's Lot, iri. a neat, clean'{('safe, .sanitary .and attractive
condition at all times, and;;.'sh!all:;;bear.all costs thereof. Not-/
withstanding the foregoing)' iiti^thef.event any. painting", mainte-
nance or repair is required;:due'* to:'; the .fault of the Dominant
Owner, the Dominant pwne:r:vsha])i|!('i5rompt'ly.cause' said work to be
50019...008-4200.FCM 120399 . -:! v
performed and shall bear all costs thereof. Each Dominant
Owner may landscape, in an attractive manner, or otherwise
decorate the side of the Zero Lot Line 'Wall facing his Lot. In
no event, however, may the Dominant Owner paint or drive
nails, screws, bolts or other objects into the Zero Lot Line
Wall, or permit or suffer anything else to be done to such
Wall which would tend to damage, alter or impair the structur-
al integrity of such Wall. Further, Dominant Owner shall not,
under any circumstances, plant any tree, shrub or other
landscaping, or build, erect or otherwise install any Im-
provement of any kind within two feet (2') of the Zero Lot
Line Wall which would unreasonably impede or interfere with
the necessary maintenance and repairs to the Zero Lot Line
Wall by the Adjoining Lot Owner, and impair the structural
integrity of such Wall or unreasonably interfere with the
utility easements referenced hereinbelow.
(e) Use and Maintenance of Sideyard/Entry Easement
Areas. Each Dominant Owner shall have" the right and responsi-
bility to landscape and otherwise maintain the Sideyard/Entry
Easement Area appurtenant to his Lot in a neat, clean, safe,
sanitary and attractive condition at all times, and. shall bear
all costs thereof. The Sideyard/Entry Easement Area shall be
used only as a general recreation and garden area by the Owner
of the Dominant Lot. Such purpose shall include the right of
each such Owner to landscape and establish an irrigation
system thereon, provided such landscaping and irrigation
system shall be first approved by the Board. Additionally,
said Owner shall not plant any tree, shrub or other land-
scaping upon the Sideyard/Entry Easement Area which would: (1)
impair or otherwise threaten the structural integrity of any
adjacent Residence; or : (2)' interfere with the Adjoining
Owner's right of access,: as set forth herein. Neither the
Dominant Owner nor *the Adjoining Owner shall construct,
install or erect any Improvement in the Sideyard/Entry Ease-
ment Area, except as expressly permitted by the Board and
approved by the City as necessary.
(f) Adjoining Owner's Access Rights. The Owner of.
the Adjoining Lot shall have' an easement for ingress, egress
and access on, over and across the.Sideyard/Entry Easement
Area and Front Yard Easement Area and the Dominant Lot as may
be reasonably necessary to allow .the Owner of the Adjoining
Lot to paint, maintain and repair the Zero Lot Line Wall, his
Residence, including any gutter"or downspout attached thereto.
Except in the case of a bona 'fide emergency, the Owner of the
Adjoining Lot shall give- the, Owner of the Dominant; Lot at
least twenty-four (24) hours prior written notice of his
intention to enter upon the Dominant Lot and the Sideyard/-
Entry Easement Area, . and.'.shall; perform all necessary work
during reasonable daylight 'hours. -In the .event of an emergen-
cy, such entry may be made at any time and without notice.
S0019.008-4200.FCM 120399 -62--
Under all circumstances, the Owner of the Adjoining Lot shall
use his best efforts to minimize the duration of the work and
the inconvenience to the Owner of the Dominant Lot.
(g) Ownership of Walls. Ownership of each Front
Yard Fence and Rear Fence, or portion thereof, shall be vested
in the Owner of the Lot upon which said Fence, or portion
thereof, is located. Notwithstanding said vesting of owner-
ship, the rights and obligations of the Owners with respect to
the use, enjoyment, maintenance and repair of the Fences shall
be as set forth herein."
• iriif •
(h) Maintenance of the Fences. The rights and re-
sponsibilities of the Owners with respect to the maintenance
and repair of Fences shall be as follows:
(1) Front Yard Fences. The appearance of each
Front Yard Fence is of primary benefit to Owners in the
Project. Accordingly, the Association shall paint,
maintain and perform all structural repairs to the entire
Front Yard Fences. The Association shall keep the Front
Yard Fence in a neat, clean, safe, sanitary and attrac-
tive condition at all times, and shall bear.all costs
thereof.
No Owner may construct, erect, raise, remove,
paint or otherwise alter such Front Yard Fence without
the prior express written consent of the Board.
(2) Rear Fences. The co-Owners of a Rear Fence
shall share equally in the maintenance and repair of said
Fence. Each respective Owner shall have the exclusive
right to use and the primary obligation to paint,
i maintain and repair the surface of the Rear Fence facing
his Residence. Neither Owner shall use any portion of the
Rear Fence so as to interfere with the use and enjoyment
of the other Owner, and, to the extent not inconsistent
with the provisions of this Section, the general rules of
law regarding party walls and fences and liability for
property damage due to negligence or willful acts or
omissions, shall apply thereto. Notwithstanding the fore-
going, if any Rear Fence is damaged or destroyed as a
proximate result of any act or omission of any Owner, or
any member of his family, guests, .tenants, lessees and/or
invitees (without regard, to fault), so as to deprive the
adjoining Owner of the full use and benefit thereof, such
Owner shall repair and/or rebuild said Rear Fence and
shall bear all of the costs thereof. If any Rear Fence.is
damaged or destroyed by such other cause, other than the
act or omission of an adjoining Owner, the Owners whose
Lots adjoin such Rear Fence shall repair and/or rebuild
same and shall share equally in the cost thereof. Each
50019.008-4200.FCM 120399 -63-
Owner shall paint, maintain and repair any Rear Fence for
which he is responsible, so as to keep such Fence in an
attractive condition at all times, and may not construct,
erect, raise, remove or otherwise alter such Rear Fence
without the prior written approval of the Board.
(i) Alterations. No alterations, repairs or
restoration to any Zero Lot Line Wall, Front Yard Fence or
Rear Fence shall be commenced, erected or maintained until the
plans and specifications showing the nature, kind, shape,
height, materials, location and approximate cost of same shall
have been approved, in writing, by the Board. Except for the
Fences originally constructed by Declarant, no wall, fence or
other structure of any kind shall be constructed on any Lot
without the prior written approval of the Board.
(j) Easements for Installation of Utility Lines. In
the event the Owner of a Adjoining Lot desires to construct
any Improvements in his rear yard or sideyard and has obtained
the required approvals in accordance with the provisions of
this Declaration and the City, and if such Improvements
require utility service (e.g., electricity to operate a spa
pump), an easement is hereby reserved in favor of and appurte-
nant to the Adjoining Lot on, over and across the
Sideyard/Entry Easement Area burdening his Lot for the
installation, maintenance and repair of all utility lines and
connections which are reasonably necessary for the use and
enjoyment of such Improvements. The Owner of the Adjoining Lot
shall give the Owner of the Dominant Lot at least twenty-four
(24) hours notice prior to commencement of any work in the
Sideyard/Entry Easement Area, and shall use his best efforts
to minimize the duration of the work and inconvenience to the
Owner of the Dominant Lot. The Owner of the Adjoining Lot
shall, at his sole cost and expense, restore any landscaping
or irrigation equipment removed or otherwise damaged by reason
of such work to substantially the same condition as existed
prior to the commencement of such work.
(k) Drainage Easements. The Declarant hereby
establishes, reserves, and grants nonexclusive reciprocal
easements over the Sideyard/Entry Easement Areas and Front
Yard Easement Areas for drainage purposes to accommodate the
drainage system, including, but not limited to area drains and
pipes, originally installed by Declarant pursuant to the
grading and construction plans approved by the City. The
Dominant Owners and Adjoining Owners served by said drainage
system shall be mutually responsible to maintain and preserve
said system in operating condition to ensure proper drainage
on, over and across the Sideyard/Entry Easement Area and Front
Yard Easement Area in accordance with the established drainage
patterns created by the approved grading plans for each Lot
and shall share equally in the maintenance, repair or replace-
50019.008-4200.FCM 120399 -64-
ment costs associated with such drainage system. No Owner
shall alter or remove the drainage system without the express
written consent of the adjoining Lot Owner served by such
drainage system and the Board. In the event any portion of the
drainage system is damaged or destroyed, either Lot Owner may
cause said repair or restoration work to be completed and
shall be entitled to recover the appropriate expenses from the
adjoining Lot Owner. Notwithstanding the foregoing, if any
portion of the drainage system is damaged or destroyed as a
proximate result of any act or omission of any Owner, or any
member of his family, .guests, tenants, lessees and/or invitees
(without regard to fault), such Owner shall repair and/or
rebuild such drainage system, and shall bear all of the costs
thereof.
(1) Indemnification by 'Dominant Owners. Each
Dominant Owner shall indemnify and save the respective
Adjoining Owner harmless from and against any and all liabili-
ty arising out of or otherwise resulting from any negligent
act or omission of the Dominant Owner relating to the exercise
of its, rights or the performance of its obligations hereunder.
(m) Indemnification by Adjoining Owners. Each
Adjoining Owner shall indemnify and save the respective Domi-
nant Owner harmless from and against any and all liability
arising out of or otherwise resulting from any negligent act
or omission of the Adjoining Owner relating to the exercise of
its rights or the performance of its obligations hereunder.
(n) Right of Contribution. The-right of any Owner
to contribution frortf any other Owner for work performed
pursuant to this Article shall be appurtenant to and shall run
with the land, and shall be binding upon the Owners and their
successors, assigns and grantees. Notwithstanding the forego-
ing, the duty and obligation to pay contribution for work
already performed, pursuant to the provisions of this Section,
shall not run with the land or be binding upon: (a) any
Mortgagee who obtains title pursuant to either a foreclosure
under its deed of trust or by a deed in lieu of foreclosure,
or (b) any purchaser at a foreclosure sale under such deed of
trust.
50019.008-4200.FCM 120399 -65-
ARTICLE IX
ARCHITECTURAL CONTROL - APPROVAL
Section 1. Exemptions From Architectural Control. Ex-
cept as otherwise provided herein, all Improvements to Lots shall
be subject to architectural approval by the Association in accor-
dance with the provisions of this Declaration. Notwithstanding the
foregoing, Declarant shall be exempt from compliance with any of
the provisions of this Article as they may relate to the original
construction and development of the Project by Declarant in
accordance with the plans approved by the City; provided, however,
if Declarant shall desire to construct any Improvements to the
exterior of a Residence after such Residence has been completed and
approved by the City, Declarant shall obtain approval for such
Improvements from the City; and, provided further, if Declarant
shall retain a Residence for personal use, any Improvements to the
exterior of such Residence shall be subject to architectural ap-
proval pursuant to this Article. ^
Section 2. Architectural Control. Except for the pur-
poses of proper maintenance and repair, and except as otherwise
permitted hereunder, no person shall install any Improvement, in-
cluding, without limitation, solar heating panels, lighting,
shades, screens, awnings, patio covers, decorations, fences, screen
doors, aerials, antennas, radio or television broadcasting or
receiving devices, air conditioning units, or change or otherwise
alter the exterior of any Residence or appurtenant Improvement. For
the purposes of this Section, the term "exterior" shall mean any
outside wall, outside surface, roof, outside door, patio, balcony,
deck, garage or other outside structure of said Residence which is
visible to others in the Project and/or to the public.
Section 3. Architectural Control Committee. The
Architectural Control Committee is hereby authorized with the
rights and powers set forth in this Article. Said Committee shall
consist of not less than three (3) members, nor more than five (5)
members, and each initial member shall serve until the first
election of the Board. In the event of the failure or inability of
any member of the Architectural Control Committee to act, the
remaining members shall designate a successor who shall serve for
the remainder of the term of the member he replaces. The Declarant
shall appoint all of the original members of the Architectural
Control Committee, and replacements thereto. Further, Declarant re-
serves the power to appoint a majority of the members of the Ar-
chitectural Control Committee until the fifth (5th) anniversary of
the issuance of the Final Subdivision Public Report for the first
phase of the Project. After one (1) year from the date of the
issuance of the Final Subdivision Public Report for the Project,
the Board shall have the power to appoint one (1) member to the Ar-
chitectural Control Committee until ninety percent (90%) of the
Lots in the Project have been sold, or until the fifth anniversary
50Q19.008-4200.FCM 120399 -66-
date of the issuance of the Final Subdivision Public Report for the
first Phase of the Project, whichever first occurs. Thereafter, the
Board shall have the power to appoint all of the members of the
Architectural Control Committee. All members appointed to the
Architectural Control Committee by the Board shall be from the
membership of the Association. Members appointed to the Architec-
tural Control Committee by the Declarant, however, need not be
members of the Association. No member of the Architectural Control
Committee shall be liable to any person for his decisions or
failure to act in making decisions as a member of the Architectural
Control Committee. Declarant' may, in its discretion and at any
time, assign to the Association by written assignment its powers of
removal and appointment with respect to the Architectural Control
Committee, subject to such terms and conditions regarding the exer-
cise thereof as Declarant may impose.
Section 4 . Meetings of the Architectural Control Com-
mittee. The Architectural Control Committee shall meet, from time
to time, as necessary to perform its duties hereunder. The Archi-
tectural Control Committee may, by a majority vote of the members
thereof, delegate any of its rights and responsibilities hereunder
to one (1) ''or more duly licensed architects, who shall have full
authority to act on behalf of the Architectural Control Committee
on all matters so delegated.
Section 5. Architectural Standards/Guidelines. The
Board (or Architectural Control Committee if authorized by a
majority of the Board) mayy from time to time, adopt architectural
standards/guidelines to be administered through the Architectural
Control Committee for use by said Committee in reviewing plans and
specifications for proposed Improvements to an Owner's Lot. The
architectural standards/guidelines may include, without limitation,
those guidelines, procedures, limitations and restrictions upon
Owners set forth below:
(a) No Residence shall be located on any Lot nearer
to the front Lot line or nearer to the side street line than
the minimum building setback lines established by the appro-
priate governmental entity.
(b) The roof of all portions of the Residence,
garage or other outbuilding constructed on a Lot shall be of
substantially identical style, construction, and materials.
(c) No Owner shall convert or modify, any garage in
any manner which would preclude such garage from being used
for parking the number of four (4) wheel automotive vehicles
therein for which it was originally designed.
(d) No toolsheds and other outbuildings shall be
constructed upon any Lot in the Project, without taking into
account and being compatible with the size and orientation of
50019.008-4200.FCM 120399 -67-
the Lot, and any existing structures thereon, including such
restrictions as setbacks, size, location, architectural style,
shape, design, color, materials, and finish.
(e) Any and all structures constructed, or caused
to be constructed, on a Lot by an Owner shall be of uniform
architectural style, color, materials, and construction as
that of the Residence originally built by the Declarant.
(f) The placement, reconstruction, addition, change
or alteration of any Improvement on a Lot or the exterior of
a Residence, including the nature, kind, shape, materials, ex-
terior color, location, and height of any Improvement,
including landscaping;
(g) A description of the type of such construction,
additions, changes or alterations which, if completed in
conformity with the architectural standards, do not require
approval of the Architectural Control Committee;
(h) Conformity of completed Improvements to plans
and specifications approved by the Architectural Control
Committee;
(i) Time limitations for the completion of the
Improvements for which approval is required pursuant to the
architectural standards;
(j) Procedures for submission of plans and speci-
fications submitted for Architectural Control Committee re-
view, including, without limitation, floor plans, site plans,
drainage plans, elevation drawings, landscape plans and a
description or samples of exterior colors and materials;
(k) Restrictions controlling the species and place-
ment of any trees, plants, shrubbery, ground cover, etc., to
be placed, planted, irrigated and maintained in the Project
(i.e., approved landscape palettes);
(1) Restrictions controlling the'placement of any
trees, plants, shrubbery, ground cover, etc., to be placed
planted, irrigated and maintained in the Project (including
requirements regarding the use of root barriers and/or other
similar devices to prevent damage to Residences, hardscape and
other Improvements); and
(m) A reasonable schedule of fees for submission of
plans and specifications or bonds (or cash deposits) to ensure
proper completion and clean up of the anticipated work and
compliance with the approved plans.
50019.008-4200.PCM 120399 -68-
The architectural standards may be periodically updated or revised
by the Board, as the Board, in its reasonable discretion, may deem
appropriate. The Architectural Control Committee shall maintain a
copy of the then current architectural standards on file at all
times, and shall provide each Owner with a copy of the architectur-
al standards upon written request. The Board shall establish a
reasonable fee for copies of the architectural standards, and other
related materials, to cover costs of reproduction, administration
and handling.
•*"
Section 6. Architectural Approval - Review of Plans
and Specifications. The Architectural Control Committee shall
comply with the Architectural guidelines/standards adopted by the
Board (including any supplementary Rules and Regulations thereto
adopted by the Board) to examine any request made pursuant to this
Article, in order to ensure that the proposed plans are in confor-
mance with and are harmonious to the exterior design and existing
materials of the buildings in the Project. The Architectural Con-
trol Committee shall consider and act upon any and all plans and
specifications submitted for its approval under this Declaration,
and perform such other duties as, from time to time, shall be
assigned td it by the Board, including the inspection of construc-
tion and progress to ensure its conformance with the plans approved
by the Architectural Control Committee. No construction, alter-
ation, grading, addition/,, excavation, demolition, modification,
decoration, redecoration or reconstruction of an Improvement shall
be commenced or maintained by any Owner until the plans and
specifications therefor showing the nature, kind, shape, height,
width, color, materials and location of the same shall have been
submitted to the Architectural Control Committee and approved in
writing by the Architectural Control Committee. The initial address
for submission of such plans and specifications, until changed by
the Architectural Control Committee, shall be:
"Architectural Control Committee -Sunny Creek"
c/o The Terraces at Sunny Creek, LLC,
2006 Palomar Airport Road, Suite 113
Carlsbad, California 92008
Attention: Marketing Department
The Architectural Control Committee shall approve the plans and
specifications submitted for its approval only if it deems that:
(a) the construction, alterations or additions contemplated thereby
and the locations indicated will not be detrimental to the
appearance of the surrounding area of the Project as a whole; (b)
the appearance of any structure affected thereby will be in harmony
with surrounding structures; (c) the construction thereof will not
detract from the beauty, wholesomeness and attractiveness of the
Common Area, or the enjoyment thereof by the Owners; (d) the upkeep
and"maintenance thereof will not become a burden on the Associa-
tion; and (e) the plans and specifications substantially comply
with the Architectural standards/guidelines. The Architectural
50019.008-4200.FCM 120399 -69-
Control Committee may condition its approval of proposals or plans
and specifications for any Improvement: (a) on such changes therein
as it deems appropriate, (b) upon the agreement by the person
submitting the same to grant appropriate easements to the Associa-
tion for the maintenance of the Improvement, or (c) upon the
agreement of the person submitting the same to reimburse the
Association for the cost of such maintenance, or all of the above,
and may require submission of additional plans and specifications
or other information prior to approving or disapproving the
submission.
The Architectural Control Committee may also issue rules
or guidelines setting forth procedures for,,,- submission of plans for
approval, requiring a payment of a fee to the Association to
accompany each submission of plans and specifications, or ad-
ditional factors which it will take into consideration in reviewing
submissions which are consistent with the Architectural stan-
dards/guidelines .
The Architectural Control Committee may require such
detail in plans and specifications submitted for its review as it
deems proper, including, without limitation, floor plans, site
plans, drainage plans, elevation drawings, landscape plans and
description or samples of exterior material and colors.
Section 7. Decisions of the Architectural Control
Committee. Until receipt by the Architectural Control Committee of
any required plans and specifications, and such other information
as may be required in Section 6 above, the Architectural Control
Committee may postpone review of any plans submitted for approval.
Decisions of the Architectural Control Committee and the reasons
therefor should be transmitted by the Architectural Control
Committee to the applicant, at the address set forth in the ap-
plication for approval, within forty-five (45) days after receipt
by the Architectural Control Committee of all plans, specifications
and materials required. Any application submitted pursuant to the
provisions of Section 6 above shall be deemed approved, unless
written disapproval or a request for additional information or
materials by the Architectural Control Committee shall have been
transmitted to the applicant within forty-five (45) days after the
receipt by the Architectural Control Committee of all required
materials.
Section 8. Submittal to City - Right of Architectural
Control Committee to Review. Upon obtaining the written approval of
the Architectural Control Committee, the Owner shall thereafter
submit plans and specifications to the City. In the event that all
necessary approvals of the City for the issuance of a building
permit or other permits required to commence the work contemplated
in the plans and specifications are not obtained within six (6)
months from the date of approval by the Architectural Control
Committee, the Architectural Control Committee shall have the
50019.008-4200.PCM 120399 -70-
right, but not the obligation, to re-review all previously approved
plans and specifications. In addition, in the event that the City
requires modifications to the plans and specifications previously
approved by the Architectural Control Committee, the Owner shall
submit to the Architectural Control Committee all modifications to
the plans and specifications previously approved by the Architec-
tural Control Committee. In the event the Owner is obligated to
resubmit plans and specifications to the Architectural Control
Committee to reflect the modifications required by the City, said
Committee shall have the right to review and to impose further
conditions on any such modifications.
Section 9. Approval of City. Approval of any proposed
or existing Improvement, or completion of an Improvement, by the
Architectural Control Committee or the Board shall not be construed
to warrant or represent in any way that the Improvement was
approved by or complies with the minimum standards of the City.
Similarly, approval of any proposed or existing Improvement by the
City shall not be construed to constitute approval of such
Improvement by the Architectural Control Committee or the Board.
Section 10. Conflicts Between City and Architectural
Control Committee. In the event of any conflict in the conditions
of approval of any proposed Improvements imposed by the City and
the Architectural Control Committee, the more restrictive of such
conditions shall be controlling. Further, nothing herein shall
limit the Architectural Control Committee from imposing conditions
of approval of any proposed Improvements which are more restrictive
than conditions as may be imposed by the City.
Section 11. No Waiver of Future Approvals. The approv-
al of the Architectural Control Committee to any submissions for
any work done, or proposed to be done, or in connection with any
other matter requiring the approval or consent of the Architectural
Control Committee, shall not be. deemed to constitute a waiver of
any right to withhold approval or consent of any similar proposals,
plans and specifications, drawings or other matters subsequently or
additionally submitted for approval.
Section 12. Compensation of Members. The members of
the Architectural Control Committee shall receive no compensation
for services rendered, other than reimbursement by the Association
for expenses incurred in the performance of such members' duties
hereunder.
Section 13. Variances. Where circumstances such as to-
pography, location of buildings, location of landscaping or other
matters require, the Architectural Control Committee, by the vote
or written assent of a majority of the members thereof, may allow
reasonable variances as to any of the Protective Covenants con-
tained in this Declaration or provisions under the rules and
regulations promulgated by the Architectural Control Committee, on
B0019.008-4200.PCM 120399 -71-
such terms and conditions as it shall require. The granting of such
a variance shall not operate to waive any of the terms and
provisions of this Declaration for any purpose, except as to the
particular Lot and particular provision hereof covered by the
variance, nor shall it affect in any way the Owner's obligation to
comply with all governmental laws and regulations affecting the
Owner's use of his Lot, including, but not limited to, zoning
ordinances, Lot setback lines or requirements imposed by the City
or other governmental authority.
Section 14. Inspection of Work. Upon consent of the
Owner, which consent shall not be unreasonably withheld, any member
or authorized representative of the Architectural Control Committee
may, at any reasonable hour and upon reasonable notice, enter and
inspect any Lot which has been the subject matter of an approval of
a submission for an Improvement to his Lot. Such entry shall be
made with as little inconvenience to the Owner as reasonably
possible, and any damage caused thereby shall be repaired by the
Association. If the Architectural Control Committee finds that such
work was not done in substantial compliance with the approved plans
and specifications, it shall notify the Owner in writing of such
noncompliance, specifying the particulars of noncompliance and
shall require the Owner to.remedy the same within thirty (30) days
from the date of notification of such noncompliance. If a noncom-
pliance exists, the Board, after Notice and Hearing, may levy a
Compliance Assessment against such Owner for the costs of removing
or remedying such noncompliance.
Section 15. Non-Liability of Architectural Control
Committee Members. Neither Declarant, the Association, the Board or
the Architectural Control Committee, or the members or designated
representatives thereof, shall be liable for damages to any Owner
submitting plans or specifications to them for approval, or to any
Owner in the Project affected by this Declaration by reason of
mistake in judgment, negligence or nonfeasance, unless due to
willful misconduct or bad faith of the Architectural Control Com-
mittee. The Architectural Control Committee's approval or disap-
proval of a submission shall be based solely on the considerations
set forth in this Article, and in such rules and regulations as may
be promulgated by the Architectural Control Committee, and the
Architectural Control Committee shall not be responsible for
reviewing, nor shall its approval of any plan or design be deemed
approval of, any plans or design from the standpoint of structural
safety and conformance with building or other codes.
Section 16. Appeal. In the event plans and specifica-
tions submitted to the Architectural Control Committee are disap-
proved, the party making such submission may appeal in writing to
the Board. The written request must be received by the Board not
more than thirty (30) days following the final decision of the
Architectural Control Committee. The Board shall submit such re-
quest to the Architectural Control Committee for review, and the
50019.008-4200.FCM 120399 -72-
written recommendations of the Architectural Control Committee will
be submitted to the Board. Within forty-five (45) days following
receipt of the request for appeal, the Board shall render its
written decision. The failure by the Board to render a decision
within said forty-five (45) day period shall be deemed a decision
in favor of the party making such submission.
Section 17. Grading/Irrigation. No Owner shall permit
any act to be performed on such Owner's Lot which would result in
erosion of the Common Area, including, but not limited to, changing
the grading of his Lot or 'over-irrigating same. If the Owner
permits any such act resulting in erosion of or other damage to the
Common Area, said Lot Owner will be personally liable to the
Association for such damage and a Special Assessment shall be
levied against such Lot Owner's Lot to recover all costs and
expenses incurred to repair or reconstruct that portion of the
Common Area damaged by such Lot Owner.
Section 18. Public Right-of-Way. No Owner shall
construct any Improvement in the public right-of-way or public
utility easement adjacent to or within the Project, if applicable,
unless the ) Owner obtains all necessary permits from the City,
public utility company, and approval from the Board, as necessary.
Section 19. Perimeter Wall. In the event that the
Architectural Control Committee determines that it is reasonably
necessary for an Owner to temporarily remove an Association Wall in
order to -install a pool, spa or other Improvement in his or her
rear yard, the Architectural Control Committee may authorize such
temporary removal subject to the conditions, _including but not
limited to: (1) the Owner, at his or her sole cost, shall recon-
struct the Association Wall with substantially the same types of
materials as originally used by Declarant and restore any damaged
Common Area to substantially the same condition as existed prior to
such work; (2) if applicable, the Owner shall re-stucco and/or
repair an extended portion of the Association Wall as reasonable
necessary to avoid a patched appearance; and (3) obtain all
approvals and permits as provided in this Declaration.
ARTICLE X
REPAIR AND MAINTENANCE
Section 1. Repair and Maintenance by Association.
Without limiting the generality of the Article herein entitled
"Powers and Duties of the Association," the Association shall have
the duty to maintain, in a neat, clean, safe, sanitary, attractive
and orderly condition at all times, the Common Area designated in
this Declaration, or in any subsequent Notice(s) of Annexation
(e.g., all concrete terrace drains (brow ditches) located within
the Common Area owned in fee by the Associaiton, all private
_ 7-3 _50019.008-4200.PCM 120399 ' °
streets, sidewalks, fences, walls, gates, monuments and other
improvements located within the Common Area ) shall be kept in good
maintenance and repair by the Association, as generally indicated
hereinbelow-. ••>
(a) The Common Area (and all Improvements thereon,
including the sidewalks) to be maintained, landscaped,
repaired, improved, restored and replaced in a neat, clean,
safe, attractive and orderly condition at all times shall
include, but not be limited to, the following:
(1) Trimming, fertilizing and cutting all
landscaped areas, including those landscaped areas to
keep such areas free of weeds, dead vegetation and
debris;
(2) Cleaning any debris from Common Area
drainage swales, devices, or water pollution interceptors
and conducting regular inspections of all Common Area
drainage devices (which does not include any drainage
swale on an Lot);
(3) Unless otherwise maintained, parkways and
exterior surfaces (defined to mean the side fronting any
public right-of-way or the Common Area) and the top
portion of all Project perimeter block walls, retaining
walls, and landscaping areas (See Exhibit "F") originally
constructed by Declarant and approved by the City;
(4) All other areas, facilities, equipment,
services, aesthetic components or other Improvements of
whatever nature as may constitute Common Area or be, from
time to time, set forth in any Notice of Annexation; and
(5) Performing all necessary tasks required to
conform with applicable City, County and/or State regula-
tions.
(b) Maintain all other areas, facilities, furni-
ture, equipment, services or aesthetic components of whatso-
ever nature as may, from time to time, be requested by the
vote or written consent of three-fourths (3/4) of the voting
power of the Members; and
(c) Except as otherwise herein specified as being
paid by individual Owners, the costs of maintenance, repair,
restoration and replacement as provided in this Article shall
be Common Expenses and shall be paid out of the general fund
of the Association.
Section 2 . Repair and Maintenance by Owner. Except as
the Association shall be obligated to maintain and repair as may be
50019.008-4200.FCM 120399 -74-
provided in this Declaration, separate agreement, or a recorded
tract map for the Project every Owner shall:
(a) Maintain his Lot and the Residence located
thereon, including, without limitation, all side yard and rear
yard walls and fences (but excepting therefrom the exterior
surfaces and structural integrity of any Project perimeter
wall or fence which a*re maintained by the Association and the
retaining walls, if any or any Common Area located thereon,
e.g., front yard landscaping or slope landscaping), roofs,
drainage swales, patios, patio covers, decks, deck covers,
balconies, windows, window frames, screens, locks and doors of
his Residence, landscaping and irrigation improvements,
irrigation lines, sewer laterals, and all other Improvements
located on or which solely provide service to such Owner's Lot
in a neat, clean, safe and attractive condition at all times,
and make all repairs as they may be required. Each Owner shall
be obligated to maintain any fence or wall (including the
structure and both the interior and exterior surfaces) which
separates the Owner's Lot from another Owner's Lot (except the
Assocaition) , unless an easement for such maintenance is
conveyed to the Association as depicted on Exhibit "F"
attached hereto or in a Notice of Annexation. Each Owner shall
be responsible to maintain the interior surface of any fence
or wall which separates the Owner's Lot from another Lot
(excluding the Common Area lots) and both adjoining Owners
shall be responsible to share equally in the costs to repair
or replace any such fence or wall which separates their Lots.
However, an Owner shall not be responsible for the costs to
repair or replace a fence which is damaged iy the other Owner.
Each Owner of a Lot shall water, weed, maintain and care for
,. the landscaping located on his or her Lot (other than any
portion which is within the Common Area or a public mainte-
nance assessment district) so that the same presents a neat
and attractive appearance. No Owner shall interfere with or
damage the Common Area or improve or alter the Common Area or
interfere with or impede Declarant, the Association or a
public maintenance assessment district in connection with the
maintenance of the Common Area. No Owner shall interfere with
or damage any other improvements in the area between the
Owner's Lot and the sidewalk or curb such as street lights,
transformers, CATV hookups, sewer mains, or storm drains; and
(b) As noted earlier, install, within a reasonable
period of time after conveyance of title to a Lot to an Owner,
but in no event later than six (6) months after the close of
escrow for the sale of a Lot to Owner from Declarant, the
landscaping of that portion of Owner's Lot which was not
installed by Declarant, in a neat and attractive condition,
including all necessary landscaping and gardening, to properly
maintain and periodically replace, when necessary, the trees,
plants, grass and other vegetation originally placed on such
50019.008-4200.FCM 120399 -75-
Lot by Declarant, if .any. Each Owner shall also be responsible
to install and maintain landscaping between the edge of the
sidewalk or curb of the private street which adjoins the
Owner's Lot and the Lot boundary. Declarant hereby reserves
an easement over the Common Area for such purposes. The
landscaping shall be installed by an Owner in such area at the
same time as the Owner installs the other landscaping in his
or her Lot. In the event that any Owner shall fail to install
and maintain landscaping, including all slope areas within the
Lot, in conformance with any Rules and Regulations, or shall
allow his landscaping to deteriorate to a dangerous, unsafe,
unsightly or unattractive condition, the Board, after Notice
and Hearing, may enter such Owner's property for the purpose
of remedying the condition, and such Owner shall promptly
reimburse the Association for the cost thereof. Such cost may
be levied by the Board as a Compliance Assessment.
Section 3. Maintenance of Public Utilities. Nothing
contained herein shall require or obligate the Association to
maintain, replace or restore the public facilities or utilities
which are located within easements in the Common Area owned by such
public utilities. However, the Association shall take such steps as
are necessary or convenient to ensure that such facilities are
properly maintained, replaced or restored by such public utilities.
Section 4. Damage and Destruction Affecting a Resi-
dence - Duty to Rebuild. In the event any Residence is damaged or
destroyed by fire or other casualty, it shall be the duty of the
Owner of such Residence to repair or reconstruct said Residence in
a manner which will restore it to its condition and appearance
immediately prior in time to such damage or destruction. The
affected Owner shall be obligated to proceed, with all due dili-
gence hereunder, and shall be responsible for commencing recon-
struction within three (3) months after the damage occurs, and
completing such reconstruction as soon as reasonably possible
thereafter.
Section 5. Owners' Cooperation for Maintenance. The
Owners of Residences which are located on adjoining Lots shall
cooperate with each other as is reasonably necessary to enable each
Owner to properly maintain and repair his respective Residence
and/or to mitigate any damage to his Residence.
Section 6. Maintenance Manual. The Declarant may
deliver to the Board a "Maintenance Manual" which sets forth the
Declarant's and its consultants' recommended frequency of inspec-
tions and maintenance of various components of the Common Area.
The Board shall, during its meetings, determine whether the
recommended inspections and maintenance activities have been
followed, and, if any such recommendations have not been followed,
what corrective steps need to be taken to ensure proper inspection
and maintenance of the Common Area. The Board shall keep a record
50019.008-4200.FCM 120399 -76-
of such determinations in the Board's minutes. The Board shall,
from time to time, make appropriate revisions to the Maintenance
Manual as deemed necessary. The Board shall review the Maintenance
Manual for appropriate revisions at least on an annual basis after
the Board has prepared the annual pro forma budget and reserve
study required by the By-Laws or law.
In the absence of a Maintenance Manual, the Board shall
have the Common Area inspected at least once every three (3) years
to (a) determine whether the Common Area is being maintained
adequately in accordance with the standards of maintenance
established herein, (b) identify the condition of the Common Area
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 preventative actions which may be taken to reduce
potential maintenance costs to be incurred in the future. The
Board may employ such experts and consultants as are necessary to
perform such inspection. The Board shall have a report of the
results of the inspection prepared. The report may be furnished to
Owners, as determined necessary by the Board, within the time set
forth for furnishing Owners with the budget. The report shall
include at least the following:
(a) A description of the condition of the Common
Area, 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 Board to
perform inspections;
(e) A report of the status of compliance with the
maintenance, replacement and repair needs set forth in the
inspection report for preceding years; and
(f) Such other matters as the Board deems appropri-
ate .
S0019.008-4200.PCM 120399 -77-
Section 7. Levy of Compliance Assessments. In the
event the Association shall incur any costs or expenses due to the
failure of any Owner to perform his maintenance obligations as set
forth herein, or in order to repair any damage to the Common Area
due to any negligent acts or omissions or willful misconduct on the
part of an Owner, or any member of his family, his guests,
invitees, tenants or lessees, or their guests or invitees, the
Association shall have the right, but not the duty, to cause such
maintenance or repairs to be performed. If the Board elects to
cause such maintenance or repair work to be performed, after Notice
and Hearing as provided in the By-Laws, the cost thereof shall be
assessed against said Owner as a Compliance Assessment.
Section 8. Maintenance of Phases Subject to Construc-
tion Easement. Notwithstanding anything stated to the contrary in
this Declaration, the Association shall have no obligation to
maintain or repair any portion of a Phase until commencement of the
Association's Assessments against the Residences within such Phase.
Should any Improvements overlap between Phases, the Association
shall only be responsible to maintain ^ that portion of such
Improvements which lie in the Phase(s) in "which the Association's
maintenance' obligations have commenced.
ARTICLE XI
DAMAGE OR DESTRUCTION TO
THE COMMON AREA
Section 1. Restoration of Damaged-Common Area. Except
as otherwise provided in Section 2 hereinbelow, damage to or de-
struction of all or any portion of the Common Area shall be handled
in the following manner:
(a) In the, event of damage to or destruction of the
Common Area, and the' insurance proceeds are sufficient to
effect total restoration, the Association shall, as promptly
as is practical, cause the Common Area to be repaired and
reconstructed in a good workmanlike manner.to its condition
prior to such damage or destruction.
(b) If the insurance proceeds available are at
least ninety percent (90%) of the estimated cost of total
repair and reconstruction to the Common Area, the Association
shall, as promptly as practical, cause such Common Area to be
repaired and reconstructed in a good workmanlike manner to its
condition prior to the damage or destruction, and the differ-
ence between the insurance proceeds and the actual cost shall
be levied by the Association as a Special Assessment against
each of the Lots on an equal basis.
50019.008-4200.PCM 120399 -78-
(c) If the insurance proceeds available are less
than ninety percent (90%) of the estimated cost of total
repair and reconstruction to the Common Area, the Owners
shall, by the written consent or vote of a majority of the
Owners, determine whether:
(1) To restore the Common Area as promptly as
practical to its condition prior to the damage or
destruction, and to raise the necessary funds over and
above the insurance proceeds available by levying Assess-
ments against each''of the Lots on an equal basis; or
(2) To restore the Common Area in a way which
utilizes all available proceeds and an additional amount
not in excess of ten percent (10%) of the estimated cost
of total reconstruction and repair to the Common Area,
and which is assessable as provided above to all Lots,
but which is less expensive than restoring the Common
Area to its condition prior to the damage or destruction.
Section 2. Election by Owners Not to Restore Damaged
Common Area.
(a) Notwithstanding the provisions set forth in
Section 1 hereinabove, in the event sixty-seven percent (67%)
of the Owners, other than Declarant, and sixty-seven percent
(67%) of the first Mortgagees (based upon one [1] vote for
each Lot encumbered by said Mortgagee's first Mortgage) have
given their prior written approval, the Owners may not elect
to rebuild or restore the Common Area and to disburse the
available insurance proceeds to the general fund of the
Association.
(b) In the event the Owners shall have so voted not
to rebuild the Common Area, the Common Area shall be cleared
and landscaped and the cost thereof shall be paid for out of
the available insurance proceeds prior to their distribution
to the general fund of the Association.
v
(c) In the event the Owners shall have so voted not
to rebuild the Common Area, unless the City shall agree to the
contrary, it shall be the obligation of the Association and
each of the Owners to rebuild the private utilities and open
spaces, at least to the extent said utilities and open spaces
were accepted initially by the City in lieu of payment of fees
due pursuant to law.
Section 3_. Retention of Excess Insurance Proceeds in
General Fund. In the event any excess insurance proceeds remain
after restoring the destroyed Common Area pursuant to this Article,
the Board shall retain such sums in the general fund of the
Association.
50019.008-4200.PCM 120399 -79-
ARTICLE XII
CONDEMNATION
Section 1. Distribution of Awards - Common Area. A
condemnation award affecting all or any portion of the Common Area
shall be remitted to the general fund of the Association.
Section 2. Board of Directors as Attorney-in-Fact.
All Owners hereby appoint .the Board as their special attorney-in-
fact to handle the negotiations, settlements and agreements per-
taining to any condemnation affecting only the Common Area.
ARTICLE XIII
•sf
COVENANT AGAINST PARTITION
Section 1. Covenant Against Partition. By acceptance
of his deed, each Owner shall be deemed to covenant for himself,
and for his I heirs, representatives, successors and assigns, that he
will not institute legal proceedings to effect judicial partition
of his interest in the Project, unless the Project: (a) has been in
existence in excess of fifty (50) years, (b) is obsolete and
uneconomical, and (c) the Owners of fifty percent (50%) of the
total of all Lots in the Project join in such action for partition.
ARTICLE XIV
.-,. INSURANCE
Section 1. Required Insurance Coverage. The Associa-
tion, acting by and through the Board, shall obtain for the Asso-
ciation and shall maintain and pay the premiums for the following
insurance coverage:
(a) Casualty and Fire Insurance. A policy or
policies of casualty and fire insurance with extended coverage
endorsement in an amount equal to one hundred percent (100%)
of the current replacement cost (without deduction for
depreciation or co-insurance) of the Common Area, together
with all Improvements located thereon. Said policies shall be
primary and maintained for the benefit of the Association, the
Owners and the Mortgagees, as their interests shall appear,
and shall waive the right of subrogation against Owners, if
obtainable. If obtainable, the deductible shall be the lesser
of Ten Thousand Dollars ($10,000) or one percent (1%) of the
policy face amount. Such policy must be written by an insur-
ance carrier that meets the requirements of FNMA and/or FHLMC,
as applicable. The coverage does not need to include land,
50019.008-4200.PCM 120399 ~8Q-
foundations, excavations or other items normally excluded from
such coverage. Such policy or policies must contain, if
required and if obtainable:
(1) An Agreed Amount and Inflation Guard
Endorsement;
(2) Construction Code Endorsements (such as
Demolition Cost Endorsement) ;
(3) A Contingent Liability from Operation of
Building Laws Endorsement; and
(4) An Increased Cost of Construction En-
dorsement, if there is a construction code provision
which would become operative and require changes to
undamaged portions of any Improvements or the Common
Area.
(b) Public Liability Insurance. A policy or pol-
icies of full coverage public liability insurance (with cross-
liabillity endorsement, if obtainable) insuring the Associ-
ation, the Board, the Owners, the Declarant, and the agents
and employees of each of the foregoing against any liability
to the public or to any Owner, his family, invitees and/or
tenants, arising from or incident to the ownership, occupa-
tion, use, maintenance and/or repair of the Common Area. The
limits of liability under this Section shall be set by the
Board and shall be reviewed at least annually by the Board and
increased or decreased at the discretion of the Board;
provided, however, that said limits shall not be less than
Three Million Dollars ($3,000,000.00) for bodily injury,
including deaths of persons and property damage arising out of
a single occurrence; and, provided further, that if FHLMC
and/or FNMA participate in the financing of Lots in the
Project, said limits shall not be less than the minimum limits
required under the then current FHLMC and/or FNMA regulations.
(c) Fidelity Bonds . Officers' and Directors' errors
and omissions insurance, and fidelity bonds naming all persons
signing checks or otherwise possessing fiscal responsibilities
on behalf of the Association, including, but not limited to,
officers, Directors, trustees and employees of the Associa-
tion, and officers, employees and agents of any management
company employed by the Association who handle or are respon-
sible for the administration of Association funds. Such
coverage shall be in an amount deemed reasonably appropriate
by the Association, but shall not be less than the estimated
maximum funds, in the custody of the Association, or twenty-
five percent (25%) of the estimated annual operating expenses
of the Project, plus reserves, whichever is greater. In addi-
tion, if the Association enters into an agreement for pro-
50019.008-4200.PCM 120399 -81-
fessional management of the Project, the Association shall
require such company to submit evidence of its fidelity bond
coverage to the same extent as the Association's coverage. The
Association shall be named as an additional obligee in the
management agent's bond.
Section 2. Optional Insurance Coverage. The Associa-
tion, acting at its option and by and through the Board, may pur-
chase such additional coverage or other insurance as it may deem
necessary or appropriate, or otherwise financially beneficial for
the Owners, including, but riot limited to, earthquake insurance,
flood insurance, Workers' Compensation Insurance and plate glass
insurance. ^
Section 3. Notice of Cancellation of Insurance. All
policies of insurance maintained by the Association pursuant to
this Article shall contain a provision that coverage under said
policies may not be canceled, terminated, allowed to expire by
their own terms, or be substantially modified by any party without
at least thirty (30) days' prior written notice to the Board, to
each Owner j and to such first Mortgagees who have filed written
requests with the Association for such notice. A list of the Owners
and such first Mortgagees shall be made available by the As-
sociation to the insurance carrier upon request.
Section 4. Review of Coverage. The Board shall annu-
ally determine whether the amounts and types of insurance coverage
that it has obtained pursuant to this Article shall provide
adequate coverage for the" Project, based upon the then current
construction costs, insurance practices in the- area in which the
Project is located and all other factors which may indicate that
either additional insurance coverage or increased coverage under
the existing policies is necessary or desirable to protect the
interests of the Association, the Owners and their respective
Mortgagees. If the Board determines that increased coverage or
additional insurance is appropriate, it shall obtain same.
Section 5. Waiver by Owners. As to all policies of
insurance maintained by the Association which will not be voided or
impaired thereby, each Owner hereby waives and releases all claims
against the Association, the Board, the Declarant and the agents
and employees of each of the foregoing, and all other Owners, with
respect to any loss covered by such insurance, whether or not
caused by the negligence of, or breach of, any agreement by said
persons, but only to the extent of the insurance proceeds received
in compensation for such loss.
Section 6. Premiums, Proceeds and Settlement. Insur-
ance premiums for all blanket insurance coverage and any other
insurance coverage which the Board has determined is necessary to
protect the interests of the Association, the Owners and their
respective Mortgagees, shall be a Common Expense to be included in
50019.008-4200.FCM 120399 -82-
the Regular Assessments levied by the Association. All insurance
proceeds paid to the Association shall be disbursed as follows: (a)
in the event of any damage or destruction to the Common Area, such
proceeds shall be disbursed in accordance with the provisions of
the Article herein entitled "Damage or Destruction to the Common
Area"; and (b) in the event of any other loss, the proceeds shall
be disbursed as the Board shall deem appropriate, subject to the
limitations set forth in the Article herein entitled "Mortgagee
Protection." The Association is hereby granted the authority to
negotiate loss settlements with the appropriate insurance carriers.
Any two (2) Directors may .sigh a loss claim form and release form
in connection with the settlement of a loss claim, and such
signatures shall be binding on the Association and its Members.
Section 7. Rights and Duties of Owners to Insure.
Each Owner shall obtain fire and casualty insurance on his
Residence in amounts he deems appropriate. Since the Association is
not obligated to provide insurance for the Residences, nothing
herein shall preclude any Owner from carrying any casualty and fire
insurance for his Residence and all personal property within his
Residence, .and/or public liability insurance as he may deem
desirable t<p cover his individual liability for damage to person or
property occurring inside his individual Lot or elsewhere upon the
Project. Each Owner hereby acknowledges and agrees that the
Association does not maintain any property or liability insurance
for an Owner's Lot. If obtainable, such liability insurance
coverage carried by an Owner shall contain a waiver of subrogation
of claims against the Declarant, the Association, the Board, their
agents and employees, and all other Owners. Such other policies
shall not adversely affect or diminish any liability under
insurance obtained by the Association. If any loss intended to be.
covered by insurance carried by the Association shall occur and the
proceeds payable thereunder shall be reduced by reason of insurance
carried by any Owner, such Owner shall assign the proceeds of such
insurance carried by him to the Association to the extent of such
reduction for application by the Board to the same purposes as the
reduced proceeds are to be applied.
Section 8. Trustee for Policies. The Association is
hereby appointed and shall be deemed trustee for the interests of
all insureds under the policies of insurance maintained by the
Association. All insurance proceeds under such policies shall be
paid to the Board, as trustees, and the Board shall have full power
to receive such funds on behalf of the Association, the Owners and
their respective Mortgagees, and to deal therewith as provided for
in this Declaration.
Section 9. Mortgage Clause. All insurance policies
should have the "standard mortgage clause," or equivalent en-
dorsement, providing that coverage of a Mortgagee under the in-
surance policy will not be adversely affected or diminished by an
act or neglect of the Mortgagor, which is commonly accepted by
50019.008-4200.PCM 120399 -83-
private institutional mortgage investors in the area in which the
Project is located, unless such coverage is prohibited by ap-
plicable law. Mortgages owned by FNMA must name as a Mortgagee
either FNMA or the servicers for the Mortgages held by FNMA en-
cumbering the Residences. When a servicer is named as the Mort-
gagee, its name should be followed by the phrase "its successors
and assigns." If the Mortgage is owned in whole by FHLMC, .the name
of the servicer of the Mortgage followed by the phrase "its
successors and assigns, beneficiary" should be named as Mortgagee
instead of FHLMC. The mortgage clause should be endorsed to fully
protect FHLMC's interests or the interest of FHLMC and the servicer
where applicable. If FHLMC must be named as Mortgagee, the
endorsement should show the servicer's address in lieu of FHLMC's
address. A mortgage clause in favor of Mortgagees holding Mort-
gages on Residences is not required on a policy insuring the Common
Area.
Section 10. Compliance With Requirements of FHLMC,
FNMA, and VA/FHA. Notwithstanding the provisions of this Article,
the Association shall obtain and maintain in effect such policies
of insurance meeting all requirements of FHLMC, FNMA, and VA/FHA
established'by those entities for planned development projects for
so long as any of such agencies continue to be a Mortgagee, Owner,
insurer or guarantor of a.Mortgage in the Project, except to the
extent such coverage is not available or has been waived, in
writing, by such agencies.
Section 11. Required Waiver. All policies of hazard
and physical damage insurance may provide, only if available at a
reasonable cost to the Association as determined by the Board, in
its sole discretion, for waiver of the following rights, to the
extent that the respective insurers would have the rights without
such waivers:
(a) Any defense based on co-insurance;
(b) Any right of set-off, counterclaim, apportion-
ment, proration or contribution by reason of other insurance
not carried by the Association;
(c) Any invalidity, other adverse effect or defense
on account of any breach of warranty or condition caused by
the Association, any Owner or any tenant of any Owner, or
arising from any act, neglect or omission of any named
insured, or the respective agents, contractors and employees
of any insured;
(d) Any right of the insurer to repair, rebuild or
••• replace, and, if applicable, in the event the Residence 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 or the fair market value thereof;
50019.008-4200.PCM 120399 -84-
(e) Notice of the assignment of any Owner of its
interest in the insurance by virtue of a conveyance of any
Lot; and
(f) Any right -to require any assignment of any
Mortgage to the insurer.
Section 12. Annual Notification of Insurance. The
Association shall, upon issuance or renewal of insurance, but no
less than annually, notify its Members as to the amount and type of
insurance carried by the Association, and it shall accompany this
notification with statements to the effect that the Association is
or is not insured to the levels specified by this Article, and that
if not so insured, Owners may be individually liable for the entire
amount of a judgment, and if the Association is insured to the
levels specified in Section 1 above, then Owners may be individual-
ly liable only for their proportional share of Assessments levied
to pay the amount of any judgment which exceeds the limits of the
Association's insurance. The Association shall further prepare and
distribute to all its Members a summary of the Association's
insurance coverage pursuant to Section 1365 of the California Civil
Code, as sapne may be amended from time to time.
ARTICLE XV
MORTGAGEE PROTECTION
Section 1. Mortgagee Protection Provisions. Notwith-
standing any other provisions in this Declaration to the contrary,
in order to induce FHLMC and FNMA, and other lenders and investors,
to participate in the financing of the sale of Lots in the Project,
the following provisions contained within this Article are added
hereto, and to the extent these added provisions conflict with any
other provisions in this Declaration, these added provisions shall
control. This Declaration, the Articles and the By-Laws for the
Association are hereinafter collectively referred to in this
Article as the "constituent documents."
(a) The right of an Owner to sell, transfer or
otherwise convey his Lot shall not be subject to any right of
first refusal or any similar restriction in favor of the
Association;
(b) The lien of the Assessments provided for herein
shall be subordinate to the lien of any first Mortgage now or
hereafter recorded upon any Lot. The sale or transfer of any
Lot shall not affect the Assessment lien; however, the sale or
transfer of any Lot pursuant to judicial or nonjudicial
foreclosure of a first Mortgage or pursuant to any remedies
provided for in the Mortgage shall extinguish the lien of such
Assessments as to payments which became due prior thereto. No
50019.008-4200.FCM 120399 -85-
sale or transfer shall relieve such Lot from liability for
Assessments due thereafter. Any first Mortgagee who obtains
title to a Lot pursuant to the remedies provided in the
Mortgage, or foreclosure of the Mortgage, or any purchaser at
a foreclosure sale of a first Mortgage will not be liable for
unpaid Assessments or charges which ^accrue prior to the ac-
quisition of title to such Lot by the Mortgagee (except for
claims for a share of such Assessments or charges resulting
from a reallocation of such Assessments or charges to all
Lots, including the mortgaged Lot) ;
(c) Except as provided by statute in case of con-
demnation or substantial loss to the Lots and/or Common Area,
unless sixty-seven percent (67%) of the, Owners other than
Declarant, and sixty-seven percent (67%) of the first Mortgag-
ees (based upon one [1] vote for each Lot encumbered by said
Mortgagee's first Mortgage) have given their prior written
approval, neither the Association nor the Owners shall be
entitled to:
i (1) Change the method of determining the
obligations, Assessments, dues or other charges which may
be levied against an Owner's Lot;
(2) By act or omission seek to abandon, parti-
tion, subdivide, encumber, sell or transfer all or any
portion of the Common Area. The granting of easements for
public utilities or for other public purposes consistent
with the intended uses of the Common Area or the residen-
tial nature of the Project, shall, not be deemed a
transfer within the meaning of this clause;
(3) Use hazard insurance proceeds for losses
to the Common Area for other than repair, replacement or
reconstruction;
(4) Effect any decision of the Association to
terminate professional management and assume self-
management of the Project, where such professional man-
agement was previously a requirement by a holder, insurer
or guarantor of any first Mortgage;
(5) By act or omission, change, waive or
abandon any provisions of this Declaration, or enforce-
ment thereof, pertaining to architectural design of the
Residences situated on a Lot or the maintenance and
operation of the Common Area within the Project, in-
cluding, without limitation, fences and landscaping
within the Project;
(6) Fail to maintain fire and extended cov-
erage on the insurable Common Area on a current re-
50019.008-4200.PCM 120399 -86-
placement cost basis in an amount not less than one
hundred percent (100%) of the insurable value thereof;
and
(7) Abandon or terminate the Association,
except for abandonment, partition or termination as may
be provided by law.
(d) All taxes, Assessments and charges which may
become liens prior to the first Mortgage under local law shall
relate only to individual Lots, and not to the Project as a
whole;
(e) No provision of the constituent documents shall
be interpreted to give any Owner or any other party priority
over any rights of the first Mortgagee in the case of a
distribution to such Owner of insurance proceeds or condemna-
tion awards for losses to or a taking of all or any portion of
the Common Area or such Owner's Lot/
I (f) The Assessments provided for in the constituent
documents shall include an adequate reserve fund for mainte-
nance, repairs and replacement of those elements of the Common
Area that must be replaced on a periodic basis, and shall be
payable in regular 'installments, rather than by Special
Assessments;
(g) Each holder, insurer or guarantor of a first
Mortgage who has filed with the Association a written request
for notice shall be entitled to timely written notice of:
(1) Any condemnation or eminent domain pro-
ceeding, and any loss or taking resulting from such
proceeding which affects the Project, or any portion
thereof;
(2) Any substantial damage or destruction to
the Project, or any portion thereof, when such loss
exceeds Ten Thousand Dollars ($10,000.00);
(3) Any default in the performance by an indi-
vidual Owner of any obligation under the constituent
documents which is not cured within sixty (60) days after
the Association learns of such default, which notice
shall state the length of time which such Owner has been
delinquent;
(4) Any lapse, cancellation or material
modification of any insurance policy or fidelity bond
maintained by the Association;
50019.008-4200.PCM 120399 -87-
(5) Any abandonment or termination of the
Project; and
(6) Any proposed action that requires the
consent of a specified percentage of eligible Mortgagees.
(h) Any agreement for professional management of
the Project, or any contract providing for services of the
Declarant, may not exceed one (1) year, renewable by agreement
of the parties for successive one (1) year periods. Any such
agreement must provide for termination by either party with or
without cause and without payment of a termination fee on
thirty (30) days' or ninety (90) days' or less, respectively,
prior written notice. In the event Declarant executes a
contract with a professional management company prior to the
Owners' election of at least a majority of the Board, the
contract must allow termination by the Board, without payment
of a termination fee., at any time subsequent to the Owners
being elected to a majority of positions on the Board;
| (i) First Mortgagees of Lots may, jointly or
singly1, pay taxes or other charges which are in default and
which may have become a lien on the Common Area, and may pay
overdue premiums on hazard insurance policies or secure new
hazard insurance coverage on the lapse of a policy for the
Common Area, and first Mortgagees making such payments shall
be owed immediate reimbursement therefor from the Association.
Upon demand by any first Mortgagee, the Board shall execute,
on behalf of the Association, an agreement establishing the
right of all first Mortgagees to such reimbursement;
(j) A first Mortgagee of a Lot in the Project will,
upon request, be entitled to:
(1) Examine the books and records of the
Association during normal business hours;
(2) An audited financial statement from the
Association for the previous fiscal year (without expense
to the holder, insurer or guarantor requesting said
statement), however, if an audited financial statement is
not available and until such time as the Project contains
fifty (50) Lots, any Mortgage holder may be allowed to
have an audited financial statement prepared, at its own
expense; and
(3) Receive written notice of all meetings of
the Association and be permitted to designate a rep-
resentative to attend all such meetings.
(k) Each Owner shall notify the Association in
writing within ten (10) days after the close of escrow for the
50019.008-4200.FCM 120399 -88-
purchase of his Lot of the name and address of his first
Mortgagee, and thereafter, each Owner shall promptly notify
the Association of any changes of name or address for his
first Mortgagee;
(1) If any Lot (or portion thereof) or the Common
Area (or portion thereof) is made the subject matter of any
condemnation or eminent domain proceeding, or is otherwise
sought to be acquired by a condemning authority, then the
institutional holder of any first Mortgage on such Lot will be
entitled to timely written notice of any such proceeding or
proposed acquisition; and
(m) In the event any portion of the Common Area
encroaches upon any Lot or any Lot encroaches upon the Common
Area as a result of the construction, reconstruction, repair,
shifting, settlement or movement of any portion of the
Project, a valid easement for the encroachment and for the
maintenance of the same shall exist so long as the encroach-
ment exists.
ISection 2. Violation of Mortgagee Protection Provi-
sions . No breach of any of the foregoing Protective Covenants shall
cause any forfeiture of title or reversion or bestow any right of
re-entry whatsoever, but in the event that any one or more of these
Protective Covenants shall be violated, the Declarant, its
successors and assigns, the Association, or any Owner in the
Project may commence a legal action in any court of competent
jurisdiction to enjoin or abate said violation and/or to recover
damages; provided, however, that any such violation shall not
defeat or render invalid the lien of any Mortgage or deed of trust
made in good faith and for value. Said Protective Covenants shall
be binding upon and effective against any Owner whose title is
acquired by foreclosure, trustee sale or otherwise.
Section 3. Amendments to Conform With Mortgagee Re-
quirements . It is the intent of Declarant that this Declaration and
the Articles and By-Laws of the Association, and the Project in
general, meet all requirements necessary to purchase, guarantee,
insure or subsidize any Mortgage of a Lot in the Project by the
FHLMC and the FNMA. In furtherance of said intent, Declarant may
amend this Declaration without the consent of the Members at any
time after the close of escrow for the first sale of a Lot in the
Project by recording a written instrument setting forth the
amendment, provided that the amendment is necessary to cause this
Declaration to comply with the requirements of the ORE, VA/FHA,
FHLMC, FNMA and/or GNMA; provided, however, that any such amendment
shall be effective only if Declarant mails a copy of the amendment
to all of the foregoing entities which are, or have agreed to be,
a holder, insurer or guarantor of a first Mortgage, and does not,
within thirty (30) days thereafter, receive a notice of disapproval
from any such entity. Said amendments shall not be recorded by
50019.008-4200.FCM 120399 -89-
Declarant until after the expiration of such thirty (30) day
period. •
ARTICLE XVI
ENFORCEMENT OF BONDED OBLIGATIONS
Section 1. Enforcement of Bonded Obligations. In the
event that the improvements of the Common Area have not been com-
pleted prior to the issuance"of a Final Subdivision Public Report
by the DRE, and the Association is obligee under a bond or other
arrangement (hereinafter referred to as the "Bond") to secure a
performance of the commitment of Declarant to complete such im-
provements, the following provisions shall apply:
(a) The Board shall consider and vote on the
question of action by the Association to enforce the obliga-
tions under the Bond with respect to any improvements for
which a Notice of Completion has not been filed within sixty
(60) diays after the completion date specified for such im-
provements in the Planned Construction Statement appended to
the Bond. If the Association has given an extension in writing
for the completion of any Common Area improvement, the Board
shall consider and vote on the aforesaid question if a Notice
of Completion has not been filed within thirty (30) days after
the expiration of such extension.
(b) In the event that the Board determines not to
initiate action to enforce the obligations- under the Bond, or
in the event the Board fails to consider and vote on such
question as provided above, the Board shall call a special
meeting of the Members for the purpose of voting to override
such decision or such failure to act by the Board. Such
meeting shall be called according to the provisions of the By-
Laws dealing with meetings of the Members, but in any event,
such meeting shall be held not less than thirty-five (35) days
nor more than forty-five (45) days after receipt by the Board
of a petition for such meeting signed by Members representing
five percent (5%) of the total voting power of the Associa-
tion.
(c) The only Members entitled to vote at such
meeting of Members shall be the Owners, other than Declarant.
A vote at such meeting of a majority of the voting power of
such Members, other than the Declarant, to take action to
enforce the obligations under the Bond shall be deemed to be
the decision of the Association, and the Board shall thereaf-
ter implement such decision by initiating and pursuing
appropriate action in the name of the Association.
50019.008-4200.FCM 120399 -90
ARTICLE XVII
ANNEXATION OF ADDITIONAL BROPERTY
Additional property may be annexed to and become subject
to this Declaration as set forth in this Article.
Section 1. Development of the Project. The Declarant
intends to sequentially develop the Annexation Property on a phased
basis,- however, Declarant may elect not to develop all or any
portions of said Annexation Property, to annex such portions of the
Annexation Property in Phases of any size or to develop more than
one (1) Phase in any order and at any given time, subject to the
provisions of this Article.
Section 2. Annexation Pursuant to General Plan of
Development. Declarant may, subject to the provisions of this
Article, annex all or any portions of the Annexation Property,
thereby making such Annexation Property subject to this Declaration
and to the jurisdiction of the Association, without the vote or
written assent of the Association or its Members, provided and on
condition that:
(a) Any annexation pursuant to this Section shall
be allowed when the proposed annexation is in substantial
conformance with the overall general plan of phased develop-
ment for the Project originally submitted to and approved by
the ORE and VA/FHA, if applicable, with the Phase 1 Final
Subdivision Public Report application, or as subsequently
approved by the ORE; and
(b) A Notice of Annexation as described in Section
4 of this Article, shall be recorded covering the Annexation
Property.
Section 3. Annexation Pursuant to Approval. Upon
obtaining the approval in writing of the Association pursuant to
the vote or written assent of sixty-seven percent (67%) of the
total voting power of Association Members, the owner of any prop-
erty who desires to annex said property to the scheme of this
Declaration and to subject it to the jurisdiction of the Associa-
tion may file of record a Notice of Annexation, as described in
Section 4 of this Article.
Section 4. Notice of Annexation. The annexation of
additional property authorized under this Article shall be made in
filing of record a Notice of Annexation, or similar instrument,
covering said additional property, and the Notice of Annexation
shall expressly provide that the scheme of this Declaration shall
extend to such additional property. The Notice of Annexation may
contain such complementary additions to and modifications of the
Protective Covenants set forth in this Declaration which are neces-
50019.008-4200.FCM 120399 -91-
sary to reflect the different character, if any, of the annexed
property, including, but not limited to, marketing and selling
vacant Lots, the architectural guidelines for any construction
thereon, maintenance responsibilities between the Association and
the Owners in this annexed property and payment of Assessments, and
which are fair, reasonable, and appropriate, and are not inconsis-
tent with the general scheme of this Declaration. Except as set
forth in this Section, no Notice of Annexation shall add, delete,
revoke, modify or otherwise alter the Protective Covenants set
forth in this Declaration.
Section 5. Effective Date of Annexation. Any Notice
of Annexation recorded on "a subsequent Phase of the Project shall
become effective immediately upon the first close of an escrow for
the sale of a Lot in said Phase, as.evidenced by the recordation of
the first instrument of conveyance for said Lot.
Section 6. Right of De-Annexation. Declarant hereby
reserves the right to delete all or any portions of the Annexation
Property which may be annexed to the Project pursuant to this
Declaration!, and to delete said property from the scheme of this
Declaration1 and from the jurisdiction of the Association, provided
and on condition that (i) the de-annexation shall be made prior to
the first close of an escrow for the sale of a Residence in the
property to be de-annexed, (2) the de-annexation is recorded in the
same manner as the applicable Notice of Annexation, (3) the
Declarant has not exercised any vote with respect to any Residence
in such property, (4) no assessments have commenced on any portion
of the property subject to the de-annexation, and (5) a draft of
the revocation of Notice of Annexation has been submitted to and
approved by the VA/FHA, if applicable.
Section 7. Amendments to Notice of Annexation. Not-
withstanding any other provisions in this Declaration to the con-
trary, a Notice of Annexation may be amended by the requisite
affirmative vote of Members (and first Mortgagees, if applicable),
as -set forth in the Article herein entitled "General Provisions,"
in only the annexed property described in said Notice of Annex-
ation, rather than all Members (and first Mortgagees, if applica-
ble) in the Project, on the following conditions:
(a) Such amendment applies only to the annexed
property described in said Notice of Annexation; and
(b) Such amendment shall in no way contradict,
revoke or otherwise alter any of the Protective Covenants set
forth in this Declaration.
50019.008-4200.PCM 120399 -92-
ARTICLE XVIII *-
GENERAL PROVISIONS
Section 1. Enforcement.
(a) The Association or the Owner of any Lot in the
Project, including the Declarant, shall have the right (but
not the obligation) to enforce, by proceedings at law or in
equity, all of the Protective Covenants now or hereafter
imposed by this Declaration and the By-Laws, respectively (and
the Rules and Regulations duly adopted by the Association),
including, without limitation, the right to record a notice of
noncompliance or violation, to prosecute a proceeding at law
or in equity against the person or persons who have violated,
or are attempting tov violate, any of said Protective Cove-
nants, to enjoin or prevent them from doing so, to cause said
violation to be remedied and/or to recover damages for said
violation; provided, however, that with respect to Assessment
liens, the Association shall have the exclusive right to the
enforcement thereof.
(b) The result of every act or omission whereby any
of the Protective Covenants contained in this Declaration or
the provisions of the By-Laws are violated, in whole or in
part, is hereby declared to be and constitutes a nuisance, and
every remedy allowed by law or equity against a nuisance shall
be applicable against every such result and may be exercised
by any Owner, by the Association, or by its successors in
interest.
(c) The remedies herein provided for breach of the
Protective Covenants contained in this Declaration or the
provisions of the By-Laws shall be deemed cumulative, and none
of such remedies shall be deemed exclusive.
(d) The failure of the Association or any Owner to
enforce any of the Protective Covenants contained in this
Declaration or the provisions of the By-Laws shall not
constitute a waiver of the right to enforce the same thereaf-
ter.
(e) Prior to filing a civil action by either the
Association or by an Owner solely for declaratory relief or
injunctive relief, or for declaratory relief or injunctive
relief in conjunction with a claim for monetary damages other
than Association Assessments, related to the enforcement of
the Association governing documents, the parties may be
required to comply with Civil Code Section 1354, if applica-
ble. Failure to comply with the prefiling requirements of
Section 1354 of the Civil Code may result in the loss of the
right to sue regarding enforcement of the Association govern-
50019.008-4200.FCM 120399 -93-
ing documents. Upon motion by any party for attorneys' fees
and costs as the prevailing party, the court, in determining
the amount of the award, may consider a party's refusal to
participate in alternative dispute resolution prior to the
filing of the action.
(f) A breach of the Protective Covenants contained
in this Declaration or of the provisions of the By-Laws shall
not affect or impair the lien or charge of any bona fide Mort-
gage or deed of trust,*-made in good faith and for value on any
Lot; provided, however," that any subsequent Owner of such
property shall be bound by said Protective Covenants, whether
or not such Owner's title was acquired by foreclosure, a trus-
tee's sale or otherwise.
(g) The Board, for and on behalf of the Associa-
tion, may assess monetary penalties against an Owner as a
Compliance Assessment and/or temporarily suspend said Owner's
voting rights for the period during which any Assessment
against said Owner's Lot remains unpaid; provided, however,
the requirements for Notice and Hearing set forth in the By-
Laws shall be followed with respect to the accused Owner
before a decision to impose discipline is reached.
(h) The Board, for and on behalf of the Associa-
tion, may, after Notice and Hearing, temporarily suspend an
Owner's voting rights for a period not to exceed thirty (30)
days for any infraction of the Association's published Rules
and Regulations; provided, however, the requirements for
Notice and Hearing set forth in the By-Laws shall be followed
with respect to the accused Owner before a decision to impose
discipline is reached.
(i) In addition to the above general rights of
enforcement, the City and any other governmental entity with
appropriate jurisdiction shall have the right, through its
agents and employees, to enter upon any part of the Project
for the purpose of enforcing all applicable codes and/or local
ordinances, including, but not limited to, the California
Vehicle Code, and is hereby granted an easement over the
Project for such purpose.
Section 2. Severability. Invalidation of any one of
these Protective Covenants by judgment or court order shall in no
way affect any other provisions hereof, which shall remain in full
force and effect.
Section 3. Term. The Protective Covenants set forth
in this Declaration shall run with and bind the Project, and shall
inure to the benefit of the Association and be enforceable by the
Board or the Owner of any land subject to this Declaration, their
respective legal representatives, heirs, successors and assigns,
S0019.008-4200.FCM 120399 -94-
for a term of fifty (50) years from the date this Declaration is
recorded, after which time said Protective Covenants shall be
automatically extended for successive periods of ten (10) years,
unless an instrument, signed by a majority of the then Owners
agreeing to terminate said Protective Covenants, in whole or in
part, has been recorded within one (1) year prior to the termina-
tion of the initial fifty (50) year term, or within one (1) year
prior to the termination of any successive ten (10) year period.
Section 4. Construction. The provisions of this Dec-
laration shall be liberally construed to effectuate its purpose of
creating a uniform plan for the development and maintenance of the
Project. The Article and §ection headings have been inserted for
convenience only and shall not be considered or referred to in
resolving questions of interpretation or construction.
Section 5. Singular Includes Plural. Whenever the
context of this Declaration may so require, the singular shall in-
clude the plural, and the masculine shall include the feminine and
neuter.
Section 6. Amendments.
(a) Amendments by Declarant. Prior to the sale of
a Lot to a member of the public, in accordance with a Final
Subdivision Public Report issued by the DRE, this Declaration
may be amended, restated or terminated by an instrument
executed by Declarant.
(b) Amendments by Association . This Declaration may
be amended only by an affirmative vote of Owners representing
not less than sixty-seven percent (67%) of the Class A voting
power and the Class B voting power of the Association. At such
time when the Class B membership shall cease and be converted
to Class A membership, any and all amendments to this Declara-
tion shall be enacted by requiring the vote or written assent
of Owners representing both: (a) sixty-seven percent (67%) of
" the total voting power of the Association, and (b) sixty-seven
percent (67%) of the votes of Members, other, than the Declar-
ant; provided, however, that the percentage of the voting
power necessary to amend a specific provision shall not be
less than the percentage of affirmative votes prescribed for
action to be taken under said provision. Any Owner or the
Association may petition the Superior Court of the County for
an order reducing the necessary percentage required under this
Section to amend this Declaration or to reduce the quorum
requirements set forth herein. The procedure for effecting
this petition is set forth in Section 1356 of the California
Civil Code, as the same may be amended, from time to time.
(c) Approval of Mortgagees. In addition to the
rights of first Mortgagees, as set forth in the Article herein
50019.008-4200.FCM 120399 -95-
entitled "Mortgagee Protection, " in the event that FNMA
participates in the financing of Lots in the Project, the
written consent of not less than fifty-one percent (51%) of
the first Mortgagees shall be required for any amendment of a
"material" nature. Arv amendment which affects or purports to
affect any of the following is considered material:
(1) The legal status of the Project as a
planned development;
(2) Voting rights;
(3) Increases in assessments that raise the
previously assessed amount by more than twenty-five
percent (25%), assessment liens or the priority of
assessment liens, including the levy and collection
thereof, enforcement provisions for nonpayment and
subordination of liens for nonpayment;
(4) Reductions in reserves for maintenance,
repair and replacement of Common Area;
(5) Responsibility for Common Area maintenance
and repair;
(6) Reallocation of interests in the Common
Area or rights to use the Common Area;
(7) Boundaries of any Lot;
(8) Convertibility of Common Area into Lots or
Lots into Common Area;
(9) Encroachment by Improvements into Common
Area,-
(10) Expansion or contraction of the Project,
or addition, annexation or de-annexation of additional
property to or from the Project;
(11) Insurance or fidelity bonds requirements;
(12) Restrictions on the leasing of Lots;
(13) Imposition of restrictions on alienation,
including, but not limited to, rights of first refusal;
(14) Any decision by the Association to es-
tablish self-management, if professional management was
previously required by an eligible first Mortgagee or
legal documents governing the Project;
50019.008-4200.FCM 120399 -96-
(15) Restoration or repair of the Project in a
manner other than as specified in this Declaration;
(16) Any action to terminate the legal status
of the Project after substantial destruction or condem-
nation occurs; and
(17) Mortgagee protection provisions as set
forth in that Article hereinabove entitled "Mortgagee
Protection," and such other provisions in this Declara-
tion for which the consent of Mortgagees shall be re-
quired or which are expressly for the benefit of Mort-
gagees, insurers, or guarantors of Mortgages.
An addition or amendment to this Declaration shall not be
considered material if it is for the purpose of correcting
technical errors or for clarification only. In the event the
Association is considering termination of the legal status of
the Project for reasons other than the substantial destruction
or condemnation of the Project, then sixty-seven percent (67%)
of the first Mortgagees must agree to said termination.
Notwithstanding the foregoing, in the event any first Mort-
gagee receives a written request, delivered by certified or
registered mail with return receipt requested, from the Board
to approve any amendment to this Declaration, and such first
Mortgagee does not deliver a negative response in writing to
the Board within thirty (30) days of the mailing of such
request by the Board, such first Mortgagee shall be deemed to
have approved such proposed amendment.
(d) Approval by City. Notwithstanding any other
provisions of this Article, no amendment of a provision
affecting the rights of the City and no action by Declarant or
the Association terminating this Declaration, in whole or in
part, shall be effective without the prior written consent of
the City. The Declarant or the Association shall forward, or
cause to be forwarded, to the City a written notice of any
such amendment or termination. If no notice of approval is
received by the Association within thirty (30) days following
the receipt of such notice, such amendment or termination
shall be deemed to be rejected and denied by the City.
(e) Recordation of Amendments. An amendment made in
accordance with the provisions set forth hereinabove shall be
effective when executed by the President and Secretary of the
Association, who shall certify that the amendment has been
approved by the membership and, where appropriate, by the
first Mortgages, in the percentages set forth hereinabove, and
recorded in the Office of the County Recorder. Upon such
recordation, the amendment shall be effective and binding upon
all Owners and all Mortgagees, regardless of whether such
Owner or such Mortgagee consented to such amendment.
50019.008-4200.FCM 120399 -97-
Section 7 . Encroachments . None of the rights and ob-
ligations of the Owners created herein or by the deed shall be al-
tered in any way by encroachments due to settlement or shifting of
structures or any other cause. There shall be valid easements for
the maintenance of said encroachments so long as they shall exist;
provided, however, that in no event shall a valid easement for
encroachment be created irt favor of an Owner if said encroachment
occurred due to the willful conduct of said Owner.
Section 8. Notices. Any notice permitted or required
to be delivered as provided herein shall be in writing and may be
delivered either personally or by mail. If delivery is made by
first class, registered or certified mail, it shall be deemed to
have been delivered forty-eight (48) hours after a copy of the same
has been deposited in the United States mail, postage prepaid, ad-
dressed to any person at the address given by such person to the
Association for the purpose of service of such notice, or to the
Lot of such person if no address has been given to the Association.
If such notice is not sent by first class, registered or certified
mail, it shall be deemed to have been delivered when received. Such
address may. be changed, from time to time, by notice in writing to
the Association.
Section 9. Attorneys' Fees. If any Owner defaults in
making a payment of Assessments or in the performance or observance
of any provision of this Declaration, and the Association and/or an
Owner has obtained the services of an attorney in connection there-
with, the Owner covenants and agrees to pay any costs or fees
incurred, including reasonable attorneys' fees, regardless of
whether legal proceedings are instituted. In case a suit, arbitra-
tion, or alternative dispute resolution is instituted, the
prevailing party shall recover the cost of the suit, arbitration,
or alternative dispute resolution, in addition to the aforesaid
costs and fees.
Section 10. Mergers or Consolidations. Upon a merger
or consolidation of the Association with another association, the
Association's properties, rights and obligations may, by operation
of law, be transferred to another surviving or consolidated
association or, alternatively, the properties, rights and obliga-
tions of another association may, by operation of law, be added to
the properties, rights and obligations of the Association as a
surviving corporation pursuant to a merger. The surviving or
consolidated association may administer and enforce the Protective
Covenants established by this Declaration governing the Project,
together with the covenants and restrictions established upon any
other property as one plan.
Section 11. No Representations or Warranties. No
representations or warranties of any kind, express or implied, have
been given or made by Declarant, or its agents or employees, in
connection with the Project, or any portion thereof, its physical
50019.008-4200.FCM 120399 -98-
condition, zoning, compliance with applicable laws, fitness for
intended use, or in connection with the subdivision, sale,
operation, maintenance, cost of maintenance, taxes or regulation
thereof as a planned development, except as specifically and
expressly set forth in this Declaration, and except as may be filed
by Declarant, from time to time, with the ORE.
Section 12. Arbitration of Disputes. Declarant
intends the Common Area, the Residences and the Improvements be
built in compliance with all applicable building codes and
ordinances, and that they be' o'f a quality that is consistent with
good construction practices for production housing of this type.
Nevertheless, due to the complex nature of construction and the
subjectivity involved in evaluating such quality, disputes may
arise as to whether a defect in construction exists and Declarant's
responsibility therefor. Declarant intends to resolve any action
or claim by, between or among the Declarant, or any director, offi-
cer, partner, attorney, member, employee or agent of Declarant, or
any contractor, subcontractor, design professional, engineer or
supplier who provided labor, services or materials to the Project
and who is bound or has agreed to be bound to the following dispute
notification and resolution procedure (collectively, the "Declarant
Parties") and any Owner, relating to or arising out of the Project,
this Declaration or any other agreements between the Declarant
Parties and an Owner (unless any such agreement specifies another
form of dispute resolution), the sale of the Lots in the Project,
the use or condition of the Project or the design or construction
of or any condition on or affecting the Project, including, but not
limited to, construction defects, surveys, soils conditions,
grading, specifications, installation of improvements or disputes
which allege fraud, misrepresentation or breach of implied or
express warranties as to the condition of the Project ("Alleged
Defects") amicably and without the necessity of time consuming and
costly litigation. Accordingly, the Association and all Owners
shall comply, to the extent not inconsistent with Civil Code
Section 1375, as same may be amended from time to time, the
following claim resolution procedures:
(a) Notice. Any person with a Alleged Defect claim
shall notify the Declarant in writing of the claim, which writing
shall describe the nature of the claim and any proposed remedy (the
"Claim Notice").
(b) Right to Inspect and Right to Corrective Action.
Within a reasonable period after receipt of the Claim Notice, which
period shall not exceed ninety (90) days, Declarant and the
claimant shall meet at a mutually-acceptable place within or near
the Project to discuss the Alleged Defect claim. At such meeting
or at such other mutually-agreeable time, the Declarant and the
Declarant's representatives shall have full access to the property
that is subject to the Alleged Defect claim and shall have the
right to conduct inspections, testing and/or destructive or
50019.008-4200.PCM 120399 -99-
invasive testing of the same in a manner deemed appropriate by
Declarant, which rights shall continue until such time as the
Alleged Defect is resolved-* as set forth herein. The parties to the
Alleged Defect shall negotiate in good faith in an attempt to
resolve the claim. If the Declarant elects to take any corrective
action, Declarant and Declarant's representatives and agents shall
be provided full access to the Project to take and complete
corrective action. Nothing set forth in this Section imposes any
obligation on Declarant to inspect, repair or replace any items or
alleged defects for which Declarant is not otherwise obligated
under applicable State and federal law or any limited warranty
provided by Declarant in connection with the sale of the Lots.
(a) Binding Arbitration. If the parties cannot
resolve the claim pursuant to the procedures described in
Subparagraph (b) above, then, if the Declarant requests, the
matter may be submitted to binding arbitration pursuant to
procedures adopted by the American Arbitration Association
("AAA"), or any successor thereto, or to any other entity
offering arbitration services (e.g., JAM/ENDISPUTE) that is
acceptable to Declarant. No person shall serve as a arbitra-
tor in' any dispute in which the person has any financial or
personal interest in the result of the arbitration, except by
the written consent of all parties. Prior to accepting any
appointment, the prospective arbitrator shall disclose any
circumstances likely to create a presumption of bias or
... prevent a prompt commencement of the arbitration process. If
the matter is submitted to arbitration, then the following
shall apply:
Within ten (10) days of the selection of the
arbitrator, each party shall submit a brief memorandum setting
forth its position with regard to the issues that need to be
resolved. A party's pre-arbitration memorandum may not be
disclosed by the arbitrator to the other party without the
consent of the party submitting the same. The arbitrator
shall have the right to schedule a pre-arbitration conference
and all parties shall attend unless otherwise agreed. The
arbitration shall be commenced within ten (10) days following
the submittal of the memorandum and shall be1 concluded within
fifteen (15) days from the commencement of the arbitration
unless the parties mutually agree to extend the arbitration
period. The arbitration shall be held in the County, or such
other place as is mutually acceptable to the parties.
The arbitrator shall have discretion to conduct
the arbitration in the manner in ,which the arbitration
believes is most appropriate for reaching a settlement of the
dispute. The arbitrator is authorized to conduct joint and
separate meetings with the parties and to make oral and
written recommendations for settlement. Whenever necessary,
the arbitrator may also obtain expert advice concerning
50019.008-4200.PCM 120399 -100-
technical aspects of the dispute, providing the parties agree
and assume the expenses of obtaining such advice. The
arbitrator does not have the authority to impose a settlement
on the parties.
Priorvto the commencement of the arbitration
session, the arbitrator and all parties to the arbitration
shall execute an agreement to exclude the use of any informa-
tion, testimony, admission or evidence produced or made at or
in connection with the arbitration and any subsequent dispute
resolution forum, including, but not limited to, court
proceedings or arbitration hearings. The agreement shall
specifically state:
(1) Except as otherwise provided in this
section, evidence of anything said or of any admission
made in the course of the arbitration is not admissible
evidence or subject to discovery, and disclosure of this
evidence shall not be compelled in any civil action or
proceeding in which, pursuant to law, testimony can be
compelled to be given.
(2) Except as otherwise provided in this
section, unless the document otherwise provides, no
document prepared for the purpose of, or pursuant to, the
arbitration, or copy thereof, is admissible in evidence
or subject to discovery, and disclosure of such a
document shall not be compelled, in any civil action or
proceeding in which, pursuant to law, testimony can be
compelled to be given.
Persons other than the parties, their represen-
tatives and the arbitrator may attend arbitration sessions
only with the permission of the parties and the consent of the
arbitrator. Confidential information disclosed to a arbitra-
tor by the parties or by witnesses in the course of the
arbitrator shall not be divulged by the arbitrator, without
the consent of the disclosing party. All records, reports or
other documents received by the arbitrator while serving in
such capacity shall be confidential. There shall be no
stenographic record of the arbitration process, unless
mutually agreed by the parties.
The expenses of witnesses for either party
shall be paid by the party producing such witnesses. All
other expenses of the arbitration, including required travel-
ling and other expenses of the arbitrator, and the expenses of
any witnesses, or the cost of any proofs or expert advice
produced at the direct request of the arbitrator, shall be
borne equally by the parties unless they agree otherwise.
50019.008-4200.FCM 120399 -101-
(b) Mediation. If the parties to the Alleged
Defect cannot resolve the claim pursuant to the procedures
described in Section (a) above, the matter shall be submitted
to mediation pursuant to the mediation procedures adopted by
the American Arbitration Association (except as such proce-
dures are modified by the provisions of this Section (b)) or
any successor thereto or to any other entity offering media-
tion services that is acceptable to such parties. No person
shall serve as a mediator in any Alleged Defect in which the
person has any financial or personal interest in the result of
the mediation, except .by'the written consent of all parties to
the Alleged Defect participating in the mediation. Prior to
accepting any appointment, the prospective mediator shall
disclose any circumstances likely to create a presumption of
bias or to prevent a prompt commencement of the mediation
process. Except as provided in hereinbelow, Owner covenants
that Owner shall not commence any litigation against the
Declarant Parties without complying with the procedures
described in this Section (b).
(i) Position Memoranda; Pre-Mediation Confer-
ence . 'Within ten (10) days of the selection of the mediator,
each party shall submit a brief memorandum setting forth its
'• position with regard to the issues that need to be resolved.
The mediator shall have the right to schedule a pre-mediation
conference and all parties to the Alleged Defect participating
in the mediation shall attend unless otherwise agreed. The
mediation shall be commenced within ten (10) days following
the submittal of the memoranda and shall be concluded within
fifteen (15) days from the commencement^ of the mediation
unless the parties to the Alleged Defect participating in the
mediation mutually agree to extend the mediation period. The
mediation shall be held in the county in which the Project is
located or such other place as is mutually acceptable to the
parties to the Alleged Defect participating in the mediation.
(ii) Conduct of Mediation. The mediator has
discretion to conduct the mediation in the manner in which the
mediator believes is most appropriate for reaching a settle-
ment of the Alleged Defect. The mediator is authorized to
conduct joint and separate meetings with the parties to the
Alleged Defect participating in the mediation and to make oral
and written recommendations for settlement. Whenever neces-
sary, the mediator may also obtain expert advice concerning
technical aspects of the Alleged Defect, provided the parties
to the Alleged Defect participating in the mediation agree and
assume the expenses of obtaining such advice. The mediator
does not have the authority to impose a settlement on the
parties to the Alleged Defect participating in the mediation.
(iii) Exclusion Agreement. Prior to the
commencement of the mediation session, the mediator and all
50019.008-4200.FCM 120399 -102-
parties to the Alleged Defect participating in the mediation
shall execute an agreement pursuant to California Evidence
Code Section 1115 et^.seq. or successor statute in order to
exclude the use of any testimony or evidence produced at the
mediation in any subsequent dispute resolution forum, includ-
ing, but not limited to, court proceedings, reference proceed-
ings or arbitration hearings. Pursuant to California Evidence
Code Section 1115 et seq. the agreement shall specifically
state that evidence of anything said or of any admission made
in the course of the mediation is not admissible evidence, and
disclosure of any such evidence shall not be compelled in any
civil action in which, pursuant to law, testimony can be
compelled to be given. Unless the document provides other-
wise, no document prepared for the purpose of, or in the
course of, or pursuant to, the mediation, or copy thereof, is
admissible in evidence; and disclosure of any such document
shall not be compelled in any civil action in which, pursuant
to law, testimony can be compelled to be given. The provi-
sions of California Evidence Code Sections 1115 through 1128
shall also be applicable to such mediation process.
(iv) Parties Permitted at Sessions. Persons
other than the parties to the Alleged Defect participating in
the mediation, their representatives and the mediator may
attend mediation sessions only with the permission of the
parties to the Alleged Defect participating in the mediation
and the consent of the mediator. Confidential information
" disclosed to a mediator by such parties or by witnesses in the
course of the mediation while serving in such capacity shall
be confidential. There shall be no stenographic record of the
mediation process.
(v) Expenses. The expenses of witnesses for
either side shall be paid by the party producing such witness-
es. All other expenses of the mediation, including, but not
limited to, the fees and costs charged by the mediator and the
expenses of any witnesses or the cost of any proof or expert
advice produced at the direct request of the mediator, shall
be borne equally by the parties to the Alleged Defect partici-
pating in the mediation unless they agree otherwise. Each
party to the Alleged Defect participating in the mediation
shall bear its own attorneys' fees and costs in connection
with such mediation.
(c) Judicial Reference. If the parties cannot
resolve the claim pursuant to the procedures described in
Subparagraphs (a) and (b) above (i.e., the Declarant does not
request or agree to binding arbitration^ and mediation does not
provide a solution), then, if the parties agree, prior to the
commencement of any litigation in any court of competent
jurisdiction, the parties may submit the claim to general
judicial reference pursuant to California Code of Civil
50019. 008-4200. FCM 120399 -103-
Procedure Sections 638(1) and 641-645, or any successor
statutes thereto. The parties shall cooperate in good faith
to ensure that all necessary and appropriate parties are
included in the judicial reference proceeding. Declarant
shall not be required to participate in the judicial reference
proceeding unless it is satisfied that all necessary and
appropriate parties will participate.
The general referee shall have the authority to
try all issues, whether of fact or law, and to report a
statement of decision. 'The parties shall use the procedures
adopted by the AAA for judicial reference (or any other entity
offering judicial reference dispute resolution procedures as
may be mutually acceptable to the parties), provided that the
following rules and procedures shall apply in all cases unless
the parties agree otherwise:
(1) The proceedings shall be heard in the
County in which the Project is located;
| (2) The fees and costs of any judicial
reference proceeding hereunder shall be equally shared by
the parties to the judicial reference proceeding. Each
party to the judicial reference proceeding shall bear its
own attorneys' fees and costs in connection with such
proceeding;
(3) The referee must be a retired judge or an
attorney with substantial experience in relevant real
estate matters;
(4) Any dispute regarding the selection of the
referee shall be resolved by the entity providing the
reference services or, if no entity is involved, by the
court with appropriate jurisdiction;
(5) The referee shall apply the laws of the
State of California except as expressly provided herein,
including the California Evidence Code,., unless expressly
waived by all parties to the judicial reference proceed-
ing; f
(6) The referee may require one (1) or more
pre-hearing conferences;
(7) The parties to the judicial reference
shall be entitled only to limited discovery, consisting
of the exchange between such parties of only the follow-
ing matters: (i) witness lists; (ii) expert witness
designations; (iii) expert witness reports; (iv) exhib-
its; (v) reports .of testing or inspections of the
property subject to the Alleged Defect, including but not
50019.008-4200.FCM 120399 -104-
limited to, destructive or invasive testing; and (vi)
trial briefs. Such parties shall also be entitled to
conduct further tests and inspections as provided above,
if any. Any other discovery provided for in the Califor-
nia Code of Civil Procedure shall be permitted by the
referee upon a showing of good cause or based on the
mutual agreement of the parties to the judicial reference
proceeding. The referee shall oversee discovery and may
enforce all discovery orders in the same manner as any
trial court judge;
(8) A stenographic record of the hearing shall
be made, provided that the record shall remain confiden-
tial except as may be necessary for post-hearing motions
and any appeals;
(9) The referee shall not have the power to
award punitive damages. In addition, as further provided
below, the right to punitive damages is waived. The
referee shall have the power to grant all other legal and
equitable remedies and award compensatory damages in the
judicial reference proceeding;
(10) The referee's statement of decision shall
contain findings of fact and conclusions of law to the
extent required by law if the case were tried to a judge.
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 Alleged
Defect had been tried by the court; and
(11) The referee 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
adjudication motions, in the same manner as a trial court
judge, except 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. Notwithstanding the foregoing, if prior to the
selection of the referee as provided herein, any provi-
sional remedies are sought by the parties to the Alleged
Defect, such relief may be sought in the Superior Court
of the County in which the Project is located.
(d) Compliance. The Association and each Owner
covenant to comply with the procedures described herein. If
the Association or any Owner breaches the foregoing covenant,
Declarant may obtain an appropriate order compelling the
Association and/or Owner to comply with the procedures de-
50019.008-4200.FCM 120399 -105-
scribed in herein. The procedures set forth herein shall not
apply to any action taken by the Association against Declarant
for delinquent Assessments, or in any action involving any
Common Area completion bonds. Furthermore, nothing herein
shall prevent the Association or any Owner from commencing any
legal action which in the good faith determination of the
Board or Owner is necessary to preserve the Association's or
Owner's rights under any applicable statute of limitations,
provided that the Association or Owner shall take no further
steps in prosecuting the action until they have complied with
the procedures described herein.
(e) Miscellaneous. Any and all communications by
and between the parties, whether written or oral, which are
delivered by the parties or their attorneys or other represen-
tatives in an effort to settle the matter shall be considered
communications undertaken in the course of effecting a
settlement or compromise, as such shall not be admissible as
an admission on the part of any party or any representative or
agent of that party to be utilized for any such purpose in any
actioni or proceeding.
Nothing herein shall be considered to reduce or
extend any applicable statute of limitation. If at any time
an action would be barred by a statute of limitation if not
filed within sixty (60) days, then such action may be filed
notwithstanding any other provision of this Section.
(f) Inspection Easements. Declarant reserves
easements to enter any Lot, including the interior of the
residence and the yard, to inspect those areas and to conduct
destructive testing referred to in California CIVIL CODE §
1375(d). However, Declarant shall notify the Owner of the Lot
of at least three alternative dates and times when such
inspection can take place (the earliest of which shall not be
less than ten (10) days after the notification is given) and
Declarant shall give the Owner the opportunity to specify
which date and time is acceptable to *the Owner. Should the
Owner not respond affirmatively with respect to one of the
dates and times within five (5) days, then Declarant may
decide which of the dates and times the inspection and testing
shall take place and so notify the Owner. Alternatively,
Declarant may seek a judicial order allowing such inspection
and testing to take place. Declarant shall be entitled to its
reasonably incurred attorney's fees and be deemed the "pre-
vailing party" should such a court order be sought and
obtained. Declarant shall be obligated to fully repair any
damage caused by any such destructive testing.
Any and all communications by and between the
parties, whether written or oral, which are delivered by the
parties or their attorneys or other representatives in an
">'
50019. 008-4200.FCM 120399 -106-
effort to settle the matter shall be considered communications
undertaken in the course of effecting a settlement or compro-
mise as such shall not be admissible as an admission on the
part of any party or any representative or agent of that party
to be utilized for any such purpose in any action or proceed-
ing .
Section 13. Conflicts in Management Documents For the
Project. In the event of any conflict between and/or among the
provisions of any of the management documents for the Project, the
Declaration shall be deemed'to supersede the provisions of any
conflicting management documents, including, without limitation,
the By-Laws, architectural standards, if any, and the Rules and
Regulations, if any.
Section 14. Additional Covenants in ... Favor of the
VA/FHA. So long as there shall be a Class B membership, the follow-
ing actions will require the prior approval of the VA/FHA, if
applicable: annexation or de-annexation of additional property to
the Project, any merger or consolidation of the Association, any
Special Assessment or any amendment to this Declaration. A draft of
any amendment shall be submitted to the VA/FHA for its approval
prior to recordation of the amendment.
Section 15. Requirements of City. In accordance with
requirements of the City:
(a) The rights of the City to compel performance
shall include the following:
(1) The Declarant, the Association and Lot
Owners grant the City, its employees, agents and contrac-
tors, the right and power to enforce the Common Area use
and maintenance covenants of the Association and the
Owners with respect to the maintenance thereof as con-
tained in this Declaration; provided, however, that no
duty on the part of the City to exercise this power and
to enforce said use and maintenance covenants shall be
deemed to arise by virtue of this Declaration or any
other action of the City. Notwithstanding any provision
of this Declaration that appears to the contrary, the
City may, by action at law or in equity, enforce the
following provisions as the governing municipality.
(2) In the event of default of any Owner or
the Association in performing their obligations to
maintain the Common Area as set forth in this
Declaration, the City shall have the same right as that
of the Association to enter the Common Area for the
purpose of discharging the obligations of the Associa-
tion. The City shall (i) provide reasonable notice to
the Owner and Association of its intention to enter the
50019. 008-4200. FCM 120399 -107-
Common Area, specifying the manner in which any Owner or
the Association has defaulted in performing their
obligation to maintain the Common Area, and (ii) afford
the Owner and/or the Association a reasonable opportunity
to remedy such default (e.g., thirty [30] days). In the
event the Association fails to carry out such maintenance
of the Common Area within the period specified in the
City's notice, the City shall be entitled to cause such
work to be completed and the Association and Owners,
jointly and severally, shall reimburse the City for all
costs, expenses, and losses incurred relating to the
curing of the default, including, but not limited to, all
costs involved in maintaining, repairing, replacing, or
otherwise performing work upon, or providing materials
for, the Common Area, whether the work or materials are
furnished by the City or by private contractors designat-
ed by City. In the event the City has performed the
necessary maintenance to the Common Area, the City shall
submit a written invoice to the Association for all costs
incurred by the City to perform such maintenance of the
Common Area. The City shall provide a copy of such
invoice to each Owner in the Project, 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 Project
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 Associa-
tion shall fail 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. Thereaf-
ter, the City may pursue collection from the Association
by means of any remedies available at law or in equity.
Without limiting the generality*1 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 Lot in the Project for an equal
prorata 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 Lot against
which the special assessment is levied. Each Owner in
the Project hereby vests the City with the right and
power to levy such special assessment, to impose a lien
upon their respective Lot and to bring all legal actions
and/or to pursue lien foreclosure procedures against any
Owner and his/her respective Lot for purposes of collect-
ing such special assessment in accordance with the
procedures set forth in Article VII of this Declaration.
' £
(3) No approval by an Owner, Association or
Board shall be necessary, to enforce any default pertain-
50019.008-4200.PCM 120399 -108-
ing to the use and maintenance of the Common Area. No
failure by the City to enforce a default pertaining to
the use and maintenance of the Common Area shall be
deemed to be a waiver of the right or power of the City
to enforce any subsequent default thereof. In the event
the City is the prevailing party in an enforcement action
under this section, the City shall have the right to
collect its reasonable attorney's fees, costs, and
expenses associated with any action or proceeding to
enforce its rights hereunder.
(4) The City shall have an easement over the
Common Area for maintenance purposes which may be
exercised upon the failure of the Association to maintain
the Common Area in accordance with the conditions of
approval of the Final Map and this Declaration.
IN WITNESS WHEREOF, Declarant has executed this instru-
ment on the day and year first above written.
' "DECLARANT"
THE TERRACES AT SUNNY CREEK, LLC
a California limited liability company
BY: GATEWAY IVEY RANCH ASSOCIATES, INC. ,
a California corporation
Managing Member
BY:
50019.008-4200.FCM 120399 * -109-
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On , 1999, before me, the undersigned, a
Notary Public in and for said State, personally appeared
, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument, the persons
or the entities upon behalf of which the person acted executed the
instrument.
WITNESS my hand and official seal.
Signature of Notary Public
(SEAL)
50019.008-4200.PCM 120399 -110
EXHIBIT "C"
The Annexation Property is more particularly described as that
certain real property located in the City of Carlsbad, County of
San Diego, State of California, more particularly described as
follows:
All of Carlsbad Tract No. 96-02, as per Map
therefore No. , filed in the Office of
the County Recorder of San Diego County,
California, except the Lots and Common Area.
50019.008-4200.FCM 120399 Page 1 of 1 Pages
CONSENT OF LIENHOLDER AND
SUBORDINATION OF LIEN
The undersigned beneficiary under that certain Deed of
Trust recorded on , 19 , as Instrument No. 1999-
in the Official Records of San Diego County, California, agrees
that the lien of the Deed of Trust shall be junior and subordinate
and subject to the attached "Declaration of Covenants, Conditions
and, Restrictions, and Reservation of Easements For The Terraces at
Sunny Creek" ("Declaration"), to any Notice of Annexation recorded
pursuant to the Article herein entitled "Annexation of Additional
Property" ("Notice of Annexation") and to any easements to be
conveyed to The Terraces at Sunny Creek Homeowners Association in
accordance with the terms of the Declaration and any Notice of
Annexation.
DATED: "LIENHOLDER"
BY:
Its:
BY:
Its:
50019.008-1200.PCM 120399
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On , 1999, before me, the undersigned, a
Notary Public in and for said State, personally appeared
and . ~7
personally known to me (or proved to me on the basis of satisfacto-
ry 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 capacity, and that by their signatures on
the instrument the persons or the entities upon behalf of which the
persons acted executed the instrument.
WITNESS my hand and official seal.
Signature of Notary Public
(SEAL)
50019.008-4200.FCM 120399