Loading...
HomeMy WebLinkAboutCT 98-21; Seaview; Tentative Map (CT) (40)RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Fox Johns Lazar Pekin Treadgold & Wexler A Professional Corporation 525 B Street, Suite 1500 San Diego, CA 92101-4417 Attn: James Henry Fox, Esq 6126 DOC r2000-0716343 DEC 29, 2000 9=52 AM OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE GREGORY J. SMITH, COUNTY RECORDER FEES: 138.00 WAY: 2 2000-0716343 SPACE ABOVE THIS LINE FOR RECORDER'S USE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR SEAVIEW G;\JHF\MSK Development Grp\Seaview-06S7\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 1 of 43 Comment: ccs C DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR SEAVIEW TABLE OF CONTENTS Articles Page 1 RECITALS AND DECLARATION ! 1 1.1 Property Owned by Declarant 1 1.2 Description of Project 1 1.3 Planned Development 1 1.4 Declaration 1 2 DEFINITIONS 2 2.1 Articles 2 2.2 Association 2 2.3 Board 2 2.4 Bylaws 2 2.5 City 2 2.6 Common Maintenance Area 2 2.7 Declarant 3 2.8 Declaration 3 2.9 Drainage and Access Easement 3 2.10 Easements 3 2.11 Final Map 3 2.12 FHA , 3 2.13 FHLMC 3 2.14 FNMA 3 2.15 First Mortgage 3 2.16 First Mortgagee 3 2.17 Height Limit 3 2.18 Landscape Maintenance, Drainage and Access Easement 4 2.19 Lot 4 2.20 Member 4 2.21 Non-Vehicular Access Easement 4 2.22 Mortgagee 4 2.23 Offsite Drainage Easements 4 2.24 Owner 4 G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 2 of 43 Comment: ccs 6128 2.25 Owner Maintenance Area 4 2.26 Plant 4 2.27 Project 4 2.28 VA 5 3 . COMMON MAINTENANCE AREA; MAINTENANCE RESPONSIBILITIES 5 3.1 Easement to Association and Owners 5 3.2 Association Maintenance 5 3.3 Owner Maintenance 5 3.4 Lot Drainage 6 3.5 Soil Conditions 6 3.6 Filled Ground 6 3.7 Vehicular Restrictions 6 3.8 Fences 7 3.9 Limitations on Plants 7 4 MEMBERSHIP AND VOTING RIGHTS IN ASSOCIATION 7 4.1 Membership 7 4.2 Voting Rights 7 5 COVENANT FOR PAYMENT OF ASSESSMENTS 8 5.1 Creation of Lien and Personal Obligation for Assessments 8 5.2 Purpose of Assessments 9 5.3 Limitations on Regular and Special Assessments 9 5.4 Individual Assessment 10 5.5 Uniform Rate of Assessment 11 5.6 Date of Commencement of Regular Assessments; Due Dates 11 5.7 Effect of Non-Payment of Assessments; Remedies of Association 11 5.8 Assignment of Rents 12 5.9 Subordination of the Lien to First Mortgages 13 5.10 Estoppel Certificate 13 5.11 Personal Liability of Owner 13 5.12 Homestead Waiver 14 5.13 Taxation of Association 14 -11- G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 3 of 43 Comment: ccs 5.14 Exempt Property 14 5.15 Uncompleted Facilities 14 5.16 Civil Code Section 1366.1 14 6 COMPLIANCE WITH GOVERNMENTAL APPROVALS 14 6.1 Enforcement By City 14 6.2 Notice and Amendment 15 6.3 Failure of Association to Maintain the Common Maintenance Area .... 15 6.4 Special Assessments Levied by the City 15 6.5 Site Distance Corridor on Lot 9 16 7 INSURANCE AND CONDEMNATION 16 7.1 Insurance 16 7.2 Condemnation 18 8 ANNUAL INSPECTION 18 8.1 By Association 18 8.2 Purpose of Inspection ' 18 8.3 Scope of Inspection 19 8.4 Experts and Consultants 19 8.5 Report to Owners 19 9 LIMITATION ON LIABILITY OF ASSOCIATION'S OFFICERS, DIRECTORS, AND COMMITTEE MEMBERS 19 9.1 Claims Regarding Breach of Duty 20 9.2 Other Claims Involving Tortious Acts and Property Damage 20 10 RIGHTS OF LENDERS 21 10.1 Payments of Taxes or Premiums by First Mortgagees 21 10.2 Priority of Lien of Mortgage 21 10.3 Curing Defaults 21 10.4 Approval of First Mortgagees 21 10.5 Restoration of Common Maintenance Area 22 10.6 Professional Management 22 -111- G:\JHF\MSK Development Grp\Seaview-0667\CC£RsCln091800.wpd Order: 00 Description: 2000.716343 Page 4 of 43 Comment: ccs 10.7 Notice to Mortgagees 22 10.8 Documents to be Available 23 10.9 FHA and VA Approval 23 10.10 Conflicts 23 11 DEVELOPMENT RIGHTS 23 11.1 Limitation of Restrictions on Declarant 23 11.2 Assignment of Rights 24 11.3 Notices; Declarant's Representative 25 11.4 Declarant's Consent 25 12 AMENDMENTS 25 12.1 Amendments By Declarant and Members 25 12.2 Deemed Approval by First Mortgagee 27 12.3 Percentage of Votes 27 13 GENERAL PROVISIONS 27 13.1 Enforcement 27 13.2 Severability 28 13.3 Extension of Declaration 28 13.4 Litigation 28 13.5 No Interference With City Ordinances 28 13.6 Conflict of Provisions 28 13.7 Security 28 13.8 Documents Provided To Prospective Purchasers 29 13.9 Right to Cure Alleged Defects 29 13.10 Alternate Dispute Resolution 31 13.11 Action by Association to Enforce Bond Re Common Maintenance Area 32 EXHIBIT "A" - COMMON MAINTENANCE AREA SUBORDINATION TO DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS -iv- G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 5 of 43 Comment: ccs 6131 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR SEAVIEW THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR SEAVIEW ("Declaration") is made and executed as of August 17,2000, by SEAVIEW RESIDENTIAL LLC, a California limited liability company ("Declarant"), with reference to the facts set forth in the Article hereof entitled "Recitals and Declaration". ARTICLE 1 RECITALS AND DECLARATION 1.1 Property Owned bv Declarant. Declarant is the owner of the property in the City of Carlsbad, County of San Diego, State of California, as described: Lots 1 through 9, inclusive, of Carlsbad Tract No. 98-21 Seaview, in the City of Carlsbad, County of San Diego, State of California, according to Map No. 14013, filed in the Office of the County Recorder of San Diego County, California, on August 2,2000. • 1.2 Description of Project. The Project will contain nine (9) single-family residences. Seaview Maintenance Association, Inc. a California nonprofit mutual benefit corporation ("Association"), is being formed to hold the Easements and to provide for the maintenance of the "Common Maintenance Area" (as defined in this Declaration). The Owners of residential Lots will be Class A Members of the Association. 1.3 Planned Development. Declarant intends to develop the Project as a "Planned Development" (as described in California Civil Code Section 1351[k]), which shall be a "Common Interest Development" within the meaning, and subject to the requirements, of the Davis-Stirling Common Interest Development Act (California Civil Code Section 1350 et seq.), or any successor statutes or laws. Declarant intends to impose on the Project mutually beneficial covenants, conditions, restrictions, limitations, easements, liens and charges under a general plan of improvement and development for the benefit of all present and future Owners and the Project. Declarant intends that this Declaration satisfies the requirements of California Civil Code Section 1354, or any successor statute or law. 1.4 Declaration. Declarant declares and does hereby establish (i) a Planned Development, which is a Common Interest Development under the Davis-Stirling Common Interest Development Act, or any successor statutes or laws, and (ii) a general plan for -1- G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000. 716343 Page 6 of 43 Comment: ccs ^ • ^J132 improvement and development of the Project. Declarant declares that the Project shall be owned, held, conveyed, hypothecated, encumbered, leased, rented, used, occupied and/or improved subject to the covenants, conditions, restrictions, limitations, easements, liens and charges set forth herein, all of which are declared and agreed to be in furtherance of a general plan for the subdivision, improvement and conveyance of the Project, and are established and agreed upon for the purposes of enhancing and protecting the value, desirability and attractiveness of the Project. All of the covenants, conditions, restrictions, limitations, easements, liens and charges set forth herein shall run with the land and shall be binding on and inure to the benefit of all persons having or acquiring any right, title or interest in the Project, shall be enforceable equitable servitudes, and shall be binding on and inure to the benefit of the successors in interest of such persons. ARTICLE 2 DEFINITIONS Each of the following words and phrases shall, in this instrument, have the respective meaning shown below, unless a contrary meaning shall, by the context, be evident. 2.1 Articles. "Articles" shall mean the Articles of Incorporation of the Association, as the same may be amended from time to time. 2.2 Association. "Association" shall mean Seaview Maintenance Association, Inc., a California nonprofit mutual benefit corporation, formed and maintained pursuant to the California Nonprofit Mutual Benefit Corporation Law (California Corporations Code Section 7110, et seq.) (or any successor statutes or laws), and composed of the Owners. 2.3 Board. "Board" shall mean the Board of Directors of the Association. 2.4 Bylaws. "Bylaws" shall mean the Bylaws of the Association, as the same may be amended from time to time. 2.5 City. "City" shall mean the City of Carlsbad. 2.6 Common Maintenance Area. "Common Maintenance Area" shall mean those portions of the Lots, easement areas, and other real property, the maintenance of which is the responsibility of the Association as provided in this Declaration or by easement or by agreement. The Easements (except the Non-Vehicular Access Easement) are included within the Common Maintenance Area. The Common Maintenance Area and the Association's maintenance responsibilities therefor are described in the Article hereof entitled "Common Maintenance Area; Maintenance Responsibilities". The locations and boundaries of the Common Maintenance Area are shown on Exhibit "A" to this Declaration. -2- G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 7 of 43 Comment: ccs 2.7 Declarant. "Declarant" shall mean (i) Seaview Residential LLC, a California limited liability company, which constitutes Declarant under this Declaration and (ii) any successor in interest of Seaview Residential LLC to which all or any of the rights of Declarant under the Articles, the Bylaws and/or this Declaration have been transferred and which is a grantee under a deed that conveys the entire remaining interest of Declarant in the Project. For any successor in interest of Declarant to be deemed the Declarant under the terms hereof, Declarant shall execute and record a certificate so designating said successor as Declarant. Notwithstanding the provisions of the Article hereof entitled "Amendment" to the contrary, this Section may not be amended, modified or rescinded without the (i) prior written consent of Declarant and (ii) recording of said written consent in the Office of the County Recorder of San Diego County, California. 2.8 Declaration. "Declaration" shall mean this Declaration of Covenants, Conditions and Restrictions for Seaview, 'as the same may be amended from time to time pursuant to the Article hereof entitled "Amendment". 2.9 Drainage and Access Easement. "Drainage and Access Easement" shall mean the easement for drainage and access purposes shown on the Final Map. 2.10 Easements. "Easements" shall mean, collectively, the "Offsite Drainage Easements", the "Landscape Maintenance, Drainage and Access Easement", the "Drainage and Access Easement", and the "Non-Vehicular Access Easement". 2.11 Final Map. "Final Map" shall mean Map No. 14013 of Carlsbad Tract No. 98-21 Seaview, filed in the Office of the County Recorder of San Diego County on August 2, 2000. 2.12 FHA. "FHA" shall mean the Federal Housing Administration. 2.13 FHLMC. "FHLMC" shall mean the Federal Home Loan Mortgage Corporation. 2.14 FNMA. "FNMA" shall mean the Federal National Mortgage Association. 2.15 First Mortgage. "First Mortgage" shall mean any deed of trust or mortgage which is the only deed of trust or mortgage encumbering a Lot or which is first in priority, under the recording laws of the State of California, of a series of two or more deeds of trust or mortgages encumbering the same Lot. 2.16 First Mortgagee. "First Mortgagee" shall mean a Mortgagee whose deed of trust or mortgage, as the case may be, is a First Mortgage. 2.17 Height Limit. "Height Limit" for Plants in the Owner Maintenance Area is defined in Section 3.9 below. -3- G:\JHF\MSK Development Grp\Seaview-0667\CCtRsCln091800.wpd Order: 00 Description: 2000.716343 Page 8 of 43 Comment: ccs • -6134 2.18 Landscape Maintenance. Drainage and Access Easement. "Landscape Maintenance, Drainage and Access Easement" shall mean the easement for landscape maintenance, drainage and access purposes shown on the Final Map. 2.19 Lot. "Lot" shall mean any plot of land shown as a separate lot or parcel on any final map or parcel map recorded against the Project. Each Lot is, and shall be deemed to be, a "separate interest" as defined in Section 1351(1)(3) of the California Civil Code, or any successor statutes of laws. 2.20 Member. "Member" shall mean an Owner entitled to membership in the Association. Membership shall be appurtenant to and may not be separated from ownership of a Lot. 2.21 Non-Vehicular Access Easement. "Non-Vehicular Access Easement" shall mean the easement for non-vehicular access purposes over the northeasterly ten (10) feet of Lot 4 as shown on the Final Map. The Non-Vehicular Access Easement is not part of the Common Maintenance Area. 2.22 Mortgagee. "Mortgagee" shall mean the mortgagee under any real property mortgage or beneficiary under any deed of trust which mortgage or deed of trust encumbers any Lot. 2.23 Offsite Drainage Easements. "Offsite Drainage Easements" shall mean those certain perpetual easements for private drainage purposes granted by (i) that certain Easement Deed recorded September 22, 1999, as Document No. 1999-0646978 of Official Records of the San Diego Recorder's office and (ii) that certain Easement Deed recorded December 21, 1999, as Document No. 1999-0824773 of Official Records of the San Diego Recorder's Office. 2.24 Owner. "Owner" shall mean Declarant prior to the first conveyance of a Lot and, thereafter, shall mean the record Owner, whether one or more persons or entities, of fee simple title to any Lot which is part of the Project, including Declarant for as long as Declarant holds title to a Lot, and including a contract vendor under a land sale contract, but excluding those having an interest in a Lot merely as security for the performance of an obligation. 2.25 Owner Maintenance Area. "Owner Maintenance Area" is defined in Section 3.3 below. 2.26 Plant. "Plant" is defined in Section 3.9 below. 2.27 Project. "Project" shall mean all of the property described in Section 1.1 above. and the Easements. -4- Gs\JHF\MSK Development Grp\Seaview-0667\CCiRsCln091800.wpd Order: 00 Description: 2000.716343 Page 9 of 43 Comment: ccs O6135 2.28 VA. "VA" shall mean the Department of Veteran Affairs. ARTICLE 3 COMMON MAINTENANCE AREA; MAINTENANCE RESPONSIBILITIES 3.1 Easement to Association and Owners. There is hereby granted, reserved and created an easement in favor of the Association over, under, upon and across the Lots for maintenance, repair and replacement of, and access to, the landscaping, irrigation system, and drainage system hi the Common Maintenance Area, and for the purpose of exercising the Association's rights and performing its obligations under this Declaration, the Articles and the Bylaws. Further, Declarant hereby grants to the Association, and the Association hereby accepts, the Easements which (except for the Non-Vehicular Access Easement) are included within the Common Maintenance Area and shall be maintained by the Association. In addition, there is hereby granted, reserved and created an easement in favor of each Owner, appurtenant to such Owner's Lot, over, under, upon and across the Common Maintenance Area for drainage, access and related purposes. 3.2 Association Maintenance. The Association shall maintain the landscaping, irrigation system, and drainage system (including, without limitation, all concrete terrace drains) in the Common Maintenance Area in good appearance and repair and in accordance with the requirements of the City. The Association shall provide landscaping and gardening to properly maintain and periodically replace when necessary the vegetation originally planted in the Common Maintenance Area by Declarant. There is a separate water meter (or meters) to account for the water used to irrigate the slopes within the Common Maintenance Area which are the maintenance responsibility of the Association. The Association shall be responsible for paying the billing statements for the water used to irrigate such slopes. The Association shall have the right to enter onto any Lot (but not within the residence) as may be necessary for the maintenance, repair or replacement of the landscaping, irrigation system and drainage system in the Common Maintenance Area. Any damage caused to a Lot by entry of the Association shall be repaired by the Association at its expense, unless the damage to the Lot is a result of failure by the Owner to comply with the provisions of this Declaration, the Articles, the Bylaws or the rules and regulations of the Association. 3.3 Owner Maintenance. Except for the portion of the Lot located within the Common Maintenance Area (the maintenance of which is the responsibility of the Association), each Owner shall keep and maintain in good appearance and repair his or her Lot and the improvements thereon, including, but not limited to, the residence, fences, walls, and catch basins and drain lines installed for Lot drainage (the "Owner Maintenance Area"). The Owner of each Lot shall water, weed, maintain and care for the landscaping located within the Owner Maintenance Area of his or her Lot so that the Lot presents a neat and attractive appearance. No Owner shall interfere with or damage the Common Maintenance Area, or interfere with or -5- G:\JHF\MSK Development Grp\Seaview-0667\CC£,RsCln091800 .wpd Order: 00 Description: 2000.716343 Page 10 of 43 Comment: ccs impede Declarant or the Association in connection with the maintenance, repair or replacement of the Common Maintenance Area. Anything herein to the contrary notwithstanding, the Owner of Lot 4 shall maintain the area affected by the Non-Vehicular Access Easement; provided, however, the Owner of Lot 4 shall not in any way interfere with or impede the Association's Non-Vehicular Access Easement. 3.4 Lot Drainage. The Lots in the Project have been graded and a drainage system has been installed to ensure proper drainage of water from the Lots. All improvements and landscaping on a Lot must be constructed, installed and maintained in a manner which will not obstruct or change the existing drainage system. Any Owner who changes the drainage of his or her Lot shall be responsible for any damages which might result to the properly of such Owner, the Common Maintenance Area and the property of the Association and the property of any other Owner or third party. 3.5 Soil Conditions. Soils and geotechnical conditions vary throughout the Southern California region, and soils are often expansive and composed of large amounts of rock and may react in differing manners to various structural loads. All Lots in the Project have been graded and compacted pursuant to the direction of a geotechnical engineer. Each Owner acknowledges that he or she has received a copy of the soils and compaction report prepared by a geotechnical engineer for such Owner's Lot and the Project. Each Owner agrees to deliver a copy of such report to the person who buys his or her Lot. Additional soils information is available at the City of Carlsbad, Public Works, 1635 Faraday Avenue, Carlsbad, California 92009. 3.6 Filled Ground. Lots in the Project may contain filled ground. It should be recognized that deep compacted fills typically increase in moisture content and settle over time. Settlement occurs slowly and even occurs when subsurface and surface drains are provided. Uniform settlement, where the fill is underlain by gentle, natural ground slopes, often has no significant adverse effect on structures and may not even be noticeable. However, if structures are located across buried cut/fill transitions or where underlying fill depths vary non-uniformly, noticeable distress to structures may occur. Some differentia] settlement has been anticipated to occur in areas of the Project. When designing and constructing patios, gazebos, walls, landscape features and other similar structures on a Lot, the Owner of such Lot should consult a geotechnical engineer, and settlement should be considered and expansion joints should be designed where needed. Information regarding fill ground and other geological information is available at the City of Carlsbad, Public Works, 1635 Faraday Avenue, Carlsbad, California 92009. 3.7 Vehicular Restrictions. No dune buggy, boat, trailer, recreational vehicle, mobile home, motor home, van which is larger than 3/4 ton capacity, camper shell which is -6- G:\JHF\MSK Development Grp\Seaview-0667\CCSJUCln091800 .wpd Order: 00 Description: 2000. 716343 Page 11 of 43 Comment: ccs 6137' detached from a vehicle or mounted on a vehicle, nor truck which is larger than 3/4 ton capacity or has a mounted camper shell which protrudes from the truck from either side or from beyond the rear gate or above the cab ceiling, shall be parked anywhere in the Project except outside of public view. Commercial vehicles shall be permitted within the Project for construction purposes, for purposes of making deliveries and for other similar purposes. No dismantled or wrecked vehicle or equipment shall be parked, stored or deposited in the Project within public view; and no vehicle shall be repaired in the Project within public view. No noisy or smoky vehicles or off-road unlicensed vehicles shall be operated within the Project. 3.8 Fences. Any fence installed by or on behalf of an Owner on his or her Lot shall contain the same materials and shall be consistent with the fencing installed at the Project by Declarant. 3.9 Limitations on Plants. No Owner, or any family member, guest, invitee or tenant of such Owner, shall plant, place or maintain within the Owner Maintenance Area of his or her Lot any tree, bush or other vegetation (hereinafter collectively referred to as "Plant") which exceeds the height of the ridge of the roof of such Owner's residence (the "Height Limit"). Whenever any Plant within the Owner Maintenance Area of a Lot exceeds the Height Limit, the Owner of such Lot (and any other person who causes such Plant to exceed the Height Limit) shall immediately prune the Plant in such a manner that it no longer exceeds the Height Limit. The foregoing provisions of this Section (including the Height Limit) do not apply to any Plant located within the portion of any Lot designated as Common Maintenance Area (which area shall be maintained by the Association as provided in this Declaration). ARTICLE 4 MEMBERSHIP AND VOTING RIGHTS IN ASSOCIATION 4.1 Membership. Every Owner of a Lot which is subject to assessment by the Association shall be a Member of the Association. Membership is appurtenant to and may not be separated from ownership of a Lot. 4.2 Voting Rights. The Association shall have two (2) classes of voting membership. (a) Class A. Class A Members shall be all Owners, with the exception of Declarant, 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 Members. The vote on behalf of the Lot shall be exercised as the Owners among themselves determine, but in no event shall more than one (1) vote be cast with respect to any Lot. -7- G:\JHF\MSK Development Grp\Seaview-OS67\CCtRsCln091800.wpd Order: 00 Description: 2000.716343 Page 12 of 43 Comment; ccs r ''"* 6138' (b) Class B. Class B Member shall be Declarant and shall be entitled to three (3) votes for each Lot owned. The Class B membership shall cease and be converted to Class A membership on the happening of the earlier of the following occur: (i) When the total votes outstanding in Class A equal the total votes outstanding in Class B; or (ii) Two (2) years following the date of the first conveyance of a Lot pursuant to the original final subdivision public report issued by the California Department of Real Estate for the Project. The time periods specified above in this Section shall be extended for each day of delay caused by or resulting from any building moratoria or other action imposed by a governmental body or agency which delays or prevents the construction or sale of a residence on any Lot. As long as two classes of voting memberships exist, any action by the Association that requires approval by the Owners shall require the approval by the designated percentage of voting power in each class, except the action described in the Section hereof entitled "Action by Association to Enforce Board." Voting rights shall vest either at the time assessments are levied against the Owner's Lot or as provided in a subsidy agreement approved by the California Department of Real Estate. Voting for the members of the Board shall be by secret written ballot, and the Members shall be entitled to exercise cumulative voting rights as provided in the Section of the Bylaws entitled "Voting Rights; Required Vote; Cumulative Voting." ARTICLE 5 COVENANT FOR PAYMENT OF ASSESSMENTS 5.1 Creation of Lien and Personal Obligation for Assessments. Declarant, for each Lot owned, covenants, and each Owner of a Lot by acceptance of a deed to a Lot, whether or not it shall be so expressed in the deed, is deemed to covenant to pay to the Association: (i) regular assessments or charges which shall include an adequate reserve fund for the periodic maintenance, repair, and replacement of the Common Maintenance Area improvements; (ii) special assessments; and (iii) individual assessments. The regular and special assessments, together with interest, late charges, costs and reasonable attorneys' fees, shall be a charge on the Lot and shall be a continuing lien upon the Lot against which the assessment is made. The lien shall be effective upon recordation of a Notice of Delinquent Assessment as provided in the Section hereof entitled "Effect of Nonpayment of Assessments; Remedies of Association." Each assessment, together with interest, late charges, costs and reasonable attorneys' fees, shall - 8 — G:\JHF\MSK Development Grp\Seaview-0667\CCtRsCln091800.wpd Order: 00 Description: 2000. 716343 Page 13 of 43 Comment: ccs ^6139 also be the personal obligation of the person who is the Owner of the Lot at the time the assessment is due. The personal obligation for delinquent assessments shall not pass to successors in title of a Lot, unless expressly assumed by them. An individual assessment also shall be a lien on any Lot, except as otherwise provided in the Section below entitled "Individual Assessment." 5.2 Purpose of Assessments. The assessments levied by the Association shall be used exclusively to promote the recreation, health, safety and welfare of the residents of the Project, for the improvement and maintenance of the Common Maintenance Area, and to reimburse the Association for the costs incurred in bringing an Owner into compliance with the Articles, Bylaws, Declaration and rules and regulations adopted by the Board. The regular assessment is the assessment determined annually by the Board to meet the expenses of the Association, including the establishment of reserve accounts, for the next fiscal year based upon the annual budget adopted by the Board pursuant to the Bylaws. A special assessment is an assessment the Board, in its discretion, determines is necessary if the Association's available funds are or will become inadequate to meet the estimated expenses of the Association for the fiscal year. The Board may levy the entire special assessment immediately or levy it in installments over a period the Board determines appropriate. Anything herein to the contrary notwithstanding, the City may levy a special assessment against the Owners as provided in the Section hereof entitled "Special Assessments Levied by the City". An individual assessment against a particular Owner only may be levied by the Board as set forth in Section below entitled "Individual Assessment." The Board shall provide notice by first-class mail to each Owner of any increase in the regular assessment or of any special assessment not fewer than thirty (30) nor more than sixty (60) days prior to the increased regular assessment or special assessment becoming due. 5.3 Limitations on Regular and Special Assessments. The Board shall levy regular and special assessments sufficient to perform the obligations of the Association as provided in this Declaration and the Bylaws; provided, however, except for assessment increases necessary for emergency situations, and except for special assessments imposed to restore funds to the Association reserve account pursuant to California Civil Code Section 1365.5(c) (or any successor statute or law): (a) the Board may not increase the regular assessments for any fiscal year unless the Board has complied with the provisions of California Civil Code Section 1365.5 (preparation and distribution of the budget) (or any successor statute or law) and (b) the Board may not impose a regular assessment that is more than twenty percent (20%) greater than the regular assessment for the Association's preceding fiscal year nor special assessments which in the aggregate exceed five percent (5%) of the budgeted gross expense of the Association for the fiscal year, without the approval of Owners casting a majority of the votes at a meeting or election of the Association conducted in accordance with Chapter 5 (commencing with Section 7510) of Part 3 of Division 2 of Title 1 of the California -9- G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800 .wpd Order: 00 Description: 2000.716343 Page 14 of 43 Comment: ccs ^6140 Corporations Code (or any successor statutes or laws) and Section 7613 of the California Corporations Code (or any successor statute or law) at which a quorum was present or participated. For purposes of this Section, "quorum" means more than fifty percent (50%) of the Owners. An emergency situation is any one of the following: (1) An extraordinary expense required by an order of a court; (2) An extraordinary expense necessary to repair or maintain the Project or any part of it for which the Association is responsible where a threat to personal safety in the Project is discovered; (3) An extraordinary expense necessary to repair or maintain the Project or any part of it for which the Association is responsible that could not have been reasonably foreseen by the Board in preparing and distributing the pro forma operating budget under California Civil Code Section 1365 (or any successor statute or law). However, prior to the imposition or collection of an assessment under this Subsection, the Board shall pass a resolution containing written findings as to the necessity of the extraordinary expense involved and why the expense was not or could not have been reasonably foreseen in the budgeting process, and the resolution shall be distributed to the Members with the notice of assessment; or (4) An extraordinary expense in making the first payment of the earthquake insurance surcharge pursuant to Section 5003 of the California Insurance Code (or any successor statutes or laws). The term "regular assessment for the Association's preceding fiscal year" as used in this Section is deemed to be the regular assessment which would have existed in the absence of any subsidy of assessments agreed to be paid by Declarant. Anything in this Section to the contrary notwithstanding, the limitation on regular and special assessments shall comply with the laws of the State of California at the time the regular or special assessment is levied by the Association. 5.4 Individual Assessment. The Association may impose a specific assessment against an individual Member to reimburse the Association for costs incurred by the Association in the repair of damage to common areas and facilities for which the Member or the Member's guests or tenants were responsible and such assessment may become a lien against the Member's Lot, enforceable by the sale of the Lot under Civil Code Sections 2924, 2924b and 2924c. Further, the Association may impose a specific assessment against an individual Member to reimburse the Association for costs incurred in bringing a Member or his or her Lot into compliance with the provisions of this Declaration, the Articles, the Bylaws and the rules and regulations of the Association, which assessment may be imposed upon the vote of the Board after notice and an opportunity for a hearing which satisfy the requirements of Section 7341 of the California Corporations Code (or any successor statute or law); provided, however, that except to the extent such specific assessment is to reimburse the Association for the cost of -10- G!\JHF\MSK Development Qrp\Seaview-0667\CC6RsCln091800.wpd Order: 00 Description: 2000.716343 Page 15 of 43 Comment: ccs collecting assessments, a specific assessment levied to bring a Member or his or her Lot into compliance with this Declaration, the Articles, the Bylaws, such rules and regulations or architectural guidelines pursuant to this Section shall not constitute a lien on the Owner's Lot. 5.5 Uniform Rate of Assessment, Both regular and special assessments shall be fixed at a uniform rate for all Lots and may be collected on a monthly or other periodic basis as determined by the Board. 5.6 Date of Commencement of Regular Assessments: Due Dates. Regular assessments shall commence as to all Lots in the Project on the first day of the month following the first conveyance of a Lot in the Project to an Owner other than Declarant. The first regular assessment shall be adjusted according to the number of months remaining in the calendar year. 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 each Owner. The due dates for payment of assessments shall be established by the Board, and the Owners may be billed monthly or on such other periodic basis as the Board may determine. 5.7 Effect of Non-Payment of Assessments: Remedies of Association. Any assessment made in accordance with this Declaration shall be a debt of the Owner of a Lot at the time the assessment is due. Any assessment not paid within fifteen (15) days after the due date shall be delinquent. There shall be a late charge often percent (10%) of the delinquent payment or ten dollars ($10), whichever is greater. A late charge may not be imposed more than once on any delinquent payment, but it shall not eliminate or supersede any charges imposed on prior delinquent payments. Any assessment not paid within thirty (30) days after the due date shall bear interest from thirty (30) days following the due date at the rate of twelve percent (12%) per annum. The Association may bring an action at law against the Owner personally obligated to pay the assessment and, in addition thereto or in lieu thereof, may foreclose the lien, if any, against the Lot. Before the Association may place a lien upon an Owner's Lot to collect a debt which is past due under this Declaration, the Association shall notify the Owner in writing by certified mail of the fee and penalty procedures of the Association, provide 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. In addition, any payments toward such a debt shall first be applied to the principal owed, and only after the principal owed is paid in full shall such payments be applied to interest or collection expenses. Except as otherwise provided in the Section above entitled "Individual Assessment," the amount of any delinquent assessment plus costs of collection, late charges, penalties, interest -11- G:\JHF\MSK Development Grp\Seaview-0667\CC&R3Cln091800.wpd Order: 00 Description: 2000.716343 Page 16 of 43 Comment: ccs 6T42 and attorneys' fees, shall be and become a lien upon the Lot when the Association causes to be recorded with the County Recorder of San Diego County, California, a "Notice of Delinquent Assessment." The Notice of Delinquent Assessment shall state the amount of the delinquent assessment and the other charges as may be authorized by this Declaration, a legal description of the Lot against which the assessment has been made, the name of the record Owner of the Lot and, in order for the lien to be foreclosed by nonjudicial foreclosure, the name and the address of the trustee authorized by the Association to enforce the lien by sale. The Notice of Delinquent Assessment shall be signed by the person designated by the Association for that purpose or, if no one is designated, by the president of the Association, and mailed in the manner set forth in Civil Code Section 2942b, to all record owners of the Owner's interest in the Project no later than ten (10) calendar days after recordation. Upon payment of the delinquent assessment and charges for which the Notice of Delinquent Assessment has been recorded, or other satisfaction thereof, the Association shall cause to be recorded a further notice stating the satisfaction and the release of the assessment lien. After the expiration of thirty (30) days following the recordation of a Notice of Delinquent Assessment, the assessment lien may be enforced by sale by the Association after failure of the Owner to pay the assessment. The sale shall be conducted in accordance with the provisions of Section 2924, Section 2924b and Section 2924c of the California Civil Code (or any successor statutes or laws) applicable to the exercise of powers of sale in mortgages or in any other manner permitted by law. The Association shall have the power to purchase the Lot at the foreclosure sale and to hold, lease, mortgage and convey the Lot. Suit to recover a money judgment for unpaid assessments, rent, charges and attorneys' fees may be maintained without foreclosing or waiving the lien securing the assessment. 5.8 Assignment of Rents. As security for the payment of all assessments, each Owner hereby gives to and confers upon the Association the right, power and authority, during the continuance of such ownership, to collect the rents, issues and profits of the Owner's Lot, reserving unto the Owner the right, prior to any default by such Owner in performance of such Owner's obligations under this Declaration or the Articles or Bylaws, to collect and retain such rents, issues and profits as they become due and payable. Upon any such default, the Association may, at any time, upon not less than ten (10) days' written notice to such Owner, either in person, by agent or by a receiver to be appointed by a court of competent jurisdiction, and without regard to the adequacy of any security for such indebtedness, enter upon and take possession of such Owner's Lot or any part thereof, and then, in its own name sue for or otherwise collect such rents, issues and profits, including those past due and unpaid. Upon such collection, the Association (or its authorized representative) shall apply the collected sums less all costs and expenses of operation and collection, including actual attorneys' fees, to the payment of any indebtedness owing to the Association or in performance of any agreement hereunder. The application of such collected sum shall be allocated in such order as the Association may determine to be appropriate, in its sole discretion. The entering upon and taking possession of said Lot, the collection of such rents, issues and profits and the application -12- G:\JHF\MSK Development Grp\Seaview-0667\CCtRsCln091800.wpd Order: 00 Description: 2000.716343 Page 17 of 43 Comment: ccs -tfl.43 thereof as aforesaid shall not cure nor waive any default hereunder or invalidate any act done pursuant to this Declaration. The assignment of rents and powers described in the foregoing paragraph shall not affect, and shall in all respects be subordinate to, the rights and powers of the holder or beneficiary of any First Mortgage on any Lot and, if the holder or beneficiary is Declarant, the rights and powers of such holder or beneficiary under a second Mortgage on any Lot to do the same or similar acts. 5.9 Subordination of the Lien to First Mortgages. Except as otherwise provided by law, the assessment lien shall be subordinate to the lien of any First Mortgage, and the sale or transfer of any Lot pursuant to judicial or nonjudicial foreclosure of a First Mortgage shall extinguish the lien of the assessment as to payments which became due prior to the sale of transfer. No sale or transfer shall relieve the Lot from lien rights for any assessments thereafter becoming due. Except as otherwise provided by law, when the Mortgagee of a First Mortgage or other purchaser of a Lot obtains title to the Lot as a result of foreclosure, the acquirer of title, his or her successors and assigns, shall not be liable for the share of the common expenses or assessments imposed by the Association and chargeable to the Lot which was due prior to the acquisition of title to the Lot by such acquirer, except for a share of the charges or assessments resulting from a re-allocation of the charges or assessments which are made against all Lots. 5.10 Estoppel Certificate. Within ten (10) days after the mailing or delivery of a written request by any Owner, the Board shall provide such Owner with a written statement containing the following information: (i) whether, to the knowledge of the Association, the Owner or the Owner's Lot is in violation of any of the provisions of this Declaration, the Articles, Bylaws, or any rules and regulations of the Association; (ii) the amount of regular and special assessments, including installment payments, paid by the Owner during the fiscal year the request is received; (iii) the amount of any assessments levied against the Owner's Lot that are unpaid as of the date of the statement, including any costs of collection, late charges, penalties, interest or attorneys' fees that as of the date of the statement are or may be made a lien against the Owner's Lot as provided by this Declaration, the Articles, Bylaws, or any rules and regulations of the Association; and (iv) any change in the Association's current regular and special assessments and fees approved by the Board but not yet due and payable as of the date of the statement. 5.11 Personal Liability of Owner. No Member may exempt himself from personal liability for assessments levied by the Association, nor release the Lot owned by him or her from the liens and charges for assessments levied by the Association, nor release the Lot owned by him or her from the liens and charges for assessments by waiver of the use and enjoyment of the common area or by abandonment of his or her Lot. -13- G:\JHF\MSK Development Grp\Seaview-0667\CC6RsCln091800.wpd Order: 00 Description: 2000.716343 Page 18 of 43 Comment: ccs .0144 5.12 Homestead Waiver. Each Owner, to the extent permitted by law, does hereby waive the benefit of any state or federal homestead or exemption laws now in effect, or in effect from time to time hereafter, to the extent of any liens created pursuant to this Declaration, and whether such liens are now in existence or are created at any time in the future. 5.13 Taxation of Association. In the event that any taxes are assessed against the Association for the Common Maintenance Area improvements being maintained by the Association, or the personal property of the Association, rather than against the individual Lots, said taxes shall be added to the regular assessments and, if necessary, a special assessment may be levied against the Lots in an amount equal to said taxes, to be paid in installments, thirty (30) days prior to the due date of each tax installment. 5.14 Exempt Property. All properties dedicated to and accepted by a local public authority, and all properties owned by a charitable nonprofit organization exempt from taxation by the laws of the State of California, shall be exempt from assessment by the Association. However, no-land or improvements devoted to dwelling use shall be exempt from assessment by the Association. 5.15 Uncompleted Facilities. The Board may (but shall have no obligation to) exclude from Association regular assessments those portions of budgeted assessments which are for the purpose of defraying expenses and reserves directly attributable to the existence of landscaping areas and other improvements which are to be maintained by the Association, but are not complete at the time of the assessment. Any such exemption from assessments shall be in effect only until completion of the landscaped area or other improvements, which may be evidenced by recordation of a notice of completion for the landscaped area or other improvement. 5.16 Civil Code Section 1366.1. The Association shall adhere to the requirement of California Civil Code Section 1366.1 (or any successor statute or law) which states as follows: An association shall not impose or collect an assessment, penalty or fee that exceeds the amount necessary for the purpose or purposes for which it is levied. ARTICLE 6 COMPLIANCE WITH GOVERNMENTAL APPROVALS 6.1 Enforcement By City. The City shall have the right, but not the obligation, to enforce by any proceedings at law or in equity, all covenants, conditions, restrictions, reservations and easements imposed or created by the provisions of this Declaration as more particularly set forth in the Section hereof entitled "Enforcement". -14- G:\JHF\MSK Development Grp\Seaview-06e7\CCtR«Cln091800.wpd Order; 00 Description; 2000.716343 Page 19 of 43 Comment: ccs 6.2 Notice and Amendment. The City shall have the right to approve any proposed amendment to the provisions of this Declaration as more particularly set forth in the Section hereof entitled "Amendments Approved by City". 6.3 Failure of Association to Maintain the Common Maintenance Area, In the event the Association fails to maintain the Common Maintenance Area as provided in the Section hereof entitled "Association Maintenance Area", the City shall have the right, but not the obligation, to perform the necessary maintenance. If the City elects to perform such maintenance, the City shall give written notice to the Association, with a copy thereof to all of the Owners in the Project, setting forth with particularity the maintenance which the City finds to be required and requesting such maintenance be performed by the Association within a period of thirty (30) days from the receipt of such notice by the Association. In the event the Association fails to perform such maintenance of the Common Maintenance Area within the time period specified in the City's notice, the City shall be entitled to cause such work to be completed and shall be entitled to reimbursement of the cost incurred for such work from the Owners as provided herein. 6.4 Special Assessments Levied by the City. In the event the City has performed the maintenance of the Common Maintenance Area as provided in the Section above, entitled "Failure of Association to Maintain the Common Maintenance Area", the City shall submit a written invoice to the Association for all costs incurred by the City to perform such maintenance. The City shall provide a copy of such invoice to each Owner in the Project, together with a statement that if the Association fails to pay such invoice in full within the time specified in the City's notice, the City will pursue collection against the Owners pursuant to the provisions of this Section of the Declaration. The aforesaid invoice shall be due and payable by the Association within twenty (20) days after receipt of such invoice by the Association. If the Association fails to pay such invoice in full within the specified time period, the payment shall be deemed delinquent and shall be subject to a late charge in an amount equal to six percent (6%) of the amount set forth in the invoice. Thereafter, the City may pursue collection from the Association by means of any remedies available at law or in equity. Without limiting the generality of the foregoing, in addition to all others rights and remedies available to the City, the City may levy a special assessment against each Owner of a Lot in the Project for an equal pro- rata share of the invoice, plus the late charge. Such special assessment shall constitute a charge on each Lot and shall be a continuing lien upon each Lot against which the special assessment is levied until the special assessment levied on such Lot is paid. Each Owner in the Project hereby vests the City with the right and power to levy such special assessment, to impose a lien upon his or her Lot and to bring all legal actions and/or to pursue lien foreclosure procedures against any Owner and his or her Lot for purposes of collecting such special assessment in accordance with the procedures set forth in the Article hereof entitled "Covenant for Payment of Assessments". -15- G:\JHP\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 20 of 43 Comment: ccs 1*146 6.5 Site Distance Corridor on Lot 9. No structure, fence, wall, tree, shrub, sign or other object over (30) thirty inches above the street level may be placed or permitted to encroach within the area on Lot 9 of this Project identified as a site distance corridor in accordance with City Standard Public Street-Design Criteria, Section 8.B.3. The Owner of Lot 9 in the Project shall be responsible for complying with the terms of this provision. ARTICLE 7 INSURANCE AND CONDEMNATION 7.1 Insurance. (a) Improvements and Personalty. The Association shall consult with its insurance agent, and shall, if appropriate, keep (i) any improvements in the Common Maintenance Area insured against loss by fire and the risks covered by a standard all risk of loss perils insurance policy in the amount of the maximum insurable replacement cost thereof, and (ii) all personalty owned by the Association insured with coverage in the maximum insurable replacement cost of such personalty as determined annually by an insurance carrier or broker selected by the Association. Insurance proceeds for improvements in the Common Maintenance Area and personalty owned by the Association shall be payable to the Association. .In the event of any loss, damage or destruction, the Association shall cause the same to be replaced, repaired or rebuilt if it occurred in the Common Maintenance Area. In the event the cost of such replacement,.repair or rebuilding of the Common Maintenance Area (A) exceeds the insurance proceeds available therefor, or (B) no insurance proceeds are available therefor, the deficiency or full cost thereof shall be assessed to the Owners as a special assessment pursuant to the Section hereof entitled "Limitations on Regular and Special Assessments." In the event of any loss, damage or destruction to improvements on a Lot (other than the landscaping, irrigation and drainage system within the Common Maintenance Area which is maintained by the Association), the Owner of the Lot shall cause the same to be replaced, repaired or rebuilt at no cost to the Association. (b) General Liability Insurance. The Association shall procure and keep in force a comprehensive general liability insurance policy in the name of the Association and the Owners against any liability for bodily injury or property damage resulting from any occurrence in or about the Common Maintenance Area, or the Project in an amount not less than $2,000,000, or such minimum amount as may be provided in Section 1365.9 of the California Civil Code (or any successor statute or law). (c) Fidelity Bond. The Association shall maintain a fidelity bond or insurance in an amount equal to the amount of funds held by the Association during the term of the bond or insurance but not less than one-fourth (1/4) of the annual assessments, plus reserves, naming the Association as obligee or insured and insuring against loss by reason of the acts of the -16- G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 21 of 43 Comment.- ccs Board, officers and employees of the Association, and any management agent and its employees, whether or not such persons are compensated for their services. (d) Best's Rating. Whenever available, all insurance policies shall be issued by insurance companies with a Best's rating which satisfies the requirements of FHLMC, FNMA, GNMA, FHA and VA. (e) Coverage Not Available. In the event any insurance policy, or endorsement thereto, required by this Section is not reasonably available, then the Association shall obtain such other or substitute policy or endorsement as may be available which provides, as nearly as possible, the coverage described above. The Board shall notify the Owners of any material adverse changes in the Association's insurance coverage. (f) Copies of Policies. Copies of all insurance policies (or certificates) showing the premiums to have been paid (or are being paid in installments) shall be retained by the Association and open for inspection by Owners at any reasonable time(s). All insurance policies shall (i) provide that they shall not be cancellable by the insurer without first giving at least ten (10) days' prior notice in writing to the Association; and (ii) contain a waiver of subrogation by the insurer(s) against the Association, Board and Owners. (g) Annual Insurance Review. The Board shall review the insurance carried by the Association at least annually, for the purpose of determining the amount of the insurance referred to in this Section. The Board may obtain a current appraisal of the full replacement cost of any improvements owned by the Association, without deduction for depreciation, by a qualified appraiser, prior to each annual review. Notwithstanding the requirement for annual review, the insurance policies carried by the Association, to the extent possible, shall provide for automatic adjustments of coverage levels to reflect the changes in costs resulting from inflation. (h) Insurance Required by FNMA. FHLMC. VA or FHA. Anything contained herein to the contrary notwithstanding, the Association shall maintain such insurance coverage as may be required by (i) FNMA or FHLMC so long as FNMA or FHLMC, respectively, holds a Mortgage on or owns any Lot, and (ii) VA or FHA so long as VA or FHA, respectively, guaranties or insures a mortgage on or owns any Lot. (i) Officers and Directors. Section 1365.7 of the California Civil Code provides for a partial limitation on the liability of volunteer officers and directors of the Association, provided that certain requirements, as set forth in Civil Code Section 1365.7, are satisfied. The requirements include that general liability insurance and officers' and directors' liability insurance be carried by the Association in specified amounts. The Association shall maintain general liability insurance and officers' and directors' liability insurance in amounts -17- G:\JHF\MSK Development Grp\Seaview-0667\CC£tR8Cln091800.wpd Order: 00 Description: 2000.716343 Page 22 of 43 Comment: ccs "6148 which satisfy the requirements of Civil Code Section 1365.7 (or any successor statute or law) to limit the liability of volunteer officers and directors of the Association. (j) Owners Must Insure: Waiver of Subrogation. Each Owner shall obtain and maintain, at its own expense, fire and casualty insurance coverage as may be required by the Owner's Mortgagee or, if no Mortgage encumbers the Lot or residence, fire and casualty insurance as may be determined by the Board; provided, however, in no event shall such insurance coverage be for an amount less than the replacement cost of the structure, home, improvements and personal property therein with respect to damage or destruction to improvements on the Owner's Lot and/or personal property contained therein. Each Owner hereby acknowledges that the obligation of all Owners to obtain and maintain insurance as stated herein is for the benefit of all Owners. Each Owner hereby promises and agrees that said Owner will not seek to hold any other Owner or the Association liable for any such damage or destruction. Further, each Owner hereby waives any subrogation rights which any insurer of said Owner may have against any other Owner or the Association. Owner shall, upon obtaining the policies of insurance required hereunder, give notice to the insurance carrier or carrier, of the waiver of subrogation rights contained in this Declaration. (k) Owner Reimbursement. In the event any insurance policy deductible amount relating to an Owner's property loss is charged to the Association, the Owner shall reimburse the Association upon written demand for the amount charged to the Association. (1) Proration of Premiums Paid by Declarant. Association insurance policy premiums paid by Declarant shall be prorated between Declarant and the Association as of the date of the first closing of a sale of a Lot in the Project to a retail purchaser, and the Association shall refund to Declarant upon demand the amount of the proration attributable to the period following the proration date. 7.2 Condemnation. In the event any improvements in the Common Maintenance Area maintained by the Association shall be taken for public purposes by condemnation as a result of any action or proceeding in eminent domain, or shall be transferred in lieu of condemnation to any authority entitled to exercise the power of eminent domain, then the award of consideration for such taking or transfer shall be paid to and belong to the Association. ARTICLE 8 ANNUAL INSPECTION 8.1 Bv Association. It shall be the duty of the Board to have the, Common Maintenance Area inspected at least once each year. 8.2 Purpose of Inspection. The purpose of the inspection shall be to (i) determine whether the Common Maintenance Area is being maintained adequately and in accordance with -18- G:\JHF\MSK Development Grp\seaview-0667\cC&R8Cln091800.wpd Order: 00 Description: 2000.716343 Page 23 of 43 Comment: ccs ' 6149 the standards of maintenance set forth in this Declaration (including, without limitation, the Sections hereof entitled "Common Maintenance Area" and "Association Maintenance"), (ii) identify the condition of the Common Maintenance 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 (iii) recommend preventive actions which may be taken to reduce potential maintenance costs to be incurred in the future. 8.3 Scope of Inspection. All of the Common Maintenance Area and any improvements thereon shall be inspected. 8.4 Experts and Consultants. The Board may employ such experts and consultants as are necessary to perform the inspection and make the report required by this Article of the Declaration. 8.5 Report to Owners. The Board shall have a written report prepared of the results of the inspection of the Common Maintenance Area as required by this Section. The report shall be furnished to Owners within the time frame set forth for furnishing Owners with the budget described in California Civil Code Section 1365.5 (or any successor statute or law). The report shall include at least the following: (a) a description of the condition of the Common Maintenance Area, including a list of items inspected and the status of maintenance and repair and the need for replacement of all such items; (b) a description of all maintenance, repair and replacement planned for the ensuing fiscal year which are included in the budget for the Association; (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 such inspections; (e) a report of the status of compliance with the maintenance, repair and replacement needs set forth in the inspection report for preceding years; and (f) such other matters as the Board deems appropriate. -19- G:\JHF\MSK Development Grp\Seaview-0667\CCSRsCln091800.wpd Order: 00 Pascription: 2000.716343 Page 24 of 43 Comment: ccs if" V.tfl.50 ARTICLE 9 LIMITATION ON LIABILITY OF ASSOCIATION'S OFFICERS, DIRECTORS, AND COMMITTEE MEMBERS 9.1 Claims Regarding Breach of Duty. An officer, director, or member of any committee of the Association shall not be personally liable to any Member or to any other person for any error or omission in the discharge of his or her obligations as an officer, director, or committee member, including, without limitation, for his or her failure to provide any services required under this Declaration or under the Bylaws, provided that such officer, director, or committee member acted in good faith, in a manner that such person believed to be in the best interest of the Association and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances. It is the intent of this provision to provide officers, directors, and committee members with protection from liability to the full extent permitted by California Corporations Code Section 7231 (or any successor statute or law or any comparable statute or law), and to the extent this provision is inconsistent with said Section, the Corporations Code shall prevail. Without limiting the generality of the foregoing, this standard of care and limitation of liability shall extend to matters including, but not limited to, the repair and maintenance of the Common Maintenance Area. 9.2 Other Claims Involving Tortious Acts and Property Damage. An officer, director, or member of any committee of the Association shall not be personally liable to any Member or any other person who suffers any injury, including, but not limited to, bodily injury, emotional distress, wrongful death, or property damage or loss as a result of the tortious act or omission of the officer, director, or committee member if all of the following criteria are met: (a) the act or omission was performed within the scope of the officer's, director's, or committee member's duties; (b) the act or omission was performed in good faith; (c) the act or omission was not willful, wanton, or grossly negligent; and (d) the Association maintained and had in effect at the time the act or omission occurred and at the time a claim is made one or more policies of insurance which shall include coverage for general liability of the Association and individual liability of the officers, directors, and committee members of the Association for negligent acts or omissions in that capacity; provided, that both types of insurance are in the minimum amounts specified in California Civil Code Section 1365.7 (or any successor statute or law). It is the intent of this provision to provide volunteer officers, directors, and committee members with protection from liability to the full extent permitted by California Civil Code Section 1365.7 (or any successor statute or -20- G:\OTHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 25 of 43 Comment: ccs law or any comparable statute or law), and to the extent this provision is inconsistent with said Section, the Civil Code shall prevail. ARTICLE 10 RIGHTS OF LENDERS 10.1 Payments of Taxes or Premiums by First Mortgagees. First Mortgagees may, jointly or severally, pay taxes or other charges which are in default and which may or have become a charge against the Common Maintenance Area, unless the taxes or charges are separately assessed against the Owners, in which case, the rights of the First Mortgagees shall be governed by the provisions of their Mortgages. First Mortgagees may, jointly or severally, also pay overdue premiums on casualty insurance policies, or secure a new casualty insurance coverage on the lapse of a policy for the Common Maintenance Area. First Mortgagees making such payments shall be owed immediate reimbursement from the Association. Entitlement to reimbursement shall be reflected in an agreement in favor of any First Mortgagee who requests the same to be executed by the Association. 10.2 Priority of Lien of Mortgage. No breach of the covenants, conditions or restrictions in this Declaration shall affect, impair, defeat or render invalid the lien or charge of any First Mortgage made in good faith and for value encumbering any Lot, but all of the covenants, conditions and restrictions shall be binding upon and effective against any Owner whose title to a Lot is derived through foreclosure or trustee's sale, or otherwise. 10.3 Curing Defaults. A First Mortgagee who acquires title by judicial foreclosure, deed in lieu of foreclosure or trustee's sale shall not be obligated to cure any breach of the provisions of this Declaration which is noncurable or of a type which is not practical or feasible to cure. The determination of the Board made in good faith as to whether a breach is noncurable or not feasible to cure shall be final and binding on Mortgagees. 10.4 Approval of First Mortgagees. Except as provided by statute in case of condemnation or substantial loss to the Lots or common area, unless the holders of First Mortgages encumbering sixty-seven percent (67%) or more of the Lots which are subject to a Mortgage or Owners representing sixty-seven percent (67%) of the voting power of the Association (excluding the vote of Declarant) have given their prior written approval, the Association shall not: (a) By act or omission, seek to abandon, partition, subdivide, encumber, sell or transfer the common area. The granting of easements for public utilities or for other public purposes shall not be deemed a transfer within the meaning of this Subsection. (b) Change the method of determining the obligations, assessments, dues or other charges which may be levied against an Owner. -21- G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 26 of 43 Comment: ccs (c) By act or omission, change, waive or abandon any scheme of regulations, or enforcement thereof, pertaining to the architectural design or exterior appearance of residences, the exterior maintenance of residences, the maintenance of common area walks or common fences and driveways, or the upkeep of lawns and plantings in the project. (d) Fail to maintain fire and extended coverage insurance on the common area on a current replacement cost basis in an amount not less than one hundred percent (100%) of the insurable value, based on current replacement cost. (e) Use hazard insurance proceeds for losses to any portion of the common area for other than the repair, replacement or reconstruction of the common area. 10.5 Restoration of Common Maintenance Area. Any restoration or repair of the Common Maintenance Area after partial condemnation or damage due to an insurable event, shall be performed substantially in accordance with this Declaration and the original plans and specifications unless other action is approved by the holders of First Mortgages on Lots which have at least fifty-one percent (51%) of the votes of Lots encumbered by Mortgages. 10.6 Professional Management. When professional management has been previously required by a First Mortgage holder, a decision to establish self-management by the Association shall require the consent of at least sixty-seven percent (67%) of the voting power of Members of the Association and the approval of holders of First Mortgages on Lots, the Owners of which have at least fifty-one percent (51%) of the votes of Lots encumbered by Mortgages. 10.7 Notice to Mortgagees. Upon written request to the Association identifying the name and address of the holder and the Lot number or address, any First Mortgage holder will be entitled to timely written notice of: (a) Any condemnation loss or any casualty loss which affects a material portion of the Project or any Lot on which there is a First Mortgage held by the Mortgage holder. (b) Any delinquency in the payment of assessments or charges owed by an Owner subject to a First Mortgage held by the Mortgage holder which remains uncured for a period of sixty (60) days. (c) Any lapse, cancellation or material modification of any insurance policy or fidelity bond maintained by the Association. (d) Any proposed action which would require the consent of a specified percentage of Mortgage holders. -22- G:\JHF\MSK Development Grp\Seaview-OS67\CCiRaCln091800.wpd Order: 00 Description: 2000.716343 Page 27 of 43 Comment: ccs ^ 61^3 10.8 Documents to be Available. The Association shall make available to Owners and Mortgagees, and holders, insurers or guarantors of any First Mortgage, current copies of this Declaration, the Articles, the Bylaws, other rules and regulations concerning the Project and the books, records and financial statements of the Association. "Available" means available for inspection, upon request, during normal business hours or under reasonable circumstances. The holders of First Mortgages encumbering fifty-one percent (51%) or more of the Lots subject to a Mortgage shall be entitled to have an audited statement for the immediately preceding fiscal year prepared at their expense if one is not otherwise available. Any financial statement so requested shall be furnished within a reasonable time following the request. 10.9 FHA and VA Approval. So long as there is a Class B membership in the Association, if a Mortgage is guaranteed by VA or insured by FHA, the following actions shall require prior approval of VA or FHA: annexation of additional property to the Project, mergers and consolidations, special assessments and amendment to this Declaration. If VA approval is required to amend this Declaration, a draft of the amendment shall be submitted to and approved by the VA prior to recordation of the amendment. 10.10 Conflicts. In the event of any conflict between any of the provisions of this Article and any of the other provisions of this Declaration, the provisions of this Article shall control. ARTICLE 11 DEVELOPMENT RIGHTS 11.1 Limitation of Restrictions on Declarant. Declarant is undertaking the work of constructing residences and related improvements upon the Project. The completion of that work, and the sale, rental and other disposition of residences is essential to the establishment and welfare of the Project as a residential community. Each Owner of a Lot which is part of the Project acknowledges that Declarant has a substantial interest in assuring compliance with, and enforcement of, the covenants, conditions, restrictions, limitations, easements and reservations contained in this Declaration. The provisions of this Article hereof entitled "Development Rights" shall supercede and control over all other provisions of this Declaration, the Articles and the Bylaws as applied to Declarant. Declarant has the following rights, and there are hereby granted, reserved and created for Declarant nonexclusive easements to exercise such rights. Nothing in this Declaration, the Articles or the Bylaws limits, and no Owner or the Association shall interfere with, Declarant's exercise of these rights and easements. (a) Subdivision. To subdivide and re-subdivide any portion of the Project. -23- G:\JHF\MSK Development Grp\Seaview-0667\CCfcRsCln091800.wpd •der: 00 Description: 2000.716343 Page 28 of 43 Comment: ccs 61EW. (b) Sales. To market, sell, lease or otherwise dispose of any portion of the Project directly or through agents and representatives. (c) Development. To complete excavation, grading, construction of improvements or other development activities to and/or on any portion of the Project. (d) Construction. To alter construction plans and designs, to modify improvements or to construct such additional improvements as Declarant deems advisable in the course of developing the Project. (e) Grading. To carry on such grading work as may be approved by the governmental agencies having jurisdiction. (f) Signs. To erect, construct and maintain on the Project such structures, signs and displays as are reasonably necessary for the conduct of the business of completing the work and disposing of the Project by sale, lease or otherwise. (g) Additional Easements. At any time prior to acquisition of title to a Lot by a purchaser from Declarant, to establish on such Lot, additional licenses, easements, reservations and rights-of-way to Declarant, to utility companies or to others as may be reasonably necessary for the proper development and disposal of the Project. (h) Access. To use all or any portion of the Project for access to the construction, sales and leasing facilities of Declarant by prospective purchasers, sales agents, and Declarant. (i) Models and Offices. To use any structures or vehicles owned by Declarant in the Project as construction offices, model home complexes, or real estate sales or leasing offices. 0 Modify Development Plans. To unilaterally modify Declarant's development plan or plans for the Project, or any portion thereof, including, without limitation, constructing residences of (i) larger or smaller sizes, (ii) greater or lesser values, or (iii) different types or architectural styles or designs. (k) Repairs. To make repairs to any improvements in the Project, including, without limitation, the residences and the Common Maintenance Area. II .2 Assignment of Rights. All or any portion of the rights of Declarant under this Declaration, the Articles, the Bylaws or in any related documents may be assigned by Declarant to any successor in interest to any portion of Declarant's interest in any portion of the Project by an express written assignment which specifies the rights of a Declarant so assigned. -24- G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 29 of 43 Comment: ccs 11.3 Notices: Declarant's Representative. The Association shall provide Declarant with all notices and other documents to which a First Mortgagee is entitled to under this Declaration (provided that Declarant shall be given such notices and other documents without making written request therefor). Commencing on the date on which Declarant no longer has an elected or appointed representative on the Board, and continuing until the date on which Declarant no longer owns a Lot in the Project, the Association shall provide Declarant with written notice of all meetings of the Board as if Declarant were an Owner and Declarant shall be entitled to have a representative present at all such Board meetings ("Declarant's Representative"). The Declarant's Representative shall be present in an advisory capacity only and shall not be a Board member or have any right to vote on matters coming before the Board. 11.4 Declarant's Consent. This Section entitled "Development Rights" shall not be amended without the prior written consent of Declarant. ARTICLE 12 AMENDMENTS 12.1 Amendments By Declarant and Members. (a) By Declarant. Until the first close of escrow on the sale of a Lot to an Owner (other than Declarant), this Declaration may be amended or terminated by Declarant by the recording of an instrument for such purpose with the County Recorder of the County of San Diego. (b) By Members. Except as may otherwise be stated in this Declaration, during the period of time prior to conversion of the Class B membership in the Association to Class A membership, this Declaration may be amended at any time and from time to time by the vote or written consent of seventy-five percent (75%) of the voting power of each class of Members of the Association, and any such amendment shall become effective upon recording with the Office of the County Recorder of San Diego County, California. After conversion of the Class B membership in the Association to Class A membership, this Declaration may be amended at any time and from time to time by the vote or written consent of (i) seventy-five percent (75%) of the total voting power of the Association; and (ii) at least seventy-five percent (75%) of the voting power of Members of the Association other than Declarant. Notwithstanding the foregoing, the percentage of voting power necessary to amend a specific clause or provision of this Declaration shall be not less than any percentage of affirmative votes prescribed for action to be taken under that clause or provision. (c) Amendments Material to Mortgagees. Anything herein stated to the contrary notwithstanding, no material amendment may be made to this Declaration without the prior written consent of sixty-seven percent (67%) or more of the Mortgagees holding First Mortgages encumbering Lots within the Project (based upon one (1) vote for each First -25- G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800 .wpd Order: 00 Description: 2000.716343 Page 30 of 43 Comment: ccs Mortgage. Generally, "material amendment" shall mean, for purposes of this Section, any amendments to provisions of this Declaration governing any of the following subjects: (1) The fundamental purpose for which the Project was created (such as a change from residential use to a different use). (2) Assessments, assessment liens or the priority of assessment liens. (3) Reserves for maintenance, repair and replacement of the Common Maintenance Area. (4) Responsibilities for maintenance and repairs. (5) Insurance or fidelity bonds. (6) Restoration or repair of the Project after a hazard damage or partial condemnation. (7) Rights to use the Common Maintenance Area. (8) Expansion or contraction of the Project or the addition, annexation or withdrawal of property to or from the Project. (9) Voting rights. (10) Convertibility of Lots into common area or of common area into Lots; provided, however, (i) minor boundary adjustments shall not require amendment to this Declaration or consent of any First Mortgagee and (ii) no boundary adjustment of a Lot shall require the consent of a First Mortgagee unless such First Mortgagee's Mortgage encumbers such Lot. (11) Redefinition of boundaries of any Lot or the Common Maintenance Area, other than a minor boundary adjustment. (12) The interests in the Common Maintenance Area. (13) Leasing of Lots. (14) Imposition of any right of first refusal or similar restriction on the right of an Owner to sell, transfer, or otherwise convey his or her Lot. -26- G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000. 716343 Page 31 of 43 Comment: ccs ~ 6157 (15) Any action to terminate the legal status of the Association after substantial destruction or condemnation. (16) The requirement of retention of professional management of the Association. (17) Any provision which is expressly for the benefit of First Mortgagees or insurers or guarantors of First Mortgages. An amendment to this Declaration shall not be considered material if it is for the purpose of correcting technical errors or for clarification. (d) Amendments Approved by City. Notwithstanding the above provisions, any proposed amendment of this Declaration shall be provided to the City before such amendment becomes effective. If the proposed amendment affects (i) the Common Maintenance Area, (ii) the provisions of the Article hereof entitled "Compliance with Governmental Approvals", or (iii) the rights of the City under this Declaration, then such amendment shall require the prior approval of the City, which approval shall not be unreasonably withheld or delayed. A copy of any amendment approved by the City and recorded with the Office of the County Recorder of San Diego County shall be delivered to the City for the official record within thirty (30) days after the Association receives the recorded amendment from the County Recorder's Office. 12.2 Deemed Approval bv First Mortgagee. A First Mortgagee who receives a written request delivered by certified or registered mail, return receipt requested, to approve any amendment who does not deliver or mail to the requesting party a negative response within thirty (30) days, shall be deemed to have approved such request. 12.3 Percentage of Votes. Notwithstanding the above provisions, the percentage of voting power necessary to amend a specific clause or provision in this Declaration shall not be less than the percentage of affirmative votes necessary for action to be taken under that clause or provision. ARTICLE 13 GENERAL PROVISIONS 13.1 Enforcement. The Association, Declarant, any Owner and the City shall have the right to enforce by any proceedings at law or in equity, all covenants, conditions, restrictions, reservations and easements imposed or created by the provisions of this Declaration. Each Owner and the City shall have a right of action against the Association for any failure of the Association to comply with the provisions of this Declaration or of the Articles or Bylaws. Failure by the Association, Declarant, any Owner or the City to enforce any covenant, -27- G:\OHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 32 of 43 Comment: ccs condition, restriction, reservation or easement in this Declaration shall not be deemed a waiver of the right to do so thereafter. 13.2 Severability. Should any provision in this Declaration be void or become invalid or unenforceable in law or equity by judgment or court order, the remaining provisions shall be and remain in full force and effect. 13.3 Extension of Declaration. Each and all of the covenants, conditions and restrictions shall run with and bind the land for a term of sixty (60) years from the date this Declaration is recorded, after which date they shall automatically be extended for successive periods often (10) years, unless the Owners of two-thirds (2/3) of the Lots subject to this Declaration have executed and recorded at any time within six (6) months prior to the end of the sixty (60) year period, or within six (6) months prior to any such ten (10) year period, in the manner required for a conveyance of real property, a written instrument in which it is agreed that the restrictions shall terminate at the end of the sixty (60) year period or at the end of any ten (10) year period. 13.4 Litigation. In the event of litigation arising out of or in connection with this . Declaration, the prevailing party shall be entitled to receive costs of suit and such sum for attorneys' fees as the Court deems reasonable. 13.5 No Interference With City Ordinances. No provision in this Declaration, and no contract of sale, lease or other written document, shall establish any restriction on Declarant or others which would prevent any other person or entity from complying with all applicable provisions of the governmental regulations referred to in the Article of this Declaration entitled "Governmental Regulations" or any ordinances, rules, policies or regulations. 13.6 Conflict of Provisions. In the event of a conflict between or among the provisions of this Declaration, the Articles and/or Bylaws, the provisions of this Declaration shall control. In the event of a conflict between the provisions of the Articles and Bylaws, the provisions of the Articles shall control. 13.7 Security. THE ASSOCIATION, DECLARANT, AND ANY SUCCESSOR DECLARANT SHALL NOT IN ANY WAY BE CONSIDERED AN INSURER OR GUARANTOR OF SECURITY WITHIN THE PROJECT; NOR SHALL ANY OF THEM BE HELD LIABLE FOR ANY LOSS OR DAMAGE BY REASON OF FAILURE TO PROVIDE ADEQUATE SECURITY OR OF INEFFECTIVENESS OF SECURITY MEASURES UNDERTAKEN. NO REPRESENTATION OR WARRANTY IS MADE THAT ANY SECURITY SYSTEM CANNOT BE COMPROMISED OR CIRCUMVENTED, NOR THAT ANY SUCH SYSTEM OR SECURITY MEASURES UNDERTAKEN WILL IN ALL CASES PREVENT LOSS OR PROVIDE THE DETECTION OR PROTECTION FOR WHICH THE SYSTEM IS DESIGNED OR INTENDED. EACH OWNER ACKNOWLEDGES, -28- G:\JHF\MSK Development Grp\Seaview-0667\CCtRsCln091800.wpd Order: 00 Description: 2000.715343 Page 33 of 43 Comment: ccs UNDERSTANDS AND COVENANTS TO INFORM ITS TENANTS THAT THE ASSOCIATION, ITS BOARD AND COMMITTEES, DECLARANT, AND ANY SUCCESSOR DECLARANT ARE NOT INSURERS OR GUARANTORS AND THAT EACH PERSON USING THE PROJECT ASSUMES ALL RISKS FOR LOSS OR DAMAGE TO PERSONS, TO LOTS AND TO THE CONTENTS OF LOTS RESULTING FROM ACTS OF THIRD PARTIES. 13.8 Documents Provided To Prospective Purchasers. Each Owner, other than Declarant, shall as soon as practicable before sale of a Lot, provide to the prospective purchaser the disclosures, information and documents required by law, as the law from time to time may be changed. The aforesaid disclosures, information and documents may include, but are not limited to: (a) A copy of the Articles, Bylaws and Declaration. (b) A copy of the most recent financial documents of the Association distributed in accordance with California Civil Code Section 1365 (or any successor statute or law). (c) A true statement in writing from an authorized representative of the Association as to the amount of the Association's current annual and special assessments and fees, as well as any assessments levied upon such Lot which are unpaid as of the date of the statement. The statement shall also include true information on late charges, interest and costs of collection which, as of the date of the statement, are or may be made a lien upon the Lot. (d) A copy of the preliminary list of defects provided to each Member of the Association pursuant to Section 1375 of the California Civil Code (or any successor statute or law), if applicable, unless the Association and Declarant (or builder) subsequently enter into a settlement agreement or otherwise resolve the matter and the Association complies with Civil Code Section 1375.1 (or any successor statute or law). The preliminary list of defects shall also include a statement that a final determination as to whether the list of defects is accurate and complete has not been made. (e) A copy of the latest information provided for in Section 1375.1 of the California Civil Code (or any successor statute or law), if applicable. (f) A statement setting forth any change in the Association's current regular and special assessments and fees which have been approved by the Board but have not become due and payable as of the date this statement is provided. 13.9 Right to Cure Alleged Defects. It is the intent that the Common Maintenance Area, each Lot, each residence and all improvements constructed within the Project be built in -29- G:\JHF\MSK Development Grp\Saaview-0667\CCiRsCln091800.wpd Order: 00 Description: 2000.716343 Page 34 of 43 Comment: ccs compliance with all applicable building codes and ordinances then in effect and that they be of a quality that is consistent with good construction and development 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 exists and Declarant's responsibility therefor. It is Declarant's intent to resolve all disputes and claims regarding "Alleged Defects" (as defined below) amicably and without the necessity of time consuming and costly litigation. Accordingly, the Association, Board and all Owners shall be bound by the following claim resolution procedure: (a) Right to Cure. In the event that the Association, Board or any Owner or Owners (collectively, "Claimant") claims, contends or alleges that any portion of the Common Maintenance Area, any Lot, any residence on a Lot and/or any improvements constructed on the Project are defective or that Declarant, or its agents, consultants, contractors or subcontractors (collectively, "Agents"), were negligent in the planning, design, engineering, grading, construction or other development thereof (collectively, an "Alleged Defect"), Declarant hereby reserves the right for itself and any successor or assign to inspect, repair and/or replace such Alleged Defect as set forth herein. (b) Notice. In the event a Claimant discovers any Alleged Defect, such Claimant shall notify Declarant in writing, within fifteen (15) days of discovery of the Alleged Defect, of the specific nature of such Alleged Defect ("Notice of Alleged Defect"). (c) Right to Enter. Inspect. Repair, and/or Replace. Within a reasonable time after the receipt by Declarant of a Notice of Alleged Defect, or the independent discovery of any Alleged Defect by Declarant, Declarant shall have the right, upon reasonable notice to Claimant and during normal business hours, to enter onto or into, as applicable, the Common Maintenance Area, any Lot, any residence on a Lot, and/or any improvement on the Project for the purposes of inspecting and, if deemed necessary by Declarant, repairing and/or replacing such Alleged Defect. In conducting such inspection, repairs and/or replacement, Declarant shall be entitled to take any actions as it shall deem reasonable and necessary under the circumstances. (d) Legal Actions. In the event a Claimant initiates any action or proceeding against Declarant alleging damages (1) for the costs of repairing or the replacement of any Alleged Defect, (2) for the diminution in value of any real or personal property resulting from such Alleged Defect, or (3) for any consequential damages resulting from such Alleged Defect, any judgment, award or settlement payment in connection therewith shall first be used to correct and/or repair such Alleged Defect or to reimburse the Claimant for any costs actually incurred by such Claimant in correcting and/or repairing the Alleged Defect. In the event the Claimant is the Association, the Association must provide written notice to all Members prior to initiation of any action or proceeding against Declarant, which notice shall (at a minimum) include (1) a description of the Alleged Defect, (2) a description of the attempts of Declarant to correct such -30- G:\JHP\MSK Development Grp\Seaview-0667\CC£.RaCln091800 .wpd Order: 00 Description: 2000.716343 Page 35 of 43 Comment: ccs 6161 Alleged Defect and the opportunities provided to Declarant to correct such Alleged Defect, (3) the estimated cost to repair such Alleged Defect, (4) the name and professional background of the attorney retained by the Association to pursue the claim against Declarant and a description of the relationship between such attorney and any members of the Board (if any), (5) a description of the fee arrangement between such attorney and the Association, (6) the estimated attorneys' fees and expert fees and costs necessary to pursue the claim against Declarant and the source of the funds which will be used to pay such fees and expenses, (7) the estimated time necessary to conclude the action against Declarant, and (8) an affirmative statement from the Board that the action is in the best interests of the Association and its Members. Failure to provide the notice required herein shall not prejudice any action or proceeding filed by the Association. In the event the Association recovers any funds from Declarant (or any other person or entity) to repair an Alleged Defect, any excess funds remaining after repair of such Alleged Defect shall be paid into the Association's reserve fund unless at least seventy-five percent (75%) of the voting power of the Association elects to allocate or distribute the remaining funds otherwise. (e) No Additional Obligations: Irrevocability and Waiver of Right. Nothing set forth in this Section shall be construed to impose any obligation, on Declarant to inspect, repair or replace any item or Alleged Defect for which Declarant is not otherwise obligated to do under applicable law or any limited warranty (if any) provided by Declarant in connection with the sale of the Lots and/or the improvements constructed thereon. The right of Declarant to enter, inspect, repair, and/or replace that is reserved hereby shall be irrevocable and may not be waived or otherwise terminated, except by a writing, in recordable form, executed and recorded by Declarant in the Official Records of San Diego County. Notwithstanding any other provision of this Declaration, this Section shall not be amended without the prior written consent of Declarant. 13.10 Alternate Dispute Resolution. (a) It is the desire and intention of the parties to agree upon a mechanism and procedure under which any controversy, breach or dispute arising out of this Declaration or the condition of the Project, including without limitation, the Lots and the Common Maintenance Area (which controversy, breach or dispute shall include, without limitation, any dispute between Declarant, on the one hand, and any Owner, the Association or the Board on the other hand, arising over the design, specifications, surveying, planning, supervision, testing or observation of construction or construction of any residence or improvement to, or survey of, the Project, including without limitation, the Lots and the Common Maintenance Area) will be resolved in a prompt and expeditious manner. Accordingly, any controversy, breach or dispute arising out of this Declaration or the condition of the Project, or relating to the interpretation of any term or provision of this Declaration, shall be heard by a referee pursuant to the provisions -31- G:\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 36 of 43 Comment: ccs 6162 of the California Code of Civil Procedure, Sections 638 through 645.1, inclusive (or any successor statutes or laws). (b) The parties shall promptly and diligently cooperate with one another, and the referee and shall perform such acts as may be necessary to obtain a prompt and expeditious resolution of the dispute or controversy in accordance with the terms of this Declaration; (c) The parties agree that the referee shall have the power to (i) decide all issues of fact and law and to report, in writing, his or her decision thereon, and (ii) to issue all legal and equitable relief appropriate under the circumstances of the dispute or controversy before him or her; (d) The parties shall agree upon a single referee who shall then try all issues, whether of fact or law, and report a finding and judgment thereon. If the parties are unable to agree upon a referee within ten (10) days of a written request to do so by any party, then any party may seek to have a referee appointed pursuant to California Code of Civil Procedure Sections 638 and 640 (or any successor statutes or laws); (e) The cost of such proceeding shall be borne equally by each party to the dispute. Notwithstanding any other provision of this Declaration, this Section shall not be amended without the prior written consent of Declarant. 13.11 Action by Association to Enforce Bond Re Common Maintenance Area. In the event improvements to be installed by Declarant to the Common Maintenance Area have not been completed prior to the issuance by the California Department of Real Estate of a final subdivision public report covering the Project, and in the further event the Association is the obligee under a bond to secure the obligation of Declarant to complete the improvements, then if the improvements have not been completed and a notice of completion filed within sixty (60) days after the completion date specified in the planned construction statement appended to the bond, the Board shall consider and vote upon the question of whether or not to bring action to enforce the obligations under the bond. If the Association has given an extension in writing for the completion of any improvement, then the Board shall consider and vote on the question if the improvements have not been completed and a notice of completion filed within thirty (30) days after the expiration of the extension period. In the event the Board determines not to take action to enforce the obligations secured by the bond, or does not vote on the question as above provided, then, in either event, upon petition signed by Members representing five percent (5%) or more of the voting power of the Association (excluding the voting power of Declarant), the Board shall call a special meeting of the Members of the Association to consider the question of overriding the decision of the Board or of requiring the Board to take action on the question of enforcing the obligations secured by the bond. The meeting of Members shall be held to less -32- G:\JHF\MSK Development Grp\Seaview-0€67\CC&H.sCln091800.wpd Order: 00 Description: 2000.716343 Page 37 of 43 Comment: ccs d!63 than thirty-five (35) days nor more than forty-five (45) days following the receipt of the petition. At the meeting, a vote of a* majority of the voting power of Members of the Association, excluding the vote of 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 thereafter implement the decision by initiating and pursuing appropriate action in the name of the Association. IN WITNESS WHEREOF, the undersigned, being Declarant herein, has executed this Declaration as of the date first set forth above. SEAVIEW RESIDENTIAL LLC, a California limited liability company By: MSK MANAGEMENT, INC., a California corporation, Manager By. Title: VW Pce^ dent" -33- Gt\JHF\MSK Development Grp\Seaview-0667\CC&RsCln091800.wpd Order: 00 Description: 2000.716343 Page 38 of 43 Comment: ccs 6164 STATE OF COUNTY OF ) )ss. ) On I?g£PmbA/i ^ 20^0, before me, (=: Public in and for said State, personally appeared L. A. , a Notary personally known to me to be the person(s) whose name(s)45/are subscribed to the within instrument and acknowledged to me thatfce/she/they executed the same in his/her/their authorized capacity(ies), and they by his/ker/their signature(s) on the instrument, the person(s), or the entity upon behalf of which he person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) STATE OF COUNTY OF ) ) ss. ) EHzabethLLaymanl Comm. #1137393 £(NOTARY PUBLIC CALIFORNIA^SAN DIEQO COUNTY 0Comm. Exp. May 11. 2001 J On 20 , before me, Public in and for said State, personally appeared _, a Notary personally known to me to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and they by his/her/their signature(s) on the instrument, the person(s), or the entity upon behalf of which he person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (Seal) -34- G:\JHF\MSK Development Grp\Seaview-0667\CC£RsClnOS1800.wpd Order; 00 Description: 2000.716343 Page 39 of 43 Comment: ccs 6165 EXHIBIT A COMMON MAINTENANCE AREA G:\JHP\MSK Development Grp\Seaview-0667\CCtRsCln091800.wpd Order: 00 Description: 2000.716343 Page 40 of 43 Comment: ccs CO CO <-! CO 5 HOA MAINTAINED DRAINAGE EASEUENT 2SS.2 G U. OFTSTE DRAINAGE EASEMENT -TYPICAL HOMEOWNER MAINTAINED CATCH BASIN NOTES: ® EASEUENT 10 BE GRANTED TO THE HOMEOWNER'S ASSOCIATION FDR LANDSCAPE MAINTENANCE, DRANAGE AMD ACCESS PURPOSES EASEMENT S PRWATRY OWNED AND PRIVATELY MAINTAINED BY THE HOMEOWNER'S ASSOCIATION. : ® EASEMENT TO BE GRANTED TO THE HOMEOWNER'S ASSOCW10N FOR DRAINAGE AND ACCESS PURPOSES. EASEUENT B PRIVATELY OWNED AND PRNATaY MAINTAINED BY THE HOMEOWNER'S ASSOCIATION. © EASEMENT TO BE GRANTED TO THE HOMEOWNER'S ASSOCIATION FOR NON-VEHICULAR ACCESS PURPOSES. EASEMENT IS PRIVATELY OWNED BY THE HOMEOWNER'S ASSOCIATION BUT MAINTAINED BYTHE OWNER OF LOT 4. NOTES: 1. ALL FENCES AND WALLS SHALL BE MAINTANED BY THE INDMDUAL HOMEOWNER. 2. ALL CATCH BASINS AND ORAINUNES INSTALLED FOR LOT DRANAGE SHALL BE MANTAJNED BY THE INDIVIDUAL HOMEOWNER. HOA MAINTAINED 5' DRAINAGE ' EASEMENT MAINTENANCE AREA EXHIBIT SEAVIEW CARLSBAD, CALIFORNIA HOA MAINTENANCE AREA to0o •Uc "M0 8.<d Hi oo § •H•U O0 Oo NOT TO SCALE O 1 O *J SUBORDINATION TO DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR GOOD, VALUABLE AND ADEQUATE CONSIDERATION, receipt of which is hereby acknowledged, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as beneficiary under that certain Deed of Trust with Assignment of Rents recorded November 15, 1999, at File/Page No. 1999-0757441, Official Records of San Diego County, California, hereby consents to the recordation of, and subordinates the lien and charge of the deed of trust and assignment of rents to, the foregoing Declaration of Covenants, Conditions and Restrictions. Dated: Ocot^- n . 2000 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION Title: By_ Title: G:\JHF\MSK Development Grp-667\Seaview\CC&RsCln091800.wpd rder: 00 Description: 2000.716343 Page 42 of 43 Comment: ccs STATE OF CALIFORNIA ) 6168 )ss. COUNTY OF SAN DIEGO ) On ti£te\n\> 1 7 , 2Q££} before me, the undersigned, a Notary Public in and for said County and State, personally appeared Cgj&u (L-^ il , yi|o7Ctfr-«> _ , personally known to me (or proved to-me on-the-ba&is-of— satisfactory evidence) to be the person(s) whose namej(s)4s/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his&sr/their authorized capacityfles), and that by hisAor/their_signatures on the instrument the persbn(s), or the entity upon behalf of which the person(s)~acted, executed the instrument. ~ WITNESS my hand and official seal. f '~~;f/(Y /-/ ^i/K^>*~< \ Notary fliftfc ftfr the State ofJCommlalon # . .. fkitoy Public -California I California, Principal Office Son Otego County r jn San Diego County My Comm. Expires Jon 8. 2003 9 ° J STATE OF CALIFORNIA ) )ss. COUNTY OF SAN DIEGO ) On , 20 , before me, the undersigned, a Notary Public in and for said County and State, personally appeared _ , personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public for the State of California, Principal Office in San Diego County G:\JHF\MSK Development Grp-667\Seaview\CC&RsCln091800.wpd 00 Description: 2000. 716343 Page 43 of 43 Comment: ccs