MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF CPN II

Transcription

1 MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF CPN II

2 MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF CPN II TABLE OF CONTENTS ARTICLE I DEFINITIONS 1. Act 2 2. Additional Annexable Property 2 3. Agencies 2 4. Allocated Interests 2 5. Annexable Property 2 6. Association 3 7. Castle Pines North Associations 3 8.Common Elements 3 9. Common Expense Liability Common Expenses Community Declarant Declaration Delegate Delegate District Design Guidelines Design Review Committee Development Rights Executive Board Improvements Lot Lots that May Be Included Member Owner Period of Declarant Control Person Security Interest Security Interest Holder Special Declarant Rights Subassociation Supplemental Declaration 7 ARTICLE II ASSOCIATION; MEMBERSHIP AND VOTING RIGHTS 1. Association 7 2. Executive Board 7 3. Membership in Association 7 4. Establishment of Delegate Districts; Initial Delegate District 8 5. Voting Rights of Members 8 i

3 6. Voting Rights of Delegates 8 7. Merger or Consolidation with any of the Castle Pines North Associations 9 ARTICLE III EXECUTIVE BOARD MEMBERS AND OFFICERS 1. Authority of Executive Board 9 2. Election of Part of Executive Board During Period of Declarant Control 9 3. Authority of Declarant; Termination of Period of Declarant Control 9 4. Delivery of Documents by Declarant Budget Association Books and Records 10 ARTICLE IV COVENANT FOR MAINTENANCE ASSESSMENTS 1. Personal Obligation for Assessments Purpose of Assessments Initial Annual Assessment Rate of Assessment Date of Commencement of Annual Assessments Special Assessments Lien for Assessments Priority of Association Lien Assessments/Charges for Services to Separate Areas of Community Receiver Certificate of Status of Assessments Effect of Non-Payment of Assessments; Remedies of the Association Surplus Funds Working Capital Fund Assessments for Misconduct 16 ARTICLE V DESIGN REVIEW COMMITTEE 1. Membership Purposes Organization and Operation of Committee Expenses Design Guidelines and Rules Limitation of Liability Certificate of Compliance Approval by Subassociation Architectural Committee(s) General Approval Required Removal of Nonconforming Improvements Development by Declarant 20 ii

4 ARTICLE VI INSURANCE 1. Insurance General Provisions of Insurance Policies Deductibles Payment of Insurance Proceeds Association Insurance as Primary Coverage Acceptable Insurance Companies Insurance to be Maintained by owners Annual Review of Insurance Policies Notice of Cancellation 24 ARTICLE VII DAMAGE OR DESTRUCTION 1. Damage or Destruction Lots 24 ARTICLE VIII EXTERIOR MAINTENANCE 1. General Association's Right to Repair, Maintain, Restore and Demolish Access Easement Owner's Misconduct Cooperation with Subassociations, Districts and any of the Castle Pines North Associations 27 ARTICLE IX RESTRICTIONS 1. General Plan Restrictions Imposed Residential Use Declarant's Use Household Pets Temporary Structures; Unsightly Conditions Miscellaneous Improvements Vehicular Parking, Storage and Repairs Nuisances No Hazardous Activities No Annoying Light, Sounds or Odors Restrictions on Trash and Materials Minor Violations of Setback Restrictions Rules and Regulations Lots to be Maintained Leases 33 iii

5 17. Management Agreements and Other Contracts Maintenance of Grade and Drainage Use of Common Elements Street Lighting Easement for Encroachments Easements for Drainage and Utilities Notice and Release as to Golf Course Feeding of Wildlife Landscaping 36 ARTICLE X PROPERTY RIGHTS IN THE COMMON ELEMENTS 1. Owners' Easements Extent of Owners' Easements Delegation of Use Conveyance or Encumbrance of Common Elements 37 ARTICLE XI GENERAL PROVISIONS 1. Enforcement Severability Conflict of Provisions Conflict with Act Annexation Duration, Revocation, and Amendment Registration of Mailing Address HUD or VA Approval Description of Lots Termination of Community Transfer of Special Declarant Rights Eminent Domain Association as Trustee Dedication of Common Elements 42 Exhibit A - The Community Exhibit B - The Common Elements Exhibit C - Title Exceptions Exhibit D - Annexable Property Exhibit E - Additional Annexable Property iv

6 MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF CPN II THIS Master Declaration is made and entered into by Village Homes of Colorado, Inc., a Colorado corporation ("Declarant"). WITNESSETH: WHEREAS, Declarant is the owner of that certain real property in the County of Douglas, State of Colorado, which is described on Exhibit A attached hereto and incorporated herein by this reference; and WHEREAS, Declarant desires to subject and place upon the above-described property certain covenants, conditions, restrictions, easements, reservations, rights-of-way, obligations, liabilities and other charges set forth herein, for the purpose of protecting the value and desirability of said property and for the purpose of furthering a plan for the improvement, sale and ownership of said property, to the end that a harmonious and attractive development of said property may be accomplished and the health, comfort, safety, convenience and general welfare of the Declarant, its successors and assigns in said property, or any portion thereof, may be promoted and safeguarded; and WHEREAS, a common interest community may be created pursuant to the Act (as hereinafter defined) only by recording a declaration executed in the same manner as a deed. The declaration must be recorded in every county in which any portion of the common interest community is located and must be indexed in the grantee's index in the name of the common interest community and in the name of the association, and in the grantor's index in the name of each person executing the declaration. No common interest community is created until the plat or map for the common interest community is recorded. NOW, THEREFORE, Declarant desires to provide for creation of a common interest community, and in furtherance thereof hereby declares that all of the properties described above shall be held, sold, and conveyed subject to the following covenants, conditions, restrictions, easements, rights-of-way, obligations, liabilities, charges and other provisions set forth herein, which are for the purpose of protecting the value and desirability of, and which shall run with, the above-described property and be binding on all parties having any right, title, or interest in the above-described property or any part thereof, their heirs, personal representatives, successors, and assigns, and shall inure to the benefit of each owner thereof.

7 ARTICLE I DEFINITIONS 1. "Act" means the Colorado Common Interest Ownership Act, C.R.S , et al., as amended. 2. "Additional Annexable Property" means that property which may be annexed to this Declaration as provided in Article XI, Section 5 hereof, and which is more fully described on Exhibit E attached hereto and incorporated herein by this reference. Those Lots in the Additional Annexable Property which are annexed to this Declaration will not have any right to use the amenity area which is anticipated to be annexed to this Declaration and which is anticipated to be included within the Annexable Property. Therefore, the Lots in the Additional Annexable Property will not be obligated to pay to the Association any assessments or charges which are related to use, maintenance, repair, replacement or insurance of such amenity area or the Improvements which may hereafter be located thereon. 3. "Agencies" means the Government National Mortgage Association (GNMA), the Federal Home Loan Mortgage Corporation (FHLMC), the Department of Housing and Urban Development (HUD), the Veterans Administration (VA) or any other governmental or quasigovernmental agency or any other public, quasi-public or private entity which performs (or may in the future perform) functions similar to those currently performed by any of such entities. 4. "Allocated Interests" means the Common Expense Liability and votes in the Association allocated to each Lot. The Allocated Interest of each Lot shall be equal to a fraction, the numerator of which is 1 and the denominator of which is the total number of Lots within the Common Interest Community from time to time. 5. "Annexable Property" means that property which may be annexed to this Declaration as provided in Article XI, Section 5 hereof, and which is more fully described on Exhibit D attached hereto and incorporated herein by this reference. Those Lots in the Annexable Property which are annexed to this Declaration shall each have a right to use the amenity area which is anticipated to be annexed to this Declaration and which is anticipated to be included within the Annexable Property. Therefore, the Lots in the Annexable Property will be obligated to pay to the Association assessments and charges which are related to use, maintenance, repair, replacement and insurance of such amenity area and the Improvements which may hereafter be located thereon. Notwithstanding anything to the contrary, however, references to an "amenity area" in this Declaration do not indicate that the Declarant has taken on any responsibility or obligation to construct, install or erect any such amenity area. Rather, references to an "amenity area" are only anticipatory in nature, and represent nothing more than possibilities or plans by the 2

8 Declarant to create such an area in the Annexable Property and to thereafter include such amenity area in the Community. 6. "Association" means CPN II Owners Association, Inc., a unit owners' association organized under section of the Act. 7. "Castle Pines North Associations" means any of the associations or homeowners associations which govern any portion of any filings within Castle Pines North, Douglas County, Colorado. 8. "Common Elements" means any real estate owned or leased by the Association other than a Lot. The Common Elements is planned to include an amenity area which, if included, is planned to be located within the Annexable Property. The Common Elements initially owned by the Association upon recording of this Declaration are described on Exhibit B attached hereto and incorporated herein by this reference. 9. "Common Expense Liability" means the liability for Common Expenses allocated to each Lot based on its Allocated interest. 10. "Common Expenses" means expenditures made or liabilities incurred by or on behalf of the Association, together with any allocations to reserves. 11. "Community" means real estate described in this Declaration, as supplemented and amended from time to time, with respect to which a Person, by virtue of such Person's ownership of a Lot, is obligated to pay for real estate taxes, insurance premiums, maintenance, or improvement of other real estate described in this Declaration. The Community is a planned community under the Act. 12. "Declarant" means Village Homes of Colorado, Inc., a Colorado corporation, and any other Person or group of Persons acting in concert, to whom Declarant, by recorded document, expressly assigns one or more of the Declarant's rights under this Declaration (which shall be the extent of the Declarant's rights to which such assignee succeeds), and who: (a) As part of a common promotional plan, offers to dispose of to a purchaser such Declarant's interest in a Lot not previously disposed of to a purchaser; or Right. (b) Reserves or succeeds by assignment to any Special Declarant 13. "Declaration" means this Master Declaration of Covenants, Conditions and Restrictions and any other recorded instruments, however denominated, that create this community, including any 3

9 amendments to those instruments and also including, but not limited to, plats and maps. 14. "Delegate" means the natural person selected by members within a Delegate District to represent such Delegate District and to cast votes on behalf of Members of such Delegate District. The Delegates so selected constitute the "Members" of the Association as that term is used in the Colorado Nonprofit Corporation Act, notwithstanding the fact that, in the Bylaws and this Declaration, the Owners are referred to and designated as Members. 15. "Delegate District" means a geographical area which may constitute any portion or portions of the Community and from which all Members in the Delegate District shall elect a single Delegate to represent their collective voting power. 16. "Design Guidelines" means those guidelines and rules adopted, amended, repealed, or reenacted, from time to time, by the Design Review Committee, as more fully provided in Article V of this Declaration. 17. "Design Review Committee" means the committee appointed by the Declarant or by the Executive Board to review and approve or disapprove plans for Improvements, as more fully provided in this Declaration. 18. "Development Rights" means any right or combination of rights reserved by a Declarant in this Declaration to: (a) Add real estate to the Community; (b) Create Lots or Common Elements in the Community; (c) Subdivide Lots; or (d) Withdraw real estate from this community. 19. "Executive Board" or "Board" means the body, regardless of name, designated in this Declaration and the Bylaws of the Association to act on behalf of the Association. 20. "Improvements" means all exterior improvements, structures, and any appurtenances thereto or components thereof of every type or kind, and all landscaping features, including, but not limited to, buildings, outbuildings, swimming pools, tennis courts, patios, patio covers, awnings, solar collectors, painting or other finish materials on any visible structure, additions, walkways, sprinkler systems, utilities lines and appurtenances, garages, carports, driveways, fences, screening walls, retaining walls, stairs, decks, landscaping, hedges, windbreaks, plantings, trees, shrubs, flowers, vegetables, sod, gravel, bark, exterior 4

10 light fixtures, poles, signs, exterior tanks, and exterior air conditioning, cooling, heating and water softening equipment. 21. "Lot" means any separate numbered lot or plot of land shown upon any recorded subdivision map of the Community, or any portion thereof, and on which has been or is planned to be constructed an attached or detached single residential dwelling unit, with the exception of the Common Elements, any property owned by a Subassociation, and any publicly-dedicated property. 22. "Lots that May Be Included" means one thousand eight hundred eighty (1,880) Lots, which shall be the maximum number of Lots that may be subject to this Declaration, including the Lots within the real estate described on the attached Exhibit A and those Lots which may be added if all of the property provided for in Article XI, Section 5 hereof, is annexed to this Declaration. 23. "Member" means each Owner; membership in the Association shall be appurtenant to, and may not be separated from, ownership of a Lot. 24. "Owner" means the Declarant or other Person who owns a Lot, but does not include a Person having an interest in a Lot solely as security for an obligation. The Declarant is the Owner of any Lot created by the Declaration until that Lot is conveyed to another Person who may or may not be a Declarant under this Article. 25. "Period of Declarant Control" means a length of time expiring twenty (20) years after initial recording of this Declaration in Douglas County, Colorado; provided, that the Period of Declarant Control shall terminate no later than either sixty (60) days after conveyance of seventy-five percent (75%) of the Lots that May Be Included to owners other than a Declarant, two (2) years after the last conveyance of a Lot by the Declarant in the ordinary course of business, or two (2) years after any right to add new Lots to the Declaration was last exercised. 26. "Person" means a natural person, a corporation, a partnership, an association, a limited liability company, a trust, or any other entity or any combination thereof. 27. "Security Interest" means an interest in real estate or personal property created by contract or conveyance which secures payment or performance of any obligation. The term includes a lien created by a mortgage, deed of trust, trust deed, security deed, contract for deed, land sales contract, lease intended as security, assignment of lease or rents intended as security, pledge of an ownership interest in the Association, and any other consensual lien or title retention contract intended as security for an obligation. For purposes of Article IV, Section 11 hereof and, with respect to notice of cancellation or substantial modification 5

11 of certain insurance policies, to Article VI, Section 2 hereof, "Security Interest" shall also mean and refer to any executory land sales contract wherein the Administrator of Veterans Affairs, an Officer of the United States of America, is the seller, whether such contract is recorded or not, and whether such contract is owned by the said Administrator or has been assigned by the Administrator and is owned by the Administrator's assignee, or a remote assignee, and the land records in the office of the Clerk and Recorder of Douglas County, Colorado, show the Administrator as having the record title to the Lot. 28. "Security Interest Holder" means any Person named as a mortgagee or beneficiary, or in a similar capacity, under any Security Interest (including, for purposes of Article IV, section 11 hereof and, with respect to notice of cancellation or substantial modification of certain insurance policies, to Article VI, Section 2 hereof, the Administrator of Veterans Affairs, an Officer of the United States of America, and his assigns under any executory land sales contract wherein the said Administrator is identified as the seller, whether such contract is recorded or not and the land records of the Clerk and Recorder of Douglas County, Colorado, show the said Administrator as having the record title to the Lot), or any successor to the interest of any such Person under such Security Interest. 29. "Special Declarant Rights" means rights reserved for the benefit of a Declarant to perform or cause to be performed the following acts: To complete Improvements indicated on plats and maps filed with the Declaration or required by Douglas County, or by other governmental or quasi-governmental agencies or entities, in conjunction with a plat(s) or map(s); to exercise any Development Right; to maintain sales offices, construction offices, management offices, signs advertising the Community, and models; to use easements through the Common Elements for the purpose of making Improvements within the Community or within real estate which may be added to the Community; to merge or consolidate a common interest community of the same form of ownership, including without limitation merger or consolidation of the Association with any of the Castle Pines North Associations; or to appoint or remove any officer of the Association or any Executive Board member during any Period of Declarant Control. All of the Special Declarant Rights may be exercised by the Declarant with respect to any portion of the property now or hereafter within the Community. Declarant may exercise any or all of these Special Declarant Rights at any time and from time to time. Such rights shall terminate automatically on the earlier of the following events: (a) conveyance of the last Lot by Declarant to an owner other than Declarant; (b) twenty (20) years from the date of recordation of this Declaration; however, the appointment of officers and directors may only be exercised in accordance with Article III hereof. 6

12 30. "Subassociation" means any Colorado corporation and its successors and assigns, which is established or authorized pursuant to, or in connection with, one or more Supplemental Declarations, the membership of which is composed of Owners of Lots within the area that is covered by the Supplemental Declaration. 31. "Supplemental Declaration" means a written, recorded instrument that contains covenants, conditions, restrictions, reservations, easements, or equitable servitudes, or any combination thereof, which affects any portion of the Community. ARTICLE II ASSOCIATION MEMBERSHIP AND VOTING RIGHTS 1. Association. The Association has been or will be formed as a Colorado corporation under the Colorado Nonprofit Corporation Act. The Association shall have the duties, powers and rights set forth in this Declaration and in its Articles of Incorporation and Bylaws. As more specifically set forth hereinafter, the Association shall have an Executive Board to manage its affairs; the Executive Board shall be elected by Delegates representing Delegate Districts within the Community; and Delegates shall be elected by owners within each Delegate District, acting in their capacity as Members of the Association. 2. Executive Board. The affairs of the Association shall be managed by an Executive Board. The number, term and qualifications of the Executive Board shall be fixed in the Association Articles of Incorporation and Bylaws. The Executive Board may, by resolution, delegate portions of its authority to an executive committee or to other committees, to officers of the Association or to agents and employees of the Association, but such delegation of authority shall not relieve the Executive Board of the ultimate responsibility for management of the affairs of the Association. Action by or on behalf of the Association may be taken by the Executive Board or any duly authorized executive committee, officer, agent or employee without a vote of Members, except as otherwise specifically provided in this Declaration. 3. Membership in Association. Each Owner of a Lot within the community shall be a Member of the Association. There shall be one membership in the Association for each Lot. The Person(s) who constitute the owner of a Lot shall automatically be the holder of the membership appurtenant to that Lot, and the membership appurtenant thereto shall automatically pass with fee simple title to the Lot. Declarant shall hold a membership in the Association for each Lot owned by Declarant. 7

13 4. Establishment of Delegate Districts Initial Delegate District. (a) The Community shall be divided into Delegate Districts, as hereinafter described, and each Delegate District shall elect one (1) Delegate to the Association to exercise the voting power of all the Members in such Delegate District. If a Subassociation is created by the recordation of a Supplemental Declaration, then all of the Annexed Property within the jurisdiction of the Subassociation shall constitute one Delegate District. The Delegate District(s) for property that is not subject to a Supplemental Declaration shall be designated in the Annexation of Additional Land and Declaration Amendment for such property, as provided for in Article XI, Section 5 hereof, or by another instrument(s) signed by Declarant. Such Supplemental Declarations, Annexations of Additional Land, or other instruments, shall contain legal descriptions of the portions of the annexed property which shall be or become part of a Delegate District and a statement that such real property described therein shall be or become part of a designated Delegate District for purposes of this Declaration. (b) Each of the Lots included within the property described on the attached Exhibit A shall be within Delegate District No. 1, which shall constitute the initial Delegate District under this Declaration. 5. Voting Rights of Members. Each Member shall have the right to cast one vote for each Lot which he/she or it owns within the Delegate District. Each Member shall have the right to cast one vote for the election of the Delegate to the Association to exercise the voting power of the Delegate District in which the Member's Lot is located. 6. Voting Rights of Delegates. Each Delegate may cast one (1) vote for each Lot which is subject to this community Declaration and located in the Delegate District represented by such Delegate. Each Delegate shall cast the votes which he/she represents in such manner as he/she may, in his/her, sole discretion, deem appropriate, acting on behalf of all the Members owning Lots in his/her Delegate District; provided, however, that in the event that at least a majority in interest of the Members in any Delegate District shall determine at any duly constituted meeting of the Members in such Delegate District to instruct their Delegate as to the manner in which he/she is to vote on any issue to be voted on by the Delegates, then the Delegate representing such Delegate District shall cast all of the voting power in such Delegate District in the same proportion, as nearly as possible without counting fractional votes, as the Members in such Delegate District shall have cast their voting power "for" and "against" such issue. A Delegate shall have the authority, in his/her sole discretion, to call a special meeting of the Members in his/her 8

14 Delegate District, in the manner provided in the Bylaws of the Association, for the purpose of obtaining instructions as to the manner in which he/she is to vote on any issue to be voted on by the Delegates. When a Delegate is voting in his/her own discretion, without instruction from the Members whom he/she represents, then such Delegate may cast all of the votes which he/she represents as a unit or such Delegate may apportion some of such votes in favor of a given proposition and/or in opposition to such proposition and/or in abstention. It will be conclusively presumed for all purposes of Association business that any Delegate casting votes on behalf of the Members in his/her Delegate District will have acted with the authority and consent of all such Members. All agreements and determinations lawfully made by the Association in accordance with the voting procedures established herein, and in the Bylaws of the Association, shall be deemed to be binding on all Members, their successors and assigns. 7. Merger or Consolidation with any of the Castle Pines North Associations. The Declarant reserves, as a Special Declarant Right, the right to merge or consolidate the Association with any of the Castle Pines North Associations, without the consent or approval of any other Owners, any Security Interest Holders, or any other Persons. Upon the occurrence of such merger or consolidation, if at all, the Declarant or the Association shall notify the Owners thereof. ARTICLE III EXECUTIVE BOARD MEMBERS AND OFFICERS 1. Authority of Executive Board. Except as provided in this Declaration, the Bylaws or any other provisions of this Declaration, the Executive Board may act in all instances on behalf of the Association. 2. Election of Part of Executive Board During Period of Declarant Control. No later than sixty (60) days after conveyance of twenty-five percent (25%) of the Lots that May Be Included to owners other than a Declarant, at least one (1) member and not less than twenty-five percent (25%) of the members of the Executive Board must be elected by the Delegates casting votes of Lots not owned by the Declarant. Not later than sixty (60) days after conveyance of fifty percent (50%) of the Lots that May Be Included to Owners other than a Declarant, not less than thirty-three and one-third percent (33 1/3%) of the members of the Executive Board must be elected by the Delegates casting votes of Lots not owned by the Declarant. 3. Authority of Declarant Termination of Period of Declarant Control. Except as otherwise provided in this Article III, during the Period of Declarant Control, the Declarant or Persons appointed by the Declarant may appoint all officers and directors and remove all officers and directors of the Executive 9

15 Board appointed by it. Not later than the termination of any Period of Declarant Control, the Delegates shall elect an Executive Board of at least three members, at least a majority of whom must be owners other than the Declarant or designated representatives of Owners other than the Declarant. The Executive Board shall elect the officers. The Executive Board members and officers shall take office upon election. 4. Delivery of Documents by Declarant. If and to the extent required by the Act, after the Delegates casting votes of Lots not owned by the Declarant elect a majority of the members of the Executive Board, the Declarant shall deliver to the Association all property of the Owners and of the Association held by or controlled by the Declarant. 5. Budget. Within thirty (30) days after adoption of any proposed budget for the Community, the Executive Board shall mail, by ordinary first-class mail, or otherwise deliver a summary of the budget to all the Delegates and shall set a date for a meeting of the Delegates to consider ratification of the budget not less than fourteen (14) nor more than sixty (60) days after mailing or other delivery of the summary. Unless at that meeting the vote of sixty-seven percent (67%) of the Allocated Interests rejects the budget, the budget is ratified, whether or not a quorum is present. In the event that the proposed budget is rejected, the periodic budget last ratified by the Delegates must be continued until such time as the Delegates ratify a subsequent budget proposed by the Executive Board. 6. Association Books and Records. The Association shall make available to owners, prospective purchasers, Security Interest Holders, and insurors or guarantors of any such Security Interest, current copies of this Declaration, and the Articles of Incorporation, Bylaws, rules and regulations, books, records and financial statements of the Association. "Available" shall mean available for inspection, upon request, during normal weekday business hours or under other reasonable circumstances. ARTICLE IV COVENANT FOR MAINTENANCE ASSESSMENTS 1. Personal Obligation for Assessments. Each owner, including Declarant, by acceptance of a deed therefor, whether or not it shall be so expressed in such deed, is liable for assessments made against such Owner's Lot during the period of ownership of such Lot and shall be personally obligated to pay to the Association: annual assessments or charges, special assessments, and other charges, fines, fees, interest, late charges, and other amounts, all as provided in this Declaration, with such assessments and other amounts to be established and collected as hereinafter provided. The obligation for such payments by each owner to the Association is an independent 10

16 covenant with all amounts due, from time to time, payable in full when due without notice or demand (except as otherwise expressly provided in this Declaration), and without set-off or deduction. All Owners of each Lot shall be jointly and severally liable to the Association for the payment of all assessments, fees, charges and other amounts attributable to their Lot. Each assessment, together with interest, late charges, costs, and reasonable attorney's fees, shall also be the personal obligation of the Person who was the Owner of such Lot at the time when the assessment became due. The personal obligation for delinquent assessments shall not pass to such owner's successors in title unless expressly assumed by them. The Association's lien on a Lot for assessment shall be superior to any homestead exemption now or hereafter provided by the laws of the State of Colorado or any exemption now or hereafter provided by the laws of the United States. The acceptance of a deed to land subject to this Declaration shall constitute a waiver of the homestead and any other exemption as against said assessment lien. 2. Purpose of Assessments. The assessments levied by the Association, including without limitation both annual assessments and special assessments, shall be used exclusively to promote the recreation, health, safety and welfare of the residents of the Lots, to pay the Common Expenses, and for all of those purposes and activities which may be required of the Association or which the Association may be empowered to pursue pursuant to this Declaration or the Articles of Incorporation or Bylaws of the Association, or by law. However, such assessments levied during the Period of Declarant Control may not be used for the purpose of constructing capital Improvements. 3. Initial Annual Assessment. Until the effective date of an Association budget ratified by the owners with a different amount for the annual assessments, as provided in Section 5 of Article III, above, the amount of the maximum annual assessment against each Lot shall not exceed Six Hundred and No/100 Dollars ($600.00) per Lot per annum. However, until ratification of an Association budget, as provided above, or until commencement of the calendar year during which an amenity area is planned by the Declarant to be both completed in the Annexable Property and annexed to this Declaration, whichever occurs first, the amount of the actual annual assessment shall be Eighty-Two and No/100 Dollars ($82.00) per Lot per annum. 4. Rate of Assessment. Annual and special assessments shall be sufficient to meet the expected needs of the Association and shall be apportioned among the Lots in accordance with their Allocated Interests; provided, however, that any of the Lots which were part of the Additional Annexable Property prior to their inclusion in the Community shall not pay any assessments or reserves, or any other amounts, which are applicable to any amenity area that was (either before or after construction) part of the Annexable Property prior to the inclusion of such amenity area in 11

17 the Community. That is, assessments and reserves applicable to any such amenity area shall be charged only against those Lots, and the Owners thereof, which have a right to use such amenity area and not against any of the -Lots, and the owners thereof, which do not have a right to use such amenity area. The annual assessments shall include an adequate reserve fund for the maintenance, repair and replacement of those items that must be maintained, repaired or replaced on a periodic basis, and for the payment of insurance deductibles. All assessments shall be assessed against all the Lots in accordance with the Allocated Interests set forth in this Declaration. If the Common Expense Liability is reallocated, annual assessments and any installment thereof not yet due shall be recalculated in accordance with the reallocated Common Expense Liability. 5. Date of Commencement of Annual Assessments. Until the Association makes an annual assessment, the Declarant shall pay all Common Expenses. After any annual assessment has been made by the Association, annual assessments shall be based on a budget adopted by the Association as provided in this Declaration, which shall be done no less frequently than annually. The annual assessments shall be due and payable in semi-annual installments, in advance, or on such other dates, and with such frequency (which may be other than semi-annually, but not less frequently than annually), as the Executive Board determines in its discretion from time to time, provided that the first annual assessment shall be adjusted to reflect the time remaining in the first Association fiscal year. Any Owner purchasing a Lot between annual assessment due dates shall pay a pro rata share of the last payment due. 6. Special Assessments. In addition to the annual assessments authorized in this Article, the Executive Board of the Association may at any time levy, in any fiscal year, a special assessment applicable to that year only, for the purpose of defraying in whole or in part the cost of any construction, reconstruction, repair or replacement of a capital improvement upon any portion of real property for which the Association has repair and/or reconstruction obligations, including fixtures and personal property related thereto, or for repair or reconstruction of any damaged or destroyed Improvements located on said real property, or for the funding of any operating deficit incurred by the Association. Any such special assessment shall be set against each Lot in accordance with the Allocated Interests set forth in this Declaration. Notwithstanding the foregoing, special assessments levied during the Period f Declarant Control may not be used for the purpose of constructing capital Improvements. 7. Lien for Assessments. (a) The Association, if the Association is incorporated, has a statutory lien on a Lot for any assessment levied against that Lot or fines imposed against its Owner. Fees, charges, late 12

18 charges, attorney fees, fines and interest charged pursuant to this Declaration are enforceable as assessments under this Article. The amount of the lien shall include all those items set forth in this section from the time such items become due. If an assessment is payable in installments, each installment is a lien from the time it becomes due, including the due date set by any valid Association acceleration of installment obligations (b) Recording of the Declaration constitutes record notice and perfection of the lien. No further recordation of any claim of lien for assessments under this Article is required. If a lien is filed, the costs and expenses thereof shall be added to the assessments for the Lot against which it is filed and collected as part and parcel. thereof. The Association's lien may be foreclosed in like manner as a mortgage on real estate. (c) A lien for unpaid assessments is extinguished unless proceedings to enforce the lien are instituted within six (6) years after the full amount of assessments becomes due. (d) Unless the Declaration otherwise provides, if two (2) or more associations have liens for assessments created at any time on the same property, those liens have equal priority. 8. Priority of Association Lien Lot except: (a) A lien under this Article IV is prior to all other liens and encumbrances on a Declaration; (1) Liens and encumbrances recorded before the recordation of the (2) A Security Interest on the Lot which has priority over all other Security Interests on the Lot and which was recorded before the date on which the assessment sought to be enforced became delinquent; and (3) Liens for real estate taxes and other governmental assessments or charges.against the Lot. (b) A lien under this section is also prior to the Security Interests described in the preceding subsection (a) (2) to the extent of an amount equal to the Common Expense assessments based on a periodic budget adopted by the Association as provided in this Declaration, which would have become due, in the absence of any acceleration, during the six (6) months immediately preceding institution by either the Association or any party holding a lien senior to any part of the Association lien created under this Section of an action or a non-judicial foreclosure either to enforce or extinguish the lien. 13

19 (c) This Section does not affect the priority of mechanics' or materialmen's liens or the priority of liens for other assessments made by the Association. A lien under this Article is not subject to the provisions of part 2 of Article 41 of Title 38, C.R.S., as amended, or to the provisions of Section , C.R.S. 1973, as amended. 9. Assessments /Charges for Services to Separate Areas of Community. The Association may, at any time from time to time, provide services to any Subassociation or other area(s) of the Community. Any such services shall be provided, if at all, pursuant to an agreement in writing between the Association and such Subassociation or the owners of the Lots for which such service is to be provided, with such agreement to include a statement of the costs, fees and expenses reasonably expected to be incurred by the Association in providing such services, including overhead expenses of the Association. Notwithstanding the foregoing, the owners of the tots which have a right to use any amenity area that was (either before or after construction) part of the Annexable Property prior to the inclusion of such amenity area in the community, shall be charged their share of the assessments, reserves and other charges incurred by the Association in maintenance, repair, reconstruction, insurance, and all other matters pertaining to such amenity area, and the Owners of Lots which do not have a right to use such amenity area shall not be required to pay, or be assessed for, any of such assessments, reserves or other charges. In addition to the amenity area, services which may be provided by the Association pursuant to this Section include, without limitation, (a) the construction, care, operation, management, maintenance, repair, replacement and renovation of Improvements or property owned by such Subassociation or Owner(s); (b)the provision of any services or functions to such area or Subassociation, such as trash removal; (c) the enforcement of the provisions of any Supplemental Declaration or any other document or agreement for, on behalf of, and in the name of the Subassociation or applicable owners; (d) the collection of assessments for, in the name of, and on behalf of any Subassociation; (e) the payment of taxes or other amounts for a Subassociation or owners with funds provided by such Subassociation or Owners; (f) the procurement of insurance for a Subassociation or Owners; (g) the collection of charges for use of facilities of a Subassociation; and (h) the appointment and supervision of a manager(s) for a Subassociation or area. The Association may, at its election, at any time from time to time, collect the aforesaid costs, fees, expenses and other charges in advance or arrears, in monthly or other installments, or in addition to, and on the same date for payment of, the assessments. 10. Receiver. In any action by an Association to collect assessments or to foreclose a lien for unpaid assessments, the court may appoint a receiver of the owner to collect all sums alleged to be due from the owner prior to or during the pending of 14

20 the action. The court may order the receiver to pay any sums held by the receiver to the Association during the pending of the action to the extent of the Association's assessments. 11. Certificate of Status of Assessments. The Association shall furnish to an owner or such owner's designee or to a holder of a Security Interest or its designee upon written request delivered personally or by certified mail, first class postage prepaid, return receipt, to the Association's registered agent, a written statement setting forth the amount of unpaid assessments currently levied against such Owner's Lot. The statement shall be furnished within fourteen (14) calendar days after receipt of the request and is binding on the Association, the Executive Board, and every Owner. If no statement is furnished to the owner or holder of a security Interest or their designee, delivered personally or by certified mail, first class postage prepaid, return receipt requested, to the inquiring party, then the Association shall have no right to assert a lien upon the Lot for unpaid assessments which were due as of the date of the request. The Association shall have the right to charge a reasonable fee for the issuance of such certificates. 12. Effect of Non-Payment of Assessments Remedies of the Association. Any assessment not paid within ten (10) days after the due date thereof may bear interest from the due date at the rate of twenty-one percent (21%) per annum, or at such lesser rate as may be set from time to time by the Executive Board, and the Executive Board may assess thereon a late charge in such amount as may be set by the Executive Board from time to time. The Association may bring an action at law against the owner personally obligated to pay the same, or foreclose the lien against such Owner's Lot. If a judgment or decree is obtained, including, without limitation, in a foreclosure action, such judgment or decree shall include a reasonable attorney's fee to be fixed by the court, together with the costs of the action, and may include interest and late charges, as above provided. No Owner may be exempt from liability for payment of any assessment by waiver of the use or enjoyment of any of the Common Elements or by abandonment of the Lot against which the assessments are made. This Article does not prohibit actions or suits to recover sums for which this Declaration creates a lien or to prohibit the Association from taking a deed in lieu of foreclosure. 13. Surplus Funds. Any surplus funds of the Association, including, but not limited to, working capital fund remaining after payment of or provision for Common Expenses and any prepayment of or provision for reserves, shall be retained by the Association as reserves and need not be credited to the owners in proportion to their Common Expense Liability or credited to them to reduce their future assessments. 15

21 14. Working Capital Fund. The Association or Declarant shall require the first Owner of any Lot who purchases that Lot from Declarant to make a non-refundable contribution to the Association in an amount equal to one-sixth (1/6) of the then-current actual Association annual assessment (regardless of whether or not annual assessments have commenced as provided in Section 5 of this Article). Said contribution shall be collected and transferred to the Association at the time of closing of the sale by Declarant of each Lot and shall, until use, be maintained in a segregated account with other such working capital funds for the use and benefit of the Association, including, without limitation, to meet unforeseen expenditures or to purchase additional equipment, property or services. Such contribution to the working capital fund shall not relieve an owner from making regular payments of assessments as the same become due. Upon the transfer of his Lot, an owner shall not be entitled to a reimbursement by the Association of any portion of such owner's payment to the working capital fund. 15. Assessments for Misconduct. If any Common Expense is caused by the misconduct of any owner, the Association may assess that Common Expense exclusively against such Owner and his Lot. ARTICLE V DESIGN REVIEW COMMITTEE 1. Membership. There is hereby established a Design Review Committee which shall be responsible for the establishment and administration of Design Guidelines to carry out the purposes and intent of this Declaration, and for other purposes as provided in this Article. The Committee shall be composed of five persons, who need not be Members. All of the members of the Committee shall be appointed, removed, and replaced by the Declarant in its sole discretion, until expiration, termination or relinquishment of the Period of Declarant Control, at which time the Executive Board shall succeed to the Declarant's right to appoint, remove and replace the members of the Committee. 2. Purposes. The Committee shall review, study and either approve or reject proposed Improvements, all in compliance with this Declaration and as further set forth in the rules and regulations of the Committee and the Design Guidelines as may be adopted and established from time to time by the Committee. (a) The Committee shall exercise its best judgment to see that all Improvements conform and harmonize with any existing structures as to external design, quality and type of construction, materials, color, location on the building site, height, grade and finished ground elevation, and all aesthetic considerations herein set forth. 16

22 (b) No building, fence, wall or other structure shall be commenced, erected or altered until the plans and specifications showing the nature, kind, shape, height, materials, and location of the same shall have been submitted to and approved in writing by the committee; provided, however, that Improvements and alterations which are completely within a building (and not visible outside the building) may be undertaken without such approval. In the event the Committee fails to approve or disapprove such design and location within 30 days after the plans and specification have been submitted to it, approval will not be required and Section 2 of this Article will be deemed to have been fully complied with. (c) The actions of the Committee in the exercise of its discretion by its approval or disapproval of plans and other information submitted to it, or with respect to any other matter before it, shall be conclusive and binding on all Persons. 3. Organization and Operation of Committee. (a) Term. The term of office of each member of the Committee, subject to Section 1 of this Article, shall be one year, commencing January 1 of each year, and continuing until his successor shall have been appointed. Should a Committee member die, retire, become incapacitated, or in the event of a temporary absence of a member, a successor may be appointed as provided in Section 1 of this Article. (b) Chairman. So long as the Declarant appoints the Committee, the Declarant shall appoint the chairman. At such time as the Committee is appointed by the Executive Board, the chairman shall be elected annually from among the members of the Committee by a majority vote of said members. (c) Operations. The chairman shall take charge of and conduct all meetings and shall provide for reasonable notice to each member of the Committee prior to any meeting. Such notice shall set forth the time and place of said meeting, which notice may be waived by any member. In the absence of a chairman, the parties appointing or electing the chairman may appoint or elect a successor, or if the absence is temporary, a temporary successor. (d) Voting. The affirmative vote of a majority of the members of the Committee shall govern its actions and be the act of the Committee. A quorum shall consist of a majority of the members of the Committee. (e) Expert Consultation. The Committee may avail itself of technical and professional advice and consultants, as it deems appropriate. 4. Expenses. Except as hereinafter provided, all expenses of the Committee shall be paid by the Association. The Committee 17