MARCH USE FOR YOUR ON-LINE GUEST REGISTRATION.

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1 MARCH COMMUNITY UPDATES FROM THE GENERAL MANAGER Rule Adopted for Residential Use Enforcement Policy Enclosed with this month s statement is the newly adopted Residential Use Enforcement Policy. The Policy was adopted by the Board at the February 8, 2017 general session meeting and will be effective March 1, The Association s Master CC&R s, in addition to many of the Supplemental CC&R s for each annexed development phase, prohibit vacation and short term rental of properties because the properties may be used for only residential purposes, not vacation or hotel purposes. Please place any questions in writing to the Board in care of Keystone Pacific at Tomas, Suite 160, RSM. Please keep the enclosed Policy with your other Association records. The CC&R s Provide Authority for Architectural Guidelines The one Committee that the CC&R s establishes and grants authority to is the Architectural Committee. Per Article 9.03 the Committee considers and acts upon any and all plans and specifications submitted for its approval. The Committee also has the right to inspect construction in progress to assure its conformance with the plans approved by the Committee. Further the Committee may require details and specifications for its review as it deems proper, such as floor plans, site plans, drainage plans, landscaping plans, Oak tree preservation plans, elevation drawings, and description or samples of exterior material and colors. The Committee has 45 days to respond after receipt of all materials required by the Committee. Please plan ahead for your projects as the Committee is made up of volunteers that meet twice a month and if you want your project to start on time, you should consider having complete plans to the Committee allowing them ample time to review such so your project may proceed in a timely manner. Please also keep in mind that an integral part of the architectural process is the Notice of Completion (NOC). Why do you ask is it important? It provides assurance that what was approved by the Committee is what was undertaken by the applicant. An approved submittal to paint a home saddle brown and then to paint it agua green, will result in a denied NOC and require you to repaint the home at your cost. Therefore if you receive approval for a set of submitted plans and then construct an item not on your plans or you intentionally build something different that you know to be a violation of the architectural guidelines, or do not submit at all for approval thinking that it is better to ask for forgiveness than ask for permission, please think again. The protection of property values is a serious matter and architectural violations are addressed by the Board. Please call the management office to check if you are unsure about what would require approval or the process for obtaining approval for a change being considering once approved construction work is underway. Association Annual Meeting Board Members Elected The Annual Meeting to elect Directors to the CZ Master Board is scheduled for Wednesday, June 14, This year there are 3 Director seats up for election. Enclosed with this statement is an Application for Candidacy for the Board of Directors if you wish to serve. To serve as a Board Member, you must be on title to property within CZ Master. The Board meets twice a month in the evening, once in an open session to review maintenance/service bids and homeowner requests (General Session Board meeting) and once in a closed session to review contract formation, legal matters, delinquency actions, and hearing/fine matters (Executive Session meeting). An understanding of the governing documents, rules and regulations, and the architectural guidelines happens to be an important aspect of serving on the Board as well as being reasonable, altruistic in your desire to serve, and not serving for only personal gain. February 8, 2017 General Session Approved January 11th General Session Meeting minutes Accepted the December 2016 Financial Statements Approved to lien 17 homeowner accounts that are in arrears Approved Steve Schonwit, Schonwit & Associates, as Inspector of Election Approved to adopt Residential Use Enforcement Policy Approved Fence Pros bid to repair & paint wrought iron fencing in 5 locations Accepted Accutech bid specification package for 2017 Street Repair & Maintenance project The Keystone Pacific office serving CZ Master in RSM is open 9am to 5pm Monday Friday. For after hour property emergency matters please call for a service line; Call for life threatening emergencies CZ Master Association BOARD OF DIRECTORS: President: Vice President: Secretary: Treasurer : Member-at Large Robert Curran Xochitl Yocham Beverly Sirjani Phil Mitchell Eric Munk NEXT BOARD MEETING: Wednesday, March 8, 2017 Bell Tower, Paseo Room El Paseo Rancho Santa Margarita, CA CONTACT INFORMATION: GENERAL MANAGER: Vincentia Davis Phone: vdavis@keystonepacific.com COMMON AREA MAINTENANCE: Community Manager: Tina Rosenbaum Phone: trosenbaum@keystonepacific.com LANDSCAPE: Landscape Coordinator: Tracy Williams Phone: twilliams@keystonepacific.com ARCHITECTURAL: Arch. Coordinator:Samantha Winterburn Phone: ac@keystonepacific.com COMMUNITY STANDARDS: Compliance: Christine Clancy Phone: cclancy@keystonepacific.com SPORTS PARK RESERVATIONS: Associate: Sandra Hidalgo Phone: shidalgo@keystonepacific.com CZ MASTER OFFICE HOURS: 9am to 5pm Monday thru Friday CZ Master Office: Fax: Emergency After Hours: INSURANCE BROKER: United Agencies Phone: CALL CENTER: PATROL OFFICE: TRANSPONDER OFFICE: USE FOR YOUR ON-LINE GUEST REGISTRATION.

2 February 15, 2017 To: From: Subject: Members of the CZ Master Association CZ Master Board of Directors Notice of Board s Adoption of New Rule Regarding Residential Use Enforcement Policy Please take notice that at the meeting of the Board of Directors on February 8, 2017 the Board adopted a new rule providing a Policy for Residential Use Enforcement that will be in effect as of March 1, The policy clarifies the residential use restriction in the Master CC&Rs and provides for the enforcement against violations of such residential use restrictions. Purpose of the Rule Change. The purpose and effect of the Policy/rule changes are generally described as follows: (i) to explain and clarify the restrictions contained in the Association s Master CC&Rs limiting use of the residences to single family residential uses and that no short-term leasing of the residences inconsistent with such residential use limitation is permitted, (ii) to provide requirements for any owner who leases his/her property to notify the Association and provide contact information for the tenant(s), (iii) to provide enforcement procedures for violations, and (v) to provide a fine schedule for violations. Text of Adopted Policy. The text of the Residential Use Enforcement Policy is enclosed herewith. Keep The Enclosed Copy of the Adopted Policy With Your Other Association Records. You will be able to download a copy from the Association s website under Documents & Forms. Conclusion If you have any questions, please feel free to contact the undersigned at Sincerely, At the Direction of the CZ Master Association Board of Directors Vincentia Davis Vincentia Davis, CCAM, PCAM General Manager Tomas, Suite 160, Rancho Santa Margarita, CA Fax

3 CZ MASTER ASSOCIATION RESIDENTIAL USE ENFORCEMENT POLICY (Adopted February 2017) 1. Policy Statement on Enforcement Regarding Preserving Residential Use of Lots and Condominium Units. An objective of this Enforcement Policy is to promote and seek compliance by Members with the Association s governing documents with respect to leasing or renting of the Residential Lots and Condominium Units in the CZ Master Association project. If any Member fails to comply with any of the terms of this Policy, the Association shall be entitled to pursue all available remedies at law and in equity to compel compliance and recover damages. The provisions and enforcement remedies set forth herein apply to the subject matter in this Policy and related restrictions in Association s Master Declaration of Covenants, Conditions, Restrictions and Reservation of Easements, as amended and supplemented (collectively, Declaration ) (as discussed below), notwithstanding any other provisions and procedures set forth in the Association s Rules and Regulations or other policies. To the extent any provision of this Policy is inconsistent with any provisions of the Declaration, the Declaration shall control and the inconsistent provision of this Policy shall be deemed of no effect. Preserving the residential nature of the development is an important interest in the community. Although members are permitted to lease their respective Lots and Condominium Units, please be aware that Article VIII, Section 8.01 of the Declaration provides that the Lots and Condominium Units in the Residential Area... shall be improved and used solely for single-family residential use. (Emphasis added.) Also, Article I, Sections 1.35, 1.51, 1.52, 1.53 of the Declaration express residential use limitation purposes in the definitions of the terms a Lot, Residence, Residential Area, Residential Lot, and Residential Condominium Unit. In addition, many Supplemental Declarations recorded as part of the annexation phases of the development into the community contain an express restriction against short-term leasing of Lots/Condominiums in the community as follows: Page 1 of 3 No Lot or Condominium within the Added Territory shall be leased or rented for a term less than thirty (30) days and no such Lot or Condominium shall be leased, rented or otherwise occupied for hotel accommodations or similar transient purposes. Therefore, engaging in vacation leasing or otherwise leasing of a Lot or Condominium Unit for transient purposes constitutes use of the Lot or Condominium Unit for a hotel-type purpose, rather than for a residential purpose, which violates the residential use restriction in the Declaration. Please note that even if a lease or rental agreement is for a term of 30 days or longer, the occupancy nevertheless shall be a violation of the Declaration if the occupancy is for a non-residential purpose. That is, the residential use restriction in the Declaration is an independent requirement irrespective of whether the term of the lease is for 30 days or more than 30 days. Regarding prohibited hotel and transient uses, the Orange County Municipal Code, Article 6, Section , defines the terms Hotel and Transient as follows: Hotel shall mean any structure, or any portion of any structure, which is occupied

4 or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, roominghouse, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location or other similar structure or portion thereof. Transient shall mean any person who exercises occupancy or is entitled to occupancy by reason of concession, permit, right of access, license or other agreement for a period of thirty (30) consecutive calendar days or less, counting portions of calendar days as full days. In addition, the National Housing Act, 12 U.S.C. Section 1731b(e)(1) (which addresses uses of housing built with the aid of mortgages insured under the National Housing Act) defines the terms transient or hotel purposes as follows: The term rental for transient or hotel purposes shall have such meaning as prescribed by the Secretary but rental for any period of less than thirty days shall in any event constitute rental for such purposes Non-residential Use of Lots or Condominium Units Is Prohibited Under the Declaration. Therefore, each Owner is prohibited from entering into any oral or written agreement to rent, lease, let, or otherwise occupy for any consideration the Owner s Lot or Condominium Unit for any nonresidential purpose, including, without limitation, any time-share, vacation, hotel, or transient purposes, or for a term of less than thirty (30) consecutive days. Such prohibited conduct includes, without limitation, entering into an oral or written agreement to rent, lease, let, or occupy the Lot or Condominium Unit, which on its face or by its terms may provide for an occupancy term of at least thirty (30) consecutive days, but which the Owner knows, or reasonably should know, the renter/lessee/occupant, of the Lot or Condominium Unit actually intends to occupy the Lot or Condominium Unit for a term of less than thirty (30) consecutive days or otherwise for hotel, transient, or other non-residential purposes. The Board may determine, based upon the particular facts and circumstances, whether any use or occupancy of a Lot or Condominium Unit (irrespective of the terms of any oral or written agreement or the length of the term of the occupancy) is a use that violates the purpose of the restrictions in the Declaration requiring Lots and Condominium Units to be used only for residential purposes. Instances where an Owner owns a Lot or Condominium Unit as second home and the Owner periodically occupies the Lot or Condominium Unit for short term periods, or an Owner s use of a house-sitter while temporarily away from the Lot or Condominium Unit are examples (without limitation) of uses that the Board considers to be consistent with residential use of the Lot or Condominium Unit contemplated under the Declaration. 3. Notice to Association of Lease/Rental Agreements. Within seven (7) days after executing, or otherwise entering into, a lease, rental, or other agreement for the lease, rental, occupancy, or use of a Lot or Condominium Unit, the Owner shall provide the Association s managing agent the name of the lessee, renter, occupant, or user of the Lot or Condominium Unit and all other persons occupying the Lot or Condominium Unit, and a copy of the lease, rental, or other agreement evidencing the Owner s permission for such lessee, renter, occupant, family member, guest, or other person, to occupy or use the Lot or Condominium Unit. Page 2 of 3

5 4. Enforcement and Fine Schedule for Violations of This Policy. Any violation of the foregoing provisions is considered an egregious breach of the Declaration and violation of the residential use limitations contemplated under the Declaration. The fine schedule set forth herein shall control for any violations of the Restrictions referenced in this Policy, notwithstanding any other provision of the Restrictions. In developing the fine schedule for violations of the Restrictions referenced in this Policy, the Board considered that an Owner may receive a significant sum of money for short-term, nonresidential leasing of a Lot or Condominium Unit in violation of the Declaration. Thus, in recognition of this fact, together with the strong policy of wishing to preserve the residential use of the Lots and Condominium Units, and as a disincentive against violations, and to prevent an Owner from profiting from violating the Declaration, the following enforcement procedures shall apply for violations of the restriction against nonresidential use of a Lot or Condominium Unit: 1 st violation: $1,000 2 nd violation: $3,000 3 rd & subsequent violations: $5,000 Notwithstanding the foregoing, the Board, in its discretion, may determine to levy a fine up to the maximum fine amount of $5,000 upon a first violation if the Board determines the facts and circumstances of the violation merit imposing such fine. Any fine levied shall be in addition to any other disciplinary action (after providing the Owner notice and an opportunity for a hearing) or remedies available to the Association. Further, the foregoing shall not be construed to limit or restrict the Association from immediately proceeding with filing legal action or pursuing other available enforcement action to remedy a violation upon a first or subsequent violation. Failure to comply with any of the other provisions of this Policy (i.e., failure to timely provide the Association a copy of the lease agreement for a Lot or Condominium Unit) shall subject the responsible Owner(s) to monetary fines in accordance with the Association s standard Fine Schedule (applicable to other violations of the Restrictions) and/or all other the remedies provided under the Restrictions or otherwise authorized in law or in equity. Page 3 of 3