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Home My WebLink AboutRC 9503301295 ? • FP-94-149 ' • A - Rcoording Return to: - 1111 Third Avenue, 3400- WHEN RECORDED RETURN TO: Office of the city clerk ." Renton Municipal Building 200 Mill Avenue South Renton,WA 98055 DECLARATION LI CI OF Oa m-i 0 00 COVENANTS, CONDITIONS, RESTRICTIONS,•. AND RESERVATIONS 0 CI FOR SUMMIT PARK TOWNHOMES G7 0 • 47 C, CX A Subdivision a x • w x 4 N C71 S+] [*7 V7 156620.3 WHEN RECORDED RETURN TO: Offic4 of the city clerk • • Renton Municipal Building • 200 Mill Avenue South Renton,WA 98055 This Declaration is made as of this /57-- day of Declaration,, 199.2E, by Valley Development Associates L. P. , a Washington limited partnership, hereinafter referred to as "Declarant." JECITALB A. Declarant is the owner of Lots 1 through 24 of the Plat (as defined below) and the improvements located thereon, within the City of Renton, County of King, State of Washington, commonly known as Summit Park Townhomes, referred to hereinafter as the "Property". • B. Declarant desires to create a townhouse development on the Property, to provide for the maintenance, preservation, and architectural control of the privately-owned parcels and Association Maintenance Areas (as defined below) within the community, and to promote the health, safety, happiness, and welfare of the residents of the community. l!; C. For the benefit and protection of the Property, to enhance its ?; value and attractiveness, Declarant provides herein for a tv comprehensive system of land-use and building controls within the 11.4 Property. C7 D. This Declaration is subject and subordinate to the Declaration 3 of Covenants, Conditions, Restrictions, and Reservations for Summit 0 Park, A Subdivision, recorded under King County Recording No• 33d /.2 (the "Umbrella Declaration") . SUBMISSION OF THE PROPERTY TO THIS DECLARATION; ADDITIONAL PROPERTY Declarant, being the sole owner of the Property, hereby makes this Declaration for the purpose of submitting the Property to this Declaration, and declares that the Property described above shall be held, sold, conveyed, encumbered, leased, rented, occupied and improved subject to the following covenants, conditions, restriction, reservations, grants of easement rights, rights of way, liens, charges and equitable servitudes, which are for the purpose of protecting the value and desirability of the Property and shall be binding on all parties having any right, title or interest in the Property or any part thereof, and shall inure to the benefit of each owner thereof. This Declaration shall run with the land and bind Declarant, its successors and assigns, all subsequent owners of the Property or any part thereof, together with their grantees, successors, heirs, executors, administrators, devisees or assigns. Any conveyance, transfer, sale, assignment, lease or sublease of a Lot in the Property, shall and hereby is deemed to incorporate by reference all provisions of this Declaration. The provisions of this Declaration shall be enforceable by Declarant, any Lot Owner, the Association, and any first Mortgagee of any Lot. 156620.3 -1- • •r ARTICLE 1 DEFINITIONS Section 1.1 Definitions. For the purposes of this Declaration and any amendments hereto, the following definitions shall apply. "Architectural Control Committee" shall mean the Board, as defined below, or a committee by that name designated by the Board. "Articles" shall mean the articles of incorporation of the Association, as defined below. "Association" shall mean the Summit Park Townhomes Owners Association, a Washington non-profit corporation, as described more fully in Article 3, and its successors and assigns. "Association Maintenance Area" shall mean that portion of the Property and improvements described on Exhibit A attached hereto which the Association has maintenance responsibility. "Board" shall mean and refer to the Board of Directors of the Association, as provided for in Article 4. "Bylaws" shall mean the bylaws of the Association as they may from time to time be amended. "City" shall mean the City of Renton, in the County of King, State of Washington. "Declarant" shall mean Valley Development Associates L. P. , a Washington limited partnership,� ns should d its successors and assigns if such successors or assigns (i) acquire more than one Lot 443 from the Declarant for the purpose of development, and (ii) be el specifically assigned the rights and duties of Declarant by written C) instrument in recordable form. "Declaration" shall mean this Declaration of Covenants, Conditions, Restrictions, and Reservations for Summit Park Townhomes, and any amendments thereto. "Home" shall mean a structure located on a Lot which is designed and intended for use and occupancy as a residence by a single family or which is intended for use in connection with such residence. "Lot" shall mean and refer to any of Lots 1 through 24 as shown upon the Plat of the Property. Ownership of a Lot shall include ownership of the Home and improvements now or hereafter constructed thereon. "Member" shall mean a person entitled to membership in the Association pursuant to Section 3.5. 156620.3 -2- • 111 • I "Mortgage" shall mean a recorded mortgage or deed of trust that creates a lien against a Lot and shall also mean a real estate contract for the sale of a Lot. "Mortgagee" shall mean the beneficial owner, or the designee of the beneficial owner, of an encumbrance on a Lot created by a Mortgage and shall also mean the vendor, or the designee of vendor, of a real estate contract for the sale of a Lot. For the purpose of determining the percentage of first Mortgagees approving a proposed decision or course of action, a Mortgagee shall be deemed a separate Mortgagee for each Lot on which it holds a Mortgage which constitutes a first lien on said Lot. Mortgagees shall have the same voting rights as the owners of any Lot subject to such Mortgage. "Notice and Opportunity to be Heard" shall mean the procedure wherein the Board shall give written notice of the proposed action to all Owners, tenants or occupants of Homes whose interest would be significantly affected by the proposed action. The notice shall include a general statement of the proposed action and the date, time and place of the hearing, which shall be not less than five days from the date notice is delivered by the Board. At the 0 hearing, the affected person shall have the right, personally or by 01 a representative, to give testimony orally, in writing or both (as 4 specified in the notice) , subject to reasonable rules of procedure a established by the Board to assure a prompt and orderly resolution of the issues. Such evidence shall be considered in making the el decision but shall not bind the Board. The affected person shall C7 be notified of the decision in the same manner in which notice of 7 the meeting was given. "Owner" shall mean the owner of record, whether one or more persons or entities, of a fee simple title to any Lot and, except as may be otherwise expressly provided herein, shall, in the case of a Lot which has been sold pursuant to a real estate contract, include any person of record holdinga vendee's interest under such real estate contract, to the exclusion of the vendor thereunder. Any person or entity having such an interest merely as security for the performance of an obligation shall not be considered an owner. "Person" shall include natural persons, partnerships, corporations, associations and personal representatives. "Plat" shall mean the plat recorded in conjunction with this Declaration which depicts the layout of the Lots. The Plat for the Property was recorded on _? /__90 , 199,x", at Volume /73 of Plats, at pages // and /y , cording No. q,� .?3ci /„zy3 , records of King County, Washington. "Property" shall mean that real property and improvements located within the City of Renton, County of King, State of Washington, commonly known as Summit Park Townhomes and more particularly described as Lots 1 through 24 of the Plat. 156620.3 -3- 1 "Structure" shall mean any building, fence, wall, pole, driveway, walkway, patio, swimming pool, antenna or the like. "Transition Date" shall mean the earlier of the following: (i) the date on which the votes of the Class A members of the Association equal the votes of the Class B member or (ii) the fifth anniversary of the date of recording of this Declaration. ARTICLE 2 ASSOCIATION MAINTENANCE AREAS Section 2.1 Description of Association Maintenance Area. The Association Maintenance Area is described on Exhibit A attached hereto. Section 2.2 Maintenance. The Association shall have full responsibility for the maintenance, repair, improvement and replacement of the Association Maintenance Area, except as otherwise provided herein or by rules and regulations adopted by the Association. 011 Lr? ARTICLE 3 HOMEOWNERS ASSOCIATION C") Section 3.1 Establishment. There is hereby created an association called the Summit Park Townhomes Owners Association 0 (the "Association") . Section 3.2 Form of Association. The Association shall be a nonprofit corporation formed and operated under the laws of the State of Washington. Section 3.3 Articles and Bylaws. Declarant will adopt Articles of Incorporation and will propose to the initial Board of Directors the adoption of Bylaws to supplement this Declaration and to provide for the administration of the Association and the Property and for other purposes not inconsistent with this Declaration. In the event of any conflict between this Declaration and the Articles for such nonprofit corporation, the provisions of this Declaration shall prevail. Bylaws for the administration of the Association and the Property, and to further the intent of this Declaration, shall be adopted or amended by the Owners at regular or special meetings; provided that the initial Bylaws shall be adopted by the Board of Directors. In the event of any conflict between this Declaration and any Bylaws, the provisions of this Declaration shall prevail. Section 3.4 Board of Directors. The Association shall be managed by a Board of Directors who are members of the Association. They shall be elected as set forth in the Bylaws of the Association. 156620.3 -4- • • 411 4 Section 3.5 Membership and Voting Rights. The Association shall have two classes of voting membership: 3.5.1 Class A Members shall be all Owners except the Declarant, and each Class A Member shall be entitled to one vote for each Lot owned. When more than one Person holds an interest in any Lot, all such Persons shall be members. The vote for such Lot shall be exercised as the joint owners may decide among themselves, but in no event shall more than one vote be cast with respect to any Lot. 3.5.2 The Class B member shall be the Declarant who • shall be entitled to three votes for each Lot owned by it. The Class B class of membership shall cease and be converted to Class A membership upon the occurrence of the earlier of the following events: (i) the votes of the Class A members equal the votes of the Class B member; or (ii) the fifth anniversary of the date on which this Declaration is recorded. Section 3.6 Transfer of Membership. The membership in the Association of each Owner (including Declarant) shall be appurtenant to the Lot giving rise to such membership, and shall 3.42 not be transferred in any way except upon the transfer of title to „�, the Lot and then only to the transferee of title to the Lot. Any C,,,� attempt to make a prohibited transfer shall be void. Any transfer 0 of title to a Lot shall operate automatically to transfer the 02 membership in the Association to the new Owner. Section 3.7 Books and Records. The Board shall cause to be LI kept complete, detailed, and accurate books and records of the receipts and expenditures of the Association, in a form that complies with generally accepted accounting principles. The Board or a majority of the Owners may at any time require an annual audit prepared by an independent certified public accountant which shall be paid for by the Association. Section 3.8 Inspection of Association Documents, Books, and Records. The Association shall make available to Owners, Mortgagees, prospective' purchasers and their prospective mortgagees, and the agents or attorneys of any of them, current copies of this Declaration, the Articles, the Bylaws, and other rules, books, records, and financial statements of the Association, and the most recent annual audited financial statement, if one is prepared. "Available" shall mean available for inspection upon request, during normal business hours or under other reasonable circumstances. The Association may require the requesting party to pay a reasonable charge to pay the cost of making the copies. ARTICLE 4 MANAGEMENT OF THE ASSOCIATION Section 4.1 Administration of the Property. The Members covenant and agree that the administration of the Property shall be 156620.3 -5- • • in accordance with the provisions of this Declaration and the Bylaws of the Association which are made a part hereof. Administrative power and authority shall be vested in the Board. Section 4.2 Authority and Duties of the Board. On behalf of and acting for the Association, the Board, for the benefit of the Property and the Members, shall have all powers and authority permitted to the Board under this Declaration including, but not limited to, the following: • 4.2.1 Levy, collect, and enforce the collection of, assessments, as more particularly set forth in Article 7 hereof, to defray expenses attributable to carrying out the duties and functions of the Association hereunder. 4.2.2 Require any officer or employee of the Association handling or responsible for Association funds to furnish adequate fidelity insurance, the premiums for which shall be paid by the Association. 4.2.3 Enter into agreements with one or more qualified persons to provide for the maintenance, repair and replacement of the Association Maintenance Area including, without limitation, those portions of the Lots for which the Association is responsible to maintain, the collection of assessments, the sending of all required notices to Members, the operation of Association meetings, and other regular activities of the Association. W 4.2.4 Contract and pay for any materials, supplies, labor or services which the Board should determine are necessary or proper for carrying out its powers and duties under this Declaration, including legal, accounting, management, security patrol or other services; however, if any materials, supplies, labor or services are provided for particular Lots or their Owners, the cost thereof shall be specially charged to the Owners of such Lots. The Board may pay the Declarant a reasonable fee for any services it performs on behalf of the Association. 4.2.5 All checks, drafts, or other orders for the payment of money, notes, or other evidences of indebtedness in the name of the Association shall be signed by such officer or officers, agent or agents of the Association and in such manner as is from time to time determined by the Board. Section 4.3 adoption of Rules and Regulations. When and to the extent it deems advisable, the Board may adopt reasonable rules and regulations governing the maintenance and use of the Association Maintenance Area and the Property and other matters of mutual concern to the Members, which rules and regulations are not inconsistent with this Declaration and the Bylaws and which treat all Members fairly and in a non-discriminatory manner. Section 4.4 Additional Powers of the Association. In addition to the duties and powers of the Association, as specified 156620.3 -6- • • herein and elsewhere in this Declaration, but subject to the provisions of this Declaration, the Association, acting through its Board, shall have the power to do all other things which may be deemed reasonably necessary to carry out its duties and the purpose of this Declaration. ARTICLE 5 ARCHITECTURAL CONTROL Section 5.1 Construction and Exterior Alterations or Repairs. Except for the initial construction of any Home on the • Property by the Declarant, all Structures (including, without limitation, concrete or masonry walls, rockeries, driveways, fences, hedges, antennas, swimming pools, if any, or other Structures) to be constructed, erected, placed or altered within the Property, all exterior alterations and repairs (including, but not limited to, re-roofing or repainting) of any Structures on the Property and visible from any street or other Lot, and any such construction or alteration of landscaping on the Property must be approved by the Board or an Architectural Control Committee ("ACC") 11) composed of three or more representatives appointed by the Board. al Complete plans and specifications of all such proposed buildings, IV structures, exterior alterations and repairs, or landscaping together with detailed plans showing the proposed location of the same on the particular building site and other data requested by the ACC shall be submitted to the ACC before construction, alteration or repair is begun. Except for initial construction of if) any Home on the Property by the Declarant, no construction, 0) alteration or repair shall be started until written approval thereof is given by the ACC. 5.1.1 The ACC will review submittals as to the quality of workmanship and materials planned and for conformity and harmony of the exterior design with proposed or existing structures on the Lots and, as to location of the building, with respect to topography, finish grade elevation and building setback restrictions, in accordance with architectural guidelines to be adopted by the ACC. 5.1.2 All plans and specifications submitted for approval by the ACC must be submitted in duplicate at least 30 days prior to the proposed construction or exterior alteration or repair starting date. In the event the ACC fails to approve or disapprove such design and location within 30 days after said plans and specifications have been submitted to it, the ACC will be deemed to have given its approval. 5.1.3 The maximum height of any building shall be established by the ACC as part of plan approval and shall be given in writing together with the approval. If the ACC has failed to disapprove such design and location within the 30 day limit, and such design and location is thereby deemed approved, the maximum height of any building shall be no greater than 30 feet. 156620.3 -7- 5.1.4 The ACC may require that all plans or specifications be prepared by an architect or a competent house designer approved by the ACC. One complete set of the plans and specifications shall in each case be delivered to and permanently left with the ACC. All buildings or structures shall be erected or constructed, and all exterior alterations or repairs made, by a contractor, house builder or other person or entity approved by the ACC. The ACC shall have the right to refuse to approve any design, plan or color for such improvements, construction or exterior, alteration or repair visible from a street or other Lot which is not suitable or desirable, in the ACC's opinion, and such refusal may be based entirely on aesthetic or other factors. 5.1.5 In evaluating any design, the ACC may consider the suitability of the proposed building or other structure, the material of which it is to be built, the exterior color scheme, the site upon which such buildings or structures are proposed to be built, the harmony thereof with the surroundings, and the effect or impairment that such building or structure will have on the view or outlook of surrounding Lots and any and all other factors which, in , the ACC's opinion, shall affect the desirability or suitability of fj such proposed structure, building, improvements, or exterior ^,y alteration or repair. 5.1.6 The ACC shall have the right to disapprove the CI CI design or installation of a swimming pool or any other recreational structure or equipment deemed undesirable, in the ACC's reasonable % opinion, based on aesthetic factors or otherwise. The ACC may consider the visual impact of the proposed structure or equipment and the noise impact of the related activities upon all nearby Lots. Any enclosure or cover used in connection with such a recreational structure or equipment whether temporary, collapsible, or seasonal, shall be treated as a permanent structure for purposes of these covenants, and shall to be subject to all the conditions, restrictions, and requirements as set forth herein for all buildings and structures. 5.1.7 The ACC may require, at the Owner's expense, • the trimming, topping or, if deemed necessary by the ACC, removal of any tree, hedge or shrub on a Lot which the ACC determines is unreasonably blocking or interfering with the view or access to sunlight of another Lot. 5.1.8 Declarant (including any successor in interest to Declarant's status as Declarant) shall not be subject to the restrictions of this Section 5. 1 as to any Lot owned by Declarant. 5.1.9 By majority vote, the ACC may adopt or amend architectural guidelines consistent with this Declaration for making its determinations hereunder. 5.1.10 No Structure shall be erected, altered, placed or permitted to remain on any Lot unless the Structure complies with applicable building codes. 156620.3 -8- • • i Section 5.2 peclarant Facilities. Notwithstanding any provision in this Declaration to the contrary, Declarant and its agents, employees and contractors shall be permitted to maintain during the period of sale of Lots or Homes upon such portion of the Property (other than Lots sold by Declarant) as Declarant may choose, such facilities as in the sole opinion of the Declarant may be reasonably required, convenient or incidental to the construction, sale or rental of Lots and Homes, including but not limited to a business office, storage area, signs, model units, sales office, construction office and parking areas for all prospective tenants or purchasers of Declarant. ARTICLE 6 USE RESTRICTIONS AND MAINTENANCE OBLIGATIONS Section 6.1 Interior Maintenance and Private Structures. Each Owner, at said Owner's cost and expense, shall promptly and continuously maintain, repair, replace and restore the interior of the Home on the Owner's Lot (including without limitation, the V, replacement of broken windows) and other Structures located thereon, in a good, clean, attractive, safe and sanitary condition tic and in full compliance with all applicable laws, the provisions of rl this Declaration, and any rules and regulations of the Association. 4 If any Owner fails to maintain, repair, replace or restore the CI interior of such Owner's Home or other Structures located on the 671 Lot, the Association may, after Notice and Opportunity to be Heard, G at the Owner's cost and expense, maintain, repair, replace or CI restore such items or areas and the Owner shall reimburse the Association on demand for all such costs and expenses. Section 6.2 Maintenance of Homes and Yards. The Association is responsible for maintenance, repair and replacement of the exterior portions of the Homes and the Lots. However, the Association may, by the adoption of specific rules and regulations, delegate to the Owners certain responsibilities for maintaining, repairing, and replacing certain private portions of the Lots or the exterior of the Homes. Further, the Association may, as a common expense, provide for the inspection of any portion of a Home or Lot, the failure of which to maintain properly may cause damage to a Home or Lot, or cause the Association to incur unnecessary expenses in the discharge of its maintenance, repair, and replacement obligations set forth herein. If the inspection discloses the need for repair or replacement, the Association may, after Notice and Opportunity to be Heard, either require the responsible Owner to make the repair or replacement or to make the repair or replacement itself and allocate the cost thereof to the Owner. Section 6.3 Restrictions on Storage. No Owner shall store or allow any occupant or tenant to store any trailers, boats, motor homes, -recreational vehicles, motorcycles, or trucks over two tons (except those used by Declarant in connection with the development of the Property or construction of the Homes) or any disabled or 156620.3 -9- • • • • inoperable motor vehicle on the Property unless any such vehicle is completely enclosed and hidden from view within a garage or within such other enclosure as may be approved in advance by the ACC. Violations of this Section 6.3 shall subject such vehicles to impound, at the expense and risk of the owner thereof. Section 6.4 Common Driveways and Parkins. All common sidewalks and paths (if any) shall be used exclusively for normal access, ingress and egress, and no obstructions shall be placed thereon or therein except by express written consent of the Board. The Board may adopt rules and regulations governing parking by Owners and their guests on the public roads and the driveways within the Property. Section 6.5 Residential Use. All Lots and Structures located thereon shall be used, improved and devoted exclusively for residential purposes only, including: (i) sleeping, eating, food preparation for on-site consumption by occupants and guests, entertaining by occupants or personal guests, and similar activities commonly conducted within a residential dwelling, (without regard to whether the Owner or occupant uses the Home as a primary or secondary personal residence, on an ownership, rental, lease or invitee basis) or such other reasonable ancillary purposes In commonly associated with residential dwellings and otherwise in ?) compliance with this Declaration and all applicable laws for N residential dwellings; (ii) for the common social, recreational or Cother reasonable uses normally incident to such purposes; and (iii) for purposes of operating the Association and managing the �.� Property. Section 6.6 jio Nuisances. No noxious or offensive conditions shall be permitted upon any Lot or improvement thereon, nor shall anything be done thereon which is or may become an annoyance or nuisance to other occupants on the Property. Section 6.7 Restriction on Further Subdivision. No Lot, or any portion of a Lot in the Property, shall be divided and sold or resold, or ownership changed or transferred whereby the ownership of any portion of the Property shall be less than the area required for the use district in which the Property is located; provided, the foregoing shall not prohibit deeds of correction, deeds to resolve boundary disputes and similar corrective instruments. Section 6.8 Garbage and Trash Removal. No Lot shall be used as a dumping ground for rubbish, trash, garbage, litter, junk and other debris. All garbage, trash and yard waste shall be placed in appropriate sanitary containers for regular disposal or recycling. Each Owner shall be responsible for the prompt and regular disposal of all of garbage, trash, junk and yard waste (from the private yard areas) from the Owner's Lot. All containers for garbage, trash and yard waste may be placed in public view only on the designated collection day. 156620.3 -10- • 111 • Section 6.9 Animal Restrictions. No insects, reptiles, poultry or animals of any kind shall be raised, bred or kept in any Home or on any Lot, except that domesticated dogs, cats or other usual household pets (hereinafter referred to as "pets") not exceeding in aggregate two per Home may be kept in a Home subject to rules and regulations adopted by the Board. No dog houses, kennels, dog runs or the like may be kept or maintained on any Lot or on the outside of any Home. All pets when outside a Home shall be kept on an adequate leash or other means of physically controlling the pet, by a person papable of controlling the pet at all times or by a suitable invisible electronic confinement system not dangerous to humans. Pets shall not be allowed to leave • excrement on any Lot or on any portion of the Association Maintenance Area. Any Owner whose pet violates these provisions or who causes any unreasonable noise or damage to persons or property shall be liable to all such harmed Owners and their families, guests, and invitees. The Board may at any time require the removal of any pet at the Owner's sole expense which the Board finds is disturbing other Owners unreasonably, and may exercise this authority for specific pets even though other pets are permitted to_ remain. 0 Section 6.10 Signs. No signs shall be displayed to public view on any Lot except (i) one professionally created sign of not more than one square foot displaying the resident's name; (ii) one © sign of not more than five square feet advertising the Lot for sale 02 or rent, (iii) signs used by Declarant or other home builders to N advertise Lots or Homes for sale, or (iv) the permanent entry signs 0 for the subdivision. Section 6.11 Renting and Leasing. 6.11.1 With respect to the leasing, renting, or creation of any kind of tenancy of a Home, the Owner (except for a lender in possession of a Lot and improvements located thereon following a default in a first Mortgage, a foreclosure proceeding, or any deed of trust sale or other arrangement in lieu of a foreclosure) shall be prohibited from leasing or renting less than the entire Home, and for any term less than 30 days, and all leasing or rental agreements shall be in writing and be subject to this Declaration, the Articles and Bylaws, with a default of the tenant in complying with this Declaration, the Articles or Bylaws constituting a default under such lease or rental agreement. 6.11.2 If a Home is rented by its Owner, the Board may collect, and the tenant or lessee shall pay over to the Board, so much of the rent for such Home as is required to pay any amounts due the Association hereunder, plus interest and costs, if such amounts are in default over 30 days. The renter or lessee shall not have the right to contest payment over to the Board, and such payment will discharge the lessee's or renter's duty of payment to the Owner for rent to the extent such rent is paid to the Association, but will not discharge the liability of the Owner (and the Home under this Declaration for assessments and charges) or 156620.3 -11- i • operate as an approval of the lease. The Board shall not exercise this power where a receiver has been appointed with respect to the Home or its Owner, or in derogation of any rights which a Mortgagee of such Home may have with respect to such rents. Other than as stated herein, there are no restrictions on the right of any Owner to lease or otherwise rent his Home. Section 6.12 Zoning Regulations. Zoning regulations, building regulations, environmental regulations and other similar governmental regulations applicable to the Property subject to this Declaration shall be observed. In the event of any conflict between any provision of such governmental regulations and restrictions of this Declaration, the more restrictive provisions shall apply. Section 6.13 pusiness Use. No business of any kind shall be conducted on any Lot with the exception of (i) the business of the Declarant in developing and selling Homes or Lots, and (ii) home occupations approved by the Board which do not involve employees, regular visits by customers or clients, create excess traffic, parking problems, noise, or otherwise violate this Declaration. Owners shall also comply with all of the requirements of the appropriate local government concerning the operation of such home occupations. No business materials, supplies or equipment shall be stored on any Lot within the view of another Lot, except for items relating to an improvement which is under construction in conformance with this Declaration. Section 6.14 Temporary Residence. No outbuilding, basement, tent, shack, garage, trailer, shed or temporary building of any H kind shall be used as a residence either temporarily or ? permanently, except for trailers used by Declarant, builders, or 4'2 contractors during the construction period. Section 6.15 Satellite Dishes. Except as approved by the Association, no antenna, satellite dish or similar equipment shall be affixed to the exterior any Structure or otherwise placed on any Lot. Section 6.16 Building Setback Requirements. All Structures and other Lot improvements shall comply with all applicable governmental requirements including, without limitation, minimum setback requirements. Section 6.17 Oil and Mining Operations. No oil drilling, oil development operations, oil refining, quarrying or mining operations of any kind shall be permitted upon or in any Lot, nor shall oil wells, tanks, tunnels, mineral excavations or shafts be permitted upon or in any Lot. No derrick or other structure designed for use in boring for oil or natural gas shall be erected, maintained or permitted upon any Lot. Section 6.18 Use and Disposal of Hazardous Substances. The Owner of each Lot shall comply with all state, federal and local 156620.3 -12- i • e lations governing or in anywayrelatingto the laws and r gu go ern ng handling, storage, use, dumping, discharge or disposal of any hazardous substance or material. The owner of each Lot shall not dispose of or discharge any hazardous substance or materials on any Lot, Association Maintenance Area, public street or other area located within the Property. Section 6.19 Completion of Projects. Any Structures or improvements, including any repairs or replacement thereof, constructed on any Lot shall• be completed as to external appearance, including finish painting, within six months from the commencement of construction except for reasons beyond the control of the Owner, in which case a longer period may be permitted by the ACC. This period may be extended by the Board of Directors due to inclement weather. Section 6.20 Mailboxes. Each of the mailboxes and mailbox structures shall be placed in locations approved by the United States Postal Service. Owners may not damage or otherwise interfere with a mailbox structure. Section 6.21 Exterior Add-ons. No awnings, air conditioning units, or other projections shall be placed on or hang from the exterior surfaces of any Home unless they have been approved by the al ACC. Section 6.22 Outdoor Fires. Outdoor barbecues may be used vl for cooking on the Lots when permitted by law. Reasonable and ;';j adequate precautions against fires must be taken. Excessive smoke G or soot accumulation from fires shall not be allowed. No other 0 outdoor fires shall be permitted on the Property, except for fires CI by Declarant or contractors for burning construction wastes where all necessary government permits have been obtained. Section 6.23 Screened Service Areas. Unsightly items must be hidden from view within a Home or garage or within a fenced or screened area where they will not be seen from any Lot or road. Unsightly items shall include, but shall not be limited to, garbage and trash, clothes lines, bicycles, recreational gear, outdoor maintenance equipment, firewood and ladders. The design and materials used for any fenced or screened area shall be consistent with the general appearance of the Home and must receive prior approval from the ACC. Section 6.24 Party Walls. Foundation piers, floors, beams, walls and other structural members or elements common to Homes which are built as part of the original construction, are placed upon or straddle the dividing line between adjacent Lots and actually support or protect adjacent Homes shall be regarded and treated as party walls. This Section shall govern the maintenance and all other obligations of Owners with respect to party walls. 6.24.1 The cost of the repair and maintenance of a party wall shall be borne by the Owners sharing the party wall. If 156620.3 -13- • i the need for any maintenance or repair work is caused through the willful or negligent act of an Owner or his or her family, guests, or invitees, the cost of such maintenance or repairs shall be borne by that Owner alone. 6.24.2 Each Owner of a Home with a party wall shall have the right, at the Owner's sole expense, to drill or cut into or otherwise gain access to, the interior of a party wall for the purpose of maintaining, repairing or restoring it and, upon the prior written consent of the Owner of the adjoining Home, for the purpose of remodeling or altering, water, utility, soundproofing or other services or amenities to the Owner's Home subject to an obligation to restore the party wall to the same condition it was in immediately before such act, and to indemnify the Owner of the Home adjoining the party wall for any damages caused thereby. 6.24.3 Interior decoration excepted, no Owner of an Home with a party wall may make any changes to or alterations of a party wall without the prior written consent of the Owner of the Home adjoining the party wall. 6.24.4 Appurtenant to each Lot with a party wall located thereon shall be an easement over the adjoining Lot sharing 41 the party wall for the purpose of accommodating any encroachment by C3 buildings or structures on the Home Lot due to engineering errors, errors in original construction, or the settling or shifting of rl such buildings or structures. If any Home is partially or totally © destroyed and then repaired and rebuilt substantially in accordance 01 with the original plans and specifications, there shall also be appurtenant to the Lot an easement to accommodate minor 0 encroachments by the successor structure from similar causes. 6.24.5 If the Owner (the "Defaulting Owner") of a Home fails to perform its obligations under this Section including, without limitation, the obligation to pay that Defaulting Owner's share of maintenance, repair or restoration of a party wall, the Owner of the adjoining Home may perform such action or make such payment. The Defaulting Owner shall promptly reimburse that Owner for all costs and expenses (including attorneys' fees and costs) incurred with interest thereon at twelve percent (12%) per annum until paid and any amounts not so paid shall become a lien on the Lot of the Defaulting Owner in accordance with the provisions of Chapter 60.04 RCW. ARTICLE 7 ASSESSMENTS Section 7.1 Creation of the Lien and Personal Obligation of Assessments. Each Owner of a Lot by acceptance of a deed therefor, whether or not it shall be so expressed in such deed, is deemed to covenant and agreeto pay to the Association any assessment duly levied by the Association as provided herein. Such assessments, together with interest, costs, late charges and reasonable 1566203 -14- • S attorneys fees, shall also be a charge on the land and shall be a continuing lien upon the Lot against which each such assessment is made. Each such assessment, together with interest, costs, late charges and reasonable attorneys' fees, shall also be the personal obligation of the person who was the Owner of such Lot at the time when the assessment fell due. The personal obligation for delinquent assessments shall not pass to his successor title unless the lien for such delinquent assessments had been properly recorded prior to title transfer or unless expressly assumed by that party. When ownership of a Lot changes, assessments which have been established for the current fiscal year shall be prorated between the Buyer and Seller based on a 365 day year. Section 7.2 Liability for Assessments. Any assessments which may be levied from time to time pursuant to the authority of the Board shall be established in accordance with this Article 7, except for assessments levied against an Owner for the purpose of reimbursing the Association for costs incurred in bringing the Owner or his Home or Lot into compliance with the provisions of this Declaration. Declarant shall not be obligated to pay any ,al assessment levied against any Lots owned by it unless a Home has been constructed on the Lot and the Home is occupied. No Owner may w4 exempt himself or herself from liability for his assessments by C abandoning his or her Lot. Cl Section 7.3 Association Budget. The Association shall C) prepare, or cause the preparation of, an operating budget for the 0 Association at least annually, in accordance with generally 0) accepted accounting principles. The operating budget shall set forth sums required by the Association, as estimated by the Board, to meet its annual costs and expenses (including without limitation, the amount of any assessments levied against the Association pursuant to the Umbrella Declaration) together with a reasonable sum to establish reserves for future major repairs and replacements, assuming completion of construction of all improvements on the Lots; provided that the Board shall determine when establishment of such reserves shall commence. Assessments on each Lot shall commence upon the closing of the sale of the Lot with a completed Home thereon or upon the occupancy of the Home, whichever is earlier. The members of the Association who are obligated to pay assessments based on a particular budget may reject said budget at a special meeting of the Association by a vote of 51% of the votes of each class of Members. Until assessments have commenced on all Lots, Declarant shall have the option of either paying an amount equal to the assessments which would have been due with respect to the unoccupied Lots owned by it had assessments commenced thereon or paying to the Association an amount equal to the excess, if any, of actual expenses of the Association over assessments levied. Section 7.4 levy of General Assessment: Special Allocation. In order to meet the costs and expenses projected in its operating budget, the Board shall determine and levy on every Owner a general assessment. The Association's operating budget shall be divided by 156620.3 -15- • • • the number of Lots to determine the amount of one assessment unit. Except as provided in Section 7.3 with respect to unoccupied Lots owned by the Declarant, each Owner's general assessment shall be calculated by multiplying the number of Lots owned by the Owner by one assessment unit. Because each private drainage easement delineated on the Plat benefits some, but not all, of the Lots, the Association might incur certain maintenance, repair, and replacement expenses pertaining to a particular private drainage easement that should be paid for by some, but not all, of the Owners. Accordingly, in addition to the general assessment, the Board may determine and levy upon certain of the Owners that are benefitted by a particular private drainage easement a special allocation assessment based upon the cost of maintaining, repairing, and replacing such easement area and the Owner's pro rata share of the benefit of such easement based on one assessment unit for each Lot owned. Section 7.5 Amount of General Assessment. The Board shall make reasonable efforts to determine the amount of the general X77 assessment payable by each Owner for an assessment period at least 30 days in advance of beginning of such period. Notice of the general assessment shall thereupon be sent to each Owner subject to c? assessment; provided, however, that failure to notify an Owner of po the amount of an assessment shall not render such assessment void e4) or invalid. Any failure by the Board, before the expiration of any 0 assessment period, to fix the amount of the general assessment U hereunder for the next period, shall not be deemed a waiver or 40 modification in any respect of the provisions of this Article or a release of any Owner from the obligation to pay the general assessment, or any installment thereof, for that or any subsequent assessment period. Section 7.6 Assessment Period. The general assessment fixed for the preceding period shall continue until a new assessment is fixed. Upon any revision by the Association of the operating budget during the assessment period for which each budget was prepared, the Board shall, if necessary, revise the general assessment levied against the Owners and give notice of the same in the same manner as the initial levy of a general assessment for the assessment period. Section 7.7 planner and Time of Payment. Assessments shall be payable in such reasonable manner as the Board shall designate. Any assessment or installment thereof which remains unpaid for at least 15 days after the due date to thereof shall bear interest at the rate of 12% per annum, and the Board may also assess a late charge in an amount not exceeding 25% of any unpaid assessment which has been delinquent for more than 15 days. Section 7.8 Accounts. Any assessments collected by the Association shall be deposited in one or more Federally insured institutional depository accounts established by the Board. The Board shall have exclusive control of such accounts and shall maintain accurate records thereof. No withdrawal shall be made 156620.3 -16- 110 411 • • from said accounts except to pay for charges and expenses authorized by this Declaration. Section 7.9 Lien. In the event any assessment or installment thereof remains delinquent for more than 30 days, the Board may, upon 15 days' prior written notice to the Owner of such Lot of the existence of the default, accelerate and demand immediate payment of the entire assessment. The amount of any assessment assessed or charged to any Lot plus interest, costs, late charges and reasonable attorneys' fees, shall be a lien upon such Lot. A notice of assessment may be recorded in the office where real estate conveyances are recorded for the county in which this property is located. Such notice of assessment may be filed at any time at least 15 days following delivery of the notice of default referred to above in this Section. The lien for payment of such assessment and charges shall have priority over all other liens and encumbrances, recorded or unrecorded, limited as otherwise provided herein. Suit to recover a money judgment for unpaid assessments or charges shall be maintainable without foreclosure or waiver of the lien securing the same. Said liens P) may be foreclosed as a mortgage. Section 7.10 Waiver of Homestead. Each Owner hereby waives, © to the extent of any liens created pursuant to this Article, the en benefit of any homestead or exemption law in effect at the time any tri assessment or installment thereof become delinquent or any lien is C) imposed pursuant to the terms hereof. Section 7.11 Special Assessments. In addition to the general assessments authorized by this Article, the Association may levy an assessment or assessments at any time against all Lot Owners, applicable to that year only, for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction, inordinate repair, or replacement of a described capital improvement located upon or forming a part of the Association Maintenance Area, including necessary fixtures, and personal property related thereto, or for such other purposes as the Association may consider appropriate; provided, however, that any such assessment must have the prior favorable vote or consent of a majority of each class of Members. The amount of each owner's special assessment for any year shall be calculated like the general assessment, except that the total special assessment shall be substituted for the operating budget amount. Section 7.12 Records and Financial Statements. The Board shall prepare or cause to be prepared for any fiscal year in which the association levies or collects any assessments, a balance sheet and an operating (income/expense) statement for the Association which shall include a schedule of delinquent assessments identified by the number of the Lot and the name of the Lot Owner; provided, however, such documents need not be prepared by a certified public accountant unless requested by the Board or a majority of the Owners. The Board shall cause detailed and accurate records of the receipts and expenditures of the Association to be kept specifying 156620.3 -17- 1111 and itemizing the maintenance, operating, and any other expense incurred. Such records, copies of this Declaration, the Articles and the Bylaws, and any resolutions authorizing expenditures of Association funds shall be available for examination by any Owner at convenient weekday hours. Section 7.13 Certificate of Assessment. A certificate executed and acknowledged by the treasurer or the president of the Board (or an authorized agent thereof, if neither the president nor treasurer is available) stating the indebtedness for assessment and charges or lack thereof secured by the assessments upon any Lot shall be conclusive upon the Association as to the amount of such indebtedness on the date of the certificate, in favor of all persons who rely thereon in good faith. Such a certificate shall be furnished to any Owner or any Mortgagee of a Lot within a reasonable time after request, in recordable form, at a reasonable fee. Unless otherwise prohibited by law, any Mortgagee holding a lien on a Lot may pay any unpaid assessments or charges with respect to such Lot, and, upon such payment, shall have a lien on such Lot for the amounts paid of the same priority as its lien. Section 7.14 Foreclosure of Assessment Lien; Attorneys Fees and Costs. The Board (or authorized agent) , on behalf the Association, may initiate an action to foreclose the lien of, or 1.0 collect any assessment. In any action to foreclosure the lien of, or otherwise collect delinquent assessments or charges, any ir4 judgment rendered in favor of the Association shall include a reasonable sum for attorneys' fees and all costs and expenses reasonably incurred in preparation for or in the prosecution of said action, in addition to all costs permitted by law. Said liens may be foreclosed as a mortgage. Section 7.15 Curing of Default. The Board shall prepare and record a satisfaction and release of the lien for which a notice of assessment has been filed and recorded in accordance with this Article upon timely payment or other satisfaction of all delinquent assessments set forth in the notice and all other assessments which have become due and payable following the date of such recordation with respect to the Lot to which such notice of assessment was recorded, together with all costs, late charges and interest which have accrued thereon. A fee of twenty-five dollars ($25.00) or such other amount as may from time to time be set by the Board covering the cost of preparation and recordation shall be paid to the Association prior to such action. The satisfaction and release of the lien created by the notice of assessment shall be executed by the president or treasurer of the Association or by any authorized representative of the Board. For the purpose of this paragraph, the term "costs" shall include costs and expenses actually incurred or expended by the Association in connection with the cost of preparation and recordation of the notice of assessment and any efforts to collect the delinquent assessments, including a reasonable sum for attorneys' fees and costs. 156620.3 -18- 411 Section 7.16 Delinquent Assessment Deposit; Working Capital. 7.16.1 A Lot Owner may be required by the Board, from time to time, to make and maintain a deposit up to three months' estimated monthly assessments, which may be collected as are other assessments and charges. Such deposit shall be held in a separate fund, be credited to the Lot owned by such Owner, and be for the purpose of establishing a reserve for delinquent assessments. 7.16.2 Resort may be had thereto at any time when such owner is ten days or more delinquent in paying his or her monthly or other assessments and charges. Said deposits shall not be considered as advance payments of regular assessments. In the event the Board should draw upon said deposit as a result of a Lot Owner's delinquency in payment of any assessments, the Owner shall continue to be responsible for the immediate and full payment of said delinquent assessment (and all penalties and costs thereon) and thus the full restoration of said deposit, and the Board shall continue to have all of the rights and remedies for enforcing such 0? assessment payment and deposit restoration as provided by this c4 Declaration and by law. rot 7.16.3 Upon the sale of a Lot, the seller/Owner M thereof shall not be entitled to a refund from the Association of C3 any deposit or reserve account made or maintained with respect to G such Lot pursuant to this or any other section of this Declaration; I rather, any such deposit or reserve account shall continue to be WI held by the Association for the credit of such Lot, and the seller/Owner shall be responsible for obtaining from the purchaser appropriate compensation therefor. 7.16.4 The first purchaser of any Lot shall pay to the Association, in addition to other amounts due, an amount equal to two months of monthly assessments as a contribution to the Association's working capital. Such working capital contributions shall not be used to defray Declarant's expenses in completing the construction or development of the Property, to pay Declarant's contributions to Association reserves or to make up any deficits in the budget of the Association. ARTICLE 8 COMPLIANCE AND ENFORCEMENT Section 8.1 Enforcement. 8.1.1 Each Member, Board member and the Association shall comply strictly with the provisions of this Declaration and with the Bylaws and administrative rules and regulations adopted by the Association (as the same may be lawfully amended from time to time) . Failure to comply shall result in a claim for damages or injunctive relief, or both, by the Board (acting through its officers on behalf of the Association and the Owners) or by the 156620.3 -19- 410 • aggrieved Owner on his own, against the party (including an Owner or the Association) failing to comply. 8.1.2 In any action or arbitration to enforce the provisions of this Section 8.1 or any other provision of this Declaration, the Articles or the Bylaws, the prevailing party in such action or arbitration shall be entitled to an award for reasonable attorneys' fees and all costs and expenses reasonably incurred in preparation for prosecution of said action or arbitration, in addition to all costs permitted by law. Section 8.2 No Waiver of Strict Performance. The failure of the Board or Declarant, as applicable, in any one or more U9 instances to insist upon or enforce the strict performance of any 0') of the terms, covenants, conditions or restrictions of this Declaration, or of any Bylaws or administrative rules or C regulations, shall not be construed as a waiver or a relinquishment t� for the future of such term, covenant, condition or restriction, but such term, covenant, condition or restriction shall remain in 0 full force and effect. No waiver by the Board of any provision hereof shall be deemed to have been made unless expressed in Z1 writing and signed by the Board. Section 8.3 Arbitration. Any dispute between the Owners, between an Owner and the Board or the Association or between an Owner, the Board or the Association and Declarant shall be determined by arbitration in the Seattle area under the American Arbitration Association (AAA) Commercial Arbitration Rules with Expedited Procedures in effect on the date hereof, as modified by this Declaration. There shall be one arbitrator selected by the parties within seven days of the arbitration demand or, if not, then selected pursuant to the AAA Rules. The arbitrator shall be an attorney with at least five years subdivision or real estate law experience. Any issue about whether a claim must be arbitrated pursuant to this Declaration shall be determined by the arbitrator. At the request of either party made not later than 45 days after the arbitration demand, the parties agree to submit the dispute to nonbinding mediation which shall not delay the arbitration hearing date. There shall be no substantive motions or discovery, except the arbitrator shall authorize such discovery as may be necessary to ensure a fair hearing, which shall be held within 90 days of the demand and concluded within two days. These time limits are not jurisdictional. The arbitrator shall apply substantive law and may award injunctive relief or any other remedy available from a judge including attorney fees and costs to the prevailing party, but the arbitrator shall not have the power to award punitive damages. This arbitration provision shall not cover claims by the Association for collection of assessments; such claims shall be governed by Article 7. Section 8.4 Remedies Cumulative. Except for claims which must be arbitrated pursuant to Section 8.3 above, the remedies provided herein are cumulative, and the Board may pursue them 156620.3 -20- • • 410 concurrently, as well as any other remedies which may be available under law although not expressed herein. ARTICLE 9 LIMITATION OF LIABILITY Section 9.1 To Personal Liability. So long as a Board member, Association committee member, Association officer, or authorized agent(s) has acted in good faith, without willful or intentional misconduct, upon the basis of such information as may be possessed by such person, no person shall be personally liable • to any Member, or other party including the Association, for any damage, loss or prejudice suffered or claimed on account of any act, omission, error, negligence (except gross negligence) , any discretionary decision or failure to make a discretionary decision, by such person in such person's official capacity; provided, however, that this Section shall not apply where the consequences of such act, omission, error or negligence are covered by insurance or bond obtained by the Board pursuant to Article 4 or Article 14 hereof. U3 Section 9.2 Indemnification. Each Board member or 01 Association committee member, or Association Officer, and their CNa respective heirs and successors, shall be indemnified by the "4 Association against all expenses and liabilities, including OCD attorneys' fees, reasonably incurred by or imposed in connection 41 with any proceeding to which he or she may be party, or in which he or she may become involved, by reason of being or having held such position at the time such expenses or liabilities are incurred, except in such cases wherein such person is adjudged guilty of intentional misconduct, or gross negligence or a knowing violation of law in the performance of his or her duties, and except in such cases where such person has participated in a transaction from which said person will personally receive a benefit in money, property, or services to which said person is not legally entitled; provided,, however, that in the event of a settlement, indemnification shall apply only when the Board approves such settlement and reimbursement as being in the best interests of the Association. Nothing contained in this Section 9.2 shall, however, be deemed to obligate the Association to indemnify any Member who is or has been a Board member or officer of the Association with respect to any duties or obligations assumed or liabilities incurred by him or her under and by virtue of the Declaration as a Member or Owner of a Lot. ARTICLE 10 MORTGAGEE PROTECTION Section 10.1 Priority of Mortgages. Notwithstanding all other provisions hereof, the liens created under this Declaration upon any Lot for assessments shall be subject to tax liens on the Lot in favor of any assessing and/or special district and be 156620.3 -21- • 0 subject to the rights of the secured party in the case of any indebtedness secured by first lien mortgages or deeds of trust which were made in good faith and for value upon the Lot. A mortgagee of a Lot, or other purchaser of a Lot, who obtains possession of a Lot as a result of foreclosure or deed in lieu thereof will be liable for any assessment accruing after such possession. Such unpaid share of common expenses or assessments shall be deemed to be common expenses collectible from all of the Lot Owners including such possessor, his successor and assigns. For the purpose of this Article, the terms "mortgage" and "mortgagee" shall not mean a real estate contract (or the vendor thereunder) , or a mortgage or deed of trust (or mortgagee or beneficiary thereunder) securing a deferred purchase price balance owed with respect to a sale by an individual Lot Owner other than Declarant. Section 10.2 Effect of Declaration Amendments. No amendment of this Declaration shall be effective to modify, change or limit or alter the rights expressly conferred upon mortgagees in this instrument with respect to any unsatisfied mortgage duly recorded unless the amendment shall be consented to in writing by the holder 1 of such mortgage. Any provision of this Article conferring rights XI upon mortgagees which is inconsistent with any other provision of 4 this Declaration shall control over such other inconsistent c provisions. fit Section 10.3 Rights of Lien Holders. A breach of any of the provisions, conditions, restrictions, covenants, easements or VI reservations herein contained shall not affect or impair the lien 0 or charge of any bona fide mortgage made in good faith for value on any Lots; provided, however, that any subsequent owner of the Lot shall be bound by these provisions whether such owner's title was acquired by foreclosure or trustee's sale or otherwise. Section 10.4 Copies of Notices. If the first mortgagee of anyLot has so requested of the Association in writing, the � Association shall give written notice to such first mortgagee that an Owner/mortgagor of a Lot has for more than 60 days failed to meet any obligation under this Declaration. Any first mortgagee shall, upon written request, also be entitled to receive written notice of all meetings of the Association and be permitted to designate a representative to attend such meetings. Section 10.5 Furnishing of Documents. The Association shall make available to prospective purchasers, mortgagees, insurers, and guarantors, at their request, current copies of the Declaration, Bylaws, and other rules governing the Property, and the most recent balance sheet and income/expense statement for the Association, if any has been prepared. ARTICLE 11 EASEMENTS AND SPECIAL TRACTS 156620.3 -22- • 4 Section 11.1 Association Functions. There is hereby reserved to Declarant and the Association or their duly authorized agents and representatives such easements as are necessary to perform the duties and obligations of the Association as are set forth in the Declaration, or in the Bylaws, and rules and regulations adopted by the Association. Section 11.2 Utility and Sidewalk Easements. On the Lots, easements are reserved as provided by the Plat and applicable laws, ordinances and other governmental rule and regulations for utility installation and maintenance, including but not limited to, underground electric power, telephone, water, sewer, drainage, gas and accessory equipment, together with the right to enter upon the Lots at all times for said purposes, and for sidewalks. Within these easements, no structure, planting, or other material shall be placed or permitted to remain which may damage, interfere with the installation and maintenance of utilities or the sidewalks, as applicable, or which may change the direction of flow of drainage channels in the easements, or which may obstruct or retard the flow 0 of water through drainage channels in the easements. The easement CI area of each Lot, and all improvements thereon, shall be maintained N continuously by the Owner of each Lot, except for those w4 improvements for which a public authority or utility company is 0 responsible and except for any sidewalk for the common use and 0/ enjoyment of the Owners which the Association is obligated to C maintain. CCD D Section 11.3 Entry by Security Patrol. If the Board contracts for security patrol service, said service, and its employees, shall in have the right to enter onto any of the Lots and the Association Maintenance Area in order to carry out their duties under such security patrol agreement; provided, however, that, said patrol service can enter a Lot only if it is either (i) doing so with reasonable cause, or (ii) acting with the consent of the Owner or tenant of such Lot. ARTICLE 12 • • ABANDONMENT OF SUBDIVISION STATUS • Section 12.1 Duration of Covenants. The covenants contained herein shall run with and bind the land and be perpetual, unless modified by an instrument executed in accordance with Article 13. Section 12.2 Abandonment at Subdivision Status. The Association shall not, without the prior written approval of the governmental entity having jurisdiction over the Property and without prior written approval of 100% of all first Mortgagees and Owners (other than the sponsor, developer or builder) of record, seek by act or omission to abandon or terminate the subdivision status of the Property as approved by the governmental entity having appropriate jurisdiction over the Property. 156620.3 -23- ARTICLE 13 AMENDMENT OP DECLARATION OR PLAT Section 13.1 Declaration Amendment. Amendments to this Declaration shall be made by an instrument in writing entitled "Amendment to Declaration" which sets forth the entire amendment. Until the Transition Date, this Declaration may be amended by an instrument approved and executed by Declarant and approved by the 67% of each class of member in the Association. Thereafter, amendments must be approved by Owners, including Declarant, having over 67% of the votes in the Association. The members' approval may be obtained by a special vote of the members at a meeting of the Association, or the written consent of the requisite percentage of members. The amendment shall be executed by the president and secretary of the Association who shall certify that the requisite vote or consent has been obtained. Notwithstanding any of the foregoing, the prior written approval of 51% of all Mortgagees who have requested from the Association notification of amendments shall be required for any material amendment to the Declaration or the Bylaws of any of the following: voting rights; assessments, assessment liens, and subordination of such liens; reserves for maintenance, repair, and replacement of Association Maintenance Areas; insurance or fidelity insurance; responsibility for maintenance and repair; the boundaries of any Lot; convertibility IAof Lots into Association Maintenance Areas or of Association C7i Maintenance Areas into Lots; leasing of Lots other than set forth u herein; imposition of any restrictions on the right of an Owner to H sell or transfer his Lot; a decision by the Association to 0 establish self-management when professional management has been Ol required previously by the Mortgagees; or any provisions which are { 3 for the express benefit of Mortgagees or eligible insurers or Q guarantors of first Mortgages. It is specifically covenanted and understood that any amendment to this Declaration properly adopted 474 will be completely effective to amend any or all of the covenants, conditions and restrictions contained herein which may be affected and any or all clauses of this Declaration unless otherwise specifically provided in the section being amended or the amendment itself. Section 13.2 Plat. Except as otherwise provided herein, the Plat may be amended by revised versions or revised portions thereof referred to and described as to affect an amendment to the Declaration adopted as provided for in Section 13.1. Copies of any such proposed amendment to the Plat shall be made available for the examination of every Owner. Such an amendment to the Plat shall be effective, once properly adopted, upon having received any governmental approval required by law and recordation in the appropriate city or county offices in conjunction with the Declaration amendment. Section 13.3 Amendments to Conform to Construction. Declarant, upon Declarant's sole signature, and as an attorney-in- fact for all Lot owners with irrevocable power coupled with an interest, may at any time, until all Lots have been sold by 156620.3 -24- • • • Declarant, file an amendment to the Declaration and to the Plat to conform data depicted therein to improvements as actually constructed and to establish, vacate and relocate easements. ARTICLE 14 INSURANCE Section 14.1 General Reauirements. Commencing not later than the time of the first conveyance of a Lot to a person other than the Declarant, the Association shall maintain, to the extent reasonably available, a policy or policies and bonds necessary to provide (a) property insurance; (b) commercial general liability insurance; (c) fidelity insurance; (d) worker's compensation insurance to the extent required by applicable laws; (e) directors and officers liability insurance; and (f) such other insurance as the Board deems advisable. The Board shall review at least annually the adequacy of the Association's insurance coverage. All insurance shall be obtained from insurance carriers that are generally acceptable for similar projects, authorized to do business in the state of Washington, and meet the specific f) requirements of FNMA, HUD, VA and FHLMC regarding the Cr) qualifications of insurance carriers. Notwithstanding any other provisions herein, the Association shall continuously maintain in e4 effect property, liability and fidelity insurance that meets the insurance requirements for similar projects established by FNMA, HUD, FHLMC, and VA so long as any of them is a holder of a mortgage or Owner of a Lot, except to the extent such coverage is not available or has been waived in writing by them. All such insurance policies shall provide that coverage may not be cancelled or substantially modified (including cancellation for nonpayment of premium) without at least 30 days' prior written notice to any and all insureds named therein, including Owners, Mortgagees, and designated servicers of Mortgagees. Section 14.2 Property Insurance. The property insurance shall, at the minimum, provide all risk or special cause of loss coverage in an amount equal to the full replacement cost of the Homes as originally constructed and personal property of the Association with an "Agreed Amount Endorsement" and, if required by FNMA or FHLMC, construction code endorsements, such as a "Demolition Cost Endorsement," a "Contingent Liability from Operation of Building Laws Endorsement," an "Increased Cost of Construction Endorsement," and such other endorsements as FNMA or FHLMC deems necessary and are available. The policy may include improvements and betterments installed by the Owners, in which event the additional premium for such insurance may be charged to the Owners in accordance with the replacement cost thereof. The policy shall provide a separate loss payable endorsement in favor of the Mortgagee of each Lot. The Association or insurance trustee, if any, shall hold insurance proceeds in trust for the Owners and their Mortgagees, as their interests may appear. Each Owner and the Owner's Mortgagee, if any, shall be beneficiaries of the policy. Certificates of insurance shall be issued to each Owner and Mortgagee upon request. 156620.3 -25- • • • Section 14.3 Commercial General Liability Insurance. The liability insurance coverage shall insure the Board, the Association, the Owners, the Declarant, and the Managing Agent, and cover all of the Homes with a "Severability of Interest Endorsement" or equivalent coverage which would preclude the insurer from denying the claim of an Owner because of the negligent acts of the Association or of another Owner, and shall cover liability of the insureds for property damage and bodily injury and death of persons arising out of the operation, maintenance, and use of the Homes, host liquor liability, employers' liability insurance, automobile liability insurance, and such other risks as are customarily covered with respect to residential projects of similar construction, location and use. The limits of liability shall be in amounts generally required by Mortgagees for projects of similar construction, location and use but shall be at least $1,000,000 combined single limit for bodily injury and property damage per occurrence and $2,000,000 general aggregate. Section 14.4 Insurance Trustee; Power of Attorney. The named insured under the policies referred to in Sections 14.2 and 14.3 shall be the Association, as trustee for each of the Owners. The insurance proceeds may be made payable to any trustee with Y) which the Association enters into an insurance trust agreement, or ?? any successor trustee, who shall have exclusive authority to negotiate losses under the policies. Subject to the provisions of Section 14.8, the proceeds must be disbursed first for the repair c,, or restoration of the damaged property, and Owners and lienholders n are not entitled to receive payment of any portion of the proceeds C) unless there is a surplus of proceeds after the property has been completely repaired or restored. Each Owner appoints the C)) Association, or any insurance trustee or successor trustee designated by the Association, as attorney-in-fact for the purpose of purchasing and maintaining such insurance, including the collection and appropriate disposition of the proceeds thereof, the negotiation of losses and execution of releases of liability, the execution of all documents and the performance of all other acts necessary to accomplish such purposes. Section 14.5 Additional Policy Provisions. The insurance obtainedpursuant to Sections 14.2and 14.3 shall contain the following provisions and limitations: 14.5.1 Each Owner is an insured person under the policy with respect to liability arising out of the Owner's interest in the Homes or membership in the Association. 14.5.2 Such policies shall not provide for contribution by or assessment against Mortgagees or become a lien on the property superior to the lien of a first mortgage. 14.5.3 If, at the time of the loss under the policy, there is other insurance in the name of the Owner covering the same risk covered by the policy, the Association's policy provides primary insurance. 156620.3 -26- . 411 • 14.5.4 Coverage shall not be prejudiced by (a) any act, omission or neglect of the Owners when such act or neglect is not within the scope of the Owner's authority on behalf of the Association, or (b) failure of the Association to comply with any warranty or condition with regard to any portion of the premises over which the Association has no control. 14.5.5 A waiver of subrogation by the insurer as to any and all claims against the Association, any Owner, and/or their respective .agents, members of the Owner's household, employees, or lessees, and of any defenses based upon co-insurance or upon invalidity arising from the acts of the insured. 14.5.6 A standard mortgagee clause which shall: (a) Provide that any reference to a mortgagee in the policy shall mean and include all Mortgagees of any Lot or Lot lease or sublease in their respective order of preference, whether or not named therein; (b) Provide that such insurance as to the interest of any Mortgagee shall not be invalidated by any act or neglect of the Board or Owners or any persons under any of them; 0") (c) Waive any provision invalidating 44 such mortgage clause by reason of the failure of any Mortgagee to 1.4 notify the insurer of any hazardous use or vacancy, any requirement that the Mortgagee pay any premium thereon, and any contribution CI clause; and 0 (d) Provide that, without affecting 111 any protection afforded by such mortgagee clause, any proceeds payable under such policy shall be payable to the Association or the insurance trustee. Section 14.6 Fidelity Insurance. The required fidelity insurance shall afford coverage to protect against dishonest acts on the part of officers, directors, trustees, and employees of the Association and all other persons who handle or are responsible for handling funds of or administered by, the Association. The Managing Agent shall maintain fidelity insurance for its officers, employees, and agents who handle or who are responsible for handling funds of, or funds administered by the Association. All such fidelity insurance shall name the Association as an obligee and shall be not less than the estimated maximum of funds, including reserve funds, in custody of the Association at any time during the term of each policy, but, in no event, shall the aggregate amount of insurance be less than three months' aggregate assessments. The policy shall contain waivers of any defense based upon the exclusion of persons who serve without compensation from any definition of "employee" or similar expression. 156620.3 -27- 410 Section 14.7 Owners' Individual Insurance. An insurance policy issued to the Association does not prevent an Owner from obtaining insurance for the Owner's own benefit. Section 14.8 Use of Insurance Proceeds. Any portion of the Property for which insurance is required under this Article which is damaged or destroyed shall be repaired or replaced promptly by the Association pursuant to Article 15 unless: (a) this Declaration is terminated; (b) repair or replacement would be illegal under any state or local health or safety statute or ordinance; or (c) Owners holding at least 80% of the votes in the Association, including every Owner of a Home which will not be rebuilt, and Owners other than the Declarant holding at least 80% the votes in the Association excluding votes held by the Declarant, vote not to rebuild. The cost of repair or replacement in excess of insurance proceeds and reserves shall be a common expense of the Association, subject to assessment pursuant to Article 7. If all of the damaged or destroyed portions of the Property are not repaired or replaced: (i) the insurance proceeds attributable to Homes which are not rebuilt shall be distributed to the Owners of 0 those Homes, or to lienholders, as their interests may appear; and (ii) the remainder of the proceeds shall be distributed to all the N Owners or lienholders, as their interests may appear, in proportion 4 to their obligation to pay assessments. 00 c`) ARTICLE 15 DAMAGE AND REPAIR OR DAMAGE TO PROPERTY. Section 15.1 Initial Board Determination. In the event of damage to any Home or other property covered by the Association's insurance policy, the Board shall promptly, and in all events within 30 days after the date of damage, make the following determinations with respect thereto, employing such advice as the Board deems advisable: 15.1. 1 The nature and extent of the damage, together with an inventory of the improvements and property directly affected thereby. 15.1.2 A reasonably reliable estimate of the cost to repair the damage, which estimate shall, if reasonably practicable, be based upon two or more firm bids obtained from responsible contractors. 15.1.3 The expected insurance proceeds, if any, to be available from insurance covering the loss based on the amount paid or initially offered by the insurer. 15.1.4 The amount, if any, bywhich the estimated cost of repair exceeds the expected insurance proceeds, and the amount of the assessments that would have to be made against each Owner if the excess cost were to be paid as a common expense and assessed against all Owners in proportion to their interests in the Property. 156620.3 -28- 411 Section 15.2 Notice of Damage. The Board shall promptly, and in all events within 30 days after the date of damage, shall file a proof of loss statement with the insurance company if the loss is covered by insurance and abide by all terms and conditions of its insurance policies, unless the Board determines it would not be in the best interest of the Association to file a proof of loss. The Board shall then provide each Owner with a written notice describing the damage and summarizing the initial Board determinations made under Section 15.1. If the damage affects a material portion of the Property, the Board shall also send the notice to each Mortgagee; and if the damage affects a Home, the Board shall send the notice to the Mortgagee of that Home. If the Board fails to do so within the 30-day period, any Owner or Mortgagee may make the determinations required under Section 15.1 and give the notice required under this Section. Section 15.3 pefinitions: Damage, Substantial Damage, Repair. Emergency Work. As used in this Article: 15.3.1 Damage shall mean all kinds of damage, whether of slight degree or total destruction. 15.3.2 Substantial Damage shall mean that in 0 the judgment of a majority of the Board the estimated assessment determined under Section 15.1.4 for any Owner will exceed ten 1.4 percent of the full, fair market value of Owner's Home before the 4 damage occurred, as determined by the then current assessment for 01 the purpose of real estate taxation. in 0 15.3.3 Repair shall mean restoring the 0 improvements to substantially the condition they were in before 0 they were damaged, with each Home having substantially the same boundaries as before. Modifications to conform to applicable governmental rules and regulations or available means of construction may be made. 15.3.4 Emergency Work shall mean work that the Board deems reasonably necessary to avoid further damage or substantial diminution in value to the improvements and to protect the Owners from liability for the condition of the site. Section 15.4 Execution of Repairs. 15.4.1 The Board shall promptly repair the damage and use the available insurance proceeds therefor as provided in Section 14.8. If the cost of repair exceeds the available insurance proceeds the Board shall impose assessments against all Owners in proportion to their interests in the Property in an aggregate amount sufficient to pay the excess costs. 15.4.2 The Board shall have the authority to employ architects and engineers, advertise for bids, let contracts to contractors and others, and take such other action as is reasonably necessary to make the repairs. Contracts for the repair work shall be awarded when the Board, by means of insurance 156620.3 -29- • proceeds and sufficient assessments, has provided for paying the cost. The Board may authorize the insurance carrier to make the repairs if the Board is satisfied that the work will be done satisfactorily, and if such authorization does not contravene any insurance trust agreement or requirement of law. 15.4.3 The Board may enter into a written agreement with a reputable financial institution or trust or escrow company that the institution or company shall act as an insurance trustee to adjust and settle any claim for casualty loss in excess of $50,000, or for the institution or company to collect the insurance proceeds and carry out the provisions of this Article. Section 15.5 Damage Not Substantial. If the damage as determined under Subsection 15.3.2 is not substantial, the provisions of this Section shall apply. 15.5.1 Either the Board or the requisite p, number of Owners, within 15 days after the notice required under g} Section 15.2 has been given, may but shall not be required to, call N a special Owners' meeting in accordance with the Bylaws to decide ® whether to repair the damage. 15.5.2 Except for emergency work, no repairs shall be commenced until after the 15-day period and until after the conclusion of the special meeting if such a special meeting is 11.4 called within the 15 days. 15.5.3 A decision to not repair or rebuild may be made as provided in Section 14.8. Section 15.6 Substantial Damage. If the damage determined under Section 15.3.2 is substantial, the provisions of this Section shall apply. 15.6.1 The Board shall promptly, and in all events within 30 days after the date of damage, call a special Owners' meeting to consider repairing the damage. If the Board fails to do so within 30 days, then notwithstanding the provisions of the Bylaws, any Owner or first mortgagee of a Home may call and conduct the meeting. 15.6.2 Except for emergency work, no repairs shall be commenced until the conclusion of the special Owners' meeting. 15.6.3 At the special meeting, the following consent requirements will apply: (a) The Owners shall be deemed to have elected to repair the damage in accordance with the original plan with existing approved modifications unless the Owners of at least 80% of the total voting power of the Association other than that held by the Declarant, including every Owner of a Home which 156620.3 -30- • • • will not be rebuilt, have given their written consent not to repair the damage. (b) The unanimous consent of all Owners will be required to elect to rebuild in accordance with a plan that is different from the original plan with approved existing modifications. (c) In addition to the consent by the Owners specified above, any election not to repair the damage or not to rebuild substantially in accordance with the original plan with approved existing modifications will require the approval of eligible holders of first mortgages on Homes that have at least 51% of the votes subject to eligible holder mortgages. (d) Failure to conduct the special meeting provided for under Section 15.6.1 within 90 days after the date of damage shall be deemed a unanimous decision to repair the damage in accordance with the original plan with approved existing modifications. Section 15.7 Effect of Decision Not to Repair. In the event 0 of a decision under either Section 15.5.3 or 15.6.3 not to repair 0'y the damage, the Board may nevertheless expend so much of the insurance proceeds and common funds as the Board deems reasonably 11.1 necessary for emergency work (which emergency work may include but is not necessarily limited to removal of the damaged improvements and clearing, filling, and grading the land) , and the remaining 0 funds, if any, and the property shall thereafter be held and LI distributed as provided in Section 14.8. ARTICLE 16 MISCELLANEOUS Section 16.1 Notices. 16.1.1 Any written notice or other documents as required by this Declaration, may be delivered personally or by certified mail. If by mail, such notice, unless expressly provided for herein to the contrary with regard to the type of notice being given, shall be deemed to have been delivered and received 48 hours after a copy thereof has been deposited in the United States mail, postage prepaid, addressed as follows: 15.1.1.1 If to a Member, other than Declarant: to the mailing address of such Member maintained by the Association, pursuant to the Bylaws. 15.1.1.2 If to Declarant, whether in its capacity as a Member, or in any other capacity, the following address (unless Declarant shall have advised the Board in writing of some other address) : 156620.3 -31- • • • • • • • • Valley Development Associates c/o Environmental Development Corporation P. O. Box 1574 Bellevue, Washington 98009 15.1.1.3 Prior to the organization of the Association, notices to the Association shall be addressed as set forth above. Thereafter, notices to the Association shall be addressed to the official mailing address furnished by written notice from the Association. In addition, from and after the organizational meeting, notice of the address of the Association shall be given by the Board to each Owner, within a reasonable time • after the Board has received actual notice of such Owner's purchase of a Lot. 0 Section 16.2 Conveyance: Notice Required. The right of an 73 Owner to sell, transfer, or otherwise convey his or her Lot shall u not be subject to any right of approval, disapproval, first refusal, or similar restriction by the Association or the Board, or A anyone acting on their behalf. If a Lot is being sold, the Board 0°) shall have the right to notify the purchaser, the title insurance n company, and the closing agent of the amount of unpaid assessments 0 and charges outstanding against the Lot, whether or not such 0 information is requested. Section 16.3 Successors and Assigns. This Declaration shall be binding upon and shall inure to the benefit of the heirs, personal representatives, successors and assigns of Declarant, and the heirs, personal representatives, grantees, lessees, sublessees and assignees of the Member. Section 16.4 Joint and Several Liability. In the case of joint ownership of a Lot, the liability of each of the Owners thereof in connection with the liabilities and obligations of Owners, set forth in or imposed by this Declaration, shall be joint and several. Section 16.5 Mortgagee's Acceptance. 16.5.1 This Declaration shall not initially be binding upon any Mortgagee of record at the time of recording of said Declaration but rather shall be subject and subordinate to said Mortgagee's Mortgage. 16.5.2 Declarant shall not consummate the conveyance of title of any Lot until the Mortgagee of the Lot shall have accepted the provisions of this Declaration and made appropriate arrangements for partial release of the Lot from the lien of the Mortgage. The issuance and recording of the first such partial release by said Mortgagee shall constitute its acceptance of the provisions of this Declaration and the status of the Lots remaining subject to its Mortgage as well as its acknowledgment that such appropriate arrangements for partial release of Lots has been made; provided, that, except as to Lots so released, said Mortgage shall remain in full force and effect as to the entire property. 156620.3 -32- • • • I ^ , . • SII Section 16.6 Severability. The provisions hereof shall be deemed independent and severable, and the invalidity or partial invalidity or unenforceability of any one provision or portion thereof shall not affect the validity or enforceability of any other provision hereof. Section 16.7 Construction. The provisions of this Declaration shall be liberally construed to effectuate its purpose of creating a uniform plan for the operation and maintenance of the Property. Section 16.8 Captions. Captions given to the various articles and sections herein are for convenience only and are not intended to modify or affect the meaning of any of the substantive provisions hereof. Section 16.9 Effective Date. The Declaration shall take effect upon recording. IN WITNESS WHEREOF, Declarant has executed this Declaration on the day and year first herein above written. DECLARANT: VALLEY DEVELOPMENT ASSOCIATES L.P. , a Washington limited partnership By Environmental Development CI Corporation, Its General Partner C) 41111N6- - CO omas W. Ichelson in Its President U, CD 1566203 -33- • • 1 STATE OF WASHINGTON ) ) ss. COUNTY OF KING ) I certify that I know or have satisfactory evidence that TOM ICHELSON is the person who appeared before me, and said person acknowledged that said person signed this instrument, on oath • stated that said person was authorized to execute the instrument and acknowledged it as the President of Environmental Development Corporation, which is the general partner of VALLEY DEVELOPMENT ASSOCIATES L.P. , a Washington limited partnership, to be the free and voluntary act of such limited partnership for the uses and purposes mentioned in the instrument. Dated this / 4-17- day of 1 , 199 (57.--- /,/ ,// MRofN ) Joan Hollingswor ORVIAL (Legibly Print or Stamp Name of Notary) ' MR STM Notary public in and for the stat of 1b yP*-Stateof Iffnignon Washington, residing at Mpcommiesbn E Ou u 1NO My appointment expires /71>/f 8 rt rl • CD 156620.3 -34- ► • . • • • EXHIBIT A DESCRIPTION OF ASSOCIATION MAINTENANCE AREA • The lawns, gardens, sidewalks and landscaped areas of the Lots, except those portions which the Board designate by rule, regulation or agreement be maintained by the Lot Owner. • The private drainage easement areas shown on the Plat. • The exteriors of the Homes, except the windows and any other portions the Board may by rule, regulation or agreement be maintained by the Lot Owner. • • The irrigation system for the Lots. • Any portions of the common utility systems not owned, by a public or private utility company up to the connection to the individual Lot. • • • Any other improvements on the Lots except those items . • which the Board may designate by rule, regulation or agreement be maintained by the Lot Owner. LI C� 156620.3