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HomeMy WebLinkAboutCOVENANTS - 03-00019 - Green Gables II - Three 4-Plex BuildingsGREEN GABLE ESTATES II DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS FOR GREEN GABLE ESTATES II 1. CREATION OF COVENANTS, CONDITIONS, EASEMENTS AND 1.1. THIS DECLARATION is made and entered into by RANDY WEBB and JILL L. WEBB, husband and wife and KARL B. PETERSON and CHRIS M. PETERSON, husband and wife, ("the Declarant"), pursuant to the provisions of Idaho Code Title 55, Chapter 15. 1.2. 'THE REAL PROPERTY: Declarant is the actual and record owner of the real property situated in the City of Rexburg, County of Madison, State of Idaho, the surface of which as: Lot 1, Block 1, Green Gable Estates II, Division No. 1, to the City of Rexburg, County of Madison, State of Idaho. 1.3. PROPERTY IN THE PROJECT: The property which is the subject of this Declaration consists of the above described real property together with certain improvements heretofore or hereafter constructed upon that real property and all the Common Areas of the Project. 1.4. CREATION OF OWNERSHIP: Declarant intends to and does hereby create a Project known as "Green Gable Estates II" according to the ("Plat") recorded as Instrument No. _ , Madison County records. The Declarant hereby declares its intent to and does hereby create a separate ownership of the Project. All such ownership shall be governed by and be subject to both the provisions of this Declaration and all amendments that may hereafter be made hereto and the Act as in effect on the date of the recording of this Declaration. 1.5. PLAT: The plat, as described above, identifies each Unit, its relative location and approximate dimension, with designation thereon of all areas which shall be Common Areas. 2. DEFINITIONS: The terms used herein, unless otherwise defined herein, shall have the meanings given such terms in the Act. 2.1. "Act" means the Idaho Code Title 55, Chapter 15. Green Gables II, 2 td/Gable11Cov (04/02/03) 2.2. "Association" means Green Gable Estates II Owners Association, Inc., a non-profit corporation composed of all Owners, including all present and future Owners, and their successors and assigns. 2.3. "Board of Managers" or "Board" shall be the Board of Managers of the Green Gable Estates II Owners Association, Inc., and shall manage the Project. 2.4. "Common Area" means the entire Project excepting all Units. All Common Areas shall be general Common Areas and designated on the plat. 2.5. "Common Expense" means any amounts assessed against the Owners pursuant to the Act, this Declaration, or such rules and regulations pertaining to the Project as the Board of Managers may from time to time adopt, and pursuant to such other determinations and agreements lawfully made and/or entered into by the Board. Common Expenses shall specifically include but not be limited to, all charges or assessments for the care, maintenance, and/or repair of the Project and for the common good andbenefit of the Unit Owners. Such charges shall be to each Owner one - nineteenth (1/19th) each. 2.6. "Lease" means any agreement for the leasing or rental of property. 2.7. "Mortgage" means any mortgage, deed of trust, or other security instrument by which a Unit or any part thereof is encumbered. 2.8. "Mortgagee" means any person, bank, savings and loan association, established mortgage company, or other entity chartered under federal or state laws, or any successor to the interest of such, named as Mortgagee, trust beneficiary, or creditor under any Mortgage, as Mortgage is defined in the immediately preceding subparagraph. 2.9. "Owner" or "Unit Owner" means any person who holds an ownership interest in a Unit in the Project which is reflected in the records of the Recorder's Office of Madison County, Idaho. "Owner" shall refer to the record Owner, whether one or more persons or entities, of fee simple title to any Unit, including contract Sellers, but excluding those having such interest merely by security for the performance of an obligation. "Owner" does not refer to any Mortgagee, as herein defined, unless such Mortgagee has acquired title pursuant to foreclosure or any proceeding in lieu of foreclosure. If ownership of a Unit is held by one or more persons or entities, the multiple Owners of that Unit shall be deemed a single Owner for purposes of voting in meetings of the Association. 2.10. "Owner's Interest" means the estate of an Owner which estate consists of a separate interest in a Unit with an undivided one -nineteenth (1/19th) interest, in common with all other Owners of the Common Areas and appurtenances thereto of Green Gables II, 3 td/GablellCov (04/02/03) the Project. 2.11. "Project" means the entirety of the property divided or to be divided into Units including Common Areas. 2.12. "Unit" means those elements of the Project which an Owner owns separately and are as shown on the plat and which is not a part of the Common Area. The boundary lines of each Unit are the exterior lines as shown on the Plat. Each Unit consists of the real property and improvements thereon lying within the boundaries of each Unit, in fee simple title. Each Unit shall extend to the center of anyapplicable common wall between the Units. Maintenance, repair, and/or replacement of any applicable common walls (between Units) shall not be a common expense but shall be split by the Unit Owners sharing such wall. No Unit shall be split, partitioned or condominiumized into smaller Units without consent of all Board. 3. TITLE OF UNITS: 3.1. LEGAL DESCRIPTIONS OF UNITS: For purposes of conveying, mortgaging, or otherwise affecting title, any Unit may be legally described by its identifying number as shown on the Plat. Such legal description shall be construed - to describe the Unit and the appurtenant undivided interest in the Common Areas and to incorporate all the rights and limitations incident to the ownership of a Unit in this Project. Such legal description shall be substantially as follows: Unit No. , Green Gable Estates II, to the City of Rexburg, County of Madison, State of Idaho, as per the duly recorded plat thereof. 3.2. CONVEYANCES AND FORM OF HOLDING UNITS: The Units in the Project may be conveyed and recorded as individual properties capable of independent usage, each having its own exit to the Common Areas of the Project. Each Unit may be held in any traditional form of holding real property interests including, but not limited to, community property, joint tenancy, or tenancy in common. The Owners of the respective Units shall have the absolute right to lease the areas within each Unit provided the lease is made subject to the rules and regulations made by the Board. 4. NATURE OF OWNERSHIP: 4.1. OWNERSHIP OF COMMON AREAS: Each Owner shall own an undivided one -nineteenth (1/19th) interest in the Common Areas as a tenant in common with all the other Owners of the property, and, except as otherwise limited in this Declaration and/or the rules and regulations adopted by the Board, shall have the right to use the Common Areas for all purposes incident to the use and occupancy Green Gables II, 4 Id/GablellCov (04/02/03) of his Unit and such other incidental uses permitted by this Declaration, which right shall be appurtenant to and run with his Unit. 4.2. COVENANTS APPURTENANT TO UNITS: All rights or interest and all obligations or restrictions of an Owner created hereunder shall be deemed appurtenant to his Unit and shall not be separable therefrom. Any conveyance or encumbrance of a Unit shall also be deemed a conveyance or encumbrance of those appurtenant rights or interests even though such rights or interests are not expressly referred to in such conveyance or encumbrance. 4.3. NONSEPARABILITY OF COMMON AREA: The Common Areas shall remain undivided and shall not be separated from the Units to which they appertain. No Owner shall bring any action for partition or division of interest in the Common Areas or of Units from their appurtenant interest in Common Areas. Notwithstanding the foregoing, the Board may assign specific parking spaces to individual units. 4.4. COVENANTS TO RUN WITH THE LAND: This Declaration and all covenants, restrictions, limitations, easements, conditions, and uses as herein provided for shall constitute covenants to run with the land hereby submitted to the Project and shall be a burden and/or a benefit to the Declarant, its successors and assigns; and to any person acquiring any interest in the above described real property, and to their heirs, executors, administrators, personal representatives, successors and assigns. 5. EASEMENTS: 5.1. ENCROACHMENTS: In the event that, by reason of the construction, reconstruction, settlement or shifting of a building, any part of a building, or any part of any building encroaches or shall hereafter encroach upon any part of an easement, or Common Area, if by reason of the design or construction of utility systems, any main pipes, ducts, or conduits serving more than one Unit encroach or shall hereafter encroach upon any part of any Unit, valid easements for the maintenance of such encroachment and for the use of such adjoining space shall exist for the benefit of such Unit, so long as all or any part of the building or buildings containing such Unit shall remain standing; provided, however, that in no event shall a valid easement for any encroachment to be created in favor of the Owner of any Unit or in favor of the Owner of the Common Area if such encroachment occurred subsequent to the original construction by Declarant and/or is due to the willful conduct of said Owner or Owners. 5.2. EASEMENTS FOR CERTAIN UTILITIES: The Board, as hereinafter provided, may grant easements from time to time for utility purposes for the benefit of the Project (so long as such Easement does not unreasonably restrict the Green Gables II, 5 td/GablellCov (04/02/03) use and/or enjoyment of such Unit), including the right to install, lay, maintain, repair and replace water mains and pipes, sewer lines, gas mains, telephone wires and equipment, and electrical conduits, and wires over, under, along and on any portion of the Project as necessary; and each Owner hereby grants the Board an irrevocable power of attorney to execute, acknowledge, and record, for and in the name of such Owner, such instruments as may be necessary to effectuate the foregoing. 5.3. EASEMENTS TO RUN WITH LAND: All easements and rights described herein are easements appurtenant, running with the land, perpetually in full force and effect, and at all times shall inure to the benefit of and be binding on the undersigned, its successors and assigns, and any owner, purchaser, mortgagee and other person having an interest in the Project or any part thereof shall be subject thereto as though such easements and rights were recited fully and completely set forth in their entirety. No reference to such easements and rights shall be necessary to create or reserve such easements or rights referred to herein in any deeds of conveyance, mortgages or trust deeds or other evidence of obligation. 6. GREEN GABLE ESTATES II OWNERS ASSOCIATION CREATED: Simultaneously with this Declaration, Declarant shall create and form GREEN GABLE ESTATES II OWNERS ASSOCIATION, INC., a non-profit corporation. The purposes and powers of the Association shall be all of the purposes and powers as set forth in the Articles of Incorporation subject to the provisions of the By Laws of the Corporation. A copy of the Articles of Incorporation and the By Laws are attached hereto as Exhibit "A" and "B", respectively and incorporated herein as though set forth in full. The Association shall perform the duties and enforce the covenants and restrictions set forth in this Declaration. 7. RULES AND REGULATIONS: 7.1. ADMINISTRATIVE RULES AND REGULATIONS: Subject to the approval of Randy Webb and Karl B. Peterson (or Declarant's agent if otherwise named), until resignation or until Declarant no longer owns any Units in the Project, the Board shall have the power to adopt and establish by resolution such building, management, use, and operational rules as it may deem necessary for the maintenance, operation, management, occupation, and control of the Project. 7.2. COMPLIANCE: All Owners shall comply with the adopted by the Board provisions of this Declaration and the administrative rules and regulations adopted by the Board of Managers and shall require such compliance from their children, tenants, guests, employees and any other person whom they invite upon the Project. All agreements, decisions and determinations lawfully made by the Board shall be deemed to be binding on all Owners and shall inure to their benefit. Each Owner, any group of Owners, or the Board shall have standing authority unless otherwise provided, to enforce by any legal means, including suit for specific performance, injunctive relief or damages, the provisions of the Declaration and any Green Gables II, 6 td/GablellCov (04/02/03) duly adopted decisions or resolutions of the Board. 7.3. RESIDENTIAL USES: No Unit shall be used except for residential purposes. No buildings shall be erected, altered, placed, or permitted to remain on any Unit other than residential dwellings and associated garages and/or resident storage buildings, unless approved by the Board. Mobile homes, move -on homes, manufactured homes or log homes shall not be permitted. 7.4. PRIOR APPROVAL: No building, fence, wall, or other item of permanent nature shall be constructed, erected, placed, or altered on any Unit until construction plans, building specification, Unit plan reflecting location of the improvements (including side yards, setbacks, topography and finish grade location), quality of workmanship, materials, and harmony of external design and color has been approved by the Board. Subject to the Board approval, all other buildings shall be constructed harmonious in style and quality to the existing buildings on any Unit. 7.5. CONSTRUCTION: Upon transfer of a Unit from Declarant, construction of the residence thereon shall be commenced (deemed to be upon issuance of the building permit) within one (1) year of such transfer. Completion of construction of the residence (deemed to be upon issuance of the Certificate of Occupancy), shall be completed within one (1) year from the date of commencement of construction unless otherwise approved by the Board. 7.6. RE -SUBDIVISION: No Unit shall be subdivided or re -subdivided from the Unit size and dimension as reflected on the plat existing on the date these covenants are recorded without the approval of the Board. 7.7. FENCES: No fence or wall shall be erected, placed, or altered on any Unit nearer to any street than allowed by the Board. All fences shall be installed at the Unit Owner's expense. 7.8. LANDSCAPING: The installation of lawn and landscaping shall be at the Unit Owner's expense and shall be completed within one (1) year of the date of transfer from Declarant. All landscaping (including Sprinkler System) shall be as approved by the Board. Maintenance of the landscaping and sprinkler system shall be a common expense. 7.9. NUISANCE: No noxious, offensive, or annoying activity, nor immoral, improper, or unlawful use, shall be allowed or permitted on any parcel. Any activity or use which is or becomes an annoyance and/or nuisance to, or interferes with, the peaceful possession and proper use of any parcel, shall be prohibited. 7.9.1. The terms 'offensive" and/or "improper" shall include the open storage of junk and/or non-operating automobiles, trucks, or other vehicles, and/or other forms of bulk storage not normally associated with the residential Green Gables II, 7 td/GablellCov (04/02/03) use of property. Storage of such items may be permitted if confined to locations and defined areas enclosed by a building, all as approved by the Board. A fence shall not qualify as a building for such purposes. 7.9.2. Without limiting the generality of any of the foregoing provisions, no external speakers, horns, whistles, bells or other sound devices used exclusively for security purposes, shall be located, used, or placed upon any parcel. 7.10. CLEAN CONDITION: Each Unit and all improvements thereon shall be kept in a clean and sanitary condition and no rubbish, refuse, or garbage shall be allowed to accumulate, nor any fire hazard to exist. Trash, garbage or other waste shall not be kept, except in sanitary containers and equipment, nor allowed to become offensive or a nuisance. The Board may place additional restrictions on the placement of such containers and equipment. 7.11. OWNER'S OBLIGATION TO MAINTAIN AND REPAIR: Each Owner, at his expense, shall keep his Unit in good order, condition, and repair and in a clean and sanitary condition, and shall do all redecorating and painting which may at any time be necessary to maintain the good appearance of his Unit. Each Owner shall repair all injury or damages to the Project caused by the deliberate, negligent or - careless action or inaction of such Owner, his agents, employees, guests, and/or invitees and all such repairs, redecorating and painting shall be of quality and kind equal to the original work and as approved by the Board. 7.12. APPEARANCE: No Unit or common area or portions thereof shall be neglected or permitted to fall into an unsightly, displeasing or unattractive state, or permitted to be overgrown with weeds or strewn with rubbish. The Board shall have the power and shall be authorized at its discretion and at the request of any other Owners, to remove or to take any other action upon such premises to remove rubbish, garbage, overgrown weeds or such other unsightliness without responsibility or liability to the complaining Owners, and at the expense of the failing or neglecting Owners. 7.13. DECLARANT'S USE OF THE PROJECT: Until the Declarant has completed and sold all Units in the Project, the Owners and the Association shall not interfere with the sale of the Units. The Declarant may make such use of the unsold Units and grounds as may facilitate such completion and sale, including but not limited to, the maintenance of a sales office, and showing of the Project, the display of signs, and access for construction. 7.14. TEMPORARY RESIDENCES: No structure of a temporary character, trailer, basement, tent, shack, garage, bam, or other outbuilding shall be used on any Unit at any time as a residence either temporarily or permanently. All construction of non-residential buildings or other structures shall be completed not later than twelve Green Gables II, 8 td/GablellCov (04/02/03) (12) months from the date of commencement of construction thereof or date of building pen -nit therefor, whichever occurs first. 7.15. LEASING OF UNITS: The Owners of the respective Units shall have absolute right to lease the spaces within the Unit. However, any such lease shall be subject to the covenants and conditions of this Declaration and any rules and regulations made by the Board. Any breach of these covenants and conditions or of the Rules and Regulations shall constitute a default under the lease. 7.16. EASEMENTS: Easements for the installation and maintenance of utilities and drainage are reserved as shown on the recorded plat or as described herein. No building shall be located within the said easements. 7.17. COMMON AREAS: Subject to the limitations contained in this Declaration, each Owner shall have the nonexclusive right to use and enjoy the Common Areas. The Common Areas shall be used only for the purposes for which they are intended, i.e., the furnishing of access, parking, services and facilities for the enjoyment and use of the Units. 7.18. SIGNS: Except for the following described signs, no sign of any kind - shall be displayed to the public view on any Unit without the approval of the Board: one sign of not more than five (5) square feet advertising the property for sale or rent; or signs used by a builder to advertise the property during the construction and sales period. 7.19. ANIMALS: No animals, livestock, or poultry of any kind shall be raised, bred, or kept on any Unit, except not more than a total of three (unless approved by the Board) dogs, cats, and/or other household pets may be kept,ron vided they are not kept, bred, or maintained for any commercial purposes, nor allowed to become a nuisance or disturbance to the neighborhood. 7.20. RECREATIONAL AND/OR OTHER VEHICLES: No recreational vehicles nor any non-operating vehicles shall be kept closer to any street than the applicable front or side set -back requirements. Any such vehicle shall be kept behind a fence to screen the visibility thereof from the street. No house trailer, motor home, boat, camper or other recreational vehicle shall be allowed to remain in front of a unit, on a street or driveway for a period of longer than 72 hours. 7.21. ANTENNA/SATELLITE: Any antenna of any type greater than five (5) feet in height must be approved by the Board. Satellite dishes shall not be allowed closer to any street than the rear line of the dwelling unit. No satellite dishes larger than twenty inches (20") in diameter shall be allowed. 7.22. KINDERGARTENS AND SCHOOLS: No Unit or building thereon Green Gables II, 9 td/GablellCov (04/02/07) shall be used as a school, kindergarten, or child care center. 7.23. BOARD'S REVIEW AND DECISION: Any question or dispute as to compliance with these Covenants shall be submitted to the Board. The Board shall review the matter and make a determination within thirty (30) days. The Board's determination on any matter shall be final and binding upon all Owners and the Owner's agents, tenants, guests and invitees. 8. DESTRUCTION. DAMAGE PARTITION AND TERMINATION• 8.1. ABANDONMENT: The Declarant, the Board of Managers, or Owners shall not abandon or terminate the Project without the prior written approval of any mortgagee holding or having a mortgage on a Unit within the Project. 8.2. DAMAGE OR DESTRUCTION: In the event the Common Areas of the Project are destroyed or damaged to the extent of seventy-five percent (75%) or less than the' value thereof, the Owners shall be responsible for the repairing, rebuilding, and/or restoring the same to the condition it was in immediately prior to such destruction or damage, and may be entitled to use for such purposes the proceeds of any and all insurance policies which the Association may have had in force on said - premises as of the date of such destruction or damage. In the event the Common Areas of the Project are destroyed or damaged to the extent of more than seventy-five percent (75%) of the value thereof, the Association shall, at a meeting duly called for that purpose, determine whether or not the Project should be rebuilt, repaired or disposed of. Unless Owners entitled to not less than two-thirds (2/3rds) of the voting power of the Association agree to the withdrawal of the Project from the Provisions of the Act and to its subsequent disposal, the Project shall be repaired, rebuilt or restored to the same condition it was in immediately prior to the destruction or damage. In the event the cost of such repairing, rebuilding, or restoring shall exceed the amount realized from the proceeds of the Association's insurance policies as herein provided, the Owners shall contribute to such cost in relation to their percentage of ownership in those parts of the Project to be repaired or rebuilt. Any institutional holder of a first mortgage on any Unit so affected shall be notified by written notice by the Board. 8.3. CONDEMNATION: In the event of taking of a Unit or any portion thereof by condemnation or by eminent domain, or is otherwise sought to be acquired by an authority, then the mortgage holder of any mortgage shall be given written notice and nothing herein shall entitle an Owner of a Unit or any other party to priority over such mortgage holder with respect to the distribution to such Unit of the proceeds of any such award or settlement. 8.4. NO PARTITION: Subsection C of Idaho Code Section 55-1511 shall have no application to the Project. A Unit shall not be partitioned as between persons Green Gables II, 10 td/GablellCov (04/02/03) having an interest therein, but if grounds for such partition exist at law or in equity, the Unit shall be sold as a Unit and the proceeds divided in accordance with law. 8.5. BOARD OF MANAGERS, ATTORNEY IN FACT: All of the Owners irrevocably constitute and appoint the Board as their attorney in fact for the purpose of dealing with the Project if it is damaged or destroyed. Acceptance by any grantee of a deed from the Declarant or from any Owner shall constitute such appointment; however, the Board shall not exercise this power of attorney until two- thirds (2/3rds) or more of the voting power of the Association votes in favor of having it do so and further until Owners representing two-thirds (2/3rds) or more of the voting power of the Association have executed a certificate certifying that use of such power of attorney has been authorized and is properly exercisable under this Declaration and such certificate has been placed of record. 9. INSURANCE: 9.1. COVERAGE: The Board may secure and maintain the following insurance coverage: 9.1.1. A multi -peril type policy providing coverage for fire insurance with extended coverage endorsements for the full insurable replacement cost of the Common Areas and any and all interests appurtenant or associated therewith. 9.1.2. A policy or policies insuring the Board and the Owners against any liability arising from the ownership, use or maintenance of any portion of the Project, including use of Units or Common Areas by anyone. Limits of liability under such insurance shall in no event be less than $100,000/$300,000 for bodily injury; and shall not be less than $250,000.00 for property damage for each occurrence. Such limits and coverage shall be reviewed at least annually by the Board and amended if inadequate. Said policy or policies shall deny subrogation rights against Owners. 9.1.3. Compensation to the extent necessary to comply with any applicable laws. 9.1.4. Insurance for such other risks as are or hereafter may customarily be covered with respect to other Projects similar in construction, design, and use. 9.2. INSURED: The Association shall be named as insured under such policy for the use and benefit of the individual Owners. 9.3. MORTGAGEE CLAUSE: Each such policy or policies shall provide for a standard mortgagee clause in favor of any mortgagee of each Unit. Any proceeds payable thereunder shall be payable to the Association for the use and benefit of the mortgagee, as their interests may appear. The Mortgagee Clause shall provide for notice to said Mortgagee ten (10) days in advance of the effective date of any Green Gables II, 11 td/GablellCov (04/02/03) reduction in or cancellation of the policy. 9.4. INSURANCE UNDERWRITING: Each hazard policy must be written by an insurance carrier which has a financial rating in Best's Insurance Reports of BBB+ or better. 9.5. COMMON EXPENSE: The cost of any Insurance policy(s) described herein shall be a common expense. Each Owner shall, without prejudice, have the right to insure his own Unit for his own benefit in any amount satisfactory thereto. However, no such policy shall decrease in any way the amount which the Association on behalf of the Owners shall realize under the policies so authorized. 9.6. AUTHORITY TO ADJUST: The Board shall have exclusive authority to adjust fire and casualty losses under insurance policies maintained by it but must keep in force such coverage for at least eighty percent (80%) of the replacement cost of the Common Areas and associated interests thereto. However, any claims as to any personal liability of any Owner arising out of the ownership, use, operation, or management of the common areas may be compromised or settled as to his portion of any such claim by any Owner without prejudice to the remaining balance thereof and without the same constituting evidence for or against any such claimant. 10. AMENDMENT: Upon the approval of Karl B. Peterson and Randy Webb (until they no longer own any Units in the Project) this Declaration and the covenants, restrictions, and provisions contained herein may be altered, amended or added to at any duly called Association meeting; provided: 10.1. NOTICE: That the notice of the meeting shall contain a full statement of the proposed amendment; 10.2. APPROVAL: That the amendment shall be approved by two-thirds (2/3rds) of the Owners in number and common interest, and 10.3. RECORDATION: Said amendment shall be set forth in a duly recorded amendment. 11. BINDING EFFECT: The provisions of this Declaration and the provisions of the Articles of Incorporation, By -Laws and Rules and Regulations are binding upon any and all persons acquiring any interest in the above described real property and to their heirs, executors, administrators, personal representatives, successors and assigns. 12. CONSTRUCTION: 12.1. SEVERABILITY: In the event that a phrase, sentence, clause, or paragraph contained herein should be invalid or should operate to render this Green Gables II, 12 td/GablellCov (04/02/03) agreement invalid, this Declaration shall be construed as if such invalid phrase, sentence, clause, or paragraph had not been inserted. 12.2. GENDER AND NUMBER: The singular, wherever used herein, shall be construed to mean the plural when applicable, and the necessary grammatical changes required to make the provisions hereof apply either to corporations or individuals, men or women, shall in all cases be assumed as though in each case fully expressed. 12.3. WAIVERS: No provisions contained herein shall be deemed to have been waived by reason of any failure to enforce it, irrespective of the number of violations which may occur. 12.4. TOPICAL HEADINGS: The topical headings of the paragraphs contained herein are for convenience only and do not define, limit or construe the contents of the paragraphs herein. 12.5. EFFECTIVE DATE: This Declaration shall take effect upon recording hereof. VIN WITNESS WHEREOF, the parties hereto have executed this Agreement on Z -p3 DECLARANT: Karl B. PetersonChris Green Gables II, 13 td/GablellCov (04/02/03) Jill If. .b on STATE OF IDAHO ) SS. COUNTY OF BONNEVILLE ) On ql2j,, 63 before me, the undersigned, personally appeared Randy Webb and Jift L. Webb, known or identified to me to be the persons whose names are subscribed to the within instrument, NOTARY PUBLIC i i A TRINA DAVENPORT STATE OF • STATE OF IDAHO and acknow dged to me that they executed the same. NOTARY FOR THE STA E OF ID HO Commission Expires: ?�0L ) SS. COUNTY OF BONNEVILLE ) On 0 3 before me, the undersigned, personally appeared Karl B. Peterson and Chris Peterson, known or identified to me to be the persons whose names are subscribed to the within instrument, and acknowledged to me that they executed' the same. NOTARY PUBLIC TRINA DAVENPORT STATE OF •• • Green Gables II, 14 td/GablellCov (04/02/03) I' NOTARY FOR TIM STATE OF IDAHO Commission Expires: EXHIBIT "A" ARTICLES OF INCORPORATION OF GREEN GABLES ESTATES II OWNERS ASSOCIATION, INC. an Idaho Non -Profit Corporation KNOW ALL MEN BY THESE PRESENTS: That we, the undersigned, acting as the incorporators under the provisions of the Idaho Non -Profit Corporation Act, do hereby adopt the following Articles of Incorporation for such corporation. 1. NAME: The name of this corporation shall be: GREEN GABLES ESTATES II OWNERS' ASSOCIATION, INC., and said corporation is and shall be a non-profit corporation. 2. THE PURPOSE OF THE CORPORATION SHALL BE: 2.1. To care for the improvements and maintenance of the property, buildings, improvements, and landscaping, including but not limited to: the exterior decoration and appearance of the buildings, fencing, mowing of lawns, and snow removal, in Green Gables Estates II, a project established under the provisions of Idaho Code Title 55, Chapter 15. 2.2. To aid and cooperate with the Owners of said Project in the enforcement of all conditions, covenants and restrictions on or appurtenant to their property. 2.3. Exercise any and all power that may be delegated to it from time to time by the Owners of said Project. 2.4. The Association shall not engage in politics or pursue any political purpose. 3. POWERS: Pursuant to the purposes of the Corporation, the Corporation is hereby authorized and empowered to do and act, and to carry on any business authorized by the Corporation and the State of Idaho, as necessary to compliment and augment the general purposes of the Corporation. 4. EXISTENCE: This Corporation shall have perpetual existence. ARTICLES OF INCORPORATION - 1 td/GreenllArt (04/02/03) 5. MEMBERSHIP: 5.1. Membership shall be composed of and restricted to persons or duly organized entities under the laws of the State of Idaho who own Units in Green Gables Estates II, pursuant to Idaho Code Title 55, Chapter 15, an in the City of Idaho Falls, hereinafter referred to as "The Project". 5.2. No Membership certificates shall be issued. "Member", as referred to herein, shall mean all the Owners of each Unit. If ownership of a Unit is held by one or more persons or entities, the multiple Owners of the Unit shall be deemed a single Owner or Member for purposes of voting in meetings of the Corporation. The voting power of each Unit shall be equal and each Member shall be entitled to cast one vote (per Unit owned) in any Owners Meetings. 5.3. Membership interests shall be transferred upon transfer or disposition of a Member's interest or ownership in and to a Unit. Membership qualifications shall be further delineated, described, and resolved by the Board of Managers. 5.4. If, following a hearing after due notice, the Board of Managers shall find that a Member has refused to or has not paid all sums due to the Corporation within - thirty (30) days after demand for the same, it may suspend his rights as Member or terminate his Membership. On termination of such Membership in the Corporation all rights and interest of such Member in the Corporation shall cease. 5.5. A Member may not withdraw from Membership at any time unless the Project is terminated. 6. REGISTERED AGENT: The name of the initial registered agent and the location of the office of the Corporation are: Karl B. Peterson 3890 Taylorview Lane Ammon ID 83406 7. INCORPORATORS AND INITIAL DIRECTORS AND/OR MANAGERS: The management of the Corporation shall be carried out by a Board of Managers consisting of four (4) persons unless expanded by and as allowed by the By -Laws. The Incorporators and Initial Board of Managers are and shall be: Karl B. Peterson Incorporator and Manager 3890 Taylorview Lane Ammon ID 83406 ARTICLES OF INCORPORATION - 2 td/GreenllAn (04/02/03) Chris Peterson 3890 Taylorview Lane Ammon ID 83406 Randy Webb 2526 Mesa St. Idaho Falls ID 83401 Jill Webb 2526 Mesa St. Idaho Falls ID 83401 Incorporator and Manager Incorporator and Manager Incorporator and Manager The Term of each Manager shall be as set forth in the By -Laws of the Corporation. 8. ASSESSMENTS: The Board of Managers shall determine the amount and method of payment of Assessments, in accordance with the By -Laws of the Corporation. 9. DISSOLUTION/LIOUIDATION: In the event of the dissolution and liquidation of this Corporation, to the extent allowed or permitted under applicable laws, the property and assets of the Corporation shall be, as determined by the Board of Managers, distributed to or sold and the proceeds of such sales distributed to any other corporation(s) organized and operating for the same purposes for which the Corporation is organized and operating. In the event no other corporation is so qualified, the proceeds shall be distributed prorata one - nineteenth (1/19th) each, to the Members of the Corporation. IN WITNESS WHEREOF, the undersigned here executed these Articles of Incorporation in duplicate and certify to the truth of the facts herein. Dated: Karl B. Peterson Chris Peterson Randy Webb Jill Webb ARTICLES OF INCORPORATION - 3 td/GreenllArt (04/02/03) STATE OF IDAHO ) SS. COUNTY OF BONNEVILLE ) On , before me, the undersigned, personally appeared Karl B. Peterson and Chris Peterson, known or identified to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. NOTARY FOR THE STATE OF (SEAL) Commission Expires: STATE OF IDAHO) ) SS. COUNTY OF BONNEVILLE ) On , before me, the undersigned, personally appeared Randy Webb and Jill Webb, known or identified to me to be the persons whose name are subscribed to the within instrument, and acknowledged to me that they executed the same. - (SEAL) ARTICLES OF INCORPORATION - 4 td/GreenllArt (04/02/03) NOTARY FOR THE STATE OF Commission Expires: EXHIBIT "B" BY-LAWS OF GREEN GABLES ESTATES II OWNERS ASSOCIATION, INC. 1. OFFICES: 1.1. PRINCIPAL OFFICE: The principal office of the Corporation in the State of Idaho shall be located at the address designated in the most recent annual report filed with the Idaho Secretary of State. The Corporation shall maintain at its principal office a copy of the corporate records. 1.2. REGISTERED OFFICE AND AGENT: The registered office of the Corporation required by law to be maintained in the State of Idaho may, but need not, be identical with the principal office. The Corporation may change its registered office or registered agent from time to time in the manner required by law. 2. MEMBERSHIP: 2.1. OWNERSHIP: Membership shall be composed of and restricted to persons or duly organized entities under the laws of the State of Idaho who own Units in Green Gable Estates. 2.2. CERTIFICATES/ENTITIES: No Membership certificates shall be issued. "Member", as referred to herein, shall mean all the Owners of each Unit. If ownership of a Unit is held by one or more persons or entities, the multiple owners of the Unit shall be deemed a single owner or Member for purposes of voting in meetings of the Corporation, The voting power of each Unit shall be equal and each Member shall be entitled to cast one vote (per Unit owned) in any and all Owners' Meetings. 2.3. TRANSFERRAL: Membership interests shall be transferred upon transfer or disposition of a Member's interest or ownership in and to a Unit. Membership qualifications shall be further delineated, described, and resolved by the Board of Managers. 2.4. SUSPENSION: If, following a hearing after due notice, the Board of Managers shall find that a Member has refused to or has not paid all sums due to the Corporation within thirty (30) days after demand for the same, it may suspend his rights as Member or terminate his Membership. On termination of such Membership in the Corporation, all rights and interest of such Member in the Corporation shall cease. 2.5. WITHDRAWAL: A Member may not withdraw from Membership at any time unless the Project is terminated. BY-LAWS - 1 td/GreenllByLaws (04/02/03) 3. CORPORATE MEETINGS: 3.1. PLACE OF MEETINGS: Meetings of the Corporation shall be held at such place within the State of Idaho as the Board of Managers may specify in the notice. 3.2. ANNUAL MEETINGS: The Annual Meetings of the Corporation shall be held on the second Tuesday of February of each year, at such place as the Board shall determine, provided that the Board may by resolution fix the date and place of the Annual Meeting on such other date or at such other place as the Board may deem appropriate. 3.3. SPECIAL MEETINGS: Special meetings of the Corporation may be called at any time by written notice signed by a majority of the Board, or by Owners holding twenty- five percent (25%) of the total votes, delivered not less than ten (10) days prior to the date fixed for said meetings. Such meetings shall be held at such place as the Board may specify and the notice thereof shall state the date, time and matters to be considered. 3.4. NOTICE OF MEETING: A written notice of each Owners meeting stating the place, day and hour of the meeting, and in case of a special meeting, the purpose or purposes of the meeting shall be given by the Secretary of the Corporation, or upon the Secretary's' failure to call immediately, by the person or persons authorized to request the call of the meeting, to each Owner of record entitled to vote at the meeting. This notice shall be sent at least ten (10) days before the date named for the meeting (unless a greater period of notice is required by law in a particular case) to each Owner by United States Mail or in lieu thereof by personal delivery to each Owner, which personal delivery may be proved by affidavit. 3.5. QUORUM: An Corporation meeting, duly called, can be organized for the transaction of business whenever a quorum is present. The presence, in person or by proxy, of the holders of a majority of the voting power of all Owners as described in Paragraph 2 above shall constitute a quorum. The Owners present at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough Owners to have less than a quorum. If a meeting cannot be organized because a quorum has not attended, those present may adjourn the meeting to such time and place as they may determine, but in case of any meeting called for election of a Board of Managers, those who attend the second of such adjourned meetings, although less than a quorum as fixed in this section, shall nevertheless constitute a quorum for the purpose of electing a Board of Managers. 3.6. VOTING: When a quorum is present at any meeting, the vote of Owners representing at least fifty-one percent (51 %) or more of the voting rights of the Owners, as described in Paragraph 2 above, present in person or represented by proxy, shall decide any question of business brought before such meeting, including the election of the Board of Managers, unless the question is one upon which, by express provision of the statutes, or of the Declaration, a different vote is required, in which case such express provision shall govern BY-LAWS - 2 rd/GreenllByLaws (04/02/03) and control the decision of such question. All votes may be cast either in person or by proxy. All proxies shall be in writing, and in the case of proxies for the annual meeting, they shall be delivered to the Secretary at least ten (10) days prior to said annual meeting. Proxies for special Owners' meetings must be of record with the Secretary at least two (2) days prior to said special meeting. 3.7. WAIVER OF NOTICE: Any Owner may at any time waive any notice required to be given under these By -Laws, or by statute or otherwise. The presence of an Owner in person at any meeting of the Owners shall be deemed such waiver. 3.8. INFORMAL ACTION BY OWNERS: Any action that may be taken at a meeting of the Owners may be taken without a meeting if a consent in writing setting forth the action shall be signed by all of the Owners entitled to vote on the action and shall be filed with the Secretary of the Corporation. This consent shall have the same effect as unanimous vote at a meeting of Owners. 4. BOARD OF MANAGERS: 4.1. NUMBER AND QUALIFICATIONS: The Corporation's affairs shall be governed by a Board of Managers composed of not less than five (5) persons subject to - approval by Karl B. Petersen and Randy Webb. At the first Meeting of the Board, the Board shall appoint the fifth (5) person who shall serve until the next Annual Meeting of the Members. Karl B. Peterson and Randy Webb's approval of all Board of Managers decisions shall be waived when Karl and Randy no longer hold for sale any Units in the Project. Subsequent to sale of the first two (2) Units within the Project, all Managers must be Owners (or representatives and officers of an entity owning a Unit) of Units in the Project. 4.2. ELECTION AND TERMS OF OFFICE: At the Annual Meeting of the Corporation, the Owners shall elect one Manager to succeed each Manager whose term has expired. At the expiration of the initial term of office of each respective Manager, his successor shall be elected to service for a term of one (1) year. Each Manager shall hold office until his successor has been elected and met with the other Members of the Board. 4.3. VACANCIES: Vacancies on the Board of Managers caused by any reason whatsoever shall be filled by a vote of a majority of the remaining Board Members thereof even though they may consist of less than a quorum and each person so elected shall be a Member of the Board of Managers until his successor is elected by the Corporation at the next annual meeting. 4.4. REGULAR MEETINGS: A regular Annual Meeting of the Board of Managers shall be held immediately after the adjournment of each annual Corporation meeting. Regular meetings, other than the Annual Meeting, shall or may be held at regular intervals at such places and at such times as the President of the Board of Managers may from time to time designate. BY-LAWS - 3 td/GreenllByLaws (04/02/03) 4.5. SPECIAL MEETINGS: Special meetings of the Board of Managers shall be held whenever called by the President, the Vice -President, or by two (2) or more Members. By unanimous consent of the Board of Managers special meetings may be held without call or notice at any time or place. 4.6. QUORUM: A quorum for the transaction of business at any meeting of the Board of Managers shall consist of a majority of the Board of Managers then in office. 4.7. COMPENSATION: Members of the Board of Managers, as such, shall not receive any stated salary or compensation; provided that nothing herein contained shall be construed to preclude any Member of the Board of Managers from serving the Project in any other capacity and receiving compensation therefor, i.e., the Secretary for the Corporation may be compensated and a Manager may act as such Secretary. 4.8. WAIVER OF NOTICE: Before or at any meeting of the Board of Managers, any Member thereof may, in writing, waive notice of such meeting and such waiver shall be deemed equivalent to the giving of such notice. Attendance by a Member of the Board of Managers at any meeting thereof shall be a waiver of notice by him of the time and place thereof. 4.9. ADJOURNMENTS: The Board of Managers may adjourn any meeting from day to day or for such other time as may be prudent or necessary, provided that no meeting may be adjourned for longer than thirty (30) days. 4.10. INDEMNIFICATION: The Board of Managers may require that all officers and employees of the Board of Managers handling or responsible for funds provide adequate fidelity bonds. The premium on such fidelity bonds shall be a common expense. 5. POWERS: The property and business of the Corporation shall be managed, operated, and maintained by the Board of Managers, subject to approval of Karl Petersen and Randy Webb on any and all matters. Karl and Randy's approval on all Board of Managers decisions shall be waived when they no longer hold for sale any Units in the Project. Subject to Karl and Randy's approval, the Board of Managers may exercise all such powers of the Corporation and do all such lawful acts and things as are provided for by the Declaration, these By -Laws, or by operational Rules and Regulations as may be adopted from time to time. The powers of the Board of Managers shall specifically include, but not be limited to, the following: 5.1. DETERMINE COMMON CHARGES: To determine and levy assessments ("common charges") for the costs and expenses of the Project. All such assessments shall be assessed one -nineteenth (1/19th) each to the Owners. The Board of Managers shall increase the monthly amount, if required, to meet any additional necessary expenses. BY-LAWS - 4 td/GreenllByLaws (04/02/03) 5.2. USE: To collect, use and expend the assessments collected to maintain, repair, care for and preserve the Units, the Common Areas, improvements, access to the Project and each of the Units, landscaping, snow removal, and water and sewer main lines servicing the Project and/or Units. 5.3. ENTRY: To enter into and upon the Units when necessary and at as little inconvenience to the Owner as possible in connection with the maintenance, care and preservation of the Common Areas and/or Units. 5.4. BANKING: To open bank accounts on behalf of the Corporation and to designate the signatories to such bank accounts. 5.5. INSURANCE: To insure and keep insured the common elements in accordance herewith. 5.6. ASSURANCE: To assure all Units are insured for protection of all other Owners within the Project. 5.7. COLLECTION: To collect delinquent assessments by suit or otherwise, to abate nuisances and to join or seek damages from the Owners of the property for violations - of the rules and regulations so adopted by the Board of Managers. 5.8. RULES: To make reasonable rules and regulations and to amend the same from time to time, and such rules and regulations and amendments shall be binding upon the Owners when the Board has approved them in writing. A copy of such rules and all amendments shall be delivered to each Unit. 5.9. HIRING: To employ workmen, janitors and gardeners and to purchase supplies and equipment, to enter into contracts, and generally to have the power of manager in connection with the matters herein set forth. 5.10. ENFORCEMENT: To bring and defend actions by or against more than one Owner and pertinent to the operation of the Corporation. 5.11. ACQUIRE: To acquire Units in foreclosure or as a result of abandonment and to take any all steps necessary to repair or renovate any Unit so acquired and to vote as an Owner, offer such Unit for sale or lease or take any other steps regarding such Unit as shall be deemed proper by the Board of Managers. 5.12. REPAIR: To maintain, repair, manage, construct, reconstruct and perform all other acts necessary and/or pertaining to the Common Areas of the Project. 5.13. ACTION: To respond to any and all resolutions imposed upon the Board by the Corporation. BY-LAWS - 5 td/GreenllByLaws (04/02/03) 5.14. INDEMNITY: To be indemnified and held harmless by the Corporation against all costs, expenses and liabilities whatsoever, including without limitation, attorney's fees reasonably incurred in connection with any proceeding because of Membership therein. Said expenses shall be a common expense and be limited to the extent such liability, damage, or injury is covered by any type of insurance. 6. COMMITTEES: The Board of Managers, may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each of such committees to consist of at least one (1) Manager which, to the extent provided in said resolution or resolutions, shall have and may exercise the powers of the Board of Managers in the management of the business and affairs of the Corporation and may have power to sign all papers which may be required, provided the said resolution or resolutions shall specifically so provide. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Managers. Committees established by resolution of the Board of Managers shall keep regular minutes of their proceedings and shall report the same to the Board as required. 7. OBLIGATIONS AND DUTIES: 7.1. RECORDATION REQUIREMENTS: The Board shall record in the office of the Madison County Recorder all instruments affecting this Project or in which any Owner waives any right under the provisions of the Act, all amendments to this Declaration or to any of the foregoing documents. The Board shall file with the Madison County Auditor's Office a certificate of identity of the person or persons serving as Members of the Board of Managers and the person designated for service of process in accordance with the provisions of the Act, Idaho Code Section 55-1512. The Certificate of Service of Process shall include an acknowledgement in writing of acceptance of such designation by the person so designated. The person to receive service of process shall be the President unless otherwise designated by the Board of Managers. Upon termination of such person's capacity or authority to receive service, a new designation shall be duly made and filed, as above provided. 7.2. REPAIR AND MAINTENANCE: The Board of Managers shall have the obligation, authority and duty to employ, designate or remove, if deemed necessary and to compensate personnel necessary for the operation, repair and maintenance of the Project; to employ and compensate necessary legal and accounting services; and to purchase materials and supplies for the operation, maintenance, repair and/or replacement of any part of the Project. Any such agreement shall be terminable for cause upon thirty (30) days written notice and the terms thereof shall not exceed one year, renewable by agreement of the parties for successive one year periods. 7.3. TAXES OR SPECIAL ASSESSMENTS: The Board shall pay all taxes and special assessments which would be a lien upon the entire Project and shall obtain a discharge of any lien or encumbrance levied against the entire Project or common areas. BY-LAWS - 6 td/GreenllByLaws (04/02/03) 7.4. PAYMENT OF EXPENSES: The Board shall make all expenditures authorized in the annual budget. Prior to submitting the first annual budget to the Corporation, the Declarant is authorized to expend monies for the reasonable and necessary expense of the Corporation. All payment vouchers shall be approved by the President, and after such approval, shall be paid by the Board. Further, it shall be the duty of the Board to bill, collect, and receipt the collection of all monthly assessments and to enforce the collection thereof. Upon ten (10) days notice to the Board and upon payment of a reasonable fee therefor, the Board shall furnish to any Owner a statement of his account setting forth the amount of any unpaid assessment or other charges due or owing from such Owner. The Board shall have the affirmative obligation to enforce all provisions of this Declaration and shall retain the services of an attorney when necessary to do so. 7.5. MORTGAGOR DEFAULT: The Board shall give to the holder of any recorded mortgage which has furnished to the Board its name and current address, written notification of any default by the mortgagor of performance of such mortgagor's obligations under this Declaration and any duly adopted rules or regulations pertaining to the Project which default has been demanded to be corrected by the Board and which default has not been cured within thirty (30) days. Said notice shall be given within twenty (20) days before suit is filed for collection or requirement for specific performance of the same. 7.6. NOTICES: The Board shall attend all meetings of the Corporation, unless excused by the President, and shall notify all Members of the Corporation of all regulations as may be adopted and promulgated by the Board of Managers or Corporation by delivering a copy of said regulations to each Member's mailbox. Any Owner of a Unit in the Project will, upon request, be entitled to written notice of all meetings of the Owners' Corporation and be permitted to designate a representative to attend all such meetings. 7.7. LIABILITY OF THE BOARD OF MANAGERS AND OWNERS: The Corporation shall be liable under any contract, agreement or commitment made and entered into by the Board of Managers, acting in its capacity. The Board of Managers shall have no liability to the Owners in the management of the Corporation except for willful misconduct or bad faith. 8. OFFICERS: 8.1. DESIGNATION AND ELECTION: The principal officers of the Board of Managers shall be President, Vice -President, Secretary and Treasurer, all of whom shall be elected by and from the Board of Managers. The Board of Managers may appoint an Assistant Secretary and an Assistant Treasurer and such other officers as in its judgment may be necessary or desirable. 8.2. PRESIDENT: The President shall be the chief executive officer of the Board of Managers, and shall exercise general supervision over the Corporation's property and affairs. The President may also function as Managing Agent. The President shall sign on BY-LAWS - 7 td/GreenllByLaws (04/02/03) behalf of the Corporation and shall do and perform all acts and things which the Board of Managers may require of him. He shall preside at all meetings of the Corporation and the Board of Managers. He shall have all of the general powers and duties which are normally vested in the office of the president of a corporation including but not limited to, the power to appoint committees from among the Members from time to time as he may in his discretion decide is appropriate to assist in the conduct of the Project. 8.3. VICE-PRESIDENT: The Vice -President shall take the place of the President and perform his duties whenever the President shall be absent or unable to act. If neither the President nor the Vice -President is able to act, the Board of Managers shall appoint some other Member thereof to do so on an interim basis. The Vice -President shall also perform such other duties as shall from time to time be prescribed by the Board of Managers. 8.4. SECRETARY: The Secretary shall keep the minutes of all meetings of the Board of Managers and of the Corporation; he shall have charge of the books and papers as the Board of Managers may direct; and he shall in general, perform all the duties incident to the office of Secretary. 8.5. TREASURER: The Treasurer shall have the responsibility for the funds and securities of the Board of Managers and shall be responsible for keeping full and accurate - accounts of all receipts and all disbursements in books belonging to the Board of Managers. He shall be responsible for the deposit of all monies and all other valuable effects in the name, and to the credit of, the Board of Managers in such depositories as may be from time to time designated by the Board of Managers. 8.6. OTHER OFFICERS: The Board of Managers may appoint such other officers, in addition to the officers herein above expressly named, as it shall deem necessary who shall have authority to perform such duties as may be prescribed from time to time by the Board of Managers. Any other officers need not be Members of the Board. 8.7. REMOVAL OF OFFICERS AND AGENTS: All officers and agents shall be subject to removal, with or without cause, at any time by the affirmative vote of the majority of the then Members of the Board of Managers. 8.8. COMPENSATION: No compensation shall be paid to the officers for their services as officers unless otherwise authorized by a resolution of the Members. 9. ACCOUNTING: 9.1. BOOKS AND ACCOUNTS: The books and accounts of the Project shall be kept under the direction of the Treasurer and in accordance with reasonable standards of accounting procedures. BY-LAWS - 8 td/GreenllByLaws (04/02/03) 9.2. REPORT: At the close of each accounting year, the books and records of the Project shall be reviewed by a person or firm approved by the Corporation. A report of such review shall be prepared and submitted to the Owners at or before the annual meeting of the Corporation. 9.3. INSPECTION OF BOOKS: Financial reports, such as are required to be furnished, shall be available at the principal office of the Corporation for inspection at reasonable times by any Owner. Any mortgage holder of a first mortgage on a Unit in the Project will, upon request, be entitled to inspect the books and records of the Project during normal business hours and receive an annual financial statement of the Project within ninety (90) days following the end of any fiscal year. 10. ASSESSMENTS: 10.1. BUDGET: The Board of Managers shall, from time to time, but at least each fiscal year, fix and determine the budget representing the sum(s) necessary and adequate for the continued operation, management, maintenance, repair, insurance, liabilities, renovations, legal and accounting fees, any necessary reserve funds, and other common expenses of the Corporation for the next fiscal year and shall send a copy of the budget and any supplement thereto to every Owner. The budget shall then be presented at a meeting of the Corporation- at orporationat least one (1) month before the commencement of the budgeted -for year. Unless disapproved by a two-thirds (2/3rds) vote of all of the Owners at such meeting, said budget shall become the annual budget for the upcoming fiscal year. 10.2. ASSESSED TO OWNERS: All portions of the annual budget shall be assessed to the Unit Owners in a one -nineteenth (1/19th) each proportion. The assessment as thus determined and prorated to the Owners shall be payable by such Owners in twelve (12) equal monthly installments on the 1st day of each month commencing on the month following approval or the 1st day of the month of the Budget Year as may be applicable. The Owners shall pay the assessments when due without any deduction on account of any set- off or claim which the Owner may claim against the Corporation. 10.3. ADJUSTMENTS: The Board of Managers may at any time, up to the close of the budget year, increase or decrease the amount previously fixed as the Annual Budget and adjust the monthly installments assessed against each Owner accordingly. 10.4. SPECIAL ASSESSMENTS: Special Assessments, should such be required or necessary, shall be levied and paid in the same manner as hereinbefore provided for regular assessments. 10.5. COSTS OF COLLECTION: Each Owner shall pay any and all assessments when due. Any part or all of an assessment not paid within ten (10) days of its due date shall bear interest thereon at EIGHTEEN PERCENT (18%) per annum until paid. All costs of BY-LAWS - 9 td/GreenllByLaws (04/02/03) collection, including reasonable attorney's fees, costs of suit, and costs of establishing a lien, or of foreclosure of said lien, shall be payable by the said Owner. 10.6. COLLECTION BY LIEN AND FORECLOSURE: The amount of any such unpaid assessments and costs of collection shall be secured by the Board of Managers by the filing of a lien upon the Unit assessed with the Madison County Recorder's Office. Said lien shall state: the amount of such assessment; all incurred or anticipated collection costs; description of the Unit charged; and Owner of said Unit. 10.7. STATEMENT OF COMMON CHARGES: Upon the written request of any Owner or Mortgagee of any Unit herein, the Board of Managers shall promptly furnish a written statement of the unpaid charges due from such Owner. Any mortgagee may pay any amount shown and thereby shall have a lien on such Unit for the amounts paid. 10.8. CAPITAL IMPROVEMENTS: Assessments to Unit Owners for building improvements shall not be made without a two-thirds (2/3rds) vote of approval by the Owners at a duly called meeting of the Corporation. "Improvements" as used in this paragraph shall be limited to include only capital expenditures exceeding the sum of FIVE THOUSAND AND NO/100 DOLLARS ($5,000.00); expenses less than said amount are deemed to be_ normal repairs and not within the provisions of this paragraph. 10.9. NO EXCLUSION: No Owner shall be exempt from liability for contribution toward the common expenses by waiver of the use or enjoyment of any of the Common Areas, or by abandonment of his Unit. The Owners shall not by act or omission seek to abandon the status of the Project except as provided hereinafter or as allowed by the law. 10.10. RESERVE FUND UPON TRANSFER: If an Owner transfers his Unit to another, his interest in any reserve fund or funds shall be deemed to also have been transferred to the new Owner as an appurtenance to the transferred Unit. The Declarant shall not be required to contribute to the reserve funds for an unimproved Unit or the common expense therefor until the individual Unit is sold unless the Unit is rented. An Owner of a Unit, other than Declarants, shall be required to contribute to the reserve funds or the common expense from date of transfer of the Unit thereto. 10.11. BUYER LIABLE: The Buyer of a Unit shall be jointly and severally liable with the Seller for all unpaid assessments owed by the Seller for assessments by the Board against the Seller for his share of the common expenses assessed and due at the time of the conveyance, but such liability shall be without prejudice to the Buyer's rights to recover from the Seller the amounts paid by the Buyer therefor. 10.12. PRIORITIES: If a Mortgagee or other purchaser obtains title by reason of a foreclosure of a Mortgage encumbering a Unit, such purchaser, his successor or assigns, shall not be liable for any assessment by the Board, the notice of lien for which was filed of record in the Madison County Recorder's Office subsequent to date when such Mortgage was BY-LAWS - 10 id/GmenllByLaws (04/02/03) filed for record in that office. It is understood, however, that the above shall not be construed to prevent the Board from filing and claiming liens to secure the payment of such assessments and from foreclosure on such liens as provided by law, but such assessment lien shall be subordinate to such prior recorded Mortgage. 10.13. ASSIGNMENT OF RENTS: If any Owner who is renting his Unit shall default for a period of one (1) month in the payment of any assessments, the Board may, at its option, and for so long as such default shall continue, demand and receive from any tenants thereof any portion of the rent due or becoming due, and to the extent such rent is paid to the Board of Manager such Tenant shall be discharged of liability to the Owner. 11. RULES AND REGULATIONS: Subject to the approval of Karl B. Peterson and Randy Webb, until resignation or until they no longer hold for sale any Units in the Project, the Board shall have the power to adopt and establish by resolution, such building, management, use, and operational rules as it may deem necessary for the maintenance, operation, management, occupation, and control of the Project. The Board may adopt the initial regulations governing the use of the Project by the Owners without giving notice to the Owners; however, subsequent regulations shall be adopted only after due notice of the proposed regulation or regulations are given to the Owners, and the Owners are given an opportunity to present arguments for or against such regulations. Such regulations shall not be inconsistent with the provisions herein, but may otherwise deal with any matters affecting the Common Areas and Units if such matters are a general concern to all Owners. When an amendment, alteration, or repeal of a regulation is famished in writing to the Owners, it shall become effective. 12. AMENDMENT: Upon the approval of Karl Petersen and Randy Webb (until they no longer own any Units within the Project) these By -Laws may be altered, amended, modified at any duly called Owners meeting, provided: 12.1. NOTICE: The notice of the meeting shall contain a full statement of the proposed amendment; 12.2. APPROVAL: The amendment shall be approved by two-thirds (2/3rds) of the Owners in number, and Dated: BY-LAWS - 11 Id/GreenllByLaws (04/02/03) Adopted and Approved by the Board of Managers: Karl B. Peterson Chris Peterson Randy Webb Jill Webb BY-LAWS - 12 td/GreenllByLaws (04/02/03)