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HomeMy WebLinkAboutMEADOWS COVENANTS - 04-00142 - The Meadows PH1 & 2 Condominium - Final PlatTABLE OF CONTENTS ARTICLE 1. DEFINITIONS ARTICLE 2. SUBMISSION AND DIVISION OF PROJECT 2.1 Submission to Condominium Act 2.2 Division into Condominiums ARTICLE 3. BUILDINGS AND RvIPROVEMENTS 3.1 Buildings and hnprovements 3.2 Description of Units 3.3 Description of Common Areas 3.4 Development Plan ARTICLE 4. NATURE AND INCIDENTS OF OWNERSHIP 4.1 Interior of Units 4.2 Maintenance of Units 4.3 Right to Combine Units 4.4 Title 4.5 Ownership of Common Areas 4.6 Inseparability 4.7 No Partition 4.8 Separate Mortgages by Owners 4.9 Separate Taxation 4.10 Mechanics' Liens 4.11 Description of Condominium ARTICLE 5. EASEMENTS 5.1 Easements for Encroachments 5.2 Easements for Maintenance, Cleaning and Repair 5.3 Right to Ingress, Egress, and Support 5.4 Association's Right to Use Common Areas 5.5 Easement for Completion of Project 5.6 Easements Deemed Created ARTICLE 6. RESTRICTIONS ON USE 6.1 Primary Use 6.2 No Noxious or Offensive Activity 6.3 No Alterations 6.4 No Obstructions 6.5 No Overloading 6.6 Prohibition of Damage and Certain Activities 6.7 Rules and Regulations 6.8 Construction Period Exemption 6.9 Specific Limitations 6.10 Leasing ARTICLE 7. THE ASSOCIATION 7.1 Membership 7.2 Voting Rights 7.3 Votes 7.4 Audit 7.5 Amplification ARTICLE 8. CERTAIN RIGHTS AND OBLIGATIONS OF ASSOCIATION AND DIRECTORS 8.1 The Common Areas 8.2 Miscellaneous Goods and Services 8.3 Real and Personal Property 8.4 Rules and Regulations 8.5 Granting Easments 8.6 Statutory Duties and Powers 8.7 Implied Rights ARTICLE 9. ASSESSMENTS 9.1 Agreement to Pay Assessments 9.2 Annual Assessments 3 3 4 4 4 4 4 4 4 4 4 4 5 5 5 5 5 5 6 6 6 6 6 6 6 7 7 7 7 7 7 7 7 7 7 8 8 8 8 8 9 9 9 9 10 10 10 10 10 10 10 11 11 11 11 Common Expense 11 Apportionment 11 Annual Budget 11 Notice and Payment 12 Inadequate Funds 12 9.3 Special Assessments 12 9.4 Lien for Assessments 12 9.5 Personal Obligation of Owner 13 9.6 Amendment of Article 13 ARTICLE 10. INSURANCE 13 10.1 Types of Insurance 13 Master Property Insurance 13 Public Liability Insurance 14 Workmen's Compensation Insurance 14 Governmental Requirements 14 Other Requirements 14 10.2 Insurance Policy Requirements 14 10.3 Additional Coverage 15 10.4 Owner's Own Insurance 15 10.5 Review of Insurance 15 10.6 Copies of Owner's Insurance and Mortgage 16 10.7 Power of Attorney 16 ARTICLE 11. DAMAGE OR DESTRUCTION 16 11.1 Association as Attorney in Fact 16 11.2 Definition of Repair and Reconstruction 16 11.3 Procedures 16 Notice to Eligible First Mortgage Holders 16 Estimate of Costs 16 Sufficient Insurance 16 Insufficient Insurance - Less than 75% Destruction 16 Insufficient Insurance - 75% or More Destruction 17 11.4 Repair or Reconstruction 17 11.5 Disbursement of Funds for Repair and Reconstruction 17 11.6 Amendment of Article 18 ARTICLE 12. CONDEMNATION 18 12.1 Condemnation 18 12.2 Proceeds 18 12.3 Complete Taking 18 12.4 Partial Taking 18 Allocation of Award 18 Continuation and Reorganization 19 Repair and Reconstruction 19 12.5 Other Provisions 19 ARTICLE 13. OBSOLESCENCE 20 13.1 Adoption of Plan 20 13.2 Payment for Renewal and Reconstruction 20 13.3 Amendment of Article 20 ARTICLE 14. MORTGAGE PROTECTION 20 14.1 Notices of Action 20 14.2 Matters Requiring Prior Approval of Seventy-five Percent of Eligible First Mortgagees 20 14.3 Matters that Require Approval of 51% of Eligible First Mortgage Holders2l 14.4 Prior Liens Relate Only to Individual Units 22 14.5 Subordination of Common Expense Lien 22 14.6 Information Made Available to Mortgage Holder upon Request 22 14.7 Priority of Mortgage Holder in Event of Damage 22 14.8 Priority of Mortgage Holder in Event of Condemnation 22 14.9 Mortgage Holder Rights in Event of Foreclosure 22 14.10 Notice to First Mortgage Holders 23 14.11 No Right of First Refusal 14.12 Amendment ARTICLE 15. COMPLIANCE WITH DECLARATION AND BYLAWS 15.1 Compliance 15.2 Enforcement of Remedies ARTICLE 16. GENERAL PROVISIONS 16.1 Intent and Purpose 16.2 Construction 16.3 Notices and Registration of Mailing Address 16.4 Review 16.5 Disclosure of Information 16.6 Amendment 16.7 Termination 16.8 Effective Date 16.9 Agent for Service 16.10 Limitation on Association's Liability 16.11 Owner's Obligations 16.12 Rights of Action 16.13 HUD et al Requirements EXHIBIT A: Bylaws EXHIBIT B: Property — Legal description iii 23 23 23 23 23 23 23 23 23 24 24 24 24 24 24 24 25 25 25 DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS OF THE MEADOWS CONDOMINIUMS, AN IDAHO CONDOMINIUM PROJECT This Declaration is made on the date hereinafter set forth by Robert D. Lamoreaux Jr. and Tasha M. Lamoreaux, and Daniel M. Muhlestein and Annette Muhlestein, hereinafter referred to as the Declarants. RECITALS: A. The Declarants are the owners of the following described parcels of land, hereinafter collectively the `Land,' which are located in Madison County, State of Idaho: See Exhibit A attached and incorporated by reference. B. The Declarants have constructed or will construct on the Land certain buildings and other improvements as shown on the Map referred to below. C. The Declarants intend to execute, acknowledge, and record in the office of the County Recorder of Madison County, State of Idaho, a certain instrument pertaining to the Project entitled `Record of Survey Map for the Meadows Condominiums." D. The Declarants intend by recording this Declaration and the Map to submit the land, the buildings, and all other improvements situated in or upon the land to the provisions of the Idaho Condominium Ownership Act, Idaho Code Ann., § 55-1505 et seo. (hereinafter the "Condominium Act") as a fee simple Condominium Project and to impose on said property mutually beneficial restrictions under a general plan of improvement for the benefit of all Condominiums within said project and the Owners thereof. The Condominium Project will be developed in four (4) phases as legally described on Exhibit B attached and incorporated by reference (Development Plan) E. Declarant desires that the individual units contained in the Development be subject to individual and private ownership. F. Declarant desires that the individual units contained in the Development, together with undivided ownership interests in the Common Areas and Facilities appurtenant thereto, be subject to the covenants, limitations, and restrictions contained herein. DECLARATION NOW, THEREFORE, for such purposes and such others as permitted by law and this Declaration, Declarants hereby make the following Declaration containing covenants, conditions and restrictions relating to the Development which, pursuant to the Act, shall be enforceable equitable servitudes, where reasonable, and shall run with the land: ARTICLE 1. DEFINITIONS Unless the context clearly indicates otherwise, certain terms as used in this Declaration shall have the meanings set forth in this Article 1.1 "Association" shall mean The Meadows Condominium Owner's Association, an Idaho nonprofit corporation, organized to be the Association referred to herein. 1.2 "Board of Directors" shall mean the governing board or management committee of the Association, appointed or elected in accordance with the Declaration and in accordance with the Articles of Incorporation and Bylaws of The Meadows Condominium Owner's Association, attached hereto as Exhibit D and Exhibit E, respectively, and incorporated herein by this reference. The Articles of Incorporation and Bylaws are subject to amendment as provided therein. 1.3 `Building" shall mean one of the Forty-four (44) residential buildings containing one or more units that have been or will hereafter be constructed on the land, as such buildings are shown on the Map. 14 "Common Areas" shall mean all physical portions of the Project, except all Units. 1.5 "Common Expense Fund" shall mean the fund created or to be created pursuant to the provisions of Article 9 of this Declaration and into which all monies of the Association shall be deposited. 1.6 "Common Facilities" shall mean all furniture., furnishings, equipment, facilities, and other property (real, personal, or mixed) and interests therein at any time leased, acquired, owned, or held by the Association for the use and benefit of all Owners and all other property (real, personal or mixed) hereafter purchased in accordance with this Declaration to be part of the Common Areas, except to the extent otherwise expressly provided in this Declaration. 1.7 "Condominium" shall mean a Unit and the undivided interest (expressed as a percentage of the entire ownership interest) in the Common Areas appurtenant to such Unit, as set forth in Exhibit C attached hereto and by this reference made a part hereof. 1.8 "Condominium Act" shall mean the Idaho Condominium Ownership Act, Idalto Code Ann., § 55-1505, et sen. 1.9 "Declarant" shall mean Robert D. Lamoreaux Jr. and Tasha M. Lamoreaux, and Daniel M. Muhlestein and Annette Muhlestein. 1.10 `Eligible First Mortgagee" shall have the meaning set forth in Section 14.3 below. 1.11 "First Mortgage" shall mean a first Mortgage lien on any Unit in the Project. 1.12 "First Mortgagee" shall mean the holder of a First Mortgage. 1.13 "Land" shall mean the land upon which the Project is situated, as more particularly described in Paragraph A of the Recitals above. 1.14 "Lease" shall mean any agreement for leasing or rental of the property. 1.15 "Map" shall mean the Record of Survey Map for The Meadows Condominiums, an Idaho Condominium Project, attached hereto as Exhibit F and incorporated herein by this reference and any Supplemental Maps pertaining to the Project and recorded or to be recorded in the office of the County Recorder of Madison County, State of Idaho. 1.16 "Mortgage" shall mean any mortgage, deed of trust, or other security instrument by which a Condominium or any part thereof is encumbered. 1.17 "Mortgagee" shall mean (a) any persons named as the mortgagee or beneficiary under any mortgage or deed of trust by which the interest of any Owner is encumbered, or (b) any successor to the interest of such person under such mortgage or deed of trust. 1.18 "Owner" shall mean the person or persons, including the Declarant, owning in fee simple a Condominium in the Project, as such ownership is shown by the records of the County Recorder of Madison County, State of Idaho. The term "Owner" shall not refer to any Mortgagee (unless such Mortgagee has acquired title to a Condominium for other than security purposes) or to any person or persons purchasing a Condominium under contract (until such contract is fully performed and legal title conveyed of record). 1.19 "Project" shall mean the land, the buildings, and all improvements submitted by this Declaration and the Map to the provisions of the Condominium Act. 1.20 "Total Votes of rite Association" shall mean the total number of votes appertaining to all Condominiums in the Project, as shown on Exhibit C attached hereto. 1.21"Unit" shall mean an individual air space unit, consisting of enclosed rooms occupying part of a building and bounded by the unfinished surfaces of the floors, ceilings, windows, and doors along the perimeter boundaries of the air space, as said boundaries are shown on the Map, together with all fixtures and improvements therein contained. Paint, sheetrock, all wiring in the unit that connects to the breaker box other than the incoming main line, plumbing and plumbing fixtures other than supply lines or vents, insulation, heat systems and vents and other wall, ceiling, or floor coverings on interior walls shall be deemed to be part of the Unit. Notwithstanding the fact that they may be within the boundaries of such air space, the following are not part of a Unit insofar as they are necessary for the support or for the use and enjoyment of any other Unit: Bearing walls, exterior wall sheathing, floor joists and sheathing, roof trusses (except the interior surfaces thereof), foundations, footings, roof sheathing, shingles, felt, vents, siding, rock, porches and mil. The interior surfaces of a window or door mean the points at which such surfaces are located when the window or door is closed. ARTICLE 2. SUBMISSION AND DIVISION OF PROJECT 2.1 Submission to Condominium Act. The Declarant hereby submits the Land, the buildings, and all other improvements now or hereafter made in or upon the land to the provisions of the Condominium Act. All of said property is and shall be held, conveyed, hypothecated, encumbered, leased, rented, used, and improved as a fee simple Condominium Project to be known as The Meadows Condominiums, an Idaho Condominium Project. All of said property is and shall be subject to the covenants, conditions, restrictions, uses, limitations, and obligations set forth herein, each and all of which are declared and agreed to be for the benefit of said Project and in unherance of a plan for improvement of said property and division thereof into Condominiums further, each and all of the provisions hereof shall be deemed to run with the land and shall be a burden and a benefit on the land and shall be binding upon the Declarant, its successors and assigns, and to any person acquiring, leasing, or owning an interest in the real property and improvements comprising the Project, and to their respective personal representatives, heirs, successors, and assigns. 2.2 Division into Condominiums. The Project is hereby divided into Condominiums, each such Condominium consisting of a Unit and an appurtenant undivided interest in the Common Areas, as set forth in Exhibit C attached hereto. ARTICLE 3. BUILDINGS AND IMPROVEMENTS AND DEVELOPMENT PLAN 3.1 Buildings and Improvements. The buildings and other improvements constructed or to be constructed on the land are described on the Map. The buildings will be constructed of wood framing and brick or rock and/or siding exterior. The number of units in each building is contained on the Map. 3.2 Description of Units. The Map contains the unit number (or other designation of each Unit), location, and dimensions of each Unit in the Project and all other information necessary to identify each such Unit. 3.3 Description of Common Areas. The Map contains a description of the Common Area of the Project. 3.4 Development Plan. The Project will be built by the Declarant in four phases as legally described on Exhibit B. The building types, architectural style and size of units must be similar and cohesive under a common, architectural standard and as approved by and submitted to Rexburg City. No phase need be commenced by the Declarant until it is determined that market conditions warrant further development. All Common Areas must be improved and completed within a reasonable time. ARTICLE 4. NATURE AND INCIDENTS OF OWNERSHIP 4.1 Interior of Units. Each Owner shall have the exclusive right to paint, repaint, tile, wax, paper, carpet, or otherwise decorate the interior surfaces of the walls, ceilings, floors, and doors forming the boundaries of such Owner's Unit and the surfaces of all walls, ceilings, floors, and doors within such boundaries. Each Owner shall also have the right, to construct partition walls, fixtures, and improvements within the boundaries of such Owner's Unit; provided however, that such partition walls, fixtures and improvements (a) shall comply with all applicable laws, ordinances, and building codes, (b) shall not interfere with facilities necessary for the support, use, or enjoyment of any other part of the Project or any other Unit, if a shared facility, (c) shall not impair the structural soundness or integrity of the Building in which it is located, and (d) shall not encroach upon the common Areas or any part thereof, unless the Board of Directors shall consent in writing to such encroachment. 4.2 Maintenance of Units. Each Owner shall keep the interior of that Owner's Unit, including without limitation, interior walls, windows, ceilings, floors, and permanent fixtures and appurtenances thereto, in a clean and sanitary condition and in a state of good repair. In the event that any such Unit shall develop an unsanitary or unclean condition or fall into a state of disrepair, and in the event that the Owner of such Unit shall fail to correct such condition or state of disrepair promptly following written notice from the Board of Directors, the Board in behalf of the Association shall have the right, at the expense of the Owner and without liability to the Owner for trespass or otherwise, to enter said Unit and correct or eliminate said unsanitary or unclean condition or state of disrepair, provided, however, that the Association shall in no event have the obligation to correct or eliminate any such condition or state of disrepair. 4.3 Right to Combine Units. With the written consent of the Board of Directors, which consent shall not be unreasonably withheld, two or more Units may be utilized by the Owner or Owners thereof as if they were one Unit. To the extent permitted in the written consent of the Association, any walls, floors, or other structural separations between any two such Units, or any space which would be occupied by such structural separations but for the utilization of the two Units as one Unit, may, for as long as the two Units are utilized as one Unit, be utilized by the 0 Owner or Owners of the adjoining Units, except to the extent that any such structural separations are necessary or contain facilities necessary for the support, use, or enjoyment of other parts of the Project. At any time, upon the request of the Owner of one of such adjoining Units, any opening between the two units which, but for joint utilization of the two Units, would have been occupied by structural separation, shall be closed, at the equal expense of the Owner or Owners of each of the two Units and the structural separations between the two Units shall thereupon become the common areas. 4.4 Title. Title to a Condominium within the Project may be held or owned by any person or entity, or any combination thereof, and in any manner in which title to any other real property may be held or owned in the State of Idaho. 4.5 Ownership of Common Areas. The undivided ownership interests in the Common Areas shall be allocated equally to all of the Units in the Project regardless of the size or value of the Units. The initial undivided ownership interest in the Common Areas appurtenant to each Unit in the Project shall be as set forth in Exhibit C attached hereto. The percentages appurtenant to each Unit as shown in said Exhibit C shall have a permanent character and shall not be altered (a) except with the unanimous written consent of all Owners expressed in an amendment to this Declaration duty recorded, or (b) except to the extent necessary to allow for the expansion of the project as provided in Article 16 of this Declaration and the Condominium Act. Except as otherwise provided in this Declaration, any Owner shall be entitled to nonexclusive use of the Common Areas in any manner that does not hinder or encroach upon the rights of other Owners and is not contrary to any rules and regulations promulgated by the Association. 4.6 Inseparability. Title to no part of a Condominium within the Project may be separated from any other part thereof, and each Unit and the undivided interest in the Common Areas appurtenant to each Unit shall always be conveyed, devised, encumbered, and otherwise affected only as a complete Condominium. Every devise, encumbrance, conveyance, or other disposition of a Condominium, or any part thereof, shall be construed to be a devise, encumbrance, conveyance, or other disposition, respectively, of the entire Condominium, together with all appurtenant rights created by law or by this Declaration, including appurtenant rights created by law or by this Declaration, including appurtenant membership in the Association as hereinafter set forth. 4.7 No Partition. The Common Areas shall be owned in common by all of the Owners, and no Owner may bring any action for the partition thereof. 4.8 Separate Mortgages by Owners. Each Owner shall have the right separately to mortgage or otherwise encumber such Owner's Condominium. No Owner shall attempt to or shall have the right to mortgage or otherwise encumber the Cormnon Areas or any part thereof, except the undivided interest therein appurtenant to such Owner's Condominium. Any mortgage or other encumbrance of any Condominium within the Project shall be subordinate to all of the provisions of this Declaration, and in the event of foreclosure the provisions of this Declaration shall be binding upon any Owner whose title is derived through foreclosure by private power of sale, judicial foreclosure, or otherwise. 4.9 Separate Taxation. Each Condominium within the Project including each Unit and appurtenant undivided interest in the Common Areas, shall be deemed to be a parcel and shall be assessed separately for all taxes, assessments, and other charges of the State of Idaho or of any political subdivision or of any special improvement district or of any other taxing or assessing authority. For purposes of such assessment, the valuation of the Common Areas shall be apportioned among the Units in proportion to the undivided interests in Common Areas appurtenant to such Units. All such taxes, assessments, and other charges on each respective Condominium shall be separately levied against the Owner thereof. No forfeiture or sale of any Condominium for delinquent taxes, assessments, or other governmental charges shall divest or in any way affect the title to any other Condominium. 4.10 Mechanics' Liens. No labor performed or material famished for use in connection with any Unit with the consent or at the request of an Owner or his agent or subcontractor shall create any right to file a statement of mechanic's lien against the Unit of any other Owner not expressly consenting to or requesting the same or against any interest in the Common Areas, except the undivided interest therein appurtenant to the Unit of the Owner for whom such labor shall have been performed and such materials shall have been furnished. 4.11 Description of Condominium. Every contract for the sale of a Condominium and every other instrument affecting title to a Condominium within the Project may describe a Unit by its identifying letter or symbol as indicated in this Declaration or as shown on the Map. Such description will be construed to describe the Unit, together with its appurtenant undivided interest in the Common Areas, and to incorporate all of the rights incident to ownership of a Condominium within the Project and all of the limitations on such ownership. ARTICLE 5. EASEMENTS 5.1 Easements for Encroachments. If any part of the Common Areas encroaches or shall hereafter encroach upon any Unit, an easement for such encroachment and for the maintenance of the same shall and does exist. If any part of a Unit encroaches or shalt hereafter encroach upon the Common Areas, or upon an adjoining Unit, an easement for such encroachment and for the maintenance of the same shall and does exist. If any part of the Common Areas or any part of a Unit shall hereafter encroach on real property now owned by the Declarant outside the boundaries of the land, an easement for such encroachment shall and does exist. Such encroachments shall not be considered to be encumbrances either on the Common Areas or the Units. Encroachments referred to herein include, but are not limited to, encroachments caused by error in the original construction of the Building or any Improvements constructed or to be constructed within the Project, by error in the Map, by settling, rising, or shifting of the earth, or by changes in position caused by repair or reconstruction of the Project, or any pari thereof, in accordance with the provisions of this Declaration. 5.2 Easements for Maintenance. Cleaning and Rte. Some of the Common Areas are or may be located within the Units or may be conveniently accessible only through the Units. The Association shall have the irrevocable right to have access to each Unit and to all Common Areas from time to time during such reasonable hours as may be necessary for the maintenance, cleaning, repair or replacement of any Common Areas or for malting emergency repairs at any time therein necessary to prevent damage to the Common Areas or to any Unit. Any Association access to a Unit for emergency repairs which repairs are the responsibility of the Owner and which repairs are not covered by insurance, shall be charged to the Owner and the Owner shall pay any damages resulting from the same. In addition, agents of the Association may enter any Unit when necessary in connection with any cleaning, maintenance, repair, replacement, landscaping, construction, or reconstruction for which the Association is responsible. Such entry shall be made with as little inconvenience to the Owners as practicable, and any damage caused thereby shall be repaired by the Association with funds from the Common Expense Fund. 5.3 Right to Ingress. Egress. and Support. Each Owner shall have the right to ingress and egress over, upon, and across the Common Areas as necessary for access to such Owners Unit, and shall have the right to horizontal, vertical, and lateral support of such Unit, and such rights shall be appurtenant to and pass with title to each Condominium. 5.4 Association's Right to Use Common Areas. The Association shall have an easement to make such use of the Conunon Areas as may be necessary or convenient to perform the duties and functions that it is obligated or permitted to perform pursuant to this Declaration, including without limitation repairs required by this Declaration as well as the right to construct and maintain in the Common Areas facilities for use by Owners generally or by the Association and its agents exclusively. 5.5 Easement for Completion and Sale of Proiect. The Declarant shall have a transferable easement over and on the Common Areas for the purpose of completing construction of the Project and making improvements therein as shown on the Map and for the purpose of doing all things reasonably necessary or appropriate in connection therewith, but only if access is not otherwise reasonably available. To the extent that damage is inflicted on any part of the Project by any person utilizing said easement, the Declarant and the person causing the damage shall be liable to the Association for the prompt repair of such damage. The Declarant may maintain small and compatible facilities in the Common Areas reasonably necessary to market Units, including but not limited to sales and management offices, parking areas and advertising signs. 5.6 Easements Deemed Created. All conveyances of Condominiums within the Project hereafter made, whether by the Declarant or otherwise, shall be construed to grant and reserve such reciprocal easements as are provided herein, even though no specific reference to such easements appears in any such conveyances. ARTICLE 6. RESTRICTIONS ON USE 6.1 Primary Use. All Units within the Project shall be used exclusively for residential dwelling and for no other purpose. 6.2 No Noxious or Offensive Acflvi . No noxious or offensive activity shall be carried on, in or upon any part of the Project, nor shall anything be done or placed in or upon any part of the Project which is or may become a nuisance or which may cause disturbance or annoyance to Owners. No activities shall be conducted nor Improvements constructed, in or upon any part of the Project which are or may become unsafe or hazardous to any person or property. 6.3 No Alterations. No Owner shall, without the prior written consent of the Board Directors in each specific instance, make, or cause to be made any alteration, addition, removal, or improvement in or to the Common Areas or any part thereof, or do any act that would impair the structural soundness or integrity of the Buildings or other improvements, or jeopardize the safety of persons or property or impair any easement or hereditament appurtenant to the Project. 6.4 No Obstructions. No Owner shall obstruct the Common Areas or any part thereof. No Owner shall store or cause to be stored in the Common Areas any property whatsoever, unless the Board of Directors shall consent thereto in writing. 6.5 No Overloa—ft. No Owner shall bring anything into such Owner's Unit or permit anything to be done in such Owner's Unit that will cause damage to the Building. No Owner shall overload the floor of such Owner's Unit. No Owner shall permit the use or operation in a Unit of any equipment, machinery, or other apparatus that will in any manner injure, vibrate, or shake the Building or portions thereof. 6.6 Prohibition of Damage and Certain Activities. Except with the prior written consent of the Board of Directors, nothing shall be done or kept in any Unit in the Common Areas, or in any other part of the Project that would result in cancellation of the insurance on the Project or any part thereof, nor shall anything be done or kept in any Unit that would increase the rate of insurance on the Project or any part thereof over that which the Association, but for such activity, would pay. Nothing shall be done or kept in any Unit or in the Common Areas or any part thereof which would be in violation of any statute, rule, ordinance, regulation, permit, or other validly imposed requirement of any governmental authority. No damage to, or waste of, the Common Areas or any part thereof shall be committed by any Owner or guest of any Owner, and each Owner shall indemnify and bold harmless the Association and the other Owners from and against all loss resulting from any such damage or waste caused by such Owner or by the guests, tenants, licensees, or invitees of such Owner. There shall be no subrogation rights against an Owner, Tenant, or the Association for any loss covered by any insurance. 6.7 Rules and Regulations. Each Owner shall comply strictly with all rules and regulations adopted by the Association for the governance of the Units, the Common Areas, and the Project, as such rules and regulations may be modified, amended, and construed by the Association in the sole discretion of its Board of Directors. 6.8 Construction Period Exemptioa During the course of actual construction of any permitted structures or improvements within the Project, the provisions, covenants, conditions, and restrictions contained in this Declaration shall be deemed waived to the extent necessary or convenient to permit such construction; provided, however, that during the course of such construction, nothing shall be done which will result in a violation of any said provisions, covenants, conditions, or restrictions upon completion of the construction. 6.9 Specific Limitations (a) No Boats, RV's, campers, trailers, junk vehicles or vehicles that are being restored, repaired or that are not operable are to be stored or kept on the Common Areas, streets, parking lots, driveways or otherwise on the property. Violating vehicles will be towed at the owner's expense. (b) No animals, livestock, or poultry of any kind shall be permitted in any Unit or on the Property except such domesticated household pets or birds as are allowed pursuant to the rules and regulations adopted by the association or those specifically required by an applicable federal law to accommodate a resident's needs. No pet, if permitted, may be allowed outside unless on a leash and accompanied by a person and all animal waste shall be removed by the owner, no dog or pet runs are permitted. There are no exceptions to these restrictions. (c) No lease of any unit shall be for less than the whole thereof. (d) No outside satellite dishes or other antennas are permitted except as required by federal law and must be located as approved in writing in advance by the Association. Any damage caused to Common Areas or exterior surfaces from installation of satellite dishes or other antennas must be repaired at the Owner's expense. (e) The Association may establish reasonable parking rules, regulations and designations to facilitate use, repair and snow removal in parking areas. (f) The Association may establish reasonable rules to govern, regulate, control, designate areas and if deemed necessary, prohibit outdoor storage of any articles, including but not limited to bicycles, patio furniture, outdoor barbeque grills, etc. No barbeque grill may be used within 15 feet of any building. (g) The use of the common area is limited to the use by Owners and their invited guests. Use of these areas shall be at the sole risk of the participants. In the event of any personal injury or damage while utilizing the common areas, the Association shall have no responsibility or liability, except in the case of gross negligence or intentional acts by the Association directly causing the injury or damage. 6.10 Leasin¢. All leases should be in writing and are subject to this Declaration and By- laws. Leasing of any Unit is prohibited for an initial term of less than 30 days. ARTICLE 7. THE ASSOCIATION 7.1 Membership. Each Owner shall be entitled and required to be a Member of the Association; Membership shall begin irnmediately and automatically upon becoming an Owner and shall terminate immediately and automatically upon ceasing to be an Owner. if title to a Condominium is held by more than one person, the Membership appurtenant to that Condominium shall be shared by all such persons in the same proportionate interest and by the same type of tenancy in which title to the Condominium is held. An Owner shall be entitled to one Membership for each Condominium owned by such Owner. Each Membership shall be appurtenant to the Condominium to which it relates and shall be transferred automatically by conveyance of that Condominium. Ownership of a Condominium within the Project cannot be separated from Membership in the Association appurtenant thereto, and any devise, encumbrance, conveyance, or other disposition of a Condominium shall be construed to be a devise, encumbrance conveyance, or other disposition respectively of the Owner's Membership in the Association and rights appurtenant thereto. No person or entity other than an Owner may be a Member of the Association, and Membership in the Association may not be transferred except in connection with the transfer of the Condominium. 7.2 Voting Rights. (a) The Association shall have two classes of voting membership: Class A. Class A members shall be all Owners, with the exception of the Declarant, and shall be entitled to one (1) vote for eachUnitowned. When more than one person holds an interest in any Unit, all such persons shall be members. The vote for such Unit shall be exercised as they determine, but in no event shall more than one (1) vote be cast with respect to any Unit. Class B. The Class B member shall be the Declarant and shall be entitled to three (3) votes for each Unit owned and constructed or to be constructed on the Property. The Class B membership shall cease and be converted to Class A membership when the total votes outstanding in the Class A membership equal or exceed the total votes outstanding in the Class B membership. (b) Declarunt's right to Class B membership in the Association with respect to existing and potential Units will end upon the first to occur of either of the following events: (1) The fifth anniversary of the date on which this Declaration is recorded, or (2) One hundred and twenty days have expired after seventy-five percent (75%) of the Units have been conveyed to purchasers. (c) The Directors of the Association shall be elected by the Members in accordance with the Bylaws and subject to the additional conditions and limitations above described. 7.3 Votes. Once sold by the Declarant, each Unit in the Project shall have one vote in the Association regardless of the size or value of the Unit. The number of votes appurtenant to each respective Condominium shall be as set forth in Exhibit C. The number of votes appurtenant to each Condominium as set forth in said Exhibit C shall have a permanent character and shall not be altered without the unanimous written consent of all Owners expressed in a duly recorded amendment to this Declaration. 7.4 , Audit. Upon written request from any of the agencies or corporations which has an interest or prospective interest in a Unit, the Association shall prepare and furnish within a reasonable time an audited financial statement of the Association for the immediately preceding fiscal year. 7.5 Amplification. The provisions of this Article 7 may be amplified by the Articles of Incorporation and Bylaws of the Association; provided, however, that no such amplification shall substantially alter or amend any of the rights or obligations of the Owners set forth in this Declaration. The initial Bylaws of the Association shall be in the form of Exhibit E. ARTICLE 8. CERTAIN RIGHTS AND OBLIGATIONS OF ASSOCIATION AND DIRECTORS 8.1 The Common Areas. The Board of Directors, acting on behalf of the Association and, subject to the rights and duties of the Owners as set forth in this Declaration, shall be responsible for the exclusive management and control of the Common Areas and all Improvements thereon (including the Common Facilities), and shall keep the sane in a good, clean, attractive, safe, and sanitary condition, order, and repair. The Association shall be responsible for the maintenance and repair of the exterior of the Buildings, other Improvements and grounds, including without limitation painting thereof, repair and replacement of exterior trim, roofs and fences, and maintenance of landscaping, walkways, driveways, and parking areas. The Board of Directors shall also be responsible for maintenance, repair, and replacement of Common Areas within the Buildings, including without limitation landings, stairways utility lines, Common Facilities, and all Improvements and other items located within or used in connection with the Common Areas. The specification of duties of the Board of Directors with respect to particular Common Areas shall not be construed to limit its duties with respect to other Common Areas. All goods and services procured by the Board of Directors in performing its responsibilities under this Section shall be paid for with funds from the Common Expense Fund. 8.2 Miscellaneous Goods and Services. The Board of Directors may, in behalf of the Association, obtain and pay for the services of such personnel as the Board of Directors shall determine to be necessary or desirable for the proper operation of the Project, whether such personnel are furnished or employed directly by the Association or by any person or entity with whom or which it contracts. The Board of Directors may, in behalf of the Association, obtain and pay for legal and accounting services necessary or desirable in connection with the operation of the Project or the enforcement of this Declaration. In addition to the foregoing, the Board of Directors may, in behalf of the Association, acquire and pay for out of the Common Expense Fund water, sewer, garbage collection, electrical, gas, and other necessary or desirable utility services for the Common Areas (and for the Units to the extent not separately metered or billed), insurance, bonds, and other goods and services common to the units. 8.3 Real and Personal Prouerty. The Board of Directors may acquire and hold on behalf of the Association real, personal, and mixed property of all types for the use or benefit of all of the Owners and may dispose of such property by sale or otherwise; provided that any acquisition or disposition of any real, personal or mixed property by the Board of Directors wherein the value of such property exceeds $5,000 must be approved by a vote of at least sixty percent (60%) of the Total Votes of the Association at a Meeting duly called for that purpose. All such property, including Common Facilities, shall be paid for out of the Common Expense Fund and all proceeds from the disposition thereof shall be part of such fund. 8.4 Rules and Regulations. The Board of Directors may make reasonable rules and regulations governing the use of the Units, the Common Areas, and all parts of the Project, which rules and regulations shall be consistent with the rights and duties established by this Declaration. The Board of Directors in behalf of the Association may take judicial action against any Owner to enforce compliance with such rules and regulations or other obligations of such Owner arising hereunder, or to obtain damages for noncompliance therewith, as permitted by law. In the event of such judicial action, the Association shall be entitled to recover its costs, including reasonable attorneys fees, from the offending Owner. 8.5 Grantin Easements. The Board of Directors of the Association may grant or create, on such terms as it deems advisable, utility and similar easements and rights-of-way over, under, across, and through the Common Areas, which are reasonably necessary to the ongoing development and operation of the Project. 8.6 Statutory Duties and Powers. All duties, responsibilities rights, and powers imposed upon or granted to the `management committee' or to the `manager" under the Condominium Act shall be duties, responsibilities, rights, and powers of the Board of Directors hereunder. 10 8.7 Implied Rights. The Association may exercise any right, power, or privilege given to it expressly by this Declaration or by law, and every other right or privilege reasonably implied from the existence of any right or privilege given to it herein or reasonably necessary to effectuate any such right or privilege. ARTICLE 9. ASSESSMENTS 9.1 Agreement to Pay Assessments. The Declarant, for each Condominium owned by it within the Project, and for and as the owner of the Project and every part thereof, hereby covenants and each Owner of any Condominium by the acceptance of instruments of conveyance and transfer therefor, whether or not it be so expressed in said instruments, shall be deemed to covenant and agree with each other and with the Association to pay to the Association all Assessments (annual, special and otherwise) made by the Association for the purposes provided in this Declaration. Such Assessments shall be fixed, established, and collected from time to time as provided in this Article 9. 9.2 Annual Assessments. Annual Assessments shall be computed and assessed against all Condominiums in the Project as follows: (a) Common Expense. Annual Assessments shall be based upon advance estimates of the Association's cash requirements to provide for payment of all estimated expenses arising out of or connected with maintenance and operation of the Common Areas and/or furnishing utility services and other common items to the Units. Such estimated expenses may include, among other things, the following: Expenses of management; real property taxes and special assessments (unless and until the Condominiums are separately assessed); premiums for all insurance that the Association is required or permitted to maintain hereunder; repairs and maintenance; wages for Association employees, including fees for a Manager (if any); utility charges, including charges for utility services to the Units to the extent not separately metered or billed; legal and accounting fees; any deficit remaining from a previous period; creation of an adequate contingency reserve, major maintenance reserve, and/or sinking fund; creation of an adequate reserve fund for maintenance repairs, and replacement of those Common Areas and Facilities that must be replaced on a periodic basis, and such reserve shall preferably be funded by monthly payments but if necessary extraordinary special assessments may be made; and any other expenses and liabilities which may be incurred by the Association for the benefit of the Owners under or by reason of this Declaration. Such shall constitute the Common Expense, and all funds received from assessments under this Section 9.2(a) shall be part of the Common Expense Fund. A working capital fund must be established for the initial months of the Project operations equal to at least a two months' estimated common area charge for each Unit. (b) Aoaortionment Expenses attributable to the Common Expense or to the Project as a whole shall be apportioned among and assessed to the Owners in proportion to their respective undivided interests in the Cormnon Areas. The Declarant shall be liable for the amount of any assessments against the Condominiums owned by it. (c) Annual Budget. Annual Assessments shall be determined on the basis of a fiscal year beginning January 1 of each year and ending the December 31 next following; provided the first fiscal year shall begin on the date of this Declaration and end on the December 31 next following. On or before December 15 of each year, the Board of Directors shall prepare and furnish to each Owner, or cause to be prepared and famished to each Owner, an operating budget for the upcoming fiscal year. The budget shall itemize the estimated expenses of Common Expense for such fiscal year, anticipated receipts (if any), and any deficit or surplus from the prior operating period. The budget shall serve as the supporting document for the Annual Assessment for the upcoming fiscal year and as the major guideline under which the Project shall be operated during such annual period. Such budgets shall be unnecessary for Annual Assessments relative to, or for operation of the Project during, any operating period ending before January 1, 2004. 11 (d) Notice and Payment. Except with respect to the first fiscal year, the Board of Directors shall notify each Owner as to the amount of the Annual Assessment against such Owner's Condominium on or before December 15 each year for the fiscal year beginning on January 1 next following. Each Annual Assessment shall be payable in twelve equal monthly installments, one such installment due on the first day of each calendar month during the fiscal year to which the assessment relates unless the Board of Directors shall determine some other payment schedule; provided, however, the Annual Assessment for the first fiscal year shall be based upon such portion of the fust fiscal year and shall be payable in such installments and at such times as the Association, in the sole discretion of its Board of Directors, may determine. All unpaid installments of any Annual Assessment shall bear interest at the rate of fifteen percent (15%) per annum from the date each such installment becomes due until paid. In addition, in the event that any installment of any Annual Assessment is not paid on the date such installment becomes, due, it shall be subject to a penalty for late payment of three dollars ($3.00) per day from the date each such installment becomes due until paid. The failure of the Board of Directors to give timely notice of any Annual Assessment as provided herein shall not be deemed a waiver or modification in any respect of the provisions of this Declaration, or a release of any Owner from the obligation to pay such assessment or any other assessment; but the date when the payment shall become due in such case shall be deferred to a date fifteen (15) days after notice of such assessment shall have been given to the Owner in the manner provided in this Declaration. (e) Inadeouate Funds. In the event that the Common Expense Fund proves inadequate at any time for whatever reason, including nonpayment of any Owner's assessment, the Board of Directors may on behalf of the Association levy additional assessments in accordance with the procedure set forth in Section 9.3 below, except that the vote therein specified shall be unnecessary. 9.3 Special Assessments. In addition to the Annual Assessments authorized by this Article 9, the Board of Directors may, on behalf of the Association, levy, at any time and from time to time, upon the affirmative vote of at least fifty-one percent (5 1%) of the Total Votes of the Association, Special Assessments, payable over such periods as the Board of Directors may determine, for the purpose of defraying, in whole or in part, the cost of any construction or reconstruction, unexpected repair or replacement of the Project or any part thereof, or for any other expenses incurred or to be incurred as provided in this Declaration (including without limitation Common Expenses). This Section shall not be construed as an independent source of authority for the Association to incur expenses, but shall be construed to prescribe the manner of assessing for expenses authorized by other Sections or Articles hereof. Any sums assessed pursuant hereto shall be assessed to owners in proportion to their respective undivided interests in the Common Areas. Notice in writing of the amount of each such Special Assessment and the time for payment thereof shall be given promptly to the Owners; no payment shall be due less than fifteen (15) days after such notice shall have been given. All unpaid portions of any Special Assessment shall bear interest at the rate of fifteen percent (151/o) per annum from the date such portions become due until paid. In addition, in the event that any Special Assessment is not paid on the date such special Assessment becomes due, it shall be subject to a penalty for late payment of three dollars ($3.00) per day from the date each such Special Assessment becomes due until paid. All funds received from assessments under this Section shall be part of the Common Expense Fund. 9.4 Lien for Assessments. All sums assessed to Owners of any Condominium within the Project pursuant to the provisions of this Article 9, together with penalties and interest thereon as provided herein, shall be secured by a lien on such Condominium in favor of the Association. To evidence alien for sums assessed pursuant to this Article 9, the Board of Directors may prepare a written notice of lien setting forth the amount of the assessment, the date due, the amount remaining unpaid, the name of the Owner of the Condominium, and a description of the Condominium. Such a notice shall be signed and acknowledged by a duly authorized officer of the association and may be recorded in the office of the County Recorder of Madison County, State of Idaho. No notice of lien shall be recorded until there is a delinquency in payment of the 12 assessment. Such lien may be enforced by sale or foreclosure conducted in accordance with the provisions of law applicable to the exercise of powers of sale or foreclosure in deeds of trust or mortgages or in any other manner permitted by law. In any such foreclosure, the Owner shall be required to pay the costs and expenses of such proceeding (including reasonable attorneys' fees) and such costs and expenses shall be secured by the lien being foreclosed. The Owner shall also be required to pay to the Association any assessments against the Condominium which shall become due during the period of foreclosure, and all such assessments shall be secured by the lien being foreclosed. The Board of Directors shall have the right and power in behalf of the Association to bid in at any foreclosure sale, and to hold, lease, mortgage, or convey the subject Condominium in the name of the Association. Such a lien for Assessments shall not be affected by any sale or transfer of a Unit, except that a sale or transfer of a Unit pursuant to a foreclosure of a First Mortgage shall extinguish a subordinate hen for Assessments which became payable prior to such sale or transfer. Any such sale or transfer pursuant to a foreclosure shall not relieve the purchaser or transferee of a Unit from liability for, nor the Unit so sold or transferred from the lien of, any Assessments thereafter becoming due. 9.5 Personal Obligation 'on of Owner. The amount of any Annual or Special Assessment against any Condominium shall be the personal obligation of the Owner of such Condominimn to the Association. Suit to recover a money judgment for such personal obligation shall be maintainable by the Association without foreclosing or waiving the lien securing the same. No Owner may avoid or diminish any such personal obligation by waiver of the use and enjoyment of any of the Common Areas or by abandonment of his Condominium or by waiving any services or amenities provided for in this Declaration. In the event of any suit to recover a money judgment for unpaid assessments hereunder, the involved Owner shall pay the costs and expenses incurred by the Association in connection therewith, including reasonable attorneys' fees. The personal obligation for delinquent Annual or Special Assessments shall not pass to successors in title or interest to an Owner unless assumed by such successors. 9.6 Amendment of Article. This Article 9 shall not be amended unless Owners of all Condominiums in the Project unanitnously consent and agree to such amendment in a duly recorded instrument. ARTICLE 10. INSURANCE 10.1 Tnes of Insurance. The Association shall obtain and keep in full force and effect at all times the following types of insurance coverage, provided by companies licensed to do business in the State of Idaho: (a) Master Pronerty Insurance. The Association sltall obtain and maintain a "master" or "blanket" multi -peril policy of property insurance equal to a full replacement value (i.e., 100% of current "replacement cost"exclusive of land, foundation, excavation and other items normally excluded from coverage) of the Project (including all building service equipment and supplies and the like and any fixtures or equipment within the Common Areas and other Common Area personal property belonging to the Association, which are financed under the mortgage), with an Agreed Amount Endorsement or its equivalent, if available, and, if available, an Inflation Guard Endorsement Such insurance shall afford protection against loss or damage by fire and other hazards covered by the standard extended coverage endorsement, and by sprinlder leakage, debris removal, cost of demolition, vandalism, malicious mischief, windstorm, and water damage; and such other risks as are customarily covered in similar projects or as are commonly required by private institutional mortgage investors for projects similar in construction, location and use. In addition to the above, any fixtures, equipment or other property within the Units which are to be financed by a mortgage to be purchased by FNMA or FHLMC (regardless of whether or not such property is a part of the Common Area) must be covered in such "blanket' or `master' policy. All policies or property insurance shall provide that, despite any provisions giving the insurance carrier the right to elect to restore damage in lieu of a cash settlement, such option shall not be 13 exercisable without the prior written approval of the Association (or any Insurance Trustee) or when in conflict with the provisions of any Insurance TmstAgreement to which the Association may be a party, or any requirement bylaw. Any blanket policy of property insurance shall contain or have attached a standard mortgagee clause (without contribution) customarily used in the area in which the Project is located which must be endorsed to provide that any proceeds shall be paid to the The Meadows Condominium Owners' Association in trust for the use and benefit of the Owners and their respective First Mortgagees, as their interests may appear. (b) Public Liability Insurance. The Association shall obtain and maintain a comprehensive policy of public liability insurance covering all of the Common Areas and Facilities, commercial spaces and public ways (if any) in the Project, with a Severability of Interest Endorsement or equivalent coverage which would preclude the insurer from denying the claim of a Condominium Owner because of the negligent acts of the Association, such Owner, or another Owner, with limits of not less than $1,000,000 covering all claims for personal injury and/or property damage arising out of a single occurrence, including protection against water damage liability, liability for non -owned and hired automobile, liability for property of others, and such other risks as are customarily covered in similar projects. The scope of coverage also includes all other coverage in the kinds and amounts required by private institutional mortgage investors for projects similar in construction, location and use. The insurance must be endorsed to provide that any proceeds shall be paid to the The Meadows Condominium Owner's Association in trust for the use and benefit of the Owners and their respective First Mortgagees, as their interests may appear. (c) Workman's Compensation Insurance. The Association shall obtain and maintain workman's compensation and employer's liability insurance and all other similar insurance with respect to employees ofthe Association in the amounts and in the forms now or hereafter required by law. (d) Governmental Requirements. Notwithstanding any other provisions contained herein to the contrary, the Association shall continuouslymaintain in effect such casualty, flood and liability insurance and a fidelity bond coverage meeting the insurance and fidelity bond requirements for condominium projects established by Federal National Mortgage Association and Government National Mortgage Association so long as either is a mortgagee or owner of a Condominium within the Project, except to the extent such coverage is not available or has been waived in writing by Federal National Mortgage Association or Government National Mortgage Association. (e) Other Requirements. Each Owner and each First Mortgagee, if any, shall be beneficiaries of the policy in the percentage of common ownership. Certificates of insurance shall be issued to each Owner and Mortgagee upon request. 10.2 Insurance Policy Requirements. The Master Multi -Peril Property, Public Liability and Flood Insurance policies obtained by the Association pursuant to Section 10.1 above shall be subject to tite following additional requirements: (a) the named insured under any such policies shall be the Association, as a trustee for the Owners, or its authorized representative, including any trustee with which such Association may enter into any Insurance Trust Agreement, or any successor trusts, each of which shall be referred to as the "Insurance Trustee" who shall have exclusive authority to negotiate losses under these policies and to perform such other functions as are necessary to accomplish this purpose; (b) insurance coverage obtained and maintained pursuant to the requirements of Sections 10.1(a) and 10.1(b) shall not be brought into contribution with any insurance purchased by any Owner or such Owner's mortgagee; 14 (c) coverage must not be prejudiced by (1) any act or neglect of the Association, any employee or agent of the Association, or any Owner, or (2) any failure of the Association to comply with any warranty or condition regarding any portion of the promises over which the Association has no control; (d) coverage may not be canceled or substantially modified (including cancellation for nonpayment of premium) without at least thirty (30) days prior written notice to any and all insureds, including each First Mortgagee scheduled as a holder of a first mortgage in the applicable policy; (e) all policies must contain a waiver of subrogation by the insurer as to any and all claims against the Association, the Owners and/or their respective agents, employees or tenants, and of any defenses based on coinsurance or on invalidism arising from the acts of the insured; (i) each hazard insurance policy shall be written by a hazard insurance carrier which has a financial rating by Best's insurance Reports of Class VI or better; (g) policies shall be deemed unacceptable where (I) under the terms of the carrier's charter, bylaws or policy, contributions or assessments may be made against a Condominium Owner, such Owner's First Mortgagee or any First Mortgagee's designee or such designee's designee; (2) by the terms of the carrier's charter, bylaws or policy, loss payments are contingent upon action by the carrier's board of directors, policyholders, or members; or (3) the policy includes any limiting clauses (other than insurance conditions) which could prevent a Condominium Owner, his First Mortgagee or any First Mortgagee's designee or such designee's designee from collecting insurance proceeds; (h) all policies of hazard insurance shall contain or have attached the standard mortgagee clause commonly accepted by private institutional mortgage investors in the area in which the Project is located. 10.3 Additional Coverage. The provisions of this Declaration shall not be construed to limit the power or authority of the Association to obtain and maintain insurance coverage in addition to any insurance coverage required by this Declaration, in such amounts and in such forms as the Association may deem appropriate from time to time. 10.4 Owner's Own Insurance. Each Owner, at his or her own expense, may procure and maintain at all times fire and extended coverage insurance covering personal property of such owner and additional fixtures and improvements added by such Owner against loss by fire and other casualties, including without limitation vandalism and malicious mischief All Owners must provide fire and extended coverage insurance covering all interior areas of the Unit which are not common area. All policies providing such casualty insurance shall provide that they do not diminish the insurance carrier's coverage for liability arising under insurance policies obtained by the Association pursuant to this Article. Notwithstanding the provisions hereof, each Owner may obtain insurance at the Owner's own expense providing such other coverage upon such Owner's Condominium, such Owner's personal property, such Owner's personal liability, and covering such other risks as such Owner may deem appropriate provided that each such policy shall provide that it does not diminish the insurance carrier's coverage for liability arising under insurance policies obtained by the Association pursuant to this Article. If obtainable under industry practice without an unreasonable additional charge for such waiver, all such insurance shall contain a waiver of the insurance company's right of subrogation against the Association, the Declarant, the Manager, other Owners, and their respective servants, agents and guests. 10.5 Review of Insurance. The Association shall review annually the coverage and policy limits of all insurance on the Project and adjust the same at its discretion. Such annual review may include an appraisal of the improvements in the Project by a representative of the insurance earner or carriers providing the policy or policies on the Project, or by such other qualified appraisers as the Association may select. 15 10.6 Copies of Owner's Insurance and Mortgage. Each owner shall keep all insurable interior improvements on that Owner's Unit insured against fire and general hazards for an amount not less than the reasonable replacement value of the same. Said insurance shall be written with a reputable insurance company acceptable to the Association in the name of the Unit owner with the Association as an additional insured. A copy of the policy with receipts from time to time evidencing payment of the premiums will be deposited with the Association on at least an annual basis. The insurance must contain a clause that it will not be canceled without giving the Association at least thirty (30) days advance written notice. Owner must give the Association a copy of each and every Mortgage on the Unit when obtained and must advise the Association in a timely manner of any changes in the Mortgage or the Mortgagee. If the Association must pay to keep insurance in force on the Unit the cost of the same shall be treated as an assessment against the Owner and Unit. 10.7 Power of Attorney. Each Owner appoints the Association, or any Insurance Trustee or substitute Insurance Trustee designated by the Association, as attomey-in-fact for the purpose of purchasing and maintaining 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 docmnents; and the performance of all other acts necessary to accomplish such purpose. ARTICLE 11. DAMAGE OR DESTRUCTION 11.1 Association as Attorney in Fact All of the Owners irrevocably constitute and appoint the Association their true and lawful attorney in fact in their name, place, and stead for the purpose of dealing with the Project upon its damage or destruction as hereinafter provided. Acceptance by any grantee of a deed from the Declarant or from any Owner shall constitute an appointment by said grantee of the Association as such grantee's attorney in fact as herein provided. As attorney in fact, the Association shall have full and complete authorization, right and power to make, execute, and deliver any contract, deed, or other instrument with respect to the interest of an Owner in which may be necessary or appropriate to exercise the powers herein granted. 11.2 Definition of Repair and Reconstruction. Repair and reconstruction of the improvements as used herein means restoring the Project to substantially the same condition in which it existed prior to the damage or destruction, with each Unit and the Common Areas having substantially the same vertical and horizontal boundaries as before. 11.3 Procedures. In the event any part of the Project is damaged or destroyed, the Association shall proceed as follows: (a) Notice to Eligible First Mortgage Holders. The Association shall give timely written notice to any each Eligibie First Mortgagee holding a First Mortgage on a Unit in the event of substantial damage to or destruction of such Unit or any part of the Common Areas. (b) Estimate of Costs. As soon as practicable after an event causing damage to or destruction of any part of the Project, the Association shall obtain complete and reliable estimates of the costs to repair and reconstruct that part of the Project damaged or destroyed. (c) Sufficient Insurance. If the proceeds of the insurance maintained by the Association exceed the estimated costs to repair and reconstruct the damaged or destroyed part of the Project such repair and reconstruction shall be carried out. (d) Insufficient Insurance — Less than 75% Destruction. If the proceeds of the insurance maintained by the Association are less than the estimated costs to repair and reconstruct the damaged or destroyed part of the Project and if less than seventy-five percent (75%) of the Project is damaged or destroyed, such repair and reconstruction shall nevertheless be carried out. The Association shall levy a Special Assessment sufficient to 16 provide funds to pay the actual costs of such repair and reconstruction to the extent that such insurance proceeds are insufficient to pay such costs. Such Special Assessment shall be allocated and collected as provided in Section 9.3 hereof, except that the vote therein specified shall be unnecessary. Further levies may be made in like manner if the amounts collected (together with the proceeds of insurance) are insufficient to pay all actual costs of such repair and reconstruction. (e) Insufficient Insurance — 75% or More Destruction. If the proceeds of the insurance maintained by the Association are less than the estimated costs to repair and reconstruct the damaged or destroyed part of the Project and if seventy-five percent (751/6) or more of the Project is damaged or destroyed, such damage or destruction shall be repaired and reconstructed if, but only if, within one hundred (100) days following the damage or destruction, the Owners shall elect by a vote of at least seventy-five percent (75%) of the Total Votes of the Association to carry out such repair and reconstruction. If, however, the Owners shall not, within one hundred (100) days after such damage or destruction, elect by a vote of at least seventy-five percent (75%) of the Total Votes of the Association to carry out such repair and reconstruction, the Association shall, subject to the provisions of Section 14.3, record in the office of the County Recorder of Madison County, State of Idaho, a notice setting forth such facts. Upon the recording of such notice, the following shall occur: (1) The Project shall be deemed to be owned in common by the Owners; (2) The undivided interest in the Project owned in common which shall appertain to each Owner shall be the percentage of the undivided interest previously owned by such Owner in the Common Areas; (3) Any liens affecting any of the Condominiums shall be deemed to be transferred, in accordance with the existing priorities, to the undivided interest of the respective Owner in the Project; and (4) The Project shall be subject to an action for partition at the suit of any Owner, in which event the net proceeds of any sale resulting from such suit for partition, together with the net proceeds of the insurance of the Project, if any, shall be considered as one fund and shall be divided among all Owners in a percentage equal to the percentage of undivided interest owned by each respective Owner in the Common Areas, as set forth in Exhibit C hereto, after first paying out of the respective share of each Owner, to the extent sufficient for the purposes, all liens on the undivided interest in the Project owned by such Owner. (f) In no event shall an owner of a Unit or any other party have priority over any First Mortgagee holding a First Mortgage on such Unit with respect to the distribution to such unit of any insurance proceeds. 11.4 Repair or Reconstruction. If the damage or destruction is to be repaired and reconstructed as provided above, the Association shall, as soon as practicable after receiving the said estimate of costs, commence and diligently pursue to completion the repair and reconstruction of that part of the Project damaged or destroyed. The Association may take all necessary or appropriate action to effect repair and reconstruction, as attorney in fact for the Owners, and no consent or other action by any Owner shall be necessary in connection therewith, except as otherwise expressly provided herein. The Project shall be restored or repaired to substantially the same condition in which it existed prior to the damage or destruction, with each Unit and the Common Areas having the same vertical and horizontal boundaries as before. 11.5 Disbursement of Funds for Repair and Reconstruction. If repair or reconstruction is to occur, the insurance proceeds held by the Association and any amounts received from assessments made pursuant to Section 11.3(d) hereof shall constitute a fund for the payment of costs of repair and reconstruction after casualty. It shall be deemed that the first money disbursed in payment for costs of repair and reconstruction shall be made from insurance proceeds; if there is a balance after payment of all costs of such repair and reconstruction, such balance shall be distributed to the 17 Owners in proportion to their respective percentages of Ownership of the Common Areas. 11.6 Amendment of Article. This Article 11 shall not be amended unless the Owners of all Condominiums in the Project unanimously consent and agree to such amendment by duly executed and recorded instruments. ARTICLE 12. CONDEMNATION 12.1 Condemnation. If at any time or times all or any part of the Project shall be taken or condemned by any public authority under power of eminent domain, the provisions of this Article shall apply. A voluntary sale or conveyance of all or any part of the Project in lieu of condemnation, but under threat of condemnation, shall be deemed to be a taking by power of eminent domain. If any Unit or portion thereof or the Common Areas or Facilities or any portion thereof is made the subject matter of any condemnation or eminent domain proceeding or is otherwise sought to be acquired by a condemning authority, the Board of Directors shall give prompt written notice of any such proceeding or proposed acquisition to each Owner in the Project and to any Eligible First Mortgagee holding a First Mortgage on a Unit in the Project. 12.2 Proceeds. All compensation, damages, and other proceeds from any such taking by power of eminent domain (hereinafter the `condemnation award') shall be made payable to the Association and shall be distributed by the Board of Directors, on behalf of the Association, as herein provided. 12.3 Complete Taking. In the event the entire Project is taken by power of eminent domain, condominium ownership pursuant hereto shall terminate and the condemnation award shall be allocated among and distributed to the Owners in proportion to their respective undivided interests in the Common Areas. Such distribution shall be made by check payable jointly to the respective Owners and their respective Mortgagees, as appropriate. 12.4 Partial Taking. In the event less than the entire Project is taken by power of eminent domain, the following shall occur: (a) Allocation of Award. As soon as practicable, the Board of Directors shall, on behalf of the Association, reasonably and in good faith, apportion the condemnation award between compensation and severance damages, or other proceeds, and shall allocate such apportioned amounts and pay the same to the Owners as follows: (1) The total amount apportioned to taking of or injury to the Common Areas shall be allocated among and distributed to all Owners (including Owners whose entire Units have been taken) in proportion to their respective undivided interests in the Common Areas; (2) The total amount apportioned to severance damages shall be allocated among and distributed to the Owners of those Condominiums that have not been taken, in proportion to their respective undivided interests in the Common Areas; (3) The respective amounts apportioned to the taking of or injury to a particular Unit shall be allocated and distributed to the Owner of such Unit; (4) The total amount apportioned to consequential damages and any other takings or injuries shall be allocated and distributed as the Association determines to be equitable under the circumstances; (5) If apportionment or allocation is ahrady established by negotiation, judicial decree, statute, or otherwise, the Association shall employ such apportionment and allocation to the extent it is relevant and applicable; (6) Distribution of allocated proceeds shall be made by check payable m jointly to individual Owners and their respective Mortgagees, as appropriate; and (7) No provision of this Article 12 or any other provisions in this Declaration, the Articles, or the Bylaws shall entitle the Owner of a Unit or other party to priority over any First Mortgagee holding a First Mortgage lien on such Unit with respect to the distribution to such Unit of the proceeds of any award, settlement, or proceeds from any eminent domain or condemnation proceeding. (b) Continuation and Reorganization. if less than the entire Project is taken by power of eminent domain, condominium ownership pursuant hereto shall not terminate, but shall continue. In such event, the Project shall be reorganized as follows: (1) If any partial taking results in the taking of an entire Unit, the Owner thereof shall cease to be a Member of the Association and all voting rights and the undivided interest in the Common Areas appertaining to such Unit shall be reallocated to, and shall appertain to, the remaining Units in proportion to their respective undivided interests in the Common Areas, (2) If any partial taking results in the taking of a portion of a Unit and if no determination is made by the Board of Directors that such taking makes it impractical to use the remaining portion of such Unit for any lawful purpose permitted by this Declaration, then the fair market value of such remaining portion of the Unit shall be determined by the Board of Directors and all voting rights and the undivided interest in the Common Areas appertaining to such Unit shall be reduced in proportion to the diminution in fair market value of such Unit resulting from the taking. The voting rights and undivided interest in the Common Areas so divested from such Unit shall be reallocated to, and shall appertain to, such Unit and the other Units in the Project in proportion to their respective undivided interests in the Common Areas; provided, however, that such Unit shall participate in such reallocation on the basis of the undivided interest reduced in accordance with the preceding sentence. (3) If any partial taking results in the taking of a portion of a Unit and if there is a determination made by the Board of Directors that such taking makes it impractical to use the remaining portion of such Unit for any lawful purpose permitted by this Declaration, then all voting rights and the entire undivided interest in the Common Areas appertaining to such Unit shall be reallocated to, and shall appertain to, the remaining Units in proportion to their respective undivided interests in the Common Areas, and the remaining portion of such Unit shall thenceforth be part of the Common Areas. (4) The Board of Directors shall have the duty and authority to make all determinations and to take all actions necessary or appropriate to effectuate reorganization of the Project under the provisions of this Section 12.4(b); provided, however, that if any such determination shall have been or such action taken by judicial decree, the Board of Directors shall defer thereto and proceed in accordance therewith. (c) Repair and Reconstruction. Any repair and reconstruction necessitated by condemnation shall be governed by the provisions of Article 11 hereof for cases of Damage or Destruction; provided, however, that the provisions of said Article dealing with sufficiency or insufficiency of insurance proceeds shall not be applicable. 12.5 Other Provisions. The Association shall represent the Owners in the condemnation proceedings or in negotiations, settlements and agreements with the condemning authority for acquisition ofthe Common Areas, or part thereof, by the condemning authority. Each Owner hereby appoints the Association as attorney-in-fact for such purpose. The Association may appoint a Trustee to act on behalf of tile Owners, in carrying out the above functions, in lieu of the Association. 19 ARTICLE 13. OBSOLESCENCE 13.1 Adoption of Plan. Subject to the provisions of Article 14 hereof, Owners holding seventy-five percent (75%) or more of the Total Votes of the Association may agree that the Project is obsolete and adopt a written plan for the renewal and reconstruction of the Project. Written notice of adoption of such a plan shall be given to all Owners and Mortgagees. 13.2 Payment for Renewal and Reconstruction. `The Association shall levy a Special Assessment sufficient to provide funds to pay the estimated expenses of renewal or reconstruction. Such Special Assessment shall be allocated and collected as provided in Section 9.3 hereof, except that the vote therein specified shall be unnecessary. Further levies may be made in like manner if the amounts collected prove insufficient to pay the actual expenses of such renewal or reconstruction. In the event amounts collected pursuant hereto are in excess of the amounts required for renewal or reconstruction, such excess shall be distributed to the Owners in proportion to their respective percentages of ownership of the Common Areas. 13.3 Amendment of Article. This Article 13 shall not be amended unless the Owners of all of the Condominiums in the Project and all of the Mortgagees holding Mortgage liens on Units in the Project, based on one. vote for each mortgage, unanimously consent and agree to such amendment by duly executed and recorded instruments. ARTICLE 14. MORTGAGE 14.1 Notices of Action. A holder, insurer, or guarantor of a First Mortgage, upon written request to the Association (such request to state the name and address of such holder, insurer, or guarantor and identify the Unit encumbered by such First Mortgage) shall be entitled to timely written notice of the following: (a) Any proposed amendment of the Declaration, Bylaws, or Articles effecting a change in (1) the boundaries of any Unit or the exclusive easement rights appertaining thereto, (2) the interests in the Common Areas appurtenant to any Unit or the liability for the assessments otthe Association appertaining thereto (except to the extent necessary to allow for the phasing of the Project as provided in the Condominium Act), (3) the number of votes in the Association appertaining to any Unit (except to the extent necessary to allow for the expansion or phasing of the Project as provided in the Condominium Act), or (4) the purposes to which any Unit or the Common Areas are restricted; (b) Any proposed termination of the Condominium Project; (c) Any condemnation loss or any casualty loss which affects a material portion of the Project or which affects any Unit on which there is a First Mortgage held, insured, or guaranteed by such holder, insurer or guarantor; (d) Any delinquency in the payment of assessments or charges owed by an Owner of a Unit subject to the First Mortgage of such holder, insurer or guarantor where such delinquency has continued for a period of 60 days; (e) Any lapse, cancellation or material modification of any insurance policy maintained by the Association pursuant to this Declaration. 14.2 Matters Requiring Prior Approval of Seventy-five Percent of Eltitible First Morteaeees. Unless seventy-five percent (75%) of the Eligible First Mortgagees which hold First Mortgage liens on Condominium Units in the Project (based upon one vote for each First Mortgage owned) have given their prior written approval, neither the Association nor the Owners shall be entitled to: 20 (a) Abandon or terminate the Project, except for abandonment or termination in the case of substantial destruction by fire or other casualty or in the case of a taking by condemnation or eminent domain; (b) Cause any amendment to be made to the Declaration, the Articles, or the Bylaws, which would change the percentage interests of the Owners in the Project except to the extent necessary to allow for the expansion or phasing of the Project as provided in the Condominium Act; (c) Partition or subdivide any Condominium; or (d) By act or omission, seek to abandon, partition, subdivide, encumber, sell or transfer the Common Areas and Common Facilities of the Project. 14.3 Matters that Require Approval of 51% of Eligible First Mortgage Holders. Except to the extent that any provision of this Declaration requires approval of a greater number of First Mortgagees, unless at least fifty-one percent (51%) of the Eligible First Mortgagees holding First Mortgage liens on Condominium Units in the Project (based upon one vote for each First Mortgage owned) have given their prior written approval, neither the Association nor the Owners shall be entitled to: (a) elect to terminate the Project after substantial destruction of the Project or substantial taking by exercise of the power of eminent domain of the Project; (b) repair and reconstruction of the Project following any partial condemnation or damage due to an insurable hazard in a manner different than as specified in Articles 11 and 12 of this Declaration; (c) materially amend any provisions of this Declaration, the Bylaws or the Articles to add any material provisions which establish, provide for, govern, or regulate any of the following: (1) Voting; (2) Assessments, assessment liens or subordination of such liens; (3) Reserves for maintenance, repair and replacement of Common Areas and Common Facilities; (4) Insurance or fidelity bonds; (5) Rights to use the Common Areas and/or Common Facilities; (6) Responsibility for maintenance and/or repair of the Common Areas and/or Facilifies; (7) Expansion or contraction of the Project or the addition, annexation or withdrawal of property to or from the Project; (8) The boundaries of any Unit; (9) The interests in the Common Areas and/or Facilities. (10) Convertibility of Units into Common Areas or Facilities and/or convertibility of Common Areas or Facilities into Units; (11) Leasing of Units; and 21 (12) Imposition of any right of first refusal or similar restriction on the right of a Unit Owner to sell, transfer, or otherwise convey such Owner's Unit. (13) Any restoration or repair of the Project after a partial condemnation or damage due to an insurable hazard shall be substantially in accordance with the Declaration and the original plans and specifications unless the approval of the eligible holders of First Mortgages on Units to which at least 51% of the votes of Units subject to mortgages held by such eligible holders are allocated, is obtained. As used in this Section 14.3, in Section 14.2, and in any other Section of this Declaration, EligibleFirst Mortgagees shall mean First Mortgagees who have delivered a written request for notice to theAssociation (such request to state the name and address of such First Mortgagee and identify the Unit encumbered by such First Mortgage). 14.4 Prior Liens Relate Only to Individual Units. All taxes, assessments, and charges which may become liens prior to the fust mortgage under local law shall relate only to the individual Condominiums and not to the Project as a whole. 14.5 Subordination of Common Expense Lien. Any lien which the Association may have on any Unit in the Project for the payment of any assessments of the Association attributable to such Unit shall be subordinate to the lien or equivalent security interest of any First Mortgage on the Unit recorded on or before the date on which any such assessments became due. 14.6 Information Made Available to Mortgage Holder upon Request. Any First Mortgagee holding a First Mortgage on a Condominium shall, upon request, be entitled to: (a) inspect the books and records of the Association during normal business hours; and (b) receive an annual reviewed financial statement of the Association within 90 days following the end of any fiscal year of the Project; and (c) written notice of all meetings of the Association and be permitted to designate a representative to attend all such meetings: 14.7 Priority of Mortgage Holder in Event of Damage. In the event of substantial damage to or destruction of any Unit or any part of the Common Areas and/or Facilities, any Eligible First Mortgagee holding a First Mortgage on a Condominium shall be entitled to timely written notice of any such damage or destruction and no provision of the Declaration, Articles, or Bylaws or any amendment thereto shall entitle the Owner of a Unit or other party to priority over a First Mortgagee with respect to the distribution to such Unit of any insurance proceeds. 14.8 Priority of Mortgage Holder in Event of Condemnation. If any Unit or portion thereof or the Common Areas and Facilities or any portion thereof is made the subject matter of any condemnation or eminent domain proceeding or is otherwise sought to be acquired by a condemning authority, then any Eligible First Mortgagee holding a First Mortgage on a Unit shall be entitled to timely written notice of any such proceeding or proposed acquisition and no provision of the Declaration, Articles, or Bylaws (or any amendment thereto), shall entitle the Owner of a Unit or other party to priority over a First Mortgagee with respect to the distribution to such unit of the proceeds of any award or settlement. 14.9 Mortgage Holder Rights in Event of Foreclosure. Each holder of a First Mortgage lien on a Unit who comes into possession of the Unit by the virtue of mortgage, or by deed or assignment in lieu of foreclosure, or any purchaser at a foreclosure sale, shall take the Unit free of any claims for unpaid assessments and charges against the Unit which accrue prior to the time such holder comes into possession of the Unit, except for claims for a pro rata share of such assessments or charges resulting from a pro rata reallocation of such assessments or charges to all Units in the Project, including the Unit which is the subject of such mortgaged unit. 22 14.10 Notice to First Mortgage Holders. The Association shall give each Eligible First Mortgagee holding a First Mortgage on a Unit prompt notice of any default in the Unit Mortgagor's obligations under the Condominium documents not cured within thirty (30) days of default. 14.11 No Right of First Refusal. No "right of first refusal" shall be included in or added by amendment to the Declaration, Articles, or Bylaws. 14.12 Amendment. No provision of this Article 14 shall be amended without the prior written consent of at least seventy-five percent (75%) of all Eligible First Mortgagees holding First Mortgagees on Units in the Project, based on one vote for each Mortgage. ARTICLE 15. COMPLIANCE WITH DECLARATION AND BYLAWS 15.1 Compliance. Each Owner shall comply strictly with the provisions of this Declaration, the Articles of Incorporation and Bylaws of the Association, rules and regulations promulgated by the Association, and the decisions and resolutions of the Association adopted pursuant thereto, as the same may lawfully be modified and amended from time to time. Failure to comply with any of the same shall be grounds for an action to recover sums due for damages or for injunctive relief or for both, maintainable by the Association or by an aggrieved Owner. 15.2 Enforcement of Remedies. The obligations, provisions, covenants, restrictions, and conditions contained in this Declaration, or in any Supplemental or amended Declaration, with respect to the Association or Condominiums within the Project shall be enforceable by the Declarant or by any Owner of a Condominium within the Project, subject to this Declaration, by a proceeding for a prohibitive or mandatory injunction, or by a suit or action to recover damages or to recover any amount due or unpaid. The obligations, provisions, covenants, restrictions, and conditions contained in this Declaration, or in any Supplemental or amended Declaration, with respect to a person or entity or property of a person or entity other than the Association or the Declarant shall be enforceable by the Declarant or by the Association or by an aggrieved Owner by a proceeding for a prohibitive or mandatory injunction or by a suit or action to recover damages or to recover any amount due or unpaid. ARTICLE 16. GENERAL PROVISIONS 16.1 Intent and Purpose. The provisions of this Declaration, and any Supplemental or Amended Declaration, shall be liberally construed to effectuate the purpose of creating a uniform plan for the development and operation of a Condominium Project. Failure to enforce any provision, restriction, covenant, or condition contained inthis Declaration, or in any Supplemental or Amended Declaration, shall not operate as a waiver of any such provision, restriction, covenant, or condition or of any other provisions, restrictions, covenants, or conditions. 16.2 Construction. The provisions of this Declaration shall be in addition and supplemental to the provisions of the Condommiurn Act and all other provisions of law. Whenever used herein, unless the context shall otherwise require, the singular shall include the plural, the plural shall include the singular, the whole shall include any part thereof, and any gender shall include both genders. The Article and Section headings set forth herein are for convenience and reference only and are not intended to expand, limit, or otherwise affect the meaning or interpretation of this Declaration or any provision hereof. 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 provisions hereof. 16.3 Notices and Registration of Mailing Address. Each Owner shall register from time to time with the Association his current mailing address. All notices, demands, and other communications to any Owner as provided for in this Declaration shall be in writing and shall be sufficient for all purposes if personally served or if sent by first class U.S. mail postage prepaid, 23 addressed to the Owner at his registered mailing address or, if no address has been registered, to the Unit of such Owner. All notices, demands, and other communications to the Association as provided for in this Declaration shall be in writing and shall be sufficient for all purposes if personally served or if sent by first class U.S. mail, postage prepaid, addressed to the Association at its offices, or to such other address as the Association may hereafter specify to the Owners in writing. Any notice, demand, or communication referred to in this Declaration shall be deemed to have been given and received when personally served or when deposited in the U.S. mail, postage prepaid, and in the form provided for in this Section, as the case be. 16.4 Review. Any Owner may at any reasonable time, upon appointment and at his own expense, cause a review or inspection to be made of the books and records maintained by the Association. The Association, at the expense of the Common Expense Fund, shall obtain a review, by certified public accountants, of all books and records pertaining to the Project at no greater than annual intervals, and copies thereof shall be furnished to the Owners. 16.5 Disclosure of Information. Upon the written request of any person or entity that has either an interest or a prospective interest in a Condominium, the Association shall, within a reasonable time, provide such person or entity with a copy of an reviewed financial statement of the Association for the immediately preceding fiscal year. The Association shall, upon request, during normal business hours or under reasonable circumstances, make available to Owners, lenders, and holders and insurers of any First Mortgage current copies of the Declaration, Bylaws, and other rules governing the Project and other books, records and financial statements of the Association. The Association shall also, upon request, during normal business hours and under reasonable circumstances, make available to prospective purchasers current copies of the Declaration, Bylaws, other mles.governing the Project, and the most recent reviewed financial statement for the Association, if such is prepared. 16.6 Amendment. Except as otherwise provided herein (including, but not limited to, Article 14), this Declaration maybe amended if Owners holding at least sixty-seven percent (67%) of the Total Votes in the Association consent and agree to such amendment by instruments which are duly recorded in the office of the Recorder of Madison County, State of Idaho. 16.7 Termination Subject to the provisions of Article 14 and except as provided by law or in this Declaration in the case of substantial destruction by fire or other casualty or in the case of a taking by condemnation or eminent domain, the prior written approval of all of the Owners of Condominium Units in the Project shall be required before the Project may be abandoned or terminated. 16.8 Effective Date. This Declaration shall be effective upon recording. 16.9 Agent for Service. The name and address of [he person to receive service of process in all cases provided by the Condominium Act shall be the registered agent and address of the Association as shown in the official corporate records maintained in the office of the Idaho Department of Commerce, Division of Corporations and Commercial Code. 16.10 Limitation on Association's Liability. The Association shall not be liable for any failure of water service or other utility service (if any) to be obtained and paid for by the Association hereunder, or for injury or damage to any person or property caused by the elements or by another Owner or person in or upon the Project, or resulting from electricity, water, rain, snow, or ice which may leak or flow from outside or from any parts of the Building or its drains, pipes, conduits, appliances, or equipment, or from any other place, unless caused by the grossly negligent or willful misconduct of the Association. No diminution or abatement of any assessments under this Declaration shall be claimed or allowed for inconvenience or discomfort arising from the making of any repairs or improvements to or maintaining the Project or any part thereof, or from, any action taken to comply with the provisions of this Declaration or with the laws, ordinances, regulations, rules, or order of any governmental authority. 24 16.11 Owner's Obligations. All obligations of an Owner, under and by virtue of the provisions contained in this Declaration shall continue, notwithstanding that such Owner may be leasing, renting, or selling under contract such Owner's Condominium. The Owner of a Condominium within the Project shall have no obligation for expenses or other obligations accruing after he conveys such Condominium. 16.12 Rights of Action. The Association and any aggrieved Owner shall be granted a right of action against any other Owners for failure to comply with the provisions of the Declaration, Bylaws, or equivalent documents, or with decisions of the Association which are made pursuant to authority granted the Association in such documents. Owners shall have similar rights of action against the Association. 16.13 HUD. FNMA. VA. GNMA AND FHLMC Requirements. Notwithstanding anything herein to the contrary, any provisions of this Declaration, By-laws or other Association documents which would not permit the Project to qualify for FHA, VA, MID, FNMA, GNMA and FHLMC lending, are to be disregarded and are null and void. IN WITNESS WHEREOF, the undersigned Declarant has executed this Declaration the day and year first above written. DECLARANT: Robert D. Lamoreaux Jr. Tasha M. Lamoreaux Daniel M. Muhlestein Annette Mulilestein STATE OF IDAHO COUNTY OFAMMON ss. The foregoing instrument was acknowledged before me this day of April, 2004. NOTARY PUBLIC My Commission Expires: Residing At: 25 EXHIBIT "A" BYLAWS OF THE MEADOWS CONDOMINIUM OWNERS' ASSOCIATION ARTICLE I NAME AND LOCATION 1.01. The name of the association is The Meadows Condominium Owners' Association, hereinafter refened to as the `Association. The principal office of the corporation shall be located at Rexburg, Idaho, but meetings of Members and Directors may be held at such places within the State of Idaho, as may be designated by the Board of Directors. ARTICLE II DEFINITiONS 2.01. "Association" shall mean and refer to The Meadows Condominium Owners' Association , its successors and assigns, an Idaho nonprofit corporation. 2.02. "Common Areas" shall mean all real property owned by the Association for the common use and enjoyment of the Owners. 2.03. "Declarant" shall mean and refer to Robert D. Lamoreaux Jr, and Tasha M. Lamoreaux, and Daniel M Muhlestein and Annette Muhlestein,. 2.04. "Declaration" shall mean and refer to the Declaration Establishing Condominium Ownership of The Meadows Condominiums, applicable to the Property as recorded in the Office of the Madison County Recorder. 2.05. "Member" shall mean and refer to those persons and entities entitled to membership in the Association as provided in the Declaration. 2.06. "Property" shall mean and refer to that certain real property in Madison County, Idaho more fully described in the Declaration. 2.07. "Owner" shall mean and refer to the record owner, whether one or more persons or entities, of the fee simple title to any Unit on the Property, as more fully described in the Declaration. The tens "Owner" shall include contract sellers, but exclude those having such interest merely as security for the performance of an obligation. Every Owner is a Member of the Association, and every Member is an Owner. 2.08. "Unit' shall mean and refer to each condominium Unit on the Property as shown upon recorded condominium map of the Property, and as more fully defined in the Declaration. ARTICLE III MEETINGS OF MEMBERS 3.01 Annual Meetings. The annual meetings of the Members shall be held annually on the first Wednesday in May, at the hour of 10 o'clock am. If the day for the annual meeting of the Members is a legal holiday, the meeting will be held at the same hour on the next day following that is not a legal holiday. 3.02 Special Meetings. Special meetings of the Members may be called at any time by the President or by the Board of Directors, or upon written request of the Members who are entitled to vote one-fourth (114) of all the votes of the Class A membership. 3.03. Notice of Meetings. Written notice of each meeting of the Members shall be given by, or at the direction of, the Secretary or person authorized to call the meeting, by mailing a copy of such notice, postage prepaid, at least 15 days before such meeting to each Member entitled to vote, addressed to the Member's address last appearing on the books of the Association, or supplied by such Member to the Association for the purpose of notice. Such notice shall specify the place, day and hour of the meeting, and, in the case of a special meeting, the purpose of the meeting. 3.04 — The presence at the meeting of Members entitled to cast, or of proxies entitled to cast, thirty percent (3 0%) of the votes of each class of membership shall constitute a quorum for any action except as otherwise provided in the Articles oflncorpomtion, the Declaration, or these Bylaws. If, however, such quorum shall not be present or represented at any meeting, the Members entitled to vote shalt have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. 3.05 Proxies. At all meetings of Members, each Member may vote in person or by proxy. All proxies shall be in writing and filed with the Secretary. Every proxy shall be revocable and shall automatically cease upon eleven (11) months from the date thereof, or upon conveyance by the Member of his Unit. 3.06. Action Without Meeting. The Members shall have the tight to take any action in the absence of a meeting which they could take at a meeting by obtaining the written approval of all the Members. Any action so approved shall have the same effect as though taken at a meeting of the Members. ARTICLE IV BOARD OF DIRECTORS 4.01. Number. The affairs of this Association shall be managed by a Board of three (3) Directors, must be Members or officers or agents of Members of the Association. 4.02. Term of Office. At the initial meeting, the Members shall elect one Director for a term of one year, one Director for a term of two years and one Director for a term of three years; and at each annual meeting thereafter, the Members shall elect one Director for a term of three years. 4.03. Removal. Any Director may be removed from the Board, with or without cause, by a majority vote of the Members of the Association. In the event of the death, resignation, or removal of a Director, his or her successor shall be selected by the remaining members of the Board, and shall serve for the unexpired term of his or her predecessor. 4.04. Compensation. No Director shall receive compensation of any service rendered to the Association. However, any Director may be reimbursed for actual expenses incurred in the performance of his or her duties. 4.05 Action Without MectinE. The Directors shall have the right to take any action in the absence of a meeting which they could take at a meeting by obtaining the written approval of all the Directors. Any action so approved shalt have the same effect as though taken at a meting of the Directors. 4.06. Management Committee. The full Board of Directors shall comprise the "Management Committee" as defined and referred to in the Declaration. The Board shall therefore perform all functions of the Management Committee contemplated by the Declaration. 4.07. Regular Meetings. Regular meetings of the Board of Directors shall be held at least annually without notice, at such place and hour as may be fixed from time to time by resolution of the Board. Should said meeting fall upon a legal holiday, then that meeting shall be held at the same time on the next day which is not a legal holiday. 408. Special Meetings. Special meetings of the Board ofDirectors shall be held when called by the President of the Association, or by any two Directors, after not less than three (3) days notice to each Director. 4.09 Quorum. A majority of the number of Directors shall constitute a quomm for the transaction of business. Every act or decision done or made by a majority of the Directors present a duly held meeting at which a quorum is present shall be regarded as the act of the Board ARTICLE V POWERS AND DUTIES OF THE BOARD OF DIRECTORS 5.01. Powers. The Board of Directors shalt have power to: A. Adopt and publish rules and regulations governing the use of the Common Areas and facilities, and the personal conduct of the Members and their guests thereon, and to establish penalties for the infraction thereof, B. Exercise for the Association all powers, duties and authority vested in or delegated to this Association and not reserved to the Members by other provisions of these Bylaws, the Articles of Incorporation, or the Declaration; C. Declare the office of a member of the Board of Directors to be vacant in the event such member shall be absent from three (3) consecutive regular meetings of the Board of Directors, and D. Employ a manager, a management company, an independent contractor, or such otter employees as they deem necessaxy, and to prescribe their duties. 5.02. Duties. It shall be the duty of the Board of Directors to: A. Cause to be kept a complete record of all its acts and corporate affairs and to present a statement thereof to the Members at the annual meeting of the Members, or at any special meeting when such statement is requested in writing by one-fourth (1/4) of the Class A members who are entitled to vote; B. Supervise all officers, agents and employees of this Association, and to see that their duties are properly performed; C. As more fully provided in the Declaration, to: Fix the amount of the monthly assessment against each Unit at least thirty (30) days in advance of each monthly assessment period; 2. Send written notice of each special assessment to every Owner subject thereto at least thirty (30) days in advance of each special assessment due date; and 3. Foreclose the lien against any Unit for which assessments are not paid within thirty (30) days after due date or to bring an action at law against the Owner personally obligated to pay the same. D. Issue, or to cause an appropriate officer to issue, upon demand by any person, a certificate setting forth whether or not any assessment has been paid. A reasonable charge may be made by the Board for the issuance of these certificates. If a certificate states an assessment has been paid, such certificate shall be conclusive evidence of such payment; E. Procure and maintain adequate liability and hazard insurance on property owned by the Association; Cause all officers or employees having fiscal responsibilities to be bonded, as it may deem appropriate; G. Cause the Coinmon Areas to be maintained. ARTICLE VI OFFICERS AND THEIR DUTIES 6.01. Enumeration ofOffices The officers ofthis Association shall be a President and Vice President, who shall at all times be members of the Board of Directors, a Secretary and a Treasurer, and such other officers as the Board may from time to time by resolution create. affairs 6.02. Election of Officers. The election of officers shall take place at the first meeting of the Board of Directors following each annual meeting of the Members. 6.03. Term. The officers of this Association shall be elected annually by the Board and each shall holhold office for one( 1) year unless he or she shall sooner resign, or shall be removed, or otherwise disqualified to serve. 6.04. Special Appointments. The Board may elect such other officers as the of the Association may require, each of whom shall hold office for such period, have such authority, and perform such duties as a Board may, from time to time, determine. 6.05. Resignation and Removal. Any officer may be removed from office with or without cause by the Board. Any officer may resign at any time giving written notice to the Board, the President or the Secretary. Such resignation shall take effect on the date of receipt of such notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 6.06. Vacancies. A vacancy in any office may be filled by appointment by the Board. The officer appointed to such vacancy shall serve for the remainder of the term of the officer he or she replaces. 6.07. Multiple Offices. The offices of Secretary and Treasurer may be held by the same person. No person shall simultaneously hold more than one (1) of any of the other officers except in the case of special officers created pursuant to Section 6.04. 6.08. Duties. The duties of the officers are as follows: The Meadows Condominium Owners' Association. ARTICLE X AMENDMENTS 10.01. These Bylaws may be amended, at a regular or special meeting of the Members, by a vote of a majority of a quorum of Members present in person or by proxy. 10.02. In the case of any conflict between the Articles of Incorporation and these Bylaws, the Articles shall control; and in the case of any conflict between the Declaration and these Bylaws, the Declaration shall control. ARTICLE XI MISCELLANEOUS The fiscal year of the Association shall begin on the first day of January and end on the 31st day of December of every year, except that the first fiscal year shall begin on the date of incorporation. IN WITNESS WHEREOF, we, being all of the Directors of the The Meadows Condominium Owners' Association, have hereunto set our hands this _ day of , 2004. CERTIFICATION I, the undersigned, do hereby certify: THAT I am the duly elected and acting Secretary of the The Meadows Condominium Owners' Association, and, THAT the foregoing Bylaws constitute the original Bylaws of said Association, as duly adopted at the meeting of the Board of Directors thereof, held on the _ day of , 2004. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of said Association this _ day of . 2004. EXHIBIT °B" (Real Property -"Land") Commencing at the Northwest corner of the S 1/2NE1/4SW 1/4 of Section 25, Township 6 North, Range 39 East, Boise Meridian, Madison County, Idaho; and running thence South 1716 feet; thence N89047'53" East 218.02 feet' thence S05030'04" West 265.31 feet to the South Section line of said Section 25; thence East along said Section line to the West right-of-way line of State Highway 20 (State Highway Project F6471(41)); thence Northeasterly along said Highway Right -of -Way to the North line of the Sl/2NE1/4SW 1/4; thence West 360 feet more or less to the point of beginning.