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Stonemead Est/FP-CS 931013 DEED TOTL 107.00 4534 0000000 3495 10=34N~ 10/14/93 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR STONEMEADE ESTATES 93200 3043 TABLE OF CONTENTS Page Number RECITALS ................................... ARTICLE 1. - DEFINITIONS ................. 1 1 1.01. Articles ................... 1 1.02. Association ................. 2 1.03. Board ....................... 2 1.04. Bylaws ...................... 2 1.05. City ........................ 2 1.06. Committee ................... 2 1.07. Common Area ................. 2 1.08. Completion of Sales ......... 2 1.09. County ...................... 2 1.10. Declarant ................... 3 1.11. Declaration ................. 3 1.12. Home ........................ 3 1.13. Improvement ................. 3 1.14. Lot ................... ~ ...... 3 1.15. Member ...................... 3 1.16. Mortgage .................... 3 1.17. Mortgagee ................ ~.. 3 1.18. Notice and Opportunity for Hearing 3 1.19. Owner ....................... 3 1.20. Person ...................... 4 1.21. Phase ....................... 4 1.22. Property .................... 4 1.23. Project ..................... 4 1.24. Recreational Common Area .... 4 1.25. Rules and Regulations ....... 4 1.26. Stonemeade Estates .......... 4 1.27. Supplemental Declaration .... 4 1.28. Voting Power ................ 5 ARTICLE 2. - SUBMISSION AND T]~M ..... .... 2.01. Submission .................. 5 2.02. Incorporation of Declaration Into Instruments ......... 5 2.03. Term ........................ 5 ARTICLE 3. - COMPLIANCE WITH MANAGF~NT DQCUMENTS 6 3.01. 3.02. Compliance with Declaration and Other Documents ....... Resolution of Conflicts Between Documents ......... 6 6 93200 3044 ARTICLE 4. - PROPERTY RIGHTS ............. 6 4.01. Common Area Easements ....... 6 4.02. Delegation .................. 7 4.03. Tenants ..................... 7 4.04. Reciprocal Easements ........ 8 4.05. Utility Easements ........... 9 4.06. No Subdivision of Lots; No Time-Sharing ........... 9 4.07. Sale of Common Area ......... 9 4.08. Rules and Regulations ....... 9 4.09. Enforcement ................ 10 4.10. Recreational Common Area ..... 10 ARTICLE 5. - COMMON AREA EASEMENTS AND RIGht-TS OF WAY; ENCUMBRANCES ................ 10 5.01. Dedications ................. 10 5.02. Encumbrances ................ 11 ARTICLE 6. - COMMON AREA AND LOT MAINT~NANqW. 11 6.01. Maintenance by Association.. 11 6.02. Maintenance by Owners ....... 11 6.03. Negligence .................. 12 6.04. Right to Enter .............. 12 6.05. Conveyance of Common Areas to Association byDeclarant 12 ARTICLE 7. - USE RESTRICTIONS ............ 12 7.01. Residential Use ............. 12 7.02. ,Garages ..................... 13 7.03. Driveway and Sidewalks ...... 13 7.04. Minimum Floor Area .......... 13 7.05. Building Materials - Exterior Items and Surfaces ......... 13 7,06. Fences and Walls ............ 13 7.07. Sidewalks ................... 13 7.08. Mailboxes ................... 14 7.09. Prohibited Uses ............. 14 7.10. Declarant's Rights .......... 18 7.11. Right to Enter .............. 19 ARTICLE 8. - MEMBERSHIp AND VOTING RIGHTS 19 8.01. Governing Body .............. 19 8.02. Membership .................. 19 8.03. Voting ...................... 19 8.04. Commencement of Voting Rights 20 8.05. Declarant's Voting Rights .. 20 8.06. Control by Declarant ........ 20 93200 3045 ARTICLE 9. 9.01. 9.02. 9.03. 9.04. 9.05. 9.06. 9.07. 9.08. 9.09. 9.10. 9.11. 9.12. ARTICLE 10. 10.01. 10.02. ARTICLE 11. 11.01. 11.02. 11.03. 11.04. ARTICLE 12. 12.01. 12.02. ARTICLE 13. 13.01 ARTICLE 14. 14.01. 14.02. 14.03. 14.04. 14.05. 14.06. 14.07. 14.08. 14.09. - COVENANTS FOR ASSESSM~NTR... 21 Covenant to Pay Assessments; Lien Personal Obligation ......... Use of Assessments .......... Reserve Funds ............... Regular Assessments ......... Special Assessments ......... Assessment as Remedy ........ Allocation of Assessments... Commencement of Assessments. Revised Assessments., ....... Delinquent Assessments; Fines Declarant Assessment ........ 21 22 22 22 23 24 24 24 24 25 25 26 26 Duty to Maintain Insurance.. Proceeds of Insurance ....... 26 27 - DAMAGE AND DESTRUCTION ...... 27 Damage to Lots .............. Minor Damage and Major Damage Defined ........... Minor Damage ................ Major Damage ......... - ....... 27 27 28 28 - EMINENT DOMAIN ............... 30 Eminent Domain .............. 30 Repair, Restoration, Reconstruction 30 INSPECTION OF IMPROVEMEN~.. 31 Inspection of Improvements.. 31 - ARCHITECTURAL CONTROb ....... 32 Establishment ............... 32 Purpose of the Committee .... 33 Development Standards ....... 33 Requirement of Committee Approval 33 Obtaining Committee Approval 34 Scope of Review ............. 34 Variance from Standards ..... 35 Enforcement ................. 35 Subcommittees and Delegation of Authority ................ 35 93200 3046 ARTICLE 15. 15.01. 15.02. 15.03. 15.04. 15.05. 15.06. 15.07. 15'.08. 15.09. ARTICLE 16. 16.01. 16.02. 16.03. ARTICLE 17. 17.01. 17.02. 17.03. 17.04. 17.05. 17.06. 17.07. 17.08. 17.09. EXHIBIT A MORTGAGEE PROTECTION ........ Interpretation,~ ............ Notices ..................... Mortgagee's Right to Information Damage and Destruction Rights Condemnation Rights ......... Right of First Refusal ...... Subordination ............... Payments by Mortgagees ...... Professional Management ..... ANNEXATION ................... Right to Annex .............. Procedure for Annexation .... Annexed Property ............ MISCELLANEOUS PROVISIONS ..... Power to Settle Claims ...... Independence of Provisions.. Notices ..................... Headings .................... Enforcement ................. Equal Opportunity Housing... Exhibit ..................... Amendments .................. FHA/VAApproval ........... '.. - LEGAL DESCRIPTION OF PROPERTY 36 36 36 36 36 36 37 37 37 38 38 38 38 38 39 39 39 40 40 40 40 40 40 42 45 93200 301 7 DE~ATI~OF COFENANTH CONDITIONS ANDP~STRICTIONS FOR STON~EADE ESTATES This Declaration is made as of the t3~day of~~$___1993 by CENTEX REAL ESTATE CORPORATION, a Nevada corporation, doing business as CENTEX HOMES ("Declarant") with reference to the following facts: .A. Declarant is the owner of certain real property (the "Property") in Dallas County, Texas, which is described in Exhibit A attached hereto and made a part hereof. B. Declarant intends to improve the Property as a planned development by dividing the Property into lots appropriate for single-family dwellings. Declarant intends to develop the Property under a common scheme and general plan for the improvement and maintenanceof the Property C. For this purpose Declarant intends to subject the Property to the covenants, conditions, restrictions, easements, liens, charges, assessments and equitable servitudes set forth in this Declaration, for the benefit of the Property and the future owners thereof. E. Declarant deems it desirable 'for the management and administration of the planned development and for the preservation of the values and amenities of the planned development to incorporate the Stonemeade Estates Homeowner Association, Inc. as a non-profit corporation under the laws of the State of Texas for the purposes of administering and enforcing the limitations, covenants, conditions, restrictions, easements, liens and equitable servitudes created by or imposed in accordance with the provisions hereof, collecting and disbursing the assessments and charges imposed in accordance with the provisions hereof, and exercising such other powers as may be authorized by this Declaration, by law, or by its Articles of Incorporation and Bylaws. NOW, THEREFORE, Declarant hereby declares as follows: ARTICLE i The following terms shall have the following meanings when used in this Declaration: 1.01. Articles. "Articles" means the Articles of Incorporation of the Association, including any amendments thereto. 93200 3048 · 1.02. AssoCiation. Homeowner Association, successors and assigns. "Association" means the Stonemeade Estates Inc., a Texas non-profit corporation, its 1.03. Board. Association. "Board" means the Board of Directors of the 1.04. Bylaws. "Bylaws" means the Bylaws of the Association, including any amendments thereto. 1.05. City. "City" means the City of Coppell in Dallas County in the State of Texas. 1.06. Committee. "Committee" means the architectural control committee established and empowered as provided in Article 14 hereof. 1.07. Common Ar~. "Common Area" means all property, whether improved or unimproved, real and personal, or any easement, use right, maintenance obligation, or other property right or obligation therein, owned or held bythe Association for the common use, enjoyment, or obligation of its Members, including without limitation (i) any Recreational Common Area (ii) any Project screening or decorative wall, designated for common maintenance by Declarant (iii) Project entrance monuments, right-of-way landscaping, irrigation systems, drainage facilities, detention ponds, and such other areas lying within dedicated public easements or rights-of-way adjacent to the Project ~s deemed appropriate by the Board for the preservation, protection and enhancement of the Project. 1.08. Completion of Sales. "Completion of Sales" means the earlier of (1) conveyance of all Lots in the Project to purchasers Other than a successor Declarant hereunder or (2) expiration of the later of (x) five (5) years from the closing of the first sale of a Lot or (y) five (5) years from the conveyance of the first Lot in the Phase most recently made subject to this Declaration; provided, however, if Declarant is delayed in developing the Project, constructing improvements or selling Lots and dwellings due to strikes or work stoppages; shortages of materials, supplies, fuel, power, or energy; moratoria or suspensions on issuance of land use permits and approvals or affecting the availability of water, sewer, power or other utilities or necessary services; inclement weather; civil strife; major disaster or other cause beyond Declarant's reasonable control, the time periods shall be extended by the period of any such delay. 1.09. County Texas. "County" means Dallas County in the State of 2 9221']N RN q 1.10. Declarant. "Declarant". means Centex Real Estate Corporation, a Nevada corporation, doing business as Centex Homes, and any successor or assign to whom Centex Real Estate Corporation assigns its interest as Declarant hereunder in whole or in part by instrument recorded in the official records of the County. 1.11. Declaration. "Declaration,, means this Declaration and all amendments or supplements hereto. 1.12. Home. "Home" means a residential dwelling unit constructed upon a Lot within the Property intended as an abode for one family. 1.13. Improvement. "Improvement" means any building, fence, wall, patio area, driveway, walkway, landscaping, antenna, sign, mailbox, pool, tennis court, or other structure or improvement which is constructed, made, installed, placed or developed within or upon, or removed from, any portion of the Property or any change, alteration, addition or removal of any such structure or improvement other than normal maintenance and repair which does not materially alter or change the exterior appearance, condition and color of same. 1.14. LOt. "Lot" means any numbered lot or plot of land, together with any improvements thereon, as shown upon any recorded final subdivision map covering the Project or a part thereof, which contains or is intended to contain a single family residential dwelling. 1.15. "Member" means a member of the Association. 1.16. Mortgage. "Mortgage" means a mortgage or deed of trust which constitutes a first lien upon a Lot given to a bank, savings and loan association or Other institutional lender for the purpose of securing indebtedness incurred to purchase or improve a Lot. 1.17. Mort~a~e~. "Mortgagee" means beneficial interest in any Mortgage. the holder of the 1.18. Notice and OPPOrtunity for Hearing. "Notice and Opportunity for Hearing" means giving at least fifteen (15) days' prior notice of a proposed action and the reasons therefor, and an opportunity to be heard by the Board, orally or in writing, not less than five (5) days before the effective date of the proposed action. 1.19. owner. "owner" means the record owner, whether one or more persons or entities, of a fee simple title to any Lot, and shall include Declarant as to any Lot owned by Declarant and the contract buyer under a recorded contract of purchase. "Owner" shall not include any person or entity who holds an interest in a Lot merely as security for the performance of an obligation or as 3 93200 3050 a tenant. 1.20. Person. "Person" means an individual, corporation, partnership, trustee or other legal entity capable of holding title to real property. 1.21. Phase. "Phase" means each of the Property and all the real property covered by a Supplemental Declaration recorded pursuant to Section 16.02 of this Declaration. 1.22. ProD~rt¥. "Property" means the real estate described on ~~_~hereto, which comprises approximately 27.565 acres, more or less, and which by current zoning and density approvals will permit the development of 89 Lots. 1.23. Pro4ect. "Project" means the planned development which shall be developed and constructed on the Property, and any additional Phases of real property made subject to this Declaration by recordation of a Supplemental Declaration pursuant to Section 16.02 of this Declaration. 1.24. Recreational CommQn Area. "Recreational Common Area" means all property, whether improved or unimproved, real and personal, or any easement, use, maintenance obligation, or other property right or obligation therein, owned or held by the Association for recreational purposes, including, without limitation, (i) any rights of use or occupancy in recreational property or facilities acquired by leasg, license, or other use agreement, and (ii) such portion of the Project, if any, which Declarant may or may not, in its sole discretion and without any obligation to do so, complete and convey or cause to be conveyed to the Association for the common use and enjoyment of its Members for recreational purposes, together with any and all improvements constructed thereon. 1.25. Rules and Re~ulatiQns. "Rules and Regulations" means reasonable and nondiscriminatory rules and regulations as may be adopted from time to time by the Association. 1.26. Stonemeade E~~. "Stonemeade Estates" means the planned residential community planned for development upon the Proprty, intended to be comprised of, including, but not limited to, the Lots and the Common Area. 1.27. Supplemental Declar~iQn. "Supplemental Declaration" means a supplemental declaration of covenants, conditions and restrictions which shall be recorded for the purposes of annexing additional property, to the Project and causing such property to be subject to the scheme of covenants, conditions and restrictions contained in this Declaration. 4 932.00 3051 1.28. Votina Power. "Voting Power" means the total number of votes held byMembers (in a class of Members of the Association, or of Members other than Declarant, as the case may be) whose membership at the time the determination of voting power is made has not been suspended in accordance with the provisions of this Declaration or the Rules and Regulations. Voting Power shall be computed by including all such Members whether or not such Members are present in person or by proxy at a meeting. All voting specifications and requirements shall apply to the entire Project. ARTICLE 2 SUBMISSION ANDTERM 2.01. ~. The Project shall be held, conveyed, hypothecated, encumbered, sold, leased, rented, used, occupied and improved subject to each and all of the limitations, covenants, conditions, restrictions, easements, liens, charges, assessments 'and equitable servitudes set forth herein, all of which are declared to be (i) in furtherance of a common scheme and general plan for the development, improvement and maintenance of the Project and (ii) for the purpose of enhancing, maintaining and protecting the value, desirability and attractiveness of the Project. Ail of the limitations, covenants, conditions, restrictions, easements, liens, charges, assessments and equitable servitudes set forth herein shall ~an with, be binding upon and inure to the benefit of the Project, shall be binding on and inure to the benefit of each and every person~having or acquiring any right, title or interest in the Project, shall be binding upon and inure to the benefit of the successors in. fnterest of such persons, and shall inure to the benefit of the Association, its successors and assigns. 2.02. Incorporation of Declaration into Instrument~. Any deed or other instrument by which a Lot is conveyed shall be subject to the provisions of this Declaration and shall be deemed to incorporate the provisions of this Declaration, whether or not the deed makes reference hereto. 2.03. Te~m. This Declaration shall remain in force for a term of twenty (20) years from the date this Declaration is recorded, after which time it shall be automatically extended for successive periods of ten (10) years, unless sooner terminated by the affirmative vote of seventy-five percent (75%) of the total Voting Power of the Association and the written consent of seventy-five percent (75%) of the Mortgagees. 5 93200 3052 ARTICLE 3 COMPLIANCE WITH MANAGE~NT DO~NTS 3.01. Compliance with Declaration and Other Docu~nt~. Each Owner, resident or tenant of a Lot shall comply with the provisions of this Declaration, the Bylaws, Rules and Regulations duly adopted by the Association, decisions and resolutions of the Association and its duly authorized representative, all as may be amended from time to time, and failure to comply with any such provisions, decisions or resolutionS, shall be grounds for an action to recover sums due for damages or for injunctive relief. 3.02. Resolution of Conflicts Between Documents. Each Owner covenants and agrees that the administration of the Project shall be in accordance 'with the provisions of this Declaration, the Articles, the Bylaws and Rules and Regulations duly adopted by the Association. If there are any matters of conflict or inconsistencies in the Bylaws, Articles and this Declaration, then the provisions of the Declaration shall prevail. In the event that anything shown on a recorded final subdivision map for all or any portion of the Project is in any way inconsistent with provisions of this Declaration, then the provisions of this Declaration shall prevail. If a dispute arises among Owners in regard to the administration of the Project, then the provisions of this Declaration shall prevail. ARTICLE 4 PROPERTY RIGHTS 4.01. Common Area Easemen~. Each Owner shall have a non-exclusive right and easement of use and enjoyment in and to the Common Area and of access to and from his Lot over any streets comprising a portion of the Common Area (if any), which rights and easements shall be appurtenant to and shall pass with the title to his Lot and subject to the following rights and restrictions: (A) The right of the Association, after Notice and Opportunity for Hearing, to limit the number of guests of an Owner, to charge reasonable admission and other fees for the use of the Recreational Common Area facilities (if any) and to limit the use of said facilities to Owners who occupy a residence in the Project. (B) The right of the Association to suspend the right of an Owner to use any Recreational Common Area facilities (1) for any period during which any fine against a Member or any assessment against such Owner's Lot remains unpaid; and, (2) after Notice and Opportunity for Hearing, for a period not to exceed thirty (30) days for any infraction of the Rules and Regulations; (C) The right of the Association to grant easements and to dedicate or otherwise convey all or any part of the Common Area as provided in this Declaration; 6 93200 3053 (D) The right of the Associat£on to borrow money to improve, repair, restore and reconstruct the Common Area and to place liens on the Common Area and otherWiSe encumber the Common Area for such purposes, subject to the approval of Members and Mortgagees as otherwise provided in this Declaration; (E) The right of the ~sociation to adopt Rules and Regulations governing use and enjoyment of the Common Area; and (F) Easements for ingress, egress, use and enjoyment over, in, to and throughout the Common Area for the benefit of Declarant. 4.02. ~9~~Q~..Any Owner may delegate his rights of use and enjoyment of the common Area and any facilities thereon to the members of his family or household residing on his Lot and to his guests and invitees while he is in possession of his Lot, subject, however, to reasonable restrictions imposed by the provisions of this Declaration, the Bylaws and the Rules and Regulations. Provided the notice required by section 4.05 of this'Declaration has first been given to the Association, a tenant of an Owner, while residing on such Owner's Lot, shall be entitled to use and enjoy the Common Area and any facilities thereon and to delegate rights of use and enjoyment in ~he same manner as if such tenant were the Owner of such Lot. No such delegation shall release an Owner from his obligations hereunder, including, without limitation, the obligation to pay regular and special assessments. Upon request, each Owner or tenant shall.notify the Secretary of the Association of the names of all persons to whom such Owner or tenant has delegated any rights of use and enjoyment of the Common Area and the relationship that each such person bears to such Owner or tenant. Any delegated rights of use and enjoyment are subject to suspension to the same extent as the rights of Owners. 4.03. Tenants. (A) Any Owner who rents or leases his Lot to a tenant shall not be entitled to use and enjoy the Recreational Common Area facilities or any other Common Area during the period the Lot is occupied by such tenant. (B) No Owner shall lease or rent less than an entire Lot and no more than one family shall live in any one Lot. Subject to section 7.11., the Lots'shall not be leased or rented for hotel or transient purposes and no rental agreement or lease shall be made for a period of less than ninety (90) days. Subject to the foregoing restrictions, Owners shall have the right to lease or rent their Lots, provided that any lease or rental agreement between an Owner and a tenant shall be in writing and shall provide that it is in all respects subject to the provisions of this Declaration, the Bylaws, and the Rules and Regulations and that any failure by the tenant to comply with such provisions shall be a 7 93200 3054 default under the rental agreement or lease. However, the failure of any lease or rental agreement to so provide shall not excuse any person from complying with the provisions of this Declaration, the Bylaws, and the Rules and Regulations. (C) In the event an Owner shall rent or lease his Lot such Owner shall immediately give to the Association in writing: (1) the name of the tenant and the Lot rented or leased; (2) (3) agreement; and the current address of such Owner; a true and complete 'copy of the lease or rental (4) the certification of the Owner that the tenant has been given a copy of this Declaration, any applicable amendments, the Bylaws and the Rules and Regulations and that such tenant has been advised of any obligations he may have thereunder as a tenant. (D) In no event shall any lease or rental agreement release or relieve an Owner from the obligation to pay regular and special assessments to the Association, regardless of whether the obligation to pay assessments has been assumed by the tenant in such lease or rental agreement. 4.04. Reciprocal Easements. There shall be reciprocal appurtenant easements between each Lotan~ such portion or portions of the Common Area as may be adjacent thereto and between adjacent Lots for the flow of rainwater from gutters and downspouts; provided, however, that no such easement shall unreasonably interfere with the use and enjoyment of the Common Area or any adjacent Lot. If any Common Area or Lot encroaches upon a Lot because of the placement, construction, reconstruction, repair, movement, settling or shifting of the improvements constructed, reconstructed or repaired in accordance with the provisions of this Declaration, an easement for the encroachment and for its maintenance shall exist to a distance of not more than one (1) foot as measured from any point on the common boundary between the Common Area and the Lot or between Lots, as the case may be, along a line perpendicular to such boundary at such point; provided, however, that in no event shall such an easement exist for willful encroachments. If any Lot improvement encroaches upon the Common Area as a result of construction, reconstruction, repair, shifting, settlement or movement of any portion of the Project, an easement for the encroachment and for its maintenance shall exist so long as it remains. 93200 305'5 4.05. Utilit~ Easements. Any easements for installation, maintenance, use or repair of public utilities or drainage facilities which are dedicated on any final subdivision map of the Project or created in some other way shall be kept free of buildings, and within such easements no structure shall be placed or permitted to remain which may damage or interfere with the installation, maintenance, use or repair of such public utilities or drainage facilities, or which may damage, interfere, or change the direction or flow of drainage in the easements. Ail such easements at all times shall be accessible to Declarant until the Project is completed and at all times shall be accessible to all persons installing, repairing, using or maintaining such utilities and drainage facilities. 4.06. No Subdivision of Lots; No Time-Sharing. There shall be no further subdivision or partition of any Lot. nor shall any Owner or any other person acquiring any interest in a Lot seek any partition or subdivision thereof. There shall be no time-sharing or other co-ownership which allows multiple Owners sequential possessory interests in a Lot. 4.07. Sale of Common Are~. Except as otherwise provided in this Declaration, no sale, transfer, dedication, hypothecation, partition, subdivision, abandonment, release or alienation of the Common Area shall occur or be valid, whether by act or omission of the Association, without (i) if a two-class voting structure is in effect, the vote or written consent of sixty-seven percent (67%) of the total Voting Power of each class of Me.mbers of the Association, or (ii) if a two-class voting structure is not in effect, the.vote or written consent of sixty-seven percent (67%) of the total Voting Power of the Association and the vote or written consent of sixty-seven percent (67%) of the Voting Power of the Association residing in Members other than Declarant. 4.08. Rules and Re~ulatiQn~. The Association shall have the right to adopt, publish and enforce Rules and Regulations governing the Project, the use and enjoyment of the Common Area, the Recreational Common Area and any facilities thereon, and the personal conduct thereon of the Owners, their guests, invitees, members of their families or households and tenants, provided the Rules and Regulations are approved (i) if a two-class voting structure is in effect, by the vote or written consent of a majority of the total Voting Power of each class of Members, or (ii) if a two-class voting structure is not in effect, the vote or written consent of a majority of the total Voting Power of the Association. The Members may amend any such Rules and Regulations adopted by the Board at any regular or special meeting of Members called for such purpose by (i) if a two-class voting structure is in effect, the vote or written consent of sixty-seven percent (67%) of the total Voting Power of each class of Members, or (ii) if a two-class voting structure is not in effect, the vote or written consent of sixty-seven percent (67%) of the total Voting Power of 93200 3056 the Association. Such Rules and Regulations shall be reasonable, shall not discriminate against Declarant (or have an adverse impact on Declarant or upon the sale of Lots or the construction of improvements thereon), and must be consistent with this Declaration, the Articles and the Bylaws. 4.09. Enforcement. The Association shall have the right, after Notice and Opportunity for Hearing, to levy fines for infraction of the provisions of this Declaration or the Rules and Regulations, provided (i) the Member shall have been warned in writing of a previous infraction within the preceding one (1) year, and (ii) the · fine conforms to the provisions of section 9.11. 4.10. Recreational Common A~a. Declarant may or may not, in its sole and absolute discretion, and with no obligation to do so, complete and convey or cause to be conveyed to the Association any Recreational Common Area, for use by Owners as a recreational facility. ARTICLE 5 COMMONAREA EASEMENTS AND RIGHTS OF WAY: ENCU~_~CES 5.01. Dedications. The Association shall have the power to grant easements in, on, over, through and across the Common Area for any public or quasi-public improvements or facilities and their appurtenances, including, without limitation, street, sewer, drainage, water, gas and sprinkler improvements and facilities, provided (i) any such easement does not un~easonably interfere with the use and enjoyment of the Common Area or any Lot and (ii) the prior written consent of Declarant shall be obtained so long as Declarant owns any Lot. Each Owner, by accepting a deed to a Lot, expressly grants to the Association an irrevocable power of attorney for the purpose of granting such easements in, on, over, through and across the Common Area. The President or other duly designated officer of the Association may execute, acknowledge and record in the official records of the County a certificate stating that the Board is the attorney in fact for the Owners for the purpose of such grant and that such power of attorney is properly exercisable in accordance with this Declaration. The acts of the Board in exercising its power of attorney shall be conclusively binding on all Owners. The power of attorney herein granted shall include authority to do such acts incidental to such grant and to incur such expenses as may be necessary or convenient in connection therewith. The Board, by resolution, shall instruct the appropriate officers of the Association to make, execute and deliver on behalf of any Owner, as his interest may appear, any and all instruments, certificates and documents, including but not limited to, releases, waivers, deeds, escrow instructions and conveyances of every kind and nature, as may be deemed necessary or convenient for such dedication or grant. 10 93200 3.057 5.02. Encumbrances. The Association shall have the right eo borrow money to improve, repair, restore and reconstruct the Common Area and to place liens on the Common Area and otherwise encumber the Common Area for such purposes (i) if a two-class voting structure is in effect, upon the vote or written consent of sixty-seven percent (67%) of the Voting Power of each class of Members of the Association, or (ii) if a two-class voting structure is not in effect, upon the vote or written consent of sixty-seven percent (67%) of the total Voting Power of the Association and the vote or written consent of sixty-seven percent (67%) of the Voting Power of the Association residing in Members other than Declarant. ARTICLE 6 COMMON AREAAND LOT MAINTENAN~ 6.01. Maintenance bvAssociatiQD. The Association shall repair and maintain the Common Area (including any Recreational Common Area) and any improvements, utilities and facilities located on the CommonArea. The Association's maintenance obligation shall arise upon the filing with the Association by Declarant of a notice of completion of Common Area Improvements, or any portion thereof, and the commencement of annual assessments against the Owners. 6.02. Maintenance by Owners. Each Owner, at all times, shall maintain, repair and otherwise be responsible for his Lot and the Improvements thereon. Without limiting the generality of the foregoing, and subject to the requirements of Article 14 of this Declaration, an Owner shall be respOnsible for replacement and reconstruction of improvements on his Lot required because of damage or destruction by fire or other casualty, and each Owner shall maintain, repair and replace the surface and subsurfaqe drainage facilities and appurtenances located on his Lot as may be necessary to maintain good and proper drainage of the Lot and other real property in the vicinity, except for such facilities the maintenance of which has been assumed by the City, County or other governmental entity. If any Owner, after Notice and Opportunity for Hearing, fails to maintain, repair and replace such drainage facilities and appurtenances as required herein, the Association, at the expense of such Owner, shall maintain, repair or replace such drainage facilities and appurtenances at the sole cost and expense of such Owner, and the Board, without the vote or written consent of Members, may levy a special assessment against such Owner to obtain reimbursement therefor as provided in section 9.07. No Improvement shall be placed or permitted to remain on any Lot which may damage or interfere with the use, maintenance, repair or replacement of such drainage facilities and appurtenances and no Owner shall do any work, construct any improvements, place any landscaping or suffer the existence of any condition whatsoever which shall alter or interfere with the drainage pattern for the Lots or Common Area as established in connection with the approval of the subdivision map or maps applicable'to the Project by the 11 qnKR City, except to the extent such alteration in drainage pattern is approved in writing by the Association and all public authorities having jurisdiction. Ail such drainage facilities and appurtenances shall at all times be accessible to Declarant until the Project is completed and at all times shall be accessible to the Association and all persons installing, using, maintaining, repairing or replacing such drainage facilities and appurtenances. Declarant may from time to time present for recordation in the official records of the County instruments showing approximate locations of subsurface storm drainage facilities and of subsurface groundwater drainage facilities. If for any reason any such instrument is not accepted for recording, Declarant may deliver such instrument to the Association, and the Association shall maintain the same as part of its permanent records. In either event, each Owner shall be deemed to have notice of the location of such drainage facilities as may be shown in such instrument. 6.03. Ne~li~eng~. The cost of repair or replacement of any Improvement to be maintained and kept in repair by the Association, which repair or replacement is required because of the act or omission of any Owner, shall be the responsibility of and paid for by such Owner. 6.04. RiGht to Enter. After reasonable notice to the occupant, the Association or its agents shall have access over and upon any Lot when necessary in connection with any repair, maintenance, 'or replacement of Improvements for which the Association is responsible or for the enforcement of this Declaration, and each Owner shall accept title to his Lot subjec% to such right of access of the Association or its agents. 6.05. Conveyance of Common Areas to Associatio~ by Declarant. Declarant shall have the right to convey title to any property owned by it, or any easement or interest therein, to the Association as a Common Area, and the Association shall be required to accept such conveyance. Any such conveyance shall be effective upon recording the deed or instrument of conveyance in the public records of the County. ARTICLE 7 USE RESTRICTIONS In addition to the restrictions set forth in Article 14 below, the following apply'to the Project: 7.01. Residential Use. Ail Lots shall be used for single- family residential purposes only. Only one (1) detached single family residence shall be erected, altered, placed or permitted to remain on any Lot. 12 93200 3059 7.02. ~q~u~.~. Each residence shall have a garage suitable for parking no less than two (2) nor mort than four (4) standard size automobiles, which garage conforms in design and materials with the main structure. Ail garage doors shall be closed at all times except as may be necessary for the entry and exit of vehicles and persons. 7.03. Driveways and Sidewalk-. Ail driveways and sidewalks shall be surfaced with concrete or a similar substance approved by the Committee. Maintenance of the driveways, driveway aprons and sidewalks located on a Lot shall be the responsibility of the Lot Owner. 7.04. Minimum Floor Area. The total air-conditioned living area of the main residential structure, as measured to the outside of exterior walls but exclusive of open porches, garages, patios and detached accessory buildings, shall be not less than 1400 square feet for a one (1) story residence and not less than 1500 square feet for a two (2) story residence, or the minimum habitable floor area as specified by the applicable governmental authority at the time of construction, whichever is greater. 7.05. Building Materials - Exterior Items and surfaces. The total exterior wall area of the main residential structure on a Lot shall be not less than seventy-five percent (75%) brick, brick veneer, stone, stone veneer, masonry or other material approved by the Committee. Roofing shall be constructed of wood, slate, clay. tile or composition material of a minimum weight of 220 pounds per 100 square feet of roofing area unlesB specifically approved otherwise by the Committee in writing before installation. Roof pitch shall be a minimum of 6/12, unless approved otherwise by the Committee. 7.06. Fences and Walls. Any fence or wall must be constructed of masonry, brick, wood or other material approved by the Committee. Chain link fencing shall not be allowed without prior approval of the 'Committee. No fence or wall shall be permitted to extend nearer to any street than the front building line of the residence upon the Lot upon which such fence or wall is situated, except for retaining walls installed by Declarant or retaining walls or decorative fences approved by the Committee. Fences or walls erected by Declarant shall become the property of the Owner of the Lot on which the same are erected and, as such, shall be maintained and repaired by such Owner. No portion of any fence shall exceed eight feet (8') in height. 7.07. Sidewalk~. Ail sidewalks shall conform to specifications and regulations of applicable governmental authorities and have the prior approval of the Committee. Each Owner shall be responsible for maintenance of the portion of any sidewalk located upon the Owner's Lot. 13 93200 3060 7.08. ~. Mailboxes shall be standardized and shall be constructed of a material and design approved by the Committee (unless clusterboxes are reqUired bY the U.S. Postal Service). 7.09. Prohibited Us~. (A) No temporary dwelling, shop, trailer or mobile home of any kind or any Improvement of a temporary character (except children's playhouses, dog .houses, greenhouses, gazebos and buildings for storage of lawn maintenance equipment, which may be placed on a Lot only in places which are not clearly visible from the street upon which the subject Lot fronts) shall be permitted on any Lot except that a contractor, with the prior written approval of the Committee, may have temporary improvements (such as a construction trailer) on a given Lot during construction of Improvements upon the Lot. No building material of any kind or character shall be placed or stored upon a Lot until the Owner thereof is ready to commence construction of Improvements. (B) No boat, marine craft, hovercraft, aircraft, recreational vehicle, pick-up camper, travel trailer, motorhome, camper body or similar vehicle or equipment may be parked for storage in the driveway or front yard of any dwelling or parked on any public street or alley in the Project, nor shall any such boat, vehicle or equipment be parked for storage in the side or rear yard of any residence unless screened totally from view by a garage, screening structure or fencing approved by the Committee. No such vehicle or equipment shall be used as a residence or office temporarily or permanently. This restriction shall not apply to any vehicle, machinery or equipment temporarily parked and in use for the construction, maintenance or repair of a residence in the immediate vicinity. (C) Trucks with tonnage in excess of one ton shall not be permitted to park overnight within the Project except those used by a contractor during the construction or repair of improvements. (D) No vehicle of any size which transports inflammatory or explosive cargo may be kept within the Project at any time. (E) No vehicles or similar equipment shall be parked or stored in an area visible from any street except passenger automobiles, passenger vans, motorcycles, pick-up trucks and.pickup trucks with attached bed campers that are in operating condition and have current license plates and inspection stickers and are in daily use as motor vehicles on the streets and highways of the State of Texas. 14 93200 3061 (F) No structure of a temporary character, such as a trailer, tent, shack, barn or other out-building shall be used on any Lot at any time as a dwelling house; provided, however, any contractor, with the prior written approval of the Committee, may maintain and occupy construction trailers during the construction period. (G) No oil drilling, oil development operation, oil refining, quarrying or mining operations of any kind shall be permitted within the Project, nor shall oil wells, tanks, tunnels, mineral excavations or shafts be permitted, upon or in any part of the Project. No derrick or other structure designed for use in quarrying or boring for oil, natural gas or other minerals shall be erected, maintained or permitted within the Project. (H) No animals shall be raised, bred or kept on any Lot or the Common Area, except that dogs, cats, or other household pets may be kept or maintained provided that they are not kept or maintained for commercial purposes. The number of household pets generally considered to be outdoor pets, such as dogs, cats, et cetera, shall not exceed three (3) in number except for newborn offspring of such household pets which are under nine (9) months of age. No animal shall be allowed if such animal constitutes an unreasonable annoyance, danger, inconvenience or nuisance to any other Owner. If the Board receives any complaint that an animal constitutes an unreasonable annoyance, danger, inconvenience or. nuisance, the Board shall afford the Owner of such animal Notice and Opportunity for Hearing, and if the Board finds that such animal constitutes an unreasonable annoyance, danger, inconvenience or nuisance, the Board may require that such animal be removed from the Project. The Board may adopt Rules and Regulations concerning animals which are more restrictive than the provisions of this Declaration, including rules requiring that all animals be kept on a leash when in the Common Area or outside a fenced yard and that animals be restricted to designated areas within the Common Area and that Owners are responsible for cleaning up any mess that a pet creates within any Lot or Common Area. The Board may adopt a rule prohibiting certain pets, which is more restrictive than the provisions of this Declaration, except that such rule shall not apply to animals residing in the Project at the time such rule is adopted. In any event, the Board at any time may require that any animal found to be anunreasonable annoyance, danger, inconvenience or nuisance be removed as provided herein. (I) No Lot or other area in the Project shall be used as a dumping ground for rubbish or a Site for the accumulation of unsightly materials of any kind, including without limitation, broken or rusty equipment, disassembled or inoperative cars and discarded appliances and furniture. Trash, garbage or other waste 15 93200 3062 shall not be kept except in sanitary containers in appropriate locations which may be specified by the Committee, such containers shall be situated and enclosed or screened so as not to be visible from any residential street, private drive or adjacent Lot, and shall only be displayed on the street the day of trash pickup and must be removed promptly following pickup. (J) any Lot. No individual water supply system shall be permitted on (K) No individual sewage disposal system or septic system shall be permitted on any Lot. (L) No garage, garage house or other out-building (.except for sales offices and construction trailers during the construction period which have been approved by the Committee in writing) shall be used as a residence by any Owner, tenant or other persons, unless it is a conversion approved in writing by the Committee, and the garage requirement for the Lot has been otherwise met. (M) No air-conditioning apparatus shall be installed on the ground in front of a residence. No air-conditioning apparatus shall be attached to any front wall or window of a residence. No evaporative cooler shall be installed on the front wall or window' of a residence. (N) Except with the written permiss£on of the Committee or as provided below, no antennas, satellite dishes, discs or other equipment for sending or receiving sound or video messages shall be permitted in the Project except antennas for AM or FM radio reception and UHF and VHF television reception. All antennas shall be located inside the attic of the main residential structure except with the written permission of the Committee. (O) No Lot or improvement shall be used for business, professional, commercial or manufacturing purposes of any kind. No activity, whether for profit or not, shall be conducted which is not related to single-family residential purposes. No noxious or offensive activity shall be undertaken within the Project, nor shall anything be done which is or may become an annoyance or nuisance to the neighborhood. Nothing in this subparagraph shall prohibit an Owner's use of a residence for quiet, inoffensive activities such as tutoring or giving music or art lessons so long as such activities do not materially increase the number of cars parked on the street or interfere with adjoining homeowners' use and enjoyment of their residences and yards. 16 93200 (P) No fence, wall, hedge or shrub planting which obstructs sight lines at elevations between two (2) mhd six (6) feet above the roadway shall be placed or permitted to remain on any corner Lot within the triangular area formed by the street right-of-way lines and a line connecting them at points twenty-five feet (25') from the intersection of the street right-of-way lines, or, in the case of a rounded property corner, from the intersection of the street right-of-way lines as extended. The same sight-line limitations shall apply on any Lot within fifteen feet (15') from the intersection of a street right-of-way line with the edge of a private driveway or alley pavement. No.tree shall be permitted to remain within such distance of such intersections unless the foliage line is maintained at sufficient height to prevent obstruction of such sight lines. (Q) Except for' children's playhouses, dog houses, greenhouses, gazebos and buildings for storage of lawn maintenance equipment, no building previously constructed elsewhere shall be moved onto any Lot, it being the intention that only new construction be placed and erected thereon. (R) No changes shall be made to any portion of a Lot (including without limitation any easement area, set back area, drainage channel, swale or other area) which may damage or interfere.with the installation and maintenance of utilities or which may change the overall drainage pattern of a Lot (including without limitation the alteration of existing topography or the installation of structures, plantings or other materials), without the prior written approval of the Committee and any appropriate governmental authority having authority to grant such approval. (S) No sign of any kind shall be displayed to the public view on any Lot except one (1) professional sign of not more than six (6) square feet advertising the property for rent or sale. Declarant shall not be bound by any sign or billboard restriction. The Committee shall have the right to remove any sign, billboard or other advertising structurethat does not comply with the foregoing requirements, and in so doing shall not be subject to any liability for trespass or any other liability in connection with such removal. All signs are subject to the approval of the Committee and may be required by the Committee to be removed if, in the sole judgment of the Committee, they are found to be inconsistent with the high standards of the Project. To protect the safety and harmony of the neighborhood, no person shall engage in picketing on any Lot, easement, right-of-way or Common Area within or adjacent to the Project, nor shall any vehicle parked, stored or driven in or adjacent to the Project bear or display any signs, slogans, symbols, words or decoration ~ntended to create controversy, invite 17 93200 .3061 ridicule or disparagement, or interfere in any way with the exercise of the property rights, occupancy or permitted business activities of any builder, Owner or Declarant. (T) The drying of clothes in public view is prohibited. (U) Except within fireplaces in the mainresidential dwelling and except for outdoor cooking, no burning of anything shall be permitted anywhere within the Project. (V) No abandoned, derelict or inoperative vehicles may be stored or located on any Lot unless visually screened from other Lots and from any residential street. 7.10. Declarant's Ri~ht~. Notwithstanding anything to the contrary contained in this Article or. elsewhere in this Declaration, Declarant, its agents, assignees, employees and contractors, and any other builders designated byDeclarant, shall not be restricted or prevented by this Declaration from doing, (and Declarant, its agents, assignees, employees, contractors, and designated builders shall have the right to do) such things or take such actions as they deem necessary', advisable or convenient for completion and improvement of the Project as a residential community and for the sale, rental or other disposition of Lots in the Project. The rights of Declarant, its agents, assignees, employees, contractors, and designated builders shall include, without limitation: (A) The right and easement of ingress in, over and upon the Common Area for the purpose of performing on any part or parts of the Project acts deemed necessary, advisable or convenient for the completion and improvement of the Project as a residential community and for the sale, rental or other disposition of Lots; (B) The right to erect, construct, maintain, demolish or remove structures and other improvements on any Common Area as they deem necessary, advisable or convenient for the completion and improvement of the Project as a residential community and for the sale, rental or other disposition of Lots; and (C) The right to use Lots and improvements owned byDeclarant or such designated builders as models, sales offices and contractor's offices and to construct and display promotional, informational and directional signs and other sales aids on or about any portion of the Project. 18 The rights under this Section shall terminate one (1) year after the Completion of Sales. Amendment of this section shall require (i) if a two-class voting structure is in effect, the vote or written consent of seventy-five percent (75%) of the Voting Power of each class of Members of the Association, or (ii) if a two-class voting structure is not in effect, the vote or written consent of seventy-five percent (75%) of the total Voting Power of the Association. Further, as long as Declarant owns a Lot in the Project, no amendment of this Section can be made without the written approval of Declarant. 7.11. Right to Enter. Any governmental authority or agency, including, but not limited to the-City and the County, their agents, and employees, shall have the right of immediate access to the Common Area at all times if necessary for the preservation of public health, safety and Welfare. ARTICLE 8 MEMBERSHIP AND VOTING RIGHTS 8.01. Governin~ Body. The Association shall be the governing body for all Owners with respect to the management, administration, maintenance, repair and replacement of the Project, as provided by this Declaration, the Articles, and the Bylaws. 8.02. ~~k~. Membership in t~e Association shall be composed of and limited to Owners. Each Owner, including Declarant, shall automatically be a Member of the Association and entitled to vote as set forth below. Membership shall be appurtenant to and may not be separated from ownership of a Lot. Upon termination of ownership, an Owner's membership shall automatically terminate and be automatically transferred to the new Owner of the Lot. 8.03. Voting. The Association shall have two classes of voting membership: Class A. Class A Members shall be all Owners with the exception of Declarant; provided, however, that Declarant shall become a Class A Member when its Class B membership ceases as provided hereinafter. Class A Members shall be entitled to one (1) vote for each Lot owned. When more than one person holds an ownership interest in any Lot, all such persons shall be Members, but no more than one vote shall be cast with respect to any Lot. The vote for any such Lot shall be exercised as the Members holding an interest in such Lot determine among themselves. In the event of disagreement, the decision of Members holding a majority of 19 interest in such Lot shall gOvern. Unless otherwise notified by a co-owner as to a dispute between the co-owners regarding their vote prior to the casting of that vote, the vote of any co-owner shall be conclusively presumed to be the majority vote of the Owners of that Lot. ~. Class B Member shall be Declarant and shall be entitled to three (3) votes for each Lot owned; provided that Declarant's Class B membership shall cease and be converted to Class A membership on the happening of either of the following events, whichever occurs earlier: (i) the conveyance by Declarant of seventy-five percent (75%) of all Lots in the Project to Owners other than a successor Declarant for use as residences, or (ii) five (5) years after the first Lot is conveyed to an Owner for use as a residence. Class B membership shall be reinstated at any time before the expiration of fifteen (15) years from the date of conveyance of the first Lot if additional Lots owned by a Class B member are annexed into the Project in sufficient numbers to restore a ratio of at least one Class B Lot for each three Class A Lots in the Project, but any such reinstated Class B status shall terminate upon the occurrence of the events set forth above. 8.04. Commence~en~ of Votin~ Riqht~. Voting rights attributable to an ownership interest shall not vest until the assessment against that interest has been levied bythe Association as provided in Article 9; provided, however, that voting rights shall be immediately vested with respect to amendments to this Declaration pursuant to section 17.08. 8.05. Declara~t's Voting RiGhts. No requirement for the approval of a prescribed majority of the Voting Power of Members of the Association other than Declarant for action to be taken by the Association is intended to preclude Declarant from casting votes attributable to Lots owned by Declarant. 8.06. Control by Declarant. Notwithstanding any other provision to the contrary in this Declaration, the Articles, or the Bylaws, Declarant hereby retains the right to appoint and remove any and all directors comprising the Board and any officer or officers of the Association until ninety (90) days after the first of the events to transpire outlined in Section 8.03 concerning the termination of the Class B Member status of Declarant; or the surrender by Declarant of the authority to appoint and remove directors and officers by an express amendment to this Declaration executed and recorded by Declarant. Upon the expiration of the period of Declarant's right to appoint and remove directors and officers of the Association pursuant to the provisions of this Section, such right shall automatically pass to the Owners, 20 3067 including Declarant if Declarant then owns one or more Lots; and a special meeting of the Association shall be called for and held within ninety (90) days from the date of the expiration of Declarant's rights hereunder. At such special meeting the Owners shall elect anew Board which shall undertake the responsibilities of running the Association and Declarant shall deliver the books, accounts, and records, if any, which Declarant has kept on behalf of the Association as well as any agreements or contracts executed by or on behalf of the Association which may still be in effect or operation. Each Owner by acceptance of a deed to or other conveyance of a Lot vests in Declarant such authority to appoint and remove directors and officers of the Association as provided in this Section. ARTICLE 9 COVENANTS FOR ASSES$~R. NTS 9.01. Covenant to Pay Assessments: Li~. Declarant, for each Lot owned by Declarant, hereby covenants to pay, and every Owner of any Lot by acceptance of a deed therefor, whether or not it shall be so expressed in such deed, covenants and agrees to pay, to the Association such regular annual assessments or charges and such special assessments or charges as may be levied by the Association pursuant to the provisions of this Declaration. The amount of any such annual or special assessment plus any other charges thereon, such as interest, late charges and costs (including attorneys' fees), as such may be provided in this Declaration, shall be and become a lien upon the Lot assessed when t~e Association causes to be recorded in the official records of the County a notice of assessment, which notice shall state: (A) The amount of such assessment and such other charges thereon as may be authorized by this Declaration; (B) A description of the Lot against which the same has been assessed; and (C) The name of the record owner of the Lot assessed. Such notice shall be signed by an authorized representative of the Association. Upon payment of such assessment and charges in connection with which such notice has been so recorded, or other satisfaction thereof, the Association, at the Owner's cost and expense, shall cause to be recorded a further notice stating the satisfaction and the release of the lien thereof. The lien provided for herein shall be prior to all other liens recorded subsequent to the recordation of such notice of assessment. Unless sooner satisfied and released or the enforcement thereof initiated as hereinafter provided, the lien shall expire and be of no further 21 force or effect one (1) year from the date of recordation of the notice of assessment. The one-year period may be extended by the Association for a period not to exceed one (1) additional year by recordation of a written extension thereof. The lien may be enforced by foreclosure in accordance with Texas law, including without limitation power of sale pursuant to non-judicial foreclosure, or in any other manner permitted by law. The Association shall have power to purchase the Lot at a foreclosure sale and to hold, lease, mortgage and convey the same. 9.02. Personal 0bl~qatiQn. Each regular annual or special assessment, together with any late charges, interest, collection costs and reasonable attorneys' fees, shall be the personal obligation of-each person or entity, other than any Mortgagee, who held an ownership interest in the Lot at the time such assessment was levied. If more than one person or entity held an ownership interest in the Lot at such time, the personal obligation to pay such assessment or installment respecting such Lot shall be both joint and several. No Owner may exempt himself from payment of assessments, or installments, by waiver of the use or non-use of any Recreational Common Area within the Project or of any other portion of the CommonAreaor by abandonment or leasing of his Lot. 9.03. Use of Assessments. Regular annual or special assessments paid by Declarant and other Owners shall be used to pay for operation, maintenance, preservation,, enhancement, repair and improvement of the Common Area, other purposes reasonably related to the foregoing, and to promote the recreation, health, safety and welfare of the Owners. In addition, such assessments shall be used to pay the cost of administration of the affairs of the Association, including payment of applicable taxes, and for the preservation of the Association's existence, to the extent properly allocable to the performance and exercise of the Association's duties and powers under this Declaration. The foregoing is intended as an authorization to the Association and shall not be construed to require expenditure of Association funds for any particular purpose. 9.04. Reserve Funds. The Board shall establish and maintain reserves in accordance with standard accounting practices and procedures for Common Area replacements and maintenance and the initial budget of the Association. Each budget subsequently adopted by the Board shall provide for funds to be placed in reserves. Funds deposited in reserve for a particular purpose shall be held for that purpose and shall not be expended for any other purpose, except that if the Board determines that funds held in reserve for a particular purpose exceed an amount reasonably required as a prudent reserve for that purpose, then, without the 22 vote or written consent of Members, the excess may be allocated to any other reserve fund established bythe budget of the Association and expended for the purpose for which such other reserve fund has been established. 9.05. Reoular Assessments. (A) The regular annual assessment for each Lot for the first assessment year shall be a maximum of $300.00 per Lot owned by a Class A Member and $75.00 per Lot owned by a Class B Member (the "Maximum Assessment Amount"). If an assessment year shall have fewer than twelve months, the Maximum Assessment Amount shall be appropriately prorated for the shorter period. For every assessment year after the first, the Maximum Assessment Amount shall automatically increase to One Hundred Ten Percent (110%) of the Maximum Assessment Amount for the preceding assessment year. (B) The Board shall fix the amount and due date of the regular annual assessment on a yearly basis at least sixty (60) days in advance of each assessment year; provided, however, that the assessment established for Lots owned by Class B Members shall always be twenty-five percent (25%) of the assessment established for Lots. owned by Class A Members, and further provided that the Board may not impose a regular annual assessment which is more than the Maximum Assessment Amount for such assessment year without (i) if a two-class voting structure is in effect, the vote or written consent of a majority of the Voting Power'of each class of Members of the Association or (ii) if a two-class voting structure.is not in effect, the vote or written consent of a majority of both the Voting Power of the Association and the Voting Power of the Association residing in Members other than Declarant. Written notice of the regular annual assessment shall be sent to every Owner who is not present at the time the regular annual assessment is so fixed. If the Board fails to so fix the regular annual assessment, the assessment applicable for the previous assessment year shall remain in effect until the Board shall fix a new regular annual assessment. Regular annual assessments shall be payable annually on the first day of each January or at such other time as the Board may fix. The Association shall, upon demand, and for a reasonable charge, furnish to any person having a legitimate interest a certificate signed by an officer of the Association stating whether the regular annual assessment and special assessments, if any, on a specified Lot have been paid and, if not, the amount due. 23 (~gNN -~nTn 9.06. Special Assessments. In addition to the regular annual assessments authorized herein, the Board may levy: (A) A working capital fund assessment equal to two (2) months regular assessment. Such assessment shall be levied upon the first purchaser of a Lot with a residential dwelling constructed thereon, at the t[ime of the conveyance of such Lot. The funds created by this assessment shall be included with the regular assessment funds and shall be available for all necessary expenditures of the Association. (b) In any assessment year, a special assessment against all Owners applicable to that year only for the purpose of defraying in whole or in part the cost of any construction, reconstruction, repair or replacement of capital improvements and related fixtures and persional property on or comprising a part of the Common Area; providedl, however, any such assessment shall be in the ratio of four (4)to one (1) for Lots owned by Class A Members and Class B Members, respectively, as provided in section 9,02 above, and further iprovided in any fiscal year, special assessments which exceed five percent (5%) of the budgeted gross expenses of the Association for that fiscal year may not be levied without (i) if a two-class voting structure is in effect, the vote or written consent of a majority of the Voting Power of each class of Members of the Association or (ii) if a two-class voting structure is not in effect, the vote or written consent o4 a majority of both the Voting .Power of the Association and the Voting Power of the Association residing in Members other than Declarant. 9.07. Assessment as Remedy. After Notice and Opportunity for Hearing, the Board, without the vote or written consent of Members, may levy a special assessment against an Owner as a remedy to reimburse the Association for costs (including attorneys' fees) incurred! in bringing the Owner, his lot or his residence into compliance with the provisions of this Declaration, the Bylaws or the Rules and Regulations. 9.08. Allocation of Assessments. Except as otherwise provided in this Declaration and except for the reduced assessments on Lots owned byClass B Members, all regular and special assessments shall be levieid equally against all Owners. 9.09. Commencement of Assessments. The regular annual assessme!nts provided for herein shall commence as to all Lots in the Property on the first day of the month next following the conveyanice of the first Lot with a dwelling to a purchaser, other than a isuccessor Declarant, for use as a residence. The first assessment year shall be the period commencing on the date regular 24 93200 3N71 annual assessments commence and ending on the December 31 next following. The regular annual assessment for the first assessment year shall be prorated from the amounts fixed by the Board for a full twelve-month year, based on the number of months to be contained in the first assessment year. Subsequent assessment years shall be each successive calendar year; provided, however, that at any time the Board may change the assessment year to correspond to a fiscal year selected by the Board. Assessments of Lots within each Phase of the Project which is annexed in accordance with the provisions of Article 16 below shall commence on the first day of the month next following the conveyance ~of the first Lot (within such Phase) with a dwelling to a purchaser, other than a successor Declarant, for use as a residence. 9.10. Revised Assessm~Bt~. Subject to the provisions of Section 9.0~, if at any time during the course of any year the Board shall deem the amount of the regular annual assessment to be inadequate or overadequate by reason of a revision of its estimate of either expenses or income or otherwise, the Board shall have the right, at a regular or special meeting, to revise the regular annual assessment for the balance of the assessment year. Any such revised assessment shall become effective on the first day of the month next following the date of adoption, and additional amounts payable shall be due (or refunds of overages shall be made by the Association) at such time as determined by the Board. 9.11. Delinquent Assessments; Fines. Any assessment not paid within ten (10) days after the due date Shall be delinquent. The Board may require that any delinquent assessment bear a late charge to cover administrative expenses incurred as a result of the late payment of the assessment. Late charges on delinquent assessments and fines levied as provided in Section 4.09 shall not exceed the following rates computed on the outstanding balance, which shall include any late charges previously assessed and unpaid, from month to month: (A) On so much of the outstanding balance as does not exceed one thousand dollars ($1,000), one and one-half percent (1.50%). (B) If the outstanding balance is more than one thousand dollars ($1,000), one percent (1%) on the excess over one thousand dollars ($1,000) of the outstanding balance. (C) If the late charge so computed is less than ten dollars ($10) for any month, ten dollars ($10). 25 93200 3072 No charge may be imposed more than once each month for the delinquency of the same payment, provided, however, that the imposition of a late charge on any delinquent payment shall not eliminate or supersede charges imposed on prior delinquent payments. When an assessment is paid more than ten (10) days after the due date of the assessment, late charges shall accrue from the first day following the due date of the assessment. The Association may bring legal action against the Owner personally obligated to pay a delinquent assessment or fine and, after Notice and Opportunity for Hearing, the Association may suspend a delinquent Owner's membership rights in the Association while the assessment or fine remains unpaid. In any legal action to enforce payment of an assessment or fine, the Association shall be entitled to recover interest, costs and reasonable attorneys' fees. 9.12. Declarant Assessment - ODtion ~Q Pay Deficit. So long as the Class B Membership shall exist, Declarant may annually elect to pay to the Association either: (a) the annual assessment established under Section 9.05 hereof for each Lot which it owns until such time as a Lot is conveyed to an Owner; or (b) the difference between the amount of assessments collected on all Lots (other than Declarant's Lots) subject to assessment and the amount of actual expenditures, including budgeted contributions to the Reserve Fund, required to operate the Association during the fiscal year. Unless the Declarant otherwise notifies the Board in writing at least sixty (60) days before the begirnging of each fiscal year, Declarant shall be deemed to have elected to continue paying on the same basis as during the immediately preceding fiscal year. To secure this obligation, the Association shall have lien rights as provided in Section 9.01 hereof, against the Lots owned by Declarant. The Association is specifically authorized to enter into subsidy contracts or contracts for services or materials or a combination of services and materials with Declarant or other entities. ARTICLE 10 INSURANCE 10.01. Duty to Maintain Insurance. (A) The Association shall have the duty and the authority to maintain fire and extended coverage casualty insurance on the Common Area in an amount not less than the full insurable value thereof (based upon current replacement cost), and liability insurance with limits in and amounts adequate, under standards in the insurance industry existing from time to time, to protect the Association and the Owners in the event of property damage, personal injury or death occurring in or about the Project. The 26 93200 3n7 Board shall have the authority to settle or enforce on behalf of the Association and on behalf of the Owners, by legal action or otherwise, any claim arising under any insurance carried by the Association. (B) Each Owner shall maintain casualty and personal liability insurance pertaining to his Lot, in such form and in such amounts as the Rules and Regulations may require. (C) Ail policies of insurance carried by the Association or the Owners shall include a waiver of subrogation if such waiver can be obtained, unless otherwise provided in the Rules and Regulations. (D) Notwithstanding any other provisions .contained herein, the Association shall continuously maintain in effect such casualty, flood and liability insurance and a fidelity bond meeting the insurance and fidelity bond requirements for planned unit development projects established by the Federal National Mortgage Association and Government National Mortgage Association, so long as either is a Mortgagee or Owner of a Lot within the Project, except to the extent such coverage is not available or has been waived in writing by the Federal National Mortgage Association or Government National Mortgage Association. 10.02. Proceeds of Insurange. Th~ proceeds of casualty insurance carried by the Association shall be paid to and held by the Association as trustee for the Owners, Declarant and Mortgagees for disbursement in accordance with the provisions of this Declaration. Except as otherwise provided herein, casualty insurance proceeds shall be used for repair, replacement or reconstruction to the extent required to effectuate repair, replacement or reconstruction. ARTICLE 11 DAMAGE AND DESTRUCTION 11.01. Damaae to Lots. Restoration and repair of damage to any Lot and Improvements thereon shall be made by and at the expense of the Owner thereof. 11.02. Minor Damaqe and Maior Damaae Defined. Damage or destruction to the Common Area where the estimated cost of repair, restoration or reconstruction does not exceed Fifty Thousand Dollars ($50,000) is referred to in this Declaration as "Minor Damage." Damage or destruction to the Common Area where the estimated cost of repair, restoration or reconstruction exceeds 27 Fifty Thousand Dollars ($50~000) is referred to in this Declaration as "Major Damage." 11.03. Minor Damage. If Minor Damage occurs, the Association shall promptly contract for the repair, restoration or reconstruction of the Common Area or improvements which have been damaged or destroyed. The difference, if any, between the insurance proceeds payable by reason of such Minor Damage and the cost of such repair, restoration and reconstruction may be recovered by one or more special assessments levied by the Board equally against all Owners. 11.04. Ma4or Damaae. In the event of any Major Damage to or destruction of any portion of the Common Area by fire or other casualty: (A) The Board shall as soon as reasonably practicable obtain such information as it deems necessary to make an informed judgment about whether to proceed with the repair, restoration or reconstruction of the Common Area so damaged or destroyed, which information may include: (i) obtaining firm bids from two (2) or more responsible and licensed general contractors for the repair, restoration and reconstruction of the Common Area so damaged or destroyed in accordance with the original plans and specifications to the extent reasonably practicable; and (ii) obtaining an appraisal setting forth an opinion as to.the value of the Common Area as it then exists together with an opinion of the increment in value, if any, which would accrue if the Common Area or some portion thereof were razed. (B) No later than one hundred eighty (180) days after the occurrence of Major Damage, the Board shall hold a special meeting of Members after notice as provided in the Bylaws. Such notice shall include a summary of the appraisal (if any) and of the bids for repair, restoration and reconstruction (if any), the amount of insurance proceeds payable to the Association as a result of such damage and destruction, and the amount of the special assessment, if any, necessary to make any difference between the insurance proceeds and the total cost of repair, restoration and reconstruction. (C) Unless within two. hundred forty (240) days after the occurrence of such Major Damage, (i) if a two-class voting structure is in effect, sixty-seven percent (67%) of the Voting Power of each class of Members, or (ii) if a two-class voting structure is not-in effect, sixty-seven percent (67%) of the total Voting Power of the Association agree by vote or written consent and a majority of all Mortgagees (based upon one (1) vote for each 28 93200 3075 Mortgage owned) agree in writing that such repair, restoration or reconstruction of the Common Area improvements which have been damaged or destroyed shall not take place: (a) the Association shall promptly contract for and complete such repair, restoration and reconstruction in accordance with plans and specifications approved by the Board; and (b) the difference, if any, between the insurance proceeds and the total cost of repair, restoration and reconstruction shall be recovered bya special assessment levied by the Association equally against all Owners. (D) If Major Damage occurs and it is determined in accordance with this Section 11.04 that the Common Area or any portion thereof shall not be repaired, restored or reconstructed, the Board shall cause an appraisal to be made (if such appraisal has not previously been obtained) and the appraisal shall be made available to the Owners and Mortgagees. The Association may then sell the Common Area or any portion thereof, for and on behalf of all Owners upon such terms and conditions and for such price as may be approved by a majority of the Board and ratified (i) if a two-class voting structure is in effect, by the vote or written consent of a majority of the Voting Power of each class of Members, or, (ii) if a two-class voting structure is not in effect, by the vote or written consent of a majority of the total Voting Power of the Association. For such purposes, the Board shall be and hereby is irrevocably appointed attorney in fact to act on behalf of all Owners to sell the Common Area or any pgrtion thereof upon such terms and conditions and for such price as shall have been ratified and approved by the Members and to do such acts incidental to the sale and to incur such expense as in its opinion will increase the value of the Common Area for the purpose of sale or as may be deemed necessary or convenient in connection with the sale, including but not limited to, the razing of any or all improvements. The acts of the Board in exercising its power of attorney shall be conclusively binding on all Owners. In connection with the sale of the Common Area or any portion thereof, the Board, by resolution, shall instruct the appropriate officers of the Association to make, execute and deliver on behalf of any Owner, as his interest may appear, any and all instruments, certificates and documents, including, but not limited to, maps, plans, releases, waivers, deeds, escrow instructions and conveyances of every kind and nature, as may be necessary or convenient for the sale. The Board shall be authorized to incur fees for legal and accounting services, appraisals, engineering, examination of title and other expenses reasonably related to the sale. 29 932.00 3076 (E) After payment of expenses directly relating to the sale of the Common Area and properly payable out of the escrow at the closing of the sale, the Board shall receive the remaining sale proceeds and shall disburse such proceeds, together with any insurance proceeds it holds, as follows: (1) To pay any outstanding expenses of the Association relating to the sale of the Common Area, including but not limited to, costs of appraisal, collection of insurance proceeds, engineering, legal and accounting expenses, costs of preparing the Common Area for sale and other related expenses; and (2) TO pay equally to the respective Owners in the Project on an equal per Lot pro rata basis; provided, however, that an equitable adjustment shall be made in the distribution to provide for any Owner's liability to the Association, including but not limited to, liability for unpaid assessments and charges. ARTICLE 12 EMINENT DOMAIN 12.01. Eminent Domain. If all or any portion of the Common Area is taken by action in eminent domain (hereinafter called a "taking"), the Association shall give written notice of the proceedings to all Owners and Mortgagees, and the condemnation award shall be fairly and equitably apportioned among the Owners, Mortgagees and the Association as the court may determine. A condemnation award which is not apportioned among the Owners by court judgment or byagreement between the condemning authority and each affected Owner shall be allocated first to the repair, restoration and reconstruction of any remaining portion of the Common Area and then any excess shall be distributed equally among the affected Owners (or any Mortgagee of an Owner to the extent such Mortgagee is entitled to such Owner's share of the proceeds). 12.02. Repair. Restoration, Reconstruction. If only a portion of a Common Area facility is taken, the Board shall promptly contract for the repair, restoration or reconstruction of the Common Area facility to a complete architectural unit, to the extent such repair, restoration and reconstruction is reasonably necessary and practical. If the cost of repair, restoration and reconstruction of the Common Area exceeds the amount awarded bythe court for such purposes, the difference may be recovered by a special assessment levied equally against all Owners. 30 93200 3077 ARTICLE 13 INSPECTION OF IMPROVEMSNTS 13.01. Inspection of ImDrovements. (A) Declarant may notify the Board when the Common Area Improvements (including landscaping) have been completed for the Property, .a particular Phase, or some portion thereof. Declarant shall request that the architect who designed the Common Area Improvements or other qualified engineers or architects inspect the Common Area Improvements as to which Declarant has given such notice. The person(s) selected by Declarant is (are) referred to herein as the "Expert" (whether one or more). Declarant shall pay the reasonable compensation of the Expert. (B) The Expert shall inspect the Common Area Improvements as to which Declarant has given notice of completion and requested inspection. Declarant and the Board may accompany the Expert during the inspection. The inspection shall be limited to a visual inspection, and Improvements shall not be uncovered. The Expert shall not be responsible for identifying latent defects. Promptly after the inspection is completed, the Expert shall submit a written report (the "Report") to Declarant and the Board specifying the respects, if any, in which the Improvements do not conform to the plans and specifications therefor and are defective, and if there are no such defects, the Report shall state that the Improvements conform to the plans and specifications therefor. The Report shall constitute conclusive and binding evidence that, except as otherwise provided therein and except for latent defects, if any, the Improvements have been Constructed in accordance with the plans and specifications therefor, and thereafter Declarant shall have no further liability, duty or obligation with respect to such Improvements, except to remedy any defects specified in the Report and except with respect to latent defects, if any, and the separate repair obligations of Declarant under express written warranty, if any. (C) Declarant shall correct any defects specified in the Report, and the Expert shall reinspect such Improvements within thirty (30) days after Declarant's request. Such reinspection shall be performed in the same manner as provided for the first inspection. Promptly after the reinspection is completed, the Expert shall submit another written report (the "Reinspection Report") to Declarant and the Board specifying the defects specified in the Report which have not been corrected, if any, and if all such defects have been corrected the Reinspection Report shall state that the Improvements conform, to the plans and specifications therefor. The Reinspection Report shall constitute 31 93200 3078 conclusive and binding evidence that, except as otherwise provided therein and except for latent defects, if any, the Improvements have been constructed in accordance with the plans and specifications therefor, and thereafter Declarant shall have no further liability, duty or obligation with respect to such Improvements, except to remedy any defects specified in the Reinspection Report, and except with respect to latent defects, if any, and the separate repair obligations of Declarant under express written warranty, if any. (D) Additional inspections and Reinspection Reports shall be made, if necessary, all in accordance with and with the same effect as provided hereinabove. (E) If the Improvements to be inspected are landscaping Improvements, then notwithstanding anything to the contrary contained herein the Expert shall be a horticulturalist or landscape architect. In all other respects, the provisions of this section shall apply to the inspection of landscaping Improvements. (F) Within ten (10) days after all defects have been corrected, as evidenced by a Report or Reinspection Report, the Board shall accept the Improvements in writing. ARTICLE 14 ARCHITECTURAL C0NTRpL 14.01. Establish~$nt. "Committee,, shall mean the architectural control committee, which shall be the governing body charged with using its best efforts to promote and ensure a high level of taste, design, quality, harmony and conformity throughout the Property consistent with this Declaration. Until the Termination of Declarant Control, referred to below, Declarant shall constitute the Committee, and may approve Plans and Submissions or take other actions on behalf of the Committee in Declarant's own name or in the name of the Committee. After the Termination of Declarant Control, the Committee shall be composed of at least three (3) individuals appointed by the Board, each of whom shall be an Owner. The Committee shall act by simple majority vote. In the event of death, resignation or other removal of any Board appointed member of the Committee, the Board shall appoint a successor member. No member of the Committee shall be entitled to compensation for, or be liable for claims, causes of action or damages arising out of services performed pursuant to this 'Declaration. Declarant shall cease to control and constitute the Committee on the earlier of: (a) the date on which Declarant records in the County land records a document declaring the termination of its control of the Committee, or (b) at such time as Declarant no longer owns a Lot 32 93200 30 9 within the Property (which may be referred to in this Declaration as "Termination of Declarant Control ") . 14.02. Purpose of the Committee. The Committee is established to provide a system of review for the construction or modification of all Improvements within the Property. No Improvement shall be commenced, improved or altered, nor shall any grading, excavation, tree removal, landscaping or change of exterior color or other work which in any way alters the exterior appearance of an Improvement b.e done without the prior written approval of the Committee. 14.03 Development Standard~. The Committee is empowered to publish or modify from time to time, design and development standards for the Property, including, but not limited to, standards for the following ("Standards"): (i) architectural design of Improvements, including, but not limited to, design standards for any Home or other Improvement constructed upon a Lot; (ii) fences, walls and similar structures; (iii) exterior building materials and colors; (iv) exterior landscaping; (v) exterior appurtenances relating to utility installation; (vi) signs and graphics, mailboxes and exterior lighting; (vii) building setbacks, pools and pool decks, side yards and related height bulk and design criteria; (viii) pedestrian and bicycle ways, sidewalks and pathways; and (ix) all buildings, landscaping and Improvements on lands owned or controlled by the Association. After Termination of Declarant Control, a copy of any Standards promulgated by the Committee shall be subject to approval ~y the Board. After the Board's approval, a copy of the Standards will be made available to all Members. 14.04 Reouirement of Committee ~pprQval. No Improvement of any kind shall be erected, placed or maintained, and no addition, alteration, modification or change to any Improvement shall be made without the prior written approval of the Committee. For purposes of this Declaration, Declarant Improvements means any Improvement erected, placed, or maintained with the approval of Declarant, including, without limitation, any building, wall, fence, swimming pool, tennis court, screened enclosure or landscaping, constructed, installed or placed by or with the approval of Declarant, and additions, alterations, modifications or changes to any of the foregoing (collectively, "Declarant Improvements"). Notwithstanding anything to the contrary contained above, Declarant Improvements are not subject to the approval of the Committee and are deemed to conform to the plan of development for the Property. 33 93200 3080 14.05 Obtainin~ Committee ADDrOVa]. In order to obtain the approval of the Committee, a complete set of plans and specifications ("Plans") for proposed Improvements shall be submitted to the Committee for its review. The Plans shall include, as appropriate, the proposed location, grade, elevations, shape, dimensions, exterior color plans, approximate costs, and nature, type and color of materials to be used. The Committee may also require the submission of additional information and materials as may be reasonably necessary for the Committee to evaluate the proposed Improvement or alteration ("Submissions,,). The Committee shall have the right to refuse to approve any proposed Plans which, in its sole discretion, are not suitable or desirable. Any and all approvals or disapprovals of the Committee shall be in writing and shall be sent to each respective Owner submitting same. In the event the Committee fails to approve or to disapprove in writing any Plans and/or Submissions after: (i) .submission to the Committee of the last item of the Plans and Submissions requested by the Committee, so that the Committee has a complete package of all Plans and Submissions requested by the Committee; and (ii) thirty (30) days have elapsed since submission and written request for approval or disapproval was delivered to t~e Committee by the Owner; then said Plans and Submissions shall be deemed to have been approved by the Committee provided, however, that no Improvement shall be erected or shall be allowed to remain which violates any conditions or restrictions contained in this Declaration, or which violates any applicable zoning Or building ordinance or regulation. The approval by the Committee relates.only'to the aesthetics of the Improvements shown on the Plans and Submissions and not to their sufficiency or adequacy. Each Owner shall be responsible for obtaining all necessary technical data and to make application to and obtain the approval of the appropriate governmental agencies prior to commencement of any construction. 14.06 SCOPe Of Review. The Committee shall review and approve or disapprove all Plans and Submissions solely on the basis of aesthetic standards as to the aesthetic quality of materials and workmanship to be used, suitability and harmony of location, structure and external design in relation to surrounding topography and structures and the overall benefit or detriment which would result to the immediate vicinity and to the Property as a whole and any other factors deemed relevant to the review by the Committee in its opinion, reasonably exercised. The Committee shall take into consideration the aesthetic aspects of the architectural design, placement of buildings, landscaping, color schemes, exterior finishes and materials and similar features, and shall not be responsible for reviewing, nor shall its approval of any Plans be deemed approval of, any design or plan from the standpoint of structural safety or conformance with building or other codes. 34 9:3200 3:08 14.07 Variance from Standards. The Committee may authorize, in a reasonable manner so as not to destroy the general scheme or plans of the development of the Property, variances from compliance with any Standards which it has promulgated pursuant to its authority when circumstances such as topography, natural obstructions, hardship, aesthetics or environmental considerations may require. If any such variances are granted, no violation of the restrictions contained in this Declaration shall be deemed to have occurred with respect to the matter for which the variance was granted. The granting of such a variance shall not operate to waive any of the terms and provisions of this Declaration for any purpose, except as to that particular property and particular provision hereof or Standards promulgated hereby which are covered by the variance. Such variance shall be evidenced in writing. 14.08 Enforcement. There is specifically reserved unto the Committee the right of entry and inspection upon any Lot or other portion of the Property for the purpose of determination by the Committee whether there exists any Improvement which violates the terms of any approval by the Committee or the terms of this Declaration. Except in emergencies, any exercise of the right of entry and inspection bythe Committee hereunder should be made only upon reasonable notice given to the Owner of record at least twenty-four (24) hours in advance of such entry. The Committee is specifically empowered to enforce the provisions of this Declaration by any legal or equitable remedy, and in the event it becomes necessary to resort to litigation to determine the propriety of any Improvement, or to remove any unapproved Improvements, the prevailing party in such litigation shall be entitled to recover all court costs, expenses and reasonable attorneys fees in connection therewith. The association shall indemnify and hold harmless any member of the Committee from all costs, expenses and liabilities, including attorneys fees incurred by virtue of any member's service as a member of the Committee, provided such member acted in good faith and without malice. 14.09 Subcommittees and Deleqation Qf Authority. The Committee may establish subcommittees for the purpose of acting on behalf of the Committee with respect to similar circumstances, situations, or types of Improvements, such as a swimming pool subcommittee or a subcommittee which would deal with modifications of existing Improvements or additional new Improvements ancillary to an existing Home, in contrast to the construction of initial Improvements upon a previously unimproved Lot. All rights and powers of the Committee may be delegated to such subcommittee with regard to the subject matter of the subcommittee. The rights and powers of the Committee may be assigned to a management company, an architect, design professional or other entity, or any portion of 35 93200 3082 such rights and powers applicable to a particular subcommittee or area of similar circumstance. ARTICLE 15 MORTGAGEE PROTECTION 15.01' Interpretation. In the event any provision of this Ar~L[g~_9_~ is inconsistent with or contrary to any other provision of this Declaration, the provisions of this ~ shall control. 15.02. 'Notices. Any Mortgagee of any Lot, by written notice to the Association setting forth the Lot encumbered, the Owner thereof and the address to which notices may be sent, may request and thereby be entitled to receive written notice from the Association of (i) any default which is outstanding for sixty (60) days 'or longer by the Owner of such Lot in the performance of his obligations under or in compliance with the provisions of this Declaration, the Bylaws or the Rules and Regulations, (ii) any substantial damage to or destruction of the Common Area, including the Improvements located thereon, or, if known to the Association, any substantial damage to or destruction of a Lot, including the Improvements located thereon, and (iii) any proposed or threatened taking by power of eminent domain of the Common Area or any portion thereof or of any Lot or portion thereof. 15.03. Mortaa~ee's Right to Informatioh~ Upon written request to the Association, a Mortgagee is entitled to: (1) inspect the books and records of the Association during normal business hours; and (2) receive an annual financial statement of the Association within ninety (90) days following the end of any fiscal year of the Project; and (3) receive written notice of all meetings of the Association and to designate a representative to attend all such meetings. 15.04. Damage and Destruction Rights. In the event of substantial damage to or destruction of any Lot or Improvements to a Lot or any part of the Common Area no provision of any document establishing the Project shall entitle the Owner of a Lot or other party to priority over such Mortgagee with respect to the distribution to such Owner of any insurance proceeds. 15.05. Condemnation Rights. If any Lot or portion thereof or the Common Area or any portion thereof is made the subject matter of any condemnation proceedings or is otherwise sought to be acquired by a condemning authority, no provision of any document establishing the Project shall entitle the Owner of a Lot or other party to priority over such Mortgagee with respect to the 36 93200 distribution to such Owner of the proceeds of any award or settlement. 15.06. Right of First Refusal. Any right given by an Owner of a Lot to any third person to purchase such Lot before it is offered for sale or sold to any other person (such right commonly known as a "right of first refusal") shall not be binding upon or enforceable against any Mortgagee acquiring such Lot pursuant to exercise of remedies provided for in the Mortgage, including foreclosure by judicial action or exercise of a power of sale, or by acceptance of a deed or assignment in lieu of foreclosure. 15.07. Subordination. No provisions contained in this Declaration shall defeat or render invalid the lien of any Mortgage which is made in good faith and for value. The lien of the assessments provided for herein shall be subordinate to the lien of any Mortgage recorded prior to the date any such assessment becomes due. This subordination shall apply only to assessments on a Lot which have become due and payable prior to a sale or transfer of such Lot pursuant to a decree of foreclosure or exercise of power of sale. Any Mortgagee who acquires title to or comes into possession of a Lot pursuant to exercise of remedies provided for in the Mortgage, including foreclosure by judicial action or exercise of a power of sale, and any purchaser at a foreclosure sale,' shall take the Lot free of any claims for unpaid assessments or charges against the Lot which have accrued prior to the time such Mortgagee or purchaser acquires fitle to or comes into possession of the Lot; provided, however, this exception shall not be applicable to any claim for assessments or charges levied by the Association against all Lots for the purpose of recovering any revenue lost by reason of the nonpayment of past due assessments upon such Lot; and provided further, that except as otherwise provided in this section, all of the limitations, restrictions, covenants, conditions, easements, liens, charges, assessments, and .equitable servitudes contained herein shall be binding upon any Owner whose title is derived through foreclosure sale, trustee's sale or otherwise. Except as provided above, the sale, transfer or conveyance of title to a Lot shall not relieve a selling Owner from personal liability for any assessments which became due and payable prior to such sale, transfer or conveyance, nor relieve such Lot from a duly recorded lien for any such prior unpaid assessment. 15.08. payments by Mortgagees. Any Mortgagee, after at least ten (10) days' prior written notification to the Association of the items to be paid and the failure of the Association within such time to make payment, may pay, alone or in conjunction with other Mortgagees, delinquent taxes, liens or assessments which may be or become a charge against the Common Area, or any portion thereof, 37 93200 30R and any overdue premiums on policies of fire and extended coverage insurance for the Common Area and in the event of a lapse of such a policy of insurance, may pay premiums to secure a new policy. In the event such payments are made, the Mortgagee making such payment shall be entitled to immediate reimbursement from the Association to the extent of the payment made. 15.09. Professional Manaaement. In the event that Declarant or the Association enters into any contract with any person or entity to provide management or maintenance services to the Project, such contract shall not exceed one (1) year and shall provide that the Association shall have the right to terminate the contract for cause upon thirty (30) days' written notice and without cause upon ninety (90) days' written notice, without payment of a termination fee. ARTICLE 16 16.01. RiGht to Annex. Annexation of any real property shall require the vote or written consent of not less than sixty-seven percent (67%) of the total voting power of the Association residing in Members other than Declarant. Annexation of additional property may be accomplished in Phases. 16.02. Procedure for Annexa~ioD. Any annexation shall be made by recordation of a Supplemental Declaration covering the real property to be annexed. The Supplemental Declaration shall describe the real property to be annexed and state that annexation is being made pursuant to this Declaration for the purpose of extending the jurisdiction of the Association to cover the Phase of the Project being annexed. The Supplemental Declaration may contain such complementary additionsand modifications to the terms of this Declaration as may be necessary or desirable to reflect the 'different character, if any, of the Phase being annexed and as are not inconsistent with the general scheme of this Declaration. Annexation shall be effective upon recordation of the Supplemental Declaration and thereupon the real property described therein shall be subject to all of the provisions of this Declaration, to the extent made applicable by the Supplemental Declaration, and to the jurisdiction of the Association pursuant to the terms of this Declaration, the Articles and Bylaws. 16.03. Annexed Property. Each Owner of a Lot in an annexed Phase automatically shall be a Member of the Association and such Owners and annexed real property shall be subject to assessment by the Association for the benefit of the Project or any part thereof. Assessments of Lots in an annexed Phase shall commence upon the 38 93200 3085 first day of the month next following the first conveyanceof a Lot in such Phase to a purchaser, as provided in Section 9.09. The Association shall have the duties, responsibilities and powers set forth in this Declaration, the Articles and Bylaws with respect to annexed real property. Except as may otherwise be expressly provided in this Declaration or any Supplemental Declaration, the Project shall be managed and governed by the Association as an entirety. Assessments collected from Owners in the Project may be expended bythe Association anywhere in the Project without regard to the particular Phase, area or subdivision from which such assessments came. Ail Owners shall have ingress and egress to and from all the Common Area throughout the Project and any Phase thereof and shall have use and enjoyment of any recreational facilities and other amenities contained within the Common Area throughout the Project, provided that any such use shall be subject to the provisions of this Declaration, any Supplemental Declaration, the Bylaws and the Rules and Regulations. ARTICLE 17 MISCELLANEOUS PROVISIONS 17.01. Power to Settle ClaSms. The Board shall have the power and authority to compromise, settle, release and otherwise adjust claims, demands, causes of action and liabilities in favor of the Association and the Owners, on behalf of the Association and Owners, as the case may be, provided any such claim, demand, cause of action or liability arises out of or relates to a condition or defect common to all or a majority of the Lots or Improvements constructed thereon, or to the development, design, construction, condition, repair or maintenance of or damage or injury to or defect in the Common Area or part thereof, and the Association shall have the right and the power to make and receive all payments or other consideration necessary therefor or in connection therewith. For such purposes, the Board shall be, and hereby is, irrevocably appointed attorney in fact to act on behalf of all Owners upon such terms and conditions and for such consideration as may be approved by a majority of the Board. 17.02. Independence of Provisions. The provisions of this Declaration. shall be deemed independent and severable. Invalidation or partial invalidation of any provision of this Declaration by judgment or court order shall not affect any other proviSion of this Declaration, and the remaining provisions shall remain in full force and effect. 39 17.03. Notice.~. Notices shall be in writing and shall be addressed as follows: (i) if to an Owner, to the address of his Lot; (ii) if to Declarant, to Centex'Real Estate Corporation, 1660 S. Stemmons Frwy., #150, Lewisville, Texas 75067; and (iii) if to the Association, to the address of the Project. The Association may designate a different address for notices by giving written notice of such change of address to all Owners and to Declarant. Declarant may designate a different address for notices by giving written notice of such change of address to all Owners and to the Association. Any Owner may designate a different address for notices by giving written notice of such change of address to the Association and to Declarant. 17.04. Headinqs. The headings used in this Declaration are for convenience and reference only and the words contained therein shall not be held to expand, modify, or aid in the interpretation, construction, or meaning of this Declaration. 17.05. Enkor~ement. The failure of any Owner to comply with the provisions of this Declaration, the Bylaws or the Articles shall entitle the Association, any Owner, or any of them, to maintain an action for the recovery of damages or injunctive relief or both, and such persons or entities, or any of them, shall have the right to enforce.all limitations, restrictions, covenants,'conditions, easements, liens, charges, assessments and equitable servitudes imposed by or pursuant to the provisions of this Declaration. Failure to enforce the provisions of this Declaration shall not be deemed a waiver of the right to do so thereafter. All remedies provided in this Declaration shall be cumulative and in addition to any other remedies available under law. 17.06. Ec~al ODDortunitv Hous~nq. This Project provides equal opportunity housing. Each Lot sold shall be sold without regard to the race, creed, color, national origin, ancestry, religion, marital status, age or sex of the purchaser. 17.07. Exhibit. Exhibit A which is attached to this Declaration, is incorporated herein and made a part hereof by this reference. 17.08. Amendments. (A) During any period in which Declarant owns any portion of the Project, Declarant may amend this Declaration without the approval of any Member or Mortgagee provided the amendment does not materially alter or change any Owner's right to the use and enjoyment of such Owner's Lot or of the Common Area as set forth in this Declaration and the amendment does not adversely affect the 40 93200 3087 title to any Lot and during any such period this Declaration may not be amended without the written joinder of Declarant. In the event that such amendment would materially and adversely affect the security title and interest of any Mortgagee, such amendment shall be valid only upon the written consent of sixty-seven percent (67%) of the Mortgagees (based on one vote for each mortgage owned). (B) Should the Veterans' Administration, the FederaI Housing Administration, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation subsequently delete any of their respective requirements which necessitate the provisions of this Declaration or make such requirements less stringent, the Board, without approval of the Owners, may cause an amendment to this Declaration to be recorded to reflect such changes. (C) Any other amendments of this Declaration shall require (i) if a two-class voting structure is in effect, the vote or written consent of sixty-seven percent (67%) of the Voting Power of each class of Members of the Association as such classes are set forth in the Bylaws and this Declaration; or (ii) if a two-class voting structure is not in effect, the vote or written consent of both sixty-seven percent (67%) of the Voting Power of the Association and the vote or written consent of sixty-seven percent (67%) of the Voting Power of the Association residing in Members other than Declarant; provided, however, that the percentage of the Voting Power (of each class of Members, of the Association, and of Members other than Declarant) necessar~ to amend a specific provision of this Declaration shall not be less than the prescribed percentage of affirmative votes required for action to be taken under that provision. (D) Notwithstanding anything to the contrary contained in this Declaration, any amendment which establishes, governs, provides for or regulates any one of the following: (i) voting; (ii) assessments, assessment liens or subordination of such liens; (iii) reserves for maintenance, repair and replacement of the Common Area; (iv) insurance or fidelity bonds; (v) right to use of the Common Area; (vi) responsibility for maintenance and repair of the Project; (vii) expansion or contraction of the Project or the addition, annexation or withdrawal of property to or from the Project (other than as specifically permitted hereby); (viii) the boundaries of any Lot; (ix) interests in the Common Area; (x) leasing of ownership interests; (xi) imposition of any right of first refusal or similar restriction on the right of an Owner to sell, transfer, or otherwise convey his Lot; (xii) any provisions which are for the express benefit of Mortgagees; or (xiii) any other material amendment shall require (i) if a two-class voting structure is in effect, the vote or written consent of sixty-seven 41 93200 3088 percent (67%) of the Voting Power of each class of Members, or (ii) if a two-class voting structure is not in effect, the vote or written consent of sixty-seven percent (67%) of the total Voting Power of the Association, and the written consent of sixty-seven percent (67%) of the Mortgagees (based on one vote for each Mortgage owned). Any Mortgagee who does not respond within thirty (30) days request by the Association for consent to an amendment of this Declaration shall be deemed to have approved such request. (E) AnY instrument amending this Declaration must be recorded in the official records of the County, and in the case of an amendment made by the Owners, such amendment shall contain a certification by the President and Secretary of the Association that the amendment has been correctly adopted in accordance with the provisions of this Declaration. Any such amendment shall be effective upon the date of recordation. (F) Notwithstanding any other provision hereof to the contrary, the Declarant may, without the joinder or consent of any Owner, Member, Mortgagee or any other party, (i) amend this Declaration at any time that Declarant owns all Lots within the Project, or (ii) amend this Declaration at any time to comply with the specific requirements of the Veterans Administration, the Federal Housing Administration, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or any other governmental agency or quasi-governmental agency which insures, guaranties, or purchases Mortgages. 17.09. FHA/VA ADDrova]. If any Mortgage is guaranteed or insured by the Federal Housing Administration or by the Veterans Administration, then upon written demand to the Association by either such agency, the following action, if made by Declarant or if made while a two-class voting structure is in effect, must be approved by either such agency: (i) any annexation of additional property; (ii) any mortgage, transfer or dedication of any Common Area; (iii) any amendment to this Declaration, the Articles or the Bylaws, if such amendment materially and adversely affects the Owners or materially and adversely affects the general scheme of development created by this Declaration, or (iv) any merger, consolidation or dissolution of the Association; provided however such approval shall specifically not be required where the amendment is made to add any property specifically identified in this Declaration, or to correct errors or omissions, or is required to comply with the requirements of any Mortgagee or is required by any governmental authority. Such approval shall be deemed given if either agency fails to give written notice of its disapproval of any such action to Declarant or to the Association within thirty (30) days after a request for such approval is delivered to the 42 93200 3089 agency by certified mail, return receipt requested, or equivalent delivery, and such approval may be conclusively evidenced by a certificate of Declarant or the Association that the approval was given or deemed given. IN WITNESS WHEREOF, the undersigned, being the Declarant herein, has executed this Declaration as of the date first above set forth. DECLARANT CENTEX REAL ESTATE CORPORATION, a Nevada corporation (Corporation Must Seal) BY: ~.~o~~~"~ Be Division President Attest: Assistant Sec~et~ry'v- ~--I 43 93200 STATE OF TEXAS COUNTY OF COLLIN Before me, the undersigned authority, on this day personally appeared BENTON KARNES, the Division President of CENTEX REAL ESTATE CORPORATION, a Nevada corporation, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed, in the capacity stated, and as the act and deed of said corporation. ~ my hand a~_se~91 of office this ~ day of , 19~ ' The State of ~_"4~ My commission expires: ~'~*g& 44 $ S 2 0 0 3' 0 9 i~ EXHIBIT A Being all of that tract of land called 8tonemeade Estates, An Addition to The City of COppell, said final plat being filed in Volume 93093, Page 1522, Plat Records, Dallas County, Texas, said tract being described by metes and bounds as follows: MHBILEAS, CB~TIX RIAL bcr,~ h. 1337,'~ ~ I.i. h~N, il ~ ~n hXm 76188, Pige 2355 o~ b ~ Xe~l ~XIX~ at a ~XnMf Xnt~ion of ~e ~o~ line of ~nCon ~p ~ rX~ ~X~ Xna ~ly dX~Xon ~ ~vX~ a cen~ra~ angle 0o20,~u a r~ of S679.70 THlHClalong said curve, and along tAe si. id east line o£ ~nton Tap R~d ~e ~oll~ing i~Na ~ allottees: 33.35 f~ ~ ~he e~ o~ hid ~,e; ~'hence m. 2°0~'02' Z., 248.40 ~ ~o a ~nt foF ~e:; N. 7043'40~ B., 100.S0 ~ ~o a ~n~ fo~ co~r; ~ence N. 2001'02~ E., 163.64 ~NC ~O a ~in~ ~oz eo~er, ~id ~in~ ~X~ Xna cu~e the ~ef~ ~Xng ~n an ~.~er~y dX=ec~Xon ~ ~vX~ a e~ra~ angle of 18'00'54" a =ld~us of 600.~ fNC a~ I c~rd ~rL~ of a. 74'52'43~ E.; ~~ alo~ said ~, a~ luvX~ ~e Si~d m~ li~ o~ ~nCon Tap R~d, 188.65 fMC to ~e ~ of said ~; ~~ ~.6S'S2'~6" l., ~S.24 fur to ~e ~1~1~ of a ~e to ~he rtgh~ havX~ a cen~:a~ ~Xe of 7'57'25" a =~XM of 3342.11 a~ a chord ~ri~ of N. 690S0,S8-B*; ~ aX~ hid ~m 464.14 f~t ~ ~o o~ of hid m; ~ S.27 S2'41" B., 666.40 f~t ~ a ~int for ~~ ~ the north line of briny ~ule~, said ~in~ also ~i~ in a ~e ~o lef~ ~ng in a ~.terly di~ion ~ ~vi~ a centex ~Xe of 3028~30"~ a radius ol 2244.00 ~t ~-a c~rd ~ring of S. 60023'04" M.; ~~ alo~ said ~, ~ along ~e said nor~ line oZ ~ulevard ~e roll,lng co~ses a~ dis~ces; 136.~0 f~t to the oZ said ~e; ~e~e S. 58038*49" 'W., S78.~4 f~t ~ ~e ~i~i~ a cu~e to ~e Eight hvi~ a centnl a~le o~ 30020'13" a radius of 1006.00 IMf a~ a chogd ~t~ o~ S. 73048'56' U.; ~e~e along said cu~e 532.66 f~t to ~e e~ of Mid nm; ~en~ S. 88059'02~ W., 647.83 ~ ~o the ~tnt o~ ~t~t~ a~ containing 27.565 ac=es (~,200,729 s~a=e ~t) of land. ' 3o.9.2