Park River Oak Estates Homeowner's Association

CC&Rs

ARTICLE III
Homeowners Association

[3. 1] Section 1. Association Membership. Every Owner of a Lot shall be a Member of the Association. Each Owner shall hold one membership in the Association for each Lot owned and the membership shall be appurtenant to such Lot. Ownership of a Lot or interest in it shall be the sole qualification for membership in the Association. Each Owner shall remain a Member of the Association until his or her ownership in all Lots in the Properties ceases, at which time his or her membership in the Association shall automatically cease. Persons or entities who hold an interest in a Lot merely as security for performance of an obligation are not Members until such time as the security holder comes into title to the Lot through foreclosure or deed in lieu thereof.

[3.2] Section 2. Classes of Membership and Voting. The Association shall have two classes of membership and the rights, duties, obligations and privileges of the Members shall be as set forth in the Governing Documents. Class A members shall be all owners except Declarant. The Class B member shall be the Declarant. A Class A Member shall be entitled to one vote for each Lot owned by said Member. When more than one person holds an interest in any Lot, all such persons shall be Members, although in no event shall more than one vote be cast with respect to any Lot. The Class B Member shall be entitled to three votes for each Lot owned. Voting rights may be temporarily suspended under those circumstances described in article XIV, section 6 hereof.

Fractional votes shall not be allowed. When there is more than one record Owner of a Lot (“co-owners”), all of the co-owners shall be Members, but only one of them shall be entitled to cast the single vote attributable to the Lot. Co-owners should designate in writing one of their number two votes. If such a designation is made or if it is revoked, the Co-owners shall decide among themselves, by majority vote, how that Lot’s vote is to be cast. Unless the Board receives a written objection in advance from a co-owner, it shall be

 

conclusively presumed that the voting co-owner is acting with a consent of his or her co owner’s. No vote shall be cast for a Lot on a particular matter if the majority of the co owner is present in person or by proxy cannot agree on a vote.

As long as two classes of voting memberships exist, any provision of this Declaration, the Articles, or the Bylaws that require the approval of a specified percentage of the voting power of the Association (rather than simply requiring a written consent of a majority of a quorum) shall require the approval of a specified percentage of the voting power of each class of membership. When the Class B membership has terminated, any provision of this Declaration, the Articles, or the Bylaws that requires the approval of a specified percentage of the voting power of the Association shall require the vote or written consent of Owners representing the specified percentage of both the total voting power of the Association and the voting power of the Association residing in Owners other than Declarant.

[3.3] Section 3. Termination of Class B membership. The Class B membership shall cease and be convened to Class A membership on the occurrence of whichever of the following is first in time:

(a)  On the second anniversary of the original issuance of the most recently issued Final Public Report for a phase of the Project; or

(b)  On the fourth anniversary of the original issuance of the Final Public Report for the first phase of the Project.

[3.4] Section 4. Assessments. The Association shall have the power to establish, fix and levy Assessments against the Owners of Lots within the Properties and to enforce payment of such Assessments in accordance with article IV of this Declaration. Any Assessments levied by the Association on its Members shall be levied in accordance with and pursuant to the provisions of this Declaration.

[3.5] Section 5. Transfer of Memberships. Membership in the Association shall not be transferred, encumbered, pledged or alienated in any way, except upon the sale or encumbrance of the Lot to which it is appurtenant and then only to the purchaser. In the case of a sale, membership passes automatically to the purchaser upon recording of a deed evidencing transfer of title to the Lot. In the case of an encumbrance of such Lot, a Mortgagee does not have membership rights until he or she becomes an Owner by foreclosure or deed in lieu thereof. Tenants who are delegated rights of use pursuant to article II, section 4 hereof do not thereby become Members, although the tenant and Members of the tenant’s family shall, at all times, be subject to the provisions of all Governing Documents. Any attempt to make a prohibited transfer is void. In the event the Owner of any Lot should fail or refuse to transfer the membership registered in the Owner’s name to the purchaser of his or her Lot, the Association shall have the right to record the transfer upon its books and thereupon any other membership outstanding in the name of the seller shall be null and void

 

[3.6] Section 6. Powers and Authority of the Association.

(a)             Powers Generally. The Association shall have the responsibility of owning, managing and maintaining the Common Areas and Common Facilities and discharging the other duties and responsibilities imposed on the Association by the Governing Documents. In the discharge of such responsibilities and duties, the Association shall have all of the powers of a nonprofit mutual benefit corporation organized under the laws of the State of California in the ownership and management of its properties and the discharge of its responsibilities hereunder for the benefit of its Members, subject only to such limitations upon the exercise of such powers as are expressly set forth in the Governing Documents. The Association and its Board of Directors shall have the power to do any and all lawful things which may be authorized, required or permitted to be done under and by virtue of the Governing Documents, and to do and perform any and all acts which may be necessary or proper for, or incidental to, the exercise of any of the express powers of the Association for the peace, health, comfort, safety or general welfare of the Owners. The specific powers of the Association and the limitations thereon shall be as set forth in article IX of the Bylaws.

The powers of the Association shall include, but are not limited to, the following:

(i)             The Association shall have the power to establish, fix, levy, collect and enforce the payment of assessments against the Owners in accordance with the procedures set out in Article IV of this Declaration.

(b)             Association’s Limited Right of Entry. The Association, and/or its agents shall have the right, when necessary, to enter any Townhouse to perform the Association’s obligations under this Declaration, including (i) exterior maintenance or repair obligations with respect to buildings containing Townhouses; (ii) obligations to enforce the architectural minimum construction standards, and land use restrictions; (iii) any obligations with respect to construction, maintenance and repair of adjacent Common Facilities; or (iv) to make necessary repairs that an Owner has failed to perform which, if left undone, will pose a threat to, or cause an unreasonable interference with, Association property or the Owners in common.

The Association’s rights of entry under this subparagraph (b) shall be immediate in case of an emergency originating in or threatening the Townhouse where entry is required, or any adjoining Townhouses or Common Area, and the Association’s work may be performed under such circumstances whether or not the Owner or his or her lessee is present. In all nonemergency situations, the Association or its agents shall furnish the Owner or his or her lessee with at least 24 hours’ written notice of its intent to enter the Townhouse, specifying the purpose and scheduled time of such entry and shall make every reasonable effort to perform its work and schedule its entry in a manner that respects the privacy of the persons residing within the Townhouse on the Lot.

(c)             The Association, acting through the Board, shall have the power to delegate its authority, duties, and responsibilities to its officers, employees, committees, or agents,

 

including a professional management agent. The Association shall not enter into a Management Agreement with a manager unless the manager first provides the Board, as soon as practicable during the 90 day period preceding the execution of the Agreement, with a written disclosure statement required by Civil Code Section 1363. 1. This disclosure requirement shall not apply if the Manager will be a full time employee of the Association or is a regulated financial institution that will be operating within the normal course of its regulated business practice. The term of any agreement with a manager or the Declarant for the furnishing of maintenance, repair, and related services shall not exceed one year, renewable by agreement of the parties for a successive one year period. Such an agreement shall be terminable by either party (1) per cause on thirty (30) days written notice and (2) without cause for the payment of a termination on ninety (90) days written notice.

[3.7] Section 7. Association Rules.

(a)             Rule-Making Power. The Board may, from time to time and subject to the provisions of this Declaration, propose, enact and amend rules and regulations of general application to the Owners of Lots within the Properties. Such rules may concern, but need not be limited to (i) matters pertaining to the maintenance, repair, management and use of the Common Area and Common Facilities by Owners, their tenants, guests and invitees, or any other person(s) who have rights of use and enjoyment of such Common Area and Common Facilities; (ii) architectural control and the rules of the Architectural Committee under article V, section 5 hereof; (iii) the conduct of disciplinary proceedings in accordance with article XIV, section 6 hereof; (iv) regulation of parking, pet ownership and other matters subject to regulation and restriction under article VII hereof; (v) collection and disposal of refuse; (vi) minimum standards for the maintenance of landscaping or other improvements on any Lot and (vii) any other subject or matter within the jurisdiction of the Association as provided in the Governing Documents.

Notwithstanding the foregoing grant of authority, the Association Rules shall not be inconsistent with or materially alter any provision of the other Governing Documents or the rights, preferences and privileges of Members there under. In the event of any material conflict between any Association Rule and any provision of the other Governing Documents, the conflicting provisions contained in the other Governing Documents shall be deemed to prevail.

(b)             Distribution of Rules. A copy of the Association Rules, as they may from time to time be adopted, amended or repealed, shall be mailed or otherwise delivered to each Owner. A copy of the Association Rules shall also be available and open for inspection during normal business hours at the principal office of the Association.

(c)            Adoption and Amendment of Rules. Association Rules may be adopted or amended from time to time by majority vote of the Board, provided, however, that no Association Rules or amendments thereto shall be adopted by the Board until at least 30 days after the proposed rule or rule amendment has been (i) published in the Association newsletter, if any, or otherwise communicated to the Owners in writing and (ii) posted in the

 

Association’s principal office. The notice describing the proposed rule or amendment shall also set forth the date, time and location of the Board meeting at which action on the proposal is scheduled to be taken.

Any duly adopted rule or amendment to the Rules shall become effective immediately following the date of adoption thereof by the Board, or at such later date as the Board may deem appropriate. Any duly adopted rule or rule amendment shall be distributed to the Owners by mail.

[3.8] Section 8. Breach of Rules or Restrictions.

Any breach of the Association Rules or of any other Governing Document provision shall give rise to the rights and remedies set forth in article XIV hereof.

[3.9] Section 9. Limitation on Liability of Association’s Directors and Officers.

(a)             Claims Regarding Breach of Duty. No director or officer of the Association (collectively and individually referred to as the “Released Party”) shall be personally liable to any of the Association’s Members, or to any other person, for any error or omission in the discharge of their duties and responsibilities or for their failure to provide any service required hereunder or under the Bylaws, provided that such Released Party has, upon the basis of such information as may be possessed by the Released Party, acted in good faith, in a manner that such person believes to be in the best interests of the Association and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.

Without limiting the generality of the foregoing, this standard of care and limitation of liability shall extend to such matters as the establishment of the Association’s annual financial budget, the funding of Association capital replacement and reserve accounts, repair and maintenance of Common Areas and Common Facilities and enforcement of the Governing Documents.

(b)             Other Claims Involving Tortious Acts and Property Damage. No Released Party shall be responsible to any Owner or to any member of his or her family or any of his or her tenants, guests, servants, employees, licensees, invitees or any other person for any loss or damage suffered by reason of theft or otherwise of any article, vehicle or other item of personal property which may be stored by such Owner or other person on any Lot or within any Townhouse or for any injury to or death of any person or loss or damage to the property of any person caused by fire, explosion, the elements or any other Owner or person within the Properties, or by any other cause, unless the same is attributable to his or her own willful or wanton act or gross negligence. It is the intent of this subparagraph to provide volunteer directors and officers with protection from liability to the full extent permitted by California Civil Code section 1365.7, or comparable superseding statute, and to the extent this provision is inconsistent with said section, the Civil Code shall prevail.

 

[3.10] Section 10. Duties of the Association

In addition to the duties delegated to the Association or its agents and employees elsewhere in these Governing Instruments, the Association shall be responsible for the following:

(a)            The Association, acting through the Board, shall operate, maintain, repair, and replace the Common Area and its improvements [all landscaping, and the exterior surfaces of all structures in the Project,] or contract for the performance of that work, subject to the provisions of Article X of this Declaration relating to destruction of improvements, Article XI of this Declaration pertaining to eminent domain. The foregoing areas and improvements shall be kept in a clean, sanitary, and attractive condition. The Association shall not be responsible for maintaining Exclusive Use Common Areas. The Association shall also have the exclusive right and duty to acquire and maintain any furnishings and equipment for the Common Area that it determines are necessary and proper. As a general rule, maintenance costs shall be included in the regular assessments. However, if additional work is required for a particular Lot, the expenses of that additional work shall be charged solely to the Owner of the Lot in the month in which the work is performed. Further, the Owner of a Residence shall pay the costs of any temporary relocation of any occupant of the Residence occasioned by the presence of wood-destroying pests or organisms. If the Owner does not pay for the additional work within 20 calendar days after receiving the bill, the Association shall institute appropriate collection actions and shall recover the reasonable costs of collection, including attorney’s fees and interest from the due date until paid at the rate of 12% percent per annum.

(b)The Association shall use the maintenance fund described in this Declaration to, among other things, acquire and pay for the following:

(1)                   Water, sewer, garbage, electrical, telephone, gas, elevator, and other necessary utility service for the Common Area, and, to the extent not separately metered and charged, for the Lots;
(2)    The insurance policies described in Article VII of this Declaration;
(3)                The services of any personnel that the Board determines are necessary or proper for the operation of the Common Area; and
(4)                Legal and accounting services necessary or proper in the operation of the Common Area or the enforcement of this Declaration.

(c) If the Association is obligee under a bond or other arrangement to secure the performance of Declarant as to any Common Area improvements that were not completed prior to the issuance of the final public report on the Project, the following procedures shall govern the initiation of action to enforce the bond:

(1)      The Board of Directors of the Association shall consider and vote on the question of action by the Association to enforce the obligations under the bond with respect to any improvement for which a Notice of Completion has not been filed within 60 days after the completion date specified for the improvement in the Planned Construction Statement appended to the bond. If the Association has given an extension in writing for the completion of any Common Area improvement, the Board shall consider and vote on the above question if a Notice of Completion has not been filed within 30 days after the expiration of the extension.

(2)                   If the Board votes not to initiate action to enforce the obligations under the bond, or if it fails to consider and vote on the matter as required, a special meeting of the Owners of the Association shall be called for the purpose of overriding the Board’s decision or for taking action on the matter, upon receipt of a petition calling for such a meeting signed by Owners representing at least 5 percent of the total voting power of the Association. The meeting shall be held not less than 35 days or more than 45 days after receipt of the petition by the Board. At the special meeting, only the Owners other than Declarant shall be allowed to vote on the matter. A vote by a majority of the voting power of the Association residing in Owners other than Declarant to take action to enforce the obligations under the bond shall be deemed to be the decision of the Association, and the Board shall implement this decision by initiating and pursuing appropriate action in the name of the Association.

(d)             The Association shall prepare a pro forma operating budget for each fiscal year, and shall distribute a copy of the budget to each Owner not less than 45 and not more than 60 days before the beginning of the fiscal year. As an alternative to the foregoing distribution of the budget, the Association may elect to do all of the following in the manner required by statute: distribute a summary of the budget to each Owner, make the budget available for inspection at a designated location, and provide copies of the budget to Owners on request and at the expense of the Association. The budget shall contain at least the following:

(1)                The estimated revenue and expenses on an accrual basis;

(2)             A summary (printed in bold type) of the Association’s reserves that is based on the most recent review or study conducted pursuant to Civil Code Section 1365.5. This summary shall include the following: (i) the current estimated replacement cost, estimated remaining life, and estimated useful life of each major component that the Association is obligated to maintain (hereafter referred to as the ‘major components’); (ii) the current estimate, as of the end of the fiscal year for which the study is prepared, of the amount of cash reserves necessary to repair, replace, restore, or maintain the major components; (iii) the current amount, as of the end of the fiscal year for which the study is prepared, of accumulated cash reserves actually set aside to repair, replace, restore, or maintain the major components; (iv) the percentage that the amount described in (iii), above, is of the amount determined for purposes of (ii), above (that is, the percentage obtained by dividing the amount described in (iii), above, by the amount described in (ii), above).

 

 

(3)                A statement as to whether the Board has determined or anticipates that the levy of one or more special assessments will be required to repair, replace, or restore any major component or to provide adequate reserves for such work.

(4)                A general statement addressing the procedures used for the calculation and establishment of reserves to defray the future repair, replacement, or additions to the major components.

(e)            Within the 120 days after the close of each fiscal year, the Association shall prepare and distribute to the Owners an annual report consisting of the following:

(1) A balance sheet as of the end of the fiscal year.

(2)                An operating (income) statement for the fiscal year.

(3)                A statement of changes in financial position for the fiscal year.

(4)                For any fiscal year in which the gross income to the Association exceeds $75,000, a copy of the review of the annual report prepared in accordance with generally accepted accounting principles by a licensee of the California State Board of Accountancy. If this report is not prepared by an independent accountant, it shall be accompanied by the certificate of an authorized officer of the Association that the statement was prepared without independent audit or review from the books and records of the Association.

(t)            Within 60 days before the beginning of each fiscal year, the Association shall prepare and distribute to the Owners a statement describing the Association’s policies and practices in enforcing lien rights or other legal remedies for default in payment of assessments against Owners.

(g)            The Association shall prepare a balance sheet as of an accounting date that is the last day of the month closest in time to six months from the date of closing of the first sale of a Lot in the Project, and an operating statement for the period from the date of the first closing to the foregoing accounting date. The Association shall distribute this statement to the Owners within 60 days after the accounting date. This operating statement shall include a schedule of assessments received and receivable identified by the number of the Lot and the name of the Owner assessed.

(h)            Each year, the Association must provide the Owners with a summary of the provisions of Civil Code Section 1354. Section 1354 requires that alternative dispute resolution be pursued before a civil action may be filed in connection with certain disputes relating to the enforcement of the Governing Instruments. The summary must include the following: a specific reference to Section 1354; and the statutory language set forth in Subsection (i) of Section 1354. This summary must be provided either (1) at the time the pro forma operating budget described in Section 3.10(d) of this Declaration is distributed, or (2) in the manner specified in Corporations Code Section 5016.

 

(i)            The Association shall provide any Owner with the following documents within 10 days of the mailing or delivery of a written request therefore:

(1)                A copy of the Governing Instruments.

(2)                A copy of the most recent financial statement distributed pursuant to this Declaration.

(3)                A written statement from an authorized representative of the Association specifying (i) the amount of any assessments levied on the Owner’s Lot that are unpaid on the date of the statement; and (ii) the amount of late charges, interest and costs of collection that, as of the date of the statement, are or may be made a lien on the Owner’s Lot pursuant to this Declaration. The Association may charge the Owner a reasonable fee to cover its cost to prepare and reproduce those requested items.

(j)            The Association shall pay all real and personal property taxes and assessments levied against it, its personal property, the Common Area, and Exclusive Use Common Areas.