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Reso 112-1996
RESOLUTION NO. 112-96 CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING AMENDED CONDITIONS, COVENANTS, AND RESTRICTIONS FOR THE TERRABAY D~VELOPMENT PROJECT WHEREAS, the City Council previously approved the covenants, conditions and restrictionsi for the Terrabay Development Project; and WHEREAS, new laws regarding covenants, conditions and restrictions have become effective! since the prior approval of the CC&R's; and W~EREAS, the applicant has reconfigured the structure of the homeowners' organization; a~d WHEREAS, sitaff has reviewed the proposed CC&R's and have determined that they are consistlent with the City Council's land use approvals for the Terrabay Development Project. NOW, THEREFORE, the City Council of the City of South San Francisco does hereby resolve as follows: The amended conditions, covenants and restrictions for the Terrabay Development projiect, as set forth in Attachment A hereto, are approved. I hereby Certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a regular meeting held on the 13th day of July , 1996 by the following vote; AYES: O.o,Jn~ilmembers Joseph A. Fernekes, Eugene R. Mullin. John R. Penna, Robert Yee and Mayor Jack Drago NOES: None ABSTAIN: None: ABSENT: None, ATTEST: J:\WPD\MNRSW~405\RESO\TERRABAY.CCR EXHIBIT RECORDED AT THE REQUEST OF: WHEN RECORDED RETURN TO: A TO RESOLUTION NO. 112-96 MASTER DECLARATION OF COVENANTS CONDITIONS AND RESTRICTIONS OF TERRABAY A Common Interest Development LITTLE & SAPUTO A'FTOR.,V~'$ A T [.~ I4~ 1901 OLYMPIC BOULEVARD, #100 X,VALNUT CREEK. CA. 9a596-5024 ($10) 9,~a.5000 INDEX TO MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF TERRABAY A Common Interest Development INTENTION OF DECLARATION ............................................. 1.1 1.1 FACTS ........................................................... 1.1 1.1.1 Property Subject to Declaration .................................... 1.1 1.1.2 Nature of Project .............................................. 1.1 11.1.3 Phases of Project .............................................. 1.1 1.1.4 Subsequent Development ........................................ 1.2 1.2 APPLICABILITY OF RESTRICTIONS .................................. 1.2 II DEFINITIONS ............................................................. 2.1 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 -2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 ADDITIONAL CHA~GES ........................................... 2.1 ADDITIONAL PROPERTY .......................................... 2.1 ARTICLES ....................................................... 2.1 BOARD .......................................................... 2.1 BUDGET ......................................................... 2.1 BYLAWS ......................................................... 2.1 CITY ............................................................ 2.1 COUNTY ........................................................ 2.1 DECLARANT ..................................................... 2.1 DECLARATION ................................................... 2.2 DECLARATION OF ANNEXATION ................................... 2.2 FIRST MORTGAGE ................................................ 2.2 FIRST MORTGAGEE ................................................ 2.2 HABITAT CONSERVATION PLAN .................................... 2.2 iMPROVEMENTS .................................................. 2.2 iNVITEE ......................................................... 2.2 LOT ............................................................. 2.2 MAP ........................................................... 2.2 MASTER ASSOCIATION ............................................ 2.3 MASTER ASSOCIATION COMMON AREA ............................. 2.3 MEMBER .................................. ' ...................... 2.3 MERCHANT BUILDER ............................................. 2.3 MORTGAGE ...................................................... 2.3 MORTGAGEE .................................................... 2.3 NOTICE AND HEARING ............................................ 2.3 OPEN SPACE ..................................................... 2.3 OWNER ......................................................... 2.3 PHASE .......................................................... 2.4 PLAN OPERATOR ................................................. 2.4 PROJECT ........................................................ 2.4 PROJECT DOCUMENTS ............................................ 2.4 PUBLIC REPORT .................................................. 2.4 RESIDENCE ...................................................... 2.4 LITI'LE & SAPUTO A TTOR,NE"VS A T LA FI; 1901 OLYMPIC 8OULEVARD, ~100 WALNUT CREE~ ~ 94~9~0~ (~lo) 9~-s000 -i- 06/20/96 0 r-t 0 2.34 2.35 2.36 2.37 2.38 RULES .......................................................... 2.4 SUBASSOCIATION ................................................. 2.4 SUBASSOCIATION COMMON AREA .................................. 2.4 SUPPLEMENTAL DECLARATION .................................... 2.4 SUBJECT PROPERTY .............................................. 2.4 HI OWNERSHIP AND EASEMENTS ............................................. 3.1 3.1 NON-SEVERABILITY ............................................... 3.1 3.2 OWNERSHIP OF LOTS ............ : ................................ 3.1 3.3 OWNERSHIP OF MASTER ASSOCIATION COMMON AREA ............... 3.1 3.4 EASEMENTS ..................................................... 3.1 3.4.1 ~.4.2 3.4.3 3.4.4 3.4.5 3.4.6 3.4.7 3.4.8 3.4.9 3.4.10 3.4.11 3.4.12 Easements On Map ............................................ 3.1 Easements For Master Association Common Area ........................................................ 3.1 Utilities ..................................................... 3.2 Storm Drains ................................................. 3.2 Encroaclmaent ................................................. 3.2 Support, Maintenance and Repair .................................. 3.2 Easement to Governmental Entities ................ ................. 3.2 Association Easements ........................................... 3.3 Additional Easements ........................................... 3.3 Easement For Adjoining Property .................................. 3.3 Annexation of Additional Property .................................. 3.3 Temporary Access .............................................. 3.3 IV USES AND RESTRICTIONS ................................................. 4.1 4.1 AIRPORT DISCLOSURE ............................................ 4.1 4.2 HABITAT CONSERVATION BUFFER AREAS ........................... 4.1 4.3 PARKING CONTROL ............................................... 4.1 4.4 PESTICIDE CONTROL .............................................. 4.1 4.5 SPECIAL STANDARDS AND REQUIREMENTS .......................... 4.2 4.5.1 City of South San Francisco Standards ............................... 4.2 4.5.2 Habitat Conservation ........................................... 4.2 4.6 SUBASSOCIATION USE RESTRICTIONS ............................... 4.2 4.7 USE OF MASTER ASSOCIATION COMMON AREA ...................... 4.2 4.7.1 Generally .................................................... 4.2 4.7.2 Open Space .................................................. 4.3 V MAINTENANCE, REPAIR AND RECONSTRUCTION OF IMPROVEMENTS .......... 5.1 5.1 MAINTENANCE OF MASTER ASSOCIATION COMMON AREA ............ 5.1 5.1.1 Generally ........ ............................................ 5.1 5.1.2 Slope and Drainage Maintenance ................................... 5.1 5.1.3 Open Space .................................................. 5.1 5.1.4 San Bruno County Mountain Park Maintenance 5.1.5 Linear Park .................................................. 5.3 5.1.6 As-Built Plans.. ............................................... 5.3 5.2 ALTERATIONS TO MASTER ASSOCIATION COMMON AREA ............. 5.3 5.2.1 Approval ..................................................... 5.3 5.2.2 Funding ..................................................... 5.3 5.3 MAINTENANCE OF LOTS ,-MN'D RESIDENCES .......................... 5.3 5.5 MAINTENANCE AND REPAIR OF FENCES ............................ 5.4 5.6 LANDSCAPING ................................................... 5.4 LITTLE & SAPUTO A TTORN~'YS A T LA ~ 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK, CA 94596-5024 (510) 9,u-5000 -ii- 06/20/ 96 I Oh 0 5.7 5.8 5.9 5.10 5.6.1 Master Association ............................................. 5.4 5.6.2 Owners ..................................................... 5.4 RIGHT OF MAINTENANCE AND ENTRY BY MASTER ASSOCIATION .................................................... 5.4 DAMAGE AND DESTRUCTION ...................................... 5.5 5.8.1 Bids ........................................................ 5.5 5.8.2 Sufficient Proceeds ............................................. 5.5 5.8.3 Additional Special Assessment ..................................... 5.6 CONDEMNATION OF MASTER ASSOCIATION COMMON AREA ........... 5.6 SITE IMPROVEMENT AND LANDSCAPE PLANS ........................ 5.6 VI FUNDS .&ND ASSESSMENTS ................................................ 6.1 6.1 COVENANTS TO PAY .............................................. 6.1 6.1.1 Liability for Payment ............................................ 6.1 6.1.2 Funds Held in Trust ............................................ 6.1 6.1.3 Offsets ...................................................... 6.1 6.2 REGULAR ASSESSMENTS ............... ' ........................... 6.1 6.2.1 Payment of Regular Assessments ................................... 6.1 6.2.2 Allocation of Regular Assessments ................................. 6.2 6.2.3 Open Space Reserve Component of Budget ........................... 6.2 6.2.4 Exemptions from Regular Assessment ............................... 6.3 6.2.5 Non-Waiver of Assessments ...................................... 6.3 6.3 SPECIAL ASSESSMENTS ............................................ 6.3 6.4 REIMBURSEMENT ASSESSMENTS ................................... 6.4 6.5 INCREASE LIMITATIONS ........................................... 6.4 6.5.1 Limitation on Regular Assessment Increases in Excess of 20% ............. 6.4 6.5.2 5% Special Assessment Limitation .................................. 6.4 6.5.3 Budget Distribution Limitation .................................... 6.4 6.5.4 Emergency Exception ........................................... 6.5 6.6 ACCOUNTS ...................................................... 6.5 6.6.1 Types of Accounts .............................................. 6.5 6.6.2 Reserve Account ............................................... 6.5 6.6.3 Current Operation Account ....................................... 6.6 6.7 BUDGET, FINANCIAL STATEMENTS, REPORTS AND STUDIES ........... 6.6 3.7.1 Preparation of Operating Budget ................................... 6.6 5.7.2 Distribution of Budget ........................................... 6.7 ;.7.3 Annual Report ................................................ 6.8 5.7.4 Quarterly Reconciliation ......................................... 6.8 5.7.5 Reserve Account Study .......................................... 6.8 5.7.6 Notice of Increased Assessments ................................... 6.9 i.7.7 Statement of Outstanding Charges .................................. 6.9 i.7.8 Initial Six Month Statement ....................................... 6.9 ;.7.9 Schedule of Monetary Penalties ................................... 6.10 6.8 ENFORCEMENT OF ASSESSMENTS ................................. 6.10 ;.8.1 Procedures .................................................. 6.10 i.8.2 Additional Charges ............................................ 6.11 i.8.3 Certificate of Satisfaction of Lien .................................. 6.11 i.8.4 Waiver of Homestead Protections ................................. 6.11 6.9 3UBORD[NATION OF LIEN ......................................... 6.12 6.10 ~UBASSOCIATION ASSESSMENTS ................................... 6.12 5.10.1 Joint Collection of Regular Assessments ............................ 6.12 5.10.2 Parity of Priority of Subassociation Documents .................................................. 6.12 LrFrLE & SAPUTO .q TTORNLe'YS A T LA W 1901 OLYMPIC BOULEVARD, #100 WALNUT CREEK., CA 94596-5024 (510) 9~-5000 -iii- 06/20/96 VII MEMBERSHIP IN AND DUTIES OF THE MASTER ASSOCIATION ................. 7.1 7.1 THE ORGANIZATION .............................................. 7.1 7.2 MEMBERSHIP .................................................... 7.1 7.2.1 Appurtenant to Ownership ....................................... 7.1 7.2.2 Annexation ................................................... 7.1 7.3 VOTING ......................................................... 7.1 7.4 RULES .......................................................... 7.1 7.5 iDEDICATION AND EASEMENTS ..................................... 7.1 7.6 INSURANCE ...................................................... 7.1 ~.6.1 General Provisions and Limitations ................................. 7.2 7.6.2 Types of Coverage ............................................. 7.3 7.6.3 Annual Review ................................................ 7.4 7.6.4 Notice to Members ............................................. 7.4 7.7 COMPLETION OF MASTER ASSOCIATION COMMON AREA IMPROVEMENTS ................................... 7.5 7.7.1 Inspection of Master Association Common Area Improvements ............ 7.5 7.7.2 Enforcement of Completion Bonds ................................. 7.7 7.8 TRANSPORTION PROGRAMS ....................................... 7.8 VIII DEVELOPMENT RIGHTS .................................................... 8.1 8.1 8.2 8.3 8.4 8.5 8.6 8.7 LIMITATIONS OF RESTRICTIONS .................................... 8.1 RIGHTS OF ACCESS AND COMPLETION OF CONSTRUCTION ............ 8.1 SIZE AND APPEARANCE OF PROJECT ............................... 8.1 ALTERATIONS TO MAP ............................................ 8.1 MARKETING RIGHTS .............................................. 8.2 TITLE RIGHTS .................................................... 8.2 AMENDMENT .................................................... 8.2 RIGHTS 9.1 9.2 9.3 9.4 9.5 OF MORTGAGEES ................................................. 9.1 CONFLICT ....................................................... 9.1 LIABILITY FOR UNPAID ASSESSMENTS .............................. 9.1 iNSPECTION OF BOOKS AND RECORDS .............................. 9.1 FINANCIAL STATEMENTS FOR MORTGAGEES ........................ 9.1 MORTGAGE PROTECTION ......................................... 9.1 X AMENDMENT AND ENFORCEMENT ........................................ 10.1 10.1 AMENDMENTS .................................................. 10.1 ~0.1.1 Approval by Merchant Builder ................................... 10.1 10.1.2 Approval By City ............................................. 10.1 ~0.1.3 Approvals Required by Habitat Conservation Plan ..................... 10.1 10.1.4 Recordation of Amendment ..................................... 10.1 10.2 ENFORCEMENT ................................................. 10.1 10.2.1 Rights to Enforce ............................................. 10.1 10.2.2 Violation of Law .............................................. 10.2 1~0.2.3 Remedies Cumulative .......................................... 10.2 ~0.2.4 Nonwalver .................................................. 10.2 10.2.5 Enforcement by City, County and HCP Trust ............. ' ............ 10.2 10.3 NOTICES TO MEMBERS OF LEGAL PROCEEDINGS .................... 10.2 10.4 CONDITIONS TO CERTAIN LEGAL PROCEEDINGS .................... 10.3 10.4.1 Master Association's Notice ...................................... 10.3 10.4.2 Notice Tolls Limitations on Actions ................................ 10.3 10.4.3 Meetings .................... ' ............................... 10.4 10.4.4 Inspections and Testing ......................................... 10.5 LITTLE & SAPUTO A TTORNEY$,A T EA W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94596-5024 (510) 9~-5000 -iv- 06/20/96 XI XII XIII 10.5 ~0.4.5 Settlement Offer .............................................. 10.5 10.4.6 Time Periods and Notices ....................................... 10.6 1,0.4.7 Rejection of Settlement Offer .................................... 10.6 110.4.8 Master Association Relieved of Obligations 10.4.9 Failure to Comply ............................................. 10.7 OPTIONAL LEGAL PROCEEDINGS .................................. 10.8 ANNEXATION 11.1 11.1 11.2 11.3 11.4 11.5 11.6 RESTRICTION ON ANNEXATION ................................... 11.1 PROPERTY WHICH MAY BE ANNEXED; APPROVAL OF MEMBERS ...... IL1 PROCEDURE FOR ANNEXATION ................................... 11.1 EFFECT OF ANNEXATION ......................................... 11.2 DEANNEXATION AND AMENDMENT ............................... 11.2 AMENDMENT ................................................... 11.2 CONDITIjONS PRECEDENT TO LEVY OF REGULAR ASSESSMENTS AND OPERATION OF MASTER ASSOCIATION ................................................... 12.1 12.1 !CONDITION TO FULL OPERATION ................................. 12.1 12.2 BEFORE FULL OPERATION ........................................ 12.1 12.3 'COMMENCEMENT OF FULL OPERATIONS ........................... '12.1 MISCELLANEOUS PROVISIONS ............................................ 13.1 13.1 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 13.10 TERM OF DECLARATION ......................................... 13.1 CONSTRUCTION OF PROVISIONS ................................... 13.1 BINDING ....................................................... 13.1 SEVERABILITY OF PROVISIONS .................................... 13.1 GENDER, NUMBER AND CAPTIONS ................................ 13.1 !REDISTRIBUTION OF PROJECT DOCUMENTS ........................ 13.1 EXHIBITS ....................................................... 13.1 REQUIRED ACTIONS OF MASTER ASSOCIATION ..................... 13.1 SUCCESSOR STATUTES ........................................... 13.1 CONFLICT ...................................................... 13.2 LITTLE & SAPUTO ATTOR. PI~"$ AT I...AW 1901 OLYMPIC BOULEVARD, ~100 ~VALNUT CREEK. CA 9a596-5024 ($~o) 9~-5ooo -V- 06/20/96 MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF TERRABAY A Common Interest Development THIS MASTER DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF TERRABAY ("Declaration") is made by SUNCHASE G.A. CALIFORNIA I, INC., a California corporation, ("Declarant"). ARTICLE I INTENTION OF DECLARATION 1.1 FACTS: following ~acts: This Declaration is made with reference to the ,1.1.! Property Subject to Declaration: Declarant and Merchant BUilder are the owner of all' the real property and Improvements thereon located in the City of South San Francisco, County of San Mateo, State of California, described as follows: :Lots 1 through 12, inclusive, 21 through 30, ~inctusive, 49 through 58, inclusive, 71 ithrough 82, inclusive, 201 through 211, ~inclusive, and 218 through 236, inclusive, '(~Lots") and lots 238 and 331 through 337, !inclusive, ("Common Area") as shown on the ~subdivision map of Terrabay, filed for record on July 2, 1990, in Book 121 of Maps fat Page 65 et seq., in the Official Records of the County of San Mateo, State of ~California. 1.1.2 Nature of Project: Declarant intends to develop the Subject Property and the Additional Property as a Common Inteirest Development which shall be a planned development as defined in!California Civil Code Section 1351(k) . The Project is intended tO be created in conformity with the provisions of the DaviD-Stifling Common Interest Development Act (California Civil Code, Section 1350 et seq.). To establish the Project, Declarant desires to impose on the Subject Property, and any property annexed thereto, these mutually beneficial restrictions, easements, assessments and liens under a comprehensive general plan of improvement and development for the benefit of all of the Owners, the Lots and Master Association Common Area within the Subject Property and. any property annexed thereto. 1.1.3 Phases of Project: The Subject Property and the Additional Property are intended to be developed in two (2) or more PhaseS. The first Phase consists of the Subject Property. LI'Iq'LE & SAPUTO ATTORNEYS .AT LA 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94596-5024 (st0) 1.1 06/26/96 O Prior to annexation, the Additional Property shall not be subject to any prov!ision of this Declaration. Declarant amd any Merchant Builder mayl, but shall have no obligation hereunder to, annex all or any portion of the Additional Property to the Project by recording a Declaration of Annexation in compliance with the provisions of this Declaration. 1.1.4 Subsequent Development: Portions of the Additional Property may be approved by the City for different types of residentlial development. It is anticipated that Declarant or amu Merchant Builder may record Supplemental Declarations and create one or more Subassociations to govern these different types of residential developments. The provisions of this Master Declarationl shall continue to apply to all of the Property even after the recordation of such further Supplemental Declarations. 1.2 APPLICABILITY OF RESTRICTIONS: Pursuant to California Civil Code Sections 1353 and 1354, Declarant hereby declares that the Project and all Improvements thereon are subject to the provisions ~of this Declaration. The .Project shall be held, conveyed, hypothecated, encumbered, leased, rented, used, occupied and improved subject to the covenants, conditions and restrictions stated in tihis Declaration. Ail such covenants, conditions and restrictions are declared to be in furtherance of the plan for the subdivision, development and management of the Project as a Common Interest DeVelopment. Ail of the limitations, easements, uses, obligations~ covenants, conditions, and restrictions stated in this Declaration~ shall run with the Project and shall inure to the benefit of ,and be binding on all Owners and all other parties having or acquiring any right, title or interest in any part of the Project. After recordation of a Declaration of Annexation, the property described therein shall constitute a part of the Project and shall be subject to this Declaration. LITTLE & SAPUTO A TTORIqE'YS A T LA W 1901 OLYMPIC BOULEVARD, ~I00 WALI~!UT CREE~ CA 94596~$024 (510) 9.~-5000 1.2' 06/20/96 O~ ARTICLE II DEFINITIONS nn ~ U zess otherwise defined or unless the context clearly requires a different meaning, the terms used in this Declaration, the Map and any grant deed to a Lot shall have the meanings specified in this Article. 2.1 ADDITIONAL CHARGES: The term "Additional Charges" shall mean costs/ fees, charges and expenditures, including without limitation,~ attorneys' fees, late charges, interest and recording and filing fees actually incurred by the Master Association in collecting land/or enforcing payment of assessments, fines and/or penalties. 2.2 ADDITIONAL PROPERTY: The term "Additional Property" shall mean~the real property described on Exhibit "A" and all Improvements situated on such real property. 2.3 ARTICLES: The term "Articles!' shall mean the Articles of Incorporation of Terrabay Master Association, which are or shall be filed in the Office of the Secretary of State of the State of California. 2.4 BOARD: The term "Board" shall mean the Board of Directors o[f the Master Association. 2.5 BUDGET: The term "Budget" shall mean a pro forma operating budget prepared by the Board in accordance with Section 6.7!.1 of this Declaration. 2.6 BYLAWS: The term "Bylaws" shall mean the Bylaws of the Master Assoiciation and any amendments thereto. 2.7 !CITY: The term "City" shall mean the City of South San Francisco, iCalifornia. 2.8 iCOUNTY: The term "County" shall mean the County of San Mateo, Statie of California. -2.9 iDECLARANT: The term "Declarant" shall mean SLrNCHASE G.A. CALIFORNIA I, INC., a California corporation. The term "Declarant"i shall also mean any successor or successors in interest of Declarant, if (i) such successor(s) in interest acquires all of Declarant's interest in the Subject Property and the Additional Property for the purposes of development, sale and/or rental and (ii) a certificate, signed by Declarant, has been recorded in the County in which the successor(s) in interest assumes the rights and duties of ~Declarant' with respect to the Subject Property and Additional Property so acquired. LITTLE & SAPUTO A TTOP~IE~'$ A T LA ~ 190! OLYMPIC BOULEVARD. ~100 WALNUT CREEK. CA 94596-50~4 (510) 9~.~-5000 2.1 06/20/96 2.10 [DECLARATION: The term "Declaration" shall mean this Master Declaration of Covenants, Conditions and Restrictions of Terrabay and includes any subsequently recorded amendments. 2.11 DECLARATION OF ANNEXATION: The term "Declaration of Annexation"i shall mean any instrument recorded in the County which extends the provisions of this Declaration to all or a portion of the Additional Property in accordance with Article XI. 2.12 FIRST MORTGAGE: The term "First Mortgage" shall mean a Mortgage wkich has priority under the recording statutes of the State of California over all other Mortgages encumbering a specific Lot. 2.13 FIRST MORTGAGEE: The term "First Mortgagee" shall mean the Mortgagee of a First Mortgage. 2.14 HABITAT CONSERVATION PLAN: The term "Habitat Conservation Plan" or "HCP" shall mean the San Bruno Mountain Area Habitat .Conservation Plan as adopted by the County Board of Supervisorslon September 14, 1982, by Resolution No. 43770, or as it may be hereafter amended. 2.15 IMPROVEMENTS: The term "Improvements" shall mean everything Constructed, installed or planted on property subject to this Declaration, including without limitation, buildings, streets, fences, walls, paving, pipes, wires, grading, landscaping and other works of improvement as defined in Section 3106 of the California Civil Code, ~exctuding 'only those Improvements or portions thereof which are dedicated to the public or a public or quasi-public entity or utility company, and accepted for maintenance by the public, such entity or utility company. 2.16 iNVITEE: The term "Invitee" shall mean any person whose presence within the Project is approved by or is at the request of the Master Association, a Subassociation, or a particular Owner, including, but not limited to, lessees, tenants, and the family, guests, employees, licensees or invitees of Owners, tenants or lessees. _2.17 LOT: The term "Lot" refers to a Separate Interest as defined in California Civil Code Section 1351(1) and shall mean Lots 1 through 12, inclusive, 21 through 30, inclusive, 49 through S8, inclusive, 71 through 82, inclusive, 201 through 211, inclusive, and 218 through 236, inclusive, as shown on the Map. The term "Lot" shall also mean any Lot described as such in a Declaration ~of Annexation. Lot includes all Improvements situated thereon or ~herein. 2.18 MAP: The term "Map" shall mean the subdivision map filed for re~ord on July 2, 1990, in Book 121 of Maps at Page 65 et seq., in the Official Records of the County, including any subsequently recorded amended final maps, parcel maps, certificates LITTLE & SAPUTO 1901 OLYMPIC BOULEVARD, ~I00 WALNUT CREEK. CA 94596-5024 (St0) 0a-a-.S000 2.2 06/26/96 of correction, lot line adjustments and/or records of survey. The term "Map" shall also mean any recorded subdivision map, parcel map or lot line!adjustment described in a Declaration of Annexation. 2.19 MASTER ASSOCIATION: The term "Master Association" shall mean Terrabay Master Association, its successors and assigns, a nonprofit mutual benefit corporation incorporated under the laws of the State of California. 2.20 MASTER ASSOCIATION COMMON AREA: There is no "Master AssociationiCommon Area" in the first Phase of the Project. The term "Master Association Common Area" shall mean any property described as Master Association Common Area in a Declaration of Annexation; provided, however, it shall not include Subassociation Common Area. Master Association Common Area includes all Improvements situated thereon or therein. 2.21 MEMBER: The term "Member" shall mean an Owner. 2.22 MERCHANT BUILDER: The term "Merchant Builder" shall mean any ~uccessor in interest to Declarant if (i) such successor(s)i in interest owns or acquires all or any portion of the Subject Property or Additional Property for the purposes of development, sale and/or rental and (ii) a notice, signed by Declarant has been recorded in the County assigning to such successor in interest the rights with respect to the Subject property or iAdditional Property so owned. There may be more than one Merchant Builder. 2.23 MORTGAGE: The term "Mortgage" shall mean any duly recorded mortgage or deed of trust encumbering a Lot. 2.24 MORTGAGEE: The term "Mortgagee" shall mean a Mortgagee under a Mortgage as well as a beneficiary under a deed of trust. 2.25 NOTICE AND HEARING: The term "Notice and Hearing" shall mean the procedure which gives an Owner notice of an alleged violation of the Project Documents and the opportunity for a hearing before the Board. 2.26 OPEN SPACE: The term "Open Space" shall mean such portions of ~the Master Association Common Area which are shown as "Open Space" on the plat attached hereto as Exhibit "B". Notwithstanding the preceding sentence, any real property which is identified ds "Open Space" in a Declaration of Annexation shall be Open Space Whether or not it is shown on the attached plat; and, provided, further, that any real property which a Declaration of Annexation expressly provides is not "Open Space" shall not be Open Space whether or not it is shown on the attached plat. 2.27 QWNER: The term "Owner" shall mean the holder of record fee title tO a Lot, including Declarant as to each Lot owned by Declarant. If more than one person owns a single Lot, the term Lrl"FLE & SAPUTO A ~"FOI~'~'Y$ AT 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 9,~596-502~ ($10) 2.3 06/20/96 "Owner" sha!ll mean all owners of that Lot. The term "Owner" shall also mean a~ contract purchaser (vendee) under an installment land contract but shall exclude the contract vendor and any person having an interest in a Lot merely as security for performance of an obligation. 2.28 iPHASE: The term "Phase" shall mean any Lots and/or Master Association Common Area which are simultaneously made subject to the provisions of this Declaration either by recording this Declaration or by recording a Declaration of Annexation. 2.29 ~LAN OPERATOR: The term "Plan Operator" shall refer to the County ~n its capacity as the Plan Operator referenced in the Habitat Conservation Plan. 2.30 ~ROJECT: The term "Project" shall mean the Subject Property an~ any property described in a Declaration of Annexation. 2.31 PROJECT DOCUMENTS: The term "Project Documents" shall mean the Arhicles, Bylaws, this Declaration and the Rules. 2.32 pUBLIC REPORT: The term "public Report" shall mean a Final SubdiVision Public Report issued by the Department of Real Estate of tihe State of California for one or more Phases of the Project. 2.33 RESIDENCE: The term "Residence" shall mean a dwelling situated onla Lot, including any attached garage also situated on a Lot. 2.34 {ULES: The term "Rules" shall mean the rules adopted by the Board. 2.35 SUBASSOCIATION: The term "Subassociation" shall mean an "association" (other than the "Master Association") as defined in Section 1351(a) of the California Civil Code which is referred to and governed by a Supplemental Declaration, provided, that al! members of such association are also Members of the Master Association 2.36 $UBASSOCIATION COMMON AREA: The term "Subassociation Common Area'!' shall mean any lands within the Project which are conveyed to a Subassociation. 2.37 SUPPLEMENTAL DECLARATION: The term "Supplemental Declaration'! shall mean a declaration of covenants and restrictionS, other than this Declaration, recorded by Declarant or Merchant Builder, and which encumbers a portion of the Project. A Supplementa! Declaration may create a Subassociation. 2.38 SUBJECT PROPERTY: The term "Subject Property" shall mean Lots 1! through 12, inclusive, 21 through 30, inclusive, 49 through 58,]inclusive, 71 thrcugh 82, inclusive, 201 through 211, inclusive, And 218 through 236, inclusive, and lots 238 and 331 through 337i inclusive, as shown on the Map and all Improvements thereon. LIq~FLE & SAPUTO A TTOP-dV~"YS A T LA Vd 1901 OLYMPIC BOULEVARD, ~'100 WALNUT (2REEK. CA 9459&5024 (510) 944-5000 2.4 06/26/96 o o ARTICLE III OWNERSHIP AND EASEMENTS 3.1 NON-SEVERABILITY: The interest of each Owner in the use and benefit of the Master Association Common Area shall be appurtenant to the Lot owned by the Owner. No Lot shall be conveyed by an Owner separately from the interest in the Master Association~ Common Area. Any conveyance of any Lot shall automatically transfer the right to' use the Master Association Common Area without the necessity of express reference in the instrument ~of conveyance. Each Owner, whether by deed, gift, devise or operation of law, for the Owner's benefit and for the benefit of all other Owners and each successor of each Owner, specifically waives and abandons all rights, interests and causes of action for judicial partition of any interest in the Master AssociationlCommon Area and does further agree that no action for judicial partition shall be instituted, prosecuted or reduced to judgment. The ownership interests in the Master Association Common Area and Lots described in this Article are subject to the easements described, granted and reserved in this Declaration. Each of theieasements described, granted or reserved herein shall be established upon the recordation of this Declaration and shall be enforceable as equitable servitudes and covenants running with the land for the use and benefit of the Owners and their Lots superior tolall other encumbrances applied against or in favor of any portionlof the Project. 3.2 OWNERSHIP OF LOTS: Title to each Lot in the Project shall be conveyed in fee to an Owner. 3.3 OWNERSHIP OF MASTER ASSOCIATION COMMON AREA: Title to or a legal ownership interest in the Master Association Common Area in each PhaSe, if any, shall be conveyed to the Master Association prior to orlconcurrently with the conveyance of the first Lot in that particular Phase to an Owner. The Master Association shall be deemed to haive accepted title to the Master Association Common Area conveyed to it when a grant deed conveying title to the Master Association Common Area has been recorded iD the Official Records of the County. No Master Association Common Area may be developed or sold without the prior approval of the City of South San Francisco. ~ 3.4 EASEMENTS: The easements and rights specified in this Article are ihereby created and shall exist whether or not they are also set forth in individual grant deeds to Lots. 3.4.1 Easements On Map: The Master Association Common Area ~and Lots are subject to the easements and rights of way shown on the Map. 3.4.2 Easements For Master Association Common Area: Every Ownerishall have a non-exclusive right and easement for the ingress, egress, use and enjoyment of the Master Association Common Lrlq'LE & SAPUTO A TTO RN_WYS A T .LA [4t 1901 OLYMPIC BOULEVARD. ~100 WALNUT CREEK, CA 9d596-5024 (5~o) 3.1 07/03/96 0 0 Area which!shall be appurtenant Eo and shall pass with the title to every Lot,i subject to the right of the Master Association to dedicate and/or grant easements over all or any portion of the Master AssOciation Common Area. ,3.4.3 Utilities: Each Owner shall have a non- exclusive right and easement over, under, across and through the Project, except for portions of the Project on which a structure is situated, for utility lines, pipes, wires and conduits installed by Declarant or a Merchant Builder. ~3.4.4 Storm Drains: There are reserved and granted for the beniefit of each Lot and the Master Association Common Area, over, under, across and through the Project, except for portions of the Projedt on which a structure is situated, non-exclusive easements for surface and subsurface storm drains and the flow of storm waters in accordance with natural drainage patterns and the drainage patterns and Improvements installed or constructed by Declarant or a Merchant Builder. 13.4.5 Encroachment: No~-exclusive rights and easements are reserved and granted (i) for the benefit of each Lot, as dominan~ tenement, over, under and across each other Lot and the Master Association Common Area, as servient tenements, and (ii) for the benefit of the Master Association Common Area, as dominant tenement, over, under and across each Lot, as servient tenement. Such easements shall be for the purposes of encroachment, support, occupancy land use of such portions of Lots and/or Master Association Common Area as shall be encroached upon, used and occupied by the dominant tenement as a result of any original construction design, accretion, erosion, deterioration, decay, errors in oiriginal construction, movement, settlement, shifting or subsidence!of any building or structure or any portion thereof. If any portion of the Project is partially or totally destroyed, the encroachment easement shall exist for any replacement structure which is rebuilt pursuant to the original construction design. The easement foir maintenance of the encroaching Improvement shall exist for as lon~ as the encroachment exists; provided, however, that no easement for encroachment shall be created due to the willful misconduct of the Master Association, a Subassociation or any Owner. Ann easement for encroachment may but need not be cured by repair or restoration of the Improvement. 3.4.6 Support, Maintenance and Reoair: The Master Association and each Owner shall have a non-exclusive right and easement.appurtenant to the Master Association Common Area and to all Lots through each Lot and the Master Association Common Area for the support, maintenance and repair of..the Master Association Common Area and all Lots. 13.4.7 Easement to Governmental Entities: Ail governmental and quasi-governmental entities, agencies, departments, bureaus and utilities and their agents shall have a LITTLE & SAPUTO ATTORNEYS A T LA 1901 OLYMPIC BOULEVARD. ltl00 WALNUT CREEK., CA 94596-5024 (51.0) 944-5000 3.2 07/03/96 non-exclusive easement over the Master Association Common Area for the purposes of performing their duties within the Project. Signs providing ~otice of such easement shall be prominently displayed in the Master iAssociation Common Area. i3.4.8 Association Easements: The Master Association and its duly authorized agents and representatives shall have a non-exclusive right and easement as is necessary to perform the duties and iobligations of the Master Association set forth in the Project DoCuments, including the right to enter upon Lots and Subassociatlion Common Area, subject to the limitations contained in this Declaration. The Master Association shall have a non- exclusive right and easement over all Subassociation Common Area for the installation, maintenance and use of any irrigation pipes, wires or co!nduits originally installed by Declarant or a Merchant Builder which serve or benefit Master Association Common Area. Each SubassOciation shall have a non-exclusive right and easement over all M~ster Association Common Area for the installation, maintenance! and use of any irrigation pipes, wires or conduits originally installed by Declarant or a Merchant Builder which serve or benefit Subassociation Common Area. 3.4.9 Additional Easements: Notwithstanding anything expressed olr implied to the contrary, this Declaration shall be subject to all easements granted by Declarant or a Merchant Builder for the installation and maintenance of utilities and drainage facilities necessary for the development of the Project. 3.4.10 Easement For Adjoininc Property: Declarant and any Merchant Builder shall have, and hereby expressly reserve, a right and easement over and across the Master Association Common Area for the purposes of reasonable ingress to and egress from, over and across the Project, including private roads and pathways, to the Additional Property until all of the Additional Property is annexed to the Project. 3.4.11 Annexation of Additional Property: Upon the recordation of a Declaration of Annexation, the Lots and the Owners of Lots in the annexed Phase shall have all of the rights and easements specified in this Article and the Lots and the Owners of Lots_in the Project prior to annexation shall have all of the easements specified in this Article as though the annexed Phase were initially part of the Project. 3.4.12 TemPorary Access: The Master Association shall provide for and shall not preclude temporary access by the Plan Operator to the Conserved Habitat under the Habitat Conservation Plan in orde!r to permit the Plan Operator, its officers, employees, agents or Contractors to monitor compliance with the Habitat Conservation Plan and to develop plans for the protection, operation amd enhancement of the Conserved Habitat. Such access shall be Upon reasonable tarms agreed upon by the Master Association!in consultation with the Plan Operator (and in addition LITTLE & SAPUTO ATTORNEYS AT LAW Igol OLYMPIC BOULI~'ARD, 9100 %VALNUT CREEK. CA 94596-5024 (510) 944-5000 3.3 07/03/96 D- O III I to and not in derogation of any arrangements made by or on behalf of Declarant) and may include required waivers of liability as to, and provisilon of liability insurance with waivers of subrogation protecting,i the Master Association, and its directors, officers, members, agents and employees as additional insureds under any such policy. LITTLE & SAPUTO ATTORNEYS AT L.A~ 1901 O[.YMPIC BOUL~VA.~,.~, ~'tO0 WALNUT CREEK. CA ~4:59~.5024 (~10) 944-5000 3.4 07/03/96 0 ARTICLE IV USES AND RESTRICTIONS 4.1 AIRPORT DISCLOSURE: San Francisco International Airport, which is the fifth largest airport by volume in the United States and the seventh largest by volume in the world, is located approximately three (3) miles to the southeast of the Project. The City has required that Residences be designed to reduce noise and vibration levels within the Residences resulting from airport operations i and air traffic. Depending upon the cost and e~fectivene~s of these designs, different methods or designs which may be more or less effective may be used as construction of the Project prOgresses. The noise and vibration may increase or decrease depending upon current weather conditions and air traffic patterns, i$ome Owners may find the noise a.nd vibration to be offensive, iEach deed to a Lot shall include a covenant (acceptable to the CityiAttorney o~ the City of South San Francisco) requiring that the grantee be furnished with a copy of a Disclosure Statement (acceptabl~to the City of South San Francisco) to be recorded with the deed which warns the grantee of the noise and vibration impacts associated ~with airport operations. The covenant shall also require the Disclosure Statement to be sig~led (signature to be acknowledged by a notary public) by any purchaser of a Lot before or concurrently with the close of escrow for the sale of ~he Lot. 4.2 iHABITAT CONSERVATION BUFFER AREAS: Buffer areas have been established within the Project for the protection of the San Bruno Mountain Area Habitat ("Buffer Areas"). The specified width of the Buffer Areas may be amended only by agreement between the Master AssQciation and the City of South San Francisco pursuant to the Habi~a~ Conservation Plan. The Buffer Areas shall be kept free from structures or other facilities except for designated utility, sewer and d.r&inage facilities necessary for the use of the Project and designated roads, trails and other accesses necessary for the use of Declarant or a Merchant Builder for construction purposes, Master AssOciation or a Subassociation for access for maintenance, repair or reconstruction purposes, and the Pla~% Operator and Habitat Manager and the officers, employees, principals, a~ents or contractors of any and all of the foregoing entities. 4.3 iPARKING CONTROL: "No Parking' signs shall be posted along all iprivate roads (by the Subassociation which owns the private road) and all public roads (by the Master Association) in the Projec~ at locations required by the City Engineer of South San Francisco.! The entrances to the Project shall be posted pursuant to Section 22658(a) of the California Vehicle Code. Each Subassociation shall be responsible for the removal of unauthorized vehicles iparked along the private roads owned by that Subassocia~ion and additionally shall be responsible for ascertaining the registered a/id legal owner information, making all necessary ~nd required notifications, and shall notify ~he City of South San Francisco Police Department upon such removal. 4.4 PESTICIDE_CONTROL: No pesticides shall be applied to or used on, or permitted to be applied to or used on any portion of 07/03/96 the Project in those circumstances where the use of such pesticides would require a special governmental agency permit, or which are applied by aircraft or helicopter, or which are applied on a large- scale basis (that is, in excess of 0.5 acres upon a single application] without the prior written approval of the Plan Operator and prior written notice to the United States Fish and Wildlife Service. The foregoing covenant shall be binding on the Master Assoiciation, all Subassociations and all Owners. This covenant isl for the benefit of the conserved habitat and runs in favor of the City of South San Francisco as the local agency having jurisdiction under the Habitat Conservation Plan. 4.5 SPECIAL STANDARDS AND REQUIREMENTS: 4.5.1 City of South San Francisco Standards: The Master AssoCiation shall be responsible for continued permanent compliance With applicable ordinances and regulations of the City of South San Francisco, whether or not the same are referred to in the Project iDocuments. Each Subassociation is required to observe all such ordinances and regulations applicable to Subassociation Common Area.~ Each Owner and its Invitees are required to observe all such ordinances and regulations applicable to such Owner and Invitees. 4.5.2 Habitat Conservation: The Master Association shall compl~ with the regulations of the Habitat Conservation Plan, the Habitat iConservation Plan Agreement and the provisions of the Declaration iof Covenants and Restrictions on Real Property on San Bruno Mountain recorded on , 1996, as Document No2 Each Subassociation is required to observe all such ordinances and regulations applicable to Subassoclation Common Area. Each Owner and its Invitees are required to Observe all such ordinances and regulations applicable to such Owner and Invitees. 4.6 SUBASSOCIATION USE RESTRICTIONS: Nothing herein shall prevent thel enforcement of use restrictions set forth in a Supplementall Dec!aration or rules adopted by a Subassociation which are more restrictive than those set forth in this Declaration, provided that such restrictions and rules do not contradict any provipion se~t forth in this Declaration. 4.7 USE OF MASTER ASSOCIATION COMMON AREA: 41.7.1 Generally: Ail use of Master Association Common Area Rs subject to the Rules. There shall be no use of the Master Association Common Area except by Owners and their Invitees. Ail persons !residing within the Project may enjoy the use of all facilities iln the Master Association Common Area as long as they abide by the terms of the Project Documents. There shall be no obstruction !of any part of the Master Association Common Area. Nothing shalil be stored or keds in the Master Association Common Area without the prior consent of the Board. Nothing shall be done LITTLE & SAPUTO 1901 OLYMPIC BOULEVARD, ~I00 WALNUT CREEK. CA 94596-$024 (510) 944-5000 4.2 06/20/96 o Iii I I or kept in the Master Association Common Area which will increase the rate of iinsurance on the Master Association Common Area without the prior consent of the Board. No Owner shall permit anything to be physically done or kept in the Master Association Common Area or any other ~part of the Project which might result in the cancellation of insurance on any part of the Master Association Common Area, which would interfere with rights of other Owners, or which would be a nuisance, noxious, harmful or unreasonably offensive to other Owners. No waste shall be committed in the Master Association Common Area. 4.7.2 Open SDace: Any Open Space within the Project shall be left in its natural condition (weed abatement and hazard control permitted , except for the following limited uses: (a Trails, roads and paths, restricted to hiking, maintenancel and emergency vehicle uses may be constructed or maintained in the Open Space. (b) Underground utility lines, pipes and wires may be installed and maintained in the Open Space. (c) Drainage and water retention and storage facilities may be constructed and maintained in the Open Space. (d) Any Improvements which the Board determines are necessary tO prevent, mitigate, abate and control geologic hazards which could or do threaten or cause damage to the Lots or to improvements within or outside of the Project. LITTLE & SAPUTO A TTORNE~'$ A T ~ I~ 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK,. CA 94596..5024 ($10) 9,~-5000 4.3 06/20/96 o o ARTICLE V MAINTSNANCE, REPAIR .AND RECONSTRUCTION OF IMPROVEMENTS 5.1 MAINTENANCE OF MASTER ASSOCIATION COMMON AREA: !5.1.1 Generally: The Master Association shall be responsible! for the maintenance, repair, replacement, management, operation and upkeep of Master Association Common Area and all Improvementis situated in, upon or under the Master Association Common Area. The Master Association shall keep the Master Associationi Common Area and Improvements thereon in good condition and repair, provide for all necessary services and cause all acts to be don~ which may be necessary or proper to assure the maintenance of the Master Association Common Area in first class condition. ~° 15.1.2 Slope and Drainaqe Maintenance: The Master Association shall at all times, with respect to the Master Association Common Area, comply with the terms of that certain Slope and Drainage Maintenance Plan. dated June 19, 1996, ("Maintenance Plan") attached hereto as Exhibit "C" The Maintenancel Plan includes specifications, schedules and illustrative exhibits for the maintenance and repair of slope areas, drainage facilities, benches, gutters and subdrains. The Maintenance Plan provides for specific maintenance measures and inspections! to be performed by the Master Association on the Master Association Common Area in the Project for the protection of slope areas. FailUretoproperly maintainthede~cesassociated ~thslopeprotection could resultin severe propertydamage. 15.1.3 Open Space: The Master Association shall maintain any Open Space then in the Project in its present condition elxcept for the limited uses authorized by Section 4.7.2. The City may establish a Geologic Hazard Abatement District as authorized !by Public Resources Code Sections 26500 et seq. The Master AssoCiation's maintenance responsibilities in the Open Space shall incZude the following; provided, however, the Master Associatio~ shall not have any obligation to perform any maintenance responsibilities assumed by a Geologic Hazard Abatement District; and provided, further, the Master Association shall obtain HCP iapproval, as may be required, and any and all necessary regulatory ipermits (including grading permits): ~ (a) Geo!oqic hazard control: Landslides, subsidence,~ creep, soil erosion and resulting sedimentation, mudflows and other natural hazards (collectively referred to as "geologic hazards") may from time to time occur in the Open Space. These geologic hazards could threaten or cause damage to the Lots or to ImprOvements within or outside of the Project. The Master Association shall be responsible for maintaining the Open Space and shall use ~reasonabte efforts to prevent, mitigate, abate and control geologic hazards which could or do threaten the Lots or LITTLE & SAPUTO 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94596.5024 (510) 9.~-5000 5.1 06/20/96 improvements within or outside of the Project. The Master Association shall repair or control geologic hazards which have caused physical damage or which threaten to cause physical damage to Lots or iimprovements within or outside of the Project by the following techniques, among others: (i) Complete removal of the geologic hazard. (ii) Repair of landslides by excavation and backfilling and installation of subsurface drains. (iii) Construction of structures to mitigate geologic hazards, including retaining walls or debris walls that divert mudflows. (iv) Construction of drained engineered fill buttresses. The precediing list is not all-inclusive.; the Master Association shall, undeir the direction of a soils engineer or geotechnical engineer, ~se any technique which it reasonably determines is appropriateito repair or control geologic hazards which threaten or damage Lots or improvements within or outside of the Project. (b) Monitorinq: At least annually (between September 1 and September 30), the Master Association shall retain engineers oir geologists professionally licensed by the State of California ito inspect the Open Space and all storm drainage improvementS situated in the Master Association Common Area in accordance with the Maintenance Plan. The purpose of the inspection shall be to (i) ensure that all storm drainage improvements are properly clear and functional, (ii) to monitor and inspect anyigeologic hazards, and (iii) to make recommendations on the prevention, mitigation, abatement and control of geologic hazards. Copies of each annual report shall be provided to the City of SoUth San Francisco Department of Public Works and any governmenta% agencies which request those reports within twenty (20) working days after the Master Association's receipt of such report. Additionally, the Master Association shall also provide the Qity of! South San Francisco with the annual report a schedule for implementation of maintenance recommendations and any proposed departures ifrom such maintenance recommendations with reasons for any such proposed departures. In addition, prior to November 1 of each year, ithe Master Association shall provide the City of South San Francisco with a certificate signed by the qualified profession who prepared the inspection report during that calendar year, which certificate shall state that the maintenance work has been completed according to the recommendations of such maintenance reports, together with any exceptions in instances where there were departures from such maintenance recommendations. LITTLE & SAPUTO A ~Ot~'EYS ,'iT LA ~4' 1901 OLYMPIC BOULEVARD, #100 WALNUT CREEK. CA 94596-.502a (510) 9~-5000 5.2 06/20/96 0 O 5.1.4 San Bruno County Mountain Park Maintenance: The Master iAssociation shall maintain designated sites located outside the Project within San Bruno County Mountain Park consisting Of repairs resulting from conditions related to Project construction including slope failure or earth slippage pursuant to a Grant of Easement and Maintenance Agreement with the County of San Mateo. 5.1.5 Linear Park: Lots 169 and 170, as shown on the Map, are tol be dedicated to the City. Nevertheless, the Master Associationishall maintain the linear park, including landscaping and irrigation, situated on lots 169 and 170, as shown on the Map. 5.1.6 As-Built Plans: The Master Association shall maintain a copy of'the as-built plans for the Improvements under its jurisdiction. These plans shall be available for review by Owners andl prospective Owners and shall be referenced for performancel of the Master Association's duties. 5.2 ALTER3kTIONS TO MASTER ASSOCIATION COMMON AREA: 5.2.1 ADDroval: Only the Master Association shall construct, reconstruct, refinish or alter any Improvement situated in, upon ori under the Master Association Common Area. A proposal for any conStruction of or alteration, maintenance or repair to an Improvement may be made at any meeting. A proposal may be adopted by the Board, subject to the limitations contained in the Bylaws. Additionally, all structures constructed by Declarant or a Merchant Builder were constructed in compliance with the Terrabay Specific Plan. The Master Association may not erect any additional structure or make exterior modifications (and the City of South San Francisco may withhold building permits, variance permits or certificateis of occupancy for any additional structure or exterior modificatioin) until a Precise Plan or Final Subdivision Map has been approved authorizing such additional structure or exterior modification in accordance with the Terrabay Specific Plan. 15.2.2 Fundinq: Expenditures for maintenance, repair or replacement of an existing capital Improvement for which reserves ha~e been collected may be made from the Reserve Account. Subject to the limitations set forth in Section 6.5.2, the Board may levy a Special Assessment to fund any construction, alteration, repair or maintenance of an Improvement for which no reserve has been collected or to alter existing Improvements. 5.3 !MAINTENANCE OF LOTS AND RESIDENCES: Except as otherwise specifically provided in this Declaration or for maintenance and care provided by a Subassociation in accordance with a Supplemental Declaration, each Owner shall maintain and care for the Owner's Lot, incluiding the Residence, and other Improvements located thereon, ih a manner consistent with the standards established by the Project Documents and other well maintained residential areas in the vicinity of the Project. LI/'I'LE & SAPUTO 1901 OLYMPIC BOULEVARD. #100 WALNUT CREEK. CA 94596-5024 (510) 9~.4-5000 5.3 06/20/96 5.4 SLOPE AND DRAINAGE MAINTENANCE: Each Owner shall at all times compl~ with the applicable portions of the Maintenance Plan described lin 5.1.2, above, with respect to any slopes or storm drainage Improvements situated in their Lot. The Maintenance Plan includes specifications, schedules and illustrative exhibits for the maintenlance and repair of slope areas, drainage facilities, benches, gutters and subdrains. The Maintenance Plan provides for specific maintenance measures and inspections to be performed by the Owner for the protection of slopeareas. Failureto properly maintain the devices associated Nth slope protection could resultin severe property dama~. 5.5 MAINTENANCE AND REPAIR OF FENCES: Each fence which separates & Lot or Subassociation Common Area from Master Association Common Area shall be maintained, repaired and replaced by the Owner or the Subassociation, as the case may be. 5.6 LANDSCAPING: Ail landscaping in the Project shall be maintained and cared for in a manner consistent with the standards of design a~d quality as originally established and in a condition comparable to that of other well maintained residential areas in the vicinity of the Project. Ail landscaping shall be maintained in a neat and orderly condition and in general accordance with the landscaping plans filed with the City of South San Francisco (unless climatic conditions make such maintenance impracticable or unless the City of South San Francisco consents to a change). As-built landscape plans shall be provided to the Master Association~ and shall be available for review by Owners and prospectivei Owners. Any weeds or diseased or dead lawn, trees, ground cover or shrubbery shall be removed and replaced. Ail lawn areas shall be neatly mowed and trees and shrubs shall be neatly trimmed. Ail landscaping shall be maintained to the adjacent street curb!(s) . 5.6.1 Master Association: The Master Association shall be responsible for all landscaping located on Master Associationl Common Area. 5.6.2 Owners: Landscaping on Subassociation Common Area and up!on Lots shall be maintained by a Subassociation or by the Owner as provided in a Supplemental Declaration applicable to the Lot. 5.7 RIGHT OF MAINTENANCE AND ENTRY BY MASTER ASSOCIATION: If an Owner fails to perform maintenance and/or repair which that Owner is obligated to perform pursuant to this Declaration, and if the Master Association determines, after Notice and Hearing given pursuant to the provisions of the Bylaws, that such maintenance and/or repair is necessary to preserve the attractiveness, quality, nature and/or value of the Project, the Master Association may cause such maintenance and/or repair to be performed. The costs of such maintenance and/Or repair shall be charged to the Owner of the Lot as a Reimbursement Assessment. In order to effectuate the LITTLE & SAPUTO A TTOP~%'k~'S A T 1.4 W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CRffEK. CA 94596-5024 (Sro) 9~.5ooo 06/20/96 %0 o 0 provisions of this Declaration, the Master Association may enter any Lot whenever entry is necessary in connection with the performancel of any maintenance or construction which the Master Associationlis authorized to undertake. Entry within a Lot shall be made with as little inconvenience to an Owner as practicable and only after ~reasonable advance written notice of not less than forty-eight! (48) hours, except in emergency situations. Notwithstanding the foregoing, in the case of maintenance and/or repair required to be performed pursuant to Sections 5.3 and 5.6, the Master Association shall not commence proceedings unless it has first notified any Subassociation of which the Owner is a Member and the Subassociation has failed to take appropriate proceedings to enforce the maintenance and/or repair. 5.8 DAMAGE AND DESTRUCTION: The term "restore" shall mean repairing, ! rebuilding or reconstructing a damaged Master Association! Common Area Improvement to substantially the same condition and appearance in which it existed prior to fire or other casualty damage. If fire or other casualty damage extends to any Master Association Common Area which is. so insured, the Master Associationi shall proceed with the filing and adjustment of all claims arising under the existing insurance policies. The insurance proceeds shall be paid to and held by the Master Association~ 5.8.1 Bids: Whenever restoration is to be performed pursuant roi this Section, the Board shall obtain such bids from responsible'! licensed contractors to restore the damaged Master Associationl Common Area as the Board deems reasonable; and the Board, on behalf of the Master Association, shall contract with the contractor Whose bid the Board deems to be the most reasonable. 5.8.2 Sufficient Proceeds: The costs of restoration of the damaged Master Association Common Area shall be funded pursuant toithe provisions and in the priority established by this Section 5.8i2. A lower priority procedure shall be utilized only if the aggr'iegate amount of funds then available pursuant to the procedures iof higher priority are insufficient to restore the damaged Master Association Common Area. The following funds and procedures Shall be utilized: 1. The first priority shall be any insurance proceeds paid to the Master Association under existing insurance policies. 2. THe second priority shall be all Reserve Account funds designated !for the repair or replacement of the capital Improvement!(s) which has been damaged. 3. The third priority shall be funds raised by a Special Assessment against all Owners levied by the Board up to the maximum amount permitted without the approval of the Members in accordance with the limitations set forth in Section 6.5.2. LITTLE & SAPUTO ~rToR.¥a-~'s ~ r t~ w 1901 OLYMPIC BOULEVARD, #100 WALNUT CREEK. CA 94596-5024 ($1o) ¢-u-5ooo 5.5 06/20/96 4. The fourth priority shall be any funds raised by a Special Assessment against Owners levied by the Board pursuant to a vote of the Membersi pursuant to Section 5.8.3. ~.8.3 Additional SDecial Assessment: If the total funds availiable to restore the damaged Master Association Common Area pursuiant to the first three priorities described in Section 5.81.2 is insufficient to restore the damaged Master Association Common Area, then a special meeting of the Members shall be called for the purpose of voting whether to impose an additional Special Assessment and deciding upon the amount thereof. The Board Shall then contract for the restoration of the damaged Master Association Common Area as described above, making use of whatever funds are then available to it. 5.9 gONDEMNATION OF MASTER ASSOCIATION COMMON AREA: If all or any portion of the Master Association Common Area is taken for any public ior quasi-public use under any statute, by right of eminent domain or by purchase in lieu of eminent domain, the entire award shallibe deposited into the Current Operation Account until distributedI The Master Association shall distribute such funds equally to all Owners. The Master Association shall represent the interests of all Owners. 5.10 SITE IMPROVEMENT AND LANDSCAPE PLANS: Declarant and/or a Merchant ~uilder has or will construct the Project in accordance with the S~te Improvement Plans and Landscape Plans which are identified On the List of Site Improvement Plans and Landscape Plans attached hereto and incorporated herein as Exhibit "D", with such changes as may be approved by the City of South San Francisco in the cours!e of construction. Master Association, with respect to the ImprovSments it is required to maintain, and each Subassoclatlon, with respect to the Improvements they are required to maintain,i shall, except for such approved changes, maintain the site, landscaping and other Improvements in accordance with such plans. III '1 5.6 06/20/96 o O ARTICLE VI FUNDS AND ASSESSMENTS 6.1 COVENANTS TO PAY: Declarant and each Owner covenant and agree to pay to the Master Association the assessments and any Additional Charges levied pursuant to this Article VI. i6.1.1 Liability for Payment: The obligation to pay assessmentsi shall run with the land so that each successive record Owner of ~ Lot shall in turn become liable to pay all such assessmentsl. No Owner may waive or otherwise escape personal liability for assessments or release the Owner's Lot from the liens and charges hereof by non-use of the Master Association Common Area, abandonment of the Lot or any other attempt to renounce rights in the Master Assoc.iation Common Area or the facilities or services wiithin the Project. Each assessment shall constitute a separate assessment and shall also be a separate, distinct and personal obiligation of the Owner of the Lot at the time when the assessment Was levied and shall bind the Owner's heirs, devisees, personal representatives and assigns. Any assessment not paid when due is deliinquent. The personal obligation of an Owner for delinquent assessments shall not pass to a successive Owner unless the personal obligation is expressly assumed by the successive Owner. No!such assumption of personal liability by a successor Owner (including a contract purchaser under an installment land contract) Shall relieve any Owner from personal liability for delinquent ]assessments. After an Owner transfers fee title of record to a Lot, the Owner shall not be liable for any charge thereafter ilevied against that Lot. 6.1o2 Funds Held in Trust: The assessments collected by the Master Association shall be held by the Master Association for and on ibehalf of each Owner and shall be used solely for the operation, Care and maintenance of the Project as provided in this Declarationi. !6.1.3 Offsets: No offsets against any assessment shall be permitted for any reason, including, without limitation, any claim that the Master Association is not properly discharging its duties. 6.2 ~EGULAR ASSESSMENTS: 16.2.1 Pavment of Recutar Assessments: Regular AssessmentsI for each fiscal year shall be established when the Board approves the Budget for that fiscal year. Regular Assessments shall be levied on a fiscal year basis; however, each Owner shall be entitled to pay the Regular Assessment in twelve (12) equal imonthlY installments, one installment payable on the first day of each calendar month during the fiscal year, as long as the Owner is not delinquent in the payment of any monthly installmentI. If an Owner fails to pay any monthly installment by the sixtieth (60th) day after the date the installment was due, LI/q'LE & SAPUTO A'I'TOI~'E¥$ AT LA Fl 1901 OLYMPIC BOUL~;ARD, ti00 WALNUT CREEK. CA 94596-502a (5~0) 9~-~-5000 6.1 06/20/96 ~0 O~ O O that Owneris right to continue to pay the Regular Assessment in monthly installments shall immediately terminate for that fiscal year unless otherwise determined by the Board. Regular Assessments shall commence for all Lots in each Phase on the first day of the first month following the month in which the first Lot in that Phase is conveyed to an Owner and may commence prior to that date at the option of Declarant (or at the option of a Merchant Builder, in the event that the Merchant Builder owns all of the Lots in that Phase). 16.2.2 Allocation of Regular Assessments: The total amount of the Master Association's anticipated revenue attributable to Regu!ar iAssessments as.reflected in the Budget for that fiscal year shall ibe allocated equally among the Lots. After annexation of each Phaise, the allocation and assessment of the charges in the Budget shall be reallocated equally among all Lots in the Project, including those in the annexed Additional Property. For the first fiscal year, the Budget shall be substantially based upon the operating ~udget accepted by the Department of Real Estate of the State of California. After a new Phase has been annexed, the Board shall approve a Budget, which is substantially based upon the operating B~dget accepted by the Department of Real Estate of the State of Cailifornia in connection with the Public Report for that Phase, for !the remainder of the current fiscal year for use upon the commencement of Regular Assessments against Lots in the new Phase. i6.2.3 Open Space Reserve Component of Budcet: If the Project inqludes Open Space and so long as the City has not established a Geologic Hazard Abatement District as described in Section 5.1[.3, the provisions of this Section 6.2.3 shall apply. The budget referred to in Section 6.7, below, shall provide for the creation ofl a separate reserve fund ("Open Space Reserve Fund") which shall lbe established solely and exclusively for the purposes described i~ Sections 5.t.3 (a) and 5.1.4, above. The budget shall provide for[ the payment to the Master Association by each Owner of One HundrediTwenty Dollars ($120.00) per year for each Lot owned by the Owner !("Open Space Reserve Fund Assessment") . Subject to Section 136~ of the California Civil Code, the Board may increase or decreaselthe amount of the Open Space Reserve Fund Assessment as it deems appropriate; provided, however, that at anytime that the Open Space Reserve Fund is less than Two Hundred Thousand Dollars ($200,000.00), the Open Space Reserve Fund Assessment may not be reduced below One Hundred Twenty Dollars ($120.00) per year. The Open Space Reserve Fund budget may only be used for the purposes described iD paragraph (a) of Section 5.1.3, above or in 5.1.4, above. Ail linterest which the Master Association earns on the Open Space Reserve Fund shall be retained in the Open Space Reserve Fund and may not be used for any purpose other than the purposes described in paragraph (a) of Section 5.1.3, above, or in 5.1.4, above. Nei'-her the Board nor the Members shall have any right or power to withdraw funds from the Open Space Reserve Fund unless the funds withdI'awn are to be directly and immediately used to prevent, 6.2 06/20/96 LITTLE & SAPUTO ATTOR.',.'L~'¥$ AT LAW ... 1901 OLYMPIC BOULEVARD. *~100 WALNUT CREEK. CA 94596-5024 (510) 9~.a.$000 o D- O mitigate, abate or control a geologic hazard in accordance with paragraph (a) of Section 5.1.3 or to perform maintenance required by Section 5.1.4, above. When and if Two Hundred Thousand Dollars ($200,000.00) has accumulated into the Open Space Reserve Fund, the Board shall review the i extent of work which the Master Association' has performed in the past and determine whether Two Hundred Thousand Dollars ($20i0,000.00) represents an adequate reserve for the repair and control iof present and future geologic hazards as described in paragraph (a) of Section 5.1.3. If the Board determines that such amount is adequate, the Board may suspend contributions to the Open Space ReserVe Fund until (i) a geologic hazard occurs, or (ii) the Board subsequently determines that Two Hundred Thousand Dollars ($200,000.00) no longer'represents an adequate reserve fund. ~f the City establishes a Geologic Hazard Abatement District as!described in Section 5.1.3, the Board may adopt, but shall have no obligation to adopt, a resolution transferring some or all of ~he Open Space Reserve Fund. to the Geologic Hazard Abatement Diistrict. Upon the adoption of any such resolution, the Master Associiation shall transfer to the Geologic Hazard Abatement District thei amount set forth in the resolution. Commmencing on January 1, 1998, all references in this Section 6.2.i3, to the sum of Two Hundred Thousand Dollars shall be increased annually in proportion to the increase in the U.S. Bureau of Labor Statistics, Consumer Price Index: San Francisco/Oakland, California, !Table for All Urban Consumers. 61.2.4 Exemptions from Recular Assessment: Notwithst~nd]ing the provisions of Section 6.2, the Board may exempt all Owners firom payment of that portion of the Regular Assessment which is allocated for defraying operating expenses and reserves directly attributable to the existence and use of a common facility (including landscaping) that is not complete at the time Regular Assessments icommence until the first to occur of the following events: (i} a notice of completion of the common facility is recorded or i(ii) the common facility has been placed into use. 6i.2.5 Non-waiver of Assessments: If before the expiration of any fiscal year the Master Association fails to fix Regular Assessments for the next fiscal year, the Regular Assessment established for the preceding year shall continue until a new Regular Assessment is fixed. 6.3 SPECIAL ASSESSMENTS: Subject to the limitations set forth in SeCtzon 6.5.2, Special Assessments may be levied in addition toI Regular Assessments for (i) constructing capital Improvementsl, (ii) correcting an inadequacy in the Current Operation AcCount, (iii) defraying, in whole or in part, the cost of any cohstruction, reconstruction, unexpected repair or replacement Of Improvements in the Master Association Common Area, LITTLE & SAPUTO A TTORJ%'EY$ A T LA W 1901 OLYMPIC BOULEVARD, il00 WALNUT CREEK. CA 94596-5024 (510) 9a~.5000 III I ~l 6.3 06/20/96 or (iv) pa appropriate in the same 6.4 ling for such other matters as the Board may deem for the Project. Special Assessments shall be levied manner as Regular Assessments. {EIMBURSEMENT ASSESSMENTS: The Master Association shall levy a ReimiDursement Assessment against an Owner to reimburse the Master Asso~:iation for the costs of repairing damage caused by that Owner or that Owner's Invitee or if a failure to comply with the Project DocUments has (i) necessitated an expenditure of monies, including attorneys' fees, by the Master Association to bring the Owner or the Owner's Lot or Improvements into compliance or (ii) resulted in! the imposition of a fine or penalty. A Reimbursement Assessment Shall be due and payable to the Master Association when levied. AiReimbursement Assessment shall not be levied by the Master AssOciation until Notice and Hearing has been given in accordance with the Bylaws. Notwithstanding any other provision in the Project Documents expressed or implied to the contrary, Reimbursement Assessments are assessments but they may not be enforced by!any lien rights provided in this Declaration. 6.5 INCREASE LIMITATIONS: This Section 6.5 is intended to implement ~he limitations on increases in Regular and Special Assessments! established by Section 1366 of the California Civil Code. To the extent that the limitations set forth in Section 1366 are amended or replaced, the limitations set forth in this paragraph shall be automatically amended and replaced by the new statutory llimitations. Further, if the limitations set forth in Section 1366 are repealed, the provisions of this Section 6.5 shall no longer have any force or effect. 6.5.1 Limitation on ReGular Assessment Increases in Excess of 20%: Without the approval of the Members obtained pursuant t6 Section 3.3.2 of the Bylaws, the Board shall be prohibited from levying a Regular Assessment which is more than twenty percent (20%) greater than the Regular Assessment per Lot for the immediately preceding fiscal year. 6.5.2 5% Special Assessment Limitation: Without the approval ofi the Members obtained pursuant to Section 3.3.2 of the Bylaws, the Board shall be prohibited from levying Special Assessments! within a single fiscal year which in the aggregate exceed fivel percent (5%) of the budgeted gross expenses for that fiscal year~. i6.5.3 Budcet Distribution Limitation: Without the approval ofi the Members obtained pursuant to Section 3.3.2 of the Bylaws, the Board shall be prohibited from levying a Regular Assessment which is greater than the Regular Assessment per Lot for the immediately preceding fiscal year unless the Board has distributed~a Budget in compliance with Section 1365(a) of the California Civil Code. The pro forma operating Budget requirements currently established by Section 1365(a) are set forth in Section 6.71.1, below. LITTLE & SAPUTO 1901 OLYMPIC BOULEVARD. al00 WALNUT CREEK., CA 94596-5024 (510) 9~-5000 6.4 06/20/96 CD r~ CD ~.5.4 Emergency Exception: The limitations set forth in Sections !6.5.1 and 6.5.2, above, shall not apply to any Special Assessment or any increase in Regular Assessments necessary for: (i) extraordinary expenses required by an order of a court; (ii) extraordinary expenses necessary to repair or maintain the Project or any part of it for which the Master Association is responsible iwhere a threat to personal safety on the Project is discovered; i (iii) exzraordinary expenses necessary to repair or maintain the Project or any part Of it for which the Master Association ils responsible that could not have been reasonably foreseen bylthe Board when it prepared and distributed the Budget or Budget s~mmary to the Members; or (iv) extraordinary expenses incurred in making the first payment of the earthquake insurance surcharge pursuant to Section 5003 of the California Insurance Code. Prioir to the imposition or collection of an assessment pursuant roi this Section, the Board shall pass a resolution containing written findings as to the necessity of the extraordinary expenses involved and why the expense was not or could not have been reasonably foreseen in the budgeting process. The resolution shall be distributed to the Members with the notice of the increased assessment. 6.6 ACCOUNTS: ~.6.1 Tv~es of Accounts: Assessments collected by the Master tssociation shall be deposited into at least two (2) separate accounts with a responsible financial institution, which accounts shall be clearly designated as (i) the Current Operation Account and (ii) the Reserve Account. The Board shall deposit those portioins of the assessments collected for current maintenance and operation into the Current Operation Account and shall deposit those portiions of the assessments collected as reserves for replacement!and deferred maintenance of major components which the Master'Association is obligated to repair into the Reserve Account. .6.2 Reserve Account: Withdrawal of funds from the Reserve Account shall require the signatures of either two' (2) Directors or one (1) Director and one (1) officer of the Master Association who is not a Director. i (a) The Master Association shall pay out of the Reserve AccOunt only those costs that are attributable to the maintenancei repair or replacement of capital Improvements for which reserves have been collected and held and such other amounts which are expressly authorized by law. The Board shall not expend funds collected for the Reserve Account for any purpose other than the repair,! restoration, replacement, or maintenance of, or litigation involving the repair, restoration or maintenance of, major compoinents which the Master Association is obligated to repair, restore, replace, or maintain and for which the Reserve Account was established. 6.5 06/20/96 LITTLE & SAPUTO A TTOP~¥E¥S A T I.,.A W 1901 OLYMPIC BOULEVARD. ~100 WALNUT CREEK. CA 94596-5024 (510) 9~a.50oo o o o ~ (b) Notwithstanding paragraph (a), above, and so long as authorized by Civil Code Section 1365.5, the Board may authorize the temporary transfer of money from the Reserve Account I · to the Current Operation Account to. meet short-term cash-flow requirements or other expenses as long as the Board has made a written finding, recorded in the minutes, explaining the reasons why the transfer is needed and describing when and how the money will be repaid to the Reserve Account. The transferred funds shall be restoredlto the Reserve Account within one (1) year of the date of the initial transfer, unless the Board makes a finding supported by documentation that a temporary delay would be in the best interests of the Project. If the Board makes such a finding, the Board may delay the restoration until the time which the Board reasonably idetermines is necessary. The Board shall exercise prudent fiscal management in delaying reStoration of these funds and in restoring the expended funds to the Reserve Account; and if necessary, the Board shall levy a Special Assessment to recover the full amountiof the expended funds within the time limits required by this Sedtion. Any Special Assessment levied pursuant to the preceding sentence is subject to the. limitations imposed by Section 6.5i. 2. At its discretion, the Board may extend the date the payment!on the Special Assessment is due. Any extension shall not preventithe Board from pursuing any legal remedy to enforce the collection Of an unpaid Special Assessment. ~ (c) When a decision is made to use reserve funds or to temporarily transfer money from the Reserve Account to pay for !itigation,!the Master Association shall notify the Members of that decision inithe next mailing to the Member of a written notice or repcrt, as ~efined in Section 5016 of the Corporations Code. The Master Association shall prepare a monthly accounting of expenses related to !the litigation and the mailing shall state that. The accounting ishall be available for inspection by Members at the Master Association's office. 6.6.3 Current Operation Account: Ail other costs properly payable by the Master Association shall be paid from the Current Operation Account. 6.7 ~UDGET; FINANCIAL STATEMENTS, REPORTS AND STUDIES: 6.7.1 PreDaration of Ooeratin~ Budcet: This Section 6.7i. 1 is intended to implement the pro forma operating budget requirements established by Section 1365 of the California Civil Codei To the extent that Section 1365 is amended or replaced, tihe provisions of this Section shall be automatically amended and~replaced by the new statutory provisions. Further, if the requirements set forth in Section 1365 are repealed, the provisions of paragraph (d), below, shall no longer have any force or effect, i but the remainder of this Section, as modified by statute, shall remain in full force and effect. number of Members or the amount of assets 6.6 Regardless of the of the Master 06/.20/96 O O Associationi, each year the Board shall prepare and approve a pro forma operating budget which shall include all of the following: basis; determined (a) estimated revenue and expenses on an accrual (b) a statement as to whether the Board has or anticipates that the levl/ of one or more Special Assessments will be required to repair, replace, or restore any major component or to provide adequate reserves therefor; ! (c) a general statement setting forth the procedures ~sed by the Board in the calculation and establishment of reservesl to defray the future repair, replacement or additions to those mafor components that the Master Associat'ion is obligated to maintain? and i (d) a summary of the Master Association's reserves based upon the most recent review or study conducted pursuant to Section 1365.5 of the California Civil Code. The summary of the Master Association's reserves shall not be admissible in evidence to show improper financial management of the Master Association; provided that other relevant and competent evidence of the financial dondition of the Master Association is not made inadmissibl~ by this provision. The summary of the Master Association[s reserves shall be printed in bold type and shall include altl of the following: estimated r component; fiscal year (i) the current estimated replacement cost, ~maining life, and estimated useful life of each major ~nd (ii) if applicable, as of the end of the for which the study is prepared: A. the current estimate of the amount of cash reserves necessary to repair, replace, restore or maintain the major components; and B. the current amount of accumulated cash reserves actually set aside to repair, replace, restore, or maintain major components; and (iii) the percentage that the amount determined for purposes of clause (B) of subparagraph (ii) is of the amount determined for purposes of clause (A) of subparagraph (ii). 6.7.2 Distribution of BudGet: The Budget shall be made availaDle to each Member. Not less than forty-five (45) and not more than sixty (60) days prior to the beginning of the fiscal year, the Board shall distribute either a copy or a summary of the Budget to all Owners. If a summary of the Budget is distributed, LITTLE & SAPUTO t90l OLYMPIC BOULEVARD, ~ tO0 WALNUT CREE~ CA 94596-5024 (5~0) 9~-5000 6.7 06/20/96 O a written nDtice must accompany it. The written notice must be in at least 10-point bold type on the front page of the summary. It shall sta~e that the Budget is available at the Master Association's office (or at another suitable location within the Project) an..t that copies will be provided upon request and at the expense of ~he Master Association. If a Member requests a copy of the Budget, the Board shall provide a copy to the Member by first class United States mail within five (5) days after the Master Associationi's receipt of the request 6.7.3 Annual Report: Within one hundred twenty (120) days after~he close of each fiscal year, the Board shall cause to be distributed to each Member an annual report consisting of the following: (i) a balance sheet as of the end of the fiscal year; (ii) an operating (income) statement for the fiscal year; (iii) a statement o= changes in financial position for the fiscal year; and (iv) any information required to be reported under Section 8322 of the California Corporations Code. If the report is not prepared by an independent accountant, it shall be accompanied by the certificate~of an authorized officer of the Master Association stating that the statements were prepared without independent audit or review f.rom the books and records of the Master Association. Any annual report prepared for a fiscal year in which the gross income to the Master Association exceeds seventy-five thousand dollars ($75,000.00) shall be reviewed in accordance with generally accepted accounting principles by a licensee of the California State Board of Accountancy and a copy of such review shall be distributedl as part of the annual report. 6.7.4 Ouarterlv Reconciliation: At least quarterly, the Board shall: (i) cause a current reconciliation of the Master Association, s Operating Account(s) to be made and review the same; (ii) cause ia current reconciliation of the Master Association's Reserve AccQunt to be made and review the same; (iii) review the current year's actual reserve revenues and expenses'compared to the current year's Budget; (iv) review the most current account statements prepared by the financial institution where the Master Associationlhas its Operation and Reserve Accounts; and (v) review an income and expense statement for the Master Association's Operation and Reserve Accounts. 6.7.5 Reserve Account Study: This Section 6.7.5 is intended t0 implement the reserve account study and review requirements established by Section 1365.5 of the California Civil Code. To the extent that Section 1365~5 is amended or replaced, the provisions of this Section shall be automatically amended and replaced bY the new statutory provisions. Further, if the limitations! set forth in Section 1365.5 are repealed, the provisions Of this section 6.7.5 shall no longer have any force or effect. If!the current replacement value of the major components of the Master Association Common Area is equal to or greater than one-half (~) of the budgeted gross expenses for any fiscal year, then (a) at ileast once every three (3) years, the Board shall cause LITTLE & SAPUTO A TTORA'EY3 A T LA W 1901 OLYMPIC BOULEVARD. 9100 WALNUT CREE~ CA 9459~5024 (~o) 6.8 06/20/96 CD O a study of ithe reserve account requirements, as defined below, to be conducteid, and (b) the Board shall review this study annually and shall iconsider and implement necessary adjustments to the Board's analysis of the reserve account requirements as a result of that review. At a minimum, the study required by this Section shall include: (a) Identification of the major components of the Master Ass¢ciation Common Area which the Master Association is obligated tO repair, replace, restore or maintain which, as of the date of the (30) years; life of the the study; study, have a remaining useful life of less than thirty (b) Identification of the probable remaining useful components identified in (a), above, as of the date of (c) An estimate of the cost of repair, replacement, restorationi, or maintenance of each major component identified in (a), above,l during and at the end of its.useful life; and (d) An estimate of the total annual contribution necessary to defray the cost to repair, replace, restore, or maintain each major component identified in (a), above, during and at the end of its useful life, after subtracting total reserve funds as of the date of the study. The term :"reserve account requirements" as used in this Section 6.7!.S shall mean the estimated funds which the Board has determined are required to be available at a specified point in time to repair, replace, or restore those major components which the Master Association is obligated to maintain. 6.7.6 Notice of Increased Assessments: The Board shall proviide notice by first-class mail to the Owners of any increase in Regular Assessments or the levy of any Special Assessments not less than thirty (30) and not more than sixty (60) days prior~ to the ~.ncreased Regular Assessment or Special Assessment becoming due. 6.7.7 Statement of Outstandinc Char~es: Within ten (10) days of a written request by an Owner, the Master Association shall provide to the Owner a written statement which sets forth the amounts of delinquent assessments, penalties, attorneys' fees and other charges against that Owner's Lot. A charge for the statement may be made iby the Master Association, not to exceed the reasonable costs of preparation and reproduction of the statement. 6.7.8 Initial Six Month Statement: The Board shall prepare a balance sheet and an operating statement for the period ending on ~he last day of the sixth (6th) month from the date Regular Assessments were initially levied and distribute them to each Member within sixty (60) days after that date. The operating LITTLE & SAPUTO 1901 OLYMPIC BOULEVARD, ~'100 %VALNUT CREEK. CA. 94596-5024 (510) 9~.~-$000 6.9 06/20/96 statement Shall include a schedule of assessments received and receivable,~ identified by the Lot number and the name of the Member(s) assessed. 6.7.9 Schedule of Monetary Penalties: If ~he Board adopts a poilicy imposing any monetary penalty on or charging any fee to any Owner for a violation of the Project Documents by that Owner or that Owner's Invitee, the Board shall adopt a schedule of the monetary penalties that may be assessed for those violations. The penalties must be consistent with the Project Documents. A copy of thei schedule shall be personally delivered or mailed by first-class~ mail, postage prepaid, to each Owner by the Board. Each time the schedule is modified, the Board shall again deliver a copy to each Owner, either personally or by first-class mail, postage, prepaid. 6.8 ENFORCEMENT OF ASSESSMENTS: The Board shall annually distribute, inot more than sixty (60) and not less than forty-five (45) days p~ior to the beginning of the fiscal year, a statement of the Master Association's policies and practices in enforcing its remedies against Owners for defaults in the payment of Regular and Special Assessments, including the recording and foreclosing of liens against Owners' Lots. 6.8.1 Procedures: In addition to all other remedies provided bY law, the Master Association, or its authorized representative, may enforce the obligations of the Owners to pay each assessment provided for in this Declaration in any manner provided bylaw or by either or both of the following procedures: (a) By Suit: The Master Association may commence and maintain a suit at law against any Owner personally obligated to pay a delinquent assessment. The suit shall be maintained in the name of the Master Association. kny judgment rendered in any action shall include the amount of the delinquency, and such additional Costs, fees, charges and expenditures ("Additional Charges") and any other amounts as the court may award. A proceeding to recover a judgment for unpaid assessments may be maintained wiithout the necessity of foreclosing or waiving the lien established!herein. (b) By Lien: The Master Association or a trustee nominated b~ the Master Association may commence and maintain proceedings Ito establish and/or foreclose assessment liens. No action shall be brought to foreclose a lien until the lien is created by r~cording a Notice of Delinquent Assessment ("Notice"). The Notice mBst be authorized by the Board, signed by an authorized agent or bylany Owner if the Board fails or refuses to act, and recorded in ithe Official Records of the County. The Notice shall state the amount of the delinquent assessment(s), the Additional Charges incurred to date, a description of the Lot, the name(s) of the record IOwner(s) thereof and the name and address of the trustee, if iany, authorized by the Master Association to enforce LITTLE & SAPUTO A TTOR.','E'Y$ A 190i OLYMPIC BOULEVARD, ~100 V/ALNUT CREEK. CA ($1o) ~',-$ ooo 6.10 06/20/96 hs I '1 the lien by sale and shall be signed by the person authorized to do so by the Bioard, or if no one is specifically designated, by the President ot Chief Financial Officer. The lien may be foreclosed as provided in Section 1367 of the Civil Code of the State of California. 6.8.2 Additional Char~es: In addition to any other amounts dueior any other relief or remedy obtained against an Owner who is delinquent in the payment of any assessments, each Owner agrees to pay such Additional Charges as the Master Association may incur or levy in the process of collecting from that Owner monies due and del!inquento Ail Additional Charges shall be included in any judgment in any suit or action brought to enforce collection of delinquent iassessments or may be levied against a Lot as a Reimbursement Assessment. Additional Charges shall include, but not be limited to, the following: , (a) Attorneys' Fees: Reasonable attorneys' fees and costs incurred in the event an attorney(s) is employed to collect anylassessment or sum due, whether by suit or otherwise; ~ (b) Late CharGes: A late charge in an amount to be fixed by the Board in accordance with the then current laws of the State of C~lifornia to compensate the Master Association for additional ~ollection costs incurred in the event any assessment or other sum ~s not paid when due or within any "grace" period establishedlbY law; (c) Costs of Suit: Costs of suit and court costs incurred as!are allowed by the court; (d) Interest: Interest on the delinquent assessment and Additional Charges at a rate fixed by the Board in accordance With the then current laws of the State of California; and (e) Other: Any such other additional costs that the Master Association may incur in the process of collecting delinquent assessments or sums. 6.8.3 Certificate of Satisfaction 'of Lien: Upon payment or ~ther satisfaction of a delinquent assessment for which a Notice was recorded, the Master Association shall record a certificate istating the satisfaction and release of the assessment lien. ~.8.4 Waiver of Homestead Protections: Each Owner; does herebyiwaive, to the extent permitted by law, the protections of any declared homestead or homestead exemption or redemption laws under the laws of California as applied to any action to enforce or collect ass~ssments levied by the Master Association. s.l~. o6/2o/96 LITI'LE & SAPUTO A ?'TOR~¥k-¥$ .4 1" LA W .. - 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94596-5024. (510) 944-$000 0~ (D 6.9 SUBORDINATION OF LIEN: Notwithstanding any~rovision to the contrary, the liens for assessments created pursuant to this Declarationl shall be subject and subordinate to and shall not affect the rights of the holder of a First Mortgage made in good faith and for value. Upon the foreclosure of any First Mortgage on a Lot, any lien for assessments which became due prior to such foreclosure shall be extinguished; provided, however, that after such forecliosure there shall be a lien on the interest of the purchaser at the foreclosure sale to secure all assessments, whether RegUlar or Special, charged to such Lot after the date of such foreclosure sale, which lien shall have the same effect and shall be enforced in the same manner as provided herein. For purposes oflthis Section, a Mortgage may be given in good faith or for value even though the Mortgagee has constructive or actual knowledge of the assessment lien provisions of this Declaration. 6.10 $UBASSOCIATION ASSESSMENTS: 6.10.1 Joint Collection of Regular Assessments: The Master Assoriation and a Subassociation may agree to authorize either the Master Association or the Subassociation to provide Owners who are members of that Subassociation with a single periodic statement, directing those Owners to pay the Regular Assessment levied by both the Master Association and the Subassociat~on to either the Master Association or the Subassociation ("collecting association"). The collecting associationlshall regularly provide the other association with an accounting Of all delinquent assessments and shall pay to the other associationleach billing period all Regular Assessments collected for that association. 6.10.2 Parity of Priority of Subassociation Documents: In the event that the Master Association forecloses its lien pursuant to paragraph 6.8.1., the foreclosure shall not affect the validity or enforceability of any Supplemental Declaration. LITTLE & SAPUTO A TT O RA'E'Y$ AT LA ~F 1901 OLYMPIC BOULEVARD, ~100 V~ALNUT CREEK, CA 94596-5024 (510) 9.~-5000 6.12 06/20/96 ~D O ARTICLE VII MEMBERSHIP IN AND DUTIES OF THE MASTER ASSOCIATION 7.1 THE ORGANIZATION: The Master Association is a nonprofit mutual benefit corporation. !ts affairs.shall be governed by and it shall have the powers set forth in the Project Documents. 7.2 ~EMBERSHIP: Each Owner (including Declarant and any Merchant Builder for so long as Declarant or the Merchant Builder is an Owner)i, by virtue of being an Owner, shall be a Member of the Master AssoCiation. No other person shall be accepted as a Member. 7.2.1 ADourtenant to Ownership: Master Association membership is appurtenant to and may not be separated from the ownership of a Lot. Membership shall terminate upon termination of Lot ownership. Ownership of a Lot shall be the sole qualification for Masterl Association membership. Membership shall not be transferredI pledged or alienated in any way except upon transfer of title to! the Owner's Lot (and then only to the transferee of title to such Lot). Any attempt to make a prohibited transfer is void. Membership shall not be related to'the use or non-use of the Master AssoCiation Common Area and may not be renounced. The rights, duties, privileges and obligations of all Members shall be as provided!in the Project Documents. 7.2.2 Annexation: Upon the commencement of Regular Assessmentslin a subsequent Phase, the Owners of the Lots described in the Declaration of Annexation for that Phase shall become Members. 7.3 VOTING: Any action required by law or by the Project Documents tO be approved by the Owners, the Members or each class of Members Shall be approved, if at all, in accordance with the procedures Set forth in the Bylaws. 7.4 RULES: The Board may propose, adopt, amend and repeal Rules appropriate for the management of the Project, which are consistent With the Project Documents. The Rules may also govern the use of the Master Association Common Area by Owners or their Invitees. After adoption, a copy of the Rules shall be furnished to each owner. Owners shall be responsible for distributing the Rule~ to their tenants. 7.5 DEDICATION AND EASEMENTS: Subject to any applicable provision ih the Bylaws, the Board shall have the power to dedicate any of the Master Association Common Area to an appropriatel public authority for public use or (ii) grant and convey easements and licenses for use and rights of way in, on, over and under any Master Association Common Area. 7.6 iNSUPJLNCE: The Board shall make every reasonable effort to obtain and maintain the insurance policies as provided in this Section. If the Board is unable to purchase a policy or if the LITTLE & SAPUTO A TTORN~'$ .4 T LA W 1901 OLYMPIC BOULI~-VARD, 9100 WALNUT CREEK, CA 94596-5024 (5lO) 9a.~.$0o0 7.1 06/20/96 O Board believes that the cost of the policy is unreasonable, the Board shall call a special meeting of Members to determine what action to take. The Board shall comply with any resolution concerning insurance coverage adopted at such a meeting. 7.6.1 General Provisions and Limitations: Ail insurance policies shall be subject to and, where applicable, shall contain the following provisions and limitations: (a) Underwriter: Ail policies (except earthquake insurance) isbell be written with a company legally qualified to do business iN the State of California and (i) holding a "B" or better general pOlicyholder's rating and a "6" or better financial performance index rating as established by Best's Insurance Reports, (ii) reinsured by a company described in (i), above, or (iii) if sUch a company is not available, the best rating possible or its equivalent. (b) Named Insured: Unless otherwise provided in this SectiOn, the named insured shall be the Master Association or its authorized representative, as a trustee for the Owners. However, all policies shall be for the benefit of Owners and their Mortgageesi as their interests may appear. (c) Authority to NeGotiate: Exclusive authority to adjust losses under policies obtained by the Master Association shall be vested in the Board; provided, however, that no Mortgagee having anl interest in such losses may be prohibited from participating in any settlement negotiations related thereto. (d) Contribution: In no event shall the insurance coverage obtained and maintained by the Master Association be brought inito contribution with insurance purchased by Owners or their Mortgagees. (e) General Provisions: To the extent possible, the Board ishall make every reasonable effort to secure insurance policies providing for the following: (i) A waiver of subrogation by the insurer as to any claims against the Board, the manager, the Owners and their respective! servants, agents and guests; (ii) That the policy will be primary, even if an Owner hlas other insurance which covers the same loss; (iii) That no policy may be cancelled or substantially modified without at least ten (10) days' prior written notice to the Master Association and to each. First Mortgagee !listed as a scheduled holder; (iv) An agreed amount endorsement, if the policy cohtains a coinsurance clause; LITTLE & SAPUTO .4 FrORA'EY$ A T L,,I W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94596-5024 (510) 9,~4-50o0 7.2 06/20/96 replac'ement (v) A guaranteed cost endorsement; and replacement cost or (vi) An inflation guard endorsement. (f) Term: The period of each policy shall not exceed three (3) years. Any policy for a term greater than one {1) year must permit short rate cancellation by the insureds. ' (g) Deductible: The policy may contain a reasonable deductible and the amount of the deductible shall be added to the face amount of the policy in determining whether the insurance equals replacement cost. 7.6.2 Types of CoveraGe: Unless the Master Associationidetermines otherwise pursuant to Section 7.6, the Board shall obtain at least the following insurance policies in the amounts specified: (a) Property Insurance: A policy of property insurance for all insurable Master Association common Area Improvements against loss or damage by fire or other casualty, in an amount equal to the full replacement cost (without respect to depreciation) of the Master Association Common Area, and exclusive of land, foundations, excavation and other items normally excluded from coverag!e. A replacement cost endorsement shall be part of the policy. (b) Liability Insurance: A combined single limit policy of liability insurance in an amount not less than Three Million Dollars ($3,000,000.00) covering the Master Association Common Area iand all damage or injury caused by the negligence of the Master Association, the Board or any of its agents or the Owners against any liability to the public or to any Owner incident to the use ~f or resulting from any accident or intentional or unintentional1 act of an Owner or a third party occurring in or about any Master Association Common Area. If available, each policy shal~ contain a cross liability endorsement in which the rights of the named insured shall not be prejudiced with respect to any action bY one named insured against another named insured. (c) Worker's Compensation: Worker's compensation insurance roi the extent necessary to comply with all applicable laws of the State of California or the regulations of any governmentati body or authority having jurisdiction over the Project. (d) Fidelity Bond: A fidelity bond naming the Board, the OWners, the Master Association and such other persons as the Board may designate as obligees, in an amount equal to at least one-fourth {1/4) of the total sum budgeted for the Current Operation AcCount and Reserve Account for the current fiscal year. LITTLE & SAPUTO ,4 TTO R.Vk"YS .4 TEA ~/ 1901 OLYMPIC BOULEVARD. riO0 WALNUT CREEK. CA 94596-5024 ($zo) 7.3 06/20/96 o o [-. 0 The fidelity bond shall contain a waiver of any defense based on the exclusion of persons serving without compensation. ~ (e) Directors and Officers: Errors and omissions insurance covering individual liability of Directors and officers for their Negligent acts or omissions while acting in their capacities as Directors and officers. (f) Other Insurance: Other types of insurance as the Board determines to be necessary to fully protect the interests of the Owners. ~ (g) Insurance by Owner: Each Owner, at that Owner's sol& cost and expense, shall obtain insurance coverage which the Owner considers necessary or desirable to protect that Owner and ~hat Owner's Lot, Residence and personal property; provided, however, that no Owner shall be entitled to maintain insurance coverage in a manner so as to decrease the amount which the Master[Association, on behalf of all Owners and their Mortgagees, may realize under any insurance policy which the Master Association !may have in effect at any time. 7!.6.3 Annual Review: The Board shall review the adequacy of] all insurance, including the amount of liability coverage andl. the amount of property damage coverage, at least once every year.i At least once every three years, the review shall include a replacement cost appraisal of all insurable Master Association] Common Area Improvements without respect to depreciationI. The Board shall adjust the policies to provide the amounts and types of coverage and protection that are customarily carried by prudent owners of similar property in the area in which the Project is situated. 7i. 6.4 Notice to Members: The Master Association shall provide the notices described in this Section at least annually. In addition, if any policy has been cancelled and not immediately [replaced/ the Master Association shall notify the Members by first-class mail as soon as reasonably practical. If the Master ASsociation renews any of its policies or a new policy is issued to!replace an insurance policy of the Master Association and there is! no lapse in coverage, the Master Association shall notify the Members of that fact in the next available mailing to all Members pursuant to Section 5016 of the Corporations Code. If the information to be disclosed pursuant to this Section is specified in! the insurance policy declarations page, the Master Association Imay satisfy its obligations, under this Section by distributing copies of that page to the Members~ liability po[ LITTLE & SAPUTO [901 OLYMPIC BOULEVARD. 9100 WALNUT CREE~ CA 94596-5024 (510) 9~-5000 (a) General Liability: A summary of the general icy that states all of the following: (i) The name of the insurer; 7.4 06/20/96 Master Assc limits and followed; (ii) The policy limits; (iii) Whether an insurance agent assisted the ciation in determining the general liability policy whether the insurance agent's recommendations were (iv) The deductibles; (v) The person or entity that is responsible for paying 2he deductible in the event of loss; and (vi) Whether the coverage extends to Improvements made to Lots or Residences. For purposeS of this Section, the term "insurance agent" means an insurance agent as defined in Section 1621 of the Insurance Code, an insurance broker, or an agent of an insurance agent or insurance broker. (b) Earthc~uake and Flood: A summary of the Master Association s earthquake and flood insurance policies, if either has been is:;ued, that states all of the following: (i) The name of the insurer; (ii) The policy limits; (iii) The deductibles; and (iv) The person or entity that is responsible for paying the deductible in the event of loss. i (c) Directors and Officers: A summary of the Master AssoCiation's liability coverage policy for the directors and officers of the Master Association that states all of the following: (i) (ii) 7.7 COMPLETION IMPROVEMENTS: .7.1 Improvement : Board when (including ] thereof have The name of the insurer; and The policy limits. OF MASTER ASSOCIATION COMMON AREA Insoection of Master Association Common Area (a) Declarant or a Merchant Builder may notify the the Master Association Common Area Improvements .andscaping) for a particular Phase or some portion been completed. Within thirty (30) days after giving of such notilce, Declarant or the Merchant Builder, as the case may LITTLE & SAPUTO 1901 OLYMPIC BOULEVARD, #100 WALNUT CREEK, CA 94596-5024 (510) 9,~-5000 7.5 06/20/96 c~ o r..-I be, ("Reque!sting Declarant") and the Board'(collectively referred to as "Part~es") shall jointly request that a qualified engineer or architect (iwhich term shall include "landscape architect," if the nature of tlhe improvements warrants) employed by the City inspect the Master !Association Common Area improvements as to which such notice has ibeen given. If the City is unwilling or unable to provide ani engineer or architect to make such inspection, the Parties sha%l jointly select an independent and qualified engineer or architeck to perform the inspection. If the Parties are unable or fail to ~gree on the selection within thirty (30) days after the joint selection is requested, then each Party, within the next thirty (30)idays, shall select a licensed engineer or architect and the personsi so selected, within fifteen (15) days after both are selected, shall jointly select a third engineer or architect. If either of the Parties fails to select an engineer or architect within the time provided, then the failing Party shall be deemed to have irrevocably waived its right to select, and the inspection shall be performed by the engineer or architect selected by the other Part~. If the engineers or architects selected by the Parties shall fail to select a third.person within the time provided, t!hen either Party may petition any court of competent jurisdictioh for appointment of such a third person. The person(s) selected orlappointed pursuant to'this paragraph is referred to in this sectioh as the "EXpert'' Requesting Declarant shall pay the reasonable ~ompensation of the Expert. i (b) Promptly upon the selection of the Expert as provided in Section 7.7.1(a), the Expert shall inspect the Master Association Common Area Improvements as to which notice has been given. The Parties 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 ("Report") Go the Parties 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 specificati~pns therefor. The Report shall constitute conclusive and binding evidence that, except as otherwise proved therein and except for latent defects, if any, the Improvements have been constructed in accordance with the plans and specifications therefor, a~d thereafter Requesting Declarant shall have no further liability, ~uty or obligation with respect to such Improvements, except to ~emedy any defects specified in the Report and except with respect to latent defects, if any, and the separate repair ob!igationslof Requesting Declarant under express written warranty, if any. i (c Requestin? Declarant shall correct any defects specified ~n the Report, and the Expert shall reinspect such ImprovementS within thirty (30) days after request. Such reinspection shall be performed in the same manner as provided for LIT"FLE & SAPUTO A TT O I~ %' EY S A T I.,,4 N/ 1901 OLYMPIC BOULEVARD, #t00 V,/ALN UT CREEK. CA 94596-5024 ($10) 9'~s.5000 7.6 06/20/96 0 0 the first iinspection. Promptly after the reinspection is completed, [the Expert shall submit another written report ("Reinspect%on Report.") to the Parties 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 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 Requesting Declarant shall have no further liability, duty or obligation with respect to such Improvements, except to remedy any defects specified in the ReinspectioD Report, and except with respect to latent defects, if any, and the separate repair obligations of Requesting Declarant under express written warranty, if any. i. (d) Additional inspections and Reinspection Reports shall be made, if necessary, all in accordance with and with the same effectlas provided above. ~ (e) If the Improvements to be inspected are landscapingi Improvements, then notwithstanding anything to the contrary contained herein, the Expert shall be a horticulturist 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; and, if Requesting Declarant has posted a bond or other security ("Bond") to secure the faithful performance to complete any of the Master Association!Common Area Improvements, and if the Master Association is the obligee under the Bond, the Board shall release in writing any and allirights under the Bond pertaining to the Improvements and shall execute any other documents as may be reasonably necessary tq effect the release of the Bond. g.7.2 Enforcement of ComDletion Bonds: If Declarant or a MerchaDt Builder has posted a Bond to secure the faithful performanceito complete any of the Master Association Common Area Improvement~ and the Master Association is the obligee under the Bond, the Iprovisions of this Section 7.7.2 shall apply to initiating action to enforce the obligations of Declarant or a Merchant Builder, as the case may be: i (a) The Board shall consider and vote on the question of! action by the Master Association to enforce the obligations iunder the Bond with respect to any Improvements for which a notice of completion has not been filed within sixty (60) days after~he completion date specified for that Improvement in the planned!construction statement appended to the Bond. If the Master Assocliation has given a written extension for the completion LITTLE & SAPUTO ATTO~%'k-}'$ AT LAW/ 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94.596-$024 (51o) 'a-ta-Sooo 7.7 06/20/96 0 O of any Master Association Common Area Improvements, the Board shall consider and vote whether to take action if a notice of completion has not been filed within thirty (30) days after the expiration of the most recent extension. ~ (b) If the Board decides not to act or fails to initiate action to enforce bonded obligations, then upon receipt by the Board olf a petition for a special meeting signed by Members entitled tolcast five percent (5%) or more of the total number of votes whichi may be cast by the Members, the Board shall call a special me~ting of the Members. If the Board has failed to initiate action, the Members shall determine whether they wish to initiate action. If the Board has decided not to initiate action, the Members shall determine whether to override the Board's decision. The meeting shall be held not less than thirty-five {35) nor more th~n forty-five (45) days afte~ receipt of the petition by the Board. iAt the meeting, the approval of the Members, excluding the vote of!Declarant, to take action to enforce the obligations under the B~nd shall be deemed to be the decision of the Master Associationi The Board shall thereafter implement the decision by initiating and pursuing appropriate action in the name of the Master AssoCiation. 7.8 TRANSPORTION PROGRAMS: The Master Association shall implement traffic system management measures and encourage Owners to participate. The measures shall include the operation of a rideshare matching program. The purpose of the rideshare matching program sha~l be to maintain a database of Project residents and their commute patterns in order to promote the formation of carpools an¢ vanpools. LI'i~FLE & SAPUTO A TTOP-dVE'¥~.4 T L~ W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CR~£1~ CA 94596-5024 ($10) 9.~-5000 7.8 06/20/96 O ARTICLE VIII DEVELOPMENT RIGHTS 8.1 ~IMITATIONS OF RESTRICTIONS: Declarant and the Merchant Builder(s) are undertaking the work of developing Lots or other Improvementq within the Project. The completion of the development and the marketing, sale, lease, rental and/or other disposition of the Lots is essential to the establishment and welfare of the Subject ProPerty and the Additional Property as a residential community, lin order that the work may be completed and the Project be established as a fully occupied residential community as rapidly as possiblei nothing in this Declaration shall be interpreted to deny Declarant or the Merchant Builder(s) of the rights set forth in this Artiicle. The rights reserved by Declarant and the Merchant Builder(s) pursuant to this article are subject to all applicable state, County and City laws, regulations and ordinances. 8.2 RIGHTS OF ACCESS AND COMPLETION OF CONSTRUCTION: Until the fifth (5th) anniversary of the original issuance of the Public Report forl the most recent Phase, Declarant, the Merchant Builder(s), land their contractors and subcontractors shall have the right to: (ii) obtain reasonable access over and across Master AssociationiCommon Area, Subassociation Common Area or do within any Lot owned or controlled by it whatever is reasonably necessary or advisable in connection with the completion of the Project; and (ii) erect, Construct and maintain on the Master Association Common Area of the Project and/or within any Lot owned or controlled by it such structures as may be reasonably necessary for the conduct of its business to complete the work, establish the Project as a residentialicommunity and dispose of the Project in parcels by sale, lease,i rental or otherwise. 8.3 $IZE AND APPEARANCE OF PROJECT: Declarant and the Merchant Builder(s) shall not be prevented from increasing or decreasing ~he number of Lots that may be annexed to the Project or from changing the exterior appearance of Residences or Master AssociationiCommon Area structures, the landscaping or any other matter direCtly or indirectly connected with the Project in any manner deemed desirable by Declarant or the Merchant Builder(s), if Declarant mr the Merchant Builder(s) obtain all governmental consents required by law. 8.4 ALTERATIONS TO MAP: At anytime within three (3) years from the dat'ie that the first Lot in a Phase is conveyed to an Owner other than al Declarant or a Merchant Builder, the boundaries of any Lot or Common Area in that Phase may be altered by a lot line adjustment Or other change reflected on a subsequently recorded parcel map oir subdivision map; provided that the altered boundaries are approved by Declarant, any affected Merchant Builder(s), and all owners o!f the Property involved in the boundary adjustment (the Board with! , irespect to property owned by the Master Association). Any such aliteration shall be effective upon recordation of the parcel map, subdivision map or other document aproved by the City LITTLE & SAPUTO A rroP~¥~'~ A T E~ ~/ WALNUT CREE~ CA 94596-5024 (510) 9-~-5000 06/20/96 and, upon siuch recordation, the boundaries of the altered Lot or Common Areal shall be altered for purposes of this Declaration to conform to the boundaries as modified. 8.5 MARKETING RIGHTS: Declarant and the Merchant Builder(s) shall have ~he right to: (i) maintain model homes, signs, banners, flags, balloons, sales, leasing and/or rental offices, storage areas, par~ing lots and related facilities in any Lots owned or controlled iby Declarant or the Merchant Builder(s) or Master Associationi Common Area within the Project as are necessary or reasonable, in the opinion of Declarant or the Merchant Builder(s) (S), for the sale, lease, rental or other disposition of the Lots; (ii) make reasonable use of the Master Association Common Area and ~acilities for the sale, lease, rental or other dispositionl of Lots; (iii) 'use any Lots owned or controlled by Declarant Or The Merchant Builder(s) in accordance with any promotionallprograms established from time to time by Declarant or The Merchant Builder(s); and (iv) conduct its business of disposing of Lots byisale, lease, rental or otherwise; provided, however, Declarant or The Merchant Builder(s), as the case may be, shall pay to the iMaster Association reasonable rent for the use of any Master AssoCiation Common Area facilities, if Declarant's or the Merchant BUilder's use of those Master Association Common Area facilities materially interferes with the full use and enjoyment of the Master Association Common Area facilities by Owners. 8.6 TITLE RIGHTS: This Declaration shall not be construed to constitute a limitation on Declarant's or any Merchant Builder's title rights to the Additional Property prior to its annexation, nor shall it impose any obligation on Declarant, any Merchant Builder or any other person or entity to improve, develop or annex any portion of the Additional Property. This Declaration shall not be construed to limit the right of Declarant or any Merchant Builder at!any time prior to such an annexation to establish additional ilicenses, easements, reservations, restrictions and rights-of-way for itself, utility companies or others as reasonably necessary for the proper development and disposition of property owned by DeClarant or any Merchant Builder. 8.7 AMENDMENT: After the expiration of Class B membership (as definediin the Bylaws), the provisions of this Article may not be amendedl without the written consent of Declarant and any Merchant Builder until either (i) all of the Additional Property has been annexed to the Project and all of the Lots in the Project cwned by Detlarant and any Merchant Builder have been conveyed or (ii) five !5) years after the original issuance of the Public Report for the most recent Phase of the Project, whichever occurs first. LITTLE & SAPUTO 1901 OLYMPIC BOULE'VAgD, ~100 WALNUT CR~K. CA 9459~5024 (5~0) ~-5000 8.2 06/20/96 ARTICLE IX RIGHTS OF MORTGAGEES 9.1 ]ONFLICT: Notwithstanding any contrary provision contained ellsewhere in the Project Documents, the provisions of this Article shall control with respect to the rights and obligationsiof Mortgagees specified herein. 9.2 LIABILITY FOR UNPAID ASSESSMENTS: Any First Mortgagee who obtains!title to a Lot pursuant to the remedies provided in the First Mortgage (except upon a voluntary conveyance to the First Mortgagee) or by foreclosure of the First Mortgage shall take the property f~ee of any claims for unpaid assessments or charges against theiLot which accrue prior to the acquisition of title to the Lot by the First Mortgagee. 9.3 iNSPECTION-OF BOOKS AND RECORDS: Upon request, any Owner or FirSt Mortgagee shall be entitled to inspect and copy the books, records and financial statements of the Association, the Project DocUments and any amendments thereto during normal business hours. 9.4 FINANCIAL STATEMENTS FOR MORTGAGEES: If the Project then contaihs more than fifty (50) Lots, the Association, at its expense, shall prepare an audited financial statement for the immediately!preceding fiscal year. The audited financial statement shall be available within one hundred twenty (120) days of the end of the AssoCiation's fiscal year. The Association shall provide a copy of theiaudzted financial statement to any Mortgagee who makes a written r~quest for it. If the Project then contains fifty (50) or fewer Lots and if an audited financial statement is not available, any Mortgagee who desires to have an audited financial statement ~f the Association may cause an audited financial statement tO be prepared at the Mortgagee's expense. 9.5 MORTGAGE PROTECTION: A breach of any of the conditions or the enforcement of any lien provisions contained in this i shall not .defeat or render invalid the lien of any Declaration~ First Mortgage made in good faith and for value as to any Lot in the Project! but all of the covenants, conditions and restrictions contained in this Declaration shall be binding upon and effective against any!Owner of a Lot if the Lot is acquired by foreclosure, trustee's sale or otherwise. LITTLE & SAPUTO .4 ~/'ORA'EY$ A T ~ ~ 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREE~ CA 9459~024 (510) ~.5000 9.1 06/20/96 0 o ARTICLE X AMENDMENT AND ENFORCEMENT 10.1 AMENDMENTS: Prior to the conveyance of the first Lot to an Owner other than a Declarant or a Merchant Builder, any Project Document may be amended by Declarant and all Merchant Builders. After the conveyance of the first Lot, the Project Documents may be amended with the approval of each class of Members; provided however, that no provision of this Declaration which provides for a vote of more than fifty-one percent (51%) may be amended by a vote less than the percentage specified in the section to be amended. L0.t.1 ADDroval bv Merchant Builder: Notwithstanding any language in this Declaration to the contrary, so long as Declarant or any Merchant Builder is a Class B M~mber and Declarant or any such Merchant Builder owns any portion of the Project or the Additional Property, no provision of this Declaration may be amended without the approval of Declarant (if it then owns any portion of the Project or the Additional Property) and the Merchant Builder (if it then owns any portion of the Project or the Additional property). i0.1.2 Approval By City: Notwithstanding any language in this Declaration to the contrary, no amendment or rescission to Sections 2.15, 3.3, 3.4.7, 4.1, 4.2, 4.3, 4.5.1, 4.5.2, 5.1, 5.2.1, 5.6, or 5.10, the last sentence of Section 8.1, or this Section 10.1.2 shall be effective without the prior written consent of the City of South San Francisco. 10.1.3 ADDrovals Required by Habitat Conservation Plan: Notwithstanding any language in this Declaration to the contrary, no amendment or rescission to Sections 3.4.12, 4.2, 4.4 or this Section 10.1.3 shall be effective without obtaining all approvals required pursuant to the Habitat Conservation Plan and the Habitati Conservation Plan Agreement. ~0.1.4 Recordation of Amendment: Any amendment to this Declaration shall be effective upon the recordation in the Official Records of the County of an instrument executed by the President and Secretary of the Master Association which sets forth the t-erms of the amendment and a statement which certifies that the required percentage of Members have approved the amendment. 10.2 ENFORCEMENT: 10.2.1 Rights to Enforce: Declarant, any Merchant Builder(s), the Master Association and/or any Owner shall have the power to enforce the provisions of the Project Documents in any manner provided by law or in equity and in any manner provided in this Declaration. The Master Association may institute appropriate legal action, temporarily suspend an Owner's voting rights and/or levy a fine against an Owner in a standard amount to be determined LITTLE & SAPUTO A FFOR.¥LD'$ A T LA Vd 1901 OLYMPIC BOUL~/ARD, ~100 WAI-WUT CREEK. CA 94596-5024 (510) 9.~.a .$000 10.1 06/20/96 O by the Board from time to time. No determination of whether a violation has occurred shall be made until Notice and Hearing has been provided to the Owner pursuant to the Bylaws. If legal action is instituted by the Master Association, any judgment rendered shall include all appropriate Additional Charges. Notwithstanding anything tolthe contrary contained in this Declaration, the Master Associationi shall not have the power to cause a forfeiture or abridgement of an Owner's right to the full use and enjoyment of the Owner's Lot and Residence due to the Owner's failure to comply with the provisions of the Project Documents, unless the loss or forfeiture Ls the result of the judgment of a court, an arbitration decision, a foreclosure proceeding or a sale conducted pursuant to this Declaration. The provisions of this Declaration shall be equitable servitudes, enforceable by Declarant, any Merchant Builder, any Owner and/or the Master Association against the Master Association and/or any other Owner, tenant or occupant of the Project. Except as otherwise provided, Declarant, any Merchant Builder(s), the Master Association or any Owner(s) shall have the right to enforce, in any manner permitted by law or in equity, any and all of nhe provisions of the Project.Documents, including any decision made by the Master Association, upon the Owners, the Master Association or upon any property in the Project. 0.2.2 Violation of Law: The Master Association may treat any O her's violation of any state, municipal or local law, ordinance olr regulation, which creates a nuisance to the other Owners in the Project or to the Master Association, in the same manner as a violation of the Project Documents by making such violation subject to any or all of the enforcement procedures set forth in this Declaration, as long as the Master Association complies winh the Notice and Hearing requirements. 10.2.3 Remedies Cumulative: Each remedy provided by this Declaration is cumulative and not exclusive. 10.2.4 Nonwaiver: The failure to enforce the provisions of any covenant, condition or restriction contained in this Declaration shall not constitute a waiver of any right to enforce any such provisions or any other provisions of this Declaration!. 10.2.5 Enforcement by City, County and HCP Trust: The City is hereby made a third party beneficiary of this Declaration as to Section 10.1.2 and the sections listed in Section 10.1.2 and is granted the right but not the duty to enforce the provisions of those sections. The County, the San Bruno Mountain Habitat Conservation Trust and the Plan Operator are hereby made a third party beneficiary of this Declaration as to Section 10.1.3 and the sections listed in Section 10.1.3 and are granted the right but not the duty to enforce the provisions of those sections. 10.3 NOTICES TO MEMBERS OF LEGAL PROCEEDINGS: Prior to filing any civil action against Declarant, any Merchant Builder or LITTLE & SAPUTO A TTO R~V~"~'$ A T LA V/ 1901 OLYMPIC BOULEVARD, #100 WALNUT CREEK, CA 94596-5024 (510) 944-5000 10.2 06/20/96 O any other developer of the Project for alleged damage to (i) Master Association Common Area, (ii) all or portions of the Lots which the Master Association is required to maintain, or (iii) the Lots which arises from or is integrally related to alleged damage to the Master Association Common Area or all or portions of the Lots which the Master Association is required to maintain, the Board shall provide written notice to each Member specifying each of the following: i (a) That a meeting will take place to discuss problems that may lead to the filing of a civil action; (b) The options, including civil actions, that are available to address the problems; and (c) The time and place of the meeting. If the Master Association has reason to believe that the applicable statute of limitations will expire before the Master Association is able to give notice, hold the meeting and file the civil action, the Master Association may file the civil action first and then give the notice within thirty (30) days after filing of the action. 10.4 CONDITIONS TO CERTAIN LEGAL PROCEEDINGS: Before the Master Association commences an action for damages against Declarant, any Merchant Builder or any other developer of the Project (collectively referred to in this Section 10.4 only as "Declarant") based upon a claim for defects in the design or construction of the Project, all of the following requirements shall be met, except as otherwise provided in this Section: ].0.4.1 Master Association's Notice: The Master Association shall give written notice to Declarant (Master Association's Notice) which shall include all of the following: (a) A preliminary list of defects; (b) A summary of the results of any survey or questionnaire distributed to Owners to determine the nature and extent of defects; and (c) A summary of the results of any testing conducted to determine the nature and extent of defects or the actual test results. 10.4.2 Notice Toils Limitations on Actions: Upon delivery of the Master Association's Notice to Declarant, a period of time, not to exceed ninety (90) days unless the Master Association and Declarant agree to a longer period of time, shall commence during which the Master Association and Declarant shall attempt to settle the dispute or attempt to agree to submit it to alternative dispute resolution. Except as provided in this Section, and notwithstanding any other provision of law, the LITTLE & SAPUTO AI-I~ORNE~ AT EA~V 1901 OLYMPIC 8OUL~ARD, 9100 WALNUT CREE~ CA 9459~50~ (5~0) ~-5000 10.3 06/20/96 O O mailing of the Master Association's Notice shall toll all statutory and contractual limitations on actions against all parties who may be responsible for the damages claimed, whether named in the notice or not, including claims for indemnity applicable to the claim, for a period of one hundred fifty (150) days or a longer period agreed to in writing by the Master Association and Declarant. At any time, Declarant may give written notice to cancel the tolling of the statute of limitations provided in this Section. Upon delivery of this wri=ten cancellation notice, the Master Association shall be relieved of any further obligations to satisfy the requirements of this Section 10.4. The tolling of all applicable statutes of limitations shall cease sixty (60) days after the written notice of cancellation by Declarant is delivered to the Master Association. 10.4.3 Meetinqs: Within twenty-five (25) days after the delivery date of the Master Association's Notice, Declaran~ may request in writing to meet and confer with the Board and to inspect the Project and conduct testing, including testing that may cause physical damage to any property in the Project in order to evaluate the claim. If Declarant does not make a timely request to meet and confer with the Board or to conduct inspection and testing, the Master Association shall be relieved of any further obligations to satisfy the requirements of this Section 10.4. Unless Declarant and the Master Association agree otherwise, the meeting shall take place not later than ten (10) days from the date of Declarant's written recuest at a mutually agreeable time and place. The meeting shall be subject to the provisions of Civil Code Section 1363.05(b) . The discussions at the meeting are privileged communications and are not admissible in evidence in any civil action, unless the Master Association and Declarant consent to their admission. The meeting shall be for the purpose of discussing all of the following: (a) The nature and extent of the claimed defects; (b) Proposed methods of repair to the extent there is sufficient information; (c) Proposals for submitting alternative dispute resolution; and the dispute to (d) Requests from Declarant to inspect the Project and ~onduct testing. If Declarant makes a written request writing to meet and confer with the Board pursuant to this Section, Declarant shall deliver the Master Association's Notice to any insurer that has issued a policy to Declarant which imposes upon the insurer a duty to defend or indemnify Declarant for losses resulting from the defects identified in the Master Association's Notice. Upon receipt, the notice by Declarant shall impose upon the insurer any obligation which would be imposed under the terms of the policy if the insured had been served with a summons and complaint- for damages. LITTLE & SAPUTO A TTOR.~.'E'YS A T I_..4 W [901 OLYMPIC BOULEVARD, #100 WALNUT CREEK. CA 94596-5024 ($i0) 9,~4-5000 10.4 06/20/96 LO O~ 0 ~-~ ~.. 0 Declarant shall inform the Master Association when Declarant delivers the notice to each insurer pursuant to this subsection. 10.4.4 Inspections and Testinq: If the Master Association conducted inspection and testing prior to the date it sent the Master Association's Notice, the Master Association shall make available for inspection and testing at least those areas inspected or tested by the Master Association at the earliest practicable date. The inspection and testing shall be completed within fifteen (15) days from the date the Master Association makes these areas available for inspection and testing, unless the Master Association and Declarant agree to a longer period. If Declarant does not timely complete the inspection and testing, the Master Association shall be relieved of any further obligation to satisfy the requirements of this Section 10.4. The manner in which the inspection and testing shall be conducted, and the extent of any inspection and testing to be conducted beyond that which was conducted by the Master Association prior to sending the Master Association's Notice, shall be determined by agreement of the Master Association and Declarant. Declarant shall pay all costs of inspection and testing that are requested by Declarant, restore the property to the condition which existed immediately prior to the testing and indemnify the Master Association and Owners for any damage resulting from the testing. Interior inspections of Residences shall be conducted in accordance with the Project Documents, unless otherwise agreed to by the affected Owner. The results of the inspection and testing shall not be inadmissible in evidence in any civil action solely because the inspection and testing was conducted pursuant to this subsection. ].0.4.5 Settlement Offer: Within thirty 30) days of the completion of inspection and testing pursuant to Section 10.4.4 or, if no inspection and testing is conducted, within thirty (30) days of the meeting held pursuant to Section 10.4.3, Declarant shall submit all of the following to the Master Association: ] (a) A request to meet with the Board to discuss a written set41ement offer; (b) A written settlement offer, which may include an offer to submit the dispute to alternative dispute resolution, and a concise explanation of the specific reasons for the terms of the offer; (c) A statement that Declarant has access to sufficient funds to satisfy the conditions of the settlement offer; and (d) A summary of the results of testing conducted for the purpose of determining the nature and extent of defects, if testing has been conducted; provided however, if the Master Association provided Declarant with actual test results in the LITTLE & SAPUTO 19oi OLYMPIC BOULEVARD. ~I00 WALNUT CREEK. CA 9a59~50~ (510) ~4-5000 10.5 06/20/96 0 0 Master AssoCiation's Notice, Declarant shall provide the Master Association~ith actual test results. tf Declaranc does not timely submit the items required by this subsection, the Master Association shall be relieved of any further obligations to satisfy the requirements of this Section 10.4. No less than ten (10) days after Declarant submits the items required by this sub~ection, Declarant and the Board shall meet and confer about the Settlement offer, including any offer to submit the dispute to ~lternative dispute resolution. ~0.4.6 Time Periods and Notices: At any time after delivery of ~he Master Association's Notice, the Master Association and Declarant may agree in writing to modify or excuse any of the time periods or other obligations imposed.by this Section 10.4. Except for the notice required pursuant to Section 10.4.7, all notices, request, statements or other communication required pursuant to this Section 10.4 shall be delivered by one of the following: (a) By first-class registered or certified mail, return receipt requested; or i (b) In any manner in which it is permissible to serve a summons pursuant to Section 415.10 or 415.20 of the Code of Civil Procedure. 10.4.7 Re~ection of Settlement Offer: If the Board rejects a settlement offer presented pursuant to Section 10.4.5, the Board skall hold a meeting open to each Member. The meeting shall be held no less than fifteen (15) days before the Master Association commences an action for damages against Declarant. No less than fifteen (15) days before the date of the meeting, a written notice shall be sent to each Member specifying all of the following: (a That a meeting will take place to discuss problems that may lead to the filing of a civil action; (b The time and place of the meeting; (c The options, including the filing of a civil action, thati are available to address the problems; (d) The complete text of any written settlement offer and a concise explanation of the specific reasons for the uerms of thei offer submitted to the Board by Declarant and of any offer by Declarant to submit the dispute to alternative dispute resolution; land i (e) The preliminary list of defects contained in the Master Association's Notice and a list of any other documents LI'I-['LE & SAPUTO ATTOP, NEYS AT LAW 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEIC, CA 94596..5024 (510) 9~.~-5000 10.6 06/20/96 o ~-~ o with the MaSter Association's Notice with information as to where and when Members may inspect those documents. Declarant Shall pay all expenses attributable to sending the settlement Offer and any offer for alternative dispute resolution to all Members and an amount not to exceed three dollars ($3.00) per Member !to defray the expenses of holding the meeting. The discussions at the meeting, the contents of the notice and the items required to be specified in· the notice are privileged communications and are not admissible in evidence in any civil action, unless the Master Association consents to their admission. 10.4.8 Master Association Relieved of Oblications: If the Master Association is relieved of its obligations to satisfy the requirements of this Section 10.4 before all requirements have been satisfied,, the Master Association may commence an action for damages against Declarant thirty (30) days after sending a written notice to each Member specifying all of the following: (a) The preliminary list.of defects contained in the Master Association's Notice and a list of any other documents with the Master Association's Notice with information as to where and when Members may inspect those documents; (b) The options, including the filing of a civil action, that are available to address the problems; and (c) A statement that if five perceht (5%) of the Members request a special meeting of Members to discuss the matter within fifteen (15) days of the date the notice is mailed or delivered tO the Members, a meeting of the Members shall be held. I0.4.9 Failure to Comol¥: The only method of seeking judicial relief for the failure of the Master Association to comply with this Section 10.4 shall be the assertion, as provided for in this subsection, of a procedural deficiency to an action for damages by the Master Association against Declarant after such an action has be~n filed. A verified application asserting such a procedural deficiency shall be filed with the court no later than ninety (90)!days after the answer to the plaintiff's complaint has been served,i unless the court finds that extraordinary conditions exist. Upon the verified application of the Master Association or Declarant alleging substantial noncompliance with this Section 10.4, the court shall schedule a hearing within twenty-one (21) days of the application to determine whether the Master Association~ or Declarant has substantially complied with this Section. The issue may be determined upon affidavits or upon oral testimony, in the discretion of the court. (a) If the court finds that the Master Association did not substantially comply with this Section, the court shall stay the action for up to ninety (90) days to allow the Master Association to establish substantial compliance. The court shall LI'I~LE & SAPUTO A T'rOtU,.'h'¥$ A T LA W/ 1901 OLYMPIC BOULEVARD, ~ 100 '~/ALNUT CRIEI:F.. CA 94596-5024 (510) g.~-5000 10.7 06/20/96 o set a hearing within ninety (90) days to determine substantial compliance by the Master Association. At any time, the court may extend the~ period of the stay upon application of the Master Association if good cause is shown. If, within the time set by the court pursuant to this Section, the Master Association has not established that it has substantially complied with this Section, the court shall determine if, in the interest of justice, the action should be dismissed without prejudice or if another remedy should be fashioned. Under no circumstances shall the court dismiss the action with prejudice as a result of the Master Association's failure to substantially comply with this Section. In determining the appropriate remedy, the court shall consider the extent to which Declarant has complied with this Section. If the alleged noncompliance of either Declarant or the Master Association resulted from the unreasonable~ withholding of consent for inspection ~or testing by an Owner, it shall not be considered substantial~noncompliance provided that the party alleged to be out of compliance did not encourage the withholding of consent. If the Court finds that. Declarant did not pay (i) all of the costs of inspection and testing or (ii) its required share of the costs of holding the meeting and of all expenses attributable to sending the settlement offer, all as required above, the court shall order Declarant to pay any deficiencies within thirty (30) days, with interest, and any additional remedy which the court determines, in the interest of justice, should be fashioned. 10.5 OPTIONAL LEGAL PROCEEDINGS: The Master Association is authorized to perform any act reasonably necessary to resolve any civil claim or action through alternative dispute resolution proceedings such as mediation or arbitration proceedings. The Board is also authorized to do all of the following: Provide, or in good faith attempt to provide, one hundred (120) days advance notice of (a) the Board's intent to initiate the prosecution of any civil action and (b) the nature and basis of the claim. If ~otice is given, it shall be given to every Member and every entity or person who is a prospective party to the action. Notice can be given more than one hundred twenty (120) days prior to the expiration of any pertinent statute of limitations and without prejudice to the Master Association's right to enforce the Project Documents. Notice need not be given prior to the filing of an action in small claims court or an action solely to enforce assessment Obligations; Endeavor to submit the matter to alternative dispute resolution in compliance with the provisions of Section 1354(b) of the Civil Code prior to initiating the prosecution of a civil action solely for declaratory relief or injunctive relief (a) to enforce the Project Documents or (b) in connection with a claim for monetary damages of five thousand dollars ($5,000.00) or less; LI~I'LE & SAPUTO 190i OLYMPIC BOULEVARD, ~100 WALN UT CREEK. CA 9459~-502~ (510) 9-~-5000 10.8 06/20/96 Make a reasonable effort, in good faith, to meet and confer with every person who is a party about (a) appropriate processes for resolving the civil action, including available alternative dispute resolution proceedings; (b) appropriate processes for avoiding orireducing costs or losses by the parties associated with the action; i(c) providing an opportunity to cure any alleged defect in Master Association Common Area which is the basis for the action; and (d) providing for the scope of discovery, if any, to be conducted prior to the inception of any alternative dispute resolution procedure; Consider diverting the prosecution or defense of any civil action to alternative dispute resolution proceedings such as mediation or arbitration; and Agree to participate, and participate fully and in good faith, in the resolution of any civil action through any alternative dispute resolution proceedings, including but not limited to mediation or arbitration and pay costs reasonably incurred by the Master Association on account of those alternative dispute resolution proceedings. LITTLE & SAPUTO A TTOI~%'k~'$ A T LA ~' 1901 OLYMPIC BOULEVARD, ~I00 WALNUT CREEK., CA 9459(~5024 (510) 9-~,~.5000 10.9 06/20/96 O ARTICLE XI ANNEXAT I ON 11.1 RESTRICTION ON ANNEXATION: Property may be added to the project by annexation only in accordance with the provisions of this Article. 11.2 pROPERTY WHICH MAY BE ANNEXED; APPROVAL OF MEMBERS: Ail or any portion of the Additional Property may be added to the Project by Declarant or any Merchant Builder as one or more subsequent Phases without the approval of the Master Association or any Owner, if annexed prior to the third (3rd) anniversary of the original issuance of the most recent Public Report issued for a Phase of the Project ("Annexation Period"). Property other than the Additional Property and any portion of the Additional Property not annexed within the Annexation Period may be annexed to the Project only with the approval of two-thirds (2/3) of each class of Members. 11.3 pROCEDURE FOR ANNEXATION: In.addition to any required approval by Members, a Declaration of Annexation for the property to be annexed must be recorded. The Declaration of Annexation shall: (i) describe the portion of the Additional Property to be annexed; (ii) describe any Master Association Common Area within the Additional Property to be annexed; (iii) set forth the ownership of any such Master Association Common Area; and (iv) specify that all of the covenants, conditions and restrictions'of this Declaration shall apply to the annexed Additional Property in the same manner as if it were originally covered by this Declaration. The Declaration of Annexation shall also provide, if and only if at the time of the first conveyance of a Lot in a Phase Declarant or Merchant Builder, as the case may be, has rented or leased Lots in that Phase for a period of at least one (1) year after the most recent review of a budget for that Phase by the Department of Real Estate, that Declarant or Merchant Builder, as the case may be, shall pay to the Master Association the following amount: an amount equal to that portion of the Regular Assessment which would have been attributable to each Lot in that Phase and which would have been allocable to reserves for replacement and deferred maintenance of Master Association Common Area Improvements had ~egular Assessments in that Phase commenced at the time of the most recent review of a budget for that Phase. Such amount, if any, shall be paid to the Master Association prior to or concurrently with the first conveyance of a Lot in that Phase. The Declaration of Annexation may also (i) impose any additional covenants, conditions and restrictions on the Additional Property that are necessary to include the property in the Project and to reflect differences in nature, if any, of the .Improvements to be constructed on the Additional Property and (ii) provide for a specified date on which assessments shall commence for Lots in that Phase, provided that the date specified may not be later than the first day of the first month following the month in which the first Lot in that Phase is conveyed to an Owner. No Declaration of LITTLE & SAPUTO .4 TTOR.'s'~'$ A T LA W 1901 OLYMPIC BOULEVARD, ~100 VIAL.NUT CREEK., CA 94596.5024 (510) 11.1 06/20/96 O O Annexation shall diminish the covenants, conditions or restrictions established by this Declaration nor shall it discriminate between the Owners in the Project. No Declaration of Annexation shall alter or change the general common plan or scheme created by this Declaration nor shall it affect the provisions hereof as covenants running with the land or as equitable servitudes. 11.4 EFFECT OF ANNEXATION: Upon recordation of a Declaration of Annexation and the commencement of assessments for Lots in the annexed Phase, Owners of Lots in the annexed Phase shall be Members, shall be subject to this Declaration and shall be entitled to use all Master Association Common Area in the Project. The Master Association shall reallocate the Regular Assessments so as to assess each Owner of a Lot in the Project for a proportionate share of the total expenses of the Project. 11.5 DEANNEXATION AND AMENDMENT: Declarant or any Merchant Builder, as the case may be, has the right, at its sole option, to (i) amend a Declaration of Annexation by executing and recording an amendment of the Declaration of Annexation, PrOvided that the amendment is consistent with this Article, or (ii) remove from the Project any property described in a recorded Declaration of Annexation for a Phase by executing and recording a rescission of the Declaration of Annexation, as long as all of the following conditions are satisfied at the time of the execution and recordation of the amendment or rescission: (a) no Lot in that Phase has been conveyed to an Owner; (b) no Master Association Common Area in that Phase has been conveyed to the Master Association; and (c) assessments have not commenced for any Lot in the annexed property. 11.6 AMENDMENT: After the conversion of Class B membership to Class A membership and until the day following the date which is the third (3rd) anniversary of the original issuance of the most recent Public Report issued for a Phase of the Project, this Article may not be amended without the written consent of Declarant (and any Merchant Builder if it then owns any portion of the Additional Property) unless all of the Additional Property has been annexed to the Project. LITTLE & SAPUTO A T-f O R,W EYS A T LA H/ 19Ol OLYMPIC BOULEVARD, ~'100 WALNUT CRE£K. CA 94596-5024 (510) 9~-~-5000 11.2 06/20/96 O o ARTICLE XII CONDITIONS PRECEDENT TO LEVY OF REGULAR ASSESSMENTS AND OPERATION OF MASTER ASSOCIATION 12.1 CONDITION TO FULL OPERATION: Notwithstanding any provision in this Declaration to the contrary, the Master Association shall not commence to fully operate until the date (the "Operative Date") that (i) the Master Association first takes title to Master Association Common Area or, (ii) if sooner, at least one hundred twenty five (125) Lots have been annexed into the Project (including the Subject Property) and would be subject to the obligation to pay Regular Assessments had this Article XII not been included in this Declaration. 12.2 BEFORE FULL OPERATION: At all times prior to the Operative Date, all of the covenants, conditions and restrictions shall be operative and enforceable, but the Master Association shall have no obligation and shall impose no assessments. Without limiting the foregoing, the following Sections shall not be operative until the Operative Date: Sect.ions 6.1, 6.2, 6.3, 6.5, 6.6, 6.7 (except for Section 6.7.9 which shall be operative), 6.8, 6.9, 6.10 and 7.6. 12.3 COMMENCEMENT OF FULL OPERATIONS: Effective as of the Operative Date, the Master Association shall adopt a Budget, levy Regular Assessments and commence full operations as though this Article XII had not existed, and thereafter, this Article XII shall have no further force and effect. LI"I~rLE & SAPUTO A TTOR.~,'~"YS A T LA P/ 1901 OLYMPIC BOULEVARD. ~'100 WALNUT CREEK~ CA 94596-5024 (510) 9~-5000 12.1 06/20/96 ARTICLE XIII MISCELLANEOUS PROVISIONS 13.1 TERM OF DECLARATION: This Declaration shall continue for a term of fifty (50) years from its date of recordation. Thereafter, this Declaration shall be automatically extended for successive periods of ten (10) years until two-thirds (2/3) of the Owners approve a termination of this Declaration. 13.2 CONSTRUCTION OF PROVISIONS: The provisions of this Declaration shall be liberally construed to effect its purpose of creating a uniform plan for the development and operation of a planned development pursuant to the provisions of Section 1350, et seq. of the California Civil Code. 13.3 BINDING: This Declaration shall be for the benefit of and be binding upon all Owners, their respective heirs, legatees, devisees, executors, administrators, guardians, conservators, successors, purchasers, tenants, encumbrancers, donees, grantees, mortgagees, lienors and assigns. 13.4 SEVERABILITY OF PROVISIONS: The provisions hereof shall be deemed independent and severable, and the invalidity or unenforceability of any one provision shall not affect the validity or enforceability of any other provision hereof. 13.5 GENDER, NUMBER AND CAPTIONS: As used herein, the singular shall include the plural and masculine pronouns shall include feminine pronouns, where appropriate. The title and captions of each paragraph hereof are not a part thereof and shall not afl.cci the construction or interpretation of any part hereof. 12 6 REDISTRIBUTION OF PROJECT DOCUMENTS: Upon the resale of any Lot by any Owner, the Owner shall supply to the buyer of the Lot a ~ py of each of the Pyoject Documents. EXHIBITS: Ail exhibits attached to this Declaration are ~nccrpor.~ted by this reference as though fully set forth herein. 13.8 REQUIRED ACTIONS OF MASTER ASSOCIATION: The Master Association ~ shall at all times take all reasonable actions necessary for the Master Association to comply with the terms of this Declaration or to otherwise carry out the intent of this Declaration. 13.9 SUCCESSOR STATUTES: Any reference in the Project documents to a statu~e shall be deemed a reference to any amended or successor statute. LITTLE & SAPUTO .~ TTORNf')'3 A T LA W i901 OLYMPIC BOULEVARD, ~100 ~;ALN UT CREEF~ CA 9459~5024 06/20/96 O 13.10 CONFLICT: In the event of a conflict, the provisions of this Declaration shall prevail over the Bylaws and the Rules. IN WITNESS WHEREOF, Declaration on the the undersigned has executed this day of , 1996. DECLARANT: SUNCFIASE G.A. CALIFORNIA I, INC., a California corporation By: Name: Title: State of California County of On , 199__, before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public LITTLE & SAPUTO A TTORNE'Y$ A T LA W 1901 OLYMPIC BOUL~IARD, ~100 WALNUT CREEK. CA 94596-50~4 (510) 9-us-SO00 13 .2 06/20/96 OWNERSHIP CONSENTS The undersigned is the owner of fee title to or an interest in a portion of The Subject Property and/or a portion of the Additional Property. The undersigned hereby consents to the execution and recordation of the Declaration, agrees that any portion of the Subject Property owned by the undersigned (and agrees that upon recordation of a Declaration of Annexation in accordance with Section 11.3 of this Declaration, any portion of the Additional Property owned by the undersigned and described in such Declaration of Annexation) shall be bound by the Declaration to the same extent and with the same force and effect as though initially included within the Subject Property. MERCHANT BUILDER: CENTEX REAL ESTATE CORPOP~ATION, a Nevada corporation Dated: , 1996 By: Name: Title: The undersigned is the record fee owner of a portion of the Additional Property. The undersigned hereby consents to the execution and recordation of the Declaration and agrees that upon recordation of a Declaration of Annexation in accordance with Section 11.3! of this Declaration, the Additional Property owned by the undersigned and described in such Declaration of Annexation shall be bound by the Declaration to the same extent and with the same force and effect as though initially included within the Subject Property. Dated: , 1996 COMMONWEALTH LAND TITLE COMPANY, a California corporation Dated: , 1996 By: Name: Title: LITTLE & SAPUTO A TTO[tVEY$ AT LAW 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94596-5024 (510) 9-~t .5000 13.3 06/20/96 State of CalifOrnia County of On , 199__, before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, ~the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public State of California County of On , 199 , before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, ithe person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public LITTLE & SAPUTO A r';'O R~¥A'~ '~ A T LA ~' ~9~ OLYMPIC BOULEVARD, ~0~ WALNUT CREE~ CA 94~ (~10) 9~-5000 13.4 06/20/96 %0 o o A B C D EXHIBITS Description of Additional Property (Section 2.2) Open Space Plat (Section 2.26) Slope and Drainage Maintenance Plan (Section 5.1.2) List of Site Improvement Plans and Landscape Plans (Section 5.10) LITTLE & SAPUTO 1901 OLYMPIC BOUL~ARD. ~I00 WALN~ CREE~ ~ 94~9~50~ (~IO) 9~-~oo 13.5 06/20/96 o EXHIBIT ".4" Terrabay [Legal Description of Additional Property] Ail the real property located in the City of South San Francisco, County of San Mateo, State of California, described as follows: Lots 13 through 20,.inclusive, 31 through 48, inclusive, 59 thro,ugh 70, inclusive, 83 through 198, inclusive, 212 through 217, inclusive, 237, 239 through 330, inclusive, 338 through 370, inclusive, 373 through 377, inclusive, 379 through 383, inclusive, 385 and 386, as shown on the subdivision map of Terrabay, filed for record on July 2, 1990, in Book 121 of Maps at Page 65 et seq., in the Official Records of the County of San Mateo, State of California. L9-960I£0 --1 'r~RRA2 AY (lOIrE I~ M'~I I ~ II OULF~ARO 20o %%\\\\\\\\\\~' ~ 1INn 89-960:L0 SLOPE AND DRAINAGE MAINTENANCE PLAN FOR TERRABAY MASTER ASSOCIATION PREPARED BY GEO/RESOURCE CONSULTANTS, INC. 505 BEACH STREET SAN FRANCISCO, CALIFORNIA 94133 GRC PROJECT NO. 1866-004 JUNE 19, 1996 Page 1 of 26 ~ Geo/Resource Consultants, Inc. ~.. Exlzibit "C" to Tcrrabay ¢> 1.0 2.0 .3.0 4.0 5.0 6.0 7.0 8.0 TABLE OF CONTENTS SLOPE AND DRAINAGE MAINTENANCE PLAN OVERVIEW 1.1 INTRODUCTION t.2 PHYSICAL CONDITIONS 1.3 STATEMENT OF RESPONSIBILITIES 1.4 DEFINITION OF TERMS MANAGEMENT DESIGN AND CONSTRUCTION MONITORING MAINTENANCE 5.1 LiNED DITCHES 5.2 SLOPES 5.3 LANDSCAPE SPRINKLER SYSTEMS 5.4 WATER SERVICES AND SEWER LATERALS 5.5 SUBDRAINS 5.6' " MISCELLANEOUS REPAIRS FUNDING REPORTING TABLE TABLE I SUMMARY OF MONITORING SCHEDULE FIGURES FIGUR.ES IA AND lB FIGUP~S 2 AtND 3 FIGURE 4 TERRA. BAY PHASE I 'vt, ;,_,t'~,~.p~,,-. AREA DITCH DETAILS TEMPORARY DIVERSION DIKE APPENDIX APPENDIX A REFERENCES GD114:1866oTOC.DOC Page 2 of 26 4 6 9 9 10 I0 I1 11 12 13 14 15 8 0 ~ Geo/Resource Consultants. Inc. Exhibit "C" to Tcrrabay June 19,1996 1866-004 Page l 1.0 SLOPE AND DRAINAGE MAINTENANCE PLAN 1.1 INTRODUCTION The purpose of this Plan is to outline the required maintenance measures of slope areas adjacent to the privately owned properties of Terrabay, Phase I. Operation of the elements of this Plan falls within the duties of the Terrabay Master Association (TMA), whose Board of Directors will manage all of its aspects. Figure IA and lB delineates the subdivision elements of Phase I. A number of drainage features exist outside the Terrabay boundaries, notably debris basins, that fall under the jurisdiction of the County. The Terrabay project was designed and graded under full compliance with City of South San Francisco standards, reviewed by the City's reviewers, and inspected by the design team and City engineers. This Plan is being established in order to provide a mechanism for maintenance and repair of facilities from potential future problems related to erosion, landslides, rock_falls, or mudflows within or directly affecting the subdivision. This Plan is a general guide for monitoring and abatement of potential soils and geologic hazards. Because future hazards cannot be fully foreseen, it provides guidelines for their detection and for making decisions regarding repairs. Failure to properly maintain the devices associated with slope maintenance and protection could result in severe property damage. The primary mechanism of slope protection is the effective transport of water through designated conduits. Water that is allowed to escape these conduits has the ability to erode slopes or penetrate slopes and cause some degree of slope instability. The conduits requiring attention include lined ditches, earthen berms and swales, area drains, rock walls, low point overflow protection deviceS, sprinkler systems, water services, subdrains, catch basins, and pavement and valley gutters in parking lots. Although maintenance of landscaping is not covered in this Plan, it is important that landscaping is maintained to protect the slopes from erosion. 1.2 PHYSICAL CONDITIONS The Terrabay Development, Phase I, comprises approximately 144 acres of graded terrain, consisting of roads, lots (house pads) and adjacent slopes in both cut and fill. Surrounding the lots on the north are graded slopes and open space within the Habitat Conservation Plan (HCP). On the south side and adjacent to Hillside Avenue, are cut and fill slopes. Geotechnical conditions of Terrabay Phase I are detailed in the soils and geologic studies and reports (see Appendix A) prepared by PSC Consultants, inc. for the design and construction of the Terrabay development and are incorporated by reference hereby. A separate geotechnical report and addendum were prepared for the Area "D" landslide, by Geo/Resource Consultants, Inc., dated · July 26 and September 5, 1995. GDI 14:1866-R..DOC Page 3 of 26 C~ Geo/Resource Consultants. Inc. ~-. Exhibit "C" to Terrabay June 19,1996 1866-004 Page 2 The areas of active landsliding within the subdivision were repaired as part of project construction. All landslides with an identified potential for impact on planned improvements were mitigated based on recommendations contained in the soil and geologic reports. Those reports provide recommendations for removal of the slides and their replacement by engineered fill, including proper subdrainage. As with all landslide repairs, maintenance of subdrains and surface drainage will improve the long-term performance of the repaired slopes. Should drainage systems not function properly during periods of heavy rain, there is the possibility of renewed slope movement. Surface raveling of cut and fill slopes will continue to be an ongoing process, particularly in the early years of the subdivision, before vegetation is well-established. If sediment blocks drainage devices, localized flooding could result. Blockage of surface drainage ditches on hillsides could redirect runoff onto slopes and cause locally accelerated erosion. [t will be important to (a) monitor slope erosion, (b) keep drainage ditches and inlets free of debris, and (c) revegetate any slopes that pose continuing problems. This Plan consists of five elements: a. Management b. Design and Construction c. Monitoring d. Maintenance e. Repairs 1.3 STATEMENT OF RESPONSIBILITIES The Terrabay Master Homeowners Association's maintenance boundaries are as shown on Figure 1. The Terrabay Master Homeowners Association is responsible for the maintenance of all slopes, landscaping, surface and subsurface drainage facilities, and irrigation systems, excluding property within streets rights-of-way and fenced lots. Responsibilities exclude maintenance of the landscaping and street lighting within the public right-of-ways, landscaping ~vithin-public service easements adjacent to habitat areas, and maintenance of the County maintained debris basins. Also excluded from Homeowners Association's responsibility is the maintenance of storm drain lines which drain public streets but which cross private common areas. These lines will be maintained by the City of South San Francisco; provided, however, the City shall have the right to charge the Terrabay Master Association for clearing any excessive debris which results from the Terrabay Master Association's failure to perform proper maintenance as required by this maintenance plan. GD114:I866-R.DOC Page 4 of 26 GeolResource Consultants. Inc. Exhibit "C" to Tcrrabay June 19, 1996 1866-004 Page 3 1.4 DEFINITION OF TERMS The term "major storm" means a storm during the rainy season in which either of the following will occur: · Rainfall exceeds I/4 inch per hour for 2 hours or more. · Rainfall occurs over four consecutive hours or more. The term "rainy season" means the period from October 15 to April 15 of each year. GD114:1 g66-R.DOC ~ Geo/Resource Consultants. . Page5 of 26 Exhibit "C" to Terrabay Irlc. June 19, 1996 1866-004 Page 4 2.0 MANAGEMENT The TMA Board of Directors will appoint a Manager who will hire technical staff for monitoring and retain contractors as necessary for maintenance and repair functions. The Manager should be knowledgeable of the Plan requirements, and in securing and managing the necessary maintenance and repair contractors. GD114:1866-R.DOC Page 6 of 26 o Exhibit "C" to Terrabay o ~ Geo/Resource Consultants. Inc. June 19, 1996 1866-004 Page 5 3.0 DESIGN AND CONSTRUCTION This project has been designed and constructed so as to minimize the probability of future damages. The approved grading plan and geotechnical reports are incorporated into this Plan by reference. The plans for the construction of the development's facilities were reviewed and approved by the City Engineer and the City's independent geotechnical consultant. The construction of these facilities were done under the inspection of the developer's engineering staff and reviewed by City engineering staff. This Plan is established to maintain the slopes and drainage features that are part of the approved project. GD114:I866-R.DOC Page 7 of 26 ~ Geo/Resource Consultants, Inc. Exhibit "C" to Terrabay O~ O June 19,1996 1866-004 Page 6 4.0 MONITORING The TMA will utilize the services of an outside geotechnical consultant to provide regular monitoring services. The consultant will be a licensed professional in the field of engineering geology or geotechnical engineering, with experience in evaluation of natural and graded slopes, and in methods of erOsion control. Prior to the initiation of the monitoring program, the consultant will set up a repository of pertinent project documents, including files, reports, plans, maps, photographs, test data, and slope or drainage system repair records. This repository will provide a baseline to which future observations, inspections and instrument readings can be compared. Specific historic information to be kept on file includes: Piezometric data · Inclinometer readings · Hydrauger location and flow data · Construction photographs · Stereoscopic photographs · Repair records specific to local features All records shall be maintained, catalogued and updated, so that they are understandable and readily retrievable. The repository will include a master map that serves a key to locate all subsequent monitoring activities. The consultant review pertinent reports, plans, drawings and specifications. A partial list is presented in Appendix A. Other acquired references shall be added to the reference list. Monitoring will consist of visual inspection of all drainage facilities, slopes and other specified areas on a regular basis, as specified below, and following major storms as defined above. Inspections will be documented by summary notes and a sufficient quantity of photographs to provide a basis for comparisons in subsequent inspections. At the discretion of the consultant and as an aid in monitoring slope features, stereoscopically-paired aerial photographs can be acquired from a commercial source or by an aerial flight flown under separate contract. The type of photographs, whether color or color-infrared, scale, and the exact date of the flight would be determined based on the amount of rainfall during the previous winter. The color-infrared photographs are most beneficial following a very wet winter when spring activits, continues into the early summer months. As a general rule, the photographs are flown shortly after the color change of the natural grasses from green to brown exceeds 50%; this varies from year to year as a function of the amount and pattern of rainfall. GD114:I866-R.DOC Page 8 of 26 GeolResource Consultants. Inc. Exh/bit "C" to Terrabay June 19,1996 1866-004 Page 7 Monitoring will include the following: Landslides. Inspection of repaired slopes for any signs of reactivation. Inspection of subdrain outlets for evidence of outflow. All hillslopes should be inspected for any evidence of new instability features, including slumping, incipient cracks, bulges, animal burrows, and seepage. Hillslope Erosion. Inspection of all hillslopes, particularly cut and fill slopes that have been revegetated. They should be inspected for signs of accelerated erosion or incipient gullying. Health of revegetation should be assessed. Landscaped slopes will be monitored for signs of leaking irrigation systems. Drainage Devices. All drainage ditches, inlets, outlets, subdrains and horizontal subdrains (hydraugers) should be inspected systematically. Observations should include amount of flows, condition of the devices themselves, undercutting by erosion, accumulations of sediment, roots, or other debris, and evidence of any overflows. Drainageways. Inspection of repaired and natural drainage ways. This inspection should be documented by photographs. Observations should include signs of accelerated erosion or bank undercutting, debris blockages, and excessive accumulations of tree branches or other organic debris. Inspection of repaired drainage ways should be similar to inspection of landslide repairs. Instrumentation. Devices that were installed in repaired landslide areas include piezometers and inclinometers. These should be monitored on a regular basis by a qualified geologist. Piezometers will be monitored quarterly to establish a pattern of groundwater levels relative to rainfall, for a period of 2 years. At that time, monitoring may be re-assessed to less frequent readings. Inclinometers will be read initially and annually until such time that a pattern of no significant movement is established. Sources of Rockfall. Areas of loose rock exist outside and upslope of Terrabay, which pose a potential threat of rolling onto lots and roads, if dislodged by erosion or earthquake shaking These areas will be inspected annually for signs of impending movement. An assessment will be made of the need for plucking or scaling of rocks, or installation of restraining fences or nets. Sediment Fences and Curbs. All fences, walls, and curbs at the base of slopes, designed to restrain sediment, will be inspected annually. Irrigation System. Irrigation facilities in common space shall be monitored for excessive usage and possible leakage, through a review of maintenance records kept by landscape contractor. GD114:1866-R.DOC Page 9 of 26 ~ Geo/Resource Consultants, Inc. ~ Exhibit "C" to Tcrrabay o June 19,1996 1866-004 Page 8 Ditches Catch Basins Area Drains Valley Gutters Pavement Landscape Irrigation Subdrains Hydraugers Sediment Fences Slopes Rock. fall Sources Piezometers Inclinometers TABLE 1 SUMMARY OF MONITORING SCHEDULE Quarterly Annually X X X X X X X X X X X X X Other Storm Periods Every 5 Years Storm Periods Annually after 2 years GD114:I866-R.DOC Page 10 of 26 Geo/Resource Consultants, Inc. Exhibit "C" to Terrabay June 19,1996 1866-004 Page 9 5.0 MAINTENANCE Regularly scheduled maintenance will focus on keeping drainage devices clear of' debris, maintaining vegetation growth in revegetated areas, and reducing erosion. In addition, over the years, the monitoring program will identify other periodic maintenance needs, such as repair of segments of concrete ditches that are cracked or undermined by erosion. 5.1 LINED DITCHES Concrete lined ditches have been provided at the tops of slopes on graded benches uphill from housing units, at the base of slopes, and below retaining walls. It is important that the design integrity of these ditches is upheld to ensure they don't allow overflows that could erode the slopes. Three types of permanent ditches and two temporary types have been used at Terrabay. These are illustrated in Figures 2 and 3. Maintenance tasks required to keep the ditches operational include the following: Cleaning prior to the onset of winter, and regular inspection and cleaning should be performed through the winter months on an as-needed basis. In particular, ditches should be inspected after every major rain or wind storm since there is a higher probability of debris accumulating during these events. · Pruning of vegetation, including grasses, flowers and shrubbery adjacent to all ditches should be performed annually to minimize leaf and debris drop into the channel. · All cracks greater than 1/16" in width should be filled with a crack sealer once every three years to prevent water seepage and subsequent undermining of ditches and retaining walls. During annual inspection, ditches should be inspected for indications of ponding. Ponding is an indication that the design capacity has been reduced due to either differential settlement or upli~ing by tree roots. The design capacity must be restored. Ponding due to differential .settlement may be a result of many factors, such as undermining, ravelling of slope below the ditch, or others, and there is no typical solution to this problem. A qualified engineer ahot~ld be retained to identi~ a solution. W"nen ponding is due to uplift by roots, the uplifted section should be removed, and roots should be cut back a distance of 3 feet from either side of the ditch. The section of ditch should then be replaced to match the existing ditch section. GD I 14:1866.-R. DOC Pagc 11 of 26 Exhibit "C" to Tcrrabay o ~ Geo/Resource Consultants, Inc. june 19, 1996 1866-004 Page I0 5.2 SLOPES Erosion will occur if water is allowed to flow over the tops of slopes onto slope surfaces. Erosion gullies may develop during periods of heaW water flow over slopes. Berms and drainage facilities have been provided to prevent surface flow across slopes; however, if this should occur the following maintenance will be required: The slopes should be protected from enlargement of fills and small erosion gullies. This may involve construction of temporary diversion ditches; allowing natural rock armoring to occur; hydro seeding or other revegetation; placement of crushed rock in gullies; or placement of jute netting or other fabric on slopes. Restoration may include backfilling the gullies with native soil, replacement of slopes with less erodible soil or placement of board check dams, across slopes. A geotectmical engineer should be consulted to aid in the restoration process if major erosion gullies develop. Minor sloughing of slope material will occur until planted vegetation has properly rooted and stabilized the slope surface. If slumping of the ground surface occurs, appropriate measures should be taken to determine the cause of the slump and the immediacy of the problem. The cause of the slump should be mitigated as soon as possible to avoid further slumping movement. To properly repair the slump, a geotechnical engineer should be consulted to evaluate the' extent and possible repair schemes. 5.3 LANDSCAPE SPRrNKLER SYSTEMS Sprinkler systems have been provided for the purpose of irrigation of the landscaping. If the sprinkler pipes are broken or leak, or over-irrigate, they will deposit water above and below the ground causing erosion and slope failure on the slopes below. Maintenance tasks required to keep the sprinkler systems operating correctly, which should be performed by the landscape contractor, include the following: · Operate and inspect all sprinkler systems on a monthly basis and adjust the systems as necessary to ensure no over-irrigation. inspect the surf.~.ce over each underground sprinkler pipe on ar~ annual basis for surface. depressions and other indications of breaks or fractures and repair as necessary. Allowing water to pond in the depression will worsen the problem. The section of pipe under the depression should be excavated, inspected for cracks, and replaced if structural damage is found. GD114: 1866-.R. DOC Page 12 of 26 ~ Geo/Resource Consultants, Inc. ~-. Exhibit "C" to Tcrrabay o June 19, 1996 1866-004 Page 1l Periodic monitoring of the soil moisture content in the landscaped area should be performed to establish the proper watering cycle. Excessive water buildup on slope may cause slope destabilization and should be avoided. · Shutoff and isolation valves, as shown on the "As-Built" drawings and indicated by field marker posts, should be exercised annually to insure proper operation during emergencies. 5.4 WATER SERVICES AND SEWER LATERALS Each individual unit is provided with a water, storm drain and sewer service lateral. It is imperative that these services don't leak and produce slope erosion. It should be noted that Cai Water is responsible for water main and meters to the residence service lines. The homeowner will be responsible for that service line from the meter to their residence. The respective Homeowners Association will be responsible for any service line from the meter(s) to their irrigation services or other points of use. The required maintenance consists of the following tasks and shall be the responsibility of the respective Homeowner Sub Association. · The Homeowners Sub Association shall incorporate into its landscape maintenance program a schedule to review the water services and sewer laterals for leakage on a bi-annual basis. · Vegetation adjacent to water meters, water shut-off valves and sanitary sewer cleanouts should be pruned annually or as required to allow easy access to facilities. Annual notification shall be sent to homeowners requesting them to monitor water bills and check for excessively high consumption. Above average water consumption may be indicative of a system leak. 5.5 SUBDRAINS Subdrains have been installed as canyon drains beneath fills, in key ways, behind retaining walls and in landslide repair areas. The subdrains are for the purpose of conveying the existing underground water flow to safe discharge areas without allowing the flow to weaken the slopes. Maintenance tasks required to keep the subdrains operational include the following: · Flush all lines, at discretion of the manager as necessary, with a sewer ball. This cleaning should be sufficient to remove sediment build-up and root intrusion. · Field marker posts indicating subdrain cleanout locations, if any, should be maintained, painted, or rePlaced as needed to insure cleanouts do not get buried or lost. GDII4:I866-R.DOC '~' Geo/Resource Consultants. Inc. Page 13 of 26 Exhibit "C" to Tcrrabay June 19,1996 1866-004 Page 12 5.6 MISCELLANEOUS Vegetation: Only plant species contained on the approved project plant list and shown on the approved landscape plans will be allowed. Planting restrictions are required by the Habitat Conservation Plan (HCP), the Fire Buffer Program, and the City. Any new planting must be in accordance with the HCP and Fire Buffer Programs. Where allowed, vegetation should not be planted adjacent to structures if the vegetation will inhibit below structure ventilation or require large amounts of irrigation water which may threaten adjacent slopes. GD114:1866-R.DOC Page 14 of 26 ~ Geo/Resource Consultants, Inc. Exlxibit "C" to Terrabay June 19, 1996 1866-004 Page 13 6.0 REPAIRS Repairs will be provided as necessary, based on the monitoring program. Typical types of repairs include contour grading of open space slopes, replacement of subdrains, stabilization of drainage ways, construction of additional temporary or permanent structures, such as diversion dikes, retaining walls, debris walls and fences, or drainage systems, repair of shallow slides, repair of erosion gullies, replacement of individual drainage devices, or additional revegetation. The Manager will prepare a list of contractors qualified to perform emergency repairs on short notice. GD114:1866-R.DOC Page 15 of 26 Geo/Resource Consultants, Inc. Exhibit "C" to Terrabay June 19,1996 1866-004 Page 14 7.0 FUNDING Funding for operation of this Plan is provided within the TMA budget, as required by the TMA CC and Rs, which stipulate monthly dues. Such funding will cover all necessary expenses of administration, monitoring, maintenance and repair. GD I 14: 1866-R.DOC Page 16 of 26 ~ Geo/Resource Consultants, Inc. Exhibit "C" to Terrabay June 19,1996 1866-004 Page 15 8.0 REPORTING The TMA shall prepare an annual report and provide copies to the City of South San Francisco and any other government agencies as required in code 5.1.3b of the Master Declaration of Covenants, Conditions, and Restrictions of Terrabay. GD114:Ig66-R. DOC Page 17 of 26 ~ Geo/Resource Consultants, Inc. Exhibit "C" to Terrabay FIGURES Page 18 of 26 ~ Geo/Resource Consultants, Inc. Exhibit "C" to Tcrrabay TERRAflAY UNIT 2 071096-87 Geo/Resource Consultants, Inc, GEOLOGISl'S I ENGINEERS I ENYIRONI. IENTAL $CIENTtSTS 505 BEACH STREET, SAN FRANCISCO. CAUFORNIA 94133 Job No. 1866-004 Appr. /~07" Date 6196 TXRRA~A¥ TERRABAY PHASE I MAINTENANCE PLAN BOUNDARIES SOUTH SAN FRANCISCO, CALIFORNIA FIGURE 071096 -88 · ~4 143 IN Job No. Geo/Resource Consultants, Inc. GEOLOGISTS I ENGINEERS I ENVIRONLIENTAL SCIENTISTS 505 flEACH STREET, SAN FRANCISCO. CAUFORNIA 94133 1866-004 Appr. ,,~7' Date TERRABAY PHASE I MAINTENANCE PLAN BOUNDARIES SOUTH SAN FRANCISCO. CALIFORNIA FIGUI:IE lB. /0o TYPE i,,A DITCH TYPE B DITCH I" = 2'-0" Job No. DITCH DETAILS Geo/Resource Consultants, Inc. QE~ / I;N(ta,~a~ / ENVtRON~ENt'N. ~CiENTtSl'~ 1866-oo4 Appr. /~0~' Oate TYPE C DITCH I" -- 2'- O" 6~96 · TERRABAY PHASE I DITCH DETAILS SOUTH SAN FRANCISCO, CALIFORNIA Page 2! of 26 Exhibit "~' to Terrabay RGURE 2 ~0' -2.0' TYPE D DITCH ALL DRAINAGE STRUCTURES S~ALL B~ PROVIDED WITH 4' WEEP HOL~S TO PROVIDE DRAINAGE FOR INCOMING PIPE TRENCH. WEEPHOLES AND PER~OUS BACKFILL PER CALTRANS DETAIL BO-5. LOCATION AS DIRECTED BY ENGINEER. TYPE E DITCH ('FOt~ Z'~'MIPOR~RY DRA/~ OA(L.y DITCH DETAILS Job No. Geo/Resource Consultants, Inc. ~866-oo4 Appr. /'~:)'/' Oate 6/96 TERRABAY PHASE I DITCH DETAILS SOUTH SAN FRANCISCO, CALIFORNIA Page 22 of 26 Exhibit "C" to Terrabay RGURE Temporary Diversion Dike. Job No. Geo/Resource Consultants, Inc. 6/96 - Page 23 of 26 TERRABAY PHASE I TEMPORARY DIVERSION DIKE SOUTH SAN FRANCISCO, CALIFORNIA Exhibit "C" t~ Tcrrabay . FIGURE ~ APPENDIX Page 24 of 26 o'~ o ~ Geo/ c ,C Ita ts, APPENDIX A REFERENCES C.R.E.M., 1989, Record Drawings, Stage-I Grading, Sheets C-I, C-2, C-3, C-3A, C-4, C-5, C-6, C-7, C-7A. Job 173-0110. Geo/Resource Consultants, Inc., 1995a, Area "D" Slope Stability Analysis and Remediation, Phase I, Terrabay Project, City of South San Francisco, California, Project No. 1866-002, dated July 26, 1995. , 1995b, Addendum, Area "D" Slope Stability Analysis and Remediation, Phase I, Terrabay Project, South San Francisco, California, Project No. 1866-002, dated September 5, 1995. PSC Associates, Inc., 1982a, Geotechnical Feasibility Study Phase I, South Slope, San Bruno Mountain, South San Francisco Area, San Mateo County, California, dated April 5, 1982. , 1982b Geotechnical Feasibility Study Phase II South Slope, San Bruno Mountain South San Francisco Area, San Mateo County, California, Project No. A82103, dated May 24, 1982. , 1983a, Debris Flows, Potential Debris Flow Areas, Debris Flow Paths, Potential Debris Flow Paths, and Estimated Volume of Debris Materials in Stream Drainage Basins South Slope San Bruno Mountain, San Mateo County, Califomia, Project No. A82103- 04-I, dated January 31, 1983, Revised February 15, 1983. ,1983b, Geologic Map and Geologic Summary Report, Terrabay Development Area and Vicinity, South Slope San Bruno Mountain, San Mateo County, California, dated February 22, 1983. , 1983c, Geotechnical Engineering Investigation, Terrabay Development, South San Francisco, California, Hillside Boulevard Extension, dated November 15, 1983. , 1983d, Grading Design for Terrabay Village and Terrabay Park (Neighborhoods A and B), Project No. A831033-01 dated November 15, 1983. , 1984, Additional Slope Stability Analysis, Grading Design for Terrabay Village and Terrabay Park (Neighborhoods A and D), Project No. A83103-01, dated March 20, 1984. GD I 14:1866-APP.DOC Page 25 of 26 ~ Geo/Resource Consultants, Inc. Exhibit "C" to Terrabay o APPENDIX A Page 2 · 1985a, Geotechnical Engineering Investigation, Grading Design for Neighborhoods H & J, Terrabay Development, South San Francisco, California, dated April 5, 1985. , 1985b, Grading Plan Review and Additional Slope Stability Analysis, Proposal Neighborhoods C Through G, Terrabay Development, South San Francisco, California, dated April 26, 1985. , 1985c, Geotechnical Engineering Investigation Proposed Tieback Retaining Walls at Landslide "B" and "D", Terrabay Development, South San Francisco, California, Project No. 83103-31, dated July 31, 1985. , 1989a, Geotechnical Engineering Investigation for Tieback Retaining walls at Landslides "B" and "D", Terrabay Development, South San Francisco, California dated May 15, 1989, Project No. 83103-31, Clarification Letter dated June 26, 1989 and July 20, 1989. ,1989b, Geotechnical Report on Grading Work to Repair "Buried Valley"/Landslide "R", Terrabay Development - Phase I, South San Francisco, California, dated December I0, 1989. ,1991 a, Final Report for Testing and Observation Services During Mass Grading of Phase I, Terrabay Development, South San Francisco, California, DRAFT REPORT, Project No. 89140-20, dated August 30, 1991. , 1991b, Supplemental Geotechnical Evaluation of Completed "Goat Farm" Cut Slopes Terrabay Development Phase I, South San Francisco, California, Project No. 89140-20, dated September 3, 1991. , 1995a, Grading Report Showing Summary of Testing and Observation Services During the Mass Grading of Terrabay Village at Terrabay Development, South San Francisco, California, Project No. 95125.10, dated July 24, 1995. , 1995b, Grading Report Showing Summary of Testing and Observation Services During the Mass Grading of Terrabay Park at Terrabay Development, South San Francisco, California, Project No. 95125.10, dated July 27, 1995. GD I 14:1866-APP.DOC, 05/2_3/96 12:05 PM Page 26 of 26 ~ GeolResource Consultants, Inc. Exlfibit "C" to Terrabay [List EXHIBIT "D" Terrabay of Site Improvement and Landscape Plans Section 5.10)] Improvement Plans for Ten'abay Village Unit 1 and Terrabay Park Unit 2 Approv. ed: June 1, 1990 Landscape Architectural Drawings for Terrabay Park Approved: May 7, 1990 Landscape Architectural Drawings for Terrabay Village Approved: May 7, 1990 Site Improvement and Grading Plans for Terrabay Development Stage One Approved: May 2, 1989 Utility Improvement Plans for Terrabay Park and Terrabay Village Approved: March 2, 1990 o O CONSENT AND SUBORDINATION ("Lender"), is the beneficiary under that certain Deed of Trust ("Deed of Trust"), executed by , recorded on 19 Series No. , County Records. Lender hereby consents to the execution and recordation of the Master Declaration of Covenants, Conditions and Restrictions of Terrabay, recorded concurrently herewith as, Series No. , San Mateo County Records ("Declaration") and does hereby subordinate the lien of the Deed of Trust to the Declaration to the same extent, and with the same force and effect-as if the Declaration had been executed and recorded prior to the execution and recordation of the Deed of Trust. Executed this Lender: day of , 19 By: Name: Title: State of California County of On , 199 , before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s) or'the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public o RECORDED AT THE REQUEST OF: WHEN RECORDED RETURN TO: EXHIBIT A TO RESOLUTION NO~ 112-96 DECLARATION OF COVENANTS CONDITIONS AND RESTRICTIONS OF TERRABAY PARK A Common Interest Development INDEX TO DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF TERRABAY PARK A Common Interest Development INTENTION OF DECLARATION ............................................. 1.1 1.1 FACTS ........................................................... 1,1 1.1.1 Property Owned by Declarant ..................................... 1.1 1.1,2 Nature of Project .............. , ................................ 1,1 1.1.3 Phases of P, roject .............. ' ................................ 1,1 1.1.4 Master Declaration ............................................. 1.2 1.2 APPLICABILITY OF RESTRICTIONS .................................. 1.2 II DEFINITIONS ............................................................ 2.1 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 ADDITIONAL CHARGES ........................................... 2.1 ADDITIONAL PROPERTY .......................................... 2.1 ADDITIONAL DECLARANT ......................................... 2.1 ALTERATION .................................................... 2.1 ARTICLES ....................................................... 2.1 ASSOCIATION .................................................... 2.1 BOARD .......................................................... 2.1 BUDGET ......................................................... 2.2 BYLAWS ......................................................... 2.2 CITY ' 2.2 COMMON AREA .................................................. 2.2 COUNTY ........................................................ 2.2 DECLARANT ..................................................... 2.2 DECLARATION ................................................... 2.2 DECLARATION OF ANNEXATION ................................... 2.2 FIRST MORTGAGE ................................................ 2.2 FIRST MORTGAGEE ............................................... 2.2 HABITAT CONSERVATION PLAN .................................... 2.2 IMPROVEMENTS .................................................. 2.3 INVITEE ......................................................... 2.3 LOT ............................................................. 2.3 MAP ............................................................ 2.3 MASTER ASSOCIATION ............................................ 2.3 MASTER ASSOCIATION COMMON AREA ............................. 2.3 MASTER DECLARATION ........................................... 2.3 MEMBER ........................................................ 2.4 MORTGAGE ...................................................... 2.4 MORTGAGEE .................................................... 2.4 NOTICE AND HEARING ............................................ 2.4 OWNER ......................................................... 2.4 PARTY FENCE .................................................... 2.4 PHASE .......................................................... 2.4 PLAN OPERATOR ................................................. 2.4 I.I'I-I'LE & SAPUTO ..i TTORNEY$ A T LA gl 1901 OLYMPIC BOULEVARD. 9100 WA I.N UT CREEK. CA 94596-5024 (slo) 9,M.sooo -i- 06/20/96 0 [-. 0 2.34 2.35 2.36 2.37 2.38 2.39 PROJECT ........................................................ 2.4 PROJECT DOCUMENTS ............................................ 2.4 PUBLIC REPORT .................................................. 2.4 RESIDENCE ...................................................... 2.4 RULES ........................................................... 2.5 SUBJECT PROPERTY .............................................. 2.5 III OWNERSHIP AND EASEMENTS ............................................. 3.1 3.1 NON-SEVERABILITY ............................................... 3.1 3.2 OWNERSHIP OF LOTS ............................................. 3.1 3.3 OWNERSHIP OF COMMON AREA .................................... 3.1 3.4 OWNERSHIP OF PARTY FENCES .................................... 3.1 3.5 EASEMENTS ..................................................... 3.1 3.5.1 3.5.2 3.5.3 3.5.4 3.5.5 3.5.6 3.5.7 3.5.8 3.5.9 3.5.10 3.5.11 3.5.12 3.5.13 3.5.14 3.5.15 3.5.16 Easements On Map ............................................ 3.1 Easements For Common Area .................................... 3.2 Master Declaration ............................................. 3.2 Easements for Master Association .................................. 3.2 Easements Over Master Association Common Area ..................... 3.2 Additional Easements ........................................... 3.2 Party Fences and Retaining Walls .................................. 3.2 Utilities ..................................................... 3.2 Storm Draln.q ................................................. 3.3 Encroachment ................................................. 3.3 Support, Maintenance and Repair .................................. 3.3 Easement to Governmental Entities ................................. 3.3 Association's Easements ........... ....: .......................... 3.3 Additional Easements ............................................ 3.4 Easement For Adjoining Property .................................. 3.4 Annexation of Additional Property .................................. 3.4 IV USES AND RESTRICTIONS ................................................. 4.1 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 ALTERATIONS .................................................... 4.1 ANIMALS ........................................................ 4.1 ANTENNAS ...................................................... 4.1 EXTERIOR LIGHTING ............................................. 4.1 INVITEES ........................................................ 4.1 MASTER DECLARATION ........................................... 4.1 MINERAL EXPLORATION .......................................... 4.1 PARKING ........................................................ 4.2 RENTAL OF LOTS ................................................. 4.2 RULES .......................................................... 4.2 SIGNS ............................................................ 4.2 4.11.1 Declarant .................................................... 4.3 4.11.2 Legal Proceedings .............................................. 4.3 4.11.3 Project Identification ............................................ 4.3 4.11.4 Sale or Rent .................................................. 4.3 4.11.5 Signs Approved By Board ........................................ 4.3 STORAGE OF WASTE MATERIALS ................................... 4.3 USE AND OCCUPANCY OF RESIDENCES ............................. 4.3 USE OF COMMON AREA ........................................... 4.3 V MAINTENANCE, REPAIR AND' RECONSTRUCTION OF IMPROVEMENTS .......... 5.1 5.1 MAINTENANCE OF COMMON AREA ................................. 5.1 I.I'I'I'LE & SAPUTO ..I TTORNEY$ ,4 T ~ P/ 1901 OI.YMPIC BOULEVARD. I~100 WALNUT CREEK, CA 94596-50~1 (510) 944-5000 -ii- 06/20/96 5.2 5.3 5.4 5.5 5.6. 5.7 5.8 5.9 5.10 5.1.1 Generally .................................................... 5.1 5.1.2 Slope and Drainage Maintenance ................................... 5.1 5.1.3 As-Built Plans ................................................. 5.1 ALTERATIONS TO COMMON AREA .................................. 5.1 5.2.1 Approval ........ ':: .......................................... 5.1 5.2.2 Funding ..................................................... 5.2 MAINTENANCE OF LOTS AND RESIDENCES .......................... 5.2 5.3.1 Generally .................................................... 5.2 5.3.2 Slope and Drainage Maintenance ................................... 5.2 ALTERATIONS TO LOTS AND RESIDENCES ........................... 5.2 MAINTENANCE AND REPAIR OF FENCES AND WALLS ................. 5.3 5.5.1 Party Fences .................................................. 5.3 5.5.2 Fences Separating Common Area or Streets and Lots ................... 5.3 5.5.3 Retaining Walls ............................................... 5.3 LANDSCAPING ................................................... 5.3 5.6.1 Association ................................................... 5.3 5.6.2 Owners ...................................................... 5.4 RIGHT OF MAINTENANCE AND ENTRY BY ASSOCIATION .............. 5.4 DAMAGE AND DESTRUCTION ...................................... 5.4 5.8.1 Bids ........................................................ 5.4 5.8.2 Sufficient Proceeds ............................................. '5.4 5.8.3 Additional Special Assessment ..................................... 5.5 DAMAGE OR DESTRUCTION TO RESIDENCES AND/OR LOTS ........... 5.5 CONDEMNATION OF COMMON AREA ............................... 5.5 VI FUNDS AND ASSESSMENTS ................................................ 6.1 6.1 COVENANTS TO PAY ............................................... 6.1 6.1.1 Liability for Payment ............................................ 6.1 6.1.2 Funds Held in Trust ............................................ 6.1 6.1.3 Offsets ...................................................... 6.1 6.2 REGULAR ASSESSMENTS .......................................... 6.1 6.2.1 Payment of Regular Assessments ................................... 6.1 6.2.2 Allocation of Regular Assessments ................................. 6.2 6.2.3 Exemptions from Regular Assessment ............................... 6.2 6.2.4 Non-Waiver of Assessments ...................................... 6.2 6.3 SPECIAL ASSESSMENTS ............................................ 6.3 6.4 REIMBURSEMENT ASSESSMENTS ................................... 6.3 6.5 INCREASE LIMITATIONS ........................................... 6.3 6.5,1 Limitation on Regular Assessment Increases in Excess of 20% ............. 6.3 6.5.2 5% Special Assessment Limitation .................................. 6.3 6.5.3 Budget Distribution Limitation .................................... 6.4 6.5.4 Emergency Exception ............................................ 6.4 6.6 ACCOUNTS ...................................................... 6.4 6.6.1 Types of Accounts ..................... · ......................... 6.4 6.6.2 Reserve Account ............................................... 6.4 6.6.3 Current Operation Account ........................................ 6.5 6.7 BUDGET, FINANCIAL STATEMENTS, REPORTS AND STUDIES ........... 6.6 6.7.1 6.7.2 6.7.3 6.7,4 6.7.5 6.7.6 Preparation of Operating Budget ................................... 6.6 Distribution of Budget ........................................... 6.7 Annual Report ................................................ 6.7 Quarterly Reconciliation ......................................... 6.7 Reserve Account Study .......................................... 6.8 Notice of Increased Assessments ................................... 6.8 I.I'I-I'LE & SAPUTO ..I TTORNEY$ A T ~ ~V 1901 OI.YMPIC BOULEVARD, ~ 100 W^I.M:T CREEK, CA 94596-$024 (5 ! 0) 944-5000 -iii- 06/20/96 0 0 0 6.8 6.9 6.10 6.11 6.7.7 Statement of Outstanding Charges .................................. 6.9 6.7.8 Initial Six Month Statement ....................................... 6.9 6.7.9 Schedule of Monetary Penalties .................................... 6.9 ENFORCEMENT OF ASSESSMENTS .................................. 6.9 6.8.1 Procedures ....................... ~ ........................... 6.9 6.8,2 Additional Charges ............................................ 6.10 6.8.3 Certificate of Satisfaction of Lien .................................. 6.10 6.8.4 Waiver of Homestead Protections ................................. 6.11 SUBORDINATION OF LIEN ........................................ 6.11 SAN BRUNO MOUNTAIN AREA HABITAT CONSERVATION PLAN ....... 6.11 MASTER ASSOCIATION ASSESSMENTS .............................. 6.12 6.11.1 Joint Collection of Regular Assessments ............................ 6.12 6.11.2 Priority of Master Association Documents ........................... 6.13 VII MEMBERSHIP IN AND DUTIES OF THE ASSOCIATION ......................... 7.1 7.1 THE ORGANIZATION .............................................. 7.1 7.2 MEMBERSHIP .................................................... 7.1 7.2.1 Appurtenant to Ownership ....................................... 7.1 7.2.2 Anaexation ................................................... 7.1 7.3 VOTING ......................................................... 7.1 7.4 RULES .......................................................... 7.1 7.5 DEDICATION AND EASEMENTS ..................................... 7.1 7.6 INSURANCE ...................................................... 7.1 7.6.1 General Provisions and Limitations ................................. 7.2 7.6.2 Types of Coverage ............................................. 7.3 7.6.3 Annual Review ................................................. 7.4 7.6.4 Notice to Members ............................................. 7.4 7.7 COMPLETION OF COMMON AREA IMPROVEMENTS ................... 7.5 7.7.1 Inspection of Common Area Improvements ........................... 7.5 7.7.2 Enforcement of Completion Bonds ................................. 7.7 VIII DEVELOPMENT RIGHTS ................................................... 8.1 8.1 8.2 8.3 8.4 8.5 8.6 8.7 LIMITATIONS OF RESTRICTIONS .................................... 8.1 RIGHTS OF ACCESS AND COMPLETION OF CONSTRUCTION ............ 8.1 SIZE AND APPEARANCE OF PROJECT ............................... 8.1 ALTERATIONS TO MAP ............................................ 8.1 MARKETING RIGHTS ..., .......................................... 8.2 TITLE RIGHTS ..................... : .............................. 8.2 AMENDMENT .................................................... 8.2 IX RIGHTS 9.1 9.2 9.3 9.4 9.5 OF MORTGAGEES ................................................. 9.1 CONFLICT ....................................................... 9.1 LIABILITY FOR UNPAID ASSESSMENTS .............................. 9.1 INSPECTION OF BOOKS AND RECORDS .............................. 9.1 FINANCIAL STATEMENTS FOR MORTGAGEES ........................ 9.1 MORTGAGE PROTECTION ......................................... 9.1 X AMENDMENT AND ENFORCEMENT ........................................ 10.1 10.1 AMENDMENTS .................................................. 10.1 10. IA Approval By City ............................................. 10.1 10.1..2 Approvals Required by Habitat Conservation Plan ..................... 10.1 10.1.3 Recordation of Amendment ..................................... 10.1 10.2 ENFORCEMENT ................................................. 10.1 I.I'I-I'LE & SAPUTO .4 I"£ORNEY$ A T L~I Ilt 1901 Ot, YMPIC BOULEVARD, ~,100 W^I.XUT CREEK, CA 94596..502A (510) 9,~-5000 -iv- 06/20/96 0 0 10.3 10.4 10.5 10.2.1 Rights to Enforce ............................................. 10.1 10.2.2 Violation of Law .............................................. 10.2 10.2.3 Remedies Cumulative .......................................... 10.2 10.2.4 Nonwaiver .................................................. 10.2 10.2.5 Enforcement by City, County and HCP Trust ......................... 10.2 NOTICES TO MEMBERS OF LEGAL PROCEEDINGS .................... 10.2 CONDITIONS TO CERTAIN LEGAL PROCEEDINGS .................... 10.3 10.4.1 Association's Notice ........................................... 10.3 10.4.2 Notice Toils Limitations on Actions ................................ 10.3 10.4.3 Meetings ................................................... 10.4 10.4.4 Inspections and Testing ......................................... 10.4 10.4.5 Settlement Offer .............................................. 10.5 10.4.6 Time Periods and Notices ....................................... 10.5 10.4.7 Rejection of Settlement Offer .................................... 10.6 10.4.8 As.sociation Relieved of Obligations ................................ 10.6 10.4.9 Failure to Comply ............................................. 10.7 OPTIONAL LEGAL PROCEEDINGS .................................. 10.8 ARCHITECTURAL CONTROL .............................................. 11.1 11.1 11.2 11.3 11.4 11.5 11.6 11,7 11.8 11.9 11.10 11.11 11.12 11.13 11.14 11.15 APPLICABILITY ........................ . .......................... 11.1 RESERVATION TO DECLARANT ................................... 11.1 MEMBERS ...................................................... 11.1 DUTIE.S ......................................................... 11.2 APPLICATION FOR APPROVAL OF IMPROVEMENTS .................. 11.2 BASIS FOR APPROVAL OF IMPROVEMENTS ......................... 11.2 FORM OF APPROVALS AND DENIALS ............................... 11.2 PROCEEDING WITH WORK ........................................ 11.2 FAiLURE TO COMPLETE WORK .................................... 11.3 DETERMINATION OF COMPLIANCE ................................ 113 11.10.1 Notice of Completion .................................... 11.3 11.10.2 Inspection ............................................ 11.3 FAiLURE TO REMEDY THE NON-COMPLIANCE ...................... 113 WAIVER ........................................................ 11.4 APPEAL OF DECISION OF COMMITTEE ............................. 11.4 LIABILITY ...................................................... 11.4 ESTOPPEL CERTIFICATE .......................................... 11.4 XII ANNEXATION ........................................................... 12.1 12.1 12.2 12.3 12-.4 12.5 12.6 RESTRICTION ON ANNEXATION ................................... 12.1 PROPERTY WHICH MAY BE ANNEXED; APPROVAL OF MEMBERS ...... 12.1 PROCEDURE FOR ANNEXATION ................................... 12.1 EFFECT OF ANNEXATION .......................................... 12.2 DEANNEXATION AND AMENDMENT ............................... 12.2 AMENDMENT ................................................... 12.2 XIII MISCELLANEOUS PROVISIONS ............................................ 13.1 13.1 13.2 13.3 13.4 13.5 13.6 13.7 TERM OF DECLARATION ......................................... 13.1 CONSTRUCTION OF PROVISIONS ................................... 13.1 BINDING ....................................................... 13.1 SEVERABILITY OF PROVISIONS .................................... 13.1 GENDER, NUMBER AND CAPTIONS ................................ 13.1 REDISTRIBUTION OF PROJECT DOCUMENTS ........................ 13.1 EXHIBITS ....................................................... 13.1 -v- 06/20/96 I.I'I'rLE & SAPUTO · 'I'ITOR.~,'~t'$ AT ]-,4W 1901 OI.YMPIC BOULEVARD, ~1oo WALNUT CREEK, CA 94,~96-.~024 (51o) 9~a.~000 c) 0 O 13.8 13.9 13.10 REQUIRED ACTIONS OF ASSOCIATION ............................. 13.1 SUCCESSOR STATUTES ........................................... 13.1 CONFLICT ...................................................... 13.2 I,I'I'I'LE & SAPUTO .-I T'FORN&'YS A'F 1901 OI.YMPIC BOULEVARD. ~100 WA I.N UT CREEK, CA 94596.5024 (510) 944-5000 -vi- 06/20/96 0 0 0 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF TERRABAY PARK A Common Interest Development THIS DECLARATION OF COVENANTS, CONDITIONSAND RESTRICTIONS OF TERRABAY pARK ("Declaration") is made by CENTEX REAL ESTATE CORPORATION, a Nevada corporation ("Declarant"). ARTICLE I INTENTION OF DECLARATION 1.1 FACTS: following faCts: This Declaration is made with reference to the 1.1.1 Property Owned by Declarant: Declarant is the owner of all the real property and Improvements thereon located in the City of South San Francisco, County of San Mateo, State of California, described as follows: Lots 201 through 211, inclusive, 218 through 236, inclusive, 328, and 331 through 337, inclusive, as shown on the subdivision map of Terrabay, filed for record on July 2, 1990, in Book 121 of Maps at Page 65 et seq., in-the Official Records of the County of San Mateo, State of California. 1.1.2 Nature of Project: Declarant and Additional Declarant intend to develop the Subject Property.and the Additional Property as a Common Interest Development which shall be a planned development as defined in California Civil Code Section 1351(k) . The Project is intended to be created in conformity with the provisions of the Davis-Stirling Common Interest Development Act (California Civil Code, Section 1350 et seq.). To establish the Project, Declarant and Additional Declarant desire to impose on the Subject Property, and any property annexed thereto, these mutually beneficial restrictions, easements, assessments and liens under a comprehensive general plan of improvement and development for the benefit of all of the Owners, the Lots and Common Area within the Subject Property and any property annexed thereto. 1.1.3 Phases of Project: The Subject Property and the Additional Property are intended to be developed in two (2) or more Phases. The first Phase consists of the Subject Property. Prior to annexation, the Additional Property shall not be subject to any provision of this Declaration. Declarant may, but shall have no obligation to, annex all or any portion of the Additional LIT'rLE & SAPUTO A TTORNL~'$AT I...A 1901 OLYMPIC BOULf~VARD, ,is lO0 WALNUT CREEK. CA. 94596-5024. (St0) 9,~-~000 1.1 06/20/96 Property to the Project by recording a Declaration of Annexation in compliance with ~he provisions of this Declaration. 1.1.4 Master Declaration: The Project is subject to an instrument entitled "Master Declaration of Covenants, Conditions and Restrictions of Terrabay, recorded in the Official Records of the San Mateo County Recorder on **, 1996, in Book **, at Page **, as amended in accordance with the procedures set forth in said Master Declaration. Each Owner of a Lot is a member of Terrabay Master Association, an owners association created by said Master Declaration. 1.2 APPLICABILITY OF RESTRICTIONS: Pursuant to California Civil Code Sections 1353 and 1354, Declarant and Additional Declarant hereby declare that the Project and all Improvements thereon are ~subject to the provisions of this Declaration. The Project shall be held, conveyed, hypothecated, encumbered, leased, rented, used, occupied and improved subject to the covenants, conditions and restrictions stated in this Declaration. All such covenants, conditions and restrictions .are declared to be in furtherance of the plan for the subdivision, development and management of'the Project as a Common Interest Development. All of the limitations, easements, uses, obligations, covenants, conditions, and restrictions stated in this Declaration shall run with the Project and shall inure to the benefit of and be bindin9 on all Owners and all other parties havin9 or acquirin~ any right, title or interest in any part of the Project. After recordation of a Declaration of Annexation, the property described therein shall constitute a part of the Project and shall be subject to this Declaration and the Master Declaration. I.I'I-I'LE & SAPUTO ..i TTOR.VffY$ A T LA W P;OI O[.YMPIC BOULEVARD, ~100 WAI.NCT CREEK, CA 9459~$0~4 1.2 06/20/96 O O ARTICLE II DEFINITIONS Unless otherwise defined or unless the context clearly requires a different meaning, the terms used in this Declaration, the Map and any grant deed to a Lot shall have the meanings specified in this Article. 2.1 ADDITIONAL CHARGES: The term "Additional Charges'! shall mean costs, fees, charges and expenditures, including without limitation, attorneys' fees, late charges, interest and recording and filing fees actually incurred by the Association in collecting and/or enforcing payment of assessments, fines and/or penalties. 2.2 ADDITIONAL PROPERTY: The term "Additional Property" shall mean the real property described on Exhibit "A" and all Improvements situated on such real property. 2.3 ADDITIONAL DECLARANT: The term "Additional Declarant" shall mean SUNCHASE G.A. CALIFORNIA .I, INC., a California corporation, so long as it owns some portion of the Additional Property. The term "Additional Declarant" shall also mean successors in interest of Additional Declarant, if (i) such successor(s) in interest acquires all or any portion of Declarant's interest in the Additional Property for the purposes of development, sale and/or rental and (ii) a certificate, signed by Additional Declarant, has been recorded in the County in which the successor(s) in interest assumes the rights and duties of Additional Declarant to the portion of the Additional Property so acquired. There may be more than one Additional Declarant. 2.4 ALTERATION: The term "Alteration" shall mean constructing, performing, installing, remodeling, repairing, replacing, demolishing, and/or changing the color or shade, of any Improvement. The term "Alteration" does not include repainting or refinishing any Improvement in the same color, hue, intensity, tone, and shade or repairing any Improvement with the same materials. 2.5 ARTICLES: The term "Articles" shall mean the Articles of Incorporation of Terrabay Single Family Subassociation, which are or shalllbe filed in the. Office of the Secretary of State of the State of California. 2.6 ASSOCIATION: The term "Association" shall mean Terrabay Single Family Subassociation, its successors and assigns, a nonprofit mutual benefit corporation incorporated under the laws of the State of California. The Association is a Subassociation as that term is defined in the Master Declaration. 2.7 BOARD: The term "Board" shall mean the Board of Directors of ithe Association. I.I'I'['LE & SAPUTO ..! TT O RN EY, S A T L,,I V~ I'~01 C,I.YMPIC BOULEVARD, iq00 %.',,'A I.N [;'I' CREEK, CA 94596-5024 (510) 944-5000 2.1 06/20/96 2.8 BUDGET: The term "Budget" shall mean. a pro forma operating budget prepared by the Board in accordance with Section 6.7.1 of this Declaration. 2.9 BYLAWS: The term "Bylaws" shall mean the Bylaws of the Association and any amendments thereto. 2.10 CITY: The term "City" shall mean the City of South San Francisco, California. 2.11 COMMON AREA: The term "Common Area" shall mean lots 328, and 331 through 337, inclusive, as shown on the Map. The term "Common Area" shall also mean any property described as Common Area in a Declaration of Annexation. Common Area includes all Improvements situated thereon or therein. - 2.12 COUNTY: The term "County" shall mean the County of San Mateo, State of California. 2.13 DECLARANT: The term "Declarant" shall mean CENTEX REAL ESTATE CORPORATION, a Nevada corporation, so long as it owns some portion of the Subject Property or the Additional Property. The term "Declarant" shall also mean successors in interest of Declarant, if (i) such successor(s) in interest acquires all or any portion of Declarant's interest in the Subject Property and/or the Additional Property for the purposes of development, sale and/or rental and (ii) a certificate, signed by Declarant, has been recorded in the County in which the successor(s) in interest assumes the rights and duties of Declarant to the portion of the Subject Property and/or the Additional Property so acquired. The term Declarant shall also include Additional Declarant if Additional Declarant annexes any portion of the Additional Property to the Project. 2.14 DECLARATION: The term "Declaration" shall mean this Declaration of Covenants, Conditions and Restrictions of Terrabay Park and includes any subsequently recorded amendments. 2.15 DECLARATION OF ANNEXATION: The term "Declaration of Annexation" Shall mean any instrument recorded in the County which extends the provisions of this Declaration to all or a portion of the Additional Property or any other property. 2.16 FIiRST MORTGAGE: The term "First Mortgage" shall mean a Mortgage which has priority under the recording statutes of the State of California over all other Mortgages encumbering a specific Lot. 2.17 FIiRST MORTGAGEE: The term "First Mortgagee" shall mean. the Mortgagee of a First Mortgage. 2.18 H~BITAT CONSERVATION PLAN: The term "Habitat Conservation Plan" or "HCP" shall mean the San Bruno Mountain Area I.I'I-I'LE & SAPUTO ..I TTO RNEY$ A T LA W' 190i ¢)[.YMPIC BOULEVARD, ~I00 Wa I.N I;T CREEK, CA 94596-5024 (510) 944-5000 2.2 06/20/96 0 (D Habitat ConServation Plan as adopted by the County Board of Supervisors on September 14, 1982, by Resolution No. 43770, or as it may be hereafter amended. 2.19 IMPROVEMENTS: The term "Improvements" shall mean everything constructed, installed or planted on property subject to this Declaration, including without limitation, buildings, streets, fences, walls, paving, pipes, wires, grading, landscaping and other' works of improvement as defined in Section 3106 of the California Civil Code, excluding only those Improvements or portions thereof which are dedicated to the public or a public or quasi-public entity or utility company, and accepted for maintenance by the public, suchlentity or utility company. 2.20 INVITEE: The term "Invitee" shall mean any person whose presence within the Project is approved by or is at the request of the Master Association, the Association or a particular Owner, including, but not limited to, lessees, tenants, and the family, guests, employees, licensees or invitees of Owners, tenants or lessees. 2.21 L__~: The term "Lot" refers to a Separate Interest as defined in California Civil Code Section 1351(1) and shall mean Lots 201 through 211, inclusive, and 218 through 236, inclusive, as shown on the Map. The term "Lot" shall also mean any Lot described as such in a Declaration of Annexation. Lot includes all Improvements isituated thereon or therein. 2.22 M~P: The term "Map" shall mean the subdivision map of filed for record on July 2, 1990, in Book 121 of Maps at Page 65 et seq., in the Official Records of the County, including any subsequently recorded amended final maps, parcel maps, certificates of correction, lot line adjustments and/or records of survey. The term "Map" shall also mean any recorded subdivision map described in a DeclaraCion of Annexation. 2.23 MASTER ASSOCIATION: The term "Master Association" shall mean TERRABAY MASTER ASSOCIATION, a nonprofit mutual benefit corporation iincorporated under the laws of the State of California and governed iby the Master Declaration. 2.24 MASTER ASSOCIATION COMMON AREA: The term "Master Association !Common Area" shall mean the real property and Improvements thereon which are defined as "Common Area" in the Master Declaration. 2.25 MASTER DECLARATION: The term "Master Declaration" shall mean that inStrument entitled "Master Declaration of Covenants, Conditions and Restrictions of Terrabay", recorded in the Official Records of t~e San Mateo County Recorder on **, 1996, in Book **, at Page **, aS amended in accordance with the procedures set forth in said Maste!r Declaration. I.I'Iq'LE & S^PUTO ..,TTOR.%'EYS AT LAW tv01 OI.YMPIC BOULEVARD. ~100 WALNt;'r CREEK. CA 94596-5024. (510) 9.~.s.5000 2.3 06/20/96 2.26 M~MBER: The term "Member" shall mean an Owner. 2.27 MQRTGAGE: The term "Mortgage" shall mean any duly recorded mortgage or deed of trust encumbering a Lot. 2.28 MQRTGAGEE: The term "Mortgagee" shall mean a Mortgagee under a Mortgage as well as a beneficiary under a deed of trust. 2.29 NQTICE AND HEARING: The term "Notice and Hearing".shall mean the procedure which gives an Owner notice of an allege d violation of the Project Documents and the opportunity for a hearing before the Board. 2.30 OWNER: The term "Owner" shall mean the holder of record fee title tola Lot, including Declarant as to each Lot owned by Declarant. If more than one person owns a single Lot, the term "Owner" shalli mean all owners of that Lot. The term "Owner" shall also mean a contract purchaser (vendee) under an installment land contract but shall exclude the contract vendor and any person having an intierest in a Lot merely as security for performance of an obligation. 2'31 p~RTy FENCE: The term "Party Fence" shall mean any portion of ai fence or retaining wall which is constructed and placed approximately on the common boundary of two (2) or more Lots. 2.32 PHASE: The term "Phase" shall mean any Lots and/or Common Area which are simultaneously made subject to the provisions of this Declaration either by recording this Declaration or by recording a Declaration of Annexation. 2.33 P~AN OPERATOR: The term "Plan Operator" shall refer to the County i~ its capacity as the Plan Operator referenced in the Habitat Conservation Plan. 2.34 PROJECT: The term "Project" shall mean the Subject Property andany property described in ~ Declaration of Annexation. 2.35 PROJECT DOCUMENTS: The term "Project Documents" shall mean the Articles, Bylaws, this Declaration and the Rules. 2.36 P~BLIC REPORT: The term "Public Report" shall mean a Final Subdivision Public Report issued by the Department of Real Estate of the State of California for one or more Phases of the Project. 2.37 R~SIDENCE: The term "Residence" shall mean a dwelling situated on a Lot, including any attached garage also situated on a Lot. I.I'I'I'LE 8: SAPUTO ..~ '£'fORNEY$ A 7' L,4 W P;OI OI.YMPIC BOULEVARD, ~100 WALN[.~T CRI:I:K~ C~ 94~'~6-$024 (510) 2.4 06/20/96 2.38 RU~ES: The term "Rules" shall mean the rules adopted by the Board, including architectural guidelines, restrictions and procedures. 2.39 SUBJECT PROPERTY: The term !'Subject Property" shall mean Lots 2011 through 211, inclusive, 218 through 236, inclusive, 328, and 331 ithrough 337 inclusive as shown on the Map and all Improvements thereon. I.I'I"I'LE & SAPUTO .-I 'I'TOR.%'E'Y$ A T LA P/ 1901 O[,YNtPIC BOULEVARD, ~,100 \%% [.N [:T CREEl(. CA 94596-,5024 ($10) 944-S000 2.5 06/20/96 o o O ARTICLE III OWNERSHIP AND EASEMENTS 3.1 NON-SEVERABILITY: In addition to the non-severability provisions set forth in the Master Declaration, the provisions of this Section 3.1 shall also apply. The interest of each Owner in the use and benefit of the Common Area shall be appurtenant to the Lot owned by the Owner. No Lot shall be conveyed by an Owner separately from the interest in the Common Area. Any conveyance of any Lot shall automatically transfer the right to use the Common Area without the necessity of express reference in the instrument of conveyance. Each Owner, whether by deed, gift, devise or operation of law, for the Owner's benefit and for the benefit of all other Owners and each successor of each Owner, specifically waives and abandons all rights, interests and causes of action for judicial partition of any interest in the Common Area and does further agree that no action for judicial partition shall be instituted, prosecuted or reduced to judgment. The ownership interests in the Common Area and Lots described in this Article are subject to the easements described, granted and reserved in this Declaration. Each of the easements described, granted or reserved herein shall be established upon the recordation of this Declaration and shall be enforceable as equitable servitudes and covenants running with the land for the use and benefit of the Owners and their Lots superior to all other encumbrances applied against or in favor of any portion of the Project. 3.2 OWNERSHIP OF LOTS: Title to each Lot in the Project shall be conveyed in fee to an Owner. 3.3 OWNERSHIP OF COMMON AREA: Title to or a legal ownership interest in the Common Area in each Phase shall be conveyed to the Association ~rior to or concurrently with the conveyance of the first Lot in that particular Phase to an Owner. The Association shall be deemed to have accepted title to the Common Area conveyed to it when (i) a grant deed conveying title to the Common Area has been recorded in the Official Records of the County and (ii) assessments for the Phase in which the Common Area is located have commenced. No Common Area may be developed or sold without the prior approval of the City of South San Francisco. 3.4 OWNERSHIP OF PARTY FENCES: Each Owner of a Lot upon which a Party Fence is situated shall own to the center of the Party Fence. 3.5 EASEMENTS: The easements and rights specified in this Article are hereby created and shall exist whether or not they are also set forth in individual grant deeds to Lots. 3.5.1 Easements On MaD: The Common Area and Lots are subject to the easements and rights of way shown on ~he Map. I.I'Iq'LE & SAPUTO .-I TTORaVEY$ A T LA W 1901 OI.¥MPIC BOULEVARD, ~100 WAI.NU'F CREEK. CA 94~9~0~ (510) 944-~000 3.1 06/20/96 o fr- o 3.5.2 Easements For Common Area: Every Owner shall have a non-exclusive right and easement for the ingress, egress, use and enjoyment of the Common Area which shall be appurtenant to and shall pass with the title to every Lot, subject to the right of the Association to dedicate and/or grant easements over all or any portion of the Common Area. 3.5.3 Master Declaration: The Common Area and each Lot are subject to the easements and rights established by the Master Declaration. 3.5.4 Easements for Master Association: There is reserved and granted to the Master Association over and across the Common Area, as servient tenement, a non-exclusive easement appurtenant to the Master Association Common Area for those purposes necessary for the Master Association to carry out its duties pursuant to the Master Declaration. 3.5.5 Easements Over Master Association Common Area: There is reserved and granted to each Lot, as dominant tenement, over and across the Master Association Common Area, as servient tenement, a non-exclusive appurtenant easement for ingress, egress, use and enjoyment of the Master Association Common Area. Every Owner shall have a non-exclusive right and easement of use and enjoyment in and to the Master Association Common Area which shall be appurtenant to and shall pass with the title to every Lot, subject to the right of the Master Association to dedicate and/or grant easements over all or any portion of the Master Association Common Area. 3.5.6 Additional Easements: Notwithstanding anything expressed or implied to the contrary~ this Declaration shall be subject to all easements (i) granted by Declarant for the installation and maintenance of utilities and drainage facilities necessary for the development of the Project, (ii) granted or reserved in the deeds to the Owners, (iii) granted or reserved in the deeds to the Association and/or Master Association, or (iv) set forth in the Master Declaration. 3.5.7 Party Fences and Retaininc Walls: Each Owner of a Lot containing a Party Fence shall have a reciprocal non- exclusive easement over and across such portions of the contiguous Lot as-are necessary Co maintain the Party Fence. Each Owner of a Lot containing a retaining wall which is not a Party Fence but which crosses onto a contiguous Lot shall have a reciprocal non- exclusive easement over and across such portions of the contiguous Lot as are necessary to maintain the retaining wall. 3.5.8 Utilities: Each Owner shall have a non- exclusive right and easement over, under, across and through the Project, except for portions of the Project on which a structure is situated, for utility lines; pipes, wires and conduits installed by Declarant. 3.2 06/20/96 O O 3.5.9 Storm Drains: There are reserved and granted for the benefit of each Lot and the Common Area, over, under, across and through the Project, except for portions of the Project on which a structure is situated, non-exclusive easements for surface and subsurface storm drains and the flow of storm waters in accordance with natural drainage patterns and the drainage patterns and Improvements installed or constructed by Declarant or Additional Declarant. 3.5.10 Encroachment: Non-exclusive rights and easements are reserved and granted (i) for the benefit of each Lot, as dominant tenement, over, under and across each other Lot and the Common Area, as servient tenements, and (ii) for the benefit of the Common Area, as dominant tenement, over, under and across each Lot, as servient tenement. Such easements shall be for the purposes of encroachment, support, occupancy and use of such portions of Lots and/or Common Area as shall be encroached upon, used and occupied by the dominant tenement as a result of any original construction design, accretion, erosion, deterioration, decay, errors in original construction, movement, settlement, shifting or subsidence of any building or structure or any portion thereof. If any portion of the Project is partially or totally destroyed, the encroachment easement shall exist for any replacement structure which is rebuilt pursuant to the original construction design. The easement for maintenance of the encroaching Improvement shall exist for as long as the encroachment exists; provided, however, that no easement for encroachment shall be created due to the willful misconduct of the Association or any Owner. Any easement for encroachment may but need not be cured by repair or restoration of the Improvement. 3.5.11 Support, Maintenance and' Repair: The Association and each Owner shall have a non-exclusive right and easement appurtenant to the Common Area and to all Lots through each Lot and the Common Area for the support, maintenance and repair of the Common Area and all Lots. 3.5.12 Easement to Governmental Entities: Ail governmental and quasi-governmental entities, agencies, departments, bureaus and utilities and their agents shall have a non-exclusive easement over the Common Area for the purposes of performing their duties within the Project. Signs providing notice of such easement shall be prominently displayed in the Common Area and such easements shall not be obstructed. 3.5.13 Association's Easements: The Association and its duly authorized agents and representatives shall have a non- exclusive right and easement as is necessary to perform the duties and obligations of the Association set forth in the Project Documents, including the right to enter upon Lots, subject to the limitations contained in this Declaration. I.I'I'I'I.E & SAPUTO ..I 'I'TORNEY$.4 T LA ~/ 190I OI.YMPIC BOULEVARD. ~100 WAI.N [:T CREEK. CA 94596-5024 (510) 944-5000 3.3 06/20/96 0 0 3.5.14 Additional Easements: Notwithstanding anything expressed or implied to the contrary, this Declaration shall be subject to all easements granted by Declarant or Additional Declarant for the installation and maintenance of utilities and drainage facilities necessary for the development of the Project. 3.5.15 Easement For Adioinin~ Property: Declarant and Additional Declarant shall have, and hereby expressly reserves, a right and easement over and across the Common Area for the purposes of reasonable ingress to and egress from, over and across the Project, including private roads and pathways, to the Additional Property until all of the Additional Property is annexed to the .Project. 3.5.16 Annexation of Additional Property: Upon the recordation of a Declaration of Annexation, the Lots and the Owners of Lots in the annexed Phase shall have all of the rights and easements specified in this Article and the Lots and the Owners of Lots in the Project prior to annexation shall have all of the easements specified in this Article as t~ough the annexed Phase were initially part of the Project. 3.4 06/20/96 O O ARTICLE IV USES AND RESTRICTIONS 4.1 ALTER3~TIONS: Except as otherwise specifically provided in this Declaration, no Alteration may be made to any Improvement until plans have been submitted and approved pursuant to Article XI. 4.2 ANIMALS: An Owner may keep two (2) customarily uncaged household pets within the Owner's Lot. Each Owner may also maintain a reasonable number of small caged animals, birds or fish. No other animals or pets are permitted in the Project. The Board shall have the right to prohibit the maintenance of any pet which, after Notice and Hearing, is found to be a nuisance to other Owners. No animals m~y be kept for commercial purposes. No dog shall be allowed in the Common Area unless it is under the control of a responsible person by leash or other means. Each Owner or Invitee shall restore the Common Area to the condition it was in immediately preceding its use by any dog permitted on the Common Area by the Owner or Invitee. 4.3 ANTENNAS: No outside television antenna, microwave or satellite dish, aerial, or other such 'device (collectively "Video Antennas") with a diameter or diagonal measurement in excess of thirty-six (36) inches shall be erected, constructed or placed on any Common Area or any Lot. Video antennas with a diameter or diagonal measurement of thirty-six (36) inches or less may be installed only if approved in accordance with the provisions of Article XI. Reasonable restrictions which do not significantly increase the cost of the Video Antenna system or significantly decrease its efficiency or performance may be imposed. 4.4 EXTERIOR LIGHTING: No Owner shall remove, damage or disable any exterior light, regardless of where located, which is connected to the Association's electric service. 4.5 INVITEES: Each Owner shall be responsible for compliance with the provisions of ~he Project Documents by that Owner's Invitees. An Owner shall promptly pay any Reimbursement Assessment levied and/or any fine or penalty imposed against an Owner for violations committed by that Owner's Invitees. 4'.6 MASTER DECLARATION: The Association shall have the right, but not the duty, to enforce the provisions of the Master Declaration and of the rules adopted by the Master Association. Each Owner shall comply with all applicable provisions of the Master Declaration, including, but not by way of limitation, the Use Restrictions set forth in Article IV of the Master Declaration. 4.7 MINERAL EXPLORATION: No Lot shall be used to explore for or to remove any oil, hydrocarbons or minerals of any kind without the approval of the Board and only if permitted by local ordinances. I.I'[-I'LE & SAPUTO .i TTORNa~'$ A T LA W 190: OI.YMPIC BOULI~VARD, ~100 %%'Al.N u'r CREEY~ CA 94~9~$024 (510) 944-$000 4.1 06/20/96 4.8 PARKING: Vehicles shall not be parked anywhere in the Project except in areas designed and established for the parking of passenger motor vehicles ("Parking Areas") or wholly within garages, driveways or upon streets. All Parking Areas shall be used solely for the parking of motor vehicles used for personal transportation. No resident in the Project may park in a driveway (guests only). No boat, trailer, camper, commercial vehicle, mobile home, recreational vehicle or any inoperable vehicle shall be parked or stored anywhere in the Project unless otherwise provided by the Architectural Standards. No abandoned or dismantled vehicles are permitted in the Project at anytime and the Association shall appoint a representative who shall be authorized to remove any such vehicle which remains in the Project in excess of ten (10) calendar days. Unless otherwise provided for in the Rules, garage doors shall remain closed, except when a vehicle is entering or leaving the garage. Garages shall be kept sufficiently clear so as to permit parking of the number of vehicles for which the garage was designed. With the exception of garages, no part of the Common Area shall be used for repair, construction or reconstruction of any vehicle. No resident in the Project shall park in any Parking Area designated as "guest parking". As long as applicable ordinances and laws are observed, including the requirements of Section 22658.2 of the California Vehicle Code, any vehicle which is in violation of this Declaration or Section 4.3 of the Master Declaration may be removed. 4.9 RENTAL OF LOTS: An Owner shall be entitled to rent or lease a Lot, if: (i) there is a written rental or lease agreement specifying that the tenant shall be subject to all provisions of the Project Documents and a failure to comply with any provision of the Project Documents shall constitute a default under the agreement; (ii) the period of the rental or lease is not less than thirty (30) days; (iii) the Owner gives notice of the tenancy to the Board and has otherwise complied with the terms of the Project Documents; and (iv) the Owner gives each tenant a copy of the Project Documents. Upon satisfaction of the foregoing conditions all rights to the use and enjoyment of the Common Area shall be exercised by the tenant rather than by the Owner of the leased or rented Lot; however, the Owner shall not be relieved of the obligations and duties imposed by this Declaration. 4.10 RULES: The Board may promulgate rules concerning the use of the Project by Owners and their Invitees. The Board shall have the right to limit the number of an Owner's guests that may use any recreational facilities. Neither an Owner nor its Invitees shall violate any provision of this Declaration, the Bylaws or the Rules as the same may be amended from time to time. 4.11 SIGNS: Ail signs displayed in the Project shall be attractive and compatible with the design of the Project and shall comply with all applicable local ordinances. The only signs of any kind which may be displayed to the public view on or from any Lot or the Common Area shall be as follows: I.ITTLE & SAPUTO .4 'I'TOR. NEY$ .4 T LA W; 1~,0! OI.YMPIC BOULEVARD, #100 WALNUT CREEK, CA 94596.5024 (510) 94a-5000 4.2 06/20/96 4.11.1 Declarant: Signs may be displayed by Declarant on Common Area or unsold Lots, as Declarant deems appropriate, advertising Lots owned by Declarant for sale or rent; 4.11.2 Leqal Proceedinqs: proceedings may be displayed; · Signs required by legal 4.11.3 Project Identification: Appropriate signs may be displayed by the Association to identify the Project; 4.11.4 Sale or Rent: One (1) sign of reasonable dimensions may be placed on a Lot advertising the' Lot for sale or rent; and 4.11.5 Sicns ADDroved By Board: Other signs, posters and notices approved by the Board or specified in the Rules or in this Declaration may be posted in locations designated by the Board. 4.12 STORAGE OF WASTE MATERIALS: . Ail garbage, trash and accumulated waste material shall be placed in appropriate covered trash containers, which may be placed on Common Area or where visible only on the night before and the day that pick-up is to occur. 4.13 USE AND OCCUPANCY OF RESIDENCES: Except for the business of Declarant and Additional Declarant in completing the development and disposition of the Lots in the Project, no commercial enterprise of any kind shall be established, maintained, operated, permitted or constructed in any portion of the Project unless it satisfies all of the following requirements: (1) it is permitted by local ordinances, (2) it is clearly incidental and secondary to the use of the Residence as a residential dwelling, (3) it is conducted entirely within the Residence and carried on by the residents thereof only, (4) it does not involve the sale or offering for sale of any article (garage sales are permitted at such times and in such circumstances as are approved by the Board), and (5) it is otherwise in compliance w~.th any further rules, restrictions and limitations set forth in the Rules. No Residence shall be permanently occupied by any more than two (2) persons per bedroom. No Owner may permit or cause anything to be done or kept upon or in a Lot which might obstruct or interfere with the rights of other Owners or which would be noxious, harmful or unreasonably offensive to other Owners. Each Owner shall comply with all of the requirements of all federal, state and local governmental authorities, and all laws, ordinances, rules and regulations applicable to the Owner's Lot. 4.14 USE OF COMMON AREA: Ail use of Common Area is subject to the Rules. There shall be no use of the Common Area except by Owners and their Invitees. All persons residing within the Project may enjoy the use of all facilities in the Common Area as long as they abide by the terms of the Project Documents. There shall, be I.I'I'I'LE & SAPUTO .4 TT'ORNEY$ A T l~(;i OI.YMPIC BOULEVARD, iq00 WA I.N ['T CREEK, CA 94596-$024 (510) 4.3 06/20/96 ~0 o [-. o no obstruction of any part of the Common Area. No permanent structure or use shall be permitted to encroach onto the Common Area private roads. Nothing shall be stored or kept in the Common Area without the prior consent of the Board. Nothing shall be done or kept in the Common Area which will increase the rate of insurance on the Common Area without the prior consent of the Board. No Owner shall permit anything to be physically done or kept in the Common Area or any other part of the Project which might result in the cancellation of insurance on any part of the Common Area, which would interfere with rights of other Owners, or which would be a nuisance, noxious, harmful or unreasonably offensive to other Owners. No waste shall be committed in the Common Area. I.I'I'FLE & SAPUTO ..I T'I'ORN_-~'¥$ A T I.~ W' 1'~51 OI.YMPIC BOULEVARD. ~100 %-%'AI.N[2T CREEl(, CA 94596-5024 (510) 944-$000 4.4 06/20/96 0~ o o ARTICLE V MAINTENANCE, REPAIR AND RECONSTRUCTION OF IMPROVEMENTS Attached hereto as Exhibit "B" is a Maintenance Responsibility Table which is intended to assist. Owners in determining responsibilities for maintenance of specific Improvements listed in that table. The table is a summary included for convenience only and shall not supersede the language of this Article V or other provisions of this Declaration or of the Master Declaration. 5.1 MAINTENANCE OF COMMON AREA: 5.1.1 Generally: The Association shall be responsible for the maintenance, repair, replacement, management, operation,, paihting and 6pkeep of Common Area and all Improvements situated in, upon or under the Common Area. The Association shall keep the Common Area and Improvements thereon in good condition and repair, provide for all necessary services and cause all acts to be done which may be necessary or proper to assure the maintenance of the Common Area in first class condition.. 5.1.2 Slope and Drainaqe Maintenance: The Association shall at all times, with respect to the Common Area, comply with the terms of that certain Common Area and Lot Maintenance Plan for Terrabay Subassociation ("Maintenance Plan") attached hereto as Exhibit ~D". The Maintenance Plan includes specifications, schedules and illustrative exhibits for the maintenance and repair of slope areas, drainage facilities, benches, gutters and subdrains. The Maintenance Plan provides for specific maintenance measures and inspections to be performed by the Association on the Common Area in the Project for the protection of slope areas. Failuret0 pr0pe~y maint~in£he de~ce$~$$oci~ted with slope protection could resultin severe propertydama~. 5.1.3 As-Built Plans: The Association shall maintain a copy of the as-built plans for the Improvements under its jurisdiction. These plans shall be available for review by Owners and prospective Owners and shall be referenced for performance of the Association's duties. 5.2 ALTERATIONS TO COMMON AREA: 5.2.1 ADproval: Alterations to any Improvements situated in, upon or under the Common Area may be made only by the Association. A proposal for an Alteration to an Improvement may be made at any meeting. A proposal may be adopted by the Board, subject to the limitations contained in the Bylaws. Additionally, all structures constructed by Declarant or Additional Declarant were constructed in compliance with the Terrabay Specific Plan. The Association may not erect any additional structure or make exterior modifications (and the City of South San Francisco may withhold building permits, variance permits or certificates of I.I'[-I'LE & SAPUTO ..I f TORNEY$ A T LA Vl~ 1901 OI.YMPIC BOULEVARD. ~100 WAI.N UT CREEK, CA 94596-$024 (sro) 9aa-5ooo 5.1 06/20/96 r~ ,l~ l o o occupancy for any additional structure or exterior modification) until a Precise Plan or Final Subdivision Map has been approved authorizing such additional structure or exterior modification in accordance with the Terrabay Specific Plan. 5.2.2 Fundinq: Expenditures for maintenance, repair or replacement of an existing capital Improvement for which reserves have been collected may be made from the Reserve Account. Subject to the limitations set forth in Section 6.5.2, the.Board may levy a Special Assessment to fund any Alteration of an Improvement for which no reserve has been collected. 5.3 MAINTENANCE OF LOTS AND RESIDENCES: 5.3.1 Generally: Except as otherwise specifically provided in this Declaration, each Owner shall maintain and care for the Owner's Lot, including the Residence, and other Improvements located thereon, in a manner consistent with the standards established by the Project Documents and other well maintained residential areas in the vicinity of the Project. Special architectural design standards may be established in the Rules. 5.3.2 Slope and Drainaqe Maintenance: Each Owner shall at all times comply with the applicable portions of the Maintenance Plan described in 5.1.2, above, with respect to any slopes or storm drainage Improvements situated within the enclosed portions of their Lot. The Maintenance Plan includes specifications, schedules and illustrative exhibits for the maintenance and repair of slope areas, drainage facilities, benches, gutters and subdrains. The Maintenance Plan provides for specific maintenance measures and inspections to be performed by the Owner for the protecCion of slope areas. Failuret0 proper~ maintain the devices associated ~thslope protection could resultinsevere propertydamage. 5.4 ALTERATIONS TO LOTS AND RESIDENCES: Alterations may be made to the interior of an Owner's Residence, if the Alterations do not impair the structural integrity of the R~sidence and if the Owner complies with all laws and ordinances regarding alterations and remodeling. Any proposals for Alterations on Lots or to the exteriors of Residences shall be made in accordance with the provisions of Article XI. Additionally, all Residences constructed by Declarant or Additional Declarant were constructed in compliance with the Terrabay Specific Plan. No Owner may erect any additional structure or make exterior modifications (and the City of South San Francisco may withhold building permits, variance permits or certificates of occupancy for any additional structure or exterior modification) until a Precise Plan or Final Subdivision Map has been approved authorizing such additional structure or exterior modification in accordance with the Terrabay Specific Plan. No Owner shall alter the slope or contour of any Lot or construct or alter any drainage pattern or facility without the approval of the I.I'I'I'LE & SAPUTO A TTORb;EY$ ,,4 7' LA tit 190: CH.YMPIC BOULEVARD, II. 00 XV.-~L5 UT CREEK., ~ 9459&5024 (510) 944-5000 5.2 06/20/96 o 0 0 City Engineer. In addition, no Owner shall redirect surface water runoff onto adjacent property without that adjacent property owner's written authorization. 5.5 MAINTENANCE AND REPAIR OF FENCES AND WALLS: 5.5.1 Party Fences: The Owners of a Party Fence shall be responsible for maintaining, repairing and replacing it. The costs of such maintenance, repair and/or replacement shall be shared equally by the Owners; provided, however, that all costs of any maintenance, repair or replacement necessitated by the negligent or willful action of an Owner shall be borne by that Owner. In the absence of negligent or willful conduct, any necessary maintenance, repair or replacement performed by an Owner shall entitle that Owner to a right of contribution from the other Owners of the Party Fence. The right of contribution shall be appurtenant to the Lot and shall pass to the successor(s) in interest of the Owner entitled to contribution. 5.5.2 Fences SeDaratin~ Common Area or Streets and Lots: Each fence constructed approximately along a Lot boundary shall maintained, repaired and replaced by the Owner of the Lot except for the surface facing Common Area which shall be maintained by the Association. Maintenance shall include refinishing the exterior surface of the fence if that surface was previously finished with paint or stain. For purpose of this section, the term "fence" includes walls, except retaining walls (which shall be maintained in accordance with 5.5.3, below). 5.5.3 Retaining Walls: Any retaining wall which is situated entirely on a Lot shall be maintained at the sole cost and expense of the Owner of that Lot. Any retaining wall which is a Party Fence shall be maintained in accordance with Section 5.5.1, above. Any retaining wall which is not a Party Fence and which is situated only partially on a Lot or partially on Common Area shall be maintained as follows: each Owner shall maintain any portion of that retaining wall which is on that Owner's Lot at the sole cost and expense of that Owner and the Association shall maintain any portion of that retaining wall which is on Common Area; provided, however, the Owners or the Association, as the case may be, shall cooperate as may be necessary to properly maintain the structural integrity of the portions of the retaining walls which cross common boundaries. In the event of a dispute concerning the need for or the extent of necessary cooperation, the determination of the Board shall be determinative. 5.6 LANDSCAPING: Ail landscaping in the Project shall be maintained and cared for in a manner consistent with Section 5.6 of the Master Declaration and the Rules adopted by the Association. 5.6.1 Association: The Association shall be responsible for all landscaping located on Common Area and all landscaping situated on each Lot (except for those portions of the I.I'I'I'LE & SAPUTO ..1 TTORfq~-Y$ ,4 T I..,4 Vt' 1901 OI.YMPIC BOULLa'VARD, #100 W^I.NI.:T CREEK.. CA 94596-~024 (310) 944-5000 5.3 06/20/96 Lot which are required to be maintained by the Owner in accordance with Section 5.6.2, below), extending to the street curb(s) adjacent to the Owner's Lot. 5.6.2 Owners: Each Owner shall be responsible for all landscaping within (a) the enclosed portions of the Owner's Lot or (b) within a rear yard area which is fenced along its sides, but is open to a rear slope area (in which case the Owner's maintenance responsibilities shall extend within the partially fenced rear yard to the rear Lot boundary). 5.7 RIGHT OF MAINTENANCE AND ENTRY BY ASSOCIATION: If an Owner fails to perform maintenance and/or repair which that Owner is obligated to perform pursuant to this Declaration, and if the Association determines, after Notice and Hearing given pursuant to the provisions of the Bylaws, that such maintenance and/or repair is necessary to preserve the attractiveness, quality, nature and/or value of the Project, the Association may cause such maintenance and/or repair to be performed. The costs of such maintenance and/or repair shall be charged to the .Owner of the Lot as a Reimbursement Assessment. In order to effectuate the provisions of this Declaration, the Association may enter any Lot whenever entry is necessary in connection with the performance of any maintenance or construction which the Association is authorized to undertake. Entry within a Lot shall be made with as little inconvenience to an Owner as p. rac~icable and only after reasonable advance written notice of not less than forty-eight (48) hours, except in emergency situations. 5.8 DAMAGE AND DESTRUCTION: The term "restore" shall mean repairing, rebuilding or reconstructing a damaged Common Area Improvement to substantially the same condition and appearance in which it existed prior to fire or other casualty damage. If fire or other casualty damage extends to any Common Area which is so insured, the Association shall proceed with the filing and adjustment of all claims arising under the existing insurance policies. The insurance proceeds shall be paid to and held by the Association. 5.8.1 Bids: Whenever restoration is to be performed pursuant to this Section, the Board shall obtain such bids from responsible licensed contractors to restore the damaged Common Area as the-Board deems reasonable; and the Board, on behalf of the Association, shall contract with the contractor whose bid the Board deems to be the most reasonable. 5.8.2 Sufficient Proceeds: The costs of restoration of the damaged Common Area shall be funded pursuant to the provisions and in the priority established by this Section 5.8.2. A lower priority procedure shall be utilized only if the aggregate amount of funds then available pursuant to the procedures of higher priority are insufficient to restore the damaged Common Area. The following funds and procedures shall be utilized: I.I'I'I'LE & SAPUTO 7TORNEY$ A T ~ W' OI.YMPIC BOULEVARD. ~'100 CREEK, CA 94596-5024 (510) ~4-5000 5.4 06/20/96 0 ,-~ 0 1. The first priority shall be any insurance proceeds paid to the Association under existing insurance policies. 2. The second priority shall be all Reserve Account funds designated for the repair or replacement of the capital Improvement(s) which has been damaged. 3. The third priority shall be funds raised by a Special Assessment against all Owners levied by the Board up to the maximum amount permitted without the approval of the Members in accordance with the limitations set forth in Section 6.5.2. 4. The fourth priority shall be any funds raised by a Special Assessment against Owners levied by the Board pursuant to a vote of the Members pursuant ~o Section 5.8.3. 5.8.3 Additional Special Assessment: If the total funds available to restore the damaged Common Area pursuant to the first three priorities described in Section 5.8.2 is insufficient to restore the damaged Common Area, then .a special meeting of the Members shall be called for the purpose of voting whether to impose an additional Special Assessment and deciding upon the amount thereof. The Board shall then contract for the restoration of the damaged Common Area as described above, making use of whatever funds are then available to it. 5.9 DAMAGE OR DESTRUCTION TO RESIDENCES AND/OR LOTS: If all or any portion of a Lot or Residence is damaged by fire or other casualty, the Owner shall either (i) restore the damaged Improvements or (ii) remove all damaged Improvements, including foundations, and leave the Lot in a clean and safe condition. Any restoration under (i) preceding must be performed so that the Improvements are in substantially the same condition in which they existed prior to the damage, unless the provisions of Article XI are complied with by the Owner. Unless extended by the Board, the Owner must commence such work within one hundred twenty (120) days after the damage occurs and must complete the work within one (1) year thereafter. 5.10 CONDEMNATION OF COMMON AREA: If all or any portion of the Common Area is taken for any public or quasi-public use under any statute, by right of eminent domain or by purchase in lieu of eminent domain, the entire award shall be deposited into the Current Operation Account until distributed. The Association shall distribute such funds proportionately to all Owners as their interests appear according to the respective fair market values of their Lots at the time of condemnation, as determined by an independent appraisal made by an independent real estate appraiser with a Member of the Appraisal Institute Certificate or the equivalent, as selected by the Board. The Association shall represent the interests of all Owners. 5.5 06/20/96 O o ARTICLE VI FUNDS AND ASSESSMENTS 6.1 COVENANTS TO PAY: Declarant and each Owner covenant and agree to pay to the Association the assessments and any Additional Charges levied pursuant to this Article VI. 6.1.1 Liability for Payment: The obligation to pay assessments shall run with the land so that each successive record Owner of a Lot shall in turn become liable to pay all such assessments. No Owner may waive or otherwise escape personal liability for assessments or release the Owner's Lot from the liens and charges hereof by non-use of the Common Area, abandonment of the Lot or any other attempt to renounce rights in the Common Area or the facilities or services within the Project. -Each assessment shall constitute a separate assessment and shall also be a separate, distinct and personal obligation of the Owner of the Lot at the time when the assessment was levied and shall bind the Owner's heirs, devisees, personal representatives and assigns. Any assessment not paid when due is delinquent. The personal obligation of an Owner for delinquent assessments shall not pass to a successive Owner unless the personal obligation is expressly assumed by the successive Owner. No such assumption of personal liability by a successor Owner (including a contract purchaser under an installment land contract) shall relieve any Owner from personal liability for delinquent assessments. After an Owner transfers fee title of record to a Lot, the Owner shall not be liable for any charge thereafter levied against that Lot. 6.1.2 Funds Meld in Trust: The assessments collected by the Association shall be held by the Association for and on behalf of each Owner and shall be used solely for the operation, care and maintenance of the Project as provided in this Declaration. 6.1.3 Offsets: No offsets against any assessment shall be permitted for any reason, including, without limitation, any claim that the Association is not properly discharging its duties. 6.2 REGULAR ASSESSMENTS: 6.2.1 Pa.yment of ReGular Assessments: Regular Assessments for each fiscal year shall be established when the Board approves the Budget for that fiscal year. Regular Assessments shall be levied on a fiscal year basis; however, each Owner shall be entitled to pay the Regular Assessment in twelve (12) equal monthly installments, one installment payable on the first day of each calendar month during 'che fiscal year, as long as the Owner is not delinquent in the payment of any monthly installment. If an Owner fails to pay any monthly installment by the sixtieth (60th) day after the date the installment was due, that Owner's right to continue to pay the Regular Assessment in I.I'VFLE & SAPUTO ..i FTO RN~'$ .4 T L-4 IV 1~0~ OI-YMPIC BOULEVARD, #100 WA [.N t 'r CREEK, CA 94596-5024 (510) 9..14.5000 6.1 06/20/96 monthly installments shall immediately terminate for that fiscal year unless otherwise determined by the Board. Regular Assessments shall commence for all Lots in each Phase on the first day of the first month following the month in which the first Lot in that Phase is conveyed to an Owner and may commence prior to that date at the option of Declarant. 6.2.2 Allocation of ReGular Assessments: The total amount of the Association's .anticipated revenue attributable to Regular Assessments as reflected in the Budget for that fiscal year shall be allocated equally among the Lots. After annexation of each Phase, the allocation and assessment of the charges in the Budget shall be reallocated equally among all Lots in the Project, including those in the annexed Additional Property. For the first fiscal year, the Budget shall be substantially based upon the operating budget accepted by the Department of Real Estate of the State of California. After a new Phase has been annexed, the Board shall approve a Budget, which is substantially based upon the operating Budget accepted by the Department of Real Estate of the State of California in connection with the Public Report for that Phase, for the remainder of the current fiscal year for use upon the commencement of Regular Assessments against Lots in the new Phase. 6.2.3 Exemptions from ReGular Assessment: Notwithstanding the provisions of Section 6.2, the Board shall exempt each Owner of a Lot which satisfies paragraph (a), below, and may exempt all Owners if paragraph (b), below, is satisfied, from the payment of a portion of the Regular Assessment levied against that Lot as described in those paragraphs. (a) Residences: An Owner of a Lot is exempt from payment of that portion of the Regular Assessment which is allocated for defraying operating expenses and reserves directly attributable to the existence and use of the Owner's Residence and any landscaping situated on the Owner's Lot until the first to occur of the following events: (i) a notice of completion of construction of the Residence has been recorded; (ii) the Residence is occupied or otherwise used; or (iii) the structural components of the Residence which the Association is obligated to maintain are complete. (b) Other common Area: Each Owner may be exempted from payment of that portion of the Regular Assessment which is allocated for defraying operating expenses and reserves directly attributable to the existence and use of a common facility (including landscaping) that is not complete at ths time Regular A~sessmen5s commence until the first to occur of the following events: (i) a notice of completion of the common facility is recorded or (ii) the common ~aciiiny has been placed into use. 6.2.4 Non-Waiver of Assessments: If before the expiration of any fiscal year the Association fails to fix Regular I.I'I-I'LE & SAPUTO ..! I'T O RN EY$ A T I..4 W/ I¥01 OI.YMPIC BOULEVARD, ,100 WAI.NCT CREEK. CA 94596-5024 (510) 944-$000 6.2 06/20/96 o O Assessments for the next fiscal year, the Regular Assessment established for the preceding year shall continue until a new Regular Assessment is fixed. 6.3 SPECIAL ASSESSMENTS: Subject to the limitations set forth in Section 6.5.2, Special Assessments may be levied in addition to Regular Assessments for (i) constructing capital Improvements, (ii) correcting an inadequacy in the Current Operation Account, (iii) defraying, in whole or in part, the cost of any construction, reconstruction, unexpected repair or replacement of Improvements in the Common Area, or (iv) paying for such other matters as the Board may deem appropriate for the Project. Special Assessments shall be levied in the same manner as Regular Assessments. 6.4 REIMBURSEMENT ASSESSMENTS: The Association shall lev!; a Reimbursement Assessment against an Owner to reimburse the Association for the costs of repairing damage caused by that Owner or that Owner's Invitee or if a failure to comply with the Project Documents has (i) necessitated an expenditure of monies, including attorneys' fees, by the Association to bring the Owner or the Owner's Lot or Improvements into compliance or (ii) resulted in the imposition of a fine or penalty. A Reimbursement Assessment shall be due and payable to the Association when levied. A Reimbursement Assessment shall not be levied by the Association until Notice and Hearing has been given in accordance with the Bylaws. Notwithstanding any other provision in the Project Documents expressed or implied to the contrary, Reimbursement Assessments are assessments but they may not be enforced by any lien rights .provided in this Declaration. 6.5 INCREASE LIMITATIONS: This Section 6.5 is intended to implement the limitations on increases in Regular and Special Assessments established by Section 1366 of the California Civil Code. To the extent that the limitations set forth in Section 1366 are amended or replaced, the limitations set forth in this paragraph shall be automatically amended and replaced by the new statutory limitations. Further, if the limitations set forth in Section 1366 are repealed, the provisions of this Section 6.5 shall no longer have any force or effect. 6.5.1 Limitation on Regular Assessment Increases in Excess of 20%: Without the approval of the Members obtained pursuant to Section 3.3.2 of the Bylaws, the Board shall be prohibited from levying a Regular Assessment which is more than twenty percent (20%) greater than the Regular Assessment per Lot for the immediately preceding fiscal year. .~.6.5.2 5% Special Assessment Limitation: Without the approval of the Members obtained pursuant to Section 3.3.2 of the Bylaws, the Board shall be prohibited from levying Special Assessments within a single fiscal year which in the aggregate LI'I'FLE & SAPUTO ..I '£TO ~¥EY,.,,e A T l..A P~ Iv0l OLYMPIC BOULEVARD, 2100 ~VA[.NUT CREEK. CA 94596~5024 (5|0) 944-5000 6.3 06/20/96 O O exceed five percent (5%) of the budgeted gross expenses for that fiscal year. 6.5.3 Budqet Distribution Limitation: Without the approval of the Members obtained pursuant to Section 3.3.2 of the Bylaws, the Board shall be prohibited from levying a Regular Assessment which is greater than the Regular Assessment per Lot for the immediately preceding fiscal year unless the Board has distributed a Budget in compliance with Section 1365(a) of the California Civil Code. The pro forma operating Budget requirements currently established by Section 1365(a) are set forth in Section 6.7.1, below. 6.5.4 Emerqencv Exception: The limitations set forth in Sections 6.5.1 and 6:5.2, above, shall not apply to any Special Assessment or any increase in Regular Assessments necessary for: (i) extraordinary expenses required by an order of a court; (ii) extraordinary expenses necessary to repair or maintain the Project or any part of it for which the Association is responsible where a threat to personal safety on the Project is discovered; (iii) extraordinary expenses necessary to repair or maintain the Project or any part of it for which the Association is responsible that could not have been reasonably foreseen by the Board when it prepared and distributed the Budget or Budget summary to the Members; or (iv) extraordinary expenses incurred in making the first payment of the earthquake insurance surcharge pursuant to Section 5003 of the California Insurance Code. Prior to the imposition or collection of an assessment pursuant to this Section, the Board shall pass a resolution containing written findings as to the necessity of the extraordinary expenses involved and why the expense was not or could not have been reasonably foreseen in the budgeting process. The resolution shall be distributed to the Members with the notice of the increased assessment. 6.6 ACCOUNTS: 6.6.1 Tv~es of Accounts: Assessments collected by the Association shall be deposited into at least two (2) separate accounts with a responsible financial institution, which accounts shall be clearly designated as (i) the Current Operation Account and (ii) the Reserve Account. The Board shall deposit those portions of the assessments collected for current maintenance and operation into the Current Operation Account and shall deposit those portions of the assessments collected as reserves for replacement and deferred maintenance of major components which the Association is obligated to repair into the Reserve Account. 6.6.2 Reserve Account: Withdrawal of funds from the Reserve Account shall require the signatures of either two (2) Directors or one (1) Director and one (1) officer of the Association who is not a Director. 6.4 06/20/96 (a) The Association shall pay out of the Reserve Account only those costs that are attributable to the maintenance, repair or replacement of capital Improvements for which reserves have been collected and held and such other amounts which are expressly authorized by law. The Board shall not expend funds collected for the Reserve Account for any purpose other than the repair, restoration, replacement, or maintenance of, or litigation involving the repair, restoration or maintenance of, major components which the Association is obligated to repair, restore, replace, or maintain and for which the Reserve Account was established. (b) Notwithstanding paragraph (a), above, and so long as authorized by Civil Code Section 1365.5, the Board may authorize the temporary transfer of money from the Reserve Account to the Current Operation Account to meet short-term cash-flow requirements or other expenses as long as the Board has made a written finding, recorded in the minutes, explaining the reasons why the transfer is needed and describing when and how the money will be repaid to the Reserve Account. The transferred funds shall be restored to the Reserve Account within one (1) year of the date of the initial transfer, unless the Board makes a finding supported by documentation that a temporary delay would be in the best interests of the Project. If the Board makes such a finding, the Board may delay the restoration until the time which the Board reasonably determines is necessary. The Board shall exercise prudent fiscal management in delaying restoration of these funds and in restoring the expended funds to the Reserve Account; and if necessary, the Board shall levy a Special Assessment to recover the full amount of the expended funds within the time limits required by this Section. Any Special Assessment levied pursuant to the preceding sentence is subject to the limitations imposed by Section 6.5.2. At its discretion, the Board may extend the date the payment on the Special Assessment is due. Any extension shall not prevent the Board from pursuing any legal remedy to enforce the collection of an unpaid Special Assessment. (c) When a decision is made to use reserve funds or to temporarily transfer money from the Reserve Account to pay for litigation, the Association shall notify the Members of that decision in the next mailing to the Member of a written notice or report, as defined in Section 5016 of the Corporations Code. The Association shall prepare a monthly accounting of expenses related to the litigation and the mailing shall state that. The accounting shall be available for inspection by Members at the Association's office. 6.6.3 Current Operation Account: Ail other costs properly payable by the Association shall be paid from the Current Operation Account. I.I'I-I'LE & SAPUTO .4 FTORNE'Y'$ A T L.A P/ 1';01 ()I.YMPIC BOULEVARD. #100 \VAI.N t:'r CREEK, CA 94596-5024 (510) 944-5000 6.5 06/20/96 o o 6.7 BUDGET, FINANCIAL STATEMENTS, REPORTS AND STUDIES: 6.7.1 Preparation of ODeratina Budaet: This Section 6.7.1 is intended to implement the pro forma operating budget requirements established by Section 1365 of the California Civil Code. To the extent that Section 1365 is amended or replaced, the provisions of this Section shall be automatically amended and replaced by the new statutory provisions. Further, if the requirements set forth in Section 1365 are repealed, the provisions of paragraph (d), below, shall no longer have any force or effect, but the remainder of this Section, as modified by statute, shall remain in full force and effect. Regardless of the number of Members or the amount of assets of the Association, each year the Board shall prepare and approve a pro forma operating budget which sh&ll include all of the following: basis; (a) estimated revenue and expenses on an accrual (b) 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 therefor; (c) a general statement setting forth the procedures used by the Board in the calculation and establishment of reserves to defray the future repair, replacement or additions to those major components that the Association is obligated to maintain; and (d) a summary of the Association's reserves based upon the most recent review or study conducted pursuant to Section 1365.5 of the California Civil Code. The summary of the Association's reserves shall not be admissible in evidence to show improper financial management of the Association; provided that other relevant and competent evidence of the financial condition of the Association is not made inadmissible by this provision. The summary of the Association's reserves shall be printed in bold type and shall include all of the following: (i) the current estimated replacement cost, estimated remaining life, and estimated useful life of each major component; and (ii) if applicable, as of the end of the fiscal year for which the study is prepared: A. the current estimate of the amount of cash reserves necessary' to repair., replace, restore or maintain the major components; and 6.6 06/20/96 O O B. the current amount of accumulated cash reserves actually set aside to repair, replace, restore, or maintain major components; and (iii) the percentage that the amount determined for purposes of clause (B) of subparagraph (ii) is of the amount determined for purposes of clause (A) of subparagraph (ii). 6.7.2 Distribution of BudGet: The Budget shall be made available to each Member. Not less than forty-five (45) and not more than sixty (60) days prior to the beginning of the fiscal year, the Board shall distribute either a copy or a summary of the Budget to all Owners. If a summary of the Budget is distributed, a written notice must accompany it. The written notice must be in at least 10-point bold type on the front page of the summary. It shall state that the Budget is available at the Association's office (or at another suitable location within the Project) and that copies will be provided upon request and at the expense of the Association. If a Member requests a copy.of the Budget, the Board shall provide a copy to the Member by first class United States mail within five (5) days after the Association's receipt of the request. 6.7.3 Annual Report: Within one hundred twenty (120) days after the close of each fiscal year, the Board shall cause to be distributed to each Member an annual report consisting of the following: (i) a balance sheet as of the end of the fiscal year; (ii) an operating (income) statement for the fiscal year; (iii) a statement of changes in financial position for the fiscal year; and (iv) any information required to be reported under Section 8322 of the California Corporations Code. If the report is no% prepared by an independent accountant, it shall be accompanied by the certificate of an authorized officer of the Association stating that the statements were prepared without independent audit or review from the books and records of the Association. Any annual report prepared for a fiscal year in which the gross income to the Association exceeds seventy-five thousand dollars ($75,000.00) shall be reviewed in accordance with generally accepted accounting principles by a licensee of the California State Board of Accountancy and a copy of such review shall be distributed as part of the annual report. 6.7.4 Ouarterlv Reconciliation: At least quarterly, the~ Board shall: (i) cause a current reconciliation of the Association's Operating Account(s) to be made and review the same; (ii) cause a current reconciliation of the Association's Reserve Account to be made and review the same; (iii) review the current year's actual reserve revenues and expenses compared to the current year's Budget; (iv) review the most current account statements prepared by the financial institution where the Association has its Operation and Reserve Accounts; add (v) review an income and [.i'l-rLu. & SAPUTO 1901 OI.YMP[C BOULEVARD, ~100 v,'-~[.~ tiT CREEK, CA 94596-5024 (510) 944-5000 6.7 06/20/96 o ~0 o 0 expense statement for the Association's Operation and Reserve Accounts. 6.7.5 Reserve Account Studv: This Section 6.7.5 is intended to implement the reserve account study and review requirements established by Section 1365.5 of the California Civil Code. To the extent that Section 1365.5 is amended or replaced, the provisions of this Section shall be automatically amended and replaced by the new statutory .provisions. Further, if the limitations set forth in Section 1365.5 are repealed, the provisions of this Section 6.7.5 shall no longer have any.force or effect. If the current replacement value of the major components of the Common Area is equal to or greater than one-half (~) of the budgeted gross expenses for any fiscal year, then (a) at least once every three (3) years, the Board shall cause a study of the reserve account requirements, as defined below, to be conducted, and (b) the Board shall review this study annually and shall consider and implement necessary adjustments to the Board's analysis of the reserve account requirements as a result of that review. At a minimum, the study required by this Section shall include: (a) Identification of the major components of the Common Area which the Association is obligated to repair, replace, restore or maintain which, as of the date of the study, have a remaining useful life of less than thirty (30) years; (b) Identification of the probable remaining usefUl life of the components identified in (a), above, as of the date of the study; (c) An estimate of the cost of repair, replacement, restoration, or maintenance of each major component identified in (a), above, during and at the end of its useful life; and '(d) An estimate of the total annual contribution necessary to defray the cost to repair, replace, restore, or maintain each major component identified in (a), above, during and at the end of its useful life, after subtracting total reserve funds as of the date of the study. The term "reserve account requirements" as used in this Section 6.7.5 shall mean the estimated funds which the Board has determined are required to be available at a specified point in time to repair, replace, or restore those major components which the'Association is obligated to maintain. 6.7.6 Notice of Increased Assessments: The Board shall provide notice by first-class mail to the Owners of any increase in Regular Assessments or the levy of any Special Assessments not less than thirty (30) and not more than sixty (60) days prior to the increased Regular Assessment or Special Assessment becoming due. I.I'['I'LE & SAPUTO .! TTORNE'Y$ A T L.A ~ 1',0~ OI.YMPIC BOULEVARD, ~100 WAI.N UT CREEK, CA. 94~96.$024 (~10) 944-5000 6.8 06/20/96 o o 6.7.7 Statement of Outstanding Charges: Within ten (10) days of a written request by an Owner, the Association shall provide to the Owner a written statement which sets forth the amounts of delinquent assessments, penalties, attorneys' fees and other charges against that Owner's Lot. A charge for the statement may be made by the Association, not to exceed the reasonable costs of preparation and reproduction of the statement. 6.7.8 Initial Six Month Statement: The Board shall prepare a balance sheet and an operating statement for the Period ending on the last day of the sixth (6th) month from the date Regular Assessments were initially levied and distribute them to each Member within sixty (60) days after that date. The operating statement shall include a schedule of assessments received and receivable, identified by the Lot number and the name of the Member(s) assessed. 6.7.9 Schedule of Monetary Penalties: If the Board adopts a policy imposing any monetary penalty on or charging any fee to any Owner for a violation of the Project Documents by that OWner or that Owner's Invitee, the Board ~hall adopt a schedule of the monetary penalties that may be assessed for those violations. The penalties must be consistent with the Project Documents. A copy of the schedule shall be personally delivered or mailed by first-class mail, postage prepaid, to each Owner by the Board. Each time the schedule is modified, the Board shall again deliver a copy to each Owner, either personally or by first-class mail, postage prepaid. 6.8 ENFORCEMENT OF ASSESSMENTS: The Board shall annually distribute, not more than sixty (60) and not less than forty-five (45) days prior to the beginning of the fiscal year, a statement of the Association's policies and practices in enforcing its remedies against Owners for defaults in the payment of Regular and Special Assessments, including the recording and foreclosing of liens against Owners' Lots. 6.8.1 Procedures: In addition to all other remedies provided by law, the Association, or its authorized representative, may enforce the obligations of the Owners to pay each assessment provided for in this Declaration in any manner provided by law or by either or both of the following procedures: (a) By Suit: The Association may commence and maintain a suit at law against any Owner personally obligated to pay a delinquent assessment. The suit shall be maintained in the name of the Association. Any judgment rendered in any action shall include the amount of the delinquency, and such additional costs, fees, charges and expenditures ("Additional Charges") and any other amounts as the court may award. A proceeding to recover a judgment for unpaid assessments may be maintained without the necessity of foreclosing or waiving the lien established herein. I.I'I-['LE & SAPUTO ..t 'f TORN~-y$ .,,] T ~1 ~ i901 OI.YMPIC BOULEVARD, ~100 WAI.NU'F CREEK, CA 94596-5024 (510) 944-$000 6.9 06/20/96 (b) By Lien: The Association or a trustee nominated by the Association may commence and maintain proceedings to establish and/or foreclose assessment liens. No action shall be brought to foreclose a lien until the lien is created by recording a Notice of Delinquent Assessment ("Notice"). The Notice must be authorized by the Board, signed by an authorized agent or by any Owner if the Board fails or refuses to act, and recorded in the Official Records of the County. The Notice shall state the amount of the delinquent assessment(s), the Additional Charges incurred to date, a description of the Lot, the name(s) of the record Owner(s) thereof and the name and address of the trustee, if any, authorized by the Association to enforce the lien by sale and shall be signed by the person authorized to do so by the Board, or if no one is specifically designated, by the President or Chief Financial Officer. The lien may be foreclosed as provided in Section 1367 of the Civil Code of the State of California. 6.8.2 Additional Charges: In addition to any other amounts due or any other relief or remedy obtained against an Owner who is delinquent in the payment of any. assessments, each Owner agrees to pay such Additional Charges as the Association may incur or levy in the process of collecting from that Owner monies due and delinquent. Ail Additional Charges shall be included in any judgment in any suit or action brought to enforce collection of delinquent assessments or may be levied against a Lot as a Reimbursement Assessment. Additional Charges shall include, but not be limited to, the following: (a) Attorneys' Fees: Reasonable attorneys' fees and costs incurred in the event an attorney(s) is employed to collect any assessment or sum due, whether by suit or otherwise; (b) Late CharGes: A late charge in an amount to be fixed by the Board in accordance with the then current laws of the State of California to compensate the Association for additional collection costs incurred in the event any assessment or other sum is not paid when due or within any "grace" period established by law; (c) Costs of Suit: Costs of suit and court costs incurred as are allowed by the court; (d) Interest: Interest on the delinquent assessment and Additional Charges at a rate fixed by the Board in accordance with the then current laws of the State of California; and (e) Other: Any such other additional costs that the Association may incur in the process of collecting delinquent assessments or sums. 6.8.3 Certificate of Satisfaction of Lien: Upon payment or other satisfaction of a delinquent assessment for which 6.10 06/20/96 O o a Notice was recorded, the Association shall record a certificate stating the satisfaction and release of the assessment lien. 6.8.4 Waiver of Homestead Protections: Each Owner, does hereby waive, to the extent permitted by law, the protections of any declared homestead or homestead exemption or redemption laws under the laws of California as applied to any action to enforce or collect assessments levied by the Association. 6.9 SUBORDINATION OF LIEN: Notwithstanding any provision to the contrary, the liens for assessments created pursuant to this Declaration shall be subject and subordinate to and shall not affect the rights of the holder of a First Mortgage made in good faith and for value. Upon the foreclosure of any First Mortgage on a Lot, any lien for assessments which became due prior to such foreclosure shall be extinguished; provided, however, that after such foreclosure there shall be a lien on the interest of the purchaser at the foreclosure sale to secure all assessments, whether Regular or Special, charged to such Lot after the date of such foreclosure sale, which lien shall have the same effect and shall be enforced in the same manner as provided herein. For purposes of this Section, a Mortgage may be given in good faith or for value even though the Mortgagee has constructive or actual knowledge of the assessment lien provisions of this Declaration. 6.10 SAN BRUNO MOUNTAIN AREAHABITAT CONSERVATION PLAN: The Project is located within the development areas encompassed by the Habitat Conservation Plan. The HCP requires that annual assessments be levied against Units located within the area encompassed by the HCP ("HCP Assessments") in an amount and otherwise in accordance with-the provisions of the Declaration of Covenants and Restrictions on Real Property on San Bruno Mountain recorded on , 1996, as Document No. of the Official Records of the County Recorder ("HCP Declaration"). Prior to close of escrow for the conveyance of any Lot in the Project, the Association, Additional Declarant and the HCP trustees shall enter into the Collection Agreement attached hereto as Exhibit "C" ("Collection Agreement"). The Regular kssessments set forth in the Budget and levied against the Owners shall provide for the collection of the amounts necessary for the Association to pay the HCP Assessments. The Association shall levy Regular Assessments adequate to pay the HCP Assessments levied annually against the Lots in accordance with the Collection Agreement. All funds collected by the Association to pay. the HCP Assessment shall be deposited into a separate interest bearing account with a bank or savings and loan association insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, as the case may be, to be called the "HCP Terrabay Park - San Bruno Mountain Area Habitat Conservation Trust Account" ("Trust Account"). So much of the funds in the Trust Account as shall be required to meet the lawful demands of the San Bruno Mountain Habitat Conservation Trust ("HCP Trust") shall be disbursed by the Board from the Trust Account to I.I'I-I'LE & SAPUTO .., T'FORNEYS A T LA 1901 OLYMPIC BOULEVARD, #lO0 %%'AI.N t;'r CREEK, CA 94596=5024 (5 [ 0 ) 944 -5000 6.11 06/20/96 o the trustees of the HCP Trust annually in advance on or before November 10 of each ~year, or such other date or at such more frequent intervals as the Trustees may designate. Any funds remaining in the Trust Account shall be retained therein as and for a reserve for delinquent accounts. Any interest earned on the funds in the Trust Account shall be disbursed to the HCP Trust or for the benefit of the HCP in accordance with the written directions of the Plan Operator. In addition, the Association shall pay to the County of San Mateo, as Plan Operator of the HCP Trust a fractional share of the costs of thinning any exotic woody plants and performing other maintenance in the low fuel maintenance zone ("Thinning and Maintenance Expense") within the Master Association Common Area and the Subassociation Common Area. The numerator of the fractional shall share shall be equal to the number of Lots then subject to Regular Assessments and .the denominator shall be the number of "lots", as defined in the Master Declaration, then subject to "regular assessments", as defined in the Master Declaration. Regular Assessments set forth in the Budget and levied against the Owners shall provide for the collection of the amounts necessary for the Association to pay its fractional share of the Thinning and Maintenance Expense. The Association shall levy Regular Assessments adequate to pay its fractional share of the Thinning and Maintenance Expense. Ail funds collected by the Association to pay Thinning and Maintenance Expenses shall be disbursed by the Association to the Plan Operator on or before November 10 of each year, or such other date or at such more frequent intervals as the Plan Operator may designate. Any conveyance by Declarant or an Owner shall contain in the deed or other instrument transferring such interest the following provision: "This conveyance is subject to the Declaration of Covenants and Restrictions on Real Property on San Bruno Mountain dated and recorded on , 1996, as Document No. , of the Official Records of the County Recorder." 6.11 MASTER ASSOCIATION ASSESSMENTS: 6.11.1 Joint Collection of Regular Assessments: The Association and the Master Association may agree to authorize either the Association or the Master Association to provide Owners with a single periodic statement, directing those Owners to pay the Regular Assessment levied by both the Association and the Master Association to either the Association or the Master Association ("collecting association"). The collecting association shall regularly provide the other association with an accounting of all delinquent assessments'and shall pay to the other association each I.I'I-I'LE & SAPUTO .-I I'TORNEY$ A T L.,4 W' I';01 OLYMPIC BOULEVARD, 9100 WAI.NU'r CREEK, CA 94596-5024 (510) 944-5000 6.12 06/20/96 O o billing period association. all Regular Assessments collected for that 6.11.2 Priority of Master Association Documents: In the event that the Association forecloses its lien pursuant to paragraph 6.8.1., the foreclosure shall not affect the validity or enforceability of the Master Declaration. 6.13 06/20/96 ARTICLE VII MEMBERSHIP IN AND DUTIES OF THE ASSOCIATION 7.1 THE ORGANIZATION: The Association is a nonprofit mutual benefit corporation. Its affairs shall be governed by and it shall have the powers set forth in the Project Documents. 7.2 MEMBERSHIP: Each Owner (including Declarant for so long as Declarant is an Owner), by virtue of being an Owner, shall be a Member of the Association. No other person shall be accepted as a Member. 7.2.1 Appurtenant to Ownership: Association membership is appurtenant to and may not be separated from the ownership of a Lot. Membership shall terminate upon termination of Lot ownership. Ownership of a Lot shall be the sole qualification for Association membership. Membership shall not be transferred, pledged or alienated in any way except upon transfer of title to the Owner's Lot (and then only to the transferee of title to such Lot). Any attempt to make a prohibited transfer is void. Membership shall not be related to the use or non-use of the Common Area and may not be renounced. The rights, duties, privileges and obligations of all Members shall be as provided in the Project Documents. 7.2.2 Annexation: Upon the commencement of Regular Assessments in a subsequent Phase, the Owners of the Lots described in the Declaration of Annexation for that Phase shall become Members. 7.3 VOTING: Any action required by law or by the Project Documents to be approved by the Owners, the Members or each class of Members shall be approved, if at all, in accordance with the procedures set forth in the Bylaws. 7.4 RI/LES: The Board may propose, adopt, amend and repeal Rules appropriate for the management of the Project, which are consistent with the Project Documents. The Rules may also establish architectural controls and may govern the use of the Common Area by Owners or their Invitees. After adoption, a copy of the Rules shall be furnished to each Owner. Owners shall be responsible for distributing the Rules to their tenants. 7.5 DEDICATION AND EASEMENTS: Subject to any applicable provision in the Bylaws, the Board shall have the power to (i) dedicate any of the Common Area to an appropriate public authority for public use or (ii) grant and convey easements and licenses for use and rights of way in, on, over and under any Common Area. 7.6 INSURANCE: The Board shall make every reasonable effort to obtain and maintain the insurance policies as provided in this Section. If the Board is unable to purchase a policy or if the [.I'I'I'LE & SAPUTO .4 TTO RN EYS A T LA W 190! OLYMPIC BOULEVARD, #tO0 WAI.NIJT CREEK, ~ 9459~50~ (510) ~4-5000 7.1 06/20/96 Board believes that the cost of the policy is unreasonable, the Board shall call a special meeting of Members to determine what action to take. The Board shall comply with any resolution concerning insurance coverage adopted at such a meeting. 7.6.1 General Provisions and Limitations: Ail insurance policies shall be subject to and, where applicable, shall contain the following provisions and limitations: (a) Underwriter: Ail policies (except earthquake insurance) shall be written with a company legally qualified to do business in the State of California and (i) holding a "B" or better general policyholder's rating and a "6" or better financial performance index rating as established by Best's Insurance Reports, (ii) reinsured by a company described in (i), above, or (iii) if such a company is not available, the best rating possible or its equivalent. (b) Named Insured: Unless otherwise provided in this Section, the named insured shall be the Association or its authorized representative, as a trustee for the Owners. However, all policies shall be for the benefit of Owners and their Mortgagees, as their interests may appear. (c) Authority to Negotiate: Exclusive authority to adjUst losses under policies obtained by the Association shall be vested in the Board; provided, however, that no Mortgagee having an. interest in such losses may be prohibited from participating in any settlement negotiations related thereto. (d) Contribution: In no event shall the insurance coverage obtained and maintained by the Association be brought into contribution with insurance purchased by Owners or their Mortgagees. (e) General Provisions: To the extent possible, the Board shall make every reasonable effort to secure insurance policies providing for the following: (i) A waiver of subrogation by the insurer as to any claims against the Board, the manager, the Owners and their respective servants, agents and guests; (ii) That the policy will be primary, even if an Owner has other insurance which covers the same loss; (iii) That no policy may be cancelled or substantially modified without at least ten (10) days' prior written notice to the Association and to each First Mortgagee listed as a scheduled holder; (iv) An agreed amount endorsement, if the policy contains a coinsurance clause; LrI-I'LE & SAPUTO ..I 'I"I'O R.V~$ A ~ [..A ~ 1901 OLYMPIC BOUL~VARD, ~100 ~.¥AI.NUT CREEK. CA 9a596-~024 (510} 944-~000 7.2 06/20/96 O (v) A guaranteed replacement cost endorsement; and replacement cost or (vi) An inflation guard endorsement. (f) Term: The period of each policy shall not exceed three ~(3) years. Any policy for a term greater than one (1) year must permit short rate cancellation by the insureds. (g) Deductible: The policy may contain a reasonable deductible and the amount of the deductible shall be added to the face amount of the policy in determining whether the insurance equals replacement cost. 7.6.2 TvDes of Coveraqe: Unless the Association determines otherwise pursuant to Section 7.6, the Board shall obtain at least the following insurance policies in the amounts specified: (a) Property Insurance: A Special Form or "All-Risk" policy of property insurance ~or all insurable Common Area Improvements, including fixtures and building service equipment, against loss or damage by fire or other casualty, in an amount equal to the full replacement cost (without respect to depreciation) of the Common Area, and exclusive of land, foundations, excavation and other items normally excluded from coverage. A replacement cost endorsement shall be part of the policy. (b) Liability Insurance: A combined single limit policy of liability insurance in an amount not less than Three Million Dollars ($3,000,000.00) covering the Common Area and all damage or injury caused by the negligence of the Association, the Board or any of its agents or the Owners against any liability to the public or to any Owner incident to the use of or resulting from any accident or intentional or unintentional act of an Owner or a third party occurring in or about any Common Area. If available, each policy shall contain a cross liability endorsement in which the rights of the named insured shall not be prejudiced with respect to any action by one named insured against another named insured. (c) Worker's Compensation: Worker's compensation insurance to the extent necessary to comply with all applicable laws of the State of California or the regulations of any governmental body or authority having jurisdiction over the Project. (d) Fidelity Bond: A fidelity bond naming the Board, the Owners, the Association and such other persons as the Board may designate as obligees, in an amount equal to at least one-fourth (1/4) of the total sum budgeted for the Current Operation Account and Reserve Account for the current fiscal year. I.I'Iq'LE & SAPUTO .*1 TTORA'EY$ ,4 T ~ W P;Ol OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94.596-5024 (510) 94~-5000 7.3 06/20/96 ~o 0~ o [,., o The fidelity bond shall contain a waiver of any defense based on the exclusion of persons serving without compensation. (e) Directors and Officers: Errors and omissions insurance covering individual liability of Directors and officers for their negligent acts or omissions while acting in their capacities as Directors and officers. (f) Other Insurance: Other types of insurance as the Board determines to be necessary to fully protect the interests of the Owners. (g) Insurance by Owner: Each Owner, at that Owner's sole cost and expense, shall obtain insurance coverage which the Owner considers necessary or desirable to protect that Owner and that Owner's Lot, Residence and personal property; provided, however, that no Owner shall be entitled to maintain insurance coverage in a manner so as to decrease the amount which the Association, on behalf of all Owners and their Mortgagees, may realize under any insurance policy which the Association may have in effect at any time. 7.6.3 Annual Review: The Board shall review the adequacy of all insurance, including the amount of liability coverage and the amount of property damage coverage, at least once every year. At least once every three years, the review shall include a replacement cost appraisal of all insurable Common Area Improvements without respect to depreciation. The Board shall adjust the policies to provide the amounts and types of coverage and protection that are customarily carried by prudent owners of similar property in the area in which the Project is situated. 7.6.4 Notice to Members: The Association shall provide the notices described in this Section at least annually. In addition, if any policy has been cancelled and not immediately replaced, the Association shall notify the Members by first-class mail as soon as reasonably practical. If the Association. renews any of its policies or a new policy is issued to replace an insurance policy of the Association and there is no lapse in coverage, the Association shall notify the Members of that fact in the next available mailing to all Members pursuant to Section 5016 of the Corporations Code. If the information to be disclosed pursuant to this Section is specified in the insurance policy declarations page, the Association may satisfy its obligations under this Section by distributing copies of that page to the Members. (a) General Liability: A summary of the general liability policy that states all of the following: (±) The name of the insurer; (ii) The policy limits; I.rI-FLE & SAPUTO .-I TTOI~¥EY$ .4 T LA ~ 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREE~ ~ 9459~50~ (510) 944-5~0 7.4 06/20/96 (iii) Whether an insurance agent assisted the Association in determining the general liability policy limits and whether the insurance agent's recommendations were followed; (iv) The deductibles; (v) The person or entity that is responsible for paying the deductible in the event of loss; and (vi) Whether the Improvements made to Lots or Residences. coverage extends to For purposes of this Section, the term "insurance agent" means an insurance agent as defined in Section 1621 of the Insurance Code, an insurance broker, or an agent of an insurance agent or insurance broker. (b) Earthquake and Flood: A summary of the Association's earthquake and flood insurance policies, if either has been issued, that states all of the fgllowing: (i) The name of the insurer; (ii) The policy limits; (iii) The deductibles; and (iv) The person or entity that is responsible for paying the deductible in the event of loss. (c) Directors and Officers: A summary of the Association's liability coverage policy for the directors and officers of the Association that states all of the following: (i) The name of the insurer; and (ii) The policy limits. 7.7 COMPLETION OF COMMON AREA IMPROVEMENTS: 7.7.1 Inspection of Common Area ImDrovements: (a) Declarant or Additional Declarant may notify the Board when the Common Area Improvements (including landscaping). fora particular Phase or some portion thereof have been completed. Within thirty (30) days after giving of such notice, Declarant or the Additional Declarant, as the case may be, ("Requesting Declarant") and the Board (collectively referred to as "Parties") shall jointly request that a qualified engineer or architect (which term shall include "landscape architect," if the nature of the improvements warrants) employed by the City inspect the Common Area improvements as to which such notice has been given. If the City is unwilling or unable ~0 provide an engineer or architect to make [.rI'I'LE & SAPUTO ..I TTO R;V E~ 'S .AT L.,4 F~ 1901 OI.YMPIC BOULEVARD, #100 WAI.NL'T CREEK, CA 94596-5024 (sro) 94~-$ooo 7.5 06/20/96 such inspection, the Parties shall jointly select an independent and qualified engineer or architect to perform the inspection. If the Parties are unable or fail to agree on the selection within thirty (30) days after the joint selection is requested, then each Party, within the next thirty (30! days, shall select a licensed engineer or architect and the persons so selected, within fifteen (15) days after both are selected, shall jointly select a third engineer or architect. If either of the Parties fails to select an engineer or architect within the time provided, then the failing Party shall be deemed to have irrevocably waived its right to select, and the inspection shall be performed by the engineer or architect selected by the other Party. If the engineers or architects selected by the Parties shall fail to select a third person within the time provided, then either Party may petition any court of competent jurisdiction for appointment of such a third person. The person(s) selected or appointed pursuant to this paragraph is referred to in this Section as the "Expert" Requesting Declarant shall pay the reasonable compensation of the Expert. (b) Promptly upon the seiection of the Expert as provided in Section 7.7.1(a), the Expert shall inspect the Common Area Improvements as to which notice has been given. The Parties 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 ("Report") to the Parties 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 proved therein and except for latent defects, if any, the Improvements have been constructed in accordance with the plans and specificacions therefor, and thereafter Requesting 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 Requesting Declarant under express written warranty, if any. (c) Requesting Declarant shall correct any defects specified in the Report, and the Expert shall reinspect such Improvements within thirty (30) days after 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 ("R~inspection Report") .to the Parties 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 I.I'Iq'LE & SAPUTO ..I T'FORNEY$ A T LA ~ 1',~01 OI.YMPIC BOULEVARD, ~100 WAt.NUT CREEK,. CA 94596..5024 (510) 9~,~-5000 7.6 06/20/96 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 Requesting 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 Requesting 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 above. (e) If the Improvements to be inspected are landscaping Improvements, then notwithstanding anything to the contrary contained herein, the Expert shall be a horticulturist 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; and, if Requesting Declarant has posted a bond or other security ("Bond") to secure the faithful performance to complete any of the Common Area Improvements, and if the Association is the obligee under the Bond, the Board shall release in writing any and all rights under the Bond pertaining to the Improvements and shall execute any other documents as may be reasonably necessary to effect the release of the Bond. 7.7.2 Enforcement of ComDletion Bonds: If Declarant or Additional Declarant has posted a Bond to secure the faithful performance to complete any of the Common Area Improvements and the Association is the obligee under the Bond, the provisions of this Section 7.7.2 shall apply to initiating action to enforce the obligations of Declarant or Additional Declarant, as the case may be: (a) The Board shall consider and vote on the question of action by the Association to enforce the obligations under-the Bond with respect to any Improvements for which a notice of completion has not been filed within sixty (60) days after the completion date specified for that Improvement in the planned construction statement appended to the Bond. If the Association has given a written extension for the completion of any Common Area Improvements, the Board shall consider and vote whether to take action if a notice of completion has not been filed within thirty (30) days after the expiration of the most recent extension. (b) If the Board decides not to act or fails to initiate action to enforce bonded obligations, then upon receipt by the Board of a petition for a special meeting signed by Members I.I'I-FI.E & SAPUTO .-I 'I'T O RN L:'Y$ A T I..,1 W ~*~1 OLYMPIC BOULI~VARD, ~100 WAI.NUT CREEK, CA 94596-50~4 (510) 944-5000 7.7 06/20/96 C; [-. 0 entitled to cast five percent (5%) or more of the total number of votes which may be cast by the Members, the Board shall call a special meeting of the Members. If the Board has failed to initiate action, the Members shall determine whether they wish to initiate action. If the Board has decided not to initiate action, the Members shall determine whether to override the Board's decision. The meeting shall be held not less than thirty-five (35) nor more than forty-five (45) days after receipt of the petition by the Board. At the meeting, the approval of the Members, excluding the vote of Declarant, to take action to enforce the obligations under the Bond shall be deemed to be the decision of the Association. The Board shall thereafter implement the decision by initiating and pursuing appropriate action in the name of the Association. LI'I'I'LE & SAPUTO .'ITTORNEYS AT I..dW OLYMPIC BOULEVARD, ~.%'AI.NIJT CREEK. CA 94~9~-$024 (5~0) 9~a-$000 7.8 06/20/96 ARTICLE' VIII DEVELOPMENT RIGHTS 8.1 LIMITATIONS OF RESTRICTIONS: Declarant and Additional Declarant are undertaking the work of developing Lots and other Improvements within the Project. The completion of the development and the marketing, sale, lease, rental and/or other disposition of the Lots is essential to the establishment and welfare of the Subject Property and the Additional Property as a residential community. In order that the work may be completed and the Project be established as a fully occupied residential community as rapidly as possible, nothing in this Declaration shall be interpreted to deny Declarant or Additional Declarant the rights set forth in this Article. The rights reserved by Declarant and Additional Declarant pursuant to this article are subject to all applicable state, County and City laws, regulations and ordinances. 8.2 RIGHTS OF ACCESS AND COMPLETION OF CONSTRUCTION: Until the fifth (5th) anniversary of the original issuance of the Public Report for the most recent Phase, Declarant, Additional Declarant and their contractors and subcontractors shall have the right to: (i) obtain reasonable access over and across the Common Area of the Project and/or do within any Lot owned or controlled by it whatever is reasonably necessary or advisable in connection with the completion of the Project; and (ii) erect, construct and maintain on the Common Area of the Project and/or within any Lot owned or controlled by it such structures as may be reasonably necessary for the conduct of its business to complete the work, establish the Project as a residential community and dispose of the Project in parcels by sale, lease, rental or otherwise. 8.3 SIZE AND APPEARANCE OF PROJECT: Declarant and Additional Declarant shall not be prevented from increasing or decreasing the number of Lots that may be annexed to the Project or from changing the exterior appearance of Residences or Common Area structures, the landscaping or any other matter directly or indirectly connected with the Project in any manner deemed desirable by Declarant or Additional Declarant, if Declarant or Additional Declarant obtain all governmental consents required by law. 8.4 ALTERATIONS TO MAP: At anytime within three (3) years from the date that the first Lot in a Phase is conveyed to an Owner other than a Declarant, the boundaries of any Lot or Common Area in that Phase may be altered by a lot line adjustment or other change reflected on a subsequently recorded parcel map or subdivision map, provided that the altered boundaries are approved by Declarant and all owners of the Property involved in the boundary adjustment (the Board, with respect to property owned by the Association). Any such alteration shall be effective upon recordation of the parcel map, subdivision map or other document aproved by the City and, upon such recordation, the boundaries of the altered Lot or Common 8.1 06/20/96 Area shall be altered for purposes of this Declaration to conform to the boundaries as modified. 8.5 MARKETING RIGHTS: Declarant shall have the right to: (i) maintain model homes, signs, banners,, flags, balloons, sales, leasing and rental offices, storage areas, parking lots and related facilities in any Lots owned or controlled by Declarant or Common Area within the Project as are necessary or reasonable, in the opinion of Declarant, for the sale, lease, rental or other disposition of the Lots; (ii) make reasonable use of the Common Area and facilities for the sale, lease, rental or other disposition of Lots;.. (iii) use any Lots owned or controlled by' Declarant in accordance with any promotional programs established from time to time by Declarant; and (iv) conduct its business of disposing of Lots by sale, lease, rental or otherwise; provided, however, Declarant shall pay the Association reasonable rent for the use of any Common Area facilities, if Declarant's use of those Common Area facilities materially interferes with the full use and enjoyment of the Common Area facilities by Owners. 8.6 TITLE RIGHTS: This Declaration shall not be construed to constitute a limitation on Declarant's and Additional Declarant's title rights to the Additional Property prior to its annexation, nor shall it impose any obligation on Declarant, Additional Declarant or any other person or entity to improve, develop or annex any portion of the Additional Property. This Declaration shall not be construed to limit the right of Declarant or Additional Declarant at any time prior to such an annexation to establish additional licenses, easements, reservations, restrictions and rights-of-way for itself, utility companies or others as reasonably necessary for the.proper development and disposition of property owned by Declarant or Additional Declarant. 8.7 AMENDMENT: After the expiration of Class B membership (as defined in the Bylaws), the provisions of this Article may not be amended without the written consent of Declarant and Additional Declarant until either (i) all of the Additional Property has been annexed to the Project and all of the Lots in the Project owned by Declarant have been conveyed or (ii) five (5) years after the original issuance of the Public Report for the most recent Phase of the Project, whichever occurs first. I.I'I-I'LE & SAPUTO .'l 'I'TORN~'Y$ .4 T L,,4 Pt' !',")1 (.)[.YMPIC BOULEVARD, ~ I00 WAI.NUT CREEK. CA 94596-5024 (510 ) 944 -SO00 8.2 06/20/96 ARTICLE IX RIGHTS OF MORTGAGEES 9.1 CONFLICT: Notwithstanding any contrary provision contained elsewhere in the Project Documents, the provisions of this Article shall control with respect to the rights and obligations of Mortgagees specified herein. 9.2 LIABILITY FOR UNPAID ASSESSMENTS: Any First Mortgagee who obtains title to a Lot pursuant to the remedies provided in the First Mortgage (except upon a voluntary conveyance to the First Mortgagee) or by foreclosure of the First Mortgage shall take the property free of any claims for unpaid assessments or charges against"the Lot which accrue prior to the acquisition of title to the Lot by the First Mortgagee. 9.3 INSPECTION OF BOOKS AND RECORDS: Upon request, any Owner or First Mortgagee shall be entitled to inspect and copy the books, records and financial statements of the Association, the Project Documents and any amendments thereto during normal business hours. 9f4 FINANCIAL STATEMENTS FOR MORTGAGEES: If the Project then contains more than fifty (50) Lots, the Association, at its expense, shall prepare an audited financial statement for the immediately preceding fiscal year. The audited financial statement shall be available within one hundred twenty (120) days of the end of the Association's fiscal year. The Association shall provide a copy of the audited financial statement to any Mortgagee who makes a written request for it. If the Project then contains fifty (50) or fewer Lots and if an audited financial statement is not available, any Mortgagee who desires to have an audited financial statement of the Association may cause an audited financial statement to be prepared at the Mortgagee's expense. 9.5 MORTGAGE PROTECTION: A breach of any of the conditions or the enforcement of any lien provisions contained in this Decl~.ration shall not defeat or render invalid the lien of any First Mortgage made in good faith and for value as to any Lot in the Project; but all of the covenants, conditions and restrictions contained in this Declaration shall be binding upon and effective against any Owner of a Lot if the Lot is acquired by foreclosure, trustee's sale or otherwise. LI'I'I'LE & SAPUTO ..I I"I'O RA'EY$ A T LA W ;,,,ZI OI.YMPIC BOULEVARD, ~100 V.'AI.N UT CREEK, CA 94596-$024 9.1 06/20/96 ARTICLE X AMENDMENT AND ENFORCEMENT 10.1 AMENDMENTS: Prior to the conveyance of the first Lot to an Owner other than a Declarant or Additional Declarant, any 'Project Document may be amended by Declarant and Additional Declarant. After the conveyance of the first Lot, the Project Documents may be amended with the approval of each class of Members; provided however, that no provision of this Declaration which provides for a vote of more than fifty-one percent (51%) may be amended by a vote less than the percentage specified in the section to be amended. Notwithstanding any language in this Declaration to the contrary, so long as the Declarant is a Class B Member, no provision of this Declaration may be amended without the approval of the Additional Declarant. 10.1.1 Approval By City: Notwithstanding any language in this Declaration to the contrary, no amendment or rescission to Sections 2.19, 3,3, 3,5.12, 4.8, 4.14, 5.1, 5.2.1, 5.4 or 11.4, the last sentence of Section 8.1, or this Section 10.1.1 shall be effective without the prior written consent of the City of South San Francisco. 10.1.2 Approvals Recuired bv Habitat Conservation Plan: Notwithstanding any language in this Declaration to the contrary, no amendment or rescission to Section 6.10 or this Section 10.1.2 shall be effective without obtaining all approvals required pursuant to the Habitat Conservation Plan and the Habitat Conservation Plan Agreement. 10.1.3 Recordation of Amendment: Any amendment to this Declaration shall be effective upon the recordation in the Official Records of the County of an instrument executed by the President and Secretary of the Association which sets forth the terms of the amendment and a statement which certifies that the required percentage of Members have approved the amendment. 10.2 ENFORCEMENT: 10.2.1 Rights to Enforce: Declarant, Additional Declarant, the Association and/or any Owner shall have the power to enforce the provisions of the Project Documents in any manner provided by law or in equity and in any manner provided in this Declaration. The Association may institute appropriate legal action, temporarily suspend an Owner's voting rights and/or levy a fine against an Owner in a standard amount to be determined by the Board from time to time. No determination of whether a violation has occurred shall be made until Notice and. Hearing has been provided to the Owner pursuant to the Bylaws. If legal action is instituted by the Association, any judgment rendered shall include all appropriate Additional Charges. Notwithstanding anything to the contrary contained in this Declaration, the Association shall not have the power to cause a forfeiture or abridgement of an I.ITTLE & SAPUTO ..! 'I"I'ORNEY$ .4 T LA ~; i~,.~i oI.','MPIC BOULEVARD, 9100 ',%'A I.N L'T CREEK, CA 94596-$02~, (510) 944-$000 i0.1 06/20/96 O Owner's right to the full use and enjoyment of the Owner's Lot and Residence, including access thereto over and across the Common Area, due to the Owner's failure to comply with the provisions of the Project Documents, unless the loss or forfeiture is the result of the judgment of a court, an arbitration decision, a foreclosure proceeding or a sale conducted pursuant to this Declaration. The provisions of this Declaration shall be equitable servitudes, enforceable by Declarant, Additional Declarant, any Owner and/or the Association against the Association and/or any other Owner, tenant or occupant of the Project. Except as otherwise provided, Declarant, Additional Declarant, the Association or any Owner(s) shall have the right to enforce, in any manner permitted by law or in equity, any and all of the provisions of the Project Documents, including any decision made by the Association, upon the Owners, the Association or upon any property in the Project. 10.2.2 Violation of Law: The Association may treat any Owner's violation of any state, municipal or local law, ordinance or regulation, which creates a nuisance to the other Owners in the Project or to the Associati©n, in the same manner as a violation of the Project Documents by making such violation subject to any or all of the enforcement procedures set forth in this Declaration, as long as the Association complies with the Notice and Hearing requirements. 10.2.3 Remedies Cumulative: Each remedy provided by this Declaration is cumulative and not exclusive. 10.2.4 Nonwaiver: The failure to enforce the provisions of any.covenant, condition or restriction contained in this Declaration shall not constitute a waiver of any right to enforce any such provisions or any other provisions of this Declaration. 10.2.5 Enforcement by City, County and HCP Trust: The City is hereby made a third party beneficiary of this Declaration as to Section 10.1.1 and the sections listed in Section 10.1.1 and is granted th~ right but not the duty to enforce the provisions of those sections. The County, the San Bruno Mountain Habitat Conservation Trust and the Plan Operator are hereby made a third party beneficiary of this Declaration as to Section 10.1.2 and the sections listed in Section 10~1.2 and are granted the right but not the duty to enforce the provisions of those sections. 10.3 NOTICES TO MEMBERS OF LEGAL PROCEEDINGS: Prior to filing any civil action against Declarant or other developer of the Project for alleged damage to (i) the Common Area, (ii) all or portions of the Lots which the Association is required to maintain, or (iii) the Lots which arises from or is integrally related to alleged damage to the Common Area or all or portions of the Lots which the Association is required to maintain, the Board shall provide written notice to each Member specifying each of the following: I.I'I'I'LE & SAPUTO ..i 'I'TO RN ~Z'$ .~l T ~ W it"~l OI.YMPIC BOI./L~/ARD, gl00 WA I.N I ;'l' CREEK, CA 94596-$024 (510} 944-5000 10.2 06/20/96 kD O (a) That a meeting will take place to discuss problems that may lead to the filing of a civil action; (b) The options, including civil actions, that are available to address the problems; and (c) The time and place of the meeting. If the Association has reason to believe that the applicable statute of limitations will expire before the Association is able to give notice, hold the meeting and file the civil action, the Association may file the civil action first and then give the notice within thirty (30) days after filing of the action. 10.4 CONDITIONS TO CERTAIN LEGAL PROCEEDINGS: Before the Association commences an action for damages against Declarant based upon a claim for defects in the design or construction of the Project, all of the following requirements shall be met, except as otherwise provided in this Section: 10.4.1 Association's Notice: The Association shall give written notice to Declarant (Association's Notice) which shall include all of the following: (a) A preliminary list of defects; (b) A summary of the results of any survey or questionnaire distributed to Owners to determine the nature and extent of defects; and (c) A summary of the results of any testing conducted to determine the nature and extent of defects or the actual test results. 10.4.2 Notice Toils Limitations on Actions: Upon delivery of the Association's Notice to Declarant, a period of time, not to exceed ninety (90) days unless the Association and Declarant agree toga longer period of time, shall commence during which the Association and Declarant shall attempt to settle the dispute or attempt to agree to submit it to alternative dispute resolution. Except as provided in this Section, and notwithstanding any other provision of law, the mailing of the Association's Notice shall toll all statutory and contractual limitations on actions against all parties who may be responsible for the damages claimed, whether named in the notice or not, including claims for indemnity applicable to the claim, for a period of one hundred fifty (150) days or a longer period agreed to in writing by the Association and Declarant. At any time, Declarant may give written notice~ to cancel the tolling of the statute of limitations provided in this Section. Upon delivery of this written cancellation notice, the Association shall be relieved of any further obligations to satisfy the requirements of this Section 10.4. The tolling of all applicable statutes of I.I'I'I'LE & SAPUTO .4 TTORNEY$ d T L.A }V 1~.oI OLYMPIC BOUL[~/ARD. ~100 WALNUT CREEK, CA 94596-5024. (510) 9a4-5ooo 10.3 06/20/96 CD CD O limitations shall cease sixty (60) days after the written notice of cancellation by Declarant is delivered to the Association. 10.4.3 Meetings: Within twenty-five (25) days after the delivery date of the Association's Notice, Declarant may request in writing to meet and confer with the Board and to inspect the Project and conduct testing, including testing that may cause physical damage to any property in the Project in order to evaluate the claim. If Declarant does not make a timely request to meet and confer with the Board or to conduct inspection and testing, the Association shall be relieved of any further obligations to satisfy the requirements of this Section 10.4. Unless Declarant and the Association agree otherwise, the meeting shall take place not later than ten (10) days from the date of Declarant's written request at a mutually agreeable time and place~ The meeting shall be subject to the provisions of Civil Code Section 1363.05(b). The discussions at the meeting are privileged communications and are not admissible in evidence in any civil action, unless the Association and Declarant consent to their admission. The meeting shall be for the purpose of discussing all of the following: (a) The nature and extent of the claimed defects; (b) Proposed methods of repair to the extent there is sufficient information; (c) Proposals for submitting alternative dispute resolution; and the dispute to (d) Requests from Declarant to inspect the Project and conduct testing. If Declarant makes a written request writing to meet and confer with the Board pursuant to this Section, Declarant shall deliver the Association's Notice to any insurer that has issued a policy to Declarant which imposes upon the insurer a duty to defend or indemnify Declarant for losses resulting from the defects identified in the Association's Notice. Upon receipt, the notice by Declarant shall impose upon the insurer any obligation which would be imposed under the terms of the policy if the insured had been served with a summons and complaint for damages. Declarant shall inform the Association when Declarant delivers the notice to each insurer pursuant to this subsection. 10.4.4 Inspections and Testinq: If the Association conducted inspection and testing prior to the date it sent the Association's Notice, the Association shall make available for inspection and testing at least those areas inspected or tested by the Association at the earliest' practicable date. The inspection and testing shall be completed within fifteen (15) days from the date the Association makes these areas available for inspection and testing, unless the Association and Declarant agree to a longer period. If Declarant does not timely complete the inspection and 10.4 06/20/96 0% o o testing, the Association shall be relieved of any further obligation to satisfy the requirements of this Section 10.4. The manner in which the inspection and testing shall be conducted, and the extent of any inspection and testing to be conducted beyond that which was conducted by the Association prior to sending the Association's Notice, shall be determined by agreement of the Association and Declarant. Declarant shall pay all costs of inspection and testing that are requested by Declarant, restore the property to the condition which existed immediately prior to the testing and indemnify the Association and Owners for any damage resulting from the testing. Interior inspections of Residences shall be conducted in accordance with the Project Documents, unless otherwise agreed to by the affected Owner. The results of the inspection and testing shall not be inadmissible in evidence in any civil action solely because the inspection and testing was conducted pursuant to this subsection. 10.4.5 Settlement Offer: Within thirty (30) days of the completion of inspection and testing pursuant to Section 10.4.4 or, if no inspection and testing is conducted, within thirty (30) days of the meeting held pursuant to Section 10.4.3, Declarant shall submit all of the following to the Association: (a) A request to meet with the Board to discuss a written settlement offer; (b) A written settlement offer, which may include an offer to submit the dispute to alternative dispute resolution, and a concise explanation of the specific reasons for the terms of the offer; (c) A statement that Declarant has access to sufficient funds to satisfy the conditions of the settlement offer; and (d) A summary of the results of testing conducted for the purpose of determining the nature and extent of defects, if testing has been conducted; provided however, if the Association provided Declarant with actual test results in the Association's Notice, Declarant shall provide the Association with actual test results. If Declarant does not timely submit the items required by this subsection, the Association shall be relieved of any further obligations to satisfy the requirements of this Section 10.4. No less than ten (10) days after Declarant submits the items required by this subsection, Declarant and the Board shall meet and confer about the settlement offer, including any offer to submit the dispute to alternative dispute resolution. 10.4.6 Time Periods and Notices: At any time after delivery of the Association's Notice, the Association and Declarant may agree in writing to modify or excuse any of the time periods or I.I'Iq'LE & SAPUTO · '! '£TORNEYS d T LA W I~10I.','MPIC BOULk~'ARD, ~'100 ~.VAI.N UT CREEK. CA 94596-5024 (5[0) 944-5000 10.5 06/20/96 kc; 0 ,-~ [-. 0 other obligations imposed by this Section 10.4. Except for the notice required pursuant to Section 10.4.7, all notices, request, statements or other communication required pursuant to this Section 10.4 shall be delivered by one of the following: (a) By first-class registered or certified mail, return receipt requested; or (b) In any manner in which it is permissible to serve a summons pursuant to Section 415.10 or 415.20 of the Code of Civil Procedure. 10.4.7 Re~ection of Settlement Offer: If the Board rejects a settlement offer presented pursuant to Section 10.4.5, the Board shall hold a meeting open to each Member. The meeting shall be held no less than fifteen (15) days before the Association commences an action for damages against Declarant. No less than fifteen (15) days before the date of the meeting, a written notice shall be sent to each Member specifying all of the following: (a) That a meeting will take place to discuss problems that may lead to the filing of a civil action; (b) The time and place of the meeting; (c) The options, including the filing of a civil action, that are available to address the problems; (d) The complete text of any written settlement offer and a concise explanation of the specific reasons for the terms of the offer submitted to the Board by Declarant and of any offer by Declarant to submit the dispute to alternative dispute resolution; and (e) The preliminary list of defects contained in the Association's Notice and a list of any other documents with the Association's Notice with information as to where and when Members may inspect those documents. Declarant shall pay all expenses attributable to sending the settlement offer and any offer for alternative dispute resolution to all-Members and an amount-not to exceed three dollars ($3.00) per Member to defray the expenses of holding the meeting. The discussions at the meeting, the contents of the notice and the items required to be specified in the notice are privileged communications and are not admissible in evidence in any civil action, unless the Association consents to their admission. 10.4.8 Association Relieved of Obligations: If the Association is relieved of its obligations to satisfy the requirements of this Section 10.4 before all requirements have been satisfied, the Association may commence an action for damages 10.6 06/20/96 against Declarant thirty (30) days after sending a written notice to each Member specifying all of the following: (a) The preliminary list of defects contained in the Association's Notice and a list of any other documents with the Association's Notice with information as to where and when Members may inspect those documents; (b) The options, including the filing of a. civil action, that are available to address the problems; and (c) A statement that if five percent (5%) of the Members request a special meeting of Members to discuss the matter within fifteen (15). days of the date the notice is mailed or delivered to the Members, a meetin~;-of the Members shall be held. 10.4.9 Failure to ComDlv: The only method of seeking judicial relief for the failure of the Association to comply with this Section 10.4 shall be the assertion, as provided for in this subsection, of a procedural deficiency to.an action for damages by the Association against Declarant after such an action has been filed. A verified application asserting such a procedural deficiency shall be filed with the court no later than ninety (90) days after the answer to the plaintiff's complaint has been served, unless the court finds that extraordina_ry conditions exist. Upon the verified application of the Association or Declarant alleging substantial noncompliance with this Section 10.4, the court shall schedule a hearing within twenty-one (21) days of the application to determine whether the AssociAtion or Declarant has substantially complied with this Section. The issue may be determined upon affidavits or upon oral testimony, in the discretion of the court. (a) If the court finds that the Association did not substantially comply with this Section, the court shall stay the action for up to ninety (90) days to allow the Association to establish substantial compliance. The court shall set a hearing within ninety (90) days to determine substantial compliance by the Association. At any time, the court may extend the period of the stay upon application of the Association if good cause is shown. If, within the time set by the court pursuant to this Section, the Association has not established that it has substantially complied with this Section, the court shall determine if, in the interest of justice, the action should be dismissed without prejudice or if another remedy should be fashioned. Under no circumstances shall the' court dismiss the action with prejudice as a result of the Association's failure to substantially comply with this Section. In determining the appropriate remedy, the court shall consider the extent to which Declarant has complied with..this Section. If the alleged noncompliance of either Declarant or the Association resulted from .the unreasonable withholding of consent for inspection or testing by an Owner, it shall not be considered substantial noncompliance provided that the party alleged to be out of compliance did not encourage the withholding of consent. I.I'I-I'LE & SAPUTO .4 TTO RN k"YS .4 T I...4 I~' 190~ OLYMPIC BOULEVARD, ~I00 WALNUT CREEK, CA 94596-5024 ($1 O) 944-5000 ZO.? 06/20/96 If the Court finds that Declarant did not pay (i) all of the costs of inspection and testing or (ii) its required share of the costs of holding the meeting and of all expenses attributable to sending the settlement offer, all as required -above, the court shall order Declarant .to pay any deficiencies within thirty (30) days, with interest, and any additional remedy which the court determines, in the interest of justice, should be fashioned. 10.5 OPTIONAL LEGAL PROCEEDINGS: The Association is authorized to perform any act reasonably necessary to resolve any civil claim or action through alternative dispute resolution proceedings such as mediation or arbitration proceedings. The Board is also authorized to do all of the following: Provide, or in good faith attempt to provide, one hundred (120) days advance notice of (a) the Board's intent to initiate the prosecution of any civil action and (b) the nature and basis of the claim. If notice is given, it shall be given to every Member and every entity or person who is a prospective party to the action. Notice can be given more than one hundred twenty (120) days prior to the expiration of any pertinent statute of limitations and without prejudice to the Association's right to enforce the Project Documents. Notice need not be given prior to the filing of an action in small claims court or an action solely to enforce assessment obligations; Endeavor to submit the matter to alternative dispute resolution in compliance with the provisions of Section 1354(b) of the Civil Code'prior to initiating the prosecution of a civil action solely for declaratory relief or injunctive relief (a) to enforce the Project Documents or (b) in connection with a claim for monetary damages of five thousand dollars ($5,000.00) or less; Make a reasonable effort, in good faith, to meet and confer with every person who is a party about (a) appropriate processes for resolving the civil action, including available alternative dispute resolution proceedings; (b} appropriate processes for avoiding or reducing costs or losses by the parties associated with the action; (c) providing an opportunity to cure any alleged defect in Common Area which is the basis for the action; and (d) providing for tke scope of discovery, if any, to be conducted prior to the inception of any alternative dispute resolution procedure; Consider diverting the prosecution or defense of any civil action to alternative dispute resolution proceedings such as mediation or arbitration; and Agree to participate, and participate fully and in good faith, in the resolution of any civil action through any alternative dispute resolution proceedings, including but not limited to mediation or arbitration and pay costs reasonably incurred by the 10.8 06/20/96 Association on account of those alternative dispute resolution proceedings. lorl'l'LE & SAPUTO .-{ '/-FOR~VEY$ .4 T/..A V/ lV0l OI.YMPIC BOULEVARD, #100 %VA[.NI.;T CREEK, CA 94596-5024 (510) 944-5000 10.9 06/20/96 ARTICLE XI ARCHITECTURAL CONTROL 11.1 APPLICABILITY: Except as otherwise provided in this Declaration, proposals for Alterations shall be subject to the provisions of this Article and may not be made until approved in accordance with the provisions of this Article. The provisions of this Declaration requiring architectural approvals shall not apply to the original construction of any Improvements by Declarant or Additional Declarant, their agents, contractors or employees nor shall they apply prior to the first conveyance of a Lot to an Owner. The preceding sentence may not be amended without the consent of Declarant and Additional Declarant until all of the Lots in the Project owned By Declarant have.been conveyed. ~11.2 RESERVATION TO DECLARANT: Notwithstanding the power of the Board to appoint committees, Declarant hereby reserves to itself the right to appoint an Architectural Committee in accordance with the provisions of this Article. When there is no longer any Member appointed by Declarant on the Committee, the Board may decide to dissolve the Committee and undertake, the Committee's responsibilities. 11.3 M~MBERS: The Architectural Committee ("Committee") shall consist of a chairman and two (2) or more additional members. Persons appointed to the Committee by theBoard shall be Members of the Association. Persons appointed to the Committee by the Declarant need not be Members of the Association. All members shall serve until the expiration of the term for which they were appointed, if specified by the Board, or until they resign or are replaced. Declarant may appoint all of the original members of the Committee and all replacements until the first anniversary of the issuance of the Public Report for the first Phase of the Project. After the date which is one (1) year from the date of issuance of the Public Report for the first Phase of the Project and until the conveyance of ninety percent (90%) of all Lots or the fifth (5th) anniversary of the issuance of the Public Report for the first Phase of the Project, whichever first occurs, the Board shall have the power to appoint one member of the Committee and Declarant may appoint the remaining members of the Committee. Thereafter, the Board shall appoint all of the members of the Committee or dissolve the Committee as provided in Section 11.2, above. Upon the conveyance of one hundred percent (100%) of all Lots, the term of any remaining members appointed by Declarant shall terminate and replacement members shall be appointed by the Board. The Board may appoint a replacement for any member of the Committee originally appointed by the Board who resigns or otherwise fails to act. Declarant may appoint a replacement for any member of the Committee originally appointed by Declarant who resigns or otherwise fails to act, unless such member resigns in order to enable the Board to appoint a member as required by this Section. If Declarant fails to appoint a replacement it is authorized to appoint within fifteen I.I'I-FLE & SAPUTO . ~ T T O R.~/ EY$ ,4 T ;,4 Fg 1",'01 OLYMPIC BOUL~,tARD, 9100 WALNUT CREEK. CA 94596-5024 ($10) 944-5000 11.1 06/20/96 o ~-. o (15) days after receiving notice of the vacancy, the Board shall appoint the replacement. 11.4 DUTIES: The Committee shall consider and act upon proposals and/or plans submitted pursuant to this Article. The Committee, from time to time and in its sole discretion, may adopt architectural rules, regulations and guidelines ("Architectural Standards"). The Architectural Standards shall interpret and implement the provisions of this Declaration by setting forth the standards and procedures for architectural review and guidelines for architectural design, placement of buildings, color schemes, exterior finishes and materials and similar features which may be used in the Project; provided, however, that the Architectural Standards shall not be in derogation of the minimum standards established by this DEclaration and they shall be consistent with the specific plan and the precise plan then in effect in the City for the Project. The Architectural Standards may include a schedule of reasonable fees for processing submittals and to establish the time and manner in which such fees shall be paid. 11.5 APPLICATION FOR APPROVAL OF IMPROVEMENTS: Any Owner, except Declarant and its designated agents, who wants to perform any Alteration for which approval is required shall notify the Committee in writing of the nature of the proposed work and shall furnish such information as may be required by the Architectural Standards or reasonably requested by the Committee. 11.6 BASIS FOR APPROVAL OF IMPROVEMENTS: The Committee may approve the proposal only if the Committee finds that (i) the plans and specifications conform to this Declaration and to the Architectural Standards in effect at the time the proposal was submitted and (ii) the proposed Alteration will be consistent with the standards of the Project and the provisions of this Declaration as to .harmony of exterior design, visibility with respect to existing structures and environment, and location with respect to topography and finished grade elevation. 11.7 FORM OF APPROVALS AND DENIALS: Ail approvals and denials shall be in writing. Any denial of a proposal must state the reasons for the decision to be valid. Any proposal which has not been rejected in writing within sixty (60) days from the date of submission shall be deemed approved. 11.8 PROCEEDING WITH WORK: Upon approval of the Committee, the' Owner shall diligently proceed with the commencement and completion of all work so approved. Work must be commenced within one (1) year from the date of the approval. If the Owner fails to comply with the provisions of this Section, the approval given shall be deemed revoked unless the Committee extends the time for commencement. Any request for an extension' shall be in writing. No extension shall be granted unless the Committee finds that there has been no change in the circumstances under which the original approval was granted. I.I'I-I'LE & SAPUTO ..I TTORA'E¥S A T LA W 1901 OLYMPIC BOULEVARD, ,9100 WA I.N L'T CREEK, CA 94596-5024 (510) 9a,~-5000 11.2 06/20/96 O o 11.9 FAILURE TO COMPLETE WORK: Completion of the work approved must occur within eighteen (18) months following the approval of the work unless the Committee determines that completion is impossible or would result in great hardship to the Owner due to strikes, fires, national emergencies, natural calamities or other supervening forces beyond the Owner's control. If the Owner fails to complete the work within the eighteen (18) month period, the Committee may notify the Owner in writing of the non-compliance and shall proceed in accordance with the provisions of Section 11.11, below. 11.10 DETERMINATION OF COMPLIANCE: Any work performed, whether or not the Owner obtained proper approvals, shall be inspected and a determination of compliance shall be made as follows: 11.10.1 Notice of Completion: Upon the completion of any work performed by an Owner for which approval was required, the Owner shall give written notice of completion to the Committee. 11.10.2 Inspection: Within sixty (60) days after the Committee's receipt of the Owner's notice of completion, or, if the Owner fails to give a written notice of completion to the Committee within the completion period specified in Section 11.9, above, a designee of the Committee may inspect the work performed and determine whether it was performed and complete~ in substantial compliance with the approval granted. If the Committee finds that the work was not performed or completed in substantial compliance with the approval granted or if the Committee finds that the approval required was not obtained, the Committee shall notify the Owner in writing of the non-compliance. The notice shall specify the particulars of non-compliance and shall require the Owner to remedy the non-compliance. 11.11 FAILURE TO REMEDY THE NON-COMPLIANCE: If the Committee has determined that an Owner has not constructed an Improvement consistent with the specifications of the approval granted or within the time permitted for completion and if the Owner fails to remedy such non-compliance in accordance with the provisions of the notice of non-compliance, then after the expiration of thirty (30) days from the date of such notification, the Committee shall notify the Board, and the Board shall provide Notice and Hearing to consider the Owner's continuing non-compliance. At the Hearing, if the Board finds that there is no valid reason for the continuing non-compliance, the Board shall determine the estimated costs of correcting it. The Board shall then require the Owner to remedy or remove the same within a period of not more than forty-five (45) days from the date of the Board's determination. If the Owner does not comply with the Board's ruling within such period or within any extension of such period as the Board, in its discretion, may grant, the Board may either'remove the non-complying Improvement or remedy the non-compliance. The costs of such action shall be assessed against the Owner as a Reimbursement Assessment. I.I'I-FLE & SAPUTO .-! F/'O RNE'!,'$ .4 T LA 1901 OI.YMPIC BOULEVARD, 9100 WAI.NUT CREEK, CA 0~596-$024 11.3 06/20/96 11.12 WAIVER: Approval of any plans, drawings or specifications' for any work proposed, or for any other matter requiring approval shall not be deemed to constitute a waiver of any right to deny approval of any similar plan, drawing, specification or matter subsequently submitted for approval. 11.13 APPEAL OF DECISION OF COMMITTEE: This Section does not apply if the Board has dissolved the Committee or during the period 'of time that a majority of the Members of the Architectural Committee have been appointed by Declarant. If any Owner who performs an Alteration on a Lot or Residence disputes the jurisdiction or powers of the Committee or any requirement, rule, regulation or decision of the Committee (collectively referred to as "decision"), the Owner may appeal such decision to the Board. The Board shall notify such Owner of the time, date and place of a hearing to'review the decision of the Committee. The notice shall be given at least fifteen (15) days prior to the date set for the hearing and may be delivered either personally or by mail. If delivery is made by mail, it shall be deemed to have been delivered seventy-two (72) hours after it has been. deposited in the United States mail, first class, postage prepaid, addressed to the Owner at the address given by the Owner to the Board for the purpose of service of notices or to the address of the Owner's Lot if no other address has been provided. After the hearing has taken place, the Board shall notify the Owner of its decision. The decision shall become effective not less than five (5) days after the date of the hearing. The determination of the Board shall be final. 11.14 LIABILITY: Neither the Committee nor any member shall be liable to the Association or to any Owner for any damage, loss or prejudice suffered or claimed by reason of mistake in judgment, negligence, or nonfeasance arising out of or in connection with: (a) the approval or disapproval of any plans, drawings and specifications, whether or not defective; (b) the construction or performance of any work, whether or not pursuant to approved plans, drawings, and specifications; (c) the development of any property within the Project; (d) the execution and filing of any estoppel certificate, whether or not the facts therein are correct; or (e) any defect or failure, whether in design, suitability of soils, adequacy of drainage, specifications or construction. 11.15 ESTOPPEL CERTIFICATE: Within thirty (30) days after a determination of compliance is made pursuant to Section 11.10 and written demand is delivered tc the Board by any Owner, and upon paYment to the Association of a reasonable fee (as fixed from time to time by the Association), the Board shall record an estoppel certificate, executed by any two (2} Directors, certifying that as of the date thereof, either: (a) the work completed complies with this Declaration or (b) the work completed does not comply. In the latter situation, the certificate shall also identify the particulars of the non-compliance. Any successor in interest of the Owner shall be entitled to rely on the certificate with respect to the matters set forth. The certificate shall be conclusive as I.I'I-I'LE & SAPUTO .1TTOR.VEY$ ,4 T I..4 ~/ 1¥~: (,I.YMPIC BOULEVARD, ~lO0 WAI.N [.'T CREEK, CA 94596-5024 (sro) 94~.5000 11.4 06/20/96 CD 0 ~-~ ~-. 0 between the Association, Declarant and all Owners and such persons deriving any interest through any of them. 11.5 06/20/96 o o ARTICLE XII ANNEXATION 12.1 RESTRICTION ON ANNEXATION: Property may be added to the Project by annexation only in accordance with the provisions of this Article. 12.2 PROPERTY W~ICH MAY BE ANNEXED; APPROVAL OF MEMBERS: Ail or any portion of the Additional Property may be added to the Project by Declarant or Additional Declarant as one or more subsequent Phases without the approval of the Association or any Owner, if annexed prior to the third (3rd) anniversary of the original issuance of the most recent Public Report issued for a Phase of the Project ("Annexation Period"). Property other than the Additiona~ Property and any portion of the Additional Property not annexed within the Annexation Period may be annexed to the Project only with the approval of two-thirds (2/3rds) of each class of Members. 12.3 PROCEDURE FOR ANNEXATION: In .addition to any required approval by Members, a final subdivision map(s) or final parcel map(s) and a Declaration of Annexation for the property to be annexed must be recorded. The Declaration of Annexation shall: (i) describe the portion of the Additional Property to be annexed; (ii) describe any Common Area within the Additional Property to be annexed; (iii) set forth the ownership of any such Common Area; and (iv) specify that all of the covenants, conditions and restrictions of this Declaration shall apply to the annexed Additional Property in the same manner as if it were originally covered by this Declaration. The Declaration of Annexation shall also provide that if and only if at the time of the first conveyance of a Lot in a Phase Declarant has rented or leased Lots in that Phase for a period of at least one (1) year after the most recent review of a budget for that Phase by the Department of Real Estate, Declarant shall pay to the Association the following amount: an amount equal to that portion of the Regular Assessment which would have been attributable to each Lot in that Phase and which would have been allocable to reserves for replacement and deferred maintenance of Common Area Improvements had Regular Assessments in that Phase commenced at the time of the most recent review of a budget for that Phase. Such amount, if any, shall be paid to the Association prior to or concurrently with the first conveyance of a Lot in that Phase. The Declaration of Annexation may also (i) impose any additional covenants, conditions and restrictions on the Additional Property that are necessary to include the property in the Project and to reflect differences in nature, if any, of the Improvements to be constructed on the Additional Property and (ii) provide for a specified date on which assessments shall commence for Lots in that Phase, provided that the date specified may not be later than the first day of the first month following the month in which the first Lot in that Phase is conveyed to an Owner. No Declaration of Annexation shall diminish the covenants, conditions or restrictions established by this Declaration nor shall it discriminate between 12.1 06/20/96 the Owners in the Project. No Declaration of Annexation shall alter or change the general common plan or scheme created by this Declaration nor shall it affect the provisions hereof as covenants running with the land or as equitable servitudes. 12.4 EFFECT OF ANNEXATION: After complying with the procedures for annexation and upon the commencement of assessments for Lots in the annexed Phase, Owners of Lots in the annexed Phase shall be Members, shall be subject to this Declaration and shall be entitled to use all Common Area in the Project. The Association shall reallocate the Regular Assessments so as to assess each Owner of a Lot in the Project for a proportionate share of the total expenses of the Project. 12.5 DEANNEXATION AND AMENDMENT: Declarant has the right, at its sole option, to (i) amend a Declaration of Annexation by executing and recording an amendment of the Declaration of Annexation provided that the amendment is consistent with this Article, or (ii) remove from the Project any property described in a recorded Declaration of Annexation for .a Phase by executing'and recording a rescission of the Declaration of Annexation, as long as all of the following conditions are satisfied at the time of the execution and recordation of the amendment or rescission: (a) no Lot in that Phase has been conveyed to an Owner; (b) no Common Area in that Phase has been conveyed to the Association; and (c) assessments have not commenced for any Lot in the annexed property. 12.6 AMENDMENT: After the conversion of Class B membership to Class A membership and until the day following the date which is the third (3rd)' anniversary of the original issuance of the most recent Public Report issued for a Phase of the Project, this Article may not be amended without the written consent of Declarant and Additional Declarant unless all of the Additional Property has been annexed to the Project. I.I'I-FLE & SAPUTO ..I TTO RNEYS ,4 T LA ~/ OLYMPIC BOULEVARD, ~100 WALNt.'T CREEK. CA. 94596-5024 ($10) 944-5000 12.2 06/20/96 0 ,-~ 0 ARTICLE XlII MISCELLANEOUS PROVISIONS 13.1 TERM OF DECLARATION: This Declaration shall continue for a term of fifty (50) years from its date of recordation. Thereafter, this Declaration shall be automatically extended for successive periods of ten (10) years until two-thirds (2/3rds) of the Owners approve a termination of this Declaration. 13.2 CONSTRUCTION OF PROVISIONS: The provisions of this Declaration shall be liberally construed to effect its purpose of creating a uniform plan for the development and operation of a planned development pursuant to the provisions of Section 1350, et seq. of the California Civil Code. · ' 13.3 BINDING: This Declaration shall be for the benefit of and be binding upon all Owners, their respective heirs, legatees, devisees, executors, administrators, guardians, conservators, successors, purchasers, tenants, encumbrancers, donees, grantees, mortgagees, lienors and assigns. 13.4 SEVERABILITY OF PROVISIONS: The provisions hereof shall be deemed independent and severable, and the invalidity or unenforceability of any one provision shall not affect the validity or enforceability of any other provision hereof. 13.5 GENDER, NUMBER AND CAPTIONS: As used herein, the singular shall include the plural and masculine pronouns shall include feminine pronouns, where appropriate. The title and captions of each paragraph, hereof are not a part thereof and shall not affect the construction or interpretation of any part hereof. 13.6 REDISTRIBUTION OF PROJECT DOCUMENTS: Upon the resale of any Lot by any Owner, the Owner shall supply to the buyer of the Lot a copy of each of the Project Documents. 13.7 EXHIBITS: Ail exhibits attached to this Declaration are incorporated by this reference as though fully set forth herein. 13.8 REOUIRED ACTIONS OF ASSOCIATION: The Association shall at all times take all reasonable actions necessary for the Association to comply with the terms of this Declaration or to otherwise carry out the intent of this Declaration. 13.9 SUCCESSOR STATUTES: Any reference in the Project documents to a statute shall be deemed a reference to any amended or successor statute. I.I'['I'LE & SAPUTO ..~ T'I'ORNEY$ A 2' LA P/ I~0; OI.YMPIC BOULEVARD. ~100 WALNUT CREEK, CA 94596-5024 (51 O) 944-$00~ 13.1 06/20/96 to o t- o 13.10 CONFLICT: In the event of a conflict, the provisions of this Declaration shall prevail over the Bylaws and the Rules. IN WITNESS WHEREOF, the undersigned have executed this Declaration on the day of , 1996. DECLARANT: CENTEX REAL ESTATE CORPORATION, a Nevada corporation ADDITIONAL DECLARANT: By: Name: Title: SUNCHASE G.A. CALIFORNIA I, INC., a California corporation By: Name: Title: OWNERSHIP CONSENT The "undersigned is the record fee owner of a portion of the Additional ProPerty. The undersigned hereby consents to the execution and recordation of the Declaration and agrees that upon recordation of a Declaration of Annexation in accordance with Section 11.3 of this Declaration, the Additional Property owned by the undersigned and described in such Declaration of Annexation shall be bound by the Declaration to the same extent and with the same force and effect as though initially included within the Subject Property. Dated: , 1996 COMMONWEALTH LAND TITLE COMPANY, a California corporation Dated: , 1996 By: Name: Title: I.I'I-I'LE & SAPUTO .4 T'fORN~=Y$ AT 1.4 Mr 1901 OLYMPIC BOULEVARD, ~IO0 %V..XI. NUT CREEK. CA 94596-5024 (510) 944-5000 13.2 06/20/96 I ~) o'~ o ~.~ O State of California County of On , 199 , before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public State Of California county of on , 199 , before me, · personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public I.I'I-¥LE & SAPUTO ..! TT O R,¥ E¥$ AT LAW 1901 OLYMPIC BOULI~VARD. ~100 WALNUT CRI~I~K, CA 94596-5024 (51 O) 944-~000 13.3 06/20/96 O o State of California County of ) ) ss. ) On , 199 , before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) ~is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his~her~their· authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public I.I'FTLE & SAPUTO .-I FTORNE¥$ .4 T I..A It/ 1901 OLYMPIC BOULEVARD, ~I~0 WAI.NUT CREEK. CA 94596.5024 (510) 9~-5000 13.4 06/20/96 A EXHIBITS Description of Additional Property (Section 2.2) Maintenance Responsibility Table (Article V) Collection Agreement (Section 6.10) Maintenance Plan (Section 5.1.2) 13.5 06/20/96 %O O O EXHIBIT "A " Terrabay Park [Legal Description of Additional Property] Ail the real property located in the City of South San Francisco, County of San Mateo, State of California, described as follows: PARCEL ONE: Lots 212 through 217, inclusive, and 237 through 325, inclusive, as shown on the subdivision map of Terrabay, filed for record on July 2, 1990, in Book 121 of Maps at Page 65 et seq., in the Official Records of the County of San Matzo, State of California. PARCEL TWO: Lots 327, 330, 338, 340 through 359, inclusive, 361 through 367, inclusive, 373, 374, 376, 377, 379, 381 through 383, inclusive, and 386, as shown on the subdivision map of Terrabay, filed for record on July 2, 1990, in Book 121 of Maps at Page 65 et seq., in the Official Records of the. County of San Mateo, State of California. TERRABAY PARK MAINTENANCE RESPONSIBILITY TABLE ITEM RESPONSIBLE PARTY MASTER ASSOCIATION SUBASSOCIATION OWNER GENERALLY: Master Association Common Area Yes No No Subassociation Common Area No Yes No SPECIFIC IMPROVEMENTS: rainage (including subdraip, s): Must e insnected and maintainecl ih accordance with Maintenance Plan Master Association Common Area Subassociation Common Area or on an unenclosed portion of a Lot Within enclosed portions of Lot Driveways and walkways No All No Fences (including retaining wails) Master Association Common Area, hClUdipg pe.r~..eter ereot { exc~ucnng surface facing away from Master Association Common Area) Subassociation Common Area, excluding perimeter thereof (but including surface fficing Subassociation Common Area) . Party Fe, nces., e,.xpense ~area qy adjoining owners) 2.. R.etaining Wails which are not a arty Fence (qach wrier maintains portion on their own Lot) 3. Lot perimeter fences and walls (ex~clu.din[ . sur[acang lacing Common Area) Homes: Must be maintained in accordance with standards established in Section 5.3 of the Terrabay Single Family Subassociation Declaration or in Rules No No All Landscapin. g and Irrigation: .M. ust be maintaix/ea m accoraance w~t~a standards established ih Section 5.6 of the Terrabay Master Declaration or in Rules Master Association Common Area Subassociation Common Area and unenclosed portions of Lots Within enclosed portions of Lots Lighting No Within Subassociation Common Area Within Lots Parking Areas No All No Sanitary Sewers No Main lines except to ext.ent of public maintenance Laterals Traffic Control Devices No Subassociation Common No Area If a.ny Improvement required to be maintained by the Master Association or the Subassociation is damaged, by the n.eglfgence or willful conductor an Owner or an Owner's [nvitee, the p..a~, responsible for performance of ttze rep. air shalFnot be shifted; however, the Master Association or the SubaSsociation, as the case mav T~e, shall be entitled to levy a Reimbursement Assessment to recover its costs as provided in Section 6.4 of the Dec?aration. I.I'I-I'LE & SAPUTO · .I TTORN~I'$ A T LA W DOt OI.YMPIC BOULI~VARD, ~100 WAI.NUT CREEK, CA 94596-5024 (510) 944°5000 Exhibit "B" 0 6 / 2 0 / 9 6 o 0 o RECORDED AT TIlE REQUEST O!,': WltEN RECORI)EI) RETURN TO: COLLECTION AGREEMENT between the SAN BRUNO MOUNTAIN AREA HABITAT CONSERVATION TRUST and TERRABAY SINGLE FAMILY SUBASSOCIATION (TERRABAY PARK) THIS COLLECTION AGREEMENT ("Agreement") is made effective as of thc Effective Date by and among the Trustees of the SAN BRUNO MOUNTAIN AREA HABITAT CONSERVATION TRUST ("HCP Trust"), SUNCHASE G.A. CALIFORNIA I, INC., a California corporation, and CENTEX REAL ESTATE CORPORATION, a Nevada corporation, (collectively "Landowners") and TERRABAY SINGLE FAMILY SUBASSOCIATION, a non-profit mutual benefit corporation incorporated under the laws of the State of California ("Association"). RECITALS: 1. Each of the parties enters into this Agreement in recognition of the following facts: A. The 10(a) Permit issued by the United States Fish and Wildlife Service to the County of San Mateo, California, and the Cities of Brisbane, Daly City and South San Francisco, California, under which Landowners are authorized to build a residential housing project, including other related uses, known as "Terrabay" in the City of South San Francisco, requires that there be a permanent funding source for habitat preservation and that requirement must be met. B. The Trustees of the HCP Trust, the Association and Landowners have determined that it is in the best interests of both the HCP Trust and the future owners of single family Units in Terrabay Park that during such periods as the funding source set forth in Article VI.A.2. of the HCP Agreement is operative, that the payments of the HCP Assessments to the HCP Trust by individual Unit Owners who are members of the Association be made through the Association acting as collection agent on behalf of the HCP Trustees pursuant to this Agreement. 2. Definitigns: For the purpose of this Agreement, the following capitalized terms shall have the following meanings: 2.1 Effective Date: The term "Effective Date' means thc date on which the last party to sign this Agreement signs the same as evidenced by the date opposite the signatures of the parties hereto. ! 05/30/96 LI'I'I'LE & SAPUTO A TTORN~'t'$ A T L.~ w . .- lo01 OLYMPIC BOULEVARD. t 100 WALNUT CRI~EK. CA 94596-5014 mo) 9,,4ooo Page 1 of 6 Exhibit "C" 2.2 HCP At~rccmcnt: The term "l-ICl' Agreement" means thc "Agreement With Respect '1'o Thc San Bruno Mountain Area Habitat" entered into as of thc 4th day of March, 1983, by and among thc United States Fish and Wildlife Service, California Department of Fish and (;amc, Calil'ornia Departmcn! of I'arks and Recreation, thc County of San Malco, thc City of Brisbane, thc City of Daly City, thc City of South Still Fr~,ncisco, Visitacion Associates, and others as scl forth on Exhibit "A" thereto, and any amendments thereto, recorded March 22, 1983, Series Number 83026.343, Official Records of San Malco County. 2.3 HCP Assessment: The term "HCP Assessment" means thc assessments levied by thc HCP Trust pursuant to the HCP Declaration. 2.4 HCP Declaration: Thc term "HCP Declaration" means thc Declaration of Covenants and Restrictions on Real Property on San Bruno Mountain recorded on , 1996, in thc Official Records of San Mateo County, State of California, as Document No. , pursuant to thc requirement of Article VI.A.2 of the HCP Agreement. 2.5 Proi~ct: The term 'Project' means the portions of the Terrabay Park project created pursuant to the Project Declaration. 2.6 Project Declaration: The term "Project Declaration' means the Declaration of Covenants, Conditions and Restrictions of Terrabay Park recorded or to be recorded in the Official Records of San Malco County, State of California. 2.7 Trust Account: The term 'Trust Account' means the trust account referred to in Paragraph 3 of this Agreement. 2.8 Trust Account Reserve: The term 'Trust Account Reserve' or 'Reserve" means the reserve referred to in Paragraph 3.2 of thi.q Agreement. 2.9 Unit Owners: Thc term 'Unit Owner' means thc Owner of a single family Unit in the Project. 2.10 Other Capitalized Terms: Any other capitalized term contained in this Agreement, unless the context clearly indicates a different meaning, shall have the meaning given to it in the HCP Agreement if such term is defined therein, or the meaning given it in the Project Declaration if such term is defined therein, provided that where a term is used ia both the HCP Agreement and the Project Declaration, such term shall have the meaning given it in the HCP Agreement. 3. Trust Account. 3.1 Establishment of Trust Account: Prior to close of escrow for the sale of the first Unit in the Project, the Association shall open an interest bearing trust account with a bank or savings and loan association insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, as the case may be, to be called the "HCP Terrabay Park - San Bruno Mountain Area Habitat Conservation Trust Account." The Trust Account shall be established and maintained by the Association for the benefit of the HCP Trustees, and funds shall be withdrawn therefrom by officers of the Association only for the benefit of the HCP Trust in accordance with Paragraph 6.10 of the Project Declaration and the terms of this Agreement. 3.2 Trust Account Reserve: The Association acknowledges that the HCP Trustees intend that the Trust Account shall constitute, in part, a reserve fund against potential future delinquencies by Unit Owners in the payment of the HCP Assessments and that the HCP Trustees desire to maintain a balance in the Trust Account in an amount equal to 25% of the total annual HCP Assessments for Units in the Project (as adiustcd to reflect changes in the value of the Dollar) as set forth in the most recent notification from the HCP Trustees pursuant to Paragraph 5 hereof CReserve Amounff). The HCP Trustees acknowledge, however, that the Reserve Amount may drop below 25% when occasioned by payments therefrom to the HCP Trust of amounts 2 05/30/96 t.rt-r~.n & s,x~'u'ro A TTORNI-"t'$ .4 T LA F/ . , 1901 OLYMPIC BOULEVARD, t I00 ~,tAI.N[JT CREEK. CA 9.~596-5024 {s~0) 9~.s000 Page 2 of 6 Exhibit "C" representing delinquencies in Iwymcnls {Il' thc I'ICI' Assessment by Unit Owners. In thc cvcm thc balance in thc Trust Account at any time is less than thc Reserve Amount, thc Board of thc Ass~ci;ttitm shall nolil~ thc HCP Trustees and annually on ()ctobcr I in any event, thc Board of thc Asst~ciatitm shall I'urnish to thc I ICP Trustees all staterooms prepared by thc tlcpositt~ry showing all actiGty in thc Trust Account during thc preceding year and thc current Trust Account balance. 3.3 Landowners Fundintt ol' Reserve Amount: Prior to or concurrently with cl~sc of escrow for Landowners's sale of the first Unit in the Project, Landowners shall deposit in the Trust Account an amount equal to $ representing the initial Reserve Amount, being 25% of the total annual IICP Assessments which would be levied against the total number of Units planned in the Project at the rate of $__ per Unit per annum. After such deposit has been made, Landowners shall have fully performed its obligations under this Agreement and Landowners shall have m) further obligations of any kind or nature under this Agreement. Notwithstanding thc foregoing, Landoxvners shall remain obligated to perform its separate obligations, if any, as a Landowner under thc HCP Agreement and to pay assessments levied pursuant to the terms of the Project Declaration and the HCP Declaration to the extent it is a Unit Owner in the Project. 3.4 HCP Assessment for Reserve: If after its initial funding by Landowners pursuant to Paragraph 3.3 above, the balance in the Trust Account at any time is less than the Reserve Amount, the HCP Trustees shall add to the HCP Assessment as otherwise determined pursuant to the HCP Declaration an amount not to exceed 25% in any one year until the Reserve Amount is reestablished. Whenever thereafter the HCP Trustees learn that the Reserve Amount has been reduced below the level established hereinabove, the HCP Trustees shall include an amount in the next HCP Assessment sufficient to restore the Reserve Amount to such level. In making the calculations for this purpose, the HCP Trustees may include a reasonable projection of the delinquency factor in the making of payments of the HCP Assessment. 4. Notice of HCP Assessment: Collection of HCP Assessments: On or before October 1 of each year the HCP Trustees shall give notice in writing to the Board of the Association of the amount of the next year's HCP Assessment as adjusted in accordance with the terms of the HCP Declaration to reflect changes in the value of the Dollar and as augmented by the amount, if any, determined by the Trustees to be necessary to set or maintain the Reserve Amount in the HCP Trust Account at the Reserve Amount established in Paragraph 3.2 hereof. On or before October 10 of each year, or such other date or at such more frequent intervals as the HCP Trustees in writing may designate, the Board of the Association shall give notice in writing to each Unit Owner subject to the HCP Assessment, of the amount of his, her or its assessment as set forth in such notice from the Trustees. Thereafter, the Association shall collect the amount of the HCP Assessments from Unit Owners pursuant to the collection authority contained herein and shall deposit ali HCP Assessments so collected in the Trust Account. 5. Payment to HCP Trust: On or before November 10 of each year or such other date or at such more frequent intervals as the HCP Trustees in writing may designate (provided such earlier designation corresponds to the earlier levy of assessments pursuant to Paragraph 4, above), the Board of Association shall pay or cause to be paid from the Trust Account to the HCP Trust in accordance with this Agreement so much of the funds in the Trust Account as shall be required to meet the lawful demands of the HCP Trust as established in the HCP Declaration. From the Reserve Amount the Association shall pay the HCP Assessment of any Unit Owner or Unit Owners who have failed to currently pay the HCP Assessment. If the Reserve Amount in the HCP TrUSt Account is not sufficient to pay the amount of all delinquent HCP Assessments in full, if any, the Bom'd of the Association shall immediately notify the HCP Trustees. Thc Association shall have no responsibility to pay any deficiency in HCP Assessments from the Association's own funds so long as the Association's obligations under this Agreement have been met. 6. HCP Assessment Lien: In every case where the Association has caused payment to be made to the HCP TrUst from the Reserve Amount for any Unit Owner who is delinquent in making payment of his, her or its HCP Assessment, the Association thereby and thereupon shall be empowered to enforce the lien for delinquent assessments conferred upon the HCP Trust by the HCP Declaration, and the Association, as LII'I'LE & SAPUTO ,4 TTORN~'$ .4 T l-4 Bt I¥Ol OLYMPIC BOULEVARD, 4[ IOO ~.VA I..~ UT CR ~EK. CA 94596-5024 (~lO) 94,4-5000 3 05/30/96 Page 3 of 6 Exhibit "C" O~ 0 collection agent under this Agreement, shall bc entitled to recover all altorncys' l'ces, costs and expenses incurred by it in accordance with thc pro~sions of thc 14CP Declaration. This Agreement shall constitute a COmlfiCtc delegation of authority from the HCP Trustees to thc Board of thc Association to cnlk~rce thc IICI' Declaration lien against the Unit of any delinquent Unit Owner lo the full extenl of thc payment or paymcnls Iht Associalion has made to the HCP Trust from thc Reserve Amount, and no further action by thc HCI' Truslccs is required to perfect such authority in the Board of thc Association. 7. Amendment: This Agreement can bc amended only by a writing executed by all of thc parties hereto, provided that Landowners and its assigns or successors in interest shall cease to be a party for any purpose when the Trust Account has been funded as provided in Paragraph 3.3. 8. Alternate Financing of HCP: If financing of habitat conservation under.thc HCP Agreement is hereafter provided by an assessment or other tax collection mechanism by which an amount equivalent to thc HCP Assessment must be paid directly by Unit Owners to the County or a City incident to the collection ol' taxes as envisaged in Article VI.AA. of the HCP Agr6ement CAlternative Financing"), then the obligations created by this Agreement shall cease and remain dormant until such time, if ever, as the Alternative Financing method becomes inoperative. The HCP Trustees shall notify the Association of the nature of the Alternative Financing that has been adopted, the date or dates on which the rights and duties of the parties to this Agreement shall, until further notice, cease and the terms of the transfer of the balance in the HCP Trust Account to the County (or other entity conducting the Alternative Financing assessment proce, edings) to be applied by it against the first, and if sufficient funds remain, subsequent years' assessments. 9. Covenants to Run With Land: Without limiting the legal effect of other provisions of this Agreement, the parties declare it to be their intention that the rights and duties established by this Agreement are intended to implement the 10(al Permit, the Project Declaration, the HCP Agreement and the HCP Declaration, and as such shall run with the land and be binding upon and inure to the benefit of their respective assigns or successors in interest. This Agreement affects the title of the lands within the Project and of thc Conserved Habitat of the San Bruno Mountain Area, as defined in the HCP Agreement, and the covenants and conditions herein relate to the benefidai use and enjoyment of all such lands. The provisions of this Agreement shall benefit and shall be binding upon each of the parties hereto and their respective successors in interest. /.0. Miscellaneous Provisions: 10.1 No Fee for Services: The Association acknowledges that this Agreement provides the Unit Owners with a convenient and efficient mode of collection of the HCP Assessment, and therefore the Association agrees that it will perform the collection service provided for herein without fee and that it shall receive no compensation or reimbursement from the HCP Trust for the performance of its duties hereunder except for costs and attorneys' fees authorized under Paragraph 6 hereof. 10.2 Termination of Agreement: The HCP Trustees may terminate this Agreement by providing notice of the intention to do so in accordance with the provisions of paragraph 10.3 hereof. Termination of the Agreement shall be effective thirty (30) days after notice is given. Upon termination of the Agreement, the Associatibn shall dctiver to the HCP Trustees any books and other records relating to thc collection of HCP Assessments under this Agreement, and shall remit to the HCP Trust any and all funds that thc Association is then holding for the benefit of the HCP Trust. Upon termination of the Agreement, thc Association shall have no further duty to collect HCP assessments. 10.3 Notices: Notices provided for herein may be personally delivered to the person occupying thc position set forth below or shall be deemed given five days after deposit in the United States mail, certified and postage prepaid, return receipt requested and addressed as follows, or to such other address of which a party from time to time may give notice to the other parties: 4 05/30/96 LI'I-I'LE & SAPUTO ,4 TTORN~t'$ A r 1,4 W . - 1901 OLYMPIC BOULI~VARD. g 100 X~A LN UT CR E[~K. CA 94596-50~4 (s~0~ ~,.s0~ Page 4 of 6 ~bit "C" 0 0 HCP: San Bruno Mountain Ama Habitat Conservation Trust c/o San Marco County Director of Environmental Sauces County Government Cch{er Redwood City, ~ Sunchase G.A. California I, Inc., 6(X)l N. 24th Street, Suite A Phoenix, AZ 85016 Attn: Director of Legal Services and Centex Real Estate Corporation 1855 Gateway Blvd., Suite 650 Concord, CA 94520 Attn: Association: Terrabay Single fiamily Subssociation c/o Centex Real Estate Corporation 1855 Gateway Blvd., Suite 650 Concord, CA 94520 Attn: President 10.4 Agreement to be Recorded: This Agreement shall be recorded in the Official Records of the County Recorder, County of San Mateo, State of California. 10.5 Costs of Litigation: If legal action is required to interpret or enforce this Agreement, the prevailing party shall be entitled to recover its attorneys' fees and costs of litigation. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth opposite their respective signatures. SAN BRUNO MOUNTAIN AREA HABITAT CONSERVATION TRUST Dated: ,1996 By: Trustee Trustee Trustee I.ITTLE & SAPUTO A 'I-I'ORNfi'}'$ .4 r I..,4 I¥ 1901 OI.YMPIC BOULEVARD, ~ 100 WALNUT CRI-~EK. CA 94596-5024 (510) 0aa.S000 Trustee 5 Page 5 of 6 05130[96 Exhibit "C" 0 0 Daled: , 1996 SUNCI4ASE G.A. CALIF()RNIA I, INC., a California corporation By: Name: Titlc: CENTEX REAL ESTATE CORPORATION, a Nevada corporation Dated: · 1996 By: Name: Title: Dated: ,. 1996 TERRABAY SINGLE FAMILY SUBASSOCIATION, a California nonprofit mutual benefit corporation By:. President Dated: · 1996 By: Secretary L. IT'FLE & SAPUTO A TI'OI~'e~'V$ .4 T 1901 OLYMPIC BOULEVARD, t 100 (510) 6 05/30/96 Page 6 of 6 Exhibit "C" t~ COMMON AREA AND LOT MAINTENANCE PLAN FOR TERRABAY SUBASSOCIATIONS. Page 1 of 4 Exhibit "D' o o .-'cea dramq ae :ypicallv made cf 4 to 6-inch ~21a;fic pipe :md ace ora:-'~ la ~ '"'~< .... ' arom~d buiidin~s, and, go~sibly, on thc uphill -' ~- ' ~,-~,~.,~ * · beea provided to collect ~off kom roof lc~e~, ~d ca~nen beans ~nd swa!,~. Th: ability · esc &ains to c~ ~offaway Rom thc slopes to ~e larger do,~ns~c~ storm drain system css~fial for slope erosion proration. Maintcaanc: tasks required to k¢¢p Otc area alta/ns operationa.I include th: £o[!owing: · Flush all lines once every three years with a sewer ball. This cle,ming should be sufficient to remove s,dimcnt buildup and root intrusion. Periodic monitoring of the soil moist'are content in the la.nd$caped area should be performed ~o establish the proper wale. ting cycle. Excessive water buildup on slope may cause desmbilizafion and should be avoided. Shutoff and isolation valves, as ,hown o- the "As-Built" drawings and indicated by field marker posB, should be exorcised annually to insure proper operation during emergencies. WAYJ:.R SFoRVlCES AND SEW~.R L_AYE. RALS Each indi',,idual unil is provided ~.'ith a water and sewer ~er~ice lateral. It is imperar.ive that these scrvic,¢$ don't leak and produce slope e. rosion. The required maintcr, a",ce consist, of tiao following The Horn:owners Association shall inco .rporate into its landscape m:fi. atenanco program schedule to review the water services anti s:'~,.'cr la~.e:--~s for leakage on a bi-apa'mal basis. Vcg~.tion adjacent to water meters, water shut-off valves a.ad sanitary gc,a'er cleanouls shoulci be pomcd annually or as required to allow ca~ acc:ss to facilities during emergcacies. Page 2 of 4 Exhibit "D" bills and check: :a' c×cc~siv¢ly hi{;h cons 'tm~ptioa. Above average water indkativc et' a s:- .:~m leal,:. · Clear all &;fin id:ts prior to thc onset ofwintar, and inspect ~¢m periodically tlxough the winter. Inspect thc surf:,:,:- ovzr nil lincs annunlly for depressions. Surface depression ovcr thc pipc indicates ei;.her ~ :'¢nch fdlure, or uhat thc under~ound pipe may bo broken or fractmcd. Allowing u,'atcr to pond in thc depression will worsen u"io problem. The section of pipe under thc depression sheuld bc excavated, inspected for cra'ks, and repl,ced if structtaal damage is found. LANDSCAPI:- SPRINKLEI~oqY$IEMS Sprinkler systems M~-'e b.'eh provided for the purpose of irrigation of tho landscaping. If thc sprinkler pipes ~o b~kcn or leak, or ovcr-irri§arc, they will deposit water abo¥c and below thc ground causing crosicn ~nd slope failure on the slopes below. Maintenance tas'ks required to keep thc sprinkler sy~ems operating correctly, which should be p-..rformcd by tko la.,-.cisczp: contractor, ii'fcludc the following: · Operate and iaspe~ all sprinkler systems on a monthly basis and adjust thc sysmms as necessary '.o en_s'.:z~ :',o ovor4rrigation. · Opera: ~,n.5 insT.:et ail sprinklers on ~ monthly ha:is ~nd .mane la. ndsc~ping that inte..rfc-re~ ,,~ith thc fr:: fie'~-' ofwatcr from thc sprinkI~ heads. inspect 0-~e s,.a~,_.:~- or'ct each underground sprinkler pipe on ~ monthly basis for surface depressions aad c:2'~;r indications of breaks or fractmcs and repair as aec, cssary. Page 3 of 4 Exhibit "D" 0~ o ,-~ o section. A concrete valley guaer is placed ~t thc Iow point in ~off w ~dergro~d &ai~ge hcilitics. Thc ~phMr paving must ~so bc seepage into ~d ~dcrmi~ng of~e subgrade. Maintenance tasks required to keep thc pavement and valley gutters in good condition include tho following: Inspection oft. he v~lley gutters for crack& vegetatio~ and sig~ of pending should bc performed annuatty. All cracks should be routed and filled with a crack s.ealer, and any vegetation should be removed. A herbicide should be applied to all cracks prior to sealing. A qualified engineer should evaluate the pavement every five years, and recommend thc required maintenance. Page 4 of 4 Exhibit "D" CONSENT AND SUBORDINATION ("Lender"), is the beneficiary under that certain Deed of Trust ("Deed of Trust"), executed by , recorded on , 19 , Series No. County Records.. Lender hereby consents to 'the execution and recordation .of the Declaration of Covenants, Conditions and Restrictions of Terrabay Park, recorded concurrently herewith as Series No. San Mateo County Records ("Declaration") and does hereby subordinate the lien of the Deed of Trust to the Declaration to the same extent and with the same force and effect as if the Declaration had been executed and recorded prior to the execution and recordation of the Deed of Trust. Executed this Lender: day of , 19 By: Name: Title: State of California County of On , 199 , before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public o O RECORDED AT THE REQUEST OF: EXHIBIT A TO RESOLUTION NO. 112-96 WHEN RECORDED RETURN TO: DECLARATION OF CO.VENANTS CONDITIONS AND RESTRICTIONS OF TERRABAY VILLAGE A Common Interest Development LITTLE & SAPUTO A .'~TOR2s'~-YS A T 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA. 94596-5024 (510) 9S~-5000 0'~ 0 0 INDEX TO DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF TERRABAY VILLAGE A Common Interest Development INTENTION OF DECLARATION ............................................. 1.1 1.1 FACTS ........................................................... ]..1 1..1.1 Property Owned by Declarant ..................................... 1.1 1.1.2 Nature of Project .............................................. 1.1 1.1.3 Phases of Project .............................................. ]..1 1.1.4 Master Declaration ............................................. 1.2 1.2 APPLICABILITY OF RESTRICTIONS .................................. 1.2 II DEFINITIONS ............................................................. 2.1 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 -2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 ADDITIONAL CHARGES ........................................... 2.1 ADDITIONAL PROPERTY .......................................... 2.1 ADDITIONAL DECLARANT ......................................... 2.1 ALTERATION .................................................... 2.1 ARTICLES ....................................................... 2,1 ASSOCIATION .................................................... 2.1 BOARD .......................................................... 2.1 BUDGET ......................................................... 2.2 BYLAWS ......................................................... 2.2 CITY ............................................................ 2.2 COMMON AREA .................................................. 2.2 COUNTY ........................... ............................. 2.2 DECLARANT ..................................................... 2.2 DECLARATION ................................................... 2.2 DECLARATION OF ANNEXATION ................................... 2.2 FIRST MORTGAGE ................................................ 2.2 FIRST MORTGAGEE ............................................... 2.2 HABITAT CONSERVATION PI.AN .................................... 2.2 IMPROVEMENTS .................................................. 2.3 INVITEE ......................................................... 2.3 LOT ............................................................. 2.3 MAP ............................................................ 2.3 MASTER ASSOCIATION ............................................ 2.3 MASTER ASSOCIATION COMMON AREA ............................. 2.3 MASTER DECLARATION ........................................... 2.3 MEMBER ............ ~ ........................................... 2.4 MORTGAGE ...................................................... 2.4 MORTGAGEE .................................................... 2.4 NOTICE AND HEARING ............................................ 2.4 OWNER ......................................................... 2.4 PARTY WALL .................................................... 2.4 PHASE .......................................................... 2.4 PLAN OPERATOR ................................................. 2.4 LITTLE & SAPUTO .4 ~/'O~A'E'Y$ A ~' L.4 ~ 1901 OLYMPIC BOUL~ARD, ~100 WALNUT CR~ ~ 9459~5024 -i- 06/20/96 0 D' 2.34 2.35 2.36 2.37 2.38 2.39 PROJECT ........................................................ 2.4 PROJECT DOCUMENTS ............................................ 2.4 PUBLIC REPORT .................................................. 2.4 RESIDENCE ...................................................... 2.4 RULES .......................................................... 2.5 SUBJECT PROPERTY .............................................. 2.5 III IV OWNERSHIP AND EASEMENTS ............................................. 3.1 3.1 NON-SEVERABILITY ............... . ................................ 3.1 3.2 OWNERSHIP OF LOTS .............................................. 3.1 3.3 OWNERSHIP OF COMMON AREA .................................... 3.1 3.4 OWNERSHIP OF PARTY WALLS ..................................... 3.1 3.5 EASEMENTS ..................................................... 3.1 3.5.1 3.5.2 3.5.3 3.5.4 3.5.5 3.5.6 3.5.7 3.5.8 3.5.9 3.5.10 3.5.11 3.5.12 3.5.13 3.5.14 3.5.15 3.5.16 Easements On Map ............................................ 3.1 Easements For Common Area .................................... 3.2 Master Declaration ............................................. 3.2 Easements for Master Assodation . .. ................................ 3.2 Easements Over Master Association Common Area ..................... 3.2 Additional Easements ........................................... 3.2 Party Walls ................................................... 3.2 Utilities ......................... ' ............................ 3.2 Storm Drains ................................................. 3.2 Encroachment ................................................. 3.3 Support, Maintenance and Repair .................................. 3.3 Easement to Governmental Entities ................................. 3.3 Association's Easements ......................................... 3.3 Additional Easements ........................................... 3.3 Easement For Adjoining Property .................................. 3.4 Annexation of Additional Property .................................. 3.4 USES AND RESTRICTIONS ................................................. 4.1 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 ALTERATIONS .................................................... 4.1 ANIMALS ........................................................ 4.1 ANTENNAS ...................................................... 4.1 EXTERIOR LIGHTING ............................................. 4.1 INVITEES ........................................................ 4.1 MASTER DECI..ARATION ........................................... 4.1 MINERAL EXPLORATION .......................................... 4.1 PARKING ........................................................ 4.2 RENTAL OF LOTS ................................................. 4.2 RULES .......................................................... 4.2 SIGNS ........................................................... 4.2 4.11.1 Declarant .................................................... 4.3 4.11.2 Legal Proceedings .............................................. 4.3 4.11.3 Project Identification ............................................ 4.3 4.11.4 Sale or Rent .................................................. 4.3 4.11.5 Signs Approved By Board ........................................ 4.3 STORAGE OF WASTE MATERIALS ................................... 4.3 USE AND OCCUPANCY OF RESIDENCES ............................. 4.3 USE OF COMMON AREA ........................................... 4.3 V MAINTENANCE, REPAIR AND RECONSTRUCTION OF IMPROVEMENTS .......... 5.1 5.1 MAINTENANCE OF COMMON AREA ................................. 5.1 LITTLE & SAPUTO 1901 OLYMPIC BOULI::VARD, ~'100 WALNUT CRE£K. CA 94596..5024 (510) 9~-5000 -ii- 06/20/96 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.1.1 Generally .................................................... 5.1 5.1.2 Slope and Drainage Maintenance ................................... 5.1 5.1.3 Maintenance Manual ............................................ 5.1 5.1.4 Regular Inspections ............................................. 5.1 5.1.5 As-Built Plans ................................................. 5.2 ALTERATIONS TO COMMON AREA .................................. 5.2 5.2.1 Approval .................................................... 5.2 5.2.2 Funding ..................................................... 5.2 MAINTENANCE OF LOTS AND RESIDENCES .......................... 5.2 5.3.1 Residence Exteriors and Foundations ................................ 5.2 5.3.2 Decks and Railings ............................................. 5.2 5.3.3 Exterior Lighting ............................................... 5.2 5.3.4 Slope and Drainage Maintenance ................................... 5.3 ALTERATIONS TO LOTS AND RESIDENCES ........................... 5.3 MAINTENANCE AND REPAIR OF FENCES AND WALLS ................. 5.3 5.5.1 Party Walls ................................................... 5.3 5.5.2 Fences ...................................................... 5.4 5.5.3 Retaining Wails ............................................... 5.4 LANDSCAPING ................................................... 5.4 5.6.1 Association .................................................... 5.4 5.6.2 Owners ...................................................... 5.4 RIGHT OF MAINTENANCE AND ENTRY BY ASSOCIATION : ............. 5.4 DAMAGE AND DESTRUCTION ...................................... 5.4 5.8.1 Bids ........................................................ 5.5 5.8.2 Sufficient Proceeds ............................................. 5.5 5.8.3 Additional Special Assessment ..................................... 5.5 5.8.4 Alternative Reconstruction ....................................... 5.6 5.8.5 Purchase of Lots of Affected Owners ................................ 5.6 CONDEMNATION OF COMMON AREA ............................... 5.7 VI FUNDS AND ASSESSMENTS ................................................ 6.1 6.1 COVENANTS TO PAY .............................................. 6.1 6.1.1 Liability for Payment ............................................ 6.1 6.1.2 Funds Held in Trust ............................................ 6.1 6.1.3 Offsets ...................................................... 6.1 6.2 REGULAR ASSESSMENTS .......................................... 6.1 6.2.1 Payment of Regular Assessments ................................... 6.1 6.2.2 Allocation of Regular Assessments ................................. 6.2 6.2.3 Exemptions from Regular Assessment ............................... 6.2 6.2.4 Non-Waiver of Assessments ...................................... 6.2 6.3 SPECIAL ASSESSMENTS ............................................ 6.3 6.4 REIMBURSEMENT ASSESSMENTS ................................... 6.3 6.5 INCREASE LIMITATIONS ........................................... 6.3 6.5.1 Limitation on Regular Assessment Increases in Excess of 20% ............. 6.3 6.5.2 5% Special Assessment Limitation .................................. 6.4 6.5.3 Budget Distribution Limitation .................................... 6.4 6.5.4 Emergency Exception ........................................... 6.4 6.6 ACCOUNTS ...................................................... 6.4 6.6.1 Types of Accounts .............................................. 6.4 6.6.2 Reserve Account ............................................... 6.4 6.6.3 Current Operation Account ....................................... 6.5 6.7 BUDGET, FINANCIAL STATEMENTS, REPORTS AND STUDIES ........... 6.6 6.7.1 Preparation of Operating Budget ................................... 6.6 LI'I-FL E & SAPUTO A 7TOR.¥ES'$ A 7' L.4 W 1901 OLYMPIC BOULEVARD, ~'100 WALNUT CREEK, CA 94596-5024 ($10) 944-5000 -iii- 06/20/ 96 0 ,-~ 0 6.8 6.9 6.10 6.11 6.7.2 Distribution of Budget ........................................... 6.7 6.7.3 Annual Report ................................................ 6.7 6.7.4 Quarterly Reconciliation ......................................... 6.7 6.7.5 Reserve Account Study .......................................... 6.8 6.7.6 Notice of Increased Assessments ................................... 6.8 6.7.7 Statement of Outstanding Charges .................................. 6.9 6.7.8 Initial Six Month Statement ....................................... 6.9 6.7.9 Schedule of Monetary Penalties .................................... 6.9 6.7.10 Review of Inspections .......... ................................. 6.9 ENFORCEMENT OF ASSESSMENTS .................................. 6.9 6.8.1 Procedures ................................................... 6.9 6.8.2 Additional Charges ............................................ 6.10 6.8.3 Certificate of Satisfaction of Lien .................................. 6.11 6.8.4 Waiver of Homestead Protections ................................. 6.11 SUBORDINATION OF LIEN ........................................ 6.11 SAN BRUNO MOUNTAIN AREA HABITAT CONSERVATION PLAN ....... 6.11 MASTER ASSOCIATION ASSESSMENTS .............................. 6.13 6.11.1 Joint Collection of Regular Assessments ............................ 6.13 6.11.2 Priority of Master Association Documents ........................... 6.13 VII MEMBERSHIP IN AND DUTIES OF THE ASSOCIATION ......................... 7.1 7.1 THE ORGANIZATION .............................................. 7.1 7.2 MEMBERSHIP .................................................... 7.1 7.2.1 Appurtenant to Ownership ....................................... 7.1 7.2.2 Annexation ................................................... 7.1 7.3 VOTING ......................................................... 7.1 7.4 RULES .......................................................... 7.1 7.5 DEDICATION AND EASEMENTS ..................................... 7.1 7.6 INSURANCE ...................................................... 7.1 7.6.1 General Provisions and Limitations ................................. 7.2 7.6.2 Types of Coverage ............................................. 7.3 7.6.3 Annual Review ................................................ 7.4 7.6.4 Notice to Members ............................................. 7.4 7.7 COMPLETION OF COMMON AREA IMPROVEMENTS ................... 7.6 7.7.1 Inspection of Common Area Improvements ........................... 7.6 7.7.2 Enforcement of Completion Bonds ................................. 7.8 VIII DEVELOPMENT RIGHTS ................................................... 8.1 8.1 8.2 8.3 8.4 8.5 8.6 8.7 LIMITATIONS OF RESTRICTIONS .................................... 8.1 RIGHTS OF ACCESS AND COMPLETION OF CONSTRUCTION ............ 8.1 SIZE AND APPEARANCE OF PROJECT ............................... 8.1 ALTERATIONS TO MAP ............................................ 8.1 MARKETING RIGHTS .............................................. 8.2 TITLE RIGHTS .................................................... 8.2 AMENDMENT .................................................... 8.2 IX RIGHTS 9.1 9.2 9.3 9.4 9.5 LITTLE & SAPUTO A rToR.%'~"S A T LA W 1901 OLYMPIC BOULEVARD, ~t00 WALNUT CKEEK. CA 94:595-502.4 (~lO) 944-$000 OF MORTGAGEES ................................................. 9.1 CONFLICT ....................................................... 9.1 LIABILITY FOR UNPAID ASSESSMENTS .............................. 9.1 INSPECTION OF BOOKS AND RECORDS .............................. 9.1 FINANCIAL STATEMENTS FOR MORTGAGEES ........................ 9.1 MORTGAGE PROTECTION ......................................... 9.1 -iv- 06/20/96 Oh CD CD X AMENDMENT AND ENFORCEMENT ........................................ 10.1 10.1 AMENDMENTS .................................................. 10.1 10.1.1 Approval By City ............................................. 10.1 10.1.2 Approvals Required by Habitat Conservation Plan ..................... I0.1 10.1.3 Recordation of Araendment ..................................... 10.1 10.2 ENFORCEMENT ................................................. 10.1 10.2.1 Rights to Enforce ............................................. 10.1 1.0.2.2 Violation of Law .............................................. 10.2 10.2.3 Remedies Cumulative .......... · ................................ 10.2 10.2.4 Nonwaiver .................................................. 10.2 10.2.5 Enforcement by City, County and HCP Trust ......................... 10.2 10.3 NOTICES TO MEMBERS OF LEGAL PROCEEDINGS .................... 10.2 10.4 CONDITIONS TO CERTAIN LEGAL PROCEEDINGS .................... 10.3 10.4.1 Association's Notice ........................................... 10.3 10.4.2 Notice Tolls Limitations on Actions ................................ 10.3 -. t0.4.3 Meetings ................................................... 10.4 10.4.4 Inspections and Testing ......................................... 10.4 10.4.5 Settlement Offer .............................................. 10.5 10.4.6 Time Periods and Notices ....................................... 10.5 10.4.7 Rejection of Settlement Offer ..................................... 10.6 10.4.8 Association Relieved of Obligations ................................ 10.6 10.4.9 Failure to Comply ............................................. 10.7 10.5 OPTIONAL LEGAL PROCEEDINGS .................................. 10.8 XI ARCHITECTURAL CONTROL .............................................. 11.1 11.1 11.2 11.3 11.4 '11.5 11.6 11.7 11.8 11.9 11.10 11.11 11.12 11.13 11.14 11.15 APPLICABILITY .................................................. 11.1 RESERVATION TO DEC~ ................................... 11.1 MEMBERS ...................................................... 11.1 DUTIES ......................................................... 11.2 APPLICATION FOR APPROVAL OF IMPROVEMENTS .................. 11.2 BASIS FOR APPROVAL OF IMPROVEMENTS ......................... 11.2 FORM OF APPROVALS AND DENIALS ............................... 11.2 PROCEEDING WITH WORK ........................................ 11.2 FAILURE TO COMPLETE WORK .................................... 11.3 DETERMINATION OF COMPLIANCE ................................ 11.3 11.10.1 Notice of Completion .................................... 11.3 11.10.2 Inspection ............................................ 11.3 FAILURE TO REMEDY THE NON-COMPLIANCE ...................... 11.3 WAIVER ........................................................ 11.4 APPEAL OF DECISION OF COMMITTEE ............................. 11.4 LIABILITY ...................................................... 11.4 ESTOPPEL CERTIFICATE .......................................... 11.4 XIi XIII ANNEXATION ........................................................... 12.1 12.1 12.2 12.3 12.4 12.5 12.6 RESTRICTION ON ANNEXATION ................................... 12.1 PROPERTY WHICH MAY BE ANNEXED; APPROVAL OF MEMBERS ...... 12.1 PROCEDURE FOR ANNEXATION ................................... 12.1 EFFECT OF ANNEXATION ......................................... 12.2 DEANNEXATION AND AMENDMENT ............................... 12.2 AMENDMENT .................................................. 12.2 MISCELLANEOUS PROVISIONS ............................................ 13.1 13.1 TERM OF DECLARATION ......................................... 13.1 LI'I~'LE & SAPUTO 1901 OLYMPIC BOULEVARD, ~tl00 WALN UT CREEK, CA 94.596-5024 (Sl0) 9a4-5000 06/20/96 13.2 13.3 13.4 13.5 13.6 13.7 13.8 13.9 13.10 CONSTRUCTION OF PROVISIONS ................................... 13.1 BINDING ....................................................... 13.1 SEVER. ABILITY OF PROVISIONS .................................... 13.1 GENDER, NUMBER AND CAPTIONS ................................ 13.1 REDISTRIBUTION OF PROJECT DOCUMENTS ........................ 1.3.1 EXHIBITS ........................................................ 13.1 REQUIRED ACTIONS OF ASSOCIATION ............................. 13.1 SUCCESSOR STATUTES ........................................... 13.1 CONFLICT ...................... - ................................ 13.2 LITI'LE & SAPUTO A rTORNEY$ A T LA F/ 1901 OLYMPIC BOULEVARD, il00 WALNUT CREEK, CA 94596-5024 (510) 944-5000 -vi- 06/20/96 0h [... 0 DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF TERRABAY VILLAGE A Common Interest Development THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF TERRABAY VILLAGE ("Declaration") is made by CENTEX REAL ESTATE CORPORATION, a Nevada corporation ("Declarant"). ARTICLE I INTENTION OF DECLARATION 1.1 FACTS: following facts: This Declaration is made with reference to the 1.1.1 Property Owned by Declarant: Declarant is the owner of all the real property and Improvements thereon located in the City of South San Francisco, County of San Mateo, State of California, described as follows: Lots 13 through 20, inclusive, 31 through 48, inclusive, and 59 through 70, inclusive and lots 173, 174 and 175, as shown on the subdivision map of Terrabay, filed for record on July 2, 1990, in Book 121 of Maps at Page 65 et seq., in the Official Records of the County of San Mateo, State of California. 1.1.2 Nature of Project: Declarant and Additional Declarant intend to develop the Subject Property and the Additional Property as a Common Interest Development which shall be a planned development as defined in California Civil Code Section 1351(k) . The Project is intended to be created in conformity with the provisions of the Davis-Stirling Common Interest Development Act (California Civil Code, Section 1350 et seq.). To establish the Project, Declarant and Additional Declarant desire to impose on the Subject Property, and any property annexed thereto, these mutually beneficial restrictions, easements, assessments and liens under a comprehensive general plan of improvement and development for the benefit of all of the Owners, the Lots and Common Area within the Subject Property and any property annexed thereto. 1.1.3 Phases of Project: The Subject Property and the Additional Property are intended to be developed in two (2) or more Phases. The first Phase consists of the Subject Property. prior to annexation, the Addinional Property shall not be subject to any provision of this Declaration. Declarant may, but shall have no obligation to, annex all or any portion of the Additional LITTLE & SAPUTO A TTo P~WE'Y$ AT LAW/ 1901 OLYMPIC BOULEVARD, 9100 WALNUT CREEK, CA 94596-50~.~ (510) 9~4-5000 1.1 06/20/96 o o Property to the Project by recording a Declaration of Annexation in compliance with the provisions of this Declaration. 1.1.4 Master Declaration: The Project is subject to an instrument entitled "Master Declaration of Covenants, Conditions and Restrictions of Terrabay, recorded in the Official Records of the San Mateo County Recorder on **, 1996, in Book **, at Page as amended in accordance with the procedures set forth in said Master Declaration. Each Owner of a Lot is a member of Terrabay Master Association, an owners association created by said Master Declaration. 1.2 APPLICABILITY OF RESTRICTIONS: Pursuant to California Civil Code Sections 1353 and 1354, Declarant and Additional Declarant herepy declare that the Project and all Improvements thereon are subj'ect to the provisions of this Declaration. The Project shall be held, conveyed, hypothecated, encumbered, leased, rented, used, occupied and improved subject to the covenants, conditions and restrictions stated in this Declaration. Ail such covenants, conditions and restrictions are declared to be in furtherance of the plan for the subdivision, development and management of the Project as a Common Interest Development. Ail of the limitations, easements, uses, obligations, covenants, conditions, and restrictions stated in this Declaration shall run with the Project and shall inure to the benefit of and be binding on all Owners and all other parties having or acquiring any right, title or interest in any part of the Project. After recordation of a Declaration of Annexation, the property described therein shall constitute a part of the Project and shall be subject to this Declaration and the Master Declaration. LITTLE & SAPUTO A ~TOR,VE'Y$ A T LA ~,' 1901. OLYMPIC BOULEVARD, 9[00 WALNUT CREEK. CA 94.596-$024 (510) 9~.4-$000 1.2 06/20/96 C) ARTICLE II DEFINITIONS Unless otherwise defined or unless the context clearly requires a different meaning, the terms used in this Declaration, the Map and any grant deed to a Lot shall have the meanings specified in this Article. 2.1 ADDITIONAL CHARGES: The term "Additional Charges" shall mean costs, fees, charges and expenditures, including without limitation, attorneys' fees, late charges, interest and recording and filing fees actually incurred by the Association in collecting and/or enforcing payment of assessments, fines and/or penalties. 2.2 ADDITIONAL PROPERTY: The term "Additional Property" shall ..mean the real property described on Exhibit "A" and all Improvements situated on such real property. 2.3 ADDITIONAL DECLARANT: The term "Additional Declarant" shall mean SUNCHASE G.A. CALIFORNIA I, INC., a California corporation, so long as it owns some portion of the Additional Property. The term "Additional Declarant" shall also mean successors in interest of Additional Declarant, if (i) such successor(s) in interest acquires all or any portion of Declarant's interest in the Additional Property for the purposes of development, sale and/or rental and (ii) a certificate, signed by Additional Declarant, has been recorded in the County in which the successor(s) in interest assumes the rights and duties of Additional Declarant to the portion of the Additional Property so acquired. There may be more than one Additional Declarant. 2.4 ALTERATION: The term "Alteration" shall mean constructing, performing, installing, remodeling, repairing, replacing, demolishing, and/or changing the color or shade of any Improvement. The term "Alteration" does not include repainting or refinishing any Improvement in the same color, hue, intensity, tone, and shade or repairing any Improvement with the same materials. 2.5 ARTICLES: The term "Articles" shall mean the Articles of Incorporation of Terrabay Townhome Subassociation, which are or shall be filed in the Office of the Secretary of State of the State of California. 2.6 ASSOCIATION: The term "Association" shall mean Terrabay Townhome Subassociation, its successors and assigns, a nonprofit mutual benefit corporation incorporated under the laws of the State of California. The Association is a Subassociation as that term is defined in the Master Declaration. -- 2.7 BOARD: The term "Board" shall mean the Board of Directors of the Association. LITTLE & SAPUTO .4 rrOP..¥EY$ A r LA 1901 OLYMPIC BOULEVARD, #tOO WALNUT CREEK, CA 94596-502~ (510) 944-5000 2.1 06/20/96 %0 O 2.8 BUDGET: The term "Budget" shall mean a pro forma operating budget prepared by the Board in accordance with Section 6.7.1 of this Declaration. 2.9 BYLAWS: The term "Bylaws" shall mean the Bylaws of the Association and any amendments thereto. ' 2.10 CITY: The term "City" shall mean the City of South San Francisco, California. 2.11 COMMON AREA: The term "Common Area" shall mean lots 173, 174 and 175, as shown on the Map. The term "Common Area" shall also mean any property described as Common Area in a Declaration of Annexation. Common Area includes all Improvements Situated thereon or therein. 2.12 COUNTY: The term "County" shall mean the County of San Mateo, State of California. 2.13 DECLARANT: The term "Declarant" shall mean CENTEX REAL ESTATE CORPORATION, a Nevada corporation, so long as it owns some portion of the Subject Property or the Additional Property. The term "Declarant" shall also mean successors in interest of Declarant, if (i) such successor(s) in interest acquires all or any portion of Declarant's interest in the Subject Property and/or the Additional Property for the purposes of development, sale and/or rental and (ii) a certificate,, signed by Declarant, has been recorded in the County in which the successor(s) in interest assumes the rights and duties of Declarant to the portion of the Subject Property and/or the Additional Property so acquired. The term Declarant shall also include Additional Declarant if Additional Declarant annexes any portion of the Additional Property to the Project. 2.14 DECLARATION: The term "Declaration" shall mean this Declaration of Covenants, Conditions and Restrictions of Terrabay Village and includes any subsequently recorded amendments. 2.15 DECLARATION OF ANNEXATION: The term "Declaration of Annexation" shall mean any instrument recorded in the County which extends the provisions of this Declaration to all or a portion of the Additional Property or any other property. 2.16 FIRST MORTGAGE: The term "First Mortgage" shall mean a Mortgage which has priority under the recording statutes of the State of California over all other Mortgages encumbering a specific Lot. 2.17 FIRST MORTGAGEE: The term "First Mortgagee" shall mean the Mortgagee of a First Mortgage. 2.18 HABITAT CONSERVATION PLAN: The term "Habitat Conservation Plan" or "HCP" shall mean the San Bruno Mountain Area LITTLE & SAPUTO AT'TOIq,.~I~-YS AT L.A~ 1901 OLYMPIC BOULEVARD, ~I00 WALNUT CREEK, CA 94596-$024 (510) 9aa-5000 2.2 06/20/96 Habitat Conservation Plan as adopted by the County Board of Supervisors on September 14, 1982, by Resolution No. 43770, or as it may be hereafter amended. 2.19 IMPROVEMENTS: The term "Improvements" shall mean everything constructed, installed or planted on property subject to this Declaration, including without limitation, buildings, streets, fences, walls, paving, pipes, wires, grading, landscaping and other works of improvement as defined in Section 3106 of the California Civil Code, excluding only those. Improvements or portions thereof which are dedicated to the public or a public or quasi-public entity or utility company, and accepted for maintenance by the public, such entity or utility company. 2.20 INVITEE: The term "Invitee" shall mean any person whose presence within the Project is approved by or is at the request of the Master Association, the Association or a particular Owner, including, but not limited to, lessees, tenants, and the family, guests, employees, licensees or invitees of Owners, tenants or lessees. 2.21 LOT: The term "Lot" refers to a Separate Interest as defined in California Civil Code Section 1351(1) and shall mean Lots 13 through 20, inclusive, 31 through 48, inclusive, and 59 through 70, inclusive , as shown on the Map. The term "Lot" shall also mean any Lot described as such in a Declaration of Annexation. Lot includes all Improvements situated thereon or therein. 2.22 MAP: The term "Map" shall mean the subdivision map of filed for record on July 2, 1990, in Book 121 of Maps at Page 65 et seq., in the Official Records of the County, including any subsequently recorded amended final maps, parcel maps, certificates of correction, lot line adjustments and/or records of survey. The term "Map" shall also mean any recorded subdivision map described in a Declaration of Annexation. 2.23 MASTER ASSOCIATION: The term "Master Association" shall mean TERRABAY MASTER ASSOCIATION, a nonprofit mutual benefit corporation incorporated under the laws of the State of California and governed by the Master Declaration. -2.24 MASTER ASSOCIATION COMMON AREA: The term "Master Association Common Area" shall mean the real property and Improvements thereon which are defined as "Common Area" in the Master Declaration. 2.25 MASTER DECLARATION: The term "Master Declaration" shall mean that instrument entitled "Master Declaration of Covenants, Conditions and Restrictions of Terrabay", recorded in the Official Records of the San Mateo County Recorder on **, 1996, in Book **, at Page **, as amended in accordance with the procedures set forth in said Master Declaration. LITTLE & SAPUTO A'FrOR.%'~'YS A T [..AW 1901 OLYMPIC BOULEVARD, # 1oo WALNUT CREEK. CA 94596-5024 (510) 944-~00~ 2.3 06/20/96 2.26 MEMBER: The term "Member" shall mean an Owner. 2.27 MORTGAGE: The term "Mortgage" shall mean any duly recorded mortgage or deed of trust encumbering a Lot. 2.28 MORTGAGEE: The term "Mortgagee" shall mean a Mortgagee under a Mortgage as well as a beneficiary under a deed of trust. 2.29 NOTICE AND HEARING: The term "Notice and Hearing" shall mean the procedure which gives an Owner notice of an alleged violation of the Project Documents and the opportunity for a hearing before the Board. 2.30 OWNER: The term "Owner" shall mean the holder of record fee title to a Lot, including Deq~arant as to each Lot owned by Declarant. If more than one person owns a single Lot, the term "Owner" shall mean all owners of that Lot. The term "Owner" shall also mean a contract purchaser (vendee) under an installment land contract but shall exclude the contract vendor and any person having an interest in a Lot merely as se9urity for performance of an obligation. 2.31 PARTY WALL: The term "Party Wall" shall mean any portion of a Residence wall common to two (2) Residences which is constructed and placed approximately on the common boundary of two (2) Lots. 2.32 pHASE: The term "Phase" shall mean any Lots and/or Common Area which are simultaneously made subject to the provisions of this Declaration either by recording this Declaration or by recording a Declaration of Annexation. 2.33 PLAN OPERATOR: The term "Plan Operator" shall refer to the County in its capacity as the Plan Operator referenced in the Habitat Conservation Plan. 2.34 PROJECT: The term "Project" shall mean the Subject Property and any property described in a Declaration of Annexation. 2.35 PROJECT DOCUMENTS: The term "Project Documents" shall mean the Articles, Bylaws, this Declaration and the Rules. 2.36 PUBLIC REPORT: The term "Public Report" shall mean a Final Subdivision Public Report issued by the Department of Real Estate of the State of California for one or more Phases of the Project. 2.37 RESIDENCE: The term "Residence" shall mean a dwelling situated on a Lot, including any attached garage also situated on a Lot. LITTLE & SAPUTO A ;-i'OR.¥EY$ A T LA W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94596-5024 ($~o) 9~.5ooo 2.4 06/20/96 CD 2.38 the Board, procedures. RULES: The term "Rules" shall mean the rules adopted by including architectural guidelines, restrictions and 2.39 SUBJECT PROPERTY: The term "Subject ~roperty" shall mean Lots 13 through 20, inclusive, 31 through 48, inclusive, and 59 through 70, inclusive and lots 173, 174 and 175, as shown on the Map and all Improvements thereon. LITTLE & SAPUTO A TTOP,.V~'Y$ A T LA W 1901 OLYMPIC BOULI~'VARD, ~Sl00 WAL.~UT CREEK, CA 94596*5024 ($ ! O) 944-S000 2.5 06/20/96 kO O ARTICLE III OWNERSHIP AND EASEMENTS 3.1 NON-SEVERABILITY: In addition to the non-severability provisions set forth in the Master Declaration, the provisions of this Section 3.1 shall also apply. The interest of each Owner in the use and benefit of the Common Area shall be appurtenant to the Lot owned by the Owner. No Lot shall be conveyed by an Owner separately from the interest in the Common Area. Any conveyance of any Lot shall automatically transfer the right to use the Common Area without the necessity of express reference in the instrument of conveyance. Each Owner, whether by deed, gift, devise or operation of law, for the Owner's benefit and for the benefit of all other Owners and each successor of each Owner, specifically waives and abandons all rights, interests and causes of action for judicial partition of any interest in the Common Area and does further agree that no action for judicial partition shall be instituted, prosecuted or reduced to judgment. The ownership interests in the Common Area and Lots described in this Article are subject to the easements described, granted and reserved in this Declaration. Each of the easements described, granted or reserved herein shall be established upon the recordation of this Declaration and shall be enforceable as equitable servitudes and covenants running with the land for the use and benefit of the Owners and their Lots superior to all other encumbrances applied against or in favor of any portion of the Project. 3.2 OWNERSHIP OF LOTS: Title to each Lot in the Project shall be conveyed in fee to an Owner. 3.3 OWNERSHIP OF COMMON AREA: Title to or a legal ownership interest in the Common Area in each Phase shall be conveyed to the Association prior to or concurrently with the conveyance of the first Lot in that particular Phase to an Owner. The Association shall be deemed to have accepted title to the Common Area conveyed to it when (i) a grant deed conveying title to the Common Area has been recorded in the Official Records of the County and (ii) assessments for the Phase in which the Common Area is located have commenced. No Common Area may be developed or sold without the prior approval of the City of South San Francisco. 3.4 OWNERSHIP OF PARTY WALLS: Each Owner of a Lot upon which a Party Wall is situated shall own to the center of the Party wall. 3.5 EASEMENTS: The easements and rights specified in this Article are hereby created and shall exist whether or not they are also set forth in individual grant deeds to Lots. 3.5.1 Easements On M~p: The Common Area and Lots are subject to the easements and rights of way shown on the Map. LI'Iq'LE & SAPUTO ,.~ TTOP,.vEY$ AT LAW 1901 OLYMPIC BOULEVARD, WALNUT CREEK. CA 94596-5024 (510) 9~.5000 3.1 06/20/96 0 [-. 0 3.5.2 Easements For Common Area: Every Owner shall have a non-exclusive right and easement for the ingress, egress, use and enjoyment of the Common Area which shall be appurtenant to and shall pass with the title to every Lot, subject to the right of the Association to dedicate and/or grant easements over all or any portion of the Common Area. 3.5.3 Master Declaration: The Common Area and each Lot are subject to the easements and rights established by the Master Declaration. 3.5.4 Easements for Master Association: There is reserved and granted to the Master Association over and across the Common Area, as servient tenement, a non-exclusive easement appurtenant to the Master Association Common Area for those purposes necessary for the Master Association to carry out its duties pursuant to the Master Declaration. 3.5.5 Easements Over Master Association Common Area: There is reserved and granted to each Lot, as dominant tenement, over and across the Master Association Common Area, as servient tenement, a non-exclusive appurtenant easement for ingress, egress, use and enjoyment of the Master Association Common Area. Every Owner shall have a non-exclusive right and easement of use and enjoyment in and to the Master Association Common Area which shall be appurtenant to and shall pass with the title to every Lot, subject to the right of the Master Association to dedicate and/or grant easements over all or any portion of the Master Association Common Area. 3.5.6 Additional Easements: Notwithstanding anything expressed or implied to the contrary, this Declaration shall be subject to all easements (i) granted by Declarant for the installation and maintenance of utilities and drainage facilities necessary for the development of the Project, (ii) granted or reserved in the deeds to the Owners, (iii) granted or reserved in the deeds to the Association and/or Master Association, or (iv) set forth in the Master Declaration. 3.5.7 Party Walls: Each Owner of a Lot containing a Party Wall shall have a reciprocal non-exclusive easement over and across such portions of the contiguous Lot as are necessary to maintain the Party Wall. 3.5.8 Utilities: Each Owner shall have a non- exclusive right and easement over, under, across and through the Project, except for portions of the Project on which a structure is situated, for utility lines, pipes, wires and conduits installed by Declarant.- 3.5 9 Storm Drains: There are reserved and granted for the benefit of each Lot and the Common Area, over, under, across and through the Project, except for portions of the Project LITTLE & SAPUTO .4 TTO[tVEY$ AT LA W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94596-5024 ($10) 944-5000 3.2 06/20/96 on which a structure is situated, non-exclusive easements for surface and subsurface storm drains and the flow of storm waters in accordance with natural drainage patterns and the drainage patterns and Improvements installed or constructed by Declarant or Additional Declarant. 3.5.10 Encroachment: Non-exclusive rights and easements are reserved and granted (i) for the benefit of each Lot, as dominant tenement, over, under and across each other Lot and the Common Area, as servient tenements, and (ii) for the benefit of the Common Area, as dominant tenement, over, under and across each Lot, as servient tenement. Such easements shall be for the purposes of encroachment, support, occupancy and use of such portions of Lots and/or Common Area as shall be encroached upon, used and occupied by the dominant tenement as a result of any original construction design, accretion,, erosion, deterioration, decay, errors in original construction, movement, settlement, shifting or subsidence of any building or structure or any portion thereof. If any portion of the Project is partially or totally destroyed, the encroachment easement shall exist for any replacement structure which is rebuilt pursuant to the original construction design. The easement for maintenance of the encroaching Improvement shall exist for as long as the encroachment exists; provided, however, that no easement for encroachment shall be created due to the willful misconduct of the Association or any Owner. Any easement for encroachment may but need not be cured by repair or restoration of the Improvement. 3.5.11 SuDoort, Maintenance and Repair: The Association and each Owner shall have a non-exclusive right and easement appurtenant to the Common Area and to all Lots through each Lot and the Common Area for the support, maintenance and repair of the Common Area and all Lots. 3.5.12 Easement to Governmental Entities: Ail governmental and quasi-governmental entities, agencies, departments, bureaus and utilities and their agents shall have a non-exclusive easement over the Common Area for the purposes of performing their duties within the Project. Signs providing notice of such easement shall be prominently displayed in the Common Area and such easements shall not be obstructed. 3.5.13 Association's Easements: The Association and its duly authorized agents and representatives shall have a non- exclusive right and easement as is necessary to perform the duties and obligations of the Association set forth in the Project Documents, including the right to enter upon Lots, subject to the limitations contained in this Declaration. 3.5.14 Additional Easements: Notwithstanding anything expressed or implied to the contrary, this Declaration shall be subject to all easements granted by Declarant or Additional LITTLE & SAPUTO ,,47"/'OR.¥EY$ AT L.,41,g 1901 OLYMPIC BOULI~'VARD, #100 WALNUT CREEK, CA 94596-5024 (510) 944-5000 3.3 06/20/96 O~ 0 0 Declarant for the installation and maintenance of utilities and drainage facilities necessary for the development of the Project. 3.5.15 Easement For Adjoining Property: Declarant and Additional Declarant shall have, and hereby expressly reserves, a right and easement over and across the Common Area for the purposes of reasonable ingress to and egress from, over and across the Project, including private roads and pathways, to the Additional Property until all of the Additional Property is annexed to the Project. 3.5.16 Annexation of Additional Property: Upon the recordation of a Declaration of Annexation, the Lots and the Owners of Lots in the annexed Phase shall have all of the rights and easements specified in this Article and the Lots and the Owners of Lots in the Project prior to annexation shall have all of the easements specified in this Article as though the annexed Phase were initially part of the Project. LITTLE & SAPUTO ,4 TTOR,VEY$ .4 Y L~ W ~9oI OLYMPIC BOUL£V~, #100 (,510) 944-5000 3.4 06/20/96 %0 0 [-. 0 ARTICLE IV USES AND RESTRICTIONS 4.1 ALTERATIONS: Except as otherwise specifically provided in this Declaration, no Alteration may be made to any Improvement until plans have been submitted and approved pursuant to Article XI. 4.2 ANIMALS: An Owner may keep two (2) customarily uncaged household pets within the Owner's Lot. Each Owner may also maintain a reasonable number of small caged animals, birds or fish. No other animals or pets are permitted in the Project. The Board shall have the right to prohibit the maintenance of any pet which, after Notice and Hearing, is found to be a nuisance to other Owners. No animals may be kept for commercial purposes. No dog shall be allowed in the Common Area unless it is under the control of a responsible person by leash or other means. Each Owner or Invitee shall restore the Common Area to the condition it was in immediately preceding its use by any dog permitted on the Common Area by the Owner or Invitee. 4.3 ANTENNAS: No outside television antenna, microwave or satellite dish, aerial, or other such device (collectively "Video Antennas") with a diameter or diagonal measurement in excess of thirty-six (36) inches shall be erected, constructed or placed on any Common Area or any Lot. Video antennas with a diameter or diagonal measurement of thirty-six (36) inches or .less may be installed only if approved in accordance with the provisions of Article XI. Reasonable restrictions which do not significantly increase the cost of the Video Antenna system or significantly decrease its efficiency or performance may be imposed. 4.4 EXTERIOR LIGHTING: No Owner shall remove, damage or disable any exterior light, regardless of where located, which is connected to the Association's electric service. 4.5 INVITEES: Each Owner shall be responsible for compliance with the provisions of the Project Documents by that Owner's Invitees. An Owner shall promptly pay any Reimbursement Assessment levied and/or any fine or penalty imposed against an Owner for violations committed by that Owner's Invitees. 4.6 MASTER DECLARATION: The Association shall have the right, but not the duty, to enforce the provisions of the Master Declaration and of the rules adopted by the Master Association. Each Owner shall comply with all applicable provisions of the Master Declaration, including, but not by way of limitation, the Use Restrictions set forth in Article IV of the Master Declaration. 4.7 MINERAL EXPLORATION: No Lot shall be used to explore for or to remove any oil, hydrocarbons or minerals of any kind without the approval of the Board and only if permitted by local ordinances. LITTLE & SAPUTO A TTOILX'E'FS A T LA w 1901 OLYMPIC BOULEVARD, ~I00 %,VALNUT CR£EF~ CA 94596-5024 (510) 9.~a-5000 06/20/96 O O O o 4.8 PARKING: Vehicles shall not be parked anywhere in the Project except in areas designed and established for the parking of passenger motor vehicles ("Parking Areas") or wholly within garages or upon streets. All Parking Areas shall be used solely for the parking of motor vehicles used for personal transportation. No parking in driveways is permitted at anytime. No boat, trailer, camper, commercial vehicle, mobile home, recreational vehicle or any inoperable vehicle shall be parked or stored anywhere in the Project unless otherwise provided by the Architectural Standards. No abandoned or dismantled vehicles are permitted in the Project at anytime and the Association shall appoint a representative who shall be authorized to remove any such vehicle which remains in the Project in excess of ten (10) calendar days. Unless otherwise provided for in the Rules, garage doors shall remain closed, except when a vehicle is entering or ~eaving the garage. Garages shall be kept sufficiently clear so as to permit parking of the number of vehicles for which the garage was designed. With the exception of garages, no part of the Common Area shall be used for repair, construction or reconstruction of any vehicle. No resident in the Project shall park in any Parking Area designated as "guest parking". As long as applicable ordinances and laws are observed, including the requirements of. Section 22658.2 of the California Vehicle Code, any vehicle which is in violation of this Declaration or Section 4.3 of the Master Declaration may be removed. 4.9 RENTAL OF LOTS: An Owner shall be entitled to rent or lease a Lot, if: (i) there~ is a written rental or lease agreement specifying that the tenant shall be subject to all provisions of the Project Documents and a failure to comply with any provision of the Project Documents shall constitute a default under the agreement; (ii) the period of the rental or lease is not less than thirty (30) days; (iii) the Owner gives notice of the tenancy to the Board and has otherwise complied with the terms of the Project Documents; and (iv) the Owner gives each tenant a copy of the project Documents. Upon satisfaction of the foregoing conditions all rights to the use and enjoyment of the Common Area shall be exercised by the tenant rather than by the Owner of the leased or rented Lot; however, the Owner shall not be relieved of the obligations and duties imposed by this Declaration. _4.10 RULES: The Board may promulgate rules concerning the use of the Project by Owners and their Invitees. The Board shall have the right to limit the number of an Owner's guests that may use any recreational facilities. Neither an Owner nor its Invitees shall violate any provision of this Declaration, the Bylaws or the Rules as the same may be amended from time to time. 4.11 SIGNS: Ail signs displayed in the Project shall be attractive and compatible with the design of the Project and shall comply with all applicable local ordinances. The only signs of any kind which may be displayed to the public view on or from any Lot or the Common Area shall be as follows: LITTLE & SAPUTO ,4 TTOR_VEY$ A T L.~ W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 9~59~50~ (510) 9~4-5000 4.2 06/20/96 C) 4.11.1 Declarant: Signs may be displayed by Declarant on Common Area or unsold Lots, as Declarant deems appropriate, advertising Lots owned by Declarant for sale or rent; 4.11.2 Legal Proceedinqs: proceedings may be displayed; Signs required by legal 4.11.3 Project Identification: Appropriate signs may be displayed by the Association to identify the Project; 4.11.4 Sale or Rent: One (1) sign of reasonable dimensions may be placed on a Lot advertising the Lot for sale or rent; and 4.11.5,~- Siqns ADDroved By Board: Other signs, posters and notices approved by the Board or specified in the Rules or in this Declaration may be posted in locations designated by the Board. 4.12 STORAGE OF WASTE MATERIALS: Ail garbage, trash and accumulated waste material shall be plac~d in appropriate covered trash containers, which may be placed on Common Area or where visible only on the night before and the day that pick-up is to Occur. 4.13 USE AND OCCUPANCY OF RESIDENCES: Except for the business of Declarant and Additional Declarant in completing the development and disposition of the Lots in the Project, no commercial enterprise of any kind shall be established, maintained, operated, permitted or constructed in any portion of the Project unless it satisfies all of the following requirements: (1) it is permitted by local ordinances, (2) it is clearly incidental and secondary to the use of the Residence as a residential dwelling, (3) it is conducted entirely within the Residence and carried on by the residents thereof only, (4) it does not involve the sale or offering for sale of any article (garage sales are permitted at such times and in such circumstances as are approved by the Board), and (5) it is otherwise in compliance with any further rules, restrictions and limitations set forth in the Rules. No Residence shall be permanently occupied by any more than two (2) persons per bedroom. No Owner may permit or cause anything to be done or kept upon or in a Lot which might obstruct or interfere with the rights of other Owners or which would be noxious, harmful or unreasonably offensive to other Owners. Each Owner shall comply with all of the requirements of all federal, state and local governmental authorities, and all laws, ordinances, rules and regulations applicable to the Owner's Lot. 4.14 USE OF COMMON AREA: Ail use of Common Area is subject to the Rules. There shall be no use of the Common Area except by Owners and their Invitees. All persons residing within the Project may enjoy the use of all facilities in the Common Area as long as they abide by the terms of the Project Documents. There shall be LITTLE & SAPUTO A TTO.R.',,'f'Y$ A T LA ~ 1901 OLYMPIC BOULEVARD, ~100 %VALNL1T CREEK. CA 94596-5024 (510) 9~-5000 4.3 06/20/96 O O O no obstruction of any part of the Common Area. Nothing shall be stored or kept in the Common Area without the prior consent of the Board. No permanent structure or use shall be permitted to encroach onto the Common Area private roads. Nothing shall be done or kept in the Common Area which will increase the rate of insurance on the Common Area without the prior consent of the Board. No Owner shall permit anything to be physically done or kept in the Common Area or any other part of the Project which might result in the cancellation of insurance on any part of the Common Area, which would interfere with rights of other Owners, or which would be a nuisance, noxious, harmful or unreasonably offensive to other Owners. No waste shall be committed in the Common Area. LITTLE & SAPUTO ~1TTOR. X'E¥$ .4 T L.4 w' 1901 OLYMPIC BOULB'VARD, ~100 WALNUT CREF_K,~ CA 94596-5024 (510) 944-5000 4.4 06/20/96 0 ARTICLE V MAINTENANCE, REPAIR AND RECONSTRUCTION OF I~PROVEMENTS Attached hereto as Exhibit "B" is a Maintenance Responsibility Table which is intended to assist Owners in determining responsibilities for maintenance of specific Improvements listed in that table. The table is a summary included for convenience only and shall not supersede the language of this Article V or other provisions of this Declaration or of the Master Declaration. 5.1 MAINTENANCE OF COMMON AREA: 5.1.1 Generally: The Association shall be responsible for the maintenance, repair, replacement, management, operation, painting and upkeep of Common Area and all Improvements situated in, upon or under the Common Area. The Association shall keep the Common Area and Improvements thereon in good condition and repair, provide for all necessary services and cause all acts to be done which may be necessary or proper to assure the maintenance of the Common Area in first class condition. 5.1.2 Slope and Drainace Maintenance: The Association shall at all times, with respect to the Common Area and the unenclosed portions of the Lots, comply with the terms of that certain Common Area and Lot Maintenance Plan for Terrabay Subassociation ("Maintenance Plan") attached hereto as Exhibit "D". The Maintenance Plan includes specifications, schedules and illustrative exhibits for the maintenance and repair of slope areas, drainage facilities, benches, gutters and subdrains. The Maintenance Plan provides for specific maintenance measures and inspections to be performed by the Association on the Common Area and unenclosed portions of the Lots for the protection of slope areas. Failureto properly maintainthede~cesassociatedwithslopeprotectioncould resultin severe property damage. 5.1.3 Maintenance Manual: The Association shall adopt a maintenance manual which shall establish procedures for maintenance of the major components of the Project which it is obligated to maintain and the scope and frequency of inspections of those major components. The Board shall regularly review the maintenance manual and update the manual as necessary to incorporate the Association's maintenance experience and other factors. 5.1.4 Recular Inspections: The Association shall regularly inspect all major components of the Common Area as required by the maintenance manual described in 5.1.3, above. One of the primary purposes of the inspection shall be to determine whether any maintenance should be performed to extend the life of Common Area Improvements, to prevent damage to Common Area Improvements resulting from inadequate or neglected maintenance or to provide for the proper operation of Common Area Improvements. LITTLE & SAPUTO A TTOR_'CEY$ ,4 T ~ 1~ 1901 O[.YMPIC BOULEVARD. ~100 WALNUT CREEK, CA 94596-5024 (510) 9..s~-5000 5.1 06/20/96 O C~ O O 5.1.5 As-Built Plans: The Association shall maintain a copy of the as-built plans for the Improvements under its jurisdiction. These plans shall be available for review by Owners and prospective Owners and shall be referenced for performance of the Association's duties. 5.2 ALTERATIONS TO COMMON AREA: 5.2.1 ADDroval: Alterations to any Improvements situated in, upon or under the Common Area may be made only by the Association. A proposal for an Alteration to an Improvement may be made at any meeting. A proposal may be adopted by the Board, subject to the limitations contained in the Bylaws. Additionally, all structures constructed by Declarant or Additional Declarant were constructed in compliance with the Terrabay Specific Plan. The Association may not erect any additional structure or make exterior modifications (and the City of South San Francisco may withhold building permits, variance permits or certificates of occupancy for any additional structure or exterior modification) until a Precise Plan or Final Subdivision Map has been approved authorizing such additional structure or'exterior modification in accordance with the Terrabay Specific Plan. 5.2.2 Fundinc: Expenditures for maintenance, repair or replacement of an existing capital Improvement for which reserves have been collected may be made from the Reserve Account. Subject to the limitations set forth in Section 6.5.2, the Board may levy a Special Assessment to fund any Alteration of an Improvement for which no reserve has been collected. 5.3 MAINTENANCE OF LOTS AND RESIDENCES: Except as otherwise specifically provided in this Declaration, each Owner shall maintain and care for the Owner's Lot, including the Residence, and other Improvements located thereon, in a manner consistent with the standards established by the Project Documents and other well maintained residential areas in the vicinity of the Project. Special architectural design standards may be established in the Rules. 5.3.1 Residence Exteriors and Foundations: The Association shall paint the exterior surfaces (including doors, but excluding glass and screens) of Residences and shall maintain, repair and replace foundations, structural supports and roofs of Residences including gutters and downspouts. 5.3.2 Decks and Railincs: The Association shall maintain, repair and replace all exterior decks, including deck surfaces, walls, handrails and stairs. 5.3.3 Exterior Lichtinc: The Association shall maintain, repair and replace all exterior light fixtures and bulbs connected to the Association's electric service; provided, however, each Owner shall replace any inoperable light bulb in any such LITTLE & SAPUTO A TTOI~;~"¥S AT I..AW 1901 OLYMPIC BOUL/:VARD, ~100 WALNUT CREEK, CA 9,1596-5024 (510) 9a4.$000 5.2 06/20/96 light fixture located on that Owner's Lot within eight (8) feet of ground level. Each Owner shall maintain, repair and replace all exterior light fixtures and bulbs connected to the Owner's electric service. 5.3.4 SloDe and Drainaqe Maintenance: Each Owner shall at all times maintain the capacity and flow of all storm drainage Improvements situated within the enclosed portions of their Lot and comply with the applicable portions of the Maintenance Plan described in 5.1.2, above, with respect to any slopes or storm drainage Improvements situated within the enclosed portions of their Lot. The Maintenance Plan includes specifications, schedules and illustrative exhibits for the maintenance and repair of slope areas, drainage facilities, benches, gutters and subdrains. The Maintenance Plan provides for specific maintenance measures and inspections to be performed by the Owner for the protection of slope areas. Failuretoproperly maintain the devices associatedwith slope protection could resultin severe property damage. 5.4 ALTERATIONS TO LOTS AND RESIDENCES: Alterations may be made to the interior of an Owner's Residence, if the Alterations do not impair the structural integrity of the Residence and if the Owner complies with all laws and ordinances regarding alterations. and remodeling. Any proposals for Alterations on Lots or to the exteriors of Residences shall be made in accordance with the provisions of Article XI. Additionally, all Residences constructed by Declarant or Additional Declarant were constructed in compliance with the Terrabay Specific Plan. No Owner may erect any additional structure or make exterior modifications (and the City of South San Francisco may withhold building permits, variance permits or certificates of occupancy for any additional structure or exterior modification) until a Precise Plan or Final Subdivision Map has been approved authorizing such additional structure or exterior modification in accordance with the Terrabay Specific Plan. No Owner shall alter the slope or contour of any Lot or construct or alter any drainage pattern or facility without the approval of the City Engineer. In addition, no Owner shall redirect surface water runoff onto adjacent property without that adjacent property owner's written authorization. 5.5 MAINTENANCE AND REPAIR OF FENCES AND WALLS: 5.5.1 Party Walls: The Owners of a Party Wall shall be responsible for maintaining, repairing and replacing it. The costs of such maintenance, repair and/or replacement shall be shared equally by the Owners; provided, however, that all costs of any maintenance, repair or replacement necessitated by the negligent or willful action of an Owner shall be borne by that Owner. In the absence of negligent or _willful conduct, any necessary maintenance, repair or replacement performed by an Owner shall entitle that Owner to a right of contribution from the other Owners of the Party Wall. The right of contribution shall be LITTLE & SAPUTO 1901 OLYMPIC BOULEVARD. #100 WALNUT CREEl(. CA. 94596-5024 (510) 0aa-5000 5.3 06/20/96 CD CD appurtenant to the Lot and shall pass to the successor(s) in interest of the Owner entitled to contribution. 5.5.2 Fences: Ail fences within the Project shall be maintained, repaired and replaced by the Association, except for the surface facing a Lot which shall be maintained by the Owner of that Lot. Maintenance shall include refinishing the exterior surface of the fence if that surface was previously finished with paint or stain. 5.5.3 Retaining Walls: Ail retaining walls within the Project shall be maintained, repaired and replaced by the Association. 5.6 LANDSCAPING: Ail landscaping in the Project shall be maintained and cared for in a manner consistent with Section 5.6 of the Master Declaration and the Rules adopted by the Association. 5.6.1 Association: The Association shall be responsible for all landscaping located on Common Area and all landscaping situated on each Lot (except for those portions of the Lot which are required to be maintained by the Owner in accordance with Section 5.6.2, below), extending to the street curb(s) adjacent to the Owner's Lot. 5.6.2 Owners: Each Owner shall be responsible for all landscaping within (a) the enclosed portions of the Owner's Lot or (b) within a rear yard area which is fenced along its sides, but is open to a rear slope area (in which case the Owner's maintenance responsibilities shall extend within the partially fenced rear yard to the rear Lot boundary). 5.7 RIGHT OF MAINTENANCE AND ENTRY BY ASSOCIATION: If an Owner fails to perform maintenance and/or repair which that Owner is obligated to perform pursuant to this Declaration, and if the Association determines, after Notice and Hearing given pursuant to the provisions of the Bylaws, that such maintenance and/or repair is necessary to preserve the attractiveness, quality, nature and/or value of the Project, the Association may cause such maintenance and/or repair to be performed. The costs of such maintenance and/Qr repair shall be charged to the Owner of the Lot as a Reimbursement Assessment. Ih order to effectuate the provisions of this Declaration, the Association may enter any Lot whenever entry is necessary in connection with the performance of any maintenance or construction which the Association is authorized to undertake. Entry within a Lot shall be made with as little inconvenience to an Owner as practicable and only after reasonable advance written notice of not less than forty-eight (48) hours, except in emergency situations. 5.8 DAMAGE AND DESTRUCTION: The term "restore" shall mean repairing, rebuilding or reconstructing a damaged Improvement to substantially the same condition and appearance in which it existed LI/WLE & SAPUTO 1901 OLYMPIC BOULEVARD, 9100 WALNUT CRF_EF.. CA. 9~59~5024 (5~0) 9~-5000 5.4 06/20/96 O prior to fire or other casualty damage. If fire or other casualty damage extends to any Improvement which is so insured, the Association shall proceed with the filing and adjustment of all claims arising under the existing insurance policies. The insurance proceeds shall be paid to and held by the Association. 5.8.1 Bids: Whenever restoration is to Be performed pursuant to this Section, the Board shall obtain such bids from responsible licensed contractors to restore the damaged Improvement as the Board deems reasonable; and the Board, on behalf of the Association, shall contract with the contractor whose bid the Board deems to be the most reasonable. The contractor shall provide a completion bond naming the Association and each affected Owner as beneficiaries. 5.8.2 Sufficient Proceeds: The costs of restoration of the damaged Improvement shall be funded pursuant to the provisions and in the priority established by this Section 5.8.2. A lower priority procedure shall be utilized only if the aggregate amount of funds then available pursuant to the procedures of higher priority are insufficient to restore the damaged Improvement. Except as expressly provided in this Section, no funds shall be expended unless all funds necessary to restore all damaged Improvements are available. The following funds and procedures shall be utilized: 1. The first priority shall be any insurance proceeds paid to the Association under existing insurance policies. 2. The second priority shall be all Reserve Account funds designated for the repair or replacement of the capital Improvement(s) which has been damaged. 3. The third priority shall be funds raised by a Special Assessment against all Owners levied by the Board up to the maximum amount permitted without the approval of the Members in accordance with the limitations set forth in Section 6.5.2. 4. The fourth priority shall be any funds raised by a Special Assessment against Owners levied by the Board pursuant to a vote of the Members pursuant to Section 5.8.3. If the aggregate funds raised pursuant to the foregoing procedures is insufficient to pay the total costs of reconstruction of all damaged Lot(s), then the Association shall determine whether to (i) adopt a plan of alternative reconstruction pursuant to Section 5.8.4 or (ii) purchase the damaged Lot(s) pursuant to Section 5.8.5. 5.8.3 Additional Special Assessment: If the total funds available to restore the damaged Improvement pursuant to the first three-priorities described in Section 5.8.2 is insufficient to restore the damaged Improvement, then: LITTLE & SAPUTO , .4 7-;'oP..x'~'$ a r La W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK.. CA 94596-5024 (510) 9.~,*-5000 5.5 06/20/96 %0 p- (a) With respect to the Lot s), a special meeting of the Members shall be called for the purpose of voting whether to impose an additional Special Assessment and deciding upon the amount thereof. If an additional Special Assessment in an amount sufficient to complete the restoration is approved, the Board shall. then contract for the restoration of the Lot(s) as described above. If a decision is made not to impose such an additional Special Assessment, a meeting may be called by the Owners whose Lots were damaged for the purpose of voting whether to impose an additional Special Assessment on only those Owners. Any decision to impose such an additional assessment on only the affected Owners must have the affirmative vote of all the affected Owners. (b) With respect to the Common Area, a special meetin~ of the Members shall be called for the purpose of voting whether to impose an additional Special Assessment and deciding upon the amount thereof. The Board shall then contract for the restoration of the Common Area as described above, making use of whatever funds are then available to it. 5.8.4 Alternative Reconstruction: If the total funds available to restore the Lot(s) pursuant to Section 5.8.2 are insufficient to restore the Lot(s), then the Board shall consider and propose plans to reconstruct the damaged Lot(s) making use of whatever funds are available to it pursuant to Section 5.8.2 ("Alternative Reconstruction"). All proposals shall be presented to ali Owners. If all Owners of the damaged Lots ("Affected Owners") agree to any plan of Alternative Reconstruction, then the Board shall contract for the reconstruction of the Lots in accordance with the plan of Alternative Reconstruction making use of whatever funds are then available to it. 5.8.5 Purchase of Lots of Affected Owners: If no plan of Alternative Reconstruction is agreed to by all Affected Owners within six (6) months after the date of the damage, then the Board shall seek to obtain the consent of all Affected Owners and their Mortgagees to the Association's purchase of the Lots of the Affected Owners. The purchase price ("Purchase Price") for each Lot shall be the fair market value of the Lot and its Improvements immediately prior to the damage as determined by an independent appraiser selected by the Board with a "Member of the Appraisal Institute" certificate or the equivalent. The Association shall purchase the Lots of the Affected Owners who, together with all of their Mortgagees, agree to the purchase. If there are insufficient funds to pay the Purchase Price for all Lots to be purchased, then a Special Assessment shall be levied against all Owners. The aggregate amount of the Special Assessment shall be the amount needed to pay the difference between the aggregate amount of available funds allocable to the Lots to be purchased (such allocation to be made by the Board based upon the cost to repair the damaged improvements) and the aggregate fair market values of the Lots to be purchased. This Special Assessment shall be levied without the vote or approval of the Members of the Association. LITTLE & SAPUTO 1901 OLYMPIC BOULEVARD. ~100 WALNUT CREEK, CA 94596-5024 (510) 5.6 06/20/96 The balance of the available funds shall be distributed to the Affected Owners whose Lots were not purchased by the Association, such distribution to be in proportion to the cost of repair of the damaged improvements as determined by the Board. 5.9 CONDEMNATION OF COMMON AREA: If all or any portion of the Common Area is taken for any public or quasi-public use under any statute, by right of eminent domain or by purchase in lieu of eminent domain, the entire award shall be deposited into the Current Operation Account until distributed. The Association shall distribute such funds proportionately to all Owners as their interests appear according to the respective fair market values of their Lots at the time of condemnation, as determined by an independent appraisal made by an independent real estate appraiser with a Member of the Appraisal Institute Certificate or the equivalent, as selected by the Board. The Association shall represent the interests of all Owners. LITTLE &' SAPUTO ATTORNa~'$ AT I..,4W 1901 OLYMPIC BOULEVARD, g, lO0 WALN UT CRE~K, CA 94596.5024 (~I0) 94~.5000 5.7 06/20/96 ARTICLE VI FUNDS AND ASSESSMENTS 6.1 COVENANTS TO PAY: Declarant and each Owner covenant and agree to pay to the Association the assessments and any Additional Charges levied pursuant to this Article VI. 6.1.1 Liability for Pavment: The obligation to pay assessments shall run with the land so that each successive record Owner of a Lot shall in turn become liable to pay all such assessments. No Owner may waive or otherwise escape personal liability for assessments or release the Owner's Lot from the liens and charges hereof by non-use of the Common Area, abandonment of the Lot or any other attempt to renounce rights in the Common Area or the facilities or services within the Project. Each assessment shall constitute a separate assessment and shall also be a separate, distinct and personal obligation of the Owner of the Lot at the time when the assessment was levied and shall bind the Owner's heirs, devisees, personal representatives and assigns. Any assessment not paid when due is delinquent. The personal obligation of an Owner for delinquent assessments shall not pass to a successive Owner unless the personal obligation is expressly assumed by the successive Owner. No such assumption of personal liability by a successor Owner (including a contract purchaser under an installment land contract) shall relieve any Owner from personal liability for delinquent assessments. After an Owner transfers fee title of record to a Lot, the Owner shall not be liable for any charge thereafter levied against that Lot. 6.1 2 Funds Held in Trust: The assessments collected by the Association shall be held by the Association for and on behalf of each Owner and shall be used solely for the operation, care and maintenance of the Project as provided in this Declaration. 6.1.3 Offsets: No offsets against any assessment shall be permitted for any reason, including, without limitation, aDy claim that the Association is not properly discharging its duties. -6.2 REGULAR ASSESSMENTS: 6.2.1 Pavment of Reqular Assessments: Regular Assessments for each fiscal year shall be established when the Board approves the Budget for that fiscal year. Regular Assessments shall be levied on a fiscal year basis; however, each Owner shall be entitled to pay the Regular Assessment in twelve (12) equal monthly installments, one installment payable on the first day of each calendar month during the fiscal year, as long as the Owner is not delinquent in the payment of any monthly installment. If an Owner fails to pay any monthly installment by the sixtieth (60th) day after the date the installment was due, that Owner's right to continue to pay the Regular Assessment in LI'I'~LE & SAPUTO ATTORNk"'FS AT LAW 1901 OLYMPIC BOULEVARD, ~'100 WALNUT CREEK. CA 94596-5024 (~lO) 944-~000 6.1 06/20/96 o t- monthly installments shall immediately terminate for that fiscal year unless otherwise determined by the Board. Regular Assessments shall commence for all Lots in each Phase on the first day of the first month following the month in which the first Lot in that Phase is conveyed to an Owner and may commence prior to that date at the option of Declarant. 6.2.2 Allocation of Reqular Assessments: The total amount of the Association's anticipated revenue attributable to Regular Assessments as reflected in the Budget for that fiscal year shall be allocated equally among the Lots. After annexation of each Phase, the allocation and assessment of the charges in the Budget shall be reallocated equally among all Lots in the Project, including those in the annexed Additional Property. For the first fiscal year, the Budget shall be substantially based upon the operating budget accepted by the Depart=~ent of Real Estate of the State of California. After a new Phase has been annexed, the Board shall approve a Budget, which is substantially based upon the operating Budget accepted by the Department of Real Estate of the State of California in connection with the Public Report for that Phase, for the remainder of the current fiscal year for use upon the commencement of Regular Assessments against Lots in the new Phase. 6.2.3 Exemptions from Reqular Assessment: Notwithstanding the provisions of Section 6.2, the Board shall exempt each Owner of a Lot which satisfies paragraph (a), below, and may exempt all Owners if paragraph (b), below, is satisfied, from the payment of a portion of the Regular Assessment levied against that Lot as described in those paragraphs. (a) Residences: An Owner of a Lot is exempt from payment of that portion of the Regular Assessment which is allocated for defraying operating expenses and reserves directly attributable to the existence and use of the Owner's Residence and any landscaping situated on the Owner's Lot until the first to occur of the following events: (i) a notice of completion of construction of the Residence has been recorded; (ii) the Residence is occupied or otherwise used; or (iii) the structural components of the Residence which the Association is obligated to maintain are complete. (b) Other Common Area: Each Owner may be exempted from payment of that portion of the Regular Assessment which is allocated for defraying operating expenses and reserves directly attributable to the existence and use of a common facility (including landscaping) that is not complete at the time Regular Assessments commence until the first to occur of the following events: (i) a notice of completion of the common facility is recorded or (ii) the common facility has been placed into use. 6.2.4 Non-Waiver of Assessments: If before the expiration of any fiscal year the Association fails to fix Regular LITTLE & SAPUTO ~90! OLYMPIC BOULEVARD. ~100 WALNUT CREEK. CA 94596-5024 (~0) 9~-5~0 6.2 06/20/96 ~O O O Assessments for the next fiscal year, the Regular Assessment established for the preceding year shall continue until a new Regular Assessment is fixed. 6.3 SPECIAL ASSESSMENTS: Subject to the limitations set forth in Section 6.5.2, Special Assessments may be levied in addition to Regular Assessments for (i) constructing capital Improvements, (ii) correcting an inadequacy in the Current Operation Account, (iii) defraying, in whole or in part, the cost of any construction, reconstruction, unexpected repair or replacement of Improvements in the Common Area or Lots, or (iv) paying for such other matters as the Board may deem appropriate for the Project. Special Assessments shall be levied in the same manner as Regular Assessments; except that a Special Assessment for major repair or reconstruction of a Residence upon a Lot shall be based upon the ratio that the square footage of the floor area of the Residence to be assessed bears to the total square footage of the floor area of all Residences to be assessed. 6.4 REIMBURSEMENT ASSESSMENTS: The Association shall levy a Reimbursement Assessment against an Owner to reimburse the Association for the costs of repairing damage caused by that Owner or that Owner's Invitee or if a failure to comply with the Project Documents has (i) necessitated an expenditure of monies, including attorneys' fees, by the Association to bring the Owner or the Owner's Lot or Improvements into compliance or (ii) resulted in the imposition of a fine or penalty. A Reimbursement Assessment shall be due and payable to the Association when levied. A Reimbursement Assessment shall not be levied by the Association until Notice and Hearing has been given in accordance with the Bylaws. Notwithstanding any other provision in the Project Documents expressed or implied to the contrary, Reimbursement Assessments are assessments but they may not be enforced by any lien rights provided in this Declaration. 6.5 INCREASE LIMITATIONS: This Section 6.5 is intended to implement the limitations on increases in Regular and Special Assessmepts established by Section 1366 of the California Civil Code. To the extent that the limitations set forth in Section 1366 are amended or replaced, the limitations set forth in this paragraph shall be automatically amended and replaced by the new statutory limitations. Further, if the limitations set forth in Section 1366 are repealed, the provisions of this Section 6.5 shall no longer have any force or effect. 6.5.1 Limitation on Reqular Assessment Increases in Excess of 20%: Without the approval of the Members obtained pursuant to Section 3.3.2 of the Bylaws, the Board shall be prohibited from lev%zing a Regular Assessment which is more than twenty percent (20%) greater than the Regular Assessment per Lot for the immediately preceding fiscal year. LITTLE & SAPUTO A/'TOR,¥EY.~ .4 T L.4 w' 1901 OLYMPIC BOULEVARD. #I00 ',~AL.N UT CREEK. CA 94596-5024 (510) 9ha-5000 6.3 06/20/96 6.5.2 5% SDeciat Assessment Limitation: Without the approval of the Members obtained pursuant to Section 3.3.2 of the Bylaws, the Board shall be prohibited from levying Special Assessments within a single fiscal year which, in the aggregate exceed five percent (5%) of the budgeted gross expenses for that fiscal year. 6.5.3 Budqet Distribution Limitation: Without the approval of the Members obtained pursuant to Section 3.3.2 of the Bylaws, the Board shall be prohibited from levying a Regular Assessment which is greater than the Regular Assessment per Lot for the immediately preceding fiscal year unless the Board has distributed a Budget in compliance with Section 1365(a) of the California Civil Code. The pro forma operating Budget requirements currently established by Section 1365(a) are set forth in Section 6.7.1, below. 6.5.4 Emerqency Exception: The limitations set forth in Sections 6.5.1 and 6.5.2, above, shall not apply to any Special Assessment or any increase in Regular Assessments necessary for: (i) extraordinary expenses required by an order of a court; (ii) extraordinary expenses necessary to repair or maintain the Project or any part of it for which the Association is responsible where a threat to personal safety on the Project is discovered; (iii) extraordinary expenses necessary to repair or maintain the Project or any part of it for which the Association is responsible that could not have been reasonably foreseen by the Board when it prepared and distributed the Budget or Budget summary to the Members; or (iv) extraordinary expenses incurred in making the first payment of the earthquake insurance surcharge pursuant to Section 5003 of the California Insurance Code. Prior to the imposition or collection of an assessment pursuant to this Section, the Board shall pass a resolution containing written findings as to the necessity of the extraordinary expenses involved and why the expense was not or could not have been reasonably foreseen in the budgeting process. The resolution shall be distributed to the Members with the notice of the increased assessment. 6.6 ACCOUNTS: 6.6.1 Types of Accounts: Assessments collected by the Association shall be deposited into at least two (2) separate accounts with a responsible financial institution, which accounts shall be clearly designated as (i) the Current Operation Account and (ii) the Reserve Account. The Board shall deposit those portions of the assessments collected for current maintenance and operation into the Current Operation Account and shall deposit those portions of the assessments collected as reserves for replacement and deferred maintenance of major components which the Association is obligated to repair into the Reserve Account. 6.6.2 Reserve Account: Withdrawal of funds from the Reserve Account shall require the signatures of either two (2) LITTLE & SAPUTO 1901 OLYMPIC BOUL~ARD. WALNUT CREE~ ~ 9459~5024 (510) 944-5000 6.4 06/20/96 Directors or one (1) Director and one Association who is not a Director. (1) officer of the (a) The Association shall pay out of the Reserve Account only those costs that are attributable to the maintenance, repair or replacement of capital Improvements for which reserves have been collected and held and such other amounts which are expressly authorized by law. The Board shall not expend funds collected for the Reserve Account for any purpose other than the repair, restoration, replacement, or maintenance of, or litigation involving the repair, restoration or maintenance of, major components which the Association is obligated to repair, restore, replace, or maintain and for which the Reserve Account was established. (b) Notwithstanding paragraph (a), above, and so long as authorized by Civil Code Section 1365.S, the Board may authorize the temporary transfer of money from the Reserve Account to the Current Operation Account to meet short-term cash-flow requirements or other expenses as long .as the Board has made a written finding, recorded in the minutes, explaining the reasons why the transfer is needed and describing whan and how the money will be repaid to the Reserve Account. The transferred funds shall be restored to the Reserve Account within one (1) year of the date of the initial transfer, unless the Board makes a finding supported by documentation that a temporary delay would be in the best interests of the Project. If the Board makes such a finding, the Board may delay the restoration until the time which the Board reasonably determines is necessary. The Board shall exercise prudent fiscal management in delaying restoration of these funds and in restoring the expended funds to the Reserve Account; and if necessary, the Board shall !evy a Special Assessment to recover the full amount of the expended funds within the time limits required by this Section. Any Special Assessment levied pursuant to the preceding sentence is subject to the limitations imposed by Section 6.5.2. At its discretion, the Board may extend the date the payment on the Special Assessment is due. Any extension shall not prevent the Board from pursuing any legal remedy to enforce the collection of an unpaid Special Assessment. (c) When a decision is made to use reserve funds or to t~mporarily transfer money from the Reserve Account to pay for litigation, the Association shall notify the Members of that decision in the next mailing to the Member of a written notice or report, ~s defined in Section 5016 of the Corporations Code. The Association shall prepare a monthly accounting of expenses related to the litigation and the mailing shall state that. The accounting shall be available for inspection by Members at the Association's office. 6.6.3 Current Ooeration Account: All other costs properly payable by the Association shall be paid from the Current Operation Account. LITTLE & SAPUTO ATTOP~%'E~S AT L~ 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 9,~596-$024 (sro) 9~4-$ooo 6.5 06/20/96 6.? BUDGET, FINANCIAL STATEMENTS, REPORTS AND STUDIES: 6.7.1 Preparation of ODeratinq Budqet: This Section 6.7.1 is intended to implement the pro forma operating budget requirements established by Section 1365 of the California Civil Code. To the extent that Section 1365 is amended or replaced, the provisions of this Section shall be automatically amended and replaced by the new statutory provisions. Further, if. the requirements set forth in Section 1365 are repealed, the provisions of paragraph (d), below, shall no longer have any force or effect, but the remainder of this Section, as modified by statute, shall remain in full force and effect. Regardless of the number of Members or the amount of assets of the Association, each year the Board shall prepare and approve a pro forma operating budget which shall include all of the following: (a) estimated revenue and expenses on an accrual basis; (b) 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 therefor; (c) a general statement setting, forth the procedures used by the Board in the calculation and establishment of reserves to defray the future repair, replacement or additions to those major components that the Association is obligated to maintain; and (d) a summary of the Association's reserves based upon the most recent review or study conducted pursuant to Section 1365.5 of the California Civil Code. The summary of the Association's reserves shall not be admissible in evidence to show improper financial management of the Association; provided that other relevant and competent evidence of the financial condition of the Association is not made inadmissible by this provision. The summary of the Association'~ reserves shall be printed in bold type and shall include all of the following: (i) the current estimated replacement cost, estimated remaining life, and estimated useful life of each major component; and (ii) if applicable, as of the end of the fiscal year for which the study is prepared: A. the current estimate of the amount of cash reserves necessary to repair, replace, restore or maintain the major components; and LI'I'FLE & SAPUTO A TTOI~,'E'YS A T LA w' 1901 OLYMPIC BOULEVARD, t~lO0 WALNUT CREEK. CA 9a596-5024 (,510) 9,~.~ .$000 6.6 06/20/96 B. the current amount of accumulated cash reserves actually set aside to repair, replace, restore, or maintain major components; and (iii) the percentage that the amount determined for purposes of clause (B) of subparagraph (ii) is of the amount determined for purposes of clause (A) of subparagraph (ii). 6.7.2 Distribution of BudGet: The Budget shall be made available to each Member. Not less than forty-five (45) and not more than sixty (60) days prior to the beginning of the fiscal year, the Board shall distribute either a copy or a summary of the Budget to all Owners. If a summary of the Budget is distributed, a written notice must accompany it. The written notice must be in at least 10-point bold type on the front page of the summary. It shall state that the Budget is available at the Association's office (or at another suitable location within the Project) and that copies will be provided upon request and at the expense of the Association. If a Member requests a copy. of the Budget, the Board shall provide a copy to the Member by first class United States mail within five (5) days after the Association's receipt of the request. 6.7.3 Annual RePort: Within one hundred twenty (120) days after the close of each fiscal year, the Board shall cause to be distributed to each Member an annual report consisting of the following: (i) a balance sheet as of the end of the fiscal year; (ii) an operating (income) statement for the fiscal year; (iii) a statement of changes in financial position for the fiscal year; and (iv) any information required to be reported under Section 8322 of the California Corporations Code. If the report is not prepared by an independent accountant, it shall be accompanied by the certificate of an authorized officer of the Association stating that the statements were prepared without independent audit or review from the books and records of the Association. Any annual report prepared for a fiscal year in which the gross income to the Association exceeds seventy-five thousand dollars ($75,000.00) shall be reviewed in accordance with generally accepted accounting principles by a licensee of the California State Board of Accountancy and a copy of such review shall be distributed as part of the annual report. 6.7.4 0uarterl¥ Reconciliation: At least quarterly, the Board shall: (i) cause a current reconciliation of the Association's Operating Account(s) to be made and review the same; (ii) cause a current reconciliation of the Association's Reserve Account to be made and review the same; (iii) review the current year's actual reserve revenues and expenses compared to the current year's Budget; (iv) review the most current account statements prepared by the financial institution where the Association has its Operation and Reserve Accounts; and (v) review an income and LITTLE & SAPUTO .~ TTO~VEY$ A T L/I W 1901 OLYMPIC BOULEVARD, 9100 WALNUT CREEl(, CA 94596-5024 (510) 944-5000 6.7 06/20/96 expense statement for the Association's Operation and Reserve Accounts. 6.7.5 Reserve Account Study: This Section 6.7.5 is intended to implement the reserve account study and review requirements established by Section 1365.5 of the California Civil Code. To the extent that Section 1365.5 is amended or replaced, the provisions of this Section shall be automatically amended and replaced by the new statutory provisions. Further, if the limitations set forth in Section 1365.5 are repealed, the provisions of this Section 6.7.5 shall no longer have any force or effect. If the current replacement value of the major components of the Common Area is equal to or greater than one-half (~) of the budgeted gross expenses for any fiscal year, then (a) at least once every three (3) years, the Board shall cause'a study of the reserve account requirements, as defined below, to be conducted, and (b) the Board shall review this study annually and shall consider and implement necessary adjustments to the Board's analysis of the reserve account requirements as a result of that review. At a minimum, the study required by this Section shall include: (a) Identification of the major components of the Common Area which the Association is obligated to repair, replace, restore or maintain which, as of the date of the study, have a remaining useful life of less than thirty (30) years; (b) Identification of the probable remaining useful life of the components identified in (a), above, as of the date of the study; (c) An estimate of the cost of repair, replacement, restoration, or maintenance of each major component identified in (a), above, during and at the end of its useful life; and (d) An estimate of the total annual contribution necessary to defray the cost to repair, replace, restore, or maintain each major component identified in (a), above, during and at the end of its'useful life, after subtracting total reserve funds as of the date of the study. The _term "reserve account requirements" as used in this Section 6.7.5 shall mean the estimated funds which the Board has determined are required to be available at a specified point in time to repair, replace, or restore those major components which the Association is obligated to maintain. 6.7.6 Notice of Increased Assessments: The Board shall provide notice by first-class mail to the Owners of any increase in Regular Assessments or the levl; of any Special Assessments not less than thirty (30)-and not more than sixty (60) days prior to the increased Regular Assessment or Special Assessment becoming due. LI'I-FLE & SAPUTO .~ T'I'ORNEY$ A ? LA W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEl( CA 94596-5024 (510) 9aa.5000 6.8 06/20/96 6.7.7 Statement of Outstandinc Charces: Within ten (10) days of a written request by an Owner, the Association shall provide to the Owner a written statement which sets forth the amounts of delinquent assessments, penalties, attorneys' fees and other charges against that Owner's Lot. A charge for the statement may be made by the Association, not to exceed the reasonable costs of preparation and reproduction of the statement. 6.7.8 Initial Six Month Statement: The Board shall prepare a balance sheet and an operating statement for the period ending on the last day of the sixth (6th) month from the date Regular Assessments were initially levied and distribute them to each Member within sixty (60) days after that date. The operating statement shall include a schedule of assessments received and receivable, identified by the Lot number and the name of the Member(s) assessed.- 6.7.9 Schedule of Monetary Penalties: If the Board adopts a policy imposing any monetary penalty on or charging any fee to any Owner for a violation of the Project Documents by that Owner or that Owner's Invitee, the Board shall adopt a schedule of the monetary penalties that may be assessed for those violations. The penalties must be consistent with the Project Documents. A copy of the schedule shall be personally delivered or mailed by first-class mail, postage prepaid, to each Owner by the Board. Each time the schedule is modified, the Board shall again deliver a copy to each Owner, either personally or by first-class mail, postage prepaid. 6.7.10 Review of Inspections: At least annually, the Board shall review all reports, recommendations and information disclosed by the inspections conducted pursuant to Section 5.1.4. Additionally, the Board shall ensure that such reports, recommendations and information are considered during the preparation of any reserve account studies prepared as required by Section 6.7.5, above, and any annual reviews of any such studies as required by Section 6.7.5, above. 6.8 ENFORCEMENT OF ASSESSMENTS: The Board shall annually distribute, not more than sixty (60) and not less than forty-five (45) -days prior to the beginning of the fiscal year, a statement of the Association's policies and practices in enforcing its remedies against Owners for defaults in the payment of Regular and Special Assessments, including the recording and foreclosing of liens against Owners' Lots. 6.8.1 Procedures: In addition to all other remedies provided by law, the Association, or its authorized representative, may enforce the obligations of the Owners to pay each assessment provided for in this Declaration in any manner provided by law or by either or both of the fcllowing procedures: LITTLE & SAPUTO ATTOR.NE'YS AT LAW 1901 OLYMPIC BOULEVARD, #100 WALNUT CREEK. CA 94596-5024 (510) 9,sa. S000 6.9 06/20/96 0 0 (a) BV Suit: The Association may commence and maintain a suit at law against any Owner personally obligated to pay a delinquent assessment. The suit shall be maintained in the name of the Association. Any judgment rendered in any action shall include the amount of the delinquency, and such additional costs, fees, charges and expenditures ("Additional Charges") and any other amounts as the court may award. A proceeding to recover a judgment for unpaid assessments may be maintained without the necessity of foreclosing or waiving the lien established herein. (b) By Lien: The Association or a trustee nominated by the Association may commence and maintain proceedings to establish and/or foreclose assessment liens. No action shall be brought to foreclose a lien until the lien is created by recording a Notice of Delinquent Assessment ("Notice"). The Notice must be authorized by the Board, signed by an authorized agent or by any Owner if the Board fails or refuses to act, and recorded in the Official Records of the County. The Notice shall state the amount of the delinquent assessment(s), the Additional Charges incurred to date, a description of the Lot, the name(s) of the record Owner(s) thereof and the name and address of the trustee, if any, authorized by the Association to enforce the lien by sale and shall be signed by the person authorized to do so by the Board, or if no one is specifically designated, by the President or Chief Financial Officer. The lien may be foreclosed as provided in Section 1367 of the Civil Code of the State of California. 6.8.2 Additional Charces: In addition to any other amounts due or any other relief or remedy obtained against an Owner who is delinquent in the payment of any assessments, each Owner agrees to pay such Additional Charges as the Association may incur or levy in the process of collecting from that Owner monies due and delinquent. All Additional Charges shall be included in any judgment in any suit or action brought to enforce collection of delinquent assessments or may be levied against a Lot as a Reimbursement Assessment. Additional Charges shall include, but not be limited to, the following: (a) Attorneys' Fees: Reasonable attorneys' fees and costs incurred in the event an attorney(s) is employed to collect any assessment or sum due, whether by suit or otherwise; (b) Late Charces: A late charge in an amount to be fixed by the Board in accordance with the then current laws of the State of California to compensate the Association for additional collection costs incurred in the event any assessment or other sum is not paid when due or within any "grace" period established by law; (c) Costs of Suit: Costs of suit and court costs incurred as are allowed by the court; LITTLE & SAPUTO ATTOtL%'EY$ AT I.~W 1901 OLYMPIC BOULEVARD, #t00 WALNUT CREEK, CA 94596-5024 (510) 9~,4-5000 6.10 06/20/96 (D (d) Interest: Interest on the delinquent assessment and Additional Charges at a rate fixed by the Board in accordance with the then current laws of the Sta~e of California; and (e) Other: Any such other additional costs that the Association may incur in the process of collecting delinquent assessments or sums. 6.8.3 Certificate of Satisfaction of Lien: Upon payment or other satisfaction of a delinquent assessment for which a Notice was recorded, the Association shall record a certificate stating the satisfaction and release of the assessment lien. 6.8.4 Waiver of Homestead Protections: Each Owner, does hereby waive, to the extent"permitted by law, the protections of any declared homestead or homestead'exemption or redemption laws under the laws of California as applied to any action to enforce or collect assessments levied by the Association. 6.9 SUBORDINATION OF LIEN: Notwithstanding any provision to the contrary, the liens for assessments created pursuant to this Declaration shall be subject and subordinate to and shall not affect the rights of the holder of a First Mortgage made in good faith and for value. Upon the foreclosure of any First Mortgage on a Lot, any lien for assessments which became due prior to such foreclosure shall be extinguished; provided, however, that after such foreclosure there shall be a lien on the interest of the purchaser at the foreclosure sale to secure all assessments, whether Regular or Special, charged to such Lot after the date of such foreclosure sale, which lien shall have the same effect and shall be enforced in the same manner as provided herein. For purposes of this Section, a Mortgage may be given in good faith or for value even though the Mortgagee has constructive or actual knowledge of the assessment lien provisions of this Declaration. 6.10 SAN BRUNO MOUNTAIN AREA HABITAT CONSERVATION PLAi~: The Project is located within the development areas encompassed by the Habitat Conservation Plan. The HCP requires that annual assessments be levied against Units located within the area encompassed by the HCP ("HCP Assessments") in an amount and otherwise in accordance with the provisions of the Declaration of Covenants and Restrictions on Real Property on San Bruno Mountain recorded on , 1996, as Document No. of the Official Records of the County Recorder ("HCP Declaration"). Prior to close of escrow for the conveyance of any Lot in the Project, the Association, Additional Declarant and the HCP trustees shall enter into the Collection Agreement attached hereto as Exhibit "C" ("Collection Agreement"). The Regular Assessments set forth in the Budget and levied against the Owners shall provide for the collection of the amounts necessary for the Association to pay the HCP Assessments. The Association shall levy Regular Assessments adequate to pay the HCP LITTLE & SAPUTO A TTOR.V~-Y$ A T LA W 1901 OLYMPIC BOULEVARD. #100 ~/ALNUT CREEK. CA 94596..5024 (510) 9,~.5000 6.11 06/20/96 ~o 0~ o o Assessments levied annually against the Lots in accordance with the Collection Agreement. Ail funds collected by the Association to pay the HCP Assessment shall be deposited into a separate interest bearing account with a bank or savings and loan association insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, as the case may be, to be called the "HCP Terrabay Village - San Bruno Mountain Area Habitat Conservation Trust Account" ("Trust Account"). So much of the funds in the Trust Account as shall be required to meet the lawful demands of the San Bruno Mountain Habitat Conservation Trust ("HCP Trust") shall be disbursed by the Board from the Trust Account to the trustees of the HCP Trust annually in advance on or before November 10 of each year, or such other date or at such more frequent intervals as the Trustees may designate. Any funds remaining in the Trust Account shall be retained therein as and for a reserve for delinquent accounts. Any interest earned on the funds in the Trust Account shall be disbursed to the HCP Trust or for the benefit of the HCP in accordance with the written directions of the Plan Operator. in addition, the Association shall pay to the County of San Mateo, as Plan Operator of the HCP Trust a fractional share of the costs of thinning any exotic woody plants and performing other maintenance in the low fuel maintenance zone ("Thinning and Maintenance Expense") within the Master Association Common Area and the Subassociation Common Area. The numerator of the fractional shall share shall be equal to the number of Lots then subject to Regular Assessments and the denominator shall be the number of "lots", as defined in the Master Declaration, then subject to "regular assessments", as defined in the Master Declaration. Regular Assessments set forth in the Budget and levied against the Owners shall provide for the collection of the amounts necessary for the Association to pay its fractional share of the Thinning and Maintenance Expense. The Association shall levl; Regular Assessments adequate to pay its fractional share of the Thinning and Maintenance Expense. Ail funds collected by the Association to pay Thinning and Maintenance Expenses shall be disbursed by the Association to the Plan Operator on or before November 10 of each year, or such other date or at such more frequent intervals as the Plan Operator may designate. Any conveyance by Declarant or an Owner shall contain in the deed or other instrument transferring such interest the following provision: "This conveyance is subject to the Declaration of Covenants and Restrictions on Real Property on San Bruno Mountain dated and recorded on , 1996, as Document No. , of the Official Records of the County Recorder." LITTLE & SAPUTO 19Ol OLYMPIC BOULEVARD, ~100 ~ALNUT CREE~ CA 94596-S024 (5~o) 9~.~ooo 6.12 06/20/96 O O 6.11 MASTER ASSOCIATION ASSESSMENTS: 6.11.1 Joint Collection of Recular Assessments: The Association and the Master Association may agree to authorize either the Association or the Master AssoCiation to provide Owners with a single periodic statement, directing those Owners to pay the Regular Assessment levied by both the Association and the Master Association to either the Association or the Master Association ("collecting association"). The collecting association shall regularly provide the other association with an accounting of all delinquent assessments and shall pay to the other association each billing period all Regular Assessments collected for that association. 6.11.2 Priority of Master Association Documents: In the event that the Association forecloses its lien pursuant to paragraph 6.8.1', the foreclosure shall not affect the validity or enforceability of the Master Declaration. LITTLE & SAPUTO A TTOP~WEYS ~l T L~ W 1901 OLYM?IC BOULEVARD, WALNUT CREEK. CA 94596-5024 6.13 06/20/96 (D ARTICLE VII MEMBERSHIP IN AND DUTIES OF THE ASSOCIATION 7.1 THE ORGANIZATION: The Association is a nonprofit mutual benefit corporation. Its affairs shall be governed by and it shall have the powers set forth in the Project Documents. 7.2 MEMBERSHIP: Each Owner (including Declarant for so long as Declarant is an Owner), by virtue of being an Owner, shall be a Member of the Association. No other person shall be accepted as a Member. 7.2.1 ADDurtenant .to OwnershiD: Association membership is appurtenant to and may not be separated from the ownership of a Lot. Membership shall terminate upon termination of Lot ownership. ©wnership of a Lot shall be the sole qualification for Association membership. Membership shall not be transferred, pledged or alienated in any way except upon transfer of title to the Owner's Lot (and then only to the transferee of title to such Lot). Any attempt to make a prohibited transfer is void. Membership shall not be related to the use or non-use of the Common Area and may not be renounced. The rights, duties, privileges and obligations of all Members shall be as provided in the Project Documents. 7.2.2 Annexation: Upon the commencement of Regular Assessments in a subsequent Phase, the Owners of the Lots described in the Declaration of Annexation for that Phase shall, become Members. 7.3 VOTING: Any action required by law or by the Project Documents to be approved by the Owners, the Members or each class of Members shall be approved, if at all, in accordance with the procedures set forth in the Bylaws. 7.4 RULES: The Board may propose, adopt, amend and repeal Rules appropriate for the management of the Project, which are consistent with the Project Documents. The Rules may also establish architectural controls and may govern the use of the Common Area by Owners or their Invitees. After adoption, a copy of the Rules shall be furnished to each Owner. Owners shall be responsible for distributing the Rules to their tenants. 7.5 DEDICATION AND EASEMENTS: Subject to any applicable provision in the Bylaws, the Board shall have the power to (i) dedicate any of the Common Area to an appropriate public authority for public use or (ii) grant and convey easements and licenses for use and rights of way in, on, over and under any Common Area. 7.6 INSURANCE: The Board shall make every reasonable effort to obtain and maintain the insurance policies as provided in this Section. If the Board is unable to purchase a policy or if the LITTLE & SAPUTO ,4 TTOR,WE"{$ ,4 T LA ~' 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK, CA 94596-5024 (510) 9,~-5000 7.1 06/20/96 O~ 0 Board believes that the cost of the policy is unreasonable, the Board shall call a special meeting of Members to determine what action to take. The Board shall comply with any resolution concerning insurance coverage adopted at such a meeting. 7.6.1 General Provisions and Limitations: Ail insurance policies shall be subject to and, where applicable, shall contain the following provisions and limitations: (a) Underwriter: Ail policies (except earthquake insurance)' shall be written with a company legally qualified to do business in the State of California and (i) holding a "B" or better general policyholder's rating and a "6" or better financial performance index rating as established by Best's Insurance Reports, (ii) reinsured by a company described in (i), above, or (iii) if such a company is not available, the best rating possible or its equivalent. (b) Named Insured: Unless otherwise provided in this Section, the named insured shall be the Association or its authorized representative, as a trustee for the Owners. However, all policies shall be for the benefit of Owners and their Mortgagees, as their interests may appear. (c) Certificate of Insurance: If reasonably available, provision shall be made for the issuance of a certificate of insurance to each Owner and that Owner's Mortgagee which shall specify the amount of such insurance attributable to the particular Owner's Lot. (d) Authority to Necotiate: Exclusive authority to adjust losses under policies obtained by the Association shall be vested in the Board; provided, however, that no Mortgagee having an interest in such losses may be prohibited from participating in any settlement negotiations related thereto. (e) Contribution: In no event shall the insurance coverage obtained and maintained by the Association be brought into contribution with insurance purchased by Owners or their Mortgagees. (f) General Provisions: To the extent possible, the Board shall make every reasonable effort to secure insurance policies providing for the following: (i) A waiver of subrogation by the insurer as to any claims against the Board, the manager, the Owners and their respective servants, agents and guests; (ii) Tha~ the policy will be primary, even if an Owner has other insurance which covers the same loss; LITTLE & SAPUTO A T'TOI~V,~-Y$ AT LAW 1901 OLYMPIC BOULEVARD, //'100 WALN UT CREEK. CA 94596-5024 (51o) 9~-5ooo 7.2 06/20/96 O (iii) That no policy may be cancelled or substantially modified without at least ten (10) days' prior written notice to the Association and to each First Mortgagee listed as a scheduled holder; (iv) An agreed amount endorsement, if the policy contains a coinsurance clause; (v) A guaranteed replacement cost endorsement; and replacement cost or (vi) An inflation guard endorsement. (g) Term: The period of each policy shall not exceed three (3) years. Any policy for a term greater than one (1) year must permit short rate cancellation by the insureds. (h) Deductible: The policy may contain a reasonable deductible and the amount of the deductible shall be added to the face amount of the policy in determining whether the insurance equals replacement cost. 7.6.2 TvTDes of CoveraGe: Unless the Association determines otherwise pursuant to Section 7.6, the Board shall obtain at least the following insurance policies in the amounts specified: (a) Property Insurance: A Special Form or "All-Risk" policy of property insurance for all insurable Common Area Improvements and Residences, including fixtures and building service equipment, against loss or damage by fire- or other casualty, in an amount equal to the full replacement cost (without respect to depreciation) of the Common Area and Residences, and exclusive of land, foundations, excavation and other items normally excluded from coverage. A replacement cost endorsement shall be part of the policy. (b) Liability Insurance: A combined single limit policy of liability insurance in an amount not less than Three Million Dollars ($3,000,000.00) covering the Common Area and all damage or injury caused by the negligence of the Association, the Board or any of its agents or the Owners against any liability to the public or to any Owner incident to the use of or resulting from any accident or intentional or unintentional act of an Owner or a third party occurring in or about any Common Area. If available, each policy shall contain a cross liability endorsement in which the rights of the named insured shall not be prejudiced with respect to any action by one named insured against another named insured. (c) Worker's Compensation: Worker's compensation insurance to the extent necessary to comply with all applicable taws of the State of California or the regulations of any LITTLE & SAPUTO A TTOIL','EY$ A T LA W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK., CA 94596-5024 (510) 944-5000 7.3 06/20/96 governmental body or authority having jurisdiction over the Project. (d) Fidelity Bond: A fidelity bond naming the Board, the Owners, the Association and such other persons as the Board may designate as obligees, in an amount equal to at least one-fourth (1/4) of the total sum budgeted for the Current Operation Account and Reserve Account for the current fiscal year. The fidelity bond shall contain a waiver of any defense based on the exclusion of persons serving without compensation. (e) Directors and Officers: Errors and omissions insurance covering individual liability of Directors and officers for their negligent acts or omissions while acting in their capacities as Directors and officers. (f) Other Insurance: Other types of insurance as the Board determines to be necessary to fully protect the interests of the Owners. (g) Additional Insurance' by Owner: The insurance policies carried by the Association are not intended to cover any Improvement or any personal property situated within an individual Residence. Therefore, each Owner is responsible for determining and obtaining the type and amount of insurance needed to insure all Improvements (which existed at the time of purchase of the Residence and which are subsequently added) and personal property located within the Owner's Residence. If a policy carried by the Association offers coverage for a claim made by an Owner as a result of damage to any Improvement or personal property within a Residence, the Owner shall be responsible for paying any deductible, if the Owner wishes to adjust the claim under the Association's policy. No Owner shall be entitled to maintain insurance coverage in a manner so as to decrease the amount which the Association, on behalf of all Owners and their Mortgagees, may realize under any insurance policy which the Association may have in effect at any time. 7.6.3 Annual Review: The Board shall review the adequacy of all insurance, including the amount of liability coverage and the amount of property damage coverage, at least once every year. At least once every three years, the review shall include a replacement cost appraisal of all insurable Common Area improvements and Residences without respect to depreciation. The Board shall adjust the policies to provide the amounts and types of coverage and protection that are customarily carried by prudent owners of similar property in the area in which the Project is situated. 7.6.4 Notice to Members: The Association shall provide the notices described in this Section at least annually. In addition, if any policy has been cancelled and not immediately replaced, the Association shall notify the Members by first-class LITTLE & SAPUTO .4 'I-fORNEY$ A T L~ W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94596-5024 (510) 9,~-5000 06/20/96 O mail as soon as reasonably practical. If the Association renews any of its policies or a new policy is issued to replace an insurance policy of the Association and there is no lapse in coverage, the Association shall notify the Members of that fact in the next available mailing to all Members pursuant to Section 5016 of the Corporations Code. If the information to be disclosed pursuant to this Section is specified in the insurance policy declarations page, the Association may satisfy its obligations under this Section by distributing copies of that page to the Members. (a) General Liability: A summary of the general liability policy and property damage policy that states all of the following: (i) The name of the insurer; (ii) The policy limits; (iii) Whether an insurance agent assisted the Association in determining the general iiability policy limits and whether the insurance agent's recommendations were followed; (iv) The deductibles; (v) The person or entity that is responsible for paying the deductible in the event of loss; and (vi) Whether the Improvements made to Lots or Residences. coverage extends to For purposes of this Section, the term "insurance agent" means an insurance agent as defined in Section 1621 of the Insurance Code, an insurance broker, or an agent of an insurance agent or insurance broker. (b) Earthquake and Flood: A summary of the Association's earthquake and flood insurance policies, if either has been issued, that states all of the following: (i) The name of the insurer; (ii) The policy limits; (iii) The deductibles; (iv) The person or entity that is responsible for paying the deductible in the event of loss; and (v) Whether the Improvements made to Lots or Residences. coverage extends to LITTLE & SAPUTO A TTOR.%'EY$ AT LA Vg 1901 OLYMPIC BOULEVARD. #1.00 WALNUT CREEK. CA 94596-5024 (510) 9aa-5000 7.5 06/20/96 (c) Directors and Officers: A summary of the Association's liability coverage policy for the directors and officers of the Association that states all of the following: (i) The name of the insurer; and (ii) The policy limits. 7.7 COMPLETION OF COMMON AREA IMPROVEMENTS: 7.7.1 InsDection of Common Area Improvements: (a) Declarant or Additional Declarant may notify the Board when the Common Area Improvements (including landscaping) for a particular Phase or some portion thereof have been completed. Within thirty (30) days after giving of such notice, Declarant or the Additional Declarant, as the case may be, ("Requesting Declarant") and the Board (collectively referred to as "Parties") shall jointly request that a qualified engineer or architect (which term shall include "landscape architect," if the nature of the improvements warrants) employed by the City inspect the Common Area improvements as to which such notice has been given. If the City is unwilling or unable to provide an engineer or architect to make such inspection, the Parties shall jointly select an independent and qualified engineer or architect to perform the inspection. If the Parties are unable or fail to agree on the selection within thirty (30) days after the. joint selection is requested, then each Party, within the next thirty (30) days, shall select a licensed engineer or architect and the persons so selected, within fifteen (15) days after both are selected, shall jointly select a third engineer or architect. If either of the Parties fails to select an engineer or architect within the time provided, then the failing Party shall be deemed to have irrevocably waived its right to select, and the inspection shall be performed by the engineer or architect selected by the other Party. If the engineers or architects selected by the Parties shall fail to select a third person within the time provided, then either Party may petition any court of competent jurisdiction for appointment of such a third person. The person(s) selected or appointed pursuant to this paragraph is referred to in this Section as the "Expert" Requesting Declarant shall pay the reasonable compensation of the Expert. (b) Promptly upon the selection of the Expert as provided in Section 7.7.1(a), the Expert shall inspect the Common Area Improvements as to which notice has been given. The Parties 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 ("Report") to the Parties specifying the respects, if anf, in which the Improvements do not conform to the plans and specifications therefor and are defective, LITTLE & SAPUTO A rT'OR.\'~rna'$ A T LA W 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEl( CA. 94596-5024 ($10) 9aa.5000 7.6 06/20/96 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 proved therein and except for latent defects, if any, the Improvements have been constructed in accordance with the plans and specifications therefor, and thereafter Requesting 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 Requesting Declarant under express written warranty, if any. (c) Requesting Declarant shall correct any defects specified in the Report, and the Expert shall reinspect such Improvements within thirty (30) days after 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 ("Reinspection Report") to the Parties 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 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 Requesting 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 Requesting 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 above. (e) If the Improvements to be inspected are landscaping Improvements, then notwithstanding anything to the contrary contained herein, the Expert shall be a horticulturist or landscape architect. In al! 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; and, if Requesting Declarant has posted a bond or other security ("Bond") to secure the faithful performance to complete any of the Common Area Improvements, and if the Association is the obtigee under the Bond, the Board shall release in writing any and all rights under the Bond pertaining to the Improvements and shall execute any other documents as may be reasonably necessary to effect the release of the Bond. LITTLE & SAPUTO 1901 OLYMPIC BOULEVARD, #100 ~ALNUT CREEK, CA 9459&5024 (510) 7.7 06/20/96 0 C~ 0 7.7.2 Enforcement of ComDletion Bonds: If Declarant or Additional Declarant has posted a Bond to secure the faithful performance to complete any of the Common Area Improvements and the Association is the obligee under the Bond, the provisions of this Section 7.7.2 shall apply to initiating action to enforce the obligations of Declarant or Additional Declarant, as the case may be: (a) The Board shall, consider and vote on the question of action by the Association to enforce the obligations under the Bond with respect to any Improvements for which a notice of completion has not been filed within sixty (60) days after the completion date specified for that Improvement in the planned construction statement appended to the Bond. If the Association has given a written extension for the completion of any Common Area Improvements, the Board shall consider and vote whether to take action if a notice of completion has not been filed within thirty 30) days after the expiration of the most recent extension. (b) If the Board decides not to act or fails to initiate action to enforce bonded obligations, then upon receipt by the Board of a petition for a special meeting signed by Members entitled to cast five percent (5%) or more of the total number of votes which may be ~cast by the Members, the Board shall call a special meeting of the Members. If the Board has failed to initiate action, the Members shall determine whether they wish to initiate action. If the Board has decided not to initiate action, the Members shall determine whether to override the Board's decision. The meeting shall be held not less than thirty-five (35) nor more than forty-five (45) days after receipt of the petition by the Board. At the meeting, the approval of the Members, excluding the vote of Declarant, to take action to enforce the obligations under the Bond shall be deemed to be the decision of the Association. The Board shall thereafter implement the decision by initiating and pursuing appropriate action in the name of the Association. LITTLE & SAPUTO 1901 OLYMP[C BOULEVARD, ~100 WALNUT CREEK, CA (510) 944-5000 7.8 06/20/96 o o ARTICLE VIII DEVELOPMENT RIGHTS 8.1 LIMITATIONS OF RESTRICTIONS: Declarant and Additional Declarant are undertaking the work of developing Lots and other Improvements within the Project. The completion of the development and the marketing, sale, lease, rental and/or other disposition of the Lots is essential to the establishment and welfare of the Subject Property and the Additional Property as a residential community. In order that the work may be completed and the Project be established as a fully occupied residential community as rapidly as possible, nothing in this Declaration shall be interpreted to deny Declarant or Additional Declarant the rights set forth in this Article. The rights reserved by Declarant and Additional Declarant pursuant to this article are subject to all applicable state, County and City laws, regulations and ordinances. 8.2 RIGHTS OF ACCESS AND COMPLETION OF CONSTRUCTION: Until the fifth (5th) anniversary of the original issuance of the Public Report for the most recent Phase, Declarant, Additional Declarant and their contractors and subcontractors shall have the right to: (i) obtain reasonable access over and across the Common Area of the Project and/or do within any Lot owned or controlled by it whatever is reasonably necessary or advisable in connection with the completion of the Project; and (ii) erect, construct and maintain on the Common Area of the Project and/or within any Lot owned or controlled by it such structures as may be reasonably necessary for the conduct of its business to complete the work, establish the Project as a residential community and dispose of the Project in parcels by sale, lease, rental or otherwise. 8.3 SIZE AND APPEARANCE OF PROJECT: Declarant and Additional Declarant shall not be prevented from increasing or decreasing the number of Lots that may be annexed to the Project or from changing the exterior appearance of Residences or Common Area structures, the landscaping or any other matter directly or indirectly connected with the Project in any manner deemed desirable by Declarant or Additional Declarant, if Declarant or Additional Declarant obtain all governmental consents required by law. 8.4 ALTERATIONS TO MAP: At anytime within three 3) years from the date that the first Lot in a Phase is conveyed to an Owner other than a Declarant, the boundaries of any Lot or Common Area in that Phase may be altered by a lot line adjustment or other change reflected on a subsequently recorded parcel map or subdivision map, provided that the altered boundazies are approved by Declarant and all owners of the Property involved in the boundary adjustment (the Board, with respect to property owned by the Association). Any such alteration shall be effective upon recordation of the parcel map, subdivision map or other document aproved by the City and, upon such recordation, the boundaries of the altered Lot or Common LITTLE & SAPUTO .4 TTORf~EY$ A T LA W/ I901 OLYMPIC BOULIA-VARD, ~100 WALNUT CR£EK. CA 94596-$02,1 (510) 9~.4-5000 8.1 06/20/96 O O Area shall be altered for purposes of this Declaration to conform to the boundaries as modified. 8.5 MARKETING RIGHTS: Declarant shall have the right to: (i) maintain model homes, signs, banners, flags, balloons, sales, leasing and rental offices, storage areas, parking lots and related facilities in any Lots owned or controlled by Declarant or Common Area within the Project as are necessary or reasonable, in the opinion of Declarant, for the sate, lease, rental or other disposition of the Lots; (ii) make reasonable use of the Common Area and facilities for the sale, lease, rental or other disposition of Lots; (iii) use any Lots owned or controlled by Declarant in accordance with any promotional programs established from time to time by Declarant; and (iv) conduct its business of disposing of Lots by sale, lease, rental or otherwise; provided, however, Declarant shall pay the Association reasonable rent for the use of any Common Area facilities, if Dec!arant's use of those Common Area facilities'materially interferes with the full use and enjoyment of the Common Area facilities by Owners. 8.6 TITLE RIGHTS: This Declaration shall not be construed to constitute a limitation on Declarant's and Additional Declarant's title rights to the Additional Property prior to its annexation, nor shall it impose any obligation on Declarant, Additional Declarant or any other person or entity to improve, develop or annex any portion of the Additional Property. This Declaration shall not be construed to limit the right of Declarant or Additional Declarant at any time prior to such an annexation to establish additional licenses, easements, reservations, restrictions and rights-of-way for itself, utility companies or others as reasonably necessary for the proper development and disposition of property owned by Declarant or Additional Declarant. 8.7 AMENDMENT: After the expiration of Class B membership (as defined in the Bylaws), the provisions of this Article may not be amended without the written consent of Declarant and Additional Declarant until either (i) all of the Additional Property has been annexed to the Project and all of the Lots in the Project owned by Declarant have been conveyed or (ii) five~ (5) years after the original issuance of the Public Report for the most recent Phase of the Project, whichever occurs first. LITTLE & SAPUTO ATTORNEY$ A T L.4 gg 1901 OLYMPIC BOULEVARD. #100 WALNUT CREEF~ CA 94596.50~4 (510) 944-$000 8.2 06/20/96 ARTICLE IX RIGHTS OF MORTGAGEES 9.1 CONFLICT: Notwithstanding any contrary provision contained elsewhere in the Project Documents, the provisions of this Article shall control with respect to the rights and obligations of Mortgagees specified herein. 9.2 LIABILITY FOR UNPAID ASSESSMENTS: Any First Mortgagee who obtains title to a Lot pursuant to the remedies provided in the First Mortgage (except upon a voluntary conveyance to the First Mortgagee) or by foreclosure of the First Mortgage shall take the property free of any claims for unpaid assessments or charges against the Lot which accrue prior to the acquisition of title to the Lot by the First Mortgagee. 9.3 INSPECTION OF BOOKS AND RECORDS: Upon request, any Owner or First Mortgagee shall be entitled to inspect and copy the books, records and financial statements of the Association, the Project Documents and any amendments thereto during normal business hours. 9.4 FINANCIAL STATEMENTS FOR MORTGAGEES: If the Project then contains more than fifty (50) Lots, the Association, at its expense, shall prepare an audited financial statement for the immediately preceding fiscal year. The audited financial statement shall be available within one hundred twenty (120) days of the end of the Association's fiscal year. The Association shall provide a copy of the audited financial statement to any Mortgagee who makes a written request for it. If the Project then contains fifty (50) or fewer Lots and if an audited financial statement is not available, any Mortgagee who desires to have an audited financial statement of the Association may cause an audited financial statement to be prepared at the Mortgagee's expense. 9.5 MORTGAGE PROTECTION: A breach of any of the conditions or the enforcement of any lien provisions contained in this Declaration shall not defeat or render invalid the lien of any First Mortgage made in good faith and for value as to any Lot in the Project; but all of the covenants, conditions and restrictions contained in this Declaration shall be binding upon and effective against any Owner of a Lot if the Lot is acquired by foreclosure, trustee's sale or otherwise. LI'UrLE & SAPUTO ATTORNEYS,IT L,,I 1901 OLYMPIC BOULI~/ARD, #100 WALNUT CREEK. CA 9t,596-502A ($10) 94-4-5000 9.1 06/20/96 ARTICLE X AMENDMENT AND ENFORCEMENT 10.1 AMENDMENTS: Prior to the conveyance of the first Lot to an Owner other than a Declarant or Additional Declarant, any Project Document may be amended by Declarant and Additional Declarant. After the conveyance of the first Lot, the Project Documents may be amended with the approval of each class of Members; provided however, that no provision of this Declaration which provides for a vote of more than fifty-one percent (51%) may be amended by a vote less than the percentage specified in the section to be amended. Notwithstanding any language in this Declaration to the contrary, so long as the Declarant is a Class B Member, no provision of this Declaration may be amended without the approval of the Additional Declarant. t0.1.1 Approval By City: Notwithstanding any language in this Declaration to the contrary, no amendment or rescission to Sections 2.19, 3,3, 3,5.12, 4.8, 4.14, 5.1, 5.2.1, 5.4 or 11.4, the last sentence of Section 8.1, or this .Section 10.1.1 shall be effective without the prior written consent of the City of South San Francisco. 10.1.2 ADprovals Rec~uired by ·Habitat Conservation Plan: Notwithstanding any language in this Declaration to the contrary, no amendment or rescission to Section 6.10 or this Section 10..1.2 shall be effective without obtaining all approvals required pursuant to the Habitat Conservation Plan and the Habitat Conservation Plan Agreement. 10.1.3 Recordation of Amendment: Any amendment to this Declaration shall be effective upon the recordation in the Official Records of the County of an instrument executed by the President and Secretary of the Association which sets forth the terms of the amendment and a statement which certifies that the required percentage of Members have approved the amendment. 10.2 ENFORCEMENT: 10.2.1 Rights to Enforce: Declarant, Additional Declarant, the Association and/or any Owner shall have the power to enforce the provisions of the Project Documents in any manner provided by law or in equity and in any manner provided in this Declaration. The Association may institute appropriate legal action, temporarily suspend an Owner's voting rights and/or levl; a fine against an Owner in a standard amount to be determined by the Board from time to time. No determination of whether a violation has occurred shall be made until Notice and Hearing has been provided to the Owner pursuant to the Bylaws. If legal action is instituted by the Association, any judgment rendered shall include all appropriate Additional Charges. Notwithstanding anything to the contrary contained in this Declaration, the Association shall not have the power to cause a forfeiture or abridgement of an LITI'LE & SAPUTO ATTORNEYS AT LAW 1901 OLYMPIC BOULEVARD. ~100 WALNUT CREEK, CA 94596-5024 ($10) 944-5000 10.1 06/20/96 Owner's right to the full use and enjoyment of the Owner's Lot and Residence, including access thereto over and across the Common Area, due to the Owner's failure to comply with the provisions of the Project Documents, unless the loss or forfeiture is the result of the judgment of a court, an arbitration decision, a foreclosure proceeding or a sale conducted pursuant to this Declaration. The provisions of this Declaration shall be equitable servitudes, enforceable by Declarant, Additional Declarant, any Owner and/or the Association against the Association and/or any other Owner, tenant or occupant of the Project. Except as otherwise provided, Declarant, Additional Declarant, the Association or any Owner(s) shall have the right to enforce, in any manner permitted by law or in equity, any and all of the provisions of the Project Documents, including any decision made by the Association, upon the Owners, the Association or upon any property in the Project. 10.2.2 Violation of Law: The Association may treat any Owner's violation of any state, municipal or local law, ordinance or regulation, which creates a nuisance to the other Owners in the Project or to the Association, in the same manner as a violation of the Project Documents by making such violation subject to any or all of the enforcement procedures set forth in this Declaration, as long as the Association complies with the Notice and Hearing requirements. 10.2.3 Remedies Cumulative: Each remedy provided by this Declaration is cumulative and not exclusive. 10.2.4 Nonwaiver: The failure to enforce the provisions of any covenant, condition or restriction contained in this Declaration shall not constitute a waiver of any right to enforce any such provisions or any other provisions of this Declaration. 10.2.5 Enforcement by City, County and HCP Trust: The City is hereby made a third party beneficiary of this Declaration as to Section 10.1.1 and the sections listed in Section 10.1.t and is granted the right but not the duty to enforce the provisions of those sections. The County, the San Bruno Mountain Habitat Conservation Trust and the Plan Operator are hereby made a third party beneficiary of this Declaration as to Section 10.1.2 and the sections listed in Section 10.1.2 and are granted the right but not tke duty to enforce the provisions of those sections. 10.3 NOTICES TO MEMBERS OF LEGAL PROCEEDINGS: Prior to filing any civil action against Declarant or other developer of the Project for alleged damage to (i) the Common Area, (ii) all or portions of the Lots or Residences which the Association is required to maintain, or (iii) the Lots or Residences which arises from or is integrally related to alleged damage to the Common Area or all or portions of the Lots or Residences which the Association is required to maintain, the Board shall provide written notice to each Member specifying each of the following: LITTLE & SAPUTO A~]'ORAt~'YS AT lAW; 1901 OLYMPIC BOULEVARD. ,9100 WALNUT CREEK, CA 94596-5024 (510) 9~-5000 10.2 06/20/96 (a) That a meeting will take place to discuss problems that may lead to the filing of a civil action; (b) The options, including civil actions, that are available to address the problems; and (c) The time and place of the meeting. If the Association has reason to believe that the applicable statute of limitations will expire before the Association is able to give notice, hold the meeting and file the civil action, the Association may file the civil action first and then give the notice within thirty (30) days after filing of the action. 10.4 CONDITIONS TO CERTAIN LEGAL PROCEEDINGS: Before the Association commences an action for damages against Declarant based upon a claim for defects in the design or construction of the Project, all of the following requirements shall be met, except as otherwise provided in this Section: 10.4.1 Association's Notice: The Association shall give written notice to Declarant (Association's Notice) which shall include all of the following: (a) A preliminary list of defects; (b) A summary of the results of any survey or questionnaire distributed to Owners to determine the nature and extent of defects; and (c) A summary of the results of any testing conducted to determine the nature and extent of defects or the actual test results. 10.4.2 Notice Tolls Limitations on Actions: Upon delivery of the Association's Notice to Declarant, a Period of time, not to exceed ninety (90) days unless the Association and Declarant agree to a longer period of time, shall commence during which the Association and Declarant shall attempt to settle the dispute or attempt to agree to submit it to alternative dispute resolution. Except as. provided in this Section, and notwithstanding any other provision of law, the mailing of the Association's Notice shall toll all statutory and contractual limitations on actions against all parties who may be responsible for the damages claimed, whether named in the notice or not, including claims for indemnity applicable to the claim, for a period of one hundred fifty (150) days or a longer period agreed to in writing by the Association and Declarant. At any time, Declarant may give written notice to cancel the tolling of the statute of limitations provided in this Section. Upon delivery of this written cancellation notice, the Association shall be relieved of any further obligations to satisfy the requirements of this Section 10.4. The tolling of all applicable statutes of LITTLE & SAPUTO A ~I'ORJVEYS A T I. JI W; !901 OLYMPIC BOULEVARD. ~100 ~V.~.LN~'r CREEK. CA (~1o) 9~-5ooo 10.3 06/20/96 O O limitations shall cease sixty (60) days after the written notice of cancellation by Declarant is delivered to the Association. 10.4.3 MeetinGs: Within twenty-five (25) days after the delivery date of the Association's Notice, Declarant may request in writing to meet and confer with the Board and to inspect the Project and conduct testing, including testing that may cause physical damage to any property in the Project in order to evaluate the claim. If Declarant does not make a timely request to meet and confer with the Board or to conduct inspection and testing, the Association shall be relieved of any further obligations to satisfy the requirements of this Section 10.4. Unless Declarant and the Association agree otherwise, the meeting shall take place not later than ten (10) days from the date of Declarant's written request at a mutually agreeable time and place. The meeting shall be subject to the provisions of Civil Code Section t363.05(b). The discussions at the meeting are privileged communications and are not admissible in evidence in any civil action, unless the Association and Declarant consent to their admission. The meeting shall be for the purpose of discussing all of the following: (a) The nature and extent of the claimed defects; (b) Proposed methods of repair to the extent there is sufficient information; (c) Proposals for alternative dispute resolution; and submitting the dispute to (d) Requests from Declarant to inspect the Project and conduct testing. If Declarant makes a written request writing to meet and confer with the Board pursuant to this Section, Declarant shall deliver the Association's Notice to any insurer that has issued a policy to Declarant which imposes upon the insurer a duty to defend or indemnify Declarant for losses resulting from the defects identified in the Association's Notice. Upon receipt, the notice by Declarant shall impose upon the insurer any obligation which would be imposed under the terms of the policy if the insured had been_served with a summons and complaint for damages. Declarant shall inform the Association when Declarant delivers the notice to each insurer pursuant to this subsection. 10.4.4 !nsoections and Testing: If the Association conducted inspection and testing prior to the date it sent the Association's Notice, the Association shall make available for inspection and testing at least those areas inspected or tested by the Association at the earliest practicable date. The inspection and testing shall be completed within fifteen (15) days from the date the Association makes these areas available for inspection and testing, unless the Association and Declarant agree to a longer period. If Declarant does not timely complete the inspection and LI/q'LE & SAPUTO ATTORNEY$ A T LA W 1901 OLYMPIC BOUL~¥ARD. #100 %VALNU'F CREEK, ~ 94596-5024 (510) 9~,4-5000 10.4 06/20/96 testing, the Association shall be relieved of any further obligation to satisfy the requirements of this Section 10.4. The manner in which the inspection and testing shall be conducted, and the extent of any inspection and testing to be conducted beyond that which was conducted by the Association prior to sending the Association's Notice, shall be determined by agreement of the Association and Declarant. Declarant shall pay all costs of inspection and testing that are requested by Declarant, restore the property to the condition which existed immediately prior to the testing and indemnify the Association and Owners for any damage resulting from the testing. Interior inspections of Residences shall be conducted in accordance with the Project Documents, unless otherwise agreed to by the affected Owner. The results of the inspection and testing shall not be inadmissible in evidence in any civil action solely because the inspection and testing was conducted pursuant to this subsection. 10.4.5 Settlement Offer: Within thirty (30) days of the completion of inspection and testing pursuant to Section 10.4.4 or, if no inspection and testing is conducted, within thirty (30) days of the meeting held pursuant to Section 10.4.3, Declarant shall submit all of the following to the Association: (a) A request to meet with the Board to discuss a written settlement offer; (b) A written settlement offer, which may include an offer to submit the dispute to alternative dispute resolution, and a concise explanation of the specific reasons for the terms of the offer; (c) A statement that Declarant has access to sufficient funds to satisfy the conditions of the settlement offer; and (d) A summary of the results of testing conducted for the purpose of determining the nature and extent of defects, if testing has been conducted; provided however, if the Association provided Declarant with actual test results in the Association's Notice, Declarant shall provide the Association with actual test results. If Declarant does not timely submit the items required by this subsection, the Association shall be relieved of any further obligations to satisfy the requirements of this Section 10.4. No less than ten (10) days after Declarant submits the items required by this subsection, Declarant and the Board shall meet and confer about the settlement offer, including any offer to submit the dispute to alternative dispute resolution. 10.4.6 Time Periods and Notices: At any time after delivery of the Association's Notice, the Association and Declarant may agree in writing to modify or excuse any of the time periods or LITTLE & SAPUTO A TTOR~VE'YS A T LA FF t90! OLYMPIC BOULEVARD. ~100 WAL,'.;L,'T CREEK, CA 9439~-5024 ($10) 944-5000 10.5 06/20/96 other obligations imposed by this Section 10.4. Except for the notice required pursuant to Section 10.4.7, all notices, request, statements or other communication required pursuant to this Section 10.4 shall be delivered by one of the following: (a) By first-class registered or certified mail, return receipt requested; or (b) In any manner in ~which it is permissible to serve a summons pursuant to Section 415.10 or 415.20 of the Code of Civil Procedure. 10.4.7 Rejection of Settlement Offer: If the Board rejects a settlement offer presented pursuant to Section 10.4.5, the Board shall hold a meeting open to each Member. The meeting shall be held no less than fifteen (15) days before the Association commences an action for damages against Declarant. No tess than fifteen (15) days before the date of the meeting, a written notice shall be sent to each Member specifying all of the following: (a) That a meeting will take place to discuss problems that may lead to the filing of a civil action; (b) The time and place of the meeting; (c) The options, including the filing of a civil action, that are available to address the problems; (d) The complete text of any written settlement offer and a concise explanation of the specific reasons for the terms of the offer submitted to the Board by Declarant and of any offer by Declarant to submit the dispute to alternative dispute resolution; and (e) The preliminary list of defects contained in the Association's Notice and a list of any other documents with the Association's Notice with information as to where and when Members may inspect those documents. Declarant shall pay all expenses attributable to sending the settlement offer and any offer for alternative dispute resolution to all Members and an amount not to exceed three dollars ($3.00) per Member to defray the expenses of holding the meeting. The discussions at the meeting, the contents of the notice and the items required to be specified in the notice are privileged communications and are not admissible in evidence in any civil action, unless the Association consents to their admission. 10.4.8 Association Relieved of ObliGations: If the Association is relieved of its obligations to satisfy the requirements of this Section 10.4 before all requirements have been satisfied, the Association may commence an action for damages LITTLE & SAPUTO 19Ol OLYMPIC BOULEVARD, #too WALNUT CREEK., CA 94596-5024 (~10) 9~-~000 10.6 06/20/96 0 O~ 0 0 against Declarant thirty (30) days after sending a written notice to each Member specifying all of the following: (a) The preliminary list of defects contained in the Association's Notice and a list of any other documents with the Association's Notice with information as to where and when Members may inspect those documents; (b) The options, including the filing of a civil action, that are available to address the problems; and (c) A statement that if five percent (5%) of the Members request a special meeting of Members to discuss the matter within fifteen (iS) days of the date the notice is mailed or delivered to the Members, ~ meeting of the Members shall be held. 10.4.9 Failure to ComDly: The only method of seeking judicial relief for the failure of the Association to comply with this Section 10.4 shall be the assertion, as provided for in this subsection, of a procedural deficiency to. an action for damages by the Association against Declarant after such an action has been filed. A verified application asserting such a procedural deficiency shall be filed with the court no later than ninety (90) days after the answer to the plaintiff's complaint has been served, unless the court finds that extraordinary conditions exist. Upon the verified application of the Association or Declarant alleging substantial noncompliance with this Section 10.4, the court shall schedule a hearing within twenty-one (21) days of the application to determine whether the Association or Declarant has substantially complied with this Section. The issue may be determined upon affidavits or upon oral testimony, in the discretion of the court. (a) If the court finds that the Association did not substantially comply with this Section, the court shall stay the action for up to ninety (90) days to allow the Association to establish substantial compliance. The court shall set a hearing within ninety (90) days to determine substantial compliance by the Association. At any time, the court may extend the period of the stay upon application of the Association if good cause is shown. If, within the time set by the court pursuant to this Section, the Association has not established that it has substantially complied with this Section, the court shall determine if, in the interest of justice, the action should be dismissed without prejudice or if another remedy should be fashioned. Under no circumstances shall the court dismiss the action with prejudice as a result of the Association's failure to substantially comply with this Section. In determining the appropriate remedy, the court shall consider the extent to which Declarant has complied with this Section. If the alleged noncompliance of either Declarant or the Association resulted from the unreasonable withholding of consent for inspection or testing by an Owner, it shall not be considered substantial noncompliance provided that the party alleged to be out of compliance did not encourage the withholding of consent. LITTLE & SAPUTO A TTO R.%'EYS A T LA V~ 1901 OLYMPIC BOULEVARD. ~100 WALNUT CREEK. CA 9459~5014 (510) 9~4-5000 10.7 06/20/96 If the Court finds that Declarant did not pay (i) all of the costs of inspection and testing or (ii) its required share of the costs of holding the meeting and of all expenses attributable to sending the settlement offer, all as required above, the court shall order Declarant to pay any deficiencies within thirty (30) days, with interest, and any additional remedy which the court determines, in the interest of justice, should be fashioned. 10.5 OPTIONAL LEGAL PROCEEDINGS: The Association is authorized to perform any act reasonably necessary to resolve any civil claim or action through alternative dispute resolution proceedings such as mediation or arbitration proceedings. The Board is also authorized to do all of the following: Provide, or in good faith attempt to provide, one hundred (120) days advance notice of (a) the Board's intent to initiate the prosecution of any civil action and (b) the nature and basis of the claim. If notice is given, it shall be given to every Member and every entity or person who is a prospective party to the action. Notice can be given more than one hundred twenty (120) days prior to the expiration of any pertinent statute of limitations and without prejudice to the Association's right to enforce the Project Documents. Notice need not be given prior to the filing of an action in small claims court or an action solely to enforce assessment obligations; Endeavor to submit the matter to alternative dispute resolution in compliance with the provisions of Section 1354(b) of the Civil Code prior to initiating the prosecution of a civil action solely for declaratory relief or injunctive relief (a) to enforce the Project Documents or (b) in connection with a claim for monetary damages of five thousand dollars ($5,000.00) or less; Make a reasonable effort, in good faith, to meet and confer with every person who is a party about (a) appropriate processes for resolving the civil action, including available alternative dispute resolution proceedings; (b) appropriate processes for avoiding or reducing costs or losses by the parties associated with the action; (c) providing an opportunity to cure any alleged defect in Common Area which is the basis for the action; and (d) providing for the scope of discovery, if any, to be conducted prior to the inception of any alternative dispute resolution procedure; Consider diverting the prosecution or defense of any civil action to alternative dispute resolution proceedings such as mediation or arbitration; and Agree to participate, and participate fully and in good faith, in the resolution of any civil action through any alternative dispute resolution proceedings, including but not limited to mediation or arbitration and pay costs reasonably incurred by the LITTLE & SAPUTO A1-fOR.¥EY$ Al' LA~V 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK, CA 94596-5024 (510) 944.5000 10.8 06/20/96 O Association on account of those alternative dispute resolution proceedings. LITTLE & SAPUTO 1901 OLYMPIC BOULEVARD, #lO0 WALNUT CREEK, CA 94~96-5024 (510) 10.9 06/20/96 0 ARTICLE XI ARCH ITECTUR3tL CONTROL 11.1 APPLICABILITY: Except as otherwise provided in this Declaration, proposals for Alterations shall be subject to the provisions of this Article and may not be made until approved in accordance with the provisions of this Article. The provisions of this Declaration requiring architectural approvals shall not apply to the original construction of any Improvements by Declarant or Additional Declarant, their agents, contractors or employees nor shall they apply prior to the first conveyance of a Lot to an Owner. The preceding sentence may not be amended without the consent of Declarant and Additional Declarant until all of the Lots in the Project owned by Declarant have been conveyed. 11.2 RESERVATION TO DECLARANT: Notwithstanding the power of the Board to appoint committees, Declarant hereby reserves to itself the right to appoint an Architectural Committee in accordance with the provisions of this Article. When there is no longer any Member appointed by Declarant on the Committee, the Board may decide to dissolve the Committee and undertake the Committee's responsibilities. 11.3 MEMBERS: The Architectural Committee ("Committee") shall consist of a chairman and two (2) or more additional members. Persons appointed to the Committee by the Board shall be Members of the Association. Persons appointed to the Committee by the Declarant need not be Members of the Association. All members shall serve until the expiration of the term for which they were appointed, if specified by the Board, or until they resign or are replaced. Declarant may appoint all of the original members of the Committee and all replacements until the first anniversary of the issuance of the Public Report for the first Phase of the Project. After the date which is one (!) year from the date of issuance of the Public Report for the first Phase of the Project and until the conveyance of ninety percent (90%) of all Lots or the fifth (Sth) anniversary of the issuance of the Public Report for the first Phase of the Project, whichever first occurs, the Board shall have the power to appoint one member of the Committee and Declarant may appoint the remaining members of the Committee. Thereafter, the Board shall appoint all of the members of the Committee or dissolve the Committee as provided in Section 11.2, above. Upon the conveyance of one hundred percent (100%) of all Lots, the term of any remaining members appointed by Declarant shall terminate and replacement members shall be appointed by the Board. The Board may appoint a replacement for any member of the Committee originally appointed by the Board who resigns or otherwise fails to act. Declarant may appoint a replacement for any member of the Committee originally appointed by Declarant who resigns or otherwise fails to act, unless such member resigns in order to enable the Board to appoint a member as required by this Section. If Declarant fails to appoint a replacement it is authorized to appoint within fifteen LITTLE & SAPUTO ,.I TTOR31EY$ .,,,I T I..,A W I901 OLYMPIC BOULEVARD, ~tO0 WALNUT CREEK, CA 94596-5024 (510) 944-5000 11.1 06/20/96 o (15) days after receiving notice of the vacancy, the Board shall appoint the replacement. 11.4 DUTIES: The Committee shall consider and act upon proposals and/or plans submitted pursuant to this Article. The Committee, from time to time and in its sole discretion, may adopt architectural rules, regulations and guidelines ("Architectural Standards"). The Architectural Standards shall interpret and implement the provisions of this Declaration by setting forth the standards and procedures for architectural review and guidelines for architectural design, placement of buildings, color schemes, exterior finishes and materials and similar features which may be used in the Project; provided, however, that the Architectural Standards shall not be in derogation of the minimum standards established, by this Declaration and they shall be consistent with the specific plan and the precise plan then in effect in the City for the Project. The Architectural Standards may include a schedule of reasonable fees for processing submittals and to establish the time and manner in which such fees shall be paid. 11.5 APPLICATION FOR APPROVAL OF IMPROVEMENTS: Any Owner, except Declarant and its designated agents, who wants to perform any Alteration for which approval is required shall notify the Committee in writing of the nature of the proposed work and shall furnish such information as may be 'required by the Architectural Standards or reasonably requested by the Committee. 11.6 BASIS FOR APPROVAL OF IMPROVEMENTS: The Committee may approve the~proposal only if the Committee finds that (i) the plans and specifications conform to this Declaration and to the Architectural Standards in effect at the time the proposal was submitted and (ii) the proposed Alteration will be consistent with the standards of the Project and the provisions of this Declaration as to harmony of exterior design, visibility with respect to existing structures and environment, and location with respect to topography and finished grade elevation. 11.7 FOPM OF APPROVALS AND DENIALS: Ail approvals and denials shall be in writing. Any denial of a proposal must state the reasons for the decision to be valid. Any proposal which has not been rejected in writing within sixty (60) days from the date of submission shall be deemed approved. 11.8 pROCEEDING WITH WORK: Upon approval of the Committee, the Owner Shall diligently proceed with the commencement and completion of all work so approved. Work must be commenced within one (1) year from the date of the approval. If the Owner fails to comply with the provisions of this Section, the approval given shall be deemed revoked unless the Committee extends the time for commencement. Any request for an extension shall be in writing. No extension shall be granted Unless the Committee finds that there has been no change in the circumstances under which the original approval was granted. LITTLE & SAPUTO A TTORA;EY$ AT L.4 W/ 1901 OLYMPIC BOULEVARD, #100 WALNUT CREEK~ CA 94596-5024 (510) 944-5000 11.2 06/20/96 kO (D 11.9 FAILURE TO COMPLETE WORK: Completion of the work approved must occur within eighteen (18) months following the approval of the work unless the Committee determines that completion is impossible or would result in great hardship to the Owner due ~to strikes, fires, national emergencies, natural calamities or other supervening forces beyond the Owner's control. If the Owner fails to complete the work within the eighteen (18) month period, the Committee may notify the Owner in writing of the non-compliance and shall proceed in accordance with the provisions of Section 11.11, below. 11.10 DETERMINATION OF COMPLIANCE: Any work performed, whether or not the Owner obtained proper approvals, shall be inspected and a determination of compliance shall be made as follows: 11.10.1 Notice of ComDletion: Upon the completion of any work perlformed by an Owner for which approval was required, the Owner shall give written notice of completion to the Committee. 11.10.2 InsDection: Within ~ixty (60) days after the Committee's receipt of the Owner's notice of completion, or, if the Owner fails to give a written notice of completion to the Committee within the Completion period specified in Section 11.9, above, a designee ofl the Committee may inspect the work performed and determine whether it was performed and completed in substantial compliance with the approval granted. If the Committee finds that the work was not performed or completed in substantial compliance with the approval granted or if the Committee finds that the approval re~lired was not obtained, the Committee shall notify the Owner in writing of the non-compliance. The notice shall specify the particulars of non-compliance and shall require the Owner to remedy the non-compliance. 11.11 FAILURE TO REMEDY THE NON-COMPLIANCE: If the Committee has determined that an Owner has not constructed an Improvement consistent with the specifications of the approval granted or within the time permitted for completion and if the Owner fails to remedy such inon-compliance in accordance with the provisions of the notice of nOn-compliance, then after the expiration of thirty (30) days from the date of such notification, the Committee shall notify the Board, iand the Board shall provide Notice and Hearing to consider the Owner's continuing non-compliance. At the Hearing, if the Board finds that there is no valid reason for the continuing non-compliance, the Board shall determine the estimated costs of correcting it. The Board shall then require the Owner to remedy or remove the Same within a period of not more than forty-five (45) days from the date of the Board's determination. If the Owner does not comply with the Board's ruling within such period or within any extension o!f such period as the Board, in its discretion, may grant, the Board may either remove the non-complying Improvement or remedy the inon-compliance. The costs of such action shall be assessed against the Owner as a Reimbursement Assessment. LITTLE & SAPUTO A ~I'OR~¥KY$ AT 1901 OLYMPIC BOUL~ARD, al00 ~ALNUT CREE~ CA (~10) 9~-50~ 11.3 06/20/96 ~D O~ 0 0 11.12 WAIVER: Approval of any plans, drawings or specifications for any work proposed, or for any other matter requiring approval shall not be deemed to constitute a waiver of any right ~to deny approval of any similar plan, drawing, specification or matter subsequently submitted for approval. 11.13 APPEAL OF DECISION OF COMMITTEE: This Section does not apply if the Board has dissolved the Committee or during the period. of time that a majority of the Members of the Architectural Committee have been appointed by Declarant. If any Owner who performs an Alteration on a Lot or Residence disputes the jurisdiction or powers of the Committee or any requirement, rule, regulation or decision of the Committee (collectively referred to as "decision"), the Owner may appeal such decision to the Board. The Board shall notify such Owner of the time, date and place of a hearing to review the decision of the Committee. The notice shall be given atileast fifteen (15) days prior to the date set for the hearing and may be delivered either personally or by mail. If delivery is!made by mail, it shall be deemed to have been delivered seventy-twol (72) hours after it has been deposited in the United States mail~ first class, postage prepaid, addressed to the Owner at the address given by the Owner to the Board for the purpose of service of notices or to the address of the Owner's Lot if no other address hasibeen provided. After the hearing has taken place, the Board sha!linotify the Owner of its decision. The decision shall become effective not less than five (5) days after the date of the hearing. The determination of the Board shall be final. 11.14 LIABILITY: Neither the Committee nor any member shall be liable tO the Association or to any Owner for any damage, loss or prejudice suffered or claimed by reason of mistake in judgment, negligence, ~or nonfeasance arising out of or in connection with: (a) the approval or' disapproval of any plans, drawings and specifications, whether or not defective; (b) the construction or performance~of any work, whether or not pursuant to approved plans, drawings, and specifications; (c) the development of any property within the Project; (d) the execution and filing of any estoppel certificatel whether or not the facts therein are correct; or (e) any defect for failure, whether in design, suitability of soils, adequacy of~drainage, specifications or construction. !1.15 ESTOPPEL CERTIFICATE: Within thirty (30) days after a determination of compliance is made pursuant to Section 11.!0 and written demand is delivered to the Board by any Owner, and upon payment to the Association of a reasonable fee (as fixed from time to time by ithe Association), the Board shall record an estoppel certificatei executed by any two (2) Directors, certifying that as of the datelthereof, either: (a) the work completed complies with this Declaration or (b) the work completed does not comply. In the latter situation, the certificate shall also identify the particulars! of the non-compliance. Any successor in interest of the Owner shall be entitled to rely on the certificate with respect to the matters set forth. The certificate shall be conclusive as LITTLE & SAPUTO 1901 OLYMPIC BOULEVARD. #1oo WALNUT CREEK, CA 9459~5024 (510) 9~a-5000 11.6 06/20/96 '%0 O~ 0 0 between the Association, Declarant and all Owners and such persons deriving any interest through any of them. LITTLE & SAPUTO A rTORA'~'$ AT 1901 OLYMPIC BOULEVARD, ~100 WALN U~ CREE~ CA (~10) 944.5000 11.5 06/20/96 ~0 0 0 ARTICLE XII ANNEXATION 12.1 RESTRICTION ON ANNEXATION: Property may be added to the Project by annexation only in accordance with the provisions of this Article. 12.2 pROPERTY WHICH MAY BE ANNEXED; APPROVAL OF MEMBERS: Ail or any port!ion of the Additional Property may be added to the Project by Declarant or Additional Declarant as one or more subsequent Phases without the approval of the Association or any Owner, if ~nnexed prior to the third (3rd) anniversary of the original issuance of the most recent Public Report issued for a Phase of the Project ("Annexation Period"). Property other than the Additional Property and any portion of the Additional Property not annexedl within the Annexation Period may be annexed to the Project only with the approval of two-thirds (2/3rds) of each class of Members. 12.3 PROCEDURE FOR ANNEXATION: In .addition to any required approval by Members, a final subdivision map(s) or final parcel map(s) and ia Declaration of Annexation for the property to be annexed must be recorded. The Declaration of Annexation shall: (i) describe the portion of the Additional Property to be annexed; (ii) describe any Common Area within the Additional Property to be annexed; (iii) set forth the ownership of any such Common Area; and (iv) specify that all of the covenants, conditions and restrictions of this Declaration shall apply to the annexed Additional Property in the same manner as if it were originally covered by this Declaration, The Declaration of Annexation shall also provide that if and only if at the time of the first conveyance of a Lot in a Phase Declarant has rented or leased Lots in that Phase for a period of at least one (!) year after the most recent review of a budget for that Phase by the Department of Real Estate, Declarant shall pay to, the Association the following amount: an amount equal to that porLion of the Regular Assessment which would have been attributable to each Lot in that Phase and which would have been allocable to reserves for replacement and deferred maintenance of Common Area! Improvements had Regular Assessments in that Phase commenced at the time of the most recent review of a budget for that Phase. ~ Such amount, if any, shall be paid to the Association prior to or ~concurrently with the first conveyance of a Lot in that Phase. The Declaration of Annexation may also (i) impose any additional covenants, conditions and restrictions on the Additional Property that are necessary to include the property in the Project and to reflect differences in nature, if any, of the Improvements to be constructed on the Additional Property and (ii) provide for a specified date on which assessments shall commence for Lots in that Phase, provided that the date specified may not be later than the first day of the first month following the month in which the first Lot in that Phase is conveyed to an Owner. No Declaration of Annexation shall diminish the covenants, conditions or restrictions established by this Declaration nor shall it discriminate between LITTLE & SAPUTO A TTOR.~,'EY$ A T LA w 1901 OLYMPIC BOULEVARD, Il00 WALNUT CREEK. CA 9a$96-5024 (St0) 9-~-5000 12.1 06/20/96 0 0 the Owners lin the Project. No Declaration of Annexation shall alter or change the general common plan or scheme created by this Declaration nor shall it affect the provisions hereof as covenants running with the land or as equitable servitudes. 12.4 EFFECT OF ANNEXATION: After complying with the procedures for annexation and upon the commencement of assessments for Lots in the annexed Phase, Owners of Lots in the annexed Phase shall be Members, shall be subject to this Declaration and shall be entitled to use all Common Area in the Project. The Association shall reallocate the Regular Assessments so as to assess each Owner of a Lot in the Project for a proportionate share of the total expenses of~the Project. 12.5 DEANNEXATIONAND AMENDMENT: Declarant has the right, at its sole option, to (i) amend a Declaration of Annexation by executing and recording an amendment of the Declaration of Annexation iprovided that the amendment is consistent with this Article, or! (ii) remove from the Project any property described in a recorded Declaration of Annexation for a Phase by executing and recording a:rescission of the Declaration of Annexation, as long as all of the ~foltowing conditions are satisfied at the time of the execution and recordation of the amendment or rescission: (a) no Lot in thatiPhase has been conveyed to an Owner; (b) no Common Area in that Phase has been conveyed to the Association; and (c) assessmentslhave not commenced for any Lot in the annexed property. 12.6 AMENDMENT: After the conversion of Class B membership to Class A membership and until the day following the date which is the third (3rd) anniversary of the original issuance of the most recent Public Report issued for a Phase of the Project, this Article may!not be amended without the written consent of Declarant and Additional Declarant unless all of the Additional Property has been annexed to the Project. LITTLE & SAPUTO A I~I'OR..~/EYS A T LA W 190l OLYMPIC BOULEVARD, ~100 WALNUT CREEK, CA 94596-5024 (510) 944-5000 12 .2 06/20/96 0 ARTICLE XIII MISCELLANEOUS PROVISIONS 13.1 TERM OF DECLARATION: This Declaration shall continue for a term of fifty (50) years from its date of recordation. Thereafter, this Declaration shall be automatically extended for successive periods of ten (10) years until two-thirds (2/3rds) of the Owners approve a termination of this Declaration. 13.2 ~ONSTRUCTION OF PROVISIONS: The provisions of this Declaration shall be liberally construed to effect its purpose of creating a aniform plan for the development and operation of a planned development pursuant to the provisions of Section 1350, et seq. of the California Civil Code. 13.3 BINDING: This Declaration shall be for the benefit of and be binding upon all Owners, their respective heirs, legatees, devisees, executors, administrators, guardians, conservators, successors, purchasers, tenants, encumbrancers, donees, grantees, mortgagees, lienors and assigns. 13.4 SEVERABILITY OF PROVISIONS: The provisions hereof shall be deemed independent and severable, and the invalidity or unenforceability of any one provision shall not affect the validity or enforceability of any other provision hereof. 13.5 GENDER, NUMBER AND CAPTIONS: As used herein, the singular shall include the plural and masculine pronouns shall include feminine pronouns, where appropriate. The title and captions of each paragraph hereof are not a part thereof and shall not affect the construction or interpretation of any part hereof. 13.6 REDISTRIBUTION OF PROJECT DOCUMENTS: Upon the resale of any Lot by any Owner, the Owner shall supply to the buyer of the Lot a copy of each of the Project Documents. 13.7 EXHIBITS:· Ail exhibits attached to this Declaration are incorporated by this reference as though fully set forth herein. 13.8 REOUIRED ACTIONS OF ASSOCIATION: The Association shall at all times take all reasonable actions necessary for the Association to comply with the terms of this Declaration or to otherwise carry out the intent of this Declaration. 13.9 SUCCESSOR STATUTES: Any reference in the Project documents to a statute shall be deemed a reference to any amended or successor statute. LITTLE & SAPUTO A TTO/bVEY$ A T LA F/ 1901 OLYMPIC BOULEVARD, 9100 WALNUT CREEI~ CA 94596-5024 ($10) 13.1 06/20/96 O O 13.10 CONFLICT: In the event of a conflict, the provisions of this Declaration shall prevail over the Bylaws and the Rules. IN WITNESS WHEREOF, the undersigned have executed this Declaration on the day of , 1996. DECLDH2ANT: CENTEX REAL ESTATE CORPORATION, a Nevada corporation By: Name: Title: ADDITIONAL DECLARJLNT: SUNCHASE G.A. CALIFORNIA I, INC., a California corporation By: Name: Title: OWNERSHIP CONSENT The undersigned is the record fee owner of a portion of the Additional Property. The undersigned hereby consents to the execution and recordation of the Declaration and agrees that upon recordation of a Declaration of Annexation in accordance with Section 11.3 of this Declaration, the Additional Property owned by the undersigned and described in such Declaration of Annexation shall be bound by the Declaration to the same extent and with the same force and effect as though initially included within the Subject Property. Dated-: 1996 COMMONWEALTH LAND TITLE COMPANY, a California corporation Dated: , 1996 By: Name: Title: LITTLE & S^PUTO A rTOR. Wa"Y$ A T ~ ~ 1901 OLYMPI~ BOUL~ARD. ~100 WALN~ CREE~ CA 9459~5024 (SlO) 90-5000 13.2 06/20/96 State of California County of ) ) ss. ) On , 199__, before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public State of California County of On personally known to me , 199__, before me, , personally appeared (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS mY hand and official seal. Notary Public LITTLE & SAPUTO A F'I'OR.~IEY$ A r [..A gl 1901 OLYMPIC BOULEVARD, ~,100 WALNUT CREEK, CA. 94596-5024 (510) 94.4-5000 13.3 06/20/96 State of California County of On , 199__, before me, , personally appeared personally known to me (or proved to me on the basis of' satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument, the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public LITTLE & SAPUTO .4 TTOP,,',,'E¥$ ,4 T I-4 m' I90! OLYMPIC BOUL~VAgD, .9100 WALNUT CREEK~ CA 94596-5024 (510) 944-$000 13.4 06/20/96 A B C D EXHIBITS Description of Additional Property (Section Maintenance Responsibility Table (Article V) Collection Agreement (Section 6.10) Maintenance Plan (Section 5.1.2) 2.2) LITTLE & SAPUTO d ',I'TOR. VE'YSAT L.A gg 1901 OLYMPIC BOULEVARD, ~100 WALNUT CREEK. CA 94596-5024 ($lO) 944-5000 13.5 06/20/96 o r~ O EXHIBIT "A " Terrabay l, qllage [Legal Description of Additional Property] All the real property located in the City of South San Francisco, County of San Mateo, State of California, described as follows: PARCEL ONE: Lots 1 through 12, inclusive, 21 through 30, inclusive, 49 through 58, inclusive, and 71 through 161, inclusive and lots 173, 174 and 175, as shown on the subdivision map of Terrabay, filed for record on July 2, 1990, in Book 121 of Maps at Page 65 et seq., in the Official Records of the County of San Mateo, State of California. PARCEL TWO: Lots 162 through 168, inclusive, 171, 172, 176 through 178, inclusive, 180 through 194, inclusive, and 196, as shown on the subdivision map of Terrabay, filed for record on July 2, 1990, in Book 121 of Maps at Page 65 et seq., in the Official Records of the County of San Mateo, State of California. TERRABAY VILLAGE MAINTENANCE RESPONSIBILITY TABLE ITEM RESPONSIBLE PARTY MASTER ASSOCIATION SUBASSOCIATION OWNER GENERALLY: Master Association Common Area Ycs No No Subassociation Common Area No Yes No SPECIFIC IMPROVEMENTS: Drainage (including subdrains): Must be inspected and maintained in accordance with Maintenance Plan Driveways and walkways Master Association Common Area No Subassociation .Common Area or on an unenclosed portion of a Lot Within enclosed portions of Lot Fences and Retaining Walls Master Association Common Area, including perimeter thereof [ekcluding surface facing away from Master Association Common Area) Subassociation Common Area and Lots te:~cepting fence surfaces acing Lots) Fence surface facing Owner's Lot. Homes: Must be maintained in accordance with standards established in Section 5.3 of the Terrabay Village Declaration or in Rules Landscaping and Irrigation: Must be maintained]n accordance with standards established in Section 5.6 of the Terrabay Master Declaration or in Rules No Master Association Common Area Foundations, Roofs, Exteriors, Decks (including walls and railings) Subassociation Common Area and unenclosed portions of Lots Yes,. except portmns maintained .by Subassociatmn Par~y Wails are to be jointly maintained by adjoining Owners Within enclosed portions of Lots Lighting No Within Suba.ssociation Common Area and F~ures served by Subassociation electric Fixtures served by Owner's electric meter Parking Areas No All No Sanitary Sewers No Main lines except to ext.ent of public maintenance Laterals Traffic Control Devices No Subassociation Common No Area If any Improvement required to be maintained by the 3ffaster Association or the Subassociation is damaged by the negligence or willful conduct of an Owner or an Owner's Invitee, the party responsible for performance df the r~ep_air shalf not be shifted; however, the Master Association or the Subassociation, as the case may be, shall be entitled to levy a Reimbursement Assessment to recover its costs as provided in Section 6.4 of the Declaration. LITTLE & SAPUTO ATTORNEYS A T LA W 1901 OLYMPIC BOULEVARD, ~IO0 WALNUT CREEK. CA 94596-5024 (510) 944-5000 Exhibit "B" 0 6 / 2 0 / 9 6 kO 0 REC()Ri)EI) AT TIlE REQUEST ()F: WlIEN RECORDED RETURN TO: COLLECTION AG REEMENT between the SAN BRUNO MOUNTAIN AREA 'HABITAT CONSERVATION TRUST and TERRABAY TOWNHOME SUBASSOCIATION (TERRABAY VILLAGE) THIS COLLECTION AGREEMENT ("Agreement") is made effective as of the Effective Date by and among the Trustees of the SAN BRUNO MOUNTAIN AREA HABITAT CONSERVATION TRUST ("HCP Trust"), SUNCHASE G.A. CALIFORNIA I, INC., a California corporation, and CENTEX REAL ESTATE CORPORATION., a Nevada corporation, (collectively "Landowners") and TERRABAY TOWNHOME SUBASSOCIATION, a non-profit mutual benefit corporation incorporated under the laws of the State of California ("AssoCiation"). RECITALS: 1. Each of the parties enters into this Agreement in recognition of the following facts: A. The 10(a) Permit issued by the United States Fish and Wildlife Service'to the County of San Marco, California, and the Cities of Brisbane, Daly City and South San Francisco, California, under which Landowners are authorized to build a residential housing project, including other related uses, known as "Terrabay" in the City of South San Francisco, requires that there be a permanent funding source for habitat preservation and that requirement must be met. B. :Thc Trustees of the HCP Trust, thc Association and Landowners have determined that it is in the best interests of both the HCP Trust and the future owners of single family Units in Terrabay Village that during such periods as the funding source set forth in Article VI.A.2. of the HCP Agreement is operative, that thc payments of ~he HCP Assessments to the HCP Trust by individual Unit Owners who are members of the Association be made through the Association acting as collection agent on behalf of the HCP Trustees pursuant to this Agreement. 2. Defioitions: For thc purpose of this Agreement, the following capitalized terms shall have thc following meaniags: 2.1 Effective Date: The term "Effective Date" means the date on which the last party to sign this Agreement signs the same as evidenced by the date opposite the signatures of the parties hereto. l 05~30/96 I.['FI'L[-~ & SAPUTO ,4 TTORNE"t'$ .4 T L.,414t · ~ l'~Jl OLYMPIC BOULEVARD, II0O WALN UT CREEK. CA 94596-5024 (no) 9,~.5ooo Page 1 of 6 Exhibit "C" 0 2.2 IICI' ..\~'.rccmcnl; Thc lcrm "1 {CP Agreement" means Ibc "Agreement \Vilh Respect To Thc San Bruno Motlnlain :Xrca l tabil;iC cmcrcd..~nm as of thc 4th day of March. 19S3, I}y ;md among thc United States Fish and Wildlife Service, ('alilorni;~ I)cpartmcnt ,~1' Fish and (;amc, C?alilk~rnia Depart mcnl of Parks and Recreation, thc (J0tllllV el' Nail Malcts, ibc Cilv of Brisbane, thc Cily of Dalv City, Ibc Cilv of Soi~lh San- Francisco, Visitacitm .'XSSOCi;IIGs, ;md olhcrs as scl forth tm Exhibil "A" lhcrclo, and any amendments thereto, recorded March 22, 19$3, Series Number S3026343, Official Records of San Marco Ctmnty. 2.3 HeP Assessment: Thc term "HEP Asscssnlcnt" means thc assessments levied by thc HeP Trust pursuant to thc HCP Dcclaratitm. 2.4 HeP Declaration: Thc term "HCP Dcclaratkm" means thc Declaration of Covenants and Restrictions on Real Property on San Bruno Mountain recorded on , 1996, in the Official Records of San Marco County, State of California, as Document No. , pursuant to thc requirement of Artiiclc VI.A.2 of thc HeP Agreement. 2.5 Project: Thc term "Project" means the portions of thc Terrabay Village project created pursuant to the Project Declaration. 2.6 project Declaration: The term "Project Declaration" means the Declaration of Covenants, Conditions and Restrictions of Terrabay Village recorded or to be recorded in the Official Records of San Marco County, State of California. 2.7 Trust Account: The term "Trust Account" means the trust account referred to in Paragraph 3 of this Agreement. 2.8 Trust Account Reserve: The term 'Trust Account Reserve~ or "Reserve" means the reserve referred to in Paragraph 3.2 of this Agreement. 2.9 Unit Owners: The term "Unit Owner" means the Owner of a single family Unit in the Project. 2.10 Other Capitalized Terms: Any other capitalized term contained in this Agreement, unless the context clearly indicates a different meaning, shall have the meaning given to it in the HCP Agreement if such term is defined thierein, or the meaning given it in the Project Declaration if such term is defined therein, provided that where a term is used in both the HCP Agreement and the Project Declaration, such term shall have thc meaning given it in the HCP Agreement. 3. Trust Account. 3.1 Establishment of Trust Account: Prior to close of escrow for the sale of the first Unit in the Project, the Association shall open an interest bearing trust account with a bank or savings and loan association insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, as the case may be, to be called the "HCP Terrabay Village - San Bruno Mountain Area Habitat Conservation Trust Account." The Trust Account shall be established and maintained by the Association for the benefit of the HCP Trustee~ and funds shall be withdrawn therefrom by officers of the Association only for the benefit of the HCP Trust in accordance with Paragraph 6.10 of thc Project Declaration and the terms of this Agreement. 3.2 Trust Account Resort, e: Thc Association acknowledges that the HeP Trustees intend that the Trust Account shall constitute, in part, a reserve fund against potential future delinquencies by Unit Owners in thc payment of thc HCP Assessments and that the HeP Trustees desire to maintain a balance in thc Trust Account in an amount equal to 25% of the total annual HCP Assessments for Units in the Project (as adjusted to reflect changes in the value of the Dollar) as set forth in the most recent notification from the HCP Trustees pursuant to Paragraph 5 hereof ("Reserve Amount"). The HCP Trustees acknowledge, however, that the Reserve Amount may drop below 25% when occasioned by payments therefrom to the HCP.Trust of amounts 2 05/30/96 I.ITTLE & SAPU'FO .4 TTOR2,'£YS .4 r L.,4 ~ ' - lg~l OLYMPIC BOULEVARD. #100 WALNUT CREEK, CA 94596-50~'4 (s~o) ,,~.sooo Page 2 of 6 Exhibit "C" representing delinquencies in payments of thc t4CP Assessment by Unit ()wncrs. In Ibc cvcm thc hal:race thc Trust Account at any time is less than thc Reserve Amount, thc Board of thc Association shall notil'v thc HCP Trustees and annually on October I in any event, thc Board of thc Association shall furnish tt~ thc I Trustees all statements prepared by thc depository showing all actMty in thc Trust Account during thc prcccdiug year and th(: current Trust Account balance. 3.3 Li~ndowners Funding. of Reserve Amount: Prior to or concurrently with close of escrow for Landowners's sale of the first Unit in tile Project, Landowners shall deposit in the Trust Account an amount equal to $~ ~representing the initial Reserve Amount, being 25% of the total annual HCP Assessments which would be lev/cd against the total number of Units planned in tile Project at the rate of $ per Unit per annum. After such deposit has been made, Landowners shall have fully performed its obligations under this Agreement and Landowners shall have no further obligations of any kind or nature under this Agreement. Notwithstanding thc foregoing, Landowners shall remain obligated to perform its separate obligations, it' any, as a Landowner under the J-ICP Agreement and to pay assessments levied pursuant to the terms of the l'rojcct Declaration and the HCP Declaration to the ement it is a Unit Owner in thc Project. 3.4 HCP Assessment for Reserve: If after its initial funding by Landowners pursuant to Paragraph 3.3 above, the balance in the Trust Account at any time is less than thc Reserve Amount, the HCP Trustees shall add ~o the HCP Assessment as otherwise determined pursuant to thc HCP Declaration an amount not to exceed 25% in any one year until the Reserve Amount is reestablished. Whenever thereafter the HCP Trustees learn thai: thc Reserve Amount has been reduced below the level established hercinabovc, the HCP Trustees shall include an amount in the next HCP Assessment sufficient to restore the Reserve Amount to such level. In making the calculations for this purpose, the HCP Trustees may include a reasonable projection of the delinquency factor in the making of payments of the HCP Assessment. 4. Notice of HCP Assessment; Collection of HCP Assessments: On or before October 1 of each year, the HCP Trustees shall give notice in writing to the Board of the Association of the amount of the next year's HCP Assessment as adjusted in accordance with the terms of the HCP Declaration to reflect changes in the value of the Dollar and as augmented by the amount, if any, determined by the Trustees to be necessary to set or maintain the ReServe Amount in the HCP Trust Account at the Reserve Amount established in Paragraph 3.2 hereof. On or before October 10 of each year, or such other date or at such more frequent intervals as the HCP Trustees in writing may designate, the Board of the Association shall give notice in writing to each Unit Owner subject to the HCP Assessment, of the amount of his, her or its assessment as set forth in such notice from the Trustees. Thereafter, the Association shall collect the amount of the HCP Assessments from Unit Owners pursuant to the collection authority contained herein and shall deposit all HCP Assessments so collected in thc Trust Account. 5. Payment to HCP Trust: On or before November I0 of each year or such othe~ date or at such more frequent intervals as the HCP Trustees in writing may designate (provided such earlier designation corresponds to the earlier leW of assessments pursuant to Paragraph 4, above), the Board of Association shall pay or cause to be paid from the Trust Account to the HCP Trust in accordance with this Agreement so much of the funds in the Trust Account as shall be required to meet the lawful demands of the HCP Trust as established in the HCP Declaration. From the Reserve Amount the Association shall pay the HCP Assessment of any Unit Owner or Unit Owners who have failed to currently pay the HCP Assessment. If the Reserve Amount in the HCP Trust Account is not sufficient to pay the amount of all delinquent HCP Assessments in full, if any, thc Board of thc Association shall immediately notify the HCP Trustees. Thc Association shall have no responsibility to pay any deficiency in HCP Assessments from thc Association's own funds so long as the Association's obligations under this Agreement have been met. 6. HCP Assessment Lien: In every case where the Association has caused payment to be made to the HCP Trust from the Reserve Amount for any Unit Owner who is delinquent in making payment of his, her or its HCP Assessment, the Association thereby and thereupon shall be empowered to enforce the lien for delinquent assessments conferred upon the HCP Trust by the HCP Declaration, and the Association, as 3 05/30/96 I.I'I~FLE & SAPUTO .4 TTOR.X'E'FS .4 T L.,4 ~; - I,~01 OLYMPic BOtJL~"¥ARD. # IOO WALNUT CR~[~K. CA 94596.502.l ts~o~ 9,~.s000 Page 3 of 6 Exhibit "C" collection agent under Ibis Agreement, sh:dl bc tnt i! lcd ~o rccovcr all attorneys' fees, costs and cxpcnsc~ incurred bv ~1 in accordance with thc prt)viskms of Iht l lCd]) Dcclaralkm. This Agrccmcnl shall ct)nstitt~lc a complete delegation of authority I'rom thc HCP Trustees to thc Board of thc Association to Chi'oreo thc IICI' Declaration lien against thc Unit of any dctimlucnt tlnit ()wncr to [he full extent of thc payment or payments thc Association has made to thc HCP Trust from thc Reserve Amount, and nt) further actit)n by thc HCP Trustees is required lo perfect such authority in thc Board of thc Associatitm. 7. Amendimcnt: This Agreement can bc amended only by a writing executed by all of the parties hereto, provided tllat Landowncrs and its assigns tlr successors in interest shall cease to bca party for any purpose when thc Trust Account has bccn funded ils provided in Paragraph 3.3. 8. Altcrm!te Financintt of HCP: If financing of habitat conservation under thc HCP Agreement is hereafter provided by an assessment or other tax collection mechanism by which an amount equivalent to thc HCP Assessment must be paid directly by Unit Owners to the County or a City incident to the collection of tm<cs as envisaged in Article VI.AA. of thc HCP Agreement ("Alternative Financing"), then the obligations created by this Agreement shall cease and remain dormant until such time, if ever, as the Alternative Financing method becomes inoperative. The HCP Trustees shall notify the Association of the nature of the Alternative Financing that has been adopted, the date or dates on which the rights and duties of the parties to this Agreement shall, until further notice) cease and the terms of the transfer of the balance in the HCP Trust Account to the County (or other entity conducting the Alternative Financing assessment proceedings) to be applied by it against the first, and if sufficient funds remain, subsequent years' assessments. 9. Covenants to Run With Land: Without limiting the legal effect of other provisions of this Agreement, the parties declare it to be their intention that the rights and duties established by this Agreement are intended to implement the 10(a) Permit, the Project Declaration, the HCP Agreement and the HCP Declaration, and a~ such shall run with the land and be binding upon and inure to the benefit of their respective assigns or successors in interest. This Agreement affects the title of the lands within the Project and of the Conserved Habita{ of the San Bruno Mountain Area, as def'med in the HCP Agreement, and the covenants and conditions herein ~elate to the beneficial use and enjoyment of all such lands. The provisions of tiffs Agreement shall benefit and shall be binding upon each of the parties hereto and their respective successors in interest. 10. Miscellaneous Provisions: 10.1 No Fee for Services: The Association acknowledges that this Agreement provides the Unit Owners with a convenient and efficient mode of collection of the HCP Assessment, and therefore thc Association agrees that it will perform the collection service provided for herein without fee and that it shall receive no compensation or reimbursement from the HCP Trust for the performance of its duties hereunder except for costs and attorneys' fees 'mthorized under Paragraph 6 hereof. 10.2 Termination of Attreement: The HCP Trustees may terminate this Agreement by providing notice of the intemion to do so in accordance with the provisions of paragraph 10.3 hereof. Termination of the Agreement shall be effective thirty (30) days after notice is given. Upon termination of thc Agreement, thc Association shall deliver to the HCP Trustees any books and other records relating to the collection of HCP Assessments under this Agreement, and shall remit to the HCP Trust any and all funds that the Association is then holding for the benefit of thc HCP Trust. Upon termination of the Agreement, thc Association shall have no further duty tol collect HCP assessments. 1.D.3 ~otices: Notices provided for herein may bc personally delivered to thc person occupying thc position set forth below or shall be deemed given fivc days after deposit in the United States mail, certified and postage prepaid, ~teturn receipt requested and addressed as follows, or to such other address of which a party from time to time may give notice to the other parties: 4 05/30/96 l.l'l-l'l.t! & SAPUTO .4 TTOR.VEY$ ,4 T LA tV - OLYMPIC 8OLiLI'~tARD. # 100 W^I.Nu'r CREEK. CA 9459(}-5014 (s~0) o~-s000 Page 4 of 6 Exhibit "C" O~ 0 0 HCP: Sim Bruno Mountain Area Ilabilat Const:rvation Trust C/O San Marco (.~ounty Director of Environmental Services County Government Center Redwood City, CA 940(,.3 Landowners: Sunchasc G.A. California I, Inc., 6001 N. 24th Street, Suite A Phoenix, AZ, 85016 Attn: Director of Legal Scrviccs and Centex Real Estate Corporation 1855 Gateway Blvd., Suite 650 Concord, CA 94520 Attn: Association: Terrabay Townhclme Subassociation c/o Centex Real Estate Corporation 1855 Gateway Blvd., Suite 650 Concord, CA 94520 Attn: President 10.4 Agreement to be Recorded: This Agreement shall be recorded in the Official Records of the County Recorder, County of San Mateo, State of California. 10.5 Costs of Litigation: If legal action is required to interpret or enforce this Agreement, the pt2evailing party shall be entitled to recover its attorneys' fees and costs of litigation. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth opposite their respective signatures. SAN BRUNO MOUNTAIN AREA HABITAT CONSERVATION TRUST Dated: , 1996 By: Trustee Trustee Trustee LI'Iq'LE & SAPUTO ATTORNE¥$ A T LA V/ 1901 OLYMPIC BOLiLt~'VARD, #lO0 WAI.N UT CRI:'I~K. CA 94596-502'l (51o) o*~.5ooo Trustee 5 Page 5 of 6 05/30/96 Exhibit "C" ~0 0 SUNCItASE (;.A. CALIFORNIA I, INC.. a Cali£ornia corporation Dated: , 1996 By: Title: CENTEX REAL ESTATE CORPORATION, a Nevada corporation Dated: · 1996 By: Name: Title: Dated: ,1996 TERRA. BAY TOWNHOME SUBASSOCIATION, a California nonprofit mutual benefit corporation By: President Dated: ,1996 By: Secretary LI'I'FLE & SAPUTO .4 TTOR^'bD'S .4 T 1,4 w 190! OLYMPIC BOULEVARD, i 100 t&'ALNUT CREI~K. CA 94596.$024 (510) 6 Page 6 of 6 {)5/30/{)6 Exhibit "C" 0 0 COMMON AREA AND LOT MAINTENANCE PLAN FOR TERRABAY SUBASSOCIATIONS. Paae 1 of 4 ~o o~ o ,-Xxca drains ~e ~ypica. lly made of 4 to 6-inch plastic pipe ~nd .xre located in 2a'otmd buildir,~js, and, possibly, on the upLfitl side of ~u'cets bz.5.Und ~he ouch. These drains have. beea provided to ~ollect runoff from roof leaders, and earthen bcrrns and swales. Th: ,ability of these drains to carry runoff~way fi-om thc ~lopes ~o the ]~ger do,,,ns~rea.m storm drain ~ystem is csse~qfial for slope eroiion protection. required to keep the area drains operational include the following: · Flush ail lines !once evecy three years with a sewer bail, TNs clezming should be sufficient to remove sediment buildup mad root intrusion. Periodic monitoring of the soil moisture content in thc l~d.scaped are~ should be performed to csmblisk th= proper watering cycle, Excessive water buildup on slope may cause slope destabilization &nd ~hould be ~voided. · Shutoff' and isolation vtlve~, as shown on the "A~-Buih" drawings ~d indicated by field marker pos'ts, should be exercis~ annually to insure proper operation during emergencies. W^TFR SgR_vlcEs A~'CD SEW~.R LAT'g. RAL$ Eac~ indi',,idual milt is provided ~.4th a water and sewer service lateral. It is imperative that these services don't leak ~d produce slope erosion. 'I-ne rcq~red ma/nteaance consists oft& following task: · The Homeo~.'ners Association shall incorporate into its landscape ma./.menanco progr~a'n a schedule to re~iew the water sen'icz, s and ~ewer late~s for lea3cag¢ on a bi-~n.nua] basis. Vcgc'~ation ~jaccnt to water mete.rs, water :;hut-off' valves &ad sallita23t sewer cle~nout$ should be pruned annu~y or ~ reqmred to allow easy access to facilities during emergencies. Page 2 of 4 Exhibit "D" .~unual no,fica[ion sh~Jl bc sen[ to ho~nco~ners nt,tuSm,g ~hem of thc need to rno.nJ:o: ='a~-~r and check for excessively high consumption. Above average u.'ater consumption m~y b= indicative of a ~ysu~m leak. · Clear all &ain inlets prior to thc onset of winter, and inspect ~em periodically through thc winter. Inspect the surf~icc over ~11 linca annu,,lly for dcpre~sior~. Surface depression over thc pipe indicates either a, trench failure, or that the underground pip~ may bo broken or frac~u:ect. Allo~ing ~au:r to pond ia 'the dcpr~aion will worse, n ~e problem. The section of pipe under thc depression should bc excavated, inspected for cr~ks, and replaced it' structural dama§e is found. LAlfDSCA~E SPRINKLER SYSTEMS Sprinkler Wstems have be~n provided for the pm'pose of irrigation of tho landscaping. If the ~prinklor pipes axo l~roken or leak, or over. irrigar:, they will deposit ~aler ~boYe and below the ground c~using erosion ~md slope failure on the slopes beto~v. Maintertanc¢ tasks required to k¢~p thc sprinkler systems operating correctly, which should be p-.a-formed by the landxcap¢ contr~mr, include the following: · Operate and inspect all sprinkler systems on a monthly basis and adjust the sysu~ns as necessary to er~uro no ovor-irrigation. · Operate and inspect all spriaklers on a monO. ly basis and ?me land.sc=ping t.%at interferes ~'ith thc free flo~v of wa~er from the sprinkler Maclx. Inspec[ the surfaco over each underground sprinkler pipe on a montkly b~sis for su:Tac: d~p[¢ssions ~nd o~-~r i~dicado~ of breaks or fractures and repa.ir as necessary. Page 3 of 4 Exhibit "D" 0 0 AND ',,,'AI',LEY OUTTgRS 'lq~e streets and stsieet parking areas in ]"ermbay Phasa I are constructed ~.~iih an inve~'ted cro~-n section..~ concrete valley gutter is placed ~t the Iow point irt O.e section to tt~sport susface runoff to undergroUnd cl.rai~ge facilities. The asphalt paving must also be m~maincd to prevent seepage into and undermining of the subgrado. Maintenance ta.skx required to keep the pavement and valley gutters in good condition include tho follov.-ing: In=pe. crdon of the vifiley guuers for cracl~, vegotation, and sigras of ponding should be performed annually. All cracks should be muted and filled with a crack se. alex, kd any vegetation should be removed. A herbicide should be appliecI to all cracks prior to sealing..4, qualified engineer should evaluate the pavement every five years, and recommend tlc requited maintenance. Page 4 of 4 Exhibit "D" CONSENT AND SUBORDINATION ("Lender"), ~' ~ls the beneficiary under that certain Deed of Trust ("Deed of Trust"), executed by , recorded on , 19 , Series No. , County Records. Lender hereby consents to the execution and recordation of the Declaration iof Covenants, Conditions and Restrictions of Terrabay Village, recorded concurrently herewith as Series No. ,Sian Mateo County Records ("Declaration") and does hereby subordinate ithe lien of the Deed of Trust to the Declaration to the same extent and with the same force and effect as if the Declaration,had been executed and recorded prior to the execution and recordation of the Deed of Trust. Executed this Lender: day of , 19 By: Name: Title: State of California County of On , 199 , before me, , personally appeared personally known to me (or proved to me on the basis or satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ieS), and that by his/her/their signature(s) on the instrument, the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Notary Public LITTLE & SAPUTO ATTOP~¥E'YS AT L. A~g 190I OLYMPIC BOULEVARD, ~t00 WALNUT CREEK, CA 94~9~0~ (s~o) ~.s~o 06/20/96