LEASE AGREEMENT
Exhibit
99.1
This
LEASE AGREEMENT dated May 31, 2006
for identification purposes only, by and between Xxxxx Street Partners, LLC,
a
California limited liability company (“Landlord”) and Heritage Bank of Commerce,
a California corporation (“Tenant”).
1. GRANT.
In consideration of the mutual covenants herein contained and of
good,
lawful and valuable consideration, Landlord hereby demises and leases to
Tenant, and Tenant hereby takes from Landlord, those certain premises
(hereinafter called the "Premises") commonly known as 0000 Xxxxxxxx Xxxxxx,
Xxxxx 000, corner of Xxxxxxxx Xxxx xxx Xxxxx Xxxxxx, Xxxxxx, XX 00000,
consisting of approximately 2,505 rentable square feet and further described
on
the diagram attached as Exhibit A. The Premises constitute two of the six
commercial condominium units located on the first floor of a newly constructed
multi-use building (the “Project”), which commercial condominium units consist
of a total area of approximately 6,941 rentable square feet. Residential
condominiums are located on the second and third floors.
2. TERM.
The primary term of this Lease shall be for a period of ten (10)
years,
commencing on October 1, 2006 (the “Commencement Date “), and ending
September 30, 2016 (the “Initial Term”). Landlord and Tenant acknowledge that
the Commencement Date is the projected date for completion of the interior
improvements to the Premises to be constructed by Tenant. Accordingly, if
Tenant
is unable to complete construction of the interior improvements by October
1,
2006 as a result of delays caused by Landlord or delays caused by force majeure
(including any such delay by the City of Gilroy or other governmental agency
in
connection with its review and approval of Tenant’s final plans for such
improvements and the issuance of any required permits), then the Commencement
Date shall be extended by one day for each day of any such delay caused by
Landlord or by force majeure so long as Tenant notifies Landlord of the nature
and extent of any such delay within ten (10) days after the event giving
rise to
such delay shall have first occurred. Additionally, Tenant shall notify Landlord
in writing of the date of Tenant’s submission of its final plans to the City of
Gilroy for review and approval and issuance of permits no later than ten
(10)
days after the final plans have been submitted to the City of Gilroy. Landlord
shall have two (2) business days after Landlord’s receipt of Tenant’s plans for
the improvements to review and approve Tenant’s plans. Landlord’s failure to
review and approve Tenant’s plans within such two-day period shall be deemed a
Landlord delay. The City of Gilroy shall have four (4) weeks after receipt
of
Tenant’s final plans to review and approve Tenant’s final plans, and the first
week of such four (4) week period to respond with any plan check comments.
If
the City of Gilroy fails to approve Tenant’s final plans within such four-week
period, such failure shall be deemed a delay caused by force
majeure.
Provided
that no uncured event of default (as defined in Section 22) exists at the
expiration of the Initial Term or any subsequent option period,
Lessor hereby grants to Lessee the option (“Options”) to extend the Term for two
successive five (5) year periods (such five year extensions are sometimes
respectively referred to as the “First Option Period” and the “Second Option
Period”.)
3. RENT
AND SECURITY DEPOSIT. Tenant agrees to pay Rent to the Landlord for the
Premises as follows:
3.1. Initial
Term. Base Rent for the Initial Term shall be as follows:
|
Months
|
|
Base
Monthly Rental
|
|
T.I.
Credit Free Rent
|
Total
Base Monthly Rental
|
|
|
01-12
|
$
|
4,509.00
|
($4,509.00)
|
$
|
0.00
|
|
|
13-24
|
$
|
4,599.18
|
($4,599.18)
|
$
|
0.00
|
|
|
25-27
|
$
|
4,691.16
|
($4,691.16)
|
$
|
0.00
|
|
|
28
|
$
|
4,691.16
|
($1,878.36)
|
$
|
2,812.80
|
|
|
29-36
|
$
|
4,691.16
|
$
|
0.00
|
$
|
4,691.16
|
|
37-48
|
$
|
4,784.99
|
$
|
4,784.99
|
||
|
49-60
|
$
|
4,880.69
|
$
|
4,880.69
|
||
|
61-72
|
$
|
4,978.30
|
$
|
4,978.30
|
||
|
73-84
|
$
|
5,077.87
|
$
|
5,077.87
|
||
|
85-96
|
$
|
5,179.42
|
$
|
5,179.42
|
||
|
97-108
|
$
|
5,283.01
|
$
|
5,283.01
|
||
|
109-120
|
$
|
5,388.67
|
$
|
5,388.67
|
Within
ten (10) days after execution of this Lease, Tenant shall deposit the sum
of
$4,509.00 with Landlord to be applied to the Base Rent due for the
28th and 29th months of the Term. In the event this Lease
is terminated for any reason (other than a default by Landlord) prior to
the
Commencement Date, this deposit shall be retained by Landlord and shall not
be
refundable.
3.2. First
Option Period. Base Rent during the First Option Period shall be an amount
equal to 95% of Fair Market Rent as of the commencement of the First Option
Period, determined as set forth in Section 3.4, provided that such Base Rent
shall be at least $5,496.45 per month and not more than $5,658.11 per month,
and
shall be subject to a 2% annual increase.
3.3. Second
Option Period. Base Rent during the Second Option Period shall be an amount
equal to 95% of Fair Market Rent as of the commencement of the Section Option
Period, determined as set forth in Section 3.4, provided that Base Rent shall
be
at least 2% greater and not more than 5% greater than the Base Rent in effect
at
the end of the First Option Period, and shall be subject to a 2% annual
increase.
2
If
either
Landlord or Tenant fails to appoint an appraiser within the 5-day period
referred to above, the appraiser appointed by the other party shall be
the sole
appraiser for the purposes hereof. Landlord and Tenant shall equally share
in
the expense of this appraisal except that in the event the Fair Market
Rent for
the Premises is found to be within five percent (5%) of the original rate
quoted
by Landlord, then Tenant shall bear the full cost of the appraisal process,
and
in the event the Fair Market Rent for the Premises is found to be more
than five
percent (5%) less than the original rate quoted by Landlord, then Landlord
shall
bear the full cost of the appraisal process.
As
used
herein, “Fair Market Rent” shall mean the arm’s length fair market monthly
rental rate per rentable square foot under leases entered into on or about
the
date on which the Fair Market Rent is being determined hereunder for space
comparable to the Premises for a comparable term. The determination of
Prevailing Market shall take into account the existence and quality of
improvements within the space and any material economic differences between
the
terms of this Lease and any comparison lease, such as rent abatements,
construction costs, improvement allowances and other concessions and the
manner,
if any, in which the landlord under any such lease is reimbursed for operating
expenses and taxes. The determination of Fair Market Rent shall also take
into
consideration any reasonably anticipated changes in the Fair Market Rent
from
the time such Fair Market Rent is being determined to the time such Fair
Market
Rent will become effective under this Lease.
3.5. Manner of Payment. Rent shall be paid in advance, each payment to be made on the first day of each calendar month during the term of this Lease. Payments shall be payable at Landlord's address as hereinafter set forth, or at such other address or to such other person(s) as Landlord from time to time may designate.
3
3.7. Fractional
Months. With respect to any fractional month occurring during the primary or
extended terms hereof, Rent payable for such fractional month shall be
prorated based on the ratio that the number of days in such fractional
month bears to the number of days in that calendar month.
3.8. Amounts
Payable as Additional Rent. Tenant acknowledges that this is a modified
gross lease and that Tenant is obligated to perform certain maintenance
obligations with respect to the Premises as set forth in Section 7.1 below.
Except as specifically otherwise set forth herein, Tenant shall not be required
to reimburse Landlord for any costs associated with the ownership, operation,
maintenance and/or repair of the Premises, the Project or the Common Areas.
Any
amounts payable to Landlord hereunder by Tenant, other than the Base Rent,
shall
be considered as additional Rent for purposes of this Lease.
3.9. Security
Deposit. For so long as there is no Event of Default under this Lease,
Tenant shall not be required to maintain a security deposit. Should Tenant
default more than once in any twelve (12) month period with respect to any
payment of Rent (including amounts payable as additional Rent), Landlord
may
require Tenant to maintain a security deposit in an amount determined by
Landlord in its reasonable discretion but not more than two (2) months Rent
at
the level in effect as of the second default ("Security Deposit"). THE SECURITY
DEPOSIT, IF ANY, SHALL NOT BE USED BY TENANT IN LIEU OF PAYMENT OF LAST MONTH'S
RENT. If Tenant fails to pay rent or otherwise defaults under this Lease,
Landlord may use or apply all or any portion of the Security Deposit towards
the
amount due Landlord, including without limitation: (i) late charges and
non-sufficient funds ("NSF") fees; (ii) the repair of any damage to the Premises
excluding ordinary wear and tear) caused by Tenant or Tenant’s invitees, or
(iii) cleaning the Premises, if necessary, upon termination of Tenant’s
occupancy. In the event the Security Deposit is so applied prior to the
expiration of the Lease Term, Tenant shall within 10 days after written request
from Landlord deposit sufficient additional funds to restore the Security
Deposit to its original level. Landlord shall not be required to keep the
Security Deposit separate from its general accounts. No interest shall be
paid
on the Security Deposit except as required by law. Within 30 days after Tenant
vacates the Premises, Landlord shall return that portion of the Security
Deposit
which has not been used or applied towards the satisfaction of Tenant's
obligations hereunder. Tenant agrees not to hold Broker (as hereinafter defined)
responsible for the return of the Security Deposit.
4. USE.
4.1 Permitted
Use. Tenant shall use the Premises for the purpose of conducting therein
a
commercial banking facility and lawfully related uses, including a night
depository and an ATM machine. No other use is permitted without Landlord's
prior written consent, which consent shall not be unreasonably withheld.
If any
use by Tenant, other than the uses permitted herein, causes an increase in
the
premium on Landlord's property or liability insurance, Tenant shall pay for
the
increased cost. Tenant shall not use the Premises in such manner as to
violate any applicable law, rule, ordinance or regulation of any governmental
body, restrictive covenant or common area agreement.
4
4.3 Leasing
Restrictions. Landlord covenants and agrees that, during the Term of this
Lease, it will not lease any space in the Project, nor will it consent
to an
assignment of any lease of space in the Project, or a subletting of any
space in
the Project, to or for any of the following (collectively, the “Leasing
Restrictions”):
| (a) |
any
convenience store such as a 7-11;
|
| (b) |
any
liquor store;
|
| (c) | any video rental store; |
| (d) | any dry cleaner; |
| (e) | Any entertainment or recreational facility including, but not limited to, a bowling alley, electronic or mechanical games arcade, billard room, |
| pool hall, gym, health club or fitness center, discotheque, dance hall, banquet hall, night club, bar, or tavern; |
| (f) | Any second-hand store, thrift store, or flea market; or |
| (g) | Any discount store comparable to a 99 Cents store. |
In
addition, Landlord covenants and agrees that, during the first five (5) years
of
the Term of this Lease, it will not lease any space in the Project, nor will
it
consent to an assignment of any lease of space in the Project, or a subletting
of any space in the Project, to or for any restaurant.
5
5. HAZARDOUS
MATERIAL.
5.1. Use
on the Premises. Tenant shall not cause or permit any Hazardous Material to
be brought upon, kept, or used in or about the Premises by Tenant, its
agents, employees, contractors or invitees without the prior written
consent of Landlord, which Landlord shall not unreasonably withhold as long
as Tenant demonstrates to Landlord's reasonable satisfaction that such
Hazardous Material is necessary or useful to Tenant's business and will be
used, kept and stored in a manner that complies with all laws regulating
any such Hazardous Material so brought upon or used or kept in or about the
Premises. If Tenant breaches the obligation stated in the preceding sentence,
or
if the presence of Hazardous Material on the Premises caused by Tenant, its
agents, employees, contractors or invitees results in contamination of the
Premises, then Tenant shall indemnify, defend and hold Landlord harmless
from any and all claims, judgments, damages, penalties, fines, costs,
liabilities or losses (including, without limitation, diminution of value
of the Premises, damages for the loss or restriction on use of rentable
or usable space or of any amenity of the Premises, damages arising from any
adverse impact on marketing of space, and sums paid in settlement of
claims, attorney's fees, consultant fees and expert fees) which arise
during the lease term as a proximate result of such contamination, excepting
only criminal acts where the underlying injury or damage is not due to Tenant’s
negligence. This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any cleanup, remedies, removal or restoration work required
by any federal, state or local governmental agency or political subdivision
because of Hazardous Material present in the soil or ground water on or
under the Premises. Without limiting the foregoing, if the presence of any
Hazardous Material on the Premises caused or permitted by Tenant results in
any contamination of the Premises, Tenant shall promptly take
all reasonable actions at its sole expense as are necessary to return the
Premises to the condition existing prior to the introduction of any such
Hazardous Material to the Premises. The foregoing indemnity shall survive
the expiration or earlier termination of this Lease.
5.2. Definition.
As used herein, the term “Hazardous Material” means any hazardous or
toxic substance, material or waste, including, but not limited to, those
substances, materials, and wastes listed in the United States Department of
Transportation Hazardous Materials Table (49 CER 172.101) or by the
Environmental Protection Agency as hazardous substances (40 DFR Part
302) and amendments thereto, or such substances, materials and wastes that
are or become regulated under any applicable local, state or federal
law.
5.3. Disclosure.
Tenant shall disclose to Landlord the names and amounts of all Hazardous
Materials, or any combination thereof, which Tenant intends to store,
use or dispose of on the Premises.
5.4. Inspection
Rights. Landlord and its Agents shall have the right, but not the duty, to
inspect the Premises upon five (5) days notice to Tenant to determine
whether Tenant is complying with the terms of this Lease. If Tenant is not
in compliance with this Lease, Tenant shall proceed to cure its non-compliance
as provided in the Lease. In case of emergency, Landlord shall have the right
to immediately enter upon the Premises to remedy any contamination caused
by Tenant's failure to comply with the terms of this Lease notwithstanding
any other provisions of this Lease.
5.5. Nature
of Default. Any default under Sections 5.1 through 5.4 shall be a material
default enabling Landlord to exercise any of the remedies set forth in this
Lease subject to Tenant's rights to cure.
6
5.6. Landlord’s
Representations and Indemnity. Landlord represents and warrants that to its
best knowledge no Hazardous Materials are present in, on or under the Premises
or the Project as of the date of execution of this Lease. Landlord shall
indemnify, defend and hold Tenant harmless from any and all
claims, judgments, damages, penalties, fines, costs, liabilities or losses
(including, without limitation, damages for the loss or restriction on use
of rentable or usable space or of any amenity of the Premises, and sums
paid in settlement of claims, attorney's fees, consultant fees and expert
fees) which arise during the Lease Term as a proximate result of any Hazardous
Materials that were present in, on or under the Premises or the Project
as of
the date of execution of this Lease or as result of any Hazardous Materials
that
were used, stored, released or disposed of in, on or under the Premises
or the
Project by Landlord, its agents, employees or contractors. This indemnification
of Tenant by Landlord includes, without limitation, costs incurred in
connection with any investigation of site conditions or any cleanup,
remedies, removal or restoration work required by any federal, state or
local governmental agency or political subdivision because of Hazardous
Material present in the soil or ground water on or under the Premises or
the
Project. Without limiting the foregoing, if the presence of any Hazardous
Material on the Premises or the Project caused or permitted by Landlord
results in any contamination of the Premises or the Project, Landlord shall
promptly take all reasonable actions at its sole expense as are necessary
to return the Premises and/or the Project to the condition existing prior
to the introduction of any such Hazardous Material to the Premises and/or
the
Project. The foregoing indemnity shall survive the expiration or earlier
termination of this Lease.
6. REAL
ESTATE TAXES & ASSESSMENTS. Landlord shall pay all taxes,
assessments (both general and special), or governmental charges lawfully
levied or assessed on the Premises. Tenant shall not be required to pay any
taxes, assessments or other governmental charges levied or assessed against
the
Premises or the Project.
7. MAINTENANCE.
7.1. Tenant’s
Obligations. Except as set forth in Section 7.2, Tenant
shall be generally responsible for all interior maintenance of the Premises,
including without limitation exposed interior plumbing and electrical
wiring, window glass, plate glass, doors, janitorial and the interior surfaces
of the Premises. Tenant shall also be responsible for exterior window glass,
plate glass, and doors. Tenant shall maintain the heating, ventilating and
air
conditioning systems serving the Premises in good condition and repair and,
in
connection therewith, shall maintain service contracts with third party
contractors for periodic maintenance of heating and air conditioning and
ductwork. The foregoing shall require only that Tenant perform routine
maintenance and repairs to the heating, ventilating and air conditioning
systems
serving the Premises and shall not require Tenant to make any replacements
of
the heating, ventilating and air conditioning system, or any major components
thereof, unless such replacements are required as a direct result of the
negligence or willful misconduct of Tenant, its agents or employees.
7.2. Landlord’s
Obligations. Throughout the Lease Term, Landlord shall, at Landlord’s sole
expense, maintain the exterior and structural portions of the Project (including
landscaping and common area electricity), and the roof (including the roof
membrane) in good condition and repair. In addition to the foregoing, Landlord
shall be responsible for any replacements of the heating, ventilating and
air
conditioning systems serving the Premises, including any major components
thereof, unless such replacements are required as a direct result of the
negligence or willful misconduct of Tenant, in which event the cost of such
replacements shall be paid by Tenant.
7.3.
Delivery to Landlord. Tenant shall use reasonable care and diligence to
keep and maintain the Premises free from waste or nuisance and shall
deliver the Premises to Landlord in broom clean condition at the expiration
of this Lease, reasonable wear and tear excepted.
7
8.
REGULATIONS & CCR’S. Tenant will observe the General Rules and
Regulations attached as Exhibit B and the Enabling Declaration Establishing
a
Plan for Condominium Ownership for Xxxxx Street, a Mixed Use Condominium
Project, a draft of which is attached as Exhibit C (the “Declaration”). Tenant
acknowledges that under the General Rules and Regulations, neither Tenant
nor
Tenant’s employees shall park cars in the thirteen parking spaces in front of
the Project. Landlord shall comply with, and perform, those terms, covenants,
and conditions set forth in the Declaration which are applicable to an “Owner”
of the Project, as such term is defined in the Declaration. Landlord shall
indemnify, defend and hold Tenant harmless from all claims, liabilities,
damages, losses, costs and expenses, including reasonable attorneys’ fees,
suffered or incurred by Tenant as a result of Landlord’s failure to comply with,
or perform its obligations under, the Declaration. If Landlord fails to comply
with, or perform any of its obligations under, the Declaration, and as a
result
of such failure the Association (as defined in the Declaration) gives Tenant
and/or Landlord written notice of a violation of the Declaration, then Tenant
shall have the right, but not the obligation, to cure such violation within
the
time frame specified in the Association’s notice. If Tenant elects to cure such
violation, then Landlord shall reimburse Tenant for all costs incurred by
Tenant
to cure such violation within 30 days after Landlord’s receipt of reasonably
detailed invoices for the costs so incurred.
9.
ALTERATIONS.
9.1. Premises
Unfinished. Tenant acknowledges that the Premises are newly constructed and
will be delivered to Tenant in a shell condition with no interior improvements.
The building shell shall, however, include all improvements and equipment
constructed or installed as of the date of this Lease, including conduit
for
sprinklers and roof-mounted HVAC units (2 force air units will be supplied,
Ste#110 - 4 ton unit, Ste# 120 3 ton unit). Tenant shall be solely responsible
for completing the build-out of the interior of the Premises for Tenant’s use,
including all improvements and fixtures to make the Premises suitable for
Tenant’s purposes. In the event Tenant wishes to engage Landlord or its
affiliates to finish the interior, a separate agreement will be required.
Landlord represents and warrants that the Premises and the Project, including
Common Areas, are in compliance with all laws and regulations, have been
built
in a good and workmanlike manner with good materials in accordance with the
plans therefore, and that the equipment and building systems serving the
Premises are in good working order. The foregoing representations and warranties
shall apply to any tenant improvements made by Landlord and shall be true
as of
the Commencement Date, provided that Tenant will repair any damage caused
by
Tenant or its contractors in connection with the improvements.
9.2.
Tenant Improvement Allowance. Landlord shall provide Tenant with a Tenant
Improvement Allowance of one hundred twenty five thousand two hundred fifty
dollars ($125,250), which is equal to $50 per square foot, payable in the
form
of free rent for $125,250. Except for the foregoing tenant improvement
allowance, all improvements to the Premises shall be at Tenant’s sole cost and
expense.
9.3. Landlord’s
Consent for Structural Alterations. Tenant shall not create any openings in
the roof or exterior walls, nor make any structural alterations, additions
or improvements to the Premises (including the initial tenant improvements,
plans for which shall be submitted to the Landlord) without prior written
consent of Landlord, which consent shall not be unreasonably withheld.
Tenant shall have the right at all times to erect or install shelves, bins,
electrical outlets, machinery, air conditioning or heating equipment and
trade fixtures, provided that Tenant complies with all applicable governmental
laws, ordinances and regulations.
9.4. Ownership
of Structural Alterations. All alterations, additions or improvements
(including freestanding sign poles) made by Tenant which are permanently
attached to and made part of the Premises shall become the property of the
Landlord at the expiration of the Lease term and any extensions thereof,
except for signs (not including sign poles), trade fixtures, display
furnishings and equipment used on the Premises and furnished by Tenant.
Landlord acknowledges that the ATM and the night depository shall at all
times
remain the property of Tenant and may be removed from the Premises by Tenant
at
the expiration or sooner termination of this Lease.
8
9.6.
Removal of Trade Fixtures. All shelves, trade fixtures, equipment, and
other personal property installed by Tenant may be removed by Tenant from
the
Premises at any time during the Term of this Lease. Such removal shall be
made in good workmanlike manner so as not to damage the Premises and
any damage caused by such removal shall be promptly repaired by Tenant at
its sole cost and expense. If Tenant installs automatic teller machines
and/or a
night depository in exterior walls of the Premises or a bank vault, safe
deposit
box or other secure facility anywhere in the Premises, Tenant shall, at
Landlord’s option upon any termination of this Lease, remove such fixtures and
fully restore any affected portion of the Premises at Tenant’s sole cost and
expense.
10.
LIENS. Except as specifically otherwise set forth in this Section 10,
Tenant will not directly or indirectly create or cause to be created or to
remain, and will promptly discharge, at its sole cost and expense, any
mechanic's lien or lien of like nature against the Premises which Tenant
has created or caused to be created.
Tenant
may, at its sole cost and expense and in good faith, contest any such lien;
provided, however, that Tenant shall indemnify and hold Landlord harmless
from any and all loss, damage or expense occasioned by such contest. If,
after contest, such lien is adjudged to be valid, Tenant shall promptly
discharge the same.
As
to mechanic's liens and other liens of like nature created or claimed by
reason
of transactions made by Landlord, Landlord shall keep the Premises free of
same, indemnify defend and hold harmless Tenant and pay and satisfy all
valid liens.
11.
SIGNS. Subject to Tenant’s receipt of all necessary approvals from the
City of Gilroy, Tenant shall have the right to install Tenant identification
signage on the exterior of the building and/or the roof of the building,
and
“eyebrow” signage on the exterior walls of the building facing both Monterey
Road and Xxxxx Street. In addition, the building shall, at Tenant’s request, be
referred to as the “Heritage Bank Building” and Tenant shall have the right to
install appropriate signage on the building identifying the building as the
“Heritage Bank Building.” Tenant, at its sole expense shall pay for signage and
its installation. All signage must be pre-approved by the Landlord and the
City
of Gilroy and shall be installed by a company approved by Landlord; Landlord’s
approval of any signage, and the company selected by Tenant to install such
signage, shall not be unreasonably withheld. Tenant’s signage is expected to be
as depicted on Exhibit D and Landlord will cooperate in obtaining City approval.
Removal of such signs shall be made at Tenant’s sole expense by a firm
approved by Landlord and in such manner as to avoid damage or defacement
of the
Premises. Tenant shall be responsible for any such damage or
defacement.
12.
LANDLORD’S RIGHT OF ENTRY.
12.1. Generally.
Subject to Tenant's consent, which shall not be unreasonably withheld, and
reasonable prior notice, Landlord and its authorized agents may enter the
Premises during Tenant's normal business hours for the following purposes;
(a) to inspect the general conditions and state of repair of the Premises;
and (b) to show the Premises to any prospective purchaser, tenant or
mortgagee. Such entry by Landlord shall be under the supervision of Tenant.
Landlord shall not interfere with, or create a hazard to, Tenant's normal
business operations during such entry. In the event of an
emergency condition arising within the Premises which endangers property or
the safety of individuals, such consent is hereby waived by
Tenant.
9
13.
ASSIGNMENT & SUBLETTING. Tenant shall not be permitted to assign,
transfer or otherwise sublet its interest under this Lease, without the
prior written consent of Landlord, which shall not be unreasonably withheld.
In
determining whether such proposed assignment, transfer or sublet is reasonable,
Landlord may consider whether: (a) Tenant is then current under its
obligations under this Lease; (b) the assignee/transferee/subtenant
evidences the financial wherewithal to perform the Tenant’s obligations
under this Lease; and (c) the assignee/transferee/ subtenant evidences
experience to Landlord's satisfaction in owning and operating the type of
business which the assignee/transferee/subtenant proposes to conduct in the
Premises. Tenant shall reimburse Landlord for all of Landlord’s reasonable costs
(including without limitation reasonable attorneys’ fees) incurred in reviewing
the proposed assignment, sublease or transfer. Tenant shall remain fully
responsible in all aspects for the assignee/transferee/subtenant's
performance hereunder. Notwithstanding the provisions of this Section 13
to the
contrary, Landlord’s consent shall not be required for any assignment, sublease
or transfer to an entity that (i) controls, is controlled by, or is under
common
control with, Tenant, (ii) an entity which results from a merger, consolidation
or other reorganization with Tenant, provided that, if Tenant is not the
surviving entity, the surviving entity has a net worth at the time of such
assignment that is equal to or greater than the net worth of Tenant immediately
prior to such transaction; or (iii) an entity which purchases or otherwise
acquires all or substantially all of the assets of Tenant (each, a “Permitted
Transfer”).
14.
UTILITIES. Tenant shall be solely responsible for any utilities that
are separately metered or charged to the Premises for use exclusively within
the
Premises, including without limitation gas, electricity, telephone, cable
or
wireless internet services and satellite television. Landlord shall pay,
without
reimbursement by Tenant, any and all charges for water, sewage, garbage and
any
other utilities which are not separately metered or charged to the
Premises.
15.
CASUALTY & RESTORATION. If the Premises and/or the building are
totally or partially damaged or destroyed by fire, earthquake, accident or
other
casualty, Landlord shall repair and restore the Premises and/or the building,
as
applicable, unless either Landlord or Tenant elects to terminate this lease
as
permitted herein. Landlord shall have the right to terminate this Lease if
(i)
the damage to the Premises and/or the building is caused by a casualty that
Landlord was not required to insure against under the terms of this Lease,
and
the cost to repair and restore the Premises will exceed $500,000, or (ii)
the
Premises and/or the building cannot be fully repaired and restored within
one
hundred eighty (180) days from the date of the casualty. Landlord shall notify
Tenant of the estimated time required to repair and restore the Premises
and/or
the building within 30 days after the date of the casualty and, if Landlord
has
the right to terminate this Lease as permitted herein, whether Landlord has
elected to terminate this Lease. Tenant shall have the right to terminate
this
Lease if the Premises cannot be fully repaired and restored within one hundred
eighty (180) days from the date of the casualty. If neither Landlord nor
Tenant
elect to terminate this Lease as permitted herein, then Landlord shall promptly
commence the repair and restoration of the Premises and/or the building and
shall diligently pursue the same to completion. Tenant shall be entitled
to a
proportionate abatement of rent from the date of the casualty until the Premises
are fully repaired and restored, based on the extent to which Tenant’s use of
the Premises is impaired as result of such casualty, repair and restoration.
10
16.
INDEMNITY. Landlord shall not be liable to Tenant or Tenant's
employees, agents or visitors, or to any other person whosoever, for any
injury to person or damage to property in the Premises caused by the
negligence or misconduct of Tenant, its agents, servants or employees, or
of
any other person entering the Premises under express or implied invitation
of Tenant; or caused by the Premises becoming out of repair, or caused by
leakage of gas, oil, water or steam or by electricity emanating from the
Premises, or due to any other cause whatsoever, except to the extent that
any of the foregoing are due to the negligence or willful misconduct of
Landlord, its agents, employees or contractors, or Landlord’s breach of its
obligations hereunder. Tenant shall indemnify, defend and hold Landlord harmless
from all expense or claims arising from the death of or any accident,
occurrence, injury, loss or damage whatsoever caused to any person or to
the property of any person or entity as shall occur in or upon the
Premises, except to the extent such loss, expense, or claims arise from
negligence or willful misconduct of Landlord, its agents, employees, or
contractors.
17.
INSURANCE.
17.1. Tenant’s
Insurance. Tenant’s personal property, fixtures, equipment, inventory and
vehicles are not insured by Landlord against loss or damage due to fire,
theft,
vandalism, rain, water, criminal or negligent acts of others, or any other
cause. Tenant is to carry Tenants own property insurance to protect Tenant
from
any such loss. Tenant shall also carry commercial general liability insurance
in
an amount not less than $1,000,000 for injury to one person, $5,000,000 for
injuries to persons in one accident with a $5,000,000 combined single limit
for
bodily injury and property damage. Tenant’s liability insurance shall name
Landlord and Landlord's agent as additional insured. Tenant, upon Landlord's
request, shall provide Landlord with a certificate of insurance establishing
Tenant's compliance. Landlord shall maintain commercial general liability
insurance insuring Landlord, but not Tenant, in the same amounts set forth
above, plus property insurance in an amount deemed sufficient by Landlord.
Tenant is advised to carry business interruption insurance in an amount at
least
sufficient to cover Tenant's complete rental obligation to Landlord. All
insurance under this Section shall be maintained with insurance companies
rated
B+ in "Best's Insurance Guide" and qualified to do business in the state in
which the Premises are located.
17.2. Landlord’s
Insurance. Landlord shall maintain standard fire and “all risk” coverage in
an amount at least equal to the full replacement cost of the Premises and
the
building. Landlord shall not be required to maintain earthquake or flood
coverage. The cost of such insurance shall be paid by Landlord without
reimbursement by Tenant.
17.3 Waiver
of Subrogation. Landlord and Tenant each hereby waive all rights of recovery
against the other on account of loss or damage occasioned to such waiving
party
for its property or the property of others under its control to the extent
that
such loss or damage is insured against under any insurance policies which
are
required by the terms of this Lease or may otherwise be in force at the time
of
such loss or damage. Tenant and Landlord shall, upon obtaining policies of
insurance required hereunder, give notice to the insurance carrier that the
foregoing mutual waiver of subrogation is contained in this Lease and Tenant
and
Landlord shall cause each insurance policy obtained by such party to provide
that the insurance company waives all right of recovery by way of subrogation
against either Landlord or Tenant in connection with any damage covered by
such
policy.
18. COMMENCEMENT
DATE. Intentionally omitted.
19.
CONDEMNATION. If all or part of the Premises is condemned for public
use, either party may terminate this agreement as of the date possession
is
given to the condemning authority. All condemnation proceeds, exclusive of
those
allocated by the condemning authority to Tenant’s relocation costs, trade
fixtures, loss of good will, and business interruption costs, shall belong
to
Landlord.
11
20.
HOLDING OVER. Should Tenant hold over the Premises or any part thereof
after the expiration of the Term of this Lease, unless otherwise agreed in
writing, such holding over shall constitute and be construed as a tenancy
from month to month only. All obligations and duties imposed by this Lease
upon Landlord and Tenant shall remain the same during any such period of
occupancy, except that the Base Rent shall be 125% of the amount in effect
as of
the expiration of the Term.
21.
QUIET ENJOYMENT. Landlord warrants that it has the full right and
authority to enter into and perform this Lease and to grant the estate
herein demised, and covenants and agrees that at all times during the Term
of this Lease, including extension periods, when Tenant is not in default
beyond
any term provided herein for the curing of such default, Tenant's quite and
peaceful enjoyment of the Premises and of all rights, easements,
appurtenances and privileges belonging or otherwise appertaining thereto
shall
not be disturbed or interfered with by Landlord or any other tenant of the
Project.
22.
DEFAULT OF TENANT. The following events shall be deemed to be events of
default by Tenant under this Lease:
(a) Tenant
shall fail to pay
any installment of Rent and such failure shall continue for a period of ten
(10) days after Tenant's receipt of written demand thereof from
Landlord.
(b) Tenant
shall fail to
comply with any term, provision, or covenant of this Lease, other than the
payment of rent, and such failure shall continue for a period of thirty (30)
days after Tenant's receipt of written notice thereof from Landlord (or,
if the
cure cannot be effected within said thirty (30) day period, then within such
additional period of time as may be required to cure such default, provided
Tenant is diligently and continuously pursuing the cure to
completion).
(c) Tenant
shall become
insolvent, or shall make a transfer in fraud of creditors, or shall make
an
assignment for the benefit of creditors.
(d) Tenant
shall file a
petition under any section or chapter of the Bankruptcy Act, as amended,
or
under any similar law or statute of the United States or any State thereof;
or
Tenant shall be adjudged bankrupt or insolvent in proceedings filed against
Tenant thereunder.
(d) A
receiver or trustee
shall be appointed for all or substantially all of the assets of
Tenant.
(e) Tenant
shall have
abandoned the Premises, which for purposes of this Lease shall mean that
Tenant
has vacated the Premises for more than 30 consecutive days while in default
in
the payment of Rent.
23.
REMEDIES.
23.1. Landlord’s
Election. Upon the occurrence of any uncured event of default as set forth
in Section 22, Landlord may, at its option, in addition to any other remedies
available to it at law or in equity and without being considered an election
of
remedies, without further notice or demand of any kind to Tenant or any other
person:
(a) Declare
this Lease Agreement terminated and reenter the Premises and take possession
thereof and remove all persons therein, and Tenant shall have no further
claim
thereon or hereunder; or
(b) Without declaring this Lease Agreement terminated, reenter the
Premises and occupy the whole or any part thereof for and on account of Tenant
and collect any unpaid rentals and other charges, which have become payable,
or
which may thereafter become payable; or
(c) Even though Landlord has reentered the Premises, Landlord may
thereafter elect to terminate this Lease and all of the rights of Tenant
in or
to the Premises.
12
23.3. Damages.
Should Landlord elect to terminate this Lease pursuant to the provisions
of this
Section 23, Landlord may recover from Tenant as damages, the
following:
(a) The
worth at the time of
award of any unpaid Rent which had been earned at the time of such termination;
plus
(b) The
worth at the time of
award of the amount by which the unpaid Rent which would have been earned
after
termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus
(c) The
worth at the time of award of the amount by which the unpaid Rent for the
balance of the term after the time of award exceeds the amount of such rental
loss that Tenant proves could be reasonably avoided; plus
(d) Any
other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant's failure to perform its obligations under this Lease or
which
in the ordinary course of things would be likely to result therefrom, including,
but not limited to any costs or expenses incurred by Landlord in: (i) retaking
possession of the Premise, including reasonable attorney's fees therefor;
or
(ii) maintaining or preserving the Premises after an event of default;
plus
(e) At
Landlord's election,
such other amounts in addition to or in lieu of the foregoing as may be
permitted from time to time by the laws of the State of California.
23.4.
Discount Rate. As used in this Section 23, the “worth at the time of
award” is computed by discounting rental loss to present value using the Federal
Reserve Bank of San Francisco discount rate plus one percent (1%).
24.
EXPENSES & ATTORNEY'S FEES. If either party
incurs any expense, including reasonable attorney's fees, in
connection with any action or proceeding instituted by either party by
reason of any default or alleged default of the other party hereunder, the
prevailing party in such action or proceeding shall be entitled to recover
its reasonable expenses from the other party.
25.
SUBORDINATION. This Lease is subject and subordinate to the lien of any
mortgage, deed of trust or other security instrument (hereinafter referred
to collectively as “mortgage”) now in force regarding the Premises and to
all advances, renewals, replacements and extensions made or hereafter to be
made upon the security thereof, provided, however, so long as no default
exists hereunder on the part of Tenant after the expiration of all
applicable grace periods, Tenant's tenancy and its rights under the terms
and conditions of this Lease shall not be disturbed, nor shall this Lease
be affected by any default under such mortgage and any successor to Landlord
shall be bound by the obligations of Landlord under this Lease. In the
event foreclosure or enforcement of any such mortgage, the rights of Tenant
and its tenancy hereunder shall survive and this Lease shall in all
respects continue in full force and effect. This subordination is self-operative
without the need for any further document or instrument. In the event
Landlord or any mortgagee requests in writing that Tenant execute any
instruments to additionally evidence such subordination, such instruments
shall be in form and substance reasonably acceptable to Tenant. Landlord
shall
have the right to subordinate this Lease to any mortgages to be recorded
against
the Premises after the date of this Lease provided that the holder of such
mortgage concurrently executes and delivers to Tenant a non-disturbance
agreement reasonably acceptable to Tenant.
13
26.
ESTOPPEL CERTIFICATES. Landlord and Tenant shall, at any time during
the primary Term or any extension thereof, within twenty (20) days of
either Landlord's or Tenant's written notice to the other, certify that
this Lease is unmodified and in full force and effect (or, if there have
been
any modifications, that this Lease is in full force and effect as modified
and stating the modifications), whether the party receiving the notice
knows of any default under this Lease and if there are known defaults
specifying the nature thereof, and the dates to which the Rent and
other charges have been paid in advance, if any. Such statement shall act
as a waiver of any claim by the responding party to the extent that such
claim is based upon the facts contrary to those asserted in the statement
and to the extent that the claim is asserted against a bona fide encumbrance
or purchaser for the value without knowledge of facts to the contrary of
those contained in the statement, and who has acted in reasonable reliance
upon the statement. If demanded by the party receiving any such request,
the requesting party shall join in the execution of any such
estoppel certificate. In the event that Landlord or Tenant, as the case may
be, should fail within twenty (20) days to comply with this provision, such
failure shall be deemed an acknowledgment by such party that the statement
as submitted is true and correct.
27.
NOTICES. All notices, elections, demands or other statements this Lease
requires or permits either party to give to the other shall be in writing
and
shall be personally delivered, deposited in the United States Mail with postage
prepaid, or sent by facsimile, or transmitted by overnight courier which
obtains
a delivery signature. Notices sent by facsimile shall be deemed received
on the
date of transmission (provided that receipt is telephonically confirmed)
and
notices transmitted by overnight courier shall be deemed received on the
first
business day that the courier attempts delivery. In all instances, notices
are
to be addressed to the respective parties as follows:
Landlord: Xxxxx
Street Partners, LLC
XX
Xxx 0000
Xxxxxx,
XX 00000
Phone:
(000) 000 0000
Fax:
(000) 000 0000
Attn:
Xxxx Xxxxxx
Tenant: Heritage
Bank of Commerce
000
Xxxxxxx Xxxxxxxxx
Xxx
Xxxx, XX 00000
Phone:
(000) 000-0000
Fax:
(000) 000-0000
Attn: Xxx Xxxxxx
Either
party or any person entitled to notice hereunder may from time to time designate
to the others, in writing and given in accordance with this paragraph, a
different address for service of notice.
28.
BROKERAGE COMMISSIONS & FINDER'S FEES. Landlord has been
represented by Xxxx & Xxxx (Xxxxxx Xxxx) and Tenant has been represented by
CPS (Xxxx X. Xxxxxxxxxxx and Xxxxxxxx XxXxxxx) hereinafter collectively referred
to as “Brokers”) in connection with the negotiation of this Lease Agreement.
Landlord and Tenant acknowledge that compensation is payable to Brokers pursuant
to a separate written agreement. Landlord and Tenant severally represent
and
warrant that they have engaged no other brokers or finders, and that no
other claims for brokerage commissions or finder's fees will arise in connection
with the execution of this Lease. Each of the parties agrees to indemnify
the other against and hold it harmless from all liabilities arising from
any such claim arising on account of its acts or omissions (including,
without limitation, the cost of attorney's fees in connection
therewith).
14
29.
LIMITATION ON BROKER OBLIGATIONS. Landlord and Tenant acknowledge and
agree that Brokers (i) do not guarantee the condition of the Premises; (ii)
cannot verify representations made by others; (iii) will not verify zoning
and
land use restrictions; (iv) cannot provide legal or tax advice; (v) will
not
provide other advice or information that exceeds the knowledge, education
or
experience required to obtain a real estate license; vi) do not decide what
rental amount Tenant should pay or Landlord should accept; and (vii) do not
decide upon the length or other terms of the Lease. Landlord and Tenant agree
that they will seek legal, tax, insurance, and other desired assistance from
appropriate professionals.
30.
TENANT’S REPRESENTATIONS. Tenant represents and warrants that this
Lease has been duly approved by Tenant’s Board of Directors and is Tenant’s
legal, valid and binding obligation, enforceable against Tenant in accordance
with its terms.
31.
LANDLORD'S TRANSFER. Tenant agrees that, upon any transfer of the
Project, the transferee of Landlord's interest shall be substituted as Landlord
under this Lease. Landlord will be released of any further obligation to
Tenant
regarding the Security Deposit, provided that the Security Deposit is returned
to Tenant upon such transfer, or if the Security Deposit is actually transferred
to the transferee. For all other obligations under this Lease, Landlord is
released of any further liability to Tenant for the performance of any
obligations arising after the date of such transfer.
32.
RIGHT OF FIRST REFUSAL. Provided Tenant is not then in default under
the terms, covenants and conditions of this Lease, Tenant shall have an ongoing
right of first refusal (the “Offer Right”) to lease the approximately one
thousand four hundred twenty-one (1,421) square feet of space adjacent to
the
Premises and commonly known as Suite 130 (the "Offer Space”). If, at any time
during the Term, excluding any Renewal Term, Landlord receives a third-party
offer to lease or purchase the Offer Space, as evidenced by a letter of intent
or other written offer, Landlord shall notify Tenant in writing of the terms
and
conditions of such third-party offer if such third-party offer is an offer
to
lease or, if such third-party offer is an offer to purchase the Offer Space,
then Landlord shall notify Tenant in writing of the terms and conditions
upon
which Landlord would be willing to lease the Offer Space to the public,
provided, however, that the base rent for the Offer Space shall be the then
Fair
Market Rent for the Offer Space (in either instance, “Landlord’s Notice”).
Tenant shall have a period of ten (10) business days after receipt of Landlord’s
Notice in which to exercise Tenant's Offer Right to lease the Offer Space
pursuant to the terms and conditions contained in Landlord's Notice, failing
which Landlord may lease or sell the Offer Space, as applicable, to the third
party on substantially the same terms and conditions as those set forth in
Landlord’s Notice. If Tenant exercises its Offer Right in accordance with the
terms and conditions of this Section 32, effective as of the date Landlord
delivers the Offer Space (the "Delivery Date"), the Offer Space shall
automatically be included within the Premises and subject to all the terms
and
conditions of the Lease, except as set forth in Landlord's Notice and as
follows:(i) unless Landlord’s Notice specifies otherwise, the Offer Space shall
be leased on an “as is” basis and Landlord shall have no obligation to improve
the Offer Space or grant Tenant any improvement allowance thereon; and (ii)
if
requested by Landlord, Tenant shall execute a written memorandum or amendment
confirming the inclusion of the Offer Space and the Base Rent for the Offer
Space. If Landlord is delayed delivering possession of the Offer Space due
to
the holdover or unlawful possession of such space by any party, Landlord
shall
use reasonable efforts to obtain possession of the space as soon as reasonably
possible, and the commencement of the term for the Offer Space shall be
postponed until the date Landlord delivers possession of the Offer Space
to
Tenant free from occupancy by any party.
15
33. LANDLORD
DEFAULT. Landlord shall be deemed to be in default under this Lease if
Landlord shall fail to comply with any term, provision or covenant of this
Lease, and such failure shall continue for a period of thirty (30) days after
receipt of written notice thereof from Tenant (or, if the cure cannot be
effected within such 30-day period, then within such additional time as may
be
required to cure such default, provided Landlord is diligently and continuously
pursuing the cure to completion). In the event of any default of Landlord
hereunder, Tenant shall be entitled to pursue any and all remedies available
to
Tenant at law or in equity, including the remedies of specific performance
and
damages for breach of contract. In addition to the foregoing remedies, if
Landlord fails to perform any of its repair and maintenance obligations under
this Lease, and such failure continues for more than thirty (30) days after
receipt of written notice thereof from Tenant (or, if such obligations cannot
be
performed within such 30-day period, then within such additional time as
may be
required to perform such obligations, provided Landlord is diligently and
continuously pursuing the performance of such obligations), then Tenant shall
have the right to perform such repairs and/or maintenance provided that the
same
are completed in a good and workmanlike manner by licensed contractors. Landlord
shall reimburse Tenant for the cost of any such repairs and/or maintenance
performed by Tenant within thirty (30) days after receipt of reasonably detailed
invoices or receipts for the costs incurred by Tenant.
34.
MISCELLANEOUS.
34.1. Captions
and Section Numbers. The captions and section and article
numbers appearing in this Lease are inserted only as a matter of
convenience and in no way define, limit, construe or describe the scope or
intent of such sections or articles neither of this Lease, nor in any
way affect this Lease.
34.2.
Consent. Whenever the consent of either party is required to an action
under the terms of this Lease, such consent shall not be unreasonably
withheld nor delayed.
34.3.
Remedies Cumulative. The various rights, options, elections, powers and
remedies contained in this Lease, including the rights herein granted to
terminate this Lease, shall be construed as cumulative and no one of them
shall be exclusive of any of the others, or of any other legal or equitable
remedy which either party might otherwise have in the event of breach
or default in the terms hereof, and the exercise of one right or remedy by
such party shall not impair its right to any other right or remedy until
all obligations imposed upon the other party have been fully performed. It
is intended that each of the agreements and covenants of Landlord and
Tenant set forth herein be deemed both a covenant and a
condition.
34.4.
Governing Law. This Lease shall be interpreted and construed under the
laws of the State of California.
34.5.
No Partnership. Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third person to create the
relationship of principal and agent or of partnership or of joint venture
or any association between Landlord and Tenant, and neither the method of
computation of rent nor any other provision contained in the Lease nor any
acts
of the parties hereto shall be deemed to create any relationship between
Landlord and Tenant other than the relationship of Landlord and
Tenant.
34.6.
No Waiver. No waiver of any default hereunder shall be implied from
any omission by either party to take any action on account of such default
if such default persists or is repeated, and no express waiver shall affect
any default other than the default specified in the express waiver, and
then only for the time and to the extent therein stated. No delay or
omission by either party hereto to exercise any right or power accruing
upon non-compliance or default by the other party with respect to any of
the terms hereof, or otherwise accruing hereunder shall impair any such
right or power or be construed to be a waiver thereof. One or more waivers
of any breach of any covenant, term or condition of this Lease shall not be
construed as a waiver of any subsequent breach of the same covenant, term
or condition. The consent or approval by a party to or of any act by the
other party requiring the former party's consent or approval shall not be
deemed to waive or render unnecessary such former party's consent or approval
to
or of any subsequent similar acts by the other party.
16
34.8.
Effectiveness. Regardless of which party has prepared this Lease, the
parties acknowledge and agree that this Lease: (i) has been duly negotiated
and that no inferences or presumptions shall arise against the party preparing
it; and (ii) shall have no effect unless and until this Agreement has been
executed by a duly authorized representative of both Landlord and
Tenant.
34.9.
Severability. Any provision or provisions of this Lease which shall prove
to be invalid, void or illegal, shall in no way affect, impair or
invalidate any other provision hereof, and the remaining provisions hereof
shall nevertheless remain in full force and effect.
34.10.
Time of the Essence. Time is of the essence with respect to all matters
provided in this Lease.
34.11.
Counsel. Tenant acknowledges that it has been advised of its right to
engage counsel in connection with the negotiation and preparation of this
Lease
and its Exhibits.
34.12.
Recording of Lease. The parties agree that this Lease shall not be
recorded, provided however, upon the request of either party hereto, the
other party shall join in the execution of a Memorandum or so called
"short-form" of Lease for the purpose of recording. Said Memorandum shall
describe the parties, the Premises, the Lease term, Tenant’s Financial
Exclusive, the Leasing Restrictions, and Tenant’s right of first offer, and
shall incorporate this Lease by reference. The party requesting execution
of said Memorandum shall pay all expenses of recording. Upon termination or
cancellation of this Lease, Tenant shall promptly prepare and deliver to
Landlord, in recordable form, any release or other documentation as may be
reasonably requested by Landlord's counsel sufficient to release this Lease
from
the public record.
17
IN
WITNESS WHEREOF, the parties have caused this Lease Agreement to be duly
executed on the date first above written.
LANDLORD: TENANT:
Xxxxx
Street Partners, LLC Heritage
Bank
of Commerce,
a
California limited liability company a
California
corporation
By
___________________________ By
___________________________
Xxxx
Xxxxxx Xxxxxx
X.
Xxxxxxxxx
President
& CEO
President
&
CEO
Date:
_________________________ Date:
_________________________
18
Exhibit
A
Diagram
of Premises
(Original
Diagram to be exchanged after tenant has completed their Interior
Improvements)
19
Exhibit
B
General
Rules and Regulations
1. Tenant’s
employees shall not be permitted to park in any parking spaces directly in
front
of the Project at any time, seven days a week, day or night, regardless of
city
parking signs in or around the building that state otherwise. It is intended
that all of such spaces be made available to customers of the commercial
units
located on the ground floor.
2. Tenant
shall not suffer or permit the obstruction of any Common Areas, including
driveways, walkways and stairways.
3. Landlord
reserves the right to refuse access to any persons Landlord in good faith
judges
to be a threat to the safety, reputation or property of the Project or its
occupants.
4. Tenant
shall not make or permit any noise or odors that annoy or interfere with
other
Tenants or their invitees.
5. Tenant
shall not keep animals or birds within the Project, and shall not bring
bicycles, motorcycles or other vehicles into areas not designated as authorized
for same.
6. Lessee
shall not permit litter except in appropriate receptacles for that purpose.
7. Intentionally
omitted.
8. Tenant
shall be responsible for the inappropriate use of any bathrooms, plumbing
or
other utilities within the Premises. Tenant shall post in its bathrooms a
notice
prepared by Landlord to the effect that no tampons, sanitary napkins or other
foreign substances of any kind are to be placed in the toilets.
9. Tenant
shall not deface the walls, partitions or other surfaces of the Premises
or the
Project.
10.
Tenant shall not suffer or permit any thing in or around the Premises or
Building that causes excessive vibration or floor loading in any part of
the
Project.
1
11.
Furniture, significant freight and equipment shall be moved in or out of
the
Premises only with the Landlord's knowledge and consent and subject to such
reasonable limitations, techniques and timing, as may be designated by Landlord.
Tenant shall be responsible for any damage to the Project arising from any
such
activity.
12.
Tenant shall not employ any contractor for repairs to building systems to
be
performed in the Premises, except as approved by Landlord.
13.
Tenant shall return all keys at the termination of its tenancy and shall
be
responsible for the cost of replacing any keys that are lost.
14.
No window coverings, shades or awnings shall be installed or used by Tenant
except as may be approved by Landlord, which approval shall not be unreasonably
withheld.
15.
No Tenant, employee or invitee shall go upon the roof of the
Project.
16.
Tenant shall not permit smoking or carrying of lighted cigars or cigarettes
in
any area of the Project except for such outdoor areas reasonably designated
by
Landlord as smoking areas.
17.
Tenant shall not use any method of heating or air conditioning other than
as
provided by Lessor.
18.
Tenant shall not install, maintain or operate any vending machines (other
than
ATM machines) in the Premises without Landlord's prior written
consent.
19.
Except as otherwise specifically set forth in Tenant’s Lease, the Premises shall
not be used for lodging or manufacturing, cooking or food
preparation.
20.
Tenant shall comply with all safety, fire protection and evacuation regulations
established by Landlord or any applicable governmental agency.
21.
Landlord reserves the right to waive any one of these rules or regulations,
and/or as to any particular tenant of the Project provided that the waiver
of
any such rule or regulation will not have an adverse affect on Tenant’s use or
occupancy of the Premises. Any such waiver shall not constitute a waiver
of any
other rule or regulation or any subsequent application thereof to such
tenant,
22.
Tenant assumes all risks from theft or vandalism and agrees to keep its Premises
locked as may be required.
23.
Landlord reserves the right to make such other reasonable rules and regulations
as it may from time to time deem necessary for the appropriate operation
and
safety of the Project and its occupants. Tenant agrees to abide by these
and
such rules and regulations upon receipt of written notice of any such rules
and
regulations.
Exhibit
C
Addendum
to Lease Agreement
0000
Xxxxxxxx Xx., Xxxxxx, XX 00000
Units
#110 and 120
ENABLING
DECLARATION
ESTABLISHING
A PLAN FOR CONDOMINIUM OWNERSHIP
XXXXX
STREET, A MIXED USE CONDOMINIUM PROJECT
This
Declaration contains a binding arbitration provision in accordance with
the
Federal Arbitration Act. You must read the arbitration provision carefully
and
should consult legal counsel with any questions.
If
this document contains any restriction based on race, color, religion,
sex,
familial status, marital status, disability, national origin, or ancestry,
that
restriction violates state and federal fair housing laws and is void,
and may be
removed pursuant to Section 12956.1 of the Government Code. Lawful restrictions
under state and federal law on the age of occupants in senior housing
or housing
for older persons shall not be construed as restrictions based on familial
status.
|
|
Pages
|
|
| INTRODUCTORY PARAGRAPHS A through D |
1
|
|
|
A.
|
Location
of Property
|
1
|
|
B.
|
Intention
|
1
|
|
C.
|
Owner’s
Interest
|
1
|
|
D.
|
General
Plan of Improvement
|
1
|
|
ARTICLE
1.
|
DEFINITIONS
|
1
|
|
1.1.
|
"Articles":
|
1
|
|
1.2.
|
"Assessment":
|
2
|
|
1.3.
|
"Assessment
Lien":
|
2
|
|
1.4.
|
"Association":
|
2
|
|
1.5.
|
"Board"
or "Board of Directors":
|
2
|
|
1.6.
|
"Building":
|
2
|
|
1.7.
|
"Bylaws":
|
2
|
|
1.8.
|
"City”:
|
2
|
|
1.9.
|
"Commercial
Unit":
|
2
|
|
1.10.
|
"Common
Area(s)":
|
2
|
|
1.11.
|
"Common
Expenses":
|
2
|
|
1.12.
|
"Common
Interest":
|
2
|
|
1.13.
|
"Condominium":
|
2
|
|
1.14.
|
"Condominium
Documents":
|
2
|
|
1.15.
|
"Condominium
Plan":
|
3
|
|
1.16.
|
"Cost
Center":
|
3
|
|
1.17.
|
"Cost
Center Assessment":
|
3
|
|
1.18.
|
"Cost
Center Budget":
|
3
|
|
1.19.
|
"Cost
Center Committee":
|
3
|
|
1.20.
|
"Cost
Center Expense":
|
3
|
|
1.21.
|
"County”:
|
3
|
|
1.22.
|
"Declarant":
|
3
|
|
1.23.
|
"Declaration":
|
3
|
|
1.24.
|
"Eligible
Mortgages":
|
3
|
|
1.25.
|
"Eligible
Mortgage Holder"
|
3
|
|
1.26.
|
"Eligible
Insurer or Guarantor"
|
3
|
|
1.27.
|
"Exclusive
Use Common Area”
|
3
|
|
1.28.
|
"First
Lender":
|
3
|
|
1.29.
|
"First
Mortgage":
|
3
|
|
1.30.
|
"Foreclosure":
|
4
|
|
1.31.
|
"Map":
|
4
|
|
1.32.
|
"Member":
|
4
|
|
1.33.
|
"Mortgage"
|
4
|
|
1.34.
|
"Mortgagee":
|
4
|
|
1.35.
|
"Mortgagor":
|
4
|
|
1.36.
|
"Notice
of Delinquent Assessment":
|
4
|
|
1.37.
|
"Owner"
or "Owners":
|
4
|
|
1.38.
|
"Person":
|
4
|
|
1.39.
|
"Project":
|
4
|
|
1.40.
|
"Public
Report":
|
4
|
|
1.41.
|
"Regular
Assessments":
|
4
|
|
1.42.
|
“Reimbursement
Charge”:
|
4
|
|
1.43.
|
“Residential
Unit”:
|
5
|
|
1.44.
|
"Rules":
|
5
|
|
1.45.
|
"Special
Assessments":
|
5
|
|
1.46.
|
"Unit":
|
5
|
|
1.47.
|
"Utility
Facilities":
|
5
|
|
ARTICLE
2.
|
DESCRIPTION
OF PROJECT, DIVISION OF PROPERTY, AND CREATION OF PROPERTY
RIGHTS
|
5
|
|
2.1.
|
Description of Project:
|
5
|
|
2.2.
|
Division of Property:
|
5
|
|
2.3.
|
Rights
of Entry and Use:
|
6
|
|
2.4.
|
Partition Prohibited:
|
6
|
|
2.5.
|
No
Termination of Condominium without City Approval:
|
7
|
|
2.6.
|
All
Easements Part of Common Plan:
|
7
|
|
2.7.
|
Cost
Center Committee:
|
7
|
|
ARTICLE
3.
|
ASSOCIATION,
ADMINISTRATION, MEMBERSHIP AND VOTING RIGHTS
|
7
|
|
3.1.
|
Association
to Manage Common Areas:
|
7
|
|
3.2.
|
Membership:
|
7
|
|
3.3.
|
Transferred Membership:
|
7
|
|
3.4.
|
Membership
and Voting Rights:
|
7
|
|
ARTICLE
4.
|
ASSESSMENTS
AND LIENS
|
8
|
|
4.1.
|
Creation
of the Lien and Personal Obligation of Assessments:
|
8
|
|
4.2.
|
Purpose of Assessments:
|
8
|
|
4.3.
|
Assessments:
|
9
|
|
4.4.
|
Restrictions
on Increases in Regular Assessments or Special
Assessments:
|
9
|
|
4.5.
|
Division of Assessments:
|
10
|
|
4.6.
|
Collection
of Assessments:
|
10
|
|
4.7.
|
Date
of Commencement of Regular Assessment; Due Dates:
|
10
|
|
4.8.
|
Effect of Nonpayment of Assessments:
|
10
|
|
4.9.
|
Transfer of Condominium by Sale or Foreclosure:
|
10
|
|
4.10.
|
Reimbursement
Charges; Fines and Penalties:
|
11
|
|
4.11.
|
Priorities; Enforcement; Remedies:
|
11
|
|
4.12.
|
Unallocated Taxes:
|
14
|
|
ARTICLE
5.
|
DUTIES
AND POWERS OF THE ASSOCIATION
|
15
|
|
5.1.
|
Duties:
|
15
|
|
5.2.
|
Powers:
|
17
|
|
5.3.
|
Commencement
of Association's Duties and Powers:
|
20
|
|
ARTICLE
6.
|
UTILITIES
|
20
|
|
6.1.
|
Owners'
Rights and Duties:
|
20
|
|
6.2.
|
Easements
for Utilities and Maintenance:
|
20
|
|
6.3.
|
Association's Duties:
|
21
|
|
ARTICLE
7.
|
USE
RESTRICTIONS
|
21
|
|
7.1.
|
Use
- Residential Units:
|
21
|
|
7.2.
|
Use
- Commercial Units:
|
21
|
|
7.3.
|
Health
Care Facilities:
|
21
|
|
7.4.
|
Day
Care Use:
|
21
|
|
7.5.
|
Time
Shares Prohibited:
|
22
|
|
7.6.
|
Nuisances:
|
22
|
|
7.7.
|
Parking:
|
22
|
|
7.8.
|
Signs:
|
22
|
|
7.9.
|
Animals
and Pets:
|
22
|
|
7.10.
|
Garbage and Refuse Disposal:
|
23
|
|
7.11.
|
Radio and Television Antennas:
|
23
|
|
7.12.
|
Right
to Lease:
|
23
|
|
7.13.
|
Architectural Control:
|
23
|
|
7.14.
|
Window
Coverings:
|
25
|
|
7.15.
|
Clothes Lines:
|
25
|
|
7.16.
|
Power Equipment and
Motor Vehicle Maintenance:
|
25
|
|
7.17.
|
Liability
of Owners for Damage to Common Area:
|
25
|
|
7.18.
|
Attachments
to Buildings:
|
25
|
|
7.19.
|
Commonly
Metered Utilities:
|
25
|
|
7.20.
|
Flags,
Pennants, Banners, Etc.:
|
25
|
|
7.21.
|
Activities
Causing Increase in Insurance Rates:
|
25
|
|
7.22.
|
Common
Area Use:
|
25
|
|
7.23.
|
Owner's
Right and Obligation to Maintain and Repair:
|
26
|
|
ARTICLE 8.
|
INSURANCE;
DAMAGE OR DESTRUCTION; CONDEMNATION
|
27
|
|
8.1.
|
Insurance:
|
27
|
|
8.2.
|
Damage
or Destruction:
|
29
|
|
8.3.
|
Condemnation:
|
30
|
|
ARTICLE
9.
|
GENERAL
PROVISIONS
|
31
|
|
9.1.
|
Enforcement:
|
31
|
|
9.2.
|
Invalidity of Any Provision:
|
31
|
|
9.3.
|
Term:
|
31
|
|
9.4.
|
Amendments:
|
31
|
|
9.5.
|
Encroachment Rights:
|
32
|
|
9.6.
|
Rights of First Lenders:
|
32
|
|
9.7.
|
Limitation
of Restrictions on Declarant:
|
34
|
|
9.8.
|
Termination
of any Responsibility of Declarant:
|
35
|
|
9.9.
|
Owners' Compliance:
|
35
|
|
9.10.
|
Notice:
|
35
|
|
9.11.
|
Special
Provisions Relating to Enforcement of Declarant's Obligation to
Complete
Common Area Improvements:
|
35
|
|
9.12.
|
Special
Provisions Relating to Enforcement of Declarant's Obligation to
Pay
Assessments:
|
36
|
|
9.13.
|
Fair Housing.
|
36
|
|
9.14.
|
Dispute
Resolution:
|
36
|
|
9.15.
|
Number;
Gender:
|
40
|
ENABLING
DECLARATION
ESTABLISHING
A PLAN FOR CONDOMINIUM OWNERSHIP
XXXXX
STREET, A MIXED USED CONDOMINIUM PROJECT
THIS DECLARATION,
made the ____ day of _____________, 20__, by Xxxxx Street Partners, LLC,
a
California limited liability company, hereinafter referred to as "Declarant,"
is
made with reference to the following facts:
A. Location
of Property. Declarant is the Owner of certain real
property (the "Property") located in the City of Gilroy ("City"), County
of
Santa Xxxxx ("County"), State of California, more particularly described
as on
that certain subdivision map entitled “Tract 9756” filed for record in the
Office of the Recorder of Santa Xxxxx County, California, on ____________,
in
Book _____ of Parcel Maps, pages ________.
B. Intention.
Declarant intends to create a "condominium project," as defined
in
Section 1351(f) of the California Civil Code, to subdivide the Property as
authorized by Section 66427 of the California Government Code into
"condominiums" as defined in Section 783 of the California Civil Code and
to
impose mutually beneficial restrictions under a general plan of improvement
for
the benefit of all the Condominiums created pursuant to the Xxxxx-Xxxxxxxx
Common Interest Development Act. Declarant intends to develop and improve
said
the Property by constructing twelve (12) residential condominiums and six
(6)
commercial condominiums. Each Condominium shall consist of a separate interest
in a Unit as shown on the Condominium Plan, an undivided interest in the
Common
Area.
C. Owner’s
Interest. The development shall be referred to as the
"Project" as defined in section 1.39. The Owner of a Condominium will
receive a separate interest in an individual Unit and an undivided interest
in
common in the Common Area. Each Condominium shall have appurtenant to it
a
membership in the XXXXX STREET OWNERS ASSOCIATION, a nonprofit mutual benefit
corporation, which shall own the Common Area.
D. General
Plan of Improvement. Declarant intends by this
document to impose upon the Project mutually beneficial restrictions under
a
general plan of improvement for the benefit of all of the Condominiums and
the
Owners thereof.
NOW,
THEREFORE, Declarant hereby declares that the Project shall be held,
conveyed, mortgaged, encumbered, leased, rented, used, occupied, sold, and
improved, subject to the following declarations, limitations, covenants,
conditions, restrictions and easements, all of which are imposed as equitable
servitudes pursuant to a general plan for the development of the Project
for the
purpose of enhancing and protecting the value and attractiveness of the Project,
and every part of it, in accordance with the plan for the improvements of
the
Project and its division into Condominiums. All of the limitations, covenants,
conditions, restrictions and easements shall constitute covenants that run
with
the land and are binding upon Declarant and its successors and assigns, and
all
parties having or acquiring any right, title or interest in or to any part
of
the Project or the property.
ARTICLE
1. DEFINITIONS
1.1. "Articles":
The Articles of Incorporation of the Association, as amended from time to
time.
1
1.2. "Assessment":
The cost
of maintaining, improving, repairing, operating and managing the Project
which
is to be paid by each Owner as determined by the Association, and shall include
Regular Assessments, Special Assessments and Reimbursement Charges.
1.3. "Assessment
Lien": Described
in section 4.11.
1.4. "Association": The
XXXXX
STREET OWNERS ASSOCIATION, a California nonprofit mutual benefit corporation,
the Members of which shall be the Owners of Condominiums in the
Project.
1.5. "Board"
or "Board of Directors": The
governing body of the Association.
1.6. "Building":
The
structure in the Project that contains the Units.
1.7. "Bylaws":
The
bylaws of the Association, as amended from time to time.
1.8. "City”:
The City
of Gilroy, State of California.
1.9. "Commercial
Unit": A
Unit
used for office or commercial purposes.
1.10. "Common
Area(s)":
The
entire Project except for the individual Condominium Units, including the
land
of the Project, the landscaped areas, parking and driveway areas, exterior
sprinklers, sprinkler lines and utility lines, and Utility Facilities located
outside of the Units; decks; railings, steps, and elevator lifts; bearing
walls,
columns, girders, ceiling joists, subfloors, finished floors, roofs, and
foundations; water, and central heating equipment; tanks, pumps, motors,
ducts,
flues and chutes; conduits, pipes, plumbing, wires and other utility
installations (except the outlets thereof when located within the Unit, and
excepting utility installations located within a Unit), required to provide
power, light, telephone, gas, water, sewerage, drainage, and elevator service;
smoke detectors and fire sprinklers and sprinkler pipes and other built-in
fire
protection devices and equipment, including sprinkler heads which protrude
into
the air space of a condominium unit and cable television
installation.
1.11. "Common
Expenses":
The
actual and estimated expenses of the Association incurred for maintaining,
repairing, operating and replacing the Common Area; any reasonable reserve
for
such purposes as found and determined by the Board; the expenses of the
Association to fulfill its obligations and all sums designated Common Expenses
by or pursuant to the Condominium Documents.
1.12. "Common
Interest":
The
proportionate undivided interest in the Common Area that is part of each
Condominium as set forth in this Declaration.
1.13. "Condominium":
An
estate in real property as defined in California Civil Code §§783 and 1351(f),
consisting of an undivided interest in common in a portion of the Project
and a
separate interest in space called a Unit.
1.14. "Condominium
Documents":
The same
as this Declaration, as amended from time to time, the exhibits, if any,
that
are attached to this Declaration together with the other basic documents
used to
create and govern the Project, including the Map, the Articles, the Bylaws,
and
the Condominium Plan but excluding unrecorded Rules adopted by the Board
or the
Association.
2
1.15. "Condominium
Plan":
The
recorded three-dimensional floor plan of the Condominiums located in the
Project
which identifies the Common Areas and each Unit as a separate interest pursuant
to California Civil Code §1351. The Condominium Plan is attached hereto as
Exhibit "A" and incorporated by reference herein.
1.16. "Cost
Center": One
(1)
or more areas, improvements, or facilities, located within the Project, the
use
or maintenance of which is substantially restricted to Owners of certain
Units,
as specified in this Declaration, where the expenses of operating, maintaining
and replacing such areas, improvements or facilities are born solely or
disproportionately by such specified Owners.
1.17. "Cost
Center Assessment": The
portion of Common Expenses, including operating and reserve funds, budgeted
or
allocated exclusively to any particular Cost Center.
1.18. "Cost
Center Budget": A
budget
prepared each year by a Cost Center Committee for a Cost Center.
1.19. "Cost
Center Committee": .A
Committee formed and charged with the responsibility of preparing a Cost
Center
Budget each year for a Cost Center, as provided in section 1.18.
1.20. "Cost
Center Expense": Any
cost
or expense for undertaking the maintenance obligations and responsibility
of a
Cost Center as set forth in this Declaration.
1.21. "County”: The
County of Santa Xxxxx, State of California.
1.22. "Declarant":
Xxxxx
Street Partners, LLC, a California limited liability company, and any successor
or assign that expressly assumes the rights and duties of the Declarant under
this Declaration, in a recorded written document.
1.23. "Declaration":
This
Enabling Declaration, as amended or supplemented from time to time.
1.24. "Eligible
Mortgages":
Mortgages held by "Eligible Mortgage Holders".
1.25. "Eligible
Mortgage Holder":
A First
Lender who has requested notice of certain matters from the Association in
accordance with section 9.6.C.
1.26. "Eligible
Insurer or Guarantor":
An
insurer or governmental guarantor of a First Mortgage who has requested notice
of certain matters from the Association in accordance with
section 9.6.C.
1.27. "Exclusive
Use Common Area”:
Those
portions of the Common Area set aside for exclusive use of an Owner pursuant
to
section 2.2.D, and shall constitute "Exclusive Use Common Area" within the
meaning of California Civil Code section 1351(i).
1.28. "First
Lender":
Any
person, entity, bank, savings and loan association, insurance company, or
financial institution holding a recorded First Mortgage on any
Condominium.
1.29. "First
Mortgage":
Any
recorded Mortgage made in good faith and for value on a Condominium with
first
priority over other Mortgages encumbering the Condominium.
3
1.30. "Foreclosure":
The
legal process by which a Condominium owned by an Owner who is in default
under a
Mortgage is sold pursuant to California Civil Code § 2924a et seq.
or sale
by the Court pursuant to California Code of Civil Procedure § 725a
et seq.
and any
other applicable laws.
1.31. "Map": The
Map
described above in Recital paragraph A.
1.32. "Member":
A person
entitled to membership in the Association as provided herein.
1.33. "Mortgage":
A
mortgage, deed of trust, assignment of rents, issues and profits or other
proper
instrument (including, without limitation, those instruments and estates
created
by sublease or assignment) given as security for the repayment of a loan
or
other financing which encumbers a Condominium, made in good faith and for
value.
1.34. "Mortgagee":
The
holder of a Mortgage including the beneficiary of a deed of trust that
constitutes a Mortgage.
1.35. "Mortgagor":
A Person
who encumbers his Condominium with a Mortgage, including a trustor of a deed
of
trust that constitutes a Mortgage.
1.36. "Notice
of Delinquent Assessment":
A notice
of delinquent Assessment filed by the Association for a delinquent Assessment
pursuant to section 4.11.C.
1.37. "Owner"
or "Owners":
The
record holder of fee simple title to a Condominium, expressly excluding Persons
having any interest merely as security for the performance of an obligation
until such person obtains fee title thereto, and those parties who have
leasehold interests in a Condominium. If a Condominium is sold under a recorded
contract of sale, the purchaser under the contract of sale, rather than the
holder of the fee interest, shall be considered the "Owner" from and after
the
date the Association receives written notice of the recorded
contract.
1.38. "Person":
A
natural person, a corporation, a partnership, a limited liability company,
a
trust, or other legal entity.
1.39. "Project":
All of
the real property described on the Map and all improvements on that real
property, subject to this Declaration.
1.40. "Public
Report":
The
official document and permit issued pursuant to the Subdivided Lands Act
(Business & Professions Code §§ 11000 et seq.) by the State of California
Department of Real Estate authorizing the offering of the Condominiums for
sale
to the public.
1.41. "Regular
Assessments":
A
Regular Assessment levied by the Association pursuant to section 4.3.A.
1.42. “Reimbursement
Charge”:
A charge
levied by the Board against an Owner to reimburse the Association for costs
and
expenses incurred in bringing the Owner and/or his or her Unit into compliance
with the provisions of this Declaration, determined and levied pursuant to
sections 4.10 and 5.1.A of this Declaration.
4
1.43. “Residential
Unit”:
A Unit
used for residential purposes located within a Building.
1.44. "Rules":
The
rules adopted from time to time by the Association pursuant to
section 5.2.D.
1.45. "Special
Assessments":
A
Special Assessment levied by the Association pursuant to section
4.3.B.
1.46. "Unit":
The
elements of the Condominium, as defined in section 2.2.A, which are not
owned in common with the Owners of other Condominiums in the Project. Each
Unit
is identified by separate number on the Condominium Plan.
1.47. "Utility
Facilities":
Defined
in section 6.1.
ARTICLE
2. DESCRIPTION
OF PROJECT, DIVISION OF PROPERTY, AND CREATION OF PROPERTY
RIGHTS
2.1. Description of Project: The
Project is a condominium project that consists of the land, the Condominiums
and
all other improvements thereon. The Project contains four Buildings. There
are
twelve (12) Residential Units and six (6) Commercial Units. Reference is
made to
the Condominium Plan for further details.
2.2. Division of Property: The
Project is divided as follows:
A. Units:
Each
of
the Units as separately shown, numbered and designated in the Condominium
Plan,
consists of the space bounded by and contained within the interior unfinished
surfaces of the perimeter walls, ceilings, windows, window frames, doors
and
door frames and trim of the Unit, each of such spaces being defined and referred
to herein as a "Unit". The lower or floor level of the Units is the finished
floor in all Units. Bearing walls located within the interior of a Unit are
Common Area, not part of the Unit, except for the finished surfaces thereof.
Soffits and exposed beams in ceilings shall not be part of the Unit. Each
Unit
includes the utility installations located within its boundaries as to which
the
Owner has exclusive use, including, without limitation, space heaters, lighting
fixtures, cabinetry and air conditioning facilities that are located entirely
within the Unit they serve. Each Unit includes both the portions of the Building
so described and the airspace so encompassed. The Unit does not include those
areas and those things which are defined as "Common Area" in
section 1.10.
Each
Unit is subject to such encroachments as are contained in the Building, whether
the same now exist or may be later caused or created in any manner referred
to
in section 9.5. In interpreting deeds and Condominium Plans, the then
existing physical boundaries of a Unit, when the boundaries of the Unit are
contained within a Building, or of a Unit reconstructed in substantial
accordance with the original plans thereof shall be conclusively presumed
to be
its boundaries rather than the boundaries expressed in the deed or Condominium
Plan, regardless of settling or lateral movement of the Building and regardless
of minor variance between boundaries shown on the plan or deed, and those
of the
Building. Each Unit shall have appurtenant to it nonexclusive rights for
ingress, egress and support through the Common Area subject to the rights
of
each Owner in the Exclusive Use Common Area appurtenant to that Owner's
Condominium. Any fireplace (firebox), chimney and flue that serve a Unit
are
part of the Unit no matter whether located within the Unit boundaries or
Common
Area.
B. Common Areas:
Those
portions of the Project exclusive of the Units constitute the "Common Area"
as
defined in section 1.10.
C. Common
Area:
Each
Owner shall have, as appurtenant to his or her Unit, an equal one-eighteenth
(1/18th)
undivided Interest in and to the Common Area. The Common Interest appurtenant
to
each Unit is declared to be permanent in character and cannot be altered
without
the consent of all the Owners, as expressed in an amended Declaration. The
undivided Common Interest in the Common Area cannot be separated from the
Unit,
and any conveyance or transfer of the Unit shall include the undivided Common
Interest, the Owner's membership in the Association, and any other benefits
or
burdens appurtenant to that Owner's Condominium. Subject to this Declaration
and
the Rules, each Owner may have access to and use of the Common Area in
accordance with the purposes for which such Common Area is intended without
hindering the exercise of or encroaching upon the rights of any other Owners
subject further to the rights of each Owner in the Exclusive Use Common Area
appurtenant to that Owner's Condominium.
5
D. Exclusive
Use Common Areas: The
following described portions of the Common Area, referred to as Exclusive
Use
Common Areas, are set aside and allocated for the exclusive use of the Owner
of
the Condominium(s) to which they are attached or assigned or shown on the
Condominium Plan or as described herein, and are appurtenant to that
Condominium:
(1) Deck
designated "D," followed by the number of the Unit;
(2) Vestibule,
elevator, and stairs - reserved for the exclusive use of the Residential
Units;
and
(3) Storage
space designated “S,” which may be assigned by the Board to individual Unit
Owners.
The
heating and air conditioning equipment serving a Unit is part of the Unit,
belongs to the Owner of that Unit, and shall be maintained by the Owner.
The
space occupied by the heating and air conditioning equipment, wherever located,
shall be restricted to the exclusive use of the Owner whose heater and air
conditioner occupy such space.
Except
as
described herein, no other portion of the Common Areas shall be Exclusive
Use
Common Area.
2.3. Rights
of Entry and Use: The
Units
and Common Area (including Exclusive Use Common Area) shall be subject to
the
following rights of entry and use:
A. The
non-exclusive rights of each Owner for ingress, egress and support through
the
Common Area, and use of the Common Area as provided in sections 2.2.A, 2.2.C
and
2.2.D.
B. The
right
of the Association's agents or employees to enter any Unit to cure any violation
of this Declaration or the Bylaws, provided that the Owner has received notice
and a hearing as required by the Bylaws (except in the case of an emergency)
and
the Owner has failed to cure the violation or take steps necessary to cure
the
violation within thirty (30) days after the finding of a violation by the
Association.
C. The
access rights of the Association to maintain repair or replace improvements
or
property located in the Common Area as described in section 5.2.E.
D. The
rights of the Owners, the Association, and the Declarant to install, maintain,
repair or replace utilities as described in Article VI.
E. The
encroachment rights described in section 9.5.
F. The
rights of the Declarant during the construction period as described in section
9.7.
G. The
rights of Owners to make improvements or alterations authorized by California
Civil Code § 1360(a)(2), subject to the provisions of section
7.13.
2.4. Partition Prohibited: The
Common Area shall remain undivided except as follows: The Common Area may
be
re-subdivided if approved unanimously by the Owners, and if approved by the
City
and pursuant to and in accordance with the Subdivision Map Act and the
Xxxxx-Xxxxxxxx Act. Except as provided by California Civil Code §1359 or
authorized under sections 8.2.B or 8.3, no Owner shall bring any action for
partition of the Common Area, it being agreed that this restriction is necessary
in order to preserve the rights of the Owners with respect to the operation
and
management of the Project. Judicial partition by sale of a single Condominium
owned by two (2) or more persons and division of the sale proceeds is not
prohibited by this paragraph.
6
2.5. No
Termination of Condominium without City Approval: Due
to
the historical significance of the buildings, the consent of the City of
Gilroy
shall be required in order for the Owners to terminate the legal status of
the
Project as a Condominium.
2.6. All
Easements Part of Common Plan: Whenever
any easements are reserved or created or are to be reserved or created in
this
Declaration, such easements shall constitute equitable servitudes for the
mutual
benefit of all property in the Project, even if only certain Units are
specifically mentioned as subject to or benefiting from a particular easement.
Easements referred to in this Declaration that are created by grant deeds,
subsequent to the date of this Declaration shall be part of the common plan
created by this Declaration for the benefit of all property Owners within
the
Project.
2.7. Cost
Center Committee: A
Cost
Center Committee shall consist of three (3) Owners who shall be elected annually
by all the Owners in a Cost Center by written ballot or in an annual meeting,
called by the Owners of Units in the Cost Center. Pending the first election,
the Declarant shall appoint the initial Members of the Cost Center Committee.
Declarant shall have the right to appoint or elect a majority of the Cost
Center
Committee until Declarant has sold ninety percent (90%) of the Units in the
Cost
Center. Each Owner of a Unit in the Cost Center shall have one (1) vote,
which
vote is appurtenant to the Owner’s Unit. The Cost Center Committee shall prepare
a budget (“Cost Center Budget”) each year for the maintenance of the following
items in the Cost Center: Lobbies, corridors, elevator and any other
improvements to be maintained by the Association as a Cost Center Expense.
The
Cost Center Committee shall deliver the Cost Center Budget to the Board at
least
ninety (90) days prior to the end of each fiscal year of the Association.
The
Board shall review the Cost Center Budget and take it in consideration in
preparing the annual budget for the Association, provided, however, that
the
Board shall have the final authority to decide the minimum level of maintenance
(and the cost thereof) that in the Board’s discretion is necessary to maintain
the improvements within the Cost Center that are to be maintained as Cost
Center
Expense in the manner consistent with the standards of the Project.
ARTICLE
3. ASSOCIATION,
ADMINISTRATION, MEMBERSHIP AND VOTING RIGHTS
3.1. Association
to Manage Common Areas: The
management and operation of the Common Area shall be vested in the Association.
The Owners of all the Condominiums covenant and agree that the administration
of
the Project shall be in accordance with the provisions of this Declaration,
and
the Articles and Bylaws.
3.2. Membership: The
Owner
of a Condominium shall automatically, upon becoming the Owner of same, be
a
Member of the Association, and shall remain a Member thereof until such time
as
the ownership ceases for any reason, at which time the membership in the
Association shall automatically cease. Membership shall be held in accordance
with the Articles and Bylaws.
3.3. Transferred Membership: Membership
in the Association shall not be trans-ferred, encumbered, pledged, or alienated
in any way, except upon the sale or encumbrance of the Condominium to which
it
is appurtenant, and then only to the purchaser, in the case of a sale, or
Mortgagee, in the case of an encumbrance of such Condominium. On any transfer
of
title to an Owner's Condominium, including a transfer on the death of an
Owner,
the membership passes automatically along with title to the transferee.
A
Mortgagee does not have membership rights until it obtains title to the
Condominium by Foreclosure or deed in lieu of Foreclosure. Any attempt to
make a
prohibited transfer is void. No Member may resign his or her membership.
On
notice of a transfer, the Association shall record the transfer on its
books.
3.4. Membership
and Voting Rights: Membership
and voting rights shall be as set forth in the Bylaws.
7
ARTICLE
4. ASSESSMENTS
AND LIENS
4.1. Creation
of the Lien and Personal Obligation of Assessments: The
Declarant, for each Condominium within the Project, hereby covenants, and
each
Owner of any Condominium by acceptance of a deed for that Condominium, whether
or not it shall be so expressed in such deed, covenants and agrees:
(1)
to
pay
Regular Assessments, Cost Center Assessments, Special Assessments and
Reimbursement Charges to the Association as established in this Declaration,
and
(2) to
allow
the Association to enforce any Assessment Lien established under this
Declaration by nonjudicial proceedings under a power of sale or by any other
means authorized by law.
The
Regular Assessments, Cost Center Assessments, Special Assessments, and those
Reimbursement Charges that legally can be an Assessment Lien pursuant to
section
4.11 hereof, together with interest, late charges, collection costs and
reasonable attorneys' fees, shall be a charge on the Condominium and shall
be a
continuing Assessment Lien upon the Condominium against which each such
Assessment is made, the lien to become effective upon recordation of a Notice
of
Delinquent Assessment. Each Assessment, together with interest, late charges,
collection costs, and reasonable attorneys' fees, shall also be the personal
obligation of the person who was the Owner of such Condominium at the time
when
the Assessment fell due. The personal obligation for delinquent Assessments
shall not pass to his successors in title unless expressly assumed by them.
No
Owner shall be exempt from liability for payment of Assessments by waiver
of the
use or enjoyment of any of the Common Areas or by the abandonment of the
Owner's
Condominium.
The
interest of any Owner in the amounts paid pursuant to any Assessment upon
the
transfer of ownership shall pass to the new Owner. Upon the termination of
these
covenants for any reason, any amounts remaining from the collection of such
Assessments after paying all amounts properly charged against such Assessments
shall be distributed to the then Owners on the same pro rata basis on which
the
Assessments were collected.
4.2. Purpose of Assessments: The
Assessments levied by the Association shall be used exclusively to promote
the
economic interests, recreation, health, safety, and welfare of all the Owners
and other residents in the Project and to enable the Association to perform
its
obligations hereunder.
8
4.3. Assessments:
A. Regular
Assessments: The
Board
shall establish and levy Regular Assessments in an amount that the Board
estimates will be sufficient to raise the funds needed to perform the duties
of
the Association during each fiscal year.
(1)
The
Regular Assessment shall include a portion for reserves in such amounts as
the
Board in its discretion considers appropriate to meet the costs of the future
repair, replacement or additions to the major improvements and fixtures that
the
Association is obligated to maintain and repair. Reserve funds shall be
deposited in a separate account and the signatures of at least two (2) persons
who shall either be members of the Board or one officer who is not a member
of
the Board and a member of the Board shall be required to withdraw monies
from
the reserve account.
B. Cost
Center Assessments: The
Board
may levy a Cost Center Assessment for
Common
Expenses, including operating and reserve funds, budgeted or allocated
exclusively to any particular Cost Center, as provided in the budgets on
file
with the Department of Real Estate.
The
cost
of operation, maintenance, repair, replacement and insurance of the residential
lobbies, corridors, and elevators shall be allocated among the residential
Units
as a Cost Center Assessment. The cost of community water shall be allocated
among the commercial units as a Cost Center Assessment.
C. Special
Assessments: The
Board, at any time, may levy a Special Assessment in order to raise funds
for
unexpected operating or other costs, insufficient operating or reserve funds,
or
such other purposes as the Board in its discretion considers appropriate.
Special Assessments shall be allocated among the Units in the same manner
as
Regular Assessments, except in the case of an Assessment levied by the Board
against a Member to reimburse the Association for costs incurred in bringing
a
Member into compliance with provisions of the Governing Documents.
4.4. Restrictions
on Increases in Regular Assessments or Special Assessments:
A. Except
as
provided in section 4.4B, without having first obtained the approval of such
action by the vote or written assent of Members casting a majority of the
votes
at a meeting of the Association at which a quorum is present, the Board may
not:
(1) impose a Regular Assessment on any Condominium which is more than twenty
percent (20%) greater than the Regular Assessment for the immediately preceding
fiscal year or (2) levy a Special Assessment to defray the cost of any action
or
undertaking on behalf of the Association which in the aggregate exceeds five
percent (5%) of the budgeted gross expenses of the Association for that fiscal
year. For purposes of this section 4.4, a "quorum" means Members
constituting more than fifty percent (50%) of the voting power of the
Association. Any meeting of the Association for purposes of complying with
this
section 4.4 shall be conducted in accordance with Chapter 5
(commencing with § 7510) of Part 3, Division 2 of Title 1 of
the California Corporations Code and § 7613 of the California Corporations
Code. The right of the Board to increase Regular Assessments by up to twenty
percent (20%) over the Regular Assessment for the immediately preceding fiscal
year is subject to the Board having complied with the provisions of California
Civil Code § 1365(a), which provisions are set forth in section 12.1A of
the Bylaws or having obtained the approval of such increase by the Members
in
the manner set forth above in this section 4.4.
B. Assessments
- Emergency Situations: Notwithstanding
the foregoing, the Board, without membership approval, may increase Regular
Assessments, increase or levy Special Assessments necessary for an emergency
situation in amounts that exceed the provisions of section 4.4.A, above.
For
purposes of this section, an emergency situation is one of the
following:
(1)
an
extraordinary expense required by an order of a court,
(2)
an
extraordinary expense 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, or
(3)
an
extraordinary expense 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 in preparing and distributing the pro forma operating
budget, provided, however, that prior to the imposition or collection of
the
Assessment, the Board shall pass a resolution containing written findings
as to
the necessity of the extraordinary expense involved and why the expense was
not
or could not have been reasonably foreseen in the budgeting process and the
resolution shall be distributed to the Members with the notice of the
Assessment.
9
The
Association shall provide to the Owners by first-class mail notice of any
increase in the Regular Assessments or Special Assessments of the Association,
not less than thirty (30) nor more than sixty (60) days prior to the
increased Assessment becoming due.
This
section 4.4 incorporates the statutory requirements of California Civil Code
§ 1366. If this section of the California Civil Code is amended in
any manner, this section 4.4 automatically shall be automatically amended
in the same manner without the necessity of amending this
Declaration.
C. Notice
and Quorum for Any Action Authorized Under Section 4.4:
Any
action authorized under section 4.4, which requires a vote of the membership,
shall be taken at a meeting called for that purpose, written notice of which
shall be personally delivered or mailed to all Members not less than ten
(10)
nor more than ninety (90) days in advance of the meeting specifying the place,
day and hour of the meeting and, in the case of a special meeting, the nature
of
the business to be undertaken. The action may also be taken without a meeting
pursuant to the provisions of California Corporations Code §7513.
4.5. Division of Assessments: Both
Regular Assessments and Special Assessments shall be levied equally among
the
Condominiums, except for that portion of the Assessments specially allocated
to
meet the cost of insurance, painting and roof reserves, and any commonly
metered
domestic water, gas or electricity. These specially allocated items shall
be
levied among the Condominiums in the proportion that the square footage of
living space of each Unit bears to the square footage of all the Units subject
to the Declaration as determined by the plans prepared by Declarant and set
forth in the budget submitted to the California Department of Real Estate.
Regular Assessments shall be collected on a monthly basis unless the Board
directs otherwise. Special Assessments may be collected in one (1) payment
or
periodically as the Board shall direct. Cost Center Assessments shall be
allocated among the Owners of Units within the Cost Center as provided herein
and shall be collected on a monthly basis unless the Board directs
otherwise.
4.6. Collection
of Assessments: Regular
Assessments shall be collected on a monthly basis unless the Board directs
otherwise. Special Assessments may be collected in one (1) payment or
periodically as the Board shall direct.
4.7. Date
of Commencement of Regular Assessment; Due Dates: The
Regular Assessments and provided for in this Declaration shall commence as
to
all Condominiums covered by this Declaration on the first day of the month
following the first conveyance of a Condominium to an individual Owner under
authority of a public report. The first Assessment shall be adjusted according
to the number of months remaining in the calendar year.
The
Board
of Directors shall use its best efforts to fix the amount of the Regular
Assessment against each Condominium and send written notice thereof to every
Owner at least forty-five (45) days in advance of each Assessment period,
provided that failure to comply with the foregoing shall not affect the validity
of any Assessment levied by the Board. Regular Assessments may be prorated
on a
monthly basis. The due dates shall be established by the Board of Directors.
The
Association shall, upon demand, and for a reasonable charge, furnish a
certificate signed by an officer or designated representative of the Association
stating that the Assessments on a specified Condominium have been paid. Such
a
certificate shall be conclusive evidence of such payment.
4.8. Effect of Nonpayment of Assessments: Any
Assessment not paid within fifteen (15) days after the due date shall be
delinquent, shall bear interest at the rate of twelve percent (12%) per annum
commencing thirty (30) days after the due date until paid, and shall incur
a
late payment penalty in an amount to be set by the Board from time to time,
not
to exceed the maximum permitted by applicable law.
4.9. Transfer of Condominium by Sale or Foreclosure: Sale
or
transfer of any Condominium shall not affect the Assessment Lien. However,
the
sale of any Condominium pursuant to Foreclosure of a First Mortgage shall
extinguish the Assessment Lien of any Assessments on that Condominium (including
attorneys’ fees, late charges, or interest levied in connection therewith) as to
payments which became due prior to such sale or transfer (except for Assessment
Liens as to which a Notice of Delinquent Assessments has been recorded prior
to
the Mortgage). No amendment of the preceding sentence may be made without
the
consent of Owners of Condominiums to which at least sixty-seven percent (67%)
of
the votes in the Association are allocated, and the consent of the Eligible
Mortgage Holders holding First Mortgages on Condominiums comprising fifty-one
percent (51%) of the Condominiums subject to First Mortgages. No sale or
transfer shall relieve such Condominium from liability for any Assessments
thereafter becoming due or from the lien thereof.
10
The
unpaid share of such Assessments shall be deemed to be Common Expenses
collectible from all of the Condominium Owners including such acquirer, his
successors or assigns.
If
a
Condominium is transferred, the grantor shall remain liable to the Association
for all unpaid Assessments against the Condominium through and including
the
date of the transfer. The grantee shall be entitled to a statement from the
Association, dated as of the date of transfer, setting forth the amount of
the
unpaid Assessments against the Condominium to be transferred and the Condominium
shall not be subject to a lien for unpaid Assessments in excess of the amount
set forth in the statement, provided, however, the grantee shall be liable
for
any Assessments that become due after the date of the transfer.
4.10. Reimbursement
Charges; Fines and Penalties: The
Board
may levy a Reimbursement Charge against a Member to reimburse the Association
for costs incurred by the Association in the repair of damage to the Common
Area
and facilities for which the Member or the Member's guests or tenants were
responsible and in bringing the Member and his Unit into compliance with
the
provisions of the Project Documents in the amount required to reimburse the
Association for the actual costs and expenses incurred and the amounts incurred
to enforce the Associations rights under this Declaration as are then permitted
by law. Reimbursement Charges shall be payable when directed by the Board
after
written notice to the Owners, which notice shall in no event be less than
thirty
(30) days. If an Owner disputes a Reimbursement Charge, the Owner may request
a
hearing before the Board.
4.11. Priorities; Enforcement; Remedies: If
an
Owner fails to pay an Assessment when due, the Association has the right,
and
option, to bring legal action against the Owner to enforce collection of
the
unpaid and past due Assessment, or may impose an Assessment Lien on the Unit
owned by Owner pursuant to the provisions of Civil Code § 1367.1. Suit to
recover a money judgment for unpaid Assessments and attorneys’ fees, shall be
maintainable without foreclosing or waiving the lien securing the same. The
Association shall distribute the written notice described in subdivision
(b) of
Civil Code § 1365.1 entitled “Notice Assessments and Foreclosure” to each Member
during the 60-day period immediately preceding the beginning of the
Association's fiscal year. The notice is to be printed in at least 12-point
type.
A. Statement
of Charges:
At
least
30 days prior to the Association recording an Assessment Lien upon a Unit
pursuant to Civil Code § 1367.1(a), the Association shall notify the owner of
record in writing by certified mail of the following:
(1) A
general
description of the collection and lien enforcement procedures of the Association
and the method of calculation of the amount owed, a statement that the Owner
has
the right to inspect the Association’s records, pursuant to section 8333 of the
Corporations Code, and the following statement in 14-point boldface type,
if
printed, or in capital letters, if typed: "IMPORTANT NOTICE: IF YOUR SEPARATE
INTEREST IS PLACED IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR ASSESSMENTS,
IT
MAY BE SOLD WITHOUT COURT ACTION".
(2) An
itemized statement of the charges owed by the Owner, including items on the
statement which indicate the amount of any delinquent Assessments, the fees
and
reasonable costs of collection, reasonable attorney's fees, any late charges,
and interest, if any.
(3) A
statement that the Owner shall not be liable to pay the charges, interest,
and
costs of collection, if it is determined the Assessment was paid on time
to the
Association.
(4) The
right
to request a meeting with the Board as provided by Civil Code Section
1367.1(c)(3).
(5) The
right
to dispute the Assessment debt by submitting a written request for dispute
resolution to the Association pursuant to the Association's "meet and confer"
program required in Article 5 (commencing with Section 1363.810) of Chapter
4 of
the Civil Code.
(6) The
right
to request alternative dispute resolution with a neutral third party pursuant
to
Article 2 (commencing with Section 1369.510) of Chapter 7 of the Civil Code
before the Association may initiate foreclosure against the Owner's Unit,
except
that binding arbitration shall not be available if the Association intends
to
initiate a judicial foreclosure.
11
Note: Any
payments made by the Owner toward the debt shall first be applied to the
Assessments owed, and, only after the Assessments owed are paid in full shall
the payments be applied to the fees and costs of collection, attorneys’ fees,
late charges, or interest. The
Association need not accept any tender of a partial payment of an Assessment
and
all costs and attorneys' fees attributable thereto. Acceptance of any such
tender does not waive the Association's right to demand and receive full
payment.
When
an Owner makes a payment, the owner may request a receipt and the Association
shall provide it. The receipt shall indicate the date of payment and the
person
who received it. The Association shall provide a mailing address for overnight
payment of Assessments.
B. Payment
Plan:
An
Owner
may submit a written request to meet with the Board to discuss a payment
plan
for the Assessment debt noticed pursuant to section 4.11A. The Association
shall
provide the Owners the standards for payment plans, if any exist. The Board
shall meet with the Owner in executive session within forty five (45) days
of
the postmark of the request, if the request is mailed within fifteen (15)
days
of the date of the postmark of the notice, unless there is no regularly
scheduled Board meeting within that period, in which case the Board may
designate a committee of one or more members to meet with the Owner. Payment
plans may incorporate any Assessments that accrue during the payment plan
period. Payment plans shall not impede the Association's ability to record
a
lien on the Owner's Unit to secure payment of delinquent Assessments. Additional
late fees shall not accrue during the payment plan period if the Owner is
in
compliance with the terms of the payment plan. In the event of a default
on any
payment plan, the Association may resume its efforts to collect the delinquent
Assessments from the time prior to entering into the payment plan.
C. Notice
of Delinquent Assessment:
After
compliance with the provisions of Civil Code § 1367.1(a), the Association may
record a Notice of Delinquent Assessment and establish an Assessment Lien
against the Unit of the delinquent Owner prior and superior to all other
liens
recorded subsequent to the Notice of Delinquent Assessment, except (1) all
taxes, bonds, Assessments and other levies which, by law, would be superior
thereto, and (2) the lien or charge of any First Mortgage of record
recorded prior to the Notice of Delinquent Assessment. The Notice of Delinquent
Assessment shall include an itemized statement of the charges owed by the
Owner
described in section 4.11A above, a description of the Unit against which
the
Assessment and other sums are levied, the name of the record Owner, and the
name
and address of the trustee authorized by the Association to enforce the lien
by
sale. The notice shall be signed by any officer of the Association or any
management agent retained by the Association and shall be mailed by certified
mail to every person whose name is shown as an Owner of the Unit in the
Association’s records no later than ten (10) calendar days after recordation.
X. Xxxx
Releases:
Within
twenty-one (21) days after payment of the sums specified in the Notice of
Delinquent Assessment, the Association shall record or cause to be recorded
in
the Office of the County Recorder in which the Notice of Delinquent Assessment
is recorded a lien release or notice of rescission and provide the Owner
a copy
of the lien release or notice that the delinquent Assessment has
been
satisfied.
E. Enforcement
of Assessment Lien and Limitations on Foreclosure:
The
collection by the Association of delinquent Regular Assessments or delinquent
Special Assessments of an amount less than one thousand eight hundred dollars
($1,800), not including any accelerated Assessments, late charges, fees and
costs of collection, attorney's fees, or interest, may not be enforced through
judicial or nonjudicial foreclosure, but may be collected or secured in any
of
the following ways:
(1) By
a
civil action in small claims court, pursuant to Chapter 5.5 (commencing with
Section 116.110) of Title 1 of the Code of Civil Procedure. If the Association
chooses to proceed by an action in small claims court, and prevails, the
Association may enforce the judgment as permitted under Article 8 (commencing
with Section 116.810) of Title 1 of the Code of Civil Procedure. The amount
that
may be recovered in small claims court to collect upon a debt for delinquent
Assessments may not exceed the jurisdictional limits of the small claims
court
and shall be the sum of the following:
(a) The
amount owed as of the date of filing the complaint in the small claims court
proceeding.
(b) In
the
discretion of the court, an additional amount to that described in subparagraph
(a) equal to the amount owed for the period from the date the complaint is
filed
until satisfaction of the judgment, which total amount may include accruing
unpaid Assessments and any reasonable late charges, fees and costs of
collection, attorney's fees, and interest, up to the jurisdictional limits
of
the small claims court.
12
(2) By
recording a lien on the Owner's Unit upon which the Association may not
foreclose until the amount of the delinquent Assessments secured by the lien,
exclusive of any accelerated Assessments, late charges, fees and costs of
collection, attorney's fees, or interest, equals or exceeds one thousand
eight
hundred dollars ($1,800) or the Assessments are more than 12 months delinquent.
If the Association chooses to record a lien under these provisions, prior
to
recording the lien, the Association shall offer the Owner and, if so requested
by the Owner, participate in dispute resolution as set forth in Article 5
(commencing with Section 1368.810) of Chapter 4.
(3) Any
other
manner provided by law, except for judicial or nonjudicial foreclosure.
F. Foreclosure:
The
Association may collect delinquent Regular Assessments or delinquent Special
Assessments of an amount of one thousand eight hundred dollars ($1,800) or
more,
not including any accelerated Assessments, late charges, fees and costs of
collection, attorney's fees, or interest, or any Assessments that are more
than
12 months delinquent, using judicial or nonjudicial foreclosure subject to
the
following conditions:
(1) Prior
to
initiating a foreclosure on an owner's separate interest, the Association
shall
offer the Owner and, if so requested by the Owner, participate in dispute
resolution pursuant to the Association's "meet and confer" program required
in
Article 5 (commencing with Section 1363.810) of Chapter 4 or alternative
dispute
resolution as set forth in Article 2 (commencing with Section 1369.510) of
Chapter 7. The decision to pursue dispute resolution or a particular type
of
alternative dispute resolution shall be the choice of the Owner, except that
binding arbitration shall not be available if the Association intends to
initiate a judicial foreclosure.
(2) The
decision to initiate Foreclosure of an Assessment Lien for delinquent
Assessments that has been validly recorded shall be made only by the Board
and
may not be delegated to an agent of the Association. The Board shall approve
the
decision by a majority vote of the Board members in an executive session.
The
Board shall record the vote in the minutes of the next meeting of the Board
open
to all members. The Board shall maintain the confidentiality of the Owner
or
Owners of the Unit by identifying the matter in the minutes by the Unit number
of the property, rather than the name of the Owner or Owners. A Board vote
to
approve foreclosure of a lien shall take place at least 30 days prior to
any
public sale.
(3) The
Board
shall provide notice by personal service to an Owner of a Unit who occupies
the
Unit or to the owner's legal representative, if the Board votes to foreclose
upon the Unit. The Board shall provide written notice to an Owner of a Unit
who
does not occupy the Unit by first-class mail, postage prepaid, at the most
current address shown on the books of the Association. In the absence of
written
notification by the Owner to the Association, the address of the Owner's
Unit
may be treated as the Owner's mailing address.
(4) A
nonjudicial foreclosure by the Association to collect upon a debt for delinquent
Assessments shall be subject to a right of redemption. The redemption period
within which the Unit may be redeemed from a foreclosure sale under this
paragraph ends 90 days after the sale.
In
addition to the requirements of Civil Code Section 2924, a notice of default
shall be served by the Association on the Owner's legal representative in
accordance with the manner of service of summons in Article 3 (commencing
with
Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil
Procedure. Upon receipt of a written request by an Owner identifying a secondary
address for purposes of collection notices, the Association shall send
additional copies of any notices required by this section to the secondary
address provided. The Association shall notify Owners of their right to submit
secondary addresses to the Association, at the time the Association issues
the
pro forma operating budget pursuant to Section 1365. The Owner's request
shall
be in writing and shall be mailed to the Association in a manner that shall
indicate the Association has received it. The Owner may identify or change
a
secondary address at any time, provided that, if a secondary address is
identified or changed during the collection process, the Association shall
only
be required to send notices to the indicated secondary address from the point
the Association receives the request.
13
G. Sale
by Trustee: Any
sale
by the trustee shall be conducted in accordance with the provisions of
§§ 2924, 2924b, 2924c, 2924f, 2924g, 2924h and 2924j of the California
Civil Code applicable to the exercise of powers of sale in mortgages and
deeds
of trust, including any successor statutes thereto, or in any other manner
permitted by law. The fees of a trustee may not exceed the amounts prescribed
in
Civil Code §§ 2924c and 2924d. Nothing in this Declaration shall preclude the
Association from bringing an action directly against an Owner for breach
of the
personal obligation to pay Assessments nor from taking a deed in lieu of
foreclosure.
H. Purchase
By Association:
The
Association, acting on behalf of the Condominium Owners, shall have the power
to
bid for the Condominium at a Foreclosure sale, and to acquire and hold, lease,
mortgage and convey the Condominium. If the purchase of a Condominium would
result in a five percent (5%) or greater increase in Assessments, the purchase
shall require the vote or written consent of a majority of the total voting
power of the Association, including a majority of Members other than Declarant.
During the period a Condominium is owned by the Association, following
Foreclosure:
(1) no
right
to vote shall be exercised on behalf of the Condominium;
(2) no
Assessment shall be assessed or levied on the Condominium; and
(3) each
other Condominium shall be charged, in addition to its usual Assessment,
its
share of the Assessment that would have been charged to such Condominium
had it
not been acquired by the Association as a result of Foreclosure.
After
acquiring title to the Condominium at Foreclosure sale following notice and
publica-tion, the Association may execute, acknowledge and record a deed
conveying title to the Condominium which deed shall be binding upon the Owners,
successors, and all other parties.
I. Suspension
of Rights of Delinquent Owner:
The
Board
may temporarily suspend the voting rights and right to use Common Area
facilities of a Member who is in default in payment of any Assessment, after
notice and hearing, as provided in the Bylaws.
J. Fines
and Penalties:
In
conformity to Civil Code §1367.1(e), fines and penalties imposed by the
Association for violation of this Declaration as a disciplinary measure for
failure of an Owner to comply with this Declaration or the Rules, except
for
late payments, are not “Assessments,” and are not enforceable by Assessment
Lien, but are enforceable by court proceedings; provided, however, pursuant
to
Civil Code § 1367.1(d), monetary penalties imposed by the Association to
reimburse the Association for costs incurred for repair of damage to Common
Area
or facilities for which the Owner, or guests or tenants of an Owner, were
responsible may become the subject of a lien. Provided however that any such
enforcement as a lien shall only be permitted if there are no Units in the
Project that are subject to the jurisdiction of the Department of Real Estate
under a Final Subdivision Public Report. In the event that Civil Code §1367.1(e)
is amended to permit fines and penalties imposed by the Association for
violation of this Declaration as a disciplinary measure for failure of an
Owner
to comply with this Declaration or the Rules to be enforceable by Assessment
Lien, then this provision shall be deemed amended to conform to any such
amendment of Civil Code §1367.1(e).
The
provisions of this Section 4.11 are intended to comply with the requirements
of
Civil Code section 1367.1 in effect as of January 1, 2006. If these sections
are
amended or rescinded in any manner the provisions of this Section 4.11
automatically shall be amended or rescinded in the same manner. Civil Code
section 1367.1 may have been amended by the State Legislature, and the Board
should confirm the current statutory requirements.
4.12. Unallocated Taxes: In
the
event that any taxes are assessed against the Common Area, or the personal
property of the Association, rather than against the Condominiums, said taxes
shall be included in the Assessments made under the provisions of
section 4.1 and, if necessary, a Special Assessment may be levied against
the Condominiums in an amount equal to said taxes, to be paid in two (2)
installments, thirty (30) days prior to the due date of each tax
installment.
14
ARTICLE
5. DUTIES
AND POWERS OF THE ASSOCIATION
5.1. Duties: In
addition to the duties enumerated in the Bylaws, or elsewhere provided for
in
this Declaration, and without limiting the generality of those duties, the
Association shall perform the following duties:
A. Maintenance: The
Association shall maintain, repair, replace (when necessary), restore, operate
and manage all of the Common Area, and all facilities (including Utility
Facilities to the extent described in section 6.3), improvements, furnishings,
equipment and landscaping thereon, and all property that may be acquired
by the
Association, provided that each Owner shall maintain the Exclusive Use Common
Area appurtenant to that Owner's Condominium as required by section 7.23.
The
Association shall maintain the Landscaping and Parking area within the Xxxxx
Street Frontage contiguous to the Project, pursuant to and in accordance
with an
encroachment permit for the Project, to be issued by the City. Maintenance
will
include irrigation, landscaping and street sweeping.
(1)
Maintenance shall include, without limitation, painting, maintaining, cleaning,
repairing and replacing of all Common Areas, excluding exterior
doors and
the
hardware thereon, and windows, the cleaning and repair or replacement of
which
shall be the responsibility of the Unit Owners. Unit Owners shall maintain
their
respective sub-meters. Exterior lighting fixtures, including those attached
to
the Building, which fixtures are intended to illuminate the Common Area,
shall
be maintained by the Association. Owners shall keep exterior lighting on
for
security and safety purposes as directed from time to time by the Board.
Signage
located within the Common Area shall be maintained by the Association with
the
cost of such maintenance to be allocated equitably among the owners of the
units
for whose benefit the signs have been created.
(2)
The
Association shall have the Common Area periodically inspected for
wood-destroying pests and organisms and shall take appropriate corrective
measures therefor. The Association shall have the authority to require the
temporary removal of occupants of a Unit as may be necessary in connection
with
the treatment of wood-destroying pests or organisms, pursuant to the procedures
described in Civil Code § 1364(d) or any successor statute thereto. The costs of
any temporary relocation shall be borne by each Owner of a Unit who is required
to temporarily relocate.
(3)
Landscaping shall include regular fertilization, irrigation, pruning, and
other
prudent garden management practice necessary to promote a healthy weed-free
environment for optimum plant growth. The Association shall remove and replace
all dying or dead vegetation. The Association shall take appropriate steps
to
maintain the irrigation of the landscaping and to prevent damage resulting
from
misdirected and/or excessive watering.
(4)
The
Association shall be responsible for the periodic maintenance, testing, repair
and replacement of any built-in fire detection and protection equipment and
devices wherever located on the Project (including any interior sprinklers
but
excluding smoke detectors located inside the residences). Each Owner shall
immediately notify the Association of any problems with any sprinkler heads
located in the Owner's Unit. Maintenance shall include periodic testing of
such
equipment.
(5)
In order
to reduce the presence of mold, fungi, spores, pollens and other botanical
substances, or other allergens (collectively "Mold"), within the dwellings
and
Common Area, the Association shall inspect the exterior of the dwellings
and the
Common Area improvements not less frequently than once each quarter to check
for
water leaks or other breaches of the watertight integrity of the improvements,
and for the presence of Mold. If any water leaks and/or Mold are detected,
the
Association shall immediately take appropriate corrective steps to repair
the
leak, and/or remove the Mold and to maintain proper ventilation within enclosed
areas, and to maintain humidity levels to reduce the risk of Mold growth,
and
shall periodically inspect the irrigation system to ensure proper watering,
and
to correct any leaks and/or misdirected or excessive watering, and periodically
inspect the ground surface around the foundations to ensure that no water
is
pooling around or within the foundations, and shall maintain rain gutters
in a
clean and proper operating condition at all times, and take such other prudent
steps as may be appropriate to prevent Mold growth, or eliminate any existing
Mold.
(6)
Each
Owner and occupant shall fully cooperate with the agents of the Association
in
the performance of the Association's maintenance and repair obligations
described above. Such cooperation shall include, but is not limited to,
immediate notification to the Board or its managing agent of any maintenance
or
repair problems for which the Association is responsible and access to the
Owner
or occupant's dwelling and Exclusive Use Common Area as may be necessary
to
inspect and, if appropriate, to perform any necessary maintenance or
repairs.
15
(7)
In the
event of any water leak or overflow from any Unit that damages any Common
Area
or other Unit, the Owner and occupants of the Unit that is the source of
the
water leak or overflow (the "Responsible Owner") shall cooperate with the
Association in the inspection and correction of the problem. Cooperation
shall
include access to the dwelling to inspect and to correct the problem and/or
repair any damage. The Responsible Owner shall reimburse the Association
for its
repair cost to the extent the cost is not paid through insurance maintained
by
the Association, and the Association may levy a Reimbursement Charge to recover
the cost. If the damage may be covered by insurance maintained by the
Association, the Association shall submit an appropriate claim. Any deductible
amount shall be paid by the Responsible Owner.
(8)
The
responsibility of the Association for maintenance and repair shall not extend
to
repairs or replacements arising out of or caused by the willful or negligent
act
or omission of an Owner, or his guests, tenants or invitees or the Owner's
pets,
except
if the repair is covered by the insurance carried by the Association, the
Association shall be responsible for making the repairs, and the responsible
Owner shall pay any deductible pursuant to the insurance policy. If the Owner
fails to make such payment, then the Association may make such payment and
shall
charge the responsible Owner a Reimbursement Charge for reimbursement of
such
payment, which charge shall bear interest at the rate of twelve percent (12%)
per annum (but no greater than the maximum rate allowed by law) until paid
in
full. Any repairs arising out of or caused by the willful or negligent act
of an
Owner, or his guests, tenants or invitees, or the Owner's pets, the cost
of
which is not covered by insurance carried by the Association, shall be made
by
the responsible Owner, provided the Board approves the person actually making
the repairs and the method of repair. If the responsible Owner fails to take
the
necessary steps to make the repairs within a reasonable time under the
circumstances, the Association shall make the repairs and charge the cost
thereof as a Reimbursement Charge to the responsible Owner, which cost shall
bear interest at the rate of twelve percent (12%) per annum (but no greater
than
the maximum rate authorized by law) until paid in full. If an Owner disputes
his
or her responsibility for the repairs, the Owner shall be entitled to notice
and
a hearing as provided in the Bylaws before any charge may be
imposed.
B. Inspection
and Maintenance Guidelines:
The
Declarant has provided the Association and each Owner with the inspection
and
maintenance guidelines and schedules including manufacturers’ guidelines and
schedules for the inspection and maintenance of the improvements within the
Project (“Maintenance Guidelines”). When an Owner transfers a Unit, the Owner
shall deliver complete copies of the Maintenance Guidelines to the transferee
of
the Unit on or before the date of the transfer of title. Replacement copies
of
the Maintenance Guidelines may be obtained from the Declarant at Declarant’s
principal place of business. Declarant may charge a reasonable fee for providing
replacement copies of the Maintenance Guidelines. The Board shall comply
with
the Maintenance Guidelines for the periodic inspection and maintenance of
the
Common Area improvements and landscaping that the Association is required
to
maintain under this Declaration, and any other improvements outside of the
Common Area, which the Association has the responsibility to maintain. The
Board
shall take all appropriate actions to implement and comply with the Maintenance
Guidelines. The Board periodically and at least once every three (3) years
shall
review and update the Maintenance Guidelines. The Maintenance Guidelines
may not
be modified by the Association to reduce the maintenance obligations and
requirements of the Association without prior written approval of Declarant
for
a period of ten (10) years after the conveyance of the first Unit in the
Project
to an Owner other than the Declarant.
(1)
The
Association shall cause professional inspections of all infrastructure to
be
routinely made. The inspectors shall include, at least, an Architect, a Civil
Engineer and a Landscape Architect. Inspections shall be made at least yearly,
and for appropriate items or events, more often. Inspections will include
a
review of all repair records since the previous inspection.
(2)
The
inspections shall be reported at the annual membership meeting and in writing,
and shall include recommendations for cleaning, maintenance, repair,
replacement, etc. (if any), as well as opinions of the costs. The reports
shall
address any noted deterioration which may require future attention. The reports
may also recommend supplemental specialized investigations (i.e., termite,
mechanical, arborist, limnologist, geologist, structural, etc).
(3)
The
Association shall keep permanent records of all: (a) Complaints and potential
problems, including description, date and by whom; (b) Reports, including
inspections and recommendations; (c) Repairs, including description, location,
date, by whom made and cost; and (d) Plans, including construction drawings,
subsequent modifications, and repair plans.
(4)
The
Board may, from time to time, make appropriate revisions to the Association's
Maintenance Manual based on the Board's review thereof, to update such manual
to
provide for maintenance according to current industry practices so long as
such
changes do not reduce the useful life or functionality of the items being
maintained. No changes may be made to the Maintenance Manual without the
Declarant's prior written consent as long as there are Class B Members of
the
Association pursuant to the Bylaws.
16
(5)
The
Association shall maintain and operate the Common Area of the Project in
accordance with all applicable municipal, state, and federal laws, statutes
and
ordinances, as the case may be. The Association shall also, as a separate
and
distinct responsibility, insure that third parties (including Owners and
their
guests) utilize the Common Area in accordance with the aforementioned
regulations. The Association shall, when it becomes aware of any violation
of
the aforementioned regulations, expeditiously correct such
violations.
C. Insurance: The
Association shall maintain such policy or policies of insurance as are required
by section 8.1 of this Declaration.
D. Discharge of Liens: The
Association shall discharge by payment, if necessary, any lien against the
Common Area, and charge the cost thereof to the Member or Members responsible
for the existence of the lien (after notice and a hearing, as provided in
the
Bylaws).
E. Assessments: The
Association shall fix, levy, collect and enforce Assessments as set forth
in
Article IV hereof.
F. Payment of Expenses
and Taxes: The
Association shall pay all expenses and obligations incurred by the Association
in the conduct of its business including, without limitation, all licenses,
taxes or governmental charges levied or imposed against the property of the
Association.
G. Enforcement: The
Association shall be responsible for the enforcement of this
Declaration.
H. Compliance
With Laws: The
Association shall maintain and operate the Common Area of the Project in
accordance with all applicable municipal, state, and federal laws, statutes
and
ordinances, as the case may be. The Association shall also, as a separate
and
distinct responsibility, take reasonable action to require that third parties
(including Owners and their guests) utilize the Common Area in accordance
with
the aforementioned laws. The Association shall, when it becomes aware of
any
violation of the aforementioned laws, take reasonable action to expeditiously
correct such violations.
5.2. Powers: In
addition to the powers enumerated in the Articles and Bylaws or elsewhere
provided for in this Declaration, and without limiting their generality,
the
Association shall have the following powers:
A. Utility Service: The
Association may obtain water service, for the benefit of all of the
Condominiums.
B. Easements: The
Association shall have authority, by document signed by the President and
the
Secretary, to grant permits, licenses, and easements in addition to those
shown
on the Map or Condominium Plan and/or referred to in Article VI, where necessary
for roads, utilities, communications services, cable television, and sewer
facilities over the Common Area to serve the common and open space areas
and the
Condominiums, and/or where necessary to satisfy or achieve appropriate
governmental purpose or request. The Board of Directors may grant Exclusive
Use
easement rights over a portion of the Common Area to a Member with the
affirmative vote of sixty-seven percent (67%) of the separate interests in
the
Project, and without the approval of the Members in those limited cases set
forth in Civil Code § 1363.07.
C. Manager: The
Association may employ a manager or other persons and contract with independent
contractors or managing agents to perform all or any part of the duties
and
responsibilities of the Association, except for the responsibility to levy
fines, impose discipline, hold hearings, file suit, record or foreclose
liens,
or make capital expenditures, provided that any contract with a firm or
person
appointed as a manager or managing agent shall not exceed a one (1) year
term,
shall provide for the right of the Association to terminate the same at
the
first annual meeting of the Members of the Association, and to terminate
the
same for cause on thirty (30) days' written notice, or without cause or
payment
of a termination fee on ninety (90) days' written notice.
17
D. Adoption of Rules:
The
Board or the Members of the Association by majority vote, may adopt reasonable
Rules that are not inconsistent with this Declaration relating to the use
of the
Common Area and all its facilities, and the conduct of Owners and their tenants
and guests with respect to the Project and other Owners. Written copies of
such
Rules and any schedule of fines and penalties adopted by the Board shall
be
furnished to Owners.
E. Access: For
the
purpose of performing construction, main-tenance or emergency repair for
the
benefit of the Common Area or the Owners in common, and/or to perform
maintenance work that an Owner has failed to perform as provided in
section 7.23, the Association's agents or employees shall have the right,
after reasonable notice (not less than twenty-four (24) hours except in
emergencies) to the Owner of the Unit in which maintenance work has not been
performed, to enter any such Unit or to enter any portion of the Common Area
at
reasonable hours. Such entry shall be made with as little inconvenience to
the
Owner as practicable and any damage caused by such entry shall be repaired
by
the Board at the expense of the Association.
F. Assessments
and Liens: The
Board
shall have the power to levy and collect Assessments in accordance with the
provisions of Article IV hereof.
G. Fines
and Disciplinary Action: The
Board
may impose fines or take disciplinary action against any Owner for failure
to
pay Assessments or for violation of any provision of the Condominium Documents
and the Rules. Penalties may include, but are not limited to, fines, temporary
suspension of voting rights, or other appropriate discipline, provided the
Member is given notice and a hearing as provided in the Bylaws before the
imposition of any fine or disciplinary action. The Board shall have the power
to
adopt a schedule of reasonable fines and penalties for violations of the
terms
of this Declaration, and for violations of any Rules adopted pursuant to
section 5.2.D. The penalties prescribed may include suspension of all
rights and privileges of membership; provided, however, that suspension for
failure to pay Assessments shall be for a maximum period of thirty (30)
days, renewable by the Board for an additional thirty (30) day period or
periods until paid; and provided further that suspension for infraction of
Rules
or violation of this Declaration, other than for failure to pay Assessments,
shall be limited to a maximum period of thirty (30) days per infraction or
violation, and shall be imposed only after a hearing before the Board. The
Board
may extend that period for an additional thirty (30) day period or periods
in
the case of a continuing infraction or violation, and no hearing need be
held
for such extension. Written copies of Rules and the schedule of penalties
shall
be furnished to Owners. The Board shall levy fines and penalties and shall
enforce such Assessments as appropriate under applicable law.
H. Enforcement: The
Board
shall have the authority to enforce this Declaration as per section 9.1
hereof.
I. Acquisition
and Disposition of Property: The
Board
shall have the power to acquire (by gift, purchase or otherwise), own, hold,
improve, build upon, operate, maintain, convey, sell, lease, transfer, or
otherwise dispose of real or personal property in connection with the affairs
of
the Association. Any transfer of property shall be by document signed or
approved by two-thirds (2/3) of the total voting power of the Association
which
shall include two-thirds (2/3) of the Members other than Declarant, or where
the
two (2) class voting structure is still in effect, two-thirds (2/3) of the
voting power of each class of Members.
J. Loans: The
Board
shall have the power to borrow money, and, only with the assent (by vote
or
written consent) of two-thirds (2/3) of the total voting power of the
Association including two-thirds (2/3) of the Members other than Declarant,
or
where the two (2) class voting structure is still in effect, two-thirds (2/3)
of
the voting power of each class of Members, to mortgage, pledge, deed in trust,
or hypothe-cate any or all of its real or personal property as security for
money borrowed or debts incurred.
K. Dedication: The
Board
shall have the power to dedicate all or any part of the Common Area to
any
public agency, authority, or utility for such purposes and subject to such
conditions as may be agreed to by the Members. No such dedication shall
be
effective unless an instrument has been signed by two-thirds (2/3) of the
total
voting power of the Association including two-thirds (2/3) of the Members
other
than Declarant, or where the two (2) class voting structure is still in
effect,
two-thirds (2/3) of the voting power of each class of Members, agreeing
to such
dedication.
18
L. Contracts: The
Board
shall have the power to contract for goods and/or services for the Common
Area(s), for the Condominiums, or for the Association, subject to limitations
set forth in the Bylaws, or elsewhere in this Declaration. The Board shall
not
enter into any contracts with an independent contractor until it meets the
requirements of section 8.1A(3) herein.
M. Delegation: The
Board, and the officers of the Association shall have the power to delegate
their authority and powers to committees, officers or employees of the
Association, or to a manager employed by the Association, provided that the
Board shall not delegate its responsibility:
(1)
to
make expenditures for capital additions or improvements chargeable against
the
reserve funds;
(2)
to
conduct hearings concerning compliance by an Owner or his or her tenant,
lessee,
guest or invitee with the Declaration, Bylaws or Rules promulgated by the
Board;
(3)
to
make a decision to levy monetary fines, levy Reimbursement Charges, temporarily
suspend an Owner's rights as a Member of the Association or otherwise impose
discipline;
(4)
to
make a decision to levy Regular Assessments or Special Assessments;
or
(5)
to
make a decision to bring suit, record a claim of lien or institute Foreclosure
proceedings for default in payment of Assessments.
N. Security: The
Board
shall have the power (but not the obligation) to contract for security service
for the Common Area. Notwithstanding the foregoing, if the Association elects
to
provide any security services or systems, neither the Association nor the
Board
shall be deemed to have made any representation or warranty to any Owner,
nor
the tenants or invitees of any Owner, nor to any other Person using the
facilities or Improvements within the Project regarding security or safety.
Each
Owner shall be responsible for the security and safety of Persons who occupy
or
use the Condominium owned by the respective Owner. The Association shall
not be
subject to any claims or liability in connection with the provision of any
security service or security system, or the failure to provide any security
service or security system, within any portion of the Project.
O. Appointment
of Trustee: The
Board
acting on behalf of the Association, has the power to appoint or designate
a
trustee to enforce Assessment Liens by sale as provided in section 4.11 and
California Civil Code § 1367.1(d).
P. Litigation/Arbitration:
The
Board, subject to sections 9.11(Enforcement of Common Area Improvement
Bond) and 9.12 (Enforcement
of Assessment Bond) of
this
Declaration, shall have the power to institute, defend, settle or intervene
in
litigation, arbitration, mediation or administrative proceedings on behalf
of
the Association pursuant to Civil Code § 1368.3. The Board of Directors has
authority to enter into a contingent fee contract with an attorney in a matter
involving alleged design or construction defects in the Project, only as
to the
facilities or improvements the Association is responsible for maintaining
as
provided herein, only if the matter is not resolved pursuant to the procedures
set forth in section 9.14, and only after getting the vote at a duly noticed
and
properly held membership meeting, of a majority of the Members other than
Declarant.
If,
and
to the extent that, there is any inconsistency between this section 5.2.P
and
applicable provisions of the California Civil Code pertaining to the
commencement of an action by the Association for construction defect litigation,
the applicable provisions of the California statutes shall control.
Q. Other
Powers: In
addition to the powers contained herein, the Board may exercise the powers
granted to a nonprofit mutual benefit corporation under California Corporations
Code § 7140.
19
R. Common
Area Improvements:
The
Board shall have the authority and power to demolish, remove and reconstruct
any
and all improvements on or over or under the Common Area in a manner not
inconsistent with this Declaration, and to construct, improve and repair
improvements that are appropriate for the use and benefit of the Members
of the
Association, and to charge for the use of such improvements, provided that
the
Board shall not include in any Regular Assessment or Special Assessments
the
cost of any new capital improvement which exceeds $5,000 in cost to be expended
in any one calendar year, unless fifty-one percent (51%) or more of the
voting power of the Association previously shall have approved said expenditure.
5.3. Commencement
of Association's Duties and Powers: Until
incorporation of the Association, all duties and powers of the Association
as
described in this Declaration, including all rights of consent and approval,
shall be and remain the duties and powers of Declarant. After the date of
incorporation of the Association, the Association shall assume all duties
and
powers, and Declarant shall be relieved of any further liability for those
duties and powers.
ARTICLE
6. UTILITIES
6.1. Owners'
Rights and Duties: The
rights and duties of the Owners of Condominiums within the Project with respect
to sanitary sewer, storm sewer, water, drainage, electric, gas, television
receiving, telephone equipment, cables and lines, elevators, meters, catch
basins, storage tanks, wires, ducts, flues, pumps, boilers, and pipes, exhaust
flues and heating and air conditioning facilities (collectively, "Utility
Facilities") shall be as follows:
A. Whenever
Utility Facilities are installed within the Project, which Utility Facilities
or
any portion of those facilities lies in or upon Condominiums owned by other
than
the Owner of a Condominium served by those Utility Facilities, the Owners
of any
Condominium served by those Utility Facilities shall have the right of
reasonable access for themselves or for utility companies to repair, replace
and
generally maintain those Utility Facilities as and when necessary, due to
failure or inability of the Board to take timely action to make such repairs
or
perform such maintenance.
B. Whenever
Utility Facilities serving more than one (1) Condominium are installed within
the Project, the Owner of each Condominium served by those Utility Facilities
shall be entitled to the full use and enjoyment of such portions of those
Utility Facilities as service his or her Condominium.
C. In
the
event of a dispute between Owners with respect to the repair or rebuilding
of
Utility Facilities, or with respect to the sharing of the cost of those
facilities, then, upon written request of one (1) Owner addressed to the
other
Owner(s), the matter shall be submitted first to the Board for mediation,
and
thereafter, if the dispute remains unresolved, to binding arbitration within
sixty (60) days pursuant to section 9.14E. The decision of the arbitrator(s)
shall be final and conclusive on the parties, and judgment on the decision
may
be entered in any court having jurisdiction.
D. Owners
of
Commercial Units shall have rights of access to and through the plenum area
(the
area between the finished or dropped ceilings and the upper elevations of
the
Commercial Units) to install, maintain, repair and replace any Utility
Facilities reasonably necessary to satisfy or service the use of the Owner’s
Unit.
6.2. Easements
for Utilities and Maintenance: Easements
over, under and through the Project, including soffits and utility chases
within
Units, if any, for the installation, repair, and maintenance of Utility
Facilities, walkways, and landscaping as shown on the Map, and as may be
hereafter required or needed to service the Project, are reserved by Declarant
and its successors and assigns, until the completion of construction of the
Project and sale of the first Unit under authority of a public report, and
thereafter are reserved by and for the benefit of the Association and its
Members, together with the right to grant and transfer the same. The easements
shall be in favor of Declarant, and its successors and assigns, and in favor
of
the Association.
The
location of the facilities described in this section, and hence, the location
of
the easements to accommodate such facilities, shall be set forth in the final
plans for the Project that indicate the locations of Utility
Facilities.
In
case
of any variance between the Condominium Plan and the final plans with respect
to
the locations of said Utility Facilities, the final plans shall be determinative
as to the location of said Utility Facilities, and the location of the easements
to accommodate such Utility Facilities.
20
6.3. Association's Duties: The
Association shall maintain all Utility Facilities (including meters and
sub-meters) located in the Common Area including the Common Areas except
for
those facilities maintained by utility companies, public, private, or municipal
and those maintained by the Owners as described in section 7.23. The
Association shall pay all charges for utilities supplied to the Project except
those metered or charged separately to the Condominiums.
ARTICLE
7. USE
RESTRICTIONS
In
addition to all of the covenants contained in this Declaration, the use of
the
Project and each Condominium in the Project is subject to the
following:
7.1. Use
- Residential Units: Except
as
provided herein, no Residential Unit shall be occupied and used except for
residential purposes by the Owners, their tenants, and social guests, and
no
trade or business shall be conducted in any Condominium, except that Declarant,
its successors or assigns, may use any Condominium or Condominiums in the
Project owned by Declarant for a model home site or sites and display and
sales/construction office during construction and until the last Condominium
is
sold by Declarant, or until three (3) years from the date of closing of the
first sale in the Project, whichever occurs first. A Residential Unit may
be
used as a combined residence and professional office or commercial space
by the
Owner or occupant thereof, so long as such use does not interfere with the
quiet
enjoyment by other Condominium Owners. No tent, shack, trailer, basement,
garage, outbuilding or structure of a temporary character shall be used within
the Project at any time as a residence, either temporarily or permanently.
Occupancy
in Residential Units shall be limited as follows: No more than two (2) persons
per bedroom in any Residential Unit shall be permitted as permanent residents.
(A "permanent resident" means any person residing in a Residential Unit more
than sixty (60) days out of any twelve (12) consecutive month period) One
(1)
person shall be allowed in addition to the maximum number of permanent residents
otherwise permitted in each Residential Unit.
7.2. Use
- Commercial Units: The
Commercial Units may be occupied and used for office and commercial purposes
provided that any such use shall be in compliance with the applicable laws,
rules and regulations of the City as to such commercial office use.
7.3. Health
Care Facilities: No
Residential Unit may be used or occupied for health care facilities operating
as
a business or charity, unless permitted by law or ordinance which preempts
this
restriction.
7.4. Day
Care Use: No
family
day care center operation or use shall be permitted within the Project except
as
specifically authorized by California Health and Safety Code §1597.40 and other
applicable state statutes. The owner/operator of any such day care facility
shall comply with all local and state laws regarding the licensing and operating
of a day care center and, in addition, shall:
A. Name
the
Association as an additional insured on the liability insurance policy or
bond
carried by the owner/operator of the day care center;
B. Defend,
indemnify and hold the Association harmless from any liability arising out
of
the existence and operation of the day care center;
C. Abide
by
and comply with all of the Association's Rules;
D. Supervise
and be completely responsible for children at all times while they are within
the project;
E. Cooperate
with the Association if the Association's insurance agent or carrier requires
proof of insurance, proof of the agreement of the owner or operator of the
center to these conditions, or other reasonable requests.
21
7.5. Time
Shares Prohibited: No
Unit
or any portion of any Unit shall be leased, subleased, occupied, rented,
let,
sublet, or used for or in connection with any time sharing agreement, plan,
program or arrangement, including, without limitation, any so-called "vacation
license," "travel club," extended vacation," or other membership or time
interval ownership arrangement. The term "time sharing" as used herein shall
be
deemed to include, but shall not be limited to, any agreement, plan, program,
or
arrangement under which the right to use, occupy or possess the Unit or any
portion of the Project rotates among various persons, either corporate,
partnership, individual, or otherwise, on a periodically recurring basis
for
value exchanged, whether monetary or like kind use privileges, according
to a
fixed or floating interval or period of time of twenty-five (25) consecutive
calendar days or less. Provided, this section shall not be construed to limit
the personal use of any Unit or any portion thereof in the Project by any
Unit
Owner or his social or familial guests.
7.6. Nuisances: No
noxious, illegal, or seriously offensive activities shall be carried on within
a
Condominium, or in any part of the Project, nor shall anything be done thereon
that which may be or may become a serious annoyance or a nuisance to or which
may in any way interfere with the quiet enjoyment of each of the Owners'
Condominiums or which shall in any way increase the rate of insurance for
the
Project, or cause any insurance policy to be cancelled or to cause a refusal
to
renew the same, or which will impair the structural integrity of any building.
The Board shall have the authority to determine in its discretion what
constitutes a nuisance.
7.7. Parking: All
Parking for the Project is off site.
7.8. Signs:
A. Common
Area Signs: No signs shall be installed or displayed to the public view within
the Common Area except such signs as are approved by the Board or committee
appointed by the Board or approved by the City of Gilroy.
B. Residential
Signs: No signs shall be displayed to the public view on any Residential
Unit or
Residential Building except such signs as are approved by the Board or committee
appointed by the Board. However, each Owner may display only one (1) "For
Sale"
or "For Rent" or "For Exchange" sign and may also display one (1) sign
advertising directions to another Owners' Unit which is for sale, rent, or
exchange, provided the design, dimensions and locations are reasonable.
C. Commercial
Signs: No signs shall be installed or displayed to the public view within
the
Common Area except such signs as are approved by the Board or committee
appointed by the Board or approved by the City of Gilroy.
7.9. Animals
and Pets:
Except
as provided in this Declaration and permitted by the Rules, no animals of
any
kind shall be raised, bred, or kept in any Condominium, or on any other portion
of the Project. Trained dogs used for assistance by visually impaired, hearing
impaired or physically handicapped persons may be kept by an occupant or
invitee
of an Owner. No aggressive and/or trained attack dogs are permitted in the
Project. Owners, their tenants or other occupants of Units may keep no more
than
one (1) cat or one (1) dog within a Unit (as provided by California Civil
Code §
1360.5), and may keep a reasonable number of other ordinary household pets
and
fish that are kept in cages or aquariums. No such dog, cat or other animal
or
fish may be kept, bred, or maintained for any commercial purposes in any
Unit.
Owners, their tenants or other occupants of Commercial Units may keep a
reasonable number of fish that are kept in aquariums. All pets shall be kept
under reasonable control at all times. No pet shall be housed in or on, or
reside in or on, any Exclusive Use Common Area without written permission
from
the Board. No pets shall be allowed in the Common Area except as may be
permitted by Rules of the Board. No Owner shall allow his dog or cat to enter
the Common Area except on a leash. After making a reasonable attempt to notify
the Owner, the Association or any Owner may cause any pet found within the
Common Area in violation of the Rules of the Board or this Declaration to
be
removed by the Association (or any Owner) to a pound or animal shelter under
the
jurisdiction of the City by calling the appropriate authorities, whereupon
the
Owner may, upon payment of all expenses connected therewith, repossess the
pet.
Owners shall prevent their pets from soiling all portions of the Common Area
and
shall promptly clean up any waste left by their pets. Owners shall be fully
responsible for any damage caused by their pets. An Owner shall use reasonable
efforts to prevent any pet from making disturbing noises that can be heard
from
any other Unit. An Owner in violation of this section shall be deemed to
be
permitting, or causing a threat to safety or a serious annoyance or nuisance,
and after notice and hearing in compliance with the Bylaws, may be required
to
permanently remove the pet from the Project.
An
Owner
shall use reasonable efforts to prevent any animal within his Unit from making
disturbing noises that can be heard from any other Unit between the hours
of
10:00 PM to 7:00 AM. An Owner in violation of this section may be deemed
to be
permitting, or causing a serious annoyance or nuisance to any other
Owner.
22
7.10. Garbage and Refuse Disposal: All
rubbish, trash recycling materials and garbage shall be regularly removed
from
the Units, and shall not be allowed to accumulate thereon. Trash, garbage,
recycling materials and other waste shall only be kept in sanitary containers
located within the Units. All equipment for the storage or disposal of such
materials shall be kept in a clean and sanitary condition, and shall be screened
from view of neighboring Units, Common Areas and streets. No toxic or hazardous
materials shall be disposed of within the Project by dumping in the garbage
containers or down the drains, or otherwise. The Association shall be
responsible for removal of garbage from the central pick-up points by
appropriate contractors or agencies.
7.11. Radio and Television Antennas: No
outside television antenna, microwave or satellite dish, aerial, or other
such
device (collectively “Antennas”) shall be erected, constructed or placed on any
Common Area. Notwithstanding the foregoing, antennas with a diameter or diagonal
measurement of 36 inches or less may be installed within designated areas
of the
Common Area if they conform to the Rules and any Board Standards and, if
then
required by the Board Standards, any necessary approval is obtained in
accordance with the provisions of section 7.13. Reasonable restrictions which
do
not significantly increase the cost of the Antenna system or significantly
decrease its efficiency or performance may be imposed. Antennas may not be
attached to the exterior surface of any Building or to any Common Area fence
or
wall. The Architectural Review Committee shall, in acting upon requests for
approval of a satellite dish or other signal reception or transmission devices
comply with California Civil Code §1376 and FCC [Federal Communications
Commission] regulations.
7.12. Right
to Lease:
A. Any
Unit
Owner who wishes to lease his Condominium must meet each of the following
requirements, and the lease will be subject to these requirements whether
they
are included within the lease or not:
(1) all
leases must be in writing;
(2) the
lease must be for the entire Condominium and not merely parts of the
Condominium, unless the Owner remains in occupancy;
(3) all
leases shall be subject in all respects to provisions of the Declaration,
the
Bylaws, and all Rules adopted by the Board;
(4) all
Owners who lease their Condominiums shall promptly notify the Secretary of
the
Association in writing of the names of all tenants and members of tenants'
family occupying such Condominiums and shall provide the Secretary of the
Association with a complete copy of the lease. All Owners leasing their
Condominium shall promptly notify the Secretary of the Association of the
address and telephone number where such Owner can be reached;
(5)
no
Owner shall lease his Unit for a period of less than thirty (30)
days.
B. Any
failure of a tenant to comply with the Declaration, Bylaws, and Association
Rules, shall be a default under the lease, regardless of whether the lease
so
provides. In the event of any such default, the Owner immediately shall take
all
actions to cure the default including, if necessary, eviction of the
tenant.
C. The
Association shall give the tenant and the Owner notice in writing of the
nature
of the violation of the Declaration and/or Rules, and twenty (20) days from
the
mailing of the notice in which to cure the violation before the Association
may
file for eviction.
D. Each
Owner shall provide a copy of the Declaration, Bylaws and all Rules of the
Association to each tenant of his or her Unit. By becoming a tenant, each
tenant
agrees to be bound by the Declaration, the Bylaws and the Rules of the
Association, and recognizes and accepts the right and power of the Association
to evict a tenant for any violation by the tenant of the Declaration, the
Bylaws, and Rules of the Association.
7.13. Architectural Control: There
shall be no alteration, modification, painting or other improvement or physical
change to any portion of the Common Area or to Units (“Alterations”) that is in
violation of the terms of the Restrictive Covenant-Historic Properties unless
and until the same has been approved in writing by the Board and the City.
Notwithstanding the foregoing, an Owner may improve or alter any improvements
within the interior boundaries of the Owner's Unit, provided such improvement
or
alteration does not impair the structural or acoustical integrity of any
Common
Area, the utilities or other systems servicing the Common Area or other
Condominiums, does not involve altering any Common Area (including bearing
walls).
23
A. Submittal
Requirements. If
any
Owner desires to make any Alterations that requires approval under this section
7.13, the Owner shall submit to the Board such plans, specifications and
other
relevant materials required by the Board showing the nature, kind, shape,
color,
size, materials and location of any proposed Alterations. The Board shall
review
such submitted plans, specifications and materials for approval as to quality
of
workmanship and design and harmony of external design of such Alterations
with
existing structures, and as to location in relation to surrounding structures,
topography, and finish grade elevation. The owner shall be responsible for
submitting such proposed alterations to the City for approval as may be
necessary.
(1)
No
permission or approval of the Board shall be required to repaint in accordance
with Declarant's original color scheme, or to rebuild in accordance with
Declarant's original plans and specifications.
(2)
No
permission or approval shall be required to repaint in accordance with a
color
scheme previously approved by the Board, or to rebuild in accordance with
plans
and specifications previously approved by the Board. Nothing contained in
this
paragraph shall be construed to limit the right of an Owner to paint the
interior of his or her Unit any color desired.
B. Landscaping
and replacement of landscaping and vegetation in the Common Areas of the
Project
shall only be undertaken by the Association. No Alterations to such landscaping
may occur without the approval of the Board.
C. Approval
Requirements: In
the
event the Board fails to approve or disapprove a submittal for Alterations
in
writing within thirty (30) days after the same have been submitted to it,
the
submittal will be deemed disapproved. Approval of plans by the Board shall
in no
way make the Board or its members responsible for or liable for the improvements
built after approval of the plans, and the Owner whose plans are approved
shall
defend, indemnify and hold the Board, the Association, and its members harmless
from any and all liability arising out of such approval.
D. Governmental
Approvals: All
Alterations on or within Units or the Common Areas of the Project shall comply
with all design requirements, approvals and procedures of the City. Before
commencement of any alteration or improvements approved by the Board, the
Owner
shall comply with all appropriate governmental laws and regulations. Approval
by
the Board does not satisfy the appropriate approvals that may be required
by any
governmental entity with appropriate jurisdiction.
E. Completion
of Work; Review of Work: Upon
approval of the Board, the Owner shall diligently proceed with the commencement
and completion of all work so approved in compliance with the approvals granted.
The work must be commenced within six months from the date of approval unless
the Board permits the work to be commenced at a later time.
(1)
If the
work is not commenced within six months after the approval date, or such
later
time as the Board has granted, then the approval shall be deemed cancelled,
and
the Owner must reapply to the Board before undertaking any such work.
(2)
The
Board shall inspect work within sixty days after a notice of completion has
been
delivered to the Board by the Owner. The Board may also inspect the work
at any
time prior to completion as it deems appropriate to determine that the Board
approval is being followed. The Board is to inspect the work performed, and
determine whether it was performed and completed in compliance of the approval
granted in all material respects.
(3)
If at
any time during the construction of any work, the Board finds that the work
was
not performed or completed in compliance of the approval granted in all material
respects, or if the Board finds that the appropriate approval which was required
for any work was not obtained, the Board shall notify the Owner in writing
of
the non-compliance. The notice shall specify in writing the particulars of
non-compliance, and shall set forth the requirement of the Owner to remedy
the
non-compliance. The Board shall determine in its reasonable judgment whether
an
alteration, modification or improvement complies with the approval as granted
in
material respects. Minor changes, deviations or imperfections that do not
negatively affect or impact the Project shall not be considered as
non-compliance.
24
(4)
If the
Board has determined an Owner has not constructed an improvement in compliance
of the approval granted in all material respects, and if the Owner fails
to
remedy such non-compliance in accordance with provisions of the notice of
non-compliance, then after expiration of 30 days from the date of such
notification, and the Board shall provide Notice and Hearing to consider
the
Owner’s continuing non-compliance. The Board shall act after expiration of
thirty (30) days from the date of such notification. At the Hearing, if the
Board finds that there is no valid reason for the continuing non-compliance,
the
Board shall then require the Owner to remedy the non-compliance as necessary
and
appropriate in the determination of the Board as to result in the improvement
being rendered as reasonably in compliance as is appropriate for the overall
good and benefit of the Project, or remove the same within a period of not
more
than 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 (1)
remove
the non-complying improvement, (2) remedy the non-compliance, (3) institute
legal proceedings to enforce compliance or completion.
F.
Structural Integrity:
Nothing
shall be done in or on any Unit or in or on the Common Area which will impair
the structural integrity of any building.
7.14. Window
Coverings: All
drapes, curtains, shutters, blinds or other window coverings visible from
the
street or Common Areas shall be beige, white, off-white in color, or natural
or
stained wood, or lined in beige, white, or off-white, or as the case may
be, of
colors, materials and patterns which are approved by the Board.
7.15. Clothes Lines: There
shall be no laundering or drying of clothes outside of a Unit. No draping
of
towels, carpets, or laundry over exterior railings shall be allowed.
7.16. Power Equipment and
Motor Vehicle Maintenance: Except
for alterations being made pursuant to section 7.13 and repairs and maintenance
of Units, no power equipment or hobby shops (other than emergency work),
shall
be permitted on the Project except with prior written approval of the Board.
Motor vehicle maintenance is prohibited. Approval shall not be unreasonably
withheld, and in deciding whether to grant approval, the Board shall consider
the effects of noise, air pollution, dirt or grease, fire hazard, interference
with radio or television reception, and similar objections. All hazardous
waste
shall be disposed of properly by each Owner.
7.17. Liability
of Owners for Damage to Common Area: The
Owner
of each Condominium shall be liable to the Association for all damage to
the
Common Area or improvements to the extent described in section
5.1.A.
7.18. Attachments
to Buildings: Nothing
shall be attached to the Common Area, without Board consent, including, without
limitation, basketball apparatus.
7.19. Commonly
Metered Utilities: The
Board
may establish restrictions regarding the individual use of any utility on
a
common meter, and may impose reasonable charges for the individual use
thereof.
7.20. Flags,
Pennants, Banners, Etc.:
There
shall be no exhibiting, flying or hanging of any flags, pennants, banners,
kites, towels, etc., from any area of the Common Areas of the Project that
would
be visible from the street, Common Area, or the other Units, except in
conformance with Rules adopted by the Board, and for flags, banners and signs
that are expressly permitted by statute. The Association may adopt Rules
regarding the display of flags, banners and signs provided that such Rules
shall
be consistent with the then applicable laws.
7.21. Activities
Causing Increase in Insurance Rates:
Nothing
shall be done or kept in any Unit or in any improvements constructed in any
Unit, or in the Common Area, which will increase any applicable rate of
insurance or which will result in the cancellation of insurance on any Unit
or
any part of the Common Area, or which would be in violation of any
law.
7.22. Common
Area Use:
Nothing
shall be stored, grown, or displayed in the Common Area, including decks,
that
is not approved in advance by the Board.
25
7.23. Owner's
Right and Obligation to Maintain and Repair:
A. Maintenance
of Units: Except
for those portions of the Project which the Association is required to maintain
and repair, each Condominium Owner shall, at his sole cost and expense, maintain
and repair the Unit, keeping the same in good condition. Each Owner shall
be
responsible for and bear the cost of maintenance, repair and replacement
of the
following items within such Owner's Unit: interior surfaces of all perimeter
and
interior walls, ceilings and floors (including wood flooring, tile, plaster
and
paint or other covering); garbage disposals, ranges, refrigerators, dishwashers,
washing machines, dryers, light fixtures, smoke detectors, sub-meters and
any
and all other appliances of any nature whatsoever; heating, ventilating and
air
conditioning equipment servicing such Unit (although such equip-ment may
be
located in part outside such Unit); exterior doors and door hardware, gaskets
and seals, interior doors, including all hardware on the doors; cabinets,
light
bulbs; plumbing and other fixtures of any nature whatsoever; "built-in"
features; and decorative features, fireplaces, if any, and any furniture
and
furnishings.
B. Smoke
Detectors and Fire Sprinklers: Each
Owner shall maintain, repair and replace any smoke detectors located in the
Owner's Unit. The Association shall maintain any automatic fire sprinkler
heads
located in any Unit, provided that each Owner immediately shall notify the
Association of any problems with any automatic sprinkler heads located in
the
Owner's Unit.
C. Other
Unit Maintenance: In
addition, each Owner shall be responsible for and bear the cost of maintenance,
repair and replacement of the following items serving such Owner's Unit:
interior entrance and stairway surfaces, elevators, and windows.
Each Owner shall keep the Exclusive Use Common Area appurtenant to the Owner's
Condominium in a clean and neat condition at all times.
D. Mold:
In
order
to reduce the presence of mold, fungi, spores, pollens and other botanical
substances, or other allergens (collectively "Mold") within the Unit, the
Owners
shall inspect the interior of their dwellings not less frequently than once
each
quarter to check for water leaks or other breaches of the watertight integrity
of the improvements, and for the presence of Mold. If any water leaks and/or
Mold are detected within the Unit, the Owner shall immediately take appropriate
corrective steps to repair the leak, and/or remove the Mold and to maintain
proper ventilation within enclosed areas, and to maintain humidity levels
to
reduce the risk of Mold growth, and take such other prudent steps as may
be
appropriate to prevent Mold growth, or eliminate any existing Mold.
E. Maintenance
Guidelines: Each
Owner shall maintain the improvements within his or her Unit in accordance
with
the Maintenance Guidelines established by the Declarant. A copy of the
Maintenance Guidelines shall be delivered by Declarant to each Owner when
the
Unit is sold to the Owner. Each Owner shall retain the Maintenance Guidelines
and take all appropriate actions to comply with and implement the Maintenance
Guidelines. When an Owner transfers a Unit, the Owner shall deliver a complete
copy of the Maintenance Guidelines to the transferee of the Unit on or before
the date the Unit is transferred.
F.
Enforcement of Maintenance Responsibility: In
the
event an Owner fails to maintain the interior of his Unit in a manner which
the
Board deems necessary to preserve the appearance and value of the Project,
the
Board may notify Owner of the work required and request it be done within
sixty
(60) days from the giving of such notice. In the event the Owner fails to
carry
out such maintenance within said period, the Board may, following notice
and
hearing as provided in the Bylaws, cause such work to be done and the cost
of
the work shall immediately be paid by such Owner to the Association as a
Reimbursement Charge, and until paid shall bear interest at the rate of twelve
percent (12%) per annum (but no greater than the maximum rate authorized
by
law).
26
ARTICLE 8. INSURANCE;
DAMAGE OR DESTRUCTION; CONDEMNATION
8.1. Insurance: The
Association shall obtain and maintain the following insurance:
A. A.
Policies:
(1) a
master
hazard policy insuring all improvements, equipment and fixtures in the Project
(including the Units as originally constructed) with policy limits of either:
[a] full replacement value of the covered improvements or [b] no less than
80%
of replacement cost of the covered improvements, excluding foundations and
footings in either instances, unless otherwise required by FNMA or FHLMC
requirements as set forth in subparagraph 8.1B, below. The following
endorsements should be included in any such master hazard policy, if
commercially reasonable to obtain:
(a) changes
in building codes ("ordinance or law endorsement");
(b) inflation
guard coverage;
(c) demolition
coverage;
(d) "agreed-amount"
endorsement (to eliminate a coinsurance problem);
(e) replacement
cost endorsement; and
(f) primary
coverage endorsement.
(2) if
obtainable, an occurrence version comprehensive general liability policy
insuring the Association, its agents, the Owners and their respective family
members, against liability incident to the ownership or use of the Common
Area
or any other Association owned or maintained real or personal property. The
amount of general liability insurance that the Association shall carry at
all
times shall be not less than the minimum amounts required by California Civil
Code §1365.7 and
§
1365.9;
(3) workers'
compensation insurance to the extent required by law (or such greater amount
as
the Board deems necessary). The Association shall obtain a Certificate of
Insurance naming it as an additional insured in regard to workers' compensation
claims from any independent contractor who performs any service for the
Association, if the receipt of such a certificate is practicable;
(4) fidelity
bonds or insurance covering officers, directors, and employees that have
access
to any Association funds;
(5) flood
insurance if the Project is located in an area designated by an appropriate
governmental agency as a special flood hazard area;
(6) officers
and directors liability insurance in the minimum amounts required by California
Civil Code §§ 1365.7;
(7) insurance
against water damage, and liability for non-owned and hired automobiles,
such
other insurance as the Board in its discretion considers necessary or advisable;
and
(8) earthquake
insurance to the extent required by law, and if not required by law, then
to the
extent available at commercially reasonable rates in the opinion of the
Board.
27
B. Amount,
Term and Coverage. The
amount, term and coverage of any policy required hereunder (including the
type
of endorsements, the amount of the deductible, the named insureds, the loss
payees, standard mortgage clauses, notices of changes or cancellations, and
the
insurance company rating) shall satisfy the minimum requirements imposed for
this type of project by the Federal National Mortgage Association ("FNMA")
and
the Federal Home Loan Mortgage Corporation ("FHLMC") or any successor to
either
of those entities (except for earthquake insurance, the purchase of which
shall
be within the discretion of the Board, as provided in § 8.1A(8) above). If the
FNMA or FHLMC requirements conflict, the more stringent requirement shall
be
met. If FNMA and FHLMC do not impose requirements on any policy required
hereunder, the term, amount and coverage of such policy shall be no less
than
that which is customary for similar policies on similar projects in the area.
The Board shall adopt a policy regarding payment of deductibles on any insurance
coverage. Unless the Board determines otherwise, the Association shall pay
deductibles required under any insurance claims from Association funds, unless
insufficient funds are available to the Association from the Association's
accounts or from funds borrowed by the Association in accordance with this
Declaration, in which event the Association shall levy a Special Assessment,
in
accordance with sections 4.3B and 4.4 of this Declaration, with respect to
the
amount of any such deductible which exceeds funds available to the Association
from Association funds or from borrowing.
C. Representation
for Claims. Each
Owner appoints the Association or any insurance trustee designated by the
Association to act on behalf of the Owners in connection with all insurance
matters arising from any insurance policy maintained by the Association,
including without limitation, representing the Owners in any proceeding,
negotiation, settlement or agreement.
D. Waiver
of Subrogation. Any
insurance maintained by the Association shall contain "waiver of subrogation"
as
to the Association and its officers, directors and Members, the Owners and
occupants of the Condominiums and Mortgagees, and, if obtainable, a
cross-liability or severability of interest endorsement insuring each insured
against liability to each other insured.
E. All
individually owned insurance shall contain a waiver of subrogation as to
the
Association and its officers, directors and Members, the Owners and occupants
of
the Condominiums and Mortgagees, and all Members are deemed to have waived
subrogation rights as to the Association and/or other Members, whether or
not
their policies so provide.
F. Review
of Policies. The
Association shall periodically (and not less than once every three (3) years)
review all insurance policies maintained by the Association to determine
the
adequacy of the coverage and to adjust the policies accordingly.
G. Separate
Insurance Limitations. No
Owner
shall separately insure his Condominium against loss by fire or other casualty
covered by any insurance carried by the Association. If any Owner violates
this
provision, any diminution in insurance proceeds otherwise payable under the
Association's policies that results from the existence of such other insurance
will be chargeable to the Owner who acquired other insurance. The insurance
maintained by the Association does not cover the personal property in the
residences and does not cover personal liability for damages or injuries
occurring in the Units. Any Owner can insure his personal property against
loss
and obtain any personal liability insurance that he desires. In addition,
any
improvements made by an Owner within his Unit may be separately insured by
the
Owner, but the insurance is to be limited to the type and nature of coverage
commonly known as "improvements insurance". The Owner shall not obtain such
insurance if the policy referred to in section 8.1A(1) will provide
coverage for such improvements.
H. Copies
of Policies; Notice to Members. The
Association shall make available to all Members a copy of the Association's
policy to enable Members to insure their Units without duplicating insurance
carried by the Association and inadvertently triggering a co-insurance clause
in
the Association's policy referred to in section 8.1A(1). The Association
shall
distribute annually to the Members a summary of the Association's insurance
policies as required by Civil Code section 1365(e) and as provided in the
Bylaws. The Association, as soon as reasonably practical, shall notify its
Members by first-class mail if any of the policies have been cancelled and
not
immediately renewed or restored or if there is a significant change such
as a
reduction in coverage or limits or an increase in the deductible for any
policy.
If the Association receives any notice of non-renewal of a policy, the
Association immediately shall notify its Members if replacement coverage
will
not be in effect by the date the existing coverage will lapse.
To
the
extent that the information required to be disclosed, as described in Civil
Code
§1365(e), is specified in the insurance policy declaration page, the Association
may meet its disclosure obligations by making copies of that page and
distributing copies to all its Members.
28
I. Limitation
on Liability. The
Association, and its directors and officers, shall have no liability to any
Owner or Mortgagee if, after a good faith effort, it is unable to obtain
the
insurance required hereunder, because the insurance is no longer available
or,
if available, can be obtained only at a cost that the Board in its sole
discretion determines is unreasonable under the circumstances, or the Members
fail to approve any Assessment increase needed to fund the insurance premiums.
In such event, the Board immediately shall notify each Member and any Mortgagee
entitled to notice that the insurance will not be obtained or
renewed.
J. Policies
and Procedures Regarding the Filing and Processing of
Claims:
The
Board shall adopt a policies and procedures regarding the filing and processing
of claims for damage and destruction of Common Area improvements or any other
matters covered by insurance maintained by the Association.
8.2. Damage
or Destruction: If
Project improvements are damaged or destroyed by fire or other casualty,
the
improvements shall be repaired or reconstructed substantially in accordance
with
the original as-built plans and specifications, modified as may be required
by
applicable building codes and regulations in force at the time of such repair
or
reconstruction and subject to such alterations or upgrades as may be approved
by
the Board, unless either of the following occurs: (1) the cost of repair or
reconstruc-tion is more than fifty percent (50%) of the current replacement
costs of all Project improvements, available insurance proceeds are not
sufficient to pay for at least eighty-five percent (85%) of the cost of such
repairs or reconstruction, and three-fourths (3/4) of the total voting power
of
the Association residing in Members and their First Lenders vote against
such
repair and reconstruction; or (2) available insurance proceeds are not
sufficient to substantially repair or reconstruct the improvements within
a
reasonable time as determined by the Board, a Special Assessment levied to
supplement the insurance fails to receive the requisite approval (if such
approval is required) as provided in section 4.4, and the Board, without
the
requirement of approval by the Owners, is unable to supplement the insurance
by
borrowing on behalf of the Association sufficient monies to enable the
improvements to be substantially repaired or recon-structed within a reasonable
time.
A.
Process
For Repair or Reconstruction:
If the
improvement is to be repaired or reconstructed and the cost for repair or
reconstruction is in excess of twenty-five percent (25%) of the current
replacement cost of all the Project improvements, the Board shall designate
a
construction consultant, a general contractor, and an architect for the repair
or reconstruction. All insurance proceeds, Association monies allocated for
the
repair or reconstruction, and any borrowings by the Association for the repair
or reconstruction shall be deposited with a commercial lending institution
experienced in the disbursement of construction loan funds (the "depository")
as
selected by the Board. Funds shall be disbursed in accordance with the normal
construction loan practices of the depository that require as a minimum that
the
construction consultant, general contractor and architect certify within
ten
(10) days prior to any disbursement substantially the following:
(1)
that
all of the work completed as of the date of such request for disbursement
has
been done in compliance with the approved plans and specifications;
(2)
that
such disbursement request represents monies which either have been paid by
or on
behalf of the construction consultant, the general contractor or the architect
and/or are justly due to contractors, subcon-tractors, materialmen, engineers,
or other persons (whose name and address shall be stated) who have rendered
or
furnished certain services or materials for the work and giving a brief
description of such services and materials and the principal subdivisions
or
categories thereof and the respective amounts paid or due to each of those
persons in respect of such services and stating the progress of the work
up to
the date of the certificate;
(3)
that
the sum then requested to be disbursed plus all sums previously disbursed
do not
exceed the cost of the work insofar as actually accomplished up to the date
of
such certificate;
(4)
that
no part of the cost of the services and materials described in the foregoing
paragraph 8.2A(1) has been or is being made the basis for the disbursement
of
any funds in any previous or then pending application; and
(5)
that
the amount held by the depository, after payment of the amount requested
in the
pending disbursement request, will be sufficient to pay in full the costs
necessary to complete the repair or reconstruction.
29
If
the
cost of repair or reconstruction is less than twenty-five percent (25%) of
the current replacement cost of all the Project improvements, the Board shall
disburse the available funds for the repair and reconstruction under such
procedures as the Board deems appropriate under the circumstances.
The
repair or reconstruction shall commence as soon as reasonably practicable
after
the date of such damage or destruction and shall be completed as quickly
as is
reasonably practicable after commencement of reconstruction, subject to delays
that are beyond the control of the party responsible for making the repairs.
The
Owner of the damaged or destroyed improvement immediately shall take such
steps
as may be reasonably necessary to secure any hazardous condition and to screen
any unsightly views resulting from the damage or destruction.
B. Process
If Repair or Reconstruction Not Undertaken:
If the
improvements are not required to be repaired or reconstructed in accordance
with
the foregoing, all available insurance proceeds shall be disbursed among
the
Owners of the damaged Units and their respective Mortgagees in proportion
to the
respective fair market values of their Condominiums as of the date immediately
preceding the date of damage or destruction as determined by a qualified
independent appraiser selected by the Board, after first applying the proceeds
to the cost of mitigating hazardous conditions on the Project, making provision
for the continuance of public liability insurance to protect the interests
of
the Owners until the Project can be sold, and complying with all other
applicable requirements of governmental agencies. In the event of a failure
to
agree upon an appraiser, the appraiser shall be appointed by the then President
of the Santa Xxxxx County Bar Association.
If
the
failure to repair or reconstruct results in a material alteration of the
use of
the Project from its use immediately preceding the damage or destruction
as
determined by the Board (a material alteration shall be conclusively presumed
if
repair or reconstruction costs exceed twenty-five percent (25%) of the current
replacement cost of all Project improvements), the Project shall be sold
in its
entirety under such terms and conditions as the Board deems appropriate.
If any
Owner or First Lender disputes the Board's determination as to a material
alteration, the dispute shall be submitted to arbitration pursuant to the
rules
of the American Arbitration Association, and the decision of the arbitrator
shall be conclusive and binding on all Owners and their Mortgages.
If
the
Project is sold, the sales proceeds shall be distributed to all Owners and
their
respective Mortgages in proportion to their respective fair market values
of
their Condominiums as of the date immediately preceding the date of damage
or
destruction as determined by the independent appraisal procedure described
above. For the purpose of effecting a sale under this section 8.2, each Owner
grants to the Association an irrevocable power of attorney to sell the entire
Project for the benefit of the Owners, to terminate the Declaration and to
dissolve the Association. In the event the Association fails to take the
necessary steps to sell the entire Project as required under this Article
within
sixty (60) days following the date of a determination by the Board or arbitrator
of a material alteration, or if within one hundred twenty (120) days following
the date of damage or destruction the Board has failed to make a determination
as to a material alteration, any Owner may file a partition action as to
the
entire Project under California Civil Code § 1359, or any successor statute, and
the court shall order partition by sale of the entire Project and distribution
of the sale proceeds as provided in this Declaration.
Notwithstanding
anything in this Declaration to the contrary, any Owner or group of Owners
shall
have a right of first refusal to match the terms and conditions of any offer
made to the Association in the event of a sale of the Project under this
section
8.2B, provided this right is exercised within ten (10) days of receipt by
the
Owners of a notice from the Association containing the terms and conditions
of
any offer it has received. If the Owner or group of Owners subsequently default
on their offer to purchase, they shall be liable to the other Owners and
their
respective Mortgagees for any damages resulting from the default. If more
than
one (1) Owner or group elects to exercise this right, the Board shall accept
the
offer that in its determination is the best offer.
8.3. Condemnation: The
Association shall represent the Owners in any condemnation proceedings or
in
negotiations, settlements and agreements with the condemning authority for
acquisition of the Common Area(s), or part of the Common Area(s). In the
event
of a taking or acquisition of part or all of the Common Area(s) by a condemning
authority, the award or proceeds of settlement shall be payable to the
Association, or any trustee appointed by the Association, for the use and
benefit of the Owners and their Mortgagees as their interests may appear.
In the
event of an award for the taking of any Condominium in the Project by eminent
domain, the Owner of such Condominium shall be entitled to receive the award
for
such taking and, after acceptance of the award, he and his Mortgagee shall
be
divested of all interest in the Project if such Owner shall vacate his
Condominium as a result of such taking. The remaining Owners shall decide
by
majority vote whether to rebuild or repair the Project, or take other action.
The remaining portion of the Project shall be resurveyed, if necessary, and
the
Declaration shall be amended to reflect such taking and to readjust
proportionately the percentages of undivided interest of the remaining Owners
in
the Project. In the event of a taking by eminent domain of any part of the
Common Area, the Association shall participate in the negotiations, and shall
propose the method of division of the proceeds of condemnation, where
Condominiums are not valued separately by the condemning authority or by
the
court. Proceeds of condemna-tion shall be distributed among Owners of
Condominiums and their respective Mortgagees according to the relative values
of
the Condominiums affected by the condemnation, said values to be determined
by
the method provided in section 8.2.
30
If
there
is a substantial taking of the Project (more than fifty percent (50%)), the
Owners may terminate the legal status of the Project and, if necessary, bring
a
partition action under California Civil Code § 1359 or any successor statute, on
the election to terminate by fifty-one percent (51%) of the total voting
power
of the Association and the approval of Eligible Mortgage Holders holding
Mortgages on Condominiums which have at least fifty-one percent (51%) of
the
votes of Condominiums subject to Eligible Mortgages. The proceeds from the
partition sale shall be distributed to the Owners and their respective
Mortgagees in proportion to the fair market values of their Condominiums
as
determined under the method described in section 8.2.
ARTICLE
9. GENERAL
PROVISIONS
9.1. Enforcement: The
Association, or any Owner, shall have the right to enforce, by any proceeding
at
law or in equity, all restrictions, conditions, covenants, reservations,
liens,
and charges now or hereafter imposed by the provisions of this Declaration,
the
Articles and the Bylaws, and in such action shall be entitled to recover
reasonable attorneys' fees as are ordered by the Court. The Association has
the
right to record a Notice of Violation against the Condominium of an Owner
who is
not in compliance with the provision of the Condominium Documents. Failure
by
the Association or by any Owner to enforce any covenant or restriction contained
in this Declaration shall in no event be deemed a waiver of the right to
do so
thereafter. The City may enforce the provisions of the Declaration according
to
its terms.
9.2. Invalidity of Any Provision: Should
any provision or portion of this Declaration be declared invalid or in conflict
with any law of the jurisdiction where this Project is situated, the validity
of
all other provisions and portions hereof shall remain unaffected and in full
force and effect.
9.3. Term: The
covenants and restrictions of this Declaration shall run with and bind the
Project, and shall inure to the benefit of and shall be enforceable by the
Association or the Owner of any property subject to this Declaration, their
respective legal representatives, heirs, successors and assigns, for a term
of
thirty (30) years from the date this Declaration is recorded, after which
time
they shall be automatically extended for successive periods of ten (10) years,
unless an instrument in writing, signed by a majority of the then Owners
of the
Condominiums, has been recorded within the year preceding the beginning of
each
successive period of ten (10) years, agreeing to change said covenants and
restrictions in whole or in part, or to terminate the same.
9.4. Amendments: Prior
to
close of escrow on the sale of the first Condominium, Declarant may amend
this
Declaration. After sale of the first Condominium, this Declaration may be
amended only by the affirmative vote (in person or by proxy) or written consent
of Members representing a majority of the total voting power of the Association
and a majority of the affirmative votes or written consent of Members other
than
the Declarant, or where the two (2) class voting structure is still in effect,
a
majority of each class of membership. However, the percentage of voting power
necessary to amend a specific clause shall not be less than the prescribed
percentage of affirmative votes required for action to be taken under that
clause. Any amendment must be certified in a writing executed and acknowledged
by the President or Vice President of the Association and recorded in the
Recorder's Office of the County. Notwithstanding anything in this Declaration
to
the contrary, any amendment to the Condominium Plan shall satisfy the
requirements of California Civil Code § 1351(e) or any successor
statute.
A.
Amendments Regarding Initiation of Construction Defect Claims:
Notwithstanding
anything to the contrary contained in this Declaration, this section
9.4 and
section 9.14 of this Declaration shall not be amended without the vote or
approval by written ballot of at least (a) ninety percent (90%) of the voting
power of the Members of the Association other than Declarant, and (b) at
least
ninety percent (90%) of the First Lenders.
B. Amendments
to the Rights of Commercial Unit Owners: Notwithstanding
the foregoing, no amendment of section 7.2, nor any additional restrictions
on
the use of a Unit by a Commercial Unit Owner shall be effective unless such
amendment is approved by a majority of the Owners of Commercial
Units.
C. Amendments
as to Rights of Residential Unit Owners: Notwithstanding
the foregoing, no amendment of section 7.1 of this Declaration, nor any
additional restrictions on the use of a Unit by an Owner of a Residential
Unit,
shall be effective unless such amendment is approved by a majority of the
Owners
of Residential Owners.
D. Amendments
Requiring City Approval: No
amendment concerning the maintenance obligations of the Association for the
Xxxxx Street Frontage as set forth in section 5.1A shall be effective without
the express written consent of the City Engineer.
31
9.5. Encroachment Rights: If
any
portion of the Common Area encroaches on any Unit or any part of a Unit,
or any
portion of a Unit encroaches on any Common Area due to engineering errors,
errors or adjustments in original construction, reconstruction, repair,
settlement, shifting, or movement of the building, or any other cause, the
owner
of the encroachment shall have the right to maintain, repair or replace the
encroachment, as long as it exists, and the rights and obligations of Owners
shall not be altered in any way by that encroachment, settlement or shifting;
provided, however, that no right shall be created in favor of an Owner or
Owners
if that encroachment occurred due to the intentional conduct of such Owner
or
Owners other than adjustments by Declarant in the original construction.
In the
event a structure is partially or totally destroyed, and then repaired or
rebuilt, the Owners agree that minor encroachments over adjoining Condominiums
or Common Area shall be permitted and that there shall be appropriate rights
for
the maintenance of those encroachments so long as they shall exist. In the
event
that an error in engineering, design or construction results in an encroachment
of a Building into the Common Area, or into or onto an adjoining lot, or
into a
required setback area, a correcting modification may be made in the subdivision
map and/or Condominium Plan. Such modification may be in the form of a
certificate of correction and shall be executed by Declarant (so long as
Declarant is the sole Owner of the Project) and by Declarant's engineer (in
the
case of a Condominium Plan) and, in addition, by the city engineer (in the
case
of a subdivision map or parcel map). If the correction occurs after title
to the
Common Area has been conveyed to the Association, the Association shall also
execute the certificate of correction. The Board of Directors may, by vote
or
written approval of a majority of the directors, authorize the execution
of the
certificate of correction. The
modification may also be made by lot line adjustment, if more
appropriate.
9.6. Rights of First Lenders: No
breach
of any of the covenants, conditions and restrictions contained in this
Declaration, nor the enforcement of any of its lien provisions, shall render
invalid the lien of any First Lender on any Condominium made in good faith
and
for value, but all of those covenants, conditions and restrictions shall
be
binding upon and effective against any Owner whose title is derived through
Foreclosure or trustee's sale, or otherwise. Notwithstanding any provision
in
the Condominium Documents to the contrary, First Lenders shall have the
following rights:
A. Copies
of Condominium Documents: The
Association shall make available to Condominium Owners and First Lenders,
and to
holders, insurers or guarantors of any First Mortgage, current copies of
the
Declaration, Bylaws, Articles or other Rules concerning the Project and the
books, records and financial statements of the Association. "Available" means
available for inspection, upon request, during normal business hours or under
other reasonable circumstances. The Board may impose a fee for providing
the
requested documents which may not exceed the reasonable cost to prepare and
reproduce them.
B. Audited Statement:
Any
holder of a First Mortgage shall be entitled, upon written request, to have
an
audited financial statement for the immediately preceding fiscal year prepared
at its expense if one is not otherwise available. Such statement shall be
furnished within one hundred twenty (120) days of the Association's fiscal
year-end.
C. Notice of Action:
Upon
written request to the Association, identifying the name and address of the
Eligible Mortgage Holder or Eligible Insurer or Guarantor, and the Condominium
number or address, such Eligible Mortgage Holder or Eligible Insurer or
Guarantor will be entitled to timely written notice of:
(1)
any
condemnation loss or any casualty loss which affects a material portion of
the
Project or any Condominium on which there is a First Mortgage held, insured,
or
guaranteed by such Eligible Mortgage Holder or Eligible Insurer or Guarantor,
as
applicable;
(2)
any
default in performance of obligations under the Condominium Documents or
delinquency in the payment of Assessments or charges owed by an Owner of
a
Condominium subject to a First Mortgage held, insured or guaranteed by such
Eligible Mortgage Holder or Eligible Insurer or Guarantor, which remains
uncured
for a period of sixty (60) days;
(3)
any
lapse, cancellation or material modifi-cation of any insurance policy or
fidelity bond maintained by the Association;
(4)
any
proposed action which would require the consent of a specified percentage
of
Eligible Mortgage Holders as specified in section 9.6.D.
The
Association shall discharge its obligation to notify Eligible Mortgage Holders
or Eligible Insurers or Guarantors by sending written notices required by
this
Declaration to such parties, at the address given on the current request
for
notice, in the manner prescribed by section 9.10.
32
|
|
D.
|
Consent to Action:
|
(1)
Except as provided by statute or by other provision of the Condominium Documents
in case of substantial destruction or condemnation of the Project, and further
excepting any reallocation of interests in the Common Area(s) which might
occur
pursuant to any plan of expansion or phased development contained in the
original Condominium Documents:
(a)
the
consent of Owners of Condominiums to which at least sixty-seven percent (67%)
of
the votes in the Association are allocated and the approval of Eligible Mortgage
Holders holding Mortgages on Condominiums which have at least fifty-one percent
(51%) of the votes of Condominiums subject to Eligible Mortgages, shall be
required to terminate the legal status of the Project as a Condominium Project;
provided, however, that if termination is for reasons other than substantial
destruction or condemnation, the agreement of Eligible Mortgage Holders
representing at least sixty-seven percent (67%) of the votes of the
mortgaged Unit is required;
(b)
the
consent of Owners of Condominiums to which at least sixty-seven percent (67%)
of
the votes in the Association are allocated and the approval of Eligible Mortgage
Holders holding Mortgages on Units which have at least fifty-one percent
(51%)
of the votes of the Condominiums subject to Eligible Mortgages, shall be
required to add or amend any material provisions of the Condominium Documents
which establish, provide for, govern or regulate any of the following:
(i) voting rights; (ii) increases in Assessments that raise the
previously assessed amount by more than twenty-five percent (25%),
Assessment Liens, or the priority of Assessment Liens; (iii) reductions in
reserves for maintenance, repair, and replacement of Common Areas;
(iv) responsibility for maintenance and repairs; (v) reallocation of
interests in the general or Exclusive Use Common Areas, or rights to their
use;
(vi) convertibility of Units into Common Areas or vice versa;
(vii) expansion or contraction of the Project, or the addition, Annexation,
or withdrawal of property to or from the Project; (viii) hazard or fidelity
insurance requirements; (ix) imposition or any restrictions on the leasing
of Units; (x) imposition of any restrictions on an Owner's right to sell or
transfer his Unit; (xi) restoration or repair of the Project (after damage
or partial condemnation) in a manner other than that specified in the
Condominium Documents; or (xii) any provisions that expressly benefit
Mortgage holders, insurers, or guarantors;
(c)
an
Eligible Mortgage Holder who receives a written request to approve additions
or
amendments without delivering or posting to the requesting party a negative
response within thirty (30) days after the notice of the proposed addition
or
amendment shall be deemed to have approved such request, provided the notice
has
been delivered to the mortgage holder by certified or registered mail, return
receipt requested.
(2)
except as provided by statute in case of condem-nation or substantial loss
to
the Condominiums and/or common elements of the Project, unless the holder(s)
of
at least two-thirds (2/3) of the First Mortgages (based upon one (1) vote
for
each First Mortgage owned), or Owners of the individual Condominiums have
given
their prior written approval, the Association and/or the Owners shall not
be
entitled to:
(a)
by
act or omission, seek to abandon or terminate the Condominium Project (except
for abandonment or termination pro-vided by law in the case of substantial
destruction by fire or other casualty or in the case of a taking by condemnation
or eminent domain);
(b)
change the pro rata interest or obligations of any individual Condominium
for
the purpose of: (i) levying Assessments or charges or allocating
distributions of hazard insurance proceeds or condemnation awards; or
(ii) determining the pro rata share of ownership of each Condominium in the
Common Area, provided that no Owner's undivided interest in the Common Area
may
be changed without the consent of that Owner;
(c)
partition or subdivide any Condominium;
(d)
by
act or omission, seek to abandon, partition, subdivide, encumber, sell or
transfer the Common Area. (The granting of easements for public utilities
or for
other public purposes consistent with the intended use of the Common Area
by the
Condominium Project shall not be deemed a transfer within the meaning of
this
clause);
(e)
use
hazard insurance proceeds for losses to any of the Project (whether to Units
or
to Common Area) for other than the repair, replacement or reconstruction
of such
Project.
33
E. Right of First Refusal:
The
Condominium Documents contain no provisions creating a "right of first refusal,"
but should any such rights be created in the future, any such rights shall
not
impair the rights of any First Lender to: (1) foreclose or take title to a
Condominium pursuant to the remedies provided in the Mortgage, or
(2) accept a deed (or assignment) in lieu of foreclosure in the event of a
default by a Mortgagor, or (3) sell or lease a Condominium acquired by the
Mortgagee.
F. Contracts:
Any
agreement for professional management of the Project, or lease or any other
contract providing for services of the developer, sponsor, or builder, may
not
exceed one (1) year. Any agreement, contract, or lease, including a management
contract entered into prior to passage of control of the Board of Directors
of
the Association to Unit purchasers, must provide for termination by either
party
for cause on thirty (30) days' written notice, or without cause and without
payment of a termination fee or penalty on ninety (90) days' or less written
notice.
G. Reserves:
Condominium
dues or charges shall include an adequate reserve fund for maintenance, repairs,
and replacement of those improvements which the Association is obligated
to
maintain and that must be replaced on a periodic basis, and shall be payable
in
regular installments of Regular Assessments, rather than by Special
Assessments.
H. Priority of Liens:
Any
Assessment Lien created under the provisions of this Declaration is expressly
made subject and subordinate to the lien and encumbrance of any First Mortgage
that encumbers all or any portion of the Project, or any Unit. Each First
Lender
who comes into possession of the Condominium by virtue of Foreclosure of
the
Mortgage, or any purchaser at a Foreclosure, will take the Condominium free
of
any claims for unpaid Assessments and fees, late charges, fines or interest
levied in connection with such claims, against the Condominium which accrue
prior to the time such First Lender or purchaser at a Foreclosure takes title
to
the Condominium, except for claims for a pro rata share of such Assessments
or
charges to all Condominiums including the mortgaged Condominium, and except
for
Assessment Liens as to which a Notice of Delinquent Assessment has been recorded
prior to the Mortgage.
I. Distribution
of Insurance or Condemnation Proceeds: No
provision of the Condominium Documents gives an Owner, or any other party,
priority over any rights of First Lenders in the case of a distribution to
Owners of insurance proceeds or condemnation awards for losses to or taking
of
Condominiums and/or Common Area.
J. Termination
of Professional Management: When
professional manage-ment has been previously required by the Condominium
Documents or by any Eligible Mortgage Holder or Eligible Insurer or Guarantor,
whether such entity became an Eligible Mortgage Holder or Eligible Insurer
or
Guarantor at that time or later, any decision to establish self management
by
the Association shall require the prior consent of Owners of Condominiums
to
which at least sixty-seven percent (67%) of the votes in the Association
are
allocated and the approval of Eligible Mortgage Holders holding Mortgages
on
Condominiums which have at least fifty-one percent (51%) of the votes of
Condominiums subject to Eligible Mortgages.
K. Status
of Loan to Facilitate Resale:
Any
First Mortgage given to secure a loan to facilitate the resale of a Condominium
after acquisition by Foreclosure or by a deed in lieu of Foreclosure or by
an
assignment in lieu of Foreclosure, shall be deemed to be a loan made in good
faith and for value and entitled to all of the rights and protections of
Mortgages under this Declaration.
L. Right
to Appear at Meetings:
Any
Eligible Mortgage Holder may appear (but cannot vote) at meetings of Owners
and
the Board to draw attention to violations of this Declaration that have not
been
corrected or that have been made the subject of remedial proceedings or
Assessments.
9.7. Limitation
of Restrictions on Declarant: Declarant
is undertaking the work of developing and marketing the Condominiums and
incidental improve-ments upon the subject Project. The completion of that
work
and the sale, rental, and other disposal of those Condominiums is essential
to
the establishment and welfare of the Project as a mixed use residential and
commercial project. In order that the work may be completed and the Project
be
established as a fully occupied mixed-use project as rapidly as possible,
nothing in this Declaration shall be understood or construed to:
A. Prevent
Declarant, its contractors, or subcontractors from doing on the Project or
any
Condominium whatever is reasonably necessary or advisable in connection with
the
completion of the work; or
B. Prevent
Declarant or its representatives from erecting, constructing and maintaining
on
the Project (except upon Units owned by others), such structures as may be
reasonable and necessary for the conduct of its business of completing the
work
and establishing said Project as a mixed-use community and disposing of the
Project in parcels by sale, lease or otherwise; or
34
C. Prevent
Declarant from conducting on Project (except upon Units owned by others)
its
business of completing the work and of establishing a plan of Condominium
ownership and of disposing of said Project in Condominiums by sale, lease
or
otherwise (including use of one (1) or more Units as a sales office)
D. Prevent
Declarant from maintaining or displaying such sign(s), pennants and flag(s)
on
the Project (except upon Units owned by others) as may be necessary for the
sale, lease or disposition thereof; or
E. Subject
Declarant to the architectural control provisions of section 7.13 for the
construction of any Condominium or other improvement on the
Project.
The
foregoing rights of Declarant shall terminate upon sale of Declarant's entire
interest in the Project.
So
long
as Declarant, its successors and assigns, owns one (1) or more of the
Condominiums established and described in this Declaration, Declarant, and
its
successors and assigns, shall be subject to the provisions of this Declaration.
Declarant shall make reasonable efforts to avoid disturbing the use and
enjoyment of Units (and the Common Area) by Owners, while completing any
work
necessary to those Units or Common Area.
9.8. Termination
of any Responsibility of Declarant: In
the
event Declarant shall convey all of its right, title and interest in and
to the
Project to any Declarant, then and in such event, Declarant shall be relieved
of
the performance of any further duties or obligations under this Declaration
arising after such conveyance, and such successor Declarant, shall thereafter
be
obligated to perform all such duties and obligations of the Declarant.
9.9. Owners' Compliance: Each
Owner, tenant or occupant of a Condominium shall comply with the provisions
of
this Declaration, and (to the extent they are not in conflict with the
Declaration) the Articles and Bylaws, the decisions and resolutions of the
Association or the Board, as lawfully amended from time to time. Failure
to
comply with any such decisions, or resolutions shall be grounds for an action
(1) to recover sums due, (2) for damages, (3) for injunctive
relief, (4) for costs and attorneys’ fees, or (5) any combination of
the foregoing.
All
agreements and determinations lawfully made by the Association in accordance
with the voting percentages established in this Declaration or in the Articles
or the Bylaws, shall be deemed to be binding on all Owners, their successors
and
assigns.
9.10. Notice: Any
notice permitted or required by the Declaration, Articles or Bylaws may be
delivered either personally or by mail. If delivery is by mail, it shall
be
deemed to have been delivered seventy-two (72) hours after a copy of the
same
has been deposited in the United States mail, first class or registered,
postage
prepaid, addressed to the person to be notified at the current address given
by
such person to the Secretary of the Board or addressed to the Unit of such
person if no address has been given to the Secretary.
9.11. Special
Provisions Relating to Enforcement of Declarant's Obligation to Complete
Common
Area Improvements: Where
the
Project includes Common Area improvements which have not been completed prior
to
the close of escrow on the sale of the first Condominium, and where the
Association is obligee under a bond or other arrangement (hereafter "Bond")
to
secure performance of the commitment of Declarant to complete said improvements,
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 improvement
for
which a notice of completion has not been filed within sixty (60) days after
the
completion date specified for those improvements in the planned construction
statement appended to the Bond. If the Association has given an extension
in
writing for the completion of any Common Area improvement, the Board shall
consider and vote on the aforesaid question if a notice of completion has
not
been filed within thirty (30) days after the expiration of the extension.
A
special meeting of Members of the Association for the purpose of: (i) voting
to
override a decision by the Board not to initiate action to enforce the
obligations under the Bond; or (ii) to consider the failure of the Board
to
consider and vote on the question shall be held not less than thirty-five
(35)
days nor more than forty-five (45) days after receipt by the Board of a petition
for such a meeting signed by Members representing five percent (5%) or more
of
the total voting power of the Association. At such special meeting a vote
of a
majority of Members of the Association other than the Declarant shall be
required to take action to enforce the obligations under the Bond and a vote
of
a majority of the voting power of the Association, excluding Declarant, shall
be
deemed to be the decision of the Association, and the Board shall thereafter
implement this decision by initiating and pursuing appropriate action in
the
name of the Association.
35
On
satisfaction of the Declarant's obligation to complete the Common Area
improvements, the Association shall acknowledge in writing that it approves
the
release of the Bond and shall execute any other documents as may be necessary
to
effect the release of the Bond. The Association shall not condition its approval
of the release of the Bond on the satisfaction of any condition other than
the
completion of the Common Area improvements as described on the planned
construction statement. Any dispute between the Declarant and the Association
regarding the question of satisfaction of the Conditions for exoneration
or
release of the security shall, at the request of either party, be submitted
to
arbitration pursuant to section 9.14 of this Declaration.
9.12. Special
Provisions Relating to Enforcement of Declarant's Obligation to Pay
Assessments: Where
the
Association is obligee under a Bond or other arrangement (hereafter "Bond")
to
secure performance of the commitment of Declarant to pay Assessments on Units
owned by Declarant, 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
of Declarant's Assessments which are delinquent for thirty (30) days. A
special meeting of Members of the Association for the purpose of voting to
override a decision by the Board not to initiate action to enforce the
obligations under the Bond or such a meeting to consider the failure of the
Board to consider and vote on the question shall be held not less than
ten (10) days nor more than twenty (20) days after receipt by the
Board of a petition for such a meeting signed by Members representing five
percent (5%) or more of the total voting power of the Association. At such
special meeting a vote of a majority of Members of the Association other
than
the Declarant shall be required to take action to enforce the obligations
under
the Bond and a vote of a majority of the voting power of the Association,
excluding Declarant, shall be deemed to be the decision of the Association,
and
the Board shall thereafter implement this decision by initiating and pursuing
appropriate action in the name of the Association.
Upon
satisfaction of the Declarant's obligation to assure the availability of
funds
to pay Assessments upon unsold Units as set forth in Title 10 Cal Code of
Regs § 2792.9, the escrow holder holding the Bond shall return the Bond to
Declarant, after delivery to said escrow holder of Declarant's written request
for release of the Bond, and Declarant's written statement that [1] Declarant
has paid, as and when due, all regular and special Assessments levied by
the
Association against Units owned by the Declarant and that [2] 80% of the
Units
in the Project have been conveyed by Declarant, unless pursuant to Title
10 Cal
Code of Regs § 2792.9, the Association delivers to said escrow holder its
written objection to the return of the Bond to Declarant within forty (40)
days
after delivery of notice of Declarant's request from release and the statement
to the Association. The Association shall not condition its approval of the
release of the Bond on the satisfaction of any condition other than the payment
of Assessments.
If
the
Association delivers to the escrow holder of the Bond a demand for remittance
of
the Bond or a portion thereof, or the proceeds thereof to the escrow holder
of
the Bond, which demand is accompanied by a written statement signed by an
officer of the Association that the Declarant is delinquent in the payment
of
Regular or Special Assessments which have been levied by the Association
against
Units owned by the Declarant, then all or some specified portion of the security
as demanded shall be remitted to the Association upon the Declarant's failure
to
give the escrow holder within forty (40) days after receipt of delivery of
the
demand by the escrow holder, the subdivider's written objection to remittance
of
the security. Both the Declarant and the Association shall adhere and comply
with the terms of escrow instructions with the escrow depository of the Bond,
which shall be in the form approved by the Department of Real Estate, with
respect to the holding of the Bond, the return or remittance of the Bond
and
other disposition of matters set forth in said escrow instructions with respect
to the Bond. Any dispute between the Declarant and the Association regarding
the
question of satisfaction of the conditions for exoneration or release of
the
security shall, at the request of either party, be submitted to Arbitration
as
provided in section 9.14E hereof.
9.13. Fair Housing. No
Owner
shall, either directly or indirectly, forbid or restrict the conveyance,
encumbrance, leasing, or mortgaging, or occupancy of a Residential or Commercial
Unit to any person of a specified race, sex, sexual orientation, age, marital
status, color, religion, ancestry, physical handicap, or national
origin.
9.14. Dispute
Resolution: The
Board
is authorized to resolve any civil claim or action through alternative dispute
resolution proceedings such as mediation, binding arbitration, or non-binding
arbitration proceedings.
A. Claims
for Declaratory Relief or Enforcement of Project Documents:
Unless
the applicable time limitation for commencing the action would run within
120
days, prior to the filing of a civil action solely for declaratory relief
or
injunctive relief to enforce the Project Documents, or for declaratory relief
or
injunctive relief to enforce the Project Documents in conjunction with a
claim
for monetary damages not in excess of Five Thousand Dollars ($5,000), the
Board,
or any Owner who seeks such relief, shall first endeavor to submit the matter
to
alternative dispute resolution in compliance with the provisions of California
Civil Code Section 1354(b). The Board shall comply with the requirements
of
California Civil Code Section 1354(i) by providing Members of the
Association annually with a summary of the provisions of California Civil
Code
Section 1354, including the following language: "Failure by any Member of
the
Association to comply with the pre-filing requirements of Section 1354 of
the
Civil Code may result in the loss of your rights to xxx the Association or
another Member of the Association regarding enforcement of the governing
documents."
36
B. Design
or Construction Defect Claims: Actions
by the Association pertaining to or based upon a claim for defects in the
design
or construction of improvements within the Project against the Declarant,
or any
architect, engineer or other consultant, or any contractor, subcontractor
or
materials supplier engaged by or on behalf of Declarant for the design and/or
construction of the Project, or any element thereof, or otherwise defined
in
Civil Code sections 896 or 897 as an Actionable Defect ("Claim"), shall be
resolved and administered in accordance with Civil Code sections 895 through
945.5, and Civil Code sections 1375 and 1375.05, as such sections may be
amended, revised or superseded, from time to time.
(1)
If a
Claim is subject to pre-litigation procedures in Civil Code sections 910
through
938, or any successor statutes, each Owner, and the Declarant, prior to filing
any civil action, arbitration or action in judicial reference regarding such
Claim shall comply with the prelitigation procedures of Civil Code sections
910
through 938. Notices of Claims shall specify all of the matters as set forth
in
Civil Code section 1368.4 and/or Civil Code sections 910 through 938, as
applicable, and any successor statutes or laws.
(2) The
Association and not the individual Members shall have the power to pursue
any
Claims for alleged construction defects in the Common Area or other improvements
or property within the Project that the Association is obligated to maintain
or
repair under this Declaration. Any
recovery by the Association with respect to any damage to or defect in the
Common Area or other improvements or property within the Project that the
Association is obligated to maintain or repair under this
Declaration shall
be
utilized solely for the purpose of paying for the costs of obtaining the
recovery and for correcting such damage or defect.
(3)
If the
Claim is not resolved by and pursuant to the prelitigation procedures of
under
Civil Code sections 910 through 9386, subject to the provisions of Civil
Code
section 1375 and 1375.05, then notwithstanding the provisions of California
Code
of Civil Procedure Section 1298.7, the Claim shall be resolved in accordance
with the provisions of section 9.14.D of this Declaration [Judicial Reference],
and section 9.14.E of this Declaration [Arbitration of Disputes].
C. Notices
to Members of Legal Proceedings Against Declarant.
In
accordance with Civil Code Section 1368.4, at least 30 days prior to filing
any
civil action, including arbitration, against Declarant or other developer
of the
Project for alleged damage to (i) the Common Area, (ii) all or
portions of Units which the Association is required to maintain, or
(iii) the Units which arises from or is integrally related to alleged
damage to the Common Area or all or portions of the Units which the Association
is required to maintain, the Board shall provide written notice to each Member
specifying each of the following:
(1)
That a
meeting will take place to discuss problems that may lead to the filing of
a
civil action;
(2)
The
options, including civil actions, that are available to address the problems;
and
(3)
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.
D. Judicial
Reference for Certain Disputes: For
any
action by the Association or any Owner against the Declarant, any architect,
engineer or other consultant, or any contractor, subcontractor or materials
supplier engaged by or on behalf of Declarant for the design and/or construction
of the Project, or any element thereof (“Developer Parties”), subject to the
provisions of Civil Code sections 895 through 938, Civil Code section 1375
and
Civil Code section 1375.05, or any other action by the Association or any
Owner
against the Declarant, except as otherwise provided herein, such claim shall
be
submitted to Judicial Reference as hereinafter provided:
(1)
The
dispute shall be submitted to binding general judicial reference pursuant
to
California Code of Civil Procedure Sections 638(1) through 645.1, or any
successor statutes thereto pertaining to proceedings under judicial reference
("Judicial Reference"). The parties shall cooperate in good faith to ensure
that
all necessary and appropriate parties are included in the Judicial Reference
proceeding. Declarant shall not be required to participate in the Judicial
Reference proceeding unless it is satisfied that all necessary and appropriate
parties will participate. The parties shall share the fees and costs of the
Referee for the Judicial Reference proceeding as determined by the Referee.
37
(2)
The
Referee shall have the authority to try all issues, whether of fact or law,
and
to report a statement of decision to the court. The parties shall use the
procedures adopted by Judicial Arbitration and Mediation Services (“JAMS”) for
judicial reference (or any other entity offering judicial reference dispute
resolution procedures as may be mutually acceptable to the parties), provided
that the following rules and procedures shall apply in all cases unless the
parties agree otherwise:
(a)
If
the Declarant is a party to the Judicial Reference, then any fee to initiate
the
Judicial Reference shall be paid by Declarant, provided however, that the
cost
of the judicial reference shall ultimately be borne as determined by the
Referee;
(b)
The
proceedings shall be heard in the County;
(c)
The
Referee must be a neutral and disinterested party who is a retired judge
or a
licensed attorney with at least ten (10) years’ experience in relevant real
estate matters;
(d)
Any
dispute regarding the selection of the Referee shall be resolved by JAMS
or the
entity providing the reference services, or, if no entity is involved, by
the
court with appropriate jurisdiction;
(e)
The
Referee may require one or more pre-hearing conferences;
(f)
The
parties shall be entitled to discovery, and the Referee shall oversee discovery
and may enforce all discovery orders in the same manner as any trial court
judge;
(g)
A
stenographic record of the Judicial Reference proceedings shall be made,
provided that the record shall remain confidential except as may be necessary
for post-hearing motions and any appeals;
(h)
The
Referee’s statement of decision shall contain findings of fact and conclusions
of law to the extent applicable;
(i)
The
Referee shall have the authority to rule on all post-hearing motions in the
same
manner as a trial judge;
(j)
The
Referee shall be authorized to provide all recognized remedies available
in law
or equity for any cause of action that is the basis of the Judicial Reference;
and
(k)
The
statement of decision of the Referee upon all of the issues considered by
the
Referee shall be binding upon the parties, and upon filing of the statement
of
decision with the clerk of the court, or with the judge where there is no
clerk,
judgment may be entered thereon. The decision of the Referee shall be appealable
as if rendered by the court.
(l)
If
submission of a disputed matter referenced in this section 9.14.D to Judicial
Reference is not permitted under the then applicable law, then notwithstanding
California Code of Civil Procedure Section 1298.7, if the dispute is not
resolved through mediation, each Owner, the Association and Declarant shall
resolve such dispute exclusively through binding arbitration pursuant to
section
9.14.E of this Declaration.
(3)
Judicial Reference shall only proceed for any matter that is subject to the
requirements of California Civil Code section 1354 after the parties have
attempted to reasonably comply with the alternative dispute resolution
requirements set forth in California Civil Code section 1354, as same may
be
amended from time to time.
(4)
Notwithstanding the foregoing, any dispute under sections 9.11 and 9.12 of
this
Declaration between the Declarant and the Association regarding the question
of
satisfaction of the conditions for exoneration or release of the security
shall,
at the request of either party, be submitted to arbitration pursuant to section
9.14.E of
this
Declaration.
38
E. Arbitration
of Disputes: If
a
dispute is the subject of binding arbitration under this Declaration, the
following shall apply:
(1)
costs
and fees of the arbitration, including ongoing costs and fees of the arbitration
shall be paid as agreed by the parties, and, if the parties cannot agree,
as
determined by the arbitrator; provided, however, if the Declarant is a party
to
the arbitration, then any fee to initiate arbitration shall be paid by
Declarant, but the cost of arbitration shall ultimately be borne as determined
by the arbitrator;
(2)
a
neutral and impartial individual shall be appointed to serve as arbitrator,
with
the arbitrator to be selected by mutual agreement of the parties. If the
parties
are unable to agree on an arbitrator within fifteen (15) days after any party
initiates the arbitration, a neutral and impartial arbitrator shall be selected
by the JAMS. In selecting the arbitrator, the provisions of §1297.121 of the
Code of Civil Procedure shall apply. An arbitrator may be challenged for
any of
the grounds listed in §1297.121, or in §1297.124 of the Code of Civil
Procedure;
(3)
venue
of the arbitration to be in the County;
(4)
the
arbitration shall commence in a prompt and timely manner in accordance with
(i)
the Commercial Rules of the JAMS, or if the rules do not specify a date by
which
arbitration is to commence, then (ii) by a date agreed upon by the parties,
and
if they cannot agree as to a commencement date, (iii) a date determined by
the
arbitrator. The arbitrator shall apply California substantive law in rendering
a
final decision. The arbitrator shall have the power to grant all legal and
equitable remedies and award compensatory damages. When the arbitrator is
prepared to make the award, the arbitrator shall first so inform the parties,
who shall have ten (10) days to attempt to resolve the matter by a binding
agreement between them. If the parties resolve the matter, the arbitrator
shall
not make any award. If the parties do not so resolve the matter within the
ten
(10) day period, the arbitrator shall make the award on the eleventh day
following the arbitrator's notice of being prepared to make the
award;
(5)
the
arbitration shall be conducted in accordance with the Commercial Rules of
the
JAMS;
(6)
the
arbitration shall be conducted and concluded in a prompt and timely
manner;
(7)
the
arbitrator shall be authorized to provide all recognized remedies available
in
law or equity for any cause of action that is the basis of
arbitration;
(8)
A
judgment upon the award rendered by the arbitrator may be entered in any
court
having jurisdiction or application may be made to such court for judicial
acceptance of the award and an order of enforcement. The parties agree to
be
bound by the decision of the arbitrator, which shall be final and
non-appealable.
(9)
Preliminary Procedures. If state or federal law requires an Owner, the
Association or Declarant to take steps or procedures before commencing an
action
in arbitration, then the Owner, the Association or Declarant must take such
steps or follow such procedures, as the case may be, before commencing the
arbitration. For example, any claim or Disputes pursuant to California Civil
Code Section 895 et seq., as hereafter amended may be subject to the
non-adversarial procedures set forth in California Civil Code Section 910
through 938, prior to the initiation of any arbitration. In addition, nothing
contained herein shall be deemed a waiver or limitation of the provisions
of
California Civil Code Sections 1368.4, 1375, 1375.05 or
1375.1;
(10)
Participation by Other Parties. An Owner, the Association and Declarant,
to such
extent any such party is defending a claim in the arbitration, may, if it
chooses, have all necessary and appropriate parties included as parties to
the
arbitration;
(11)
Federal Arbitration Act. Because many of the materials and products incorporated
into the home are manufactured in other states, the development and conveyance
of the Property evidences a transaction involving interstate commerce and
the
Federal Arbitration Act (9 U.S.C. §1 et seq.) now in effect and as it may be
hereafter amended will govern the interpretation and enforcement of the
arbitration provisions set forth herein;
39
(12)
ARBITRATION
OF DISPUTES. BY EXECUTING THIS DECLARATION, DECLARANT, AND BY ACCEPTING A
DEED
TO ANY PORTION OF THE PROPERTY, EACH OWNER AND THE ASSOCIATION, SHALL BE
DEEMED
TO HAVE AGREED TO HAVE ANY DISPUTE DECIDED BY NEUTRAL ARBITRATION IN ACCORDANCE
WITH THE FEDERAL ARBITRATION ACT AND THE CALIFORNIA ARBITRATION ACT, TO THE
EXTENT THE CALIFORNIA ARBITRATION ACT IS CONSISTENT WITH THE FEDERAL ARBITRATION
ACT, AND DECLARANT, THE ASSOCIATION AND EACH OWNER ARE GIVING UP ANY RIGHTS
DECLARANT, THE ASSOCIATION AND EACH OWNER MIGHT POSSESS TO HAVE THE DISPUTE
LITIGATED IN A COURT TRIAL. DECLARANT, THE ASSOCIATION AND EACH OWNER ARE
GIVING
UP JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY
INCLUDED IN THIS "ARBITRATION OF DISPUTES" PROVISION. IF DECLARANT, THE
ASSOCIATION OR ANY OWNER REFUSES TO SUBMIT TO ARBITRATION AFTER AGREEING
TO THIS
PROVISION, DECLARANT, THE ASSOCIATION OR SUCH OWNER MAY BE COMPELLED TO
ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE.
9.15. Number;
Gender:
The
singular and plural number and masculine, feminine and neuter gender shall
each
include the other where the context requires.
40
IN
WITNESS WHEREOF,
the
undersigned, being the Declarant herein, has executed this Declaration this
______ day of ____________________, 200___, and hereby certifies that Declarant
consents to the recordation of the Condominium Plan attached hereto as
Exhibit "A" and incorporated herein pursuant to the requirements of
California Civil Code §§ 1350--1372.
XXXXX
STREET PARTNERS, LLC,
a
California limited liability company
By:____________________________
STATE
OF CALIFORNIA )
)
ss.
COUNTY
OF )
On
this
____ day of _______________, 2006, before me, _______________________, a
notary
public for the state, personally appeared _______________________, 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
41
Exhibit
D
Tenant’s
Signage
42
