EditARTICLE 11 GENERAL AND MORTGAGEE PROVISIONS
11.1 Term; Method of Termination. This Declaration shall continue in full force and effect for a term of 20 years from the date this Declaration is Recorded. After which time, this Declaration shall be automatically extended for successive periods of 10 years each. This Declaration may be terminated at any time during the initial term of this Declaration or any extension or renewal term, if such termination is approved by the affirmative vote or written consent, or any combination thereof, of the Owners representing 90% or more of the votes in each class of membership and by the holders of First Mortgages on Lots, the Owners of which have 75% or more of the votes in the Association. If the necessary votes and consents are obtained, the Board shall cause to be Recorded with the County Recorder of the County, a Certificate of Termination, duly signed by the President or Vice President and attested by the Secretary or Assistant Secretary of the Association, with their signatures acknowledged. Thereupon, this Declaration shall have no further force or effect and the Association shall be dissolved pursuant to the provisions set forth in the Articles.
11.2 Amendments. 11.2.1 Except for amendments made pursuant to Section 11.2.2 of this Declaration, and subject to the further limitations of Sections 11.2.3, 11.2.4 and 11.2.6, this Declaration may be amended at any time during the initial term of this Declaration or any renewal or extension term, without regard to whether such amendments are of uniform effect as to the Owners or the Lots, by the written approval or the affirmative vote, or any combination thereof, of the Owners holding more than 67% of the votes in the Association.
11.2.2 Declarant, so long as Declarant owns any Lot, may unilaterally amend this Declaration or the Plat to: (i) correct any error or inconsistency in the Declaration, (ii) conform this Declaration or the Plat to the requirements or guidelines of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, any federal, state or local governmental agency or quasi-governmental agency whose approval of the Project is required by law or requested by the Declarant; or (iii) alter the size of and boundaries between any Lots (including an increase or reduction of the total number of Lots) so long as: (I) all such altered Lots are owned by Declarant, (11) all First Mortgagees then encumbering the Lots to be altered consent in writing, (111) such alterations do not modify or change the size or the boundaries of any other Lot or materially modify the size or boundaries of the Common Area; (IV) such alterations do not result in the removal or abandonment of any common use or recreational facilities shown on the Improvement plans on file with the City; and (V) such alterations do not materially increase the share of Common Expenses payable by Owners.
11.2.3 So long as the Declarant owns any Lot, any amendment to this Declaration must be approved in writing by the Declarant. ARTICLE 10 of this Declaration may not be amended without the consent of Declarant at any time during the initial term of this Declaration; Declarant's interest being deemed coupled with an interest, without regard to whether Declarant owns any Lot at that time; provided, further, however, that if Declarant is deemed by any court of applicable jurisdiction not to have such an interest, then, in no event may ARTICLE 10 of this Declaration be amended without the consent of 100% of the then Owners of Lots.
11.2.4 An amendment to this Declaration may require the prior written approval of the Veterans Administration or the Federal Housing Administration as further provided in Section 11.17 below.
11.2.5 So long as Declarant owns the requisite number of Lots under this Section 11.2 to effect an amendment hereunder, any amendment to this Declaration shall be signed by Declarant and Recorded in the records of the County Recorder of the County. At any time Declarant does not own the requisite number of Lots, any amendment made pursuant to Section 11.2.1 shall be signed by the President or Vice President of the Association and shall be Recorded with the County Recorder of the County, and shall certify that the amendment has been approved by the Board as well as by the requisite number of Owners, if any, as may be required by this Section 11.2. Unless a later effective date is specified in the amendment, any amendment to this Declaration shall be effective upon the Recording of the instrument.
11.2.6 All amendments to Section 7.1.5 of this Declaration or otherwise affecting or amending any provisions which have been required by the City in its stipulations for development of the Project, shall be approved in advance by the City and the consent of an authorized representative of the City shall appear on any such amendment so Recorded.
11.3 Annexation. So long as Declarant owns any Lot, Declarant may from time to time unilaterally annex property to the Project, if such property is located within 200 feet of the then existing border of the Project, and subject such property to this Declaration by Recording a Declaration of Annexation describing the real property being annexed. Any such annexation shall be effective when the Declaration of Annexation is Recorded, or at such later time as may be expressly provided in the Declaration of Annexation.
11.4 Certain Mortgagee Rights. 11.4.1 Any First Mortgagee will, upon written request identifying the name and address of the First Mortgagee for any Lot and the Lot number or address, shall be entitled to receive timely written notice of: (i) all meetings of the Members and be permitted to designate a representative to attend all such meetings; (ii) any condemnation loss or any casualty loss which affects a material portion of the Project or the Lot subject to the First Mortgage; (iii) any delinquency in the payment of Assessments or other charges owed or any other default in the performance of obligations under the Project Documents by the Owner of the Lot subject to the First Mortgage which remains uncured for a period of 60 days; and (iv) any lapse, cancellation or material modification of any insurance policy or fidelity bond maintained by the Association.
11.4.2 No Lot shall be partitioned or subdivided without the prior written approval of the First Mortgagee of any such Lot subject to a First Mortgage.
11.4.3 Unless at least 2/3 of the First Mortgagees (based upon one vote for each First Mortgage owned by the First Mortgagee in the Project) or the Owners (other than Declarant) of at least 213 of the Lots have given their prior written approval, the Association shall not be entitled to: (i) seek to abandon, partition, subdivide, sell or transfer the Common Area owned, directly or indirectly, by the Association. The granting of easements for public utilities or for other public purposes consistent with the intended use of such Common Area shall not be deemed a transfer within the meaning of this Section 11.4.3. (ii) change the method of determining the obligations, Assessments, dues or other charges which may be levied against any Owner. (iii) change, waive or abandon any scheme or regulations, or enforcement thereof, pertaining to the architectural design or the exterior appearance of the Lots or the maintenance of Common Area. (iv) fail to maintain fire and extended insurance coverage on a current replacement cost basis for the Common Area in an amount of at least 100% of insurable value. (v) use hazard insurance proceeds for losses to Project Improvements other than for the repair, replacement or reconstruction of such Project Improvements.
11.4.4 No provision of this Declaration gives or shall be construed as giving any Owner or other Person priority over any rights of a First Mortgagee of a Lot in the case of distribution to such Owner of insurance proceeds or condemnation awards for losses to or taking of the Common Area.
11.4.5 Any First Mortgagee who receives a written request from the Board to respond to or consent to any action requiring the consent of the First Mortgagee shall be deemed to have approved such action if the Association has not received a negative response from such First Mortgagee within 30 days of the date of the Association's request.
11.4.6 No breach of any of the covenants, conditions and restrictions contained in this Declaration, and no enforcement of any lien provisions herein shall render invalid the lien of any First Mortgage, but all of said covenants, conditions and restrictions shall be binding upon and effective against any Owner whose title is derived through foreclosure, trustee's sale or otherwise.
11.4.7 All amenities pertaining to the Project and located thereon (such as parking, recreation and/or service areas) are a part of the Project and shall be covered by and subject to a First Mortgage on a Lot to the same extent as is the Common Area.
11.4.8 An action to abate the breach of any of these covenants, conditions and restrictions may be brought against the First Mortgagee or other Person who has acquired title through foreclosure of a First Mortgage and subsequent sheriff's sale (or through any equivalent proceedings) and the successor in interest to said First Mortgagee or other Person, if the breach continues to exist after the time said First Mortgagee or other Person acquires an interest in such Lot.
11.4.9 During the pendency (including any period of redemption) of any proceedings to foreclose a First Mortgage (or from the time a trustee under a first deed of trust has given notice of sale pursuant to the power of sale conferred under the deed of trust and pursuant to law), the First Mortgagee, or a receiver appointed in any such action, may, but need not, exercise any or all of the rights and privileges of the Owner of the Lot in default, including, but not limited to, the right to vote as a Member of the Association in the place and stead of the defaulting Owner, irrespective of whether the Member's voting rights have been suspended for nonpayment of Assessments.
11.4.10 Notwithstanding anything contained herein to the contrary, at such time as the First Mortgagee shall become record Owner of a Lot, the First Mortgagee shall be subject to all of the terms and conditions of this Declaration, including, but not limited to, the obligations to pay all Assessments and charges accruing thereafter in the same manner as any other Owner.
11.4.11 The right of any Owner to sell, transfer or otherwise convey his Lot shall not be subject to any right of first refusal or any similar restriction in favor of the Association and no such right of first refusal or similar restriction shall be hereinafter imposed by amendment of this Section 11.4.1 1 without the prior written consent of all First Mortgagees of record at the time the requested amendment is proposed.
11.5 Interpretation. Except for judicial construction, the Association shall have the exclusive right to construe and interpret the provisions of this Declaration. In the absence of any adjudication to the contrary by a court of competent jurisdiction, the Association's construction and interpretation of the provisions hereof shall be final, conclusive and binding as to all Persons and property benefited or bound by this Declaration. In the event of any conflict between this Declaration and the Articles, Bylaws, Association Rules or Architectural Rules, this Declaration shall control. In the event of any conflict between the Articles and the Bylaws, the Articles shall control. In the event of any conflict between the Bylaws and the Association Rules or the Architectural Rules, the Bylaws shall control.
11.6 Severability. Any determination by any court of competent jurisdiction that any provision of this Declaration is invalid or unenforceable shall not affect the validity or enforceability of any of the other provisions hereof.
11.7 Rule Against Perpetuities. If any interest, privilege, covenant or right created by this Declaration shall be unlawful, void or voidable for violation of the Rule against Perpetuities or any related rule, then such interest, privilege, covenant or right shall continue until 21 years after the death of the last survivor of the now living descendants of the President of the United States in office on the date this Declaration is Recorded.
11.8 Change of Circumstances. Except as otherwise expressly provided in this Declaration, no change of conditions or circumstances shall operate to extinguish, terminate or modify any of the provisions of this Declaration.
11.9 Notice of Violation. The Association shall have the right, but not the obligation, to record a written notice of a violation ("Notice of Violation") by any Owner or Resident of any restriction or other provision of the Project Documents. The Notice of Violation shall be executed by an officer of the Association and shall contain substantially the following information: (i) the name of the Owner or Resident violating, or responsible for the violation of, the Project Documents; (ii) the legal description of the Lot against which the notice is being Recorded; (iii) a brief description of the nature of the violation; (iv) a statement that the notice is being Recorded by the Association pursuant to this Declaration; (v) a statement of the specific steps which must be taken by the Owner or Resident to cure the violation. Recordation of a Notice of Violation shall serve as notice to the Owner and Resident, and any subsequent Purchaser or other Person who may acquire the Lot, that there is such a violation; provided, further, however, that such Notice of Violation shall not constitute an Assessment Lien unless otherwise expressly permitted by this Declaration or the provisions of Arizona's Planned Communities statutes or other applicable law. If, after the recordation of such Notice, it is determined by the Association that the violation referred to in the Notice does not exist or that the violation referred to in the Notice has been cured, the Association shall record a "Notice of Compliance" upon written request of the Owner of the Lot to which the Notice of Violation pertains. The Notice of Compliance shall state the legal description of the Lot against which the Notice of Violation was Recorded, and the Recording data of the Notice of Violation, and shall state that the violation referred to in the Notice of Violation has been cured or is no longer applicable to the Lot. Failure by the Association to record a Notice of Violation shall not constitute a waiver of any such violation, constitute any evidence that no violation exists with respect to a particular Lot or constitute a waiver of any right of the Association to enforce the Project Documents.
11.10 Laws, Ordinances and Regulations. The covenants, conditions and restrictions set forth in this Declaration and the provisions requiring Owners and other Persons to obtain the approval of the Board or the Architectural Committee, as applicable, with respect to certain actions are independent of the obligation of the Owners and other Persons to comply with all applicable laws, ordinances and regulations. Compliance with this Declaration shall not relieve an Owner or any other Person from the obligation to also comply with all applicable laws, ordinances and regulations. Any violation of any state, municipal or local law, ordinance or regulation pertaining to the ownership, occupation or use of any property within the Project is hereby declared to be a violation of this Declaration and subject to any or all of the enforcement procedures set forth herein.
11.11 Right to Inspect Documents: Association Financial Statements. 11.11.1 The Association shall make current copies of the Project Documents and the books, records and financial statements of the Association available to Owners, mortgagees, and insurers or guarantors of First Mortgagees and all other Persons designated by the Owner as the Owner's representative in accordance with A.R.S. $33-1805(A). The Association may withhold Association records from disclosure only in compliance with and to the limited extent permitted by the provisions of A.R.S. $33-1805(B) and (C). "Available" means available for inspection (and copying at the expense of the requesting party), within 5 business days after written request or as soon thereafter as is consistent with applicable law. All inspections shall take place during normal business hours or under other reasonable circumstances.
11.11.2 In accordance with A.R.S. $33-1810, the Association shall obtain at least annually an audit, review or compilation of the Association's finances to be completed within 180 days after the end of the Association's fiscal year. Without limiting the foregoing, any First Mortgagee or any holder or insurer of any First Mortgage shall be entitled to receive, upon written request, an audited financial statement for the immediately preceding fiscal year &om a certified public account or other acceptable financial statement preparer. Such audit shall be at the expense of the requesting party if an audited financial statement has not previously been prepared in accordance with A.R.S. $33-1810. The audited financial statement shall be furnished within a reasonable time following receipt by the Association of the request and the payment of the cost of the audit to the preparer of the statement.
11.12 Condemnation. 11.12.1 Common Area. Upon receipt of notice of intention or notice of proceedings whereby all or any part of the Common Area or other Area of Association Responsibility is to be taken by any governmental body by exercise of the power of condemnation or eminent domain, all Owners shall be immediately notified by the Association thereof. The Association shall represent the Owners in any condemnation or eminent domain proceedings or in negotiations, settlements and agreements with the condemning authority for acquisition of any part of the Common Area or other Area of Association Responsibility, and every Owner appoints the Association as his attorney-in-fact for this purpose. The entire award made as compensation for such taking, including, but not limited to, any amount awarded as severance damages or the entire amount received and paid in anticipation and settlement for such taking, after deducting therefrom, in each case, reasonable and necessary costs and expenses, including, but not limited to, attorneys' fees, appraisers' fees and court costs (which net amount shall hereinafter be referred to as the "Award"), shall be paid to the Association as trustee for the use and benefit of the Owners and their First Mortgagees as their interests may appear. The Association shall, as soon as and to the extent it is practicable, cause the Award to be utilized for the purpose of repairing and restoring the Project, includina if the Association deems it necessary or desirable, the replacement of any Improvements so taken or conveyed.
11.12.2 Lots. In the event of any taking of any Lot in the Project by eminent domain, the Owner of such Lot shall be entitled to receive the award for such taking, and after acceptance thereof he and all of his mortgagees shall be divested of all interest in the Project if such Owner shall vacate his Lot 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. In the event of a taking by eminent domain of more than one Lot at the same time, the Association shall participate in the negotiations and shall propose the method of division of the proceeds of condemnation where Lots are not valued separately by the condemning authority or by the court. In the event any Owner disagrees with the proposed allocation, he may have the matter submitted to arbitration under the rules of the American Arbitration Association.
11.13 References to this Declaration in Deeds. Deeds to and instruments affecting any Lot or any other portion of the Project may contain the covenants, conditions and restrictions herein set forth by reference to this Declaration, but, regardless of whether any such reference is made in any deed or instrument, each and all of the provisions of this Declaration shall be binding upon the Owner or other Person claiming through any deed or other instrument and his heirs, executors, administrators, successors and assignees.
11.14 Gender and Number. Wherever the context of this Declaration so requires, the words used in the masculine gender shall include the feminine and neuter genders; words used in the neuter gender shall include the masculine and feminine genders; words in the singular shall include the plural; and words in the plural shall include the singular.
11.15 Cautions and Titles. All captions, titles or headings of the Articles and Sections in this Declaration are for the purpose of reference and convenience only and are not to be deemed to limit, modify or otherwise affect any of the provisions hereof or to be used in determining the intent of context hereof. The use of the term "Section" in this Declaration shall also mean all subsections grouped under that Section unless the context otherwise requires.
11.16 Notices. If notice of any action or proposed action by the Board or any committee thereof or of any meeting is required by applicable law, this Declaration or resolution of the Board, to be given to any Owner or Resident, then, unless otherwise specified in the Project Documents, or unless otherwise required by applicable Arizona law or by resolution of the Board, such notice requirement shall be deemed satisfied if notice of such action or meeting is published in any newspaper of general circulation within the County. This Section 11.16 shall not be construed to require that any notice be given if not otherwise required and shall not prohibit satisfaction of any notice requirement in any other manner.
11.17 FHA/VA Approval. If this Declaration has been approved by the Federal Housing Administration or the Veterans Administration in connection with loan programs made available by HUDIFHA or VA and so long as there is Class B membership in the Association, the following actions shall require the prior written approval of the Federal Housing Administration or the Veterans Administration: annexation of additional properties, dedication, mortgaging or conveyance of Common Area, and amendment of this Declaration.
11.18 No Absolute Liability. No provision of the Project Documents shall be interpreted or construed as imposing on Owners absolute liability for damage to the Common Area or the Lots. Owners shall only be responsible for damage to the Common Area or Lots caused by the negligence or intentional acts of the Owners or Residents of the Lots or their Invitees or pets.
11.19 References to VA and FHA. In various places throughout the Project Documents, references are made to the Department of Veterans Affairs ("VA") and the Federal Housing Administration ("FHA") and, in particular, to various consents or approvals required of either or both of such agencies. Such references are included so as to cause the Project Documents to meet certain requirements of such agencies should Declarant, in its discretion, request approval of the Project by either or both of those agencies in accordance with any program guidelines requiring FHA or VA approval of the Project Documents. Unless and until FHA or VA have reviewed the Project Documents and approved the Project as acceptable for insured or guaranteed loans and at any time during which such approval, once given, has been revoked, withdrawn, canceled or suspended and there are no outstanding mortgages or deeds of trust Recorded against a Lot to secure payment of an insured or guaranteed loan by either of such agencies, all references herein to required approvals of consents of such agencies shall be deemed null and void and of no force and effect.
11.20 Declarant's Right to Use Similar Name. The Association hereby irrevocably consents to the use by any other corporation or other entity which may be formed or incorporated by Declarant of an entity name which is the same or deceptively similar to the name of the Association, provided, however, one or more words are added to the name of such other entity to make the name of the Association distinguishable from the name of such other entity. Within 5 days after being requested to do so by Declarant, the Association shall sign such letters, documents or other writings as may be required by the Arizona Corporation Commission or the Arizona Secretary of State in order for any other corporation or other entity formed or incorporated by the Declarant to use a name which is similar to the name of the Association.
11.21 Attorneys' Fees. In the event Declarant, the Association or any Owner employs an attorney or attorneys: (i) to enforce an Assessment Lien; (ii) to collect any other amounts due from an Owner; (iii) to enforce compliance with or recover damages for any violation or noncompliance with the Project Documents; or (iv) in any other manner arising out of the Project Documents or the operations of the Association, Declarant, the Association or any such Owner shall be entitled to recover its Collection Costs (including reasonable attorneys' fees) from the defaulting Owner.