EditARTICLE 5 THE ASSOCIATION
5.1 Formation of Association. The Association shall be a non-profit Arizona corporation charged with the duties and invested with the powers prescribed by law and set forth in the Articles, Bylaws and this Declaration.
5.2 Board of Directors and Officers. The affairs of the Association shall be conducted by the Board and such officers as the Board may elect or appoint in accordance with the Articles and the Bylaws. Unless the Project Documents specifically require the vote or written consent of the Members, such as in the case of Section 10.23 below, approvals or actions to be given or taken by the Association shall be valid if given or taken by the Board.
5.3 Association Rules. The Board may, from time to time, and subject to the provisions of this Declaration, adopt, amend and repeal Rules pertaining to: (i) the management, operation, and use of the Areas of Association Responsibility; (ii) minimum standards for maintenance of Lots; or (iii) the health, safety and welfare of the Owners and Residents. Without limiting the foregoing, the Board may adopt Association Rules reasonably limiting the periods of use of recreational Common Areas. Unless and until such Rules are adopted and published to the Members, no Person may use the recreational Common Areas after 10 p.m. Phoenix, Arizona time. This period may be further limited or expanded by Association Rule without the need to amend this Declaration.
5.4 Personal Liability. No member of the Board or of any Committee of the Association, no officer of the Association, and no Managing Agent, representative or employee of the Association shall be personally liable to any Member, or to any other Person, including the Association, for any damage, loss or prejudice suffered or claimed on account of any act, omission, error, or negligence of the Association, the Board, a Managing Agent, any representative or employee of the Association, or any Committee, Committee member or officer of the Association; provided, however, the limitations set forth in this Section 5.4 shall not apply to any Person who has failed to act in good faith or has engaged in willful or intentional misconduct.
5.5 Implied Rights. The Association may exercise any right or privilege given to the Association expressly by the Project Documents and every other right or privilege reasonably to be implied from the existence of any right or privilege given to the Association by the Project Documents or reasonably necessary to effectuate any such right or privilege, including, without limitation, the right to employ a Managing Agent or other independent contractor to perform all of the duties and responsibilities of the Association and the Board, subject to Section 5.13 hereof, the Bylaws and restrictions imposed by any governmental or quasi-governmental body or agency having jurisdiction over the Project.
5.6 Identity of Members. Membership in the Association shall be limited to Owners of Lots. An Owner of a Lot shall automatically, upon becoming the Owner thereof, be a Member of the Association and shall remain a Member until such time as his ownership ceases for any reason, at which time his membership in the Association shall automatically cease. Membership and the voting rights described below are appurtenant to, and inseparable from, ownership of the Lot.
5.7 Classes of Membership and Voting Rights. The Association shall have the following two classes of voting membership:
5.7.1 Class A. Class A Members are all of the Owners of Lots, with the exception of Declarant until the termination of the Class B membership. Each Class A member shall be entitled to 1 vote for each Lot owned. Upon the termination of the Class B membership, Declarant shall be a Class A Member with one vote for each Lot owned by Declarant but only for so long as Declarant owns any Lots.
5.7.2 Class B. The Class B Member shall be Declarant. The Class B Member shall be entitled to 3 votes for each Lot owned. The Class B membership shall cease and be converted to Class A membership on the earlier of: (i) the date on which the votes entitled to be cast by the Class A Members equals or exceeds the votes entitled to be cast by the Class B Member; (ii) the date which is 5 years after the Recording of this Declaration; or (iii) when Declarant notifies the Association in writing that it relinquishes its Class B membership. If any Person to whom Declarant has assigned, or hereafter assigns, all or substantially all of its rights under this Declaration as security for an obligation succeeds to the interests of Declarant by virtue of the assignment, Class B membership shall not be terminated and the Person so succeeding to Declarant's interest shall hold Class B membership on the same terms as they were held by Declarant.
5.8 Voting Procedures. No change in the ownership of a Lot shall be effective for voting purposes unless and until the Board is given actual written notice of such change and is provided satisfactory proof thereof. The vote for each Lot must be cast as a unit and fractional votes shall not be allowed. In the event that a Lot is owned by more than one Person and such Owners are unable to agree among themselves as to how their vote or votes shall be cast, they shall lose their right to vote on the matter in question. If any Member casts a vote representing a certain Lot, it will thereafter be conclusively presumed for all purposes that he was acting with the authority and consent of all other Owners of the same Lot unless objection thereto is made at the time the vote is cast. In the event more than one vote is cast by a Class A Member for a particular Lot, none of the votes cast for that Lot shall be counted and all of the votes so cast for that Lot shall be deemed void. Any reference in this Declaration to a vote of a specified percentage or fraction of Members or Owners means the percentage or fraction of the total votes entitled to be cast by such Members or Owners.
5.9 Transfer of Membership. The rights and obligations of any Member other than Declarant shall not be assigned, transferred, pledged, conveyed or alienated in any way except upon transfer of ownership of an Owner's Lot, and then only to the transferee of ownership to the Lot. A transfer of ownership to a Lot may be effected by deed, intestate succession, testamentary disposition, foreclosure of a mortgage of record, or such other legal process as now in effect or as may hereafter be established under or pursuant to the laws of the State of Arizona; provided, that any such transfer is subject to the provisions of Section 6.15 below. Any transfer of ownership to a Lot shall operate to transfer the membership appurtenant to said Lot to the new Owner thereof. Each Purchaser or other Person who becomes an Owner of a Lot shall notify the Association within 10 days after he becomes an Owner. A transfer of ownership of a Lot may be subject to a Transfer Fee pursuant to the provisions of Section 6.15 below.
5.10 Architectural Control. The Board may establish an Architectural Committee to perform the architectural design review and related functions of the Board set forth in this Declaration. If established, the Architectural Committee shall be a committee of the Board and shall consist of such number of regular members and alternate members as may be provided for in the Bylaws. The Board, and/or Architectural Committee, if any, may promulgate Architectural Rules to be followed in rendering its decisions. Such Architectural Rules may include, without limitation, provisions regarding: (i) architectural design, with particular regard to the harmony of the design with the surrounding structures and topography; (ii) requirements concerning exterior Improvements; and (iii) signage. The decision of the Architectural Committee on all matters submitted to it pursuant to this Declaration may be appealed to the Board subject to the right of appeal as determined by the Board in accordance with any Architectural Rules. The Board may establish such other Committees as the Board may determine in its sole discretion and may establish Association Rules governing such Committee, including the number of Board members and alternate members as shall serve on such Committee and the function and delegated duties of such Committee.
5.11 Conveyance or Encumbrance of Common Area. The Common Area shall not be mortgaged, conveyed, transferred, dedicated or encumbered without the prior written consent or affirmative vote of the Class B Member while Declarant holds Class B membership, and the affirmative vote or written consent of the Owners representing at least 213 of the votes entitled to be cast by Class A Members (including Declarant, if Declarant is then a Class A Member). Without limiting the foregoing, no portion of the Common Area providing ingress and egress to any Lots may be mortgaged, conveyed, transferred, dedicated or encumbered without the prior written consent or affirmative vote of the Owners of the affected Lots and all First Mortgagees whose First Mortgages encumber those Lots.
5.12 Suspension of Voting Rights. If any Owner fails to pay any Assessments or any other amounts due to the Association under the Project Documents within 15 days after such payment is due or if any Owner or a Resident violates any other provisions of the Project Documents and such violation is not cured within 30 days after the Association notifies the Owner of the violation, the Board shall have the right to suspend such Owner's right to vote. Any such suspension for failure to pay Assessments or for any infraction of the Project Documents shall continue until such time as all payments, including all delinquent Assessments, late charges, interest and attorneys' fees, are brought current and until the infractions or violations of the Project Documents are cured, as applicable. The Board shall have the right to change the time periods in this Section 5.12 from time to time, and in any event, such periods shall be subject to any requirements of law applicable from time to time.
5.13 Association Contracts. 5.13.1 While Class B Membership exists, any Association contract or agreement with a Managing Agent for professional management of the Project executed by Declarant, or any member, agent or representative of Declarant or any Association contract or agreement providing for services of, or lease or other contract with, the Declarant and/or its affiliates on behalf of the Association, may not exceed 3 years. Any such agreements, contracts or leases referenced in this Section 5.13.1 must also provide for termination by either party without cause and without payment of a termination fee upon 90 days' or less written notice.
5.13.2 The Board, acting on behalf of the Association, shall have the right, power and authority to enter into one or more bulk service agreements with service providers for such duration, at such rate(s) and on such other terms and conditions as the Board deems appropriate, including cable and satellite television and communications services, utility services, pest control, and monitoring or security services as may be in the best interests of the Project. At the election of the Board, the cost of any such service agreements shall be a Common Expense and included within the budget for the Annual Assessment.