|
:
DAN G. CURTIS , P.C.
63 East Main Street
Suite 501
Mesa, Arizona 85201
Attention: Dan G. Curtis, Esq.
CONDOMINIUM DECLARATION
FOR
CASITAS MONTAÑA CONDOMINIUMS
ii
ARTICLE 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 General Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2
SUBMISSION OF PROPERTY; UNIT BOUNDARIES; ALLOCATION
OF PERCENTAGE INTERESTS, VOTES AND
COMMON EXPENSE LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Submission of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Name of Condominium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Name of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Identifying Numbers of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Unit Boundaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.6 Allocation of Common Element Interest and Common Expense
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.7 Allocation of Votes in the Association . . . . . . . . . . . . . . . . . . . . 5
2.8 Allocation of Limited Common Elements . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 3
EASEMENTS AND DEVELOPMENT RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Utility Easement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Easements for Ingress and Egress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Unit Owners' Easements of Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Declarant's Rights and Easements for Sales And Leasing Purposes
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 Declarant's Development Rights and Easements . . . . . . . . . . . . . . . . . 8
3.6 Easement for Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.7 Easement in Favor of the Association . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.8 Common Elements Easement in Favor of Unit Owners . . . . . . . . . . . . 9
3.9 Units and Limited Common Elements Easement in Favor of Association
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.10 Easement for Unintended Encroachments . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 4
USE AND OCCUPANCY RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.1 Residential Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Antennas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Utility Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.4 Improvements and Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.5 Trash Containers and Collection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.6 Machinery and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.7 Animals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.8 Diseases and Insects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.9 Trucks, Trailers, Campers and Boats . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.10 Motor Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.11 Towing of Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
iii
4.12 Holiday Displays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.13 Signs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.14 Lawful Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.15 Nuisances and Offensive Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.16 Rental of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.17 Declarant Approval Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.18 Parking Space and Carport Designation . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 5
MAINTENANCE AND REPAIR OF
COMMON ELEMENTS AND UNITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.1 Duties of the Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.2 Duties of Unit Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Repair or Restoration Necessitated by Owner . . . . . . . . . . . . . . . . . . 15
5.4 Unit Owner's Failure to Maintain . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 6
THE ASSOCIATION; RIGHTS AND DUTIES, MEMBERSHIP . . . . . . . . . . . . . . 15
6.1 Rights, Powers and Duties of the Association . . . . . . . . . . . . . . . . . . . 15
6.2 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.3 Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.4 Composition of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 7
ASSESSMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.1 Preparation of Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.2 Common Expense Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.3 Special Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.4 Effect of Nonpayment of Assessments; Remedies of the Association
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.5 Subordination of Assessment Lien to Mortgages . . . . . . . . . . . . . . . . 18
7.6 Exemption of Unit Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.7 Certificate of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.8 No Offsets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.9 Working Capital Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.10 Surplus Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.11 Transfer Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.12 Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 8
INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.1 Scope of Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2 Fidelity Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.3 Payment of Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.4 Insurance Obtained by Unit Owners . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.5 Payment of Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.6 Certificate of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.7 Annual Insurance Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
iv
ARTICLE 9
DESTRUCTION OF IMPROVEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.1 Automatic Reconstruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.2 Determination Not to Reconstruct Without Termination . . . . . . . . . 23
9.3 Distribution of Insurance Proceeds in the Event of Termination of the
Condominium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.4 Negotiations with Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.5 Repair of Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.6 Priority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 10
EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.1 Total Taking of a Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.2 Partial Taking of a Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.3 Taking of Common Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.4 Taking of Entire Condominium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
10.5 Priority and Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 11
RIGHTS OF FIRST MORTGAGEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.1 Notification to First Mortgagees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.2 Approval Required for Amendment to Declaration, Articles or Bylaws
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.3 Prohibition Against Right of First Refusal . . . . . . . . . . . . . . . . . . . . . 27
11.4 Right of Inspection of Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.5 Prior Written Approval of First Mortgagees . . . . . . . . . . . . . . . . . . . 27
11.6 Liens Prior to First Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.7 Condemnation or Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.8 Limitation on Partition and Subdivision . . . . . . . . . . . . . . . . . . . . . . . 28
11.9 Conflicting Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 12
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.1 Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
12.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.3 Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.4 Termination of Condominium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.5 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.6 Right to Cure Alleged Defects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.7 Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12.8 Approval of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.9 Binding Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
12.11 Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
12.12 Topic Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
12.13 Survival of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.14 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.15 Joint and Several Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.16 Guests and Tenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
v
12.17 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.18 Number of Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.19 Declarant's Right to Use Similar Name . . . . . . . . . . . . . . . . . . . . . . . . 34
12.20 Notice of Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
1
CONDOMINIUM DECLARATION
FOR
CASITAS MONTAÑA CONDOMINIUM
This Condominium Declaration for Casitas Montaña Condominium is made this
____ day of ______________, 2004, by Casitas Montaña, L.L.C., an Arizona limited liability
company.
ARTICLE 1
DEFINITIONS
1.1 General Definitions. Capitalized terms not otherwise defined in this Declaration
shall have the meanings specified for such terms in the Arizona Condominium Act, A.R.S. §33-
1201, et seq., as amended from time to time.
1.2 Defined Terms. The following capitalized terms shall have the general meanings
described in the Act and for purposes of this Declaration shall have the specific meanings set forth
below:
1.2.1 "Articles" means the Articles of Incorporation of the Association, as
amended from time to time.
1.2.2 "Assessments" means the Common Expense Assessments and Special
Assessments levied and assessed against each Unit pursuant to Article 7 of this Declaration.
1.2.3 "Assessment Lien" means the lien granted to the Association by the
Condominium Act to secure the payment of Assessments, monetary penalties and other charges
owed to the Association.
1.2.4 "Association" means Casitas Montaña Condominium Association, an
Arizona nonprofit corporation, its successors and assigns.
1.2.5 "Board of Directors" means the Board of Directors of the Association.
1.2.6 "Building" means the structures designated as buildings on the Plat.
1.2.7 "Bylaws" means the Bylaws of the Association, as amended from time to
time.
1.2.8 "Common Elements" means all portions of the Condominium other than the
Units.
1.2.9 "Common Expenses" means expenditures made by or financial liabilities
of the Association, together with any allocations to reserves.
1.2.10 "Common Expense Assessment" means the assessment levied against the
Units pursuant to Section 7.2 of this Declaration.
2
1.2.11 "Common Expense Liability" means the liability for common expenses
allocated to each Unit by this Declaration.
1.2.12 "Condominium" means the Parcel, together with all buildings and other
Improvements located thereon.
1.2.13 "Condominium Act" means the Arizona Condominium Act, A.R.S. §33-
1201, et seq., as amended from time to time.
1.2.14 "Condominium Documents" means this Declaration and the Articles,
Bylaws, and the Rules.
1.2.15 "Declarant" means Casitas Montaña, L.L.C., an Arizona limited liability
company, and its successors and any Person to whom it may transfer any Special Declarant Right.
1.2.16 "Declaration" means this Condominium Declaration, as amended from time
to time.
1.2.17 "Development Rights" means any right or combination of rights to do any
of the following:
(a) Create easements, Units, Common Elements or Limited Common Elements
within the Condominium;
(b) Subdivide Units, convert Units into Common Elements or convert Common
Elements into Units;
(c) Withdraw real estate from the Condominium;
(d) Amend the Declaration during the Period of Declarant Control to comply with
the Condominium Act or any other applicable law or to correct any error or inconsistency in the
Declaration if the amendment does not adversely affect the rights of any Unit Owner;
(e) Amend the Declaration during the Period of Declarant Control to comply with
the rules or guidelines, in effect from time to time, of any governmental or quasi-governmental entity
or federal corporation guaranteeing or insuring mortgage loans or governing transactions involving
mortgage instruments.
1.2.18 "First Mortgage" means any mortgage or deed of trust on a Unit with first
priority over any other mortgage or deed of trust on the same Unit.
1.2.19 "First Mortgagee" means the holder of any First Mortgage.
1.2.20 "Improvement" means any physical structure, fixture or facility existing or
constructed, placed, erected or installed on the land included in the Condominium, including, but
not limited to, buildings, private drives, paving, fences, walls, sculptures, signs, hedges, plants, trees
and shrubs of every type and kind.
3
1.2.21 "Lessee" means any Person who is the tenant or lessee under a written lease
of a Unit.
1.2.22 "Limited Common Elements" means a portion of the Common Elements
specifically designated in this Declaration as a Limited Common Element and allocated by this
Declaration or by operation of the Condominium Act for the exclusive use of one or more but fewer
than all of the Units.
1.2.23 "Member" means any Person who is or becomes a member of the
Association.
1.2.24 "Parcel" means the real property described on Exhibit A attached to this
Declaration together with all Improvements situated thereon.
1.2.25 "Period of Declarant Control" means the time period commencing on the
date this Declaration is Recorded and ending on the earlier of: (i) ninety (90) days after the
conveyance of seventy-five percent (75%) of the Units which may be created to Unit Owners other
than the Declarant; or (ii) four (4) years after all Declarants have ceased to offer Units for sale in the
ordinary course of business.
1.2.26 "Person" means a natural person, corporation, limited liability company,
business trust, estate, trust, partnership, association, joint venture, government, governmental
subdivision or agency, or other legal or commercial entity.
1.2.27 "Plat" means the condominium plat for Casitas Montaña Condominiums,
which plat has been recorded at Recording No. ____________ and in Book _____ of Maps, Page
_____, records of Maricopa County, Arizona.
1.2.28 "Purchaser" means any Person, other than the Declarant, who by means of
a voluntary transfer becomes a Unit Owner, except for a Person who purchases a Unit and then
leases it to the Declarant for use as a model in connection with the sale of other Units, or a Person
who, in addition to purchasing a Unit, is assigned any Special Declarant Right.
1.2.29 "Recording" means placing an instrument of public record in the office of
the County Recorder of Maricopa County, Arizona and "Recorded" means having been so placed
of public record.
1.2.30 "Rules" means the rules and regulations adopted by the Association, as
amended from time to time.
1.2.31 "Special Declarant Rights" means any right or combination of rights to do
any of the following:
(a) Construct Improvements provided for in this Declaration or shown on the Plat;
(b) Exercise any Development Right;
(c) Maintain sales offices, management offices, models, and signs advertising the
Condominium;
4
(d) Use easements through the Common Elements for the purpose of making
Improvements within the Condominium;
(e) Appoint or remove any officer of the Association or any member of the Board
of Directors during the Period of Declarant Control.
1.2.32 "Unit" means a portion of the Condominium designated for separate
ownership or occupancy, the boundaries of which are described in Section 2.5 of this Declaration
and shown on the Plat.
1.2.33 "Unit Owner" means the record owner, whether one or more Persons, of
beneficial or equitable title (and legal title if the same has merged with the beneficial or equitable
title) to the fee simple interest of a Unit. Unit Owner shall not include Persons having an interest
in a Unit merely as security for the performance of an obligation, or a lessee or tenant of a Unit. Unit
Owner shall include a purchaser under a contract for the conveyance of real property, a contract for
deed, a contract to convey, an agreement for sale or any similar contract subject to A.R.S. § 33-741,
et seq. Unit Owner shall not include a purchaser under a purchase contract and receipt, escrow
instructions or similar executory contracts which are intended to control the rights and obligations
of the parties to executory contracts pending the closing of a sale or purchase transaction. In the case
of Units the fee simple title to which is vested in a trustee pursuant to A.R.S. § 33-801, et seq., the
Trustor shall be deemed to be the Unit Owner. In the case of Units the fee simple title to which is
vested in a trustee pursuant to a subdivision trust agreement or similar agreement, the beneficiary
of any such trust who is entitled to possession of the Unit shall be deemed to be the Unit Owner.
ARTICLE 2
SUBMISSION OF PROPERTY; UNIT BOUNDARIES; ALLOCATION
OF PERCENTAGE INTERESTS, VOTES AND
COMMON EXPENSE LIABILITIES
2.1 Submission of Property. Declarant hereby submits the Parcel to the provisions of
the Condominium Act for the purpose of creating a condominium in accordance with the provisions
of the Condominium Act and hereby declare that the Parcel shall be held and conveyed subject to
the terms, covenants, conditions and restrictions set forth in this Declaration. By acceptance of a
deed or by acquiring any ownership interest in any portion of the Condominium, each Person, for
himself, his heirs, personal representatives, successors, transferees and assigns, binds himself, his
heirs, personal representatives, successors, transferees and assigns, to all of the provisions,
restrictions, covenants, conditions, rules, and regulations now or hereafter imposed by the
Condominium Documents and any amendments thereof. In addition, each such Person by so doing
thereby acknowledges that the Condominium Documents set forth a general scheme for the
improvement and development of the Condominium and hereby evidences his interest that all the
restrictions, conditions, covenants, rules and regulations contained in the Condominium Documents
shall run with the land and be binding on all subsequent and future Unit Owners, grantees,
purchasers, assignees, and transferees thereof. Furthermore, each such Person fully understands and
acknowledges that the Condominium Documents shall be mutually beneficial, prohibitive and
enforceable by the Association and the various subsequent and future Unit Owners. Declarant and
its respective successors, assigns and grantees, covenants and agrees that the Units and the
membership in the Association and the other rights created by the Condominium Documents which
are appurtenant to the Unit shall not be separated or separately conveyed, and each shall be deemed
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to be conveyed or encumbered with its respective Unit even though the description in the instrument
of conveyance or encumbrance may refer only to the Unit.
2.2 Name of Condominium. The name of the Condominium created by this Declaration
is Casitas Montaña Condominium Association.
2.3 Name of Association. The name of the Association is Casitas Montaña
Condominium Association.
2.4 Identifying Numbers of Units. The identifying numbers of the Units are 1A through
5D as shown on the Plat.
2.5 Unit Boundaries.
2.5.1 The boundaries of each Unit are the interior unfinished surfaces of the perimeter
walls, floor, ceiling, doors and windows of the Unit. All lath, furring, wallboard, plasterboard,
plaster, paneling, tiles, wallpaper, paint, finished flooring and any other materials constituting any
part of the finished surfaces of the walls, floor and ceiling are part of the Unit, and all other portions
of the walls, floor and ceiling are part of the Common Elements.
2.5.2 All spaces, interior partitions and other fixtures and improvements (including, but not
limited to, chutes, flues, wires, conduits, heating and air conditioning units, hot water heaters and
gas, cable television, water and electric pipes, lines or meters) within the boundaries of a Unit and
which serve only the Unit are part of the Unit, and any such fixtures or improvements located within
the boundaries of a Unit but which serve more than one Unit are part of the Common Elements.
2.5.3 In the event of any inconsistency or conflict between the provisions of this Section
and the Plat in regard to the description of the boundaries of the Unit, this Section shall control.
2.5.4 The physical boundaries of a Unit shall be considered to be the proper boundaries
regardless of the settling, rising or lateral movement of the Buildings and regardless of any variances
between the boundaries shown on the Plat and the actual physical boundaries.
2.5.5 Declarant reserves the right to relocate the boundaries between adjoining Units owned
by the Declarant and to reallocate each such Unit's Common Element interest, votes in the
Association and Common Expense Liabilities subject to and in accordance with A.R.S. § 33-1222.
2.6 Allocation of Common Element Interest and Common Expense Liabilities. As
used in this Section, "Living Area" means the Unit measured from the exterior walls of the Buildings
and to the center of any common wall between two Units. Each Unit's percentage interest in the
Common Elements and in the Common Expenses shall be allocated based upon the square footage
of the Living Area of each Unit as compared to the square footage of the Living Area of all Units
in the Condominium.
2.7 Allocation of Votes in the Association. The total votes in the Association shall be
equal to the number of Units. The votes in the Association shall be allocated equally among all the
Units with each Unit having one (1) vote.
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2.8 Allocation of Limited Common Elements.
2.8.1 The following portions of the Common Elements are Limited Common Elements and
are allocated to the exclusive use of one Unit as follows:
(a) Any chute, flue, pipe, duct, wire, conduit, bearing wall, bearing column or
other fixtures (including, but not limited to, heating and air conditioning units and related equipment
and gas, cable television, water and electric pipes, lines or meters), located outside of the boundaries
of a Unit, which serve only one Unit are a Limited Common Element allocated solely to the Unit
served;
(b) If a chute, flue, pipe, duct, wire, conduit, bearing wall, bearing column or
other fixtures (including, but not limited to, hot water heaters, heating and air conditioning units and
related equipment and gas, cable television, water and electric pipes, lines or meters) lies partially
within and partially outside the designated boundaries of a Unit, the portion outside the boundaries
of the Unit which serve only the Unit is a Limited Common Element allocated solely to the Unit,
the use of which is limited to that Unit;
(c) Any shutters, awnings, window boxes, doorsteps, stoops, porches and exterior
doors and windows or other fixtures designed to serve a single Unit, located outside the boundaries
of the Unit, are Limited Common Elements allocated exclusively to the Unit served;
(d) Each Unit is allocated the patio or deck, respectively, adjoining the Unit as
shown on the Plat.
2.8.2 A Limited Common Element may be reallocated by an amendment to this Declaration
made in accordance with the provisions of Section 33-1218(B) of the Condominium Act.
2.8.3 The Board of Directors shall have the right, without a vote of the Members, to
allocate as a Limited Common Element any portion of the Common Elements not previously
allocated as a Limited Common Element. Any such allocation by the Board of Directors shall be
made by an amendment to this Declaration and an amendment to the Plat if required by the
Condominium Act.
2.8.4 The Declarant shall have the right to allocate as a Limited Common Element any
parking spaces which are part of the Common Elements and which have not previously been
allocated as a Limited Common Element. Any such allocation shall be made by an Amendment to
this Declaration executed by the Declarant.
ARTICLE 3
EASEMENTS AND DEVELOPMENT RIGHTS
3.1 Utility Easement. There is hereby created an easement upon, across, over and under
the Common Elements for reasonable ingress, egress, installation, replacing, repairing or
maintaining of all utilities, including, but not limited to, gas, water, sewer, telephone, cable
television and electricity. By virtue of this easement, it shall be expressly permissible for the
providing utility company to erect and maintain the necessary equipment on the Common Elements,
but no sewers, electrical lines, water lines, or other utility or service lines may be installed or located
on the Common Elements except as initially designed, approved and constructed by the Declarant
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or as approved by the Board of Directors. This easement shall in no way affect any other recorded
easements on the Common Elements.
3.2 Easements for Ingress and Egress. There is hereby granted and created easements
for ingress and egress for pedestrian traffic over, through and across sidewalks, paths, walks, and
lanes that from time to time may exist upon the Common Elements. There is also granted and
created an easement for ingress and egress for pedestrian and vehicular traffic over, through and
across such streets, driveways and parking areas as from time to time may be paved and intended
for such purposes except that such easements shall not extend to any Limited Common Elements.
Such easements shall run in favor of and be for the benefit of the Unit Owners and occupants of the
Units and their guests, families, tenants and invitees and in favor of the Declarant.
3.3 Unit Owners' Easements of Enjoyment.
3.3.1 Every Unit Owner or Lessee shall have a right and easement of enjoyment in
and to the Common Elements, which right and easement shall be appurtenant to and shall pass with
the title to every Unit, subject to the following provisions:
(a) The right of the Association to adopt reasonable rules and regulations
governing the use of the Common Elements;
(b) The right of the Association to convey the Common Elements or subject the
Common Elements to a mortgage, deed of trust, or other security interest, in the manner and subject
to the limitations set forth in the Condominium Act;
(c) All rights and easements set forth in this Declaration including, but not limited
to, the rights and easements granted to the Declarant by Sections 3.4, 3.5 and 3.6 of this Declaration;
(d) The right of the Association to suspend the right of a Unit Owner or Lessee
to use the Common Elements for any period during which the Unit Owner or Lessee is in violation
of any provision of the Condominium Documents.
3.3.2 Notwithstanding the provisions of Section 3.3.1 above to the contrary, if a
Unit is leased or rented, the Lessee shall have the right to use the Common Elements during the term
of the lease, and the Unit Owner shall have no right to use the Common Elements until the
termination or expiration of the lease.
3.3.3 The guests and invitees of any Unit Owner or Lessee entitled to use the
Common Elements pursuant to this Section 3.3 may use the Common Elements provided they are
accompanied by a Member or Lessee entitled to use the Common Elements pursuant to this Section
3.3. The Board of Directors shall have the right to limit the number of guests and invitees who may
use the Common Elements at any one time and may restrict the use of the Common Elements by
guests and invitees to certain specified times.
3.3.4 The easement of enjoyment in and to the Common Elements shall not be
conveyed, transferred, alienated or encumbered separate and apart from a Unit. Such right and
easement of enjoyment in and to the Common Elements shall be deemed to be conveyed, transferred,
alienated or encumbered upon the sale of any Unit, notwithstanding that the description in the
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instrument of conveyance, transfer, alienation or encumbrance may not refer to such right and
easement.
3.3.5 The provisions of this Section 3.3 shall not apply to any of the Limited
Common Elements that are allocated to one or more but less than all of the Units.
3.4 Declarant's Rights and Easements for Sales And Leasing Purposes.
3.4.1 Declarant shall have the right and an easement to maintain sales or leasing
offices, management offices and models throughout the Condominium and to maintain one or more
marketing, directional or advertising signs on the Common Elements while the Declarant is selling
Units in the Condominium. Declarant reserves the right to place models, management offices and
sales and leasing offices in any Units owned or leased by Declarant and on any portion of the
Common Elements in such number, of such size and in such locations as Declarant deems
appropriate.
3.4.2 Declarant may from time to time relocate models, management offices and
sales and leasing offices to different locations within the Condominium. Upon the relocation of a
model, management office or sales and leasing office constituting a Common Element, Declarant
may remove all personal property and fixtures therefrom.
3.4.3 So long as Declarant is marketing Units in the Condominium, Declarant shall
have the right to restrict the use of the parking spaces which are not allocated as Limited Common
Elements. Such right shall include reserving such spaces for use by prospective Unit purchasers,
Declarant's employees and others engaged in sales, leasing, maintenance, construction or
management activities.
3.4.4 The Declarant reserves the right to retain all personal property and equipment
used in the sales, management, construction and maintenance of the Condominium that has not been
represented to the Association as property of the Association. The Declarant reserves the right to
remove from the Condominium any and all goods and improvements used in development,
marketing and construction, whether or not they have become fixtures.
3.4.5 In the event of any conflict or inconsistency between this Section 3.4 and any
other provision of the Condominium Documents, this Section 3.4 shall control and prevail over such
other provisions.
3.5 Declarant's Development Rights and Easements.
3.5.1 Declarant shall have the right and an easement on and over the Common
Elements to construct the Common Elements and the Units shown on the Plat and all other
Improvements the Declarant may deem necessary and to use the Common Elements and any Units
owned by Declarant for construction or renovation related purposes including the storage of tools,
machinery, equipment, building materials, appliances, supplies and fixtures, and the performance
of work in the Condominium or in any part of the Additional Property whether or not Additional
Property has been subjected to this Declaration.
3.5.2 Declarant shall have the right and an easement on, over and under those
portions of the Common Elements not located within the Buildings for the purpose of maintaining
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and correcting drainage of surface, roof or storm water. The easement created by this Subsection
expressly includes the right to cut any trees, bushes, or shrubbery, to grade the soil or to take any
other action reasonably necessary.
3.5.3 The Declarant shall have an easement through the Units for any access
necessary to complete any renovations, warranty work or modifications to be performed by
Declarant.
3.5.4 The Declarant shall have the right and an easement on, over, and through the
Common Elements as may be reasonably necessary for the purpose of discharging its obligations
and exercising Special Declarant Rights whether arising under the Condominium Act or reserved
in this Declaration.
3.5.5 Declarant shall have the right to create additional Units, Common Elements
and Limited Common Elements within the Condominium.
3.5.6 To the extent not expressly reserved by or granted to Declarant by other
provisions of this Declaration, Declarant reserves all Development Rights and Special Declarant
Rights.
3.5.7 In the event of any conflict or inconsistency between this Section 3.5 and any
other provision of the Condominium Documents, this Section 3.5 shall control and prevail over such
other provisions.
3.6 Easement for Support. To the extent necessary, each Unit shall have an easement
for structural support over every other Unit in the Building, the Common Elements and the Limited
Common Elements, and each Unit and the Common Elements shall be subject to an easement for
structural support in favor of every other Unit in the Building, the Common Elements and the
Limited Common Elements.
3.7 Easement in Favor of the Association.
3.7.1 The Common Elements and the Units shall be subject to an easement in favor
of the Association and its agents, employees and independent contractors for the purpose of the
inspection, upkeep, maintenance, repair and replacement of the Common Elements and for the
purpose of exercising all rights of the Association and discharging all obligations of the Association.
3.7.2 Each Unit shall be subject to an easement in favor of the Association and the
agents, employees and contractors of the Association for the purpose of performing such pest control
activities as the Association may deem necessary to control or prevent the infestation of the
Condominium by insects, rodents or other pests or to eradicate insects, rodents or other pests from
the Condominium.
3.8 Common Elements Easement in Favor of Unit Owners. The Common Elements
shall be subject to the following easements in favor of the Units benefitted:
3.8.1 For the installation, repair, maintenance, use, removal or replacement of pipes,
ducts, heating and air conditioning systems, electrical, telephone and other communication wiring
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and cables and all other utility lines and conduits which are a part of or serve any Unit and which
pass across or through a portion of the Common Elements.
3.8.2 For the installation, repair, maintenance, use, removal or replacement of
lighting fixtures, electrical receptacles, panel boards and other electrical installations which are a part
of or serve any Unit but which encroach into a part of a Common Element adjacent to such Unit;
provided that the installation, repair, maintenance, use, removal or replacement of any such item
does not unreasonably interfere with the common use of any part of the Common Elements,
adversely affect either the thermal or acoustical character of the Building or impair or structurally
weaken the Building.
3.8.3 For driving and removing nails, screws, bolts and other attachment devices
into the Unit side surface of the stone, block, brick or other masonry walls bounding the Unit and
the Unit side surface of the studs which support the dry wall or plaster perimeter walls bounding the
Unit, the bottom surface of floor joists above the Unit and the top surface of the floor joists below
the Unit to the extent such nails, screws, bolts and other attachment devices may encroach into a part
of a Common Element adjacent to such Unit; provided that any such action will not unreasonably
interfere with the common use of any part of the Common Elements, adversely affect either the
thermal or acoustical character of the Building or impair or structurally weaken the Building.
3.8.4 For the maintenance of any lighting devices, outlets, medicine cabinets,
exhaust fans, ventilation ducts, registers, grilles and similar fixtures which serve only one Unit but
which encroach into any part of the Common Elements.
3.8.5 For the performance of the Unit Owners' obligation to maintain, repair,
replace and restore those portions of the Limited Common Elements that the Unit Owner is obligated
to maintain under Section 5.2 of this Declaration.
3.9 Units and Limited Common Elements Easement in Favor of Association. The
Units and the Limited Common Elements are hereby made subject to the following easements in
favor of the Association and its directors, officers, agents, employees and independent contractors:
3.9.1 For inspection at reasonable times and upon reasonable notice to the Unit
Owner of the Units and Limited Common Elements in order to verify the performance by Unit
Owners of all items of maintenance and repair for which they are responsible;
3.9.2 For inspection, maintenance, repair and replacement of the Common Elements
or the Limited Common Elements situated in or accessible from such Units or Limited Common
Elements;
3.9.3 For correction of emergency conditions in one or more Units or Limited
Common Elements or casualties to the Common Elements, the Limited Common Elements or the
Units.
3.9.4 For the purpose of enabling the Association, the Board of Directors or any
other committees appointed by the Board of Directors to exercise and discharge their respective
rights, powers and duties under the Condominium Documents.
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3.9.5 For inspection, at reasonable times and upon reasonable notice to the Unit
Owner, of the Units and the Limited Common Elements in order to verify that the provisions of the
Condominium Documents are being complied with by the Unit Owners or Lessees of the Unit.
3.10 Easement for Unintended Encroachments. To the extent that any Unit or Common
Element encroaches on any other Unit or Common Element as a result of original construction,
shifting or settling, or alteration or restoration authorized by this Declaration or any reason other than
the intentional encroachment on the Common Elements or any Unit by a Unit Owner, a valid
easement for the encroachment, and for the maintenance thereof, exists.
ARTICLE 4
USE AND OCCUPANCY RESTRICTIONS
4.1 Residential Use. All Units shall be used, improved and devoted exclusively to
residential use. No trade or business may be conducted on any Unit or in or from any Unit, except
that an Owner or other resident of a Unit may conduct a business activity within a Unit so long as:
(i) the existence or operation of the business activity is not apparent or detectable by sight, sound or
smell from outside the Unit; (ii) the business activity conforms to all applicable zoning ordinances
or requirements for the Condominium; (iii) the business activity does not involve persons coming
to the Unit or the door-to door-solicitation of Unit Owners, Lessees or Residents in the
Condominium; and (iv) the business activity is consistent with the residential character of the
Condominium and does not constitute a nuisance or a hazardous or offensive use or threaten security
or safety of other Unit Owners, Lessees or Residents, as may be determined from time to time in the
sole discretion of the Board of Directors. The terms "business" and "trade" as used in this Section
shall be construed to have ordinary, generally accepted meanings, and shall include, without
limitation, any occupation, work or activity undertaken on an ongoing basis which involves the
provision of goods or services to persons other than the provider's family and for which the provider
receives a fee, compensation or other form of consideration, regardless of whether: (i) such activity
is engaged in full or part time; (ii) such activity is intended or does generate a profit; or (iii) a license
if required for such activity. The leasing of a Unit by the Unit Owner thereof shall not be considered
a trade or business within the meaning of this Section.
4.2 Antennas. No antenna, satellite television dish or other device for the transmission
or reception of television or radio signals or any other form of electromagnetic radiation shall be
erected, used or maintained outdoors on any portion of the Condominium whether attached to a
building or structure or otherwise, unless approved in writing by the Board of Directors, unless
applicable law prohibits the Board of Directors from requiring such prior approval. Even if
applicable law prohibits the Board of Directors from requiring prior approval of certain types of
antennas, any such antennas must be installed or constructed in accordance with such rules and
regulations as the Board of Directors may adopt.
4.3 Utility Service. Except for lines, wires and devices existing on the Condominium
as of the date of this Declaration and maintenance and replacement of the same, no lines, wires, or
other devices for the communication or transmission of electric current or power, including
telephone, television, and radio signals, shall be erected, placed or maintained anywhere in or upon
the Condominium unless they are installed and maintained underground or concealed in, under or
on the Units or other structures permitted under this Declaration.
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4.4 Improvements and Alterations. Any Unit Owner may make nonstructural
additions, alterations and improvements to the interior of his Unit without the prior written approval
of the Board of Directors, unless the addition, alteration or improvement would be visible from the
exterior of the Unit. The Unit Owner shall be responsible for any damage to other Units and to the
Common Elements which results from any such additions, alterations or improvements. No
addition, alteration or improvement within a Unit, whether structural or not, which would be visible
from the exterior of the Unit shall be made without the prior written approval of the Board of
Directors. No Unit Owner shall make any addition, alteration or improvement to the exterior of his
Unit or the Common Elements without the prior written approval of the Board of Directors.
4.5 Trash Containers and Collection. No garbage or trash shall be placed or kept on
the Condominium except in covered containers of a type, size and style which are approved by the
Board of Directors. The Board of Directors shall have the right to subscribe to a trash service for
the use and benefit of the Association and all Unit Owners, and to adopt and promulgate rules and
regulations regarding garbage, trash, trash containers and collection. The Board of Directors shall
have the right to require all Owners to place trash and garbage in containers located in areas
designated by the Board of Directors. No incinerators shall be kept or maintained in any Unit.
4.6 Machinery and Equipment. No machinery or equipment of any kind shall be
placed, operated or maintained upon the Condominium except such machinery or equipment as is
usual and customary in connection with the use, maintenance or construction of buildings,
improvements or structures which are within the uses permitted by this Declaration, and except that
which Declarant or the Association may require for the construction, operation and maintenance of
the Common Elements.
4.7 Animals. No animals, birds, fowl, poultry or livestock shall be maintained or kept
in any Units or on any other portion of the Condominium, except that no more than two Permitted
Pets may be kept or maintained in a Unit if they are kept, bred or raised solely as domestic pets and
not for commercial purposes. For purposes of this Section, a "Permitted Pet" shall mean a household
bird or a dog or cat. No Permitted Pet shall be allowed to make an unreasonable amount of noise,
cause an odor, or to become a nuisance. All dogs shall be kept on a leash when outside a Unit or any
Limited Common Elements allocated to the Unit, and all dogs shall be directly under the Unit
Owner's control at all times. Any person bringing a dog onto the Common Elements shall
immediately remove any feces deposited on the Common Elements by the dog. Any Unit or
Limited Common Element where a Permitted Pet is kept or maintained shall at all times be kept in
a neat and clean condition. No structure for the care, housing, confinement, or training of any animal
or pet shall be maintained on any portion of the Common Elements or in any Unit so as to be visible
from the exterior of the Building in which the Unit is located. Upon the written request of any Unit
Owner, the Board of Directors shall determine whether, for the purposes of this Section, a Permitted
Pet is a nuisance or is making an unreasonable amount of noise or causing an odor. The Board of
Directors shall have the right to adopt, amend and repeal rules and regulations governing the keeping
of Permitted Pets in the Condominium, and such rules and regulations may include limitations on
the height and/or weight of Permitted Pets; provided, however, that any rule placing limitations on
the height and/or weight of a Permitted Pet must be approved by the affirmative vote of Members
having more than fifty percent (50%) of the votes cast with respect to such proposed rule at a
meeting of the Members.
4.8 Diseases and Insects. No Unit Owner shall permit any thing or condition to exist
upon the Condominium which could induce, breed or harbor infectious plant diseases or noxious
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insects. Each Unit Owner shall perform such pest control activities as may be necessary to prevent
insects, rodents and other pests from being present in the Unit.
4.9 Trucks, Trailers, Campers and Boats. No mobile home, travel trailer, tent trailer,
trailer, camper shell, detached camper, recreational vehicle, boat, boat trailer, or other similar
equipment or vehicle may be parked, kept, maintained, constructed, reconstructed or repaired on any
part of the Condominium.
4.10 Motor Vehicles. Except for emergency repairs, no automobile, truck, motorcycle,
motorbike or other motor vehicle shall be constructed, reconstructed, serviced or repaired on any
portion of the Condominium, and no inoperable vehicle may be stored or parked on any portion of
the Condominium. No automobile, truck, motorcycle, motorbike or other motor vehicle shall be
parked upon any part of the Condominium except in such parking spaces as may exist from time to
time on the Common Elements. If a parking space is assigned to a Unit as a Limited Common
Element, then no Unit Owner or Lessee may park any automobile, truck, motorcycle, motor bike or
other motor vehicle owned or leased by such Unit Owner or Lessee in any parking spaces which are
part of the Common Elements other than the parking space assigned to the Unit as a Limited
Common Element.
4.11 Towing of Vehicles. The Board of Directors shall have the right to have any truck,
mobile home, travel trailer, tent trailer, trailer, camper shell, detached camper, recreational vehicle,
boat, boat trailer or similar equipment or vehicle or any automobile, motorcycle, motorbike, or other
motor vehicle parked, kept, maintained, constructed, reconstructed or repaired in violation of the
Condominium Documents towed away at the sole cost and expense of the owner of the vehicle or
equipment. Any expense incurred by the Association in connection with the towing of any vehicle
or equipment shall be paid to the Association upon demand by the owner of the vehicle or
equipment.
4.12 Holiday Displays. The Owners right to display seasonal, religious or holiday signs,
symbols, and decorations inside Units of the kinds normally displayed in residences located in single
family residential neighborhoods shall not be abridged. Owners may also display on their exterior
doors seasonal, religious and holiday signs, symbols and decorations normally displayed in
residences located in single family residential neighborhoods. Any other displays visible from
outside the Unit shall not be permitted, except as may be approved by the Board for display between
December 15 and January 15 of each year.
4.13 Signs. No signs, banners, posters, placards, billboards, advertisements, bulletins,
announcements, symbols displays or any other manifestations of a message, slogan, or symbol of
any kind shall be displayed upon or visible from the outside of a Unit or placed or displayed
anywhere within the Community. One “For Sale” or one “For Rent” sign shall be permitted so long
as such sign is placed in an area designated by the Board, and the design and size is approved in
accordance with Section 4.5 above.
4.14 Lawful Use. No immoral, improper, offensive, or unlawful use shall be made of any
part of the Condominium. All valid laws, zoning ordinances, and regulations of all governmental
bodies having jurisdiction over the Condominium shall be observed. Any violation of such laws,
zoning ordinances or regulations shall be a violation of this Declaration.
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4.15 Nuisances and Offensive Activity. No noxious, illegal or offensive activities shall
be conducted in any Unit or on any part of the Project, nor shall anything be done thereon which may
be or may become an annoyance or a nuisance to, or which may in any way interfere with, the quiet
enjoyment of each Owner of his respective Unit, threaten the security or safety of other Unit Owners
or occupants of Units or their guests or invitees. No activity shall be conducted in a Unit or any part
of the Common Elements which would increase the rate of insurance for the Project or cause any
insurance policy to be canceled or cause a refusal to renew the same or which will impair the
structural integrity of any Building. Any increase in the insurance premiums for the Project caused
by an Owner shall be paid for by such Owner. No exterior speakers, horns, whistles, bells or other
sound devices, except security or other emergency devices used exclusively for security or
emergency purposes, shall be located, used or placed on the Condominium without the prior written
approval of the Board of Directors.
4.16 Rental of Units. It is intended that the Units in the Condominium be owner
occupied. However, to avoid imposing hardships on individual Unit Owners as a result of unforseen
circumstances, with such circumstances to be evaluated by the Board, the Board may permit a Unit
to be leased for a total time period of not longer than two years, after which time period the Unit
Owner must occupy the Unit, leave the Unit vacant, or sell the Unit. All leases of a Unit or a portion
of a Unit must be in writing and must provide that the terms of the lease are subject in all respects
to the provisions of this Declaration and the Rules and that any violation of this Declaration or the
Rules by the Lessee shall be a default under the lease. At least ten (10) days before commencement
of the lease term, the Unit Owner shall provide the Association with the following information: (i)
the commencement date and expiration date of the lease term; (ii) the names of each of the Lessees;
(iii) the address and telephone number at which the Unit Owner can be contacted by the Association
during the lease term; and (iv) the name, address and telephone number of a person whom the
Association can contact in the event of an emergency involving the Unit. Any Unit Owner who
leases his Unit, or a portion thereof, must provide the Lessee with copies of this Declaration and the
Rules. The Unit Owner shall be liable for any violation of this Declaration or the Rules by the
Lessees or their guests or invitees and, in the event of any such violation, the Unit Owner, upon
demand of the Association, shall immediately take all necessary actions to correct any such
violations.
4.17 Declarant Approval Required. After the expiration of the Period of Declarant
Control and for so long as the Declarant owns any Unit, any action for which the consent or approval
of the Board of Directors is required under this Declaration may be taken only if such action is also
consented to or approved by the Declarant.
4.18 Parking Space and Carport Designation. Parking spaces and carports, if any,
located on the Common Elements shall be designated and set aside for the restricted use of the
Owner of each Unit by the Board of Directors of the Association.
ARTICLE 5
MAINTENANCE AND REPAIR OF
COMMON ELEMENTS AND UNITS
5.1 Duties of the Association. The Association shall maintain, repair and replace all
Common Elements, whether located inside or outside the Units, except for the Limited Common
Elements which the Unit Owners are obligated to maintain, repair and replace pursuant to Section
5.2 of this Declaration. The cost of all such maintenance, repairs and replacements shall be a
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Common Expense and shall be paid for by the Association. The Board of Directors shall be the sole
judge as to the appropriate maintenance, repair and replacement of all Common Elements, but all
Common Elements shall be maintained in good condition and repair at all times. No Owner or
Lessee or other Person shall construct or install any Improvements on the Common Elements or
alter, modify or remove any Common Elements without the approval of the Board of Directors. No
Owner or Lessee or other Person shall obstruct or interfere with the Association in the performance
of the Association's maintenance, repair and replacement of the Common Elements.
5.2 Duties of Unit Owners. Each Unit Owner shall maintain, repair and replace, at his
own expense, all portions of his Unit. In addition, each Unit Owner shall be responsible for the
maintenance and repair of the Limited Common Elements allocated to his Unit pursuant to
Subsections 2.8.1(a) and (b), the exterior doors and door frames and windows allocated to the Unit
as Limited Common Elements pursuant to Section 2.8.1(c) and the frames for such windows, and
the interior of the patio allocated to the Unit by Subsection 2.8(d).
5.3 Repair or Restoration Necessitated by Owner. Each Unit Owner shall be liable
to the Association for any damage to the Common Elements or the Improvements, landscaping or
equipment thereon which results from the negligence or willful misconduct of the Unit Owner. The
cost to the Association of any such repair, maintenance or replacements required by such act of a
Unit Owner shall be paid by the Unit Owner, upon demand, to the Association. The Association
may enforce collection of any such amounts in the same manner and to the same extent as provided
for in this Declaration for the collection of Assessments.
5.4 Unit Owner's Failure to Maintain. If a Unit Owner fails to maintain in good
condition and repair his Unit or any Limited Common Element which he is obligated to maintain
under this Declaration and the required maintenance, repair or replacement is not performed within
fifteen (15) days after written notice has been given to the Unit Owner by the Association, the
Association shall have the right, but not the obligation, to perform the required maintenance, repair
or replacement. The cost of any such maintenance, repair or replacement shall be assessed against
the nonperforming unit Owner pursuant to Subsection 7.2.4 of this Declaration.
ARTICLE 6
THE ASSOCIATION; RIGHTS AND DUTIES, MEMBERSHIP
6.1 Rights, Powers and Duties of the Association. No later than the date on which the
first Unit is conveyed to a Purchaser, the Association shall be organized as a nonprofit Arizona
corporation. The Association shall be the entity through which the Unit Owners shall act. The
Association shall have such rights, powers and duties as are prescribed by law and as are set forth
in the Condominium Documents together with such rights, powers and duties as may be reasonably
necessary in order to effectuate the objectives and purposes of the Association as set forth in this
Declaration and the Condominium Act. The Association shall have the right to finance capital
improvements in the Condominium by encumbering future Assessments if such action is approved
by the written consent or affirmative vote of Unit Owners representing more than two-thirds (2/3)
of the votes in the Association. Unless the Condominium Documents or the Condominium Act
specifically require a vote of the Members, the Board of Directors may act in all instances on behalf
of the Association.
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6.2 Directors and Officers.
6.2.1 During the Period of Declarant Control, the Declarant shall have the right to
appoint and remove the members of the Board of Directors and the officers of the Association who
do not have to be Unit Owners.
6.2.2 Upon the termination of the Period of Declarant Control, the Unit Owners
shall elect the Board of Directors which must consist of at least three members, all of whom must
be Unit Owners. The Board of Directors elected by the Unit Owners shall then elect the officers of
the Association.
6.2.3 The Declarant may voluntarily surrender the right to appoint and remove the
members of the Board of Directors and the officers of the Association before termination of the
Period of Declarant Control, and in that event the Declarant may require, for the duration of the
Period of Declarant Control, that specified actions of the Association or the Board of Directors, as
described in a Recorded instrument executed by the Declarant, be approved by the Declarant before
they become effective.
6.3 Rules. The Board of Directors, from time to time and subject to the provisions of this
Declaration and the Condominium Act, may adopt, amend, and repeal rules and regulations. The
Rules may, among other things, restrict and govern the use of any area by any Unit Owner, by the
family of such Unit Owner, or by any invitee, licensee or lessee of such Unit Owner.
6.4 Composition of Members. Each Unit Owner shall be a Member of the Association.
The membership of the Association at all times shall consist exclusively of all the Unit Owners.
Membership in the Association shall be mandatory. A Unit Owner shall automatically, upon
becoming a Unit Owner, be a member of the Association and shall remain a member of the
Association until such time as his ownership ceases for any reason, at which time his membership
in the Association shall automatically cease. Membership in the Association shall be appurtenant
to each Unit and may not be separately assigned, transferred or conveyed.
ARTICLE 7
ASSESSMENTS
7.1 Preparation of Budget.
7.1.1 At least thirty (30) days before the beginning of each fiscal year of the
Association commencing with the fiscal year in which the first Unit is conveyed to a Purchaser, the
Board of Directors shall adopt a budget for the Association containing an estimate of the total
amount of funds which the Board of Directors believes will be required during the ensuing fiscal
year to pay all Common Expenses including, but not limited, to: (i) the amount required to pay the
cost of maintenance, management, operation, repair and replacement of the Common Elements and
those parts of the Units, if any, which the Association has the responsibility of maintaining, repairing
and replacing; (ii) the cost of wages, materials, insurance premiums, services, supplies and other
expenses required for the administration, operation, maintenance and repair of the Condominium;
(iii) the amount required to render to the Unit Owners all services required to be rendered by the
Association under the Condominium Documents; and (iv) such amounts as may be necessary to
provide general operating reserves and reserves for contingencies and replacements. The budget
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shall separately reflect any Common Expenses to be assessed against less than all of the Units
pursuant to Subsection 7.2.4 or 7.2.5 of this Declaration.
7.1.2 At least ten (10) days before the beginning of each fiscal year of the
Association (except for the first fiscal year), the Board of Directors shall send to each Unit Owner
a summary of the budget and a statement of the amount of the Common Expense Assessment
assessed against the Unit of the Unit Owner in accordance with Section 7.2 of this Declaration. The
failure or delay of the Board of Directors to prepare or adopt a budget for any fiscal year shall not
constitute a waiver or release in any manner of a Unit Owner's obligation to pay his allocable share
of the Common Expenses as provided in Section 7.2 of this Declaration, and each Unit Owner shall
continue to pay the Common Expense Assessment against his Unit as established for the previous
fiscal year until notice of the Common Expense Assessment for the new fiscal year has been given
to the Unit Owners by the Board of Directors.
7.1.3 The Board of Directors is expressly authorized to adopt and amend budgets
for the Association, and no ratification of any budget by the Unit Owners shall be required.
7.2 Common Expense Assessment.
7.2.1 For each fiscal year of the Association commencing with the fiscal year in
which the first Unit is conveyed to a Purchaser, the total amount of the estimated Common Expenses
set forth in the budget adopted by the Board of Directors (except for the Common Expenses which
are to be assessed against less than all of the Units pursuant to Subsections 7.2.4 and 7.2.5 of this
Declaration) shall be assessed against each Unit in proportion to the Unit's Common Expense
Liability as set forth in Section 2.2 of this Declaration. The amount of the Common Expense
Assessment assessed pursuant to this Subsection 7.2.1 shall be in the sole discretion of the Board
of Directors. If the Board of Directors determines during any fiscal year that its funds budgeted or
available for that fiscal year are, or will, become inadequate to meet all Common Expenses for any
reason, including, without limitation, nonpayment of Assessments by Members, the Board of
Directors may increase the Common Expense Assessment for that fiscal year and the revised
Common Expense Assessment shall commence on the date designated by the Board of Directors.
7.2.2 The Common Expense Assessments shall commence as to all Units on the
first day of the month following the conveyance of the first Unit to a Purchaser. The first Common
Expense Assessment shall be adjusted according to the number of months remaining in the fiscal
year of the Association. The Board of Directors may require that the Common Expense Assessments
or Special Assessments be paid in installments.
7.2.3 Except as otherwise expressly provided for in this Declaration, all Common
Expenses including, but not limited to, Common Expenses associated with the maintenance, repair
and replacement of a Limited Common Element, shall be assessed against all of the Units in
accordance with Subsection 7.2.1 of this Declaration.
7.2.4 If any Common Expense is caused by the misconduct of any Unit Owner, the
Association shall assess that Common Expense exclusively against his Unit.
7.2.5 Assessments to pay a judgment against the Association may be made only
against the Units in the Condominium at the time the judgment was entered, in proportion to their
Common Expense Liabilities.
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7.2.6 All Assessments, monetary penalties and other fees and charges levied against
a Unit shall be the personal obligation of the Unit Owner of the Unit at the time the Assessments,
monetary penalties or other fees and charges became due. The personal obligation of a Unit Owner
for Assessments, monetary penalties and other fees and charges levied against his Unit shall not pass
to the Unit Owner's successors in title unless expressly assumed by them.
7.3 Special Assessments. In addition to Common Expense Assessments, the Association
may levy, in any fiscal year of the Association, a special assessment for the purpose of defraying,
in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital
improvement of the Common Elements, including fixtures and personal property related thereto, or
for any other lawful Association purpose, provided that any Special Assessment (other than a Special
Assessment levied pursuant to Section 9.1 of this Declaration as a result of the damage or destruction
of all or part of the Common Elements) shall have first been approved by Unit Owners representing
two-thirds (2/3) of the votes in the Association who are voting in person or by proxy at a meeting
duly called for such purpose. Unless otherwise specified by the Board of Directors, Special
Assessments shall be due thirty (30) days after they are levied by the Association and notice of the
Special Assessment is given to the Unit Owners.
7.4 Effect of Nonpayment of Assessments; Remedies of the Association.
7.4.1 Any Assessment, or any installment of an Assessment, which is not paid
within fifteen (15) days after the Assessment first became due shall be deemed delinquent and shall
bear interest from the date of delinquency at the rate of interest established from time to time by the
Board of Directors. If any Assessment, or any installment thereof, is not paid within fifteen (15)
days after the Assessment first became due, the Association may assess against the delinquent Unit
Owner a late fee in the amount established from time to time by the Board of Directors.
7.4.2 All Assessments, monetary penalties and other fees and charges imposed or
levied against any Unit or Unit Owner shall be secured by the Assessment Lien as provided for in
the Condominium Act. The recording of this Declaration constitutes record notice and perfection
of the Assessment Lien, and no further recordation of any claim of lien shall be required. Although
not required in order to perfect the Assessment Lien, the Association shall have the right but not the
obligation, to record a notice setting forth the amount of any delinquent assessments, monetary
penalties or other fees or charges imposed or levied against a Unit or the Unit Owner which are
secured by the Assessment Lien.
7.4.3 The Association shall have the right, at its option, to enforce collection of any
delinquent Assessments, monetary penalties and all other fees and charges owed to the Association
in any manner allowed by law including, but not limited to: (i) bringing an action at law against the
Unit Owner personally obligated to pay the delinquent amounts and such action may be brought
without waiving the Assessment Lien securing any such delinquent amounts; or (ii) bringing an
action to foreclose the Assessment Lien against the Unit in the manner provided by law for the
foreclosure of a realty mortgage. The Association shall have the power to bid in at any foreclosure
sale and to purchase, acquire, hold, lease, mortgage and convey any and all Units purchased at such
sale.
7.5 Subordination of Assessment Lien to Mortgages. The Assessment Lien shall be
subordinate to the lien of any First Mortgage. Any First Mortgagee or any other Person acquiring
title or coming into possession of a Unit through foreclosure of a First Mortgage, purchase at a
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foreclosure sale or trustee sale, or through any equivalent proceedings, such as, but not limited to,
the taking of a deed in lieu of foreclosure, shall acquire title free and clear of any claims for unpaid
Assessments, monetary penalties and other fees and charges against the Unit which became payable
prior to such sale or transfer. Any delinquent Assessments, monetary penalties and other fees and
charges which are extinguished pursuant to this Section may be reallocated and assessed to all Units
as at Common Expense. Any Assessments, monetary penalties and other fees and charges against
the Unit which accrue prior to such sale or transfer shall remain the obligation of the defaulting Unit
Owner.
7.6 Exemption of Unit Owner. No Unit Owner may exempt himself from liability for
payment of Assessments, monetary penalties and other fees and charges levied pursuant to the
Condominium Documents by waiver and nonuse of any of the Common Elements and facilities or
by the abandonment of his Unit.
7.7 Certificate of Payment. The Association on written request shall furnish to a
lienholder, Unit Owner or person designated by a Unit Owner a recordable statement setting forth
the amount of unpaid Assessments against his Unit. The statement shall be furnished within fifteen
(15) days after receipt of the request and is binding on the Association, the Board of Directors, and
every Unit Owner. The Association may charge a reasonable fee in an amount established by the
Board of Directors for each such statement.
7.8 No Offsets. All Assessments, monetary penalties and other fees and charges shall
be payable in accordance with the provisions of this Declaration, and no offsets against such
Assessments, monetary penalties and other fees and charges shall be permitted for any reason,
including, without limitation, a claim that the Association is not properly exercising its duties and
powers as provided in the Condominium Documents or the Condominium Act.
7.9 Working Capital Fund. To insure that the Association shall have adequate funds
to pay all Common Expenses, each Purchaser of a Unit shall pay to the Association, immediately
upon becoming the Unit Owner of the Unit, a sum equal to two monthly installments of the Common
Expense Assessment for the Unit. Such amount shall be non-refundable and shall not be considered
as an advance payment of any Assessments levied by the Association pursuant to this Declaration.
7.10 Surplus Funds. Surplus funds of the Association remaining after payment of the
Common Expenses and any prepayment of reserves may in the discretion of the Board of Directors
either be returned to the Unit Owners pro rata in accordance with each Unit Owner's Common
Expense Liability or be credited on a pro rata basis to the Unit Owners to reduce each Unit Owner's
future Common Expense Assessments.
7.11 Transfer Fee. Each Purchaser of a Unit shall pay to the Association immediately
upon becoming the Owner of the Unit a transfer fee in the amount set from time to time by the Board
of Directors to compensate the Association for the administrative cost resulting from the transfer of
a Unit. The transfer fee is not intended to compensate the Association for the costs incurred in the
preparation of the statement which the Association is required to mail or deliver to a purchaser under
A.R.S. § 33-1260A and, therefore, the transfer fee shall be in addition to the fee which the
Association is entitled to charge pursuant to A.R.S. § 33-1260C.
7.12 Reserves. After the termination of the Period of Declarant Control, the Assessments
shall include reasonable amounts as determined by the Board of Directors collected as reserves for
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the future periodic maintenance, repair or replacement of all or a portion of the Common Elements,
or any other purpose as determined by the Board of Directors. All amounts collected as reserves,
whether pursuant to this Section or otherwise, shall be deposited by the Board of Directors in a
separate bank account to be held in trust for the purposes for which they are collected and are to be
segregated from and not commingled with any other funds of the Association. Such reserves shall
be deemed a contribution to the capital account of the Association by the Members. The Board of
Directors shall not expend funds designated as reserve funds for any purpose other than those
purposes for which they were collected. Withdrawal of funds from the Association's reserve account
shall require the signatures of either (a) two (2) members of the Board of Directors; or (b) one (1)
member of the Board of Directors and an officer of the Association who is not also a member of the
Board of Directors. After the termination of the Period of Declarant Control, the Board of Directors
shall obtain a reserve study at least once every three years, which study shall at a minimum include
(a) identification of the major components of the Common Elements which the Association is
obligated to repair, replace, restore or maintain which, as of the date of the study, have a remaining
useful life of less than thirty (30) years; (b) identification of the probable remaining useful life of the
identified major components as of the date of the study; (c) an estimate of the cost of repair,
replacement, restoration, or maintenance of the identified major components during and at the end
of their useful life; (d) an estimate of the total annual contribution necessary to defray the cost to
repair, replace, restore, or maintain the identified major components during and at the end of their
useful life, after subtracting total reserve funds as of the date of the study. The Board of Directors
shall modify the budget in accordance with the findings of the reserve study.
ARTICLE 8
INSURANCE
8.1 Scope of Coverage.
8.1.1 Commencing not later than the date of the first conveyance of a Unit to a
Purchaser, the Association shall maintain, to the extent reasonably available, the following insurance
coverage:
(a) A blanket causes of loss - special form policy of property insurance,
sprinkler leakage (if applicable), debris removal and water damage endorsements insuring the entire
Condominium (including, without limitation, all the Units and floor coverings, built-ins, cabinets
and fixtures initially installed therein by the Declarant, and the replacements thereof, but not
including furniture, wall coverings, improvements and additions, and fixtures supplied or installed
by the Unit Owners or any furniture, furnishings or other personal property of the Unit Owners),
together with all air conditioning and heating equipment and other service machinery contained
therein and covering the interests of the Association, the Board of Directors and all Unit Owners and
their mortgagees, as their interests may appear (subject, however, to the loss payment adjustment
provisions in favor of the insurance trustee), in an amount equal to one hundred percent (100%) of
the then current replacement cost of the Condominium (exclusive of the land, excavations,
foundations and other items normally excluded from such coverage), without deduction for
depreciation (such amount to be redetermined annually by the Board of Directors with the assistance
of the insurance company affording such coverage). The Board of Directors shall also obtain and
maintain such coverage on all personal property owned by the Association.
(b) Commercial general liability insurance, for a limit to be determined
by the Board, but not less than $1,000,000.00 for any single occurrence. Such insurance shall cover
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all occurrences commonly insured against for death, bodily injury and property damage arising out
of or in connection with the use, ownership or maintenance of the Common Elements. Such policy
shall include (i) a cross liability clause to cover liabilities of the Unit Owners as a group to a Unit
Owner, (ii) medical payments insurance and contingent liability coverage arising out of the use of
hired and nonowned automobiles, (iii) coverage for any legal liability that results from lawsuits
related to employment contracts in which the Association is a party, and (iv) a waiver of the
contractual liability exclusion for personal injury.
(c) Workmen's compensation insurance to the extent necessary to meet
the requirements of the laws of Arizona and a policy of employer's liability insurance with coverage
limits determined by the Board of Directors.
(d) Directors' and officers' liability insurance in an amount not less than
$1,000,000 covering all the directors and officers of the Association in such limits as the Board of
Directors may determine from time to time.
(e) Such other insurance as the Association shall determine from time to
time to be appropriate to protect the Association, the members of the Board of Directors, the
members of any committee or the Board of Directors or the Unit Owners.
(f) The insurance policies purchased by the Association shall, to the
extent reasonably available, contain the following provisions:
(1) Each Unit Owner shall be an insured under the policy with
respect to liability arising out of his ownership of an undivided interest in the
Common Elements or his membership in the Association.
(2) There shall be no subrogation with respect to the Association,
its agents, servants, and employees against Unit Owners.
(3) No act or omission by any Unit Owner, unless acting within
the scope of his authority on behalf of the Association, shall void the policy or be a
condition to recovery on the policy.
(4) The coverage afforded by such policy shall be primary and
shall not be brought into contribution or proration with any insurance which may be
purchased by Unit Owners or their mortgagees or beneficiaries under deeds of trust.
(5) A "severability of interest" endorsement which shall preclude
the insurer from denying the claim of a Unit Owner because of the negligent acts of
the Association or other Unit Owners.
(6) The Association shall be the insured for use and benefit of the
individual Unit Owners (designated by name if required by the insurer).
(7) For policies of property insurance, a standard mortgagee
clause providing that the insurance carrier shall notify the Association and each First
Mortgagee named in the policy at least ten (10) days in advance of the effective date
of any substantial change in coverage or cancellation of the policy.
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(8) Any Insurance Trust Agreement will be recognized by the
insurer.
(g) If applicable, pressured, mechanical and electrical equipment coverage
on a comprehensive form in an amount not less than $500,000 per accident per
location.
8.1.2 If, at the time of a loss insured under an insurance policy purchased by the
Association, the loss is also insured under an insurance policy purchased by a Unit Owner, the
Association's policy shall provide primary coverage.
8.1.3 The deductible, if any, on any insurance policy obtained by the Association
shall be a Common Expense, but the Association may assess any deductible amount necessitated by
the negligence, misuse or neglect for which a Unit Owner is responsible to such Unit Owner.
8.2 Fidelity Bonds.
8.2.1 The Association shall maintain blanket fidelity bonds for all officers,
directors, trustees and employees of the Association and all other persons handling or responsible
for funds of or administered by the Association including, but without limitation, officers, directors
and employees of any management agent of the Association, whether or not they receive
compensation for their services. The total amount of the fidelity bonds maintained by the
Association shall be based upon the best business judgment of the Board, and shall not be less than
the greater of the estimated maximum funds, including reserve funds, in the custody of the
Association or the management agent, as the case may be, at any given time during the term of each
bond, or the sum equal to three months aggregate Common Expense Assessments on all Units plus
reserve funds. Fidelity bonds obtained by the Association must also meet the following
requirements:
(a) The fidelity bonds shall name the Association as an obligee;
(b) The bonds shall contain waivers by the issuers of the bonds of all
defenses based upon the exclusion of persons serving without compensation from the definition of
"employees" or similar terms or expressions;
(c) The bonds shall provide that they may not be canceled or substantially
modified (including cancellation from nonpayment of premium) without at least ten (10) days prior
written notice to the Association and each First Mortgagee.
8.2.2 The Association shall require any management agent of the Association to
maintain its own fidelity bond in an amount equal to or greater than the amount of the fidelity bond
to be maintained by the Association pursuant to Subsection 8.2.1 of this Declaration. The fidelity
bond maintained by the management agent shall cover funds maintained in bank accounts of the
management agent and need not name the Association as an obligee.
8.3 Payment of Premiums. Premiums for all insurance obtained by the Association
pursuant to this Article shall be Common Expenses and shall be paid for by the Association.
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8.4 Insurance Obtained by Unit Owners. The issuance of insurance policies to the
Association pursuant to this Article shall not prevent a Unit Owner from obtaining insurance for his
own benefit and at his own expense covering his Unit, his personal property and providing personal
liability coverage.
8.5 Payment of Insurance Proceeds. Any loss covered by property insurance obtained
by the Association in accordance with this Article shall be adjusted with the Association and the
insurance proceeds shall be payable to the Association and not to any mortgagee or beneficiary under
a deed of trust. The Association shall hold any insurance proceeds in trust for Unit Owners and
lienholder its their interests may appear, and the proceeds shall be disbursed and applied as provided
for in A.R.S. § 33-1253.
8.6 Certificate of Insurance. An insurer that has issued an insurance policy pursuant
to this Article 8 shall issue certificates or memoranda of insurance to the Association and, on written
request, to any Unit Owner, mortgagee, or beneficiary under at deed of trust. The insurer issuing
the policy shall not cancel or refuse to renew it until thirty (30) days after notice of the proposed
cancellation or nonrenewal has been mailed to the Association, each Unit Owner, and each
mortgagee or beneficiary under a Deed of Trust to whom a certificate or memorandum of insurance
has been issued at their respective last known addresses.
8.7 Annual Insurance Review. After the termination of the Period of Declarant Control,
the Board of Directors shall determine annually whether the amounts and types of insurance it has
obtained provide adequate coverage in light of increased construction costs, inflation, practice in the
area in which the Condominium is located, or any other factor which tends to indicate that either
additional insurance policies or increased coverage under existing policies are necessary or desirable
to protect the interests of the Owners and of the Association.
ARTICLE 9
DESTRUCTION OF IMPROVEMENTS
9.1 Automatic Reconstruction. Any portion of the Condominium for which insurance
is maintained by the Association which is damaged or destroyed shall be repaired or replaced
promptly by the Association unless (i) the Condominium is terminated, (ii) repair or replacement
would be illegal under any state or local health or safety statute or ordinance, or (iii) eighty percent
(80%) of the Unit Owners, including every Owner of a Unit or allocated Limited Common Element
which will not be rebuilt, vote not to rebuild. The cost of repair or replacement of the damaged or
destroyed portion of the Condominium in excess of insurance proceeds and reserves shall be a
Common Expense and shall be assessed to the Members as a Special Assessment pursuant to Section
7.3 of this Declaration.
9.2 Determination Not to Reconstruct Without Termination. If eighty percent (80%)
of the Unit Owners (including every Owner of a Unit or an allocated Limited Common Element
which will not be rebuilt) vote not to rebuild, and the Condominium is not terminated in accordance
with the Act, the insurance proceeds shall be distributed in proportion to their interests in the
Common Elements to the Owners of those Units and the Owners to which those Limited Common
Elements were allocated, or to lienholders as their interests may appear. The remainder of the
proceeds shall be distributed to all Unit Owners or lienholders as their interests may appear in
proportion to Common Element interests of all the Units. If the Unit Owners vote not to rebuild any
Unit, that Unit’s allocated interests in the Common Elements and in the Common Expenses shall be
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automatically reallocated as if the Unit had been condemned under A.R.S. § 22-1206A, and the
Association shall prepare, execute and record an amendment to this Declaration reflecting the
reallocation.
9.3 Distribution of Insurance Proceeds in the Event of Termination of the
Condominium. Notwithstanding any provisions of this Article 9 to the contrary, the distribution
of insurance proceeds resulting from the damage or destruction of all or any part of the Common
Elements shall be distributed as provided in the Act in the event of a termination of the
Condominium.
9.4 Negotiations with Insurer. The Association shall have full authority to negotiate
in good faith with representatives of the insurer of any totally or partially destroyed building or any
other portion of the Common Elements, and to make settlements with the insurer for less than full
insurance coverage on the damage to such building or any other portion of the Common Elements.
Any settlement made by the Association in good faith shall be binding upon all Owners and First
Mortgagees. Insurance proceeds for any damage or destruction of any part of the Condominium
covered by property insurance maintained by the Association shall be paid to the Association and
not to any First Mortgagee or other lienholder. The Association shall hold any proceeds in trust for
the Unit Owners and lienholders as their interests may appear. Except as otherwise provided in
Sections 9.1 and 9.2 of this Declaration, all insurance proceeds shall be disbursed first for the repair
or restoration of the damaged Common Elements, and Unit Owners and lienholders are not entitled
to receive payment of any portion of the proceeds unless there is a surplus of proceeds after the
damaged or destroyed Common Elements have been completely repaired or restored or the
Condominium is terminated.
9.5 Repair of Units. Installation of improvements to, and repair of any damage to, the
interior of a Unit not covered by property insurance maintained by the Association shall be made by
and at the individual expense of the Owner of that Unit and shall be completed as promptly as
practicable and in a lawful and workmanlike manner.
9.6 Priority. Nothing contained in this Article shall entitle an Owner to priority over any
lender under a lien encumbering his Unit as to any portion of insurance proceeds allocated to such
Unit.
ARTICLE 10
EMINENT DOMAIN
10.1 Total Taking of a Unit. If a Unit is acquired by eminent domain, or if part of a Unit
is acquired by eminent domain leaving the Owner with a remnant which may not be practically or
lawfully used for any purpose permitted by this Declaration, the award must compensate the Owner
for his Unit and interest in the Common Elements, regardless of whether any Common Elements are
taken. Upon such a taking, unless the decree otherwise provides, that Unit’s allocated interests in
the Common Elements and in the Common Expenses shall automatically be reallocated to the
remaining Units in proportion to their respective allocated interests immediately before the taking.
Upon such a taking, the Association shall prepare, execute and record an amendment to the
Declaration in compliance with the Act. Any remnant of a Unit remaining after part of a Unit is
taken becomes a Common Element.
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10.2 Partial Taking of a Unit. Except as provided in Section 10.1, if part of a Unit is
acquired by eminent domain, the award must compensate the Owner for the reduction in the value
of his Unit and interest in the Common Elements, regardless of whether any Common Elements are
taken. On acquisition, unless the decree otherwise provides, that Unit’s allocated interests in the
Common Elements and in the Common Expenses shall be reduced in proportion to the reduction in
size of the Unit and the portion of the allocated interests divested from the partially acquired Unit
shall automatically be reallocated to that Unit and the remaining Units in proportion to their
respective interests immediately before the taking, with the partially acquired Unit participating in
the reallocation on the basis of its reduced interest.
10.3 Taking of Common Elements. If part of the Common Elements is acquired by
eminent domain, the portion of the award attributable to the Common Elements taken shall be paid
to the Association for the benefit of the Unit Owners, and any portion of the award attributable to
the acquisition of a Limited Common Element shall be equally divided among the Owners of the
Units to which that Limited Common Element was allocated at the time of the acquisition.
10.4 Taking of Entire Condominium. In the event the Condominium in its entirety is
acquired by eminent domain, the Condominium is terminated and the provisions of A.R.S. § 33-
1228 apply.
10.5 Priority and Power of Attorney. Nothing contained in this Article shall entitle an
Owner to priority over any First Mortgagee under a lien encumbering his Unit as to any portion of
any condemnation award allocated to such Unit. Each Owner hereby appoints the Association as
attorney-in-fact for the purpose of negotiations and settlement with the condemning authority for the
acquisition of the Common elements, or any part thereof. This power of attorney is coupled with
an interest, shall be irrevocable, and shall be binding on any heirs, personal representatives,
successors or assigns or an Owner.
ARTICLE 11
RIGHTS OF FIRST MORTGAGEES
11.1 Notification to First Mortgagees. Upon receipt by the Association of a written
request from a First Mortgagee or insurer or governmental guarantor of a First Mortgage informing
the Association of its correct name and mailing address and number or address of the Unit to which
the request relates, the Association shall provide such Eligible Mortgage Holder or Eligible Insurer
Or Guarantor with timely written notice of the following:
11.1.1 Any condemnation loss or any casualty loss which affects a material portion
of the Condominium or any Unit on which there is a First Mortgage held, insured or guaranteed by
such Eligible Mortgage Holder or Eligible Insurer Or Guarantor;
11.1.2 Any delinquency in the payment of Assessments or charges owed by a Unit
Owner subject to a First Mortgage held, insured or guaranteed by such Eligible Mortgage Holder or
Eligible Insurer Or Guarantor or any other default in the performance by the Unit Owner of any
obligation under the Condominium Documents, which delinquency or default remains uncured for
the period of sixty (60) days;
11.1.3 Any lapse, cancellation or material modification of any insurance policy or
fidelity bond maintained by the Association;
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11.1.4 Any proposed action which requires the consent of a specified percentage of
Eligible Mortgage Holders as set forth in Section 11.2 of this Declaration.
11.2 Approval Required for Amendment to Declaration, Articles or Bylaws.
11.2.1 The approval of Eligible Mortgage Holders holding First Mortgages on Units
the Unit Owners of which have at least fifty-one percent (51%) of the votes in the Association
allocated to Unit Owners of all Units subject to First Mortgages held by Eligible Mortgage Holders
shall be required to add or amend any material provisions of the Declaration, Articles or Bylaws
which establish, provide for, govern or regulate any of the following:
(a) Voting rights;
(b) Assessments, assessment liens or subordination of assessment liens;
(c) Reserves for maintenance, repair and replacement of Common
Elements;
(d) Insurance or fidelity fonds;
(e) Responsibility for maintenance and repairs;
(f) Expansion or contraction of the Condominium, or the addition or
annexation of property to the Condominium;
(g) Boundaries of any Unit;
(h) Reallocation of interests in the Common Elements or Limited
Common Elements or rights to their use;
(i) Convertibility of Units into Common Elements or of Common
Elements into Units;
(j) Leasing of Units;
(k) Imposition of any restrictions on a Unit Owner's right to sell or transfer
his Unit;
(l) A decision by the Association to establish self management when
professional management had been required previously by an Eligible Mortgage Holder;
(m) Restoration or repair of the Condominium (after a hazard damage or
partial condemnation) in a manner other than that specified in the Condominium Documents;
(n) Any action to terminate the legal status of the Condominium after
substantial destruction or condemnation occurs;
(o) Any provisions which expressly benefit First Mortgagees, Eligible
Mortgage Holders or Eligible Insurers Or Guarantors.
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11.2.2 Any action to terminate the legal status of the Condominium for reasons other
than substantial destruction or condemnation of the Condominium must be approved by Eligible
Mortgage Holders holding mortgages on Units the Unit Owners of which have at least sixty-seven
percent (67%) of the votes in the Association allocated to Unit Owners of all Units subject to First
Mortgages held by Eligible Mortgage Holders.
11.2.3 Any First Mortgagee who receives a written request to approve additions or
amendments to the Declaration, Articles or Bylaws, which additions. or amendments are not
material, who does not deliver or mail to the requesting party a negative response within thirty (30)
days shall be deemed to have approved such request. Any addition or amendment to the Declaration,
Articles or Bylaws shall not be considered material if it is for the purpose of correcting technical
errors or for clarification only.
11.2.4 The approvals required by this Section shall not apply to amendments that
may be executed by the Declarant in the exercise of its Development Rights.
11.3 Prohibition Against Right of First Refusal. The right of a Unit Owner to sell,
transfer or otherwise convey his Unit shall not be subject to any right of first refusal or similar
restriction.
11.4 Right of Inspection of Records. Any Unit Owner, First Mortgagee or Eligible
Insurer Or Guarantor will, upon written request, be entitled to: (i) inspect the current copies of the
Condominium Documents and the books, records and financial statements of the Association during
normal business hours; (ii) receive within ninety (90) days following the end of any fiscal year of
the Association, an audited financial statement of the Association for the immediately preceding
fiscal year of the Association, free of charge to the requesting party; and (iii) receive written notice
of all meetings of the Members of the Association and be permitted to designate a representative to
attend all such meetings.
11.5 Prior Written Approval of First Mortgagees. Except as provided by statute in case
of condemnation or substantial loss to the Units or the Common Elements, unless at least two-thirds
(2/3) of all First Mortgagees (based upon one vote for each First Mortgage owned) or Unit Owners
(other than the Declarant or other sponsor, developer or builder of the Condominium) of the Units
have given their prior written approval, the Association shall not be entitled to:
11.5.1 By act or omission, seek to abandon or terminate this Declaration or the
Condominium;
11.5.2 Change the pro rata interest or obligations of any individual Unit 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 Unit
in the Common Elements;
11.5.3 Partition or subdivide any Unit;
11.5.4 By act or omission, seek to abandon, partition, subdivide, encumber, sell or
transfer the Common Elements. The granting of easements for public utilities or for other public
purposes consistent with the intended use of the Common Elements shall not be deemed a transfer
within the meaning of this Subsection;
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11.5.5 Use Hazard insurance proceeds for losses to any Units or the Common
Elements for any purpose other than the repair, replacement or reconstruction of such Units or the
Common Elements.
Nothing contained in this Section or any other provisions of this Declaration shall be deemed
to grant the Association the right to partition any Unit without the consent of the Unit Owners
thereof. Any partition of a Unit shall be subject to such limitations and prohibitions as may be set
forth elsewhere in this Declaration or as provided under Arizona law.
11.6 Liens Prior to First Mortgage. All taxes, assessments, and charges which may
become liens prior to the First Mortgage under local law shall relate only to the individual Unit and
not to the Condominium as a whole.
11.7 Condemnation or Insurance Proceeds. No Unit Owner, or any other party, shall
have priority over any rights of any First Mortgagee of the Unit pursuant to its mortgage in the case
of a distribution to such Unit Owner of insurance proceeds or condemnation awards for losses to or
a taking of Units and/or Common Elements.
11.8 Limitation on Partition and Subdivision. No Unit shall be partitioned or
subdivided without the prior written approval of the Holder of any First Mortgage on such Unit.
11.9 Conflicting Provisions. In the event of any conflict or inconsistency between the
provisions of this Article and any other provision of the Condominium Documents, the provisions
of this Article shall prevail; provided, however, that in the event of any conflict or inconsistency
between the different Sections of this Article or between the provisions of this Article and any other
provision of the Condominium Documents with respect to the number or percentage of Unit Owners,
First Mortgagees, Eligible Mortgage Holders or Eligible Insurers Or Guarantors that must consent
to (i) an amendment of the Declaration, Articles or Bylaws, (ii) a termination of the Condominium,
or (iii) certain actions of the Association as specified in Section 11.1 and 11.5 of this Declaration,
the provision requiring the consent of the greatest number or percentage of Unit Owners, First
Mortgagees, Eligible Mortgage Holders or Eligible Insurers Or Guarantors shall prevail.
ARTICLE 12
GENERAL PROVISIONS
12.1 Enforcement. The Association or any Unit Owner shall have the right to enforce the
Condominium Documents in any manner provided for in the Condominium Documents or by law
or in equity, including, but not limited to, an action to obtain an injunction to compel removal of any
Improvements constructed in violation of this Declaration or to otherwise compel compliance with
the Condominium Documents. The failure of the Association or an Owner to take enforcement
action with respect to a violation of the Condominium Documents shall not constitute or be deemed
a waiver of the right of the Association or any Owner to enforce the Condominium Documents in
the future. If any lawsuit is filed by the Association or any Owner to enforce the provisions of the
Condominium Documents or in any other manner arising out of the Condominium Documents or
the operations of the Association, the prevailing party in such action shall be entitled to recover from
the other party all attorney fees incurred by the prevailing party in the action. In addition to any
other rights or remedies available to the Association pursuant to the Condominium Documents or
at law or in equity, the Board of Directors shall have the power to levy reasonable monetary
penalties against a Unit Owner for a violation of the Condominium Documents by the Unit Owner
29
or a Lessee of the Unit Owner, provided the Unit Owner is given notice and an opportunity to be
heard. All rights, options and remedies of Declarant, the Association, the Unit Owners or First
Mortgagees under this Declaration are cumulative, and not one of them shall be exclusive of any
other, and Declarant, the Association, the Unit Owners and the First Mortgagees shall have the right
to pursue any one or all of such rights, options and remedies or any other remedy or relief which may
be provided by law, whether or not stated in this Declaration.
12.2 Severability. Invalidation of any one of these covenants or restrictions by judgment
or court order shall in no way affect any other provisions which shall remain in full force and effect.
12.3 Duration. The covenants and restrictions of this Declaration, as amended from time
to time, shall run with and bind the Condominium in perpetuity unless the Condominium is
terminated as provided in Section 12.4 of this Declaration.
12.4 Termination of Condominium. The Condominium may be terminated only in the
manner provided for in the Condominium Act.
12.5 Amendment.
12.5.1 Except in cases of amendments that may be executed by a Declarant in the
exercise of its Development Rights or under Section 33-1220 of the Condominium Act, by the
Association under Section 33-1206 or 33-1216(D) of the Condominium Act, or by certain Unit
Owners under Section 33-1218(B), Section 33-1222, Section 33-1223 or Section 33-1228(B) of the
Condominium Act, the Declaration, including the Plat, may be amended only by a vote of the Unit
Owners to which at least sixty-seven percent (67%) of the votes in the Association are allocated.
12.5.2 Except to the extent expressly permitted or required by the Condominium
Act, an amendment to the Declaration shall not create or increase Special Declarant Rights, increase
the number of Units or change the boundaries of any Unit, the allocated Interest of a Unit, or the use
as to which any Unit is restricted, in the absence of unanimous consent of the Unit Owners.
12.5.3 An amendment to the Declaration shall not terminate or decrease any
unexpired Development Right, Special Declarant Right or Period of Declarant Control unless the
Declarant approves the amendment in writing.
12.5.4 During the Period of Declarant Control, the Declarant shall have the right to
amend the Declaration, including the Plat, to (i) comply with the Condominium Act or any other
applicable law if the amendment does not adversely affect the rights of any Unit Owner, (ii) correct
any error or inconsistency in the Declaration if the amendment does not adversely affect the rights
of any Unit Owner.
12.5.5 Any amendment adopted by the Unit Owners pursuant to Subsection 12.5.1
of this Declaration shall be signed by the President or Vice President of the Association and shall
be Recorded. Any such amendment shall certify that the amendment has been approved as required
by this Section. Any amendment made by the Declarant pursuant to Subsection 12.5.4 of this
Declaration or the Condominium Act shall be executed by the Declarant and shall be Recorded.
12.6 Right to Cure Alleged Defects. It is Declarant’s intent that the Common Elements,
each Unit and all Improvements constructed on the Condominium be built in compliance with all
30
applicable building codes and ordinances and that they be of a quality that is consistent with good
construction and development practices for production housing of this type. Nevertheless, due to
the complex nature of construction and the subjectivity involved in evaluating such quality, disputes
may arise as to whether a defect exists and Declarant’s responsibility therefor. It is Declarant’s
intent to resolve all disputes and claims regarding "Alleged Defects" (as defined below") amicably,
and without the necessity of time-consuming and costly litigation. Accordingly, the Association,
Board of Directors and all Unit Owners shall be bound by the following claim resolution procedure:
12.6.1 Right to Cure. In the event that the Association, the Board of Directors, or
any Unit Owner or Unit Owners (collectively, "Claimant") claim, contend or allege that any portion
of the Common Elements, any Unit, and/or any Improvements constructed on the Condominium are
defective, or that Declarant, its agents, consultants, contractors or subcontractors (collectively,
"Agents") were negligent in the planning, design, engineering, grading, construction or other
development thereof (collectively, an "Alleged Defect"), Declarant hereby reserves the right for itself
to inspect, repair and/or replace such Alleged Defect as set forth herein.
12.6.2 Notice. In the event that a Claimant discovers any Alleged Defect, Claimant
shall notify Declarant, in writing, within fifteen (15) days is discovery of the Alleged Defect, of the
specific nature of such Alleged Defect ("Notice of Alleged Defect").
12.6.3 Right to Enter, Inspect, Repair and/or Replace. Within a reasonable time after
the receipt by Declarant of a Notice of Alleged Defect, or the independent discovery of any Alleged
Defect by Declarant, as part of Declarant’s reservation or right, Declarant shall have the right, upon
reasonable notice to Claimant and during normal business hours, to enter onto or into, as applicable,
the Common Elements, any Unit, and/or any Improvements for the purposes of inspecting and/or
conducting testing and, if deemed necessary by Declarant, repairing and/or replacing such Alleged
Defect. In conducting such inspection, testing, repairs and/or replacement, Declarant shall be
entitled to take any actions as it shall deem reasonable and necessary under the circumstances.
12.6.4 No Additional Obligations; Irrevocability and Waiver of Right. Nothing set
forth in this Section shall be construed to impose any obligation on Declarant to inspect, test, repair,
or replace any item or Alleged Defect for which Declarant is not otherwise obligated under
applicable law or any limited warranty provided by Declarant in connection with the sale of the
Units. The right of Declarant to enter, inspect, test, repair and/or replace reserved hereby shall be
irrevocable and may not be waived or otherwise terminated except by a writing, in recordable form,
executed and Recorded by Declarant.
12.6.5 Tolling of Statute of Limitations. In no event shall any statutes of limitations
be tolled during the period in which Declarant conducts any inspection or testing of any Alleged
Defects.
12.7 Legal Actions. All legal actions initiated by the Association, the Board of Directors,
or any Unit Owner or Unit Owners (collectively, "Claimant"), shall be brought in accordance with
and subject to Sections 10.7 (Binding Arbitration), and 10.8 (Approval of Litigation) of this
Declaration. In the event a Claimant initiates any legal action, cause of action, proceeding, reference
or arbitration against Declarant alleging damages (i) for the costs of repairing or the replacement of
any defective portion of the Common Elements, any Unit, and/or Improvements constructed on the
Condominium, or from the negligence in the planning, design, engineering, grading, construction,
or other development thereof by Declarant, its agents, consultants, contractors or subcontractors
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(collectively, an "Alleged Defect"), (ii) for the diminution in value of any real or personal property
resulting from such Alleged Defect, or (iii) for any consequential damages resulting from such
Alleged Defect, any judgment or award in connection therewith shall first be used to correct and or
repair such Alleged Defect or to reimburse the Claimant for any costs actually incurred by such
Claimant in correcting and/or repairing the Alleged Defect. In the event the Claimant is the
Association, the Association must provide written notice to all Members prior to initiation of any
legal action, cause of action, proceeding, reference or arbitration against Declarant which notice shall
(at a minimum) include (i) a description of the Alleged Defect, (ii) a description of the attempts of
Declarant to correct such Alleged Defect and the opportunities provided to Declarant to correct such
Alleged Defect, (iii) a certification from an engineer licensed in the State of Arizona that such
Alleged Defect exists along with a description of the scope of work necessary to cure such Alleged
Defect and a resume of such engineer, (iv) the estimated cost to repair such Alleged Defect, (v) the
name and professional background of the attorney retained by the Association to pursue the claim
against Declarant and a description of the relationship between such attorney and member(s) of the
Board (if any), (vi) a description of the fee arrangement between such attorney and the Association,
(vii) the estimated attorneys’ fees and expert fees and costs necessary to pursue the claim against
Declarant and the source of the funds which will be used to pay such fees and expenses, (viii) the
estimated time necessary to conclude the action against Declarant, and (ix) an affirmative statement
from the Board that the action is in the best interests of the Association and its Members. In the
event the Association recovers any funds from Declarant (or any other Person) to repair an Alleged
Defect, any excess funds remaining after repair of such Alleged Defect shall be paid into the
Association’s reserve fund.
12.8 Approval of Litigation. The Association shall not incur legal expenses, including
without limitation, attorneys’ fees, where the Association initiates legal proceedings or is joined as
a plaintiff in legal proceedings without the written approval of Owners entitled to cast more than
fifty percent (50%) of the total votes in the Association, excluding the voting power of any Unit
Owner who would be a defendant in such proceedings. The Association must finance any legal
proceeding with monies that are specifically collected for same and may not borrow money or use
reserve funds or other monies collected for specific Association obligations other than legal fees.
In the event that the Association commences any legal proceedings, all Unit Owners must notify
prospective purchasers of such legal proceedings and must provide such prospective purchasers with
a copy of the notice received from the Association in accordance with Section 12.7 of this
Declaration. This Section shall not apply to legal proceedings initiated to enforce the use restrictions
contained in Article 4 hereof, or collect any unpaid Assessments or other sums levied pursuant to
this Declaration.
12.9 Binding Arbitration. In the event of a dispute between or among Declarant, its
builders, contractors or brokers, or their agents or employees, on the one hand, and any Unit
Owner(s) or the Association, on the other hand, regarding any controversy or claim between the
parties, including any claim based on contract, tort, or statute, arising out of or relating to the rights
or duties of the parties under this Declaration, the design or construction of the Condominium, or
an Alleged Defect, the matter will be resolved by binding arbitration which shall be conducted in
accordance with the following rules:
12.9.1 Initiation of Arbitration. The arbitration shall be initiated by either party
delivering to the other a Notice of Intention to Arbitrate as provided for in the American Arbitration
Association ("AAA") Commercial Arbitration Rules, as amended from time to time (the "AAA
Rules").
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12.9.2 Governing Procedures. The arbitration shall be conducted in accordance with
the AAA Rules and A.R.S. § 12-1501, et seq. In the event of a conflict between the AAA Rules and
this Section 10.8, the provisions of this Section 10.8 shall govern.
12.9.3 Appointment of Arbitrator. The parties shall appoint a single Arbitrator by
mutual agreement. If the parties have not agreed within ten (10) days of the date of the Notice of
Intention to Arbitrate on the selection of an arbitrator willing to serve, the AAA shall appoint a
qualified Arbitrator to serve. Any arbitrator chosen in accordance with this Subsection (iii) is
referred to in this Section 10.8 as the "Arbitrator".
12.9.4 Qualifications of Arbitrator. The Arbitrator shall be neutral and impartial.
The Arbitrator shall be fully active in such Arbitrator’s occupation or profession, knowledgeable as
to the subject matter involved in the dispute, and experienced in arbitration proceedings. The
foregoing shall not preclude otherwise qualified retired lawyers or judges.
12.9.5 Disclosure. Any candidate for the role of Arbitrator shall promptly disclose
to the parties all actual or perceived conflicts of interest involving the dispute or the parties. No
Arbitrator may serve if such person has a conflict of interest involving the subject matter of the
dispute or the parties. If an Arbitrator resigns or becomes unwilling to continue to serve as an
Arbitrator, a replacement shall be selected in accordance with the procedure set forth in Subsection
(iii) above.
12.9.6 Compensation. The Arbitrator shall be fully compensated for all time spent
in connection with the arbitration proceedings in accordance with the Arbitrator’s hourly rate not to
exceed Three Hundred Dollars ($300.00) per hour, unless otherwise agreed to by the parties, for all
time spent by the Arbitrator in connection with the arbitration proceeding. Pending the final award,
the Arbitrator’s compensation and expenses shall be advanced equally by the parties.
12.9.7 Preliminary Hearing. Within thirty (30) days after the Arbitrator has been
appointed, a preliminary hearing among the Arbitrator and counsel for the Parties shall be held for
the purpose of developing a plan for the management of the arbitration, which shall then be
memorialized in an appropriate order. The matters which may be addressed include, in addition to
those set forth in the AAA Guidelines, the following: (i) definition of issues; (ii) scope, timing and
types of discovery, if any; (iii) schedule and place(s) of hearings; (iv) setting of other timetables; (v)
submission of motions and briefs; (vi) whether and to what extent expert testimony will be required,
whether the Arbitrator should engage one or more neutral experts, and whether, if this is done,
engagement of experts by the Parties can be obviated or minimized; (vii) whether and to what extent
the direct testimony of witnesses will be received by affidavit or written witness statement; and (viii)
any other matters which may promote the efficient, expeditious, and cost-effective conduct of the
proceeding.
12.9.8 Management of the Arbitration. The Arbitrator shall actively manage the
proceedings as the Arbitrator deems best so as to make the proceedings expeditious, economical and
less burdensome than litigation.
12.9.9 Confidentiality. All papers, documents, briefs, written communication,
testimony and transcripts as well as any and all arbitration decisions shall be confidential and not
disclosed to anyone other than the Arbitrator, the parties or the parties’ attorneys and expert
witnesses (where applicable to their testimony), except that upon prior written consent of all parties,
33
such information may be divulged to additional third parties. All third parties shall agree in writing
to keep such information confidential.
12.9.10 Hearings. Hearings may be held at any place within the State of Arizona
designated by the Arbitrator and, in the case of particular witnesses not subject to subpoena at the
usual hearing site, at a place where such witnesses can be compelled to attend.
12.9.11 Final Award. The Arbitrator shall promptly (within sixty (60) days of the
conclusion of the proceedings or such longer period as the parties mutually agree) determine the
claims of the parties and render a final award in writing. The Arbitrator may award the prevailing
party in the proceeding all or a part of such party’s reasonable attorneys’ fees and expert witness
fees, taking into account the final result of arbitration, the conduct of the parties and their counsel
in the course of the arbitration, and other relevant factors. The Arbitrator shall not award any
punitive damages. The Arbitrator shall not award indirect, consequential or special damages
regardless of whether the possibility of such damage or loss was disclosed to, or reasonably foreseen
by the party against whom the claim is made; provided, however, that such damages may be deemed
by the Arbitrator to be direct damages in an award reimbursing payments made by a party therefor
to a third party. The Arbitrator shall assess the costs of the proceedings (including, without
limitation, the fees of the Arbitrator) against the non-prevailing party.
12.9.12 Statute of Limitations. All statutes of limitation applicable to claims which
are subject to binding arbitration pursuant to this Section 12.9 shall apply to the commencement of
arbitration proceedings under this Section 12.9. If arbitration proceedings are not initiated within
the applicable period, the claim shall forever be barred.
12.10 Notices. All notices, demands, statements or other communications required to be
given to or served on a Unit Owner under this Declaration shall be in writing and shall be deemed
to have been duly given and served if delivered personally or sent by United States mail, postage
prepaid, return receipt requested, addressed to the Unit Owner, at the address which the Unit Owner
shall designate in writing and file with the Association or, if no such address is designated, at the
address of the Unit of such Unit Owner. A Unit Owner may change his address on file with the
Association for receipt of notices by delivering a written notice of change of address to the
Association pursuant to this Section. A notice given by mail, whether regular, certified, or
registered, shall be deemed to have been received by the person to whom the notice was addressed
on the earlier of the date the notice is actually received or three days after the notice is mailed. If
a Unit is owned by more than one person, notice to one of the Unit Owners shall constitute notice
to all Unit Owners of the same Unit. Each Unit Owner shall file his correct mailing address with the
Association, and shall promptly notify the Association in writing of any subsequent change of
address.
12.11 Gender. The singular, wherever used in this Declaration, shall be construed to mean
the plural when applicable, and the necessary grammatical changes required to make the provisions
of this Declaration apply either to corporations or individuals, or men or women, shall in all cases
be assumed as though in each case fully expressed.
12.12 Topic Headings. The marginal or topical headings of the sections contained in this
Declaration are for convenience only and do not define, limit or construe the contents of the sections
or of this Declaration.
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12.13 Survival of Liability. The termination of membership in the Association shall not
relieve or release any such former Owner or Member from any liability or obligation incurred under,
or in any way connected with, the Association during the period of such ownership or membership,
or impair any rights or remedies which the Association may have against such former Owner or
Member arising out of, or in any way connected with, such ownership or membership and the
covenants and obligations incident thereto.
12.14 Construction. In the event of any discrepancies, inconsistencies or conflicts between
the provisions of this Declaration and the Articles, Bylaws or the Association Rules, the provisions
of this Declaration shall prevail.
12.15 Joint and Several Liability. In the case of joint ownership of a Unit, the liabilities
and obligations of each of the joint Unit Owners set forth in, or imposed by, the Condominium
Documents shall be joint and several.
12.16 Guests and Tenants. Each Unit Owner shall be responsible for compliance by his
agents, tenants, guests, invitees, licensees and their respective servants, agents, and employees with
the provisions of the Condominium Documents. A Unit Owners' failure to insure compliance by
such Persons shall be grounds for the same action available to the Association or any other Unit
Owner by reason of such Unit Owner's own noncompliance.
12.17 Attorneys' Fees. In the event the Declarant, the Association or any Unit Owner
employs an attorney or attorneys to enforce a lien or to collect any amounts due from a Unit Owner
or to enforce compliance with or recover damages for any violation or noncompliance with the
condominium documents, the prevailing party in any such action shall be entitled to recover from
the other party his reasonable attorneys' fees incurred in the action.
12.18 Number of Days. In computing the number of days for purposes of any provision
of the Condominium Documents, all days shall be counted including Saturdays, Sundays and
holidays; provided, however, that if the final day of any time period falls on a Saturday, Sunday or
holiday, then the next day shall be deemed to be the next day which is not a Saturday, Sunday or
holiday.
12.19 Declarant's Right to Use Similar Name. The Association hereby irrevocably
consents to the use by any other nonprofit corporation which may be formed or incorporated by
Declarant of a corporate name which is the same or deceptively similar to the name of the
Association provided one or more words are added to the name of such other corporation to make
the name of the Association distinguishable from the name of such other corporation. Within five
(5) days after being requested to do so by the Declarant, the Association shall sign such letters,
documents or other writings as may be required by the Arizona Corporation Commission in order
for any other nonprofit corporation formed or incorporated by the Declarant to use a corporate name
which is the same or deceptively similar to the name of the Association.
12.20 Notice of Violation. The Association shall have the right to record a written notice
of a violation by any Unit Owner of any restriction or provision of the Condominium Documents.
The notice shall be executed and acknowledged by an officer of the Association and shall contain
substantially the following information: (i) the name of the Unit Owner; (ii) the legal description of
the Unit 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
35
Declaration; and (v) a statement of the specific steps which must be taken by the Unit Owner to cure
the violation. Recordation of a Notice of Violation shall serve as a notice to the Unit Owner and to
any subsequent purchaser of the Unit that there is a violation of the provisions of the Condominium
Documents.
CASITAS MONTAÑA, L.L.C., an Arizona
limited liability company
By:
Managing Member
State of Arizona )
) ss.
County of Maricopa )
The foregoing instrument was acknowledged before me this ____ day of
___________________, 2004, by ______________________, the Managing Member of CASITAS
MONTAÑA, L.L.C., an Arizona limited liability company, on behalf of the limited liability
company.
Notary Public
Notary Stamp
EXHIBIT A
LEGAL DESCRIPTION OF
PROPERTY SUBMITTED TO CONDOMINIUM
THAT PROPERTY DESCRIBED IN RECORDERS NUMBER 01-0402606
RECORDS OF MARICOPA COUNTY, ARIZONA, MORE PARTICULARLY
DESCRIBED AS FOLLOW:
COMMENCING AT THE NORTHEAST CORNER OF LOT 22, SECTION 14,
TOWNSHIP 4 NORTH, RANGE 2 EAST OF THE GILA AND SALT RIVER
BASE AND MERIDIAN, MARICOPA COUNTY, ARIZONA:
THENCE S00°25'22" EAST ALONG THE EAST LINE OF SAID LOT 22, A
DISTANCE OF 206.32 FEET TO THE POINT OF BEGINNING;
THENCE CONTINUING ALONG SAID EAST LINE S00°25'22" EAST, A
DISTANCE OF 457.53 FEET TO THE SOUTHEAST CORNER OF SAID LOT 22;
THENCE N89°51'57" WEST ALONG THE SOUTH LINE OF SIAD LOT 22, A
DISTANCE OF 329.04 FEET TO THE SOUTHWEST CORNER OF SIAD LOT
22;
THENCE N00°26'24" WEST ALONG THE WEST LINE OF SAID LOT 22, A
DISTANCE OF 142.33 FEET;
THENCE LEAVING SAID WEST LINE N46°06'09" EAST, A DISTANCE OF
453.47 FEET TO A POINT ON THE EAST LINE OF SAID LOT 22 AND THE
POINT OF BEGINNING.