'Pretty Good' By-Laws of Valencia Homeowners Association
These By-Laws are reproduced from
the original by scanning, character recognition and hand editing.
They are mostly faithful to the originals, but there are imperfections
in the form of scan errors, format inconsistencies, typographic and
punctuation errors. Most of the syntax errors are carried over
from the original. This version may be useful for research,
browsing,and word searches, but please rely on the original for accuracy.
Page numbers are included in the text to allow tracking with the
original.
Page numbers appear in the following format: "-x-." There is no
table of contents with this version, but you may search for text using
the 'EDIT - FIND commands on your browser.
BY-LAWS
of
VALENCIA HOMEOWNERS ASSOCIATION
ARTICLE 1
PLAN OF OWNERSHIP
1.1 Name. The name of the corporation is VALENCIA HOMEOWNERS
ASSOCIATION ("Project Association). The principal office of the Project
Association shall be located in the County of San Diego. State of
California.
1.2 Ownership. The Project, located in the City of San Diego, County of
San Diego, State of California, is submitted to the provisions of Title
6. Part 4. Division Second. of the California Civil Code.
1.3 By-Laws Applicability. The provisions of these By-Laws are
applicable to the Project. (The term "Project" as used herein shall
include the land and all structures and improvements thereon.)
1.4 Personal Application. All present or future owners. their occupants
and guests, or any other person that might use the facilities of the
Project in any manner are subject to the regulations set forth in the
Project Documents.
The mere acquisition or occupancy of any of the Residential Lots of the
Project will signify that these Project By-Laws are accepted. ratified.
and will be complied with.
ARTICLE 2
DEFINITIONS
Unless otherwise expressly provided. the following terms shall have the
following meanings:
2.1 "Community" shall mean all of the real property subject to the
Community Declaration.
2.2 "Community Architectural Control Committee" shall mean the
Committee established pursuant to the Community Declaration.
2.3 "Community Articles" shall mean the Articles of Incorpo-
ration for the Community Association.
2.4 "Community Assessments" shall mean the assessments levied by the
Community Association pursuant to the Community Declaration.
2.5 "Community Association" shall mean LA JOLLACOLONY COMMUNITY
ASSOCIATION, a California non-profit mutual benefit corporation, or any
successor entity charged with the duties, obligations, and powers of
said Community Association.
2.6 "Community Board" shall mean the Board of Directors of the
Community Association.
2.7 "Community By-laws" shall mean the By-laws for the Community
Association duly adopted by the Community Board.
2.8 "Community Common Area" shall mean all real property and all
improvements thereon in which the Community Association owns an
interest for the common use and benefit of the Community Members,
Owners, their r occupants and guests.
2.9 "Community Declaration" shall mean the Community Declaration of
Covenants, Conditions and Restrictions for LA JOLLACOLONY COMMUN ITY.
2.10 "Community Director" elected to the Community Board. shall mean
the representatives
2.11"Community Documents" shall mean the Community Articles, Community
By-laws, Community Declaration, and Community Rules.
2.12 "Community Member" shall mean the Project Association.
2.13 "Community Rules" shall mean the rules and regulations adopted by'
the Community Board for the governance of the Community.
2.14 "Design Criteria" shall mean La JOLLA COLONY DESIGN CRITERIA
MANUAL as set forth in the Community Declaration.
2.15 "Developer" shall mean DONALD L. BREN COMPANY, a California
corporation, its successors and assigns.
2.16 "lender" shall mean every person, firm, corporation, government
agency, or financial institution who is the Mortgagee of a Mortgage or
beneficiary of a Deed of Trust encumbering a Residential lot in the
Project.
2.17 "Mortgage" shall mean a First Mortgage or Deed of Trust, which
encumbers anyone (1) or more Residential Lots, and shall include any
First Mortgage or Deed of Trust securing an obligation of Developer or
an Owner, and encumbering all or any part of the property.
2. 18 "Owner" shall mean a record owner of fee simple title, or
long-term leasehold interest of record, to any Residential Lot or other
parcel of property in the Project, whether held by one (1) or more
persons or entities, and shall include Developer unless the context
expressly provides otherwise. A contract purchaser under a recorded
installment land sales contract shall be included as an Owner but those
merely having an interest in property as security for performance of an
obligation shall not be Owners.
2. 19 "Project" shall mean the entire parcel of real property, divided
or to be divided into Residential Lots, including all structures
thereon, and the Project Common Area, and any territory hereafter
annexed.
2.20 "Project Assessments" shall mean assessments determined pursuant
to this Project Declaration.
2.21 "Project Association" shall mean VALENCIA HOME OWNERS ASSOCIATION,
a California non-profit mutual benefit corporation or any successor
entity.
2.22 "Project Board" shall mean the Board of Directors of the Project
Association.
2.23 "Project Common Area" shall mean the area within the boundaries of
the Project owned by the Project Association for the benefit of the
Owners of Residential Lots within the Project, their occupants and
guests.
2.24 "Project Declaration" shall mean this Declaration of Covenants,
Conditions and Restrictions.
2.25 "Project Documents" shall mean the Project Articles, Project
By-Laws, Project Declaration, and Project Rules.
2.26 "Project Member" shall mean every person or entity who holds a
membership in the Project Association.
2.27 "Project Rules" shall mean the rules and regulations adopted by
the Project Board for the governance of the Project.
2.28 "Project Voting Rights" shall mean the number and allocation of
voting rights to Residential Lots in the Project.
2.29 "Residential Lot II shall mean any plot of land shown upon any
recorded subdivision map of the Project except Open Space Lots and
Street Lots.
ARTICLE 3
MEETINGS OF PROJECT MEMBERS
3.1 Annual Meeting. The first meeting of the Project Association shall
be held wit In forty-five (45) days after the close of escrows for the
sale of fifty-one (51 %) percent of the Residential Lots in the
Project, but in any event not later than six (6) months after the close
of escrow for the sale of the first Residential Lot 'in the Project.
Subsequent annual meetings shall be held yearly thereafter on the
anniversary of the first annual meeting or at such other reasonable
date within thirty (30) days thereof as may be determined by the
Project Board. Annual meetings and special meetings shall be held at 7:
00 p.m. or at such other time as the Project Board shall determine is
reasonable at the Project, or as close thereto as possible; provided
that unless unusual conditions exist, meetings shall not be held
outside the County of San Diego.
3.2 Special Meetings. Special meetings of the Project Mem- bers shall
be called promptly by the Project Board upon a vote by a majority of a
quorum of the Project Board or upon receipt of a written request
therefor signed by Project Members representing not less than five
percent (5%) of the voting power of the Association.
3.3 Notice of Meetings. Written notice of each annual and special
meeting of the Project Members shall be given by, or at the direction
of, the Project Board of or person authorized to call the meeting, by
mailing a copy of such notice, postage prepaid, not less than ten (10)
nor more than ninety (90) days before such meeting to each Project
Member entitled to vote thereat, addressed to the Project Member's
address last appearing on the books of the Project Association, or
supplied by such Member to the Project Association for the purpose of
notice. Such notice shall specify the place, day and hour of the
meeting and in the case of a special meeting, the purpose of the
meeting in specific terms, and the nature of the business to be under-
taken. In cases where the Project Board finds an emergency exists,
notice provided for herein may be reduced to not less than five (5)
days.
3.4 Quorum. The presence at the meeting of Project Members entitled to
cast, or of proxies entitled to cast, fifty percent (50%) of the voting
power shall constitute a quorum for any action except as otherwise
provided in the Project Documents. If, however, such quorum shall not
be present or represented at any meeting, the Project Members present,
either in person or by proxy, shall have the power to adjourn the
meeting to a time not less th3n five (5) days nor more than thirty (30)
days from the time the original meeting was called, at which meeting
the quorum requirement shall be twenty-five percent (25%). If a time
and place for the adjourned meeting is not fixed by those in attendance
at the original meeting or if, for any reason a new date is fixed for
the adjourned meeting after adjournment, notice of the time and place
of the adjourned meeting shall be given to Members in the manner
prescribed for regular meetings.
3.5 Proxies. At all meetings of Project Members, each Project Member
may vote in person or by proxy. All proxies shall be in writing and
filed with the Secretary. Every proxy shall be revocable and shall
automatically cease upon conveyance by the Project Member of his
Residential Lot.
3.6 Action Without A Meeting. Any action which may be taken by the vote
of Project Members at a regular or special meeting. except the election
of Directors where cumulative voting is' a requirement. may be taken
without a meeting if done in compliance with the provisions of Section
7513 of the Corporations Code.
ARTICLE 4
PROJECT BOARD OF DI RECTORS
4.1 Number. The affairs of this Project Association shall be managed by
a Project Board of five (5) Project Directors who need not be Project
Members.
4.2 Term. At the first meeting of Project Members following the
adoption thereof, the Project Members shall elect all five (5) Project
Directors, and at each annual meeting thereafter, the Project Members
shall elect Project Directors to replace Project Directors whose term
has expired. Upon the election of the first Project Board, the Project
Board shall be classified according to the number of votes received.
The three (3) Project Directors receiving the highest number of votes
shall serve a term of two (2) years. The remaining two (2) Project
Directors shall serve a term of one (1) year. Thereafter, at each
subsequent election, the Project Directors elected. whether two (2) or
three (3). as the case may be. shall serve for a term of two (2) years
commencing upon the election and ending when their successors have been
elected.
4.3 Removal. Any Project Director may be removed at any meeting of the
Project Members. All Project Directors, unless removed. shall hold
office until their respective successors are elected. In any vote for
the removal of more than one (1) Project Director. Project Members
shall be entitled to cumulate their votes; that is. all or any part of
the total number of votes that each Project Member has (based upon one
(1) vote per Project Member for each Project Director to be removed).
may be cast for the election of or removal of anyone (1) Project
Director. Unless the entire Project Board is removed, no individual
Project Director shall be removed prior to the expiration of his term
of office, if the number of votes cast against his removal is
sufficient to elect the Project Director if voted cumulatively at an
election at which time the same total number of votes were cast and the
entire number of Project Directors authorized at the time of the most
recent election of the Project Directors were then being elected. A
Project Director elected under this Article 4.3 shall be removed only
by the vote of at least a simple majority of Class A Members, excluding
any votes of the Developer.
4.4 Vacancies. In the event of death or resignation of a Project
Director, the successor shall be selected by the remaining Project
Directors and shall serve for the unexpired term of the predecessor. In
the event of a vacancy created by the removal of a Project Director(s),
a successor Project Director(s) shall be elected by the Members as
provided in Article 5 to serve for the unexpired term of the
Director(s) so removed. The election shall be held at the same time as
the Project Members act upon the question of removal.
ARTICLE 5
NOMINATION AND ELECTION OF PROJECT DIRECTORS
5.1 Nomination for election to the Project Board shall be made by a
nominating committee. Nominations may also be made from the floor at
the annual meeting. The nominating committee shall consist of a
chairman, who shall be a Project Director, and two (2) or more Members
of the Association. The nominating committee shall be appointed by the
Project Board prior to. each annual meeting of the Project Members, to
serve from the close of such annual meeting until the close of the next
annual meeting and such appointment shall be announced at each annual
meeting. The nominating committee shall make as many nominations for
election to the Project Board as it shall, in its discretion, determine
but not less than the number of vacancies that are to be filled. Such
nominations may be made from among Project Members or non-members.
5.2 Election to the Project Board shall be by secret written ballot.
Each Project Member or their proxy shall be entitled to cast for each
Project Director to be elected the number of votes applicable to the
class of membership he holds provided that in all elections for Project
Director where more than two (2) positions on the Project Board are to
be filled, Project Members shall be entitled to cumulate votes as
follows:
(a) If cumulative voting is applicable as provided herein, a project
Member or his proxy may cumulate his votes by casting for a candidate
the number of votes equal to the number of Project Directors to be
elected multiplied by the number of votes to which he is entitled, or
distribute his votes on the same principle to as many candidates as the
Member thinks fit;
(b) No Project Member shall be entitled to cumulate votes for a
candidate unless such candidate's name has been placed in nomination
prior to the voting and the Project Member or his proxy has given
notice at the meeting prior to the voting of the Project Member's
intention to cumulate votes. If anyone (1) Project Member has given
such notice, all Project Members shall cumulate their votes for
candidates in nomination;
(c) In any election of Project Directors, the candidates receiving the
highest number of votes are elected.
5.3 Special Procedure for Election of Project Directors.
Notwithstanding anything to the contrary herein contained, so long as
any Class 8 votes are cast at any election of Project Directors, at
least twenty percent (20%) of the incumbents on the Project Board shall
have been elected in accordance with the following procedure. If at any
election of Project Directors the votes cast by all Project Members
other than the votes cast by Developer. are insufficient when cumulated
in favor of nominees to elect twenty percent (20%) of the incumbents on
the Project Board, then the nominees sufficient in num- ber to
constitute twenty percent (20%) of the incumbents on the Project Board
receiving the highest number of votes excluding any votes of the
Developer shall be elected to the Project Board. It is intended by this
Article to provide that the Project Members other than the Developer
shall elect at least twenty percent (20%) of the Project Directors.
ARTICLE 6
MEETINGS OF PROJECT BOARD OF DIRECTORS
6.1 Regular Meetings. Regular meetings of the Project Board shall be
held monthly at such date, time and place within the Project as. may be
fixed from time to time by resolution of the Project Board. Should said
meeting fall upon a legal holiday, then that meeting shall be held at
the same time on the next day which is not a legal holiday .
6.2 Special Meetings. Special meetings of the Project Board shall be
held when called by the President of the Project Association, or by any
two (2) Project Directors, after not less than three (3) days' notice
to each Project Director.
6.3 Quorum. A majority of the number of Project Directors shall
constitute a quorum for the transaction of business. Every act or
decision done or made by a majority of the Project Directors present at
a duly held meeting at which a quorum is present shall be regarded as
the act of the Project Board.
6.4 Notice of Meetings. Notice of all meetings of the Project Board
shall be posted in at least two (2) prominent places within the Project
Common Area at least five (5) days prior to the meeting in the case of
regular meetings and three (3) days in the case of special meetings.
The notice shall specify the time and place of meeting; whether the
meeting is regular or special and in the case of special meetings, the
nature of any special business to be transacted. Notice of a meeting
need not be given to any Director who has signed a waiver of notice or
a written consent to holding of the meeting.
6.5 Notice of Meeting to Project Directors. The notice required by
Article 6.4 shall, in case of regular meetings be communicated to all
Project Directors not less than four (4) days prior to the meeting and
in the case of special meetings not less than seventy-two (72) hours
prior to the scheduled time of the meeting provided that in the case of
regular meetings or special meetings the notice of the meeting provided
herein need not be given to any Project Director who signs or has
signed a waiver of notice or written consent to the holding of the
meeting.
6.6 Open Meetings. All meetings of the Project Board shall be open to
Project Members: provided, however, no Project Member who is not a
Project Director may participate in any discussion or deliberation
unless authorized by a vote of a majority of a quorum of the Project
Board. Nothing herein shall prohibit the Project Board from adjourning
to closed meeting (executive session) when such executive session has
been approved by a majority of a quorum of the Project Board to discuss
and vote upon personnel matters and litigation in which the Project
Association is or may become involved. The nature of any and all
business to be considered in executive session shall be announced in
open session.
6.7 Action Without A Meeting. The Project Board may take actions
without a meeting if all of the Project Directors consent in writing to
.the action to be taken.
If the Project Board resolves by unanimous written consent to take
action, an explanation of the action taken shall be posted at a
prominent place or places within the Project Common Area within three
(3) days after the written consents of all Project Directors have been
obtained.
-8-
ARTICLE 7
POWERS, DUTIES AND LIMITATIONS OF PROJECT BOARD OF DIRECTORS
7.1 Powers and Duties. The powers and duties of Project Board shall
include, but not be limited to', the following:
7.1.1 Community Standards. Establish and maintain overall quality
standards for t e Project compatible with Developer's development plans
and the LA JOLLA COLONY DESIGN CRITERIA MANUAL.
7.1.2 Operation of Project Common Facilities. Own and operate and cause
to be operated the facilities situated on the Project Common Area for
the benefit and enjoyment of the Owners.
7.1.3 Project Common Area Maintenance. Manage, operate, maintain,
repair, and replace the Project Common Area and other property and
interests owned by the Project Association, and to acquire, maintain,
and replace such furnishings and equipment as the Project Boa rd shall
deem proper.
7.1.4 Community Assessments. Collect and enforce all Community
Assessments levied on Residential Lots in the Project as may be
required by the Community Board, and furnish an Assessment Roll as
defined in the Community Declaration to the Community Board.
7.1.5 Project Assessments and Funds. Establish the Project Funds,
determine, levy, collect, and enforce all Project Assessments, and
cause to be prepared all budgets and financial statements.
7.1.6 Payment From Project Funds. Provide and pay for from the Project
Funds any and all goods and/or services for the Project Common Area,
facilities, and interests or for the Project Association to fulfill any
duty or responsibility of the Project Association.
7. 1 .7 Taxes and Assessments. Payment of taxes and assessments, if
any, levied or assessed against the Project Common Area, or against any
Residential Lot if resulting in a lien against the Project Common Area;
and any other lien or encumbrance which affects the Project Common Area.
7.1.8 Maintenance of Landscaping on Residential Lots. Maintenance
of landscaping on Residential Lots, as such maintenance is required by
the Project Declaration.
7. 1 .9 Utilities. Provide and pay for all utility services necessary
or desirable for the benefit of the Project Common Area.
-9-
7.1.10 Insurance. Contract for casualty, liability, and other insurance
on behalf of the Project Association and as required herein, so long as
FNMA and/or FHLMC, holds a Mortgage or beneficia1 interest in a trust
deed encumbering a Residential Lot, or owns a Residential Lot in the
Community, the Project Association shall continuously maintain in
effect at least the insurance and fidelity bond coverage provided for
in the Project Declaration, except to the extent that such requirements
may have been waived in writing by FNMA and/or FHLMC. The Project
Association shall continuously maintain in effect such casualty, flood
and liability insurance policies and fidelity bond meeting the
requirements as established by FNMA and/or FHLMC, as set forth in the
FNMA and/or FHLMC Servicer's Guide, or otherwise. The Project Board
shall review all insurance policies on at least an annual basis to
assure full insurance protection at all times. Nothing herein shall
require the Project Board to provide casualty or liability insurance
for the Owners or the Residential Lots or structures thereon.
7.1.11 Management. Services of a person or firm to manage the Project
and services of such other personnel as the Project Board shall deem
necessary or proper for the operation of the Project. Notwithstanding
any provisions to the contrary in the Project Declaration, no agreement
for the services of a person or firm to manage the Project shall exceed
a term of one (1) year and any such agreement shall provide for
termination by either party, without cause, and without payment of a
termination fee on ninety (90) days or less written notice.
7.1.12 Legal and Accounting. Legal and accounting services necessary or
proper for the operation of the Project or the facilities or for the
enforcement of the Project Declaration.
7.1.13 Project Safety. Provide for such services for the protection and
safety of the Project Common Area as the Project Board deems reasonable
and appropriate, including, but not limited to, security guards and
patrols, electronic security devices, and equipment and other related
security services, equipment, and material.
7. 1.14 Circulation System. Control, operate, maintain, and regulate
the pedestrian and bicycle circulation system of the Project in a
manner that will facilitate and encourage the use thereof by all Owners.
7.1.15 Rules. Formation of rules for the operation of the Project,
Project Common Area, and facilities owned or controlled by the Project
Association.
7.1.16 Discipline. Initiate and execute disciplinary proceedings
against Project Members and Owners for violations of provisions of the
Project Documents in accordance with the procedures set forth in said
documents.
7.1.17 Enforcement. Enforce applicable provisions of the Project
Documents
7.1.18 Delegation of Powers. Delegate its powers to committees,
officers, or employees of the Project Association as expressly
authorized by the Project Documents.
7.1.19 Entry. Entering into any Residential Lot as necessary in
connection Wit construction, maintenance, or emergency repair for the
benefit of the Common Area or the owners in common.
7.1.20 Furnishing Documents. Make available to any prospective
purchaser of a Residential Lot, any Owner of a Residential Lot, any
first Mortgagee and the holders, insurers and guarantors of the first
Mortgage on any Residential Lot, current copies of the Project
Declaration, the Project Articles of Incorporation, the Project
By-Laws, the rules governing the Residential Lot and all other books,
records and financial statements of the Project Association. The
Project Board shall also make available the Community Documents.
7.2 Limitations. The Project Board shall be prohibited from taking any
of the following actions, except with the vote or written consent of a
majority of the voting power of the Association residing in Project
other than the Developer.
7.2.1 Contracts. Entering into a contract with a third person wherein
the third person will furnish goods or services for the Project Common
Area or the Project Association for a term longer than one (1) year
with the following exceptions:
(a) A management contract, the terms of which have been approved by the
Federal Housing Administration or Veterans Administration.
(b) A contract with a public utility company if the rates charged for
the materials or services are regulated by the Public Utilities
Commission; provided, however, that the term of the contract shall not
exceed the shortest term for which the supplier will contract at the
regulated rate.
(c) Prepaid casualty and/or liability insurance policies of not to
exceed three (3) years duration provided that the policy permits short
rate cancellation by the insured.
7.2.2 Capital Improvements. Incurring aggregate expenditures for
capital improvements to the Project Common Area in any fiscal year in
excess of five percent (5%) of the budgeted gross expenses of the
Project Association for that fiscal year.
7.2.3 Sale of Property. Selling during any fiscal year property of the
Project Association having an aggregate fair market value greater than
five percent (5%) of the budgeted gross expenses of the Project
Association for that fiscal year.
7.2.4 Compensation. Paying compensation to Project Directors or to
Project Officers for services performed in the conduct of the Project
Association's business; provided, however, that the Project Board may
cause a Project Director or Project Officer to be reimbursed for
expenses incurred in carrying on the business of the Project
Association.
7.2.5 Vacancies. Filling of a vacancy on the Project Board created by
the removal of a Project Director(s).
ARTICLE 8
PROJECT OFFICERS AND THEIR DUTIES
8. 1 Enumeration of Offices. The Project officers shall be a President,
and a Vice President, who shall at all times be Project Directors, a
Secretary, and a Chief Financial Officer, and such other officers as
the Project Board may from time to time by resolution create.
8.2 Election of Officers. The election of Project Officers shall take
place at the first meeting of the Project Board following each annual
meeting of the Project Members.
8.3 Term. The Project Officers shall be elected annually by the Project
Board and each shall hold office for one (1) year unless he sooner
resigns, or shall be removed, or otherwise disqualified to serve.
8.4 Special Appointments. The Project Board may elect such. other
Officers as the affairs of the Project Association may require, each of
whom shall hold office for such period, have such authority, and
perform such duties as the Project Board may from time to time
determine.
8.5 Resignation and Removal. Any Project Officer may be removed from
office with or without cause by the Project Board. Any Project Officer
may resign at any time by giving written notice to the Project Board,
the President, or the Secretary. Such resignation shall take effect on
the date of receipt of such notice or at any later time specified
therein, and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
-12-
8.6 Vacancies. A vacancy in any office may be filled by appointment by
the Project Board. The Project Officer appointed to fill such vacancy
shall serve for the remainder of the term of the Project Officer he
replaces.
8.7 Multiple Offices. The offices of. Secretary and Chief Financial
Officer may be held by the same person. No person shall simultaneously
hold more than one (1) or any of the other offices except in the case
of specia1 offices created pursuant to Article 8.4.
8.8 Duties. The duties of the Project Officers are as follows:
(a) President. The President shall preside at all membership meetings
and at all meetings of the Project.. Board, and shall see that orders
and resolutions of the Project Board, and shall see that orders and
resolutions of the Project Board are carried out. The President shall
sign all leases, mortgages, deeds and other written instruments and
shall co-sign all checks and promissory notes of the Project
Association.
(b) Vice-President. The Vice-President shall act in the place and stead
of the President in. the event of his absence, inability or refusal to
act, and shall exercise and discharge such other duties as may be
required of him by the Project Board.
(c) Secretary. The Secretary shall record the votes and keep the
minutes of all meetings and proceedings of the Project Board and of the
Project Members; keep the corporate seal of the Project Association and
affix it on all papers requiring said seal; serve notice of meetings of
the Project Board and of the Project Members; keep appropriate current
records showing the Project Members of the Project Association and
their addresses, and shall perform such other duties as required by the
Project Board.
(d) Chief Financial Officer. The Chief Financial Officer shall receive
and deposit in appropriate bank accounts all moneys of the Project
Association, and shall disburse such funds as directed by resolution of
the Project Board; shall sign all checks and promissory notes of the
Project Association; keep proper books of account; cause an annual
report of the Project Association books to be made at the completion of
each fiscal year; and shall prepare an annual budget and a statement of
income and expenditures. A copy of the report and the budget and
statement of income and expenditures shall be delivered to Members as
provided in the Project Declaration.
-13-
ARTICLE 9
INDEMNIFICATION OF PROJECT OFFICERS, PROJECT DIRECTORS AND AGENTS
9.1 Right of Indemnification. The Project Association shall indemnify
such Project Director, officer, committee member, employee, or other
agents of the Project Association who is a party to or is threatened to
be made a party to any proceeding, including a proceeding by or in the
right of the Project Association, by reason of the fact that such
person .is or was a Project Director, officer, committee member,
employee or agent of the Project Association against all expenses and
liabilities actually and reasonably paid or incurred in connection with
such proceeding to the maximum extent permitted by the California
Non-Profit Mutual Benefit Corporation Law. Terms used in this Article 9
shall have the same meaning as in Section 7237 of the California
Non-Profit Mutual Benefit Corporation Law.
9.2 Approval of Indemnity. Upon written request to the Project Board by
any person seeking indemnification hereunder, the Project Board shall
promptly determine whether the applicable standard of conduct set forth
in the California Non-Profit Mutual Benefit Corporation Law has been
met and, if so, the Project Board shall authorize indemnification. If
the Project Board cannot authorize indemnification because the number
of Project Directors who are parties to the proceeding with respect to
which indemnification is sought prevent formation of a quorum of
Project Directors who are not parties to such proceeding the Project
Board shall promptly call a special meeting of Project Members. At such
meeting, the Project Members shall determine whether the applicable
standard of conduct set forth in the California Non-Profit Mutual
Benefit Corporation Law has been met and, if so, the Project Members
shall authorize indemnification. Project Members or other persons
seeking to be indemnified shall not be entitled to vote on the question
of indemnification.
9.3 Advancement of Expenses. To the full extent permitted by law and
except as is otherwise determined by the Project Board in a specific
instance, expenses incurred by a Project Director, officer, committee
member, employee or agent seeking indemnification under these Project
By-Laws in defending any proceeding covered by these Project By-Laws
shall be advanced by the Project Association prior to the final
disposition of such proceeding upon receipt of an undertaking by or on
behalf of the Project Director, officer, committee member, employee, or
agent to repay such amount unless it is ultimately deter-mined that
such person is entitled to be indemnified by the Project Association
therefore.
-14-
ARTICLE 10
ASSESSMENTS
As more fully provided in the Project Declaration, each Project Member
and Developer is obligated to pay the Project Association Project
Assessments which are secured by a continuing lien upon the Residential
Lots against which the assessment is made. Any Project Assessments
which are not paid when due shall be delinquent. The Project
Association may bring an action at law against the Project Member
personally obligated to pay the same, or foreclose the lien against the
Residential Lot and interest, cost, and reasonable attorneys' fees of
any such action shall be added to the amount of such assessment. No
Project Member may waive or otherwise escape liability for the
assessment provided for herein by non-use of the Project Common Area or
Community Common Area or abandonment of his Residential Lot.
ARTICLE 11
PROJECT BOOKS AND RECORDS
11 .1 Project Member's Right of Inspection. All of the books, records
and papers of the Project Association and any committee thereof, shall
at all times during reasonable business hours be subject to inspection
by any Project Director or any Project Member. The Project Documents
and any committee thereof shall be available for inspection and copying
by any Project Member or designated representative of the principal
office of the Project Association, where copies may be purchased at
reasonable cost. The Project Board shall establish reasonable rules
with respect to:
(a) Notice to be. given to the custodian of the records by the Project
Member desiring to make the inspection;
(b) Hours and days of the week when such an inspection may be made; and
(c) Payment of the cost of reproducing copies of the documents
requested by a Project Member.
11. 2 Project Director's Right of Inspection. Every Project Director
shall nave the absolute right, at any reasonable time. to inspect all
books, records, and documents of the Project .Association and the
physical properties owned or controlled by the Project Association. The
right of inspection by a Project Director includes the right to make
extracts and copies of documents.
-15-
ARTICLE 12
PROJECT BUDCET AND FINANCIAL STATEMENTS
The following financial and related information shall be regularly
prepared and distributed by the Board to all Project Members of the
Project Association:
(a) A pro forma operating statement (budget) consisting of the
following information for each fiscal year shall be distributed not
less than forty-five (45) days before the beginning of the fiscal year.
(i) Estimated revenue and expenses on an accrual basis.
(ii) The amount of the total cash reserves of the Project Association
currently available for replacement or major repair of common
facilities and for contingencies.
(iii) An itemized estimate of the remaining life of, and the methods of
funding to defray repair, replacement or additions to major components
of the Project Common Area and facilities for which the Project
Association is responsible.
(iv) A general statement setting forth the procedures used by the
Project Board in the calculation and establishment of reserves to
defray the costs of repair, replacement or additions to major
components of the Project Common Area and facilities for which the
Project Association is responsible.
(b) A balance sheet - as of an accounting date which is the last day of
the month closest in time to six (6) months from the date of closing of
the first sale of a Residential Lot in the Project - and an operating
statement for the period from the date of the first closing to the said
accounting date, shall be distributed within sixty (60) days after the
accounting date. This operating statement shall include a schedule of
assessments received and receivable identified by the number of the.
Residential Lots and the name of the entity assessed.
(c) An annual report consisting of the following shall be distributed
within one hundred twenty (120) days after the close of the fiscal
year.
(i) A balance sheet as of the end of the fiscal year.
(ii) An operating (income) statement for .the fiscal year.
-16-
(iii) A statement of changes in financial position for the fiscal year.
(iv) For any fiscal year In which the gross income to the Project
Association exceeds $75,000, a copy of the review of the annual report
prepared in accordance with generally accepted accounting principles by
a licensee of the California State Board of Accountancy.
If the report referred to in Article 11 (c) above is not pre- pared by
an independent accountant, it shall be accompanied by the certificate
of an authorized officer of the Project Association that the statements
were prepared without audit from the books and records of the Project
Association.
In addition to financial statements, the Board shall annually
distribute within sixty (60) days prior to the beginning of the fiscal
year a statement of the Project Association's policies and practices in
enforcing its remedies against Project Members for defaults in the
payment of regular and special assessments including the recording and
foreclosing of liens against Project Members' Residential Lots.
ARTICLE 13
AMENDMENT
13.1 Vote Required. These Project By-Laws may be amended at a regular
or special meeting of the Project Members, and shall re- quire the vote
or written consent of the following:
(a) At least fifty-one percent (51%) of the Class A Members; and
(b) At least fifty-one percent (51%) of the Class B Members.
If a two (2) class voting structure is no longer in effect because of
the conversion of Class B votes to Class A votes, the amendment to
these By-Laws shall require the vote or written consent of the
following:
(a) At least fifty-one percent (51%) of the voting power of the
Association; and
(b) At least fifty-one percent (51%) of the votes of Members other than
the Developer.
13.2 Conflict Between Documents. In the case of any conflict between
the Project
-17-
Articles and these Project By-laws, the Project Articles shall control;
in the case of any conflict between the Project Declaration and these
Project By-Laws, the Project Declaration shall control.
ARTICLE 14
MISCELLANEOUS
The fiscal year of the Project Association shall begin on the first day
of January and end on the 31st day of December of every year, except
that the first fiscal year shall begin on the date of incorporation.
CERTIFICATE OF ADOPTION OF BY-LAWS
Adoption By Incorporator
The undersigned, appointed in the Project Articles of Incorporation to
act as the Incorporator of the herein named Corporation, hereby adopts
the same as the Project By-Laws of said Corporation. Executed this 13th
day of December, 1984
-18-
CERTIFICATE OF SECRETARY
THIS IS TO CERTIFY:
That I am the duly elected. qualified and acting Secretary of the
above-named corporation; that the foregoing By-Laws were adopted as the
By-Laws of said corporation on the date set forth above by the person
appointed in the Articles of Incorporation to act as the Incorporator
of said corporation.
IN WITNESS WHEREOF, I have hereunto subscribed my name and set my hand
and affixed the seal on this 14th day of December, 1984.
signed